MasterCard International Incorporated

Patent Trials and Appeals Board

Feb 14, 2020

14458726 - (D) (P.T.A.B. Feb. 14, 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.
14/458,726 08/13/2014 Serge BERNARD 0076412-000287 1079
125578 7590 02/14/2020
MASTERCARD
C/O Buchanan Ingersoll & Rooney PC
P.O. Box 1404
Alexandria, VA 22314
EXAMINER
KARMIS, ALISSA D
ART UNIT PAPER NUMBER
3683
NOTIFICATION DATE DELIVERY MODE
02/14/2020 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 SERGE BERNARD, PO HU, and NIKHIL MALGATTI
Appeal 2019-000686
Application 14/458,726
Technology Center 3600
Before MIRIAM L. QUINN, ADAM J. PYONIN, and NABEEL U. KHAN,
Administrative Patent Judges.
PYONIN, Administrative Patent Judge.
DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s rejection. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42(a). Appellant identifies the real party in interest as Mastercard
International Incorporated. Appeal Br. 2.
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STATEMENT OF THE CASE
Introduction
The Application is directed to “the use of transaction data to group
consumers located in relatively close proximity to each other in micro-
neighborhoods based on the proximity and purchase behavior scoring.”
Spec. ¶ 1. Claims 1–3, 5–13, and 15–20 are pending; claims 1 and 11 are
independent. App. Br. 16–21. Claim 1 is reproduced below for reference
(emphasis added):
1. A method for generating a micro-neighborhood of
consumers, comprising:
storing, in an account database, a plurality of account
profiles, wherein each account profile includes data related to a
consumer including at least account data, a micro-neighborhood
location identifier, and a plurality of transaction data entries,
each transaction data entry being related to a payment transaction
involving the related consumer and including at least transaction
data;
scoring, by a processing device, each account profile
stored in the account database by application of a scoring model
to at least the transaction data included in one or more transaction
data entries included in the respective account profile; and
identifying, by the processing device, a plurality of
account profile groupings, wherein each account profile
grouping includes a subset of the plurality of account profiles
identified based on at least the score for and micro-neighborhood
location identifier included in each account profile included in
the subset, the subset of the plurality of account profiles included
in each account profile grouping including at least a
predetermined number of account profiles, and the
predetermined number of account profiles being a minimum
number of account profiles that assures no account profile
included in the account profile grouping is personally
identifiable.
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References and Rejections
Claims 1–3, 5–13, and 15–20 stand rejected under 35 U.S.C. § 101 as
being patent ineligible. Final Act. 6; Ans. 3.
Claims 1–3, 5–13, and 15–20 stand rejected under 35 U.S.C. § 103 as
obvious in view of Joa (US 2014/0257933 A1; Sept. 11, 2014) and Kinkead
(US 2012/0265587 A1; Oct. 18, 2012). Final Act. 11; Ans. 3.
ANALYSIS
We have reviewed the Examiner’s rejections in light of Appellant’s
arguments. Arguments Appellant could have made but chose not to make
are deemed to be waived. See 37 C.F.R. § 41.37(c)(1)(iv). We discuss each
of the statutory grounds of rejection in turn, below.

Patent Eligibility
The Examiner determines the claims are patent ineligible under 35
U.S.C. § 101, because the claims are “directed to a judicial exception (i.e., a
law of nature, a natural phenomenon, or an abstract idea) without
significantly more.” Final Act. 6; see also Alice Corp. v. CLS Bank Int’l,
573 U.S. 208, 217 (2014) (describing the two-step framework “for
distinguishing patents that claim laws of nature, natural phenomena, and
abstract ideas from those that claim patent-eligible applications of those
concepts.”).
After the docketing of this Appeal, the USPTO published revised
guidance on the application of § 101 (“Guidance”). See, e.g., USPTO 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7,
2019) (“Memorandum”); USPTO October 2019 Update: Subject Matter
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Eligibility (Oct. 17, 2019) (“Update”), noticed at 84 Fed. Reg. 55942 (Oct.
18, 2019).
Under Step 2A of the Guidance, the Office looks to whether the claim
recites:
(1) Prong One: any judicial exceptions, including certain
groupings of abstract ideas (i.e., mathematical concepts, certain
methods of organizing human activity such as a fundamental
economic practice, or mental processes); and
(2) Prong Two: additional elements that integrate the judicial
exception into a practical application (see MPEP §§ 2106.05(a)–
(c), (e)–(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, does the Office then look, under Step
2B, 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.
See Memorandum, 84 Fed. Reg. at 56.
We are not persuaded the Examiner’s eligibility rejection is in error.
We adopt the Examiner’s findings and conclusions as our own, and we add
the following primarily for emphasis and clarification with respect to the
Guidance.

