Ex Parte Knackstedt et al

Patent Trial and Appeal Board

Jan 31, 2018

11758550 (P.T.A.B. Jan. 31, 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.
47004.000485 4681
EXAMINER
JOHNSON, CHRISTINE
ART UNIT PAPER NUMBER
3696
MAIL DATE DELIVERY MODE
11/758,550 06/05/2007
7590
Hunton & Williams LLP/JPMorgan Chase
Intellectual Property Department
2200 Pennsylvania Avenue, NW
Suite 800
Washington, DC 20037
Lee Knackstedt
01/31/2018 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 LEE KNACKSTEDT and SCOTT W. RAU
Appeal 2016-007682
Application 11/758,5501
Technology Center 3600
Before CAROLYN D. THOMAS, NABEEL U. KHAN, and
DAVID J. CUTITTAII, Administrative Patent Judges.
KHAN, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Final Rejection
of claims 1—24 and 26—32. We have jurisdiction under 35 U.S.C. § 6(b).
We affirm.
1 Appellants identify JPMorgan Chase Bank, N.A. as the real party in
interest. App. Br. 1.
Appeal 2016-007682
Application 11/758,550
STATEMENT OF THE CASE
The Invention
According to Appellants, the invention relates to “keeping check of
financial transactions using a register portion, in conjunction with
performing authentication of the transaction.” Spec. 1:15—17.
Exemplary independent claim 1 is reproduced below.
1. A system that keeps check of financial transactions by
maintaining a count of the financial transactions using a register
portion, in conjunction with performing authentication further to
inputting transaction data from a data-bearing record that is
stored in a device, the system processing transactions
respectively performed using first and second user devices that
are associated with a single account number and having first and
second transaction count value windows, respectively, the
system comprising:
a communication portion that inputs transaction data
received from the data bearing record disposed in the device, the
transaction data including an input transaction counter value and
a first device differentiator number (DDN) that is associated with
the first user device, the transaction data associated with a
transaction;
a processing portion, in the form of a tangibly embodied
computer processor, that processes the transaction data, the
processing portion including:
a memory portion that stores stored data;
a register portion that maintains a count of financial
transactions so as to provide a current transaction count
value associated with the first DDN;
an authentication portion that performs
authentication processing using a comparison process that
utilizes the first transaction count value window and the
input transaction count value, the first transaction count
value window being based on the current transaction count
value associated with the first DDN and defined by a
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dynamic range of values such that a spread value of the
first transaction count value window changes based on the
received transaction data; and
the authentication portion generating an authentication
result based on the comparison process; and
the authentication portion outputting the authentication
result; and
for a second transaction, the communication portion
inputting second transaction data received from a data bearing
record disposed in the second user device, the second transaction
data including a second transaction counter value and a second
DDN that is associated with the second user device;
the authentication portion, for the second transaction
initiated by the second user device, performing second
authentication processing using a comparison process that
utilizes the second transaction count value window and the input
second transaction count value, the second transaction count
value window being based on a current transaction count value
associated with the second DDN associated with the second user
device, and defined by the dynamic range of values,
wherein the dynamic range of values for the first
transaction count value window is based on at least one selected
from the group consisting of a time of day that the transaction
was processed, the device that generated the transaction data, a
location at which the transaction was effected, a frequency of
transactions associated with the device, a rule set, and a
determination of whether the transaction was processed using
batch processing.
Rejection
Claims 1—24 and 26—32 stand rejected under 35 U.S.C. § 101 as
directed to a judicial exception to statutory subject matter. Final Act. 3—6.
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DISCUSSION
Under 35 U.S.C. § 101, a patent may be obtained for “any new and
useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof.” The Supreme Court has “long held that
this provision contains an important implicit exception: Laws of nature,
natural phenomena, and abstract ideas are not patentable.” Alice Corp. v.
CLS Bank Int 7, 134 S. Ct. 2347, 2354 (2014) (quoting Ass’n for Molecular
Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)). The
Supreme Court in Alice reiterated the two-step framework previously set
forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566
U.S. 66 (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. The first step in
that analysis is to “determine whether the claims at issue are directed to one
of those patent-ineligible concepts,” such as an abstract idea. The Court
acknowledged in Mayo that “all inventions at some level embody, use,
reflect, rest upon, or apply laws of nature, natural phenomena, or abstract
ideas.” Mayo, 566 U.S. at 71. We, therefore, look to whether the claims
focus on a specific means or method that improves the relevant technology
or are instead directed to a result or effect that itself is the abstract idea and
merely invoke generic processes and machinery. See Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335—36 (Fed. Cir. 2016). If the claims are
not directed to an abstract idea, the inquiry ends. Otherwise, the inquiry
proceeds to the second step where the elements of the claims are considered
“individually and ‘as an ordered combination,’ to determine whether the
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additional elements ‘transform the nature of the claim’ into a patent-eligible
application.” Alice, 134 S. Ct. at 2355 (quoting Mayo, 566 U.S. at 79, 78).
