MasterCard International IncorporatedDownload PDFPatent Trials and Appeals BoardJul 21, 20202020000739 (P.T.A.B. Jul. 21, 2020) Copy Citation 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. 13/934,748 07/03/2013 John Delton Chisholm 21652-00271 5320 75564 7590 07/21/2020 DANIEL M. FITZGERALD (21652) ARMSTRONG TEASDALE LLP 7700 Forsyth Boulevard Suite 1800 St. Louis, MO 63105 EXAMINER ALLADIN, AMBREEN A ART UNIT PAPER NUMBER 3693 NOTIFICATION DATE DELIVERY MODE 07/21/2020 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): USpatents@armstrongteasdale.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte JOHN DELTON CHISHOLM, THEUNIS JOHANNES GERBER, PETER J. GROARKE, ISHFAQ A. LONE, and MARK B. WIESMAN ____________ Appeal 2020-000739 Application 13/934,748 Technology Center 3600 ____________ Before ELENI MANTIS MERCADER, JOHN A. EVANS, and JUSTIN BUSCH, Administrative Patent Judges. EVANS, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Jurisdiction Appellant1 seeks our review under 35 U.S.C. § 134(a) of the Examiner’s final rejection of Claims 1–20, all pending claims. Appeal Br. 1. We have jurisdiction under 35 U.S.C. § 6(b). 1 We use the word “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42 (2017). Appellant states the real party in interest is Mastercard International Incorporated. Appeal Br. 1. Appeal 2020-000739 Application 13/934,748 2 We AFFIRM.2 Summary of the Invention The claims relate to systems and methods for evaluating a risk of fraud in a payment card transaction. See Abstract. Invention Claims 1, 8, and 15 are independent. Claims App. An understanding of the invention can be derived from a reading of Claim 1, which is reproduced in Table 1, infra. Rejections3 Claims Rejected4 35 U.S.C. § References/Basis 1–20 101 Subject Matter Eligibility Final Act. 16–20. ANALYSIS We have reviewed the rejections of Claims 1–20 in light of Appellant’s arguments that the Examiner erred. We have considered in this Decision only those arguments Appellant actually raised in the Briefs. Any other arguments which Appellant could have made but chose not to make in 2 Rather than reiterate the arguments of Appellant and the Examiner, we refer to the Appeal Brief (filed July 26, 2019, “Appeal Br.”), the Reply Brief (filed November 6, 2019, “Reply Brief”), the Examiner’s Answer (mailed September 6, 2019, “Ans.”), the Final Action (mailed January 28, 2019, “Final Act.”), and the Specification (filed May 25, 2016, “Spec.”) for their respective details. 3 The Application was examined under the first inventor to file provisions of the AIA. Final Act. 2. 4 The Examiner withdrew the rejections under 35 U.S.C. § 112. Ans. 30. Appeal 2020-000739 Application 13/934,748 3 the Briefs are deemed to be waived. See 37 C.F.R. § 41.37(c)(1)(iv). We provide the following explanation to highlight and address specific arguments and findings primarily for emphasis. We consider Appellant’s arguments as they are presented in the Appeal Brief and the Reply Brief. CLAIMS 1–20: INELIGIBLE SUBJECT MATTER Appellant argues the merits of the claims as a group without reference to the limitations of any specific claim. See Appeal Br. 7–13. Therefore, we decide the appeal of the § 101 rejection on the basis of illustrative Claim 1 and refer to the rejected claims collectively herein as “the claims.” See 37 C.F.R. § 41.37(c)(1)(iv); In re King, 801 F.2d 1324, 1325 (Fed. Cir. 1986). We reviewed the record de novo. SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1331 (Fed. Cir. 2010) (citation omitted) (“Whether a claim is drawn to patent-eligible subject matter is an issue of law that we review de novo.”). Based upon our review of the record in light of recent policy guidance with respect to patent-eligible subject matter rejections under 35 U.S.C. § 101,5 we affirm the rejection of Claims 1–20 for the specific reasons discussed below. The Examiner’s Findings and Appellant’s Contentions. The Examiner finds the claims are directed to certain methods of organizing human activity which category is used to describe fundamental economic principles or practices including the mitigation of risk presently at issue. Ans. 31. Appellant characterizes risk mitigation as a technology 5 See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Revised Guidance”). Appeal 2020-000739 Application 13/934,748 4 which the claims improve. Appeal Br. 10 (“[T]he claims provide an improvement to the technical field of accurately detecting fraudulent transactions conducted over a payment network”). 35 U.S.C. § 101 Section 101 provides that a patent may be obtained for “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. The Supreme Court has long recognized, however, that § 101 implicitly excludes “[l]aws of nature, natural phenomena, and abstract ideas” from the realm of patent-eligible subject matter, as monopolization of these “‘basic tools of scientific and technological work’” would stifle the very innovation that the patent system aims to promote. 