Ex Parte Duggal et al

Patent Trial and Appeal Board

Aug 23, 2018

12874063 (P.T.A.B. Aug. 23, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/874,063 09/01/2010
27571 7590
Ascenda Law Group, PC
333 W San Carlos St.
Suite 200
San Jose, CA 95110
08/27/2018
FIRST NAMED INVENTOR
Chanderpreet Singh Duggal
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.
5109-LPV-0120 6470
EXAMINER
TRAN,HAI
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
08/27/2018 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):
patents@ascendalaw.com
tarek.fahmi@ascendalaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CHANDERPREET SINGH DUGGAL,
KRISTIN HOYNE GOMES, and CHARLES L. KIMES
Appeal2017-003363
Application 12/874,063
Technology Center 3600
Before CAROLYN D. THOMAS, ERIC B. CHEN, and
AMBER L. HAGY, Administrative Patent Judges.
HAGY, Administrative Patent Judge.
DECISION ON APPEAL
Appellants 1 appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 1-24, which are all of the pending claims. We
have jurisdiction under 35 U.S.C. § 6(b ).
We affirm.
1 Appellants identify III Holdings 1, LLC, as the real party in interest. (App.
Br. 3.)
Appeal2017-003363
Application 12/874,063
STATEMENT OF THE CASE
Introduction
According to Appellants, "[t]he present disclosure generally relates to
electronic commerce, and more particularly, a system and method of fraud
prevention for electronic commerce." (Spec. ,r 1.)
Exemplary Claim
Claims 1, 8, 19, and 20 are independent. Claim 1, reproduced below,
is exemplary of the claimed subject matter:
1. A method comprising:
creating or receiving, by a computer based system, an
authorization request for a transaction;
transmitting, by the computer based system, the
authorization request through a third party system to a financial
institution; and
transmitting, by the computer based system, a request to
invoke a fraud mitigation tool for the transaction, wherein the
fraud mitigation tool is hosted by the financial institution, and
wherein the request to invoke the fraud mitigation tool is
transmitted directly to the financial institution and not
transmitted via the third party system.
REJECTIONS
Claims 1-7 stand rejected under 35 U.S.C § 112, second paragraph, as
being indefinite. (Final Act. 2-3.)
Claims 1-24 stand rejected under 35 U.S.C. § 101 as being directed to
patent-ineligible subject matter (judicial exception/ abstract idea). (Final
Act. 5-10.)
2
Appeal2017-003363
Application 12/874,063
ISSUES
1. Whether the Examiner erred in concluding that the recitation of
"creating or receiving, by a computer-based system, an authorization request
for a transaction," as recited in independent claim 1, renders the claim
invalid under 35 U.S.C. § 112, second paragraph, for being indefinite.
2. Whether the Examiner erred in rejecting claims 1-24 under 35
U.S.C. § 101 as being directed to patent-ineligible subject matter.
ANALYSIS
A. § 112 Rejection
The Examiner concludes that independent claim 1 is indefinite
because "[ c ]laim 1 recites 'creating or receiving,"' which "are different,"
and thus "[t]he metes and bounds of the claim cannot be understood because
of the lack of definiteness in the claim." (Final Act. 3.) In other words, the
basis of the Examiner's rejection is that the recitation in claim 1 of the
alternative expression "creating or receiving" renders the claim indefinite.
Appellants assert the alternative expression is intended and is clear in
that it covers the situation in which the computer based system performs the
step of "creating ... an authorization request for a transaction," as well as
the situation in which the computer based system performs the step of
"receiving ... an authorization request' for a transaction." (App. Br. 8.)
During examination, after applying the broadest reasonable
interpretation to the claim, if the metes and bounds of the claimed invention
are not reasonably clear, the claim is indefinite. In re Packard, 751 F.3d
1307, 1310 (Fed. Cir. 2014). The test for definiteness under 35 U.S.C.
§ 112, second paragraph, is whether "those skilled in the art would
3
Appeal2017-003363
Application 12/874,063
understand what is claimed when the claim is read in light of the
specification." Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F .2d
1565, 1576 (Fed. Cir. 1986).
We are persuaded of Examiner error. We conclude that those skilled
in the art would have understood what is claimed when the phrase "creating
or receiving" is read in light of the Specification-in particular, this phrase,
broadly but reasonably construed, refers to the claimed "computer based
system" performing either the step of "creating" or "receiving." The mere
use of an alternative expression in claim 1 does not render the claim
indefinite under 35 U.S.C. 112, second paragraph. We, therefore, do not
sustain the Examiner's rejection of claim 1 ( or claims 2-7 dependent
thereon) as indefinite under 35 U.S.C. § 112, second paragraph.
