Ex Parte Dominguez

Patent Trial and Appeal Board

Apr 3, 2018

12903916 (P.T.A.B. Apr. 3, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
12/903,916 10/13/2010 Benedicto Hernandez Dominguez
66945 7590 04/05/2018
KILPATRICK TOWNSEND & STOCKTONLLP/VISA
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
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.
79900-784868(060210US) 4863
EXAMINER
HAMILTON, LALITA M
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
04/05/2018 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):
ipefiling@kilpatricktownsend.com
EDurrell@kilpatricktownsend.com
KTSDocketing2@kilpatrick.foundationip.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte BENEDICTO HERNANDEZ DOMINGUEZ
Appeal2016-008588
Application 12/903 ,916 1
Technology Center 3600
Before JOHN A. JEFFERY, THU A. DANG, and SCOTT B. HOWARD,
Administrative Patent Judges.
HOWARD, Administrative Patent Judge.
DECISION ON APPEAL
Appellant appeals under 35 U.S.C. § 134(a) from the Final Rejection
of claims 1, 3, 4, 6, 8-10, 12, 13, 15, 16, 18, 19, and 21-28, which constitute
all of the claims pending in this application. Claims 2, 6, 7, 11, 14, 17, and
20 have been cancelled. See App. Br. 24--28 (Claims App.). We have
jurisdiction under 35 U.S.C. § 6(b ).
We affirm.
1 Appellant identifies Visa International Service Association as the real party
in interest. App. Br. 3.
Appeal2016-008588
Application 12/903,916
THE INVENTION
The disclosed and claimed invention is directed to "[a] system,
apparatus, and method for reducing fraud in payment or other transactions
by providing issuers with a warning that a transaction being processed for
authorization is potentially fraudulent." Abstract.
Claim 1, reproduced below, is illustrative of the claimed subject
matter:
1. An apparatus, comprising:
a processor programmed to execute a set of instructions;
a memory coupled to the processor for storing the set of
instructions; and
the set of instructions stored in the memory, wherein
when executed by the programmed processor implements a
method comprising
obtaining authentication history data from an
authentication history server, the authentication history
server comprising an archive of authentication operations
performed or attempted using an authentication protocol
that requires a user to provide an authentication
credential prior to authorization processing;
identifying authentication process characteristics
common to confirmed fraudulent transactions in the
authentication history data;
generating rules based upon the authentication
process characteristics;
receiving a request to perform a fraud assessment
for a payment account that is being used to conduct a
payment transaction prior to initiation of the
authorization processing for the payment transaction;
requesting data from the authentication history
server regarding a history of authentication operations
performed involving the payment account;
performing a fraud assessment process using the
rules and the data requested from the authentication
history server;
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determining as a result of the fraud assessment
process that the risk of the payment transaction exceeds a
specified threshold and is suspected of being fraudulent;
and
generating and sending an early warning message
to a directory server or an access control server at an
issuer of the payment account prior to generation of an
authorization request message for the payment
transaction to prevent generation of the authorization
request message for the payment transaction.
REFERENCES
The prior art relied upon by the Examiner as evidence in rejecting the
claims on appeal is:
Lee
Kang
US 2002/0099649 Al July 25, 2002
US 2012/0271768 Al Oct. 25, 2012
REJECTIONS
Claims 1, 3, 4, 6, 8-10, 12, 13, 15, 16, 18, 19, and 21-28 stand
rejected under 35 U.S.C. § 101 as directed to patent-ineligible subject
matter. Final Act. 10-11.
Claims 1, 3, 4, 8-10, 13, 15, 16, 19, and 21-28 stand rejected under
35 U.S.C. § 102(b) as being anticipated by Kang. Final Act. 11-17.
Claims 6, 12, and 18 stand rejected under 35 U.S.C. § 103(a) as being
unpatentable over Kang in view of Lee. Final Act. 17-18.
ANALYSIS
We have reviewed the Examiner's rejection in light of Appellant's
arguments that the Examiner erred. In reaching this decision, we have
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considered all evidence presented and all arguments made by Appellant. 2
We are not persuaded by Appellant's arguments regarding the rejection of
the claims as directed to patent-ineligible subject matter. However,
Appellant has persuaded us that the Examiner erred in rejecting the pending
claims as anticipated or obvious.
