Fordyce, Edward W. et al.

Patent Trials and Appeals Board

Sep 29, 2020

2018009111 (P.T.A.B. Sep. 29, 2020)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
12/896,632 10/01/2010 Edward W. Fordyce III 8223-1706151 1185
144885 7590 09/29/2020
The Webb Law Firm / Visa International
ONE GATEWAY CENTER
420 FT. DUQUESNE BLVD, SUITE 1200
PITTSBURGH, PA 15222
EXAMINER
DURAN, ARTHUR D
ART UNIT PAPER NUMBER
3622
NOTIFICATION DATE DELIVERY MODE
09/29/2020 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):
patents@webblaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte EDWARD W. FORDYCE III, LEIGH AMARO,
MICHELLE ENG WINTERS, ALFRED WILLIAM GRIGGS,
LAURA DIGIOACCHINO, DIANE C. SALMON, KEVIN PAUL SIEGEL,
KAUSHIK SUBRAMANIAN, and JAMES ALAN VONDERHEIDE
____________

Appeal 2018-0091111
Application 12/896,6322
Technology Center 3600
____________

Before MURRIEL E. CRAWFORD, JOSEPH A. FISCHETTI, and
TARA L. HUTCHINGS, Administrative Patent Judges.

HUTCHINGS, Administrative Patent Judge.

DECISION ON APPEAL

1 Our Decision references Appellant’s Specification (“Spec.,” filed Oct. 1,
2010), Appeal Brief (“Appeal Br.,” filed June 20, 2018), Reply Brief
(“Reply Br.,” filed Sept. 26, 2018), the Examiner’s Answer (“Ans.,” mailed
July 27, 2018), and Non-Final Office Action (“Non-Final Act.,” mailed Jan.
22, 2018).
2 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. Appellant indicates that the real party in interest is “Visa
U.S.A. Inc.” Appeal Br. 3.
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STATEMENT OF THE CASE
Appellant3 appeals under 35 U.S.C. § 134(a) from the Examiner’s
rejection of claims 1, 3–14, 16, 17, and 19. We have jurisdiction under
35 U.S.C. § 6(b).
We REVERSE and ENTER A NEW GROUND OF REJECTION
pursuant to our authority under 37 C.F.R. § 41.50(b).

CLAIMED INVENTION
Appellant’s claimed invention “relate[s] to the processing of
transaction data, such as records of payments made via credit cards, debit
cards, prepaid cards, etc., and/or providing information based on the
processing of the transaction data.” Spec. ¶ 2.
Claims 1, 16, and 17 are the independent claims on appeal. Claim 16,
reproduced below with bracketed notations added, is illustrative of the
claimed subject matter:
16. A non-transitory computer storage medium storing
instructions which, when executed on a computer system, cause
the computer system to perform a method, the method
comprising:
[(a)] receiving, in a computing apparatus coupled to a
transaction handler of an electronic payment processing
network, an authorization request from a transaction terminal
via an acquirer processor of the electronic payment processing

3 We use the term “Appellant” to refer to “applicant” as defined in 37 C.F.R.
§ 1.42. Our Decision references Appellant’s Specification (“Spec.,” filed
Oct. 1, 2010), Appeal Brief (“Appeal Br.,” filed June 20, 2018), Reply Brief
(“Reply Br.,” filed Sept. 26, 2018), the Examiner’s Answer (“Ans.,” mailed
July 27, 2018), and Non-Final Office Action (“Non-Final Act.,” mailed Jan.
22, 2018). Appellant identifies Visa U.S.A. as the real party in interest.
Appeal Br. 3.
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network, the authorization request identifying payment
information including:
[(1)] an account identifier of a customer issued by
an issuer,
[(2)] an amount of a payment to be authorized
using the account identifier, and
[(3)] an identification of a merchant account to
receive the payment, wherein:
[(4)] the authorization request is processed
by the transaction handler for authorization of the
payment from an issuer processor to the acquirer
processor,
[(5)] the issuer processor is to make the
payment on behalf of the customer from a
consumer account identified by the account
identifier, and
[(6)] the acquirer processor is to receive the
payment on behalf of a merchant in the merchant
account,
[7] wherein the computing apparatus includes:
[(i)] the transaction handler;
[(ii)] a data warehouse coupled with the
transaction handler to store transaction data
recording payment transactions processed by the
transaction handler; and
[(iii)] a portal coupled to the transaction
handler and configured to communicate with
transaction terminals using a communication
channel that is outside of the electronic payment
processing network;
[(b)] during the transaction handler processing the
authorization request for the payment and prior to the
transaction handler providing an authorization response for the
authorization request,
[(1)] determining, by the computing apparatus,
whether the account identifier is associated with a loyalty
program;
[(2)] in response to a determination that the
account identifier is associated with the loyalty program,
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[(i)] embedding, by the transaction handler,
a request for purchase details of the payment in the
authorization response to the authorization request,
[(ii)] transmitting, by the transaction handler
via the electronic payment processing network, the
authorization response to the transaction terminal,
[(iii)] wherein the request for purchase
details embedded in the authorization response
causes the transaction terminal to use the
communication channel outside of the electronic
payment processing network to transmit the
purchase details of the payment to the portal;
[(c)] receiving, in the portal via the communication
channel that is outside of the electronic payment processing
network, the purchase details of the payment authorized via the
authorization request, wherein the purchase details provide
information in addition to the payment information identified in
the authorization request; and
[(d)] determining, by the computing apparatus, benefits
to be awarded to the customer according to the loyalty program
based on the purchase details received in the portal via the
communication channel that is outside of the electronic
payment processing network.

