Ex Parte Phillips et al

Patent Trial and Appeal Board

Jul 31, 2018

13931025 (P.T.A.B. Jul. 31, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/931,025 06/28/2013
125619 7590 08/02/2018
Mastercard International Incorporated
c/o Buckley, Maschoff & Talwalkar LLC
50 Locust A venue
New Canaan, CT 06840
FIRST NAMED INVENTOR
Simon Phillips
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.
P00523-US-CONT
(M01.140C)
3944
EXAMINER
GREGG, MARY M
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
08/02/2018 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):
martin@bmtpatent.com
szpara@bmtpatent.com
colabella@bmtpatent.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte SIMON PHILLIPS, JAMES J. ANDERSON, and
MURDO MUNRO
Appeal2017-002200
Application 13/931,025 1
Technology Center 3600
Before MICHAEL J. STRAUSS, NABEEL U. KHAN, and
MICHAEL M. BARRY, Administrative Patent Judges.
KHAN, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Final Rejection
of claims 1-9 and 13-17. We have jurisdiction under 35 U.S.C. § 6(b).
We affirm.
1 Appellants identify Mastercard International Incorporated as the real party
in interest. App. Br. 2.
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Application 13/931,025
BACKGROUND
THE INVENTION
Appellants describe their invention as follows:
A method includes a cardholder device receiving at least
one cardholder verification rule from a computer, and storing the
cardholder verification rule. The cardholder verification rule
prescribes circumstances under which a cardholder is required to
perform a cardholder verification process in connection with a
purchase transaction. The method includes the cardholder device
receiving purchase transaction information from a merchant
device, and then determining by using the stored cardholder
verification rule, and based on at least one of the received
purchase transaction information and current circumstances, that
cardholder verification is not required. The cardholder device
then uploads payment information to the merchant device to
complete the purchase transaction.
Abstract.
Exemplary independent claim 1 is reproduced below.
1. A method for operating a payment-enabled mobile
telephone comprising:
receiving, by a payment circuit of a mobile telephone from
an issuer server computer during a mobile telephone
personalization process, at least one cardholder verification rule
associated with a predetermined cardholder category that
prescribes circumstances under which a cardholder is required to
perform a cardholder verification process in connection with a
purchase transaction utilizing the mobile telephone;
storing, by the payment circuit, the at least one cardholder
verification rule in a secure element of the mobile telephone;
receiving, by the payment circuit from a merchant device,
purchase transaction information;
determining, by the payment circuit using the at least one
cardholder verification rule stored in the secure element, and
based on at least one of the received purchase transaction
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information and current circumstances, that cardholder
verification is not required;
transmitting, by the payment circuit to the merchant
device, instructions configured to cause the merchant device to
overrule a merchant device cardholder verification rule; and
uploading, by the payment circuit to the merchant device,
the cardholder' s payment information to complete the purchase
transaction without providing cardholder verification.
REFERENCES AND REJECTIONS
1. Claims 1-9 and 13-17 stand rejected under 35 U.S.C. § 101 as
directed to a judicial exception to statutory subject matter. Final Act. 21-24.
2. Claims 1-9 stand rejected under 35 U.S.C. § 103 as
unpatentable over Varghese (US 2006/0282660 Al, published Dec. 14,
2006), Evans (US 2010/0161488 Al, published June 24, 2010) and Koretz
(US 2008/0195506 Al, published Aug. 14, 2008). Final Act. 25-38.
3. Claims 13-17 stand rejected under 35 U.S.C. § 103 as
unpatentable over Varghese, Pletz (US 2008/0277465 Al, published Nov.
13, 2008) and Koretz. Final Act. 38--47.
DISCUSSION
REJECTIONUNDER35 U.S.C. § 101
Under 35 U.S.C. § 101, a patent may be obtained for "any new and
useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof." The Supreme Court has "'long held that
this provision contains an important implicit exception: Laws of nature,
natural phenomena, and abstract ideas are not patentable." Alice Corp. Pty.
Ltd. v. CLSBanklnt'l, 134 S. Ct. 2347, 2354 (2014) (quotingAss'nfor
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Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)).
The Supreme Court in Alice reiterated the two-step framework previously
set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc.,
566 U.S. 66 (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. The first step in
that analysis is to "determine whether the claims at issue are directed to one
of those patent-ineligible concepts," such as an abstract idea. The Court
acknowledged in Mayo that "all inventions at some level embody, use,
reflect, rest upon, or apply laws of nature, natural phenomena, or abstract
ideas." Mayo, 566 U.S. at 71. 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, 1335-36 (Fed. Cir. 2016). If the claims are
not directed to an abstract idea, the inquiry ends. Otherwise, the inquiry
proceeds to the second step where the elements of the claims are considered
"individually and 'as an ordered combination,' to determine whether the
additional elements 'transform the nature of the claim' into a patent-eligible
application." Alice, 134 S. Ct. at 2355 (quoting Mayo, 566 U.S. at 78-79).
