Ex Parte Cataline et al

Patent Trials and Appeals Board

Apr 10, 2019

11717057 - (D) (P.T.A.B. Apr. 10, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/717,057 03/13/2007
131244 7590 04/11/2019
Hunton Andrews Kurth LLP/JPMorgan Chase
Intellectual Property Department
2200 Pennsylvania A venue, NW
Suite 800
Washington, DC 20037
FIRST NAMED INVENTOR
Glen R. Cataline
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
47004.000464 9462
EXAMINER
KHATTAR, RAJESH
ART UNIT PAPER NUMBER
3693
MAIL DATE DELIVERY MODE
04/11/2019 PAPER
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.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte GLEN R. CATALINE,
WILLIAM SMITH RIELLY,
MARK ROBERT SHEEHAN, and
WILLIAM SCOTT WALLACE
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Technology Center 3600
Before HUBERT C. LORIN, BIBHU R. MOHANTY, and
TARA L. HUTCHINGS, Administrative Patent Judges.
LORIN, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Glen R. Cataline et al. (Appellants) seek our review under 35 U.S.C.
§ 134(a) of the Final Rejection of claims 58, 60-62, 64---69, 72-79, 81, 84--
88, and 90. We have jurisdiction under 35 U.S.C. § 6(b).
1 The Appellants identify JPMorgan Chase Bank, N.A. as the real party in
interest. App. Br. 1.
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SUMMARY OF DECISION
We AFFIRM but denominate the affirmance as a New Ground of
Rejection pursuant to 37 C.F.R. § 4I.50(b).
THE INVENTION
Claim 58, reproduced below, is illustrative of the subject matter on
appeal.
58. A method for conducting financial transactions over a
computerized network, the method comprising the steps of
a data processing system comprising at least one computer
processor receiving a request from a user to conduct a financial
transaction with a party;
the data processing system obtaining real-time financial
information relating to the financial transaction in a first format;
the data processing system translating the real-time financial
information from the first format to a second format required for
processing by the data processing system;
the data processing system identifying, without human
interaction and based on the real-time financial information in the
second format, an optimal payment network from a plurality of
available payment networks to meet at least one transaction rule;
the data processing system determining a third format for
financial information required by the optimal payment network;
the data processing system automatically translating the real-
time financial information from the second format to the third format;
the data processing system confirming that the financial
transaction can be executed by at least one of the party and the user,
compnsmg
sending a notice of the financial transaction to each of
the party and the user; and
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receiving a confirmation from each of the party and the
user that it can execute the financial transaction; and
the data processing system initiating the financial transaction
in the third format using the optimal payment network.
THE REJECTION
The following rejection is before us for review:
Claims 58, 60-62, 64--69, 72-79, 81, 84--88, and 90 are rejected under
35 U.S.C. § 101 for claiming patent-ineligible subject matter.
ISSUE
Did the Examiner err in rejecting claims 58, 60-62, 64--69, 72-79, 81,
84--88, and 90 under 35 U.S.C. § 101 for claiming patent-ineligible subject
matter?
ANALYSIS
The rejection of claims 58, 60-62, 64-69, 72-79, 81, 84-88, and 90 under
35 USC§ 101 for claiming patent-ineligible subject matter.
Representative claim
The Appellants argued these claims as a group. App. Br. 6-11. We
select claim 58 (reproduced above) as the representative claim for this
group, and the remaining claims 60-62, 64--69, 72-79, 81, 84--88, and 90
stand or fall with claim 58. 37 C.F.R. § 4I.37(c)(l)(iv).
Preliminary comment
In their briefs, the Appellants refer to prior USPTO guidance, "July
2015 Update on Subject Matter Eligibility," 80 Fed. Reg. 45429 (July 30,
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2015) (App. Br. 6 and 7) and "May 2016 Subject Matter Eligibility Update,"
81 Fed. Reg. 27381-27382 (May 6, 2016) (App. Br. 7).
Said guidance has been superseded by the 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(hereinafter "2019 Revised 101 Guidance"). 2019 Revised 101 Guidance 51
("Eligibility-related guidance issued prior to the Ninth Edition, R-08.2017,
of the MPEP (published Jan. 2018) should not be relied upon.").
Accordingly, our analysis will not address the sufficiency of the
Examiner's rejection against the cited prior guidance. Rather, our analysis
will comport with the 2019 Revised 101 Guidance.
Introduction
35 U.S.C. § 101 provides that "[w]hoever 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."
In that regard, claim 5 8 covers a "process" and is, thus, statutory
subject matter for which a patent may be obtained. 2 This is not in dispute.
However, the§ 101 provision "'contains an important implicit
exception: Laws of nature, natural phenomena, and abstract ideas are not
patentable."' Alice Corp. v. CLS Banklnt'l, 573 U.S. 208,216 (2014)
2 This corresponds to Step 1 of the 2019 Revised 101 Guidance which
requires determining whether a "claim is to a statutory category." 2019
Revised 101 Guidance 53; see also id. at 53-54 ("[C]onsider[] whether the
claimed subject matter falls within the four statutory categories of patentable
subject matter identified by 35 U.S.C. [§] 101 .... ").
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(quoting Ass 'nfor Molecular Pathology v. Myriad Genetics, Inc., 569 U.S.
576, 589 (2013)).
