Ex Parte Killian et al

Patent Trials and Appeals Board

Apr 29, 2019

14039180 - (D) (P.T.A.B. Apr. 29, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/039,180 09/27/2013
125619 7590 05/01/2019
Mastercard International Incorporated
c/o Buckley, Maschoff & Talwalkar LLC
50 Locust A venue
New Canaan, CT 06840
FIRST NAMED INVENTOR
Patrick Killian
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.
P00437-US-CONT
(M01.091C)
CONFIRMATION NO.
1093
EXAMINER
CRAWLEY, TALIAF
ART UNIT PAPER NUMBER
3687
NOTIFICATION DATE DELIVERY MODE
05/01/2019 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):
martin@bmtpatent.com
szpara@bmtpatent.com
colabella@bmtpatent.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PA TRICK KILLIAN, SANDEEP MALHOTRA,
ANDREW D. CAMPBELL, SHOON PING WONG,
and DANA LORBERG
Appeal2018-001440
Application 14/039, 180 1
Technology Center 3600
Before HUBERT C. LORIN, NINA L. MEDLOCK, and
BRADLEY B. BAY AT, Administrative Patent Judges.
LORIN, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Patrick Killian, et al. (Appellants) seek our review under 35 U.S.C.
§ 134(a) of the Final Rejection of claims 1---6, 8, 10-15, and 18. We have
jurisdiction under 35 U.S.C. § 6(b).
SUMMARY OF DECISION
We AFFIRM.
1 The Appellants identify MASTERCARD INTERNATIONAL
INCORPORATED as the real party in interest. App. Br. 2.
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Application 14/039,180
THE INVENTION
Claim 1, reproduced below with bracketed matter and emphasis
added, is illustrative of the subject matter on appeal.
1. A personalized payment method comprising:
[(a)] receiving, by a payment services provider (PSP)
computer from a merchant device, transaction information
comprising at least a transaction amount, merchant identifying
information and customer addressing information;
[ (b)] transmitting, by the PSP computer based on the customer
addressing information, at least the merchant identifying
information to a customer mobile device;
[ ( c)] receiving, by the PSP computer from the customer
mobile device, a payment transaction request to transfer funds
from a customer account to a merchant;
[(d)] determining, by the PSP computer based on criteria
provided by an issuer financial institution computer associated
with the customer account and in view of the transaction
information, that a customer authentication procedure is
required;
[ ( e)] transmitting, by the PSP computer to the issuer financial
institution computer associated with the customer account, an
authentication request;
[(f)] receiving, by the PSP computer from the issuer financial
institution computer, an indication of successful completion of
an exchange of messages between the customer mobile device
and a representative of the issuer financial institution;
[(g)] authenticating, by the PSP computer, the customer based
on the indication;
[(h)] translating, by the PSP computer, the customer
addressing information into a customer payment card account
number and the merchant identifying information into a
merchant payment card account number; and
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[(i)] transmitting, by the PSP computer, the payment
transaction request to an issuer financial institution computer
associated with the customer payment card account, the
payment transaction request comprising the customer payment
card account number, the transaction amount, and the
merchant payment card account number.
THE REJECTIONS
The following rejections are before us for review:
Claims 1---6, 8, 10-15, and 18 are rejected under 35 U.S.C. § 101 as
claiming patent-ineligible subject matter.
Claims 1---6, 8, 10, 12-15, and 18 are rejected under 35 U.S.C.
§ I03(a) as being unpatentable over Huang et al. (US 2004/0044621 Al,
pub. Mar. 4, 2004) and Hammad et al. (US 2008/0005037 Al, Jan. 3, 2008).
Claim 11 is rejected under 35 U.S.C. § I03(a) as being unpatentable
over Huang, Hammad, and Goldthwaite et al. (US 2004/0019564 Al, pub.
Jan. 29, 2004).
ISSUES
Did the Examiner err in rejecting claims 1---6, 8, 10-15, and 18 under
35 U.S.C. § 101 for claiming patent-ineligible subject matter?
Did the Examiner err in rejecting claims 1---6, 8, 10, 12-15, and 18
under 35 U.S.C. § I03(a) as being unpatentable over Huang and Hammad?
Did the Examiner err in rejecting claim 11 under 35 U.S.C. § I03(a)
as being unpatentable over Huang, Hammad, and Goldthwaite?
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ANALYSIS
The rejection of claims 1-6, 8, 10---15, and 18 under 35 U.S.C. §101 as
claiming patent-ineligible subject matter.
Representative claim
The Appellants argued these claims as a group. See App. Br. 14--22.
In accord with the Appellants' discussion, we select claim 1 as the
representative claim for this group, and the remaining claims 2---6, 8, 10-15,
and 18 stand or fall with claim 1. 37 C.F.R. § 4I.37(c)(l)(iv). Claim 1 is
reproduced above, with added emphasis.
Preliminary comment
In their briefs, the Appellants refer to prior USPTO guidance. See
App. Br. 15-17. Said guidance has been superseded by the 2019 Revised
Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019),
hereinafter "2019 Revised 101 Guidance." Id. at 51 ("Eligibility-related
guidance issued prior to the Ninth Edition, R-08.2017, of the MPEP
(published Jan. 2018) should not be relied upon.").
Accordingly, our analysis will not address the sufficiency of the
Examiner's rejection against the earlier guidance. Rather, our analysis will
comport with the 2019 Revised 101 Guidance.
Introduction
35 U.S.C. § 101 provides that "[w]hoever 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 therefor."
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In that regard, claim 1 covers a "process" and is thus statutory subject
matter for which a patent may be obtained. 2 This is not in dispute.
However, the § 101 provision "contains an important implicit
exception: Laws of nature, natural phenomena, and abstract ideas are not
patentable." Alice Corp. Pty. Ltd. v. CLS Bank Intern., 573 U.S. 208,216
(2014) (quotingAss'nfor Molecular Pathology v. Myriad Genetics, Inc.,
569 U.S. 576, 589 (2013)).
In that regard, notwithstanding claim 1 covers statutory subject
matter, the Examiner has raised a question of patent-eligibility on the ground
that claim 1 is directed to an abstract idea.
Alice identifies a two-step framework for determining whether
claimed subject matter is directed to an abstract idea. Alice, 573 U.S. at 217.
Alice step one - the "directed to" inquiry
According to Alice step one, "[w]e must first determine whether the
claims at issue are directed to a patent-ineligible concept" (id. at 218
( emphasis added)).
The Examiner determined that the claims are "directed to personalized
payment systems and methods wherein a payment transaction may be
initiated from a customer's mobile device to consummate a purchase of
goods or services [ ... ], which is considered an abstract idea." Final Act. 4
2 This corresponds to Step 1 of the 2019 Revised 101 Guidance which
requires determining whether "the claim is to a statutory category." Id.
at 53. See also sentence bridging pages 53 and 54 ("consider[] whether the
claimed subject matter falls within the four statutory categories of patentable
subject matter identified by 35 U.S.C. 101").
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(citing claim 1 and Spec. 5: 10-15). The Examiner also indicated that "the
claims as a whole are generally directed to a system and method for
effectuating a purchase transaction between a customer and a merchant"
(Ans. 3 (citing Spec. 2: 25-29)), wherein "[a] payment card system payment
transaction initiated from a customer's device is utilized to consummate a
purchase of goods or services" (Id. (citing Spec. 5: 10-13)). According to
the Examiner, "the claims are not directed to 'an improvement to computer
technology,' such as found by the CAFC in Enfish, but to the abstract idea
itself." Id.
