ADP, LLC

Patent Trials and Appeals Board

Jun 5, 2020

14682697 - (D) (P.T.A.B. Jun. 5, 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.
14/682,697 04/09/2015 Carl Rick Collins ES2014029-1 6170
126105 7590 06/05/2020
Duke W. Yee
Yee & Associates, P.C.
P.O. BOX 190809
Dallas, TX 75219
EXAMINER
KWONG, CHO YIU
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
06/05/2020 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):
ptonotifs@yeeiplaw.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

Ex parte CARL RICK COLLINS, KEITH WILSON FULTON,
ANNA CARSEN, and JAMES CALDWELL FORD

Appeal 2019-001737
Application 14/682,697
Technology Center 3600

Before JOHNNY A. KUMAR, JOHN A. EVANS, and
MICHAEL T. CYGAN, Administrative Patent Judges.

CYGAN, 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 1–27, which are all of the pending
claims in the application. Appeal Br. 9. 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. Appellant identifies the real party in interest as ADP,
LLC. Appeal Br. 2.
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CLAIMED SUBJECT MATTER
The claimed invention generally relates to visualizing and managing
on-demand payments for employees of an organization. Spec. ¶ 2.
Independent claim 1 is illustrative:
1. A method for managing scheduled payroll payments to
employees, the method comprising:
identifying, by a computer system, a schedule of employer
payments to an employee;
displaying, by the computer system, the schedule;
receiving, by the computer system, user input specifying a
request to change the schedule of employer payments for a
portion of the payments;
changing, by the computer system, the schedule of employer
payments based on the request; and
distributing, by the computer system, the portion of the
payments to the employee based on a changed schedule.
Appeal Br. 23 (Claims App.).
Independent claims 10 and 19 recite, respectively, a computer system
and a computer program product that perform the method of claim 1.
Appeal Br. 25–26. Dependent claims 2–9, 11–18, and 20–27 each
incorporate the limitations of their respective independent claims. Id. at 23–
28.
REFERENCES
Name Reference Date
Woodings et al.
(Woodings)
US 2004/0267595 A1 Dec. 30, 2004
Edrington et al.
(Edrington)
US 2012/0054088 A1 Mar. 1, 2012
Ruffolo et al.
(Ruffolo)
US 2013/0085796 A1 Apr. 4, 2013
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REJECTIONS
Claims 1–27 are rejected under 35 U.S.C. § 101 as being ineligible
subject matter.
Claims 1–7, 10–16, and 19–25 are rejected under 35 U.S.C. § 103 as
being obvious over the combination of Edrington and Woodings.
Claims 8, 9, 17, 18, 26, and 27 are rejected under 35 U.S.C. § 103 as
being obvious over the combination of Edrington, Ruffolo, and Woodings.

