Recce, Michael et al.

Patent Trials and Appeals Board

Mar 24, 2020

12079717 - (D) (P.T.A.B. Mar. 24, 2020)

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.
12/079,717 03/28/2008 Michael Recce P-73580-US 2227
49443 7590 03/24/2020
Pearl Cohen Zedek Latzer Baratz LLP
1500 Broadway
12th Floor
New York, NY 10036
EXAMINER
MILEF, ELDA G
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
03/24/2020 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):
Arch-USPTO@PearlCohen.com
USPTO@PearlCohen.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte MICHAEL RECCE and ANTONY JAMES WICKS

Appeal 2018-003514
Application 12/079,717
Technology Center 3600

Before ANTON W. FETTING, PHILIP J. HOFFMANN, and
BRUCE T. WIEDER, Administrative Patent Judges.

HOFFMANN, Administrative Patent Judge.

DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1, 3–7, 9–13, and 15–24. We have
jurisdiction under 35 U.S.C. § 6(b). Appellant and the Board conducted on
oral hearing on March 2, 2020.
We AFFIRM.

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. According to Appellant, “[t]he real parties in interest . . .
are Actimize Limited . . . and NICE Ltd. . . . Actimize Limited is a wholly
owned subsidiary of NICE Ltd.” Appeal Br. 1.
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According to Appellant, the invention “relates to a method and system
for determining a level of risk associated with doing business with a party.”
Spec. ¶ 1. Below, we reproduce independent claim 1, as illustrative of the
appealed claims:
1. A computer-implemented method comprising:
determining, by a computerized customer risk monitor, a
first risk score for a first party, based on a presented
characteristic of said first party;
associating, by said computerized customer risk monitor,
said first party with a second party, based on said first risk
score;
determining, by said computerized customer risk
monitor, a second risk score, wherein the second risk score
depends on an activity involving said first party and said second
party;
wherein the activity is an electronic record of a financial
occurrence in the form of at least one of a monetary transaction
that involves said first party and said second party, and a non-
monetary transaction that involves said first party and said
second party;
determining, by said computerized customer risk
monitor, a resultant risk score that characterizes said first party,
based on said first and second risk scores; and
based on the resultant risk score, generating by said
computerized customer risk monitor one or more alerts.

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REJECTIONS
The Examiner rejects the claims as follows:
I. Claims 1, 3–7, 9–13, and 15–24 under 35 U.S.C. § 101 as
reciting only patent-ineligible subject matter2; and
II. Claims 7, 9–12, 21, and 22 under 35 U.S.C. § 112, second
paragraph, as indefinite.3
PRINCIPLES OF LAW CONCERNING 35 U.S.C. § 101
An invention is patent eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101. The
Supreme Court has long interpreted 35 U.S.C. § 101 to include implicit
exceptions, however: “[l]aws of nature, natural phenomena, and abstract
ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’l, 573 U.S. 208,
216 (2014) (citation omitted).
In determining whether a claim falls within an excluded category, the
Supreme Court’s two-step framework, described in Mayo and Alice, guides
us. See 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.” Id. at 219 (“On
their face, the claims before us are drawn to the concept of intermediated

