Ex Parte Lindholme et al

Patent Trial and Appeal Board

Feb 15, 2019

14579547 (P.T.A.B. Feb. 15, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/579,547 12/22/2014
24504 7590 02/20/2019
THOMAS I HORSTEMEYER, LLP
3200 WINDY HILL ROAD, SE
SUITE 1600E
ATLANTA, GA 30339
FIRST NAMED INVENTOR
Terron Roy Lindholme
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
360504-1010 5102
EXAMINER
DANZIG,REVAR
ART UNIT PAPER NUMBER
3687
NOTIFICATION DATE DELIVERY MODE
02/20/2019 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):
uspatents@tkhr.com
ozzie. liggins@tkhr.com
docketing@thomashorstemeyer.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte TERRON ROY LINDHOLME,
ROBERT MCCUTCHEN MOORE, and STEVEN PAUL ELY
Appeal 2017-011186
Application 14/579,547
Technology Center 3600
Before ST. JOHN COURTENAY III, JUSTIN BUSCH, and
NORMAN H. BEAMER, Administrative Patent Judges.
COURTENAY, Administrative Patent Judge.
DECISION ON APPEAL
Appellants 1 appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 1-20, which constitute all the claims pending in
this application. 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 Ecredable.com, LLC.
Br. 2.
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STATEMENT OF THE CASE
Embodiments of Appellants' invention relate "to a payment
verification application, executable in a computing environment, configured
to allow consumers to report positive credit transactions to major credit
bureaus." Spec. ,r 13.
Exemplary Claim
1. A non-transitory computer-readable medium embodying
program instructions executable in at least one computing device
that, when executed by the at least one computing device, cause
the at least one computing device to:
access a first web service offered by a first entity and a second
web service offered by a second entity over a network to obtain
payment history data for a user of a client device, the payment
history data comprising at least information associated with a
plurality of payments made by the user to the first entity and the
second entity, the client device being in data communication with
the at least one computing device over the network;
generate a user interface to send to the client device comprising
at least the plurality of payments for rendering a display of the
client device, wherein the plurality of payments comprise at least
a first payment made to the first entity and a second payment
made to the second entity;
receive user input comprising a selection of a subset of the
plurality of payments, the user input obtained via the user
interface rendered in the display of the client device;
authenticate the subset of the plurality of payments to verify each
of the plurality of payments in the subset satisfied an obligation
owed to the entity by the user by programmatically comparing
the payment history data associated with each of the plurality of
payments to obligation data associated with the obligation;
generate a reporting document comprising information
associated with at least the subset of the plurality of payments
authenticated, wherein the reporting document is generated in a
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predefined format in accordance with a preference of a credit
bureau stored in memory; and
provide a third web service, wherein, in response to an authorized
request for the reporting document received from the credit
bureau, provide the reporting document to the credit bureau over
the third web service.
Br. 28-29 (Claims Appendix) (Contested limitations emphasized).
Rejections
A. Claims 1-20 are rejected under 35 U.S.C. § 101, as being directed to a
judicial exception, without significantly more. Final Act. 3--4.
B. Claims 1-20 are rejected under 35 U.S.C. § 103 as being obvious over
the combined teachings and suggestions of Nathans et al. (US
2008/0110973 Al; May 15, 2008) ("Nathans"), in view of Coulter
(US 2011/0166988 Al; July 7, 2011). Final Act. 5-12.
Issues on Appeal
A. Did the Examiner err in rejecting claims 1-20 under 35 U.S.C. § 101,
as being directed to a judicial exception, without significantly more?
B. Did the Examiner err in rejecting claims 1-20 under 35 U.S.C. § 103,
as being obvious over the cited combination of Nathans and Coulter?
ANALYSIS
We have considered all of Appellants' arguments and any evidence
presented. We highlight and address specific findings and arguments for
emphasis in our analysis below.
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Rejection A under 35 US.C. § 101
Principles of Law
An invention is patent-eligible if it claims a "new and useful process,
machine, manufacture, or composition of matter." 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: "[l]aws of nature, natural phenomena, and abstract
ideas" are not patentable. E.g., Alice Corp. v. CLS Bank Int 'l, 573 U.S. 208,
216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court's two-step framework, described in Mayo
and Alice. Id. at 217-18 ( citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75-77 (2012)). In accordance with that framework,
we first determine what concept the claim is "directed to." See Alice, 573
U.S. at 219 ("On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk."); see also Bilski v. Kappas, 561 U.S. 593, 611 (2010) ("Claims 1 and 4
in petitioners' application explain the basic concept of hedging, or protecting
against risk.").
