Ex Parte Kendrick et al

Patent Trial and Appeal Board

Jul 24, 2017

13908656 (P.T.A.B. Jul. 24, 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.
13/908,656 06/03/2013 Jeff P. Kendrick PROP 0102 PUS2 2667
22045 7590 07/26/2017
RROOKS KTTSHMAN P C EXAMINER
1000 TOWN CENTER DONLON, RYAN D
TWENTY-SECOND FLOOR
SOUTHFIELD, MI 48075 ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
07/26/2017 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):
docketing @brookskushman.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JEFF P. KENDRICK,
FRANK ANTHONY ALLEN,
PAUL HAROLD ANDERSON,
and WAYNE WILLIAM PECK
Appeal 2015-005522
Application 13/908,656
Technology Center 3600
Before ANTON W. FETTING, NINA L. MEDLOCK, and
AMEE A. SHAH, Administrative Patent Judges.
FETTING, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE1
Jeff P. Kendrick, Frank Anthony Allen, Paul Harold Anderson, and
Wayne William Peck (Appellants) seek review under 35 U.S.C. § 134 of a
1 Our decision will make reference to the Appellants’ Appeal Brief (“App.
Br.,” filed December 16, 2014) and Reply Brief (“Reply Br.,” filed May 4,
2015), and the Examiner’s Answer (“Ans.,” mailed March 3, 2015), and
Final Action (“Final Act.,” mailed July 16, 2014).
Appeal 2015-005522
Application 13/908,656
final rejection of claims 1—4 and 9—11, the only claims pending in the
application on appeal. We have jurisdiction over the appeal pursuant to
35 U.S.C. § 6(b).
The Appellants invented a way to allow merchants to perform payment
processing such that the merchant is only required to identify a unique
identifier of a customer account and not data specific to a particular payment
device. Specification 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 of
processing electronic payment transactions
using at least one payment device of a customer
without requiring a merchant to store sensitive data
specific to the at least one payment device,
the method comprising:
[1] receiving a notification from a merchant
that a customer is attempting an electronic payment
transaction at a secure payment system,
the secure payment system including one or more servers
that include one or more processors and one or more
storage devices;
[2] determining by the secure payment system
that the electronic payment transaction requires sensitive
data
that when stored by the merchant imposes regulations on
the merchant
to protect the sensitive data,
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wherein the regulations includes standards
relating to the security of the sensitive data stored
in the secure payment system;
[3] receiving identification information of a customer account
while the customer is attempting the electronic payment
transaction;
[4] generating a unique identifier associated with the customer
account;
[5] receiving sensitive data
specific to a first payment device
from the customer
while the customer is attempting the electronic payment
transaction
such that the merchant does not store the sensitive data
specific to the first payment device;
[6] storing identification information of
the customer account
and
the sensitive data specific to the first payment device;
[7] providing the unique identifier
to at least one of the merchant or a customer;
[8] receiving a payment processing request from the merchant
that includes the unique identifier
and not the sensitive data specific to the first payment
device;
and
[9] processing the payment processing request
using the first payment device
such that the merchant is only required to identify the
unique identifier of the customer account
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and not the sensitive data specific to the first payment
device.
The Examiner relies upon the following prior art:
Singhal US 2002/0062281 A1
Gupta US 2006/0064372 A1
May 23, 2002
Mar. 23, 2006
Hall, A Stolen Identity Will Cost You, Air Conditioning, Heating &
Refrigeration News, vol. 230, iss. 7, p. 1 (Feb. 12, 2007) (“Hall”).2
Claims 1^4 and 9—11 stand rejected under 35U.S.C. § 101 as directed to
non-statutory subject matter.
Claims 1^4 and 9—11 stand rejected under 35 U.S.C. § 103(a) as
unpatentable over Gupta, Singhal, and Hall.
The issues of eligible subject matter turn primarily on whether the claims
are directed to more than conceptual advice of what data to provide. The
issues of obviousness turn primarily on whether the prior art suggests
applying the modifications in Singhal to Gupta.
2 The Examiner erroneously lists the title as “NeoScale Extends Storage
Security Leadership.” Both articles were included in the same file listed on
the Notice of References Cited mailed April 3, 2014. The proper title and
article is the second article in that file.
ISSUES
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FACTS PERTINENT TO THE ISSUES
The following enumerated Findings of Fact (FF) are believed to be
supported by a preponderance of the evidence.
Facts Related to the Prior Art
Gupta
01. Gupta is directed to facilitating selective use of two or more
accounts associated with a single transaction account identifier.
Gupta para. 1.
