Robert Alexander et al.Download PDFPatent Trials and Appeals BoardJan 13, 20212020003133 (P.T.A.B. Jan. 13, 2021) Copy Citation 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. 10/822,999 04/13/2004 Robert Minter Alexander IV COF5002 4661 150308 7590 01/13/2021 Troutman Pepper Hamilton Sanders LLP CAPITAL ONE 600 Peachtree St., NE, Suite 5200 Atlanta, GA 30308 EXAMINER PRASAD, NANCY N ART UNIT PAPER NUMBER 3624 NOTIFICATION DATE DELIVERY MODE 01/13/2021 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): Katherine.swider@troutmansanders.com capitalonepatents@troutman.com patents@troutman.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte ROBERT MINTER ALEXANDER IV and CHARLES AARON ROSENBLATT ____________ Appeal 2020–003133 Application 10/822,999 Technology Center 3600 ____________ Before HUBERT C. LORIN, ANTON W. FETTING, and NINA L. MEDLOCK, Administrative Patent Judges. FETTING, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE1 Robert Minter Alexander IV and Charles Aaron Rosenblatt (Appellant2) seek review under 35 U.S.C. § 134 of a final rejection of claims 1 Our decision will make reference to the Appellant’s Appeal Brief (“Br.,” filed June 28, 2019) and the Examiner’s Answer (“Ans.,” mailed December 6, 2019), and Final Action (“Final Act.,” mailed November 1, 2018). Appeal 2020-003133 Application 10/822,999 2 43–48 and 50–69, the only claims pending in the application on appeal. We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b). The Appellant invented a way of providing transactional access to a demand deposit account while imposing a credit card interchange rate on the respective transaction. Specification 1:5–9. An understanding of the invention can be derived from a reading of exemplary claim 43, which is reproduced below (bracketed matter and some paragraphing added). 43. A method for processing a purchase transaction between an account holder and a merchant, the method comprising: [1] identifying a credit account and a demand deposit account, the credit account and demand deposit account each associated with a predetermined account number of the account holder, the credit account including credit account data stored in one or more memory units of a first financial institution, and demand deposit account including deposit account data stored in one or more memory units of a second financial institution, the second financial institution being different from the first financial institution; [2] receiving, at the first financial institution, transaction data via an authorization network, the transaction data being associated with a purchase transaction initiated by the account holder with the merchant using the credit account, the purchase transaction having a transaction amount; 2 We use the word “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42. Appellant identifies the real party in interest as Capital One Services, LLC (Appeal Br. 3). Appeal 2020-003133 Application 10/822,999 3 [3] providing authorization data to the merchant via the authorization network for the purchase transaction including: [3.1] determining, from the received transaction data, both the predetermined account number associated with the credit account and the transaction amount, [3.2] comparing remaining credit of the credit account with the transaction amount, [3.3] providing authorization data to the merchant via the authorization network if the remaining credit of the credit account is greater than or equal to the transaction amount, and [3.4] providing authorization data to the merchant via the authorization network by providing transactional access to a second demand deposit account associated with the account holder so as to cover the transaction amount or a portion thereof not covered by the credit account if the remaining credit of the credit account is less than the transaction amount; [4] transferring, via the authorization network and after providing the authorization data, at least a portion of the transaction amount from the first financial institution system associated with the credit account to pay the merchant; [5] using one or more computer processors, automatically requesting from the second financial institution, an automated clearing house transfer of the transaction amount from the second financial institution associated with the demand deposit account to the first financial institution associated with the credit account while imposing a credit card interchange rate on the purchase transaction, Appeal 2020-003133 Application 10/822,999 4 the request made via an automated clearing house network, and wherein the second financial institution associated with the demand deposit account is electronically coupled to the first financial institution associated with the credit account; [6] receiving the automated clearing house transfer via the automated clearing house network; and [7] updating the credit account data and demand deposit account data. by effectuating an increase or decrease thereof, respectively, based on the automated clearing house transfer of the transaction amount. Claims 43–48 and 50–69 stand rejected under 35 U.S.C. § 101 as directed to a judicial exception without significantly more. ISSUES The issues of eligible subject matter turn primarily on whether the claims recite more than abstract conceptual advice of results desired. ANALYSIS This is the second time this application is appealed. This is the first time there is a rejection before us under 35 U.S.C. § 101. The