Patricia M. Mckernan et al.

Patent Trials and Appeals Board

Oct 10, 2019

14171529 - (D) (P.T.A.B. Oct. 10, 2019)

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.
14/171,529 02/03/2014 Patricia M. McKernan 90945-876889 (009430US) 5164
20350 7590 10/10/2019
KILPATRICK TOWNSEND & STOCKTON LLP
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
EXAMINER
RANKINS, WILLIAM E
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
10/10/2019 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):
KTSDocketing2@kilpatrick.foundationip.com
ipefiling@kilpatricktownsend.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PATRICIA M. MCKERNAN, RAMONA JOHNSON, and
CHRISTIAN J. TRUJILLO
Appeal 2018-005920
Application 14/171,529
Technology Center 3600
BEFORE ADAM J. PYONIN, JOSEPH P. LENTIVECH, and
SCOTT RAEVSKY, Administrative Patent Judges.
RAEVSKY, Administrative Patent Judge.
DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1, 2, and 5–18. 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 The
Western Union Company. Appeal Br. 2.
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CLAIMED SUBJECT MATTER
The claims are directed to providing tax refunds via a money transfer
service. See Spec., Abstract. Claim 1, reproduced below, is illustrative of
the claimed subject matter:
1. A method comprising:
receiving, by a computer system, from a user or a third
party, a request indicating a first method in which at least a first
portion of a tax refund is to be provided to the user;
associating, by the computer system, a first account
identifier with the user, wherein the first account identifier is in
a predetermined format;
providing, by the computer system, the first account
identifier to a government entity, as a first target for the tax
refund;
receiving, by the computer system, the tax refund
associated with the first account identifier;
creating, by the computer system, and based on the
account identifier being in the predetermined format, a
temporary account;
depositing, by the computer system, the tax refund in the
temporary account; and
causing, by the computer system, at least the first portion
of the tax refund to be provided to a first recipient from the
temporary account using the first method.
REJECTIONS
Claims 1, 2, and 5–18 are rejected under 35 U.S.C. § 101 because the
claimed invention is directed to non–statutory subject matter. Final Act. 4.
Claims 1, 2, 5–10, and 16–18 were rejected under 35 U.S.C. § 112
(pre–AIA), first paragraph, as failing to comply with the written description
requirement.2 Id. at 8.

2 The Examiner withdrew this rejection. Ans. 7.
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We review the appealed rejections for error based upon the issues
identified by Appellant and in light of the arguments and evidence produced
thereon. Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010) (precedential).
ANALYSIS
I. Principles of Law
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 Bank Int’l, 573 U.S. 208,
216 (2014).
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)). In accordance with
that framework, we first determine what concept the claim is “directed
to.” See id. 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, 67–68 (1972)).
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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 water-proof cloth, vulcanizing
India rubber, smelting ores” (id. at 183 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
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 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 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
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. “A claim that recites an
abstract idea must include ‘additional features’ to ensure ‘that the [claim] is
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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.
The U.S. Patent and Trademark Office (“PTO”) recently published
revised guidance on the application of § 101. See USPTO, 2019 Revised
Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7,
2019) (“Guidance”). Under the 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 activities 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) (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, do we then look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is 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 Guidance, 84 Fed. Reg. at 56.

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II. Step 2A, Prong One (Judicial Exception)
The Examiner determines that claim 13 is directed to the abstract idea
of “distributing tax refunds.” Final Act. 4. For the reasons set forth below,
we conclude claim 1 recites certain methods of organizing human activity,
namely a fundamental economic practice, which is an abstract idea.
The Specification discloses, “[e]mbodiments of the invention provide
novel facilities . . . for providing tax refunds without requiring the taxpayer
to maintain a deposit account with a financial institution.” Spec. ¶ 7. The
Specification further discloses that “the invention allows for one or more
fees (such as tax preparer fees and the like) to be deducted from the amount
of the refund as well.” Id.
We determine that claim 1 recites a fundamental economic practice
because claim 1 broadly relates to receiving a tax refund, creating a
temporary account, depositing the refund in the temporary account, and
providing at least a portion of the refund to a recipient. Specifically, claim 1
recites “[a] method” that recites steps including: (1) “receiving . . ., from a
user or a third party, a request indicating a first method in which at least a
first portion of a tax refund is to be provided to the user,” (2) “associating
. . . a first account identifier with the user, wherein the first account identifier
is in a predetermined format,” (3) “providing . . . the first account identifier
to a government entity, as a first target for the tax refund,” (4) “receiving . . .
the tax refund associated with the first account identifier,” (5) “creating . . .
based on the account identifier being in the predetermined format, a

