Ex Parte Fordyce et al

Patent Trial and Appeal Board

Feb 6, 2017

12048177 (P.T.A.B. Feb. 6, 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.
12/048,177 03/13/2008 Edward W. Fordyce III P-14129US/119945-141291US 4393
95352 7590 02/08/2017
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EXAMINER
Intellectual Property Department
77 West Wacker Drive, Suite 3100
BOVEJA, NAMRATA
Chicago, IL 60601 ART UNIT PAPER NUMBER
3682
NOTIFICATION DATE DELIVERY MODE
02/08/2017 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):
clairt@gtlaw.com
rupickd@gtlaw.com
gtipmail @ gtlaw. com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte EDWARD W. FORDYCE III and SARAH PANKRATZ SUAREZ
Appeal 2015-0021021
Application 12/048, 1112
Technology Center 3600
Before NINA L. MEDLOCK, PHILIP J. HOFFMANN and
CYNTHIA L. MURPHY, Administrative Patent Judges.
MEDLOCK, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner’s final
rejection of claims 8—13, 15, and 24—26. We have jurisdiction under
35 U.S.C. § 6(b).
We AFFIRM.
1 Our decision references Appellants’ Appeal Brief (“App. Br.,” filed
September 8, 2014) and Reply Brief (“Reply Br.,” filed December 3, 2014),
and the Examiner’s Answer (“Ans.,” mailed October 3, 2014) and Final
Office Action (“Final Act.,” mailed April 11, 2014).
2 Appellants identify Visa, Inc. as the real party in interest. App. Br. 2.
Appeal 2015-002102
Application 12/048,177
CLAIMED INVENTION
Appellants’ claimed invention “generally relates to loyalty programs
and more particularly, to methods, systems and apparatus for using a
graphical user interface to collaborate on parameters of a loyalty program”
(Spec. 12).
Claims 8, 25, and 26 are the independent claims on appeal. Claim 8,
reproduced below with added bracketed notations, is illustrative of the
claimed subject matter:
8. A method, comprising:
[(A)] obtaining, from a collaborating merchant, via a
computing device, a selection of an inventory item as part of a
first proposal to a first entity of a plurality of collaborating
entities and at least one parameter for defining a loyalty program,
the loyalty program including an offer to at least one consumer
to conduct a qualifying transaction with the collaborating
merchant for the inventory item;
[(B)] conducting a first negotiation with the first entity,
comprising:
[(1)] delivering the first proposal to the first entity;
[(2)] receiving from the first entity, a first response
to the first proposal;
[(3)] forming, via the computing device, a first
reply to the first response;
[(4)] delivering the first reply to the first entity as
a new proposal;
[(5)] continuing the first negotiation using one or
more additional new proposals until there exists a first
negotiated set of parameters for the loyalty program to
which the collaborating merchant and the first entity has
agreed;
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[(C)] conducting a second negotiation with a second
entity of the plurality of collaborating entities until there exists a
second negotiated set of parameters for the loyalty program to
which the collaborating merchant and the second entity has
agreed, the second set of negotiated parameters comprising the
first set of negotiated parameters and at least one additional
parameter not included in the first set of negotiated parameters,
such that the at least one additional parameter is only applicable
to the second entity.
REJECTIONS
Claims 8—13, 15, and 24—26 are rejected under 35 U.S.C. § 101 as
directed to non-statutory subject matter.
Claims 8—13, 15, and 24—26 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Dalai (US 2004/0133504 Al, pub. July 8, 2004) and
Iannacci (US 7,318,049 B2, iss. Jan. 8, 2008).
ANALYSIS
Non-Statutory Subject Matter
Under 35 U.S.C. § 101, an invention is patent-eligible if it claims a
“new and useful process, machine, manufacture, or composition of matter.”
