Harsha Ramalingam

Patent Trials and Appeals Board

Jun 8, 2020

2019005736 (P.T.A.B. Jun. 8, 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.
13/313,912 12/07/2011 Harsha Ramalingam AM2-0726US 8526
136607 7590 06/08/2020
Lee & Hayes P.C.
601 West Riverside Avenue
Suite 1400
Spokane, WA 99201
EXAMINER
REFAI, RAMSEY
ART UNIT PAPER NUMBER
3668
NOTIFICATION DATE DELIVERY MODE
06/08/2020 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):
lhpto@leehayes.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte HARSHA RAMALINGAM
Appeal 2019-005736
Application 13/313,912
Technology Center 3600
Before CHARLES N. GREENHUT, MICHAEL L. HOELTER, and
ANNETTE R. REIMERS, Administrative Patent Judges.

GREENHUT, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 3, 6–12, and 29. See Final Act. 1.
Claims 1, 13–17, 20–26, 30, 31, and 34–36 are withdrawn from
consideration and claims 2, 4, 5, 18, 19, 27, 28, 32, and 33 have been

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 Amazon
Technologies, Inc., which “is a wholly owned subsidiary of Amazon.com,
Inc. Appeal Br. 3.
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canceled. See id.; Appeal Br. 24–25, 28–30 (Claims App.). We have
jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
CLAIMED SUBJECT MATTER
The claims are directed to a system for virtual point-of-sale (POS)
devices. Claim 3, reproduced below, is illustrative of the claimed subject
matter:
3. A system comprising:
one or more processors;
a network interface;
memory coupled to the one or more processors, the
memory comprising executable instructions that when executed
by the one or more processors cause the system to:
determine a volume of transactions occurring or
estimated to occur at a merchant location;
determine, based at least partly on the volume of
transactions, a number of virtual instances of a point-of-
sale (POS) device to instantiate on behalf of a merchant on
one or more network-accessible computing devices of the
system located remote from the merchant location;
associate the number of virtual instances of the POS
device with one or more computing devices located at the
merchant location for a time period based at least in part
on the volume of transactions occurring or estimated to
occur at the merchant location during the time period,
wherein associating the number of virtual instances of the
POS device with the merchant location includes
establishing a secure connection between the number of
virtual instances of the POS device and a merchant
network;
determine that a customer-operated device is
located at the merchant location based at least partly on
determining that the customer-operated device is less than
a threshold distance from the merchant location;
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receive, via the network interface and by an
instantiated virtual instance of the POS device, a purchase
request from the customer-operated device, the purchase
request comprising payment information and an
identification of a good or service;
provide, by the instantiated virtual instance of the
POS device, the payment information to a payment
processor and receive, by the instantiated virtual instance
of the POS device, an authorization from the payment
processor to fulfill the purchase request; and
generate, by the instantiated virtual instance of the
POS device, a receipt evidencing the authorization from
the payment processor and identifying the good or service.
REJECTIONS
Claims 3, 6–12, and 29 are rejected under 35 U.S.C. § 101 because the
claimed invention is directed to a judicial exception (i.e., a law of nature, a
natural phenomenon, or an abstract idea) without significantly more. Final
Act. 10.
Claims 3, 6–12, and 29 are rejected under 35 U.S.C. § 103(a) as being
unpatentable over Paradise (US 2011/0145093 A1, published June 16, 2011)
and “Official Notice.” Final Act. 14.
OPINION
Eligibility
Principles of Law
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
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ideas” are not patentable. E.g., Alice Corp. 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. See Alice, 573 U.S. 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.”
Id. 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.
252, 267–68 (1853))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
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
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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 (internal 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. (alteration in the 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.
In January of 2019, the PTO published revised guidance on the
application of § 101. 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY
GUIDANCE, 84 Fed. Reg. 50 (Jan. 7, 2019) (hereinafter “Memorandum”).
Step 2A of that guidance involves determining 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., Rev.
08.2017, 2018)).
If a claim (1) recites a judicial exception and (2) does not integrate
that exception into a practical application, Step 2B of that guidance involved
determining whether the claim:
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(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.
See Memorandum.
Analysis
Statutory Category
Claim 3 recites “[a] system comprising: one or more processors; a
network interface; [and a] memory,” and therefore, is a machine.