In that regard, notwithstanding claim 58 covers statutory subject
matter, the Examiner has raised a question of patent-eligibility on the ground
that claim 58 is directed to an abstract idea. Eligibility is a question of law
based on underlying facts. SAP Am. v. Investpic, LLC, 890 F.3d 1016, 1020
(Fed. Cir. 2018).
Alice identifies a two-step framework for determining whether
claimed subject matter is directed to an abstract idea. Alice, 573 U.S. at 217.
Alice step one - the "directed to" inquiry
According to Alice step one, "[ w ]e must first determine whether the
claims at issue are directed to a patent-ineligible concept." Id. at 218
( emphasis added).
The Examiner determined that claim 5 8 is
directed to the abstract idea of receiving financial information
relating to a financial transaction in first format, translating to a
second format, identifying an optimal payment network from a
plurality of available payment network to meet at least one
transaction rule, translating financial information from a second
format to a third format and initiating the financial transaction
in the third format using the optimal network after informing
and receiving confirmation from each of the party and the user.
Ans. 2. The Examiner also indicated that "[t]he concept of carrying out a
financial transaction is well-established and long prevalent in our history of
commerce. Thus, the claim is directed to a fundamental economic
. " A 4 practice. . . . ns. .
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The Appellants contend that
[t]he claims, however, are not directed to hedging or mitigating
settlement risk, creating a contractual relationship, or collecting
and comparing known information.
App. Br. 7 ( emphasis omitted). According to the Appellants,
the claims here recite improvements to conventional systems
and methods for transaction processing. Specifically, the claims
require the translation of real-time financial information from
a first format to a second format that is required for processing
by the data processing system. It further translates the real-time
financial information from the second format to a third format
that is required by the optimal payment network. This
translation results in an improvement in payment processing:
That is, the capability provided by the incoming and the
outgoing translator is to allow the input of many
different formats and translate these formats into the
single format or the single record format that the
payment optimizer itself speaks; and thereafter output the
data in a suitable format. Once the payment optimizer
obtains the translated information through the incoming
translator, then the payment optimizer can interrogate
who is the destination, what is the timing necessary for
the particular situation, what is the dollar amount, and
who is the person, etc., for example. Once the payment
optimizer determines what is the most efficient way to
settle the transaction then the payment optimizer
actually turns and translates the data into that format.
That is, the outgoing translator translates the data into the
language of the particular system or mechanism that will
complete or settle the transaction. The incoming
translator 512 and the outgoing translator 516 might be in
the form of a suitable module, for example.
Appl'n, page 25, lines 8-20 (emphasis added). Based on the
improvements realized through the non-conventional and non-
generic arrangement of known, conventional pieces, like the
claims in [Bascom Global Internet Services, Inc. v. AT&T
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Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016)], these claims are
also statutory.
App. Br. 8-9.
Accordingly, there is a dispute over what claim 58 is directed to. Is it
directed to "carrying out a financial transaction" (Final Act. 4) or
"improvements to conventional systems and methods for transaction
processing" (App. Br. 8)?
Claim Construction3
We consider the claim as a whole 4 giving it the broadest reasonable
construction5 as one of ordinary skill in the art would have interpreted it in
light of the Specification 6 at the time of filing.
3 "[T]he important inquiry for a § 101 analysis is to look to the claim."
Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336,
1345 (Fed. Cir. 2013). "In Bancorp Servs., L.L.C. v. Sun Life Assurance Co.
of Can., 687 F.3d 1266, 1273 (Fed. Cir. 2012), the court observed that
'claim construction is not an inviolable prerequisite to a validity
determination under § 101.' However, the threshold of§ 101 must be
crossed; an event often dependent on the scope and meaning of the claims."
Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1347--48
(Fed. Cir. 2015).
4 "In determining the eligibility of respondents' claimed process for patent
protection under § 101, their claims must be considered as a whole."
Diamond v. Diehr, 450 U.S. 175, 188 (1981).
5 2019 Revised 101 Guidance 5 3 n.14 (If a claim, "under its broadest
reasonable interpretation .... " ( emphasis added)).
6 "First, it is always important to look at the actual language of the claims ...
. Second, in considering the roles played by individual limitations, it is
important to read the claims 'in light of the specification."' Smart Sys.
Innovations, LLC v. Chicago Transit Authority, 873 F.3d 1364, 1378 (Fed.
Cir. 2017) (J. Linn, dissenting-in-part and concurring-in-part), citing Enfzsh,
LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016), among
others.
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Claim 5 8 calls for a "method for conducting financial transactions
over a computerized network." The computerized network comprises "a
data processing system," which in tum comprises a "computer processor."
58. A method for conducting financial transactions over a
computerized network, ... :
a data processing system comprising at least one
computer processor receiving [information A J;
the data processing system obtaining [information BJ
relating to [ information A J in a first format;
the data processing system translating [information BJ
from the first format to a second format required for processing
by the data processing system;
the data processing system identifying, without human
interaction and based on [information BJ in the second format,
[ information CJ;
the data processing system determining a third format
for [Information BJ required by [Information CJ;
the data processing system automatically translating the
[information BJ from the second format to the third format;
the data processing system confirming [Information DJ,
compnsmg
sending [Information EJ to each of the party and
the user; and
receiving [Information FJ from each of the party
and the user ... ; and
the data processing system initiating the financial
transaction in the third format using the optimal payment
network.
