Xerox Corp. v. Bytemark, Inc.

Trials@uspto.gov 	Paper No. 9
571-272-7822 	Entered: August 24, 2022
UNITED STATES PATENT AND TRADEMARK OFFICE
_______________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
_______________
XEROX CORP., ACS TRANSPORT SOLUTIONS, INC., XEROX
TRANSPORT SOLUTIONS, INC., CONDUENT INC., AND NEW
JERSEY TRANSIT CORP.,
Petitioner,
v.
BYTEMARK, INC.,
Patent Owner.
_______________
IPR2022-00624
Patent 10,360,567 B2
_______________
Before BENJAMIN D. M. WOOD, BARRY L. GROSSMAN, and
JAMES A. TARTAL, Administrative Patent Judges.
WOOD, Administrative Patent Judge.
DECISION
Denying Institution of Inter Partes Review
35 U.S.C. § 314

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I. 	INTRODUCTION
A. 	Background
Xerox Corp., ACS Transport Solutions, Inc., Xerox Transport
Solutions, Inc., Conduent Inc., and New Jersey Transit Corp. (collectively,
“Petitioner”) filed a Petition (Paper 1, “Pet.”) requesting inter partes review
of claims 1–16 of U.S. Patent No. 10,360,567 B2 (Ex. 1001, “the ’567
patent”). Bytemark, Inc. (“Patent Owner”) filed a Preliminary Response
(Paper 7, “Prelim. Resp.”).
We have authority under 35 U.S.C. § 314, which provides that an
inter partes review may not be instituted “unless . . . there is a reasonable
likelihood that the petitioner would prevail with respect to at least 1 of the
claims challenged in the petition.” 35 U.S.C. § 314(a) (2018). Upon
considering the Petition, we determine that Petitioner has not shown a
reasonable likelihood that it would prevail in showing the unpatentability of
at least one of the challenged claims. Accordingly, we determine not to
grant the Petition.
B. 	Related Proceedings
Petitioner states that Patent Owner has asserted the ’567 patent against
Petitioner in Case No. 17-CV-1803 pending in the United States District
Court for the Southern District of New York. Pet. 56; see Ex. 1012 (Patent
Owner’s Third Amended Complaint). Petitioner also seeks inter partes
review of a related patent, U.S. Patent No. 10,346,764 B2. See Xerox Corp.
et al. v. Bytemark, Inc., IPR2022-00621, Paper 1 (Feb. 18, 2022). Another
related patent, U.S. Patent No. 8,494,967 (“the ’967 patent”), was the subject
of a previous inter partes review. See Masabi Ltd. v. Bytemark, Inc.,

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IPR2017-01449, Paper 38 at 4 (PTAB Dec. 3, 2017) (Final Written Decision
finding some of the claims of the ’976 patent unpatentable).
C. 	The ’567 Patent
The ’567 patent issued July 23, 2019 from an application filed May
23, 2014, and is titled “Method and System for Distributing Electronic
Tickets with Data Integrity Checking.” Ex. 1001, codes (45), (22), (54).
Electronic tickets are “procured electronically and stored on the user’s
device,” e.g., a mobile phone. Id. at 2:13–14, 30–31. 1 When the ticket is
presented, the ticket taker verifies the ticket by inspecting a “visual object
that a human can perceive without a machine scanning it.” Id. at 2:32–34.
Figure 1 of the ’567 patent illustrates the “[b]asic architecture” of the
electronic ticketing system of the invention, and is reproduced below.
1 The ’567 patent also refers to a “mobile ticket,” which we understand to be
synonymous with “electronic ticket.” Ex. 1001, 11:5–11. The ’567 patent
defines the term “pass” used in claim 1 as a “mobile ticket.” Id. at 11:17–
18.

