Ex Parte Blythe

Patent Trials and Appeals Board

Mar 25, 2019

11964859 - (D) (P.T.A.B. Mar. 25, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/964,859 12/27/2007
71973 7590
Budzyn IP Law, LLC
120 Eagle Rock Avenue
Suite 328
East Hanover, NJ 07936
03/25/2019
FIRST NAMED INVENTOR
Simon Blythe
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.
1788-14 2488
EXAMINER
CHANG, EDWARD
ART UNIT PAPER NUMBER
3696
MAIL DATE DELIVERY MODE
03/25/2019 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 SIMON BLYTHE
Appeal2017-001792 1
Application 11/964,8592
Technology Center 3600
Before BIBHU R. MOHANTY, NINA L. MEDLOCK, and
ROBERT J. SILVERMAN, Administrative Patent Judges.
MEDLOCK, Administrative Patent Judge.
DECISION ON APPEAL
1 Our decision references Appellant's Appeal Brief ("App. Br.," filed
March 28, 2016) and Reply Brief ("Reply Br.," filed November 15, 2016),
and the Examiner's Answer ("Ans.," mailed September 19, 2016), Advisory
Action ("Adv. Act.," mailed November 30, 2015), and Final Office Action
("Final Act.," mailed September 16, 2015). The record includes a transcript
of the March 13, 2019 oral hearing.
2 Appellant identifies MasterCard International, Inc. as the real party in
interest. App. Br. 2.
Appeal2017-001792
Application 11/964,859
STATEMENT OF THE CASE
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 12-16, 18-20, and 22. We have jurisdiction under
35 U.S.C. § 6(b). An oral hearing in this appeal was held on March 13,
2019.
We AFFIRM.
CLAIMED INVENTION
Appellant's claimed invention "generally relates to payment
transaction systems, and more particularly to conducting a payment
transaction using a pre-allocated resource" (Spec. 1, 11. 6-8).
Claim 12, reproduced below with bracketed notations added, is the
sole independent claim and representative of the claimed subject matter:
12. A method for conducting an electronic payment
transaction in electronic cashless transaction processing
compnsmg:
[(a)] storing on a payment device a user specified
allowable first resource amount that can be charged to a user
account and at least one user specified class of good or service
associated with said user specified allowable first resource
amount, said payment device associated with said user account;
[ (b)] transmitting with said payment device a transaction
instruction to a payment terminal, said transaction instruction
including said user specified allowable first resource amount and
said at least one user specified class of good or service;
[ ( c)] transmitting with said payment terminal an
authorization request through a payment network to a credit
grantor, said authorization request including a second resource
amount to charge said user account, a merchant identifier
associated with said second resource amount, said user specified
allowable first resource amount, and said at least one user
specified class of good or service, said merchant identifier
determined by said payment terminal, said merchant identifier
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representing merchants providing particular classes of goods and
services;
[ ( d)] comparing with a control module, configured in a
server associated with said credit grantor, said user specified
allowable first resource amount to said second resource amount;
[ ( e)] comparing with said control module, configured in
a server associated with said credit grantor, said at least one user
specified class of good or service to said merchant identifier; and
[(f)] authorizing with said control module, configured in
a server associated with said credit grantor, the charging of said
user account for said second resource amount for said merchant
identifier when said second resource amount is less than said user
specified allowable first resource amount and said merchant
identifier corresponds to said at least one user specified class of
good or service based on the comparison of said merchant
identifier and said at least one user specified class of good or
service.
REJECTION
Claims 12-16, 18-20, and 22 are rejected under 35 U.S.C. § 101 as
directed to non-statutory subject matter.
ANALYSIS
Appellant argues the pending claims as a group (App. Br. 4--7).
We select independent claim 12 as representative. The remaining claims
stand or fall with claim 12. See 37 C.F.R. §4I.37(c)(l)(iv).
Under 35 U.S.C. § 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. The Supreme Court, however, has long interpreted§ 101
to include an implicit exception: "[l]aws of nature, natural phenomena, and
abstract ideas" are not patentable. Alice Corp. v. CLS Bank Int 'l, 573 U.S.
208,216 (2014).
