Ex Parte Keresman et al

Patent Trial and Appeal Board

Oct 25, 2018

13432748 (P.T.A.B. Oct. 25, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/432,748 03/28/2012
144885 7590 10/29/2018
The Webb Law Firm/ Visa International
ONE GATEWAY CENTER
420 FT. DUQUESNE BL VD, SUITE 1200
PITTSBURGH, PA 15222
FIRST NAMED INVENTOR
Michael A. Keresman III
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.
8223-1709845(CC-0001US07) 9737
EXAMINER
HAMILTON, SARA CHANDLER
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
10/29/2018 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):
patents@webblaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte MICHAEL A. KERESMAN III, RA VISHANKAR
BRAGA VA TULA, CHANDRA BALASUBRAMANIAN, and FRANCIS
M. SHERWIN1
Appeal2017-004265
Application 13/432,748
Technology Center 3600
Before ROBERT E. NAPPI, ERIC S. FRAHM, and JOHN A. EV ANS,
Administrative Patent Judges.
FRAHM, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 15, 20, 21, 23, and 24, which constitute all of the claims
pending in the application. 2 The Examiner rejected claims 15, 20, 21, 23,
and 24 under 35 U.S.C. § 101 based on a determination that the claimed
invention is directed to a patent-ineligible judicial exception. We have
jurisdiction under 35 U.S.C. § 6(b). Because we conclude independent
claim 15 is drawn to an abstract idea (i.e., a fundamental economic practice
1 Appellants identify Cardinal Commerce Corporation as the real party in
interest. Br. 1.
2 Claims 1-14, 16-19, 22, 25, and 26 have been canceled.
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Application 13/432,748
and/or the organization ofhmnan activity) without significantly more, we
affirm.
STATEMENT OF THE CASE
Introduction
Appellants state that the described invention relates a "Secure and
Efficient Payment Processing System" (Title) for Internet commerce, and
particularly for "Internet credit and/or debit transactions" (Spec. ,r 2).
Appellants recognize a problem in the industry that "[a]s each intermediary
charges a bulk, per-transaction, percentage, or other like fee for its role in
handling the transaction, the total transaction cost grows with each
additional intermediary employed. Consequently, streamlining transaction
processing and elimination of intermediaries beneficially holds transaction
costs down" (Spec. ,r 4 ). As a result, Appellants' invention "contemplates a
new and improved transaction processing system and technique for carrying
out credit and/or debit transactions" (Spec. ,r 9). Appellants' disclosed and
claimed invention is directed to a method for authenticating commercial
transactions using generic computer and network components (see Fig. 2
(e.g., network 50, database 14, computer server 12); Spec. ,r,r 27-31; see
also Br. 3--4, Summary of Claimed Subject Matter) to establish a transaction
processing system (see generally Fig. 2 ( elements 10, 20, 30, 40); see also
Br. 3, Summary of Claimed Subject Matter).
Claim 15, which is the sole independent claim, is reproduced below,
with emphases added:
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15. A method for authorizing a commercial transactions,
said method comprising the steps of:
(a) establishing a transaction processing system on an
electronic communications network;
(b) establishing an account within the transaction
processing system for a corresponding account holder by
creating an account record for the account, said account record
being locally stored on a data storage device;
( c) associating an account of a funding source with the
established account by storing data identifying the funding
source account in the account record;
( d) obtaining from the account holder over the electronic
communications network one or more descriptions of acceptable
future commercial transactions related to the account;
( e) administering commercial transactions related to the
account using the transaction processmg system, the
administering including:
determining whether a commercial transaction
related to the account, and being administered using the
transaction processing system, meets one or more of the obtained
descriptions;
locally establishing payment information from the
account record, the payment information including the
data identifying the funding source account;
in response to determining the commercial
transaction meets one or more of the obtained descriptions,
requesting authorization of the commercial transaction for the
purchase amount by submitting at least the established payment
information to the funding source of the account holder over the
communications network;
rece1vmg an authorization code and an
authorization results from the funding source over the electronic
communications network, the authorization result indicating
whether the commercial transaction is authorized; and
in response to the received authorization result
indicating the commercial transaction is authorized, settling the
commercial transaction using the received authorization code;
wherein the steps are each performed by a computer server
and the method is performed by a third party, the third party
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different than the funding source, the merchant and the account
holder.
