Ex Parte Davis et al

Patent Trial and Appeal Board

Jul 23, 2018

10811093 (P.T.A.B. Jul. 23, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
10/8ll,093 03/26/2004
30743 7590 07/24/2018
W&CIP
11491 SUNSET HILLS ROAD
SUITE 340
RESTON, VA 20190
FIRST NAMED INVENTOR
Steven Davis
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.
12490002AA 9722
EXAMINER
ANDERSON, JOHN A
ART UNIT PAPER NUMBER
3692
MAIL DATE DELIVERY MODE
07/24/2018 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 STEVEN DA VIS,
MICHAEL DAVISON,
MARTIN KLAMEN,
JAMES DERIVAN,
BOBBY BALLARD,
STEPHEN W ANGNER,
ROZ DEL LA ROSA, and
CHARANJIT SINGH
Appeal2016-006172
Application 10/811,093 1
Technology Center 3600
Before HUBERT C. LORIN, ANTON W. PETTING, and
ROBERT J. SILVERMAN, Administrative Patent Judges.
LORIN, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Stephen Davis, et al. (Appellants) seek our review under 35 U.S.C.
§ 134(a) of the Final Rejection of claims 22, 24, and 26-29. We have
jurisdiction under 35 U.S.C. § 6(b ).
1 The Appellants identify EFT Network, Inc. as the real party in interest.
App. Br. 2.
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We AFFIRM.
SUMMARY OF DECISION
THE INVENTION
Claim 27, reproduced below, is illustrative of the subject matter on
appeal.
27. A remote check deposit method by which is deposited a plurality
of checks including both a consumer check and a non-consumer check
each comprising a Magnetic Ink Character Recognition (MICR) line,
each MICR line having a format, without manual sorting of the non-
consumer checks and the consumer checks prior to deposit,
compnsmg:
scanning, into a single point of entry, the checks including the
consumer check and the non-consumer check;
electronically depositing both the consumer check and the non-
consumer check after the consumer check and the non-consumer
check have been scanned into the single point of entry, provided that
no manual sorting of consumer checks from non-consumer checks has
been performed before deposit.
THE REJECTIONS
The Examiner relies upon the following as evidence of
unpatentability:
Sanders
Stoutenburg
US 2003/0158811 Al
US 2007 /0029376 Al
The following rejections are before us for review:
2
Aug. 21, 2003
Feb. 8,2007
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1. Claims 22, 24, and 26-29 are rejected under 35 U.S.C. § 101 as being
directed to judicially-excepted subject matter.
2. Claims 22, 24, and 26-29 are rejected under 35 U.S.C. § 112, first
paragraph, for failing to comply with the written description
requirement.
3. Claims 22 and 26-29 are rejected under 35 U.S.C. § 102(e) as being
anticipated by Sanders.
4. Claim 24 is rejected under 35 U.S.C. § 103(a) as being unpatentable
over Sanders and Stoutenburg.
ISSUES
Did the Examiner err in rejecting claims 22, 24 and 26-29 under 35
U.S.C. § 101 as being directed to non-statutory subject matter?2
Did the Examiner err in rejecting claims 22, 24, and 26-29 under 35
U.S.C. § 112, first paragraph, for failing to comply with the written
description requirement?
Did the Examiner err in rejecting claims 22 and 26-29 under 35
U.S.C. §102(e) as being anticipated by Sanders?
Did the Examiner err in rejecting claim 24 under 35 U.S.C. § 103(a)
as being unpatentable over Sanders and Stoutenburg?
2 The Final Rejection presents a question of patent-eligibility under § 101
that does not appear to have been withdrawn. Final Rej. 2. The Answer
presents the same question but with a different analysis, designated as a new
ground of rejection. Ans. 2. Thus, there appears to be two outstanding
questions of patent-eligibility under§ 101. We will consolidate them and
address them as one.
