Ex Parte Keller et alDownload PDFPatent Trial and Appeal BoardMay 5, 201713866844 (P.T.A.B. May. 5, 2017) Copy Citation 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. 013647.00041 1069 EXAMINER KAZIMI, HANI M ART UNIT PAPER NUMBER 3691 MAIL DATE DELIVERY MODE 13/866,844 04/19/2013 33649 7590 Mr. Christopher John Rourk Jackson Walker LLP 2323 ROSS AVENUE SUITE 600 DALLAS, TX 75201 05/08/2017 Kathleen M. Keller 05/08/2017 PAPER 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. PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte KATHLEEN M. KELLER and SHERYL M. YORK Appeal 2016-002035 Application 13/866,8441 Technology Center 3600 Before HUBERT C. LORIN, BIBHU R. MOHANTY, and BRUCE T. WIEDER, Administrative Patent Judges. WIEDER, Administrative Patent Judge. DECISION ON APPEAL This is a decision on appeal under 35 U.S.C. § 134 from the Examiner’s rejection of claims 24-43. We have jurisdiction under 35 U.S.C. § 6(b). Oral arguments were presented on May 1, 2017. We AFFIRM. CLAIMED SUBJECT MATTER Appellants’ claimed invention relates “to the field of payment data processing.” (Spec. 11.) More particularly, it relates to a system “for 1 According to Appellants, the real party in interest is PAYMENTECH, LLC. (Appeal Br. 4.) Appeal 2016-002035 Application 13/866,844 determining changes in business stability that allows businesses that are undergoing operational problems to be detected from transaction data.” (Id.) Claims 24, 32, and 43 are the independent claims on appeal. Claim 24 is representative. It is reproduced below: 24. A system for managing merchant accounts comprising: a merchant system interface operating on a processor and configured to receive a series of payment data records from a plurality of merchants, wherein each of the plurality of merchants has an associated merchant class; a credit processor coupled to the merchant system interface, the credit processor system configured to receive the series of payment data records from the merchant system interface and to store the series of payment data records by applying one or more electronic data processing rules; a merchant credit/risk system coupled to the credit processor, the merchant credit/risk system configured to generate business stability data from the series of payment data records for one of the plurality of merchants as a function of the series of payment data records for other merchants within the associated merchant class by applying one or more electronic data processing rules; and an underwriting system coupled to the merchant credit/risk system, the underwriting system configured to receive escrow data for each of the plurality of merchants and business stability data for each of the plurality of merchants and to generate an indication to increase an escrow amount for one or more of the plurality of merchants for an escrow account held by a merchant processor in response to the business stability data for the one or more of the plurality of merchants and as a function of the series of payment data records for other merchants within the associated merchant class by applying one or more electronic data processing rules. 2 Appeal 2016-002035 Application 13/866,844 REJECTION Claims 24^43 are rejected under 35 U.S.C. § 101 as directed to non- statutory subject matter. ANALYSIS In 2014, the Supreme Court decided Alice Corp. Pty Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). Alice applies a two-part framework, earlier set out in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012), “for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Alice, 134 S. Ct. at 2355. Under the two-part framework, it must first be determined if “the claims at issue are directed to a patent-ineligible concept.” Id. If the claims are determined to be directed to a patent-ineligible concept, then the second part of the framework is applied to determine if “the elements of the claim . . . contain[] an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application.” Id. at 2357 (citing Mayo, 132 S. Ct. at 1294, 1298). With regard to step one in the Alice framework, the Examiner determines that the claims on appeal are directed to the “abstract idea of managing merchant accounts.” (Answer 7, 8.) In particular, the Examiner finds that the concept of managing merchants [sic] accounts data as recited in the claim can be performed mentally or by using a “processor” and is similar to the kind of “organizing human activity” at issue in Alice Corp. Although the claims are not drawn to the same subject matter, the abstract idea of managing merchant accounts is similar to the abstract idea of managing risk (hedging) during 3 Appeal 2016-002035 Application 13/866,844 consumer transactions (Bilski) and mitigating settlement risk in financial transactions (Alice Corps, [sic]) Claims are therefore directed to an abstract idea. (Answer 7.) Appellants disagree and argue, in part, that rather than being directed to an abstract idea, “the claims are directed to generating business stability data from a series of payment data records, not to managing merchant accounts.” (Appeal Br. 10.) The system of representative claim 24 includes the steps of “receiving] a series of payment data records,” “storing] the series of payment data records,” “generating] business stability data from the series of payment data records,” and “generating] an indication to increase an escrow amount.” (See claim 24.) The Specification discloses that business stability data may be generated “by determining when changes in the periodic payment data exceed allowable variations for such changes.” (Spec. 1 8.) In short, an algorithm is applied to data collected regarding merchant accounts, and the algorithm generates new data, i.e., business stability data and an indication to increase the escrow amount. Thus, claim 24 is directed to a system to receive and store data, and to apply an algorithm to the data to generate new data. This is in accord with the disclosure in the Specification that evidences that the invention is directed to