DETAILED ACTION
Status of Claims
1. This office action is in response to amendment filed 6/22/2026.
2. Claims 1-3, 5-21 are pending.
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 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, 5-21
Claims 1-3, 5-21 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.
Step 1: Claims 1-7, 21 are directed to a system; claims 8-14 are directed to a method; claims 15-20 are directed to a non-transitory computer-readable medium – each of which is one of the statutory categories of inventions.
Step 2A: A claim is eligible at revised Step 2A unless it recites a judicial exception and the exception is not integrated into a practical application of the application.
Prong 1: Prong One of Step 2A evaluates whether the claim recites a judicial exception (an abstract idea enumerated in the 2019 PEG, a law of nature, or a natural phenomenon).
Groupings of Abstract Ideas:
I. MATHEMATICAL CONCEPTS
A. Mathematical Relationships
B. Mathematical Formulas or Equations
C. Mathematical Calculations
II. CERTAIN METHODS OF ORGANIZING HUMAN ACTIVITY
A. Fundamental Economic Practices or Principles (including hedging, insurance, mitigating risk)
B. Commercial or Legal Interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations)
C. Managing Personal Behavior or Relationships or Interactions between People (including social activities, teaching, and following rules or instructions)
III. MENTAL PROCESSES.
Concepts performed in the human mind (including an observation, evaluation, judgment, opinion).
See MPEP 2106.04 (a) (2) Abstract Idea Groupings [R-10.2019]
The limitations recited in the independent claims 1, 8 and 15 –
[establish a wireless communication session with a second client device];
receive an encrypted payload from the [second client device through the wireless communication session], the encrypted payload comprising a sub-payment token, the sub-payment token comprising a sub-payment key and a sub application transaction counter (sub-ATC) for the sub-payment key, the sub-payment key being linked to a payment key stored on the second client device and the sub-ATC being configured to increment a value after a transaction is completed;
provide the encrypted payload to the [payment application executed on the secure element of the first client device], the payment application decrypting the encrypted payload using a cryptographic key to provide access to the sub-payment token; and
execute a payment with a [point of sale terminal] by using the sub-payment token, the sub-ATC of the sub-payment token being provided to the [point of sale terminal] and being used to enforce a quantity of transactions performed by the first client device by at least determining that the value of the sub-ATC counters is within an ATC range associated with the sub-payment key
– fall under the abstract idea of Certain Methods of Human Activity.
Examiner notes that enforcing restrictions on the number of transactions entered into by a user is nothing more than a financial or budgetary restraint on commerce and hence falls under the Commercial/Legal Interactions category of abstract ideas. See MPEP II. CERTAIN METHODS OF ORGANIZING HUMAN ACTIVITY (“An example of a claim reciting managing personal behavior is Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 115 USPQ2d 1636 (Fed. Cir. 2015). The patentee in this case claimed methods comprising storing user-selected pre-set limits on spending in a database, and when one of the limits is reached, communicating a notification to the user via a device. 792 F.3d. at 1367, 115 USPQ2d at 1639-40. The Federal Circuit determined that the claims were directed to the abstract idea of “tracking financial transactions to determine whether they exceed a pre-set spending limit (i.e., budgeting)”, which “is not meaningfully different from the ideas found to be abstract in other cases before the Supreme Court and our court involving methods of organizing human activity.” 792 F.3d. at 1367-68, 115 USPQ2d at 1640.”)
The dependent claims merely limit the abstract idea to – providing counter and sub-payment token to payment terminal; comparing the quantity of transactions for the sub-AT to an ATC range for authorizing the payment – that also constitute Certain Methods of Human Activity.
Hence under Prong One of Step 2A, the claims are directed to a judicial exception.
Prong 2: Prong Two of Step 2A evaluates whether the claim recites additional elements that integrate the judicial exception into a practical application of the exception.
Limitations that are indicative of integration into a practical application include:
Improvements to the functioning of a computer or to any other technology or technical field – see MPEP § 2106.05(a)
Applying the judicial exception with, or by use of, a particular machine –see MPEP § 2106.05(b)
Effecting a transformation or reduction of a particular article to a different state or thing – see MPEP § 2106.05(c)
Applying or using the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception – see MPEP §2106.05(e)
Limitations that are not indicative of integration into a practical application include:
Adding the words “apply it” (or an equivalent) with the judicial exception, or 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)
Adding insignificant extra-solution activity to the judicial exception – see MPEP § 2106.05(g)
Generally linking the use of the judicial exception to a particular technological environment or field of use – see MPEP § 2106.05(h)
Additional element(s) recited in the claims, beyond the abstract idea, include: first client device comprising a processor, a memory, a secure element comprising an application; second client device; encrypted payload; decrypting the encrypted payload using a cryptographic key; sub-payment token comprising a sub-payment key linked to a payment key and a sub application transaction counter (sub-ATC) for the sub-payment key; wireless communication session; near field communication; quick response code payment; restricted application component; and non-transitory computer-readable medium.
