Ex Parte Hammad

Patent Trial and Appeal Board

Apr 10, 2018

12507745 (P.T.A.B. Apr. 10, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
12/507,745 0712212009 Ayman Hammad
66945 7590 04/12/2018
KILPATRICK TOWNSEND & STOCKTONLLP/VISA
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
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.
79900-752052(043100US) 6592
EXAMINER
OJIAKU, CHIKAODINAKA
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
04/12/2018 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
EDurrell@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 A YMAN HAMMAD
Appeal2016-008598 1
Application 12/507, 7 45
Technology Center 3600
Before JOHN A. JEFFERY, LARRY J. HUME, and JASON J. CHUNG,
Administrative Patent Judges.
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 4, 17, 39--43, and 47-50, which are all claims pending in
the application. Appellant has canceled claims 1-3, 5-16, 18-3 8, and 44--
46. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 According to Appellant, the real party in interest is Visa International
Service Association. App. Br. 3.
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Application 12/507,745
STATEMENT OF THE CASE2
The Invention
Appellant's disclosed embodiments and claimed invention "are
directed to systems, apparatuses and methods for enabling electronic
payments and the processing of payment transaction data, and more
specifically, to the authorization of a transaction based on the reputation of a
node in the payment network or based on payment device, consumer data, or
other information collected as part of a previous transaction." Spec. i-f 2.
Exemplary Claim
Claim 4, reproduced below, is representative of the subject matter on
appeal (emphases and formatting added to contested prior art limitations):
4. A method of processing payment transactions
conducted by a consumer, comprising:
receiving a first authorization request message for a first
payment transaction at a payment processing network or an
issuer computer of a payment transaction authorization network
from a first terminal in a first node comprising a first merchant
processing system, the payment processing network or the
issuer computer configured to perform a first payment
transaction authorization operation for the first payment
transaction, wherein the first authorization request message was
generated by the first terminal, and wherein the first
authorization request message passes through a first acquirer
computer prior to being received at the payment processing
network or the issuer computer;
2 Our decision relies upon Appellant's Appeal Brief ("App. Br.," filed
Jan. 12, 2016); Reply Brief ("Reply Br.," filed Sept. 12, 2016); Examiner's
Answer ("Ans.," mailed July 12, 2016); Final Office Action ("Final Act.,"
mailed Aug. 14, 2015); and the original Specification ("Spec.," filed
July 22, 2009).
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analyzing, by the payment processing network or the
issuer computer, the first authorization request message and
[L 1] determining, by the presence of a trusted node
indicator in the first authorization request message, that the
first payment transaction was previously authorized by the first
node of the payment transaction authorization network,
wherein the first node is a trusted node, by which the consumer
was previously authenticated;
authorizing the first transaction at the payment
processing network or the issuer computer without requiring
authentication data that would otherwise be present in a
payment transaction that was not authorized by the first node;
sending, from the payment processing network or the
issuer computer to the first node, a first authorization response
message indicating that the first payment transaction is
authorized;
receiving a second authorization request message for a
second payment transaction at the payment processing network
or the issuer computer of the payment transaction authorization
network from a second terminal in a second node comprising a
second merchant processing system, the payment processing
network or the issuer computer configured to perform a second
payment transaction authorization operation for the second
payment transaction, wherein the second authorization request
message was generated by the second terminal, and wherein the
second authorization request message passes through a second
acquirer computer prior to being received at the payment
processing network or the issuer computer;
[L2] analyzing, by the payment processing network or the
issuer computer, the second authorization request message and
determining, by the absence of the trusted node indicator in the
second authorization request message, that the second payment
transaction was not previously authorized by the second node;
sending, by the payment processing network or the issuer
computer, a challenge message to a consumer device of the
consumer requiring authentication data from the consumer to
complete the second payment transaction;
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receiving, by the payment processing network or the
issuer computer, authentication data of the consumer from the
consumer device;
authorizing, by the payment processing network or the
issuer computer, the second transaction; and
sending, from the payment processing network or the
issuer to the second node, a second authorization response
message indicating that the second payment transaction is
authorized, wherein the first payment transaction and the
second payment transaction are different payment transactions.
Prior Art
The Examiner relies upon the following prior art as evidence in
rejecting the claims on appeal:
Camacho et al. US 2003/0208684 Al Nov. 6, 2003
("Camacho")
Wood et al. US 2004/0143546 Al July 22, 2004
("Wood")
Wankmueller et al. US 2008/0082452 Al Apr. 3, 2008
("W ankmueller")
How Credit Card Transactions Work,
www.creditcards.com/credit-card-news/how-a-credit-card-
is-processed-1275.php, January 14, 2009 (hereinafter
''CreditCardProcess'').
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Rejections on Appeal
RI. Claims 4, I 7, and 39-43 stand rejected under 35 U.S.C. § I I2,
second paragraph, as being indefinite. Final Act. 9. 3
R2. Claims 4, I 7, 39-43, and 47-50 stand rejected under 35 U.S.C.
§ IOI as being directed to patent-ineligible subject matter. Final Act. I 1.
