Ex Parte Steele et al

Patent Trial and Appeal Board

Aug 22, 2018

11935740 (P.T.A.B. Aug. 22, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
11/935,740 11/06/2007 Kim Steele
66945 7590 08/24/2018
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. CONFIRMATION NO.
080083-0731850 8462
EXAMINER
MARCUS, LELAND R
ART UNIT PAPER NUMBER
3623
NOTIFICATION DATE DELIVERY MODE
08/24/2018 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):
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 KIM STEELE, MIKE YAKEL, KEVIN WELLER,
PATRICK FAITH, andLORID. VANDELOO
Appeal2017-001898
Application 11/935,740
Technology Center 3600
Before KENNETH G. SCHOPPER, TARA L. HUTCHINGS, and
AMEE A. SHAH, Administrative Patent Judges
SHAH, Administrative Patent Judge.
DECISION ON APPEAL 1
The Appellants2 appeal under 35 U.S.C. § 134(a) from the Examiner's
final decision rejecting claims 1, 3-7, 10, 16, and 33-37, which are the all of
the pending claims. We have jurisdiction under 35 U.S.C. § 6(b ).
We REVERSE and ENTER a NEW GROUND OF REJECTION
pursuant to our authority under 37 C.F.R. § 41.50(b).
1 Throughout this Decision, we refer to the Appellants' Appeal Brief
("Appeal Br.," filed Feb. 16, 2016), Reply Brief ("Reply Br.," filed Nov. 18,
2016), and Specification ("Spec.," filed Nov. 6, 2007), and to the
Examiner's Answer ("Ans.," mailed Sept. 20, 2016) and Final Office Action
("Final Act.," mailed Sept. 16, 2015).
2 According to the Appellants, the real party in interest is "Visa U.S.A. Inc."
Appeal Br. 3.
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Application 11/935,740
STATEMENT OF THE CASE
The Appellants' invention is "directed to methods, systems, and
computer readable media for allowing financial transactions to be conducted
in a secure manner." Spec. ,r 7.
Claims 1, 16, and 3 5 are the independent claims on appeal. Claim 1
(Appeal Br. 32 (Claims App.)) is exemplary of the subject matter on appeal
and is reproduced below (with added bracketing for reference):
1. A method comprising:
[(a)] receiving, by a server computer, a transaction
message relating to a request by a consumer to conduct a
transaction using a portable consumer device;
[ (b)] determining, by the server computer, that the portable
consumer device is enrolled in an authentication program that
provides greater security for the consumer when the consumer
conducts transactions using the portable consumer device;
[ ( c)] analyzing, by the server computer, the transaction
message to determine if the transaction is a specialized
transaction, wherein the specialized transaction is a purchase
transaction and involves a recurring payment, a micro-payment,
or a one-step online payment;
[ ( d)] determining that the transaction is the specialized
transaction;
[ ( e)] analyzing the transaction message, using the server
computer, to determine if a re-authentication event has taken
place or has not taken place;
[(f)] determining that the re-authentication event has not
taken place; and
[(g)] in response to determining that the re-authentication
event has not taken place, initiating an authorization request
message to the issuer, using the server computer, without sending
a re-authentication message to the consumer.
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Application 11/935,740
REJECTION ON APPEAL 3
Claims 1, 3-7, 10, 16, and 33-37 stand rejected under 35 U.S.C. § 101
as being directed to non-statutory subject matter.
ANALYSIS
Under 35 U.S.C. § 101, a patent may be obtained for "any new and
useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof." The Supreme Court has"' ... long held
that this provision 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) (quotingAss'nfor
Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)).
The Supreme Court in Alice reiterated the two-step framework, set
forth previously in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66, 75-77 (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. The first step in that analysis is to "determine whether the claims at
issue are directed to one of those patent-ineligible concepts." Id. (emphasis
added) ( citing Mayo, 566 U.S. at 76-79). If so, the second step is to
consider the elements of the claims "individually and 'as an ordered
combination"' to determine whether the additional elements "'transform the
nature of the claim' into a patent-eligible application." Id. ( quoting Mayo,
566 U.S. at 79, 78).
3 The Examiner has withdrawn the rejection of the claims under 35 U.S.C.
§ 103(a). Ans. 2.