claims have been substantially amended since the prior appeal. Appeal 2020-003133 Application 10/822,999 5 STEP 13 Claim 43, as a method claim, nominally recites one of the enumerated categories of eligible subject matter in 35 U.S.C. § 101. The issue before us is whether it is directed to a judicial exception without significantly more. STEP 2 The Supreme Court set forth a framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts. First, . . . determine whether the claims at issue are directed to one of those patent-ineligible concepts. If so, we then ask, “[w]hat else is there in the claims before us? To answer that question, . . . consider the elements of each claim both individually and “as an ordered combination” to determine whether the additional elements “transform the nature of the claim” into a patent- eligible application. [The Court] described step two of this analysis as a 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.” Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217–18 (2014) (citations omitted) (citing Mayo Collaborative Servs. v. Prometheus Labs, Inc., 566 U.S. 66 (2012)). To perform this test, we must first determine what the claims are directed to. This begins by determining whether the claims recite one of the judicial exceptions (a law of nature, a natural phenomenon, or an abstract idea). Then, if the claims recite a judicial exception, determining whether the claims at issue are directed to the recited judicial exception, or 3 For continuity of analysis, we adopt the steps nomenclature from 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Revised Guidance”). Appeal 2020-003133 Application 10/822,999 6 whether the recited judicial exception is integrated into a practical application of that exception, i.e., that the claims “apply, rely on, or use 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.” Revised Guidance, 84 Fed. Reg. at 54. If the claims are directed to a judicial exception, then finally determining whether the claims provide an inventive concept because the additional elements recited in the claims provide significantly more than the recited judicial exception. STEP 2A Prong 1 At a high level, and for our preliminary analysis, we note that method claim 43 recites identifying account data, receiving transaction data, providing authorization data, determining account number data, comparing amounts data, transferring amount data, requesting a data transfer, imposing an interest rate on data, receiving transferred data, and updating amount data. Identifying, comparing, determining, and imposing an interest calculation are rudimentary forms of data analysis. Providing, requesting, and transferring data are transmitting data. Updating data is modifying data. Thus, claim 43 recites analyzing, receiving, transmitting, and modifying data. None of the limitations recites technological implementation details for any of these steps, but instead recite only results desired by any and all possible means. From this we see that claim 43 does not recite the judicial exceptions of either natural phenomena or laws of nature. Under Supreme Court precedent, claims directed purely to an abstract idea are patent ineligible. As set forth in the Revised Guidance, which Appeal 2020-003133 Application 10/822,999 7 extracts and synthesizes key concepts identified by the courts, abstract ideas include (1) mathematical concepts4, (2) certain methods of organizing human activity5, and (3) mental processes.6 Among those certain methods of organizing human activity listed in the Revised Guidance are commercial or legal interactions. Like those concepts, claim 43 recites the concept of managing commercial transactions. Specifically, claim 43 recites operations that would ordinarily take place in advising one to perform a commercial credit transaction with a credit account and imposing credit interest. The advice to perform a commercial credit transaction with a credit account and imposing credit interest involves requesting a commercial payment transfer, which is an economic act, and providing authorization data to the merchant, which is an act ordinarily performed in the stream of commerce. For example, claim 43 recites “requesting . . . an automated clearing house transfer of the transaction amount,” which is an activity that would take place whenever one is managing commercial transactions electronically. Similarly, claim 1 recites “providing authorization data to the merchant,” which is also characteristic of commercial payment management. 4 See, e.g., Gottschalk v. Benson, 409 U.S. 63, 71–72 (1972); Bilski v. Kappos, 561 U.S. 593, 611 (2010); Mackay Radio & Telegraph Co. v. Radio Corp. of Am., 306 U.S. 86, 94 (1939); SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018). 5 See, e.g., Bilski, 561 U.S. at 628; Alice, 573 U.S. at 219-20; Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed Cir. 2014); Smart Sys. Innovations, LLC v. Chicago Transit Auth., 873 F.3d 1364, 1383 (Fed. Cir. 2017); In re Marco Guldenaar Holding B.V., 911 F.3d 1157, 1160–61 (Fed. Cir. 2018). 