Smith, Janet et al.

Patent Trials and Appeals Board

Jul 17, 2020

13421976 - (D) (P.T.A.B. Jul. 17, 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.
13/421,976 03/16/2012 Janet Smith 21652-00206 3807
75564 7590 07/17/2020
DANIEL M. FITZGERALD (21652)
ARMSTRONG TEASDALE LLP
7700 Forsyth Boulevard
Suite 1800
St. Louis, MO 63105
EXAMINER
IMMANUEL, ISIDORA I
ART UNIT PAPER NUMBER
3685
NOTIFICATION DATE DELIVERY MODE
07/17/2020 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):
USpatents@armstrongteasdale.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte JANET SMITH, JOHAN GERBER, and CLARA SALAZAR
___________

Appeal 2019-005536
Application 13/421,976
Technology Center 3600
_________________

Before DEBRA K. STEPHENS, JAMES B. ARPIN, and
MICHAEL J. ENGLE, Administrative Patent Judges.

ARPIN, Administrative Patent Judge.
DECISION ON APPEAL
Appellant1 appeals under 35 U.S.C. § 134(a) from the final rejection
of claims 1, 2, 4–12, and 14–26, all of the pending claims. Final Act. 2.2
Claims 3 and 13 are cancelled. Id. We have jurisdiction under 35 U.S.C.
§ 6(b).
We affirm.

1 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 Mastercard
International Incorporated. Appeal Br. 1.
2 In this Decision, we refer to Appellant’s Appeal Brief (“Appeal Br.,” filed
February 7, 2019) and Reply Brief (“Reply Br.,” filed July 9, 2019); the
Final Office Action (“Final Act.,” mailed June 18, 2018) and the Examiner’s
Answer (“Ans.,” mailed May 9, 2019); and the Specification (“Spec.,” filed
March 16, 2012). Rather than repeat the Examiner’s findings and
determinations and Appellant’s contentions in their entirety, we refer to
these documents.
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STATEMENT OF THE CASE
Appellant’s claimed systems, methods, and computer-readable storage
media “relate[] generally to payment card networks and, more particularly,
to network-based methods and systems for providing verification of
cardholder information submitted as part of payment card transactions
including card-not-present (CNP) transactions.” Spec. ¶ 2.
As noted above, claims 1, 2, 4–12, and 14–26 are pending. Claims 1,
11, and 21 are independent. Appeal Br. 21–22 (claim 1), 23–24 (claim 11),
26–27 (claim 21) (Claims App.). Claim 11 recites, “[a] method of detecting
fraud in a payment card transaction using a fraud detection computing
device and an enhanced verification service, the fraud detection computing
device being in communication with a memory device.” Id. at 23. Claim 1
recites,
[a] computer system for detecting fraud in a payment card
transaction using an enhanced verification service, the computer
system comprising: a memory device for storing data, wherein
machine-executable instructions are stored in the memory
device; and a processor in communication with the memory
device, the processor programmed to execute the machine-
executable instructions, wherein the machine-executable
instructions cause the processor to
perform functions substantially as recited in claim 11. Id. at 21. Claim 21
recites, “[a]t least one non-transitory computer-readable storage media
having computer-executable instructions embodied thereon, wherein when
executed by at least one processor, the computer-executable instructions
cause the processor to” perform functions substantially as recited in
claim 11. Id. at 26. Claims 2, 4–10, and 25 depend directly from claim 1;
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claims 12, 14–20, and 26 depend directly from claim 11; and claims 22–24
depend directly from claim 21. Id. at 21–28.
Claim 1, reproduced below with certain disputed limitations
emphasized, is representative. Therefore, we focus our analysis on
independent claim 1.
1. A computer system for detecting fraud in a payment card
transaction using an enhanced verification service, the
computer system comprising:

a memory device for storing data, wherein machine-
executable instructions are stored in the memory device;
and

a processor in communication with the memory device,
the processor programmed to execute the machine-
executable instructions, wherein the machine-executable
instructions cause the processor to:

receive an electronic authorization request message for a
payment card transaction between a consumer and a
merchant, wherein the transaction is one of a card-present
transaction and a card-not-present transaction, and
wherein the electronic authorization request message
includes (i) payment card account information used in the
transaction, (ii) a plurality of additional data elements
associated with the consumer, (iii) a verification service
request indicator, and (iv) an amount of the transaction;

process the authorization request message including
detecting the presence of the verification service request
indicator and, in response to the detected presence of the
verification service request indicator, validating that an
issuer of the payment card used in the transaction supports
the enhanced verification service;

