Ex Parte Locasto et al

Patent Trial and Appeal Board

Dec 6, 2018

14305191 (P.T.A.B. Dec. 6, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/305,191 06/16/2014
148817 7590 12/10/2018
JPMorgan Chase / Calfee, Halter & Griswold
The Calfee Building
1405 East Sixth Street
Cleveland, OH 44114-1607
FIRST NAMED INVENTOR
Charles Locasto
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.
38079/04170 5549
EXAMINER
OYEBISI, OJO 0
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
12/10/2018 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):
ipdocket@calfee.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CHARLES LOCASTO, BALAJI RANGAN,
and JAMIE CERUTTI
Appeal2017-008163
Application 14/305, 191
Technology Center 3600
Before MAHSHID D. SAADAT, JENNIFER S. BISK, and
CARLL. SILVERMAN, Administrative Patent Judges.
SAADAT, Administrative Patent Judge.
DECISION ON APPEAL
Appellants 1 appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 29, 31--40, and 42-50, which are all the claims
pending in this application. 2 We have jurisdiction over the pending claims
under 35 U.S.C. § 6(b ).
We affirm.
1 Appellants identify JPMorgan Chase Bank, N.A. as the real party in
interest. App. Br. 2.
2 Claims 1-28, 30, and 41 have been previously canceled.
Appeal2017-008163
Application 14/305, 191
STATEMENT OF THE CASE
Introduction
Appellants' invention relates to a method and a system associated
with electronic funds transfers (EFTs) for "identifying country pairs
involved in financial transactions in order to evaluate risk of money
laundering activity with greater precision." Spec. ,r 9.
Exemplary Claim
Claim 29 is illustrative of the invention and reads as follows:
29. A computer-implemented method for improving
risk assessment for an EFT transaction, the transaction
occurring between EFT participants including an originating
participant and a destination participant, the method
compnsmg:
storing in at least one computer memory of a country
identification system, an alias table containing country
information for facilitating identification of a country
corresponding to at least one of the EFT participants;
receiving EFT data at an EFT processor operatively
connected with the country identification system over a
network, the EFT data identifying the originating participant
and the destination participant, but lacking accurate country
identification for at least one of the EFT participants, wherein
the EFT processor transmits the received EFT data over the
network to the country identification system;
executing instructions using a computer processor of the
country identification system to perform steps including;
accessing the alias table in the computer memory
of the country identification system to locate an exact
country match associated with the at least one EFT
participant;
upon failing to locate the exact country match in
the alias table stored in the computer memory of the
country identification system, performing a matching
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process to arrive at a country guess and storing the
country guess in the alias table;
creating an exception record for storing the
country guess;
periodically consolidating created exception
records to form an exception list;
providing feedback from the exception list to the
alias table and updating the alias table based on the
exception list, thereby improving country identification
over time;
determining a country pair involved in the
transaction based on the country guess derived from the
matching process; and
transmitting the country pair from the EFT
transaction over the network to a risk analysis system;
receiving at the risk analysis system, the country pair
identified by the country identification system;
evaluating a risk associated with the transaction based on
the country pair identified; and
assigning a rank to the evaluated risk, to determine if
generation of a suspicious activity report is required and to
reduce generation of false positive suspicious activity reports.
The Examiner's Rejection
Claims 29, 31--40, and 42-50 stand rejected under 35 U.S.C. § 101 for
being directed to patent-ineligible subject matter. See Final Act. 2--4.
ANALYSIS
We have reviewed the Examiner's rejection in light of Appellants'
arguments in the briefs that the Examiner has erred. We are unpersuaded by
Appellants' contentions and agree with and adopt the Examiner's findings
and conclusions in: (i) the action from which this appeal is taken (Final Act.
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2--4); and (ii) the Answer (Ans. 2-9) to the extent they are consistent with
our analysis below.
