Ex Parte Priebatsch et al

Patent Trials and Appeals Board

Mar 25, 2019

13797287 - (D) (P.T.A.B. Mar. 25, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/797,287 03/12/2013
23517 7590 03/27/2019
MORGAN, LEWIS & BOCKIUS LLP (BO)
1111 PENNSYLVANIA A VENUE, N.W.
WASHINGTON, DC 20004
UNITED ST A TES OF AMERICA
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-002/7312932001 8652
EXAMINER
CHOO, JOHANN Y
ART UNIT PAPER NUMBER
3685
NOTIFICATION DATE DELIVERY MODE
03/27/2019 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 and CHARLES CARTER JERNIGAN
Appeal2017-010503 1
Application 13/797 ,2872
Technology Center 3600
Before NINA L. MEDLOCK, PHILIP J. HOFFMANN, and
TARA L. HUTCHINGS, Administrative Patent Judges.
MEDLOCK, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 1-22 and 25-28. We have jurisdiction under 35 U.S.C.
§ 6(b ).
We AFFIRM.
1 Our decision references Appellants' Appeal Brief ("App. Br.," filed
February 10, 2017) and Reply Brief ("Reply Br.," filed August 3, 2017), and
the Examiner's Answer ("Ans.," mailed June 5, 2017) and Final Office
Action ("Final Act.," mailed July 12, 2016).
2 Appellants identify SCVNGR, Inc. as the real party in interest. App.
Br. 2.
Appeal2017-010503
Application 13/797 ,287
CLAIMED INVENTION
Appellants' claimed invention relates to "distributed authenticity
verification for consumer payment transactions" (Spec. Title).
Claims 1 and 16 are the independent claims on appeal. Claim 1,
reproduced below with bracketed notations added, is illustrative of the
claimed subject matter:
1. A method of electronically processing a transaction
among a consumer, a merchant point-of-sale system and a
transaction-processing entity over a communication network, the
method comprising:
[ (a)] generating a token encrypted with data identifying
the consumer and trust data for the consumer and at least one
individual with whom the consumer is associated;
[ (b)] receiving, via the network, and storing the token by
a device of the consumer;
[ ( c)] reading and decrypting, by the merchant system, the
token upon presentation thereof by the consumer's device in
connection with the transaction;
[ ( d)] authorizing, by the merchant system, the transaction
based on (i) successful decryption of the token and (ii) the trust
data of the consumer and the at least one associated individual;
[ ( e)] subsequent to authorization of the transaction by the
merchant system, communicating, by the merchant to the
transaction-processing entity via a communication network, a
record of the transaction and authorization thereof; and
[(f)] following the communication from the merchant
system to the transaction-processing entity, completing the
authorized transaction by causing funds to be transferred from
the consumer's financial account to the merchant.
2
Appeal2017-010503
Application 13/797 ,287
REJECTIONS
Claims 1-22 and 25-28 are rejected under 35 U.S.C. § 101 as directed
to a judicial exception without significantly more.
Claims 1-22 and 25-28 are rejected under 35 U.S.C. § 112(b) as
indefinite for failing to particularly point out and distinctly claim the subject
matter that Appellants regard as the invention.
Claims 1, 2, 5, 7, 9, 15, 16, 18, 21, 22, 27, and 28 are rejected under
35 U.S.C. § 103 as unpatentable over Calman (US 2014/0025585 Al,
pub. Jan. 23, 2014), Kortina et al. (US 2011/0137789 Al, pub. June 9, 2011)
("Kortina"), and Franklin et al. (US 6,000,832, iss. Dec. 14, 1999)
("Franklin"). 3
Claims 3, 4, 6, 17, 19, and 20 are rejected under 35 U.S.C. § 103 as
unpatentable over Calman, Kortina, Franklin, and Purdy et al.
(US 2010/0192210 Al, pub. July 29, 2010) ("Purdy").
