Ex Parte Howe

Patent Trial and Appeal Board

Oct 3, 2018

13890414 (P.T.A.B. Oct. 3, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/890,414 05/09/2013
71973 7590 10/04/2018
Budzyn IP Law, LLC
120 Eagle Rock Avenue
Suite 328
East Hanover, NJ 07936
FIRST NAMED INVENTOR
Justin Xavier Howe
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.
1788-89 9227
EXAMINER
NORMAN, SAMICA L
ART UNIT PAPER NUMBER
3697
MAIL DATE DELIVERY MODE
10/04/2018 PAPER
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JUSTIN XAVIER HOWE
Appeal2017-008316 1
Application 13/890,4142
Technology Center 3600
Before ALLEN R. MacDONALD, JAMES B. ARPIN, and
JOSEPH P. LENTIVECH, Administrative Patent Judges.
ARPIN, Administrative Patent Judge.
I. DECISION ON APPEAL
This is an appeal under 35 U.S.C. § 134(a) of a rejection of claims 1-
3, 5-8, 10, 12-19, 31, 32, 34, 36, 38, 43 and 44. Br. 2. Claims 4, 9, 11, 20-
30, 33, 35, 37, 39-42, and 45 are cancelled. Final Act. 2. We have
jurisdiction under 35 U.S.C. § 6(b).
We affirm.
1 In this Decision, we refer to Appellant's Appeal Brief ("Br.," filed
November 15, 2016); the Final Office Action ("Final Act.," mailed May 20,
2016); the Examiner's Answer ("Ans.," mailed February 8, 2017); and the
originally-filed Specification ("Spec.," filed May 9, 2013).
2 According to Appellant, the real party-in-interest is MasterCard
International, Inc. Br. 2.
Appeal2017-008316
Application 13/890,414
II. STATEMENT OF THE CASE
Appellant's recited methods and systems relate to updating a payment
cardholder's personal data and, more particularly, to methods and systems
enabling the propagation of cardholder personal data updates and the
synchronization of updates of cardholder personal data with an address
verification system ("A VS"). See Spec. ,r 1. Before authorizing a payment
transaction, an issuing bank and a merchant bank may compare personal
data associated with the cardholder for verification purposes. See Spec. ,r 5.
As noted above, claims 1-3, 5-8, 10, 12-19, 31, 32, 34, 36, 38, 43, and 44
are pending. Claims 1, directed to the recited methods, and 31, directed to
systems for performing such methods, are independent. Br. Claims App 'x.
Claims 2, 3, 5-8, 10, 12-19, 43, and 44 depend directly or indirectly from
claim 1; and claims 32, 34, 36, and 38 depend directly from claim 31. Id.
Claim 1, reproduced below, is illustrative.
1. A computer-implemented method for processing updated
payment cardholder personal data, the method comprising:
maintaining a verification synchronization data structure
storing at least one data item associated with a payment card and
a merchant, the merchant not yet notified regarding the payment
cardholder' s personal data update;
monitoring transactions transacted by the payment
cardholder in a card data feed in real-time and storing associated
transaction history data, the transaction history data including the
payment card used, the merchant transacted with, and the date of
the most recent transaction;
receiving, by at least one processing device, updated
personal data associated with a payment cardholder, the at least
one processing device associated with a personal data update
service;
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Application 13/890,414
obtaining, by the at least one processing device, data
identifying at least one payment system entity with which the
payment cardholder has a transaction history, the data identifying
the at least one payment system entity stored by the personal data
update service and updated periodically or upon occurrence of an
event;
rece1vmg notification of a transaction needing
authorization between the payment cardholder and the merchant;
accessing transaction data associated with the transaction,
the transaction data including identification of the payment card
associated with the payment cardholder and the merchant, and
verification data associated with the payment card that is used to
authorize the transaction;
determining if the verification synchronization data
structure includes a data item that is associated with the identified
payment card and the merchant, and, if so, replacing the
verification data included in the transaction data with the updated
personal data before a process to authorize the transaction; and
transmitting via an electronic notification system
associated with the at least one processing device, notification of
the payment cardholder' s personal data update to the identified
at least one payment system entity if the at least one payment
system entity is located in a notification file stored by the
personal data update service in real-time during the transaction
in order that the transaction is not denied due to an address
updated by one entity,
wherein the receiving, obtaining, and transmitting by the
at least one processing device are performed independent of
administration by an issuing bank that issued a payment card to
the payment cardholder, the independently performed
administration performed by a processing device separate from
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Id.
the at least one processing device associated with the personal
data update service.