In the Answer, the Examiner further states "Appellant's specification
supports the limitations 'transmit and/or receive a transaction authorization
request' and 'creating an authorization decision', but it does not support the
limitation 'creating an authorization request for a transaction." (Ans. 4.) As
Appellants point out, "[t]his new assertion seems to be a written description
issue rather than a definiteness issue. To the best of Appellant's
understanding, the Examiner is asserting that the specification discusses
creating an authorization decision but not an authorization request." (Reply
Br. 2.) Appellants then point to disclosure in the Specification that they
assert, and we agree, would have been understood by the ordinarily skilled
artisan as supporting both creating and receiving an authorization request by
a computer-based system, as recited in claim 1. (Id. at 2-3 ( citing
Specification Fig. 2 and ,r 27).)
4
Appeal2017-003363
Application 12/874,063
For the foregoing reasons, we do not sustain the Examiner's 35
U.S.C. § 112, second paragraph, rejection of claims 1-7. To the extent the
Examiner raises a new ground of rejection in the Answer based on lack of
written description, we agree with Appellants that such rejection lacks basis.
B. § 101 Rejection
The Supreme Court has set forth an analytical "framework for
distinguishing patents that claim laws of nature, natural phenomena, and
abstract ideas from those that claim patent-eligible applications of those
concepts." Alice Corp. v. CLS Bankint'l, 134 S. Ct. 2347, 2355 (2014)
(citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66,
71-73 (2012)). In the first step of the analysis, we determine whether the
claims at issue are "directed to" a judicial exception, such as an abstract
idea. Alice, 134 S. Ct. at 2355. If not, the inquiry ends. Thales Visionix Inc.
v. US., 850 F.3d 1343, 1346 (Fed. Cir. 2017); Enfzsh, LLC v. Microsoft
Corp., 822 F.3d 1327, 1339 (Fed. Cir. 2016). If the claims are determined to
be directed to an abstract idea, then we consider under step two whether the
claims contain an "inventive concept" sufficient to "'transform the nature of
the claim' into a patent-eligible application." Alice, 134 S. Ct. at 2355
( citation omitted).
Noting that the two stages involve "overlapping scrutiny of the
content of the claims," the Federal Circuit has described "the first-stage
inquiry" as "looking at the 'focus' of the claims, their 'character as a
whole,"' and "the second-stage inquiry (where reached)" as "looking more
precisely at what the claim elements add-specifically, whether, in the
Supreme Court's terms, they identify an 'inventive concept' in the
application of the ineligible matter to which (by assumption at stage two) the
5
Appeal2017-003363
Application 12/874,063
claim is directed." Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350,
1353 (Fed. Cir. 2016). In considering whether a claim is directed to an
abstract idea, we acknowledge-as did the Court in Mayo--that "all
inventions at some level embody, use, reflect, rest upon, or apply laws of
nature, natural phenomena, or abstract ideas." Mayo, 566 U.S. at 71. 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 is itself the abstract idea and whether the claims merely invoke
generic processes and machinery. See Enfzsh, 822 F.3d at 1336.
Step One: Whether the Claims Are Directed to a Patent-Ineligible
Concept (Abstract Idea)
In applying the framework set out in Alice, and as the first step of that
analysis, the Examiner concludes claim 1 2 is directed to the abstract idea of
"fraud mitigation," which the Examiner finds is a "fundamental economic
practice (mitigating risk)." (Final Act. 7.) The Examiner further concludes
claim 1 is directed to the abstract idea of "transmitting two different requests
via different communication paths." (Id. at 8.)
In challenging the Examiner's determination that the claims are
directed to an abstract idea, Appellants argue the Examiner's
characterization of the claims is at too high a level of abstraction and ignores
"the actual language of the claims." (App. Br. 12.) In particular, Appellants
argue "the asserted abstract idea of 'fraud mitigation based on data"' ignores
2 Appellants present arguments only with regard to independent claim 1, and
do not argue independent claims 8, 19, or 20, or the respectively dependent
claims, separately. (See App. Br. 9, 17.) We select claim 1 as the
representative claim, pursuant to our authority under 37 C.F.R.
§ 4I.37(c)(l)(iv).
6
Appeal2017-003363
Application 12/874,063
the "transmitting" steps of claim 1, in which one request ( the "authorization
request") goes through a third party to a financial institution, whereas the
"request to invoke a fraud mitigation tool" goes direct to the financial
institution. (Id. at 12-13.) Appellants further argue "the apparently-asserted
abstract idea of 'transmitting two different authorization requests via
different communication paths' ignores that ... the two requests are related
rather than simply being 'two different authorization requests' .... " (Id. at
13.)
