Carroll, Pat et al.

Patent Trials and Appeals Board

Nov 16, 2020

2019003447 (P.T.A.B. Nov. 16, 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.
13/138,286 07/27/2011 Pat Carroll 4199.P0002US 5963
23474 7590 11/16/2020
FLYNN THIEL, P.C.
2026 RAMBLING ROAD
KALAMAZOO, MI 49008-1631
EXAMINER
OJIAKU, CHIKAODINAKA
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
11/16/2020 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@FLYNNTHIEL.COM
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte PAT CARROLL, JOHN PETERSEN, and
JONATHAN ALFORD
____________

Appeal 2019-003447
Application 13/138,286
Technology Center 3600
____________

Before ANTON W. FETTING, JAMES A. WORTH, and
ROBERT J. SILVERMAN, Administrative Patent Judges.

FETTING, Administrative Patent Judge.

DECISION ON APPEAL
STATEMENT OF THE CASE1
Pat Carroll, John Petersen, and Jonathan Alford (Appellant2) seeks
review under 35 U.S.C. § 134 of a final rejection of claims 1 and 40, the

1 Our decision will make reference to the Appellant’s Appeal Brief (“App.
Br.,” filed November 12, 2018) and Reply Brief (“Reply Br.,” filed March
28, 2019), and the Examiner’s Answer (“Ans.,” mailed February 1, 2019),
and Final Action (“Final Act.,” mailed March 22, 2018).
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only claims pending in the application on appeal. We have jurisdiction over
the appeal pursuant to 35 U.S.C. § 6(b).
The Appellant invented a way of determining the validity of a
requested transaction and preventing false-positives such as card present
false-positive prevention. Specification 1:4–7.
An understanding of the invention can be derived from a reading of
exemplary claim 1, which is reproduced below (bracketed matter and some
paragraphing added).
1. A method for authenticating a transaction comprising the
steps of:
[1] receiving a transaction request;
[2] processing the transaction request to determine if the
transaction request can be approved without further processing;
and
[3] allowing the transaction if a determination is made that the
transaction request can be approved without further processing;
[4] wherein if a determination is made that the transaction
request cannot be approved without further processing, the
method further comprises:
[4.1] receiving, by a computer or a server, data
identifying a region where the transaction is being
requested;
[4.2] determining,
with the computer or the server and from
Location Register (LR) data obtained from a
mobile network provider for a mobile
communication device associated with a
person requesting the transaction,

2 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 Validsoft
UK Limited (Appeal Br. 1).
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data identifying a region where the mobile
communication device is located;
[4.3] comparing,
with the computer or the server,
the data identifying the region where the
transaction is being requested
with
the data identifying the region where the mobile
communication device is located;
[4.4]
if the compared region data match,
allowing the transaction,
or,
if the compared region data do not match,
not allowing the transaction without further
verification of authenticity;
and
[4.5] controlling a means for carrying out a transaction,
a manner in which the means for carrying out the
transaction is controlled depending upon the result
of the comparison;
[5] wherein
the data identifying the region where the mobile
communication device is located comprises Mobile
Country Code data or data identifying a state or a city
and
the data identifying the region where the transaction is
being requested comprises transaction country data or
data identifying a state or a city.
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Claims 1 and 40 stand rejected under 35 U.S.C. § 101 as directed to a
judicial exception without significantly more.3
ISSUES
The issues of eligible subject matter turn primarily on whether the
claims recite more than abstract conceptual advice of results desired.
ANALYSIS
STEP 14
Claim 1, as a method claim, nominally recites one of the enumerated
categories of eligible subject matter in 35 U.S.C. § 101. The issue before us
is whether it is directed to a judicial exception without significantly more.
STEP 2
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
those patent-ineligible concepts. If so, we 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

