Ex Parte Greenwald et al

Patent Trial and Appeal Board

Feb 28, 2019

13208927 (P.T.A.B. Feb. 28, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
13/208,927 08/12/2011 Gary Greenwald
13708 7590 02/28/2019
Johnson, Marcou & Isaacs, LLC
PO Box 691
Hoschton, GA 30548
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.
CITI-0701 9005
EXAMINER
GOTTSCHALK, MARTIN A
ART UNIT PAPER NUMBER
3697
MAIL DATE DELIVERY MODE
02/28/2019 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 GARY GREENWALD and DICKSON CHU
Appeal2017-005560 1
Application 13/208,9272
Technology Center 3600
Before NINA L. MEDLOCK, TARA L. HUTCHINGS, and
ROBERT J. SILVERMAN, Administrative Patent Judges.
HUTCHINGS, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 1, 2, 5-8, 10-20, and 23. We have jurisdiction under
35 U.S.C. § 6(b).
We REVERSE.
1 Our decision references Appellants' Appeal Brief ("Br.," filed Apr. 29,
2016), and the Examiner's Answer ("Ans.," mailed Dec. 13, 2016) and Final
Office Action ("Final Act.," mailed Oct. 27, 2015).
2 Appellants identify Citibank, N.A. as the real party in interest. Br. 3.
Appeal2017-005560
Application 13/208,927
CLAIMED INVENTION
Appellants' claimed invention "relates generally to the field of
electronic commerce, and more particularly to methods and systems for
activating an electronic payments infrastructure using an electronic
communication device, such as a mobile phone." Spec. ,r 1.
Claims 1, 19, 20, and 23 are the independent claims on appeal.
Claims 1 and 23, reproduced below, are illustrative of the claimed subject
matter:
1. A method for activating an electronic payments
infrastructure, comprising:
providing, for a customer's electronic communication
device, a unique identifier comprising latent computer code
stored in memory of a secure element of the customer's
electronic communication device at manufacture time assigned
to an inactive header account, the unique identifier being
processable via a transaction processing network;
receiving, using an interface processor, a request to verify
that activation of the header account for the customer is
compliant with predefined customer identification rules
consisting at least in part of anti-money-laundering regulations
defined by regulatory authorities, the request consisting at least
in part of customer information;
determining, using a customer identification processor,
that activation of the header account for the customer is
compliant with predefined customer identification rules
consisting at least in part of anti-money-laundering regulations
defined by regulatory authorities and sending, using the interface
processor, an activation message to the customer's device when
said determination is made;
linking, using the interface processor, the header account
to a digital wallet on a database; and
receiving, using the interface processor, the customer's
designation of a source account for the digital wallet on the
database.
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REJECTIONS
Claims 1, 2, 5-8, 10-20, and 23 are rejected under 35 U.S.C. § 101 as
directed to non-statutory subject matter.
Claims 1, 2, 5-8, 10-20, and 23 are rejected under 35 U.S.C. § 112,
second paragraph, as indefinite for failing to particularly point out and
distinctly claim the subject matter that Appellants regard as the invention.
Claims 1, 2, 5-8, 10-20, and 23 are rejected under 35 U.S.C. § I03(a)
as unpatentable over Hruska (US 2012/0028609 Al, pub. Feb. 2, 2012) and
Olson (US 2010/0123003 Al, pub. May 20, 2010).
ANALYSIS
Patent-Ineligible Subject Matter
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).
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
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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).
In rejecting the claims under 35 U.S.C. § 101, the Examiner
determines that the claims are directed to the abstract idea of "activating a
customer payment account conforming to anti-money laundering rules."
Final Act. 2; see also Ans. 2. The Examiner considers this concept to be an
abstract idea because it is a fundamental economic practice and a mental
process ("steps [that] could be performed by a human"). Final Act. 2; see
also Ans. 2-3 ( citing cases that include similar concepts that have been held
by the courts to be directed to abstract ideas).
