Ex Parte Flurscheim et al

Patent Trials and Appeals Board

Jun 24, 2019

14279653 - (D) (P.T.A.B. Jun. 24, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
14/279,653 05/16/2014 Christian Flurscheim
66945 7590 06/26/2019
KILPATRICK TOWNSEND & STOCKTONLLP/VISA
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
79900-904959 1094
EXAMINER
WONG,ERICTAKWAI
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
06/26/2019 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):
ipefiling@kilpatricktownsend.com
KTSDocketing2@kilpatrick.foundationip.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CHRISTIAN FLURSCHEIM, ERICK WONG, and
OLEG MAKHOTIN1
Appeal2018-004081
Application 14/279,653
Technology Center 3600
Before CAROLYN D. THOMAS, ERIC B. CHEN, and
JAMES B. ARPIN, Administrative Patent Judges.
THOMAS, Administrative Patent Judge.
DECISION ON APPEAL
Appellants seek our review under 35 U.S.C. § 134(a) of the
Examiner's Final Rejection of claims 1, 3-6, 8-11, 14, 15, 18, and 20-27,
all the pending claims in the present application. Claims 2, 7, 12, 13, 16, 17,
and 19 are canceled (see Claims Appendix). We have jurisdiction over the
appeal under 35 U.S.C. § 6(b ).
We Reverse.
1 Appellants name Visa International Service Association as the real party in
interest (App. Br. 2).
Appeal2018-004081
Application 14/279,653
The present invention relates generally to utilizing an existing
payment infrastructure for mobile payment applications to distribute
merchant consumable data while minimizing the impact to merchant systems
(see Spec. ,r 5).
Independent claim 1, reproduced below, is representative of the
appealed claims:
1. A method comprising:
determining, by a processor in a mobile payment device,
merchant consumable data including a coupon code or loyalty data;
generating, by the processor, a data transfer message, the
data transfer message comprising a plurality of pre-designated data
fields comprising an account identifier data field comprising an
account number, an expiration date data field, a cryptogram data field,
a service code data field, a consumer name data field, and an issuer
application data data field;
inserting, by the processor, the merchant consumable
data into the consumer name data field; and
providing, by the processor, the data transfer message to
an access device, wherein the access device is configured to extract
the merchant consumable data from the data transfer message and
process the merchant consumable data, by determining a transaction
amount for a transaction;
applying a discount associated with the merchant
consumable data to the transaction;
generating a discounted amount for the transaction;
generating an authorization request message comprising
the discounted amount for the transaction; and
transmitting the authorization request message to an
issuer of an account associated with the mobile payment device.
Appellants appeal the following rejection:
Claims 1, 3-6, 8-11, 14, 15, 18, and 20-27 are rejected under
35 U.S.C. § 101 because the claimed invention is directed to patent-
ineligible subject matter (Final Act. 2-7).
2
Appeal2018-004081
Application 14/279,653
We review the appealed rejections for error based upon the issues
identified by Appellants, and in light of the arguments and evidence
produced thereon. Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010)
(precedential).
ANALYSIS
Rejection under§ 1 OJ
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 U.S. 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. 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 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 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. Kappas, 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,
3
Appeal2018-004081
Application 14/279,653
594-95 (1978)); and mental processes (Gottschalkv. Benson, 409 U.S. 63,
69 (1972)).
Recently, the U.S. Patent and Trademark Office (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
(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 claims 1 and 11, and similarly,
device claims 6 and 15, the Examiner determines that the claims are directed
to the abstract idea of "communicating merchant consumable data, which is
4
Appeal2018-004081
Application 14/279,653
a fundamental economic practice" (Final Act. 2), "relating to performance of
financial transactions and concepts relating to managing transactions
between people" (id. at 3), which we conclude are certain methods of
organizing human activity.
The Specification discloses:
Embodiments of the invention provide a system and method to utilize
an existing payment infrastructure for mobile payment applications to
distribute coupons, loyalty data or any other merchant consumable
data while minimizing the impact to merchant systems. In some
embodiments, one or more data fields of a payment transaction
message may be repurposed to pass the merchant consumable data
from a mobile device to the merchant system using an existing
channel.
