William Madden et al.

Patent Trials and Appeals Board

Jul 30, 2019

13544564 - (D) (P.T.A.B. Jul. 30, 2019)

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.
13/544,564 07/09/2012 William Madden 90945-842244 2897
20350 7590 07/30/2019
KILPATRICK TOWNSEND & STOCKTON LLP
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
EXAMINER
OBEID, MAMON A
ART UNIT PAPER NUMBER
3685
NOTIFICATION DATE DELIVERY MODE
07/30/2019 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):
KTSDocketing2@kilpatrick.foundationip.com
ipefiling@kilpatricktownsend.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte WILLIAM MADDEN,
CHRIS COCHRAN, and PATTY MCKERNAN
_______

Appeal 2017–009779
Application 13/544,5641
Technology Center 3600
____________

Before MURRIEL E. CRAWFORD, HUBERT C. LORIN, and
BIBHU R. MOHANTY, Administrative Patent Judges.

LORIN, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
William Madden, et al. (Appellants) seek our review under 35 U.S.C.
§ 134(a) of the Final Rejection of claims 18 and 21–31, which constitute all
the claims pending in this application. 1–17, 19, and 20 have been
cancelled. We have jurisdiction under 35 U.S.C. § 6(b).

SUMMARY OF DECISION
We AFFIRM.

1 The Appellants identify Western Union Company as the real party in
interest. Br. 2.
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THE INVENTION
Claim 18, reproduced below, is illustrative of the subject matter on
appeal.
18. A method for preventing fraud during redemption of funds
associated with stored value cards, the method comprising:
receiving, by an authentication computer system, a control
number from a consumer as read from a stored value card;
generating, by the authentication computer system, a hash
value from the control number using a cryptographic function,
wherein the hash value comprises a particular number of
characters;
producing, by the authentication computer system, a
representation of an authentication grid using the hash value, the
authentication grid comprising a plurality of non–alpha-numeric
symbols corresponding to the particular number of characters
and identifiable by non-alpha-numeric row and column
identifiers, the non-alpha-numeric symbols repeating a number
of times through the authentication grid equal to a quotient of (a)
a product of a total number of rows of the authentication grid
and a total number of columns of the authentication grid and (b)
the particular number of characters;
identifying randomly, by the authentication computer
system, a specific non–alpha-numeric row identifier and a
specific non-alpha-numeric column identifier;
sending, from the authentication computer system, to the
consumer a request to provide the symbol associated with the
specific non-alpha-numeric row identifier and the specific non-
alpha-numeric column identifier;
receiving, by the authentication computer system, a
response from the consumer that includes a non-alpha-numeric
response symbol;
comparing, by the authentication computer system, the
non-alpha-numeric response symbol with the non-alpha-numeric
symbol in the authentication grid associated with the specific
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non-alpha-numeric row identifier and the specific non-alpha-
numeric column identifier; and
in the event the non-alpha-numeric response symbol and
the non-alpha-numeric symbol in the authentication grid
associated with the specific non-alpha-numeric row identifier
and the specific non-alpha-numeric column identifier match,
authenticating, by the authentication computer system, the
consumer as a holder of the stored value card.

THE REJECTION
The following rejection is before us for review:
Claims 18 and 21–31 are rejected under 35 U.S.C. § 101 for claiming
patent-ineligible subject matter.

ISSUE
Did the Examiner err in rejecting claims 18 and 21–31 under 35
U.S.C. §101 for claiming patent-ineligible subject matter?

ANALYSIS
The rejection of claims 18 and 21–31 under 35 U.S.C. §101 for claiming
patent-ineligible subject matter.
The Appellants argued these claims as a group. See App. Br. 5–6.
We select claim 18 (supra) as the representative claim for this group, and the
remaining claims 21–31 stand or fall with claim 18. 37 C.F.R.
§ 41.37(c)(1)(iv).

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Preliminary comment
In their brief, the Appellants refer to prior USPTO guidance. See Br.
5 (“2014 Interim Guidance on Patent Subject Matter Eligibility [2014
Interim Guidance on Patent Subject Matter Eligibility, 79 Fed. Reg. 74619–
633 (Dec. 16, 2014)]”). Said guidance has been superseded by the 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7,
2019) (hereinafter “2019 Revised 101 Guidance”). 2019 Revised 101
Guidance 51 (“Eligibility–related guidance issued prior to the Ninth Edition,
R–08.2017, of the MPEP (published Jan. 2018) should not be relied upon.”).
Accordingly, our analysis will not address the sufficiency of the
Examiner’s rejection against the cited prior guidance. Rather, our analysis
will comport with the 2019 Revised 101 Guidance.

