Ex Parte Lim et al

Patent Trial and Appeal Board

Jan 17, 2018

13072356 (P.T.A.B. Jan. 17, 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.
13/072,356 03/25/2011 Kwang Hyun Lim 79900-789745(065310US) 5821
66945 7590 01/19/2018
KILPATRICK TOWNSEND & STOCKTON LLP/VISA
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
EXAMINER
POLLOCK, GREGORY A
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
01/19/2018 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):
ipefiling@kilpatricktownsend.com
EDurrell @ kilpatrickto wnsend .com
KT S Docketing2 @ kilpatrick. foundationip .com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte KWANG HYUN LIM and RICHARD LOUIS DELERY
Appeal 2016-005831
Application 13/072,3561
Technology Center 3600
Before ALLEN R. MacDONALD, JOSEPH P. LENTIVECH, and
KARA L. SZPONDOWSKI, Administrative Patent Judges.
LENTIVECH, Administrative Patent Judge.
DECISION ON APPEAL
Appellants seek our review under 35 U.S.C. § 134(a) of the
Examiner’s Final Rejection of claims 1—4 and 10-25. Claims 5-9 have been
canceled. See App. Br. 32 (Claims App’x). We have jurisdiction over the
pending claims under 35 U.S.C. § 6(b).
We affirm.
1 According to Appellants, the real party in interest is Visa International
Service Association. App. Br. 2.
Appeal 2016-005831
Application 13/072,356
STATEMENT OF THE CASE
Appellants ’ Invention
Appellants’ invention generally relates to methods for detection and
prevention of fraudulent transactions in payment processing networks. Spec.
5, 6. Claim 1, which is illustrative, reads as follows:
1. A method comprising:
sending, by a computing device via a gateway, an
automated alert message to a mobile device associated with a
portable consumer device, wherein the automated alert message
provides notification of a recent transaction between a merchant
and a user related to an account that is associated with the
portable consumer device;
receiving, by the computing device via the gateway, a
reply message in response to the automated alert message,
wherein the reply message indicates that the recent transaction is
fraudulent;
updating, by the computing device, a risk engine with data
associated with the reply message, wherein the risk engine
comprises a risk scoring algorithm, and wherein the risk engine
generates fraud scores for future payment transactions conducted
by the user and other users utilizing peer group usage history,
transaction histories of the user, and location data for
transactions; and
sending, by the computing device via the gateway, a
notification regarding potential fraud based on an analysis by the
risk engine of the data associated with the reply message;
receiving transaction data for a subsequent transaction;
and
determining if the subsequent transaction is fraudulent
using the transaction data for the subsequent transaction and the
updated risk engine.
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References
The Examiner relies on the following prior art in rejecting the claims:
Hillmer et al. (“Hillmer”) US 2003/0097330 A1
Bruesewitz et al. (“Bruesewitz”) US 2005/0149455 Al
Lakshminarayanan US 2008/0275779 Al
Chen et al. (“Chen”) US 8,805,737 B1
May 22, 2003
July 7, 2005
Nov. 6, 2008
Aug. 12, 2014
Rejections
Claims 1^1 and 10-25 stand rejected under 35 U.S.C. § 101 as being
directed to subject matter that is judicially-excepted from patent eligibility
under § 101. Final Act. 2-3.
Claims 1—4, 10, 11, and 13-25 stand rejected under 35 U.S.C.
§ 103(a) as being unpatentable over the combination of Lakshminarayanan,
Hillmer, and Chen. Final Act. 3-8.
Claim 12 stands rejected under 35 U.S.C. § 103(a) as being
unpatentable over the combination of Lakshminarayanan, Hillmer, Chen,
and Bruesewitz. Final Act. 9.
ANALYSIS
§101 Rejection of Claims 1—4 and 10—25
In Alice Corp. Pty. Ltd. v. CLS Bank Inti, 134 S. Ct. 2347 (2014), the
Supreme Court reiterates an analytical two-step framework previously set
forth in Mayo Collaborative Servs. v. Prometheus Laboratories, Inc., 566
U.S. 66, 77-78 (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
the analysis is to “determine whether the claims at issue are directed to one
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of those patent-ineligible concepts,” such as an abstract idea. Alice, 134 S.
