Visa International Service AssociationDownload PDFPatent Trials and Appeals BoardMay 8, 202014314629 - (D) (P.T.A.B. May. 8, 2020) 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. 14/314,629 06/25/2014 Diane C. Salmon 8223-1706029 (314US03) 9401 144885 7590 05/08/2020 The Webb Law Firm / Visa International ONE GATEWAY CENTER 420 FT. DUQUESNE BLVD, SUITE 1200 PITTSBURGH, PA 15222 EXAMINER REFAI, SAM M ART UNIT PAPER NUMBER 3681 NOTIFICATION DATE DELIVERY MODE 05/08/2020 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): patents@webblaw.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte DIANE C. SALMON, NANCY L. KIM, and JAMES ALAN VONDERHEIDE ____________ Appeal 2019-001870 Application 14/314,629 Technology Center 3600 ____________ Before JOSEPH A. FISCHETTI, NINA L. MEDLOCK, and ROBERT J. SILVERMAN, Administrative Patent Judges. MEDLOCK, Administrative Patent Judge. DECISION ON APPEAL Appeal 2019-001870 Application 14/314,629 2 STATEMENT OF THE CASE Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s final rejection of claims 1, 7, 8, 17–19, and 21. We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. CLAIMED INVENTION Appellant’s claimed invention “relate[s] to the processing of loyalty benefits, such as points, miles awarded in loyalty programs” (Spec. ¶ 3). Claims 1, 18, and 19 are the independent claims on appeal. Claim 1, reproduced below with bracketed notations added, is illustrative of the claimed subject matter: 1. A method, comprising: [(a)] providing a computing apparatus having: [(a1)] a transaction handler configured on an electronic payment processing network that connects separate computers, including: transaction terminals disposed at locations of merchants and configured to generate transactions of payments in the electronic payment processing network using information received at the transaction terminals, the information identifying accounts from which the payments are made; 1 We use the term “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42. Our decision references Appellant’s Appeal Brief (“Appeal Br.,” filed August 14, 2018) and Reply Brief (“Reply Br.,” filed December 28, 2018), and the Examiner’s Answer (“Ans.,” mailed October 31, 2018), and Final Office Action (“Final Act.,” mailed March 14, 2018). Appellant identifies Visa International Service Association as the real party in interest (Appeal Br. 3). Appeal 2019-001870 Application 14/314,629 3 first computers controlling the accounts from which the payments are made in the electronic payment processing network; second computers controlling accounts of the merchants in which the payments are received in the electronic payment processing network; the transaction handler interconnecting the first computers and the second computers, [(a2)] a loyalty broker coupled with the transaction handler and configured to communicate with a plurality of loyalty program computer systems associated with a plurality of separate loyalty program providers outside the electronic payment processing network, [(a3)] a data warehouse coupled with the transaction handler, and [(a4)] a portal coupled with the data warehouse; [(b)] providing a user interface presented via the portal to receive user input registering a first loyalty program and a second loyalty program for association with account information of a consumer payment account of a user, wherein: the loyalty broker is configured in communication with a first loyalty program computer system of a first loyalty program provider of the plurality of loyalty program computer systems outside the electronic payment processing network, the first loyalty program computer system controls first loyalty benefits earned by the user in the first loyalty program from the first loyalty program provider of the first loyalty program, and the loyalty broker is configured to communicate with the first loyalty program computer system to exchange the first loyalty benefits earned by the user in the first loyalty program for a benefit of the transaction handler in response to an instruction from the transaction handler; Appeal 2019-001870 Application 14/314,629 4 [(c)] storing, in response to the user input and in the data warehouse of the computing apparatus, data associating the first loyalty program having the first loyalty benefits earned by the user with the account information, wherein the first loyalty program has a second exchange rate between the first loyalty benefits and a payment currency of the consumer payment account of the user; [(d)] storing, in the data warehouse of the computing apparatus, an offer identifying a first exchange rate between second loyalty benefits earned by the user in the second loyalty program of a second loyalty program provider