Ayman Hammad et al.

Patent Trials and Appeals Board

Sep 2, 2020

13338108 - (D) (P.T.A.B. Sep. 2, 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.
13/338,108 12/27/2011 Ayman Hammad 79900-823691(88700US) 8485
66945 7590 09/02/2020
KILPATRICK TOWNSEND & STOCKTON LLP/VISA
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
EXAMINER
GREGG, MARY M
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
09/02/2020 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):
KTSDocketing2@kilpatrick.foundationip.com
ipefiling@kilpatricktownsend.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte AYMAN HAMMAD and PATRICK L. FAITH
____________

Appeal 2019-006187
Application 13/338,108
Technology Center 3600
____________

Before MURRIEL E. CRAWFORD, ANTON W. FETTING, and
NINA L. MEDLOCK, Administrative Patent Judges.

CRAWFORD, Administrative Patent Judge.

DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant1 seeks our review under 35 U.S.C. § 134(a) of the
Examiner’s final rejection of claims 1, 2, 5–9, 11, 12, 14, 15, 17–21, 23, 24,
26, and 28–33. We have jurisdiction under 35 U.S.C. § 6(b).

SUMMARY OF DECISION
We REVERSE.
THE INVENTION
Appellant claims a method and system for conducting a mixed mode
financial transaction. (Spec. ¶ 5, Title).

1 We use the word Appellant to refer to “applicant” as defined in 37 C.F.R.
§ 1.42(a). Appellant identifies the real party in interest as Visa International
Service Association. Appeal Br. 3.
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Application 13/338,108
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Claim 1 is representative of the subject matter on appeal.
1. A method of conducting a mixed mode financial transaction
between a first device and a second device, the method comprising:

initiating, with the first device, the financial transaction using a first
communication mode between the first device and the second device,
wherein the first device and the second device are proximate to each other
and are in a merchant store;

and wherein the first device is a consumer device and the second
device is a merchant device;

exchanging data between the consumer device and the merchant
device using the first communication mode, wherein a unique value is
generated based on the data exchanged between the consumer device and the
merchant device, wherein the data exchanged includes a consumer device
identifier associated with the consumer device and a merchant device
identifier associated with the merchant device;

authenticating the merchant device using the consumer device;

based on authenticating the merchant device, sending, by the
consumer device, a transceiver activate message to instruct the merchant
device to activate a transceiver associated with the merchant device to be
used for a second communication mode, wherein the first communication
mode and the second communication mode are different modes of
communication;

initiating the second communication mode that is dependent on the
data exchanged in the first communication mode and the unique value
generated based on the data exchanged using the first communication mode,
the unique value being a session key or a security token that secures the data
exchanged in the second communication mode between the consumer device
and the merchant device; and

continuing the transaction by initiating, by the consumer device with
the merchant device, an authorization request message comprising a payor
PAN to request authorization of the transaction, wherein the consumer
device and the merchant device are proximate to each other when
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communicating using the second communication mode, wherein the
consumer and merchant devices are proximate when the first and second
devices are within 10 meters of each other.

