DETAILED ACTION
Notice of Pre-AIA or AIA Status
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Claim Status
The claims filed 4/14/2026 have been entered.
Claims 1-2, 4-9, 11-16, and 18-20 are pending.
Claims 1, 8, and 15 are independent.
Claims 1, 8, and 15 are currently amended.
Claims 2, 4, 7, 9, 11, 14, 16, 18, and 20 are previously presented.
Claims 5-6, 12-13, and 19 are original.
Claims 3, 10, and 17 are canceled.
Response to Arguments
Applicant’s arguments filed 4/14/2026 have been fully considered but are not persuasive.
35 U.S.C. 101 Rejections
Applicant argues that the claims are not directed to an abstract idea under Step 2A Prong 1. More specifically, Applicant argues “there is a key distinction between claims directed to an exception (which require further eligibility analysis) and claims that merely involve an exception (which are eligible and do not require further eligibility analysis). Id. The Office Action seemingly confuses this concept: it mistakes the indirect presence of an exception (e.g., detecting fraudulent activity during an e- commerce transaction) as indicating that the claims are, as a whole, directed to the exception. This is simply not the case. The present claims merely involve the fundamental economic practice of mitigating risk, but are not directed to it. Rather, the claims are directed to a unique way of how to detect specific fraudulent activity (e.g., card testing and carding attacks). That is, the claims are directed to an improved technique for identifying card testing and carding attacks across multiple merchants, activity that is ordinarily difficult to detect. Specification at [0017]-[0019])” (see Remarks, pp. 15-16).
The argument is not persuasive. Step 2A Prong 1 involves determining if the claims recite an abstract idea. Prong 1 asks does the claim recite an abstract idea, law of nature, or natural phenomenon? In Prong 1 examiners evaluate whether the claim recites a judicial exception, i.e. whether a law of nature, natural phenomenon, or abstract idea is set forth or described in the claim. Here, the limitations do not merely involve an exception. In contrast, they set forth or describe transaction analysis for purposes of fraud prevention, which is a fundamental economic practice (including mitigating risk). Thus, the claims recite a certain method of organizing human activity.
Applicant argues that the claimed invention provides security enhancements similar to those found eligible by the Patent Trial and Appeal Board (PTAB) and to those found eligible in CosmoKey. Applicant further argues that the claims depart from earlier approaches and improves the operation of computer-based transaction systems (see Remarks, pp. 16-18).
The argument is not persuasive. Applicant presents these arguments with regards to Step 2A, Prong 1. Applicant argues that the claims provide improvements to technology, but there is no clear improvement to a technology or to computer functionality. As such, the eligibility of the claims is not self-evident. Thus, the streamlined analysis is not employed, and the full two-step analysis is performed. With regards to Applicant’s arguments that the claimed invention departs from earlier approaches, the argument is not persuasive because a new abstract idea is still an abstract idea. The Supreme Court’s decisions make it clear that judicial exceptions need not be old or long-prevalent, and that even newly discovered or novel judicial exceptions are still exceptions. For example, the mathematical formula in Flook, the laws of nature in Mayo, and the isolated DNA in Myriad were all novel or newly discovered, but nonetheless were considered by the Supreme Court to be judicial exceptions because they were “‘basic tools of scientific and technological work’ that lie beyond the domain of patent protection.” Myriad, 569 U.S. 576, 589, 106 USPQ2d at 1976, 1978 (noting that Myriad discovered the BRCA1 and BRCA1 genes and quoting Mayo, 566 U.S. 71, 101 USPQ2d at 1965); Flook, 437 U.S. at 591-92, 198 USPQ2d at 198 (“the novelty of the mathematical algorithm is not a determining factor at all”); Mayo, 566 U.S. 73-74, 78, 101 USPQ2d 1966, 1968 (noting that the claims embody the researcher's discoveries of laws of nature). The Supreme Court’s cited rationale for considering even “just discovered” judicial exceptions as exceptions stems from the concern that “without this exception, there would be considerable danger that the grant of patents would ‘tie up’ the use of such tools and thereby ‘inhibit future innovation premised upon them.’” Myriad, 569 U.S. at 589, 106 USPQ2d at 1978-79 (quoting Mayo, 566 U.S. at 86, 101 USPQ2d at 1971). See also Myriad, 569 U.S. at 591, 106 USPQ2d at 1979 (“Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the §101 inquiry.”). The Federal Circuit has also applied this principle, for example, when holding a concept of using advertising as an exchange or currency to be an abstract idea, despite the patentee’s arguments that the concept was “new”. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 714-15, 112 USPQ2d 1750, 1753-54 (Fed. Cir. 2014). Cf. Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151, 120 USPQ2d 1473, 1483 (Fed. Cir. 2016) (“a new abstract idea is still an abstract idea”) (emphasis in original).
