Ex Parte Phillips

Patent Trial and Appeal Board

Aug 23, 2017

14530475 (P.T.A.B. Aug. 23, 2017)

United States Patent and Trademark Office
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
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
14/530,475 10/31/2014 ANDREW M. PHILLIPS CARDF-P3 874.4 6236
21259 7590 08/25/2017
J. MARK HOLLAND AND ASSOCIATES
J. Mark Holland
19800 MAC ARTHUR BLVD
SUITE 300
IRVINE, CA 92612
EXAMINER
CHEIN, ALLEN C
ART UNIT PAPER NUMBER
3627
NOTIFICATION DATE DELIVERY MODE
08/25/2017 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):
OFFICE@JMHLAW.COM
mholland @j mhlaw. com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ANDREW M. PHILLIPS
Appeal 2016-000713
Application 14/530,4751
Technology Center 3600
Before HUBERT C. LORIN, NINA L. MEDLOCK, and
BRUCE T. WIEDER, Administrative Patent Judges.
WIEDER, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35U.S.C. § 134 from the
Examiner’s final rejection of claims 1—10. We have jurisdiction under
35 U.S.C. § 6(b).
We AFFIRM.
1 According to Appellant, the real parties in interest are Andrew M. Phillips
and Cardflex, Inc. (Appeal Br. 3.)
Appeal 2016-000713
Application 14/530,475
CLAIMED SUBJECT MATTER
Appellant’s claimed invention relates to “streamlining] the
disbursement process for service establishments that regularly pay gratuities
to employees.” (Spec. 2,11. 1—2.)
Claims 1 and 2 are the independent claims on appeal. Claim 1 is
illustrative. It recites:
1. A method of administering and distributing tips received
from customers, including:
a. providing a re-loadable debit card to a person who
receives tips;
b. using the POS device to enter information regarding the
tips received by that person;
c. periodically processing the information to determine
what tip(s) have been earned by what person(s);
d. uploading that calculated tip amount to the person’s
debit card, bank account or other receptacle.
REJECTIONS
Claims 1—10 are rejected under 35U.S.C. § 101 as directed to non-
statutory subject matter.
Claims 1—10 are rejected under 35 U.S.C. § 103(a) as unpatentable in
view of Kessler (US 2013/0103579 Al, pub. Apr. 25, 2013) and Marshall
(US 2008/0065396 Al, pub. Mar. 13, 2008).
ANALYSIS
The §101 rejection
In 2014, the Supreme Court decided Alice Corp. Pty. Ltd. v. CIS Bank
Int’l, 134 S. Ct. 2347 (2014). Alice applies a two-part framework, earlier set
out in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66
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(2012), “for distinguishing patents that claim laws of nature, natural
phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts.” Alice, 134 S. Ct. at 2355.
Under the two-part framework, it must first be determined if “the
claims at issue are directed to a patent-ineligible concept.” Id. If the claims
are determined to be directed to a patent-ineligible concept, then the second
part of the framework is applied to determine if “the elements of the
claim . . . contain[] an ‘inventive concept’ sufficient to ‘transform’ the
claimed abstract idea into a patent-eligible application.” Id. at 2357 (citing
Mayo, 566 U.S. at 72-73, 79).
With regard to part one in the Alice framework, the Examiner
determines that “[c]laim(s) 1—10 is/are directed to steps for managing and
distributing gratuities, a fundamental economic practice,” i.e., that the claims
are directed to an abstract idea. (Final Action 4; see also Answer 2.)
Appellant disagrees and argues that the “claims are directed to
specific physical elements and structures and processes by which . . .
management and distribution [of gratuities] occurs.” (Appeal Br. 7.)
Appellant specifically argues that the “claimed method (Claim 1) and
apparatus (Claim 2) require the following physical elements: 1. a re­
loadable debit card, and 2. a POS (“point-of-sale”) device.” (Id. at 9.)
The Examiner, however, finds that “the debit card is a conventional
element used in a conventional manner” and that “[t]he ‘physical’ element of
the POS is merely a conventional computing device being used in a
conventional manner. ” (Answer 3.)
