Brigette White-Mcfarland et al.

Patent Trials and Appeals Board

Dec 5, 2019

14451184 - (D) (P.T.A.B. Dec. 5, 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.
14/451,184 08/04/2014 Brigette White-McFarland 070457.2815 8202
21003 7590 12/05/2019
BAKER BOTTS L.L.P.
30 ROCKEFELLER PLAZA
44TH FLOOR
NEW YORK, NY 10112-4498
EXAMINER
CAMPEN, KELLY SCAGGS
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
12/05/2019 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):
DLNYDOCKET@BAKERBOTTS.COM
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte BRIGETTE WHITE-MCFARLAND and MICHAEL AMEISS
____________

Appeal 2018-006616
Application 14/451,184
Technology Center 3600
____________

Before CAROLYN D. THOMAS, MICHAEL J. STRAUSS, and
NABEEL U. KHAN, Administrative Patent Judges.

THOMAS, Administrative Patent Judge.

DECISION ON APPEAL

Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 2, 4–8, 13, 15–19, 23, and 24. We have
jurisdiction over the appeal under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42. Appellant identifies the real party in interest as Mastercard
International Incorporated. Appeal Br. 4.
Appeal 2018-006616
Application 14/451,184

2
The present invention relates generally to using a flex service provider
to process transactions that are funded using a secondary payment account.
See Spec. ¶ 2.
Independent claim 23, reproduced below, is representative of the
appealed claims:
23. A method for using a secondary account to fund a
payment card transaction conducted between a cardholder and a
merchant in an electronic payment network, the method comprising:
associating by a flex service provider one or more
secondary accounts with a payment card account;
defining one or more payment rules associated with said
one or more secondary accounts, the one or more payment rules
determining which of said one or more secondary accounts should
fund the payment card transaction, wherein said one or more payment
rules are stored on a processor operated by a flex service provider
within an electronic payment network;
receiving by the flex service provider a transaction
message associated with the payment card transaction using the
payment card account, the transaction message comprising transaction
data;
determining by the flex service provider, as a function of
the payment card account and at least one of a transaction amount, a
merchant code, a merchant identity, a date of transaction, a total
spending amount over a pre-determined time period, or a credit line
balance, whether the transaction data satisfies at least one of the one
or more payment rules;
appending by the flex service provider, after the
receiving, using a data formatting unit configured to identify and
place a plurality of numbers in said transaction message according to
a bitmap, supplemental payment data to said transaction message to
form an appended transaction message when the transaction data
satisfies at least one or the one or more payment rules, the
supplemental payment data indicating by at least one of said plurality
of numbers that the payment card transaction is to be funded using
one of the one or more the secondary accounts;
processing the payment card transaction using the
payment card account; and
Appeal 2018-006616
Application 14/451,184

3
requesting by the flex service provider, based on the
supplemental payment data, a transfer of funds from the one of the
one or more secondary accounts to the payment card account, wherein
the requesting further comprises authorizing the payment card
transaction at least by authenticating the payment card based on any
one or more of a static card verification code from a magnetic stripe
of the payment card or a dynamic card verification code generated by
a processor embedded in the payment card;
decreasing by the flex service provider the one or more
secondary accounts in an amount of the transfer of funds; and
increasing by the flex servicer provider the payment card
account in the amount of the transfer of funds.

Appellant appeals the following rejection:2
Claims 2, 4−8, 13, 15–19, 23, and 24 are rejected under 35 U.S.C.
§ 101 because the claimed invention is directed to patent-ineligible subject
matter. Final Act. 2–6.
We review the appealed rejections for error based upon the issues
identified by Appellant, and in light of the arguments and evidence produced
thereon. Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010) (precedential).

ANALYSIS
Rejection under § 101
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: “[l]aws of nature, natural phenomena, and abstract

2 The Examiner withdrew the nonstatutory double patenting rejection of
claims 2, 4–8, 13, 15–19, 23, and 24 due to the filing of Appellant’s
Terminal Disclaimer on March 6, 2018. Ans. 7.
Appeal 2018-006616
Application 14/451,184

