Gary J. Wilson

Patent Trials and Appeals Board

Oct 1, 2019

14101987 - (D) (P.T.A.B. Oct. 1, 2019)

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.
14/101,987 12/10/2013 Gary J. WILSON 110579-8001.US01 1353
22918 7590 10/01/2019
PERKINS COIE LLP - PAO General
P.O. BOX 1247
SEATTLE, WA 98111-1247
EXAMINER
CHAKRAVARTI, ARUNAVA
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
10/01/2019 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):
patentprocurement@perkinscoie.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte GARY J. WILSON
____________

Appeal 2018-006867
Application 14/101,987
Technology Center 3600
____________

Before JOSEPH L. DIXON, ERIC B. CHEN, and JENNIFER L.
McKEOWN, Administrative Patent Judges.

McKEOWN, Administrative Patent Judge.

DECISION ON APPEAL
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s
decision to reject claims 1–14. Claim 15 is canceled. App. Br. 3. We have
jurisdiction under 35 U.S.C. § 6(b).
We reverse.

1 Gary J. Wilson (“Appellant”) is the applicant as provided in 37 C.F.R.
§ 1.46 and is identified as the real party in interest. App. Br. 3.
Appeal 2018-006867
Application 14/101,987

2
STATEMENT OF THE CASE
Appellant’s disclosed and claimed invention “relates to conducting
secure transactions. More particularly, the invention relates to conducting
secure financial and informational transactions via portable smart devices.”
Spec. 1, ll. 18–20.
Abstract.
Claim 1 is illustrative of the claimed invention and reads as follows:
1. A computer implemented method for authorizing a computer
system to conduct a transaction between a user and a third party, comprising:
providing at least two independent smart devices, wherein said devices
are simultaneously accessible by a user;
independently and simultaneously connecting each of said devices to a
common account server by a secure connection between each device and said
account server;
responsive to said at least two devices substantially simultaneously
connecting thereto, said account server generating unique information for
exchange between said at least two devices and transmitting said unique
information to each of said devices;
said at least two devices receiving said unique information from said
common server;
said at least two devices exchanging said unique information with each
other to establish conclusive, mutual verification of said at least two devices
with and to each other, once said at least two devices are connected to said
account server;
said account server confirming conclusive, mutual verification of said
at least two devices with and to each other; and
once conclusive, mutual verification of said at least two devices with
each other is confirmed, one of said devices communicating with a third-party
server to exchange information for conducting a transaction between said user
and said third party server.

THE REJECTIONS
The Examiner rejected claims 1–14 under 35 U.S.C. § 101 as directed
to patent ineligible subject matter. Final Act. 2–9.
Appeal 2018-006867
Application 14/101,987

3
The Examiner rejected claims 1–14 under 35 U.S.C. § 103 as
unpatentable over Stone (US 2011/0246363 A1, published Oct. 6, 2011),
and Kargman (US 2009/0276347 A1, published Nov. 5, 2009). Final Act.
10–17.

ANALYSIS
THE § 101 REJECTION
Claims 1–20
Based on the record before us, Appellant has not persuaded us that the
Examiner erred in rejecting claims 1–20 as directed to patent ineligible
subject matter.
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. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216
(2014) (citation omitted).
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 that 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. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4
Appeal 2018-006867
Application 14/101,987

4
in petitioners’ application explain the basic concept of hedging, or protecting
against risk.”).
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 (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
(1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
(15 How.) 252, 267–68 (1854))); and manufacturing flour (Benson, 409 U.S.
at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that “[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula.” Diehr, 450 U.S. at 176; see also id. at 191 (“We
view respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, . . . and this principle cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment.” Id. (citing Benson and Flook); see, e.g., id. at 187 (“It is now
commonplace that an application of a law of nature or mathematical formula
Appeal 2018-006867
Application 14/101,987

5
to a known structure or process may well be deserving of patent
protection.”).
If the claim is “directed to” an abstract idea, we turn to the second
step of the Alice and Mayo framework, where “we must examine the
elements of the claim to determine whether it contains an ‘inventive
concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-
eligible application.” Alice, 573 U.S. at 221 (citation omitted). “A claim
that recites an abstract idea must include ‘additional features’ to ensure ‘that
the [claim] is more than a drafting effort designed to monopolize the
[abstract idea].’” Id. (alterations in original) (quoting Mayo, 566 U.S. at 77).
“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
that abstract idea into a patent-eligible invention.” Id.
The PTO recently published revised guidance on the application of
section 101. USPTO’s 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“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 MANUAL OF PATENT EXAMINING
PROCEDURE (“MPEP”) § 2106.05(a)-(c), (e)-(h) (9th ed. 2018)).
See Memorandum 52, 55–56. 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:
Appeal 2018-006867
Application 14/101,987

