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 the Claims
Claims 1-4, 8-11, and 15-18, are presented for examination. Applicant filed a response to non-final Office action on 11/04/2025 amending claims 1-3, 8-10, and 15-17; and canceling claims 5-7, 12-14, and 19-20. In light of Applicant’s amendments, Examiner has withdrawn the previous objection of claims 2, 9, and 16; and the previous § 101/§ 102 rejections of claims 1-4, 8-11, and 15-18. Examiner has, however, established new § 101 rejection and new grounds of § 103 rejection for claims 1-4, 8-11, and 15-18 in the instant Office action. Since the new § 101 rejection and the new grounds of § 103 rejection were necessitated by Applicant’s amendment of independent claims 1, 8, and 15, the instant rejection is the FINAL rejection of claims 1-4, 8-11, and 15-18.
Examiner’s Remarks
Patent Eligibility under § 101:
Applicant argues in pages 7-8 of Applicant’s Remarks:
While the claims involve payments, the claim focus is not a fundamental economic practice performed on a generic computer. Rather, the claims recite a specific improvement to the functioning of payment systems: a single flexible credential with issuer-side automated rules evaluation using transaction attributes (e.g., MCC, amount, time) to dynamically select a funding source, coupled with a prepaid default path and automated issuer-side replenishment that preserves POS compatibility and improves interchange reliability.
These features amount to a computer- and network-centric improvement rather than mere automation of a human business choice. The claims change how issuer systems process payment-network transaction indications and settle with specific, rule-driven, state-changing operations on accounts and networks, which aligns with eligibility precedents recognizing improvements to computer/network functionality (see, e.g., Enfish, McRO, DDR). Under MPEP §2106.05(a) and (b), the claims are directed to a specific asserted improvement in computer and network technology.
Examiner respectfully disagrees:
First: Applicant’s claim limitations are recited in high level of abstraction lacking details and specifics regarding to how a technological solution is carried out. Applicant’s claims are reciting a business solution to a business problem instead of technological solution to a problem of technology where instead of improving technology, technology is used in solving business problem. Thus, instant claims are not patent eligible under § 101.
Second:
(1) The Federal Circuit Court, in Fairwarning, distinguished the claims at issue from the claims in DDR Holdings elaborating: “The claims here do not propose a solution or overcome a problem “specifically arising in the realm of computer [technology].” DDR Holdings, 773 F.3d at 1257. At most, the claims require that these processes be executed on a generic computer.” (12). Similarly here, the instant claims do not propose a solution or overcome a problem specifically arising in the realm of computer technology, but instead, require, at most, that the process is executed on a generic computing system.
(2) In Electric Power Group, the Federal Circuit Court distinguished the claims at issue from the claims in Enfish: “In Enfish, we applied the distinction to reject the § 101 challenge at stage one because the claims at issue focused not on asserted advances in uses to which existing computer capabilities could be put, but on specific improvement–a particular database technique–in how computers could carry out one of their basic functions of storage and retrieval of data. Enfish, 822 F.3d 1335-36 …The present case is different: the focus of the claims is not on such an improvement in computers as tools, but on certain independently abstract ideas that use computers as tools.” (8). This is similar to the instant claims that focus on abstract idea of processing a transaction for a flexible credential using computer as a tool instead of improving computer as a tool.
(3) In FairWarning, the Federal Circuit Court distinguished the claims at issue from the claims in McRO: “The claims here are more like those in Alice than McRO. FairWarning’s claims merely implement an old practice in a new environment. … Although FairWarning’s claims require the use of a computer, it is this incorporation of a computer, not the claimed rule, that purportedly “improve[s] [the] existing technological process” by allowing the automation of further tasks. Alice, 134 S. Ct. at 2358.” (7-8). Again, this is similar to the instant claims which require a use of a computing system instead of improving an existing technological process.
Therefore, instant claims 1-4, 8-11, and 15-18, are not patent eligible under § 101 in view of DDR Holdings, Enfish, and McRO,
Prior Art under § 102: Examiner has carefully considered Applicant’s arguments directed to the previous grounds of § 102 rejection but finds them moot in view of new grounds of § 103 rejection necessitated by Applicant’s amendment of independent claims 1, 8, and 15.