REJECTION
Claims 1, 3–14, 16, 17, and 19 are rejected under 35 U.S.C.
§ 103 as unpatentable over Fordyce (US 2008/0059306 A1, pub. Mar. 6,
2008) and Degliantoni (US 2008/0217397 A1, pub. Sept. 11, 2008).

ANALYSIS
Obviousness
We are persuaded by Appellant’s argument that the Examiner erred in
rejecting independent claims 1, 16, and 17 under 35 U.S.C. § 103, because
Fordyce and Degliantoni do not teach or suggest “embedding, by the
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transaction handler, a request for purchase details of the payment in the
authorization response to the authorization request,” as recited in claim 16,
limitation (b)(2)(i), and similarly recited in claims 1 and 17. Appeal Br. 13–
19; see also Reply Br. 2–4. The Examiner finds that Fordyce teaches
embedding a request for purchase details of the payment. Non-Final Act. 9
(citing Fordyce ¶¶ 229, 232, 234, 261). The Examiner acknowledges that
Fordyce does not teach that the embedded request for purchase details is in
the authorization response to the authorization request. Id. And the
Examiner relies on Degliantoni for this aspect of the claim language. Id. at
9–10 (citing Degliantoni, ¶¶ 38, 39, 42, 49, 58).
As an initial matter, we disagree with the Examiner’s finding that the
cited portions of Fordyce teach embedding a request for purchase details.
Paragraph 229 describes exemplary global unique identifiers (“GUIDs”) for
merchants participating in a loyalty program. Paragraph 232 identifies
exemplary transaction data used to determine whether a transaction qualifies
for an incentive of the loyalty program. Paragraph 234 describes exemplary
data characterizing the transaction. Paragraph 261 identifies exemplary
portable devices and provides that each portable consumer device can
include “a loyalty module with a computer chip with dedicated hardware,
software, [or] embedded software.”
The Examiner explains that paragraphs 229, 232, and 234 of Fordyce
provide a “request for purchase details for the loyalty/awards program [that]
is [sic] more details than a mere payment authorization.” Non-Final Act. 9.
The Examiner further finds that paragraph 261 “discloses using embedding.”
Id. And the Examiner reasons that the claimed term “embedding has few
details and is open to a broad interpretation.” Id.
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Yet, while paragraphs 229, 232, and 234 of Fordyce describe that
using transaction data to determine whether a transaction qualifies for the
incentive of the loyalty program, the paragraphs do not disclose the claimed
“request for purchase transaction data,” as recited in claim 16, limitation
(b)(2)(i), and similarly recited in claims 1 and 17, much less embedding the
request. Fordyce’s description at paragraph 261 of a portable consumer
portable consumer device having a loyalty module with embedded software
does not remedy this deficiency.
We also disagree with the Examiner’s finding that Degliantoni teaches
embedding the request for purchase details in the authorization response to
the authorization request. Degliantoni teaches that an acquirer (i.e., a
merchant bank) receives credit card transaction data from a merchant’s
point-of-sale device and determines whether the transaction is eligible for an
award. Degliantoni ¶¶ 38, 42. The acquirer determines whether the
transaction is eligible for an award. Id. If so, the acquirer encodes
promotion data within the payment authorization request for transmission to
the issuer. Id. The promotion data embedded in the payment authorization
request includes the amount of the award. Id. ¶ 42. If the issuer approves
the transaction, then the issuer could include encode additional award-
related information into the payment authorization response, such as a
reduction in the purchase amount, for transmission to the acquirer.
Id. ¶¶ 43–44. The acquirer sends the payment authorization response, which
includes the promotion data, to the merchant. Id. ¶ 45. In another
embodiment, the issuer, rather than the acquirer, determines that a
transaction is eligible for an award and encodes promotion data within the
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payment authorization response to the acquirer. Id. ¶ 49. The promotion
data reflects the amount of award. Id. ¶ 58.
Thus, in each embodiment Degliantoni teaches encoding promotion
data, such as an amount of an award, not a request for purchase details of the
payment. The Examiner does not establish that a combination of Fordyce
and Degliantoni teaches or suggests “embedding, by the transaction handler,
a request for purchase details of the payment in the authorization response to
the authorization request,” as recited in claim 16, and similarly recited in
claims 1 and 17. Therefore, we reverse the rejection under § 103 of
independent claims 1, 16, and 17, and their dependent claims.
NEW GROUND OF REJECTION
Patent-Ineligible Subject Matter
Pursuant to our discretionary authority under 37 C.F.R. § 41.50(b), we
newly reject claims 1, 3–14, 16, 17, and 19 under 35 U.S.C. § 101 for being
directed to a judicial exception to patent-eligible subject matter without
reciting significantly more. We select claim 16 as representative.
Under 35 U.S.C. § 101, an invention is patent eligible if it claims a
“new and useful process, machine, manufacture, or composition of matter.”
35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101
to include an implicit exception: “[l]aws of nature, natural phenomena, and
abstract ideas” are not patentable. Alice Corp. v. CLS Bank Int’l, 573 U.S.
208, 216 (2014).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66 (2012), “for distinguishing patents that claim
laws of nature, natural phenomena, and abstract ideas from those that claim
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patent-eligible applications of those concepts.” Alice Corp., 573 U.S. at 217.
The first step in that analysis is to “determine whether the claims at issue are
directed to one of those patent-ineligible concepts.” Id. If the claims are not
directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry
ends. Otherwise, the inquiry proceeds to the second step where the elements
of the claims are considered “individually and ‘as an ordered combination’”
to determine whether there are additional elements that “‘transform the
nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo,
566 U.S. at 79, 78). This is “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. at 217–18 (alteration in original).
The U.S. Patent and Trademark Office (the “USPTO”) published
revised guidance for use by USPTO personnel in evaluating subject matter
eligibility under 35 U.S.C. § 101. 2019 REVISED PATENT SUBJECT MATTER
ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50, 57 (Jan. 7, 2019) (the “Revised
Guidance”). That guidance revised the USPTO’s examination procedure
with respect to the first step of the Mayo/Alice framework by
(1) “[p]roviding groupings of subject matter that [are] considered an abstract
idea”; and (2) clarifying that a claim is not “directed to” a judicial exception
if the judicial exception is integrated into a practical application of that
exception. Id. at 50. The 2019 Revised Guidance, by its terms, applies to all
applications, and to all patents resulting from applications, filed before, on,
or after January 7, 2019. Id.4

