Ex Parte McLaughlin et al

Patent Trial and Appeal Board

Sep 14, 2018

12566774 (P.T.A.B. Sep. 14, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/566,774 09/25/2009
98665 7590 09/17/2018
Otterstedt, Ellenbogen & Kammer, LLP
P.O. Box 381
Cos Cob, CT 06807
FIRST NAMED INVENTOR
Edward McLaughlin
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.
P00480-US-UTIL 3006
EXAMINER
SHEIKH, ASFAND M
ART UNIT PAPER NUMBER
3627
MAIL DATE DELIVERY MODE
09/17/2018 PAPER
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte EDWARD MCLAUGHLIN, MARK WIESMAN, and
MATTHEW LANFORD 1
Appeal2017-002909
Application 12/566,774
Technology Center 3600
Before THU A. DANG, LARRY J. HUME, and NORMAN H. BEAMER,
Administrative Patent Judges.
HUME, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134(a) of the Final
Rejection of claims 1, 5-8, and 28, which are all claims pending in the
application. Appellants have canceled claims 2--4 and 9-27. We have
jurisdiction under 35 U.S.C. § 6(b ).
We AFFIRM.
1 According to Appellants, the real party in interest is MasterCard
International Incorporated. App. Br. 3.
Appeal2017-002909
Application 12/566,774
STATEMENT OF THE CASE2
The Invention
Appellants' disclosed embodiments and claimed invention "relate[]
generally to electronic commerce, and, more particularly, to electronic
payment systems." Spec. 1, 11. 13-14. Further, "[a] general-purpose
payment card product is linked to a designated reimbursement account. A
payment card authorization request is obtained, with a full amount and a
reimbursement eligible amount included therein, based on a transaction with
the payment card product at a merchant." Abstract.
Exemplary Claim
Claims 1 and 6, reproduced below, are representative of the subject
matter on appeal ( emphases added to prior art contested limitations):
1. A method comprising the steps of:
linking a general-purpose payment card product to a
card-based designated reimbursement account via a registration
site module, embodied in a non-transitory computer readable
medium, executing on at least one hardware processor;
obtaining a payment card authorization request with a
full amount and an IIAS reimbursement eligible amount
included therein, based on a transaction with said general-
purpose payment card product at a merchant, said IIAS
reimbursement eligible amount being separately designated as
such, said payment card authorization request being obtained by
an ISO 8583 payment card network connecting multiple issuers
2 Our decision relies upon Appellants' Appeal Brief ("App. Br.," filed
Apr. 11, 2016); Reply Brief ("Reply Br.," filed Dec. 20, 2016); Examiner's
Answer ("Ans.," mailed Oct. 20, 2016); Final Office Action ("Final Act.,"
mailed Sept. 9, 2016); and the original Specification ("Spec.," filed
Sept. 25, 2009).
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with multiple acquirers, from a point of sale system of said
merchant to which said payment card product has been
presented for said transaction, said IIAS reimbursement eligible
amount having been locally determined by said merchant;
returning to said merchant, by said ISO 8583 payment
card network, a payment card authorization response from an
issuer of said general-purpose payment card product, said
payment card authorization response being based on said full
amount;
an operator of said ISO 8583 payment card network
initiating a card-based funding request, for said reimbursement
eligible amount, from said designated reimbursement account,
via a payment network platform module, embodied in a
nontransitory computer readable medium, executing on said at
least one hardware processor,
sending said card-based funding request to an issuer of
said card-based designated reimbursement account which is
different from and unrelated to said issuer of said general-
purpose payment card product, wherein said general-purpose
payment card product and said card-based designated
reimbursement account are managed separately and wherein
said payment network platform module is directly coupled to
said registration site module;
said operator of said ISO 8583 payment card network
obtaining reimbursement for said reimbursement eligible
amount from said card-based designated reimbursement
account; and
said operator of said ISO 8583 payment card network
forwarding said reimbursement to said issuer of said general-
purpose payment card product.
6. The method of Claim 1, wherein said payment
card product comprises one of a credit card, a debit card, a
prepaid card, and a stored balance card.
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Application 12/566,774
Prior Art
The Examiner relies upon the following prior art as evidence in
rejecting the claims on appeal:
Unland et al. ("Unland") US 2009/0083065 Al Mar. 26, 2009
Robbins, Jr. et al. ("Robbins") US 7,661,586 B2 Feb. 16, 2010
Rejections on Appeal
RI. Claims 1, 5-8, and 28 stand rejected under 35 U.S.C. § 101 as
being directed to patent-ineligible subject matter. Final Act. 5.