MPEP 2106.05(f) Mere Instructions To Apply An Exception [R-10.2019]:
(1) Whether the claim recites only the idea of a solution or outcome i.e., the claim fails to recite details of how a solution to a problem is accomplished. The recitation of claim limitations that attempt to cover any solution to an identified problem with no restriction on how the result is accomplished and no description of the mechanism for accomplishing the result, does not integrate a judicial exception into a practical application or provide significantly more because this type of recitation is equivalent to the words “apply it”. See Electric Power Group, LLC v. Alstom, S.A., 830 F.3d 1350, 1356, 119 USPQ2d 1739, 1743-44 (Fed. Cir. 2016); Intellectual Ventures I v. Symantec, 838 F.3d 1307, 1327, 120 USPQ2d 1353, 1366 (Fed. Cir. 2016); Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1348, 115 USPQ2d 1414, 1417 (Fed. Cir. 2015). In contrast, claiming a particular solution to a problem or a particular way to achieve a desired outcome may integrate the judicial exception into a practical application or provide significantly more. See Electric Power, 830 F.3d at 1356, 119 USPQ2d at 1743.
By way of example, in Intellectual Ventures I v. Capital One Fin. Corp., 850 F.3d 1332, 121 USPQ2d 1940 (Fed. Cir. 2017), the steps in the claims described “the creation of a dynamic document based upon ‘management record types’ and ‘primary record types.’” 850 F.3d at 1339-40; 121 USPQ2d at 1945-46. The claims were found to be directed to the abstract idea of "collecting, displaying, and manipulating data." 850 F.3d at 1340; 121 USPQ2d at 1946. In addition to the abstract idea, the claims also recited the additional element of modifying the underlying XML document in response to modifications made in the dynamic document. 850 F.3d at 1342; 121 USPQ2d at 1947-48. Although the claims purported to modify the underlying XML document in response to modifications made in the dynamic document, nothing in the claims indicated what specific steps were undertaken other than merely using the abstract idea in the context of XML documents. The court thus held the claims ineligible, because the additional limitations provided only a result-oriented solution and lacked details as to how the computer performed the modifications, which was equivalent to the words “apply it”. 850 F.3d at 1341-42; 121 USPQ2d at 1947-48 (citing Electric Power Group., 830 F.3d at 1356, 1356, USPQ2d at 1743-44 (cautioning against claims “so result focused, so functional, as to effectively cover any solution to an identified problem”)).
Here, the limitation “execute a payment with a point of sale terminal by using the sub-payment token, the sub-ATC of the sub-payment token being provided to the point of sale terminal and being used to enforce a quantity of transactions performed by the first client device by at least determining that the value of the sub-ATC counters is within an ATC range associated with the sub-payment key” (claims 1, 8, 15) has been recited in a result-oriented manner that lacks details on how sub-ATC is used to “enforce a quantity of transactions performed by the first client device by at least determining that the value of the sub-ATC counters is within an ATC range associated with the sub-payment key” – which, therefore, is essentially equivalent to “apply it. All purported inventive concepts reside in how the “enforce … determining that the value of the sub-ATC counters is within an ATC range …” is technically accomplished and not in how the processing technologically achieves the result which the specification does not elaborate.
Examiner finds that the additional elements have been recited at a high level of generality such that the claim limitations amount to no more than mere instructions to apply the exception using generic components (see MPEP 2106.05(f)) or data gathering activities (see MPEP 2106.05(g)).
The combination of additional elements – establish, receive, provide, execute – does not purport to improve the functioning of a computer or effect an improvement in any other technology or technical field. Instead, the additional elements do no more than use the computer as a tool to perform an abstract idea and/or link the use of the judicial exception to a particular technological environment or field of use. The focus of the claims is not on improvement in computers, but on certain independently abstract ideas – receive a payload linked to a payment key, provide the payload to a payment application, and execute a payment using the sub-payment token and sub-ATC used to enforce a quantity of transactions – that merely uses a mobile device as a tool. Steps that do no more than spell out what it means to “apply it on a computer” cannot confer patent eligibility.
Hence, under Prong Two of Step 2A, the additional elements individually or in combination, do not integrate the judicial exception into a practical application.