6 See, e.g., Benson, 409 U.S. at 67; CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1371–72 (Fed. Cir. 2011); Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016). Appeal 2020-003133 Application 10/822,999 8 The Examiner determines the claims to be directed to collecting and analyzing transaction data related to an account holder. Ans. 6. The preamble to claim 43 recites that it is a method for processing a purchase transaction between an account holder and a merchant. The steps in claim 43 result in managing commercial transactions by performing a commercial credit transaction with a credit account and imposing credit interest absent any technological mechanism other than a conventional computer for doing so. As to the specific limitations, limitations 2 and 6 recite receiving data. Limitations 1, 3–5, and 7 recite generic and conventional analyzing, transmitting, and modifying of commercial transaction data, which advise one to apply generic functions to get to these results. The limitations thus recite advice for performing a commercial credit transaction with a credit account and imposing credit interest. To advocate performing a commercial credit transaction with a credit account and imposing credit interest is conceptual advice for results desired and not technological operations. The Specification at 1:5–9 describes the invention as relating to providing transactional access to a demand deposit account while imposing a credit card interchange rate on the respective transaction. Thus, all this intrinsic evidence shows that claim 43 recites managing commercial transactions. This is consistent with the Examiner’s determination. This in turn is an example of commercial or legal interactions as a certain method of organizing human activity because managing commercial transactions is fundamental to commercial transactions. The concept of managing commercial transactions by performing a commercial credit transaction with a credit account and imposing credit interest is one idea for Appeal 2020-003133 Application 10/822,999 9 matching payment resources with transactions. The steps recited in claim 43 are part of how this might conceptually be premised. Our reviewing court has found claims to be directed to abstract ideas when they recited similar subject matter. Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1347 (Fed. Cir. 2014) (collecting, recognizing, and storing data fed into an ATM). Alternately, this is an example of concepts performed in the human mind as mental processes because the steps of analyzing, receiving, transmitting, and modifying data mimic human thought processes of observation, evaluation, judgment, and opinion, perhaps with paper and pencil, where the data interpretation is perceptible only in the human mind. See In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016); FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093–94 (Fed. Cir. 2016). Claim 43, unlike the claims found non-abstract in prior cases, uses generic computer technology to perform data analysis, reception, transmission, and modification and does not recite an improvement to a particular computer technology. See, e.g., McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314–15 (Fed. Cir. 2016) (finding claims not abstract because they “focused on a specific asserted improvement in computer animation”). As such, claim 43 recites analyzing, receiving, transmitting, and modifying data, and not a technological implementation or application of that idea. From this we conclude that at least to this degree, claim 43 recites managing commercial transactions by performing a commercial credit transaction with a credit account and imposing credit interest, which is a commercial and legal interaction, one of certain methods of organizing Appeal 2020-003133 Application 10/822,999 10 human activity identified in the Revised Guidance, and, thus, an abstract idea. STEP 2A Prong 2 The next issue is whether claim 43 not only recites, but is more precisely directed to this concept itself or whether it is instead directed to some technological implementation or application of, or improvement to, this concept i.e. integrated into a practical application.7 At the same time, we tread carefully in construing this exclusionary principle lest it swallow all of patent law. At some level, “all inventions ... embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Thus, an invention is not rendered ineligible for patent simply because it involves an abstract concept. “[A]pplication[s]” of such concepts “ ‘to a new and useful end,’ ” we have said, remain eligible for patent protection. Accordingly, in applying the § 101 exception, we must distinguish between patents that claim the “ ‘buildin[g] block[s]’ ” of human ingenuity and those that integrate the building blocks into something more. Alice, 573 U.S. at 217 (citations omitted). Taking the claim elements separately, the operation performed by the computer at each step of the process is expressed purely in terms of results, devoid of implementation details. Steps 2 and 6 are pure data gathering steps. Limitations describing the nature of the data do not alter this. Steps 4, 5, and 7 recite basic conventional data operations such as generating, updating, and storing data. Steps 1 and 3 recite generic computer processing expressed in terms of results desired by any and all possible means and so present no more than conceptual advice. All 7 See, e.g., Alice, 573 U.S. at 223, discussing Diamond v. Diehr, 450 U.S. 175 (1981). Appeal 2020-003133 Application 10/822,999 11 purported inventive aspects reside in how the data are interpreted and the results desired, and not in how the process physically enforces such a data interpretation or in how the processing technologically achieves those results. Viewed as a whole, Appellant’s claim 43 simply recites the concept of managing commercial