Walmart Apollo, LLC

Patent Trials and Appeals Board

Jun 11, 2020

13632491 - (D) (P.T.A.B. Jun. 11, 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.
13/632,491 10/01/2012 Jason Marshall 114826-72402 (065US01) 2475
118627 7590 06/11/2020
McCarter & English, LLP / Walmart Apollo, LLC
265 Franklin Street
Boston, MA 02110
EXAMINER
WONG, ERIC TAK WAI
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
06/11/2020 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):
docket@mccarter.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte JASON MARSHALL and KARA KAZAZEAN
____________

Appeal 2019-003431
Application 13/632,491
Technology Center 3600
____________

Before CAROLYN D. THOMAS, JAMES B. ARPIN, and
IFTIKHAR AHMED, Administrative Patent Judges.

THOMAS, Administrative Patent Judge.

DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant 0F1 appeals from the
Examiner’s decision to reject claims 1–7, 10–17, and 20. Claims 8, 9, 18,
and 19 are canceled. See Claim Appendix. We have jurisdiction over the
appeal under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42. Appellant identifies the real party-in-interest as Walmart
Apollo, LLC. Appeal Br. 3.
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The present invention relates generally to a universal substantiation
system that allows or prevents a consumer to purchase products or services
using a payment or identification device, such a gift card. See Abstract.
Independent claim 11, reproduced below, is representative of the
appealed claims:
11. A method comprising:
transmitting, via a communications module including
transceivers[,] and storing a graphical user interface, and display the
graphical user interface (GUI) to a third party payer/partner system;
receiving, via a communications module, input
associated payer/partner identification information from a third party
payer/partner system over a communication network, the
payer/partner information being stored in a first database of the
payer/partner module for association with a plurality of gift cards to
be created;
creating, via a computing system including a server and a
database, the server being operatively coupled to the communications
module, a payer/partner gift card substantiation account based at least
in part on the payer/partner identification information received from
the third party payer/partner system;
receiving, via the computing system, programming
information from the third party payer/partner system over the
communication network to create one or more program profiles for
the payer/partner substantiation account, the one or more program
profiles being stored in a database of the programming module and
used for creation of the plurality of gift cards;
receiving, via the computing system, the one or more
rules or conditions from the third party payer/partner system for the
one or more program profiles and to be linked to the plurality of gift
cards;
causing, via the computing system, the creation of the
plurality of gift cards using the programming information received
from the third party payer/partner system, each of the plurality of gift
cards created by the payment module including a unique, randomly
generated identification number, wherein the one or more rules or
conditions received from the third party payer/partner system are
linked to the plurality of gift cards,
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accessing, via the third party payer/partner system, the
computing system, using the GUI;
specifying, via the third party payer/partner system, an
operation of a plurality of POS terminals using the rules/conditions
linked to the plurality of gift cards such that a response of the plurality
of POS terminals to reading the unique, random generated identifier
of each of the plurality of gift cards is configurable by the third party
payer/partner system and executed exclusively by a point-of-sale
(POS) system, wherein the POS system includes at least one server
and the plurality of POS terminals,
reading, via at least one POS terminal, the unique,
random generated identifier of at least one of the plurality of gift
cards,
accessing, via the at least one POS terminal, the
rules/condition linked to the plurality of gift cards in the
rules/condition module;
automatically performing, via the at least one POS
terminal an operation specified by the rules/condition linked to the
plurality of gift cards; and
automatically controlling, via the third party payer
system, storage of the computing system to store data associated with
the operation performed by the at least one POS terminal and a
duration of storage of the data in the storage of the computing system.

Appellant appeals the following rejection:
Claims 1–7, 10–17, and 20 are rejected under 35 U.S.C. § 101
because the claimed invention is directed to patent-ineligible subject matter.
Final Act. 2–8.
We review the appealed rejections for error based upon the issues
identified by Appellant, and in light of the arguments and evidence produced
thereon. Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010) (precedential).

