Ex Parte Smith

Patent Trials and Appeals Board

Apr 17, 2019

14162698 - (D) (P.T.A.B. Apr. 17, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/162,698
17169 7590
Stephen M. De Klerk
MatterLight IP
2033 Gateway Place
5th Floor
San Jose, CA 95110
01/23/2014
04/19/2019
FIRST NAMED INVENTOR
Glyn Barry Smith
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.
BOKU-P013C 3900
EXAMINER
CHANG, EDWARD
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
04/19/2019 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):
ariana@matterlightip.com
s tephen @matterlightip.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte GLYN BARRY SMITH 1
Appeal2018-001284
Application 14/162,698
Technology Center 3600
Before CAROLYN D. THOMAS, JOSEPH P. LENTIVECH, and
SCOTT RAEVSKY, Administrative Patent Judges.
THOMAS, Administrative Patent Judge.
DECISION ON APPEAL
Appellant seeks our review under 35 U.S.C. § 134(a) of the
Examiner's Final Rejection of claims 1-10, all the pending claims in the
present application. Claims 11 and 12 are canceled (see Claims Appendix).
We have jurisdiction over the appeal under 35 U.S.C. § 6(b).
We AFFIRM.
The present invention relates generally to processing transactions
initiated by users of mobile devices (see Abstract).
1 Appellant names Boku, Inc. as the real party in interest (App. Br. 3).
Appeal2018-001284
Application 14/162,698
Claim 1 is illustrative:
1. A computer-implemented method, comprising:
connecting an interchange computer system to a data
storage facility, a telecommunication carrier and first and second
mobile phones;
storing, by the interchange computer system in the data
storage facility, a first account that is identified by a first phone
number and a second account that is identified by a [ second] phone
number;
receiving, by the interchange computer system, a
payment request from a first mobile phone having the first phone
number including a payee and an amount;
in response to receiving the payment request initiated by
the first mobile phone of the first phone number, transmitting, by the
interchange computer system, a message to the payee at a second
mobile phone at the second phone number to confirm the payment
request;
receiving, by the interchange computer system, a
confirmation from the second mobile phone in response to the
message transmitted to the second mobile phone at the second phone
number to confirm the payment request;
in response to receiving the confirmation from the second
mobile phone at the second phone number, approving, by the
interchange computer system, the payment request;
in response to the approval of the payment request based
on the comparison, transmitting, by the interchange computer system,
at least one message to the telecommunication carrier to bill an
account at the telecommunication carrier corresponding to the second
phone number for at least the amount;
receiving, by the interchange computer system, payment
for at least the amount from the telecommunication carrier;
identifying the first account by matching the first phone
number of the first mobile phone to the first phone number identifying
the first account;
identifying the second account by matching the second
phone number of the second mobile phone to the second phone
number identifying the second account; and
in response to the approval of the payment request,
transferring, by the interchange computer system, funds for at least the
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amount from the first account identified by the first phone number to
the second account identified by the second phone number.
Appellant appeals the following rejections:
RI. Claims 1-10 are rejected under 35 U.S.C. § 101 because the
claimed invention is directed to patent-ineligible subject matter (Final
Act. 3---6).
We review the appealed rejections for error based upon the issues
identified by Appellant, and in light of the arguments and evidence produced
thereon. Ex parte Frye, 94 USPQ2d 1072, 107 5 (BP AI 2010) (precedential).
ANALYSIS
Rejection under§ 1 OJ
An invention is patent-eligible if it claims a "new and useful process,
machine, manufacture, or composition of matter." 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: "[l]aws of nature, natural phenomena, and abstract
ideas" are not patentable. E.g., Alice Corp. v. CLS Bank Int'!, 573 U.S. 208,
216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court's two-step framework, described in Mayo
and Alice. Id. at 217-18 ( citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75-77 (2012)). In accordance with the framework,
we first determine what concept the claim is "directed to." See Alice, 573
U.S. at 219 ("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."); see also Bilski v. Kappas, 561 U.S. 593, 611 (2010) ("Claims 1 and 4
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Application 14/162,698
in petitioners' application explain the basic concept of hedging, or protecting
against risk."). For example, concepts determined to be abstract ideas, and
thus patent ineligible, include certain methods of organizing human activity,
such as fundamental economic practices (Alice, 573 U.S. at 219-20; Bilski,
561 U.S. at 611); mathematical formulas (Parker v. Flook, 437 U.S. 584,
594--95 (1978)); and mental processes (Gottschalkv. Benson, 409 U.S. 63,
69 (1972)).
Recently, the USPTO published revised guidance on the application
of§ 101. USPTO's 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) ("Memorandum"). Under the
Memorandum "Step 2A," the office first looks 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)). 84 Fed. Reg. at
51-52, 55.
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, does the Office then
(pursuant to the Guidance "Step 2B") look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that are 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. 84 Fed. Reg. at 56.
