MasterCard International Incorporated

Patent Trials and Appeals Board

Jul 1, 2020

14636467 - (D) (P.T.A.B. Jul. 1, 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.
14/636,467 03/03/2015 Cristian Radu P01515-US-
UTIL (M01.361)
7390
125619 7590 07/01/2020
Mastercard International Incorporated
c/o Buckley, Maschoff & Talwalkar LLC
50 Locust Avenue
New Canaan, CT 06840
EXAMINER
ASGARI, SIMA
ART UNIT PAPER NUMBER
3685
NOTIFICATION DATE DELIVERY MODE
07/01/2020 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):
colabella@bmtpatent.com
martin@bmtpatent.com
szpara@bmtpatent.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte CRISTIAN RADU, MEHDI COLLINGE,
and
JOHN GAITANOS
____________________

Appeal 2020-001837
Application 14/636,4671
Technology Center 3600
____________________

Before JOSEPH L. DIXON, DAVID M. KOHUT, and
JON M. JURGOVAN, Administrative Patent Judges.

JURGOVAN, Administrative Patent Judge.

DECISION ON APPEAL

Appellant seeks review under 35 U.S.C. § 134(a) from a Non-Final
Rejection of claims 1, 8, and 25–28, which are all the claims pending in the
application. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.2

1 We use the word “Appellant” to refer to “applicant(s)” as defined in 37
C.F.R. § 1.42. The real party in interest is Mastercard International
Incorporated. (Appeal Br. 2.)
2 Our Decision refers to the Specification (“Spec.”) filed March 3, 2015, the
Non-Final Office Action (“Non-Final Act.”) mailed April 1, 2019, the
Appeal Brief (“Appeal Br.”) filed August 12, 2019, the Examiner’s Answer
(“Ans.”) mailed November 22, 2019, and the Reply Brief (“Reply Br.”) filed
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CLAIMED INVENTION
The claims are directed to a mobile computing device and method
“allowing [the] mobile device to operate as a payment device securely
without a requirement for secure hardware.” (Spec. 1:9–12.) A processor of
the mobile computing device is programmed with a mobile transaction
application, a memory of the mobile computing device comprises a local
database to hold data items for use by the mobile transaction application, and
the mobile transaction application “is adapted to encrypt data items for
storage in the local database [] and to decrypt data items stored in the local
database [] using white-box cryptographic techniques.” (Abstract.)
Independent claims 1 and 25, reproduced below, are illustrative of the
claimed subject matter:
1. A mobile computing device configured for performing
payment transactions, the mobile computing device comprising:
a processor; and
a memory associated with the processor;
the memory storing a local database, the local database
including a plurality of entries, each of said entries including:
(a) an index, (b) an application sequence counter value; and
(c) an encrypted parameter;
the memory storing program instructions, the processor
controlled by the program instructions to perform functions as
follows:
retrieving the index and the application sequence
counter value from one of the entries contained in the local
database;
deriving an entry-specific key Ki based on
(i) a system key KSYS, (ii) the retrieved index, and
(iii) the retrieved sequence counter value; said system key
KSYS having been included in embedded form in said
program instructions; and

January 10, 2020.
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using the derived entry-specific key Ki to decrypt
the encrypted parameter included in said one of the entries
contained in the local database;
the memory further storing a mobile transaction
application, the processor controlled by the mobile transaction
application such that the mobile computing device performs a
payment transaction using the decrypted parameter.

25. A method of performing payment transactions, the method
comprising:
storing a local database in a memory in a mobile
computing device, the local database including a plurality of
entries, each of said entries including: (a) an index,
(b) an application sequence counter value; and (c) an encrypted
parameter;
retrieving the index and the application sequence counter
value from one of the entries contained in the local database;
deriving an entry-specific key Ki based on (i) a system key
KSYS, (ii) the retrieved index, and (iii) the retrieved sequence
counter value; said system key KSYS having been included in
embedded form in program instructions stored in the mobile
computing device;
using the derived entry-specific key Ki to decrypt the
encrypted parameter included in said one of the entries contained
in the local database; and
performing a payment transaction with the mobile
computing device using the decrypted parameter.

(Appeal Br. 18–19 (Claims App.).)

REFERENCES
The prior art relied upon by the Examiner is:
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Name Reference Date
Cooper US 5,563,946 October 8, 1996
Ginter US 5,892,900 April 6, 1999
Flitcroft US 2003/0028481 A1 February 6, 2003
Pourfallah US 2012/0253852 A1 October 4, 2012

REJECTIONS
Claims 1, 8, and 25–28 stand rejected under 35 U.S.C. § 112(a) as
failing to comply with the written description requirement. (Non-Final Act.
8–10.)
Claims 1, 8, and 25–28 stand rejected under 35 U.S.C. § 112(b) as
being indefinite. (Non-Final Act. 10–12.)
Claims 1, 8, and 25–28 stand rejected under 35 U.S.C. § 101 as
directed to non-statutory subject matter. (Non-Final Act. 4–7.)
Claims 1 and 8 stand rejected under 35 U.S.C. § 102(a)(1)/(a)(2) as
anticipated by Cooper. (Non-Final Act. 13–14.)
Claims 1, 25, and 28 stand rejected under 35 U.S.C. § 103 based on
Cooper and Flitcroft. (Non-Final Act. 15–17.)
Claims 8 and 26 stand rejected under 35 U.S.C. § 103 based on
Cooper, Flitcroft, and Ginter. (Non-Final Act. 17.)
Claim 27 stands rejected under 35 U.S.C. § 103 based on Cooper,
Flitcroft, and Pourfallah. (Non-Final Act. 18.)