Claim 8 is rejected under 35 U.S.C. § 103 as unpatentable over
Calman, Kortina, Franklin, and Graylin (US 2013/0054336 Al, pub.
Feb. 28, 2013).
Claim 10 is rejected under 35 U.S.C. § 103 as unpatentable over
Calman, Kortina, Franklin, Flitcroft et al. (US 2003/0028481 Al,
pub. Feb. 6, 2003) ("Flitcroft"), and Sampson (US 2004/0073621 Al,
pub. Apr. 15, 2004).
3 We treat the Examiner's omission of claim 5 in the rejection heading at
page 9 of the Final Office Action as inadvertent in light of its treatment at
pages 12-13.
3
Appeal2017-010503
Application 13/797 ,287
Claim 11 is rejected under 35 U.S.C. § 103 as unpatentable over
Calman, Kortina, Franklin, Flitcroft, Sampson, and Capps et al.
(US 2013/0317923 Al, pub. Nov. 28, 2013) ("Capps").
Claim 12 is rejected under 35 U.S.C. § 103 as unpatentable over
Calman, Kortina, Franklin, Flitcroft, Sampson, and Schmidt et al.
(US 2011/0071986 Al, pub. Mar. 24, 2011) ("Schmidt").
Claim 13 is rejected under 35 U.S.C. § 103 as unpatentable over
Calman, Kortina, Franklin, Flitcroft, Sampson, and Monaco
(WO 01/77851 Al, pub. October 18, 2001).
Claim 14 is rejected under 35 U.S.C. § 103 as unpatentable over
Calman, Kortina, Franklin, and Flitcroft.
Claims 25 and 26 are rejected under 35 U.S.C. § 103 as unpatentable
over Calman, Kortina, Franklin, Flitcroft, and Murakami et al.
(US 4,680,757, iss. July 14, 1987).
ANALYSIS
Patent-Ineligible Subject Matter
Appellants argue the pending claims as a group (App. Br. 7-14). We
select claim 1 as representative. The remaining claims stand or fall with
claim 1. See 37 C.F.R. §4I.37(c)(l)(iv).
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 an implicit exception: "[l]aws of nature, natural phenomena, and
abstract ideas" are not patentable. Alice Corp. v. CLS Bank Int 'l, 573 U.S.
208,216 (2014).
4
Appeal2017-010503
Application 13/797 ,287
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth 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 Corp., 573 U.S. at 217.
The first step in that analysis is to "determine whether the claims at issue are
directed to one of those patent-ineligible concepts." Id. If the claims are not
directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry
ends. Otherwise, the inquiry proceeds to the second step where the elements
of the claims are considered "individually and 'as an ordered combination"'
to determine whether there are additional elements that "'transform the
nature of the claim' into a patent-eligible application." Id. (quoting Mayo,
566 U.S. at 79, 78).
The Court acknowledged in Mayo, that "all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena,
or abstract ideas." Mayo, 566 U.S. at 71. Therefore, the Federal Circuit has
instructed that claims are to be considered in their entirety to determine
"whether their character as a whole is directed to excluded subject matter."
McRO, Inc. v. Bandai Namco Games Am., Inc., 837 F.3d 1299, 1312
(Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc.,
790 F.3d 1343, 1346 (Fed. Cir. 2015)).
Focusing on step one of the Mayo/Alice framework, we are not
persuaded, as an initial matter, by Appellants' argument that the Examiner
erred in determining that claim 1 is directed to an abstract idea (App.
Br. 9-10). The Federal Circuit has explained that "the 'directed to' inquiry
applies a stage-one filter to claims, considered in light of the [S]pecification,
5
Appeal2017-010503
Application 13/797 ,287
based on whether 'their character as a whole is directed to excluded subject
matter."' Enfish, LLCv. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir.