Recitation of Judicial Exception
The Examiner reasonably determined that: “[t]he claims are directed
towards the concept of conducting a secure point of sale (POS) transaction
and load balancing. This concept is considered a fundamental economic
practice, [a] method of organizing human activities, and an idea of itself,
which is merely an abstract idea.” Final Act. 10.2 See Inventor Holdings,

2 In the Answer, the Examiner pivots in determining that certain steps of
claim 3 “can be performed by a user mentally . . . and fall within the Mental
Processes grouping.” Ans. 5. However, determining whether claim 3 recites
both a fundamental economic practice and a mental process, does not alter
our analysis below. The Examiner states that “[i]t is noted that the step of
determining that a customer device is located at the merchant location does
not require the step to be performed by a computer and nothing in the
limitation precludes the step from being performed entirely by a human.”
Ans. 6. However, the Examiner does not explain how––and thus, fails to
establish that––determining the customer-operated device is less than a
threshold distance from the merchant location and subsequent “instantiated
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LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378–79 (Fed. Cir. 2017)
(holding that concept of “local processing of payments for remotely
purchased goods” is a “fundamental economic practice, which Alice made
clear is, without more, outside the patent system.”).
Claim 3 recites that the memory comprises executable instructions
causing the system to: (1) “determine a volume of transactions occurring or
estimated to occur at a merchant location;” (2) “determine, . . . , a number of
virtual instances of a point-of-sale (POS) device to instantiate on behalf of a
merchant on one or more network-accessible computing devices of the
system located remote from the merchant location;” (3) “associate the
number of virtual instances of the POS device with one or more computing
devices . . . based at least in part on the volume of transactions occurring or
estimated to occur at the merchant location during the time period;” (4)
“receive, . . . a purchase request from the customer-operated device;” (5)
“provide, . . the payment information;” and (6) “generate, . . . a receipt
evidencing the authorization from the payment processor.” Thus, from the
above limitations (1) to (6), claim 3 recites steps for “conducting a secure
point of sale transaction and load balancing,” meaning claim 3 recites “a
fundamental economic practice.” Paragraph 2 of Appellant’s Specification
discloses that “[p]roviding brick-and-mortar merchants an option to receive
credit card and other payments from customers at merchant locations
without requiring actual, tangible POS devices would provide flexibility,
lower costs, and greater convenience for merchants.” Thus, the Specification
makes it very clear that, virtual instances of a point-of-sale (POS) provides

virtual instance of the POS device” and generation of a receipt can be
“performed entirely by a human mind.”
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similar benefits as those of physical instances of POS, which is a
fundamental economic practice. When claimed in a certain way, a claim may
still recite a ‘fundamental economic practice’ even if it recites the incidental
use of ‘processors,’ ‘a network interface,’ or ‘a memory.’”

Practical Application
Claim 3 cites “determin[ing] that a customer-operated device is
located at the merchant location based at least partly on determining that the
customer-operated device is less than a threshold distance from the merchant
location.” Appellant argues that claim 3 “solve[s] a number of technical
problems associated with providing a ‘simple and secure way to receive
credit card payments at a physical merchant location without a point-of-sale
(POS) device that includes a card reader’ and ‘prevent[ing] fraudulent or
mistaken transactions.’” Appeal Br. 8 (quoting Spec. ¶¶ 1, 46). Appellant
points out that the Specification discloses “[i]n some implementations, the
mobile computing device 104 may be location aware, . . . a ‘geolocation,’
may be provided to the mobile computing device 104 by a satellite such as a
global positioning system (GPS) satellite,” and “[t]he geolocation of the
mobile computing device 104 may be used to validate the purchase by
confirming that the mobile computing device 104 is located at or near (e.g.,
within a threshold distance) the merchant location 106 at the time the user
102 attempts to purchase the good and/or service [108].” Id. at 9 (quoting
Spec. ¶ 27). Accordingly, we agree with Appellant that claim 3 integrates
the abstract idea (a fundamental economic practice, i.e., conducting a secure
point of sale (POS) transaction and load balancing) into a practical
application (“providing an additional automated technique for validating a
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purchase based on a distance proximity” at a physical merchant location
without a point-of-sale (POS) device) because claim 3 recites “determin[ing]
that a customer-operated device is located at the merchant location based at
least partly on determining that the customer-operated device is less than a
threshold distance from the merchant location.”

