Ex Parte Don et al

Patent Trials and Appeals Board

Mar 28, 2019

14687055 - (D) (P.T.A.B. Mar. 28, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/687,055 04/15/2015
60956 7590 04/01/2019
Professional Patent Solutions
P.O. BOX654
HERZELIYA PITUACH, 46105
ISRAEL
FIRST NAMED INVENTOR
Gil Don
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.
PIS-PU-006-USl 7774
EXAMINER
OYEBISI, OJO 0
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
04/01/2019 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):
office@propats.com
vsherman@propats.com
utalmi@propats.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Exparte GIL DON, ALON FEIT, and
VICTORIA NIEL KRAINE
Appeal2017-011229
Application 14/687,055
Technology Center 3600
Before JENNIFER S. BISK, LINZY T. McCARTNEY, and
JASON J. CHUNG, Administrative Patent Judges.
BISK, Administrative Patent Judge.
DECISION ON APPEAL
Appellants 1 appeal under 35 U.S.C. § 134 from a rejection of claims
21-25. We have jurisdiction under 35 U.S.C. § 6(b).
We affirm.
1 Appellants identify the real party in interest as Splitit, formally known as
Pay It Simple Ltd. Appeal Br. 2.
Appeal2017-011229
Application 14/687,055
BACKGROUND2
The claims are directed to a methods, systems, devices, and associated
computer executable code for facilitating securitized funding of up-front
payments. Spec. Title. Claim 21, reproduced below, is illustrative of the
claimed subject matter:
1. A system for automatically securing installment
purchases, said system comprising:
communication circuitry adapted to communicate over a
distributed data network (DDN);
an electronic interface adapted to communicate over the DDN
with a merchant computerized device and receive from the
merchant device, over the data network, using the
communication circuitry: (i) a first amount of a transaction with
a first party having a credit line with one or more credit providers,
(ii) details of the credit lines and (iii) details of the first party;
a credit server comprising:
i. communication circuitry to communicate with
automated authorization systems of primary credit
providers over the DDN; and
ii. processing circuitry adapted to: (i) automatically
generate, using the received details, one or more credit
requests for the first amount, and (ii) transmit the requests
to the one or more credit providers over the DDN;
a transaction server adapted to, upon receiving the authorizations
of the requests, issue payment of the first amount to the
merchant;
2 Throughout this Decision we have considered the Specification filed April
15, 2015 ("Spec."), the Final Rejection mailed April 18, 2016 ("Final Act."),
the Appeal Brief filed September 6, 2016 ("Appeal Br."), the Examiner's
Answer mailed June 30, 2017 ("Ans."), and the Reply Brief filed August 30,
201 7 ("Reply Br.").
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one or more data storages adapted to store a record for each of
multiple transactions, which records include, for each given
transaction: details of a party of the given transaction having
second credit lines with one or more primary credit providers,
details of the second credit lines, the amount of the given
transaction, details of received credit authorizations relating to
the given transaction, terms of payment of the amount of the
given transaction, a history of payments relating to the amount
of the given transaction and a current outstanding balance of the
amount of the given transaction;
a monitoring unit comprising processing circuitry adapted to
monitor dates of expiration of authorizations within the records
stored in said data storages and trigger said credit server to re-
securitize a given current outstanding balance, prior to expiration
of a latest authorization relating to the given current outstanding
balance;
wherein said credit server is further adapted to: (i) automatically
generate, upon being triggered by said monitoring unit, a second
set of one or more credit requests for an outstanding balance of
the first amount, based on the data stored in said records, and (ii)
transmit the second set of credit requests to the one or more credit
providers over the DDN.
Appeal Br. 22-23 (Claims Appendix).
REJECTION
Claims 21-25 are rejected under 35 U.S.C. 101 because the claimed
invention is directed to non-statutory subject matter. 3 Final Act.
ANALYSIS
Appellants argue claims 21-25 together. See Appeal Br. 9-21. As
permitted by 37 C.F.R. § 41.37, we decide the appeal for this rejection based
on claim 21. See 37 C.F.R. §4I.37(c)(l)(iv).
