Ex Parte Malhotra et al

Patent Trials and Appeals Board

May 24, 2019

14183829 - (D) (P.T.A.B. May. 24, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/183,829 02/19/2014
125619 7590 05/29/2019
Mastercard International Incorporated
c/o Buckley, Maschoff & Talwalkar LLC
50 Locust A venue
New Canaan, CT 06840
FIRST NAMED INVENTOR
Sandeep Malhotra
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.
P01254-US-UTIL
(MOl.253)
CONFIRMATION NO.
8170
EXAMINER
RANKINS, WILLIAM E
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
05/29/2019 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):
martin@bmtpatent.com
szpara@bmtpatent.com
colabella@bmtpatent.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte SANDEEP MALHOTRA, RAJEN S. PRABHU,
PRASHANT SHARMA, JIAMING LI, and JIE ZHANG 1
Appeal2017-009394
Application 14/183,829
Technology Center 3600
Before BRADLEY W. BAUMEISTER, MICHAEL M. BARRY, and
JOHN R. KENNY, Administrative Patent Judges.
BAUMEISTER, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 1, 2, 4--10, 12-16, 19, and21-25. App. Br. 11.
These claims stand rejected under 35 U.S.C. § 101 as being directed to
patent-ineligible subject matter. Final Act. 6. 2
We have jurisdiction under 35 U.S.C. § 6(b). We affirm.
1 Appellants identify Mastercard International Incorporated as the real party
in interest. Appeal Brief filed March 2, 2017 ("App. Br.") 2.
2 Rather than repeat the Examiner's positions and Appellants' arguments in
their entirety, we refer to the above-mentioned Appeal Brief, as well as the
following documents, for their respective details: the Final Action mailed
October 26, 2016 ("Final Act."); the Examiner's Answer mailed April 21,
2017 ("Ans."); and the Reply Brief filed June 20, 2017 ("Reply Br.").
Appeal2017-009394
Application 14/183,829
THE INVENTION
Appellants describe the present invention as follows:
Methods and systems for providing business services
solutions for small and medium enterprises (SMEs) owned by
merchants in developed markets and in developing markets. In
some embodiments, a merchant enrolls with a merchant issuer
financial institution (FI) and then receives an SME financial
account, a suite of shared SME business service applications, and
access to a payment card acceptance service for use in setting up
and scaling their business. In an implementation, the process
includes receiving a request for an SME business platform,
validating merchant identification data, providing an SME
financial account to the merchant, transmitting an SME business
platform acceptance message, and transmitting an SME business
platform to the merchant device. The SME business platform
includes a payment card account acceptance application and at
least one business services application configured for running on
the merchant device. 3
Abstract.
Independent claim 1 is representative of the appealed claims. 4 It is
reproduced below with modified formatting for clarity and with emphasis
added to the language that recites an abstract idea:
1. A method for providing low cost, electronic business
services solutions to small and medium enterprises (SMEs)
comprising:
[i] receiving, by a merchant issuer FI computer from a
merchant device, a request for a small to medium enterprise
(SME) business plaiform, wherein the request includes merchant
identification data of a merchant;
3 We understand business platform to be a suite or collection ofbusiness-
service software applications. See, e.g., Spec. 9:4--16.
4 Appellants argue all of the claims together as a group. See App. Br. 16.
Accordingly, we select independent claim 1 as representative. See 37 C.F.R.
§ 4I.37(c)(l)(iv).
