Ex Parte Barson et al

Patent Trial and Appeal Board

Feb 9, 2018

13826925 (P.T.A.B. Feb. 9, 2018)

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.
GGZAB.00101 9855
EXAMINER
TIEDEMAN, JASON S
ART UNIT PAPER NUMBER
3626
MAIL DATE DELIVERY MODE
13/826,925 03/14/2013
22858 7590 02/09/2018
CARSTENS & CAHOON, LLP
P.O. Box 802334
DALLAS, TX 75380-2334
Robert David Barson
02/09/2018 PAPER
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.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ROBERT DAVID BARSON and MAT AN LAN
Appeal 2016-004883
Application 13/826,925
Technology Center 3600
Before NINA L. MEDLOCK, AMEE A. SHAH, and
ROBERT J. SILVERMAN, Administrative Patent Judges
SHAH, Administrative Patent Judge.
DECISION ON APPEAL1
The Appellants2 appeal under 35 U.S.C. § 134(a) from the Examiner’s
final decision rejecting claims 1—30, which are all of the pending claims,
under 35 U.S.C. § 101 as being directed to non-statutory subject matter. We
have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 Throughout this opinion, we refer to the Appellants’ Appeal Brief
(“Appeal Br.,” filed Sept. 8, 2015), Reply Brief (“Reply Br.,” filed Apr. 1,
2016), and Specification (“Spec.,” filed Mar. 14, 2013), and to the
Examiner’s Answer (“Ans.,” mailed Feb. 1, 2016) and Final Office Action
(“Final Act.,” mailed Nov. 7, 2014).
2 According to the Appellants, the real party in interest is “The MSA Card
Technology Group, LLC.” Appeal Br. 3.
Appeal 2016-004883
Application 13/826,925
STATEMENT OF THE CASE
The Appellants’ invention “relates generally to administering
restricted-use financial accounts for individuals, and more specifically to the
administration of accounts and payments implemented under the Medicare
Secondary Payer Act.” Spec. 11.
Claims 1,11, and 24 are the independent claims on appeal. Claim 1
(Appeal Br. 24—26) (Claims App.) is illustrative of the subject matter on
appeal, and is reproduced below:
1. A method of conditionally authorizing payments for
healthcare goods or services over a payment network using a
centralized computer system, the method comprising:
providing a user-interface associated with the centralized
computer system and configured for use by a user or the user’s
authorized representative to create or access the user’s account,
access or provide payment information related to the user’s
account, access or provide documentation related to the user’s
account history, and access or provide personal information
related to the user;
receiving, via the user-interface, personal information
regarding the user, the personal information including a
medically diagnosed condition of the user for which treatment is
sought by the user;
creating, with the centralized computer system, a user
profile of the user in a database associated with the centralized
computer system, the user profile comprising the personal
information;
causing, with the centralized computer system, a financial
institution independent from the system to create a restricted-use
financial account in the name of the user by providing the
received personal information to the financial institution,
wherein the restricted-use financial account is restricted to
payment of eligible expenses from the financial account that are
determined based on the medically diagnosed condition;
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causing, with the centralized computer system, a source
independent from the system to fund the financial account with
funds for use by the user for payment of the eligible expenses;
causing, with the centralized computer system, the
issuance of a payment card and association of the payment card
with the financial account for use by the user for payment of
eligible expenses from the financial account to a provider of
goods or services for treatment of the medically diagnosed
condition of the user, wherein transactions submitted by non-
authorized providers using the payment card are automatically
denied payment;
providing a provider-interface associated with the
centralized computer system and configured for use by a
provider of goods or services to be provided for the medically
diagnosed condition of the user to create or access the provider’s
account, access or provide treatment information related to the
goods or services, access or provide documentation related to the
provider’s account history, and access or provide payment
information related to the goods or services;
receiving, via the provider-interface, a payment
authorization request on behalf of the provider of the goods or
services to be provided for the medically diagnosed condition of
the user;
obtaining, with the centralized computer system and from
a rules source independent from the system, a set of rules
comprising eligibility requirements for goods or services
provided by providers;
determining, with an adjudication engine associated with
the centralized computer system, if the goods or services related
to the payment authorization request is an eligible expense
payable from the financial account and an approved amount for
payment of said eligible goods or services, wherein the
adjudication engine applies the set of rules to the personal
information in the user profile in order to determine the eligibility
and approved amount of the expense;
if the payment authorization request is adjudicated as
payable, authorizing, with the centralized computer system, a
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Application 13/826,925
card issuing processor to approve a card payment request
submitted from the provider via the payment network to settle
funds from the financial account to an account of the provider,
wherein the card issuing processor will only approve the card
payment request if the card payment request was submitted from
an authorized provider for the approved amount; and
updating, with the centralized computer system, the user
profile with information regarding the goods or services and the
settled funds comprising the eligible expense.
