William Johnson

Patent Trials and Appeals BoardNov 27, 2020

2020002337 (P.T.A.B. Nov. 27, 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. 12/289,674 10/31/2008 William Johnson CITI0332-US 2312 75127 7590 11/27/2020 CITI CUSTOMER NUMBER FOLEY & LARDNER LLP 3000 K STREET N.W. SUITE 600 WASHINGTON, DC 20007-5109 EXAMINER SUBRAMANIAN, NARAYANSWAMY ART UNIT PAPER NUMBER 3695 NOTIFICATION DATE DELIVERY MODE 11/27/2020 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): esophir@foley.com ipdocketing@foley.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte WILLIAM JOHNSON ____________ Appeal 2020-002337 Application 12/289,6741 Technology Center 3600 ____________ Before ELENI MANTIS MERCADER, NORMAN H. BEAMER, and ADAM J. PYONIN, Administrative Patent Judges. BEAMER, Administrative Patent Judge. DECISION ON APPEAL Appellant appeals under 35 U.S.C. § 134(a) from the Examiner’s Non-Final Rejection of claims 1–6, 11, 12, and 14. We have jurisdiction over the pending rejected claims 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. Appellant identifies Citibank, N. A. as the real party in interest. (App. Br. 1.) Appeal 2020-002337 Application 12/289,674 2 THE INVENTION Appellant’s disclosed and claimed invention is directed to calculating and collecting a fee interchange adjustment as it relates to private label accounts, including enabling a private label card account with a partner by a card issuer through a card association network with a special program fee. (Abstract.) Independent claim 1, reproduced below, is illustrative of the subject matter on appeal: 1. A computer-implemented method comprising: receiving, by a card issuer processing system processor, transaction data with a merchant from a transaction terminal having a card reader through which a private label transaction card is swiped in connection with a transaction, the transaction data being transmitted to the card issuer processing platform processor from the card association processing system processor via an acquiring financial institution processor; determining, by the card issuer processing platform processor, whether a calculated difference based on an established interchange value and a special program value has a value above a threshold; and automatically generating, by the card issuer processing platform processor, a message in a proprietary format of the card association processing system processor, wherein the card issuer processing platform processor populates a reason code field and a message text field, wherein data in the reason code field represents a type of adjustment and data in the message text field represents a description of a purpose of the message and an identifier of the merchant, wherein the message is transmitted through the card association processing system processor to an acquirer processor and instructs the acquirer processor to process an adjustment of an amount of the calculated difference for credit or debit to an account of the Appeal 2020-002337 Application 12/289,674 3 merchant at the acquirer processor based on whether the calculated difference is above the threshold. Appeal Br. 13. (Claims Appendix.) REJECTIONS2 The Examiner rejected claims 1–6, 11, 12, and 14 under 35 U.S.C. § 112, second paragraph, as being indefinite. (Non-Final Act. 4.)3 The Examiner rejected claims 1–6, 11, 12, and 14 under 35 U.S.C. § 101 because the claimed invention is directed to an abstract idea without significantly more. (Non-Final Act. 5.) ISSUE ON APPEAL Appellant’s arguments in the Appeal and Reply Briefs present the following issue:4 Whether the Examiner erred in finding claims 1–6, 11, 12, and 14 as directed to non-statutory subject matter. (Appeal Br. 6–12; Reply Br. 2–6.) 2 The objection of the Specification and the rejection of claims 1–6, 11, 12, and 14 under 35 U.S.C. § 112, first paragraph, has been withdrawn in the Answer. See Non-Final Act. 2–4, Ans. 3. 3 Appellant does not address this rejection at this time. See Appeal Br. 6; Reply Br. 2. Therefore, this rejection is summarily affirmed. 4 Rather than reiterate the arguments of Appellant and the positions of the Examiner, we refer to the Appeal Brief (filed Nov. 4, 2019); the Reply Brief (filed Feb. 3, 2020); the Non-Final Office Action (mailed May 3, 2019); and the Examiner’s Answer (mailed Dec. 2, 2019) for the respective details. Appeal 2020-002337 Application 12/289,674 4 ANALYSIS We have reviewed the Examiner’s rejections in light of Appellant’s arguments. Arguments Appellant could have made but chose not to make are deemed to be waived. See 37 C.F.R. § 41.37(c)(1)(iv). The Examiner determines the claims are patent ineligible under 35 U.S.C. § 101, because the claims are directed to a method of interchange adjustment as it relates to private label accounts, which is considered a judicial exception because it falls under the certain category of methods of organizing human activity such as commercial interactions including fulfilling agreements in the form of contracts. (Ans. 4; see also Alice Corp. Pty. Ltd. 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.”).) The Examiner further finds that [t]he additional elements of the instant underlying 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. Mere instructions to apply an exception using a generic computer component cannot provide an inventive concept. (Ans. 8.) Appellant argues that “[p]opulating reason codes and text fields is not considered abstract under Step 2A (prong I)” as such “gathering data from a hardware device” and “analyzing the retrieved data” involves “computer processing beyond a mere financial transaction.” (Reply Br. 3.) Appeal 2020-002337 Application 12/289,674 5 Appellant further argues that a claim is patent eligible if “an additional element implements a judicial exception with, or uses a judicial exception in conjunction with, a particular machine or manufacture that is integral to the claim.” (Reply Br. 4, citing 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (hereinafter “Revised Guidance”).) Appellant contends [t]he instant claims recite a hardware device and computer- specific protocols that are integral to the inventive concept recited by the claims. The claims recite a retrieving data from a transaction terminal having a card reader through which a private label transaction card is swiped. (Reply Br. 4.) An invention is patent-eligible if it claims a “new and useful process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101. Here, independent claim 1 and its dependent claims relate to a method — i.e., a process. However, the Supreme Court has long held that “[l]aws of nature, natural phenomena, and abstract ideas are not patentable.” Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014) (quoting Assoc. for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589–90 (2013)). The “abstract ideas” category embodies the longstanding rule that an idea, by itself, is not patentable. Alice, 573 U.S. at 216–17. In Alice, the Supreme Court sets forth an analytical “framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Id. at 217. The first step in the analysis is to “determine whether the claims at issue are directed to one of those patent-ineligible concepts,” Appeal 2020-002337 Application 12/289,674 6 such as an abstract idea. Id. 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 v. Kappos, 561 U.S. 593, 611 (2010); mathematical concepts (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and mental processes (Gottschalk v. Benson, 409 U.S. 63, 69 (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 water-proof 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))). If the claims are directed to a patent-ineligible concept, the second step in the Alice/Mayo analysis is to consider the elements of the claims “individually and ‘as an ordered combination’” to determine whether there are additional elements that “‘transform the nature of the claim’ into a patent-eligible application.” 573 U.S. at 217 (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 79, 78 (2012)). In other words, the second step is to “search for an ‘inventive concept’ — i.e., 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.” 573 U.S. at 217–18 (quoting Mayo, 566 U.S. at 72–73) (alteration in original). 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. 573 U.S. at 221. A Appeal 2020-002337 Application 12/289,674 7 transformation into a patent-eligible application requires more than simply stating the abstract idea while adding the words “apply it.” Id. Further to the Alice/Mayo analytical framework, and acknowledged by Appellant in the Briefs, the USPTO published the Revised Guidance on the application of § 101. See also USPTO October 2019 Update: Subject Matter Eligibility (Oct. 17, 2019) (hereinafter “Update”), noticed at 84 Fed. Reg. 55942 (Oct. 18, 2019). Under the Revised Guidance, the Office first looks to whether the claim recites: (1) any judicial exceptions, including certain groupings of abstract ideas (i.e., mathematical concepts, certain methods of organizing human interactions 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)). Only if a claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application, does the Office then 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 Revised Guidance. In evaluating the claims at issue, we consider claim 1 as representative, consistent with how Appellant and the Examiner analyze the Appeal 2020-002337 Application 12/289,674 8 claims. See 37 C.F.R. § 41.37(c)(1)(iv)(2016). Omitting the portions of the claim invoking use of generic technology (which are discussed separately below), the remaining limitations of claim 1 elaborate on a method of calculating and processing a credit or debit to a merchant account, via the steps of: (a) receiving transaction data with a merchant; (b) determining whether a calculated difference based on an established interchange value and special program value has a value above a threshold; and (c) automatically processing the calculated difference as a credit or debit. Apart from the use of generic technology (discussed further below), each of these limitations describes steps taken to administer a contract in which “a card issuer, such as a bank, enters a special economic arrangement with a partner to facilitate sales for the partner and value propositions back to their customers who are the card issuer’s cardholders.” (Spec. ¶ 2, emphasis added.) These limitations comprise fundamental economic principles or practices and/or commercial or legal interactions; thus, the claim recites the abstract idea of “certain methods of organizing human activity.” (Revised Guidance, 84 Fed. Reg. at 52.) 5 5 See also Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“The concept of hedging, described in claim 1 and reduced to a mathematical formula in claim 4, is an unpatentable abstract idea . . . .”); Alice, 573 U.S. at 218 (“These claims are drawn to the abstract idea of intermediated settlement.”); buySafe, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (claims that “are squarely about creating a contractual relationship—a ‘transaction performance guaranty’” held as “directed to an abstract idea” (citation omitted)); Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1345 (Fed. Cir. 2013) (claims reciting “generalized software Appeal 2020-002337 Application 12/289,674 9 We do not agree with Appellant that claim 1’s “populat[ing] a reason code field and a message text field” is determinative for the evaluation at Step 2A, Prong One, as it does not negate the abstract nature of the claim steps as shown above. See Appeal Br. 7. Further, it is in Step 2A, Prong Two in which “examiners should evaluate whether the claim as a whole integrates the recited judicial exception into a practical application of the exception.” Revised Guidance, 84 Fed. Reg. at 54. Therefore, we agree with the Examiner that the subject matter of claim 1 recites an abstract idea, as do the remaining claims. Further pursuant to the Revised Guidance, we consider