and the payment currency of the consumer payment account of the user, wherein the first exchange rate identified in the offer is specified by the second loyalty program provider, wherein the second loyalty program provider is a merchant separate from the first loyalty program provider of the first loyalty program, and wherein the first exchange rate specified by the second loyalty program provider for the offer is different from the second exchange rate of the first loyalty program; [(e)] receiving, in the transaction handler of the computing apparatus in the electronic payment processing network, an authorization communication identifying a payment transaction, made in the consumer payment account using the account information, between one of the first computers controlling the consumer payment account and one of the second computers controlling a merchant account of the second loyalty program provider; [(f)] in response to the authorization communication received by the transaction handler in the electronic payment processing network, instructing, by the transaction handler based on the data stored in the data warehouse associating the first loyalty program having the first loyalty benefits earned by the user with the account information, the loyalty broker to perform a loyalty benefit exchange, and [(g)] in response to the transaction handler instructing the loyalty broker to perform the loyalty benefit exchange, communicating, by the loyalty broker, with the first loyalty program computer system to exchange the first loyalty benefits Appeal 2019-001870 Application 14/314,629 5 for the payment currency to result in the benefit of the transaction handler according to the second exchange rate; and [(h)] based on a result of the loyalty benefit exchange, applying, by the transaction handler of the computing apparatus, the benefit of the transaction handler to the payment transaction by reducing a transaction amount in the consumer account for the payment transaction during authorization of the payment transaction. REJECTIONS Claim 21 is rejected under 35 U.S.C. § 112(b) as indefinite for failing to particularly point out and distinctly claim the subject matter that the inventors regard as the invention. Claims 1, 7, 8, 17–19, and 21 are rejected under 35 U.S.C. § 101 as directed to a judicial exception without significantly more. ANALYSIS Indefiniteness Claim 21 depends from independent claim 1, and recites, in pertinent part, that the method further comprises “communicating, by the loyalty broker, with the second loyalty program computer system to exchange the second loyalty benefits for the payment currency to result in a second benefit of the transaction handler according to the first exchange rate.” In rejecting claim 21 under 35 U.S.C. § 112(b), the Examiner takes the position that claim 21 is indefinite because “the second loyalty program computer system” lacks antecedent basis (Final Act. 2). Although the term “the second loyalty program computer system” may lack explicit antecedent basis, we agree with Appellant that a person of ordinary skill in the art would understand what is claimed when claim 21 is read in light of the Specification (Appeal Br. 16), i.e., that the term refers to Appeal 2019-001870 Application 14/314,629 6 the loyalty program computer system of the second loyalty program provider. Therefore, we do not sustain the Examiner’s rejection of claim 21 under 35 U.S.C. § 112(b). See Energizer Holdings, Inc. v. Int’l Trade Comm’n, 435 F.3d 1366, 1370–71 (Fed. Cir. 2006) (“‘[T]he failure to provide explicit antecedent basis for terms does not always render a claim indefinite.’ . . . [D]espite the absence of explicit antecedent basis, ‘[i]f the scope of a claim would be reasonably ascertainable by those skilled in the art, then the claim is not indefinite.”’); Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1576 (Fed. Cir. 1986) (The test for definiteness under 35 U.S.C. § 112, second paragraph, now § 112(b), is whether “those skilled in the art would understand what is claimed when the claim is read in light of the specification.”). Patent-Ineligible Subject Matter Appellant argues the pending claims as a group (Appeal Br. 16–29). We select independent claim 1 as representative. The remaining claims stand or fall with claim 1. See 37 C.F.R. § 41.37(c)(1)(iv). Under 35 U.S.C. § 101, an invention is patent eligible if it claims a “new and useful process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101 to include an implicit exception: “[l]aws of nature, natural phenomena, and abstract ideas” are not patentable. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014). 