Ex Parte Powell

Patent Trial and Appeal Board

Oct 24, 2017

11670869 (P.T.A.B. Oct. 24, 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.
11/670,869 02/02/2007 Jonathan Robert Powell 070457.2244 7924
125665 7590
Baker Botts LLP
30 Rockefeller Plaza
New York, NY 10112
10/26/2017 EXAMINER
MACASIANO, MARILYN G
ART UNIT PAPER NUMBER
3688
NOTIFICATION DATE DELIVERY MODE
10/26/2017 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):
nycdocket@bakerbotts.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JONATHAN ROBERT POWELL
Appeal 2015-008167
Application 11/670,869
Technology Center 3600
Before MURRIEL E. CRAWFORD, HUBERT C. LORIN, and
ROBERT J. SILVERMAN, Administrative Patent Judges.
CRAWFORD, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant seeks our review under 35 U.S.C. § 134 of the Examiner’s
final decision rejecting claims 1—15. We have jurisdiction over the appeal
under 35 U.S.C. § 6(b).
We AFFIRM.
BACKGROUND
Appellant’s invention is directed to systems and methods for
implementing special customized issuer-merchant relationships or programs
in the payment-by-card industry. Spec. 2.
Claim 1 is illustrative:
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Application 11/670,869
1. A system for implementing customized issuer-
merchant relationships or programs in the payment card
industry that uses a general purpose bankcard network, which is
linked to merchants, merchant acquirers and card issuers, for
processing ordinary payment card transactions that are not
covered by a customized issuer-merchant relationship, the
system comprising:
a non-transitory computer readable storage medium
storing information reflecting at least one customized issuer-
merchant relationship or program;
a merchant screening block including at least a specially
programmed processor installed in the general purpose
bankcard network, wherein the merchant screening block is
configured to interrogate a transaction submitted to the network
and verify whether the transaction is an ordinary transaction or
is a transaction covered by a registered issuer-merchant
relationship , such verification performed using only transaction
parameters normally transmitted as part of an ordinary
transaction submitted to the network, and accordingly
processing the transaction automatically in accordance with
said registered issuer-merchant relationship without receiving
additional data from the network; and
a merchant accounting system block including at least a
specially programmed processor installed in the general
purpose bankcard network, wherein the merchant accounting
system block is configured to transmit information directly
between merchant and issuer accounts bypassing the merchant
acquirer;
wherein the issuer and merchant acquirer are separate
entities.
The Examiner relies on the following prior art reference as evidence
of unpatentability:
Walker et al. US 5,945,653 Aug. 31, 1999
(hereinafter “Walker”)
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Application 11/670,869
Harris et al.
(hereinafter “Harris”)
US 6,014,635 Jan. 11,2000
Behrenbrinker et al. US 2002/0062279 Al
(hereinafter “Behrenbrinker”)
May 23, 2002
Arias US 2005/0178825 Al Aug. 18, 2005
Jain et al. US 2005/0234769 Al Oct. 20, 2005
Kawahara US 2005/0246181 Al Nov. 3, 2005
Asmar et al.
(hereinafter “Asmar”)
US 2007/0174120 Al July 26, 2007
Hardesty et al. US 7,516,883 B2 Apr. 14, 2009
(hereinafter “Hardesty”)
Appellant appeals the following rejections:
Claims 1—15 under 35U.S.C. § 101 because the claimed invention is
not directed to patent eligible subject matter.
Claims 1—4, 6—9, and 11—14 under 35 U.S.C. § 103(a) as unpatentable
over Walker, Behrenbrinker, and Asmar.
Claims 5, 10, and 15 under 35 U.S.C. § 103(a) as unpatentable over
Walker, Behrenbrinker, Asmar, and Hardesty.
ANALYSIS
Rejection under 35 U.S.C. §101
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101. The
Supreme Court, however, has long interpreted § 101 to include implicit
exceptions: “[ljaws of nature, natural phenomena, and abstract ideas” are
not patentable. E.g., Alice Corp. Pty. Ltd. v. CIS Banklnt’l, 134 S. Ct.
