Ex Parte Nandy

Patent Trial and Appeal Board

Sep 10, 2018

14558582 (P.T.A.B. Sep. 10, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
14/558,582 12/02/2014 Palash Nandy
132897 7590 09/12/2018
Maschoff Brennan/ PayPal
1389 Center Drive, Ste 300
Park City, UT 84098
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.
P2395.10064US05 9648
EXAMINER
NIQUETTE, ROBERT R
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
09/12/2018 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):
docket@mabr.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte P ALASH NANDY
Appeal2017-002810
Application 14/558,582
Technology Center 3600
Before JUSTIN BUSCH, SCOTT B. HOW ARD, and SCOTT E. BAIN,
Administrative Patent Judges.
BUSCH, Administrative Patent Judge.
DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant appeals from the
Examiner's decision to reject 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.
CLAIMED SUBJECT MATTER
Appellant's invention "relates generally to the technical field of
algorithms and programming and, [specifically], to the use of genetic
algorithms and programming to optimize fraud prevention rules as embodied
in software as implemented in a computer." Spec. ,r 2. More specifically,
the claimed invention is directed to receiving a rule set used for detecting
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fraud, mapping a set of accounts identified as fraudulent to a rule set,
creating and evaluating the fitness of a rule tree based on the rule set, and
providing a new rule set to a rules engine. See Spec. ,r 64. Claims 1, 11, and
18 are independent claims. Claim 1 is illustrative and reproduced below:
1. A system comprising:
a receiver configured to receive a set of rules for use in
detecting fraudulent transactions;
a server, operatively connected to the receiver, the server
configured to:
identify a set of accounts that facilitated the detected
fraudulent transactions;
access a rule set to identify fraudulent accounts
based on a series of transactions;
map the rule set to a target set of fraudulent
accounts;
generate a plurality of rule trees, each rule tree
comprising a random combination of rules of the rule set;
for each rule tree of the plurality of rule trees,
determine a fitness of the rule tree with respect to other
rule trees based on applying the rule tree to the target set
of fraudulent accounts and tabulating the amount of
fraudulent accounts detected by the rule tree; and
provide the new rule set to a rules engine of the
server according to the fitness of the new rule set.
REJECTIONS
Claims 1-20 stand rejected under 35 U.S.C. § 101 as being directed to
ineligible subject matter. Final Act. 2-5.
ANALYSIS
We have reviewed the Examiner's rejections in light of Appellant's
arguments that the Examiner erred. In reaching this decision, we have
considered all evidence presented and all arguments Appellant made.
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Arguments Appellant could have made, but chose not to make in the Briefs,
are deemed waived. See 37 C.F.R. § 4I.37(c)(l)(iv).
The Examiner concludes claims 1-20 are directed to judicially
excepted subject matter. Final Act. 2. Appellant argues the§ 101 rejection
of claims 1-20 as a group. See App. Br. 7-14. With respect to Appellant's
arguments applicable to the group, we select claim 1 as representative. See
37 C.F.R. § 4I.37(c)(l)(iv). Appellant also separately argues the additional
limitations recited in claims 3, 8, and 13 are significantly more than the
abstract idea. App. Br. 15.
ALICE/MAYO FRAMEWORK
The Patent Act defines patent-eligible subject matter broadly:
"Whoever invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and useful improvement
thereof, may obtain a patent therefor, subject to the conditions and
requirements of this title." 35 U.S.C. § 101. There is no dispute that claims
1-20 are directed to one of these categories.
In Mayo Collaborative Services v. Prometheus Laboratories, Inc.,
566 U.S. 66, 70 (2012) and Alice Corp. Pty. Ltd. v. CLS Bank International,
134 S. Ct. 2347, 2354 (2014), the Supreme Court explained that§ 101
"contains an important implicit exception" for laws of nature, natural
phenomena, and abstract ideas. See Diamond v. Diehr, 450 U.S. 175, 185
(1981 ). In Mayo and Alice, the Court set forth a two-step analytical
framework for evaluating patent-eligible subject matter: (1) "determine
whether the claims at issue are directed to" a patent-ineligible concept, such
as an abstract idea; and, if so, (2) "consider the elements of each claim both
individually and 'as an ordered combination' to determine whether the
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additional elements" add enough to transform the "nature of the claim" into
"significantly more" than a patent-ineligible concept. Alice, 134 S. Ct.
at 2355 (quoting Mayo, 566 U.S. at 79); see Affinity Labs of Tex., LLC v.
DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016).
Step one in the Mayo/Alice framework involves looking at the "focus"
of the claims at issue and their "character as a whole." Elec. Power Grp.,
LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016). Step two
involves the search for an "inventive concept." Alice, 134 S. Ct. at 2355;
Elec. Power, 830 F.3d at 1353. For an inventive concept, "more is required
than 'well-understood, routine, conventional activity already engaged in"'
by the relevant community. Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc.,
827 F.3d 1042, 1047 (Fed. Cir. 2016) (quoting Mayo, 566 U.S. at 79--80).
STEP ONE OF ALICE FRAMEWORK
Turning to step one of the Alice framework, the Examiner finds the
claims are directed to a math-heavy algorithm for receiving data used to
detect fraudulent transactions and creating new rule sets to be used in
detecting fraudulent transactions. Final Act. 3; Ans. 3--4. The Examiner
finds the core of the claims could be done by humans using a computer as an
aid or tool. Final Act. 3. The Examiner compares the claims' use of an
algorithm for receiving, creating, and transmitting rule sets for detecting
fraud to the algorithms found ineligible by the Supreme Court. Ans. 3--4
(citing Gottschalkv. Benson, 409 U.S. 63, 64, 71-72 (1972); Parkerv.
Flook, 437 U.S. 584, 594--95 (1978); Alice, 134 S. Ct. 2347).
Appellant argues the Examiner improperly imports the term
"algorithm" into their claims and overgeneralizes the claims using too high a
level of abstraction that is untether from the actual claim language. App.
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Br. 9; Reply Br. 4--6. Appellant contends their claims are not similar to the
claims in Gottschalk, Parker, and Alice because the Examiner has not
identified a claimed concept similar to the concepts identified as abstract in
those cases. App. Br. 9; Reply Br. 7-8. Instead, Appellant argues their
claims are similar to those in Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327
(Fed. Cir. 2016) because Appellant's claims are "directed toward a specific
configuration of database storage and organization that improve the
technological field of 'the use of genetic algorithms and programming to
optimize fraud prevention rules' by" carrying out the recited steps. App.
Br. 9-10 (citing Spec. ,r,r 2, 68); See Reply Br. 10-11.
As discussed above, step one of the analysis evaluates the focus or
character of the claims as a whole. Simply because the Examiner
characterizes the claims, as a whole, as being directed to an algorithm or
process for receiving, processing, and outputting information, that does not
equate to importing a limitation into the claim. The purpose of this step is to
identify what the claims are focused on when construed under the broadest
reasonable interpretation. Similarly, characterizing the claims by
summarizing or paraphrasing what they recite does not result in describing
the claims at a level untethered from the language of the claims.
Claim 1 is directed to retrieving existing rules and accounts, mapping
the rules to the accounts, generating rule trees, and determining the fitness of
each rule tree to identify a new rule to be added to a rules engine. In other
words, claim 1 is just a high-level application of an algorithm for creating a
new rule limited to the particular use of detecting fraudulent transactions.
In fact, Appellant's own description of its claims is consistent with the
Examiner's characterization of the abstract idea encapsulated by Appellant's
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claims. For example, Appellant acknowledges the claims are directed
toward a specific configuration of database storage and organization" to
improve the use of genetic algorithms to optimize fraud prevention rules.
App. Br. 10. Appellant's Specification also supports the Examiner's
characterization of the invention, disclosing that the invention relates
"generally to the technical field of algorithms and programming ... to
optimize fraud prevention rules." Spec. ,r 2. Appellant's Specification
includes a flow chart of exemplary embodiments that discloses an
embodiment very similar to claim 1. Spec., Fig. 1 O; see Spec. ,r 64
( describing the process as receiving a rule set and target set of data,
generating rules, which the Specification discloses may be "manually
generated" by an agent or analyst using a graphical user interface,
determining new rules based on the rules' fitness).
The purpose of step 1 is to identify the abstract idea by identifying the
character of the claims as a whole, which involves summarizing or
paraphrasing the claim and, by its nature, omitting certain details of the
implementation. Notably, courts identify abstract ideas by similarly
paraphrases and characterizes the claims to identify the abstract idea. For
example, in Gottschalk the Supreme Court found claims reciting specific
steps that stored signals in particular registers and modified the data in the
registers by various steps involving shifting, masking, and adding a binary 1
to a particular position of the register were directed to the abstract idea of
converting binary-coded-decimal numerals into pure binary numerals.
