COHEN GANOR, Shlomo et al.Download PDFPatent Trials and Appeals BoardApr 24, 202013605142 - (D) (P.T.A.B. Apr. 24, 2020) Copy Citation 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. 13/605,142 09/06/2012 Shlomo COHEN GANOR P-76074-US 8226 49443 7590 04/24/2020 Pearl Cohen Zedek Latzer Baratz LLP 1500 Broadway 12th Floor New York, NY 10036 EXAMINER POLLOCK, GREGORY A ART UNIT PAPER NUMBER 3695 NOTIFICATION DATE DELIVERY MODE 04/24/2020 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): Arch-USPTO@PearlCohen.com USPTO@PearlCohen.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte SHLOMO COHEN GANOR and OR PELES Appeal 2018-008411 Application 13/605,142 Technology Center 3600 Before PHILIP J. HOFFMANN, CYNTHIA L. MURPHY, and TARA L. HUTCHINGS, Administrative Patent Judges. HOFFMANN, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the Examiner’s decision to reject claims 1–3, 5, 6, 10–15, and 21–27. We have jurisdiction under 35 U.S.C. § 6(b). Appellant and the Board conducted an oral hearing on April 6, 2020. We AFFIRM. 1 We use the word “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42. Appellant identifies “NICE Ltd.” as the real party in interest. Appeal Br. 1. Appeal 2018-008411 Application 13/605,142 2 According to Appellant, the “invention relates to the field of fraud risk estimation.” Spec. ¶ 1. Below, we reproduce independent claim 1 as illustrative of the appealed claims: 1. A computer-implemented method for estimating fraud risk of on-line transactions in real-time, the method comprising: executing a crawler process by a processor, the processor accessing a social media server via the Internet, the crawler process executed with a plurality of targets, and receiving from the crawler process social media information for the plurality of targets; assigning an entity identification to each target of the plurality of targets, and storing the social media information and the entity identification of each target of the plurality of targets in a social media data repository, wherein the social media information of each target includes at least a target location of the target and social media relationship information; receiving, by a fraud risk estimator executed by the processor, from a transaction management system located in a different location from the fraud risk estimator, an on-line transaction for scoring; extracting from the on-line transaction, by the fraud risk estimator, transaction information including at least an entity identification and a transaction location of a first party of the on-line transaction; selecting, by the fraud risk estimator, one target of the plurality of targets based on the entity identification corresponding to social media information stored in the social media data repository; identifying, by the fraud risk estimator, a first correlation between the social media information of the one selected target and the transaction information of the first party using a first key indicator function, wherein the first key indicator function is based on the proximity of the transaction location of the first party and a target location of the one selected target; identifying, by the fraud risk estimator, a second correlation between the first party and a second party that is a Appeal 2018-008411 Application 13/605,142 3 party to the on-line transaction using a second key indicator function, wherein the second key indicator function is based on a relationship between the first party and second party on social media; calculating by the fraud risk estimator a risk score of the on-line transaction, based on the first correlation and the second correlation; identifying, by the fraud risk estimator, one or more fraudulent events based on the risk score; and controlling, by the transaction management system, the on-line transaction. REJECTIONS The Examiner rejects the claims as follows: I. Claims 1–3, 5, 6, 10–15, and 21–27 under 35 U.S.C. § 101 as reciting only patent-ineligible subject matter; and II. Claims 1 and 11 under 35 U.S.C. § 112, first paragraph, as failing to comply with the written description requirement. PRINCIPLES OF LAW CONCERNING 35 U.S.C. § 101 An invention is patent eligible if it claims a “new and useful process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101. The Supreme Court has long interpreted 35 U.S.C. § 101 to include implicit exceptions, however: “[l]aws of nature, natural phenomena, and abstract ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014) (citation omitted). In determining whether a claim falls within an excluded category, the Supreme Court’s two-step framework, described in Mayo and Alice, guides us. See id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework, we first determine what concept the claim is “directed to.” Id. at 219 (“On Appeal 2018-008411 Application 13/605,142 4 their face, the claims before us are drawn to the concept of intermediated settlement, i.e., the use of a third party to mitigate settlement risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4 in petitioners’ application explain the basic concept of hedging, or protecting against risk.”). Concepts that the courts determined to be abstract ideas—and, thus, patent ineligible—include certain methods of organizing human activity, such as fundamental economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611); mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and mental processes (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). Concepts that the courts determined to be patent eligible include physical and chemical processes, such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191 (1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S. 252, 267–68 (1853))); and manufacturing flour (Benson, 409 