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ANALYSIS
Rejection under § 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.
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 Supreme Court’s two-step 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 the 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.”). For example, 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 mental processes (Gottschalk v. Benson, 409 U.S. 63,
69 (1972)).
The U.S. Patent and Trademark Office (USPTO) published revised
guidance on the application of 35 U.S.C. § 101. USPTO’s 2019 Revised
Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
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(“Revised Guidance”), updated by USPTO, October 2019 Update: Subject
Matter Eligibility (available at https://www.uspto.gov/sites/default/files/
documents/peg_oct_2019_update.pdf) (jointly referred to as
“Revised Guidance”); see also October 2019 Patent Eligibility Guidance
Update, 84 Fed. Reg. 55942 (Oct. 18, 2019) (notifying the public of the
availability of the October update).
Under the Revised Guidance “Step 2A,” the Office first looks 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); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a)–(c), (e)–(h)). 84 Fed. Reg. at
51–52, 55.
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, does the Office then
(pursuant to the Revised Guidance “Step 2B”) look 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. 84 Fed. Reg. at 56.
Step 2A, Prong 1 (Does the Claim Recite a Judicial Exception?)
With respect to independent method claim 11, and similarly, system
claim 1, the Examiner determines that the claims are directed to
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“substantiating payments using a payment device such as a gift card, which
is a fundamental economic practice” (Final Act. 3), which we agree with the
Examiner recites “certain method[s] of organizing human activity” (id.),
which is a type of abstract idea.
As noted in Appellant’s Specification, “some embodiments of the
present disclosure relate to the field of a universal substantiation system for
a merchant that may enable or prevent the consumers to purchase products
or services using a payment or identification device having predetermined
rules or conditions.” Spec. ¶ 1.
For example, claim 11 recites at least the following limitations:
(1) “receiving . . . input associated payer/partner identification information
from a third party payer/partner system . . . for association with a plurality of
gift cards to be created,” (2) “creating . . . a payer/partner gift card
substantiation account,” (3) “receiving . . . programming information from
the third party payer/partner system . . . to create one or more program
profiles . . . used for creation of the plurality of gift cards,” (4) “receiving . . .
the one or more rules or conditions . . . to be linked to the plurality of gift
cards,” (5) “causing . . . the creation of the plurality of gift cards using the
programming information,” (6) “reading . . . the unique, random generated
identifier of at least one of the plurality of gift cards,” (7) “accessing . . . the
rules/condition linked to the plurality of gift cards,” (8) “automatically
performing . . . an operation specified by the rules/condition linked to the
plurality of gift cards,” and (9) “automatically controlling . . . storage . . . to
store data associated with the operation performed . . . and a duration of
storage of the data.” These limitations, under their broadest reasonable
interpretation, recite a fundamental economic practice akin to hedging and
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mitigating risk because the limitations recite operations that would ordinarily
take place in a commercial environment. Alice, 573 U.S. at 219–20
(concluding that use of a third party to mediate settlement risk is a
“fundamental economic practice” and, thus, an abstract idea); id. (describing
the concept of risk hedging identified as an abstract idea in Bilski as “a
method of organizing human activity”); Bilski, 561 U.S. at 611–612
(concluding that hedging is a “fundamental economic practice” and therefore
an abstract idea); Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876
F.3d 1372, 1378–79 (Fed. Cir. 2017) (holding that concept of “local
processing of payments for remotely purchased goods” is a “fundamental
economic practice, which Alice made clear is, without more, outside the
patent system.”).
Appellant does not directly challenge whether the claims are directed
to an abstract idea, but instead makes arguments more directly related to
integrating the judicial exception into a practical application and whether
specific limitations are not well-understood, routine, and conventional
activity in the field. Such arguments will be address below.
At best, Appellant challenges the Examiner’s determinations on the
ground that the claims are “directed to . . . a retailer’s system . . . controlling
the storage of data associated with an operation performed by a POS
terminal in the retailer’s system.” Appeal Br. 7. Appellant further contends
that “[t]he system also allows the third party system to specify the duration
of time that the retailer’s system stores the data.” Id. However, we find
Appellant’s contentions fail to persuasively explain how the identified
claimed features are not themselves abstract concepts. Instead, we agree
with the Examiner (see Ans. 3) that it appears that Appellant is conceding
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that the claims recite an abstract concept related to economic practices, i.e.,
“Applicant submits that claim 1 (and claim 11) is directed to . . . a retailer’s
system . . . controlling the storage of data associated with an operation
performed by a POS terminal in the retailer’s system.” See Appeal Br. 7.
Therefore, for at least the aforementioned reasons, we agree with the
Examiner that claim 1 recites an abstract idea, which we conclude is a
fundamental economic practice, i.e., certain methods of organizing human
activity.
Step 2A—Prong 2 (integration into Practical Application) 1F2
Under the Revised Guidance, we now must determine if additional
elements in the claims integrate the judicial exception into a practical
application (see MPEP § 2106.05(a)–(c), (e)–(h)).
Here, we consider the claim as a whole, i.e., “the limitations
containing the judicial exception as well as the additional elements in the
claim besides the judicial exception . . . evaluated together to determine
whether the claim integrates the judicial exception into a practical
application.” October 2019 Patent Eligibility Guidance Update, at 12,
available at http://www.uspto.gov/PatentEligibility.
We discern no additional element (or combination of elements)
recited in Appellant’s representative claim 11 that integrates the judicial
exception into a practical application. See Revised Guidance, 84 Fed. Reg.

