Yair Goldfinger et al.

Patent Trials and Appeals Board

Oct 31, 2019

14315257 - (D) (P.T.A.B. Oct. 31, 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.
14/315,257 06/25/2014 Yair Goldfinger 2010190-0015 2356
24280 7590 10/31/2019
CHOATE, HALL & STEWART LLP
TWO INTERNATIONAL PLACE
BOSTON, MA 02110
EXAMINER
GLASS, RUSSELL S
ART UNIT PAPER NUMBER
3627
NOTIFICATION DATE DELIVERY MODE
10/31/2019 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):
jnease@choate.com
patentdocket@choate.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte YAIR GOLDFINGER and AMICHAY OREN
____________________

Appeal 2018-001067
Application 14/315,257
Technology Center 3600
____________________

Before ELENI MANTIS MERCADER, JOYCE CRAIG, and
ALEX S. YAP, Administrative Patent Judges.

YAP, Administrative Patent Judge.

DECISION ON APPEAL
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner’s
Final rejection of claims 27–33.1 (Final Act. 3 (Final Office Action, mailed
July 29, 2016, “Final Act.”).) 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 AppCard, Inc. as the real party in
interest. (Appeal Br. 2.)
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STATEMENT OF THE CASE
Introduction
According to the Specification, Appellant’s invention relates to
“apparatus and methods for collecting and manipulating transaction data.”
(Spec., Abstract (Specification filed June 25, 2014, “Spec.”).) Claim 27 is
illustrative, and is reproduced below (with minor reformatting):
27. A method of redeeming rewards accumulated in a user
account, the method comprising:
receiving, from a point of sale device, transaction
data and user data, the transaction data comprising
purchase information and the user data comprising
a user identifier;
identifying, via an apparatus serving as an
intermediary between the point of sale device and a
purchase recording device rewards based on the
purchase information, the rewards including at least
one reward item or number of reward points; and
deducting from or crediting to the user account,
credits and/or a number of points corresponding to
the identified at least one reward item or reward
points, the user account being identified based on
the received user data.

Prior Art and Rejections on Appeal
The following table lists the prior art relied upon by the Examiner in
rejecting the claims on appeal:
Bohn et al. (“Bohn”) US 2010/0301113 Al Dec. 2, 2010

Claims 27–33 stand rejected under 35 U.S.C. § 101 as not being
directed to patent-eligible subject matter. (See Final Act. 2–3.)
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Claims 27–33 stand rejected under 35 U.S.C. § 102(a) as being
anticipated by Bohn. (See Final Act. 3–6.)

ANALYSIS
We have reviewed the Examiner’s rejection in light of Appellant’s
arguments that the Examiner has erred. We are not persuaded the Examiner
erred in rejecting the claims under 35 U.S.C. § 101 but are persuaded that
the Examiner erred in rejecting the claims under 35 U.S.C. § 102(a).