The Appellants contend that "independent claims 1 and 12 feature a
payment services provider (PSP) computer that facilitates interactions
between a merchant device, a customer mobile device and an issuer financial
system computer for conducting transactions, and thus [focus] on
improvements to computer functionality." App. Br. 15 (citing Figures 5 and
6 of Appellants' Specification). According to the Appellants, "[t]he PSP
computer provides front end processing on-behalf-of the customer's issuer
financial institution, and advantageously, the process can be adopted with
little or no modification to operations of the issuer." Id. (citing Spec. 12:
15-18). The Appellants further argue:
[T]he focus of claim 1 as a whole is to make the customer fully
aware of the transaction details before moving forward with a
purchase transaction, which helps protect the consumer from
unintentionally authorizing erroneous or fraudulent
transactions, and which also reduce the number of occasions in
which transactions need to be reversed. The claimed process
also provides front end processing (by the PSP computer) on
behalf of the customer's issuer that beneficially avoids the need
for the issuer to modify operations, while also advantageously
allowing the customer's issuer to set policies concerning the
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degree of authentication required based on predetermined rules
on a customer-by-customer and/or on a transaction-by-
transaction basis. Accordingly, this is not a situation where
general-purpose computer components are added post-hoc to a
fundamental economic practice or mathematical equation.
Instead, the claims protect a specific implementation of a
technological solution to a particular technological problem,
and therefore are not directed to an abstract idea.
Id. at 16 (citing Spec. 3:4--9, 12:15-18, and 45:6-14).
Accordingly, there is a dispute over what claim 1 is directed to. Is it
directed to "effectuating a purchase transaction between a customer and a
merchant" (Ans. 3) or "improvements to computer functionality" (App. Br.
15)?
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Claim Construction3
We consider the claim as a whole4 giving it the broadest reasonable
construction 5 as one of ordinary skill in the art would have interpreted it in
light of the specification 6 at the time of filing.
Claim 1 calls for a "personalized payment method" comprising nine
steps (a}-(i), as discussed in detail below. The method as claimed nominally
involves five computer components: (1) "a payment services provider (PSP)
3 "[T]he important inquiry for a§ 101 analysis is to look to the claim."
Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336,
1345 (Fed. Cir. 2013).
In Bancorp Servs., L.L. C. v. Sun Life Assurance Co. of
Can., 687 F.3d 1266, 1273 (Fed. Cir. 2012), the court observed
that "claim construction is not an inviolable prerequisite to a
validity determination under § 101." However, the threshold of
§ 101 must be crossed; an event often dependent on the scope
and meaning of the claims.
Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1347--48
(Fed. Cir. 2015).
4 "In determining the eligibility of respondents' claimed process for patent
protection under § 101, their claims must be considered as a whole."
Diamond v. Diehr, 450 U.S. 175, 188 (1981).
5 2019 Revised 101 Guidance 53 n.14 ("If a claim, under its broadest
reasonable interpretation . ... " (emphasis added)).
6 "First, it is always important to look at the actual language of the
claims .... Second, in considering the roles played by individual
limitations, it is important to read the claims 'in light of the specification."'
Smart Systems Innovations, LLC v. Chicago Transit Authority, 873 F.3d
1364, 1378 (Fed. Cir. 2017) (Linn, J., dissenting in part and concurring in
part) (citing Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir.
2016), among others).
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computer," (2) "a merchant device," (3) "a customer mobile device," ( 4) "an
issuer financial institution computer associated with the customer account,"
and ( 5) "an issuer financial institution computer associated with the
customer payment card account."
As to ( 1) "a payment services provider (PSP) computer," the
Specification discloses:
The PSP computer 502 may be conventional in its
hardware aspects but may be controlled by software to cause it
to operate in accordance with aspects of the present invention.
The PSP computer 502 may include a computer
processor 700 operatively coupled to a communication device
701, a storage device 704, an input device 706 and an output
device 708.
The computer processor 700 may be constituted by one
or more conventional processors. Processor 700 operates to
execute processor-executable steps, contained in program
instructions described below, so as to control the PSP computer
502 to provide desired functionality.
Spec. 13:5-14; see also, Figure 7. In light of the Specification, we construe
"PSP computer" as a conventional computer having a conventional
processor.
As to (2) "a merchant device," the Specification discloses that
"merchant device 202 [] may for example be a POS terminal or a suitably
programmed mobile telephone or PDA (personal digital assistant) with
communication capabilities." Spec. 6:23-25; see also, Id. at 15:27-28 ("if
the merchant device is a conventional POS Terminal"); Figure 3. According
to the Specification "[i]f the merchant device is a POS terminal, the latter
may operate for the most part in a conventional manner or may alternatively
have functionality that actively contributes to the novel transaction flow
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illustrated in FIG. 2." Id. at 7:3-5. In light of the Specification, we construe
"merchant device" as a conventional POS terminal, mobile telephone, or
PDA.
As to (3) "a customer mobile device," the Specification discloses that
"[t ]he customer's mobile device 204 may for example be a mobile telephone
with capabilities for initiating payment transactions in a payment card
system" (Spec. 8:6-7) and "[a]s an alternative, the customer's mobile device
204 may be a PDA with communication capabilities" (Id. at 8: 11-13). See
also, Figure 4. According to the Specification, "[i]n its hardware aspects the
mobile telephone 204 may be entirely conventional, and indeed in its
software aspects it also may be conventional, and may provide novel
functionality as described herein through interaction ( via a conventional
browser) with a web page that supports initiation of payment transactions."
Id. at 10:26-29. "The mobile telephone 204 further includes conventional
control circuitry 404, for controlling over-all operation of the mobile
telephone 402" and "[p ]referably the control circuitry 404 is suitably
programmed to allow the mobile telephone 204 to engage in data
communications and/or text messaging with other devices, and to allow for
interaction with web pages accessed via browser software." Spec. 11 :5-9.
And "mobile telephone 204 also includes conventional receive/transmit
circuitry 416 that is also in communication with and/or controlled by the
control circuitry 404" and "receive/transmit circuitry 416 is coupled to an
antenna 418 and provides the communication channel(s) by which the
mobile telephone 204 communicates via the mobile network." Id. at 11: 16-
20. In light of the Specification, we construe "customer mobile device" as a
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conventional mobile telephone or PDA having conventional receive/transmit
circuitry that communicates via a mobile network.
As to ( 4) "an issuer financial institution computer associated with the
customer account," the Specification discloses "an issuer financial institution
206 which issued the customer's payment card account 208" (Spec. 8: 16-
17), and "[b ]locks 206 and 212 should also be understood to represent,
respectively, computer systems operated by or on behalf of the customer
issuer FI and the merchant issuer FI" (Id. at 8: 20-22). In light of the
Specification, we construe "issuer financial institution computer associated
with the customer account" as a computer system operated by or on behalf
of the customer's issuer.
As to ( 5) "an issuer financial institution computer associated with the
customer payment card account," the Specification does not provide any
distinction between "issuer financial institution computer associated with the
customer account" and "issuer financial institution computer associated with
the customer payment card account." See, e.g., Spec. 30:21 ("issuing FI 206
(for the customer's payment card account)"); Figure 11 (depicting "issuer
(for customer) 206" comprising "cardholder account 208"); see also, Spec.
46:9-10 ("The term 'payment card account number' includes a number that
identifies a payment card account ... "). In light of the Specification, we
construe "issuer financial institution computer associated with the customer
payment card account" to mean the same computer as the "issuer financial
institution computer associated with the customer account."