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 Appeal 2019-001870 Application 14/314,629 7 patent-eligible applications of those concepts.” Alice Corp., 573 U.S. at 217. The first step in that analysis is to “determine whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. If the claims are not directed to a patent-ineligible concept, e.g., 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 there are additional elements that “‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 566 U.S. at 79, 78). This is “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. at 217–18 (alteration in original). In rejecting the pending claims under 35 U.S.C. § 101, the Examiner determined that the claims are directed to “exchanging loyalty benefits for a different benefit and applying the different benefit to a payment transaction,” i.e., to an abstract idea similar to other concepts that the courts have held abstract, and that the claims do not include additional elements sufficient to amount to significantly more than the judicial exception itself (Final Act. 3– 8). After Appellant’s briefs were filed and the Examiner’s Answer mailed, the U.S. Patent and Trademark Office (the “USPTO”) published revised guidance for use by USPTO personnel in evaluating subject matter eligibility under 35 U.S.C. § 101. 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50, 57 (Jan. 7, 2019) (the “2019 Revised Guidance”). That guidance revised the USPTO’s examination procedure with respect to the first step of the Mayo/Alice framework by Appeal 2019-001870 Application 14/314,629 8 (1) “[p]roviding groupings of subject matter that [are] considered an abstract idea”; and (2) clarifying that a claim is not “directed to” a judicial exception if the judicial exception is integrated into a practical application of that exception. Id. at 50. The 2019 Revised Guidance, by its terms, applies to all applications, and to all patents resulting from applications, filed before, on, or after January 7, 2019. Id.2,3 Step One of the Mayo/Alice Framework (2019 Revised Guidance, Step 2A) The first step in the Mayo/Alice framework, as mentioned above, is to determine whether the claims at issue are “directed to” a patent-ineligible concept, e.g., an abstract idea. Alice Corp., 573 U.S. at 217. This first step, as set forth in the 2019 Revised Guidance (i.e., Step 2A), is a two-prong test; in Step 2A, Prong One, we look to whether the claim recites a judicial exception, e.g., one of the following three groupings of abstract ideas: (1) mathematical concepts; (2) certain methods of organizing human activity, e.g., fundamental economic principles or practices, commercial or legal interactions; and (3) mental processes. 2019 Revised Guidance, 2 The 2019 Revised Guidance supersedes MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) § 2106.04(II) and also supersedes all versions of the USPTO’s “Eligibility Quick Reference Sheet Identifying Abstract Ideas.” See 2019 Revised Guidance, 84 Fed. Reg. at 51 (“Eligibility-related guidance issued prior to the Ninth Edition, R-08.2017, of the MPEP (published Jan. 2018) should not be relied upon.”). Accordingly, Appellant’s arguments challenging the sufficiency of the Examiner’s rejection will not be addressed to the extent those arguments are based on now superseded USPTO guidance. 3 The USPTO issued an update on October 17, 2019 (the “October 2019 Update: Subject Matter Eligibility,” available at https://www.uspto.gov/sites/ default/files/documents/peg_oct_2019_update.pdf) clarifying the 2019 Revised Guidance in response to public comments. Appeal 2019-001870 Application 14/314,629 9 84 Fed. Reg. at 54. If so, we next consider whether the claim includes additional elements, beyond the judicial exception, that “integrate the [judicial] exception into a practical application,” i.e., that 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 (“Step 2A, Prong Two”). Id. at 54–55. Only if the claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application do we conclude that the claim is “directed to” the judicial exception, e.g., an abstract idea. Id. We are not persuaded by Appellant’s arguments that the Examiner erred in determining that claim 1 is directed to an abstract idea (Appeal Br. 16–22). The Federal Circuit has explained that “the ‘directed to’ inquiry applies a stage-one filter to claims, considered in light of the specification, based on whether ‘their character as a whole is directed to excluded subject matter.’” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). It asks whether the focus of the claims is on a specific improvement in relevant technology or on a process that itself qualifies as an “abstract idea” for which computers are invoked merely as a tool. See id. at 1335–36. Here, it is clear from the Specification (including the claim language) that claim 1 focuses on an abstract idea, and not on any improvement to technology and/or a technical field. The Specification is titled “SYSTEMS AND METHODS TO PROCESS LOYALTY BENEFITS,” and states that the “present disclosure relate[s] to the processing of loyalty benefits, such as points, miles awarded in loyalty programs” (Spec. ¶ 3). The Specification describes, in the Appeal 2019-001870 Application 14/314,629 10 Background section, that “[m]illions of transactions occur daily through the use of payment cards, such as credit cards, debit cards, prepaid cards, etc.” (id. ¶ 12). In some cases, “a local community engaging in transactions desires to promote businesses that are located within a defined city or other local region” due in part to “a growing interest in promoting the consumption of locally-produced products” (id. ¶ 14). Yet, according to the Specification, “it continues to be difficult for a community to retain income that is earned locally by having or encouraging that income to be spent locally” (id.). Some communities “have experimented with the use of local currencies to accomplish this result,” but, the Specification describes that “the use of such currencies may raise legal issues and also may increase the risk of inducing localized inflation or deflation” (id.). The claimed invention is ostensibly intended to address this issue by enabling the exchange of loyalty benefits across different loyalty programs, operated by merchants participating, for example, in a loyalty coalition (Spec. ¶ 154). As such, a user who earns loyalty benefits based on transactions made with a first participating merchant may redeem those benefits during a transaction made with a different, second participating merchant (see, e.g., id. ¶¶ 36, 128–129, 155, 192–193). Consistent with this disclosure, claim 1 recites a method comprising: (1) providing a computing apparatus (having a transaction handler, a loyalty broker and a data warehouse coupled to the transaction handler, and a portal coupled to the data warehouse), and a user interface (presented via the portal of the computing apparatus) to receive user input registering a first loyalty program and a second loyalty program for association with account information of a consumer payment account of the user, i.e., Appeal 2019-001870 Application 14/314,629 11 providing a computing apparatus having: a transaction handler configured on an electronic payment processing network that connects separate computers, including: transaction terminals disposed at locations of merchants and configured to generate transactions of payments in the electronic payment processing network using information received at the transaction terminals, the information identifying accounts from which the payments are made; first computers controlling the accounts from which the payments are made in the electronic payment processing network; second computers controlling accounts of the merchants in which the payments are received in the electronic payment processing network; the transaction handler interconnecting the first computers and the second computers, a loyalty broker coupled with the transaction handler and configured to communicate with a plurality of loyalty program computer systems associated with a plurality of separate loyalty program providers outside the electronic payment processing network, a data warehouse coupled with the transaction handler, and a portal coupled with the data warehouse; providing a user interface presented via the portal to receive user input registering a first loyalty program and a second loyalty program for association with account information of a consumer payment account of a user, wherein: the loyalty broker is configured in communication with a first loyalty program computer system of a first loyalty program provider of the plurality of loyalty program computer systems outside the electronic payment processing network, the first loyalty program computer system controls first loyalty benefits earned by the user in the first loyalty program from the first loyalty program provider of the first loyalty program, and Appeal 2019-001870 Application 14/314,629 12 the loyalty broker is configured to communicate with the first loyalty program computer system to exchange the first loyalty benefits earned by the user in the first loyalty program for a benefit of the transaction handler in response to an instruction from the transaction handler (limitations (a) and (b)); (2) “storing . . . data associating the first loyalty program . . . with the account information, wherein the first loyalty program has a second exchange rate between the first loyalty benefits and a payment currency of the consumer payment account of the