4 The USPTO issued an update on October 17, 2019 (the “October 2019
Update: Subject Matter Eligibility,” available at https://www.uspto.gov/sites/
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Step One of the Mayo/Alice Framework (Revised Guidance, Step 2A)
The first step in the Mayo/Alice framework, as mentioned above, is to
determine whether the claims at issue are “directed to” a patent-ineligible
concept, e.g., an abstract idea. Alice Corp., 573 U.S. at 217. This first step,
as set forth in the 2019 Revised Guidance (i.e., Step 2A), is a two-prong test;
in Step 2A, Prong One, we look to whether the claim recites a judicial
exception, e.g., one of the following three groupings of abstract ideas:
(1) mathematical concepts; (2) certain methods of organizing human
activity, e.g., fundamental economic principles or practices, commercial or
legal interactions; and (3) mental processes. 2019 Revised Guidance,
84 Fed. Reg. at 54. If so, we next consider whether the claim includes
additional elements, beyond the judicial exception, that “integrate the
[judicial] exception into a practical application,” i.e., that apply, rely on, or
use the judicial exception in a manner that imposes a meaningful limit on the
judicial exception, such that the claim is more than a drafting effort designed
to monopolize the judicial exception (“Step 2A, Prong Two”). Id. at 54–55.
Only if the claim (1) recites a judicial exception and (2) does not integrate
that exception into a practical application do we conclude that the claim is
“directed to” the judicial exception, e.g., an abstract idea. Id.
The Federal Circuit has explained that “the ‘directed to’ inquiry
applies a stage-one filter to claims, considered in light of the specification,
based on whether ‘their character as a whole is directed to excluded subject
matter.’” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir.
2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d