U.S. at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))). In Diehr, although the claim at issue recited a mathematical formula, the Supreme Court held that “a claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula.” Diehr, 450 U.S. at 187; see also id. at 191 (“We view respondents’ claims as nothing more than a process for molding rubber products and not as an attempt to patent a mathematical formula.”). Nonetheless, the Supreme Court also indicated that a claim “seeking patent protection for that formula in the abstract . . . is not accorded the protection of our patent laws, and this principle cannot be circumvented by attempting Appeal 2018-008411 Application 13/605,142 5 to limit the use of the formula to a particular technological environment.” Id. (citing Benson and Flook); see, e.g., id. at 187 (“It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.”). If the claim is “directed to” an abstract idea, we turn to the second step of the Alice and Mayo framework, where “we must examine the elements of the claim to determine whether it contains an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application.” Alice, 573 U.S. at 221 (citation omitted). “A claim that recites an abstract idea must include ‘additional features’ to ensure ‘that the [claim] is more than a drafting effort designed to monopolize the [abstract idea].’” Id. (quoting Mayo, 566 U.S. at 77). “[M]erely requir[ing] generic computer implementation[] fail[s] to transform that abstract idea into a patent-eligible invention.” Id. 2019 Revised Patent Subject Matter Eligibility Guidance In 2019, the U.S. Patent and Trademark Office published revised guidance on the application of § 101. See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”). Under that Guidance, we first look to whether the claim recites: (1) any judicial exceptions, including certain groupings of abstract ideas (i.e., mathematical concepts, certain methods of organizing human activity such as i) a fundamental economic practice, or ii) managing personal behavior or relationships or interactions between people, or mental processes); and (2) additional elements that integrate the judicial exception into a practical application (see MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) § 2106.05(a)–(c), (e)–(h) (9th Ed., Rev. 08.2017, Jan. 2018)). Appeal 2018-008411 Application 13/605,142 6 A practical application “appl[ies], rel[ies] on, or use[s] the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.” Guidance at 54. Only if a claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application, do we then look to whether the claim either: (3) adds a specific limitation beyond the judicial exception which is not “well-understood, routine, [or] conventional” in the field (see MPEP § 2106.05(d)); or (4) simply appends well-understood, routine, and conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception. See generally Guidance. ANALYSIS Rejection I—Rejection under § 101 Initially, we note that Appellant argues against the Examiner’s § 101 rejection of the claims as a group. See, e.g., Appeal Br. 6–17. We choose independent claim 1 for our analysis, and the remaining claims stand or fall with claim 1. See 37 C.F.R. § 41.37 (c)(1)(iv). For the following reasons, based on our review of the record, we sustain the Examiner’s rejection of the claims as patent-ineligible. We determine that in accordance with point (1) of the Guidance referenced above, independent claim 1 recites at least one judicial exception, including an abstract idea. More specifically, as described in further detail, the abstract idea includes certain methods of organizing human activity, such as a fundamental economic practice. Appeal 2018-008411 Application 13/605,142 7 With reference to claim 1, the claim recites a method for estimating fraud risk, which comprises: A. gathering social-media-related information for a plurality of targets (i.e., “executing a crawler process by a processor, the processor accessing a social media server via the Internet, the crawler process executed with a plurality of targets, and receiving from the crawler process social media information for the plurality of targets” (Appeal Br., Claims App. (Claim 1))); B. storing the social-media-related information, which includes i) location and ii) social-media relationships, for each of the targets (i.e., “assigning an entity identification to each target of the plurality of targets, and storing the social media information and the entity identification of each target of the plurality of targets in a social media data repository, wherein the social media information of each target includes at least a target location of the target and social media relationship information” (id.)); C. receiving information about an online-transaction (i.e., “receiving, by a fraud risk estimator executed by the processor, from a transaction management system located in a different location from the fraud risk estimator, an on-line transaction for scoring” (id.)); D. extracting, from the online-transaction information, location information as to where the transaction occurred (i.e., “extracting from the on-line transaction, by the fraud risk estimator, transaction information including at least an entity identification and a transaction location of a first party of the on-line transaction” (id.)); Appeal 2018-008411 Application 13/605,142 8 E. selecting, from the plurality of targets, the target that participated in the online transaction (i.e., “selecting, by the fraud risk estimator, one target of the plurality of targets based on the entity identification corresponding to social media information stored in the social media data repository” (id.)); F. identifying a first correlation based on a comparison of the