HAREXINFOTECH INC.

Patent Trials and Appeals Board

Nov 6, 2020

2020003743 (P.T.A.B. Nov. 6, 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.
14/776,079 09/14/2015 Kyung Yang PARK Q222335 5213
23373 7590 11/06/2020
SUGHRUE MION, PLLC
2000 PENNSYLVANIA AVENUE, N.W.
SUITE 900
WASHINGTON, DC 20006
EXAMINER
ALI, HATEM M
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
11/06/2020 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):
PPROCESSING@SUGHRUE.COM
USPTO@sughrue.com
sughrue@sughrue.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte KYUNG YANG PARK and
HOON JOON JEONG

Appeal 2020-003743
Application 14/776,079
Technology Center 3600
____________

Before DONALD E. ADAMS, RICHARD M. LEBOVITZ, and
FRANCISCO C. PRATS, Administrative Patent Judges.

LEBOVITZ, Administrative Patent Judge.

DECISION ON APPEAL
The Examiner rejected claims 1–21 under 35 U.S.C. § 101 as being
directed to patent-ineligible subject matter. Pursuant to 35 U.S.C. § 134(a),
Appellant1 appeals from the Examiner’s decision to reject the claims. We
have jurisdiction under 35 U.S.C. § 6(b).
We REVERSE.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42. Appellant identifies the real party in interest as Harexinfotech
Inc. Appeal Br. 3.
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STATEMENT OF THE CASE
Claims 1–21 stand rejected by the Examiner in the Final Rejection
under 35 U.S.C. § 101 because the claimed invention is directed to an
abstract idea and judicial exception without significantly more. Final Act. 2.
Claims 1 and 16 are representative and reproduced below (annotated
with bracketed numbers for reference to the limitations):2
1. An affiliated store terminal, comprising:
at least one microprocessor comprising:
[1] a transaction identification information generation
unit configured to generate transaction identification (T-ID)
information based on payment-related information;
[2] a transaction identification information provision unit
configured to provide the T-ID information to a mobile
terminal;
[3] a payment request transmission unit configured to
[3a] transmit a payment request signal including the payment-
related information and the T-ID information to [4] a payment
processing server at a same time when the transaction
identification information provision unit transmits the T-ID
information to the mobile terminal, without waiting for a
payment request response signal being received from the
payment processing server, and [3b] receive the payment
request response signal including the T-ID information from the
payment processing server in response to the payment request
signal being transmitted to the payment processing server;
[5] a payment approval confirmation request unit
configured to [5a] transmit a first user datagram protocol (UDP)
packet including the T-ID information to [6] a payment
processing result notification server when receiving the
payment request response signal, and [5b] receive a first

2 Figure 1 of the Specification, attached as an appendix, has been annotated
with the steps of claims 1 and 16. We include this figure to illustrate how
the limitations of the claims connect with each other to accomplish the
payment processing method. However, the annotated figure is for illustrative
purposes only and this Decision is not based on it.
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response signal from the payment processing result notification
server in response to the UDP packet being transmitted to the
payment processing result notification server; and
[7] a payment approval confirmation unit configured to
[7a] receive a second UDP packet for a payment processing
result notification including the T-ID information from [6] the
payment processing result notification server via UDP
connection, without confirming that the mobile terminal has
approved a transaction corresponding to the payment request
signal, and when receiving the second UDP packet for the
payment processing result notification, [7b] transmit a second
response signal to the payment processing result notification
server, and [7c] transmit a transaction state inquiry signal to [4]
the payment processing server,
wherein, when transmitting the payment-related
information to the payment processing server, the payment
request transmission unit receives the payment request response
signal including the T-ID information based on the payment-
related information from the payment processing server.