ANALYSIS
The Appellants argue claims 1—30 as a group. See Appeal Br. 13, 15.
We select claim 1 as representative of the group with claims 2—30 standing
or falling therewith. See 37 C.F.R. § 41.37(c)(l)(iv).
Under 35 U.S.C. § 101, a patent may be obtained for “any new and
useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof.” The Supreme Court has “long held that
this provision contains an important implicit exception: Laws of nature,
natural phenomena, and abstract ideas are not patentable.” Alice Corp. Pty.
Ltd. v. CLS Bank Inti, 134 S. Ct. 2347, 2354 (2014) (quoting Assn for
Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116
(2013)).
The Supreme Court in Alice reiterated the two-step framework, set
forth previously in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66, 78—79 (2012), “for distinguishing patents
that claim laws of nature, natural phenomena, and abstract ideas from those
that claim patent-eligible applications of those concepts.” Alice, 134 S. Ct.
at 2355. The first step in that analysis is to “determine whether the claims at
issue are directed to one of those patent-ineligible concepts.” Id. (citing
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Mayo, 566 U.S. at 79) (emphasis added). If so, the second step is to
consider the elements of the claims “individually and ‘as an ordered
combination”’ to determine whether the additional elements “‘transform the
nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo,
566 U.S. at 78-79).
In other words, the second step is to “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.’” Id. (alteration in original) (quoting
Mayo, 566 U.S. at 72—73). The Court acknowledged in Mayo, that “all
inventions at some level embody, use, reflect, rest upon, or apply laws of
nature, natural phenomena, or abstract ideas.” Mayo, 566 U.S. at 71. We,
therefore, 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, i.e., “whether the focus of the claims is on [a] specific asserted
improvement in computer capabilities ... or, instead, on a process that
qualifies as an ‘abstract idea’ for which computers are invoked merely as a
tool.” See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335—36
(Fed. Cir. 2016).
Under the first step of the Alice framework, the Examiner determines
that the claims are directed to the fundamental economic practice of
administering a restricted-use financial account, an abstract idea. Final
Act. 2; Ans. 3. Conversely, the Appellants contend that the claims are not
directed to an abstract idea but rather to “approving/denying card payments
for medical goods or services requested over conventional payment
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networks using a specific technical solution that is not available in
conventional payment networks.” Appeal Br. 15; see also id. at 16.
Before determining whether the claims at issue are directed to an
abstract idea, we must first determine what the claims are directed to.
The “directed to” inquiry . . . cannot simply ask whether the
claims involve a patent-ineligible concept, because essentially
every routinely patent-eligible claim involving physical products
and actions involves a law of nature and/or natural
phenomenon—after all, they take place in the physical world.
See Mayo, 132 S. Ct. at 1293 (“For all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural
phenomena, or abstract ideas.”) Rather, the “directed to” inquiry
applies a stage-one filter to claims, considered in light of the
specification, based on whether “their character as a whole is
directed to excluded subject matter.” Internet Patents Corp. v.
Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015); see
Genetic Techs. Ltd. v. Merial L.L.C., 2016 WL 1393573, at *5
(Fed. Cir. 2016) (inquiring into “the focus of the claimed advance
over the prior art”).
Enfish, 822 F.3d at 1335.
The step-one analysis requires us to consider the claims “in their
entirety to ascertain whether their character as a whole is directed to
excluded subject matter.” Internet Patents Corp. v. Active Network, Inc.,
790 F.3d 1343, 1346 (Fed. Cir. 2015). The question is whether the claims as
a whole “focus on a specific means or method that improves the relevant
technology” or are “directed to a result or effect that itself is the abstract idea
and merely invoke generic processes and machinery.” McRO, Inc. v. Bandai
Namco Games Am. Inc., 837 F.3d 1299, 1314 (Fed. Cir. 2016).