Conclusion
Accordingly, we conclude that the judicial exception recited in claim
3 is integrated into a practical application, and thus, claim 3 is eligible
because it is not directed to the judicial exception, itself. The rejection of
claim 3 under 35 U.S.C. § 101 is reversed. Dependent claims 6–12 and 29
incorporate all of the limitations of claim 3 and the rejection of these claims
is reversed for the same reasons.

Obviousness
Claim 3 is representative of claims 3, 7, 8, and 29 pursuant to
37 C.F.R. § 41.37(c)(1)(iv). See Appeal Br. 16–18. Appellant argues claims
6 and 9–12 individually, and we thus address these claims separately below.3

Claims 3, 7, 8, and 29:
The Examiner finds that Paradise discloses a system having most of
the limitations of claim 3. Final Act. 14–15. The Examiner acknowledges
that Paradise fails to disclose the steps of: (1) “determin[ing] a volume of
transactions occurring or estimated to occur at a merchant location;” (2)

3 Although Appellant groups claims 6–12 and 29 together, Appellant does
not discuss claims 7, 8, and 29 specifically. Appeal Br. 18–21.
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“determin[ing], based at least partly on the volume of transactions, a number
of virtual instances of a point-of-sale (POS) device to instantiate on behalf of
a merchant on one or more network-accessible computing devices of the
system located remote from the merchant location;” and (3) “associat[ing]
the number of virtual instances of the POS device with one or more
computing devices located at the merchant location for a time period based
at least in part on the volume of transactions occurring or estimated to occur
at the merchant location during the time period, . . . .” Id. at 15. The
Examiner, however, finds that these limitations are “merely network load
balancing (using additional resources to increase bandwidth and
processing)” and takes Official Notice that
both the concept and advantage[s] of this feature [are]
notoriously old and well-known in the computer environment
as well as the retail environment (in the context of staffing
resources). Advantages include distributing workloads,
avoiding overload, minimizing response times, and optimizing
resources. This is evidenced [at least by] Ferris (US
9,703,609[]).
Id. at 15–16. Appellant contends that the Examiner’s cited passages of Ferris
simply describes a variety of parameters, such as a defined time period, are
set for a needed machine or process, rather than associating instantiated
virtual machines instances with certain computing devices at a particular
location. Appeal Br. 17–18. Appellant’s contention is unpersuasive in that
the Examiner already finds that Paradise discloses the instantiated virtual
machines instances are associated with computing devices at a particular
location. See Final Act. 14–15. Further, the Examiner correctly responds that
Ferris’ “system can determine how many resources are needed, such as the
amount of virtual machines, amount of processing power, etc., that is
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required based on current usage, computing power, resources utilized, etc.”
Ans. 15 (citing Ferris 5:4–6:56; 10:15–57). Notably, Ferris discloses that
“[t]he valuation engine 235 can be configured to determine the current usage
of the pool of resources 225 in order to value the computing resources based
on need.” Ferris 10:20–22. Thus, Ferris supports the Examiner’s Official
Notice of network balancing (using additional resources to increase
bandwidth and processing) being notoriously old and well-known.

Claim 6:
Claim 6 recites “obtain[ing] seed information . . .” and “generat[ing] a
validation image . . . .” Appellant argues that “the Office appears to skip
claim 6 in its substantive rejections.” Appeal Br. 18. The Examiner correctly
responds that “[t]he claim was addressed on page 18 of the Final Action
(bullet #13).” Ans. 16. Notably, in the Final Office Action, the Examiner
stated “[a]s per claim 6, it contains similar limitations as claim 9 above and
therefore is rejected under the same rationale.” Final Act. 18.