2 As discussed below, we sustain the Examiner’s § 101 rejection of
claims 13, 15–18, 23 and 24 “because the . . . [claims are] directed to a
judicial exception . . . without significantly more.” Non-Final Action 6.
Accordingly, we do not reach the Examiner’s § 101 rejection of these claims
as “directed to non-statutory subject matter . . . [because the] claim[s]
cover[] a signal.” Id. 5–6.
3 Although the Examiner appears to reject claim 8 as indefinite, the claim is
canceled. See Non-Final Action 4–5; see Appeal Br., Claims App.
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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 that the courts 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 that the courts 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, although the claim at issue recited a mathematical formula,
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
products and not as an attempt to patent a mathematical formula.”).
Nonetheless, 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.”
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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. (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.
2019 Revised Patent Subject Matter Eligibility Guidance
Last year, the U.S. Patent and Trademark Office published revised
guidance on the application of § 101. See 2019 Revised Patent Subject
Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”).
Under that Guidance, 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 organizing human activity such as i) a fundamental economic
practice, or ii) managing personal behavior or relationships or
interactions between people, 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)).
A practical application “appl[ies], rel[ies] on, or use[s] the judicial exception
in a manner that imposes a meaningful limit on the judicial exception, such
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that the claim is more than a drafting effort designed to monopolize the
judicial exception.” Guidance at 54.
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 either:
(3) adds a specific limitation beyond the judicial
exception which is not “well-understood, routine, [or]
conventional” in the field (see MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, and
conventional activities previously known to the industry,
specified at a high level of generality, to the judicial exception.
See generally Guidance.
ANALYSIS
Rejection I—Rejection under § 101
Initially, we note that Appellant argues against the Examiner’s § 101
rejection of the claims as a group. See, e.g., Appeal Br. 13. We choose
independent claim 1 for our analysis, and the remaining claims stand or fall
with claim 1. See 37 C.F.R. § 41.37 (c)(1)(iv). For the following reasons,
we sustain the Examiner’s rejection of the claims as patent-ineligible.
We determine that in accordance with point (1) of the Guidance
referenced above, independent claim 1 recites at least one judicial exception,
including an abstract idea. More specifically, as described in further detail,
the abstract idea includes certain methods of organizing human activity, such
as a fundamental economic practice.
With reference to claim 1, the claim recites a method, which
comprises: determining a first risk score for a first party, based on a
characteristic of the first party; associating the first party with a second
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party, based on the first risk score; determining a second risk score that
depends on an activity involving the first and second parties, wherein the
activity is an electronic record of a financial occurrence in the form of either
a monetary or non-monetary transaction that involves the first and second
parties; determining a resultant risk score that characterizes the first party,
based on the first and second risk scores; and generating an alert based on
the resultant risk score. See Appeal Br., Claims App. (Claim 1).
It is well settled that managing financial risk is a fundamental
economic practice, and, therefore, managing financial risk is an abstract
idea. See MPEP § 2106.04(a)(2)(I)(B); Alice, 573 U.S. at 219–20
(“intermediated settlement” is a fundamental economic practice, and, thus,
an abstract idea); Bilski, 561 U.S. at 611 (“hedging” is a fundamental
economic practice, which is an abstract idea).
In accordance with point (2) of the Guidance referenced above,
claim 1 does not recite any additional element that integrates the judicial
exception into a practical application—i.e., something that “appl[ies],
rel[ies] on, or use[s] the judicial exception in a manner that imposes a
meaningful limit on the judicial exception, such that the claim is more than a
drafting effort designed to monopolize the judicial exception.” Guidance
at 54. Aside from the abstract idea described above, the claim only
generically recites the use of certain arguably-physical hardware—i.e., a
computerized customer risk monitor—and, thus, this hardware does not
meaningfully limit the claim. Further, in the Specification, Appellant does
not describe the risk monitor in such a way as to indicate that the monitor is
anything other than generic hardware. For example, paragraph 181 of
Appellant’s Specification describes components of customer rick