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With respect to independent method claim 1, and similarly, the
computer-readable storage media claim 10, the Examiner determines that the
claims are at least "directed to a fundamental economic practice and a
method of organizing human activities" (Final Act. 3). The Examiner
further notes that "[a]ll the steps in the claims are directed to a series of
behavioral activities ... which, when viewed individually and in
combination, constitute an abstract idea of certain methods of organizing
human activity" (id. at 4 ).
We determine that the following recited claim limitations are part of
the abstract idea: (1) "storing ... a first ... and a second account," (2)
"receiving a payment request," (3) "transmitting ... a message,"
( 4) "receiving ... a confirmation," (5) "approving ... the payment request,"
( 6) "transmitting ... at least one message," (7) "receiving ... payment,"
(8) "identifying the first account," (9) "identifying the second account," and
(10) "transferring ... funds." These limitations, under their broadest
reasonable interpretation, recite fundamental economic practices akin to
hedging, insurance, and mitigating risk because the limitations all recite
operations that would ordinarily take place in an online commercial
environment. Alice, 573 U.S. at 219-20 (concluding that use of a third party
to mediate settlement risk is a "fundamental economic practice" and thus an
abstract idea); id. (describing the concept of risk hedging identified as an
abstract idea in Bilski as "a method of organizing human activity"); Bilski,
561 U.S. at 611-12 (concluding that hedging is a "fundamental economic
practice" and therefore an abstract idea); Bancorp, 687 F.3d at 1280
( concluding that "managing a stable value protected life insurance policy by
performing calculations and manipulating the results" is an abstract idea);
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Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378-
79 (Fed. Cir. 2017) (holding that concept of "local processing of payments
for remotely purchased goods" is a "fundamental economic practice, which
Alice made clear is, without more, outside the patent system."); OIP Techs.,
Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362---63 (Fed. Cir. 2015)
( concluding that claimed concept of "offer-based price optimization" is an
abstract idea "similar to other 'fundamental economic concepts' found to be
abstract ideas by the Supreme Court and this court"). Similarly, Appellant's
Specification indicates that the present invention is drawn "to facilitat[ing]
online transactions" (Spec. ,r 2).
Additionally, at least the following decisions from our reviewing court
have found many types of fundamental economic practices patent ineligible:
OIP Technologies, Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir.
2015), cert. denied, 136 S. Ct. 701 (mem) (2015) (offer-based price
optimization); buySafe, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014)
(transaction guaranty); Personalized Media Communications, L.L.C. v.
Amazon, Inc., 671 F. App'x. 777 (mem) (Fed. Cir. 2016) (receiving
instructions for ordering); Macropoint, LLC v. Fourkites, Inc., 671 F. App'x
780 (mem) (Fed. Cir. 2016) (tracking freight); Wireless Media Innovations,
LLC v. Maher Terminals, LLC, 636 F. Appx. 1014 (mem) (Fed. Cir. 2016)
(monitoring shipping containers); America's Collectibles Network Inc. v.
Jewelry Channel, Inc. USA, 672 F. App'x 997 (mem) (Fed. Cir. 2017)
(conducting reverse auction by adjusting price and inventory); and Easy Web
Innovations, LLC v. Twitter, Inc., No. 2016-2066, 2017 WL 1969492 (Fed.
Cir. 2017) (receiving, authenticating, and publishing data).
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Here, Appellant does not directly challenge whether claim 1 is
directed to an abstract idea, but instead emphasizes that "it [is] relevant to
ask whether the claims are directed to an improvement to computer
functionality versus being directed to an abstract idea" (App. Br. 14), and
that the claims "are directed to a specific improvement to the way computers
operate" (id. at 15). This argument is will addressed below with respect to
prong (2).
Therefore, for at least the aforementioned reasons, we agree with the
Examiner that claim 1 is directed to an abstract idea, which we conclude is
certain methods of organizing human activity-"a fundamental economic
practice."
Under the Memorandum prong (2), we now must determine if
additional elements in the claims integrate the judicial exception into a
practical application (see MPEP § 2106.0S(a}-(c), (e}-(h)).
MPEP § 2106.0S(a), entitled "Improvements to the Functioning of a
Computer or To Any Other Technology or Technical Field," states, "In
determining patent eligibility, examiners should consider whether the claim
'purport(s) to improve the functioning of the computer itself" or "'any other
technology or technical field."' MPEP § 2106.0S(a).
With respect to improving the functionality of a computer, Appellant
contends that the claims "are specifically directed to phone authorization
functionality and a protocol and payment functionality so as to make a
payment following an authorization of first and second mobile phones at
first and second phone numbers" (App. Br. 17) ( emphasis omitted), which is
"bolstered by the specification's teachings that the claimed invention
achieves other benefits over conventional systems" (id. at 18 (citing Spec. ,r,r
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64, 97)). Appellant further contends that the claims recite "a specific type of
process designed to improve the way a computer functions" (id. at 20).
