Montgomery, Scott et al.

Patent Trials and Appeals Board

Apr 2, 2020

12889139 - (D) (P.T.A.B. Apr. 2, 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.
12/889,139 09/23/2010 Scott Montgomery 080839-0388133 5767
909 7590 04/02/2020
Pillsbury Winthrop Shaw Pittman, LLP
PO Box 10500
McLean, VA 22102
EXAMINER
OBEID, MAMON A
ART UNIT PAPER NUMBER
3685
NOTIFICATION DATE DELIVERY MODE
04/02/2020 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):
docket_ip@pillsburylaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte SCOTT MONTGOMERY
and HARRY T. WHITEHOUSE
____________

Appeal 2018-003379
Application 12/889,139
Technology Center 3600
____________

Before ANTON W. FETTING, NINA L. MEDLOCK, and
MATTHEW S. MEYERS, Administrative Patent Judges.

MEYERS, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s
Final Rejection of claims 1–20. We have jurisdiction under 35 U.S.C.
§ 6(b). An oral hearing was held on December 5, 2019.
We REVERSE.

1 We use the term “Appellant” to refer to “applicant” as defined in 37 C.F.R.
§ 1.42. Our decision references Appellant’s Appeal Brief (“Appeal Br.,”
filed September 25, 2017) and Reply Brief (“Reply Br.,” filed February 12,
2018), and the Examiner’s Answer (“Ans.,” mailed December 15, 2017) and
Final Office Action (“Final Act.,” mailed May 5, 2017). Appellant identifies
the real party in interest as “PSI Systems, Inc.” Appeal Br. 2.
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CLAIMED INVENTION
Appellant’s claims relate “generally to electronic postage metering
systems, and more particularly, personal computer (PC)-based postage
systems.” Spec. ¶ 2.
Claims 1, 10, 19, and 20 are the independent claims on appeal.
Claim 1, reproduced below, with bracketed notations and some paragraphing
added, is illustrative of the claimed subject matter:
1. A method for facilitating cryptographic-based generation
and validation of postage indicia, comprising:
[a] obtaining, at a postage-issuing computer system
associated with a postage vendor, a tracking number unique
within the United States Postal Service (USPS), wherein the
unique tracking number is allocated to a postage transaction and
enables a mail piece associated with the postage transaction to be
tracked within the USPS;
[b] generating, at the postage-issuing computer system, a
digital signature based on at least (i) the unique tracking number,
(ii) other information for a unique postage indicium, and (iii) a
private key of a public/private key pair associated with the
postage vendor such that digital integrity of both the unique
tracking number and the other information for the unique postage
indicium is verifiable using (i) the digital signature and (ii) a
public key of the public/private key pair;
[c] generating, at the postage-issuing computer system,
data representing the unique postage indicium such that the
unique postage indicium data includes (i) the unique tracking
number allocated to the postage transaction, (ii) the other
information for the unique postage indicium, and (iii) the digital
signature;
[d] causing, by the postage-issuing computer system, an
end-user computer to be enabled to print the unique postage
indicium as a first bar code on a first mail piece and the unique
tracking number allocated to the postage transaction as a second
bar code on a different portion of the first mail piece than the first
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bar code such that the unique tracking number is represented at
least twice on the first mail piece; and
[e] performing, at the postage-issuing computer system,
validation of a printed postage indicium carried on a mail piece
received at the USPS, wherein the performance of the validation
comprises:
[f] obtaining data representing the printed postage
indicium, wherein the printed postage indicium data
includes (i) a purported tracking number, (ii) other
information for the printed postage indicium, and (iii) a
purported digital signature for the printed postage
indicium;
[g] using the public key of the public/private key
pair associated with the postage vendor to determine
whether the purported digital signature for the printed
postage indicium is valid; and
[h] providing an indication that the printed postage
indicium is valid responsive to a determination that the
purported digital signature is valid and that the purported
tracking number matches the unique tracking number
allocated to the postage transaction.

REJECTIONS
1. Claims 1–20 are rejected under 35 U.S.C. § 101 as directed to a
judicial exception without significantly more.
2. Claims 9 and 18 are rejected under 35 U.S.C. § 112, fourth
paragraph, as being of improper dependent form for failing to further limit
the subject matter of the claim upon which it depends, or for failing to
include all the limitations of the claim upon which it depends.

