Ex Parte Kelly-Frank et al

Patent Trials and Appeals Board

Feb 4, 2019

11642340 - (D) (P.T.A.B. Feb. 4, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/642,340 12/20/2006
98665 7590 02/04/2019
Otterstedt, Ellenbogen & Kammer, LLP
P.O. Box 381
Cos Cob, CT 06807
FIRST NAMED INVENTOR
Carole Kelly-Frank
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.
P00145-US-UTIL 2256
EXAMINER
HOAR, COLLEEN A
ART UNIT PAPER NUMBER
3621
MAIL DATE DELIVERY MODE
02/04/2019 PAPER
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.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CAROLE KELLY-FRANK, SARA FIEBIGER,
ANANT NAMBIAR, and JULIE WANG
Appeal2017-008809
Application 11/642,340
Technology Center 3600
Before ANNETTE R. REIMERS, JILL D. HILL, and
LISA M. GUIJT, Administrative Patent Judges.
REIMERS, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE 1
Carole Kelly-Frank et al. ("Appellants") appeal under 35 U.S.C.
§ 134(a) from the Examiner's decision to reject claims 1-8 and 11-28 under
35 U.S.C. § 101 as being directed to patent-ineligible subject matter, and
1 The subject application was previously before the Patent Trial and Appeal
Board in Appeal No. 2012-007721. See Decision ("Dec.") dated Sept. 30,
2014. In that Decision, the adverse decision of the Examiner was
REVERSED. Following that Decision, Appellants reopened prosecution and
further amended the claims.
Appeal2017-008809
Application 11/642,340
under 35 U.S.C. § I03(a) as unpatentable over Strock (US 2004/0122736
Al, published June 24, 2004) and Swartz (US 2005/0040230 Al, published
Feb. 24, 2005). Claims 9, 10, and 29-32 have been canceled. We have
jurisdiction under 35 U.S.C. § 6(b ).
We AFFIRM.
CLAIMED SUBJECT MATTER
The claimed subject matter "relates generally to electronic commerce,
and, more particularly, to electronic payment systems." Spec. 1: 11-12; Figs.
1, 3, 4. Claims 1, 26, 27, and 28 are independent.
Claim 1 is illustrative of the claimed subject matter and recites:
1. A computer-implemented method for coordinating
transaction data for targeted offer generation, said transaction
data being associated with a payment card of a holder, said
payment card being usable in a payment card processing network
connecting acquirers of multiple merchants with issuers, at least
for processing of chip card transactions, said method comprising
the steps of:
facilitating opt-in to a cardholder offer generation scheme;
obtaining, over said payment card processing network,
from a given one of said merchants, via one of said acquirers, as
an addendum record in a file associated with a periodic batch
clearing operation of said payment card processing network,
transaction data associated with a transaction conducted with
said card at a terminal of said given one of said merchants, said
transaction data comprising:
attribute data indicative of an attribute of at least one item
purchased in said transaction, said attribute data having been
obtained by said terminal of said given one of said merchants
scanning said at least one item with at least one of a bar code
scanner and a radio frequency identification tag reader; and
an account number of said card, said account number
identifying said holder, said account number having been
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obtained by said terminal of said given one of said merchants
reading said card;
storing at least said attribute data in a data warehouse of
said payment card processing network, in association with said
account number identifying said holder, in a form for subsequent
data mining thereon;
repeating said steps of (i) obtaining said transaction data,
and (ii) storing, for a plurality of transactions at said multiple
merchants, to generate a cross-transaction, cross-entity, actual-
product-purchased-based data warehouse profile of said holder;
and
generating a non-real-time offer to said holder, said offer
being based, at least in part, on data mining performed on said
data warehouse profile, said offer being generated by an operator
of said payment card network.
ANALYSIS
Patent-Ineligible Subject Matter
Claims 1---8 and 11-28
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
ideas" are not patentable. E.g., Alice Corp. v. CLS Bankint'l, 573 U.S.
208, 216 (2014) ("Alice").