transactions by performing a commercial credit transaction with a credit account and imposing credit interest as performed by a generic computer. This is no more than conceptual advice on the parameters for this concept and the generic computer processes necessary to process those parameters, and does not recite any particular implementation. Claim 43 does not, for example, purport to improve the functioning of the computer itself. Nor does it effect an improvement in any other technology or technical field. The Specification only spells out different generic equipment8 and parameters that might be applied using this concept and the particular steps such conventional processing would entail based on the concept of managing commercial transactions by performing a commercial credit transaction with a credit account and imposing credit interest under different scenarios. It does not describe any particular improvement in the manner a computer functions. Instead, claim 43 at issue amounts to nothing significantly more than an instruction to apply managing commercial transactions by performing a commercial credit transaction with a credit account and imposing credit interest using some unspecified, generic computer. Under our precedents, that is not enough to transform an abstract idea into a patent-eligible invention. See Alice, 573 U.S. at 225–26. 8 The Specification describes a processing unit. Spec. 8:10. Appeal 2020-003133 Application 10/822,999 12 None of the limitations reflects an improvement in the functioning of a computer, or an improvement to other technology or technical field, applies or uses a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition, implements a judicial exception with, or uses a judicial exception in conjunction with, a particular machine or manufacture that is integral to the claim, effects a transformation or reduction of a particular article to a different state or thing, or applies or uses the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception. We conclude that claim 43 is directed to achieving the result of managing commercial transactions by advising one to perform a commercial credit transaction with a credit account and imposing credit interest, as distinguished from a technological improvement for achieving or applying that result. This amounts to commercial or legal interactions, which fall within certain methods of organizing human activity that constitute abstract ideas. The claim does not integrate the judicial exception into a practical application. STEP 2B The next issue is whether claim 43 provides an inventive concept because the additional elements recited in the claim provide significantly more than the recited judicial exception. The introduction of a computer into the claims does not generally alter the analysis at Mayo step two. the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention. Appeal 2020-003133 Application 10/822,999 13 Stating an abstract idea “while adding the words ‘apply it’” is not enough for patent eligibility. Nor is limiting the use of an abstract idea “‘to a particular technological environment.’” Stating an abstract idea while adding the words “apply it with a computer” simply combines those two steps, with the same deficient result. Thus, if a patent’s recitation of a computer amounts to a mere instruction to “implement[t]” an abstract idea “on . . . a computer,” that addition cannot impart patent eligibility. This conclusion accords with the preemption concern that undergirds our § 101 jurisprudence. Given the ubiquity of computers, wholly generic computer implementation is not generally the sort of “additional feature[e]” that provides any “practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.” Alice, 573 U.S. at 223–24 (citations omitted). “[T]he relevant question is whether the claims here do more than simply instruct the practitioner to implement the abstract idea [] on a generic computer.” Alice, 573 U.S. at 225. They do not. Taking the claim elements separately, the function performed by the computer at each step of the process is purely conventional. Using a computer for analyzing, receiving, transmitting, and modifying data amounts to electronic data query and retrieval—one of the most basic functions of a computer. All of these computer functions are generic, routine, conventional computer activities that are performed only for their conventional uses. See Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016). See also In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011) (“Absent a possible narrower construction of the terms ‘processing,’ ‘receiving,’ and ‘storing,’ . . . those functions can be achieved by any general purpose computer without special programming”). None of these activities is used in some unconventional Appeal 2020-003133 Application 10/822,999 14 manner nor does any produce some unexpected result. Appellant does not contend it invented any of these activities. In short, each step does no more than require a generic computer to perform generic computer functions. As to the data operated upon, “even if a process of collecting and analyzing information is ‘limited to particular content’ or a particular ‘source,’ that limitation does not make the collection and analysis other than abstract.” SAP Am., 898 F.3d at 1168. Considered as an ordered combination, the computer components of Appellant’s claim 43 add nothing that is not already present when the steps are considered separately. The