Patent Office Appeal Board Finds Financial Computer Process Patent Not Ineligible Subject Matter

Petitioner sought to invalidate patentee’s financial patent on a modified ATM machine arguing that the patent covered ineligible patent subject matter under Section 101 of the Patent Act but since Petitioner failed to present arguments on Patentee’s “combination of elements,” the Patent Trial and Appeals Board upheld the financial computer process patent.  NRT Technology Corp  v  Everi Payments Inc PTAB Case CBM2015-167 (Available Here).

In the United States Patent and Trademark Office (USPTO), before the Patent Trial and Appeal Board (PTAB), an opponent may challenge a covered business method (CBM) patent arguing that the CBM patent is not novel under Section 102 of the Patent Act, is obvious under Section 103 of the Patent Act, and/or covers ineligible patent subject matter under Section 101 of the Patent Act. A CBM patent is “a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.”  AIA Section 18(d)(1). To determine whether a patent is for a technological invention, the courts consider “whether the claimed subject matter as a whole” (1) “recites a technological feature that is novel and on obvious over the prior art” and (2) “solves a technological problem using a technical solution.” 37 CFR section 42.301(b).

In general, the patent related to a modified automatic automated teller machine or ATM.  The invention sought to solve a problem regarding the use of ATM debit cards.  With these types of cards, a person can reach his or her ATM limit and not be able to obtain any more cash from the ATM but may still be able to purchase goods or services via in point-of-sale POS transaction because of the distinct and separate limit for POS transactions.  The patent described a modified ATM terminal that can access a bank account via both an ATM network and a POS network.  

In one of the patent Figures, a cardholder first attempts to obtain money via a first type of transaction conducted over an ATM network but this attempt fails because he has exceeded his ATM daily limit or he cannot remember the PIN for his credit card.  However, the user can successfully obtain money via a second type of transaction by activating a POS network.  

These types of modified ATM terminals are sometimes used in connection with casinos or ATMs near the front desks of hotels or at ticket booths.  The terminal issues a script or a pre-receipt for the cardholder to take to the “money location” (the casino cashier to get money, ticket booth to buy a ticket or the hotel concierge to get money).

The patent claims recite a financial product operating over two different payment networks as: “A method of providing money or an item of value to an account holder, the method comprising: identifying an account to a terminal; entering a personal identification number [PIN] into the terminal; requesting money or an item of value based upon the account via a first type of transaction; forwarding the first type of transaction to a processor; forwarding the first type of transaction from the processor to a first network; forwarding the first type of transaction from the first network to a bank; making a denial of the first type of transaction due to exceeded pre-set limit; forwarding the denial to the processor; notifying the account holder at the terminal of the denial of the first type of transaction, and asking the account holder if they would like to request the money or item of value via a second type of transaction; requesting money or an item of value based upon the account via a second type of transaction; forwarding the second type of transaction to the processor; forwarding the second type of transaction from the processor to a second network; forwarding the second type of transaction from the second network to the bank; making an approval of the second type of transaction; forwarding the approval to the processor; and instructing a money location separate from the terminal to provide money or an item of value to the account holder.”

In the examples given above, the “first type of transaction” is a debit-ATM transaction and the “second type of transaction” is the POS network transaction.

The Petitioner’s challenge of lack of novelty was denied due to a lack of proper evidence.

The Patentee argued that the claimed invention could be characterized as technological and therefore was not a CBM-type patent.  Patentee argued that the invention was a combination of hardware and innovative software and therefore technological in nature and not a CBM.  However, the Patentee did not identify any hardware to support this statement.

The Patentee argued that the patent claims were directed to patent ineligible subject matter because they were “nothing more than abstract ideas.”  See Diamond V Diehr, 450 U.S. 175 (1981); Alice Corp.  v.  CLS Bank Int’l, 134 S.  Ct.  2347 (2014); Bilski v.  Kappos, 130 S.  Ct.  3218 (2010).  

First, the PTAB stated that the Petitioner did not clearly identify what was “the abstract idea[s]” in the claims. However, the Petitioner did argue that the claims were directed to a fundamental economic practice, such as, providing money to an account holder.  The Patentee argued that the claims were directed to particular methods of providing money to an account holder using an ATM via a POS transaction network after an earlier ATM transaction failed.

The PTAB also criticized the Petitioner in that the Petitioner did not provide argument regarding whether the patent claims were an “ordered combination” which may transform the claims into patent eligible subject matter.  As a result, the PTAB did not rule that this method of providing money was directed to patent ineligible subject matter.

The significance of this case is that this PTAB decision is one of only two (2) decisions which held that a computer-related process is patent eligible subject matter after the 2014 Supreme Court case of Alice Corp.  v.  CLS Bank Int’l, 134 S.  Ct.  2347 (2014) but the failure of evidence impacts its significance.

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