Step 2B:
In Step 2B, the evaluation consists of whether the claim recites additional elements that amount to an inventive concept (aka “significantly more”) than the recited judicial exception.
As discussed in Prong Two, the additional elements in the claims amount to no more than mere instructions to apply the exception using generic computer components. When considered individually or as an ordered combination, the additional elements fail to transform the abstract idea of – receive a payload linked to a payment key, provide the payload to a payment application, and execute a payment using the sub-payment token and sub-ATC used to enforce a quantity of transactions – into significantly more.
See MPEP 2106.05(f) Mere Instructions To Apply An Exception [R-10.2019].
(2) Whether the claim invokes computers or other machinery merely as a tool to perform an existing process. Use of a computer or other machinery in its ordinary capacity for economic or other tasks (e.g., to receive, store, or transmit data) or simply adding a general purpose computer or computer components after the fact to an abstract idea (e.g., a fundamental economic practice or mathematical equation) does not integrate a judicial exception into a practical application or provide significantly more.
Hence, the claims are ineligible under Step 2B.
Therefore, the claim(s) are rejected under 35 U.S.C. 101 as being directed to a judicial exception without significantly more.
Response to Arguments
Applicant's arguments filed 6/22/2026 have been fully considered but they are not persuasive.
101
Applicant asserts that the claims 1-3 and 5-21 do not recite a judicial exception and that the language of the claims is fundamentally technical and non-abstract.
Examiner finds this unpersuasive because, as explained in Prong 1, enforcing the number of transactions at a at a point-of-sale terminal is nothing more than a financial or budgetary restriction on commerce. Examiner also points out that, a) enforcing quantity of the transactions is not a technical operation, and b) the claims do not describe any technical details on how the combination of the payment key and sub-payment key enforce quantity of transactions.
Contrary to the Applicant’s assertion, para [0039] of the specification fail to point to a technical problem or a technical solution. On the contrary, the fact that, upon receiving a transaction request, the issuer can decline the transaction after reviewing that the sub-ATC is beyond the ATC range for the sub-payment key 123, strongly indicates that the problem and the solution described fall in the abstract realm of Commercial/Legal Interactions as opposed to improving computers or technology. Examiner notes that “determining that the value of the sub-ATC counter is withing an ATC range” is a Certain Method of Organizing Human Activity. In other words, the claims describe abstract idea(s) and technical improvements.
The claimed steps do not explain the technical means by which such restriction on quantity of transaction is enforced. It is not clear from the claims how sub-ATC can enforce transactions on a second client device. Rather, the limitation – “execute a payment with a point of sale terminal by using the sub-payment token, the sub-ATC of the sub-payment token being provided to the point of sale terminal and being used to enforce a quantity of transactions performed by the first client device independent of a plurality of transactions performed using the payment key on the second client device” – has been claimed functionally claimed without any technical details for such enforcement.
MPEP 2106.05(f) Mere Instructions To Apply An Exception [R-10.2019]:
(1) Whether the claim recites only the idea of a solution or outcome i.e., the claim fails to recite details of how a solution to a problem is accomplished. The recitation of claim limitations that attempt to cover any solution to an identified problem with no restriction on how the result is accomplished and no description of the mechanism for accomplishing the result, does not integrate a judicial exception into a practical application or provide significantly more because this type of recitation is equivalent to the words “apply it”. See Electric Power Group, LLC v. Alstom, S.A., 830 F.3d 1350, 1356, 119 USPQ2d 1739, 1743-44 (Fed. Cir. 2016); Intellectual Ventures I v. Symantec, 838 F.3d 1307, 1327, 120 USPQ2d 1353, 1366 (Fed. Cir. 2016); Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1348, 115 USPQ2d 1414, 1417 (Fed. Cir. 2015). In contrast, claiming a particular solution to a problem or a particular way to achieve a desired outcome may integrate the judicial exception into a practical application or provide significantly more. See Electric Power, 830 F.3d at 1356, 119 USPQ2d at 1743.