Rejection on Appeal
Claims 15, 20, 21, 23, and 24 stand rejected under 35 U.S.C.
§ 101 because the claimed invention is directed to a patent-ineligible judicial
exception. Final Act. 2-12; Ans. 2-12.
Issue on Appeal
Did the Examiner err in rejecting claims 15, 20, 21, 23, and 24 under
35 U.S.C. § 101 as being directed to patent-ineligible subject matter?
ANALYSIS
We have reviewed the Examiner's rejection in light of Appellants'
arguments in the Appeal Brief. 3 For the reasons discussed infra, as well as
the reasons provided by the Examiner in the Final Rejection (Final Act.
2-12), and the Examiner's Answer (Ans. 2-12), we are not persuaded by
Appellants' arguments (Br. 5-15) that the Examiner erred in rejecting claims
15, 20, 21, 23, and 24 under 35 U.S.C. § 101.
Under 35 U.S.C. § 101, a patent may be obtained for "any new and
useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof." The Supreme Court has "long held that
this provision contains an important implicit exception: Laws of nature,
natural phenomena, and abstract ideas are not patentable." Alice Corp. Pty.
Ltd. v. CLS Bankint'l, 134 S. Ct. 2347, 2354 (2014) (quotingAss'nfor
Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)).
3 No Reply Brief has been filed.
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The Supreme Court in Alice reiterated the two-step framework previously
set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc.,
566 U.S. 66, 82-84 (2012), "for distinguishing patents that claim laws of
nature, natural phenomena, and abstract ideas from those that claim patent-
eligible applications of those concepts." Alice, 134 S. Ct. at 2355.
The first step in that analysis is to determine whether the claims at
issue are directed to one of those patent-ineligible concepts, such as an
abstract idea. Abstract ideas may include, but are not limited to,
fundamental economic practices, methods of organizing human activities, an
idea of itself, and mathematical formulas or relationships. Id. at 2355-57.
If the claims are not directed to a patent-ineligible concept, the inquiry
ends. See Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1262 (Fed.
Cir. 2017).
Otherwise, the inquiry proceeds to the second step in which the
elements of the claims are considered "individually and 'as an ordered
combination' to determine whether the additional elements 'transform the
nature of the claim' into a patent-eligible application." Alice, 134 S. Ct. at
2355 (quoting Mayo, 566 U.S. at 79, 78). We consider the question of
whether the claims are directed to a specific improvement in the capabilities
of the computing devices, or, instead, "a process that qualifies as an 'abstract
idea' for which computers are invoked merely as a tool." Enfzsh, LLC v.
Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).
We, therefore, decide under step two whether the claims: (a) set forth
an inventive concept that provides a specific means or method that improves
the relevant technology, or (b) are directed to a result or effect that itself is
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the abstract idea, in which the claims merely invoke generic processes and
machinery. See Enfzsh, 822 F.3d at 1336.
The Supreme Court additionally guides that contractual relations
constitute "a fundamental economic practice long prevalent in our system of
commerce." Bilski v. Kappas, 561 U.S. 593, 611 (2010); see also Alice, 134
S. Ct. at 2356, 2357, as cited in buySAFE, Inc. v. Google, Inc., 765 F.3d
1350, 1354 (Fed. Cir. 2014).
Applying this guidance here, we observe independent claim 15 is
directed to "authorizing a commercial transaction[] [sic]" by obtaining
"descriptions of acceptable future commercial transactions." We find a
commercial transaction is a contractual relationship between the seller (i.e.,
recited merchant) and the buyer (i.e., recited account holder) which is "a
fundamental economic practice long prevalent in our system of commerce."
Bilski, 561 U.S. at 611.
In rejecting the claims under 35 U.S.C. § 101, the Examiner concludes
that claims 15, 20, 21, 23, and 24 are directed to authorizing commercial
transactions, which is a fundamental economic practice in the field of
finance, an abstract idea. Final Act. 4; Ans. 2-6. The Examiner also finds
the claims do not include limitations that are "significantly more" than the
abstract idea because the claims do not include an improvement to another
technology or technical field, an improvement to the functioning of the
computer itself, or meaningful limitations beyond generally linking the use
of an abstract idea to a particular technological environment ( e.g., a mobile
computing device). Final Act. 6; Ans. 6-11. We agree with the Examiner.