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monitor 100 as including generic components such as “user interface 705,
. . . processor 710, and . . . memory 715,” and describes that the customer
risk monitor “may be implemented on a general purpose microcomputer.”
Spec. ¶ 181. Thus, claim 1 does not integrate the abstract idea into a
practical application, and does not affect an improvement in any technology
or technical field.
Therefore, for the above reasons, independent claim 1 is directed to an
abstract idea, and does not integrate any judicial exception into a practical
application.
In accordance with points (3) and (4) of the Guidance referenced
above, claim 1 fails to recite a specific limitation beyond the judicial
exception which is not well understood, routine, and conventional in the
field, but instead simply appends well-understood, routine, and conventional
activities previously known to the industry, specified at a high level of
generality, to the judicial exception. Taking the claim elements separately,
the claimed hardware, as well as the functions performed by the claimed
hardware, are purely conventional. Specifically, claim 1 uses known,
generic components—i.e., a customer risk monitor that, according to the
Specification, includes generic components such as an interface, processor,
and memory—to perform their known, basic functions. Although, arguably,
the information processed and transmitted differs, the claim recites the
hardware only at a high level of generality. In other words, here the claim
recites only well-understood, routine, and conventional functions. See In re
Katz, 639 F.3d 1303, 1316 (Fed. Cir. 2011) (“Absent a possible narrower
construction of the terms ‘processing,’ ‘receiving,’ and ‘storing,’ . . . those
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functions can be achieved by any general purpose computer without special
programming.”).
For the following reasons, when considered as an ordered
combination, claim 1’s hardware does not add anything that is not already
present when we consider the steps separately. The hardware and its
technological configuration remains the same before, during, and after
transmitting the recommendation to the user. Thus, the claim amounts to
nothing significantly more than instructions to apply the abstract idea with
generic hardware, and does not improve the hardware. Accordingly, the
claim recitations are insufficient to transform the abstract idea into a patent-
eligible invention. See Alice, 573 U.S. at 225–26.
We have considered all of Appellant’s arguments in the Briefs, but
Appellant does not persuade us of error. See Appeal Br. 6–13; see Reply
Br. 2. We now address certain arguments below.
Appellant’s argument with reference to BASCOM Glob. Internet
Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016), is not
persuasive of error. See Appeal Br. 7–9, 11–12. In BASCOM, the Court did
not find claims eligible, but rather found that appellee did not provide
sufficient evidence to support a 12(b)(6) motion to dismiss in which facts are
presumed in the non-movant’s favor. Regardless, a key fact in BASCOM
was the presence of a structural change by “installation of a filtering tool at a
specific location, remote from the end users, with customizable filtering
features specific to each end user. This design gives the filtering tool both
the benefits of a filter on a local computer and the benefits of a filter on the
ISP server.” BASCOM, 827 F.3d at 1350. Appellant’s claim 1, for example,
does not provide an analogous structural benefit.
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Appellant’s argument with respect to Enfish, LLC v. Microsoft Corp.,
822 F.3d 1327 (Fed. Cir. 2016) also is unpersuasive. Appeal Br. 8–10.
Unlike Appellant’s claims, the claims in Enfish recited a “specific
improvement to the way computers operate”—i.e., an improved database
configuration that permitted faster and more efficient searching. Id.
at 1330–33, 1336. The Federal Circuit later explained that the claims in
Enfish “did more than allow computers to perform familiar tasks with
greater speed and efficiency” but “actually permitted users to launch and
construct databases in a new way.” Finjan, Inc. v. Blue Coat Sys., Inc., 879
F.3d 1299, 1305 (Fed. Cir. 2018). The Federal Circuit also explained that
the claims in Enfish “focused on an improvement to computer functionality
itself, not on economic or other tasks for which a computer is used in its
ordinary capacity.” Secured Mail Sols. LLC v. Universal Wilde, Inc., 873
F.3d 905, 910 (Fed. Cir. 2017). In contrast, Appellant’s claims may improve
the business process involved with computing financial risk, but Appellant’s
claims do not have an effect on the manner, or speed, with which the
customer risk monitor (i.e., any non-abstract hardware) calculates risk.
We are not persuaded by Appellant’s argument with respect to McRO,
Inc. dba Planet Blue v. Bandai Namco Games America Inc., 837 F.3d 1299
(Fed. Cir. 2016). Appeal Br. 8–13. In McRO the claims were directed to a
specific asserted improvement in computer animation—i.e., the automatic
use of rules of a particular type. Id. at 1313. Appellant’s claim 1, for
