Ex Parte Makhotin et al

Patent Trial and Appeal Board

Jun 21, 2018

12962224 (P.T.A.B. Jun. 21, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
12/962,224 12/07/2010 Oleg Makhotin
66945 7590 06/25/2018
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.
079900-0784564 1532
EXAMINER
OYEBISI, OJO 0
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
06/25/2018 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 OLEG MAKHOTIN, TOM PURVES,
and CHRIS GARDNER
Appeal2017-003399
Application 12/962,224 1
Technology Center 3600
Before MICHAEL J. STRAUSS, AARON W. MOORE, and
MICHAEL J. ENGLE, Administrative Patent Judges.
ENGLE, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from a final rejection of
claims 1, 2, 8-10, 21, 22, 25, and 27-37, which are all of the claims pending
in the application. We have jurisdiction under 35 U.S.C. § 6(b).
We REVERSE and enter a NEW GROUND OF REJECTION
UNDER 37 C.F.R. § 41.50(b).
Technology
The application relates to "a transaction between a cardholder [e.g., of
a credit card] and a merchant" that uses a "proxy dynamic value (token)"
1 According to Appellants, the real party in interest is Visa International
Service Association. App. Br. 3.
Appeal2017-003399
Application 12/962,224
rather than "providing traditional payment detail to the merchant (e.g., card
number, expiration date, billing address etc.)." Spec. i-fi-1 4, 2.
Illustrative Claim
Claim 1 is illustrative and reproduced below:
1. A method for conducting a payment transaction between a
cardholder and a merchant comprising:
in response to initiation of the payment transaction by the
cardholder, receiving, at a computer system, a request to obtain
a proxy dynamic value from a merchant computer associated
with a merchant, the computer system being distinct from an
issuing bank and distinct from an acquiring bank;
in response to receiving the request to obtain the proxy
dynamic value from the merchant computer, presenting, by the
computer system to a cardholder communication device, the
cardholder with a list of portable payment devices the cardholder
has enrolled with the computer system;
receiving, a selection of a portable payment device from
the list of portable payment devices, from the cardholder
communication device;
generating and associating, by the computer system, a
proxy dynamic value which is distinct from and corresponds to a
primary account number (PAN) of the portable payment device;
and
providing, by the computer system, the proxy dynamic
value to the merchant computer;
receiving, by the computer system, the proxy dynamic
value after the merchant computer receives the proxy dynamic
value; and
returning, by the computer system, the primary account
number,
wherein the primary account number is used to complete
the transaction.
2
Appeal2017-003399
Application 12/962,224
Rejection
Claims 1, 2, 8-10, 21, 22, 25, and 27-37 stand rejected under
35 U.S.C. § 101 as directed to ineligible subject matter. Final Act. 2-3.
ISSUE
Did the Examiner err in determining that claim 1 is directed to
ineligible subject matter under § 101?
ANALYSIS
To determine patentable subject matter under 35 U.S.C. § 101, the
Supreme Court has set forth a two part test. "First, we determine whether
the claims at issue are directed to one of those patent-ineligible concepts" of
"laws of nature, natural phenomena, and abstract ideas." Alice Corp. Pty.
Ltd. v. CLS Bank Int'!, 134 S. Ct. 2347, 2355 (2014). A court must be
cognizant, however, that "all inventions at some level embody, use, reflect,
rest upon, or apply laws of nature, natural phenomena, or abstract ideas."
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71
(2012). Thus, "describing the claims at ... a high level of abstraction and
untethered from the language of the claims all but ensures that the
exceptions to§ 101 swallow the rule." Enfzsh, LLC v. Microsoft Corp., 822
F.3d 1327, 1337 (Fed. Cir. 2016). Instead, "the claims are considered in
their entirety to ascertain whether their character as a whole is directed to
excluded subject matter." Internet Patents Corp. v. Active Network, Inc.,
790 F.3d 1343, 1346 (Fed. Cir. 2015).
In the second step, we "consider the elements of each claim both
individually and 'as an ordered combination' to determine whether the
additional elements 'transform the nature of the claim' into a patent-eligible
3
Appeal2017-003399
Application 12/962,224
application." Alice, 134 S. Ct. at 2355 (quoting Mayo, 566 U.S. at 79, 78).
The Supreme Court has "described step two of this analysis as 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." Id. (quotation omitted).
Here, the Examiner determines "the claims are directed towards the
abstract idea of conducting a payment transaction between a cardholder and
a merchant." Final Act. 2; see also Ans. 2. We agree with Appellants,
