Ex Parte Faith et al

Patent Trial and Appeal Board

Sep 18, 2017

13919900 (P.T.A.B. Sep. 18, 2017)

United States Patent and Trademark Office
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O.Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
13/919,900 06/17/2013 Patrick Faith 80083-877466(027710USC1) 8060
66945 7590 09/20/2017
KILPATRICK TOWNSEND & STOCKTON LLP/VISA
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
EXAMINER
BADII, BEHRANG
ART UNIT PAPER NUMBER
3667
NOTIFICATION DATE DELIVERY MODE
09/20/2017 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
EDurrell @ kilpatrickto wnsend .com
KT S Docketing2 @ kilpatrick. foundationip .com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PATRICK FAITH and AYMAN HAMMAD
Appeal 2017-004510
Application 13/919,90c1
Technology Center 3600
Before LARRY J. HUME, AARON W. MOORE, and
DAVID J. CUTITTAII, Administrative Patent Judges.
Opinion for the Board filed by HUME, Administrative Patent Judge.
Opinion Concurring filed by CUTITTA, Administrative Patent Judge.
HUME, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134(a) of the Final
Rejection of claims 9, 10, 21—27, and 30-41. Appellants have canceled
claims 1—8, 11—20, 28, and 29. We have jurisdiction under 35 U.S.C. § 6(b).
We REVERSE.
1 According to Appellants, the real party in interest is Visa International
Service Association. App. Br. 3.
Appeal 2017-004510
Application 13/919,900
STATEMENT OF THE CASE2
The Invention
Appellants' disclosed embodiments and claimed invention "are
directed to methods, computer readable medium, and systems for conducting
a transaction." Spec. 110.
Exemplary Claim
Claims 9 and 21, reproduced below, are illustrative of the subject
matter on appeal:
9. A method for conducting a transaction,
comprising:
generating, by a portable consumer device, a verification
value in response to a transaction involving an access device;
sending, by the portable consumer device, the
verification value and a portion of a first dynamic data element
to the access device, the portion of the first dynamic data
element including data included in a fixed position of the first
dynamic data element, the verification value being different
from the portion of the first dynamic data element; and
communicating, by the access device, the verification
value and the portion of the first dynamic data element to a
service provider computer;
wherein the service provider computer determines a
plurality of candidate dynamic data elements using the portion
of the first dynamic data element in response to determining
that the verification value does not match a second verification
value independently generated by the service provider
2 Our decision relies upon Appellants' Appeal Brief ("App. Br.," filed
July 22, 2016); Reply Brief ("Reply Br.," filed Jan. 17, 2017); Examiner's
Answer ("Ans.," mailed Nov. 21, 2016); Final Office Action ("Final Act.,"
mailed Feb. 25, 2016); and the original Specification ("Spec.," filed
June 17, 2013).
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Application 13/919,900
computer, determines a plurality of candidate verification
values from the plurality of candidate dynamic data elements,
and determines whether the verification value matches any of
the plurality of candidate verification values;
wherein, each of the plurality of candidate verification
values is unique to a corresponding candidate dynamic data
element of the plurality of candidate dynamic data elements;
and
wherein the transaction is thereafter authenticated when
the verification value matches any of the plurality of candidate
verification values.
21. A system comprising:
a database; and
a server coupled to the database and operable to:
receive a verification value and a portion of
a dynamic data element, the portion of the
dynamic data element including data located
within a fixed position of the dynamic data
element;
determine that the verification value does
not match an expected value, the expected value
stored at the system;
upon determining that the verification value
does not match an expected value, determine a
plurality of candidate dynamic data elements using
the portion of the dynamic data element;
calculate a plurality of candidate verification
values using the plurality of candidate dynamic
data elements;
determine if the received verification value
matches any of the plurality of candidate
verification values; and
if the received verification value matches
any of the plurality of candidate verification
values, store the candidate dynamic data element
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Appeal 2017-004510
Application 13/919,900
associated with the matching candidate verification
value,
wherein the transaction is thereafter authenticated when
the received verification value matches any of the plurality of
candidate verification values.
