DETAILED ACTION
Status of Claims
Claims 1, 14, and 20 have been amended.
Claims 1-20 are currently pending and have been considered by the examiner.
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 .
Response to Arguments
101 Rejection:
Applicant’s asserts that the amended claims are patent eligible under 35 USC 101 because “applicant’s independent claims represent a specific, technological improvement to existing secure payment processing system that cannot be implemented via the existing certification process systems described by the prior art of record” (See remarks received 10 December 2025, pg. 10). Additionally referring examiner to Appeal 2021-000567 and asserting that none of Applicant’s claims merely recite “risk mitigation” and instead the claim “requires the execution of each of the claimed features to generate a merchant activation decision by determining whether the payment request is or is not at risk based on the risk analysis and without requiring a certification process; and transmit a notification to the payment initiation device based on the determination, wherein the notification comprises a successful response when the payment request is determined to not be at risk and a declined response when the payment request is determined to be at risk.” (See remarks received 10 December 2025, pg. 11). The examiner respectfully disagrees.
The examiner asserts that Applicant’s argument cannot be considered persuasive and instead seem to be directed towards an assertion of fact coupled with a functional description of the claimed invention. No specific argument was provided outlining why the rationale applied in the outcome of Appeal 2024-000567 should be applied to the present claims. As no specific argument has been presented as to why the aforementioned claim limitations outlined by the examiner in the previously issued office action cannot be considered to recite the abstract idea of risk mitigation, the examiner must reassert the previously held position that the claims are patent ineligible under 35 USC 101 based upon the previously provided rationale as well as the rationale provided in the following 101 rejection.
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 1-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to an abstract idea without significantly more.
In the instant case, claims 14-19 are directed to a method, claims 1-13 are directed to a system/apparatus, and claim 20 is directed to a non-transitory computer readable medium. Therefore, these claims fall within the four statutory categories of invention.
Claim 1 recites the following:
A system to support instant merchant activation for secured in-person payment at a point of sale (POS), comprising:
a payment initiation device, which in operation, is configured to:
collect electronic payment transaction data for an electronic payment request, wherein the electronic payment transaction data includes a sensitive data portion and a non- sensitive data portion, and wherein the electronic payment transaction data is associated with a financial instrument;
encrypt the sensitive data portion and transmit the electronic payment transaction data through a payment gateway, wherein the sensitive data portion is encrypted using one or more keys provided by and shared only with a payment processor;
said payment gateway, which in operation, is configured to accept and forward both the sensitive and the non-sensitive data portion of the electronic payment transaction data with the payment request to a payment processor for payment processing;
said payment processor, which in operation, is configured to:
decrypt the sensitive data portion of the electronic payment transaction data;
send the electronic payment transaction data over a payment network to an issuer of the financial instrument for approval;
receive, over the payment network, a confirmation approving the payment request from the issuer of the financial instrument; and
transmit the confirmation approving the payment request;
said payment gateway, which in operation, is further configured to, in response to receiving the confirmation approving the payment request, transmit only the non-sensitive data portion of the electronic payment transaction data to a payment service engine for risk analysis to determine if the payment request should be processed or not;
said payment service engine, which in operation, is configured to:
accept and analyze the non-sensitive data portion of the electronic payment transaction data in real time;
perform a risk analysis comprising analyzing the non-sensitive data based on historical payment transaction data;
generate a merchant activation decision by determining whether the payment request is or is not at risk based on the risk analysis and without requiring a certification process;
transmit a notification to the payment initiation device based on the determination, wherein the notification comprises a successful response when the payment request is determined to not be at risk and a declined response when the payment request is determined to be at risk; and
when the notification comprises the declined response, cancel the confirmation approving the payment request.
Regarding Step 2A Prong One, the claims recite the abstract idea of risk mitigation. Specifically, the claims recite the limitations underlined above which recite the process of mitigating risk in an economic transaction which is grouped within the Certain Methods of Organizing Human Activity grouping of abstract ideas in prong one of step 2A of the Alice/Mayo test (See MPEP § 2106.04) because the claims involve the process of mitigating risk in an economic transaction. Accordingly, the claims recite an abstract idea (See pages 7, 10, Alice Corporation Pty. Ltd. v. CLS Bank International, et al., US Supreme Court, No. 13-298, June 19, 2014; 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50, 53-54 (January 7, 2019)).