35 U.S.C. § 101 Rejection Legal Framework
An invention is patent eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” See 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: “[l]aws of nature, natural phenomena, and abstract
ideas” are not patentable. E.g., Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573
U.S. 208, 216 (2014).
In determining whether a claim falls within an excluded category, our
inquiry focuses on the Supreme Court’s two-step framework, described in
Mayo and Alice. Id. at 217–18 (citing Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with
that framework, we first determine what concept the claim is “directed to.”
See Alice, 573 U.S. at 219 (“On their face, the claims before us are drawn to
the concept of intermediated settlement, i.e., the use of a third party to
mitigate settlement risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611
(2010) (“Claims 1 and 4 in petitioners’ application explain the basic concept
of hedging, or protecting against risk.”).
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Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; see also Bilski, 561 U.S. at
611); mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95
(1978)); and mental processes (Gottschalk v. Benson, 409 U.S. 63, 69
(1972)). Concepts determined to be patent eligible include physical and
chemical processes, such as “molding rubber products” (Diamond v. Diehr,
450 U.S. 175, 191 (1981)); “tanning, dyeing, making water-proof cloth,
vulcanizing India rubber, smelting ores” (id. at 182 n.7 (quoting Corning v.
Burden, 56 U.S. 252, 267–68 (1853))); and manufacturing flour (Benson,
409 U.S. at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that “[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula.” Diehr, 450 U.S. at 176, 191 (“We view
respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, . . . and this principle cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment.” Id. at 187 (“It is now commonplace that an application of a
law of nature or mathematical formula to a known structure or process may
well be deserving of patent protection.”), 191 (citing Benson and Flook).
If the claim is “directed to” an abstract idea, we turn to the second
step of the Alice and Mayo framework, where “we must examine the
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elements of the claim to determine whether it contains an inventive concept
sufficient to transform the claimed abstract idea into a patent-eligible
application.” Alice, 573 U.S. at 221 (quotation marks omitted). “A claim
that recites an abstract idea must include ‘additional features’ to ensure ‘that
the [claim] is more than a drafting effort designed to monopolize the
[abstract idea].’” Id. (quoting Mayo, 566 U.S. at 77). “[M]erely requir[ing]
generic computer implementation[] fail[s] to transform that abstract idea into
a patent-eligible invention.” Id.
The Office recently published revised guidance on the application of
§ 101. USPTO’s January 7, 2019 Memorandum, 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (“Memorandum, 84
Fed. Reg.”). Under that guidance, we first look to whether the claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods
of organizing human activity such as a fundamental
economic practice, or mental processes); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a)–(c), (e)–(h)).
Only if a claim recites a judicial exception and does not integrate that
exception into a practical application, do we then look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is not “well-understood, routine, conventional” in the field
(see MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, conventional activities
previously known to the industry, specified at a high level of
generality, to the judicial exception.
(See generally Memorandum, 84 Fed. Reg. 50.)
Applying the guidance set forth in the Memorandum, we conclude
that claims 27–33 are not directed to patent-eligible subject matter.
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Step 1 – Statutory Claims and Memorandum
Alice involves determining whether the claims recite an exception to
an otherwise statutory category under 35 U.S.C § 101. See Alice, 573 U.S.
at 216–17. Similarly, under the Memorandum, the PTO first determines
“whether the claim is to a statutory category (Step 1).” (Memorandum, 84
Fed. Reg. 53.) Here, the challenged claims recite a process, namely a
method “of redeeming rewards accumulated in a user account.”

Step 2a Prong 1 – Abstract Idea
The Memorandum instructs us first to determine whether each claim
recites any judicial exception to patent eligibility. (Memorandum, 84 Fed.
Reg. 54.) The Memorandum identifies three judicially-excepted groupings:
(1) mathematical concepts; (2) certain methods of organizing human activity
such as fundamental economic practices; and (3) mental processes. Id. at 52.
The Examiner finds that the claims are directed to an abstract idea “of
crediting or deducting reward points from a customer loyalty program. This
is an idea in and of itself similar to using advertising as a form of currency,
which has been found to be an abstract idea.” (Final Act. 2; see also Ans.
3.) Appellant contends that the claims are not directed to an abstract idea.
(App. Br. 7–10.) Appellant also contends that “Office Action was less than
one page (double spaced),” that “the Examiner’s analysis of the independent
claim 27 was at best cursory, and that the Examiner appears to have largely
ignored limitations recited in the dependent claims.” (Id. at 7–8.)
Claim 27 recites a “method of redeeming rewards accumulated in a
user account.” Specifically, claim 27 recites steps for “receiving,[]
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transaction data and user data, the transaction data comprising purchase
information and the user data comprising a user identifier,” (step a)
“identifying,[] rewards based on the purchase information, the rewards
including at least one reward item or number of reward points;” and (step b)
“deducting from or crediting to the user account, credits and/or a number of
points corresponding to the identified at least one reward item or reward
points, the user account being identified based on the received user data.” In
other words, claim 27 recites steps for keeping track of a user’s rewards
points. These steps, individually and collectively, recite mental processes
that can be performed by a human with pen and paper. Step a— identifying,
[] rewards based on the purchase information, the rewards including at least
one reward item or number of reward points—is a step of evaluation or
judgment, which is a mental process. Step b—deducting from or crediting
to the user account, credits and/or a number of points corresponding to the
identified at least one reward item or reward points, the user account being
identified based on the received user data—is a step of evaluation or
judgment, which is a mental process. In sum, steps a–b recite mental
processes that can be conducted by a human using a pen and paper.2 As
such, the claimed steps recite a patent-ineligible abstract idea.
(Memorandum, 84 Fed. Reg. at 52, n.14; see also Mayo, 566 U.S. at 71
(“[M]ental processes[]. . . are not patentable, as they are the basic tools of