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Turning to the steps of the claimed method, claim 1 recites:
1. A personalized payment method comprising:
[(a)] receiving, by a payment services provider (PSP)
computer from a merchant device, [information A]
comprising [information Al, A2, and A3];
[(b)] transmitting, by the PSP computer based on
[information A3], at least [information A2] to a customer
mobile device;
[(c)] receiving, by the PSP computer from the customer
mobile device, [information BJ;
[ ( d)] determining, by the PSP computer based on
[information CJ and in view of [information A], that a customer
authentication procedure is required;
[ ( e)] transmitting, by the PSP computer to the issuer
financial institution computer associated with the customer
account, [information DJ;
[(f)] receiving, by the PSP computer from the issuer
financial institution computer, [information E];
[(g)] authenticating, by the PSP computer, the customer
based on [information E];
[(h)] translating, by the PSP computer, [information A3] into
[information F] and [information A2] into [information G]; and
[(i)] transmitting, by the PSP computer, [information BJ to
an issuer financial institution computer associated with the
customer payment card account, [information BJ comprising
[information F], [information Al], and [information G].
Claim 1 ( emphasis added), where
Information A is "transaction information";
Information Al is "a transaction amount";
Information A2 is "merchant identifying information";
Information A3 is "customer addressing information";
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Information B is "a payment transaction request to transfer funds from
a customer account to a merchant";
Information C is "criteria provided by an issuer financial institution
computer associated with the customer account";
Information Dis "an authentication request";
Information E is "an indication of successful completion of an
exchange of messages between the customer mobile device and a
representative of the issuer financial institution";
Information Fis "a customer payment card account number"; and
Information G is "a merchant payment card account number."
As to information A2 ("merchant identifying information"), the
Specification discloses that "the merchant identification number may be the
account number that identifies the merchant's payment card account to
which payment transactions are to be routed" (Spec. 7: 17-19), and "[t]he
merchant identification number may in some embodiments be the
merchant's mobile telephone number or another mobile identifier" (Id.
at 7 :26-29). In light of the Specification, we construe "merchant identifying
information" as any information that identifies a merchant, including an
account number or telephone number.
As to information A3 ("customer addressing information"), the
Specification discloses that "[t]he [customer] addressing information may
for example be a mobile telephone number assigned to the customer's
mobile device 204." Spec. 27:7-9. See also Spec. 46:4--6 ("'mobile
identifier' refers to a mobile telephone number or any other identification
information that uniquely identifies a mobile telephone or other mobile
device"). In light of the Specification, we construe "customer addressing
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information" as any information that identifies a customer's mobile device,
including a telephone number.
As to step (a), 7 the Specification discloses that a POS terminal may
include "a communication controller 318 for allowing the processor 302, and
hence the POS terminal 202 to engage in communication over data networks
with other devices" (Spec. 10:3---6), and "the communication controller, or
another communication device coupled to the processor 302, may be
provided to allow the POS terminal 202 to transmit and receive text
messages or the like via a mobile telephone network" (Id. at 10:8-11). The
Specification further discloses that PSP computer 502 may include a
communication device 701 for communication with other devices including
"capabilities for sending and receiving messages over mobile telephone
networks, as well as engaging in data communication over conventional
computer-to-computer data networks." Id. at 13: 18-20. In light of the
Specification, we construe step (a) as encompassing the PSP computer
receiving information from the merchant device via conventional computer-
to-computer data networks or via text message over mobile telephone
networks.
As to step (b ), 8 the Specification discloses that "the payment services
provider computer 502 may use the addressing information for the
customer's mobile device 204 to transmit at least some of the transaction
7 The Appellants indicate that limitation (a) is described in the "Specification
on page 22, lines 1-17; on page 26, lines 15-29; on page 27, lines 18-27;
and in FIGS. 9 and 10." App. Br. 4 (Summary of Claimed Subject Matter).
8 The Appellants indicate that limitation (b) is described in the
"Specification on page 27, lines 10-17; and in FIG. 10." App. Br. 4
(Summary of Claimed Subject Matter).
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information to the customer's mobile device 204." Spec. 27:10-12. In light
of the Specification, we construe step (b) as encompassing the PSP computer
transmitting the information to the customer mobile device via a mobile
network, including via data communications or text messaging.
As to step (c), 9 the Specification discloses that "[a]t 1006 in FIG. 10,
the payment services provider computer 502 receives a request for a
payment transaction from the customer's mobile device 204." Spec. 27: 18-
19. In light of the Specification, as discussed above, we construe step ( c) as
encompassing the PSP computer receiving the information from the
customer mobile device via a mobile network, including via data
communications or text messaging.
As to step ( d), 10 the Specification discloses that "[i]n some
embodiments, an authentication procedure (block 910) may be included
in the process of FIG. 9," and "[t]his may go beyond requiring the customer
to enter a PIN in order to access the payment transaction request function."
Spec. 23: 16-18. The Specification further discloses that "the customer's
issuer 206, and/or the payment services provider computer 502 acting on
behalf of the customer's issuer, may selectively require additional
authentication in the case of certain transactions, based on various criteria."
(Id. at 23: 18-21 ). A list of exemplary criteria is provided. See Id. at 23 :21-
9 The Appellants indicate that limitation ( c) is described in the "Specification
on page 22, lines 22-26; on page 27, lines 18-27; and in FIGS. 9 and 10."
App. Br. 4 (Summary of Claimed Subject Matter).
10 The Appellants indicate that limitation ( d) is described in the
"Specification on page 23, lines 16-25; on page 27, line 28 to page 28, line
3; and in FIGS. 9 and 10." App. Br. 4 (Summary of Claimed Subject
Matter).
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25. Various authentication procedures are discussed, including "an
exchange of text messages and/or electronic mail messages" or "telephone
conversation" (Id. at 23 :26-28). In light of the Specification, we construe
step ( d) as encompassing the PSP computer applying any criteria provided
by a customer's issuing financial institution to determine that at least one
authentication procedure of any kind is required.
As to steps ( e) 11 and ( f), 12 as discussed above, the Specification
discloses that the PSP computer includes communication device 701 for
communication with other devices such as "customer issuer computers 206"
by "sending and receiving messages over mobile telephone networks, as
well as engaging in data communication over conventional computer-to-
computer data networks." Spec. 13:15-20. In light of the Specification, we
construe steps ( e) and ( f) as encompassing the PSP computer transmitting
and receiving information to and from the customer's issuer financial
institution via conventional computer-to-computer data networks or via text
message over mobile telephone networks.
11 The Appellants indicate that limitation ( e) is described in the
"Specification on page 23, line 26 to page 24, line 15; and in FIGS. 5, 6 and
9." App. Br. 4 (Summary of Claimed Subject Matter).
12 The Appellants indicate that limitation (f) is described in the
"Specification on page 23, line 26 to page 24, line 10; on page 27, line 28 to
page 28, line 3; and in FIGS. 5, 6, 9 and 10." App. Br. 4 (Summary of
Claimed Subject Matter).
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As to step (g), 13 the Specification does not explicitly describe the PSP
computer "authenticating" the customer. We note that, in the related context
of parental restrictions, the Specification discloses that "[i]f the parent
approves the requested payment transaction, the PSP computer 502 or the
customer FI 206 proceeds with the requested payment transaction" and "[i]f
the parent does not approve, the requested payment transaction is declined."
Spec. 28:24--27. In light of the Specification, we construe step (g) as
encompassing the PSP computer proceeding with the requested payment
transaction.
As to step (h), 14 the Specification discloses:
At 1010, the payment services provider computer 502, to the
extent required, may translate the customer identifying
information (e.g., customer's mobile telephone number) into
the customer's (funding) payment card account number for the
requested payment transaction, and the payment services
provider computer 502 may translate the merchant's identifying
information (e.g., the merchant's mo bile telephone number)
into the payment card account number for the merchant's
account to which the payment transaction is to be routed.