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 Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75-77 (2012) ("Mayo")). 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
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settlement risk."); see also Bilski v. Kappas, 561 U.S. 593, 611 (2010)
("Bilski") ("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)
("Flook")); and mental processes (Gottschalkv. Benson, 409 U.S. 63, 69
(1972) ("Benson")). Concepts determined to be patent eligible include
physical and chemical processes, such as "molding rubber products"
(Diamond v. Diehr, 450 U.S. 175, 192 (1981) ("Diehr")); "tanning, dyeing,
making waterproof cloth, vulcanizing India rubber, smelting ores" (id. at 184
n.7 (quoting Corning v. Burden, 56 U.S. 252, 267---68 (1854))); 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 192 ("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
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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 ( quotation marks omitted). "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 PTO recently published revised guidance on the application of§
101. USPTO's January 7, 2019 Memorandum, 2019 Revised Patent Subject
Matter Eligibility Guidance ("Memorandum"). Under that guidance, we
first look 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 § 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:
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(3) adds a specific limitation beyond the judicial exception that
are 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.
See Memorandum.
In this case, the Examiner determines the claims "describe[] the
concept of gathering and combining data by reciting steps of organizing
information" and that "obtaining, data gathering, storing, and associating of
data to generate additional data to compute a price idea is similar to the basic
concept of manipulating information using mathematical relationships ... ,
which has been found by the courts to be an abstract idea." Final Act. 2. 2
The Examiner also determines "[ t ]he claim[ s] amount[] to no more than
calculating, associating, and storing data on a computer and sending it over a
network [ and that] [ t ]hese generic computing elements alone do not amount
to significantly more than the judicial exception. The claim[ s are] not patent
eligible." Id. at 3.
Appellants argue claims 1-8 and 11-28 as a group. See Appeal Br.
25-28. 3 We select claim 1 as the representative claim, and claims 2-8 and
11-28 stand or fall with claim 1. 37 C.F.R. § 4I.37(c)(l)(iv).
Appellants contend "[ u ]nder the holdings of Enfzsh and MCRO, the
claims are ... not abstract ab initio." Appeal Br. 27. 4 In particular,
2 Final Office Action ("Final Act."), dated Feb. 19, 2016.
3 Appeal Brief ("Appeal Br."), filed Dec. 13, 2016.
4 Enfzsh, LLC v. Microsoft Corp., 822 F.3d at 1327, 1335 (Fed. Cir. 2016)
("Enfish"); McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299
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Appellants contend "the claims are directed to a specific technological
manner of gathering transaction data from payment card transactions,"
wherein, "[t]he specific technological manner involves using the payment
card processing network itself to collect the data as an addendum record in
a file associated with a periodic batch clearing operation of the payment
card processing network." Appeal Br. 26. Appellants contend "payment
card processing networks have generally been limited to sending financial
data associated with a transaction ( e.g., account number and transaction
amount) and not any data on actual products purchased (attribute data)," and
that one or more embodiments of the subject application "achieve
enhancement to computational and communications efficiency by passing
transaction data needed for marketing through the payment system
infrastructure, with offer generation by the payment card network operator
- precisely the kind of invention found not abstract ab initio in Enfish."
Id.; see also Reply Br. 36. 5
Referencing MCRO, Appellants contend the Examiner
mischaracterizes "the specific technological manner of gathering
transaction data from payment card transactions including using the
payment card processing network itself to collect the data as an addendum
record in a file associated with a periodic batch clearing operation o(the
payment card processing network as mere 'generic computing elements."'
Id. According to Appellants, "the claimed technique is novel and
unobvious, and provides the technological benefit of enhancement to
(Fed. Cir. 2016) ("McRO").