16. A mobile payment processing method performed in an
affiliated store terminal, the mobile payment processing method
comprising:
[1] generating transaction identification (T-ID)
information based on payment-related information;
[2] transmitting a payment request signal including the T-
ID information to a payment processing server;
[3] providing the T-ID information to a mobile terminal;
[4] receiving a payment request response signal from the
payment processing server receiving a payment approval
request signal transmitted by the mobile terminal obtaining the
T-ID information;
[5] transmitting a user datagram protocol (UDP) packet
including the T-ID information to a payment processing result
notification server when receiving the payment request
response signal;
[6] receiving a UDP packet for a payment processing
result notification including the T-ID information from the
payment processing result notification server via UDP
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connection, without confirming that the mobile terminal has
approved a transaction corresponding to the payment request
signal, when the payment processing result notification server
receives payment processing result information from the
payment processing server; and
[7] inquiring a transaction state by connecting to the
payment processing server when receiving the UDP packet for
the payment processing result notification,
wherein the transmitting the payment request signal
comprises transmitting the T-ID information to the payment
processing server and the mobile terminal at a same time,
without waiting for the payment request response signal being
received from the payment processing server.

SECTION 101 REJECTION
Principles of Law
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.”
However, not every discovery is eligible for patent protection. Diamond v.
Diehr, 450 U.S. 175, 185 (1981). “Excluded from such patent protection are
laws of nature, natural phenomena, and abstract ideas.” Id. The Supreme
Court articulated a two-step analysis to determine whether a claim falls
within an excluded category of invention. Alice Corp. v. CLS Bank Int’l, 573
U.S. 208 (2014); Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566
U.S. 66, 75–77 (2012).
In the first step, it is determined “whether the claims at issue are
directed to one of those patent-ineligible concepts.” Alice, 573 U.S. at 217. If
it is determined that the claims are directed to an ineligible concept, then the
second step of the two-part analysis is applied in which it is asked “[w]hat
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else is there in the claims before us?” Id. (alteration in original). The Court
explained that this step involves
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.”
Alice, 573 U.S. at 217–18 (alteration in original) (citing from Mayo, 566
U.S. at 75–77).
Alice, relying on the analysis in Mayo of a claim directed to a law of
nature, stated that in the second part of the analysis, “the elements of each
claim both individually and ‘as an ordered combination’” must be
considered “to determine whether the additional elements ‘transform the
nature of the claim’ into a patent-eligible application.” Alice, 573 U.S. at
217.
The PTO published revised guidance on the application of 35 U.S.C.
§ 101. USPTO’s January 7, 2019 Memorandum, 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(“Eligibility Guidance”). This guidance provides additional direction on how
to implement the two-part analysis of Mayo and Alice.
Step 2A, Prong One, of the Eligibility Guidance, looks at the specific
limitations in the claim to determine whether the claim recites a judicial
exception to patent eligibility. In Step 2A, Prong Two, the claims are
examined to identify whether there are additional elements in the claims that
integrate the exception in a practical application, namely, is there a
“meaningful limit on the judicial exception, such that the claim is more than
a drafting effort designed to monopolize the judicial exception.” 84 Fed.
Reg. 54 (Prong Two).
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If the claim recites a judicial exception that is not integrated into a
practical application, then as in the Mayo/Alice framework, Step 2B of the
Eligibility Guidance instructs us to determine whether there is a claimed
“inventive concept” to ensure that the claims define an invention that is
significantly more than the ineligible concept itself. 84 Fed. Reg. 56.
With these guiding principles in mind, we proceed to determine
whether the claimed subject matter in this appeal is eligible for patent
protection under 35 U.S.C. § 101.
Claims
The claims in this appeal are directed to a mobile payment processing
method performed in an affiliated store terminal. There are five independent
claims on appeal, claims 1, 9, 12, 16, and 17. Appellant grouped all the
claims together, although the scope of each claim is different. All the claims
relate to payments transactions between a mobile terminal of a customer,
such as the customer’s smart phone, and a store terminal, where a customer
makes a purchase from a store. Spec. ¶ 2. We have focused on claims 1 and
16.
Claim 1 is directed to an “affiliated store terminal” with a
microprocessor that comprises several specific units with the function to
carry out a mobile payment transaction. A store terminal is a “manufacture,”
one of the statutory categories of patent-eligible subject matter under 35
U.S.C. § 101.
Claim 16 is directed to a “mobile payment processing method
performed in an affiliated store terminal.” A method is also a “process,”
which is a statutory category of patent-eligible subject matter listed in 35
U.S.C. § 101.
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Because the claims fall into statutory categories of patent-eligible
subject matter, following the first step of the Mayo/Alice analysis, we
proceed to Step 2A, Prong One, of the Eligibility Guidance.