3 Appellant argues claims 1, 2, and 5–18 as a group. See App. Br. 4–6. We
select independent claim 1 as representative of claims 1, 2, and 5–18. See 37
C.F.R. § 41.37(c)(1)(iv) (2013).
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temporary account,” (6) “depositing . . . the tax refund in the temporary
account,” and (7) “causing . . . at least the first portion of the tax refund to be
provided to a first recipient from the temporary account using the first
method.”
As drafted, these limitations, under their broadest reasonable
interpretation, recite a fundamental economic practice because the
limitations all recite operations that would ordinarily take place in the
process of obtaining a tax return. See Alice, 573 U.S. at 219–20 (concluding
that use of a third party to mediate settlement risk is a “fundamental
economic practice” and thus an abstract idea); Bilski, 561 U.S. at 611–612
(concluding that hedging is a “fundamental economic practice” and therefore
an abstract idea); Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876
F.3d 1372, 1378–79 (Fed. Cir. 2017) (holding that concept of “local
processing of payments for remotely purchased goods” is a “fundamental
economic practice, which Alice made clear is, without more, outside the
patent system.”); OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359,
1362–63 (Fed. Cir. 2015) (concluding that claimed concept of “offer-based
price optimization” is an abstract idea “similar to other ‘fundamental
economic concepts’ found to be abstract ideas by the Supreme Court and
this court”).
Appellant does not dispute that claim 1 recites an abstract idea,
instead contending that claim 1 recites significantly more than an abstract
idea. App. Br. 4–6. Accordingly, for the aforementioned reasons, we agree
with the Examiner that claim 1 recites certain methods of organizing human
activity, namely a fundamental economic practice, and thus, an abstract idea.
See Guidance, 84 Fed. Reg. 52.
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III. Step 2A, Prong 2 (Integration into a Practical Application)
Under the Guidance, we now must determine if additional elements in
the claims integrate the judicial exception into a practical application
(see MPEP §§ 2106.05(a)–(c), (e)–(h)).
We discern no additional element (or combination of elements)
recited in Appellant’s representative claim 1 that integrates the judicial
exception into a practical application. See Guidance, 84 Fed. Reg. at 54–55
(“Prong 2”). For example, Appellant’s claimed additional elements (i.e., by
a “computer system”) do not: (1) improve the functioning of a computer or
other technology; (2) are not applied with any particular machine (except for
a generic computer); (3) do not effect a transformation of a particular article
to a different state; and (4) are not applied in any meaningful way beyond
generally linking the use of the judicial exception to a particular
technological environment, such that the claim as a whole is more than a
drafting effort designed to monopolize the exception. See MPEP §§
2106.05(a)–(c), (e)–(h). Instead, these limitations merely serve to narrow
the recited abstract idea using a generic computing device, which cannot
impart patent-eligibility. See Spec. ¶¶ 12 (“In some embodiments of the
invention, a system (such as a computer system) might be configured to
implement a method of the invention.”), 40 (“As used herein, the term ‘host
computer’ means any computer (or system of computers) that can be used to
process transactions in accordance with embodiments of the invention.”);
Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716–17 (Fed. Cir. 2014)
(determining that a general-purpose processor that merely executes the
judicial exception is not a particular machine).
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Appellant’s arguments focus on limitations that we determine are part
of the judicial exception as discussed above; thus, these limitations are not
“additional elements” that can impart patent eligibility to the claim. See,
e.g., App. Br. 4–5; see also Guidance n. 24 (“USPTO guidance uses the term
‘additional elements’ to refer to claim features, limitations, and/or steps that
are recited in the claim beyond the identified judicial exception.”). Even
assuming these limitations could be considered additional elements, we are
not persuaded the Examiner’s rejection is in error. Appellant contends, “the
claims include multiple recitations which improve another technical field.
For example, the independent claims improve payment security and payment
acquisition for tax preparers preparing returns for refund-receiving clients.”
App. Br. 4. The Examiner finds, and we agree, that neither “the claims nor
the specification recite how the invention improves payment security[,] and
the appellant offers no further explanation. With regard to payment
acquisition the appellant also fails to explain how payment acquisition is
improved.” Ans. 5. We agree that Appellant’s argument is conclusory and
points to no portion of the claims or Specification supporting its assertions.
Appellant also contends, “the claims include multiple recitations
which improve the functioning of specialized computers implementing
them.” App. Br. 4. Specifically, Appellant contends, “the independent
claims improve the speed at which the specialized computer therein is
capable of clearing transactions to both refund recipients and tax preparers.
This frees computing resources in the specialized computer thereby
increasing the speed and decreasing the latency in which future transactions
may be processed.” Id. The Examiner finds, and we agree, that Appellant
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“fails to explain how the claims make the cited improvements possible.”
Ans. 5. Appellant’s conclusory assertions are again unpersuasive.
Appellant next contends, “the claims as a whole are directed to
processes implemented on particular specialized machines rather than
generic general-use computers.” App. Br. 4. Specifically, Appellant
contends,
claim 1 alone discusses a particularly configured specialized
device which implements the processes and systems therein.
Further, this specialized machine is particularly configured and
specialized in the manner recited by the claim to perform
particular specialized functions with respect to the other
particular specialized machines in or outside of the claim.

