Adam Lee

Patent Trials and Appeals Board

Sep 27, 2019

13397014 - (D) (P.T.A.B. Sep. 27, 2019)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
13/397,014 02/15/2012 Adam Lee BOKU-P062 1928
17169 7590 09/27/2019
Stephen M. De Klerk
MatterLight IP
2033 Gateway Place
5th Floor
San Jose, CA 95110
EXAMINER
NORMAN, SAMICA L
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
09/27/2019 ELECTRONIC
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address(es):
ariana@matterlightip.com
stephen@matterlightip.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte ADAM LEE
____________

Appeal 2018-001381
Application 13/397,014
Technology Center 3600
____________

Before CYNTHIA L. MURPHY, BRADLEY B. BAYAT, and
TARA L. HUTCHINGS, Administrative Patent Judges.

MURPHY, Administrative Patent Judge.

DECISION ON APPEAL1

The Appellant2 appeals from the Examiner’s rejections of claims 1–7,
9–20, and 22–26 under 35 U.S.C. §§ 101 and 103. We sustain the Examiner’s
rejection under 35 U.S.C. § 101 (Rejection I); and we do not sustain the
Examiner’s rejections under 35 U.S.C. § 103 (Rejections II and III).

Thus, we AFFIRM.

1 We have jurisdiction over this appeal under 35 U.S.C. §§ 6(b) and 134.
2 “The real party in interest is Boku, Inc.” (Appeal Br. 3.)
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BACKGROUND
According to the Appellant, the claims on appeal “are specifically
directed to budget rule based budget adjustment methodology.” (Appeal
Br. 18.)
A budget is defined as “an estimate, often itemized, of expected
income and expense for a given period in the future,” and “an itemized
allotment of funds, time, etc., for a given period.”3 Thus, a “budget” is a
fundamental economic practice which facilitates a person’s management of
his/her spending behavior. And with a budget, a person allots his/her
expected income (e.g., monthly paycheck) to expected itemized expenses.
For example, suppose a person receives a monthly paycheck of
$200.00. (See e.g., Spec., ¶ 106, Figs. 6B, 10.) There are certain necessities,
such as food, that this paycheck must cover, and so the person will allot
enough money for groceries (e.g., $50.00). (See e.g., id., ¶ 112, Fig. 23.)
The person will also allot discretionary expenses such as those associated
with buying new clothes (e.g., $50.00 for apparel) and dining out (e.g.,
$50.00 for restaurants). (See id.)
The Appellant calls the person’s monthly paycheck of $200.00 “a
stored value.” (Appeal Br. 6.) The Appellant calls the collective allotments
(e.g., $50.00 for groceries, $50.00 for apparel, $50.00 for restaurants) “a
plurality of rules” in which each “respective rule is a budget rule with a
budget amount.” (Id.) And the Appellant calls the label for each allotment
(e.g., groceries, apparel, restaurants) “a separate respective category of
expenses.” (Id.)