2016) (quoting Internet Patents Corp., 790 F.3d at 1346). It asks whether
the focus of the claims is on a specific improvement in relevant technology
or on a process that itself qualifies as an "abstract idea" for which computers
are invoked merely as a tool. See id. at 1335-36. Here, it is clear from the
Specification, including the claim language, that the claims focus on an
abstract idea, and not on any improvement to technology and/or a technical
field.
The Specification is entitled "DISTRIBUTED AUTHENTICITY
VERIFICATION FOR CONSUMER PAYMENT TRANSACTIONS," and
discloses that, in one aspect, the invention "pertains to a method of
processing a transaction among a consumer, a merchant point-of-sale
system, and a transaction processing entity" (Spec. ,r 5). The Background
section of the Specification describes that it is common practice for
consumers to pay a merchant electronically for goods or services, and notes
that systems that allow consumers to pay for a transaction at the point-of-
sale, using a mobile device to display a token, are becoming widely accepted
(id. ,r 1 ). These mobile device tokens typically contain static information
that must be transmitted to a centralized payment processing system for
authentication and payment authorization (id.); if, however, the centralized
payment processing system loses network access, the Specification describes
that the token cannot be used for payment "without significant risk of fraud"
(id. ,r 2). The claimed invention is intended to address this problem by
encrypting a payment token, for display on a consumer's mobile device,
with dynamic trust data (e.g., transaction history and/or token generation
6
Appeal2017-010503
Application 13/797 ,287
date) along with the financial account information; an approach that,
according to the Specification, "enables the merchant system to make an
informed decision about whether to accept payment without communication
with the central processing system" and "protects the consumer's account
information from theft" (id. ,r 4).
Understood in light of the Specification, claim 1 is directed to a
method for verifying a payment transaction using a mobile device token by
( 1) encrypting the token with consumer identifying information and trust
data and storing the encrypted token on a mobile device, i.e., "generating a
token encrypted with data identifying the consumer and trust data for the
consumer and at least one individual with whom the consumer is associated"
and "receiving ... and storing the token by a device of the consumer"
(steps (a) and (b)); (2) decrypting the token upon presentation of the mobile
device in connection with a purchase transaction, i.e., "reading and
decrypting, by the merchant system, the token upon presentation thereof by
the consumer's device in connection with the transaction" ( step ( c));
(3) authorizing the transaction if the decryption is successful, i.e.,
"authorizing, by the merchant system, the transaction based on (i) successful
decryption of the token and (ii) the trust data" (step (d)); and (4) transmitting
a record of the transaction and authorization to a transaction processing
entity to complete the transaction, i.e., "subsequent to authorization of the
transaction by the merchant system, communicating, by the merchant to the
transaction-processing entity ... a record of the transaction and
authorization thereof' and "following the communication from the merchant
system to the transaction-processing entity, completing the authorized
transaction by causing funds to be transferred from the consumer's financial
7
Appeal2017-010503
Application 13/797 ,287
account to the merchant" (steps (e) and (f)). Simply put, claim 1 is directed
to receiving, analyzing, and transmitting data to verify a payment card
transaction - to a commercial interaction, which is a method of organizing
human activity, and, therefore, an abstract idea. See 2019 REVISED PATENT
SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50, 52 (Jan. 7, 2019)
("Revised Guidance").
The Federal Circuit has held that abstract ideas include receiving and
sending information over a network with no further details or specification,
see, e.g., buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014)
("That a computer receives and sends the information over a network -
with no further specification-is not even arguably inventive."), and that
abstract ideas also include collecting data, analyzing the data, and displaying
the results of the collection and analysis, including when limited to
particular content. See, e.g., Intellectual Ventures I LLC v. Capital One Fin.
Corp., 850 F.3d 1332, 1340 (Fed. Cir. 2017) (identifying the abstract idea of
collecting, displaying, and manipulating data); Electric Power Group, LLC
v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016) (characterizing
collecting information, analyzing information by steps people go through in
their minds, or by mathematical algorithms, and presenting the results of
collecting and analyzing information, without more, as matters within the
realm of abstract ideas). Data encryption/decryption also is an abstract idea.