02. Gupta describes a common transaction account identifier that
can be used in transactions associated with one of multiple
transaction accounts. Gupta includes one or more of the following
steps: establishing at least two transaction accounts, wherein the
transaction accounts are respectively associated with transaction
account identifiers (e.g., numbers, letters, symbols, signals and/or
the like); receiving, at a transaction processing system, a common
account identifier; recognizing the common account identifier as
being associated with more than one account; and determining
which of the at least two transaction accounts to access for
processing the transaction. The determining step may be based on
selection criteria, and the selection criteria may be modified by a
user of the first and second transaction accounts. One of the first
and second transaction account identifiers may be forwarded to
the respective first and second transaction accounts based on the
determining step; and the transaction may be processed via the
selected transaction account. Gupta para. 5.
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03. Gupta uses its card in card readers for payments to merchants.
Gupta para. 18.
04. Gupta associates its card with a common account identifier/card
number. Furthermore, an “account identifier”, “card number”,
“code”, “identifier” or “loyalty number” may include any device,
code, or other identifier/indicia suitably configured to allow the
consumer to interact or communicate with the system, such as, for
example, authorization/access code, personal identification
number (PIN), Internet code, other identification code, and/or the
like that is optionally located on a rewards card, pre-paid card,
telephone card, smart card, magnetic stripe card, bar code card,
radio frequency card and/or the like. The account identifier may
be distributed and stored in any form of plastic, electronic,
magnetic, radio frequency, audio and/or optical device capable of
transmitting or downloading data from itself to a second device.
An account identifier may be, for example, a sixteen-digit card
number, although each card provider has its own numbering
system, such as the fifteen-digit numbering system used by an
exemplary loyalty system. Each company’s card numbers comply
with that company’s standardized format such that the company
using a sixteen-digit format may generally use four spaced sets of
numbers, as represented by the number “0000 0000 0000 0000”.
The first five to seven digits are reserved for processing purposes
and identify the issuing bank, card type, etc. In this example, the
sixteenth digit is used as a sum check for the sixteen-digit number.
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The intermediary eight-to-ten digits are used to uniquely identify
the customer. In addition, loyalty account identifiers of various
types may be used. Gupta para. 20.
Singhal
05. Singhal is directed to facilitating private and secure payment
transactions between a customer and a merchant and between
private parties. Singhal para. 5.
06. Singhal describes a customer not having to share his/her
identity, personal sensitive data, and purchasing habits with the
merchants and the banks. Singhal para. 15.
07. When the customer is using the payment card at the location of
the merchant, the payment card can be swiped in a card reader. A
Card Personal Identification Number (CPIN) is entered into the
card reader by the customer. The merchant identification and a
payment amount is entered into the card reader by the merchant,
and a data record including at least the foregoing data and the
encrypted card number is transferred over the global network to
the central system. The central system decrypts the payment card
number to identify the customer identification. Figure 7C
illustrates an approach of the Security Function that takes an
encrypted card number and determines the customer
identification. The card number along with its expiration date and
a CPIN that is entered by the customer is received by the system.
The 16 digits of the card number are parsed into four 4-digit
numbers. In the security function, four offset numbers that
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correspond to the 4-digit expiration date are read. The offset
numbers are added to each of the four 4-digit numbers. The
modified four 4-digit numbers are combined to form a customer
identification number. Using the customer identification number
and the CPIN from the customer database, the particular bankcard
data, which the customer wishes to use for this payment
transaction is obtained. Singhal paras. 69—70.
Hall
08. Hall is directed to the risks of failing to secure online private
information. Hall Abstract.
ANALYSIS
Claims 1—4 and 9—11 rejected under 35 U.S.C. §101 as directed to non—
statutory subject matter
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.”
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Alice Corp., Pty. Ltd. v. CLSBankInt’l, 134 S. Ct. 2347, 2355 (2014) (citing
Mayo Collaborative Services v. Prometheus Labs, Inc., 132 S. Ct. 1289
(2012)).
To perform this test, we must first determine whether the claims at issue
are directed to a patent-ineligible concept.
The Examiner finds the claims directed to electronic payment processing.
Final Act. 2. Although this is so, there is an even more fundamental
direction to these claims. The preamble to claim 1 recites that it is a method
of processing electronic payment transactions using at least one payment
device of a customer without requiring a merchant to store sensitive data
specific to the at least one payment device. The steps in claim 1 result in
making a payment without having to access privileged information. The
Specification at paragraph 2 recites that the invention relates to allowing
merchants to perform payment processing such that the merchant is only
required to identify a unique identifier of a customer account and not data
specific to a particular payment device. Thus, all this evidence shows that
claim 2 is directed to storing sensitive data in such a way that it may be
accessed without the merchant, i.e., information escrowing (sensitive
information is held in escrow bypassing the merchant, and the escrow
release is completed by providing the recited unique identifier).
It follows from prior Supreme Court cases, and In re Bilski, 545 F.3d 943
(Fed. Cir. 2008) in particular, that the claims at issue here are directed to an
abstract idea. Fike the risk hedging in Bilski, the concept of escrow is a
fundamental business practice long prevalent in our system of commerce.
The use of escrow is also a building block of property protection. Data
escrow is now a long-used practice to protect both a security interest and
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privacy interest held by different parties in the same data. Thus, data
escrow, like hedging, is an “abstract idea” beyond the scope of §101. See
Alice Corp. Pty. Ltd.. 134 S. Ct. at 2356.
