Ex Parte Cavanaugh et al

Patent Trial and Appeal Board

Jul 30, 2018

12316930 (P.T.A.B. Jul. 30, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/316,930 12/18/2008
123521 7590 08/01/2018
Wells Fargo Bank, N.A.
c/o Nelson Mullins Riley & Scarborough, LLP
One Wells Fargo Center
301 South College Street, 23rd Floor
Charlotte, NC 28202
FIRST NAMED INVENTOR
Ross M. Cavanaugh
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.
43706.09005 9068
EXAMINER
KHATTAR, RAJESH
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
08/01/2018 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):
ip@nelsonmullins.com
PTOL-90A (Rev. 04/07)
UNITED ST ATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ROSS M. CAVANAUGH, MICHAEL T. DUKE,
and DEAN P ATRICKNOLAN
Appeal 2017-005113
Application 12/316,930 1
Technology Center 3600
Before CAROLYN D. THOMAS, HUNG H. BUI, and
JON M. JURGOV AN, Administrative Patent Judges.
BUI, Administrative Patent Judge.
DECISION ON APPEAL
Appellants seek our review under 35 U.S.C. § 134(a) from the
Examiner's Final Rejection of claims 8, 12-18, 25, and 26, which are all the
claims pending in the application. Claims 1-7, 9-11, and 19-24 are
canceled. Final Act. 2. We have jurisdiction under 35 U.S. C. § 6(b ).
WeAFFIRM. 2
1 According to Appellants, the real party in interest is Wells Fargo Bank,
N.A. App Br. 1.
2 Our Decision refers to Appellants' Appeal Brief filed September 26, 2016
("Appeal Br."); Reply Brief filed February 14, 2017 ("Reply Br.");
Examiner's Answer mailed December 15, 2016 ("Ans."); Final Office
Action mailed October 26, 2015 ("Final Act."); and original Specification
filed December 18, 2008 ("Spec.").
Appeal 2017-005113
Application 12/316,930
STATEMENT OF THE CASE
Appellants' invention relates to "a computer payment banking
system" for "processing of an online web-based purchase or refund
associated with [a] sourced bank account or holder of [a] sourced bank
account." Spec. ,r 8; see also Abstract.
Claim 12-the only independent claim on appeal-is illustrative of
the claimed subject matter, as reproduced below:
12. A method of using a computer payment banking system, the
method comprising:
establishing a sourced bank account of an account holder
by a regulated bank or a regulated fmancial institution that holds
physical monetary funds,
providing the account holder of the sourced bank account
with a revolving identification for use in making an online
purchase,
communicating online with the account holder of the
sourced bank account to provide access to rewards, fmancial
reports, budget tools, or spending information of the account
holder of the sourced bank account by the bank or the fmancial
institution to the account holder of the sourced bank account, and
processing payments by the regulated bank or by the
regulated fmancial institution in a computer-based payment
system using the sourced bank account for purchases made that
are associated with the sourced bank account.
App. Br. 10 (Claims App.).
EXAMINER'S REJECTIONS & REFERENCES
(1) Claims 8, 12-18, 25, and 26 stand rejected under
35 U.S.C. § 101 because the claimed invention is directed to non-statutory
subjectmatter. Final Act. 2-3.
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Application 12/316,930
(2) Claims 8 and 12-18 stand rejected under 35 U.S.C. § 103(a) as
being unpatentable over Barbara et al. (US 2002/0016769 Al; published
Feb. 7, 2002)("Barbara"), Cohen et al. (US 2004/0139004Al;published
July 15, 2004) ("Cohen"), and Stoxen et al. (US 2002/0152106 Al;
published Oct. 17, 2002) ("Stoxen"). Final Act. 3-7.
(3) Claims 25 and26 standrejectedunder35 U.S.C. § 103(a)as
being unpatentable over Barbara, Cohen, Stoxen, and Dickelman (US
2009/0150266 Al; published June 11, 2009). Final Act. 7.
DISCUSSION
35 USC§ 101: Claims 8, 12-18, 25, and26
InAlice Corp. v. CLSBankinternational, 134 S.Ct. 2347 (2014), the
Supreme Court reiterates an analytical two-step framework previously set
forth in Mayo Collaborative Servicesv. Prometheus Laboratories, Inc.,
566 U.S. 66, 79 (2012), "for distinguishing patents that claim laws of nature,
natural phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts." Alice, 134 S.Ct. at 2355. Thefrrst step in
the analysis is to "determine whether the claims at issue are directed to one
of those patent-ineligible concepts," such as an abstract idea. Id. If the
claims are directed to eligible subject matter, the inquiry ends. Thales
Visionixinc. v. United States, 850 F.3d 1343, 1349 (Fed. Cir. 2017); Enfish,
LLC v. Microsoft Corp., 822 F.3d 1327, 1339 (Fed. Cir. 2016).
