UNITED STATES PATENT AND TRADEMARK OFFICE _____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD

_____________________

AMERICAN EXPRESS COMPANY AND AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.

Petitioners

v.

SIGNATURE SYSTEMS, LLC. Patent Owner

_____________________

Case CBM: Unassigned

Patent 8,423,402 June 12, 2015

_____________________

PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW OF U.S. PATENT NO. 8,423,402 UNDER 35 U.S.C. § 321 AND § 18 OF THE

LEAHY-SMITH AMERICA INVENTS ACT

Mail Stop: Patent Board Patent Trial and Appeal Board U.S. Patent and Trademark Office P.O. Box 1450 Alexandria, VA 22313-1450

-i- AMECURRENT 716617904.1 12-Jun-15 15:42

LIST OF EXHIBITS

Exhibit 1001: U.S. Patent No. 8,423,402 Exhibit 1002: U.S. Patent No. 8,511,550 Exhibit 1003: U.S. Patent No. 8,313,023 Exhibit 1004: “American Express Creates Membership RewardsSM:

Loyalty Program Combining Travel, Retail and Food,” published by Newslink on October 18, 1995 (“Newslink”)

Exhibit 1005: U.S. Patent No. 5,774,870 to Storey (“Storey”) Exhibit 1006: Expert Declaration of Sandeep Chatterjee, Ph.D. Exhibit 1007: Prosecution File History of U.S. Patent No. 8,423,402 Exhibit 1008: Office Action in U.S. Patent Application No. 14/068,243, dated

January 23, 2015 Exhibit 1009: Transitional Program for Covered Business Method

Patents; 77 Fed. Reg. 48,734, 48,735 (Aug. 14, 2012) Exhibit 1010: Signature Systems, LLC. v. American Express Company et

al., Case No. 1:15-cv-20063-RNS, Dkt. No. 7, Second Amended Complaint, dated March 2, 2015

Exhibit 1011: U.S. Patent No. 3,083,906 Exhibit 1012: U.S. Patent No. 3,795,795 Exhibit 1013: 10-K Report filed by Continental Airlines with the SEC on

February 24, 1997 Exhibit 1014: 10-K Report filed by Continental Airlines with the SEC on

March 20, 1998 Exhibit 1015: 10-K Report Filed by Delta Air Lines with the SEC on

September 30, 1996

-ii-

Exhibit 1016: 10-K Report Filed by Delta Air Lines with the SEC on

September 27, 1999 Exhibit 1017: Merriam-Webster definition of “transfer” Exhibit 1018: Restatement (Second) of Contracts § 17 (1981) Exhibit 1019: Curriculum Vitae of Sandeep Chatterjee, Ph.D.

TABLE OF CONTENTS

Page

-iii- AMECURRENT 716617904.1 12-Jun-15 15:42

I. INTRODUCTION AND STATEMENT OF RELIEF REQUESTED (37 C.F.R. § 42.22(a)) ...................................................................................... 1

II. PRELIMINARY STATEMENT ..................................................................... 1

III. MANDATORY NOTICES INTRODUCTION AND STATEMENT OF RELIEF REQUESTED (37 C.F.R. § 42.22(a)) ........................................ 4

A. Real Party-In-Interest ............................................................................ 4

B. Related Matters ...................................................................................... 4

C. Lead and Back-Up Counsel and Service Information .......................... 5

IV. OVERVIEW OF THE ’402 PATENT AND ITS PROSECUTION HISTORY ........................................................................................................ 6

A. The Challenged Claims ......................................................................... 6

B. Specification ........................................................................................ 10

C. Prosecution History ............................................................................. 12

V. GROUNDS FOR STANDING ...................................................................... 14

A. Petitioner Has Been Sued For Infringement of the ’402 Patent and Is Not Estopped ............................................................................ 14

B. The ’402 Patent Is A Covered Business Method Patent ..................... 14

1. The Challenged Claims Are Directed To An Apparatus For “Performing Data Processing Or Other Operations Used In The Practice, Administration, Or Management Of A Financial Product Or Service.” ............................................. 16

C. The Challenged Claims Are Not Directed to A “Technological Invention” ............................................................................................ 18

1. The Challenged Claims Do Not Recite Technological Feature(s) That Are Novel and Unobvious ............................... 19

2. The Challenged Claims Do Not Solve A Technical Problem Using A Technical Solution ....................................... 23

VI. STATEMENT OF PRECISE RELIEF REQUESTED FOR EACH CLAIM CHALLENGED .............................................................................. 24

A. Claims for which Review is Requested .............................................. 24

TABLE OF CONTENTS (continued)

Page

--

B. Statutory Grounds of Challenge .......................................................... 27

C. Person Having Ordinary Skill In The Art In 1999 .............................. 27

D. Claim Construction ............................................................................. 28

1. Broadest Reasonable Interpretation .......................................... 28

2. Means-Plus-Function Limitations ............................................. 28

3. “Consideration” ......................................................................... 34

4. Additional Terms ...................................................................... 35

VII. THE CHALLENGED CLAIMS ARE UNPATENTABLE .......................... 36

A. Ground No. 1: The Challenged Claims Are Invalid Under 35 U.S.C. § 101 ........................................................................................ 36

1. The Challenged Claims Are Directed to the Abstract Idea of Currency Conversion ............................................................ 40

2. The Recitations of Generic Computer Elements in the Challenged Claims Does Not Transform the Abstract Idea Into a Patent-Eligible Invention ................................................ 44

3. The Basic Functions Disclosed in the Challenged Claims Can be Performed by Humans .................................................. 51

B. Ground No. 2: The Challenged Claims are Invalid Under 35 U.S.C. § 103(a) as Being Obvious Over Newslink in view of Storey and AAPA ................................................................................ 52

1. Newslink Teaches or Suggests Earning and Storing a First Set of Reward Points and a Second Set of Reward Points ....... 54

2. Newslink Teaches or Suggests Converting Reward Points Based on a Conversion Rate ..................................................... 57

3. Newslink Teaches or Suggests Decreasing Points and Adding and Combining Converted Points With Existing Points of the Second Type ........................................................ 59

4. Newslink Teaches or Suggests Redemption of Converted Reward Points ........................................................................... 61

TABLE OF CONTENTS (continued)

Page

--

5. Newslink Teaches or Suggests Conveying Consideration Corresponding to the Converted Points .................................... 62

6. Newslink in Combination With Storey and AAPA Teaches Conversion of Points Via a Web Page ........................ 65

7. Claim Chart for the Challenged Claims And Newslink, Storey, and AAPA ..................................................................... 70

VIII. CONCLUSION .............................................................................................. 80

-vi-

TABLE OF AUTHORITIES

Page(s) CASES

Accenture Global Servs., GmbH v. Guideware Software, Inc., 728 F.3d 1336 (Fed. Cir. 2013) .......................................................................... 49

Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) ................................................................................. passim

Bancorp Servs. L.L.C. v. SunLife Assurance Co., 687 F.3d 1266 (Fed. Cir. 2012) .................................................................... 49, 51

Bilski v. Kappos, 130 S. Ct. 3218 (2010) .................................................................................... 3, 36

Clear With Computers, LLC v. Altec Inds., Nos. 6:14-cv-79, 6:14-cv-89, 2015 WL 993392 (E.D. Tex. Mar. 3, 2015) ....... 52

Clear with Computers v Dick’s Sporting Goods, Inc., 21 F. Supp. 3d 758, 761, 764-65 (E.D. Tex. 2014) ............................................ 41

CLS Bank Int’l v. Alice Corp., 717 F.3d 1269 (Fed. Cir. 2013) (en banc), aff’d, 134 S. Ct. 2347 (2014) .......... 49

Constant v. Advanced Micro-Devices Inc., 848 F.2d 1560 (Fed. Cir. 1988) .......................................................................... 69

Content Extraction & Transmission LLC v. Wells-Fargo Bank, Nat’l Assoc., 776 F.3d 1343 (Fed. Cir. 2014) .......................................................................... 38

CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) .......................................................................... 46

DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014) .................................................................... 38, 43

Dealertrack, Inc. v. Huber, 674 F. 3d 1315 (Fed. Cir. 2012) ............................ 48, 49

Diamond v. Diehr, 450 U.S. 175 (1981) ........................................................................................ 3, 36

TABLE OF AUTHORITIES (cont’d)

Page(s)

-vii-

Digitech Image Techs., LLC v. Sigma Corp., No. 8:12-cv-1681-ODW(MRWx), 2013 WL 3947137 (C.D. Cal. July 31, 2013) , aff’d sub nom., Digitech Image Techs, LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014) .................................................................. 43

Digitech Info. Sys. v. BMW Fin. Servs., 864 F. Supp. 2d 1289 (M.D. Fla. 2012), aff’d, 504 F. App’x 920 (Fed. Cir. 2013) ................................................................................................................... 44

Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948) ............................................................................................ 37

Gottschalk v. Benson, 409 U.S. 63 (1972) .................................................................................. 38, 41, 44

In re Inland Steel Co., 265 F.3d 1354 (Fed. Cir. 2001) .......................................................................... 53

In re Katz, 639 F.3d 1303 (Fed. Cir. 2011) .......................................................................... 47

In re Nomiya, 509 F.2d 566 (C.C.P.A. 1975) ............................................................................ 70

In re Venner, 262 F.2d 91 (C.C.P.A. 1958) .......................................................................... 3, 66

In re Yamamoto, 740 F.2d 1569 (Fed. Cir. 1984) ........................................................................... 28

Intellectual Ventures I LLC v. Mfrs. & Traders Trust Co., Civ. No. 13-1274-SLR, 2014 WL 7215193 (D. Del. Dec. 18, 2014) .......... 47, 48

Internet Patents Corp. v. Gen. Auto. Ins. Servs., Inc., 429 F. Supp. 3d 1264, 1266, 1269 (N.D. Cal. 2013) .......................................... 48

Kroy IP Holdings, LLC v. Safeway, Inc., No. 2-12-cv-800-WCB, 2015 WL 3452050 (E.D. Tex. May 29, 2015) ............ 45

TABLE OF AUTHORITIES (cont’d)

Page(s)

-viii-

KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007) ................................................................................ 52, 53, 66

Le Roy v. Tatham, 55 U.S. (14 How.) 156 (1853) ............................................................................ 38

Loyalty Conversion Sys. Corp. v. Am. Airlines, Inc., No. 2:13-CV-655, 2014 WL 4364848 (E.D. Tex. Sept. 3, 2015) ............... passim

Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012) ............................................................................ 37, 38, 45

McKesson Automation, Inc. v. Swisslog Holding AG, Civ. No. 06-28-SLR-LPS, 2009 WL 3648455 (D. Del. Oct. 30, 2009), report accepted in part, rejected in part by 721 F. Supp. 2d 283 (D. Del. 2010) ............................................................................................................... 3, 66

Medical Instrumentation & Diagnostics Corp. v. Elekta AB, 344 F.3d 1205 (Fed. Cir. 2003) .......................................................................... 29

Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008) .......................................................................... 66

OIP Techs., Inc. v. Amazon.com, Inc., No. C-12-1233, 2012 WL 3985118 (N.D. Cal. Sept. 11, 2012)......................... 41

Parker v Flook, 437 U.S. 584 (1978) ............................................................................................ 41

Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) .................................................... 27, 28

Riverwood Int’l Corp. v. R.A. Jones & Co., 324 F.3d 1346 (Fed. Cir. 2003) .......................................................................... 70

SiRF Tech., Inc. v. ITC, 601 F.3d 1319 (Fed. Cir. 2010) .......................................................................... 49

TABLE OF AUTHORITIES (cont’d)

Page(s)

-ix-

Soverain Software LLC v. Newegg Inc., 705 F.3d 1333 (Fed. Cir.), amended on reh’g, 728 F.3d 1332 (Fed. Cir. 2013) ................................................................................................................... 66

TriMed, Inc. v. Stryker Corp., 514 F.3d 1256 (Fed. Cir. 2008) .......................................................................... 29

Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) ............................................................................ 38

Uniloc USA, Inc. v. Rackspace Hosting, Inc., 18 F. Supp. 3d 831, 837 (E.D. Tex. 2013) .......................................................... 41

STATUTES

35 U.S.C. § 101 ................................................................................................. passim

35 U.S.C. § 103 .......................................................................................... 1, 4, 79, 80

35 U.S.C. § 112(6) ................................................................................................... 28

35 U.S.C. § 321 .................................................................................................... 1, 25

AIA § 18 ............................................................................................................... 1, 25

AIA § 18(d)(1) ................................................................................................... 15, 18

OTHER AUTHORITIES

37 C.F.R. § 42.8(b)(3) ................................................................................................ 5

37 C.F.R. § 42.8(b)(4) ................................................................................................ 5

37 C.F.R. § 42.10 ....................................................................................................... 6

37 C.F.R. § 42.10(b) .................................................................................................. 6

37 C.F.R. § 42.300(b) .............................................................................................. 28

37 C.F.R. § 42.300 et seq. .......................................................................................... 1

TABLE OF AUTHORITIES (cont’d)

Page(s)

-x-

37 C.F.R. § 42.301 ............................................................................................. 15, 18

37 C.F.R. § 42.302(a) ................................................................................................. 14

37 C.F.R. § 42.302(b) ................................................................................................. 14

37 C.F.R. § 42.304(b)(1) .......................................................................................... 24

37 C.F.R. § 42.304(b)(2) .......................................................................................... 27

Transitional Program for Covered Business Method Patents, 77 Fed. Reg. 48,734 (Aug. 14, 2012) ....................................................................................... 15

Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756 (Aug. 14, 2012) .................. ................................................................................................................. 18, 20, 35

157 Cong. Rec. S1365 (daily ed. Mar. 8, 2011) ...................................................... 15

CBM2012-00001, Paper 36 (P.T.A.B. Jan. 9, 2013) ......................................... 16, 18

CBM2012-00002, Paper 10 (P.T.A.B. Jan. 25, 2013) ............................................. 20

CBM2012-00003, Paper 15 (P.T.A.B. Feb. 12, 2013) ............................................ 19

CBM2014-00034, Paper No. 8 (P.T.A.B. May 15, 2014) ....................................... 24

CBM2014-00061, Paper No. 11 (P.T.A.B. July 25, 2014) ..................................... 18

CBM2014-00095, Paper 32 (P.T.A.B. Sept. 29, 2014) ......................... 15, 17, 19, 35

CBM2014-00096, Paper 23 (P.T.A.B. Sept. 29, 2014) ............................... 14, 17, 19

CBM2014-00100, Paper No. 10 (P.T.A.B. Sept. 9, 2014) ...................................... 22

CBM2014-00140, Paper No. 9, at 10 (P.T.A.B. Dec. 9, 2014) ............................... 17

CBM2014-00146, Paper No. 19 (P.T.A.B. Dec. 9, 2014) ....................................... 17

M.P.E.P. § 2129 ....................................................................................................... 70

M.P.E.P. § 2144.04 .............................................................................................. 4, 66

TABLE OF AUTHORITIES (cont’d)

Page(s)

-xi-

Restatement (Second) of Contracts § 17 (1) (1981) ................................................ 62

-1-

I. INTRODUCTION AND STATEMENT OF RELIEF REQUESTED (37 C.F.R. § 42.22(A))

Pursuant to 35 U.S.C. § 321 and § 18 of the Leahy-Smith America Invents

Act (“AIA”) and pursuant to 37 C.F.R. § 42.300 et seq., American Express

Company and American Express Travel Related Services Company, Inc.

(collectively, “Petitioner” or “AMEX”) hereby requests Covered Business Method

review of claims 1-16 (the “Challenged Claims”) of U.S. Patent No. 8,423,402

(“the ’402 Patent,” attached as Exhibit 1001), now purportedly assigned to

Signature Systems, LLC. (“Patent Owner” or “Signature Systems”). As set forth

below, the Challenged Claims of the ’402 Patent are invalid under 35 U.S.C.

§§ 101 and 103.