In this case, the preamble of claim 1 provides for a “method of
conditionally authorizing payments for healthcare goods or services over a
payment network using a centralized computer system.” Appeal Br. 24
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Application 13/826,925
(Claims App.). Claim 1 recites the limitations of providing an interface to
create or access an account and access or provide related information data
and documentation data, receiving information data, creating profile data in
a database, causing an independent financial institution to create a restricted-
use account by providing received data information, causing an independent
source to fund the accounts, causing issuance of a payment card, receiving
authorization data related to good or services to be provided, obtaining rules
data, determining if the goods or services is an eligible expense payable by
applying the rules, if payable, authorized approval of the request to settle
funds, and updating profile data. See id. The Specification provides that the
invention is directed to “the administration of accounts and payments
implemented under the Medicare Secondary Payer Act” (Spec. 11) and to
“administering a financial account on behalf of a system member, where
payments from the financial account are restricted to only eligible expenses”
{id. 16).
In that context, the claim is directed to administering restricted-use
financial accounts for eligible healthcare-related goods and services.3 This
is similar to claims found to be abstract ideas by our reviewing courts in
Smart Systems Innovation, Inc. v. Chicago Transit Authority, 873 F.3d 1364,
1371—72 (Fed. Cir. 2017) (formation of financial transactions in a certain
field), Alice, 134 S. Ct. at 2356 (using a third party to mitigate settlement
risk), buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014)
3 We note that “an abstract idea can generally be described at different levels
of abstraction.” Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed.
Cir. 2016). The Board’s “slight revision of its abstract idea analysis does not
impact the patentability analysis.” Id. at 1241.
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(guaranteeing transactions), and CyberSource Corp. v. Retail Decisions,
Inc., 654 F.3d 1366, 1372—73 (Fed. Cir. 2011) (verifying the validity of
credit card transactions over the Internet).
We find unpersuasive the Appellants’ arguments that the claim is not
abstract because it is analogous to those of DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), because it is
necessarily rooted in computer technology in order to
overcome a technical problem specifically arising in the realm
of electronic payment networks, namely: the inability for
conventional electronic payment portals, such as a point of sale
card reader, to selectively approve transactions based on the
nature of the goods and services transacted for
(Appeal Br. 16; see also id. at 21), and because the claim provides a
technical solution in that “much like the patent eligible claims in DDR
Holdings, the features recited by [the claim] improve the functioning of a
conventional payment network” {id. at 19; see also Reply Br. 2-4).
In DDR Holdings, the Federal Circuit determined that the claims
addressed the problem of retaining website visitors who, if adhering to the
routine, conventional functioning of Internet hyperlink protocol, would be
transported instantly away from a host’s website after clicking on an
advertisement and activating a hyperlink. DDR Holdings, 773 F.3d at 1257.
The Federal Circuit, thus, held that the claims were directed to statutory
subject matter because they claim a solution “necessarily rooted in computer
technology in order to overcome a problem specifically arising in the realm
of computer networks.” Id. The court cautioned that “not all claims
purporting to address Internet-centric challenges are eligible for patent.” Id.
at 1258. And the court contrasted the claims to those at issue in
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Application 13/826,925
Ultramercial Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) in that, in
DDR Holdings, the computer network was not operating in its “normal
expected manner” and the claims did not “recite an invention that is merely
the routine or conventional use of the Internet.” Id. at 1258—59.
In contrast here, according to the Appellants, the claim addresses the
technical problem of “selectively approving] transactions based on the
nature of the goods and services transacted for” that “arises because existing
payment networks restrict the information that may be transmitted, and
therefore are inadequate to provide the eligibility protection of the presently
claimed systems and methods.” Appeal Br. 16. The Specification provides
that the invention creates and administers “accounts and payments provided
under the Medicare Secondary Payer Act [and] do[es] not suffer from the
deficiencies of the prior art” related to “the complexity of the process by
which settlement funds must be set aside and used, and the annual reporting
requirements” that cause many individuals to “choose to utilize a
professional administrator of an MSA account and/or a third-party solution.”
Spec. 1 5. Thus, the invention administers a “restricted-use financial
account [that] assists members in properly expending funds from their
financial account, and thus maintaining compliance with any guidelines or
laws regulating the expenditure of funds from their account.” Id. 1 6. As
such, the Specification provides that the invention addresses the problems of
a complex process requiring outside help, ensuring proper expenditure of
funds, and ensuring compliance with regulations. See id. ^fl[ 5—6. These are
not problems rooted in technology arising out of computer networks, but
rather business and/or administrative problems existing prior to the Internet
and computers. See Spec. ^fl[ 2—5 (discussing legal requirements governing
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Application 13/826,925
payments and documentation). Further, although we do not see, and the
Appellants do not direct attention to, where the Specification provides that
the invention addresses a problem of prior art systems restricting
information causing inadequate eligibility protection, we note that
inadequate eligibility protection is also not a problem rooted in technology
arising out of networks and existed prior to the Internet.
