Ex Parte HU et al

Patent Trial and Appeal Board

Jul 28, 2017

13963284 (P.T.A.B. Jul. 28, 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.
13/963,284 08/09/2013 Po HU 37537.0022U1- 1817
126944 7590
MasterCard
c/o Ballard Spahr LLP
999 Peachtree Street, Suite 1000
Atlanta, GA 30309
EXAMINER
CHEIN, ALLEN C
ART UNIT PAPER NUMBER
3627
NOTIFICATION DATE DELIVERY MODE
08/01/2017 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):
uspatentmail@ballardspahr.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PO HU, JEAN-PIERRE GERARD, and
TONG ZHANG
Appeal 2016-006470
Application 13/963,284
Technology Center 3600
Before ST. JOHN COURTENAY III, LINZY T. McCARTNEY, and
JOHN D. HAMANN, Administrative Patent Judges.
McCARTNEY, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from a rejection of claims
1—5, 7—12, 14—19, and 21. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
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STATEMENT OF THE CASE
The present patent application concerns “enabling] transaction level
modeling of payment card purchases.” Specification 11, filed August 9,
2013 (“Spec.”). Claim 1 illustrates the claimed subject matter:
1. A payment network method comprising:
receiving transaction data regarding a financial
transaction, the transaction data including a transaction attribute;
generating, via a processor, a customer level target
specific variable layer from the transaction data and feedback
from a model of cardholder behavior;
modeling, via the processor, cardholder behavior with the
customer level target specific variable layer to update the model
of cardholder behavior;
saving the model of cardholder behavior to a non-
transitory computer-readable storage medium.
Appeal Brief 25, filed November 16, 2015 (“Br.”).
REJECTIONS1
Claims 1—5, 7—12, 14—19, and 21 stand rejected under 35U.S.C. § 101
as directed to nonstatutory subject matter. Final Office Action 4—5, mailed
April 16, 2015 (“Final Act.”).
Claims 1—5, 7—12, 14—19, and 21 stand rejected under 35 U.S.C. § 103
as obvious over various combinations of Lo Faro et al. (US 2010/0301114
Al; Dec. 2, 2010), Madill Jr. et al. (US 2005/0097051 Al; May 5, 2005), Hu
(US 2007/0094061 Al; April 26, 2007), and the “Admitted Prior Art.” Final
Act. 4, 6—9.
1 The Examiner has withdrawn the rejection of claims 1—5, 7—12, 14—19, and
21 under 35 U.S.C. § 112. Answer 6, mailed April 13, 2016.
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ANALYSIS
Section 101 Rejection
With respect to the § 101 rejection, Appellants do not present separate
arguments for claims 1—5, 7—12, 14—19, and 21. See Br. 5—19. We select
claim 1 as representative of these claims and decide the appeal as to this
rejection based on claim 1. See 37 C.F.R. § 41.37(c)(l)(iv) (“When multiple
claims subject to the same ground of rejection are argued as a group . . ., the
Board may select a single claim from the group . . . and may decide the
appeal as to the ground of rejection with respect to the group ... on the basis
of the selected claim alone.”).
Appellants contend the Examiner’s § 101 rejection lacks adequate
supporting reasoning and evidence. See Br. 6—8, 12, 13—14. Appellants also
argue the Examiner oversimplified the claims and in doing so ignored
certain claim limitations. See Br. 8—10. According to Appellants, the claims
at issue are distinguishable from claims courts have found directed to
abstract ideas and there is no evidence the disputed claims define a long­
standing, fundamental economic practice. See Br. 12—13. Even if the claims
were directed to an abstract idea, Appellants contend the claims would still
be directed to patent-eligible subject matter because the claims are
inextricably tied to computer technology, require a special purpose
computer, and provide technological improvements. Br. 14—19.
We disagree. Section 101 of the Patent Act provides that “[wjhoever
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 Supreme Court has explained that this
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provision is subject to an implicit exception: “[l]aws of nature, natural
phenomena, and abstract ideas are not patentable.” Alice Corp. Pty. v. CLS
Banklnt’l, 134 S. Ct. 2347, 2354 (2014). The Court has set forth a two-part
inquiry to determine whether this exception applies. First, we must
determine if the claim at issue is directed to one of those patent-ineligible
concepts. Alice, 134 S. Ct. at 2355. Second, if the claim is directed to one
of those patent-ineligible concepts, we must search the claims for an
“inventive concept,” that is, “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
(quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct.
