Ex Parte Lenahan et al

Patent Trial and Appeal Board

Jul 28, 2017

12564882 (P.T.A.B. Jul. 28, 2017)

United States Patent and Trademark Office
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
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
12/564,882 09/22/2009 Michael George Lenahan P2395.10486US02 9324
132897 7590 08/01/2017
Maschoff Brennan/ PayPal
1389 Center Drive, Ste 300
Park City, UT 84098
EXAMINER
YU, ARIEL J
ART UNIT PAPER NUMBER
3627
NOTIFICATION DATE DELIVERY MODE
08/01/2017 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):
docket @ mabr. com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte GEORGE MICHAEL LENAHAN and
CHRISTEN ANN LENAHAN
Appeal 2015-004117
Application 12/564,882
Technology Center 3600
Before MURRIEL E. CRAWFORD, JAMES A. WORTH, and
MATTHEW S. MEYERS, Administrative Patent Judges.
CRAWFORD, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants seek our review under 35 U.S.C. § 134 of the Examiner’
final decision rejecting claims 1, 2, 4-24, 26, 28, and 29.
We have jurisdiction over the appeal under 35 U.S.C. § 6(b).
Appeal 2015-004117
Application 12/564,882
Claim 1 is illustrative:
1. A method comprising:
receiving, from an employee, an indication of a number of
transaction instruments in which to allocate funds from after-tax
payments to the employee;
receiving, from the employee, an indication of a
contribution amount and a discount allocation to be allocated to
each of the transaction instruments; and
processing, using one or more hardware processors,
employee payroll for an employer, the processing comprising:
electronically deducting the funds from the after-tax
payments to the employee; and
electronically accounting for the deducted funds for
pre-payment of goods or services to be obtained at a
discount by the employee from a provider of the goods or
services, the electronically accounting including causing
allocation of the deducted funds to each of the transaction
instruments according to the contribution amount
indicated by the employee and causing allocation of the
discount to at least one of the transaction instruments
according to the discount allocation indicated by the
employee prior to the funds being deducted from the after­
tax payments.
Appellants appeal the following rejections:
Claims 1, 2, 4-24 and 26-28 are rejected under 35 U.S.C. § 101 as
being directed to non-statutory subject matter in the form of an abstract idea.
Claims 1, 2, 4-12, 14-20, 22-24, and 29 are rejected under 35 U.S.C.
§ 103(a) as unpatentable over Cuervo (US 2006/0190347 Al, pub. Aug. 24,
2006), Sanders et al. (US 7,809,641 B2, iss. Oct. 5, 2010), and Beck (US
2007/0250382 Al, pub. Oct. 25, 2007).
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Application 12/564,882
Claims 13, 21, 26, and 28 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Cuervo, Sanders, Beck, Levere, Jane “Hilton is expanding
its program that allows guests to swap hotel points and airline mile” New
York Times (March 27, 1996).
ISSUE
Did the Examiner err in rejecting the claims under 35 U.S.C. § 101
because the Examiner has not provided factual findings and technical
reasoning in support of the holding that the claim is directed to a
fundamental economic practice long prevalent in the system of commerce
and because the claims at issue solve a technological problem in
conventional industry practice?
Did the Examiner err in rejecting claim 1 because the prior art does
not disclose receiving from an employee an indication of a number of
transaction instruments in which to allocate funds and an indication of a
contribution amount and a discount allocation?
ANALYSIS
Rejection under 35 U.S.C. §101
______The Examiner entered a new ground of rejection under 35 U.S.C. §
101 in the Answer. The Examiner held that the claims are directed to a
fundamental economic practice and that when the claims are viewed as a
whole, elements in addition to the abstract idea do not amount to
significantly more than the abstract idea itself.
We initially note that an invention is patent-eligible if it claims a “new
and useful process, machine, manufacture, or composition of matter.” 35
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Application 12/564,882
U.S.C. § 101. The Supreme Court, however, has long interpreted § 101 to
include implicit exceptions: “[l]aws of nature, natural phenomena, and
abstract ideas” are not patentable. E.g., Alice Corp. Pty. Ltd. v. CLSBank
Int7, 134 S. Ct. 2347, 2354 (2014).
