Powell, Jonathan R.

Patent Trials and Appeals Board

Jan 29, 2020

14538548 - (D) (P.T.A.B. Jan. 29, 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.
14/538,548 11/11/2014 Jonathan R. Powell P01449-US-
UTIL (M01.274)
8393
125619 7590 01/29/2020
Mastercard International Incorporated
c/o Buckley, Maschoff & Talwalkar LLC
50 Locust Avenue
New Canaan, CT 06840
EXAMINER
RAZA, ZEHRA
ART UNIT PAPER NUMBER
3685
NOTIFICATION DATE DELIVERY MODE
01/29/2020 ELECTRONIC
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address(es):
colabella@bmtpatent.com
martin@bmtpatent.com
szpara@bmtpatent.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte JONATHAN R. POWELL

Appeal 2019-003664
Application 14/538,548
Technology Center 3600

Before RICHARD M. LEBOVITZ, JEFFREY N. FREDMAN and
JAMIE T. WISZ, Administrative Patent Judges.

LEBOVITZ, Administrative Patent Judge.

DECISION ON APPEAL
The Examiner rejected the claims under 35 U.S.C. § 101 as lacking
patent-eligibility and 35 U.S.C. § 103 as obvious. Pursuant to 35 U.S.C.
§ 134(a), Appellant1 appeals from the Examiner’s decision to reject the
claims. 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. Appellant identifies the real party in interest as Mastercard
International Incorporated. Appeal Br. 2.
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STATEMENT OF THE CASE
The claims stand finally rejected by the Examiner as follows:
1. Claims 3–8 under 35 U.S.C. § 101 because the claimed invention
is directed to a judicial exception. Final Act. 4.
2. Claims 3, 6 and 7 under 35 U.S.C. § 103 as obvious in view of
Flitcroft et al. (US 2003/0028481 A1, published Feb. 6, 2003) (“Flitcroft”)
and Hammad (US 2007/0294182 A1, published Dec. 20, 2007)
(“Hammad”). Final Act. 7.
3. Claims 4 and 5 under 35 U.S.C. § 103 as obvious in view of
Flitcroft, Hammad, and Saunders (US 7,650,314 B1, issued Jan. 19, 2010)
(“Saunders”). Final Act. 9
4. Claim 8 under 35 U.S.C. § 103 as obvious in view of Flitcroft,
Hammad, and Brabson et al. (US 8,651,374 B2, issued Feb. 18, 2014)
(“Brabson”). Final Act. 10.
We select claim 3 as representative of the appealed claims. Claim 3 is
reproduced below (numbering has been added for reference to the
limitations in the claim):
3. A method comprising:
[1] receiving a bank identification number (BIN) that
defines a range of indicator numbers;
[2] generating a plurality of primary account numbers
(PANs) that start with the BIN, all of the PANs having a first
uniform length that consists of a first number of digits;
[3] generating a plurality of tokens that start with the
BIN, all of the tokens having a second uniform length that
consists of a second number of digits that is different from the
first number of digits;
[4] receiving an authorization request by a computer;
[5] detecting, by the computer, a number of digits
contained in an indicator number included in the authorization
request; and
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[6] translating the indicator number into a PAN that is
different from the indicator number in response to determining
by the computer that the detected number of digits equals the
second number of digits;
[7] wherein the BIN is used for routing the authorization
request via electronic communications in a computerized
payment card account system that includes the computer.