See, e.g., Personalized Media Commc 'ns, LLC v. Amazon.com, Inc., 161 F.
Supp. 3d 325, 337 (D. Del. 2015), aff'd, 671 F. App'x 777 (Mem) (Fed. Cir.
2016) ("decryption" is an abstract idea). And the court held, in CyberSource
Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1370 (Fed. Cir. 2011), that
verifying Internet credit card transactions by determining whether an
8
Appeal2017-010503
Application 13/797 ,287
Internet address relating to a particular transaction is consistent with other
previously used Internet addresses is abstract.
We find no indication in the Specification, nor do Appellants direct us
to any indication, that the operations recited in claim 1 invoke any assertedly
inventive programming, require any specialized computer hardware or other
inventive computer components, i.e., a particular machine, or that the
claimed invention is implemented using other than generic computer
components to perform generic computer functions. See DDR Holdings,
LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) ("[A]fter
Alice, there can remain no doubt: recitation of generic computer limitations
does not make an otherwise ineligible claim patent-eligible."). The
Specification, in fact, suggests just the opposite, i.e., that the claimed
invention may be implemented using only generic computer components
(see, e.g., Spec. ,r,r 19, 20).
We also find no indication in the Specification that the claimed
invention effects a transformation or reduction of a particular article to a
different state or thing. Nor do we find anything of record, short of attorney
argument, that attributes an improvement in computer technology and/or
functionality to the claimed invention or that otherwise indicates that the
claimed invention integrates the abstract idea into a "practical application,"
as that phrase is used in the Revised Guidance. 4
4 We note that Appellants' briefs were filed, and the Examiner's Answer
mailed, before the USPTO issued the Revised Guidance, which, by its terms,
applies to all applications, and to all patents resulting from applications, filed
before, on, or after January 7, 2019. In accordance with the Revised
Guidance, a claim is generally considered "directed to" an abstract idea if
( 1) the claim recites subject matter falling within one of the following
9
Appeal2017-010503
Application 13/797 ,287
Citing Enfzsh, Appellants argue that the pending claims are "directed
to the technical problem of reliably concluding a transaction in the absence
of network connectivity between the point-of-sale system and the transaction
processing entity," and that the claims recite a technical solution, i.e., using a
token encrypted with trust data specific to the consumer, that "overcomes
what may be a momentary glitch or a catastrophic network failure" (App.
Br. 10). Appellants maintain that the pending claims, like those in Enfish,
thus, "recite a specific implementation of a solution to a problem in the art of
network-based electronic commerce" (App. Br. 10). But, we do not agree
that claim 1 is analogous to the claims in Enfzsh.
The Federal Circuit, in Enfzsh, rejected a§ 101 challenge at the step
one stage of the Mayo/Alice analysis because the claims at issue focused on
"a specific type of data structure [i.e., a self-referential table for a computer
database] designed to improve the way a computer stores and retrieves data
in memory." Enfish, 822 F.3d at 1339. Based on the "plain focus of the
groupings of abstract ideas: (a) mathematical concepts; (b) certain methods
of organizing human activity, e.g., fundamental economic principles or
practices, commercial or legal interactions; and ( c) mental processes, and
(2) the claim does not integrate the abstract idea into a practical application,
i.e., apply, rely on, or use the judicial exception in a manner that imposes a
meaningful limit on the judicial exception, such that the clam is more than a
drafting effort designed to monopolize the judicial exception. See Revised
Guidance, 84 Fed. Reg. at 54--55. The Revised Guidance references
MANUAL OF PATENT EXAMINING PROCEDURE ("MPEP") §§ 2106.05(a}-(c)
and ( e }-(h) in describing the considerations that are indicative that an
additional element or combination of elements integrates the judicial
exception, e.g., the abstract idea, into a practical application. Id. at 55. If
the recited judicial exception is integrated into a practical application, as
determined under one or more of these MPEP sections, the claim is not
"directed to" the judicial exception.