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ANALYSIS
Patent-Ineligible Subject Matter
Appellant argues claims 1–20 as a group. Appeal Br. 7–21; Reply
Br. 2–16. We select independent claim 1 as representative. The remaining
claims stand or fall with claim 1. See 37 C.F.R. § 41.37(c)(1)(iv).
A. Section 101
An invention is patent eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
However, the U.S. 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 Court’s two-part 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
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
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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 waterproof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267–68 (1853))); 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
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 187; 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 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. (citation omitted)
(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 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 (quotation marks omitted).
“A claim that recites an abstract idea must include ‘additional features’ to
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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
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101. 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(“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.
Under the 2019 Revised Guidance and the October 2019 Update, 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 organizing
human activity such as a fundamental economic practice, or mental
processes) (“Step 2A, Prong One”); 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 Two”).3

2 In response to received public comments, the Office issued further
guidance on October 17, 2019, clarifying the 2019 Revised 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.pdf).
3 This evaluation is performed by (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception, and
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2019 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 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.
2019 Revised Guidance, 84 Fed. Reg. at 52–56.
Independent claim 1 and Dependent claims 2–9
Step One of the Mayo/Alice Framework
With regard to the first step of the Mayo/Alice framework and
Step 2A, Prong One of the 2019 Revised Guidelines, 84 Fed. Reg. at 54, the
Examiner determines that exemplary independent claim 1 broadly recites
“generating and validating postage indicia.” Final Act. 3. The Examiner
considers this to be an abstract idea, inasmuch as the claimed concept “can
be performed mentally (or by a human using a pen and paper) and [is]
similar to concepts identified as abstract ideas by the courts.” Id. at 4. The
Examiner determined that the remaining claims are patent ineligible for
substantially the same reasons. Id. at 2–6.