Applicant further argues that the claims integrate the abstract idea into a practical application under Step 2A Prong 2. More specifically, Applicant argues that the claims recite improvements in the functioning of a computer or an improvement to other technology or technical field. Applicant argues that the claim elements reflect improvements in the technical field of detecting fraudulent online-e-commerce transactions by enabling the identification of complex fraud rings and card testing attacks. Applicant argues that the invention specifically targets patterns common in fraud rings, where bad actors use stolen (and therefore often incomplete) payment details to make many small test transactions across multiple merchants to guess missing information (see Remarks, pp. 18-20).
The argument is not persuasive. Applicant’s argued benefits fall under improvements to the abstract idea itself and are not an improvements to the functioning of a computer or to another technology or technical field. An improvement in the abstract idea itself (e.g. a recited fundamental economic concept) is not an improvement in technology and does not provide integration into a practical application. For example, in Trading Technologies Int’l v. IBG, 921 F.3d 1084, 1093-94, 2019 USPQ2d 138290 (Fed. Cir. 2019), the court determined that the claimed user interface simply provided a trader with more information to facilitate market trades, which improved the business process of market trading but did not improve computers or technology. Here, Applicant’s arguments that the claimed invention enables detection of fraud through new analysis of transactions is not persuasive because the improvement lies within the abstract realm of transaction analysis.
Applicant further argues that the claims add significantly more than the abstract idea under Step 2B. More specifically, Applicant argues that the claims recite a technological solution to a technological problem. Applicant argues that this solution is achieved by the claimed ordered combination of steps (see Remarks, pp. 21-23).
The argument is not persuasive. For the reasons discussed with regards to Step 2A Prong 2, the claimed improvements fall under the improvements to recited abstract idea and are not indicative of a technological improvement. Furthermore, looking at the limitations as an ordered combination adds nothing that is not already present when looking at the elements taken individually. There is no indication that the combination of elements improves the functioning of a computer or improves any other technology. Their collective functions merely provide generic computer implementation of a new abstract idea.
For the above reasons, the rejection of claims 1-2, 4-9, 11-16, and 18-20 under 35 U.S.C. 101 are maintained herein.
Claim Rejections - 35 USC § 101
35 U.S.C. 101 reads as follows:
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.
Claims 1-2, 4-9, 11-16, and 18-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to an abstract idea without significantly more.
Step 1
Claims 1-2, 4-9, 11-16, and 18-20 are directed to a method (process), system (machine), or product (manufacture), and thus fall within the statutory categories of invention. (Step 1: YES).
Step 2A Prong 1
The Examiner has identified independent method claim 1 as the claim that represents the claimed invention for analysis and is similar to independent system claim 8 and independent product claim 15. Claim 1 recites the limitations of:
1. A [computer-implemented] method comprising:
intercepting, [by a processor], authorization requests [sent across a payment network] for a plurality of transactions involving a plurality of merchants or other organizations, wherein [the processor] accesses [a database storing hashed] identifiers associated with one or more users of the plurality of transactions;
assigning, [by the processor], a unique transaction identifier to each transaction among the plurality of payment transactions, each unique transaction identifier being unique among the identifiers assigned to the plurality of transactions and uniquely identifying the transaction to which it is assigned;
sorting, [by the processor], the plurality of transactions into a first plurality of groups of transactions by a first sorting parameter, each transaction within each group of transactions among the first plurality of groups of transactions having the same value for the first sorting parameter;
assigning, [by the processor], the unique transaction identifier of a first respective transaction within each group of transactions among the first plurality of groups of transactions to all other transactions within the respective group of transactions among the first plurality of groups of transactions;
sorting, [by the processor], the plurality of transactions into a second plurality of groups of transactions by a second sorting parameter, each transaction within each group of transactions among the second plurality of groups of transactions having the same value for the second sorting parameter;
assigning, [by the processor], the unique transaction identifier of a second respective transaction within each group of transactions among the second plurality of groups of transactions to all other transactions within the respective group of transactions among the second plurality of groups of transactions;
24Attorney Docket No.: 00134-0142-00000determining, [by the processor], that a convergence criterion is met based on no transactions changing a previously-assigned identifier over a predefined number of iterations, wherein the iterations include repeatedly sorting and assigning the unique transaction identifier based on predefined criteria until the previously-assigned identifier remains unchanged;
determining, [by the processor], whether the group of transactions exceed a predefined threshold of a potentially fraudulent activity, wherein the predefined threshold is based on a count of one or more unique account numbers, one or more unique billing addresses, or one or more unique phone numbers;
filtering, [by the processor], one or more transactions with known legitimate parameters from the group of transactions identified as potentially fraudulent, wherein the known legitimate parameters include transactions associated with one or more predefined transaction patterns or exceptions;
determining, [by the processor], whether each group of transactions among the second plurality of groups of transactions is a sequence of fraudulent transactions based on (i) determining whether the convergence criterion is met and (ii) one or more features including a transaction frequency metric, a distribution of transaction value, a temporal or structural pattern of modifications to transaction parameters, or an indicator of missing transaction parameter;
upon a determination based on the filtering that a group of transactions among the second plurality of groups of transactions is a sequence of fraudulent transactions, denying, [by the processor], respective authorization requests for each transaction among the determined group of transactions from among the authorization requests [sent across the payment network]; and
transmitting electronic reports that respectively report transactions associated with the respective denied authorization requests to respective holders of payment accounts associated with the respective transactions.