§ 101 REJECTION
Principles of Law
Under 35 U.S.C. § 101, an invention is patent-eligible if it claims a
“new and useful process, machine, manufacture, or composition of matter.”
However, not every discovery is eligible for patent protection. Diamond v.
Diehr, 450 U.S. 175, 185 (1981). “Excluded from such patent protection are
laws of nature, natural phenomena, and abstract ideas.” Id. The Supreme
Court articulated a two-step analysis to determine whether a claim falls
within an excluded category of invention. Alice Corp. Pty. Ltd. v. CLS Bank
Int’l, 573 U.S. 208, 216 (2014); Mayo Collaborative Servs. v. Prometheus
Labs, Inc., 566 U.S. 66, 75–77 (2012).
In the first step, it is determined “whether the claims at issue are
directed to one of those patent-ineligible concepts.” Alice, 573 U.S. at 217.
If it is determined that the claims are directed to an ineligible concept, then
the second step of the two-part analysis is applied in which it is asked
“[w]hat else is there in the claims before us?” Id. The Court explained that
this step involves
a search for an ‘inventive concept’ —i.e., an element or
combination of elements that is ‘sufficient to ensure that the
patent in practice amounts to significantly more than a patent
upon the [ineligible concept] itself.’
Alice, 573 U.S. at 217–18 (citing from Mayo, 566 U.S. at 75–77).
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Alice, relying on the analysis in Mayo of a claim directed to a law of
nature, stated that in the second part of the analysis, “the elements of each
claim both individually and ‘as an ordered combination’” must be
considered “to determine whether the additional elements ‘transform the
nature of the claim’ into a patent-eligible application.” Alice, 573 U.S. at
217.
The PTO has published revised guidance on the application of 35
U.S.C. § 101. USPTO’s January 7, 2019 Memorandum, 2019 Revised
Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50, 51–57 (2019)
(“Eligibility Guidance”). This guidance provides additional direction on
how to implement the two-part analysis of Mayo and Alice.
Step 2A, Prong One, of the 2019 Eligibility Guidance, looks at the
specific limitations in the claim to determine whether the claim recites a
judicial exception to patent eligibility. In Step 2A, Prong Two, the claims
are examined to identify whether there are additional elements in the claims
that integrate the exception in a practical application, namely, is there a
“meaningful limit on the judicial exception, such that the claim is more than
a drafting effort designed to monopolize the judicial exception.” 84 Fed.
Reg. 54 (2. Prong Two).
If the claim recites a judicial exception that is not integrated into a
practical application, then as in the Mayo/Alice framework, Step 2B of the
Eligibility Guidance instructs us to determine whether there is a claimed
inventive concept to ensure that the claims define an invention that is
significantly more than the ineligible concept, itself. 84 Fed. Reg. 56. In
making this determination, we must consider whether there are specific
limitations or elements recited in the claim “that are not well-understood,
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routine, conventional activity in the field, which is indicative that an
inventive concept may be present” or whether the claim “simply appends
well-understood, routine, conventional activities previously known to the
industry, specified at a high level of generality, to the judicial exception,
indicative that an inventive concept may not be present.” 84 Fed. Reg. 56
(footnote omitted).
With these guiding principles in mind, we proceed to determine
whether the claimed subject matter in this appeal is eligible for patent
protection under 35 U.S.C. § 101.
Discussion
Following the first step of the Mayo analysis, we find that claim 3 is
directed to a method, and therefore falls into one of the broad statutory
categories of patent-eligible subject matter under 35 U.S.C. § 101. We thus
proceed to Step 2A, Prong One, of the 2019 Eligibility Guidance.

Step 2A, Prong One
In Step 2A, Prong One, the specific limitations in the claim are
examined to determine whether the claim recites a judicial exception to
patent eligibility, namely whether the claim recites an abstract idea, law of
nature, or natural phenomenon. The Examiner found the claims are
“directed to an abstract idea of generating credit card numbers which
according to the Alice examining guidelines is a fundamental economic
practice.” Final Act. 5. A “fundamental economic practice” is a “method of
organizing human activity,” one of the three groupings of abstract ideas
identified in the 2019 Eligibility Guidance. Eligibility Guidance, 84 Fed.
Reg. 52.
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According to Appellant, the “invention has to do with an
improvement in computer-based electronic payments processing systems.”
Appeal Br. 2. The claim comprises “an authorization request by a
computer” (step [4]) of claim 3), which in the context of the claim and
Specification, would be understood as a request to use a credit card for an
electronic payment. The method determines whether the request comprises
an “indicator number,” which when it has a certain number of digits, is
translated into primary account number (steps [5], [6]). Subsequently, the
request is routed to the appropriate financial institution to make the payment
(step [7]). Thus, the steps of the claim, as asserted by Appellant, have to do
with electronic payment. Electronic payments are a fundamental economic
practice because, as discussed in Alice, it is “‘long prevalent in our system of
commerce.’” Alice, 573 U.S. at 219. Similarly, a payment processing
system in Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d
1372, 1378 (Fed. Cir. 2017) was found to be a “fundamental business
practice” and ineligible for a patent under § 101 as directed to an abstract
idea.
Appellant states that the Examiner erred in designating the claims as
reciting an abstract idea, but did not identify a defect in the Examiner’s
reasoning. Appeal Br. 6. Accordingly, because we find the Examiner’s
analysis to be sound, we conclude that the claim recites as abstract idea.

