James Joseph. Clementi et al.

Patent Trials and Appeals Board

Aug 8, 2019

14274187 - (D) (P.T.A.B. Aug. 8, 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.
14/274,187 05/09/2014 James Joseph Clementi 015444.0956 (6126US1) 4663
139180 7590 08/08/2019
Baker Botts LLP/Bank of America Corporation
2001 Ross Avenue
Suite 900
Dallas, TX 75201
EXAMINER
OYEBISI, OJO O
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
08/08/2019 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):
ptomail1@bakerbotts.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte JAMES JOSEPH CLEMENTI, CLARENCE EDWARD LEE II,
MICHAEL GREIG STOLL, VERLON SAFOLD WATSON III, MELANIE
WOODWORTH, MARY JO STUART, and RONALD E. MEHARG1
____________

Appeal 2018-004944
Application 14/274,187
Technology Center 3600
____________

Before JEAN R. HOMERE, CAROLYN D. THOMAS, and
ADAM J. PYONIN, Administrative Patent Judges.

THOMAS, Administrative Patent Judge.

DECISION ON APPEAL

Appellants seek our review under 35 U.S.C. § 134(a) of the
Examiner’s Final Rejection of claims 1–20, all the pending claims in the
present application (see Claims Appendix). We have jurisdiction over the
appeal under 35 U.S.C. § 6(b).
We REVERSE.
The present invention relates generally to financial transactions
concerning cross border exchanges (see Abstract).

1Appellants name Bank of America Corporation as the real party in interest
(App. Br. 2).
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Independent claim 1, reproduced below, is representative of the
appealed claims:
1. A system, comprising:
an interface operable to:
receive a financial instrument that indicates attributes of
a financial transaction, the attributes comprising one or more of: a
monetary amount, a transaction currency type, a drawee financial
account from which funds are to be withdrawn, a drawee financial
institution that maintains the drawee financial account, a payee
financial account to which funds are to be deposited, and a payee
financial institution that maintains the payee financial account;
one or more processors communicatively coupled to the
interface, the one or more processors associated with the payee
financial institution and operable to:
determine, based on one or more of the attributes of the
financial instrument, whether the financial transaction involves a cross
border exchange from a first jurisdiction to a second jurisdiction, the
second jurisdiction different than the first jurisdiction; and
apply a cross border process in response to determining
that the financial transaction involves the cross border exchange,
wherein to apply the cross border process, the one or more processors
are further operable to communicate an electronic image associated
with the financial instrument to computing resources associated with
the drawee financial institution that are configured to complete the
financial transaction electronically and independently of transporting
a paper copy of the financial instrument between the payee financial
institution and the drawee financial institution;
wherein, at the front end of financial instrument
processing prior to communicating the electronic image to the
computing resources associated with the drawee financial institution
that are configured to complete the financial transaction, the one or
more processors are further operable to:
configure a flag to indicate that the cross border
process applies to the financial instrument;
assign a source reference number to the financial
instrument;
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perform a currency conversion based on a current
exchange rate between the first jurisdiction and the second
jurisdiction; and
map the current exchange rate that was applied
during the currency conversion to the source reference number.

Appellants appeal the following rejection:
Claims 1–20 are rejected under 35 U.S.C. § 101 because the claimed
invention is directed to patent-ineligible subject matter (Final Act. 2–5).
We review the appealed rejections for error based upon the issues
identified by Appellants, and in light of the arguments and evidence
produced thereon. Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010)
(precedential).