ANALYSIS
§ 112(a) Written Description Rejections
The written description “must ‘clearly allow persons of ordinary skill
in the art to recognize that [the inventor] invented what is claimed.’” Ariad
Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1345, 1351 (Fed. Cir. 2010)
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(en banc) (citation omitted). The test is whether the disclosure “conveys to
those skilled in the art that the inventor had possession of the claimed
subject matter as of the filing date.” Id.
Moreover, the Federal Circuit also stated that the written description
clause of section 112 has been construed to mandate that the specification
satisfy two closely related requirements—it must describe the manner and
process of making and using the invention so as to enable a person of skill in
the art to make and use the full scope of the invention without undue
experimentation and “it must describe the invention sufficiently to convey to
a person of skill in the art that the patentee had possession of the claimed
invention at the time of the application, i.e., that the patentee invented what
is claimed.” LizardTech, Inc. v. Earth Resource Mapping, Inc., 424 F.3d
1336, 1344–45 (Fed. Cir. 2005) (while the inventor had the intent to cover
generic methods with his patent, he did not disclose enough in the
specification to enable one skilled in the art to make and use the generic
invention and thus did not show possession of the generic claims). The
Federal Circuit has explained that:
The test for determining compliance with the written description
requirement is whether the disclosure of the application as
originally filed reasonably conveys to the artisan that the
inventor had possession at that time of the later claimed subject
matter, rather than the presence or absence of literal support in
the specification for the claim language.

In re Kaslow, 707 F.2d 1366, 1375 (Fed. Cir. 1983) (citations omitted).
In cases where functional claim language recites merely a desired result, the
claim “may do so without describing species that achieve that result[, b]ut
the specification must demonstrate that the applicant has made a generic
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invention that achieves the claimed result . . . by showing that the applicant
has invented species sufficient to support a claim to the functionally-defined
genus.” Ariad Pharms., 598 F.3d at 1349.
The Examiner rejected independent claims 1 and 25 as failing to
comply with the written description requirement because the Specification
lacks sufficient written description for particular limitations recited in these
claims. (Non-Final Act. 8–9; Ans. 7–9.) Specifically, with respect to
claim 1, the Examiner asserts:
[T]he claim[] recite[s] “. . . processor controlled by the program
instructions . . .”, and “. . . processor controlled by the mobile
transaction application . . .” without clearly defining how the
“controlled . . .” is performed. An algorithm or steps/procedure
taken to perform the function “controlled” must be described
with sufficient detail so that one of ordinary skill in the art would
understand how the inventor intended the function to be
performed.

(Non-Final Act. 8–9; see also Ans. 7–8.) And, with respect to claim 25, the
Examiner asserts:
[T]he claim recites “storing . . .”, “retrieving . . .”, “deriving . . .”,
“using . . .”, and “performing . . .” However, the claim
limitations are silent to what component(s) perform the “storing
. . .”, “retrieving . . .”, “deriving . . .”, “using . . .”, and
“performing . . .” Therefore, the claim limitations are broader
than the Specification.

(Non-Final Act. 9 (citing LizardTech Inc., 424 F.3d at 1344–45); see also
Ans. 9.)
We agree with the Examiner. Both claims 1 and 25 recite “retrieving
the index and the application sequence counter value from one of the entries
contained in the local database,” “deriving an entry-specific key Ki based on
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(i) a system key KSYS, (ii) the retrieved index, and (iii) the retrieved sequence
counter value; said system key KSYS having been included in embedded form
in said program instruction,” and “using the derived entry-specific key Ki to
decrypt the encrypted parameter included in said one of the entries contained
in the local database.” (See Appeal Br. 18–19 (claims 1 and 25).) Thus,
claims 1 and 25 recite functional language specifying a desired result
(generation of a decrypted parameter). However, Appellant’s Specification
does not sufficiently describe how the retrieving, deriving, and decrypting
are performed. For example, page 7, line 31 to page 8, line 2, page 8, lines
8–23, page 16, lines 3–22, page 17, lines 2–16, and Figure 9 in the
Specification (cited by Appellant as support, see Appeal Br. 11 and Reply
Br. 2) restate functions/steps recited in the claims and provide generic
descriptions for key derivation and parameter decryption, but do not describe
with sufficient detail the algorithms or operations that perform the claimed
retrieving, deriving, and using/decrypting steps. For example, page 7, line
31 to page 8, line 2, and page 8, lines 8–23 in the Specification merely
describe components of a mobile computing device, but do not describe
which cryptographic, encryption, and decryption techniques to use and how
to use them to perform the parameter’s encryption, the subsequent derivation
of an entry-specific key, and the encrypted parameter’s decryption. Page 16,
lines 3–22, page 17, lines 2–16, and Figure 9 in the Specification describe
how to generically derive an entry-specific key based on three elements
(system key, retrieved index, and retrieved sequence counter value), but do
not explain (i) which entry (of the plurality of entries) in the local database is
selected for retrieval of its index and application sequence counter value, or
how is the index selected for retrieval from the plurality of the entries’
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indices, and (ii) which cryptographic, encryption, and decryption techniques
would be used, and how would they be used to prepare the encrypted
parameter, to derive the entry-specific key, and to decrypt the encrypted
parameter. The Specification (at page 16, lines 3–22, page 17, lines 2–16,
Figure 9, and elsewhere) references generic cryptographic frameworks and
encryption/decryption algorithms—including a “static white-box algorithm”
(SWB), “suitable cryptographic algorithms” such as AES-256, “white-box
cryptography (WBC)” and “white-box cryptographic techniques,” “dynamic
white-box (DWB) cryptography,” “a key derivation algorithm in encryption
and storage of data in the local encrypted database,” “grey-box (GB) model”
and “grey-box techniques,” SWB AES 256-E, AES 256-I, AES-128 E (see
Spec. 4:5–6, 11:2–19, 12:25–27, 13:19–22, 15:6–7, 16:3–28, 17:2–19,
18:10–19, 18:27–28)—but the Specification does not provide sufficient
detail regarding which of these cryptographic, encryption, and decryption
techniques are to be used and more particularly, how are they to be used to
prepare the encrypted parameter EPARAMi (see Spec. 16:10, 16:13) and to
derive the entry-specific key Ki based on system key, retrieved index, and
retrieved sequence counter value so that the derived key Ki enables
decryption of the encrypted parameter.
Appellant’s response to the Examiner’s written description rejections
of claims 1 and 25 (see Appeal Br. 11–12, Reply Br. 2) does not provide
evidence that a skilled artisan would understand the applicant to have
invented, and been in possession of, the full scope of the invention as
broadly and generically recited in claims 1 and 25. See LizardTech, Inc.,
424 F.3d at 1345 (citing O’Reilly v. Morse, 56 U.S. 62, 112–13 (1853)).
Appellant’s response asserts that the language of claims 1 and 25 is
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supported in the Specification, and identifies pages of the Specification
providing such support. (Appeal Br. 11–12; Reply Br. 2.) However, the
issue is not whether the literal language is recited in the Specification, but
whether sufficient functional detail is disclosed in the Specification to show
that the Appellant had possession of the broad features recited in claims 1
and 25. (See Non-Final Act. 8–9; Ans. 7–9.) Here, there is insufficient
detail about how the claimed “retrieving,” “deriving,” and “using . . . to
decrypt” operate—e.g., about how the index is retrieved from the local
database (e.g., which entry is selected for retrieval of its index and sequence
counter value, or how is the index selected from the plurality of entries’
indices) and how an algorithm for “deriving an entry-specific key Ki” would
operate to produce a key that enables decryption of the “encrypted
parameter”—so that one of ordinary skill in the art could conclude that the
inventor invented a cryptographic technique for payment transactions in the
manner claimed. (Id.). Particularly, it is not clear why the Specification’s
generic reference to a multiplicity of cryptographic frameworks and
encryption/decryption algorithms (e.g., SWB, WBC, DWB, GB model,
AES-256, SWB AES 256-E, AES 256-I, and AES-128 E) would entitle the
inventor to claim any and all combinations of such algorithms and
frameworks for achieving the deriving and decrypting steps in claims 1 and
25.
We are thus persuaded by the Examiner’s arguments that Appellant
has not provided sufficient evidence to demonstrate that the inventor
possesses the full scope of the invention as claimed in claims 1 and 25.
Accordingly, we sustain the § 112(a) written description rejections of claims
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1 and 25, and of dependent claims 8 and 26–28 for the reasons stated for
claims 1 and 25 from which they depend. See 37 C.F.R. § 31.47(c)(1)(iv).3