default/files/documents/peg_oct_2019_update.pdf) (the “October 2019
Update”) clarifying the Revised Guidance in response to public comments.
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1343, 1346 (Fed. Cir. 2015)). It asks whether the focus of the claims is on a
specific improvement in relevant technology or on a process that itself
qualifies as an “abstract idea” for which computers are invoked merely as a
tool. See id. at 1335–36. Here, it is clear from the Specification (including
the claim language) that claim 16 focuses on an abstract idea, and not on any
improvement to technology and/or a technical field.
The Specification is titled “SYSTEMS AND METHODS TO
PROVIDE LOYALTY PROGRAMS,” and states that the “present
disclosure relate[s] to the processing of transaction data, such as records of
payments made via credit cards, debit cards, prepaid cards, etc., and/or
providing information based on the processing of the transaction data.”
Spec. ¶ 2. In the Background section, the Specification describes,
“[m]illions of transactions occur daily through the use of payment cards,
such as credit cards, debit cards, prepaid cards, etc.” Id. ¶ 3.
“Corresponding records of the transactions are recorded in databases for
settlement and financial recordkeeping (e.g., to meet the requirements of
government regulations).” Id. Such data can be “mined and analyzed for
trends, statistics, and other analyses” and “for specific advertising goals,
such as to provide targeted offers to account holders.” Id. The Specification
identifies and incorporates numerous patents and patent applications related
generally to commercial interactions, such as advertising and marketing,
including targeted offers, advertising, and loyalty programs, analyzing
purchase behavior, evaluating advertising and marketing using transaction
data, facilitating transactions with real time award determinations, analyzing
transactional data, predicting future transactions and predictive modeling,
mobile coupons, rewards, redeeming offers, and identifying a consumer
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account based on user data, among others. See, e.g., id. ¶¶ 4–11, 48, 58, 60–
62, 71–73, 103, 117, 121, 123–26, 132, 135, 217–25, 243, 267, 280, 283,
294, 362, 400, 401.
The Specification describes various arrangements for tracking user
behavior, analyzing the data to manage advertisement campaigns, and
analyzing response profitability. See, e.g., id. ¶¶ 45, 63–362. In the section
of the Specification entitled “LOYALTY PROGRAM,” the Specification
describes a transaction handler as hosting loyalty programs on behalf of
various entities, such as merchants, retailers, service providers, and issuers.
Id. ¶ 138; see also id. ¶ 30. Hosted loyalty programs include “ongoing
programs that accumulate benefits for customers (e.g., points, miles, cash
back), and/or programs that provide one time benefits or limited time
benefits (e.g., rewards, discounts, incentives).” Id. ¶ 152; see also id. ¶¶ 156
(describing benefits of award programs as “discounts, rewards, incentives,
cash back, gifts, coupons, and/or privileges”), 159 (describing that members
of a loyalty program may have member privileges, such as access services,
products, opportunities, facilities, discounts, and permissions that are
reserved for members), 162 (describing that benefits include reward points,
cash back, and levels of discounts).
The system includes, in part, a centralized data warehouse coupled to
the transaction handler and a portal. See id. ¶¶ 38, 183, Figs. 4, 10. The
transaction handler generates transaction data from processing the user’s
financial transactions made by financial transaction cards, such as credit
cards. Id. ¶¶ 35, 42. The data warehouse stores the transaction data, account
data (i.e., data about the account holders involved in the transactions), and
other data. See id. ¶¶ 38, 41, Figs. 9–10. The portal provides data or
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information derived from the transaction data in response to a query request
from a third party or as an alert or notification message. Id. ¶ 38.
Account data for providing loyalty programs includes a user’s account
identifier and information about the loyalty program, such as a set of loyalty
program rules specifying conditions based on transaction data and
transaction profiles, a loyalty benefit offeror linked with the set of loyalty
rules, and a loyalty record for the loyalty program activities associated with
the account identifier. Id. ¶¶ 153, 186, Fig. 8.
The centralized data warehouse associates an account identifier of the
user, such as an account number of a financial payment card, with a loyalty
program, indicating the user’s membership in the loyalty program. Id.
¶¶ 139, 159. Because the account number of a financial transaction card is
associated with a loyalty program in the data warehouse, the financial
payment card serves as a loyalty card when processing a payment
transaction involving the card. Id. ¶ 145; see also id. ¶ 30.
Thus, the transaction handler can update the loyalty record associated
with the account identifier when events satisfy the program rules. Id. ¶ 162.
The accumulated benefits can be redeemed to offset or reduce a purchase
price when the user is performing a payment transaction that satisfies loyalty
program rules. Id. ¶ 163; see also id. ¶ 180 (“[W]hen the user (101) is
making a payment for a purchase from a merchant, a reward offer can be
provided to the user (101) based on loyalty program rules (185) and the
loyalty record (187) associated with the account identifier (181) of the user
(101)[.]”).
According to the Specification, hosting the loyalty programs by the
transaction handler benefits both consumers and merchants. Namely,
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“consumers do not have to carry multiple, separate loyalty cards (e.g., one
for each merchant that offers a loyalty program); and merchants do not have
to incur a large setup and investment fee to establish the loyalty program.”
Id. ¶ 146; see also id. ¶ 148 (describing that a transaction handler hosting
loyalty programs “allow[s] the consumers to carry fewer [loyalty] cards”).
The arrangement also allows “flexible awards” and “new offerings, such as
merchant cross-offerings or bundling of loyalty offerings” (id. ¶ 147) and
“may provide more data to the merchants than traditional loyalty programs”
(id. ¶ 148). The invention seeks to enable third parties to “drive [consumer]
behavior changes [through deliverance of the awards or incentives of the
hosted loyalty program] without the hassle of loyalty card creation.” Id.
¶ 147. Because the arrangement allows a reward offer to be provided to the
user when the user is making a payment for a purchase from a merchant, the
Specification describes that “the user effort for redeeming the reward points
