Ex Parte Priebatsch

Patent Trial and Appeal Board

Aug 6, 2018

14107677 (P.T.A.B. Aug. 6, 2018)

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