However, relevant to the claimed features, Appellant's Specification
merely discloses:
For example, from the transaction history (127) the interchange
( 101) may identify a pattern of prior payment requests made via
the phone number ( 123) and match subsequent requests with
the identified pattern. When a subsequent request matches the
pattern, the interchange ( 101) may skip the communication with
the mobile phone (117) at the phone number (123) ... Skipping
such a communication between the payment request and the
payment operation can reduce the time period for payment
processing and improved user experience.
(Spec. ,r 64 ). However, simply using a computer to gain efficiency over a
manual process is not sufficient to distinguish a claim from a patent-
ineligible abstract idea. According to OIP Techs, "relying on a computer to
perform routine tasks more quickly or more accurately is insufficient to
render a claim patent eligible." OIP Techs., Inc. v. Amazon.com, Inc., 788
F.3d 1359, 1363 (Fed. Cir. 2015).
Furthermore, in McRO, the Federal Circuit concluded that the claim,
when considered as a whole, was directed to a "technological improvement
over the existing, manual 3-D animation techniques" through the "use of
limited rules specifically designed to achieve an improved technological
result in conventional industry practice." McRO, Inc. v. Bandai Namco
Games Am. Inc., 837 F.3d 1299, 1316 (Fed. Cir. 2016).
Specifically, the Federal Circuit found that the claimed rules allowed
computers to produce accurate and realistic lip synchronization and facial
expressions in animated characters that previously could only be produced
by human animators; and the rules were limiting because they defined
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morph weight sets as a function of phoneme sub-sequences. Id. at 1313
( citations omitted).
In contrast, here, Appellant has not identified any analogous
improvement attributable to the claimed invention. Although the claimed
processing of transactions initiated by mobile phones may reduce the time
period for processing a subsequent payment request, no improvement in the
functionality of a computer has been illustrated. Thus, we agree with the
Examiner that "[ s ]uch steps involve merely using ... known computer
technologies or adding insignificant extra-solution activity to the judicial
exception" (Ans. 4).
Also, in Enfish, for example, the court noted that "[ s ]oftware can
make non-abstract improvements to computer technology just as hardware
improvements can." Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335
(Fed. Cir. 2016). The court put the question as being "whether the focus of
the claims is on [a] specific asserted improvement in computer capabilities
... or, instead, on a process that qualifies as an 'abstract idea' for which
computers are invoked merely as a tool." Id. at 1335-36. In Enfish, the
court found that the "plain focus of the claims" there was on "an
improvement to computer functionality itself, not on economic or other tasks
for which a computer is used in its ordinary capacity." Id. at 1336.
Here, Appellant has not adequately explained or pointed to anything
in claim 1 that resembles the inventive self-referential data structure at issue
in Enfish, e.g., an improvement to computer functionality itself rather than
an improvement to economic tasks. Appellant also does not direct our
attention to anything in the Specification to indicate that the invention
provides an improvement in a technical functionality. Instead, it appears
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that claim 1 is merely a process that qualifies as an "abstract idea" for which
an interchange computer system is invoked merely as a tool to transmit and
confirm information, i.e., the payment request. We agree with the Examiner
that "each of these particular functions fall under ... computer functions that
the courts already recognize as merely generic'" (Final Act. 5).
As recognized by the Supreme Court, "the mere recitation of a generic
computer cannot transform a patent-ineligible abstract idea into a patent-
eligible invention." See Alice, 134 S. Ct. at 2359 (concluding claims
"simply instruct[ing] the practitioner to implement the abstract idea of
intermediated settlement on a generic computer" are not patent eligible).
For at least the reasons noted supra, we determine that claim 1
(1) recites a judicial exception and (2) does not integrate that exception into
a practical application. Finally, we look to whether claim 1 adds specific
limitation beyond the judicial exception that are not "well-understood,
routine, conventional" in the field (see MPEP § 2106.05(d)).
Regarding the claimed computer system, data storage facility,
telecommunication carrier, and first and second mobile phones, we note that
Appellant's Specification describes generic computer components,
performing generic computer functions that are routine and conventional,
i.e., the normal and basic functions of a computer. See, e.g., Spec. ,r 12
("The interchange includes a common format processor."). Accordingly,
Appellant has not adequately explained how claim 1 is performed such that
it is not a routine and conventional function of a generic computer.
Because Appellant's independent claim 1 is directed to a patent-
ineligible abstract concept, does not include additional elements that
integrate the judicial exception into a practical application, and does not add
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a specific limitation beyond the judicial exception that is not "well-
understood, routine, and conventional," we sustain the Examiner's rejection
of the claims under 35 U.S.C. § 101 as being directed to non-statutory
subject matter in light of Alice, its' progeny, and the Revised 101 Guidance
(Memorandum).
Accordingly, Appellant's contentions are unpersuasive as to error in
the rejection under 35 U.S.C. § 101.
DECISION
We affirm the Examiner's § 101 rejection.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv).
AFFIRMED
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