DETAILED ACTION
Status of Claims
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
This action is in reply to the amendment filed on 08/11/2026.
Claims 1, 7, and 16 have been amended.
Claims 1-20 are currently pending and have been examined.
Response to Arguments
Applicant’s arguments, see pages 3-4, filed 08/11/2026, with respect to claims 1-20 rejected under 35 USC 103 have been fully considered and are persuasive. The 103 rejection of claims 1-20 has been withdrawn.
Applicant's arguments filed 08/11/2026 with respect the 101 SME rejection have been fully considered but they are not persuasive.
With respect to 101, Applicant argues #1:
Claims 1-20 were rejected under 35 U.S.C. § 101 as allegedly being directed to non- statutory subject matter. A primafacie case of abstractness for a § 101 rejection cannot be maintained in light of the presently amended claims, USPTO Guidance, and Supreme Court precedent. Applicant submits that the present claims do not recite an abstract idea, and to the extent that any abstract ideas that were identified in the Office Action might apply to the present claims, that the present claims recite additional elements that integrate the exception into a practical application of that exception.
The present claims are patent-eligible as being similar to those held eligible in DDR Holdings, LLC v. Hotels.com, 773 F.3d 1245 (Fed. Cir. 2014). In DDR Holdings, the Federal Circuit held claims patent-eligible where the claimed solution was "necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks." The instant claims satisfy this standard. The problem addressed of static transaction limits that cannot be dynamically adjusted at transaction speed without human intervention arises specifically in computerized real-time payment networks. This is not a problem that exists outside of computer technology, and it is not a problem that can be solved outside of computer technology. The solution recited in the claims is likewise necessarily rooted in computer technology: a server retrieves a historical transaction record from memory that represents prior transactions between the user device and the merchant device, applies a trained machine learning model to that record to generate a trust score, compares the trust score against a dynamically adjusted threshold, and automatically approves an increase to an individualized transaction limit. None of these steps can be performed mentally or manually at transaction speed.
Examiners response:
The Examiner respectfully disagrees, as shown in the 101 rejection, the claims recite several abstract steps which falls within the commercial or legal interactions (including sales activities or behaviors; business relations) for processing transaction data associated with the user device and merchant device for a transaction between a user and merchant to adjust the transaction limit and permit the transaction. With respect to DDR, the claims here are not like those the Court found patent eligible in DDR, in which the inventive concept was in the modification of conventional mechanics behind website display to produce a dual-source integrated hybrid display because applicant’s claims here do not address problems unique to the Internet or require an arguably inventive device or technique for displaying information, rather the claims are addressing the business problem of approving an increase to transaction limit. With regards to the to the argument that the claims cannot be performed mentally, as an initial matter, just because an idea cannot be performed with a pen and paper or in the human mind does not mean it' s not directed towards an abstract idea and the Examiner did not rely on grouping the claims into the Mental Processes grouping of abstract ideas for the analysis. Furthermore Examiners are directed to continue to use the Mayo Alice framework (as laid out in MPEP 2106 which incorporates Steps 2A and Step 2B of the 2019 PEG) as guidance in evaluating subject matter eligibility, which the Examiner has properly applied. With respect to the argument that the claims cannot be performed manually at transaction speed, the Federal Circuit has also indicated that mere automation of manual processes or increasing the speed of a process where these purported improvements come solely from the capabilities of a general-purpose computer are not sufficient to show an improvement in computer-functionality. FairWarning IP, LLC v. Iatric Sys., 839 F.3d 1089, 1095, 120 USPQ2d 1293, 1296 (Fed. Cir. 2016); Credit Acceptance Corp. v. Westlake Services, 859 F.3d 1044, 1055, 123 USPQ2d 1100, 1108-09 (Fed. Cir. 2017). Similarly, the Federal Circuit has indicated that a claim must include more than conventional implementation on generic components or machinery to qualify as an improvement to an existing technology (see MPEP 2106.04(a)). Therefore this argument is not persuasive.
