Amos HACMUN et al.Download PDFPatent Trials and Appeals BoardApr 28, 20212021000011 (P.T.A.B. Apr. 28, 2021) Copy Citation 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. 15/172,198 06/03/2016 Amos HACMUN HHLW P0659 6997 122066 7590 04/28/2021 M&B IP Analysts, LLC 150 Morristown Road Suite 205 Bernardsville, NJ 07924-2626 EXAMINER KWONG, CHO YIU ART UNIT PAPER NUMBER 3698 NOTIFICATION DATE DELIVERY MODE 04/28/2021 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): eofficeaction@appcoll.com pair@mb-ip.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte AMOS HACMUN and DOR HESKIA Appeal 2021-000011 Application 15/172,198 Technology Center 3600 ____________ Before RICHARD M. LEBOVITZ, ROBERT A. POLLOCK, and JAMIE T. WISZ, Administrative Patent Judges. LEBOVITZ, Administrative Patent Judge. DECISION ON APPEAL The Examiner rejected the claims under 35 U.S.C. § 101 as lacking patent eligibility. Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the Examiner’s decision to reject the claims. 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 Amos Hacmun and Dor Heskia. Appeal Br. 3. Appeal 2021-000011 Application 15/172,198 2 STATEMENT OF THE CASE There are three independent claims on appeal, claim 1, 13, and 14. Claim 1 is directed to a method; claim 13 is directed to a non-transitory computer readable medium having instructions for carrying out the same method recited in claim 1; claim 14 is directed to a system for carrying out the method recited in claim 1. The Examiner rejected claims 1–24 in the Non-Final Office Action under 35 U.S.C. § 101 “because the claimed invention is directed to a judicial exception . . . without significantly more.” Non-Final Act. 2–3. Appellant did not provide separate arguments for the claims. Claim 1 is therefore selected as representative to decide all the issues on appeal. Claim 1 is copied below with numbered annotations added to refer to the limitations in the claim: 1. A method performed by a computer system coupled to a network for approval of an electronic payment by a credit clearing device (CCD) comprising: [1] receiving, by the computer system, via the network, a first notification based on a payment card used to attempt a financial transaction from the CCD, the first notification containing information [1a] based on the payment card and [1b] the attempted financial transaction; [2] determining, by the computer system, whether the financial transaction requires an external authorization based on at least an analysis of at least a portion of the information contained in the first notification; [3] upon determination that an external authorization is required, [4] identifying, by the computer system, a plurality of user devices that are indicated to have authorization authority with regard to the attempted financial transaction, [4a] at least two of the plurality of user devices each being associated with a respective different user; Appeal 2021-000011 Application 15/172,198 3 [5] sending, by the computer system, over the network a second notification to at least one user device of the at least two user devices of the plurality of user devices; and [6] sending, by the computer system, over the network a third notification to the CCD based on a response of the at least one user device, wherein the response is any one of: [6a] an express approval of the attempted financial transaction, [6b] an express denial of the attempted financial transaction, and [6c] a failure to reply. PATENT ELIGIBILITY Principles of Law Under 35 U.S.C. § 101, an invention is patent-eligible if it claims a “new and useful process, machine, manufacture, or composition of matter.” However, not every discovery is eligible for patent protection. Diamond v. Diehr, 450 U.S. 175, 185 (1981). “Excluded from such patent protection are laws of nature, natural phenomena, and abstract ideas.” Id. The Supreme Court articulated a two-step analysis to determine whether a claim falls within an excluded category of invention. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014); Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 75–77 (2012). In the first step, it is determined “whether the claims at issue are directed to one of those patent-ineligible concepts.” Alice, 573 U.S. at 217. If it is determined that the claims are directed to an ineligible concept, then the second step of the two-part analysis is applied in which it is asked “[w]hat else is there in the claims before us?” Id. (alteration in original) (citation and quotation marks omitted). The Court explained that this step involves: a 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.” Appeal 2021-000011 Application 15/172,198 4 Alice, 573 U.S. at 217–18 (alteration in original) (citing from Mayo, 566 U.S. at 75–77). Alice, relying on the analysis in Mayo of a claim directed to a law of nature, stated that in the second part of the analysis, “the elements of each claim both individually and ‘as an ordered combination’” must be considered “to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Alice, 573 U.S. at 217 (citation omitted). The PTO published revised guidance on the application of 35 U.S.C. § 101, USPTO’s January 7, 2019 Memorandum, 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Eligibility Guidance”) (we cite to the Federal Register where the Eligibility Guidance was published). This guidance provides additional direction on how to implement the two-part analysis of Mayo and