Section 101 Rejection
Law Governing Patent-Eligible Subject Matter
Patent-eligible subject matter is defined in§ 101 of the Patent Act,
which recites: "Whoever invents or discovers any new and useful process,
machine, manufacture, or composition of matter, or any new and useful
improvement thereof, may obtain a patent therefor, subject to the conditions
and requirements of this title."
There are, however, three judicially created exceptions to the broad
categories of patent-eligible subject matter in § 101: laws of nature, natural
phenomena, and abstract ideas. Alice Corp. Pty. Ltd. v. CLS Bank Int 'l, 134
S. Ct. 2347, 2354 (2014); Mayo Collaborative Servs. v. Prometheus Labs.,
Inc., 566 U.S. 66, 70-71 (2012). Although an abstract idea, itself, is patent-
ineligible, an application of the abstract idea may be patent-eligible. Alice,
134 S. Ct. at 2355. Thus, we must consider "the elements of each claim both
individually and 'as an ordered combination' to determine whether the
additional elements 'transform the nature of the claim' into a patent-eligible
2 Rather than reiterate the entirety of the arguments of Appellants and the
positions of the Examiner, we refer to the Appeal Brief (filed Nov. 3, 2015);
the Reply Brief (filed July 5, 2016); the Final Office Action (mailed May 4,
2015); and the Examiner's Answer (mailed May 5, 2016) for the respective
details.
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application." Id. (citing Mayo, 566 U.S. 79). The claim must contain
elements or a combination of elements that are "sufficient to ensure that the
patent in practice amounts to significantly more than a patent upon the
[abstract idea] itself." Id. (citing Mayo, 566 U.S. 79).
The Supreme Court set forth a two-part "framework for distinguishing
patents that claim laws of nature, natural phenomena, and abstract ideas
from those that claim patent-eligible applications of those concepts." Id. at
2355.
Id.
First, we determine whether the claims at issue are
directed to one of those patent-ineligible concepts. [Mayo,] 132
S. Ct., at 1296-1297. If so, we then ask, "[w]hat else is there in
the claims before us?" Id., at--, 132 S. Ct., at 1297. To
answer that question, we consider the elements of each claim
both individually and "as an ordered combination" to determine
whether the additional elements "transform the nature of the
claim" into a patent-eligible application. Id., at--, 132 S.
Ct., at 1298, 1297. We have described step two of this analysis
as 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." Id., at--, 132 S. Ct., at
1294.
"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
'character as a whole' is directed to excluded subject matter." Affinity Labs
of Tex. v. DirectTV, 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 Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed.
Cir. 2016). There is no definitive rule to determine what constitutes an
"abstract idea." Rather, the Federal Circuit has explained that "both [it] and
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the Supreme Court have found it sufficient to compare claims at issue to
those claims already found to be directed to an abstract idea in previous
cases." Enfzsh, 822 F.3d at 1334; see also Amdocs (Israel) Ltd. v. Openet
Telecom, Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016) (explaining that, in
determining whether claims are patent eligible under § 101, "the decisional
mechanism courts now apply is to examine earlier cases in which a similar
or parallel descriptive nature can be seen-what prior cases were about, and
which way they were decided").
Under the second step of the Alice/Mayo framework, we examine the
claim limitations "more microscopically," Elec. Power, 830 F .3d at 1354, to
determine whether they contain "additional features" sufficient to
"'transform the nature of the claim' into a patent-eligible application."
Alice, 134 S. Ct. at 2355, 2357 (quoting Mayo, 566 U.S. at 78). "Mere
recitation of concrete, tangible components is insufficient to confer patent
eligibility to an otherwise abstract idea. Rather, the components must
involve more than performance of well-understood, routine, conventional
activit[ies] previously known to the industry." In re TL! Commc 'ns LLC
Patent Litig., 823 F.3d 607, 613 (Fed. Cir. 2016) (citing Alice, 134 S. Ct. at
2359).
Abstract Idea
The Examiner concludes the claims are directed to the abstract idea of
"reducing fraud transactions." Final Act. 11. The Examiner further
determines the claims are similar to those found to be abstract in Classen
Immunotherapies, Inc. v. Biogen Idec, 659 F.3d 1057 (Fed. Cir. 2011) and
SmartGene Inc. v. Advanced Biological Laboratories SA, 555 Fed. Appx.
950 (Fed. Cir. 2014). Ans. 2.