R3. Claims 4, I 7, 39-43, and 47-50 stand rejected under 35 U.S.C.
§ I03(a) as being unpatentable over the combination of Camacho, Wood,
Wankmueller, CreditCardProcess, and Chayanam. Final Act. I4.
CLAIM GROUPING
Based on Appellant's arguments (App. Br. 9-29), we decide the
appeal of indefiniteness Rejection RI of claims 4, I 7, and 39-43 on the basis
of representative claim 4; we decide the appeal of patent-ineligible subject
matter Rejection R2 of claims 4, I 7, 39--43, and 47-50 on the basis of
representative claim 4; and we decide the appeal of obviousness Rejection
R3 of claims 4, I 7, 39--43, and 47-50 on the basis of representative claim 4. 4
3 We note the Examiner incorrectly states claims 4, I 7, I9, 20, 34, 35,
and 39-43 are rejected under indefiniteness Rejection RI. Final Act. 9.
However, claims I 9, 20, 34, and 35 have been canceled. See App. Br. 3 I et
seq. (Claims App'x.). We further note claims 47-50 were not rejected under
Rejection RI as indefinite, even though they variously depend from
independent claims 4 and I 7, which were rejected as indefinite. In the event
of further prosecution, we leave it to the Examiner to determine whether
claims 47-50 should also be rejected for indefiniteness under 35 U.S.C.
§ I I 2, second paragraph.
4 "Notwithstanding any other provision of this paragraph, the failure of
appellant to separately argue claims which appellant has grouped together
shall constitute a waiver of any argument that the Board must consider the
patentability of any grouped claim separately." 3 7 C.F .R. § 4 I .3 7 ( c )(I )(iv).
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ISSUES AND ANALYSIS
In reaching this decision, we consider all evidence presented and all
arguments actually made by Appellant. We do not consider arguments
Appellant could have made but chose not to make in the Briefs, and we
deem any such arguments waived. 37 C.F.R. § 41.37(c)(l)(iv).
We disagree with Appellant's arguments with respect to Rejections RI
and R3 of claims 4, 17, 39-43, and 47-50 and, unless otherwise noted, we
incorporate by reference herein and adopt as our own: (1) the findings and
reasons set forth by the Examiner in the action from which this appeal is
taken, and (2) the reasons and rebuttals set forth in the Examiner's Answer in
response to Appellant's arguments.
However, based upon our review of the record, we find a
preponderance of the evidence supports particular arguments advanced by
Appellant with respect to patent-ineligible subject matter Rejection R2 under
§ 101 of claims 4, 17, 39-43, and 47-50 for the specific reasons discussed
below.
We highlight and address specific findings and arguments regarding
claim 4 for emphasis as follows.
In addition, when Appellant does not separately argue the patentability of
dependent claims, the claims stand or fall with the claims from which they
depend. In re King, 801 F.2d 1324, 1325 (Fed. Cir. 1986).
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1. § 112, ,-r 2 Rejection RI of Claims 4, 17, and 39-43
Issue 1
Appellant argues (App. Br. 9--12; Reply Br. 9--11) the Examiner's
rejection of claim 4 under 35 U.S.C. § 112, second paragraph, as being
indefinite is in error. These contentions present us with the following issue:
Did the Examiner err in finding lack of clarity and definiteness in
claim 4 with respect to whether one or multiple authorizations are performed
before the authorization request message sent from the merchant terminal is
performed by the payment processor/issuer?
Analysis
The Examiner finds:
It is unclear from the claims as recited if there is one or
multiple authorizations performed before the authorization
request message sent from the merchant terminal is performed
by the payment processor/issuer [ ] and if the presence of a
trusted node indicator is indicative that the payment transaction
was previously authenticated and not authorized (as claimed)
by the merchant/trusted node and therefore the metes and
bounds of the claim are indefinite.
Taking the broadest reasonable interpretation,
authentication precedes authorization. Therefore it is unclear as
to how the trusted node/merchant terminal or acquirer could
have previously authorized a payment request of a customer
and not the customer or the payment processing network or an
issuer and more so without any previous authentication.
Final Act. 10.
In response, Appellant contends:
[E]ach node performs its own transaction authorization. If the
transaction authorization is performed by the merchant, it may
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result in the merchant generating a transaction request message
to be forwarded to the payment processing network. If the
transaction authorization is performed by the issuer, it may
result in approval of the transaction and transfer of funds from
consumer to the merchant. Appellant's claim 1 [ sic5] is directed
to an embodiment where, for example, a merchant authorized
the transaction. The merchant is a trusted node, which means
that the merchant is a node or element of the transaction
authorization network that is relied upon to vouch for the
trustworthiness of a consumer, account, or consumer device
(See specification, paragraph [0042]). Thus, the payment
processing network or the issuer computer authorizes the first
transaction without requiring authentication data that would
otherwise be present in a payment transaction that was not
authorized by the merchant (See claim 4).
App. Br. 11-12.
