Denise Torreyson et al.

Patent Trials and Appeals Board

Dec 11, 2020

2020003562 (P.T.A.B. Dec. 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.
12/756,795 04/08/2010 Denise Torreyson 21652-00083 1352
75564 7590 12/11/2020
DANIEL M. FITZGERALD (21652)
ARMSTRONG TEASDALE LLP
7700 Forsyth Boulevard
Suite 1800
St. Louis, MO 63105
EXAMINER
ALLADIN, AMBREEN A
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
12/11/2020 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):
USpatents@armstrongteasdale.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

Ex parte DENISE TORREYSON, ANANT NAMBIAR,
DEBORAH BARTA, AMY NEVELS-BARNETT,
ANNE HENKE, and JODI DAVID

Appeal 2020-003562
Application 12/756,795
Technology Center 3600

Before MICHAEL W. KIM, Vice Chief Administrative Patent Judge,
MURRIEL E. CRAWFORD, and PHILIP J. HOFFMANN, Administrative
Patent Judges.

KIM, Vice Chief Administrative Patent Judge.

DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 42–62. We have jurisdiction 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 Mastercard
International Incorporated. Appeal Br. 1.
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CLAIMED SUBJECT MATTER
The claimed invention relates to “linking at least one secondary
account to a primary account wherein at least one of the accounts has a
transaction card associated therewith.” Spec. ¶ 2. Independent claim 42,
reproduced below, is representative of the claimed subject matter, with
emphasis added:
42. A method for processing financial transactions using
an interchange network computer coupled to a database, the
financial transactions initiated with a plurality of transaction
cards issued by an issuer, said method comprising:
receiving, by the interchange network computer, a
plurality of authorization request messages, each authorization
request message corresponding to one of the financial
transactions initiated by one of the transaction cards, each
authorization request message including transaction data
including an identifier of the one of the transaction cards and a
transaction amount;
determining, by the interchange network computer, for
each of the plurality of authorization request messages, that the
corresponding transaction card identifier of each of the
transaction cards is associated in the database with a respective
secondary account of a plurality of secondary accounts by
accessing, from the database, a linked account data file using the
corresponding transaction card identifier;
retrieving, by the interchange network computer from the
linked account data file in the database, a common primary
account associated with the plurality of secondary accounts;
submitting, by the interchange network computer for each
of the plurality of authorization request messages, the
transaction data to the issuer;
applying, by the interchange network computer, an
interchange rate associated in the database with the common
primary account to each of the plurality of authorization request
messages, wherein the interchange rate determines interchange
fees owed to the issuer for the use of the one of the transaction
cards for the corresponding financial transaction;
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receiving, by the interchange network computer, from the
issuer for each of the authorization request messages, an
authorization response message indicating that the
corresponding secondary account is in good standing and that
the corresponding transaction amount does not exceed a credit
limit associated with the secondary account;
updating, by the interchange network computer in the
database, historical transaction data accumulated by the
interchange network computer for the common primary account
to include the transaction data of each of the plurality of
authorization request messages;
determining, by the interchange network computer from
the updated historical transaction data, a total number of
historical financial transactions over a predefined time period
associated with the plurality of secondary accounts associated
with the common primary account; and
updating, by the interchange network computer in the
database, the interchange rate associated with the common
primary account in response to the number of historical
transactions exceeding a transaction number criterion.
REJECTION
The Examiner rejected claims 42–62 under 35 U.S.C. § 101 as
directed to ineligible subject matter in the form of an abstract idea.2
ANALYSIS
A. Section 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

