Ex Parte Nuzzi et al

Patent Trial and Appeal Board

Jan 25, 2019

14063786 (P.T.A.B. Jan. 25, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
14/063,786 10/25/2013 Frank Anthony Nuzzi
132906 7590 01/29/2019
Haynes & Boone, LLP (70481)
2323 Victory Ave. #700
Dallas, TX 75219
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.
70481.1101 (Pl436US2) 3582
EXAMINER
CHANG, EDWARD
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
01/29/2019 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):
ipdocketing@haynesboone.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte FRANK ANTHONY NUZZI and JAMES BRETT SOWDER
Appeal2017-008580
Application 14/063,786 1
Technology Center 3600
Before JOHN A. JEFFERY, JUSTIN BUSCH, and
CARLL. SILVERMAN, Administrative Patent Judges.
SILVERMAN, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection2 of claims 1-20, which constitute all pending claims. We
have jurisdiction under 35 U.S.C. § 6(b ).
We affirm.
1 The real party in interest is identified as PA YP AL, INC. App. Br. 1.
2 Herein, we refer to the Specification, ("Spec."), filed Oct. 25, 2013; Final
Office Action, ("Final Act."), mailed Jan. 4, 2016; Appeal Brief, ("App.
Br.") filed July 1, 2016; and the Examiner's Answer, ("Ans.") mailed Nov.
23, 2016. No Reply Brief has been filed.
Appeal2017-008580
Application 14/063,786
STATEMENT OF THE CASE
The invention relates to providing contingent payments. Abstract;
Spec. ,r,r 29, 36, 39, 43, Figs. 1, 6, 7. Claim 1, reproduced below, is
exemplary of the subject matter on appeal ( emphasis added):
1. A contingent purchasing system, comprising:
a non-transitory memory storing a first user account associated
with a first user;
one or more hardware processors coupled to the non-transitory
memory and configured to read instructions from the non-transitory
memory to cause a system to perform operations comprising:
providing at least one contingent purchase graphical user
interface (GUI) over a network for display on a first user device
of the user;
receiving a contingent payment request through the
network via a selection provided in the at least one contingent
purchase GUI from the first user device that identifies a first
product and a second product that is different than the first
product and includes an instruction to automatically purchase
the second product that is identified in the contingent payment
request in direct response to determining that the first product
has been purchased;
storing the contingent payment request in the non-
transitory memory in association with the first user account;
communicating with a first account provider device over
the network to monitor the first user account of the first user
subsequent to storing the contingent payment request in the
non-transitory memory and, in response, determining that the
first product in the contingent payment request has been
purchased by the first user using the first user account; and
automatically sending an instruction to the first account
provider device through the network to transfer funds
associated with the first user account to a merchant account in
order to purchase the second product that is identified in the
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contingent payment request for the first user in direct response
to determining that the first product in the contingent payment
request has been purchased by the first user.
App. Br. 18, Claims Appendix.
THE REJECTION
Claims 1-20 are rejected under 35 U.S.C. § 101 because the claimed
invention is directed to patent ineligible subject matter. Final Act. 2-5.
PRINCIPLES OF LAW
Patent-eligible subject matter is defined in 35 U.S.C. § 101 of the
Patent Act, which recites:
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.
There are, however, three judicially created exceptions to the broad
categories of patent-eligible subject matter in 35 U.S.C. § 101: "[l]aws of
nature, natural phenomena, and abstract ideas." Alice Corp. Pty. Ltd. v. CLS
Bankint'l, 134 S. Ct. 2347, 2354 (2014); Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 566 U.S. 66, 70 (2012).
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
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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
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 191-192
("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
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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.
The PTO recently published revised guidance on the application of
§ 101. USPTO's January 7, 2019 Memorandum, 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 ("Memorandum").
Under that guidance, we first determine whether the claim recites:
( 1) 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); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a}-(c), (e}-(h)).
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:
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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
§ 2106.0S(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 Memorandum.
ANALYSIS
Appellants argue the Examiner errs in finding the claims are directed
to abstract ideas of fundamental economic practice or organizing human
activity, and, assuming the claims are directed to an abstract idea, the
Examiner errs in finding the claims do not amount to significantly more than
the abstract idea. App. Br. 6-16.
In the Final Action, the Examiner finds the claims are directed to a
fundamental economic practice and a method of organizing human
activities, and the additional elements in the claims other than the abstract
idea per se amount to no more than mere instructions to implement the idea
on a computer and 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. Final
Act. 2-3. The Examiner determines that the additional claim elements do
not provide meaningful limitations to transform the abstract idea into a
patent eligible application of the abstract idea such that the claims amount to
significantly more than the abstract idea itself. Id. at 3.
The Examiner finds:
[ a ]11 the steps in the claims are directed to a series of behavioral
activities including e.g., providing contingent purchase choices,
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Id.
Id.
receiving a selection, storing the contingent request in the
memory, monitoring the user account, and transferring funds,
which, when viewed individually and in combination, constitute
an abstract idea of certain methods of organizing human activity.
