Ex Parte Rohatgi

Patent Trial and Appeal Board

Jun 20, 2016

12857556 (P.T.A.B. Jun. 20, 2016)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/857,556 08/17/2010
36955 7590 06/21/2016
MOORE PATENTS
794 LOS ROBLES A VENUE
PALO ALTO, CA 94306-3159
FIRST NAMED INVENTOR
Sanjay Rohatgi
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.
561.0lNP 4228
EXAMINER
CRANFORD, MICHAEL D
ART UNIT PAPER NUMBER
3694
MAILDATE DELIVERY MODE
06/21/2016 PAPER
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.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte SANJA Y ROHATGI
Appeal2013---009746
Application 12/857,556
Technology Center 3600
Before ANTON W. PETTING, NINA L. MEDLOCK, and
TARA L. HUTCHINGS, Administrative Patent Judges.
PETTING, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE1
Sanjay Rohatgi (Appellant) seeks review under 35 U.S.C. § 134 of a
final rejection of claims 15-24, the only claims pending in the application on
appeal. We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b).
1 Our decision will make reference to the Appellant's Appeal Brief ("Appeal
Br.," filed February 14, 2012) and Reply Brief ("Reply Br.," filed August 4,
2013), and the Examiner's Answer ("Ans.," mailed June 5, 2013), and Final
Action ("Final Act.," mailed July 6, 2011 ).
Appeal2013-009746
Application 12/857,556
The Appellant invented a way of generation, use and transfer of virtual
financial instruments using mobile communication devices. Specification
para. 2.
An understanding of the invention can be derived from a reading of
exemplary claim 15, which is reproduced below (bracketed matter and some
paragraphing added).
15. A method for facilitating financial transactions comprising
[ 1] using software, hardware, or a combination thereof within a
networked computer system
to create a virtual financial instrument for a user,
wherein said virtual financial instrument can be funded
using any combination of
cash, bank account, credit card, membership card,
insurance card, debit card, check, bank card, and
gift card;
[2 J configuring a set of rules
defining limitations for the use of said virtual financial
instrument;
[3] authenticating said user;
[ 4] validating a real world financial transaction
according to said set of rules;
and
[5] transmitting said real world financial transaction
or
over a computerized financial network
if said validating is successful
denying said financial transaction
if said validating is not successful.
2
Appeal2013-009746
Application 12/857,556
The Examiner relies upon the following prior art:
Ferris US 2008/0005002 Al
Drummond US 2009/0218394 Al
Jan.3,2008
Sept. 3, 2009
Claims 15-23 stand rejected under 35 U.S.C. § 101 as directed to non-
statutory subject matter.
Claims 15-24 stand rejected under 35 U.S.C. § 103(a) as unpatentable
over Drummond and Ferris.
ISSUES
The issues of obviousness tum primarily on whether the virtual
instruments Drummond describes are virtual financial instruments and
vvhether a teaching in Ferris is pertinent to the netvvork Drt1mmond
describes.
FACTS PERTINENT TO THE ISSUES
The following enumerated Findings of Fact (FF) are believed to be
supported by a preponderance of the evidence.
Facts Related to Claim Construction
01. The disclosure contains no lexicographic definition of "virtual
financial instrument."
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Appeal2013-009746
Application 12/857,556
Facts Related to the Prior Art
Drummond
02. Dnm1mond is directed to improved banking machines.
Drummond para. 2.
03. Drummond describes government regulations or good business
practice limiting the size and amounts of deposits which may be
made into an A TM to prevent "money laundering" or other
suspicious activities. The monitor software limits the amount of
any single deposit to below a set limit and communicates with the
home bank back office system to prevent a series of deposits
within a preset time from exceeding a certain limit. The monitor
limits certain transactions that may be carried on at the banking
machine responsive to instructions from foreign servers.
Drummond para. 122.
04. Drummond describes using its machine to pay bills with
payment by cash, check, credit card, debit card, smart card,
balance transfer, etc. The bill may be a bank loan, a credit card
bill, a utility bill, merchant invoice, or some other type of bill
involving due payment. Drummond para. 250.
05. Drummond describes a bank or other entity keeping a virtual
checking account on behalf of a customer. The images of a
customer's checks would be electronically stored by the bank on
behalf of the customer. Thus, a customer would be able to view
their checking account information online in real time or near real
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Appeal2013-009746
Application 12/857,556
time. Furthermore, a customer's checking account information,
including the images of checks, could be sent to a desired address
at any time as authorized by a customer. Thus, the customer could
have a virtual bank. Drummond para. 262.
06. Instead of Drummond's machine actually printing a check for
deposit on behalf of the customer, the machine may generate only
an electronic image of a virtual check for deposit. A check image
may still be generated and stored. That is, the banking machine
generates, the customer electronically signs and then the machine
stores a virtual check. Again, the check image may be
electronically sent or made accessible to the bank on which the
funds are withdrawn, the Federal Reserve, the payor customer, the
payee and/or other entities. Drummond para. 281.