Introduction
35 U.S.C. § 101 provides that “[w]hoever invents or discovers any
new and useful process, machine, manufacture, or composition of matter, or
any new and useful improvement thereof, may obtain a patent therefor.”
In that regard, claim 18 covers a “process” and is, thus, statutory
subject matter for which a patent may be obtained.2 This is not in dispute.
However, the § 101 provision “‘contains an important implicit
exception: Laws of nature, natural phenomena, and abstract ideas are not

2 This corresponds to Step 1 of the 2019 Revised 101 Guidance which
requires determining whether a “claim is to a statutory category.” 2019
Revised 101 Guidance 53; see also id. at 53–54 (“[C]onsider[] whether the
claimed subject matter falls within the four statutory categories of patentable
subject matter identified by 35 U.S.C. [§] 101 . . . .”).
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patentable.’” 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)).
In that regard, notwithstanding claim 18 covers statutory subject
matter, the Examiner has raised a question of patent–eligibility on the
ground that claim 18 is directed to an abstract idea. Eligibility is a question
of law based on underlying facts. SAP Am. v. Investpic, LLC, 890 F.3d
1016, 1020 (Fed. Cir. 2018).
Alice identifies a two-step framework for determining whether
claimed subject matter is directed to an abstract idea. Alice, 573 U.S. at 217.

Alice step one – the “directed to” inquiry
According to Alice step one, “[w]e must first determine whether the
claims at issue are directed to a patent-ineligible concept.” Id. at 218
(emphasis added).
The Examiner determined that claim 18 is “directed to the series of
steps for authenticating a consumer using non-alphanumeric symbols, which
is an idea of itself and thus, an abstract idea.” Final Act. 3. In the Final
Rejection, the Examiner identified the “limitations [of claim 18] that set
forth the abstract idea” (id.). See id. at 3–5. They are italicized above where
we reproduce claim 18. According to the Examiner, “[t]hese steps can be
performed mentally (or by a human using a pen and paper) and are similar to
the concepts identified as abstract ideas by the courts.” Id. at 15, citing
Cyberfone Systems, LLC v. CNN Interactive Group, Inc., 558 Fed.Appx. 988
(Fed. Cir. 2014), SmartGene, Inc. v. Advanced Biological Laboratories, SA,
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555 Fed.Appx. 950 (Fed. Cir. 2014), Classen Immunotherapies, Inc. v.
Biogen IDEC, 659 F.3d 1057 (Fed. Cir. 2011), and, CyberSource Corp. v.
Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011).
The Appellants contend that
(1) Each of the claims improves other technical fields beyond the
alleged abstract idea. For example, at least financial instrument
security technology is also improved by embodiments of the
claim, as they allow for a new particular method of
authenticating a consumer using the systems and methods
recited. Other technical fields may also be improved by
practicing embodiments of the claimed invention.
Br. 5.
Accordingly, there is a dispute over what claim 18 is directed to. Is it
directed to a “series of steps for authenticating a consumer using non-
alphanumeric symbols” (Final Act. 3) or an improvement to a technical
field, “[f]or example, at least financial instrument security technology” (Br.
5)?
Claim Construction3

3 “[T]he important inquiry for a § 101 analysis is to look to the claim.”
Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336,
1345 (Fed. Cir. 2013). “In Bancorp Servs., L.L.C. v. Sun Life Assurance Co.
of Can., 687 F.3d 1266, 1273 (Fed. Cir. 2012), the court observed that
‘claim construction is not an inviolable prerequisite to a validity
determination under § 101.’ However, the threshold of § 101 must be
crossed; an event often dependent on the scope and meaning of the claims.”
Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1347–48
(Fed. Cir. 2015).
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We consider the claim as a whole4 giving it the broadest reasonable
construction5 as one of ordinary skill in the art would have interpreted it in
light of the Specification6 at the time of filing.
Claim 18 sets forth a method whose objective is to “prevent[ ] fraud
during redemption of funds associated with stored value cards.” The method
for accomplishing this objective calls upon “an authentication computer
system” to perform eight steps, the “authentication computer system” being
a combination of generic devices7 (e.g., “processing units,” “mouse,”
“printer,” etc.). See e.g., Spec., paras. 62–66. The steps are:

4 “In determining the eligibility of respondents’ claimed process for patent
protection under § 101, their claims must be considered as a whole.”
Diamond v. Diehr, 450 U.S. 175, 188 (1981).