1289, 1294 (2012)).
We first consider whether the Examiner correctly concluded claim 1 is
directed to an abstract idea. The Examiner concluded claim 1 is “an idea of
itself,” namely “comparing new and stored information, data recognition and
storage.” Ans. 4. See also Advisory Action 1, mailed July 24, 2015
(“Advisory Act.”) (explaining that “[o]n their face, the claims ... are
‘directed to’ modeling customer or cardholder behavior based on transaction
data, which is [a] disembodied concept and abstract idea in [and] of itself’).2
The Examiner also concluded claim 1 is “a fundamental economic practice”
because “modeling customer behavior is ... a basic foundational practice,
like risk management or intermediated settlement.” Ans. 4. Finally, the
Examiner concluded the claimed process of updating and storing a customer
behavior model “could be achieved via a manual process.” Ans. 4.
2 The Advisory Action lacks page numbers. We treat the Advisory Action
as it were numbered beginning with the “Continuation Sheet.”
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To determine whether claim 1 is directed to an abstract idea, we
consider claim 1 “in [its] entirety to ascertain whether [its] 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 also Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016)
(“[W]e have described the first-stage inquiry as looking at the ‘focus’ of the
claims, their “‘character as a whole.”’). Courts “have found it sufficient to
compare [the] claim[] at issue to those claims already found to be directed to
an abstract idea in previous cases.” Enfish, LLC v. Microsoft Corp., 822
F.3d 1327, 1334 (Fed. Cir. 2016). See Br. 11 (acknowledging that drawing
“analogies to decided cases is a good way to determine whether the claims”
are directed to an abstract idea).
Claim 1 recites “[a] payment network method” in which (1) an
unspecified entity “receive[s] transaction data”; (2) a “processor” generates a
“customer level target specific variable layer” from the received data and
feedback from a cardholder behavior model and updates the model using the
variable layer; and (3) another unspecified entity saves the model to a “non-
transitory computer-readable storage medium.” Br. 25. That is, the claimed
method collects data, uses the collected data and additional information to
update a model, and then saves the updated model. The Federal Circuit has
concluded that similar claims are directed to “an idea of itself.” See, e.g.,
Elec. Power Grp., 830 F.3d at 1353—54 (concluding claims reciting
collecting information, analyzing it, and displaying certain results were
directed to an abstract idea); Content Extraction & Transmission LLC v.
Wells Fargo Bank, Nat. Assn, 776 F.3d 1343, 1347 (Fed. Cir. 2014)
(concluding claims reciting receiving output, recognizing certain data within
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a set, and storing the recognized data were directed to an abstract idea);
Clarilogic, Inc. v. FormFree Holdings Corp., No. 2016-1781, 2017 WL
992528, at *2 (Fed. Cir. Mar. 15, 2017) (concluding claims reciting
“receiving a request, electronically collecting financial data, transforming
the data into a desired format, validating the data by ‘applying an algorithm
engine, ’ analyzing certain exceptions, and generating a report” were directed
to an abstract idea).
Moreover, claim 1 recites a fundamental economic concept that can
be performed mentally. As found by the Examiner, the recited method can
be performed by “a personal shopper . . . [who] detects trends in the
customer’s buying by remembering past purchases and patterns as a mental
process.” Br. 4. There can be no serious dispute that this personal shopping
process was well known before Appellants’ invention. We see no
meaningful difference between this economic practice and other economic
practices courts have found directed to abstract ideas. See, e.g., Alice Corp.
Pty. v. CLSBankInt’l, 134 S. Ct. at 2355—57 (concluding claims describing
intermediate settlement were directed to an abstract idea); Bilski v. Kappos,
561 U.S. 593, 610-12 (2010) (concluding claims describing risk hedging
were directed to an abstract idea). And courts have concluded that claimed
methods are directed to an abstract idea where, as here, a person can perform
the claimed methods mentally or using pen and paper. See, e.g.,
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1370—72 (Fed.
Cir. 2011) (concluding a claim whose “steps can be performed in the human
mind, or by a human using a pen and paper” was directed to an abstract
idea).