user” (limitation (c)); (3) storing a first exchange rate between loyalty benefits earned by the user in a second, different loyalty program and the payment currency of the user’s consumer payment account, i.e., storing, in the data warehouse of the computing apparatus, an offer identifying a first exchange rate between second loyalty benefits earned by the user in the second loyalty program of a second loyalty program provider and the payment currency of the consumer payment account of the user, wherein the first exchange rate identified in the offer is specified by the second loyalty program provider, wherein the second loyalty program provider is a merchant separate from the first loyalty program provider of the first loyalty program, and wherein the first exchange rate specified by the second loyalty program provider for the offer is different from the second exchange rate of the first loyalty program (limitation (d)); (4) receiving an authorization communication identifying a user transaction at the second loyalty program merchant provider, i.e., receiving, in the transaction handler of the computing apparatus in the electronic payment processing network, an authorization communication identifying a payment transaction, made in the consumer payment account using the account information, between one of the first computers controlling the consumer payment account and one of the second computers Appeal 2019-001870 Application 14/314,629 13 controlling a merchant account of the second loyalty program provider (limitation (e)); (5) redeeming first loyalty points earned by the user for payment currency in response to the authorization communication, i.e., in response to the authorization communication received by the transaction handler in the electronic payment processing network, instructing, by the transaction handler based on the data stored in the data warehouse associating the first loyalty program having the first loyalty benefits earned by the user with the account information, the loyalty broker to perform a loyalty benefit exchange, and in response to the transaction handler instructing the loyalty broker to perform the loyalty benefit exchange, communicating, by the loyalty broker, with the first loyalty program computer system to exchange the first loyalty benefits for the payment currency to result in the benefit of the transaction handler according to the second exchange rate (limitations (f) and (g)); and (6) reducing the transaction amount based on the first loyalty point redemption, i.e., “based on a result of the loyalty benefit exchange, applying, by the transaction handler of the computing apparatus, the benefit of the transaction handler to the payment transaction by reducing a transaction amount in the consumer account for the payment transaction during authorization of the payment transaction” (limitation (h)). We agree with the Examiner that, these limitations, when given their broadest reasonable interpretation, recite exchanging loyalty benefits earned at a first merchant for a different benefit (e.g., currency), and applying the different benefit to a payment transaction at a second, different merchant. Simply put, claim 1 recites a commercial interaction, i.e., marketing or sales activities, which is a method of organizing human activity and, therefore, an abstract idea. See 2019 Revised Guidance, 84 Fed. Reg. at 52. See also Loyalty Conversion Sys. Corp. v. Am. Airlines, Inc., 66 F. Supp. 3d 829, Appeal 2019-001870 Application 14/314,629 14 837–40 (E.D. Tex. 2014) (Bryson, J.) (holding that the claims at issue were directed to the abstract idea of “conver[ting] . . . loyalty award points of one vendor into loyalty award points of another,” i.e., “currency exchange”); Kroy IP Holdings, LLC v. Safeway, Inc., 107 F. Supp. 3d 677, 681, 691 (E.D. Tex. 2015) (Bryson, J.), aff’d, 639 F. App’x 637 (Fed. Cir. 2016) (holding that claims directed to “conducting in[c]entive programs and fulfilling the awards in those programs,” were “indistinguishable in principle from the kinds of financial or business operations that were at issue in Bilski and Alice”). Having concluded that claim 1 recites a judicial exception, i.e., an abstract idea (Step 2A, Prong One), we next consider whether the claim recites additional elements that integrate the judicial exception into a practical application (Step 2A, Prong Two). The only additional elements recited in claim 1, beyond the abstract idea, are “a computing apparatus,” including “a transaction handler,” “a loyalty broker,” “a data warehouse,” and “a portal”; “a user interface presented via the portal”; “transaction terminals”; “first computers”; “second computers”; “a first loyalty program computer system”; and an “electronic