5 2019 Revised 101 Guidance 53 n.14 (If a claim, “under its broadest
reasonable interpretation . . . ” (emphasis added).).

6 “First, it is always important to look at the actual language of the claims. . .
. Second, in considering the roles played by individual limitations, it is
important to read the claims ‘in light of the specification.’” Smart Sys.
Innovations, LLC v. Chicago Transit Authority, 873 F.3d 1364, 1378 (Fed.
Cir. 2017) (J. Linn, dissenting in part and concurring in part), citing Enfish,
LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016), among
others.

7 Cf. Maxon, LLC v. Funai Corp., 726 Fed. App’x 797, 799–800 (Fed. Cir.
2018) (nonprecedential) (“The district court correctly found that the claims
recite only generic computing processes using functional language.
Analyzing the physical components of the claims, the district court noted
that the specifications do not limit the breadth of elements such as
‘computer-readable medium,’ ‘logic,’ ‘processor,’ or ‘transceiver.’. . . We
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1. “receiving” Information A “from a consumer as read from a stored
value card;”
2. “generating” Information B;
3. “producing” Information C;
4. “identifying randomly” Information D;
5. “sending … to the consumer” Information E;
6. “receiving” Information F;
7. “comparing” Information F with Information G; and,
8. “authenticating the consumer as a holder of the stored value card” “in
the event [Information F] and [Information G] match.”
Where:
Information A is “a control number;”
Information B is “a hash value from the control number using a
cryptographic function, wherein the hash value comprises a particular
number of characters;”
Information C is “a representation of an authentication grid using
[Information B], the authentication grid comprising a plurality of non–
alpha-numeric symbols corresponding to the particular number of
characters and identifiable by non-alpha-numeric row and column
identifiers, the non-alpha-numeric symbols repeating a number of
times through the authentication grid equal to a quotient of (a) a
product of a total number of rows of the authentication grid and a total
number of columns of the authentication grid and (b) the particular
number of characters;”
Information D is “a specific non–alpha-numeric row identifier and a
specific non-alpha-numeric column identifier;”

agree that the representative claim does not recite anything beyond the
application of routine and conventional computer components.”).

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Information E is “a request to provide the symbol associated with the
specific non-alpha-numeric row identifier and the specific non-alpha-
numeric column identifier;”
Information F is “a response from the consumer that includes a non-
alpha-numeric response symbol;” and,
Information G is “the non-alpha-numeric symbol in the authentication
grid associated with [Information D]”.
The claim provides no structural details8 that would distinguish the
“authentication computer system” from generic computer systems that were
well known at the time the application was filed.
Functionally, claim 18 calls on the “authentication computer system”
to perform, variously, “receiving,” “generating,” “producing,” randomly
“identifying,” “sending,” “comparing,” various types of information and, if
certain information matches, “authenticating.” These are common functions
that generic computers are known to perform. The difference between the
claimed “authentication computer system” and other well-known computer
systems in performing said common functions is that the claimed
“authentication computer system” performs said functions on certain types
of information. But that difference alone is not patentably consequential.
This is so because “[c]laim limitations directed to the content of information
and lacking a requisite functional relationship are not entitled to patentable
weight because such information is not patent eligible subject matter under

8 Cf. Move, Inc. v. Real Estate Alliance Ltd., 721 Fed. App’x 950 (Fed. Cir.
2018) (Nonprecedential) (“Claim 1 is aspirational in nature and devoid of
any implementation details or technical description that would permit us to
conclude that the claim as a whole is directed to something other than the
abstract idea identified by the district court.”).
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35 U.S.C. § 101.” Praxair Distrib., Inc. v. Mallinckrodt Hosp. Prods. IP
Ltd., 890 F.3d 1024, 1032 (Fed. Cir. 2018).
Based on the record before us, the claim steps of “receiving,”
“generating,” “producing,” randomly “identifying,” “sending,” “comparing,”
various types of information and, if certain information matches,
“authenticating” does not ask the “authentication computer system” to go
beyond a generic computer system’s common information–processing
functions. While computer–based instructions can be patentably significant
(see Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) and
Ancora Technologies, Inc. v. HTC America, Inc., 908 F.3d 1343 (Fed. Cir.
2018)), here the instant record does not sufficiently support the view that
said steps have any non–conventional effect on generic computer system.
To the contrary, the record supports viewing the phrase “authentication
computer system” as amounting to a mere instruction to implement the
recited authentication scheme on a generic computer. Cf. Alice, 573 U.S. at
225–26 (“Instead, the claims at issue amount to ‘nothing significantly more’
than an instruction to apply the abstract idea of intermediated settlement
using some unspecified, generic computer.”).
Looking at the steps themselves, their combination describes an
authentication scheme; that is, by “receiving,” “generating,” “producing,”
randomly “identifying,” “sending,” “comparing,” and “match[ing]” various
types of information as claimed a consumer can be “authenticat[ed]” as a
holder of a stored value card.
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Accordingly, we reasonably broadly construe claim 1 as being
directed to an authentication scheme implemented on a generic computer
system.