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Appellants contend numerous cases, the Patent Office’s guidance on
subject matter eligibility, and the Manual of Patent Examining Procedure
make clear that the record must include evidence to support the Examiner’s
findings. See, e.g., Br. 7—8, 12. Appellants argue the necessary evidence is
lacking here. See, e.g., Br. 7—8, 12. Appellants also assert the “Examiner-
chosen phrase[s]” concerning whether claim 1 is abstract ignores or
mischaracterizes the “feedback” and “updating” aspects of the claim. Br. 9.
And in Appellants’ view, claim 1 does not concern “a fundamental
economic practice like risk management or intermediate settlement.” Br. 12.
We find these arguments unpersuasive. As the Patent and Trademark
Office’s subject matter eligibility guidance notes, “courts do not rely on
evidence that a claimed concept is a judicial exception, and in most cases
resolve the ultimate legal conclusion on eligibility without making any
factual findings.” United States Patent & Trademark Office, July 2015
Update: Subject Matter Eligibility 6 (2015); see also id. (collecting Supreme
Court cases that “relied solely on comparisons to concepts found to be
exception in past decisions when identifying judicial exceptions”). The
guidance explains that an Examiner’s abstract idea analysis may also “rely,
where appropriate, on the knowledge generally available to those in the art,
one the caw law precedent, on applicant’s own disclosure, or on evidence.”
July 2015 Update 6 (emphasis added). Similarly, although the Manual of
Patent Examining Procedure explains that courts apply a “substantial
evidence” standard of review to an examiner’s findings of fact, the Manual
explicitly states that taking official notice is permissible. See Manual of
Patent Examining Procedure § 2144.03.
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Moreover, we disagree that the Examiner ignored or mischaracterized
certain limitations recited in claim 1. In the Answer, the Examiner
acknowledged each limitation recited in claim 1 and explained that the
claimed invention “appears to receive transaction data, process that data in
conjunction with feedback from a cardholder model and update and save the
model.” See Ans. 3^4. We see nothing in the Examiner’s analysis that
indicates the Examiner ignored or mischaracterized any of claim 1 ’s
limitations. As for Appellants’ assertion that claim 1 does not concern a
fundamental economic practice, as noted above, the Supreme Court has
found analogous claims directed to a fundamental economic practice. See,
e.g., Alice, 134 S. Ct. at 2355-57; Bilski, 561 U.S. 593 at 610-12 (2010).
Appellants have not persuasively distinguished these decisions.
Because we agree with the Examiner that claim 1 recites an abstract
idea, we next consider whether the Examiner correctly concluded that claim
1 does not recite an “inventive concept.” See Alice, 134 S. Ct. at 2355. The
Examiner concluded claim 1 does not recite an inventive concept because
Appellants] [have] not claimed a specifically configured
computer. [Appellants’] claimed computer is not different than
any generic computer .... [Appellants’] claims are written at a
high level of generality. [Appellants’] problem is not
technological .... [Appellants’] claimed features are
conventional and do not offer [anything] more in
combination. . . . [Appellants’] claimed invention does not
fundamentally improve the functioning of the computer ....
Allowing [Appellants’] claim would prevent others from
modeling cardholder behavior as claimed.
Ans. 5—6. The Examiner also explained the claimed functions “are routine
data gathering/handling functions and/or extra-solution activity” and the
recited hardware is “conventional^” and “do[es] not purport to offer
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improvements to the functioning of the hardware itself, or an improvement
to another technology or technological field.” Advisory Act. 1.
When determining whether a claim recites an “inventive concept,”
“we consider the elements of [the] 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.” Alice,
134 S. Ct. 2355 (quoting Mayo, 132 S. Ct. at 1297, 1298). We agree with
the Examiner that claim 1 ’s elements, considered separately or together, do
not amount to an inventive concept.