Ct. at 2355. If the claims are directed to a patent-ineligible concept, the
second step in the analysis is to consider the elements of the claims
“individually and ‘as an ordered combination’” to determine whether there
are additional elements that ‘“transform the nature of the claim’ into a
patent-eligible application.” Id. (citing Mayo, 566 U.S. at 78-79). In other
words, the second step is to “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.’” Id. (citing Mayo, 566 U.S. at 72-73). 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, 1336 (Fed.
Cir. 2016).
In rejecting claims and 10-23, the Examiner finds these claims
are directed to “fraud detection.” Final Act. 2. The Examiner finds fraud
detection is a fundamental economic practice and, therefore, the claims are
directed to an abstract idea. Id. The Examiner finds the claims do not recite
“significantly more” than the abstract idea because “the claims do not
include an improvement to another technology or technical field, an
improvement to the functioning of the computer itself, or meaningful
limitations beyond generally linking the use of an abstract idea to a
particular technological environment” and “[t]he limitations are merely
instructions to implement the abstract idea on a computer and require no
more than a generic computer to perform generic computer functions that are
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well-understood, routine and conventional activities previously known to the
industry.” Final Act. 2-3.
Appellants contend
Assuming, arguendo, that the claims are directed to an alleged
abstract idea of a “fraud detection,” ... the claims recite
meaningful limitations that sufficiently limit the practical
application of any alleged abstract idea of a “fraud detection” and
thus do “not seek to tie up any judicial exception such that others
cannot practice it” and thus constitute patent-eligible subject
matter under 35 U.S.C. § 101.
App. Br. 10.
Appellants further contend the claims recite significantly more
because the claims are necessarily rooted in computer technology to
overcome a problem specifically arising in the realm of computer
technology because the claims can utilize a number of different devices in a
distributed system to prevent fraudulent transactions. App. Br. 11.
We find claims \^\ and 10-25 are directed to fraud detection, a
fundamental economic practice and, thus, an abstract idea. The claimed
invention, as illustrated by claim 1, sends an automated alert message
providing notification of a recent transaction between a merchant and a user
to a mobile device; receives a reply message indicating the recent transaction
is fraudulent; updates a risk with data associated with the reply message;
sends a notification regarding potential fraud based on an analysis by the
risk engine of the data associated with the reply message; receives
transaction data for a subsequent transaction; and determines if the
subsequent transaction is fraudulent using the transaction data for the
subsequent transaction and the update risk engine. See App. Br. 31 (Claims
Appendix). As Appellants’ Specification explains, the invention relates to
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“improved methods for detection and prevention of fraudulent transactions.”
Spec. ^ 6; see also Spec. 8-9 (providing “[o]ne embodiment of the
invention is directed to a method for improved fraud detection and warning .
. . .” and “[ajnother embodiment is directed to further methods where the
risk engine uses data from a reply message to identify other potential
fraudulent transactions.”). That the claimed method requires use of a
computer system does not cause the claims to be directed to something other
than an abstract idea, because the claimed steps can “be carried out in
existing computers long in use, no new machinery being necessary.”
Gottschalkv. Benson, 409 U.S. 63, 67 (1972). Our conclusion that the
claims are directed to an abstract idea is buttressed by the fact that we see no
reason why the method could not be performed manually using, at most, pen
and paper. See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366,
1373 (Fed. Cir. 2011) (“[A] method that can be performed by human
thought alone is merely an abstract idea.”); id. at 1372 (“It is clear that
unpatentable mental processes are the subject matter of claim 3. All of
claim 3’s method steps can be performed in the human mind, or by a human
using a pen and paper.”). For example, a person may receive a telephone
call from a credit card company indicating that the person’s credit card has
been used in a recent transaction in a state other than the state the person
currently resides. The person may inform the credit card company that they
are not currently located within the other state and do not have any plans to
travel there in the near future. The credit card company may contact the
retailer at which the fraudulent transaction occurred and inform the retailer
that the transaction is fraudulent. Additionally, the credit card company may
make a note in a file for the person indicating that any future transactions
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occurring in the other state are likely to be fraudulent. Upon receiving a
subsequent transaction occurring in the other state, the credit card company
may determine that the transaction is fraudulent based on the note in the file.