can be reduced; and the user experience can be improved.” Id. ¶ 180.
In operation, a transaction handler receives an authorization request
identifying payment information from an acquirer processor of a merchant
for an electronic payment. Id. ¶ 192. The transaction handler searches the
data warehouse to determine whether the account identifier contained in the
authorization request is associated with a loyalty program. Id. ¶¶ 192–93. If
so, the transaction handler or the portal requests purchase details. Id. ¶ 193.
For example, the transaction handler embeds a request for purchase details
in the authorization response. Id. ¶ 194, Fig. 9. No particular manner for
embedding is described. See id.
In one embodiment, in response to the received request for purchase
details embedded in the authorization response, the transaction terminal of
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the merchant provides purchase details in the authorization response sent to
the transaction handler. Id. ¶ 262; see also id. ¶¶ 195–96 (describing that the
merchant saves purchase details in a file with purchase details of
transactions and the merchant’s transaction terminal sends purchase details
to the transaction handler through an acquirer processor in control of the
merchant account), Fig. 10. In another embodiment, the merchant instead
sends purchase details to the transaction handler via a portal of the
transaction handler. Id. ¶ 263, Fig. 9. For example, the merchant saves
purchase details in a file and submits the purchase details to the portal at the
time of settlement. Id. ¶ 196. Providing the purchase details via the portal
“avoid[s] slowing down the transaction handler (103).” Id. ¶ 197. The
purchase details identify items purchased and their prices, and are used to
determine the benefits to award to the account identifier. Id. ¶ 198.
For example, the transaction handler (or issuer processor) processes
the payment transaction, identifies offers that are qualified for redemption in
light of the purchase details, and provides the benefit of the qualified offers
to the user. Id. ¶ 247. In this way, “the benefit of the offer is fulfilled via
the transaction handler (103) (or the issuer processor (145)) without the user
(101) having to do anything special at and/or after the time of checkout,
other than paying with the consumer account (146) of the user (101) . . . that
is enrolled in the program for the automation of offer redemption.” Id.
¶ 248. The benefit may be applied with statement credits. Id. ¶¶ 199, 247.
Consistent with this disclosure, claim 16 recites a non-transitory
computer storage medium storing instructions which, when executed on a
computer system, cause the computer system to perform a method
comprising: (a) “receiving . . . an authorization request . . ., the authorization
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request identifying payment information including:” (1) “an account
identifier of a customer issued by an issuer,” (2) “an amount of a payment to
be authorized using the account identifier,” and (3) “an identification of a
merchant account to receive the payment . . .”; (b) “during the . . . processing
[of] the authorization request for the payment and prior to . . . providing an
authorization response for the authorization request”: (1) “determining . . .
whether the account identifier is associated with a loyalty program”; and
(2) “in response to a determination that the account identifier is associated
with the loyalty program”: (i) “embedding . . . a request for purchase details
of the payment in the authorization response to the authorization request,”
and (ii) “transmitting . . . the authorization response . . . .”; (c) “receiving . . .
the purchase details of the payment authorized via the authorization request,
wherein the purchase details provide information in addition to the payment
information identified in the authorization request”; and (d) “determining . . .
benefits to be awarded to the customer according to the loyalty program
based on the purchase details received . . . .”.
These limitations, when given their broadest reasonable interpretation,
recite steps performed during payment processing for determining whether a
customer’s account identifier is associated with a loyalty program of the
merchant, and, if so, determining benefits to be awarded to the customer
according to the loyalty program based on purchase details of the payment
transaction. Simply put, claim 1 recites a commercial interaction, i.e.,
marketing or sales activities, which is a method of organizing human activity
and, therefore, an abstract idea. See Revised Guidance, 84 Fed. Reg. at 52.
See also Loyalty Conversion Sys. Corp. v. Am. Airlines, Inc., 66 F. Supp. 3d
829, 835 (E.D. Tex. 2014) (Bryson, J.) (holding that claims directed to
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“converting one vendor’s loyalty award credits into loyalty award credits of
another vendor” were not fundamentally different from the financial
transactions at issue in Bilski and Alice); Kroy IP Holdings, LLC v. Safeway,
Inc., 107 F. Supp. 3d 677, 681, 691 (E.D. Tex. 2015) (Bryson, J.), aff’d,
639 F. App’x 637 (Fed. Cir. 2016) (holding that claims directed to
“conducting in[c]entive programs and fulfilling the awards in those
programs,” were “indistinguishable in principle from the kinds of financial
or business operations that were at issue in Bilski and Alice”).
Having concluded that claim 16 recites a judicial exception, i.e., an
abstract idea (Step 2A, Prong One), we next consider whether the claim
recites additional elements that integrate the judicial exception into a
practical application (Step 2A, Prong Two).
Beyond the abstract idea, claim 16 additionally recites “a computing
apparatus coupled to a transaction handler of an electronic payment
processing network” (limitation (a)), that the authorization request is “from a
transaction terminal via an acquirer processor of the electronic payment
processing network” (limitation (a)), the authorization request “is processed
by the transaction handler for authorization of the payment from an issuer
processor to the acquirer processor” (limitation (a)(4)), “the issuer processor
is to make the payment on behalf of the customer from a consumer account
identified by the account identifier” (limitation (a)(5)), and “the acquirer
processor is to receive the payment on behalf of a merchant in the merchant
account” (limitation (a)(6). Claim 16 also additionally recites that the
claimed computing apparatus includes “the transaction handler”
(limitation (a)(7)(i)), “a data warehouse coupled with the transaction handler
to store transaction data recording payment transactions processed by the
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transaction handler” (limitation (a)(7)(ii)), and “a portal coupled to the