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upon validating that the issuer supports the enhanced
verification service, transmit, via a payment card
processing network, the authorization request message to
the issuer;

receive, via the payment card processing network, an
electronic authorization response message from the issuer,
the electronic authorization response message including
(i) an issuer authorization decision based on available
funds associated with the payment card account as
compared to the amount of the transaction, and (ii) a
respective verification indicator corresponding to each
data element of the plurality of additional data elements,
wherein each verification indicator indicates a
verification status of the corresponding data element as
compared to profile data of a cardholder of the payment
card account stored in one or more databases of the
issuer; and

transmit, via the payment card processing network, the
authorization response message, including the
authorization decision and the respective verification
indicators provided by the issuer, such that the verification
indicators corresponding to each of the plurality of
additional data elements are available to the merchant.
Id. at 21–22 (emphases added).
REFERENCES AND REJECTIONS
The Examiner relies upon the following references:
Name3 Reference Publ’d Filed
Patterson US 2007/0100691 A1 May 3, 2007 Nov. 2, 2005
Biffle US 2007/0174164 A1 July 26, 2007 Dec. 21, 2006
Zhang US 2009/0019462 A1 Jan. 15, 2009 Sept. 25, 2008

3 All reference citations are to the first named inventor only.
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The Examiner rejects claims 1, 2, 4–12, and 14–26 under 35 U.S.C.
§ 101, as directed to patent ineligible subject matter without significantly
more. Final Act. 6–8. The Examiner further rejects claims 25 and 26 under
35 U.S.C. § 112, ¶ 2, as indefinite.4 Id. at 12. The Examiner additionally
rejects claims 1, 2, 4–8, 10–12, 14–18, and 20–26 as unpatentable under 35
U.S.C. § 103 over the combined teachings of Biffle and Patterson (id. at 13–
16); and claims 9 and 19 as unpatentable under 35 U.S.C. § 103 over the
combined teachings of Biffle, Patterson, and Zhang (id. at 16–17).
Appellant contests separately (1) the patent eligibility rejection of
independent claim 1 (Appeal Br. 6–11; Reply Br. 2–7); (2) the indefiniteness
rejection of claims 25 and 26 (Appeal Br. 14); and (3) the obviousness
rejection of independent claim 1 (Appeal Br. 14–18; Reply Br. 7–10). For
the patent eligibility and obviousness rejections, Appellant relies on the
alleged deficiencies in those rejections of claim 1 to overcome the rejections
of the independent claims 11 and 21 and of the dependent claims. Appeal
Br. 11, 18–19; Reply Br. 7, 10–11. Because we determine that affirmance of
the patent eligibility and obviousness rejections of independent claim 1 is
dispositive, except for our ultimate decision, we do not discuss the merits of
the patent eligibility and obviousness rejections of claims 2, 4–12, and 14–
26 further herein.
We review the appealed rejections for error based on the issues
identified by Appellant, and in light of the arguments and evidence produced

4 The Examiner also rejected (1) claims 1, 2, 4–12, and 14–26 under 35
U.S.C. § 112, ¶ 1, as lacking adequate written description and (2) claims 1,
2, 4–12, and 14–24 under 35 U.S.C. § 112, ¶ 2, as indefinite. Final Act. 9–
12. The Examiner has withdrawn those rejections. Ans. 3.
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thereon. Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010) (precedential).
Arguments not made are waived. See 37 C.F.R. § 41.37(c)(1)(iv). For the
reasons given below, we affirm.
ANALYSIS
Patent Ineligible Claims
A. Section 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.
However, the U.S. Supreme Court has long interpreted 35 U.S.C. § 101 to
include implicit exceptions: “[l]aws of nature, natural phenomena, and
abstract ideas” are not patentable. Alice Corp. v. CLS Bank Int’l, 573 U.S.
208, 216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Court’s two-part 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.”). According to the Court, 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,
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437 U.S. 584, 594–95 (1978)); and mental processes (Gottschalk v. Benson,
409 U.S. 63, 67 (1972)).
In Diamond v. Diehr, the claim at issue recited a mathematical
formula, but the Court held that “a claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula.” Diamond v. Diehr, 450 U.S. 175, 187 (1981).
Having said that, the 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. at 191 (citing Benson and Flook). Nevertheless, the
Court noted that “[i]t 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.” Id. at 187; see also BASCOM Glob. Internet
Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1352 (Fed. Cir. 2016)
(Even if the individual components were known, “an inventive concept can
be found in the ordered combination of claim limitations that transform the
abstract idea of filtering content into a particular, practical application of
that abstract idea” (emphasis added).).
If the claim is “directed to” an abstract idea, we next “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 (some quotation marks
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,
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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.
B. Office Patent Eligibility Guidance
In an effort to achieve clarity and consistency in how the Office
applies the Court’s two-part framework, the Office published revised
guidance on the application of § 101. 2019 Revised Patent Subject Matter
Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019).5 In Step One of our
analysis, we look to see whether the claims fall within one of the four
statutory categories identified in § 101. Id. at 53 (“Examiners should
determine whether a claim satisfies the criteria for subject matter eligibility
by evaluating the claim in accordance with the criteria discussed in MPEP
2106, i.e., whether the claim is to a statutory category (Step 1) and the
Alice/Mayo test for judicial exceptions (Steps 2A and 2B).”).
Under the guidance, we then look to whether the claim recites:
(1) Step 2A – Prong One: 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) Step 2A – Prong Two: additional elements that integrate the
judicial exception into a practical application (see MPEP6

