PayPal, Inc.

Patent Trials and Appeals Board

Oct 28, 2020

14470616 - (D) (P.T.A.B. Oct. 28, 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.
14/470,616 08/27/2014 Amol PATEL P734US2/70481.1446 1086
132906 7590 10/28/2020
Haynes & Boone, LLP (70481)
2323 Victory Ave. #700
Dallas, TX 75219
EXAMINER
BARTLEY, KENNETH
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
10/28/2020 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):
ipdocketing@haynesboone.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte AMOL PATEL and FREDERIK MALCOLM VERNON
____________

Appeal 2020-002419
Application 14/470,616
Technology Center 3600
____________

Before ELENI MANTIS MERCADER, NORMAN H. BEAMER, and
GARTH D. BAER, Administrative Patent Judges.

MANTIS MERCADER, Administrative Patent Judge.

DECISION ON APPEAL

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STATEMENT OF THE CASE
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s
final rejection of claims 1–7 and 10–20, which are all the pending claims.
We have jurisdiction under 35 U.S.C. § 6(b).
We affirm.
THE INVENTION
Appellant’s claimed invention is directed to “facilitating financial
transactions over a network include communicating with a user via a kiosk
device and a mobile communication device over the network” (Abstract).
Independent claim 15, reproduced below with emphasis added, is
representative of the subject matter on appeal:
15. A method for performing balance transfers, the method
comprising:

receiving, by a service provider system of a service
provider via a network using Internet Protocol, a cash deposit
transaction request from a kiosk device on behalf of a user, the
cash deposit transaction request indicating a cash value
deposited by the user into the kiosk device;

in response to determining based on the cash deposit
transaction request that the user does not maintain an account
with the service provider, creating a first account for the user
with the service provider;

crediting the first account based on the cash deposit
transaction request;

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42. Appellant identifies PAYPAL, INC. as the real party in
interest (Appeal Br. 1).
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receiving, via the network, a balance transfer request
from a mobile device, the balance transfer request indicating a
transfer of funds from the first account;

accessing cellular phone activity of a mobile device of
the user with the service provider system and updating a user
profile of the user associated with the first account by storing
data corresponding to the cellular phone activity involving the
mobile device;

determining whether the balance transfer request matches
a pattern of potential fraud based on the balance transfer request
and the data corresponding to the cellular phone activity
recorded in the user profile; and

transferring funds from the first account to one or more
other accounts based on the balance transfer request and based
on the determination of whether the balance transfer request
matches the pattern of potential fraud.

(Claims Appendix (Appeal Br. 14)).

REJECTION
The Examiner made the following rejection:
Claims 1–7 and 10–20 stand rejected under 35 U.S.C. § 101 because
the claimed invention is directed to an abstract idea without significantly
more. Final Act. 7.
ISSUE
The pivotal issue is whether the Examiner erred in finding that claims
1–7 and 10–20 are directed to non-statutory subject matter.

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ANALYSIS
We adopt the Examiner’s findings in the Answer and Final Office
Action and we add the following primarily for emphasis. We note that if
Appellant failed to present arguments on a particular rejection, we will not
unilaterally review those uncontested aspects of the rejection. See Ex parte
Frye, 94 USPQ2d 1072, 1075 (BPAI 2010) (precedential); Hyatt v. Dudas,
551 F.3d 1307, 1313–14 (Fed. Cir. 2008) (the Board may treat arguments
Appellant failed to make for a given ground of rejection as waived).
The Examiner determines claim 15 is patent ineligible under 35
U.S.C. § 101, because the claims are to the abstract idea of “certain methods
of organizing human activity . . . which covers performance of the limitation
as a fundamental economic practice, including mitigating risk” (Final Act.
8). The Examiner further finds that the claims “do not include additional
elements that are sufficient to amount to significantly more than the judicial
exception because, when considered separately and as an ordered
combination, they do not add significantly more (also known as an
‘inventive concept’) to the exception” (Final Act. 10; see also Alice Corp. v.
CLS Bank Int’l, 573 U.S. 208, 217 (2014) (describing the two-step
framework “for distinguishing patents that claim laws of nature, natural
phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts”)).
Prior to the mailing of the Final Rejection, the USPTO published
revised 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
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(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
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.
Appellant does not separately argue the claims with particularity. See
Appeal Br. 6–10. We select claim 15 as representative. See 37 C.F.R.
§ 41.37(c)(1)(iv).
Pursuant to Step 2A, Prong One 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. at 54). Here, claim 15 recites “a method
for performing balance transfers,” and includes the steps of:
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accessing cellular phone activity of a mobile device of
the user with the service provider system and updating a user
profile of the user associated with the first account by storing
data corresponding to the cellular phone activity involving the
mobile device;

and

determining whether the balance transfer request matches
a pattern of potential fraud based on the balance transfer request
and the data corresponding to the cellular phone activity
recorded in the user profile.