transaction handler and configured to communicate with transaction
terminals using a communication channel that is outside of the electronic
payment processing network” (limitation (a)(7)(iii)). Claim 16 also
additionally recites that the “transaction handler” embeds the request for
purchase details (limitation (b)(2)(i)) and transmits the authorization
response “via the electronic payment processing network . . . to the
transaction terminal” (limitation (b)(2)(ii)). The request for purchase details
“causes the transaction terminal to use the communication channel outside
of the electronic payment processing network to transmit the purchase
details of the payment to the portal” (limitation (b)(2)(iii)). The purchase
details are received “in the portal via the communication channel that is
outside of the electronic payment processing network” (limitation (c)). And
the benefits to be awarded to the customer are determined “by the computing
apparatus” and based on the purchase details “receiving, in the portal via the
communication channel that is outside of the electronic payment processing
network” (limitation (d)).
These elements are recited at a high level of generality, i.e., as generic
computer components performing generic computer functions, and generally
link the use of the abstract idea to a particular technological environment
(i.e., a computing apparatus coupled to a transaction handler of an electronic
payment processing network, an issuer processor that makes a payment on
behalf of a customer, an acquirer processor that receives payment on behalf
of a merchant, a data warehouse coupled with the transaction handler, a
portal coupled to the transaction handler and configured to communicate
with transaction handlers using a communication channel that is outside of
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the electronic payment processing network) or field of use (electronic
payment processing). See, e.g., Spec. ¶ 442 (describing that various
modules or components, such as the transaction handler, transaction
terminal, portal, issuer processor, acquirer processor, “can be implemented
as a computer system” and the modules can “share hardware or be combined
on a computer system”).
We find no indication in the Specification that the operations recited
in claim 16 require any specialized computer hardware or other inventive
computer components, i.e., a particular machine, invoke any allegedly
inventive programming, or that the claimed invention is implemented using
other than generic computer components to perform generic computer
functions. See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245,
1256 (Fed. Cir. 2014) (“[A]fter Alice, there can remain no doubt: recitation
of generic computer limitations does not make an otherwise ineligible claim
patent-eligible.”). Like the claims at issue in Electric Power, the advance
that the claimed invention purports to make is “a process of gathering and
analyzing information of a specified content,” and “not any particular
assertedly inventive technology for performing those functions.” Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016)
(determining the claims to be directed to an abstract idea).
We also find no indication in the Specification that the claimed
invention effects a transformation or reduction of a particular article to a
different state or thing. Nor do we find anything of record that attributes an
improvement in technology and/or a technical field to the claimed invention
or that otherwise indicates that the additional elements, considered
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individually and in combination, integrate the abstract idea into a “practical
application,” as that phrase is used in the Revised Guidance.
Instead, Appellant’s invention focuses on improving user experience
in a loyalty program by reducing user effort for redeeming reward points.
Spec. ¶ 180; see also id. ¶¶ 146, 148. Reducing user effort in redeeming
reward points is an improvement in the abstract idea of determining whether
a customer’s account identifier is associated with a loyalty program of the
merchant, and determining loyalty program benefits to be awarded based on
purchase details of the payment transaction (i.e., an improved commercial
interaction) — not an improvement to technology. See Versata Dev. Grp.,
Inc. v. SAP Am., Inc., 793 F.3d 1306, 1335 (Fed. Cir. 2015) (holding claims
that improved an abstract idea but did not recite the supposed computer
improvements were not patent eligible).
The additional elements considered alone and in combination support
this determination. For example, claim 16 recites that the claimed
computing apparatus includes a transaction handler, a data warehouse
coupled to the transaction handler to store transaction data, and a portal
coupled to the transaction handler and configured to communicate with
transaction terminals (limitations (a)(7)(i)–(a)(7)(iii)). The authorization
request includes an account identifier, and the computing apparatus
determines during transaction handler processing of the authorization
request whether the account identifier is associated with a loyalty program
(limitation (b)(1)), embeds, by the transaction handler, a request for purchase
details in the authorization response (limitation (b)(2)(i)), transmits the
authorization response (limitation (b)(2)(ii)), receives, in the portal, the
purchase details (limitation (c)), and determines benefits to be awarded to
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the customer according to the loyalty program based on the purchase details
(limitation (d)). Put simply, the claimed computing apparatus recites generic
computer components to perform generic data processing functions, such as
receiving data, analyzing data, manipulating data, and transmitting data, at a
high level of generality. Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d
1350, 1354 (Fed. Cir. 2016) (finding that “[t]he advance [the claims] purport
to make is a process of gathering and analyzing information of a specified
content, then displaying the results, and not any particular assertedly
inventive technology for performing those functions. They are therefore
directed to an abstract idea.”).
Here, the largely functional limitations set forth the abstract idea of
determining whether a customer’s account identifier is associated with a
loyalty program of the merchant, and, if so, determining benefits to be
awarded to the customer according to the loyalty program based on purchase
details of the payment transaction, and tie it to a particular technological
environment. For example, the step of embedding a request for purchase
details (limitation (b)(2)(i)) recites no particular manner by which the
function is performed. All that is disclosed is the ultimate objective. As