5 Reply Brief ("Reply Br."), filed May 31, 2017.
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computational and communications efficiency." Appeal Br. 26-27; see also
Reply Br. 38
As an initial matter, the Supreme Court has stated that "patents that. ..
integrate the building blocks [of human ingenuity] into something more,
[]thereby transform[ing] them into a patent-eligible invention ... pose no
comparable risk of pre-emption, and therefore remain eligible for the
monopoly granted under our patent laws." Alice, 134 S. Ct. at 2354-55
( citations and quotations omitted). Although preemption "might tend to
impede innovation more than it would tend to promote it, 'thereby thwarting
the primary object of the patent laws"' (id. at 2354 (citing Mayo, 132 S. Ct.
at 1293)), "the absence of complete preemption does not demonstrate patent
eligibility." Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1379 (Fed. Cir. 2015); see also OIP Techs., Inc. v. Amazon.com, Inc., 788
F.3d 1359, 1362-63 (Fed. Cir. 2015) ("[T]hat the claims do not preempt all
price optimization or may be limited to price optimization in the e-
commerce setting do not make them any less abstract."). Thus, even
assuming claim 1 recites a particular application of "obtaining attribute data"
(see Appeal Br. 25-28}--such that claim 1 does not preempt the entirety of
the identified abstract idea-that does not demonstrate that claim 1 is
directed to patent-eligible subject matter.
As to step one of the Alice framework, we determine "whether the
focus of the claims is on the specific asserted improvement in computer
capabilities ... or, instead, on a process that qualifies as an 'abstract idea'
for which computers are invoked merely as a tool." Enfzsh, 822 F.3d at
1335-36; see also McRO, 837 F.3d at 1314 (The claims were directed to "a
specific asserted improvement in computer animation, i.e., the automatic use
of rules of a particular type."). The subject application is directed to certain
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methods of organizing human activity, specifically, commercial interactions,
such as, identifying concepts relating to tracking or organizing information.
See Memorandum; see also MPEP § 2106.04(a)(2). The claims of the
subject application are similar to the claims of the web page system in
Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363 (Fed.
Cir. 2015) ("Intellectual Ventures I"). See MPEP § 2106.04(a)(2).
In Intellectual Ventures I, the claimed invention was directed to a
system for providing web pages tailored to an individual user, comprising an
interactive interface having a display that depicts customized content based
on information known about the user. Id. at 1369. The Federal Circuit
determined that the claimed customization was an abstract idea. In
particular, the court described the customization of tailoring content based
on user information as similar to how "newspaper inserts had often been
tailored based on information known about the customer-for example, a
newspaper might advertise based on the customer's location." Id. Likewise,
in the subject application, the cardholder offer generation scheme of claim 1
is based on attribute data indicative of an attribute of at least one item
purchased by a cardholder in a transaction (tailored content based on
information known about the cardholder).
Additionally, the limitations at issue are not directed to an
improvement of a computer's functionality. There is nothing recited in
claim 1 to suggest that, once attribute data is obtained as an addendum
record in a file, the function of a machine or computer used to implement the
claimed steps will be improved. Instead, like the claims in Electric Power,
claim 1 relates to a purported advance in uses for existing computer
capabilities, not new or improved computer capabilities. See Electric Power
Grp., LLC v. Alstom S.A, 830 F.3d 1350, 1353-1354 (Fed. Cir. 2016)
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("Electric Power") (Explaining that an invention directed to the collection,
manipulation, and display of data is an abstract process.); see also Content
Extraction and Transmission LLC v. Wells Fargo Bank, National Ass 'n, 776
F.3d 1343, 1347 (Fed. Cir. 2014) (holding the concept of "1) collecting data,
2) recognizing certain data within the collected data set, and 3) storing that
recognized data in a memory" abstract).
Having determined that claim 1 is directed to an abstract idea, we
must determine whether the additional elements of the claim transforms it
into patent-eligible subject matter under step two of the Alice framework.
Appellants contend in Amdocs (Israel) Limited v. Openet Telecom,
Inc., Appeal 2015-1180 (Fed. Cir. November 1, 2016) ("Amdocs"), the
Federal Circuit held that "the use of even arguably generic components in an
unconventional manner that resulted in reduced data flows, which was not
preemptive,provided the 'significantly more' required by Alice part two"
and that in the subject application "an unconventional use is being made of
the clearing process, to send the attribute data, in a manner that enhances
communications efficiency." Appeal Br. 28 (citing Amdocs, slip op. at 23-
25 and Spec. 6:4--8); see also Reply Br. 37, 40.