3 In the event of any further prosecution, we suggest the Examiner analyze
whether Appellant’s Specification also enables the full scope of independent
claims 1 and 25 as required by 35 U.S.C. § 112(a). In particular, we suggest
the Examiner analyze whether Appellant’s original Specification contains
sufficient information to enable one skilled in the art to make and use the
claimed invention without undue experimentation—more particularly, to
teach one skilled in the art how to first prepare/encrypt the encrypted
parameter for storage in the local database, and how to derive the entry-
specific key Ki based on system key, retrieved index, and retrieved sequence
counter value so that the derived entry-specific key Ki enables decryption of
the encrypted parameter. For example, the Examiner should analyze
whether the Specification provides an enabling description of key deriving
techniques that are covered by the generically claimed “deriving” recited in
claims 1 and 25. The Examiner should also analyze whether Appellant’s
Specification apprises one skilled in the art of the techniques/algorithms that
may be used to encrypt the encrypted parameter for storage in the local
database, and to derive the entry-specific key Ki based on system key KSYS,
retrieved index, and retrieved sequence counter value so that the derived key
Ki can perform decryption of the encrypted parameter. For example, the
Examiner should analyze whether the Specification’s references to generic
encryption/decryption algorithms (AES-256, SWB AES 256-E, AES 256-I,
AES-128 E, see Spec. 15:7, 16:28, 18:10–28) and reference to generic
cryptographic techniques (e.g., “use [of] static white-box cryptography and
use[ of] a key derivation algorithm in encryption and storage of data in the
local encrypted database,” “static white-box (SWB) and dynamic white-box
(DWB) cryptography,” and “grey-box (GB) model,” see Spec. 4:4–6, 11:1–
20, 12:25–27, 13:19–27, 17:17–19) provide sufficient information to enable
a skilled artisan to understand which cryptographic, encryption, and
decryption techniques to use and how to use them to perform the PARAMi’s
encryption and the subsequent derivation of an entry-specific key Ki. See In
re Knowlton, 500 F.2d 566, 572 (CCPA 1974) (any patent or publication
cited to provide evidence that a particular programming technique is well-
known in the programming art does not demonstrate that one of ordinary
skill in the art could make and use correspondingly disclosed programming
techniques unless both the known and disclosed programming techniques are
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We note the Examiner asserted additional written description
rejections (with respect to particular limitations in dependent claims 8 and
27) with which we do not agree. In particular, the Examiner asserted claim
8 lacks written description support because the Specification is silent
regarding, and lacks an algorithm or steps/procedure for, storing a system
key “‘by the memory’ and ‘. . . in a manner utilizing [software
obfuscation],’” and claim 27 lacks written description support because “the
claim limitations are silent to what component(s) perform the ‘emulating.’”
(Non-Final Act. 9–10; Ans. 8–9.) We agree with Appellant, however, that
the Specification demonstrates Appellant possessed the limitation of claim 8
and adequately describes how a key may be stored in memory in a manner
utilizing software obfuscation. (Appeal Br. 11–12; see Spec. 9:10–15, 10:4–
5, 10:15–16, 11:15–22, 12:21–22, 12:26–27, 14:10–15, 15:1–29, 17:6–12,
18:10–15.) The Specification also demonstrates Appellant possessed the
limitation of claim 27, and adequately describes how a mobile computing
device emulates a contactless payment card. (See Spec. 2:7–11, 2:27–30,
6:18–20, 7:1–2, 8:13–17, 8:24–28, 11:25–27, 22:29–30.)