Step One of Alice/Mayo Framework
Under the first step of the Alice/Mayo framework, the Examiner finds
the claims are directed to "comparing new, stored information utilizing rules
and categories in order to determine options and to transmit information"
and are therefore directed to abstract concepts. Final Act. 22. The Examiner
also finds the claims are "directed toward economic practices (transactions
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and verification) and concepts related toward processes of comparing data
that can be performed mentally (i.e. determining an option using a rules that
determine an override) and post-solutions activity." Ans. 4.
Appellants argue the Examiner's rejection "fail[s] to point to any
specific authority that compels the conclusion that the claimed invention,
which is by definition limited to the field of payment-enabled mobile
telephones and which requires the use of multiple electronic devices-unlike
the claims in Bilski and Alice which, at least in theory, could be performed
without a computer-is 'abstract' within the meaning of Section 101." App.
Br. 12. Appellants contend "the claimed process and apparatus of claims 1
and 13 do more than that [i.e. comparing new, stored information utilizing
rules and categories in order to determine options and to transmit
information], and in fact operate to overrule a merchant device cardholder
verification rule (resident in the merchant device) and to upload the
cardholder' s payment information to the merchant device to complete the
purchase transaction." App. Br. 13.
We are unpersuaded by Appellants' arguments. We tum to the
Examiner's determination that the claims are directed to an abstract idea.
"The 'abstract idea' step of the inquiry calls upon us to look at the 'focus of
the claimed advance over the prior art' to determine if the claim's 'character
as a whole' is directed to excluded subject matter."' Affinity Labs of Texas
v. DirectTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) (quoting Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016)); see
also Enfzsh, 822 F.3d at 1335 ("[T]he 'directed to' inquiry applies a stage-
one filter to claims, considered in light of the specification, based on
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whether 'their character as a whole is directed to excluded subject matter.'"
( citation omitted)).
In this regard, the Specification explains that one common step in a
purchase transaction using a payment card (such as a credit or debit card) or
a payment-enabled mobile device, is "to verify the identity of the individual
who presents the payment card [ or mobile device]" by way of signature or
PIN, etc. Spec. 1:8-2:27. In light of this background, the Specification
explains that the "present inventors have now recognized opportunities for
providing greater flexibility in the setting and application of rules which
determine whether CVM [ cardholder verification method] is required for a
given retail purchase transaction." Spec. 3: 8-10. The Specification explains
that a
financial institution that issues payment card accounts may
choose to apply different cardholder verification procedures to
various categories of its cardholder-customers. For example,
upscale cardholders may be relieved of performing cardholder
verification ( e.g., entry of a PIN) for transactions of a type for
which other cardholders are required to perform cardholder
verification. To implement this policy, the financial institution
may, during personalization of mobile telephones for use as
proximity payment devices, load varying rules as to
circumstances for which cardholder verification is required.
Spec. 4:9-16.
To provide the flexibility of varying verification rules for varying
cardholders, the Specification also describes that a point of sale ("POS")
terminal cardholder verification rule may be "overridden upon receiving
communication from the mobile telephone 102 that indicates that the mobile
telephone 102 is programmed with a cardholder verification rule." Spec.
6:23-25. Thus, the Specification describes the focus of the claimed advance
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over the prior art as "the inventive concept of storing and applying
cardholder verification rules in payment-enabled mobile telephones, [in
which] the issuer server may set different cardholder verification rules for
different cardholders, and may download the various rules on a selective
basis as part of the personalization information for the payment-enabled
mobile telephones." Spec. 9: 12-16.
Consistent with the Specification's description of the invention as
directed to providing flexible cardholder verification rules for different
categories of cardholders and allowing some rules to be overridden, claim 1
requires (1) receiving by a payment circuit of a mobile telephone from a
server computer a cardholder verification rule that prescribes circumstances
under which a cardholder is required to perform a cardholder verification
process, (2) storing the cardholder verification rule in the mobile telephone,
(3) receiving from a merchant device purchase transaction information, ( 4)
determining by the payment circuit using the cardholder verification rule
that cardholder verification is not required, (5) transmitting from the
payment circuit to the merchant device, instructions to cause the merchant
device to overrule a merchant device cardholder verification rule, and ( 5)
uploading by the payment circuit to the merchant device, the cardholder' s
payment information to complete the purchase without providing cardholder
verification.
