Ex Parte PriebatschDownload PDFPatent Trial and Appeal BoardAug 6, 201814107677 (P.T.A.B. Aug. 6, 2018) Copy Citation UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. FILING DATE 14/107,677 12/16/2013 23517 7590 08/08/2018 MORGAN, LEWIS & BOCKIUS LLP (BO) 1111 PENNSYLVANIA A VENUE, N.W. WASHINGTON, DC 20004 FIRST NAMED INVENTOR Seth Priebatsch 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. SCV-013/7317762001 4584 EXAMINER KHATTAR, RAJESH ART UNIT PAPER NUMBER 3693 NOTIFICATION DATE DELIVERY MODE 08/08/2018 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): kcatalano@morganlewis.com patents@morganlewis.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte SETH PRIEBATSCH Appeal2017-005575 Application 14/107 ,677 1 Technology Center 3600 Before NINA L. MEDLOCK, BRUCE T. WIEDER, and MATTHEWS. MEYERS, Administrative Patent Judges. WIEDER, Administrative Patent Judge. DECISION ON APPEAL This is a decision on appeal under 35 U.S.C. § 134 from the Examiner's rejection of claims 1-22. We have jurisdiction under 35 U.S.C. § 6(b ). We AFFIRM. CLAIMED SUBJECT MATTER Appellant's "invention relates generally to systems and methods for verifying the validity of payment transactions." (Spec., 1.) In particular, "the invention pertains to a method of verifying a payment authorization to 1 According to Appellant, the real party in interest is SCVNGR, Inc. (Appeal Br. 2.) Appeal2017-005575 Application 14/107,677 complete a current transaction between a consumer and a merchant." (Id. Claims 1 and 12 are the independent claims on appeal. Claim 1 is illustrative. It recites: 1. A method of verifying a payment authorization to complete a current transaction between a consumer and a merchant, the method comprising, at a server: receiving, prior to the transaction, via a network from a consumer device including a memory, a processor and a transceiver, consumer information and data stored in the consumer-device memory and corresponding to authorization to access consumer non-transactional data stored in a second server; receiving, via a network from a merchant device including a processor and a transceiver, a consumer-originated request for processing the payment to complete the current transaction, the request not containing secure customer information; computationally matching received information in the request to records associated with the consumer in a consumer database, thereby identifying the consumer who originated the processing request; retrieving, from the consumer database and the second server, historical transactional and non-transactional data in records associated with the identified consumer, including consumer non-transactional data obtained from the second server; computationally determining consistency between the received information in the current transaction and the retrieved transactional and non-transactional data; and based on the determined consistency, determining a likelihood that the current transaction has been validly initiated by the consumer and processing the transaction if the likelihood exceeds a threshold. 2 Appeal2017-005575 Application 14/107,677 REJECTION Claims 1-22 are rejected under 35 U.S.C. § 101 as directed to a judicial exception without significantly more. ANALYSIS "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. Section 101, however, "'contains an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable."' Alice Corp. Pty. Ltd. v. CLS Bankint'l, 134 S. Ct. 2347, 2354 (2014) (quoting Assoc.for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)). Alice applies a two-step framework, earlier set out in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (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-step 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, e.g., an abstract idea, then the second step 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). 3 Appeal2017-005575 Application 14/107,677 With regard to step one of the Alice framework, the Examiner determines that the claim steps are directed to the abstract idea of collecting consumer data and using the collected consumer data to make a determination if the transaction is valid. The claim is [also] directed to collecting, comparing and determining in order to determine if the transaction is valid and is similar to the concept that has been identified by the courts as abstract such as collecting and comparing known information as in Classen [ Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057 (Fed. Cir. 2011)] and comparing data to determine a risk level as in Perkin- Elmer [PerkinElmer, Inc. v. Intema Ltd., 496 F. App'x 65 (Fed. Cir. 2012)]." (Answer 3.) Appellant disagrees and argues that the claims "involve specific types of data received from different, specified sources" and that "the claims focus on an improvement at the system level to transaction processing involving a consumer device, a merchant device, and a processing server." (Appeal Br. 10.) Under step 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 whole' is directed to excluded subject matter." Affinity Labs of Texas, LLC v. DIRECTV, 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)). The Specification provides evidence as to what the claimed invention is directed. In this case, the Specification discloses that the "invention relates generally to systems and methods for verifying the validity of payment transactions." (Spec. ,r 1.) Claim 1 provides additional evidence. Claim 1 recites, in relevant part, "[a] method of verifying a payment 4 Appeal2017-005575 Application 14/107,677 authorization ... comprising, at a server: receiving ... data stored in the consumer-device ... and corresponding to authorization to access ... consumer ... data stored in a second server," "receiving ... from a merchant device ... a ... request for processing the payment," "matching received information in the request to records associated with the consumer in a consumer database," "retrieving, from the consumer database and the second server, ... data ... associated with the ... consumer," "determining consistency between the received information ... and the retrieved ... data," and "determining a likelihood that the current transaction has been validly initiated ... and processing the transaction if the likelihood exceeds a threshold." Although we and the Examiner describe, at different levels of abstraction, to what the claims are directed, it is recognized that "[a]n abstract idea can generally be described at different levels of abstraction." Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016). That need not and, in this case does not, "impact the patentability analysis." See id. at 1241. In this case, as in Alice, we need not labor to delimit the precise contours of the "abstract ideas" category. It is enough to recognize that there is no meaningful distinction in the level of abstraction between the concept of "creat[ing] electronic records, track[ing] multiple transactions, and issu[ing] simultaneous instructions," Alice, 134 S. Ct. at 2359, or "analyzing records of human activity to detect suspicious behavior," FairWarning, IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093 (Fed. Cir. 2016), and receiving data, matching data/determining consistency between data, and, based on the determination, processing a transaction. These are 5 Appeal2017-005575 Application 14/107,677 squarely within the realm of "abstract ideas" as the Court has used that term. See Alice, 134 S. Ct. at 2357; see also Elec. Power Grp., 830 F.3d at 1353-54 (collecting, analyzing, and displaying information, even when limited to a particular content, is an abstract idea). 2 Nonetheless, Appellant seeks to analogize the claims to the claims in Enfish LLC v. Microsoft Corp., 822 F.3d 1327 (2016). (Appeal Br. 10-11.) Appellant argues that "the claims focus on an improvement at the system level to transaction processing involving a consumer, device, a merchant device, and a processing server." (Appeal Br. 10.) We disagree. Unlike the present claims, the claims in Enfzsh were "specifically directed to a self- referential table for a computer database." Enfzsh, 822 F.3d at 1337. That is, "the plain focus of the claims [was] on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity." Id. at 1336. The Federal Circuit noted that this was "an improvement of an existing technology" as evidenced "by the specification's teachings." Id. at 1337. In other words, unlike the invention sought to be claimed in claims 1 and 12, the invention claimed in Enfzsh does more than "simply instruct the practitioner to implement the abstract idea with routine, conventional activity." See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014). 2 We do not find the Examiner's reliance on PerkinElmer or Classen to be helpful here. (See Answer 3.) PerkinElmer "claims a law of nature," rather than an abstract idea, as in this case. See PerkinElmer, Inc., 496 F. App 'x at 70. And Classen relates to immunization schedules and immunizing subjects, rather than receiving, analyzing, and processing data, as in this case. See Classen Immunotherapies, Inc., 659 F.3d at 1066--67. 6 Appeal2017-005575 Application 14/107,677 In view of the above, we agree with the Examiner that claim 1 is directed to an abstract idea. We also agree with the Examiner that claim 12 contains similar language and for similar reasons is also directed to an abstract idea. (See Final Action 4.) Step two of the Alice framework 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 (quoting Mayo, 566 U.S. at 72-73). The Examiner determines that "[ t ]he consumer device, server and a merchant device and a consumer database are all recited at a high level of generality" and that they "simply perform[] their basic computer function[ s] of sending/receiving data, storing data and performing computational function." (Final Action 3.) The Examiner also determines that these "[g]eneric computers performing generic computer function[ s ], alone, is not sufficient to transform an abstract idea into a patent eligible subject matter." (Id.) The Examiner further determines that "[ w ]hen the additional limitations are considered as an ordered combination, [they] do not yield anything different [than] when the limitations are considered individually." (Id. at 4.) Appellant disagrees and seeks to analogize the claims to the claims in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014). In particular, Appellant argues that "the problem is network-centric in nature." (Appeal Br. 12-13.) But unlike the present claims, the claims in DDR Holdings "specify how interactions with the Internet are manipulated to yield a desired result - a result that overrides the routine and conventional 7 Appeal2017-005575 Application 14/107,677 sequence of events ordinarily triggered by the click of a hyperlink." DDR Holdings, 773 F.3d at 1258 (emphasis added). In other words, the invention claimed in DDR Holdings does more than "simply instruct the practitioner to implement the abstract idea with routine, conventional activity." See Ultramercial, Inc., 772 F.3d at 715; see also DDR Holdings, 773 F.3d at 1259. Appellant further argues that the present claims are analogous to those in "Example 21 of the Office's July 2015 Update Appendix to its § 101 examination guidelines." (Appeal Br. 12.) We disagree. In relevant part, claim 2 in Example 21 recites "[a] method of distributing stock quotes over a network to a remote subscriber computer" including the steps of transmit[ing] the formatted stock quote alert over a wireless communication channel to a wireless device associated with a subscriber based upon the destination address and transmission schedule, wherein the alert activates the stock viewer application to cause the stock quote alert to display on the remote subscriber computer and to enable connection via the URL to the data source over the Internet when the wireless device is locally connected to the remote subscriber computer and the remote subscriber computer comes online. July 2015 Update Appendix 1: Examples, 3 (2015), https://www.uspto.gov/sites/default/files/ documents/ieg-july-2015-app 1.pdf; 2014 Interim Guidance on Subject Matter Eligibility (2014 IEG), July 2015 Update: Subject Matter Eligibility, 79 Fed. Reg. 74618 (Dec. 16, 2014). The Update Appendix explains that [t]he claimed invention addresses the Internet-centric challenge of alerting a subscriber with