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As illustrated in Figure 1 of the ’567 patent, a customer can use
mobile device 1 to purchase a ticket from a service, such as an on-line
website, that operates system server 2 and database 3. Ex. 1001, 2:53–54,
3:51–53. The ticketing service sends to the user’s device a unique number,
referred to as a “token,” that is also stored in the system database. Id. at
2:54–56. “Ticket holders that have purchased tickets have a data record in
the system database that contains the unique token associated with the ticket
and other relevant information, including the venueID [sic] and an identifier
identifying the specific show the ticket is for.” Id. at 4:5–9. When the time
comes to present the ticket, the venue can select what visual indicator will be
used as the designated validation visual object. Id. at 2:56–59. As the ’567
patent explains:
The user can then request the validation visual object. The
user’s device will have an application that launches a user
interface. The user can select “validate” or some other
equivalent command to cause the application to fetch and
download from the ticketing system a data object referred to
herein as a ticket payload, which includes a program to run on
the user’s device. . . . As a result, the application transmitted to
the user’s device is previously unknown to the user and not
resident in the user’s device. At that point the user’s device can
execute the program embodied in the ticket payload, which
causes the validation visual object to be displayed on the user’s
device. The ticket taker knows what the validating visual
object is and simply looks to see that the user’s device is
displaying the correct visual object.
Id. at 2:59–3:7.
In addition to using a validating visual object to assist in validating the
electronic ticket when the ticket is presented, the ’567 patent teaches “data
integrity checking . . . to be sure that the pass data and the software

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managing that pass data on the user’s device has [sic] not been altered
improperly.” Ex. 1001, 13:21–23. For example, “if the pass data or other
data is unrecognized by the server or is inconsistent with a separate locally
generated key on the device, there is an anomaly.” Id. at 13:24–26. “When
these anomalies are detected the tickets and user account are locked down to
stop fraudulent activity.” Id. at 13:26–28; see id. at 4:11–16 (teaching that
an application on the user’s mobile device “fetches the stored ticket token
and transmits that token to the system,” which “looks up the token to check
that the token is valid for the upcoming show. If the token is valid, then the
system transmits back to the device a ticket payload.”). The ’567 patent
further teaches that:
If such suspicious activity is detected, the user account is
flagged for further investigation if necessary, for example, by
setting a status bit in a data record associated with the user to
indicate a fraudulent transaction has occurred. When this
logical condition is established, any passes that were previously
locked to the device will no longer be available on any device.
That is, the user’s account data on the back office server is set
so that each purchased pass has a status bit indicating that it is
unavailable for use for security reasons.
Id. at 14:5–14.
D. 	The Challenged Claims
Petitioner challenges claims 1–16 of the ’567 patent. Pet. 1. Claim 1
is the sole independent claim, and is reproduced below: 2
2 Claim 1 has been reformatted slightly to include Petitioner’s limitation
designations and for clarity.

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1. [1p] A mobile ticketing system for detecting
fraudulent activity of tickets using data integrity,
comprising:
[1a] a mobile device in communication with a server;
[1b] a server adapted to receive authentication data for
a user account from the mobile device via a data network,
and
[1c] transmit data in the form of a ticket payload that
contains code to the mobile device embodying a pass,
[1d] wherein the pass includes a validation visual
object that a ticket taker can rely on as verification of the
pass without using a scanning device and wherein the
validation visual object is not accessible until a time
selected to be close to the point in time where the ticket
has to be presented;
[1e] wherein the server is further configured to:
receive the pass with the data from the mobile device
and determine if there is any mismatch in the received data
of the pass by comparing the received data with the data
transmitted;
block the user account in an event of the received data
is mismatched with the transmitted data and detected as a
fraudulent activity; and
[1f] determine the occurrence of the fraudulent activity
associated with the user account in connection with the
mobile ticketing system and
store in a data record associated with the account a
data value indicating the fraudulent activity and
[1g] in dependence on the data value indicating
fraudulent activity, the code in the ticket payload makes
the pass, including the validation visual object, no longer
available on the device.
Ex. 1001, 17:50–18:12.