THE REJECTIONS
Claims 1, 2, 5–9, 11, 12, 14, 15, 17–21, 23, 24, 26, and 28–33 are
rejected under 35 U.S.C. § 101 as directed to a judicial exception without
significantly more.
Claims 1, 5–7, 9, 24, 26, and 29, 30, and 33 are rejected under pre-
AIA 35 U.S.C. § 103(a) as being unpatentable over US Pub No.
2009/0013087 Al; published Jan. 8, 2009 by Lorch et al. (Lorch) and further
in view of US Pub No. 2010/0125508 Al; published May 20, 2010 by Smith
(Smith).
Claims 2 and 31 are rejected under pre-AIA 35 U.S.C. § 103(a) as
being unpatentable over Lorch and further in view of Smith as applied to
Claim 1 above, and further in view of US 2007/0188323 A1; published
Aug. 16, 2007 by Sinclair et al. (Sinclair).
Claim 8 is rejected under pre-AIA 35 U.S.C. § 103(a) as being
unpatentable over Lorch and further in view of Smith as applied to Claim 7
above, and further in view of US Pub. No. 2010/0303230 Al; published
Dec. 2, 2010 by Taveau et al. (Taveau).
Claim 21 is rejected under pre-AIA 35 U.S.C. § 103(a) as being
unpatentable over Lorch and further in view of Smith as applied to Claim 1
above, and further in view of US Pub. No. 2012/0040717 Al; published
Feb. 16, 2012 by Levy et al. (Levy).
Claim 28 is rejected under pre-AIA 35 U.S.C. § 103(a) as being
unpatentable over Lorch and further in view of Smith as applied to Claim 1
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above, and further in view of US Pub. No. 2003/0005118 Al; published
Jan. 2, 2003 by Williams et al. (Williams).
Claims 11, 17, and 23 are rejected under pre-AIA 35 U.S.C. § 103(a)
as being unpatentable over Lorch and further in view of Smith.
Claims 12, 15, and 32 are rejected under pre-AIA 35 U.S.C. § 103(a)
as being unpatentable over Lorch and further in view of Smith as applied to
Claim 11 above, and further in view of Sinclair.
Claim 14 is rejected under pre-AIA 35 U.S.C. § 103(a) as being
unpatentable over Lorch and further in view of Smith as applied to Claim 11
above, and further in view of US 7,167,710 B2; issued Jan. 23, 2007 by
Thakkar et al. (Thakkar).
Claims 18 and 19 are rejected under pre-AIA 35 U.S.C. § 103(a) as
being unpatentable over Lorch and further in view of Smith as applied to
Claim 11 above, and further in view of Taveau.
Claim 20 is rejected under pre-AIA 35 U.S.C. § 103(a) as being
unpatentable over Lorch and further in view of Smith, Sinclair as applied to
Claim 15 above, and further in view of US Pub. No. 2004/0132461 A1;
published July 8, 2004 Duncan et al. (Duncan).

ANALYSIS
35 U.S.C. § 101 REJECTION
We will not sustain the rejection of claims 1, 2, 5–9, 11, 12, 14, 15,
17–21, 23, 24, 26, and 28–33 under 35 U.S.C. § 101.
The Supreme Court
set forth a framework for distinguishing patents that claim laws
of nature, natural phenomena, and abstract ideas from those that
claim patent-eligible applications of those concepts. First, . . .
determine whether the claims at issue are directed to one of
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those patent-ineligible concepts. . . . If so, . . . then ask, “[w]hat
else is there in the claims before us?” . . . To answer that
question, . . . consider the elements of each claim both
individually and “as an ordered combination” to determine
whether the additional elements “transform the nature of the
claim” into a patent-eligible application. . . . [The Court]
described step two of this analysis as 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.”

Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217–218 (citing Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72–73 (2012))
(citations omitted).
To perform this test, we must first determine whether the claims at
issue are directed to a patent-ineligible concept. The Federal Circuit has
explained that “the ‘directed to’ inquiry applies a stage-one filter to claims,
considered in light of the [S]pecification, based on whether ‘their character
as a whole is directed to excluded subject matter.’” See Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet
Patents Corp., 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.
In so doing, we apply a “directed to” two prong test: 1) evaluate
whether the claim recites a judicial exception, and 2) if the claim recites a
judicial exception, evaluate whether the judicial exception is integrated into
a practical application. 2019 Revised Patent Subject Matter Eligibility
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Guidance, 84 Fed. Reg. 50, 57 (Jan. 7, 2019).2
The Examiner determines that the claims are directed to a method of
conducting a financial transaction by exchanging data between first and
second devices using two communication modes, which the Examiner
determines to be a fundamental economic practice. (Final Act. 6). The
Examiner also determines that the claims are directed to the basic concept of
receiving, processing, and transmitting data, which like collecting,
recognizing, and storing data has long been performed by humans. The
Examiner finds the claims do not include additional elements that are
sufficient to amount to significantly more than the judicial exception
because the additional elements, when considered both individually and as
an ordered combination, do not amount to significantly more than the
abstract idea. (Final Act. 8–9).
Claim 1 recites “based on authenticating the merchant device,
sending, by the consumer device a transceiver activate message to instruct
the merchant device to activate a transceiver.”
Appellant argues that the subject matter recited in claim 1 is an
improvement to technology. Specifically, Appellant argues that by only
activating the transceiver when necessary, the claimed method prevents
unnecessary signal transmission and interference, improves battery life, and
reduces power consumption. (Appeal Br. 16).
This improvement to technology is disclosed in the Specification:
In some applications, it is advantageous for devices to transmit
and receive signals only when necessary. For example, it may