3 https://www.dictionary.com/ browse/budget (last visited September 22,
2019).
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With an old-school budgeting technique, the person would divide the
$200.00 from his/her monthly paycheck into separate envelopes labeled with
the different categories of expenses (e.g., groceries, apparel, restaurants).
Specifically, $50.00 would be put into an envelope labeled “groceries,”
$50.00 would be put into an envelope labeled “apparel,” and $50.00 would
be put into an envelope labeled “restaurants.” The remaining money
($50.00) would be budgeted as an emergency backup fund that is kept in the
person’s wallet.
When the person is contemplating the purchase of a $20.00 item of
clothing, this purchase must be paid for with money from the “apparel”
envelope. As such, the person looks in the “apparel” envelope to see how
much money is left, and compares this amount to the purchase price
($20.00) of the item of clothing. The Appellant calls this comparing “the
budget amount for the category with the charge amount.” (Appeal Br. 7.)
If, towards the end of the month, there is $20.00 in the “apparel”
envelope, the person knows that purchasing this $20.00 clothing item is
consistent with the budget rule that $50.00 can be spent each month on
apparel. If there is only $10.00 left in the “apparel” envelope, the person
knows that purchasing this $20.00 clothing item conflicts with the budget
rule for the apparel category. This budget-rule conflict would exist even if
there was still $20.00 left in the “groceries” envelope, $15.00 left in the
“restaurants” envelope, and/or $40.00 left in the person’s wallet.
Suppose, however, that an unexpected $80.00 expense arises one
month which requires all of the person’s $50.00 backup fund, plus another
$30.00. This requires an adjustment in the person’s budget, as there will
only be $120.00 left to spend on groceries, apparel, and restaurants. Food is
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a necessity, and so the person would still put $50.00 in the “groceries”
envelope, leaving $70.00 for the discretionary-spending envelopes. This
$70.00 for discretionary-spending equates to the stored paycheck value
($200.00) minus the adjusted budgeted amounts ($80.00 and $50.00).
Accordingly, even if the purchase of the $20.00 clothing item would
normally be consistent with the person’s monthly allotment of $50.00 for
apparel, the person will not purchase this clothing item if it would cause
discretionary spending to exceed $70.00.
As indicated above, according to the Appellant, the claims on appeal
“are specifically directed to budget rule based budget adjustment
methodology.” (Appeal Br. 18.) This methodology consists of a person’s
budget being based on budget rules with categorized budget amounts (e.g.,
$50.00 for groceries, $50.00 for apparel, $50.00 for restaurants), and
adjusting at least some of these budget amounts when unexpected expenses
occur.
ILLUSTRATIVE CLAIM
14. A computer-based method of managing electronic
transactions, comprising:
[(a)] storing, with a processor, a plurality of consumer
accounts in a data store, each consumer account having a first
consumer account identifier;
[(b)] displaying an interface for display on a consumer
device, the interface having at least one component for a
consumer to a plurality of rules and transmit each respective
rule, wherein the respective rule is a budget rule with a budget
amount;
[(c)] receiving, with the processor, the rule over the
network interface device from the consumer device;
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[(d)] storing, with the processor, a rule in association
with the consumer account, wherein rules for a plurality of
budget amounts are stored, each respective rule for a separate
respective category of expenses;
[(e)] receiving, with the processor, a charge over the
network interface device, the charge including a charge amount,
a second consumer account identifier and a category;
[(f)] identifying, with the processor, a selected one of the
consumer accounts by associating one of the first consumer
account identifiers with the second consumer account identifier;
[(g)] determining, with the processor, a category based
on the charge;
[(h)] retrieving, with the processor, one of the budget
rules of the selected consumer account having the category
matching the category of the charge in response to receiving the
charge;
[(i)] executing, with the processor, an action based on the
budget rule;
[(j)] comparing, with the processor, the budget amount
for the category with the charge amount;
[(k)] determining, with the processor, whether the charge
amount is less than a stored value minus all other budget
amounts for the consumer account;
[(l)] reducing, with the processor, the budget amount for
the category with the charge amount only if the charge amount
is less than the stored value minus all other budget amounts for
the consumer account and the charge amount is less than the
budget amount and the interface displays the budget amount for
the category after the budget amount has been reduced.
REJECTIONS
I. The Examiner rejects claims 1–7, 9–20, and 22–26 under
35 U.S.C. § 101 as reciting a judicial exception without significantly more.
(Final Action 2.)
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II. The Examiner rejects claims 1, 9, 14, and 22 under 35 U.S.C.
§ 103 as unpatentable over Jain4 and Chen.5 (Final Action 4.)
III. The Examiner rejects claims 2–7, 10–13, 15–20, and 23–26
under 35 U.S.C. § 103 as unpatentable over Jain, Chen, and Phillips.6 (Final
Action 7.)
ANALYSIS
Claims 1 and 14 are the independent claims on appeal, with the rest of
the claims on appeal depending therefrom. (See Appeal Br., Claims App.)
Independent claim 14 sets forth a “computer based method” comprising
steps (a)–(l); independent claim 1 sets forth a “computer system” comprising
instructions for performing similar steps. (Id.)
Rejection I – 35 U.S.C. § 101
The Examiner determines that independent claim 14 is “directed to”
an abstract idea and that “the generically recited computer elements do not
add a meaningful limitation to the abstract idea because they would be
routine in any computer implementation.” (Final Action 2.) More
succinctly, the Examiner concludes that independent claim 14 fails the Alice
test for patent eligibility.7