R2. Claims 1 and 5-8 stand rejected under 35 U.S.C. § I03(a) as
being unpatentable over the combination of Robbins and Unland. Final
Act. 6.
R3. Claim 28 stands rejected under 35 U.S.C. § I03(a) as being
unpatentable over the combination of Robbins and Unland in view of the
Examiner's taking of Official Notice. Final Act. 11.
CLAIM GROUPING
Based on Appellants' arguments (App. Br. 7-16), we decide the
appeal of non-statutory subject matter Rejection RI of claims 1, 5, 7, 8,
and 28 on the basis of representative claim 1; and we decide the appeal of
non-statutory subject matter Rejection RI of separately argued claim 6,
infra. We decide the appeal of obviousness Rejection R2 of claims 1
and 5-7 on the basis of representative claim 1; and we decide the appeal of
obviousness Rejection R2 of separately argued claim 8, infra. We decide
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the appeal of obviousness Rejection R3 of separately argued claim 28,
infra. 3
ISSUES AND ANALYSIS
In reaching this decision, we consider all evidence presented and all
arguments actually made by Appellants. To the extent Appellants have not
advanced separate, substantive arguments for particular claims, or other
issues, such arguments are waived. 37 C.F.R. § 4I.37(c)(l)(iv).
Based upon our review of the record, we find a preponderance of the
evidence supports particular arguments advanced by Appellants with respect
to Rejections R2 and R3 of claims 1, 5-8, and 28 under§ 103 for the
specific reasons discussed below.
However, we disagree with Appellants' arguments with respect to
Rejection RI of claims 1, 5-8, and 28 under§ 101 and, unless otherwise
noted, we incorporate by reference herein and adopt as our own: ( 1) the
findings and reasons set forth by the Examiner in the action from which this
appeal is taken, and (2) the reasons and rebuttals set forth in the Examiner's
Answer in response to Appellants' arguments.
We highlight and address specific findings and arguments regarding
claim 1 for emphasis as follows.
3 "Notwithstanding any other provision of this paragraph, the failure of
appellant to separately argue claims which appellant has grouped together
shall constitute a waiver of any argument that the Board must consider the
patentability of any grouped claim separately." 37 C.F.R. § 4I.37(c)(l)(iv).
In addition, when Appellants do not separately argue the patentability of
dependent claims, the claims stand or fall with the claims from which they
depend. In re King, 801 F.2d 1324, 1325 (Fed. Cir. 1986).
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1. § 101 Rejection RI of Claims 1, 5, 7, 8, and 28
Issue 1
Appellants argue (App. Br. 7-10; Reply Br. 7-14) the Examiner's
rejection of claim 1 under 35 U.S.C. § 101 as being directed to patent-
ineligible subject matter is in error. These contentions present us with the
following issue:
Under our governing case law concerning 35 U.S.C. § 101, did the
Examiner err in concluding claim 1 is directed to a judicial exception, i.e., an
abstract idea, without significantly more, and thus is patent-ineligible under
§ 101?
Analysis
Alice Framework
Section 101 provides that anyone who "invents or discovers any new
and useful process, machine, manufacture, or composition of matter, or any
new and useful improvement thereof' may obtain a patent. 35 U.S.C. § 101.
The Supreme Court has repeatedly emphasized that patent protection should
not extend to claims that monopolize "the basic tools of scientific and
technological work." Gottschalk v. Benson, 409 U.S. 63, 67 (1972); Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012);
Alice Corp. Pty. Ltd. v. CLS Bankint'l, 134 S. Ct. 2347, 2354 (2014).
Accordingly, laws of nature, natural phenomena, and abstract ideas are not
patent-eligible subject matter. Id.
The Supreme Court's two-part Mayo/Alice framework guides us in
distinguishing between patent claims that impermissibly claim the "building
blocks of human ingenuity" and those that "integrate the building blocks into
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something more." Id. (internal quotation marks, citation, and bracketing
omitted). First, we "determine whether the claims at issue are directed to [a]
patent-ineligible concept[]." Id. at 2355. If so, we "examine the elements of
the claim to determine whether it contains an 'inventive concept' sufficient to
'transform' the claimed abstract idea into a patent-eligible application." Id. at
2357 (quoting Mayo, 566 U.S. at 72, 79). While the two steps of the Alice
framework are related, the "Supreme Court's formulation makes clear that
the first-stage filter is a meaningful one, sometimes ending the § 101
inquiry." Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed.
Cir. 2016). We note the Supreme Court "has not established a definitive rule
to determine what constitutes an 'abstract idea"' for the purposes of step one.
Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. 2016) (citing
Alice, 134 S. Ct at 2357).
However, our reviewing court has held claims ineligible as directed to
an abstract idea when they merely collect electronic information, display
information, or embody mental processes that could be performed by
humans. Elec. Power Grp., 830 F.3d at 1353-54 (collecting cases). At the
same time, "all inventions at some level embody, use, reflect, rest upon, or
apply laws of nature, natural phenomena, or abstract ideas." Mayo, 566 U.S.
at 71. 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. Alice 134 S. Ct. at 2355-
57. Under this guidance, we must therefore ensure at step one that we
articulate what the claims are directed to with enough specificity to ensure
the step one inquiry is meaningful. Id. at 2354 ("[W]e tread carefully in
construing this exclusionary principle lest it swallow all of patent law.").
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Under the "abstract idea" step we must evaluate "the 'focus of the
claimed advance over the prior art' to determine if the claim's 'character as a
whole' is directed to excluded subject matter." Affinity Labs of Texas, LLC
v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) (internal citation
omitted). 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). If the concept is directed to a patent-ineligible
concept, we proceed to the "inventive concept" step. For that second step
we must "look with more specificity at what the claim elements add, in order
to determine 'whether they identify an "inventive concept" in the application
of the ineligible subject matter' to which the claim is directed." Affinity
Labs, 838 F.3d at 1258 (quoting Elec. Power Grp., 830 F.3d at 1353).
Alice Step I -Abstract Idea
The Examiner concludes the claims on Appeal are directed to the
fundamental economic practice of transactions relating to reimbursements.
Final Act. 5; see also Ans. 2.
Appellants generally contend the Examiner has set forth an "overly
simplistic paraphrasing of claim language [that] mischaracterizes the
claimed subject matter" (App. Br. 7), and the Examiner's "determination has
not been made in this case based on evidence [but i]nstead, the Examiner
merely expresses an opinion .... " Id. More specifically, Appellants argues
the claimed subject matter cannot be considered a "fundamental economic
practice long prevalent in our system of commerce," because "neither IIAS
reimbursements nor ISO 8583 payment card networks are 'long prevalent in
our system of commerce' but rather each represents a relatively recent
technological advance: the initial version of ISO 8583 was published
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in 1983, while the Internal Revenue Service (IRS) did not approve IIAS until
2006. II App. Br. 8. 4
In response, the Examiner concludes the claimed steps:
relate to the concept of reimbursing an entity with respect to a
reimbursable amount which corresponds to similar concepts
identified as abstract ideas by the courts .... The concepts
identified in the noted court cases relate to economic
process( es). The concept described in Claim 1 is not
meaningfully different than those concepts found by the courts
to be abstract ideas.
Ans. 3 ( citations omitted).
Under the "abstract idea" step we must evaluate "the 'focus of the
claimed advance over the prior art' to determine if the claim's 'character as a
whole' is directed to excluded subject matter." Affinity Labs, 838 F.3d at
1257 ( citation omitted).
Turning to the claimed invention, the limitations of method claim 1
require, in pertinent part, the steps of:
(a) "linking a ... payment card ... to a ...
reimbursement account;"
(b) "obtaining a payment card authorization request with
a full amount and an IIAS reimbursement eligible amount;"
( c) "returning ... a payment card authorization response .
. . based on said full amount;"
( d) "initiating a card-based funding request, for said
reimbursement eligible amount, from said designated
reimbursement account;"
4 Appellants' argument concerning the absence of evidence supporting the
§ 101 rejection also does not persuade us of Examiner error. "Patent
eligibility under § 101 presents an issue of law." Accenture Glob. Servs.,
GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1340 (Fed. Cir. 2013).
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(e) "sending said card-based funding request to an issuer
of said card-based designated reimbursement account;"
(f) "obtaining reimbursement for said reimbursement
eligible amount from said card-based designated reimbursement
account"" and
'
(g) "forwarding said reimbursement to said issuer of said
general-purpose payment card product."
Under step one, we agree with the Examiner that the inventions
claimed in independent claim 1 is directed to an abstract idea, i.e.,
processing of reimbursement transactions, which we also conclude is a
fundamental economic activity or, in the alternative, a method of organizing
human activity. See Ans. 2-3.