2 Nothing forecloses the performance of these steps by a human, mentally or
with pen and paper (Memorandum, 84 Fed. Reg. 52, n.14; see also
Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318 (Fed.
Cir. 2016); Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d
1314, 1324 (Fed. Cir. 2016); Versata Dev. Grp. v. SAP Am., Inc., 793 F.3d
1306, 1335 (Fed. Cir. 2015); and CyberSource Corp. v. Retail Decisions,
Inc., 654 F.3d 1366, 1372, 1373 (Fed. Cir. 2011)).
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scientific and technological work.”); Synopsys, Inc. v. Mentor Graphics
Corp., 839 F.3d 1138, 1139 (Fed. Cir. 2016) (Holding that claims to the
mental process of “translating a functional description . . . into a hardware
component description” are directed to an abstract idea, because the claims
“read on an individual performing the claimed steps mentally or with pencil
and paper.”).) Claims 28–33 depend on independent claim 27, therefore,
these claims also recite a patent-ineligible abstract idea.

Step 2a Prong 2 – Integration of the Judicial Exception
into a Practical Application
In applying step 2a, prong 2 of the Memorandum, we determine that
the claims do not integrate the recited judicial exception into a practical
application because the claims do not apply, rely on, or use the judicial
exception in a manner that imposes a meaningful limit on the exception.
(Memorandum, 84 Fed. Reg. 54–55; see also MPEP § 2106.05(a)–(c), (e)–
(h).)
If a claim recites a judicial exception, we determine whether the
recited judicial exception is integrated into a practical application of that
exception by: (a) identifying whether there are any additional elements
recited in the claim beyond the judicial exception(s); and (b) evaluating
those additional elements individually and in combination to determine
whether they integrate the exception into a practical application. If the
recited judicial exception is integrated into a practical application, the claim
is not directed to the judicial exception. “[T]he term ‘additional elements’
. . . refer[s] to claim features, limitations, and/or steps that are recited in the
claim beyond the identified judicial exception.” (Memorandum, 84 Fed.
Reg. 55, n.24 (emphasis added).)
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Claim 27 includes the following additional elements: “receiving, []
transaction data and user data, the transaction data comprising purchase
information and the user data comprising a user identifier,” “point of sale
device” and “apparatus serving as an intermediary between the point of sale
device and a purchase recording device.” The dependent claims (claims 28–
33) recite the following additional elements: “a first I/O port configured for
connection to the point of sale device” (claim 30), “a second I/O port
configured for connection to the purchase recording device” (claim 30), “a
processor” (claim 31), “a non-transitory computer readable medium storing
instructions” (claim 31), “point of sale device” (claim 31), “first I/O port”
(claim 31), “second I/O port” (claim 31), and “purchase recording device”
(claims 31 and 32). The Examiner finds that “[t]he additional element(s) or
combination of elements in the claim(s) other than the abstract idea per se,
i.e.[,] POS device, intermediary apparatus, purchase recording device, etc.,
amount(s) to no more than mere instructions for implementing the program
on a generic computer system.” (Final Act. 2.) Appellant contends that the
claims improve on a technological process:
The present claims describe a technological solution to problems
associated with allocating or redeeming rewards when
underlying transactions occurred in different locations or by
different vendors, or required the customer to be member of a
loyalty program. The automation is accomplished via a method
/ apparatus that involves extraction of point of sale data from a
data stream without impeding the flow of information (a safety
feature) (see, e.g., claim 30), identification of a qualifying offer
and automatic application of the offer to a user’s electronic
account (see, e.g., claim 31).
(App. Br. 9; see also Reply Br. 5.)
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We are not persuaded that these additional elements integrate the
exception into a practical application and agree with the Examiner that “[t]he
additional element(s) or combination of elements in the claim(s) [], i.e.[,]
POS device, intermediary apparatus, purchase recording device, etc.,
amount(s) to no more than mere instructions for implementing the program
on a generic computer system.”3 (Final Act. 2.) The alleged improvement
(automating the “extraction of point of sale data from a data stream without
impeding the flow of information” by “leveraging a specific set-up of
specific interconnected devices that communicate in a specific manner”)
does not improve the functioning of a computer itself. (App. Br. 8–9.) For
claims directed to computer software, the issue is whether “the focus of the
claims is on [a] 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.” Enfish, LLC v. Microsoft Corp.,
822 F.3d 1327, 1335–36 (Fed. Cir. 2016) (emphasis added).) Here, the
computer capabilities are not improved. Rather, any alleged improvement is
still using the computer as a tool. In other words, the alleged improvement
does not improve on the capabilities of the computer itself.
Accordingly, even in combination with all the other recited elements,
the addition of the additional elements does not integrate the abstract idea
into a practical application because it does not impose any meaningful limits
on practicing the abstract idea. We are also not persuaded by Appellant’s
contention that the “limitations of claims 27 and its dependent claims