Claim 58 ( emphasis added), where
Information A is "a request from a user to conduct a financial
transaction with a party";
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Information B is "real-time financial information";
Information C is "an optimal payment network from a plurality of
available payment networks to meet at least one transaction rule";
Information D is "that the financial transaction can be executed by at
least one of the party and the user";
Information E is "a notice of the financial transaction"; and,
Information F is "a confirmation ... that it can execute the financial
transaction."
As for the information-processing steps themselves, as claimed, the
"data processing system"/"computer processor" is called upon to "conduct[]
financial transactions" by
(1) "receiving a request from a user to conduct a financial transaction
with a party";
(2) "obtaining real-time financial information relating to the financial
transaction in a first format";
(3) "translating the real-time financial information from the first format to
a second format required for processing by the data processing
system";
( 4) "identifying, without human interaction and based on the real-time
financial information in the second format, an optimal payment
network from a plurality of available payment networks to meet at
least one transaction rule";
( 5) "determining a third format for financial information required by the
optimal payment network";
( 6) "translating the real-time financial information from the second
format to the third format";
(7) "confirming that the financial transaction can be executed by at least
one of the party and the user, comprising"
a. "sending a notice of the financial transaction to each of the
party and the user; and"
b. "receiving a confirmation from each of the party and the user
that it can execute the financial transaction; and"
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(8) "initiating the financial transaction in the third format using the
optimal payment network."
Claim 58.
Step (7) describes a pre-transaction routine whereby a notice of the
financial transaction is sent to each of the party and the user and, in
response, a confirmation is received from each of the party and the user that
it can execute the financial transaction, thereby "confirming that the
financial transaction can be executed by at least one of the party and the
user." This is a common approval process and reasonably characterized as
insignificant post-solution activity
According to step (8), "the financial transaction [is initiated] in the
third format using the optimal payment network." This, too, is common.
Financial transactions are normally initiated at a payment network. There is
no definition in the Specification for the term "optimal." We see discussion
in the Specification about a "payment optimizer" but the claim is not so
limited. See Spec. 30: 1-32: 17. Accordingly, we give it its ordinary and
customary meaning, which is "most favorable or desirable" (Webster's New
World Dictionary 950 (Third College Edition, 1988). Thus, this step simply
calls on a financial transaction to be initiated at a desired payment network
in the format it accepts. This is a common payment exercise, e.g., by using a
"credit card" (Spec. 30:8) and reasonably characterized as insignificant
post-solution activity.
Steps (1) to (6) describe a procedure occurring prior to approval and
initiation of payment. According to claim 1, during this pre-
approval/payment-initiation, real-time financial information relating to the
financial transaction is (1) received, (2) obtained in a first format; (3)
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translated into a second format required for processing by the data
processing system; ( 5) determined to have a third format required by an
optimal payment network; and ( 6) translated from the second to said third
format required by the "optimal" (i.e., desired) payment network. ( 4) The
"optimal" (i.e., desired) payment network is identified from a plurality of
available payment networks to meet at least one transaction rule based on
the real-time financial information translated in the second format.
Steps (1) and (2), which call for receiving data and obtaining said data
in a first format, are information-processing functions commonly associated
with generic data processing systems/computer processors. Cf Intellectual
Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1330 (Fed. Cir. 2017)
("Remotely accessing and retrieving user-specified information is an age-old
practice that existed well before the advent of computers and the Internet.")
Steps (4) and (5), which call for identifying a desired payment
network according to any "transaction rule based on the real-time financial
information translated in the second format" and determining the data to
have a third format required by an optimal payment network, ask of the
"data processing system" nothing beyond its common data-processing
function. No details as to how the data processing system performs the
identifying and determining functions are provided. Accordingly, it is
reasonable to find that the data processing system performs said tasks in the
manner such systems have long been known to perform them. Moreover,
these are conventional activities. Cf Return Mail, Inc. v. United States
Postal Service, 868 F.3d 1350, 1368 (Fed. Cir. 2017) ("The claims only
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recite routine, conventional activities such as identifying undeliverable mail
items, decoding data on those mail items, and creating output data.")
Step (3) calls for "translating" the real-time financial data from a first
format into a second format required for processing by the data processing
system. Step (6) calls for "translating" the real-time financial data from the
second format into a third format required by the "optimal" (i.e., desired)
payment network.
The Specification provides no definition for the claim term
"translating," although it appears to be used in the context of computerized
procedures. See Spec. 24:1-25:3 ("purpose of the incoming translator 512 is
to input unique types of transactions from a variety of different data sources
and convert them into a standardized dataset for processing by the payment
optimizer 514. ") In that context, "translating" ordinarily and customarily
means "converting." See Webster's New World Dictionary of Computer
Terms 538 (8th ed. 2000), entry "translate" ("To convert a data file from one
file format to another, or to convert a program from one programming
language or operating system to another.").
No details as to how the data processing system performs the two
translating functions are provided. The format from which and to which the
real-time financial information is converted from and converted to is left
open - except as to that required by the data processing system and,
subsequently, a desired payment system, which themselves are unspecified.
Cf Two-Way Media Ltd. v. Comcast Cable Commc 'ns, LLC, 874 F.3d 1329,
1337 (Fed. Cir. 2017) ("Claim 1 recites a method for routing information
using result-based functional language. The claim requires the functional
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results of 'converting,' 'routing,' 'contro Hing,' 'monitoring,' and
'accumulating records,' but does not sufficiently describe how to achieve
these results in a non-abstract way.")