payment processing network” — elements that, as the Examiner observed, are recited at a high level of generality, i.e., as generic computer components performing generic computer functions (Final Act. 5–6; see also Spec. ¶¶ 127–128, 140, 150–153, 421–433). We find no indication in the Specification that the operations recited in claim 1 require any specialized computer hardware or other inventive computer components, i.e., a particular machine, invoke any allegedly inventive programming, or that the claimed invention is implemented using other than generic computer Appeal 2019-001870 Application 14/314,629 15 components to perform generic computer functions. See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (“[A]fter Alice, there can remain no doubt: recitation of generic computer limitations does not make an otherwise ineligible claim patent-eligible.”). We also find no indication in the Specification that the claimed invention effects a transformation or reduction of a particular article to a different state or thing. Nor do we find anything of record that attributes an improvement in technology and/or a technical field to the claimed invention or that otherwise indicates that the claimed invention integrates the abstract idea into a “practical application,” as that phrase is used in the 2019 Revised Guidance.4 Appellant argues that the present claims are not directed to an abstract idea, but instead to “an improved system and method of processing loyalty benefits during authorization of a payment transaction,” and, therefore, “clearly directed to technological improvements in the specific field of processing loyalty benefits” (Appeal Br. 17). Appellant, thus, asserts that in contrast to existing methods for processing loyalty benefits where, during authorization of a payment transaction, the transaction handler is in communication with the point-of-sale device of a first merchant loyalty computer system, such that benefits earned through the first merchant 4 The 2019 Revised Guidance references MPEP § 2106.05(a)–(c) and (e) in describing the considerations that are indicative that an additional element or combination of elements integrates the judicial exception, e.g., the abstract idea, into a practical application. 2019 Revised Guidance, 84 Fed. Reg. at 55. If the recited judicial exception is integrated into a practical application, as determined under one or more of these MPEP sections, the claim is not “directed to” the judicial exception. Appeal 2019-001870 Application 14/314,629 16 loyalty program can be redeemed and applied to a purchase transaction with that first merchant, the claimed invention provides “an improved arrangement for processing loyalty benefits . . . by utilizing a loyalty broker to enable communication between separate merchant loyalty program computer systems” (id. at 18–19). Appellant maintains that “[t]his enhancement and new system architecture improves existing methods for processing loyalty benefits by enhancing the flexibility in how a user’s loyalty benefits may be redeemed,” i.e., by providing enhanced consumer control over the redemption of loyalty benefits and “previously unavailable flexibility for the user with respect to redeeming . . . earned loyalty benefits conferred from separate merchants” (id. at 19–20; see also Reply Br. 2–3). But, we are not persuaded that enhancing user flexibility and/or control in redeeming loyalty benefits is a technological improvement, as opposed to an improvement in the abstract idea of processing the exchange of loyalty benefits, where, as here, there is no indication of record that the operations recited in claim 1 require any specialized computer hardware or other inventive computer components, invoke any assertedly inventive programming, or that the claimed invention is implemented using other than generic computer components as tools operating in their normal, routine, and ordinary capacity. See SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1170 (Fed. Cir. 2018) (“[P]atent law does not protect such claims[, i.e., claims to an asserted advance in the realm of abstract ideas], without more, no matter how groundbreaking the advance.”). We also are not persuaded of Examiner error to the extent Appellant maintains that claim 1 is patent eligible because the claim does not seek to tie up any abstract idea (Appeal Br. 21–22). Although the Supreme Court Appeal 2019-001870 Application 14/314,629 17 has described “the concern that drives [the exclusion of abstract ideas from patent-eligible subject matter] as one of pre-emption,” Alice Corp., 573 U.S. at 216, characterizing preemption as a driving concern for patent eligibility is not the same as characterizing preemption as the sole test for patent eligibility. “The Supreme Court has made clear that the principle of preemption is the basis for the judicial exceptions to patentability” and “[f]or this reason, questions on preemption are inherent in and resolved by the § 101 analysis.