4
ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’l, 573 U.S. 208,
216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court’s two-step framework, described in Mayo
and Alice. Id. at 217–18 (citing Mayo Collaborative v. Prometheus
Laboratories, Inc., 566 U.S. 66, 75–77 (2012)). In accordance with the
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.”). For example, concepts determined to
be abstract ideas, and thus patent ineligible, include certain methods of
organizing human activity, such as fundamental economic practices (Alice,
573 U.S. at 219–20; Bilski, 561 U.S. at 611); mathematical formulas (Parker
v. Flook, 437 U.S. 584, 594–95 (1978)); and mental processes (Gottschalk v.
Benson, 409 U.S. 63, 69 (1972)).
Recently, the USPTO published revised guidance on the application
of 35 U.S.C. § 101. USPTO’s 2019 Revised Patent Subject Matter
Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Revised Guidance”).
Under the Revised Guidance “Step 2A,” the office first looks 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
Appeal 2018-006616
Application 14/451,184

5
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a)-(c), (e)-(h)). 84 Fed. Reg. at
51–52, 55.
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, does the Office then
(pursuant to the Revised Guidance “Step 2B”) 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. 84 Fed. Reg. at 56.
Step 2A, Prong 1 (Does the Claim Recite a Judicial Exception?)
With respect to independent method claim 23, and similarly, system
claim 24, the Examiner determines that the claims are at least directed to
“creating a payment contract” (Final Act. 2; see also id. at 4). The Examiner
also determines, and we agree, that “[t]he creation of a payment relationship
as recited in the claim is a commercial arrangement involving contractual
relations similar to the fundamental economic practices, organizing certain
methods of human activity” (Final Act. 4–5), which is a type of abstract
idea.
The Specification discloses:
Credit cards today may also be associated with significant
drawbacks for some consumers. Some cardholders have limited
available credit, either because they are adjudged to represent a high
credit risk, or because past purchases have not yet been paid down and
thus consume most or all of the credit line. Additionally, some credit
card users may exceed their intended budgets and incur more debt
Appeal 2018-006616
Application 14/451,184

6
than they would prefer. These considerations have led some
consumers to prefer to fund their purchases with non-credit payment
cards, even though they must forego the benefits of credit card use.
Therefore, it would be advantageous to permit a cardholder to
use a credit card for a substantial number of their payment
transactions, and thereby accrue the benefits of using the card, such as
loyalty points or cash back, while also permitting the cardholder to
pay down their credit purchases from one or more non-credit
accounts, to reduce the total outstanding purchases on their credit card
line of credit and to provide better control over spending and debt.
Spec. ¶¶ 4–5.

Specifically, independent claim 23 recites at least the following
limitations: (1) “associating . . . secondary accounts with a payment card
account,” (2) “defining one or more payment rules,” (3) “receiving . . . a
transaction message,” (4) “determining . . . whether the transaction data
satisfies . . . rules,” (5) “appending . . . supplemental payment data to said
transaction message,” (6) “processing the payment card transaction,”
(7) “requesting . . . a transfer of funds from . . . secondary accounts,”
(8) “decreasing . . . the . . . secondary accounts in an amount of the transfer
of funds,” and (9) “increasing . . . the payment card account in the amount of
the transfer of funds.” Claim 23.
These limitations, under their broadest reasonable interpretation,
recite fundamental economic because the limitations all recite operations
that would ordinarily take place in a commercial environment. Alice, 573
U.S. at 219−20 (concluding that use of a third party to mediate settlement
risk is a “fundamental economic practice” and thus an abstract idea);
Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372,
1378−79 (Fed. Cir. 2017) (holding that concept of “local processing of
payments for remotely purchased goods” is a “fundamental economic
Appeal 2018-006616
Application 14/451,184

7
practice, which Alice made clear is, without more, outside the patent
system.”); OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362-63
(Fed. Cir. 2015) (concluding that claimed concept of “offer-based price
optimization” is an abstract idea “similar to other ‘fundamental economic
concepts’ found to be abstract ideas by the Supreme Court and this court”);
Personalized Media Commc’ns, L.L.C. v. Amazon.com Inc., 671 F. App’x
777 (mem) (Fed. Cir. 2016) (receiving instructions for ordering); and
EasyWeb Innovations, LLC v. Twitter, Inc., 689 F. App’x 969 (Fed. Cir.
2017) (receiving, authenticating, and publishing data).
Appellant does not directly challenge whether the claims are directed
to an abstract idea, but instead make arguments more directly related to
integrating the judicial exception into a practical application and whether
specific limitations are not well-understood, routine, conventional activity in
the field. Such arguments are addressed below.
Therefore, for at least the aforementioned reasons, we agree with the
Examiner that claim 1 recites an abstract idea, which we conclude is akin to
“a fundamental economic practice,” under the abstract concept of certain
methods of organizing human activity.
Step 2A—Prong 2 (integration into Practical Application) 3
Under the Revised Guidance, we now must determine if additional
elements in the claims integrate the judicial exception into a practical
application (see MPEP § 2106.05(a)–(c), (e)–(h)).