2 “The secondary 101 rejection previously given as to [c]laim 49 and
dependent claims 50–55 regarding overlapping multiple statutory classes of
invention has been withdrawn.” Ans. 12.
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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 Court’s two-part 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 that 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.”).
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, 67 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
(1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267–68 (1853))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Court held that “a claim drawn to subject matter otherwise statutory does not
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become nonstatutory simply because it uses a mathematical formula.” Diehr,
450 U.S. at 187; see also id. at 191 (“We view respondents’ claims as
nothing more than a process for molding rubber products and not as an
attempt to patent a mathematical formula.”). Having said that, the Court also
indicated that a claim “seeking patent protection for that formula in the
abstract . . . is not accorded the protection of our patent laws, and this
principle cannot be circumvented by attempting to limit the use of the
formula to a particular technological environment.” Id. (citation omitted)
(citing Benson and Flook); see, e.g., id. at 187 (“It is now commonplace that
an application of a law of nature or mathematical formula to a known
structure or process may well be deserving of patent protection.”).
If the claim is “directed to” an abstract idea, we turn to the second part
of the Alice and Mayo framework, where “we must examine the elements of
the claim to determine whether it contains an ‘inventive concept’ sufficient
to ‘transform’ the claimed abstract idea into a patent-eligible application.”
Alice, 573 U.S. at 221 (quotation marks omitted). “A claim that recites an
abstract idea must include ‘additional features’ to ensure ‘that the [claim] is
more than a drafting effort designed to monopolize the [abstract idea].’” Id.
(alterations in original) (quoting Mayo, 566 U.S. at 77). “[M]erely
requir[ing] generic computer implementation[] fail[s] to transform that
abstract idea into a patent-eligible invention.” Id.
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B. USPTO § 101 Guidance
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101.3 The Manual of
Patent Examining Procedure (“MPEP”) now incorporates this revised
guidance and subsequent updates at § 2106 (9th ed. Rev. 10.2019, rev. June
2020).4
Under MPEP § 2106, we first look 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) (“Step 2A, Prong One”); and
(2) additional elements that integrate the judicial exception into a
practical application (“Step 2A, Prong Two”).5
MPEP § 2106.04(a), (d).

3 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50
(Jan. 7, 2019) (“2019 Revised Guidance”). In response to received public
comments, the Office issued further guidance on October 17, 2019,
clarifying the 2019 Revised Guidance. USPTO, October 2019 Update:
Subject Matter Eligibility (the “October 2019 Update”). “All USPTO
personnel are, as a matter of internal agency management, expected to
follow the guidance.” 84 Fed. Reg. at 51; see also October 2019 Update at 1.
4 All references to the MPEP are to the Ninth Edition, Revision 10.2019
(Last Revised June 2020), unless otherwise indicated.
5 “Examiners evaluate integration into a practical application by
(a) identifying whether there are any additional elements recited in the claim
beyond the judicial exception, and (b) evaluating those additional elements
individually and in combination to determine whether the claim as a whole
integrates the exception into a practical application.” MPEP
§ 2106.04(d)(II).
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Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application,6 do we then look, under
Step 2B, to whether the claim:
(3) adds a specific limitation beyond the judicial exception that is not
“well-understood, routine, conventional activity” in the field; 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.7
MPEP § 2106.05(d).
C. Independent Claim 42
1. Step 2A, Prong 1: “recites a judicial exception”
The Examiner determines that the above-italicized limitations of
independent claim 42 describe “processing financial transactions by linking
accounts to apply an interchange rate,” which is “a fundamental economic
practice, commercial interactions and managing relationships or interactions
between people and thus grouped as certain methods of organizing human
activity which is an abstract idea.” Final Act. 4–5. The Appellant argues that
although independent claim 42 may recite steps that provide a context or
environment tangential to those abstract ideas, because independent claim 42
does not recite active steps that initiate or complete, for example, a