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The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66 (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 Corp., 573 U.S. at 217.
The first step in that analysis is to "determine whether the claims at issue are
directed to one of those patent-ineligible concepts." Id. If the claims are not
directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry
ends. Otherwise, the inquiry proceeds to the second step where the elements
of the claims are considered "individually and 'as an ordered combination"'
to determine whether there are additional elements that "'transform the
nature of the claim' into a patent-eligible application." Id. (quoting Mayo,
566 U.S. at 79, 78).
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. Therefore, the Federal Circuit has
instructed that claims are to be considered in their entirety to determine
"whether their character as a whole is directed to excluded subject matter."
McRO, Inc. v. Bandai Namco Games Am., Inc., 837 F.3d 1299, 1312
(Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc.,
790 F.3d 1343, 1346 (Fed. Cir. 2015)).
Focusing on step one of the Mayo/Alice framework, we are not
persuaded, as an initial matter, that the Examiner erred in determining that
claim 12 is directed to an abstract idea. 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
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directed to excluded subject matter."' Enfzsh, LLC v. Microsoft Corp.,
822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp.,
790 F.3d at 1346). 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. Here, the Specification, including the claim language, make
clear that the claims focus on an abstract idea, and not on any improvement
to computer technology and/or functionality.
The Specification is entitled "PAYMENT TRANSACTION
SYSTEM," and discloses that the present invention relates, in particular, to
"conducting a payment transaction using a pre-allocated resource" (Spec. 1,
11. 6-8). The Specification describes, in the "Brief Description of the
Related Art" section, that consumers increasingly are using payment
devices, e.g., credit cards, rather than cash, to purchase a wide range of
goods and services (id. at 1, 11. 12-17), and that with the increased
availability of payment devices, consumers increasingly are using these
devices to cover gaps in their spending (id. at 1, 11. 27-29). As a result,
"consumers are finding themselves in situations with increased financial
burdens from which it can be difficult to recover" (id. at 1, 11. 29-31 ). Also
because many of these payment devices are small, they are especially
vulnerable to theft and, once stolen, can be used in a fraudulent transaction
(id. at 2, 11. 1-5).
The claimed invention is ostensibly intended to address these issues
by providing a system that allows a user of a payment device to specify a
class of good or service and an allowable resource amount that can be
charged to a user account for the selected class of good or service (id. at 2,
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11. 10-16). A charge to the user account is then authorized based on the
selected class of good or service and the allowable resource amount (id. at 2,
11. 16-19).
Understood in light of the Specification, claim 12 is, thus, directed to
a method for conducting an electronic payment transaction comprising:
(1) storing user-specified transaction parameters , i.e., "storing ... a user
specified allowable first resource amount that can be charged to a user
account and at least one user specified class of good or service associated
with said user specified allowable first resource amount" (step (a));
(2) transmitting the user-specified parameters to a payment terminal, i.e.,
"transmitting ... a transaction instruction to a payment terminal, ...
including said user specified allowable first resource amount and said at
least one user specified class of good or service" (step (b )); (3) transmitting
an authorization request, including transaction information and the user-
specified parameters, to a credit grantor, i.e., "transmitting ... an
authorization request ... to a credit grantor, .. .including a second resource
amount to charge said user account, a merchant identifier ... , said user
specified allowable first resource amount, and said at least one user specified
class of good or service" ( step ( c) ); ( 4) comparing the transaction
information and the user-specified parameters, i.e., "comparing ... said user
specified allowable first resource amount to said second resource amount"
and "comparing ... said at least one user specified class of good or service
to said merchant identifier" ( steps ( d) and ( e) ); and ( 5) authorizing the
charging of a user account based on the comparison, i.e., "authorizing ...
the charging of said user account for said second resource amount ... when
said second resource amount is less than said user specified allowable first
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resource amount and said merchant identifier corresponds to said at least one
user specified class of good or service" (step (f)). In other words, claim 12
is directed to authorizing a payment transaction by collecting and analyzing
(i.e., comparing) information, and reporting the results of the collection and
analysis, i.e., to a commercial interaction, which is a method of organizing
human activity and, therefore, an abstract idea. See 2019 REVISED PATENT
SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50, 52 (Jan. 7, 2019)
("Revised Guidance").
