Ex Parte Ates

Patent Trial and Appeal Board

Feb 28, 2019

10506016 (P.T.A.B. Feb. 28, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
10/506,016 08/27/2004 Fikret Ates
125665 7590 03/04/2019
Baker Botts LLP
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
070457.2143 5428
EXAMINER
30 Rockefeller Plaza DEGA, MURALI K
New York, NY 10112
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
03/04/2019 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):
nycdocket@bakerbotts.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte FIKRET ATES
Appeal2018-001264
Application 10/506,016
Technology Center 3600
Before CAROLYN D. THOMAS, JOSEPH P. LENTIVECH, and
SCOTT E. RAEVSKY, Administrative Patent Judges.
LENTIVECH, Administrative Patent Judge.
DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner's decision to reject claims 1-3, 6-9, 11-13, 16-19, 21, 22, 25, 26,
28, 29, 32, 33, and 35-38. Claims 4, 5, 10, 14, 15, 20, 23, 24, 27, 30, 31,
and 34 have been canceled. See App. Br. 25-35 (Claims Appendix). We
have jurisdiction over the pending claims under 35 U.S.C. § 6(b).
We reverse.
1 According to Appellant, the real party in interest is MasterCard
International Incorporated. App. Br. 2.
Appeal2018-001264
Application 10/506,016
STATEMENT OF THE CASE
Appellant's Invention
Appellant's invention generally relates to "an authentication
arrangement which is part of a payment system and a corresponding method
executed over an open network such as the Internet using an Integrated
Circuit Card." Spec. 1 :6-8. Claim 1, which is illustrative, reads as follows:
1. A network payment system for transacting a sale of
merchandise over a network using an integrated circuit card for
authentication, said network payment system comprising:
a merchant server in communication with said network,
said merchant server having at least a first item of merchandise
for sale;
a client terminal in communication with said network, said
client terminal having an output device for reviewing said first
item for sale, and an input device for initiating a purchase
transaction to purchase said first item for sale, said client
terminal being arranged to build a purchase message using
information relating to a merchant identifier and financial
transaction information obtained from said merchant server;
a card reader for communicating with said integrated
circuit card,
a transaction approvals server for approvmg financial
transactions,
said client terminal having a processor component
configured to generate a challenge message, said challenge
message being generated by compressing a concatenation of at
least the merchant identifier and an account number,
the card reader having a processor component for
receiving the challenge message and for generating a value from
the challenge message, generation of said value based at least in
part on said financial transaction information and the card reader
further having a communication component for transmitting said
value to said integrated circuit card;
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said integrated circuit card having a processor component
for receiving the value and calculating a cryptographic message
by encrypting at least a part of said value and for returning the
cryptographic message to the card reader,
said integrated circuit card having a bitmap structure to
identify bits of the cryptographic message;
the processor component of the card reader configured to
generate an authentication token, based on the bitmap structure,
from at least a part of the cryptographic message,
said client terminal having a communication component
for transmitting at least part of the authentication token in a
message for transmission via the network to said transaction
approvals server, said message for transmission via the network
to said transaction approvals server generated based at least in
part on card verification results.
Rejection
Claims 1-3, 6-9, 11-13, 16-19, 21, 22, 24, 25, 26, 28, 29, 32, 33, and
35-38 stand rejected under 35 U.S.C. § 101 because the claimed subject
matter is judicially-excepted from patent eligibility under § 101. Final
Act. 2--4.
ANALYSIS
Rejection under 35 U.S.C. § 101
PRINCIPLES OF LAW
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 Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: "[l]aws of nature, natural phenomena, and abstract
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Application 10/506,016
ideas" are not patentable. E.g., Alice Corp. Pty. Ltd. v. CLS Bank Int 'l, 573
U.S. 208,216 (2014) (internal quotation marks and citation omitted).
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 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. Kappas, 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 (Gottschalkv. Benson, 409 U.S. 63, 69 (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 184 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267---68 (1854))); 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
Supreme Court held that "[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