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Appellant argues the Examiner's determination is based on an
"oversimplification of the claims." App. Br. 8. With regards to Classen and
SmartGene, Appellant asserts the claims do not merely recite rules but,
instead, recite generating an early warning message. Reply Br. 2--4.
Appellant further states that the claims recite "specific steps that cannot 'be
performed in the human mind, or by a human using a pen and paper,' as
specific computer systems generate and send messages prior to generating or
analyzing a different type of message (authorization request message) for a
transaction." Id. at 4.
We are not persuaded by Appellant's argument that the Examiner
erred. A proper section 101 analysis may compare the claims at issue to
those that have been previously analyzed by the Supreme Court or the
Federal Circuit. The Examiner properly engaged in that process, see Final
Act 11; Ans. 2, and determined the claims are directed to fraud detection,
which has been previously determined to be an abstract idea, see
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011)
(determining a claim directed to determining the validity of credit card
transactions to be patent-ineligible).
Further, we are not persuaded by Appellant's argument that the
Examiner erred in determining that the rules-based approached recited in the
claims is similar to the abstract idea recited in Classen and SmartGene.
Contrary to Appellant's argument, claim 1 recites "performing a fraud
assessment processing using the rules." App. Br. 24 (Claims App'x).
We are similarly unpersuaded by Appellant's arguments regarding
pen and paper. First, the Examiner did not use that rationale in rejecting the
claims. Such strawman arguments do not persuade us that the Examiner's
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determinations were in error. Second, Appellant appears to misunderstand
the Federal Circuit's analogy to pen and paper. The question is not whether
a human using paper and pen can send items electronically as recited in the
claims, but whether the claims are merely invoking computer functionality
to do what a human might do mentally or with pen and paper:
The district court correctly held that the claim 1 method falls
outside the eligibility standards of section 101 as that provision
has been construed. This conclusion follows from CyberSource
Corp. v. Retail Decisions, Inc., where, based on earlier
precedents, this court held that section 101 did not embrace a
process defined simply as using a computer to perform a series
of mental steps that people, aware of each step, can and
regularly do perform in their heads. 654 F.3d 1366, 1373
(Fed.Cir.2011); see also In re Grams, 888 F.2d 835, 840-41
(Fed. Cir. 1989); In re Meyer, 688 F.2d 789, 794--95 (CCPA
1982). As CyberSource explains, those precedents rest on
Supreme Court decisions indicating that section 101 covers
neither "mental processes"-associated with or as part of a
category of "abstract ideas"-nor processes that merely invoke
a computer and its basic functionality for implementing such
mental processes, without specifying even arguably new
physical components or specifying processes defined other than
by the mentally performable steps. See Gottschalk v. Benson,
409 U.S. 63, 67---68 (1972); Parker v. Flook, 437 U.S. 584, 589
(1978).
SmartGene, 555 F. App'x at 954; see also CyberSource, 654 F.3d at 1373
("Thus, claim 3 's steps can all be performed in the human mind. Such a
method that can be performed by human thought alone is merely an abstract
idea and is not patent-eligible under § 101. Methods which can be
performed entirely in the human mind are unpatentable not because there is
anything wrong with claiming mental method steps as part of a process
containing non-mental steps, but rather because computational methods
which can be performed entirely in the human mind are the types of methods
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that embody the 'basic tools of scientific and technological work' that are
free to all men and reserved exclusively to none.") (quoting Gottschalk, 409
U.S. at 67) (footnote omitted)). For example, although a person using paper
and pen cannot use an electronic database or electronically transmit a data
message, a human can access a paper record (authentication history data)
and write down information on that database using pen and paper to send to
another person (generating and sending an early warning message to a
directory server). Therefore, contrary to Appellant's assertion, claim 1 falls
clearly within the pen and paper analogy for abstract ideas.
Appellant further argues the Examiner erred in not citing evidence to
support the Examiner's determination that the claims are directed to an
abstract idea. App. Br. 9-10. More specifically, Appellant asserts the
Examiner is required to follow the non-precedential decision of PNC Bank v.
