Visa International Service Association

Patent Trials and Appeals Board

Jul 1, 2020

14072583 - (D) (P.T.A.B. Jul. 1, 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.
14/072,583 11/05/2013 Nancy L. Kim 8223-1707001 (274US02) 1791
144885 7590 07/01/2020
The Webb Law Firm / Visa International
ONE GATEWAY CENTER
420 FT. DUQUESNE BLVD, SUITE 1200
PITTSBURGH, PA 15222
EXAMINER
REFAI, SAM M
ART UNIT PAPER NUMBER
3681
NOTIFICATION DATE DELIVERY MODE
07/01/2020 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):
patents@webblaw.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte NANCY L. KIM
____________

Appeal 2019-003132
Application 14/072,583
Technology Center 3600
____________

Before, ANTON W. FETTING, JOSEPH A. FISCHETTI, and
BIBHU R. MOHANTY, Administrative Patent Judges

MOHANTY, 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 1–20. We have jurisdiction under
35 U.S.C. § 6(b).

SUMMARY OF THE DECISION
We AFFIRM.

1 We use the word Appellant to refer to “applicant” as defined in 37 C.F.R.
§ 1.42(a). Appellant identifies the real party in interest as Visa International
Service Association. (Appeal Br. 3).
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CLAIMED SUBJECT MATTER
The Appellant’s claimed invention relates to the processing of
payment transactions and the redemption of benefits of offers (Spec., para.
3). Claim 1, reproduced below with the italics added, is representative of the
subject matter on appeal.

1. A computer-implemented method, comprising: providing a
computing apparatus comprising:
a transaction handler configured in an electronic payment
processing network that connects separate computers, including:
transaction terminals configured to initiate transactions of
payments in the electronic payment processing network using account
information that identify payment accounts;
first computers controlling the payment accounts from which
the payments are made in the electronic payment processing network;
second computers controlling merchant accounts in which the
payments are received in the electronic payment processing network;
and the transaction handler coupled between the first computers and
the second computers;
a data warehouse coupled with the transaction handler; and
a portal coupled with the data warehouse and configured to
communicate with users outside the electronic payment processing
network;
receiving, by the portal of the computing apparatus, a user
input from a user identifying:
a loyalty currency source of the user, and
a preference of the user in redeeming loyalty currency from the
loyalty currency source;
in response to the user input received by the portal via
communications outside the electronic payment processing network,
storing, in the data warehouse, data associating:
an account identifier of a consumer payment account of the
user;
a communication reference of a computing device of the user of
the consumer payment account;
the preference of the user; and the loyalty currency source;
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determining, by the transaction handler of the computing
apparatus based on an offer communication from a transaction
terminal of a merchant to the portal of the computing apparatus,
wherein the offer communication is associated with a first
transaction between the merchant and the user and involving the
consumer payment account, that the user is eligible for an offer that
satisfies the preference of the user in redeeming loyalty currency from
the loyalty currency source, wherein the offer includes:
a benefit applicable to a second transaction made in the
consumer payment account in the electronic payment processing
network and satisfying benefit redemption requirements, wherein the
benefit includes at least two reductions in a transaction amount of the
second transaction, the two reductions including:
a first reduction in a form of a discount sponsored by the
merchant when the second transaction is made with the merchant; and
a second reduction in a form of redemption of an amount of reduction
in a balance of the loyalty currency source;
transmitting, by the portal of the computing apparatus using the
communication reference of the computing device of the user
associated with the account identifier of the consumer payment
account in the data warehouse, a first message to the computing
device of the user identifying the offer, in response to determining that
the user is eligible for the offer;
configuring, by the portal of the computing apparatus, a trigger
record associated with the offer stored by the data warehouse,
wherein configuring the trigger record comprises:
generating, by the portal, a code based on the account identifier
of the consumer payment account of the user and an identifier of the
transaction terminal of the merchant, and embedding, by the portal,
the code in the trigger record;
providing the code to the transaction terminal of the merchant
based on configuring the trigger record associated with the offer;
processing, by the transaction handler, the second transaction
for authorization, wherein processing the second transaction for
authorization comprises:
receiving, by the transaction handler, an authorization request
associated with the second transaction from the transaction terminal
of the merchant, wherein the authorization request comprises the code
generated by the portal;
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identifying, by the transaction handler, the trigger record
associated with the offer based on the code included in the
authorization request associated with the second transaction, wherein
identifying the trigger record comprises:
matching the code embedded in the trigger record and the code
included in the authorization request associated with the second
transaction;
after the first message is transmitted to the user, determining,
by the transaction handler of the computing apparatus, that the second
transaction satisfies the benefit redemption requirements of the offer
based on the code included in the authorization request associated
with the second transaction from the transaction terminal of the
merchant;
in response to the second transaction being processed for
authorization by the transaction handler, providing, by the transaction
handler during authorization processing of the second transaction in
the electronic payment processing network, the benefit of the offer to
the consumer payment account in exchange for the amount of
reduction in a balance of the loyalty currency source, wherein
providing the benefit of the offer to the consumer payment account
comprises:
changing the transaction amount specified in the authorization
request received by the transaction handler for the second transaction
to a reduced transaction amount by applying the first reduction
sponsored by the merchant and the second reduction funded by the
redemption from the loyalty currency source; and
transmitting a second authorization request for the reduced
transaction amount in the consumer payment account from the
transaction handler to an issuer processor of the consumer payment
account;
transmitting, by the portal of the computing apparatus using the
communication reference of the computing device of the user
associated with the account identifier of the consumer payment
account in the data warehouse and during the authorization processing
of the second transaction in the electronic payment processing
network, a second message to the computing device of the user about
the reduction in the balance of the loyalty currency source in
exchange for the benefit of the offer applied to the second transaction
in the consumer payment account of the user; and
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removing, by the portal of the computing apparatus, the trigger
record associated with the offer stored by the data warehouse after a
predetermined period of time from authorization processing of the
second transaction in the electronic payment processing network.

