Ex Parte Sahota et alDownload PDFPatent Trials and Appeals BoardMay 30, 201913828504 - (D) (P.T.A.B. May. 30, 2019) Copy Citation UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. FILING DATE FIRST NAMED INVENTOR 13/828,504 03/14/2013 Jagdeep Singh Sahota 66945 7590 06/03/2019 KILPATRICK TOWNSEND & STOCKTONLLP/VISA Mailstop: IP Docketing - 22 1100 Peachtree Street Suite 2800 Atlanta, GA 30309 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. 80083-867528 (079710USD1C CONFIRMATION NO. 1001 EXAMINER CHAKRA V ART!, ARUNA VA ART UNIT PAPER NUMBER 3693 NOTIFICATION DATE DELIVERY MODE 06/03/2019 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): ipefiling@kilpatricktownsend.com KTSDocketing2@kilpatrick.foundationip.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte JAGDEEP SINGH SAHOTA and CHRISTIAN AABYE Appeal2018-005184 Application 13/828,504 Technology Center 3600 Before JOSEPH L. DIXON, HUNG H. BUI, and JON M. JURGOV AN, Administrative Patent Judges. DIXON, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Appellants 1 appeal under 35 U.S.C. § 134(a) from a rejection of claims 1-7, 10, and 26-31. We have jurisdiction under 35 U.S.C. § 6(b ). We reverse. CLAIMED INVENTION The claims are directed to a method and payment device "for dynamically generating a verification value for verifying the authenticity of 1 Appellants indicate that Visa International Service Association is the real party in interest. (App. Br. 2). Appeal2018-005184 Application 13/828,504 a payment service deployed on a payment device, such as an integrated circuit credit card, each time the payment service is utilized in a transaction," wherein the "verification value is used by a service provider to verify the authenticity of the transaction." (Spec. ,r 9, Abstract). Claim 1, reproduced below, is illustrative of the claimed subject matter: 1. A method of creating and processing a verification value for a transaction, the method comprising: creating, by a microprocessor of a payment device, a base record comprising a data value comprising an account number; overlaying, by the microprocessor of the payment device, an application transaction counter (ATC), or hash value based on transaction data for the transaction over a portion of the data value; splitting, by the microprocessor, the overlaid data value into at least a first block and a second block; encrypting, by the microprocessor, the first block using a first encryption key; performing, by the microprocessor, at least an exclusive- OR (XOR) operation on the encrypted first block and the second block to produce a first result; encrypting, by the microprocessor, the first result using the first encryption key to produce a second result; selecting, by the microprocessor, one or more values based at least in part on the second result as the verification value for the transaction; and transmitting, from the payment device through a contact- based or contactless interface to a service provider computer via a POS terminal, the verification value for the transaction, 2 Appeal2018-005184 Application 13/828,504 wherein the service provider computer is configured to approve or disapprove of the transaction based on a comparison of the transmitted verification value to a second verification value independently generated from the transaction data at the service provider computer. App. Br. 26-30 (Claims Appendix). REJECTION Claims 1-7, 10, and 26-31 stand rejected under 35 U.S.C. § 101 because the claimed invention is (1) directed to a judicial exception (i.e., a law of nature, a natural phenomenon, or an abstract idea); and (2) not directed to significantly more than the abstract idea itself. ANALYSIS 35 U.S.C. § 101 We have reviewed the Examiner's rejection in light of Appellants' contentions and the evidence of record. We concur with Appellants' contention that the Examiner erred in this case. Section 101 of the Patent Act provides "[ w ]hoever 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. However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include implicit exceptions: "[l]aws of nature, natural phenomena, and abstract ideas" are not patentable. E.g., Alice Corp. Pty. Ltd. v. CLS Banklnt'l, 573 U.S. 208,216 (2014) (internal quotation marks and citation omitted). 