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 .
Status of Claims
• This action is in reply to the amendments filed on July 14, 2026.
• No claims have been amended.
• Claims 2-3, 13-14, and 20 have been canceled.
• Claims 1, 4-12, and 15-19 are currently pending and have been examined.
• This action is made FINAL.
Response to Arguments
Applicant’s arguments filed July 14, 2026 have been fully considered but they are not persuasive.
The Examiner is withdrawing the 35 USC § 103 rejections. In particular, the Examiner notes the cited art of record does not teach the limitation of determining a mean or median propensity score of a PAN set for multiple merchants each having been assigned to the first MCC.
Applicant’s arguments with respect to 35 USC § 101 have been fully considered and are not persuasive.
Regarding Applicant’s argument on pages 9-10, that the claims are not directed to an abstract idea, the Examiner respectfully disagrees. As indicated in the 35 USC § 101 rejection below, the claimed inventions allows for using a model to determine whether a merchant was misclassified. The Specification at [0003]-[0006] states:
“The acquiring bank may use the MCC to determine interchange fees, the transaction fees paid by the acquiring bank, to cover the cost of risks involved in approving a payment transaction with the merchant. High-risk merchants are typically associated with high-risk industries, which pose a greater risk of chargebacks (e.g., the return of funds to a consumer initiated by an issuing bank), have an elevated fraud risk, and/or are heavily regulated in certain jurisdictions. For example, high-risk merchants may include online casinos, online pharmacies, adult content websites, and the sale of cryptocurrencies. High-risk merchants typically pay a higher interchange rate than lower risk merchants, and acquiring banks identify high-risk merchants based on their assigned MCC… for example a high-risk merchant may provide fraudulent or misleading documentation in order to be assigned to a lower risk MCC for the purpose of eliciting a lower interchange rate…”
The Specification and claims focus on an improvement to the process of mitigating risk and preventing fraud of a merchant misclassifying itself to avoid paying a higher interchange rate, which is a fundamental economic practice and a commercial and legal interaction including sales activities or behaviors which falls within the category of Certain Methods of Organizing Human Activity and therefore is an abstract idea.
Applicant further argues, on pages 9-10, that an MCC is a digital code, and that evaluating an MCC is therefore not a commercial or legal interaction. The Examiner respectfully disagrees. In response to this argument, the Examiner notes that an MCC is a merchant classification code that describes the types of goods/services a merchant offers, and therefore evaluation of whether the code is accurately describing a merchant is part of the abstract idea of determining whether a merchant was misclassified.
Regarding Applicant’s arguments on pages 10-13, that the claims integrate a practical application, the Examiner respectfully disagrees. Under the Patent Subject Matter Eligibility analysis, Step 2A, prong two, integration into a practical application requires an additional element(s) or a combination of additional elements in the claim to apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the exception. Limitations that are not indicative of integration into a practical application are those that are mere instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea.-see MPEP 2106.05(f). Here, the claims recite a computer-implemented method; a computer device comprising: at least one processor; and at least one memory in communication with the at least one processor, the at least one memory; a non-transitory computer-readable storage medium that includes computer-executable instructions executable by at least one processor; a machine learning tool; a computer device including at least one processor such that they amount to no more than mere instructions to apply the exception using generic computer components (see MPEP 2106.05(f)).
Furthermore, and in response to Applicant’s arguments on page 12 that the claims improve technology, in determining whether a claim integrates a judicial exception into a practical application, a determination is made of whether the claimed invention pertains to an improvement in the functioning of the computer itself or any other technology or technical field (i.e., a technological solution to a technological problem). Here, the claims recite generic computer components, i.e., a generic processor, a memory storing a computer program executable by the processor to perform the claimed method steps and system functions. The processor, memory and system are recited at a high level of generality and are recited as performing generic computer functions customarily used in computer applications.
Furthermore, the Specification describes a problem and improvement to a business or commercial process at least at [0003]-[0006], describing an improvement to the process of mitigating risk and preventing fraud of a merchant misclassifying itself to avoid paying a higher interchange rate, and stating:
“The acquiring bank may use the MCC to determine interchange fees, the transaction fees paid by the acquiring bank, to cover the cost of risks involved in approving a payment transaction with the merchant. High-risk merchants are typically associated with high-risk industries, which pose a greater risk of chargebacks (e.g., the return of funds to a consumer initiated by an issuing bank), have an elevated fraud risk, and/or are heavily regulated in certain jurisdictions. For example, high-risk merchants may include online casinos, online pharmacies, adult content websites, and the sale of cryptocurrencies. High-risk merchants typically pay a higher interchange rate than lower risk merchants, and acquiring banks identify high-risk merchants based on their assigned MCC… for example a high-risk merchant may provide fraudulent or misleading documentation in order to be assigned to a lower risk MCC for the purpose of eliciting a lower interchange rate…”
Regarding Applicant’s arguments on pages 9-12, that the claims imposing meaningful limits on the abstract idea and are more than a drafting effort designed to monopolize a method of organizing human activity, the argument has been considered and is not persuasive. In response to this argument, it is noted, “While preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015). The instant application is reviewed within the framework of the Revised Guidance which specifies and particularizes the Mayo/Alice framework.
