Ex Parte Sahadevan

Patent Trial and Appeal Board

May 9, 2018

13113865 (P.T.A.B. May. 9, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/113,865 05/23/2011
75564 7590 05/11/2018
DANIEL M. FITZGERALD (21652)
ARMSTRONG TEASDALE LLP
7700 Forsyth Boulevard
Suite 1800
St. Louis, MO 63105
FIRST NAMED INVENTOR
Sharath Sahadevan
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.
21652-00138 1411
EXAMINER
CHAKRA V ART!, ARUNA VA
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
05/11/2018 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):
USpatents@armstrongteasdale.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Exparte SHARATH SAHADEVAN
Appeal2017-002320
Application 13/113,865 1
Technology Center 3600
Before HUNG H. BUI, NABEEL U. KHAN, and PHILLIP A. BENNETT,
Administrative Patent Judges.
BUI, Administrative Patent Judge.
DECISION ON APPEAL
Appellant seeks our review under 35 U.S.C. § 134(a) of the
Examiner's Final Office Action rejecting claims 1, 3, 5-7, 9-11, 13-15, 17-
20, and 22-29, all of which are pending on appeal. Claims 2, 4, 8, 12, 16,
and 21 are withdrawn from consideration. Final Act. 1. We have
jurisdiction under 35 U.S.C. § 6(b ).
We AFFIRM. 2
1 According to Appellant, the real party in interest is MasterCard
International Incorporated. App. Br. 4.
2 Our Decision refers to Appellant's Appeal Brief filed April 18, 2016
("App. Br."); Reply Brief filed November 22, 2016 ("Reply Br.");
Examiner's Answer mailed September 22, 2016 ("Ans."); Final Office
Action mailed September 10, 2015 ("Final Act."); and original Specification
filed May 23, 2011 ("Spec.").
Appeal2017-002320
Application 13/113,865
STATEMENT OF THE CASE
Appellant's invention relates to "methods and systems for verifying
regulation compliance and, more particularly, to network-based methods and
systems for verifying compliance of transaction data for a charge back
transaction with a set of regulations associated with an assigned reason code
for processing the chargeback transaction." Spec. ,r 1; Abstract.
Claims 1, 9, and 17 are independent. Claim 1 is illustrative of the
claimed subject matter, as reproduced below with disputed limitations in
italics:
1. A computer-based method for verifying compliance of
transaction data for a chargeback transaction with a set of
regulations using a computer device coupled to a database, said
method comprising:
storing, within the database, transaction data and a
plurality of regulation sets, each regulation set associated with a
reason code;
receiving from an issuer, at the computer device, a
chargeback message for a chargeback transaction requested by a
cardholder, the requested chargeback transaction corresponding
to a transaction made by the cardholder with a merchant using a
transaction card issued to the cardholder by an issuer, the
chargeback message including an assigned reason code assigned
by the issuer for requesting the requested charge back transaction
and a transaction identifier for identifying transaction data
associated with the requested chargeback transaction;
retrieving, by the computer device, transaction data from
the database based on the transaction identifier, wherein the
computer device is associated with an interchange network used
for processing transactions involving transaction cards assigned
to cardholders, and wherein the database stores transaction data
associated with the processed transactions;
retrieving a regulation set of the plurality of regulation sets
stored within the database, the retrieved regulation set
corresponding to the assigned reason code included within
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Application 13/113,865
the received chargeback message;
verifying, by the computer device, the assigned reason
code, by evaluating whether the transaction data complies with
the regulation set;
determining, by the computer device, that the assigned
reason code is not verified, including determining that the
transaction data fails to comply with the regulation set;
generating, by the computer device, a reason code error
notification, including the transaction data, the regulation set,
and the assigned reason code; and
transmitting the reason code error notification to the
ISsuer.
App. Br. 18-19 (Claims App'x.).
Examiner's Rejections and References
(1) Claims 1, 3, 5-7, 9-11, 13-15, 17-20, and 22-29 stand rejected
under 35 U.S.C. § 101 because the claimed invention is directed to a judicial
exception to statutory subject matter. Final Act. 2-3.
(2) Claims 1, 3, 5-7, 9-11, 13-15, 17-20, and 22-29 stand rejected
under 35 U.S.C. § 103(a) as being unpatentable over Dispute Rules Manual
of the Discovery Network, Release 7 .2 (published October 12, 2007) ("NPL-
DRM"). Final Act. 3-11.
