MasterCard International Incorporated

Patent Trials and Appeals Board

Aug 19, 2020

14883835 - (D) (P.T.A.B. Aug. 19, 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.
14/883,835 10/15/2015 Steve Hubbard P02035-US-
UTIL (M01.360)
1012
125619 7590 08/19/2020
Mastercard International Incorporated
c/o Buckley, Maschoff & Talwalkar LLC
50 Locust Avenue
New Canaan, CT 06840
EXAMINER
NORMAN, SAMICA L
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
08/19/2020 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 STEVE HUBBARD and SHERYL J. LOCK

____________

Appeal 2019-005915
Application 14/883,835
Technology Center 3600
____________

Before KALYAN K. DESHPANDE, CHARLES J. BOUDREAU, and
SHARON FENICK, Administrative Patent Judges.

FENICK, 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 1–17. We have jurisdiction under
35 U.S.C. § 6(b)(1).
We AFFIRM.

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. Appellant identifies Mastercard International Incorporated
as the real party in interest. Appeal Br. 2.
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CLAIMED SUBJECT MATTER
Appellant’s invention relates to cardholder authentication during
online transactions. See Spec. 1:2–10.
Claims 1 and 10 are independent. Claim 1, reproduced below, is
illustrative of the subject matter on appeal:
1. A method for authorizing an online purchase transaction,
comprising:
receiving, by a merchant plug-in (MPI) application of a
merchant server computer from an issuer access control server
(ACS) during an online transaction, a cardholder authentication
message comprising an enhanced accountholder authentication
variable (AAV) indicative of a type of cardholder authentication;
transmitting, by the MPI application to a payment gateway
server computer, a purchase transaction authorization request
message including cardholder data, purchase transaction data
and the enhanced AAV;
receiving, by the MPI application from the payment
gateway server computer, a purchase transaction authorization
response message, wherein the purchase transaction
authorization response message comprises one of a transaction
authorization message or a transaction denied message;
displaying, by the merchant server computer on a
merchant webpage, the purchase transaction authorization
response message; and
storing, by the MPI application in an MPI database, the
purchase transaction authorization response message and the
enhanced AAV in association with the cardholder data.
Appeal Br. 24 (Claims Appendix).
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REJECTION
Claims 1–17 stand rejected under 35 U.S.C. § 101 as being directed to
non-statutory subject matter. Final Act. 2–9; Ans. 3–4.
OPINION
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter, or [a] new and useful
improvement thereof.” 35 U.S.C. § 101. However, the U.S. Supreme Court
has long interpreted § 101 to “contain[] an important implicit exception:
Laws of nature, natural phenomena, and abstract ideas are not patentable.”
Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014) (quoting Ass’n for
Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)).
In Alice, the Supreme Court reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66, 75–77 (2012) “for distinguishing patents
that claim laws of nature, natural phenomena, and abstract ideas from those
that claim patent-eligible applications of those concepts.” Alice, 573 U.S. at
217. The first step in this analysis is to “determine whether the claims at
issue are directed to one of those patent-ineligible concepts,” e.g., to an
abstract idea. Id. Concepts determined to be abstract ideas include certain
methods of organizing human activity, such as fundamental economic
practices or commercial interactions (id. at 219–20; Bilski v. Kappos, 561
U.S. 593, 611 (2010); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715
(Fed. Cir. 2014)); mathematical formulas (Parker v. Flook, 437 U.S. 584,
594–95 (1978)); and mental processes (Gottschalk v. Benson, 409 U.S. 63,
67 (1972)). If it is determined that the claims are directed to a patent-
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ineligible concept, the second step of the analysis requires consideration of
the elements of the claims “individually and ‘as an ordered combination’” to
determine whether there are additional elements that “‘transform the nature
of the claim’ into a patent-eligible application.” Alice, 573 U.S. at 217
(quoting Mayo, 566 U.S. at 78, 79). “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. at 221
(alterations in original) (quoting Mayo, 566 U.S. at 77). In other words, the
claims must contain an “inventive concept,” or some element or combination
of elements “sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the [abstract idea] itself.” Id. at 217–
18 (quoting Mayo, 566 U.S. at 72–73). “[M]erely requir[ing] generic
computer implementation[] fail[s] to transform that abstract idea into a
patent-eligible invention.” Id. at 221.
In January 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) (“Revised Guidance”).2 “All
USPTO personnel are, as a matter of internal agency management, expected
to follow the guidance.” Id. at 51; see also October 2019 Update at 1.
Consistent with3 that guidance, we first look to whether the claim recites:

2 In October 2019, in response to received public comments, the PTO issued
a further memorandum clarifying the Revised Guidance. USPTO
Memorandum, October 2019 Update: Subject Matter Eligibility (Oct. 17,
2019), available at https://www.uspto.gov/sites/default/files/documents/
peg_oct_2019_update.pdf (“October 2019 Update”).
3 Our reviewing court has explained that the Revised Guidance “cannot
modify or supplant the Supreme Court’s law regarding patent eligibility, or
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(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
organizing human activity such as fundamental economic
practices, or mental processes) (“Step 2A, Prong 1”); and
(2) additional elements that integrate the judicial exception into
a practical application (see MPEP §§ 2106.05(a)–(c), (e)–(h)
(9th ed. Rev. 08.2017, Jan. 2018)) (“Step 2A, Prong 2”).4
See Revised Guidance, 84 Fed. Reg. at 52–55.
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then (under “Step
2B”) look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is not “well-understood, routine, and 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 Revised Guidance, 84 Fed. Reg. at 56.
The Examiner determines that “[t]he claimed concept of using a
cardholder authentication message and a purchase transaction authorization

[our reviewing court’s] interpretation and application thereof.” In re Rudy,
956 F.3d 1379, 1383 (Fed. Cir. 2020). Our decision is based upon
applicable statutory authority and precedent of the United States Supreme
Court and Court of Appeals for the Federal Circuit and applies the analytical
framework set forth in the Revised Guidance in a manner consistent with
authority and precedent.
4 This evaluation is performed by (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception, and
(b) evaluating those additional elements individually and in combination to
determine whether the claim as a whole integrates the exception into a
practical application. See Revised Guidance, 84 Fed. Reg. at 54–55 (Section
III.A.2).
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request message to receive a purchase transaction response message . . . is a
fundamental economic practice,” and that the claims thus recite an abstract
idea. Ans. 3–4. According to the Examiner, the recited steps are similar to
“concepts that have been identified as abstract by the courts, such [as]
collecting information, analyzing it, and displaying certain results of the
collection and analysis.” Final Act. 3 (citing Elec. Power Grp., LLC v.
Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016)). The Examiner further
determines that the abstract idea is not integrated into a practical application
and that the claims do not include additional elements that are sufficient to
amount to significantly more than the abstract idea because the additionally
recited elements are computer components “recited at a high level of
generality and . . . merely invoked as tools to perform the processes.”
Ans. 4; see also Final Act. 4 (finding that the additional limitations are well-
understood, routine, and conventional).
Appellant argues that the claims are not directed to an abstract idea
because they “require a specific structure . . . paired with a prescribed
functionality . . . directly related to the structure.” Appeal Br. 20.
According to Appellant, the claims “recite a process that solves a technical
problem rooted in the field of authorizing online purchase transactions of
how to use an enhanced AAV to authorize the online purchase transaction
for a customer,” “improv[es] the merchant’s future customer authentication
and/or authorization decisions,” and “improv[es] the customer shopping
experience.” Id.; see also Reply Br. 4. Appellant further argues that those
improvements are achieved in a manner different from conventional
processes, thus amounting to significantly more than an abstract idea.
Appeal Br. 21–22; Reply Br. 5. Finally, Appellant argues that “the Office
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tacitly admits that the claimed process is patentable because the Examiner
. . . has never alleged that the claims are anticipated and/or obvious in view
of any prior art.” Appeal Br. 22.
Step 2A, Prong 1
We agree with the Examiner that, based on the Revised Guidance, the
claims recite a judicial exception, i.e., an abstract idea. See Ans. 3–4. In
particular, we agree with the Examiner that the claims recite fundamental
economic practices in the form of a request for authorization for a purchase
transaction and the transaction being authorized or denied. See id. We also
determine that the claims recite a commercial interaction in the form of a
request for authorization for a purchase transaction and the transaction being
authorized or denied.
For example, independent claim 1 recites (emphasis added):
transmitting, by the MPI application to a payment gateway
server computer, a purchase transaction authorization request
message including cardholder data, purchase transaction data
and the enhanced AAV; [and]
receiving, by the MPI application from the payment
gateway server computer, a purchase transaction authorization
response message, wherein the purchase transaction