4 US 2014/0129356 A1, published May 8, 2014.
5 US 2006/0151598 A1, published July 13, 2006.
6 US 2011/0238539 A1, published September 29, 2011.
7 In Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014), the Supreme Court
provided a two-step test to guard against an attempt to patent purely an
abstract idea. (Id. at 217–18.) In the first step of the Alice test, a
determination is made as to whether the claim at issue is “directed to” an
abstract idea. (Id. at 218.) In the second step of the Alice test, a
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The 2019 Revised Patent Subject Matter Eligibility Guidance (“2019
Guidance”) provides us with specific steps for discerning whether a claim
passes the Alice test for patent eligibility. (See Federal Register Vol. 84,
No. 4, 50–57.) These steps are “[i]n accordance with judicial precedent” and
consist of a two-pronged Step 2A and a Step 2B. (Id. at 52.)
In the first prong of Step 2A (Prong One), we evaluate whether the
claim recites a judicial exception, such as an abstract idea. (2019 Guidance
at 54.) The 2019 Guidance “extracts and synthesizes key concepts identified
by the courts as abstract ideas,” these concepts include “[c]ertain methods of
organizing human activities,” particularly “fundamental economic principles
or practices,” and “managing personal behavior.” (Id. at 52.)
Steps (a)–(d) recite limitations that equate to a person budgeting
his/her paycheck of $200 by putting $50.00 into envelopes labeled
“groceries,” “apparel,” and “restaurants,” which would leave $50.00 for an
unexpected expense. Steps (e)–(j) recite limitations that equate to a person
contemplating a purchase of a clothing item costing $20.00, and looking to
see whether there is $20.00 left in the “apparel” envelope. Step (k) recites
limitations that equate to a person adjusting the amount of money put into
discretionary-spending envelopes if an unexpected expense exceeds $50.00.
And step (l) recites limitations that equate to $20.00 being taken from the
“apparel” envelope to pay for the $20.00 clothing item.
Thus, steps (a)–(l) recite a method for “managing personal behavior”
(i.e., managing a person’s spending behavior via a budget), which is a

determination is made as to whether additional elements transform the
claim into something “significantly more” than the abstract idea. (Id. at
218–19.)
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“[c]ertain method[] of organizing human activities,” and therefore an
abstract idea. (2019 Guidance at 52.)8
Consequently, independent claim 14 recites an abstract idea under the
first prong of Step 2A (Prong One), and we proceed to the second prong of
Step 2A (Prong Two) of the 2019 Guidance.
In Prong Two, we evaluate whether the claim contains additional
elements that “integrate” the abstract idea “into a practical application.”
(2019 Guidance at 54.) “Additional elements” are “claim features,
limitations, and/or steps that are recited in the claim beyond the identified
judicial exception.” (Id. at 55, n.24.) As such, an “additional element” in
independent claim 14 can only be an element that is not part of the person’s
management of his/her spending behavior via a budget strategy.
Independent claim 14 requires steps (a) and (c)–(l) to be performed
“with a processor.” (Appeal Br., Claims App.) Step (b) requires “an
interface for display on a consumer device.” (Id.) And steps (c) and (e)
further require the processor to receive information “over [a] network
interface device.” (Id.) A person’s management of his/her spending
behavior via a budget strategy does not necessarily require a processor, a
consumer device, a display interface, and/or a network interface device.
These computer components qualify, therefore, as additional elements that
could potentially integrate the Appellant’s budget methodology into a
practical application. Here, however, these computer components, and their