Id. at 4–5. Appellant also cites a prior Board decision, Ex parte Ravenel,
Appeal No. 2016-003604 (April 1, 2016), but does not explain the relevance
of this decision.
The Examiner finds, and we agree, “the claims recite the use of
generic devices merely programmed to perform the specific claim steps.
There is no recitation in the claims or specification of any particular devices
and the appellant does not show support for the invention of particular
devices.” Ans. 6. Appellant points to nothing in the claims or Specification
to support Appellant’s assertion. In fact, the Specification belies Appellant’s
assertion by disclosing merely generic computer systems for implementing
the invention. See, e.g., Spec. ¶¶ 12 (“In some embodiments of the
invention, a system (such as a computer system) might be configured to
implement a method of the invention.”), 40 (“As used herein, the term ‘host
computer’ means any computer (or system of computers) that can be used to
process transactions in accordance with embodiments of the invention.”).
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Appellant also contends, “the claims effect a transformation of an
article into a different state through the conversion of a refund directive into
one, if not two distinct payments.” App. Br. 5. In addition, Appellant
contends, “there is at least one other transformation which occurs during the
claimed procedures: temporary accounts may be created (and closed) to
handle such transactions, as described in various claims.” Id. The Examiner
finds, and we agree,
the transformation principle does not apply here. The interim
guidance cites the transformation into a different state or thing
as in Diehr (the transformation of rubber into a cured state) and
Tilghman (manufacturing fat acids and glycerin from fatty
bodies . . .). The “transformation” into payments cannot be
considered a different state or thing as payments are abstract.

