PETROV, Andrew et al.Download PDFPatent Trials and Appeals BoardDec 23, 201913793013 - (D) (P.T.A.B. Dec. 23, 2019) Copy Citation 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. 13/793,013 03/11/2013 Andrew PETROV 054060.001001 2011 33717 7590 12/23/2019 GREENBERG TRAURIG LLP (GT) C/O: GREENBERG TRAURIG INTELLECTUAL PROPERTY DEPARTMENT 77 WEST WACKER DRIVE, SUITE 3100 CHICAGO, IL 60601 EXAMINER DEGA, MURALI K ART UNIT PAPER NUMBER 3697 NOTIFICATION DATE DELIVERY MODE 12/23/2019 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): cadanoc@gtlaw.com clairt@gtlaw.com gtipmail@gtlaw.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________________ Ex parte ANDREW PETROV, SCOTT GOLDTHWAITE, and WILLIAM GRAYLIN ____________________ Appeal 2019-002531 Application 13/793,013 Technology Center 3600 ____________________ Before HUNG H. BUI, ADAM J. PYONIN, and DAVID J. CUTITTA II, Administrative Patent Judges. CUTITTA, Administrative Patent Judge. DECISION ON APPEAL Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the Examiner’s decision to reject claims 1–7 and 9–24, all of the claims on appeal.2 We have jurisdiction under 35 U.S.C. § 6(b). We REVERSE. We enter a new ground of rejection under 35 U.S.C. § 112, second paragraph. 1 We use the word “Appellant” to refer to “[A]pplicant” as defined in 37 C.F.R. § 1.42(a). Appellant identifies the real party in interest as VeriFone, Inc. Appeal Br. 2. 2 Claim 8 is cancelled. Appeal Br. 15. Appeal 2019-002531 Application 13/793,013 2 STATEMENT OF THE CASE Invention Appellant’s invention relates to “a secure transaction module that performs electronic transactions by interacting with payment cards or authentication cards.” See Spec. ¶ 4.3 Illustrative Claim Claim 1, the sole independent claim, is illustrative of the claimed subject matter and is reproduced below with claim element labels added in brackets: 1. A secure electronic payment transaction system comprising: [a] a secure transaction module (STM) for providing secure payment transactions utilizing banking cards, said STM comprising a smart card reader and a processor; [b] a host device comprising a communication module for connecting to a financial institution via a network; [c] wherein said STM further comprises an interface for communicating with said host device and with said financial institution, said STM communicating via a network connection with said financial institution by utilizing said communication module of said host device to connect to said network; [d] wherein said interface provides a processor-to- processor connection between the STM and the host device; 3 Our Decision refers to: (1) Appellant’s Specification filed March 11, 2013 (“Spec.”); (2) the Non-Final Rejection mailed January 11, 2018 (“Non-Final Act.”); (3) the Appeal Brief filed June 7, 2018 (“Appeal Br.”); (4) the Examiner’s Answer mailed December 12, 2018 (“Ans.”); and (5) the Reply Brief filed February 11, 2019 (“Reply Br.”). Appeal 2019-002531 Application 13/793,013 3 [e] wherein said STM receives payment transaction commands issued by said host device from said host device via said interface; and [f] wherein said STM is operative to process sensitive information within a cryptographic boundary before said sensitive information is transmitted to said financial institution via said host device such that said sensitive information is transmitted without said sensitive information being compromised by said host device. Appeal Br. 14 (Claims Appendix). REJECTION The Examiner rejects claims 1–7 and 9–24 under 35 U.S.C. § 101 as reciting patent-ineligible subject matter. Non-Final Act. 3–8. DISCUSSION We review the appealed rejection for error based upon the issues identified by Appellant and in light of Appellant’s arguments and evidence. Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010) (precedential). Arguments not made are waived. See 37 C.F.R. § 41.37(c)(1)(iv) (2017). I. 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 US 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. See, e.g., Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014). Appeal 2019-002531 Application 13/793,013 4 In determining whether a claim falls within an excluded category, we are guided by the Court’s two-step framework, described in Alice and Mayo. 