Ex Parte Clarke et al

Patent Trial and Appeal Board

May 7, 2018

14043736 (P.T.A.B. May. 7, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
14/043,736 10/01/2013 Trevor Fred Roy Clarke
69849 7590 05/09/2018
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
379 Lytton Avenue
Palo Alto, CA 94301
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.
25GB-191743 1432
EXAMINER
TROTTER, SCOTTS
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
05/09/2018 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):
svpatents@sheppardmullin.com
SheppardMullin_Pair@firsttofile.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte TREVOR FRED ROY CLARKE,
WARREN DE VILLIERS, ANDRE RY AN EDELBROCK,
STEVE FROOK, DARRYL GREEN,
and KEEGAN JOHNSON 1
Appeal2016-008376
Application 14/043,736
Technology Center 3600
Before BRADLEY W. BAUMEISTER, JEREMY J. CURCURI, and
BETH Z. SHAW, Administrative Patent Judges.
BAUMEISTER, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 1-21. App. Br. 2. 2 We have jurisdiction under
35 U.S.C. § 6(b).
We affirm.
1 Appellants list Ethoca Technologies, Inc. as the real party in interest.
Appeal Brief 2, filed December 29, 2015 ("App. Br.").
2 Rather than repeat the Examiner's positions and Appellants' arguments in
their entirety, we refer to the above-mentioned Appeal Brief, as well as the
following documents, for their respective details: the Final Action mailed
July 30, 2015 ("Final Act."); the Examiner's Answer mailed July 12, 2016
("Ans."); and the Reply Brief filed September 12, 2016 ("Reply Br.").
Appeal 2016-008376
Application 14/043,736
STATEMENT OF THE CASE
Appellants describe the present invention as follows:
Provided herein are techniques for rescuing a commercial
transaction identified as suspect, possibly based on suspicion of
fraud or due to the risk associated with the commercial
transaction. Various implementations include systems and
methods that can rescue a purchase transaction involving a
purchasing party (hereafter, a "purchaser") and a selling party
(hereafter, a ["]merchant"). The item or items being purchased
in the purchase transaction can include goods, []services, or
property interests (e.g., real, intellectual, or otherwise).
Particular implementations can facilitate the rescuing of a
purchase transaction that has been declined, canceled or
suspended (e.g., pending further review) by an involved party
(e.g., the selling party) based on that party's concern (e.g., fraud
or high risk) with respect to the purchase transaction.
Abstract.
Independent claim 1, reproduced below with added emphasis,
illustrates the claimed invention:
1. A system comprising:
a purchase transaction information engine configured to
receive first data regarding a purchase transaction between a
purchaser and a merchant, the purchase transaction involving a
pre-authorization for payment by the purchaser to the merchant
using an electronic payment method, the purchase transaction
identified as a suspect purchase transaction by the merchant;
an electronic payment processor information engine
configured to provide an electronic payment processing system
with second data regarding the purchase transaction, the
electronic payment processing system being configured to assist
in processing payments by the electronic payment method, the
second data including a request for the electronic payment
processing system to validate the payment of the purchase
transaction;
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a purchase transaction validation engine configured to
receive from the electronic payment processing system third data
regarding validity of the payment of the purchase transaction, the
validity of the payment of the purchase transaction determined
by the electronic payment processing system from a response to
a validity request received from a purchaser-client system;
a merchant system data interface engine configured to
provide fourth data to a merchant system regarding a possibility
of rescuing the purchase transaction based on the third data, the
merchant system processing the purchase transaction between
the purchaser and the merchant.
Claims 1-21 stand rejected under 35 U.S.C. § 101 as being directed to
patent ineligible subject matter. Final Act. 3.
Claims 1-21 stand rejected under 35 U.S.C. § 103(a) as obvious over
Calabrese et al. (US 7,954,706 B2; issued June 7, 2011) and Larkin
(US 2012/0047072 Al; published Feb. 23, 2012). Final Act. 4--12.
We review the appealed rejections for error based upon the issues
identified by Appellants, and in light of the arguments and evidence
produced thereon. Ex parte Frye, 94 USPQ2d 1072, 107 5 (BP AI 2010)
(precedential).
