MasterCard International Incorporated

Patent Trials and Appeals Board

Aug 19, 2020

14719030 - (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.
14/719,030 05/21/2015 Steven Charles Davis 0076412-000419 7066
125578 7590 08/19/2020
MASTERCARD
C/O Buchanan Ingersoll & Rooney PC
P.O. Box 1404
Alexandria, VA 22314
EXAMINER
SAX, TIMOTHY P
ART UNIT PAPER NUMBER
3685
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):
ADIPDOC1@BIPC.com
charles.wieland@bipc.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
________________

Ex parte STEVEN CHARLES DAVIS
________________

Appeal 2019-004127
Application 14/719,030
Technology Center 3600
________________

Before ERIC S. FRAHM, BETH Z. SHAW, and
MATTHEW J. McNEILL, Administrative Patent Judges.

FRAHM, Administrative Patent Judge.

DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals the Final Rejection
of claims 1–16. We have jurisdiction under 35 U.S.C. § 6(b). An oral
hearing was conducted on July 29, 2020.2
We REVERSE.
INVENTION
The claimed invention, entitled “METHOD AND SYSTEM FOR
FRAUD CONTROL OF BLOCKCHAIN- BASED TRANSACTIONS”

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. According to Appellant, Mastercard International
Incorporated is the real party in interest (Appeal Br. 2).
2 Appellant was represented at oral hearing by Nigel R. Fontenot, USPTO
Registration No. 69,688.
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(Title), relates to a method (claim 1) and system (claim 9) for linking
blockchain transactions to privately verified identities (see Spec. ¶ 1). More
specifically, the disclosed invention concerns “the association of a
blockchain transaction to a consumer or merchant associated with a
transaction account based on transaction data and stored account profiles”
(Spec. ¶ 1).
Appellant recognizes that because (i) “it often takes a significant
amount of time, around ten minutes, for a blockchain-based transaction to be
processed, due to the computer processing time and resources required to
verify and update the blockchain” (Spec. ¶ 3); and (ii) using blockchain
provides anonymity for the payor, making identity/fraud detection difficult
for payees, “many entities, particularly merchants, retailers, service
providers, and other purveyors of goods and services, may be wary of
accepting blockchain currency for products and participating in blockchain
transactions” (Spec. ¶ 3). On the other hand, “traditional fiat payment
transactions that are processed using payment networks often have
processing times that are measured in nanoseconds” (Spec. ¶ 3), and provide
security for merchants, retailers, and service providers against fraud. As a
result, Appellant has determined that “the use of traditional payment
networks and payment systems technologies in combination with blockchain
currencies may provide consumers and merchants the benefits of the
decentralized blockchain while still maintaining security of account
information and provide a strong defense against fraud and theft” (Spec.
¶ 5).
Independent claim 1 is illustrative of the invention and is reproduced
below:
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1. A method for linking blockchain transactions to
privately verified identities, comprising:

[A] storing, in an account database of a computer system,
a plurality of account profiles, wherein each account profile
includes data related to a transaction account including at least
an account identifier and account data;

[B] receiving, by a receiver of the computer system, a
transaction message via a payment network, wherein the
transaction message is formatted based on one or more standards
and includes a plurality of data elements including at least a first
data element configured to store a personal account number, a
second data element configured to store a merchant identifier,
and a third data element configured to store at least a blockchain
network identifier and where the third data element or a fourth
data element is configured to store a digital signature;

[C] identifying, by a processor of the computer system, a
first account profile stored in the account database where the
included account identifier corresponds to the personal account
number stored in the first data element included in the
received transaction message, and wherein the first account
profile includes a public key;

[D] identifying, by the processor of the computer system,
a second account profile stored in the account database where the
included account identifier corresponds to the merchant
identifier stored in the second data element included in the
received transaction message;

[E] receiving, by the receiver of the computer system, a
transaction notification, wherein the transaction notification
indicates a transaction processed using a blockchain network
associated with the blockchain network identifier stored in the
third data element included in the received transaction message
and includes at least a transaction identifier and an address
identifier associated with one of the first account profile and the
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second account profile, and where the address identifier is
generated using the public key;

[F] verifying, by the processor of the computer system, the
digital signature using the public key included in the first account
profile; and

[G] storing, by the processor of the computer system upon
verification of the digital signature, a linkage between the
transaction identifier included in the received transaction
notification and at least one of: the address identifier, the
personal account number, and the merchant identifier.