example, recites a customer risk monitor that receives information, computes
a risk score, and generates an alert based on the computed risk score. Thus,
unlike McRO, Appellant’s claim 1 is not directed to an improvement to a
computer process. In this regard, the problem solved by Appellant’s claims
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is not a technical problem but rather a business problem—evaluating
business risk by using know-your-customer (KYC) risk assessment and
transactional monitoring “synergistically.” Spec. ¶ 3.
Rejection II—Rejection under § 112
The Examiner rejects independent claim 7, and its dependent
claims 9–12, 21, and 22, as indefinite. Non-Final Action 4–5. Claim 7
recites the following:
7. A system comprising:
a memory comprising:
a module that determines a first risk score that
characterizes a first party, based on a presented
characteristic of said first party;
a module that associates said first party with a
second party, based on said first risk score;
a module that determines a second risk score that
characterizes an activity involving said first party and
said second party, wherein the activity is an electronic
record of a financial occurrence in the form of at least
one of a monetary transaction that involves said first
party and said second party, and a non-monetary
transaction that involves said first party and said second
party;
a module that determines a resultant risk score that
characterizes said first party, based on said first and
second risk scores; and
a module that generates one or more alerts based
on the resultant risk score; and
a processor to execute instructions stored in the memory.
Appeal Br., Claims App.
The Examiner interprets each of the claimed memory “module[s]” in
accordance with 35 U.S.C. § 112, sixth paragraph. Non-Final Action 2–5.
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According to the Examiner, the claims are indefinite because Appellant’s
Specification does not describe structure sufficient to perform any of the
claimed functions performed by the modules—i.e., structure “that
determines a first risk score that characterizes a first party . . . ,” “that
associates said first party with a second party . . . ,” “that determines a
second risk score that characterizes an activity involving said first party and
said second party . . . ,” “that determines a resultant risk score that
characterizes said first party . . . ,” and “that generates one or more alerts
based on the resultant risk score . . . ,” as claimed. Id.; Appeal Br., Claims
App. (Claim 7). According to Appellant, “[t]he claims should not be
interpreted as including means-plus-function limitations.” Appeal Br. 4; see
id. 4–6. Regardless, according to Appellant, the Specification describes
structure sufficient to perform the claimed function. Id. 5–6. Specifically,
according to Appellant, the Specification describes that “[p]rogram 720”
performs the claimed functions. Id.
Based on our review of the record, we sustain the indefiniteness
rejection. The Examiner properly interprets the claimed memory modules in
accordance with § 112, sixth paragraph. “‘Module’ is a well-known nonce
word that can operate as a substitute for ‘means’ in the context of § 112,
para[graph] 6.” Williamson v. Citrix Online, LLC, 792 F.3d 1339, 1350
(Fed. Cir. 2015).
“For means-plus-function limitations where the disclosed structure is
a computer programmed to implement an algorithm, the patent must disclose
enough of an algorithm to provide the necessary structure under 35 U.S.C.
§ 112 ¶ 6.” In re Aoyama, 656 F.3d 1293, 1297 (Fed. Cir. 2011). The
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portion of the Specification that Appellant cites in the Appeal Brief—
“paragraph [0183]” (Appeal Br. 5)—states in relevant part that
[p]rogram 720 may be implemented as a single module or as a
plurality of modules that operate in cooperation with one
another. The term “module” is used herein to denote a
functional operation that may be embodied either as a stand-
alone component or as an integrated configuration of a
plurality of subordinate components.
Spec. ¶ 183 (emphasis added). This statement that the module is one or
more components does not set forth any algorithm that performs the claimed
function, and does not otherwise describe structure sufficient to perform any
of the claimed functions. Appellant further cites paragraphs 181–185 of the
Specification. Appeal Br. 6. None of these paragraphs discloses either
structure or an algorithm that performs the claimed functions, however.
Based on the foregoing, Appellant does not persuade us that the
Examiner’s indefiniteness rejection is in error. Consequently, we sustain the
Examiner’s rejection of independent claim 7, and its dependent claims 9–12,
21, and 22, under § 112, second paragraph.
CONCLUSION
We AFFIRM the Examiner’s §§ 101 and 112, second paragraph,
rejections of clams 1, 3–7, 9–13, and 15–24.

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In summary:
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.
§ 41.50(f).
AFFIRMED

Claims
Rejected
35 U.S.C. § Reference(s)/Basis  Affirmed Reversed
1, 3–7, 9–13,
15–24
101 Eligibility 1, 3–7,
9–13,
15–24

7, 9–12, 21,
22
112, second
paragraph
Indefiniteness 7, 9–12,
21, 22

Overall
Outcome
1, 3–7,
9–13,
15–24