John D’Agostino v. MasterCard International Inc.

Docket No. 2016-1592, -1593 (IPR2014-00543, IPR2014-00544)

December 22, 2016

Brief Summary: PTAB claim construction vacated; conclusions regarding disclosure of prior art found to be supported by substantial evidence.

Summary: D’Agostino appealed PTAB decision after IPR (filed by MasterCard) that the claims of US 7,840,486 and 8,036,988 relating to processes for purchasing goods and services using transaction codes are unpatentable for anticipation and obviousness. The two decisions were considered by the FC panel to be “materially identical” and it therefore only cited the “‘988 Decision”. The claims were summarized as falling into two categories, those relating to “one or more merchants” limitations and those “limiting transactions to a single merchant”, it being “undisputed that the former are unpatentable if the latter are unpatentable”. The PTAB “relied only on the ‘single merchant’ claims in its decisions”, finding the prior art “Coehn meets the single-merchant limitation through an embodiment that limits credit-card transactions to a particular chain of stores” and “discloses the step of defining and designating the ‘payment category’ before the transaction code is generated.” The FC panel first considered the Board’s interpretation of “single merchant” under BRI (citing Cuozzo, US 2016; In re Skvorecz (FC 2009) (BRI “does not include giving claims a legally incorrect interpretation”)); In re Suitco Surface (FC 2010) (“claims should always be read in light of the specification and teachings in the underlying patent”)); and Microsoft (FC 2015) (“the Board ‘should also consult the patent’s prosecution history’”)), finding it “departed from or misapplied the…clear meaning” when “it concluded that the claim limitation covers a situation in which a customer first seeks a transaction code for an identified ‘chain of stores’ and, later, picks a specific store within that chain” (e.g., customer designates Target as chain and then a particular Target store). The FC panel concluded “this scenario necessarily falls outside the single-merchant limitation” (“telling the authorizing entity to limit transactions to Target is not limiting the number of merchants…to one”). It also explained that “[t]he only way to avoid that straightforward logic would be to separate ‘single merchant’ (in the first clause) from ‘particular merchant’ (in the second clause)” which cannot be done because “the single merchant limitation does not allow that separation”, and therefore vacated the Board’s findings. The FC panel disagreed with D’Agostino’s argument regarding the Board’s conclusions regarding what Cohen discloses, finding “[s]ubstantial evidence” supporting those conclusions (In re Jolley, FC 2002 (“If the evidence in record will support several reasonable but contradictory conclusions, we will not find the Board’s decision unsupported by substantial evidence simply because the Board chose one conclusion over another plausible alternative.”))

This entry was posted in Anticipation (35 USC 102), Claim Construction, Inter Parties Review (IPR), IPR, Obviousness. Bookmark the permalink.

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