5 “All USPTO personnel are, as a matter of internal agency management,
expected to follow the guidance.” 2019 Revised Patent Subject Matter
Eligibility Guidance, 84 Fed. Reg. at 51; see also October 2019 Update:
Subject Matter Eligibility, 2 (October 17, 2019) (“Note, the feedback
received was primarily directed to examination procedures and, accordingly,
this update focuses on clarifying practice for patent examiners. However, all
USPTO personnel are expected to follow the guidance.”).
6 All Manual of Patent Examining Procedure (“MPEP”) citations herein are
to MPEP 9th Ed., Rev. 10.2019, June 2020.
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§ 2106.05(a)–(c), (e)–(h)).
See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg.
at 54–55 (“Revised Step 2A”).
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then look to
whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is not “well-understood, routine, conventional” in the field (see
MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
See id. at 56 (“Step 2B: If the Claim Is Directed to a Judicial Exception,
Evaluate Whether the Claim Provides an Inventive Concept.”).
C. Step One – Claims Directed to Statutory Categories
Independent claim 1 and its associated dependent claims are directed
to systems, i.e., machines; independent claim 11 and its associated
dependent claims are directed to methods, i.e., processes; and independent
claim 21 and its associated dependent claims are directed to a non-transitory,
computer-readable storage media, i.e., manufactures. Appeal Br. 21–28
(Claims App.); see In re Nuijten, 500 F.3d 1346, 1356–57 (Fed. Cir. 2007).
Thus, the pending claims are directed to recognized statutory categories.
D. Two-Part Alice/Mayo Framework
1. Step 2A, Prong One – Claim 1 Recites an Abstract Idea
Applying the first part of the Alice/Mayo framework (Step 2A), with
respect to claim 1, the Examiner considers the recited limitations and
concludes “[t]he claims recite a certain method of organizing human activity
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in a fundamental economic practice and thus the claims recite an abstract
idea.” Ans. 5–6; see Final Act. 2–3, 7.
Claim 1 broadly recites instructions to:
(1) receive a transaction authorization request message, the request
including payment card account information, additional consumer data
elements, a verification service request indicator, and a transaction amount
(“receive an . . . authorization request message for a payment card
transaction between a consumer and a merchant, wherein the transaction is
one of a card-present transaction and a card-not-present transaction, and
wherein the . . . authorization request message includes (i) payment card
account information used in the transaction, (ii) a plurality of additional data
elements associated with the consumer, (iii) a verification service request
indicator, and (iv) an amount of the transaction;”);
(2) process the request message, including detecting the verification
service request indicator and validating the payment card issuer supports the
enhanced verification service (“process the authorization request message
including detecting the presence of the verification service request indicator
and, in response to the detected presence of the verification service request
indicator, validating that an issuer of the payment card used in the
transaction supports the enhanced verification service”);
(3) transmit the authorization request message to the issuer (“upon
validating that the issuer supports the enhanced verification service, transmit
. . . the authorization request message to the issuer”);
(4) receive an authorization response message from the issuer,
including an issuer authorization decision based on available funds
associated with the payment card account as compared to the transaction
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amount and a verification indicator for each of additional data elements,
wherein each verification indicator indicates a verification status of the
corresponding data element as compared to cardholder profile data stored in
one or more issuer databases (“receive . . . an . . . authorization response
message from the issuer, the . . . authorization response message including
(i) an issuer authorization decision based on available funds associated with
the payment card account as compared to the amount of the transaction, and
(ii) a respective verification indicator corresponding to each data element of
the plurality of additional data elements, wherein each verification indicator
indicates a verification status of the corresponding data element as compared
to profile data of a cardholder of the payment card account stored in one or
more databases of the issuer”); and
(5) transmit the response message, including the authorization
decision and the respective verification indicators, such that the verification
indicators corresponding to each of the plurality of additional data elements
are available to the merchant (“transmit . . . the authorization response
message, including the authorization decision and the respective verification
indicators provided by the issuer, such that the verification indicators
corresponding to each of the plurality of additional data elements are
available to the merchant”). Appeal Br. 21–22. Thus, considered as a
whole, claim 1 broadly recites receiving a transaction authorization request
including information about the transaction, the issuer, and the cardholder;
determining whether the issuer participates in enhanced verification and, if
so, transmitting the request to the issuer, such that the issuer can verify the
received information; receiving a response including an authorization and
verifications for the information; and transmitting the response, such that the
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merchant has access to the verifications. Final Act. 3, 7; Ans. 6; see Spec.
¶¶ 2, 6; Fig. 1.
Appellant contends:
While Claims 1, 11, and 21 relate to the solution of a
problem in detecting fraud in a payment transaction, see
Applicant’s disclosure at paragraph [0005], the claim limitations
themselves are narrowly focused on a particular sequence of
manipulating data elements of electronic messages by a
computer device. In particular, the electronic messages are
manipulated to include additional elements in the standard
proprietary communications protocols used by payment card
processing networks to authorize payment card transactions. See
paragraphs [0034]-[0038] of Applicant’s disclosure for
background on the protocols. The additional elements are a set
of verification elements (identified as verification elements 603
in the example embodiment in the specification) provided by a
consumer to a merchant at the time of the payment transaction.
. . . Manipulating data elements of electronic messages at this
level of specificity is not a “fundamental economic practice” as
alleged at page 3 of the Final Office Action, nor can it be
reasonably construed as any other method of organizing human
activity.
Appeal Br. 7–8; see Reply Br. 2–3. Thus, Appellant contends that
manipulating data “into the otherwise standard authorization request
message” and transmitting such messages “in the standard proprietary
communications protocols used by payment card processing networks to
authorize payment card transactions” renders claim 1 not abstract. Appeal
Br. 7–8; see Reply Br. 2–3.7