II. PRELIMINARY STATEMENT

On March 2, 2015, Signature Systems filed a Second Amended Complaint

(Ex. 1010) against AMEX in the Southern District of Florida, asserting

infringement of at least claim 5 of the ’402 Patent (Ex. 1010, ¶ 25). The ’402

Patent, entitled “Method and System for Electronic Exchange Of Reward Points,”

claims the abstract idea of a currency conversion. See Ex. 1001 at 3:37-42. The

’402 Patent issued on April 16, 2013 from U.S. Patent Application No. 13/553,437,

filed on July 19, 2012, and claims priority to Provisional Application No.

60/140,603, filed on June 23, 1999.

-2-

According to the ’402 Patent, the alleged invention “allows a user to

purchase goods or services using accumulated award points held by a variety of

award programs.” Ex. 1001 at 3:64-66. Specifically, the ’402 Patent is directed

to “convert[ing] the quantity of reward points of the first type decreased from the

reward account on the reward server computer into a corresponding amount of

reward points of the second type at a predetermined reward server conversion

rate.” Ex. 1001 at 14:5-9 (representative claim 5). In other words, the ’402

Patent is directed to converting one type of rewards points into a second type of

rewards points. See Declaration of Dr. Sandeep Chatterjee (“Chatterjee Dec.” or

Ex. 1006), ¶ 22.

The Challenged Claims add no technological invention or solution to this

abstract idea. Instead, they claim the use of generic computer functionality to

implement the idea of converting reward points, which are used as currency to

purchase goods or services, from one type to another. See e.g., Ex. 1001 at 5:58-

61; see also id. Fig. 4 (showing reward servers 10, 12, 14, and trading server 20, as

general purpose computers); Ex. 1006, Chatterjee Dec., ¶ 24. General purpose

computers were indisputably well-known, conventional mechanisms by the time

the ’402 Patent was filed in 2012, as well as by its claimed priority date in 1999.

Ex. 1006, Chatterjee Dec., ¶¶ 28-31 (describing the general purpose computers

disclosed as prior art in the ’402 Patent). It is well settled that such an abstract idea

-3-

does not become patentable merely because it is accomplished using standard

computer components. Bilski v. Kappos, 130 S. Ct. 3218, 3230 (2010) (quoting

Diamond v. Diehr, 450 U.S. 175, 191-92 (1981)); Alice Corp. v. CLS Bank Int’l,

134 S. Ct. 2347, 2358 (2014). Thus, the Challenged Claims are unpatentable under

35 U.S.C. § 101.

The Challenged Claims are also invalid for being rendered obvious in view

of the Newslink publication entitled “American Express Creates Membership

RewardsSM: Loyalty Program Combining Travel, Retail and Food,” dated October

18, 1995 (“Newslink”) (Ex. 1004) alone, or in combination with, U.S. Patent No.

5,774,870 to Storey (“Storey”) (Ex. 1005) and/or Applicant Admitted Prior Art

(“AAPA”) that is described in the background section of the ’402 Patent. For

example, four years before the priority date of the ’402 Patent, Newslink disclosed

transferring Membership Rewards points to airline miles or hotel points. See Ex.

1004 at 3; see also Ex. 1006, Chatterjee Dec., ¶ 109. Although, Newslink discloses

initiating the transfer of reward points over the phone while the ’402 Patent claims

initiating a transfer using a web page, mere incorporation of web pages and/or

routine Internet technology into well-known techniques has also been held to be

obvious. See e.g., McKesson Automation, Inc. v. Swisslog Holding AG, Civ. No.

06-28-SLR-LPS, 2009 WL 3648455, at *26 (D. Del. Oct. 30, 2009) (citing In re

Venner, 262 F.2d 91, 95 (C.C.P.A. 1958)), report accepted in part, rejected in part

-4-

by 721 F. Supp. 2d 283 (D. Del. 2010); see also M.P.E.P. § 2144.04 at III.

Moreover, both Storey and AAPA explicitly disclose the management of reward

programs and redemption of reward points over the Internet. See Ex. 1001 at

generally at Figs. 1-3 and corresponding description at 1:393:25; see also Ex.

1005, Abstract; Ex. 1006, Chatterjee Dec., ¶¶ 119, 115-116. Thus, it would have

been obvious to one of ordinary skill in the art by 1999 to automate the process

disclosed in Newslink in view of the teachings in Storey and/or AAPA. See Ex.

1006, Chatterjee Dec., ¶¶ 115-116 (describing Storey), 119 (describing AAPA).

Accordingly, the Challenged Claims are invalid under 35 U.S.C. § 103 for being

obvious in view of prior art.

Petitioner respectfully requests that the PTAB institute review of the

Challenged Claims, and find that the claims are invalid under 35 U. S. C. §§ 101

and 103.

III. MANDATORY NOTICES INTRODUCTION AND STATEMENT OF RELIEF REQUESTED (37 C.F.R. § 42.22(A))

A. Real Party-In-Interest

The real parties-in-interest are American Express Company and American

Express Travel Related Services Company, Inc.

B. Related Matters

The ’402 Patent is presently the subject of litigation in the United States

District Court for the Southern District of Florida in the case entitled: Signature

-5-

Systems, LLC., v. American Express Company and American Express Travel

Related Services Company, Inc., Case No. 1:15-cv-20063-RNS, filed January 9,

2015.

C. Lead and Back-Up Counsel and Service Information

In accordance with 37 C.F.R. §§ 42.8(b)(3) and 42.8(b)(4), Petitioner

identifies Saqib Siddiqui as lead counsel and Stephen E. Baskin as back-up

counsel, and identifies the following service information:

Lead Counsel and Service Info. Backup Counsel

Saqib J. Siddiqui

USPTO Reg. No. 68,626

Mayer Brown, LLP

1999 K Street, N.W.

Washington, D.C. 20006-1101

Telephone: (202) 263-3167

Fax: (202) 263-5367

Email:

ssiddiqui@mayerbrown.com

Stephen E. Baskin

pro hac vice motion requested

Mayer Brown, LLP

1999 K Street, N.W.

Washington, D.C. 20006-1101

Telephone: (202) 263-3364

Fax: (202) 263-3300

Email: sbaskin@mayerbrown.com

Petitioner will request authorization to file a motion for Stephen E. Baskin to

appear before the USPTO pro hac vice. Mr. Baskin is an experienced patent

-6-

litigation attorney and is serving as counsel for AMEX in the related matter in the

Southern District of Florida involving the ’402 Patent. Mr. Baskin has familiarity

with the subject matter at issue in this proceeding, and has previously been

admitted pro hac vice in CBM proceedings before the PTO. Petitioner intends to

file the motion to appear pro hac vice under 37 C.F.R. § 42.10 once the Board

authorizes the motion. Pursuant to 37 C.F.R. § 42.10(b), a power of attorney

accompanies this Petition.

IV. OVERVIEW OF THE ’402 PATENT AND ITS PROSECUTION HISTORY

A. The Challenged Claims

The ’402 Patent has four independent claims – claims 1, 5, 9, and 13, and

twelve dependent claims – claims 2-4, 6-8, 10-12, and 14-16. Claims 1 and 9 are

directed to “computer-implemented method[s] for earning, exchanging and

redeeming reward points” (Ex. 1001 at 12:37-38 and 14:41-42), claims 5 and 13

are means-plus-function claims directed, respectively, to “a reward server

computer” (id. at 13:40-41) and “a rewards exchange computer” (id. at 15:48-49).

All the independent claims include the same steps of earning reward points,

exchanging reward points, conveying consideration for exchanging the reward

points, and enabling a user to redeem the exchanged reward points. Id. at 12:37-

13:31, 13:40-14:32, 14:41-15:39, and 15:48-16:49; see also Ex. 1006, Chatterjee

Dec., ¶ 39. These claims are long on patent-speak that seek to elevate and

-7-

complicate the simple notion of keeping records of two different forms of reward

points and then allowing one form to be converted to the other. Ex. 1006,

Chatterjee Dec., ¶ 43. For example, claim 5 of the ’402 Patent recites:

5. A reward server comprising:

memory means for storing a reward account comprising

a first set of reward points of a first type previously

earned by a user from a first reward issuing entity as a

result of a first transaction executed between the user and

the first reward issuing entity;

communications means for communicating over a

computer network with a user computer operated by the

user and a reward exchange computer that stores in a

reward exchange account a second set of reward points

of a second type earned by the user as a result of a

second transaction executed between the user and a

second reward issuing entity which is different from the

first reward issuing entity; and

processing means programmed to:

provide a web page to a user computer, the web

page comprising a control for initiating communication

over the computer network with the reward exchange

computer;

initiate, in response to receiving from the user

operating the user computer a selection of the control

from the web page, communication over the computer

network with the reward exchange computer to exchange

-8-

a quantity of reward points of the first type,

designated by the user operating the user computer, from

the reward account on the reward server computer into

reward points of the second type for adding to the

reward exchange account on the reward exchange

computer by:

decreasing the quantity of reward points of

the first type designated by the user from the

reward account on the reward server computer,

causing the reward exchange computer to

convert the quantity of reward points of

the first type decreased from the reward

account on the reward server computer into a

corresponding amount of reward points of the

second type at a predetermined reward server

conversion rate,

add the corresponding amount of reward of

the second type to the reward exchange account,

and

combine the corresponding amount of

reward points of the second type added to the

reward exchange account with the second set of

reward points of the second type previously stored

in the reward exchange account, and

conveying consideration to the reward exchange

computer, the consideration having a value equivalent to

-9-

the quantity of reward points of the first type decreased

from the reward account on the reward server computer;

whereby the user is able to request the reward

exchange computer to redeem at least some of the

combined reward points of the second type from the

reward exchange account for an item selected by the

user, and the reward exchange computer is able to

redeem the requested combined reward points of the

second type from the reward exchange account by

decreasing the reward exchange account by the combined

reward points of the second type requested to be

redeemed by the user for the item selected by the user.

Ex. 1001 at 13:40-14:32 (emphases added). Here claim 5 is reciting the steps that

are performed by a reward server during conversion of reward points. Independent

claims 1 and 9 are directed to this same general concept but recite steps that are

performed by both the reward exchange computer and reward server during the

conversion. Id. at 12:37-13:31 (claim 1 reciting “a reward server . . . storing” and

“a reward exchange computer storing”) and 13:40-14:32 (same recitation as claim

1). Independent claim 13 claims the same concept from the perspective of the

reward exchange computer, only reciting the means included in the reward

exchange computer. Id. at 15:48-16:49. “Generally, there is no meaningful

distinction between the independent claims” since, at their core, they are all

-10-

directed to the abstract idea of currency conversion. Ex. 1006, Chatterjee Dec., ¶

43.

B. Specification

The ’402 Patent states that the invention “allows a user to purchase goods or

services using accumulated award points held by a variety of award programs.”

Ex. 1001 at 3:64-66. In the ’402 Patent, “[a] system and method are disclosed

where the system allows the user to redeem the accumulated reward points from a

plurality of reward entities for exchange with a merchant.” Id. at 4:9-11.

Moreover, “the user can purchase points from the system, borrow points from the

system, etc., and basically treat the points as cash consideration for purposes of

such transactions.” Id. at 10:19-21 (emphasis added). In other words, the ’402

Patent relates to using reward points as currency to purchase goods and services.

See id. at Fig. 7; see also Ex. 1006, Chatterjee Dec., ¶ 23.

As shown in Fig. 4, the disclosed system includes reward servers 10, 12, and

14, which “may be of any type of accessible server capable of holding data about

a user along with a corresponding earned value that is negotiable for other goods,

services, or points of another system” and “may be any type of computer system

that allows users to access the system in order to perform the processes involved in

this invention.” Ex. 1001 at 5:44-47 and 5:58-61 (emphasis added).

-11-

While the system also includes “a merchant computer 30”, and a “user

computer 40” that is in communication with a network 2, there is no disclosure in

the specification that identifies these structures as anything more than a generic

server, computer and network. See Ex. 1006, Chatterjee Dec., ¶¶ 24, 27.

Specifically, when a user is ready to redeem the reward points that are gathered

from the various reward programs, the user uses the user computer 40 to access a

specific reward account with one or more of reward servers 10, 12, 14. Ex. 1001

at 5:11-12 and 6:5-24 (emphasis added). Upon the user’s request, “trading server

20 obtains the reward points from reward servers 10, 12, 14,” and allows the

user to redeem those reward points by purchasing goods and services from, for

example, merchant 30. Id. at 6:30-31 and 7:5-46 (emphasis added). The trading

server 20 then “conveys consideration to the merchant computer 30

equivalent to the cost of the item” purchased from the merchant. Id. at 7:5-46

(emphasis added). Moreover, the “network may comprise any type of

communication process where computers may contact each other.” Id. at 5:13-14

(emphasis added). Thus, the specification of the ’402 Patent makes clear that the

conversion disclosed in the claims can be done by any type of computer system,

using any type of communication process. Id. at 5:13-61; see also Ex. 1006,

Chatterjee Dec., ¶¶ 29-31 (comparing the components disclosed as “prior art” in

the ’402 Patent and the components disclosed in Figure 4 of the ’402 Patent).

-12-

C. Prosecution History

U.S. Patent Application No. 13/553,437 (“the ’437 Application”), filed on

July 19, 2012, issued as the ’402 Patent and seeks priority from provisional

application No. 60/140,603, filed on June 23, 1999, by virtue of six parent

applications that all purport to be continuations with the first application that was

filed on June 23, 2000 as U.S. Patent Application No. 09/602,222.

On September 26, 2012, the USPTO issued a Non-Final Rejection rejecting

all the claims based on indefiniteness, obviousness, and double-patenting grounds.

Ex. 1007 at 71, 82. In response to the Office Action, Signature Systems filed a

terminal disclaimer and amended the claims to overcome the prior art by arguing

that a cited reference “teaches reward redemption while the present claims are for

reward exchange.” See e.g., Ex. 1007 at 124-126 (capitalization omitted). On

January 9, 2013, the USPTO issued a Final Rejection maintaining that the prior art

disclosed the claimed limitations. Id. at 189-191. In response to the Final Office

Action, Signature Systems amended the claims to include “conveyance of

consideration from the reward server computer to the exchange computer [and] . . .

use of a predetermined conversion rate,” and argued that the prior art does not

teach these recitations. Id. at 255-257. On March 4, 2013, the USPTO issued a

Notice of Allowance. Id. at 270.

-13-

The ’402 Patent issued on April 16, 2013, prior to the Supreme Court’s Alice

decision. Thus, it is not unexpected that the prosecution history of the ’402 Patent

did not include any discussion about statutory subject matter and/or whether these

claims were eligible for patentability under 35 U.S.C. § 101. However, in a

continuation of the ’402 Patent (U.S. Patent Application No. 14/068,243, filed

October 31, 2013), claims similar to the Challenged Claims were rejected by the

USPTO after Alice under 35 U.S.C. § 101 for being directed to an abstract idea.

See Office Action in U.S. Patent Application No. 14/068,243, dated January 23,

2015 (Ex. 1008) at 3-4. While rejecting the claims, the USPTO asserted that the

“claim(s) is/are directed to the abstract idea of manipulating points in various

reward and exchange accounts by moving points by one account to another (i.e.,

fundamental economic practice) . . . [and] [t]he additional element(s) or

combination of elements in the claim(s) other than the abstract idea per se

amount(s) to no more than: (i) mere instruction to implement the idea on a

computer, and/or (ii) recitation of generic computer structure.” Id. The rejected

claims in U.S. Patent Application No. 14/068,243 also included a “reward

exchange computer,” “a reward server,” and recited steps for storing reward points

and exchanging reward points, yet the USPTO rejected these claims as being

directed to an abstract idea. See id. The statutory deadline for filing a response to

-14-

this action was April 23, 2015, which can be extended up to July 23, 2015.

Signature Systems has yet to file a response.

V. GROUNDS FOR STANDING

A. Petitioner Has Been Sued For Infringement of the ’402 Patent and Is Not Estopped

Petitioner has been sued for infringement of at least claim 5 of the ’402

Patent in the United States District Court of Southern Florida. See Ex. 1010,

Second Amended Complaint, ¶¶ 24-25. Petitioner therefore meets the requirements

for standing under 37 C.F.R. § 42.302(a).