3 Rejections under 35 U.S.C. § 112, second paragraph (Final Action 13), and
double patenting (Final Action 19), were not raised in the Answer. See
Interview Summary mailed September 19, 2018 and Appeal Brief 10
suggesting their withdrawal. These rejections are treated as withdrawn.
4 For continuity of analysis, we adopt the steps nomenclature from 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7,
2019) (“Revised Guidance”).
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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, 217–18 (2014) (citations
omitted) (citing Mayo Collaborative Servs. v. Prometheus Labs, Inc.,
566 U.S. 66 (2012)). To perform this test, we must first determine what the
claims are directed to. This begins by determining whether the claims recite
one of the judicial exceptions (a law of nature, a natural phenomenon, or an
abstract idea). Then, if the claims recite a judicial exception, determining
whether the claims at issue are directed to the recited judicial exception, or
whether the recited judicial exception is integrated into a practical
application of that exception, i.e., that the claims “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.” Revised Guidance, 84 Fed. Reg. at
54. If the claims are directed to a judicial exception, then finally
determining whether the claims provide an inventive concept because the
additional elements recited in the claims provide significantly more than the
recited judicial exception.
STEP 2A Prong 1
At a high level, and for our preliminary analysis, we note that method
claim 1 recites receiving request data, processing transaction data,
determining whether approval data is needed, allowing further transaction
processing, receiving region identification data, determining data
identification information, comparing information, allowing further
processing or not allowing further processing without verification data, and
carrying the transaction processing out depending on the comparison result.
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The final limitation is a data characterization and not a process step.
Determining and identifying data are rudimentary forms of analyzing data.
Allowing, not allowing, and carrying out processing are just that, data
processing. Thus, claim 1 recites receiving, analyzing, and processing data.
None of the limitations recites technological implementation details for any
of these steps, but instead recite only results desired by any and all possible
means.
From this we see that claim 1 does not recite the judicial exceptions of
either natural phenomena or laws of nature.
Under Supreme Court precedent, claims directed purely to an abstract
idea are patent in-eligible. As set forth in the Revised Guidance, which
extracts and synthesizes key concepts identified by the courts, abstract ideas
include (1) mathematical concepts5, (2) certain methods of organizing
human activity6, and (3) mental processes.7 Among those certain methods
of organizing human activity listed in the Revised Guidance are commercial
or legal interactions. Like those concepts, claim 1 recites the concept of
managing commercial fraud prevention. Specifically, claim 1 recites