Accordingly, the claim term "translating" is reasonably broadly
construed to cover converting in no particular way.
Accordingly, we reasonably broadly construe claim 1 as being
directed to twice converting financial data prior to approval and initiation of
payment implemented on a generic computer system.
The Abstract Idea 7
Above, where we reproduce claim 58, we identify in italics the
limitations we believe recite an abstract idea. 8 Based on our claim
construction analysis (above), we determine that the identified limitations
describe twice converting financial data prior to approval and initiation of
payment.
Here, given that the claim term "translating" is reasonably broadly
construed to cover converting in no particular way, claim 1 not only covers
the common information-conversion function associated with generic data
7 This corresponds to Step 2A of the 2019 Revised 101 Guidance. Step 2A
determines "whether a claim is 'directed to' a judicial exception," such as an
abstract idea. 2019 Revised 101 Guidance 53. Step 2A is two prong
mqmry.
8 This corresponds to Prong One (a) of Step 2A of the 2019 Revised 101
Guidance. "To determine whether a claim recites an abstract idea in Prong
One, examiners are now to: (a) Identify the specific limitation(s) in the
claim under examination (individually or in combination) that the examiner
believes recites an abstract idea .... " 2019 Revised 101 Guidance 54.
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processing systems but, given the lack of detail, can be characterized as a
mental process. See 2019 Revised 101 Guidance, n.15 ( citing Synopsys, Inc.
v. Mentor Graphics Corp., 839 F.3d 1138, 1139, 1149 (Fed. Cir. 2016)
(holding that claims to the mental process of "translating a functional
description of a logic circuit into a hardware component description of the
logic circuit" are directed to an abstract idea, because the claims "read on an
individual performing the claimed steps mentally or with pencil and
paper")). Cf Alice, 573 U.S. at 218 ("In Benson, for example, this Court
rejected as ineligible patent claims involving an algorithm for converting
binary-coded decimal numerals into pure binary form, holding that the
claimed patent was 'in practical effect ... a patent on the algorithm itself."')
and Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat 'l
Ass 'n, 776 F.3d 1343, 1348 (Fed. Cir. 2014) (finding using a computer to
"translate the shapes on a physical page into typeface characters"
insufficient to confer patent eligibility.).
The claim calls for twice converting financial data prior to approval
and initiation of payment. Payment initiation is a fundamental economic
practice. Performing two converting steps as a prelude to payment initiation
does not affect the character of the payment initiation a fundamental
economic practice. The conversion steps are a matter of evaluation of certain
information, both individually and in combination with the payment
initiation as claimed, that falls within the enumerated "Mental processes"
grouping of abstract ideas set forth in the 2019 Revised 101 Guidance.
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Improvement in the Functioning of a Computer9 (Appellants'
Argument)
In terms of the claimed subject matter involving conducting a
financial transaction which is a fundamental economic principle, the
Examiner's characterization of what the claim is directed to is somewhat
similar to our own, albeit our characterization is described at a somewhat
lower level of abstraction. Cf Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229,
1240-41 (Fed. Cir. 2016) ("An abstract idea can generally be described at
different levels of abstraction. As the Board has done, the claimed abstract
idea could be described as generating menus on a computer, or generating a
second menu from a first menu and sending the second menu to another
location. It could be described in other ways, including, as indicated in the
specification, taking orders from restaurant customers on a computer.") In
terms of the claimed subject matter being directed to "translating" and that
that is akin to "[ t ]he concept of collecting and comparing known
information" (Final Rej. 4 ), the Examiner's characterization of what the
9 This corresponds to Prong Two ("If the Claim Recites a Judicial Exception,
Evaluate Whether the Judicial Exception Is Integrated Into a Practical
Application") of Step 2A of the 2019 Revised 101 Guidance. 2019 Revised
101 Guidance 54. "A claim that integrates a judicial exception into a
practical application will apply, rely on, or use the judicial exception in a
manner that imposes a meaningful limit on the judicial exception, such that
the claim is more than a drafting effort designed to monopolize the judicial
exception." Id. One consideration, implicated here, that is "indicative that
an additional element ( or combination of elements)[] may have integrated
the exception into a practical application" (id. at 55) is if"[ a ]n additional
element reflects an improvement in the functioning of a computer, or an
improvement to other technology or technical field" (id.).
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claim is directed to is somewhat different than ours - we view them as a
mental process.
The Appellants dispute the Examiner's characterization. Presumably,
the Appellants would equally dispute our characterization.
We have reviewed the record and are unpersuaded as to error in our or
the Examiner's characterization of what claim 58 is directed to.
The Appellants argue that the claimed subject matter is directed to an
improvement in computer functionality- albeit in challenging the Alice step
two determination. See, e.g., App. Br. 8 ("Like the claims in Bascom, the
claims here recite improvements to conventional systems and methods for
transaction processing."). The Appellants focus on the claimed translating
steps ( steps (3) and ( 6) per our discussion above) as causing an improvement
in computer functionality. As we explain in more detail below in our Alice
step two analysis, we are unpersuaded that the record supports such a
characterization of what claim 58 is directed to.