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, 8-11, and 15-18, are rejected under 35 U.S.C. § 101 because they are directed to non-statutory subject matter. The rationale for this finding is explained below.
The Supreme Court in Mayo laid out a framework for determining whether an applicant is seeking to patent a judicial exception itself or a patent-eligible application of the judicial exception. See Alice Corp., 134 S. Ct. at 2355,110 USPQ2d at 1981 (citing Mayo, 566 U.S. 66, 101 USPQ2d 1961). This framework, which is referred to as the Mayo test or the Alice/Mayo test (“the test”), is described in detail in Manual of Patent Examining Procedure (”MPEP”) (see MPEP § 2106(III) for further guidance). The step 1 of the test: It need to be determined whether the claims are directed to a patent eligible (i.e., statutory) subject matter under 35 USC § 101. Step 2A of the test: If the claims are found to be directed to a statutory subject matter, the next step is to determine whether the claims are directed to a judicial exception i.e., law of nature, natural phenomenon, and abstract idea (Prong 1). If the claims are found to be directed to an abstract idea, it needs to be determined whether the claims recite additional elements that integrate the judicial exception into a practical application (Prong 2). Step 2B of the test: If the claims are directed to a judicial exception, the next and final step is to determine whether the claims recite additional elements that amount to significantly more than the judicial exception.
Step 1 of the Test:
When considering subject matter eligibility under 35 USC § 101, it must be determined whether the claim is directed to one of the four statutory categories of invention, i.e., process, machine, manufacture, or composition of matter. Here, the claimed invention of claims 1-4 is a system, and thus, one of the statutory categories of invention. Further, the claimed invention of claims 8-11 is a series of steps, which is method (i.e., a process), which is also one of the statutory categories of invention. Still further, the claimed invention of claims 15-18 is a non-transitory machine-readable medium, which is also one of the statutory categories of invention.
Conclusion of Step 1 Analysis: Therefore, claims 1-4, 8-11, and 15-18, are statutory under 35 USC § 101 in view of step 1 of the test.
Step 2A of the Test:
Prong 1: Claims 1-4, 8-11, and 15-18, however, recite an abstract idea of processing a transaction for a flexible credential. The creation of processing a transaction for a flexible credential, as recited in the independent claims 1, 8, and 15, belongs to certain methods of organizing human activity (i.e., commercial interactions) that are found by the courts to be abstract ideas. The limitations in independent claims 1, 8, and 15, which set forth or describe the recited abstract idea, are found in the following steps:
“accessing rules associated with the flexible credential” (claims 1, 8, and 15);
“evaluating rules established by the accountholder to determine a funding source to use in the payment transaction, the rules established by the accountholder, the rules indicating how transactions are handled for the accountholder, and the funding source being one of multiple funding sources and selected by the accountholder, the funding sources including a deposit account, a line of credit, a brokerage account, a re-tax savings account and a prepaid account” (claims 1, 8, and 15);
“accessing the prepaid account as a default funding source when there are no rules established by the accountholder to determine the finding source or when no evaluated rule applies to the payment transaction” (claims 1, 8, and 15);
“completing the payment transaction using the prepaid account as the funding source when there are no rules established by the accountholder to determine the funding source by settling the transaction using the prepaid account or the funding source determined by the rule evaluation” (claims 1, 8, and 15); and
“responsive to completing the payment transaction using the prepaid account as the funding source, reloading the prepaid account according to a replenishment rule by transferring funds from one or more of the funding sources in an amount up to the purchase amount or to a prepaid account limit.”
Prong 2: In addition to abstract steps recited above in Prong 1, independent claims 1, 8, and 15, recite additional elements:
“a processor subsystem operated by an issuing bank system” (claim 1);
“memory including instructions” (claim 1);
“a payment network” (claims 1, 8, and 15);
“a rules database” (claims 1, 8, and 15);
“a user device operated by the accountholder including a financial app to interact with the rules database that stores rules” (claims 1, 8, and 15); and
“a non-transitory machine-readable medium comprising instructions, which are executed by a machine in an online system” (claim 15).