Petitioner is not estopped from challenging the claims on the grounds

identified in the petition. Petitioner has not been party to any other petition for inter

partes review or post-grant review of the challenged claims, nor has anyone in

privity with Petitioner. Petitioner therefore meets the requirements for standing under

37 C.F.R. § 42.302(b).

B. The ’402 Patent Is A Covered Business Method Patent

The PTAB has previously held that claims directed to the conversion of

rewards points – which are substantially similar to the Challenged Claims – were

“eligible for covered business method patent review.” See Claim 1 of U.S. Patent

No. 8,511,550 (“the ’550 Loyalty Patent” or Ex. 1002) at 6:42-7:26 and

CBM2014-00096, Institution Decision, Paper 23 at 21 (P.T.A.B. Sept. 29, 2014);

see also Claim 32 of U.S. Patent No. 8,313,023 (“the ’023 Loyalty Patent” or Ex.

-15-

1003) at 9:59-10:27 and CBM2014-00095, Institution Decision, Paper 32, at 23

(P.T.A.B. Sept. 29, 2014). For reasons expressed in these earlier decisions, the

’402 Patent similarly qualifies for covered business method review. For at least

the reasons expressed in these earlier decisions, the ’402 Patent similarly qualifies

for covered business method review.

The AIA defines a covered business method (“CBM”) patent as “a patent

that claims a method or corresponding apparatus for performing data processing or

other operations used in the practice, administration, or management of a financial

product or service . . . .” AIA § 18(d)(1); see also 37 C.F.R. § 42.301. The phrase,

“used in the practice, administration, or management of a financial product or

service,” has wide applicability. “[P]ractice, administration, [or] management” is

“intended to cover any ancillary activities related to a financial product or service,

including. . . marketing, customer interfaces, [and] Web site management and

functionality.” 157 Cong. Rec. S1365 (daily ed. Mar. 8, 2011) (statement of Sen.

Schumer).

The USPTO noted that the AIA’s legislative history demonstrates that

“financial product or service” should be “interpreted broadly,” encompassing

patents “claiming activities that are financial in nature, incidental to a financial

activity or complementary to a financial activity.” Transitional Program for

Covered Business Method Patents, 77 Fed. Reg. 48,734, 48,735 (Aug. 14, 2012)

-16-

(“Exhibit 1009”). This Board has also explained that “[t]he term financial is an

adjective that simply means relating to monetary matters.” CBM2012-00001,

Paper 36, at 23 (P.T.A.B. Jan. 9, 2013). According to the USPTO, “patents subject

to covered business method patent review are anticipated to be typically

classifiable in Class 705.” Ex. 1009 at 48,739. The ’402 Patent is also classified

in Class 705. Ex. 1001 at 1.

A patent “need have only one claim directed to a covered business method to

be eligible for review.” CBM2015-00002, Paper 17, Institution Decision at 10

(P.T.A.B. Apr. 22, 2015).

1. The Challenged Claims Are Directed To An Apparatus For “Performing Data Processing Or Other Operations Used In The Practice, Administration, Or Management Of A Financial Product Or Service.”

The ’402 Patent and its claims satisfy the “financial product or service”

prong for CBM eligibility. For example, the Challenged Claims recite a method or

apparatus for performing the steps of “convert[ing] the quantity of first reward

points of the first type . . . into a corresponding amount of rewards point of the

second type,” “conveying consideration,” and/or enabling a sale “whereby the user

is able to request the reward exchange computer to redeem at least some of the

combined reward points.” See e.g., Ex. 1001 at 14:2-24 (claim 5); see also similar

features in claims 1, 9, and 13. Thus, the ’402 Patent and its claims are directed to

-17-

management of the financial service of converting reward points of a first type to a

second type, and facilitating a sale via redemption of these reward points.

Indeed, the ’402 Patent concedes that “the user can purchase points from the

system, borrow points from the system, etc., and basically treat the points as

cash consideration for purposes of such transactions.” Ex. 1001 at 10:19-21

(emphasis added); Ex. 1006, Chatterjee Dec., ¶ 23. Further, the ’402 Patent

requires conveyance of consideration indicating that the exchange of points is also

a financial transaction. See e.g., Ex. 1001 at 14:18-22 (claim 5 reciting

“conveying consideration to the reward exchange computer”). In other words, the

’402 Patent and its claims relates to using reward points as currency to purchase

goods and service. See id. at Fig. 7; see also Ex. 1006, Chatterjee Dec., ¶ 23. The

PTAB has previously stated that purchasing is a financial activity. CBM2014-

00140, Paper No. 9, at 10 (P.T.A.B. Dec. 9, 2014) (describing “the purchase of a

product by a user” as “a financial transaction”); CBM2014-00146, Paper No. 19,

at 9 (P.T.A.B. Dec. 9, 2014) (describing the “purchase . . . of an automobile” as

“financial activity” to which the claimed method was complementary). Similarly,

the PTAB has also held that claims directed to converting reward points and using

them to purchase goods are eligible for CBM review. See CBM2014-00096,

Paper 23, at 21; CBM2014-00095, Paper 32, at 23.

-18-

For these reasons, the ’402 Patent is related to the financial activity of

purchasing, and therefore satisfies the “financial product or service” prong of 37

C.F.R. § 42.301. See CBM2014-00061, Paper No. 11, at 8 (P.T.A.B. July 25,

2014) (finding that a claimed “invention relat[ing] to ‘the purchasing of goods and

services’” satisfied the financial product or service prong).

C. The Challenged Claims Are Not Directed to A “Technological Invention”

The AIA excludes “patents for technological inventions” from the definition

of CBM patents. AIA § 18(d)(1). To determine whether a patent is for a

technological invention, “the following will be considered on a case-by-case basis:

whether the claimed subject matter as a whole recites a technological feature that is

novel and unobvious over the prior art; and solves a technical problem using a

technical solution.” 37 C.F.R. § 42.301. To institute a CBM post-grant review, a

patent need only have one claim directed to a CBM, and not a technological

invention, even if the patent includes additional claims that are directed to

technological inventions. Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756,

48,756 (Aug. 14, 2012); see also CBM2012-00001, Paper 36, at 26.

Decisions by the PTAB illustrate how these principles may be applied to

system claims comprising hardware elements. For example, in considering a

system claim directed to calculating insurance risk value, the PTAB stated that “on

this record, none of the claim elements, such as sensors, vehicle bus, wireless

-19-

transmitter, database, computer, memory, and server is novel and unobvious when

considered ‘without’ the insurance nature of the data processed.” CBM2012-

00003, Paper 15, at 13-14 (P.T.A.B. Feb. 12, 2013). Moreover, “simply using

technology, even novel technology, is not sufficient to qualify for the

‘technological invention’ exception.” Id. at 10. The patent must recite a novel

technological feature that is not obvious over the prior art. The Challenged Claims

fail to recite a novel and unobvious technological feature and fail to recite a

technical solution to a technical problem. See CBM2014-00096, Paper 23, at 21

and CBM2014-00095, Paper 32, at 13.

1. The Challenged Claims Do Not Recite Technological Feature(s) That Are Novel and Unobvious

None of the technological features recited in the Challenged Claims are

novel or nonobvious over the prior art. The specification describes each claimed

feature as being capable of implementation using technological features that were

known in the art prior to the time of filing. See Ex. 1006, Chatterjee Dec., ¶ 45

(“the individual features described by the claims 1-16 of the ’402 Patent, as well as

the combination of those features recited in the claims, were well known prior to

June 1999”). In addition, as explained below, nothing in the combination of

features that comprise the Challenged Claims converts the claimed subject matter,

as a whole, into a technological feature that is novel and nonobvious over the prior

art.

-20-

Any technological features recited by the Challenged Claims were already

known technologies at the time the application for the ’402 Patent was filed. Ex.

1006, Chatterjee Dec., ¶ 45. “Mere recitation of known technologies, such as

computer hardware, communication or computer networks, software, memory,

computer-readable storage medium, scanners, display devices or databases, or

specialized machines, such as an ATM or point of sale device,” or “[r]eciting the

use of known prior art technology to accomplish a process or method, even if that

process or method is novel and non-obvious,” will “not typically render a patent a

technological invention.” 77 Fed. Reg. at 48,764; see also CBM2014-00140,

Paper No. 9, at 11 (P.T.A.B. Jan. 25, 2013).

By way of example, the only technology recited in claim 1 is “a reward

server” “a reward exchange computer;” and “a web page.” Ex. 1001 at 12:37-

13:31. Similarly, the only technology recited in claim 5 is “[a] reward server

computer comprising” “memory means,” “communication means,” “processing

means,” and “a web page.” Id. at 13:40-14:32. These same features are recited in

the remaining claims. Id. at 13:32-16:57; see Ex. 1006, Chatterjee Dec., ¶ 46. The

’402 Patent makes clear that all of these “technological” components are nothing

but well-known computer components. Ex. 1006, Chatterjee Dec., ¶ 47. For

example, the ’402 Patent makes no distinction between the admitted “PRIOR

ART” components that are depicted in Figure 1 and the “block diagram of

-21-

components of the present invention” depicted in Figure. Ex. 1001 at Figs. 1 and 4

and 4:52-59 (showing identical depictions of computers and servers); Ex. 1006,

Chatterjee Dec., ¶ 47.

The ’402 Patent also acknowledges that these components are simply

implemented with the use of any computer or any server. Ex. 1001 at Fig. 4; Ex.

1006, Chatterjee Dec., ¶ 48. Specifically, with respect to the claimed “reward

server, the ’402 Patent discloses that “[a]ny type of reward server may also be used

in this system” (Ex. 1001 at 5:17-18) and that reward servers 10, 12, and 14, which

“may be of any type of accessible server capable of holding data about a user

along with a corresponding earned value that is negotiable for other goods,

services, or points of another system.” Ex. 1001 at 5:44-47 (emphasis added); Ex.

1006, Chatterjee Dec., ¶ 48. Because the “reward server” recited in the Challenged

Claims may be any type of server any components or means (e.g., memory or

processing means) recited in the “reward server” corresponds to nothing but

generic computer components such as a memory and a processor. Ex. 1001 at Fig.

4; Ex. 1006, Chatterjee Dec., ¶ 60.

With respect to the claimed “reward exchange computer” of the Challenged

Claims, the ’402 Patent again emphasizes that “[t]he trading server computer may

be any type of computer system that allows users to access the system in order to

-22-

perform the processes involved in this invention.” Ex. 1001 at 5:58-61 (emphasis

added).

With respect to the claimed “web page” or “communication means,” the

’402 Patent states that “the merchant computer 30 is representative of any site that

can communicate with the network that has goods or services for sale or trade” (id.

at 5:31-34 (emphasis added)) and that “[i]n the preferred embodiment all of the

systems described are accessible through the Internet and the user may freely

navigate to any site by means well known in the art.” Id. at 5:61-64 (emphasis

added). Further, the ’402 Patent concedes that accessing reward accounts over the

Internet was well known in the art. See id. at 1:56-2:22(“ClickRewards program

allows a user to redeem accumulated points for obtaining merchandise over the

Internet”); see also id. at 5:13-14 (“network may comprise any type of

communication process where computers may contact each other”).

None of the claimed components of the Challenged Claims are

“technological feature[s]” under 37 C.F.R. § 42.301(b) because the claim requires

no particular technology and the specification—to the extent it identifies any

“technology” at all—makes it clear that known, prior art technology can be used to

perform the steps. See Ex. 1006, Chatterjee Dec., ¶ 49; see also CBM2014-00100,

Paper No. 10, at 18 (P.T.A.B. Sept. 9, 2014) (“Reciting the use of known prior art

technology to accomplish a process or method . . . does not render the claimed

-23-

subject matter a technological invention.”). Thus, claims 1 and 5 are directed to a

non-technological invention. Further, because “there is no meaningful distinction

between the independent claims,” independent claims 9 and 13 are also directed to

a non-technological invention. See Ex. 1006, Chatterjee Dec., ¶ 43. Similarly, the

dependent claims 2-4, 6-8, 10-12, and 14-16 merely add one of the following well-

known or non-technical features: a hyperlink, credit card reward program, and/or

airline reward program, and are also directed to a non-technological invention. See

Ex. 1001 at 13:32-16:57.

2. The Challenged Claims Do Not Solve A Technical Problem Using A Technical Solution

The Challenged Claims do not solve a technical problem using a

technological solution. See Ex. 1006, Chatterjee Dec., ¶ 50. The ’402 Patent does

not claim any improvement in computer technology. The only problem the ’402

Patent purports to solve is to provide increased flexibility in the redemption of

reward points such that “users may submit frequent flyer awards or credits

accumulated for other types of transactions for redemption or translation into a

form readily acceptable by a participating merchant.” Ex. 1001 at 3:37-40; Ex.

1006, Chatterjee Dec., ¶ 51. The purported solution is not a technological solution

but – as claimed – it merely requires communication between known computers

using known technology to allow a user to complete a purchase by redeeming

reward points. Ex. 1001 at 5:30-61; Ex. 1006, Chatterjee Dec., ¶¶ 51-53.

-24-

Facilitating completion of a purchase is a financial solution. See CBM2014-00034,

Paper No. 8, at 16 (P.T.A.B. May 15, 2014) (“allowing an application provider to

be charged for actual computing resources used . . . is not a technical solution”). In

addition, because the claimed method can be performed entirely using known

technologies or by human without a computer, the purported problem and solution

of the Challenged Claims is not “technical.” See id. (finding that “allowing

distribution and execution on a network having distributed computer resources”

was not a technical problem solved by the claim where the patent explained that

such networks were well known).

Moreover, converting reward points was not a problem in June 1999. Those

of ordinary skill in at art already knew how to perform such conversion. See infra

at § VII.B. Thus, the ’402 Patent does not solve any problem using any solution,

let alone a technological problem using a technological solution.

Since the Challenged Claims each meet the statutory requirements, the ’402

Patent is a covered business method patent.

VI. STATEMENT OF PRECISE RELIEF REQUESTED FOR EACH CLAIM CHALLENGED

A. Claims for which Review is Requested

Pursuant to 37 C.F.R. § 42.304(b)(1), Petitioner identifies the Challenged

Claims as follows: claims 1-16 of the ’402 Patent. Petitioner respectfully requests

-25-

review under 35 U.S.C. § 321 and AIA § 18 of the Challenged Claims, and the

cancellation of those claims as unpatentable.

Independent claims 1, 5, 9, and 13 recite known components (e.g., reward

server, reward exchange computer, memory means, processing means,

communication means, web page) to facilitate a purchase by performing currency

conversion. Ex. 1001 at 12:37-13:31, 13:40-14:32, 14:41-15:39, and 15:48-16:49;

see also id. at Fig. 1; Ex. 1006, Chatterjee Dec., ¶¶ 31-32 and 39-40.

Claim 5, set forth in full in section IV.A above, recites means that perform

the functions of: (a) storing reward points of a first type; (b) communicating with a

user computer and a reward exchange computer that is storing a second type of

reward points; (c) providing a web page to allow a user to initiate communication

between reward server and reward exchange computer to exchange reward points;

(d) initiating communication to exchange reward points; (e) causing the reward

exchange computer to exchange the reward points from the first type to a second

type; (f) conveying consideration to the reward exchange computer for the

exchanged points; and (g) enabling the user to redeem the exchanged reward

points. See Ex. 1001 at 13:40-14:32; see also infra at § VI.C (identifying the

disclosed structure corresponding to the claimed means).

Independent claims 1, 9, and 13 are similar to claim 5 and recite similar

steps and/or functions but from different perspectives. See Ex. 1006, Chatterjee

-26-

Dec., ¶¶ 39, 43. For example, claims 1 and 9 are also directed to the abstract idea

of transferring reward points, but instead of only reciting the functions/components

of the reward server – as claimed in claim 5 – these claims recite the functions

carried out by both the reward exchange computer and reward server during the

conversion of reward points. See Ex. 1001 at 12:37-13:31 and 14:41-15:39.

Independent claim 13 recites the means and functions performed by the means

within the reward exchange computer during conversion of reward points. See id.

at 15:48-16:49; see also infra at § VI.C (identifying the disclosed structure

corresponding to the claimed means). There is no meaningful distinction between

these claims as they are all directed to the abstract idea of currency conversion.