It is true that specific asserted improvements in computer capabilities,
when claimed, can render claimed subject matter not directed to an abstract
idea. Cf McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299,
1316 (Fed. Cir. 2016) ("When looked at as a whole, claim 1 is directed to a
patentable, technological improvement over the existing, manual 3-D
animation techniques."). However, there is insufficient evidence in the
record before us that the claimed subject matter reflects any specific asserted
improvement in computer capabilities.
"The 'abstract idea' step of the inquiry calls upon us to look at the
'focus of the claimed advance over the prior art' to determine if the claim's
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'character as a whole' is directed to excluded subject matter."' Affinity Labs
of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016)
(quoting Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed.
Cir. 2016)); see also Enfish, 822 F.3d at 1335; see also Ancora, 908 F.3d at
1347 ("We examine the patent's 'claimed advance' to determine whether the
claims are directed to an abstract idea.") (quoting Finjan, Inc. v. Blue Coat
Sys., Inc., 879 F.3d 1299, 1303 (Fed. Cir. 2018)). "'In cases involving
software innovations, this inquiry often turns on whether the claims focus on
'the specific asserted improvement in computer capabilities ... or, instead,
on a process that qualifies as an "abstract idea" for which computers are
invoked merely as a tool."' Id. (quoting Finjan, 879 F.3d at 1303); see BSG
Tech LLC v. BuySeasons, Inc., 899 F.3d 1281, 1285-86 (Fed. Cir. 2018).
Computers are improved not only through changes in hardware; "[ s ]oftware
can make non-abstract improvements to computer technology .... " Enfzsh,
822 F.3d at 1335; see Finjan, 879 F.3d at 1304 ("We have several times held
claims to pass muster under Alice step one when sufficiently focused on
such improvements.")
The Specification's description of the problem and solution shows the
advance over the prior art by the claimed invention is in the claimed
"translating" of the real-time financial data into two formats. According to
the Specification, "[ e ]lectronic banking may [] suffer from the drawback that
it is difficult for a user to manipulate and move funds when and how the
person desires." Spec. 2 :20-21.
The invention provides systems and methods for
selectable funding or adaptable routing of transactions,
including electronic and other transactions, which enables a
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payment initiator such as a consumer, business or government
entity to select, schedule, maintain and optimize the timing and
technique used to effect various payments, including scheduling
bill payments on time and at "least cost" to the payment enabler
or payment initiator.
In one regard, the invention may permit a payment
initiator to transparently enjoy the benefits of optimization,
once payment schedules and other data are input, since the
system arranges for the best available delivery mechanism to
satisfy the scheduled payment obligations automatically. The
invention may furthermore achieve economies for the bank or
other participating institution, since payment sourcing and
routing may be optimized at the level of the payment enabler, as
well as for the consumer. The invention in another regard may
increase the range and flexibility of available funding sources,
as well as recipients, using an integrated mediation engine.
Spec. 7: 13-8:5. In one embodiment corresponding to the claimed subject
matter, the Specification discloses that:
the payment optimizer 514 operates as an intelligent router that
utilizes the information of the requested transaction to
determine the most effective and efficient means for settling a
transaction under a set of rules and using various inputs. The
processing performed by the optimizer portion 510, as shown in
Fig. 5, begins with the incoming translator 512. The purpose of
the incoming translator 512 is to input unique types of
transactions from a variety of different data sources and convert
them into a standardized dataset for processing by the payment
optimizer 514. As shown in Fig. 5, there are two data
sources shown. As described further below, these data sources
include a financial payment datastore 502 and an online bill pay
(OLBP) datastore 504. These two data sources may store
transaction information in a different format. The translator
standardizes this data utilizing suitable converters, for example.
That is, the capability provided by the incoming and the
outgoing translator is to allow the input of many different
formats and translate these formats into the single format or the
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single record format that the payment optimizer itself speaks;
and thereafter output the data in a suitable format. Once the
payment optimizer obtains the translated information through
the incoming translator, then the payment optimizer can
interrogate who is the destination, what is the timing necessary
for the particular situation, what is the dollar amount, and who
is the person, etc., for example.
Spec. 24:18-25:15.
Accordingly, the invention lies in a process to "increase the range and
flexibility of available funding sources, as well as recipients." Spec. 8:3-5.
The claimed "translating" steps reflect, broadly, that process. Those
"translating" steps are the heart of the invention, not the "data processing
system" or "processor" which, as the Specification indicates, are merely
generic. Cf Intellectual Ventures, 850 F.3d at 1328 ("[T]he heart of the
claimed invention lies in creating and using an index to search for and
retrieve data ... an abstract concept.").
We have carefully reviewed the Specification but can find no
disclosure of an improvement to computer functionality.
Additionally, computerized networks, data processing systems, and
processors were well known generic elements 10 at the time the application
1° Cf Alice, 573 U.S. at 226 ("But what petitioner characterizes as specific
hardware-a 'data processing system' with a 'communications controller'
and 'data storage unit,' for example, see App. 954, 958, 1257-is purely
functional and generic."); Intellectual Ventures I LLC v. Capital One Fin.
Corp., 850 F.3d 1332, 1341 (Fed. Cir. 2017) ("the claims recite [] a generic
computer element-a processor- ... "); and, Interval Licensing LLC v.
AOL, Inc., 896 F.3d 1335, 1347 (Fed. Cir. 2018) ("Interval Licensing does
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was filed. See Spec., e.g., 54:5-7 ("The processing components that make
up the system of the invention may each be in the form of a 'processing
machine,' such as a general purpose computer, for example.").