07. A check or other instrument may be produced in either hard
copy or virtual form by Drummond's machine. The customer
may sign the instrument (physically if in hard copy, or
electronically if virtual) and then deposit the instrument in the
machine. In the case of a virtual instrument the user would
provide one or more inputs meeting the legal requirements of an
electronic signature, and would provide one or more inputs
through input devices on the machine to indicate the deposit of the
instrument. Drummond para. 283.
5
Appeal2013-009746
Application 12/857,556
Ferris
08. Ferris is directed to a secure communication network operating
between a central administrator, operating as a hedge fund of
funds, and numerous separate investment funds. It relates also to
a method of enabling a hedge fund of funds to manage risk. Ferris
para. 2.
09. Ferris describes a secure communication network operating
between the fund of funds (FoF), and the numerous separate
investment funds, each investment fund including several different
instruments. Critically, each instrument in a portfolio is modelled
as a software component that responds to a common risk factor
response APL. Ferris para. 3 3.
ANALYSIS
Claims 15-24 rejected under 35 U.S.C. § 103(a) as unpatentable over
Drummond and Ferris
Appellant argues that Drummond does not use a virtual financial
instrument, that Drummond's rules are for transactions rather than use of a
virtual financial instrument, and that Ferris is not pertinent art or
combinable. Appeal Br. 6-16. Appellant does not lexicographically define
a virtual financial instrument. The plain meaning is a financial instrument
that is virtual as contrasted with physical. Drummond explicitly describes
virtual checks and virtual instruments generally.
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Appeal2013-009746
Application 12/857,556
We are persuaded by Appellant's argument that Drummond fails to
describe funding virtual checks from all of the enumerated sources in
claim 15. Appeal Br. 9-10. The limitation at issue is "said virtual financial
instrument can be funded using any combination of ... membership card,
insurance card, ... ". Neither reference describes funding a virtual
instrument from a membership or insurance card, and the Examiner makes
no findings otherwise.
Claim 24, unlike claims 15-23, is directed to a structure rather than a
process, with five recited parts, viz. a network, creation module,
communications module, authentication module, and transaction module.
Although all of these parts are labeled as modules, the claim does not recite
any manner in which the word module affects the structure or function of the
parts.
As to structural inventions; such claims must be distinguished from the
prior art in terms of structure rather than function, see, e.g., In re Schreiber,
128 F.3d 1473, 1477-78 (Fed. Cir. 1997). In order to satisfy the functional
limitations in an apparatus claim, however, the prior art apparatus as
disclosed must be capable of performing the claimed function. Id. at 1478.
When the functional language is associated with programming or some other
structure required to perform the function, that programming or structure
must be present in order to meet the claim limitation. Typhoon Touch
Techs., Inc. v. Dell, Inc., 659 F.3d 1376, 1380 (Fed. Cir. 2011) (discussing
Microprocessor Enhancement Corp. v. Texas Instruments, Inc., 520 F.3d
1367 (Fed. Cir. 2008)). In some circumstances generic structural disclosures
may be sufficient to meet the functional requirements, see Ergo Licensing,
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Appeal2013-009746
Application 12/857,556
LLC v. CareFusion 303, Inc., 673 F.3d 1361, 1364 (Fed. Cir. 2012) (citing
Telcordia Techs., Inc. v. Cisco Sys., Inc., 612 F.3d 1365, 1376-77 (Fed. Cir.
2010)).
Also, a structural invention is not distinguished by the work product it
operates upon, such as data in a computer. "[E]xpressions relating the
apparatus to contents thereof during an intended operation are of no
significance in determining patentability of the apparatus claim." Ex parte
Thibault, 164 USPQ 666, 667 (Bd. App. 1969). Furthermore, "inclusion of
material or article worked upon by a structure being claimed does not impart
patentabilityto the claims." In re Otto, 312 F.2d 937, 940 (CCPA 1963).
The communications module, authentication module, and transaction
module limitations recite conventional banking communications,
authentication, and transaction processing albeit with a virtual instrument.
Neither the claims nor the disclosure indicate any structural difference in
such system parts based solely on a virtual nature of a financial instrument.
Indeed the known practice of banking transactions using only a credit card
or checking account number without a physical card or check evidences the
identity of structure operating upon physical and virtual instruments. As to
creation, again, Drummond describes creating virtual checks.
Although claim 24 has a wherein clause that is similar to claim 15 in
reciting the capacity for funding a virtual instrument from various sources,
the only structure required for funding an instrument is the structure for
transferring financial amounts inherent in Drummond as well as all bank
systems generically.
