Ex Parte Enzaldo et al

Patent Trial and Appeal Board

Aug 24, 2018

13952775 (P.T.A.B. Aug. 24, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
13/952,775 07/29/2013
20350 7590 08/28/2018
KILPATRICK TOWNSEND & STOCKTONLLP
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
UNITED ST A TES OF AMERICA
Robert Enzaldo
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.
90945-882763 (019720US) 7898
EXAMINER
POINVIL, FRANTZY
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
08/28/2018 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):
ipefiling@kilpatricktownsend.com
KTSDocketing2@kilpatrick.foundationip.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ROBERT ENZALDO, ALEC HALL, ALEXANDER VARAKEN,
BRYANT GOFSTEIN, HIRAN MODI, HOLLIS BAUGH,
NIREN KINIKAR, NOEL BRANDT, and VIREN PATEL
Appeal2017-005278
Application 13/952,775
Technology Center 3600
Before ST. JOHN COURTENAY III, MARC HOFF, and
SCOTT HOW ARD, Administrative Patent Judges.
COURTENAY, Administrative Patent Judge.
DECISION ON APPEAL
Appellants 1 appeal under 35 U.S.C. § 134(a) from a final rejection of
claims 13-15 and 31-33. Claims 1-12, 16-30, and 34 are cancelled. We
have jurisdiction over the pending claims under 35 U.S.C. § 6(b ).
We Affirm.
1 According to Appellants, the real party in interest is W estem Union
Company of Englewood, Colorado, which is the assignee of the present
application. App. Br. 2.
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Application 13/952,775
STATEMENT OF THE CASE
Introduction
Appellants' invention generally relates to "systems and methods for
risk assessment of money transfer transactions." (Spec. ,r 6).
Exemplary Claim
13. A method for refining rules in a rules engine, the
rules engine for use in assessing risk of improper activity
associated with money transfer transactions conducted at
third part agents representing a money transfer entity,
compnsmg:
storing data for past money transfer transactions in a data
base, including data for at least one risk factor relating to
a third party agent;
receiving data for a new money transfer transaction,
including data for the same at least one risk factor
relating to the third party agent for the new money
transfer transaction;
assigning an updated risk score to the at least one risk
factor based on the data for that risk factor for both the
past money transfer transactions and the new money
transfer transaction; and
using the updated risk score to refine at least one rule in
the rules engine, wherein the updated risk score assigned
to the at least one risk factor based on the data for both
the past money transfer transactions and the new money
transfer transaction comprises:
calculating a Z score for the risk factor, based on the
formula:
Z=X-µ/0
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wherein Z is the Z score;
wherein Xis a value for the risk factor;
wherein µ is a mean of values for the same risk factor for
a population of third party agents; and
wherein CT is a standard deviation of values for the same
risk factor for the population of third party agents.
App. Br. 7, Claims Appendix.
Rejection
Claims 13-15 and 31-33 are rejected under 35 U.S.C. § 101 as being
directed to patent-ineligible subject matter. Final Act. 6.
Issue on Appeal
Did the Examiner err in rejecting claims 13-15 and 31-33 under
35 U.S.C. § 101 as being directed to patent-ineligible subject matter?
ANALYSIS
We have considered all of Appellants' arguments and any evidence
presented. To the extent Appellants have not advanced separate, substantive
arguments for particular claims, or other issues, such arguments are waived.
See 37 C.F.R. § 4I.37(c)(l)(iv). We highlight and address specific findings
and arguments for emphasis in our analysis below.
Mayo/Alice Analysis under 35 USC§ 101
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,
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natural phenomena, and abstract ideas are not patentable." Alice Corp. Pty.
Ltd. v. CLSBankint'l, 134 S. Ct. 2347, 2354 (2014) (quotingAss'nfor
Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)).
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, 82-84 (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, such as an
abstract idea. Abstract ideas may include, but are not limited to,
fundamental economic practices, methods of organizing human activities, an
idea of itself, and mathematical formulas or relationships. Id. at 2355-57.
If the claims are not directed to a patent-ineligible concept, the inquiry
ends. See Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1262 (Fed.
Cir. 2017).
Otherwise, the inquiry proceeds to the second step in which the
elements of the claims are considered "individually and 'as an ordered
combination' to determine whether the additional elements 'transform the
nature of the claim' into a patent-eligible application." Alice, 134 S. Ct. at
2355 (quoting Mayo, 566 U.S. at 79, 78). We consider the question of
whether the claims are directed to a specific improvement in the capabilities
of the computing devices, or, instead, "a process that qualifies as an 'abstract
idea' for which computers are invoked merely as a tool." Enfzsh, LLC v.
Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).
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We, therefore, decide under step two whether the claims: (a) set forth
an inventive concept that provides a specific means or method that improves
the relevant technology, or (b) are directed to a result or effect that itself is
the abstract idea, in which the claims merely invoke generic processes and
machinery. See Enfzsh, 822 F.3d at 1336.
The Examiner's Rejection under 35 US.C. § 101
Regarding the first step of the Alice/Mayo analysis, the Examiner
concludes that claims 13-15 and 31-33 are directed to an abstract idea,
because:
Claim 13 is directed to a method for refining rules for use in
assessing risk of improper activities associated with money
transfer transactions conducted at third party agents
representing a money transfer entity.
Claim 31 is directed toward a system for refining rules for use
in assessing risk of improper activities associated with money
transfer transactions conducted at third party agents
representing a money transfer entity.
The claims in general are directed toward determining risks
involved in money transfer transactions by assigning an
updated risk score to a risk factor based on data for that risk
factor for both the past money transfer transactions and a new
money transfer transactions. Determining risks involved in a
money transfer transaction involves a fundamental financial
practice and thus, the claims include an abstract idea.
Final Act. 3--4 ( emphasis added). 2
2 "Patent eligibility under§ 101 presents an issue of law .... " Accenture
Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1340 (Fed.
Cir. 2013).
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Regarding the second step of the Mayo/Alice analysis, the
Examiner finds that the claims do not include additional elements that
are sufficient to amount to significantly more than the judicial
exception, because:
limiting an abstract idea to a specific field of use or adding
token-post solution activity does not render an abstract idea to
be patentably eligible. [Diehr], 450 U.S. at 191-92;
Parker v. Flook, 437 U.S. 584, 590 (1978) ("[t]he notion that
post-solution activity, no matter how conventional or obvious in
itself, can transform an unpatentable principle into a patentable
process exalts form over substance). "
Each claim as a whole, does not amount to significantly more
than the abstract idea itself. This is because the claim does not
effect an improvement to another technology or technical
field; the claim does not amount to an improvement to the
functioning of a computer itself; and the claim does not move
beyond a general link of the use of an abstract idea to a
particular technological environment.
Final Act. 5---6 ( emphasis added).
For the aforementioned reasons, the Examiner concludes that all
claims 13-15 and 31-33 on appeal are not patent-eligible under 35 U.S.C.
§ 101.
Mayo/Alice Analysis - Step 1
Regarding Alice Step 1, Appellants contend that the Examiner's
"assertions, that such an idea is abstract, and that it is a fundamental
economic practice, is not supported by any evidence as required by Alice."
App. Br. 4. Appellants note:
The present Office Action cites no references whatsoever to
justify its position that the alleged abstract idea here is a "long
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prevalent" and "longstanding" fundamental economic practice,
as was provided by the Supreme Court in Alice. It is axiomatic
that if the Supreme Court of the United States feels it necessary
to justify its conclusions as to whether subject matter
constitutes an abstract idea with citation to relevant art and
references, then the USPTO must do at least the same to justify
their conclusions on such matters.
Id. (emphasis added.).
Regarding Appellants' initial argument (id.), we note the Examiner
withdrew the previous 35 U.S.C. § 102(e) rejection over the cited prior art
(see Non-Final Rejection (2-3), mailed January 2, 2015). Only the rejection
under 35 U.S.C. § 101 remains in the Final Action mailed January 25, 2015.
Contrary to Appellants' argument (App. Br. 4), the Supreme Court
guides: "[t]he 'novelty' of any element or steps in a process, or even of the
process itself, is of no relevance in determining whether the subject matter
of a claim falls within the § 101 categories of possibly patentable subject
matter." Diamondv. Diehr, 450U.S. 175, 188-89 (1981) (emphasis added).
Our reviewing court further emphasizes that "[ e ]ligibility and novelty are
separate inquiries." Two-Way Media Ltd. v. Comcast Cable Commc 'ns,
LLC, 874 F.3d 1329, 1340 (Fed. Cir. 2017); see also Affinity Labs of Tex.,
LLC v. DIRECTV, LLC, 838 F.3d 1253, 1263 (Fed. Cir. 2016) (holding that
"even assuming" that a particular claimed feature was novel does not "avoid
the problem of abstractness").
Therefore, we find Appellants' first argument unavailing. Moreover,
the Examiner further explains the basis for the rejection in the Answer, and
cites specific case law in support:
The claim is similar to the functions of organizing human
activities such as creating a contractual relationship as was
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found in buySafe. [3] Appellant is to be noted that the steps or
functions of storing, receiving, assigning and updating are
similar to concepts that have been identified as abstract [ideas]
by the courts as found in Classen [4 J and Perkin-Elmer [5]
which involved functions of collecting and comparing data to
determine a risk level. The calculating function was also found
to be abstract by the courts in Bilski which involved a
mathematical formula for hedging.