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)); see also Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72–78 (2012); Diamond v. Diehr, 450 U.S. 175, 185 (1981). Under the mandatory Revised Guidance, we reconsider whether Appellant’s claims recite: 1. any judicial exceptions, including certain groupings of abstract ideas (i.e., mathematical concepts, certain methods of organizing human activity such as a fundamental economic practice, or mental processes), and 2. additional elements that integrate the judicial exception into a practical application (see MPEP § 2106.05(a)–(c), (e)–(h)). Only if a claim, (1) recites a judicial exception, and (2) does not integrate that exception into a practical application, do we then reach the issue of whether the claim: Appeal 2020-000739 Application 13/934,748 5 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. A. Whether the claims recite a judicial exception The Revised Guidance extracts and synthesizes key concepts identified by the courts as abstract ideas to explain that the abstract-idea exception includes the following groupings of subject matter: (a) mathematical concepts,6 i.e., mathematical relationships, mathematical formulas, equations,7 and mathematical calculations8; (b) certain methods of organizing human activity—fundamental economic principles or practices (including hedging, insurance, mitigating risk); commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations); managing personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or 6 Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“The concept of hedging . . . reduced to a mathematical formula . . . is an unpatentable abstract idea.”). 7 Diehr, 450 U.S. at 191 (“A mathematical formula as such is not accorded the protection of our patent laws”); Parker v. Flook, 437 U.S. 584, 594 (1978) (“[T]he discovery of [a mathematical formula] cannot support a patent unless there is some other inventive concept in its application.”). 8 SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018) (holding that claims to a “series of mathematical calculations based on selected information” are directed to abstract ideas). Appeal 2020-000739 Application 13/934,748 6 instructions)9; and (c) mental processes—concepts performed in the human mind (including observation, evaluation, judgment, opinion).10 The preamble of independent Claim 1 recites: “A computer-based method of a Risk Based Decisioning Service (RBDS) for evaluating a risk of fraud associated with a payment card transaction processed over a payment card interchange network, the method implemented by a processor coupled to a memory device, the method comprising.” The limitations recited in the body of the claim are analyzed in Table I against the categories of abstract ideas as set forth in the Revised Guidance. As set forth in Table I below, we find limitations [g], [h], and [i] of independent Claim 1 recite abstract ideas, i.e., “mental processes.” Table I Claim 1 Revised Guidance [a]11 receiving, electronically, by the processor, from a point-of-sale (POS) terminal, over the payment card interchange network, payment card transaction messages, in an electronic form, relating to a purchase transaction using a An additional element that adds insignificant extra-solution activity to the judicial exception, i.e., mere data-gathering. See Revised Guidance at 55. 9 Alice, 573 U.S. at 219–20 (concluding that use of a third party to mediate settlement risk is a “fundamental economic practice” and thus an abstract idea); see Revised Guidance, at 52 n.13 for a more extensive listing of “[c]ertain methods of organizing human activity” that have been found to be abstract ideas. 10 Mayo, 566 U.S. at 71 (“‘[M]ental processes[ ] and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work’” (quoting Gottschalk v. Benson, 409 U.S. 63, 67 (1972))). 11 Step designators, e.g., “[a],” were added to facilitate discussion. Appeal 2020-000739 Application 13/934,748 7 payment card account of an account holder, the payment card transaction messages including at least one of an authorization request message and an authorization response message, the payment card interchange network being a communication network for processing payment card transactions, the processor communicatively coupled to both the payment card interchange network and a second network, the second network being a web-based network separate from the payment card interchange network; [b] storing data elements of the payment card transaction messages in an RBDS data store; An additional element that adds insignificant extra-solution activity to the judicial exception, mere data- storage. See Revised Guidance at 55. [c] receiving, electronically, by the processor, an application event transaction message, in an electronic form, relating to a non- purchase electronic interaction with the payment card account by the account holder, the non-purchase interaction initiated with a computer device by the account holder, over the second network, the non- purchase interaction occurring prior to the purchase transaction, wherein the non-purchase interaction includes a verification interaction that verifies an identity of the account holder to a website An additional element that adds insignificant extra-solution activity to the judicial exception, i.e., mere