With respect to 101, Applicant argues #2:
Unlike the claims found ineligible in Alice, the present claims do not merely recite "apply it" with generic computer components. The claims require a specific, technical implementation: a trained machine learning model operating on a retrieved historical transaction record representing the bilateral relationship between a specific user device and a specific merchant device, producing a trust score that is evaluated against a threshold that itself varies based on that bilateral transaction history. This is precisely the type of solution the Federal Circuit found eligible in DDR Holdings, namely one that is not merely the performance of an abstract idea on a generic computer, but rather a specific technical solution to a problem that arises specifically in computerized networks.
Further, the claims recite a practical application because they solve a specific, real-world technical problem in computerized payment networks. For example, the claims recite how to automatically approve a transaction that exceeds a static limit, while maintaining fraud protection through device-specific trust analysis. The claims do not merely identify a trust score in the abstract, they retrieve a specific historical transaction record from memory, apply a trained machine learning model to that record to generate a trust score, and use that score to automatically approve an increase to an individualized transaction limit sufficient to permit a specific transaction to occur. This is not an abstract risk calculation but is instead a specific, automated, technical process that produces a concrete, real-world result: a transaction that would otherwise be declined is permitted to occur, based on a machine-generated trust determination rooted in the specific bilateral transaction history between two identified devices.
Accordingly, the present claims are not directed to any form of the alleged abstract idea; and the recitations of the claims as a whole are directed to a practical application. For at least the reasons given above, the Office Action has failed to establish either part of the Alice test. Applicant therefore requests reconsideration and withdrawal of the proffered 35 U.S.C. § 101 rejection of claims 1-20.
Examiners response:
The Examiner respectfully disagrees, for the same reasons as discussed above with respect to DDR, the argument is not persuasive. With respect to using machine learning, this is akin to using a generic machine learning technique in a particular environment, with no inventive concept, as opposed to disclosing “a specific implementation of a solution to a problem in the software arts,” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1339 (Fed. Cir. 2016), or “a specific means or method that solves a problem in an existing technological process,” Koninklijke, 942 F.3d at 1150, the use of AI in the instant application does not provide an inventive concept or significantly more. The only thing the claims disclose about the use of machine learning is that machine learning is used in a new environment, which has been found by the Courts to be ineligible (see Recentive Analytics, Inc. v. Fox Corp., Case No. 2023-2437 (Fed. Cir. Apr. 18, 2025). Additionally the claims do address a technical problem, as analyzing data about the devices used to automatically determine a transaction limit is describing a business problem, the computer still operates according to its known and standard capabilities. Furthermore, the Federal Circuit has also indicated that mere automation of manual processes or increasing the speed of a process where these purported improvements come solely from the capabilities of a general-purpose computer are not sufficient to show an improvement in computer-functionality. FairWarning IP, LLC v. Iatric Sys., 839 F.3d 1089, 1095, 120 USPQ2d 1293, 1296 (Fed. Cir. 2016); Credit Acceptance Corp. v. Westlake Services, 859 F.3d 1044, 1055, 123 USPQ2d 1100, 1108-09 (Fed. Cir. 2017). Similarly, the Federal Circuit has indicated that a claim must include more than conventional implementation on generic components or machinery to qualify as an improvement to an existing technology (see MPEP 2106.04(a)). Here the computer is merely being invoked as tool for performing the abstract process, and generally linking it to the computer environment. Mere instructions to apply the judicial exception using generic computer components and limiting the judicial exception to a particular environment are not indicative of a practical application (see MPEP 20106.05(f) and MPEP 20106.05(h)) Therefore this argument is not persuasive.
For the reasons above, the 101 rejection of claims 1-20 is hereby maintained.
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, and fails step 2 of the analysis because the focus of the claims is not on the devices themselves or a practical application but rather directed towards an abstract idea, the analysis is provided below.
Step 1 (Statutory Categories) - The claims pass step 1 of the subject matter eligibility test (see MPEP 2106(III)) as the claims are directed towards 3 related methods.
Step 2A – Prong One (Do the claims recite an abstract idea?)