8 See also Intellectual Ventures I LLC v. Capital One Bank (USA) 792 F.3d
1363, 1367 (Fed. Cir. 2015) (A claim directed to “tracking financial
transactions to determine whether they exceed a pre-set spending limit (i.e.,
budgeting)” is a claim “directed to an abstract idea”).
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interaction, are used merely as “a tool” to implement the claimed budget
methodology. (2019 Guidance at 55.)9
Consequently, the additional elements in independent claim 14 do not
integrate the abstract idea into a practical application under Prong Two of
Step 2A of the 2019 Guidance. Thus, we proceed to Step 2B of the 2019
Guidance.
In Step 2B, we evaluate whether “additional elements recited in the
claim[] provide[s] ‘significantly more’ than the recited judicial exception.”
(2019 Guidance at 56.) More particularly, we evaluate whether these
additional elements “add[] a specific limitation or combination of limitations
that are not well-understood, routine, conventional activity,” or whether they
instead “simply append[] well-understood, routine, conventional activities
previously known to the industry, specified at a high level of generality, to
the judicial exception.” (Id.)
The Specification describes a conventional processor 930, a
conventional network interface device 948, a conventional consumer
device 24, and a conventional touch screen 1120. (See Spec. ¶¶ 123–125,
127–136, Figs. 29, 30.) The Specification also describes the processor’s
receipt of information, via the network interface device 948, as conventional.
(See id. ¶ 124, Fig. 29.) Thus, independent claim 14’s additional elements
are conventional computer components performing conventional computer
functions.

