Ex Parte Powell

Patent Trial and Appeal Board

Aug 27, 2018

11966724 (P.T.A.B. Aug. 27, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/966,724 12/28/2007
75564 7590 08/29/2018
DANIEL M. FITZGERALD (21652)
ARMSTRONG TEASDALE LLP
7700 Forsyth Boulevard
Suite 1800
St. Louis, MO 63105
FIRST NAMED INVENTOR
Jonathan Robert Powell
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.
21652-00012 5627
EXAMINER
MACASIANO, MARILYN G
ART UNIT PAPER NUMBER
3688
NOTIFICATION DATE DELIVERY MODE
08/29/2018 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):
USpatents@armstrongteasdale.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JONATHAN ROBERT POWELL
Appeal2017-004426
Application 11/966, 724
Technology Center 3600
Before BRADLEY W. BAUMEISTER, KARA L. SZPONDOWSKI, and
DAVID J. CUTITTA II, Administrative Patent Judges.
SZPONDOWSKI, Administrative Patent Judge.
DECISION ON APPEAL
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 1, 3-9, 11-16, and 18-25, which constitute all
pending claims in the application. We have jurisdiction under 35 U.S.C.
§ 6(b).
We AFFIRM.
Appeal2017-004426
Application 11/966, 724
STATEMENT OF THE CASE
Appellant's invention is directed to methods and systems for applying
promotion codes to payment transactions. Spec. ,r 1. Claim 1, reproduced
below, is representative of the claimed subject matter:
1. A method implemented by a payment processor for enhancing a
payment transaction using a promotion code received from at least
one cardholder-controlled input device, the payment transaction
including a purchase made by a cardholder using a payment card over
a payment card network, the payment processor is coupled to the
payment card network and to a database and includes a merchant
screening module, a promotion code processing module, and a
merchant accounting system module, said method comprising the
steps of:
storing promotion data within the database, the promotion data
including at least one merchant participating in the payment card
network, each promotional program offered by the at least one
merchant to the cardholder, and promotion codes associated with each
promotional program offered to the cardholder;
communicating the promotion data stored within the database
with the at least one input device;
receiving, by the merchant screening module, an input from the
at least one cardholder-controlled input device, the input indicative of
a selected promotional program from the cardholder using the at least
one cardholder-controlled input device;
automatically applying, by the promotion code processing
module, the promotion codes associated with the selected promotional
program to the payment transaction;
transmitting payment of the payment transaction;
calculating, by the merchant accounting system module, an
amount of fees to be charged to the merchant for participating in the
selected promotional program applied to the payment transaction;
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Application 11/966, 724
generating, by the merchant accounting system module,
accounting entries representing the payment transaction including
terms of the selected promotional program applied to the payment
transaction and the calculated amount of fees;
transmitting, by the merchant accounting system module, the
accounting entries to the merchant associated with the selected
promotional program and issuer associated with the cardholder; and
subsequent to transmitting payment of the payment transaction,
transmitting, by the merchant accounting system module, debit or
credit funds directly between an account of the merchant and an
account of the issuer, the debit or credit funds including the calculated
amount of fees for the selected promotional program.
REJECTION
Claims 1, 3-9, 11-16, and 18-25 stand rejected pursuant to 35 U.S.C.
§ 101 because the claimed invention is not directed to patent eligible subject
matter.
ANALYSIS
To determine whether a claim is eligible under § 101, "[ w ]e must first
determine whether the claims at issue are directed to a patent-ineligible
concept." Alice Corp. v. CLS Banklnt'l, 134 S. Ct. 2347, 2355 (2014). One
must keep in mind that "all inventions at some level embody, use, reflect,
rest upon, or apply laws of nature, natural phenomena, or abstract ideas,"
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71
(2012), and "describing the claims at ... a high level of abstraction and
untethered from the language of the claims all but ensures that the
exceptions to§ 101 swallow the rule." Enfzsh, LLC v. Microsoft Corp., 822
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F.3d 1327, 1337 (Fed. Cir. 2016). Instead, "the claims are considered in
their entirety to ascertain 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). "If the claims are not directed to an
abstract idea [or other patent-ineligible concept], the inquiry ends. If the
claims are 'directed to' an abstract idea, then the inquiry proceeds to the
second step of the Alice framework." McRO, Inc. v. Bandai Namco Games
Am. Inc., 837 F.3d 1299, 1312 (Fed. Cir. 2016).