We are not persuaded of error. The Examiner's characterization of
claim 1 as being directed to the abstract idea of fraud mitigation is supported
by precedent. For example, our reviewing court has explained that claims
directed to "the mere formation and manipulation of economic relations"
and "the performance of certain financial transactions" are directed to
abstract ideas. Content Extraction & Transmission LLC v. Wells Fargo
Bank, Nat. Ass 'n, 776 F.3d 1343, 1347 (Fed. Cir. 2014); see also, e.g.,
Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014)
( computer-implemented system for "using advertising as a currency [on] the
Internet"); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1352, 1355 (Fed.
Cir. 2014) (computer-implemented system for guaranteeing performance of
an online transaction); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d
1366, 1370 (Fed. Cir. 2011) (computer-implemented system for "verifying
the validity of a credit card transaction over the Internet"). (See also Non-
Final Act. 14--15 (citing, e.g., Ultramercial).)
We are also not persuaded that the Examiner erred in characterizing
claim 1 as directed to the abstract idea of sending different requests via
different communication paths. Appellants argue that claim 1 is not directed
7
Appeal2017-003363
Application 12/874,063
to an abstract idea because it claims an "improvement in computer-related
technology"-namely: "claim 1 improves the implementation and security
of auxiliary services for electronic 'transaction[ s]' by transmitting an
'authorization request for [the] transaction' via a physically different path
than an auxiliary request for the transaction." (App. Br. 14.) We disagree.
There is a fundamental difference between computer functionality
improvements, on the one hand, and uses of existing computers as tools to
perform a particular task, on the other. Indeed, the Federal Circuit applied
this distinction in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir.
2016) in rejecting a § 101 challenge at the step one stage in the Alice
analysis because the claims at issue focused on a specific type of data
structure, i.e., a self-referential table for a computer database, designed to
improve the way a computer carries out its basic functions of storing and
retrieving data, and not on asserted advances in uses to which existing
computer capabilities could be put. Id. at 1335-36.
We find no parallel here between claim 1 and the claims in Enfzsh nor
any comparable aspect in claim 1 that represents "an improvement to
computer functionality." The alleged advantages that Appellants tout do not
concern an improvement to computer capabilities but instead relate to an
alleged improvement in fraud mitigation that allows protection of sensitive
user data. In particular, Appellants argue that the reason to send certain
requests directly to the financial institution ( such as requests to invoke a
fraud mitigation tool), and not through a third party, is because "the
additional information needed by the fraud mitigation tool may be private or
sensitive data . ... " (App. Br. 10 (emphasis added).) Thus, Appellants'
invention is directed to the business problem of preserving confidentiality of
8
Appeal2017-003363
Application 12/874,063
user data in a transaction with a financial institution, and is directed to the
business solution of allowing some types of data ( such as an "authorization
request") to be transmitted to a third party ( such as a "payment processor")
before they go to the financial institution, while transmitting more sensitive
requests ( to invoke "a fraud mitigation tool") directly to the financial
institution-a process in which a computer is used as a tool in its ordinary
capacity. (See also Ans. 14.)
Thus, as the Examiner concludes, and we agree, Appellants' invention
boils down to the abstract concept of transmitting different types of requests
to a financial institution via different communication paths ( direct versus
indirect). As our reviewing court has explained, the abstract idea exception
to patent eligibility disallows the patenting of "basic concept[ s ]," such as
"processing information through a clearinghouse." Dealertrack, Inc. v.
Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012); see also Alice, 134 S. Ct. at
2354. Similar analysis applies here. Appellants do not persuasively explain
how the type of request that is transmitted, or whether it is transmitted
directly versus indirectly, makes the process any less abstract. Appellants'
Specification notes that transmitting authorization requests to a financial
institution through a third party is well-known (Spec. ,r 2; see also App. Br.
10.) And Appellants do not assert that transmitting other types of requests
directly to a financial institution is unconventional, nor do Appellants claim
to invoke new technology in directing different requests along different
communication paths. The idea that certain types of requests in a financial
transaction, such as those containing "private or sensitive data," should be
sent directly to a recipient, as opposed to going through a third party, is a
basic principle and part of a fundamental economic practice.