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (citing Alice Corp., 573 U.S. at 216). “[P]reemption may signal patent ineligible subject matter, [but] the absence of complete preemption does not demonstrate patent eligibility.” Id. We conclude, for the reasons outlined above, that claim 1 recites a method of organizing human activity, i.e., an abstract idea, and that the additional elements recited in the claim are no more than generic computer components used as tools to perform the recited abstract idea. As such, they do not integrate the abstract idea into a practical application. See Alice Corp., 573 U.S. at 223–24 (“[W]holly generic computer implementation is not generally the sort of ‘additional featur[e]’ that provides any ‘practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.’” (quoting Mayo, 566 U.S. at 77)). Accordingly, we agree with the Examiner that claim 1 is directed to an abstract idea. Step Two of the Mayo/Alice Framework (2019 Revised Guidance, Step 2B) Having determined under step one of the Mayo/Alice framework that claim 1 is directed to an abstract idea, we next consider under Step 2B of the 2019 Revised Guidance, the second step of the Mayo/Alice framework, Appeal 2019-001870 Application 14/314,629 18 whether claim 1 includes additional elements or a combination of elements that provides an “inventive concept,” i.e., whether the additional elements amount to “significantly more” than the judicial exception itself. 2019 Revised Guidance, 84 Fed. Reg. at 56. Appellant attempts to draw an analogy between the present claims and those in BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016), citing the Federal Circuit’s holding, that an inventive concept can be found in the non-conventional and non-generic arrangement of known conventional pieces (Appeal Br. 22–24; see also Reply Br. 5–6). Yet, we can find no parallel between claim 1 and the claims at issue in BASCOM. There, the Federal Circuit determined that the claims were directed to a technology-based solution to filter Internet content that overcame existing problems with other Internet filtering systems by taking a known filtering solution — i.e., a “one-size-fits-all” filter at an Internet Service Provider (“ISP”) — and making it more dynamic and efficient by providing individualized filtering at the ISP. BASCOM, 827 F.3d at 1351. The court, thus, held that the second step of the Mayo/Alice framework was satisfied because the claimed invention “represents a ‘software-based invention[ ] that improve[s] the performance of the computer system itself.’” Id. Appellant maintains here that, as in BASCOM, the claims recite a specific arrangement of components and a specific interaction between the configuration of these components, i.e., “a loyalty broker coupled with the transaction handler and configured to communicate with a plurality of loyalty program computer systems associated with a plurality of separate loyalty program providers outside the electronic payment processing Appeal 2019-001870 Application 14/314,629 19 network,” that is both non-conventional and non-generic (Appeal Br. 23). And Appellant argues that this “non-conventional arrangement” allows a user to flexibly redeem earned reward benefits across separate merchant reward programs (id.). But, unlike the filtering system improvements in BASCOM that added significantly more to the abstract idea by improving the performance of the computer system itself, the claimed invention here merely uses generic computing components to implement an abstract idea, i.e., processing loyalty reward benefits. Appellant takes the further position that claim 1 is patent eligible because none of the claim features has been shown to be conventional, alone or in combination (Appeal Br. 23–24), i.e., that the Office has not established that “each element and combination of elements” recited in the claim is well-understood or conventional (id. at 25–29) (emphasis omitted). But, that argument is not persuasive at least because “the relevant inquiry [under step two of the Mayo/Alice framework (i.e., step 2B)] is not whether the claimed invention as a whole is unconventional or non-routine.” BSG Tech LLC v. BuySeasons, Inc., 899 F.3d 1281, 1290 (Fed. Cir. 2018). Instead, the question is whether the claim includes additional elements, i.e., elements other than the abstract idea itself, that “‘transform the nature of the claim’ into a patent-eligible application.” Alice Corp., 573 U.S. at 217 (quoting Mayo, 566 U.S. at 