2 We acknowledge that some of the considerations at Step 2A, Prong 2,
properly may be evaluated under Step 2 of Alice/Mayo framework (Step 2B
of the Office revised guidance). For purposes of maintaining consistent
treatment within the Office, we evaluate them under Step 1 of Alice/Mayo
framework (Step 2A of the Office revised guidance). See Revised Guidance,
84 Fed. Reg. at 55 n.25, 27–32.

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at 54–55 (“Prong 2”). For example, Appellant’s claimed additional elements
(e.g., “POS system,” “server,” “POS terminals,” “communication module,”
“transceivers,” “GUI,” “third party payer/partner system,” “gift cards,”
“computing system,” “database,” and “communications module”) do not:
(1) improve the functioning of a computer or other technology; (2) are not
applied with any particular machine (except for a generic computer); (3) do
not effect a transformation of a particular article to a different state; and
(4) are not applied in any meaningful way beyond generally linking the use
of the judicial exception to a particular technological environment, such that
the claim as a whole is more than a drafting effort designed to monopolize
the exception. See MPEP §§ 2106.05(a)–(c), (e)–(h).
Although Appellant contends the claimed configuration “allows the
third party system to control the retailer’s system to store/or purge data
efficiently . . . via the unified GUI . . . [that] improves operational efficiency
of the system, while maintaining the security of the retailer’s system vis-a-vi
the third party system” (Appeal Br. 7–8), we agree with the Examiner that
“[i]n regards to improved security, the claims and specification do not
describe any specific improvement to security. . . . [merely] the use of the
computer product as a tool and does not focus on an improvement to the
computer product . . . itself.” Ans. 5–6. Furthermore, we agree with the
Examiner that the “[S]pecification similarly offer no specific improvement
to the efficiency of the underlying computer products. Again, the efficiency
comes from the use of the computer product as a tool.” Id. at 6. Also, we
agree with the Examiner that the Specification merely discloses “a data
retention policy [that] does not constitute an improvement to the functioning
of a computer, or to any other technology or technical field.” Id.
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For example, Appellant’s Specification merely discloses:
The point-of-sale (POS) module 220 may include a computer
processor or a database to process and store the transaction
information. For example, the point-of-sale (POS) module 220 may
identify products or services purchased at the point-of-sale (POS)
terminal 108. The point-of-sale (POS) module 220 may also identify
a time or a date of purchase at the point-of-sale (POS) terminal 108.
The point-of-sale (POS) module 220 may further identify an
identification information of the payment or identification device 112
used to purchase the products or services. The point-of-sale (POS)
module 220 may store the transaction information for a predetermined
and/or programmable period of time. For example, the point-of-sale
(POS) module 220 may store the transaction information for a
duration specified by the payer/partner 106.
Spec. ¶ 42.
In other words, Appellant fails to provide sufficient evidence to
support the aforementioned contentions. Mere attorney arguments and
conclusory statements that are unsupported by evidence are entitled to little
probative value. In re Geisler, 116 F.3d 1465, 1470 (Fed. Cir. 1997); see
also In re De Blauwe, 736 F.2d 699, 705 (Fed. Cir. 1984); 37 C.F.R. §
1.111(b); and Ex parte Belinne, No. 2009-004693, slip op. at 7-8 (BPAI
Aug. 10, 2009) (informative), available at
http://www.uspto.gov/web/offices/dcom/bpai/its/fd09004693.pdf.
Furthermore, we are not persuaded by Appellant’s contention that “the
claims of the present application are similar to the claims in Trading
Technologies International Inc. v. CQG, Inc.,” 675 F. App’x 1001 (Fed. Cir.
2017) (nonprecedential). Appeal Br. 10. For example, in Trading
Technologies, the U.S. Court of Appeals for the Federal Circuit accepted the
lower court’s findings, with respect to step two of the Alice/Mayo
framework, that the claims provided “an inventive concept that allows
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traders to more efficiently and accurately place trades using this electronic
trading system.” 675 F. App’x at 1004. In further discussing the lower
court’s opinion, the Federal Circuit noted “[t]he court distinguished this
system from the routine or conventional use of computers or the Internet,
and concluded that the specific structure and concordant functionality of the
graphical user interface are removed from abstract ideas, as compared to
conventional computer implementations of known procedures.” Id.
Accordingly, the distinguishing feature under Alice/Mayo framework step
two for the claims in Trading Technologies was an advance in efficiency as
compared to other computer processes. However, simply using a computer
to gain efficiency over a manual process is not sufficient to distinguish a
claim from a patent-ineligible abstract idea. See OIP Techs. Inc. v.
Amazon.com, INC., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (“[R]elying on a
computer to perform routine tasks more quickly or more accurately is
insufficient to render a claim patent eligible.”).
Thus, contrary to Appellant’s argument, the claims here are unlike
those in Trading Technologies because Appellant has not provided
persuasive evidence, i.e., in the Specification or elsewhere, or technical
reasoning that the method of claim 11 produces an advance in efficiency or