Regarding Applicant’s arguments on pages 13-15, that the claims are directed to significantly more than the abstract idea and that the claims recite more than well-understood, routine, or conventional activities, the Examiner respectfully disagrees. The limitations are directed to an abstract idea and when determining if the claims are directed to significantly more, the additional limitations of the claims in addition to the abstract idea are analyzed. In the instant application, the additional elements of the claim include a computer-implemented method; a computer device comprising: at least one processor; and at least one memory in communication with the at least one processor, the at least one memory; a non-transitory computer-readable storage medium that includes computer-executable instructions executable by at least one processor; a machine learning tool; a computer device including at least one processor. The additional limitations, when considered both individually and in combination, do not affect an improvement to another technology or technological field; the claims do not amount to an improvement to the functioning of the computer itself; and the claims do not move beyond a general link of use of an abstract idea to a particular technological environment. Therefore, the claims merely amount to the application or instructions to apply the abstract idea using a computer, and is considered to amount to nothing more than requiring a generic computer merely to carry out the abstract idea itself. The specifics about the abstract idea do not overcome the rejection.
Applicant’s reliance upon claim 3 of Example 47, on page 14, is misplaced. As an initial matter, with respect to USPTO Examples, the Examiner analyzes the claims under the two part framework under Alice/Mayo. The Examples provided in Office Guidance are hypothetical and intended to be illustrative only. While some of the fact patterns in the examples draw from U.S. Supreme Court and U.S. Court of Appeals for the Federal Circuit decisions, the examples do not carry the weight of court decisions. Claim 3 in hypothetical Example 47 were found to be eligible because the claim reflected an improvement “in the technical field of network intrusion. detection. Steps (d)-(f) provide for improved network security using the information from the detection to enhance security by taking proactive measures to remediate the danger by detecting the source address associated with the potentially malicious packets. Specifically, the claim reflects the improvement in step (d), dropping potentially malicious packets in step (e), and blocking future traffic from the source address in step (f). Turning to the instant application, the claims are not addressing a problem technical in nature, but are an improvement to a business process i.e., the process of mitigating risk and preventing fraud of a merchant misclassifying itself to avoid paying a higher interchange rate. The Examiner finds no parallel between the Applicant’s claims and the hypothetical, patent-eligible claim 3 described in Example 47.
The claims are not patent eligible.
For the reasons above, Applicant’s arguments are not persuasive.
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, 4-12, and 15-19 are rejected under 35 U.S.C. 101 because the claimed invention recites an abstract idea without significantly more. Independent claims 1, 12, and 19 are directed to a method (claim 1), an apparatus (claims 12 and 19). Therefore, on its face, each independent claim 1, 12, and 19 are directed to a statutory category of invention under Step 1 of the Patent Subject Matter Eligibility analysis (see MPEP 2106.03).