Step One of Alice/Mayo Framework
Findings and Contentions
Under the first step of the Alice/Mayo framework, the Examiner
concludes: “These claims are directed to the abstract idea of maintaining an
accurate record of financial transactions, which falls under the abstract ideas
of: (i) a fundamental economic practice, (ii) a method of organizing human
activities, (iii) an idea of itself, or (iv) a mathematical relationship or
formula.” Final Act. 3. The Examiner further states:
Maintaining an accurate record of financial transactions is not a
preexisting fundamental truth, but rather is a longstanding
commercial practice. The concept of maintaining an accurate
record of financial transactions is a fundamental economic
practice long prevalent in our system of commerce, which is in
the realm of abstract ideas. Thus, the claim is directed to the
abstract idea of maintaining an accurate record of financial
transactions.
Final Act. 4.
Appellants argue “the Examiner has not presented a prima facie case
that the claims are merely directed to an abstract idea and has not complied
with the July 2015 Subject Matter Eligibility guidelines.” App. Br. 9. In
particular, Appellants argue, “The Office Action lacks ‘a reasoned rationale’
and an explanation as to why the several claim elements ‘do not amount to
significantly more than the exception.’” App. Br. 8. “The Examiner did not
compare the claimed concepts to prior court decisions, nor did the Examiner
even identity the claimed features beyond merely stating that ‘inputting
transaction data and maintaining a count of financial transactions [] amounts
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to nothing more than insignificant extrasolution activities.’” App. Br. 9
(alteration in original).
Appellants contend “allowing the pending claims would ‘pose no
comparable risk of pre-emption,’ or ‘improperly [tie] up the future use of []
building blocks of human ingenuity,’ and therefore should ‘remain eligible
for the monopoly granted under our patent laws. ’” App. Br. 10—11
(alteration in original) (quoting Alice, 134 S. Ct. at 2355).
Analysis
We are unpersuaded by Appellants’ arguments. With respect to
Appellants’ arguments that the Examiner has failed to present a prima facie
case, we disagree. To the extent Appellants suggest that the July 2015
Update or May 2016 Memorandum requires particular steps be performed in
specific ways to establish that a claim is directed to an abstract idea, i.e., a
“prima facie” case, Appellants are mistaken. Instead, 35 U.S.C. § 132 sets
forth a more general notice requirement whereby the applicant is notified of
the reasons for a rejection together with such information as may be useful
in judging the propriety of continuing with prosecution of the application.
Our reviewing court has explained:
[A]ll that is required of the [USPTO] to meet its prima facie
burden of production is to set forth the statutory basis of the
rejection and the reference or references relied upon in a
sufficiently articulate and informative manner as to meet the
notice requirement of § 132. As the statute itself instructs, the
examiner must “notify the applicant,” “stating the reasons for
such rejection,” “together with such information and references
as may be useful in judging the propriety of continuing
prosecution of his application.” 35 U.S.C. § 132.
In re Jung, 637 F.3d 1356, 1363 (Fed. Cir. 2011). We have reviewed the
decision to reject the claims for patent-ineligibility articulated by the
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Examiner (see Final Act. 3—6; Ans. 2—9) and find it meets the notice
requirements of35U.S.C. § 132. The Examiner has set forth the statutory
basis for the rejection (a judicial exception to 35 U.S.C. § 101) and
explained the rejection in sufficient detail to permit Appellants to respond
meaningfully.
We turn next to the Examiner’s determination that the claims are
directed to an abstract idea. “The ‘abstract idea’ step of the inquiry calls
upon us to look at the ‘focus of the claimed advance over the prior art’ to
determine if the claim’s ‘character as a whole’ is directed to excluded
subject matter.’” Affinity Labs of Texas v. DirectTV, LLC, 838 F.3d 1253,
1257 (Fed. Cir. 2016) (quoting Elec. Power Grp., LLC v. Alstom S.A., 830
F.3d 1350, 1353 (Fed. Cir. 2016); see also Enfish, 822 F.3d at 1335 (“[T]he
‘directed to’ inquiry applies a stage-one filter to claims, considered in light
of the specification, based on whether ‘their character as a whole is directed
to excluded subject matter.’” (citation omitted)).