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219-20; Bilski, 561 U.S. at 611 );
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594--95 (1978)); and
mental processes ( Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 192
( 1981) ); "tanning, dyeing, making waterproof cloth, vulcanizing India
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rubber, smelting ores" (id. at 184 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267---68 (1854))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))). In Diehr, the claim
at issue recited a mathematical formula, but the Supreme Court held that "[a]
claim drawn to subject matter otherwise statutory does not become
nonstatutory simply because it uses a mathematical formula." Diehr, 450
U.S. at 176; see also id. at 191 ("We view respondents' claims as nothing
more than a process for molding rubber products and not as an attempt to
patent a mathematical formula."). Having said that, the Supreme Court also
indicated that a claim "seeking patent protection for that formula in the
abstract ... is not accorded the protection of our patent laws, ... and this
principle cannot be circumvented by attempting to limit the use of the
formula to a particular technological environment." Id. ( citing Benson and
Flook); see, e.g., id. at 187 ("It is now commonplace that an application of a
law of nature or mathematical formula to a known structure or process may
well be deserving of patent protection.").
If the claim is "directed to" an abstract idea, we tum to the second
step of the Alice and Mayo framework, where "we must examine the
elements of the claim to determine whether it contains an 'inventive
concept' sufficient to 'transform' the claimed abstract idea into a patent-
eligible application." Alice, 573 U.S. at 221 ( quotation marks omitted). "A
claim that recites an abstract idea must include 'additional features' to
ensure 'that the [claim] is more than a drafting effort designed to
monopolize the [abstract idea]."' Id. (quoting Mayo, 566 U.S. at 77).
"[M]erely requir[ing] generic computer implementation[] fail[ s] to transform
that abstract idea into a patent-eligible invention." Id.
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USPTO January 7, 2019 Revised Section 101 Memorandum
The USPTO recently published revised guidance on the application of
§ 101. See 2019 Revised Patent Subject Matter Eligibility Guidance, 84
Fed. Reg. 50 (Jan. 7, 2019) (hereinafter "Memorandum"). This new
guidance is applied in this opinion. Under the Memorandum, we first look
to whether the claim recites:
(1) any judicial exceptions, including certain groupings of abstract
ideas (i.e., mathematical concepts, mental processes, or certain methods of
organizing human activity such as a fundamental economic practice or
managing personal behavior or relationships or interactions between
people); and
(2) additional elements that integrate the judicial exception into a
practical application (see Manual of Patent Examining Procedure ("MPEP")
§§ 2106.05(a}-(c), (e}-(h)). 2 Memorandum at 51-52, 55.
A claim that integrates a judicial exception into a practical application
applies, relies on, or uses the judicial exception in a manner that imposes a
meaningful limit on the judicial exception, such that the claim is more than a
drafting effort designed to monopolize the judicial exception. Memorandum
at 54. When the judicial exception is so integrated, then the claim is not
directed to a judicial exception and is patent eligible under § 101. Id.
Only if a claim: (1) recites a judicial exception, and (2) does not
integrate that exception into a practical application, do we then evaluate
whether the claim provides an inventive concept. Memorandum at 56; Alice,
573 U.S. at 217-18. For example, we look to whether the claim:
2 All references to the MPEP are to the Ninth Edition, Revision 08-2017
(rev. Jan. 2018).
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(3) adds a specific limitation beyond the judicial exception that is not
"well-understood, routine, conventional" in the field (see MPEP
§ 2106.05(d)); or
(4) simply appends well-understood, routine, and conventional
activities previously known to the industry, specified at a high level of
generality, to the judicial exception. Memorandum at 56.
Because there is no single definition of an "abstract idea" under Alice
step 1, the PTO has recently synthesized, for purposes of clarity,
predictability, and consistency, key concepts identified by the courts as
abstract ideas to explain that the "abstract idea" exception includes the
following three groupings:
1. Mathematical concepts-mathematical relationships, mathematical
formulas or equations, mathematical calculations;
2. Mental processes-concepts performed in the human mind
(including an observation, evaluation, judgment, opinion); and
3. Certain methods of organizing human activity-fundamental
economic principles or practices (including hedging, insurance,
mitigating risk); commercial or legal interactions (including
agreements in the form of contracts; legal obligations; advertising,
marketing or sales activities or behaviors; business relations);
managing personal behavior or relationships or interactions
between people (including social activities, teaching, and
following rules or instructions).
According to the Memorandum, "claims that do not recite [subject]
matter that falls within these enumerated groupings of abstract ideas should
not be treated as reciting abstract ideas," except in rare circumstances. Even
if the claims recite any one of these three groupings of abstract ideas, these
claims are still not "directed to" a judicial exception (abstract idea), and thus
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are patent eligible, if "the claim as a whole integrates the recited judicial
exception into a practical application of that judicial exception."
Memorandum at 53.
For example, additional limitations that are indicative of "integration
into a practical application" include:
1. Improvements to the functioning of a computer, or to any other
technology or technical field-see MPEP § 2106.05(a);
2. Applying the judicial exception with, or by use of, a particular
machine-see MPEP § 2106.05(b);
3. Effecting a transformation or reduction of a particular article to
a different state or thing - see MPEP § 2106.05( c ); and
4. Applying or using the judicial exception in some other
meaningful way beyond generally linking the use of the judicial
exception to a particular technological environment, such that
the claim as a whole is more than a drafting effort designed to
monopolize the exception-see MPEP § 2106.05(e).