§ 112(b) Indefiniteness Rejections
The Examiner rejected claims 1 and 8 as “indefinite” on the ground
that they are hybrid claims because the claims are “directed to a product (a

of approximately the same degree of complexity); In re Scarbrough, 500
F.2d 560, 565 (CCPA 1974) (any cited patents which are used by the
applicant to demonstrate that particular box diagram hardware or software
components are old must be analyzed as to whether such patents are
germane to the instant invention and as to whether such patents provide
better detail of disclosure as to such components than an applicant’s own
disclosure); M.P.E.P. 2164, 2164.06(c).
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mobile computing device)” but “also recite[] method steps . . . that are not
attributed to an element of the product.” (Non-Final Act. 10–11 (citing In re
Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1318 (Fed.
Cir. 2011)); Ans. 10.)
Appellant argues the Examiner’s “hybrid” claim rejections are in error
because claims 1 and 8 cover an apparatus capable of particular
functionality, whereby “[i]n claim 1, all of the recited functions are
attributed to a component, namely the processor,” while “in claim 8, the
term ‘is stored’ as used in the claim would be understood by those skilled in
the art to be an attribute of the system key, and not to denote a method step.”
(Appeal Br. 13.)
We agree with Appellant that the Examiner’s “hybrid” claim
rejections of claims 1 and 8 should be reversed. While it is true “a single
claim covering both an apparatus and a method of use of that apparatus” has
been held indefinite, our reviewing court has repeatedly drawn a distinction
between such claims, and claims that “merely use permissible functional
language to describe capabilities of the claimed system” and are, therefore,
not indefinite. MasterMine Software, Inc. v. Microsoft Corp., 874 F.3d
1307, 1313–1316 (collecting and analyzing cases applying IPXL Holdings
LLC v. Amazon.com Inc., 430 F.3d 1377 (Fed. Cir. 2005)). Claims 1 and 8
fall into this second category. Claim 1 recites a “mobile computing device”
comprising a “processor” and a “memory,” the “memory” (i) storing
program instructions (including the embedded system key) that cause the
“processor . . . to perform [the retrieving, deriving, and using] functions,”
and (ii) storing a mobile transaction application that controls the “processor
. . . such that the mobile computing device [that includes the processor]
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performs a payment transaction.” Thus, claim 1 is directed to a mobile
computing device whose components (i.e., processor and memory) have
particular configuration and capabilities, as claimed. Claim 8 is similarly
directed to the mobile computing device whose memory is recited as
securely storing (by software obfuscation storage) particular data (the system
key).
Accordingly, we do not sustain the Examiner’s § 112(b) “hybrid
claim” rejections of claims 1 and 8.
The Examiner also rejects independent claims 1 and 25 for having
unclear scope for the reasons that (i) “[i]t is unclear whether the claim[s 1
and 25] . . . [are] directed to the mobile computing device or to the
combination mobile computing device and local database” or “to the local
database (or the system key),” (ii) “[i]t is unclear whether the claims [1 and
25] are directed to the mobile computing device or to the combination
mobile computing device and program instructions [that include the system
key],” and (iii) claim 1 is “directed to ‘a mobile computing device’ and the
phrase ‘such that the mobile computing device performs . . .’ describes the
mobile computing device in terms of the mobile computing device itself” but
“a device cannot comprise itself.” (Non-Final Act. 11–12; Ans. 10–11.)
Appellant argues the scope of claims 1 and 25 is clear. (Appeal Br.
13.) We agree with Appellant. Particularly, we agree with Appellant that
“[a] person of ordinary skill in the art would readily grasp that claim 1 is
directed to a mobile computing device, and that the phrase in question
[pertaining to a local database] further defines characteristics of the local
database stored in the device memory.” (Appeal Br. 13.) Thus, the scope of
the subject matter embraced by claim 1 is clear, as claim 1 identifies that it is
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directed to a mobile computing device having various components that
include a memory “storing a local database [of entries],” the memory also
“storing program instructions [including an embedded system key].” (See
Appeal Br. 18 (claim 1).) We also agree with Appellant that “a person of
ordinary skill would also readily grasp that claim 25 is directed to a method
of performing payment transactions” using various pieces of data stored in a
database. (Appeal Br. 13.) The scope of the subject matter embraced by
claim 25 is clear, as claim 25 identifies that it is directed to a method of
performing payment transactions by steps of retrieving, deriving, using, and
performing. (See Appeal Br. 19 (claim 25).)
We also disagree with the Examiner that claim 1 is unclear because it
“describes the mobile computing device in terms of the mobile computing
device itself.” (See Non-Final Act. 12.) As Appellant explains, “a person of
ordinary skill would readily understand from the context of this phrase
[(“such that the mobile computing device performs”)], that it aids in further
defining functions performed by the processor.” (Appeal Br. 13.) The scope
of the subject matter embraced by claim 1 is clear, as claim 1 identifies
functionality of the mobile computing device’s components whereby (i) the
processor (of the mobile computing device) is controlled to enable the
mobile computing device to perform a payment transaction, with (ii) the
processor being controlled as such by an application stored on the mobile
computing device’s memory. (See Appeal Br. 18 (claim 1).)
Based on the foregoing, we do not sustain the Examiner’s § 112(b)
“unclear scope” rejections of independent claims 1 and 25, and of their
associated dependent claims 8 and 26–28.
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The Examiner also rejects independent claims 1 and 25 for
“insufficient antecedent basis for ‘the decrypted parameter’ in the claim[s],
because the previous limitation merely recites ‘using . . . to decrypt the
encrypted parameter . . .’ Therefore, the decryption was never performed.”
(Non-Final Act. 12.)
Appellant states the claims’ recitation of “using the derived entry-
specific key . . . to decrypt the encrypted parameter” provides antecedent
basis for the claimed “decrypted parameter,” as a “person of ordinary skill in
the art would readily comprehend that a result of this function/method step”
[(i.e., the “using the derived entry-specific key . . . to decrypt the encrypted
parameter”)] is decryption of the parameter, thereby providing ample
antecedent basis for [the decrypted parameter].” (Appeal Br. 14.) We agree
with Appellant. In light of the claimed “using the derived entry-specific key
Ki to decrypt the encrypted parameter” (as recited in claims 1 and 25), one
of ordinary skill in the art would understand that the recited “decrypted
parameter” indicates the data that is generated by the claimed decrypting the
encrypted parameter. (See Appeal Br. 18–19 (claims 1 and 25).)
Based on the foregoing, we do not sustain the Examiner’s § 112(b)
rejection of independent claims 1 and 25 for insufficient antecedent basis.

