Ex Parte McLaughlin et alDownload PDFPatent Trial and Appeal BoardAug 14, 201812071821 (P.T.A.B. Aug. 14, 2018) Copy Citation UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. FILING DATE FIRST NAMED INVENTOR 12/071,821 02/27/2008 Edward Joseph McLaughlin 22428 7590 08/16/2018 Foley & Lardner LLP 3000 K STREET N.W. SUITE 600 WASHINGTON, DC 20007-5109 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. 057898-0126 4788 EXAMINER ALI,HATEMM ART UNIT PAPER NUMBER 3691 NOTIFICATION DATE DELIVERY MODE 08/16/2018 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): ipdocketing@foley.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte EDWARD JOSEPH MCLAUGHLIN, WILLIAM TAO-YANG WONG, and BART CURTIS BOSTER Appeal2016-006535 Application 12/071,821 1 Technology Center 3600 Before HUBERT C. LORIN, BIBHU R. MOHANTY, and NINA L. MEDLOCK, Administrative Patent Judges. LORIN, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Edward Joseph McLaughlin et al. (Appellants) seek our review under 35 U.S.C. § 134(a) of the Final Rejection of claims 2-6, 8-20, and 43-57. We have jurisdiction under 35 U.S.C. § 6(b). An oral hearing was held on March 29, 2018. 1 The Appellants identify N etDeposit, LLC as the real party in interest. Appeal Br. 3. Appeal2016-006535 Application 12/071, 821 We AFFIRM. SUMMARY OF DECISION THE INVENTION Claim 49, reproduced below, is illustrative of the subject matter on appeal. 49. A computer-implemented method for processing checks, compnsmg: receiving, by one or more computers, electronically data regarding an identity of a human depositor for paper checks for a corporate entity with multiple deposit accounts; scanning, by the one or more computers, paper checks to obtain a respective image file of a face of the respective paper check and respective check data therefor; determining, by the one or more computers, electronically for the checks the corporate entity and a plurality of the deposit accounts of the corporate entity associated with the identity of the depositor; selecting, by the one or more computers, one of the deposit accounts from among the plurality of deposit accounts of the corporate entity based at least in part on one or more selected from the group: characteristics of magnetic ink character recognition (MICR) data from the face of the check, the identity of the human depositor, a time of day, a cost of the check to clear, and a check amount; determining, by the one or more computers, if the corporate entity or the deposit account selected is associated with a request to embed a corporate payee endorsement in a check image file; embedding, by the one or more computers, corporate endorsement data into the image file of a face of a check, when there is an association to a request to embed; 2 Appeal2016-006535 Application 12/071, 821 and creating, by the one or more computers, a file that includes the image file of the face of the check with the embedded endorsement data therein in a file format for clearing; sending, by one or more computers, electronically the file to an electronic portal; sending electronically different of the files to different banks of first deposit wherein one of the deposit accounts is selected from among the plurality of deposit accounts of the corporate entity using at least the identity of the human depositor. THE REJECTION The following rejection is before us for review: 1. Claims 2---6, 8-20, and 43-57 are rejected under 35 U.S.C. § 101 as being directed to judicially-excepted subject matter. ISSUE Did the Examiner err in rejecting claims 2---6, 8-20, and 43-57 under 35 U.S.C. § 101 as being directed to judicially-excepted subject matter? ANALYSIS The Appellants argued these claims as a group. See Appeal Br. 10- 27. We select claim 49 as the representative claim for this group, and the remaining claims 2---6, 8-20, 43--48, and 50-57 stand or fall with claim 49. 37 C.F.R. § 4I.37(c)(l)(iv). 3 Appeal2016-006535 Application 12/071, 821 Alice Corp. Party. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014) identifies a two-step framework for determining whether claimed subject matter is judicially-excepted from patent eligibility under § 101. According to Alice step one, "[ w ]e must first determine whether the claims at issue are directed to a patent-ineligible concept," such as an abstract idea. Alice, 134 S. Ct. at 2355. In that regard, the Examiner initially determined that [t]he claim(s) is/are directed to the abstract idea of a fundamental economic practice of processing checks, by one or more computers with an electronic portal for receiving electronic data regarding an identity of a human depositor for paper checks for a corporate entity with a plurality of deposit accounts and to embed a corporate payee endorsement in a check image file to send electronically to an electronic portal. Final Rej. 5. Later the Examiner determined that "[t]he claims are directed to an abstract idea of processing check deposits." Ans. 2. The Appellants disagree. The Appellants begin by questioning the sufficiency of the procedure the Examiner used in determining that claim 49 is directed to the abstract idea of processing check deposits. Appeal Br. 10-12. But the central concern is a legal one; that is, whether the Examiner properly