The "data processing system" and "processor" are part of a
"computerized network" (claim 58). However, the "computerized network"
itself is generic. See, e.g., Spec. 11: 14--19 ("In operation, as illustrated in
Fig. 1, consumers, businesses, government entities and other payment.
initiators may use one or more clients 105 to access the payment system 100
through network 102, for instance through multiple connector providers
(CPs) 110 such as Internet service providers (ISPs) or others. According to
an embodiment of the invention, the clients 105 may be or include, for
instance, a personal computer .... "). Thus, the Specification conveys that
the arrangement (i.e., ordered combination) of these computer elements is
conventional.
The claim provides no structural details 11 that would distinguish the
individual "computerized network," "data processing system," and
"computer processor" from those that were well-known at the time the
application was filed.
not, and cannot, contend that it is arguably inventive to enable a person to
access information over a network through a user interface.")
11 Cf Move, Inc. v. Real Estate Alliance Ltd., 721 F. App'x 950, 954 (Fed.
Cir. 2018) (Nonprecedential) ("Claim 1 is aspirational in nature and devoid
of any implementation details or technical description that would permit us
to conclude that the claim as a whole is directed to something other than the
abstract idea identified by the district court.").
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Functionally, claim 5 8 calls on the "data processing
system"/"computer processor" to "conduct[ ] financial transactions" by
processing certain types information (Information A-F, as identified above)
via steps of "receiving," "obtaining," "translating," "identifying,"
"determining," "translating" a second time, "confirming" by "sending" and
"receiving," said respective different types of information and initiating a
financial transaction.
One difference between the claimed the "data processing system"/
"computer processor" and other well-known data processing systems and
computer processors is in the different types of information being processed.
But such a distinction is, alone, not patentably consequential. This is so
because "[ c ]laim limitations directed to the content of information and
lacking a requisite functional relationship are not entitled to patentable
weight because such information is not patent eligible subject matter under
35 U.S.C. § 101." Praxair Distrib., Inc. v. Mallinckrodt Hosp. Prods. IP
Ltd., 890 F.3d 1024, 1032 (Fed. Cir. 2018).
Based on the record before us, the steps for carrying out the recited
financial data-conversion steps does not ask the "computerized network,"
"data processing system," and "computer processor" to go beyond its
common information-processing functions. While computer-based
instructions can be patentably significant (see Enfzsh and Ancora
Technologies, Inc. v. HTC America, Inc., 908 F.3d 1343 (Fed. Cir. 2018)),
here the instant record does not sufficiently support the view that said steps
have any non-conventional effect on the "computerized network," "data
processing system," and "computer processor," alone or in combination. To
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the contrary, the record supports viewing the inclusion of the phrases
"computerized network," "data processing system," and "computer
processor" as amounting to a mere instruction to implement the recited steps
on a generic computer. Cf Alice, 573 U.S. at 225-26 ("Instead, the claims
at issue amount to 'nothing significantly more' than an instruction to apply
the abstract idea of intermediated settlement using some unspecified, generic
computer.").
Accordingly, within the meaning of the 2019 Revised 101
Guidance, we find there is no integration into a practical application.
We have considered all of the Appellants' arguments challenging the
Examiner's determination under step one of the Alice framework and find
them unpersuasive. For the foregoing reasons, the record supports the
Examiner's determination that claim 58 is directed to an abstract idea.
Alice step two-Does the Claim Provide an Inventive Concept? 12
Step two is "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."' Alice, 573 U.S. at 221 ( quoting Mayo Collaborative Servs.
v. Prometheus Labs., Inc., 566 U.S. 66, 73 (2012)).
12 This corresponds to Step 2B of the 2019 Revised 101 Guidance page 56
("[I]f a claim has been determined to be directed to a judicial exception
under revised Step 2A, examiners should then evaluate the additional
elements individually and in combination under Step 2B to determine
whether they provide an inventive concept (i.e., whether the additional
elements amount to significantly more than the exception itself).").
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In that regard, the Examiner determined, inter alia, the following:
[ t ]he claims do not include additional elements that are
sufficient to amount to significantly more than the judicial
exception because the additional computer elements are recited
at a high level of generality and in doing so provide
conventional computer function that do not add meaningful
limits to practicing the abstract idea.
Final Act. 2-3.
We agree with the Examiner's analysis and determination.
The Appellants' major argument is that the "translating" steps "recite
improvements to conventional systems and methods for transaction
processing." App. Br. 8; see also App. Br. 9 ("the claims recite particular
elements that are explicitly directed to improvements to transaction
processing by incorporating translation of real-time financial data from a
first format to a second format required for processing by the data
processing system.")
Rather than being directed to any specific asserted improvement in
computer capabilities, the record supports the view that the claimed subject
matter is directed to twice converting financial data prior to approval and
initiation of payment implemented on a generic computer system. 13 The
"translating" is claimed in purely conventional terms absent any details
about how it is performed; that is, nothing more is required to translate the
13 See the 2019 Revised 101 Guidance 55 ("The courts have also identified
examples in which a judicial exception has not been integrated into a
practical application: An additional element merely recites the words 'apply
it' (or an equivalent) with the judicial exception, or merely includes
instructions to implement an abstract idea on a computer, or merely uses a
computer as a tool to perform an abstract idea.").