transaction location and the selected target’s location (i.e., “identifying, by the fraud risk estimator, a first correlation between the social media information of the one selected target and the transaction information of the first party using a first key indicator function, wherein the first key indicator function is based on the proximity of the transaction location of the first party and a target location of the one selected target” (id.)); G. identifying a second correlation based on a comparison of the selected target’s social-media relationships and the identity of the merchant (i.e., “identifying, by the fraud risk estimator, a second correlation between the first party and a second party that is a party to the on-line transaction using a second key indicator function, wherein the second key indicator function is based on a relationship between the first party and second party on social media” (id.)); H. calculating a risk score based on both correlations (i.e., “calculating by the fraud risk estimator a risk score of the on-line transaction, based on the first correlation and the second correlation” (id.)); Appeal 2018-008411 Application 13/605,142 9 I. identifying a fraudulent event based on the risk score (i.e., “identifying, by the fraud risk estimator, one or more fraudulent events based on the risk score” (id.)); and J. accordingly controlling the transaction (i.e., “controlling, by the transaction management system, the on-line transaction” (id.)). Thus, as set forth above, claim 1 is directed to managing (i.e., estimating) financial risk. It is well settled that managing financial risk is a fundamental economic practice, and, therefore, managing financial risk is an abstract idea. See MPEP § 2106.04(a)(2)(I)(B); Alice, 573 U.S. at 219–20 (“intermediated settlement” is a fundamental economic practice, and, thus, an abstract idea); Bilski, 561 U.S. at 611 (“hedging” is a fundamental economic practice, which is an abstract idea). In accordance with point (2) of the Guidance referenced above, claim 1 does not recite any additional element that integrates the judicial exception into a practical application—i.e., something that “appl[ies], rel[ies] on, or use[s] the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.” Guidance at 54. Aside from the abstract idea described above, the claim only generically recites the use of certain arguably-physical hardware—i.e., “a processor,” “a social media server,” “the Internet,” “a social media data repository,” the processor’s “fraud risk estimator,” “a transaction management system”—and, thus, this hardware does not meaningfully limit the claim. As for the claimed combination of the hardware, it also does not integrate the abstract idea into a practical application. For example, claim 1 Appeal 2018-008411 Application 13/605,142 10 recites that the processor “access[es]” the social media server, and that this accessing occurs “via” the Internet. The claim further recites that the fraud risk estimator is “executed by” the processor. As for the social media data repository, claim 1 recites that the fraud risk estimator “select[s]” social media information “stored” in the repository. Regarding the transaction management system, claim 1 recites that the fraud risk estimator “receiv[es]” transaction data from the system. Restated, claim 1 does not claim any of these elements, or the ordered combination thereof, in any specific or detailed way. To the extent that these elements are described in Appellant’s Specification, the Specification does not describe the elements in such a way, or combined in such a manner, as to indicate that they are anything other than generic. See, e.g., Spec. ¶¶ 25, 36, 37, 39, Fig. 1. Thus, claim 1 does not integrate the abstract idea into a practical application, and does not affect an improvement in any technology or technical field. Therefore, for the above reasons, independent claim 1 is directed to an abstract idea, and does not integrate any judicial exception into a practical application. In accordance with points (3) and (4) of the Guidance referenced above, claim 1 fails to recite a specific limitation beyond the judicial exception which is not well understood, routine, and conventional in the field, but instead simply appends well-understood, routine, and conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception. Taking the claim elements separately, the claimed hardware, as well as the functions performed by the claimed hardware, are purely conventional. Specifically, claim 1 uses known, Appeal 2018-008411 Application 13/605,142 11 conventional components to perform their known, basic functions. See, e.g., Spec. ¶¶ 36, 37, 39. Although, arguably, the actual information differs, the claim recites the hardware only at a high level of generality. In other words, here the claim recites only well-understood, routine, and conventional functions. See In re Katz, 639 F.3d 1303, 1316 (Fed. Cir. 2011) (“Absent a possible narrower construction of the terms ‘processing,’ ‘receiving,’ and ‘storing,’ . . . those functions can be achieved by any general purpose computer without special programming.”). Further, when considered as an ordered combination, claim 1’s limitations do not add anything that is not already present when we consider the steps separately. See, e.g., Spec. ¶ 25, Fig. 1. The hardware and its technological configuration remain the same before, during, and after estimating the risk of an on-line transaction. Thus, the claim amounts to nothing significantly more than instructions to apply the abstract idea with conventional hardware, and does not require an improved version or arrangement of the recited hardware. Accordingly, the claim recitations are insufficient to transform the abstract idea