We agree with the Examiner because, as the Specification discloses,
" [ t ]he present invention relates generally to electronic commerce, and, more
particularly, to electronic payment systems." Spec. 1, 11. 13-14.5 We find
5 See also Spec. 41 ("Abstract"):
A general-purpose payment card product is linked to a
designated reimbursement account. A payment card
authorization request is obtained, with a full amount and a
reimbursement eligible amount included therein, based on a
transaction with the payment card product at a merchant. In one
aspect, a payment card authorization response is returned to the
merchant from an issuer of the payment card product, based on
the full amount. A funding request is initiated, for the
reimbursement eligible amount, from the designated
reimbursement account. The payment card product and the
designated reimbursement account are managed separately. In
an alternative, the authorization request is intercepted by an
operator of a payment network. The operator initiates a first
operator authorization request for the reimbursement eligible
amount, and a second operator authorization request for the full
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this type of activity, i.e., payment transactions, for example, includes
longstanding conduct that existed well before the advent of computers and
the Internet, and could be carried out by a human with pen and paper. See
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir.
2011) ("That purely mental processes can be unpatentable, even when
performed by a computer, was precisely the holding of the Supreme Court in
Gottschalk v. Benson."). 6
Our reviewing court has previously held other patent claims ineligible
for reciting similar abstract concepts. For example, while the Supreme
Court has enhanced the § 101 analysis since CyberSource in cases like Mayo
and Alice, the Federal Circuit continues to "treat[] analyzing information by
steps people go through in their minds, or by mathematical algorithms,
without more, as essentially mental processes within the abstract-idea
category." Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1146-
47 (Fed. Cir. 2016) (alteration in original) (quoting Elec. Power Grp., 830
F.3d at 1354).
In addition, our reviewing court has concluded that abstract ideas
include the concepts of collecting data, recognizing certain data within the
collected data set, and storing the data in memory. Content Extraction &
Transmission LLC v. Wells Fargo Bank, N.A., 776 F.3d 1343, 1347 (Fed.
Cir. 2014). Additionally, the collection of information and analysis of
amount less the portion of the reimbursement eligible amount,
and returns a coordinated response to the merchant.
6 CyberSource further guides that "a method that can be performed by
human thought alone is merely an abstract idea and is not patent-eligible
under§ 101." CyberSource, 654 F.3d at 1373.
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information ( e.g., recognizing certain data within the dataset) are also
abstract ideas. Elec. Power, 830 F.3d at 1353-54 (collecting information
and "analyzing information by steps people go through in their minds, or by
mathematical algorithms, without more, [are] essentially mental processes
within the abstract-idea category"). Similarly, "collecting, displaying, and
manipulating data" is an abstract idea. Intellectual Ventures I LLC v.
Capital One Fin. Corp., 850 F.3d 1332, 1340 (Fed. Cir. 2017). Further, a
process that employs mathematical algorithms to manipulate existing
information to generate additional information is abstract. Digitech Image
Techs., LLC v. Elec.for Imaging, Inc., 758 F.3d 1344, 1351 (Fed.
Cir. 2014). More recently, our reviewing court has also concluded that acts
of parsing, comparing, storing, and editing data are abstract ideas.
Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018).
Also, our reviewing court held in Inventor Holdings:
Under Alice, the claims of the '582 patent are manifestly
directed to an abstract idea, which the district court accurately
described as "local processing of payments for remotely
purchased goods." Inventor Holdings, 123 F.Supp.3d at 561
(citing '582 patent col. 1 11. 6-10). The idea that a customer may
pay for items ordered from a remote seller at a third-party's
local establishment is the type of fundamental business practice
that, when implemented using generic computer technology, is
not patent-eligible under Alice, 134 S. Ct. at 2355 (quoting Le
Roy v. Tatham, 55 U.S. (14 How.) 156, 175, 14 L.Ed. 367
(1852) ("A principle, in the abstract, is a fundamental truth; an
original cause; a motive; these cannot be patented, as no one
can claim in either of them an exclusive right.")). As we
explained in Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333
(Fed. Cir. 2012), the abstract idea exception to patent eligibility
disallows the patenting of "basic concept[ s ], " such as
"processing information through a clearinghouse," because no
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entity is entitled to "wholly preempt" such concepts. Id.; see
also Alice, 134 S. Ct. at 2354.
Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1377
(Fed. Cir. 2017).
We find the claims on Appeal are sufficiently analogous to those
described in Inventor Holdings, supra, i.e., processing of particular types of
payments, such that we maintain our conclusion that the appealed claims are
also directed to an abstract idea.
Appellants allege that lack of preemption of every application of the
abstract idea renders claim 1 patent-eligible. App. Br. 10. We disagree with
Appellants' arguments. See buySAFE, Inc. v. Google, Inc., 765 F.3d 1350,
1355 (Fed. Cir. 2014) (collecting cases); Accenture Global Servs., GmbH v.