III. THE REJECTION
Claims 1-3, 5-8, 10, 12-19, 31, 32, 34, 36, 38, 43, and 44 stand
rejected under 35 U.S.C. § 101 "because the claimed invention is directed to
a judicial exception (i.e., a law of nature, a natural phenomenon, or an
abstract idea) without significantly more," i.e., because the claimed methods
and systems are patent-ineligible subject matter. Final Act. 2. 3
IV. APPELLANT'S CONTENTIONS
Appellant presents three contentions:
1. Has the Examiner erred in determining that the pending claims are
directed to an abstract idea? Br. 7-8.
2. Has the Examiner erred in determining that the pending claims are
patent ineligible although the pending claims allegedly depend upon a
specific structure of components that provide a technological solution
to a technological problem and are narrowly drawn so as not to
preempt any and all methods and systems for processing updated
cardholder payments? Id. at 8-9.
3. Has the Examiner erred in determining that the pending claims do not
include additional elements that are sufficient to amount to
significantly more than the abstract idea? Id. at 9-11.
3 The Examiner states that "Claims 1-3, 5-8, 10, 12-19, 31, 32, 34, 36, 38, 43
and 44 are allowable over the prior art of record." Final. Act. 3.
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Appellant relies on the same contentions with respect to each of the
pending claims. We are not persuaded of Examiner error with regard to
these contentions.
V. ANAL YSIS 4
We have reviewed the Examiner's rejection in light of Appellant's
Appeal Brief arguments that the Examiner has erred.
A. Legal Principles
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 U.S. Supreme Court has "long held
that this provision contains an important implicit exception: Laws of nature,
natural phenomena, and abstract ideas are not patentable." Alice Corp. v.
CLS Bank Int 'l, 134 S. Ct. 2347, 2354 (2014) (emphasis added; quoting
Ass 'nfor Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589
(2013)). Accordingly, in applying the§ 101 exception, the Court cautioned:
[W]e must distinguish between patents that claim the
"'buildin[g] block[ s] "' of human ingenuity and those that
integrate the building blocks into something more, thereby
"transform[ing]" them into a patent-eligible invention. The
former "would risk disproportionately tying up the use of the
underlying" ideas, and are therefore ineligible for patent
protection. The latter pose no comparable risk of pre-emption,
and therefore remain eligible for the monopoly granted under our
patent laws.
Alice, 134 S. Ct. at 2354--55.
4 All MPEP citations herein are to MPEP Rev. 08.2017, January 2018.
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The Court in Alice reiterated the two-step framework previously set
forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566
U.S. 66, 82-83 (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. Id. For
example, a fundamental economic practice is an abstract idea:
[In Bilski v. Kappas], the Court grounded its conclusion that all
of the claims at issue were abstract ideas in the understanding
that risk hedging was a "'fundamental economic practice."' 561
U.S.[ 593,] 611[ (2010)].
Alice, 134 S. Ct. at 2357.
The Court acknowledged in Mayo that "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. We, therefore, look to whether the
claims focus on a specific method or means that improves the relevant
technology or are instead directed to a result or effect that itself is the
abstract idea and merely invoke generic processes and machinery. See
Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1335-36 (Fed. Cir. 2016).
If the claims are not directed to an abstract idea, the inquiry ends. Id. at
1339. 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 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 78, 79).
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Central to our analysis is the fundamental principle that the Alice
framework must be applied to the claims, as properly construed. As our
reviewing court has stated, "[ t ]he § 101 inquiry must focus on the language
of the Asserted Claims themselves." Synopsys, Inc. v. Mentor Graphics
Corp., 839 F.3d 1138, 1149 (Fed. Cir. 2016); see also Accenture Global
Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1345 (Fed. Cir.
2013) ( admonishing that "the important inquiry for a § 101 analysis is to
look to the claim"); Content Extraction & Transmission LLC v. Wells Fargo
Bank, Nat'! Ass 'n, 776 F.3d 1343, 1346 (Fed. Cir. 2014) (focusing on
"whether the claims of the asserted patents fall within the excluded category
of abstract ideas") ( emphasis added)).
These principles are based on long-established jurisprudence that "[i]t
is the claims [that] define the metes and bounds of the invention entitled to
the protection of the patent system." In re Warmerdam, 33 F.3d 1354, 1360
(Fed. Cir. 1994) (citing Zenith Lab. Inc. v. Bristol-Myers Squibb Co., 19
F.3d 1418, 1424 (Fed. Cir. 1994)); see also In re Hiniker Co., 150 F.3d
1362, 1369 (Fed. Cir. 1998) ("[T]he name of the game is the claim.").