Step 2A, Prong Two
Prong Two of Step 2A under the 2019 Eligibility Guidance asks
whether there are additional elements that integrate the exception into a
practical application. As in the Mayo/Alice framework, we must look at the
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claim elements individually and “as an ordered combination” to determine
whether the additional elements integrate the recited abstract idea into a
practical application. As discussed in the Eligibility Guidance, “[a] claim
that integrates a judicial exception in a practical application will apply, rely
on, or use the judicial exception in a manner that places a meaningful limit
on the judicial exception, such that the claim is more than a drafting effort
designed to monopolize the judicial exception.” Eligibility Guidance, 84
Fed. Reg. 54.
Integration into a practical application is evaluated by identifying
whether there are additional elements individually, and in combination,
which go beyond the judicial exception. Id. at 54–55. As explained in the
October 2019 Update to Subject Matter Eligibility2 “first the specification
should be evaluated to determine if the disclosure provides sufficient details
such that one of ordinary skill in the art would recognize the claimed
invention as providing an improvement.” PEG Update 12. According to the
PEG Update, the “specification need not explicitly set forth the
improvement, but it must describe the invention such that the improvement
would be apparent to one of ordinary skill in the art.” Id.
We begin by describing the subject matter recited in the claim. Claim
3 comprises [1] receiving a bank identification number (“BIN”). A BIN is
used to route a transaction in a payment system to a financial institution.
Spec. 1: 14–17. In the second step of the claim, primary account numbers
(“PANs”) are generated. The PANs have a uniform length of digits. The

2 Available at
https://www.uspto.gov/sites/default/files/documents/peg_oct_2019_update.p
df (last accessed Nov. 15, 2019) (“PEG Update”).

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Specification explains that PANs typically have a BIN in its first four to six
digits to identify the issuing financial institution for the PAN and routing it
to the financial institution. Spec. 1: 14–17. Therefore, we understand the
PAN in the second step of claim 3 to comprise a BIN. Step [3] is generating
tokens which start with the BIN. The Specification explains that the same
BIN can be used for the PAN and the token. Spec. 2:1–4; 3:2–9.
The tokens have “a second uniform length that consists of a second
number of digits that is different from the first number of digits” (step [3] of
claim 3). In other words, the tokens have a different number of digits than
the PAN.
In the subsequent steps of the claim, an authorization request having
an “indicator number” is received by the computer (step [4]) and the number
of digits in the indicator number is detected (step [5]). When the detected
number of digits in the indicator number has the same number of digits in
the token of step [3], the computer recognizes it as a token and translates the
indicator number into PAN (step [6] of claim 3). The BIN portion is
subsequently used to route “the authorization request via electronic
communications in a computerized payment card account system that
includes the computer” (step [7] of claim 3).
The steps of the claim therefore facilitate electronic payment in which
a token is used in the authorization request to initiate the payment, rather
than the primary account number.
The Specification discloses that “tokenization” is a “known concept
. . . in which surrogate values (‘tokens’) replace primary account numbers
(PANs) during part of the operation of payment systems.” Spec. 1:10–12.
The Specification explains that “[o]ne reason for using tokens in place of
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PANs is to combat potentially fraudulent activities.” Id. at 1:12–13. Claim
3 uses tokenization. See step [3]. The Specification discloses that the
invention comprises a way of distinguishing between PANs and tokens that
does not use a dedicated BIN number as in prior art methods. Spec. 1:24–
2:4. This difference is expressly reflected in claim 3 where a token has a
different number of digits than the PAN (step [3] of claim 3) and the token is
recognized when it is determined that the indicator number received by a
computer in an authorization request has a different number of digits than a
PAN (steps [5], [6]). Appellant consistently argues in the Appeal Brief:
More specifically, the present invention improves the
dissemination and handling of payment tokens in a
computerized/electronic-messaging payment card account
system. The present invention proposes that processing of
payment tokens versus conventional payment account numbers
(“PANs”, a/k/a “primary account numbers”) be organized
around the length in digits of tokens versus PANs, rather than
being organized around separate dedicated BIN ranges for
tokens and PANs. This novel approach allows for more
efficient use of BINs in a computerized/electronic messaging
payment card account system, and therefore may forestall a
shortage of BINs that might otherwise arise.