See Ex. 1006, Chatterjee Dec., ¶¶ 39, 43.

Dependent claims 2-4, 6-8, 10-12, and 14-16 all add just one of three

features as shown below:

Dependent Claims Claim Language

2, 6, 10, and 14 “wherein the control comprises a hyperlink or a button”

3, 7, 11, and 15 “wherein the reward account on the reward server computer is associated with a credit card reward program.”

4, 8, 12, and 16 “wherein the reward account on the reward server computer is associated with an airline reward program.”

-27-

B. Statutory Grounds of Challenge

Pursuant to 37 C.F.R. § 42.304(b)(2), Petitioner identifies the specific

statutory grounds on which it challenges claims 1-16 of the ’402 Patent. Petitioner

respectfully requests that the Challenged Claims be cancelled under the following

grounds:

Ground 1: Claims 1-16 are unpatentable under 35 U.S.C. § 101 for being

directed to an abstract idea.

Ground 2: Claims 1-16 are invalid under 35 U.S.C. § 103 for being obvious

over Newslink in view of Storey and AAPA.

The claim constructions, reasons for unpatentability, and specific evidence

supporting this request are detailed below.

C. Person Having Ordinary Skill In The Art In 1999

“The ordinary and customary meaning of a claim term is the meaning that

the term would have to a person of ordinary skill in the art in question at the time

of the invention, i.e., as of the effective filing date of the patent application.”

Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005) (en banc). Here, the

’402 Patent claims a priority date in 1999. In 1999, a person of ordinary skill in

the art for the ’402 Patent would have a Bachelor’s degree in Electrical

Engineering, Computer Engineering, or Computer Science, or equivalent work

experience, and at least one to two years of experience designing or working with

-28-

web interfaces and basic Internet communication protocols, or a person with a

Master’s Degree in Electrical Engineering, Computer Engineering, or Computer

Science (or related subjects). See Ex. 1006, Chatterjee Dec., ¶ 19.

D. Claim Construction

1. Broadest Reasonable Interpretation

In a CBM proceeding, a claim in an unexpired patent is to be given its

broadest reasonable construction in light of the specification in which it appears.

37 C.F.R. § 42.300(b); see also In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir.

1984). The ’402 Patent has not expired. Thus, claims 1-16 should be given their

broadest reasonable interpretation. The framework for claim construction in

district courts is different from the “broadest reasonable interpretation standard,”

and Petitioners reserve their rights to propose constructions in District Court based

on the framework set forth in Phillips v. AWH Corp., 415 F.3d 1303, 1312-18

(Fed. Cir. 2005) (en banc).

The below constructions and the rationale are supported by the Declaration

of Dr. Sandeep Chatterjee, Ex. 1006, ¶¶ 60-61.

2. Means-Plus-Function Limitations

Claim limitations requiring construction use means-plus-function language

that “shall be construed to cover the corresponding structure . . . described in the

specification and equivalents thereof.” 35 U.S.C. § 112(6). In construing means-

plus-function limitations, the first step is determining whether § 112(6) applies to a

-29-

particular term in a claim. Use of the term “means” followed by a functional

statement creates a rebuttable presumption that § 112(6) governs the term’s

construction. See TriMed, Inc. v. Stryker Corp., 514 F.3d 1256, 1259 (Fed. Cir.

2008). The presumption is overcome only if the claim limitation further recites

sufficient structure for performing the described function in its entirety. Id. If

§ 112(6) applies, one next looks to the specification to identify the corresponding

structure that performs the recited function. See Medical Instrumentation &

Diagnostics Corp. v. Elekta AB, 344 F.3d 1205, 1210 (Fed. Cir. 2003).

Claims 5 and 13 recite means-plus-function limitations. As a general matter,

the only structures disclosed in the specification of the ’402 Patent are

conventional computers and servers that – as conceded in the ’402 Patent – were

part of the prior art. See e.g., Ex. 1001 at Fig. 1 and Fig. 4; Ex. 1006, Chatterjee

Dec., ¶ 60. For example, claim 5 is directed to “[a] reward server comprising . . .

,” (Ex.1001 at 13:40-41) and the ’402 Patent explicitly states that “[a]ny type of

reward server may also be used in this system” (id. 5:17-18) and that the reward

server “may be of any type of accessible server capable of holding data about a

user along with a corresponding earned value.” Id. at 5:44-47 (emphasis added);

see also Ex. 1006, Chatterjee Dec., ¶¶ 48-49. Thus, the structure for the means

claimed in claim 5 corresponds to generic components of “any type of accessible

-30-

server.” See Ex. 1006, Chatterjee Dec., ¶ 60 (“Since the reward server is a generic

server, the components within the reward sever are also generic.”).

Claim 13 is directed to “A reward exchange computer comprising . . . .” Ex.

1001 at 15:48-50. The ’402 Patent does not explicitly disclose a “reward exchange

computer.” Instead, the ’402 Patent discloses a “trading server 20 [that] obtains

the reward points from reward servers 10, 12, 14, and allows the user to redeem

those reward points,” and the trading server 20 “conveys consideration to the

merchant computer 30 equivalent to the cost of the item.” Id. at 6:30-31 and 7:5-

46. Thus, the disclosed “trading server” in the specification corresponds to the

claimed “reward exchange computer” of claim 9 because it is performing the

functionality of converting reward points. No detailed structure, however, of the

trading server is depicted in the ’402 Patent. Like the structure of the reward

server, the ’402 Patent states that “[t]he trading server computer may be any type

of computer system that allows users to access the system in order to perform the

processes involved in this invention.” Id. at 5:58-61 (emphasis added). Thus, the

structure for the means claimed in claim 13 corresponds to generic components of

“any type of computer system.” See Ex. 1006, Chatterjee Dec., ¶ 60 (Since the

rewards exchange computer is a generic computer, the components within the

rewards exchange computer are also generic.).

-31-

The charts below identify the disclosed structure corresponding to the

“means-plus-function” limitations of claims 5 and 13 and are supported by the

charts included in paragraph 60 of the Declaration of Dr. Sandeep Chatterjee. See

Ex. 1006, Chatterjee Dec., ¶ 60, pp. 23-26 (supporting the chart for claim 5) and

pp. 27-30 (supporting the chart for claim 13).

Claim 5 Limitations Corresponding Disclosure in the ’402 Patent

“memory means for storing a reward account”

“A user of this system may acquire and accumulate rewards through any prior art means such as shown on FIG. 1, which are then posted in a user's reward point account 52 that is accessible through the reward server computer 10.” Ex. 1001 at 5:23-26. (emphasis added) “The trading server computer 20 ‘obtains’ the reward points from a reward server 10, 12, 14 stored in the user’s account 52.” Id. at 6:29-31. (emphases added) See id. at Fig. 4, reference 52.

“communications means for communicating over a computer network with a user computer”

“With reference to FIG. 4, a plurality of reward server computers 10, 12, 14, a trading server 20, a merchant computer 30 and a user computer40 are shown in communication with a network 2. The network may comprise any type of communication process where computers may contact each other.” Id. at 5:10-14 (emphases added). “The trading server computer 20 is in communication through the network 2 with a user on a user computer 40 and is additionally able to connect to the reward server computers 10, 12, 14 through the network 2 in accordance with techniques well known in the art for Internet communications.” Id. at 5:26-21 (emphasis added).

-32-

Claim 5 Limitations Corresponding Disclosure in the ’402 Patent

See id. at Fig. 4, references 2 and 10. “processing means” “Any type of reward server may also be used in this

system.” Id. at 5:17-18. “The reward server computers 10, 12, 14 may be of any type of accessible server capable of holding data. Id. at 5:44-47 (emphasis added)). “The processor of the reward server may perform actions that may allow or refuse the requested action. In another embodiment, the trading server processor may be granted direct authorization to modify the user's records in the reward server database without analysis by the processor of the reward server.” Id. at 9:5-10 (emphasis added). See id. at Fig. 4, reference 10.

Claim 13 Limitations Corresponding Disclosure in the ’402 Patent

“communication means for communicating over a computer network”

“The trading server computer may be any type of computer system that allows users to access the system in order to perform the processes involved in this invention.” Id. at 5:58-61 (emphasis added). “With reference to FIG. 4, a plurality of reward server computers 10, 12, 14, a trading server 20, a merchant computer 30 and a user computer40 are shown in communication with a network 2. The network may comprise any type of communication process where computers may contact each other.” Id. at 5:10-14 (emphases added). “The trading server computer 20 is in communication through the network 2 with a user on a user computer 40 and is additionally able to connect to the reward server computers 10, 12, 14 through the

-33-

Claim 13 Limitations Corresponding Disclosure in the ’402 Patent

network 2 in accordance with techniques well known in the art for Internet communications.” Id. at 5:26-21 (emphasis added). “The trading server also has communications means to allow users to access the server and to allow the trading server to contact reward servers and processing means to interpret the rules and coordinate the contact to the respective reward servers.” Id. at 8:47-51. See id. at Fig. 5, reference 20 (“connection”).

“means for storing in a reward exchange account a second set of reward points of a second type earned by the user”

“In the preferred embodiment, the server has memory means for storing the user account information, user profiles and rules specified by the user, system, or merchant.” Id. at 8:45-47. “The trading server computer 20 increases the reward exchange account 54 associated with the user by the received number of points (step 620). The trading server computer 20 in turn, receives the consideration from the reward server computer 10.” Id. at 6:52-56 (emphasis added). See id. at Fig. 5, reference 54.

“processing means” “The trading server also has . . . processing means to interpret the rules and coordinate the contact to the respective reward servers. The processing means is adapted to allow the user to request and exchange consideration for rewards from reward servers. The processing means additionally is adapted to coordinate the exchange of consideration and increase or decrease the user exchange accounts stored in memory in response to actions performed by the user computer, reward server and merchants.” Id. at 8:47-58 (emphasis added).

-34-

Claim 13 Limitations Corresponding Disclosure in the ’402 Patent

“The processor establishes a communication link with the reward server and a transaction request is sent to the processor of the reward server . . . . In another embodiment, the trading server processor may be granted direct authorization to modify the user’s records in the reward server database without analysis by the processor of the reward server.” Id. at 9:3-11 See id. at Fig. 5, reference 20 (“processor”).

3. “Consideration”

Independent claim 5 recites that “the reward server computer conveying

consideration to the reward exchange computer, the consideration having a value

equivalent to the quantity of reward points of the first type decreased from the

reward account on the reward server computer.” Ex. 1001 at 14:18-22; see also

similar recitations in claims 1 (id. at 13:17-21) and 9 (id. at 15:25-29). The ’402

Patent specification states that “the consideration corresponds to the number of

reward points decreased in the account of the reward server” (id. at 4:20-21); “the

consideration may be in the form of a monetary credit to an account” (id. at 6:49-

50); and “the consideration may be a direct transfer of points to an account

associated with the merchant” (id. at 7:40-42). Thus, the ’402 Patent discloses that

consideration may be conveyed as a monetary credit or as a transfer of points. The

’402 Patent also “basically treat[s] the points as cash consideration.” Id. at 10:19-

21 (emphasis added).

-35-

Accordingly, using the broadest reasonable interpretation, the Board should

construe the term “consideration” to mean “monetary credit or points,” as would be

understood by a person of ordinary skill in the art in view of the specification and

the claims. Ex. 1006, Chatterjee Dec., ¶ 60. This construction is supported by the

examples of consideration provided in the ’402 Patent.

4. Additional Terms

Simple statement: Pursuant to the USPTO’s Office Patent Trial Practice

Guide, a party may provide “a simple statement that the claim terms are to be

given their broadest reasonable interpretation, as understood by one of ordinary

skill in the art and consistent with the disclosure.” See 77 Fed. Reg. at 48,764. In

accordance with this regulation, Petitioner submits that remaining claims terms are

to be given their the broadest reasonable interpretation, as understood by one of

ordinary skill in the art and consistent with the disclosure, and that the broadest

reasonable interpretation of these terms would be readily apparent to one of

ordinary skill in the art in view of the disclosure. Indeed, in a previous proceeding

for similar claims that also recited the conversion of reward points, the PTAB held

that a construction of similar terms was not necessary. See CBM2014-00095,

Paper 32, at 9 (“We do not find construction of these terms necessary for this

decision”).

-36-

VII. THE CHALLENGED CLAIMS ARE UNPATENTABLE

A. Ground No. 1: The Challenged Claims Are Invalid Under 35 U.S.C. § 101

As an initial matter, the PTAB previously instituted review in two CBM

proceedings finding that it was more likely than not that claims directed to

conversion of reward points were invalid under 35 U.S.C. § 101. See Ex. 1002 at

6:42-7:26 (claim 1) and CBM2014-00096, Paper 23, at 21; see also Ex. 1003 at

9:59-10:27 (claim 32) and CBM2014-00095, Paper 32, at 23. For similar reasons

and for the reasons discussed below, claims 1-16 of the ’402 Patent are invalid

under 35 U.S.C. § 101.

Section 101 of the Patent Act defines patentable subject matter as “any new

and useful process, machine, manufacture, or composition of matter, or any new

and useful improvement thereof.” 35 U.S.C. § 101. In determining whether a

claim is directed to eligible subject matter, courts consider the claim as a whole

rather than evaluating elements separately. Diehr, 450 U.S. at 188. Although

§ 101 includes as eligible subject matter “any new and useful process, machine,

manufacture, or composition of matter, or any new and useful improvement

thereof,” the Supreme Court has repeatedly emphasized, “laws of nature, physical

phenomena, and abstract ideas” are “part of the storehouse of knowledge of all

men . . . free to all men and reserved exclusively to none.” Bilski, 561 U.S. at 602

-37-

(quoting Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948))

(internal quotation marks omitted).

The Supreme Court’s decision in Alice reaffirmed the framework first

outlined in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.

Ct. 1289 (2012), used to “distinguish[] patents that claim laws of nature, natural

phenomena, and abstract ideas from those that claim patent-eligible applications of

those concepts.” See Alice, 134 S. Ct. at 2355.

First, we determine whether the claims at issue are

directed to one of those patent-ineligible concepts. If so,

we then ask, what else is there in the claims before us?

To answer that question, we consider the elements of

each claim both individually and as an ordered

combination to determine whether the additional

elements transform the nature of the claim into a patent-

eligible application. We have described step two of this

analysis as a search for an “inventive concept”—i.e., an

element or combination of elements that is sufficient to

ensure that the patent in practice amounts to significantly

more than a patent upon the ineligible concept itself.

Id. (emphasis omitted) (internal citations omitted) (internal quotation marks

omitted). Thus, the court must determine (1) if the patented technology touches

upon ineligible subject matter, and (2) whether there are sufficient inventive

elements such that the invention is “‘significantly more’ than a patent on an

-38-

ineligible concept.” See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245,

1255 (Fed. Cir. 2014) (quoting Alice, 134 S. Ct. at 2355).

Mathematical calculations are a paradigmatic example of “abstract ideas” in

view of each of Benson, Bilski, Mayo, and Alice. See e.g., Gottschalk v. Benson,

409 U.S. 63, 65 (1972); Le Roy v. Tatham, 55 U.S. (14 How.) 156, 175 (1853). A

claim is not patent-eligible where it merely recites a law of nature or abstract idea

and adds additional steps that merely reflect routine, conventional activity of those

who work in the field. Mayo, 132 S. Ct. at 1298. The Supreme Court accordingly

has enforced “a bright-line prohibition against patenting . . . mathematical formulas

and the like,” let alone a simple calculation involving a ratio. Id. at 1303.1

1 In the wake of Alice, the Federal Circuit has repeatedly confirmed this principle.

See Content Extraction & Transmission LLC v. Wells-Fargo Bank, Nat’l Assoc.,

776 F.3d 1343, 1348 (Fed. Cir. 2014) (noting that “[t]here is no 'inventive concept'

in . . . perform[ing] well-understood, routine, and conventional activities

commonly used in industry”); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715

(Fed. Cir. 2014) (“Although certain additional limitations, such as consulting an

activity log, add a degree of particularity, the concept embodied by the majority of

the limitations describes only the abstract idea of showing an advertisement before

delivering free content.”).