(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 2019 Revised Guidance - Section III(A)(2),
84 Fed. Reg. at 54–55.
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The Federal Circuit has explained that “the ‘directed to’ inquiry
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) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d
1343, 1346 (Fed. Cir. 2015)). It asks whether the focus of the claims is on a
specific improvement in relevant technology or on a process that itself
qualifies as an “abstract idea” for which computers are invoked merely as a
tool. See id. at 1335–36.
The Specification is entitled “Systems and Methods for Detecting
Postage Fraud Using an Indexed Lookup Procedure” (emphasis omitted),
and states that the disclosure relates “generally to electronic postage
metering systems, and more particularly, personal computer (PC)-based
postage systems.” Spec. ¶ 2. According to the Specification, existing PC-
based postage architectures utilize a Postal Secure Device (PSD) that
facilitates the purchase and download of lump sums of postage via a
telecommunications link to the PSD at the end user’s location. Id. ¶ 4.
Alternatively, “the end user’s account balance is securely stored in a
centralized postage-issuing computer system, and the end user contacts the
centralized postage-issuing computer system each and every time postage is
to be applied to a mail piece” using the PSD at the end user’s location. Id.
When using such PC-based postage architectures, a typical mail piece
includes a postage indicium printed on an envelope. Id. ¶ 5. The “postage
indicium comprises a two-dimensional barcode containing data relating to
the mail piece and the account holder, as well as human-readable
information, e.g., the data, account number and amount of postage” (id.),
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and each postage indicium includes sufficient information so as to verify
authenticity of the postage indicium by “using only the human-readable
information on the mail piece and the data encoded in the two-dimensional
barcode of the postage indicium.” Id. ¶ 6.
The Specification further discloses that validation is performed using
public and private key components such that a private key component is
used to digitally sign data contained in the postage indicium to generate a
digital signature that is appended to the private key. Id. ¶ 9. More
particularly, the Specification states:
each end user (i.e., meter account) has a unique public/private
key pair assigned to him or her. The private key component is
never divulged to the end user, but is stored securely in the PSD
at the end user’s site. The PSD digitally signs the data, i.e., the
information associated with the postage indicium request. The
matching public key component can then be used to validate the
signature.
Id.
The Specification notes, however, that distributed architecture
systems or newer stand-alone meters “must continue to have a unique,
dedicated key pair in each remote PSD” because “[i]f a single key pair was
used, and an end user compromised just one of those devices, that key could
be distributed widely and used to create millions of fraudulent postage
indicia.” Id. ¶ 19. Further, existing systems do “a poor job of protecting
against the fraudulent use of copies of valid postage indicia” such that
“[d]uplicate mail pieces have the potential to create substantial dollar losses
to the USPS.” Id. ¶ 21. To address these drawbacks, the present invention
provides a “postage indicia tracking system for generating self-validating
unique postage indicia that can be validated by a postal authority.” Id. ¶ 81.
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Consistent with this disclosure, independent claim 1 recites “[a]
method for facilitating cryptographic-based generation and validation of
postage indicia” including steps for: (1) obtaining a tracking number, i.e.,
“obtaining a tracking number unique within the United States Postal Service
(USPS)” (step [a]); (2) generating a digital signature and data representing
the unique postage indicium, i.e., “generating a digital signature” and
“generating data representing the unique postage indicium” (steps [b], [c]);
(3) causing an end-user computer to be enabled to print the unique postage
indicium and the unique tracking number, i.e., “causing an end-user
computer to be enabled to print” (step [d]), and performing validation of a
printed postage indicium using the public/private key pair, i.e., “performing
validation of a printed postage indicium,” “obtaining data representing the
printed postage indicium,” “using the public key of the public/private key
pair,” and “providing an indication that the printed postage indicium is
valid” (steps [e]–[h]).
Applying the 2019 Revised Guidance, we are persuaded that even if
independent claim 1 recites an abstract idea, as the Examiner determined, the
Examiner has not sufficiently established that the claim fails to either
integrate the abstract idea into a practical application or recite significantly
more than an abstract idea. Here, the Examiner determined, as described
above, that the claims are directed to “generating and validating postage
indicia.” Final Act. 3. However, as the Examiner points out, independent
claim 1 includes limitations that go beyond simply generating and validating
postage indicia. See, e.g., Final Act. 4–5. More particularly, the Examiner
identifies that the additional elements include steps for “generating a digital
signature,” “causing an end-user computer to be enabled to print,” and
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“using the public key of the public/private key pair associated with the
postage vendor to determine whether the purported digital signature for the
printed postage indicium is valid” (steps [b], [d], and [g]). Id.
Responding to Appellant’s arguments regarding these additional
elements (Appeal Br. 16–22), the Examiner states that
[t]he postage-issuing computer system is recited at a high level
of generality, and comprises only a microprocessor and memory
to simply perform the generic computer functions of causing an
end-user computer to be enabled to print data/information. Other
generic computer functions that may be performed by postage-
issuing computer system are: obtaining, generating, performing,
obtaining, using and providing data/information.
Ans. 11–12. The Examiner asserts that “[g]eneric computers performing
generic computer functions, alone, do not amount to significantly more than
the abstract idea,” and concludes that “[t]here is no improvement to the
functioning of the computer nor is there an improvement to another
technology or technical field.” Id. at 12. According to the Examiner,
[e]ven when considered in combination, the computer
components of applicant’s claims add nothing that is not already
present when the steps are considered separately. Viewed as a
whole, applicant’s claims simply convey the concept of
generating and validating postage indicia. The claims at issue
amount to nothing significantly more than an instruction to apply
the abstract idea of generating and validating postage indicia