7 Appellant also contends that pending claim 1 does not recite an abstract
idea for the reasons discussed with respect to claim 2 of Example 37. Reply
Br. 2; see Subject Matter Eligibility Examples: Abstract Ideas, 3–4 (Jan.7,
2019). We find Appellant’s contention conclusory, and Appellant does not
persuade us that claim 2 of Example 37 is analogous to pending claim 1.
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Nevertheless, the Examiner finds:
Appellant has described the validation process an issuer uses in
a commercial interaction for validating a payment request.
Appellant further explains “these individual verifications for
each element are routed back to the merchant . . . enabling the
merchant to see whether each of the set of identity verification
elements provided by the consumer is a match”. Appellant has
described the validation process of a merchant in a commercial
interaction for the receipt of whether the consumer is approved
by the issuer or not.
Ans. 6. We are persuaded the authorization of a consumer’s credit purchase
from a merchant based on the verification of consumer and transaction
information is a “fundamental economic practice,” which is included in the
abstract idea grouping: “[c]ertain methods of organizing human activity.”
Id. Moreover, the authorization of credit purchases between consumers and
merchants are “commercial or legal interactions (including agreements in the
form of contracts; legal obligations; advertising, marketing or sales activities
or behaviors; business relations),” which also are included in the abstract
idea grouping: “[c]ertain methods of organizing human activity.” 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. at 52.
Thus, we are not persuaded that the Examiner errs in finding claim 1, as well
as the other pending claims, recites an abstract idea, namely, “certain
methods of organizing human activity.”
2. Step 2A, Prong Two – Abstract Idea Not Integrated Into Practical
Application
Because we are persuaded claim 1 recites an abstract idea, we identify
whether there are any additional elements recited in the claim and evaluate
those additional elements individually and in combination to determine
whether they integrate the abstract ideas into a practical application. As
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noted above, claim 1 expressly recites a computer system comprising
additional elements including a memory device storing machine-executable
instructions and a processor in communication with the memory device
executing those instructions. Appeal Br. 21 (Claims App.). Those
instructions cause authorization request and response messages to be
exchanged “via the payment card processing network.” Id.; see id. at 8
(describing “standard” message routing procedures). Information provided
in the authorization request message is verified by comparing the
information received to information stored “in one or more databases of the
issuer.” Id. at 22. Claims 11 and 21 recite substantially similar additional
elements. Id. at 23–24, 26–27.
The Specification discloses that various computer, network, and
software components in Appellant’s claimed media and systems are generic
computer components performing generic computer functions. Spec. ¶¶ 49,
50, 54–57, 63, 64, 81, 82; see id. ¶ 34 (“FIG. 1 is a schematic diagram 20
illustrating an exemplary multi-party payment card industry system for
enabling ordinary payment-by-card transactions in which merchants and
card issuers do not necessarily have a one-to-one relationship. The present
invention relates to a payment card system, such as a credit card payment
system using the MasterCard® payment system.”). Considered individually
or as an ordered combination, we are not persuaded that these components
recite a particular machine.8 Final Act. 23; see MPEP § 2106.05(b); 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. at 55 n.27.

8 We acknowledge that some of the considerations at Step 2A, Prong Two,
properly may be evaluated under the second part of the Alice/Mayo
framework (Step 2B of the Office guidance). See Ans. 10–11. For purposes
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Appellant contends:
As explained in detail above, the detailed manipulation of data
elements in the otherwise standard authorization request message
and authorization response message routed between the
merchant and the issuing bank over the payment card processing
network represent an exceedingly practical application of the
alleged abstract idea. In particular, the recitations solve an
identified problem in the pre-existing technology for the
payment card interchange network: an inability of the merchant
to directly confirm individual elements of ID information
submitted by a consumer against the information on file at the
issuer of the payment card being used. Moreover, the recitations
solve the problem by “piggybacking” on the existing
authorization request and response protocols for transactions
over the payment card processing network, thereby eliminating
the need for a set of extraneous messages to be routed over the
network, which improves fraud detection while avoiding a
negative impact on network bandwidth.
Appeal Br. 9; see Reply Br. 4–5. These contentions are not persuasive.
Initially, we are not persuaded that the manipulation of data as recited
in the claims integrates the abstract idea into a practical application. The
claims recite adding information to a standard authorization request
message. Appeal Br. 8 (“These additional elements are inserted into the
otherwise standard authorization request message that is routed through the
payment card processing network to the issuing bank.” (emphasis added));
see Reply Br. 3 (emphasis added). The “additional elements” are a plurality
of additional data elements associated with the consumer and a verification