In contrast, additional limitations that are not indicative of
"integration into a practical application" include:
5. Adding the words "apply it" ( or an equivalent) with the judicial
exception, or mere instructions to implement an abstract idea on
a computer, or merely uses a computer as a tool to perform an
abstract idea-see MPEP § 2106.05(±);
6. Adding insignificant extra-solution activity to the judicial
exception-see MPEP § 2106.05(g); and
7. Generally linking the use of the judicial exception to a
particular technological environment or field of use - see
MPEP 2106.05(h).
See Memorandum at 54--55 ("Prong Two").
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The Examiner's Rejection A under 35 USC§ 101
The Examiner concludes:
Claim( s) 1-20 is/are directed to a method of data gathering,
presenting data, generating data, and transmitting data, which is
considered an abstract idea. The claim( s) does/ do not include
additional elements that are sufficient to amount to significantly
more than the judicial exception because verifying payment
history and sending a payment report to a credit bureau is a
basic economic practice of reporting payment history to a credit
bureau for use in determining a credit score.
Final Act. 3 ( emphasis added). 3
The Examiner finds the claims do not include additional elements that
amount to significantly more than the judicial exception, because:
the generically-recited computer elements ( e.g., network, user
interface of client device, display of client device, web services)
do not add a meaningful limitation to the underlying abstract idea
as the functions/steps/actions taken by the generic computer
elements would be routine and conventional in any computer
implementation.
Final Act. 3.
For the aforementioned reasons, the Examiner concludes that claims
1-20 are not patent eligible under 35 U.S.C. § 101.
3 "Patent eligibility under§ 101 presents an issue of law." Accenture Glob.
Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1340-41 (Fed.
Cir. 2013).
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Under the revised USPTO January 7, 2019 Section 101 policy
Memorandum we consider the following points of law:
The Judicial Exception
Memorandum (1 ): Are the claims directed to any judicial exceptions,
including certain groupings of abstract ideas (i.e., mathematical concepts,
certain methods of organizing human interactions such as a fundamental
economic practice, or mental processes)?
Regarding Memorandum ( 1 ), our view is that the Examiner did not err
in concluding that each of claims 1-20 on appeal is directed at least to the
abstract idea of "verifying payment history and sending a payment report to
a credit bureau" which is "a basic economic practice of reporting payment
history to a credit bureau for use in determining a credit score." (Final Act.
3).
Thus, we conclude Appellants' claims 1-20 are directed to a certain
method of organizing human behavior, i.e., a fundamental economic
practice. We note claim 1 gathers payment history data, authenticates the
data, formats the data into a report format preferred by a credit reporting
bureau, and provides the reporting document to the credit bureau over a web
service, which reinforces our view that the claims considered as a whole are
directed to a method of organizing human activity, i.e., a fundamental
economic practice. 4 To the extent Appellants advance arguments regarding
4 Our reviewing court has held that abstract ideas include gathering,
analyzing, organizing, and displaying information. See Electric Power
Group, 830 F.3d at 1354 (finding "gathering and analyzing information of a
specified content, then displaying the results," to be directed to an abstract
idea); Content Extraction and Transmission LLC v. Wells Fargo Bank, Nat.
Ass 'n., 776 F.3d 1343, 1345, 1347 (Fed. Cir. 2014) (finding the "claims
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Alice step one, which also fall under Memorandum (2) ( covering MPEP
§§ 2106.05(a}-(c) and (e}-(h)), we address these arguments infra.
Relevant Argued Court Decisions
We do not find persuasive Appellants' attempt to analogize the claims
to the subject claims considered by the court in McRO, Inc. v. Bandai
Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016). Br. 14.
We note the subject claim considered by the McRO court concerned a
method for automatically animating lip synchronization and facial
expressions. McRO, 837 F.3d at 1303. The McRO court concluded the
subject claims did not recite an abstract idea because the computer animation
improved the prior art through the use of rules, rather than artists, to set
morph weights and transitions between phonemes. Id. at 1308. Thus, the
claimed invention in McRO allowed for computer performance of animation
steps that previously had to be performed by human animators. Id. at 1309.
generally recite ... recognizing specific information from the extracted data,
and ... storing that information in a memory" (id. at 1345) and that the
"claims are drawn to the basic concept of data recognition and storage" (id.
at 134 7) ). Also, collecting, analyzing, organizing, and manipulating
information has been found to be a collection of abstract ideas. See Two-
Way Media Ltd. v. Comcast Cable Commc'ns, LLC., 874 F.3d 1329, 1337-
38 (Fed. Cir. 2017) (finding claims directed to the functional results of
accumulating, converting, and monitoring records manipulate data "but fail[]
to do so in a non-abstract way" (id. at 1338)); Intellectual Ventures I LLC v.
