Ex Parte Boding

Patent Trial and Appeal Board

Oct 31, 2018

13628628 (P.T.A.B. Oct. 31, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
13/628,628 09/27/2012 B. Scott Boding
66945 7590 11/02/2018
KILPATRICK TOWNSEND & STOCKTONLLP/VISA
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
79900-847212(018900US) 7781
EXAMINER
KAZIMI, HAN! M
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
11/02/2018 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):
ipefiling@kilpatricktownsend.com
KTSDocketing2@kilpatrick.foundationip.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte SCOTT B. BODING 1
Appeal2017-006818
Application 13/628,628
Technology Center 3600
Before CAROLYN D. THOMAS, JEREMY J. CURCURI, and
MICHAEL M. BARRY, Administrative Patent Judges.
THOMAS, Administrative Patent Judge.
DECISION ON APPEAL
Appellant seeks our review under 35 U.S.C. § 134(a) of the
Examiner's Final Rejection of claims 1-21, all the pending claims in the
present application. See Claims Appendix. We have jurisdiction over the
appeal under 35 U.S.C. § 6(b ).
We AFFIRM.
The present invention relates generally to an identity chaining fraud
detection method that allows each current transaction to be linked to other
transactions. See Abstract.
1 Appellant names Visa International Service Association as the real party in
interest (App. Br. 3).
Appeal2017-006818
Application 13/628,628
Claim 1 is illustrative:
1. A method comprising:
receiving, over a network, a first transaction at a
central server computer from a first merchant computer,
wherein the first transaction is associated with a first plurality
of identities, wherein the first transaction is associated with a
plurality of first transaction data and wherein each identity in
the first plurality of identities corresponds to a different first
transaction datum from the plurality of first transaction data;
receiving, over the network, a second transaction
at the central server computer from a second merchant
computer, wherein the second transaction is associated with a
second plurality of identities, wherein the second transaction is
associated with a plurality of second transaction data and
wherein each identity in the second plurality of identities
corresponds to a different second transaction datum from the
plurality of second transaction data;
processing, by a chaining engine executing on the
central server computer, transaction data from a plurality of
merchant computers comprising the second merchant computer,
to identify a plurality of transactions including the second
transaction that are each associated with at least one identity
from the first plurality of identities associated with the first
transaction;
linking, by the chaining engine executing on the
central server computer, the first transaction to each of the
plurality of transactions, including the second transaction, to
generate a chain of linked transactions, wherein the first
transaction is linked to the second transaction through a first
identity that is included in the first plurality of identities and the
second plurality of identities;
comparing, by the chaining engine executing on
the central server computer, each transaction in the chain of
linked transactions to a negative list database of identities
associated with one or more fraudulent activities to determine
whether the first transaction is fraudulent, wherein the negative
list database corresponds to a third merchant computer;
matching, by the chaining engine executing on the
central server computer, a second identity from the second
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plurality of identities associated with the second transaction to
an identity from the negative list database of identities, wherein
the second identity is not included in the first plurality of
identities associated with the first transaction;
based on the matching, sending over the network,
by the central server computer, a first message to the first
merchant computer indicating a first fraud alert for the first
transaction;
based on the matching, sending over the network,
by the central server computer, a second message to the second
merchant computer indicating a second fraud alert for the
second transaction; and
updating, by the central server computer, the
negative list database of the third merchant computer to include
a third identity from the second plurality of identities of the
second transaction, the third identity not previously included in
the negative list database.
Appellant appeals the following rejection:
Claims 1-21 are rejected under 35 U.S.C. § 101 because the claimed
invention is directed to non-statutory subject matter (Final Act. 2-5).
We review the appealed rejections for error based upon the issues
identified by Appellant, and in light of the arguments and evidence produced
thereon. Ex parte Frye, 94 USPQ2d 1072, 107 5 (BP AI 2010) (precedential).
ANALYSIS
Re} ection under § 101
Issue: Did the Examiner err in finding that the claims are directed to
patent-ineligible subject matter?