The Examiner finds:
these behavioral activities are "interpersonal activities" of
"managing relationships or transactions between people, social
activities, or behaviors," "satisfying or avoiding a legal
obligation," and "advertising, marketing, and sales activities or
behaviors," which are subcategories of activities that the
precedential courts have found to be abstract ideas under "certain
methods of organizing human activity."
The Examiner finds:
"contingent purchasing as viewed in combination of all
elements" is a "fundamental economic practice"; as stated in the
July 2015 Update, " ... phrase 'fundamental economic practices'
is used to describe concepts relating to the economy and
commerce such as agreements between people in the form of
contracts, legal obligations, and business relations ... "
Id. at 3--4.
The Examiner finds:
all the claims require no more than adding insignificant extra-solution
activity to the judicial exception, e.g., mere collecting data ("receiving
... a selection provided ... ") and performing of generic computer
functions (e.g. providing selections by GUI, storing data, transferring
funds, and transmitting/communicating information via network) that
are well-understood, routine and conventional activities previously
known to the industry. None of these foregoing functions are
distinguishable from what the courts have recognized as well-
understood, routine, and conventional generic computer functions;
rather, each of these particular functions fall under at least one of the
following computer functions that the courts already recognized as
"merely generic": performing repetitive calculations, receiving,
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processing, and storing data, electronic recordkeeping, automating
mental tasks, and receiving or transmitting data over a network, e.g.,
using the Internet to gather data.
The elements of the claims, when taken in combination, together do not
offer substantially more than the sum of the functions of the elements
when each is taken alone. That is, the elements involved in the recited
process undertake their roles in performance of their activities
according to their generic functionalities which are well-understood,
routine and conventional. The elements together execute in routinely
and conventionally accepted coordinated manners and interact with
their partner elements to achieve an overall outcome which, similarly,
is merely the combined and coordinated execution of generic computer
functionalities which are well-understood, routine and conventional
activities previously known to the industry.
Id. at 4--5.
Appellants argue the Examiner errs in finding the claims are directed
to fundamental economic practices or methods of organizing human activity
under the then applicable guidelines (2015 IEG Update3; May 2016 SME
Update. 4). App. Br. 5-9. Appellants argue, even if the claims are directed
to abstract ideas, the Examiner errs in failing to identify the additional
elements and provides only conclusory statements that the "elements" do not
amount to significantly more than the supposed abstract idea when viewed in
combination. Id. at 10-12. Appellants argue the additional elements do add
significantly more to any abstract idea presented in the claims. Id. at 11-16
(citing DDR Holdings, LLC v. Hotels.com, LP, 773 F.3d 1245, 1248 (Fed.
Cir. 2014)). Appellants additionally argue dependent claim 3 recites how
3 Available at https://www.uspto.gov/sites/default/files/documents/ieg-july-
2015-update.pdf
4 Available at https://www.uspto.gov/sites/default/files/documents/ieg-may-
2016-memo. pdf
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the system operates and dependent claim 4 is illustrative of "unconventional
actions the system may perform." Id. at 15.
In the Answer, the Examiner cites additional cases to support the
finding of the abstract idea and refers to the Final Action as explaining why
the additional elements, including the processing components viewed as a
whole were well-understood, routine, and conventional activities and not
"significantly more." Ans. 3--4 (citing Ultramercial, Inc. v. Hulu, LLC, 772
F.3d 709, No. 2010-1544 (Fed. Cir. 2014); buySAFE, Inc. v. Google, Inc., 765
F.3d 1350, 1355 (Fed. Cir. 2014); DDR Holdings, 773 F.3d 1245; Bilski, 561
U.S. 593; Wildtangent, Inc. v. Ultramercial, LLC, 134 S. Ct. 2870 (2014)).
As discussed below, we are not persuaded by Appellants' arguments.
Applying the current Guidelines (Memorandum), we agree with the
Examiner's findings and we agree claim 1 recites a "fundamental economic
practice." See Final Act 2-3; Ans. 3--4; 84 Fed. Reg. 50 at I(a), III. In
particular, we refer to the claim limitations that recite a system with one or
more processors configured to read instructions from memory to cause the
system to perform the following operations comprising: receiving a
contingent payment request that identifies a first product and a second
product that is different than the first product and includes an instruction to
automatically purchase the second product in response to determining that
the first product has been purchased; determining that the first product has
been purchased; send an instruction to transfer funds to purchase the second
product in response to determining that the first product in the contingent
payment request has been purchased. These limitations recite contingent
purchase of a second item (e.g., nails) after purchase of a first item (e.g.,
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hammer). See, e.g., Spec. ,r 29, Fig. 6. Thus, claim 1 recites a fundamental
economic concept and constitutes a judicial exception.
Next, we consider whether the claim includes additional elements that
integrate the judicial exception into a practical application. Here, although
the claim does include additional elements, such as non-transitory memory,
a graphical user interface, and a network, these are insufficient to constitute
integration into a practical application because these elements are recited at
high level of generality and the claim simply applies the judicial exception
using computer components. In particular, the additional elements do not
constitute a particular machine, but instead use a generically-recited
computer (i.e., generic computer components) to perform the abstract idea.