Guidewire Software, Inc., 728 F.3d 1336, 1345 (Fed. Cir. 2013); 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").
Further:
[ w ]hile preemption may signal patent ineligible subject matter,
the absence of complete preemption does not demonstrate
patent eligibility .... Where a patent's claims are deemed only
to disclose patent ineligible subject matter under the Mayo
framework, as they are in this case, preemption concerns are
fully addressed and made moot.
Ariosa Diagnostics, 788 F.3d at 1379; see also OIP Techs., Inc. v.
Amazon.com, Inc., 788 F.3d 1359, 1362---63 (Fed. Cir. 2015) ("that the
claims do not preempt all price optimization or may be limited to price
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optimization in the e-commerce setting do not make them any less
abstract").
Appellants also allege the claims on Appeal meet both prongs of the
Bilski "machine-or-transformation test." App. Br. 9-10. We disagree.
As recognized by the Federal Circuit in Ultramercial, 772 F.3d 709,
715-16 (Fed. Cir. 2014), the "machine-or-transformation" (MoT) test, as
outlined in In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008), can provide a
"useful clue" in the Alice framework. Under Bilski's MoT test, a claimed
process can be patent-eligible under § 101 if: (1) it is tied to a particular
machine or apparatus; or (2) the process transforms a particular article into a
different state or thing. Bilski, 545 F .3d at 954 ( citing Gottschalk v. Benson,
409 U.S. 63, 70 (1972)).
Applying the machine-or-transformation test here, Appellants allege:
By contrast, claim 1 recites more than merely an
"unspecified, generic computer," and also includes "express
language to define the computer's participation." Specifically,
claim 1 requires specified step( s) to be performed "via a
registration site module, embodied in a non-transitory computer
readable medium, executing on at least one hardware
processor," while other step(s) are required to be performed
"via a payment network platform module, embodied in a non-
transitory computer readable medium, executing on said at least
one hardware processor." Claim 1 further specifies that "said
payment network platform module is directly coupled to said
registration site module."
App. Br. 8-9.
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Appellants' reliance on DDR7 ("Furthermore, implementation of the
claimed methods using the specific components recited therein provided
benefits relative to execution on a generic computer, as discussed in the
specification at, for example, page 32, lines 3-27.") (App. Br. 9) is
misplaced as the recited claims do not improve the computer. In DDR, the
claims at issue involved, inter alia, "web pages displays [with] at least one
active link associated with a commerce object associated with a buying
opportunity of a selected one of a plurality of merchants" ( claim 1 of US
7,818,399). The Federal Circuit found the claims in DDR to be patent-
eligible under step one of the Mayo/Alice test because "the claimed solution
is necessarily rooted in computer technology in order to overcome a problem
specifically arising in the realm of computer networks." DDR Holdings, 773
F.3d at 1257. Specifically, the Federal Circuit found the claims addressed
the "challenge of retaining control over the attention of the customer in the
context of the Internet." Id. at 1258.
We find the rejected claims are dissimilar to DDR's web page with an
active link, and the Specification does not support the view that any
computer-related claim elements are unconventional. See e.g., Spec. 3,
11. 18-27.8
7 DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014).
8 "[O]ne or more embodiments of the invention or elements thereof can be
implemented in the form of a system ( or apparatus) including a memory and
at least one processor that is coupled to the memory and operative to
perform exemplary method steps. Yet further, in another aspect, one or more
embodiments of the invention or elements thereof can be implemented in the
form of means for carrying out one or more of the method steps described
herein; the means can include (i) hardware module(s), (ii) software
module( s ), or (iii) a combination of 25 hardware and software modules; any
of (i)-(iii) implement the specific techniques set forth herein, and the
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We therefore conclude Appellants' claim 1 is not sufficiently tied to a
particular machine or apparatus, i.e., "a registration site module" or
"payment network platform module," or a "hardware processor." We
conclude the "modules" recited in Appellant's independent claim 1 are
merely generic processors and memory, particularly in light of Appellants'
Specification. See Spec. 2, 11. 23-25. Thus, we conclude the claimed
"registration module" and "payment network platform module" are merely
implemented by generic processors under the first prong of Bilski's MoT
test. 9
Appellants argue " [ c ]laim 1 also satisfies the second branch of the
machine-or-transformation test, because 'it transforms a particular article
into a different state' by changing a balance associated with the 'payment
card product."' App. Br. 9. Further, "the 'payment card product' recited in in
claim 1 are [sic] physical objects ( or at least representative of physical
objects), and claim 1 recites steps which alter data stored on and/or
representative of these physical objects (thus transforming the particular
article into a different state)." App. Br. 10.
software modules are stored in a tangible computer-readable recordable
storage medium ( or multiple such media)." Spec. 3, 11. 18-27.
