Ex Parte Understein

Patent Trial and Appeal BoardApr 13, 2016

13860821 (P.T.A.B. Apr. 13, 2016)

UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. FILING DATE 13/860,821 04/11/2013 23117 7590 04/15/2016 NIXON & V ANDERHYE, PC 901 NORTH GLEBE ROAD, 11 TH FLOOR ARLINGTON, VA 22203 FIRST NAMED INVENTOR Norman Understein 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. AMK-2802-52 6666 EXAMINER ROBINSON, KITO R ART UNIT PAPER NUMBER 3695 NOTIFICATION DATE DELIVERY MODE 04/15/2016 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): PTOMAIL@nixonvan.com pair_nixon@firsttofile.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte NORMAN UNDERSTEIN Appeal2016-002547 Application 13/860,821 1 Technology Center 3600 Before HUBERT C. LORIN, PHILIP J. HOFFMANN, and BRUCE T. WIEDER, Administrative Patent Judges. WIEDER, Administrative Patent Judge. DECISION ON APPEAL This is a decision on appeal under 35 U.S.C. Â§ 134 from the Examiner's rejection of claims 1-21. We have jurisdiction under 35 U.S.C. Â§ 6(b). We AFFIRM. CLAIMED SUBJECT MATTER Appellant's claimed "invention relates to systems and methods for processing a real estate settlement using dedicated deposit accounts." (Spec. ii 3.) 1 According to Appellants, the real party in interest is eDeposit Corporation. (Appeal Br. 3.) Appeal2016-002547 Application 13/860,821 Claims 1, 5, 11, 18, and 19 are the independent claims on appeal. Claim 1 is representative and reproduced below (emphasis added): 1. A method for processing a real estate settlement using a computer system including a processor programmed to carry out steps of the method and a communication network interface, the method comprising: (a) a settlement manager providing estimates for funds required from at least one of a buyer and a seller based on terms of the real estate settlement, wherein the settlement manager is neither the buyer nor the seller; (b) the settlement manager communicating hold requests to the at least one of the buyer and the seller, wherein the buyer and the seller have access to respective deposit accounts; ( c) the computer system enabling the at least one of the buyer and the seller to hold funds in the respective deposit accounts based on the estimates provided by the settlement manager, the computer system transforming the funds from available funds to held funds, wherein the held funds remain in the respective deposit accounts and show as deposits in the respective deposit accounts as a hold on behalf of the settlement manager but are otherwise unavailable to the buyer and the seller; ( d) the settlement manager determining final settlement amounts for the at least one of the buyer and the seller, and the settlement manager initiating multiple transactions to transfer the final settlement amounts to a corresponding multiple parties according to parameters of the real estate settlement; and ( e) after step ( d), when the final settlement amounts are less than the funds held in step ( c ), the computer system releasing any remaining held funds in the respective deposit accounts by re-transforming the remaining held funds to available funds. REJECTIONS Claims 1-21 are rejected under 35 U.S.C. Â§ 101 as being directed to non-statutory subject matter. 2 Appeal2016-002547 Application 13/860,821 Claims 1---6 and 9-21 are rejected under 35 U.S.C. Â§ 103(a) as being unpatentable over Hall (US 7,596,511 B2, iss. Sept. 29, 2009) and Lee (US 2003/0200118 Al, pub. Oct. 23, 2003). Claims 7 and 8 are rejected under 35 U.S.C. Â§ 103(a) as being unpatentable over Hall, Lee, and Understein (US 7,844,537 B2, iss. Nov. 30, 2010). ANALYSIS The Â§ 101 Rejection Claims 1-21 are rejected underÂ§ 101. The Examiner determines that the claims are directed to processing real estate settlement transactions which is considered to be an abstract idea inasmuch as such activity is considered both a fundamental economic practice and a method of organizing human activity by providing an opportunity for parties to enter into a specified agreement. The elements of the process are: providing a settlement manager that estimates funds; communicating a hold request, holding the funds, determining final settlement amounts and releasing any remaining funds in the account if settlement is less than the held funds. The elements of the instant process, when taken alone, each execute in a manner routinely and conventionally expected of these elements. The elements of the instant process, when taken in combination, together do not offer substantially more than the sum of the functions of the elements when