characterized the concept the claimed subject matter is directed to and whether such a concept is an abstract idea. "Whether an invention recites patent-eligible subject matter under section 101 is a pure question of law [ ]. Genetic Techs. Ltd. v. Merial LLC., 818 F.3d 1369, 1373 (Fed. Cir. 2016)." In re Wang,_F. App'x._, 2018 WL 3045563, at *2 (Fed. Cir. June 20, 2018). Be that as it may, the Examiner correctly followed the Alice two-step framework to make a determination as to whether the claim is directed to an 4 Appeal2016-006535 Application 12/071, 821 abstract idea. See Final Rej. 4--7 whereat the Alice framework is applied in detail. In doing so, the Appellants were put on notice of the reasons for the rejection. See 35 U.S.C. § 132, which sets forth a more general notice requirement whereby the applicant is notified of the reasons for a rejection together with such information as may be useful in judging the propriety of continuing with prosecution of the application. See also In re Jung, 637 F.3d 1356, 1362 (Fed. Cir. 2011). The Appellants next argue that the Examiner was wrong in characterizing claim 49 as being directed to "processing checks." However, claim 49 introduces the subject matter the Appellants are claiming precisely as the Examiner has characterized it: "49. A computer- implemented method for processing checks [ ]." Cf Two-Way Media Ltd. v. Comcast Cable Communications, LLC, 874 F.3d 1329, 1340 (Fed. Cir. 2017) ("[W]e see no error here in the district court citing to the preamble in its review of whether the claims are directed to an abstract idea.") Moreover, the general description of the invention set forth in the Specification is one of processing checks. See para 2: "[i]n one embodiment, a computer-implemented method is provided for processing checks .... " The Appellants are correct that "processing checks" characterizes the concept to which claim 49 is directed at a "high level abstract idea." Appeal Br. 12. The Appellants are also correct that "it is imperative that the specific claim language be analyzed when identifying an abstract idea." Appeal Br. 13. And the Appellants are correct that "[p ]ertinent to the Step 2A "directed to" analysis is whether the claim as a whole pre-empts a judicial 5 Appeal2016-006535 Application 12/071, 821 exception to patent-eligibility, i.e., a law of nature, natural phenomenon, or abstract idea." Appeal Br. 14. However, we disagree that the Examiner discounted the claim as a whole, including all its limitations, in reaching the determination that claim 49 is directed to the "processing checks" abstract idea. The Examiner initially articulated that the claims are directed to the practice of "processing checks, by one or more computers with an electronic portal for receiving electronic data regarding an identity of a human depositor for paper checks for a corporate entity with a plurality of deposit accounts and to embed a corporate payee endorsement in a check image file to send electronically to an electronic portal." Final Rej. 5. Accordingly, the Examiner did consider the claim as a whole. That articulation described the concept at a lower level of abstraction. The later articulation ("processing check deposits") simply described the concept to which claim 49 is directed at a different, albeit, higher level of abstraction. Cf Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240-1241 (Fed. Cir. 2016) ("An abstract idea can generally be described at different levels of abstraction. As the Board has done, the claimed abstract idea could be described as generating menus on a computer, or generating a second menu from a first menu and sending the second menu to another location. It could be described in other ways, including, as indicated in the specification, taking orders from restaurant customers on a computer.") Irrespective of the level of abstraction the concept to which the claim is directed to is characterized, the claim is directed to an abstract idea. To be sure, 6 Appeal2016-006535 Application 12/071, 821 [t]he "directed to" inquiry [] cannot simply ask whether the claims involve a patent-ineligible concept, because essentially every routinely patent-eligible claim involving physical products and actions involves a law of nature and/or natural phenomenon-after all, they take place in the physical world. See Mayo, 132 S. Ct. at 1293 ("For all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.") Rather, the "directed to" inquiry applies a stage-one filter to claims, considered in light of the specification, based on whether "their character as a whole is directed to excluded subject matter." Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015); see Genetic Techs. Ltd. v. Merial L.L.C., 2016 WL 1393573, at *5 (Fed. Cir. 2016) (inquiring into "the focus of the claimed advance over the prior art"). Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). With respect to computer-enabled claimed subject matter, it can be helpful to determine whether "the claims at issue in [ ] can readily be understood as simply adding conventional computer components to well- known business practices" or not. Id. at 1338. See also Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016). In Enfzsh, for example, the court noted that "[ s ]oft ware can make non-abstract improvements to computer technology just as hardware improvements can[.]" Id. The court put the question as being "whether the focus of the claims is on [a] specific asserted improvement in computer capabilities ... or, instead, on a process that qualifies as an 'abstract idea' for which computers are invoked merely as a tool." Enfish at 1335-1336. In Enfzsh, the court found that the "plain focus of the claims" there was on "an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity." Id at 1336. 7 Appeal2016-006535 Application 12/071, 821 "In determining the eligibility of respondents' claimed process for patent protection under § 101, their claims must be considered as a whole." Diamond v. Diehr, 450 U.S. 175, 188 (1981). The question is whether the claims as a whole "focus on a specific means or method that improves the relevant technology" or are "directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery." McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314 (Fed. Cir. 2016). In this case, the claims as a whole are focused not on any improvement to computer functionality but on using generic devices in their ordinary capacity in order to practice a scheme for processing checks; that is, (a) receiving information A, (b) scanning paper checks to obtain an image, ( c) determining information B; ( d) selecting one of deposit accounts from among a plurality of deposit accounts of a corporate entity based at least in part on "sending, by one or more computers, electronically the file to an electronic portal"; and ( e) "sending electronically different of the files to different banks of first deposit wherein one of the deposit accounts is selected from among the plurality of deposit accounts of the corporate entity using at least the identity of the human depositor," where A = "an identity of a human depositor for paper checks for a corporate entity with multiple deposit accounts" and B = "the corporate entity and a plurality of the deposit accounts of the corporate entity associated with the identity of the depositor." Claim 49. The other independent claims - claims 44 and 54 - parallel this scheme. 8 Appeal2016-006535 Application 12/071, 821 The Specification supports the view that the focus of the invention is on a scheme for depositing checks, and not on any on any improvement to computer functionality. This is so because the Specification repeatedly states that the invention can be implemented via a "general purpose" computer. See e.g., para. 26. Cf In re TL! Communications LLC Patent Litigation, 823 F.3d 607, 613 (Fed. Cir. 2016) (the claims' focus "was not on an improved telephone unit or an improved server.") "The 'abstract idea' step of the inquiry calls upon us to look at the 'focus of the claimed advance over the prior art' to determine if the claim's 'character as a whole' is directed to excluded subject matter."' Affinity Labs, 838 F.3d at 1257 (quoting Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016); see also Enfzsh, 822 F.3d at 1335, quoted in Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1241 (Fed. Cir. 2016). In that regard, the Specification indicates that [ t ]he present invention contemplates both methods and systems for remotely accepting an instrument, such as a check, for deposit and electronically processing the deposit without need for physically routing the physical paper copy of the instrument. Para. 25. The Specification also indicates that "[a]s this system may be designed to process deposits for multiple customers, with different respective banks of first deposit, the system of the present invention is capable of sending communications regarding deposits to multiple banks of first deposit." Para. 73. The heart of the invention appears to be in electronically processing checks for multiple customers. Cf Intellectual Ventures I LLC v. Erie Indemnity Company, 850 F.3d 1315, 1328 (Fed. Cir. 2017) ("the heart of the claimed invention lies in creating and using an index to search for and retrieve data . . . an abstract concept."). 9 Appeal2016-006535 Application 12/071, 821 Given the focus of the claims as a whole is on using generic devices in their ordinary capacity for implementing a scheme for depositing checks as set forth in the claim and, in light of the Specification, the heart of the invention is electronically depositing checks for multiple customers, the claims are properly characterized as being "directed to," as the Examiner initially characterized it, "processing checks, by one or more computers with an electronic portal for receiving electronic data regarding an identity of a human depositor for paper checks for a corporate entity with a plurality of deposit accounts and to embed a corporate payee endorsement in a check image file to send electronically to an electronic portal." Final Rej. 5. We now tum to the question of whether said concept which the claims are "directed to" is a patent-ineligible abstract idea. "[T]he decisional mechanism courts now apply [ to help answer that question] is to examine earlier cases in which a similar or parallel descriptive nature can be seen-what prior cases were about, and which way they were decided." Amdocs (Israel) Limited v. Openet Telecom, Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016). In that regard, we see little difference between said concept and the concepts at issue in Content Extraction and Transmission LLC v. Wells Fargo Bank, Nat. Ass 'n, 776 F.3d 1343, 1347 (Fed. Cir. 2014): the abstract idea of 1) collecting data, 2) recognizing certain data within the collected data set, and 3) storing that recognized data in a memory. The concept of data collection, recognition, and storage is undisputedly well-known. Indeed, humans have always performed these functions. And banks have, for some time, reviewed checks, recognized relevant data such as the amount, account number, and identity of account holder, and stored that information in their records. 