Rejection on Appeal3
Claims 9, 10, 21—27, and 30-41 stand rejected under 35 U.S.C. § 101
as being directed to patent-ineligible subject matter. Final Act. 3; Ans. 2.
ISSUE
Appellants argue (App. Br. 4—14; Reply Br. 2—5) the Examiner's
rejection of independent claims 9 and 21 and claims depending therefrom
under 35 U.S.C. § 101 as being directed to patent-ineligible subject matter is
in error. These contentions present us with the following issue:
Did the Examiner err in concluding claims 9 and 21 are not directed to
significantly more than an underlying abstract idea and are therefore patent-
ineligible under § 101?
ANALYSIS
We agree with particular arguments advanced by Appellants with
respect to claims 9, 10, 21—27, and 30-41 for the specific reasons discussed
below. We highlight and address specific findings and arguments regarding
claims 9 and 21 for emphasis as follows.
3 In the event of further prosecution of this application, we invite the
Examiner's attention to the recitation of "the transaction" in the final wherein
clause of claim 21 to determine whether this claim term has antecedent basis
sufficient to meet the definiteness requirements of pre-AIA 35 U.S.C. § 112,
second paragraph.
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Application 13/919,900
The Claims are Directed to an Abstract Idea
Appellants first contend the Examiner did not demonstrate the claims
are directed to an abstract idea, and specifically argue "the Office has not
identified the judicial exception recited in the claim, nor has the Office
explained why it is considered an exception." App. Br. 5. Along these lines,
Appellants further argue:
[T]he Office has not made a prima facie case required for an
eligibility rejection because the Office has failed to: clearly
articulate why the claims are directed to a fundamental
economic practice as required by Step 2 A of the Alice Test and
clearly articulate why the claims do not amount to significantly
more as required by Step 2B of the Alice Test.
App. Br. 6.
Appellants also allege the Examiner has oversimplified and
mischaracterized the claims on appeal by construing the claimed invention
"as an economic practice, organizing human activities, an idea of itself
and/or mathematical relationship s/formulas. Conducting a transaction is an
economic practice and can also be organizing human activities such as
buying, selling, paying for bought item, etc." App. Br. 9 (quoting Final
Act. 2, 4). Appellants argue this construction is an oversimplification
because it "ignores most of the features of the independent claims." App.
Br. 9.
The Supreme Court's two-part Mayo!Alice framework guides us in
distinguishing between patent claims that impermissibly claim the "building
blocks of human ingenuity" and those that "integrate the building blocks into
something more." Alice Corp. Pty Ltd. v. CLS BankInt'l, 134 S. Ct. 2347,
2354 (2014). First, we "determine whether the claims at issue are directed to
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Application 13/919,900
a patent-ineligible concept." Id. at 2355. If so, we "examine the elements of
the claim to determine whether it contains an 'inventive concept' sufficient to
'transform' the claimed abstract idea into a patent-eligible application." Id. at
2357 (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.
Ct. 1289, 1294, 1298 (2012)). While the two steps4 of the Alice framework
are related, the "Supreme Court's formulation makes clear that the first-stage
filter is a meaningful one, sometimes ending the § 101 inquiry." Elec.
Power Grp., LLCv. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016). We
note the Supreme Court "has not established a definitive rule to determine
what constitutes an 'abstract idea'" for the purposes of step one. Enflsh, LLC
v. Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. 2016) (citing Alice, 134
S. Ct at 2357).
We agree with the Examiner (Final Act. 2,5 46; Ans. 37) that the
claims, e.g., claims 9 and 21, are directed to the abstract idea of generating a
4 Applying this two-step process to claims challenged under the abstract
idea exception, the courts typically refer to step one as the "abstract idea"
step and step two as the "inventive concept" step. Affinity Labs of Tex., LLC
v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016).