ANALYSIS
35 US. C. § 1 OJ: Claims 1, 3, 5-7, 9-11, 13-15, 17-20, and 22-29
In Alice Corp. Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347
(2014 ), the Supreme Court has set forth an analytical "framework 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 (citing Mayo Collaborative Servs. v.
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Prometheus Labs., Inc., 566 U.S. 66, 71-73 (2012)). In the first step of the
Alice/Mayo analysis, we determine whether the claims at issue are "directed
to" a judicial exception, such as an abstract idea. Alice, 134 S. Ct. at 2355.
If not, the inquiry ends. Thales Visionix Inc. v. US., 850 F.3d 1343, 1346
(Fed. Cir. 2017); Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1339 (Fed.
Cir. 2016). If the claims are determined to be directed to an abstract idea,
then we consider under the second step of the Alice/Mayo analysis the
elements of the claims "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." Alice, 134 S. Ct. at 2355
(citing Mayo, 566 U.S. at 79, 78). In other words, the second step is to
"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."' Id.
(citing Mayo, 566 U.S. at 72-73).
In rejecting independent claims 1, 9, and 1 7 and dependent claims 3,
5-7, 10, 11, 13-15, 18-20, and 22-29, the Examiner determines (1) the
claims are directed to the abstract idea of verifying whether a charge back
transaction is in compliance with regulations (i.e., a fundamental economic
practice) and that (2) the additional elements in the claim do not provide
meaningful limitations to transform the abstract idea into a patent eligible
application of the abstract idea such that the claims amount to significantly
more than the abstract idea itself. Final Act. 2-3.
Appellant argues the Examiner has failed to establish a prima facie
case of patent-ineligibility under§ 101 because there is no evidence to
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support the Examiner's findings that the claims are directed to a patent-
ineligible abstract idea. App. Br. 6-7.
Appellant's argument is not persuasive because patent eligibility is a
question of law. Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333 (Fed. Cir.
2012). We are aware of no controlling authority that requires the Office to
provide factual evidence to support a finding that a claim is directed to an
abstract idea. The Federal Circuit has repeatedly noted that "the prima facie
case is merely a procedural device that enables an appropriate shift of the
burden of production." Hyatt v. Dudas, 492 F.3d 1365, 1369 (Fed. Cir.
2007) (citing In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992)). The
court has held that the USPTO carries its procedural burden of establishing a
prima facie case when its rejection satisfies the requirements of 35 U.S.C.
§ 132 by notifying the applicant of the reasons for rejection, "together with
such information and references as may be useful in judging of the propriety
of continuing the prosecution of [the] application." See In re Jung, 637 F .3d
1356, 1362 (Fed. Cir. 2011). Thus, all that is required of the Office is that it
set forth the statutory basis of the rejection in a sufficiently articulate and
informative manner as to meet the notice requirement of§ 132. Id., see also
Chester v. Miller, 906 F.2d 1574, 1578 (Fed. Cir. 1990) (Section 132 "is
violated when the rejection is so uninformative that it prevents the applicant
from recognizing and seeking to counter the grounds for rejection.").
Alice/Mayo-Step 1
Turning now to the first step of the Alice inquiry, Appellant argues
"the claims do not contain the alleged 'abstract idea"' because the claims
recite "a specific method of data verification by applying rules to the data to
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test or verify the data, and if the data fails, identifying the relevant rules that
were violated." App. Br. 7-8.
Appellant's argument is not persuasive. The title of Appellant's
Specification provides the invention is directed to "methods and systems for
verifying regulation compliance." The Specification further provides
embodiments for verifying compliance of a chargeback transaction with a
set of regulations. Spec. ,r,r 3-8. Thus, we agree with the Examiner (see
Ans. 2-5) that the claim is directed to the abstract idea of processing a
chargeback transaction, which is a fundamental economic practice. Such
activities are squarely within the realm of abstract ideas. The use of
chargeback transactions is a fundamental business practice long prevalent in
our system of commerce, like the risk hedging in Bilski (see Bilski v.
Kappas, 561 U.S. 593 (2010)), the intermediated settlement in Alice (see
Alice, 134 S. Ct. at 2356-57), verifying credit card transactions in
CyberSource (see CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d
1366, 1370 (Fed. Cir. 2011)), collecting and analyzing information to detect
and notify of misuses in FairWarning (see FairWarning IP, LLC v. Iatric
Sys., Inc., 839 F.3d 1089, 1093-94 (Fed. Cir. 2016)), and guaranteeing
transactions (see buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1354 (Fed.
Cir. 2014)). Verifying a chargeback transaction is also a building block of a
market economy. Thus, verifying a chargeback transaction, like risk
hedging, intermediated settlement, and verifying credit card transactions, is
an "abstract idea" beyond the scope of§ 101. See Alice, 134 S. Ct. at 2356.