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 217. If the claim recites an abstract idea, we turn to the second step of the Alice and Mayo framework, in which “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 ensure ‘that the [claim] is more than a drafting effort designed to monopolize the [abstract idea].’” Id. (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. The Office published revised guidance on the application of § 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (hereinafter “Guidance”). Recently, the USPTO published an update to that guidance. October 2019 Patent Eligibility Guidance Update, 84 Fed. Reg. 55,942 (hereinafter “Guidance Update”). Under the Guidance and the Guidance Update, in determining whether a claim falls within an excluded category, we first look to whether the claim recites: (1) Step 2A — Prong One: 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); and Appeal 2019-002531 Application 13/793,013 5 (2) Step 2A — Prong Two: additional elements that integrate the judicial exception into a practical application (see MPEP4 § 2106.05(a)–(c), (e)–(h)). See Guidance, 84 Fed. Reg. 54–55 (“Revised Step 2A”). Only if a claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application, do we then look to whether the claim (Step 2B): (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. See id. at 56 (“Step 2B”). II. Analysis Step 2A, Prong 1 in the Guidance (Judicial Exceptions) The Examiner determines the claims are directed toward the abstract idea of “facilitating financial transaction[s].” Non-Final Act. 5. Appellant argues the Examiner erred in determining the claim is directed to an abstract concept because the Examiner does not identify the category of abstract idea to which the claims belong and because “[t]he pending claims do not recite any of the judicial exceptions enumerated in the 2019 PEG” including certain methods of organizing human activity, mental processes, or mathematical concepts. Reply Br. 2–5; Appeal Br. 6–7. Pursuant to the Guidance, we are persuaded of Examiner error in the rejection. Examples of certain methods of organizing human activity are enumerated in the Guidance to include “fundamental economic principles or 4 All Manual of Patent Examining Procedure (“MPEP”) citations herein are to MPEP, Rev. 08.2017, January 2018. Appeal 2019-002531 Application 13/793,013 6 practices . . . commercial or legal interactions . . . managing personal behavior or relationships or interactions between people.” Guidance, 84 Fed. Reg. 52, Section I (Groupings of Abstract Ideas). Further, the Guidance describes mental concepts as “concepts performed in the human mind (including an observation, evaluation, judgment, opinion)” and mathematical concepts as “mathematical relationships, mathematical formulas or equations, mathematical calculations.” Id. Claim 1 recites limitations such as [a] “a secure transaction module (STM) for providing secure payment transactions utilizing banking cards, said STM comprising a smart card reader and a processor,” [b] “a host device comprising a communication module for connecting to a financial institution via a network,” and [f] “wherein said STM is operative to process sensitive information within a cryptographic boundary before said sensitive information is transmitted to said financial institution via said host device such that said sensitive information is transmitted without said sensitive information being compromised by said host device.” Appeal Br. 14. The Examiner has not sufficiently demonstrated that these limitations are consistent with certain methods of organizing human activity, mental processes, or mathematical concepts, pursuant to the eligibility analysis as enumerated in the Guidance. Guidance, 84 Fed. Reg. 54, Section III(A)(1) (Prong One: Evaluate Whether the Claim Recites a Judicial Exception). For these reasons, we are persuaded claim 1 has not been shown to “recite a judicial exception within the enumerated groupings of abstract ideas in the Guidance and thus “the claim is eligible at Prong One of revised Step 2A.” Guidance, 84 Fed. Reg. 53, Section III (Instructions for Applying Appeal 2019-002531 Application 13/793,013 7 Revised Step 2A During Examination). Accordingly, we do not sustain the Examiner’s rejection of claims 1–7 and 9–24 under 35 U.S.C. § 101. NEW GROUND