pointed out by the Federal Circuit in Electric Power, “the essentially result-
focused, functional character of claim language has been a frequent feature
of claims held ineligible under § 101, especially in the area of using generic
computer and network technology to carry out economic transactions.” Id.
at 1356; see also Loyalty Conversion Sys. Corp. v. Am. Airlines, Inc.,
66 F. Supp. 3d at 837–38 (finding that the asserted claims “are largely
functional in nature and do little more than set forth the general concept of
currency exchange, as applied to loyalty awards, and then announce the use
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of ‘one or more’ computers to obtain various efficiencies in the process of
converting one type of loyalty award credits into another”).
Claim 16 also additionally recites that the computing apparatus
includes a “portal coupled to the transaction handler and configured to
communicate with transaction terminals using a communication channel that
is outside of the electronic payment processing network” (limitation
(a)(7)(iii)). The portal receives purchase details “via the communication
channel that is outside of the electronic payment processing network”
(limitation (c)). And, the benefits to be awarded to the customer are
determined based on the purchase details “received in the portal via the
communication channel that is outside of the electronic payment processing
network” (limitation (d)).
Yet, these limitations serve to generally link the use of the abstract
idea to a particular technological environment having a portal and
communication channel that is outside of the electronic payment processing
network. See Revised Guidance, 84 Fed. Reg. at 55. For example,
Appellant does not purport to have invented a specialized portal or
distributed processing (e.g., sending first information of a first type to a first
computer for processing and sending second information of a second type to
a second computer for processing). See Elec. Power Grp., LLC v. Alstom
S.A., 830 F.3d at 1355 (Fed. Cir. 2016) (“[M]erely selecting information, by
content or source, for collection, analysis, and display does nothing
significant to differentiate a process from ordinary mental processes, whose
implicit exclusion from § 101 undergirds the information-based category of
abstract ideas.”); see buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355
(Fed. Cir. 2014) (“That a computer receives and sends the information over
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a network—with no further specification—is not even arguably inventive.”).
Here, transmitting purchase details to a portal and receiving purchase details
at a portal via a channel outside of the electronic payment processing
network to determine benefits based on the purchase details improves the
commercial interaction (i.e., abstract idea) itself. Specifically, by sending
purchase details to the portal, the receipt and processing of the purchase
details does not slow down the transaction handler during electronic
payment processing.
We conclude, for the reasons outlined above, that claim 16 recites a
commercial interaction, i.e., an abstract idea, and that the additional
elements recited in the claim are no more than generic computer components
used as tools to perform the recited abstract idea that generally link the
abstract idea to a particular technological environment. As such, they do not
integrate the abstract idea into a practical application.
Step Two of the Mayo/Alice Framework (Revised Guidance, Step 2B)
Having determined under step one of the Mayo/Alice framework that
claim 16 is directed to an abstract idea, we next consider under Step 2B of
the 2019 Revised Guidance, the second step of the Mayo/Alice framework,
whether claim 16 includes additional elements or a combination of elements
that provides an “inventive concept,” i.e., whether the additional elements
amount to “significantly more” than the judicial exception itself. Revised
Guidance, 84 Fed. Reg. at 56. In evaluating Step 2B, we consider whether
the claim limitations involve more than the performance of well-understood,
routine, and conventional activities previously known to the industry.
Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018); see Revised
Guidance, 84 Fed. Reg. at 56.
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Individually, the additional elements recited in claim 16, namely, the
computing apparatus, transaction handler, data warehouse, portal, electronic
payment processing network, transaction terminal, acquirer processor, issuer
processor, and communication channel outside the electronic payment
network are generic components that perform generic functions of receiving,
analyzing, and transmitting data at a high level of generality. See, e.g., Spec.
441–61; see also buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed.
Cir. 2014) (“That a computer receives and sends the information over a
network—with no further specification—is not even arguably inventive.”).
As an ordered combination, these elements provide no more than
when they are considered individually. Alice, 573 U.S. at 225. The
additional elements are used as tools to implement the judicial exception.
See SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1169–70 (Fed. Cir.
2018) (claimed databases and processors did not improve computers but
used available computers and functions as tools to execute the claimed
process); Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d
1372, 1378 (Fed. Cir. 2017) (considering the steps of representative claims
as an “ordered combination” reveals they “amount to ‘nothing significantly
more’ than an instruction to apply [an] abstract idea” using generic computer
technology).
Here, the additional elements in claim 16, understood in light of the
Specification, require no more than conventional computer and network
technology to perform generic computer functions, e.g., receiving, storing,
and processing information, that are known in the art.
Accordingly, we determine that claim 16 lacks an inventive concept.
Therefore, we reject claim 16 under 35 U.S.C. § 101.
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The remaining claims are directed to the same abstract idea as claim
16, and also do not recite additional limitations, considered individually and
as an ordered combination, that integrate the abstract idea into a practical
application or provide an inventive concept. Therefore, these claims are
rejected under § 101 for the same reasons described above with respect to
claim 16. See Content Extraction & Transmission LLC v. Wells Fargo
Bank, Nat’l Ass’n, 776 F.3d 1343, 1348 (Fed. Cir. 2014) (explaining that
when all claims are directed to the same abstract idea, “addressing each
claim of the asserted patents [is] unnecessary.”).