Ans. 6; see July 2015 Update Appendix 1: Examples, available at
https://www.uspto.gov/sites/default/files/documents/ieg-july-2015-app1.pdf,
14–19 (discussing Diehr) (July 30, 2015); Subject Matter Eligibility
Examples: Life Sciences, available at https://www.uspto.gov/sites/default/
files/documents/ieg-may-2016-ex.pdf, 30–31 (discussing Tilghman) (May 4,
2016). Appellant cites no authority supporting its contention that splitting a
refund directive into two payments or creating a temporary account
constitutes an eligibility-conferring transformation. Nor does Appellant
persuade us that, under the broadest reasonable interpretation, refund
directives and temporary accounts are articles—i.e., physical objects or
substances. See MPEP § 2106.05(c) (“An ‘article’ includes a physical
object or substance.”).
Additionally, Appellant contends “the remainder of the claim ha[s]
been determined to be novel and non-obvious, as there are no outstanding
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§102 and §103 rejections.” App. Br. 5. Appellant concludes,
“[c]onsequently, the remaining portion of the claims must be what is other
than ‘well-understood, routine, and conventional in the field,’ or else they
would not be substantively allowable.” Id. This argument overlooks
governing precedent. Even if we were to assume that the techniques claimed
are “[g]roundbreaking, innovative, or even brilliant,” that is not enough for
eligibility. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569
U.S. 576, 591 (2013). Nor is it enough for subject-matter eligibility that
claimed techniques be novel and nonobvious in light of prior art, passing
muster under 35 U.S.C. §§ 102 and 103. See Synopsys, Inc. v. Mentor
Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016) (“[A] claim for a new
abstract idea is still an abstract idea. The search for a § 101 inventive
concept is thus distinct from demonstrating § 102 novelty.”); Intellectual
Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1315 (Fed. Cir. 2016)
(same for obviousness). The claims here are ineligible because their
innovation is an innovation in ineligible subject matter.
Finally, Appellant contends, “the alleged abstract idea, ‘distributing
tax refunds,’ is being linked to a very particular technological environment
in the claims. Specifically, the claims recite specifically configured
machines to conduct such operations, in specifically configured and distinct
manners (from one claim to another).” App. Br. 5. Appellant then
concludes, “[t]hus, the claims do not attempt to assert that the alleged
abstract idea is pre-empted across all possible technological areas, but only
in one specific technological area where embodiments of the invention can
remedy shortcomings of existing . . . methods.” Id. The Examiner finds,
and we agree, “[t]he technological environment here is the generic
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computers recited[,] but application of an abstract idea by generic computer
devices does not add significantly more than the abstract idea.” Ans. 6.
In addition to the Examiner’s analysis, we also note that although pre-
emption “might tend to impede innovation more than it would tend to
promote it, ‘thereby thwarting the primary object of the patent laws”’ (Alice,
134 S. Ct. at 2354 (citing Mayo Collaborative Servs. v. Prometheus Labs.,
Inc., 132 S. Ct. 1289, 1293 (2012))), “the absence of complete preemption
does not demonstrate patent eligibility” (Ariosa Diagnostics, Inc. v.
Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)). “Where a patent's
claims are deemed only to disclose patent ineligible subject matter under the
Mayo framework, . . . preemption concerns are fully addressed and made
moot.” Ariosa Diagnostics, 788 F.3d at 1379.
For at least these reasons, we determine that claim 1 does not integrate
the judicial exception into a practical application and, therefore, is directed
to the recited abstract idea (e.g., certain methods of organizing human
activity).

IV. Step 2B (Inventive Concept)
Because we find that the claims are directed to an abstract idea, we
next consider whether the claims include additional limitations, such that the
claims amount to significantly more than the abstract idea.
The Examiner finds that the additional elements are well-understood,
routine, and conventional in the field. Ans. 6; Final Act. 5. Specifically, the
Examiner finds, “the claims recite the user of generic devices merely
programmed to perform the specific claim steps,” and “application of an
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abstract idea by generic computer devices does not add significantly more
than the abstract idea.” Ans. 6. Appellant does not dispute these findings.4
As we explained above, the additional limitations merely narrow the
recited abstract ideas using generic computer components. Accordingly, we
find that there are no additional limitations that cause the claims to amount
to significantly more than the abstract idea. See, e.g., Spec. ¶¶ 12, 40, 64–
67. Thus, we determine no element or combination of elements recited in
claim 1 contains any “inventive concept” or adds anything “significantly
more” to transform the abstract concept into a patent-eligible application.
Because Appellant’s independent claim 1 is directed to a patent-
ineligible abstract concept, does not include additional elements that
integrate the judicial exception into a practical application, and does not
recite significantly more than the abstract idea to which the claim is directed,
we sustain the Examiner’s rejection of claims 1, 2, and 5–18, which
Appellant argues as a group, under 35 U.S.C. § 101 as being directed to non-
statutory subject matter in light of Alice, its progeny, and the Guidance. See
supra n.3.
CONCLUSION
In summary:
Claims
Rejected
Basis  Affirmed Reversed
1, 2, and 5–18 § 101  1, 2, and 5–18
Overall Outcome 1, 2, and 5–18

4 Appellant did not file a Reply Brief.
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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