data-gathering. See Revised Guidance at 55. Appeal 2020-000739 Application 13/934,748 8 accessed by the account holder, wherein the computer device is different than the POS terminal; [d] storing data elements of the application event transaction message in the RBDS data store; An additional element that adds insignificant extra-solution activity to the judicial exception, mere data- storage. See Revised Guidance at 55. [e] receiving, electronically, by the processor, payment card account reputation messages, in an electronic form, wherein the payment card account reputation messages include historical data relating to the trustworthiness of the payment card account, the payment card account reputation messages received prior to the purchase transaction; An additional element that adds insignificant extra-solution activity to the judicial exception, i.e., mere data-gathering. See Revised Guidance at 55. [f] storing data elements of the payment card account reputation messages in the RBDS data store; An additional element that adds insignificant extra-solution activity to the judicial exception, mere data- storage. See Revised Guidance at 55. [g] analyzing the payment card transaction messages and application event transaction message together to generate an application event transaction trust score for the purchase transaction; Mental processes, i.e., concepts performed in the human mind (including an observation, evaluation, judgment, opinion). See Revised Guidance at 52. [h] comparing, by the processor, at least one electronic data element in each of the stored payment card transaction messages to a corresponding at least one Mental processes, i.e., concepts performed in the human mind (including an observation, evaluation, judgment, opinion). See Revised Guidance at 52. Appeal 2020-000739 Application 13/934,748 9 electronic data element in the stored payment card account reputation messages to generate an authorization fraud score for the purchase transaction; [i] modifying the generated authorization fraud score for the purchase transaction using the application event transaction trust score of the payment card account, the modified authorization fraud score indicating at least one of a risk of fraud associated with the purchase transaction and a trustworthiness of the payment card account used in the purchase transaction; and Mental processes, i.e., concepts performed in the human mind (including an observation, evaluation, judgment, opinion). See Revised Guidance at 52. [j] outputting the modified authorization fraud score for the purchase transaction through the payment card interchange network, the modified authorization fraud score provided to at least one party to the purchase transaction for use in approving or denying the purchase transaction. An additional element that adds insignificant extra-solution activity to the judicial exception, i.e., mere data-transmission. See Revised Guidance at 55. Step 2A(ii): Judicial Exception Integrated into a Practical Application? If the claims recite a patent-ineligible concept, as we conclude above, we proceed to the “practical application” Step 2A(ii) wherein the “claims are considered in their entirety to ascertain whether their character as a whole is directed to excluded subject matter.” McRO, Inc. v. Bandai Namco Games Appeal 2020-000739 Application 13/934,748 10 Am. Inc., 837 F.3d 1299, 1312 (Fed. Cir. 2016) (quotes and citation omitted). This test determines whether the recited judicial exception is integrated into a practical application of that exception by: (a) identifying whether there are any additional elements recited in the claim beyond the judicial exception(s); and (b) evaluating those additional elements individually and in combination to determine whether they integrate the exception into a practical application. For the reasons which follow, we conclude that Appellant’s claims do not integrate the judicial exception into a practical application. MPEP § 2106.05(a) “Improvements to the Functioning of a Computer or to Any Other Technology or Technical Field” “In determining patent eligibility, examiners should consider whether the claim ‘purport(s) to improve the functioning of the computer itself’” or “any other technology or technical field.” MPEP § 2106.05(a). Appellant contends the: “claims do not recite an abstract idea. For example, Claim 1 recites a computer-based method of a Risk Based Decisioning Service (RBDS) for evaluating a risk of fraud associated with a payment card transaction processed over a payment card interchange network.” Appeal Br. 10. According to Appellant’s characterization, we find the claims to be similar to those of FairWarning12 which claimed a system and method of detecting fraud and/or misuse in a computer environment, comprising collecting information regarding accesses of a patient’s personal health information, analyzing the information according to one of several rules to 12 FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089 (Fed. Cir. 2016). Appeal 2020-000739 Application 13/934,748 11 determine if the activity indicates improper access, and providing notification if it determines that improper access has occurred. 