Gottschalk, 409 U.S. 63.
The focus of claim 1 is on creating a new rule by receiving rules and
accounts, mapping rules to accounts, generating rule trees. Accordingly, we
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are not persuaded the Examiner's characterization of claim 1 as being
directed to an algorithm (the process or set of rules followed to ultimately
create a new rule from a given set of rules and accounts) for receiving
information (the set of rules used in fraud detection and accounts),
processing the information (identifying fraudulent accounts, mapping rule
sets to accounts, generating rule trees from the rule sets, and testing each tree
for "fitness" using), and outputting information (providing the new rule set)
is overly broad or untethered from the claim language.
The Federal Circuit has "treated collecting information, including
when limited to particular content ( which does not change its character as
information), as within the realm of abstract ideas." Elec. Power, 830 F.3d
at 1353-54 (emphasis added) (finding collecting, analyzing, and displaying
information, regardless of particular content, is an abstract idea); Content
Extraction, 776 F.3d at 1347 (finding collecting, recognizing, and storing
information is an abstract idea); Digitech, 758 F.3d at 1350 ("The method in
the '415 patent claims an abstract idea because it describes a process of
organizing information through mathematical correlations and is not tied to
a specific structure or machine" (emphasis added)); see also Internet Patents
Corp. v. Active Network, Inc., 790 F.3d 1343, 1348--49 (Fed. Cir. 2015);
OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015).
Although claim 1 limits the information to fraudulent transaction and
account data, the particular content of the data manipulated does not change
the nature of the claim. As can be seen by evaluating the limitations recited
in the above-cited cases, the Federal Circuit characterized claims that
include at least as much detail as recited in claim 1 as being "directed to"
abstract ideas.
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Contrary to Appellant's argument that the claims are directed to "a
specific configuration of database storage and organization," App. Br. 10,
claim 1 recites no specific configuration of storage or organization. Instead,
claim 1 recites a receiver that receives information and a server that
identifies, accesses, and maps certain information. Claim 1 further
generically recites generating rule trees and determining their fitness by
applying the rule trees to the accessed account information and providing the
new rule set to an engine. Nothing in claim 1 recites any particular
configuration of storage or organization. Claim 1 generically recites using
rule trees, but does not provide any details on a specific configuration or
organization.
Moreover, Appellant's Specification acknowledges that storage in the
invention may create tables, insert data into and select data from those
tables, and organize the tables in a database by known methods. Spec. ,r 68.
The Specification discloses that embodiments of the invention may use
various tree structures to organize data, but acknowledges those structures
are known and claim 1 does not recite any particular configuration for
storing or organizing information, let alone a configuration that is allegedly
an improvement in such technology. The involvement of computer
components in claim 1 does not show that the claimed invention is "an
improvement in computers as tools," like those claims found patent-eligible.
Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir.
2016).
Rather, claim 1 invokes computers merely as a tool in aid of a process
focused on an abstract idea. See BSG Tech LLC v. BuySeasons, Inc.,
No. 2017-1980, 2018 WL 3862646, at *5 (Fed. Cir. Aug. 15, 2018)
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( disagreeing with BSG "that its claims focus on a non-abstract improvement
in database functionality" by improving the quality and organization of
information in the database because the recited benefits "are not
improvements to database functionality" but instead are "benefits that flow
from performing an abstract idea in conjunction with a well-known database
structure"). Like the claims in BSG Tech, claim 1 does not relate to how
databases function, but how conventional database techniques are used to
store and organize information in a way that allegedly improves process of
creating fraud detection rules. See BSG Tech, 2018 WL 3862646, at *5.
