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Patent Trial and Appeal Board Reverses Subject Matter Eligibility Rejections Based on Incomplete Analysis

Last week, the Patent Trial and Appeal Board (“Board”) issued two decisions reversing final rejections under 35 U.S.C. § 101. Rather than performing an in-depth analysis of the claimed subject matter, the Board based these reversals on an incomplete subject matter eligibility analysis by the examiner. These appeals originated from Art Unit 3690, which focuses on finance business methods. In December 2016, the USPTO released three fact patterns to demonstrate complete analyses of eligible and ineligible subject matter specifically for business methods. Without identifying the judicial exception based on what the claims recite, or explaining the reasons that the additional elements do not result in the claim amounting to significantly more than the judicial exception, a § 101 rejection may be reversed, as demonstrated below.

Appeal of Application 10/184,012

In the first appeal, the Examiner characterized the claims as being “directed to the abstract idea of validating that a person is the true owner of a funding account (e.g. a checking account) in order to enable the person to authorize future payments from the account.” The Examiner noted that this description fell into two of the USPTO’s categories of abstract ideas: “fundamental economic practice” and “method of organizing human activities.” The Examiner then alleged that the additional elements in the claims failed to amount to significantly more than the abstract idea, without identifying any additional elements considered or reasoning on why they failed to be significantly more than the abstract idea. Western Union responded by arguing that the Examiner failed to establish a prima facie case of ineligible subject matter by merely providing a single conclusory sentence addressing the additional elements.

Assuming that the claims were directed to an abstract idea, the Board nonetheless found that the Examiner’s rejection had not “adequately explained why the claims fail to recite limitations that are ‘significantly more’ than the abstract idea itself.” In particular, the Board noted that the final rejection lacked any explanation on why the claims would not provide an improvement to the technical field of electronic check processing. Without this rationale in the rejection, the Board found that a prima facie case of ineligible subject matter was not established, and reversed the Examiner’s rejection.

Appeal of Application 13/571,926

The Board’s second decision reviewed whether MasterCard had received a similarly deficient rejection in application 13/571,926. Claim 1 recites:

1. A method of processing a reservation, comprising:

receiving, by a receiving device, reservation information for a reservation, wherein the reservation information includes at least a preauthorization amount, payment information, a merchant identifier, and a predetermined period of time;

storing, in a database device, the received reservation information;

identifying, by a processing device, a unique identifier associated with the stored reservation information;

transmitting, by a transmitting device, at least the unique identifier associated with the stored reservation information and predetermined period of time to a merchant associated with the merchant identifier for a future financial transaction pertaining to the reservation information;

receiving, by the receiving device, data identifying, within the predetermined period of time, fulfillment of the reservation; and

transmitting, by the transmitting device, the stored payment information for payment of the financial transaction based on the preauthorization amount.

In the final rejection, the Examiner noted that the claims recited a fundamental economic practice by using the claim’s preamble of “processing a reservation” as the abstract idea, and then found that this fundamental economic practice was merely implemented on a generic computer system. In response, MasterCard argued that the claim’s preamble yielded an “overly broad” characterization of the claims, and only described the overall objective of the claims.

Looking at the specification, the Board found that the transmitting step of claim 1 took the claims beyond the abstract idea of “processing a reservation” by disclosing “the reservation of a future financial transaction including providing payment information by a party for the benefit of a third party.” In failing to consider the transmitting step, the Board agreed that “processing a reservation” was an overly broad characterization of the claims. Even when considering the transmitting step, the Board found an insufficient basis in the record to determine whether the claims would still recite a fundamental economic practice.

Both of these reversals serve as excellent examples of how an incomplete subject matter eligibility rejection may be treated by the Board. Applicants must receive adequate reasoning for a § 101 rejection that permits the applicant to understand and respond to the rejection; otherwise, an applicant may be able to overcome the rejection by arguing that the reasoning provided by the examiner is inadequate to support the rejection.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume VII, Number 68

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About this Author

Alex Wolcott, Squire Patton Boggs Law Firm, Patent Prosecution Attorney
Associate

Alex focuses his practice on patent prosecution for domestic and international applicants in a variety of fields, especially the software and computer areas.

Prior to joining the firm, Alex was a patent examiner at the US Patent and Trademark Office for more than three years. As an examiner, he primarily reviewed patent applications relating to e-commerce, payment systems, mobile devices and computer networks. In addition, Alex gained significant experience in subject matter eligibility issues under section 101.

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