Claims Appendix 1–2 (formatting, emphases, and bracketed lettering added).
Remaining independent claim 9 recites “[a] system for linking blockchain
transactions to privately verified identities” with commensurate limitations
as limitations A through G of claim 1.

REJECTIONS
(1) Claims 1–16 stand rejected under 35 U.S.C. § 101 as being
directed to patent-ineligible subject matter. Final Act. 3–10.
(2) The Examiner rejected claims 1–16 under 35 U.S.C. § 112(b) as
being indefinite for failing to particularly point out and distinctly claim the
subject matter which Appellant regards as the invention (Final Act. 8–10).
Because the Examiner has withdrawn the § 112(b) rejection (see Ans. 3), we
will not address this rejection or Appellant’s arguments directed thereto any
further.
(3) The Examiner rejected claims 1–16 under 35 U.S.C. § 103 as
being unpatentable over Sipman et al. (US 6,889,325 B1; published May 3,
2005), Azen et al. (US 2013/0185214 A1; published July 18, 2013), and
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Seger, II et al. (US 9,397,985 B1; issued July 19, 2016 and filed April 14,
2015). Final Act. 10–18. Because the Examiner has withdrawn the § 103
rejection (see Ans. 3), we will not address this rejection or Appellant’s
arguments directed thereto any further.
Accordingly, only the rejection of claims 1–16 under 35 U.S.C. § 101
is before us on appeal.

ANALYSIS
SECTION 101 REJECTION
A. Principles of Law
Section 101 of the Patent Act provides “[w]hoever 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.” 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 that 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
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
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in petitioners’ application explain the basic concept of hedging, or protecting
against risk.”).
Concepts determined to be abstract ideas, and, thus, patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
(1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
(15 How.) 252, 267–68 (1854))); and manufacturing flour (Benson, 409 U.S.
at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that “[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula.” Diehr, 450 U.S. at 176; see also id. at 191 (“We
view respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, . . . and this principle cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment.” Id. (citing Benson and Flook); see, e.g., id. at 187 (“It is now
commonplace that an application of a law of nature or mathematical formula
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to a known structure or process may well be deserving of patent
protection.”).
If the claim is “directed to” an abstract idea, we turn to the second
step of the Alice and Mayo framework, where “we must examine the
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). “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. (alterations in original) (quoting Mayo,
566 U.S. at 77). “[M]erely requir[ing] generic computer implementation[]
fail[s] to transform that abstract idea into a patent-eligible invention.” Id.
B. USPTO Section 101 Guidance
On January 19, 2019, the PTO published revised guidance on the
application of § 101. USPTO, 2019 Revised Patent Subject Matter
Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”).3 “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.
Under the Guidance, we first look to whether the claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of

3 In response to received public comments, the Office issued further
guidance on October 17, 2019, updating and clarifying the Guidance.
USPTO, October 2019 Update: Subject Matter Eligibility (the “October
2019 Update”) (available at
https://www.uspto.gov/sites/default/files/documents/peg_oct_2019_update.p
df).
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organizing human activity such as a fundamental economic
practice, or mental processes) (“Step 2A, Prong 1”); and
(2) additional elements that integrate the judicial exception into
a practical application (see MANUAL OF PATENT EXAMINING
PROCEDURE (“MPEP”) § 2106.05(a)–(c), (e)–(h)) (9th Ed., Rev.
08.2017, 2018) (“Step 2A, Prong 2”).4
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then 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
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception (“Step 2B”).
See Guidance, 84 Fed. Reg. at 54–56.
Even if the claim recites an abstract idea, the Federal Circuit explains
the “directed to” inquiry is not simply asking whether the claims involve a
patent-ineligible concept:
The “directed to” inquiry . . . cannot simply ask whether the
claims involve a patent-ineligible concept, because essentially
every routinely patent-eligible claim involving physical products
and actions involves a law of nature and/or natural
phenomenon—after all, they take place in the physical world.
See Mayo, 132 S.Ct. at 1293 (“For all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural
phenomena, or abstract ideas.”) Rather, the “directed to” inquiry