THE REJECTION
The following rejection is before us for review:
Claims 1–20 are rejected under 35 U.S.C. § 101 as being directed to
non-statutory subject matter.

FINDINGS OF FACT
We have determined that the findings of fact in the Analysis section
below are supported at least by a preponderance of the evidence2.

ANALYSIS
Rejection under 35 U.S.C. § 101
The Appellant argues that the rejection of claim 1 is improper because
the claim is not directed to an abstract idea (Appeal Br. 17–20; Reply Br. 2–
7). The Appellant argues further that the claim is “significantly more” than
the alleged abstract idea (Appeal Br. 20–24; Reply Br. 7–10).
In contrast, the Examiner has determined that the rejection of record is
proper (Final Action 2–10; Ans. 3–14).
We agree with the Examiner. An invention is patent eligible if it
claims a “new and useful process, machine, manufacture, or composition of
matter.” 35 U.S.C. § 101. However, the Supreme Court has long interpreted

2 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
(explaining the general evidentiary standard for proceedings before the
Patent Office).
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35 U.S.C. § 101 to include implicit exceptions: “[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).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court’s two-step framework, described in Mayo
and Alice. Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework,
we first determine what concept the claim is “directed to.” See Alice,
573 U.S. at 219 (“On their face, the claims before us are drawn to the
concept of intermediated settlement, i.e., the use of a third party to mitigate
settlement risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010)
(“Claims 1 and 4 in petitioners’ application explain the basic concept of
hedging, or protecting against risk . . . .”).
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 192
(1981)); “tanning, dyeing, making waterproof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267–68 (1854))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that “[a] claim drawn to subject matter otherwise
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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.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, and this principle cannot be circumvented by attempting
to limit the use of the formula to a particular technological environment.”
Id. (internal citation omitted) (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.”).
In January 2019, the published revised guidance on the application of
§ 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed.
Reg. 50 (Jan. 7, 2019) (“Guidance”). Under the 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 a fundamental economic
practice, or mental processes); and
(2) additional elements that integrate the judicial exception into
a practical application, i.e., evaluate whether the claim
“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.” (see Guidance, 84 Fed. Reg.
at 54; see also MPEP § 2106.05(a)–(c), (e)–(h)).
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:
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(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 Guidance.
If the claim is “directed to” an abstract idea, we turn to the second
step of the Alice and Mayo framework, where “we must examine the
elements of the claim to determine whether it contains an ‘inventive
concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-
eligible application.” Alice, 573 U.S. at 221 (citation omitted). “A claim
that recites an abstract idea must include ‘additional features’ to ensure ‘that
the [claim] is more than a drafting effort designed to monopolize the
[abstract idea].’” Id. (alterations in original) (quoting Mayo, 566 U.S. at 77).
“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
that abstract idea into a patent-eligible invention.” Id.
The Specification at paragraph 3 states that the invention “relate[s] to
payment transactions, such as payments made by credit cards, debit cards,
prepaid cards, etc., and the redemption of benefits of offers such as coupons,
deals, discounts, rewards, etc.”. Here, the Examiner has determined that the
claim is drawn to “reducing an amount specified in an authorization request
by applying a benefit of an offer to a payment transaction amount in
exchange for a reduction in a balance of a loyalty currency” and sets forth to
an abstract idea (Ans. 3). We agree in substance with the Examiner. We
determine that the claim sets forth the subject matter in italics above for: [1]
providing “first computers controlling the payment accounts from which the
payments are made”; and providing [2] “second computers controlling