10 Appeal2016-006535 Application 12/071, 821 Notably, as in claim 49, some of the claims at issue in Content Extraction included a "scanner." See e.g., claim 15 of US 5,369,508. Several other decisions involving claims to check processing have held such claims as directed to abstract ideas, including Global Check Services, Inc. v. Electronic Payment Systems, LLC, Case No. 1:14-cv-01430-PAB-CBS (D. Col. 2016), ajfd, 2017-1062 (Mem) (Fed. Cir. 2017) and Fidelity National Information Services, Inc. v. DataTreasury Corp., 2015 WL 1967327 (PTAB April 29, 2015), ajfd, 2016 WL 5939431 (Mem) (Fed. Cir. 2016). Accordingly, we agree with the Examiner's determination that claim 49 is directed to an abstract idea. We note the Appellants direct our attention to apparatus claim 44. See Appeal Br. 13 and 24 where claim 44 is reproduced and various recited elements and functions bolded. But the "electronic portal," "association- determining electronic device," and "selecting component" cover well- known and conventional devices, not any assertedly inventive technology. The Specification supports this view. See e.g., para. 3 ("the electronic portal is a substitute check (IRD) printer"). Cf Interval Licensing LLC v. AOL, Inc.,_ F.3d. _, 2018 WL 3485608, at *6 (Fed. Cir. July 20, 2018). Other software-based claimed inventions, however, have failed to pass section 101 muster, because they did not recite any assertedly inventive technology for improving computers as tools and/or because the elements of the asserted invention were so result-based that they amounted to patenting the patent-ineligible concept itself. See also Credit Acceptance Corp. v. Westlake Services, LLC, 859 F .3d 1044, 1057 (Fed. Cir. 2017): 11 Appeal2016-006535 Application 12/071, 821 Significantly, the claims do not provide details as to any non- conventional software for enhancing the financing process. See Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1342 (Fed. Cir. 2017) (explaining that "[o]ur law demands more" than claim language that "provides only a result-oriented solution, with insufficient detail for how a computer accomplishes it"); Elec. Power Grp., 830 F.3d at 1354 [Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016)] (explaining that claims are directed to an abstract idea where they do not recite "any particular assertedly inventive technology for performing [ conventional] functions"). We now tum to the step two determination. Step two is "a search for an 'inventive concept'-i.e., an element or combination of elements that is 'sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself."' Id. (alteration in original) (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2012)). The Examiner determined, inter alia, that [ t ]he additional element( s) or combination of elements in the claim( s) other than the abstract idea per se amount(s) to no more than: (i) mere instructions to implement the idea on a computer, and/or (ii) recitation of generic computer structure that serves to perform generic computer functions that are well-understood, routine, and conventional activities previously known to the pertinent industry. Viewed as a whole, these additional claim element( s) do not provide meaningful limitation( s) to transform the abstract idea into a patent eligible application of the abstract idea such that the claim(s) amounts to significantly more than the abstract idea itself. Final Rej. 5. The Appellants disagree. According to the Appellants 12 Appeal2016-006535 Application 12/071, 821 [i]n particular, the claims are directed to an unconventional combination for improving upon prior art computer check processing systems, and particularly to solving a problem in the manual and computer check art in the context of volume corporate check processing that highlights the always-present fundamental limitation to computer check processing; that miss-keying account numbers at the front end will void whatever sophisticated processing might follow, i.e., the technical problem that computer computation is only as good as the accuracy of the data input. Appeal Br. 1 7. A principal difficulty with this argument is that it is not commensurate in scope with what is claimed. Claim 49 is not limited so as to be directed to volume corporate check processing. Nor is the subject matter claimed so that in practice it necessarily reduces miss-keying account numbers at the front end. The Appellants go through the steps of claimed scheme and conclude that "[a] result of this system is that the manual deposit slip process and/or the