authorization response message comprises one of a transaction
authorization message or a transaction denied message.
In reciting the steps of “transmitting . . . a purchase transaction authorization
request message” and “receiving . . . a purchase transaction authorization
response message, wherein the purchase transaction authorization response
message comprises one of a transaction authorization message or a
transaction denied message,” claim 1 recites fundamental economic
practices (as does independent claim 10 with corresponding limitations).
Requesting authorization for a purchase transaction and the transaction being
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authorized or denied is also a commercial interaction. Thus, these
limitations recite certain methods of organizing human activity recognized
as abstract ideas. See Revised Guidance, 84 Fed. Reg. at 52 (listing
fundamental economic practices and commercial interactions as some of the
certain methods of organizing human activity identified as abstract ideas).
Step 2A, Prong 2
Because the claims recite an abstract idea, we next look to whether the
claims recite additional elements that integrate the abstract idea into a
practical application. Revised Guidance, 84 Fed. Reg. at 54. Claim
limitations that indicate integration into a practical application include
additional elements that reflect an improvement in the functioning of a
computer, or an improvement to other technology or technical field. Id. at
55. When a claim recites a judicial exception and fails to integrate the
judicial exception into a practical application, the claim is “directed to” the
judicial exception. Id. at 51.
We determine that the additional limitations recited in the claims on
appeal do not integrate the recited abstract idea into a practical application.
For example, claim 1 additionally recites “receiving, by a merchant plug-in
(MPI) application of a merchant server computer from an issuer access
control server (ACS) during an online transaction, a cardholder
authentication message comprising an enhanced accountholder
authentication variable (AAV) indicative of a type of cardholder
authentication.” This limitation is recited at a high level of generality (i.e.,
as a general step of gathering data, including the data to be transmitted and
stored) and amounts to insignificant pre-solution activity. Claim 1 further
recites “displaying, by the merchant server computer on a merchant
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webpage, the purchase transaction authorization response message” and
“storing, by the MPI application in an MPI database, the purchase
transaction authorization response message and the enhanced AAV in
association with the cardholder data.” These limitations are recited at a high
level of generality (i.e., as a general steps of displaying and storing or saving
data) and amount to insignificant post-solution activity. See Revised
Guidance, 84 Fed. Reg. at 55; MPEP § 2106.05(g).
We agree with the Examiner that the claims otherwise merely recite
generic computer components that similarly fail to integrate the recited
abstract idea into a practical application. See Final Act. 2–4; Ans. 4. For
example, independent claim 1 recites a “merchant plug-in (MPI)
application,” “merchant server computer,” “issuer access control server
(ACS),” “payment gateway server computer,” “merchant webpage,” and
“MPI database.” Notwithstanding Appellant’s argument that the claims
“require a specific structure . . . paired with a prescribed functionality . . .
directly related to the structure” (Appeal Br. 20), these limitations are recited
at a high level of generality, i.e., as generic components performing generic
computer functions of communication, display, and storage. The claims
merely apply the abstract idea using generic computer components and
indicate a field of use or technological environment (i.e., Internet). See
Spec. 2:6–19; Revised Guidance, 84 Fed. Reg. at 55; MPEP § 2106.05(f),
(h). The claim limitations do not include any particular machine that is
integral to the claim. See Revised Guidance at 55; MPEP § 2106.05(b).
Appellant argues that the claims “recite a process that solves a
technical problem rooted in the field of authorizing online purchase
transactions of how to use an enhanced AAV to authorize the online
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purchase transaction for a customer,” “improv[es] the merchant’s future
customer authentication and/or authorization decisions,” and “improv[es] the
customer shopping experience.” Appeal Br. 20; see also Reply Br. 4. We
are unpersuaded that the claims recite a technological improvement in
addition to the abstract idea. As discussed above, the recited “merchant
plug-in (MPI) application,” “merchant server computer,” “issuer access
control server (ACS),” “payment gateway server computer,” “merchant
webpage,” and “MPI database” are merely generic computer components
performing generic functions of communication, display, and storage. These
additionally recited elements “do not require an arguably inventive set of
components or methods, such as measurement devices or techniques, that
would generate new data. They do not invoke any assertedly inventive