Step 2A, Prong One
In Step 2A, Prong One, of the Eligibility Guidance, the specific
limitations in the claim are examined to determine whether the claim recites
a judicial exception to patent eligibility, namely whether the claim recites an
abstract idea, law of nature, or natural phenomenon.
The Examiner found that the claims “cover[ ] performance of the
limitations via human commercial or business or transactional
activities/interactions” which are methods of organizing human activity, one
of the categories of abstract ideas listed in the Eligibility Guidance as an
abstract idea. Final Act. 4. See 84 Fed. Reg. 52 (“fundamental economic
principles or practices (including . . . sales activities”)
As explained below, we agree with the Examiner that the claims recite
methods of organizing human activity because the claims recite steps in
which payment processing of a sale is accomplished.
Step [2] of claim 16, in which a payment request is sent to the
payment processing server is a basic requirement of sales activity because
the request for payment must be made before the merchant can be paid for
the sale to the customer. Step [4] of the claim where the response to this
request for payment is received by the merchant upon approval of the
request by the customer is also a necessary step of this process because it
lets the merchant know the payment has been approved and therefore the
transaction can be completed. The remaining steps recited in claim 16, while
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part of the payment processing method, are not part of the fundamental
process in which a payment is requested and notification received that the
payment is processed. Accordingly, we conclude that Examiner properly
found that claim 16 recites a method of organizing human activity.
Claim 1 comprises a microprocessor that further comprises specific
units configured to perform steps which a payment is processed.
Specifically, as in claim 16, step [3] of claim 1 recites a unit configured to
make a payment request on behalf of a merchant and receive a response to
the payment request. Payment approval is carried out by the units recited in
steps [5] and [6] of claim 1.
Therefore, we agree with the Examiner that the claims recite an
abstract idea and proceed to Step 2A, Prong Two, of the Eligibility
Guidance.
Step 2A, Prong Two
Prong Two of Step 2A under the 2019 Eligibility Guidance asks
whether there are additional elements that integrate the exception into a
practical application. As in the Mayo/Alice framework, we must look at the
claim elements individually and “as an ordered combination” to determine
whether the additional elements integrate the recited abstract idea into a
practical application. Integration into a practical application is evaluated by
identifying whether there are additional elements individually, and in
combination, which go beyond the judicial exception. Eligibility Guidance,
84 Fed. Reg. 54–55. The October 2019 Update to Subject Matter Eligibility
further explains that “the specification should be evaluated to determine if
the disclosure provides sufficient details such that one of ordinary skill in the
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art would recognize the claimed invention as providing an improvement.”
PEG Update 12.3
Appellant specifically identified disclosure in the Specification that
they assert provide improvements to conventional payment processing.
Appeal Br. 17. We therefore review these disclosures below in the context of
what is recited in the claims.

