Ex Parte Fernandes

Patent Trial and Appeal Board

Feb 27, 2017

14065315 (P.T.A.B. Feb. 27, 2017)

United States Patent and Trademark Office
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
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
14/065,315 10/28/2013 Jorge M. Fernandes BUCKP003 1083
67362 7590 03/01/2017
THE MUELLER LAW OFFICE, P.C.
12707 High Bluff Drive, Suite 200
San Diego, CA 92130
EXAMINER
AKINTOLA, OLABODE
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
03/01/2017 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):
MLOPAIR@themuellerlawoffice.com
heather@themuellerlawoffice.com
julianne@themuellerlawoffice.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JORGE M. FERNANDES
Appeal 2015-005177
Application 14/065,3151
Technology Center 3600
Before HUBERT C. LORIN, NINA L. MEDLOCK, and
ROBERT J. SILVERMAN, Administrative Patent Judges.
LORIN, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Jorge M. Fernandes (Appellant) seeks our review under 35 U.S.C.
§ 134 of the final rejection of claims 1, 3—25, 27, 28, and 30. We have
jurisdiction under 35 U.S.C. § 6(b) (2002).
SUMMARY OF DECISION
We REVERSE.
1 The Appellant identifies Quisk, Inc. as the real party in interest. App. Br.
3.
Appeal 2015-005177
Application 14/065,315
THE INVENTION
Claim 1, reproduced below, is illustrative of the subject matter on
appeal.
1. A computer-implemented method of configuring a payment service
subaccount, comprising:
a computerized payment system generating a transaction code
for a transaction that is initiated with the payment service subaccount,
the transaction code including information identifying a merchant of
the transaction, the transaction code providing uniform transaction
information as interpreted by a plurality of modules on the
computerized payment system,
the computerized payment system being a closed-loop payment
system;
the computerized payment system identifying an administrator
of the payment service subaccount using an account hierarchy and a
hierarchical position of the payment service subaccount in the account
hierarchy, the account hierarchy defining a set of accounts in the
closed-loop payment system;
the computerized payment system transmitting the transaction
code to an electronic device of the administrator;
the computerized payment system generating a control interface
that allows the administrator to use the transaction code to create a
locking rule for a future transaction which will take place at the
merchant using the payment service subaccount;
the computerized payment system storing the locking rule; and
the computerized payment system applying the locking rule to
the future transaction.
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Application 14/065,315
THE REJECTIONS
The Examiner relies upon the following as evidence of
unpatentability:
Mayer
Grigg
Boding
Ogrodski
US 2005/0027551 A1
US 2010/0250411 A1
US 2012/0197793 A1
US 8,645,250 B2
Feb. 3, 2005
Sep. 30, 2010
Aug. 2, 2012
Feb. 4, 2014
The following rejections are before us for review:
1. Claims 1, 3—25, 27, 28, and 30 are rejected under 35 U.S.C. §101 as
being directed to non-statutory subject matter.
2. Claims 1, 3—9, 12—16, 20-25, 27, and 28 are rejected under 35 U.S.C.
§ 102(a)(1) as being anticipated by Grigg.
3. Claims 10 and 17—19 are rejected under 35 U.S.C. §103(a) as being
unpatentable over Grigg and Ogrodski.
4. Claim 11 is rejected under 35 U.S.C. § 103(a) as being unpatentable
over Grigg and Boding.
5. Claim 30 is rejected under 35 U.S.C. § 103(a) as being unpatentable
over Grigg and Mayer.
Did the Examiner err in rejecting claims 1, 3—25, 27, 28, and 30 under
35 U.S.C. §101 as being directed to non-statutory subject matter?
Did the Examiner err in rejecting claims 1, 3—9, 12—16, 20-25, 27,
and 28 under 35 U.S.C. § 102(a)(1) as being anticipated by Grigg?