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A. Step 2A, Prong One
Claim 1 describes a method of creating groups of consumers. See
Spec. ¶ 4. Specifically, claim 1 recites (1) a “storing” step, (2) a “scoring”
step, and (3) an “identifying” step.
The first claimed step stores, in an account database, a “plurality of
account profiles, wherein each account profile includes data related to a
consumer including at least account data, a micro-neighborhood location
identifier, and a plurality of transaction data entries, each transaction data
entry being related to a payment transaction involving the related consumer
and including at least transaction data.” This storing limitation recites
collecting data, and reasonably can be characterized as a “[m]ental
process[]” that entails the step of “observation” by a person alone or with
pen and paper. Memorandum 84 Fed Reg. at 52; see also Update at 7–9;
Final Act. 28; Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353
(Fed. Cir. 2016) (“The focus of the asserted claims . . . is on collecting
information, analyzing it, and displaying certain results of the collection and
analysis”).
The second claimed step uses a processing device to score “each
account profile stored in the account database by application of a scoring
model to at least the transaction data included in one or more transaction
data entries included in the respective account profile.” Other than the use
of the claimed processing device, this limitation sets forth a process of
determining a value (score) based on the stored data. See Spec. ¶ 2. The
limitation reasonably can be characterized as a “[m]ental process[]” that
entails steps of “observation, evaluation, judgment, opinion.” Memorandum
84 Fed Reg. at 52.
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The third claimed step uses a processing device to identify “a plurality
of account profile groupings.” Claim 1 further defines the groupings:
each account profile grouping includes a subset of the plurality
of account profiles identified based on at least the score for and
micro-neighborhood location identifier included in each account
profile included in the subset, the subset of the plurality of
account profiles included in each account profile grouping
including at least a predetermined number of account profiles,
and the predetermined number of account profiles being a
minimum number of account profiles that assures no account
profile included in the account profile grouping is personally
identifiable.
Other than the use of the claimed processing device, this limitation sets forth
a process of grouping portions of the stored data based on the stored data
and the identified scores. See Spec. ¶ 2. The limitation reasonably can be
characterized as a “[m]ental process[]” that entails steps of “observation,
evaluation, judgment, opinion.” Memorandum 84 Fed Reg. at 52; see also
Final Act. 7; Content Extraction & Transmission LLC v. Wells Fargo Bank,
Nat. Ass’n, 776 F.3d 1343, 1347 (Fed. Cir. 2014) (“[T]he claims of the
asserted patents are drawn to the abstract idea of 1) collecting data, 2)
recognizing certain data within the collected data set, and 3) storing that
recognized data in a memory.”); Intellectual Ventures I LLC v. Capital One
Fin. Corp., 850 F.3d 1332, 1341 (Fed. Cir. 2017) (“[T]he underlying
concept embodied by the limitations merely encompasses the abstract idea
itself of organizing, displaying, and manipulating data of particular
documents.”).
Moreover, the above quoted limitations describe a method of creating
consumer groupings, which can be used for the “purposes of targeting or for
content distribution.” Spec. ¶ 2. These limitations reasonably can be
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characterized as reciting “advertising, marketing or sales activities or
behaviors; business relations,” and “following rules or instructions.”
Memorandum, 84 Fed Reg. at 52. The claim thus recites “managing
personal behavior or relationships or interactions between people” and
“commercial or legal interactions,” which are “[c]ertain methods of
organizing human activity.” Memorandum, 84 Fed Reg. at 52; Update at 6;
see also BSG Tech LLC v. Buyseasons, Inc., 899 F.3d 1281, 1286 (Fed. Cir.
2018) (determining a claimed method of indexing recited an abstract
concept); Evolutionary Intelligence LLC v. Sprint Nextel Corp., 677 F.
App’x 679, 680 (Fed. Cir. 2017) (“Here, the claims are directed to selecting
and sorting information by user interest or subject matter, a longstanding
activity of libraries and other human enterprises.”).
Accordingly, we conclude the claims recite a judicial exception under
Prong One of the Guidance. See Memorandum, 84 Fed Reg. at 54.