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merchant accounts in which the payments are received”; [3] “receiving… a
user input from a user identifying: a loyalty currency source …a preference
of the user in redeeming loyalty currency”; [4] “storing, in the data
warehouse, data associating: an account identifier of a consumer payment
account…a communication reference of a computing device …the
preference of the user; and the loyalty currency source”; [5] “determining,
… that the user is eligible for an offer that satisfies the preference of the user
in redeeming loyalty currency from the loyalty currency source, wherein the
offer includes: a benefit applicable to a second transaction .., wherein the
benefit includes at least two reductions in a transaction amount including: a
first reduction in a form of a discount sponsored by the merchant when the
second transaction is made with the merchant; and a second reduction in a
form of redemption of an amount of reduction in a balance of the loyalty
currency source”; [6] “transmitting…a first message to the computing device
of the user identifying the offer”; [7] “configuring…a trigger record
associated with the offer stored by the data warehouse”; wherein
configuring the trigger record comprises [8] “generating… a code based on
the account identifier of the consumer payment account of the user and an
identifier of the transaction terminal of the merchant, and embedding, by the
portal, the code in the trigger record”; [9] “providing the code to the
transaction terminal”; [10] “processing … the second transaction for
authorization”; wherein processing the second transaction for authorization
comprises [11] “receiving…an authorization request associated with the
second transaction from the transaction terminal of the merchant”; [12]
“identifying… the trigger record associated with the offer based on the code
included in the authorization request associated with the second transaction”;
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wherein identifying the trigger record comprises [13] “matching the code
embedded in the trigger record and the code included in the authorization
request”; [14] “after the first message is transmitted to the user,
determining… that the second transaction satisfies the benefit redemption
requirements of the offer based on the code included in the authorization
request”; [15] “in response to the second transaction being processed
…providing …the benefit of the offer to the consumer payment account in
exchange for the amount of reduction in a balance of the loyalty currency
source”; wherein providing the benefit of the offer to the consumer payment
account comprises [16] “changing the transaction amount specified in the
authorization request received by the transaction handler for the second
transaction to a reduced transaction amount by applying the first reduction
sponsored by the merchant and the second reduction funded by the
redemption from the loyalty currency source”; [17] “transmitting a second
authorization request for the reduced transaction amount in the consumer
payment account from the transaction handler to an issuer processor of the
consumer payment account”; [18] “transmitting…a second message to the
computing device of the user about the reduction in the balance of the
loyalty currency source in exchange for the benefit of the offer applied to the
second transaction in the consumer payment account of the user”; and [19]
“removing… the trigger record associated with the offer stored by the data
warehouse after a predetermined period of time from authorization
processing of the second transaction in the electronic payment processing
network.” Here, claim 1 is drawn to payment processing between users and
merchants which includes an offer and benefit transaction which is a certain
method of organizing human activity and fundamental economic practice i.e.
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a judicial exception. In Inventor Holdings, LLC v. Bed Bath & Beyond Inc.,
876 F.3d 1372, 1378 claims directed to the local processing of payments for
remotely purchased goods was held to be directed to an abstract idea. In
Buysafe, Inc. v. Google, Inc. 765 F.3d 1350, 1355 (Fed. Cir. 2014) it was
held that claims drawn to creating a contractual relationship are directed to
an abstract idea. See Electric Power Group, LLC v. Alstom S.A., 830 F.3d
1350 (Fed. Cir. 2016) where collecting information, analyzing it, and
displaying results from certain results of the collection and analysis was held
to be an abstract idea.
We next determine whether the claim recites additional elements in
the claim to integrate the judicial exception into a practical application. See