Spec. 29:7-13. The Specification does not provide details as to how the
translation process is accomplished by the PSP computer. One clue is
provided on page 27, lines 13-14, wherein the Specification discloses that
13 The Appellants indicate that limitation (g) is described in the
"Specification on page 23, line 26 to page 24, line 15; on page 27, line 28 to
page 28, line 3; and in FIGS. 5, 6, 9 and 10." App. Br. 4 (Summary of
Claimed Subject Matter).
14 The Appellants indicate that limitation (h) is described in the
"Specification on page 29, lines 7-13 2; and in FIGS. 5, 6 and 10." App. Br.
5 (Summary of Claimed Subject Matter).
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"payment services provider computer 502 may have looked up the name of
the merchant based on the merchant identifying information," thereby
suggesting that a look-up table or database may be involved. We note that
Figure 7 depicts "one or more databases that are maintained by the PSP
computer 502" (Spec. 15:14--15), including "a consumer cardholder
database, a merchant database, an issuer database and a transaction
database" (Id. at 15: 16-17). A person of ordinary skill in the art would
understand that the step of "translating" would involve using information to
look up related information in one or more databases, such as databases 722.
In light of the Specification, we construe step (h) as encompassing the PSP
computer using Information A3 ( customer identifying information) to look
up the customer's payment card account number in one or more databases
and using Information A2 (merchant identifying information) to look up the
merchant's payment card account number in one or more databases.
As to step (i), 15 the Specification discloses that "at 1012, the payment
services provider computer 502 may forward the request for the payment
transaction to the customer's issuing FI 206." Spec. 29: 14--15. As discussed
above, the Specification discloses that the PSP computer includes
communication device 701 for communication with other devices such as
"customer issuer computers 206" by "sending and receiving messages over
mobile telephone networks, as well as engaging in data communication over
conventional computer-to-computer data networks." Spec. 13:15-20. In
light of the Specification, we construe step (i) as encompassing the PSP
15 The Appellants indicate that limitation (i) is described in the
"Specification on page 29, lines 14--23; and in FIGS. 5, 6 and 10." App. Br.
5 (Summary of Claimed Subject Matter).
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computer transmitting information to the customer's issuer financial
institution via conventional computer-to-computer data networks or via text
message over mobile telephone networks.
The Abstract Idea 16
Above, where we reproduce claim 1, we identify in italics the
limitations we believe recite an abstract idea. 17 Based on our Claim
Construction analysis (above), we determine that the identified limitations
describe a type of financial transaction, more particularly, a certain payment
scheme whereby "a payment card system payment transaction initiated from
a customer's device (such as a mobile telephone) is utilized to consummate a
purchase of goods or services." Spec. 5: 11-13. Purchasing goods and
services, including initiating payment therefor, is a fundamental economic
practice that falls within the enumerated "[c]ertain methods of organizing
human activity" grouping of abstract ideas set forth in the 2019 Revised 101
16 This corresponds to Step 2A of the 2019 Revised 101 Guidance. Step 2A
determines "whether a claim is 'directed to' a judicial exception," such as an
abstract idea. Step 2A is two-prong inquiry.
17 This corresponds to Prong One (a) of Step 2A of the 2019 Revised 101
Guidance. "To determine whether a claim recites an abstract idea in Prong
One, examiners are now to: (a) Identify the specific limitation(s) in the claim
under examination (individually or in combination) that the Examiner
believes recites an abstract idea .... " Id. at 54.
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Guidance. 18 The Examiner's characterization of what the claim is directed
to is similar to our own. Final Act. 4. We have reviewed the record and find
no error in our or the Examiner's characterization of what claim 1 is directed
to.
Improvement in Computer Functionality (Appellants' Argument)
The Appellants' central argument is that "the pending claims are not
directed to an abstract idea" (App. Br. 14), but rather "improvements to
computer functionality" (Id. at 15). Three main reasons are given. First,
"[t]he PSP computer provides front end processing on-behalf-of the
customer's issuer financial institution, and advantageously, the process can
be adopted with little or no modification to operations of the issuer." (Id.
at 15 (citing Spec. 12:15-18)). Second, the claimed method "[makes] the
customer fully aware of the transaction details before moving forward with a
18 This corresponds to Prong One (b) ("Evaluate Whether the Claim Recites
a Judicial Exception") of Step 2A of the 2019 Revised 101 Guidance. "To
determine whether a claim recites an abstract idea in Prong One, examiners
are now to: ... (b) determine whether the identified limitation( s) falls within
the subject matter groupings of abstract ideas enumerated in Section I of the
[2019 Revised 101 Guidance]." Id. at 54. This case implicates subject
matter grouping "(b )":
(b) Certain methods of organizing human activity-
fundamental economic principles or practices (including
hedging, insurance, mitigating risk); commercial or legal
interactions (including agreements in the form of contracts;
legal obligations; advertising, marketing or sales activities or
behaviors; business relations); managing personal behavior or
relationships or interactions between people (including social
activities, teaching, and following rules or instructions)[.]
Id. at 52.
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purchase transaction, which helps protect the consumer from unintentionally
authorizing erroneous or fraudulent transactions, and which also [reduces]
the number of occasions in which transactions need to be reversed." Id.
at 16 ( citing Spec. 3 :4--9). Third, the claimed method "advantageously
[allows] the customer's issuer to set policies concerning the degree of
authentication required based on predetermined rules on a customer-by-
customer and/or on a transaction-by-transaction basis." Id. (citing Spec.
12: 15-18 and 45:6-14).
Notwithstanding that the processing performed by the PSP computer
may be characterized as "front end processing on-behalf-of the customer's
issuer financial institution" (App. Br. 15), we do not see how the claimed
processing effects any improvement in computer functionality. The
Specification discloses that the PSP computer acts as a relay, or trusted third
party, between the various entities involved in the payment transaction. See,
e.g., Spec. 6: 10-13 ("a payment services provider computer may facilitate
and/or relay communications between the merchant's device and the
customer's device, and/or between the customer's device and the customer's
issuer, and/or between the merchant's issuer and the merchant."); Id. at
12: 10-12 ("the PSP computer 502 may operate to relay communications
between the merchant device 202 and the customer's mobile device 204, and
between the customer's mobile device 204 and the customer issuer 206.");
Id. at 21 :22-24 ("the payment services provider 502 may serve as a trusted
third party to verify the identity of the merchant and to protect the customer
from dealing with an impostor."). Regardless of whether the PSP
computer's activities are characterized as "front end processing," or acting
as a "relay" or "trusted third party," we do not see any improvement to
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computer technology. Indeed, the claimed invention in Alice involved a
computer system acting as a third-party intermediary in the performance of a
financial transaction, and could also be reasonably characterized as
performing "front end processing." See Alice, 573 U.S. at 213 (citations
omitted):
The claims at issue relate to a computerized scheme for
mitigating "settlement risk" - i.e., the risk that only one party
to an agreed-upon financial exchange will satisfy its obligation.
In particular, the claims are designed to facilitate the exchange
of financial obligations between two parties by using a
computer system as a third-party intermediary. The
intermediary creates "shadow" credit and debit records (i.e.,
account ledgers) that mirror the balances in the parties' real-
world accounts at "exchange institutions" (e.g., banks). The
intermediary updates the shadow records in real time as
transactions are entered, allowing "only those transactions for
which the parties' updated shadow records indicate sufficient
resources to satisfy their mutual obligations." At the end of the
day, the intermediary instructs the relevant financial institutions
to carry out the "permitted" transactions in accordance with the
updated shadow records, thus mitigating the risk that only one
party will perform the agreed-upon exchange.