We have reviewed the claim language, and agree with the Examiner,
and find it is susceptible to two or more interpretations. 11 [I]f a claim is
amenable to two or more plausible claim constructions, the USPTO is
justified in requiring the applicant to more precisely define the metes and
bounds of the claimed invention by holding the claim ... indefinite. 11 Ex
parte Miyazaki, 89 USPQ2d 1207, 1211 (BP AI 2008) (precedential). 6
5 Claim 1 is canceled, and claim 4 is representative on Appeal.
6 We note the scope of the claims on appeal, at a minimum, at least covers
the embodiments described in the Specification. We emphasize, however,
that under a broad but reasonable interpretation, the scope of the claims is
not limited to the preferred embodiments described in the Specification:
11 [A ]lthough the specification often describes very specific embodiments of
the invention, we have repeatedly warned against confining the claims to
those embodiments .... [C]laims may embrace 'different subject matter than
is illustrated in the specific embodiments in the specification. '11 Phillips v.
AWH Corp., 415 F.3d 1303, 1323 (Fed. Cir. 2005) (en bane) (citations and
internal quotation marks omitted).
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In particular, we find the claim language to lack clarity and
definiteness with respect to the steps of "analyzing ... the first authorization
request message and determining ... that the first payment transaction was
previously authorized by the first node of the payment transaction
authorization network," and "authorizing the first transaction at the payment
processing network or the issuer computer." Claim 4. From this claim
language, we find inconsistent verb tense usage, with the possibility that
multiple transaction authorizations are required, and these different
authorizations are not adequately distinguished in the claim, despite
Appellant's arguments. 7 See App. Br. 11-12. Further, it is unclear from the
claim language and Specification that, if a transaction was authorized
previously, why another authorization for the same transaction would be
required.
Therefore, based upon the findings above, on this record, we are not
persuaded of error in the Examiner's determination that claim 4 is indefinite.
Therefore, we sustain the Examiner's indefiniteness Rejection RI of
independent claim 4, and grouped claims 17, and 39-43, which fall
therewith. See Claim Grouping, supra.
7 Cf original claim 1, which recites, in pertinent part, "if the consumer
device should be considered seasoned, then provide confirmation of the
device being reliable to a node of an authorization network as part of a
subsequent transaction." We note the currently pending representative
claim 4 lacks any recitation of confirming device reliability or "seasoning"
as part of a subsequent transaction, which we understand to be an objective
of the disclosed invention. See Spec. i-f 2.
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2. § 101 Rejection R2 of Claims 4, 17, 39-43, and 47-50
Issue 2
Appellant argues (App. Br. 11-13; Reply Br. 2-9) the Examiner's
rejection of claim 4 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 the claims are directed to patent-
ineligible subject matter, i.e., a judicial exception in the form of an abstract
idea, without significantly more?
Analysis
Alice Framework
Section 101 provides that anyone who "invents or discovers any new
and useful process, machine, manufacture, or composition of matter, or any
new and useful improvement thereof' may obtain a patent. 35 U.S.C. § 101.
The Supreme Court has repeatedly emphasized that patent protection should
not extend to claims that monopolize "the basic tools of scientific and
technological work." Gottschalk v. Benson, 409 U.S. 63, 67 (1972); Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012);
Alice Corp. Pty. Ltd. v. CLS Bankint'l, 134 S. Ct. 2347, 2354 (2014).
Accordingly, laws of nature, natural phenomena, and abstract ideas are not
patent-eligible subject matter. Id.
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, 134 S. Ct. at 2354. First, we "determine whether
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the claims at issue are directed to 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., 566 U.S. 66, 79 (2012)).
While the two steps8 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., LLC v. 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. Enfzsh, LLC v. Microsoft Corp.,
822 F.3d 1327, 1334 (Fed. Cir. 2016) (citing Alice, 134 S. Ct. at 2357).
Alice Step I -Abstract Idea
Our reviewing court has held claims ineligible as being directed to an
abstract idea when they merely collect electronic information, display
information, or embody mental processes that could be performed by
humans. Elec. Power Grp., 830 F.3d at 1353-54 (collecting cases). At the
same time, "all inventions at some level embody, use, reflect, rest upon, or
apply laws of nature, natural phenomena, or abstract ideas." Mayo, 566 U.S.
at 71. Under this guidance, we must therefore ensure at step one that we
articulate what the claims are directed to with enough specificity to ensure
the step one inquiry is meaningful. Alice, 134 S. Ct. at 2354 ("[W]e tread
8 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).
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carefully in construing this exclusionary principle lest it swallow all of
patent law.").
Appellant contends:
[T]he pending claims profess to solve problems of prior
systems, namely authorization of a transaction request without
requiring user authentication. The technical problems include
identification of a trusted node in the authorization network, the
incorporation of a trusted node indicator in an authorization
request message and the identification of prior authorization of
a transaction by the trusted node. [The c ]laimed invention
allow[ s] a payment processing network or an issuer computer to
authorize a transaction without requiring authentication data.
This occurs when the payment processing network or the issuer
computer identifies a transaction authorization request message
includes a trusted node indicator ....