Alice Corp. Pty. v. CLS Banklnt'l, 134 S. Ct. 2347 (2014), identifies a
two-step framework for determining whether claimed subject matter is
judicially excepted from patent eligibility under § 101. According to Alice
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step one, "[ w ]e must first determine whether the claims at issue are directed
to a patent-ineligible concept," such as an abstract idea. Alice, 134 S. Ct. at
2355. "If the claims are not directed to an abstract idea [or other patent-
ineligible concept], the inquiry ends. If the claims are 'directed to' an
abstract idea, then the inquiry proceeds to the second step of the Alice
framework." McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299,
1312 (Fed. Cir. 2016). In analyzing whether a claim is directed to an
abstract idea, we look to other decisions where similar concepts were
previously found abstract by the courts. See Amdocs (Israel) Ltd. v. Openet
Telecom, Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016).
In this regard, with respect to independent method claims 1 and 1 7,
and similarly, system claim 9, the Examiner determines that the claims are
directed to the abstract idea of "fundamental commercial or business
practices of identifying fraudulent transactions allowing each current
transition to be linked to other transactions through commonly shared
identities to form chains of linked transactions ... similar to Cybersource
Corp." (Final Act. 3). The Examiner further determines that "the claims are
similar to organizing information through mathematical correlations
(Digitech)[,] comparing new and stored information and using rules to
identify options (SmartGene) . .. [,] a method of organizing human
activities" (id.) and "[l ]inking transactions is similar to using categories to
organize, store[,] and transmit information ( Cyberfone)" (id. at 5).
Appellant challenges the Examiner's determinations on the ground
that the alleged abstract idea "is an oversimplification of the claims and
ignores most of the recitations of at least the independent claims ... [and]
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the Office Action fails to identify any similarity to any relevant or applicable
case" (App. Br. 11-12). We disagree with Appellant's contentions.
Firstly, we point out that the Examiner did indeed cite numerous other
decisions where similar concepts were previously found abstract by the
courts, e.g., Cybersource, Digitech, SniartGene, and Cybe1fone (see Final
Act 3----5; see also Ans. 4----14), which will be described infra.
Here, the claimed sequence of steps in claim 1 cover employing a
central server computer for receiving a first and a second transaction,
processing transaction data from a plurality of merchant computers, linking
the first transaction to each of the plurality of transactions, comparing each
transaction in the chain of linked transactions to a negative list database of
identities, matching a second identity with the second transaction, based on
the matching, sending a first and second message, and updating the negative
list database (see claim 1 ). The Examiner addressed each claimed step in the
analysis (see Ans. 5--6) and we agree with the Examiner that the description
of the abstract idea is tethered to the claim language (id. at 6). Thus, we find
unavailing Appellant's contention that the Examiner is ignoring most of the
recitations of at least the independent claims.
Also, we point out that information collection and analysis, including
when limited to particular content, is within the realm of abstract ideas. See,
e.g., Elec. Power Grp. LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir.
2016) (holding that "collecting information, analyzing it, and displaying
certain results of the collection and analysis" are "a familiar class of claims
'directed to' a patent-ineligible concept."); Digitech Image Techs., LLC v.
Elecs.for Imaging, Inc., 758 F.3d 1344, 1350 (Fed. Cir. 2014) ("organizing
information through mathematical correlations"); Content Extraction, 776
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F.3d at 1347 ("1) collecting data, 2) recognizing certain data within the
collected data set, and 3) storing that recognized data in a memory" are
directed to an abstract idea); LendingTree, LLC v. Zillow, Inc., 656 F. App'x
991, 996 (Fed. Cir. 2016) (claims directed to "a loan-application
clearinghouse, or more simply, coordinating loans" are abstract).
Furthermore, in Cyberfone, the Court held that "using categories to
organize, store, and transmit information is well-established," and "the well-
known concept of categorical data storage, i.e., the idea of collecting
information in classified form, then separating and transmitting that
information according to its classification, is an abstract idea that is not
patent-eligible." Cyberfone Sys., LLC v. CNN Interactive Grp., Inc., 558 F.
App'x 988, 992 (Fed. Cir. 2014).
Here, as similarly noted in the above-cited cases, information is
received, processed, organized (i.e., linked), compared, matched,
transmitted, and updated. Therefore, we find that the Examiner's cogent
analysis relying on judicial examples, shows the Examiner provided an
adequate basis for determining that the claims are directed to an abstract
idea.
