Ex Parte Heyner

Patent Trials and Appeals BoardMar 20, 2019

13888233 - (D) (P.T.A.B. Mar. 20, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. FILING DATE FIRST NAMED INVENTOR 13/888,233 05/06/2013 Mark A. Reyner 23641 7590 03/22/2019 Barnes & Thornburg LLP (FW) 888 S. Harrison Street, Suite 600 Fort Wayne, IN 46802-2206 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. 74534/273750 6665 EXAMINER OBEID, MAMON A ART UNIT PAPER NUMBER 3685 NOTIFICATION DATE DELIVERY MODE 03/22/2019 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): michael. wever@btlaw.com rhonda.bailey-reed@btlaw.com greg.cooper@btlaw.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte MARK A. REYNER 1 Appeal2018-008448 Application 13/888,233 Technology Center 3600 Before ROBERT E. NAPPI, JOHNNY A. KUMAR, and JOHN A. EV ANS, Administrative Patent Judges. NAPPI, Administrative Patent Judge. DECISION ON APPEAL Appellant appeals under 35 U.S.C. Â§ 134(a) from the Examiner's final rejection of claims 1 through 12, 16 through 25, 31 through 42, and 45 through 55. Claims 13 through 15, 26 through 30, 43, and 44, have been canceled. We have jurisdiction under 35 U.S.C. Â§ 6(b ). We REVERSE. 1 According to Appellant, Institutional Cash Distributors Technology, LLC is the real party in interest. App. Br. 1. Appeal2018-008448 Application 13/888,233 INVENTION The invention is directed to a technique for executing an electronic funds transfer which makes use of an encapsulated security token that encapsulates data using two cryptographic systems. Abstract. Claim 1 is illustrative of the invention and is reproduced below. 1. A method for controlling use of a cash channel used for electronic funds transfers, comprising: 1) constructing a security token that incorporates a first set of first financial transaction elements that are required to control operation of a cash channel, said cash channel involving an origination account from which assets are to be withdrawn and a destination account to which assets are to be deposited, said constructing a security token comprising: a) operating a first processing system to generate a first data object including at least a first subset of said first financial transaction elements; b) transmitting the first data object, directly or indirectly, from said first processing system to a second processing system; c) using the second processing system to generate an at least once-encapsulated cash channel object by encapsulating at least the first data object using a first digital signature system including a first digital signature of a first party, for encapsulating the first data object and a first signature verification for verifying the first signature and de- encapsulating the first data object; and d) transmitting the at least once-encapsulated cash channel object to a third processing system; and e) operating the third processing system to generate an at least twice-encapsulated cash channel object by adding at least a second subset of said first financial transaction elements, different than said first subset, to said once-encapsulated cash channel object and encapsulating at least the at least once- encapsulated cash channel object and said second subset of said first financial transaction elements using a second digital signature system including a second digital signature of a 2 Appeal2018-008448 Application 13/888,233 second party, for encapsulating the at least once-encapsulated cash channel object and said second subset of said first financial transaction elements, and a second signature verification for verifying the second signature and de-encapsulating the at least once-encapsulated cash channel object and said second subset of said first financial transaction elements; wherein said security token comprises said at least twice- encapsulated cash channel object; and 2) using the security token by: a) receiving, at a transaction processing system, said security token, including said at least twice-encapsulated cash channel object; b) receiving, at said transaction processing system, a cash channel request for withdrawing said assets from said origination account and depositing said assets into said destination account, said cash channel request comprising a second set of second financial transaction elements; c) operating said transaction processing system to use said second signature verification to de-encapsulate said at least twice-encapsulated cash channel object so as to obtain said second subset of said first financial transaction elements; d) operating said transaction processing system to use said first signature verification to de-encapsulate said at least once-encapsulated cash channel object to obtain said first subset of said first financial transaction elements; and e) comparing, at said transaction processing system, said first financial transaction elements of said security token with said second financial transaction elements of said cash channel request to verify said cash channel request. EXAMINER'S REJECTIONS 2 The Examiner rejected claims 1 through 12, 16 through 25, 31 2 Throughout this Decision we refer to the Appeal Brief filed June 5, 2017 ("App. Br."); the Reply Brief filed June 29, 2018 ("Reply Br."); Final Office Action mailed January 9, 2017 ("Final Act."); and the Examiner's Answer mailed May 3, 2018 ("Ans."). 3 Appeal2018-008448 Application 13/888,233 through 42, and 45 through 55 under 35 U.S.C. Â§ 101 for being directed to patent-ineligible subject matter. Final Act. 3-8. 