Like the Appellants' PSP computer, the intermediary computer in Alice
applied rules to determine whether a transaction was allowed and sent
instructions to financial institutions to carry out permitted transactions. Yet,
the Court held that "the claims at issue amount to 'nothing significantly
more' than an instruction to apply the abstract idea of intermediated
settlement using some unspecified, generic computer." Id. at 225-26.
As to the second asserted improvement, i.e., "[ making] the customer
fully aware of the transaction details before moving forward with a purchase
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transaction," we are not convinced that it amounts to an improvement to
computer technology. To the extent that a customer's awareness of a
transaction is improved by the payment method of claim 1, that amounts to a
business improvement and not an improvement to computer technology.
The Appellants do not assert, for example, that claim 1 requires any specific
improvement to graphical user interfaces that enables the system to "make
the customer fully aware of transaction details" in a more efficient way. Cf
Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356, 1362
(Fed. Cir. 2018) (holding that the "claims in this case are directed to an
improved user interface for computing devices" because "[a]lthough the
generic idea of summarizing information certainly existed prior to the
invention, these claims are directed to a particular manner of summarizing
and presenting information in electronic devices."). Indeed, claim 1 does
not even call for displaying information to a customer. For example, step (b)
requires transmitting "at least the merchant identifying information to a
customer mobile device," but there is no requirement that the information is
displayed. Accordingly, the Appellants' argument is not persuasive at least
because it is not commensurate with the scope of the claim.
As to the third asserted improvement, i.e., "allowing the customer's
issuer to set policies concerning the degree of authentication required based
on predetermined rules on a customer-by-customer and/or on a transaction-
by-transaction basis," the Appellants' argument is not persuasive at least
because it is not commensurate with the scope of the claim. Claim 1 does
not call for determining different "degrees" of authentication. The only
determination made in claim 1 is "that a customer authentication procedure
is required." Nor does claim 1 recite applying rules or policies "on a
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customer-by-customer" or "on a transaction-by-transaction basis." In fact,
no particular criteria are specified in claim 1. As discussed above in our
Claim Construction analysis, step ( d) reasonably encompasses the PSP
computer applying any criteria provided by a customer's issuing financial
institution to determine that at least one authentication procedure of any kind
is required.
Steps (a), (b), (c), (d), (e), (f), (h), and (i), which call for receiving
information, transmitting information, determining information based on
other information, and translating information, are information-processing
functions commonly associated with generic data processing
systems/computer processors. Cf Intellectual Ventures I LLC v. Erie Indem.
Co., 850 F.3d 1315, 1330 (Fed. Cir. 2017) ("Remotely accessing and
retrieving user-specified information is an age-old practice that existed well
before the advent of computers and the Internet."); CyberSource Corp. v.
Retail Decisions, Inc., 654 F.3d 1366, 1370-73 (Fed. Cir. 2011) ("[a] method
for verifying the validity of a credit card transaction over the Internet" is
directed to a mental process, i.e., an abstract idea); Inventor Holdings, LLC
v. Bed Bath & Beyond Inc., 123 F.Supp.3d 557, 560 (D. Del. 2015), aff d,
643 F. App'x 1014 (Fed. Cir. 2016) (claims directed to the use of a POS
terminal to transmit transaction-related information and to process payments
held invalid under 35 U.S.C. § 101); Priceplay.com, Inc. v. AOL Advert.,
Inc., 83 F. Supp. 3d 577, 581 (D. Del. 2015) ("Performing a sales transaction
over the Internet, or in conjunction with an auction and a competitive
activity" is an abstract idea.), aff d, 627 F. App'x 925 (Fed. Cir. 2016).
Regarding step (g) "authenticating," no details of the authentication
are recited in the claims. As discussed above in our Claim Construction
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analysis, step (g) merely amounts to proceeding with the payment
transaction method based on the received "indication." We also note that
claim 1 merely calls for, in step (f), receiving "an indication of successful
completion of an exchange of messages between the customer mobile device
and a representative of the issuer financial institution." Claim 1 does not
require performing "an exchange of messages"; claim 1 requires only
receiving an indication. In any case, claim 1 does not provide any
authentication details which can be interpreted as inventive technology for
performing the functions as claimed. Cf Prism Techs. LLC v. T-Mobile
USA, Inc., 696 F. App'x 1014, 1017 (Fed. Cir. 2017) (claimed
"authentication server," "access server," "Internet Protocol network," "client
computer device," and "database" amounted to "indisputably generic
computer components."); Credit Acceptance Corp. v. Westlake Services,
LLC, 859 F.3d 1044, 1057 (Fed. Cir. 2017); Easy Web Innovations, LLC v.
Twitter, Inc., No 11-CV-4550 (JFB) (SIL), 2016 WL 1253674 (E.D.N.Y.
March 30, 2016), aff'd, 689 F. App'x 969 (Fed. Cir. 2017) ("receiving,
authenticating, and publishing data" is an abstract idea.)
"The 'abstract idea' step of the inquiry calls upon us to look at 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
of Texas v. DirectTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) (quoting
Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir.
2016)); see also Enfzsh, 822 F.3d at 1335, cited in Apple, Inc. v. Ameranth,
Inc., 842 F.3d 1229, 1241 (Fed. Cir. 2016). The court inAncora
Technologies, Inc. v. HTC America, Inc., 908 F.3d 1343 (Fed. Cir. 2018)
stated:
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We examine the patent's "'claimed advance' to
determine whether the claims are directed to an abstract idea."
Finjan, Inc. v. Blue Coat System, Inc., 879 F.3d 1299, 1303
(Fed. Cir. 2018). "In cases involving software innovations, this
inquiry often turns on whether the claims focus on 'the specific
asserted improvement in computer capabilities ... or, instead,
on a process that qualifies as an "abstract idea" for which
computers are invoked merely as a tool."' Id. ( quoting Enfish,
822 F.3d at 1335-36); see BSG Tech LLC v. Buyseasons, Inc.,
899 F.3d 1281, 1285-86 (Fed. Cir. 2018). Computers are
improved not only through changes in hardware; "[s]oftware
can make non-abstract improvements to computer technology
.... " Enfish, 822 F.3d at 1335; see Finjan, 879 F.3d at 1304.
We have several times held claims to pass muster under Alice
step one when sufficiently focused on such improvements.
Id. at 1347.
The Specification's description of the problem and solution shows the
advance over the prior art by the claimed invention to be the payment
scheme recited per steps (a}-(i), as we have emphasized in claim 1
reproduced above. See Spec. 2:25-27 ("The present inventors have now
recognized that an existing facility of a payment card system, referred to as a
'payment transaction,' may be utilized to provide more convenient and
flexible handling of purchases of goods and other exchanges of value.").
The heart of the invention is that recited payment scheme, not any "PSP
computer," "merchant device," "customer mobile device," or "issuer
financial institution computer," or their combination, which, as the
Specification discloses, are merely generic. Cf Intellectual Ventures I LLC
v. Erie Indemnity Company, 850 F.3d 1315, 1328 (Fed. Cir. 2017) ("the
heart of the claimed invention lies in creating and using an index to search
for and retrieve data ... an abstract concept").
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Additionally, computers, both individually and in communication
with each other, were well known 19 at the time the application was filed.
The claim provides no structural details20 that would distinguish the
"PSP computer " "merchant device " "customer mobile device " and "issuer
' ' '
financial institution computer" from those that were well known at the time
the application was filed.