The Federal Circuit has held consistently that abstract ideas include
the concepts of collecting data, analyzing the data, and displaying the results
of the collection and analysis, including when limited to particular content.
See, e.g., Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d
1332, 1340 (Fed. Cir. 2017) (identifying the abstract idea of collecting,
displaying, and manipulating data); Electric Power Group, LLC v. Alstom
S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016) (characterizing collecting
information, analyzing information by steps people go through in their
minds, or by mathematical algorithms, and presenting the results of
collecting and analyzing information, without more, as matters within the
realm of abstract ideas); see also SAP America, Inc. v. InvestPic, LLC,
898 F.3d 1161, 1168 (Fed. Cir. 2018) ("As many cases make clear, 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." (quoting Elec. Power Grp., 830 F.3d
at 1353, 1355 (citing cases)). Authorizing a payment transaction, based on a
comparison of a second resource amount to an allowable first resource
amount and a comparison of a merchant identifier to a user specified class of
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good or service, also is substantially similar to other concepts that the courts
have held abstract. See, e.g., Berkheimer v. HP, Inc., 881 F.3d 1360, 1366
(Fed. Cir. 2018) (concluding that parsing, comparing, storing, and editing
data are abstract ideas); SmartGene, Inc. v. Advanced Biological Labs.,
555 F. App'x 950 (Fed. Cir. 2014) (comparing new and stored information
and using rules to identify options is an abstract idea).
We find no indication in the Specification, nor does Appellant direct
us to any indication, that the operations recited in claim 12 invoke any
assertedly inventive programming, require any specialized computer
hardware or other inventive computer components, i.e., a particular machine,
or that the claimed invention is implemented using other than generic
computer components to perform generic computer functions. See DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014)
("[ A ]fter Alice, there can remain no doubt: recitation of generic computer
limitations does not make an otherwise ineligible claim patent-eligible.").
We also find no indication in the Specification that the claimed
invention effects a transformation or reduction of a particular article to a
different state or thing. Nor do we find anything of record, short of attorney
argument, that attributes any improvement in computer technology and/or
functionality to the claimed invention or that otherwise indicates that the
claimed invention integrates the abstract idea into a "practical application,"
as that phrase is used in the Revised Guidance. 3
3 We note that Appellant's briefs were filed, and the Examiner's Answer
mailed, before the USPTO issued the Revised Guidance, which, by its terms,
applies to all applications, and to all patents resulting from applications, filed
before, on, or after January 7, 2019. In accordance with the Revised
Guidance, a claim is generally considered "directed to" an abstract idea if
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Appellant argues that "[t]he ability to store user specified parameters
on a payment device, with those parameters being merged with other details
in an authorization request" provides for improved computing because
"without the full process of claim 12," the authorization request would be
required to be routed through a user-account-based database to determine if
there are any related user-specified parameters (App. Br. 6). Appellant,
thus, maintains the claimed invention provides improved computing because
it avoids additional routing to identify user-specified characteristics (id.
at 6-7). Yet, we find nothing in the Specification that attributes an
improvement in computer functionality to the claimed invention. And, as
the Examiner observes, Appellant does not explain how "less routing" is
improving computing (Ans. 4).
Responding to the Examiner's Answer, and citing the USPTO's then
newly issued November 2, 2016 Memorandum to the Patent Examining
(1) the claim recites subject matter falling within one of the following
groupings of abstract ideas: (a) mathematical concepts; (b) certain methods
of organizing human activity, e.g., fundamental economic principles or
practices, commercial or legal interactions; and ( c) mental processes, and
(2) the claim does not integrate the abstract idea into a practical application,
i.e., apply, rely on, or use the judicial exception in a manner that imposes a
meaningful limit on the judicial exception, such that the clam is more than a
drafting effort designed to monopolize the judicial exception. See Revised
Guidance, 84 Fed. Reg. at 54--55. The Revised Guidance references the
MANUAL OF PATENT EXAMINING PROCEDURE ("MPEP") §§ 2106.05(a}-(c)
and (e}-(h) in describing the considerations that are indicative that an
additional element or combination of elements integrates the judicial
exception, e.g., the abstract idea, into a practical application. Id. at 55. If
the recited judicial exception is integrated into a practical application, as
determined under one or more of these MPEP sections, the claim is not
"directed to" the judicial exception.