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ANALYSIS
The rejection of claims 22, 24 and 26-29 under 35 US.C. § 101 as being
directed to non-statutory subject matter.
The Appellants argued these claims mainly as a group. See App. Br.
13-15 and Reply Br. 1-5. We select claim 27 as the representative claim for
this group, and the remaining claims 22, 24, 26, 28, and 29 stand or fall with
claim 22. 37 C.F.R. § 4I.37(c)(l)(iv). However, some of the Appellants'
statements directed to a specific claim, such as claim 22, will be addressed
accordingly.
Alice Corp. Proprietary Ltd. v. CLS Bank International, 134 S. Ct.
2347 (2014) identifies a two-step framework for determining whether
claimed subject matter is judicially-excepted from patent-eligibility under 35
U.S.C. § 101.
According to Alice step one, "[ w ]e must first determine whether the
claims at issue are directed to a patent-ineligible concept," such as an
abstract idea. Alice, 134 S. Ct. at 2355.
In that regard, the Examiner determined that (a) "The claim(s) are
directed to the abstract idea of transmitting information to conduct financial
transactions. Processing a plurality of checks is a fundamental economic
practice and thus, the claims include an abstract idea." Final Rej. 2. And (b)
Claims 22, 24, 26-29 are directed to an abstract idea of sorting and
transmitting information to conduct financial transactions.
The current implementation is based on ... the series of steps of
scanning checks, electronically depositing checks, format-analyzing
MICR line, categorizing checks, forwarding and depositing the checks
record.
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Such functions relating to the economy and commerce form the basis
of fundamental economic practices and thus directed to an abstract
idea.
The steps of scanning checks, electronically depositing checks,
format-analyzing MICR line, categorizing checks, forwarding and
depositing the checks records describe manipulating of information by
comparing and sorting the information based on a subscriber
preference.
The step of formatting organizes the information into blocks to
facilitate transmission. The step of categorizing checks describe the
sorting of information based on a pre-described format. These steps
describe the abstract idea of comparing and organizing information
for transmission.
The reason why the limitations are considered an abstract idea is
comparing and organizing information for transmission as described
in the claim can be performed mentally. The steps are similar to the
concepts and ideas that have been identified as abstract by the courts.
The idea of using categories to organize and store information for
transmission was considered to be abstract in Cyberfone and the Idea
of comparing new and stored information and using rules to identify
options was considered to be abstract in SmartGene.
Ans. 2-3.
The Appellants challenge the Examiner's determination that the
claimed subject matter is directed to an abstract idea. But the arguments are
not commensurate in scope with what is claimed.
The Appellants argue that "[t]he invention uses an entirely different
machine and entirely different method steps unlike prior art machine-based
technology." App. Br. 13. "The appealed claims improve upon IBM 3890
Technology. The appealed invention uses a very different machine
compared to the IBM 3890 machine." App. Br. 13.
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However, the claims are not directed to machines but instead to
methods. And the claimed methods recite no particular machine. Claim 27,
the sole independent claim, covers using any machine(s) that can scan at a
single entry point and make electronic deposits. A computer, for instance, is
not required to practice the method of claim 2 7.
We note the Appellants' statement that "[ t ]he Examiner's refusal to
recognize statutory subject matter for methods in which a scanner is used is
not legally cognizable." Reply Br. 5 (section "3E"). This statement appears
to refer to dependent claims 28 and 29 which further limit the machine the
method of claim 27 uses for scanning at a single entry point to a "scanner."
