United States: What Is An "Account"? Nonobviousness Argument Based Only On Proposed Construction Backfires For Caselas

Holding

In Unified Patents, LLC v. Caselas, LLC, IPR2021-00799, Paper 21 (P.T.A.B. Oct. 17, 2022), the Patent Trial and Appeal Board ("the Board") issued a final written decision, holding all challenged claims of U.S. Patent No. 9,715,691 ("the '691 patent") unpatentable.

Background

The '691 patent is directed to providing transaction history information including charge-back information to prevent or reduce the incidence of fraud. The fraud the method seeks to prevent includes credit card fraud and fraudulent activities in connection with bank accounts.

Claim 1 of the '691 patent reads:

1. A computer-implemented method, comprising: processing, with a processing device, information regarding an account involved in a transaction involving an individual; generating, with the processing device, a report or a message in response to the processing of the information regarding the account, wherein the report or the message contains information regarding a charge-back regarding a previous transaction involving the account; and transmitting, with or from a transmitter, the report or the message to a communication device associated with a merchant, a vendor, or a provider, of a good, a product, or a service.

Petitioner contended that all claims of the '691 patent are unpatentable in view of U.S. Patent No. 6,516,056 ("Justice") under 35 USC § 103.

Claim Construction

The Board first addressed claim construction issues. First, Patent Owner Caselas argued that the term "account" should be construed as "any account that can be utilized by an individual and/or entity in order to engage in a transaction with a merchant, vendor, and/or provider of goods, products, and/or services." Id. at *9. Petitioner argued that while Patent Owner's proposed construction relied on language in the specification, it should not be adopted because it limited the term "account" to payment accounts. Id. at *10.

Ultimately, the Board agreed with Patent Owner that the specification defined the term "account" but disagreed with Patent Owner's reading that the definition is limited to payment account. Id. at *11. The Board provided three different reasons as to why they disagreed with Patent Owner's limiting definition. First, the claim language included no modifier that would restrict the meaning of "account." Id. at *12. Second, the specification's definition of "account" failed to mention payment accounts. Id. Finally, the Board noted that one of ordinary skill would not conclude that the specification intended for the definition of "account" to be limited to payment accounts. Id. at *13.

Patent Owner also argued that the phrases "an account involved in a transaction" ("the First Phrase") and "previous transaction involving the account ("the Second Phrase") should be read such that "the account" in the Second Phrase refers to the same "account" in the First Phrase. Id. at *14. Petitioner argued against this proposed construction because the construction of "account" improperly reads the term as a payment account. Id. at *15.

The Board agreed with the construction that the account referenced in the Second Phrase is the same account of the First Phrase. Id. However, the Board disagreed with Patent Owner that the term "account" is limited to a payment account and instead stated that the plain and ordinary meaning should be applied to this term. Id.

Obviousness

Petitioner challenged claims 1-23 under 35 U.S.C. § 103, contending that the matter would have been obvious in view of Justice. Patent Owner argued that Petitioner failed to show that Justice would have rendered the claims obvious if the Board construes the claims as the Patent Owner argued. Id. at *16].

Justice relates to a system and method for preventing fraud when customers use a credit card to purchase goods and services over the telephone or Internet in non-face-to-face transactions. Id. Justice does this by "identifying one or more fraud indicators by examining past transactions associated with the account in question." Id.

Applying the correct claim construction, the Board agreed with Petitioner's assessment that each of the elements of independent claims 1, 18, and 20 were taught by Justice. Id. at *24.

The Board then applied Patent Owner's proposed construction of "account." Patent Owner argued that under its proposed construction, Justice failed to disclose several limitations of the claims because Justice distinguished between a customer account and a payment account, therefore tying its fraud indicators to the customer account not the payment account. Id. However, Petitioner argued that Patent Owner acknowledged that Justice disclosed a customer account and a payment account, and that Patent Owner limited its arguments to Justice's failure to tie the fraud indicators to the payment account. Id. at *25. Petitioner argued that Patent Owner's argument was incorrect, and that Justice did tie its fraud indicators to the payment account. Id. Petitioner further argued that some of the Patent Owner's arguments were limited to claim 18 and therefore did not apply to independent claims 1 and 20. Id. at *26.

The Board ultimately agreed with Petitioner that Justice disclosed all of the claim limitations of the '691 patent and found the Patent Owner's remaining arguments to be unpersuasive. Id. at *29-30.

Take-aways

The case demonstrates the importance of language choice in claim drafting. If the Patent Owner had meant for the term "account" to mean payment account, it could have provided a more specific definition in the specification or narrower claim language. Care should be taken if a special or specific definition is intended to avoid having claim language interpreted under its "plain and ordinary meaning."

This case additionally shows the importance of making all arguments that are available to you. Patent Owner's argument rested solely on the validity of the claims as properly construed. Patent Owner missed the opportunity to argue that Justice failed to disclose or render obvious the limitations in the independent claims if the claims were not construed as the Patent Owner proposed. While the success of these arguments could not be foretold, making these arguments would have given the Patent Owner another chance for success after the court decided against its proposed construction. No matter how strong you think your argument is for a proposed claim construction, it is worthwhile to consider the other party's proposed construction and arguments that would be made if the PTAB were to adopt that construction. As the saying goes, don't put all your eggs in one basket.

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