See 84 Fed. Reg. 50 at III A(2); MPEP § 2106.05(b); Eibel Process Co. v.
Minnesota & Ontario Paper Co., 261 U.S. 45, 64---65 (1923); MPEP §
2106.05([); Alice, 573 U.S. at 222-26; Benson, 409 U.S. 63; Credit
Acceptance Corp. v. Westlake Services, 859 F.3d 1044 (Fed. Cir. 2017).
Therefore, under the Memorandum, claim 1 is directed to an abstract
idea, and we proceed to analyze the claims under Alice, step 2. As discussed
above, in the Alice, step 2 inquiry, we determine whether there is an
inventive concept that renders the abstract idea patent eligible.
We note the introduction of a "processor of a computer system" into
the claims to implement an abstract idea is not a patentable application of the
abstract idea. Alice, 134 S. Ct. at 2357-58. The computer implementation
here is purely conventional and performs basic functions. See id. at 2359-
60. Appellants do not adequately show how the claimed steps are done
technically such that they cannot be done manually or that they are not
routine and conventional functions of a generic computer. See Versata Dev.
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Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1334 (Fed. Cir. 2015) ("the
limitations of claim 17 involve arranging a hierarchy of organizational and
product groups, storing pricing information, retrieving applicable pricing
information, sorting pricing information, eliminating less restrictive pricing
information, and determining the price. All of these limitations are well-
understood, routine, conventional activities previously known to the
industry."). See Spec. ,r,r 53---63, Figs. 9, 10.
We find no element or combination of elements recited in Appellants'
claim 1 that contains any "inventive concept" or adds anything "significantly
more" to transform the abstract concept into a patent-eligible application.
Alice, 134 S. Ct. at 2357. As discussed supra, we are not persuaded the
added computer elements transform the abstract idea into a patent eligible
invention. As our reviewing court has observed, "after Alice, there can
remain no doubt: recitation of generic computer limitations does not make
an otherwise ineligible claim patent-eligible." DDR, 773 F.3d at 1256
( citing Alice, 134 S. Ct. at 2358).
Appellants' reliance on DDR is misplaced as the recited claims do not
improve the computer or underlying technology. In DDR, the claims at
issue involved, inter alia, "web page[] displays [with] at least one active link
associated with a commerce object associated with a buying opportunity of a
selected one of a plurality of merchants" ( claim 1 of US 7,818,399). The
Federal Circuit found the claims in DDR to be patent-eligible under step two
of the Mayol Alice test because "the claimed solution is necessarily rooted in
computer technology in order to overcome a problem specifically arising in
the realm of computer networks." DDR Holdings, 773 F.3d at 1257.
Specifically, the Federal Circuit found the claims addressed the "challenge
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of retaining control over the attention of the customer in the context of the
Internet." Id. at 1258. To the contrary, Appellants' claims merely use the
internet to automate a process that would otherwise be performed manually.
The rejected claims are dissimilar to DDR's web page with an active link,
and the Specification does not support the view that the computer related
claim elements are unconventional. See Spec. ,r,r 53---63, Figs. 9, 10.
In view of the above, we sustain the rejection of claim 1, independent
claims 8 and 15 as these claims recite similar limitations to claim 1 and are
not argued separately, and dependent claims 2, 5-7, 9-14, and 16-20 as
these claims are not argued separately.
Regarding dependent claims 3 and 4, although the Examiner does not
specifically address these claims in the Final Action or Answer, we are not
persuaded by Appellants' arguments.
The claim 3 limitation of "communicating with a second account
provider device over the network to monitor a second user account of the
first user in order to determine whether the first product in the contingent
payment request has been purchased by the first user using the second user
account" (see App. Br., Claims Appendix, 19) does not constitute additional
elements that integrate the judicial exception into a practical application for
the same reasons as discussed for claim 1, supra. Additionally, this
limitation, individually and in combination, does not constitute significantly
more than the abstract idea itself for the same reasons as discussed for claim
1, supra.
Claim 4 recites:
The contingent purchasing system of claim 1, wherein the
contingent payment request identifies a desired price below which the
first product should be purchased, and the one or more hardware
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processors are configured to read instructions from the memory to
cause the system to perform operations comprising:
providing a contingent payment intent through the network to a
social network provider device for display on a user profile of a social
network that is associated with the first user, wherein the contingent
payment intent identifies the first product and an intent to purchase the
first product below the desired price, and wherein the providing the
contingent payment intent for display on the user profile results in the
contingent payment intent being displayed to a plurality of other users
of the social network. ( emphasis added). Id.
The additional elements (identifies a desired price below which the
first product be purchased, providing intent to purchase to a social network
associated with a user and displaying intent to other users) do not constitute
additional elements that integrate the judicial exception into a practical
application for the same reasons as discussed for claim 1, supra.
Additionally, the additional elements, individually and in combination, do
not constitute significantly more than the abstract idea itself as discussed for
claim 1, supra.
In view of the above, we sustain the rejection of claims 3 and 4.
DECISION
We affirm the Examiner's decision rejecting claims 1-20 under
35 U.S.C. § 101.
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
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