Appellant's claimed features recite a solution to the technical
problem of how to share authentication and authorization
information among nodes in the payment processing network
and how to signal that a trusted node already authenticated and
authorized a consumer, a transaction or a consumer device. This
is accomplished by generating a trusted node indicator. Thus,
features of pending claims are technical features and not
abstract ideas.
App. Br. 15-16.
In response, the Examiner concludes the appealed claims are directed
to a judicial exception, i.e., an abstract idea without significantly more
because, "[t]aking the broadest reasonable interpretation[,] the invention is
directed to authorizing a customer payment request based on preexisting
history of the customer with the payment processor and or the merchant that
does not require additional authentication from the customer/payor." Ans. 2.
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Moreover, the Examiner concludes:
The claimed invention related to transaction authorization
and or authentication based on preexisting history of the
customer with the payment processor and or the merchant is
similar to the fundamental economic practice of mitigating
settlement risk (Alice), processing of loan information
(Dealtrack) organizing information through mathematical
correlations (Digitech ), collection and comparing known
information (Classen), comparing new and stored information
and using rules to identify options (SmartGene), using
categories to organize, store and transmit information
( Cyberphone) and or reducing the amount of calculations in
known and established computations (FuzzySharp) which have
been sustained by the court as abstract ideas.
Ans. 3--4
Under the "abstract idea" step we must evaluate "the 'focus of the
claimed advance over the prior art' to determine if the claim's 'character as a
whole' is directed to excluded subject matter." Affinity Labs, 838 F.3d at
1257 (citation omitted).
Turning to the claimed invention, claim 4 recites, " [a] method of
processing payment transactions conducted by a consumer. ... " Claim 4
(preamble). The claimed step limitations also require the steps of "receiving
... a first authorization request message;" "analyzing ... the first
authorization request message;" "determining ... that the first payment
transaction was previously authorized;" "authorizing the first transaction at
the payment processing network or the issuer computer;" "sending ... a first
authorization response message;" and "receiving a second authorization
request message."
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The Examiner concludes, "[t]aking the broadest reasonable
interpretation the invention is directed to authorizing a customer payment
request based on preexisting history of the customer with the payment
processor and or the merchant that does not require additional authentication
from the customer/payor." Ans. 2.
The claimed invention [is] related to transaction
authorization and or authentication based on preexisting history
of the customer with the payment processor and or the merchant
[which] is similar to the fundamental economic practice of
mitigating settlement risk (Alice), processing of loan
information (Dealtrack) organizing information through
mathematical correlations (Digitech ), collection and comparing
known information (Classen), comparing new and stored
information and using rules to identify options (SmartGene),
using categories to organize, store and transmit information
( Cyberphone) and or reducing the amount of calculations in
known and established computations (FuzzySharp) which have
been sustained by the court as abstract ideas.
The additional steps of receiving an authorization
request, analyzing the second request message and determining
that the request was not previously authorized by the previous
node; sending a challenge message to a consumer requiring
authentication data from the consumer, receiving authentication
data; authorizing the transaction and sending an authorization
response message indicating the transaction is authorized is an
abstract idea similar to a fundamental economic practice of risk
mitigation (Alice Corp.) and a method of organizing human
activity of generating rule based tasks for processing an
insurance claim (Accenture).
Ans. 3--4.
Under step one, we agree with the Examiner that the inventions
claimed in each of independent claims 4 and 1 7 are directed to an abstract
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idea, i.e., fundamental economic and business practices, and methods of
organizing human activity, specifically payment authorization. See id.
As the Specification itself observes,
[ e ]mbodiments of the present invention are directed to systems,
apparatuses and methods for enabling electronic payments and
the processing of payment transaction data, and more
specifically, to the authorization of a transaction based on the
reputation of a node in the payment network or based on
payment device, consumer data, or other information collected
as part of a previous transaction.
Spec. i12. 9 We find this type of activity, i.e., authorizing a payment
transaction based upon inferred trustworthiness of the customer or node
reputation, whether done electronically or not, includes longstanding
conduct that existed well before the advent of computers and the Internet,
and could be carried out by a human with pen and paper. See 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
9 See also Spec. 31 ("Abstract"):
A system, apparatus, and method for expediting the
authorization of an electronic payment transaction.
Authorization of a transaction at a node of an authorization
network is the result of inferring the trustworthiness of a
customer to the transaction using data obtained from a different
node of the authorization network. The authorization process is
expedited by relying on the previous authentication decision of
another node, where the previous decision may have been made
based on a different payment device or different user inputs.
The invention uses a decision made by a first node in the
authorization network as a proxy for the authorization decision
at a different node, thereby transferring the trustworthiness of a
consumer, consumer's device, payment device, or other aspect
of the transaction from the first node to the second.
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computer, was precisely the holding of the Supreme Court in Gottschalk v.
Benson."). 10
Our reviewing court has held previously other patent claims ineligible
for reciting similar abstract concepts. For example, while the Supreme
Court has enhanced the § 101 analysis since CyberSource in cases like Mayo
and Alice, they 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." Synopsys,
Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1146-47 (Fed. Cir. 2016)
(alteration in original) (quoting Elec. Power Grp., 830 F.3d at 1354).
