Ex Parte Herr

Patent Trial and Appeal Board

Aug 2, 2018

12157734 (P.T.A.B. Aug. 2, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/157,734 06/12/2008
123521 7590 08/06/2018
Wells Fargo Bank, N.A.
c/o Nelson Mullins Riley & Scarborough, LLP
One Wells Fargo Center
301 South College Street, 23rd Floor
Charlotte, NC 28202
FIRST NAMED INVENTOR
Michael D. Herr
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.
27491.036 8593
EXAMINER
TROTTER, SCOTTS
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
08/06/2018 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):
ip@nelsonmullins.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte MICHAEL D. HERR
Appeal2017-004445
Application 12/157,734 1
Technology Center 3600
Before HUNG H. BUI, DAVID J. CUTITT A II, and
PHILLIP A. BENNETT, Administrative Patent Judges.
CUTITTA, Administrative Patent Judge.
DECISION ON APPEAL
Appellant seeks our review under 35 U.S.C. § 134(a) of the
Examiner's final decision rejecting claims 1, 2, 4--7, 10-18 and 21-27, and
29, which are all the claims pending in the application. 2 We have
jurisdiction under 35 U.S.C. § 6(b ).
We AFFIRM.
1 Appellant identifies Wells Fargo Bank, N.A. as the real party in interest.
See Appeal Br. 1.
2 Claims 3, 8, 9, 19, 20, and 28 are canceled. See Appeal Br. 1.
Appeal2017-004445
Application 12/157,734
STATEMENT OF THE CASE
Invention
Appellant's invention relates to "adapting the spending limit of a
debit instrument, particularly a daily spending limit, after a determination
of transactional risk associated with [a] debit instrument transaction."
Spec. ,r 7. 3
Exemplary Claim
Claims 1, 7, 18, and 29 are independent. Claim 1 is exemplary and is
reproduced below with the limitation at issue italicized.
1. A networked computer system for adapting the
spending limit of a debit instrument, the system comprising:
a debit instrument with a daily spending limit,
a terminal for use by a debit instrument holder to conduct
a financial transaction with the debit instrument,
a payment network communicatively connected with the
terminal, and
an integrated payment engine communicatively
connected to the payment network, wherein the integrated
payment engine comprises criteria for determining transactional
risk associated with the financial transaction and for adapting
the daily spending limit of the debit instrument to allow an
increased daily spending limit for the debit instrument after the
determination of transactional risk.
Appeal Br. 6.
3 Throughout this Decision, we refer to (1) Appellant's Specification filed
June 12, 2008 ("Spec."), (2) the Final Rejection ("Final Act.") mailed April
27, 2017, (3) the Appeal Briefs ("Appeal Br.") filed February 26, 2016 and
July 6, 2016, (4) the Examiner's Answer ("Ans.") mailed November 17,
2016, and (5) the Reply Brief ("Reply Br.") filed January 17, 2017.
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Application 12/157,734
REFERENCES
The Examiner relies upon the following prior art in rejecting the
claims on appeal:
Gopinathan et al.
Koenigsman et al.
Dunn et al.
US 6,330,546 B 1
US 2006/0097036 Al
US 7,249,092 B2
REJECTIONS
Dec. 11, 2001
May 11, 2006
July 24, 2007
Claims 1, 2, 4--7, 10-18 and 21-294 stand rejected under 35 U.S.C.
§ 101 as being directed to non-statutory subject matter. Final Act. 2-3.
Claims 1, 2, 4--7, 10-18 and 21-29 stand rejected under 35 U.S.C.
§ 103 (a) as being unpatentable over the combination of Gopinathan,
Koenigsman, and Dunn. Final Act. 3-5.
Our review in this appeal is limited only to the above rejections and
the issues raised by Appellant. Arguments not made are waived. See MPEP
§ 1205.02 (9th ed., rev. 7; Oct. 2015); 37 C.F.R. §§ 4I.37(c)(l)(iv) and
4I.39(a)(l) (2015).