In determining whether a claim falls within the excluded category of
abstract ideas, we are guided in our analysis by the Supreme Court’s two-
step framework, described in Mayo and Alice. Id. at 2355 (citing Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1296—97
(2012)). In accordance with that framework, we first determine whether the
claim is “directed to” a patent-ineligible abstract idea. See Alice, 134 S. Ct.
at 2356 (“On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk.”); Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4 in
petitioners’ application explain the basic concept of hedging, or protecting
against risk.”); Diamond v. Diehr, 450 U.S. 175, 184 (1981) (“Analyzing
respondents’ claims according to the above statements from our cases, we
think that a physical and chemical process for molding precision synthetic
rubber products falls within the § 101 categories of possibly patentable
subject matter.”); Parker v. Flook, 437 U.S. 584, 594—595 (1978)
(“Respondent’s application simply provides a new and presumably better
method for calculating alarm limit values.”); Gottschalk v. Benson, 409 U.S.
63, 64 (1972) (“They claimed a method for converting binary-coded decimal
(BCD) numerals into pure binary numerals.”).
The patent-ineligible end of the spectrum includes fundamental
economic practices, Alice, 134 S. Ct. at 2357; Bilski, 561 U.S. at 611;
mathematical formulas, Flook, 437 U.S. at 594—95; and basic tools of
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Application 12/564,882
scientific and technological work, Benson, 409 U.S. at 69. On the patent-
eligible side of the spectrum are physical and chemical processes, such as
curing rubber, Diamond, 450 U.S. at 184 n.7, “tanning, dyeing, making
waterproof cloth, vulcanizing India rubber, smelting ores,” and a process for
manufacturing flour, Gottschalk, 409 U.S. at 69.
If the claim is “directed to” a patent-ineligible abstract idea, we then
consider the elements of the claim—both individually and as an ordered
combination—to assess whether the additional elements transform the nature
of the claim into a patent-eligible application of the abstract idea. Alice, 134
S. Ct. at 2355. This is a search for an “inventive concept”—an element or
combination of elements sufficient to ensure that the claim amounts to
“significantly more” than the abstract idea itself. Id.
In our view, independent method claim 1, based on its express
limitations, is directed to revenue-generating techniques incorporating
electronic payroll processing. See Spec, page 1. In other words, the claims
are directed to providing discounts or incentives for prepayment for goods
and services through electronic payroll processing. Independent claim 1,
thus, is a method of incentivizing the sale of goods and services using
discounts for prepayment in conjunction and processing the prepayments
using electronic payroll processing. As such, the claims incorporate the
fundamental economic practice of providing incentives to customers and
electronically processing payroll deduction. Both of these practices are
fundamental economic practices. Therefore, we agree with the Examiner
that the claims are directed to fundamental economic practices long
prevalent in our system of commerce. We note that merely combining
abstract ideas does not render the combination any less abstract. Cf.
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Application 12/564,882
Shortridge v. Found. Constr. Payroll Serv., LLC, No. 14-CV-04850-JCS,
2015 WL 1739256 (N.D. Cal. Apr. 14, 2015), affd, No. 2015-1898, 2016
WL 3742816 (Fed. Cir. July 13, 2016)
We are not persuaded of error on the part of the Examiner by
Appellants’ argument that the rejection of the Examiner is in error because
the Examiner failed to provide specific factual findings predicated on
technical and scientific reasoning or authoritative documentation that the
economic component is long prevalent in our system of commerce.
Consideration of evidence in making a determination under the first
step of the Alice framework has merit. See Apple, Inc. v. Ameranth, Inc.,
842 F.3d 1229 (Fed. Cir. 2016). But there is no requirement that examiners
must provide evidentiary support in every case before a conclusion can be
made that a claim is directed to an abstract idea. See, e.g., para. IV “July
2015 Update: Subject Matter Eligibility” to 2014 Interim Guidance on
Subject Matter Eligibility (2014 IEG), 79 Fed. Reg. 74618 (Dec. 16, 2014)
stating that:
The courts consider the determination of whether a claim is
eligible (which involves identifying whether an exception such
as an abstract idea is being claimed) to be a question of law.
Accordingly, courts do not rely on evidence that a claimed
concept is a judicial exception, and in most cases resolve the
ultimate legal conclusion on eligibility without making any
factual findings.
Emphasis added.
Evidence may be helpful in certain situations where, for instance,
facts are in dispute. But it is not always necessary. It is not necessary in this
case. In the present case, there is no need for evidence to establish that the
economic practices of providing discounts for prepayment for goods and
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Application 12/564,882
processing deductions through payroll processing are long standing
economic practices long prevalent in our system of commerce.
Turning to the second step of the Alice analysis, because we
determine that independent claim 1 is directed to an abstract idea, the claim
must include an “inventive concept” in order to be patent-eligible, i.e., there
must be an element or combination of elements that is sufficient to ensure
that the claim in practice amounts to significantly more than the abstract idea
itself.