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Appeal2013-009746
Application 12/857,556
Claims 15-23 rejected under 35 U.S.C. § 1 OJ as directed to non-statutory
subject matter
The Supreme Court decision in Bilski v Kappas, 561 U.S. 593 (2010)
issued on June 28, 2010. The Final Action was mailed subsequently on July
6, 2011. The Examiner found the claimed subject matter patent ineligible
because it failed the machine or transformation test. Final Act. 2-3. This
was not a dispositive test. Bilski held that the machine or transformation test
is not the sole test for determining whether a process claim is abstract. Id. at
614. Indeed, the Examiner cited Bilski while incorrectly describing its
holding. The Examiner did not correct this in the Answer.
CONCLUSIONS OF LAW
The rejection of claims 15-23 under 35 U.S.C. § 101 as directed to non-
statutory subject matter 1s improper.
The rejection of claims 15-23 under 35 U.S.C. § 103(a) as unpatentable
over Drummond and Ferris is improper.
The rejection of claim 24 under 35 U.S.C. § 103(a) as unpatentable over
Drummond and Ferris is proper.
NEW GROUND OF REJECTION
The following new grounds of rejection are entered pursuant to
37 C.F.R. § 41.50(b).
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Appeal2013-009746
Application 12/857,556
Claims 15-24 are rejected under 35 U.S.C. § 101 as directed to non-
statutory subject matter.
Claims 15-24 are rejected under 35 U.S.C. § 112, first paragraph, as
lacking a supporting written description within the original disclosure.
As to the issue of statutory subject matter, the Supreme Court
set forth a framework for distinguishing patents that claim laws
of nature, natural phenomena, and abstract ideas from those that
claim patent-eligible applications of those concepts. First, []
determine whether the claims at issue are directed to one of
those patent-ineligible concepts. [] If so, we then ask, "[ w ]hat
else is there in the claims before us? [] To answer that question,
[] 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. [The Court] described step two of this
analysis 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 Corp., Pty. Ltd. v CLS Bank Intl, 134 S. Ct. 2347, 2355 (2014) (citing
Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct.
1289 (2012)).
To perform this test, we must first determine whether the claims at issue
are directed to a patent-ineligible concept.
Although the Court in Alice made a direct finding as to what the claims
were directed to, we find that this case's claims themselves and the
Specification provide enough information to inform one as to what they are
directed to.
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Appeal2013-009746
Application 12/857,556
The preamble to claim 15 recites that it is a method of facilitating
financial transactions. The five steps in claim 15 result in a financial
transaction. The Specification at 1 recites that the invention relates to
generation, use and transfer of virtual financial instruments. Thus, all this
evidence shows that claim 1 is directed to financial transactions.
It follows from prior Supreme Court cases, and Bilski in particular, that
the claims at issue here are directed to an abstract idea. Like the risk
hedging in Bilski, the concept of financial transactions is a fundamental
economic practice long prevalent in our system of commerce. The use of
financial transactions is also a building block of the modem economy. Thus,
financial transactions, like hedging, is an "abstract idea" beyond the scope of
§ 101. See Alice Corp. Pty. Ltd. at 2356.
As in Alice Corp. Pty. Ltd., we need not labor to delimit the precise
contours of the "abstract ideas" category in this case. It is enough to
recognize that there is no meaningful distinction in the level of abstraction
between the concept of risk hedging in Bilski and the concept of financial
transactions at issue here. Both are squarely within the realm of "abstract
ideas" as the Court has used that term. See Alice Corp. Pty. Ltd.at 2357.
The remaining claims merely describe examples of financial transaction
rules and embodiments. We conclude that the claims at issue are directed to
a patent-ineligible concept.
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Appeal2013-009746
Application 12/857,556
The introduction of a computer into the claims does not alter the analysis
at Mayo step two.
the mere recitation of a generic computer cannot transform a
patent-ineligible abstract idea into a patent-eligible invention.
Stating an abstract idea "while adding the words 'apply it'" is
not enough for patent eligibility. Nor is limiting the use of an
abstract idea "'to a particular technological environment."'
Stating an abstract idea while adding the words "apply it with a
computer" simply combines those two steps, with the same
deficient result. Thus, if a patent's recitation of a computer
amounts to a mere instruction to "implement[t]" an abstract
idea "on ... a computer," that addition cannot impart patent
eligibility. This conclusion accords with the preemption
concern that undergirds our § 101 jurisprudence. Given the
ubiquity of computers, wholly generic computer
implementation is not generally the sort of "additional
feature [ e]" that provides any "practical assurance that the
process is more than a drafting effort designed to monopolize
the [abstract idea] itself."
Alice Corp. Pty. Ltd., 134 S. Ct. at 2358 (citations omitted).