Appellants argue (Br. 5-15) the Examiner erred in concluding the
subject matter of claims 15, 20, 21, 23, and 24 is directed to an abstract idea
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which is patent-ineligible. We do not find Appellants' arguments
persuasive. Instead, we find the Examiner sets forth a prima facie case for
the rejection at pages 2 through 6 of the Final Rejection, and as further
support at pages 6 through 12 of the Final Rejection and pages 2 through 12
of the Examiner's Answer. In addition, the Examiner has provided a
comprehensive response to Appellants' arguments supported by a
preponderance of evidence. Ans. 2-12. As such, we adopt all of the
Examiner's legal conclusions, findings, and explanations provided therein
(Final Act. 2-12; Ans. 2-12).
Specifically, as discussed supra, independent claim 15 is primarily
directed to the function of processing a commercial transaction using generic
computing and network components (see Fig. 2; Spec. ,r,r 27-31; see also Br.
3--4), which can be implemented with a general purpose computer and
Internet network. Appellants' disclosed and claimed invention does no more
than run an application on known computing devices and networks
employing a generic components to perform known functions which
constitute a well-known fundamental economic practice in the field of
finance.
In addition, as to dependent claims 20, 21, 23, and 24, we agree with
the Examiner (Final Act. 6) that these claims are also directed to processing
commercial transactions, which is a fundamental economic or commercial
practice. Notably, claims 20, 21, 23, and 24 merely further describe the
commercial transactions and related descriptions of acceptable future
transactions recited in independent claim 15, and do not recite a
technological improvement or significantly more than the abstract idea of
claim 15 ( authorizing commercial transactions).
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Thus, we conclude claims 15, 20, 21, 23, and 24 are drawn to little
more than automating the abstract idea of processing and authorizing
commercial transactions, which we conclude is a fundamental economic
practice and, therefore, constitutes patent-ineligible subject matter. See
Alice, 134 S. Ct. at 2357; Bilski v. Kappas, 561 U.S. at 611; Enfish, 822 F.3d
at 1335 ("fundamental economic and conventional business practices are
often found to be abstract ideas, even if performed on a computer").
Furthermore, we agree with the Examiner because the numerous claim
limitations in sole independent claim 15 recite the use of a general purpose
computer to perform a method of authorizing commercial transactions.
Specifically, the claimed invention is described in the Specification and
shown in Figure 2 as using generic computer and network components (see
Fig. 2 (e.g., network 50, database 14, computer server 12); Spec. ,r,r 27-31;
see also Br. 3--4, Summary of Claimed Subject Matter) to establish a
transaction processing system (see generally Fig. 2 ( elements 10, 20, 30, 40;
see also Br. 3, Summary of Claimed Subject Matter)). Thus, we find the
claims are not directed to an improvement to computer functionality, but are
directed to an abstract idea, namely the authorization of commercial
transactions, which is a fundamental economic activity.
Appellants' arguments (Br. 5---6, 12) that the Examiner has not
provided any basis or evidence that the claims are directed to an abstract
idea, are not persuasive for at least the following reasons.
The Examiner has indeed provided evidence by citing cases with
claims containing similar subject matter that were found to be patent-
ineligible (see Ans. 4---6). Appellants have not rebutted the Examiner's
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evidence and accompanying reasoning with any specific argument or
evidence (see e.g., Br. 6, 12-13), and no Reply Brief has been filed.
In addition, at least the following decisions from our reviewing court
have found many types of fundamental commercial practices patent
ineligible: OIP Technologies, Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed.
Cir. 2015), cert. denied, 136 S. Ct. 701 (mem) (2015) (offer-based price
optimization); buySafe, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014)
(transaction guaranty); Personalized Media Communications, L.L.C. v.
Amazon.com, Inc., 671 Fed. App'x. 777 (mem) (Fed. Cir. 2016) (receiving
instructions for ordering); Macropoint, LLC v. Fourkites, Inc., 671 Fed.
