WePay, Inc.

Patent Trials and Appeals Board

Mar 29, 2022

2021002434 (P.T.A.B. Mar. 29, 2022)

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. 15/745,680 01/17/2018 Raymond NG R2124-01102 3488 136452 7590 03/29/2022 Duane Morris LLP (Wepay Gen) IP Docketing 2475 Hanover Street Palo Alto, CA 94304-1194 EXAMINER LOTHERY, BERNADINE ART UNIT PAPER NUMBER 3693 NOTIFICATION DATE DELIVERY MODE 03/29/2022 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): idocketing@duanemorris.com mbatmani@duanemorris.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte RAYMOND NG ____________ Appeal 2021-002434 Application 15/745,680 Technology Center 3600 ____________ Before MURRIEL E. CRAWFORD, MICHAEL C. ASTORINO, and AMEE A. SHAH, Administrative Patent Judges. CRAWFORD, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Appellant1 seeks our review under 35 U.S.C. § 134 of the Examiner’s final rejection of claims 1-22. We have jurisdiction under 35 U.S.C. § 6(b). SUMMARY OF DECISION 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 WePay, Inc. (Appeal Br. 3.) Appeal 2021-002434 Application 15/745,680 2 THE INVENTION Appellant claims systems and methods to support distributed electronic payment processing based on a hierarchical payment graph. (Spec. ¶ 13, Title.) Claim 1 is representative of the subject matter on appeal. 1. A system to support distributed electronic payment processing, comprising: a main payment processing engine running on a host, which in operation, is configured to: accept a request to process an electronic payment from a client device at runtime; manage and coordinate processing of the electronic payment through a plurality of stages in a payment processing lifecycle by traversing a main payment graph of a hierarchical payment graph, wherein the hierarchical payment graph comprises one or more payment sub-graphs in addition to the main payment graph; provide one of the plurality of stages in the payment processing lifecycle to a corresponding one of a plurality of electronic payment processing engines; and report a processing result of the request for electronic payment back to the client device; and the plurality of electronic payment engines each running on one or more other hosts, which in operation, are each configured to: process the electronic payment at a stage of the payment processing lifecycle based on types of states, edges, and attributes of the edges in a payment sub-graph of the hierarchical payment graph, wherein the payment sub-graph is specific to one of the plurality of stages in the payment processing lifecycle; and provide a notification of a processing result of the stage of the payment processing lifecycle to the main payment processing engine. Appeal 2021-002434 Application 15/745,680 3 THE REJECTIONS Claims 1-22 are rejected under 35 U.S.C. § 101 as directed to a judicial exception without significantly more. Claims 1-22 are rejected under 35 U.S.C. § 102(a)(2) as being anticipated by Gomadam (US 2016/0072676 A1; pub. Mar. 10 2016). ANALYSIS 35 U.S.C. § 101 REJECTION We will sustain the rejection of claims 1-22 under 35 U.S.C. § 101. The Supreme Court set forth a framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts. First, . . . determine whether the claims at issue are directed to one of those patent-ineligible concepts. . . . If so, . . . then ask, “[w]hat else is there in the claims before us?” . . . To answer that question, . . . consider the elements of each claim both individually and “as an ordered combination” to determine whether the additional elements “transform the nature of the claim” into a patent- eligible application. . . . [The Court] described step two of this analysis as 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 Corp. v. CLS Bank Int’l, 573 U.S. 208, 217-218 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72-73 (2012)) (citations omitted). To perform this test, we must first determine whether the claims at issue are directed to a patent-ineligible concept. The Federal Circuit has explained that “the ‘directed to’ inquiry applies a stage-one filter to claims, considered in light of the Appeal 2021-002434 Application 15/745,680 4 [S]pecification, based on whether ‘their character as a whole is directed to excluded subject matter.’” See 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. In so doing we apply a “directed to” two prong test: 1) evaluate whether the claim recites a judicial exception, and 2) if the claim recites a judicial exception, evaluate whether the judicial exception is integrated into a practical application. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50-57 (Jan. 7, 2019) (“Guidance”). The Examiner determines that the claims are directed steps for processing an electronic payment transaction using a hierarchical payment graph (i.e. workflow, model representation, instructions) to represent the lifecycle using concepts relating to certain methods of organizing human activity, more specifically commercial and legal interactions (including agreements in the form of contracts; legal obligation; advertising, marketing or sales activities or behaviors; business relations). The Examiner also determines that the steps of the claim could be performed in the human mind. (Final Act. 5.) The Examiner finds that the claims include elements in addition to the judicial exceptions recited of a “main payment processing engine,” a “client device,” a “hierarchical payment graph,” and a “payment sub-graph” and that these recitations do not