35 U.S.C. § 101 Rejection
Patent eligibility is a question of law that is reviewable de novo.
Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012).
Accordingly, we review the Examiner’s § 101 determinations concerning
patent eligibility under this standard.
Patentable subject matter is defined by 35 U.S.C. § 101, as follows:
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Whoever 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.
In interpreting this statute, the Supreme Court emphasizes that patent
protection should not preempt “the basic tools of scientific and technological
work.” Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (“Benson”); Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012)
(“Mayo”); Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014)
(“Alice”). The rationale is that patents directed to basic building blocks of
technology would not “promote the progress of science” under the U.S.
Constitution, Article I, Section 8, Clause 8, but instead would impede it.
Accordingly, laws of nature, natural phenomena, and abstract ideas, are not
patent-eligible subject matter. Thales Visionix Inc. v. United States, 850
F.3d 1343, 1346 (Fed. Cir. 2017) (citing Alice, 573 U.S. at 216).
The Supreme Court set forth a two-part test for subject matter
eligibility in Alice (573 U.S. at 217–18). The first step is to determine
whether the claim is directed to a patent-ineligible concept. Id. (citing
Mayo, 566 U.S. at 76–77). If so, then the eligibility analysis proceeds to the
second step of the Alice/Mayo test in which we “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 (internal quotation marks omitted) (quoting Mayo,
566 U.S. at 72, 79). There is no need to proceed to the second step,
however, if the first step of the Alice/Mayo test yields a determination that
the claim is directed to patent-eligible subject matter.
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The Patent Office has recently revised its guidance for how to apply
the Alice/Mayo test in the 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50 (January 7, 2019) (“the Revised Guidance”).
Under the Revised Guidance, we first look to whether the claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, mental processes, or
certain methods of organizing human activity such as a
fundamental economic practice or managing personal behavior
or relationships or interactions between people); 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)).
84 Fed. Reg. at 51–52, 55.
A claim that integrates a judicial exception into a practical application
applies, relies on, or uses the judicial exception in a manner that imposes 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.
at 54. When the judicial exception is so integrated, then the claim is not
directed to a judicial exception and is patent-eligible under § 101. 84 Fed.
Reg. at 54. Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then evaluate
whether the claim provides an inventive concept. 84 Fed. Reg. at 56; Alice,
573 U.S. at 217–19, 221. Evaluation of the inventive concept involves
consideration of whether an additional element or combination of elements
(1) adds a specific limitation or combination of limitations that are not well-
understood, routine, conventional activity in the field, which is indicative
that an inventive concept may be present; or (2) simply appends well-
understood, routine, conventional activities previously known to the
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industry, specified at a high level of generality, to the judicial exception,
which is indicative that an inventive concept may not be present.
Appellant argues claims 1, 8, and 25–28 together, presenting
arguments directed to independent claim 25. (Appeal Br. 8–11.) As a result,
we select independent claim 25 as the illustrative claim for the group and
address Appellant’s arguments thereto. Independent claim 1 contains
similar limitations.
Step 1
Applying Step 1 of the Revised Guidance (which is unchanged from
the prior guidance) to the present case, we determine independent claim 25
recites a “method,” which is a form of “process,” thereby falling within one
of the categories enumerated under § 101 and satisfying Step 1 of the
Revised Guidance.
Step 2A—Prong One (Does the Claim Recite a Judicial Exception?)
We proceed to apply Step 2A of the Revised Guidance to determine if
claim 25 is “directed to” a judicial exception. As discussed supra, Prong
One of Step 2A under the Revised Guidance is to determine whether the
claim recites a judicial exception including (a) mathematical concepts; (b)
certain methods of organizing human activity; and (c) mental processes.
Reviewing claim 25, we note the claim involves commercial
interactions and sales activities that “perform[] payment transactions,” and
more particularly the activity of “performing a payment transaction with [a]
mobile computing device.” (See Appeal Br. 19 (claim 25).) The claim
therefore recites one of the certain methods of organizing human activity
identified in the Revised Guidance, and therefore, an abstract idea. (See
Revised Guidance, 84 Fed. Reg. at 51–52 (describing an abstract idea
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category of “Certain methods of organizing human activity—fundamental
economic principles or practices (including hedging, insurance, mitigating
risk); commercial or legal interactions (including . . . sales activities or
behaviors; business relations)”); Non-Final Act. 6; Ans. 4.)
Step 2A—Prong Two (Integration into Practical Application)
Although claim 25 recites an abstract idea of a method of organizing
human activity, as provided for in the Revised Guidance, such a claim may
nonetheless be patentable if it recites a particular, practical application of the
abstract idea embodied therein. Bascom Glob. Internet Servs., Inc. v. AT&T
Mobility LLC, 827 F.3d 1341, 1352 (Fed. Cir. 2016).
Accordingly, we proceed to the Prong Two of Step 2A, where we
inquire whether an additional element of the claim integrates the method of
organizing human activity into a practical application. Revised Guidance,
84 Fed. Reg. at 54–55. Such an additional element may reflect an
improvement in the functioning of a computer, or an improvement to
another technology or technical field. Id. at 55; see also McRO, Inc. v.
Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016); Finjan
Inc. v. Blue Coat Systems, Inc., 879 F.3d 1299 (Fed. Cir. 2018); and Core
Wireless Licensing, S.A.R.L. v. LG Electronics, Inc., 880 F.3d 1356 (Fed.
Cir. 2018) (claims were directed to improvements instead of abstract ideas).
Having reviewed the evidence, we disagree with the Examiner’s
findings that
This judicial exception is not integrated into a practical
application because the additional element(s) of the claim(s) such
as a memory, a computing device, and a processor, and
decrypting the data, merely use a computer as a tool to perform
an abstract idea. . . . the additional claim elements “using a key
to decrypt data” is[sic] not indicative of integration into a
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practical application, because the “decryption” does not improve
the functioning of an apparatus (e.g., the processor), or any other
technology or technical field. . . . the claims do not. . . . effect an
improvement in any other technology or technical field.

