Michael A. Racusin

Patent Trials and Appeals Board

Sep 30, 2019

15184083 - (D) (P.T.A.B. Sep. 30, 2019)

UNITED STATES PATENT AND TRADEMARK OFFICE
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
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
15/184,083 06/16/2016 Michael A. Racusin 46607-197245 7065
279 7590 09/30/2019
IP Docket
Clark Hill PLC
130 East Randolph Street
Suite 3900
Chicago, IL 60601
EXAMINER
REFAI, RAMSEY
ART UNIT PAPER NUMBER
3668
NOTIFICATION DATE DELIVERY MODE
09/30/2019 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):
IPDocket@clarkhill.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte MICHAEL A. RACUSIN
____________

Appeal 2018-006875
Application 15/184,083
Technology Center 3600
____________

Before ST. JOHN COURTENAY III, JENNIFER L. McKEOWN, and
SCOTT E. BAIN, Administrative Patent Judges.

McKEOWN, Administrative Patent Judge.

DECISION ON APPEAL
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s
decision to finally reject claims 1–7. We have jurisdiction under 35 U.S.C.
§ 6(b).
We affirm.

1 Michael A. Racusin (“Appellant”) is the applicant as provided in 37
C.F.R. § 1.46 and is identified as the real party in interest. App. Br. 1.
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STATEMENT OF THE CASE
Appellant’s disclosed and claimed invention relates to
a prepaid commodity purchase system for purchase of a
commodity, such as gasoline, and delivery of the commodity at
a later time, for example, at retail gasoline stations and a method
for selling such commodities that allows a purchaser to pre-
purchase a commodity, such as gasoline, at a discount or no
discount without any constraints on the location of delivery
because the system automatically adjusts the retail price as a
function of the location.
Spec. ¶ 1.
Claim 1 is illustrative of the claimed invention and reads as follows:
1. In a system comprising a Point of Sale (POS)
terminal and a server, a method for operating said POS terminal
in multiple geographic locations with a commodity card based
upon a dollar value that enables gasoline to be purchased at a
discounted retail gas price for later delivery at a price based upon
a wholesale gas price existing at a location of the POS terminal
at delivery at a time of purchase of a commodity card, the
commodity card having an initial prepaid cash value in dollars
for enabling a pump to be controlled by the the [sic] POS
terminal up to a current cash value of the commodity card, the
method comprising the steps of:
(a) enabling at least purchaser’s account number data from
said commodity card to be read at said POS terminal;
(b) enabling POS data including at least a location of the
POS terminal and a purchaser’s account number as well as a
current cash value in a purchaser’s account, an undiscounted
wholesale gas price, an undiscounted retail gas price at the POS
terminal at a time of delivery and a discounted wholesale gas
price at the time of purchase of the commodity card to be stored
on a storage medium;
(c) automatically determining a maximum number of units
of gas that can be pumped at said POS terminal at a location
where said POS terminal is located in response to said
commodity card being read at said POS terminal by determining
a discounted unit retail price at a time of delivery to be the
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undiscounted retail gas price at the location of delivery minus an
undiscounted wholesale price at the time of delivery plus a
discounted wholesale unit price at the location of delivery at a
discount set at the time of purchase of the commodity card and
using the discounted unit retail price and the current cash balance
of the commodity card in order to determine the maximum
number of units;
(d) automatically enabling a pump at said POS terminal
for said maximum number of units of said commodity
determined in step (c) to allow gas to be pumped; and
(e) automatically debiting the discounted retail gas price
times the number of units pumped from the current cash value of
purchaser’s account in a single transaction.

THE REJECTIONS
The Examiner rejected claims 1–7 under 35 U.S.C. § 101 as directed o
patent ineligible subject matter. Final Act. 6–9.
The Examiner rejected claims 1–7 under 35 U.S.C. § 102 as
anticipated by Cox (US 2013/0198074 Al; pub. Aug. 1, 2013). Final
Act. 11–13.

ANALYSIS
THE § 101 REJECTION
Claims 1–7
Based on the record before us, we are not persuaded that the Examiner
erred in rejecting claims 1–7 as directed to patent ineligible subject matter.
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 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
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ideas” are not patentable. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S.
208, 216 (2014) (citation omitted).
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. Kappos, 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 (Gottschalk v. 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.
(15 How.) 252, 267–68 (1854))); 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
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mathematical formula.” Diehr, 450 U.S. at 176; see also id. at 191 (“We
view respondents’ claims as nothing more than a process for molding rubber
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 turn 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. (alterations in original) (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
section 101. USPTO’s 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Memorandum”). Under that
guidance, we first look to whether the claim recites:
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(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
organizing human activity such as a fundamental economic
practice, or mental processes); 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, Jan. 2018)).
See Memorandum, 84 Fed. Reg. at 52, 55–56. 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
are 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.
See Memorandum, 84 Fed. Reg. at 56.