9
" [ A ]n exemplary apparatus includes a registration site module; a payment
network platform module, coupled to the registration site module ( directly as
in FIGS. 7-9 or indirectly as in FIG. 6), and an issuer platform module,
coupled to the payment network platform module. Each of the modules
includes a memory, at least one processor coupled to the memory, and a
corresponding distinct software module, embodied on a tangible, computer-
readable recordable storage medium. See FIG. 5 and accompanying
discussion below. The corresponding software modules are executable by
the corresponding processors to carry out one or more method steps as
described." Spec. 28, 11. 21-28 (emphases added).
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We disagree because we find that merely altering ( or adding to) data
stored on a payment card product is not a "transformation" of the product
sufficient to satisfy the second prong of the Bilski MoT test.
Therefore, in agreement with the Examiner, we conclude claim 1
involves nothing more than identifying, collecting, storing, comparing, and
generating data for reimbursement transactions, without any particular
inventive technology- an abstract idea. See Elec. Power Grp., 830 F.3d
at 1354. 10
Alice Step 2 -Inventive Concept
If the claims are directed to a patent-ineligible concept, as we
conclude above, we proceed to the "inventive concept" step. For that step
we must "look with more specificity at what the claim elements add, in order
to determine 'whether they identify an "inventive concept" in the application
of the ineligible subject matter' to which the claim is directed." Affinity
Labs, 838 F.3d at 1258 (quoting Elec. Power Grp., 830 F.3d at 1353).
In applying step two of the Alice analysis, our reviewing court guides
we must "determine whether the claims do significantly more than simply
describe [the] abstract method" and thus transform the abstract idea into
patentable subject matter. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709,
715 (Fed. Cir. 2014). We look to see whether there are any "additional
features" in the claims that constitute an "inventive concept," thereby
rendering the claims eligible for patenting even if they are directed to an
abstract idea. Alice, 134 S. Ct. at 2357. Those "additional features" must be
10 Merely automating previously manual processing by using computers
does not qualify as an eligibility-rejection-defeating improvement. Credit
Acceptance Corp. v. Westlake Servs., 859 F.3d 1044 (Fed. Cir. 2017).
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more than "well-understood, routine, conventional activity." Mayo, 566
U.S. at 79.
With respect to the Alice/Mayo Step 2 analysis, Appellants merely
argue, without more, "given the significant technological benefits associated
with embodiments of the present invention, even assuming arguendo that the
present claims could be characterized as directed to an abstract idea, the
claims contain "an 'inventive concept' sufficient to 'transform' the claimed
abstract idea into a patent-eligible application." App. Br. 10.
Evaluating representative claim 1 under step 2 of the Alice analysis,
we agree with the Examiner that it lacks an inventive concept that
transforms the abstract idea of reimbursement transaction processing into a
patent-eligible application of that abstract idea. See Final Act. 5; Ans. 4 .. 11
11 The Examiner concludes:
[U]sing a computer IIAS and ISO 8584 is a common computer
techniques of performing generic computing processing
required for that computing environment (i.e. reimbursements).
Thus, taken alone, the additional elements do not amount to
significantly more than the above-identified judicial exception
(the abstract idea). Looking at the limitations as an ordered
combination adds nothing that is not already present when
looking at the elements taken individually. Further the examiner
respectfully notes the claims do not amount to significantly
more than the abstract idea of an economic process as the
features noted in the claim, supra, are conceptually no different
from a list of steps written down with pencil and paper for
execution by a human being (i.e., manual reimbursements).
There is no indication that the combination of elements
improves the functioning of a computer or improves any other
technology. Their collective functions merely provide
conventional computer implementation.
Ans. 4.
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We note the patent eligibility inquiry may contain underlying issues of
fact. Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314,
1325 (Fed. Cir. 2016). In particular, "[t]he question of whether a claim
element or combination of elements is well-understood, routine and
conventional to a skilled artisan in the relevant field is a question of fact."
Berkheimer, 881 F.3d at 1368.
