Takeaway: A petition for inter partes review will be denied if the primary reference does not disclose all of the steps performed in the required order and the secondary references do not remedy this defect.

In its Decision, the Board denied the petition to institute inter partes review of claims 51, 53, and 55-56. The ’302 patent generally relates to a transaction system for authenticating a transaction, document, or thing such that the information associated with at least one of the parties involved is coded to produce a joint code. The joint code then is used to code information relevant to the transaction, document, or record to produce a Variable Authentication Number. Thus, during subsequent stages of the transaction, only parties capable of reconstructing the joint code will be able to decode the VAN properly in order to re-derive the information.

The Board began with claim construction. The ’302 patent has expired, so the Board’s review of the claims is similar to that of a district court’s review. Petitioner submitted to the Board an exhibit reciting proposed claim constructions of certain terms advanced by parties, and the constructions adopted, during various district court proceedings. Here, the Board construed “variable authentication number” to mean “a variable number resulting from a coding operation that can be used in verifying the identity of a party or the integrity of information or both.”

Next, the Board addressed whether claims 51, 53, and 55 are anticipated by Davies, as argued by Petitioner. Patent Owner argued that the embodiment relied upon in Davies does not perform the claimed steps of “receiving” and “generating” in what it argued is the order required so that the “generating” step has antecedent basis. The Board determined that “at least a portion of the receiving step must precede the generating step, because the VAN is generated using a portion of the received funds transfer information, and it logically follows that the generating must occur after receipt of at least a portion of the funds transfer information in the receiving step.” The Board then determined that the cited portions of Davies do not disclose the required “receiving” and “generating” steps in the required sequence.

The Board then analyzed whether claims 51, 53 and 55 would have been obvious over Davies and Nechvatal and whether claim 56 would have been obvious over Davies, Fischer, and Piosenka. Petitioner did not rely upon Nechvatal, Fischer, or Piosenka with respect to the “receiving” or “generating” steps recited in claim 51. Patent Owner argued, and the Board agreed, that the Board should not institute review on obviousness grounds when the cited additional reference does not make up for the deficiency in the first reference.

Accordingly, based on the record before it, the Board determined that Petitioner failed to demonstrate a reasonable likelihood of prevailing on its challenges and therefore denied the petition as to all challenged claims.

Visa, Inc. v. Leon Stambler, IPR2013-00694
Paper 10: Decision Denying Institution of Inter Partes Review
Dated: October 31, 2014
Patent 5,793,302
Before: Bryan F. Moore, Trenton A. Ward, Peter P. Chen
Written By: Ward
Related Proceedings: Stambler v. Visa Inc., Civ. Action No. 0-14-cv-60492-KMM (S.D. Fla.); Federal Reserve Banks v. Stambler, IPR2013-00341; Federal Reserve Banks v. Stambler, IPR2013-00409; Fifth Third Bank v. Stambler, IPR2014-00211