As noted above, claim 1 recites than an unspecified entity “receive[s]
transaction data”; a “processor” generates a “customer level target specific
variable layer” from the received data and feedback from a cardholder
behavior model and updates the model using the variable layer; and another
unspecified entity saves the model to a “non-transitory computer-readable
storage medium.” Br. 25. Appellants’ written description teaches that the
recited “processor” and “non-transitory computer-readable storage medium”
are generic computer components. See, e.g., Spec. 115 (explaining that an
exemplary processor “may be any central processing unit, microprocessor,
micro-controller, computational device, or circuit known in the arC
(emphasis added)), 126 (disclosing that computer-readable storage media
“may be conventional read/write memory” or “other computer-readable
memory device[s] as [are] known in the arC (emphases added)). The
claimed method simply uses these generic components, along with
unspecified other elements, to perform an abstract idea. This is not enough
to transform an abstract idea into patent-eligible subject matter. See, e.g.,
Alice, 134 S. Ct. at 2360 (explaining that claims that “amount to ‘nothing
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significantly more’ than an instruction to apply the abstract idea . . . using
some unspecified, generic computer .... is not ‘enough ’ to transform an
abstract idea into a patent-eligible invention” (quoting Mayo, 132 S. Ct. at
1297, 1298)). Moreover, claim 1 recites each step at a high level of
generality, focusing on the results of each step and providing almost no
detail about how each step is performed. Such claims lack an inventive
concept. See, .e.g.^ Intellectual Ventures ILLC v. Capital One Fin. Corp.,
850 F.3d 1332, 1342 (Fed. Cir. 2017) (“[T]he claim language here provides
only a result-oriented solution, with insufficient detail for how a computer
accomplishes it. Our law demands more.”)
Appellants contend claim 1 recites an inventive concept because the
claim is “inextricably tied to computer technology.” Br. 14—19. Appellants
argue claim 1 recites a specifically tailored data structure (namely,
“transaction data including a transaction attribute”) and “specifies how the
processor acts in a very specific manner, communicate/receive specific
information, store specific information, and update[] a computerized^
model.” Br. 15. In Appellants’ view, claim 1 is akin to the claims the
Federal Circuit concluded were patent eligible in DDR Holdings, LLC v.
Hotels.com L.P., 773 F.3d 1245 (Fed. Cir. 2014).
We find Appellants’ arguments unpersuasive. We see nothing in the
claims or Appellants’ written description that indicates the recited
“transaction data” involves anything other than a generic data structure.
Claim 1 simply recites “receiving transaction data regarding a financial
transaction, the transaction data including a transaction attribute.” This
limitation makes clear what the recited “transaction data” concerns and
includes but does not specify the manner in which the claimed invention
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stores the data. Appellants’ written description indicates that “transaction
data” was well known to those of ordinary skill in the art, but like the claims,
does not suggest this data requires “a specifically tailored data structure.”
See, e.g., Spec. 13 (explaining how prior art systems used “transaction level
data”), 127 (noting generally that a “[transaction database 1220 is
configured to store record of payment card transactions” and a “cardholder
database 1230 is configured to store . . . transactions information”).
As for Appellants’ contention that the claims “specif[y] how the
processor acts in a very specific manner,” the functions identified by
Appellants in support of this argument are either not performed by the
claimed processor or are generic computer functions. Appellants assert the
claims recite that the processor “communicate[s]/receive[s] specific
information” and “store[s] specific information.” Br. 15. But claim 1 does
not recite that the processor performs these functions. Claim 1 simply
recites “receiving transaction data regarding a financial transaction, the
transaction data including a transaction attribute” and “saving the model of
cardholder behavior to a non-transitory computer-readable storage medium.”
Br. 25. This is in stark contrast to other recited limitations that specifically
require performing the function at issue “via the processor.” See, e.g., Br. 25
(claim 1 reciting steps including “generating, via a processor’’ and
“modeling, via the processor” (emphases added)).
Even if claim 1 did recite that the “processor” performed these
functions, that would not be enough to transform the claimed abstract idea
into patent-eligible subject matter. See Smartflash LLC v. Apple Inc., No.
2016-1059, 2017 WL 786431, at *5 (Fed. Cir. Mar. 1, 2017) (explaining that
“merely storing, transmitting, retrieving, and writing data to implement an
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abstract idea on a computer does not ‘“transform the nature of the claim”’
into a patent-eligible application” (quoting Alice, 134 S. Ct. at 2355)). And
although claim 1 makes clear that “updating] the model of cardholder
behavior” and “generating ... a customer level target specific variable”
steps are performed by the processor, neither the claims nor the written
description indicates the claimed steps involve anything other than generic
computer functions.