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information from one format to another than to "translat[]." As reasonably
broadly construed, these steps ask of the database processing system nothing
more than converting information from one common format to another, an
information-processing function that was well-known to those of ordinary
skill in the art at the time the application was filed as being associated with
the use of generic computer systems. The difficulty here is that nowhere in
the record is there any suggestion that following the "translating" steps per
se as claimed on a generic computer yields any improvement in computer
functionality.
Above, we noted that specific asserted improvements in computer
capabilities can tum claimed subject away from being directed to an abstract
under step one of the Alice framework. This is consistent with the case law.
See Ancora, 908 F.3d at 1347 ("We have several times held claims to pass
muster under Alice step one when sufficiently focused on such
improvements."). Such an argument, as the Appellants have done here (see
App. Br. 9--11), can also challenge a determination under step two of the
Alice framework. See buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1354--
5 5 (Fed. Cir. 2014 ). "[R ]ecent Federal Circuit jurisprudence has indicated
that eligible subject matter can often be identified either at the first or the
second step of the Alice/Mayo [framework]." 2019 Revised 101 Guidance
53; see also id. at n.17.
Be that as it may, we are unpersuaded that claim 58 presents an
element or combination of elements indicative of a specific asserted
improvement in computer capabilities, thereby rendering the claimed subject
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matter sufficient to ensure that the patent in practice amounts to significantly
more than a patent upon the trading scheme itself.
We have reviewed the Specification and, as explained above, we can
find no suggestion of any improvements to a computer system as a result of
performing the recited steps. The Specification conveys that the Appellants'
invention is focused on "translating" information into two formats, not on
any of the computer elements, individually or in combination. Rather than
focusing on the said elements, the Specification focuses on improving
routing of transactions given different sources, the computer elements being
merely a conduit for performing said routing. Cf In re TL! Commc 'ns LLC
Patent Litig., 823 F.3d 607, 612 (Fed. Cir. 2016) ("Put differently, the
telephone unit itself is merely a conduit for the abstract idea of classifying an
image and storing the image based on its classification. Indeed, the
specification notes that it 'is known' that 'cellular telephones may be utilized
for image transmission,' id. at col. 1 11. 31-34, and existing telephone
systems could transmit pictures, audio, and motion pictures and also had
'graphical annotation capability,' id. at col. 111. 52-59.").
The Appellants cite Bascom (App. Br. 8) and McRO (App. Br. 9-11)
as matching this case. We disagree. Unlike in those decisions, here, no
improvement in computer functionality has been shown. See Bascom, 827
F.3d at 1351 ("[T]he claims may be read to 'improve[ Jan existing
technological process."') (emphasis added) and McRO, 837 F.3d at 1313
("[TJ he claimed improvement here is allowing computers to produce
'accurate and realistic lip synchronization and facial expressions in animated
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characters' that previously could only be produced by human animators.")
( emphasis added).
As discussed above, the Specification evidences the conventionality
of the claimed "computerized network," "data processing system," and
"computer processor." Much like the "data storage unit" and "computer,
coupled to said storage unit" in the claims of Alice (US Patent 7,149,720,
claim 1 ), "the claims here do [ not do] more than simply instruct the
practitioner to implement the abstract idea ... on a generic computer."
Alice, 573 U.S. at 225. For the reasons discussed above, we are unpersuaded
that the record supports interpreting the "translating" steps recited in the
claim as yielding any improvement in technology as the Appellants have
argued.
We cited the Specification in our discussion as intrinsic evidence that
the claimed elements "computerized network," "data processing system,"
and "computer processor" are conventional. In doing so, we have followed
"Changes in Examination Procedure Pertaining to Subject Matter Eligibility,
Recent Subject Matter Eligibility Decision (Berkheimer v. HP Inc.[, 881
F.3d 1360 (Fed. Cir. 2018)]," USPTO Memorandum, Robert W. Bahr,
Deputy Commissioner For Patent Examination Policy, April 19, 2018 (the
"Berkheimer Memo")). The court in Berkheimer held that "[t]he patent
eligibility inquiry may contain underlying issues of fact." Berkheimer, 881
F.3d at 1365 (quoting Mortgage Grader, Inc. v. First Choice Loan Servs.
Inc., 811 F.3d 1314, 1325 (Fed. Cir. 2016) ("The§ 101 inquiry 'may contain
underlying factual issues."')). But the court also held that"[ w ]hen there is
no genuine issue of material fact regarding whether the claim element or
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claimed combination is well-understood, routine, [and] conventional to a
skilled artisan in the relevant field, this issue can be decided on summary
judgment as a matter of law." Id. at 1368 (emphasis added). This
qualification has been subsequently reiterated.
If there is a genuine dispute of material fact, Rule 56 requires
that summary judgment be denied. In Berkheimer, there was
such a genuine dispute for claims 4--7, but not for claims 1-3
and 9 .... [I]n accordance with Alice, we have repeatedly
recognized the absence of a genuine dispute as to eligibility for
the many claims that have been defended as involving an
inventive concept based merely on the idea of using existing
computers or the Internet to carry out conventional processes,
with no alteration of computer functionality.
