The Software IP Report
Patent-Eligibility Lessons from the PTAB (No. 2)
By Charles Bieneman
Categories: Patent Eligibility, Software Patents, The Software IP Report
Want an example of a business method patent claim that survived the Alice patent-eligibility test? Today’s second installment in our series summarizing Patent Trial and Appeal Board (PTAB) patent-eligibility decisions in ex parte appeals looks at two cases from Art Unit 3691, one of those art units in Tech Center 3600 whose subject matter is described as “Data Processing: Financial, Business Practice, Management, or Cost/Price Determination.” In one of these cases, the PTAB reach the result you would expect, and affirmed the Examiner’s Section 101 rejection. But in the other, the PTAB showed that sometimes claims can survive Alice.
PTAB Reverses Section 101 Rejection: Ex parte Flitcroft (May 30, 2017)
Art Unit 3691: Data Processing: Financial, Business Practice, Management, or Cost/Price Determination
Summary of claimed subject matter: “The steps in claim 25 result in transmitting transaction data and notifying one of whether a transaction is acceptable.” Here is claim 25 in full:
A method for providing a payment cardholder with control over use of a payment card comprising:
configuring, by a central processing system, a set of use limitations for usage of the payment card;
receiving, via an interface device, a selection, by the payment cardholder, of one or more of said use limitations;
associating, in a database device, cardholder limitations with the payment card based on said selected usage limitations for determining acceptable transactions and unacceptable transactions for the payment card;
intercepting, by said central processing system, an authorization request, from a merchant, for each transaction of the payment card;
comparing, by said central processing system, said authorization for said each transaction of the payment card with the additional limitations on use established by the customer stored in said database device;
identifying, by said central processing system, based on said comparison, each said transaction as being one of said acceptable transactions and said unacceptable transactions;
when an acceptable transaction is identified, transmitting, by a transmitting unit of said central processing system, transaction information of the identified acceptable transaction to a transaction processing device of an issuer of the payment card for processing of an associated account of the payment card; and
notifying, by the central processing system, the payment cardholder, using a message, of at least one of said acceptable transactions and said unacceptable transactions.
Alice step 1 – abstract idea? Yes: “[A]ll of the evidence supports the Examiner’s finding that claim 25 is directed to processing financial transactions, which, like the risk hedging in Bilski is a notoriously old practice and therefore an abstract idea.”
Alice step 2 – significantly more than an abstract idea? Yes: the PTAB relied on BASCOM Global Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1349 (Fed. Cir. 2016), saying that here, as in BASCOM, “an intermediary [i.e., checking on credit use limitations] is inserted between two otherwise conventional computer nodes to move the location where a process is otherwise ordinarily executed … The reasons for moving are similar in both cases and are rooted in the ways of internet technology.” Further, the Examiner had not overcome the Applicant’s showing that “the claimed architecture (i.e., the ordered combination and arrangement of the recited elements) provides a particular technical advantage.”
PTAB Affirmed Section 101 Rejection: Ex parte Fei (JP Morgan Chase Bank) (May 26, 2017)
Art Unit 3691: Data Processing: Financial, Business Practice, Management, or Cost/Price Determination
Summary of claimed subject matter: “’A computer implemented method’ which includes steps for ‘receiving . . . one or more data sets comprising data’ ‘receiving . . . one or more data sets comprising account transaction data,’ ‘analyzing . . . one or more data sets comprising data . . . and the one or more data sets comprising account transaction data . . . to determine the presence of a requirement for calculating . . . based on at least one triggering event,’ and ‘using the one or more data sets . . . and the one or more data sets comprising account transaction data . . . to . . . determine the measure of creditworthiness based on the requirement using a risk model.’” Here is claim 1 in full:
A computer implemented method, comprising:
receiving, periodically, by at least one computer processor, one or more data sets comprising data relating to the creditworthiness of an entity wherein the one or more data sets are received from an organization;
receiving, periodically, by the at least one computer processor, one or more data sets comprising account transaction data relating to one or more accounts associated with the entity;
analyzing, by the at least one computer processor, the one or more data sets comprising data relating to the creditworthiness of the entity and the one or more data sets comprising account transaction data, to the extent they have been received, to determine the presence of a requirement for calculating a measure of creditworthiness, wherein the requirement is based on at least one triggering event; and
using the one or more data sets comprising data relating to the creditworthiness of the entity and the one or more data sets comprising account transaction data, by the at least one computer processor, to the extent they have been received, to periodically determine the measure of creditworthiness based on the requirement using a risk model wherein the periodic determination is based on the presence of a requirement for calculating the measure of creditworthiness and the risk model is associated with an account segment;
wherein the at least one computer processor is located in at least one computing device that is communicatively coupled to a network.
Alice step 1 – abstract idea? Yes: “processing account transaction data.” The PTAB reasoned that “claim 1 involves nothing more than receiving account transaction data, i.e., ‘data relating to the creditworthiness,’ ‘account transaction data,’ and analyzing the data to generate an updated value — activities squarely within the realm of abstract ideas.”
Alice step 2 – significantly more than an abstract idea? No: this case was like Electric Power Group, LLC v. ALSTOM SA, 830 F. 3d 1350 (Fed. Cir. 2016); the claims included generic computing technology and “[a]s the court explained in Electric Power, ‘merely selecting information, by content or source, for collection, analysis, and display does nothing significant to differentiate a process from ordinary mental processes, whose implicit exclusion from § 101 undergirds the information-based category of abstract ideas.’”
Thanks to law clerk and patent agent David Thomas for his assistance in finding and summarizing these cases