however, that this high level of abstraction oversimplifies the claims and
fails to consider the actual claim limitations, including the selection and use
of the claimed "proxy dynamic value." Reply Br. 4; App. Br. 8.
With respect to the second step in the Alice I Mayo framework, we
also agree with Appellants that the Examiner has not sufficiently addressed
"the type of information" being utilized, "the different entities to which the
information is sent and received," and the order in which the different steps
are executed. Reply Br. 5; see also App. Br. 11-14. For example, we agree
with Appellants that the Examiner fails to sufficiently explain why the
limitation "generating and associating ... a proxy dynamic value which is
distinct from and corresponds to a primary account number (PAN) of the
portable payment device" is not significantly more than the broad abstract
idea set forth by the Examiner ("conducting a payment transaction between a
cardholder and a merchant"). App. Br. 11-12. Even if we were to narrow
the formulation of the abstract idea, there are insufficient findings of fact in
the record before us to determine whether limitations such as "in response to
initiation of the payment transaction by the cardholder, receiving, at a
computer system, a request to obtain a proxy dynamic value from a
4
Appeal2017-003399
Application 12/962,224
merchant computer ... "would have been well-understood, conventional,
and routine. Berkheimer v. HP Inc., 881F.3d1360, 1369 (Fed. Cir. 2018)
("Whether something is well-understood, routine, and conventional to a
skilled artisan at the time of the patent is a factual determination.").
Accordingly, we reverse the Examiner's rejection of claims 1, 2, 8-
10, 21, 22, 25, and 27-37.
REJECTION UNDER 37 C.F.R. § 41.50(b)
In a new ground of rejection using our authority under 37 C.F.R.
§ 41.50(b), claim 10 is rejected under 35 U.S.C. § 112, fourth paragraph.
Appellants identify claim 10 as a dependent claim. App. Br. 14; see
also Fee Worksheet (Dec. 14, 2015) (counting only two independent claims,
presumably claims 1 and 32). Claim 1 is a method, whereas claim 10
recites, "A computer system configured to perform steps recited in claim 1."
Although claim 10 requires capability to perform steps in claim 1, it does
not require actual performance of the method and therefore fails to specify a
further limitation of the subject matter of claim 1, as required for dependent
claims under§ 112, fourth paragraph. Pfizer, Inc. v. Ranbaxy Labs., Ltd.,
457 F.3d 1284, 1291-92 (Fed. Cir. 2006); see also MPEP § 608.0l(n)(II).
We note Appellants are not precluded from declaring claim 10 to be
an independent claim and paying the appropriate fees. As an independent
claim, claim 10 no longer would be required to specify a further limitation of
the subject matter claimed in method claim 1.
DECISION
For the reasons above, we reverse the Examiner's decision rejecting
claims 1, 2, 8-10, 21, 22, 25, and 27-37.
5
Appeal2017-003399
Application 12/962,224
In a new ground of rejection, we reject claim 10 under 35 U.S.C.
§ 112, fourth paragraph.
TIME TO RESPOND
This decision contains a new ground of rejection pursuant to 37
C.F.R. § 41.50(b). Section 41.50(b) provides that "[a] new ground of
rejection pursuant to this paragraph shall not be considered final for judicial
review." Section 41.50(b) also provides:
When the Board enters such a non-final decision, the appellant,
within two months from the date of the decision, must exercise
one of the following two options with respect to the new ground
of rejection to avoid termination of the appeal as to the rejected
claims:
(1) Reopen prosecution. Submit an appropriate amendment of
the claims so rejected or new Evidence relating to the claims so
rejected, or both, and have the matter reconsidered by the
examiner, in which event the prosecution will be remanded to the
examiner. The new ground of rejection is binding upon the
examiner unless an amendment or new Evidence not previously
of Record is made which, in the opinion of the examiner,
overcomes the new ground of rejection designated in the
decision. Should the examiner reject the claims, appellant may
again appeal to the Board pursuant to this subpart.
(2) Request rehearing. Request that the proceeding be reheard
under§ 41.52 by the Board upon the same Record. The request
for rehearing must address any new ground of rejection and state
with particularity the points believed to have been
misapprehended or overlooked in entering the new ground of
rejection and also state all other grounds upon which rehearing
is sought.
Further guidance on responding to a new ground of rejection can be
found in the Manual of Patent Examining Procedure§ 1214.01.
6
Appeal2017-003399
Application 12/962,224
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(±).
REVERSED;
37 C.F.R. § 41.50(b)
7