MasterCard International Incorporated

Patent Trials and Appeals Board

Jul 2, 2020

2020000385 (P.T.A.B. Jul. 2, 2020)

UNITED STATES PATENT AND TRADEMARK OFFICE
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
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
13/936,981 07/08/2013 Trevor Scott Owen 21652-00278 5143
75564 7590 07/02/2020
DANIEL M. FITZGERALD (21652)
ARMSTRONG TEASDALE LLP
7700 Forsyth Boulevard
Suite 1800
St. Louis, MO 63105
EXAMINER
ALLADIN, AMBREEN A
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
07/02/2020 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):
USpatents@armstrongteasdale.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte TREVOR SCOTT OWEN
Appeal 2020-000385
Application 13/936,981
Technology Center 3600
Before MAHSHID D. SAADAT, ELENI MANTIS MERCADER, and
LINZY T. McCARTNEY, Administrative Patent Judges.
MANTIS-MERCADER, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1–3, 5–9, 11–13, 15–22, and 24–28,
which are all the claims pending. We have jurisdiction under
35 U.S.C. § 6(b).
We affirm.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42(a). Appellant identifies the real party in interest as
MasterCard International Incorporated. Appeal Br. 1.
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Application 13/936,981
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CLAIMED SUBJECT MATTER
The claims are directed to a network-based method and system for
managing personal records associated with payment transactions. See Spec.
¶ 1.
Claim 1, reproduced below, is illustrative of the claimed
subject matter:
A computer-implemented method for processing a
payment transaction and a personal record associated with the
payment transaction, the payment transaction initiated by a
cardholder, said method implemented by a host computing
device communicatively coupled to a memory and an electronic
payment interchange network, said method comprising:
receiving, at the host computing device, at least one
signal and cardholder data from a cardholder computing device,
wherein the at least one signal includes a transaction type
identifier, and wherein the cardholder data includes input
cardholder verification information and a cardholder identifier;
verifying, by the host computing device, the cardholder
identifier by comparing the input cardholder verification
information with stored cardholder verification information in
the memory;
determining a payment account associated with the
cardholder and a transaction type based on the transaction type
identifier;
receiving, at the host computing device in response to
determining that the transaction type is a payment card
transaction, payment transaction data including a service
provider identifier of a first service provider and a payment
transaction amount, wherein the payment transaction data is
received from at least one of the cardholder computing device
and a first service provider computing device associated with
the first service provider;
verifying, by the host computing device, an identity of
the first service provider by comparing the service provider
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Application 13/936,981
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identifier of the first service provider with a list of valid service
provider identifiers stored in the memory;
transmitting, by the host computing device, a payment
card transaction authorization request to the electronic payment
interchange network;
receiving, by the host computing device in response to
the payment card transaction authorization request, a payment
card transaction authorization response from the electronic
payment interchange network indicating that the payment
transaction has been authorized;
transmitting a confirmation message to the cardholder
computing device and the first service provider computing
device, the confirmation message confirming that the payment
transaction has been approved, the payment transaction
corresponding to the first service provider supplying a first item
purchased as part of the approved payment transaction;
identifying one or more personal records stored in the
host computing device memory and associated with at least one
of the first service provider and the first item, the one or more
personal records being different than the stored cardholder
verification information;
prompting the cardholder computing device to perform
one or more personal record transactions associated with the
one or more identified personal records;
processing, in response to receiving an acceptance of the
prompt, the one or more personal record transactions, wherein
processing the one or more personal record transactions
includes transmitting an electronic copy of a personal record
from the host computing device to a second service provider
computing device corresponding to a second service provider;
and
displaying at least one of the one or more identified
personal records to the second service provider computing
device,
wherein the second service provider is the same as the
first service provider or different than the first service provider.
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See Appeal Br. 14–15 (Claims App.)