Berkheimer v. HP Inc., 890 F.3d 1369, 1371-74 (Fed. Cir. 2018) (Order, On
Petition for rehearing en bane, May 31, 2018); see also Aatrix Software, Inc.
v. Green Shades Software, Inc., 890 F.3d 1354, 1368 (Fed. Cir. 2018)
(Order, On Petition for rehearing en bane, May 31, 2018) ("A factual
allegation or dispute should not automatically take the determination out of
the court's hands; rather, there needs to be justification for why additional
evidence must be considered-the default being a legal determination.").
Here, the Specification indisputably shows the claimed "computerized
network," "data processing system," and "computer processor" were
conventional at the time of filing. Accordingly, no genuine issue of material
fact exists as to the well-understood, routine, or conventional nature of the
claimed elements "computerized network," "data processing system," and
"computer processor," individually or in the combination as claimed.
Finally, as to the question of preemption, the Appellants argue that
"the claims do not preempt the alleged abstract idea of carrying out a
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financial transaction, as there remain many other ways of carrying out a
financial transaction that are not within the scope of these claims." App. Br.
11.
The difficulty with this argument is that it confuses the pre-emption
concern with the level of abstraction describing the abstract idea. With
respect to the pre-emption concern, "[ w ]hat matters is whether a claim
threatens to subsume the full scope of a fundamental concept, and when
those concerns arise, we must look for meaningful limitations that prevent
the claim as a whole from covering the concept's every practical
application." CLS Bank Int 'l v. Alice Corp. Pty. Ltd., 717 F .3d 1269, 1281
(Fed. Cir. 2013) (Lourie, J., concurring). Here, said relied-on claim
limitation (i.e., "translating") simply narrows the abstract idea so that it is
described at a lower level of abstraction. It does not render the abstract idea
to which the claim is directed to any less an abstract idea. Pre-emption is
not a separate test.
To be clear, the proper focus is not preemption per se, for some
measure of preemption is intrinsic in the statutory right granted
with every patent to exclude competitors, for a limited time,
from practicing the claimed invention. See 35 U.S.C. § 154.
Rather, the animating concern is that claims should not be
coextensive with a natural law, natural phenomenon, or abstract
idea; a patent-eligible claim must include one or more
substantive limitations that, in the words of the Supreme Court,
add "significantly more" to the basic principle, with the result
that the claim covers significantly less. See Mayo 132 S. Ct. at
1294. Thus, broad claims do not necessarily raise§ 101
preemption concerns, and seemingly narrower claims are not
necessarily exempt.
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Id. See also Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
13 79 (Fed. Cir. 2015) ("[ w ]hile preemption may signal patent ineligible
subject matter, the absence of complete preemption does not demonstrate
patent eligibility."). Because we find the claimed subject matter covers
patent-ineligible subject matter, the pre-emption concern is necessarily
addressed. "Where a patent's claims are deemed only to disclose patent
ineligible subject matter under the Mayo framework, [] preemption concerns
are fully addressed and made moot."
No other persuasive arguments having been presented, we conclude
that no error has been committed in the determination under Alice step two
that claim 5 8 does not include an element or combination of elements
circumscribing the patent-ineligible concept it is directed to so as to
transform the concept into an inventive application.
We have considered all of the Appellants' remaining arguments
(including those made in the Reply Brief) and find them unpersuasive.
Accordingly, because we are not persuaded as to error in the
determinations that representative claim 58, and claims 60-62, 64---69, 72-
79, 81, 84--88, and 90, which stand or fall with claim 58, are directed to an
abstract idea and do not present an "inventive concept," we sustain the
Examiner's conclusion that they are directed to patent-ineligible subject
matter for being judicially-excepted from 35 U.S.C. § 101. Cf LendingTree,
LLC v. Zillow, Inc., 656 F. App'x 991, 997 (Fed. Cir. 2016) ("We have
considered all of Lending Tree's remaining arguments and have found them
unpersuasive. Accordingly, because the asserted claims of the patents in suit
are directed to an abstract idea and do not present an 'inventive concept,' we
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hold that they are directed to ineligible subject matter under 35 U.S.C. §
101."); see, e.g., OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1364
(Fed. Cir. 2015); FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089,
1098 (Fed. Cir. 2016).
Given our characterization of the abstract idea to which claim 58 is
directed is somewhat different from that of the Examiner, we denominate
our affirmance as a new ground of rejection.
DECISION
The decision of the Examiner to reject claims 58, 60-62, 64---69, 72-
79, 81, 84--88, and 90 is affirmed. We denominate the affirmance as a new
ground of rejection.
NEW GROUND
This Decision contains new grounds of rejection pursuant to 37 C.F.R.
§ 4I.50(b). 37 C.F.R. § 4I.50(b) provides "[a] new ground of rejection
pursuant to this paragraph shall not be considered final for judicial review."
37 C.F.R. § 4I.50(b) also provides that the Appellants, WITHIN TWO
MONTHS FROM THE DATE OF THE DECISION:
must exercise one of the following two options with respect to
the new ground of rejection to avoid termination of the appeal
as to the rejected claims:
(1) Reopen prosecution. Submit an appropriate
amendment of the claims so rejected or new Evidence relating
to the claims so rejected, or both, and have the matter
reconsidered by the examiner, in which event the prosecution
will be remanded to the examiner ....
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(2) Request rehearing. Request that the proceeding be
reheard under § 41.52 by the Board upon the same Record ....
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a).
AFFIRMED
37 C.F.R. § 4I.50(b)
31