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mathematical formula." Diehr, 450 U.S. at 176; 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 Supreme 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. ( 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 tum to the second
step 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 (internal citation 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. ( 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.
The PTO recently published revised guidance on the application of
§ 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed.
Reg. 50 (Jan. 7, 2019) ("Memorandum"). Under that guidance, we first look
to whether the claim recites:
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Application 10/506,016
( 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 MANUAL OF PATENT EXAMINING
PROCEDURE (MPEP) § 2106.05(a}-(c), (e}-(h) (9th Ed., Rev.
08.2017, Jan. 2018)).
Memorandum, 84 Fed. Reg. at 52, 54--55. Only if a claim (1) recites a
judicial exception and (2) does not integrate that exception into a practical
application, do we then 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.
Id. at 56.
OuRREvrnw
Applying the guidance set forth in the Memorandum, we conclude the
Examiner has erred in rejecting the claims as being directed to patent-
ineligible subject matter for the reasons that follow.
The Examiner finds, and we agree, that "the claims are directed
towards network based financial transaction approvals for sale of
merchandize and thus, the claims include an abstract idea." Final Act. 3;
Ans. 3. Financial transaction approvals for sale of merchandize is similar to
concepts found to be within the realm of abstract ideas such as verifying
credit card transactions in CyberSource (see CyberSource Corp. v. Retail
Decisions, Inc., 654 F.3d 1366, 1370 (Fed. Cir. 2011)), collecting and
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analyzing information to detect and notify of misuses in FairWarning (see
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093-94 (Fed. Cir.
2016)), and guaranteeing transactions in buySAFE (see buySAFE, Inc. v.
Google, Inc., 765 F.3d 1350, 1354 (Fed. Cir. 2014)). Accordingly, we
conclude the claims recite a judicial exception of a fundamental economic
practice-i.e., a method of organizing human activity.
Having determined that the claims recite a judicial exception, we now
determine whether there are additional elements that integrate the judicial
exception into a practical application. Memorandum, 84 Fed. Reg. at 54; see
also MPEP § 2106.05(a}-(c), (e}-(h). Appellant's claims recites various
computer-related limitations, including, for example, a "merchant server," a
"network " a "client terminal " a "card reader " a "transactions approvals
' ' '
server," and an "integrated circuit card," as recited in claim 1. Although
these computer-related limitations are not wholly generic in nature and are
specific to network payment systems, they are described at a high level in
the Specification without any meaningful detail about their structure or
configuration. As such, we do not find the computer-related limitations are
sufficient to integrate the judicial exception into a practical application.
However, the claims also recite additional limitations which focus on
addressing problems arising in the context of a network payment system for
transacting a sale of merchandise over a network using an integrated circuit
card. These limitations, as recited in claim 1 for example, include: (1)
"generat[ing] a challenge message ... by compressing a concatenation of at
least the merchant identifier and an account number," (2) "generating a
value from the challenge message ... based at least in part on said financial
transaction information," (3) "calculating a cryptographic message by
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encrypting at least a part of said value," and (4) "generat[ing] an
authentication token, based on the bitmap structure [included on the
integrated circuit card], from at least a part of the cryptographic message."
We conclude that these limitations integrate the recited judicial
exception into a practical application. In particular, these additional
limitations apply or use the judicial exception in a 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 Diehr, 450 U.S. at
184, 187; Memorandum, 84 Fed. Reg. at 55.
Because the claims as a whole integrate the recited judicial exception
into a practical application, we find the claims are not directed to the judicial
exception and, therefore, recite patent-eligible subject matter. 2
Accordingly, we do not sustain the Examiner's rejection of claims
1-3, 6-9, 11-13, 16-19, 21, 22, 24, 25, 26, 28, 29, 32, 33, and 35-38 under
35 U.S.C. § 101.
DECISION
We reverse the Examiner's rejection of claims 1-3, 6-9, 11-13,
16-19, 21, 22, 24, 25, 26, 28, 29, 32, 33, and 35-38 under 35 U.S.C. § 101.
REVERSED
2 Because we have determined the claims are not directed to the recited
judicial exception, we need not reach the question of whether the claims
provide an inventive concept under the second step of the Alice analysis.
Memorandum, 84 Fed. Reg. at 54.
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