each is taken alone. (Final Action 5.) Additionally, the Examiner determines that "[t]he claims relate to the concept of intermediated settlement which is a fundamental economic practice long prevalent in our system of commerce which is in the 3 Appeal2016-002547 Application 13/860,821 realm of abstract ideas identified by the Supreme Court." (Id. at 2; see Alice Corp. Pty Ltd. v. CLS Bank Int'!, 134 S. Ct. 2347 (2014).) Appellant disagrees and argues that the claimed invention is "entirely different from intermediated settlement as discussed in Alice." (Appeal Br. 15.) Specifically, Appellant argues that Alice relates to "a kind of electronic escrow where a third party holds 'real' money while 'shadow' balances are shown to both sides during trading." (Id. at 16.) The claimed invention, appellant argues, "utilizes novel computerized processes to eliminate the third party." (Id.) Claim 1 relates to holding funds sufficient to cover fees and a settlement manager initiating transactions to move the funds to and from accounts of the appropriate parties. In short, claim 1 closely parallels the intermediated settlement in Alice. In this case, the deposit accounts hold the funds until the settlement manager (acting like an intermediary) initiates the transactions to move the funds. Therefore, we agree with the Examiner that claim 1 is directed to an abstract idea. We next address whether "the elements of the claim ... contain[] an 'inventive concept' sufficient to 'transform' the claimed abstract idea into a patent-eligible application." See Alice, 134 S. Ct. at 2357 (citing Mayo, 132 S. Ct. at 1294, 1298). The Examiner determines that the settlement manager "simply perform[ s] the generic computer functions of receiving, processing and transmitting information" and that these "are well-understood, routine and conventional limitations that amount to mere instructions to implement the abstract idea." (Answer 4.) Specifically, the Examiner determines that "courts have recognized ... receiving, processing, and storing data, [and] 4 Appeal2016-002547 Application 13/860,821 electronic recordkeeping" as "well-understood, routine, and conventional" computer functions. (Id.) In short, "[g]eneric computers performing generic computer functions, alone, do not amount to significantly more than the abstract idea." (Id.) Appellant disagrees and, in arguing the "tremendous advantage" associated with the invention, argues that "[t]he claimed process could not be completed by hand, but rather requires a computer system so that transaction participants can effect fund holds that are subsequently accessible by a settlement manager." (Appeal Br. 17.) We are not persuaded that the process could not be completed by hand. The Specification recites that "[i]t would be desirable if the funds from each party needed to provide them were 'on hold' with a dedicated but personal account ... , and that each recipient of funds opened a registered account to receive the funds." (Spec. i-f 9.) In other words, buyer and seller may each set up an account. Another person, i.e., a settlement manager, may then take control of the accounts to hold and distribute funds as appropriate. Appellant further argues that "the computer system [of claim 1] utilizes the Internet to eliminate a third party in a conventional escrow context." (Appeal Br. 17.) Again, we disagree. Nothing in claim 1 requires the computer system to be connected to the Internet. For example, the settlement manager may be within a bank and the buyer and seller accounts also within the bank. Thus, the computer system could simply be an internal bank system performing the generic functions of such a computer system, i.e., holding and moving funds. Considered as an ordered combination, the steps of Appellant's method add nothing that is not already present when the steps are considered 5 Appeal2016-002547 Application 13/860,821 separately. Viewed as a whole, claim 1 simply recites the concept of "providing a settlement manager that estimates funds; communicating a hold request, holding the funds, determining final settlement amounts and releasing any remaining funds in the account if settlement is less than the held funds." (See Final Action 5.) The method claim does not, for example, purport to improve the functioning of the computer system itself. Nor does it effect an improvement in any other technology or technical field. Instead, the claim amounts to nothing significantly more than an instruction to apply the abstract idea. That is not enough to transform an abstract idea into a