Ex Parte Sgambati et al

Patent Trials and Appeals Board

Apr 30, 2019

10773642 - (D) (P.T.A.B. Apr. 30, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
10/773,642 02/06/2004
20350 7590 05/02/2019
KILPATRICK TOWNSEND & STOCKTONLLP
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
Glen Sgambati
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.
90850-678477 (OOOlOOUS) 7640
EXAMINER
VIZV ARY, GERALD C
ART UNIT PAPER NUMBER
3624
NOTIFICATION DATE DELIVERY MODE
05/02/2019 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):
ipefiling@kilpatricktownsend.com
KTSDocketing2@kilpatrick.foundationip.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte GLEN SGAMBATI, ROBERT PERROTT A, and
RICH MAYO
Appeal2018-002178
Application 10/773,642 1
Technology Center 3600
Before ALLEN R. MacDONALD, JAMES B. ARPIN, and
PHILLIP A. BENNETT, Administrative Patent Judges.
BENNETT, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 1--4, 7, 9, 10, 12, 13, 17-19, and 21-23. Claims 5, 6, 8,
11, 14--16, and 20 are cancelled. We have jurisdiction under 35 U.S.C.
§ 6(b ).
We affirm.
1 Appellants' Brief ("App. Br.") identifies Early Warning Systems, LLC as
the real party in interest. App. Br. 2.
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Application 10/773,642
CLAIMED SUBJECT MATTER
The claims are directed to an account-owner verification database.
Claim 1, reproduced below, is representative of the claimed subject matter:
1. A method of populating and using an electronic account-
owner verification database, the method comprising:
(a) for each participant institution of a plurality of
participant institutions:
receiving, by a computer system, a single electronic file of
account-owner data elements linked to a plurality of accounts
maintained at the participant institution of the plurality of
participant institutions for multiple account owners and
subsequently receiving regular updates to the single electronic
file from the participant institution, wherein:
each account-owner data element received in the
single electronic files correspond to a data element field in
the account-owner verification database, and the account-
owner data elements provided by each participant
institution of the plurality of participant institutions
compnses:
an account number, an account type, an account
holder name for each account of the plurality of accounts
and the account-owner data elements provided by each
participant institution are required to have a required set of
data element fields for each account of the plurality of
accounts;
(b) receiving, by the computer system, non-participant
data elements obtained from a plurality of check images
corresponding to a plurality of checks, wherein:
the plurality of check images include account-
owner data elements linked to accounts maintained at non-
participant institutions, the non-participant institutions are
not required to provide account-owner data elements for
the minimum required set of data element fields;
each non-participant data element corresponds to a
data element field in the account-owner verification
database, and for a given check of the plurality of checks,
non-participant data elements are received corresponding
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to: a routing number, an account number, and at least one
additional data element;
( c) populating, by the computer system, the data element
fields of the electronic account-owner verification database with
the account-owner data elements linked to accounts maintained
at the participant institutions and the non-participant data
elements at the non-participant institutions;
( d) receiving, by the computer system, for verification,
from an inquirer:
(i) an account number; and
(ii) multiple data elements corresponding to the
account number;
( e) querying, by the computer system, the account-owner
verification database for the received account number and for
each of the received multiple data elements corresponding to the
received account number;
( f) retrieving, by the computer system, a response from the
account-owner verification database for each of the received data
elements such that multiple responses are retrieved, wherein, for
each of the received data elements, a response is retrieved that is
indicative of the accuracy of the received data element and
excludes customer-specific data, wherein:
the response is positive for the received data
element if a data element stored in the data element field
corresponding to the received account number matches the
received data element, and
the response specifies that information is
unavailable for the received data element if there is no data
element stored in the data element field corresponding to
the received account number; and
(g) providing, by the computer system, the multiple
responses to the inquirer.
App. Br. 18-19 (Claims Appendix).
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REFERENCES
The references relied upon by the Examiner in rejecting the claims on
appeal are:
Weinflash
Bozeman
US 7,383,227 B2 June 3, 2008
US 2002/0052852 Al May 2, 2002
REJECTIONS
Claims 1--4, 7, 9, 10, 12, 13, 17-19, and 21-23 stand rejected under
35 U.S.C. § 101 as being directed to ineligible subject matter. Final Act. 6-
12.
Claims 1--4, 7, 9, 10, 12, 13, 17-19, and 21-23 2 stand rejected under
35 U.S.C. § I03(a) as being unpatentable over Bozeman and Weinflash.
Final Act. 12-30.