3 Appeal2018-005184 Application 13/828,504 In determining whether a claim falls within an excluded category, we are guided by the Supreme Court's two-step framework, described in Mayo and Alice. Id. at 217-18 ( citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 75-77 (2012)). In accordance with that framework, we first determine what concept the claim is "directed to." See Alice, 573 U.S. at 219 ("On their face, the claims before us are drawn to the concept of intermediated settlement, i.e., the use of a third party to mitigate settlement risk."); see also Bilski v. Kappas, 561 U.S. 593, 611 (2010) ("Claims 1 and 4 in petitioners' application explain the basic concept of hedging, or protecting against risk."). Concepts determined to be abstract ideas, and, thus, patent ineligible, include certain methods of organizing human activity, such as fundamental economic practices (Alice, 573 U.S. at 219-20; Bilski, 561 U.S. at 611 ); mathematical formulas (Parker v. Flook, 437 U.S. 584, 594--95 (1978)); and mental processes (Gottschalkv. Benson, 409 U.S. 63, 67 (1972)). Concepts determined to be patent eligible include physical and chemical processes, such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 191 (1981) ); "tanning, dyeing, making water-proof cloth, vulcanizing India rubber, smelting ores" (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S. 252, 267---68 (1853))); and manufacturing flour (Benson, 409 U.S. at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))). In Diehr, the claim at issue recited a mathematical formula, but the Supreme Court held that "a claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula." Diehr, 450 U.S. at 187; see also id. at 191 ("We view respondents' claims as nothing more than a process for molding rubber 4 Appeal2018-005184 Application 13/828,504 products and not as an attempt to patent a mathematical formula."). Having said that, the Supreme Court also indicated that a claim "seeking patent protection for that formula in the abstract .... is not accorded the protection of our patent laws, ... and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment." Id. (citing Benson and Flook); see, e.g., id. at 187 ("It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection."). If the claim is "directed to" an abstract idea, we tum to the second step of the Alice and Mayo framework, where "we must examine the elements of the claim to determine whether it contains an 'inventive concept' sufficient to 'transform' the claimed abstract idea into a patent-eligible application." Alice, 573 U.S. at 221 ( citation omitted). "A claim that recites an abstract idea must include 'additional features' to ensure 'that the [claim] is more than a drafting effort designed to monopolize the [abstract idea]."' Id. ( quoting Mayo, 566 U.S. at 77). "[M]erely requir[ing] generic computer implementation[] fail[ s] to transform that abstract idea into a patent-eligible invention." Id. The PTO recently published revised guidance on the application of § 101. USPTO, 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50 (Jan. 7, 2019) ("Memorandum"). Under the guidance set forth in the Memorandum, we first look to whether the claim recites: (1) any judicial exceptions, including certain groupings of abstract ideas (i.e., mathematical concepts, certain methods of 5 Appeal2018-005184 Application 13/828,504 organizing human activity such as a fundamental economic practice, or mental processes) (Step 2A, Prong 1 ); and (2) additional elements that integrate the judicial exception into a practical application (see MANUAL OF PATENT EXAMINING PROCEDURE ("MPEP") § 2106.05(a}-(c), (e}-(h)) (9th Ed., Rev. 08.2017, 2018) (Step 2A, Prong 2). Only if a claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application, do we then look to whether the claim: (3) adds a specific limitation beyond the judicial exception that is not "well-understood, routine, conventional" in the field (see MPEP § 2106.05(d)); or (4) simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception. (Step 2B). See Memorandum, 84 Fed. Reg. at 54--56. Turning to Step 2B of the Memorandum, "[t]he second step of the Alice test is satisfied when the claim limitations 'involve more than performance of []well-understood, routine, [and] conventional activities previously known to the industry."' Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018) (quoting Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat'! Ass 'n, 776 F.3d 1343, 1347--48 (Fed. Cir. 2014) and Alice, 573 U.S. at 225). "Whether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination." Berkheimer, 881 F.3d at 1369. In this case, the Examiner determines: The additional element(s) or combination of elements in the claim( s) other than the abstract idea per se amount( s) to no more than: (i) mere instructions to implement the idea on a computer, and/or (ii) recitation of generic computer structure that serves to perform generic computer functions that are well-understood, 6 Appeal2018-005184 Application 13/828,504 routine, and conventional activities previously known to the pertinent industry. (Final Act. 4 (emphasis added)). The Examiner further determines: the only inventive concept