Capital One Fin. Corp., 850 F.3d 1332, 1341 (Fed. Cir. 2017) (holding that
the claimed invention is directed to the abstract idea of "collecting,
displaying, and manipulating data of particular documents"); Fair Warning
IP, LLC v. Iatric Systems, Inc., 839 F.3d 1089, 1093-95 (Fed. Cir. 2016)
(finding the claims were directed to a combination of abstract ideas
including collecting and analyzing information and utilizing rules to
determine fraud).
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The subject claims in McRO used "limited rules in a process specifically
designed to achieve an improved technological result" over "existing,
manual 3-D animation techniques." Id. at 1316 ( emphasis added).
Here, Appellants claimed invention does not apply positively recited
rules, per se. The invention under appeal merely adapts to a technological
setting ( e.g., comprising generic computing devices, networks, and/or
memory devices) the broad concept of gathering payment history data,
authenticating the data, formatting the data into a report format preferred by
a credit reporting bureau, and providing the reporting document to the credit
bureau over a web service. See independent claim 1, and independent
claims 4 and 13, which recite similar language of commensurate scope.
Thus, we agree with the Examiner (Final Act. 3) that Appellants'
claims merely implement generic computer components to perform the
recited functions that embody the abstract idea. We emphasize that McRO
(837 F.3d at 1312) also guides that "[t]he abstract idea exception prevents
patenting a result where 'it matters not by what process or machinery the
result is accomplished."' (Quoting O'Reilly v. Morse, 56 U.S. 62, 113
(1854)). (Emphasis added).
Regarding Appellants' further arguments analogizing the claims
before us on appeal to the subject claim in Enfish (Br. 14--16), we note the
Enfzsh court concluded "the claims at issue in this appeal are not directed to
an abstract idea within the meaning of Alice. Rather, they are directed to a
specific improvement to the way computers operate, embodied in the self-
referential table." Enfzsh, 822 F.3d at 1336 (emphasis added).
Thus, the Enfzsh court concluded the self-referential logical table was
a specific type of data structure designed to improve the way a computer
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stores and retrieves data in memory. Id. at 1339. Because the analysis stops
if there is no abstract idea under Alice step 1, the Enfzsh court concluded the
subject claims were patent eligible. Id.
Here, Appellants have not persuasively shown that any features of the
claimed invention improve the way the recited generic computer components
store and retrieve data in a manner analogous to that found by the court in
Enfzsh. Moreover, Appellants' claims 1-20 are silent regarding any mention
of a database, much less a self-referential database table similar to the
specific type of logical table arrangement the Enfzsh court found was
designed to improve the way a computer stores and retrieves data in
memory. See Enfish, 822 F.3d at 1336.
Therefore, we are not persuaded that Appellants' claimed invention
improves the functionality or efficiency of the recited generic computer and
network components, or otherwise changes the way the components
function, at least in the sense contemplated by the Federal Circuit in Enfzsh.
Integration of the Judicial Exception into a Practical Application
Regarding Memorandum (2), and for the reasons which follow, we
conclude that Appellants' claims 1-20 do not integrate the judicial exception
into a practical application. See MPEP §§ 2106.05(a}-(c) and (e}-(h).
Applying the revised 101 Memorandum guidance, we address these
"practical application" MPEP sections seriatim.
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MPEP § 2106.05(a) "Improvements to the Functioning of a Computer
or To Any Other Technology or Technical Field" [R-08.2017]
This section of the MPEP guides: In determining patent eligibility,
examiners should consider whether the claim "purport( s) to improve the
functioning of the computer itself' or "any other technology or technical
field ... While improvements were evaluated in Alice Corp as relevant to
the search for an inventive concept (Step 2B), several decisions of the
Federal Circuit have also evaluated this consideration when determining
whether a claim was directed to an abstract idea (Step 2A)."
The MPEP instructs: "Thus, an examiner may evaluate whether a
claim contains an improvement to the functioning of a computer or to any
other technology or technical field at Step 2A or Step 2B, as well as when
considering whether the claim has such self-evident eligibility that it
qualifies for the streamlined analysis." MPEP § 2106.05(a) ( emphasis
added).
Here, we consider the question of whether the claims are directed to a
specific improvement in the capabilities of the computing devices, or,
instead, "a process that qualifies as an 'abstract idea' for which computers
are invoked merely as a tool." Enfzsh, 822 F.3d at 1336.
Appellants recite the language of claim 1 (Br. 17-18), and urge:
Thus, claim 1 and the supporting disclosure fully supports the
finding that claim 1, which describes providing a web service for
an individual user to programmatically coalesce, authenticate,
and verify payments selected by the individual for programmatic
transmission and reporting, results in an improvement in
computational efficiency as data collected by a credit bureau is
coalesced, organized, and received programmatically through
the web service, as well as/unctions differently than conventional
approaches ( e.g., manual credit reporting and manual credit
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review). As such, the analysis in Enfzsh can be applied to the
facts in this case to arrive at the same conclusion as in Enfzsh,
particularly that the claimed invention is not directed to an
abstract idea because the allocation of products functions
differently in this case as compared to conventional approaches.