Principles of Law
The Patent Act defines patent-eligible subject matter broadly:
"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." 35 U.S.C. § 101. In Mayo Collaborative Servs.
v. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012), and Alice Corp. Pty. Ltd.
v. CLS Bankint'l, 134 S. Ct. 2347, 2354 (2014), the Supreme Court
explained that § 101 "contains an important implicit exception" for laws of
nature, natural phenomena, and abstract ideas. See Diamond v. Diehr,
450 U.S. 175, 185 (1981). In Mayo and Alice, the Court set forth a two-step
analytical framework for evaluating patent-eligible subject matter: First,
"determine whether the claims at issue are directed to" a patent-ineligible
concept, such as an abstract idea. Alice, 134 S. Ct. at 2355. If so, "consider
the elements of each claim both individually and 'as an ordered
combination' to determine whether the additional elements" add enough to
transform the "nature of the claim" into "significantly more" than a patent-
ineligible concept. Id. at 2355, 2357 (quoting Mayo, 566 U.S. at 79); see
Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257
(Fed. Cir. 2016).
Step one in the Mayo/Alice framework involves looking at the "focus"
of the claims at issue and their "character as a whole." Elec. Power Grp.,
LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016); Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). Step two involves
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the search for an "inventive concept." Alice, 134 S. Ct. at 2355; Elec. Power
Grp., 830 F.3d at 1353. An "inventive concept" requires more than "well-
understood, routine, conventional activity already engaged in" by the
relevant community. Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d
1042, 1047 (Fed. Cir. 2016) (quoting Mayo, 566 U.S. at 79--80). But "an
inventive concept can be found in the non-conventional and non-generic
arrangement of known, conventional pieces." BASCOM Glob. Internet
Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1350 (Fed. Cir. 2016).
Under step two, "an inventive concept must be evident in the claims."
RecogniCorp, LLC v. Nintendo Co., Ltd., 855 F.3d 1322, 1327 (Fed. Cir.
2017).
Mayo/Alice Step One
The Examiner rejects claims 29, 31--40, and 42-50 under 35 U.S.C.
§ 101 because they are directed to patent-ineligible subject matter. See Final
Act. 2--4. With respect to claim 29, the Examiner particularly determines
that:
In the instant case, the claim is directed towards the abstract
idea of improving risk assessment for an EFT transaction.
Improving risk assessment for an EFT transaction is a
fundamental economic practice; and as a result, claim 29
includes an abstract idea. The limitations in the claim that set
forth the abstract idea are: "a computer-implemented method
for improving risk assessment for an EFT transaction, the
method comprising: storing data; receiving EFT data; accessing
the alias table; creating data; providing data; determining a
country pair involved in the transaction; transmitting data; and
evaluating risk." The examiner contends that the recited steps
describe the concept of improving risk assessment for an EFT
transaction, which corresponds to concepts identified as abstract
ideas by the courts, such as risk hedging in Bilski; and as a
result, claim 29 includes an abstract idea.
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Final Act. 3.
Appellants contend the Examiner's assessment that the claims are
directed to an abstract idea is in error. App. Br. 12. 3 Appellants argue the
Examiner erred because, similar to the analysis in Enfzsh, the inquiry
regarding the claims of the present application should avoid characterization
of the claims in an "oversimplified" manner. App. Br. 13-14. Appellants
assert the Examiner has not considered the benefits of the invention
described in paragraphs 2-9 of Appellants' Specification, such as "identify
and report suspicious transactions to the appropriate authorities in their
respective country" by "efficiently and accurately identifying country pairs
involved in financial transactions in order to evaluate risk of money
laundering activity with greater precision." App. Br. 14--15. Additionally,
Appellants argue:
In the pending claims, several concrete steps are required ( and
recited) to carry out the method and system for automating
country determination for EFT participants in order to better
assess risks based on the origin and destination of a transaction
and reduce the instances of false positive generation of SARs,
and not all the hardware involved can be discounted as a
generic computer. See, e.g., claim 29 (requiring, inter alia,
components such as a computing system including a country
identification system, computer processors of the country
identification system, an EFT processor, a computer memory,
and a risk analysis system). A truly "abstract" idea is a concept
or theory by itself, incapable of physical implementation or not
truly requiring physical components. The present claims, on
the other hand, unequivocally require physical elements, and
3 Independent claim 29 recites a method and independent claim 40 recites a
system. Appellants argue claims as a group. App. Br. 12-26. We select
independent claim 29 as representative. The remaining claims stand or fall
with claim 29. See 37 C.F.R. § 4I.37(c)(l)(iv).