Analysis – Revised Step 2A
Under the Memorandum, in prong one of step 2A we look to whether
the claims recite a judicial exception. The claimed invention includes “(a)
enabling at least purchaser’s account number data from said commodity card
to be read at said [point of sale (POS)] terminal;” “(b) enabling POS data
including [certain POS information] to be stored on a storage medium;” “(c)
automatically determining a maximum number of units of gas that can be
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pumped . . .” by subtracting the undiscounted wholesale price at the time of
delivery from the undiscounted retail gas price at the location of delivery
and then adding a discounted wholesale unit price at the location of delivery
at a discount set at the time of purchase of the commodity card to get the
discounted unit retail price “and using the discounted unit retail price and the
current cash balance of the commodity card in order to determine the
maximum number of units;” “(d) automatically enabling a pump. . . for said
maximum number of units of said commodity determined in step (c) to
allow gas to be pumped;” and “(e) automatically debiting the discounted
retail gas price times the number of units pumped from the current cash
value of purchaser’s account in a single transaction.” Claim 1.
In other words, the claimed invention includes reading data from a
commodity card, enabling the storing of POS data in a storage medium,
calculating the maximum number of gas units based on the stored POS data
and current cash balance of the commodity card, enabling pumping of the
determining maximum number of gas units, and debiting an amount from
the purchaser’s account.
These steps recite conducting a financial transaction, namely
“conducting a transaction using a prepaid commodity purchase system that
enables a discounted commodity to be purchased for later delivery.” Ans. 3.
As such, the claimed invention includes commercial activities and/or a
fundamental economic practice and is a method of organizing human
activity, which is an abstract idea. See Final Act. 6–7; see also OIP Techs.,
Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir. 2015) (finding ineligible
claims directed to pricing a product based on collected and analyzed
information). Additionally, the claimed invention determines a maximum
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number of gas units based on the stored point of sale data. This step
performs mathematical calculations and is a mathematical concept, which is
also an abstract idea. See Flook, 437 U.S. at 595 (noting that “if a claim is
directed essentially to a method of calculating, using a mathematical
formula, even if the solution is for a specific purpose, the claimed method is
nonstatutory.”)(citations and quotation marks omitted).
Under prong two of revised step 2A, we determine whether the recited
judicial exception is integrated into a practical application of that exception
by: (a) identifying whether there are any additional elements recited in the
claim beyond the judicial exception(s); and (b) evaluating those additional
elements individually and in combination to determine whether they
integrate the exception into a practical application.
The Examiner identifies a POS terminal and server as additional
limitations and determines that “[b]oth the POS terminal and the server can
be merely general purpose computers that perform basic computer functions
that are well-understood routine and conventional.” Final Act. 7. The
Examiner additionally determines that “[t]aking these computer limitations
as an ordered combination adds nothing that is not already present when the
elements are taken individually.” Final Act. 8.
Appellant, on the other hand, contends that the claimed invention
provides a technological advancement. App. Br. 5. Specifically, Appellant
argues that because “[k]nown gas discount cards do not take any price
component variables into account,” these discount cards “cannot be used
over a large region, such as the entire US.” App. Br. 6. According to
Appellant, the claimed invention “recite[s] a process and a system that
allows an oil company to provide a discount on only the wholesale price of
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gas that takes into account the wide range of variable price components
relating to state and local taxes and wholesale crude oil prices at every
location” and therefore “[t]he claimed system is a drastic improvement over
the prior art.” Id. Appellant further asserts that the claimed invention
“solve[s] a technological problem; namely, a system for processing gas
discounts on only the wholesale gas component of the unit retail gas price”
(App. Br. 11) and “improve[s] an existing technological process of the
ability of a POS terminal to process wholesale price components and are
therefore patent eligible.” App. Br. 12.
We are not persuaded by Appellant’s argument. While the claimed
invention may have “no geographical constraints and can be used across an
entire region” (App. Br. 14), this is not a technical improvement or solution
to a technical problem. As the Examiner explains, “[i]n the instant case, the
claimed invention merely performs a simple ‘calculation’ to determine the
number of gallons that can be pumped at the pre-paid discounted rate using
simple mathematics (addition and subtraction).” Ans. 6. “There is no
improvement to the claimed pump since the pump functions the same way
regardless of what the price of the fuel is or what discount is available to the
consumer. There is also no transformation of the fuel as a result of the
claimed ‘calculations’. . .” Ans. 7. Instead, the claimed invention merely
uses the computer as tool to perform the abstract idea, namely to calculate a
discounted gas price and conduct the sales transaction. See, e.g., Credit
Acceptance Corp. v. Westlake Services, 859 F.3d 1044 (Fed. Cir. 2017)
(using a computer as a tool to process an application for financing a
purchase).
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Moreover, we note that the steps of reading reading data from a
commodity card, saving POS data, and enabling a pump to dispense the
calculated number of units are insignificant extra-solution activity. See, e.g.
MPEP § 2106.05(g); Flook, 437 U.S. at 590 (holding that the step of
adjusting an alarm limit based on the output of a mathematical formula was
‘‘postsolution activity’’ and did not render method patent eligible). As such,
based on the record before us, we determine that the judicial exceptions
recited in the claimed invention are not integrated into a practical
application.
Analysis – Revised Step 2B
Under step 2B, we determine that the claimed invention does not add
significantly more to the abstract idea. In particular, Appellant argues that
the Examiner incorrectly analogizes the claimed invention to cited cases and
that the claimed invention is not well-known, routine, and conventional.
App. Br. 13–14.
We find these arguments unpersuasive. As the Examiner identifies,
the claimed invention is “merely instructions to implement the abstract idea
on a computer and require no more than a generic computer to perform
generic computer functions that are well-understood, routine and
conventional activities previously known to the industry.” Ans. 3. See also
Ans. 4 (citing Buysafe Inc. vs Google Inc., 765 F.3d 1350 (Fed. Cir. 2014
and Ultramercial Inc. v. Hulu LLC, 772 F.3d 709 (Fed. Cir. 2014) as
support); Alice, 573 U.S. at 225 (finding that computer functions, such as
electronic recording keep and “obtain[ing] data, adjust[ing] account
balances, and issu[ing] automated instructions; all of these computer
functions are “well-understood, routine, conventional”); Content Extraction
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& Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1347
(Fed. Cir. 2014) (discussing that data collection, recognition, and storage is
well-known). As such, we are not persuaded of error in the Examiner’s
determination.
Accordingly, based on the record before us, we affirm the rejection of
claims 1–7 as directed to patent ineligible subject matter.