The Abstract Idea9
Above, where we reproduce claim 18, we identify in italics the
limitations we believe recite an abstract idea.10 This is consistent with the
Examiner’s view. See Final Act. at 3–5. Based on our claim construction
analysis (above), we determine that the identified limitations describe a type
of authentication scheme. Authentication is a fundamental economic and
business practice (e.g., to prevent fraud) and as such is a method of

9 This corresponds to Step 2A of the 2019 Revised 101 Guidance. Step 2A
determines “whether a claim is ‘directed to’ a judicial exception,” such as an
abstract idea. 2019 Revised 101 Guidance 53. Step 2A is two prong
inquiry.

10 This corresponds to Prong One (a) of Step 2A of the 2019 Revised 101
Guidance. “To determine whether a claim recites an abstract idea in Prong
One, examiners are now to: (a) Identify the specific limitation(s) in the
claim under examination (individually or in combination) that the Examiner
believes recites an abstract idea . . . .” 2019 Revised 101 Guidance 54.

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organizing human activity. Accordingly, it is an abstract idea.11 Cf. Easyweb
Innovations, LLC v. Twitter, Inc., 2016 WL 1253674, at *28 (E.D.N.Y.,
2016), aff’d, 689 Fed.Appx. 969 (Fed. Cir. 2017) (“the Court concludes that
EasyWeb's patents are directed to an abstract idea of authentication”). The
remaining (i.e., not italicized) limitations do no more than call upon a
generic computer system (i.e., “an authentication computer system”) to be
used as a tool to perform this abstract idea.

11 This corresponds to Prong One (“Evaluate Whether the Claim Recites a
Judicial Exception”) (b) of Step 2A of the 2019 Revised 101 Guidance. “To
determine whether a claim recites an abstract idea in Prong One, examiners
are now to: . . . (b) determine whether the identified limitation(s) falls within
the subject matter groupings of abstract ideas enumerated in Section I of the
[2019 Revised 101 Guidance].” 2019 Revised 101 Guidance 54. This case
implicates subject matter grouping “(b)”: (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 instructions).
Id. at 52.

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Improvement to Technology/Technical Field12 (Appellants’ Argument)
The Examiner’s characterization of what the claim is directed to (“the
series of steps for authenticating a consumer using non-alphanumeric
symbols,” Final Act. 3) is similar to our own, albeit our characterization is
described at a somewhat higher level of abstraction. Cf. Apple, Inc. v.
Ameranth, Inc., 842 F.3d 1229, 1240–41 (Fed. Cir. 2016) (“An abstract idea
can generally be described at different levels of abstraction. As the Board
has done, the claimed abstract idea could be described as generating menus
on a computer, or generating a second menu from a first menu and sending
the second menu to another location. It could be described in other ways,
including, as indicated in the specification, taking orders from restaurant
customers on a computer.”)
The Appellants dispute the Examiner’s characterization. Presumably,
the Appellants would equally dispute our characterization.
We have reviewed the record and are unpersuaded as to error in our or
the Examiner’s characterization of what claim 18 is directed to.

12 This corresponds to Prong Two (“If the Claim Recites a Judicial
Exception, Evaluate Whether the Judicial Exception Is Integrated Into a
Practical Application”) of Step 2A of the 2019 Revised 101 Guidance. 2019
Revised 101 Guidance 54. “A claim that integrates a judicial exception into
a practical application will apply, rely on, or use the judicial exception in a
manner that imposes a meaningful limit on the judicial exception, such that
the claim is more than a drafting effort designed to monopolize the judicial
exception.” Id. One consideration, implicated here, that is “indicative that
an additional element (or combination of elements)[] may have integrated
the exception into a practical application” (id. at 55) is if “[a]n additional
element reflects an improvement in the functioning of a computer, or an
improvement to other technology or technical field” (id.).