"[T]he relevant question is whether the claims here do more than simply
instruct the practitioner to implement the abstract idea [] on a generic
computer." Alice Corp. Pty. Ltd., 134 S. Ct. at 2359. They do not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to create data and rules, authenticate and validate users and data,
and transmit data amounts to electronic data query and retrieval---one of the
most basic functions of a computer. The limitation of "a virtual financial
instrument" is not a step, but a recitation of data content, viz. the binary data
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Appeal2013-009746
Application 12/857,556
equivalent of a physical instrument. All of these computer functions are
well-understood, routine, conventional activities previously known to the
industry. In short, each step does no more than require a generic computer
to perform generic computer functions.
Considered as an ordered combination, the computer components of
Appellant's method add nothing that is not already present when the steps
are considered separately. Viewed as a whole, Appellant's method claims
simply recite the concept of financial transactions as performed by a generic
computer. The method claims do not, for example, purport to improve the
functioning of the computer itself. Nor do they effect an improvement in
any other technology or technical field. Instead, the claims at issue amount
to nothing significantly more than an instruction to apply the abstract idea of
financial transactions using some unspecified, generic computer. Under our
precedents; that is not enough to transform an abstract idea into a patent-
eligible invention. See Alice Corp. Pty. Ltd. at 2360.
System claim 24 is non-statutory for the same reasons. "The system
claims are no different from the method claims in substance. The method
claims recite the abstract idea implemented on a generic computer; the
system claims recite a handful of generic computer components configured
to implement the same idea." Id.
As to the written description rejection, both independent claims recite the
capacity to fund a virtual financial instrument from a membership card or
insurance card. The instant Specification mentions neither of these cards at
all. The parent application (12/099,713) describes such cards for
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Appeal2013-009746
Application 12/857,556
identification or for bill payment, but not for funding a virtual financial
instrument.
[t]he test for sufficiency is whether the disclosure of the
application relied upon reasonably conveys to those skilled in
the art that the inventor had possession of the claimed subject
matter as of the filing date ....
The term "possession," however, has never been very
enlightening. It implies that as long as one can produce records
documenting a written description of a claimed invention, one
can show possession. But the hallmark of written description is
disclosure. Thus, "possession as shown in the disclosure" is a
more complete formulation. Yet whatever the specific
articulation, the test requires an objective inquiry into the four
comers of the specification from the perspective of a person of
ordinary skill in the art. Based on that inquiry, the specification
must describe an invention understandable to that skilled artisan
and show that the inventor actually invented the invention
claimed.
Ariad Pharms., Inc. v. Eli Lil~v and Co., 598 F. 3d 1336, 1351 (Fed. Cir.
2010) (en bane).
Neither Specification shows possession within its four comers of the idea of
funding a virtual financial instrument from an insurance or membership
card.
DECISION
The rejection of claims 15-23 is reversed.
The rejection of claim 24 is affirmed.
The following new grounds of rejection are entered pursuant to
37 C.F.R. § 41.50(b).
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Appeal2013-009746
Application 12/857,556
Claims 15-24 are rejected under 35 U.S.C. § 101 as directed to non-
statutory subject matter.
Claims 15-24 are rejected under 35 U.S.C. § 112, first paragraph, as
lacking a supporting written description within the original disclosure.
Our decision is not a final agency action.
In addition to affirming the Examiner's rejection(s) of one or more
claims, this decision contains new grounds of rejection pursuant to 37 CPR§
41.50(b). 37 CPR§ 41.50(b) provides "[a] new ground of rejection pursuant
to this paragraph shall not be considered final for judicial review." This
Decision contains a new rejection within the meaning of
37 C.F.R. § 41.50(b) (2007).
37 C.F.R. § 41.50(b) also provides that Appellant[s]; WITHIN TWO
MONTHS FROM THE DATE OF THE DECISION, must exercise one of
the following two options with respect to the new rejection:
(1) Reopen prosecution. Submit an appropriate amendment of
the claims so rejected or new evidence relating to the claims
so rejected, or both, and have the matter reconsidered by the
Examiner, in which event the proceeding will be remanded
to the Examiner. . . .
(2) Request rehearing. Request that the proceeding be reheard
under§ 41.52 by the Board upon the same record ....
Should the Appellant[ s] elect to prosecute further before the Examiner
pursuant to 3 7 CPR § 41. 50(b )( 1 ), in order to preserve the right to seek
review under 35 U.S.C. §§ 141or145 with respect to the affirmed rejection,
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Application 12/857,556
the effective date of the affirmance is deferred until conclusion of the
prosecution before the examiner unless, as a mere incident to the limited
prosecution, the affirmed rejection is overcome.
If the Appellant[ s] elect prosecution before the Examiner and this
does not result in allowance of the application, abandonment or a second
appeal, this case should be returned to the Patent Trial and Appeal Board for
final action on the affirmed rejection, including any timely request for
rehearing thereof.
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) (2011).
AFFIRMED-IN-PART; 41.50(b)
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