Secure Axcess, LLC, CBM 2014-00100, Paper 10, slip op. at 21 (PTAB
Sept. 9, 2014), which, according to Appellant, "not[ed] that in Alice there
were various references cited on the record that related to the concept of
intermediated settlement." App. Br. 9; see also Reply Br. 7. Notably,
Appellant asserted, without citing any authority, that "PT AB decisions are
precedential during Examination of pending claims and that the holding of
the decision (evidence supporting the Examiner's allegation that the alleged
'abstract idea' is in fact abstract should have been cited by the Examiner)
applies in the pending case." Reply Br. 7.
We are not persuaded by Appellant's arguments. First, as the
Examiner correctly notes, PNC is a non-precedential decision of the Board
and is not binding on the USPTO, including both the Board and examiners.
Ans. 4 ("[A] PT AB decision does not represent Office policy. Moreover, a
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PTAB decision is fact specific to the case being decided."). As PTAB
Standard Operating Procedure 2 clearly sets forth, "[ e ]very Board opinion is,
by default, a routine opinion until it is designated as precedential or
informative" and that such "routine opinion[s] [are] not binding authority."
PTAB Standard Operating Procedure 2, Rev. 9, § VI(A). 3' 4 Accordingly,
PNC Bank is a not binding on the Examiner or this panel.
Moreover, there are significant differences between the attorney
arguments that are presented in a post-grant AIA-CBM proceeding
compared to findings and conclusions of an Examiner. See Icon Health &
Fitness, Inc. v. Strava, Inc., 849 F.3d 1034, 1042--44 (Fed. Cir. 2017)
(discussing differences between attorney arguments and the Examiner's
findings). And, the Panel in PNC Bank relied on more than the lack of
persuasive evidentiary support in determining that the claims were not
directed to an abstract idea. See PNC Bank, Paper 13, slip op. at 4 (PTAB
Sept. 30, 2014) (recognizing that the lack of evidence was only "one factor
in our analysis" in denying request for rehearing). Furthermore, we are not
persuaded that the Court's citation to references in Alice added a
requirement that evidence must always be support the determination that a
claim is directed to an abstract idea. To the contrary, in Alice, the Court
3 https://www.uspto.gov/sites/default/files/documents/sop2-revision-9-dated-
9-22-2014.pdf (last accessed Mar. 26, 2018).
4 The only exception is that routine decisions are law of the case for
subsequent examination. See Ex parte Pong, Appeal 2016-002217, 2017
WL 5714381 (PTAB Nov. 6, 2017); see also MPEP § 706.07(h)(XI)(A)
(noting that the Board's decision in an application becomes the "law of the
case" in that it is controlling on that application and any later related
application).
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focused on the similarities between the claims at issue with those found to be
directed to an abstract idea in Bilski:
On their face, the claims before us are drawn to the
concept of intermediated settlement, i.e., the use of a third party
to mitigate settlement risk. Like the risk hedging in Bilski, the
concept of intermediated settlement is " 'a fundamental
economic practice long prevalent in our system of commerce.' "
Ibid.; see, e.g., Emery, Speculation on the Stock and Produce
Exchanges of the United States, in 7 Studies in History,
Economics and Public Law 283, 346-356 (1896) (discussing
the use of a "clearing-house" as an intermediary to reduce
settlement risk). The use of a third-party intermediary (or
"clearing house") is also a building block of the modem
economy. See, e.g., Yadav, The Problematic Case of
Clearinghouses in Complex Markets, 101 Geo. L.J. 387, 406-
412 (2013); J. Hull, Risk Management and Financial
Institutions 103-104 (3d ed. 2012). Thus, intermediated
settlement, like hedging, is an "abstract idea" beyond the scope
of§ 101.
Alice, 134 S. Ct. at 2356 (emphasis added).
Appellant further argues that the Examiner erred by focusing on a
high level of abstraction of the claims and ignoring that the claims are
directed to a specific improvement on computer technology:
The court in Enfzsh emphasized that the "directed to" Alice
analysis "cannot simply ask whether the claims involve a
patent-ineligible concept, because essentially every routinely
patent-eligible claim involving physical products and actions
involves a law of nature and/or natural phenomenon." Id, p. 10.