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Corps, 4 Appellant notes that, according to the Memorandum, an indication
that a claim is directed to an improvement in computer-related technology
may include: (1) a teaching in the Specification about how the claimed
invention improves a computer or other technology; or (2) a particular
solution to a problem or a particular way to achieve a desired outcome
defined by the claimed invention, as opposed to merely claiming the idea of
a solution or outcome (Reply Br. 2). Pointing to the disclosure in the
Specification at page 2, lines 11-19 and page 11, lines 17-25, Appellant,
thus, ostensibly maintains that the Specification there teaches how the
claimed invention is "a significant improvement both in computing and in
the technology of electronic payment processing" (id. at 3).
The Specification describes, at page 2, lines 11-19, that the disclosed
system includes an allocation module that allows a user of a payment device
to specify a class of good or service and an allowable resource amount that
can be charged to a user account for the selected class of good or service,
and a control module that authorizes a charge to the user account based on
the selected class of good or service and the allowable resource amount.
And the Specification further discloses, at page 11, lines 17-25, the several
advantages that may stem from providing the payment device of the present
invention on which the user-specified information is stored, i.e., allowing
consumers to gain better control of their expenditures and minimizing the
likelihood of fraud based on illicit use of the payment device. Appellant
4 The memorandum, entitled, "Recent Subject Matter Eligibility Decisions"
(available at https://www.uspto.gov/sites/default/files/documents/McRo-
Bascom-Memo.pdf), provides a discussion of the Federal Circuit's decisions
in McRO and BASCOM Global Internet Services, Inc. v. AT&T
Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016).
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asserts that the claimed invention provides "improvement both for client
control and anti-fraud," and that "[t]his is a significant improvement both in
computing and in the technology of electronic payment processing." But,
even accepting Appellant's argument, there is a fundamental difference
between computer functionality improvements, on the one hand, and uses of
existing computers as tools to perform a particular task, on the other.
Indeed, the Federal Circuit applied this distinction in Enfzsh, LLC v.
Microsoft Corp., 822 F.3d. 1327 (Fed. Cir. 2016) in rejecting a§ 101
challenge at the step one stage in the Alice analysis because the claims at
issue focused on a specific type of data structure, i.e., a self-referential table
for a computer database, designed to improve the way a computer carries out
its basic functions of storing and retrieving data, and not on asserted
advances in uses to which existing computer capabilities could be put. Id.
at 1335-36.
We find no parallel here between claim 12 and the claims in Enfzsh
nor any comparable aspect in claim 12 that represents an improvement to
computer functionality. The alleged advantages that Appellant touts do not
concern an improvement to computer capabilities but instead relate to an
alleged improvement in processing electronic payments - a process in
which a computer is used as a tool in its ordinary capacity.
Further, to the extent Appellant maintains that the claimed invention
is patent-eligible because claim 12 is not preemptive of all methods of
electronic payment processing (Reply Br. 4 ), we note that preemption is not
the sole test for patent-eligibility. Although the Supreme Court has
described "the concern that drives [the exclusion of abstract ideas from
patent eligible subject matter] as one of pre-emption," Alice Corp., 573 U.S.
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at 216, characterizing preemption as a driving concern for patent eligibility
is not the same as characterizing preemption 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 "[ fJor
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 Corp., 134 S. Ct. at 2354).
"[P]reemption may signal patent ineligible subject matter, [but] the absence
of complete preemption does not demonstrate patent eligibility." Id.
Turning to step two of the Mayo/Alice framework, Appellant notes
that the Examiner has taken the position that the claimed invention falls
within methods of organizing human activity and "provides nothing
significantly more, such as: improvements to another technology or
technical field; improvements to the functioning of the computer itself; or,
meaningful limitations beyond generally linking the use of the abstract idea
to a particular technological environment" (App. Br. 5 ( citing Final Act. 4)).