Under part one of the Alice framework, we “look at the ‘focus of the
claimed advance over the prior art’ to determine if the claim’s ‘character as a
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whole’ is directed to excluded subject matter.” Affinity Labs of Texas, LLC
v. DirectTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) (quoting Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016)).
Thus, although we consider the claim as a whole, the “directed to” inquiry
focuses on the claim’s “character as a whole.”
In this case, the Specification discloses that the invention is directed to
“the disbursement process for service establishments that regularly pay
gratuities to employees.” (Spec. 2,11. 1—2.) The Specification further
discloses “that the invention can be used to automate the tip pay-out process
between Point-of-Service/Sale (POS) systems 20 (commonly used in
restaurants and other businesses whose employees receive tips) and
employees/staff who interact with the POS 20.” {Id. 4,11. 18—20.) Claim 1,
in particular, recites the steps of “providing a re-loadable debit card,” “using
the POS device to enter information,” “processing the information to
determine [tip amounts],” and “uploading that calculated tip amount to the
person’s debit card, bank account, or other receptacle.” (See Claim 1.)
The Federal Circuit has recognized that claims directed to
“1) collecting data, 2) recognizing certain data within the collected data set,
and 3) storing that recognized data in memory” are drawn to an abstract
idea. Content Extraction and Transmission LLC v. Wells Fargo Bank, Nat’l
Assn, 776 F.3d 1343, 1347 (Fed. Cir. 2014). The Federal Circuit explained
that “[t]he concept of data collection, recognition, and storage is
undisputedly well-known. . . . 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.” Id.
In this case, the focus of the claims is to collecting data,
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Application 14/530,475
recognizing/processing tip amounts, and storing/uploading the tip
information in the appropriate account records (e.g., debit card or bank
account). Therefore, we are not persuaded that the Examiner erred in
determining that the claims are directed to an abstract idea, i.e., “managing
and distributing gratuities.” (See Final Action 4.)
We next look to part two of the Alice framework, which has been
described “as 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.’” Alice, 134 S. Ct. at 2355 (citing Mayo, 566 U.S. at 72—73).
“The Court in Alice made clear that a claim directed to an abstract
idea does not move into section 101 eligibility territory by ‘merely
requiring] generic computer implementation.’ Alice, 134 S. Ct. at 2357.”
buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1354 (Fed. Cir. 2014.) In this
case, Appellant acknowledges that the recited “physical elements” are
generic. (See Appeal Br. 9.) Specifically, Appellant notes that “[w]e all use
debit cards” and “POS devices are virtually ubiquitous.” (Id. ) Appellant
does not argue that the “at least one computer” recited in claim 2 requires
anything other than a generic computer.
Taking the claim elements separately, the function performed by the
computer system (including the POS device) at each step of the process is
purely conventional. Using a computer to collect data, determine values,
and store the values in the appropriate account records are basic computer
functions. In other words, each step does no more than require a generic
computer to perform generic computer functions.
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Considered as an ordered combination, the components of Appellant’s
method and apparatus add nothing that is not already present when the steps
are considered separately. Viewed as a whole, claim 1 simply recites the
concept of entering information on a POS device, determining tip amounts
from that information, and storing the determined tip amounts in a provided
debit card, bank account, or other receptacle. The claims do not, for
example, purport to improve the functioning of the computer itself. Nor do
they effect an improvement in any other technology or technical field. That
is not enough to transform an abstract idea into a patent-eligible
invention. See id. at 2360. Therefore, we are not persuaded that the
Examiner erred in rejecting claims 1 and 2 under § 101. Appellant does not
separately argue dependent claims 3—10. Claims 3—10 fall with claims 1
and 2. See 37 C.F.R. § 41.37(c)(l)(iv).
The § 103(a) rejection
The Examiner finds that “Kessler discloses: a. providing a re­
loadable debit card to a person who receives tips; c. periodically processing
the information to determine what tip(s) have been earned by what
person(s); d. uploading that calculated tip amount to the person’s debit card,
bank account or other receptacle.” (Final Action 3; see also id. at 5—7.) The
Examiner relies on Marshall for its disclosure that ‘“non-cash transactions
may be processed via the POS system by entering the data via a cash register
or cash register terminal. Such non-cash transactions may include meal
charges, bar charges, non-cash tips, non-cash gratuities, and the like.’