839 F.3d at 1092. The court determined that these claims were directed to the abstract concept of “collecting and analyzing information to detect misuse and notifying a user when misuse is detected.” The court also noted that the claimed rules there were unlike those in McRO because the claimed rules in FairWarning asked “the same questions (though perhaps phrased with different words) that humans in analogous situations detecting fraud have asked for decades, if not centuries.” 839 F.3d at 1094–95. The present claims recite steps such as receiving transaction messages, storing data, analyzing transaction messages, comparing, modifying a fraud score, and outputting a fraud score. See Claim 1. Thus, the claimed method recites “generalized steps to be performed on a computer using conventional computer activity.” Uniloc USA, Inc. v. LG Elecs. USA, Inc., 957 F.3d 1303, 1308 (Fed. Cir. 2020). Appellant’s contentions do not proffer “specific asserted improvements in computer capabilities [but, rather] a process [or system] that qualifies an abstract idea for which computers are invoked merely as a tool.” Customedia Techs., LLC v. DISH Network Corp., 951 F.3d 1359, 1364 (Fed. Cir. 2020) (quotes and citation omitted). MPEP § 2106.05(b): Particular Machine The Bilski machine-or-transformation test is only applicable to method (process) claims. However, “[r]egardless of what statutory category (‘process, machine, manufacture, or composition of matter,’ 35 U.S.C. § 101) a claim’s language is crafted to literally invoke, we look to the Appeal 2020-000739 Application 13/934,748 12 underlying invention for patent-eligibility purposes.” CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1374 (Fed. Cir. 2011). Here, it is clear that the invention underlying the system of Claim 8 and the storage media of Claim 15, is the method of Claim 1. We therefore, analyze the machine prong of the Bilski machine-or-transformation test. Appellant discloses generic machines and software are suitable: system 100 includes a server system 112, and a plurality of client sub-systems, also referred to as client systems 114, connected to server system 112. In one embodiment, client systems 114 are computers including a web browser, such that server system 112 is accessible to client systems 114 using the Internet. Client systems 114 are interconnected to the Internet through many interfaces including a network 115, such as a local area network (LAN) or a wide area network (WAN), dial- in-connections, cable modems, and special high-speed Integrated Services Digital Network (ISDN) lines. Client systems 114 could be any device capable of interconnecting to the Internet including a web-based phone, PDA, or other web- based connectable equipment. Spec. ¶ 37. We find no indication, nor does Appellant direct our attention, that the claimed invention relies on other than generic devices or uses other than generic software. We, therefore, conclude Appellant’s claims fail to satisfy the machine prong of the Bilski machine-or-transformation test. MPEP § 2106.05(c): Particular Transformation This section of the MPEP guides: “Another consideration when determining whether a claim recites significantly more is whether the claim effects a transformation or reduction of a particular article to a different state or thing.” “‘Transformation and reduction of an article to a different state or thing is the clue to the patentability of a process claim that does not include Appeal 2020-000739 Application 13/934,748 13 particular machines.’” Bilski, 561 U.S. at 658 (quoting Benson, 409 U.S. at 70). The claims select and analyze certain electronic data. The selection of electronic data is not a “transformation or reduction of an article into a different state or thing constituting patent-eligible subject matter[.]” See In re Bilski, 545 F.3d 943, 962 (Fed. Cir. 2008) (emphasis added); see also CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011) (“The mere manipulation or reorganization of data . . . does not satisfy the transformation prong.”). Applying this guidance here, we conclude Appellant’s method claims fail to satisfy the transformation prong of the Bilski machine-or-transformation test. MPEP § 2106.05(e): Other Meaningful Limitations This section of the MPEP guides: Diamond v. Diehr provides an example of a claim that recited meaningful limitations beyond generally linking the use of the judicial exception to a particular technological environment. 450 U.S. 175 . . . (1981). In Diehr, the claim was directed to the use of the Arrhenius equation (an abstract idea or law of nature) in an automated process for operating a rubber-molding press. 450 U.S. at 177-78 . . . . The Court evaluated additional elements such as the steps of installing rubber in a press, closing the mold, constantly measuring the temperature in the mold, and automatically opening the press at the proper time, and found them to be meaningful because they sufficiently limited the use of the mathematical equation to the practical application of molding rubber products. 