B. Examiner's § 101 Rejection - Alice/Mayo Steps 1 and 2
Applying step one of the Alice/Mayo analysis, the Examiner
concludes claim 1 is directed to a 'judicial exception" because:
The claim recites the steps of monitoring cardholder' s
transactions, receiving updated cardholder data, transmitting a
notification of the update. In other words, the claim recites
comparing and formatting information for transmission. This is
simply the organization and manipulation of data which can be
performed mentally and is an idea of itself. It is similar to other
concepts that have been identified as abstract by the courts, such
as using categories to organize, store and transmit information in
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Cyberfone or comparing new and stored information and using
rules to identify options in SmartGene. Therefore, the claim is
directed to an abstract idea.
Final Act. 4. 5
Applying step two of the Alice/Mayo analysis, the Examiner
concludes claim 1 recites an abstract idea "without significantly more"
because:
The claim recites the additional limitations of using an electronic
notification system to transmit a notification. The electronic
notification system simply performs the generic computer
functions of transmitting data. Generic computers performing
generic computer functions, alone, do not amount to significantly
more than the abstract idea. Viewing the limitations as an
ordered combination does not add anything further than looking
at the limitations individually. When viewed either individually,
or as an ordered combination, the additional limitations do not
amount to a claim as a whole that is significantly more than the
abstract idea.
Id. at 4--5.
C. Appellant's§ 101 Contentions
1. Claim 1 is not Directed to an Abstract Idea
Focusing on the recitations of claim 1, Appellant contends that the
Examiner erred in rejecting the pending claims as patent-ineligible subject
matter because the claim satisfies step one of the Alice/Mayo analysis.
Referring to Example 1 of the 2014 Interim Guidance in Patent Subject
Matter Eligibility, Appellant argues that "[i]n Example 1, claims are directed
to 'software technology for isolation and extraction of malicious code
5 For purposes of this Decision, we do not decide here whether the idea of
updating personal data to permit verification of cardholder transactions also
is a "fundamental economic practice." See Bilski, 561 U.S. at 611.
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contained in an electronic communication.' This is analogous to the subject
invention, in which verification data in an electronic transmission is
identified and replaced with updated personal data." Br. 7. Specifically,
Appellant notes that claim 1 recites "determining if the verification
synchronization data structure includes a data item that is associated with
the identified payment card and the merchant, and, if so, replacing the
verification data included in the transaction data with the updated personal
data before a process to authorize the transaction." Id. at 7-8. 6 Referring
to this step, Appellant asserts that
claim 1 of the Application is directed to a method that removes
verification data from transaction data associated with a
transaction, and replaces the removed verification data with
updated personal data for the cardholder engaged in the
transaction, thereby creating a new version of the transaction
data, i.e., the electronic communication.
Id. at 7-8. Thus, Appellant contends that replacing out-of-date verification
data is like removing malicious code. Therefore, relying on Example 1 of
the 2014 Interim Guidance, Appellant contends that the pending claims are
patent eligible.
Regarding the 2014 Interim Guidelines, the Examiner notes that
Example 1 is directed "towards performing isolation and eradication of
computer viruses, worms, and other malicious code, a concept inextricably
6 Independent claim 31 similarly provides that the "service module stored in
the memory and executable by the computer device" "determine[s] if the
verification synchronization data structure includes a data item that is
associated with the identified payment card and the merchant, and, if so,
replac[es] the verification data included in the transaction data with the
updated personal data before a process to authorize the transaction." Br.
Claims App 'x ( emphases added).
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tied to computer technology and distinct from the types of concepts found by
the courts to be abstract." Ans. 4. The pending claims, however, recite that
data is received and replaced, "if necessary." Id. Consequently, unlike
Example 1, the Examiner argues that there is no problem solved by the
methods and systems of the pending claims that is particular to computer
technology, and the subject matter of Example 1 is not analogous to the
methods and systems of the pending claims. Id. We agree.
In this regard, we further note that the "replacing" limitations of
claims 1 and 31, upon which Appellant relies to show that its recited
methods and systems are not directed to a judicial exception, are conditional.