3 We acknowledge that some of the considerations at Step 2A, Prong 2,
properly may be evaluated under Step 2 of Alice (Step 2B of the Office
revised guidance). For purposes of maintaining consistent treatment within
the Office, we evaluate them under Step 1 of Alice (Step 2A of the Office
revised guidance). See Revised Guidance, 84 Fed. Reg. at 55 n.25, 27–32.

Appeal 2018-006616
Application 14/451,184

8
We discern no additional element (or combination of elements)
recited in Appellant’s representative claim 1 that integrates the judicial
exception into a practical application. See Revised Guidance, 84 Fed. Reg.
at 54–55 (“Prong 2”). For example, Appellant’s claimed additional elements
(e.g., “a flex service provider,” “a processor,” and “an electronic payment
network,” ) do not: (1) improve the functioning of a computer or other
technology; (2) are not applied with any particular machine (except for a
generic computer); (3) do not effect a transformation of a particular article to
a different state; and (4) are not applied in any meaningful way beyond
generally linking the use of the judicial exception to a particular
technological environment, such that the claim as a whole is more than a
drafting effort designed to monopolize the exception. See MPEP
§§ 2106.05(a)–(c), (e)–(h).
Appellant contends the pending claims “are directed to a
technological solution to a technical problem, similar to the claims that were
at issue in McRo” (Appeal Br. 15), specifically, “in processing payment card
transactions using secondary accounts by providing and using supplemental
payment data.” Id. at 20.
For example, Appellant’s Specification states:
However, if the flex service provider 110 determines that the
transaction data contained in the transaction message satisfies at least
one of the payment rules, the flex service provider 110 appends
supplemental payment data to the authorization message at 414. The
format of the supplemental payment data may be determined by the
issuer 106. For example, when establishing the flex payment
program, the issuer 106 may provide instructions to the flex service
provider 110 regarding the format of the supplemental payment data
to be conveyed within the transaction message. These instructions
may include a bitmap or other formatting information describing the
identity and placement of the data within the authorization message.
Appeal 2018-006616
Application 14/451,184

9
The format specified by the issuer 106 may include the account
number of the secondary account or some other secondary account
identifier. The format may also include the type of secondary
account. In some embodiments, each of the payment rules is given a
name or other identifier by the cardholder and/or service provider.
The name or other identifier may also be included as part of the
supplemental payment data added to the transaction message.
For example, referring again to Figure 5, a cardholder 102 uses
the credit card to purchase goods or services for an amount greater
than $250. Therefore, the transaction satisfies payment rule 510. The
supplemental payment data can include one or more of the account
number of Account A, information indicating that the selected
secondary account is a checking account, and the name of the
payment rule (OVER250). The account type of the selected
secondary account may be represented by numbers. For example, the
transaction message may include information indicating that the
selected account is a type 1 account, where 1 =Checking, 2=Savings,
3=Money Market Account, 4=Home Equity Line of Credit, etc.
Spec. ¶ 46−47. In other words, Appellant describes steps in identifying and
using a secondary account to fund a payment card transaction.
Regarding Appellant’s contention supra that their claims are similar
to McRo, we note that in McRO, the Federal Circuit concluded that the
claim, when considered as a whole, was directed to a “technological
improvement over the existing, manual 3-D animation techniques” through
the “use of limited rules specifically designed to achieve an improved
technological result in conventional industry practice.” McRO, Inc. v.
Bandai Namco Games Am. Inc., 837 F.3d 1299, 1316 (Fed. Cir. 2016).
Specifically, the Federal Circuit found that the claimed rules allow
computers to produce accurate and realistic lip synchronization and facial
expressions in animated characters that previously could only be produced
by human animators; and the rules are limiting because they define morph
Appeal 2018-006616
Application 14/451,184