(Non-Final Act. 6–7; see also Ans. 4–5.) Rather, we agree with Appellant
that claim 25 integrates the abstract idea into a practical application under
the Prong Two of Step 2A. (Revised Guidance, 84 Fed. Reg. at 54–55; see
Appeal Br. 6, 9–10; Reply Br. 2.) Particularly, we agree with Appellant that
claim 25 integrates the abstract idea into a practical application that
“improve[s] the functioning of the apparatus by providing sufficiently robust
security for payment account parameters such that a secure element need not
be incorporated in a payment-enabled mobile device.” (Appeal Br. 9.)
Appellant more particularly explains:
As stated at page 16, line 23 to page 17, line 1 of the
specification, and as would be inferred generally from the
disclosure as a whole by those who are skilled in the art, software
features of the invention provide improved cyber-security for
payment applications, such that, with the claimed software
features, adequate protection from fraudulent attacks is provided
without incorporating a secure element (SE) in a payment-
enabled mobile device. This is an improvement in the technical
field of cyber-security.

(Reply Br. 2.)
Claim 25 recites a combination of additional elements including:
[D]eriving an entry-specific key Ki based on (i) a system
key KSYS, (ii) the retrieved index [from one of the entries
contained in the local database], and (iii) the retrieved sequence
counter value [from the entry contained in the local database];
said system key KSYS having been included in embedded form in
program instructions stored in the mobile computing device;
[and]
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using the derived entry-specific key Ki to decrypt the
encrypted parameter included in said one of the entries contained
in the local database,

which improve security of a payment transaction executed by the mobile
computing device, by using the decrypted parameter in a payment
transaction. (See Appeal Br. 19 (claim 25); Spec. 14:19–23, 16:3–22, 17:5–
23, 18:10–32.) Appellant’s Specification explains that security of mobile
payments is improved even for a mobile payment application and associated
local database located within a mobile device’s application processor such
that “neither [the payment application nor the local database] rely on the
security domain 105 provided within the SIM/USIM 104 [of the mobile
device] or on any other security domain protected by secure hardware.” (See
Spec. 8:19–23, 11:8–22, 13:22–27, Fig. 2.) The Specification explains that
transaction security is improved by using an index, application sequence
counter value, and encrypted parameter associated with the mobile payment
application’s operation on the mobile device:
[The] mobile application 101 [for use in a payment device for
making contactless transactions] is adapted to write to (41) and
read from (42) the encrypted local database 102. The encrypted
local database 102 may contain any parameter needed for the
operation of the mobile application 101 that is potentially
sensitive to the user or any other party, such as a card issuer or a
merchant. . . . [E]ach entry 43 in the encrypted local database 102
has three items: an index 44; an application sequence counter
value 45; and an encrypted parameter 46. . . . The index 44 fixes
the position in the encrypted local database 102 where one
specific parameter is stored. The application sequence counter
(represented pictorially as ASN) value 45 provides a reference to
the transaction during which a relevant operation (resulting in,
typically, writing of the parameter to the database) was
performed. The encrypted parameter (EPARAM) 46 contains
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encrypted content in an appropriate format (such as TLV) for
long term protection.
The inventors have determined that using this approach, it is
possible for the mobile transaction application 101 to be a
generic application that is not initially differentiated for each
user. This means that the application can be downloaded by the
user from an application store and installed in main memory in
the same manner as a normal mobile application.

(Spec. 11:24–12:17.) The Specification provides that Appellant’s mobile
payment technique “allows the use of a generic transaction application [on a
mobile device] that is not personalised to a user without compromising user
or issuer security.” (Spec. 3:29–31, 4:19–21 (“the mobile transaction
application is downloaded to the mobile computing device without
customisation to the mobile computing device or its user”), 16:23–17:12.)
Thus, Appellant’s claim 25 integrates a technique for performing
payment transactions into a process rooted in computer and network
technologies. (See Spec. 11:24–12:17, 16:3–17:16; DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245, 1257–58 (Fed. Cir. 2014) (holding patent-
eligible a claim that “address[es] a business challenge (retaining website
visitors)” by enabling visitors “to purchase products from the third-party
merchant without actually entering that merchant’s website,” thus providing
a “claimed solution . . . necessarily rooted in computer technology in order
to overcome a problem specifically arising in the realm of computer
networks”).) Similar to claim 25, independent claim 1 integrates
performance of payment transactions into a process rooted in computer and
network technologies. (See Appeal Br. 18 (claim 1).)
Because claims 1 and 25 integrate the judicial exception into a
practical application, we find claims 1 and 25, and their dependent claims 8
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and 26–28 are directed to patent-eligible subject matter under § 101.
Accordingly, we do not address Step 2B of the Revised Guidance
(corresponding to step two of the Alice/Mayo test).
For these reasons, we do not sustain the Examiner’s rejection of
claims 1, 8, and 25–28 as directed to non-statutory subject matter under
35 U.S.C. § 101.