In this regard, the claims are similar to claims our reviewing court has
found patent ineligible in Elec. Power Grp., 830 F.3d at 1353-54 (collecting
information and "analyzing information by steps people go through in their
minds, or by mathematical algorithms, without more, [are] essentially
mental processes within the abstract-idea category").
Therefore, in agreement with the Examiner, we conclude claim 4
involves nothing more than identifying, collecting, storing, comparing, and
generating data, without any particular inventive technology- an abstract
idea. See Elec. Power Grp., 830 F.3d at 1354. We further refer to Content
Extraction, where the Federal Circuit has provided additional guidance on
the issue of statutory subject matter by holding claims to collecting data,
recognizing certain data within the collected data set, and storing that
recognized data in memory were directed to an abstract idea and therefore
1° CyberSource further guides that "a method that can be performed by
human thought alone is merely an abstract idea and is not patent-eligible
under§ 101." CyberSource, 654 F.3d at 1373.
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unpatentable under § 101. Content Extraction & Transmission LLC v. Wells
Fargo Bank, N.A., 776 F.3d 1343 (Fed. Cir. 2014).
Accordingly, on this record, and under step one of Alice, we agree
with the Examiner's conclusion the claims are directed to an abstract idea.
Alice Step 2 -Inventive Concept
If the claims are directed to a patent-ineligible concept, as we
conclude above, we proceed to the "inventive concept" step. For that step
we must "look with more specificity at what the claim elements add, in order
to determine 'whether they identify an 'inventive concept' in the application
of the ineligible subject matter' to which the claim is directed." Affinity
Labs, 838 F.3d at 1258 (quoting Elec. Power Grp., 830 F.3d at 1353).
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, 566
U.S. at 79.
Evaluating representative claim 4 under step 2 of the Alice analysis,
we disagree with the Examiner that it lacks an inventive concept that
transforms the abstract idea of authorizing payments into a patent-eligible
application of that abstract idea. See Ans. 4--12.
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We disagree with the Examiner even though, as in Alice, there are
conventional computer processing aspects recited in the claims, we find, as a
whole, claim 4 is directed to "significantly more" in terms of the
improvement in the underlying payment processing technology in the claim
that directly results in reduced payment processing times.
For example, Appellant persuasively argues, "the claimed invention
addresses the problem of processing and authorizing electronic payment
transactions. If adhering to the routine and conventional implementations
where each entity in a payment transaction authorization network must
separately approve and authorize a transaction, additional processing time
and delays in conducting transactions result (See specification, paragraph
[0006])." App. Br. 19. 11
11 Appellant's Specification discloses one particular set of problems with
prior art payment authorization schemes, which the claimed invention is said
to solve:
Some of the data, such as the consumer data, payment device
data, or point of sale terminal or consumer computing device
data is typically not shared between the elements or nodes of
the transaction authorization network. As a result, transactions
initiated by the same consumer using different computing
devices or by the same consumer with different merchants
require the same authorization process, even though the
consumer may have demonstrated that they are reliable when
their entire payment and transaction history is considered. This
delays acceptance of a consumer, consumer's account, or
consumer's device as a reliable party to a transaction by the
elements of the transaction authorization network, where more
rapid acceptance would decrease the data processing and time
required for transaction authorization. It may also prevent a
merchant from accepting a transaction from a consumer that the
merchant is familiar with and finds reliable, even though
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In the Reply Brief, Appellant persuasively argues:
Specifically, the claimed invention expedites the authorization
of a transaction or the identification of a consumer, account or
consumer device as being sufficiently reliable to be considered
seasoned by a merchant or other node of the authorization
network. The ability to authorize a transaction without requiring
authentication data provides for several advantages over the
prior art systems. In conventional systems, some of the data,
such as the consumer data, payment device data, or point of sale
terminal or consumer computing device data is typically not
shared between the elements or nodes of the transaction
authorization network. As a result, transactions initiated by the
same consumer using different computing devices or by the
same consumer with different merchants require the same
authorization process, even though the consumer may have
demonstrated that they are reliable when their entire payment
and transaction history is considered. This delays acceptance of
a consumer, consumer's account, or consumer's device as a
reliable party to a transaction by the elements of the transaction
authorization network, where more rapid acceptance would
decrease the data processing and time required for transaction
authorization. It may also prevent a merchant from accepting a
transaction from a consumer that the merchant is familiar with
and finds reliable, even though another node of the
authorization network might decline to accept the transaction
(See paragraph [0006]). In addition to the data processing
burden this places on the payment network, this can frustrate a
consumer and have a negative impact on their use of the
payment network for future transactions (See paragraph
[0007]). In embodiments of the present invention, the payment
processing network or the issuer computer may rely on the
previous authorization and authentication of another node (e.g.
a trusted node) in the payment transaction authorization
network.
another node of the authorization network might decline to
accept the transaction.
Spec. i-f 6.
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Reply Br. 7-8.
We find this improvement results, at least in part, from the use of a
trusted node indicator in the first authorization message that indicates that
the payment transaction was authorized by a trusted node that previously
authenticated the consumer/user. See App. Br. 20; Reply Br. 8.