ANALYSIS
Rejection Under§ 101
Issue: Whether the Examiner properly rejects the claims under
35 U.S.C. § 101 as being directed to non-patentable subject matter.
Appellant argues the claims as a group. See Appeal Br. 4--6. We
select independent claim 1 as exemplary of Appellant's arguments for
4 Appellant indicates claim 28 has been canceled. See Appeal Br. 1.
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claims 2, 4--7, 10-18 and 21-27, and 29. See 37 C.F.R. § 4I.37(c)(l)(iv)
(2015).
The Examiner determines claim 1 is "directed to the abstract idea of a
debit instrument with a daily spending limit." Final Act. 2. The Examiner
also determines the claim does not include "additional claim element( s) ...
to transform the abstract idea into a patent eligible application of the abstract
idea such that the claim(s) amounts to significantly more than the abstract
idea itself." Final Act. 2-3.
Appellant presents several arguments against the§ 101 rejection. We
do not find Appellant's arguments persuasive. The Examiner has provided a
sufficient response to Appellant's arguments supported by a preponderance
of evidence. See Ans. 16-17. Thus, we adopt the Examiner's findings and
conclusions. See Final Act. 2-3; Ans. 16-17.
Section 101 provides that "[ w ]hoever 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." 35 U.S.C. § 101. The
provision, however, "contains an important implicit exception: Laws of
nature, natural phenomena, and abstract ideas are not patentable." Alice
Corp. Pty. Ltd. v. CLS Banklnt'l, 134 S. Ct. 2347, 2354 (2014) (quoting
Assoc. for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107,
2116 (2013) ). The "abstract ideas" category embodies the longstanding rule
that an idea, by itself, is not patentable. Alice, 134 S. Ct. at 2355 (quoting
Gottschalkv. Benson, 409 U.S. 63, 67 (1972)).
In Alice, the Supreme Court sets forth an analytical "framework for
distinguishing patents that claim laws of nature, natural phenomena, and
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abstract ideas from those that claim patent-eligible applications of those
concepts." 134 S. Ct. at 2355 (citing Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 132 S. Ct. 1289, 1296-97 (2012)). The first step in
the analysis is to "determine whether the claims at issue are directed to one
of those patent-ineligible concepts," such as an abstract idea. Alice, 134 S.
Ct. at 2355.
If the claims are directed to a patent-ineligible concept, the second
step in the analysis is to consider the elements of the claims "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." Id. (quoting Mayo, 132 S. Ct. at 1298, 1297). In other words,
the second step is to "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."' Alice, 134 S. Ct. at 2355 (brackets in original) (quoting
Mayo, 132 S. Ct. at 1294). The prohibition against patenting an abstract idea
"'cannot be circumvented by attempting to limit the use of the [ abstract idea]
to a particular technological environment' or adding 'insignificant
postsolution activity."' Bilski v. Kappas, 561 U.S. 593, 610-11 (2010)
(quoting Diamond v. Diehr, 450 U.S. 175, 191-92 (1981)).
Alice Step 1: Abstract Idea
Initially, we note independent claim 1 recites a "networked computer
system." See Appeal Br. 6. As such, claim 1 is directed to a statutory class
of invention within 35 U.S.C. § 101, namely a machine. Turning to the first
step of the Alice inquiry, we must determine whether claim 1, being directed
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to a statutory class of invention, nonetheless falls within a judicial exception.
We agree with the Examiner that claim 1 is "directed to the abstract idea of a
debit instrument with a daily spending limit." Final Act. 2. We further
determine claim 1 is directed to a fundamental economic activity and such
activities fit squarely within the realm of abstract ideas. Providing a debit
instrument with a spending limit, even if that limit may be adjusted daily
based on transaction risk, is a fundamental economic activity long prevalent
in our system of commerce, like the risk hedging in Bilski (see Bilski, 561
U.S. at 593), the intermediated settlement in Alice (see Alice, 134 S. Ct. at
2356-57), the verifying of credit card transactions in CyberSource (see
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1370 (Fed. Cir.
2011)), the collecting and analyzing of information to detect and notify of
misuses in FairWarning (see FairWarning IP, LLC v. Iatric Sys., Inc., 839
F.3d 1089, 1093-94 (Fed. Cir. 2016)), and the guaranteeing of transactions
in buySAFE (see buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1354 (Fed.