We also agree with the Examiner that the core of claim 1 can be
performed by a human, using a computer as a tool. Final Act. 3. In
determining whether claims are directed to an abstract idea, the Federal
Circuit has considered whether the claim covers a method that human beings
can perform without a computer. See Mortgage Grader, Inc. v. First Choice
Loan Servs., 811 F.3d 1314, 1324 (Fed. Cir. 2016) (explaining "[t]he series
of steps covered by the asserted claims ... could all be performed by
humans without a computer" in concluding that the claims are directed to an
abstract idea). Here, claim 1 does not recite a specific computer-based
algorithm for making those determinations, like those processes found
patent-eligible. See McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d
1299, 1314--15 (Fed. Cir. 2016) (finding that claims involving a specific
structure of the rules for automated lip-synchronization of 3-D characters
were patent-eligible). Instead, claim 1 broadly and abstractly recites a series
of determinations that a human can make by reviewing the received data.
Appellant contends humans could not "carry out the recited 'rule
trees"' and the associated requirements and use of the trees to determine
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their fitness. App. Br. 14. Other than identifying that the recited limitations
are complex, Appellant, however, provides no persuasive reason a human
could not perform those limitations. In fact, Appellant's Specification
discloses that, in some embodiments, an agent or analyst may use a
graphical user interface to manually generate rules and provide them to the
rules engine. Spec. ,r 64.
We are also not persuaded by Appellant's argument that claim 1 does
not pre-empt all ways of performing the abstract idea because claim 1 recites
a specific implementation of the abstract idea. App. Br. 13-14. "While
preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility . . . . Where a
patent's claims are deemed only to disclose patent ineligible subject 1natter
under the 1"11ayo framework, as they are in this case, preemption concerns are
fully addressed and made moot." Ariosa Diagnostics, Inc. v. Sequenom,
Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015); see also OIP Techs., Inc. v.
Amazon.com, Inc., 788 F.3d 1359, 1362---63 (Fed. Cir. 2015) ("And [the fact]
that the claims do not preempt all price optimization or may be limited to
price optimization in the e-commerce setting do[ es] not make them any less
abstract.").
For the above reasons, we are unpersuaded the Examiner erred in
concluding the claims are directed to an abstract idea.
STEP Two OF ALICE FRAMEWORK
Next, we tum to step two of Alice to determine whether the
limitations, when considered both "individually and 'as an ordered
combination"' contain an "inventive concept" sufficient to transform the
claimed "abstract idea" into a patent-eligible application. Alice, 134 S. Ct. at
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2355-58. The Examiner concludes the particular elements (i.e., the
computer components) recited in the claims impose insufficient meaningful
limitations to transform the abstract idea into patent-eligible subject matter
because they perform routine functions (i.e., receiving and accessing
information, mapping, data analysis, and outputting information) that are
well-understood and conventional activities, amounting to no more than
implementing the abstract idea on a computer. Final Act. 3-5; Ans. 4--5,
7-8. Finally, the Examiner finds the lack of a prior art rejection does not
render the claimed subject matter eligible. Ans. 6
Appellant argues the claims are rooted in computer technology and
"overcome the technical problem of not being able to quickly and reliably
detect 'online fraud.'" App. Br. 11-12. Appellant contends the lack of a
prior art rejection under 35 U.S.C. §§ 102 and 103, by definition, shows
Appellant's claims are more than the conventional and generic arrangement
of known conventional pieces. App. Br. 12-13; Reply Br. 8-10. Appellant
also argues claim 8 's recitation of using "crossover" or "mutation" to
generate "the new rule set" and claims 3 and 13 's recitation of generating "a
set of hash tables based on the new rule set" add significantly more to the
abstract idea. App. Br. 15; Reply Br. 12.
As discussed above, notwithstanding the complexity of generating and
evaluating the rules trees, Appellant's claims can be performed by a person
using a computer as a tool. See Spec. ,r 64. Reviewing, analyzing, and
generating rules for rule sets that can be applied to transactions is not rooted
in computer technology. Using computers to perform the claimed steps may
improve the speed or efficiency at which the rules are created and/or
evaluated, but the claimed process itself ( or the system claimed to execute
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the process) is not rooted in technology any more than other claims using
computers as tools. See Alice, 134 S. Ct. at 2358 ("the mere recitation of a
generic computer cannot transform a patent-ineligible abstract idea into a
patent-eligible invention").
Appellant's argument that the alleged novelty or nonobviousness of
Appellant's claims requires a determination that Appellant's claims are more
than a conventional and generic arrangement of known conventional pieces
is not persuasive. As the Examiner explained, the lack of a prior art
rejection does not necessarily lead to the conclusion that subject matter is
patentable eligible. Ass 'n for Molecular Pathology v. Myriad Genetics, Inc.,
133 S. Ct. 2107, 2117 (2013) ("Groundbreaking, innovative, or even brilliant
discovery does not by itself satisfy the§ 101 inquiry."). "A claim for a new
abstract idea is still an abstract idea." Synopsys, Inc. v. Mentor Graphics
Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016).