THE REJECTION UNDER§ 101
Findings and Contentions
Claims 1-21 stand rejected under 35 U.S.C. § 101 as being directed to
non-statutory subject matter. Final Act. 3. The Examiner originally set forth
a relatively conclusory basis for this rejection. Final Act. 3. Appellants'
initial arguments focused on the rejection's brevity. App. Br. 8-9 (asserting
the Examiner failed to establish a prima facie case); id. at 9-10 (arguing the
Examiner has not shown the claims are directed to an abstract idea); id. at
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10-11 (arguing the Examiner has not shown the claims are not directed to
significantly more than the concept of pre-authorizing a payment).
The Examiner expands upon this rejection in the Examiner's Answer,
revising the rejection, purportedly to be in line with updated guidance from
the Office on making patent-ineligible-subject-matter rejections. Ans. 12-
18. Appellants then present arguments that address the revised rejection of
the Examiner's Answer. Reply Br. 2-5. We understand the revised
rejection generally moots the arguments of the Appeal Brief. We, therefore,
focus on the rejection set forth in the Examiner's Answer, as well as the
arguments presented in the Reply Brief.
In the Examiner's Answer's revised rejection, the Examiner
determines
the claims are essentially directed to the concept of pre-
authorizing a payment and completing a transaction-an abstract
idea [that] would fall within the universe of ineligible subject
matter envisioned by courts as being an exception to
patentability, e.g., a fundamental economic activity (abstract
idea) simply being carried out via an electronic device, a general
purpose computer and/or a computer system.
Ans. 14. The Examiner additionally determines that "[t]he claims[,] as a
whole, do not amount to significantly more than the abstract idea." Id. at 16.
Appellants present three general arguments in their Reply Brief:
(1) recent Federal Circuit case law supports that the claims are directed to
statutory subject matter (Reply Br. 2-3); (2) the claims are directed to
significantly more than the alleged abstract idea (id. at 4--5); and (3) the
claims are distinguished from the Alice case (id. at 5). We address these
arguments seriatim.
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Principles of Law
In determining whether the claims set forth patent eligible subject
matter under 35 U.S.C. § 101, we first must determine whether the claims at
issue are directed to laws of nature, natural phenomena, or abstract ideas.
Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 714 (Fed. Cir. 2014). In
considering whether a claim is directed to an abstract idea, we acknowledge,
as did the Supreme Court, that "all inventions at some level embody, use,
reflect, rest upon, or apply laws of nature, natural phenomena, or abstract
ideas." Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66,
71 (2012 ). We therefore look to whether the claims focus on a specific
means or method that improves the relevant technology or are instead
directed to a result or effect that itself is the abstract idea and merely invoke
generic processes and machinery. See Enfzsh, LLC v. Microsoft Corp., 822
F.3d 1327, 1336 (Fed. Cir. 2016).
If the claims are directed to an abstract idea, we then must consider
whether the claim contains an element or a combination of elements that is
sufficient to transform the nature of the claim into a patent-eligible
application. Ultramercial, 772 F .3d at 714; Alice Corp. Pty. Ltd. v. CLS
Bankint'l., 134 S. Ct. 2347, 2355 (2014).
In applying step two of the Alice analysis, we must
"determine whether the claims do significantly more than simply
describe [the] abstract method" and thus transform the abstract
idea into patentable subject matter. We look to see whether there
are any "additional features" in the claims that constitute an
"inventive concept," thereby rendering the claims eligible for
patenting even if they are directed to an abstract idea. Those
"additional features" must be more than "well-understood,
routine, conventional activity."
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Intellectual Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1328 (Fed.
Cir. 2017) (citations omitted).
"[C]laims [that] merely require generic computer implementation[]
fail to transform [an] abstract idea into a patent-eligible invention." Id. (first
and fourth alterations in original) (quoting Alice, 134 S. Ct. at 2357).
Analysis
Appellants argue that the Examiner applied an improper rationale for
determining the current claims are directed to an abstract idea. Reply Br. 3.
To this end, Appellants note that Enfzsh held that claims directed to software
are not inherently abstract. Id. at 2. Appellants then contend that the
Examiner erred in rejecting the claims as being directed to patent ineligible
subject matter "merely relying on the proposition that the claims are directed
to a solution in computer technology of generic computer functions, as
opposed to a particular machine." Id. at 3.
