Gourab Basu et al.

Patent Trials and Appeals Board

Jan 2, 2020

14146638 - (D) (P.T.A.B. Jan. 2, 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.
14/146,638 01/02/2014 Gourab Basu 79900-895375(040800USNP) 5188
66945 7590 01/02/2020
KILPATRICK TOWNSEND & STOCKTON LLP/VISA
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
EXAMINER
TROTTER, SCOTT S
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
01/02/2020 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):
KTSDocketing2@kilpatrick.foundationip.com
ipefiling@kilpatricktownsend.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte GOURAB BASU and MICHAEL MORI
____________

Appeal 2018-000158
Application 14/146,638
Technology Center 3600
____________

Before ERIC S. FRAHM, CATHERINE SHIANG, and JASON J. CHUNG,
Administrative Patent Judges.

SHIANG, Administrative Patent Judge.

DECISION ON APPEAL
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s
rejection of claims 1, 2, 5–12, and 15–24, which are all the claims pending
and rejected in the application. We have jurisdiction under 35 U.S.C. § 6(b).
We reverse.

1 We use “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42.
Appellant identifies Visa International Service Association as the real party
in interest. App. Br. 2.

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Application 14/146,638

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STATEMENT OF THE CASE
Introduction
The present invention relates to “successfully integrate and process
transactions involving different payment systems and protocols.” Spec. ¶ 5.
According to some embodiments, a system and method may
keep track of settlement with both a third-party (e.g., digital
wallet provider, coupon or discount provider, shipping
provider, etc.) and a payment card issuer. The system and
method may send a comprehensive settlement to the acquirer.
The system and method operate by receiving a settlement
request (e.g., a clearing message) with a transaction identifier
from an acquirer. A payment processor may split the request
into two separate settlement requests, one sent to the third-party
and the other to the issuer, both having unique transaction
identifiers that are derived from the original transaction
identifier. As a result of the system, acquirers and payment
processors can better consolidate information and ensure that a
payment is entirely settled when there are multiple paying
entities involved in the transaction.
Spec. ¶ 8.
Claim 1 is exemplary:
1. A method for clearing a transaction, comprising:
receiving, by a server computer, a first authorization
request message comprising at least a transaction amount
associated with the transaction;
generating, by the server computer, a second
authorization request message and transmitting the second
authorization request message to a first computer, the second
authorization request message comprising a first adjusted
transaction amount;
generating, by the server computer, a third authorization
request message and
transmitting the third authorization request message to a
second computer, the third authorization request message
comprising a second adjusted transaction amount;
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receiving, by the server computer and from the first
computer, a first authorization response message in response to
the second authorization request message;
receiving, by the server computer and from the second
computer, a second authorization response message in response
to the third authorization request message;
transmitting, by the server computer and to an acquirer
computer, a third authorization response message;
receiving, by the server computer, a first clearing request
message, wherein the first clearing request message comprises a
transaction identifier and the transaction amount;
deriving a first derived transaction identifier and a second
derived transaction identifier from the transaction identifier;
splitting the first clearing request message into a second
clearing request message and a third clearing request message,
the second clearing request message comprising a first derived
transaction identifier;
transmitting the second clearing request message to the
first computer;
transmitting the third clearing request message to the second
computer, wherein the second clearing request message
comprises the first adjusted transaction amount and the third
clearing request message comprises the second adjusted
transaction amount; and
settling, by the server computer, the first adjusted
transaction amount with the first computer and settling, by the
server computer, the second adjusted transaction amount with
the second computer.
App. Br. 18 (Claims Appendix).

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Rejection2
Claims 1, 2, 5–12, and 15–24 are rejected under 35 U.S.C. § 101
because they are directed to patent-ineligible subject matter. Final Act. 6–
11.

ANALYSIS
35 U.S.C. § 101
We have reviewed the Examiner’s rejection in light of Appellant’s
contentions and the evidence of record. We concur with Appellant’s
contention that the Examiner erred in this case.
Section 101 of the Patent Act provides “[w]hoever invents or
discovers any new and useful process, machine, manufacture, or
composition of matter, or any new and useful improvement thereof, may
obtain a patent therefor, subject to the conditions and requirements of this
title.” 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. Pty.
Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014) (internal quotation marks
and 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,

2 Throughout this opinion, we refer to the (1) Final Office Action dated
October 26, 2017 (“Final Act.”); (2) Appeal Brief dated March 26, 2018
(“App. Br.”); (3) Examiner’s Answer dated August 3, 2018 (“Ans.”); and (4)
Reply Brief dated October 3, 2018 (“Reply Br.”).
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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
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 187; 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
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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
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. (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 published revised guidance on the application of § 101.
USPTO’s 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE,
84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”).3 Under the guidance set forth
in the 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) (Step 2A, Prong 1); 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. rev.
08.2017 2018) (Step 2A, Prong 2).

3 The Guidance was updated in October 2019.
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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. (Step 2B.)
See Guidance, 84 Fed. Reg. at 54–56.
Turning to Step 2B of the Guidance, “[t]he second step of the Alice
test is satisfied when the claim limitations ‘involve more than 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) (quoting Content Extraction & Transmission LLC v. Wells
Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1347–48 (Fed. Cir. 2014) and
Alice, 573 U.S. at 225). “Whether something is well-understood, routine,
and conventional to a skilled artisan at the time of the patent is a factual
determination.” Berkheimer, 881 F.3d at 1369.
In this case, the Examiner determines:
The additional elements involved in the recited process of all
pending claims undertake their roles in performance of their
functions (such as receiving data, generating messages from the
received data and transmitting the messages to respective
computers associated with respective entities) according to their
generic functionalities ( examples: routine data processing)
which are well-understood, routine and conventional data
processing activities.
Final Act. 10; see also Ans. 7.
As pointed out by Appellant, the Examiner has not provided the
evidence required by Berkheimer to support the above determination. See
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App. Br. 14–15; Reply Br. 7; Berkheimer, 881 F.3d at 1369. In particular,
the Examiner has not provided any of the four categories of information
required by the Memorandum of Changes in Examination Procedure
Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility
Decision (Berkheimer v. HP, Inc.) (“Berkheimer Memorandum”):
1. A citation to an express statement in the specification or to a
statement made by an applicant during prosecution that
demonstrates the well-understood, routine, conventional
nature of the additional element(s). . . .
2. A citation to one or more of the court decisions discussed in
MPEP § 2106.05(d)(II) as noting the well-understood,
routine, conventional nature of the additional element(s).
3. A citation to a publication that demonstrates the well-
understood, routine, conventional nature of the additional
element(s). . . .
4. A statement that the examiner is taking official notice of the
well-understood, routine, conventional nature of the
additional element(s). . . .

Berkheimer Memorandum at 3–4. Further, the Examiner does not respond
to Appellant’s arguments about Berkheimer.
Therefore, the Examiner erred with respect to Step 2B of the
Guidance, and we are constrained by the record to reverse the Examiner’s
rejection of claims 1, 2, 5–12, and 15–24 on procedural grounds.

CONCLUSION
We reverse the Examiner’s decision rejecting claims 1, 2, 5–12, and
15–24 under 35 U.S.C. § 101.
In summary:

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Claims
Rejected
35 U.S.C. § Basis Affirmed Reversed
1, 2, 5–12, 15–24 101 Eligibility 1, 2, 5–12, 15–
24

REVERSED