Appellant asserts, "[ c ]ontrary to the Examiner's assertions, there is in fact
improvement to the computing itself' (id.). But, as described above, we are
not persuaded that the claimed invention involves any improvement in
computer functionality.
Appellant also challenges the Examiner's determination that the
elements of the claimed method "execute in a manner routinely and
conventionally expected of these elements" (id.). In this regard, Appellant
notes that claim 12 recites "storing on a payment device a user specified
allowable first resource amount ... and at least one user specified class of
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good or service associated with said user specified allowable first resource
amount" (id.).
Appellant argues that storing particular parameters on a payment
device is "not conventional or routine" (id. at 6). Yet, Appellant cannot
reasonably deny that storing data on a payment device, which Appellant
concedes, and the Specification explicitly discloses, "can be any type of
personal computer device, including but not limited to a personal computer,
such as a lap top computer, handheld computer, mobile phone, personal
digital assistant (PDA), and/or any other device comprising electronic and/or
magnetic components, such as a smart card and magnetic stripe card" (see
Spec. 6), is one of the most basic functions of such a device. 5 See 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."); see also
Berkheimer v. HP, Inc., 890 F.3d 1369, 1373 (Fed. Cir. 2018) (Moore, J.,
concurring) ("[I]n accordance with Alice, [ the Federal Circuit has]
repeatedly recognized the absence of a genuine dispute as to eligibility for
5 The USP TO' s April 19, 2018 Memorandum to the Examining Corps
entitled, "Changes in Examination Procedure Pertaining to Subject Matter
Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP,
Inc.)," available at https://www.uspto.gov/sites/default/files/
documents/memo-berkheimer-20180419 .pdf, expressly directs that an
examiner may support the position that an additional element ( or
combination of elements) is well-understood, routine or conventional with
"[a] citation to an express statement in the specification ... that
demonstrates the well-understood, routine, conventional nature of the
additional element(s)" (id. at 3).
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the many claims that have been defended as involving an inventive concept
based merely on the idea of using existing computers or the Internet to carry
out conventional processes, with no alteration of computer functionality.").
The same also is true of the claimed step of "transmitting with said
payment terminal an authorization request through a payment network to a
credit grantor ... including a second resource amount to charge said user
account, a merchant identifier associated with said second resource amount,
said user specified allowable first resource amount, and said at least one user
specified class of good or service." Appellant argues, as best understood,
that the payment terminal is required to merge, into the authorization
request, details related to the financial transaction (i.e., a second resource
amount to charge said user account, a merchant identifier associated with
said second resource amount) and details transmitted to the payment
terminal from the payment device (i.e., the user specified allowable first
resource amount and the at least one user specified class of good or service),
and that there is no showing as to the routine and conventional nature of this
processing (App. Br. 6). But, again, Appellant cannot reasonably deny that
combining various data by a payment terminal, which the Specification
explicitly discloses as "a computer device" (Spec. 6), is not a basic function
of such a device.
For much the same reasons, we also are not persuaded of Examiner
error by Appellant's argument that there is no showing that the
"transmission of user-specified details, which are stored on the associated
payment device to the payment terminal is of routine or conventional nature"
(App. Br. 6). The Specification discloses, with reference to Figures 1 and 4,
that payment device 12 initiates a network connection 70 to the payment
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terminal 14 (Spec. 11 ). In one embodiment, where the payment device is a
cellular phone, the Specification discloses that a telephone company
(TELCO) provider can be used as a gateway into one or more payment
networks, and in another embodiment, where the payment device is a smart
card, the Specification states that the payment device initiates the network
connection by polling for a wireless network connection "as is known in the
art" (id. at 11-12). In other words, it appears clear from the Specification
that the data stored on the payment device are transmitted to the payment
terminal using generic network components operating in their normal,
routine, and expected manner.
We are not persuaded, on the present record, that the Examiner erred
in rejecting claim 12 under 35 U.S.C. § 101. Therefore, we sustain the
Examiner's rejection of claim 12, and claims 13-16, 18-20, and 22, which
fall with claim 12.
DECISION
The Examiner's rejection of claims 12-16, 18-20, and 22 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)(l)(iv).
AFFIRMED
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