(Marshall, para 0071).” (Id.; see also id. at 7—8.)
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Kessler discloses “systems and methods for collecting and disbursing
electronic gratuities.” (Kessler, Abstract.) Marshall discloses “systems and
methods for recording, maintaining, and reporting tips and gratuities.”
(Marshall, Abstract.) The Examiner determines that it “would have been
obvious to one of ordinary skill in the art at the time the invention was made
to combine [Kessler] with the POS of Marshall with the motivation of
capturing gratuities entered at POS terminals. (Marshall, para 0070).”
(Final Action 8.)
Appellant argues
that prior to the present invention, no gratuity disbursement
systems existed which tied together reporting technologies with
direct deposit solutions......... The absence of such an integrated
gratuity gathering/disbursement system in the market, despite the
very apparent need for and benefits of such a combination in one
streamlined solution, is by itself evidence that it is NOT obvious
to combine prior art systems (in the form asserted by the
Examiner or otherwise).
(Appeal Br. 11.) Appellant, however, cites no evidence to support the
argument that there existed a need for the claimed invention or that the
claimed invention satisfied the alleged need. Therefore, we do not find this
argument persuasive.
Appellant additionally argues that “Kessler does not disclose or
suggest the claimed methods of processing and disbursing tips received at a
POS (point-of-sale) to persons receiving those tips. ... In other words,
Kessler does not have anything to do with a ‘sale’ or a POS device/system.”
{Id. at 13.) Appellant further argues that “Kessler in no way discloses or
suggests combining his ‘electronic tip jar’ with another system to yield
Appellant’s claimed gratuity disbursement solution.” {Id.)
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But whether Kessler itself discloses combining its invention with
another system is not determinative. The test for obviousness is not what
any one reference would have suggested, but rather what the combined
teachings would have suggested to one of ordinary skill in the art. See In re
Keller, 642 F.2d 413, 426 (CCPA 1981). And in this case, the Examiner
relies on the combined teachings of Kessler and Marshall. (See id. at 5—10.)
We are not persuaded of error.
Appellant further argues that
Kessler’s disclosure is directed to a “stand alone” tip activity,
independent of any purchase by the patron. This further suggests
and highlights the fact that Kessler in no way intended for his
electronic gratuity device to be used with a point-of-sale system
and/or a reloadable debit card or other depository system.
Therefore, the Examiner’s assumption that it would be obvious
to combine Kessler with another prior art system (such as the
cited Marshall ’396 patent) is based upon improper hindsight
reconstruction.
(Appeal Br. 13—14.)
The Examiner answers that
[t]he device of Kessler is integrated with a system for distributing
those tips to accounts/cards. (Kessler, para 0041). Kessler
differs from Appellant’s invention in that the claimed tip
information collection device is a POS. Although Kessler
discloses a “stand alone” tip device, the examiner finds no
“teaching away” that tip information should not be entered from
another type of device, such as a POS. Kessler is silent on the
subject. Accordingly, the Examiner relies upon the Marshall
reference, which discloses a system where gratuity information
could be entered into a POS device.
(Answer 4—5.)
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As noted above, the test for obviousness is not what any one reference
would have suggested, but rather what the combined teachings would have
suggested to one of ordinary skill in the art. See In re Keller, 642 F.2d at
426. Thus, we are not persuaded that Kessler’s silence on entering tip
information from another device shows Examiner error in the proposed
combination of Kessler and Marshall.
In view of the above, we are not persuaded that the Examiner erred in
determining that it “would have been obvious to one of ordinary skill in the
art at the time the invention was made to combine [Kessler] with the POS of
Marshall with the motivation of capturing gratuities entered at POS
terminals.” (Final Action 8.) Appellant does not separately argue claims 2—
10. Claims 2-10 fall with claim 1. See 37 C.F.R. § 41.37(c)(l)(iv).
DECISION
The Examiner’s rejection of claims 1—10 under 35 U.S.C. § 101 is
affirmed.
The Examiner’s rejection of claims 1—10 under 35 U.S.C. § 103(a) 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
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