9 See e.g., Intellectual Ventures 792 F.3d at 1367 (“[W]hile the claims recite
budgeting using a ‘communication medium’ (broadly including the Internet
and telephone networks), that limitation does not render the claims any less
abstract”).
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Consequently, the additional elements in independent claim 14 do not
provide significantly more than the recited abstract idea under Step 2B of the
2019 Guidance.
We agree, therefore, with the Examiner’s conclusion that independent
claim 14 fails the Alice test for patent eligibility.
The Appellant’s arguments are premised upon independent claim 14
being “directed to a specific improvement to the way computers operate,
embodied in budget rule based budget adjustment methodology.”
(Appeal Br. 16.) According to the Appellant, this “software” makes “non-
abstract improvements to computer technology,” as was the case in Enfish,
LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016), and McRO, Inc. v.
Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016). (Id. at 15.)
We agree with the Appellant that independent claim 14 is directed to a
methodology in which a person’s budget is based on budget rules with
categorized budget amounts, which can be adjusted when unexpected
expenses occur. And we agree with the Appellant that “claims directed to
software” are not “inherently abstract.” (Enfish 822 F.3d. at 1135.) The
problem is that, as discussed above, the Appellant’s budget rules equate to a
person budgeting his/her $200 paycheck by putting $50.00 into envelopes
labeled “groceries,” “apparel,” and “restaurants,” and then adjusting these
amounts when an unexpected expense exceeds $50.00. (See Spec. ¶¶ 56, 64,
117–121, Fig. 28.)
In contrast, in Enfish, the claimed self-referential table eliminated the
need for “a programmer to preconfigure a structure to which a user must
adapt data entry,” and allowed “increased flexibility, faster search times, and
smaller memory requirements.” (Enfish 822 F.3d. at 1137.) And, while
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deployment of a traditional relational database involved “extensive modeling
and configuration of the various tables and relationships in advance of
launching the database,” Enfish’s self-referential database could be launched
“with no or only minimal column definitions” and configured and adapted
“on-the-fly.” (Id. at 1333.) This allowed “increased flexibility, faster search
times, and smaller memory requirements.” (Id. at 1337.)
The Appellant argues that its budget methodology “functions
differently than conventional database structures” (Appeal Br. 18), but
neither the Appellant nor the Specification explain why. Thus, we do not
believe that the Appellant’s budget methodology belongs on the same end of
the innovative-software spectrum as Enfish’s self-referential database, which
was drastically different from “a situation where general-purpose computer
components are added post-hoc to a fundamental economic practice or
mathematical equation.” (Enfish, 822 F.3d at 1339.)
In McRO, the Federal Circuit did hold that a claim in which “rules”
were “embodied in computer software” was not directed to an abstract idea.
(McRO 837 F.3d at 1314.) However, the Federal Circuit very closely
scrutinized the sophistication of the rules claimed in McRO. (See id. at
1311.) For example, the Federal Circuit specifically distinguished “rules
that only evaluate individual phonemes” from the claimed rules that required
the evaluation of “sub-sequences,” the generation of “transition parameters,”
and the application of “transition parameters to create a final morph weight
set.” (Id. at 1311, 1314.)
Here, the Appellant simply argues that the claimed budget rules have
“benefits” over conventional systems. (Appeal Br. 18.) Thus, insofar as the
Appellant is asserting that the claimed budget rules rise to the same level of
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sophistication as the McRO morph-weight rules, we disagree. At most, the
Appellant’s budget rules provide an improved budget methodology, which
reflects an improvement to the abstract idea, not computer technology.
The Appellant calls our attention to the importance of considering
additional claim elements “in combination” during the Alice test, as
epitomized in Bascom Global Internet Servs., Inc. v. AT&T Mobility LLC,
827 F.3d 1341 (Fed. Cir. 2016). (See e.g., Appeal Br. 29–30.) Indeed, in
Bascom, the Federal Circuit elucidated that it is sometimes possible for “an
inventive concept” to reside in “the non-conventional and non-generic
arrangement of known, conventional pieces,” such as “a set of generic
computer components.” (Bascom, 827 F.3d at 1350.) Here, however, the
computer components recited in independent claim 14 are arranged to
interact in a conventional manner, as was explained above.
Thus, we sustain the Examiner’s rejection of independent claim 14
under 35 U.S.C. § 101.
The Appellant argues claims 1–7, 9–20, and 22–26 as a group for this
rejection (see Appeal Br. 10–20), and so they fall together. (See 37 CFR
§ 41.37(c) (1)(iv).) Thus, we also sustain the Examiner’s rejection of
claims 1–7, 9–13, 15–20, and 22–26 under 35 U.S.C. § 101.
Rejections II and III – 35 U.S.C. § 103
The Examiner determines that independent claim 1 and independent
claim 14 would have been obvious over the combined teachings of Jain and
Chen. (See Final Action 4–7.)
Independent claim 1 recites a “rule application engine” which
“determines whether [a] charge amount is less than a stored value minus all
other budget amounts for [a] consumer account.” (Appeal Br., Claims App.)
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Independent claim 14 recites the step of “determining, with the processor,
whether [a] charge amount is less than a stored value minus all other budget
amounts for [a] consumer account.” (Id.)
The Examiner finds that Chen discloses such a determination. (See
Final Action 6.) The Examiner cites to certain paragraphs and drawings in
Chen (i.e., Chen ¶¶ 59, 61–63, Figures 7 and 8) to support this finding. (See
id.) According to the Examiner, the cited paragraphs and drawings disclose
“an overall spending limit,” “category limits that are based on the overall
spending limit,” and a determination of whether “[a] transaction amount is
within the limit set for the specific category,” and approval of a transaction
“if the transaction amount (charge amount) is within the category limit
(stored value minus other budget amounts).” (Answer 17.)
The Appellant argues that the Examiner does not sufficiently support
a finding that Chen discloses the determination required by independent
claims 1 and 14 (i.e., a determination of “whether the charge amount is less
than a stored value minus all other budget amounts for the consumer
account”). (Appeal Br. 26.)
We are persuaded by this argument. Chen teaches a budget
methodology in which a person’s budget can be based on budget rules with
categorized budget amounts (see Chen ¶ 59, Fig. 7); Chen teaches declining
a transaction when the transaction amount exceeds the budgeted amount (see
id. ¶ 63, Fig. 8); and Chen teaches declining a transaction when the
transaction amount exceeds the person’s overall account balance (see id.
¶ 61, Fig. 8). However, the Examiner does not explain adequately why
Chen teaches declining a transaction when the transaction amount exceeds
the person’s overall balance minus other budgeted amounts.
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Thus, we do not sustain the Examiner’s rejection of independent
claims 1 and 14 under 35 U.S.C. § 103.
The Examiner’s further findings with respect to the dependent claims
do not cure the above-discussed shortcomings of the Examiner’s rejection of
the independent claims. (See Final Action 6–11.) Thus, we also do not
sustain the Examiner’s rejections of dependent claims 2–7, 9–13, 15–20, and
22–26 under 35 U.S.C. § 103.
DECISION
We AFFIRM the Examiner’s rejection of claims 1–7, 9–20, and 22–26
under 35 U.S.C. § 101.
We REVERSE the Examiner’s rejections of claims 1–7, 9–20,
and 22–26 under 35 U.S.C. § 103.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv).

AFFIRMED