-39-

Most notably, a recent decision applying Alice to invalidate claims

essentially the same as the Challenged Claim confirms the invalidity of claims 1-

16 under § 101. On September 3, 2014, Judge Bryson from the Court of Appeals

for the Federal Circuit, sitting by designation in the Eastern District of Texas, held

that claims directed to the conversion of one type of reward points into a second

type of reward points are invalid under Section 101, as such a conversion is a

simple calculation that can be done by humans. See Loyalty Conversion Sys. Corp.

v. Am. Airlines, Inc., No. 2:13-CV-655, 2014 WL 4364848, at *10 (E.D. Tex. Sept.

3, 2015). Specifically, Judge Bryson held that:

[t]hat core idea [of converting reward points of one

vendor into reward points of another] plainly would not

be patentable without more, as it is indistinguishable in

principle from the simple and familiar financial or

business operations that were at issue in Bilski and CLS

Bank, as well as similar financial operations at issue in

various Federal Circuit decisions in which the claims were

held to be invalid under section 101. If anything, the

conversion process at the core of the claims in this case

is simpler and more commonplace than some of the

methods held unpatentable in the cases cited above.

Loyalty Conversion, 2014 WL 4364848, at *8 (emphasis added) (internal citations

omitted).

-40-

As in the Loyalty Conversion case, the patentee here “can fairly be said to

have claimed the unpatentable concept of currency exchange, as applied to the

exchange of currencies in the form of loyalty award credits of different vendors.”

Loyalty Conversion, 2014 WL 4364848, at *6; see also Exhibit 1002 at claim 1

and Exhibit 1003 at claim 31; Ex. 1006, Chatterjee Dec., ¶ 68. As Judge Bryson

eloquently stated:

[t]he exchange of one vendor’s loyalty award points for

another’s is not different in principle from any exchange

of monetary currencies that are not readily negotiable

outside of their country of origin. An exchange of

Belarusian rubles for Polish zùotys at the Polish–Belarus

border would be an example of such a currency

exchange, as would an exchange of Sheraton hotel award

points for miles in an American Airlines frequent flyer

account.

See Loyalty Conversion, 2014 WL 4364848, at *6, n.2.

Accordingly, as explained in detail below, the Challenged Claims are invalid

under 35 U. S. C. § 101.

1. The Challenged Claims Are Directed to the Abstract Idea of Currency Conversion

The first step of the Alice framework is to determine whether the claims at

issue are directed to an “abstract idea.” Here, all of the claims of the ’402 Patent

embody an abstract idea that is as old as commerce itself: currency conversion.

-41-

Ex. 1001 at 12:36-16:57; Ex. 1006, Chatterjee Dec., ¶ 68. Currency conversion

has been a fundamental economic practice for centuries, and all of the claims of the

’402 Patent recite steps directed to this abstract idea. Accordingly, all meet the

first step in the Alice framework.

The Supreme Court has many times ruled that mathematical calculations,

even if they are innovative (which is not the case here), are unpatentable abstract

ideas. Benson, 409 U.S. at 72; Parker v Flook, 437 U.S. 584, 587-86 (1978); see

also Uniloc USA, Inc. v. Rackspace Hosting, Inc., 18 F. Supp. 3d 831, 837 (E.D.

Tex. 2013) (“[J]ust as in Benson, Claim 1 discloses a ‘procedure for solving a

given type of mathematical problem.’” (quoting Benson, 409 U.S. at 65)); see also

Clear with Computers v Dick’s Sporting Goods, Inc., 21 F. Supp. 3d 758, 761,

764-65 (E.D. Tex. 2014); see also OIP Techs., Inc. v. Amazon.com, Inc., No. C-12-

1233, 2012 WL 3985118, at *2, *16-17 (N.D. Cal. Sept. 11, 2012) (finding a

patent for “pricing a product for sale” invalid under Section 101 because it claimed

nothing more than “the calculation of a demand curve based on consumer response

to different price points,” and was “as abstract as Bilski’s patent.”).

The claimed “exchange” in representative claim 5 of the ’402 Patent is

nothing more than the simple application of a mathematical ratio to determine the

amount of currency that should be exchanged for a number of rewards points. Ex.

-42-

1006, Chatterjee Dec., ¶ 82. Another way of looking at claim 5 is that it recites a

simple multiplication equation:

Currency A * Conversion Rate = Currency B.

In addition, claim recitations of “adding” reward points, “decreasing” reward

points, combining converted points to existing reward points, and/or “conveying

consideration,” also confirm that the claim recites nothing more than mathematical

steps of addition and subtraction or mental processes that can simply be performed

by a human. See Ex. 1001 at 13:40-14:32; see also Ex. 1006, Chatterjee Dec., ¶

82.

Independent claims 1, 9 and 13 likewise merely disclose the mathematical

equation for converting one type of reward point into another. See Ex. 1001 at

12:37-13:31, 14:41-15:39, and 15:48-16:49; Ex. 1006, Chatterjee Dec., ¶¶ 73-74.

Further, the dependent claims are no less abstract. All share the same underlying

idea to which the independent claims are directed. The dependent claims merely

add further steps and components in the pursuit of “currency conversion.” For

example, dependent claims 2, 6, 10 and 14 merely add the limitation that the

“control” for initiating the communication over the computer to exchange the

reward points “comprises a hyperlink or button;” dependent claims 3, 7, 11 and 15

merely add the limitation that the “the reward account on the reward server

computer is associated with a credit card reward program;” and dependent claims

-43-

4, 8, 12 and 16 merely add the limitation that the “the reward account on the

reward server computer is associated with an airline reward program.” Ex. 1001 at

13:32-39, 14:33-40, 15:40-47, and 16:50-57; Ex. 1006, Chatterjee Dec., ¶ 84.

These limitations fail to add anything “significantly more” to the claims that would

render them patent eligible. See DDR Holdings, 773 F.3d at 1257 (subject matter

was patent-eligible in part because it was a “solution [] necessarily rooted in

computer technology in order to overcome a problem specifically arising in the

realm of computer networks.”); see also Ex. 1006, Chatterjee Dec., ¶ 84.

Here, there is no problem arising specifically in the realm of computer

networks that the alleged invention of the ’402 Patent solves. Currency conversion

occurred long before the advent of computers. See e.g., infra VII.B; see also Ex.

1006, Chatterjee Dec., ¶ 71. And the ’402 Patent does not purport to invent any

new computer technology that overcomes the technical limitations in prior

computer technology.

Moreover, Courts have long held that simple mathematical calculations are

not eligible for patent protection. See Digitech Image Techs., LLC v. Sigma Corp.,

No. 8:12-cv-1681-ODW(MRWx), 2013 WL 3947137, at *8 (C.D. Cal. July 31,

2013) (“‘[I]f a claim is directed essentially to a method of calculating, using a

mathematical formula, even if the solution is for a specific purpose, the claimed

method is nonstatutory.’” (quoting Flook, 437 U.S. t 959)), aff'd sub nom.,

-44-

Digitech Image Techs, LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344 (Fed. Cir.

2014); see also Benson, 409 U.S. at 71–72, (merely implementing a mathematical

formula on a digital computer is not a patentable application); see also Digitech

Info. Sys. v. BMW Fin. Servs., 864 F. Supp. 2d 1289, 1297 (M.D. Fla. 2012), aff’d,

504 F. App’x 920 (Fed. Cir. 2013). Just last year, when invalidating essentially the

same claims as the Challenged Claims of the ’402 Patent, Judge Bryson held that

the “equivalent of a currency exchange as applied to loyalty award credits such as

airline frequent flyer miles or hotel loyalty award points . . . is not fundamentally

different from the kinds of commonplace financial transactions that were the

subjects of the Supreme Court’s recent decisions in Bilski . . . and Alice . . . .”

Loyalty Conversion, 2014 WL 4364848, at *5.

2. The Recitations of Generic Computer Elements in the Challenged Claims Does Not Transform the Abstract Idea Into a Patent-Eligible Invention

Because claims 1-16 are drawn to an abstract idea, they can satisfy § 101

only if they pass the second step of the two-step Alice framework by including

additional elements sufficient to “transform th[e] abstract idea into a patent-eligible

invention.” See Alice, 134 S. Ct. at 2357. The claims of the ’402 Patent fail to do

so. It is beyond dispute that “mere recitation of a generic computer cannot

transform a patent-ineligible abstract idea into a patent-eligible invention,” nor can

recitation of “well-understood, routine, conventional activities” on a computer. Id.

-45-

at 2358-59 (internal quotation marks omitted). See also Kroy IP Holdings, LLC v.

Safeway, Inc., No. 2-12-cv-800-WCB, 2015 WL 3452050, at *23-24 (E.D. Tex.

May 29, 2015) (holding claims directed to a system for providing incentive awards

to consumers were invalid under § 101 for being directed to an abstract idea and

the use of generic computers did not transform the claims into patentable subject

matter).

Here, all claims of the ’402 Patent merely recite generic and conventional

computer functionality for carrying out the abstract idea of currency conversion.

See e.g., Ex. 1001 at Fig. 4 and 13:40-14:32 (“memory means,” “communication

means,” and “processing means” where the corresponding structure of these means

is depicted in Fig. 4 as conventional computers that are no different than the

computers disclosed in Fig. 1 as “PRIOR ART”); see also Ex. 1006, Chatterjee

Dec., ¶¶ 69-70. Accordingly, all claims of the ’402 Patent fail to pass step two of

the Alice framework.

The Challenged Claims recite nothing more than “well-understood, routine,

conventional activity” associated with currency conversion. See Mayo, 132 S. Ct.

at 1294. Specifically, claim 5 recites several largely insignificant steps related to

currency conversion including: (a) storing reward points of a first type; (b)

communicating with a user computer and a reward exchange computer that is

-46-

storing a second type of reward points; (c) providing a web page2 to allow a user to

initiate communication between reward server and reward exchange computer to

exchange reward points; (d) initiating communication to exchange reward points;

(e) causing the reward exchange computer to exchange the reward points from the

first type to a second type; (f) conveying consideration to the reward exchange

computer for the exchanged points; and (g) enabling the user to redeem the

exchanged reward points. See Ex. 1001 at 13:40-14:32; see also Ex. 1006,

Chatterjee Dec., ¶¶ 73-74. Independent claims 1, 9, and 13 are similar to claim 5

and recite similar steps and/or functions from different perspectives. See Ex. 1001

at 12:37-13:31, 14:41-15:39, and 15:48-16:49.

Indeed, all the recitations listed above add nothing more than generic

computer functionality and are not integral to the claimed invention. Ex. 1006,

Chatterjee Dec., ¶ 76. As noted above, the specification of the ’402 Patent

confirms that “any type of accessible server,” “any type of communication

process,” and/or “any type of computer system” may be used “in order to perform

2 The use of web pages and/or the Internet is also insufficient to confer

patentability. See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366,

1370 (Fed. Cir. 2011) (use of the Internet to verify credit-card transactions does not

add enough to the abstract idea of verification of transactions to avoid the bar of

section 101); see also Loyalty Conversion, supra.

-47-

the processes involved in this invention.” See generally Ex. 1001 at 5:10-64; Ex.

1006, Chatterjee Dec., ¶¶ 69-70. Accordingly, there is nothing in the claim beyond

those routine and conventional activities that could confer patent eligibility.

Moreover, while claim 5 recites a reward server that includes “memory

means,” “communication means,” and “processing means,” no structure is

disclosed in the ’402 Patent other than generic computers that are no different than

the components depicted as “PRIOR ART” in Figure 1 of the ’402 Patent. Ex.

1006, Chatterjee Dec., ¶ 81. Indeed, the ’402 Patent explicitly states that the

reward server “may be of any type of accessible server capable of holding data

about a user along with a corresponding earned value that is negotiable for other

goods, services, or points of another system.” Ex. 1001 at 5:44-47 and Fig. 4

(emphasis added); Ex. 1006, Chatterjee Dec., ¶¶ 69-70. Thus, the corresponding

structure for the means is nothing more than components of any type of server,

which does not confer patent eligibility. See Intellectual Ventures I LLC v. Mfrs. &

Traders Trust Co., Civ. No. 13-1274-SLR, 2014 WL 7215193, at *8 (D. Del. Dec.

18, 2014) (“That the system of claim 1 at bar recites a “means for storing” and a

“means for presenting transaction summary data,” and claim 19 recites a “means

for listing,” does not change the analysis [under 35 U.S.C. § 101], as only generic

computers and components are disclosed in the specification.”); see also In re

Katz, 639 F.3d 1303, 1316 (Fed. Cir. 2011) (in analyzing means-plus-function

-48-

claims, finding that “the functions of ‘processing,’ ‘receiving,’ and ‘storing’ are

coextensive with the structure disclosed, i.e., a general purpose processor,” such

“functions can be achieved by any general purpose computer without special

programming”).

While claims 1, 5, 9, and 13 also recite storing data, communicating over a

network, and providing a web page, these steps are nothing more that generic

computing functions and do not make the otherwise unpatentable claim patentable.

See Dealertrack, Inc. v. Huber, 674 F. 3d 1315, 1334 (Fed. Cir. 2012) (a computer-

aided method claim with references to display device and terminal devices and

nothing more particular was found ineligible); Internet Patents Corp. v. Gen. Auto.

Ins. Servs., Inc., 429 F. Supp. 3d 1264, 1266, 1269 (N.D. Cal. 2013)(ruling that a

claim for providing “Dynamic Tabs for a Graphical User Interface” that includes

displaying icons on a web page was invalid under Section 101 because “[t]he

addition of a computer limitation does not transform the abstract idea into a

patentable invention.”); see also Intellectual Ventures I, 2014 WL 7215193, at *6-

8 (holding claims reciting “storing, in a database” and “causing communication” as

unpatentable). Further, these steps were well-known in the prior art. See Ex. 1001

at Figs. 1-2; see also Ex. 1005 at Figs.1-2; Ex. 1006, Chatterjee Dec., ¶ 81.

Moreover, as discussed above, none of the dependent claims recite or add

any elements or combinations of elements that add inventive concepts to the

-49-

otherwise unpatentable concept of currency conversion. See supra at 41; Ex. 1006,

Chatterjee Dec., ¶ 81. For the claims of the ’402 Patent to be valid, the disclosed

computer must be “integral to the claimed invention, facilitating the process in a

way that a person making calculations or computations could not.” Intellectual

Ventures I, 2014 WL 7215193, at *4. “[A]ppending generic computer

functionality to lend speed or efficiency to the performance of an otherwise

abstract concept does not meaningfully limit claim scope for purposes of patent

eligibility.” CLS Bank Int’l v. Alice Corp., 717 F.3d 1269, 1286 (Fed. Cir. 2013)

(en banc) (citing Bancorp Servs. L.L.C. v. SunLife Assurance Co., 687 F.3d 1266,

1278 (Fed. Cir. 2012)) (citing Dealertrack, 674 F.3d at 1333-34 (finding that the

claimed computer-aided clearinghouse process is a patent-ineligible abstract idea)),

aff’d, 134 S. Ct. 2347 (2014); see also SiRF Tech., Inc. v. ITC, 601 F.3d 1319,

1333 (Fed. Cir. 2010) (“In order for the addition of a machine to impose a

meaningful limit on the scope of a claim, it must play a significant part in

permitting the claimed method to be performed, rather than function solely as an

obvious mechanism for permitting a solution to be achieved more quickly, i.e.,

through the utilization of a computer for performing calculations.”); Accenture

Global Servs., GmbH v. Guideware Software, Inc., 728 F.3d 1336, 1345 (Fed. Cir.

2013) (“simply implementing an abstract concept on a computer, without

-50-

meaningful limitations to that concept, does not transform a patent-ineligible claim

into a patent-eligible one.”).