With respect to DDR Holdings, we disagree with Appellants that the
claims before us are similar to the claim at issue in that case. There, the
disputed claims solved an Internet-specific problem with an Internet-based
solution that was “necessarily rooted in computer technology” and
“overr[ode] the routine and conventional sequence of events.” DDR
Holdings, 773 F.3d at 1255—59. Here, claim 1 is not “necessarily rooted in
computer technology,” because as explained above, a person can perform
the claimed method mentally or using pen paper. Moreover, despite
Appellants’ assertions to the contrary, the claim merely recites performing a
series of generic computer functions specified at a high level of generality
(“receiving” and “generating” data, “updating]” and “saving” models)
using generic computer components (“a processor” and “a non-transitory
computer readable storage medium”). As the DDR Holdings court
explained, “after Alice, there can remain no doubt: recitation of generic
computer limitations does not make an otherwise ineligible claim patent-
eligible.” DDR Holdings, 773 F.3d at 1256.
Finally, Appellants argue claim 1 requires a special purpose computer
because the claim requires “implementation via specifically configured
computer components” and “improves upon existing technologies.” Br. 17.
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Appellants contend a generic computer cannot perform these functions. Br.
17. Appellants assert claiml provides “technological improvements”
because the claims “solve a technological problem” and improve upon
existing technology by “storing], receiving], modeling] and . . .
generating] very specific and sensitive information in a very specific
manner in a hardware-based system that has not been done before in the
industry.” Br. 19.
We find Appellants’ arguments unpersuasive. As an initial matter,
Appellants have provided no persuasive evidence or arguments to support
these conclusory assertions. See Br. 17—19. Moreover, for the reasons
discussed above, we agree with the Examiner that the claimed functions “are
routine data gathering/handling functions and/or extra-solution activity” and
the recited hardware is “conventional[]” and “do[es] not purport to offer
improvements to the functioning of the hardware itself, or an improvement
to another technology or technological field.” Advisory Act. 1.
Accordingly, claim 1 does not recite “inventive concept,” that is, “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 (quoting Mayo, 132 S.
Ct. at 1294).
Section 103 Rejection
Appellants contend the Examiner has not established Lo Faro teaches
or suggests claims l’s “generating” and “modeling” steps. See Br. 21—22.
Appellants assert the Examiner mapped the recited “model of cardholder
behavior” to Lo Faro’s merged profile and transaction information. Br. 21.
Appellants contend this information relates to a “SKU profile DW” that Lo
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Faro explicitly states “is a model of Shop-Keeping Unit-level retail activity.”
Br. 21 (emphasis added). Appellants argue Shop Keeping Unit-level retail
activity is a model of retail activity, not cardholder behavior as recited in
claim 1. Br. 21.
We disagree. The Examiner found Lo Faro discloses the recited
“model of cardholder behavior” because Lo Faro teaches “applying the
active model package to the merged data to update the profiles.” Final Act.
7 (citing Lo Faro 62, 105); Ans. 6 (citing Lo Faro Tflf 120-24). Lo Faro
discloses a “Profile Event Loop 414 provides logic for merging profile
information from SKU Profile DW 460 with transaction data and applies the
active model packages (from Model Package DW 410) to update and the
score the profiles before return them to SKU Profile DW 460.” Lo Faro
1105 (emphases omitted). Lo Faro discloses that the SKU Profile DW 460
includes cardholder information. See Lo Faro 1 62 (“A plurality of
cardholder’s information is collected in Transaction Batch 412 and the
information is stored in SKU DW 408. SKU DW 408 includes two sets of
profiles, one for accounts and one for customers.” (emphases omitted)).
Because Lo Faro teaches applying “active model packages” to SKU Profiles
DW that include cardholder information, we agree with the Examiner that
Lo Faro teaches or suggests “a model of cardholder behavior.”
Appellants have not identified any other alleged errors in the
Examiner’s rejection; therefore, we sustain the Examiner’s obviousness
rejection of claim 1. We also sustain the Examiner’s obviousness rejection
of claims 2—4, 7—11, 14—18, and 21, as Appellants’ rely on similar
arguments for these claims. See Br. 22—32.
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DECISION
We affirm the Examiner’s rejections of claims 1—5, 7—12, 14—19, and
21 under § 101 and § 103.
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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