Ex parte Raz

FILING DATE: 01/14/2015

Before KARL D. EASTHOM, SCOTT B. HOWARD, and STEVEN M. AMUNDSON, Administrative Patent Judges.

DECISION ON APPEAL

AMUNDSON, ADMINISTRATIVE PATENT JUDGE.

Appellant^[1] seeks our review under 35 U.S.C. § 134(a) from a final rejection of claims 1-20, i.e., all pending claims. We have jurisdiction under 35U.S.C. §6(b).

We affirm.

STATEMENT OF THE CASE

The Invention

According to the Specification, the invention "relates to network security systems generally and to real-time fraud detection in particular." Spec. ¶ 2.^[2] The Specification explains that "[t]racking fraud in the online environment is a hard problem to solve" for several reasons. Id. ¶¶ 3-6; see id. ¶¶ 34-35. First, "[f]raudster tactics rapidly evolve," and "[t]oday's attacks expose the inadequacies of yesterday's online fraud prevention technologies." Id. ¶¶ 3-4. Second, reactive strategies that "attempt to stop fraudsters by defining new detection rules after the fact" can "never anticipate and respond to every new fraud pattern." Id. ¶ 5. Third, conventional solutions "often borrow technology from other market domains (e.g. credit card fraud, web analytics)" and "extend functionality for online fraud detection with mixed results." Id. ¶ 6.

Hence, the invention endeavors to overcome those deficiencies by providing "a statistical approach to detect fraud, looking at how a general population may utilize a website and at how a particular user may utilize the website." Spec. ¶ 35. In addition, the invention "may provide a hybrid approach, using statistical models both for an entire population and for particular users." Id. Among other things, the invention assesses "business action scenarios" as well as "models of session intelligence (i.e. knowledge of how a user and/or the non-fraudulent population may operate during a session, such as a web session)." Id. ¶ 36.

Exemplary Claims

Independent claims 1 and 10 exemplify the claims at issue and read as follows:

1. A business action fraud detection system for a website the system comprising

a business action classifier to classify a series of operations from a single web session as a business action and

a fraud detection processor to determine a score for each operation based on a statistical comparison of data of each request forming part of the operation against statistical models generated based on previously received data, said score combining probabilities that the transmission and navigation activity of a session are those expected of a normal user performing the business action

10. A method for detecting business action fraud on a website, the method comprising:

classifying a series of operations from a single web session as a business action; and

determining a score for each operation based on a statistical comparison of the data of each request forming part of the operation against statistical models generated based on previously received data, said score combining probabilities that the transmission and navigation activity of a session are those expected of a normal user performing the business action.

Appeal Br. 32-33 (Claims App.).

The Prior Art Supporting the Rejections on Appeal

As evidence of unpatentability under 35 U.S.C. § 103, the Examiner relies on the following prior art:

Name	Reference	Date
Pricer et al ("Pricer")	US 2002/0143925 A1	Oct 3, 2002
Zwicky	US 8, 682, 718 B2	Mar. 25, 2014
Koutrika et al. (Koutrika)	US 2015/0339712 A1	Nov. 26, 2015 (filed Jan. 3, 2013)

The Rejections on Appeal

Claims 1-20 stand rejected under 3 5 U.S.C. § 101 as directed to patent-ineligible subject matter. Final Act. 2-5; Appeal Br. 6.

Claims 1-3, 5-12, and 14-20 stand rejected under 3 5 U.S.C. § 103 as unpatentable over Zwicky and Pricer. Final Act. 9-14; Appeal Br. 20.

Claims 4 and 13 stand rejected under 35 U.S.C. § 103 as unpatentable over Zwicky, Pricer, and Koutrika. Final Act. 14-15; Appeal Br. 30.

ANALYSIS

We have reviewed the rejections in light of Appellant's arguments that the Examiner erred. For the reasons explained below, we concur with the Examiner's conclusions concerning ineligibility under § 101 and unpatentability under § 103. We adopt the Examiner's findings and reasoning in the Final Office Action and Answer. See Final Act. 2-15; Ans. 3-10. We add the following to address and emphasize specific findings and arguments.

The §101 Rejection of Claims 1-20

Introduction

The Patent Act defines patent-eligible subject matter broadly: "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." 35 U.S.C. § 101. In Mayo and Alice, the Supreme Court explained that § 101 "contains an important implicit exception" for laws of nature, natural phenomena, and abstract ideas. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012); Alice Corp. v. CLS Banklnt'l, 573 U.S. 208, 216 (2014); see also Diamond v. Diehr, 450 U.S. 175, 185(1981). In Mayo and Alice, the Court set forth a two-step analytical framework for evaluating patent eligibility. Mayo, 566 U.S. At 77-80: Alice, 573U.S.at 217-18.