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E. 	Asserted Grounds of Unpatentability
Petitioner contends that the challenged claims are unpatentable based
on the following specific grounds (Pet. 12):
No. Claim(s)
Challenged
35 U.S.C.
§ Reference(s)/Basis
1 	1–6, 8–10, 12–16 	§ 103 	Terrell, 3 Ritter 4
2 	7 	§ 103 Terrell, Ritter,
Masahiro 5
3 	11 	§ 102 Terrell, Ritter,
Laudermilch 6
In support of its proposed grounds, Petitioner relies on the Declaration
of Dr. Mark Jones (Ex. 1003).
II. 	ANALYSIS
A. 	Level of Ordinary Skill in the Art
Petitioner asserts that one of ordinary skill in the art at the time of the
invention “would have at least a Bachelor of Science Degree in Computer
Science, Computer Engineering, or similar educational background, or
equivalent on-the-job training, including approximately three years of
experience in developing mobile applications.” Pet. 11 (citing Ex. 1003
3 WO 2009/141614 A1 (pub. Nov. 26, 2009) (Ex. 1008).
4 US 7,114,179 B1 (Sept. 26, 2006) (Ex. 1011).
5 JP 2006-201997A (pub. Aug. 3, 2006) (Ex. 1010). The first named
inventor of this reference is Yukimi Watakabe. Id. code (72). Nonetheless,
for purposes of this opinion, we use Petitioner’s appellation.
6 U.S. 8,259,568 B2 (Sept. 4, 2012) (Ex. 1009).

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¶ 14). Patent Owner contends that “a POSITA in the timeframe of the
invention would have a bachelor’s degree in computer engineering or similar
discipline and approximately two years of experience designing mobile
applications.” Prelim. Resp. 6.
The parties’ positions are largely in agreement, differing only in the
proposed length of experience in developing mobile applications. Because
the outcome of this case would not differ under either definition, we need
not resolve the difference. Further, we presume that the cited prior art
references reflect the level of ordinary skill at the time of the invention. See
Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001).
B. 	Claim Construction
We construe the claims “using the same claim construction standard
that would be used to construe the claim in a civil action under 35 U.S.C.
[§] 282(b), including construing the claim in accordance with the ordinary
and customary meaning of such claim as understood by one of ordinary skill
in the art and the prosecution history pertaining to the patent.” 37 C.F.R.
§ 42.100(b); see Phillips v. AWH Corp., 415 F.3d 1303, 1312–13 (Fed. Cir.
2005). Any special definitions for claim terms must be set forth in the
Specification with reasonable clarity, deliberateness, and precision. See In
re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994).
Petitioner and Patent Owner agree that no claim term requires express
construction, and indeed neither party offers constructions for any claim
term. Pet. 13–14; Prelim. Resp. 6. In the absence of any proposed
constructions, and as we have determined not to institute inter partes review,
we decline to expressly construe any claim term in the first instance.

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Accordingly, we proceed with the understanding that each term should be
accorded its plain and ordinary meaning.
C. 	Ground 1: Claims 1–6, 8–10, 12–16—Obvious over Terrell
and and Ritter or the knowledge of a POSITA
Petitioner alleges that claims 1–6, 8–10, and 12–16 would have been
obvious over Terrell and “Ritter or the [k]nowledge of a POSITA.” Pet. 19–
45. Claim 1 is independent, and claims 2–6, 8–10, and 12–16 ultimately
depend from claim 1. Ex. 1001, 17:50–19:12.
1. 	Terrell
Terrell describes methods and systems for electronic ticketing in
which the electronic ticket contains an “eye-readable” image displayed by a
mobile device “for inspection purposes,” and machine-readable code
defining at least a unique ticket number that can be used to authenticate the
ticket. Ex. 1008, 2:7–13; id. at 4:18–20 (same). Figure 1 depicts Terrell’s
system, and is reproduced below:

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As depicted in Figure 1 of Terrell, a customer, such as user 105, may
purchase an electronic ticket from service/goods provider 108A or 108B
(e.g., a rail service provider) via wireless application server 101 using a
mobile device such as mobile phone 102. Ex. 1008, 4:5–29. Server 101
provides the ticket, with a unique ticket number, to mobile device 102, and
stores details of the ticket, including the ticket number, in verification
database 111. Id. at 5:1–4, Figs. 7, 11. The ticket number is displayed on
the ticket and also converted to a barcode displayed on the ticket, so the
barcode may be read and compared to the displayed ticket number, “thus
providing a very simple check of the ticket’s authenticity.” Id. at 14:5–9,
Fig. 11. Further, “[w]here a database of the unique ticket numbers is
available, this ticket number can also be checked against a database to
ensure that it is valid.” Id. at 14:9–11. Such an inspection of the ticket
number may also be logged on verification database 111 by server 101. Id.
at 14:11–13. Thus, “if two separate uses of the ticket are logged, this may
be identified by the server 101 and the ticket’s further use may be blocked.”
Id. at 14:13–15. “Alternatively, the purchaser of the ticket could be blocked
from further use of the system or pursued in respect of their potential fraud.”
Id. at 14:15–17.
2. 	Ritter
Ritter “relates to a method and a system for ordering, loading and
using admission tickets for access to access-controlled devices,” such as
“means of public transportation, secured buildings, halls or exhibition
grounds.” Ex. 1011, 1:4–6, 2:52–54. Figure 1 of Ritter depicts the
described invention, and is reproduced below:

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As illustrated in Figure 1 of Ritter, a user may order an admission
ticket from reservation center 4 by means of mobile communications
terminal 1, e.g., a “mobile radio telephone,” using mobile network 6.
Ex. 1011, 5:5–14, 51–53. Reservation center 4 then transmits the admission
ticket over network 6 to the user’s mobile terminal; the ticket may include a
ticket number, the location of the event for which access is sought, and
“special codes which indicate a special service” and “are processed in
accordance with the special code according to a special procedure.” Id. at
5:62–6:1, 6:17–21. The transmitted ticket is received by mobile terminal 1
and stored in memory module 21, e.g., SIM card 2. Id. at 4–7. Admission
tickets can be loaded “in the form of small programs applications, so-called
applets on chipcards 2” (in particular SIM card 2). Id. at 6:13–14, 30–32.
According to Ritter, “such applets . . . can be automatically erased during
marking as used.” Id. at 6:34–35.

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To use the admission ticket, mobile terminal 1, with the ticket stored
in its memory, is placed near reading device 31 of access-controlled service
device 3. Ex. 1011, 6:37–41. Ticket data, such as the ticket number, is
transmitted to reading device 31, which compares the data to current access
data, and access is authorized based on the comparison. Id. at 7:13–41.
Ritter teaches that “access tickets that have been used for authorized access
to a respective access-controlled device 3, can be marked as used, for
example through updating of the access data stored in the reservation center
4, which has been informed by the reading device 31.” Id. at 7:42–46.
3. 	Principles of Law
“A patent for a claimed invention may not be obtained,
notwithstanding that the claimed invention is not identically disclosed as set
forth in [35 U.S.C. § 102], if the differences between the claimed invention
and the prior art are such that the claimed invention as a whole would have
been obvious before the effective filing date of the claimed invention to a
person having ordinary skill in the art to which the claimed invention
pertains.” 35 U.S.C. § 103. Obviousness is a question of law based on
underlying findings of fact. Graham v. John Deere Co., 383 U.S. 1, 17
(1966). The underlying factual considerations “include the scope and
content of the prior art, the differences between the prior art and the claimed
invention, the level of ordinary skill in the art, and any relevant secondary
considerations” of non-obviousness, including commercial success of the
patented product or method, a long-felt but unmet need for the functionality
of the patented invention, and the failure of others who have unsuccessfully
attempted to accomplish what the patentee has achieved. Id. at 17–18. The
obviousness analysis should not be conducted “in a narrow, rigid manner,”

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but should instead focus on whether a claimed invention is merely “the
result[] of ordinary innovation,” which is not entitled to patent protection.
KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007).
4. 	Discussion
Sole independent claim 1 requires the server to be configured to, inter
alia, “store in a data record associated with the user account a data value
indicating the fraudulent activity.” Ex. 1001, 18:6–8. Regarding this
limitation, Petitioner notes Terrell’s teaching that “after fraudulent activity is
detected, ‘the purchaser of the ticket could be blocked from further use of
the system or pursued in respect of their potential fraud.’” Pet. 28 (quoting
Ex. 1008, 14:15–17). Petitioner asserts that “[a] POSITA would understand
that such a blocking would require recording the blocking in a data record
associated with that user’s account.” Id. (citing Ex. 1003 ¶ 54). Petitioner
also contends that “[a] POSITA would find it obvious that blocking the
account of the purchaser from further use of the system would include
storing a data value indicating the fraudulent activity in a data record
associated with the user account, for example, in Terrell’s registration details
database 112 or its database 111.” Id. Further, according to Petitioner:
This is especially true in light of Terrell’s teaching that “if two
tickets were found to have the same unique ticket number, the
scanner would be configured to provide an alert to the
inspector,” and that “all barcode scan records may be centrally
collated and analyzed to identify potential fraudulent use.”
Id. at 28–29 (quoting Ex. 1008, 14:30–15:3; citing Ex. 1003 ¶ 54).
Patent Owner responds, inter alia, that “[t]he Petition fails to show
that the Terrell/Ritter combination teaches or suggests storing a data value
indicating fraudulent activity.” Prelim. Resp. 8. Patent Owner asserts that