The ’402 Patent, however, does not provide any detail regarding the

hardware or structure of network 2, reward servers 10, 12, 14, trading server 20,

merchant computer 30, and/or user computer 40 disclosed in the claim other than

the fact that these components may be any type of computer systems. Ex. 1001 at

5:13-64; Ex. 1006, Chatterjee Dec., ¶¶ 75-76. The disclosure is limited to allowing

a user to buy goods or services by using reward points as currency, once converted

to the proper currency. There is no disclosure of a special purpose computer that is

used to perform the conversion.3 Ex. 1006, Chatterjee Dec., ¶¶ 69, 76-77. Nothing

in the ’402 Patent suggests that a computer is integral to the invention. Rather, the

computer is merely disclosed to provide generic computer functions of storing,

communicating, and/or providing a web page. Ex. 1006, Chatterjee Dec., ¶ 79

3 Such a conversion from one form of currency to another has been around for

years and is not a novel concept. In fact, a search for patents directed to currency

conversion on the website for the United States Patent and Trademark Office,

www.uspto.gov, reveals at least the following two such patents: U.S. Patent Nos.

3,083,906 (Ex. 1011) and 3,795,795 (Ex. 1012) (showing a 1963 and a 1974

apparatus including a slide-rule for currency conversion). Ex. 1006, Chatterjee

Dec., ¶ 71.

-51-

3. The Basic Functions Disclosed in the Challenged Claims Can be Performed by Humans

Each of the steps disclosed in the Challenged Claims can be performed by

humans and the disclosed means are merely automating steps humans can, and

have, easily performed on their own for some time. See Ex. 1011, U.S. Patent Nos.

3,083,906 and Ex. 1012, 3,795,795 (showing a 1963 and a 1974 apparatus

including a slide-rule for currency conversion); Ex. 1006, Chatterjee Dec., ¶¶ 71,

83. The Federal Circuit has confirmed that “mental processes” – such as those in

Benson, Flook, Alice and the ’402 Patent – are not patentable, whether they are

completed manually, or require computer implementation. Bancorp, 687 F.3d at

1278. Further, Judge Bryson held in the Loyalty Conversion case, that:

[T]he basic functions of converting non-negotiable

loyalty award credits of one vendor into loyalty award

credits of a second vendor according to an agreed-upon

conversion rate, and then allowing the consumer to use

the converted loyalty award credits to make purchases

from the second vendor, are all functions that are readily

within the capacity of a human to perform without

computer aid.

Loyalty Conversion, 2014 WL 4364848, at *10 (emphasis added). As is clear from

the “means-plus-function” language of claim 5, the steps performed by the claimed

means could easily be performed by a human. Instead of a human performing the

conversion of currency and a user using the exchanged currency to buy goods,

-52-

generic computer means are performing these functions. However, using a generic

computer to implement an abstract idea does not make claim 5 patentable. See

Clear With Computers, LLC v. Altec Inds., Nos. 6:14-cv-79, 6:14-cv-89, 2015 WL

993392, at *5 (E.D. Tex. Mar. 3, 2015) (“Although verbose, the claims as a whole

broadly recite a simple process which, in this case, does not require the type of

complex programming that confers patent eligibility. Importantly, the claims in no

way ‘purport to improve the functioning of the computer itself.’” (quoting Alice,

134 S.Ct. at 2359)).

Because the Challenged Claims are directed to an abstract idea and merely

recite generic computer functionality, the claims are invalid under 35 U.S.C. § 101.

B. Ground No. 2: The Challenged Claims are Invalid Under 35 U.S.C. § 103(a) as Being Obvious Over Newslink in view of Storey and AAPA

The U.S. Supreme Court decision in KSR International Co. v. Teleflex Inc.,

550 U.S. 398, 415-16 (2007) (“KSR”) held that patents that are based on new

combinations of elements or components already known in a technical field may

be found to be obvious. Specifically, the Court in KSR rejected a rigid application

of the “teaching, suggestion, or motivation [to combine]” test. Id. at 418-19. “In

determining whether the subject matter of a patent claim is obvious, neither the

particular motivation nor the avowed purpose of the patentee controls. What

matters is the objective reach of the claim.” Id. at 419-20. “Under the correct

-53-

analysis, any need or problem known in the field of endeavor at the time of

invention and addressed by the patent can provide a reason for combining the

elements in the manner claimed.” Id. at 420. In particular, the Supreme Court

emphasized the principle that “[t]he combination of familiar elements according to

known methods is likely to be obvious when it does no more than yield predictable

results.” Id. at 416. A key inquiry is whether the “improvement is more than the

predictable use of prior art elements according to their established function.” Id. at

417.

The rationale to combine or modify prior art references is significantly

stronger when the references seek to solve the same problem, come from the same

field and correspond well. In re Inland Steel Co., 265 F.3d 1354, 1362 (Fed. Cir.

2001) (allowing two references to be combined as invalidating art under similar

circumstances where the art “focus[ed] on the same problem . . . c[a]me from the

same field of art [and] . . . the identified problem found in the two references

correspond[ed] well”).

Newslink was published on October 18, 1995, and therefore qualifies as prior

art under 102(b). Storey was published on June 30, 1998, and therefore qualifies as

prior art under at least 102(a) and 102(e). AAPA qualifies as prior art in view of

Signature Systems’ concessions in the Background Section of the ’402 Patent. As

discussed in detail below, it would be obvious to one of ordinary skill in the art to

-54-

combine these references because such a combination would have required routine

skills and would have yielded nothing more than predictable results. Ex. 1006,

Chatterjee Dec., ¶ 124.

Signature Systems concedes that the following features were well-known in

the art at the time of the filing of the ’402 Patent: (a) earning reward points for

purchasing goods and services; (b) storing reward points on a server; (c) accessing

web pages for viewing reward point balances; (d) accessing and viewing the

current balance of reward points by using a user computer to communicate with a

server of an airline over the Internet; and (e) redeeming the stored reward points

over the Internet. See Ex. 1001 at generally at Figs. 1-3 and corresponding

description at 1:39 to 3:25; see also Ex. 1006, Chatterjee Dec., ¶¶ 119-122.

Further, features related to the administration of reward programs over the internet

and redemption of points via web pages are disclosed in Storey. Ex. 1005,

Abstract; Ex. 1006, Chatterjee Dec., ¶¶ 114-116. Moreover, Newslink discloses

allowing users to exchange their Membership Rewards points into frequent flyer

miles. See Ex. 1004 at 3; see also Ex. 1006, Chatterjee Dec., ¶¶ 108-109. Thus, as

discussed fully below, the Challenged Claims of the ’402 Patent are obvious in

view of Newslink, Storey, and AAPA.

1. Newslink Teaches or Suggests Earning and Storing a First Set of Reward Points and a Second Set of Reward Points

Newslink discloses earning multiple types of reward points as required by

-55-

independent claims 1, 5, 9, and 13. Ex. 1006, Chatterjee Dec., ¶¶ 125, 127. For

example, Newslink discloses: “MEMBERSHIP REWARDS, the new program

allows enrollees to earn one point for every dollar spent on eligible American

Express Cards® and Optima Cards.” Ex. 1004 at 1 (italics in original). Newslink

also discloses that “[f]rom Nov. 1 to Dec. 15, U.S. Membership Rewards enrollees

will earn double points when shopping at 20 of Membership Rewards retail and

gourmet partners.” Id. (italics in original). Thus, Newslink teaches “a first set of

rewards points of a first type previously earned by a user from a first reward

issuing entity as a result of a first transaction executed between the user and the

first reward issuing entity,” as recited in claim 5. See Ex. 1001 at 13:41-45; see

also similar recitations in independent claims 1 (id. at 12:39-46), 9 (id. at 14:43-

48), and 13 (id. at 15:51-55); Ex. 1006, Chatterjee Dec., ¶ 125.

Newslink further discloses that “these points don’t expire and there is no

limit to how many you can earn” (Ex. 1004 at 1) and that the “[m]inimum number

of points needed to transfer into most participating programs.” Id. at 3. One of

ordinary skill in the art would understand that by disclosing that the Membership

Rewards points do not expire and that they need to be accumulated to reach a

“minimum number,” Newslink is disclosing that these points are stored in an

account. Ex. 1006, Chatterjee Dec., ¶ 126. Without storage of points in an account,

there would be no accumulation where a minimum number of points would exist.

-56-

Id. Thus, Newslink discloses “storing a reward account comprising a first set of

reward points of a first type . . . ,” as recited in claim 5. Ex. 1001 at 13:41-45; see

also similar recitations in independent claims 1 (id. at 12:39-46), 9 (id. at 14:43-

48), and 13 (id. at 15:51-55); Ex. 1006, Chatterjee Dec., ¶ 126.

With respect to the claimed “second set of reward points of a second type”

Newslink discloses “Airline Frequent Flyer and Hotel Frequent Guest Rewards”

(Ex. 1004 at 3 (italics in original)) and that “[t]o get free airline tickets and hotel

stays, you can transfer Membership Rewards points into any participating frequent

flyer or frequent guest program.” Id. (italics in original). Newslink further

provides a specific example of airlines with frequent flyer programs by explaining

that “Southwest Airlines and El Al Israel Airlines require points transfer in

increments of 1,250 and 1,050 respectively.” Id. at 3. Newslink also discloses that

these points are stored in a user account by stating that “[y]ou can transfer points in

increments of 1,000 to top off your existing airline or hotel account balances” (id.

at (emphasis added)). One of ordinary skill in the art would understand that by

disclosing that points are added into existing airline or hotel accounts, Newslink is

disclosing that these points are being stored in an account. Ex. 1006, Chatterjee

Dec., ¶¶ 127-128.

By teaching frequent flyer programs and hotel reward points, Newslink also

teaches “a reward exchange computer that stores in a reward exchange account a

-57-

second set of reward points of a second type . . . ,” as recited in claim 5. Ex. 1001

at 13:46-53; see also similar recitations in independent claims 1 (id. at 12:47-52), 9

(id. at 14:49-54), and 13 (id. at 15:56-16:2); Ex. 1006, Chatterjee Dec., ¶¶ 127-128.

Thus, Newslink discloses earning and storing a first set of reward points

(Membership Rewards points issued by AMEX) and a second set of reward points

by a different entity (frequent flyer miles or hotel points issued by airlines or

hotels, respectively). Ex. 1006, Chatterjee Dec., ¶¶ 125-128.

2. Newslink Teaches or Suggests Converting Reward Points Based on a Conversion Rate

Newslink also discloses the conversion of points, as required by independent

claims of the ’402 Patent. Ex. 1006, Chatterjee Dec., ¶ 129. For example,

Newslink discloses “[t]ransferring points into participating airline or hotel

programs.” Ex. 1004 at 3. Newslink further discloses that “you can transfer

Membership Rewards points into any participating frequent flyer or frequent guest

program . . . [such that y]ou can transfer points in increments of 1,000 to top off

your existing airline or hotel account balances.” Id. at 3 (italics in orginal).

Moreover, Newslink provides a specific example of converting Membership

Reward points into frequent flyer miles by disclosing that “Southwest Airlines and

El Al Israel Airlines require points transfer in increments of 1,250 and 1,050

respectively.” Id.

While Newslink does not explicitly disclose the use of a “conversion ratio,”

-58-

one of ordinary skill in the art would understand that any exchange of Membership

Reward points to frequent flyer miles would require a ratio to determine the

number of points that will need to be added into the account of the user. Ex. 1006,

Chatterjee Dec., ¶ 130. For example, even if one Membership Reward point

equaled one hotel point, one of ordinary skill in the art would understand that the

applicable ratio for the conversion is 1:1. Id.

Further, as additionally explained by Dr. Chatterjee, by disclosing that

10,000 Membership Rewards points may be redeemed for a three-day car rental

from Hertz or for a “$200 gift Certificate” from Timberland, “one of ordinary skill

would understand that there are different ratios that have been negotiated between

AMEX and Hertz and AMEX and Timberland.” Ex. 1006, Chatterjee Dec., ¶ 131;

see also Ex. 1004 at 3. Such a disclosure in Newslink suggests that disclosed ratio

for conversion between Timberland and AMEX is 1 point to 0.02 cents, and the

disclosed ratio for conversion between AMEX and Hertz is 10,000 points to the

value of a three-day car rental. Ex. 1006, Chatterjee Dec., ¶ 131.

Dr. Chatterjee also explains that Newslink suggests that the ratio for

conversion from Membership Rewards points to Southwest frequent miles “would

be understood to be a multiple of 1/1250, and the conversion ratio between AMEX

and El Al Israel Airlines would be a multiple of 1/1050” because Newslink

discloses that Southwest Airlines requires AMEX Points to be transferred in

-59-

increments of 1,250 and El Al Israel Airlines requires AMEX Points to be

transferred in increments of 1,050. Ex. 1006, Chatterjee Dec., ¶ 132; see also Ex.

1004 at 3.

Moreover, one of ordinary skill would understand that the disclosure in

Newslink of conversion to Hilton points and/or Continental miles (Ex. 1004 at 1

and 3) suggests that AMEX will negotiate different ratios with Hilton and

Continental based on the values that these entities associate with their reward

points/miles. Ex. 1006, Chatterjee Dec., ¶ 133. This is because “Hilton will attach

a value to its hotel points that is different than the value that Continental will attach

to its miles.” Id.

Thus, Newslink discloses to “convert the quantity of reward points of the

first type decreased from the reward account on the reward serer computer into a

corresponding amount of reward points of the second type at a predetermined

reward server conversion rate,” as recited in claim 5. Ex. 1001 at at 14:5-9; see

also similar recitations in independent claims 1 (id. at 13:5-9), 9 (id. at 15:12-16),

and 13 (id. at 16:28-32).

3. Newslink Teaches or Suggests Decreasing Points and Adding and Combining Converted Points With Existing Points of the Second Type

Newslink also teaches the steps decreasing, adding, and combining reward

points, as required by the independent claims. For example, independent claims 1,

-60-

5, 9, and 13 recite the following steps that appear to occur when there is a

conversion of reward points:

decreasing the quantity of reward points . . .

add the corresponding amount of reward points of

the second type to the reward exchange account, and

combine the corresponding amount of reward

points of the second type added to the reward exchange

account with the . . . reward points of the second type

previously stored in the reward exchange account.

Ex. 1001 at 14:1-17; see also similar recitations in independent claims 1 (id. at

13:1-16), 9 (id. at 14:19-24), and 13 (id. at 16:24-40). These steps merely require

that points be reduced from one account and be added to another account – steps

that will be understood to be part of the transfer disclosed in Newslink. Ex. 1006,

Chatterjee Dec., ¶ 135.

For example, Newslink discloses that “[y]ou can transfer points in

increments of 1,000 to top off your existing airline or hotel account balances . . . .

Or you can transfer the entire amount of points needed for the desired reward” and

that 1,000 is the “Minimum number of points needed to transfer into most

participating programs.” See Ex. 1004 at 3. One of ordinary skill in the art would

understand that the plain and ordinary meaning of “transfer” is to “to convey from

one person, place, or situation to another.” See Merriam-Webster dictionary

definition of “transfer” (Ex. 1017 at 1); see also Ex. 1006, Chatterjee Dec., ¶ 136.

-61-

By disclosing a “transfer,” Newslink provides that the Membership Rewards points

are being moved from the user’s Membership Rewards’ Account to a frequent

flyer or hotel account. Ex. 1006, Chatterjee Dec., ¶ 136. This movement will

result in the points being decreased in the Membership Rewards’ Account and the

points being increased and combined with the existing points in the frequent flyer

or hotel account. Id. If the Membership Rewards points were not decreased after a

transfer, the customer would have a never-ending balance of points. Id.

Finally, Newslink explicitly discloses “adding” points into a second account

and “combining” the points in the second account by stating that “[y]ou can

transfer points in increments of 1,000 to top off your existing airline or hotel

account balances” and “[p]lease allow two weeks for transfers of points into

international airline programs.” Ex. 1004 at 3 (emphases added); Ex. 1006,

Chatterjee Dec., ¶ 137. Thus, Newslink also discloses these features of claims 1, 5,

9, and 13.

4. Newslink Teaches or Suggests Redemption of Converted Reward Points

Newslink discloses the step of redeeming the converted reward points by

explaining that “[t]o get free airline tickets and hotel stays, you can transfer

Membership Rewards points into any participating frequent flyer or frequent guest

program. Before you call to transfer, be sure to confirm the availability of your

desired reward . . . . Or you can transfer the entire amount of points needed for

-62-

the desired reward.” Ex. 1004 at 3 (emphases added, italics in original).