Specifically, unless the condition precedent is met, the "replacing" step of
claim 1 or "replacing" operation of claim 31, does not occur. In Ex parte
Schulhauser, Appeal 2013-007847, slip op. 8 (PTAB April 28, 2016)
(precedential) 7, the panel concluded that "claim 1 as written covers at least
two methods, one in which the prerequisite condition for the triggering step
is met and one in which the prerequisite condition for the determining step is
met." The same dichotomy appears to be true for the independent claims at
issue here. Here, claim 1 also covers at least two methods, one in which the
prerequisite condition for the "replacing" step is met and one in which it is
not. 8 If the prerequisite condition is not met, no replacement of the
verification data is "necessary." See also Br. Claim App'x, Claim 31 (the
7 Ex parte Schulhauser issued about one month before the Final Rejection,
but was not designated a Precedential until October 4, 2016, weeks before
the filing of the Appeal Brief, and well before the filing of the Examiner's
Answer.
8 We note that the "transmitting" step of claim 1 and the "transmit"
operation of claim 31 are similarly conditional. Br. Claim App'x.
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"determine" limitation and the "transmit" limitation also are conditional).
Therefore, we are not persuaded that the Examiner erred in determining that
the pending claims are directed to an abstract idea.
2. Specific Structure of Components and Lack of Preemption
Appellant notes that, in Amdocs (Israel) Ltd. v. Openet Telecom, Inc.,
"[ t ]he Court further concluded that the claims of the Amdocs patents are
'tied to a specific structure of various components,' are 'narrowly drawn to
not preempt,' and do 'not merely combine components in a generic
manner."' Br. 6 (quoting Amdocs, 841 F.3d 1288, 1301 (Fed. Cir. 2016),
cert. denied, 138 S. Ct. 469 (Mem.) (2017)). Specifically, Appellant
contends that, in the final element of each of claims 1 and 31, the claims
recite
the steps of receiving, obtaining and transm1ttmg that are
performed by a processing device independent of a processing
device of the issuing bank. This clearly recites a specific
structure of components, e.g., a processing device to perform
certain important steps of the inventive method that is expressly
recited as independent from a processing device of the issuing
bank.
Id. at 8-9. Thus, Appellant contends that, as with Amdocs, the recited
processing devices are different from conventional devices and "provide a
technological solution to a technological problem." Id. at 9.
With regard to Amdocs, the Examiner acknowledges that "[i]n
Amdocs, the claim entail[ ed] an unconventional technological solution
( enhancing data in a distributed fashion) to a technological problem
( massive record flows which previously required massive databases)."
Ans. 5. Unlike Amdocs, however, the Examiner found that the separate
processing devices and other components function in a conventional manner
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and merely as additional components to the recited methods and systems.
Id. We agree.
In addition, Appellant contends that the pending claims "are 'narrowly
drawn to not preempt any and all' methods for processing updated
cardholder payments." Br. 9. In particular, Appellant contends that the
benefits sought by the methods and systems of the pending claims are
achieved by the recited combination of components, e.g., "the separate and
independent processing devices - one for the issuing bank and another for
the personal data update service." Id. ( citing Spec. ,r,r 64, 65). Thus,
Appellant contends that the specific structure of components does not
preempt any and all methods for updating cardholder payments.
"[W]hile a preemptive claim may be ineligible, the absence of
complete preemption does not demonstrate that a claim is eligible."
Comm'r for Patents Memorandum, "Formulating a Subject Matter
Eligibility Rejection and Evaluating the Applicant's Response to a Subject
Matter Eligibility Rejection," 6-7 (May 4, 2016). "[E]mploying well-known
computer functions to execute an abstract idea, even when limiting the use
of the idea to one particular environment, does not add significantly more,
similar to how limiting the computer implemented abstract idea in [Parker v.
Flook, 437 U.S. 584 (1978)] to petrochemical and oil-refining industries was
insufficient." Id. at 4--5. In response to Appellant's contention that the
pending claims do not completely preempt the abstract idea, the Examiner
notes that:
Preemption is not a standalone test for patent eligibility.
Preemption concerns have been addressed by the examiner
through the application of the two-step framework. Applicant's
attempt to show alternative uses of the abstract idea outside the
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scope of the claims does not change the conclusion that the
claims are directed to patent ineligible subject matter. Similarly,
applicant's attempt to show that the recited abstract idea is a very
narrow and specific one is not persuasive. A specific abstract
idea is still an abstract idea and is not eligible for patent
protection without significantly more recited in the claim.
Ans. 4--5; see MPEP 2106.07(b). Thus, having considered preemption in the
context of the two-step, Alice/Mayo analysis, the Examiner reaffirms that the
pending claims neither are directed to an improvement to the functioning of
a computer or to any other technology or technical field nor do the additional
elements in combination or individually amount to an inventive concept.