35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101
to include an implicit exception: “[l]aws of nature, natural phenomena, and
abstract ideas” are not patentable. See, e.g., Alice Corp. Pty Ltd. v. CLS
BankInt7, 134 S. Ct. 2347, 2354 (2014).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus Labs.,
Inc., 132 S. Ct. 1289, 1300 (2012), “for distinguishing patents that claim
laws of nature, natural phenomena, and abstract ideas from those that claim
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patent-eligible applications of these concepts.” Alice Corp., 134 S. Ct.
at 2355. The first step in that analysis is to “determine whether the claims at
issue are directed to one of those patent-ineligible concepts,” id., e.g., to an
abstract idea. If the claims are not directed to an abstract idea, the inquiry
ends. Otherwise, the inquiry proceeds to the second step where the elements
of the claims are considered “individually and ‘as an ordered combination”’
to determine whether there are additional elements that “‘transform the
nature of the claim’ into a patent-eligible application.” Alice Corp.,
134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1297).
The Court acknowledged in Mayo, that “all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena,
or abstract ideas.” Mayo, 132 S. Ct. at 1293. We, therefore, look to whether
the claims focus on a specific means or method that improves the relevant
technology or are instead directed to a result or effect that itself is the
abstract idea and merely invoke generic processes and machinery.
See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).
Appellants first argue that the Examiner has failed to establish a prima
facie rejection under § 101 because the Examiner “has failed to provide any
specific reasoning as to why [steps B(l) — B(5), as recited in claim 8] would
be considered abstract to a person of ordinary skill in the art” (Reply Br. 9—
10). We disagree.
The Federal Circuit has repeatedly noted that “the prima facie case is
merely a procedural device that enables an appropriate shift of the burden of
production.” Hyatt v. Dudas, 492 F.3d. 1365, 1369 (Fed. Cir. 2007) (citing
In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992)). The court has held
that the USPTO carries its procedural burden of establishing a prima facie
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case when its rejection satisfies the requirements of 35 U.S.C. § 132 by
notifying the applicant of the reasons for rejection, “together with such
information and references as may be useful in judging of the propriety of
continuing the prosecution of [the] application.” See In re Jung, 637 F.3d
1356, 1362 (Fed. Cir. 2011). Thus, all that is required of the Office is that it
set forth the statutory basis of the rejection, and any reference or references
on which the rejection relies, in a sufficiently articulate and informative
manner as to meet the notice requirement of § 132. Id.', see also Chester v.
Miller, 906 F.2d 1574, 1578 (Fed. Cir. 1990) (Section 132 “is violated when
the rejection is so uninformative that it prevents the applicant from
recognizing and seeking to counter the grounds for rejection.”).
Here, in rejecting the pending claims under § 101, the Examiner
analyzed the claims using the Mayo two-step framework, in accordance with
the guidance set forth in the PTO’s June 25, 2014 “Preliminary Examination
Instructions in view of the Supreme Court Decision in Alice Corporation
Pty. Ltd. v. CLS Bank International, et al.C the Examiner also fully
complied with the requirement set forth in Manual of Patent Examining
Procedure (“MPEP”) § 2106(111) to “identify and explain in the record the
reasons why a claim is for an abstract idea.” Specifically, the Examiner
notified Appellants that independent claims 8, 25, and 26 are directed to
negotiating the terms of a loyalty program, i.e., to a fundamental business
practice and, therefore, to an abstract idea; that the claims do not include
limitations that are “significantly more” than the abstract idea; and that the
claims require no more than a generic computer to perform generic computer
functions, e.g., sending and receiving data, which are well-understood,
routine, and conventional activities previously known in the industry
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(Ans. 13—15). The Examiner, thus, put Appellants on notice as to the
reasons for the rejection “together with such information and references as
may be useful in judging of the propriety of continuing the prosecution of
[the] application.” 35 U.S.C. § 132. And, in doing so, the Examiner set
forth a prima facie case of unpatentability.
Appellants do not contend that they did not understand the Examiner’s
new ground of rejection. To the contrary, Appellants’ understanding of the
rejection is clearly manifested by their substantive response to the rejection,
as set forth in their Reply Brief (Reply Br. 10—12).