Accordingly, we are persuaded of error in the Examiner's
determination under Step 2 of the Alice analysis that the appealed claims are
directed to patent-ineligible subject matter. Therefore, we do not sustain the
Examiner's § 101 rejection of independent claim 4, and grouped claims 17
and 39-43, not argued separately, and which stand therewith. See Claim
Grouping, supra.
3. § 103 Rejection R3 of Claims 4, 17, 39-43, and 47-50
Issue 3
Appellant argues (App. Br. 23-29; Reply Br. 11-15) the Examiner's
rejection of claim 4 under 35 U.S.C. § 103(a) as being unpatentable over the
combination of Camacho, Wood, Wankmueller, CreditCardProcessing, and
Chayanam is in error. These contentions present us with the following
ISsues:
(a) Did the Examiner err in concluding the cited prior art
combination teaches or suggests a "method of processing payment
transactions conducted by a consumer" that includes, inter alia, the steps of
[L 1] "determining, by the presence of a trusted node indicator in the first
authorization request message, that the first payment transaction was
previously authorized by the first node of the payment transaction
authorization network, wherein the first node is a trusted node, by which the
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consumer was previously authenticated," and [L2] "analyzing, by the
payment processing network or the issuer computer, the second
authorization request message and determining, by the absence of the trusted
node indicator in the second authorization request message, that the second
payment transaction was not previously authorized by the second node," as
recited by claim 4?
(b) Under § 103, did the Examiner err by relying upon
impermissible hindsight in combining the cited prior art references in the
manner suggested?
Analysis
(a) All Limitations are Taught or Suggested
Limitation LI - Determining Previous Payment Authorization
Appellant contends "[i]n Wankmueller, the terminal that initiates the
transaction also authenticates the user," which is alleged to be similar to
conventional payment authorization systems where the payment processing
network or the issuer computer requires authentication of the consumer prior
to authorizing the transaction. App. Br. 24. "In Wankmueller, the
authentication is delegated to the terminal (See paragraph [0090]). That is,
the normal course of transaction is still intact where the authorizing entity
requests authentication of the user." Id.
Appellant further argues:
[I]n Wankmueller, the authorizing entity receives evidence that
the terminal authenticated the user (See paragraph [O 101 ]). In
contrast, in the claimed invention, the payment processing
network or the issuer computer determines, by the presence of a
trusted node indicator in the first authorization request message,
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that the first payment transaction was previously authorized by
the first node of the payment transaction authorization network.
That is, simply by virtue of having a trusted node indicator in
the authorization request message, the payment processing
network or the issuer computer assumes that the first payment
transaction was previously authorized by the first node. No
authentication evidence is provided to the payment processing
network or the issuer computer.
App. Br. 24--25.
In response, the Examiner finds Wankmueller teaches "creating a
verification flag that is used as evidence that [the] user has been
authenticated." Ans. 20 (citing Wankmueller i-fi-195, 101 ). With specific
reference to the "trusted node indicator" aspect of the claim recitation, the
Examiner finds "as result of an interaction between the user and the terminal
a verification flag is generated and stored .... [and t]he flag 'can be used
and transferred to and by a transaction terminal in an open non-secure
manner.'" Ans. 20-21 (quoting Wankmueller i162).
We agree with the Examiner's finding that Wankmueller's verification
flag teaches or at least suggests the recited trusted node indicator.
Limitation L2 -Analyzing the Second Authorization Request
Appellant generally contends "Chayanam does not remedy the
deficiencies in Camacho, Wood, Wankmueller and CreditCardProcess," and
specifically argues Chayanam does not teach or suggest "analyzing"
limitation L2 (App. Br. 25), alleging "Chayanam is entirely silent about a
payment authorization network." App. Br. 26.
"Moreover, Chayanam is directed to recognizing previous successful
login attempts. Chayanam is entirely silent about determining, by the
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absence of the trusted node indicator in the second authorization request
message, that the second payment transaction was not previously authorized
by the second node, as recited in Appellant's claim 4." Id.
In response, the Examiner finds,
Camacho evaluates current request against historical
profile and authenticates "transactions conducted by an
individual or agent by comparing biometric data and/or profiles
to known templates previously provided to the system in a
certifiable environment" (Camacho paras. 0030, 0040---0042;
see also para. 0014)
However, Chayanam, USP No. 8136148 discloses
assurances of user identity and user confirmation of previously
stored mutual authentication data. A determination as to
whether the terminal is recognized may be based on the IP
address of the client computer ( Chayanam, col. 4 line 36-43 -
" ... desktop or laptop computer with a browser software
application, a mobile device or mobile phone with Internet
capability, or any computing device from which a user can
access web content.") where the transaction is initiated or even
user IDs (Chayanam, col. 6 line 50--60). If the terminal is not
recognized ( Chayanam, col. 8 line 37- col. 9 line 13; see also
col. 7 line 43-49)
Ans. 21-22.