Based on a review of the Specification and the claims as outlined
above, it is evident that, as a whole, the claims are directed to storing and
applying different and flexible cardholder verification rules for different
cardholders and allowing some rules to be overridden under certain
circumstances. Thus, we agree with the Examiner that the claims are
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directed to "comparing new, stored information utilizing rules and categories
in order to determine options and to transmit information" (Final Act. 22)
and to a fundamental economic practice (Ans. 4). As such, we agree with
the Examiner's conclusion that the claims are directed to an abstract idea.
Step Two of Alice/Mayo Framework
Under step two of the Alice/Mayo framework, the Examiner finds
The claim(s) does/do not include additional elements that are
sufficient to amount to significantly more than the judicial
exception because the claims do not affect an improvement to
another technology or technical field; the claims do not amount
to an improvement to the functioning of a computer itself; and
the claims do not move beyond a general link of the use of an
abstract idea to a particular technological environment. The
claims merely amount to the application or instructions to apply
the abstract idea (i.e. performing a money transfer) using a
mobile device and a payment processing system, and is
considered to amount to nothing more than requiring a generic
mobile device and a generic computer to merely carry out the
abstract idea itself.
Final Act. 22.
Appellants argue the claims recite significantly more than an abstract
idea. Appellants contend
For example, claim 1 recites a process that includes elements that
first determine, using a cardholder verification rule stored in a
secure element of the mobile telephone and transaction
information, that cardholder verification is not required, then
transmitting instructions the merchant device to overrule a
merchant device cardholder verification rule, and lastly upload
payment information of the cardholder to complete the purchase
transaction (without cardholder verification) which are similar to
the additional elements in the DDR Holdings case. In particular,
the claimed process specifies interactions between a payment
circuit of a mobile telephone, an issuer server, and a merchant
device that are manipulated to yield a result that is different from
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conventional processes. In other words, Appellants respectfully
submit that these elements, when taken together, perform
functions that are not generic computer functions and therefore
amount to significantly more than the abstract idea ( and are thus
patent-eligible).
App. Br. 13.
Appellants further argue the claims are "necessarily rooted in the
electronic provisioning of, and the operation of, payment-enabled mobile
devices, and solves the technological problem of how to allow issuer
financial institutions to apply different cardholder verification procedures for
their cardholders who utilize payment-enabled mobile telephones to conduct
purchase transactions." App. Br. 14.
We disagree with Appellants' arguments. The claim elements are
directed to storing and applying cardholder verification rules and to
overriding a rule requiring cardholder verification when it is determined that
a cardholder verification is not required. Allowing for some rules to be
overridden under certain circumstances is part of the abstract idea, not
something significantly more than it. Moreover, the claimed payment circuit
of a mobile telephone, the claimed issuer server computer, and the claimed
communication between server computer, mobile phone, and merchant
device do not amount to significantly more. The invention is not directed to
improvements to the technology of any of these elements. For example, the
invention is not directed to the improvement of RFID chips or near field
communications that allow for the communication of information between
the claimed devices, nor are they directed to improvements to the devices
themselves. Rather the claims are directed to economic tasks for which the
claimed devices and technology are used in their ordinary capacity. See
Enfish, 822 F.3d at 1336.
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Appellants argue the claims do not preempt the field of conducting a
purchase transaction and are therefore patent eligible. App. Br. 14--15.
Specifically, Appellants argue
the claimed method for operating a payment-enabled mobile
telephone ( claim 1) and the payment-enabled mobile telephone
(claim 13) clearly do not tie up all applications for completing
purchase transactions with payment-enabled mobile devices
such that others cannot practice them. Instead, Appellants
maintain that the pending claims tie down a specific method for
operating a payment-enabled mobile device, and a payment-
enabled mobile device ( claim 13) that functions in a specific
manner to solve a specific problem. Thus, the claims do not
preempt the field of payment-enabled mobile device purchase
transactions and therefore, in concert with the arguments
presented immediately above, Appellants respectfully maintain
that the claims are indeed patent-eligible.
App. Br. 15.
Appellants' argument is unpersuasive. "While preemption may signal
patent ineligible subject matter, 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, "[w]here a patent's
claims are deemed only to disclose patent ineligible subject matter under the
Mayo framework, as they are in this case, preemption concerns are fully
addressed and made moot." OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d
1359, 1362---63 (Fed. Cir.), cert, denied, 136 S.Ct. 701 (2015).
Accordingly, we sustain the§ 101 rejection of claims 1-9 and 13-17.