We acknowledge Appellants' position that Amdocs meets Alice step
two by providing an unconventional manner that results in "reduced data
flow," which would enhance computer and communication efficiency. See
Appeal Br. 28. However, Appellants do not apprise us as to how obtaining
attribute data as an addendum record in a file in a clearing process, as called
for in claim 1, would enhance computer and communication efficiency. See
Appeal Br. 27-28. Stated differently, Appellants do not apprise us as to how
sending/transmitting attribute data (i.e., additional data/information) over a
network in the form of an addendum record in a file associated with a
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clearing process would enhance computer and communication efficiency.
See Appeal Br. 27-28.
As to step two of the Alice framework, we agree with the Examiner
that the elements of claim 1, considered both individually and as an ordered
combination, do not transform the nature of the claim into a patent-eligible
application of the abstract idea. See Ans. 13 ("[T]he claims are not
significantly more than recitations of a judicial exception."). "[M]ere ...
generic computer implementation" of an abstract idea does not transform the
abstract idea into patent-eligible subject matter. Alice, 134 S. Ct. at 2357.
Here, the claims do not require any specialized technology or device, but
only generic computer equipment. In fact, Appellants' Specification
describes that the "[ s ]oftware includes but is not limited to firmware,
resident software, microcode, etc." Spec. 20:14--15 (emphasis added). In
DDR Holdings, the court held that claims "necessarily rooted in computer
technology in order to overcome a problem specifically arising in the realm
of computer networks," such as the Internet, were patent eligible. DDR
Holdings, LLC v. Hotels.com, 773 F.3d 1245, 1257 (Fed. Cir. 2014) ("DDR
Holdings"); see also Appeal Br. 27; Reply Br. 38; Ans. 12.
Here, however, claim 1 does not recite a specific technological
solution to a specific problem unique to the Internet, as was the case in DDR
Holdings; see also Electric Power, 830 F.3d at 1355 (Claim elements that
require no more than conventional computer, network, and display
technology are insufficient to constitute "an inventive concept in the
application of an abstract idea."); Ans. 12 ("[T]he claims use a conventional,
general purpose computer to perform generic computer functions, i.e.,
accessing memory, receiving and storing data, processing to manipulate
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some data, and outputting data. The use of the claimed addendum record
does not solve a uniquely technical problem.").
For the above reasons, we sustain the Examiner's rejection of claim 1
as being directed to patent-ineligible subject matter. We further sustain the
rejection of claims 2-8 and 11-28, which fall with claim 1.
Res Judicata
Appellants contend "the Examiner is, in effect, seeking to re-litigate
questions of obviousness already decided by the Board in this very case."
Appeal Br. 11; see also Reply Br. 11. In the Board Decision dated
September 30, 2014, the Examiner relied on Swartz for disclosing the step of
"facilitating storage, for a plurality of transactions [i.e., purchases] at a
plurality of sales entities [i.e., merchants] .... " See Dec. 2--4, 7. The Board
agreed with Appellants that "the offers in Swartz are not based on a data
warehouse profile based on product data for products purchased at multiple
merchants." Id. at 7 (citing Reply Br. 9). Thus, the Board determined the
Examiner failed to establish by a preponderance of the evidence that the
combined teachings of Swartz and Strock render obvious the method of
claim 1 and the method/apparatus of additional claims. Id. at 7-8. 6
As mentioned above, subsequent to the Board's Decision, Appellants
amended the claims. See Appeal Br. 12-14; see also Reply Br. 11; Ans. 3. 7
In the current case, the Examiner relies on the teachings of Strock, not
6 In the Decision, the Board did not hold claim 1 or any of the claims to be
"allowable." See Appeal Br. 11. Rather, the Board held the Examiner failed
to meet the initial burden of establishing a prima facie case of obviousness
over the cited prior art. See Dec. 7-8.
7 Examiner's Answer ("Ans."), dated Mar. 31, 2017.
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Swartz, for disclosing the step of "storing, for a plurality of transactions at
said multiple merchants .... " See Final Act. 5; see also Ans. 3--4. As the
Examiner now relies on the teachings of Strock, not Swartz, for the
limitation in question in the prior Board Decision, we do not agree with
Appellants that the Examiner is attempting to re-litigate questions of
obviousness already decided by the Board in this case. See Appeal Br. 11-
14; see also Reply Br. 11; Final Act. 5; Ans. 3--4.