3 The Final Action states that claims 20-25 are rejected. Final Act. 2. Claim
20 was voluntarily cancelled after the Final Rejection. See Amendment filed
8/28/2016; see also Advisory Action filed 6/28/2017 (referring to claim 21
as the representative claim and noting that claims 21-25 are rejected).
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Section 101 of the Patent Act provides that "any new and useful
process, machine, manufacture, or composition of matter, or any new and
useful improvement thereof' is patent eligible. 35 U.S.C. § 101. But the
Supreme Court has long recognized an implicit exception to this section:
"Laws of nature, natural phenomena, and abstract ideas are not patentable."
Alice Corp. v. CLS Bankint'l, 573 U.S. 208,216 (2014) (quotingAss'nfor
Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)).
To determine whether a claim falls within one of these excluded categories,
the Court has set out a two-part framework. The framework requires us first
to consider whether the claim is "directed to one of those patent-ineligible
concepts." Alice, 573 U.S. at 217. If so, we then examine "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." Alice, 573 U.S. at 217 (quoting Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 78, 79 (2012)).
That is, we examine the claims for an "inventive concept," "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 217-18 ( alteration in original) ( quoting
Mayo, 566 U.S. at 72-73).
The Patent Office recently issued guidance regarding this framework.
See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg.
50 (Jan. 7, 2019) ("Revised Guidance"). Under the Revised Guidance, to
decide whether a claim is "directed to" an abstract idea, we evaluate whether
the claim (1) recites subject matter falling within an abstract idea grouping
listed in the Revised Guidance and (2) fails to integrate the recited abstract
idea into a practical application. See Revised Guidance, 84 Fed. Reg. at 51.
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If the claim is "directed to" an abstract idea, as noted above, we then
determine whether the claim recites an inventive concept. The Revised
Guidance explains that when making this determination, we should consider
whether the additional claim elements add "a specific limitation or
combination of limitations that are not well-understood, routine,
conventional activity in the field" or "simply append[] well-understood,
routine, conventional activities previously known to the industry." Revised
Guidance, 84 Fed. Reg. at 56.
With these principles in mind, we tum to the Examiner's § 101
rejection.
"Directed to an Abstract Idea "-Abstract Idea
The Examiner determined that claim 21 is "directed to" an abstract
idea because the claim recites a fundamental economic practice. Final Act.
3. For the reasons explained below, we see no error in this determination.
Claim 21 recites the following limitations: (1) " ... receive from the
merchant device ... (i) a first amount of a transaction with a first party
having a credit line with one or more credit providers, (ii) details of the
credit lines and (iii) details of the first party"; (2) "(i) automatically generate,
using the received details, one or more credit requests for the first amount,
and (ii) transmit the requests to one or more credit providers ... "; (3) "upon
receiving the authorizations of the requests, issue payment of the first
amount to the merchant"; (4) " ... store a record for each of multiple
transactions, which records include, for each given transaction: details of a
party of the given transaction having second credit lines with one or more
primary credit providers, details of the second credit lines, the amount of the
given transaction, details of received credit authorizations relating to the
given transaction, terms of payment of the amount of the given transaction, a
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history of payments relating to the amount of the given transaction and a
current outstanding balance of the amount of the given transaction";
( 5) "monitor dates of expiration of authorizations within the records stored
in said data storages and trigger said credit server to re-securitize a given
current outstanding balance, prior to expiration of a latest authorization
relating to the given current outstanding balance"; and (6) " ... (i)
automatically generate, upon being triggered by said monitoring unit, a
second set of one or more credit requests for an outstanding balance of the
first amount, based on the data stored in said records, and (ii) transmit the
second set of credit requests to the one or more credit providers over the
DDN." Appeal Br. 22-23 (Claims Appendix).
These limitations, under their broadest reasonable interpretation,
recite a method of automated cyclical securitization. See Appeal Br. 11
("Such a cyclic securitization system (interfacing between the merchant
systems and the automated credit systems of major credit providers to
generate a long term security from an automated short term credit
authorization system) was never practiced nor even contemplated prior to
the present application." (Emphasis omitted)). For example, claim 21 recites
receiving a transaction request from a merchant for a purchase of a certain
amount, as recited in limitation 1. The details of this request are used to
generate and transmit a credit request to the credit providers, as recited in
limitation 2. Next, "upon receiving the authorizations of the requests,"
payment of the first amount is issued to the merchant, completing the
transaction, as recited in limitation 3. Information about the transaction is
then stored, as recited in limitation 4, by creating a record of the transaction.
