Ex Parte Hougland et al

Patent Trial and Appeal Board

Jan 18, 2018

12752985 (P.T.A.B. Jan. 18, 2018)

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.
12/752,985 04/01/2010 Damon Charles Hougland P2395.10111US03 3647
132897 7590 01/22/2018
Maschoff Brennan/ PayPal
1389 Center Drive, Ste 300
Park City, UT 84098
EXAMINER
ROBINSON, KITO R
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
01/22/2018 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):
docket @ mabr. com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte DAMON CHARLES HOUGLAND,
MUSAAB AL-TARAS, and JASON ALEXANDER KOROSEC
Appeal 2016-002632
Application 12/752,985
Technology Center 3600
Before ANTON W. FETTING, TARA L. HUTCHINGS, and
AMEE A. SHAH, Administrative Patent Judges.
FETTING, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE1
Damon Charles Hougland, Musaab Al-Taras, and Jason Alexander
Korosec (“Appellants”) seek review under 35 U.S.C. § 134 from a final
rejection of claims 1—12 and 14—21, the only claims pending in the
1 Our decision will make reference to the Appellants’ Appeal Brief (“App.
Br.,” filed August 14, 2015) and Reply Brief (“Reply Br.,” filed January 4,
2016), and the Examiner’s Answer (“Ans.,” mailed November 4, 2015), and
Final Action (“Final Act.,” mailed March 20, 2015).
Appeal 2016-002632
Application 12/752,985
application on appeal. We have jurisdiction over the appeal pursuant to
35 U.S.C. § 6(b).
We affirm.
The Appellants invented a framework for payment application
development. Spec., para. 2.
An understanding of the invention can be derived from a reading of
exemplary claim 1, which is reproduced below (bracketed matter and some
paragraphing added).
1. A method comprising:
[1] receiving a request at a payment facilitator,
the request indicating a split payment from a sender to a
plurality of receiving parties
by including a list of the receiving parties and an
indication of an amount to transfer from an account of
the sender to each of the receiving parties;
[2] processing the request at the payment facilitator,
the processing including generating a pay key used for
approval of the request;
[3] causing a client machine to be directed to an approval
interface associated with the payment facilitator
with the pay key as a parameter;
and
[4] in response to receiving the approval via the approval
interface,
causing, by one or more processors, the payment
facilitator to transfer a single payment
from the account of the sender directly to at least one
respective account of the receiving parties
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based on the request that is processed by the payment
facilitator,
a first portion of the single payment received at one of
the at least one respective account to be transferred to at
least one account of a secondary receiving party of the
receiving parties based solely on the details within the
request,
a second portion of the single payment to remain in the
one of the at least one respective account.
Claims 1—12 and 14—21 stand rejected under 35 U.S.C. § 101 as
directed to non-statutory subject matter.
ISSUES
The issues of eligible subject matter turn primarily on whether the
claims more than abstract conceptual advice on what a generic computer is
to be programmed to perform.
ANALYSIS
Method claim 1 recites receiving and processing a split payment
request, generating data called a pay key that is a parameter at an approval
interface, and sending data representing some payment to an account along
with instructions for some subsequent transfer outside the scope of the
claims. Thus, claim 1 receives and sends data representing payment requests
and payment transfers. None of the limitations recite implementation details
for any of these steps, but instead recite functional results to be achieved by
any and all possible means. Data reception, analysis and modification, and
transmission are all generic, conventional data processing operations to the
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point they are themselves concepts awaiting implementation details. The
sequence of data reception-analysis-transmission is equally generic and
conventional. The ordering of the steps is, therefore, ordinary and
conventional. The remaining claims merely describe parameters for the
transactions, information transferred, and conceptual programming
paradigms such as API’s, with no implementation details.
The Supreme Court
set forth a framework for distinguishing patents that claim laws
of nature, natural phenomena, and abstract ideas from those that
claim patent-eligible applications of those concepts. First, []
determine whether the claims at issue are directed to one of
those patent-ineligible concepts. ... If so, we then ask, “[w]hat
else is there in the claims before us?” ... To answer that
question, [] consider 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. . . . [The Court]
described step two of this analysis as a 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 Corp. Pty. Ltd. v. CLS Bank Inti, 134 S. Ct. 2347, 2355 (2014) (citing
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012)).