using generic computer hardware to monitor merchant accounts and “detect[] changes in business stability.” (See, e.g., Spec. ^fl[ 19-20.) Analogizing to earlier cases, we note that courts have found claims directed to receiving information about credit card transactions, analyzing that information, and applying an algorithm to determine validity of the 4 Appeal 2016-002035 Application 13/866,844 transaction to be directed to an abstract idea, even though a computer and the Internet were included in the claims. CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011). Courts have found claims directed to collecting, recognizing, and storing data in a computer memory to be directed to an abstract idea. Content Extraction and Transmission LLC v. Wells Fargo Bank, National Association, 776 F.3d 1343 (Fed. Cir. 2014); see also Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016). And courts have found that claims directed to “a process that employs mathematical algorithms to manipulate existing information to generate additional information [are] not patent eligible.” Digitech Image Techs., LLCv. Electronics for Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014). Moreover, to the extent the claims are more particularly directed to mitigating business risk by applying an algorithm to the collected data to determine, e.g., business stability, courts have found claims directed to managing risk, i.e., hedging (Bilski v. Kappos, 130 S. Ct. 3218 (2010)) and mitigating settlement risk (Alice), to be directed to abstract ideas. Courts have also found claims directed to managing a stable value life insurance policy to be directed to an abstract idea. Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Canada, 687 F.3d 1266 (Fed. Cir. 2012). “Here, the claims are focused on the combination of those abstract- idea processes.” Electric Power Group v. Alstom S.A., 830 F3d at 1354. “[T]he focus of the claims is not on ... an improvement in computers as tools, but on certain independently abstract ideas that use computers as tools.” Id. In view of the above and the focus of the claims on receiving payment data, storing the data, and analyzing the data to manage merchant 5 Appeal 2016-002035 Application 13/866,844 accounts, we are not persuaded that the Examiner erred in determining that the claims are directed to an abstract idea. With regard to step 2 in the Alice framework, Appellants argue that “because the claims have been allowed over the cited art, that fact is prima facie evidence that the claims do in fact add limitations other than what is well-understood, routine and conventional in the field.” (Appeal Br. 12.) We disagree. Step 2 of the Alice framework is not an evaluation of novelty or nonobviousness. Step 2 of the framework has been described “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, 134 S. Ct. at 2355, citing Mayo, 132 S. Ct. at 1294. Courts have “long held that [§ 101] contains an important implicit exception. ‘[L]aws of nature, natural phenomena, and abstract ideas’ are not patentable.” Mayo, 132 S. Ct. at 1293. In other words, even though “the § 101 patent-eligibility inquiry and, say, the § 102 novelty inquiry might sometimes overlap,” a novel and nonobvious claim directed to a purely abstract idea is, nonetheless, patent-ineligible. See id. at 1304. Appellants also argue that each claim includes an inventive concept. (Appeal Br. 14—19.) By way of example, Appellants argue that independent claim 24 includes the inventive concepts of receiving a series of payment data records from a plurality of merchants, wherein each of the plurality of merchants has an associated merchant class, generating business stability data from the series of payment data records for one of the plurality of merchants as a function of the series of payment data records for other merchants within the associated merchant class, and generating an indication to 6 Appeal 2016-002035 Application 13/866,844 increase an escrow amount for one or more of the plurality of merchants for an escrow account held by a merchant processor in response to the business stability data for the one or more of the plurality of merchants and as a function of the series of payment data records for other merchants within the associated merchant class by applying one or more electronic data processing rules. (Id. at 14.) But Appellants do not persuasively argue why this adds any meaningful limitations to the abstract idea. See Alice, 134 S. Ct. at 2357; see also Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014). Appellants further argue with regard to claim 24 that “[a] merchant account that does not include an escrow amount could be managed without using the claimed inventions.” (Appeal Br. 14.) To the extent this further argument is directed to the preemption concern associated with § 101 jurisprudence, see Alice, 134 S. Ct. at 2354, “preemption may signal patent ineligible subject matter, [but] the absence of complete preemption does not demonstrate patent eligibility.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015). Moreover, “[w]here a patent’s claims are deemed only to disclose patent ineligible subject matter under the [Alice/Mayo] framework . . . , preemption concerns are fully addressed and made moot.” Id. Therefore, we are not persuaded that the “inventive concepts” recited by Appellants are sufficient to transform the abstract idea into patent-eligible subject matter. With regard to the “inventive concepts” recited by Appellants with regard to claims 25—43 (Appeal Br. 14—19), for the reasons discussed above, we are not persuaded that they add any meaningful limitations so as to transform the abstract idea into patent-eligible subject matter. 7 Appeal 2016-002035 Application 13/866,844 Therefore, we are not persuaded that the Examiner erred in rejecting claim 24-43 under § 101. DECISION The Examiner’s rejection of claims 24-43 under 35 U.S.C. § 101 is affirmed. 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 8 Copy with citationCopy as parenthetical citation