But there is no question that the claimed subject is statutory. The question is
whether the claimed subject matter is judicially-excepted from patent-
eligibility for being directed to an abstract idea without including an element
or combination of elements that sufficient to ensure that the claimed method
in practice amounts to significantly more than to be upon the abstract idea
itself. Recitation of a "scanner" does not necessarily render claimed subject
matter patent-eligible. That is especially so here where the intrinsic
evidence supports the view that that the "scanner" covers well known and
conventional image capturing devices. See Spec., para. 33. See also Fidelity
Nat'! Info. Servs., Inc. v. DataTreasury Corp., 2015 WL 1967327 ((Patent
Tr. & App. Bd. 2015), affd, 2016 WL 5939431 (Mem.) (Fed. Cir. 2016)
(Notwithstanding claim 2 of US 6,032,137 recites a "scanner," it was held
patent-ineligible). Also cf In re TL! Commc 'ns LLC Patent Litig., 823 F.3d
607 (Fed. Cir. 2016) (Claims reciting a telephone were held patent-
ineligible.).
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The Appellants also direct our attention to claim 22 which adds a step
of "format-analyzing, by a processor" before the step (in claim 27) whereby
a check is electronically deposited; that is,
format-analyzing, by a processor, the format of [a] MICR line [on a
check], and categorizing the check as a consumer check or a non-
consumer check based on position of data on the MICR line, wherein
the categorizing is performed by a processor; and
wherein the format-analyzing of the MICR line comprises
analyzing for whether the MICR line format (1) has check number
located at far left followed by ABA number and account number; or
(2) has ABA number located at far left followed by account number
and check number[ .... ]
Claim 22.
The Appellants argue that "[ e ]ven more non-abstractly, Claim 22 calls
out how the computer sorts based on MICR line format." App. Br. 13.
The present inventors' innovation in which they were the first to focus
on MICR line format, has led to technological switch from one
category of machines ( the massive check-processing machines into
which trays are fed) to an entirely different category of machines
(scanner machines which can be physically quite small and operable
by a desktop personal computer ("PC")). That a simple scanner can be
a single point of entry to accomplish remote deposit of both consumer
and non-consumer paper checks is an elegant inventive concept,
especially considering that sets of $1 million machines are not useable
to do so.
App. Br. 13-14.
But, here again, the argument is not commensurate in scope with what
is claimed. Claim 22 does not preclude using prior "massive check-
processing machines into which trays are fed". Claim 22 is not limited to
using a "simple scanner." Rather, as claimed, the method covers any
processor capable of analyzing the informational content in an MICR line as
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either ABC or BCA, where A = check number, B = ABA number, and C =
account number. According to the claim, a check is categorized as a
consumer check or a non-consumer check based on whether it is one or the
other. Any processor that can analyze strings of information and make a
categorization based on differences in the arrangement of the information
( e.g., ABC v. BCA) would meet the claimed processor. This covers not just
a "simple scanner" but prior "massive check-processing machines into
which trays are fed" as well.
The Appellants argue that "[t]he Examiner has erred in not admitting
that the claims are directed to an improvement over existing IBM 3 890
deposit technology." App. Br. 14. But the claims make no mention of a
deposit technology, let alone an improvement over existing IBM 3 890
deposit technology.
Numerous additional points the Appellants make are not
commensurate in scope with what is claimed, inter alia,
• "[IA.] the claims are directed to a tangible replacement for
IBM check-sorting machines (into which large quantities of
PAPER checks are feedable but which cannot handle all-size
paper checks). The Examiner's Answer overlooks to mention
that in the invention, information does NOT originate in
electronic form, but rather, occupies paper form on different-
sized pieces of paper. Such paper size heterogeneity would
defeat an IBM check-sorting machine."
• "[IB.] ... the physicality of scanning paper checks of different
sizes but still in a batch (before electronically depositing them)
must be acknowledged."
• "[ 1 C.] FORMAT-analyzing of a MICR line that is performed
on a batch of different-sized paper checks that have been
scanned into a single point of entry .... "
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• "[2B.] Examiner's Answer overlooks that neither Cybeifone
nor SmartGene relate to heterogeneous paper input into a
machine."
Reply. Br. 1-3.