The Examiner determines the claims are "directed to a process of
applying promotional codes associated with each promotional program
offered to the payment transaction of the cardholder" which is "a
fundamental economic practice." Final Act. 3; see also Ans. 2-3. The
Examiner further determines "[t ]he process of storing promotion data,
communicating the promotion data, receiving an input from a cardholder,
applying the promotion codes to payment, transmitting payments,
calculating amount of fees to be charged to merchant, generating accounting
entries, transmitting accounting entries and transmitting debit or credit funds
directly between a merchant account and the issuer account, all describe the
abstract idea." Id.
Appellant argues "[ t ]he Examiner provides no support for the
allegation that the claims recite an 'abstract idea."' App. Br. 7-8.
According to Appellant, "the present claims do not merely set forth the
alleged 'abstract idea,"' and, as evidence, recite the following limitations in
the independent claims: "automatically applying, by the promotion code
processing module, the promotion codes associated with the selected
promotional program to the payment transaction," "transmitting payment of
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Application 11/966, 724
the payment transaction," "calculating, by the merchant account system
module, an amount of fees to be charged to the merchant for participating in
the selected promotional program applied to the payment transaction," and
"generating, by the merchant accounting system module, accounting entries
representing the payment transaction including terms of the selected
promotional program applied to the payment transaction and the calculated
amount of fees." App. Br. 8; see also Reply Br. 3.
We are not persuaded by Appellant's arguments and agree with the
Examiner that the claims are directed to a process of applying promotional
codes associated with each promotional program offered to the payment
transaction of the cardholder, which, like verifying credit card transactions
(see CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1370 (Fed.
Cir. 2011)), guaranteeing transactions (see buySAFE, Inc. v. Google, Inc.,
765 F.3d 1350, 1354 (Fed. Cir. 2014)), budgeting (see Intellectual Ventures
I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1367 (Fed. Cir. 2015)),
product promotion (see In re Eberra, 730 Fed. Appx. 916 (Fed. Cir. 2018),
and intermediated settlement (see Alice, 134 S. Ct. at 2356-57), falls
squarely within the realm of abstract ideas implemented on computers.
Moreover, Appellant admits "the claims combine the steps of
retrieving and processing data with steps for applying the data ... " App.
Br. 10. In this regard, the claims involve nothing more than storing,
receiving, analyzing, and transmitting data, and are, therefore, also similar to
other claims the Federal Circuit has found to be patent ineligible. See, e.g.,
Elec. Power Grp. v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016)
(claims directed to collection, manipulation, and display of data); Content
Extraction and Transmission LLC v. Wells Fargo Bank, National Ass 'n, 776
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F.3d 1343, 1347 (Fed. Cir. 2014) ("collecting data, ... recognizing certain
data within the collected data set, and ... storing that recognized data in a
memory"); Cyberfone Systems, LLC v. CNN Interactive Grp, Inc., 558 F.
App'x 988, 992 (Fed. Cir. 2014) (nonprecedential) ("using categories to
organize, store, and transmit information is well-established"). Accordingly,
Appellant does not persuasively rebut the Examiner's conclusion that the
claims are directed to an abstract idea.
In the second step of the Alice framework, we "consider the elements
of each claim both individually and 'as an ordered combination' to
determine whether the additional elements 'transform the nature of the
claim' into a patent-eligible application." Alice, 134 S. Ct. at 2355 (quoting
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 78-79
(2012)). The Supreme Court describes this 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." Id. (quotation omitted).
The Examiner determines the claims recite computer systems having
generic computers, which do not amount to significantly more than the
abstract idea. Final Act. 3. The Examiner further determines the various
computer implementations, such as storing promotion data, communicating
promotion data, receiving an input from a cardholder, applying the
promotion codes to payment, transmitting payments, calculating the amount
of fees to be charged to the merchant, generating account entries,
transmitting account entries, and transmitting debit or credit funds directly
between a merchant account and the issuer account are "generic, routine and
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Application 11/966, 724
well-understood functions of computer systems," and therefore do not add
significantly more to the abstract idea. Final Act. 4; see also Ans. 3.
