Ex Parte CLARKE et al

Patent Trial and Appeal Board

Aug 29, 2018

14017142 (P.T.A.B. Aug. 29, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
14/017,142 09/03/2013 Trevor Fred Roy CLARKE
69849 7590 08/31/2018
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
379 Lytton Avenue
Palo Alto, CA 94301
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.
25GB-190876 5597
EXAMINER
DONLON, RY AND
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
08/31/2018 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):
svpatents@sheppardmullin.com
SheppardMullin_Pair@firsttofile.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte TREVOR FRED ROY CLARKE, WARREN DE VILLIERS,
ANDRE RYAN EDELBROCK, STEVE FROOK,
DARRYL GREEN, and KEEGAN JOHNSON
Appeal2016-007638
Application 14/017, 142 1
Technology Center 3600
Before BRUCE T. WIEDER, SHEILA F. McSHANE,
and MATTHEWS. MEYERS, Administrative Patent Judges.
McSHANE, Administrative Patent Judge.
DECISION ON APPEAL
Appellants seek our review under 35 U.S.C. § 134(a) of the
Examiner's final decision to reject claims 1-7 and 10-20. We have
jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 According to Appellants, the real party in interest is Ethoca Technologies,
Inc. Appeal Brief filed January 11, 2016, hereafter "App. Br.," 2.
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Application 14/017, 142
BACKGROUND
The invention is directed to sending notifications between parties
concerning possible fraudulent transactions. Specification, hereafter
"Spec.," ,r 5.
Claims 1 and 12 are the independent claims on appeal. Representative
claim 1 is reproduced from pages 26 and 27 of the Claims Appendix of the
Appeal Brief (Claims App.) as follows:
1. A stakeholder collaboration network system, comprising:
a transaction submission engine configured to facilitate
submission of transactions by a first stakeholder;
a transaction datastore, coupled to the transaction submission
engine, configured to store transaction records including
transaction data submitted by the first stakeholder;
an alert generation engine configured to generate an alert in
association with a first transaction record in the transaction
datastore, wherein the first transaction record includes
transaction data submitted by the first stakeholder;
an alert datastore, coupled to the alert generation engine,
configured to store alert records for alerts generated by the alert
generation engine;
a historical datastore configured to store historical records that
include historical transaction data of the first transaction record,
wherein the historical transaction data of the first transaction
record is consistent for the first stakeholder and a second
stakeholder associated with the first transaction;
a report generation engine, coupled to the historical datastore,
configured to generate reports using the historical records;
wherein, in operation:
the transaction submission engine:
receives transaction data of a first transaction from
the first stakeholder and stores the transaction data in the
transaction datastore;
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determines from the transaction data if the first
transaction has a level of fraud risk that exceeds an
unacceptable fraud risk threshold;
sends the transaction data of the first transaction
record to an assessor for determining timely confirming
unacceptable fraud risk for the first transaction to
validate the first transaction as an assessor-confirmed
fraud, if it is determined that the first transaction has a
level of fraud risk that exceeds the unacceptable fraud
risk threshold, in validating the first transaction as the
assessor-confirmed fraud, the assessor configured to
determine if the first transaction has the level of fraud
risk below a call-check threshold, if it is determined that
the first transaction has the level of fraud risk below the
call-check threshold, the assessor further configured to
contact a relevant account to validate the first
transactions as the assessor-confirmed fraud;
the alert generation engine receives an assessor-
confirmed fraud associated with the first transaction,
generates a confirmed fraud alert associated with the first
transaction in response to receiving the confirmed fraud
indication, generates a fraud alert message indicating the
assessor-confirmed fraud alert, sends the fraud alert
message to the second stakeholder, and stores the
assessor-confirmed fraud alert in the alert datastore;
the transaction submission engine receives from
the second stakeholder feedback associated with the first
transaction related to countermeasures taken by the
second stakeholder in response to the assessor-confirmed
fraud alert;
the report generation engine generates a first report
for the first stakeholder and a second report for the
second stakeholder, wherein the first report includes the
second stakeholder feedback and the first report and the
second report include data from the first transaction that
is consistent for the first report and the second report.
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The Examiner rejects claims 1-7 and 10-20 under 35 U.S.C. § 101 as
reciting a judicial exception without significantly more. The Examiner
rejects claims 12, 13, 15, 16, 18, 19, and 20 as unpatentable under 35 U.S.C.
I03(a) as obvious over Liu,2 Ahles, 3 Welsh, 4 and John; 5 and claims 1-7, 6
14, 17, and 19 as unpatentable under 35 U.S.C. I03(a) as obvious over Liu,
John, Ahles, Welsh, and Larkin. 7 Final Action mailed August 24, 2015,
hereafter "Final Act.," 2-10; see also Examiner's Answer mailed June 3,
2016, hereinafter "Ans.," 2.