5 See, e.g., Gottschalk v. Benson, 409 U.S. 63, 71–72 (1972); Bilski v.
Kappos, 561 U.S. 593, 611 (2010); Mackay Radio & Telegraph Co. v. Radio
Corp. of Am., 306 U.S. 86, 94 (1939); SAP America, Inc. v. InvestPic, LLC,
898 F.3d 1161, 1163 (Fed. Cir. 2018).
6 See, e.g., Bilski, 561 U.S. at 628; Alice, 573 U.S. at 219-20; Ultramercial,
Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014); Smart Sys.
Innovations, LLC v. Chicago Transit Auth., 873 F.3d 1364, 1383 (Fed. Cir.
2017); In re Marco Guldenaar Holding B.V., 911 F.3d 1157, 1160–61 (Fed.
Cir. 2018).
7 See, e.g., Benson, 409 U.S. at 67; CyberSource Corp. v. Retail Decisions,
Inc., 654 F.3d 1366, 1371–72 (Fed. Cir. 2011); Intellectual Ventures I LLC
v. Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016).
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operations that would ordinarily take place in advising one to process a
transaction based on potential fraud indicia including a check on whether a
transaction is requested in a region where the requestor is located. The
advice to process a transaction based on potential fraud indicia including a
check on whether a transaction is requested in a region where the requestor
is located involves receiving a transaction request, which is an economic act,
and processing the transaction request, which is an act ordinarily performed
in the stream of commerce. For example, claim 1 recites “receiving a
transaction request,” which is an activity that would take place whenever
one is in a commercial transaction. Similarly, claim 1 recites “processing
the transaction request,” which is also characteristic of commercial
transactions.
The Examiner determines the claims to be directed to determining the
location based authentication (validity) of a requested transaction. Final
Act. 15.
The preamble to claim 1 recites that it is a method for authenticating a
transaction. The steps in claim 1 result in managing commercial fraud
prevention by processing a transaction based on potential fraud indicia
including a check on whether a transaction is requested in a region where the
requestor is located absent any technological mechanism other than a
conventional computer for doing so.
As to the specific limitations, limitation 1 recites receiving data.
Limitations 2–5 recite generic and conventional analyzing and processing of
transaction data, which advise one to apply generic functions to get to these
results. The limitations thus recite advice for processing a transaction based
on potential fraud indicia including a check on whether a transaction is
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requested in a region where the requestor is located. To advocate processing
a transaction based on potential fraud indicia including a check on whether a
transaction is requested in a region where the requestor is located is
conceptual advice for results desired and not technological operations.
The Specification describes the invention as relating to determining
the validity of a requested transaction and preventing false-positives such as
card present false-positive prevention. Specification 1:4–7. Thus, all this
intrinsic evidence shows that claim 1 recites managing commercial fraud
prevention. This is consistent with the Examiner’s determination.
This in turn is an example of commercial or legal interactions as a
certain method of organizing human activity because managing commercial
fraud prevention is part of commercial transaction processing. The concept
of managing commercial fraud prevention by processing a transaction based
on potential fraud indicia including a check on whether a transaction is
requested in a region where the requestor is located is one idea for reducing
fraud. The steps recited in claim 1 are part of how this might conceptually
be premised.
Our reviewing court has found claims to be directed to abstract ideas
when they recited similar subject matter. Intellectual Ventures I LLC v.
Capital One Bank (USA), 792 F.3d 1363, 1367 (Fed. Cir. 2015) (tracking
financial transactions); CyberSource Corp. v. Retail Decisions, Inc., 654
F.3d 1366, 1375 (Fed. Cir. 2011) (claims linked only to a general purpose
computer of detecting fraud based on past transactions); Content Extraction
and Transmission LLC v. Wells Fargo Bank, 776 F.3d 1343, 1347 (2014)
(recognizing data within a collection); Dealertrack, Inc. v. Huber, 674 F.3d
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1315, 1333–34 (Fed. Cir. 2012) (processing financial transactions through a
clearing house).
From this we conclude that at least to this degree, claim 1 recites
managing commercial fraud prevention by processing a transaction based on
potential fraud indicia including a check on whether a transaction is
requested in a region where the requestor is located, which is a commercial
and legal interaction, one of certain methods of organizing human activity
identified in the Revised Guidance, and, thus, an abstract idea.
STEP 2A Prong 2
The next issue is whether claim 1 not only recites, but is more
precisely directed to this concept itself or whether it is instead directed to
some technological implementation or application of, or improvement to,
this concept i.e. integrated into a practical application.8
At the same time, we tread carefully in construing this
exclusionary principle lest it swallow all of patent law. At
some level, “all inventions ... embody, use, reflect, rest upon, or
apply laws of nature, natural phenomena, or abstract ideas.”
Thus, an invention is not rendered ineligible for patent simply
because it involves an abstract concept. “[A]pplication[s]” of
such concepts “ ‘to a new and useful end,’ ” we have said,
remain eligible for patent protection. Accordingly, in applying
the § 101 exception, we must distinguish between patents that
claim the “ ‘buildin[g] block[s]’ ” of human ingenuity and those
that integrate the building blocks into something more.
Alice, 573 U.S. at 217 (citations omitted).
Taking the claim elements separately, the operation performed by the
computer at each step of the process is expressed purely in terms of results,

8 See, e.g., Alice, 573 U.S. at 223, discussing Diamond v. Diehr, 450 U.S.
175 (1981).
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devoid of implementation details. Step 1 is a pure data gathering step.
Limitations describing the nature of the data do not alter this. Steps 2–5
recite generic computer processing expressed in terms of results desired by
any and all possible means and so present no more than conceptual advice.
All purported inventive aspects reside in how the data is interpreted and the
results desired, and not in how the process physically enforces such a data
interpretation or in how the processing technologically achieves those
results.
Viewed as a whole, Appellant’s claim 1 simply recites the concept of
managing commercial fraud prevention by processing a transaction based on
potential fraud indicia including a check on whether a transaction is
requested in a region where the requestor is located as performed by a
generic computer. This is no more than conceptual advice on the parameters
for this concept and the generic computer processes necessary to process
those parameters, and do not recite any particular implementation.
Claim 1 does not, for example, purport to improve the functioning of
the computer itself. Nor does it effect an improvement in any other
technology or technical field. The 12+ pages of specification do not bulge
with disclosure, but only spell out different generic equipment9 and
parameters that might be applied using this concept and the particular steps
such conventional processing would entail based on the concept of
managing commercial fraud prevention by processing a transaction based on
potential fraud indicia including a check on whether a transaction is
requested in a region where the requestor is located under different
scenarios. They do not describe any particular improvement in the manner a