requirement to key in an account number are eliminated from the generic process in the context of multiple corporate accounts, thereby eliminating computer processing steps and the potential for error attendant to such corporate deposits." Appeal Br. 22-23. The Appellants also argue that "[t]his ordered combination is not in the manual or computer-implemented prior art for check processing, and it adds a dimension that cuts out the deposit slip operation and account keying and allows use as a clearinghouse for multiple banks of first deposit in a corporate deposit process. Accordingly, the claim as a whole goes substantially beyond any prior art check deposit process." App. Br. 23. But using a generic computer to do what was previously done by hand more quickly and accurately is 13 Appeal2016-006535 Application 12/071, 821 insufficient to transform the check processing scheme into an inventive concept. "[R ]elying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible." OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015). We note the Appellants' argument that "[i]f the claimed method and system is novel and non-obvious, it could not possibly monopolize a 'fundamental economic practice long prevalent in our system of commerce,' but rather inherently adds significantly more to the alleged abstract idea." App. Br. 26. However, a finding of novelty or nonobviousness does not necessarily lead to the conclusion that subject matter is patentable eligible. "Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the§ 101 inquiry." Ass 'nfor Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2117 (2013). The question in step two of the Alice framework is not whether an additional feature is novel but whether the implementation of the abstract idea involves "more than the performance of 'well-understood, routine, [and] conventional activities previously known to the industry."' Content Extraction, 77 6 F .3d at 1347--48 (quoting Alice, 134 S. Ct. at 2359). On the concern of pre-emption, "[ w ]hat matters is whether a claim threatens to subsume the full scope of a fundamental concept, and when those concerns arise, we must look for meaningful limitations that prevent the claim as a whole from covering the concept's every practical application." CLS Bank Intern. v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1281 (Fed. Cir. 2013) (Lourie, J., concurring). Here, said argued-over claim limitations simply narrow the abstract idea so that it is described at a lower 14 Appeal2016-006535 Application 12/071, 821 level of abstraction. They do not render the abstract idea to which the claim is directed any less an abstract idea. Moreover, pre-emption is not a separate test. To be clear, the proper focus is not preemption per se, for some measure of preemption is intrinsic in the statutory right granted with every patent to exclude competitors, for a limited time, from practicing the claimed invention. See 35 U.S.C. § 154. Rather, the animating concern is that claims should not be coextensive with a natural law, natural phenomenon, or abstract idea; a patent-eligible claim must include one or more substantive limitations that, in the words of the Supreme Court, add "significantly more" to the basic principle, with the result that the claim covers significantly less. See Mayo, 132 S. Ct. at 1294. Thus, broad claims do not necessarily raise § 101 preemption concerns, and seemingly narrower claims are not necessarily exempt. Id. See also Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 13 79 (Fed. Cir. 2015) ("[ w ]hile preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility."). Because we find the claimed subject matter covers patent-ineligible subject matter, the pre-emption concern is necessarily addressed. "Where a patent's claims are deemed only to disclose patent ineligible subject matter under the Mayo framework, [] preemption concerns are fully addressed and made moot." Ariosa Diagnostics, 788 F.3d at 1379. For the foregoing reasons, we agree with the Examiner's determination that claim 49 does not include an element or combination of elements sufficient to ensure that the claimed subject matter in practice amounts to significantly more than the abstract idea itself. We have considered all of the Appellants' remaining arguments and have found them unpersuasive. Accordingly, because representative 15 Appeal2016-006535 Application 12/071, 821 claim 49, and claims 2---6, 8-20, 43--48, and 50-57, which stand or fall with claim 49, are directed to an abstract idea and do not present an "inventive concept," we sustain the Examiner's determination that they are directed to ineligible subject matter under 35 U.S.C. § 101. Cf LendingTree, LLC v. Zillow, Inc., 656 F. App'x 991,997 (Fed. Cir. 2016) ("We have considered all of Lending Tree's remaining arguments and have found them unpersuasive. Accordingly, because the asserted claims of the patents in suit are directed to an abstract idea and do not present an 'inventive concept,' we hold that they are directed to ineligible subject matter under 35 U.S.C. § 101."). DECISION The decision of the Examiner to reject claims 2---6, 8-20, and 43-57 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 16 Copy with citationCopy as parenthetical citation