Did the Examiner err in rejecting claims 10 and 17—19 under
35 U.S.C. §103(a) as being unpatentable over Grigg and Ogrodski?
ISSUES
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Application 14/065,315
Did the Examiner err in rejecting claim 11 under 35 U.S.C. § 103(a) as
being unpatentable over Grigg and Boding?
Did the Examiner err in rejecting claim 30 under 35 U.S.C. § 103(a) as
being unpatentable over Grigg and Mayer?
ANALYSIS
The rejection of claims 1, 3—25, 27, 28, and 30 under 35 U.S.C. §101 as
being directed to non-statutory subject matter.
All the claims on appeal are rejected. But no claim with all its
limitations is specifically analyzed. Rather, the claims are treated as a group
and generally found to be “directed to generating transaction code and using
the transaction code to create a locking rule for future transactions. . . [and]
do no more than call on a ‘computerized payment system’ with basic
functionality for generating a transaction code and creating a locking rule
with said transaction code.” Ans. 3.
The Examiner does not actually say what the abstract idea is but we
assume, as the Appellant has, that the Examiner means to say that the claims
are directed to the concept “generating transaction code and using the
transaction code to create a locking rule for future transactions” and this
concept is a building block of human ingenuity and thus is an abstract idea.
Nor does the Examiner explain how it is that the claim elements are
“no more than ... a ‘computerized payment system’ with basic functionality
for generating a transaction code and creating a locking rule with said
transaction code.” Ans. 3. For example, all the claims call for a computer-
based system that is a “closed-loop system.” Why this limitation to a
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Application 14/065,315
computer-based system is structurally insignificant to render it more than
generic is not explained.
The Appellant argues, inter alia, that “the invention claimed here is
directed towards a concept inextricably tied to computer technology in that a
‘transaction code’ and a ‘locking rule’ are appropriate features only when
tied to computer technology.” Reply Br. 4.
We find that the Appellant has the better argument.
Alice Corp. Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347
(2014) identifies a two-step framework for determining whether claimed
subject matter is judicially-excepted from patent eligibility under § 101.
According to Alice step one, “[w]e must first determine whether the
claims at issue are directed to a patent-ineligible concept,” such as an
abstract idea. Alice, 134 S. Ct. at 2355. Emphasis added.
The “directed to” inquiry [ ] 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—after all, they
take place in the physical world. See Mayo, 132 S. Ct. at 1293 (“For
all inventions at some level embody, use, reflect, rest upon, or apply
laws of nature, natural phenomena, or abstract ideas.”) Rather, the
“directed to” inquiry applies a stage-one filter to claims, considered in
light of the specification, based on whether “their character as a whole
is directed to excluded subject matter.” Internet Patents Corp. v.
Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015); see
Genetic Techs. Ltd. v. Merial L.L.C., 2016 WF 1393573, at *5 (Fed.
Cir. 2016) (inquiring into “the focus of the claimed advance over the
prior art”).
Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). It
can be helpful to determine whether “the claims at issue [ ] can readily be
understood as simply adding conventional computer components to well-
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Application 14/065,315
known business practices” or not. Id. at 1338. See also Affinity Labs of
Tex., LLCv. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016). The
Specification supports viewing the claims as being directed more toward the
latter category than the former.
The claimed subject matter involves a computerized payment system
but all the claims narrow its scope to a “closed-loop payment system.” The
Specification explains:
The payment service 100 is preferably a closed system, such
that payment processing downstream from the merchant 104 can be
handled by a single business entity, such as payment system 106.
[para. 17, discussing Fig. 1]
According to the Specification,
The closed-system approach has several advantages over the
related art, where a complex network of different entities and
organizations can become involved in an otherwise simple purchase
transaction between a purchaser and a merchant, [para. 18]
Thus, the invention can be said to be directed to payment systems and to
seek to solve a problem of complexity with respect to them. The inventors
have solved this by employing a closed-loop system.