Alice. Step 2A, Prong One, of the Eligibility Guidance looks at the specific limitations in the claim to determine whether the claim recites a judicial exception to patent eligibility. In Step 2A, Prong Two, the claims are examined to identify whether there are additional elements in the claims that integrate the exception in a practical application, namely, is there a “meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.” Eligibility Guidance, 84 Fed. Reg. (Step 2A, Prong Two). If the claim recites a judicial exception that is not integrated into a practical application, then as in the Mayo/Alice framework, Step 2B of the Eligibility Guidance instructs us to determine whether there is a claimed “inventive concept” to ensure that the claims define an invention that is Appeal 2021-000011 Application 15/172,198 5 significantly more than the ineligible concept itself. Eligibility Guidance, 84 Fed. Reg. 56. With these guiding principles in mind, we proceed to determine whether the claimed subject matter in this appeal is eligible for patent protection under 35 U.S.C. § 101. Discussion Claim 1 is directed to a method for approval of an electronic payment by a credit clearing device. A method is a “process,” which is one of the broad statutory categories of patent-eligible subject matter listed in 35 U.S.C. § 101. Therefore, following the first step of the Mayo/Alice analysis, we find that the claim is directed to a statutory class of invention. We thus proceed to Step 2A, Prong One, of the 2019 Eligibility Guidance. Step 2A, Prong One In Step 2A, Prong One, of the Eligibility Guidance, the specific limitations in the claim are examined to determine whether the claim recites a judicial exception to patent eligibility, namely, whether the claim recites an abstract idea, law of nature, or natural phenomenon. The Eligibility Guidance directs each limitation in the claim to be examined to determine whether it recites an abstract idea. 84 Fed. Reg. 54. The Examiner found that the notifications (steps [1], [5], [6]), external authorization (step [2]), and device identification (step [4]) steps recited in claim 1 could be performed manually by a person. Non-Final Act. 5–6. The Examiner also found that the claims cover the commercial interaction of processing a transaction authorization, which the Examiner identified as Appeal 2021-000011 Application 15/172,198 6 certain methods of organizing human activity, a category of abstract ideas recognized by the courts as an abstract idea and listed as such in the Eligibility Guidance. Id. at 6–7. The Examiner’s determination is in accord with the Eligibility Guidance. The claimed method is for approving an electronic payment by a credit clearing device (“CCD”). The Specification provides no guidance on what is a CCD, but because it is claimed as a device, we interpret it to mean any device from which a party seeks credit from to complete a financial transaction, such as credit card reader terminal or an automatic bank teller machine. In the first step [1] of the claim, a “first notification” is received when a financial transaction is attempted. We understand this to mean, for example, that a credit card is inserted into a credit card reader or automatic bank teller. The notification is received by a “computer system” over a network. The notification contains payment card information and the attempted transaction. Thus, this step of the claim can be characterized as data gathering because the computer system is gathering data or information about the transaction. It is determined in the second step [2] of the claim whether the financial transaction requires an external authorization. This determination is based on the information gathered in step [1], but the claim does not explain how the determination to seek external authorization is made. Upon determining that external authorization is required, the computer system in step [4] identifies a plurality of user devices that are Appeal 2021-000011 Application 15/172,198 7 indicated to have authorization authority for the transaction. The devices are associated with different users. A second notification is then sent by the computer system in step [5] to one of the user devices. The next step [6] of the claim sends a third notification to the CCD device based on the response by the user device. The response is “any one of: [6a] an express approval of the attempted financial transaction, [6b] an express denial of the attempted financial transaction, and [6c] a failure to reply.” The content of the second and third notifications is not recited in the claim. However, based on the claim as a whole, we understand that the second notification is to notify the user of the attempted financial transaction and request approval or denial of the transaction, and that the third notification is to inform the CCD of the user’s response, letting the CCD know whether the transaction has been approved. We consider steps [1]–[6] of the claim to define the abstract idea because each of these steps are integral to obtaining approval or denial of the financial transaction. Appellant argues that “the claims are not directed to commercial interactions or managing personal behavior or relationships or interactions between people. People do not interact in the claimed method, only computers and mobile devices. Indeed, there is no action actually required by any person per the claimed method.” Appeal Br. 10–11. This argument does