Mastercard saves dependent claims in Section 101 PTAB Appeal

Many Section 101 appeals are affirmed by the PTAB (and Federal Circuit). Sometime the opinions give little effort to analyzing dependent claims, noting only that the applicant’s arguments have been reviewed but fail to show error in the rejections.

Other time, however, dependent claims can transform ineligible claims into eligible claims. A recent Mastercard application illustrates just such as case (SN 14/679,293).

The invention relates to virtual currency. Specifically, the invention provides virtual currency micropayments in a financial transaction system by using a universal virtual currency to minimize processing fees and times while facilitating micropayments. Upon receiving a consumer's request to exchange currency, the invention (1) identifies the relevant exchange rules stored in a database, (2) calculates an amount of virtual currency and associated real currency based on these rules, and (3) notifies the consumer of this conversion. According to Mastercard, exchanging real currency using a universal virtual currency may provide consumers with better control over exchange rate fluctuations as well as a more stable centralized currency to or from which other currencies can be freely exchanged.

1. A system for facilitating currency exchanging using a universal virtual currency, comprising:

a database configured to store a plurality of currency exchange rules, wherein each currency exchange rule is associated with at least a virtual currency and one or more real currencies;

a receiving device configured to receive a transaction request for a currency exchange from a consumer, wherein the transaction request includes at least an amount of a first real currency and indicates a second real currency; a processor configured to identify a first currency exchange rule stored in the database where the associated one or more real currencies includes at least the first real currency, identify a second currency exchange rule stored in the database where the associated one or more real currencies includes at least the second real currency, calculate a virtual currency amount based on the identified first currency exchange rule and the amount of the first real currency included in the received transaction request, and calculate an amount of the second real currency based on the identified second currency exchange rule and the calculated virtual currency amount; and

a transmitting device configured to transmit at least the calculated amount of the second real currency.

The examiner had rejected the claims as organizing human activity, and the PTAB followed the new guidelines to find that, apart from certain elements structure (database, receiving device, processor's exchange rule identifier and currency amount calculator, and transmitting device), every limitation of claim 1 recites fundamental economic practices and commercial interactions by exchanging currency according to predefined rules upon request. There, the PTAB reasoned that “[b]ecause these monetary conversions in connection with financial transactions are fundamental economic practices and commercial interactions, they fit squarely within the human activity organization category of the agency's guidelines.” In fact, the PTAB found that these limitations were also mental activity and mere calculations - thus falling into each of the three categories laid out in the guidelines. Ouch.

More interesting, though, it how the PTAB next analyzed whether the abstract ideas was integrated into a practical application. The PTAB first noted, again, the the recited (1) database; (2) receiving device; (3) the processor's exchange rule identifier and currency amount calculator; and (4) transmitting device are the “only” recited elements beyond the abstract idea, but those additional elements do not integrate the abstract idea into a practical application when reading claim 1 as a whole. From the decision (emphasis added)

First, we are not persuaded that the claimed invention improves the computer or its components' functionality or efficiency, or otherwise changes the way those devices function, at least in the sense contemplated by the Federal Circuit in Enfzsh LLC v. Microsoft Corporation, 822 F.3d 1327 (Fed. Cir. 2016), despite Appellants' arguments to the contrary (Reply Br. 5, 8). The claimed self-referential table in Enfish was a specific type of data structure designed to improve the way a computer stores and retrieves data in memory. Enfish, 822 F.3d at 1339. To the extent Appellants contend that the claimed invention uses such a data structure to improve a computer's functionality or efficiency, or otherwise change the way that device functions (see Reply Br. 8), there is no persuasive evidence on this record to substantiate such a contention.

Where the line is drawn between making mere attorney argument about the technical advantages of an invention and having evidence in the record of such advantages is difficult to know. Many PTAB decision discuss technical advantages where the only evidence in the record are mere assertions in the patent specification. This illustrates, again, the importance of having some support in the specification (or evidence elsewhere in the record) to support technical advantages so as to avoid Section 101.

The PTAB panel here strongly believed that there is a difference between obtaining improvements of computers as tools, versus improving the performance of abstract ideas that use computers as tools. This can be a difficult distinction.

Nevertheless, when looking to claim 2, the applicant found a way to overcome the rejection on appeal. The solution was not that the dependent claims added elements clearly beyond the abstract idea that provided a strong technical advantage; rather, the solution was pointing out a procedural error by the examiner. Namely, the examiners sole basis for rejecting the dependent claims was that:

The dependent claim(s) when analyzed and each taken as a whole are held to be patent ineligible under 35 U.S.C. 101 because the additional recited limitation(s) fail(s) to establish that the claim( s) is/ are not directed to an abstract idea.

The PTAB came down hard on the examiner for this shortcut:

Not only is this statement general and conclusory, it fails to identify any limitations in the dependent claims, let alone explain why the claims are directed to an abstract idea in light of their additional limitations to establish a prima facie case of eligibility under § 101 as Appellants indicate. See App. Br. 15 (noting this deficiency). … What we can say, however, is that the Examiner's gloss on the dependent claims' additional limitations falls short of establishing a prima facie case of ineligibility on this record.

So, don’t forget to argue dependent claims, and point out when the examiner gives them insufficient consideration as that can save the case on appeal.