The closed-system approach allows for more precise control of
transaction information. A typical credit or debit card transaction
requires a purchaser to interact directly or indirectly with a merchant,
a payment service such as a credit card processor, and at least one
financial institution such as a bank. In such a system, each entity in
the transaction may only have access to the amount of information
necessary to conduct its role in the chain of payment processing, so
information can be lost along the chain. In addition, due to the fact
that separate entities need to protect themselves from fraud and errors
that may be introduced by their counterparties, each link in the chain
requires a certain degree of verification or authorization information
which places constraints on the transaction information that can be
routed through the system. Furthermore, the fact that multiple parties
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Application 14/065,315
are transferring information increases the number of potential security
leaks in the system that may expose that information to unscrupulous
external threats. This factor also places constraints on the transfer of
information within the system. In contrast, the closed-system
approach simplifies the amount and scope of information that must
move between entities, because only the single closed system-rather
than multiple entities-performs all payment functions downstream of
the merchant. As the aforementioned constraints on information
transfer are alleviated in a closed system, the system administrators
can modify the nature of information transfer within the system to
adapt to any kind of purpose that transaction information can be
applied to. Furthermore, the closed-system approach allows for
additional features—described below—because all of the transaction
information in the system is accessible by the system.
Spec. para. 19. The payment system itself is described in Figure 2 and its
architecture is described beginning at paragraph 20 of the Specification.
The record supports finding a focus of the invention — that is, when
reading the claims as a whole in light of the Specification — to be on
solving a problem with the way payment systems control transaction
information. The problem with controlling transaction information is not
itself necessarily patent-ineligible. And the advance over the prior art is not
simply “generating transaction code and using the transaction code to create
a locking rule for future transactions” (Ans. 3) but is an unconventional
improvement in the mechanism by which payment systems control
transaction information. Cf. Amdocs (Israel) Limited v. Openet Telecom,
Inc., No. 2015-1180, 2016 WL 64403 87, * 10 (Fed. Cir. Nov. 1,2016).
(“[T]his claim entails an unconventional technological solution (enhancing
data in a distributed fashion) to a technological problem (massive record
flows which previously required massive databases)). For these reasons, we
find the record weighs against a determination that “the claims at issue are
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Application 14/065,315
directed to a patent-ineligible concept,” such as an abstract idea” (Alice,
134 S. Ct. at 2355) as the Examiner found.
Having made a threshold determination under step one of the Alice
framework, we need not move to the second step.
For the foregoing reasons, the record does not support the
determination that the claimed subject matter is judicially-excepted from
patent eligibility under § 101. Accordingly, the rejection is not sustained.
The rejection of claims 1, 3—9, 12—16, 20—25, 27, and 28 under 35 U.S.C.
§ 102(a)(1) as being anticipated by Grigg.
All the independent claims (claims 1, 13, 24, and 27) require a
computerized payment system that is a “closed-loop payment system.”
The Examiner finds that Grigg expressly describes a “closed-loop
payment system” at paragraphs 6—7 and in the Figures. Final Act. 3.
Paragraphs 6—7 are reproduced below:
[0006] In some embodiments, the primary user can set the maximum
limit that the dependent user can spend on the payment device up to
the maximum amount that the financial institution has approved for
the account. In some embodiments, the primary user can also limit
the transactions that the dependent user can make at a store (i.e. a
physical store location, over the Internet, over the telephone with a
representative, etc.) for products. In some embodiments the store
includes specific stores, such as, but not limited to chain stores or
individual stores, or in other embodiments the store includes types of
stores that are grouped together in various categories. A store can be
grouped in more than one category, for example a one stop store that
sells a range of products can be grouped as both a grocery store and an
electronics store. In some embodiments the product includes specific
products or lines of products, such as, but not limited to a product sold
by a particular merchant, or in other embodiments products includes
types of products that are grouped together in various categories. A
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Application 14/065,315
product can be grouped into more than one category, for example, a
specific beer can be grouped into a category with other beers and also
be grouped into an alcoholic beverages category that includes beer,
wine, and liquor.