§ 102 Rejection
“Anticipation requires the presence in a single prior art disclosure of
all elements of a claimed invention arranged as in the claim.” Connell v.
Sears, Roebuck & Co., 722 F.2d 1542, 1548 (Fed. Cir. 1983); see also
In re Gleave, 560 F.3d 1331, 1334 (Fed. Cir. 2009); In re Buszard, 504 F.3d
1364, 1366 (Fed. Cir. 2007); In re Paulsen, 30 F.3d 1475, 1478–79
(Fed. Cir. 1994). Anticipation is a factual issue. In re Schreiber, 128 F.3d
1473, 1477 (Fed. Cir. 1997).
The Examiner rejects claim 1 as anticipated by Cooper. (Non-Final
Act. 13–14.) The Examiner does not, however, make findings that Cooper
discloses certain functionality recited in claim 1 that the Examiner
determines “indicate[s] the intended use of the processor.” (Id. at 14.)
For example, the Examiner makes no findings that Cooper discloses
“the processor controlled by the mobile transaction application [stored by
the memory] such that the mobile computing device performs a payment
transaction using the decrypted parameter,” as recited in claim 1. (Id.)
Rather, the Examiner concludes that “the recitation: ‘the processor
controlled . . . to . . .’ indicate[s] the intended use of the processor, as it does
not require that the processor perform an operation.” (Id.) The Examiner
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then determines that “the processor taught by Cooper et al. reads on the
claim,” as “the intended use will not differentiate the claim from the
teaching of Cooper.” (Id. (citing Cooper 7:13–8:62, 13:6–14:15, Figs. 2–3
and 18).)
Appellant argues the Examiner’s anticipation rejection is in error
because the Examiner does not identify in Cooper the claimed functions,
which are “positively recited functions performed by the processor.”
(Appeal Br. 14.) We agree.
Claim 1 recites a mobile computing device comprising a processor
controlled by programmed instructions to perform certain functions. For
example, the processor in claim 1 is “controlled by the mobile transaction
application” (stored in the mobile computing device’s memory) “such that
the mobile computing device performs a payment transaction using the
decrypted parameter.” (Appeal Br. 18 (Claim 1).)
When functional language in a claim is associated with programming
or some other structure required to perform the function, that programming
or structure must be present in order to meet the claim limitation. See
Typhoon Touch Techs., Inc. v. Dell, Inc., 659 F.3d 1376, 1380–81 (Fed. Cir.
2011) (discussing Microprocessor Enhancement Corp. v. Texas Instruments,
Inc., 520 F.3d 1367 (Fed. Cir. 2008)); see also In re Noll, 545 F.2d 141, 148
(CCPA 1976) (“[T]he claimed invention . . . comprises physical structure,
including storage devices and electrical components uniquely configured to
perform specified functions through the physical properties of electrical
circuits to achieve controlled results. Appellant’s programmed machine is
structurally different from a machine without that program.”). Regardless of
the structure of the device, the steps of the method (e.g., that the device is
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controlled to perform) recite functions that must be considered. See In re
Lowry, 32 F.3d 1579, 1582 (Fed. Cir. 1994) (“The Patent and Trademark
Office (PTO) must consider all claim limitations when determining
patentability of an invention over the prior art.”) (citing In re Gulack, 703
F.2d 1381, 1385 (Fed. Cir. 1983).
Because the Examiner fails to clearly articulate the reasons as to how
claim 1’s recited functions are disclosed by Cooper “with such information
and references as may be useful in judging of the propriety of continuing the
prosecution of [the] application” (35 U.S.C. § 132), the Examiner’s
“rejection is so uninformative that it prevents the applicant from recognizing
and seeking to counter the grounds for rejection” (Chester v. Miller, 906
F.2d 1574, 1578 (Fed. Cir. 1990)). Thus, the Examiner has not set forth a
prima facie case of unpatentability, and we do not sustain the anticipation
rejection of independent claim 1, and of the associated dependent claim 8,
on the basis discussed above.

§ 103 Rejections
The Examiner finds Cooper’s method of transferring encrypted files
(trial versions of software packages) from a source computer to a target
computer via computer-accessible memory media (such as diskettes or CD-
ROMs to be used on the target computer) teaches steps of the method recited
in claim 25, including the claimed (i) storing a local database including
entries with an index, an application sequence counter value, and an
encrypted parameter, (ii) retrieving the index and the application sequence
counter value from one of the entries contained in the local database, and
(iii) deriving an entry-specific key Ki based on a system key KSYS and based
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on the retrieved index and the retrieved sequence counter value. (Non-Final
Act. 15–16 (citing Cooper 7:13–8:62, 13:6–16:11, 14:15, Fig. 18); Ans. 11–
12.) In particular, the Examiner finds “Cooper . . . teaches a computer
accessible memory media with a file management program (local database)
that stores values such as machine identification, customer number, real key,
interval data.” (Ans. 12 (citing Cooper 14:15–16:16, Figs. 14–20).) The
Examiner also finds:
Cooper further teaches retrieving an index (e.g., a customer
number), and a sequence counter value (e.g., a machine ID) from
the local database (e.g., computer accessible memory media),
and deriving an entry-specific key (e.g., real key) based on a
system key (e.g. product key), the retrieved index (e.g., customer
number), and the retrieved sequence counter value (e.g.,
machine ID).