OF REJECTION Pursuant to our authority under 37 C.F.R. § 41.50(b), we enter a new ground of rejection under 35 U.S.C. § 112, second paragraph. Independent claim 1 recites “wherein said STM is operative to process sensitive information within a cryptographic boundary before said sensitive information is transmitted to said financial institution via said host device such that said sensitive information is transmitted without said sensitive information being compromised by said host device.” Appeal Br. 14 (emphasis added). This limitation, as recited in claim 1, is indefinite. In describing the cryptographic boundary, Appellant’s Specification states: The STM 100 has the unique ability to have its own “cryptographic boundary” so that secure payment and other transactions are not compromised by the host device 200. This “cryptographic boundary” includes security measures that detect and prevent tampering with the hardware and software components of the STM that are used for transaction processing. All sensitive information that is processed within this “cryptographic boundary” is encrypted before it is exposed to the host device. Furthermore, the STM maintains this “cryptographic boundary” between different transaction applications that are contained within its memory, thereby allowing multiple authorities to house approved and secure transactions processing methodologies. Spec. 10:10–20. If the language of the claim is such that a person of ordinary skill in the art could not have interpreted the metes and bounds of the claim so as to understand how to avoid infringement, a rejection of the claim under 35 Appeal 2019-002531 Application 13/793,013 8 U.S.C. 112(b) or pre-AIA 35 U.S.C. 112, second paragraph, is appropriate. See Morton Int’l, Inc. v. Cardinal Chem. Co., 5 F.3d 1464, 1470 (Fed. Cir. 1993). Appellant’s claim 1 recites that the “STM is operative to process sensitive information within a cryptographic boundary . . . such that said sensitive information is transmitted without said sensitive information being compromised by said host device.” Appeal Br. 14. The Specification similarly discloses that “The STM 100 has the unique ability to have its own “cryptographic boundary” so that secure payment and other transactions are not compromised by the host device 200.” Spec. 10:12–14. However, neither the Specification nor the claim clarifies what it means for secure payments and other transactions to be transmitted without being compromised. Without such a disclosure, an accused infringer would be unable to determine whether a particular encrypted STM transmits uncompromised sensitive information, thereby infringing the claim. Thus, the “cryptographic boundary,” as recited in claim 1, is indefinite because there is no means to determine the metes and bounds of the limitation. Accordingly, we enter a NEW GROUND OF REJECTION for claim 1 under 35 U.S.C. § 112, second paragraph, as indefinite. Claims 2–7 and 9– 24 depend from claim 1 and are rejected for similar reasoning. Appeal 2019-002531 Application 13/793,013 9 CONCLUSION We reverse the Examiner’s decision to reject claims 1–7 and 9–24 under 35 U.S.C. § 101. Pursuant to our authority under 37 C.F.R. § 41.50(b), we enter a new ground of rejection for claims 1–7 and 9–24 under 35 U.S.C. § 112, second paragraph. DECISION SUMMARY In summary: Claims Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed New Ground 1–7, 9–24 101 Eligibility 1–7, 9–24 112, 2nd par. Indefiniteness 1–7, 9–24 Overall Outcome 1–7, 9–24 1–7, 9–24 TIME PERIOD FOR RESPONSE This decision contains a new ground of rejection pursuant to 37 C.F.R. § 41.50(b). 37 C.F.R. § 41.50(b) provides “[a] new ground of rejection pursuant to this paragraph shall not be considered final for judicial review.” 37 C.F.R. § 41.50(b) also provides that the Appellant, WITHIN TWO MONTHS FROM THE DATE OF THE DECISION, must exercise one of Appeal 2019-002531 Application 13/793,013 10 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. . . . (2) Request rehearing. Request that the proceeding be reheard under § 41.52 by the Board upon the same Record. . . . Further guidance on responding to a new ground of rejection can be found in the Manual of Patent Examining Procedure § 1214.01. REVERSED 37 C.F.R. § 41.50(b) Copy with citationCopy as parenthetical citation