Transaction identification information
In claim 1, a transaction identification information unit generates
transaction identification information (T-ID) ([1]) (the annotated figure in
the Appendix to this decision illustrates the process). The T-ID is provided
to a mobile terminal by a transaction identification information provision
unit ([2]). The T-ID is comprises the payment-related information related to
the transaction, such as “an affiliated store code, a branch store code, a
terminal code, a transaction serial number, and purchase information.” Spec.
¶ 16. The transaction identification information unit and transaction
identification information provision unit are at the store terminal. The
Specification states that in the “conventional art,” the T-ID information is
provided to the store terminal by the payment processing server, which in
turn, provides it to the mobile device. Spec. ¶ 65. However, the Specification
explains that in the present invention, the store terminal generates the T-ID
information, itself, and sends it directly to the mobile terminal. Spec. ¶ 66;
claim 1, step [1], step [2]. Following the steps of claim 1, the store [3a] also

3 Available at
https://www.uspto.gov/sites/default/files/documents/peg_oct_2019_update.p
df (last accessed Jul. 3, 2020) (“PEG Update”).

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sends the T-ID information to [4] the payment processing server as a
payment request and [3b] receives the T-ID information back from [4] the
payment processing server as part of the response to the request. (The
response is sent to the store upon approval from the customer’s mobile
terminal.)
Because the store sends the T-ID information to the mobile terminal
(a customer’s cellphone) and [4] the payment processing server at same time
([3] “transmit . . . “at a same time when the transaction identification
information provision unit transmits the T-ID information to the mobile
terminal, without waiting for a payment request response signal being
received from the payment processing server”), the Specification explains
that “the mobile payment can be rapidly processed without waiting until the
payment processing server 230 receives the payment request response
signal” from the [4] the payment processing server. Spec. ¶ 66. Thus, in the
conventional art system, the store terminal would have to wait to receive the
T-ID information from the processing server until providing it to the mobile
terminal, but in the claim, the store provides it to the payment processing
terminal and mobile terminal, making the processing more rapid because
once the customer at the mobile terminal approves the transaction, the
payment processing server can match the transactions and notify the store
that the payment request has been received.
This improvement also appears in steps [1]–[4] of claim 16 as
indicated in the annotated Figure 1. Claim 16 makes it explicit in step [4]
that the T-ID information provided to the store from [4] the payment
processing server ([3b] of claim 1) is the T-ID from the mobile terminal that
the mobile terminal received from the store (“receiving a payment request
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response signal from the payment processing server receiving a payment
approval request signal transmitted by the mobile terminal obtaining the T-
ID information.”
This improvement also appears in independent claims 12 and 17.

UDP
The claims also use a “user datagram protocol” or “UDP” packet to
communicate information. In claim 1, [5] the payment approval
confirmation request unit “transmits” information, including the T-ID
information, as a first UDP packet to [6] the payment processing result
notification server. The payment processing result notification server sends a
second UDP packet ([7a] of claim 1) back to [7] the payment approval
confirmation unit at the store terminal. The [7] the payment approval
confirmation unit is then able to confirm that a payment has been approved
by [7c] transmitting a transaction state inquiry signal to [4] the payment
processing server. Spec. ¶ 47.
The Specification explains that, in the conventional system, the store
terminal may not maintain the connection with [4] the payment processing
server while the process between the mobile terminal and the payment
processing server is performed. Spec. ¶ 71. As a consequence, the
Specification states that “there may be a problem in which [4] the payment
processing server . . . cannot transmit a transaction approval result” to the
store terminal “even when it is determined whether the transaction approval
is processed since the [4] payment processing server . . . cannot confirm an
address” of the store terminal. Id.
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The Specification states that this problem is addressed by providing
[6] a “payment processing result notification server” that “inform[s] the . . .
store terminal whether the transaction approval is processed by performing
the communication using the UDP packet” with the store terminal.” Spec.
72. Steps [5] and [7] of claim 1 reflect this improvement.
It is further explained in the Specification that, when the process
between the mobile terminal and [4] the payment processing server is
completed, [4] the payment processing server may “transmit a response
signal including the T-ID information to [6] the payment processing result
notification server” which finds the UDP address of the store. Spec. ¶ 74.
The [6] payment processing result notification server then will “transmit the
UDP packet including the T-ID information and information regarding
whether the transaction approval is processed to the affiliated store terminal
so that the user of the affiliated store terminal . . . inquires the transaction
state by connecting to the payment processing server without confirming
whether the transaction approval is completed from the user of the mobile
terminal.” Id. This latter step is described by the Specification as reducing “a
system load of the payment processing server.” Spec. ¶ 75.
Claim 1 recites this improvement in [5a] where there is first UDP
packet sent to the payment processing result notification server, and then
receipt of a second UDP packet from the payment processing result
notification server as in limitation [7] of the claim, where the second UDP
packet is “including the T-ID information from the payment processing
result notification server via UDP connection, without confirming that the
mobile terminal has approved a transaction corresponding to the payment
request signal,” the same feature described in the Specification as the
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improvement over conventional systems. Claim 16 also recites this feature in
limitations [5] and [6], of sending and receiving the UDP packets, where the
exchange is accomplish between the recited store terminal and payment
processing result notification server. We also find that independent claims 9
and 12 apply this UDP communication strategy in a similar manner to
claims 1 and 16.