REJECTION
Claims 1–3, 5–9, 11–13, 15–22, and 24–28 are rejected under
35 U.S.C. § 101 as unpatentable as directed to a judicial exception (e.g., a
law of nature, a natural phenomenon, or an abstract idea) without the claim
amounting to significantly more than the exception itself. Final Act. 2–11;
Ans. 3–12.
DISCUSSION
Patent Subject Matter Eligibility
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 U.S. 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 Bank Int’l, 573
U.S. 208, 216 (2014).
The Examiner finds that claims 1–3, 5–9, 11–13, 15–22, and 24–28
are patent ineligible under 35 U.S.C. § 101, “because the claimed invention
is directed to an abstract idea without significantly more.” Final Act. 2. In
particular, the Examiner finds that
[t]he series of steps recited describe processing a
payment transaction and a personal record associated with the
payment transaction via a series of steps which is describing
fundamental economic practices and commercial or legal
interactions and is thus grouped as certain methods of
organizing human activity which is an abstract idea.
Id. at 3.
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In determining whether a claim falls within an excluded category, we
are guided by the Court’s two-part 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)). 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. Kappos, 561 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 (Gottschalk v. Benson, 409 U.S. 63, 67 (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 waterproof 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
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 187; 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 Court
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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. (citation omitted)
(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 to a known
structure or process may well be deserving of patent protection.”).
If the claim is “directed to” an abstract idea, we turn 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. (alterations in original) (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.
Subsequent to the filing of the Appeal Brief, the USPTO published
updated guidance on the application of § 101 (“Guidance”). See USPTO’s
2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50
(Jan. 7, 2019) (“Memorandum”); USPTO October 2019 Update: Subject
Matter Eligibility (Oct. 17, 2019) (“Update”), noticed at 84 Fed. Reg. 55942
(Oct. 18, 2019).
Pursuant to the Guidance “Step 2A,” the Office first looks to whether
the claim recites:
(1) Prong One: any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
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Application 13/936,981
7
organizing human activity such as a fundamental economic practice,
or mental processes); and
(2) Prong Two: additional elements that integrate the judicial exception
into a practical application (see MPEP § 2106.05(a)–(c), (e)–(h) (9th
Ed., Rev. 08.2017 (Jan. 2018))).

Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, does the Office then
(pursuant to the Guidance “Step 2B”) look to whether the claim:
(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, 84 Fed. Reg. at 54–56.
Guidance Step 2A, Prong One
Under Step 2A of the Guidance, the Office first looks to “evaluate
whether the claim recites a judicial exception, i.e., an abstract idea.”
Memorandum, 84 Fed. Reg. 54.
The Examiner finds, the steps of receiving, comparing, transmitting
and displaying data are all abstract processes. Ans. 14. The Examiner finds
that the series of steps recited in claim 1 describe processing a payment
transaction and a personal record associated with the payment transaction
via a series of steps describe fundamental economic practices and
commercial or legal interactions and thus, falls under certain methods of
organizing human activity which is an abstract idea. Final Act. 4; Ans. 5.
The Examiner concludes, that processing a payment transaction and a
personal record associated with the payment transaction falls squarely into
the category of certain methods of organizing human activity as a
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Application 13/936,981
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fundamental economic principle or practice (processing payment
transactions) and/or commercial or legal interactions (business relations
and/or sales activities). Ans. 13.
Our reviewing court has concluded that classifying and storing data in
an organized manner is a well-established “basic concept” sufficient to fall
under Alice step 1. In re TLI Commc’ns LLC, 823 F.3d 607, 613
(Fed. Cir. 2016). See also Smart Sys. Innovations, LLC v. Chicago Transit
Auth., 873 F.3d 1364, 1372 (Fed. Cir. 2017)(verifying payment information,
as well as “financial transactions . . . and data collection related to such
transactions” “are directed to an abstract idea under Alice step one.”);
buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1352–54 (Fed. Cir. 2014)
(Claims reciting sending and receiving communications over a computer
network to facilitate online commercial transactions are directed to
“contractual relations, which are intangible entities” and “constitute[] ‘a
fundamental economic practice long prevalent in our system of
commerce.’”).
Thus, we agree with the Examiner’s conclusion that the claims recite
an abstract idea within the category of certain methods of organizing human
activity directed to a judicial exception.
Appellant’s argument that “[N]one of the recitations of independent
claims 1, 11, and 20 can be performed mentally, recite nothing more than
just mathematical concepts, or are reasonably categorized as methods of
organizing human activity,” Appeal Br. 9; Reply Br. 2, is unpersuasive.
Appellant’s reliance upon example 37, claim 2, of the USPTO’s Subject
Matter Eligibility Examples is misplaced, as example 37, claim 2, is a
“method of rearranging icons on a graphical user interface (GUI) of a
computer system” as a counter-example of a process that cannot be
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performed mentally, and not, as in the instant claims, drawn to organizing
human activity such as fundamental economic concepts or managing
interactions between people. See USPTO Subject Matter Eligibility
Examples: Abstract Ideas2 at 12–13.
Because the present claims recite commercial interactions including
sales activities or business relations that fall into the category of certain
methods of organizing human activity (i.e., an abstract idea), we proceed to
prong 2.
Revised Guidance Step 2A, Prong 2
Under Step 2A, Prong 2 of the Revised Guidance, we next determine
whether the claims recite additional elements that integrate the judicial
exception into a practical application (see MPEP §§ 2106.05(a)–(c), (e)–(h)).
The “additional elements” recited in claim 1 include the claimed “host
computing device.” The “host computing device” interacts with an
“electronic payment interchange network,” “cardholder computing device,”
“first service provider computing device,” “first item purchased,” “personal
records,” “second service provider computing device,” and “memory.”
To integrate the exception into a practical application, the additional
claimed elements must, for example, improve the functioning of a computer
or any other technology or technical field (see MPEP § 2106.05(a)), apply
the judicial exception with a particular machine (see MPEP § 2106.05(b)),
affect a transformation or reduction of a particular article to a different state
or thing (see MPEP § 2106.05(c)), or apply or use the judicial exception in
some other meaningful way beyond generally linking the use of the judicial