Spec. ,r 5. In other words, the present invention uses existing mobile
payment applications data fields, previously designed to contain data other
than the merchant consumable data, to transmit coupons to merchants.
Claim 1 recites at least the following limitations: (1) "determining ...
merchant consumable data," (2) "determining a transaction amount,"
(3) "applying a discount associated with the merchant consumable data,"
(4) "generating a discount amount," (5) "generating an authorization request
message," and ( 6) "transmitting the authorization request message" (see
claim 1 ). These limitations, under their broadest reasonable interpretation,
recite fundamental economic practice akin to commercial interactions
including sales activities or behaviors because the limitations recite
operations that would ordinarily take place in a commercial environment,
e.g., using a coupon when purchasing an item. 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
5
Appeal2018-004081
Application 14/279,653
goods" is a "fundamental economic 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"); buySafe, Inc. v. Google, Inc., 765 F.3d 1350
(Fed. Cir. 2014) (transaction guaranty); Personalized Media
Communications, L.L.C. v. Amazon, Inc., 671 F. App'x. 777 (mem) (Fed.
Cir. 2016) (receiving instructions for ordering).
Appellants challenge the Examiner's determinations on the ground
that "the Examiner has failed to specifically identify the 'abstract idea,' and
has therefore failed to establish a prima facie case of ineligibility" (App.
Br. 10-11 ), and "has failed to establish that the abstract idea is 'similar to at
least one concept that the courts have identified a an abstract idea"' (id. at
11).
Here, in rejecting the claims under 35 U.S.C. § 101, the Examiner
analyzed the claims using the Mayo/Alice two-step framework, consistent
with the guidance set forth in the USPTO's "2014 Interim Guidance on
Patent Subject Matter Eligibility," 79 Fed. Reg. 74618 (Dec. 16, 2014), in
effect at the time the rejection was made, i.e., on May 1, 2017. Thus, the
Examiner notified Appellants of the reasons for the rejection "together with
such information and references as may be useful in judging of the propriety
of continuing the prosecution of [the] application." 35 U.S.C. § 132.
Therefore, contrary to Appellants' assertions, in doing so, the Examiner set
forth a prim a facie case of unpatentability, such that the burden shifted to
Appellants to demonstrate that the claims are patent-eligible. Furthermore,
6
Appeal2018-004081
Application 14/279,653
we have supplemented the Examiner's determinations according to the
Revised Guidance, clearly setting forth the abstract idea, including similar
concepts that the courts have identified.
Appellants also contend that "the eligibility analysis should be
streamlined" (App. Br. 14). However, the streamlined analysis is an
optional tool for Examiners to use at the Examiner's discretion. See Interim
Guidance 2014 Interim Guidance on Patent Subject Matter Eligibility ("[A]
streamlined eligibility analysis can be used.") "[I]f there is doubt as to
whether the applicant is effectively seeking coverage for a judicial exception
itself, the full analysis should be conducted. " Id. ( emphasis added). Here,
the Examiner's decision to perform a full § 101 analysis is not an error.
Thus, we agree with the Examiner that method claim 1 recites "certain
methods of organizing human activity." Therefore, for at least the
aforementioned reasons, we agree with the Examiner that claim 1 recites an
abstract idea, which we conclude is "a fundamental economic practice."
Step 2A-Prong 2 (integration into Practical Application) 2
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)).
Here, we discern additional elements ( or a combination of elements)
recited in Appellants' representative claim 1 that integrate the judicial
2 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.
7
Appeal2018-004081
Application 14/279,653
exception into a practical application. See Revised Guidance, 84 Fed. Reg.
at 54-55 ("Prong 2"). For example, Appellants' combination of additional
elements ( e.g., "a processor," "a data transfer message comprising a plurality
of predesignated data fields ... [and] inserting merchant consumable data
into the consumer names data field," "extract the merchant consumable
data," and "an access device") do (1) improve the functioning of a computer
or other technology and (2) is applied in a 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).
Thus, we agree with Appellants that "similar to the facts in [McRO,
Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016)],
the claims clearly provide for an improvement in technology" (App. Br. 15)
"by (1) reducing the number of interactions required to obtain a discount and
pay for a good ... and (2) not requiring substantial modifications to the
conventional point of sale/payments infrastructure ... [wherein] the coupon
code or loyalty data may be transmitted with actual payment data ... in a
single data transfer message ... as opposed to two transmissions" (id. at 15-
16).