"Many of appellant's arguments fail from the outset because, ... they
are not based on limitations appearing in the claims .... " In re Self, 671
F.2d 1344, 1348 (CCP A 1982). Many of the arguments challenging the step
one determination are tangled up with assertions about an inventive
improvement the claims do not currently reflect. This has made it difficult
to ascertain what precisely the Appellants see is the difficulty with the
Examiner's position.
The Appellants also make statements, in the guise of arguments, that
are not an accurate reflection of the record. At subsection 3 of the Reply
Brief, the Appellants state that "[t]he Examiner's Answer (pp. 3-4)
misapplies Alice Corp .... " It is plainly evident that that is not the case.
Rather the Examiner applied the framework exactly as set forth in Alice (see
Ans. 3: "As per two-part analysis from Alice Corp .... "). The Appellants
explain in 3A.-3E. how the claims should be analyzed via the Alice
framework. To do this, the Appellants use Ex parte Krampe, Appeal 2013-
010784 (March 31, 2016) as their guide. Notwithstanding Krampe is not
precedential to the Board, we nevertheless have no issue with how the
framework was applied in that case. The problem here is, again, that the
Appellants are not focusing on what is claimed. At 3D. the Appellants state
that
[i]n the instant case, the remote-deposit method of claim 27 is tied to a
particular device, namely, "a single point of entry" device into which
multiple-sized paper checks enter. In claim 22, the particular device is
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"an image capturing device". In claims 28 and 29, the particular
device is "a scanner", namely, "the single point of entry is a scanner."
But the "single point of entry" of claim 27 is not required to be able to
permit entry of multiple-sized paper checks. And the Appellants do not
explain why "an image capturing device" and a "scanner," which are
indisputably well known and conventional, add anything of significance. Cf
buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (stating
"[t]hat a computer receives and sends the information over a network-with
no further specification-is not even arguably inventive").
"[T]he name of the game is the claim." In re Hiniker Co., 150 F.3d
1362, 1369 (Fed. Cir. 1998). See also In re Warmerdam, 33 F.3d 1354,
1360 (Fed. Cir. 1994) ("The problem with Warmerdam's argument is that
the claims here do not have that effect. It is the claims which define the
metes and bounds of the invention entitled to the protection of the patent
system.") "The § 101 inquiry must focus on the language of the Asserted
Claims themselves." Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d
1138, 1149 (Fed. Cir. 2016). See Accenture Glob. Servs., GmbH v.
Guidewire Software, Inc., 728 F.3d 1336, 1345 (Fed. Cir. 2013)
( admonishing that "the important inquiry for a § 101 analysis is to look to
the claim"); see also Content Extraction & Transmission LLC v. Wells
Fargo Bank, Nat'! Ass'n, 776 F.3d 1343, 1346 (Fed. Cir. 2014) ("We focus
here on whether the claims of the asserted patents fall within the excluded
category of abstract ideas.").
Given the broad scope of the subject matter the claims now cover and
that the Appellants' focus is on subject matter the claims are not limited to,
we find the Appellants' arguments unpersuasive as to error in the
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Examiner's step one determination. We make no comment on the patent-
eligibility of claims were they to reflect the argued-over inventive
improvement. As they now stand, the claims do not provide the necessary
detail. Cf Credit Acceptance Corp. v. Westlake Servs., LLC, 859 F.3d 1044,
1057 (Fed. Cir. 2017):
Significantly, the claims do not provide details as to any non-
conventional software for enhancing the financing process. See
Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332,
1342 (Fed. Cir. 2017) (explaining that "[o]ur law demands more" than
claim language that "provides only a result-oriented solution, with
insufficient detail for how a computer accomplishes it"); Elec. Power
Grp., 830 F.3d at 1354 [Elec. Power Grp., LLC v. Alstom S.A., 830
F.3d 1350, 1354 (Fed. Cir. 2016)]; (explaining that claims are directed
to an abstract idea where they do not recite "any particular assertedly
inventive technology for performing [ conventional] functions").