5 "Conducting a transaction is an economic practice and can also be
organizing human activities such as buying, selling, paying for bought item,
etc. (similar to creating a contractual relationship)." Final Act. 2.
6 "[T]he invention is an abstract idea since the invention can be construed as
an economic practice, organizing human activities, an idea of itself and/or
mathematical relationships/formulas." Final Act. 4.
7 "The claim limitations, generating a verification value in response to a
transaction is at least an economic practice similar to creating a contractual
relationship" (Ans. 3), and "wherein the transaction (economic practice) is
thereafter authenticated when the verification value matches any of the
plurality of candidate verification values is at least an economic practice
similar to creating a contractual relationship." Ans. 7.
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Application 13/919,900
verification value in response to a transaction, which we find to be an
economic practice.
The Claims Recite Significantly More than the Abstract Idea
In applying step two of the Alice analysis, our reviewing court guides
we must "determine whether the claims do significantly more than simply
describe [the] abstract method" and thus transform the abstract idea into
patentable subject matter. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709,
715 (Fed. Cir. 2014). We look to see whether there are any "additional
features" in the claims that constitute an "inventive concept," thereby
rendering the claims eligible for patenting even if they are directed to an
abstract idea. Alice, 134 S. Ct. at 2357. Those "additional features" must be
more than "well-understood, routine, conventional activity." Mayo, 132 S.
Ct. at 1298.
Appellants urge the claims on appeal
share substantial similarities to the claims of DDR Holdings,
LLC v. Hotels.com, et al. (Fed. Cir. Dec. 5, 2014) as well as the
claims of Enfish, LLC v. Microsoft Corp. (Fed. Cir. May 12,
2016). The claims in each of these cases was found to be
directed to non-abstract subject matter in the analysis with
respect to 2A of Alice.
App. Br. 6. With respect to the claims on appeal, Appellants assert "[t]he
recited claim elements clearly improve the technology field of securing
electronic transactions," and continue their arguments by contrasting the
claimed approach with the alleged deficiencies of conventional systems.
App. Br. 7—8. "Thus, embodiments of the invention provide for improved
data security over conventional payment processing systems." App. Br. 8
(emphasis omitted). Citing Enfish, Appellants further observe "a claim is
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Application 13/919,900
not made ineligible for patent merely because it may be implemented on a
generic computer." App. Br. 11. Further, "[e]ach of the [claim limitations
add] meaningful limitations to the claims . . . [and] the Office has made no
effort to address any of these limitations to note why they are not meaningful
and do no more than generally link the use of the abstract idea to a particular
technological environment." App. Br. 13.
We find Appellants' claimed invention generates a verification value
in response to a transaction involving a portable consumer device and sends
the verification value and a portion of a dynamic data element to a service
provider that determines whether the verification value matches any of a
plurality of candidate verification values and, if a match is determined, the
transaction is authenticated, thus helping to reduce transactional fraud. See
claims 9 and 21; see also Spec. H 12, 20, 24, 56.
We find the claimed transaction authentication, while abstract itself,
improves the underlying technology involved with fraud-prevention, and
therefore adds "significantly more" than merely implementing the abstract
idea of generating a verification value.
Therefore, we are persuaded of error in the Examiner's legal
conclusion that the claims on appeal are directed to patent-ineligible subject
matter.
CONCLUSION
The Examiner erred with respect to the rejection of claims 9, 10,
21—27, and 30-41 under 35 U.S.C. § 101 as being directed to patent-
ineligible subject matter, and we do not sustain the rejection.
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Application 13/919,900
DECISION
We reverse the Examiner's decision rejecting claims 9, 10, 21—27,
and 30-41.
REVERSED
9
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PATRICK FAITH and AYMAN HAMMAD
Appeal 2017-004510
Application 13/919,900
Technology Center 3600
Before LARRY J. HUME, AARON W. MOORE, and
DAVID J. CUTITTAII, Administrative Patent Judges.