As evidence of the conventional nature of the claimed network
components and processes, we note Appellant's Specification describes, for
example:
FIG. 5 is a block diagram of a system 500 that can
implement part or all of one or more aspects or processes of the
present invention. As shown in FIG. 5, memory 530 configures
the processor 520 (which could correspond, e.g., to processor
portions 106, 116, 130, processors associated with any of the
blocks in FIGS. 1, 2 and 6-10, processors of terminals, or
processors of remote hosts in centers 140, 142, 144) to
implement one or more aspects of the methods, steps, and
functions disclosed herein (collectively, shown as process 580
in FIG. 5). Different method steps can be performed by
different processors. The memory 530 could be distributed or
local and the processor 520 could be distributed or singular.
The memory 530 could be implemented as an electrical,
magnetic or optical memory, or any combination of these or
other types of storage devices (including memory portions as
described above with respect to cards 102, 112). It should be
noted that if distributed processors are employed, each
distributed processor that makes up processor 520 generally
contains its own addressable memory space. It should also be
noted that some or all of computer system 500 can be
incorporated into an application-specific or general-use
integrated circuit. For example, one or more method steps could
be implemented in hardware in an ASIC rather than using
firmware. Display 540 is representative of a variety of possible
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input/output devices (e.g., displays, mice, keyboards, and so
on).
Spec. 29, 1. 15 through 30, 1. 2.
We agree with the Examiner that the claim limitations may be broadly
but reasonably construed as reciting conventional computer components and
techniques, particularly in light of Appellant's Specification, as quoted
above. 12 We agree with the Examiner because, as in Alice, the recitation of
either a "method" that uses a "registration site module, embodied in a non-
transitory computer readable medium, executing on at least one hardware
processor" ( claim 1 ), is simply not enough to transform the patent-ineligible
abstract idea here into a patent-eligible invention. See Alice, 134 S. Ct. at
2357 ("[C]laims, which merely require generic computer implementation,
fail to transform [an] abstract idea into a patent-eligible invention."). 13
12 During prosecution, claims must be given their broadest reasonable
interpretation when reading claim language in light of the specification as it
would be interpreted by one of ordinary skill in the art. In re Am. Acad. of
Sci. Tech. Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). Under this standard,
we interpret claim terms using "the broadest reasonable meaning of the
words in their ordinary usage as they would be understood by one of
ordinary skill in the art, taking into account whatever enlightenment by way
of definitions or otherwise that may be afforded by the written description
contained in the applicant's specification." In re Morris, 127 F.3d 1048,
1054 (Fed. Cir. 1997).
13 Appellants' Reply Brief does not directly address the Examiner's Step 2
"significantly more" analysis, but instead focuses on the Step 1 "Abstract
idea" analysis:
Notably, the claimed invention provides for reduced data
flow through the ISO 8583 payment network. In particular, the
invention "allows [purchase] data to reside close to the
information sources [local merchants], thereby reducing
congestion in [ISO 8583] network bottlenecks, while still
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Accordingly, based upon the findings above, on this record, we are
not persuaded of error in the Examiner's conclusion that the appealed claims
are directed to patent-ineligible subject matter. Therefore, we sustain the
Examiner's § 101 rejection of independent claim 1, and grouped claims 2, 5-
9, 11-14, 17-21, and 23-26, which fall therewith. See Claim Grouping,
supra.
2. § 101 Rejection RI of Claim 6
Issue 2
Appellants argue (App. Br. 10-11; Reply Br. 14--15) the Examiner's
rejection of claim 6 under 35 U.S.C. § 101 as being directed to patent-
ineligible subject matter is in error. These contentions present us with the
following issue:
Under our governing case law concerning 35 U.S.C. § 101, did the
Examiner err in concluding claim 6 is directed to a judicial exception, i.e., an
abstract idea, without significantly more, and thus is patent-ineligible under
§ 101?
Analysis
Claim 6 recites, " [ t ]he method of Claim 1, wherein said payment card
product comprises one of a credit card, a debit card, a prepaid card, and a
stored balance card."
allowing [reimbursement] data to be accessible from a central
location."
Reply Br. 12.
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Appellants argue " [ c ]laim 6 satisfies § 101 at least by virtue of its
dependency from claim 1. Moreover, claim 6 recites additional subject
matter which independently satisfies § 101." App. Br. 14.
While the specific type of card listed in claim 6 may be tangible and
non-abstract, we conclude that this specific limitation in dependent claim 6
does nothing to remove the subject matter of claim 1 from the realm of the
identified abstract idea, i.e., a fundamental economic practice of transactions
relating to reimbursements. See Ans. 5-6.
Accordingly, on this record, and under step one of Alice, we agree
with the Examiner's conclusion the claims on Appeal are directed to an
abstract idea.