of maintaining consistent treatment within the Office, we evaluate those
considerations under the first part of the Alice/Mayo framework (Step 2A of
the Office guidance). See 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. at 55 nn.25, 27–32.
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service request indicator. Appeal Br. 21 (Claims App.). Thus, these
“additional elements” are part of the abstract idea, as discussed above.
Nevertheless, as the Office explains,
the Prong Two analysis considers the claim as a whole. That is,
the limitations containing the judicial exception as well as the
additional elements in the claim besides the judicial exception
need to be evaluated together to determine whether the claim
integrates the judicial exception into a practical application. The
additional limitations should not be evaluated in a vacuum,
completely separate from the recited judicial exception. Instead,
the analysis should take into consideration all the claim
limitations and how those limitations interact and impact each
other when evaluating whether the exception is integrated into a
practical application.
October 2019 Update: Subject Matter Eligibility at 12. In claim 1,
additional data elements associated with the consumer are compared with
corresponding consumer information in the issuer’s database and may be
assigned a verification indicator of “match,” “no match,” or “not available”
(see Spec. ¶¶ 28, 70); and the verification service request indicator simply
signals that the issuer supports the verification service (see id. ¶ 69). The
response message then contains the authorization decision, e.g., whether the
transaction is approved, and the verification indicator for each additional
consumer data element. See Appeal Br. 21–22 (Claims App.). Put simply,
data elements are transmitted with the authorization request, those data
elements are compared to information stored in a data base, and the results
of the comparison are returned with the authorization response. Although
the merchant may use the comparison results “to directly confirm individual
elements of ID information submitted by a consumer” (id. at 9), this function
is not recited in claim 1.
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Claim 1 merely recites, “the verification indicators corresponding to
each of the plurality of additional data elements are available to the
merchant.” Id. at 22 (emphasis added). We are not persuaded that the
recited manipulation of data does significantly more than implement the
verification of consumer data using a computer system as a tool to perform
the identified abstract idea or generally to link the use of the abstract idea
exception to a particular technological environment. Final Act. 8; Ans. 7;
see MPEP § 2106(f), (h); 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. at 55.
Moreover, improving fraud detection is not a problem in computer
technology, but, instead, a business problem. Appeal Br. 9. This problem
also is not addressed by the additional elements of claim 1. See Ans. 7.
Therefore, we are not persuaded the additional recited elements “reflect[] an
improvement in the functioning of a computer, or an improvement to other
technology or technical field.” Final Act. 8; see MPEP § 2106(a); 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. at 55.
In view of Appellant’s claim recitations and the Specification’s
disclosure, and consistent with the Examiner’s findings, we are persuaded
the rejected claims do not recite:
(i) an improvement to the functioning of a computer;
(ii) an improvement to another technology or technical field;
(iii) an application of the abstract idea with, or by use of, a
particular machine;
(iv) a transformation or reduction of a particular article to a
different state or thing; or
(v) other meaningful limitations beyond generally linking the
use of the abstract idea to a particular technological
environment.
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See MPEP § 2106.05(a)–(c), (e)–(h). Thus, we conclude that the rejected
claims do not integrate the identified abstract idea into a practical application
and that the claims are directed to an abstract idea.
3. Step 2B – Not Significantly More Than the Abstract Idea
Because we determine that the claims recite an abstract idea and do
not integrate those abstract ideas into a practical application, we now
consider whether the claims include additional limitations such that the
claims amount to significantly more than the abstract idea. As noted above,
applying the second part of the Alice/Mayo framework, the Examiner finds,
Taking the claim elements separately, the functions
performed by the machine at each step of the process are purely
conventional. Using a processor, receiving and sending data,
comparing the data to perform transactions is a fundamental
economic practice. All of these functions are well-understood,
routine, conventional activities previously known to the industry.
In short, each step does no more than require a generic computer
to perform generic computer functions.
Viewed as a whole, instructions/method claims simply
recite the concept of receiving transaction information and
verifying a transaction as performed by a generic computer.
Final Act. 7–8. We agree.
Appellant contends the Examiner fails to demonstrate adequately that
the additional elements were well-understood, routine, and conventional.
Appeal Br. 22–26 (citing Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir.
2018)). Pursuant to the Office’s guidance, the requirements of Berkheimer
are satisfied by:
A citation to an express statement in the specification or to a
statement made by an applicant during prosecution that
demonstrates the well-understood, routine, conventional nature
of the additional element(s). A specification demonstrates the
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well-understood, routine, conventional nature of additional
elements when it describes the additional elements as well-
understood or routine or conventional (or an equivalent term),
as a commercially available product, or in a manner that
indicates that the additional elements are sufficiently well-known
that the specification does not need to describe the particulars of
such additional elements to satisfy 35 U.S.C. § 112(a).
Robert W. Bahr, Changes in Examination Procedure Pertaining to Subject
Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v.
HP, Inc.) (Apr. 19, 2018) (emphasis added; available at:
https://www.uspto.gov/sites/default/files/documents/memo-berkheimer-