Here, Appellants' Specification describes in the Background section
that a mobile customer can purchase a connected mobile device, such as a
pre-paid device, with payment functionality that is very limited, e.g.,
payments totaling approximately $30 or less per month to purchase digital
goods, such as ring tones, music, apps, and video, the payments being
funded through the monthly telephone statement. Spec. ,r,r 2, 25. The
Specification describes a need to extend the current telephone company
billing model and enable full customer payment capability to pay for all
goods across all distribution channels. Id. ,r,r 2, 26, 31. The invention uses a
token having an inactive unique header account identifier on a customer's
communication device. Id. ,r,r 3, 27, 35, 37. The unique identifier is
embedded on a secure element, such as a microchip, of the communication
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device. Id. ,r,r 29, 44. A financial institution provides one or more
manufacturers of smart elements for mobile phones a seed number and an
algorithm with which to generate a range of latent unique codes in their
production. Id. ,r 35. In this way, each device has a unique identifier even
though the devices may be made by different manufacturers. Id. ,r 36.
Activation involves first determining that the person who is acquiring the
customer device is permitted to engage with the banking system, and
sending verification to the vendor or mobile device. Id. ,r 43. Once the
customer passes the customer identification process, the header account is
activated for the customer. Id. ,r 45. Header account activation involves
activating dormant code on the customer's device and translating dormant
code in the secure element into the unique identifier. Id. ,r,r 44--45. The
activated header account is linked to a digital wallet funded with a customer-
designated source account to fund purchases and payments. Id. ,r 46.
Claim 1, which we consider representative of the claims, recites a
method for activating an electronic payments infrastructure that includes
providing a unique identifier; receiving a request to verify that activation of
the header account for the customer is compliant with customer
identification rules including anti-money-laundering regulations;
determining that activation is compliant with the predefined customer
identification rules; linking the header account to a digital wallet; and
receiving the customer's designation of a source account for the digital
wallet. Put simply, claim 1 involves determining whether a customer is
compliant with customer rules in a process for activating an electronic
payments infrastructure. But ensuring a customer complies with certain
customer identification rules before engaging in a business transaction ( e.g.,
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Application 13/208,927
activating a payments infrastructure) is a longstanding, fundamental
economic practice, i.e., an abstract idea. Therefore, we are not persuaded
that the Examiner erred in determining that the claims are directed to an
abstract idea.
Turning to step two of the Alice/ Mayo framework, the Examiner
determines that
[ t ]he additional elements or combination of elements in the
claims other than the abstract idea are no more than: (i) mere
instructions to implement the idea on a computer, and/or
(ii) [the] recitation of generic computer structure that serves to
perform generic computer functions that are well-understood
routine, and conventional activities previous known to the
pertinent industry.
Final Act. 2-3; see also Ans. 3-7. Pointing to numerous additional elements
recited in claim 1 (see Br. 13-14), Appellants argue that the claims improve
the function of digital payment systems that are device independent, enable a
global digital payment network, and are rooted in computer technology to
overcome a technological problem (id. at 14). The Examiner replies that the
claims use generic cell phone and network components without any
improvement to the components themselves to improve methods of
payment. Ans. 6-7.
We agree with Appellants that the Examiner's analysis does not
adequately explain why the additional limitations of the claims do not
integrate the abstract idea into a practical application. See USPTO's "2019
Revised Patent Subject Matter Eligibility Guidance," 84 Fed. Reg. 50, 55
(January 7, 2019). For example, claim 1 additionally recites that "a unique
identifier comprising latent computer code stored in memory of a secure
element of the customer's electronic communication device at manufacture."
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Appellants' Specification attributes the claimed identifier, in part, with
improving digital payment systems by enabling use of communications
devices made by several different manufactures. See, e.g., Spec. ,r,r 35-36;
see also id. at ,r,r 23-24, 26-27 (describing other technological advantages of
the claimed invention).
Further, the Examiner acknowledges that the claims "recite[] certain
extra elements possibly associated with computer technology," such as the
customer's electronic communication device, latent computer code, and a
secure element of the customer's electronic communication device. Ans. 4.
The Examiner concludes that these elements do not recite significantly more
than the abstract idea because the Examiner determines that the additional
elements are no more than "well-understood[,] technological components
being used in a conventional way to implement the abstract idea." Id. Yet,
the Examiner does not identify, and we do not find, any evidentiary support
demonstrating that providing a unique identifier comprising latent computer
code stored in memory of a secure element of the customer's communication
device at manufacture, as recited in claim 1, is merely the use of well-
understood technological components in a conventional way. See USPTO
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 3 (directing an Examiner on how to establish an additional
element or combination of elements as being well-understood, routine or
conventional).