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[ii] determining, by the merchant issuer FI computer based on
the merchant identification data, that the merchant qualifies as
anSME;
[iii] determining, by the merchant issuer FI computer, that the
merchant passed a credit check based on business financial
records of the merchant;
[iv] transmitting, by the merchant issuer FI computer to a
payment processing computer, the merchant identification data;
[ v] transmitting, by the merchant issuer FI computer, an SME
financial account comprising at least one of a merchant business
credit card account and a merchant business debit card account
to the merchant device;
[ vi] transmitting, by the merchant issuer FI computer[,] an
SME business plaiform to the merchant device, wherein the SME
business plaiform is based on requirements of the SME and
comprises a low cost payment card account acceptance
application and at least one business services application,
wherein the SME business plaiform is configured for running on
the merchant device and is supported by the payment processing
computer;
[ vii] receiving, by the merchant issuer FI computer from the
merchant device, SME purchase transaction data comprising at
least customer payment card account data and transaction
amount data;
[viii] determining, by the merchant issuer FI based on the SME
purchase transaction data and the requirements of the SME,
business data comprising at least one of analytics data and
customer data related to customer trends; and
[ix] transmitting, by the merchant FI computer to the merchant
device, the business data for use in improving business
operations.
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Application 14/183,829
PRINCIPLES OF LAW
A. SECTION 101
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
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012) and
Alice. Alice, 573 U.S. at 217-18 (citing Mayo, 566 U.S. at 75-77). 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, 191
( 1981) ); "tanning, dyeing, making water-proof cloth, vulcanizing India
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rubber, smelting ores" (id. at 182 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 (citation 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. (alterations in original) (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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B. USPTO SECTION l O l GUIDANCE
The United States Patent and Trademark Office ("USPTO" or "the
Office") recently published revised guidance on the application of§ 101.
USPTO's Memorandum, 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) ("2019 Guidance"). Under the
2019 Guidance, we first look to whether the claim recites the following:
(1) any judicial exceptions, including certain groupings of abstract
ideas (i.e., mathematical concepts, certain methods of organizing
human activities such as a fundamental economic practice, or mental
processes); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a}-(c), (e}-(h)).
See 84 Fed. Reg. at 52-55.
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:
(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, conventional activities
previously known to the industry, specified at a high level of
generality, to the judicial exception.
See 84 Fed. Reg. at 56.
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ANALYSIS
Step 2A, Prong 1
The Examiner initially finds that the claims "are directed to the
abstract idea of applying for and receiving financial accounts and business
tools." Final Act. 6. The Examiner expands upon that characterization in
the Examiner's Answer, determining that the claims recite certain methods
of organizing human activities, including sales activities or behaviors. Ans.
3--4.
Appellants argue
the claims are directed to more than that, and in fact recite novel
methods and systems for providing a merchant with a small-to-
medium enterprise (SME) business platform which not only
facilitates purchase transactions, but also provides business data
(such as analytics data and/or customer data) to the owner of the
SME (i.e., the merchant) [that] can be used to grow the business.
App. Br. 17.
This argument is unpersuasive. The fact that the limitations do not
recite only abstract ideas does not negate the fact that each step of claim 1
reasonably can be characterized as reciting abstract ideas. The fact that the
claim recites more than abstract ideas is better addressed in step 2A, prong 2,
and step 2B of the of the 2019 Guidance.
As for the recited abstract ideas, themselves, claim 1 's limitation [ vi]
recites the step of transmitting information (an SME business platform).
Prior to the advent of the Internet, information often was delivered manually.
For example, a first party could transmit information contained on paper or
on a computer disk to a receiving party either by means of hand-delivery or
by mail. Such acts reasonably can be characterized as managing personal
interactions between people. Managing such personal interactions
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constitutes a particular type of organizing human activity-a category of
abstract idea that is recognized by the 2019 Guidance.
Limitation [vi] additionally recites that the particular version of the
SME business platform that is transmitted is based on various requirements.
Prior to the advent of the Internet, it was a long-known practice for a
business to make different versions of their products available and to provide
customers a particular version of the product based upon the customer's
needs. Deciding which version of an SME business platform to provide a
merchant, then, reasonably can be characterized as an evaluation or
judgment that was undertaken in the human mind. Such mental processes
are another category of an abstract idea that is recognized by the 2019
Guidance.
Each of claim 1 's other limitations recite abstract ideas, as well.