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such requirement alone is highly persuasive evidence the
invention is not abstract.
App. Br. 16. Appellants argue, similar to the claims in Enfzsh, their claims
"are directed to a very specific method and system for completely automated
country determination for EFT participants in order to better assess risks
based on the origin and destination of a transaction and reduce the instances
of false positive generation of [ suspicious activity reports] SARs." App. Br.
17.
Appellants' arguments do not persuade us of Examiner error. As
identified by the Examiner, the claim limitations that "set forth the abstract
idea are: 'a computer-implemented method for improving risk assessment
for an EFT transaction, the method comprising: storing data; receiving EFT
data; accessing the alias table; creating data; providing data; determining a
country pair involved in the transaction; transmitting data; and evaluating
risk."' Ans. 3.
We also agree with the Examiner that the focus of the claims is not on
improvements to computer-related technology, as in Enfish, and instead, the
claims as a whole "use computers as tools" and are directed to the concept of
risk assessment for EFT transactions, which are recognized as an abstract
idea. Id. In Enfzsh, "the plain focus of the claims is on an improvement to
[the] computer functionality itself." Enfzsh, 822 F.3d at 1336.
Implementing an abstract idea using a "physical machine" does not impart
patent eligibility. See Mayo, 566 U.S. at 84. In contrast, we do not find a
claimed focus on a specific technical improvement here. In other words,
Appellants' claims are directed to a process that qualifies as an abstract idea
for which computers are invoked merely as a tool for "storing data;
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receiving EFT data; accessing the alias table; creating data; providing data;
determining a country pair involved in the transaction; transmitting data; and
evaluating risk." See Ans. 3--4.
Therefore, we agree with the Examiner that claim 29 is directed to an
abstract idea.
Mayo/Alice Step Two
The Examiner finds the claimed elements use generic computer
components to perform generic computer functions, which do not "amount
to something 'significantly more' than the abstract idea." See Final Act. 3-
4. The Examiner particularly determines:
[T]he recited "analysis system" and "network" are recited at a
high level of generality to simply perform the generic computer
functions of receiving, processing, calculating, storing and
transmitting information. Thus, generic computer components
recited as performing generic computer functions that are well-
understood, routine and conventional activities amount to no
more than implementing the abstract idea with a computerized
system. Thus, taken alone, the additional elements do not
amount to significantly more than the above-identified judicial
exception (the abstract idea). Looking at the limitations as an
ordered combination of elements add nothing that is not already
present when looking at the elements taken individually. There
is no indication that the combination of the elements improves
the functioning of a computer or improves any other
technology. Their collective functions merely provide
conventional computer implementation.
Final Act. 4.
Appellants contend the Examiner erred in considering the claims as a
whole, which include elements that satisfy Mayo/Alice step two. App. Br.
18-19. Appellants assert that, in contrast with Enfish, "[ t ]he Examiner's
rejection, therefore, seems to be simply based upon the fact that
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embodiments of the invention comprise computer software, failing to
understand the detailed requirements of the claims as well as the purpose of
and benefits to the present claims." App. Br. 19. Appellants specifically
assert:
In other words, if, for the sake of argument, the claims
were somehow deemed to contain the "idea" of risk assessment,
the remaining detailed steps clearly remove the claim from the
realm of preemption. As noted above, the claimed invention
provides a comprehensive method and system for completely
automated country determination for EFT participants in order
to better assess risks based on the origin and destination of a
transaction and reduce the instances of false positive generation
of SARs, and the deficiencies of the prior art systems in this
regard are clearly set forth in the Specification. See, e.g.,
Specification at [0002]-[0009].