impose a meaningful limit on practicing the judicial exceptions. (Id. at 6.) The Examiner finds that the additional elements amount to no more than generic computing components that do not contribute anything significant or meaningful to the claim and therefore do not Appeal 2021-002434 Application 15/745,680 5 integrate the judicial exceptions into a practical application or amount to significantly more than the judicial exception recited. (Id. at 7.) Consistent with these recitations, the Specification discloses that a new approach is proposed that contemplates systems and methods to support distributed electronic payment processing based on a hierarchical payment graph. Upon receiving an electronic payment from a client device, each distributed payment engine of the distributed processing payment system is configured to handle one stage of the electronic payment processing lifecycle by traversing states and edges in a portion of the hierarchical payment graph assigned to the distributed payment engine. (Spec. ¶ 4.) We thus agree with the Examiner’s determination that claim 1 recites steps for processing an electronic payment transaction using a hierarchical payment graph. As such, claim 1 recites a method for commercial interactions and thus recites a method of organizing human behavior. Also, we agree with the Examiner that the steps of “accept[ing] a request to process . . . payment,” “manag[ing] and coordinat[ing] processing of the electronic payment through a plurality of stages in a payment processing lifecycle by traversing a main payment graph of a hierarchical payment graph,” “report[ing] a processing result of the request,” “process[ing] the . . . payment,” “provid[ing] a notification of a processing result,” constitute “analyzing information by steps people go through in their minds, or by mathematical algorithms, without more, as essentially mental processes within the abstract-idea category.” Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016); see also buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (claims directed to certain arrangements involving contractual relations are directed to abstract ideas). Thus, Appeal 2021-002434 Application 15/745,680 6 we find that claim 1 recites the judicial exceptions of a method of organizing human activity and in the alternative, a mental process. Turning to the second prong of the “directed to” test, claim 1 requires a “main payment processing engine,” a “client device,” and “a plurality of electronic payment processing engines.” These recitations do not impose “a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.” Guidance, 84 Fed. Reg. at 53. We find no indication in the Specification, nor does Appellant direct us to any indication, that the operations recited in independent claim 1 invoke any inventive programming, require any specialized computer hardware or other inventive computer components, i.e., a particular machine, or that the claimed invention is implemented using other than generic computer components to perform generic computer functions. See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (“[A]fter Alice, there can remain no doubt: recitation of generic computer limitations does not make an otherwise ineligible claim patent- eligible.”). We also find no indication in the Specification that the claimed invention affects a transformation or reduction of a particular article to a different state or thing. Nor do we find anything of record, short of attorney argument, that attributes any improvement in computer technology and/or functionality to the claimed invention or that otherwise indicates that the claimed invention integrates the abstract idea into a “practical application,” as that phrase is used in the revised Guidance. See Guidance, 84 Fed. Reg. at 55. In this regard, the recitations do not affect an improvement in the functioning of the client device or the payment processing engine or other technology, does not recite a particular machine or manufacture that is integral to Appeal 2021-002434 Application 15/745,680 7 the claims, and does not transform or reduce a particular article to a different state or thing. Id. Thus, claim 1 recites judicial exceptions that are not integrated into a practical application and thus claim 1 is directed to “abstract ideas.” Turning to the second step of the Alice analysis, because we find that claim 1 is directed to judicial exceptions, the claim must include an “inventive concept” in order to be patent-eligible, i.e., there must be an element or combination of elements that is sufficient to ensure that the claim in practice amounts to significantly more than the abstract idea itself. See Alice, 573 U.S. at 217-18 (alteration in original) (quoting Mayo, 566 U.S. at 72-73). The introduction of a computer elements such as the payment processing engines and the client device into the claim does not alter the analysis at Alice step two. [T]he mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent- eligible invention. Stating an abstract idea “while adding the words ‘apply it’” is not enough for patent eligibility. Nor is limiting the use of an abstract idea “‘to a particular technological environment.’” Stating an abstract idea while adding the words “apply it with a computer” simply combines those two steps, with the same deficient result. Thus, if a patent’s recitation of a computer amounts to a mere instruction to “implemen[t]” an abstract idea “on . . . a computer,” that addition cannot impart patent