MasterCard International Incorporated

Patent Trials and Appeals Board

Oct 23, 2020

2020002283 (P.T.A.B. Oct. 23, 2020)

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.
15/041,830 02/11/2016 Axel Cateland P01888-US-
UTIL (M01.332)
5282
125619 7590 10/23/2020
Mastercard International Incorporated
c/o Buckley, Maschoff & Talwalkar LLC
50 Locust Avenue
New Canaan, CT 06840
EXAMINER
CHOO, JOHANN Y
ART UNIT PAPER NUMBER
3685
NOTIFICATION DATE DELIVERY MODE
10/23/2020 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):
colabella@bmtpatent.com
martin@bmtpatent.com
szpara@bmtpatent.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
________________

Ex parte AXEL CATELAND
________________

Appeal 2020-002283
Application 15/041,830
Technology Center 3600
________________

Before JOHN A. EVANS, LARRY J. HUME, and
JASON J. CHUNG, Administrative Patent Judges.

CHUNG, Administrative Patent Judge.

DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals the Final Rejection
of claims 10–13.2 We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
INVENTION
The claimed invention relates to enhancing security of payment
transactions. Spec. 2:11–12. Claim 10 is illustrative of the invention and is
reproduced below:
10. A method for enhancing security of operation of a
computerized payment account transaction system, the system

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. According to Appellant, MasterCard International
Incorporated is the real party in interest. Appeal Br. 2.
2 Claims 1–9 and 14–20 are cancelled. Appeal Br. 12–13.
Appeal 2020-002283
Application 15/041,830

2
including a plurality of computers interconnected with each other
by digital signal transmission channels, the computers including
a payment support services computer, the payment support
services computer including a processor and a memory device in
communication with the processor, the memory device storing
program instructions for controlling the processor, the method
comprising:
receiving, by the processor in the payment support
services computer, an authorization request for a payment
account transaction, the authorization request including a
payment token, a nonce value and a security code, the nonce
value in a format that matches a format of a payment account
expiration date, the nonce value contained in an account
expiration date data field of said authorization request, the
security code being a three-digit number;
using, by the processor, a cryptographic key to
cryptographically process the payment token with the nonce
value to produce a presumed security code value, the presumed
security code being a three-digit number;
comparing, by the processor, the presumed security code
value with the security code included in the authorization
request; and
generating, by the processor, a verification indication
based at least in part on a result of the comparing step, said
verification indication verifying authenticity of the payment
token.
Appeal Br. 12 (Claims Appendix) (emphases added).

REJECTIONS
The Examiner rejects claims 10–13 under 35 U.S.C. § 101 as being
directed to patent ineligible subject matter. Final Act. 3–5.
The Examiner rejects claims 10 and 11 under 35 U.S.C. § 103(a) as
being unpatentable over the combination of Sheets (US 2015/0019443 A1;
published Jan. 15, 2014) and Hammad (US 2010/0252623 A1; published
Oct. 7, 2010). Final Act. 5–9.
Appeal 2020-002283
Application 15/041,830

3
The Examiner rejects claims 12 and 13 under 35 U.S.C. § 103(a) as
being unpatentable over the combination of Sheets, Hammad, and Ciurea
(US 2011/0258118 A1; published Oct. 20, 2011). Final Act. 9–10.
ANALYSIS
I. Claims 10–13 Rejected Under 35 U.S.C. § 101
A. Principles of Law
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
However, the U.S. Supreme Court has long interpreted 35 U.S.C. § 101 to
include implicit exceptions: “[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).
In determining whether a claim falls within an excluded category, we
are guided by the Court’s two-part framework, described in Mayo and Alice.
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.” See Alice, 573 U.S. at
219 (“On 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 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
Appeal 2020-002283
Application 15/041,830

4
mental processes (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). Concepts
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 waterproof 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, the claim at issue recited a mathematical formula, but the
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.”). Having said that, the 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 to limit the use of the
formula to a particular technological environment.” Id. (citation omitted)
(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 (quotation marks omitted).
“A claim that recites an abstract idea must include ‘additional features’ to
Appeal 2020-002283
Application 15/041,830

5
ensure ‘that the [claim] is more than a drafting effort designed to
monopolize the [abstract idea].’” Id. (alterations in original) (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.
B. USPTO Section 101 Guidance
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101. 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(“2019 Revised Guidance”).3 “All USPTO personnel are, as a matter of
internal agency management, expected to follow the guidance.” Id. at 51;
see also Update at 1.
Under the 2019 Revised Guidance and the Update, 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 a fundamental economic practice, or mental
processes) (“Step 2A, Prong One”); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a)–(c), (e)–(h) (9th ed.
Rev. 08.2017, Jan. 2018)) (“Step 2A, Prong Two”).4