Limitations [i], [iv], [ v ], [ vii], and [ix] recite receiving or transmitting
various types of requests and data ( or jointly, "information"). Such acts of
receiving and transmitting information reasonably may be characterized
managing personal behavior or relationships or interactions between people.
As such, we agree with the Examiner that these steps reasonably can be
characterized as an abstract idea----certain methods of organizing human
activity. See Ans. 3--4.
Claim 1 's limitations [ii], [iii], and [viii] recite steps of making
various types of determinations based upon various types of information.
These steps of evaluation or judgment reasonably can be characterized as
entailing concepts that can be performed in the human mind alone or with
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the aid of pencil and paper. As such, this second set of steps reasonably can
be characterized as reciting mental processes.
The fact that the noted limitations of claim 1 reasonably can be
characterized as reciting plural types of abstract ideas-as opposed to a
single abstract idea-is of no moment. Our reviewing court has held that
combining several abstract ideas does not render the combination any less
abstract. RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1327 (Fed.
Cir. 2017) ("Adding one abstract idea ... to another abstract idea ... does
not render the claim non-abstract."); see also FairWarning IP, LLC v. Iatric
Sys., Inc., 839 F.3d 1089, 1093-94 (Fed. Cir. 2016) (patent-ineligible claims
were directed to a combination of abstract ideas).
Step 2A, Prong 2
We next inquire as to whether claim 1 integrates the recited abstract
ideas into a practical application, according to step 2A, prong 2, of the
2019 Guidance. In this regard, Appellants argue that "the elements of the
pending claims provide meaningful limitations that add more than generally
linking use of an abstract idea to generic computing devices." App. Br. 20.
Appellants further argue that "[i]n particular, the numerous limitations
within the elements of the independent claims are directed to a specific
method for providing low cost, electronic business services solutions to
SME owners that is narrower than the alleged abstract idea of 'applying for
and receiving financial accounts and business tools."' Id. Appellants
additionally argue that
[ m ]oreover, the claims solve a problem rooted in electronic
business services technology by specifying interactions between
a merchant issuer FI computer, a merchant device of an SME,
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Id.
and a payment processing computer that are manipulated to yield
a result in a manner that is different from conventional processes
and thus novel.
These arguments are unpersuasive. Mere unsupported assertions that
that the claims solve a problem rooted in electronic-business-services
technology do not constitute sufficient evidence that the claimed invention,
in fact, actually improves the functioning of a computer or solves problems
that are technological in nature. See MPEP § 2106.0S(a).
We, instead, understand the invention merely to entail improving
business processes by automating the transmission of software packages ( or
SME business platforms), and thereby making the transmitted software
easier to obtain and use. Appellants' Specification describes the invention
as follows:
The present inventors recognized that a need exists for a
complete electronic business platform available to small and
medium size business entities in developed and developing
markets that functions to help them to improve their business
processes (for example, to improve their cash register, inventory
management, payments and collections, settlement,
reconciliation, analytics, loyalty and rewards practices). In
particular, the inventors recognized that there is a need for a
Business-to-Business platform that can be easily obtained, that is
inexpensive, easy to use, and that provides opportunities for
adding value-added services which may be provided to
consumers, merchants and/or financial institutions.
Spec. 2:28-3:4.
Not only do Appellants' claims lack any recitations of improvements
to technology, the claims, likewise, do not demonstrate that the invention
entails the use of a particular machine or includes any other meaningful
limitations. See§§ 2106.0S(b), (e). To the extent that claim 1 recites
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additional elements beyond the abstract idea, these additional elements
merely are recited at a high level of generality. For example, limitations [i]
and [ vii] merely recite the additional element, "by a merchant issuer
[ financial institution (FI)] computer from a merchant device."
Limitations [ii], [iii], and [ v] merely recite "by the merchant issuer FI
computer." Limitation [ix] merely recites "by the merchant issuer FI
computer to the merchant device."