2347, 2354 (2014).
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In determining whether a claim falls within the excluded category of
abstract ideas, we are guided in our analysis by the Supreme Court’s two-
step framework, described in Mayo and Alice. Id. at 2355 (citing Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1296—97
(2012)). In accordance with that framework, we first determine whether the
claim is “directed to” a patent-ineligible abstract idea. See Alice, 134 S. Ct.
at 2356 (“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
risk.”); Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4 in
petitioners’ application explain the basic concept of hedging, or protecting
against risk.”); Diamond v. Diehr, 450 U.S. 175, 184 (1981) (“Analyzing
respondents’ claims according to the above statements from our cases, we
think that a physical and chemical process for molding precision synthetic
rubber products falls within the § 101 categories of possibly patentable
subject matter.”); Parker v. Flook, 437 U.S. 584, 594—595 (1978)
(“Respondent’s application simply provides a new and presumably better
method for calculating alarm limit values.”); Gottschalk v. Benson, 409 U.S.
63, 64 (1972) (“They claimed a method for converting binary-coded decimal
(BCD) numerals into pure binary numerals.”).
The patent-ineligible end of the spectrum includes fundamental
economic practices, Alice, 134 S. Ct. at 2357; Bilski, 561 U.S. at 611;
mathematical formulas, Flook, 437 U.S. at 594—95; and basic tools of
scientific and technological work, Benson, 409 U.S. at 69. On the patent-
eligible side of the spectrum are physical and chemical processes, such as
curing rubber, Diamond, 450 U.S. at 184 n.7, “tanning, dyeing, making
waterproof cloth, vulcanizing India rubber, smelting ores,” and a process for
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manufacturing flour, Gottschalk, 409 U.S. at 69. If the claim is “directed to”
a patent-ineligible abstract idea, we then consider the elements of the
claim—both individually and as an ordered combination—to assess whether
the additional elements transform the nature of the claim into a patent-
eligible application of the abstract idea. Alice, 134 S. Ct. at 2355. This is a
search for an “inventive concept”—an element or combination of elements
sufficient to ensure that the claim amounts to “significantly more” than the
abstract idea itself. Id.
The Examiner entered a new ground of rejection under 35 U.S.C.
§ 101 in the Answer. The Examiner held that claim 1 is directed to a process
of providing direct connectivity between issuers and merchants bypassing
merchant acquirers for processing card transactions covered by customized
issuer-merchant relationships. The Examiner held that this is a fundamental
economic practice. The Examiner found that the claims recite generic
routine and well-understood operations of computing systems and that none
of the claims effects an improvement to another technology or technical field
or the computing systems itself and as such the claims do not amount to
significantly more than the judicial exception itself. Ans. 3^4. We agree.
We are not persuaded of error on the part of the Examiner by
Appellant’s argument that the claims “merely involve and, only in part, what
could be argued to be an abstract concept.” Reply. 4. Under the Alice
analysis, it is not determinative of patent eligibility that the claims be
directed to only an abstract idea. Rather, once it is determined that the
claims are directed to an abstract idea, it is then determined whether the
claims include significantly more than the abstract idea. As such, if it is
determined, as it was in the instant case, that the other aspects of the claim
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apart from the abstract idea are not significantly more than the abstract idea,
the claims are held to be patent ineligible.
We are likewise not convinced of error on the part of the Examiner by
Appellant’s argument that the claims are patentably distinct from the cited
references. To the extent that this argument asserts that the limitations of
claim 1 necessarily amount to “significantly more” than an abstract idea
because the claimed apparatus is allegedly patentable over the prior art,
Appellant misapprehends the controlling precedent. Although the second
step in the Alice/Mayo framework is termed a search for an “inventive
concept,” the analysis is not an evaluation of novelty or non-obviousness but
rather a search for “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. A
novel and nonobvious claim directed to a purely abstract idea is,
nonetheless, patent-ineligible. See Mayo, 132 S. Ct. at 1304.