Ans. 8-9 (italics added to case names).
We note independent claims 13 and 31 are directed to, inter alia,
refining rules in a rules engine based upon an updated risk score. Our
reviewing court has concluded that abstract ideas include the concepts of
collecting data, recognizing certain data within the collected data set, and
storing the data in memory. Content Extraction & Transmission LLC v.
Wells Fargo Bank, N.A., 776 F.3d 1343, 1347 (Fed. Cir. 2014); see also
Smart Sys. Innovations, LLC v. Chicago Transit Authority, 873 F.3d 1364,
13 72 (Fed. Cir. 201 7) ( concluding "claims directed to the collection, storage,
3 The Examiner is referring to buySAFE, Inc. v. Google, Inc., 765 F.3d 1350,
1355 (Fed. Cir. 2014) (The claims are squarely about creating a contractual
relationship---- a "transaction performance guaranty"-that is beyond
question of ancient lineage ... In short, with the approach to this kind of
section 101 issue clarified by Alice, it is a straightforward matter to
conclude that the claims in this case are invalid.") ( citation omitted).
4 Citing Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F .3d 1057
(Fed. Cir. 2011) (collecting and comparing known information).
5 Citing PerkinElmer, Inc. v. Intema Ltd., 496 Fed. App'x 65, 70 (Fed. Cir.
2012) (nonprecedential) ("The claims thus recite the mental process of
comparing data to determine a risk level: data are gathered in the first
trimester of pregnancy; data are gathered in the second trimester of
pregnancy; those data are compared to known statistical information. No
action beyond the comparison is required."). The court in PerkinElmer held
the claims were ineligible under section 101. Id. at 71.
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and recognition of data are directed to an abstract idea."); Elec. Power, 830
F.3d at 1353 (The collection of information and analysis of infonnation are
abstract ideas).
Moreover, but for the recitation of a generic processor, database, and
computer-readable memory (independent claim 31 ), we find the recited steps
or acts, could be performed as mental steps, or with the aid of pen and paper.
See Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138 (Fed. Cir.
2016) ("While the Supreme Court altered the § 101 analysis since
CyberSource in cases like Mayo and Alice, we continue to 'treat[] analyzing
information by steps people go through in their minds, or by mathematical
algorithms, without more, as essentially mental processes within the
abstract-idea category."') (quoting Elec. Power Grp., LLC v. Alstom S.A.,
830 F.3d 1350, 1354 (Fed. Cir. 2016)); see also CyberSource Corp. v. Retail
Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011) ("That purely mental
processes can be unpatentable, even when performed by a computer, was
precisely the holding of the Supreme Court in Gottschalk v. Benson").
"[M]erely selecting information, by content or source, for collection [and]
analysis ... does nothing significant to differentiate a process from ordinary
mental processes." Elec. Power, 830 F.3d at 1355. Receiving and analyzing
(or identifying data), by itself, does not transform an otherwise-abstract
process or system of information collection and analysis. See id.
Further, we find "refining rules in a rules engine" (claims 13, 31) is
not analogous to the lip animation rules considered by the court in McRO,
Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016).
McRO specifically guides: "[t]he abstract idea exception prevents patenting
a result where 'it matters not by what process or machinery the result is
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accomplished."' McRO, 837 F.3d at 1312 (quoting O'Reilly v. Morse, 56
U.S. 62, 113 (1854)) ( emphasis added).
Here, Appellants' claims are directed to the result of "using the
updated risk score to refine at least one rule in the rules engine."
Independent claims 13, 31. 6 The Supreme Court guides that the
"prohibition against patenting abstract ideas 'cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment' or [by] adding 'insignificant postsolution activity."' Bilski v.
Kappas, 561 U.S. 593, 610-11 (2010) (quoting Diamond v. Diehr, 450 U.S.
175, 191-92 (1981)).
Appellants advance no further substantive arguments regarding Alice
Step 1. Nor do Appellants file a Reply Brief in response to the Examiner's
further explanations in the Answer (8-9). Therefore, on this record, we
conclude claims 13-15 and 31-33 are directed to the abstract idea of a
fundamental economic practice that could additionally be performed as
mental steps, albeit with the aid of pen and paper.