10
Appeal2017-010503
Application 13/797 ,287
claims," the court, thus, held that the claims were directed to "a specific
improvement to the way computers operate, embodied in the self-referential
table," and, as such, were more than a mere abstract idea. Id. at 1336. We
find no parallel here between claim 1 and the claims in Enfzsh nor any
comparable aspect in claim 1 that represents an improvement to computer
functionality.
Turning to the second step of the Mayo/Alice framework, Appellants
argue that "[ e ]ven if the present claims are considered to be directed to
'abstract' subject matter under the first Alice test, they clearly qualify as
patentable under the second step of the analysis" (App. Br. 10). Citing the
Federal Circuit decision in DDR Holdings, LLC v. Hotels.com, L.P.,
773 F.3d 1245 (Fed. Cir. 2014), Appellants maintain that the claims address
a problem that is network-centric in nature, and that, in encrypting both
identifying information and trust data within a token stored electronically in
a mobile device, the claims "clearly recite a 'solution that is necessarily
rooted in' the new medium within the meaning of DDR" (App. Br. 12).
There is no dispute that claim 1 addresses the problem of preventing
fraud in electronic transactions. Yet, although these transactions may be
network-centric, preventing fraud and authenticating transactions are not
problems rooted in technology or arising out of computer networks, like
those in DDR Holdings. Instead, these are business problems that existed
before, and still exist, outside the realm of computers and computer
networks.
The court, in DDR Holdings, held that the claims distinguished over
patent-ineligible claims that "broadly and generically claim 'use of the
Internet' to perform an abstract business practice (with insignificant added
11
Appeal2017-010503
Application 13/797 ,287
activity)," because they "specify how interactions with the Internet are
manipulated to yield a desired result - a result that overrides the routine
and conventional sequence of events ordinarily triggered by the click of a
hyperlink." Id. Here, we do not find, and Appellants do not identify, any
analogous modification to the routine and conventional functioning of
computer network technology. At best, the claimed invention appears to use
generic computer components ( e.g., a consumer device, a POS system, a
communication network ( claim 1)) to perform an abstract business practice
(i.e., payment card verification).
Appellants' reliance on BASCOM Global Internet Services, Inc. v.
AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016) is similarly misplaced.
In BASCOM, the court determined that claims described an inventive
concept in the non-conventional and non-generic arrangement of known,
conventional pieces. BASCOM, 827 F.3d at 1350. Specifically, the Federal
Circuit determined that the claimed installation of a filtering tool at a
specific location, remote from the end-users, with customizable filtering
features specific to each end user provided an inventive concept in that it
gave the filtering tool both the benefits of a filter on a local computer and the
benefits of a filter on the ISP server. Id.
Appellants ostensibly maintain here that the claims describe an
inventive concept in the non-conventional arrangement of a merchant
system, a transaction server, and a consumer device (App. Br. 13). But we
do not agree that BASCOM is sufficiently analogous so to control the
outcome here.
In BASCOM, the Federal Circuit held that the second step of the
Mayo/Alice framework was satisfied because the claimed invention
12
Appeal2017-010503
Application 13/797 ,287
"represents a 'software-based invention[] that improve[s] the performance
of the computer system itself."' BASCOM, 827 F.3d at 1351 (stating that
like DDR Holdings, where the patent "claimed a technical solution to a
problem unique to the Internet," the patent in BASCOM claimed a
"technology-based solution ... to filter content on the Internet that
overcomes existing problems with other Internet filtering systems ...
making it more dynamic and efficient") ( citations omitted). We are not
persuaded that a comparable situation is presented here.
