Ex Parte Keller et al

Patent Trial and Appeal Board

May 5, 2017

13866844 (P.T.A.B. May. 5, 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.
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.
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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
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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
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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
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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
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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.
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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
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