These limitations, under their broadest reasonable interpretation, cover performance of the limitation as “Certain Methods of Organizing Human Activity”. The claim limitations delineated above pertain to transaction analysis for purposes of fraud prevention, which is a fundamental economic practice (including mitigating risk). If a claim limitation, under its broadest reasonable interpretation, covers performance of the limitation as a fundamental economic practice, then it falls within the “Certain Methods of Organizing Human Activity” grouping of abstract ideas. Accordingly, the claim recites an abstract idea. The processor in claim 1 is just applying generic computer components to the recited abstract limitations. The recitation of generic computer components in a claim does not necessarily preclude that claim from reciting an abstract idea. Claims 8 and 15 are also abstract for similar reasons. (Step 2A-Prong 1: YES. The claims recite an abstract idea)
Step 2A Prong 2
This judicial exception is not integrated into a practical application. In particular, the claims recite the additional elements of:
Claim 1: computer-implemented (preamble); processor; “sent across a payment network”; transmitting “electronic” reports
Claim 8: data storage device, processor, “sent across a payment network”; transmitting “electronic” reports
Claim 15: non-transitory machine-readable medium, computing system, “sent across a payment network”; transmitting “electronic” reports
The computer hardware/software is recited at a high-level of generality (i.e., as a generic processor performing a generic computer function) such that it amounts no more than mere instructions to apply the exception using a generic computer component. MPEP 2106.05(f). The computer hardware/software is also recited in a manner which generally links the use of a judicial exception to a particular technological environment or field of use (MPEP 2106.05(h)).
Accordingly, these additional elements, when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea and are at a high level of generality. Therefore, claims 1, 8, and 15 are directed to an abstract idea without a practical application. (Step 2A-Prong 2: NO. The additional claimed elements are not integrated into a practical application)
Step 2B
The claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception because, when considered separately and as an ordered combination, they do not add significantly more (also known as an “inventive concept”) to the exception. As discussed above with respect to integration of the abstract idea into a practical application, the additional element of using a computer hardware amounts to no more than mere instructions to apply the exception using a generic computer component. Mere instructions to apply an exception using a generic computer component cannot provide an inventive concept. See Applicant’s specification para. [0022-0023] about implementation using general purpose or special purpose computing devices and MPEP 2106.05(f) where applying a computer as a tool is not indicative of significantly more. Additionally as discussed above with respect to integration of the abstract idea into a practical application, the additional element of using a computer hardware amounts to no more than generally linking the use of a judicial exception to a particular technological environment or field of use. MPEP 2106.05(h) This also cannot provide an inventive concept. Accordingly, these additional elements, do not change the outcome of the analysis, when considered separately and as an ordered combination. Thus, claims 1, 8, and 15 are not patent eligible. (Step 2B: NO. The claims do not provide significantly more)
Dependent Claims
Dependent claims 2, 4-7, 9, 11-14, 16, and 18-20 further define the abstract idea that is present in their respective independent claims 1, 8, and 15 and thus correspond to “Certain Methods of Organizing Human Activity” and hence are abstract for the reasons presented above. The dependent claims do not include any additional elements that integrate the abstract idea into a practical application or are sufficient to amount to significantly more than the judicial exception when considered both individually and as an ordered combination. Therefore, the dependent claims are directed to an abstract idea without significantly more.
Thus, claims 1-2, 4-9, 11-16, and 18-20 are not patent-eligible.
Conclusion
The prior art made of record and not relied upon is considered pertinent to applicant's disclosure.
Keay (US 2008/0191007 A1) discloses a method for identifying suspect financial transactions across multiple accounts. The method may include receiving a plurality of data sets. Each data set may relate to a financial transaction, and the plurality of data sets may include a first data set related to a first financial transaction, where the first financial transaction is associated with a first account; and a second data set related to a second financial transaction, where the second financial transaction is associated with a second account. The method may also include flagging the first data set as relating to a fraudulent transaction; analyzing the plurality of data sets according to a first set of criteria, wherein the analysis indicates that the first financial transaction and second financial transaction are similar; and flagging the second data set as relating to a suspect transaction.
THIS ACTION IS MADE FINAL. Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a).
A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory action is mailed, and any nonprovisional extension fee (37 CFR 1.17(a)) pursuant to 37 CFR 1.136(a) will be calculated from the mailing date of the advisory action. In no event, however, will the statutory period for reply expire later than SIX MONTHS from the mailing date of this final action.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to ERIC T WONG whose telephone number is (571)270-3405. The examiner can normally be reached 9am-5pm M-F.
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If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Michael W Anderson can be reached at 571-270-0508. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
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/ERIC T WONG/Primary Examiner, Art Unit 3693
ERIC WONG
Primary Examiner
Art Unit 3693
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