20180419.PDF); see Appeal Br. 23. As noted above, the Specification
makes clear that these additional elements and their functions, considered
individually or as an ordered combination, were well-understood, routine,
and conventional. See Spec. ¶¶ 34, 49, 50, 54–57, 63, 64, 81, 82.
In addition, Appellant contends that the data manipulations recited in
claim 1 are unconventional and that the Examiner fails to demonstrate
otherwise as required by Berkheimer. Appellant further contends, “[a]s is
evident from the traversal of the Section 103 rejections below, the specific
recited manipulations of the authorization request and response messages
used by the payment card processing network are genuinely
unconventional.” Appeal Br. 10. Moreover, Appellant contends, “[j]ust as
in BASCOM, Appellant’s independent claims solve the problems of prior art
systems by facilitating the detection of fraud at a new location in the
network, i.e., at the merchant, rather than at the issuer or on the payment
network server.” Appeal Br. 11. We disagree.
As the Examiner finds:
In discussing Berkheimer, and whether the claims present
unconventional activities, from Appellant’s disclosure as
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previously discussed, the computing device claims generic
functions of a computer, in this case Appellant has claimed
validating transaction information, by comparing information to
see whether there is a match. Appellant does not provide a
factual determination of why or how providing validation results
of data elements within a payment request response is
“unconventional”. Payment requests receive validation
responses to determine whether the transaction is to be carried
out.
Ans. 8. Appellant does not contend that the verifications: “match,” “no-
match,” and “not available,” were unconventional (see Spec. ¶¶ 28, 70) or
that verifications of consumer data were not well-known, routine, and
conventional elements of a transaction authentication (see id. ¶ 4 (“To detect
fraud, a variety of data points from the transaction and the ordering device
itself are reviewed for anomalies or inconsistencies.”)). Thus, we are not
persuaded Examiner errs in finding the additional elements of claim 1 were
well-understood, routine, and conventional. See, e.g., Biffle ¶¶ 37, 53, 56,
Fig. 4 (items 404 and 411).
With respect to BASCOM, Appellant argues that the fraud detection
occurs at a new location, i.e., at the merchant. Appeal Br. 11. Nevertheless,
as noted above, claim 1 does not recite fraud detection by the merchant. The
claim only recites, “the verification indicators corresponding to each of the
plurality of additional data elements are available to the merchant.” Id. at
22 (emphasis added). Claim 1 does not recite that the merchant uses the
verification indicators for fraud detection. Thus, we are not persuaded that
claim 1 recites fraud detection at a different location than was well-
understood, routine, and conventional. Ans. 8–9.
On this record, we agree with the Examiner that independent claim 1,
as well as independent claims 11 and 21 that are not argued separately, is
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directed to an abstract idea and fails to recite “significantly more” than the
identified abstract idea. Thus, we are not persuaded that the Examiner errs
in determining that the independent claims are patent-ineligible, and we
sustain the § 101 rejection of those claims, as well as the rejection of the
dependent claims that are not argued separately.
Definiteness
As noted above, the Examiner rejects claims 25 and 26 under 35
U.S.C. § 112, ¶ 2, as indefinite. Final Act. 12; Ans. 3–4. Claim 25 depends
directly from claim 1 and recites that instructions cause the processor to
“receive the plurality of additional data elements arranged serially within
the authorization request message.” Appeal Br. 27 (Claims App.) (emphasis
added). Claim 26 depends from independent claim 11 and recites a
corresponding limitation. Id. at 28. The Examiner finds
There is a lack of antecedent basis, as the independent claim 1
makes no reference to data elements that . . . have been arranged
serially. The previously mentioned ‘plurality of additional data
elements’ included in an authorization request message were not
claimed to be arranged much less ‘arranged serially’. Therefore,
‘the plurality of additional data elements’ that Appellant claims
to be arranged serially within a message in claims 25 and 26, do
not refer to the same plurality of additional data elements that
were just included in the authorization request message.
Ans. 3–4. We disagree.
As Appellant notes, claim 1 recites “the electronic authorization
request message includes . . . a plurality of additional data elements
associated with the consumer.” Appeal Br. 21 (Claims App.). Claim 11
recites a corresponding limitation. Id. at 23. However, neither claim recites
how the additional data elements are arranged within the authorization
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request message. Appellant contends that the phrase: “arranged serially,”
adds a limitation to the recitation of claims 1 and 11; that is, it describes how
the additional data elements recited in claims 1 and 11 are arranged.9 Reply
Br. 1–2. We agree.
We do not sustain the indefiniteness rejection of claims 25 and 26,
and we reverse the Examiner’s indefiniteness rejection of these claims.
Obviousness
1. Obviousness of Claim 1 over Biffle and Patterson
As noted above, the Examiner rejects independent claim 1 as obvious
over the combined teachings of Biffle and Patterson. Final Act. 13–14. In
particular, the Examiner finds Biffle teaches or suggests all of the limitations
of claim 1, except
Biffle does not teach processing the authorization request
message including detecting a presence of the verification
service request indicator and, in response to the detected
presence of the verification service request indicator, validating
that an issuer of the payment card used in the transaction supports
the enhanced verification service; upon validating that the issuer
supports the enhanced verification service (i) an issuer
authorization decision based on available funds associated with
the payment card account as compared to the amount of the
transaction.
Id. at 14. Nevertheless, the Examiner finds Patterson teaches or suggests
these limitations (id. (citing Patterson ¶¶ 20, 33, 45, 46, 53)), and a person of
ordinary skill in the art would have had reason to combine the teachings of