The court noted that there is an important distinction between
being "directed to" an abstract idea and merely "involving" an
abstract idea. The court held that the claims in question in
Enfzsh were "not directed to an abstract idea within the meaning
of Alice," and were instead "directed to a specific improvement
to the way computers operate, embodied in the self-referential
table." Id, p. 10. Similarly, Appellant submits that the pending
claims are not merely directed to the alleged abstract ideas of
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"reducing fraud in transaction, and more specifically, to the
detection of potential fraud in payment and other transactions
by processing data derived from previous transactions in which
a consumer used a credential or password to authenticate
themselves," and "an idea of itself," but are instead directed to a
specific improvement to the way computers can utilize data
obtained from a consumer authentication process to determine
characteristics or indicia of fraud, from previous transactions, to
generate a set of fraud detection rules to generate an early
warning that is provided prior to the standard transaction
authorization.
Reply Br. 5.
In Enfzsh, the Federal Circuit relied on the distinction made in Alice
between computer functionality improvements and uses of existing
computers as tools in aid of processes focused on "abstract ideas." See
Enfzsh, 822 F.3d at 1335-36; see also Alice, 134 S. Ct. at 2358-59. The
present case is different from Enfish because the focus of the claims here is
not on an improvement in computers as tools or upon an innovative way to
use computers or other devices, but is focused on an independently abstract
idea that uses generic and routinely used equipment as tools; that abstract
idea being collecting and processing/analyzing various information/data.
That is, here, the arguably innovative technique of the appealed claims is
inextricably a part of the abstract idea of manipulating data itself. Moreover,
nothing in the claims, understood in light of the Specification, requires
anything other than an off-the-shelf, conventional computer used for
collecting and processing/analyzing various information/data. 5
5 This analysis similarly applies to Appellant's argument that the claims
recite significantly more. See Reply Br. 11-12.
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For example, paragraph 47 of the Specification discusses how the
rules are generated. According to the Specification, "such rules or indicia
may be developed using any suitable analysis or data processing methods,
functions, or operations. Such analysis or data processing methods,
functions, or operations include, but are not limited to pattern matching,
neural network analysis, statistical analysis, linear regression models,
mathematical modeling, etc." Spec. i-f 47. No further details are given as to
how those data processing methods are used. Accordingly, the claims are
not directed to improving computer functionality but merely using known
and well understood computer functionality to implement an abstract idea.
Accordingly, we are not persuaded by Appellant's arguments that the
Examiner erred in determining the claims are directed to an abstract idea.
Streamlined Analysis
Appellant further argues the Examiner erred in not applying the so-
called "Streamlined Eligibility Analysis." See App. Br. 10-12. Contrary to
Appellant's argument, the Examiner is not required to use the streamlined
patent-eligibility analysis; instead, it is at the Examiner's discretion. As the
slides provided by Appellant states, "a streamlined analysis can be used,"
App. Br. 10 (emphasis added), it does state any circumstances when the
streamlined analysis must be used. Therefore, Examiner's decision to
perform a full section 101 analysis using the Alice/Mayo framework is not
erroneous.
Moreover, even if the Examiner failed to follow the Director's
guidance-which the Examiner did not do--such a failure would be
appealable only to the extent that the Examiner has failed to follow the
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statutes or case law. That is, to the extent the Director's guidance goes
beyond the case law and is more restrictive on the Examiner than the case
law, any alleged failure of the Examiner to follow those added restrictions is
a matter for petition to the Director as "petitionable matters should be
addressed before an appeal reaches the Board." Ex Parte Frye, 94 USPQ2d
1072, 1078 (BP AI 2010). "Filing a Board appeal does not, unto itself,
entitle an appellant to de novo review of all aspects of a rejection." Id. at
1075-76.
We review Appellant's particular arguments against the case law and
find no requirement in the law that the Examiner perform the so-called
streamlined analysis as opposed to utilizing the Alice/Mayo framework set
forth by the Supreme Court and the Federal Circuit. Accordingly, any
alleged failure to follow the Guidance is petitionable, not appealable. See,
e.g., Ex Parte Hwang, Appeal 2017-007960, 2018 WL 1494738, *5 (PTAB
Mar. 20, 2018); Ex Parte Lindelsee, Appeal 2016-008327, 2018 WL
1419771, *5 n.2 (PTAB Mar. 14, 2018).
Significantly More
The Examiner concludes that the claims, as a whole, "do not amount
to significantly more than the abstract idea itself." Final Act. 11; see also
Ans. 2-5 (determining the Specification describes "general purpose
computers that perform routine and conventional activities" and that the
steps recited in the claims "are similar to examples of well understood,
routine and conventional functions that are listed on this page (receiving,
processing and storing data, electronic recordkeeping, etc.)"). The Examiner
further determines that "the claims do not effect an improvement to another
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technology or technical field; the claims do not amount to an improvement
to the functioning of a computer itself; and the claims do not move beyond a
general link of the use of an abstract idea to a particular technological
environment." Final Act 11.