If the claims are directed to a patent-ineligible concept, the second
step in the analysis is to consider the elements of the claims "individually
and 'as an ordered combination'" to determine whether there are additional
elements that "'transform the nature of the claim' into a patent-eligible
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application." Alice, 134 S.Ct. at2355 (citing Mayo, 566U.S. at 79, 78). In
other words, the second step is to "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."' Id. ( citing Mayo, 566 U.S. at 72-73).
In rejecting claims 8, 12-18, 25, and26 under 35 U.S.C. § 101, the
Examiner determines: ( 1) these claims are directed to an abstract idea of
"making a payment from a sourced bank account," which is a fundamental
economic practice long prevent in commerce; and (2) the additional
elements in the claims, whether taken separately or in an ordered
combination, do not amount to significantly more than the abstract idea,
because (i) "the claims make use of a computer system to implement the
abstract idea," ( ii) " [ t ]he computer recited in the claim is a generic computer
with generic structural elements [that] performs routine and conventional
functions," and (iii) the claims do not "improve the functioning of a
computer itself or include improvements to another technology or technical
field." Final Act. 2-3; see also Ans. 2-3.
At the outset, Appellants argue the Examiner has not established a
prima facie case of patent ineligibility under 3 5 U.S. C. § 101 because the
Examiner fails to provide "Appellant[ s] with a sufficient claim construction
or interpretation ... so as to enable the Appellant[ s] to effectively reply" and
"specific fmdings [of patent-ineligibility]" as to why a claim is directed to an
"abstract idea." App. Br. 3--4. This argument is not persuasive because: ( 1)
patent eligibility is a question of law that is reviewable de nova (see
Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012)); and (2)
we are aware of no controlling authority that requires the Office to provide
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factual evidence to support a determination that a claim is directed to an
abstract idea. 3 The Federal Circuit has repeatedly noted that "the prima
facie case is merely a procedural device that enables an appropriate shift of
the burden of production." Hyattv. Dudas, 492 F.3d 1365, 1369 (Fed. Cir.
2007) (citing In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992)). The
court has held that the USP TO carries its procedural burden of establishing a
prima facie case when its rejection satisfies the requirements of 35 U.S. C.
§ 132 by notifying the applicant of the reasons for rejection, "together with
such information and references as may be useful in judging of the propriety
of continuing the prosecution of [the] application." In re Jung, 637 F.3d
1356, 1362 (Fed. Cir. 2011). Thus,all that is required of the Office is that it
set forth the statutory basis of the rejection in a sufficiently articulate and
informative manner as to meet the notice requirement of 35 U.S.C. § 132.
Id., see also Chesterv. Miller, 906 F.2d 1574, 1578 (Fed. Cir. 1990)
(Section 132 "is violated when [t]he rejection is so uninformative that it
prevents the applicant from recognizing and seeking to counter the grounds
for rejection.").
Appellants do not contend that the Examiner's rejection under 35
U.S.C. § 101 cannot be understood or that the Examiner's rejection,
otherwise, fails to satisfy the notice requirements of 35 U.S.C. § 132.
3 Berkheimerv. HP Inc., 881 F.3d 1360, 1366 (Fed. Cir. 2018) holds that
the question of whether certain claim limitations represent well-understood,
routine, conventional activity under Alice step 2 may raise a disputed factual
issue. That question, however, is not at issue in this case. As in Berkheimer,
in determining that the claims are directed to an abstract idea, the Examiner
compared the claims to claims held to be abstract in prior judicial
decisions. Compare Ans. 5 with Berkheimer, 881 F.3dat 1366---67.
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Indeed, Appellants' understanding of the rejection is clearly manifested by
their response as set forth in the briefs.