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 Guidance — Section III(A)(2), 84 Fed. Reg. 54–
55.
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applies a stage-one filter to claims, considered in light of the
specification, based on whether “their character as a whole is
directed to excluded subject matter.”
Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016); see
also Diehr, 450 U.S. at 188 (“In determining the eligibility of respondents’
claimed process for patent protection under § 101, their claims must be
considered as a whole.”); McRO, Inc. v. Bandai Namco Games Am. Inc., 837
F.3d 1299, 1314 (Fed. Cir. 2016) (the question is whether the claims as a
whole “focus on a specific means or method that improves the relevant
technology or are instead directed to a result or effect that itself is the
abstract idea and merely invoke generic processes and machinery”).
C. Step 1
Patent eligibility under 35 U.S.C. § 101 is a question of law that is
reviewable de novo. See Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333
(Fed. Cir. 2012). Under Step 1 of the patent-eligibility inquiry under § 101,
we determine whether a claim is directed to one of the four statutory
categories of invention, i.e., a process, machine, manufacture, or
composition of matter.
In the instant case on appeal, claim 1 recites “[a] method for linking
blockchain transactions to privately verified identities, comprising” a series
of steps, including storing, receiving, identifying, and verifying certain
information (see claim 1). The Examiner determines (see Final Act. 4), and
Appellant does not dispute, that claims 1 through 8 are directed to one of the
four statutory categories. Therefore, claim 1 and claims 2–8 depending
therefrom, as method claims, recite at least one of the enumerated categories
(e.g., a process having a series of steps) of eligible subject matter in
35 U.S.C. § 101.
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Claim 9 recites “[a] system for linking blockchain transactions to
privately verified identities, comprising: an account database of a computer
system” including “a receiver of the computer system configured to receive
a transaction message via a payment network” and “a transaction processed
using a blockchain network,” and “a processor” (see claim 9). The
Examiner determines (see Final Act. 4), and Appellant does not dispute, that
claims 9 through 16 are directed to one of the four statutory categories.
Therefore, claim 9 and claims 10–16 depending therefrom, as apparatus
claims, recite at least one of the enumerated categories (e.g., a machine or
manufacture) of eligible subject matter in 35 U.S.C. § 101.
As a result, as to claims 1–16, we continue our analysis under Step
2A, Prong 1 of the Guidance to determine whether claims 1–16 recite a
judicial exception (a law of nature, natural phenomenon, or subject matter
within the enumerated groupings of abstract ideas above).
D. Step 2A, Prong 1
Based on determinations that the claims are “directed to the use of [a]
conventional or generic computer” (Final Act. 5 citing Figs. 1–4), and not to
an improvement in server functionality or improvements to a technological
process (see Final Act. 5), the Examiner concludes “that the claim[s] when
viewed individually and as a whole [are] directed to an abstract idea” (Final
Act. 5–6). The Examiner concludes that the present claims are directed to
“the abstract idea of storing data (e.g. account profiles and a linkage between
the data), receiving data (e.g. a transaction message and a transaction
notification), identifying data (e.g. a first account profile and a second
account profile), and verification” (Final Act. 4). The Examiner also
concludes the claims recite a mental process and/or certain methods of
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organizing human activity, such as tracking or organizing information (see
Final Act. 5; see also Ans. 4–5).
The focus of claims 1 and 9 is commercial transaction processing,
such as performing blockchain payment transactions, using both standard
payment and blockchain payment elements to verify the identity of the payor
(see claims 1, 9). In this light, we agree with the Examiner’s determination
(see Final Act. 5) that claim 1 recites limitations “which fall[] within the
universe of ineligible subject matter described by the courts as being an
exception to patentability,” namely certain methods of organizing human
activity.
Commercial transactions, like payment transactions and verifying
fraud, have been consistently found by our reviewing court to be abstract
ideas. Bozeman Fin. LLC v. Fed. Reserve Bank of Atlanta, 955 F.3d 971,
976 (Fed. Cir. 2020) (verifying a transaction to avoid fraud, however, is a
fundamental economic principle or practice); cf. also Subject Matter
Eligibility Examples: Business Methods, USPTO, *9 (Dec. 2016) (“a
method of fraud prevention . . . is a fundamental business practice and is
similar to ideas found abstract by the courts”). In Bozeman Financial, the
Federal Circuit held that “[v]erifying financial documents to reduce
transactional fraud is a fundamental business practice that, without more, is
not eligible for patent protection.” Bozeman, 955 F.3d 971, 978.
In addition, payment methods are characterized as fundamental
economic practices in the Eligibility Guidance, which are categorized as the
abstract idea of organizing human activity. Eligibility Guidance, 84 Fed.
Reg. at 52 (n.13). The instant case similarly recites claims aimed at the
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concept of preventing fraud (e.g., by verifying an identity) in financial
transactions by verifying transactions.
Appellant does not dispute the Examiner’s finding in this regard (see
generally Appeal Br. 8–11; Reply Br. 2–4 (arguing only the mental process
determination).5 Appellant does, however, present arguments that “the
claims recite the explicit use of a number of technologies that cannot be
performed by human work or mentally, even given a significant amount of
time” (Reply Br. 3), because “digital signatures are of sufficient data size
and complexity to not be understood by human mental work, let alone
verified through the use of a public key and overly complex (by design)
signature algorithms” (Reply Br. 3).
The Guidance states that the abstract idea exception includes mental
processes, which include “concepts performed in the human mind (including
an observation, evaluation, judgment, opinion).” Guidance, 84 Fed. Reg. at
52. The Guidance explains that “mental processes” include acts that people
can perform in their minds or using pen and paper, even if the claim recites
that a generic computer component performs the acts. See Guidance, 84
Fed. Reg. at 52 n.14 (“If a claim, under its broadest reasonable
interpretation, covers performance in the mind but for the recitation of
generic computer components, then it is still in the mental processes