REJECTION UNDER 35 U.S.C. § 101
Standard for Patent Eligibility
In issues involving subject matter eligibility, our inquiry focuses on
whether the claims satisfy the two-step test set forth by the Supreme Court in
Alice Corp. v. CLS Banklnt'l, 134 S. Ct. 2347 (2014). The Court instructs
us to "first determine whether the claims at issue are directed to a patent-
ineligible concept," Id. at 2355, and, in this case, the inquiry centers on
whether the claims are directed to an abstract idea. If the initial threshold is
met, we then move to the second step, in which we "consider the elements of
2 The Examiner erroneously identifies the rejected claims as claims 1--4, 6-
13, and 18-22 in the statement of rejection. Final Act. 12. However, in
setting forth the details of the § 103 rejection, the Examiner addresses the
claims 1--4, 7, 9, 10, 12, 13, 17-19, and 21-23.
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each claim both individually and 'as an ordered combination' to determine
whether the additional elements 'transform the nature of the claim' into a
patent-eligible application." Id. (quoting Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 566 U.S. 66, 79, 78 (2012)). The Court describes
the second step as 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."' Id. (quoting Mayo, 566 U.S. at 72-73).
The USPTO recently published revised guidance on the application of
§ 101 to pending claims. USPTO's January 7, 2019 Memorandum, 2019
Revised Patent Subject Matter Eligibility Guidance ("Memorandum").
Under that guidance, we first look to whether the claim recites:
(1) any judicial exceptions, including certain groupings of abstract
ideas (i.e., mathematical concepts, certain methods of organizing
human activity such as a fundamental economic practice, or mental
processes); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a}-(c), (e}-(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that is not
"well-understood, routine, conventional" in the field (see MPEP
§ 2106.05(d)); or
( 4) simply appends well-understood, routine, conventional activities
previously known to the industry, specified at a high level of
generality, to the judicial exception.
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See Memorandum.
Examiner's Determinations and Conclusion
In the first step of the Alice inquiry, the Examiner determines the
claims are directed to "the abstract idea of populating and using an
electronic account-owner verification database." Final Act. 8. The
Examiner explains that:
The claim( s) are similar to other concepts that have been
identified as abstract by the courts such as such as the claims'
invocation of computers, networks and displays does not
transform the claimed subject matter into patent-eligible
applications. The claims at issue do not require any
nonconventional computer network, or display components, or
even a "non-conventional and non-generic arrangement of
known, conventional pieces," but merely call for performance of
the claimed information collection analysis and display functions
"on a set of generic computer components" and display devices.
Nothing in the claims, understood in the light of the
specifications, requires anything other than off-the-shelf
conventional computer, network and display technology for
gathering, sending and presenting the desired information.
Final Act. 8 ( citation omitted).
The Examiner further determines that the claims are directed to
"identifying and reporting suspicious activity." Ans. 4. The Examiner
reasons that the recited steps in claim 1 are akin to "collecting and analyzing
information to detect misuse and notify a user when misuse is detected as in
[Fair Warning IP, LLC v. Iatric Sys., 839 F.3d 1089 (Fed. Cir. 2016)]."
Ans. 4.
At Alice step 2, the Examiner determines the claims do not recite
elements sufficient to amount to significantly more than the abstract idea
because:
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[T]he claims are not seen to recite an improvement to another
technology or technical field, an improvement to the functioning
of the computer itself, or meaningful limitations beyond
generally linking the use of an abstract idea to a particular
technological environment. The functions performed by the
computer components, such as, populating and using account-
owner verification data, where for each participant institution a
single electronic file of account-owner data elements linked to
accounts maintained at the participant institution of the plurality
of participant institutions is received and subsequently receiving
regular updates to the single electronic file from the participant
institution fails to (a) improve another technology or technical
field and (b) improve the functioning of the computer itself and
( c) applies the abstract idea with or by use of, a particular
machine, which is a generic computer performing generic
computer functions.
Final Act. 9 ( emphasis omitted). The Examiner further finds that "the
claimed additional elements not encompassed by the abstract idea merely
describe generic computer components performing their respective
conventional functions." Ans. 6.
Appellants ' Contentions
Appellants present several arguments in favor of eligibility. First,
Appellants argue the Examiner's abstract idea characterization
overgeneralizes the invention, and that the invention is better characterized
as "directed to a specialized database arrangement that includes: a single
electronic file of account-owner elements being received, this single file
being required to include elements linked to a plurality of accounts for
multiple account owners; and 2) check imaging data." App. Br. 8.
