Ex Parte Johnson

Patent Trial and Appeal BoardJan 29, 2019

12289674 (P.T.A.B. Jan. 29, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. FILING DATE FIRST NAMED INVENTOR 12/289,674 10/31/2008 75127 7590 01/31/2019 DENTONS US LLP (CITI CUSTOMER NUMBER) ATTN: Eric Sophir P.O. BOX 061080 CHICAGO, IL 60606-1080 William Johnson 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. CITI0332-US 2312 EXAMINER SUBRAMANIAN, NARAYANSWAMY ART UNIT PAPER NUMBER 3695 NOTIFICATION DATE DELIVERY MODE 01/31/2019 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): eric.sophir@dentons.com patents.us@dentons.com #sg.citi-docket@dentons.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte WILLIAM JOHNSON Appeal 2017-011308 Application 12/289,674 1 Technology Center 3600 Before ELENI MANTIS MERCADER, NORMAN H. BEAMER, and ADAM J. PYONIN, Administrative Patent Judges. BEAMER, Administrative Patent Judge. DECISION ON APPEAL Appellant appeals under 35 U.S.C. Â§ 134(a) from the Examiner's Non-Final Rejection of claims 1---6, 11, 12, and 14. We have jurisdiction over the pending rejected claims under 35 U.S.C. Â§ 6(b ). We affirm. 1 Appellant identifies Citibank, N. A. as the real party in interest. (App. Br. 1.) Appeal 2017-011308 Application 12/289,674 THE INVENTION Appellant's disclosed and claimed invention is directed to calculating and collecting a fee interchange adjustment as it relates to private label accounts, including enabling a private label card account with a partner by a card issuer through a card association network with a special program fee. (Abstract.) Independent claims 1 and 14, reproduced below, are illustrative of the subject matter on appeal: 1. A computer-implemented method comprising: receiving, by a card issuer processing system processor, transaction data with a merchant from a transaction terminal having a card reader through which a private label transaction card is swiped in connection with a transaction, the transaction data being transmitted to the card issuer processing platform processor from the card association processing system processor via an acquiring financial institution processor; determining, by the card issuer processing system processor, an established interchange fee for the transaction with the merchant; determining, by the card issuer processing platform processor, whether the merchant and an account for the private label transaction card are associated with a special program fee; calculating, by the card issuer processing platform processor, a difference between the established interchange fee and the special program fee; and generating and transmitting, by the card issuer processing platform processor, a message in a proprietary format of the card association processing system processor, the message comprising a reason code field and a message text field, wherein data in the reason code field represents a type of adjustment and data in the message text field represents a description of a purpose of the message and an identifier of the merchant, wherein the message is transmitted through the card 2 Appeal 2017-011308 Application 12/289,674 association processing system processor to an acquirer processor and instructs the acquirer processor to process an adjustment of an amount of the calculated difference for credit or debit to an account of the merchant at the acquirer processor. 14. A system comprising: an acquiring financial institution processor configured for maintaining a private label card account of a merchant; a card issuer platform processor configured for receiving transaction data with a merchant from a transaction terminal having a card reader through which a private label transaction card is swiped in connection with a transaction, the transaction data being transmitted to the card issuer platform processor from the card association network processor via the acquiring financial institution processor; determining an established interchange fee for the transaction with the merchant; determining whether the merchant and an account for the private label transaction card are associated with a special program fee; calculating a difference between the special program fee and the established interchange fee; and generating and transmitting a message in a proprietary format of the card association network processor, the message comprising a reason code field and a message text field, wherein data in the reason code field represents a type of adjustment and data in the message text field represents a description of a purpose of the message and an identifier of the merchant, wherein the message is transmitted through the card association network processor to the acquiring financial institution processor and instructs the acquiring financial institution processor to process an adjustment of an amount of the calculated difference for credit or debit to an account of the merchant at the acquiring financial institution processor; and a card association network processor configured for processing transactions using the private label card account at the merchant that were forwarded from the acquiring financial institution processor, transmitting the private label card account transactions to a card issuer platform processor, assessing the 3 Appeal 2017-011308 Application 12/289,674 standard interchange fee to the acquiring financial institution processor for transactions using the association card with the card association