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Application 11/935,740
We first address the Appellants' contention that the Examiner's
rejection is in error because the Examiner fails to set forth a proper rejection
of subject matter ineligibility. See Appeal Br. 9-11; Reply Br. 2--4. The
Appellants argue, in relevant part, that the Examiner "does not identify any
court cases for which a similar concept has been identified as an abstract
idea, as is required by the July guidelines" (Appeal Br. 1 O; see also Reply
Br. 2), and "fails to appropriately consider the additional limitations as an
ordered combination as required" (Reply Br. 4 ).
Here, in rejecting the claims under § 101, the Examiner determines
that the claims are directed to "the abstract idea of data acquisition and data
analysis, specifically adaptive authentication options." Final Act. 2. The
Examiner compares the idea to those found to be abstract as summarized in
Office guidelines. See Ans. 3--4. The Examiner further determines that
"[t]he claims do not include additional elements that are sufficient to amount
to significantly more than the judicial exception because they recite the use
of a generic computer performing generic computing tasks, specifically:"
receiving, conducting, determining, analyzing, and initiating. Final Act. 3;
Ans. 7.
Although the Examiner clearly articulates to what the claims are
directed and provides support for that determination, we agree with the
Appellants that the Examiner has not provided adequate reasoning as to why
the claim elements, considered individually and as an ordered combination,
fail to transform the abstract idea into a patent-eligible invention.
Thus, we do not sustain the Examiner's rejection under 35 U.S.C.
§ 101 of claims 1, 3-7, 10, 16, and 33-37.
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NEW GROUND OF REJECTION
Pursuant to our authority under 37 C.F.R. § 4I.50(b), we reject
claims 1, 3-7, 10, 16, and 33-37 under 35 U.S.C. § 101 as being directed to
non-statutory subject matter. We find the claim ineligible for patent
protection because it is directed to a non-statutory abstract idea.
The First Step
Under the first step of the Mayo/Alice framework, we consider the
claims "in their entirety to ascertain whether their character as a whole is
directed to excluded subject matter." Internet Patents Corp. v. Active
Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015). The question is
whether the claims as a whole "focus on a specific means or method that
improves the relevant technology" or are "directed to a result or effect that
itself is the abstract idea and merely invoke generic processes and
machinery." McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299,
1314 (Fed. Cir. 2016). In other words, the claims are assessed as to whether
they "do no more than describe a desired function or outcome, without
providing any limiting detail that confines the claim to a particular solution
to an identified problem." Affinity Labs of Tex., LLC v. Amazon.com Inc.,
838 F.3d 1266, 1269 (Fed. Cir. 2016) cert. denied, 137 S. Ct. 1596 (2017).
In that regard, the Background section of the Specification discusses
that it is important to ensure that a consumer using a portable device to pay
for goods in a typical purchase transaction is authorized to make the
purchase. Spec. ,r 2. "Ensuring that a consumer is an authorized user of a
portable consumer device becomes especially important in situations where
the consumer is not making the purchase in person, but rather is making the
purchase online, through the mail, or over the phone." Id. The Specification
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discusses that many solutions have been developed to "help give consumers
more confidence to make purchases over the Internet and also [to] allow
issuers, acquirers, and merchants to enjoy increased online transaction
volumes and reduced exposure to fraud." Id. ,r,r 3, 4. But, "a different
solution is needed to authenticate consumers under these business models to
ensure authentication and lower the risk of unauthorized use and fraud, but
still allow for an easy and quick process for a consumer making a payment
transaction." Id. ,r 5. The invention provides a solution in the form of
"methods, systems, and computer readable media for allowing financial
transactions to be conducted in a secure manner" (id. ,r 7), that "allow
entities such as merchants, issuers, payment processing organizations, and/or
third parties to re-authenticate a consumer after a consumer has attempted to
conduct a transaction and after the consumer has enrolled in an
authentication program" (id. ,r 21 ).