Appellant states that the claim limitations add specific limitations that
are not well understood, routine, or conventional. App. Br. 12-14. More
specifically, Appellant repeats the instruction limitations of the claims and
state they are not conventional because the claim is not anticipated. Id.
We are not persuaded by Appellant's arguments that the Examiner
erred. Although the second step in the Alice/Mayo framework is termed a
search for an "inventive concept," the analysis is not an evaluation of
novelty or non-obviousness, but rather, a search for "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, 134 S. Ct. at 2355. A novel and nonobvious claim
directed to a purely abstract idea is, nonetheless, patent-ineligible. See
Mayo, 132 S. Ct. at 1304. Although, for the reasons set forth below, we
agree with Appellants that the specific sections of a single prior art reference
do not disclose the generating step recited in the claims, that does not mean
the limitation is not conventional or obvious; it merely means that it is not in
the section of the reference cited by the Examiner.
Appellant further argues that the claims are similar to those found
patent-eligible in DDR. 6 App. Br. 14--16. However, we are not persuaded
by Appellant's arguments. First, as our reviewing court held in DDR, "not
6 DDR Holdings, LLC v. Hotel.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014).
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all claims purporting to address Internet-centric challenges are eligible for
patent." 775 F.3d at 1258. As the Federal Circuit recognized:
For example, in our recently-decided Ultramercia/[7J opinion,
the patentee argued that its claims were "directed to a specific
method of advertising and content distribution that was
previously unknown and never employed on the Internet before."
772 F.3d at 714. But this alone could not render its claims patent-
eligible. In particular, we found the claims to merely recite the
abstract idea of "offering media content in exchange for viewing
an advertisement," along with "routine additional steps such as
updating an activity log, requiring a request from the consumer
to view the ad, restrictions on public access, and use of the
Internet." Id. at 715-16.
Id. Because Appellant has merely identified routine additional steps, they
are insufficient to render the claims patent-eligible.
Moreover, we disagree with Appellant that the claims in this case are
directed to a computer-centric problem similar to that in DDR. In DDR, the
Court found that the claims "do not merely recite the performance of some
business practice known from the pre-Internet world along with the
requirement to perform it on the Internet. Instead, the claimed solution is
necessarily rooted in computer technology in order to overcome a problem
specifically arising in the realm of computer networks." Id. at 1257. Unlike
the claims in DDR, the claims are directed to detecting fraudulent credit card
purchases, which were a problem long before the internet.
Instead of DDR, this case is similar to Electric Power, in which our
reviewing court found the claims patent-ineligible because "[t]he claims at
issue do not require any nonconventional computer, network, or display
components, or even a 'non-conventional and non-generic arrangement of
7 Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014).
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known, conventional pieces,' but merely call for performance of the claimed
information collection, analysis, and display functions 'on a set of generic
computer components' and display devices." Elec. Power 830 F.3d at 1355
(citing BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC, 827
F.3d 1341, 1349--52 (Fed. Cir. 2016)). Similarly, the claims in this case
merely recite the use of generic computer components and conventional
computer networks. Such an arrangement is not patent eligible. Id.
Moreover, although Appellant states several times that the pending
claims do not use routine or conventional steps, see e.g., Reply Br. 11,
Appellant relies solely on attorney arguments, not evidence. It is well
settled that mere attorney arguments and conclusory statements, which are
unsupported by factual evidence, are entitled to little probative value. In re
Geisler, 116 F.3d 1465, 1470 (Fed. Cir. 1997); see also In re Pearson, 494
F.2d 1399, 1405 (CCPA 1974) (attorney argument is not evidence).
Accordingly, we sustain the Examiner's rejection of claim 1, 3--4, 6,
8-10, 12, 13, 15, 16, 18, 19, and 21-28 as directed to patent-ineligible
subject-matter.
Prior Art Rejections
Appellant argues the Examiner erred in finding Kang discloses
"generating rules based upon the authentication process characteristics," as
recited in claim 1. App. Br. 18-19. According to Appellant, "Kang merely
describes sending a copy of an authentication response to an authentication
history server which does not inherently or expressly disclose generating
rules based upon authentication process characteristics let alone generating
any kind of rules." Id. at 18.