These additional elements are recited at a high level of generality (e.g., as a generic processor performing a generic computer functions) such that they amount to no more than mere instructions to apply the exception using a generic computer components. Further, the following limitation recites insignificant extra solution activity (for example, data gathering):
“receiving an indication of a payment transaction involving an accountholder of the flexible credential who is using the flexible credential for payment in the payment transaction, the indication including one or more transaction attributes comprising at least a merchant category code (MCC), a purchase amount, and a date and time of the payment transaction” (claims 1, 8, and 15).
This additional limitation does not integrate the abstract idea into a practical application because it does not impose a meaningful limit on the judicial exception. The additional elements/limitation of independent claims 1, 8, and 15, here do not render improvements to the functioning of a computer or to any other technology or technical field (see MPEP § 2106.05(a)), nor do they integrate the abstract idea into a practical application under MPEP § 2106.05(b) (particular machine); MPEP § 2106.05(c) (particular transformations); or MPEP § 2106.05(e) (other meaningful limitations). Further, the combination of these additional elements/limitation is no more than mere instructions to apply the exception using a generic device. Accordingly, even in combination, these additional elements/ limitation do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea.
Conclusion of Step 2A Analysis: Therefore, independent claims 1, 8, and 15, are non-statutory under 35 USC § 101 in view of step 2A of the test.
Step 2B of the Test: The additional elements of independent claims 1, 8, and 15, (see above under Step 2A - Prong 2) are described by Applicant’s Specification in following terms:
[0041]Embodiments may be implemented in one or a combination of hardware, firmware, and software. Embodiments may also be implemented as instructions stored on a machine-readable storage device, which may be read and executed by at least one processor to perform the operations described herein. A machine-readable storage device may include any non-transitory mechanism for storing information in a form readable by a machine (e.g., a computer). For example, a machine-readable storage device may include read-only memory (ROM), random-access memory (RAM), magnetic disk storage media, optical storage media, flash-memory devices, and other storage devices and media.
[0042]A processor subsystem may be used to execute the instruction on the machine-readable medium. The processor subsystem may include one or more processors, each with one or more cores. Additionally, the processor subsystem may be disposed on one or more physical devices. The processor subsystem may include one or more specialized processors, such as a graphics processing unit (GPU), a digital signal processor (DSP), a field programmable gate array (FPGA), or a fixed function processor.
This is a description of general-purpose computer. Thus, individually, the additional elements of independent claims 1, 8, and 15, are well-understood, routine, and conventional elements that amount to no more than implementing the abstract idea with a computerized system. Further, the additional limitation of “receiving” information amounts to no more than mere instructions to apply the exception using generic computer components. For the same reason this additional limitation is not sufficient to provide an inventive concept. The additional limitation of “receiving” information was considered as insignificant extra-solution activity in Step 2A - Prong 2. Re-evaluating here in Step 2B, it is also determined to be well-understood, routine, and conventional activity in the field. Similarly to OIP Techs., Inc., v. Amazon.com, Inc., 788 F.3d 1359, 1363, 115 USPQ2d 1090, 1093 (Fed. Cir. 2015) (sending messages over a network), and 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), the additional limitation of independent claims 1, 8, and 15, “receive” information over a network in a merely generic manner. The courts have recognized “receiving” information functions as well-understood, routine and conventional when claimed in a merely generic manner. Therefore, the additional limitation of independent claims 1, 8, and 15, is well-understood, routine, and conventional. Further, taken as combination, the additional elements/limitation add nothing more than what is present when the additional elements/limitation are considered individually. There is no indication that the combination provides any effect regarding the functioning of the computer or any improvement to another technology.
Conclusion of Step 2B Analysis: Therefore, independent claims 1, 8, and 15, are non-statutory under 35 USC § 101 in view of step 2B of the test.