Independent claim 1 provides for a method comprising the steps of:
(a) receiving message data relating to a request to transact using a portable
device, (b) determining that the device is enrolled in an authentication
program; ( c) analyzing the message data to determine if the transaction is a
specialized one, ( d) determining that the transaction is specialized,
( e) analyzing the message data to determine if a re-authentication event has
taken place, (f) determining that the event has not taken place, and (g) in
response to (f), initiating an authorization message to the issuer without
sending a re-authorization message to the consumer. See Appeal Br. 32
(Claims App.). Independent claim 16 recites a "server computer comprising
a non-transitory computer readable medium" with instructions instructing
the server computer to perform the steps of claim 1. Id. at 34. Independent
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claim 35 provides for a system comprising "a server computer comprising a
non-transitory computer readable medium" with instructions instructing the
server computer to perform the steps of claim 1, and "a client computer
coupled to the server computer." Id. at 35-36. Dependent claims 3-5
further define the type of event. Id. at 32-33. Dependent claims 6, 33,
and 37 further define the type of transaction and provides further steps of
receiving second message data, and determining, analyzing, and initiating
for the second message data as recited in steps (a}-(g) of claims 1, 16,
and 35. Id. at 33-37. Dependent claims 7 and 34 further define the re-
authentication process of claims 6 and 33 to send messages and receive a
password. Id. at 33, 35. Dependent claim 10 further defines the type of
portable device and second message of claim 7. Id. at 34. Dependent
claim 36 adds the components of a directory server and an access control
server to the system of claim 35. Id. at 36.
The server computer performing steps (a), (b), (c), (e), and (g) of
claim 1, and claimed in independent claims 16 and 35, is item 25 of
Figure l(a). Appeal Br. 5-7. "[S]erver computer 25, or any other server
computer shown in FIG. 1 or elsewhere can be a large mainframe, a
minicomputer cluster, or a group of servers functioning as a unit. In one
example, the server computer may be a database server coupled to a Web
server." Spec. ,r 34. The portable consumer device is device 8. See Appeal
Br. 5-7 ( citing ,r 3 7). "The portable consumer device 8 may be in any
suitable form. For example, suitable portable consumer devices can be
hand-held and compact so that they fit into a consumer's wallet and/or
pocket (e.g., pocket-sized)." Spec. ,r 32. Device 8 "may include smart
cards, ordinary credit or debit cards ( with a magnetic strip and without a
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microprocessor), keychain devices (such as the Speedpassâ„¢ commercially
available form Exxon-Mobil Corp.), etc." Id. Device 8 may also include
"cellular phones, PDAs, pagers, payment cards, security cards, access cards,
smart media, transponders, and the like." Id. "The portable consumer
devices can also be debit services ( e.g., a debit card), credit devices ( e.g., a
credit card), or stored value devices (e.g., a stored value card)." Id. The
client computer of the consumer is device lO(a). Appeal Br. 7. "The client
computer lO(a) can be a desktop computer, a laptop computer, a wireless
phone, a personal digital assistant (PDA), etc. It may operate using any
suitable operating system including a Windowsâ„¢ based operating system."
Spec. ,r 30. There are no further technological details regarding server 25
and device lO(a).
The Specification does not provide details for how it is determined
that the device is enrolled in an authentication program, step (b ). The
Appellants direct attention to paragraphs 37 and 41 of the Specification and
block 815 of Figure 2 for support for this step. Appeal Br. 5-7. Paragraph
37 of the Specification provides that plug-in software allows server 25 to
determine "if the consumer's portable consumer device 8 is enrolled in an
authentication program (e.g., by querying a directory server)." Paragraph 41
simply provides that a consumer may want to enroll in the authentication
program, whereby the consumer will re-authenticate himself before making
Internet purchases. Step 815 provides for a block of a flowchart of "Is
Consumer enrolled in the program?" Figure 2. As such, determining
step (b) can comprise querying a server for data.