Accordingly, Newslink discloses the redemption steps recited in independent

claims 1, 5, 9, and 13. See Ex. 1001 at 13:22-31, 14:23-32, 15:30-39, 16:41-49;

see also Ex. 1006, Chatterjee Dec., ¶ 138.

5. Newslink Teaches or Suggests Conveying Consideration Corresponding to the Converted Points

Newslink also suggests the conveyance of consideration based on the

converted reward points because Newslink discloses that AMEX was in a

partnership with various airlines (e.g., Continental and Delta) and hotels that

allowed users to transfer their Membership Rewards points to reward points of

these “partners.” Ex. 1004 at 1-3. One of ordinary skill in the art would

understand that it would be obvious that any “partnership” between AMEX and

participating airlines or hotels would involve a contract and/or agreement. Ex.

1006, Chatterjee Dec., ¶ 139. Further, one of ordinary skill in the art would

understand that any valid and enforceable contract requires a conveyance of

consideration. See Restatement (Second) of Contracts § 17 (1) (1981) (Ex. 1018)

(emphasis added) (“the formation of a contract requires a bargain in which there is

a manifestation of mutual assent to the exchange and a consideration.”). Thus, in

accordance with the basic tenets of contract law, it would be obvious to one of

ordinary skill in the art that any transaction of transferring points between AMEX

and the participating partners would require a conveyance of consideration based

-63-

on the number of points that are transferred. Ex. 1006, Chatterjee Dec., ¶ 139.

Further, in its 10-K report filed with the Security and Exchange Commission

(SEC) on February 24, 1997 (Ex. 1013), Continental acknowledged that frequent

flyer miles are accounted for as a liability: “Continental sponsors a frequent flyer

program (“OnePass”) and records an estimated liability for the incremental cost

associated with providing the related free transportation at the time a free travel

award is earned. The liability is adjusted periodically based on awards earned,

awards redeemed and changes in the OnePass program.” Ex. 1013 at 54

(emphases added); see also Continental’s 10-K Report dated March 20, 1998 at 50

(Ex. 1014) (“Continental sponsors a frequent flyer program (“OnePass”) and

records an estimated liability . . . .”). Delta Air Lines also described reward points

as a liability in its SEC filings. See Delta Air Lines 10-K Report dated September

30, 1996 at 8 (Ex. 1015) (“Delta accounts for its frequent flyer program obligations

by recording the . . . the potential flight awards as a liability . . .”); see also similar

language in Delta Air Lines 10-K Report dated September 27, 1999 at 11 (Ex.

1016). Similarly, both Continental and Delta Air Lines acknowledged in these

SEC filings that they receive consideration from their partners because they sell

their frequent flier miles to their partners. See Ex. 1013 at 54 (“The Company also

sells mileage credits to participating partners . . . , such as credit card

companies. The resulting revenue . . . is recorded as other operating revenue”); see

-64-

also Ex. 1016 at 78 (“Delta also sells mileage credits to participating partners . . .

such as . . . credit card companies, and recognizes the resulting revenue as other

operating revenue at the time of sale.”).

Accordingly, it would be obvious to one of ordinary skill in the art that

Newslink discloses the conveyance of consideration from AMEX to its partners

(e.g., Continental and Delta) in exchange for the transferred points. Ex. 1004 at 3;

see also Ex. 1006, Chatterjee Dec., ¶¶ 140-145. This is because one of ordinary

skill in the art would understand that AMEX’s partners would only agree to take

on this additional liability of transferred points if AMEX would convey

consideration to them that compensates them for this additional liability. Id. at ¶

145. Indeed, one of ordinary skill in the art would understand that such a

conveyance of consideration would be obvious because – as evidenced by SEC

filings – companies view frequent flier miles as liabilities and companies generate

revenue by selling their miles to their partners. See id. See also Exs. 1013-1016

(describing AMEX’s disclosed partners in Newslink (Continental and Delta Air

Lines) receiving consideration by selling frequent flier miles to credit card

companies).

Thus, while Newslink does not explicitly disclose conveying consideration, it

would be obvious to one of ordinary skill in the art that Newslink suggests

“conveying consideration to the reward exchange computer, the consideration

-65-

having a value equivalent to the quantity of reward points of the first type

decreased from the reward account on the reward server computer,” as recited in

claim 5. Ex. 1001 at 14:18-22; see also similar recitations in claims 1 (13:17-21)

and 9 (15:25-29). Such a recitation would be obvious because: (a) a contract

between AMEX and its partners would require exchange of consideration; and/or

(2) reward points are considered a liability and AMEX’s partners would only be

willing to acquire additional liability if AMEX was willing to compensate them for

the additional liability. Ex. 1006, Chatterjee Dec., ¶¶ 140-145.

6. Newslink in Combination With Storey and AAPA Teaches Conversion of Points Via a Web Page

Newslink discloses that a user may transfer their Membership Rewards

points to frequent flyer mile by calling “Membership Rewards at 1-800-AXP-

EARN (297-3276).” Ex. 1004 at 3. Independent claims 1, 5, 9, and 13 recite that

the conversion of reward points is performed using a web page. Ex. 1001 at 12:37-

13:31, 13:40-14:32, 14:41-15:39, and 15:48-16:49. Further, claims 1, 5, 9, and 13

also recite additional components such as “a reward exchange computer,” “a

reward server computer,” and/or “a user computer,” that communicate to perform

the conversion.

While Newslink discloses performing the same steps via a telephone and

does not explicitly disclose the claimed “server” and “computers,” one of ordinary

skill in the art would understand that it would be obvious to perform the tasks

-66-

disclosed in Newslink over the Internet. Ex. 1006, Chatterjee Dec., ¶ 146. Such a

modification would require the use of basic computer components such as servers

and computers, which is insufficient to overcome the prior art. Id. at ¶ 147. This is

at least because “[p]roviding an automatic or mechanical means to replace a

manual activity that accomplishes the same result is also obvious and not sufficient

to distinguish over the prior art.” See McKesson Automation, 2009 WL 3648455,

at *26 (citing In re Venner, 262 F.2d at 95); see also M.P.E.P. § 2144.04 at III.

Further, one of ordinary skill in the art would understand that performing the

steps disclosed in Newslink on the Internet – instead of over the phone – would

have been obvious because all the claimed elements (e.g., web page, server,

computer) were known in the prior art and one skilled in the art could have

combined the elements as claimed by known methods with no change in their

respective functions, and the combination would have yielded nothing more than

predictable results to one of ordinary skill in the art. See Ex. 1006, Chatterjee

Dec., ¶ 147; see also KSR, 550 U.S. at 416. Mere incorporation of web pages

and/or routine Internet technology into well-known techniques has been held to be

obvious as a matter of law. See Soverain Software LLC v. Newegg Inc., 705 F.3d

1333, 1344 (Fed. Cir.), amended on reh’g, 728 F.3d 1332 (Fed. Cir. 2013),; see

also Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1326-27 (Fed. Cir.

2008) (concluding that claims which added a web browser to a prior art electronic

-67-

system were obvious as a matter of law).

Indeed, the ’402 Patent itself concedes that the claimed computers

components are nothing more than conventional and generic computers such that

“[a]ny type of reward server” (Ex. 1001 at 5:17-18); the “any type of

communication process” (id. at 5:13-14); “[t]he trading server computer may be

any type of computer system” (id. at 5:58-61); the claimed web page “is

representative of any site” (id. at 5:31-34 (emphasis added)); and that “the user

may freely navigate to any site by means well known in the art.” Id. at 5:61-64

(emphasis added); Ex. 1006, Chatterjee Dec., ¶ 48.

Thus, it would be obvious to one of ordinary skill in the art to use general

purpose computers to perform the transfer function disclosed in Newslink online.

Ex. 1006, Chatterjee Dec., ¶ 148. One of ordinary skill in art would be motivated

to implement such a system as it would increase customer satisfaction for AMEX’s

customers by providing them the option of transferring points online. Ex. 1006,

Chatterjee Dec., ¶ 149. In addition, such a modification would reduce the costs of

AMEX with respect to hiring people in call centers to facilitate transfers via

telephone. Id. Further, such a modification would also allow AMEX the ability to

generate additional revenue from customers by placing online advertisements on

their Membership Rewards webpage. Id.

To the extent that the PTAB determines that such a modification would not

-68-

be obvious in view of Newslink alone, Storey and AAPA disclose these features.

For example, Storey discloses a “fully integrated on-line frequency award program

. . . [where t]he program also calculates award points, updates the award account of

enrolled users, and communicates that number of awarded points to the user.

Enrolled users may browse through an award catalog and electronically redeem an

amount of awarded points towards an award.” Ex. 1005 at Abstract. Thus, Storey

discloses a rewards program where the user can accumulate rewards, view his

account online, and redeem the points online as well. Id. at Fig. 1, 2:16-27, 5:51-

63, 9:45-67.4

Similarly, AAPA discloses that “user computers” and servers storing reward

points, such as “airline servers” were well-known before the filing of the ’402

Patent. Ex. 1001 at Fig. 1. For example, AAPA discloses that “a system whereby

the user can make purchase of products over the Internet and receive award points,

which are stored in an associated database” was prior art to the ’402 Patent. Ex.

1001 at 1:59-62. AAPA also discloses that using prior art systems “[b]onus miles

4 While Storey was discussed in the specification of the ’402 Patent, there is no

indication in the prosecution history that the Examiner applied or considered

Storey prior to allowing the ’402 Patent. Moreover, the PTAB has the benefit of

considering Storey as a secondary reference in combination with Newslink, which

the Examiner did not consider prior to allowing the ’402 Patent.

-69-

or points may additionally be accumulated based on the user’s actions in response

to offers made by the airline . . . [and that the] user can view accumulated miles by

accessing the airline server. Id. at Figs. 1, 3, and 2:66-3:25.

Thus, it would be obvious to modify Newslink with the teachings of Storey

and AAPA to enable users to perform the transfer of Membership Reward points –

as disclosed in Newslink – online. Ex. 1006, Chatterjee Dec., ¶ 152. Such a

modification of Newslink would have been obvious to make because all the

claimed elements (e.g., web pages, server, and computer) were known in the prior

art and one skilled in the art could have combined the elements as claimed by

known methods with no change in their respective functions, and the combination

would have yielded nothing more than predictable results to one of ordinary skill in

the art. Ex. 1006, Chatterjee Dec., ¶¶ 152-153. This combination would have had

the same advantages for AMEX as discussed above with respect to modifications

in view of Newslink alone.

Moreover, a combination of Newslink with AAPA and Storey would be

proper because “[a] statement by an applicant in the specification . . . identifying

the work of another as ‘prior art’ is an admission which can be relied upon for both

anticipation and obviousness determinations.” See Constant v. Advanced Micro-

Devices Inc., 848 F.2d 1560, 1570 (Fed. Cir. 1988) (“A statement in a patent that

something is in the prior art is binding on the applicant and patentee for

-70-

determinations of anticipation and obviousness”); see also Riverwood Int’l Corp. v.

R.A. Jones & Co., 324 F.3d 1346, 1354 (Fed. Cir. 2003); In re Nomiya, 509 F.2d

566, 571, (C.C.P.A. 1975) (holding applicant’s labeling of two figures in the

application drawings as “prior art” to be an admission that what was pictured was

“‛prior art’ for any purposes”); M.P.E.P. § 2129.

7. Claim Chart for the Challenged Claims And Newslink, Storey, and AAPA

A claim chart disclosing each and every element of the Challenged Claims

in Newslink, Storey, and AAPA is included below.

’402 Patent Claims Exemplary Disclosure in Newslink, Storey, and AAPA 1. A computer-implemented method for earning, exchanging and redeeming reward points comprising the steps of: 1a) a user earning a first set of reward points of a first type from a first reward issuing entity as a result of a first transaction executed between the user and the first reward issuing entity; 1b) a reward server computer associated with the first reward issuing entity storing

Newslink “MEMBERSHIP REWARDS, the new program allows enrollees to earn one point for every dollar spend on eligible American Express Cards® and Optima Cards.” Ex. 1004 at 1 (italics in original). “these points don’t expire and there is no limit to how many you can earn.” Id. “Minimum number of points needed to transfer into most participating programs.” Id. at 3. “Airline Frequent Flyer and Hotel Frequent Guest Rewards.” Id. at 3 (italics in original). “To get free airline tickets and hotel stays, you can transfer Membership Rewards points into any participating frequent flyer or frequent guest program.” Id. (italics in original) “Southwest Airlines and El Al Israel Airlines require points transfer in increments of 1,250 and 1,050

-71-

’402 Patent Claims Exemplary Disclosure in Newslink, Storey, and AAPA the first set of reward points of the first type in a reward account on the reward server computer; 1c) a reward exchange computer storing in a reward exchange account a second set of reward points of a second type earned by the user as a result of a second transaction executed between the user and a second reward issuing entity which is different from the first reward issuing entity;

respectively.” Id. Storey “In FREQUENCY DATABASE 170 the user’s information is checked against the database of enrolled users . . . . Thereafter the program proceeds to add the points to the enrolled user's account, 200, and display the account information and the added points to the user, 210.” Ex. 1005, 5:39-47 (emphases added). AAPA “The ’870 patent provides a system whereby the user can make purchase of products over the Internet and receive award points, which are stored in an associated database. The user can subsequently view an award catalog to determine which awards he may be able to redeem based on the number of points in his account.” Ex. 1001 at 1:59-64 (emphasis added). “ClickMiles may be awarded for a purchase of Gap products at the Gap web site. The ClickMiles can ultimately be redeemed for frequent flyer miles, for example at one of several major airlines.” Id. at 2:7-10. “With regard to FIG. 1, a model of the frequent flyer systems of the prior art is presented. Two different airlines servers are shown surrounded by their related marketing partners.” Id. at 2:53-55 (emphasis added). “FIG. 3 is representative of a typical user account that shows various earnings . . . . The user can view the accumulated miles by accessing the airline server.” Id. at 3:16-25; see also id. at Fig. 1, reference 100 (“User Accounts”). See supra at §§ VII.B.1 and VII.B.6; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 66-68.

1d) the reward server computer providing a web page to a user computer, the web page

Storey “In FIG. 1, 10 indicates access via an on-line provider such as AOL™, CompuServe™ etc . . . . Upon gaining an access to the internet, 30, the program proceeds to a

-72-

’402 Patent Claims Exemplary Disclosure in Newslink, Storey, and AAPA comprising a control for initiating communication over a computer network between the reward server computer and the reward exchange computer;

selection menu 40. Depending on the user's choice, from the selection menu 40 the program may proceed to PRODUCT A HOMEPAGE 100A or PROGRAM HOMEPAGE 300.” Ex. 1005, 2:56-63. “An [sic] fully integrated on-line frequency award program is disclosed. A user may access the program on-line and may browse a product catalog for shopping . . . . . Enrolled users may browse through an award catalog and electronically redeem an amount of awarded points towards an award. The program then electronically places an award redeeming order with the fulfillment house and updates the user's award account.” Id. at Abstract (emphases added). “In the preferred embodiment, the user may enter the REDEEM routine 500 at any point in the program . . . . Thus, only the identification code may be required if on-line access was gained via an on-line provider . . . the user may be prompted to verify that this is the correct award he wished to redeem and enter appropriate selections, such as color, size, etc . . . . A link is then established to the fulfillment house or directly to the product manufacturer and an award order is communicated.” Id. at 9:45-10:5 (emphases added). AAPA “The ’870 patent provides a system whereby the user can make purchase of products over the Internet and receive award points, which are stored in an associated database. The user can subsequently view an award catalog to determine which awards he may be able to redeem based on the number of points in his account.” Ex. 1001 at 1:59-64 (emphases added). “FIG. 3 is representative of a typical user account that shows various earnings in the system transferred in from any of the co-branded partners . . . . The user can view the accumulated miles by accessing the airline server.”

-73-

’402 Patent Claims Exemplary Disclosure in Newslink, Storey, and AAPA Id. at 3:16-25 (emphasis added). See supra at § VII.B.6; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 68-70.