This stored information is used to flag, prior to expiration of the initial credit
authorization, any outstanding balance, as recited in limitation 5, and a
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second credit request can be generated for the outstanding balance. The
second credit request is transmitted to the credit providers, as recited in
limitation 6, which acquires re-securitization of any outstanding balance.
This cyclic securitization transaction is a type of purchase with the
provision of ongoing funding, which is an economic act similar to
processing an application for financing a purchase found to be an abstract
idea in Credit Acceptance Corp. v. Westlake Servs., 859 F.3d 1044 (Fed. Cir.
2017). Moreover, while an automated method of providing such cyclic
securitization may be novel, the Specification itself notes that "[ s ]everal
consumption and purchasing mechanisms have been around, some going
back to the dawn of history, allowing consumers to purchase goods and
services without necessarily having the required funds at the time of
purchase, rather using another's money to finance the purchase, and then
repaying the money at a later stage," including "[r]evolving credit card
schemes: allowing consumers to pay their credit card expenses gradually
(revolving them)." Spec. ,r,r 4--5.
"We see no meaningful distinction between this type of financial
industry practice and 'the concept of intermediated settlement' held to be
abstract in Alice ... or the 'basic concept of hedging' held to be abstract in
Bilski." Credit Acceptance Corp., 589 F.3d at 1054 (citing Alice, 573 U.S.
at 219; Bilski v. Kappas, 561 U.S. 593, 611 (2010)); see also BuySAFE, Inc.
v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (holding unpatentable
claims "squarely about creating a contractual relationship----a 'transaction
performance guaranty'-that is beyond question of ancient lineage").
Accordingly, we conclude the claims recite a fundamental economic
practice, which is a certain method of organizing human activity identified
in the Revised Guidance, and thus an abstract idea. Revised Guidance, 84
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Fed. Reg. at 52, 53 (listing "Certain methods of organizing human activity-
fundamental economic principles or practices" as one of the "enumerated
groupings of abstract ideas").
"Directed to an Abstract Idea "-Practical Application
If a claim recites a judicial exception, we determine whether the
recited judicial exception is integrated into a practical application of that
exception by: (a) identifying whether there are any additional elements
recited in the claim beyond the judicial exception( s ); and (b) evaluating
those additional elements individually and in combination to determine
whether they integrate the exception into a practical application. If the
recited judicial exception is integrated into a practical application, the claim
is not directed to the judicial exception.
Here, claim 21 recites the additional elements of "communication
circuitry adapted to communicate over a distributed data network (DDN),"
"an electronic interface adapted to communicate over the DDN with a
merchant computerized device," "a credit server," "communication circuitry
to communicate with automated authorization systems of primary credit
providers over the DDN," "processing circuitry," "a transaction server,"
"one or more data storages," and "a monitoring unit comprising processing
circuitry." Appeal Br. 22-23 (Claims Appendix).
Considering claim 21 as a whole, the additional elements do not apply
or use the abstract idea in a meaningful way such that the claim as a whole is
more than a drafting effort designed to monopolize the exception. The
Supreme Court guides that the "prohibition against patenting abstract ideas
'cannot be circumvented by attempting to limit the use of the formula to a
particular technological environment' or [by] adding 'insignificant
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postsolution activity."' Bilski, 561 U.S. at 610-11 (quoting Diamond v.
Diehr, 450 U.S. 175, 191-92 (1981)).
The Specification describes each of these elements as generic
components. For example, the Specification discloses that the transaction at
issue
may be initiated at or through any point of access ( e.g. online,
point of sale, mobile point of sale, automatic teller machine;
and/or any communication device, such as a mobile phone, or
attachment thereof, and or any other point of access known today
or to be devised in the future).
Spec. ,r 24.