eligibility. This conclusion accords with the preemption concern that undergirds our § 101 jurisprudence. Given the ubiquity of computers, wholly generic computer implementation is not generally the sort of “additional featur[e]” that provides any “practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.” Alice, 573 U.S. at 223 (alterations in original) (citations omitted). Appeal 2021-002434 Application 15/745,680 8 Instead, “the relevant question is whether claim 1 here does more than simply instruct the practitioner to implement the abstract ideas . . . on a generic computer.” Id. at 225. It does not. Taking the claim elements separately, the functions performed by the computer elements at each step of the process are purely conventional. Using a computer to retrieve, select, and apply decision criteria to data and modify the data as a result amounts to electronic data query and retrieval-one of the most basic functions of a computer. All of these computer functions are well-understood, routine, conventional activities previously known to the trading industry. See Elec. Power Grp., 830 F.3d at 1354; see also In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011) (“Absent a possible narrower construction of the terms ‘processing,’ ‘receiving,’ and ‘storing,’ . . . those functions can be achieved by any general purpose computer without special programming”). In short, each step does no more than require a generic computer to perform generic computer functions. As to the data operated upon, “even if a process of collecting and analyzing information is ‘limited to particular content’ or a particular ‘source,’ that limitation does not make the collection and analysis other than abstract.” SAP Am. Inc. v. InvestPic, LLC, 890 F.3d 1016, 1022 (Fed. Cir. 2018). Considered as an ordered combination, the computer elements of Appellant’s claims add nothing that is not already present when the steps are considered separately. The sequence of data reception-analysis-access/display is equally generic and conventional or otherwise held to be abstract. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014) (sequence of receiving, selecting, offering for exchange, display, allowing access, and receiving payment recited an abstraction), Inventor Holdings, LLC v. Bed Bath & Beyond, Appeal 2021-002434 Application 15/745,680 9 Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017) (holding that sequence of data retrieval, analysis, modification, generation, display, and transmission was abstract), Two- Way Media Ltd. v. Comcast Cable Commc’ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017) (holding sequence of processing, routing, controlling, and monitoring was abstract). The ordering of the steps is, therefore, ordinary and conventional. Claim 1 does not, for example, purport to improve the functioning of the main payment processing engine, the client devices or the plurality of electronic payment processing engines. As we stated above, claim 1 does not affect an improvement in any other technology or technical field. The Specification spells out different generic equipment and parameters that might be applied using this concept and the particular steps such conventional processing would entail based on the concept of information access under different scenarios. (See, e.g., Spec. ¶¶ 17-18, 37-38.) Thus, claim 1 amounts to nothing significantly more than instructions to apply the abstract idea of information access using some unspecified, generic computer. Under our precedents, that is not enough to transform an abstract idea into a patent-eligible invention. See Alice, 573 U.S. at 226. We have reviewed all the arguments (Appeal Br. 11-29; Reply Br. 3-12) Appellant has submitted concerning the patent eligibility of the claims before us that stand rejected under 35 U.S.C. § 101. We find that our analysis above substantially covers the substance of all the arguments, which have been made. But, for purposes of emphasis, we will address various arguments in order to make individual rebuttals of same. We are not persuaded of error on the part of the Examiner by Appellant’s argument that the Examiner failed to apply Prong One or Prong Two of Step 2A in Appeal 2021-002434 Application 15/745,680 10 the eligibility analysis. This is not true. The Examiner made the proper analysis for Prong One and Prong Two on pages 4 to 7 of the Final Action. Appellant argues that the claims are similar to the claims found patent eligible in Enfish. We note that there is a fundamental difference between computer functionality improvements, on the one hand, and uses of existing computers as tools to perform a particular task, on the other. Indeed, the Federal Circuit applied this distinction in Enfish in rejecting a § 101 challenge because the claims at issue focused on a specific type of data structure, i.e., a self-referential table for a computer database, designed to improve the way a computer carries out its basic functions of storing and retrieving data, and not merely on asserted advances in uses to which existing computer capabilities could be put. Enfish, 822 F.3d at 1335-36. We find no parallel here between claim 1 before us and the claims in Enfish nor any comparable aspect in claim 1 before us that represents “an improvement to computer functionality,” i.e., an improvement in the way a computer carries out its basic functions. Id. The alleged advantages that Appellant touts do not concern an improvement to computer capabilities, but instead relate to an