5 Notably, although Appellant argued generally at the Oral Hearing held July
29, 2020, that the claims did not recite an abstract idea (see Oral Hr’g Tr.
4:18–19), this argument was both new and untimely, and conclusory. The
only argument on this record based on the claims not reciting an abstract
idea is in the Reply Brief. (see Reply Br. 2–4), that the claims do not recite a
mental process that can be performed in the human mind, or with pen and
paper.
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category unless the claim cannot practically be performed in the mind.”); see
also Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318
(Fed. Cir. 2016) (“[W]ith the exception of generic computer-implemented
steps, there is nothing in the claims themselves that foreclose them from
being performed by a human, mentally or with pen and paper.”), quoted in
Guidance, 84 Fed. Reg. at 52 n.14.
In this light, with regard to the claims reciting a mental process
capable of being performed in the human mind, or with pen and paper,
Appellant’s arguments (see Reply Br. 2–4) are persuasive. As stated by
Appellant:
In addition, transaction messages are processed in speeds that
have to be measured in nanoseconds for network reliability
and due to the overwhelming number of transaction processed
each day, necessitating the use of specialized computer
systems, which is impossible to replicate through human
mental work. Thus, specially configured computer systems
are used in the claimed invention, which uses technology in
an unconventional way to implement the steps recited in the
present claims.