Appellant argues the claims effect an improvement in a technical
field, namely, the technical field of payment processing by electronic
processing of data between computing devices in payment transactions, and,
therefore, recite "significantly more" than the abstract idea. App. Br. 10-11;
see also Reply Br. 5---6. In support of this assertion, Appellant identifies
various alleged improvements. App. Br. 11-12 ( citing Spec. ,r,r 47--49). For
example, Appellant argues certain claimed elements "obviate the need for
individual connectivity channels between issuers and each merchant system
for promotional program purposes" and "reduce back-office processing,
improve settlement processing, and enable merchants to offer reward
programs without needing to develop specialized point-of-sale
infrastructure." App. Br. 12.
Appellant further argues "the Examiner only provides a mere
allegation with no findings of fact to substantiate the assertion that the
claims describe 'well-understood, routine, and conventional activity."' App.
Br. 8; see also App. Br. 13. According to Appellant, "[t]his is evidenced at
least by the fact that the Examiner cites no prior art that describes or suggest
these recitations." App. Br. 8; see also App. Br. 13. Appellant argues
"[ e Jach of [ the various claimed modules] is specially designed to perform
specific functions, and none of them are well-understood, routine, or
conventional in the art. A conventional payment processor does not include
these modules." App. Br. 14; see also Reply Br. 4--6.
Appellant's arguments are not persuasive. Although Appellant
reproduces the language of the following claim limitations, "automatically
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applying, by the promotion code processing module, the promotion codes
associated with the selected promotional program to the payment
transaction," "transmitting payment of the payment transaction,"
"calculating, by the merchant account system module, an amount of fees to
be charged to the merchant for participating in the selected promotional
program applied to the payment transaction," and "generating, by the
merchant accounting system module, accounting entries representing the
payment transaction including terms of the selected promotional program
applied to the payment transaction and the calculated amount of fees" (App.
Br. 11-12), Appellant has not sufficiently explained how the argued
improvements are captured in the claims.
The claim language to which Appellant directs us recites certain
functionality performed by each of the claimed modules. For example, the
promotion code processing module automatically applies the promotion
codes associated with the selected promotional program to the payment
transaction. The merchant accounting system module calculates an amount
of fees to be charged to the merchant for participating in the selected
promotional program applied to the payment transaction. And the merchant
accounting system module generates accounting entries representing the
payment transaction including terms of the selected promotional program
applied to the payment transaction and the calculated amount of fees.
In addition, the claims generally recite transmitting payment of the
payment transaction. The claims generically recite a "processor" or "server
system" coupled to a payment card network and "database" that includes "a
merchant screening module, a promotion code processing module, and a
merchant account system module." See Claims 1, 9, 16, 21.
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Appellant's Specification describes that "[s]ystem 100 exploits legacy
payment-by-card industry infrastructure for implementing a special or
customized issuer-merchant relationship" and"[ s ]ystem 100 incorporates
one or more specific processing modules (e.g., merchant screening module
450, promotion code processing module 460, and merchant accounting
system module 470) for processing special relationship transactions in
payment network 440." Spec. ,r 38. The Specification also provides that
"the systems and methods of the present invention can be implemented using
any suitable combination of hardware and software" and "[ t ]he software ...
can be provided on computer-readable media, which can include without
limitation ... microprocessors." Spec. ,r 62.
Appellant has provided inadequate evidence or technical reasoning
explaining why such functionality ( applying a promotion code, calculating
an amount of fees, transmitting payment, and generating accounting entries)
is not routine, conventional, and well-understood functions of a generic
computer. See, e.g., buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355
(Fed. Cir. 2015) ("[t]hat a computer receives and sends information over a
network-with no further specification-is not even arguably inventive"); In
re TL! Communications LLC Patent Litigation, 823 F.3d 607, 614 (Fed.
Cir. 2016) (server that receives data, extracts classification information from
the received data, and stores the digital images insufficient to add an
inventive concept); Alice Corp., 134 S. Ct at 2359, (creating and
maintaining '"shadow accounts' amounts to electronic recordkeeping-one of
the most basic functions of a computer'' and "adjusting account balances'' is
well-understood, routine, and conventional activity); Ultramercial. Inc. v.