Also, unlike DDR Holdings, here, the technical solution comprises
components of the claimed centralized computer system operating in their
normal capacities to provide a user interface to access, create, and provide
an account and information, receive, create, and update data and a data
record, cause funding of an account and issuance of a payment card,
determine eligibility by applying rules, and conditionally approve a request.
The Specification provides very few details in the way of the components,
but merely provides for a system with a generic platform, processors,
network, database, and portals (see Spec. Tflf 24—28, Figs. 1, 2), without any
particular inventive technology, to implement the abstract idea. Specifically,
the Specification provides for a computer network in the form of a widely
available payment network such as VISA or MASTERCARD. Spec. 124;
see also Appeal Br. 19. The Appellants do not direct attention to, and we do
not see, where the Specification provides for an improvement in the
technical functioning of these networks. The rules for determining payment
do not improve a technological process, but invoke computers in the analysis
of data. See Smart Systems, 873 F.3d at 1372—73. The claim “recite[s] an
invention that is merely the routine or conventional use of the Internet.”
DDR Holdings, 773 F.3d at 1258-59.
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Under the second step in the Alice framework, we adopt and find
supported the Examiner’s determination that the claim limitations, taken
individually or as an ordered combination, do not recite an inventive
concept. See Final Act. 2; Ans. 13. We are unpersuaded by the Appellants’
arguments that the claim limitations recite significantly more than the
abstract idea. See Appeal Br. 20—22. The Appellants recite the limitations
of the claim (id. at 21) and simply state that they
amount to significantly more than a patent upon the identified
abstract idea of administering a financial account for a user
because the features (a) effect a transformation of a particular
article to another state; (b) the features reflect an improvement in
existing technology that go beyond what is well-understood,
routine, and conventional in the field; and (c) the recited
elements, taken as a whole, do not effectively preempt or
foreclose all possible applications of the idea of administering a
restricted-use financial account.
Appeal Br. 21—22.
The Appellants do not provide further support or reasoning as to why
or how the limitations effect a transformation or are not well-understood,
routine, and conventional functions of a generic computer. As discussed
above, the centralized computer system comprises generic components
operating in their normal capacities. Accessing, creating, and providing an
account and information, receiving, creating, and updating data and a data
record, causing funding of an account and issuance of a payment card,
determining eligibility by applying rules, and conditionally approving a
request are all routine, well-understood, and routine functions of a generic
computer and “merely require generic computer implementation.” Smart
Systems, 873 F.3d at 1374 (quoting buySAFE, 765 F.3d at 1350). Further,
the claim does not pass the machine-or-transformation test because it is “not
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tied to any particular novel machine or apparatus, only to a general purpose
computer.” Ultramercial, 772 F.3d at 716—17; see also Smart Systems,
873 F.3d at 1375.
Finally, we are not persuaded of Examiner error by the Appellants’
argument that the claim is not directed to an abstract idea and recites an
inventive concept because it “do[es] not effectively preempt or foreclose all
possible applications of the idea of administering a restricted-use financial
account.” Appeal Br. 22; see also id. at 16. Although the Supreme Court
has described “the concern that drives this exclusionary principle [i.e., the
exclusion of abstract ideas from patent eligible subject matter] as one of pre­
emption,” see Alice, 134 S. Ct. at 2354, characterizing pre-emption as a
driving concern for patent eligibility is not the same as characterizing pre­
emption as the sole test for patent eligibility. “The Supreme Court has made
clear that the principle of preemption is the basis for the judicial exceptions
to patentability” and “[f]or this reason, questions on preemption are inherent
in and resolved by the § 101 analysis.” Ariosa Diagnostics, Inc. v.
Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (citing Alice,
134 S. Ct. at 2354). Although “preemption may signal patent ineligible
subject matter, the absence of complete preemption does not demonstrate
patent eligibility.” Id. The aforementioned concept is not sufficiently
limiting so as to fall clearly on the side of patent-eligibility.
Thus, we are not persuaded that the Examiner erred in rejecting
claim 1 under 35 U.S.C. § 101, and we sustain the Examiner’s rejection of
claim 1 and of claims 2—30, which fall with claim 1.
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DECISION
The Examiner’s rejection of claims 1—30 under 35 U.S.C. § 101 is
AFFIRMED.
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)(l)(iv).
AFFIRMED
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