Claim 1 describes the "PSP computer," "merchant device," "customer
mobile device," and "issuer financial institution computer" functionally; that
19 Cf Intellectual Ventures I LLC v. Capital One Financial Corporation,
850 F.3d 1332, 1341 (Fed. Cir. 2017) ("the claims recite ... a generic
computer element-a processor"); Planet Bingo, LLC v. VKGS LLC, 576
F. App'x 1005, 1008 (Fed. Cir. 2014) (nonprecedential) ("[T]he claims at
issue ... require 'a computer with a central processing unit,' 'a memory,'
'an input and output terminal,' 'a printer,' in some cases 'a video screen,'
and 'a program ... enabling' the steps of managing a game of bingo ....
[T]he claims recite a generic computer implementation of the covered
abstract idea."); Smartjlash LLC v. Apple Inc., 680 F. App'x 977, 984 (Fed.
Cir. 2017) (nonprecedential) ("we find here that 'interfaces,' 'program
stores,' and 'processors' are all generic computer components"); and Smart
Systems Innovations, 873 F.3d at 1372 ("Taken together, the Asserted
Claims are directed to the formation of financial transactions in a particular
field (i.e., mass transit) and data collection related to such transactions. The
Asserted Claims are not directed to a new type of bankcard, turnstile, or
database, nor do the claims provide a method for processing data that
improves existing technological processes. Rather, the claims are directed to
the collection, storage, and recognition of data. We have determined that
claims directed to the collection, storage, and recognition of data are directed
to an abstract idea.").
2° Cf Move, Inc. v. Real Estate Alliance Ltd., 721 F. App'x 950, 954
(Fed. Cir. 2018) (nonprecedential) ("Claim 1 is aspirational in nature and
devoid of any implementation details or technical description that would
permit us to conclude that the claim as a whole is directed to something
other than the abstract idea identified by the district court.").
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is, via steps they are required to perform. The steps are discussed in more
detail above.
Based on the record before us, the recited payment scheme does not
ask the "PSP computer," "merchant device," "customer mobile device," and
"issuer financial institution computer," to go beyond their common
functions. Although computer instructions can be patentably significant (see
Enfish, 822 F.3d 1327, andAncora, 908 F.3d at_~), here the instant
record does not sufficiently support the view that any instructions that would
be associated with the resulting steps as claimed improve the functioning of
the claimed "PSP computer," "merchant device," "customer mobile device,"
or "issuer financial institution computer." To the contrary, the record
supports viewing these limitations as amounting to a mere instruction to
implement the recited payment scheme on generic computer components.
Cf Alice, 573 U.S. at 225-26 ("the claims at issue amount to 'nothing
significantly more' than an instruction to apply the abstract idea of
intermediated settlement using some unspecified, generic computer.").
Accordingly, within the meaning of the 2019 Revised 101
Guidance, we find there is no integration into a practical application.
Rather than being directed to any specific asserted improvement in
computer capabilities, the record supports the view that the claimed subject
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matter is directed to a payment scheme using generic computer components
as tools. 21
We have considered all the Appellants' arguments challenging the
Examiner's determination under step one of the Alice framework and find
them unpersuasive. For the foregoing reasons, the record supports the
Examiner's determination that claim 1 is directed to an abstract idea.
Alice step two-Does the Claim Provide an Inventive Concept? 22
Step two is "a search for an 'inventive concept'-i.e., an element or
combination of elements that is 'sufficient to ensure that the patent in
practice amounts to significantly more than a patent upon the [ineligible
concept] itself."' Alice, 573 U.S. at 217-18 ( alteration in original) ( quoting
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72-73
(2012)).
In that regard, the Examiner determined that
the generically recited computer elements ( e.g. payment service
provider computer, merchant device, customer mobile device,
financial institution computer, etc.) do not add a meaningful
21 See the 2019 Revised 101 Guidance 55 ("The courts have also identified
examples in which a judicial exception has not been integrated into a
practical application: An additional element merely recites the words 'apply
it' ( or an equivalent) with the judicial exception, or merely includes
instructions to implement an abstract idea on a computer, or merely uses a
computer as a tool to perform an abstract idea .... ").
22 This corresponds to Step 2B of the 2019 Revised 101 Guidance. See id.
at 56 ("[I]f a claim has been determined to be directed to a judicial exception
under revised Step 2A, examiners should then evaluate the additional
elements individually and in combination under Step 2B to determine
whether they provide an inventive concept (i.e., whether the additional
elements amount to significantly more than the exception itself).").
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limitation to the abstract idea and the function(s) performed by
such generic computer elements would be routine,
conventional, and well-understood to one of ordinary skill in
the computer arts.
Final Action 7. The Examiner addressed the function of each of the four
identified additional elements:
Generic Computer Element 1 - a payment services
provider computer receiving transaction information,
transmitting information, receiving a payment transaction
request to transfer funds, determining that a customer
authentication procedure is required, transmitting an
authentication request, receiving an indication of successful
completion of an exchange of messages, authenticating the
customer based on the indication, translating the customer
addressing information and the merchant identifying
information, and transmitting the payment transaction request.
Generic Computer Element 2 - a merchant device
sending transaction information;
Generic Computer Element 3 - a customer mobile device
sending a payment transaction request, sending a payment
transaction request; and
Generic Computer Element 4 - a financial institution
computer sending an indication of successful completion of an
exchange of messages, receiving the payment transaction
request.
Id. at 7-8.
We agree with the Examiner. We are unpersuaded that claim 1
presents an element or combination of elements indicative of a specific
asserted improvement in computer capabilities, thereby rendering the
claimed subject matter sufficient to ensure that the patent in practice
amounts to significantly more than a patent upon the payment scheme itself.
We have reviewed the Specification and we can find no suggestion of
any improvements to the system as a result of performing the recited steps.
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The Specification is focused on the payment scheme, not on the payment
service provider (PSP) computer, merchant device, customer mobile device,
and/or issuer financial institution computer elements, individually or in the
combination as claimed. Rather than focusing on the said elements, the
Specification focuses on the payment scheme, the computer elements being
merely a conduit for performing said scheme. Indeed, the Specification
notes that each of these components is conventional. Cf In re TL!
Communications LLC Patent Litigation, 823 F.3d 607, 612 (Fed. Cir. 2016)
("Put differently, the telephone unit itself is merely a conduit for the abstract
idea of classifying an image and storing the image based on its classification.
Indeed, the specification notes that it 'is known' that 'cellular telephones
may be utilized for image transmission,' id. at col. 1 11. 31-34, and existing
telephone systems could transmit pictures, audio, and motion pictures and
also had 'graphical annotation capability,' id. at col. 111. 52-59.").
The Specification evidences the conventionality of the claimed
payment service provider (PSP) computer, 23 merchant device, 24 customer
mobile device, 25 and/or issuer financial institution computer elements, 26
23 See, e.g., Spec. 13:5-7 ("The PSP computer 502 may be conventional in
its hardware aspects but may be controlled by software to cause it to operate
in accordance with aspects of the present invention.")
24 See, e.g., Spec. 15:28-29 ("merchant device is a conventional POS
terminal.")
25 See, e.g., Spec. 10:26-27 ("In its hardware aspects the mobile telephone
204 may be entirely conventional, and indeed in its software aspects it also
may be conventional ... ")
26 See, e.g., Spec. 12: 1 7-18 ("the revised transaction flow proposed herein
may be implemented with little or no modification to the operations of the
customer issuer 206.")