whether there are additional elements set forth in claim 1 that integrate the judicial exception into a practical application. Revised Guidance, 84 Fed. Reg. at 54–55. Here, the abstract idea of claim 1 appears to be carried out using a “card issuer processing system processor,” a “card association processing system processor,” an “acquiring financial institution processor,” an “acquirer processor,” a “transaction terminal,” and a “card reader.” Further, the abstract idea of claim 1 is carried out while performing “populat[ing] a reason code field and a message text field.” We agree with the Examiner that [a] plain reading of Figure 1 and associated descriptions in [paragraphs 5, 12–13] reveals that these processors are generic processors suitably programmed [and] execute the claimed components arranged to implement an abstract concept [of generating insurance-policy-related tasks based on rules to be completed upon the occurrence of an event] on a computer” not patent eligible); Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Can. (U.S.), 687 F.3d 1266, 1277 (Fed. Cir. 2012) (determining a “‘method for managing a life insurance policy comprising’ seven steps” is abstract). Appeal 2020-002337 Application 12/289,674 10 steps. Hence, the additional elements in the claims are all generic components suitably programmed to perform their respective functions. The processors in all the steps are recited at a high-level of generality (i.e., as generic processors performing generic computer functions) such that it amounts no more than mere instructions to apply the exception using generic computer components. (Ans. 5.) “[M]erely requir[ing] generic computer implementation[] fail[s] to transform that abstract idea into a patent-eligible invention.” Alice, 573 U.S. at 221. Nor does the subject matter of claim 1 contain additional elements that implement the judicial exception with a “particular machine,” because the claims do not specify any details in regard to the system. See MPEP § 2106.05(b). Further, the method does not transform matter; at best it transforms information. See MPEP § 2106.05(c). While the claimed method “populates a reason code field and a message text field,” this is only a transformation of information that does not integrate the judicial exception into a practical application, but rather represents insignificant extra-solution activity. Revised Guidance, 84 Fed. Reg. at 55 n. 31. Nor does claim 1 have any other meaningful limitations (MPEP § 2106.05(e)), or any of the other considerations set forth in the Revised Guidance regarding a determination of whether additional elements integrate the judicial exception into a practical application. See Revised Guidance, 84 Fed. Reg. at 55. Accordingly, we conclude that the subject matter of claim 1 (and the remaining claims) is directed to fundamental economic principles or practices, which are examples of the certain methods of organizing human Appeal 2020-002337 Application 12/289,674 11 activity, and thus an abstract idea, and the additional elements recited therein do not integrate the abstract idea into a practical application. Turning to the second step of the Alice inquiry, we consider the elements of the claims “individually and ‘as an ordered combination’” to determine whether there are additional elements that “‘transform the nature of the claim’ into a patent-eligible application.” 573 U.S. at 217 (quoting Mayo, 566 U.S. at 66, 79, 78 (2012)). The Examiner finds, and we agree, that [t]he additional elements of the instant underlying 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. Mere instructions to apply an exception using a generic computer component cannot provide an inventive concept. (Ans. 8.) “[T]he mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.” Alice, 573 U.S. at 223. The additional elements of claim 1, whether individually or in combination, fails to add “significantly more” to the basic abstract idea encompassed by the claim sufficient to transform the claimed abstract idea into a patent-eligible application. No particular machine is claimed, in that the disclosure refers only to use of “processors coupled to memory and to other processors likewise coupled to memory via computer networks” and generic recitation of “computer program products.” (Spec ¶ 13.) Nor does the claim recite an additional element or elements that reflect an improvement in the functioning of a computer, or an improvement to other technology or technical field. See Ans. 8–9. Rather, the disputed limitations are part of the abstract idea itself. See Alice, 573 U.S. at 222 ((“In holding that the process was patent ineligible, we rejected the argument that Appeal 2020-002337 Application 12/289,674 12 ‘implement[ing] a principle in some specific fashion’ will ‘automatically fal[l] within the patentable subject matter of § 101.’”) (alterations in original) (quoting Parker v. Flook, 437 U.S. 584, 593 (1978))). “It is clear from Mayo that the ‘inventive concept’ cannot be the abstract idea itself.” Aatrix Software, Inc. v. Green Shades Software, Inc., 890 F.3d 1354, 1359 (Fed. Cir. 2018). Moreover, “[p]atent law does not protect claims to an ‘asserted advance in the realm of abstract ideas . . . no matter how groundbreaking the advance.’” 890 F.3d at 1359 (Fed. Cir. 2018) (citation omitted). Nothing regarding any aspect of the “ordered combination” of the claim elements provide significantly more than the abstract idea that claim 1 is directed to. Accordingly, we agree with the Examiner that claim 1 is patent ineligible, as well as independent claims 12 and 14 not separately argued, and dependent claims 2–6 and 11 not separately argued. See App. Br. 6–12. DECISION SUMMARY In summary: Claims Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 1–6, 11, 12, 14 112(2) Indefiniteness 1–6, 11, 12, 14 1–6, 11, 12, 14 101 Patent eligibility 1–6, 11, 12, 14 Overall Outcome 1–6, 11, 12, 14 Appeal 2020-002337 Application 12/289,674 13 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