Guidance, 84 Fed. Reg. at 54–55. The Revised Guidance references the
MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) §§ 2106.05(a)–(c)
and (e)–(h).
Here, the claims do not improve computer functionality, improve
another field of technology, utilize a particular machine, or effect a
particular physical transformation. Rather, we determine that nothing in the
claims imposes a meaningful limit on the judicial exception, such that the
claims are more than a drafting effort to monopolize the judicial exception.
For example, in the claim, the additional elements beyond the abstract
idea are the recited transaction handler, electronic payment processing
network, first and second computers, data warehouse, portal, computing
device, and transaction terminal. The claimed limitations of the computer
components in the claim “do not purport to improve the functioning of the
computer itself,” do not improve the technology of the technical field, and
do not require a “particular machine.” Rather, they are performed using
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generic computer components. Further, the claim as a whole fails to effect
any particular transformation of an article to a different state. The recited
steps in the claim fail to provide meaningful limitations to limit the judicial
exception. In this case, the claim merely uses the claimed computer
elements as a tool to perform the abstract idea.
Considering the elements of the claim both individually and as “an
ordered combination” the functions performed by the computer system at
each step of the process are purely conventional. Each step of the claimed
method does no more than require a generic computer to perform a generic
computer function. Thus, the claimed elements have not been shown to
integrate the judicial exception into a practical application as set forth in the
Revised Guidance which references the MANUAL OF PATENT EXAMINING
PROCEDURE (“MPEP”) §§ 2106.05(a)–(c) and (e)–(h).
Turning to the second step of the Alice and Mayo framework, we
determine that the claim does not contain an inventive concept sufficient to
“transform” the abstract nature of the claim into a patent-eligible application.
Considering the claim both individually and as an ordered combination fails
to add subject matter beyond the judicial exception that is not well-
understood, routine, and conventional in the field. Rather, the claim uses
well-understood, routine, and conventional activities previously known in
the art and they are recited at a high level of generality. The Specification at
pages 116–120 for example describes using conventional computer
components such as microprocessors, mobile phones, modems, and memory
in a conventional manner. The claim specifically includes recitations for a
computing apparatus using computers to implement the method but the
claimed computer components and functions are all used in a manner that is
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well-understood, routine, and conventional in the field. Here, the claimed
generic computer components which are used to implement the claimed
method are well understood, routine, or conventional in the field. Here, the
claim has not been shown to be “significantly more” than the abstract idea.
We note the point about pre-emption (Appeal Br. 23, 24). While pre-
emption “might tend to impede innovation more than it would tend to
promote it, ‘thereby thwarting the primary object of the patent laws”’ (Alice,
134 S. Ct. at 2354 (quoting Mayo Collaborative Servs. v. Prometheus Labs.,
Inc., 132 S. Ct. 1289, 1293 (2012)), “the absence of complete preemption
does not demonstrate patent eligibility” (Ariosa Diagnostics, Inc. v.
Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)). See also OIP
Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362–63 (Fed. Cir. 2015),
cert, denied, 136 S. Ct. 701, 193 (2015)(“[T]hat the claims do not preempt
all price optimization or may be limited to price optimization in the e-
commerce setting do not make them any less abstract.”).
For these above reasons the rejection of claim 1 is sustained. The
Appellant has provided the same arguments drawn to the remaining claims
which are drawn to similar subject matter and the rejection of these claims is
sustained for the same reasons as given above.

CONCLUSIONS OF LAW
We conclude that Appellant has not shown that the Examiner erred in
rejecting claims 1–20 under 35 U.S.C. § 101.

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DECISION SUMMARY
In summary:
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–20 101 Eligibility 1–20

TIME PERIOD FOR RESPONSE
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).

AFFIRMED