3 The Examiner has rejected claims 1 through 12, 16 through 25, 31 through 42, and 45 through 55 under 35 U.S.C. Â§ I03(a) as being unpatentable over Atkinson (US 2004/0073518 Al, pub. Apr. 15, 2004), Frisch (US 2004/0243811 Al, pub. Dec. 2, 2004) and Faith (US 2011/0189981 Al, pub. Aug. 4, 2011). Final Act. 11-14.4 The Examiner provisionally rejected claim 1 on the ground of non- statutory, obviousness-type, double patenting, for being unpatentable over claim 1 Reyner US application Patent 13/888,322 (now US 2013/0317990 Al, pub. Nov. 28, 2013). Final Act. 9-10. ANALYSIS We have reviewed Appellant's arguments in the Briefs, the Examiner's rejections, and the Examiner's response to Appellant's arguments. Appellant's arguments have persuaded us of error in the Examiner's rejections of claims 1 through 12, 16 through 25, 31 through 42, and 45 through 55 under 35 U.S.C. Â§ I03(a) and of claims 1 through 12, 16 through 25, 31 through 42, and 45 through 55 under 35 U.S.C. Â§ 101. Double Patenting Rejection. Appellant states, on page 20 of the Appeal Brief that the Examiner's double patenting rejection has been obviated by a terminal disclaimer. The 3 The Examiner's statement of the rejection contains a typographical error in that it identifies canceled claims 43 and 44 as being rejected. 4 The Examiner's statement of the rejection contains a typographical error in that it identifies withdrawn claims 43 and 44 as being rejected. 4 Appeal2018-008448 Application 13/888,233 Examiner has not addressed this statement from Appellant, however we note the file history indicates Appellant filed a Terminal Disclaimer which was, received April 10, 2017 and has been approved. We decline to reach the provisional rejection. See Ex parte Moncla, 95 USPQ2d 1884, 1885 (BP AI 2010) (precedential). Rejection 35 U.S.C. Â§ 101. PRINCIPLES OF LAW Patent-eligible subject matter is defined in 35 U.S.C. Â§ 101 of the Patent Act, which recites: Whoever 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, subject to the conditions and requirements of this title. There are, however, three judicially created exceptions to the broad categories of patent-eligible subject matter in 35 U.S.C. Â§ 101: "[l]aws of nature, natural phenomena, and abstract ideas." Alice Corp. v. CLS Bank Int'!, 573 U.S. 208, 216 (2014); Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012). 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. Alice, 573 U.S. at 217-18 (citing Mayo, 566 U.S. at 75-77). 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. Kappas, 561 5 Appeal2018-008448 Application 13/888,233 U.S. 593, 611 (2010) ("Claims 1 and 4 in petitioners' application explain the basic concept of hedging, or protecting against risk."). 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 (Gottschalkv. 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; see also id. at 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. ( citing Benson and Flook); see, e.g., id. at 187 ("It is now commonplace that an application of a law of nature or mathematical formula 6 Appeal2018-008448 Application 13/888,233 to a known structure or process may well be deserving of patent protection."). If the claim is "directed to" an abstract idea, we tum to the second step of the Alice and Mayo framework, where "we must examine the 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. "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 United States Patent and Trademark Office "USPTO" recently published revised guidance on the application ofÂ§ 101. USPTO's January 7, 2019 Memorandum, 2019 Revised Patent Subject Matter Eligibility Guidance ("Memorandum"). Under that guidance, we first determine 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 Â§ 2106.05(a}-(c), (e}-(h)). Only if a claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application, do we then look to whether the claim: 7 Appeal2018-008448 Application 13/888,233 (3) adds a specific limitation beyond the judicial exception that is not "well-understood, routine, conventional" in the field (see MPEP Â§ 2106.0S(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 Memorandum. ANALYSIS The Examiner determines the claims are not patent eligible as they are directed to judicial exception without reciting significantly more. Final Act. 4. Specifically, the Examiner determines the claims are directed to the abstract idea of "managing/executing transactions for a party on behalf of another party using digital signatures, which is a method for organizing a human activity" and are steps that can be performed mentally or by pen and paper. Final Act. 4---6 ( citing several cases which the Examiner considers to show the court found similar ideas to be abstract). Thus, the Examiner concludes 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. Final Act. 8. Appellant argues the Examiner's rationale that the claimed steps could be performed mentally or by using a pen and paper is incorrect and does not 8 Appeal2018-008448 Application 13/888,233 seem to consider the use of an electronic security token, the once and twice- encapsulated data objects and first and second signatures as claimed. App. Br. 8-10. Additionally, Appellant argues the claims are necessarily rooted in computer technology as they overcome a problem arising in computer networks (i.e., hackers gaining access to account information to invoke unauthorized transactions), and as such are patent eligible. App. Br. 10-12 (citing DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014)). Appellant argues the claimed invention is not directed to an abstract idea of securing an cash channel for electronic funds transfer, but rather is an ordered combination of limitations relating to multiple encapsulation and de-encapsulation process of the security token where the sequence is coordinated with a particular transaction elements by various parties and as such is patent eligible. App. Br. 12-15 (citing BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016). Further, Appellant argues that Examiner has not provided a proper factual inquiry into what is well-understood, routine and conventional steps of using encapsulation in a security token as claimed. Reply Br. 5---6 (citing Berkheimer v. HP, Inc., 881 F.3d 1360 (Fed. Cir. 2018). Appellant's arguments have persuaded us of error in the Examiner's rejection