This argument is unpersuasive because the Examiner did not merely
rely on such a proposition in determining the claims were directed to an
abstract idea. The Examiner instead determined the claims were directed to
an abstract idea because the claims were directed to a fundamental economic
activity that was "simply being carried out via an electronic device, a general
purpose computer and/or a computer system." Ans. 14.
Appellants next argue that the claims are directed to patentable subject
matter for the following reason:
The subject matter of the currently pending claims relates to
rescuing transactions as part of fraud damage mitigation. Within
fraud damage mitigation, technology has advanced to allow
automated agents of parties involved in fraudulent transactions
to communicate nearly instantaneously. However, the ability to
communicate nearly instantaneously in mitigating fraudulent
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transaction damage has introduced the problem of canceling
transactions that are actually not fraudulent without taking any
steps to actually rescue the transactions. The subject matter of
the current claims relates to using automated agents to rescue the
transactions without automatically canceling them. Therefore,
the claims are directed to improvements in computer capabilities
in mitigating fraud damage.
Reply Br. 3.
The argument is unpersuasive. The additionally claimed protocol of
rescuing suspect transactions-a capability in mitigating fraud damage-is
not a capability unique to computers. Protocols for rescuing suspect
transactions were known previously in the pre-Internet world, as well. For
example, it was a common practice for an employee (e.g., a person
employed to process checks) not to be authorized to perform some high-risk
transactions (e.g., process personal checks for large sums) and to be
required, instead, to obtain a manager's authorization to perform the high-
risk transaction. As such, the type of automation claimed merely makes the
known fundamental economic activity more efficient by using conventional
automated agents. See id. (acknowledging that automated agents of parties
were conventional).
Appellants next argue that the Examiner "has characterized the claims
as being directed to the overly broad abstract idea of "pre-authorizing a
payment and completing a transaction," and as such, "[t]he Examiner fails to
take into consideration numerous elements ... that amount to significantly
more than the alleged abstract idea." Id. at 4. More specifically, Appellants
argue
the Examiner ignores the elements of the claims of a purchase
transaction information engine configured to receive first data
regarding a purchase transaction between a purchaser and a
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merchant, the purchase transaction involving a pre-authorization
for payment by the purchaser to the merchant using an electronic
payment method, the purchase transaction identified as a suspect
purchase transaction by the merchant, and a merchant system
data interface engine configured to provide fourth data to a
merchant system regarding a possibility of rescuing the purchase
transaction based on the third data, the merchant system
processing the purchase transaction between the purchaser and
the merchant.
Id. at 5.
This argument is unpersuasive for the reasons explained in relation to
the previous argument. That is, the additional element of a purchase
transaction information engine performing the recited rescue function has a
pre-Internet world analog of an employee seeking authorization from
another. Restated, the additional claim elements may make the fundamental
economic activity a more complex abstract idea, but the additional claim
elements do not make the fundamental economic activity any less abstract.
Appellants finally argue that "the subject matter of [the present
claims] are distinguished from the subject matter of the Alice case, and
therefore recite patentable subject matter." Id. This argument is
unpersuasive. Alice does not establish an exhaustive or exclusive list of the
types of fundamental economic activities that the courts have found to
constitute patent-ineligible abstract ideas.
THE REJECTION UNDER § 103
I.
The Examiner finds Calabrese discloses all of the limitations of
claim 1 with the exception of the language "the purchase transaction
identified as a suspect purchase transaction by the merchant." Final
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Act. 4--5. The Examiner finds that Larkin teaches this limitation. Id. at 5
(citing Larkin i-fi-154--60, 62, 67, 68). The Examiner clarifies that Larkin's
abstract "has the merchant using a service [that] identifies a transaction as
fraudulent/or the merchant." Ans. 17. The Examiner concludes that this
teaching sufficiently corresponds to the claim requirement of the purchase
transaction being identified as suspect "by the merchant" because "a
merchant is a legal entity that may hire people of companies to perform
services on its behalf for which it still takes legal credit." Id.