ANALYSIS
Rejection under § 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.
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. v. CLS Bank Int’l, 573 U.S. 208,
216 (2014).
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 the 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
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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.”). For example, 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,
69 (1972)).
Recently, the USPTO published revised guidance on the application
of 35 U.S.C. § 101. USPTO’s 2019 Revised Patent Subject Matter
Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Revised Guidance”).
Under the Revised Guidance “Step 2A,” the office first looks 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 MPEP § 2106.05(a)-(c), (e)-(h)). 84 Fed. Reg. at
51–52, 55.
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, does the Office then
(pursuant to the Revised Guidance “Step 2B”) 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
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(4) simply appends well-understood, routine, conventional activities
previously known to the industry, specified at a high level of generality, to
the judicial exception. 84 Fed. Reg. at 56.
Step 2A, Prong 1 (Does the Claim Recite a Judicial Exception?)
With respect to independent system claim 1, and similarly, non-
transitory readable storage medium claim 8 and method claim 15, the
Examiner determines that the claims are directed to the abstract idea of
“processing financial data” (Final Act. 3), which we agree “is a fundamental
economic practice” (id.) and/or commercial or legal interactions, i.e., certain
methods of organizing human activity.
Appellants’ Specification discloses:
Certain embodiments may facilitate the posting of payments across
borders within a shorter time period. Another technical advantage of
an embodiment may be to perform a currency conversion at the front
end of a cross border check transaction, which may allow for applying
a more accurate exchange rate to the transaction and/or may reduce
exposure to exchange rate fluctuation. The currency conversion may
provide currency information for each jurisdiction. For example, in a
transaction between a financial institution in the United States and a
financial institution in Canada, the currency information may be
provided in U.S. dollars and Canadian dollars. Certain embodiments
may provide an end-to-end solution for sending and receiving
electronic images of financial instruments (e.g., checks) across
borders. The end-to-end solution may process an electronic image of
the financial instrument and may include currency conversion and/or
other steps customized to cross border applications.
Spec. 3:11–26.
Claim 1 recites at least the following limitations: (1) “receive a
financial instrument that indicates attributes,” (2) “determine whether the
financial transaction involves a cross border exchange,” (3) “apply a cross
border process . . . communicate an electronic image,” (4) “configure a flag
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to indicate that cross border process applies,” (5) “assign a source reference
number,” (6) “perform a currency conversion,” and (7) “map the current
exchange rate . . . to the source reference number.” These limitations, under
their broadest reasonable interpretation, recite fundamental economic
practice akin to mitigating risk because the limitations all recite operations
that would ordinarily take place in a commercial environment. Alice, 573
U.S. at 219–20 (concluding that use of a third party to mediate settlement
risk is a “fundamental economic practice” and thus an abstract idea); id.
(describing the concept of risk hedging identified as an abstract idea in Bilski
as “a method of organizing human activity”); Inventor Holdings, 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.”); OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d
1359, 1362–63 (Fed. Cir. 2015) (concluding that claimed concept of “offer-
based price optimization” is an abstract idea “similar to other ‘fundamental
economic concepts’ found to be abstract ideas by the Supreme Court and
this court”); Content Extraction & Transmission LLC v. Wells Fargo Bank,
Nat’l Ass’n, 776 F.3d 1343, 1347 (Fed. Cir. 2014) (finding claims directed
to collecting data, recognizing certain data within the collected data set, and
storing the recognized data drawn to an abstract idea and noting that
“humans have always performed these functions”).
Although Appellants contend that the Examiner’s characterization of
the claims “is a gross oversimplification of the claims and is inconsistent
with [prior] USPTO Guidelines” (see App. Br. 19), we note that the
Examiner’s condensing of the claims to “processing financial data” (see
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Final Act. 3) is simply a high level of abstraction. See Apple, Inc. v.
Ameranth, Inc., 842 F.3d 1229, 1240–41 (Fed. Cir. 2016) (“An abstract idea
can generally be described at different levels of abstraction. As the Board
has done, the claimed abstract idea could be described as generating menus
on a computer, or generating a second menu from a first menu and sending
the second menu to another location. It could be described in other ways,
including, as indicated in the specification, taking orders from restaurant
customers on a computer.”). Whichever way the concept is described, we do
not see that Appellants have adequately shown that claim 1 does not recite
an abstract idea as detailed above. Just because the claim includes more
words than the phrase the Examiner uses as an articulation of the abstract
idea to which he/she found the claim to be directed to is an insufficient
reason to persuasively argue that claim 1 does not recite an abstract idea.
Further, the identified abstract idea need not encompass every claim
limitation. Otherwise, there would be no need for step two of the Alice
inquiry. Alice, 134 S. Ct. at 2355.
Therefore, for at least the aforementioned reasons, we agree with the
Examiner that claim 1 recites an abstract idea, which we conclude is “a
fundamental economic practice and/or commercial or legal interactions.”
Step 2A—Prong 2 (integration into Practical Application) 2

2 We acknowledge that some of the considerations at Step 2A, Prong 2,
properly may be evaluated under Step 2 of Alice (Step 2B of the Office
revised guidance). For purposes of maintaining consistent treatment within
the Office, we evaluate them under Step 1 of Alice (Step 2A of the Office
revised guidance). See Revised Guidance, 84 Fed. Reg. at 55 n.25, 27–32.