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The Appellants contend that
(1) Each of the claims improves other technical fields beyond the
alleged abstract idea. For example, at least financial instrument
security technology is also improved by embodiments of the
claim, as they allow for a new particular method of
authenticating a consumer using the systems and methods
recited. Other technical fields may also be improved by
practicing embodiments of the claimed invention.
Br. 5.
We have reviewed the record but have been unable to find any
discussion of an improvement in a technical field or technology. The
Specification speaks of “[u]sing a money-transfer system [whereby] money
can be transferred between two people in two different locations” and that
“agents [of a money transfer company] may seek to defraud the money
transfer company or its customers. And these agents may also be easy
targets for fraudsters.” Para. 1. The Specification then discloses
“[e]mbodiments of the invention [to] provide a fraud deterrent for retail
money transfers or stored value products.” Para. 3. Thereafter the
Specification discloses an authentication scheme. But there is no discussion
that said scheme is an improvement in “[f]or example, at least financial
instrument security technology” (Br. 5). How the disclosed scheme is a
technological improvement is nowhere explained.
Specific asserted improvements over prior technology, when claimed,
can render claimed subject matter not directed to an abstract idea. Cf.
McRO, 837 F.3d at 1316 (“When looked at as a whole, claim 1 is directed to
a patentable, technological improvement over the existing, manual 3–D
animation techniques.”). See also MPEP § 2106.05(a) (“Improvements to
the Functioning of a Computer or To Any Other Technology or Technical
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Field.”) and Alice at 208. (“The method claims do not, for example, purport
to improve the functioning of the computer itself. See ibid. (‘There is no
specific or limiting recitation of . . . improved computer technology . . .’);
Brief for United States as Amicus Curiae 28–30. Nor do they effect an
improvement in any other technology or technical field. See, e.g., Diehr,
450 U.S., at 177–78, 101 S.Ct. 1048.”). However, there is insufficient
evidence in the record before us that the claimed subject matter reflects an
asserted improvement over prior technology.
“The ‘abstract idea’ step of the inquiry calls upon us to look at the
‘focus of the claimed advance over the prior art’ to determine if the claim’s
‘character as a whole’ is directed to excluded subject matter.’” Affinity Labs
of Texas v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) (quoting
Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir.
2016)); see also Enfish, 822 F.3d at 1335, quoted in Apple, 842 F.3d at
1241; see also Ancora, 908 F.3d at 1347:
We examine the patent’s “‘claimed advance’ to determine
whether the claims are directed to an abstract idea.” Finjan, Inc.
v. Blue Coat Sys., Inc., 879 F.3d 1299, 1303 (Fed. Cir. 2018).”)
“In cases involving software innovations, this inquiry often turns
on whether the claims focus on ‘the specific asserted
improvement in computer capabilities . . . or, instead, on a
process that qualifies as an “abstract idea” for which computers
are invoked merely as a tool.’’’ Id. (quoting Enfish, 822 F.3d at
1335–36); see BSG Tech LLC v. Buyseasons, Inc., 899 F.3d
1281, 1285–86 (Fed. Cir. 2018). Computers are improved not
only through changes in hardware; “[s]oftware can make non-
abstract improvements to computer technology . . . .” Enfish, 822
F.3d at 1335. See Finjan, 879 F.3d at 1304. We have several
times held claims to pass muster under Alice step one when
sufficiently focused on such improvements.
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As we pointed out above in our Claim Construction analysis, the heart
of the invention lies in an authentication scheme, not the “authentication
computer system” which, as the Specification shows, is merely generic. It is
the authentication scheme which appears to be the advance. Cf. Intellectual
Ventures I LLC v. Erie Indemnity Co., 850 F.3d 1315, 1328 (Fed. Cir. 2017)
(“[T]he heart of the claimed invention lies in creating and using an index to
search for and retrieve data . . . an abstract concept.”).
We have carefully reviewed the Specification but can find no
disclosure of an improvement over prior technology. Rather than being
directed to any specific asserted improvement over prior technology, the
record supports the view that the claimed subject matter is directed to an
authentication scheme.13
We have considered all the Appellants’ arguments challenging the
Examiner’s determination under step one of the Alice framework and find
them unpersuasive. For the foregoing reasons, the record supports the
Examiner’s determination that claim 1 is directed to an abstract idea.