Similarly, the Specification provides no details on how or in what way
the message is analyzed to determine if the transaction is specialized and
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how the determining is performed, steps ( c) and ( d). The Appellants cite to
paragraphs 37 and 51 for support for these steps. Appeal Br. 5-7. However,
these paragraphs merely provide that the plug-in software allows server 25
to determine whether the transaction is specialized or normal. The
Specification provides no further details on how the message is analyzed or
how a determination is made based on that analysis, i.e., technologically or
by what algorithm. As such, analyzing and determining steps ( c) and ( d) can
comprise any analysis and determination of data.
For the steps of analyzing the message to determine if a re-
authentication event has or has not taken place, and determining that is has
not, steps (e) and (f), the Appellants cite to paragraphs 8, 24, 25, 37, and 51,
and block 810 of Figure 2. Appeal Br. 6. As with steps ( c) and ( d), these
paragraphs merely provide that such an analysis and determination take
place. Block 810 simply asks if there has been a re-authentication event.
Spec., Fig. 2. There are no details on how the message is analyzed or how a
determination is made based on that analysis, i.e., technologically or by what
algorithm. As such, analyzing and determining steps ( e) and (f) can
comprise any analysis and determination of data.
In light of the Specification's description of the problem and solution,
the advance over the prior art by the claimed invention is a way to more
securely conduct financial transactions. In that context, the claims are
directed to receiving, determining, analyzing, and initiating data based on
the analyses to better secure transactions, which is both a fundamental
economic practice and a method of organizing human activity. The claims
here are similar to ones our reviewing courts have deemed abstract in Alice,
134 S. Ct. at 2356 (using a third party to mitigate settlement risk), buySAFE,
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Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (guaranteeing
transactions), CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366,
1372-73 (Fed. Cir. 2011) ("verifying the validity of credit a card transaction
over the Internet"), Fair Warning IP, LLC v. Iatric Systems, Inc., 839 F.3d
1089, 1093-94 (Fed. Cir. 2016) ("detecting fraud and/or misuse in a
computer environment based on analyzing data" according to "one of
several rules" is an abstract idea), Smart Systems Innovations, LLC v.
Chicago Transit Authority, 873 F.3d 1364, 1371-72 (Fed. Cir. 2017)
(forming and collecting data for financial transactions in a certain field), and
Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir.
2016) (process of gathering and analyzing information of a specified content
and displaying the result). Even ignoring the financial nature of the subject
matter at issue, here, the claim involves nothing more than receiving,
analyzing, determining, and initiating data of a specific content and/or from
a specific source, from one place to another, without any particular inventive
technology- an abstract idea. See Electric Power, 830 F.3d at 1354.
Unlike DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, the
claims here do not claim a solution "necessarily rooted in computer
technology in order to overcome a problem specifically arising in the realm
of computer networks." Id. at 1257; cf Appeal Br. 13-14. As discussed
above, the problem the invention addresses is the risk of unauthorized use
and fraud in transactions. See Spec. ,r,r 3-5, 7. Preventing fraudulent
transactions or lowering the risk of unauthorized use is not a technical
problem, but a business concern related to cost and legal issues. Although
here, the transactions are Internet-centric, there is not a problem rooted in
technology arising out of computer networks. Instead, the Specification at
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paragraph 2 describes that the problems existed before the advent of the
Internet, such as with mail-order and telephone transactions. See DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256-57 (Fed. Cir. 2015)
( contrasting the claims at issue to those in Ultramercial, Inc. v. Hulu, LLC,
772 F.3d 709, 715-16 (Fed. Cir. 2014)). Further, the purported solution
comprises the use of servers and devices operating in their normal and
ordinary capacities. See Spec. ,r,r 30-37; see also supra.
At the level of generality recited in the claims and described in the
Specification, the claims simply "describe a desired function or outcome,
without providing any limiting detail that confines the claim to a particular
solution to an identified problem. The purely functional nature of the claim
confirms that it is directed to an abstract idea, not to a concrete embodiment
of that idea." Affinity Labs., 838 F.3d at 1269.