Ans. 4--5; see id. at 5-8. We agree.
3. Additional Elements Are Not Significantly More Than the Abstract
Idea
Appellant notes that, in BASCOM Global Internet Services, Inc. v.
AT&T Mobility LLC, our reviewing court found that "[t]he inventive concept
inquiry requires more than recognizing that each claim element, by itself,
was known in the art [ and that] an inventive concept can be found in the
non-conventional and non-generic arrangement of known, conventional
pieces." Br. 9 (quoting BASCOM, 827 F.3d 1341, 1350 (Fed. Cir. 2016)).
In BASCOM, the inventive concept was "installation of a filtering tool at a
specific location, remote from the end-users, with customizable filtering
features specific to each end-user." BASCOM, 827 F.3d at 1350 (emphasis
added). Similarly, Appellant contends that the recitation of a processing
device separate and independent from a processing device of the issuing
bank differentiates the recited combination of components from a
conventional and generic arrangement of components and demonstrates an
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inventive step, which is significantly more than the identified abstract idea.
Br. 9--10.
In particular, Appellant contends that the Specification notes that:
During an authentication phase of a transaction, the
personal data may be used by authenticating entities to
authenticate the transaction. Entities involved in the
authentication process may include, for example, the issuing
bank that issued the payment card to the cardholder, the
merchant, and/ or the merchant bank that authorizes payment card
transactions and transfers money on behalf of the merchant. In
some instances, the issuing bank and the merchant bank may
compare personal data associated with the cardholder for
verification purposes before authorizing the transaction.
However, when the personal data stored by the issuing bank and
the merchant bank does not match, such as due to an update of
personal data with only one of the authenticating entities, the
transaction may be denied.
Spec. ,r 5; see Br. 10. Appellant notes, however, that the Specification states
that
Processor 70 is administered independently of an issuing bank
16 such that it can operate without receiving input data from, or
outputting data to, an issuing bank 16 .... [P]rocessor 70 may
exchange information with other entities of the payment system
100 and perform processing functions without the need for
permission from an issuing bank 16, being controlled by an
issuing bank 16, receiving input from an issuing bank 16, or
providing output to the issuing bank 16.
Br. 10 ( quoting Spec. ,r,r 64, 65 ( emphases added)). Appellant contends that
these separate processors solve the problem identified in the Specification.
The Examiner disagrees and again notes that:
The electronic notification system simply performs the generic
computer functions of transmitting data. Generic computers
performing generic computer functions, alone, do not amount to
significantly more than the abstract idea. Viewing the limitations
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as an ordered combination does not add anything further than
looking at the limitations individually. When viewed either
individually, or as an ordered combination, the additional
limitations do not amount to a claim as a whole that 1s
significantly more than the abstract idea.
Ans. 6; supra Section V.B.; see MPEP 2106.05(d). Although the
Specification may disclose embodiments, in which personal data is not
shared between the processor having updated cardholder personal data and
the processor associated with the issuing bank, neither the pending claims
nor the Specification is limited to these embodiments. 9 Cf Br. Claim App 'x
(Claim 12 reciting "instead of replacing the verification data with the
updated personal data, replacing the verification data with at least a portion
of the historical personal data."). Further, as discussed above, the
"replacing" step of claim 1 and the "replacing" operation of claim 31 need
not occur. See supra Section V.C.1. Consequently, we agree with the
Examiner that, in the pending claims, "the focus of the claims is not on such
an improvement in computers as tools, but on certain independently abstract
ideas that use computers as tools. As Appellant states the instant invention
'improves the authorization process' which is an abstract idea." Id. at 8
(citing Br. 10); see MPEP 2106.04(a).
Consequently, we are not persuaded that the Examiner erred in
rejecting claims 1-3, 5-8, 10, 12-19, 31, 32, 34, 36, 38, 43, and 44; and we
sustain the rejections thereof.
9 We further note that, in the "wherein" clause, claim 3 1 recites "the at least
one processing device," but recites no antecedent basis for this component.
Br. Claim App'x. It is not clear whether this is merely a typographical error,
and Applicant intended to refer to the "computer device," rather than "the at
least one processing device." If prosecution resumes in this application,
Applicant may wish to amend claim 31 to address this deficiency.
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VI. DECISION
For the above reasons, we affirm the Examiner's decision rejecting
claims 1-3, 5-8, 10, 12-19, 31, 32, 34, 36, 38, 43, and 44.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(l )(iv).
AFFIRMED
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