Cir. 2014)). Providing a debit instrument is also a building block of a
market economy. Thus, we agree with the Examiner that a debit instrument
with a daily spending limit, like the fundamental economic activities
identified supra, is an "abstract idea" beyond the realm of patent-eligible
subject matter under§ 101. See Alice, 134 S. Ct. at 2356.
Appellant, in tum, does not rebut the Examiner's determination that
claim 1 is directed to an abstract idea. See Appeal Br. 4---6. Appellant
instead argues "the Office Action fails to provide Applicant with a sufficient
claim construction or interpretation of the abstract idea so as to enable the
Applicant to effectively reply." Appeal Br. 4. Appellant further argues the
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"Examiner must make specific findings as to claim construction." Id.
(underlining and citation omitted).
Appellant's arguments are not persuasive. At the outset, we note
patent eligibility is a question of law that is reviewable de nova (see
Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012)). We are
not aware of, and Appellant cites no controlling authority that requires the
Office to provide factual evidence to support a finding that a claim is
directed to an abstract idea. 5 Instead, 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 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." 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 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 [t]he rejection is so
5 Berkheimer v. HP Inc., 881 F.3d 1360, 1366 (Fed. Cir. 2018) holds that
the question of whether certain claim limitations represent well-understood,
routine, conventional activity under Alice step 2 may raise a disputed factual
issue. That question, however, is not at issue in this case.
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uninformative that it prevents the applicant from recognizing and seeking to
counter the grounds for rejection.").
Appellant does not contend that the Examiner's rejection under§ 101
cannot be understood or that the Examiner's rejection, otherwise, fails to
satisfy the notice requirements of§ 132. Indeed, Appellant's understanding
of the rejection is clearly manifested by their response as set forth in the
briefs.
Furthermore, although the Examiner describes claim 1 at a different
level of abstraction than Appellant would like, this does not make the claim
any less abstract. Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240-41
(Fed. Cir. 2016) ("An abstract idea can generally be described at different
levels of abstraction."); see also Amdocs (Israel) Ltd. v. Openet Telecom,
Inc., 841 F.3d 1288 (Fed. Cir. 2016), cert. denied, 138 S. Ct. 469 (2017)
(there is no "single universal definition of 'abstract ideas."'). Rather, we
observe that a number of Federal Circuit cases have found claims that
simply manipulate data, like the claim at issue here, ineligible. See, e.g.,
Intellectual Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1327 (Fed.
Cir. 201 7) ("creating an index and using that index to search for and retrieve
data"); Elec. Power Grp. v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir.
2016) (collection, manipulation, and display of data); Intellectual Ventures I
LLC v. Capital One Bank (USA), 792 F.3d 1363, 1370 (Fed. Cir. 2015)
( customizing information and presenting it to users based on particular
characteristics); Content Extraction and Transmission LLC v. Wells Fargo
Bank, National Ass 'n, 776 F.3d 1343, 1347 (Fed. Cir. 2014) ("collecting
data, ... recognizing certain data within the collected data set, and ...
storing that recognized data in a memory."). Appellant's claim 1 "fit[s] into
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Application 12/157,734
the familiar class of claims that do not 'focus ... on [ ] an improvement in
computers as tools, but on certain independently abstract ideas that use
computers as tools"' (SAP Am., Inc. v. Investpic, LLC, 890 F.3d 1016, 1022
(Fed. Cir. 2018) (citing Elec. Power, 830 F.3d at 1354)).
We, thus, conclude that claim 1 focuses on an abstract idea-and
hence requires stage-two analysis under § 101.
Alice Step 2: Inventive Concept
Turning to the second step of the Alice inquiry, the Examiner
determines, and we agree, that the claimed networked computer system
does not amount to significantly more than the abstract idea itself because
"Appellant did not invent, modify, or improve the networked computer
system." Ans. 16. We further note that Appellant's Specification only
describes general purpose computing equipment for performing the
functions of the claimed invention. See Spec. ,r,r 24--27. For example, the
Specification defines "[ t ]he term 'payment network,' as ... any computer
system which facilitates an electronic payment" (Spec. ,r 26), the "term
'integrated payment engine,' as ... a computer engine" (Spec. ,r 27), and the
"term 'terminal, as ... an automated teller machine (ATM) terminal" (Spec.