In this regard, the Specification explains:
It is known in the art to use an ATC (Automatic
Transaction Counter) .... When the cardholder runs a new
transaction, the ATC is read and then compared to an ATC value
[maintained by the authentication platform] .... If respective
derived values, i.e., values derived from the ATC values, do not
match, then the transaction is denied. This processing prevents
fraud by a person who somehow reads (or otherwise acquires) an
account number or other information associated with the
account.
Spec. 1:19-2:1. Claim 1 claims this general idea in more specific detail,
reciting “[a] system that keeps check of financial transactions by
maintaining a count of the financial transactions.” App. Br. 17 (Claims
Appx.). The claimed invention checks and authenticates the financial
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transactions of first and second user devices associated with single account
by comparing a transaction count value, input by the device, with the
devices’ respective transaction count value windows. Id. The transaction
count value windows are defined by a dynamic range of values such that a
spread value of the transaction count value window changes based on
transaction data wherein the data includes one of at least a time of day the
transaction was processed, the device that generated the transaction data, a
location where the transaction occurred, a frequency of the transactions
associated with the device, a rule set, and whether the transaction was
processed using batch processing. App. Br. 17—18 (Claims Appx.). If the
input transaction count falls within the range of the transaction count
window the transaction may be authenticated. See Spec. 32:3—8, 34:17—
35:2.
Based on a review of the claims as whole and the Specification, as
outlined above, we agree with the Examiner’s characterization of the claims
as being directed to “maintaining an accurate record of financial
transactions.” Final Act. 3. Moreover, we agree with the Examiner that
maintaining an accurate record of financial transactions, or as claim 1
recites, “keep[ing] check of financial transactions by maintaining a count of
the financial transactions” is directed to an abstract idea because it is
directed to a fundamental economic practice, an idea of itself, or a set of
mathematical operations.
The claims essentially involve defining a range of values (the
transaction count value window) based on factors such as time of day, and
comparing an input transaction count value with this range of values. If the
input transaction count value falls within the range, the financial transaction
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is authorized, otherwise it is not. These are, at their core, mathematical and
logical operations, mental processes and abstract intellectual concepts, the
like of which the Federal Circuit has determined to be directed to patent
ineligible abstract concepts. See CyberSource Corp. v. Retail Decisions,
Inc., 654 F.3d 1366, 1370 (Fed. Cir. 2011) (holding “[a] method for
verifying the validity of a credit card transaction” as directed to the abstract
idea of “obtain[ing] and comparing] intangible data pertinent to business
risks”); Classen Immunotherapies Inc. v. Biogen IDEC, 659 F.3d 1057,
1067—68 (Fed. Cir. 2011) (holding a claim involving “the idea of collecting
and comparing known information,” without more, is directed to an abstract
idea); Elec. Power Grp., 830 F.3d at 1353 (“The focus of the asserted claims
... is on collecting information, analyzing it, and displaying certain results
of the collection and analysis.”).
We find Appellants’ argument that the claims pose no risk of
preemption, unpersuasive. “While preemption may signal patent ineligible
subject matter, 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, “[wjhere a patent’s claims are
deemed only to disclose patent ineligible subject matter under the Mayo
framework, as they are in this case, preemption concerns are fully addressed
and made moot.” Id.; see also OIP Techs., Inc. v. Amazon.com, Inc., 788
F.3d 1359, 1362—63 (Fed. Cir. 2015) (“[Tjhat the claims do not preempt all
price optimization or may be limited to price optimization in the
e-commerce setting do not make them any less abstract.”), cert, denied,
136 S. Ct. 701 (2015).
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Accordingly, the Examiner did not err in concluding the claims are
directed to an abstract idea.
Step Two of Alice/Mayo Framework
Findings and Contentions
Under step two of the Alice/Mayo framework, the Examiner
concludes:
The claims do not include additional elements that are sufficient
to amount to significantly more than the judicial exception
because although a computer (i.e. a memory and processor) acts
to perform the claimed method, the claims do no more than
implement maintaining an accurate record of financial
transactions on a generic computer. Using a computer to
authenticate by using a comparison process that utilizes the first
transaction count value window and input transaction count
value and generating an authentication result amounts to data
analysis, which is 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.