CONCLUSION
In summary:
Claims
Rejected
35
U.S.C. §
References/
Basis Affirmed Reversed
New
Ground
1, 3–14,
16, 17, 19 103
Fordyce,
Degliantoni
1, 3–14,
16, 17, 19

1, 3–14,
16, 17, 19 101 Eligibility
1, 3–14,
16, 17, 19
Overall
Outcome
1, 3–14,
16, 17, 19
1, 3–14,
16, 17, 19

TIME PERIOD FOR RESPONSE
This Decision contains a new ground of rejection pursuant to
37 C.F.R. § 41.50(b). Section 41.50(b) provides that “[a] new ground of
rejection pursuant to this paragraph shall not be considered final for judicial
review.”
Section 41.50(b) also provides that Appellant, WITHIN TWO
MONTHS FROM THE DATE OF THE DECISION, must exercise one of
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the following two options with respect to the new ground of rejection to
avoid termination of the appeal as to the rejected claims:
(1) Reopen prosecution. Submit an appropriate amendment of
the claims so rejected or new Evidence relating to the claims so
rejected, or both, and have the matter reconsidered by the
examiner, in which event the proceeding will be remanded to the
examiner. . . .
(2) Request rehearing. Request that the proceeding be reheard
under § 41.52 by the Board upon the same record. . . .
Further guidance on responding to a new ground of rejection can be
found in the Manual of Patent Examining Procedure § 1214.01.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv).
REVERSE
37 C.F.R. 41.50(b)