Moreover, an inventive concept "cannot be furnished by the
unpatentable law of nature (or natural phenomenon or abstract idea)
itself." Genetic Techs.Ltd. v. Merial L.L. C., 818 F.3d 1369, 1376 (Fed.
Cir. 2016); see also Alice, 134 S. Ct. at 2355 (explaining that, after
determining a claim is directed to a judicial exception, "we then ask, '[w] hat
else is there in the claims before us?"') ( emphasis added, brackets in
original) (quoting Mayo, 566 U.S. at 78)). Instead, an "inventive concept" is
furnished by an element or combination of elements that is recited in the
claim in addition to the judicial exception and sufficient to ensure the claim
as a whole amounts to significantly more than the judicial exception
itself. Alice Corp., 134 S. Ct. at 2355 (citing Mayo, 566 U.S. at 72-73); see
BSG Tech, 2018 WL 3862646, at *7 (explaining that the Supreme Court in
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Alice "only assessed whether the claim limitations other than the invention's
use of the ineligible concept to which it was directed were well-understood,
routine and conventional" ( emphasis added)).
On the other hand, "[i]f a claim's only 'inventive concept' is the
application of an abstract idea using conventional and well-understood
techniques, the claim has not been transformed into a patent-eligible
application of an abstract idea." BSG Tech, 2018 WL 3862646, at *7 (citing
Berkheimer v. HP Inc., 881 F.3d 1360, 1370 (Fed. Cir. 2018)). "[I]t is
irrelevant whether [the claimed abstract idea] may have been non-routine or
unconventional as a factual matter ... narrowing or reformulating an
abstract idea does not add 'significantly more' to it." BSG Tech, 2018 WL
3 862646, at *7. Thus, the inquiry of looking at the claim as a whole to
identify an inventive concept involves analyzing the portion of the claims
that falls outside the scope of the abstract idea recited in the claims.
In this case, claim 1 's limitations that lie outside the claimed abstract
idea (i.e., the algorithm for receiving and analyzing information and
generating and transmitting a new rule set) include the recited receiver and
server. The particularly recited steps are merely steps involved in the
abstract idea that is ultimately directed to providing a new rule set to a rules
engine. As the Examiner finds, claim 1 's receiver and server are simply
generic computing components that perform the routine, well-understood,
and conventional computing functions of receiving/accessing data, mapping
data, generating data structures from that data, applying rules to data, and
providing the newly created rule to an engine. Accordingly, we agree with
the Examiner that claim 1 does not recite an inventive concept sufficient to
transform the recited abstract idea into eligible subject matter.
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Similarly, generating "a set of hash tables based on the new rule set,"
as recited in claims 3 and 13 is a conventional, well-understood, and routine
technique for storing and indexing (i.e., mapping) data sets and, moreover, is
insignificant post-solution activity. Accordingly, the additionally recited
limitations in claims 3 and 13 fail to transform the recited abstract idea into
eligible subject matter.
Claim 8 recites that "the new rule set is generated via crossover or
mutation of the respective rules." This step simply further defines how the
abstract idea generates new data from prior data. Accordingly, claim 8 does
not add significantly more to the abstract idea but, instead, further refines the
particular computing functions applied to the received/accessed data.
The fact that the recited process and systems can more efficiently
perform a human process does not improve a computer or technology, but
rather improves the process itself. See Gottschalk, 409 U.S. at 67
( explaining that the claimed steps could easily "be carried out in existing
computers long in use, no new machinery being necessary."). Accordingly,
the claimed limitations, considered both individually and together, do not
add significantly more to the abstract idea and, therefore, do not render the
subject matter patent eligible.
SUMMARY
For the above reasons, Appellant has not persuaded us the Examiner
erred in rejecting claims 1-20 under 35 U.S.C. § 101 as being directed to
merely an abstract idea, rendering the claimed subject matter ineligible.
DECISION
We affirm the Examiner's decision to reject claims 1-20 as directed to
ineligible subject matter under 35 U.S.C. § 101.
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No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l)(iv).
AFFIRMED
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