9
Appeal2017-003363
Application 12/874,063
To the extent Appellants maintain that the claims are not directed to
one or more abstract ideas because they are allegedly patentable over the
prior art (in light of the lack of prior-art rejection), Appellants misapprehend
the controlling precedent. (See App. Br. 13.) A novel and nonobvious claim
directed to a purely abstract idea is, nonetheless, patent-ineligible. See
Mayo, 132 S. Ct. at 1304. As the Federal Circuit recently explained, a claim
to an abstract idea is not rendered patentable even if it is "[g]roundbreaking,
innovative, or even brilliant." See SAP Am., Inc. v. InvestPic, LLC, 2018
WL 3656048 at *1 (Fed. Cir. Aug. 2, 2018) (citation omitted). Rather,
where, as here, "the advance lies entirely in the realm of abstract ideas," the
claims to that advance are ineligible for patenting. See id.
Because we agree with the Examiner, at step one of the Alice analysis,
that the claims are directed to an abstract idea, we tum to the second step of
the Alice analysis, in which we must determine whether the additional
elements of the claims transform them into patent-eligible subject matter.
Step Two: Whether Additional Elements Transform the Idea Into
Patent-Eligible Subject Matter
Having concluded the claims are directed to an abstract idea, the
Examiner also determines the additional elements or combinations of
elements do not amount to "significantly more" than the abstract idea itself.
(Final Act. 10.) In particular, the Examiner determines "[t]he claims only
transmit the requests and do not transform the subject matter into different
state or thing. The claims do not purport to improve the function of the
computer itself, or to improve any other technology or technical field. Use
of an unspecified generic computer does not transform an abstract idea into a
patent-eligible invention." (Id. at 9--10.) The Examiner further finds:
10
Appeal2017-003363
Application 12/874,063
The claim merely amounts to the application or instructions to
apply the abstract idea (i.e. transmitting the requests) on a
system, and is considered to amount to nothing more than
requiring a generic system ( e.g. a system comprising a generic
database; a generic element for creating/receiving data; a generic
element for transmitting the requests) to merely carry out the
abstract idea itself. As such, the claim, when considered as a
whole, is nothing more than the instruction to implement the
abstract idea in a particular, albeit well-understood, routine and
conventional technological environment.
(Id. at 9.)
Appellants argue the "technical features" ( addressed above) "are
related to improvements in computer transaction implementation and
security, which are computer-related technologies." (App. Br. 15-16.) We
are not persuaded that the recitation of a "computer based system" in claim 1
renders the claim patent-eligible. "For the role of a computer in a computer-
implemented invention to be deemed meaningful in the context of this
analysis, it must involve more than performance of 'well-understood,
routine, [and] conventional activities previously known to the industry."'
Content Extraction and Transmission LLC v. Wells Argo Bank, N.A., 776
F.3d 1343, 1347--48 (Fed. Cir. 2014) (quoting Alice, 134 S. Ct. at 2359). The
Federal Circuit recently held that"[ w ]hether something is well-understood,
routine, and conventional to a skilled artisan at the time of the patent is a
factual determination." Berkheimer v. HP Inc., 881 F.3d 1360, 1369 (Fed.
Cir. 2018). Claim 1 involves nothing more than generic computer
functionality related to transmitting data in the form of requests to authorize
a transaction and to invoke a fraud mitigation tool. As the Examiner finds,
and we agree, the claimed process uses computer technology in a
conventional and well-understood manner. (Final Act. 9; see also Ans. 17-
11
Appeal2017-003363
Application 12/874,063
18 (citing Spec. ,r 65).) Thus, we are not persuaded that the Examiner erred
in finding that the claim elements, considered alone or in combination, do
not add "significantly more" to the abstract idea to which claim 1 is directed.
Appellants do not deny that their claims invoke "general-purpose
computing devices," but argue that fact "does not mean that claim 1 is
ineligible." (App. Br. 16.) Appellants' claims are not, however, deemed
patent-ineligible merely because they invoke generic computing technology.
They are deemed patent-ineligible because they are directed to abstract
ideas, as noted above, and the recitation of generic computing technology is
insufficient to amount to "significantly more" than the recited abstract ideas
to salvage their eligibility. See Enfish, 822 F.3d at 1336.
For the foregoing reasons, we are not persuaded the Examiner erred in
rejecting independent claim 1 under 35 U.S.C. § 101 as directed to patent-
ineligible subject matter, or in rejecting on the same basis claims 2-24,
which Appellants do not argue separately.
DECISION
The Examiner's 35 U.S.C. § 112, second paragraph, rejection of
claims 1-7 is reversed.
The Examiner's 35 U.S.C. § 101 rejection of claims 1-24 is affirmed.
Because we have affirmed at least one ground of rejection with
respect to each claim on appeal, the Examiner's decision is affirmed. See 37
C.F.R. § 4I.50(a)(l).
12
Appeal2017-003363
Application 12/874,063
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).
AFFIRMED
13