2 The USPTO issued an update on October 17, 2019 (the “October 2019
Update”), 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.
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be beneficial to only power on the wireless transceiver during a
transaction and immediately before or after a transaction. In one
embodiment, an instruction to activate the merchant device’s
wireless transceiver 5 may be received and/or generated. For
example, a merchant device may be a POS terminal with NFC.
The POS terminal has a sleep function and only transmit when
awake (i.e., when not in sleep mode). The POS terminal may
exit sleep mode when a consumer device “bumps” the POS
terminal. In one embodiment, the physical interaction can be
the initiating act of a consumer device waking up the POS
terminal. Upon an initiating act, the POS terminal may turn on
its NFC transceiver, WiFi transceiver, or Bluetooth transceiver
and start a dialogue between the consumer device and the
merchant device.

(Spec. ¶ 91).

We agree with the Appellant. In our view, this improvement is recited
in the claims and is disclosed in the Specification. We fail to see, and the
Examiner has not explained, how the step of sending, by the consumer
device a transceiver activate message to instruct the merchant device to
activate a transceiver based on authenticating the merchant device could
practically be performed in the human mind. See the October 2019 Update
at 7 (“Claims do not recite a mental process when they do not contain
limitations that can practically be performed in the human mind, for instance
when the human mind is not equipped to perform the claim limitations.”).
As such, we will not sustain the rejection of claim 1 under 35 U.S.C. § 101.
We will also not sustain this rejection as it is directed to the remaining
claims because each of the remaining claims requires a transceiver activate
message being sent based on authentication of the merchant device.
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35 U.S.C. § 103(a) REJECTIONS
We will not sustain the rejection of claim 1 under 35 U.S.C. §103(a)
because we agree with Appellant that the prior art does not disclose “based
on authenticating the merchant device, sending, by consumer device a
transceiver activate message to . . . activate a transceiver” as required by
claim 1. The Examiner relies on Lorch (¶¶ 16, 90, and 93-94) for teaching
the transceiver activate message. (Final Act. 18; Ans. 9). Appellant argues
that there is nothing in these paragraphs about activating a transceiver. The
Examiner has not explained how these paragraphs in Lorch disclose the
transceiver activate message. Paragraph 16 describes a mixed operation
mode which permits communication between users. Paragraphs 90, and 93–
94 discuss service activation messages but do not relate to activating a
transceiver.
In view of the foregoing, we will not sustain the Examiner’s rejection
under 35 U.S.C. §103(a) of claim 1. We will also not sustain the rejections
as directed to the remaining claims because each of these claims requires the
transceiver activate message and each of the rejections relies on Lorch for
teaching this subject matter.

CONCLUSIONS OF LAW
We conclude the Examiner did err in rejecting claims 1, 2, 5–9, 11,
12, 14, 15, 17–21, 23, 24, 26, and 28–33 under 35 U.S.C. § 101.
We conclude the Examiner did err in rejecting claims 1, 2, 5–9, 11,
12, 14, 15, 17–21, 23, 24, 26, and 28–33 under 35 U.S.C. §103(a)

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CONCLUSION
In summary:

Claims
Rejected
35
U.S.C.
§ References Affirmed Reversed
1, 2, 5–9, 11,
12, 14, 15, 17–
21, 23, 24, 26,
28–33
101 1, 2, 5–9, 11,
12, 14, 15, 17–
21, 23, 24, 26,
28–33
1, 5–7, 9, 24,
26, 29, 30, 33
103 Lorch, Smith 1, 5–7, 9, 24,
26, 29, 30, 33
2, 31 103 Lorch, Smith and
Sinclear
2, 31
8 103 Lorch, Smith, and
Taveau
8
21 103 Lorch, Smith, and Levy 21
28 103 Lorch, Smith and
Williams
28
11, 17, 23 103 Lorch and Smith 11, 17, 23
12, 15, 32 103 Lorch, Smith and
Sinclear
12, 15, 32
14 Lorch, Smith and
Thakkar
14
18, 19 103 Lorch, Smith and
Taveau
18, 19
20 Smith, Sinclear and
Duncan
20

REVERSED