Reply Br. 3. Thus, we agree with Appellant that the claimed subject matter
involves steps and elements that could not be performed by a human mind,
even with the aid of pen and paper.
However, the claims recite the abstract idea of a fundamental
economic practice, e.g., a financial payment transaction, as discussed above.
See Innovation Sciences, LLC v. Amazon.com, Inc., No. 2018-1495, 2019
WL 2762976, at *1 (Fed. Cir. July 2, 2019) (affirming the district court’s
conclusion that a claim directed to the abstract idea of securely processing a
credit card transaction with a payment server was ineligible); see also Smart
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Sys. Innovations, LLC v. Chicago Transit Auth., 873 F.3d 1364, 1371 (Fed.
Cir. 2017) (holding that claims relating to methods of paying subway fare
via bankcard including receiving a record, maintaining a balance in memory,
and accounting for a fare by applying a fare to a balance are abstract ideas,
and stating that “claims directed to the performance of certain financial
transactions . . . must be categorized as involving abstract ideas”).
According to the 2019 Revised Guidance, “fundamental economic
principles or practices” include hedging, insurance, and mitigating risk. Id.;
see, e.g., Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d
1372, 1378–79 (Fed. Cir. 2017) (“The idea that a customer may pay for
items ordered from a remote seller at a third-party’s local establishment is
the type of fundamental business practice that, when implemented using
generic computer technology, is not patent-eligible under Alice”).
Consistent with Appellant’s description of the claims (Spec. ¶¶ 1–8;
Abstract), we determine that the limitations of claims 1 and 9 recite
processing financial transactions (e.g., blockchain payment transactions)
through collecting and analyzing information for identity verification (i.e.,
fraud detection), which is fairly characterized as a fundamental economic
practice, and which falls into the “certain methods of organizing human
activity” category of abstract ideas. See 84 Fed. Reg. at 52.
Because we conclude claims 1–16 recite a fundamental economic
practice which is an abstract idea, we proceed to Step 2A, Prong 2 of the
Guidance to determine whether claims 1–16 are “directed to” the judicial
exception, by determining whether additional elements of the claim integrate
the abstract idea into a practical application. Such additional elements may
reflect an improvement to a technology or technical field. See Guidance, 84
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Fed. Reg. at 55.
E. Step 2A, Prong 2 – Practical Application
Having determined that claims 1–16 recite an abstract idea, we next
determine, under Step 2A, Prong 2 of the Guidance, whether claims 1–16 are
directed to that abstract idea, or whether the claims have additional elements
that integrate the abstract idea into a practical application of that abstract
idea. Guidance, 84 Fed. Reg. at 54. In other words, we must still determine
whether the abstract idea is integrated into a practical application, namely,
whether the claims apply, rely on, or use the abstract idea in a manner that
imposes a meaningful limit on the abstract idea, such that the claims are
more than a drafting effort designed to monopolize the abstract idea. See
Guidance, 84 Fed. Reg. at 54–55. We therefore (1) identify whether there
are any additional recited elements beyond the abstract idea, and (2) evaluate
those elements both individually and collectively to determine whether they
integrate the exception into a practical application. See id.
In the instant case, the additional limitations recited beyond the
judicial exception itself integrate the exception into a practical application;
and, we are persuaded by Appellant’s argument that the claims recite a
practical application of the abstract idea (see Oral Hr’g Tr. 4:19–20).
Claims 1 and 9 provide the security of standard payment processing systems
(e.g., by identifying first and second account profiles in limitations C and D
of claim 1; see also Spec. ¶ 120, steps 1106, 1108), and the privacy of
blockchain payment transactions (e.g., by using a blockchain network to
generate an address identifier using a public key (see Spec. ¶ 68) as set forth
in limitation E of claim 1), to verify a digital signature (see e.g., claim 1,
limitation F; see also Spec. ¶ 39) stored in data elements of a receiver of the
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computer system (see e.g., claim 1, limitation B) that is part of the account
database (see e.g., claim 1, limitation A). Our reasoning follows.
Claims 1 and 9 each recite “an account database of a computer
system,” “a receiver of the computer system,” “a payment network,” “a
processor,” and “a blockchain network” (claims 1, 9). These elements work
together to perform a “method for linking blockchain transactions to
privately verified identities” (claim 1), and as a “system for linking
blockchain transactions to privately verified identities” (claim 9), that
represent an ordered combination that achieves a technological improvement
to a technological field (e.g., blockchain transactions performed using
computers).
Thus, the claims combine the advantageous elements of both standard
payment processing systems (i.e., security and fraud prevention, along with
speed), and blockchain processing systems (i.e., anonymity). As recognized
by Appellant, “the use of traditional payment networks and payment systems
technologies in combination with blockchain currencies may provide
consumers and merchants the benefits of the decentralized blockchain while
still maintaining security of account information and provide a strong
defense against fraud and theft” (Spec. ¶ 5; see also Oral Hr’g Tr. 5:4–9).
And, as argued by Appellant at the Oral Hearing,6 paragraphs 3 and 47 of