Appellant also contends that "claim 1 is directed to an improvement to
conventional computers and systems used in the art in a manner similar to
Enfish" (App. Br. 14) because "linking, comparing, matching, and updating
negative list data between merchant computers in a network are not directed
to just any data structure, but to a specific manner of synchronizing specific
data to provide an improved network of computers" (id. at 15).
The Court acknowledged in Mayo, that "all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena,
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or abstract ideas." Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566
U.S. 66, 70-71 (2012). We, therefore, look to whether the claims focus on a
specific means or method that improves the relevant technology or are
instead directed to a result or effect that itself is the abstract idea, and merely
invoke generic processes and machinery. See Enfzsh, LLC v. Microsoft
Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).
In Enfzsh, for example, the court noted that "[ s ]oftware can make non-
abstract improvements to computer technology just as hardware
improvements can [.]" Enfish, 822 F.3d at 1335. The court put the question
as being "whether the focus of the claims is on [a] specific asserted
improvement in computer capabilities ... or, instead, on a process that
qualifies as an 'abstract idea' for which computers are invoked merely as a
tool." Id. at 1335-36. In Enfzsh, the court found that the "plain focus of the
claims" there was on "an improvement to computer functionality itself, not
on economic or other tasks for which a computer is used in its ordinary
capacity." Id. at 1336.
The present case is different from Enfzsh because the focus of the
claims here is not on an improvement in computer capabilities or upon an
innovative way to use computers or other devices, but is focused on an
independently abstract idea that uses generic and routine equipment as tools;
that abstract idea being collecting and linking transaction data so as to
identify fraudulent transactions. We agree with the Examiner that "[ t ]he
improvement is in the process of fraud prevention and risk mitigation" (Ans.
7). That is, here the arguably innovative technique of the appealed claims is
inextricably a part of the abstract idea of linking data itself to decide which
transaction is fraudulent. Appellant does not point to anything in the claim
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that persuasively resembles the inventive self-referential data structure at
issue in Enfzsh. Appellant also does not direct our attention to anything in
the Specification to persuasively indicate that the invention provides an
improvement in the computer's technical functionality. Paragraphs 52-58 of
Appellant's Specification merely list an interface, a processor, engines, and
databases for implementing the invention. However, Appellant fails to
illustrate how these components are improved.
Moreover, nothing in the claims, understood in light of the
Specification, requires anything other than an off-the-shelf, conventional
computer used for collecting and processing/analyzing various
information/ data. Therefore, unlike in Enfzsh, the claims are directed not to
an improvement in computer capabilities, but to the results of applying an
abstract idea.
Appellant further contends that "the claims improve the technical field
according to a specific set of steps that does not preempt any other method
in the field" (App. Br. 18). Although pre-emption "might tend to impede
innovation more than it would tend to promote it, 'thereby thwarting the
primary object of the patent laws"' (Alice, 134 S. Ct. at 2354 (citing Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012))),
"the absence of complete preemption does not demonstrate patent
eligibility" (Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379
(Fed. Cir. 2015)). Moreover, because we find the claimed subject matter
covers patent-ineligible subject matter, the pre-emption concern is
necessarily addressed.
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We now tum to the second step of the Alice framework: "a search for
an 'inventive concept'-i.e., an element or combination of elements that is
'sufficient to ensure that the patent in practice amounts to significantly more
than a patent upon the [ineligible concept] itself."' Alice, 134 S. Ct. at 2355
(alteration in original) (quoting Mayo, 566 U.S. at 72-73).
The Examiner determines that "[t]he additional element(s) or
combination of elements ... amount( s) to no more than: (i) mere
instructions to implement the idea on a computer, and/or (ii) recitation of
generic computer structure that serves to perform generic computer
functions that are well-understood, routine, and conventional activities"
(Final Act. 3).
Appellant contends that "the Office fails to provide any evidence that
the specific method of updating databases recited in the claims is 'generic,'
'routine,' or 'conventional,' as is clear from the lack of a 35 U.S.C. § 102
rejection" (App. Br. 16), because "previous computer systems used to detect
fraud did not link transaction data between merchant computers as they
occurred" (id. at 17).
