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 .
DETAILED ACTION
Continued Examination Under 37 CFR 1.114
A request for continued examination under 37 CFR 1.114, including the fee set forth in 37 CFR 1.17(e), was filed in this application after final rejection. Since this application is eligible for continued examination under 37 CFR 1.114, and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114.
Status of the Claims
Claims 1, 3 and 5-7,9-11 are pending in the application.
Claims 1, 10 and 11 have been amended
Claim 8 has been cancelled
The rejection under 35 USC 101 is maintained
Response to Applicant Remarks
Applicant’s well-articulated remarks have been considered but are unpersuasive for the reasons below.
Regarding the rejection under 35 USC 101, Applicant argues that the claimed normalizing of data is not a mental process. (Applicant’s 4/24/26 remarks, p.14). The examiner respectfully disagrees.
At the level the feature is claimed, the examiner does not concur that it is necessarily a computer specific data transformation. That is, data including human readable data is known to be appear in many customer formats. Common date formats include YYYY-MM-DD (international standard), DD/MM/YYYY (day-month-year, used globally), and MM/DD/YYYY (month-day-year, primarily USA). Some naming conventions allow or disallow hyphens or symbols in the names of individuals. Whether an organization desires its data expressed in a particular format or converts into these formats is not beyond the capable of human thought.
Applicant argues that the claimed risk classification cannot be performed in the human mind. (Applicant’s 4/24/26 remarks, p.14). The examiner respectfully disagrees.
Applicants claims recite various factors that if present may upgrade or downgrade a risk class (Applicant’s claim 1, “determining the risk class according to a basic risk level of a matching accounting
fraud pattern;
downgrading the risk class if one of exceptional conditions preset for the
company to be audited is satisfied;
upgrading the risk class if the data regarding a customer included in the one or
more statements satisfies a preset condition for a paper company;
upgrading the risk class if a customer's account holder name included in the one
or more statements is not a name of the customer or a representative name thereof;
upgrading the risk class if the data regarding a customer included in the one or
more statements at least partially matches the data regarding personnel records;
upgrading the risk class if the data regarding a customer included in the one or
more statements is at least partially inconsistent with the data regarding a customer inquired to a credit rating agency, based on a business registration number of the customer; and
upgrading the risk class if a customer included in the one or more statements is
newly registered in the external device within a preset period of time”. ) Although several factors are listed, the examiner discerns no particular analysis that cannot be performed by a human analyst. All the enumerated considerations appear to be plainly readable information that could be distilled by a human analyst studying transactional data.
Applicant also argues that the claimed invention cannot be practically performed by a human auditor because of the large volumes of data from multiple sources, citing the accompanying Rule 132 Declaration. (Applicant’s Declaration, “it was important to comprehensively review not only statements but also other information in detecting fraud risks. In other words, it is important to comprehensively review customer data and personnel records of the company to be audited and verify various information, e.g., the true nature of the relevant customer (including whether the companies have suspended or closed their business), the identity of the representative of the customer, the relationship among relevant personnels, any discrepancy in the bank account information (e.g., account number, owner) of the customer, and any discrepancy with information from an external credit rating agency.”; “Nevertheless, it was practically impossible without the help of a computer
to verify such important information by reviewing an abundance of data
across various sources, e.g., a large number of statements, customer data,
personnel records, and information from the credit rating agency. “; “if cross-review and verification was performed based on a simple character string comparison without normalization in format/e expression, false positives or negatives would be increased.”; “there was no system to continuously monitor transactions to detect fraud risks.”) The examiner respectfully disagrees.