9 The Specification describes a server or computer. Spec. 4:15–16.
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computer functions. Instead, claim 1 at issue amounts to nothing
significantly more than an instruction to apply managing commercial fraud
prevention by processing a transaction based on potential fraud indicia
including a check on whether a transaction is requested in a region where the
requestor is located using some unspecified, generic computer. Under our
precedents, that is not enough to transform an abstract idea into a patent-
eligible invention. See Alice, 573 U.S. at 225–26.
None of the limitations reflects an improvement in the functioning of
a computer, or an improvement to other technology or technical field,
applies or uses a judicial exception to effect a particular treatment or
prophylaxis for a disease or medical condition, implements a judicial
exception with, or uses a judicial exception in conjunction with, a particular
machine or manufacture that is integral to the claim, effects a transformation
or reduction of a particular article to a different state or thing, or applies or
uses the judicial exception in some other 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.
We conclude that claim 1 is directed to achieving the result of
managing commercial fraud prevention by advising one to process a
transaction based on potential fraud indicia including a check on whether a
transaction is requested in a region where the requestor is located, as
distinguished from a technological improvement for achieving or applying
that result. This amounts to commercial or legal interactions, which fall
within certain methods of organizing human activity that constitute abstract
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ideas. The claim does not integrate the judicial exception into a practical
application.
STEP 2B
The next issue is whether claim 1 provides an inventive concept
because the additional elements recited in the claim provide significantly
more than the recited judicial exception.
The introduction of a computer into the claims does not generally alter
the analysis at Mayo step two.
the mere recitation of a generic computer cannot transform a
patent-ineligible abstract idea into a patent-eligible invention.
Stating an abstract idea “while adding the words ‘apply it’” is
not enough for patent eligibility. Nor is limiting the use of an
abstract idea “‘to a particular technological environment.’”
Stating an abstract idea while adding the words “apply it with a
computer” simply combines those two steps, with the same
deficient result. Thus, if a patent’s recitation of a computer
amounts to a mere instruction to “implement[t]” an abstract
idea “on . . . a computer,” that addition cannot impart patent
eligibility. This conclusion accords with the preemption
concern that undergirds our § 101 jurisprudence. Given the
ubiquity of computers, wholly generic computer
implementation is not generally the sort of “additional
feature[e]” that provides any “practical assurance that the
process is more than a drafting effort designed to monopolize
the [abstract idea] itself.”
Alice, 573 U.S. at 223–24 (citations omitted).
“[T]he relevant question is whether the claims here do more than
simply instruct the practitioner to implement the abstract idea [] on a generic
computer.” Alice, 573 U.S. at 225. They do not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
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computer for receiving, analyzing, and processing data amounts to electronic
data query and retrieval—one of the most basic functions of a computer.
The final limitation is not a step, but a recitation of the nature of the data,
viz. a data characterization, which is aspirational rather than functional. All
of these computer functions are generic, routine, conventional computer
activities that are performed only for their conventional uses. See Elec.
Power Grp. LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016). See
also In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303,
1316 (Fed. Cir. 2011) (“Absent a possible narrower construction of the terms
‘processing,’ ‘receiving,’ and ‘storing,’ . . . those functions can be achieved
by any general purpose computer without special programming”). None of
these activities is used in some unconventional manner nor does any produce
some unexpected result. Appellant does not contend it invented any of these
activities. In short, each step does no more than require a generic computer
to perform generic computer functions. As to the data operated upon, “even
if a process of collecting and analyzing information is ‘limited to particular
content’ or a particular ‘source,’ that limitation does not make the collection
and analysis other than abstract.” SAP America, Inc. v. InvestPic LLC, 898
F.3d 1161, 1168 (Fed. Cir. 2018).
Considered as an ordered combination, the computer components of