Br. 18-19.
We disagree with Appellants, because we find no language recited in
claim 1 ( or claims 2-20) that specifically improves the generic computer
device, network, or memory. We have addressed supra why we conclude
the guidance of Enfzsh is inapplicable to the claims before us on appeal.
Appellants further contend:
in the context of the McRO decision, the November 2016
Memorandum recognized that an "'improvement in computer-
related technology' is not limited to improvements in the
operation of a computer or a computer network per se, but may
also be claimed as a set of 'rules' (basically mathematical
relationships) that improve computer-related technology."
November 2016 Memorandum at p. 2. Thus, the Office Action
is incorrect to conclude that the claimed invention must, for some
reason, recite "improvements to 'technology."' Office Action at
p. 16.
Br. 21-22 (emphasis added).
We have addressed supra why we conclude McRO is inapplicable to
the claims before us on appeal. In reviewing the record, we find the claims
on appeal are silent regarding specific limitations directed to an improved
computer system, processor, memory, network, database, or Internet.
Therefore, we find Appellants' claimed invention does not provide a
solution "necessarily rooted in computer technology in order to overcome a
problem specifically arising in the realm of computer networks," such as
considered by the court in DDR Holdings LLC v. Hotels.com, L.P., 773 F.3d
1245, 1257 (Fed. Cir. 2014) (emphasis added).
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Further regarding the use of the recited generic computer, processor(s)
and database, the Supreme Court has held "the mere recitation of a generic
computer cannot transform a patent-ineligible abstract idea into a patent-
eligible invention." Alice, 134 S. Ct. at 2358. Our reviewing court provides
additional guidance: See FairWarning, 839 F.3d at 1096 ("[T]he use of
generic computer elements like a microprocessor or user interface do not
alone transform an otherwise abstract idea into patent-eligible subject
matter."); OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1363
(Fed. Cir. 2015) (claims reciting, inter alia, sending messages over a
network, gathering statistics, using a computerized system to automatically
determine an estimated outcome, and presenting offers to potential
customers found to merely recite "'well-understood, routine conventional
activities'" by either requiring conventional computer activities or routine
data-gathering steps (internal citation omitted)); see also Elec. Power Grp.,
830 F.3d at 1355 ("We have repeatedly held that such invocations of
computers and networks that are not even arguably inventive are
'insufficient to pass the test of an inventive concept in the application' of an
abstract idea." (quoting buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1353,
1355 (Fed. Cir. 2014))); Intellectual Ventures I LLC, 850 F.3d at 1341
("Rather, the claims recite both a generic computer element-a processor-
and a series of generic computer 'components' that merely restate their
individual functions . . . . That is to say, they merely describe the functions
of the abstract idea itself, without particularity. This is simply not enough
under step two.").
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MPEP § 2106.05(b) Particular Machine [R-08.2017], and
MPEP § 2106.05(c) Particular Transformation [R-08.2017]
At the outset, we note that the machine-or-transformation test is only
applicable to method (process) claims 13-20 on appeal.
Section 2106.05(c) of the MPEP guides: "Another consideration
when determining whether a claim recites significantly more is whether the
claim effects a transformation or reduction of a particular article to a
different state or thing." "[T]ransformation and reduction of an article 'to a
different state or thing' is the clue to patentability of a process claim that
does not include particular machines." Bilski v. Kappas, 561 U.S. 593, 658
(2010) (quoting Gottschalk v. Benson, 409 U.S. 63, 70, 175 (1972)). If such
a transformation exists, the claims are likely to be significantly more than
any recited judicial exception. Bilski emphasizes that although the
transformation of an article is an important clue, it is not a stand-alone test
for eligibility. MPEP § 2106.05(c).
Regarding Memorandum (2), we note Appellants advance no
arguments in the Briefs that are directed to the Bilski machine-or-
transformation test, which would only be applicable to the method (process)
claims on appeal.
To the extent Appellants may contend that claim 1 transforms data by
generating the reporting document in "a predefined format in accordance
with a preference of a credit bureau stored in memory" (Claim 1 ), our
reviewing court guides that "[ t ]he mere manipulation or reorganization of
data, however, does not satisfy the transformation prong." CyberSource
Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011)
( emphasis added). Therefore, we conclude method claim 1 fails to satisfy
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the transformation prong of the Bilski machine-or-transformation test. See
MPEP § 2106.05(c) "Particular Transformation."
Nor do Appellants argue that the method claims on appeal are tied to a
particular machine. See MPEP § 2106.05(b) "Particular Machine."
Arguments not made are waived. See 37 C.F.R. § 4I.37(c)(l)(iv).