DISCUSSION
§ 101
Appellants argue the§ 101 rejection using independent claim 1 as
representative. See App. Br. 5-13. We will address the rejection in the
same manner.
The Examiner determines that the claims, and more specifically,
representative claim 1, are directed to non-statutory subject matter because
they are directed to commercial transactions, which is a fundamental
economic practice, as well as a method of organizing human activity. Final
Act. 2-3. Additional claim elements are determined to not be significantly
more than an abstract idea because the steps of the claims as recited are
insignificant extra solution activity that do not become non-abstract by
limiting the invention to a particular field of use or environment. Id. at 3.
The Examiner further determines that the application of the abstract idea is
2 U.S. Application No. 2010/0287099 Al (published November 11, 2010).
3 U.S. Application No. 2008/0021803 Al (published January 24, 2008).
4 U.S. Application No. 2007/0174214 Al (published July 26, 2007).
5 U.S. Application No. 2008/0288405 Al (published November 20, 2008).
6 Claims 8 and 9 have been cancelled. See Claims App. 28.
7 U.S. Application No. 2011/0276489 Al (published November 10, 2011).
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by use of a generic computer to perform generic computer functions, and "is
nothing more than the instruction to implement the abstract idea (i.e.
processing transaction[ s] and generating fraud report and preventive steps)
in a particular, albeit well-understood, routine and conventional
technological environment." Id. at 4.
Appellants argue that the rejection of claim 1 is flawed and no prima
facie case has been established because the Examiner has provided
insufficient reasoning and information in support of the rejection because the
allegations concerning the alleged abstract idea are insufficient to support
the characterization as an economic activity or why the additional elements
do not amount to more than the judicial exception. App. Br. 9-10.
Appellants allege there is no showing that the claim is directed to a
fundamental economic practices or certain methods of organizing human
activities and there is no identification of a specific abstract idea. Id. at 10-
11. Appellants further argue that the claim is similar to Enfzsh, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) ("Enfzsh") because
the claim is directed to an improvement to computer technology because,
due to the use of technology, the speed of communications allows parties to
communicate "and cause a transaction to be canceled thinking that the
transaction is fraudulent, when it is actually not fraudulent," so "confirming
transactions that are actually fraudulent as being fraudulent is useful in
preventing interference of transactions that are actually not fraudulent."
Reply Brief mailed August 3, 2016, hereafter "Reply Br.," 4.
Appellants argue that even if the claim were found to be directed to an
abstract idea, there is no showing by Examiner that the claim is not directed
to "significantly more." App. Br. 11. Appellants aver that the claimed steps
"would not be possible without unconventional and/or specialized devices
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configured to monitor fraud." Id. at 12. Appellants further contend that
aspects of generating a report for potential fraudulent activity and other
aspects of the claimed collaboration, such as the contact with cardholder and
merchant, "[was] not what were considered when fraud monitoring systems
of the past were implemented." Id. at 12 (citing Spec. ,r,r 2-3). Appellants
refer to DDR Holdings, LLC v. Hotels.com, 773 F.3d 1245 (Fed Cir. 2014)
("DDR"), arguing that the instant claimed solution is similarly rooted in
computer technology. Id. Appellants also allege that the claim requires a
specialized device to monitor and communicate between the merchant
device and others. Id.
To provide context, 35 U.S.C. § 101 provides that a new and useful
"process, machine, manufacture, or composition of matter" is eligible for
patent protection. The Supreme Court has made clear that the test for patent
eligibility under Section 101 is not amenable to bright-line categorical rules.
See Bilski v. Kappas, 561 U.S. 593, 609 (2010). There are, however, three
limited, judicially created exceptions to the broad categories of patent-
eligible subject matter in § 101: laws of nature; natural phenomena; and
abstract ideas. See Mayo Collaborative Services v. Prometheus Labs., Inc.,
566 U.S. 66, 70 (2012).
In Alice Corporation Pty, Ltd. v. CLS Bank International, 134 S. Ct.
2347 (2014), the Supreme Court reiterated the framework set forth
previously in Mayo, "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 (citation omitted).
Under Alice, the first step of such analysis is to "determine whether the
claims at issue are directed to one of those patent-ineligible concepts." Id.
( citation omitted). If it is determined that the claims are directed to a patent-
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ineligible concept, the second step in the analysis 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 79, 78). 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).
After considering Appellants' arguments and the evidence presented
in this Appeal for the§ 101 rejection, we are not persuaded that Appellants
identify reversible error. We add the following for emphasis.
We agree with the Examiner that all the elements of claim 1 are
directed towards the abstract idea of executing commercial transactions,
both a method of organizing human activity and a fundamental economic
practice. The Federal Circuit has held certain fundamental economic and
conventional business practices, like verifying credit card transactions (see
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1370 (Fed. Cir.