Moreover, "the funding/payment/security method and systems ...
may be offered/facilitated by a separate application, device or system,
possibly designed to interface with organized online marketplaces," and "the
descriptions in this application in relation to an online marketplace may also
be applied to online services and/or forums which are not inherently ( or
intended as) marketplaces, yet experience a degree of commerce in their
activity." Id. ,r,r 39, 96. Finally, the Specification makes clear that
"discussions utilizing terms such as 'processing', 'computing', 'calculating',
'determining', or the like, refer to the action and/or processes of a computer
or computing system, or similar electronic computing device, or a man
operated such system, that manipulate and/or transform data ... " Id. ,r 67.
And the apparatus to perform these operations "may comprise a general-
purpose computer" with generic components. Id. ,r 68; see also Appeal Br.
19 ("The Appellants do not claim to have invented a server or a processor,
rather the specific novel structure and elements recited in the pending claims
designed to achieve automated credit results far improved over existing
automated credit systems.").
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Appellants' arguments have not persuaded us claim 21 is "directed to"
a patent-eligible concept. For Example, Appellants argue that claim 21
recites patentable subject matter because it recites a "novel" system
"unavailable in conventional automated credit systems." Appeal Br. 11; see
id. at 9-16. However, "[t]he 'novelty' of any element or steps in a process,
or even of the process itself, is of no relevance in determining whether the
subject matter of a claim falls within the § 101 categories of possibly
patentable subject matter." Intellectual Ventures I LLC v. Symantec Corp.,
838 F.3d 1307, 1315 (Fed. Cir. 2016) (emphasis omitted) (quoting Diehr,
450 U.S. at 188-89).
For these reasons, we determine that claim 21 does not integrate the
recited abstract idea into a practical application.
Inventive Concept
Because we agree with the Examiner that claim 21 is "directed to" an
abstract idea, we consider whether an additional element ( or combination of
elements) adds a limitation that is not well-understood, routine, conventional
("WURC") activity in the field or whether the additional elements simply
append WURC activities previously known to the industry, specified at a
high level of generality, to the judicial exception. Revised Guidance, 84
Fed. Reg. at 5 6. The Examiner's finding that an additional element ( or
combination of elements) is WURC activity must be supported with a
factual determination. Id. ( citing MPEP § 2106.05( d), as modified by the
Berkheimer Memorandum4).
4 "Changes in Examination Procedure Pertaining to Subject Matter
Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP,
Inc.)," April 19, 2018 (hereinafter "Berkheimer Memorandum").
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Whether the additional elements ("communication circuitry adapted to
communicate over a distributed data network (DDN)," "an electronic
interface adapted to communicate over the DDN with a merchant
computerized device," "a credit server," "communication circuitry to
communicate with automated authorization systems of primary credit
providers over the DDN," "processing circuitry," "a transaction server,"
"one or more data storages," and "a monitoring unit comprising processing
circuitry.") are WURC components or activity is a question of fact. See
Berkheimer v. HP Inc., 881 F.3d 1360, 1369 (Fed. Cir. 2018) ("Whether
something is well-understood, routine, and conventional to a skilled artisan
... is a factual determination.").
Here, as the Examiner points out, the additional elements "are recited
at a high level of generality to simply perform the generic computer
functions of generating, receiving, processing, storing, calculating and
transmitting information." Ans. 4--5; see, e.g., Spec. ,r,r 24, 39, 67, 68, 96
( discussed above). In addition, courts have recognized that receiving or
transmitting data over a network is WURC. OIP Techs., Inc., v.
Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (sending messages
over a network); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed.
Cir. 2014) (computer receives and sends information over a network).
Courts have also recognized that storing and retrieving information in
memory is WURC. Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d
1306, 1334 (Fed. Cir. 2015); OIP Techs., 788 F.3d at 1363.
CONCLUSION
For at least the above reasons, we agree with the Examiner that claim
21 is "directed to" an abstract idea and does not recite an "inventive
concept." Accordingly, we sustain the Examiner's rejection of claim 21
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under 35 U.S.C. § 101. For the same reasons, we also sustain the§ 101
rejection of dependent claims 22-25, not argued separately.
DECISION
For the above reasons, we affirm the Examiner's rejection of claims
21-25.
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) (2009).
AFFIRMED
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