2 Available at https://
https://www.uspto.gov/sites/default/files/documents/101_examples_37to42_
20190107.pdf
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exception to a particular technological environment (see MPEP
§ 2106.05(e)). See Revised Guidance.
Appellant argues the claims recite “a specific computer-based
methodology for simultaneously processing a conventional payment card
transaction and an associated personal record transaction for providing
specific personal records necessary to complete the payment transaction. In
fact, the ‘concept’ of a user manually providing his or her personal records is
a problem being solved by Appellant's claims.” Reply Br. 2.
Appellant does not provide any evidence to support improvement of
“the functioning of a computer or any other technology or technical field,”
as required by the guidance, instead arguing the claims are for “improving
the ease of transaction for both user and service provider.” Appeal Br. 10
(emphasis added); Reply Br. 3. Appellant proffers that the claims provide a
“solution to the problem of efficiently completing transactions that both
involve a payment card transaction and the conventionally separate process
of providing other personal records. See Appellant’s Spec. para. 4. Reply
Br. 3.
We agree with the Examiner’s conclusion that the independent claims
do not purport to improve the functioning of the computer itself or any other
technology or technical field and they do not appear to improve any
technical field or computing functionality. Final Act. 4.
Updating personal records is not a technological problem, and a
solution of prompting a user to update records is not a technical solution.
We instead find that the solution merely uses computers as tools to perform
the abstract idea of updating records. Appellant’s reliance upon Ex parte
Gamel, No. 2017-010705 (PTAB Mar. 26, 2019), Reply 3, is not dispositive,
as Gamel is not a Precedential decision. We first note the claims in Gamel,
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drawn to providing a reward based on a price differential between
merchants, are distinct to those of the instant application, drawn to updating
records, and are neither drawn to the same problem nor the same solution.
Further, our reviewing court has not held that “convenience” or “ease”
is sufficient to integrate an exception into a practical application. On the
contrary, it has been held that the focus of the claims must be drawn to an
improvement in computer capabilities rather than computers merely invoked
as a tool. See Enfish, LLC v. Microsoft Corp., 822 F. 3 d 1327, 1335–37
(Fed. Cir. 2016). See also Smart Sys. at 1372 (“Here, the Asserted Claims
are not directed to specific rules that improve a technological process.
Again, the claims recite the collection of financial data from third parties,
the storing of that financial data, linking proffered credit cards to the
financial data, and allowing access to a transit system based on the financial
data. The claims are not directed to a combined order of specific rules that
improve any technological process, but rather invoke computers in the
collection and arrangement of data. Claims with such character do not
escape the abstract idea exception under Alice step one.”) (citing
RecogniCorp, LLC v. Nintendo Co., 855 F. 3 d 1322, 1327 (Fed. Cir. 2017)).
Appellant’s argument that the claims are directed to a practical
application of the relevant technology that does not monopolize the alleged
abstract idea is also unpersuasive. Appeal Br. 4.
Claim 1 recites a series of generic computer components at a high
level of generality and uses the generic computer components as tools to
implement the recited abstract ideas. Using generic computer components to
implement an abstract idea does not integrate the abstract idea into a
practical application. See, e.g., Alice, 573 U.S. at 223–24; see also Revised
Guidance, 84 Fed. Reg. at 55 (explaining that courts have identified merely
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using a computer as a tool to perform an abstract idea as an example of when
a judicial exception has not been integrated into a practical application).
Accordingly, we agree with the Examiner’s conclusion that the
present claims fail to integrate the exception into a practical application, and
we proceed to Step 2B.
Revised Guidance Step 2B: Inventive concept
Under Step 2B of the Guidance we analyze the claims to determine
whether they provide an inventive concept (i.e., whether the additional
elements amount to significantly more than the exception itself).
Considerations that are evaluated with respect to Step 2B include
determining whether the claims as a whole add a specific limitation or
combination of limitations that are not well-understood, routine,
conventional activity in the field. Revised Guidance, 84 Fed. Reg. at 56.
Simply appending well-understood, routine, conventional activities
previously known to the industry, specified at a high level of generality, to
the judicial exception indicates that an inventive concept may not be present.
Id.
Appellant argues the Examiner has failed to provide sufficient
evidence to show the recitations simply append well-understood, routine,
conventional activities previously known to the industry, specified at a high
level of generality, to the judicial exception. Appeal Br. 12; Reply Br. 4.
As set forth by the Examiner, the Specification discloses, “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.” Ans. 7–8