using some unspecified, generic computer.
Id.
However, other than simply asserting that the additional elements are
generic or conventional, the Examiner’s analysis does not address whether
the claimed operations entail an improvement to cryptographic-based
validation of postage indicia. More particularly, the Examiner has not
addressed whether this functionality, i.e., the steps of “generating a digital
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signature based on at least (i) the unique tracking number, (ii) other
information for a unique postage indicium, and (iii) a private key of a public
private key pair” and “using the public key of the public/private key pair
associated with the postage vendor to determine whether the purported
digital signature for the printed postage indicium is valid,” offer an
advantage over existing postage verification systems by inserting “at least
one unique identifier in the digitally signed portion of the postage indicium”
that allows the detection of copy fraud and leads to other security
advantages. Spec. ¶ 100.
According to Appellant,
[i]n the instant application, the claims recite a particular technical
solution at least to a problem specifically arising from computer
systems that facilitate “standalone” verification. See
Specification at ¶¶ 6–32 (describing issues with prior art
computer systems that facilitate “stand-alone” verification,
including costs and logistical issues related to management of
millions of key pairs, issues related to the need to limit private
keys to within a cryptographic processor, fraud arising from such
prior art computer systems, etc.). In addition, the claimed
solution provides for a single digital signature that enables the
digital integrity of both the unique tracking number and the other
information of the unique postage indicium to be verified,
thereby reducing computer resources necessary for performing
cryptographic-based validation of postage indicia.
Reply Br. 13. As discussed above, the Specification identifies the
deficiencies associated with existing systems that do “a poor job of
protecting against the fraudulent use of copies of valid postage indicia” such
that “[d]uplicate mail pieces have the potential to create substantial dollar
losses to the USPS.” Spec. ¶ 21. And, the present invention addresses these
deficiencies by providing “postage indicia tracking system for generating
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self-validating unique postage indicia that can be validated by a postal
authority.” Id. ¶ 81.
Consequently, the Examiner has not addressed whether this
functionality, viewed in light of Appellant’s Specification, entails an
improvement to to cryptographic-based validation of postage indicia.
Therefore, the Examiner has not established that independent claim 1 fails to
integrate the asserted abstract idea into a practical application. Therefore,
we do not sustain the Examiner’s rejection of independent claim 1 under
35 U.S.C. § 101. For the same reasons, we also do not sustain the
Examiner’s rejection of dependent claims 2–9.
Independent Claims 10, 19, and 20 and Dependent Claims 12–18
Independent claims 10, 19, and 20 include limitations substantially
similar to the limitations of independent claim 1, and stand rejected based on
the same rationale applied with respect to independent claim 1. Therefore,
we do not sustain the Examiner’s rejection under 35 U.S.C. § 101 of
independent claims 10, 19, and 20, and claims 12–18, which depend
therefrom, for the same reasons set forth above with respect to independent
claim 1.
35 U.S.C. § 112, fourth paragraph
Dependent Claims 9 and 18
Claim 9 depends directly from independent claim 1 and claim 18
depends directly from independent claim 10. Appeal Br. 25, 27–28 (Claims
App.). Independent claims 1 and 10 are each directed to a method and
system “for facilitating cryptographic-based generation and validation of
postage indicia.” Id. at 25, 27. Independent claims 1 and 10 also each
recites “providing an indication that the printed postage indicium is valid
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responsive to a determination that the purported digital signature is valid and
that the purported tracking number matches the unique tracking number
allocated to the postage transaction.” Id.
Dependent claim 9 recites
providing, by the postage-issuing computer system, an
indication that the printed postage indicium is invalid responsive
to a determination that the purported digital signature is invalid,
that the purported tracking number does not match any valid
tracking number stored in a transaction database, or that the
purported tracking number has been used on another mail piece
previously handled by the USPS.”
Id. at 27. Dependent claim 18 recites substantially similar functionality. Id.
at 30.
In rejecting claims 9 and 18, the Examiner states that “claim 9 does
not include all the limitations of base claim 1” and “[t]his rationale also
applies to dependent claim 18.” Final Act. 8. More particularly, the
Examiner rejects claims 9 and 18 as being of improper form because “[t]he
phrase ‘determination that the purported digital signature is valid’ recited by
at least claims 1 & 10, is a positive limitation and has been interpreted such
that the purported digital signature is determined to be valid” and “[t]he
phrase ‘determination that the purposed digital signature is invalid’ recited
by at least claims 9 & 18, is a positive limitation and has been interpreted
such that the purported digital signature is determined to be invalid.”
Ans. 18.
Appellant argues that the Examiner erred in determining that
dependent claims 9 and 18 are in improper dependent form because “the
operation of ‘providing an indication that the printed postage indicium is
valid’ is ‘responsive to’ at least a ‘valid’ determination, and, thus, is
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conditioned on at least the ‘valid’ determination” and “the operation of
‘providing an indication that the printed postage indicium is invalid’ is
‘responsive to’ at least an ‘invalid’ determination, and, thus, is conditioned
on at least the ‘invalid’ determination.” Reply Br. 17.
We are persuaded by Appellant’s argument that because independent
claims 1 and 10 and dependent claims 9 and 18 do not positively recite
determining “that the purported digital signature is” valid or invalid.
Instead, independent claims 1 and 10 and dependent claims 9 and 18
positively recite “providing an indication” based on a conditional
determination “that the purported digital signature is” valid or invalid. Thus,
the limitations of dependent claims 9 and 18 do not conflict with the
limitations of independent claims 1 and 10, and dependent claims 9 and 18
properly include all of the elements of independent claims 1 and 10.
Accordingly, we do not sustain the Examiner’s rejection of dependent
claims 9 and 18 under 35 U.S.C. § 112, fourth paragraph.

CONCLUSION
In summary:
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1–20 101 Eligibility 1–20
9, 18 112, fourth
paragraph
9, 18
Overall
Outcome
1–20

REVERSED