Appellants' Specification states:
Coupons are widely used at point of sale terminals. In a typical
transaction, a consumer may present a paper coupon to a clerk at a
merchant. The clerk may scan the paper coupon at the point of sale
terminal. The discount provided by the coupon may be provided at
the point of sale and the consumer may then pay the discounted
amount to the merchant using a credit or debit card.
Spec. ,r 2.
8
Appeal2018-004081
Application 14/279,653
In one embodiment of the invention, a mobile payment device may
determine merchant consumable data and may generate a data transfer
message comprising a plurality of pre-designated data fields designed
to contain data other than the merchant consumable data. The mobile
payment device may inert the merchant consumable data into one of
the plurality of designated data fields designed to contain data other
than the merchant consumable data. The mobile payment device may
provide the data transfer message to an access device, wherein the
access device is configured to extract the merchant consumable data
from the data transfer message and process the merchant consumable
data.
Id. ,r 6. In other words, the present invention repurposes data fields in a
payment transaction message to transmit both the merchant consumable data
and the actual payment to the merchant system using a single data transfer
message.
Similarly, the claims at issue in Enfzsh were directed to a specific type
of data structure, i.e., a self-referential table for a computer database,
designed to improve the way a computer carries out its basic functions of
storing and retrieving data. See Enfzsh, LLC v. Microsoft Corp., 822 F .3d
1327, 1335-36 (Fed. Cir. 2016). In rejecting a§ 101 challenge, the court in
Enfzsh held that "the plain focus of the claims is on an improvement to
computer functionality itself, not on economic or other tasks for which a
computer is used in its ordinary capacity." Id. at 1336.
Applying the Revised Guidance, and putting aside whether the claims
recite subject matter that falls within one of the enumerated groupings of
abstract ideas, we are persuaded that the claims integrate the abstract idea
into a practical application - the claims provide an improvement in a
technical field, i.e., generating a data transfer message that is used in the
payment infrastructure for mobile payment applications, enabling point of
9
Appeal2018-004081
Application 14/279,653
sale processing of the merchant consumable data and payment using a single
message, thereby avoiding the time commitment involved in existing system
where paper and/or electronic coupons are presented separately from
payment submission. See MPEP § 2106.05(a) ("Improvements to the
Functioning of a Computer or to Any Other Technology or Technical
Field"); see also, e.g., McRO, 837 F.3d at 1316 (holding that the claim is
directed to a technological improvement over existing 3-D animation
techniques and, therefore, not directed to an abstract idea); BASCOM Global
Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1351 (Fed. Cir.
2016) (holding that the '606 patent is claiming a technology-based solution,
not an abstract idea based solution, to filter content on the Internet that
overcomes existing problems with other Internet filtering systems).
On the present record, the Examiner has not sufficiently explained
why, in view the express claim language read in light of the above-
referenced portions of the Specification, the claimed invention would not be
considered an improvement in technology or a technical field.
Although it is not necessary for us to continue to step 2B under the
Revised Guidance, nonetheless, we note that the Examiner also has not set
forth with sufficient specificity or provided any finding (see Ans. 9) that the
specifically claimed manner of generating and using the "data transfer
message" is well-understood, routine, or conventional. Berkheimer v. HP
Inc., 881 F.3d 1360, 1369 (Fed. Cir. 2018) ("Whether something is well-
understood, routine, and conventional to a skilled artisan at the time of the
patent is a factual determination."). Here, the Examiner merely focuses on
"generic computer components" and "generic computer functions" (see
Final Act. 3-6), without addressing the specifically claimed "data transfer
10
Appeal2018-004081
Application 14/279,653
message" and the application thereof. As such, we conclude that the claims
are not directed to a judicial exception and, thus, are not patent ineligible.
Accordingly, we do not sustain the Examiner's rejection of claims 1,
3-6, 8-11, 14, 15, 18, and 20-27 under 35 U.S.C. § 101.
DECISION
We reverse the Examiner's decision rejecting claims 1, 3-6, 8-11, 14,
15, 18, and 20-27 under 35 U.S.C. § 101.
REVERSED
11