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individually or in the combination as claimed, and the recited steps require
nothing more than to use them for their commonly associated processing
functions. Much like the "data storage unit" and "computer, coupled to said
data storage unit" in the claims of Alice (U.S. Patent 7,149,720, claim 1 ),
"the claims here do [ not do] more than simply instruct the practitioner to
implement the abstract idea ... on a generic computer." Alice, 573 U.S.
at 225.
The Appellants argue that three aspects of the invention amount to
"significantly more." According to the Appellants:
the numerous limitations within the elements of the
independent claims are directed to a specific method which
first ensures that a customer with a customer mobile
device is fully aware of the transaction details so that he or she
can decide whether or not to proceed with a particular
transaction,
second provides front end processing (by the PSP
computer) on behalf of the customer's issuer, and
third allows the customer's issuer to set policies
concerning the degree of authentication required for a particular
transaction.
App. Br. 18-19 (indentation added).
As to the first asserted feature, as we explained above, claim 1
contains no such limitation. Indeed, claim 1 does not call for displaying any
information to a customer. Accordingly, Appellants' argument in that
regard is unpersuasive at least because it is not commensurate with the scope
of the claim. And to the extent that the claimed method improves a
customer's "awareness," the Appellants have not persuasively explained
how that amounts to "significantly more" than the abstract idea.
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As to the second asserted feature, as explained above, characterizing
the financial data processing performed by the PSP computer as "front end
processing" is not a persuasive reason to argue that the generic data
processing limitations amount to "significantly more" than the abstract idea.
Cf Alice, 573 U.S. at 225-26 ("the claims at issue amount to 'nothing
significantly more' than an instruction to apply the abstract idea of
intermediated settlement using some unspecified, generic computer.").
As to the third asserted feature, as explained above, claim 1 does not
require that any computer "allows the customer's issuer to set policies
concerning the degree of authentication required for a particular
transaction." Claim 1, in step ( d), recites "criteria provided by an issuer
financial institution computer," but the only determination made in claim 1
is "that a customer authentication procedure is required." Claim 1 does not
call for determining different "degrees" of authentication. Although we note
that the Specification describes various authentication procedures ( see Spec.
23: 16 - 24: 15), details described in the Specification but not described in the
claims cannot be relied on to show "significantly more." See Accenture
Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1345
(Fed. Cir. 2013) ("[T]he complexity of the implementing software or the
level of detail in the specification does not transform a claim reciting only an
abstract concept into a patent-eligible system or method."); see also
Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1322
(Fed. Cir. 2016) ("The district court erred in relying on technological details
set forth in the patent's specification and not set forth in the claims to find an
inventive concept.") ( citing Accenture).
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We note the Appellants cite BASCOM (App. Br. 18) as matching this
case. We disagree. Unlike in that decision, here no improvement in
computer functionality has been shown. See BASCOM Global Internet
Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1351 (Fed. Cir. 2016)
("[T]he claims may be read to 'improve[ Jan existing technological
process."' ( emphasis added) ( citation omitted)). As stated in Interval
Licensing LLC v. AOL, Inc., 896 F.3d 1335 (Fed. Cir. 2018):
Importantly, we have found a number of software-based claims
to be patent-eligible, observing that "[ s ]oftware can make non-
abstract improvements to computer technology just as hardware
improvements can, and sometimes the improvements can be
accomplished through either route." Enfzsh, LLC v. Microsoft
Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016); id. at 1339
( claims directed to a self-referential table "de-signed to improve
the way a computer stores and retrieves data in memory"); see
also Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC,
827 F.3d 1341, 1348--49 (Fed. Cir. 2016) (claims directed to
improved content filter); McRO, Inc. v. Bandai Namco Games
Am. Inc., 837 F.3d 1299, 1313-14 (Fed. Cir. 2016) (claims
directed to a technical improvement in animation techniques);
Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d
1356, 1362 (Fed. Cir. 2018) (holding that claims which were
directed to "particular manner of summarizing and presenting
information in electronic devices" were patent-eligible).
Other software-based claimed inventions, however, have
failed to pass section 101 muster, because they did not recite
any assertedly inventive technology for improving computers as
tools and/or because the elements of the asserted invention were
so result-based that they amounted to patenting the patent-
ineligible concept itself. See Elec. Power Grp., 830 F.3d at
1354, 1355 (claims lacking "any requirements for how the
desired result is achieved") ( emphasis in original); SAP Am.,
Inc.[ v. InvestPic, LLC], 890 F.3d [1016, 1022 (Fed. Cir. 2018)]
("the focus of the claims [ wa] s not any improved computer or
network").
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Interval Licensing, 896 F.3d at 1344 (first and last alterations in original).
We cited the Specification in our discussion as intrinsic evidence that
the claimed elements of "a payment service provider (PSP) computer,"
"merchant device," "customer mobile device," and/or "issuer financial
institution computer" are conventional. In doing so, we have followed
"Changes in Examination Procedure Pertaining to Subject Matter Eligibility,
Recent Subject Matter Eligibility Decision (Berkheimer v. HP Inc.[, 881
F.3d 1360 (Fed. Cir. 2018)])," USPTO Memorandum, Robert W. Bahr,
Deputy Commissioner For Patent Examination Policy, April 19, 2018 (the
"Berkheimer Memo"). The court in Berkheimer held that "[t]he patent
eligibility inquiry may contain underlying issues of fact." Berkheimer,
881 F.3d at 1365 (quoting Mortgage Grader, Inc. v. First Choice Loan
Servs. Inc., 811 F.3d 1314, 1325 (Fed. Cir. 2016) ("The§ 101 inquiry 'may
contain underlying factual issues."')). But the court also held that "[w]hen
there is no genuine issue of material fact regarding whether the claim
element or claimed combination is well-understood, routine, [and]
conventional to a skilled artisan in the relevant field, this issue can be
decided on summary judgment as a matter of law." Id. at 1368 (emphasis
added). This qualification has been subsequently reiterated.
If there is a genuine dispute of material fact, Rule 5 6
requires that summary judgment be denied. In Berkheimer,
there was such a genuine dispute for claims 4--7, but not for
claims 1-3 and 9 ....
. . . [I]n accordance with Alice, we have repeatedly
recognized the absence of a genuine dispute as to eligibility for
the many claims that have been defended as involving an
inventive concept based merely on the idea of using existing
computers or the Internet to carry out conventional processes,
with no alteration of computer functionality.
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Berkheimer v. HP Inc., 890 F.3d 1369, 1371-74 (Fed. Cir. 2018) (Order On
Petition for Rehearing En Banc) (Moore, J., concurring); see also Aatrix
Software, Inc. v. Green Shades Software, Inc., 890 F.3d 1354, 1368
(Fed. Cir. 2018) (Order On Petition for Rehearing En Banc) (Reyna, J.,
dissenting) ("A factual allegation or dispute should not automatically take
the determination out of the court's hands; rather, there needs to be
justification for why additional evidence must be considered-the default
being a legal determination."). Here, the Specification indisputably shows
the claimed "payment service provider (PSP) computer," "merchant device,"
"customer mobile device," and "issuer financial institution computer," were
conventional at the time of filing. Accordingly, no genuine issue of material
fact exists as to the well-understood, routine, or conventional nature of the
claimed elements "payment service provider (PSP) computer," "merchant
device," "customer mobile device," and "issuer financial institution
computer," individually or in the combination as claimed.
Finally, as to the question of preemption, the Appellants argue that the
"Appellants recognize that preemption is not a stand-alone test for
eligibility, but [] it is an important consideration when analyzing claims
under Section 101, and [] taken with the other arguments presented herein,
provides a strong basis for determining that the claims are directed to patent-
eligible subject matter." App. Br. 21.