Appeal Br. 6.
The issue in the § 101 rejection is whether the improvement of using
the number of digits in an indicator number to identify a token is the type of
improvement to a technological process that imparts eligibility to the claims.
In our opinion, it does not.
The claimed improvement to the electronic payment system does not
improve how a computer functions as did the claims in Finjan, Inc. v. Blue
Coat Sys., 879 F.3d 1299 (Fed. Cir. 2018) and Core Wireless Licensing
S.A.R.L. v. LG Electronics, Inc., 880 F.3d 1356 (Fed. Cir. 2018). In Finjan,
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879 F.3d at 1304–05, the claimed “behavior-based” approach to virus
scanning improved the computer’s function by allowing the computer to
recognize potential viral threats. In Core Wireless, 880 F.3d at 1363, the
court found that the “efficiency of using the electronic device” was
improved by a menu system and “user interface” which improved navigation
through various views and windows on the computer which the court found
to be “an improvement in the functioning of computers.” Recognizing a
token by how many digits it has does not change the way a computer
operates or the way a user operates the computer.
Appellant cited Enfish, Enfish, LLC v. Microsoft Corp., 822 F.3d 1327
(Fed. Cir. 2016) to support their contention that the claims are eligible for a
patent. Appeal Br. 4, 6. In Enfish, the claims were directed to a data storage
and retrieval system for a computer memory. Enfish, 822 F.3d at 1336. The
system comprised a system for configuring the memory according to logical
table. Id. The court found that the claimed “self-referential table functions
differently than conventional database structures.” Id. at 1337. The court
found the claims were not simply directed to the concept of organizing
information, but instead “are directed to an improvement in the functioning
of a computer.” Id. at 1338. Specifically, the court found that “self-
referential table recited in the claims on appeal is a specific type of data
structure designed to improve the way a computer stores and retrieves data
in memory.” Id. at 1339.
Rejected claim 3 does not improve computer technology as it did in
Finjan, Core Wireless, and Enfish. Rather, the improvement is to the way
the computer determines that an indicator number in an authorization request
is a token. The computer, itself, is not improved by giving users a better
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experience as in Core Wireless, by imparting an ability to detect potential
viral threats as in Finjan, or by improving computer memory as in Enfish.
In SAP America, Inc. v. Investpic, LLC, 890 F.3d 1016, 1022 (Fed.
Cir. 2018) the court held “the focus of the claims is not any improved
computer or network, but the improved mathematical analysis; and indeed,
the specification makes clear that off-the-shelf computer technology is
usable to carry out the analysis.” The court explained:
We readily conclude that there is nothing in the claims
sufficient to remove them from the class of subject matter
ineligible for patenting and transform them into an eligible
application. What is needed is an inventive concept in the non-
abstract application realm.
SAP, 890 F.3d at 1022.
Here, the improvement is to the method by which an indicator is
recognized as being a token – by counting the number of digits in the
indicator number and determining that it is a token when it has the correct
number of digits characteristic of a token. Compare steps [3], [6] of claim 3.
The improvement is integral to the abstract idea of organizing human
activity and therefore is not to “non-abstract application realm.” SAP, 890
F.3d at 1022.
The recognized token is used to initiate payment without
electronically sending the primary account number, itself. The improvement
is to the payment transaction, not to the computer on which it is
accomplished. It is not a method “necessarily rooted in computer
technology in order to overcome a problem specifically arising in the realm
of” payment transactions. DDR Holdings, LLC v. Hotels.com, L.P., 773
F.3d 1245, 1257 (Fed. Cir. 2014).

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As discussed above, an additional element, beyond the abstract idea of
organizing human activity, is necessary to integrate the idea into a practical
application. See supra at pp. 3–4, 6–7. The improvement asserted by
Appellant in recognizing a token by the number of digits is a part of the
implementation of the payment system and represents the abstract idea,
itself. Therefore, this step cannot serve as the “additional element”
necessary to integrate the abstract idea into a practical application.
Steps [2] and [3] involve generating the PANs and tokens. Claim [7]
involves routing the authorization request. Appellant did not argue that
these steps serve to integrate the abstract idea into a practical application.
Rather, they appear to be “insignificant extra-solution activity” and
insufficient to confer eligibility on the claim. Eligibility Guidelines, 84 Fed.
Reg. 55.
Consequently, we conclude that the abstract idea is not integrated into
a practical application.
Step 2B
Because we determined that the judicial exception is not integrated
into a practical application, we proceed to Step 2B of the Eligibility
Guidance, which asks, as in the Mayo/Alice framework, whether there is an
inventive concept. In making this Step 2B determination, we must consider
whether there are specific limitations or elements recited in the claim “that
are not well-understood, routine, conventional activity in the field, which is
indicative that an inventive concept may be present” or whether the claim
“simply appends well-understood, routine, conventional activities previously
known to the industry, specified at a high level of generality, to the judicial
exception, indicative that an inventive concept may not be present.”
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Eligibility Guidance, 84 Fed. Reg. 56 (footnote omitted). We must also
consider whether the combination of steps perform “in an unconventional
way and therefore include an ‘inventive step,’ rendering the claim eligible at
Step 2B.” Id. In this part of the analysis, we consider “the elements of each
claim both individually and ‘as an ordered combination’” and “determine
whether the additional elements ‘transform the nature of the claim’ into a
patent-eligible application.” Alice, 573 U.S. at 217.
Appellant has not established that the claims, when considered as an
ordered combination, provide “an inventive” step. Steps [2] and [3] involve
generating the PANs and tokens. Appellant does not argue that these steps
are performed in an unconventional way. These steps also do not affect how
step [6] is in which the indicator number is translated into a PAN when the
token is recognized by the number of digits it contains.
Step [4] is receiving an authorization request and step [5] is detecting
the number of digits of the indicator number which is part of the request.
These steps do not change how step [6] is performed.
Neither the Specification nor Appellant has identified anything in the
steps alone or combined that enables the determination that the indicator
number is a token to be performed in a non-conventional, inventive way.
The “translating” step in step [6] is described in the Specification as being
accomplished by looking up the PAN in database (“token vault”) that
corresponds to the token. Spec. 12:3–5; 14:11–21. Appellant did not
establish that using a database to look up a PAN is inventive and
unconventional, alone, or in combination with the other steps in the claim.
Accordingly, we conclude that claim 3 does not provide an inventive step.