Turning to the framework set forth in Alice, Appellants argue that
even assuming, arguendo, that claims 8—13, 15, and 24—26 are directed to an
abstract idea, the claims recite significantly more than the abstract idea itself
(Reply Br. 10—12). More particularly, citing paragraph 37 of the
Specification, Appellants assert that the pending claims “provide
improvements to the technical field of loyalty programs” because
“exemplary embodiments of the present disclosure may be ‘versatile,
allowing for a combination of diverse parameters’ and can be ‘created in an
a la carte fashion having parameters that mimic those in a pre-existing
loyalty program and other parameters that may be unique or did not exist
before’” {id. at 11). That argument is not persuasive at least because
Appellants do not adequately explain how or why, and we fail to see how or
why, merely selecting particular parameters or a particular combination of
parameters in creating a loyalty program constitutes a technological
improvement in the field of loyalty programs.
Contrary to Appellants’ assertions, we also find no parallel between
the claims at issue here and claim 1 of U.S. Patent No. 7,631,191, which the
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Board considered in its Decision to Institute in PNC Bank v. Secure Axcess,
CBM2014-00100, 2014 WL 4537440 (PTAB September 9, 2014).3
In PNC Bank, the Board found that claim 1, as a whole, relates to a
computer-implemented method to transform data in a particular manner
(i.e., by inserting an authenticity key to create formatted data, enabling a
particular type of computer file (a preference file) to be located, from which
an authenticity stamp is retrieved), and the Board remarked that “[o]n its
face, there is nothing immediately apparent about these physical steps that
would indicate that the claim is directed to an abstract idea.” Id. at *12.
The Board found that the claim requires a fundamental change to the data —
a change that cannot be performed in the human mind (id. at *13), and that
Petitioner failed to provide persuasive argument or supporting evidence that
claim 1 does not meet the transformation prong of the Bilski machine-or-
transformation test. Id. at * 14. The Board, thus, held that Petitioner failed
to demonstrate that it is more likely than not that claim 1 is unpatentable
under 35 U.S.C. § 101. Id. at *15.
3 Claim 1 reads:
1. A method comprising:
transforming, at an authentication host computer, received
data by inserting an authenticity key to create formatted data; and
returning, from the authentication host computer, the
formatted data to enable the authenticity key to be received from the
formatted data and to locate a preferences file,
wherein an authenticity stamp is retrieved from the
preferences file.
PNC Bank, 2014 WL 4537440 at *3.
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Although Appellants maintain otherwise (see Reply Br. 11—12), we find no
comparable transformation of data in forming replies to responses and
delivering replies as new proposals, e.g., “forming, via the computing
device, a first reply to the first response; [and] delivering the first reply to
the first entity as a new proposal,” as recited in claim 8.
We also are not persuaded of Examiner error by Appellants’ argument
that the pending claims include “meaningful limitations” because the claims
are “patentably distinguishable over the references cited by the Examiner”
(id. at 12). Indeed, to the extent that Appellants maintain that the pending
claims necessarily contain an “inventive concept” because the claimed
invention is novel and/or non-obvious (id.), Appellants misapprehend the
controlling precedent. 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.
We are not persuaded for the reasons set forth above that the
Examiner erred in rejecting claims 8—13, 15, and 24—26 under 35 U.S.C.
§101. Therefore, we sustain the Examiner’s rejection.
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Obviousness
Independent Claims 8, 25, and 26
We are persuaded by Appellants’ argument that the Examiner erred in
rejecting independent claims 8, 25, and 26 under 35 U.S.C. § 103(a) because
neither Dalai nor Iannacci, individually or in combination, discloses or
suggests “conducting a first negotiation with [a] first entity” until there is an
agreed-upon “first negotiated set of parameters for [a] loyalty program” and
“conducting a second negotiation with a second entity” until there is an
agreed-upon “second negotiated set of parameters for the loyalty program,”
with “the second set of negotiated parameters comprising the first set of
negotiated parameters and at least one additional parameter not included in
the first set of negotiated parameters, such that the at least one additional
parameter is only applicable to the second entity,” as recited in independent
claim 8, and similarly recited in independent claims 25 and 26 (App. Br. 8—
11).