Alice/Mayo-----Step 1 (Abstract Idea)
Turning to the first step of the Alice inquiry, Appellants argue claims
8, 12, 18, 25, and 26 are not directed to an abstract idea, citing two district
court decisions in: (1) SimpleAir, Inc. v. Google Inc., 2-l 4-cv-0011 (TXED
2015, Order); and(2)Prism Technologiesv. T-Mobile USA, Inc., 8-12-cv-
00124 (NED 2015, Order). App. Br. 4--5. However, Appellants' argument
is not persuasive. Likewise, Appellants' reliance on SimpleAir and Prism
Technologies is misplaced because: (1) district court decisions are not
binding legal authority on the Board; and (2) Appellants fail to explain why
the claims in SimpleAirandPrism Technologies are helpful in determining
whether Appellants' claims directed to "making a payment from a sourced
bank account" - which is a fundamental economic practice - should be
patent-eligible under 35 U.S.C. § 101.
Appellants' Specification is directed to "a computer payment banking
system" for "processing of an online web-based purchase or refund
associated with the sourced bank account or holder of the sourced bank
account" and "processing purchases or refunds made using a credit or debit
instrument associated with the sourced bank account." Spec. ,r,r 8-9; see
also Abstract, and Figures 4--5. Based on Appellants' Specification, we
agree with the Examiner that independent claim 12 and its dependent claims
8, 13-18, and25-26 are directed to an abstract idea of"making a payment
from a sourced bank account." Ans. 3. Such activities are squarely within
the realm of abstract ideas. Making a payment from a sourced bank account
is a fundamental business practice, like: (1) risk hedging in Bilski; (2)
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intermediated settlement in Alice, 134 S.Ct. at 2356-57; (3) verifying credit
card transactions in CyberSource, 654 F.3d at 1370; (4) guaranteeing
transactions in buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1354 (Fed.
Cir. 2014); (5) distributing products over the Internet in Ultramercialv.
Hulu and WildTangent, 2014 U.S. App. Lexis 21633 (Fed. Cir. 2015); (6)
determining a price of a product offered to a purchasing organization in
VersataDev. Grp., Inc. v. SAP Am., Inc. 793 F.3d 1306 (Fed. Cir. 2015); (7)
pricing a product for sale in GIP Techs, Inc. v. Amazon.com, Inc., 788 F.3d
1359 (Fed. Cir. 2015); and (8) collecting and analyzing information to detect
and notify of misuses in Fair Warning IP, LLCv. Iatric Sys., Inc., 839 F.3d
1089, 1093-94 (Fed. Cir. 2016). Making a payment from a sourced bank
account is also a building block of a market economy. Thus, making a
payment from a sourced bank account, like risk hedging, intermediated
settlement, and verifying credit card transactions, is an "abstract idea"
beyond the scope of35 U.S.C. § 101. See Alice, 134 S.Ct. at 2356.
Moreover, all the steps recited in Appellants' claim 12 including, for
example: (1) "establishing a sourced bank account of an account holder;"
(2) "providing ... a revolving identification for use in making an online
purchase;" (3) "communicating online with the account holder of the
sourced bank account to provide access to rewards, fmancial reports, budget
tools, or spending information of the account holder;" and ( 4) "processing
payments ... using the sourced bank account for purchases made" are
abstract processes of collecting, storing, and analyzing information of a
specific content, i.e., catalog content. Information, as such, is intangible,
and data analysis, comparisons, and algorithms are abstract ideas. See, e.g.,
Microsoft Corp. v. AT & T Corp., 550 U.S. 437,451 n.12 (2007);Alice, 134
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S.Ct. at2355; Parkerv. Flook, 437U.S. 584,589, 594--95 (1978);
Gottschalkv. Benson, 409U.S. 63, 71-72 (1972). Information collection
and analysis, including when limited to particular content, is within the
realm of abstract ideas. See, e.g., Internet Patents Corp. v. Active Network,
Inc., 790 F.3d 1343, 1349 (Fed. Cir. 2015); Digitechimage Technologies,
LLC v. Electronics for Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014);
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1370 (Fed. Cir.
2011 ). That is, "[ w ]ithout additional limitations, a process that employs
mathematical algorithms to manipulate existing information to generate
additional information is not patent eligible." Digitech, 758 F.3dat 1349-51
("Data in its ethereal, non-physical form is simply information that does not
fall under any of the categories of eligible subject matter under section
101. ").
In addition, we note all the steps of "making a payment from a
sourced bank account" recited in Appellants' claim 12 can also be performed
manually by an account holder visiting the bank with identification and
making the payment of the purchase made, via pen and paper. See
CyberSource, 654 F.3d at 1372-73 ("[ A] method that can be performed by
human thought alone is merely an abstract idea and is not patent-eligible
under§ 101. "); see also In re Comiskey, 554 F .3d 967, 979 (Fed. Cir. 2009)
("[M]ental processes-or processes of human thinking-standing alone are not
patentable even if they have practical application."); Gottschalk v. Benson,
409 U.S. 63, 67 (1972) ("Phenomena of nature[], mental processes, and
abstract intellectual concepts are not patentable, as they are the basic tools of
scientific and technological work.") ( emphasis added). Additionally, mental
processes remain unpatentable even when automated to reduce the burden
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on the user of what once could have been done with pen and paper.