Claim 9:
Claim 9 recites similar limitations as claim 6 and further recites “the
validation data including at least one of an image or text.” The Examiner
finds that Paradise discloses validation data that is either an image or a text
on a receipt. Final Act. 17 (citing Paradise ¶¶ 67–68; Figs. 3A–3B). The
Examiner acknowledges that Paradise fails to disclose seed information. Id.
The Examiner, however, finds that using seed information is “obvious as a
matter of design choice” because validation data is already used by Paradise
and “Applicant has not disclosed that doing so [(using seed information)]
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would solve any stated problem or is for any particular purpose and it
appears that the invention would perform equally well if the validation data
was generated by any unique information provided by the merchant.” Id.
Appellant argues that the Examiner made an improper conclusory statement
and “has pointed to no case law . . .” in rejecting claim 9. Appeal Br. 19.
This argument is unpersuasive in that Appellant does not dispute the
Examiner’s rationale that seed information would not solve any problem that
is not already resolved by using validation data. See In re Chu, 66 F.3d 292,
298–99 (Fed. Cir. 1995) (“design choice” is appropriate where the applicant
fails “to set forth any reasons why the differences between the claimed
invention and the prior art would result in a different function or give
unexpected results”).

Claim 10:
Claim 10 recites “wherein the seed information is changed at a
frequency specified by the merchant.” We agree with Appellant that the
Examiner incorrectly finds that in paragraphs 68–70, Paradise fails to
disclose different visual indicators are changed at a frequency (Appeal Br.
19–20) and that claim 10 does not recite merely non-functional descriptive
language (Reply Br. 9–10). Nonetheless, as discussed above for claim 9,
Appellant does not dispute the Examiner’s rationale that seed information
(and thus, regardless of changing the seed information at any frequency)
would not solve any problem that is not already resolved by using validation
information. In other words, seed information at a particular frequency, is
also obvious as a matter of design choice.

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Claim 11:
Claim 11 recites “the receipt including an invalidate button.”
Appellant argues that in none of the cited passages and figures, does
Paradise disclose this limitation. Appeal Br. 20. The Examiner responds that
this feature is merely an automation of an invalidation process and “it would
have been an obvious matter of design choice since the Appellant has not
disclosed that doing so would solve any stated problem or is for any
particular purpose and it appears that the invention would perform equally
well if the merchant invalidates the receipt using any method, such as the
method in Paradise.” Ans. 19. Appellant does not respond and thus does not
explain the criticality of having an invalidate button, rather than having a
person invalidate a receipt. See Reply Br., passim. Accordingly, Appellant
does not apprise us of Examiner error.

Claim 12:
Claim 12 recites “receiv[ing] an indication of a location of an
additional customer-operated device” and “prevent[ing] the additional
customer-operated device from completing a purchase associated with an
additional purchase request based at least partly on determining that the
location of the additional customer-operated device is more than the
threshold distance from the merchant location.” Appellant contends that in
paragraph 91 as cited by the Examiner, Paradise does not disclose these
limitations. Appeal Br. 20–21. The Examiner correctly responds that
because Paradise discloses in paragraph 53 the customer’s device must be
within a sufficient proximity, Paradise thus discloses that the customer’s
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device is prevented it from operating outside a threshold distance. Ans. 19.
Notably, Paradise discloses
mobile device 140 may have a geographic self-locating
capability, such as a Geographic Positioning System (GPS),
receiver or other location system and may in some
embodiments transmit its location information to purchase
facilitating server 160 at various times to receive services from
purchase facilitating server 160. For example, . . . mobile
device 140 may in some embodiments transmit its geographic
location to purchase facilitating server 160 along with the
image and/or product identifier, such that purchase facilitating
server 160 can identify the correct retail establishment (e.g., the
retail establishment in which the mobile device and its user
currently are located) with which to transact the purchase.
Paradise ¶ 53 (emphasis added).
In view of the foregoing discussion, we agree with the Examiner’s
decision to reject claims 3, 6–12, and 29 based on Paradise and Official
Notice.
CONCLUSION
The Examiner’s rejection of claims 3, 6–12, and 29 as being patent
ineligible is reversed.
The Examiner’s rejection of claims 3, 6–12, and 29 over prior art is
affirmed.
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DECISION SUMMARY
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
3, 6–12, 29 101 Eligibility 3, 6–12, 29
3, 6–12, 29 103(a) Paradise, Official
Notice
3, 6–12, 29
Overall
Outcome
3, 6–12, 29

TIME PERIOD FOR RESPONSE
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1)(iv).
AFFIRMED