In the Reply Brief (13), Appellant states, :[t]he Examiner's Answer
appears to end at mid-sentence and fails to address the specific argument
presented by the Appellant in the Appeal Brief Appellant reiterates that
Chayanam is entirely silent about a payment authorization network." We
disagree with Appellant's assessment of the Examiner's response, and the
teachings and suggestions of Chayanam.
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We disagree because the test for obviousness is what the combined
teachings of the prior art would have suggested to the hypothetical person of
ordinary skill in the art. In re Keller, 642 F.2d 413, 425 (CCPA 1981).
Camacho is relied upon by the Examiner (Final Act. 4; Ans. 21) for
teaching or suggesting a payment authorization network, and Chayanam is
relied upon for the more limited teaching of dealing with lack of recognition
of user identity and user confirmation of previously stored mutual
authentication data. Ans. 21.
We further disagree with Appellant because, while the Examiner may
have provided a shorthand response in a sentence that appears to trail off,
i.e., "[i]f the terminal is not recognized ... " (Ans. 22 (citing Chayanam,
col. 8, 11. 37- col. 9, 11. 13; col. 7, 11. 43--49)), when the portions of the cited
reference are actually read, it is clear that the Examiner's findings and
citation are responsive to the disputed claim limitation L2. For example,
Chayanam deals with the situation when the terminal is not recognized, e.g.,
"[i]fthe client terminal 210 or an associated user is not recognized (303:
No), then the authentication user 400 interface may remain blank as in FIG.
4 A, thus requiring the user to input their valid user credentials into the
online ID text box 405" (Chayanam col. 7, 11. 43--47), or "when a user online
ID received in step 305 is not recognized as matching the client computer
210, a challenge question is presented to the user in step 307." Id. at col. 8,
11. 37--40.
Accordingly, we do not find Appellant's arguments persuasive that the
Examiner erred in finding the cited combination teaches or suggests disputed
limitations L 1 and L2.
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(b) Motivation to Combine is Proper
Appellant contends, "the Examiner is using improper hindsight to
reject the claims .... [because] the reason for combining Camacho, Wood,
Wankmueller, CreditCardProcess and Chayanam is not at all present in or
suggested by the prior art, but is found in the present specification." App.
Br. 26.
Appellant further argues:
[T]he rationale that one would have combined Camacho,
Wood, Wankmueller, CreditCardProcess and Chayanam in
order to "provide an improvement in the authentication process"
is found at paragraph [0056] of the Appellant's originally filed
Specification. However, Appellant's pending claims are
directed to more than provide an improvement in the
authentication process. Specifically, the improvement in the
authentication process is linked to the inclusion of a trusted
node in the payment transaction authorization network. ...
Thus, in the pending claims, a trusted node authorizes the
transaction and includes a trusted node indicator in the
authorization request message. The Examiner's rationale fails to
link the improvement in the authentication process with the
inclusion of a trusted node in the payment transaction
authorization network. Without this link, one of ordinary skill
in the art would not be motivated to combine the teachings of
Camacho, Wood, Wankmueller, CreditCardProcess and
Chayanam. This concept cannot be found at all in Camacho,
Wood, Wankmueller, CreditCardProcess and Chayanam.
App. Br. 27.
With respect to the Examiner's stated basis for motivation to combine,
the Examiner finds,
[i]t would have been obvious to one skilled in the art at the time
of the invention to modify Camacho, Wood, Wankmueller and
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CreditCardProcess with Chayanam because it is using well
known security mechanisms to provide an improvement in the
authentication process whereby the risk of spoofing and identity
theft is minimized by providing additional assurances to the
user through a customizable challenge question authentication
scheme.
Ans. 22; see also Final Act. 20.
We agree with the Examiner, and add the following for emphasis.
First, as explained in In re McLaughlin:
Any judgment on obviousness is in a sense necessarily a
reconstruction based upon hindsight reasoning, but so long as it
takes into account only knowledge which was within the level
of ordinary skill at the time the claimed invention was made
and does not include knowledge gleaned only from applicant's
disclosure, such a reconstruction is proper.
In re McLaughlin, 443 F.2d 1392, 1395 (CCPA 1971).
Our review of the record establishes that the Examiner's case for
obviousness is only based on knowledge which was within the level of
ordinary skill at the time of Appellant's invention and does not include
knowledge gleaned only from the Appellant's disclosure.
Second, the Examiner identifies the relevant portions of each of the
references relied on throughout the Examiner's Answer. See Ans. 18-22.
To the extent that the Examiner relies on the knowledge of one of ordinary
skill in the art to combine the teachings of the references, this practice is
consistent with current case law. For example, the Supreme Court explains:
Often, it will be necessary for a court to look to
interrelated teachings of multiple patents; the effects of
demands known to the design community or present in the
marketplace; and the background knowledge possessed by a
person having ordinary skill in the art, all in order to determine
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whether there was an apparent reason to combine the known
elements in the fashion claimed by the patent at issue. To
facilitate review, this analysis should be made explicit. See In
re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006) ("[R]ejections on
obviousness grounds cannot be sustained by mere conclusory
statements; instead, there must be some articulated reasoning
with some rational underpinning to support the legal conclusion
of obviousness"). As our precedents make clear, however, the
analysis need not seek out precise teachings directed to the
specific subject matter of the challenged claim, for a court can
take account of the inferences and creative steps that a person
of ordinary skill in the art would employ.