CUTITTA, Administrative Patent Judge, concurring.
I agree with the decision of the majority to reverse the § 101 rejection
of claims 9, 10, 21—27, and 30-41 based on Alice's framework and the
Federal Circuit's "precedential" decisions post Alice for patent eligibility of
software-related inventions under 35 U.S.C. § 101. I do not agree, however,
that the claims are directed to an abstract idea.
As noted above by my colleagues, Appellants argue exemplary
claim 21 should not be found directed to abstract subject matter because the
claim shares substantial similarities to the claims of DDR Holdings and
Enfish. Specifically, Appellants argue the
claims are necessarily rooted in systems that prevent
unauthorized use of payment accounts. In particular, the
problem to be solved by the current claims relates to reducing
the amount of data that needs to be passed during a payment
transaction and preventing an unauthorized person from
Appeal 2017-004510
Application 13/919,900
skimming data in electronic payment transactions to thereby
conduct fraudulent payment transactions.
App. Br. 7.
I find Appellants' arguments persuasive. Claim 21 recites "wherein
the transaction is thereafter authenticated when the received verification
value matches any of the plurality of candidate verification values," and so
expressly recites authenticating a transaction when specific conditions are
met. The authentication is performed to prevent an unauthorized person
from conducting fraudulent transactions. Spec. 8. In addition, claim 21
recites "receive a verification value and a portion of a dynamic data
element," and "determine a plurality of candidate dynamic data elements
using the portion of the dynamic data element." The claim is further
directed to using the plurality of candidate dynamic data elements for the
transaction authentication. Accordingly, claim 21 is focused on a specific
asserted improvement in computerized authentication, i.e., authenticating
transactions while "reducing the number of characters in Track data" (Spec
17) to enable the consumer to conduct more than 9999 transactions despite
the limited available space in the tracks (Spec Tflf 5, 7, 24, 41, 49). Thus,
similar to other claims determined by our reviewing court to be non-abstract,
claim 21 does not simply use a computer as a tool to automate conventional
activity. McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299,
1316 (Fed. Cir. 2016). Furthermore, the claimed automation goes beyond
merely "organizing [existing] information into a new form." See Digitech
Image Techs., LLCv. Elecs. for Imaging, Inc., 758 F.3d 1344, 1351 (Fed.
Cir. 2014).
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Application 13/919,900
I also agree with Appellants that claim 21 is similar to claims
determined to be patent-eligible in DDR Holdings and Enfish. In DDR
Holdings, the claims were determined to recite an invention that is not
merely the "routine or conventional use" of technology. DDR, 773 F.3d at
1259. Here, claim 21 solves a technological problem (limited available
storage space) akin to the problem in DDR Holdings (conventional Internet
hyperlink protocol preventing websites from retaining visitors). DDR
Holdings, 773 F.3d at 1265. In other words, this claim entails an
unconventional technological solution (authenticating transactions while
reducing the number of characters in track data) to a technological problem
(limited available space in the tracks). Spec. 17. The solution requires
arguably generic components, including a "database" and a "server."
However, the claim's enhancing limitations necessarily require that these
generic components operate in an unconventional manner to achieve an
improvement in computer-based system functionality. See Amdocs (Israel)
Ltd. v. Openet Telecom, Inc. 841 F.3d 1288, 1300-01 (Fed. Cir. 2016).
Moreover, claim 21, like the claims at issue in Enfish, focuses on a
specific means or method that improves the relevant technology (computer-
based authentication) rather than being directed to a result or effect that itself
is the abstract idea and merely invoke generic processes and machinery.
Enfish, 822 F.3d at 1336.
Because I find claim 21 is not directed to ineligible subject matter, I
would not reach Alice step two. Enfish, 822 F.3d at 1339. Accordingly, I
would determine claims 9, 10, 21—27, and 30-41 recite statutory subject
matter and would reverse the Examiner's rejection.
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