2011)), and collecting and analyzing information to detect and notify of
misuses (see FairWarning IP, LLC v. Iatric Systems, Inc., 839 F.3d 1089,
1093-94 (Fed. Cir. 2016)), as being abstract ideas implemented on
computers. The processing of transactions and preventing fraud of claim 1
is similar to these abstract ideas, and, thus, claim 1 is directed to an abstract
idea.
Further, similar to the claims at issue in Electric Power Grp, LLC v.
Alstom S.A., 830 F.3d 1350, 1353-54 (Fed. Cir. 2016), the claimed invention
here receives, manipulates, analyzes, and presents information, but does not
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use any particular inventive technology for performing those functions. That
the information pertains to commercial transactions that include collecting
and analyzing information with reporting of fraud detection is of little
consequence because collecting, analyzing, and reporting such information
does not make the collection and analysis non-abstract. See SAP America,
Inc. v. Investpic, LLC, 2018 WL 3656048 at *1, *5 (Fed. Cir. 2018) ("SAP")
("No matter how much of an advance in the finance field the claims recite,
the advance lies entirely in the realm of abstract ideas, with no plausibly
alleged innovation in the non-abstract application realm"). Further,
Appellants' arguments about the alleged similarities to Enfish fail to
persuade because its claims were deemed to be patent eligible because they
were directed to improvements in the way computers and networks carry out
their basic functions. See Enfish, 822 F.3d at 1335-36. Here, the focus of
the claims is not to improved computer operations or functions, but rather it
is directed to commercial transactions, namely, identification of potential
fraud -an abstract idea.
Turning to step 2 of Alice, Appellants characterize the invention as
significantly more than an abstract idea because the invention is only
possible by the use of unconventional and/or specialized devices, is rooted in
computer technology, and differs from previously-known fraud detection
methods. App. Br. 11-12. We do not find these arguments to be persuasive.
Although Appellants allege the use of unconventional or specialized
devices, the Specification instead identifies the use of a computer system
with a processor (including a general-purpose processor), memory, non-
volatile storage, and an interface (see Spec. ,r,r 23-29), which uses the
Internet (id. at ,r 22), where
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[t]he algorithms and displays presented herein are not inherently
related to any particular computer or other apparatus. Various
general purpose systems may be used with programs to configure
the general purpose systems in a specific manner in accordance
with the teachings herein ....
Spec. ,r 32.
On this issue, the Federal Circuit's analysis in SAP is instructive:
Some of the claims require various databases and processors,
which are in the physical realm of things. But it is clear, from
the claims themselves and the specification, that these limitations
require no improved computer resources [patent owner] claims
to have invented, just already available computers, with their
already available basic functions, to use as tools in executing the
claimed process.
SAP, 2018 WL 3656048 at *7.
There is a difference between improving computer functionality and
use of existing computers to perform tasks, and here, there is no underlying
change as to how the technology operates under claim 1. Moreover, in DDR
the Federal Circuit found the claims patent eligible because they claim a
solution "necessarily rooted in computer technology in order to overcome a
problem specifically arising in the realm of computer networks." DDR, 773
F.3d at 1257. Here, the Specification does not disclose that fraudulent
transactions arise from the per se use of computer networks, rather the
identified scenario where fraud detection is related to the use of a credit card
that belongs to someone else. Spec. ,r 2. Here, the claim only implements
the abstract idea and it is "clear that the basic character of a process claim
drawn to an abstract idea is not changed by claiming only its performance by
computers, or by claiming the process embodied in program instructions on
a computer readable medium." CyberSource Corp., 654 F.3d at 1375.
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Therefore, we sustain the rejection of claims 1-7 and 10-20 under
§ 101.
§ 103
Appellants allege that the prior art relied upon by the Examiner does
not teach or suggest some of the limitations of independent claims 1 and 12.
App. Br. 12-24. More specifically, Appellants argue that John fails teach
the claim limitation of validation of the first transaction as an assessor-
confirmed fraud by the assessor, with the "assessor further configured to
contact a relevant account to validate the commercial transaction as the
assessor-confirmed fraud." See Reply Br. 7 ( citing Final Act. 7).
After considering Appellants' contentions and the evidence presented
in this Appeal, we are persuaded that Appellants identify reversible error,
and we therefore reverse the§ 103 rejection. We are not persuaded that the
Examiner has provided sufficient evidence to support that John teaches the
"assessor" limitation. More specifically, we cannot discern a portion of John
that discloses an "assessor further configured to contact a relevant account to
validate the commercial transaction," or any findings of one of ordinary skill
in the art on the teaching of the claim limitation in the prior art. We also do
not discern that the additional prior art relied upon in the rejections cure this
deficiency, and, therefore, we cannot sustain the § 103 rejection of the
claims.
SUMMARY
The rejection of claims 1-7 and 10-20 under 35 U.S.C. § 101 is
sustained.
The rejection of claims 1-7 and 10-20 under 35 U.S.C. § 103 is not
sustained.
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No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a).
AFFIRMED
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