78). See also Mayo, 566 U.S. at 72–73 (requiring that “a process that focuses upon the use of a natural law also contain other elements or a combination of elements, sometimes referred to as an ‘inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself” (emphasis added)). Appeal 2019-001870 Application 14/314,629 20 The Examiner determined here, and we agree, that the only claim elements beyond the abstract idea are “a computing apparatus,” including “a transaction handler,” “a loyalty broker,” “a data warehouse,” and “a portal”; “transaction terminals”; “first computers”; “second computers”; “a first loyalty program computer system”; and an “electronic payment processing network,” i.e., generic computer components used to perform generic computer functions (Final Act. 5–6) — a determination amply supported by, and fully consistent with the Specification (see, e.g., Spec. ¶¶ 127–128, 140, 150–153, 421–433).5 Appellant cannot reasonably contend, nor does Appellant, that there is inadequate factual support for the Examiner’s finding that the operation of these components is well-understood, routine, or conventional, where, as here, there is nothing in the Specification to indicate that the operations recited in claim 1 require any specialized hardware or inventive computer components or that the claimed invention is implemented using other than a generic computer component to perform generic computer functions, e.g., receiving, storing, and processing information. Indeed, the Federal Circuit, in accordance with Alice, has “repeatedly recognized the absence of a genuine dispute as to eligibility” 5 The Office’s April 19, 2018 Memorandum to the Examining Corps from Deputy Commissioner for Patent Examination Policy, Robert W. Bahr, entitled, Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.), available at https://www.uspto.gov/sites/default/files/documents/ memo-berkheimer-20180419.PDF, expressly directs that an examiner may support the position that an additional element (or combination of elements) is well-understood, routine or conventional with “[a] citation to an express statement in the specification . . . that demonstrates the well-understood, routine, conventional nature of the additional element(s)” (id. at 3). Appeal 2019-001870 Application 14/314,629 21 where claims have been defended as involving an inventive concept based “merely on the idea of using existing computers or the Internet to carry out conventional processes, with no alteration of computer functionality.” Berkheimer v. HP Inc., 890 F.3d 1369, 1373 (Fed. Cir. 2018) (Moore, J., concurring); see also BSG Tech LLC, 899 F.3d at 1291 (“BSG Tech does not argue that other, non-abstract features of the claimed inventions, alone or in combination, are not well-understood, routine and conventional database structures and activities. Accordingly, the district court did not err in determining that the asserted claims lack an inventive concept.”). Appellant also misapprehends the controlling precedent to the extent Appellant maintains that claim 1 is patent eligible because “the arrangement and combination of claim elements is non-obvious over the prior art so it could not possibly be conventional” (Appeal Br. 25). Neither a finding of novelty nor a non-obviousness determination automatically leads to the conclusion that the claimed subject matter is patent eligible. Although the second step in the Mayo/Alice framework is termed a search for an “inventive concept,” the analysis is not an evaluation of novelty or non- obviousness, but rather, a search for “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.’” Alice Corp., 573 U.S. at 217–18 (citation omitted). “Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the § 101 inquiry.” Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013). A novel and non-obvious claim directed to a purely abstract idea is, nonetheless, patent ineligible. See Mayo, 566 U.S. at 90; see also Diamond v. Diehr, 450 U.S. 175, 188–89 (1981) (“The ‘novelty’ of any Appeal 2019-001870 Application 14/314,629 22 element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the § 101 categories of possibly patentable subject matter.”). We are not persuaded, on the present record, that the Examiner erred in rejecting independent claim 1 under 35 U.S.C. § 101. Therefore, we sustain the Examiner’s rejection of claim 1, and claims 7, 8, 17–19, and 21, which fall with claim 1. CONCLUSION In summary: Claims Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 21 112(b) Indefiniteness 21 1, 7, 8, 17– 19, 21 101 Eligibility 1, 7, 8, 17– 19, 21 Overall Outcome 1, 7, 8, 17– 19, 21 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. § 1.136(a)(1)(iv). AFFIRMED Copy with citationCopy as parenthetical citation