App'x 780 (mem) (Fed. Cir. 2016) (tracking freight); Wireless Media
Innovations, LLC v. Maher Terminals, LLC, 636 Fed. Appx. 1014 (mem)
(Fed. Cir. 2016) (monitoring shipping containers); America's Collectibles
Network, Inc. v. Jewelry Channel, Inc. USA, 672 Fed. App'x 997 (mem)
(Fed. Cir. 2017) (conducting reverse auction by adjusting price and
inventory); and EasyWeb Innovations, LLC v. Twitter, Inc., 689 Fed. App'x
969 (Fed. Cir. 2017) (receiving, authenticating, and publishing data). In this
light, the exchange of value/currency recited in the claims on appeal (such as
identifying a vendor, generating an interface to display information
regarding stored value, identifying a portion of value to be exchanged for
other value, and receiving stored value in exchange for other value) are
commercial practices that are economic and fundamental in nature.
Furthermore, merely combining several abstract ideas (such as a
fundamental economic activity and a method of organizing human activity)
does not render the combination any less abstract. RecogniCorp, LLC v.
Nintendo Co., Ltd., 855 F.3d 1322, 1327 (Fed. Cir. 2017) ("Adding one
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abstract idea ... to another abstract idea ... does not render the claim
non-abstract."); see also FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d
1089, 1094 (Fed. Cir. 2016) (determining the pending claims were directed
to a combination of abstract ideas).
Appellants' arguments that (i) the pending claims "present an
inventive concept sufficient to pass muster under § 101" "since they
otherwise appear to be allowable under§ 102 and§ 103 (i.e., no rejections
of the claims are presently made under relevant sections)" (Br 8); and (ii)
"[t]he lack of any prior art rejection in connection with this current
application, is further evidence that the Examiner has already found novel
subject matter in the combination of steps and elements in the claims, clearly
providing a beneficial and useful result in a data processing environment"
(Br. 8) is unpersuasive. The Supreme Court guides: "[t]he 'novelty' of any
element or steps in a process, or even of the process itself, is of no relevance
in determining whether the subject matter of a claim falls within the § 101
categories of possibly patentable subject matter." Diamond v. Diehr,
450 U.S. 175, 188-89 (1981) (emphasis added). Our reviewing court further
emphasizes that "[e]ligibility and novelty are separate inquiries." Two-Way
Media Ltd. v. Comcast Cable Commc 'ns, LLC, 874 F.3d 1329, 1340 (Fed.
Cir. 2017); see also Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d
1253, 1263 (Fed. Cir. 2016) (holding that "even assuming" that a particular
claimed feature was novel does not "avoid the problem of abstractness").
Therefore, we find Appellants' novelty and non-obviousness arguments (Br.
8-9) are not persuasive.
Appellants further urge the pending claims are not of a scope to
preempt an abstract idea. Br. 9-11. However, our reviewing court provides
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applicable guidance: "[ w ]hile preemption may signal patent ineligible
subject matter, the absence of complete preemption does not demonstrate
patent eligibility." Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d
1371, 1379 (Fed. Cir. 2015); Ultramercial, Inc. v. Hulu, LLC, 722 F.3d
1335, 1346 (Fed. Cir. 2013) ("[T]he Supreme Court has stated that, even if a
claim does not wholly pre-empt an abstract idea, it still will not be limited
meaningfully if it contains only insignificant or token pre- or post-solution
activity-such as identifying a relevant audience, a category of use, field of
use, or technological environment.") (Citations omitted), vacated and
remanded, WildTangent, Inc. v. Ultramercial LLC, 134 S. Ct. 2870 (2014)
(remanding for consideration in light of Alice, 134 S. Ct. 2347). Therefore,
we are not persuaded by Appellants' argument regarding the absence of
complete preemption. Br. 9-11.
In view of the foregoing, we sustain the Examiner's rejection under
35 U.S.C. § 101 of independent claim 15, as well as dependent claims 20,
21, 23, and 24 not argued separately, except based on their dependence on
independent claim 15.
DECISION
We affirm the Examiner's decision rejecting claims 15, 20, 21, 23, and
24 under 35 U.S.C. § 101.
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).
AFFIRMED
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