Appellants further contend that the claims are similar those found
eligible in Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016)
because "the database and computing components of the Applicant's claims
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are not merely disguising an underlying abstract idea, but are rather essential
in performance of the claimed arrangement; for example, allowing the
database to be queried without revealing the contents of the database." App.
Br. 9-10.
Appellants also challenge the Examiner's determination under Alice
step 2. Specifically, Appellants argue their claimed embodiments are similar
to examples provided in the USPTO 2015 Subject Matter Eligibility update
because, like the eligible claim example in 2015 update, the "claimed
arrangement requires that an account-owner verification database be
constructed using single data files that include account information about
multiple account owners and check imaging data, the constructed database is
then queried in such a manner that the contents of the database are not
revealed in response to the query." App. Br. 10.
Our Review
Applying the guidance set forth in the Memorandum, we are not
persuaded of Examiner error. The Memorandum instructs us first to
determine whether any judicial exception to patent eligibility is recited in the
claim. The guidance identifies three judicially-excepted groupings:
(1) mathematical concepts, (2) certain methods of organizing human activity
such as fundamental economic practices, and (3) mental processes. We
focus here on the second grouping----certain methods of organizing human
activities such as fundamental economic practices.
Claim 1 recites the following limitations: (1) "for each participant
institution of a plurality of participant institutions: receiving ... [an]
electronic file of account-owner data elements linked to a plurality of
accounts maintained at the participant institution of the plurality of
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participant institutions for multiple account owners and subsequently
receiving regular updates to the single electronic file from the participant
institution," (2) "wherein: each account-owner data element received in the
single electronic files correspond to a data element field in the account-
owner verification database," (3) "the account-owner data elements provided
by each participant institution of the plurality of participant institutions
comprises: an account number, an account type, an account holder name for
each account of the plurality of accounts and the account-owner data
elements provided by each participant institution are required to have a
required set of data element fields for each account of the plurality of
accounts," (4) "populating ... the data element fields of the electronic
account-owner verification database with the account-owner data elements
linked to accounts maintained at the participant institutions,"
( 5) "receiving ... for verification, from an inquirer: an account number; and
multiple data elements corresponding to the account number,"
(6) querying ... the account-owner database for the received account
number and for each of the received multiple data elements corresponding to
the received account number," (7) "retrieving ... a response from the
account-owner verification database for each of the received data
elements ... that is indicative of the accuracy of the received data element
and excludes customer-specific data," (8) "wherein: the response is positive
for the received data element if a data element stored in the data element
field corresponding to the received account number matches the received
data element," (9) "the response specifies that information is unavailable for
the received data element if there is no data element stored in the data
element field corresponding to the received account number," and
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(10) "providing ... the ... responses to the inquirer." App. Br. 18-19
( Claims Appendix).
These limitations, under their broadest reasonable interpretation,
recite the fundamental economic practice of mitigating risk by determining
if a person is authorized to transact on an account. More specifically, each
of these limitations recites the operations that would ordinarily take place in
determining whether a person is authorized to transact on an account. For
example, limitations (1 }-( 4) recite receiving and storing up-to-date account
information from account holding institutions, such as banks for example, in
a conventional database, with information stored being sufficient to
determine whether a particular person is authorized with respect to each
account. Such data typically would be part of an account verification
scheme. Limitations ( 5}-(9) recite the familiar practice of receiving an
account number inquiry, comparing the received account number to the data
stored in the database, and retrieving the results of that comparison to
determine whether the account information is valid or not. Limitation (10)
recites returning the results of the comparison to the inquirer. Like the
concept of intermediated settlement in Alice, and the concept of hedging in
Bilski (which like the instant claims involves evaluating and managing risk
in a financial transaction), the concept of determining if a person is
authorized to transact on an account recited in Appellants' claims "is a
fundamental economic practice long prevalent in our system of
commerce." Alice, 134 S. Ct. at 2356 (citations and internal quotation marks
omitted). Indeed, the limitations recited above simply implement on a
broader scale, the long-standing practice of contacting a bank to verify that
sufficient funds are in an account against which a withdrawal is made, e.g., a
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check is written and presented for a transaction. Accordingly, we conclude
the claims recite a judicial exception of a fundamental economic practice.