Dependent Claims: Dependent claims 2-4 depend on independent claim 1; dependent claims 9-11 depend on independent claim 8; and dependent claims 16-18 depend on independent claim 15. The elements in dependent claims 2-4, 9-11, and 16-18, which set forth or describe the abstract idea, are:
“the payment network is a payment card network” (claims 2, 9, and 16: further narrowing the recited abstract idea);
“the flexible credential is configured to act as both a debit card to draw from a deposit account and a prepaid card to draw from the prepaid account” (claims 3, 10, and 17: further narrowing the recited abstract idea); and
“the flexible credential is configured to draw from a line of credit, a pre-tax savings account, or a brokerage account” (claims 4, 11, and 18: further narrowing the recited abstract idea);
Conclusion of Dependent Claims Analysis: Dependent claims 2-4, 9-11, and 16-18, do not correct the deficiencies of independent claims 1, 8, and 15, and they are, thus, rejected on the same basis.
Conclusion of the 35 USC § 101 Analysis: Therefore, claims 1-4, 8-11, and 15-18, are rejected as directed to an abstract idea without “significantly more” under 35 USC § 101.
Claim Rejections - 35 USC § 103
The following is a quotation of 35 U.S.C. § 103 which forms the basis for all obviousness rejections set forth in this Office action:
A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in § 102 of this title, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
Claims 1-4, 8-11, and 15-18, are rejected under 35 U.S.C. § 103 as being unpatentable over Unrau (US 11,507,938 B1) in view of Plez (US 7,401,731 B1).
As to independent claims 1, 8, and 15
Unrau shows:
a processor subsystem operated by an issuing bank system (Unrau: col. 1, lines 56-60; and col. 4, lines 20-46);
a non-transitory machine-readable medium comprising instructions, which are executed by a machine in an online system (Unrau: col. 2, lines 4-8); and
memory including instructions, which when executed by the processor subsystem, cause the processor subsystem (Unrau: col. 1, lines 56-60) to:
receive, from a payment network, an indication of a payment transaction involving an accountholder of the flexible credential who is using the flexible credential for payment in the payment transaction, the indication including one or more transaction attributes comprising at least a merchant category code (MCC), a purchase amount, and a date and time of the payment transaction (Unrau: col. 6, lines 50-56);
access a rules database storing rules associated with the flexible credential (Unrau: col. 5, lines 59-61);
a user device operated by the accountholder, the user device including a financial app to interact with the rules database that stores rules (Unrau: col. 5, lines 47-51 and lines 59-61);
access the prepaid account as a default funding source when there are no rules established by the accountholder to determine the finding source or when no evaluated rule applies to the payment transaction (Unrau: col. 1, lines 49-50; and col. 6, lines 12-27);
complete the payment transaction using the prepaid account as the funding source when there are no rules established by the accountholder to determine the funding source by instructing the payment network to settle the transaction using the prepaid account or the funding source determined by the rule evaluation (Unrau: col. 1, lines 50-53; and col. 6, lines 27-31); and
responsive to completing the payment transaction using the prepaid account as the funding source, reload the prepaid account according to a replenishment rule by transferring funds from one or more of the funding sources in an amount up to the purchase amount or to a prepaid account limit (Unrau: col. 6, lines 56-65).
Unrau does not show:
evaluating rules established by the accountholder to determine a funding source to use in the payment transaction, the rules established by the accountholder, the rules indicating how transactions are handled for the accountholder, and the funding source being one of multiple funding sources and selected by the accountholder, the funding sources including a deposit account, a line of credit, a brokerage account, a re-tax savings account and a prepaid account.
Plez shows:
evaluating rules established by the accountholder to determine a funding source to use in the payment transaction, the rules established by the accountholder, the rules indicating how transactions are handled for the accountholder, and the funding source being one of multiple funding sources and selected by the accountholder, the funding sources including a deposit account, a line of credit, a brokerage account, a re-tax savings account and a prepaid account (Plez: col. 11, lines 10-34).
Motivation to combine Unrau and Plez:
It would have been obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to have modified the method, the system, and the non-transitory computer readable medium of Unrau by evaluating rules established by the accountholder to determine a funding source to use in the payment transaction, the rules established by the accountholder, the rules indicating how transactions are handled for the accountholder, and the funding source being one of multiple funding sources and selected by the accountholder, the funding sources including a deposit account, a line of credit, a brokerage account, a re-tax savings account and a prepaid account of Plez in order to provide a card product with multiple customized accounts (Plez: col. 2, lines 4-7).
As to claims 2, 9, and 16: Unrau in view of Plez shows all the elements of claims 1, 8, and 15. Unrau also shows that the payment network is a payment card network (Unrau: col. 4, lines 43-46).