Final Act. 4 (alteration in original). The Examiner further determines, “[t]he
claims do not purport to improve the functioning of the computer itself, or to
improve any other technology or technical field.” Final Act. 5.
With respect to claim 1, Appellants point to the following limitations
as significantly more than the alleged abstract idea:
an authentication portion that performs authentication
processing using a comparison process that utilizes the first
transaction count value window and the input transaction count
value, the first transaction count value window being based on
the current transaction count value associated with the first DDN
and defined by a dynamic range of values such that a spread
value of the first transaction count value window changes based
on the received transaction data
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wherein the dynamic range of values for the first
transaction count value window is based on at least one selected
from the group consisting of a time of day that the transaction
was processed, the device that generated the transaction data, a
location at which the transaction was effected, a frequency of
transactions associated with the device, a rule set, and a
determination of whether the transaction was processed using
batch processing.
App. Br. 12—13. Appellants argue these limitations are unrelated to the
alleged abstract idea. For example, Appellants argue, “The claimed
‘dynamic range of values’ is a novel and non-obvious concept that is not
taught by the prior art nor is it related to the obscure idea of ‘maintaining an
accurate record of financial transactions.’” App. Br. 12. “The abstract idea
fashioned by the Examiner is completely unrelated to changing a dynamic
range of values for a transaction count value window based on a time of day,
the particular device used in the transaction, the location of the transaction,
frequency of the transactions, etc.” App. Br. 13.
With respect to independent claim 31, Appellants point to the
following limitations as evidence that the claim includes significantly more
than the alleged abstract idea:
the window generation portion determines the first value
by incrementing the current transaction count value by a first
spread value; and
the window generation portion determines the second
value by decrementing the current transaction count value by a
second spread value, and wherein:
the window generation portion determining the first value
by incrementing the current transaction count value by a first
spread value is performed according to the relationship:
first value = current transaction count value + first
spread value, where the first value, the current transaction
count value and the first spread value are integers; and
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the window generation portion determining the second
value by decrementing the current transaction count value by a
second spread value is performed according to the relationship:
second value = current transaction count value -
second spread value, where the second value, the current
transaction count value and the second spread value are
integers.
App. Br. 13—14. According to Appellants, “[tjhese highly-specific features
are both unrelated to, and not required by, the alleged abstract idea of
‘maintaining an accurate record of financial transactions.’ Nor is it
reasonable to argue that these additional features represent ‘a fundamental
economic practice long prevalent in our system of commerce.’” App. Br.
14.
Finally, citing the lack of prior art rejections under 35 U.S.C. §§102
and 103, Appellants argue, “The claims provide an inventive concept since
they have been found to be allowable under 35 U.S.C. §§ 102 and 103.”
App. Br. 15 (boldface omitted).
Analysis
Appellants’ arguments are unpersuasive. The limitations cited by
Appellants relate to comparing the input transaction count value with the
transaction count value window. This is, as explained above, an abstract
idea. The claim limitations relating to defining the dynamic range of values
so that the transaction count value window changes based on factors, such as
time of day, are directly related to, rather than “completely unrelated” to, the
abstract idea of maintaining an accurate record of financial transactions by
comparing a count value to a count value window. The limitations of claim
31 cited by Appellants simply detail the mathematical operations of
calculating the transaction count window range by adding and subtracting
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spread values. These mathematical operations are themselves abstract and
therefore do not transform a claim otherwise directed to an abstract idea, to
something more than the abstract idea. See RecogniCorp v. Nintendo, 855
F.3d 1322, 1327 (Fed. Cir. 2017) (“Adding one abstract idea ... to another
abstract idea . . . does not render the claim non-abstract.”)
Finally, the fact that the Examiner has withdrawn or not presented a
prior art rejection under 35 U.S.C. §§ 102 and 103 does not necessarily
mean the claims are directed to patent eligible concepts. Although the
second step in the Alice/Mayo framework is termed a search for an
“inventive concept,” the analysis is not an evaluation of novelty or non­
obviousness, but rather a search for “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 (alteration in original) (quoting Mayo, 566 U.S. at 73). A
novel and nonobvious claim directed to a purely abstract idea is,
nonetheless, patent-ineligible. See Mayo, 566 U.S. at 89-90.
Accordingly, we agree with the Examiner the claim limitations, when
viewed individually and as an ordered whole, do not include significantly
more than the alleged abstract idea of maintaining an accurate record of
financial transactions.
DECISION
The Examiner’s rejection of claims 1—24 and 26—32 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). See 37 C.F.R.
§ 41.50(f).
AFFIRMED
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