Step two is "a 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."' Alice, 134 S. Ct. at 2355 (quoting Mayo Collaborative
Servs. v. Prometheus Labs., Inc., 566 US 66, 73 (2012)).
In that regard, the Examiner determined that
[ t ]he claims do not include limitations that are "significantly more"
than the abstract idea because the claims do not include an
improvement to another technology or technical field, an
improvement to the functioning of the computer itself, or meaningful
limitations beyond generally linking the use of an abstract idea to a
particular technological environment. Note that the limitations, in the
instant claims, are done by the generically recited scanner and
processor. The limitations are merely instructions to implement the
abstract idea on a scanner and require no more than generic functions
that are well-understood, routine and conventional activities
previously known to the industry. The additional element(s) or
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combination of elements in the claim(s) other than the abstract idea
per se amount( s) to no more than: (i) mere instructions to implement
the idea on a computer, and/or (ii) recitation of generic computer
structure that serves to perform generic computer functions that are
well-understood, routine, and conventional activities previously
known to the pertinent industry.
Viewed as a whole, these additional claim element(s) do not provide
meaningful limitation( s) to transform the abstract idea into a patent
eligible application of the abstract idea such that the claim(s) amounts
to significantly more than the abstract idea itself.
Final Rej. 2-3.
Here, too, the Appellants' focus strays from what is claimed. The
Appellants argue that
the Examiner's assumptions about scanner-usage being somehow
well-understood, routine and conventional are inapposite in paper
check-deposit technology. What was being used by the industry for
paper check-deposit technology was only machinery of the IBM 3890
variety- specially constructed and configured (unlike a mere
"scanner'') to handle the magnetic aspect of the MICR line, and
determines, inter alia, whether magnetic ink is present - magnetic ink
being a distinction between an actual original paper check or a
suspect item such as an item constructed from a photocopy of an
original paper check.
App. Br. 14--15 (emphasis added). But the claim 27 method, for example,
does not recite scanning the MICR code. While the checks have an MICR
code, the claim 27 scanning step requires simply "scanning, into a single
point of entry, the checks including the consumer check and the non-
consumer check." The magnetic aspect of the MICR line plays no role in
the step of the method as claimed. Even claim 22, where the MICR line
does play a role, the format-analyzing step analyzes whether the information
contained therein is arranged as ABC or BCA. There is nothing in the claim
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about "detennin[ing] ... whether magnetic ink is present - magnetic ink
being a distinction between an actual original paper check or a suspect item
such as an item constructed from a photocopy of an original paper check"
(App. Br. 14--15).
Given the scope of the subject matter the claims now cover and
because the Appellants' focus is on subject matter the claims are not directed
to, the Appellants' arguments are unpersuasive as to error in the Examiner's
step two determination.
As we stated, we make no comment on the patent-eligibility of claims
were they to reflect the argued-over inventive improvement.
The rejection is sustained.
The rejection of claims 22, 24, and 26-29 under 35 US. C. § 112, first
paragraph, for failing to comply with the written description requirement.
We reverse this rejection for the reasons stated in the Reply Brief.
According to the Examiner, "[t ]he claim [ claim 27] recites "without
manual sorting" in the preamble and the limitation "no manual sorting of
consumer checks" and is considered new matter. The specification does not
specifically recite "without manual sorting" nor the limitation "no manual
sorting". This limitation is not supported in the specification." Ans. 6.
The Appellant argues that
[t]he Examiner's Answer (p.4) purports to require, incorrectly, that a
phrase in the claim appear in the specification verbatim. The claim
language is not required to appear, verbatim, in the specification, and
for Claim 2 7 the written description requirement indeed is satisfied.
See, e.g., the title on page 1 of the Specification, all of page 1, and
also paragraph [0027] at the sentence bridging pages 8-9.
Reply Br. 6.