time sensitive information when the subscriber's computer is offline. This is addressed by 8 Appeal2017-005575 Application 14/107,677 transmitting the alert over a wireless communication channel to activate the stock viewer application, which causes the alert to display and enables the connection of the remote subscriber computer to the data source over the Internet when the remote subscriber computer comes online. (Id. at 4.) Example 1 of the Update is similar to Example 2 except that Example 1 lacks the stock viewer application; and, thus, does not address "the Internet-centric challenge of alerting a subscriber ... when the subscriber's computer is offline." Example 1 is described as patent ineligible. Appellant does not argue what step(s) of claim 1 and 12 is/are analogous to the stock viewer application of Example 2. Nor does Appellant argue why claims 1 and 12 are more analogous to Example 2 than to Example 1. We do not find Appellant's arguments persuasive. Appellant further seeks to analogize the claims to the claims in Bascom Global Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016). (Appeal Br. 13-15.) In particular, Appellant argues that "[ c ]laim 12, for example, requires the creation of a specialized, intermediary server ('payment authorization' server) independent of the merchant ('merchant device') and the consumer ('consumer device'), and independent of a third-party containing consumer data ('second server') in a network." (Id. at 14.) Appellant does not point to any portion of the written description to support the assertion that claim 12 "requires the creation of a specialized, intermediary server." Rather, paragraphs 44--48 disclose that the invention can be performed on generic computer systems, e.g., "[t]he processor 206, 222 that execute commands and instructions may be a 9 Appeal2017-005575 Application 14/107,677 general purpose computer." (Spec. ,r 44.) Therefore, we do not find this argument persuasive. Appellant also argues that "[ c ]laim 21 further adds that the claimed devices are independent of a payment-processing entity server ('payment server')." (Appeal Br. 14.) Claim 21 recites: "The system of claim 12, wherein the payment- server processor is further configured to transmit the processing request to a payment server if the current transaction is determined to be likely valid." Claim 12, however, does not recite, ipsis verbis, "a payment-server processor." Rather, claim 12 recites "a payment server comprising: ... a processor." Applying a broadest reasonable interpretation, we construe the term "payment-server processor" to include this processor. Thus, claim 21 requires the processor in the payment server to transmit a request to "a payment server," i.e., either to the payment server of which it is a part or to a second payment server. Even if the latter, claim 21 does not recite that the second payment server is independent of the other claimed devices, as argued by Appellant. Therefore, we do not find this argument persuasive. Appellant further argues that the appealed claims do not preempt "the concept of 'payment verification' implemented on a general-purpose computer." (Id. at 15.) We do not find this preemption argument persuasive of error. Preemption is not a separate test. To be clear, the proper focus is not preemption per se, for some measure of preemption is intrinsic in the statutory right granted with every patent to exclude competitors, for a limited time, from practicing the claimed invention. See 35 U.S.C. § 154. Rather, the animating concern is that claims should not be coextensive with a natural law, natural phenomenon, or abstract idea; a 10 Appeal2017-005575 Application 14/107,677 patent-eligible claim must include one or more substantive limitations that, in the words of the Supreme Court, add "significantly more" to the basic principle, with the result that the claim covers significantly less. See Mayo[, 566 U.S. at 72- 73]. CLS Bank Int 'l v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1281 (Fed. Cir. 2013) (Lourie, J., concurring), aff'd, 134 S. Ct. 2347 (2014). Moreover, "[ 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, preemption concerns are fully addressed and made moot." Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015). In other words, "preemption may signal patent ineligible subject matter, [but] the absence of complete preemption does not demonstrate patent eligibility." Id. Appellant argues that "the invention delivers a significant improvement to the technical field of electronic transaction processing and addresses a technical problem ('did the request really originate with the consumer?') .... " (Reply Br. 6.) We do not find this argument persuasive. Appellant does not explain how, in this instance, the steps of receiving data, matching data/ determining consistency between data, and, based on the determination, processing a transaction, improve the functionality of a processor or server. Appellant does not indicate where the Specification discloses an improvement to the functionality of a processor or server itself. Nor does Appellant indicate where the Specification discloses that anything other than a generic computer programmed to perform the steps of the invention is required. (See Spec. ,r,r 44--48.) The claims "do not require an arguably inventive set of components or methods, such as measurement 11 Appeal2017-005575 Application 14/107,677 devices or techniques." Elec. Power Grp., 830 F.3d at 1355. The introduction of a processor or server to implement the claimed steps does not alter the analysis at step two. In short, "these claims in substance [are] directed to nothing more than the performance of an abstract business practice ... using a conventional computer. Such claims are not patent- eligible." DDR Holdings, LLC, 773 F.3d at 1256. In view of the above, we are not persuaded that the Examiner erred in determining that claims 1-22 are directed to a judicial exception without significantly more. DECISION The Examiner's rejection of claims 1-22 under 35 U.S.C. § 101 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). See 37 C.F.R. § 1.136(a)(l )(iv). AFFIRMED 12 Copy with citationCopy as parenthetical citation