By way of example, in Intellectual Ventures I v. Capital One Fin. Corp., 850 F.3d 1332, 121 USPQ2d 1940 (Fed. Cir. 2017), the steps in the claims described “the creation of a dynamic document based upon ‘management record types’ and ‘primary record types.’” 850 F.3d at 1339-40; 121 USPQ2d at 1945-46. The claims were found to be directed to the abstract idea of "collecting, displaying, and manipulating data." 850 F.3d at 1340; 121 USPQ2d at 1946. In addition to the abstract idea, the claims also recited the additional element of modifying the underlying XML document in response to modifications made in the dynamic document. 850 F.3d at 1342; 121 USPQ2d at 1947-48. Although the claims purported to modify the underlying XML document in response to modifications made in the dynamic document, nothing in the claims indicated what specific steps were undertaken other than merely using the abstract idea in the context of XML documents. The court thus held the claims ineligible, because the additional limitations provided only a result-oriented solution and lacked details as to how the computer performed the modifications, which was equivalent to the words “apply it”. 850 F.3d at 1341-42; 121 USPQ2d at 1947-48 (citing Electric Power Group., 830 F.3d at 1356, 1356, USPQ2d at 1743-44 (cautioning against claims “so result focused, so functional, as to effectively cover any solution to an identified problem”)).
Here, the limitation “execute a payment with a point of sale terminal by using the sub-payment token, the sub-ATC of the sub-payment token being provided to the point of sale terminal and being used to enforce a quantity of transactions performed by the first client device by at least determining that the value of the sub-ATC counters is within an ATC range associated with the sub-payment key” (claims 1, 8, 15) has been recited in a result-oriented manner that lacks details on how sub-ATC is used to “enforce a quantity of transaction performed by the first client device by determining that the value of the sub-ATC counters is within an ATC range associated with the sub-payment key” – which, therefore, is essentially equivalent to “apply it. All purported inventive concepts reside in how the “enforce … by … determining …” is technically accomplished and not in how the processing technologically achieves the result which the specification does not elaborate.
The ordered combination of steps recited in claims 1-3, 5-21 does not recite (i) an improvement to the functionality of a computer or other technology or technical field; (ii) a “particular machine” to apply or use the judicial exception; (iii) a particular transformation of an article to a different thing or state; or (iv) any other meaningful limitation. See MPEP 2106.05 (a)-(c), (e)-(h). Hence, the additional elements, when considered individually or as an ordered combination, do not integrate the abstract idea into a practical application or provide significantly more. See MPEP 2106.05(f) (“Use of a computer or other machinery in its ordinary capacity for economic or other tasks (e.g., to receive, store, or transmit data) or simply adding a general purpose computer or computer components after the fact to an abstract idea (e.g., a fundamental economic practice or mathematical equation) does not provide significantly more.”).
Previously Addressed
Applicant argues that the clams are integrated into a practical application because they are directed to a technological improvement in the field of contactless payments as indicated in para [0012], [0016], and [0017] of the specification.
Examiner finds this unpersuasive.
First, the examiner notes that contactless payment in the US had its early beginnings in 1997 and thus predates the present invention by more than two decades. See NPL Federal Reserve.
Second, neither of the claims, specification or the drawings explain how the sub-payment token can be communicated directly from the first client device to a second client device without the involvement of a backend server.
Third, the pending claims do not exactly describe contactless payment but merely the steps of – receiving, by a second client device, an encrypted payload comprising a sub-payment token (comprising sub-payment key + sub-ATC linked to a payment key); providing, by the first client device, the encrypted payload to a payment application executed on a secure element of the first client device, to decrypt the encrypted payload; and executing a payment by providing the sub-payment key to a POS terminal to enforce a quantity of transactions using the first client device – which is a Certain Method of Organizing Human Activity as opposed to being a technical solution to a technical problem. Examiner notes that the features described in para [0016] such as lending a payment token to a recipient user device to enable him/her to make POS or online purchases is little more than delegating the ability to conduct financial transaction from one person to another. Enforcing restrictions on the number of transactions entered into by the recipient is nothing more than a financial or budgetary restriction on commerce and hence falls under the Commercial/Legal Interactions category of abstract ideas. See MPEP II. CERTAIN METHODS OF ORGANIZING HUMAN ACTIVITY (“An example of a claim reciting managing personal behavior is Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 115 USPQ2d 1636 (Fed. Cir. 2015). The patentee in this case claimed methods comprising storing user-selected pre-set limits on spending in a database, and when one of the limits is reached, communicating a notification to the user via a device. 792 F.3d. at 1367, 115 USPQ2d at 1639-40. The Federal Circuit determined that the claims were directed to the abstract idea of “tracking financial transactions to determine whether they exceed a pre-set spending limit (i.e., budgeting)”, which “is not meaningfully different from the ideas found to be abstract in other cases before the Supreme Court and our court involving methods of organizing human activity.” 792 F.3d. at 1367-68, 115 USPQ2d at 1640.”)
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 ARUNAVA CHAKRAVARTI whose telephone number is (571)270-1646. The examiner can normally be reached 9 AM - 5 PM ET.
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/ARUNAVA CHAKRAVARTI/Primary Examiner, Art Unit 3692
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