6 This corresponds to Alice part one where it is determined whether the claim
is “directed to” an abstract idea. See Alice, 573 U.S. at 219. If a claim is “not
directed to an abstract idea under part one of the Alice framework, we do not
need to proceed to step two.” Enfish, LLC v. Microsoft Corp., 822 F.3d
1327, 1339 (Fed. Cir. 2016).
7 This corresponds to Alice part two where it is determined whether the
claim “contains an ‘inventive concept’ sufficient to ‘transform’ the claimed
abstract idea into a patent-eligible application.” Alice, 573 U.S. at 221.
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commercial interaction, that independent claim 42 does not actually recite an
abstract idea. Appeal Br. 7–10. The Examiner responds that even if a claim
limitation recites only a portion of, for example, a transaction processing,
that is still sufficient to place the claim limitation within the bounds of the
aforementioned abstract ideas. Ans. 14–15. The Examiner asserts further
that even if the Appellant’s underlying assertion was true, that the claim
must recite initiating or completing a transaction, that independent claim 42
does recite such limitations, for example, in the preamble at “the financial
transactions initiated with a plurality of transaction cards issued by an
issuer,” and every subsequent recitation of “financial transaction.” Ans. 15.
We agree with and adopt the Examiner’s response, which is fully responsive.
The Appellant replies that the inquiry is not whether the Examiner’s
“14-word paraphrasing” of the claim recites an abstract idea, but to identify
the specific claim limitations. Reply Br. 1–2. We agree. The reply is
misplaced, however, as the Examiner did explicitly identify specific claim
limitations of independent claim 42 that recited abstract ideas, for example,
those italicized above. See, e.g., Final Act. 4–5; Ans. 13, 15.
The Appellant replies further that the Examiner’s “14-word
paraphrasing” of the above-italicized limitations of independent claim 42 as
“processing financial transactions by linking accounts to apply an
interchange rate” is an oversimplification of those claim limitations, because
it does not account adequately for “updating of the applicable interchange
rate by accumulating the transaction data of the secondary accounts in the
stored historical transaction data for the primary account, while
simultaneously treating each secondary account as independent for
purposes of the issuer authorization process.” Reply Br. 2. The reply is
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misplaced for several reasons. First, the Appellant has not explained
adequately how “accumulating the transaction data of the secondary
accounts in the stored historical transaction data for the primary account” is
related to updating the applicable interchange rate. Absent such further
explanation, it would appear that “updating of the applicable interchange
rate” is reflected adequately within “processing financial transactions by
linking accounts to apply an interchange rate.” Id. Second, the Appellant has
not explained adequately how its “simultaneously” assertion is reflected in
the claim language of independent claim 42.
For these reasons, we are unpersuaded that the Examiner has erred in
asserting that independent claim 42 recites an abstract idea.
2. Step 2A, Prong 2: “does not integrate that exception into
a practical application”
Because independent claim 42 recites an abstract idea, we turn to
Prong Two of Revised Step 2A of the guidance on the application of § 101,
where we identify “additional elements” beyond the abstract idea, and
evaluate whether “those additional elements individually and in combination
to determine whether they integrate the exception into a practical
application.” MPEP § 2106.04(d)(II).
The Examiner asserts that any additional elements do not integrate the
above abstract idea into a practical application. Ans. 5–6. In particular, the
Examiner asserts that the only computer recited is an “interchange network
computer,” that there are no improvements to the functioning of that
computer, as “the combined and continuous data is functionally no different
than any data being updated in an account file,” and that the computer “is
recited at a high level of generality and as performing generic computer
functions.” Ans. 5–6.
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The Appellant asserts that independent claim 42 solves the technical
problem of “tying together data from disparate sources for use in subsequent
data processing” (Appeal Br. 11) using the following solution:
In other words, [c]laims 42, 49, and 56 improve payment
processing technology by reciting a particular method to assign
the issuer’s deserved interchange rate (based on multiple linked
cards) to the transaction as it occurs, while preserving the
issuer’s ability to process other aspects of the transaction
according to the individual card used, and to automatically
update the issuer’s deserved interchange rate as transactions
using the linked cards accumulate. The proper interchange rate
for all of the linked cards is automatically selected at the
interchange network, relieving the issuer of the burden (imposed
by conventional systems) to analyze linked accounts after the
fact.
Appeal Br. 12; see also Reply Br. 3 (similar assertions). The Examiner
responds that “the problem solved is a record keeping problem which is a
business problem, not an improvement in technology” (Ans. 17) and that
“[t]here is a record keeping issue that is being resolved by updating accounts
with a different interchange based on retrieved data and there is transaction
processing occurring where establishing that an account is in good standing
and within a credit limit are steps that are no more than retrieving and
comparing data using generic components.” Ans. 18. We agree with the
Examiner. Specifically, when the words “automatically” and “network” are
removed from the Appellant’s above-quoted paragraph, we are unpersuaded
that anything remains that does not concern a business record keeping issue.