(Id. (emphases added).) The Examiner then finds “[t]he derived real key of
Cooper is later used to decrypt an encrypted parameter (e.g. encrypted
validation text),” thereby teaching the claimed decryption of the encrypted
parameter. (Id. (citing Cooper 16:17–17:14, Fig. 21); see also Non-Final
Act. 16.) We do not agree.
We agree with Appellant that the Examiner has not shown that
Cooper teaches “retrieving the index and the application sequence counter
value from one of the entries contained in the local database” and “deriving
an entry-specific key Ki based on (i) a system key KSYS, (ii) the retrieved
index, and (iii) the retrieved sequence counter value” as recited in claim 25.
(Appeal Br. 15–16.) As Appellant explains, “Cooper is primarily concerned
with transfers of files in encrypted form, using a key that is unique to a
transfer medium, such as a diskette” but “Cooper is not concerned with
decrypting encrypted parameters stored in database entries” and “fails to
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disclose or suggest retrieving an index and application sequence counter
from an entry in a local database.” (Id. at 15.)
More particularly, Cooper’s customer number is a number assigned by
a software vendor to a customer, the number provided by the vendor to
customer via phone, fax, or mail. (See Cooper 11:41–43, 13:25–27, 15:17–
19.) In contrast, Appellant’s Specification explains that a database index
“fixes the position in the encrypted local database . . . where one specific
parameter is stored.” (See Spec. 12:4–6, 16:2–5, 16:13–16 (referring to “the
row entry identified by Index i”).) Thus, we disagree with the Examiner’s
finding that Cooper’s customer number assigned by vendor to customer
teaches the claimed database index. (See Ans. 12; see also Appeal Br. 15.)
We also disagree with the Examiner’s finding that Cooper’s machine ID
(which identifies a customer’s computer) teaches the claimed application
sequence counter value. (See Ans. 12.) More particularly, Cooper’s
machine ID is “a unique machine identification” of the “user-controlled data
processing system” where a trial software version can be installed. (See
Cooper 11:16–20, 11:43–50, 13:35–38.) In contrast, Appellant’s
Specification describes an application sequence counter value as a value that
“provides a reference to the transaction during which a relevant operation
(resulting in, typically, writing of the parameter to the database) was
performed.” (See Spec. 12:6–9, 16:5–6 and 18–20 (referring to “the number
of the current transaction performed by the application, namely the
application sequence number (ASN)” at a write operation, and “the number
of the transaction when the writing was performed by the application,
namely the then ASN”).) The Examiner’s interpretation of the claimed term
“application sequence counter value” as reading on Cooper’s “machine ID”
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is unduly broad. (See Ans. 12.) Thus, we agree with Appellant that the
Examiner’s reference to Cooper’s machine ID has not shown that Cooper
teaches retrieving an application sequence counter value from an entry in
the local database as claimed.
We further agree with Appellant that “[t]he ‘real key’ described in
Cooper is not derived using a retrieved index for a database entry” and “is
not derived based on a sequence counter value retrieved from the database
entry.” (Appeal Br. 16.) The Examiner’s reference to Cooper’s customer
number and machine ID to produce a key has not shown that Cooper derives
a key based on a retrieved database index and based on a retrieved
application sequence counter value from a local database as required by
claim 25.
The Examiner does not rely upon the additional teachings of Flitcroft,
Pourfallah, and Ginter to cure the above-noted deficiencies of Cooper. As
the Examiner has not identified sufficient evidence to support the rejection
of claim 25, we do not sustain the Examiner’s § 103 rejection of independent
claim 25, independent claim 1 argued for substantially the same reasons as
claim 25, and claims 8 and 26–28 dependent from one of claims 1 and 25.
(Appeal Br. 14, 16.)4

4 In the event of any further prosecution, the Examiner may want to perform
an additional prior art search in the cryptography art, including art in Class
380 (Cryptography, including Subclasses 247–250 (cellular telephone
cryptographic authentication), Subclasses 255–276 (communication using
cryptography), Subclasses 277–286 (key management), and Subclass 287
(electronic signal modification)), Class 711 (Electrical Computers and
Digital Processing Systems: Memory, including Subclass 164 (memory
access requiring authorization code information) and Subclass 216
(hashing)), Class 713 (Electrical Computers and Digital Processing Systems:
Support, including Subclass 150 (multiple computer communication using
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CONCLUSION
The Examiner’s rejection of claims 1, 8, and 25–28 under
35 U.S.C. § 112(a), as failing to comply with the written description
requirement, is AFFIRMED.
The Examiner’s rejection of claims 1, 8, and 25–28 under
35 U.S.C. § 112(b) as being indefinite, is REVERSED.
The Examiner’s rejection of claims 1, 8, and 25–28 under
35 U.S.C. § 101 is REVERSED.
The Examiner’s rejection of claims 1 and 8 under
35 U.S.C. § 102(a)(1)/(a)(2) is REVERSED.
The Examiner’s rejections of claims 1, 8, and 25–28 under
35 U.S.C. § 103 are REVERSED.

In summary:
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1, 8, 25–28 101 Eligibility 1, 8, 25–28
1, 8, 25–28 112(a) Written
Description
1, 8, 25–
28

1, 8, 25–28 112(b) Indefiniteness 1, 8, 25–28
1, 8 102(a)(1)/
(a)(2)
Cooper 1, 8

cryptography) and Subclass 182 (system access control based on user
identification by cryptography)), and Class 726 (Information Security,
including Subclass 2 (access control or authentication) and Subclass 26
(prevention of unauthorized use of data including prevention of piracy,
privacy violations, or unauthorized data modification)). See also further
specifics of CPC G06F than just 21/00 and 21/10.
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1, 25, 28 103 Cooper, Flitcroft 1, 25, 28
8, 26 103 Cooper, Flitcroft,
Ginter
8, 26
27 103 Cooper, Flitcroft,
Pourfallah
27
Overall
Outcome
1, 8, 25–
28

Because we have affirmed at least one ground of rejection with
respect to each claim on appeal, the Examiner’s decision is affirmed.
See 37 C.F.R. § 41.50(a)(1).
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv).

AFFIRMED