PTAB

PGR2023-00012

Samsung Electronics Co Ltd v. CardWare Inc

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: MULTI-FUNCTION ELECTRONIC PAYMENT CARD AND DEVICE SYSTEM
  • Brief Description: The ’286 patent discloses a payment system comprising a physical payment card device free of visible fixed payment numbers and a separate computing device (e.g., a smartphone). The computing device generates and conveys limited-use payment information for transactions, which is then validated by a card issuer authority.

3. Grounds for Unpatentability

Ground 1A: Claims 1-2, 7-10, 12-16, and 18 are obvious over Smith in view of Kobylkin and Gomez.

  • Prior Art Relied Upon: Smith (Application # 2013/0232083), Kobylkin (Application # 2013/0166441), and Gomez (Patent 9,600,808).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Smith discloses the core payment system, including a computing device (smartphone) that uses a mobile cloud account number (MCA) and a payment cryptogram for contactless transactions. Kobylkin was cited to teach a "substantially blank" payment card free of printed account numbers, which can be activated or funded using a smartphone. Gomez was asserted to teach generating a unique authentication cryptogram for each transaction, based in part on a transaction sequence count, and only after user authentication (e.g., PIN or fingerprint), to enhance security. The combination of these references allegedly teaches all limitations of the independent claims.
    • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) would combine Smith and Kobylkin to enhance security and convenience. Using a blank card from Kobylkin with Smith's mobile-based system would reduce the risk of fraud from physical card skimming. A POSITA would incorporate Gomez's teachings into the Smith/Kobylkin system to further reduce fraud potential by preventing unauthorized use of a stolen mobile device and stopping the reuse of intercepted cryptograms, aligning with Smith's stated security goals.
    • Expectation of Success: A POSITA would have a reasonable expectation of success because the references describe using similar devices (smartphones) for their respective functions. Integrating Kobylkin's blank card concept and Gomez's per-transaction authentication into Smith's mobile payment framework involved applying known security techniques to a known system, yielding predictable results.

Ground 1B: Claim 3 is obvious over Smith in view of Kobylkin, Gomez, and Saarisalo.

  • Prior Art Relied Upon: Smith, Kobylkin, Gomez, and Saarisalo (Application # 2009/0291634).
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground built upon the combination in Ground 1A. Saarisalo was introduced to teach the specific limitation of claim 3: a touch-screen user interface operable to enable and disable NFC payment transactions. Saarisalo explicitly discloses a user interface on an NFC-enabled mobile device that allows a user to select settings for the NFC component, including the ability to "disable and enable card emulation all together."
    • Motivation to Combine: A POSITA would add Saarisalo's feature to the primary combination to provide the user with greater control and security. The ability to disable NFC functionality when not in use was a known method to prevent unauthorized wireless "skimming" or accidental transactions, representing a simple and desirable improvement to the user interface of Smith's mobile device.

Ground 1D: Claims 5, 11, and 17 are obvious over Smith in view of Kobylkin, Gomez, and Mestre.

  • Prior Art Relied Upon: Smith, Kobylkin, Gomez, and Mestre (Application # 2011/0112918).

  • Core Argument for this Ground:

    • Prior Art Mapping: This ground added Mestre to the core combination to address limitations related to user transaction approval and offline-only use. Mestre teaches a payment-enabled mobile device that displays a prompt for the user to explicitly accept or deny a transaction via touch-screen buttons. Mestre also describes an "offline-only" mode, which addresses claim 5's limitation of a card device being absent payment information necessary for online transactions and limited to in-store use.
    • Motivation to Combine: A POSITA would be motivated to incorporate Mestre's user approval prompt into the Smith system as another security enhancement to prevent fraudulent transactions on a stolen device. Furthermore, implementing an "offline-only" mode as taught by Mestre would be a straightforward way to create a more secure, limited-use payment instrument as claimed.

  • Additional Grounds: Petitioner asserted additional obviousness challenges for the remaining claims based on the core combination of Smith, Kobylkin, and Gomez, with the addition of Slonecker (for locking/unlocking accounts), Sahota (for specific cryptogram generation methods), Moosavi (for displaying an NFC logo), and Mullen (for receiving transaction validation messages from an issuer).

4. Key Claim Construction Positions

  • Printed Matter Doctrine: Petitioner argued that several claim limitations should be afforded no patentable weight under the printed matter doctrine. Specifically, phrases such as "free of any fixed payment numbers visible thereon" (claims 1, 15, 20) and "absent a payment number information necessary for completing an online transaction" (claim 5) were asserted to relate merely to the content of information on the card device. Petitioner contended these limitations lack a functional or structural relationship to the substrate (the card) and thus do not distinguish the invention from the prior art.

5. Arguments Regarding Discretionary Denial

  • Petitioner argued that discretionary denial under the Fintiv framework would be inappropriate.
  • The trial date in the parallel district court litigation was projected for May 2024, while a Final Written Decision (FWD) in this Post Grant Review (PGR) would be expected in July 2024, making the dates very close and subject to potential court delays.
  • Petitioner noted that investment in the district court case was minimal, with no claim construction or significant discovery having occurred.
  • Petitioner stipulated that, if review is instituted, it will not pursue the same invalidity grounds in the district court litigation, eliminating concerns of duplicative efforts. The strength of the merits, particularly since none of the cited art was considered during prosecution, was argued to weigh strongly in favor of institution.

6. Relief Requested

  • Petitioner requests institution of a Post Grant Review and cancellation of claims 1-27 of the ’286 patent as unpatentable.