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Under the Revised Guidance, we now must determine if additional
elements in the claims integrate the judicial exception into a practical
application (see MPEP § 2106.05(a)–(c), (e)–(h)).
Here, we discern additional element (or combination of elements)
recited in Appellants’ representative claim 1 that integrates the judicial
exception into a practical application. See Revised Guidance, 84 Fed. Reg.
at 54–55 (“Prong 2”). For example, we conclude that Appellants’ claimed
additional elements (e.g., “an interface” and “one or more processors”) in
combination with other elements do improve the functioning of a computer
or other technology. See MPEP §§ 2106.05(a)–(c), (e)–(h).
For example, Appellants specifically contend, and we agree, that their
“claims address problems that arise when a customer attempts to transact a
cross border exchange at a particular exchange rate, but misses the exchange
rate because the market moved before the transaction is completed” (App.
Br. 12), and “[l]ike the claims in Trading Technologies, Appellants’ claims
recite specific structure and functionality to address the identified problems”
(id.), i.e., “to better keep pace with exchange rate fluctuations” (id.).
For instance, Appellants’ Specification states:
Certain financial transactions may involve cross border processing.
As an example, a payor may have a checking account in Canada. The
payor may write a check to a payee in the United States. The payee
may present the check to a bank in the United States for payment. To
draw funds from the payor’s checking account in Canada, the bank in
United States may receive the paper check, sort and process the
paper check, and send the paper check to the bank in Canada for
clearing. Currency conversion is performed on the back end. Thus,
after the bank in Canada receives and sorts the paper check, the paper
check is manually processed, which includes manually stamping the
check with the exchange value.
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Spec. 2:2–10.
In conventional, paper-driven contexts, information associated with a
financial transaction is typically tracked using a posting number that
the drawee financial institution (e.g., Bank B) assigns at the end of the
process when the financial 30 transaction is posted. Embodiments of
the present invention assign source reference number 148 earlier in
the process. For example, source reference number 148 can be
assigned prior to sending output 300 to the drawee financial institution
and prior to posting the payment. Assigning source reference number
148 early allows for tracking information generated before
communicating output 300 to the drawee financial institution. For
example, currency conversion information can be mapped to source
reference number 148 at the time that the currency conversion is
performed. Any relevant information can be mapped to source
reference number 148, including image 25 of the financial instrument
or information generated later in the process, such as a posting record
for the financial transaction.
Id. at. 12:27–13:7. In other words, Appellants’ Specification describes a
method that allows financial institutions to more efficiently and accurately
perform cross-border currency conversion using electronic systems by using
the interface to determining the conversion rate at the front end of the
transaction, instead of waiting for processing of the document at the back
end when the conversion rate may have fluctuated.
Likewise, in Trading Technologies, the district court found that the
claims are directed to solving a problem that existed with prior art GUIs,
namely, that the best bid and best ask prices would change based on updates
received from the market. There was a risk with the prior art GUIs that a
trader would miss her intended price as a result of prices changing from
under her pointer at the time she clicked on the price cell on the GUI.
Trading Techs. Int'l, Inc. v. CQG, Inc., No. 05-cv-4811, 2015 WL 774655
*4 (N.D. 111. Feb. 24, 2015). Similarly, the Federal Circuit found
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[t]he patents explain problems that arise when a trader attempts to enter an
order at a particular price, but misses the price because the market moved
before the order was entered and executed. It also sometimes occurred that
trades were executed at different prices than intended, due to rapid market
movement. This is the problem to which these patents are directed.
Trading Techs., 2017 WL 192716 at *1.
To solve this problem, the invention keeps prices static in positions,
and allows quantities at each price to change. Trading Techs., 2015 WL
774655 at *4, Trading Techs., 2017 WL 192716 at *1 (“the system pairs
orders with the static display of prices and prevents order entry at a changed
price”). In this way, Trading Technologies is consistent with precedent
recognizing that specific technologic modifications to solve a problem or
improve the functioning of a known system generally produce patent-
eligible subject matter. See, e.g., DDR Holdings, LLC v. Hotels.com, L.P.,
773 F.3d 1245 (Fed. Cir. 2014); MCRO, Inc. v. Bandai Namco Games
America Inc., 837 F.3d 1299, 1315 (Fed. Cir. 2016).
The present application notes a similar problem, i.e., conventional
cross border currency conversion performed at the back end may not
accurately reflect the rate intended by the user. Here, the claimed invention
makes a specific technologic modification, i.e., an interface that performs
front end financial instrument processing, including configure a flag, assign
a source reference number, and map current exchange rate to the source
reference number.
As such, like the claims in Trading Technologies, we determine that
Appellants’ claims are patent eligible, here by allowing financial
instrument’s conversion rates to be determined at the front end interface
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which results in a more accurate processing of cross border financial
instruments, i.e., reflecting a more accurate conversion rate.
For at least the reason noted supra, we determine that although the
claims recite a judicial exception, the claims integrate that exception into a
practical application. Therefore, the Examiner’s rejection of claims 1–20
under 35 U.S.C. § 101 is reversed.

DECISION
We reverse the Examiner’s § 101 rejection of claims 1–20.

REVERSED