Having determined that the claims recite a judicial exception, our
analysis under the Memorandum turns to determining whether there are
"additional elements that integrate the judicial exception into a practical
application." See MPEP § 2106.0S(a}-(c), (e}-(h). Appellants' claim 1
recites that various of the process steps are performed "by a computer
system." The recitation of a "computer system" without any additional
detail of its structure or configuration is not sufficient to integrate the
judicial exception into a practical application. See MPEP §§ 2106.05(b )(I)
("It is important to note that a general purpose computer that applies a
judicial exception, such as an abstract idea, by use of conventional computer
functions does not qualify as a particular machine."), 2106.05([) ("Another
consideration when determining whether a claim recites significantly more
than a judicial exception is whether the additional elements amount to more
than a recitation of the words 'apply it' ( or an equivalent) or are more than
mere instructions to implement an abstract idea or other exception on a
computer.").
Claim 1 also recites the additional limitation that data received from
participant institutions is received (a) as a "single electronic file." Claim 1
also recites additional limitations regarding how data is retrieved from the
database and presented to the inquirer, including (b) retrieving a separate
response for each data element received in an inquiry "such that multiple
responses are retrieved, wherein for each of the received data elements, a
response is retrieved," and ( c) providing "multiple responses" to the
inquirer. App. Br. 18-19 (Claims Appendix). Claim 1 also recites
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additional limitations which focus on obtaining additional account data, via
check images, which corresponds to accounts maintained at institutions
which do not supply account owner data to the database. These limitations
include ( d) "receiving ... a non-participant data elements obtained from a
plurality of check images corresponding to a plurality of checks,"
( e) "wherein: the plurality of check images include account-owner data
elements linked to accounts maintained at non-participant institutions, the
non-participant institutions are not required to provide account-owner data
elements for the minimum required set of data element fields," (f) "each
non-participant data element corresponds to a data element field in the
account-owner verification database," (g) "for a given check of the plurality
of checks, non-participant data elements are received corresponding to: a
routing number, and account number, and at least one additional data
element," and (h) populating the account owner verification database with
"the non-participant data elements at the non-participant institutions."
We conclude that these limitations are insufficient to integrate the
recited judicial exception of mitigating risk by determining if a person is
authorized to transact on an account into a practical application. The receipt
of account data in "a single file" from participant institutions, as recited in
limitation (a), merely adds insignificant extra-solution activity to the judicial
exception. See MPEP § 2106.05(g). The Specification describes no
technological improvement associated with receiving "a single file," and
makes reference to this particular aspect of the invention only once.
Spec. ,r 34 ("Preferably, the database 10 is initially populated by the
participant institutions 12 with a single file including all of the required
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participant data elements 16 for all of the accounts in the participant
institution 12.").
Similarly, limitations (b) and ( c ), which each relate to receiving
individualized responses for each data element retrieved from the database,
also do not improve the functioning of a computer. See MPEP § 2106.0S(a).
To the extent providing a response for each received data element realizes an
improvement, it is an improvement to how account verification information
is conveyed to an inquirer-i.e., an improvement to the abstract idea itself.
Limitations ( d}-(h), which focus on the use of check images to
populate the account-owner electronic verification database, are also
insufficient. The Specification acknowledges that "[i]maging checks and
reading account information is well known in the art. Therefore, a
description of check imaging systems is omitted here for convenience only,
and should not be considered limiting." Spec. ,r 28. As such, we do not
observe any improvement to the operation of a computer that is provided by
obtaining information from check images. Instead, these limitations relate
improving the quality of the data by obtaining account verification data from
an alternative data source, which, as with the limitations above, is an
improvement to the abstract idea itself. See, e.g. Spec. ,r 41 ("[S]ince the
database 10 also integrates account information from non-participant
institutions 32, the database 10 according to the present invention includes
an added level of robustness, thereby providing additional verification
accuracy to an inquirer."). Because these additional limitations are not
sufficient to integrate the recited abstract idea into a practical application, we
conclude the claim is directed to the recited judicial exception.
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Having determined the claim is directed to a judicial exception, we
proceed to evaluating whether the claim adds any specific limitation beyond
the judicial exception that is not "well-understood, routine, conventional" in
the field (see MPEP § 2106.0S(d)) or simply appends well-understood,
routine, conventional activities previously known to the industry, specified
at a high level of generality, to the judicial exception. See Memorandum.