MPEP § 2106.05(e) Other Meaningful Limitations [R-08.2017]
This section of the MPEP guides:
Diamond v. Diehr provides an example of a claim that recited
meaningful limitations beyond generally linking the use of the
judicial exception to a particular technological environment. 450
U.S. 175, 209 USPQ 1 (1981). In Diehr, the claim was directed
to the use of the Arrhenius equation ( an abstract idea or law of
nature) in an automated process for operating a rubber-molding
press. 450 U.S. at 177-78, 209 USPQ at 4. The Court evaluated
additional elements such as the steps of installing rubber in a
press, closing the mold, constantly measuring the temperature in
the mold, and automatically opening the press at the proper time,
and found them to be meaningful because they sufficiently
limited the use of the mathematical equation to the practical
application of molding rubber products. 450 U.S. at 184, 187,
209 USPQ at 7, 8. In contrast, the claims in Alice Corp. v. CLS
Bank International did not meaningfully limit the abstract idea
of mitigating settlement risk. 573 U.S._, 134 S. Ct. 2347, 110
USPQ2d 1976 (2014). In particular, the Court concluded that the
additional elements such as the data processing system and
communications controllers recited in the system claims did not
meaningfully limit the abstract idea because they merely linked
the use of the abstract idea to a particular technological
environment (i.e., "implementation via computers") or were
well-understood, routine, conventional activity.
MPEP § 2106.05(e).
Applying this reasoning here, and for essentially the same reasons set
forth by the Examiner (Ans. 3), we conclude Appellants' claims do not add
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meaningful limitations beyond generally linking the use of the judicial
exception to a particular technological environment. Thus, we agree with
the Examiner's legal conclusion "the generically-recited computer elements
( e.g., network, user interface of client device, display of client device, web
services) do not add a meaningful limitation to the underlying abstract idea."
Final Act. 3 ( emphasis added).
MPEP §2106.05(!) Mere Instructions To Apply An Exception [R-
08.2017]
For the reasons discussed above, we conclude Appellants' claims
invoke generic computer components merely as a tool in which the computer
instructions apply the judicial exception, which we conclude is a certain
method of organizing human behavior, i.e., a fundamental economic practice
"because verifying payment history and sending a payment report to a credit
bureau is a basic economic practice," as correctly concluded by the
Examiner. Final Act. 3.
MPEP § 2106.05(g) Insignificant Extra-Solution Activity [R-08.2017]
We conclude that obtaining payment history data, authenticating the
data, formatting the data (into a report format preferred by a credit reporting
bureau), and providing the reporting document to the credit bureau over a
web service ( claim 1) begins with a step of data gathering. Data gathering,
as performed by the steps or function in Appellants' claims, is a classic
example of insignificant extra-solution activity. See, e.g., In re Bilski, 545
F.3d 943, 963 (Fed. Cir. 2008) (en bane), aff'd sub nom, Bilski v. Kappas,
561 U.S. 593 (2010).
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The Supreme Court guides that the "prohibition against patenting
abstract ideas 'cannot be circumvented by attempting to limit the use of the
formula to a particular technological environment' or [by] adding
'insignificant postsolution activity."' Bilski, 561 U.S. at 610-11 (quoting
Diehr, 450 U.S. at 191-92). On this record, we are of the view that
Appellants' claims do not operate the recited generic computer components
in a manner to achieve an improvement in computer functionality.
MPEP § 2106.05(h) Field of Use and Technological Environment [R-
08.2017]
"[T]he Supreme Court has stated that, even if a claim does not wholly
preempt an abstract idea, it still will not be limited meaningfully if it
contains only insignificant or token pre- or post-solution activity-such as
identifying a relevant audience, a category of use,field of use, or
technological environment." Ultramercial Inc. v. Hulu LLC, 722 F.3d 1335,
1346 (Fed. Cir. 2013) (citations omitted) (emphasis added).
Appellants contend:
the Office Action does not even consider the lack of the
preemption of the alleged abstract idea. The "absence of
preemption" in this instance can lead to a finding that "the
claimed invention is not directed to a judicial exception." Id. at
p. 3. In this case, the record demonstrates that the alleged
abstract idea of "reporting payment history to a credit bureau for
use in determining a credit score" can be performed in any
number of ways (i.e., claim 1 does not pre-empt all ways) besides
those recited in claim 1. Indeed, "reporting payment history to a
credit bureau for use in determining a credit score," such as those
shown in Nathans and Coulter, each of which describes
significantly less than the claimed invention.
Br. 22 ( emphasis added).
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In response, the Examiner further explains the basis for the rejection:
The use of a user to select a subset of the gathered data for
authentication fails to define the scope of the claims beyond the
basic collection and comparison. How the payment history data
is collected and authenticated is only defined in the broadest
terms using generic computers. As such, the applicant seeks to
preempt the field by claiming generic gathering of payment
history data and authenticating the payments by
programmatically comparing payment history data to obligation
data.