Under Step 2A, Prong One of the Patent Subject Matter Eligibility analysis (see MPEP 2106.04), claims 1, 12, and 19 recite, in part, a system, a method, and an apparatus of organizing human activity. Using the limitations in claim 1 to illustrate, the claim recites using a tool for identifying and correcting a misclassified merchant category code (MCC) included within a request message, the method implemented using, the method comprising: storing a first propensity model that is trained with multiple account identifiers, including a personal account number (PAN), used to initiate multiple purchase transactions with multiple merchants each having been assigned to a first MCC; determining a mean or median propensity score of a PAN set for multiple merchants each having been assigned to the first MCC; inputting, into the first propensity model, an account identifier used to initiate a purchase transaction with a candidate merchant assigned to the first MCC and the determined mean or median propensity, wherein the candidate merchant is possibly being mis-assigned to a wrong MCC; outputting from the first propensity model a first score based on the inputted account identifier; comparing the outputted score to a threshold value; and based on the comparison to the threshold value, determining that the candidate merchant was mis-assigned to the first MCC; determining a correct MCC that more accurately classifies the candidate merchant than the first MCC: and automatically replacing the first MCC with the correct MCC for subsequent purchase transactions. The Specification at [0003]-[0006] states:
“The acquiring bank may use the MCC to determine interchange fees, the transaction fees paid by the acquiring bank, to cover the cost of risks involved in approving a payment transaction with the merchant. High-risk merchants are typically associated with high-risk industries, which pose a greater risk of chargebacks (e.g., the return of funds to a consumer initiated by an issuing bank), have an elevated fraud risk, and/or are heavily regulated in certain jurisdictions. For example, high-risk merchants may include online casinos, online pharmacies, adult content websites, and the sale of cryptocurrencies. High-risk merchants typically pay a higher interchange rate than lower risk merchants, and acquiring banks identify high-risk merchants based on their assigned MCC… for example a high-risk merchant may provide fraudulent or misleading documentation in order to be assigned to a lower risk MCC for the purpose of eliciting a lower interchange rate…”
The limitations, as drafted, is a process that, under its broadest reasonable interpretation, covers fundamental economic principles or practices and commercial and legal interactions (certain methods of organizing human activity), but for the recitation of generic computer components. The claims as a whole recite a method of organizing human activity. The claimed inventions allows for using a model to determine whether a merchant was misclassified, which is a fundamental economic principle or practice of mitigating risk and a commercial and legal interaction including sales activities or behaviors. The mere nominal recitation of a computer device including at least one processor, do not take the claim out of the methods of organizing human activity grouping. Thus, the claims recite an abstract idea.
Under Step 2A, Prong Two of the Patent Subject Matter Eligibility analysis (see MPEP 2106.04), the judicial exception is not integrated into a practical application. In particular, the additional elements of a computer-implemented method; a computer device comprising: at least one processor; and at least one memory in communication with the at least one processor, the at least one memory; a non-transitory computer-readable storage medium that includes computer-executable instructions executable by at least one processor; a machine learning tool; a computer device including at least one processor are recited at a high-level of generality (i.e., as a generic processor performing a generic computer function of storing a model, inputting data into the model, outputting a score, comparing the score to a threshold value and determine whether a merchant was mis-assigned to an original MCC) such that they amount to no more than mere instructions to apply the exception using a generic computer components (see MPEP 2106.05(f)).
Accordingly, the combination of the 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 to an abstract idea.
Under Step 2B of the Patent Subject Matter Eligibility analysis (see MPEP 2106.05), the claim(s) does/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 elements in the claims amount to no more than mere instructions to apply the exception using generic computer components. Mere instructions to apply an exception using generic computer components cannot provide an inventive concept.
The claims are not patent eligible.
The dependent claims have been given the full two part analysis including analyzing the additional limitations both individually and in combination. The dependent claim(s) when analyzed both individually and in combination are also held to be patent ineligible under 35 U.S.C. 101 because for the same reasoning as above and the additional recited limitation(s) fail(s) to establish that the claim(s) is/are not directed to an abstract idea. Dependent claims 4-11 and 15-18 simply help to define the abstract idea. The additional limitations of the dependent claim(s) when considered individually and as an ordered combination do not amount to significantly more than the abstract idea.
Viewing the claim limitations as an ordered combination does not add anything further than looking at the claim limitations individually. When viewed either individually, or as an ordered combination, the additional limitations do not amount to a claim as a whole that is significantly more than the abstract idea. Accordingly, claims 1, 4-12, and 15-19 are ineligible.
Conclusion
The prior art made of record and not relied upon is considered pertinent to applicant's disclosure.
US 20230060331 A1 (“Kraus”) discloses receive a request for processing a transaction; identify a merchant-specific identifier for a merchant associated with the transaction; determine, in real-time and using a machine trained model, whether the merchant-specific identifier is a valid merchant-specific identifier or not; and process the transaction based on whether the machine trained model indicates that the merchant-specific identifier is valid or not.
US 20230079865 A1 (“Rolfs”) discloses identifying merchant category code misclassifications includes at least one processor in communication with a transaction database and a merchant database. The transaction database stores transaction records by a plurality of account holders. The processor generates a first MCC profile including at least one transaction characteristic representative of merchants properly classified as the first MCC and comparing the first MCC profile to a second set of transaction records. If the comparison satisfies a comparison threshold for the first MCC the processor identifies the corresponding selected merchant as being MCC misclassified.
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.
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/RAVEN E YONO/Primary Examiner, Art Unit 3694
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