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The Examiner finds Kang "discloses card not present transactions
attempted; authentication request is made; authentication history is obtained;
determines if transaction exceeds a specific threshold; detects and prevents
the completion of fraudulent transactions." Final Act. 12 (citing Kang i-fi-1 2,
4, 9, 53). The Examiner further finds paragraphs 9 and 54 disclose the
disputed limitation:
Kang discloses, "transactions involving purchases above a
specified threshold, transactions in excess of a certain number
or total value during a predetermined period, transactions
having a specified risk profile, etc.), or as an approval process
for transactions in situations in which there is some reason to
suspect potential fraud (such as those transactions in
which a 'challenge' message might normally be generated)"
(para.9). Kang discloses, "The cardholder system 405 in tum
forwards the authentication response 468 to the merchant
system 410. If the authentication information 464 provided by
the cardholder matches the authentication information
previously associated with the electronic commerce card, the
authentication response includes a message indicating that the
authentication was successful ... If the authentication was
successful, the merchant system 410 can continue with the
transaction by initiating a charge to the electronic commerce
card provided by the card holder" (para.54 ).
Ans. 7-8.
"A claim is anticipated only if each and every element as set forth in
the claim is found, either expressly or inherently described, in a single prior
art reference." Verdegaal Bros. v. Union Oil Co. of California, 814 F.2d
628, 631 (Fed. Cir. 1987). Moreover, the reference must also "disclos[]
within the four comers of the document not only all of the limitations
claimed but also all of the limitations arranged or combined in the same way
as recited in the claim." Net MoneyIN, Inc. v. Verisign, Inc., 545 F.3d 1359,
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1371 (Fed. Cir. 2008). However, "the reference need not satisfy an
ipsissimis verbis test." In re Gleave, 560 F.3d 1331, 1334 (Fed. Cir. 2009).
We are persuaded by Appellant's arguments as the Examiner has not
identified sufficient evidence or provided sufficient explanation as to how
Kang discloses "generating rules based upon the authentication process
characteristics," as recited in claim 1. Although the cited sections disclose
using rules to determine whether or not to authorize a transaction, there is
nothing in those sections that discloses having a processor with a set of
instructions using authentication process characteristics to generate the rules.
Instead, the cited sections are silent as to how the rules were developed.
Accordingly, we agree with Appellant that the Examiner's finding that
the cited sections of Kang discloses the disputed limitation is in error
because it is not supported by a preponderance of the evidence. See In re
Caveney, 761F.2d671, 674 (Fed. Cir. 1985) (Examiner's burden of proving
non-patentability is by a preponderance of the evidence); see also In re
Warner, 379 F.2d 1011, 1017 (CCPA 1967) ("The Patent Office has the
initial duty of supplying the factual basis for its rejection. It may not,
because it may doubt that the invention is patentable, resort to speculation,
unfounded assumptions or hindsight reconstruction to supply deficiencies in
its factual basis.").
Accordingly, we are constrained on this record to reverse the
Examiner's anticipation rejection of claim 1, along with the rejections of
claims 8 and 13, which recite limitations commensurate in scope to the
disputed limitations discussed above, and dependent claims 3, 4, 9, 10, 15,
16, 19, and 21-28.
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Moreover, because the Examiner has not shown that Lee cures the
foregoing deficiencies regarding the rejection of the independent claims, we
will not sustain the obviousness rejection of dependent claims 6, 12, and 18
for similar reasons.
DECISION
For the above reasons, we affirm the Examiner's decisions rejecting
claims 1, 3, 4, 6, 8-10, 12, 13, 15, 16, 18, 19, and 21-28 as directed to
patent-ineligible subject matter.
For the above reasons, we reverse the Examiner's decisions rejecting
claims 1, 3, 4, 8-10, 13, 15, 16, 19, and 21-28 as anticipated by Kang.
For the above reasons, we reverse the Examiner's decisions rejecting
claims 6, 12, and 18 as unpatentable over Kang and Lee.
Because we affirm at least one ground of rejection with respect to
each claim on appeal, we affirm the Examiner's decision to reject all of the
pending claims.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv). See 37
C.F.R. § 41.50(f).
AFFIRMED
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