13 See the 2019 Revised 101 Guidance 55 (“The courts have also identified
examples in which a judicial exception has not been integrated into a
practical application: An additional element merely recites the words ‘apply
it’ (or an equivalent) with the judicial exception, or merely includes
instructions to implement an abstract idea on a computer, or merely uses a
computer as a tool to perform an abstract idea.”).
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Alice step two – Does the Claim Provide an Inventive Concept?14
Step two is “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 221 (quoting Mayo Collaborative Servs.
v. Prometheus Labs., Inc., 566 U.S. 66, 73 (2012)).
In that regard, the Examiner determined the following:
The authentication 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
receiving, generating, producing, identifying, sending &
comparing information/data, and authenticating the consumer.
Generic computers performing generic computer functions,
alone, do not amount to significantly more than the abstract idea.
Therefore, the claims, when considered separately, do not
include additional elements that are sufficient to amount to
significantly more than the judicial exception because the claims
require no more than a generic computer to perform generic
computer functions that are well-understood, routine and
conventional activities previously known to the industry. There
is no improvement to the functioning of the computer nor is there
an improvement to another technology or technical field.
Even 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
authenticating a consumer using non-alphanumeric symbols. The

14 This corresponds to Step 2B of the 2019 Revised 101 Guidance page 56
(“[I]f a claim has been determined to be directed to a judicial exception
under revised Step 2A, examiners should then evaluate the additional
elements individually and in combination under Step 2B to determine
whether they provide an inventive concept (i.e., whether the additional
elements amount to significantly more than the exception itself).”).
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claims at issue amount to nothing significantly more than an
instruction to apply the abstract idea of authenticating a
consumer using non-alphanumeric symbols using some
unspecified, generic computer. The mere recitation of a computer
is not enough to transform an abstract idea into a patent-eligible
invention.
Final Act. 5–6.
We agree with the Examiner’s analysis and determination.
Above, we noted that specific asserted improvements in technology
can turn claimed subject away from being directed to an abstract under step
one of the Alice framework. This is consistent with the case law. See
Ancora, 908 F.3d at 1347 (“We have several times held claims to pass
muster under Alice step one when sufficiently focused on such
improvements.”). Such an argument, as the Appellants have done here (see
(1) at Br. 5, addressed above), can also challenge a determination under step
two of the Alice framework. See buySAFE, Inc. v. Google, Inc., 765 F.3d
1350, 1354–55 (Fed. Cir. 2014). “[R]ecent Federal Circuit jurisprudence
has indicated that eligible subject matter can often be identified either at the
first or the second step of the Alice/Mayo [framework].” 2019 Revised 101
Guidance 53; see also id. at 53 n.17. Nevertheless, we are unpersuaded that
claim 18 presents an element or combination of elements indicative of a
specific asserted improvement in technology, thereby rendering the claimed
subject matter sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the authenticating scheme itself.
We have reviewed the Specification and, as explained above, we can
find no suggestion of any improvements to a computer system as a result of
performing the recited steps. The Specification conveys that the Appellants’
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invention is focused on an authentication scheme, not on the “authentication
computer system,” individually or in the combination as claimed. Rather
than focusing on the “authentication computer system,” the Specification
focuses on the scheme, the “authentication computer system” being merely a
conduit for performing said scheme. Cf. In re TLI Commc’ns LLC Patent
Litig., 823 F.3d 607, 612 (Fed. Cir. 2016) (“Put differently, the telephone
unit itself is merely a conduit for the abstract idea of classifying an image
and storing the image based on its classification. Indeed, the Specification
notes that it ‘is known’ that ‘cellular telephones may be utilized for image
transmission,’ id. at col. 1 ll. 31–34, and existing telephone systems could
transmit pictures, audio, and motion pictures and also had ‘graphical
annotation capability,’ id. at col. 1 ll. 52–59.”).
The Appellants argue that
(2) Particular, non-generic, machines/computers are
necessary to implement the systems and methods of the claims.
For example, a server capable of implementing the systems and
methods must be able to communicate data at high speeds and at
high volumes, particularly during periods of intense heavy
transaction loadings. Off-the-shelf generic computers are not
capable of performing such functions. These abilities are not