KSR Int'! Co, v. Teleflex, Inc., 550 U.S. 398, 418 (2007).
Additionally, the reason or motivation to modify the reference may
often suggest what the inventor has done, but for a different purpose or to
solve a different problem. It is not necessary that the prior art suggest the
combination to achieve the same advantage or result discovered by
Appellant. See, e.g., In re Kahn, 441F.3d977, 987 (Fed. Cir. 2006)
(motivation question arises in the context of the general problem confronting
the inventor rather than the specific problem solved by the invention); Cross
Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1323
(Fed. Cir. 2005) ("One of ordinary skill in the art need not see the identical
problem addressed in a prior art reference to be motivated to apply its
teachings."); In re Linter, 458 F.2d 1013 (CCPA 1972); In re Dillon, 919
F.2d 688, (Fed. Cir. 1990), cert. denied, 500 U.S. 904 (1991). "In
determining whether the subject matter of a patent claim is obvious, neither
the particular motivation nor the avowed purpose of the patentee controls."
KSR, 550 U.S. at 419. For a prima facie case of obviousness to be
established, the reference need not recognize the same problem solved by
Appellant. See In re Kemps, 97 F.3d 1427, 1430 (Fed. Cir. 1996); In re
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Beattie, 974 F.2d 1309, 1312 (Fed. Cir. 1992); Ex parte Obiaya, 227 USPQ
58, 60 (Bd. Pat. App. & Int. 1985) ("The fact that appellant has recognized
another advantage which would flow naturally from following the
suggestion of the prior art cannot be the basis for patentability when the
differences would otherwise be obvious.").
In this case, we find that Appellant's invention is simply a
combination of known teachings that realize a predictable result. The
Supreme Court has determined the conclusion of obviousness can be based
on the interrelated teachings of multiple patents, the effects of demands
known to the design community or present in the marketplace, and the
background knowledge possessed by a person having ordinary skill in the
art. KSR Int'! Co. v. Teleflex, Inc., 550 U.S. at 418. The skilled artisan
would "be able to fit the teachings of multiple patents together like pieces of
a puzzle" since the skilled artisan is "a person of ordinary creativity, not an
automaton." Id. at 420-21.
Moreover, Appellant has not demonstrated that the Examiner's
proffered combination of references would have been "uniquely challenging
or difficult for one of ordinary skill in the art." See Leapfrog Enters., Inc. v.
Fisher-Price, Inc., 485 F.3d 1157, 1162 (Fed. Cir. 2007) (citing KSR, 550
U.S. at 418). Nor has Appellant provided objective evidence of secondary
considerations which our reviewing court guides "operates as a beneficial
check on hindsight." Cheese Sys., Inc. v. Tetra Pak Cheese and Powder
Sys., 725 F.3d 1341, 1352 (Fed. Cir. 2013).
In this case, we find the Examiner's conclusions of obviousness are
clearly articulated and are based on detailed factual findings that are
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supported by the references of record. See Final Act. I 4--20; Ans. I 8-22.
Thus, we agree with the Examiner's findings and conclusions.
Therefore, based upon the findings above, on this record, we are not
persuaded of error in the Examiner's reliance on the cited prior art
combination to teach or suggest the disputed limitation of claim 4, nor do we
find error in the Examiner's resulting legal conclusion of obviousness.
Therefore, we sustain the Examiner's obviousness rejection of independent
claim 4, and grouped claims I 7, 39--43, and 47-50, which fall therewith.
See Claim Grouping, supra.
REPLY BRIEF
To the extent Appellant may advance new arguments in the Reply
Brief (Reply Br. 2-I5) not in response to a shift in the Examiner's position
in the Answer, we note arguments raised in a Reply Brief that were not
raised in the Appeal Brief or are not responsive to arguments raised in the
Examiner's Answer will not be considered except for good cause (see 37
C.F.R. § 41.4I(b)(2)), which Appellant has not shown.
CONCLUSIONS
(1) The Examiner did not err with respect to indefiniteness
Rejection RI of claims 4, I 7, and 39--43 under 35 U.S.C. § I I2, second
paragraph, and we sustain the rejection.
(2) The Examiner erred with respect to patent-ineligible subject
matter Rejection RI of claims 4, I 7, 39--43, and 47-50 under 35 U.S.C.
§ IOI, and we do not sustain the rejection.
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(3) The Examiner did not err with respect to obviousness Rejection
R3 of claims 4, 17, 39-43, and 47-50 under 35 U.S.C. § 103(a) over the
cited prior art combination of record, and we sustain the rejection.
Because we have affirmed at least one ground of rejection with
respect to each claim on appeal, we affirm the Examiner's decision. See 37
C.F.R. § 41.50(a)(l).
DECISION
We affirm the Examiner's decision rejecting claims 4, 17, 39-43, and
47-50.
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). See 37
C.F.R. § 41.50(±).
AFFIRMED
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