We also are not persuaded of Examiner error to the extent Appellants
maintain the claims are patent-eligible because the claims would not
preempt other ways to verify payments (App. Br. 13-14; see also Reply
Br. 4--5). Although the Supreme Court has described "the concern that
drives [the exclusion of abstract ideas from patent eligible subject matter] as
one of pre-emption," Alice Corp., 573 U.S. at 216, characterizing
preemption as a driving concern for patent eligibility is not the same as
characterizing preemption as the sole test for patent eligibility. "The
Supreme Court has made clear that the principle of preemption is the basis
for the judicial exceptions to patentability" and "[ f]or this reason, questions
on preemption are inherent in and resolved by the§ 101 analysis." Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)
(citing Alice Corp., 134 S. Ct. at 2354). "[P]reemption may signal patent
ineligible subject matter, [but] the absence of complete preemption does not
demonstrate patent eligibility." Id.
Appellants also misapprehend the controlling precedent to the extent
that Appellants maintain that the claims are patent-eligible, i.e., that the
claims include limitations that are not well-understood, routine, and
13
Appeal2017-010503
Application 13/797 ,287
conventional, because the claims allegedly are novel and/or non-obvious in
view of the prior art (App. Br. 14; see also Reply Br. 4). Neither a finding
of novelty nor a non-obviousness determination automatically leads to the
conclusion that the claimed subject matter is patent-eligible.
"Groundbreaking, innovative, or even brilliant discovery does not by itself
satisfy the§ 101 inquiry." Ass 'nfor Molecular Pathology v. Myriad
Genetics, Inc., 569 U.S. 576, 591 (2013). A novel and non-obvious claim
directed to a purely abstract idea is, nonetheless, patent-ineligible. See
Mayo, 566 U.S. at 90; see also Diamond v. Diehr, 450 U.S. 175, 188-89
(1981) ("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.").
We are not persuaded, on the present record, that the Examiner erred
in rejecting independent claim 1 under 35 U.S.C. § 101. Therefore, we
sustain the Examiner's rejection of claim 1, and claims 2-22 and 25-28,
which fall with claim 1.
Indefiniteness
Appellants do not provide any response to the Examiner's rejection of
claims 1-22 and 25-28 under 35 U.S.C. § 112(b). Therefore, the rejection is
summarily sustained.
Obviousness
Independent Claims 1 and 16 and Dependent Claims 2, 5, 7, 9, 15, 18, 21,
22, 27, and 28
We are persuaded by Appellants' argument that the Examiner erred in
rejecting independent claims 1 and 16 under 35 U.S.C. § 103(a) because
14
Appeal2017-010503
Application 13/797 ,287
none of Cahnan, Kortina, and Franklin, individually or in combination,
discloses or suggests "generating a token encrypted with data identifying the
consumer and trust data for the consumer," as recited in claim 1, and
similarly recited in claim 16 (App. Br. 14--20).
In rejecting claims 1 and 16 under§ 103(a), the Examiner cites
Calman as disclosing substantially all the elements of the claims, including
"generating a token encrypted" (Final Act. 11 ). But, the Examiner
acknowledges that Calman does not specifically disclose that the token is
encrypted with "data identifying the consumer and trust data for the
consumer," as called for in claims 1 and 16 (id.). And the Examiner relies
on Franklin and Kortina to cure the deficiency of Calman (id. at 11-12
( citing Franklin as disclosing data identifying the consumer and Kortina as
disclosing trust data for the consumer)).
Appellants do not object to the Examiner's reliance on Franklin.
However, Appellants maintain that the combination of Calman and Kortina
is improper and could only be based on impermissible hindsight (App.
Br. 15-20). We agree.
Kortina is directed to a trust-based transaction system, and discloses
that users input personal and financial information into the system, which
validates the information to generate trusted financial profiles (Kortina
Abstract). Each user can establish trusted financial links with other users
who have accounts within the trust based transaction system (id.; see also id.