Appellant’s claim 1 add nothing that is not already present when the steps
are considered separately. The sequence of data reception-analysis-
processing is equally generic and conventional. See Ultramercial, Inc. v.
Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014) (sequence of receiving,
selecting, offering for exchange, display, allowing access, and receiving
payment recited an abstraction); Inventor Holdings, LLC v. Bed Bath &
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Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017) (sequence of data
retrieval, analysis, modification, generation, display, and transmission);
Two-Way Media Ltd. v. Comcast Cable Communications, LLC, 874 F.3d
1329, 1339 (Fed. Cir. 2017) (sequence of processing, routing, controlling,
and monitoring). The ordering of the steps is therefore ordinary and
conventional.
We conclude that claim 1 does not provide an inventive concept
because the additional elements recited in the claim do not provide
significantly more than the recited judicial exception.
REMAINING CLAIMS
Claim 1 is representative. There are no other method claims. We
conclude that the method claim at issue is directed to a patent-ineligible
concept itself, and not to the practical application of that concept.
As to the structural claim 40, it is
no different from the method claims in substance. The method
claims recite the abstract idea implemented on a generic
computer; the system claims recite a handful of generic
computer components configured to implement the same idea.
This Court has long “warn[ed] ... against” interpreting § 101“in
ways that make patent eligibility ‘depend simply on the
draftsman’s art.’
Alice, 573 U.S. at 226. As a corollary, the claims are not directed to any
particular machine.
LEGAL CONCLUSION
From these determinations we further determine that the claims do not
recite an improvement to the functioning of the computer itself or to any
other technology or technical field, a particular machine, a particular
transformation, or other meaningful limitations. From this we conclude the
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claims are directed to the judicial exception of the abstract idea of certain
methods of organizing human activity as exemplified by the commercial and
legal interaction of managing commercial fraud prevention by advising one
to process a transaction based on potential fraud indicia including a check on
whether a transaction is requested in a region where the requestor is located,
without significantly more.
APPELLANT’S ARGUMENTS
As to Appellant’s Appeal Brief arguments, we adopt the Examiner’s
determinations and analysis from Final Action 14–18 and Answer 3–7 and
reach similar legal conclusions. We now turn to the Reply Brief.
We are not persuaded by Appellant’s argument that the claims are
analogous to those in another unrelated case appeal. Reply Br. 2. The facts
differ and the disposition in the other case is not controlling.
We are not persuaded by Appellant's argument that “Claim 1
includes ‘controlling a means for carrying out a transaction, a manner in
which the means for carrying out the transaction is controlled depending
upon the result of the comparison.’” Reply Br. 3. This is expressed as
means plus function. Appellant identifies the corresponding structure as
an ATM or point of sale device. App. Br. 3. Each of these is a
conventional generic device devoid of implementation details. That is
insufficient to confer eligibility.
In this case, the claims are directed not to an improvement in
cellular telephones but simply to the use of cellular telephones
as tools in the aid of a process focused on an abstract idea. That
is not enough to constitute patentable subject matter.
Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1262 (Fed.
Cir. 2016).
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We are not persuaded by Appellant's argument that
[t]he use of at least a Location Register (LR), a mobile
network provider, a mobile communication device
associated with a person requesting the transaction, and a
means for carrying out a transaction, along with the steps
employed to use such information and devices, clearly
includes an additional element that implements a judicial
exception with, or uses a judicial exception in conjunction
with, particular machines that are integral to the claim.
Reply Br. 3. This is entirely conclusory. We lay out the analysis behind
why these do not recite an additional element that would confer
eligibility supra under Step 2A-Prong 2 and Step 2B.
CONCLUSIONS OF LAW
The rejection of claims 1 and 40 under 35 U.S.C. § 101 as directed to
a judicial exception without significantly more is proper.
CONCLUSION
The rejection of claims 1 and 40 is affirmed.

In summary:
Claims
Rejected
35 U.S.C. § Basis Affirmed Reversed
1, 40 101 Eligibility 1, 40

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) (2011).
AFFIRMED