3 In response to received public comments, the Office issued further
guidance on October 17, 2019, clarifying the 2019 Revised Guidance.
USPTO, October 2019 Update: Subject Matter Eligibility (the “Update”)
(available at https://www.uspto.gov/sites/default/files/documents/
peg_oct_2019_update.pdf).
4 This evaluation is performed by (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception, and
(b) evaluating those additional elements individually and in combination to
determine whether the claim as a whole integrates the exception into a
Appeal 2020-002283
Application 15/041,830

6
2019 Revised Guidance, 84 Fed. Reg. at 52–55.
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then look, under
Step 2B, to whether the claim:
(3) adds a specific limitation beyond the judicial exception that is not
“well-understood, routine, conventional” in the field (see MPEP
§ 2106.05(d)); or
(4) simply appends well-understood, routine, conventional activities
previously known to the industry, specified at a high level of
generality, to the judicial exception.
2019 Revised Guidance, 84 Fed. Reg. at 52–56.
C. The Examiner’s Rejection and Appellant’s Arguments
The Examiner concludes the present claims recite certain methods of
organizing human activity. Ans. 5. The Examiner concludes the present
claims are not integrated into a practical application and there are no
limitations recited in the present claims that add significantly more to the
abstract idea. Final Act. 4; Ans. 3. The Examiner determines the present
claims do not amount to significantly more than an abstract idea itself
because the abstract idea is implemented using additional elements that are
well-understood, routine, and conventional. Ans. 4 (citing “receiving data”).
Appellant argues that the present claims does not recite an abstract
idea because it is a method that improves security for operating a
computerized payment network. Appeal Br. 8. Appellant argues the present
claims do not preempt any abstract idea. Id. at 7; Reply Br. 2. Appellant
argues the Examiner does not provide the evidence required by Berkheimer

practical application. See 2019 Revised Guidance - Section III(A)(2), 84
Fed. Reg. 54–55.
Appeal 2020-002283
Application 15/041,830

7
to support a determination that the additional elements are well-understood,
routine, or conventional. Appeal Br. 8 (citing Berkheimer v. HP Inc., 881
F.3d 1360 (Fed. Cir. 2018)). We disagree with Appellant.
D. Step 2A, Prong 1
Patent eligibility under 35 U.S.C. § 101 is a question that we resolve
pursuant to the 2019 Revised Guidance. The emphasized portions of claim
10,5 reproduced above (see supra at 2), recite commercial interactions
because they pertain to security of payment transactions. See 2019 Revised
Guidance, 84 Fed. Reg. at 52 n.14. Commercial interactions fall into the
category of certain methods of organizing human activity. Id. Certain
methods of organizing human activity are a type of abstract idea. Id.
We, therefore, disagree with Appellant’s argument that the present
claims do not recite an abstract idea because it is a method that operates a
computerized payment network. Appeal Br. 8. The additional elements
(i.e., the non-emphasized portions of claim 1 recited supra at 1–2) are
generic computer components for the reasons discussed infra.
We must still determine whether the abstract idea is integrated into a
practical application, namely whether the claim applies, relies on, or uses the
abstract idea in a manner that imposes a meaningful limit on the abstract
idea, such that the claim is more than a drafting effort designed to
monopolize the abstract idea. See 2019 Revised Guidance, 84 Fed. Reg. at
54–55. We therefore (1) identify whether there are any additional recited
elements beyond the abstract idea, and (2) evaluate those elements both

5 Appellant states claim 10 may be taken as exemplary of the pending
claims. Appeal Br. 6. We, therefore, group claims 10–13 together and refer
to this grouping as the “present claims.”
Appeal 2020-002283
Application 15/041,830

8
individually and collectively to determine whether they integrate the
exception into a practical application. See id.
Accordingly, we proceed to Prong 2.
E. Step 2A, Prong 2
Here, the elements in the present claims used to implement the
abstract idea are the “computerized payment account transaction system,”
“computers,” “payment support services computer,” “processor,” and
“memory device.” See 2019 Revised Guidance, 84 Fed. Reg. at 52. The
additional elements of the present claims do not integrate the abstract idea
into a practical application because they do not impose any meaningful
limits on practicing the abstract idea for the following reasons.
Appellant does not identify persuasively how the Specification sets
forth an improvement in technology. Appeal Br. 9–10 (citing Core Wireless
Licensing S.A.R.L v. LG Elecs., Inc., 880 F.3d 1356 (Fed. Cir. 2018). The
Update addresses how we consider evidence of improvement that is
presented to us. The Update states:
[T]he evaluation of Prong Two requires the use of the
considerations (e.g. improving technology, effecting a particular
treatment or prophylaxis, implementing with a particular
machine, etc.) identified by the Supreme Court and the Federal
Circuit, to ensure that the claim as a whole “integrates [the]
judicial exception into a practical application [that] will apply,
rely on, or use 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.
Update 11 (emphases added). The Update further states:
During examination, the examiner should analyze the
“improvements” consideration by evaluating the specification
and the claims to ensure that a technical explanation of the
Appeal 2020-002283
Application 15/041,830