6
(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.
See Memorandum 56.
Analysis – Revised Step 2A
Under the Memorandum, in prong one of step 2A we look to whether
the claims recite a judicial exception. The claimed invention includes
“providing at least two independent smart devices, wherein said devices
are simultaneously accessible by a user;” “independently and simultaneously
connecting each of said devices to a common account server by a secure
connection between each device and said account server;” “responsive to
said at least two devices substantially simultaneously connecting thereto,
said account server generating unique information for exchange between
said at least two devices and transmitting said unique information to each of
said devices;” “said at least two devices receiving said unique information
from said common server;” “said at least two devices exchanging said
unique information with each other to establish conclusive, mutual
verification of said at least two devices with and to each other, once said at
least two devices are connected to said account server;” “said account server
confirming conclusive, mutual verification of said at least two devices with
and to each other;” and “once conclusive, mutual verification of said at least
two devices with each other is confirmed, one of said devices
communicating with a third-party server to exchange information for
Appeal 2018-006867
Application 14/101,987

7
conducting a transaction between said user and said third party server.” In
other words, the claimed invention recites at least two devices receiving
unique information from a common server and the devices exchanging
information to mutually verify each device for conducting a transaction.
The Examiner determines that the claimed invention is directed to
mitigating risk, a fundamental economic practice. In particular, the
Examiner explains that
Here the independent claims describe a method of carrying out a
transaction only if mutual verification between two or more
transaction devices is maintained. Since, every financial
transaction involves the risk of fraud, any method of
authentication serves to mitigate financial risk and hence
constitutes fundamental economic practice. Thus, the claims
describe nothing more than carrying out human activities and
fundamental economic practices with computing devices. Hence,
the claims are directed to an abstract idea.
Final Act. 3–4; see also Ans. 4 (noting that the “claims are ultimately
directed to minimizing risk of fraud. Hence, they are directed to a
fundamental economic practice and method of organizing human activities
that the courts have deemed abstract.”).
On the other hand, Appellant contends that the Examiner’s reasoning
is misplaced. Specifically, Appellant asserts “[a]lthough it could be
reasonable to conclude that a method of authentication per se is an abstract
idea, this does not mean that ‘any method of authentication’ constitutes an
abstract idea.” App. Br. 6–7. According to Appellant, the claimed invention
“is directed to a particular implementation - a specific technological process
for authorizing a computer system to conduct a transaction between a user
and a third party, not just the abstract idea of authentication.” App. Br. 7.
Appeal 2018-006867
Application 14/101,987

8
Therefore, according to Appellant, the claimed invention is not directed to
an abstract idea.
We are persuaded of error in the Examiner’s rejection. The claimed
invention, here, recites independent devices connecting to and exchanging
information with a server and the independent devices exchanging
information to mutually verify the independent devices. While the claimed
invention refers to performing the recited steps “for conducting a
transaction,” the steps themselves recite a particular authentication process.
See Enfish LLC v. Microsoft Corp., 822 F. 3d 1327, 1336, 1355 (Fed. Cir.
2016) (noting that “[t]he ‘directed to’ inquiry, therefore, cannot simply ask
whether the claims involve a patent-ineligible concept, because essentially
every routinely patent-eligible claim involving physical products and actions
involves a law of nature and/or natural phenomenon. . . .”). Moreover,
merely reciting that the claims steps could possibly be performed for
conducting a transaction does not render the claimed invention as directed to
a fundamental economic practice and, thus, directed to an abstract idea. As
such, based on the record before us, we are persuaded that the Examiner
erred in determining that the claimed invention is directed to patent
ineligible subject matter.
Accordingly, we reverse the Examiner’s decision to reject claims 1–
14 as directed to patent ineligible subject matter.
Appeal 2018-006867
Application 14/101,987

9
THE § 103 REJECTION BASED ON STONE AND KARGMAN
Claims 1–14
Based on the record before us, we are persuaded that the Examiner
erred in finding that claims 1, 2, 4, 11, 12, and 14 are unpatentable over
Stone and Kargman.
Appellant also argues that the combination fails to teach or suggest
“said at least two devices exchanging said unique information with each
other to establish conclusive, mutual verification of said at least two devices
with and to each other, once said at least two devices are connected to said
account server.” App. Br. 4. In particular, Appellant asserts “by definition,
an exchange requires giving one thing and receiving another thing by each
of two devices. In contrast, the cited art teaches sequentially passing the
same token along different devices.” Reply Br. 6.
Stone teaches a payment processor generating a unique transaction
identifier (ID) and transmitting that transaction ID from the payment
processor to the first device. Stone ¶¶ 20–21. The first device transmits the
transaction ID from the first device to the second device. Stone ¶ 22. The
second device, then, transmits the transaction ID, along with its own device
or user ID, back to the payment processor. Stone ¶ 24. The payment
processor will use the received transaction ID and user ID for authentication.
Stone ¶ 26. While the Examiner identifies that one device sends information
to the other connected device (Ans. 15), the Examiner fails to sufficiently
explain how Stone teaches or suggests the first and second devices
exchanging the transaction ID. As such, based on the record before us, we
are persuaded that the Examiner erred in rejecting claims 1–14 as
unpatentable over Stone and Kargman.
Appeal 2018-006867
Application 14/101,987

10
Accordingly, we reverse the Examiner’s decision to reject claims 1–
14 as unpatentable over Stone and Kargman.

DECISION
We reverse the Examiner’s decision to reject claims 1–14 as ineligible
and reverse the Examiner’s decision to reject claims 1–14 as unpatentable in
view of Stone and Kargman.

REVERSED