Unlike the claims in Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327
(Fed. Cir. 2016) and McRO, the claims are not directed to an improvement
in the way computers operate. At best, they improve a way of securing
information using the ordinary capabilities of a general purpose computer.
See Elec. Power, 830 F.3d at 1354. As discussed above, the Specification
does not provide details on the technological manner in which the steps of
determining and analyzing are performed. The claims here recite an
invention that is merely the routine or conventional use of a generic
computer. See FairWarning, 839 F.3d at 1097; DDR Holdings, 773 F.3d
at 1258-59.
The Second Step
The second step of the Mayo/Alice framework is to "search for an
'inventive concept'-i.e., an element or combination of elements that is
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'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
(alteration in original) (quoting Mayo, 566 U.S. at 72-73).
Considering the limitations of independent claims 1, 16, and 3 5 and
dependent claims 3-7, 10, 33, 34, 36, and 37 alone and as an ordered
combination, we determine that the claims do not contain additional
elements that amount to significantly more to transform the abstract idea of
receiving, determining, analyzing, and initiating data based on the analyses
to better secure transactions into a patent-eligible invention. Any general
purpose computer available at the time the application was filed would have
been able to perform these functions. The functions of receiving,
determining, analyzing, and initiating data are conventional, routine, and
well-known and involve the normal, basic functions of a computer. See,
e.g., Elec. Power, 830 F.3d at 1354--55 (gathering, sending, monitoring,
analyzing, selecting, and presenting information does not transform the
abstract process into a patent-eligible invention). The Specification supports
this view, as discussed above, in providing for conventional servers and
devices to perform the functions of claim. See Spec. ,r,r 28-36; Fig. l(a).
The ordered combination of the steps does not add anything to the
abstract idea. See Alice, 134 S. Ct. at 2359. The claims do not purport to
improve the functioning of the computer itself, nor do they effect an
improvement in any other technology or technical field. See id. As
discussed above, there is no further description of particular technology for
performing the steps. See Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d
1306, 1334 (Fed. Cir. 2015), cert. denied, 136 S. Ct. 2510 (2016); see also
Enfish, 822 F.3d. at 1336 (focusing on whether the claim is "an
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improvement to [the] computer functionality itself, not on economic or other
tasks for which a computer is used in its ordinary capacity"). The
introduction of a computer to implement an abstract idea is not a patentable
application of the abstract idea. Alice, 134 S. Ct. at 2357-58. The computer
implementation here is purely conventional and performs basic functions.
See id. at 2359-60.
DECISION
The Examiner's rejection under 35 U.S.C. § 101 of claims 1, 3-7, 10,
16, and 33-37 is REVERSED.
A NEW GROUND OF REJECTION under 35 U.S.C. § 101 is entered
for claims 1, 3-7, 10, 16, and 33-37.
37 C.F .R. § 4I.50(b) provides that "[a] new ground of rejection ...
shall not be considered final for judicial review." Thus, WITHIN TWO
MONTHS FROM THE DATE OF THE DECISION, the Appellants must
exercise one of the following two options with respect to the new grounds of
rejection to avoid termination of the appeal as to the newly rejected claims:
(1) Reopen prosecution. Submit an appropriate amendment of
the claims so rejected or new [e]vidence relating to the claims
so rejected, or both, and have the matter reconsidered by the
[E]xaminer, in which event the prosecution will be remanded to
the [E]xaminer. The new ground of rejection is binding upon
the [E]xaminer unless an amendment or new [ e ]vidence not
previously of [r]ecord is made which, in the opinion of the
[E]xaminer, overcomes the new ground of rejection designated
in [this] decision. Should the [E]xaminer reject the claims,
[Appellants] may again appeal to the Board pursuant to this
subpart.
(2) Request rehearing. Request that the proceeding be reheard
under§ 41.52 by the Board upon the same [r]ecord. The request
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for rehearing must address any new ground of rejection and
state with particularity the points believed to have been
misapprehended or overlooked in entering the new ground of
rejection and also state all other grounds upon which rehearing
is sought.
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).
REVERSED; 37 C.F.R. § 4I.50(b)
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