10
weight sets as a function of phoneme sub-sequences. Id. at 1313 (citations
omitted).
In contrast, here, we agree with the Examiner that “[t]he claims are
not directed to a specific improvement to computer functionality . . . [but
instead] the problem being solved as one of a business/credit problem.”
Ans. 14 (citing Spec. ¶¶ 4–5). As highlighted supra in reference to
Appellant’s paragraphs 4 and 5, Appellant describes the drawbacks of
having a credit account, i.e., limited available credit and high debt balances,
and using alternative means to pay down such debts, e.g., earned cash-back.
Furthermore, Appellant has not identified any analogous technological
improvement attributable to the claimed invention. Although processing
transactions using a secondary payment account may improve a
business/economic problem (see Ans. 16), it does not achieve an improved
technological result. We see no parallel between the limiting rules described
in McRO and the results-based rules recited in Appellant’s claims.
Additionally, we note that the dependent claims contain only
limitations that recite the identified abstract idea, and do not create any
additional elements beyond this abstract idea. Nor does Appellant explain
how the elements in the dependent claims recite more than the abstract ideas.
Appeal Br. 27–29.
For at least the reason noted supra, we determine that claim 23
(1) recites a judicial exception and (2) does not integrate that exception into
a practical application. Thus, representative claim 23 is directed to the
aforementioned abstract idea.

Appeal 2018-006616
Application 14/451,184

11
Alice/Mayo—Step 2 (Inventive Concept)
Step 2B identified in the Revised Guidance
Turning to the second step of the Alice inquiry, we now look to
whether claim 1 contains any “inventive concept” or adds anything
“significantly more” to transform the abstract concept into a patent-eligible
application. Alice, 573 U.S. at 216. As recognized by the Revised
Guidance, an “inventive concept” under Alice step 2 can be evaluated based
on whether an additional element or combination of elements:
(1) adds a specific limitation or combination of limitations that are
not well-understood, routine, conventional activity in the field,
which is indicative that an inventive concept may be present; or
(2) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception, which is indicative
that an inventive concept may not be present.

See Revised Guidance, 84 Fed. Reg. at 56; see MPEP § 2106.05(d).
Appellant contends that “[l]ike the claims in Bascom, claims 23 and
24 recite an inventive concept (automatically funding a payment transaction
with a secondary account based on payment rules) found in the ordered
combination of claim features at issue.” Appeal Br. 27.
However, Appellant has not adequately explained how the claims are
performed such that they are not routine, conventional functions of a generic
computer. The claims at issue do not require any nonconventional computer
or display components, or even a “non-conventional and non-generic
arrangement of known, conventional pieces,” but merely call for
performance of the claimed associating, defining, receiving, determining,
etc., “on a set of generic computer components.” Bascom Global Internet
Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1349–52 (Fed. Cir.
Appeal 2018-006616
Application 14/451,184

12
2016). Thus, considering the features of the claims, individually and as an
ordered combination, we find there are no additional elements that transform
the nature of the claim into a patent-eligible application. Alice, 134 S. Ct. at
2355.
Furthermore, we note a finding of novelty or non-obviousness does
not require the conclusion that the claimed subject matter is patent-eligible.
Although the second step in the Mayo/Alice framework is termed a search
for an “inventive concept,” the analysis is not an evaluation of novelty or
nonobviousness, but, rather, 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 216. “Groundbreaking, innovative, or even brilliant discovery
does not by itself satisfy the § 101 inquiry.” Ass’n. for Molecular Pathology
v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013). A novel and non-
obvious claim directed to a purely abstract idea is, nonetheless, patent-
ineligible. See Mayo, 566 U.S. at 90. See also Diamond v. Diehr, 450 U.S.
175, 188–89 (1981) ( “The ‘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.”).
Because Appellant’s independent claim 23 is directed to a patent-
ineligible abstract concept, does not include additional elements that
integrate the judicial exception into a practical application, and does not add
a specific limitation beyond the judicial exception that is not “well-
understood, routine, and conventional,” we sustain the Examiner’s rejection
Appeal 2018-006616
Application 14/451,184

13
of the claims under 35 U.S.C. § 101 as being directed to non-statutory
subject matter in light of Alice, its’ progeny, and the Revised Guidance.

CONCLUSION
In summary:
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
2, 4–8, 13, 15–
19, 23, 24
101 Eligibility 2, 4–8,
13, 15–
19, 23, 24

No period for taking any subsequent action in connection with this
appeal may be extended under 37 C.F.R. § 1.136(a).

AFFIRMED