3 We also find the additional element of “receiving, [] transaction data and
user data, the transaction data comprising purchase information and the user
data comprising a user identifier” an insignificant extra-solution activity.
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prevent preemption of the alleged abstract idea, i.e., all methods for ‘[]
crediting or deducting reward points from a customer loyalty program.’”
(App. Br. 9–10.) First, the abstract idea encompasses what Appellant sets
forth as additional elements in that Appellant’s proposed additional elements
encompasses the abstract idea. Second, the question of pre-emption is not
grounded on whether all methods for accomplishing the intended goal are
pre-empted, but rather on whether the claim pre-empts application of the
abstract idea embodied in the claim. It is, accordingly, of no import that the
claims do not read on existing, generic methods. Third, the absence of
complete pre-emption does not demonstrate patent eligibility because even
though the principle of pre-emption is the basis for the judicial exceptions to
patentability, the concern is fully addressed and rendered moot where the
claim is determined to disclose patent ineligible subject matter under the
two-part framework described in Mayo and Alice. Ariosa Diagnostics, Inc.
v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015). As explained in
Alice, “the prohibition against patenting abstract ideas cannot be
circumvented by attempting to limit the use of [the idea] to a particular
technological environment.” Alice, 573 U.S. at 222–23 (citations and
quotations omitted).
For these reasons, we determine that claims 27–33 do not integrate the
recited abstract idea into a practical application.

Step 2b – Inventive Concept
Because we agree with the Examiner that claims 27–33 are directed to
an abstract idea, we next consider whether an additional element (or
combination of elements) adds a limitation that is not well-understood,
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routine, conventional (“WURC”) activity in the field or whether the
additional elements simply append WURC activities previously known to
the industry, specified at a high level of generality, to the judicial exception.
(Memorandum, 84 Fed. Reg. 56.) The Examiner’s finding that an additional
element (or combination of elements) is WURC activity must be supported
with a factual determination. Id. (citing MPEP § 2106.05(d), (as modified
by the Berkheimer Memorandum4).)
Whether the additional elements are WURC activity is a question of
fact. See Berkheimer v. HP Inc., 881 F.3d 1360, 1369 (Fed. Cir. 2018)
(“Whether something is well-understood, routine, and conventional to a
skilled artisan . . . is a factual determination.”). Here, we agree with the
Examiner that “the present claims [] generically recited computer elements,
i.e.[,] intermediary device, [that] do not add a meaningful limitation to the
abstract idea as the actions, functions, and/ or steps performed by the
generically recited computer elements would be routine and conventional in
any computer implementations.” (Ans. 4.)
Appellant, however, contends that:
the methods in the present claims improve, in a novel way, a
technological process, e.g., the automatic deducting or crediting
of reward points (see, e.g., claim 27). The automation is
accomplished via a novel method/ apparatus that involves
extraction of point of sale data without impeding the flow of
information (a safety feature – see, e.g., claim 30),
identification of a qualifying offer, and automatic application of
the offer to a user’s electronic account (see, e.g., claim 31). An
implementation of the methods and the discrete non-