patent-eligible invention. See Alice 134 S. Ct. at 2360. Therefore, we are not persuaded that the Examiner erred in rejecting claim 1 under Â§ 101. Because claims 1-21 are argued together with regard toÂ§ 101 (Appeal Br. 15-19), claims 2-21 fall with claim 1. See 37 C.F.R. Â§ 41.37(c)(l)(iv). TheÂ§ 103 Rejection The Examiner relies on Lee for the disclosure of "a settlement manager communicating hold requests." (Final Action 7.) Appellant disagrees. (Appeal Br. 19.) Lee discloses a system for payment of medical claims: A system allows a health care provider to arrange payment at the time of service for a patient responsibility portion of a health care claim amount, even though the provider may not know what the patient responsibility portion will be until after adjudication. A health care debit card is associated with an account of the patient. At the time of service, the patient presents the card to the provider. The provider uses the card to authorize the system to hold an estimate of the patient responsibility amount in suspense in the patient's account. After adjudication, 6 Appeal2016-002547 Application 13/860,821 when the actual patient responsibility amount is known, a transaction set is sent to the system. The system then automatically transfers the actual patient responsibility amount from the patent's account and into the provider's bank account. Any remainder of the suspended funds is left in the patient's account. (Lee, Abstract.) The Examiner determines that "Appellant's claim limitation discloses the settlement manager communicating hold requests to the at least one of the buyer and the seller, where the buyer and the seller have access to respective deposit accounts. In other words, either the buyer or seller has a hold request on their account." (Answer 5.) Appellant replies that "[ t ]he method step requires the settlement manager to communicate a hold request" to the buyer and/or seller. (Reply Br. 3.) While Lee discloses that a hold request is placed on an account, the Examiner points to nothing in Lee disclosing that the hold request is communicated to the buyer and/or seller as opposed to simply being placed on the account. Also, the Examiner does not indicate that such a communication would have been obvious to one of ordinary skill in the art at the time. For these reasons, we are persuaded that the Examiner erred in rejecting claim 1 and dependent claims 2--4, 7-10, and 21 underÂ§ 103. Independent claims 5, 11, and 19 contain similar language and, therefore, we are also persuaded that the Examiner erred in rejecting those claims and dependent claims 6, 12-17, and 20, which depend respectively from claims 5, 11, and 19, underÂ§ 103. Independent claim 18 does not contain the "communicating" limitation of independent claims 1, 5, 11, and 19. However, claim 18 recites 7 Appeal2016-002547 Application 13/860,821 "wherein enabling the at least one of the buyer and the seller to hold funds comprises holding funds in amounts that exceed the estimates by a predetermined amount." Independent claim 5 contains similar language. Appellant argues that the Examiner contends that Lee discloses this subject matter, again referring to the Abstract, paragraph [0005] and claim 1. In no instance, however, does Lee reference securing funds in amounts that exceed an estimate by any such predetermined amount. Lee rather merely describes that the provider supplies an estimate of the patient responsibility amount to the system, and the patient's healthcare debit card is used to authorize the system to hold the estimated amount in suspense in the designated account of the patient. (Appeal Br. 21.) We agree with Appellant that the portions of Lee cited by the Examiner (see Final Action 8) do not disclose "holding funds in amounts that exceed the estimates by a predetermined amount." Also, the Examiner does not indicate that holding such excess funds \'l/ould have been obvious to one of ordinary skill in the art at the time. For these reasons, we are persuaded that the Examiner erred in rejecting claim 18 under Â§ 103 and additionally persuaded that the Examiner erred in rejecting independent claim 5 and dependent claim 6 under Â§ 103. Appellant's other arguments have been considered but are not deemed persuasive of error. DECISION The Examiner's rejection of claims 1-21under35 U.S.C. Â§ 101 is affirmed. 8 Appeal2016-002547 Application 13/860,821 The Examiner's rejections of claims 1-21under35 U.S.C. Â§ 103(a) are reversed. No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. Â§ 1.136(a)(l )(iv). AFFIRMED 9