Brigette White-Mcfarland et al.Download PDFPatent Trials and Appeals BoardDec 5, 201914451184 - (D) (P.T.A.B. Dec. 5, 2019) Copy Citation 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 Copy with citationCopy as parenthetical citation