For our weekly SoCal IP Institute meeting on Monday, February 8, 2021 we will discuss the following
Federal Circuit finds claims are directed to the abstract idea. Mohapatra’s innovation was to create a more dynamic security code than the 3-4 digit code on the back of a credit card by using an internet-based account management approach. The Examiner rejected the claims as obvious, indefinite, and failing to claim patent eligible subject matter. The PTAB reversed the obviousness conclusions, but maintained the rejection on the other grounds. On the merits of Section 101, the court found that the claims are directed to the abstract idea of facilitating “an individual to alter the identification code associated with a financial instrument, such as a credit card, to protect against fraud.” Mohapatra’s invention is limited in a number of ways and does not preempt all uses of this idea, but the court explained: “The fact that the claims are directed to a specific subset of that abstract idea—in this case, enabling a credit card user to change the security code on the card by using a web application—does not render the idea any less abstract.”
The following claim 18 was seen as representative for the appeal:
18. A method for countering credit card fraud arising from compromised credit card information by utilizing cardholder changeable card security code (CSC; also known as card verification value CVV2 or card verification data CVD or card identification code CID or card verification code CVC2) comprising:
a) A card issuer enabling change of card security code printed on the card, by
allowing cardholder to choose a new security code value as often as cardholder wishes,
facilitating recordation of chosen card security code by the cardholder by providing an internet connected card account management facility,
using most recently recorded card security code to verify subsequent transaction authorization requests without requiring any change in existing credit cards, terminals, equipment, computer software and communication protocols used in transaction authorization, and
denying transactions when card security code provided during authorization does not match card security code on record;
b) Cardholder changing card security code any time s/he deems it necessary to mitigate risk from possible card security code compromise, by
selecting a new security code value to be used as personal secret separate from the card without requiring assistance from any software program running on any device,
ensuring that selected new security code value is different from the printed code on first change and is different from last recorded code on subsequent changes,
recording the new card security code value using issuer provided internet connected card account management facility, and
remembering and providing the new card security code when prompted during subsequent credit card authorizations.
M & K holdings, inc., v. Samsung Electronics Co., LTD (CAFC, Feb. 1, 2021) (Opinion here)
The CAFC held in part that the PTAB erred in finding a claim anticipated when the petition for IPR had only asserted obviousness as to the claim. The PTAB held that “claim 3 was anticipated by WD4-v3, although Samsung’s petition had asserted only obviousness as to that claim.” Despite Samsung’s argument that the PTAB’s analysis was merely “a simpler path to invalidating claim 3” that “was inherent in Samsung’s obviousness theory,” the CAFC said that the holding represented “a marked deviation” from “the evidence and theories presented by the petition or institution decision, creating unfair surprise.” Arthrex, Inc. v. Smith & Nephew, Inc., 935 F.3d 1319, 1328 (Fed. Cir. 2019). The court added:
M&K also argued that the references Samsung relied on did not constitute printed publications under 35 U.S.C. § 102. Specifically, M&K said that “interested persons of ordinary skill could not have accessed any of those references by exercising reasonable diligence.” The PTAB disagreed, finding that all of the references were publicly accessible, discussed at industry meetings, and posted on the Joint Collaborative Team on Video Coding (JCT-VC) website, which is a joint task force to establish industry standards for high-efficiency video coding. M&K felt that, in order to find the references on the website, users must have known the date, title and number of the papers, cutting against a finding of truly public accessibility. However, the CAFC said that “The law regarding public accessibility is not as restrictive as M&K suggests—a website’s landing page is not required to have search functionality,” explained the CAFC.
All are invited to attend. Due to the Covid-19 situation the meeting will be conducted via video at 1:00pm PT. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Elisha Manzur by 9 am Monday morning to obtain a link to the video conference.