OPINION
A. Subject Matter Eligibility
1. Principles of Law
Patent-eligible subject matter is defined in 35 U.S.C. § 101 of the
Patent Act, which recites:
Whoever invents or discovers any new and useful
process, machine, manufacture, or composition of matter, or
any new and useful improvement thereof, may obtain a patent
therefor, subject to the conditions and requirements of this title.
There is, however, an implicit, longstanding exception to patent-
eligible subject matter in 35 U.S.C. § 101: “[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). This exception precludes patenting of “the
basic tools of scientific and technological work” from which all inventions
spring. Id. at 216–17 (internal quotation marks omitted). Invention or
discovery under § 101 is distinguished as being the application of such tools
to an end otherwise satisfying the requirements of the patent statutes. See
Gottschalk v. Benson, 409 U.S. 63, 67 (1972).
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The Supreme Court has established a framework for this eligibility
determination. Where a claim is directed towards a law of nature, natural
phenomena, or abstract idea, the elements of the claim as a whole must
ensure that the claim, in practice, amounts to significantly more than a patent
on the law of nature, natural phenomena, or abstract idea itself. Alice Corp.,
573 U.S. at 217–18. In applying this eligibility analysis, our reviewing court
has stated “the decisional mechanism courts now apply is to examine earlier
cases in which a similar or parallel descriptive nature can be seen[,] . . . the
classic common law methodology for creating law when a single governing
definitional context is not available.” Amdocs (Isr.) Ltd. v. Openet Telecom,
Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016) (citation omitted).
To address the growing body of precedent, the USPTO recently
published revised examination guidance on the application of § 101. 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50, 50
(Jan. 7, 2019) (hereinafter 2019 Guidance). The 2019 Guidance seeks to
improve the clarity of the subject matter eligibility analysis and to improve
consistency of this analysis across the USPTO. Id.
Under the 2019 Guidance, we first look to whether the claim is
directed to a judicial exception because:
(1) the claim recites a law of nature, natural phenomenon, or
abstract idea, the last of which includes certain groupings,
identified as mathematical concepts, certain methods of
organizing human activity and mental processes; and
(2) the claim as a whole fails to recite additional elements that
integrate the judicial exception into a practical application (see
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MANUAL OF PATENT EXAMINATION PROCEDURE (hereinafter
“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, do we then look to
whether the claim:
adds a specific limitation beyond the judicial exception that is
not “well-understood, routine, conventional” in the field (see
MPEP § 2106.05(d)); or, instead,
simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
See 2019 Guidance, passim.
2. Analysis
We have reviewed the Examiner’s subject matter eligibility rejection
(Final Act. 2–3, Ans. 4–5) in light of Appellant’s contentions that the
Examiner has erred (Appeal Br. 9–12, Reply Br. 2–3). We are not
persuaded by Appellant’s contention of Examiner error in rejecting claims
1–27 under 35 U.S.C. §101. We begin with claim 1.
a) “Recites an Abstract Idea”
The Examiner has determined claim 1 to be directed to “managing
and displaying payroll schedules and other related administrative tasks.”
Ans. 4. We understand the corresponding limitations to be:
identifying . . . a schedule of employer payments to an
employee; displaying, by the computer system, the schedule;
receiving . . . user input specifying a request to change the
schedule of employer payments for a portion of the payments;
changing . . . the schedule of employer payments based on the
request.
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The Examiner has found these limitations to be a performance of a
financial transaction, similar to concepts previously identified by the courts
as abstract, such as in buySAFE, Inc. v. Google, Inc. Id. (citing buySAFE,
Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014)).
The USPTO’s 2019 Guidance states that the abstract idea exception
includes certain methods of organizing human activity “when recited as such
in a claim limitation(s) (that is when recited on their own or per se).” 2019
Guidance, 84 Fed. Reg. at 52. In particular, Updated Guidance issued by the
USPTO in October 2019 characterizes those certain methods of organizing
human activity as including commercial or legal interactions such as
contracts, legal obligations, and business relations. October 2019 Update:
Subject Matter Eligibility 4, accessible at https://www.uspto.gov/sites/
default/files/documents/peg_oct_2019_update.pdf.
We agree with the Examiner that the scheduling of employer
payments to an employee is a type of business relation, contract, or legal
obligation, and, as such, is a method of organizing human activity that is
characterized as an abstract idea. Such a determination is consistent with
prior Court determinations finding abstract ideas in claims reciting financial
transactions. Alice Corp.; Bilski v. Kappos, 561 U.S. 593 (2010). Under our
controlling guidance, the above-identified limitations are an abstract idea
under Step 2A, Prong 1 of the 2019 Guidance.