Accordingly, we find the claims are directed to an abstract idea and
turn to the second step of the analysis to determine whether the claims recite
“significantly more.”
Regarding the second step of the analysis, Appellants contend
Assuming, arguendo, that the claims are directed to an alleged
abstract idea of a “fraud detection,” ... the claims recite
meaningful limitations that sufficiently limit the practical
application of any alleged abstract idea of a “fraud detection” and
thus do “not seek to tie up any judicial exception such that others
cannot practice it” and thus constitute patent-eligible subject
matter under 35 U.S.C. § 101.
App. Br. 10.
According to Appellants, “[t]he basis for the ‘significantly more’
prong of the test is exactly directed to the question of whether a patentee
seeks to preempt or monopolize the exception.” App. Br. 16. Appellants
argue, therefore, because the claims do not pre-empt “any and all methods
for ‘real-time alerts for fraud detection’” the claims “constitute ‘signficantly
more’ than the abstract idea. App. Br. 15-16.
We do not find Appellants’ contention persuasive. Considerations for
determining whether a claim with additional elements amounts to
“significantly more” than the judicial exception itself include improvements
to another technology or technical field (Alice Corp., 134 S. Ct. at 2359
(citing Diamond v. Diehr, 450 U.S. 175, 177-78 (1981))); adding a specific
limitation other than what is well-understood, routine and conventional in
the field, or adding unconventional steps that confine the claim to a
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particular useful application (Mayo, 132 S. Ct. at 1299, 1302); or other
meaningful limitations beyond generally linking the use of the judicial
exception to a particular technological environment (Alice Corp., 134 S. Ct.
at 2360). “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). “Where 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.
Appellants further contend the claims recite significantly more than
the abstract idea because the claims are necessarily rooted in computer
technology to overcome a problem specifically arising in the realm of
computer technology because the claims can utilize a number of different
devices in a distributed system to prevent fraudulent transactions. App.
Br. 11 (citing DDR Holdings, LLC v. Hotels.com, 773 F.3d 1245 (Fed. Cir.
2014)). Appellants argue “the recited claims clearly ‘apply the judicial
exception with, or by use of, a particular machine,’ as these claims recite the
use of a computing device, as well as additional devices.” App. Br. 14.
Appellants further argue the claimed embodiments “improve the functioning
of the computer itself’ and “[t]he system is improved over conventional
systems because conventional systems cannot provide for such up to date
risk engines and cannot prevent the occurrence of subsequent electronic
payment transaction fraud as in embodiments of the invention.” Id.
We do not find Appellants’ contention persuasive. Although the
claimed subject matter evokes the use of a computer system to facilitate
detecting fraudulent transactions, the functions performed by the computer
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system in carrying out the recited steps are conventional, well-understood,
and do not go beyond those of a general purpose computer. Therefore, the
claimed subject matter merely recites the performance of a business practice
known from the pre-Internet era, and it is not necessarily rooted in computer
technology. See OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362
(Fed. Cir. 2015) (“method of pricing a product for sale” and “apparatus for
use in electronic commerce” relate to the concept of “offer based pricing”
similar to other fundamental economic concepts found to be abstract ideas).
“[Mjerely adding computer functionality to increase the speed or efficiency
of the process does not confer patent eligibility on an otherwise abstract
idea.” See Intellectual Ventures ILLC v. Capital One Bank (USA), 792 F.3d
1363, 1370 (Fed. Cir. 2015). As such, we agree with the Examiner that the
claims do not recite “significantly more” than the abstract idea.