Alice/Mayo-Step 2
In the second step of the Alice inquiry, Appellant argues the claims
recite "significantly more" than the abstract idea "by effecting an
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improvement in a technical field [ of electronic data integrity verification
between remote computing devices] and by reciting elements that are not
routine, conventional, and ubiquitous in the field." App. Br. 8-14.
We are not persuaded by Appellant's argument. Rather, we agree
with the Examiner (Ans. 6) that (1) "the steps of storing, receiving,
retrieving, verifying, and generating" are "executed on generic computer
devices"; (2) "[g]eneric devices ... do not add significantly more than the
abstract idea" and "[ w ]hen viewed either individually, or as an ordered
combination, the additional limitations do not amount to a claim as a whole
that is significantly more than the abstract idea"; and (3) "[t]here is no
inventive concept recited." Ans. 5---6. Appellant has not directed our
attention to anything in the record that shows specialized computer hardware
is required, nor has Appellant shown how the claims are performed such that
they are not routine, conventional functions of a generic computer. See
Alice, 134 S. Ct. 2358 ("the mere recitation of a generic computer cannot
transform a patent-ineligible abstract idea into a patent-eligible invention.")
Appellant also argues "the claims are drawn to a very specific method
of electronic data integrity verification in the field of chargeback transaction
processing" and "the improvements described by the claims are analogous to
those in DDR Holdings, LLC v. Hotels.com et al., 113 USPQ2d 1097 (Fed.
Cir. 2014)" because "the claims address a problem in 'the realm of computer
networks' wherein a wrong reason code causes payment processor
computers to decline otherwise valid transactions" and recite "a solution
'necessarily rooted in computer technology."' App. Br. 10-11; Reply Br. 3.
In addition, Appellant argues, like Enfzsh, the claims are directed to "a
solution to a problem in the software arts" and similarly, like McRO, Inc. v.
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Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016), the claims
"recite a method to automatically determine that an incorrect reason code
was assigned (similar to the keyframes that were previously manually
identified in McRO) by evaluating transaction data against the regulation set
that corresponds to the assigned reason code ( similar to the evaluating of
sub-sequences in McRO) in order to 'automate a task previously performed
by humans."' Reply Br. 4--5.
We disagree. Contrary to Appellant's arguments, claims 1, 9, and 17
do not recite a specific improvement to the way computers operate, and
Appellant does not present evidence to establish these claims recite a
specific improvement to the computers. See Enfzsh, 822 F.3d at 1336, 1339.
Appellant also has not demonstrated their claims "improve the way a
computer stores and retrieves data in memory," as the claims in Enfzsh did
via a "self-referential table for a computer database" (see Enfzsh, 822 F .3d at
1336, 1339).
In fact, none of the steps and elements recited in Appellant's claims
provide, and nowhere in Appellant's Specification can we find, any
description or explanation as to how the claimed processing a chargeback
transaction and verifying compliance of the charge back transaction with a
set of regulations are intended to provide: (1) a "solution ... necessarily
rooted in computer technology in order to overcome a problem specifically
arising in the realm of computer networks," as explained by the Federal
Circuit in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257
(Fed. Cir. 2014); (2) "a specific improvement to the way computers
operate," as explained in Enfzsh, 822 F.3d at 1336; or (3) an "unconventional
technological solution ... to a technological problem" that "improve[ s] the
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performance of the system itself," as explained in Amdocs (Israel) Ltd. v.
Openet Telecom, Inc., 841 F.3d 1288, 1300, 1302 (Fed. Cir. 2016).
Preemption
Lastly, Appellant argues "the claims overcome concerns ... that
patent application claims would carry a 'risk of pre-emption' that does not
exist in the pending claims" and, as such, "the claims do not preempt all
possible ways of performing electronic data integrity verification." App. Br.
10.
Appellant's argument is unpersuasive because, although "preemption
may signal patent ineligible subject matter, the absence of complete
preemption does not demonstrate patent eligibility." Ariosa Diagnostics,
Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015). Moreover,
where, as here "a patent's claims are deemed only to disclose patent
ineligible subject matter" under the Alice/Mayo framework, "preemption
concerns are fully addressed and made moot." Id.
Because Appellant's claims 1, 3, 5-7, 9-11, 13-15, 17-20, and 22-29
are directed to a patent-ineligible abstract concept, and do not recite
something "significantly more" under the second prong of the Alice analysis,
we sustain the Examiner's rejection of these claims under 35 U.S.C. § 101 as
being directed to non-statutory subject matter in light of Alice and its
progeny.