CyberSource, 654 F. 3d at 13 7 5 ("That purely mental processes can be
unpatentable, even when performed by a computer, was precisely the
holding of the Supreme Court in Gottschalkv. Benson.").
Furthermore, we note Appellants' claim 12 does not improve the
performance of a computer or solve a problem specific to computers or
computer networks. Appellants' Specification and arguments do not
demonstrate the claims "improve the way a computer stores and retrieves
data in memory," as the claims in Enfish did via a "self-referential table for a
computer database." See Enfish, 822 F.3d at 1336.
In fact, none of the steps recited in Appellants' claim 12 provide, and
nowhere in Appellants' Specification is there any description or explanation
as to how these data processing steps are intended to provide: ( 1) a
"solution ... necessarily rooted in computer technology in order to
overcome a problem specifically arising in the realm of computer networks,"
as explained by the Federal Circuit in DDR Holdings, LLCv. Hotels.com,
L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014); (2) "a specific improvement to
the way computers operate," as explained in Enfish, 822 F.3d at 1336; or
(3) an "unconventional technological solution ... to a technological
problem" that "improve[ s] the performance of the system itself," as
explained in Amdocs (Israel) Limited v. Openet Telecom, Inc., 841 F.3d
1288, 1302 (Fed. Cir. 2016).
Accordingly, we agree with the Examiner that claims 8, 12-18, 25,
and 26 are directed to an abstract idea of "making a payment from a sourced
bank account" which is a fundamental economic practice long prevalent in
our system of commerce. As our reviewing court has held, combining
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several abstract ideas does not render the combination any less abstract.
RecogniCorp, LLCv. Nintendo Co., Ltd., 855 F.3d 1322, 1327 (Fed. Cir.
2017) ("Adding one abstract idea ... to another abstract idea ... does not
render the claim non-abstract.");seealsoFairWarningIP, LLCv. Iatric
Systems, Inc., 839 F.3d 1089, 1093-94 (Fed. Cir. 2016) (Patent-ineligible
claims were directed to a combination of abstract ideas.).
Alice/Mayo-----Step 2 (Inventive Concept)
In the second step of the Alice inquiry, Appellants argue "the claims
have an inventive concept" because "the claimed invention is an
improvement to electronic transaction processing systems by making them
more secure payment systems." App. Br. 3-5.
We do not agree. The Federal Circuit cases on points include: ( 1)
DDR; and (2) Amdocs (Israel) Ltd. v. Openet Telecom, Inc. 841 F.3d 1288
(Fed. Cir. 2016), both of which involve business-method inventions and are
instructive here. For example, in DDR andAmdocs, the Federal Circuit
opted to bypass Alice step 1 in favor of step 2. In particular, the Federal
Circuit foundDDR 's claims contain an "inventive concept" under Alice step
2 because DD R 's claims: ( 1) do not merely recite "the performance of some
business practice known from the pre-Internet world" previously disclosed
in Bilski andAlice, but instead; (2) provide a technical solution to a technical
problem unique to the Internet, i.e., a "solution ... necessarily rooted in
computer technology in order to overcome a problem specifically arising in
the realm of computer networks." DDR, 773 F.3dat 1257. Likewise, the
Federal Circuit also found Amdocs ' claims contain a sufficient "inventive
concept" because like DDR, Amdocs' claims "entail[] an unconventional
technological solution ( enhancing data in a distributed fashion) to a
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technological problem (massive record flows which previously required
massive databases)" and "improve the performance of the system itself."
Amdocs, 841 F.3dat 1300, 1302.
Under current Federal Circuit precedent, an "inventive concept" under
Alice step 2 can be established by showing, for example, that the patent
claims: (1) provide a technical solution to a technical problem unique to the
Internet, e.g., a "solution ... necessarily rooted in computer technology in
order to overcome a problem specifically arising in the realm of computer
networks" (see DDR, 773 F.3d at 1257); (2) transform the abstract idea into
"a particular, practical application of that abstract idea," e.g., "installation of
a filtering tool at a specific location, remote from the end-users, with
customizable filtering features specific to each end user" (see Bascom
GloballnternetServs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1352,
1350 (Fed. Cir. 2016)); or (3) "entail[] an unconventional solution ([e.g.,]
enhancing data in a distributed fashion) to a technological problem ([e.g.,]
massive record flows [that] previously required massive databases)" and
"improve the performance of the system itself' ( see Amdocs, 841 F. 3 d at
1300, 1302).