in the claims is the particular algorithm and not the general process. The process of comparing two verification values to authorize or refuse a transaction is well-understood, routine and conventional. The use of cryptographic algorithms to scramble communication has been well known since World War II. RSA Public Key Cryptographic Algorithm was invented in the 1980s. The use of dynamic card verification values ( dCVV) was invented in the mid-1990s jointly by the EMV (Europay Mastercard Visa) Consortium. Therefore, Appellant's sole contribution to this pre-existing verification process, as recited in the Specification and Claims, is to supply a particular mathematical algorithm. the current claims .... use existing means for preventing fraud such as dynamic verification, encryption, decryption, etc. The technology for prevent[ing] skimming fraud is well-understood, routine and conventional: encrypting, encoding, decrypting, decoding, hashing, etc. . . . the particular claimed algorithm merely utilizes routine cryptographic functions to transform the data . ... [T]he use of cryptographic algorithms to scramble data to prevent snoopers dates back to the World War II. The claimed invention does not off er anything new by way of a technical process that was not already known or practiced. [T]he principle of encrypting transaction data to prevent skimming does not supply an inventive concept because the concept of applying cryptographic algorithms to perform data transformation is well-understood, routine and conventional. The algorithm used here consists of a series of standard data transformation steps such as overlaying, splitting, encrypting and performing XOR operation of card transaction data. (Ans. 9-10, 12-14 (emphases added)). 7 Appeal2018-005184 Application 13/828,504 However, the Examiner's remarks (supra) have not provided the evidence required by Berkheimer to support the Examiner's determinations of well-understood, routine, and conventional activities in Appellants' claims. See Berkheimer, 881 F.3d at 1369. Rather, the Examiner merely provides conclusory and high-level general statements (Ans. 9-10, 12-14; Final Act. 4), which are insufficient for meeting the Berkheimer requirement. See Berkheimer, 881 F.3d at 1369-70. In particular, we agree with Appellants (Reply Br. 7-8)2 that the Examiner has not provided any of the four categories of information required by the Memorandum of Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.) ("Berkheimer Memorandum"): 1. A citation to an express statement in the specification or to a statement made by an applicant during prosecution that demonstrates the well-understood, routine, conventional nature of the additional element(s) .... 2. A citation to one or more of the court decisions discussed in MPEP § 2106.0S(d)(II) as noting the well-understood, routine, conventional nature of the additional element(s). 3. A citation to a publication that demonstrates the well- understood, routine, conventional nature of the additional element( s ) .... 4. A statement that the examiner is taking official notice of the well-understood, routine, conventional nature of the additional element( s) .... Berkheimer Memorandum at 3--4. 2 Because the Federal Circuit issued the Berkheimer decision after Appellants filed the Appeal Brief, Appellants had good cause to raise arguments based on Berkheimer in the Reply Brief. See 37 C.F.R. § 41.41 (b )(2). 8 Appeal2018-005184 Application 13/828,504 As Appellants point out, the Examiner has not provided the requisite evidence (as required by the Berkheimer Memorandum) for showing that Appellants' claimed method and arrangement ( of a payment device, POS terminal, and service provider computer processing an account number and transaction's data to create and use a verification value for approving the transaction) are well-understood, routine, and conventional. (Reply Br. 3, 7- 8; see also App. Br. 18). Additionally, "it is unclear how the Examiner makes the assertion that the 'use[] of dynamic card verification values (dCVV) was invented in the mid-1990s"' and "[n]o evidence has been provided to support this assertion." (Reply Br. 6). Therefore, the Examiner erred with respect to Step 2B of the Alice and Mayo framework in the Memorandum, and we are constrained by the record to reverse the Examiner's rejection of claims 1-7, 10, and 26-31 on procedural grounds. CONCLUSION The Examiner erred in rejecting claims 1-7, 10, and 26-31 based on a lack of patent-eligible subject matter under 35 U.S.C. § 101. DECISION For the above reasons, we reverse the Examiner's subject matter eligibility rejection of claims 1-7, 10, and 26-31 under 35 U.S.C. § 101. REVERSED 9 Copy with citationCopy as parenthetical citation