We agree with the Examiner that the claim does not supply the
inventive concept required under Alice step 2. Appellants' arguments under
Alice step 2 are that the use of a "single file" and "check imaging data" are
unconventional and non-generic. Reply Br. 4. As we explained above,
however, there is no indication in the Specification that sending a collection
of data in "a single file" offers a non-conventional implementation of data
sharing. Indeed, the well-known and conventional way to share sets of
related data is to collect them in a file and transmit the file. The fact that
Appellants' devote only a single sentence of description to this allegedly
inventive functionality is a fair indication that the use of a single file was
well-known and conventional at the time the application was filed.
Similarly, as discussed above, Appellants' Specification also acknowledges
that extracting data from check images to store and databases was well-
known. Spec. ,r 28 ("Imaging checks and reading account information is
well known in the art."). In fact, the Specification purposefully omits any
description of check imaging technology under the presumption that it is
well understood, routine, and conventional. As such, the use of check
images as a secondary data source is not sufficient to supply an inventive
concept under Alice step 2. Finally, Appellants emphasize the alleged
capability that the invention provides "a database that can be queried to
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determine whether individual data elements match without revealing stored
data." Reply Br. 4. However, such a requirement amounts to nothing more
than the implementation of the conventional and well-known "IN" operator
of the Structured Query Language ("SQL").
Accordingly, we do not discern in claim 1 any "specific limitation
beyond the judicial exception that is not 'well-understood, routine,
conventional,'" and, instead, agree with the Examiner that the claims do not
supply an inventive concept sufficient to transform the judicial exception
into patent-eligible subject matter.
Because the Examiner correctly concluded claim 1 is directed to a
judicial exception, and because Appellants do not identify any error in the
Examiner's determination under Alice step 2, we sustain the rejection of
claim 1 under 35 U.S.C. § 101. Appellants do not present arguments for any
other claim. Accordingly, we treat claim 1 as representative, and sustain the
patent-eligibility rejection of the remaining claims for the same reasons.
REJECTION UNDER 35 U.S.C. § 103(a)
We reverse the rejection under 35 U.S.C. § 103(a). In rejecting
claim 1 as obvious over Bozeman and W einflash, the Examiner finds that
Bozeman discloses most of the claim limitations. Final Act. 13-15.
Relevant here, the Examiner acknowledges that Bozeman does not explicitly
disclose obtaining responses from the account-owner verification database,
"such that multiple responses are retrieved, wherein, for each of the received
data elements, a response is retrieved that is indicative of the accuracy of the
received data element and excludes customer-specific data." Final Act. 15-
16. The Examiner cites Weinflash for this limitation, finding that Weinflash
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demonstrates that it was known for banks to transmit item files to a non-
participant data base management entity while removing participant data
using a filter. Final Act. 16 (citing Weinflash col. 5, 1. 66-col. 6, 1. 6 and
Fig. 4). The Examiner also cites Bozeman's check verification feature as
suggesting this limitation. Final Act. 5-6 ( citing Bozeman ,r 7 5).
Appellants argue "there is no assessment of multiple individual
account elements," as is required by claim 1. App. Br. 12. We agree. The
cited portions of Bozeman describe a check verification service in which a
single response is provided regarding whether a positive or negative rating is
given for a check presented to a commercial retail entity. Bozeman ,r,r 75-
76. However, unlike the disputed limitation, Bozeman makes a single,
binary determination-a positive or negative rating with respect to the
customer based on a single data element-whether checks have been
previously dishonored. The cited portions of W einflash do not cure this
deficiency, as Weinflash merely describes receiving daily data updates from
banks and filtering out participant data, and W einflash does not contemplate
retrieving a response indicative of the accuracy of each data element.
Accordingly, we are persuaded the Examiner erred in concluding claim 1
would have been obvious over the cited references, and we do not sustain
the rejection of claim 1, of independent claims 7 and 13 which recite similar
limitations, and the remaining claims which depend therefrom.
DECISION
We affirm the Examiner's rejection of claims 1--4, 7, 9, 10, 12, 13,
17-19, and 21-23 under 35 U.S.C. § 101.
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WereversetheExaminer'srejectionofclaims 1--4, 7, 9, 10, 12, 13,
17-19, and 21-23 under 35 U.S.C. § 103.
Because we have affirmed at least one ground of rejection for each
claim on appeal, we affirm the Examiner's decision to reject the claims.
37 C.F.R. § 4I.50(a)(l).
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(l )(iv).
AFFIRMED
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