Claim 1 recites an idea, in part, by:
receiving data obtained in response to a QR code being scanned by the user device at a merchant device;
processing the data to identify an account associated with the user device and a transaction initiated at the merchant device corresponding to the account;
retrieving a historical transaction record corresponding to the account associated with the user device, the historical transaction record representative of prior transactions performed using the account between the user device and the merchant device;
determining whether a current total amount corresponding to the transaction exceeds an individualized transaction limit;
in response to determining that the current total amount exceeds the individualized transaction limit, determining a trust score for the transaction using a trained machine learning model based on the historical transactions records between the user device and the merchant device;
in response to determining that the trust score exceeds a threshold, approving an increase to the individualized transaction limit for the transaction initiated at the merchant device, the increase to the individualized transaction limit being sufficient to permit the transaction to occur with the merchant device, wherein the threshold for approving the increase is lower when the user device has previously transacted with the merchant device than when the merchant device is new to transacting with the user device as identified in the historical transaction record; and
outputting an indication to the merchant to permit the transaction to occur.
While varying in scope, claim 7 recites a similar idea, in part, by:
receiving data obtained in response to a QR code being scanned by the user device at a merchant device;
processing the data to identify an account associated with the user device and a transaction initiated at the merchant device corresponding to the account;
retrieving a historical transaction record corresponding to the account associated with the user device, the historical transaction record representative of prior transactions performed using the account between the user device and the merchant device;
determining whether a current total amount corresponding to the transaction exceeds an individualized transaction limit;
in response to determining that the current total amount exceeds the individualized transaction limit, determining, using a trained machine learning model, a security metric of the merchant device based the historical transaction record between the merchant device and the user device;
in response to determining that the security metric exceeds a threshold, approving an increase to the individualized transaction limit for the transaction initiated at the merchant device, the increase to the individualized transaction limit being sufficient to permit the transaction to occur with the merchant device, wherein the threshold for approving the increase is lower when the user device has previously transacted with the merchant device than when the merchant device is new to transacting with the user device as identified in the historical transaction record; and
outputting an indication to the merchant permit the transaction to occur.
While varying in scope, claim 16 recites a similar idea, in part, by:
receiving data obtained from a near-field communication (NFC) between the user device at a merchant device;
processing the data to identify an account associated with the user device and a transaction initiated at the merchant device corresponding to the account;
retrieving a historical transaction record corresponding to the account associated with the user device, the historical transaction record representative of prior transactions performed using the account between the user device and the merchant device;
determining whether a current total amount corresponding to the transaction exceeds an individualized transaction limit;
in response to determining that the current total amount exceeds the individualized transaction limit, determining, using a trained machine learning model, a security metric of the merchant device based on the historical transaction record between the merchant device and the user device;
in response to determining that the security metric exceeds a threshold, approving an increase to the individualized transaction limit for the transaction initiated at the merchant device, the increase to the individualized transaction limit being sufficient to permit the transaction to occur with the merchant device, wherein the threshold for approving the increase is lower when the user device has previously transacted with the merchant device than when the merchant device is new to transacting with the user device as identified in the historical transaction record; and
outputting an indication to the merchant to permit the transaction to occur.
The steps recited above under Step 2A Prong One of the analysis under the broadest reasonable interpretation covers commercial or legal interactions (including sales activities or behaviors; business relations) but for the recitation of generic computer components. That is other than reciting a server, a user device, and a merchant device nothing in the claim elements are directed towards anything other than commercial or legal interactions for processing transaction data associated with the user device and merchant device for a transaction between a user and merchant to adjust the transaction limit and permit the transaction. If a claim limitation, under its broadest reasonable interpretation, covers commercial or legal interactions, then it falls within the “Certain Methods of Organizing Human Activities” groupings of abstract ideas. Accordingly, the claims recite an abstract idea.