not persuade us that the Examiner erred in determining that the claim recites a method of organizing human activity. Appellant provides no evidence from either the Eligibility Guidance or court cases that an actual human actor must participate in the claim for it be Appeal 2021-000011 Application 15/172,198 8 classified as a method of organizing human activity, nor do we discern any. Rather, a claim can recite a method of organizing human activity when the claim is performed for the benefit of a human. In Bozeman Financial LLC v. Federal Reserve Bank of Atlanta, 955 F.3d 971 (Fed. Cir. 2020), the court found a method for detecting fraud in financial transactions during a payment clearing process to be patent-ineligible. The claim comprised receiving records of electronic financial transactions, determining matches between parameters in records, and sending notifications, none of which steps required a human. Id. Despite the absence of a human actor, the court found the claim to be patent-ineligible because it represented “a long- standing commercial practice” of “verifying a transaction to avoid fraud. Bozeman, 955 F.3d at 979. The claim here is also for avoiding fraudulent transactions, the same type of long-standing commercial practice described in Bozeman to be patent-ineligible. The rejected claim also comprises similar steps to the claim in Bozeman. Moreover, Appellant’s argument that “there is no action actually required by any person per the claimed method” is incorrect because the claim sends a notification to a user device (step [5]) and receives a response from the user device (step [6]); these steps clearly encompass a human user of the device receiving the notification and sending a response to it. Consequently, for the foregoing reasons, we are unpersuaded by Appellant’s arguments that the Examiner erred in finding that the claim recites the abstract idea of certain methods of organizing human activity. Because we find that the Examiner properly found that claim 1 recites an abstract idea, we proceed to the next step in the analysis of determining whether the abstract idea is integrated into a practical application. Appeal 2021-000011 Application 15/172,198 9 Step 2A, Prong Two Prong Two of Step 2A under the Eligibility Guidance asks whether there are additional elements that integrate the exception into a practical application. We must look at the claim elements individually and “as an ordered combination” to determine whether the additional elements integrate the recited abstract idea into a practical application. As explained in the Eligibility Guidance, integration may be found when an additional element “reflects an improvement in the functioning of a computer, or an improvement to other technology or technical field” or “applies or uses the judicial exception in some other 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.” Eligibility Guidance, 84 Fed. Reg. at 55. Appellant states that “the claims provide for an improvement in the functioning of computer system and other technology as used to authorize financial transactions and apply any judicial exception to effect improved operation by preventing fraud in an automated manner.” Appeal Br. 9. Appellant argues that the computer is used to provide “security” by protecting against “granting improper access” which “overcomes a technological problem with computers.” Id. at 9–10. Appellant further states that the claims “make the computer system overall more secure, prevents fraudulent computer access, improves computer security, and reduces trouble for all the users of the computer system, and so they are directed to allowable subject matter.” Id. at 10. Appellant contends that “the individual claim elements are ‘integrated into a practical application’ in that any Appeal 2021-000011 Application 15/172,198 10 calculation/determination is not the end result but rather is used for subsequent steps so as to reduce the likelihood of a transaction being fraudulent or to otherwise insure that a payment card being used for a transaction is properly being so used.” Id. at 11. Appellants cites a number of Federal Circuit cases in which patent-eligibility of claims was decided, stating that, similarly, the rejected claims here “involve a concrete way of solving a technical problem presented by use of computer technology.” Id. at 12. Similar arguments are made throughout the Appeal Brief: Here the claims clearly solve problems identified in the background of the instant application with computers and networks. Computers simply have many problems related to security. Such have been revealed lately by the various large scale data breaches reported in the news on what seems like a regular basis. Appeal Br. 12. However, the instant application the differences between the claims and the prior art reflect a technology-specific problem and solution. Indeed, the method as now claimed is narrowly tailored and rooted in computer technology. In particular, it improves the computer system by reducing the possibility of fraudulent misuse of the computer system. Appeal Br. 13. The Examiner states that the claimed invention at best provided an improved transaction authorization method. However, even if the invention as claimed was so limited, arguendo, which Appellants are not admitting, such is achieved through proper technical means integrated into a practical application much the same way as improved software improves a computer system