programming.” Elec. Power Grp., 830 F.3d at 1355. Thus, the claims do
not reflect an improvement in computer functionality or to any other
technology or technical field. See Revised Guidance, 84 Fed. Reg. at 55;
MPEP § 2106.05(a).
Even in combination, the additional limitations do not integrate the
abstract idea into a practical application because they do not impose any
meaningful limits on practicing the abstract idea. Accordingly, we agree
with the Examiner that the claims are directed to an abstract idea.
Step 2B
Turning to Step 2B of the Revised Guidance, we determine that there
are no specific limitations beyond the judicial exception, i.e., the abstract
idea, that are not well-understood, routine, and conventional in the field. See
Alice, 573 U.S. at 225.
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We agree with the Examiner that the recitation of additional elements
(e.g., “merchant plug-in (MPI) application,” “merchant server computer,”
“issuer access control server (ACS),” “payment gateway server computer,”
“merchant webpage,” “MPI database”) “simply implement[s] the abstract
idea using computer components as tools to perform an abstract idea.”
Ans. 4. The Specification describes generic computer components
(application, computer, server, webpage, database) for performing the
recited steps, but provides no details or description to indicate that they are
anything beyond well-understood, routine, and conventional computer
components. See, e.g., Spec. 7:7–30 (merchant server computer, merchant
plug-in (MPI) application, issuer access control server (ACS)), 15:22–24
(MPI database), 17:1–4 (payment gateway server computer), 19:13–21
(merchant webpage). Implementation of the abstract idea using generic
computer components does not provide an inventive concept to transform
the abstract idea into a patent-eligible invention. See Alice, 573 U.S. at 223–
24.
Reevaluating the extra-solution activity of “receiving, . . . during an
online transaction, a cardholder authentication message comprising an
enhanced accountholder authentication variable (AAV) indicative of a type
of cardholder authentication,” “displaying . . . the purchase transaction
authorization response message,” and “storing . . . the purchase transaction
authorization response message and the enhanced AAV in association with
the cardholder data” (see Revised Guidance, 84 Fed. Reg. at 56 (stating that
a conclusion under Step 2A that an additional element is insignificant extra-
solution activity should be reevaluated in Step 2B)), we find nothing
unconventional in these steps of gathering, displaying, and storing data.
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Appellant argues that the recited “enhanced AAV provides improved
and/or enhanced information that can be utilized by issuer financial
institutions (FIs) and/or merchants to make improved authentication and/or
authorization decisions” (Appeal Br. 17) (emphasis added). The claims
describe the “enhanced AAV” as “indicative of a type of cardholder
authentication” and merely recite the gathering, transmission, and storing of
such information. This is insufficient to transform an abstract idea into
patent-eligible subject matter, regardless of the content of the information.
See Elec. Power Grp., 830 F.3d at 1354 (“gathering and analyzing
information of a specified content . . . and not any particular assertedly
inventive technology for performing those functions” is insufficient to
transform an abstract idea into patent-eligible subject matter).
Appellant further argues that “the Office tacitly admits that the
claimed process is patentable because the Examiner . . . has never alleged
that the claims are anticipated and/or obvious in view of an prior art.”
Appeal Br. 22. As the Examiner points out, the absence of a prior art
rejection does not affect our determination of § 101 patent subject matter
eligibility. See Ans. 8. Our reviewing court “do[es] not agree . . . that the
addition of merely novel or non-routine components to the claimed idea
necessarily turns an abstraction into something concrete.” Ultramercial, Inc.
v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014).
Appellant has not shown that the claims on appeal recite any
additional limitations beyond the judicial exception that are not well-
understood, routine, and conventional in the field. Furthermore, we are
unpersuaded that the ordered combination is unconventional or amounts to
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significantly more than the abstract idea to which the claims are otherwise
directed.
Accordingly, considering the claim elements individually and as an
ordered combination, we agree with the Examiner that there are no
meaningful claim limitations that represent sufficiently inventive concepts to
transform the nature of the claims into a patent-eligible application of the
abstract idea.
For the foregoing reasons, we sustain the Examiner’s rejection of
claims 1–17 under 35 U.S.C. § 101.
CONCLUSION
The Examiner’s rejection of claims 1–17 under 35 U.S.C. § 101 is
affirmed.
DECISION SUMMARY
In summary:

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)(1)(iv).

AFFIRMED

Claims
Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1–17 101 Eligibility 1–17