35 USC§ 103(a): Claims 1, 9, and 17
In support of the rejection of independent claim 1, and similarly,
claims 9 and 17, the Examiner finds NPL-DRM teaches Appellant's claimed
"method for verifying compliance of transaction data for a chargeback
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transaction with a set of regulations using a computer device coupled to a
database" including all the claim limitations, except for an express
disclosure of "transmitting the reason code error notification to the issuer."
Final Act. 4---6 (citing NPL-DRM pp. 28-30 ("Chargebacks"), p. 29, § 5.6.3
("If Discover Network receives an incomplete Chargeback Request ... will
not process a Chargeback"), § 5.6.4 ("If Discover Network does not receive .
. . a Chargeback Request that does not comply with the requirements ... is
not obligated to notify ... or to process a Chargeback"), pp. 33-36 ("Reason
codes for Service Disputes"), p. 60 ("TF Reason Code may be used by
Discover Network to process a Chargeback"), p. 75 ("UA99 Reason Code
may be used for a Chargeback Request when the Card Sale was not
completed in compliance with ... Operating Regulations").
The Examiner concludes, however, that "it would have been obvious
to generate reason code error message to acquirer or issuer via the Dispute
File Format (Page 92) established by Discover Network." Final Act. 6.
Appellant contends NPL-DRM does not teach or suggest the disputed
limitations:
( 1) "verifying, by the computer device, the assigned
reason code, by evaluating whether the transaction data
complies with the regulation set";
(2) "determining, by the computer device, that the
assigned reason code is not verified, including determining that
the transaction data fails to comply with the regulation set"; and
(3) "generating, by the computer device, a reason code
error notification, including the transaction data, the regulation
set, and the assigned reason code"
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as recited in claim 1, and similarly recited in claims 9 and 17. See App. Br.
15. In particular, Appellant acknowledges "NPL-DRM describes reason
codes, but not what happens when a wrong reason code is assigned" and, as
such, argue "does not describe or suggest verifying a reason code" as recited
in claims 1, 9, and 17. App. Br. 15. Appellant also acknowledges "NPL-
DRM specifies what reason codes to use according to a situation, but does
not describe or suggest determining that the assigned reason code is
invalid." App. Br. 16.
We do not find Appellant's arguments persuasive. Instead, we find
the Examiner has provided a comprehensive response to Appellant's
arguments supported by a preponderance of evidence. Ans. 8-10. As such,
we adopt the Examiner's findings and explanations provided therein. Id.
For additional emphasis, we note claim terms are given their broadest
reasonable interpretation consistent with the specification. In re Am. Acad.
of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). The disputed phrase
"verifying ... the assigned reason code, by evaluating whether the
transaction data complies with the regulation set" is described in the context
of Appellant's Specification as to whether transaction data associated with a
chargeback transaction complies with a set of regulations for an assigned
reason code. Spec. ,r,r 61---64. In particular, Appellant's Specification
describes that "[i]f transaction data[] complies with retrieved set of
regulations [], then the assigned reason code becomes the verified reason
code" and, likewise, if transaction data does not comply with the retrieved
set of regulations, then "the assigned reason code is not verified and an error
message [] is returned to issuing bank." Spec. ,r,r 62, 64. Based on
Appellant's Specification, "verification of reason code is defined by whether
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a chargeback transaction, complies with regulations," as correctly
recognized by the Examiner. Ans. 8-9 (citing Spec. ,r,r 61---64). As such, the
disputed limitation "verifying, by the computer device, the assigned reason
code, by evaluating whether the transaction data complies with the
regulation set" can be broadly but reasonably interpreted to encompass NPL-
DRM' s evaluation of whether transaction data complies with regulations.
See NPL-DRM pp. 28-36, 60, 75.
Based on this record, we are not persuaded of Examiner error.
Accordingly, we sustain the Examiner's obviousness rejection of
independent claims 21, 28, and 34, as well as their respective dependent
claims 23-25, 27, 29-33, 35-38, and 40, which Appellant does not argue
separately. App. Br. 15.
CONCLUSION
On the record before us, we conclude Appellant has not demonstrated
the Examiner erred in rejecting claims 1, 3, 5-7, 9-11, 13-15, 17-20, and
22-29 under 35 U.S.C. § 101 and§ 103(a).
DECISION
As such, we AFFIRM the Examiner's final rejection of claims 1, 3, 5-
7, 9-11, 13-15, 17-20, and 22-29.
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
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