We are not persuaded of error on the part of the Exami ner by
Appellants’ argument that the claims solve a technological problem in
conventional industry practice and are thus significantly more than an
abstract idea. Appellants argue that the claims are necessarily rooted in
computer technology in order to overcome a problem specifically arising in
the realm of machines. We do not agree.
The Appellants’ own specification states that the problem addressed
by the invention is directed to a revenue-generating technique for increasing
wallet share of existing customers and to definitively forecasting customer’s
repeat monthly spend. Spec. 1. The Specification states that the invention is
directed to the problem of increasing repeat business, strengthening
customer loyalty and elevating the strength of the value of the brands. Spec.
3. Of course, the solution may have been sol ved by the use of electronic
systems and clearly there are advantages to performing the steps of the
invention using computer technology. This, however, does not. in itself,
remove the claimed subject matter from the realm of the abstract as
“necessarily rooted in technology.” See Alice, 134 S. Ct. at 2352 (holding a
“computerized scheme for mitigating ‘settlement risk’” as unpatentable
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subject matter); In re TLI Commc'ns Patent Litig., 2016 WL 2865693, at *5
(Fed. Cir. May 17, 2016) (holding unpatentable a method for recording
imaging with a phone, storing the images digitally, transmitting to a server
and sorting based on classification information).
As such the invention is related to overcoming marketing and business
problems not technical problems. The alleged improvement that Appellants
tout does not concern an improvement to computer capabilities but instead
relates to an alleged improvement in implementing a discount program using
payroll processing for which a computer is used as a tool in its ordinary
capacity.
In view of the foregoing, we will sustain the Examiner’s rejection as it
is directed to claim 1. We will sustain the rejection as it is directed to claims
2, 4-7, 9-24, and 26-28 because the Appellants have not advanced arguments
regarding the separate eligibility of these claims.
We are not persuaded of error on the part of the Examiner by
Appellants’ argument that claim 8 does not preempt the making, using and
selling of basic tools of scientific technological work. “ While preemption
may signal patent ineligible subject matter, the absence of complete
preemption does not demonstrate patent eligi bility.” Ariosa Diagnostics, Inc.
v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015); see also OIP
Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362-63 (Fed. Cir. 2015),
cert, denied, 136 S. Ct. 701, 193 (2015) (“[T]hat tl be claims do not preempt
all price optimization or may be limited to price optimization in the e-
commerce setting do not make them any less abstract.”). And, “[wjhere a
patent’s claims are deemed only to disclose patent ineligible subject matter
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Application 12/564,882
under the Mayo framework, as they are in this ease, preemption concerns are
fully addressed and made moot.” Ariosa, 788 F.3d at 1379.
The Appellants make similar arguments related to the patent
eligibility of claim 8 as were made with regard to claim 1 and we find these
arguments unpersuasive when directed to the rejection of claim 8 for the
same reasons we found them unpersuasive in regard to the rejection of claim
1.
In view of the foregoing, we will sustain this rejection as it is directed
to claim 8.
Rejection under 35 U.S.C. §103
We will not sustain this rejection because the Examiner relies on
paragraphs 7 and 16 Cuervo for teaching a method that includes the step of
receiving an indication of a number of transactions instruments in which to
allocate funds and an indication of a contribution amount and a discount
allocation, from an employee. We agree with Appellants and find that
Cuervo does not disclose this subject matter. Rather, we find that Cuervo
discloses receiving the indications from an employer not an employee. As
such, we will not sustain this rejection as it is directed to claim 1 and claims
2 and 4 dependent therefrom. We will not sustain this rejection as it is
directed to claims 5-7, 8-16, 22-24, 26, 28, and 29 for the same reasons.
Claims 17 and 19 are directed to a computing platform and do not
recite that a step or instruction of receiving the indications from an employee
but rather recite a computing platform to perform various steps. As such, the
claims do not require performing the steps but rather require that the
computing platforms have the capability to perform the steps. The Examiner
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Application 12/564,882
relies on paragraphs 7, 8, 11, 16, 17, and 20 of Cuervo for teaching this
subject matter. These portions of Cuervo do not disclose anything about
causing allocation of the deducted funds to a number of transaction
instruments indicated by the employee according to contribution amount
indicated by the employee as required by claims 17 and 19. The Examiner
has not explained how these portions of Cuervo teach that the Cuervo
computing platform has this capability. Therefore, we will also not sustain
the Examiner’s rejection as it is directed to claim 17 and claim 18 dependent
therefrom and claim 19 and claims 20 and 21 dependent therefrom
DECISION
We affirm the Examiner’s 101 rejection and reverse the Examiner’s
§103 rejections.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a).
AFFIRMED-IN-PART
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