9
asserted improvement is present in the specification, and that the
claim reflects the asserted improvement. Generally, examiners
are not expected to make a qualitative judgment on the merits of
the asserted improvement. If the examiner concludes the
disclosed invention does not improve technology, the burden
shifts to applicant to provide persuasive arguments supported by
any necessary evidence to demonstrate that one of ordinary skill
in the art would understand that the disclosed invention improves
technology. Any such evidence submitted under 37 C.F.R.
§ 1.132 must establish what the specification would convey to
one of ordinary skill in the art and cannot be used to supplement
the specification. For example, in response to a rejection under
35 U.S.C. § 101, an applicant could submit a declaration under
§ 1.132 providing testimony on how one of ordinary skill in the
art would interpret the disclosed invention as improving
technology and the underlying factual basis for that conclusion.
Id. at 13 (emphasis added).
We, therefore, focus on any evidence Appellant cites in its briefs, as
discussed in the Update. Appellant does not refer us to any paragraphs of
the Specification or other evidence of an improvement to a technology or
technological field. Appeal Br. 18–20. We, therefore, disagree with
Appellant’s argument that the present claims recite an improvement to the
security for operating a computerized payment network. Appeal Br. 8. This
argument amounts merely to attorney argument unsupported by evidence.
Furthermore, the additional elements in the present claims, namely
“computerized payment account transaction system,” “computers,”
“payment support services computer,” “processor,” and “memory device” do
not, either individually or in combination, integrate the abstract idea into a
practical application. In particular, Appellant’s Specification discloses that
these elements encompass generic computer components. Spec. 4:1–2,
4:11–23, 5:19–29, 7:4–5, 7:19–23. Merely adding generic computer
Appeal 2020-002283
Application 15/041,830

10
components to perform abstract ideas does not integrate those ideas into a
practical application. See 2019 Revised Guidance, 84 Fed. Reg. at 55
(identifying “merely includ[ing] instructions to implement an abstract idea
on a computer” as an example of when an abstract idea has not been
integrated into a practical application).
We, therefore, conclude that the additional elements, whether
considered individually or as an ordered combination, do not integrate the
abstract idea into a practical application because the additional elements are
generic computer components that do not impose meaningful limits on
practicing the abstract idea.
Moreover, at best, the present claims are directed to improvements to
an abstract idea (i.e., certain methods of organizing human activity), rather
than to improvements to a technology or technological field. See, e.g.,
Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir.
2016) (“[A] claim for a new abstract idea is still an abstract idea.”).
“[U]nder the Mayo/Alice framework, a claim directed to a newly discovered
law of nature (or natural phenomenon or abstract idea) cannot rely on the
novelty of that discovery for the inventive concept necessary for patent
eligibility . . . .” Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1376
(Fed. Cir. 2016) (citations omitted).
Appellant’s arguments that the present claims do not preempt any
abstract idea (Appeal Br. 7; Reply Br. 2), do not persuade us that the claims
are patent eligible. Although preemption may denote patent ineligibility, its
absence does not demonstrate patent eligibility. See FairWarning IP, LLC v.
Iatric Sys., Inc., 839 F.3d 1089, 1098 (Fed. Cir. 2016). For claims covering
a patent-ineligible concept, preemption concerns “are fully addressed and
Appeal 2020-002283
Application 15/041,830

11
made moot” by an analysis under the Mayo/Alice framework. Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
Appellant does not make any other arguments pertaining to Step 2A,
Prong 2. Because we determine that the present claims recite an abstract
idea that is not integrated into a practical application, we proceed to Step 2B.
F. Step 2B
We disagree with Appellant’s argument that the Examiner fails to
provide sufficient evidence to support the finding that the additional
elements implementing the abstract idea, whether considered individually or
as an ordered combination, are well-understood, routine, and conventional.
Appeal Br. 8 (citing Berkheimer, 881 F.3d 1360).
The Examiner determines the present claims do not amount to
significantly more than an abstract idea itself because the abstract idea is
implemented using additional elements that are well-understood, routine,
and conventional. Ans. 4 (citing “receiving data” as evidentiary support).
Courts have recognized “receiving data” as computer functions that are well-
understood, routine, and conventional activities. MPEP § 2106.05(d) (citing
In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 610 (Fed. Cir. 2016);
OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir. 2015);
buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014)).
To the extent that Appellant is arguing that the Specification does not
support a finding that the additional elements implementing the abstract idea
are well-understood, routine, and conventional, we disagree because the
Specification indicates that the additional elements (i.e., “computerized
payment account transaction system,” “computers,” “payment support
services computer,” “processor,” and “memory device”) are nothing more
Appeal 2020-002283
Application 15/041,830