alleged improvement in processing payments. Specifically, the argued advantages created by (1) dividing a request to process an electronic payment into multiple graphs and sub-graphs that are processed by a main processing engine and sub-engines and (2) only allowing well-defined typed transitions between payment states at each stage during the processing both relate to an improvement in the process but not improvements to the processing engines or the client devices. (Appeal Br. 15-16.) Appellant argues that the instant claims do not monopolize the abstract idea. (Id. at 17.). While preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility.” Appeal 2021-002434 Application 15/745,680 11 Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015); see also OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362-63 (Fed. Cir. 2015), cert, denied, 136 S. Ct. 701, 193 (2015) (“[T]hat the claims do not preempt all price optimization or may be limited to price optimization in the e-commerce setting do not make them any less abstract.”). And, “[w]here a patent’s claims are deemed only to disclose patent ineligible subject matter under the Mayo framework, as they are in this case, preemption concerns are fully addressed and made moot.” Ariosa, 788 F.3d at 1379. Appellant argues that the claims are distinguishable from the claims that recite commercial or legal interactions because the present claims do not recite agreements in the form of contracts, legal obligations, marketing or sales activity or behavior or business relations. Appellant further argues that the claims do not relate to any commercial or legal activity. (Appeal Br. 17; Reply Br. 8). We do not understand this argument because the claims relate to making payments and the Specification specifically mentions on page 1 that the payments may be credit card payments; paying by credit card is certainly a fundamental economic practice and relates to a legal obligation. Even if the payments are not made between a debtor and a creditor, such payments are made between one human and another human and the act of making a payment is a fundamental practice that has been practiced for years. We are not persuaded of error on the part of the Examiner by Appellant’s argument that the claims are similar to the claims in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014), where the Court noted that a claim may amount to more than any abstract idea recited in the claims when it addresses a business challenge, such as “retaining website visitors,” where that challenge is particular to a specific technological environment, such as the Internet. Appeal 2021-002434 Application 15/745,680 12 In DDR, the court stated that “the . . . patent’s claims address the problem of retaining website visitors that, if adhering to the routine, conventional functioning of Internet hyperlink protocol, would be instantly transported away from a host's website after ‘clicking’ on an advertisement and activating a hyperlink.” DDR Holdings, 773 F.3d at 1257. This was done in the claim by serving a composite page with content based on the link that was activated to serve the page. In contrast, claim 1 performs a process for making payments and does not address a technical problem. We find untimely Appellant’s argument in the Reply Brief that the additional elements recited in the claims are not generic computer elements. (Reply Br. 5.) We note that these new arguments were raised by Appellant for the first time in the Reply Brief, and they are not in response to a new issue brought up by the Examiner in the Answer. 37 C.F.R. §41.41. We therefore consider Appellant’s argument raised in the Reply Brief to be waived. In view of the foregoing, we will sustain the Examiner’s rejection of claim 1 under 35 U.S.C. § 101. We will also sustain the rejection as it is directed to the remaining claims rejected under 35 U.S.C. § 101 because Appellant does not argue the separate eligibility of these claims. 35 U.S.C. § 102(a)(2) REJECTION We will not sustain this rejection because we agree with Appellant that the Examiner has not shown that Gomadam discloses a main payment processing engine that is configured to “accept a request to process an electronic payment from a client device at runtime.” (Claim 1 (emphasis added).) The Examiner relies on paragraphs 164, 209, 211, and 218-220 of Gomadam for disclosing this subject matter. We find that the only paragraph relied on by the Examiner that Appeal 2021-002434 Application 15/745,680 13 discloses anything about actions taking place at runtime is paragraph 164. This paragraph discloses that the policy logic may perform a policy verification at runtime but does not disclose accepting a request to process an electronic payment from a client device at runtime. Therefore, we will not sustain this rejection as it is directed to claim 1 and claims 2-12 dependent therefrom. We will also not sustain this rejection as it is directed to the remaining claims because each of these claims requires acceptance of a request to process an electronic payment from a client device at runtime. CONCLUSIONS OF LAW We conclude the Examiner did not err in rejecting claims 1-22 under 35 U.S.C. § 101 and the Examiner did err in rejecting claims 1-22 under 35 U.S.C. § 102(a)(2). DECISION SUMMARY In summary: Claim(s) Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 1-22 101 Eligibility 1-22 1-22 102(a)(2) Gomadam 1-22 Overall Outcome 1-22 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) (2020). AFFIRMED