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Hulu, LLC, 772 F.3d 709,716 (Fed. Cir. 2014) (updating an activity log is a
routine step).
Appellant further argues the claims are similar to those in Diamond v.
Diehr, 450 U.S. 175 (1981). App. Br. 9. According to Appellant, "the
present claims recite a specific process with specific modules ... that enable
an existing payment card network infrastructure to process transactions
associated with a special relationship between the merchants and issuers that
would otherwise require the merchants and issuers to develop separate
networking infrastructure, outside of the existing payment card network," so,
therefore, "effect an improvement in the technical field of electronic
processing of signals between computing devices in payment transactions,
by increasing the usefulness of a payment network infrastructure and
eliminating the need to develop a separate infrastructure between issuers and
merchants to process promotional program data." Id.
Appellant similarly argues "the improvements described by the claims
are analogous to those in DDR Holdings, LLC v. Hotels.com et al.," and
solve a problem that does not exist in the "brick and mortar" context. App.
Br. 9-10. According to Appellant, "the present claims recite an invention
that includes devices specifically configured to perform the recitations of the
claims ( e.g., a promotion code processing module to apply promotion codes,
and a merchant accounting system module to calculate fees to be charged to
the merchant)." App. Br. 10.
We disagree the claims are similar to those in Diehr or DDR.
Appellant does not provide persuasive technical reasoning with regard to
how the recited hardware and modules address a technological problem or
are technological improvernents. Although Appellant points to the claimed
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"specific modules" and "specially configured modules," as discussed above,
Appellant's arguments do not indicate that any specialized computer
hardware or other inventive computer components or inventive
programming is involved, or that the claimed modules are other than generic
computer functionality used in its normal, expected, and routine manner for
storing, receiving, transmitting, and processing data. Accordingly,
.Appellant does not persuasively explain why the claim results in an
improvement in computer functionality.
Appellant also argues the claims are analogous to those in Research
Corp. Tech. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010). App. Br. 10;
see also App. Br. 12. Appellant argues "the claims combine the steps of
retrieving and processing data with steps for applying the data and thus go
beyond mere instructions to apply the abstract idea, and recite 'significantly
more' tha[n] the abstract idea itself." App. Br. 10.
In Research Corp., the claim was directed to digital image halftoning,
techniques which allow computers to present different shades and color
tones with a limited number of pixels. Research Corp , 627 F .3d at 862-
863. In Research Corp., the claims were found to be not abstract because
"[t]he invention presents functional and palpable applications in the field of
computer technology" that "address 'a need in the art for a method of an
apparatus for the halftone rendering of gray scale images in which a digital
data processor is utilized in a simple and precise manner to accomplish the
halftone rendering."' Id. at 868-869. The Federal Circuit determined that
"[t]he fact that some claims ... require a 'high contrast film,' 'a film
printer,' 'a memory,' and 'printer and display devices' also confirm[s] this
court's holding that the invention is not abstract. Indeed, this court notes
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that inventions with specific applications or improvements to technologies in
the marketplace are not likely to be so abstract that they override the
statutory language and framework of the Patent Act." Id. at 869. For the
same reasons previously set forth, we disagree the claims here are analogous
to those in Research Corp.
With regard to Appellant's argument that the pending claims are
patent eligible because there are no pending obviousness or novelty
rejections of the claims, Appellant improperly conflates the requirements for
eligible subject matter(§ 101) with the independent requirements of novelty
(§ 102) and non-obviousness(§ 103). "The 'novelty' of any element or
steps in a process, or even of the process itself, is of no relevance in
determining whether the subject matter of a claim falls within the § 101
categories of possibly patentable subject matter." Diehr, 450 U.S. at 188-89
(1981); see also Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1376
(Fed. Cir. 2016) ( stating that, "under the Mayo/ Alice framework, a claim
directed to a newly discovered law of nature ( or natural phenomenon or
abstract idea) cannot rely on the novelty of that discovery for the inventive
concept necessary for patent eligibility").
Accordingly, we are not persuaded the Examiner erred. For the
foregoing reasons, we sustain the Examiner's 35 U.S.C. § 101 rejection of
claims.
DECISION
The Examiner's rejection of claims 1, 3-9, 11-16, and 18-25 is
affirmed.
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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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