Appellants note that limitation [ vi] recites the following language:
transmitting, by the merchant issuer FI computer an SME
business plaiform to the merchant device, wherein the SME
business platform is based on requirements of the SME and
comprises a low cost payment card account acceptance
application and at least one business services application,
wherein the SME business platform is configured for running
on the merchant device and is supported by the payment
processing computer;
Reply Br. 5.
Appellants argue that this language, for example, adds meaningful
limitations that make the claim patent eligible:
[T]he transmitted SME business platform is based on the
requirements of the SME, is configured for running on the
merchant device, and is supported by a payment processing
computer. In addition, after the merchant FI computer receives
SME purchase transaction data, it determines, based on the SME
purchase transaction data and the requirements of the SME,
business data comprising at least one of analytics data and
customer data related to customer trends and then transmits to
the merchant device, the business data for use in improving
business operations. Accordingly, the focus of claim 1 as a
whole is to provide a small to medium-sized business owner with
a low-cost SME business platform ( configured for running on the
merchant's device) that provides payment acceptance options
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while at the same time provides customer information which can
be used by the SME owner to increase revenues.
Id. (citing Spec. 4:18-5:4).
This argument is unpersuasive. As just noted above in the section of
the Analysis addressing step 2A, prong 1, of the 2019 Guidance, claim 1 's
step [ vi] broadly entails an issuer (1) determining which version of a
software platform a merchant should possess and (2) transmitting that
version to the merchant. The fact that these steps are carried out more
specifically by a "merchant issuer FI computer" and that the software more
specifically is sent to a "merchant device" does not evidence that the
limitation recites a particular machine or adds any meaningful limitation.
Furthermore, the SME platform, once installed on the merchant
device, merely transmits SME purchase transaction data to the merchant
issuer FI computer (step vii). The merchant issuer FI computer then
"determin[ es] ... business data" based on the received SME purchase
transaction data ( step viii), and transmits the business data for use by the
merchant device (step ix). The SME platform, then, is merely broadly
claimed software that performs combinations of transmitting, receiving,
analyzing, and using data. This is what conventional software does.
Appellants provide insufficient evidence that transmitting information and
software applications requires a particular machine or adds meaningful
limitations. See generally App. Br.; see also generally Reply Br.
Appellants also argue, relatedly, that the claims are not directed to an
abstract idea by virtue of the fact that "the Office has tacitly admitted that
the claimed methods and systems are novel because none of the claims have
been rejected based on any prior art." App. Br. 17.
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This argument is unpersuasive. "The 'novelty' of any element or
steps in a process, or even of the process itself, is of no relevance in
determining whether the subject matter of a claim falls within the § 101
categories of possibly patentable subject matter." Diamond v. Diehr, 450
U.S. 175, 188-89 (1981). A novel and nonobvious claim directed to a
purely abstract idea is, nonetheless, patent ineligible. See Mayo, 566 U.S. at
90; see also Parker v. Flook, 437 U.S. at 594--95 (holding claims to "a new
and presumably better method for calculating alarm limit values," of
undisputed usefulness, to be directed to patent-ineligible subject matter); see
also Ass 'nfor Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576,
591 (2013) ("Groundbreaking, innovative, or even brilliant discovery does
not by itself satisfy the§ 101 inquiry.").
Appellants additionally argue that the claims are not patent ineligible
because the claims do not preempt or "tie up all applications for 'applying
for and receiving financial accounts and business tools[,]' as alleged." App.
Br. 22. This argument also is unpersuasive.
We recognize that the Supreme Court has described "the concern that
drives this exclusionary principle [i.e., the exclusion of abstract ideas from
patent eligible subject matter] as one of pre-emption." Alice, 573 U.S. at
216. However, characterizing preemption as a driving concern for patent
eligibility is not the same as characterizing preemption as the sole test for
patent eligibility.
As our reviewing court has explained: "The Supreme Court has made
clear that the principle of preemption is the basis for the judicial exceptions
to patentability" and "[ fJor this reason, questions on preemption are inherent
in and resolved by the§ 101 analysis." Ariosa Diagnostics, Inc. v.