sequence of data analysis-reception- transmission-modification is equally generic and conventional. See Ultramercial, 772 F.3d at 715 (sequence of receiving, selecting, offering for exchange, display, allowing access, and receiving payment recited an abstraction), Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017) (sequence of data retrieval, analysis, modification, generation, display, and transmission), Two-Way Media Ltd. v. Comcast Cable Communications, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017) (sequence of processing, routing, controlling, and monitoring). The ordering of the steps is therefore ordinary and conventional. We conclude that claim 43 does not provide an inventive concept because the additional elements recited in the claim do not provide significantly more than the recited judicial exception. REMAINING CLAIMS Claim 43 is representative. The other independent method claim 60 is substantially similar at least as regards this analysis. The remaining method claims merely describe process parameters. We conclude that the method Appeal 2020-003133 Application 10/822,999 15 claims at issue are directed to a patent-ineligible concept itself, and not to the practical application of that concept. As to the structural claims, they are no different from the method claims in substance. The method claims recite the abstract idea implemented on a generic computer; the system claims recite a handful of generic computer components configured to implement the same idea. This Court has long “warn[ed] ... against” interpreting § 101“in ways that make patent eligibility ‘depend simply on the draftsman’s art.’” Alice, 573 U.S. at 226. As a corollary, the claims are not directed to any particular machine. LEGAL CONCLUSION From these determinations we further determine that the claims do not recite an improvement to the functioning of the computer itself or to any other technology or technical field, a particular machine, a particular transformation, or other meaningful limitations. From this we conclude the claims are directed to the judicial exception of the abstract idea of certain methods of organizing human activity as exemplified by the commercial and legal interaction of managing commercial transactions by advising one to perform a commercial credit transaction with a credit account and imposing credit interest, without significantly more. APPELLANT’S ARGUMENTS As to Appellant’s Appeal Brief arguments, we adopt the Examiner’s determinations and analysis from Answer 3–22 and reach similar legal conclusions. There is no Reply Brief. We note in particular the following. We are not persuaded by Appellant's argument that “Appellant submits the claims do not contain any features related to the abstract idea.” Appeal 2020-003133 Application 10/822,999 16 Br. 14. As determined in the analysis above, the claims are directed to the judicial exception of the abstract idea of certain methods of organizing human activity as exemplified by the commercial and legal interaction of managing commercial transactions by advising one to perform a commercial credit transaction with a credit account and imposing credit interest, without significantly more. We are not persuaded by Appellant's argument that the claims recite “a series of steps and specific elements that lead to a useful result.” Br. 16. Reciting a series of steps only ensures a claim fits within the statutory category of a process. The elements are specific only in the sense they are specified using words. The steps are all generic receiving, analyzing, transmitting, and updating of data. The data labels cannot confer eligibility. As to leading to a useful result, that alone is insufficient. “That the automation can ‘result in life altering consequences,’ is laudable, but it does not render it any less abstract.” Univ. of Fla. Research Found., Inc. v. Gen. Elec. Co., 916 F.3d 1363, 1369 (Fed. Cir. 2019). We are not persuaded by Appellant’s argument that the claims would not preempt the idea. Br. 17. “Where a patent’s claims are deemed only to disclose patent ineligible subject matter under the Mayo [/Alice] framework, as they are in this case, preemption concerns are fully addressed and made moot.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015). We are not persuaded by Appellant’s argument that the claims contain an inventive concept that is also found in the specific ordered combination of the limitations, similar to the Federal Circuit’s findings in BASCOM (BASCOM Global Internet v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. Appeal 2020-003133 Application 10/822,999 17 2016)). Br. 17–18. Initially, we remind Appellant that BASCOM did not find claims eligible on the substance, but rather that the Appellees 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. The key fact in BASCOM was the presence of a structural change in “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. The instant claims have no analogous structural benefit. CONCLUSIONS OF LAW The rejection of claims 43–48 and 50–69 under 35 U.S.C. § 101 as directed to a judicial exception without significantly more is proper. CONCLUSION The rejection of claims 43–48 and 50–69 is affirmed. In summary: Claims Rejected 35 U.S.C. § Basis Affirmed Reversed 43–48, 50–69 101 Eligibility 43–48, 50–69 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. § 1.136(a)(1)(iv) (2011). Appeal 2020-003133 Application 10/822,999 18 AFFIRMED Copy with citationCopy as parenthetical citation