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“Terrell, at most, teaches blocking a ticket purchaser from further use of the
Terrell system based on potential fraud.” Id. at 8–9. Patent Owner contends
that “[t]here is no indication anywhere in Terrell . . . that this is achieved
using a data value indicating fraudulent activity, as opposed to some other
manner of blocking a user, such as deleting the user’s account or reporting
the user for fraud.” Id. at 9. Patent Owner further submits that Petitioner’s
argument “that a POSITA’s ‘understanding’ would find this limitation
obvious . . . is an improper attempt to use a POSITA’s common knowledge
to supply a wholly missing claim limitation without evidentiary support or
satisfying the ‘searching’ standard required by the Federal Circuit.” Id.
Instead, according to the Patent Owner, Petitioner’s “entire analysis consists
of conclusory statements.” Id. at 10.
Petitioner does not allege, and we do not find, that Terrell expressly
teaches a server configured to “store in a data record associated with the user
account a data value indicating the fraudulent activity.” Pet. 28. Instead,
Petitioner relies on Terrell’s teaching that “the purchaser of the ticket could
be blocked from further use of the system or pursued of their potential
fraud,” and asserts that: (1) such a blocking would “require” recording the
blocking in a data record associated with the user’s account; and (2) a
POSITA “would find it obvious” that “blocking the account of the
purchaser” would including “storing a data value indicating the fraudulent
activity in a data record associated with the user account.” Id. But
Petitioner does not provide sufficient evidence or persuasive reasoning to
support either of these assertions.
First, Terrell does not teach “blocking the account of the purchaser,”
as the second assertion noted above implies. Rather, Terrell teaches

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blocking the purchaser. Ex. 1008, 14:15–17. Thus, it is far from clear that
blocking the purchaser would “require” recording the blocking in a record in
the purchaser’s account, as opposed to—as Patent Owner suggests (Prelim.
Resp. 9)—deleting the purchaser’s account altogether.
Petitioner’s only evidence in support of its assertion that blocking the
purchaser would require recording the blocking in a record in the user’s
account is the opinion of its Declarant, Dr. Jones. Pet. 28 (citing Ex. 1003
¶ 54). We have reviewed this excerpt from Dr. Jones’ declaration and note
that it merely repeats, verbatim, the conclusory assertion for which it is
offered to support. See Ex. 1003 ¶ 54 (Dr. Jones declaring that “[a] POSITA
would understand that such a blocking would require recording the blocking
in a data record associated with that user’s account.”). Dr. Jones does not
cite to any additional supporting evidence or provide any technical reasoning
to support his statement. Thus, the cited declaration testimony is conclusory
and unsupported, adds little to the conclusory assertion for which it is
offered to support, and is entitled to little weight. See 37 C.F.R. § 42.65(a)
(“Expert testimony that does not disclose the underlying facts or data on
which the opinion is based is entitled to little or no weight.”); Upjohn Co. v.
Mova Pharm. Corp., 225 F.3d 1306, 1311 (Fed. Cir. 2000) (“Lack of factual
support for expert opinion to factual determinations, however, may render
the testimony of little probative value in a validity determination.”) (quoting
Ashland Oil, Inc. v. Delta Resins & Refractories, Inc., 776 F.2d 281, 294
(Fed. Cir. 1985)); Carella v. Starlight Archery & Pro Line Co., 804 F.2d
135, 138 (Fed. Cir. 1986) (“Although in some circumstances unsupported
oral testimony can be sufficient to provide prior knowledge or use, it must
be regarded with suspicion and subjected to close scrutiny.”).