Obviousness over Strock and Swartz
Claims 1-8 and 11-28
Independent claim 1 is directed to a computer-implemented method
for coordinating transaction data for targeted offer generation including the
step of obtaining over a payment card processing network as an addendum
record in a file associated with a periodic batch clearing operation of the
payment card processing network attribute data indicative of an attribute of
at least one item purchased in a transaction. See Appeal Br. 30, Claims App.
Appellants acknowledge paragraph 20 of Strock, as cited by the
Examiner, "involve[ s] card processing, and thus conventional clearing ...
would occur at some point ('clearing' is a term of art in the payment card
processing field)." Appeal Br. 18; see also Final Act. 4. However,
Appellants contend the prior art of Strock and Swartz, even if combined as
purported by the Examiner, "is silent as to obtaining transaction data
including attribute data indicative of an attribute of at least one item
purchased in the transaction via the payment card processing network in
the specific technological manner claimed (attribute data as an addendum
record in a batch clearingfile)." Appeal Br. 18-19; see also id. at 17
("[NJ either reference makes the slightest mention or suggestion of including
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attribute data as an addendum record in a batch clearingfile.").
In this case, we agree with Appellants that the portions of Strock cited
by the Examiner (i.e., paragraphs 31, 49, 66-71, 81, 104, 126, 138-142,
151-153, 195) fail to teach or suggest obtaining/transmitting transaction data
as an addendum record in a file associated with a periodic batch clearing
operation of the payment card processing network. See Reply Br. 17-20;
see also Ans. 6.
The Examiner relies on the teachings of Swartz for disclosing
"attribute data" and finds that "Swartz specifically teaches batch mode for
downloads of pricing information as well as messaged tailored for the
particular customer (Sw: Page 6, Para 68) and a batch mode embodiment
(Sw: Page 18, Para 180)." See Final Act. 5---6; see also Ans. 6; Reply Br. 19.
The "batch mode" of Swartz refers to the customer being able "[to] enter a
store and synchronize his portable terminal by placing it in a cradle at the
store or at his home computer before going to the store," wherein "[t]he
portable terminal includes a communications port that links to a
communications port on the cradle enabling the bidirectional communication
of data," as opposed to being connected to a wireless network. See Swartz ,r
67.
Under the broadest reasonable interpretation, we acknowledge
Swartz's "batch mode" may be considered a "batch clearing operation."
However, the Examiner fails to apprise us as to how such a "batch clearing
operation" suggests and/or is indicative of obtaining/transmitting attribute
data as an addendum record in a batch clearing file. See Ans. 5-7; see also
Reply Br. 17-20; Appeal Br. 30, Claims App. In addition, as Swartz
discloses that the "batch mode" is not connected to a wireless network, we
fail to see how such a "batch clearing operation" can be obtained "over [a]
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payment card processing network." See Ans. 5-7; see also Reply Br. 17-20;
Appeal Br. 30, Claims App.; Swartz ,r 67. Thus, the Examiner fails to
provide sufficient evidence or technical reasoning to establish that the
combined teachings of Strock and Swartz disclose attribute data
obtained/sent over a payment card processing network as an addendum
record in a batch clearing file, as called for in claim 1.
Independent claims 26-28 include similar limitations directed to
attribute data being obtained/sent over a payment card processing network as
an addendum record in a batch clearing file, and thus, the Examiner's
findings with respect to Strock and Swartz are deficient for those claims as
well. See Appeal Br. 33-36; Final Act. 4---6; Ans. 5-7.
For the above reasons, we do not sustain the Examiner's rejection of
claims 1-8 and 11-28 as unpatentable over Strock and Swartz.
DECISION
We AFFIRM the decision of the Examiner to reject claims 1-8 and
11-28 as being directed to patent-ineligible subject matter.
We REVERSE the decision of the Examiner to reject claims 1-8 and
11-28 as unpatentable over Strock and Swartz.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv).
AFFIRMED
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