Responding to Appellants’ argument, the Examiner acknowledges in
the Answer that the negotiation described in the Dalai Abstract is a single
negotiation in which (1) a first party enters a first set of parameters, i.e., a
first objective and one or more first constraints; (2) the second party enters a
second set of parameters, i.e., a second objective and one or more second
constraints; and (3) the Dalai system negotiates a global solution by
determining a first optimal value based on the first set of parameters and a
second optimal value based on the second set of parameters (Ans. 18).
However, the Examiner takes the position that Dalai also discloses
conducting simultaneous multi-party negotiations, i.e., that a party may be
involved in two or more simultaneous negotiations with one or more other
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parties, and that the two or more negotiations may be “interleaved in any
appropriate manner in whole or in parr {id. (citing Dalai 113)).
The Examiner notes that “[wjhile Dalai discloses a negotiation
process, Iannacci discloses a merchant setting up a loyalty program in which
the other various parties have agreed upon similar, but varying constraints,
such as the amount of loyalty points per dollar spent” {id. at 17 (citing
Iannacci, col. 53,11. 7—41)). And the Examiner cites Iannacci as disclosing a
universal account system for a loyalty system in which a central system
negotiates with loyalty award providers (e.g., VISA, MasterCard, Discover,
Delta Airlines, etc.) to determine a set of parameters, e.g., the number of
frequent flier miles (“FFM”) awarded per dollar spent on a transaction based
on the type of credit card used to pay for the transaction (id. at 18—19
(citing Iannacci, col. 53,11. 15—18; col. 65,11. 8—11)).
The Examiner finds that Iannacci discloses that separate negotiations
are conducted with each party, e.g., Delta Airlines, until a set of parameters
is agreed-on that includes the first set of parameters (e.g., awarding FFM)
and at least one parameter (e.g., the number of FFM per dollar) that applies
only to that party (id. at 19—20). And the Examiner concludes that it would
have been obvious to a person of ordinary skill in the art “for Dalai to
interleave the negotiations . . . [such that] the first entity negotiates with the
secondary entities using a basic set of parameters (award loyalty points), but
also including one or more specific parameters (e.g.[,] the exchange ratio for
FFM to dollar) for each particular secondary entity” because “[t]his would
allow Dalai to add additional entities to the loyalty program without having
to renegotiate the entire loyalty program parameters will [sic] all of the other
entities already part of the loyalty program” (id. at 20).
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The difficulty with the Examiner’s analysis is that the Examiner does
not adequately explain how, and we fail to see how, the cited portions of
Iannacci disclose or suggest that negotiations between the system and the
loyalty award providers occur in the specific manner that the Examiner
suggests. In this regard, we agree with Appellants that the only references to
“negotiation” in Iannacci are generalized statements regarding the
negotiation of benefits without any specificity as to how such negotiations
are conducted (Reply Br. 5—6).
In view of the foregoing, we do not sustain the Examiner’s rejection
of independent claims 8, 25, and 26 under 35 U.S.C. § 103(a). For the same
reasons, we also do not sustain the Examiner’s rejection of dependent
claims 9-13, 15, and 24. Cf. In reFritch, 972 F.2d 1260, 1266 (Fed. Cir.
1992) (“dependent claims are nonobvious if the independent claims from
which they depend are nonobvious”).
DECISION
The Examiner’s rejection of claims 8—13, 15, and 24—26 under
35 U.S.C. § 101 is affirmed.
The Examiner’s rejection of claims 8—13, 15, and 24—26 under
35 U.S.C. § 103(a) is reversed.
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
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