Appellants assert, inter alia,
In Larkin, while the Merchant Alert system may help register a
potential fraudulent transaction, the Merchant Alert system does
not handle purchase transactions that are identified as a suspect
purchase by a merchant. ... [Larkin's] fraud detection systems
are separate from the merchants and communicate with the
merchants through the merchant alert system. . . . As the fraud
detection systems are separate from the merchants, the Examiner
has not identified in Larkin the language of claims 1, 11, and 21
regarding a purchase transaction identified as suspect by the
merchant.
Reply Br. 7-8 (citing Larkin, Figure. 1) (emphasis added).
Appellants summarize, "[i]f the merchant did actually identify
transactions as fraudulent, they would not need to hire the service." Id. at 8.
We generally agree with Appellants that a difference exists between a
merchant, herself, identifying a purchase transaction as suspect, on the one
hand, and, on the other, a third party agent identifying a suspect transaction
for a merchant. However, we question whether this distinction is dispositive
in determining whether Appellants have established that the obviousness
rejection contains reversible error.
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Independent method claim 11 does not recite an affirmative method
step of a merchant identifying a suspect purchase transaction. Similarly,
independent system claims 1 and 21 merely require that a merchant identify
a purchase transaction as suspect and that the purchase transaction
information engine be configured to receive, or include means for receiving,
first data indicating the purchase transaction is suspect. But claim 1, for
example, does not affirmatively recite that the purchase transaction
information engine includes functionality for receiving a notification of the
suspect purchase transaction specifically or directly from a merchant.
Moreover, Appellants' Specification does not indicate that a message
identifying a suspect purchase transaction necessarily would be different, in
any manner, if the identification is made by or received from a merchant
versus being made by or received from a payment processor or any other
entity. See Spec.
Because claim 1 does not affirmatively recite the merchant, claim 1 's
language "the purchase transaction identified as a suspect purchase
transaction by the merchant" (emphasis added) appears to be a recitation of
an intangible property of the first data that cannot be determined by
observation. That is, the source or origin of "receive[ d] first data regarding a
purchase transaction between a purchaser and a merchant" would not be able
to be determined merely by looking at the content of the first data, as
received at the purchase transaction information engine. We question, then,
whether the recitation of the data being identified as suspect by the merchant
patentably distinguishes claim 1 over prior art in which the first data
received at the information engine was generated as result of the
identification being made by an entity other than the merchant.
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We, therefore, question whether Appellants' argument-that Larkin
does not teach the merchant identifying the purchase transaction as
suspect-is commensurate in scope with the limitations of the independent
claims. We need not resolve this question, though, because Appellants' next
argument demonstrates reversible error in the obviousness rejection.
II.
Appellants additionally argue that the combination of Calabrese and
Larkin fails to teach or suggest "a 'merchant system data interface engine
configured to provide fourth data to a merchant system regarding a
possibility of rescuing the purchase transaction based on the third data, the
merchant system processing the purchase transaction between the purchaser
and the merchant, as recited in [the independent claims]."' App. Br. 1 7.
We understand the Examiner to be mapping this limitation to
Calabrese, as follows: "If [a] request is preauthorized[,] it is the third piece
of data to validate [the] transaction[. I]f not[,] [a financial processing
facility] contacts [the] user for the fourth piece of data[, the] user approval
rescuing the transaction." Final Act. 5.
The Examiner's mapping does not correspond to the mapped claim
limitation. Claim 1 requires the fourth data to be provided to a merchant
system based on the third data. The Examiner maps Calabrese' s protocol as
including only one of either third data or fourth data.
For the foregoing reasons, Appellants have persuaded us of error in
the Examiner's obviousness rejection of independent claim 1. Accordingly,
we do not sustain the Examiner's rejection of that claim, of independent
claims 11 and 21, which possess similar limitation, or of claims 2-10 and
12-20, which depend from independent claims 1 and 11.
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CONCLUSIONS
We sustain the rejection of claims 1-21under35 U.S.C. § 101.
We do not sustain the rejection of claims 1-21under35 U.S.C. § 103.
DECISION
The Examiner's decision rejecting claims 1-21 is affirmed.
No time period for taking any subsequent action in connection with
this appeal maybe extended under 37 C.F.R. § 1.136(a)(l). See 37 C.F.R.
§ 1.136(a)(l )(iv).
AFFIRMED
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