[0007] The primary user can limit the transactions that the dependent
user can make by, for example, adding Merchant Category Codes
(MCCs ), store names, store types, Universal Product Codes (UPCs ),
Stock Keeping Unit, product names, product types, and/or like
identifiers to a blocked list or an approved list of stores or products.
In some embodiments, the primary user can set both monetary limits
and time limits on the transactions the dependent user can make at the
blocked/approved types of stores or on the blocked/approved products
that the primary user added to the blocked/approved list.
Furthermore, the primary user can periodically edit the stores or the
products on the blocked/approved list, as well as the monetary and
time limits on the stores or products in order to control the
transactions made by the dependent user as the needs of the dependent
user change. In some embodiments, both the primary user and
dependent user can view the transactions made through the account by
logging into an online banking account. The dependent user is
prevented from having the ability to access the sections of the
dependent credit account related to the limits set by the primary user,
which control the transactions the dependent user is allowed to make.
Neither these cited disclosures nor the Figures expressly describe a
closed-loop system as claimed. We agree with the Appellant that “Grigg is
an explicit teaching of an open-loop system, because each statement
discloses the Grigg system interacting with other non-Grigg systems.” App.
Br. 8. “In contrast, the closed-system approach simplifies the amount and
scope of information that must move between entities, because only the
single closed system—rather than multiple entities—performs all payment
functions downstream of the merchant.” Spec, para 19.
Anticipation may also be found through inherency. In that regard, it is
possible that one of ordinary skill in the art might be led to consider a
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closed-loop-type system. But “[ijnherency, however, may not be established
by probabilities or possibilities. The mere fact that a certain thing may result
from a given set of circumstances is not sufficient.” Hansgirg v. Kemmer,
102 F.2d 212, 214 (CCPA 1939), quoted in Continental Can Co. USA v.
Monsanto Co., 948 F.2d 1264, 1269 (Fed. Cir. 1991).
The rejection as to the independent claims (claims 1, 13, 24, and 27)
and the claims depending therefrom (claims 3—9, 12, 14—16, 20—23, 25, and
28) is not sustained. A prima facie case of anticipation has not been made
out for the subject matter covered by these claims in the first instance by a
preponderance of the evidence.
The rejection of claims 10 and 17—19 under 35 U.S.C. §103 (a) as being
unpatentable over Grigg and Ogrodski.
The rejection of claim 11 under 35 U.S.C. §103 (a) as being unpatentable
over Grigg and Boding.
The rejection of claim 30 under 35 U.S.C. §103 (a) as being unpatentable
over Grigg and Mayer.
These rejection as to claims depending from the independent claims
addressed above are not sustained. They incorporate the Examiner’s
position that Grigg, in fact, discloses a “closed-loop” payment system. See
Final Act. 5—7. However, as explained above, a preponderance of the
evidence does not bear that out. Accordingly, a prima facie case of
obviousness has not been made out for the subject matter covered by these
claims in the first instance.
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CONCLUSIONS
The rejection of claims 1, 3—25, 27, 28, and 30 under 35 U.S.C. §101
as being directed to non-statutory subject matter is not sustained.
The rejection of claims 1, 3—9, 12—16, 20-25, 27, and 28 under 35
U.S.C. § 102(a)(1) as being anticipated by Grigg is not sustained.
The rejection of claims 10 and 17—19 under 35 U.S.C. § 103(a) as
being unpatentable over Grigg and Ogrodski is not sustained.
The rejection of claim 11 under 35 U.S.C. § 103(a) as being
unpatentable over Grigg and Boding is not sustained.
The rejection of claim 30 under 35 U.S.C. § 103(a) as being
unpatentable over Grigg and Mayer is not sustained.
DECISION
The decision of the Examiner to reject claims 1, 3—25, 27, 28, and 30
is reversed.
REVERSED
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