,r 24). Thus, claim 1 requires no more than a generic computer equipment to
perform generic functions.
Appellant argues "the claimed invention improves the functioning and
efficiency of a computer payment network itself ... so as to eliminate
further processing and electronic storage of unapproved transactions in the
computer payment network" (Appeal Br. 6) and "the invention was an
improvement at the time of the invention in computer related technology
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because ... the integrated payment engine uses data tables for use in
determining the transactional risk associated with a given debit instrument"
(Reply Br. 3).
We disagree. Appellant's argument that "the integrated payment
engine uses data tables for use in determining the transactional risk" is
insufficient to demonstrate that the "claimed invention improves the
functioning and efficiency" of a computer related technology. Reply Br. 3;
Appeal Br. 6. To the contrary, the solution offered by Appellant's claim 1
is not rooted in any improvement in computer technology, as evidenced by
claim 1 's recitation of generic computing equipment for performing the
functions of the claimed invention. See Spec. ,r,r 24--27. Likewise,
Appellant's Specification identifies a problem "with historical practices" in
which "the customer's available balance ... is not considered in establishing
this daily [credit] limit." Spec. ,r 2. This results in "profitability [that] is not
maximized," higher risk to the card portfolio, and negative "customer
perception." Spec. ,r 5. Appellant's claimed invention seeks to solve the
identified problems by using "a daily spending limit, after a determination of
transactional risk associated with the debit instrument transaction." Spec.
These problems are business problems, not technical problems. Claim
1 recites a specific way and specific context for adjusting a spending limit of
a debit instrument -namely, by "adapting the daily spending limit of the
debit instrument to allow an increased daily spending limit for the debit
instrument after the determination of transactional risk." See claim 1, Spec.,
,r,r 3 7, 45, 49. While these functions to a certain extent limit the scope of the
abstract idea, the limitations are not sufficient to transform Appellant's
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otherwise patent-ineligible abstract idea into patent-eligible subject matter.
Fundamentally, the solution Appellant offers is "an entrepreneurial, rather
than a technological, one." DDR Holdings, LLC v. Hotels.com, L.P., 773
F.3d 1245, 1265 (Fed. Cir. 2014) (Mayer, J., dissenting).
Appellant further argues claim 1 is patentable because it is "narrowly
drawn to not preempt any and all generic enhancement of data in a similar
system." Reply Br. 3 (citing Amdocs 841 F.3d at 1288). We are
unpersuaded, however, because our reviewing court instructs that rather than
preemption, the Alice/Mayo two-step analysis is the test for whether claims
are statutory. "While preemption may signal patent ineligible subject
matter, the absence of complete preemption does not demonstrate patent
eligibility." Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1379 (Fed. Cir. 2015). "Where a patent's claims are deemed only to
disclose patent ineligible subject matter under the Mayo framework, as they
are in this case, preemption concerns are fully addressed and made moot."
Id.
Because Appellant's exemplary claim 1 is directed to a patent-
ineligible abstract concept and does not recite something "significantly
more" under the second prong of the Alice analysis, we sustain the
Examiner's rejection of this claim under 35 U.S.C. § 101 as being directed
to non-patentable subject matter in light of Alice and its progeny. The
rejection of claims 2, 4--7, 10-18 and 21-27, and 29, which are not argued
separately, is sustained for the same reasons. See Appeal Br. 4--6.
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Rejections Under§ 103(a)
Issue: Whether the Examiner errs in finding claim 1 is obvious over
the combination of Gopinathan, Koenigsman, and Dunn and whether the
combination teaches "a debit instrument with a daily spending limit," as
recited in claim 1.
Appellant argues the claims as a group. See Appeal Br. 6-7. We
select independent claim 1 as exemplary of Appellant's arguments for
claims 2, 4--7, 10-18 and 21-27, and 29. See 37 C.F.R. § 4I.37(c)(l)(iv)
(2015). The Examiner finds "Gopinathan teaches analyzing transaction risk
and approving transactions based on that analysis" and "Koenigsman teaches
that monitoring can be setup for accounts for events such as kinds of
transactions that cause the setting of new account limits and changes to a
credit line which changes an account's limit." Final Act. 4 (citing
Koenigsman ,r 14). The Examiner finds Dunn teaches the monitored
account may be monitored for "daily spending limits." Final Act. 4 ( citing
Dunn abstract, 7:22-52, 10:31-38).