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Summary
For the foregoing reasons, the rejection of claim 3 as lacking patent
eligibility under 101 is affirmed. Claims 4–8 fall with claim 3. Appeal Br.
5.
§ 103 REJECTIONS
The Examiner found that Flitcroft describes steps [1], [2], and [4]–[7]
of claim 3, but not step [3] of “generating a plurality of tokens that start with
the BIN, all of the tokens having a second uniform length that consists of a
second number of digits that is different from the first number of digits.”
Final Act. 8. For this step, the Examiner cited Hammad which the Examiner
found disclosed the claimed step. Id.
Appellant argues that Flitcroft teaches away from the claimed
invention because it discloses that limited use cards have the same number
of digits as a conventional credit card, which is “the opposite from one
feature of claim 3, according to which PANs and tokens are formatted with
different numbers of digits.” Appeal Br. 9 (citing Flitcroft ¶ 234).
Appellant also argues that Hammad does not describe this step as found by
the Examiner (id. at 9, n.6).
We agree with Appellant that the Examiner has not established that
the claims are prima facie obvious in view of Flitcroft and Hammad.
Flitcroft, as discussed by Appellant, discloses that “limited use card numbers
share the same format as existing credit card numbers.” Flitcroft ¶ 234. A
“limited use card number” is the element identified by the Examiner as the
indicator number of step [5] of claim 3. Final Act. 8–9. Thus, because the
“format” is the same, the number of digits in the indicator number would be
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the same as the number as in the PAN, not different as recited in step [3] of
claim 3.
The Examiner cited paragraphs 35 and 58 of Hammad as describing
[3] generating tokens “having a second uniform length that consists of a
second number of digits that is different from the first number of digits.” In
paragraphs 33 and 35, Hammad teaches modifying the numbers in a primary
PAN to create a secondary PAN, but does not disclose changing the number
of digits in the secondary PAN. Paragraph 58 of Hammad discloses that the
secondary PAN – a token – can be modified to have more or less digits.
However, we have not been directed to a teaching in Hammad where the
number of digits in the secondary PAN identifies it as a token to be
translated into primary PAN as required by step [6] of claim 3. The
Examiner pointed to various disclosures in Flitcroft asserted to teach this
step of the claim. Ans. 7. We have reviewed these disclosures carefully,
and find no support for the Examiner’s finding that [6] “translating the
indicator number into a PAN that is different from the indicator number in
response to determining by the computer that the detected number of digits
equals the second number of digits” is disclosed or suggested by Flitcroft
alone or in combination with Hammad.
The obviousness rejection of claim 3 and dependent claims 6 and 7 is
reversed. The obviousness rejections of claims 4, 5, and 8 are also reversed
for the same reason, and because the additionally cited publications were not
cited by the Examiner to make up for the deficiencies in Flitcroft and
Hammad.

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CONCLUSION
In summary:
Claims
Rejected
35
U.S.C.
§
Reference(s)/Basis Affirmed Reversed
3–8 101 Eligibility 3–8
3, 6, 7 103 Flitcroft, Hammad 3, 6, 7
4, 5 103 Flitcroft, Hammad,
Saunders
4, 5
8 103 Flitcroft, Hammad,
Brabson
8
Overall
Outcome
3–8

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

AFFIRMED