In this case, however, we fmd no element or combination of elements
recited in Appellants' claim 12 that contains any "inventive concept" or adds
anything "significantly more" to transform the abstract concept (i.e.,
"making a payment from a sourced bank account") into a patent-eligible
application. Alice, 134 S.Ct. at 2357. Instead, we agree with the Examiner
that added computer elements, such as a computer payment banking system,
cannot transform the abstract idea into a patent eligible invention. As our
reviewing court has observed, "after Alice, there can remain no doubt:
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recitation of generic computer limitations does not make an otherwise
ineligible claim patent-eligible." DDR, 773 F.3d at 1256 ( citing Alice, 134
S.Ct. at2358)).
Because Appellants' claim 12 is directed to a patent-ineligible abstract
concept and do not recite something "significantly more" under the second
prong of the Alice analysis, we sustain the Examiner's rejection of claims 8,
12-1 and25-26under35 U.S.C. § 101.
35 USC§ 103(a): Claims8 and 12-18
In support of the obviousness rejection, the Examiner fmds Barbara
teaches most aspects of Appellants' claim 12, including:
establish[ing] a sourced bank account of an account
holder by a regulated bank or a regulated fmancial institution
that holds physical monetary funds[, and]
processing payments by the regulated bank or by the
regulated fmancial institution in a computer-based payment
system using the sourced bank account for purchases made that
are associated with the sourced bank account.
Final Act. 3--4 (citing Barbara ,r,r 5, 10-14, 16-21, 50, 52, 53, 56-60, 66-68,
71, 97, and 101).
To support the conclusion of obviousness, the Examiner additionally
relies on ( 1) Cohen for teaching the use of "a revolving identification for use
in making an online purchase" (Final Act. 4 ( citing Cohen ,r,r 1, 55); and (2)
Stoxen for teaching "communicating online with the account holder of the
sourced bank account to provide access to rewards, fmancial reports, budget
tools, or spending information of the account holder of the sourced bank
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account by the bank or the fmancial institution to the account holder of the
sourced bank account." Final Act. 5 ( citing Stoxen ,r,r 3-5, and 12).
Appellants do not specifically dispute the Examiner's factual fmdings
regarding Barbara and Stoxen. Instead, Appellants argue "Cohen and the
other cited references do not teach or suggest a sourced bank account of an
account holder being established by a regulated bank or a regulated fmancial
institution and where a regulated bank or a regulated fmancial institution
serves as a payment processor for the online web-based purchase or refund
made from the merchant using the sourced bank account." App. Br. 5---6.
Appellants also argue "Cohen teaches away from the present invention and
is not properly combinable with the other cited reference because Cohen
teaches a central server operates through a closed network link." App. Br. 6
( citing Cohen ,r 29).
Appellants' arguments are not persuasive. As correctly recognized by
the Examiner, Cohen is not relied upon for processing credit card
transactions. Instead,
Examiner relies on Cohen's teachings of using a revolving
identification for use in making an online web-based purchase.
Examiner relies on Barbara's teachings of processing of
payment with the use of a credit card. So, the combination of
Barbara and Cohen when taken together as a whole will utilize
the revolving identification of Cohen along with the payment
processing capability of Barbara in completing a fmancial
transaction. Thus, the disclosure of Cohen in [0029] is not
applicable to the relied upon paragraphs of Cohen.
Ans. 5.
For these reasons, we are not persuaded of Examiner error.
Accordingly, we sustain the Examiner's obviousness rejection of
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independent claim 12 and its dependent claims 8 and 13-18, which
Appellants do not argue separately. For the same reasons discussed, we also
sustain the Examiner's remaining obviousness rejection of claims 25 and 26
as being obvious over Barbara, Cohen, Stoxen, and Dickelman.
CONCLUSION
On the record before us, we conclude Appellants have not
demonstrated the Examiner erred in rejecting claims 8, 12-18, 25, and 26
under35 U.S.C. §§ 101 and 103.
DECISION
As such, weaffrrm theExaminer'srejectionofclaims 8, 12-18,25,
and 26 under 35 U.S.C. §§ 101 and 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)(l )(iv).
AFFIRMED
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