9 We do not find a description of the arrangement of additional data
elements, serially or otherwise, in the Specification.
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Biffle and Patterson to achieve the systems as recited in claim 1 (id. (citing
Patterson ¶ 5)).
Appellant challenges the Examiner’s obviousness rejection of claim 1
for at least four reasons. Reply Br. 7–10; see Appeal Br. 14–18. For the
reasons given below, we sustain the Examiner’s rejection of claim 1.
First, Appellant contends,
the Examiner’s Answer implies that the codes transmitted to host
authorization system 104 of Biffle, after each item of consumer-
provided information is compared to one or more databases, are
equivalent to the recited verification indicators. This is plainly
incorrect, as the codes of Biffle are not received from an issuer,
and are never transmitted from host authorization system 104 to
the merchant. Instead, host authorization system 104 uses any
or all codes to decide whether to authorize or deny a payment
guarantee. In contrast, Claim 1 recites that the plurality of
verification indicators are included in the authorization response
message received from the issuer and transmitted to the
merchant.
Reply Br. 7 (italics added). We disagree.
Initially, we find Biffle discloses, “[a] ‘transaction card issuer,’
‘transaction account issuer,’ ‘card issuer,’ or ‘host’ may be used
interchangeably to represent any transaction account-issuing institution, such
as, but not limited to, a credit card company, a card sponsoring company, or
a third party who is under contract with a financial institution.” Biffle ¶ 28
(emphases added); see Final Act. 13–14 (citing Biffle ¶¶ 42, 57, 58, 65
(teaching the “verification indicators”)). Thus, Appellant’s contention that
Biffle’s codes are received from a “host,” rather than an “issuer,” is not
persuasive.
Moreover, as noted above, although claim 1 does not recite expressly
that the authorization response message is transmitted to the merchant, even
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if such a requirement were implicit in the claims, Biffle teaches sending such
authorization, including the verification indicators, to the merchant. Appeal
Br. 22 (Claims App.). The claims merely recite “the verification indicators
. . . are available to the merchant.” Id. (emphasis added); but see Biffle
¶¶ 34 (“The fraud score need not only convey the estimated risk of fraud but
may also convey the basis for the fraud score.” (emphasis added)), 53
(“Various fields of information optionally include ‘a’ for card-holder name
and billing address match, ‘k’ for no match of information, ‘1’ billing
address match only, ‘p’ payment guarantee, ‘x’ system not responding, and
the like.” (emphases added)), 57 (“Host authorization system 104 may
inform the merchant system 102 of whether a payment guarantee will be
granted. The merchant may authorize or deny a purchase transaction based
upon whether the payment guarantee is granted. Information related to
authorized or denied transactions may optionally be stored in transaction
history database 116.” (emphasis added)), 65 (“The address verification
message may be based on an address verification result. In step 506, the
message including the fraud score is transmitted to merchant 302.”
(emphasis added)). Thus, Appellant’s contention that Biffle does not teach
or suggest that the verification indicators are “available” or transmitted to
the merchant is not persuasive. Therefore, we do not find this first reason
persuasive of error.
Second, Appellant contends,
the Examiner’s Answer implies that the address verification
message of Biffle is somehow equivalent to the recited plurality
of verification indicators. This too is plainly incorrect, as the
address verification message is clearly separate from the
authorization message from the issuer (see Biffle at paragraph
[0065]) and, in any event, includes only a single address
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verification and a composite fraud score, rather than a plurality
of verification indicators corresponding to individual data
elements.
Reply Br. 8. We disagree.
The Specification discloses a “verification indicator indicates a
status of verification of the data element with data stored in one or more
databases of the issuer.” Spec. ¶ 6. Biffle discloses:
When verification system 114 receives a verification
request, it converts the verification information into a code which
may include unique tags (i.e., identifiers) that can be stored and
searched. Each component of the verification information may
be converted into its own unique tag. One unique tag, referred
to as an “index”, may identify the alternate address, name, or
other information associated with a recipient, user, or consumer.
When recipient names, addresses, or the like are described herein
as being stored or searched, unique tags may be used to associate
the various aspects of the verification information stored or
searched.
Biffle ¶ 50; see id. ¶ 49 (“The subset of information transmitted to
verification system 114 may include, for example, card number, recipient’s