by being a better series of steps that are performed to achieve a desired goal. Appeal Br. 13–14. Appeal 2021-000011 Application 15/172,198 11 Appellants’ claims, like those in Enfish, are directed to a specific implementation of a solution in the computer art, namely preventing unauthorized use of payment card when such cards are used for payment via computers and networks. This belies the Examiner’s comments in the Response to Arguments and, as such, Appellants’ claims do not recite abstract an idea for the same reasons that the claims in Enfish did not recite an abstract idea. Appeal Br. 18. Appellant also complains that the Examiner’s analysis is not proper and has not looked at the claims as a whole. Appeal Br. 17. Missing from Appellant’s argument, and discussions of various Federal Circuit cases involving patent-eligibility, is an identification of the actual steps in the rejected claim that integrate the judicial exception into a practical application. Appellant, as indicated above, states the claim improves the computer system, solves a problem with the unauthorized use of a credit card, and provides a specific implementation. But Appellant does not point to the specific limitations in the claim that provide the advancement and technical solution asserted by Appellant. To the contrary, Appellant’s argument is stated in vague generalities, directing criticisms at the Examiner for not engaging the claim as a whole, but failing to explain the specific steps in the claim which provide the asserted technical solution. We are aware of all the cases discussed in Appellant’s brief and the general eligibility guidance explained to us by Appellant. For example, Appellant refers to Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016), (Appeal Br. 12, 17), Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc., 880 F.3d 1356 (Fed Cir. 2018) (Appeal Br. 12), and BASCOM Glob. Internet Servs. v. AT&T Mobility LLC, 827 F.3d 1341(Fed. Cir. 2016) (Appeal Br. 13) as cases which dictate that their own claims be Appeal 2021-000011 Application 15/172,198 12 found patent-eligible. In each of these cases cited by Appellant, patent- eligibility was found because the claim contained elements beyond the judicial exception which were deemed sufficient to provide patent eligible improvement. In Enfish, 822 F.3d at 1339, the claims were found to recite patent eligible subject matter because “the self-referential table recited in the claims on appeal is a specific type of data structure designed to improve the way a computer stores and retrieves data in memory.” The court in Core Wireless, 880 F.3d at 1359, 1362–1363, determined that a claim directed to a computing device comprising a display screen “configured to display on the screen a menu listing one or more applications” and “to display on the screen an application summary that can be reached directly from the menu” was patent-eligible because the claim “restrains the type of data that can be displayed in the summary window” and specified “a particular manner by which the summary window must be accessed.”2 Further, the court found that claim improved the “efficiency of using the electronic device by bringing together ‘a limited list of common functions and commonly accessed stored data,’ which can be accessed directly from the main menu.” Id. at 1363. 2 Core Wireless, 880 F.3d at 1359: “the computing device being configured to display on the screen a menu listing one or more applications, and additionally being configured to display on the screen an application summary that can be reached directly from the menu, wherein the application summary displays a limited list of data offered within the one or more applications, each of the data in the list being selectable to launch the respective application and enable the selected data to be seen within the respective application, and wherein the application summary is displayed while the one or more applications are in an un-launched state.” Appeal 2021-000011 Application 15/172,198 13 In BASCOM, 827 F.3d at 1350, the claimed subject matter was patent- eligible under 35 U.S.C. § 101 because the claims were found to “carve out a specific location for the filtering system (a remote ISP server) and require the filtering system to give users the ability to customize filtering for their individual network accounts.” Bascom, 827 F.3d at 1351. The court stated that while filtering content was “already a known concept,” the claims “recite a specific, discrete implementation of the abstract idea of filtering content.” Id. at 1350. In each of these cases, as recognized by Appellant (Appeal Br. 12), the court examined the specific limitations in the claim to determine if there was a limitation beyond the judicial exception which provided a basis for patent eligibility. In contrast, here, Appellant has not identified any limitation in the claim that makes the abstract idea patent-eligible under Section 101, but rather characterizes the claimed invention in generalities without reference to a specific limitation in the claim. Thus, we find Appellant’s arguments inadequate to distinguish any of the cases cited in their brief nor the eligibility principles described therein. Appellant contends that “the invention as claimed is directed to steps that are not how humans would or have organized their commercial activity amongst themselves. Rather, such activity would be organized very differently. As such, it is