To perform this test, we must first determine whether the claims at
issue are directed to a patent-ineligible concept. The Examiner finds that the
claims are directed to receiving a payment request and splitting a payment
from a sender to a plurality of receiver parties. Final Act. 4.
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While the Court in Alice made a direct finding as to what the claims
were directed to, we find that this case’s claims themselves and the
Specification provide enough information to inform one as to what they are
directed to.
The preamble to claim 1 does not recite what the claim is directed to,
but the steps in claim 1 result in a split payment transaction. The
Specification at paragraph 2 describes the invention as being related to a
framework for payment application development. Thus, all this evidence
shows that claim 1 is directed to split financial payment processing, i.e.
financial transactions.
It follows from prior Supreme Court cases, and Bilski (Bilski v.
Kappos, 561 U.S. 593 (2010)) in particular, that the claims at issue here are
directed to an abstract idea. Like the risk hedging in Bilski, the concept of
financial transactions is a fundamental financial practice long prevalent in
our system of commerce. The use of financial transactions is also a building
block of all market economies. Thus, financial transactions, like hedging, is
an “abstract idea” beyond the scope of § 101. See Alice, 134 S. Ct. at 2356.
As in Alice, we need not labor to delimit the precise contours of the
“abstract ideas” category in this case. It is enough to recognize that there is
no meaningful distinction in the level of abstraction between the concept of
risk hedging in Bilski and the concept of financial transactions at issue here.
Both are squarely within the realm of “abstract ideas” as the Court has used
that term. See id. at 2357.
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Further, claims involving data collection, analysis, and display are
directed to an abstract idea. Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d
1350, 1353 (Fed. Cir. 2016) (holding that “collecting information, analyzing
it, and displaying certain results of the collection and analysis” are “a
familiar class of claims ‘directed to’ a patent-ineligible concept”); see also
In re TLI Comma’ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016);
Fair Warning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093—94 (Fed. Cir.
2016). Claim 1, unlike the claims found non-abstract in prior cases, uses
generic computer technology to perform data collection, analysis, screen
navigation, and transmission and does not recite an improvement to a
particular computer technology. See, e.g., McRO, Inc. v. Bandai Namco
Games Am. Inc., 837 F.3d 1299, 1314—15 (Fed. Cir. 2016) (finding claims
not abstract because they “focused on a specific asserted improvement in
computer animation”). As such, claim 1 is directed to the abstract idea of
receiving, analyzing, and transmitting data.
The remaining claims merely describe parameters for the transactions,
information transferred, and conceptual programming paradigms such as
API’s. We conclude that the claims at issue are directed to a patent-
ineligible concept.
The introduction of a computer into the claims does not alter the
analysis at Mayo step two.
[T]he mere recitation of a generic computer cannot transform a
patent-ineligible abstract idea into a patent-eligible invention.
Stating an abstract idea “while adding the words ‘apply it’” is
not enough for patent eligibility. Nor is limiting the use of an
abstract idea “‘to a particular technological environment.’”
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Stating an abstract idea while adding the words “apply it with a
computer” simply combines those two steps, with the same
deficient result. Thus, if a patent’s recitation of a computer
amounts to a mere instruction to “implement[t]” an abstract
idea “on ... a computer,” that addition cannot impart patent
eligibility. This conclusion accords with the pre-emption
concern that undergirds our § 101 jurisprudence. Given the
ubiquity of computers, wholly generic computer
implementation is not generally the sort of “additional
feature[e]” that provides any “practical assurance that the
process is more than a drafting effort designed to monopolize
the [abstract idea] itself.”
Alice, 134 S. Ct. at 2358 (citations omitted).
“[T]he relevant question is whether the claims here do more than
simply instruct the practitioner to implement the abstract idea ... on a
generic computer.” Id. at 2359. They do not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to receive, analyze, and transmit data and navigate screens for
such transactions amounts to electronic data query and retrieval—one of the
most basic functions of a computer. All of these computer functions are
well-understood, routine, conventional activities previously known to the
industry. In short, each step does no more than require a generic computer
to perform generic computer functions.