B. Step 2A, Prong Two
Appellant argues the Examiner’s rejection is in error, because “The
claims provide for a novel and useful method by which highly granular
segments of consumers may be dynamically identified without
compromising consumer privacy.” Appeal Br. 6. Appellant contends the
claims, thus, “provide an inventive concept by virtue of the non-
conventional arrangement and configuration of devices to improve upon
existing technological systems and methods by providing a technical
solution which enhances accuracy of target identification and ensures
individual consumer protection.” Id. at 9.
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We are not persuaded the Examiner’s rejection is in error under Prong
Two of Step 2A of the Guidance. See Ans. 6, 7; Update 12, 13. The
features relied on by Appellant are part of the judicial exception discussed
above in Prong One, and do not comprise additional elements, individually
or in combination, that integrate the exception into a practical application.
See Memorandum, 84 Fed. Reg. at 54, 55. That is, claim 1 recites the
additional element of a “processing device,” in addition to the limitations
reciting the judicial exception. The claimed “additional element merely
recites the words ‘apply it’ (or an equivalent) with the judicial exception, or
merely includes instructions to implement an abstract idea on a computer, or
merely uses a computer as a tool to perform an abstract idea.”
Memorandum, 84 Fed. Reg. at 55; see also Final Act. 8, 9; Spec. ¶ 57.
Even considered as additional elements, we disagree with Appellant’s
contentions that the disputed limitations remove claim 1 from the realm of
ineligible subject matter. See Appeal Br. 8. Claim 1 provides a method of
organizing consumer information (Spec. ¶ 1), which can be used for targeted
advertising (Spec. ¶ 2). At most, the method of claim 1 will yield benefits
for the provider or customer, rather than improving the underlying computer
or other technical systems. See Spec ¶ 26. Additionally, claim 1 broadly
recites a result (“being a minimum number”) rather than steps of achieving
the result; the broad, preemptive nature of the claim further signals patent
ineligibility.2 See Advisory Act. 3 (“Further the claims recite a desired

2 In any event, the question of preemption in the instant case has been
resolved by the rejection itself. See Final Act. 6–10; see also Two-Way
Media Ltd. v. Comcast Cable Commc’ns, LLC, 874 F.3d 1329, 1339 (Fed.
Cir. 2017) (“[W]here a patent’s claims are deemed only to disclose patent
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outcome of protecting privacy and generally link the abstract idea to a
computer which does not exclude the claims from the reach of the abstract-
idea inquiry.”).
Appellant presents new arguments in the reply brief, such as the
argument that the claimed method “can be done with less computing power
and time.” Reply Br. 4, 5. These arguments could have been raised in the
opening brief and are therefore waived. See In re Hyatt, 211 F.3d 1367,
1373 (Fed. Cir. 2000) (noting that an argument not first raised in the brief to
the Board is waived on appeal); see also 37 C.F.R. § 41.41(b)(2) (“Any
argument raised in the reply brief which was not raised in the appeal brief, or
is not responsive to an argument raised in the examiner’s answer, . . . will
not be considered by the Board for purposes of the present appeal, unless
good cause is shown.”).
Accordingly, we determine the additional elements of claim 1—
individually and as an ordered combination—do not integrate the judicial
exception into a practical application. See Memorandum, 84 Fed. Reg. 54.
As the “claim recites a judicial exception and fails to integrate the exception
into a practical application” (id. at 51), “the claim is directed to the . . .
judicial exception” (id. at 54).

C. Step 2B
We are not persuaded the Examiner errs in determining the additional
elements of claim 1 are “additional computer limitations [that] do not add an
inventive concept to the abstract idea.” Final Act. 9. Outside of the

ineligible subject matter under the Alice framework, as they are in this case,
preemption concerns are fully addressed and made moot.”).
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identified judicial exception, the claim recites hardware limitations which
the Examiner determines are “not considered significantly more because the
computer elements are recited at a high level of generality,” and “require no
more than a generic computer to perform generic computer functions.”
Final Act. 8, 9. We find the Examiner’s determination to be reasonable, in
view of the record before us. See Spec. ¶¶ 2–4, 27, 56–66; see also Alice,
573 U.S. at 226 (“Nearly every computer will include a ‘communications
controller’ and ‘data storage unit’ capable of performing the basic
calculation, storage, and transmission functions required by the method
claims.”). Thus, we find independent claim 1’s claim elements, individually
and as an ordered combination, do not provide significantly more than the
recited judicial exception.
We agree with the Examiner that claim 1 is patent ineligible.
Appellant does not present additional substantive arguments for the
remaining claims. See Appeal Br. 5–10. Accordingly, we do not sustain the
Examiner’s 35 U.S.C. § 101 rejection of claims 1–3, 5–13, and 15–20.