Firstly, we point out that Appellant's contention is not commensurate
with the scope of claim 1 because claim 1 does not specifically recite linking
transaction data "as they occur" or in "real-time" (App. Br. 21) (see claim
1 ). As written, claim 1 reads on linking the transaction data at any time, i.e.,
in the future. Furthermore, Appellant concedes that "it is common in the art
to verify data and provide notification messages" (App. Br. 23), and that
previously cited prior art "Ganti evaluates data using a set of rules and then
send[ s] an alert message" (id. at 24 ), and "Ellingson can access a database of
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identities and match them to a particular transaction" (id. at 25). These
known techniques all suggest linking data in various ways.
Secondly, a finding of novelty or non-obviousness does not require
that the claimed subject matter is patent-eligible. Although the second step
in the Mayo/Alice framework is termed a search for an "inventive concept,"
the analysis is not an evaluation of novelty or nonobviousness, but, rather, is
a search for "an element or combination of elements that is 'sufficient to
ensure that the patent in practice amounts to significantly more than a patent
upon the [ineligible concept] itself."' Alice Corp., 134 S. Ct. at 2355.
"Groundbreaking, innovative, or even brilliant discovery does not by itself
satisfy the§ 101 inquiry." Ass 'nfor Molecular Pathology v. Myriad
Genetics, Inc., 569 U.S. 576, 591 (2013). A novel and non-obvious claim
directed to a purely abstract idea is, nonetheless, patent-ineligible. See
Mayo, 566 U.S. at 90. See also Diamond v. Diehr, 450 U.S. 175, 188-89
( 1981) ("The 'novelty' of any element or steps in a process, or even of the
process itself, is of no relevance in determining whether the subject matter of
a claim falls within the § 101 categories of possibly patentable subject
matter.").
To the extent Appellant argues that the Examiner must provide factual
evidence that the specific method of updating databases recited in the claims
is well-understood, routine, and conventional (App. Br. 16), "[i]t has been
clear since Alice that a claimed invention's use of the ineligible concept to
which it is directed cannot supply the inventive concept that renders the
invention 'significantly more' than that ineligible concept." BSG Tech LLC
v. Buyseasons, Inc., 899 F.3d 1281, 1290 (Fed. Cir. 2018). Put another way,
Appellant cannot rely on the abstract idea itself as providing significantly
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more than the abstract idea. Here, the Examiner determined that the claims
were directed to the abstract idea of "fundamental commercial or business
practices of identifying fraudulent transactions allowing each current
transaction to be linked to other transactions ... similar to organizing
information through mathematical correlations ... and comparing new and
stored information and using rules to identify options" (Final Act. 3).
Appellant fails to explain how the identified limitations, such as "linking ...
the first transaction to each of the plurality of transactions" and
"updating ... the negative list database," are not part of such abstract ideas
( e.g., organizing information through mathematical correlations).
The Federal Circuit recently dealt with a similar situation in
explaining that "[ w ]e may assume that the techniques claimed are
groundbreaking, innovative, or even brilliant, but that is not enough for
eligibility." SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir.
2018) ( quotation omitted).
The claims here are ineligible because their innovation is an
innovation in ineligible subject matter. Their subject is nothing
but a series of mathematical calculations based on selected
information and the presentation of the results of those
calculations (in the plot of a probability distribution function).
No matter how much of an advance in the finance field the
claims recite, the advance lies entirely in the realm of abstract
ideas, with no plausibly alleged innovation in the non-abstract
application realm. An advance of that nature is ineligible for
patenting.
Id. The same is true here where Appellant has not explained how the
advance is in anything other than the abstract idea.
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Because Appellant's independent claims 1, 9, and 172 are directed to a
patent-ineligible abstract concept under the first prong of Alice and do not
recite something "significantly more" under the second prong of the Alice
analysis, we sustain the Examiner's rejection of these claims as well as
respective dependent claims 2-8, 10-16, and 18-21 under 35 U.S.C. § 101
as being directed to non-statutory subject matter in light of Alice and its'
progeny.
For the foregoing reasons, Appellant's contentions are unpersuasive
as to error in the rejection under 35 U.S.C. § 101.
DECISION
We affirm the Examiner's§ 101 rejection.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv).
AFFIRMED
2 Alice also confirmed that if a patent's systems claims are no different in
substance from its method claims, they will rise and fall together. 134 S. Ct.
at 2360.
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