Our Step 2 analysis of claim 1, supra, is equally pertinent with respect
to claim 6, and is incorporated herein by reference.
3. § 103 Rejection R2 of Claims 1 and 5-7
Issue 3
Appellants argue (App. Br. 11-13; Reply Br. 15-17) the Examiner's
rejection of claim 1 under 35 U.S.C. § 103(a) as being obvious over the
combination of Robbins and Unland is in error. These contentions present
us with the following issue:
Did the Examiner err in finding the cited prior art combination teaches
or suggests a method that includes, inter alia, the step of "obtaining a
payment card authorization request with a full amount and an IIAS
reimbursement eligible amount included therein," as recited in claim 1?
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Analysis
The Examiner finds Robbins teaches or suggests obtaining a payment
card request with a full amount (Ans. 6 citing Robbins col. 5, 11. 24---61), and
finds "Unland teaches that it was known to allow for a merchant to create
two authorization requests in which one includes the full amount and the
other contains an IIAS reimbursement eligible amount calculated by the
merchant." Id. ( citing Unland ,r,r 18-19). The Examiner "notes one of
ordinary skill in the art would have been able to combine the two
authorization requests of Unland to Robbins request in order to contain IIAS
reimbursement eligible amounts as additional elements in the one request."
Id.
Appellants contend "Unland teaches directly away from the
aforementioned limitation of claim 1 by explicitly stating that it is
advantageous for a payment card network to instead obtain the full amount
and the IIAS reimbursement eligible amount from the merchant in separate
authorization requests, preferably via different transmission networks."
App. Br. 13; see also Reply Br. 16.
Appellants further argue:
Combining these two references, one of which teaches a
single request for a full amount and the other of which teaches
two separate requests for separate amounts, according to any
known method, would not predictably yield the result of "a
payment card authorization request with a full amount and an
IIAS reimbursement eligible amount included therein" as
claimed. Simple substitution of Unland's two requests for
Robbins' single request likewise would not yield the claimed
invention. The cited art does not teach a known technique for
combining two requests into a single request. The cited art also
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does not teach or suggest, as a predictable solution, "a payment
card authorization request with a full amount and an IIAS
reimbursement eligible amount included therein".
Reply Br. 17 ( emphasis added).
Based on this record and Appellants' arguments above, we disagree
with the Examiner's finding that a person of ordinary skill in the art would
be motivated to combine Robbins with Unland.
We disagree with the Examiner's stated motivation to combine the
references in the manner suggested because Unland discloses, in pertinent
part:
Authorization for healthcare related purchases, including both
price information and product information, is passed over PBM
networks or other networks that already are compliant with
HIP AA. Authorization for other purchases is passed over
existing payment card transaction networks. Information about
healthcare related products is divorced from payment
information.
Unland ,r 5 ( emphasis added).
Therefore, based upon the findings above, on this record, we are
persuaded of at least one error in the Examiner's reliance on the cited prior
art combination to teach or suggest the disputed limitation of claim 1, such
that we do not sustain the Examiner's obviousness rejection of independent
claim 1, and grouped claims 5-8 which fall therewith. See Claim Grouping,
supra.
In light of our reversal of the Rejection R2 of independent claim 1,
supra, we also reverse obviousness Rejection R3 under§ 103 of claim 28,
which depends from claim 1. On this record, the Examiner has not shown
how the taking of Official Notice overcomes the aforementioned
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deficiencies with Robbins and Unland, as discussed above regarding
claim 1.
REPLY BRIEF
To the extent Appellants may advance new arguments in the Reply
Brief (Reply Br. 7-21) not in response to a shift in the Examiner's position
in the Answer, we note arguments raised in a Reply Brief that were not
raised in the Appeal Brief or are not responsive to arguments raised in the
Examiner's Answer will not be considered except for good cause (see 37
C.F.R. § 41.4I(b)(2)), which Appellants have not shown.
CONCLUSIONS
(1) The Examiner did not err with respect to patent-ineligible
subject matter Rejection RI of claims 1, 5-8, and 28 under 35 U.S.C. § 101,
and we sustain the rejection.
(2) The Examiner erred with respect to obviousness Rejections R2
and R3 of claims 1, 5-8, and 28 under 35 U.S.C. § I03(a) over the cited
prior art combinations of record, and we do not sustain the rejections.
Because we have affirmed at least one ground of rejection with
respect to each claim on appeal, we affirm the Examiner's decision. See 37
C.F.R. § 4I.50(a)(l).
DECISION
We affirm the Examiner's decision rejecting claims 1, 5-8, and 28.
AFFIRMED
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