450 U.S. at 184, 187. . . . In contrast, the claims in Alice Corp. v. CLS Bank International did not meaningfully limit the abstract idea of mitigating settlement risk. 573 U.S. . . . In particular, the Court concluded that the additional elements such as the data processing system and communications controllers recited in Appeal 2020-000739 Application 13/934,748 14 the system claims did not meaningfully limit the abstract idea because they merely linked the use of the abstract idea to a particular technological environment (i.e., “implementation via computers”) or were well-understood, routine, conventional activity. MPEP § 2106.05(e). “[T]he relevant question is whether the claims here do more than simply instruct the practitioner to implement the abstract idea . . . on a generic computer.” Alice, 573 U.S. at 225. We find that Appellant’s claims do not add meaningful limitations beyond generally linking the use of the judicial exception to a particular technological environment. MPEP § 2106.05(f): Mere Instructions to Apply an Exception Appellant does not persuasively argue that their claims do any more than invoke generic computer components merely as a tool in which the computer instructions apply the judicial exception. MPEP § 2106.05(g): Insignificant Extra-Solution Activity The claims acquire and display data, which are classic examples of insignificant extra-solution activity. See, e.g., Bilski, 545 F.3d at 963 (en banc), aff’d sub nom, Bilski, 561 U.S. 593. MPEP § 2106.05(h): Field of Use and Technological Environment [T]he Supreme Court has stated that, even if a claim does not wholly pre-empt an abstract idea, it still will not be limited meaningfully if it contains only insignificant or token pre- or post-solution activity—such as identifying a relevant audience, a category of use, field of use, or technological environment. Appeal 2020-000739 Application 13/934,748 15 Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1346 (Fed. Cir. 2013) (citations omitted). In view of Table I, above, we find Limitations [g]–[i] recite abstract mental processes and the remaining limitations recite insignificant extra- solution activity. Thus, we find the claimed data-manipulation is simply a field of use that attempts to limit the abstract idea to a particular technological environment. We are unpersuaded by Appellant’s arguments because the mere application of an abstract idea in a particular field is not sufficient to integrate the judicial exception into a practical application. See 84 Fed. Reg. at 55, n.32. In view of the foregoing, we conclude the claims are “directed to” a judicial exception. B. Well-understood, routine, conventional Because the claims recite a judicial exception and do not integrate that exception into a practical application, we must then reach the issue of whether the claim adds a specific limitation beyond the judicial exception that is not “well-understood, routine, conventional” in the field. Revised Guidance, 84 Fed. Reg. at 56; see Appeal Br. 23 (citing the “Berkheimer Memorandum”).13 As discussed above, the written description describes the claimed computer system consistent with its being “well-understood, routine, [and] conventional.” 13 Memorandum from Robert W. Bahr, Deputy Comm’r for Patent Examination Policy, to Patent Examining Corps, U.S. Patent and Trademark Office (April 19, 2018), https://www.uspto.gov/sites/default/files/ documents/memo-berkheimer-20180419.PDF (citing Berkheimer v. HP Inc., 881 F.3d 1360, 1367–68 (Fed. Cir. 2018)). Appeal 2020-000739 Application 13/934,748 16 C. Specified at a high level of generality It is indicative of the absence of an inventive concept where the claims simply append well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception. Revised Guidance, 84 Fed. Reg. at 56. The claims fail to recite any specific steps of an algorithm, nor does Appellant cite any Specification disclosure for the required specificity. We find the limitations are specified at such a high level of generality consistent with the absence of an inventive concept. Considering the claim limitations as an ordered combination adds nothing to the abstract idea that is not already present when the limitations are considered separately. See Mayo, 566 U.S. at 79. The ordered combination of limitations amounts to nothing more than certain mental processes implemented with generic computer components that operate “in a conventional way.” See also Alice, 573 U.S. at 225–26. Therefore, we conclude that none of the claim limitations, viewed “both individually and as an ordered combination,” amount to significantly more than the judicial exception in order to sufficiently transform the nature of the claims into patent-eligible subject matter. See Alice, 573 U.S. at 217 (internal quotations omitted) (quoting Mayo, 566 U.S. at 79). In view of the foregoing, we sustain the rejection of Claims 1–20 under 35 U.S.C. § 101. DECISION SUMMARY Claims Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 1–20 101 Eligibility 1–20 -- Appeal 2020-000739 Application 13/934,748 17 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). See 37 C.F.R. § 41.50(f). AFFIRMED Copy with citationCopy as parenthetical citation