Considered as an ordered combination, the computer components of
Appellants’ method add nothing that is not already present when the steps
are considered separately. Viewed as a whole, Appellants’ method claims
simply recite the concept of financial transactions as performed by a generic
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computer. To be sure, the claims recite doing so by advising one to create a
token to use as an authorization key and process the steps for a split
transaction through an intermediary. But this is no more than abstract
conceptual advice on the securing of the transaction and the generic
computer processes necessary to process the transaction with such security,
and do not recite any particular implementation.
The method claims do not, for example, purport to improve the
functioning of the computer itself. Nor do they effect an improvement in
any other technology or technical field. Instead, the claims at issue amount
to nothing significantly more than an instruction to apply the abstract idea of
financial transactions, albeit with some security recommendations, using
some unspecified, generic computer. Under our precedents, that is not
enough to transform an abstract idea into a patent-eligible invention. See
Alice, 134 S. Ct. at 2360.
As to the structural claims, they
are no different from the method claims in substance. The
method claims recite the abstract idea implemented on a generic
computer; the system claims recite a handful of generic
computer components configured to implement the same idea.
This Court has long “wam[ed] . . . against” interpreting
§ 101 “in ways that make patent eligibility ‘depend simply on
the draftsman’s art.’”
Id.
We are not persuaded by Appellants’ argument that the Examiner has
not established a prima facie case that the claims are not directed to patent-
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eligible subject matter. App. Br. 9. The Examiner applied the Alice test,
which we have elucidated supra. Appellants contend that:
The Examiner has provided no evidence or even argument as to
why “splitting a payment from a sender to a plurality of
receiver parties,” especially in light of the use of a generated
pay key and causing a client machine to be directed to an
approval interface associated with the payment facilitator with
the pay key as a parameter, would be an abstract idea. In the
absence of any evidence, there remains only a simple
conclusory statement that the claims are directed to an abstract
idea.
App. Br. 9—10. The evidence that the claim is directed to a split financial
transaction is within the claims and Specification, as described supra. That
this is an abstraction is clear on its face, as the steps are abstract conceptual
advice as to the results a program is meant to perform, rather than any
particular implementation as to how to do so.
We are not persuaded by Appellants’ argument that the Examiner has
not provided reasoning (id. at 11—12) for similar reasons. The reasoning is
further articulated supra.
We are not persuaded by Appellants’ argument that the Examiner has
not provided substantial evidence (id. at 10-11) for similar reasons. The
intrinsic record provides substantial evidence.
We are not persuaded by Appellants’ argument that_if the Supreme
Court and Federal Circuit felt compelled to provide authoritative
documentation for their assertions, the Examiner is, likewise, compelled to
provide similar authoritative documentation. Id. at 13. The Supreme Court
demonstrated that financial transactions have a sufficiently long history to
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now be a set of fundamental concepts. Having done so, it is unnecessary to
repeat the evidence the Supreme Court referred to. Asa matter of law,
financial transactions as such are abstract conceptual ideas.
We are not persuaded by Appellants’ argument that the PTAB
requires “actual evidence” to support the conceptual nature of what a claim
is directed to. Id. at 13—14. As described above, the intrinsic record
provides substantial evidence. To the extent Appellants argue that some
further evidence is required, Appellants cite no precedential cases for this
proposition.
We are not persuaded by Appellants’ argument that the Examiner has
not established a prima facie case against the dependent claims. Id. at 15.
As we find supra, the dependent claims add nothing more than additional
abstract concepts.
We are not persuaded by Appellants’ argument that the claims at issue
are not directed to a fundamental practice long prevalent in our system of
commerce. Id. at 17—18. Financial payment transactions are at least as old
as banking, and so predate the Medicis. Split transactions are and have been
made as long as partnerships have been in existence.
We are not persuaded by Appellants’ argument that when viewed as a
whole, the claims at issue do not seek to tie up a judicial exception such that
others cannot practice it. All of the cases Appellants cite for this proposition
had claims that recited specific implementations. The instant claims seek to
cover any and all implementations.