b) “Directed to an Abstract Idea”
Having determined that claim 1 recites an abstract idea, we next
determine, under Step 2A, Prong 2 of the 2019 Guidance, whether the claims
are directed to that abstract idea, or whether the claims integrate the abstract
idea into a practical application of that abstract idea. 84 Fed. Reg. at 54.
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The Examiner finds claim 1 to have an element additional to those
limitations reciting an abstract idea; namely, a generically recited computer
system and “distributing, by the computer system, the portion of the
payments to the employee based on a changed schedule.” Final Act. 3; Ans.
4. The Examiner determines that the involvement of the computer system
does not result in an improvement to another technology or technical field,
an improvement to the functioning of the computer itself, or meaningful
limitations beyond generally linking the use of an abstract idea to a
particular technological environment. Final Act. 3. The Examiner further
finds the step of distributing payments to be similar to a step of providing
transaction that was found ineligible in Alice Corp. Ans. 5.
Appellant disagrees, arguing that claim 1’s step of distributing
payments provides a concrete implementation that is not merely a mental
process. Appeal Br. 11; Reply Br. 3. Appellant cites to Classen
Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057 (Fed. Cir. 2011) and
Vanda Pharm. Inc. v. West-Ward Pharm. Int’l Ltd., 887 F.3d 1117 (Fed. Cir.
2018) as showing additional steps of, respectively, immunization and
carrying out a dosage regimen. Appeal Br. 11. Appellant argues that claim
1’s additional step of distributing payments is of the same character as the
additional immunization and dosage regimen steps found to provide
eligibility in Classen and Vanda. Appeal Br. 11; Reply Br. 3.
The 2019 Guidance provides considerations, drawn from prior court
precedent, to determine whether an additional element or combination of
elements integrates a recited abstract idea into a practical application. 84
Fed. Reg. at 55. One such consideration is whether the additional element(s)
reflect an improvement in the functioning of a computer or another
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technology or technical field. Id. Considerations indicating a lack of a
practical application of the recited abstract idea include additional element(s)
that amount to an instruction to implement the abstract idea on a computer or
to otherwise instruct to “apply [the abstract idea].” Id. Other such
considerations indicating a lack of a practical application include additional
elements that add insignificant extra-solution activity to the abstract idea, or
that merely link the abstract idea to a particular technological environment.
Id.
Under this framework, we analyze the additional elements in claim 1,
which, as discussed supra, are a computer system and “distributing, by the
computer system, the portion of the payments to the employee based on a
changed schedule.” We agree with the Examiner that the performance of the
claimed functions on a generically claimed computer system, including
identifying a schedule of payments, receiving user input, and changing a
schedule, amounts to no more than an instruction to implement the above-
identified abstract idea on a computer. We further determine that the final
step of distributing payments amounts to no more than an instruction to
“apply it;” i.e., to perform a financial transaction according to the abstract
idea. We additionally agree with the Examiner that the step of distributing
payments is similar to Alice Corp.’s step of issuing instructions to carry out
the permitted transactions, which, along with the other steps, was found to
amount to nothing significantly more than an instruction to apply the
abstract idea using some unspecified, generic computer. Alice Corp., 573
U.S. at 225–26; see also Intellectual Ventures I LLC v. Capital One Fin.
Corp., 850 F.3d 1332, 1341–42 (Fed. Cir. 2017) (claims found directed to
“collecting, displaying, and manipulating data” and additional step of
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modifying an XML document was equivalent to adding the words “apply
it”).
We have considered Appellant’s arguments based upon Classen and
Vanda. USPTO Guidance recognizes that “an additional element that
applies or uses a judicial exception to effect a particular treatment or
prophylaxis for a disease or medical condition” may indicate that a judicial
exception has been integrated into a practical application. 2019 Guidance,
84 Fed. Reg. at 55 (citing, inter alia, Classen and Vanda). However, claim 1
does not effect a particular treatment or prophylaxis for a disease or medical
condition, and accordingly, the consideration applied in Classen and Vanda
does not apply here.
In view of the considerations that reflect that the claim merely
includes instructions to implement an abstract idea on a computer, based
upon our controlling guidance and court precedent, we determine that claim
1 is directed towards the recited abstract idea, and that the recited abstract
idea is not integrated into a practical application of that idea.
c) “Significantly More Than an Abstract Idea”
The Examiner has determined that the additional elements of the
computer system, and its claimed functions including distributing payments,
do not amount to significantly more than the abstract idea when considered