name, recipient’s address, recipient’s phone number, and the service
establishment number.”). Referring to Figure 5, Biffle also discloses, “[t]he
message may be an authorization message that is received from an issuer
306 by network/processor 304. The authorization message may be based on
an authorization decision. The message may be an address verification
message. The address verification message may be based on an address
verification result.” Id. ¶ 65 (emphasis added); see id. ¶¶ 56–57 (describing
the verification of cardholder information). Moreover, Biffle’s verification
system may search databases to verify numerous pieces of information. Id.
¶ 54. Thus, although in paragraph 65, Biffle may appear to give a more
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limited example of the content of the authorization response, we do not read
Biffle’s teachings so narrowly. Further,as noted above, Biffle discloses
“[t]he fraud score need not only convey the estimated risk of fraud but may
also convey the basis for the fraud score.” Id. ¶ 34 (emphasis added); see id.
¶ 58. Therefore, we are persuaded Biffle teaches or suggests providing a
one or more verification indicators with the authorization response message,
and we do not find this second reason persuasive of error.
Third, Appellant contends,
the Examiner’s Answer attempts to circumvent the recited
presence of the plurality of verification indicators in the
authorization response message transmitted to the merchant by
noting that the codes of Biffle may be stored in a transaction
database (see Biffle at paragraph [0056]) and that the merchant
may have access to the database (see Biffle at paragraph [0044]).
Appeal Br. 8 (emphasis added). As discussed above, Biffle’s teachings are
broad enough to encompass providing a plurality of verification indicators
with an authorization response message. See, e.g., Biffle ¶¶ 34, 49, 50, 56–
58, 65. Therefore, we do not find this third reason persuasive of error.
Fourth, Appellant contends,
the Examiner’s Answer argues that the fraud information is
“available to the merchant” because the merchant can still make
a risk determination based on the composite fraud score of Biffle.
Again, the single derived fraud score of Biffle is no substitute for
the plurality of verification indicators corresponding to each of
the data elements, which provides the merchant with a richer,
more detailed picture of the risk of fraud at the time of
authorization.
Appeal Br. 8. As discussed above, however, the Biffle’s teachings are not
limited to the embodiment disclosed in paragraph 65. See Ans. 10–12.
Biffle’s fraud score may be based on a plurality of inputs, and “[t]he fraud
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score need not only convey the estimated risk of fraud but may also convey
the basis for the fraud score.” Biffle ¶ 34 (emphasis added); see id. ¶¶ 35–
38. Thus, the fraud score itself may provide the indicators, upon which it is
based, or may be accompanied by a plurality of verification results. See id.
¶¶ 3, 34, 57–58, 65. Therefore, we do not find this fourth reason persuasive
of error.
For the reasons given above, we are not persuaded the Examiner errs
in rejecting claim 1 as obvious over the combined teachings of Biffle and
Patterson. Consequently, we sustain the obviousness rejection of claim 1.
2. The Remaining Claims
As noted above, Appellant challenges the obviousness rejection of
independent claims 11 and 21 for substantially the same reasons as claim 1.
Appeal Br. 18; see Final Act. 13. For the reasons given above with respect
to claim 1, we also sustain the obviousness rejection of claims 11 and 21.
Appellant does not challenge the rejections of the dependent claims
separately from their base claims. Appeal Br. 19–20; Reply Br. 10–11.
Because we sustain the obviousness rejection of the base claims, we also
sustain the obviousness rejections of the claims dependent therefrom.
DECISION
1. The Examiner does not err in rejecting:
a. claims 1, 2, 4–12, and 14–26 under 35 U.S.C. § 101, as directed
to patent ineligible subject matter without significantly more;
b. claims 1, 2, 4–8, 10–12, 14–18, and 20–26 as unpatentable
under 35 U.S.C. § 103 over the combined teachings of Biffle
and Patterson; and
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c. claims 9 and 19 as unpatentable under 35 U.S.C. § 103 over the
combined teachings of Biffle, Patterson, and Zhang.
2. The Examiner errs in rejecting claims 25 and 26 under 35 U.S.C.
§ 112, ¶ 2, as indefinite.
3. Thus, on this record, claims 1, 2, 4–12, and 14–26 are not patentable.
CONCLUSION
Because we sustain a rejection of each of the pending claims, we
affirm the Examiner’s rejection of claims 1, 2, 4–12, and 14–26.
In summary:
Claims
Rejected
35 U.S.C.
§
Basis/References Affirmed Reversed
1, 2, 4–12,
14–26
101 Eligibility 1, 2, 4–12,
14–26

25, 26 112, ¶ 2 Definiteness 25, 26
1, 2, 4–8,
10–12, 14–
18, 20–26
103 Biffle, Patterson 1, 2, 4–8,
10–12,
14–18,
20–26

9, 19 103 Biffle, Patterson,
Zhang
9, 19
Overall
Outcome
1, 2, 4–12,
14–26

No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv).

AFFIRMED