THE § 102 REJECTION BASED ON COX
Claims 1–7
Based on the record before us, we are persuaded that the Examiner
erred in rejecting claims 1–7 are anticipated by Cox.
Appellant asserts that Cox fails to disclose
automatically determining a maximum number of units of gas
that can be pumped at said POS terminal at a location where said
POS terminal is located in response to said commodity card
being read at said POS terminal by determining a discounted unit
retail price at a time of delivery to be the undiscounted retail gas
price at the location of delivery minus an undiscounted wholesale
price at the time of delivery plus a discounted wholesale unit
price at the location of delivery at a discount set at the time of
purchase of the commodity card and using the discounted unit
retail price and the current cash balance of the commodity card
in order to determine the maximum number of units,
as recited in claim 1. App. Br. 17. Namely, Appellant maintains that Cox
discloses purchasing “a ‘credit’ discount for a fixed number of gallons of gas
at ‘specified’ retail locations.” Id. And that “[w]hen a purchaser takes
delivery of gas at a retail outlet, the Cox system checks whether the retail
location is one of the ‘specified’ locations and number of credits are
available and applies the credits on a per gallon basis accordingly. The credit
is applied to the entire unit retail of gas.” Id. In other words, Cox does not
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determine a discounted unit price according to the particular calculations as
recited in the claim. Moreover, Appellant contend that
Cox simply discloses a system for processing a discount on the
entire per unit retail gas price which includes a wholesale price
component, local taxes and local fees including dealer profits.
Since the local taxes cannot be discounted, providing a discount
on the entire retail per unit gas price is not the same as providing
a discount on a single component of the per unit retail gas price.
Reply Br. 10.
We are persuaded of error in the Examiner’s rejection. Specifically,
the claimed invention determines the discounted unit retail price by
subtracting an undiscounted wholesale price and then adding the discounted
wholesale price. While Cox generally discloses purchasing gasoline units at
a specified or agreed upon price (see, e.g., Cox, Abstract), Cox fails to
disclose any particular method of calculating the discounted unit retail price.
Based on the record before us, in order for us to sustain the Examiner’s
rejection, we would need to resort to impermissible speculation or
unfounded assumptions or rationales to supply deficiencies in the factual
bases of the rejection before us. In re Warner, 379 F.2d 1011, 1017 (CCPA
1967). As such, we determine that the Examiner erred in finding that Cox
discloses the recited automatically determining limitation.
Accordingly, we reverse the rejection of claims 1–7 as anticipated
based on Cox.

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DECISION
We affirm the Examiner’s decision to reject claims 1–7 as directed to
patent ineligible subject matter, but reverse the Examiner’s decision to reject
claims 1–7 as anticipated by Cox.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a).

AFFIRMED