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Therefore, based on the present record, we are constrained to reverse
the Examiner's rejection of claims 1, 2, 5-8, 10-20, and 23 under 35 U.S.C.
§ 101.
Indefiniteness
In rejecting claims 1, 2, 5-8, 10-20, and 23 under 35 U.S.C. § 112,
second paragraph, the Examiner finds that the terms "latent" and "secure
element" are unclear. Final Act. 4--5 ("it is not clear how the term 'latent'
modifies 'computer code' as compared to if 'latent' was not used at all," or
how the term "'secure element' is intended to limit the feature, given that a
'customer's electronic communication device at manufacture time' would be
considered itself to be a secure element").
Appellants maintain, and we agree, that a person of ordinary skill in
the art would understand what is claimed when the claims are read in light of
the Specification. Br. 17-18 (citing Spec. ,r,r 35, 45). In particular, we agree
with Appellants that one of ordinary skill in the art would understand the
term "latent" to have a meaning consistent its ordinary meaning, such as
dormant. See Spec. ,r,r 34--35, 44--45. We also agree with Appellants that
one of ordinary skill in the art would not understand the term "secure
element" to be a communication device itself, but rather some tamper-
resistant chip of the device. See Spec. ,r 23 ( describing the unique identifiers
as a "chip embedded number").
Therefore, we do not sustain the Examiner's rejection of claims 1, 2,
5-8, 10-20, and 23 under 35 U.S.C. § 112, second paragraph.
See Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1576
(Fed. Cir. 1986) (The test for definiteness under 35 U.S.C. § 112, second
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Application 13/208,927
paragraph, is whether "those skilled in the art would understand what is
claimed when the claim is read in light of the [S]pecification.").
Obviousness
Independent Claims 1 and 14 and Dependent Claims 2-10, 13, 15-23,
and 26
We are persuaded by Appellants' argument that the Examiner erred in
rejecting independent claims 1, 19, 20, and 23 under 35 U.S.C. § 103(a)
because Hruska does not disclose or suggest "providing, for a customer's
electronic communication device, a unique identifier comprising latent
computer code stored in memory of a secure element of the customer's
electronic communication device at manufacture time assigned to an inactive
header account," as recited in claim 1, and similarly recited in claims 19, 20,
and 23. Br. 18-20. The Examiner cites paragraphs 1, 14, and 19 of Hruska
as disclosing this limitation. Final Act. 6; see also Ans. 8-9. In particular,
the Examiner construes Hruska's hand-held device machine equipment
number identifier ("MEID" or "MEIN") as the claimed unique identifier.
Ans. 8; see also Hruska ,r 16. The Examiner reasons that "storage on a
phone possessing typical security features constitutes the recited 'secure
element," and the code comprising the MEIN/Device number is considered
to be 'latent.'" Id. at 8-9. However, we agree with Appellants that Hruska's
"mobile phone MEID is neither stored on a secure element of the mobile
phone nor assigned to a header account at manufacture time," as called for in
claims 1, 19, 20, and 23. 3 Br. 19.
3 In light of the overall form of the claim and the invention as described in
the Specification, we consider the preamble of claim 23 to limit the claim.
See Catalina Mktg. Int'! v. Coolsavings.com, Inc., 289 F.3d 801, 808 (Fed.
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Therefore, we do not sustain the Examiner's rejection of claims 1 , 19,
20, and 23, and their dependent claims under 35 U.S.C. § 103(a).
DECISION
The Examiner's rejection of claims 1, 2, 5-8, 10-20, and 23 under
35 U.S.C. § 101 is reversed.
The Examiner's rejection of claims 1, 2, 5-8, 10-20, and 23 under
35 U.S.C. § 112(b) is reversed.
The Examiner's rejection of claims 1, 2, 5-8, 10-20, and 23 under
35 U.S.C. § 103(a) is reversed.
REVERSED
Cir. 2002). Here, the preamble recites structure underscored as important by
the Specification, and is essential to understand terms in the claim body.
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