12
than generic computer components. Spec. 4:1–2, 4:11–23, 5:19–29, 7:4–5,
7:19–23. Appellant’s Specification indicates these additional elements were
well-understood, routine, and conventional components because it describes
them at a high level of generality and in a manner that indicates that they are
sufficiently well-known.
Appellant does not argue that the dependent claims recite any
additional features that would transform the abstract idea embodied in
independent claim 10 into an inventive concept. We, therefore, sustain the
Examiner’s rejection of: (1) independent claim 10; and (2) dependent claims
11–13 under § 101.
II. Claims 10–13 Rejected Under 35 U.S.C. § 103
The Examiner finds Sheets teaches the limitation “the nonce value in
a format that matches a format of a payment account expiration date.” Final
Act. 6 (citing Sheets ¶¶ 37, 182, 199, 201).
Appellant argues Sheets merely teaches a “nonce value,” but fails to
teach the nonce value is in a format of a payment account expiration date.
Appeal Br. 9–10; Reply Br. 2. Appellant argues that Sheets and Hammad
teaches away from the claimed concept of a nonce value in the format of an
expiration date. Appeal Br. 10. We disagree with Appellant.
Claim construction is an issue of law that is left for a court or a
tribunal. “[W]hen the district court reviews only evidence intrinsic to the
patent (the patent claims and specifications, along with the patent’s
prosecution history), the judge’s determination will amount solely to a
determination of law.” Teva Pharms. USA, Inc. v. Sandoz, Inc., 574 U.S.
318, 331 (2015). “[T]he ultimate issue of the proper construction of a claim
should be treated as a question of law.” Id. at 326.
Appeal 2020-002283
Application 15/041,830

13
We construe claim terms according to their broadest reasonable
construction in light of the specification of the patent or application in which
they appear. In re Bigio, 381 F.3d 1320, 1324 (Fed. Cir. 2004). Consistent
with the broadest reasonable construction, claim terms are generally given
their ordinary and customary meaning, as understood by a person of
ordinary skill in the art, in the context of the entire specification. In re
Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007). Also, we must
be careful not to read a particular embodiment appearing in the written
description into the claim if the claim language is broader than the
embodiment. See In re Van Geuns, 988 F.2d 1181, 1184 (Fed. Cir. 1993)
(“[L]imitations are not to be read into the claims from the specification.”).
However, a term may be defined in the specification with reasonable clarity,
deliberateness, and precision. In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir.
1994).
We note that the limitation “the nonce value in a format that matches
a format of a payment account expiration date” recites non-functional
descriptive material because it does not change the operation of the claimed
processor. The informational content of non-functional descriptive material
is not entitled to weight in the patentability analysis. See Ex parte Nehls, 88
USPQ2d 1883, 1887–90 (BPAI 2008) (precedential); Ex parte Curry, 84
USPQ2d 1272 (BPAI 2005) (informative) (Federal Circuit Appeal No.
2006-1003), aff’d, Rule 36 (June 12, 2006)); Ex parte Mathias, 84 USPQ2d
1276 (BPAI 2005) (informative), aff’d, 191 F. App’x 959 (Fed. Cir. 2006).
As a result, we need not decide whether Sheets teaches the limitation
“the nonce value in a format that matches a format of a payment account
expiration date.” Appeal Br. 9–10; Reply Br. 2. Under this construction, we
Appeal 2020-002283
Application 15/041,830

14
also need not decide whether Sheets and Hammad teaches away from the
claimed concept of a nonce value in the format of an expiration date.
Appeal Br. 10.
Appellant states claim 10 is exemplary of the pending claims. Appeal
Br. 9. We, therefore, sustain the Examiner’s rejection of: (1) independent
claim 10; and (2) dependent claims 11–13 under § 103.
We have only considered those arguments that Appellant actually
raised in the Briefs. Arguments Appellant could have made, but chose not to
make, in the Briefs have not been considered and are deemed to be waived.
See 37 C.F.R. § 41.37(c)(1)(iv).

CONCLUSION

No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv). See
37 C.F.R. § 41.50(f).
AFFIRMED

Claim(s)
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
10–13 101 Eligibility 10–13
10, 11 103 Sheets, Hammad 10, 11
12, 13 103 Sheets, Hammad,
Ciurea
12, 13
Overall
Outcome
10–13