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Appellants further argue that the asserted claims are akin to the claims
found patent-eligible in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d
1245 (Fed. Cir. 2014). In DDR Holdings, the Court evaluated the eligibility
of claims “address[ing] the problem of retaining website visitors that, if
adhering to the routine, conventional functioning of Internet hyperlink
protocol, would be instantly transported away from a host’s website after
‘clicking’ on an advertisement and activating a hyperlink.” DDR Holdings,
773 F.3d at 1257. There, the Court found that the claims were patent
eligible because they transformed the manner in which a hyperlink typically
functions to resolve a problem that had no “pre-Internet analog.” Id. at
1258. The Court cautioned, however, “that not all claims purporting to
address Internet-centric challenges are eligible for patent.” Id. For
example, in DDR Holdings the Court distinguished the patent-eligible
claims at issue from claims found patent-ineligible in Ultramercial. See id.
at 1258—59 (citing Ultramercial, Inc. v. Hulu. LLC, 772 F.3d 709, 715—16
(Fed. Cir. 2014)). As noted there, the Ultramercial claims were “directed to
a specific method of advertising and content distribution that was previously
unknown and never employed on the Internet before.” Id. at 1258 (quoting
Ultramercial, 772 F.3d at 715—16). Nevertheless, those claims were patent
ineligible because they “merely recite[d] the abstract idea of ‘offering
media content in exchange for viewing an advertisement, ’ along with
‘routine additional steps such as updating an activity log, requiring a
request from the consumer to view the ad, restrictions on public access, and
use of the Internet.’” Id.
Appellants’ asserted claims are analogous to claims found ineligible
in Ultramercial and distinct from claims found eligible in DDR Holdings.
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The ineligible claims in Ultramercial recited “providing [a] media product
for sale at an Internet website;” “restricting general public access to said
media product;” “receiving from the consumer a request to view [a] sponsor
message;” and “if the sponsor message is an interactive message, presenting
at least one query to the consumer and allowing said consumer access to
said media product after receiving a response to said at least one query.”
Ultramercial, 772 F.3d at 712. Similarly, Appellants’ asserted claims recite
receiving, analyzing, and transmitting data and navigating screens. This is
precisely the type of Internet activity found ineligible in Ultramercial.
We are not persuaded by Appellants’ argument that the Examiner
failed to indicate that the limitation directed to “causing a client machine to
be directed to an approval interface associated with the payment facilitator
with the pay key as a parameter” is “well-understood, routine, and
conventional.” App. Br. 22. This is simply the conventional placement of a
URL in an address field and a parameter in a parameter field, or as an
appendage to the URL. While other implementations are possible, as no
implementation is recited, it is sufficient to cite this notorious manner of
screen navigation.
We are not persuaded by Appellants’ argument that when considered
as an ordered combination, the elements of the claims at issue include
something more. Id. at 24—25. The arguments here are entirely conclusory
or repetitive of the prior arguments.
We are not persuaded by Appellants’ argument that, like the claims in
DDR Holdings, the claims at issue are rooted in computer technology in
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order to overcome a problem specifically arising in a particular computer
realm. Id. at 25—26. We addressed the comparison to DDR Holdings, supra.
We are not persuaded by Appellants’ argument that the claims are not
rejected over art. App. Br. 27. Although novelty is a factor to be considered
when determining “whether the claims contain an ‘inventive concept’ to
‘transform’ the claimed abstract idea into patent-eligible subject matter”
(Ultramercial, 772 F.3d at 715), a finding of novelty or nonobviousness
does not necessarily lead to the conclusion that subject matter is patentable
eligible. “Groundbreaking, innovative, or even brilliant discovery does not
by itself satisfy the § 101 inquiry.” Ass ’n for Molecular Pathology v.
Myriad Genetics, Inc., 133 S. Ct. 2107, 2117 (2013). Here, the Appellants
have not shown novel features that transform the abstract idea into patent-
eligible subject matter.
CONCLUSIONS OF LAW
The rejection of claims 1—12 and 14—21 under 35 U.S.C. § 101 as
directed to non—statutory subject matter is proper.
DECISION
The rejection of claims 1—12 and 14—21 is affirmed.
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No time period for taking any subsequent action in connection with this
appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(l)(iv) (2011).
AFFIRMED
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