Because Appellants’ claims 1—4 and 10-25 are directed to a patent-
ineligible abstract idea, and do not recite something “significantly more”
under the second prong of the Alice analysis, we sustain the Examiner’s
rejection of these claims under 35 U.S.C. § 101.
Rejection of claims 1—4 and 10—25 under 35 U.S.C. § 103
Claim 1
Appellants contend the combination of Lakshminarayanan, Hillmer,
and Chen fail to teach or suggest “sending, by the computing device via the
gateway, a notification regarding potential fraud based on an analysis by the
risk engine of the data associated with the reply message,” as recited in
claim 1. App. Br. 19-21; Reply Br. 14-15.
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Regarding the disputed limitation, the Examiner finds
Figure 12 of Lakshminarayanan is labeled “Mobile Fraud
Notification” (emphasis added). Additionally, it is clear that the
Mobile Fraud Notification is sent to the Consumer Wireless
Client (Figure 12, element 1202a) through a Payment Gateway
(Figure 12, element 1208). Regarding applicant’s argument that
the notification is not sent bases on fraud analysis, this is not
correct. Figure 12, element 1222 “allows data entry by the
consumer of the amount of money that will trip an alert being
sent to the cell phone ([][86]).
Ans. 9.
Appellants argue Fakshminarayanan “does not even describe
analyzing data associated with a reply message, let alone sending subsequent
messages with information ‘regarding potential fraud’ based on an analysis
of data associated with the reply message.” App. Br. 20-21. According to
Appellants, Fakshminarayan, instead, teaches sending an alert to a consumer
wireless client. App. Br. 20 (citing Fakshminarayanan]} 93). Appellants
argue providing basic alert triggers (e.g., an amount of money that will trip
an alert) is not the same as sending a notification regarding potential fraud
based on an analysis by the risk engine of the data associated with the reply
message, as required by claim 1. Reply Br. 15. Appellants further argue the
Examiner’s reliance on the same alert message for teaching both sending “an
automated alert message” and “a notification regarding claimed fraud,” as
required by claim 1 is improper because “the ‘notification’ and the
‘automated alert message’ are two different messages sent at different times,
[so] they cannot both be taught or suggested by one consumer alert
described in Fakshminarayanan.” App. Br. 20.
We find Appellants’ arguments persuasive. Fakshminarayanan
teaches “allowing] a consumer to specify when and how they would like to
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be notified that fraud is being conducted on an account issued by an issuer to
the consumer” and that “[tjhese notifications can be sent to the consumer’s
cell phone in real time and in a variety of formats . . . thereby allowing the
consumer to receive a general fraud alert in real time with the occurrence of
the fraudulent transaction.” Lakshminarayanan 89; see also
Lakshminarayanan, Fig. 12. Figure 12 of Lakshminarayanan indicates that,
in response to receiving the fraud alert, some form of a reply is provided by
the consumer wireless client to the real-time anti-fraud detection system.
Lakshminarayanan, Fig. 12. However, the Examiner’s findings are
insufficient to show that Lakshminarayanan teaches sending a second
message (e.g., a notification regarding potential fraud) based on data
associated with the reply, as required by claim 1. The Examiner does not
find that the teachings of Hillmer and Chen cure the deficiencies in the
teachings of Lakshminarayanan. As such, the Examiner’s findings are
insufficient to show that the combination of Lakshminarayanan, Hillmer,
and Chen teaches or suggests the disputed limitation.
Accordingly, we do not sustain the Examiner’s rejection under 35
U.S.C. § 103 of claim 1; independent claim 16, which recites similar
limitations; and claims 2—4, 10-15, and 17-25, which depend from claims 1
and 16. Appellants’ arguments regarding the rejection of claims 1—4 and
10-25 raise additional issues which we do not reach because we find this
issue to be dispositive.
DECISION
We affirm the Examiner’s rejection of claims and 10-25 under 35
U.S.C. § 101.
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We reverse the Examiner’s rejection of claims and 10-25 under
35 U.S.C. § 103(a).
Since at least one rejection encompassing all claims on appeal is
affirmed, the decision of the Examiner 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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