Ans. 15 ( emphasis added).
Our reviewing court provides applicable guidance: "[Q]uestions on
preemption are inherent in and resolved by the § 101 analysis," and,
although "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); cf OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362---63
(Fed. Cir. 2015) ("[T]hat 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.").
For the reasons discussed above, we conclude Appellants' claims do
not include additional elements that integrate the judicial exception into
a practical application (see MPEP §§ 2106.05(a}-(c), (e}-(h), as discussed
above).
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The Inventive Concept
Only if a claim ( 1) recites a judicial exception, and (2) does not
integrate that exception into a practical application, do we then look to
whether the claim:
Memorandum (3), adds a specific limitation beyond the judicial
exception that is not "well-understood, routine, conventional" in the field
(see MPEP § 2106.05(d)); or
Memorandum ( 4), simply appends well-understood, routine,
conventional activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
Here, the Examiner has provided in the record a list of computer
functions and a corresponding list of case authorities to support the findings
that the listed computer functions are well-understood, routine, and
conventional (WURC) functions. See Ans. 16. We note the Examiner's
Final Action (July 1, 2016) was mailed well before Berkheimer v. HP Inc.
(881 F.3d 1360 (Fed. Cir. 2018)) was decided on February 8, 2018.
Nevertheless, we find the Examiner presciently provided factual
evidence that sufficiently complies with the USPTO April 19, 2018
Berkheimer Memorandum, entitled "'Changes in Examination Procedure
Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility
Decision (Berkheimer v. HP, Inc.)"' (hereinafter "Berkheimer
Memorandum"). See Berkheimer Memorandum, fact type 2: "A citation to
one or more of the court decisions discussed in MPEP § 2106.05( d)(II) as
noting the well-understood, routine, conventional nature of the additional
element(s)." Berkheimer Memorandum 4.
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We note the Examiner refers to the Examiner training guidance: "July
2015 Update: Subject Matter Eligibility." Ans. 16. In particular, footnotes
20-25 refer to the particular case authorities cited in the July 2015 training
material. See Ans. 16.
In reviewing the record, we recognize that Appellants have not had
the opportunity to argue Berkheimer, which was decided by the Federal
Circuit on February 8, 2018. Because Berkheimer (881 F.3d at 1369) and
the USPTO Berkheimer Memorandum are intervening authorities,
Appellants will be permitted to argue any new issues related to Berkheimer
in a Request for Rehearing, under our procedural rule. See 37 C.F.R.
§ 4I.52(a)(2) ("Appellant may present a new argument based upon a recent
relevant decision of either the Board or a Federal Court.").
However, on the record before us, Appellants have not shown that the
claims on appeal add a specific limitation beyond the judicial exception that
is not "well-understood, routine, and conventional" in the field (see MPEP
§ 2106.05(d)). Nor have Appellants filed a Reply Brief to rebut the
Examiner's responsive explanations and findings in the Answer.
In light of the foregoing, we conclude, under the USPTO Revised 101
Guidance (Memorandum), that each of Appellants' claims 1-20, considered
as a whole, is directed to a patent-ineligible abstract idea that is not
integrated into a practical application.
Accordingly, for the reasons discussed above, we sustain the
Examiner's rejection A under 35 U.S.C. § 101 of claims 1-20.5
5 To the extent Appellants have not advanced separate, substantive
arguments for particular claims, or other issues, such arguments are waived.
See 37 C.F.R. § 4I.37(c)(l)(iv).
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Rejection B under 35 USC§ 103(a)
GROUPING OF CLAIMS
Based upon Appellants' arguments (Br. 23-26) and our discretion
under 37 C.F.R. § 4I.37(c)(l)(iv), we decide the appeal of obviousness
Rejection B of claims 1-20 on the basis of representative claim 1.
Rejection B of Independent Claim 1 under 35 USC§ 103(a)
Issues: Under 35 U.S.C. § 103(a), did the Examiner err by finding the
cited combination of Nathans and Coulter would have taught or suggested
the contested limitation:
authenticate the subset of the plurality of payments to verify each
of the plurality of payments in the subset satisfied an obligation
owed to the entity by the user by programmatically comparing
the payment history data associated with each of the plurality of
payments to obligation data associated with the obligation[,]
within the meaning of representative claim 1 ?6 (emphasis added).
6 We give the contested claim limitations the broadest reasonable
interpretation ("BRI") consistent with the Specification. See In re Morris,
127 F.3d 1048, 1054 (Fed. Cir. 1997); see, e.g., Spec. ,r 78 ("It should be
emphasized that the above-described embodiments of the present disclosure
are merely possible examples of implementations set forth for a clear
understanding of the principles of the disclosure. Many variations and
modifications may be made to the above-described embodiment(s) without
departing substantially from the spirit and principles of the disclosure. All
such modifications and variations are intended to be included herein within
the scope of this disclosure and protected by the following claims.")
( emphasis added).