1e) the reward server computer receiving from the user operating the user computer a selection of the control from the web page and, in response, initiating communication over the computer network with the reward exchange computer to exchange a quantity of reward points of the first type, designated by the user operating the user computer, from the reward account on the reward server computer into reward points of the second type for adding to the reward exchange account on the reward exchange computer by:

1f) decreasing the quantity of reward points of the first type designated by the user from the reward account on the reward server computer, causing the reward exchange computer to

Newslink “Transferring points into participating airline or hotel programs.” Ex. 1004 at 3. “[Y]ou can transfer Membership Rewards points into any participating frequent flyer or frequent guest program . . . You can transfer points in increments of 1,000 to top off your existing airline or hotel account balances.” Id. (emphases added, italics in original). “Southwest Airlines and El Al Israel Airlines require points transfer in increments of 1,250 and 1,050 respectively.” Id. Storey “In FIG. 1, 10 indicates access via an on-line provider such as AOL™, CompuServe™ etc. On the other hand, 20 indicates a direct access to the internet, such as via Netscape™. Upon gaining an access to the internet, 30, the program proceeds to a selection menu 40. Depending on the user's choice, from the selection menu 40 the program may proceed to PRODUCT A HOMEPAGE 100A or PROGRAM HOMEPAGE 300.” Ex. 1005, 2:56-63. “An [sic] fully integrated on-line frequency award program is disclosed. A user may access the program on-line and may browse a product catalog for shopping . . . . . Enrolled users may browse through an award catalog and electronically redeem an amount of awarded points towards an award. The program then electronically places an award redeeming order with the fulfillment house and updates the user’s award account.” Id. at Abstract (emphases added).

-74-

’402 Patent Claims Exemplary Disclosure in Newslink, Storey, and AAPA 1g) convert the quantity of reward points of the first type deceased from the reward account on the reward server computer into a corresponding amount of reward points of the second type at a predetermined reward server conversion rate, 1h) add the corresponding amount of reward points of the second type to the reward exchange account, and 1i) combine the corresponding amount of reward points of the second type added to the reward exchange account with the second set of reward points of the second type previously stored in the reward exchange account, and

“In the preferred embodiment, the user may enter the REDEEM routine 500 at any point in the program . . . . Thus, only the identification code may be required if on-line access was gained via an on-line provider . . . the user may be prompted to verify that this is the correct award he wished to redeem and enter appropriate selections, such as color, size, etc . . . The proper amount of points is then subtracted from the user's account and an adjustment is made in the frequency database, 520. A link is then established to the fulfillment house or directly to the product manufacturer and an award order is communicated.” Id. at 9:45-10:5 (emphases added). AAPA “The ’870 patent provides a system whereby the user can make purchase of products over the Internet and receive award points, which are stored in an associated database.” Ex. 1001 at 1:59-64 (emphases added). “FIG. 3 is representative of a typical user account that shows various earnings in the system transferred in from any of the co-branded partners . . . . The user can view the accumulated miles by accessing the airline server.” Id. at 3:16-25 (emphasis added). See also id. at Fig. 1 “User Accounts” in Server 100 and “User Computer” and Fig. 3 “Miles” See supra at §§ VII.B.2, VII.B.3, VII.B.6; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 70-72.

1j) conveying consideration to the reward exchange computer, the consideration having a value equivalent to the quantity of reward points of the first type

Newslink “[Y]ou can transfer Membership Rewards points into any participating frequent flyer or frequent guest program . . . You can transfer points in increments of 1,000 to top off your existing airline or hotel account balances.* Or you can transfer the entire amount of points needed for the desired reward.” Ex. 1004 at 3 (emphases added,

-75-

’402 Patent Claims Exemplary Disclosure in Newslink, Storey, and AAPA decreased from the reward account on the reward server computer;

italics in original).

“Southwest Airlines and El Al Israel Airlines require points transfer in increments of 1,250 and 1,050 respectively.” Id.; see also id. (“REWARDS AT A GLANCE”)

See supra at VII.B.5; see also Ex. 1006, Chatterjee Dec., ¶ 155, p. 73

1k) the user requesting the reward exchange computer to redeem at least some of the combined reward points of the second type from the reward exchange account for an item selected by the user; and 1l) the reward exchange computer redeeming the requested combined reward points of the second type from the reward exchange account by decreasing the reward exchange account by the combined reward points of the second type requested to be redeemed by the user for the item selected by the user.

Newslink “To get free airline tickets and hotel stays, you can transfer Membership Rewards points into any participating frequent flyer or frequent guest program. Before you call to transfer, be sure to confirm the availability of your desired reward with the airline or hotel . . . . Or you can transfer the entire amount of points needed for the desired reward.” Ex. 1004 at 3 (emphases added, italics in original). Storey “An [sic] fully integrated on-line frequency award program is disclosed . . . . Enrolled users may browse through an award catalog and electronically redeem an amount of awarded points towards an award. The program then electronically places an award redeeming order with the fulfillment house and updates the user’s award account.” Ex. 1005 at Abstract (emphasis added). “In the preferred embodiment, the user may enter the REDEEM routine 500 at any point in the program. In FIG. 4 this feature is represented by the several REDEEM 500 selections depicted at many points of the program . . . . Otherwise, the user may simply be prompted to enter the award by, for example, an award code . . . . The proper amount of points is then subtracted from the user's account and an adjustment is made in the frequency database, 520. A link is then established to the fulfillment house or directly to the product manufacturer and an award order is

-76-

’402 Patent Claims Exemplary Disclosure in Newslink, Storey, and AAPA communicated.” Id. at 9:45-10:5 (emphasis added). AAPA “The user can subsequently view an award catalog to determine which awards he may be able to redeem based on the number of points in his account.” Ex. 1001 at 1:59-64 (emphasis added). “ClickMiles may be awarded for a purchase of Gap products at the Gap web site. The ClickMiles can ultimately be redeemed for frequent flyer miles, for example at one of several major airlines.” Id. at 2:7-10. See supra at VII.B.4; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 73-74.

Claim 2

2. The method of claim 1 wherein the control comprises a hyperlink or a button.

Storey “In FIG. 1, 10 indicates access via an on-line provider such as AOL™, CompuServe™ etc. On the other hand, 20 indicates a direct access to the internet, such as via Netscape™. Upon gaining an access to the internet, 30, the program proceeds to a selection menu 40. Depending on the user's choice, from the selection menu 40 the program may proceed to PRODUCT A HOMEPAGE 100A or PROGRAM HOMEPAGE 300.” Ex. 1005, 2:56-63. “In the preferred embodiment, the user may enter the REDEEM routine 500 at any point in the program . . . the user may be prompted to verify that this is the correct award he wished to redeem and enter appropriate selections, such as color, size, etc. Otherwise, the user may simply be prompted to enter the award by, for example, an award code . . . . A link is then established . . . and an award order is communicated.” Id. at 9:45-10:5 (emphases added). AAPA

-77-

’402 Patent Claims Exemplary Disclosure in Newslink, Storey, and AAPA “FIG. 3 is representative of a typical user account that shows various earnings in the system transferred in from any of the co-branded partners . . . . The user can view the accumulated miles by accessing the airline server.” Id. at 3:16-25 (emphasis added). See supra at § VII.B.6; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 73-75.

Claims 3 and 4

3. The method of claim 1 wherein the reward account on the reward server computer is associated with a credit card reward program. 4. The method of claim 1 wherein the reward account on the reward server computer is associated with an airline reward program.

Newslink “MEMBERSHIP REWARDS, the new program allows enrollees to earn one point for every dollar spend on eligible American Express Cards® and Optima Cards.” Ex. 1004 at 1 (italics in original). “Before you call to transfer, be sure to confirm the availability of your desired reward with the airline or hotel. You can transfer points in increments of 1,000 to top off your existing airline or hotel account balances.” Ex. 1004 at 3 (emphases added). AAPA “The user can view the accumulated miles by accessing the airline server.” Ex. 1001 at 3:16-25 (emphasis added); see also id. at Fig. 1 “Airline 1” server 100. See Ex. 1006, Chatterjee Dec., ¶ 155, pp. 76-77.

Claim 5 5. A reward server comprising: 5a) “memory means for storing . . . a first set of reward points of a first type . . .” 5b) “communications means for communicating . . . with a user computer . . . that stores in a reward exchange account a second set of reward . . .” See supra claim 1a), 1b), 1c) and 1d) at 70-71; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 77-80. 5c) “processing means programmed to: provide a web page . . . comprising a control for initiating communication . . . with the reward exchange computer” See supra claim 1d at 71-73; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 80-82. 5d) “initiate . . . communication . . . to exchange a quantity of reward points of the first type . . . into reward points of the second type . . . ” 5e) “decreasing the quantity of reward points of the first type . . . from the reward account . . .”

-78-

’402 Patent Claims Exemplary Disclosure in Newslink, Storey, and AAPA 5f) “convert the quantity of reward points of the first type . . . . into a corresponding amount of reward points of the second type . . . , add the corresponding amount of reward . . . , and” 5g) “combine the corresponding amount of reward points of the second type . . . with the second set of reward points of the second type . . . .” See supra claim 1e), 1f), 1g), 1h), and 1i) at 73-74; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 82-84. 5h) “conveying consideration to the reward exchange computer . . . equivalent to the quantity of reward points of the first type . . . .” See supra claim 1j) at 74-75; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 84-85.5i) “whereby . . . the reward exchange computer is able to redeem the requested combined reward . . .” See supra claim 1k) and 1l) at 75-76; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 85-86.

Claims 6, 7, and 8 See supra claims 2, 3, and 4, respectively at 76-77; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 86-89. Claim 9 9. “A computer-implemented method . . . comprising the steps of:” 9a) “a reward server computer . . . storing . . . a first set of reward points . . . ;” 9b) “a reward exchange computer storing . . . a second set of reward points . . .” See supra claim 1a), 1b), and 1c) at 70-71; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 89-91. 9c) “the reward exchange computer providing to a user computer a display of a number of the reward points of the first type . . . and a control to . . . designate a quantity of the reward points of the first type to be exchanged . . . ” See supra claim 1d) at 71-73; see also Ex. 1001 at Figs. 1 and 3 and 3:21-23; Ex. 1006, Chatterjee Dec., ¶ 155, pp. 91-93. 9d) “the reward exchange computer receiving an instruction . . . from the user computer that designates the quantity of reward points . . . be exchanged . . .” 9e) “the reward exchange computer exchanging . . . reward points of the first type . . . into reward points of the second type” 9f) “causing the reward server computer to decrease the designated quantity of reward points . . . ,” 9g) “converting the quantity of reward points of the first type . . . into a . . . second type . . . , and” 9h) “combining the corresponding amount of reward points . . .” See supra claim 1e), 1f), 1g), 1h), and 1i) at 73-74; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 93-95. 9i) “the reward server computer conveying consideration . . . having a value equivalent to the quantity of reward points of the first type decreased from the reward account on the reward server computer”

-79-

’402 Patent Claims Exemplary Disclosure in Newslink, Storey, and AAPA See supra claim 1j) at 74-75; see also Ex. 1006, Chatterjee Dec., ¶ 155, p. 95. 9j) “the user requesting . . . to redeem . . . the combined reward points . . . redeeming the requested combined reward points of the second type . . .” See supra claim 1k) and 1l) at 75-76; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 95-96.

Claims 10, 11, and 12 See supra claims 2, 3, and 4, respectively at pp. 76-77; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 96-99.

Claim 13 13. “A rewards exchange computer comprising” 13a) “communications means for communicating . . . and a reward server computer that stores . . . a first set of reward points . . . ;” 13b) “means for storing in a reward exchange account a second set of reward points of a second type . . .” See supra claim 1a), 1b), 1c) and 1d) at 70-71; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 99-102. 13c) “processing means programmed to . . . display of a number of the reward points of the first type . . . and a control . . . to designate a quantity of the reward points of the first type to be exchanged . . .” See supra claim 1d) at 71-73; see also Ex. 1001 at Figs. 1 and 3 and 3:21-23; Ex. 1006, Chatterjee Dec., ¶ 155, pp. 102-104. 13d) “receive an instruction from the user computer . . . for adding . . . ” 13e) “exchange the designated quantity of reward points of the first type . . . into reward points of the second type . . .” 13f) “causing the reward server computer to decrease the designed quantity of reward points of the first type . . . ,” 13g) “converting . . . , adding the corresponding amount of reward points . . . and” 13h) “combining the corresponding amount of reward points . . .” See supra claim 1e), 1f), 1g), 1h), and 1i) at 73-74; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 104-106. 13i) “receive from the user computer a request to redeem . . . redeem the requested combined reward points of the second type . . . for the item selected by the user.” See supra claim 1k) and 1l) at 75-76; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 106-107.

Claims 14, 15, and 16See supra claims 2, 3, and 4, respectively at 76-77; see also Ex. 1006, Chatterjee Dec., ¶ 155, pp. 107-110.

Thus, the Challenged Claims should be canceled for being invalid under 35

U.S.C. § 103 as being obvious over Newslink, Storey, and AAPA.

-80-

VIII. CONCLUSION

Petitioner have established a reasonable likelihood that the Challenged

Claims are invalid under at least one or more of 35 U.S.C. §§ 101 and 103.

Petitioners therefore respectfully request that a post-grant review of these claims be

instituted, and that the Challenged Claims be held unpatentable. The required fees

in the amount of $30,550.00 were submitted on June 12, 2015. If there are any

additional fees due in connection with the filing of this paper, please charge the

required fees to our Deposit Account No. 130019.

Respectfully submitted, Date: June 12, 2015

/Saqib J. Siddiqui/___________ Saqib J. Siddiqui (Lead Counsel) Registration No. 68,626 Mayer Brown, LLP 1999 K Street N.W. Washington, DC 20006-1101 Telephone: (202) 263-3167 Fax: (202) 263-5367 Email: ssiddiqui@mayerbrown.com

Stephen E. Baskin (Backup Counsel pro hac vice motion requested) Mayer Brown, LLP 1999 K Street N.W. Washington, DC 20006-1101 Telephone: (202) 263-3364 Fax: (202) 263-3300 Email: sbaskin@mayerbrown.com

Counsel for Petitioners American Express Company and American Express Travel Related Services Company, Inc.

-1-

CERTIFICATION OF SERVICE (37 C.F.R. §§ 42.6(e), 42.105(a))

The undersigned hereby certifies that the above-captioned “Petition for

Covered Business Method Patent Review of U.S. Patent No. 8,423,402 Under 35

U.S.C. § 321 and § 18 of the Leahy-Smith America Invents Act,” including its

supporting evidence (EXHIBITS 1001-1019), was served in its entirety on June

12, 2015, upon the attorneys of record for the patent at the following addresses via

USPS Express Mail:

Anthony Barkume Anthony Natoli

Barkume & Associates, P.C. 20 Gateway Lane

Manorville, NY 11949

Respectfully submitted, /Saqib J. Siddiqui/ Saqib J. Siddiqui Registration No. 68,626 Mayer Brown, LLP 1999 K Street N.W. Washington, DC 20006-1101 Telephone: (202) 263-3167 Fax: (202) 263-5367 Email: ssiddiqui@mayerbrown.com

-2-

ADDITIONAL SERVICE INFORMATION

Further, the undersigned hereby certifies that a courtesy copy the above-

captioned “Petition for Covered Business Method Patent Review of U.S. Patent

No. 8,423,402 Under 35 U.S.C. § 321 and § 18 of the Leahy-Smith America

Invents Act,” including its supporting evidence (EXHIBITS 1001-1019), was

served in its entirety on June 12, 2015, upon the attorneys of record in related

matters in the Southern District of Florida at the following email addresses via

Electronic Mail:

Steven E. Brust Edward A. Pennington

Smith, Gambrell & Russell, LLP sbrust@sgrlaw.com

epennington@sgrlaw.com

Respectfully submitted, /Saqib J. Siddiqui/ Saqib J. Siddiqui Registration No. 68,626 Mayer Brown, LLP 1999 K Street N.W. Washington, DC 20006-1101 Telephone: (202) 263-3167 Fax: (202) 263-5367 Email: ssiddiqui@mayerbrown.com