Discussion
As explained above, we understand Appellant’s argument to be that
the claim as a whole is not directed to an abstract idea because the T-ID
information and UDP communication are additional elements which
integrate the judicial exception into a practical application. See Eligibility
Guidance, 84 Fed. Reg. 55 (“An additional element reflects . . . an
improvement to other technology or technical field.”).
The Examiner responds that a “generic recitation of a computer
processor performing its generic computer functions does not make the
claims less abstract.” The Examiner states that the “claims provide a
generically computer-implemented solution to a business-related or
economic problem (i.e. processing a payment)” and that the “focus of the
claimed invention in the present is not on an improvement in computers as
tools, but on certain independently abstract ideas that use computers as
tools.” Ans. 5. The Examiner also states that the claims “are not directed to a
specific improvement to computer functionality nor an inventive solution to
any computer specific problem.” Id. The Examiner also responds that
“Nothing in the claims, understood in light of the specification, requires
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anything other than off-the-shelf, conventional computer, network, and
database technology” which is not inventive. Id. at 6.
We are not persuaded by the Examiner’s analysis that the claims are
not patent-eligible. The Examiner appears to require the invention of a new
technology to confer patent-eligibility on the claim. However, this is not an
accurate characterization of how claims are analyzed for patent-eligibility
under the Mayo/Alice framework. When a claim recites an abstract idea,
patent-eligibility can be established when the “particular arrangement of
elements is a technical improvement over [the] prior art.” BASCOM Glob.
Internet Servs. v. AT&T Mobility LLC, 827 F.3d 1341, 1350 (Fed. Cir.
2016).
The court in Bascom found the claimed subject matter patent-eligible
under 35 U.S.C. § 101 because the claims “carve[d] out a specific location
for the filtering system (a remote ISP server) and require[d] the filtering
system to give users the ability to customize filtering for their individual
network accounts.” Bascom, 827 F.3d at 1351. While filtering content was
“already a known concept,” the court explained that the claims “recite a
specific, discrete implementation of the abstract idea of filtering content.” Id.
at 1350.
Here, as discussed above, the Specification identifies improvements to
the way T-ID information is communicated during a payment processing
transaction. The Specification also describes an improvement in the
notification process when a transaction has been approved using UDP
communication. Therefore, we must examine the claim to determine whether
these are additional elements in the claim which integrate the abstract idea
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into a practical application or otherwise impose a meaningful limit on the
judicial exception.
With respect to the improvement in the generation and provision of
the T-ID information, claim 1 has specific computer elements which perform
the T-ID functions, namely, the [1] transaction identification information
generation unit and [2] the transaction identification information unit. The
Specification describes these functions as an improvement to conventional
systems. Spec. ¶¶ 65, 66. In claim 16, the claim preamble requires that these
operations are performed on the store terminal. We consider these to be
additional elements that do not perform operations that would ordinarily take
place in payment processing. See 2010-000064 (PTAB Informative Dec.
Mar. 19, 2019) 7. Claims 12 and 17 also comprise a store terminal which
performs the T-ID function. The recited T-ID units and store terminal
therefore impose “a meaningful limit on the judicial exception, such that the
claim is more than a drafting effort designed to monopolize the judicial
exception.” Eligibility Guidance, 84 Fed. Reg. 54 (“Prong Two” discussion).
The UDP communication is accomplished in claim 1 with a [5] a
payment approval confirmation request unit, and a [6] payment processing
result notification server. As explained above, the Specification discloses [6]
the payment processing result notification server is an improvement to
existing system. We therefore consider [6] the payment processing result
notification server to be an additional element that does not recite operations
that would ordinarily take place in payment processing.
Claims 16 and 17 also recite a payment processing result notification
server to perform the UDP function and therefore comprise an additional
element that does not perform operations that would ordinarily take place in
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payment processing. Claims 9 and 12 also recite additional elements that
perform the UDP functions.
Accordingly, we find that specific manner in which T-ID and UDP is
implemented in the payment processing method recited in the claims
“imposes a meaningful limit on the judicial exception, such that the claim is
more than a drafting effort designed to monopolize the judicial exception.”
Eligibility Guidance, 84 Fed. Reg. 54 (“Prong Two” discussion).