of claims 1 through 12, 16 through 25, 31 through 42, and 45 through 55 as being directed to patent-ineligible subject matter. Here, even if the Examiner's determination that the claim is directed to an abstract idea was taken to be proper, we determine that the rejection is in error as the Examiner has not adequately shown that the claim limitations, when considered individually or as an ordered, concept are no more than routine steps which interact in well-known ways. 9 Appeal2018-008448 Application 13/888,233 Since the Examiner's Answer was mailed, the Federal Circuit, addressing step two of the Mayo/Alice framework in Berkheimer, has held that the question of whether a claim element or combination of elements is well-understood, routine, and conventional to a skilled artisan in the relevant field is a question of fact. Berkheimer, 881 F.3d at 1368. Shortly after the Federal Circuit issued its decision in Berkheimer, the USPTO issued an April 19, 2018 Memorandum to the Patent Examining Corps entitled, "Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.)" (the "Berkheimer Memorandum"), in which the Office revised the procedures set forth in the Manual of Patent Examining Procedure ("MPEP") Â§ 2106.07(a) (Formulating a Rejection For Lack of Subject Matter Eligibility) and MPEP Â§ 2106.07(b) (Evaluating Applicant's Response). Berkheimer Memorandum 3. Here, the requirements of the Berkheimer memo have not been adequately met to the specific nature of the claim at issue. Further, the Examiner does not sufficiently establish that the "ordered combination" of the recited elements also fails to "'transform the nature of the claim' into a patent-eligible application." Alice, 573 U.S. at 217. "[A]n inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces," even if these pieces constitute generic computer, network, and internet components. BASCOM, 827 F.3d at 1350. As discussed above, the Appellant argues the inventive concept is found in the encapsulation and de-encapsulation of an electronic security token and verifying the recovered information to control a transaction which makes the claims patent eligible. The Examiner, in the Final Action, 10 Appeal2018-008448 Application 13/888,233 identifies these steps as being part of the abstract idea of managing transactions, further that they are recited at a high level of generality and "simply perform the generic computer functions of transmitting, receiving, encapsulating, using, operating & comparing." Final Act. 5 and 7; Ans. 5 and 7. We consider these findings and responses insufficient to meet the evidentiary requirements set forth in Berkheimer. Each of independent claims 1 and 31 recite limitations directed performing two operations using two different signature systems to de-encapsulate data objects from a security token that comprises a once-encapsulated data object ( encapsulating a data object using a first digital signature) and a twice-encapsulated data object ( encapsulating a the once-encapsulated data object and another data object using a second digital signature), i.e., a specific ordered combination of elements. Thus, the claims, recite an order of steps to be performed on a security token containing once and twice-encapsulated data. The Examiner has cited to paragraph 14 of Appellant's Specification to show that the invention uses generic computers; however this cite is insufficient to demonstrate that encapsulating and de-encapsulating of a security token containing once and twice-encapsulated data are well-understood, routine, and conventional to a skilled artisan in the relevant field. As such the Examiner has not shown that the claimed recitation of an ordered combination of elements fails to transform the nature of the claim into a patent-eligible application. Accordingly, we do not sustain the Examiner's rejection of claims 1 through 12, 16 through 25, 31 through 42, and 45 through 55 under 35 U.S.C. Â§ 101 as being directed to patent-ineligible subject matter. 11 Appeal2018-008448 Application 13/888,233 Rejection 35 U.S.C. Â§ 103. Appellant argues on pages 20 through 23 of the Appeal Brief that the Examiner's rejection of claims 1 through 12, 16 through 25, 31 through 42, and 45 through 55 under 35 U.S.C. Â§ 103 is in error. Appellant addresses each of the references and asserts that neither of the references or the combination of the references teaches encapsulation of a subset (less than the whole) set of required transaction elements in a layer as claimed, specifically, the claimed security token with a twice-encapsulated data object. App. Br. 23; Reply Br. 9. The Examiner's rejection relies upon Atkinson to teach receiving a transaction element with a security token that has a once-encapsulated data object. Final Act. 11-14. The Examiner finds that Atkinson does not teach encapsulating the at least once encapsulating object and a second subset of transaction elements as claimed, but finds that Frisch does. Final Act. 14--15 ( citing Frisch Fig. 2, paras. 38--44 and 58). We have reviewed the teachings of Frisch and do not find that the cited portions of Frisch support the Examiner's findings of encapsulating a: first encapsulated object (in which is encapsulated a first subset of transaction elements using a first digital signature system) and a second subset of transaction elements different from the first subset, using a second digital signature system as recited in independent claims 1 and 31. Accordingly, we do not sustain the Examiner's rejection of claims 1 through 12, 16 through 25, 31 through 42, and 45 through 55 under 35 U.S.C. Â§ 103. 12 Appeal2018-008448 Application 13/888,233 DECISION We reverse the Examiner's rejection of claims 1 through 12, 16 through 25, 31 through 42, and 45 through 55 under 35 U.S.C. Â§ 101. We reverse the Examiner's rejection of claims 1 through 12, 16 through 25, 31 through 42, and 45 through 55 under 35 U.S.C. Â§ 103. REVERSED 13