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We have reviewed Appellants' arguments in the Appeal Brief, the
Examiner's obviousness rejections, and the Examiner's response to
Appellants' arguments. Appellants do not proffer sufficient argument or
evidence for us to find error in the Examiner's findings. See Ex parte Frye,
94 USPQ2d 1072, 1075 (BPAI 2010) (precedential). For at least the reasons
discussed below, we agree with and adopt the Examiner's underlying factual
findings and legal conclusions of obviousness, as set forth in the Final
Action (5-9) and Answer (17-18).
The Examiner finds Nathans, paragraphs 32-34, as modified by the
cited features of Coulter, teaches or suggests the contested limitation of
claim 1. See Final Act. 6-7. Turning to the evidence, Nathans describes
verification, which we find teaches or suggests the claimed authorization:
An indication of whether or not the payments have been verified
is received from the verifier at step 216. In some embodiments,
the verification is performed through contact with the payee. In
other embodiments, the verification is performed only using
paper documentation. If the indication from the verifier indicates
that the payments have not been verified at step 218, the payment
data repository terminal 120 transmits a message indicating the
same to the user at step 219 and the process ends.
Nathans ,r 33 (emphasis added).
However, Appellants disagree with the Examiner's findings:
To allegedly verify a payment, Nathans states that a "request
along with any supporting documentation received from the user
is then transmitted to a verifier via the verifier terminal 130 at
step 212. In some embodiments, the verifier must be a member
of the NCRA or be supervised by such a member, or an FCRA-
certified specialist." Id. at [0032]. As such, Nathans discusses
using a manual verification of a payment, for example, "through
contact with the payee" or "only using paper documentation."
Nathans does not show or suggest, however, ''programmatically
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comparing payment data associated with each of the plurality of
payments to obligation data associated with the obligation," as
recited in claim 1.
Br. 25 ( emphasis added).
In response, the Examiner relies on paragraphs 112, 109, 123, 128,
133-34, and 141 of Coulter to teach or suggest the claimed authentication by
"programmatically comparing the payment history data associated with each
of the plurality of payments to obligation data associated with the
obligation." Claim 1. See Final Act. 7-8.
Strongly supporting the Examiner's findings, we note Coulter
particularly describes:
System provider 102 after receiving a dispute (or a request to
correct credit information) from a user, and if allowed by creditor
114A, accesses the creditor 114A database directly. Creditor
114A stored data is analyzed and compared with the user
data/request. Based on the analysis, system provider 102
concludes whether the stored data should be corrected or the
stored data is accurate. System provider 102 notifies both the
creditor 114A and user 104 when data needs to be changed
and/or if data is accurate (i.e., a particular loan instrument is
valid).
Coulter ,r 134 (emphasis added).
See also Coulter ,r 141 (describing system provider 102): "FIG. 4B
shows a block diagram of the system provider 102 used in the system 100 of
FIG. 4A. The system provider 102 comprises a user interface 130 (or a
receiving module), a processing module 140, and a communication
module 150."
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We emphasize that the Examiner's ultimate legal conclusion of
obviousness is based upon the combined teachings of the cited references.
Moreover, "'the question under 35 USC 103 is not merely what the
references expressly teach but what they would have suggested to one of
ordinary skill in the art at the time the invention was made."' Merck & Co.
v. Biocraft Labs., Inc., 874 F.2d 804, 807 (Fed. Cir. 1989) (quoting In re
Lamberti, 545 F.2d 747,750 (CCPA 1976)). (Emphasis added); see also
MPEP § 2123.
On this record, we find a preponderance of the evidence supports the
Examiner's underlying factual findings and ultimate legal conclusion of
obviousness regarding the contested authentication function or step, because
we find the payment information verification, as described in at least
paragraph 33 of Nathans, in combination with the cited paragraphs of
Coulter (see Final Act. 7-9), teaches or suggests the contested function or
step of authentication. See Representative claim 1.
For at least the aforementioned reasons, we are not persuaded the
Examiner erred regarding the contested limitation of representative claim 1,
as rejected under rejection B. We additionally note that Appellants have not
filed a Reply Brief to rebut the Examiner's responsive explanations and
findings in the Answer.
Accordingly, we sustain the Examiner's obviousness Rejection B of
claim 1, and Rejection B of grouped claims 2-20, not argued separately. See
supra, "GROUPING OF CLAIMS."
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CONCLUSIONS
The Examiner did not err in rejecting claims 1-20 under 35 U.S.C.
§ 101, as being directed to a judicial exception, without significantly more.
The Examiner did not err in rejecting claims 1-20 under 35 U.S.C.
§ 103, as being obvious over the cited combination of Nathans and Coulter.
DECISION
We affirm the Examiner's decision rejecting claims 1-20 under
35 U.S.C. § 101.
We affirm the Examiner's decision rejecting claims 1-20 under
35 U.S.C. § 103.
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). See
37 C.F.R. § 4I.50(f).
AFFIRMED
28