6 See Oral Hr’g Tr. 12:16–22 citing Spec. ¶¶ 3, 47; see also Oral Hr’g Tr.
4:22–5:9, 13:2–4 (arguing that recited invention improves blockchain
technology); Oral Hr’g Tr. 6:23–7:2 (asserting inclusion of blockchain
network identifier in digital signature for verifying the blockchain
transaction is improvement of Appellant’s invention); Oral Hr’g Tr. 9:19–
25, 10:10–11 (arguing linkage of first (i.e., payor) and second (i.e.,
payee/merchant) account profiles provides improvement to blockchain
transactions).
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the Specification support this understanding about the benefits of combining
standard and blockchain processing systems (security and speed).
Claims 1–16 apply, rely on, or use the abstract idea (fundamental
economic practice) in a manner that imposes a meaningful limit on the
abstract idea, such that the claims are more than a drafting effort designed to
monopolize the abstract idea. See Guidance, 84 Fed. Reg. at 54–55. Claims
1–16 thus recite element(s), and ordered combination of elements, which
transform the abstract idea to patent eligible subject matter.
The Examiner (i) determines that the claims recite the additional
elements, beyond the abstract idea(s), of a database, computer system, and
processor (see Final Act. 6); and (ii) determines that the claims do not recite
additional elements sufficient to transform the recited judicial exception into
a patent-eligible invention, because the additional elements when considered
both individually and as an ordered combination do not amount to
significantly more than the abstract idea(s) (see Final Act. 6). The Examiner
provides the following analysis and interpretation regarding the additional
elements:
The additional element(s) of processor based computer
system represents as a generic computer (see Fig. 14 and
corresponding Specification of instant application) that merely
serves as a conduit/tools for implementing the above abstract
idea. Hence, taken individually or in combination, the recited
elements do not improve the functions of the processor based
computer system nor any technological process, rather describes
abstract idea performed on a generic computer. Insofar as the
description of blockchain, the claim does not describe any
technical aspect of the blockchain. Rather, the blockchain is
merely used to describe a data, e.g. notification. As explained
above, the claim(s) do not describe the use of the blockchain
network. The blockchain is not utilized in the claims and the
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claims only recite a notification being received by the computer
system which notifies the computer system that a
blockchain transaction has taken place. The blockchain network
itself is not involved in the steps of the claims.

Ans. 5. In other words, the Examiner does not find that the “receiver
of the computer system,” “payment network,” and/or “blockchain
network” (claims 1, 9) are recited positively enough so as to constitute
additional elements.
Appellant disagrees, and contends that the claims “are directed to an
inventive concept that is an unconventional combination of a traditional
payment processing network and a blockchain network” (Appeal Br. 8); and
(ii) that that inventive concept results in a technical improvement (see
Appeal Br. 10).7 Appellant argues that “the claims recite the explicit use of
a number of technologies that cannot be performed by human work or
mentally, even given a significant amount of time” (Reply Br. 3), and
require “using both networks [i.e., payment network and blockchain] with
the computer system [to ensure] that the party in the submitted transaction
message was a party to the blockchain transaction” (Reply Br. 3). Appellant
further contends the “claims, even if generic computer hardware is used, are
still directed to an ordered combination that recites an inventive concept that
is unconventional and a solution to a technical problem” (Appeal Br. 11).
We agree. Appellant identifies persuasively how the Specification sets forth
an improvement in technology, and how the claims recite that improvement

7 See supra fn. 6 citing Oral Hr’g Tr. (arguing recited invention provides
improvements to blockchain technology).
Appeal 2019-004127
Application 14/719,030

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(see Appeal Br. 8–11; Reply Br. 2–4; see Oral Hr’g Tr. 12:16–22 citing
Spec. ¶¶ 3, 47).
Claims 1–16 recite an ordered combination of elements that: (i) are an
improvement to blockchain or other technology or technical field (see MPEP
§ 2106.05(a)); and (ii) include meaningful limitations on the recited abstract
idea (see MPEP § 2106.05(e)). See also Guidance, 84 Fed. Reg. at 55; Ex
Parte Rios, Appeal No. 2019-004130, at 13 (PTAB Feb. 26, 2020)
(concluding that a multi-currency payment transaction platform using
different currencies integrate the recited judicial exception of a fundamental
economic practice into a practical application).
F. Summary
Based on the record before us, we determine that the present claims
integrate the abstract idea into a practical application that uses the judicial
exception in a manner that imposes a meaningful limit on the judicial
exception. Therefore, we need not proceed to Step 2B.

CONCLUSION
For the reasons explained above, we do not sustain the rejection of
claims 1–16 under 35 U.S.C. § 101 as being directed to patent ineligible
subject matter, and we hold as follows:

REVERSED
Claim(s)
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–16 101 Eligibility 1–16