Step 2A – Prong Two (Does the claim recite additional elements that integrate the judicial exception into a practical application?) - This judicial exception is not integrated into a practical application. In particular, the claims only recite the additional elements of a server, a user device, memory, and a merchant device. The server, user device, and merchant device are recited at a high level of generality such that it amounts to no more than mere instructions to apply the exception using generic computer components and limits the judicial exception to the mobile computing environment, as the server, merchant device and user device could all be considered generic computer components given broadest reasonable interpretation and given the description in the specification, see fig. 7, [0013-0014], and [0045]. Mere instructions to apply the judicial exception using generic computer components and limiting the judicial exception to a particular environment are not indicative of a practical application (see MPEP 20106.05(f) and MPEP 20106.05(h)). With respect to the machine learning, in view of the new July 2024 Subject Matter Eligibility Examples, which provides additional guidance on Patent Subject Matter Eligibility, including artificial intelligence, the Examiner finds the claims ineligible. Similar to Claim 2 of Example 47 in the July 2024 Subject Matter Eligibility Examples, the model and training are recited at high level of generality such that it amounts to using a generic computer to perform generic computer functions, akin to using a computer to perform repetitive calculations (See MPEP 2106.05(d)), and therefore amounts to no more than mere instructions to apply the exception using a generic computer (See MPEP 2106.05(f)). Accordingly, these additional elements do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea. The claims are directed towards an abstract idea.
Step 2B (Does the claim recite additional elements that amount to significantly more than the judicial exception?) - The claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception because, as discussed above, with respect to integration of the abstract idea into a practical application, using the additional elements of the server, user device, memory and merchant device to perform the steps recited in Step 2A Prong One of the analysis amounts to no more than mere instructions to apply the exception using generic computer components and limits the judicial exception to the particular environment. Mere instructions to apply an exception using generic computer components and limiting the judicial exception to a particular environment does not provide an inventive concept. The additional elements have been considered separately, and as an ordered combination, and do not add significantly more (also known as an “inventive concept”) to the judicial exception. Further, MPEP 2106.05(d)(ii) provides that receiving and transmitting data over a network (see buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355, 112 USPQ2d 1093, 1096 (Fed. Cir. 2014) (computer receives and sends information over a network), Performing repetitive calculations, Flook, 437 U.S. at 594, 198 USPQ2d at 199 (recomputing or readjusting alarm limit values); Bancorp Services v. Sun Life, 687 F.3d 1266, 1278, 103 USPQ2d 1425, 1433 (Fed. Cir. 2012) ("The computer required by some of Bancorp’s claims is employed only for its most basic function, the performance of repetitive calculations, and as such does not impose meaningful limits on the scope of those claims."), Storing and retrieving information in memory, Versata Dev. Group, Inc. v. SAP Am., Inc., 793 F.3d 1306, 1334, 115 USPQ2d 1681, 1701 (Fed. Cir. 2015); OIP Techs., 788 F.3d at 1363, 115 USPQ2d at 1092-93; and Electronic recordkeeping, Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208, 224-26, 110 USPQ2d 1984-1985 (2014) (creating and maintaining "shadow accounts", see also "create electronic records, track multiple transactions, and issue simultaneous instructions"); are well-understood routine and conventional, similar to the instant application claims which recites, retrieving data from memory, sending and receiving data over network for processing transaction data associated with the user device and merchant device for a transaction between a user and merchant to adjust the transaction limit and permit the transaction. The claims are not patent eligible.
The dependent claims have been given the full analysis including analyzing the additional limitations both individually and in combination as a whole. For instance, claims 2-6, 8-15, and 17-20 are all steps that fall within the “Certain Methods of Organizing Human Activities” groupings of abstract ideas further limiting the abstract idea and/or generally linking the use of the judicial exemption to a particular technical computing environment. The Dependent claims when analyzed both individually and in combination are also held to be patent ineligible under 35 U.S.C. 101 for the same reasoning as above and the additional recited limitations fail to establish that the claims are not directed to an abstract idea. The additional limitations of the dependent claims when considered individually and as an ordered combination do not amount to significantly more than the abstract idea.
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.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to GREGORY S CUNNINGHAM II whose telephone number is (313)446-6564. The examiner can normally be reached Mon-Fri 8:30am-4pm.
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GREGORY S. CUNNINGHAM II
Primary Examiner
Art Unit 3694
/GREGORY S CUNNINGHAM II/ Primary Examiner, Art Unit 3694
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