network processor, and transmitting the adjustment from the card issuer to the acquiring financial institution processor. REJECTIONS The Examiner rejected claim 14 under 35 U.S.C. Â§ 112, second paragraph, as being incomplete for omitting essential structural cooperative relationships. (Non-Final Act. 2.) The Examiner rejected claims 1---6, 11, 12, and 14 under 35 U.S.C. Â§ 101 because the claimed invention is directed to non-statutory subject matter. (Non-Final Act. 3.) ISSUES ON APPEAL Appellant's arguments in the Appeal and Reply Briefs present the following issues: 2 Issue One: Whether the Examiner erred in finding claim 14 indefinite as omitting essential structural cooperative relationships. (App. Br. 4--5.) Issue Two: Whether the Examiner erred in finding claims 1-6, 11, 12, and 14 as directed to non-statutory subject matter. (App. Br. 5-9.) 2 Rather than reiterate the arguments of Appellant and the positions of the Examiner, we refer to the Appeal Brief (filed May 12, 2017); the Reply Brief (filed Sept. 5, 2017); the Non-Final Office Action (mailed Sept. 13, 2016); and the Examiner's Answer (mailed July 5, 2017) for the respective details. 4 Appeal 2017-011308 Application 12/289,674 ANALYSIS We have reviewed the Examiner's rejections in light of Appellant's arguments. Arguments Appellant could have made but chose not to make are deemed to be waived. See 37 C.F.R. Â§ 41.37(c)(l)(iv). First Issue The Examiner finds claim 14 incomplete because the "structural cooperative relationship among the acquiring financial institution processor, the card issuer platform processor and the card association network processor is missing in the claim." (Non-Final Act. 2-3.) Appellant argues that the "relationships are expressly and positively recited" in the claim because claim 14 recites that the "card issuer platform processor configured for receiving transaction data ... being transmitted to the card issuer platform processor from the card association network processor via the acquiring financial institution processor" and "wherein the message is transmitted through the card association network processor to the acquiring financial institution processor and instructs the acquiring financial institution processor to process an adjustment of an amount of the calculated difference for credit or debit to an account of the merchant at the acquiring financial institution processor." (Reply Br. 2.) We are persuaded the Examiner errs, because Appellant demonstrates that claim 14 recites interrelationships among the acquiring financial institution processor, the card issuer platform processor, and the card association network processor sufficient to inform one skilled in the art of the nature of the relationships. Accordingly, we reverse the Examiner's 35 U.S.C. Â§ 112, second paragraph, rejection of claim 14. 5 Appeal 2017-011308 Application 12/289,674 Second Issue The Examiner determines the claims are patent ineligible under 35 U.S.C. Â§ 101, because the claims "are directed to interchange adjustment as it relates to private label accounts which is considered to be an abstract idea similar to the concepts that have been identified by the courts such as creating and fulfilling a contractual relationship," which is a fundamental economic practice. (Ans. 3; see also Alice Corp. Pty. Ltd. v. CLS Bank Int 'l, 573 U.S. 208,217 (2014) (Describing the two-step framework "for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.").) After the mailing of the Answer and the filing of the Briefs in this case, the USPTO published revised guidance on the application ofÂ§ 101. (2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (hereinafter "Memorandum").) Under the Memorandum, 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 interactions 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, does the Office then look to whether the claim: 6 Appeal 2017-011308 Application 12/289,674 (3) adds a specific limitation beyond the judicial exception that are 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. We are not persuaded the Examiner's rejection is in error. We adopt the Examiner's findings and conclusions as our own, and we add the following primarily for emphasis and clarification with respect to the Memorandum. Appellant argues the Examiner errs in determining the claims are directed to an abstract idea, and the claims are patent eligible "because they are directed towards improving the payment processing technology by reciting a specific computer architecture that provides a novel and specific set of computer-implemented rules to transfer funds to a merchant's account." (Reply Br. 4 (citing DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014)).) Appellant further contends "[t]he pending claims recite non-generic, non-routine, and non-conventional elements, which amount to significantly more than any abstract idea." (Reply Br. 6.) We agree with the Examiner that claim 1 is directed to an abstract idea. See Ans. 3. The recited steps of "receiving ... transaction data with a merchant," "determining ... an established interchange fee," "determining . .. whether the [the parties] are associated with a special program fee," "calculating ... a difference," and "generating and transmitting ... a message [that] instructs the acquirer processor to process an adjustment ... 