both individually and as a combination. The Examiner finds they amount to
no more than a generic computer performing generic computer functions
that would be routine, conventional and well-understood to one of ordinary
skill in the computer art. Final Act. 3 (citing the “well-understood, routine[,]
and conventional activities” referenced by the USPTO’s July 2015 Update
of the Interim Guidance of Patent Subject Matter Eligibility).
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We agree with the Examiner’s finding, which has not been contested
specifically by the Appellant. The Specification supports the Examiner’s
finding that the computer system is claimed generically. See, e.g., Spec.
¶¶ 28, 38–39 (describing various types of software and hardware usable for
the claimed invention).
Furthermore, the presence of a generic computer performing generic
computer functions, such as calculation and transmission of data, is not
enough to transform an abstract idea into a patent-eligible invention. Alice
Corp., 573 U.S. at 225–26. The performance of the claimed functions on a
generically claimed computer system, including identifying a schedule of
payments, receiving user input, and changing a schedule, amounts to no
more than well-understood, routine, conventional activities. See Alice
Corp., 573 U.S. at 225 (finding the computer functions of creating records,
obtaining balances, adjusting records by entering only certain transactions,
and issuing instructions to carry out permitted transactions at the end of the
day rather than at differently scheduled times, to be well-understood,
routine, conventional activities). Under our governing case law, this is not
enough to show that the claimed computer functions cause claim 1 to be
significantly more than the identified abstract idea. Accordingly, we are not
persuaded by Appellant’s argument.
In view of the foregoing, under the 2019 Guidance, informed by our
governing case law concerning 35 U.S.C. § 101, Appellant has not shown
the Examiner erred in concluding claim 1 is directed to a judicial exception,
i.e., an abstract idea, without significantly more, and thus is patent-ineligible
under § 101. We therefore sustain the Examiner’s rejection of claim 1.
Claims 2–27 have not been argued separately, and therefore fall with claim
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1. 37 C.F.R. § 41.37(c)(1)(iv). Accordingly, we therefore sustain the
Examiner’s rejection of claims 1–27.
B. Obviousness
We have reviewed the Examiner’s obviousness rejection (Final Act.
4–13, Ans. 6–9) in light of Appellant’s contentions that the Examiner has
erred (Appeal Br. 12–22, Reply Br. 3–4). We are not persuaded by
Appellant’s contention of Examiner error in rejecting claims 1–27 under 35
U.S.C. §103. We begin with claim 1. The Examiner has found Edrington to
teach a computerized method of offering a payday loan in which a portion of
an employee’s wage is paid to the employee in advance of a regularly
scheduled payday, wherein the user may request to change the schedule of
employer payments for apportion of the payments. Final Act. 4 (citing
Edrington ¶¶ 22, 76, 80, 93, 96). The Examiner finds the payday loan is
“offered by the employer,” e.g., as an employee benefit. Ans. 6 (citing
Edrington ¶ 22). In response to the user’s request, the schedule is changed,
and the changed schedule is used to distribute payments to the employee.
Final Act. 4–5 (citing Edrington ¶¶ 22, 76, 80, 93, 96). The Examiner relies
on Woodings for the remaining limitation of displaying a schedule of
payments to an employee. Final Act. 5 (citing Woodings ¶ 56).
Appellant argues that the combination of references, and specifically
Edrington, does not teach or suggest the claimed limitations of “receiving,
by the computer system, user input specifying a request to change the
schedule of employer payments for a portion of the payments” and
“changing, by the computer system, the schedule of employer payments
based on the request.” Appeal Br. 13.
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Specifically, Appellant argues that in Edrington, the lender, the
borrower’s employer, provides the loan. Id. at 14. Appellant thus concludes
that Edrington does not teach or suggest “employer payments.” Id. at 15
(emphasis omitted). Further, Appellant argues that in Edrington, the
employer pays the employee only at the regularly scheduled paydate, which
does not change. Id. at 15–16. Appellant thus concludes that Edrington
does not teach or suggest “changing . . . the schedule of employer
payments.” Id. Appellant further contends that the Examiner’s
characterization of a payday loan is improper, and presents arguments based
upon the Appellant’s construction of “payday loan.” Appeal Br. 13–14, 17.
With respect to Appellant’s arguments based upon the construction of
a “payday loan,” we find these arguments unpersuasive because the term
“payday loan” does not appear in the claims. In re Self, 671 F.2d 1344, 1348
(CCPA 1982) (arguments not based upon limitations appearing in the claims
are immaterial).
Furthermore, we are not persuaded by Appellant’s argument that
Edrington does not teach the employer providing the loan, thus altering the
schedule of employer payments. While Edrington discusses the loan being
made by the lender, Edrington further states, “the employer and the lender
may, in fact, be the same entity.” Edrington ¶ 97. Accordingly, we are not
persuaded by Appellant that the Examiner has erred in finding claim 1 to be
