Ex Parte Phillips

Patent Trial and Appeal Board

Jun 11, 2018

11674316 (P.T.A.B. Jun. 11, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/674,316 02/13/2007
125619 7590 06/13/2018
Mastercard International Incorporated
c/o Buckley, Maschoff & Talwalkar LLC
50 Locust A venue
New Canaan, CT 06840
FIRST NAMED INVENTOR
Simon Phillips
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.
P00187-US-UTIL
(MOl.020)
4293
EXAMINER
DEGA, MURALI K
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
06/13/2018 ELECTRONIC
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address(es):
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 SIMON PHILLIPS
Appeal2017---000140
Application 11/674,316 1
Technology Center 3600
Before MURRIEL E. CRAWFORD, ANTON W. PETTING, and
MEREDITH C. PETRA VICK, Administrative Patent Judges.
PETTING, Administrative Patent Judge.
DECISION ON APPEAL
1 According to Appellant, the real party in interest is MASTERCARD
INTERNATIONAL INCORPORATED. App. Br. 2.
Appeal2017-000140
Application 11/674,316
STATEMENT OF THE CASE2
Simon Phillips (Appellant) seeks review under 35 U.S.C. § 134 of a final
rejection of claims 1-3, 9-13, 19, and 20, the only claims pending in the
application on appeal. This is the second time this application has come
before us. The Examiner was affirmed-in-part in our earlier 2011-002908
Decision mailed November 13, 2012. The claims have since been amended.
We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b).
The Appellant invented a way for a computer operated by a payment
device issuer that uses information received in connection with one or more
payment transaction authorization requests to determine an application
transaction counter (ATC) stored in a payment device that initiated the
authorization request or requests, in a case where the issuer lacks
information ( or reliable information) about the ATC for that particular
device. In one variation, the issuer computer "guesses" the current
transaction count value as maintained by the payment device for which an
authorization request was received. Spec. 3:8-15.
An understanding of the invention can be derived from a reading of
exemplary claim 1, which is reproduced below (bracketed matter and some
paragraphing added).
1. A transaction count synchronization method comprising:
(a) receiving and storing, in a transaction authorization
computer, data related to two or more payment transaction
2 Our decision will make reference to the Appellant's Appeal Brief ("App.
Br.," filed December 28, 2015) and Reply Brief ("Reply Br.," filed
September 19, 2016), and the Examiner's Answer ("Ans.," mailed July 19,
2016), and Final Action ("Final Act.," mailed September 4, 2015).
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Appeal2017-000140
Application 11/674,316
authorization requests originated from a payment device, the
data for each request including (i) one or more low-order digits
of a transaction count value maintained by the payment device,
and (ii) a result of an encryption calculation performed by the
payment device for the request;
(b) for each request, using the one or more low-order digits to
estimate in the transaction authorization computer the
transaction count value;
( c) for each request, using the estimated transaction count value
to perform a subsequent encryption calculation in the
transaction authorization computer;
( d) for each request, comparing, in the transaction authorization
computer, a result of the subsequent encryption calculation with
the encryption calculation result received for the request;
( e) for each request, when the result of the subsequent
encryption calculation does not match the received encryption
calculation result, repeating steps (b ), ( c) and ( d) in the
transaction authorization computer until the result of the
subsequent encryption calculation matches the received
encryption calculation result;
( f) storing the estimated transaction count value in the
transaction authorization computer as a confirmed transaction
count value when the result of the subsequent encryption
calculation matches the received encryption calculation result;
and
(g) comparing, by the transaction authorization computer, the
confirmed transaction count value for one of said requests with
the confirmed transaction count value for another one of said
requests.
Claims 1-3, 9-13, 19, and 20 stand rejected under 35 U.S.C. § 101 as
directed to non-statutory subject matter.
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Appeal2017-000140
Application 11/674,316
ISSUE
The issues of eligible subject matter tum primarily on whether the claims
recite more than an abstract idea.
ANALYSIS
Claims 1, 9, 10, and 19 are the independent claims on appeal, with the
rest of the claims on appeal depending therefrom.
The Examiner rejects these claims according to the two step procedure in
Alice Corp., Pty. Ltd. v CLS Bank Intl, 134 S.Ct. 2347 (2014). As to the first
step, the Examiner finds that the claims are directed to facilitating a financial
transaction by a payment card with an electronic circuit and an authorization
server of an issuer financial institution using transaction counts held by the
electronic payment card. Final Act. 3.
Appellant argues that:
The Court also emphasized that the "directed to" inquiry
applies a filter to claims, when interpreted in view of the
specification, based on whether their character as a whole is
directed to a patent ineligible concept, and cautioned against
describing a claim at a high level of abstraction untethered from
the language of the claim when determining the focus of the
claimed invention.
Reply Br. 3.
We agree with the Appellant that the determination under step 1 that the
claims are directed to an abstract idea is oversimplified. The claims are
required to be considered as a whole.
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Application 11/674,316
Appellant argues that:
In particular, claim 1 recites a process this is necessarily rooted
in payment card system technology, and solves the
technological problem of how to regenerate the Application
Transaction Counter (ATC) when a payment card issuer
computer lacks information ( or lacks reliable information)
about the ATC for one or more electronic payment cards. (The
ATC is important as it keeps a running count of the number of
transactions for which an electronic payment card has been
used, and this count is utilized by an issuer to prevent certain
types of fraud.) Such a situation can occur when, for example, a
new issuer takes over a number of existing accounts but does
not receive the ATC information from the prior issuer, or when
an issuer begins implementing security code verification on
accounts for which security code verification and ATC tracking
were not previously performed.
App. Br. 15.
"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). "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, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016), quoted in Apple, Inc.
v. Ameranth, Inc., 7842 F.3d 1229, 1241 (Fed. Cir. 2016).
Examiner in particular fails to explain why limitations ( c }-( e ), which
Appellant points to (Appeal Brief 15-16), do not alter the scope of what the
claims as a whole are directed to. Because the claims have not been
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Appeal2017-000140
Application 11/674,316
considered as a whole, the explanation for determining that the claims are
directed to an abstract idea is inadequate. See May 2016 Memorandum 2
("the rejection ... must provide an explanation ... which [is] sufficiently
clear and specific to provide applicant sufficient notice of the reasons for
ineligibility.")
Given the inadequacy of the determination under the first part of the
Alice framework, we need not address the second part of the framework.
We reverse the rejection of claim 1.
CONCLUSIONS OF LAW
The rejection of claims 1-3, 9-13, 19, and 20 under 35 U.S.C. § 101 as
directed to non-statutory subject matter is improper.
DECISION
The rejection of claims 1-3, 9-13, 19, and 20 is reversed.
REVERSED
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