App. Br. 21. Appellants contend their claims are similar to
the claims in DDR Holdings[, LLC v. Hotels.com, L.P.,
773 F.3d 1245 (Fed. Cir. 2014)] that were found to recite
patent-eligible subject matter because the claims address the
specific problem of developing a common solution for
managing EFT transactions over a network. Prior to the use of
the Internet, there would have been no way to automate country
determination for EFT participants.
App. Br. 24.
DDR Holdings does not help Appellants. In DDR Holdings, the
Federal Circuit determined that certain claims satisfied Mayo/Alice step two
because "the claimed solution amount[ ed] to an inventive concept for
resolving [a] particular Internet-centric problem," i.e., a challenge unique to
the Internet. DDR Holdings, 773 F.3d at 1257-59; see Synopsys, Inc. v.
Mentor Graphics Corp., 839 F.3d 1138, 1151 (noting that "[i]n DDR
Holdings, we held that claims 'directed to systems and methods of
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generating a composite web page that combines certain visual elements of a
"host" website with content of a third-party merchant' contained the
requisite inventive concept"). In DDR Holdings, the Federal Circuit
explained that the patent-eligible claims specified "how interactions with the
Internet are manipulated to yield a desired result ... that overrides the
routine and conventional sequence of events ordinarily triggered by the click
of a hyperlink." DDR Holdings, 773 F.3d at 1258. The court reasoned that
those claims recited a technological solution "necessarily rooted in computer
technology" that addressed a "problem specifically arising in the realm of
computer networks." Id. at 1257.
Furthermore, the claims here do not achieve an improvement in
computer functionality. See Ans. 3-5. Appellants do not describe an
advance in hardware or software that, for example, causes a computer itself
or a database itself to perform electronic funds transfer functions more
efficiently. Appellants do not address the operation of a computer itself or a
database structure itself. Instead, Appellants discuss collecting real-world
information about different countries in a code table and matching the
country codes associated with transfers that allegedly solves "false positive
generation of SARs." App. Br. 21, Reply Br. 2 ( quoting Spec. ,r,r 2-9).
Further, the claims here do not recite a technological solution to a
technological problem specific to computer algorithms and networks, e.g.,
because they do not require any unconventional network configurations for
collecting and comparing country codes. App. Br. Al-A6 (Claims App.).
Rather, they require generic computer components for collecting and
verifying user data.
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We therefore are not persuaded that the claimed features are rooted in
computer technology because Appellants have not identified any limitations
in their claims or Specification that present a solution specific to the context
of computer processing or any automated processing of electronic fund
transfers that is specifically tailored for "risk assessment for an EFT
transaction" other than conventional components and network
configurations. See Spec. ,r,r 2-9, 48-59. We also disagree with Appellants'
reliance on BASCOM asserting that the Examiner has not provided evidence
to support the finding that the claimed structures are simply a general-
purpose device. Reply Br. 3--4. These arguments are conclusory because
the Examiner has given weight and analyzed the claim as a whole. See Final
Act. 3--4, Ans. 3-9.
Preemption
Appellants contend "the Examiner did not identify why or how these
claims, if allowed, would preempt an entire field of innovations" and instead
recite "a comprehensive method and system for completely automated
country determination for EFT participants in order to better assess risks
based on the origin and destination of a transaction" and do not "cover the
general idea of automating country determination for EFT participants."
App. Br. 20-22.
Appellants' contentions do not persuade us of Examiner error. See
Ans. 6-7 (addressing monopolization and preemption). While preemption
may denote patent ineligibility, its absence does not demonstrate patent
eligibility. See FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d
1089, 1098. For claims covering a patent-ineligible concept, preemption
concerns "are fully addressed and made moot" by an analysis under the
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Mayo/Alice framework. Ariosa Diagnostics, Inc. v. Sequenom, Inc.,
788 F.3d 1371, 1379 (Fed. Cir. 2015).
CONCLUSION
For the reasons discussed above, Appellants' arguments have not
persuaded us of any error in the Examiner's findings or conclusions under
Mayo/Alice step one or step two. Hence, we sustain the§ 101 rejection of
claim 29 and claims 31--40, and 42-50 falling therewith.
DECISION
We affirm the Examiner's decision to reject claims 29, 31--40, and
42-50.
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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