OBVIOUSNESS REJECTIONS
Claim 1
The Examiner finds Varghese teaches or suggests "determining, by
the payment circuit using the at least one cardholder verification rule stored
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in the secure element, and based on at least one of the received purchase
transaction information and current circumstances, that cardholder
verification is not required." Final Act. 26-2 7 ( citing Varghese ,r,r 34, 3 6,
83, 107,201). The Examiner further finds Evans teaches or suggests
"uploading, by the payment circuit to the merchant device, . . . information
to complete the purchase transaction." Final Act. 27 (citing Evans ,r,r 18-19,
21 ). Finally, the Examiner finds Koretz teaches or suggests "transmitting,
by the payment circuit to the merchant device, instructions configured to
cause the merchant device to overrule a merchant device cardholder
verification rule." Final Act. 29-30 (citing Koretz ,r,r 8, 59-62, 64).
Appellants argue "[a]ll of the processes disclosed by Evans require the
cardholder to provide biometric data (which is cardholder verification data),
which Appellants maintain teaches away from the claimed invention
wherein a determination is made that cardholder verification is not
required." App. Br. 18.
Appellants' argument is unpersuasive. The Examiner relies on Evans
"to teach it was known for data to be uploaded to a merchant device to
complete a transaction" but does not rely on Evans to for teaching the
specific type of information being uploaded or for the transaction being
completed without providing cardholder verification. Ans. 13 (citing Evans
,r,r 18-19). Instead, the Examiner relies upon Koretz as teaching
transmitting payment information to complete a purchase transaction
without providing cardholder verification. Ans. 14 ( citing Koretz ,r,r 8, 59-
62). Teaching away requires a reference to actually criticize, discredit, or
otherwise discourage the claimed solution. See In re Fulton, 391 F.3d 1195,
1201 (Fed. Cir. 2004) ("The prior art's mere disclosure of more than one
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alternative does not constitute teaching away from any of these alternatives
because such disclosure does not criticize, discredit, or otherwise discourage
the solution claimed.") Here, although Evans discloses transmitting
biometric data (i.e. verification data) to complete a purchase transaction it
does not criticize, discredit, or discourage completing the transaction without
providing verification data, and there is no reason why one of ordinary skill
in the art would not combine the teachings of Evans with Koretz which, the
Examiner finds, teaches completing a purchase transaction without
providing cardholder verification.
Appellants next argue,
[i]t is clear . . . that Koretz specifically teaches that an
administrator ( a human being) must be involved in order to
override preset criteria. . . . Even if the administrator is an
electronic device ( which Appellants vigorously dispute), there is
absolutely no suggestion anywhere in Koretz that such an
"administrator" is equivalent to a payment circuit of a mobile
device, as claimed. Furthermore, Koretz is silent regarding user
authentication or user verification and is instead concerned with
utilizing stipulated approval levels to conduct purchase
transactions.
App. Br. 21.
Appellants' argument is unpersuasive. The Examiner relies on
Varghese for teaching the claimed "payment circuit." Final Act. 25-26.
Koretz teaches that an administrator may approve a purchase request by
overriding pre-set criteria for completing that purchase. The Examiner
combines the payment circuit of Varghese with Koretz's teaching regarding
the administrator, in finding that it would be obvious to have a payment
circuit overrule a merchant device cardholder verification rule just as an
administrator could. Broadly providing an automatic way to replace a
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manual activity accomplishing the same result is insufficient to distinguish
an automated process over a manual activity. See In re Venner, 262 F.2d 91,
95 (CCPA 1958).
Accordingly, we sustain the Examiner's obviousness rejection of
independent claim 1. Claims 2-9 were argued on the same basis (see App.
Br. 21) and, thus, we also sustain the Examiner's obviousness rejection of
these claims.
Claim 13
Although Appellants argue claim 13 separately, they incorporate and
rely on all the arguments made with respect to claim 1 and add that Pletz
does not cure the asserted deficiencies of Varghese and Koretz. App. Br. 22.
However, as explained above, we do not find the Examiner's rejection to be
deficient and therefore sustain the Examiner's obviousness rejection of claim
13. Appellants do not make arguments for separate patentability of
dependent claims 14--17 and, thus, we sustain the Examiner's obviousness
rejection of these claims as well.
DECISION
We affirm the Examiner's rejections of claims 1-9 and 13-17 under
35 U.S.C. §§ 101 and 103.
No time period for taking any subsequent action in connection with
this appeal may be extended. See 37 C.F.R. § 1.136(a)(l )(iv).
AFFIRMED
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