We do not agree with the Appellant that the claims are inextricably
tied to computer technology and are analogous to the claims in DDR
Holdings, LLCv. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014).
In DDR the Court noted that a claim may amount to more than any abstract
idea recited in the claims when it addresses a business challenge, such as
“retaining website visitors,” where that challenge is particular to a speci fic
technological en vironment, such as the Internet. Appellant contends that the
claim addresses implementing customized issuer-merchant relationships or
programs in the payment card industry that uses a general purpose bankcard
network that is inextricably tied to computer technology.
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In DDR, the court stated that “the . . . patent’s claims address the
of retaining website vi sitors that, if adhering to the routine.
conventional functioning of Internet hyperlink protocol, would be instantly
transported away from a host's website after ‘clicking’ on an advertisement
and activating a hyperlink,” DDR Holdings, 773 F.3d at 1257. This was
done in the claim by serving a composite page with content based on the link
that was acti vated to serve the page.
In contrast, claim 1 performs a process that bypasses a merchant
acquirer so that cardholders can widely use charge cards at any merchant
establishment regardless of a merchant banking relationship with the card
issuer. Spec. 1. Limited use of charge cards because of the lack of
relationship between a merchant and a merchant acquirer is not a challeng
rooted in a specific technological environment, such as the Internet. Indeed
this challenge has existed for years.
Appellant’s argument that claim 1 does not preempt or tie up any
abstract idea or laws of nature is also not persuasive of error on the part of
the Examiner, because while preemption may signal patent ineligible subject
matter, the absence of complete preemption does not demonstrate patent
eligibility.” 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.) (“[T]hat the claims do not preempt all price
optimization or may be limited to price optimization in the e-commerce
setting do not make them any less abstract.”), cert, denied, 136 S. Ct. 701
(2015). And, “[ w]here a patent's claims are deemed only to disclose patent
ineligible subject matter under the Mayo framework, as they are in this case,
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preemption concerns axe fully addressed and made moot.” Ariosa, 788 F.3d
at 1379.
In view of the foregoing, we will sustain the Examiner’s rejection of
claim 1 under 35 U.S.C. § 101. We will also sustain this rejection as it is
directed to the remaining claims because the Appellant has not argued the
separate eligibility of these claims.
Rejection under 35 U.S.C. § 103(a)
We will not sustain this rejection because we agree with the Appellant
that Asmar does not disclose a merchant accounting block that is configured
to transmit information in processing ordinary card transactions directly
between merchant and issuer accounts bypassing the merchant acquirer. The
Appellant’s Specification discloses that a merchant acquirer is a third party
transaction processing company that provides payment of a purchase price to
a merchant during a bank card transaction. Spec. 12; Figure 6. The
Examiner relies on the disclosure in Asmar of a customer bypassing the use
of a bank card in making a transaction for teaching the subject matter of
bypassing a merchant acquirer. Ans. 6. We agree with the Appellant that
Asmar does not disclose bypassing a merchant acquirer in a bank card
transaction. In fact, the portion of Asmar relied on by the Examiner does not
mention a merchant acquirer. What Asmar does disclose is bypassing the
use of a bank card altogether, not bypassing a merchant acquirer in a process
using a bank card as required by claim 1.
In view of the foregoing, we will not sustain this rejection as it is
directed to claim 1 and claims 2-4 dependent therefrom. We will also not
sustain this rejection as it is directed to claim 6 and claims 7—9 dependent
therefrom and claim 11 and claims 12—14 dependent therefrom because
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claims 6 and 11 recite transmitting information directly between a merchant
and issuer account, and the Examiner has not established that Asmar
discloses a merchant acquirer.
We will not sustain the rejection of claims 5, 10, and 15 for the same
reason.
DECISION
We affirm the Examiner’s § 101 rejection.
We reverse the Examiner’s § 103 rejections
TIME PERIOD
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1) (2009).
ORDER
AFFIRMED
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