As to claims 3, 10, and 17: Unrau in view of Plez shows all the elements of claims 1, 8, and 15. Unrau also shows that the flexible credential is configured to act as both a debit card to draw from a deposit account and a prepaid card to draw from the prepaid account (Unrau: col. 4, lines 54-64).
As to claims 4, 11, and 18: Unrau in view of Plez shows all the elements of claims 3, 10, and 17. Unrau also shows that the flexible credential is configured to draw from a line of credit, a pre-tax savings account, or a brokerage account (Unrau: col. 4, lines 47-48).
Conclusion
The prior art made of record and not relied upon is considered pertinent to applicant's disclosure.
Mukherjee (US 11,562,355 B2) discloses: “(32) According to some non-limiting embodiments or aspects, the determination of the second payment device may be rules-based, such that the rules determine the second payment device to be tried upon determining that the first authorization request failed. For example, the rules may determine that credit cards of the user are to be tried before debit cards (or vice versa) as the second payment device. The rules may prioritize certain payment devices over others based on an entity related to the merchant, the acquirer, or the issuer (e.g., prioritizing a card issued by an issuer based on the acquirer associated with the transaction being affiliated with the issuer, or the merchant having a co-branded payment device issued to the user). The rules may prioritize payment devices associated with certain transaction service providers. It will be appreciated that these represent certain exemplary rules for determining the second payment device, and other rules fall within the scope of this disclosure.”
Barrett (US 2024/0104536 A1) discloses: “The system has processors for determining that an account balance of a prepaid payment unit comprises inadequate funds to fulfill a transaction based on receiving a primary authorization request and automatically transiting a secondary authorization request to a financial entity associated with an account of a user over networks based on determining that the account balance comprises inadequate funds to fulfill the transaction. The processors receive an approval of the secondary authorization request to facilitate funding the transaction with a merchant over the networks from a financial entity associated with the account of the user and execute transfer for difference amount from the account of the user to an account associated with the merchant based on amount corresponding to the transaction and on receiving the approval.”
Petersen (US 2016/0132876 A1) discloses: “[0015] The user sets rules or preferences specifying when the closed loop account is accessed when a wallet account transaction is attempted. For example, a user may prefer to store gift cards until a certain dollar value is reached. A user may only choose to use a gift card on a purchase that exhausts the entire gift card amount. Any other rule may be configured for using the closed loop account. The user can then add, delete, or change the default payment rules associated with the user's wallet account. The user can change these default static rules, create new rules, or delete a rule. In an example embodiment, the user can access the wallet account and modify the rules at any time, including a time immediately before a payment transaction is initiated. In an example embodiment, the user can access the wallet account using a mobile device application, such as a digital wallet application module executing on the user's mobile computing device. The rules can be maintained on the digital wallet application module, on the user computing device, or on a server at the payment processing system.”
Fote (US 2012/0259781 A1) discloses: “[0087] 6. The payer chooses which funding source and real account to use for the payment (step 425). The payer can make this designation by sending the payment broker's server 330 his or her corresponding payment broker account reference number from a list previously established via the payment broker software application running on device 320.”
Fourez (US 2010/0036770 A1) discloses: “A method and a system for providing a payment cardholder with multiple funding source options for a payment card are provided herein. First, a managing platform associates at least two funding sources with the payment card. The funding sources include a first funding source and a second funding source. Next, the first funding source is designated as a default funding source and a set of pre-defined routing rules for funding transactions made with the payment card. Then, the managing platform intercepts each transaction of the payment card and routes the transactions to an issuer funding system for the first funding source using the managing platform.”
Prior, Francesc, and Xavier Santomá. "Banking the unbanked using prepaid platforms and mobile telephones in the United States." (2010).
Applicant's amendment necessitated the new grounds 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 extension fee 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 date of this final action.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to VIRPI H. KANERVO whose telephone number is 571-272-9818. The examiner can normally be reached on Monday – Friday, 10 am – 6 pm. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor Abhishek Vyas can be reached on 571-270-1836. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
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/VIRPI H KANERVO/Primary Examiner, Art Unit 3691