Under Mayo/Alice step one, we "determine whether the claims at issue are directed to" a judicial exception, i.e., an abstract idea, a law of nature, or a natural phenomenon. Alice, 573 U.S. at 217. Step one involves looking at the "focus" of the claims at issue and their "character as a whole." Simw, LLC v. Flex Sim Software Prods., Inc., 983 F.3d 1353, 1359 (Fed. Cir. 2020); SAP Am., Inc. v. Invest Pic, LLC, 898 F.3d 1161, 1167 (Fed. Cir. 2018).

In January 2019, the PTO issued revised guidance for determining whether claims are directed to a judicial exception. See 2019 Revised P atent Subject Matter Eligibility Guidance, 84 Fed.Reg. 50 (Jan. 7, 2019) ("2019 Guidance").^[3] The 2019 Guidance applies to the Board. Id. at 50-51, 57 n.42; see 35 U.S.C. § 3(a)(2)(A) (investing the Director with responsibility "for providing policy direction" for the PTO).

The 2019 Guidance specifies two prongs for the analysis under Mayo/Alice step one (PTO step 2A). 84 Fed.Reg. at 54-55. Prong one requires evaluating "whether the claim recites a judicial exception, i.e., an abstract idea, a law of nature, or a natural phenomenon." Id. at 54. "If the claim does not recite a judicial exception, it is not directed to a judicial exception," and it satisfies § 101. Id. "If the claim does recite ajudicial exception, then it requires further analysis" under prong two. Id. Prong two requires evaluating "whether the claim as a whole integrates the recited judicial exception into a practical application of the exception." Id. "When the exception is so integrated, then the claim is not directed to ajudicial exception," and it satisfies § 101. Id. "If the additional elements do not integrate the exception into a practical application, then the claim is directed to the judicial exception," and it "requires further analysis" under Mayol Alice step two (PTO step 2B). Id.

Under Mayo/Alice step two, we "consider the elements of each claim both individually and 'as an ordered combination' to determine whether the additional elements" add enough to transform the "nature of the claim" into "significantly more" than the judicial exception. Alice, 573 U.S. at 217-18, 221-22 (quoting Mayo, 566 U.S. at 78-79). Step two involves the search for an "inventive concept." Alice, 573 U.S. at217-18, 221; Univ. of Fla. Research Found., Inc. v. Gen. Flee. Co., 916 F.3d 1363, 1366 (Fed. Cir. 2019). "[A]n inventive concept must be evident in the claims." RecogniCorp, LLC v. Nintendo Co., 855F .3d 1322, 1327 (Fed. Cir. 2017).

Mayo/Alice Step One: PTO Step 2A Prong One

Patent-ineligible abstract ideas include fundamental economic practices, mental processes, and mathematical formulas. See, e.g., Alice, 573 U.S. at 219-20 (fundamental economic practice of intermediated settlement); Bilski v. Kappos, 561 U.S. 593, 599, 611-12 (2010) (fundamental economic practice of hedging or protecting against risk in independent claim and mathematical formula in dependent claim); Parker v. Flook, 437 U.S. 584, 585-86, 596-98 (1978) (mathematical formula for calculating updated alarm limit); Gottschalk v. Benson, 409 U.S. 63, 65-67 (1972) (mental process of converting binary-coded-decimal representation to binary representation). The 2019 Guidance specifies three groupings of abstract ideas: (1) certain methods of organizing human activity, (2) mental processes, and (3) mathematical concepts. 84 Fed.Reg. at 51-52.

In Alice, the Supreme Court "did not establish any 'precise contours' for defining whether claims are directed to 'abstract ideas' or something else." CellspinSoft, Inc. v. Fitbit, Inc., 927F.3d 1306, 1315 (Fed. Or. 2019) (citing Alice, 573 U.S. at 221). Further, for Mayo/Alice step one, the Federal Circuit has noted that "[a]n abstract idea can generally be described at different levels of abstraction." Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016).

Here, the Examiner determines that the claims recite mental processes, i.e., "classifying a series of operations" and "determining a score based on a comparison." Final Act. 2; Ans. 3. The Examiner explains that the claims encompass "performance of the limitation[s] in the mind." Ans. 3-4. The Examiner also explains that nothing in the claims "precludes the step[s] from practically being performed in the mind" except "the...