Appellant acknowledges that Dunn teaches a daily spending limit, but
argues "Dunn teaches away from the present invention because Dunn
teaches that a daily spending limit is set by an account holder for a
subsidiary account before a transaction." Appeal Br. 6 (citing Dunn cols. 9,
10).
Appellant's argument that Dunn teaches away is unpersuasive because
Appellant does not proffer sufficient evidence or argument that Dunn
criticizes, discredits, or otherwise discourages the claimed solution. In re
Fulton, 391 F.3d 1195, 1201 (Fed. Cir. 2004). To the contrary, Appellant
acknowledges that Dunn teaches a daily spending limit and Appellant's
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argument that "a daily spending limit is set by an account holder" is
irrelevant to the Examiner's finding because the claim makes no reference to
the party that sets the daily spending limit. Appellant, therefore, does not
persuasively establish Dunn teaches away. Appeal Br. 6.
Appellant argues "[t]he combination of cited references does not teach
processing a transaction over its daily spending limit wherein a computer
engine overrides the authorization process and adapts the daily spending
limit to allow for an increased daily spending limit." Appeal Br. 6-7.
Such a conclusory statement, however, amounting to little more than a
paraphrasing of the claim language and a general denial, is unpersuasive to
rebut the prima facie case produced by the Examiner. Cf 37 C.F.R.
§ 4I.37(c)(l)(iv) (2007) ("A statement which merely points out what a claim
recites will not be considered an argument for separate patentability of the
claim."); see also In re Lovin, 652 F.3d 1349, 1357 (Fed. Cir. 2011) ("[W]e
hold that the Board reasonably interpreted Rule 41.3 7 to require more
substantive arguments in an appeal brief than a mere recitation of the claim
elements and a naked assertion that the corresponding elements were not
found in the prior art.").
Appellant argues "Dunn does not teach a daily spending limit being
'adapted'" and that "the Examiner is missing the point being made that the
daily spending limit being 'adapted' or 'adapting' a daily spending limit as
claimed in the present invention is not known." Appeal Br. 7.
We are unpersuaded because Appellent's argument is not responsive
to the Examiner's findings. The Examiner finds "Koenigsman teaches that
monitoring can be setup for accounts for events such as kinds of transactions
that cause the setting of new account limits and changes to a credit line
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which changes an account's limit, "i.e., adapting a spending limit. Final
Act. 4. The Examiner finds Dunn teaches "daily spending limits." Id.
Appellant's argument, therefore, attacks Dunn alone when the Examiner
relies on the combination of Koenigsman and Dunn to teach the limitation at
lSSUe.
Appellant further argues the combination of cited references is
improper because "there must be some teaching or suggestion to combine
the cited references apart from Appellant's own specification and that such
teaching or motivation is lacking" and "[ e ]ven if the references were to be
combined, the combination of references does not teach the claimed
invention without modification." Appeal Br. 7-8. We are unpersuaded
because this argument is supported only by attorney argument (In re
Pearson, 494 F.2d 1399, 1405 (CCPA 1974) ("Attorney's argument in a
brief cannot take the place of evidence.")).
For the reasons discussed, Appellant has not shown error in the
Examiner's factual findings or conclusion of obviousness. Accordingly, we
sustain the Examiner's 35 U.S.C. § 103(a) rejection of independent claim 1.
Independent claims 7, 18, and 29, and dependent claims 2, 4---6, 10-17 and
21-27 are not argued separately and so the rejections of these claims are
sustained for the same reasons given for independent claim 1. See Appeal
Br. 6-7.
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DECISION
We affirm the Examiner's rejection of claims 1, 2, 4--7, 10-18 and
21-27, and 29 under 35 U.S.C. § 101.
We affirm the Examiner's rejections of claims 1, 2, 4--7, 10-18 and
21-27, and 29 under 35 U.S.C. § 103(a).
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a) (1) (iv).
AFFIRMED
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