As in Alice Corp. Pty. Ltd., 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 escrow at
issue here. Both are squarely within the realm of “abstract ideas” as the
Court has used that term. See Alice Corp. Pty. Ltd., 134 S. Ct. at 2357.
Further, claims involving data collection, analysis, and display are
directed to an abstract idea. Elec. Power Grp. 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
Commc ’ns LLC Patent Litig., 823 F.3d at 611; FairWarning 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, and processing 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 processing data.
Claims 2-4 merely describe the data employed. We conclude that the
claims at issue are directed to a patent-ineligible concept.
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The introduction of a computer into the claims does not alter the analysis
at Mayo step two.
the 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.’”
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 preemption
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 Corp. Pty. Ltd., 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.” Alice Corp. Pty. Ltd., 134 S.Ct. 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 data, determine what data is needed, generate data, store
data, and process payments in the form of data 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.
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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 data escrow as performed by a generic
computer. To be sure, the claims recite doing so by advising one to look at
the data in a transaction to see if secure processing is needed and if so,
generating identifier data, and using that identifier as a stand-in for data that
need to be secured. But this is no more than abstract conceptual advice on
the parameters for such escrow and the generic computer processes
necessary to process those parameters, and does not recite any particular
implementation. Even the step of “receiving sensitive data specific to a first
payment device . . . such that the merchant does not store the sensitive data
specific to the first payment device” is no more than abstract conceptual
advice absent any implementation detail. As it is, the claim is little more
than advising one to use an alias to hide sensitive information.
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. The 25 pages of the Specification
spell out different generic equipment and parameters that might be applied
using this concept and the particular steps such conventional processing
would entail based on the concept of escrowing data under different criteria.
They do not describe any particular improvement in the manner a computer
functions. Instead, the claims at issue amount to nothing significantly more
than an instruction to apply the abstract idea of escrow using some
unspecified, generic computer. Under our precedents, that is not enough to
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transform an abstract idea into a patent-eligible invention. See Alice Corp.
Pty. Ltd., 134 S. Ct. at 2360.
As to the structural claims, they
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.’
Alice Corp. Pty. Ltd., 134 S. Ct. at 2360. Further, the structural claims are
far more broad and abstract than claim 1. Claims 9 and 10 substitute an alias
for an account number, and claim 11 also interprets the alias back to the
account number. These claims do not even go so far as to escrow the data.
There is little more abstract than substituting an alias for a name.
We are not persuaded by Appellants’ argument that
the claims are a technical solution to a technical problem. Put a
different way, the challenge of creating infrastructure that
would enable merchants to perform payment processing
requests without being PCI3-compliant is not a mere
fundamental economic practice of organizing human activities.
App. Br. 4. The claims are not a technical solution as they do nothing to the
underlying technology. The claims do not mention the technical details of
PCI compliant architecture, much less how the technology is changed to get
around its requirements. Instead, the claims recite conceptual advice for
substituting one name for another and depositing data.
3 PCI (“Payment Card Industry”)
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Claims / 4 and 9—11 rejected under 35 U.S.C. § 103(a) as unpatentable
over Gupta, Singhal, and Hall
The Examiner applies Gupta for conventional payment processing and
finds that Hall shows why it is important to protect private information in
transactions such as in Gupta. The Examiner then applies Singhal to show it
was known to provide an account number alias in the form of an encrypted
customer identification and to protect private data by retaining it in a
separate database.
We are not persuaded by Appellants’ argument that the Examiner’s
reasoning for combining the references was conclusory. App. Br. 4—5.
Although the Examiner did find that Gupta was ready for improvement, this
was with respect to the warning in Hall that the data in Gupta needed
protection. The Examiner does conclude the result would have been
predictable, but this is more of a statement of the predictability of the art
after finding that Singhal provided a mechanism for improving on Gupta for
the reasons articulated in Singhal (a customer not having to share his/her
identity, personal sensitive data).
Appellants argue that the art does not describe receiving sensitive data
specific to a first payment device from the customer while the customer is
attempting the electronic payment transaction such that the merchant does
not store the sensitive data specific to the first payment device. Reply Br. 2—
3. This argument is untimely as it was not presented in the Appeal Brief for
the Examiner response, and was not in response to the Examiner’s response
to the arguments in the Appeal Brief. This argument was therefore waived.
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CONCLUSIONS OF LAW
The rejection of claims 1—4 and 9—11 under 35U.S.C. § 101 as directed
to non-statutory subject matter is proper.
The rejection of claims 1—4 and 9—11 under 35 U.S.C. § 103(a) as
unpatentable over Gupta, Singhal, and Hall is proper.
DECISION
The rejections of claims 1—4 and 9—11 are 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). See 37 C.F.R.
§ 1.136(a)(l)(iv) (2011).
AFFIRMED
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