obvious over Edrington and Woodings.
Claims 2–7, 10–16, and 19–25 are rejected under the same grounds of
rejection as claim 1. Claims 4, 5, 7, 10, 13, 14, 16, 19, 22, 23, and 25 have
not been argued separately, and therefore fall with claim 1. Claims 2, 11,
and 20 are argued separately, but on the same reasoning (that the schedule of
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employer payments has not changed) that we have determined to be
unpersuasive for claim 1. Accordingly, we therefore sustain the Examiner’s
rejection of claims 1, 2, 4, 5, 7, 10, 11, 13, 14, 16, 19, 20, 22, 23, and 25.
Claims 3, 12, and 21 are argued to be non-obvious because the
payments are not shown to be paid from accrued compensation of the
employee. Appeal Br. 18. Appellant argues, “accrued compensation is
compensation earned by employees, but not yet paid out as disbursements.”
Id. Appellant argues that Edrington’s payday loan instead provides funds
from a separate checking account, which is eventually paid back to the
lender from the employee’s future earnings. Id. The Examiner finds that
Edrington teaches the employees are paid from accrued compensation
because Edrington states, “an employee 320 provides work or services for
and on behalf of an employer 310. In return, employer 310 provides a salary
to employee 320.” Ans. 7; Final Act. 3 (citing Edrington ¶¶ 22, 76, 80, 93,
96).
To the extent that Appellant’s arguments are based upon the
construction of a “payday loan,” we find these arguments unpersuasive
because the term “payday loan” does not appear in the claims. We further
find the Examiner’s finding of accrued compensation supported by the
Examiner’s cited section of Edrington, which provides that the amount
available to the employee may be based upon past employee hours.
Edrington ¶ 96. Edrington further clarifies that the exact amount to be
loaned may be based upon the “total number of hours logged during the
current pay period when the loan is requested.” Id. ¶ 86. Accordingly, we
sustain the Examiner’s rejection of claims 3, 12, and 21.
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Claims 6, 15, and 24 are argued to be non-obvious because Edrington
does not disclose determining whether to change the schedule based upon
factors including employee performance and employee level. Appeal Br. 19.
Appellant argues that Edrington only determines the employee’s credit
worthiness based upon those factors. Id. The Examiner finds that Edrington
teaches one or more of the claimed set of factors. Final Act. 6 (citing
Edrington ¶¶ 22, 73, 80, 83, 85, 93). The Examiner further finds that the
factors such as employee performance and employee level are used in
Edrington for “the ultimate basis for the eligibility of the payday loan.” Ans.
7.
Claim 6 sets forth the following group of factors used to determine
whether to change the schedule: an employee performance for an employer,
an employee level within the employer, an amount of funds requested, a
purpose of the funds requested, an accrued compensation, and a funds
availability determination. To the extent that Appellant’s arguments are
based upon the construction of a “payday loan,” we find these arguments
unpersuasive because the term “payday loan” does not appear in the claims.
The Examiner’s finding that Edrington teaches or suggests determining
eligibility based on factors such as employee performance and employee
level is supported by the Examiner’s cited sections of Edrington, which
provide that the determination of whether to provide funds to the employee
may be based upon factors such as the past history of promotions for the
employee. Edrington ¶ 73. Accordingly, we sustain the Examiner’s
rejection of claims 6, 15, and 24.
Claims 8, 9, 17, 18, 26, and 27 are rejected as being unpatentable over
Edrington, Woodings, and Ruffolo. Claim 8 recites the further limitation of
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collateral to secure an anticipated compensation (set forth in claim 7), where
“the collateral comprises at least one accrued vacation day of the employee,
[and] responsive to changing the schedule of employer payments, deducting,
by the computer system, the at least one accrued vacation days.” The
Examiner has relied upon Ruffolo for these additional limitations. Final Act.
12.
Appellant argues that one would not combine Ruffolo’s use of paid
time off as collateral to secure anticipated compensation with Edrington’s
payday loan system, because the lender in Edrington would not find paid
time off a useful form of collateral. Appeal Br. 21. Appellant here relies
upon the same arguments against the rejection of these claims as provided
against the rejection of claim 1; i.e., that the lender is a separate entity from
the employer. Because we have found those arguments unpersuasive, we
sustain the Examiner’s rejection of claims 8, 9, 17, 18, 26, and 27.

CONCLUSION
For the above-described reasons, we affirm the Examiner’s rejection
of claims 1–27 as lacking subject matter eligibility under 35 U.S.C. § 101
and as being obvious over the applied references under 35 U.S.C. § 103.

DECISION SUMMARY
In summary:
Claims
Rejected
35 U.S.C. § References/Grounds Affirmed Reversed
1–27 101 Eligibility 1–27
1–7, 10–
16, 19–25
103 Edrington, Woodings 1–7, 10–16,
19–25

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8, 9, 17,
18, 26, 27
103 Edrington,
Woodings, Ruffolo
8, 9, 17, 18,
26, 27

Overall
Outcome
1–27

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