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Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (citing Alice, 573 U.S.
at 216). Although "preemption may signal patent ineligible subject matter,
the absence of complete preemption does not demonstrate patent eligibility."
Id.
Step 2B
In relation to step 2B of the Alice inquiry and 2019 Guidance, the
Examiner determines that "analyzing customer data to improve business
operations and processing purchase transactions are well-understood, routine
and conventional in the sales field." Final Act. 7; see also MPEP
§ 2106.05(d).
Appellants do not dispute that the claimed additional computer
elements that go beyond the abstract idea, when viewed individually, were
conventional. Appellants instead imply that although the additionally
recited claim elements individually were conventional, it is how these
conventional elements are combined that adds significantly more:
just like in Bascom, 5 the inventive concept can be found in the
pending claims in the non-conventional process involving a non-
generic arrangement of known, conventional elements because
the elements recited by the independent claims . . . provide
meaningful limitations that add more than generally linking use
of an abstract idea to generic computing devices.
App. Br. 20.
Appellants' Specification also supports the Examiner's determination
that the claimed computer components, viewed individually, were well
understood, routine, and conventional. For example, Appellants'
5 Bascom Global Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341
(Fed. Cir. 2016).
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Specification indicates that the claimed merchant device could be practiced
with various types of conventional components.
[T]he merchant device 102 may be, for example, a [point-of-sale
(POS)] terminal or a merchant's mobile device (such as a
suitably programmed mobile telephone, or a personal digital
assistant (PDA) with communication capabilities, or a tablet
computer with communications capabilities). . . . If the SME' s
merchant device is a mobile device, such as a smartphone or
tablet computer or laptop computer, it may also be configured to
operate for the most part in a conventional manner, and be
configured to be programmed to function in accordance with one
or more processes described herein. For example, a micro-
business owner may utilize a smartphone to accept electronic
payments, track inventory, and to obtain and view customer
analytical data, as described herein.
Spec. 7:1-24.
Appellants' Specification also indicates that the invention can be
practiced with any conventional type of Internet connection:
One skilled in the art would understand that many different types
of secured or unsecured network connections could be utilized,
which may be based on the sensitivity of data being processed
and/or communicated, and the like. In addition, for ease of
understanding, the SME system 100 generally shows only
components that are involved in providing SME business
services and for handling one purchase transaction, but in
practice many more devices representing, for example, a
plurality of merchant devices and merchant issuer Fis may be
included.
Spec. 8:6-12.
Appellants do not persuade us that claim 1 's additional elements, even
when viewed in combination, produce a non-conventional and non-generic
arrangement of known, conventional pieces. App. Br. 20 ( citing Bascom,
827 F.3d at 1350). As we already discussed, supra, Appellants' claimed
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elements, in combination, may set forth a system that is improved relative to
the prior art by virtue of automating a previously manual process. However,
that presumed fact would not mean that the elements, as combined, are
directed to anything other than well-understood, routine, and convention
activity. Unlike the invention of Bascom, Appellants do not allege that the
elements, as combined produce a result that differs or goes beyond what one
would expect from combining the individual conventional computer
elements.
Appellants merely argue that the arrangement is not well-understood,
routine, convention by virtue of the fact that the claims recite novel subject
matter. This argument is unpersuasive because "[t]he 'novelty' of any
element or steps in a process, or even of the process itself, is of no relevance
in determining whether the subject matter of a claim falls within the § 101
categories of possibly patentable subject matter." Diehr, 450 U.S. at 188-
89.
DECISION
For the foregoing reasons, Appellants have not shown that the
Examiner erred in rejecting representative claim 1 under 35 U.S.C. § 101 as
being directed to patent-ineligible subject matter.
The Examiner's decision rejecting claims 1, 2, 4--10, 12-16, 19, and
21-25, therefore, is affirmed.
No time period for taking any subsequent action in connection with
this appeal maybe extended under 37 C.F.R. § 1.136(a)(l). See 37 C.F.R.
§ 1.136(a)(l )(iv).
AFFIRMED
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