Mayo/Alice Analysis-Step 2
Because we conclude the claims are directed to an abstract idea for
essentially the same reasons articulated by the Examiner (Final Act. 3--4;
Ans. 7-9), we tum to the second part of the Alice/Mayo analysis. We
analyze the claims to determine if there are additional limitations that
6 See also the result of determining whether improper transaction activity is
present, as recited in dependent claim 33: "based on the updated risk score,
conducting an investigation of completed money transfer transactions to
determine if there is an actual improper activity in connection with the
transactions; and refining the at least one rule based on the outcome of the
investigation." ( emphasis added).
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individually, or as an ordered combination, ensure the claims amount to
"significantly more" than the abstract idea. Alice, 134 S. Ct. at 2357.
Regarding Alice Step 2, Appellants address the purported inventive
concept of the claims:
even if we assume, in arguendo, that the Office Action has
properly identified and substantiated that the present claims are
directed to an abstract idea, the Office Action is incorrect that
the remainder of the claims do not add significantly more the
potential abstract idea itself. The requirement that a claim add
significantly more to an abstract idea in order to be patent
eligible subject matter is rooted in reducing the risk that
allowing such a patent claim would tie up the use of the
underlying abstract idea to all of those in the art. Alice at 6.
Claims which do not risk tying up the use of an abstract idea do
not pose a risk of pre-empting others from exploiting these
"building blocks" of human ingenuity. Id.
the Office Action states in a conclusory manner that the claims
are merely an implementation of the alleged abstract idea on a
computer using functions that are well-understood, routine, and
conventional activities previously known to the industry.
However, this conclusion is belied by the Office Action itself,
as it does not substantively reject the claims under § 102 or
§ 103. The substantive allowability of the claims over the prior
art indicates that they recite new possible ways of implementing
some alleged abstract idea over other possible ways that came
before it. If the claims are directed to one new way of
implementing an abstract idea over other possible ways that
came before it, it must be true that that allowing such a claim to
proceed to allowance would not pre-empt all implementations
of the abstract idea itself
App. Br. 4--5 (emphasis added).
We have addressed above Appellants' contention regarding
"substantive allowability of the claims over the prior art." Id. Regarding
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Appellants' argument that the pending claims do not preempt an abstract
idea (id.), our reviewing court provides applicable guidance: "[ w ]hile
preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility." Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015);
Ultramercial Inc. v. Hulu LLC, 722 F.3d 1335, 1346 (Fed. Cir. 2013)
("[T]he Supreme Court has stated that, even if a claim does not wholly pre-
empt an abstract idea, it still will not be limited meaningfully if it contains
only insignificant or token pre- or post-solution activity-such as identifying
a relevant audience, a category of use, field of use, or technological
environment.") ( citations omitted), vacated and remanded, WildTangent,
Inv. v. Ultramercial LLC, 134 S. Ct. 2870 (2014) (remanding for
consideration in light of Alice, 134 S. Ct. 2347). Therefore, we are not
persuaded by Appellants' argument regarding the absence of complete
preemption.
Although Appellants additionally urge that the Examiner has failed to
analyze each claim in setting forth the rejection under§ 101 (App. Br. 5-6),
Appellants have not advanced any arguments with respect to the specific
features of any dependent claim. Nor have Appellants filed a Reply Brief to
further traverse the Examiner's explanations in support of the rejection.
Because we find Appellants have not established the claims are
directed to an improvement in the recited generic processor, database, and
computer-readable memory (independent system claim 31 ), we conclude that
none of the claim limitations, viewed both individually and as an ordered
combination, amount to significantly more than the judicial exception in
order to sufficiently transform the nature of the claims into patent-eligible
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subject matter.
In light of the foregoing, we conclude, under the Mayo/Alice analyses,
that each of Appellants' claims 13-15 and 31-33 considered as a whole, is
directed to a patent-ineligible abstract idea (under step one), and under step
two, does not recite something "significantly more" to transform the nature
of the claim into a patent-eligible application.
Accordingly, for the reasons discussed above, we sustain the
Examiner's rejection under 35 U.S.C. § 101 of claims 13-15 and 31-33, as
being directed to patent-ineligible subject matter. 7
CONCLUSION
The Examiner did not err in rejecting claims 13-15 and 31-33 under
35 U.S.C. § 101, as being directed to patent-ineligible subject matter.
DECISION
We affirm the Examiner's decision rejecting claims 13-15 and 31-33
under 35 U.S.C. § 101.
No time period for taking any subsequent action in connection with
this appeal may be extended under 3 7 C.F .R. § 1.13 6( a )(1 )(iv). See
37 C.F.R. § 4I.50(f).
AFFIRMED
7 To the extent Appellants have not advanced separate, substantive
arguments for particular claims, or other issues, such arguments are waived.
See 37 C.F.R. § 4I.37(c)(l)(iv).
13