Under its broadest reasonable interpretation, the “accessing”
limitation recites performing and recording one or more observations
capable of being performed in the human mind. The supporting disclosure
states that the “financial and/or information transaction” information “may
include the type of transaction and/or the location information from the
mobile communication device” (Spec. para 29).
The “determining” limitation recites determining whether the balance
transfer request and the data collected in the “assessing” limitation match a
pattern of potential fraud. The limitation does not describe any particular
technique for fraud detection. The supporting disclosure states that “the
profile may be used for recognizing patterns of potential fraud, setting
transaction limits on the user, etc.” (Spec. para 29; see also Final Act. 6).
Although not described in the disclosure, it would appear either one or both
the claimed “user” and “service provider” could suffer a financial loss
caused by fraud when a “balance transfer request indicating a transfer of
funds from the first account” is consummated, as the claimed “first account”
containing funds is maintained by the “service provider” for the “user.”
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The Guidance provides that the “accessing” limitation corresponding
recites the abstract idea of “mental processes.” Update at 7–8;
Memorandum, 84 Fed. Reg. at 52; see also Intellectual Ventures I LLC v.
Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016) (‘‘[W]ith the
exception of generic computer-implemented steps, there is nothing in the
claims themselves that foreclose them from being performed by a human,
mentally or with pen and paper.’’)
The Guidance further provides that the “determining” limitation
recites the abstract idea of “mitigating risk” as the detection of fraud would
eliminate or minimize losses suffered by either the “user” or the “service
provider. Memorandum, 84 Fed. Reg. at 52; see particularly footnote 13
citing Alice, 573 U.S. at 219–220 and Bilski v. Kappos, 561 U.S. 593, 611–
612 (2010).
Appellant’s argument that Alice and Bilski can be distinguished from
the claimed invention because “in Alice and Bilski, the risk mitigation
discussed is a financial risk rather than a security risk/fraud described in
Appellant’s claims” (Reply Br. 3, emphasis in original), is not persuasive as
the claim includes no definition of “fraud” in terms of a “security risk,” and
Appellant fails to point to the disclosure as providing some definition or
other indication that would lead one skilled in the art to consider a
distinction between a financial risk and risk of fraud. Further, as described
above, absent some pattern of potential fraud, the claimed invention
performs the “balance transfer request” in which money is at stake, as was
the case in Alice (“the risk that only one party will pay what it owes”; Alice,
573 U.S. at 212) and Bilski (“the risk of price fluctuations”; Bilski, 561 U.S.
at 598.
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Accordingly, claim 15 “recites a judicial exception . . . [and] requires
further analysis in Prong Two” of the Guidance. See Memorandum, 84 Fed.
Reg. at 54. In particular, claim 15 recites an abstract idea including mental
processes and certain methods of organizing human activity of fundamental
economic principles or practices.
Pursuant to Step 2A, Prong Two, we are not persuaded the Examiner
has erred in finding that claim 15 is directed to an abstract idea. That is, we
determine claim 15 does not integrate the recited judicial exception into a
practical application. See Memorandum, 84 Fed. Reg. at 54. Appellant
argues the
“accessing” [step quoted above] and “storing data
corresponding to the cellular phone activity” and “determining
... a pattern of potential fraud based on ... the data
corresponding to the cellular phone activity recorded in the user
profile” [step quoted above] is [] similar to Finjan, Inc., v. Blue
Coat Systems, Inc., 879 F.3d 1299 (Fed. Cir. 2018)

(Reply Br. 4), because Appellant’s claimed invention, like that of Finjan,
allows a “computer security system to do things it could not do before” and
is “therefore directed to a non-abstract improvement in computer
functionality, rather than the abstract idea of computer security writ large”
(Reply Br. 4, quoting Finjan, 879 F.3d at 1305).
Appellant further contends the claimed invention resembles Example
35, claims 2 and 3 (published by Office in December, 2016), as comprising
“a combination of elements that ‘differ from the routine and conventional
sequence of events normally conducted’” (Reply Br. 5, quoting Example 35,
claim 2, analysis at 6, emphasis in original), and that
the conventional outcome of validating the identity of a user,
the combination of these conventional elements and use in a
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system to perform the identity validation in a different way
makes the claims patent-eligible. Similarly, the security
procedure recited in claim [15] uses the transaction information
and cellular phone activity to make the fraud determination,
which relies on unconventional sources of information to make
the fraud determination, satisfying the standard that the
limitations of claim [15] amount to significantly more than the
alleged abstract idea