4 R. W. Bahr, Changes in Examination Procedure Pertaining to Subject
Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v.
HP, Inc.) (2018) (hereinafter “Berkheimer Memorandum”).
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conventional and non-generic steps is shown in claim 27 and
representative dependent claims 30 and 31. In contrast to the
technologies in the present claims, the claims in EFG, cited in
the Examiner’s Answer, consisted entirely of off-the-shelf
components and required no new source, type, or techniques for
analyzing data (see EFG, slip opinion, pp[.] 9–10). The claims
in Intellectual Ventures were directed to mere storage and
display of data and contained no inventive concept (see
Intellectual Ventures, slip opinion, p. 9).
(Reply Br. 7–8.)
Appellant’s arguments are not persuasive because they address the
recited judicial exception itself, rather than any additional element. The
analysis in the second step of the Alice/Mayo framework is a search for “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 (citation omitted).
Even if novel, judicial exceptions are patent ineligible absent further
elements amounting to significantly more that transforms them into eligible
subject matter. Flook, 437 U.S. at 591–92 (“[T]he novelty of the
mathematical algorithm is not a determining factor at all.”); see also Ass’n
for Mol. Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013)
(“Groundbreaking, innovative, or even brilliant discovery does not by itself
satisfy the § 101 inquiry.”); Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d
1369, 1376 (Fed. Cir. 2016) (“[A] claim directed to a newly discovered law
of nature (or natural phenomenon or abstract idea) cannot rely on the novelty
of that discovery for the inventive concept necessary for patent eligibility.”);
Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1370
(Fed. Cir. 2015) (“[M]erely adding computer functionality to increase the
speed or efficiency of the process does not confer patent eligibility on an
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otherwise abstract idea.”). The relied upon steps Appellant contends are not
conventional do not, accordingly, transform the ineligible subject matter,
because they are not something more than, but are, rather, part of the
ineligible concept. (Reply Br. 7.)
Accordingly, we sustain the Examiner’s rejection of claims 27–33
under 35 U.S.C. § 101 as directed to patent-ineligible subject matter.

35 U.S.C. § 102 Rejection over Bohn
With respect to independent claim 27, the Examiner finds that Bohn
discloses the limitations of this claim. (Final Act. 3–4.) Specifically,
according to the Examiner, Bohn discloses “identifying, via an apparatus
serving as an intermediary between the point of sale device and a purchase
recording device” of claim 27. (Final 3 (emphasis added).) According to
the Examiner, Bohn discloses “the POS capture device, which is considered
to be an intermediary between the POS device (merchant #4) and the
purchase recording device (server and database #10).” (Id.) Appellant
contends that “[t]here is no indication in the [S]pecification that a merchant
or the merchant 4 is anything other than a person (or similar entity), let alone
a POS device.” (App. Br. 15 (emphasis omitted).) The Examiner does not
respond to this argument. (Ans. 5.)
On the record before us, the Examiner does not explain adequately
whether the merchant would inherently have a POS device or whether it
would be reasonable to construe the term “POS device” to include a human.5

5 In case of further prosecution, the Examiner may consider whether it
would have been obvious to one of ordinary skill in the art that the merchant
would have a POS device.
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For the foregoing reasons, we are persuaded of Examiner error in the
rejection of independent claim 27 and do not sustain the 35 U.S.C. § 102
rejection of this claim. We are also persuaded of Examiner error in the
rejection of dependent claims 28–33, which depend from claim 27, and
therefore we do not sustain the 35 U.S.C. § 102 rejection of these claims for
the same reasons.

CONCLUSION

In summary:
Claims Rejected 35 U.S.C. § Basis Affirmed Reversed
27–33 101, non-statutory subject matter 27–33
27–33 102(a) Bohn 27–33
Overall Outcome 27–33

DECISION
We affirm the Examiner’s rejection of claims 27–33 under 35 U.S.C.
§ 101.
We reverse the Examiner’s rejection of claims 27–33 under 35 U.S.C.
§ 102(a).
Because we affirm at least one ground of rejection with respect to
each claim on appeal, the Examiner's decision rejecting claims 27–33 is
affirmed. See 37 C.F.R. § 41.50(a)(1).
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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).

AFFIRMED