As Applicant has pointed out, fraud detection has been performed by human analysts examining financial information. (Id. See also the Shaw reference). The claimed methods are not rendered patent eligible by the fact that (using existing machine learning technology) they perform a task previously undertaken by humans with greater speed and efficiency than could previously be achieved. The courts have consistently held, in the context of computer-assisted methods, that such claims are not made patent eligible under § 101 simply because they speed up human activity. See, e.g., Content Extraction, 776 F.3d at 1347; DealerTrack, 674 F.3d at 1333. Whether the issue is raised at step one or step two, the increased speed and efficiency resulting from use of computers (with no improved computer techniques) do not themselves create eligibility. See, e.g., Trinity Info Media, LLC v. Covalent, Inc., 72 F.4th 1355, 1363 (Fed. Cir. 2023) (rejecting argument that “humans could not mentally engage in the ‘same claimed process’ because they could not perform ‘nanosecond comparisons’ and aggregate ‘result values with huge numbers of polls and members’”) (internal citation omitted); Customedia Techs., LLC v. Dish Network Corp., 951 F.3d 1359, 1365 (Fed. Cir. 2020) (holding claims abstract where “[t]he only improvements identified in the specification are generic speed and efficiency improvements inherent in applying the use of a computer to any task”). The Shaw reference also explicitly discloses that an internal company fraudster may have a particular predilection for manipulating a particular customer account. (Shaw, p.11, “The second point is that each embezzler has a pattern of theft that is somewhat unique but discernible to an experienced fraud auditor… a favorite customer supplier or contractor whose account balance gets manipulated… Fraudulent pattern recognition is the unique skill of a … fraud auditor. Current efforts to design audit software to duplicate that unique skill, by way of artificial intelligence, are the best hope we now have…” ). The examiner does not agree that data normalization renders the invention eligible. That is, transactions records of a customer could appear in many formats (e.g. International Business Machines Corp could be recorded as IBM, I.B.M., IBM Corp, etc). Treating these different variations as the same customer for the purpose of an audit would appear to be common sense. Although it may be onerous for an auditor to review many data points, the examiner does not agree that it is beyond human capability. A complex audit could consist of a team of analysts. A fraud trail could also involve an amount of data that a single human could process. Fundamentally, the audit is a mental process. The examiner respectfully suggests that postulating that the process becomes impractical because the amount of data increases or that a computer can process it faster does not make the underlying process any less of an abstract idea. (See, e.g., Trinity Info Media, LLC v. Covalent, Inc., 72 F.4th 1355, 1363 (Fed. Cir. 2023) (rejecting argument that “humans could not mentally engage in the ‘same claimed process’ because they could not perform ‘nanosecond comparisons’ and aggregate ‘result values with huge numbers of polls and members’”)).
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, 3 and 5-7,9-11 are rejected under 35 U.S.C. 101 because the claimed invention is directed to a judicial exception (i.e., a law of nature, a natural phenomenon, or an abstract idea) without significantly more. Regarding independent claims 1,10,11 the claimed invention recites an abstract idea without significantly more. The claims recites the abstract idea of detecting fraud which is a mental process. Other than reciting a transceiver, memory, processor nothing in the claims precludes the steps from being performed mentally. But for the transceiver, memory and processor the limitations on collecting data input within a preset time, applying data to analyzing functions, determining matching pattern, determining risk, generating warning, display warning pattern, repeat on cycle is a process that under its broadest reasonable interpretation could be performed by mentally but for the recitation of generic computer elements. If claim limitations, under the broadest reasonable interpretation, covers performance of the limitation in the mind but for the recitation of generic computer components, then it falls within the “Mental Processes” grouping of abstract ideas. Further the above limitations related to detecting fraud stripped of the identified additional and insignificant elements could also be considered a “Method of Organizing Human Activity” relating to the managing human behavior and interactions (a fundamental economic practice). Thus, the claims recite an abstract idea.
The judicial exception is not integrated into a practical application. The computers are recited at a high-level of generality such that it amounts no more than mere instructions to apply the exception using generic computer components. The additional element(s) does not integrate the abstract idea into a practical application because it does not impose any meaningful limits on practicing the abstract idea. Simply implementing the abstract idea on a generic computer environment is not a practical application of the abstract idea and does not take the claim out of the mental process or method of organizing human activity grouping.
The claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception. As discussed above, with respect to integration of the abstract idea into a practical application, the additional element a transceiver, memory and processor amounts to no more than mere instructions to apply the exception using a generic computer components. Mere instructions to apply an exception using generic computer components cannot provide an inventive conceptCollecting, analyzing and displaying information, and receiving and transmitting over a network are conventional in the computing arts. (MPEP 2106.05h; See also MPEP 2106.05, Alice v. CLS, “. Nearly every computer will include a ‘communications controller’ and ‘data storage unit’ capable of performing the basic calculation, storage, and transmission functions required by the method claims.”).] The claims are not patent eligible.
Regarding the dependent claims, these claims are directed to limitations which serve to limit the fraud detection steps. The subject matter of 3 (detecting modification of data over time), 5 (normalizing data and grouping accounts), 6 (determining non matching credits and debits), 7 (different analyzing functions), 8 (upgrading and downgrading risk), 9 (generate a report) appear to add additional steps to the abstract idea, implemented by generic computers. These claims neither introduce a new abstract idea nor additional limitations which are significantly more than an abstract idea. They provide descriptive details that offer helpful context, but have no impact on statutory subject matter eligibility.
Therefore the limitations on the invention, when viewed individually and in ordered combination are directed to in-eligible subject matter.
Conclusion
Any inquiry concerning this communication or earlier communications from the examiner should be directed to ALLEN C CHEIN whose telephone number is (571)270-7985. The examiner can normally be reached Monday-Friday 8am -5pm.
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/ALLEN C CHEIN/Primary Examiner, Art Unit 3627
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