(citing Spec. ¶¶ 16, 53, 54).
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Although Appellant contends that this finding lacks adequate support,
see Appeal Br. 12; Reply Br. 4, we disagree. The written description
indicates that the host computing device, memory, cardholder and provider
computing devices encompass well-understood, routine, and conventional
computer components. For example, the claimed host computing device, “is
a server or system of servers for performing the functions described herein.
In other embodiments, the host computing device may be any other kind of
computing device capable of performing the functions described herein."
Spec. ¶ 16.
As for the functions claimed, the claims recite elements such as
“processing a conventional payment card transaction,” Reply Br. 2
(emphasis added), “a user manually clicking computer buttons to transmit
his or her personal records,” Reply Br. 2, and incorporate the
“conventionally separate process of providing other personal records” Reply
Br. 3.
We agree with the Examiner,
The collective functions appear to be implemented using
conventional computer systemization.
The claim(s) does/do not include additional elements that
are sufficient to amount to significantly more than the judicial
exception. . . . [T]he additional claim element(s) amounts to no
more than mere instructions to apply the exception using
generic computer components. The same analysis applies in
Step 2B, i.e., mere instructions to apply an exception using a
generic computer component cannot integrate a judicial
exception into a practical application at Step 2A or provide an
inventive concept in Step 2B.
Ans. 9.
We also note Appellant argues the claims provide the advantage of
simultaneity, a “specific computer-based methodology for simultaneously
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processing a conventional payment card transaction and an associated
personal record transaction.” Reply Br. 2 (emphasis added).
As noted by the Examiner,
This is not an accurate portrayal of the broadest reasonable
interpretation of the claims.
The claims do not require a payment transaction and an
associated personal record transaction to be conducted
simultaneously- in fact, the sequence of the independent claim
limitations as recited makes it clear that the payment transaction
occurs first and then there is potential for a personal record
transaction to occur.
Ans. 14.
Additionally, Appellant argues the claims are “providing specific
personal records necessary to complete the payment transaction.” Reply Br.
2 (emphasis added).
The claims recite “transmitting a confirmation message . . . the
confirmation message confirming that the payment transaction has been
approved, the payment transaction corresponding to the first service provider
supplying a first item purchased as part of the approved payment
transaction.” Claim 1. As claimed, the providing of personal records is
necessary to the transmitting of the confirmation message and completion of
the payment transaction and supplying the first item purchased, contrary to
Appellant’s assertions.
Finally, Appellant argues, as there is no rejection of the claims under
35 USC § 103, and “The fact that the pending claims overcome the prior art,
as acknowledged at page 15 of the Final Office Action, strengthens the
conclusion that the recited limitations are not well understood, routine, and
conventional.” Appeal Br. 12; Reply Br. 5.
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We are unpersuaded by Appellant’s argument. “[P]atent-eligibility
does not turn on ease of execution or obviousness of application. Those are
questions that are examined under separate provisions of the Patent Act.”
Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1052 (Fed. Cir.
2016).
Thus, merely because the Examiner has not presented a rejection
under 35 U.S.C. §§ 102 and 103 does not overcome a 35 U.S.C. § 101
rejection. Although the second step in the Alice/Mayo framework is termed
a search for an “inventive concept,” the analysis is not an evaluation of
novelty or nonobviousness, but rather, a search for “an element or
combination of elements that is ‘sufficient to ensure that the patent in
practice amounts to significantly more than a patent upon the [ineligible
concept] itself.”’ Alice, 573 U.S. at 217–18. A novel and nonobvious claim
directed to a purely abstract idea is, nonetheless, patent-ineligible. See
Mayo, 566 U.S. at 90.
For the foregoing reasons, we conclude that claim 1 fails to integrate
the abstract idea into a practical application, and the additional claim
elements do not add significantly more to the abstract idea. Appellant,
therefore, does not persuade us the Examiner erred in concluding that claim
1 is directed to patent-ineligible subject matter. Accordingly, we sustain the
§ 101 rejection of independent claim 1. We also affirm the rejection of
claims 2, 3, 5–9, 11–13, 15–22, and 24–28 for the same reasons as stated
above.
CONCLUSION
The Examiner’s rejections are affirmed.
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More specifically, the Examiner’s rejection of claims 1–3, 5–9, 11–
13, 15–22, and 24–28 under 35 U.S.C. § 101 is affirmed.
DECISION SUMMARY
In summary:
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–3, 5–9,
11–13, 15–
22, 24–28
101 Eligibility 1–3, 5–9,
11–13, 15–
22, 24–28

TIME PERIOD FOR RESPONSE
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1)(iv).
AFFIRMED