With respect to the pre-emption concern, "[ w ]hat matters is whether a
claim threatens to subsume the full scope of a fundamental concept, and
when those concerns arise, we must look for meaningful limitations that
prevent the claim as a whole from covering the concept's every practical
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application." CLS Bankint'l v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1281
(Fed. Cir. 2013) (Lourie, J., concurring). Pre-emption is not a separate test.
To be clear, the proper focus is not preemption per se, for some
measure of preemption is intrinsic in the statutory right granted
with every patent to exclude competitors, for a limited time,
from practicing the claimed invention. See 35 U.S.C. § 154.
Rather, the animating concern is that claims should not be
coextensive with a natural law, natural phenomenon, or abstract
idea; a patent-eligible claim must include one or more
substantive limitations that, in the words of the Supreme Court,
add "significantly more" to the basic principle, with the result
that the claim covers significantly less. See Mayo[, 566 U.S. at
72-73]. Thus, broad claims do not necessarily raise§ 101
preemption concerns, and seemingly narrower claims are not
necessarily exempt.
Id. See also Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1379 (Fed. Cir. 2015) ("While preemption may signal patent ineligible
subject matter, the absence of complete preemption does not demonstrate
patent eligibility."). Because we find the claimed subject matter covers
patent-ineligible subject matter, the pre-emption concern is necessarily
addressed. "Where a patent's claims are deemed only to disclose patent
ineligible subject matter under the Mayo framework, ... preemption
concerns are fully addressed and made moot." Ariosa Diagnostics, 788 F.3d
at 1379.
No other persuasive arguments having been presented, we conclude
that no error has been committed in the determination under Alice step two
that claim 1 does not include an element or combination of elements
circumscribing the patent-ineligible concept it is directed to so as to
transform the concept into an inventive application.
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We have considered all of the Appellants' remaining arguments
(including those made in the Reply Brief) and find them unpersuasive.
Accordingly, because we are not persuaded as to error in the
determinations that representative claim 1, and claims 2---6, 8, 10-15, and 18
which stand or fall with claim 1, are directed to an abstract idea and do not
present an "inventive concept," we sustain the Examiner's conclusion that
they are directed to patent-ineligible subject matter for being judicially
excepted from 35 U.S.C. § 101. Cf LendingTree, LLC v. Zillow, Inc.,
656 F. App'x 991, 997 (Fed. Cir. 2016) ("We have considered all of
Lending Tree's remaining arguments and have found them unpersuasive.
Accordingly, because the asserted claims of the patents in suit are directed to
an abstract idea and do not present an 'inventive concept,' we hold that they
are directed to ineligible subject matter under 35 U.S.C. § 101."); see also,
e.g., OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1364 (Fed. Cir.
2015); FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1098 (Fed.
Cir. 2016).
The rejection of claims 1-6, 8, 10, 12-15, and 18 under 35 U.S.C. § 103(a)
as being unpatentable over Huang and Hammad
Independent claim 1 recites (b) transmitting, by the PSP computer
based on the customer addressing information, at least the merchant
identifying information to a customer mobile device. The Examiner finds
said limitation in Huang in paragraph 34. Final Act. 10. As best
understood, the Examiner finds that Huang's payment services hub
(PSH) 108 meets the claimed "payment services provider (PSP) computer,"
Huang's POS device 403 meets the claimed "merchant device," and Huang's
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access device 322 meets the claimed "customer mobile device." Id. at 10-
13. Independent claim 12 contains a similar limitation and the Examiner's
position is the same. Id. at 15.
The Appellants argue, inter alia, that "Huang does not describe a
payment services hub [b] transmitting, based on customer addressing
information, merchant identifying information to a customer mobile device,
and then [ c] receiving a payment transfer request from the customer mobile
device." App. Br. 24.
Responding to the Appellants' arguments in the Answer, the
Examiner additionally cites paragraph 49 of Hammad and paragraphs 37, 38,
61, and 62 of Huang. Ans. 6-7.
We have reviewed the cited portions of Huang and the Examiner's
discussion thereof. Paragraph 34 of Huang discloses that "the payer 102
may utilize an access device, such as, a cell phone 106, to contact the
payment services hub 108" and "payment services hub 108 utilizes an
electronic tracer ticket (not shown) to associate the payer 102 and the payee
104 and ensure that the payment transaction to be completed is authorized."
We see no discussion in paragraph 34 of payment services hub 108
transmitting anything to the payer's access device. As the Examiner points
out, paragraph 3 8 of Huang discloses that the tracer ticket information can
include a payee name, and thus includes "merchant identifying information"
as required by claim 1. However, we see no disclosure in Huang that
payment services hub (PSH) 108 transmits the tracer ticket to the customer's
device. Instead, Huang discloses transmitting the tracer ticket to the
merchant POS, which displays the tracer ticket number to the payer. Huang
para. 61 ("Upon receiving the payment amount data, the tracer ticket is
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forwarded to the POS device 403 as illustrated at step 408. The POS
device 403, in tum, displays the tracer ticket number for retrieval by payer
102."). Subsequently, "the payer 102 uses the access device 322 to contact
the payment services hub 108" (Id. para. 62), "[t]he payer 102 is prompted
to enter the tracer ticket number previously obtained at step 408," and "the
payer 102 uses the access device 322 to enter the tracer ticket number" (Id.
para. 65). Using the tracer ticket number entered by the payer, "[t]he
payment services hub 108 retrieves the related transaction and merchant
information, which is compared and checked against the tracer ticket
information." Id. In other words, Huang discloses that payer 102 manually
enters a tracer ticket number into access device 322 after reading the number
from a display of POS device 403. We do not see how, and the Examiner
has not adequately explained how, Huang discloses "transmitting, by the
PSP computer based on the customer addressing information, at least the
merchant identifying information to a customer mobile device."
The Examiner's reliance on Hammad does not cure this deficiency.
Paragraph 49 of Hammad discloses that "merchant 22 may also have, or may
receive communications from, an access device 34 that can interact with the
portable consumer device 32" and lists examples of access devices. In other
words, Hammad discloses a merchant device 34 interacting directly with a
consumer device 32. We do not see that paragraph 49 discloses transmitting
merchant identifying information from a payment services provider (PSP)
computer to a customer mobile device.
Accordingly, the evidence does not support the finding that Huang or
Hammad disclose transmitting, by the PSP computer based on the customer
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addressing information, at least the merchant identifying information to a
customer mobile device.
A prima facie case of obviousness for the claimed subject matter has
thus not been made out in the first instance.
The rejection of the independent claims, and the claims depending
thereon, is not sustained.
The re} ection of claim 11 under 3 5 U.S. C. § 103 ( a) as being unpatentable
over Huang, Hammad, and Goldthwaite.
The Examiner does not rely on Goldthwaite in any way that cures the
deficiency discussed above. The rejection of claim 11 is not sustained for
the reasons given above for not sustaining the rejection of independent
claim 1 from which it depends.
CONCLUSIONS
The rejection of claims 1---6, 8, 10-15, and 18 under 35 U.S.C. §101
for claiming patent-ineligible subject matter is affirmed.
The rejection of claims 1---6, 8, 10, 12-15, and 18 under 35 U.S.C.
§ 103(a) as being unpatentable over Huang and Hammad is reversed.
The rejection of claim 11 under 35 U.S.C. § 103(a) as being
unpatentable over Huang, Hammad, and Goldthwaite is reversed.
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DECISION
The decision of the Examiner to reject claims 1---6, 8, 10-15, and 18 is
affirmed.
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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