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The Examiner states that
The paragraphs (0027 and 0058) of the specification disclose
"eliminating the need for the creditor to manually sort the non-
consumer and consumer checks" and "The computers first digitize the
checks and then sort the digital check records. Thus, the present
system automates a previously time consuming activity: manual
sorting of checks and the subsequent deposit of checks".
However, the specification does not disclose "a remote check deposit
method by which is deposited a plurality of checks, without manual
sorting of the non-consumer checks and the consumer checks" and
"no manual sorting of consumer checks".
Ans. 6.
We disagree. We do not see a significant difference between "without
manual sorting" ( claim 27) and "eliminating the need for the creditor 104 to
manually sort" (Spec. para. 27). In our view, the Specification provides an
equivalent description of what is now claimed. " ... [T]he specification must
contain an equivalent description of the claimed subject matter." Lockwood
v. Am. Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1997). "[T]he prior
application need not describe the claimed subject matter in exactly the same
terms as used in the claims .... " Eiselstein v. Frank, 52 F.3d 1035, 1038
(Fed. Cir. 1995).
The rejection is not sustained.
The rejection of claims 22 and 26-29 under 35 USC§ 102(e) as being
anticipated by Sanders.
We reverse this rejection for the reason stated in the Appeal Brief,
namely, "The Final Rejection cites Sanders' paragraphs [0298], [0339] and
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[0348]. No part of Sanders teaches remote deposit 'without manual sorting
of the non-consumer checks from consumer checks prior to deposit'. Claim
27 is differentiated from Sanders for at least this reason." App. Br. 15
(internal footnotes omitted).
The Examiner responds, inter alia, that
Sanders discloses an automated clearing house (ACH) network used
for electronic payments including electronic payments. ACH
operators such as Federal Reserve, Visa and Master Card stores and
sort the payments electronically. The ACH system does not perform
individual wire transfer, [0007]. Therefore, the limitation "without
manual" sorting is disclosed by Sanders. The electronic sorting of
checks by Sanders is the same as "without manual sorting" in the
claimed limitation.
Ans. 11.
But the question is not whether Sanders expressly or inherently
describes electronically sorting checks as an alternative to manual sorting
but whether Sanders expressly or inherently describes electronically
depositing scanned checks "provided that no manual sorting of consumer
checks from non-consumer checks has been performed before deposit."
Claim 2 7. As a matter of fact, we do not see in the cited passages of Sanders
any mention of consumer versus non-consumer checks. It is possible that
Sanders covers what is claimed, but "[i]nherency, however, may not be
established by probabilities or possibilities. The mere fact that a certain
thing may result from a given set of circumstances is not sufficient."
Hansgirg v. Kemmer, 102 F .2d 212, 214 (CCP A 1939), quoted in Cont 'l
Can Co. USA v. Monsanto Co., 948 F.2d 1264, 1269 (Fed. Cir. 1991).
The rejection is not sustained.
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The rejection of claim 24 under 35 US.C. § 103(a) as being unpatentable
over Sanders and Stoutenburg.
This rejection is also not sustained. The rejection is premised on the
finding that the subject matter of claim 27, from which claim 24 depends,
reads on Sanders. Since the evidence does not support that finding, a prima
facie case of obviousness has also not been made out for the subject matter
of claim 24.
CONCLUSIONS
The rejection of claims 22, 24, and 26-29 under 35 U.S.C. § 101 as
being directed to non-statutory subject matter is affirmed.
The rejection of claims 22, 24, and 26-29 under 35 U.S.C. § 112, first
paragraph, for failing to comply with the written description requirement is
reversed.
The rejection of claims 22 and 26-29 under 35 U.S.C. § 102(e) as
being anticipated by Sanders is reversed.
The rejection of claim 24 under 35 U.S.C. § 103(a) as being
unpatentable over Sanders and Stoutenburg is reversed.
DECISION
The decision of the Examiner to reject claims 22, 24, and 26-29 is
affirmed.
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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)(l )(iv).
AFFIRMED
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