into a patent-eligible invention. See Alice, 573 U.S. at 225–26. We have considered all of Appellant’s arguments in the Briefs, but Appellant does not persuade us that the claims recite patent-eligible subject matter. See Appeal Br. 6–17; see Reply Br. 3–7; see Suppl. Appeal Br. 2–4 (pages unnumbered). We now address certain arguments below. Appellant’s arguments as to why the claims are not directed to the abstract idea of mathematical concepts or mental processes are not persuasive. See, e.g., Suppl. Appeal Br. 2–3. As discussed above, we Appeal 2018-008411 Application 13/605,142 12 determine that claim 1 is directed to the abstract idea of a fundamental economic practice. Appellant argues that “[t]he claims on appeal could not as a practical matter be performed in the human mind.” Id. at 3; see also id. at 3–4. Even assuming this is correct, this is immaterial when the abstract idea to which a claim is directed is a fundamental economic practice, as is Appellant’s claim 1. Appellant’s arguments with reference to BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016), are not persuasive of error. See Appeal Br. 16–17. In BASCOM, the Federal Circuit did indicate 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. However, as explained above, the computer components recited in Appellant’s claim 1 are arranged in a conventional and generic manner. Appellant’s arguments with respect to Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) also are unpersuasive. Appeal Br. 7–10. Unlike Appellant’s claims, the claims in Enfish recited a “specific improvement to the way computers operate”—i.e., an improved database configuration that permitted faster and more efficient searching. Id. at 1330–33, 1336. The Federal Circuit later explained that the claims in Enfish “did more than allow computers to perform familiar tasks with greater speed and efficiency” but “actually permitted users to launch and construct databases in a new way.” Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1305 (Fed. Cir. 2018). The Federal Circuit also explained that Appeal 2018-008411 Application 13/605,142 13 the claims in Enfish “focused on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity.” Secured Mail Sols. LLC v. Universal Wilde, Inc., 873 F.3d 905, 910 (Fed. Cir. 2017). In contrast, Appellant’s claims may improve the economic tasks involved with estimating or computing financial risk, but Appellant’s claims do not recite an improvement in the way the non-abstract hardware performs such tasks. We are not persuaded by Appellant’s arguments with respect to McRO, Inc. dba Planet Blue v. Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016). Appeal Br. 7–8, 11–12, 14–16; Reply Br. 3–5. In McRO the claims were directed to a specific asserted improvement in computer animation—i.e., the automatic use of rules of a particular type. Id. at 1313. The Federal Circuit clarified that the “automation” recited in the claims at issue went beyond merely “carrying out a fundamental economic practice.” Id. at 1315. Thus, unlike McRO, the automation recited in Appellant’s claim 1 is for carrying out a fundamental economic process, specifically estimating risk for an online transaction. Rejection II—Rejection under § 112 As set forth above, the Examiner rejects independent claims 1 and 11 as failing to comply with the written-description requirement. Independent claim 1 recites, in relevant part, identifying, by the fraud risk estimator, a first correlation between the social media information of the one selected target and the transaction information of the first party using a first key indicator function, wherein the first key indicator function is based on the proximity of the transaction location of the first party and a target location of the one selected target; Appeal 2018-008411 Application 13/605,142 14 identifying, by the fraud risk estimator, a second correlation between the first party and a second party that is a party to the on-line transaction using a second key indicator function, wherein the second key indicator function is based on a relationship between the first party and second party on social media; [and] calculating by the fraud risk estimator a risk score of the on-line transaction, based on the first correlation and the second correlation; Appeal Br., Claims App. Independent claim 11 includes similar recitations. See id. Although the Examiner does not disagree with Appellant that the Specification provides support for each of the two identifying steps separately (see id. at 4–5 (citing Spec. ¶¶ 77, 78, 110, 115, Figs. 4–8); see Answer 3–4; see also Final Action 4), according to the Examiner the Specification does not provide written-description support for the claimed step of calculating a risk score based on both the identified first and second correlations (see Answer 3–4). Based on our review of the record, we do not sustain the rejection. Specifically, we agree with Appellant that the Specification provides written-description support for calculating a risk score based on both correlations. Appeal Br. 4–6; Reply Br. 1–2. In particular, we agree with Appellant that at least paragraph 77 of the Specification provides support for calculating a risk score based on the first and second correlations, as claimed. CONCLUSION We AFFIRM the Examiner’s rejection under § 101. We REVERSE the Examiner’s rejection under § 112. Appeal 2018-008411 Application 13/605,142 15 In summary: No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R. § 41.50(f). AFFIRMED Claims Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 1–3, 5, 6, 10– 15, 21–27 101 Eligibility 1–3, 5, 6, 10– 15, 21–27 1, 11 112 Written description 1, 11 Overall Outcome 1–3, 5, 6, 10– 15, 21–27 Copy with citationCopy as parenthetical citation