clear that the invention is directed solely to a technological problem in the realm of computers and networks that people do not and would not perform.” Appeal Br. 15. The issue is not whether the steps are organized differently from how a human would have organized the activity. That issue might be relevant to a Appeal 2021-000011 Application 15/172,198 14 determination as to whether the claims are new and unobvious,3 but that is not the test for patent eligibility. As explained in 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” and the steps recited in claim 1 are directed to the abstract idea of organizing human activity. The issue is also not whether the claim is accomplished on a computer. Performing steps on a generic computer, without improving the computer functionality, is not sufficient to confer patent eligibility on a claim. In re Abel, 838 Fed.Appx. 558, 562 (Fed. Cir. 2021) (non- precedential) (“The abstract idea itself encompasses most of what is found in claim 1. What remains is merely implementation on conventional computers.”); NetSoc, LLC v. Match Group, LLC, 838 Fed.Appx. 544, 549 (Fed. Cir. 2020) (non-precedential) (“The claim limitations fail to add a technological improvement to the computer or otherwise provide ‘something more’ to ‘transform’ the claims. See [Alice] at 217, 134 S.Ct. 2347. Rather, the ’107 patent claims are quintessential ‘apply it with a computer’ claims. See id. at 223, 134 S.Ct. 2347 (‘Stating an abstract idea while adding the words ‘apply it with a computer’ simply combines those two steps, with the 3 “Maritz also argues that the claims are eligible under § 101 because they recite novel and nonobvious subject matter. . . . However, even if ‘[w]e may assume that the techniques claimed are ‘[g]roundbreaking, innovative, or even brilliant,’ ... that is not enough for eligibility.” See, e.g., SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018) (quoting Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591, 133 S.Ct. 2107, 186 L.Ed.2d 124 (2013)); see also id. (concluding that it is not ‘enough for subject-matter eligibility that claimed techniques be novel and nonobvious in light of prior art’).” cxLoyalty, Inc. v. Maritz Holdings Inc., 986 F.3d 1367, 1378 (Fed. Cir. 2021). Appeal 2021-000011 Application 15/172,198 15 same deficient result.’).)” Appellant has not established the claimed method results in an improvement in computer functionality. The steps recited in claim 1 are patent-ineligible because they are stated in a “result-oriented way,” in which the desired result of the step is recited, without explaining how the result is accomplished. For example, step [2] recites “determining, by the computer system, whether the financial transaction requires an external authorization based on at least an analysis of at least a portion of the information contained in the first notification,” but there is no recitation as to how this determination is made. As explained in Dropbox, Inc. v. Synchronoss Technologies, Inc., 815 Fed.Appx. 529, 533 (Fed. Cir. 2020) (nonprecedential): The patent has to describe how to solve the problem in a manner that encompasses something more than the “principle in the abstract.” See [ChargePoint, Inc. v. SemaConnect, Inc., 920 F.3d 759, 769 (Fed. Cir. 2019)] (explaining that an invention may not be patent eligible if the “claims ‘were drafted in such a result-oriented way that they amounted to encompassing the ‘principle in the abstract’ no matter how implemented’” (quoting Interval Licensing LLC v. AOL, Inc., 896 F.3d 1335, 1343 (Fed. Cir. 2018))). Dropbox, 815 Fed.Appx. at 533. Because we find that the abstract idea is not integrated into a practical application under Step 2, Prong Two, we proceed to Step 2B of the analysis. Step 2B Step 2B of the Eligibility Guidance asks whether there is an inventive concept. In making this Step 2B determination, we must consider whether there are specific limitations or elements recited in the claim “that are not well-understood, routine, conventional activity in the field, which is Appeal 2021-000011 Application 15/172,198 16 indicative that an inventive concept may be present” or whether the claim “simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception, indicative that an inventive concept may not be present.” 84 Fed. Reg. 56 (footnote omitted). Appellant has not provided evidence that the elements beyond the judicial exception, such as the computer system, the network, the CCD, and the user devices are arranged in a unique and inventive way. Rather, these elements appear to be performing their functions generically and conventionally for what they were designed to do. Consistently, the Specification states that the “various embodiments may be implemented as hardware, firmware, software, or any combination thereof,” and cites conventional hardware to do so. Spec. ¶ 32. Because Appellant has not provide adequate evidence of a non- conventional and inventive arrangement of the elements in the claim beyond the judicial exception, we are compelled to affirm the rejection of claim 1 as patent-ineligible. Claims 2–24 are not argued separately and fall with claim 1. 37 C.F.R. § 41.37(c)(1)(iv). CONCLUSION In summary: Claims Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 1–24 101 Eligibility 1–24 Appeal 2021-000011 Application 15/172,198 17 TIME PERIOD 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 Copy with citationCopy as parenthetical citation