typical of generic computers.
Br. 5–6. However, not only does the Specification indicate otherwise, but
there is nothing in the record that the “authentication computer system” of
the claim necessarily must “communicate data at high speeds and at high
volumes, particularly during periods of intense heavy transaction loadings”
(id.). As a matter of fact, claim 18 is not limited in scope so as to preclude
the use of a computer system that does not require said data speeds and
volumes. The argument is not commensurate in scope with what is claimed.
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“Many of appellant’s arguments fail from the outset because, . . . they are
not based on limitations appearing in the claims . . . .” In re Self, 671 F.2d
1344, 1348 (CCPA 1982). Furthermore, because the record does not reflect
it, it amounts to mere attorney argument. Attorney argument, however,
cannot take the place of record evidence. See In re Geisler, 116 F.3d 1465,
1470 (Fed. Cir. 1997); Johnston v. IVAC Corp., 885 F.2d 1574, 1581 (Fed.
Cir. 1989).
As discussed above, the Specification evidences the conventionality
of the claimed “authentication computer system]”, structurally and
functionally, individually and in combination. (See Spec. ¶¶ 5, 44, and 50.)
Much like the “data storage unit” and “computer, coupled to said storage
unit” in the claims of Alice (US Patent 7,149,720, claim 1), “the claims here
do [not do] more than simply instruct the practitioner to implement the
abstract idea [. . .] on a generic computer.” Alice, 573 U.S. at 225. For the
reasons discussed above, we are unpersuaded that the record supports
interpreting the authentication scheme steps recited in the claim as yielding
any improvement in technology as the Appellants have argued.
We cited the Specification in our discussion as intrinsic evidence that
the claimed element “authentication computer system” is conventional. In
doing so, we have followed “Changes in Examination Procedure Pertaining
to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision
(Berkheimer v. HP Inc.[, 881 F.3d 1360 (Fed. Cir. 2018)],” USPTO
Memorandum, Robert W. Bahr, Deputy Commissioner For Patent
Examination Policy, April 19, 2018 (the “Berkheimer Memo”)). The court
in Berkheimer held that “[t]he patent eligibility inquiry may contain
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underlying issues of fact.” Berkheimer, 881 F.3d at 1365 (quoting Mortgage
Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1325 (Fed.
Cir. 2016) (“The § 101 inquiry ‘may contain underlying factual issues.”’)).
But the court also held that “[w]hen there is no genuine issue of material fact
regarding whether the claim element or claimed combination is well-
understood, routine, [and] conventional to a skilled artisan in the relevant
field, this issue can be decided on summary judgment as a matter of law.”
Id. at 1368 (emphasis added). This qualification has been subsequently
reiterated.
If there is a genuine dispute of material fact, Rule 56 requires that
summary judgment be denied. In Berkheimer, there was such a
genuine dispute for claims 4–7, but not for claims 1–3 and 9 . . .
. [I]n accordance with Alice, we have repeatedly recognized the
absence of a genuine dispute as to eligibility for the many claims
that have been defended as involving an inventive concept based
merely on the idea of using existing computers or the Internet to
carry out conventional processes, with no alteration of computer
functionality.
Berkheimer v. HP Inc., 890 F.3d 1369, 1371–74 (Fed. Cir. 2018) (Order, On
Petition for rehearing en banc, May 31, 2018); see also Aatrix Software, Inc.
v. Green Shades Software, Inc., 890 F.3d 1354, 1368 (Fed. Cir. 2018)
(Order, On Petition for rehearing en banc, May 31, 2018) (“A factual
allegation or dispute should not automatically take the determination out of
the court's hands; rather, there needs to be justification for why additional
evidence must be considered—the default being a legal determination.”).
Here, the Specification indisputably shows the claimed “authentication
computer system” covers a generic computer system that was conventional
at the time of filing. Accordingly, no genuine issue of material fact exists as
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to the well–understood, routine, or conventional nature of the claimed
“authentication computer system,” individually or in the combination as
claimed.
Lastly, the Appellants argue that
(3) Each of the claims includes specific limitations other than
what is well-understood, routine and conventional in the field, or add
unconventional steps that confine the claim to a particular useful
application. . . . Novel and non-obvious claims, by their very
definition, must include limitations other than what is well-
understood, routine, and conventional in the field, or else they
wouldn't be novel and non-obvious. Consequently, something besides
the alleged abstract idea in the claims must be novel and non-obvious,
and therefore significantly more than the alleged abstract idea is
present in the claim.
Br. 6.
Claim limitations found to be novel and/or nonobvious can affect a
patent-eligibility determination. Cf. Ariosa Diagnostics, Inc., v. Sequenom,