(Reply Br. 5–6).
We are not persuaded by Appellant’s arguments. With respect to
Finjan, we agree with the Examiner that “Finjan claimed and taught an
improvement to computer security with their antivirus software. Appellant
is using a mobile device and balance transfer for financial transaction and
risk mitigation purposes” (Ans. 7) and we similarly see no “improvement to
computer functionality” in the claimed invention. We agree with the
Examiner that
[u]sing a system to mitigate fraud for financial purposes such as
receiving a cash deposit transaction or transferring funds from
an account as claimed recites abstract elements. Using a
computer system to do this is neither a practical application nor
enough

(Ans. 15). Here, the “accessing” and “determining” limitations fail to
integrate the recited judicial exceptions into a practical application, as the
limitations do not reflect an improvement in the function of a computer or an
improvement to other technology or technical field. See, e.g., Intellectual
Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1370 (Fed. Cir.
2015) (“[M]erely adding computer functionality to increase the speed or
efficiency of the process does not confer patent eligibility on an otherwise
abstract idea.”)
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Moreover, Appellant’s purportedly improved abstract concept is still
an abstract concept under the Guidance. 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”) (emphasis omitted). That is, the
“accessing” and “determining” steps are part of the recited abstract idea as
discussed above. As the argued elements are part of the abstract idea, they
are not additional elements that integrate the identified abstract idea into a
practical application. See Memorandum, 84 Fed. Reg. 54–55 (“[E]valuate
integration into a practical application by: (a) Identifying whether there are
any additional elements recited in the claim beyond the judicial
exception(s)”).
Similarly, when the elements of claim 15 are taken individually and as
an ordered combination, the claim elements differ from those of Example
35, claims 2 and 3. Whereas claims 2 and 3 recite the specific technical
steps performed as part of “conducting a secure automated teller
transaction,” Appellant’s “accessing” and “determining” steps broadly recite
the result (an accession of data and a determination whether the balance
transfer request matches a pattern of potential fraud), rather than sufficiently
claiming a technical means of achieving the result. See Two-Way Media
Ltd. v. Comcast Cable Commc’ns, LLC, 874 F.3d 1329, 1337 (Fed. Cir.
2017) (“The claim requires the functional results . . . but does not
sufficiently describe how to achieve these results in a non-abstract way.”).
Accordingly, we determine the claim does not integrate the judicial
exception into a practical application. See Memorandum, 84 Fed. Reg. at
54. We determine the “claim recites a judicial exception and fails to
integrate the exception into a practical application,” therefore we proceed
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with “further analysis pursuant to the second step of the Alice/Mayo test
(USPTO Step 2B).” Memorandum, 84 Fed. Reg. at 51.
We agree with the Examiner that the claimed elements and
combination of elements do not amount to significantly more than the
judicial exception itself. See Ans. 10; see also Memorandum, 84 Fed. Reg.
at 56. Independent claim 15 additionally recites “a service provider system,”
“a network,” “a kiosk device,” and “a mobile device.” These elements are
described in generic terms. See Spec. para 52; see also Ans. 14–15; see also
Alice, 573 U.S. at 226 (“But what petitioner characterizes as specific
hardware . . . is purely functional and generic. Nearly every computer will
include a ‘communications controller’ and ‘data storage unit’ capable of
performing the basic calculation, storage, and transmission functions
required by the method claims.”); OIP Techs., Inc. v. Amazon.com, Inc., 788
F.3d 1359, 1363 (Fed. Cir. 2015) (Claims reciting, inter alia, sending
messages over a network, gathering statistics, using a computerized system
to automatically determine an estimated outcome, and presenting offers to
potential customers found to merely recite “well-understood, routine
conventional activit[ies].”). Claim 15’s abstract ideas are accomplished
through conventional functions implemented using generic computer
components.
Accordingly, we affirm the Examiner’s rejection of independent claim
15, and independent claims 1 and 19, as well as dependent claims 2–7, 10–
14, 16–18, and 20 not separately argued with particularity. See Appeal Br.
10.

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CONCLUSION
The Examiner did not err in finding that claims 1–7 and 10–20 are
directed to non-statutory subject matter.

DECISION
In summary:
Claims
Rejected
35
U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–7, 10–
20
101 Eligibility 1–7, 10–
20

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)(1)(iv).

AFFIRMED