Regarding Step 2A Prong Two, the recited abstract idea is not integrated into a practical application because, when analyzed under prong two of step 2A of the Alice/Mayo test (See MPEP § 2106.04(d)), the additional element(s) of the claim(s) such as a “payment initiation device”, a “payment gateway”, a “payment processor”, a “payment service engine”, and a “payment initiation device” merely use(s) a computer as a tool to perform an abstract idea. Specifically, the “payment initiation device”, “payment gateway”, “payment processor”, “payment service engine”, and “payment initiation device” perform(s) the steps or functions underlined above. The use of a processor/computer as a tool to implement the abstract idea does not integrate the abstract idea into a practical application because it requires no more than a computer performing functions that correspond to acts required to carry out the abstract idea. The additional elements do not involve improvements to the functioning of a computer, or to any other technology or technical field (MPEP 2106.05(a)), the claims do not apply or use the abstract idea to effect a particular treatment or prophylaxis for a disease or medical condition (Vanda Memo), the claims do not apply the abstract idea with, or by use of, a particular machine (MPEP 2106.05(b)), the claims do not effect a transformation or reduction of a particular article to a different state or thing (MPEP 2106.05(c)), and the claims do not apply or use the abstract idea in some other meaningful way beyond generally linking the use of the abstract idea to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception (MPEP 2106.05(e) and Vanda Memo). Therefore, the claims do not, for example, purport to improve the functioning of a computer. Nor do they effect an improvement in any other technology or technical field. Accordingly, the additional elements do not impose any meaningful limits on practicing the abstract idea, and the claims are directed to an abstract idea.
The claim(s) do not include additional elements that are sufficient to amount to significantly more than the judicial exception because, when analyzed under step 2B of the Alice/Mayo test (See MPEP § 2106.05), the additional element(s) of a “payment initiation device”, a “payment gateway”, a “payment processor”, a “payment service engine”, and a “payment initiation device” amounts to no more than using a computer or processor to automate and/or implement the abstract idea. As discussed above, taking the claim elements separately, the “payment initiation device”, “payment gateway”, “payment processor”, “payment service engine”, and “payment initiation device” perform(s) the steps or functions underlined above. These functions correspond to the actions required to perform the abstract idea. Viewed as a whole, the combination of elements recited in the claims merely recite risk mitigation. Therefore, the use of these additional elements does no more than employ the computer as a tool to automate and/or implement the abstract idea. The use of a computer or processor to merely automate and/or implement the abstract idea cannot provide significantly more than the abstract idea itself (MPEP 2106.05(I)(A)(f) & (h)). Therefore, the claim is not patent eligible.
Dependent claims 2-13 and 15-19 further describe the recited abstract idea. The dependent claims do not include additional elements that integrate the abstract idea into a practical application or that provide significantly more than the abstract idea. Specifically:
Claims 2 merely further describes the electronic payment transaction data used to mitigate risk.
Claims 3-4 further describe the claimed payment initiation device but do not recite any additional elements which place the recited abstract idea into practical application nor amount to significantly more.
Claims 5-7 merely further describe the data used to perform the recited process of risk mitigation.
Claims 8-10 further describe the claimed payment gateway but do not recite any additional elements which place the recited abstract idea into practical application nor amount to significantly more.
Claims 11-13 further describe the claimed payment service engine but do not recite any additional elements which place the recited abstract idea into practical application nor amount to significantly more.
Claims 15-19 recite additional limitations which are also directed towards the recited abstract idea of risk mitigation.
Therefore, as the dependent claims do not include additional elements that integrate the abstract idea into a practical application nor provide significantly more than the abstract idea, the dependent claims are also not patent eligible.
Conclusion
Applicant's amendment necessitated the new ground(s) of rejection presented in this Office action. Accordingly, THIS ACTION IS MADE FINAL. See MPEP § 706.07(a). 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.
The prior art made of record and not relied upon is considered pertinent to applicant's disclosure.
Gupta et al. (US 20180068395 A1) generally discloses systems and methods for receiving a plurality of transactions for analysis over iterations to improve fraud detection.
Lim et al. (US 20110238564 A1) generally discloses systems and methods for improving early detections of fraud in economic transactions.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to NICHOLAS K PHAN whose telephone number is (571)272-6748. The examiner can normally be reached M-F 1 pm-9 pm EST.
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If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Neha Patel can be reached on 571-270-1492. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
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/NICHOLAS K PHAN/Examiner, Art Unit 3699
/COURTNEY P JONES/Primary Examiner, Art Unit 3699