Step 2B
While it is unnecessary to proceed to Step 2B because a technological
improvement that integrated the abstract idea into a practical application has
been identified, for completeness of the record, we shall proceed to Step 2B.
In making the Step 2B determination, we must consider whether there
are specific limitations or elements recited in the claim “that are not well-
understood, routine, conventional activity in the field, which is indicative
that an inventive concept may be present” or whether the claim “simply
appends well-understood, routine, conventional activities previously known
to the industry, specified at a high level of generality, to the judicial
exception, indicative that an inventive concept may not be present.”
Eligibility Guidance, 84 Fed. Reg. 56 (footnote omitted). We must also
consider whether the combination of steps perform “in an unconventional
way and therefore include an ‘inventive step,’ rendering the claim eligible at
Step 2B.” Id.
As explained in detail above, the arrangement of these specifically
claimed elements and steps that perform the T-ID and UDP functions are
described in the Specification as an improvement to conventional payment
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processing. The combination of the T-ID and UDP functions therefore
provide an “inventive concept” to the claimed payment processing method.
The Examiner did not consider the arrangement of these features recited in
the claims, but rather dismissed them as “off-the-shelf, conventional
computer, network, and database technology.” Ans. 6. Yet, the Examiner
also acknowledged that he “did not indicate that the claims describe well-
understood, routine and conventional activities in the 101 rejection in this
particular case.” Id.
The prosecution history is consistent with the conclusion that the steps
as an ordered combination provide an inventive concept. During the
prosecution of the application, Appellant distinguished the claims from the
cited prior art in the § 103 rejection on the basis of the T-ID information and
UDP communications. Applicant Remarks (Jun. 24, 2019) 7–11. In
response, the Examiner withdrew the rejection. Advisory Action (Sept. 16,
2019).
The claims in this appeal are distinguishable from Inventor Holdings,
LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017)
where the court held:
The idea that a customer may pay for items ordered from a
remote seller at a third-party’s local establishment is the type of
fundamental business practice that, when implemented using
generic computer technology, is not patent-eligible under Alice,
134 S.Ct. at 2355.
The rejected claims in this appeal provide an improvement to the
conventional way in which payments are processed. The improvement is
implemented with specific computer elements that route payment
information in an unconventional manner. Accordingly, the rejection of all
claims under 35 U.S.C. § 101 is reversed.
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CONCLUSION
In summary:
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–21 101 Eligibility 1–21

REVERSED

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APPENDIX
Figure 1 of the Specification is copied below, annotated with the steps
of claims 1 and 16. The green annotations represent limitations recited in
claim 1; the red annotations represent the steps of claim 16.