Obviousness
Appellant argues that the Examiner’s obviousness rejection of claim 1
is in error, because “[n]either Joa nor Kinkead, alone or in combination,
discloses the protection of consumer privacy in a manner similar to that
recited in Appellant's claims.” Appeal Br. 12. Particularly, Appellant
contends “Joa does not, however, suggest that a large user base is divided
into smaller user segments based upon a predefined number of users in each
segment, much less, based wherein such a predefined number acts [as] a
threshold to ensure that users of each user segment are not personally
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identifiable.” Id. Appellant further contends that “Kinkead does not cure
this deficiency of Joa,” because Kinkead does not “teach or suggest defining
a threshold amount of users over which the users of an account profile group
(or other user group) are not personally identifiable.” Id. at 12, 13.
We are persuaded that the Examiner’s rejection is in error. Claim 1
recites “each account profile grouping including at least a predetermined
number of account profiles.” As explained in the Specification, this
predetermined number is used when creating the groupings, and groups may
be merged in order to ensure each grouping has at least the predetermined
number of account profiles. See Spec. ¶¶ 41, 42. In light of the
Specification, we agree with Appellant that the “predetermined” limitation is
a specific minimum number that is chosen, either by the user or the system,
before the grouping is determined. See Appeal Br. 11; Spec. ¶¶ 48, 53; see
also IGT v. Bally Gaming Int’l, Inc., 659 F.3d 1109, 1118 (Fed. Cir. 2011)
(“[T]he term ‘predetermined’ retains its plain meaning,” and “[i]f the
‘predetermined event’ is not ‘chosen in advance,’ the claim limitation is not
met.”).
In rejecting the disputed “predetermined” limitation, the Examiner
finds the “claim does not positively recite a step of pre-selection of a number
or determining or calculating ahead of time what the predetermined number
should be” (Ans. 7), and “based on the broadest reasonable interpretation,
any number of profiles in a segment satisfies the limitation as the limitation
does not qualify what constitutes a predetermined number” (Final Act. 4–5).
The Examiner, finds, therefore, that Joa teaches or suggests the disputed
limitation:
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Joa’s description of dividing the entity’s large user base into
smaller groups or user segments such as Florida, Floridian cities,
counties, female, over the age of 55, etc. ([0033], [0042], [0050],
[0054], [0055]) means the user segments or groups would have
more than one user included which satisfies the limitation of
“including at least a predetermined number of account profiles”
Ans. 8.
We disagree, as such construction effectively reads the
“predetermined” number limitation, requiring a choice of a number, out of
the claim. See In re Wilson, 424 F.2d 1382, 1385 (CCPA 1970) (“All words
in a claim must be considered in judging the patentability of that claim
against the prior art.”). Joa teaches segmenting users based on
characteristics including location. See Joa ¶ 33 (“Dividing the large user
base into smaller groups (user segments) . . . . [to] target and tailor []
advertisements.”). The cited portions of Joa, however, provide no indication
that a user segment has a predetermined minimum number of users.
Kinkead mentions using personal data “in a non-personally identifiable
form” for grouping users, but similarly provides no teaching or suggestion
that the user group has a predetermined minimum number of people.3
Kinkead ¶ 143; see also Kinkead Abstract. Therefore, we agree with
Appellant that the cited references fail to teach or suggest the predetermined
number of account profiles, within the meaning of the claim. See Appeal Br.
12.
We are persuaded the cited references do not teach or suggest all
limitations recited by claim 1. Independent claim 11 similarly recites “a

3 Further, we note that Kinkead, as cited by the Examiner, provides no
indication of what procedures are used to ensure the user data is non-
personally identifiable. See Appeal Br. 13; Ans. 9.
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predetermined number of account profiles.” Accordingly, we do not sustain
the Examiner’s obviousness rejection of the independent claims, or the
claims dependent thereon.
DECISION SUMMARY
In summary:
Claims
Rejected
35 U.S.C. § Basis/Reference(s) Affirmed Reversed
1–3, 5–13,
15–20
101 Eligibility 1–3, 5–13,
15–20

1–3, 5–13,
15–20
103 Joa, Kinkead 1–3, 5–13,
15–20
Overall
Outcome
1–3, 5–13,
15–20

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