technological improvement to the technology underlying a universal
substantiation system.
Here, we 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 Enfish, LLC v. Microsoft Corp., 822 F.3d
1327, 1336 (Fed. Cir. 2016).
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We note that the present claims are also different from those at issue
in Enfish because the focus of the claims here is not on an improvement in
computers or upon an innovative way to use computers or other devices, but
is focused on an abstract idea that uses generic and routine equipment as
tools. That is, here, the arguably innovative technique of the appealed
claims is inextricably a part of the abstract idea of “substantiating payments
using a payment device such as a gift card.” Moreover, nothing in the
claims, understood in light of the Specification, requires anything other than
an off-the-shelf conventional GUI used for inputting and displaying data,
and a conventional computer for receiving and analyzing various data.
Therefore, unlike Enfish, the pending claims are not directed to
improvement in computer capabilities, but to the results of applying an
abstract idea.
Further, the additional elements do not integrate the judicial
exceptions described above into a patent-eligible practical application
because, for example, transmitting information for display on the graphical
user interface at a third party payer/partner system is no more than pre-
solution activity. Also, storage of the data associated with one POS terminal
represents nothing more than post-solution activity.
These pre- and post-solution steps—even when performed over a
computer network via communications between a point-of-sale system and a
third party payer/partner system —are insufficient to integrate the judicially
excepted steps into a practical application. See Alice, 573 U.S. at 224 (“use
of a computer to create electronic records, track multiple transactions, and
issue simultaneous instructions” is not an inventive concept).
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Although the claimed process does substantiate gift cards, the claimed
process fails to improve the functioning of either the POS system, the
communications module, or the computing system. Rather, such
components merely link the underlying abstract idea (i.e., fundamental
economic principles) to a particular technological environment.
For at least the reasons noted supra, we determine that claim 11
(1) recites a judicial exception and (2) does not integrate that exception into
a practical application. Thus, representative claim 11 is directed to the
aforementioned abstract idea.
Alice/Mayo—Step 2 (Inventive Concept)
Step 2B identified in the Revised Guidance
Turning to the second step of the Alice/Mayo framework inquiry, we
now look to whether claim 11 contains any “inventive concept” or adds
anything “significantly more” to transform the abstract concept into a patent-
eligible application. Alice, 573 U.S. at 216. As recognized by the Revised
Guidance, an “inventive concept” under Alice/Mayo framework step 2 can
be evaluated based on whether an additional element or combination of
elements:
(1) adds a specific limitation or combination of limitations that are
not well-understood, routine, conventional activity in the field,
which is indicative that an inventive concept may be present; or
(2) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception, which is indicative
that an inventive concept may not be present.
See Revised Guidance, 84 Fed. Reg. at 56; see MPEP § 2106.05(d).
We find no element or combination of elements recited in Appellant’s
claim 11 that contains any “inventive concept” or adds anything
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“significantly more” to transform the abstract concept into a patent-eligible
application. Appellant has not adequately explained how claim 11 is
performed such that it is not a routine and conventional function of a generic
computer. For instance, Appellant’s Specification merely describes the
components at a high level of generality. See Spec. ¶¶ 24–28. The Court in
Alice noted that “‘[s]imply appending conventional steps, specified at a high
level of generality,’ was not ‘enough’ [in Mayo] to supply an ‘inventive
concept.”’ Alice, 573 U.S. at 216 (quoting Mayo, 566 U.S. at 71).
Here, Appellant merely contends “[t]he claims as a whole are novel
and non-obvious over the prior art and solve a technical problem using a
technical solution.” Appeal Br. 8. However, a finding of novelty or non-
obviousness does not require 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, is 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, 573 U.S. at 216. “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 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.”).
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Because Appellant’s independent claim 11 is directed to a patent-
ineligible abstract concept, does not include additional elements that
integrate the judicial exception into a practical application, and does not add
a specific limitation beyond the judicial exception that is not “well-
understood, routine, and conventional,” we sustain the Examiner’s rejection
of the claims 1–7, 10–17, and 20 under 35 U.S.C. § 101 as being directed to
non-statutory subject matter in light of Alice, its’ progeny, and the Revised
Guidance.
CONCLUSION
The Examiner’s rejection of claims 1–7, 10–17, and 20 under
35 U.S.C. § 101 is affirmed.
In summary:
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–7, 10–17, 20 101 Eligibility 1–7, 10–17,
20

No period for taking any subsequent action in connection with this
appeal may be extended under 37 C.F.R. § 1.136(a).

AFFIRMED