,r 57). These trusted financial links then provide a mechanism by which one
user ( e.g., user A) may allow another user ( e.g., user B) to withdraw money
from the link provider account within the limits set by user A or the system
(id.). Kortina further discloses that, in one embodiment, users may access
15
Appeal2017-010503
Application 13/797 ,287
trust graph data, e.g., a financial focused trust graph, to examine the
trustworthiness of individuals on an absolute basis and relative to a wider
group (id. ,r 87)
In rejecting claim 1 and 16, the Examiner cites paragraphs 111 and
113 of Kortina, where Kortina discloses that the trust based system analyzes
transaction details of users in the system with the trust graph to determine
whether a particular transaction is valid by assigning a percentage likelihood
of confidence level in the transaction, e.g., on a scale of 1 % to 100%, and
describes that one criterion for assigning a confidence level is to analyze a
historical number of transactions or percentage of transactions initiated by a
user, which were ultimately deemed fraudulent (Final Act. 11-12). The
Examiner concludes that it would have been obvious to a person of ordinary
skill in the art at the time of Appellants' invention to "combine the teachings
of using a trust values tied to accounts as disclosed by Kortina to the
teachings of using various account/merchant/transaction terms in creating
tokens for use in transaction[ s] as disclosed by the combination of Calman
and Franklin" in order to "further ensure that transactions are authorized and
will be processed without error" (id. at 12).
We agree with Appellants that the Examiner does not adequately
explain why a person of ordinary skill in the art would have had an apparent
reason, in view of Kortina, to encrypt a token with trust data, as called for in
the claims (App. Br. 15-20). As Appellants observe, Kortina does not
involve the generation or communication of tokens; nor does it involve
commercial transactions; instead, Kortina's system depends on a web of
trust and relationships supported by a social network (id. at 15). The
Examiner asserts that combining the teachings of Kortina with those of
16
Appeal2017-010503
Application 13/797 ,287
Cahnan and Franklin would "further ensure that transactions are authorized
and will be processed without error" (Final Act. 12). Yet, in determining
that there is an apparent reason to combine applied references, the
Examiner's analysis must be explicit and "cannot be sustained by mere
conclusory statements." KSR!nt'l Co. v. Teleflex Inc., 550 U.S. 398,418
(2007).
The Examiner has not articulated a rational apparent reason to
combine Calman and Kortina to arrive at Appellants' claimed invention, and
has thereby failed to establish a prima facie case of obviousness. See KSR,
550 U.S. at 418 (holding that a prima facie case of obviousness requires
showing that one of ordinary skill in the art would have had both an apparent
reason to modify the prior art and predictability or a reasonable expectation
of success in doing so). Therefore, we do not sustain the Examiner's
rejection of independent claims 1 and 16 under 35 U.S.C. § 103(a). For the
same reasons, we also do not sustain the Examiner's rejection of dependent
claims 2, 5, 7, 9, 15, 18, 21, 22, 27, and 28. Cf In re Fritch, 972 F.2d 1260,
1266 (Fed. Cir. 1992) ("dependent claims are nonobvious if the independent
claims from which they depend are nonobvious").
Dependent Claims 3, 4, 6, 8, 10-14, 17, 19, 20, 25, and 26
The Examiner's rejections of dependent claims 3, 4, 6, 8, 10-14, 17,
19, 20, 25, and 26 do not cure the deficiency in the Examiner's rejection of
independent claims 1 and 16. Therefore, we do not sustain the Examiner's
rejections of dependent claims 3, 4, 6, 8, 10-14, 17, 19, 20, 25, and 26 under
35 U.S.C. § 103(a).
17
Appeal2017-010503
Application 13/797 ,287
DECISION
The Examiner's rejection of claims 1-22 and 25-28 under 35 U.S.C.
§ 101 is affirmed.
The Examiner's rejection of claims 1-22 and 25-28 under 35 U.S.C.
§ 112(b) is affirmed.
The Examiner's rejections of claims 1-22 and 25-28 under 35 U.S.C.
§ 103(a) are reversed.
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
18