7 Appeal 2017-011308 Application 12/289,674 for credit or debit" comprise fundamental economic principles or practices and/or commercial or legal interactions; thus, the claim is directed to the abstract idea of "certain methods of organizing human activity." (Memorandum, Section I ( Groupings of Abstract Ideas); see also Spec. ,r 11 ("[T]he card issuer is able to negotiate economics directly with its partners to facilitate some of that value, which may be less than what is standard for an association card or greater than what is standard for an association card.").)3 We are unpersuaded by Appellant's arguments that the claims recite "a specific computer architecture that provides a novel and specific set of computer-implemented rules" or "recite non-generic, non-routine, and non- conventional elements, which amount to significantly more than any abstract idea." While claim 1 recites a "card issuer processing system processor," "card issuer processing platform processor," "card association processing system processor," "acquiring financial institution processor," and "acquirer 3 See also Bilski v. Kappas, 561 U.S. 593, 611 (2010) ("The concept of hedging, described in claim 1 and reduced to a mathematical formula in claim 4, is an unpatentable abstract idea .... "); Alice, 573 U.S. at 218 ("These claims are drawn to the abstract idea of intermediated settlement."); buySafe, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (claims that "are squarely about creating a contractual relationship----a 'transaction performance guaranty"' held as "directed to an abstract idea"); Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1345 (Fed. Cir. 2013) ( claims reciting "generalized software components arranged to implement an abstract concept [ of generating insurance-policy-related tasks based on rules to be completed upon the occurrence of an event] on a computer" not patent eligible); Bancorp Servs., L.L. C. v. Sun Life Assur. Co. of Can. (US.), 687 F.3d 1266, 1277 (Fed. Cir. 2012) (determining a "'method for managing a life insurance policy comprising' seven steps" is abstract). 8 Appeal 2017-011308 Application 12/289,674 processor," Appellant points to nothing in the claim or in the disclosure that indicates (1) a particular computer system architecture, (2) non-generic, non- routine, and non-conventional elements are used to perform the method, or (3) any kind of technological improvement. No particular machine is claimed, in that the disclosure refers only to use of "processors coupled to memory and to other processors likewise coupled to memory via computer networks" and generic recitation of "computer program products." (Spec ,r 13.) Nor does the claim recite an additional element or elements that reflect an improvement in the functioning of a computer, or an improvement to other technology or technical field. See Ans. 9. Rather, the disputed limitations are part of the abstract idea itself. See Alice, 573 U.S. at 222 ("In holding that the process was patent ineligible, we rejected the argument that 'implement[ing] a principle in some specific fashion' will 'automatically fal[l] within the patentable subject matter ofÂ§ 101. "') ( alterations in original) (quoting Parker v. Flook, 437 U.S. 584, 593 (1978))).) Accordingly, we determine the claim does not integrate the judicial exception into a practical application. See Memorandum, Section III(A)(2) (Prong Two: If the Claim Recites a Judicial Exception, Evaluate Whether the Judicial Exception Is Integrated Into a Practical Application). Nor do we find the claim includes a specific limitation or a combination of elements that amounts to significantly more than the judicial exception itself. See Memorandum, Section III(B) (Step 2B: If the Claim Is Directed to a Judicial Exception, Evaluate Whether the Claim Provides an Inventive Concept); see also Aatrix Software, Inc. v. Green Shades Software, Inc., 890 F.3d 1354, 1359 (Fed. Cir. 2018) (Moore, J., concurring) ("the 'inventive concept' cannot be the abstract idea itself'). The remaining claim elements only 9 Appeal 2017-011308 Application 12/289,674 recite generic computer components that are well-understood, routine, and conventional. See Ans. 9; Spec. ,r 13 ("references herein to components, such as the issuer 130, the merchant-partner 140, the acquirer 150, the card association's processing system 160, and the issuer's processing platform include, without limitation, processors coupled to memory and to other processors likewise coupled to memory via computer networks"); Fig. 1; Alice, 573 U.S. at 212 ("merely requiring generic computer implementation fails to transform [the] abstract idea into a patent-eligible invention"). Accordingly, we agree with the Examiner that claim 1 is patent ineligible, as well as independent claims 12 and 14 not separately argued, and dependent claims 2---6 and 11 not separately argued. See App. Br. 9. CONCLUSION For the reasons stated above, we reverse the Examiner's indefiniteness rejection of claim 14. For the reasons stated above, we affirm the Examiner's non-statutory subject matter rejection of claims 1---6, 11, 12 and 14. 10 Appeal 2017-011308 Application 12/289,674 DECISION The Examiner's decision rejecting claim 14 under 35 U.S.C. Â§ 112, second paragraph, is reversed. The Examiner's decision rejecting claims 1-6, 11, 12, and 14 under 35 U.S.C. Â§ 101 is affirmed. No time period for taking any subsequent action in connection with this appeal may be extended under 3 7 C.F .R. Â§ 1.13 6( a )(1 )(iv). AFFIRMED 11