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Similarly, Petitioner’s only support for the assertion that “[a] POSITA
would find it obvious that blocking the account of the purchaser from further
use of the system would including storing a data value indicating the
fraudulent activity in a data record associated with the user account” is
Dr. Jones’ Declaration. Pet. 28. 7 Again, however, Dr. Jones offers only a
verbatim restatement of the assertion being supported, without any
supporting evidence or technical reasoning. Neither Petitioner nor Dr. offers
a construction for the terms “data value” or “data record,” for example.
This is particularly problematic in cases where, like here, expert
testimony is offered not simply to provide a motivation to combine prior-art
teachings, but rather to supply a limitation missing from the prior art. See
KSR Intern. Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007) (stating that a
“factfinder . . . must be cautious of arguments reliant upon ex post
reasoning”); Arendi S.A.R.L. v. Apply, Inc., 832 F.3d 1355, 1361–62 (Fed.
Cir. 2016) (holding that reliance on common sense in an obviousness
analysis is “typically invoked to provide a known motivation to combine,
not to supply a missing claim limitation”) (emphasis omitted). Although
doing so might be permissible when “the limitation in question [is]
unusually simple and the technology particularly straightforward” (id. at
1362), Petitioner has not alleged that to be the case here, much less provided
support for such an allegation.
7 Again, Terrell does not teach blocking the account of the ticket purchaser
(but rather teaches blocking the purchaser itself), so even if accepted as true
this assertion would not necessarily support a finding that Terrell teaches the
limitation in question.

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Finally, we are not persuaded that Terrell’s teachings that “if two
tickets were found to have the same unique ticket number, the scanner would
be configured to provide an alert to the inspector,” and “all barcode scan
records may be centrally collated and analyzed to identify potential
fraudulent use,” supports a finding that Terrell teaches the limitation in
question. Petitioner does not explain how it is “especially true,” in light of
these statements, that a POSITA would find it obvious that blocking the
account of the purchaser from further use of the system would include
storing a data value indicating the fraudulent activity in a data record
associated with the user account. See Pet. 28–29. These statements do not,
on their face, refer to blocking or modifying a user account, much less
blocking a user. The only evidence offered to support a connection between
these statements and the limitation in question is the declaration testimony of
Dr. Jones, to which, for the same reasons discussed above, we give little
weight.
For the above reasons, we are not persuaded that Petitioner has
sufficiently shown that claim 1, as well as dependent claims 2–6, 8–10, and
12–16, would have been obvious over Terrell and Ritter. Therefore, we are
not persuaded that Petitioner is reasonably likely to prevail with respect to at
least one of the claims challenged in the Petition, and decline to institute
inter partes review of these claims.
D. 	Remaining Grounds
Petitioner additionally contends that (1) claim 7 would have been
obvious over Terrell, Ritter, and Masahiro; and (2) claim 11 would have
been obvious over Terrell, Ritter, and Laudermilch. Pet. 45–51. As claims
7 and 11 depend from claim 1, these proposed grounds of unpatentability

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rely on the combination of Terrell and Ritter rendering unpatentable claim 1.
Ex. 1001, 18:27–37, 52–56; Pet. 45–51. Therefore, because we are not
persuaded that Petitioner is reasonably likely to prevail in showing that
claim 1 would have been obvious over Terrell and Ritter, we decline to
institute inter partes review of claims 7 and 11.
III. 	CONCLUSION
For the foregoing reasons, we determine that Petitioner has not shown
that there is a reasonable likelihood that it would prevail with regard to at
least one of the claims challenged in the Petition. Accordingly, we decline
to institute inter partes review. 35 U.S.C. § 314(a).
IV. 	ORDER
For the reasons given, it is
ORDERED that the Petition for Inter Partes Review is denied.

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PETITIONER:
Ashley N. Moore
Scott W. Hejny
McKool Smith P.C.
amoore@mckoolsmith.com
shejny@mckoolsmith.com
PATENT OWNER:
James T. Carmichael
Minghui Yang
Carmichael IP, PLLC
jim@carmichaelip.com
mitch@carmichaelip.com