The Appellant replies that “[c]ontrary to the analysis in the
Examiner’s Answer, the claims do not recite merely updating the
secondary account numbers with a linked primary or original account
number when transactions are processed,” because such an update would
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not effect the intended solution. Reply Br. 3–4. The reply is misplaced, as
the Examiner is not asserting that the account numbers are updated, but that
the interchange is updated. In any case, we are unpersuaded that updating
the interchange data field constitutes an improvement to the functioning of a
computer.
For all these reasons, we are not persuaded that independent claim 42
recites any additional elements that “integrate the abstract idea into a
practical application.”
3. Step 2B: “well-understood, routine, conventional”
Under Step 2B of the guidance on the application of § 101, we next
analyze whether claim 42 adds any specific limitations beyond the judicial
exception that, either alone or as an ordered combination, provide an
“inventive concept.” Alice, 573 U.S. at 221. In doing so, we consider
whether the additional elements, individually and in an ordered combination,
are well-understood, routine, and conventional. MPEP § 2106.05(d).
The Examiner concludes that the claims do not contain any additional
elements, individual or in combination, which amount to significantly more
than the abstract idea. Final Act. 7–10. In particular, the Examiner concludes
that “[t]he use of the interchange network as noted by Examiner and
admitted by the Applicant is a known standard. (See Appellant Specification
paragraph 33 and Figure 1).” Final Act. 8; see also Final Act. 8–10 (citing
Spec. ¶¶ 44, 63–66, 75–76).
The Appellant asserts that the Office has not provided adequate
factual evidence to show that the following is “well-understood, routine, and
conventional”: “use of a linked account data file that enables the issuer to
continue to respond to the authorization request messages based on the terms
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of various individual secondary accounts, while simultaneously enabling
real-time tracking by the payment card interchange network of the aggregate
statistics needed to assign interchange rates and assess interchange fees
based on a common primary account.” Appeal Br. 14; see also Reply Br. 4
(asserting same deficiency for “applying and updating an interchange rate
for a group of accounts as transactions are processed, while simultaneously
maintaining the separateness of the group of accounts for purposes of the
authorization process (e.g., separate credit limits, etc.)”). The assertion is
misplaced because the Examiner only needs to provide factual support that
any elements additional to the abstract idea are “well-understood, routine,
and conventional.” See BSG Tech LLC v. BuySeasons, Inc., 899 F.3d 1281,
1290 (Fed. Cir. 2018) (“It has been clear since Alice that a claimed
invention’s use of the ineligible concept to which it is directed cannot supply
the inventive concept that renders the invention ‘significantly more’ than
that ineligible concept.”). Here, we agree with the Examiner that the only
element of independent claim 42 additional to the abstract idea is the
“interchange network computer,” and we are unpersuaded that the
Examiner’s citation to paragraph 33 and Figure 1 of the Specification is
inadequate. Specifically, the balance of the Appellant’s above assertion is
subsumed within “processing financial transactions by linking accounts to
apply an interchange rate,” which is “a fundamental economic practice,
commercial interactions and managing relationships or interactions between
people and thus grouped as certain methods of organizing human activity
which is an abstract idea,” and thus the Examiner did not need to show that
the abstract idea itself was “well-understood, routine, or conventional.”
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The Appellant also cites BASCOM Global Internet v. AT&T Mobility
LLC, 827 F.3d 1341 (Fed. Cir. 2016) for the proposition that an
unconventional arrangement of otherwise generic computer components
may constitute an inventive concept. Reply Br. 5. Although we certainly
agree with that proposition, here, we have only one computer component:
the “interchange network computer.” We are unclear as to how one
computer component can have an unconventional arrangement with itself.
We note further that to the extent the Appellant argues the claims
contain an “inventive concept” based on their alleged novelty or non-
obviousness over the cited references (Appeal Br. 10; Reply Br. 2), the
Appellant misapprehends the controlling precedent. Although the second
step in the Alice/Mayo 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, 573 U.S. at 217–
218. A novel and nonobvious claim directed to an abstract idea is,
nonetheless, patent-ineligible. See Mayo, 566 U.S. at 90.
For all the reasons set for above, we are unpersuaded the Examiner
erred in asserting that the additional elements, individually and in
combination, fail to provide an inventive concept because they are all well-
understood, routine, and conventional.
For the reasons above, we sustain the rejection of independent
claim 42 as directed to an abstract idea under 35 U.S.C. § 101, without
significantly more.
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D. Claims 43–62
The Examiner addresses the rejection under 35 U.S.C. § 101 of
independent claims 49 and 56 together with independent claim 42 (Final
Act. 3–10), and separately addresses the rejection of each of dependent
claims 43–48, 50–55, and 57–62. Final Act. 11–12. The Appellant does not
meaningfully address separately the rejection of any of claims 43–62.
Accordingly, we sustain the rejection of those claims under 35 U.S.C. § 101
for the reasons stated above.
DECISION
The Examiner’s rejection under 35 U.S.C. § 101 is affirmed.
CONCLUSION
Claims
Rejected
35 U.S.C. § Reference(s)/
Basis
Affirmed Reversed
42–62 101 Eligibility 42–62

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