Inc., 788 F.3d 1371 (Fed. Cir. 2015) (“For process claims that encompass
natural phenomenon, the process steps are the additional features that must
be new and useful.”) Thus, novelty is a factor to be considered when
determining “whether the claims contain an "inventive concept" to
"transform" the claimed abstract idea into patent-eligible subject matter.”
Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014).
“[N]ovelty in implementation of the idea is a factor to be considered only in
the second step of the Alice analysis.” Id.
However, a finding of novelty or nonobviousness does not necessarily
lead to the conclusion that subject matter is patentable eligible.
“Groundbreaking, innovative, or even brilliant discovery does not by itself
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satisfy the § 101 inquiry.” Ass’n for Molecular Pathology v. Myriad
Genetics, Inc., 133 S. Ct. 2107, 2117 (2013).
Indeed, “[t]he ‘novelty’ of any element or steps in a process, or
even of the process itself, is of no relevance in determining
whether the subject matter of a claim falls within the § 101
categories of possibly patentable subject matter.” Diamond v.
Diehr, 450 U.S. 175, 188–89 (1981) (emphasis added); see also
Mayo, 132 S. Ct. at 1303–04 (rejecting “the Government’s
invitation to substitute §§ 102, 103, and 112 inquiries for the
better established inquiry under § 101”). Here, the jury’s general
finding that Symantec did not prove by clear and convincing
evidence that three particular prior art references do not disclose
all the limitations of or render obvious the asserted claims does
not resolve the question of whether the claims embody an
inventive concept at the second step of Mayo/Alice.
Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1315 (Fed.
Cir. 2016).
Nor does a finding of obviousness necessarily lead to the conclusion
that subject matter is patentable ineligible. See also Rapid Litig. Mgmt. Ltd.
v. CellzDirect, Inc., 827 F.3d 1042, 1050 (Fed. Cir. 2016) (“That each of the
claims' individual steps (freezing, thawing, and separating) were known
independently in the art does not make the claim unpatentable.”) “[P]atent-
eligibility does not turn on ease of execution or obviousness of application.
Those are questions that are examined under separate provisions of the
Patent Act.” Id. at 1052 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc, 566 U.S. 66, 90 (2012).
Notwithstanding that ‘“the § 101 patent-eligibility inquiry and, say,
the § 102 novelty inquiry might sometimes overlap,’ [ ] a claim for a new
abstract idea is still an abstract idea.” Synopsys, Inc. v. Mentor Graphics
Corp., 839 F.3d 1138, 1151 (quoting Mayo, 566 U.S. at 90). The question in
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step two of the Alice framework is not whether an additional feature is novel
but whether the implementation of the abstract idea involves “more than the
performance of ‘well-understood, routine, [and] conventional activities
previously known to the industry.’” Content Extraction and Transmission
LLC v. Wells Fargo Bank, Nat. Ass’n, 776 F.3d 1343, 1347–48 (quoting
Alice, 134 S.Ct. at 2359).
In that regard, the Appellants have not shown novel features that
transform the abstract idea into patent-eligible subject matter. The
Appellants do not explain what features in the claim would render the
subject matter significantly more that the authentication scheme we have
determined the claim to be directed to. At most, the claimed scheme uses an
“authentication computer system” but, as we have discussed, that alone adds
little to transform the abstract idea into an inventive concept. Accordingly,
this argument is unpersuasive.
No other persuasive arguments having been presented, we conclude
that no error has been committed in the determination under Alice step two
that claim 1 does not include an element or combination of elements
circumscribing the patent-ineligible concept it is directed to so as to
transform the concept into an inventive application.
We have considered all of the Appellants’ remaining arguments and
find them unpersuasive. Accordingly, because we are not persuaded as to
error in the determinations that representative claim 18, and claims 21–31,
which stand or fall with claim 18, are directed to an abstract idea and do not
present an “inventive concept,” we sustain the Examiner’s conclusion that
they are directed to patent-ineligible subject matter for being judicially-
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excepted from 35 U.S.C. § 101. Cf. LendingTree, LLC v. Zillow, Inc., 656
Fed. App’x 991, 997 (Fed. Cir. 2016) (“We have considered all of
LendingTree’s remaining arguments and have found them unpersuasive.
Accordingly, because the asserted claims of the patents in suit are directed to
an abstract idea and do not present an ‘inventive concept,’ we hold that they
are directed to ineligible subject matter under 35 U.S.C. § 101.”); see, e.g.,
OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1364 (Fed. Cir. 2015);
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1098 (Fed. Cir.
2016).

DECISION
The decision of the Examiner to reject claims 18 and 21–31 is
affirmed.

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