DETAILED ACTION
Status of the Claims
This office action is submitted in response to the amendment filed on
Examiner notes that this application is a continuation of 16/938806, which is now abandoned.
Examiner further notes that 16/983806 is a continuation of 14/751336, which is now US Patent No. 10810610.
Examiner further notes Applicant’s priority date of 6/26/15, which stems from the aforementioned parent applications.
Examiner further notes the previous withdrawal of prior art on 8/13/25.
Claims 1-20 were previously cancelled.
Claims 21, 28, and 35 have been amended.
Therefore, claims 21-40 are currently pending and have been examined.
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 21-40 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: Claim 21 recites a system comprising: a memory configured to store instructions; and one or more processors configured to execute the instructions, which constitutes a machine. Claim 28 recites a method, which constitutes a process. Claim 35 recites a non-transitory computer-readable medium storing instructions, which constitutes an article of manufacture. Claims 22-27 depend from claim 21 and thus likewise fall within the machine category; claims 29-34 depend from claim 28 and thus likewise fall within the process category; and claims 36-40 depend from claim 35 and thus likewise fall within the article of manufacture category. Accordingly, claims 21-40 fall within the statutory categories of a machine, a process, and an article of manufacture, respectively, and satisfy Step 1. See MPEP 2106.03.
Step 2A, Prong One: Independent claims 21, 28, and 35, in part, describe a method comprising: generating a ledger entry for a user that includes a user identifier, a ledger identifier, and a qualified source identifier; linking a payment identifier of a payment vehicle to the user identifier in the ledger entry; linking a rule associated with the qualified source of the electronic transaction to the ledger identifier; determining that the payment vehicle identified in the authorization request is linked to the ledger identifier in the ledger entry; determining that the authorization request is from the qualified source of the electronic transaction based on the qualified source identifier in the ledger entry; determining whether the authorization request satisfies the rule associated with the qualified source of the electronic transaction by evaluating whether the user is within a segment definition corresponding to one or more stored benefits, wherein the segment definition is based on historical purchase variables stored in the ledger entry and tracked over time, the historical purchase variables including a number of purchases within a time period, an average spend, or an average time between purchases; in response to determining that the authorization request satisfies the rule, generating an augmented authorization request for a second transaction amount; in response to determining that the authorization request does not satisfy the rule, updating a variable in the ledger entry based on the authorization request; wherein the generating the ledger entry, the linking the payment identifier, the linking the rule, the determining whether the authorization request satisfies the rule, and the generating the augmented authorization request are performed without requiring the user to enroll in a loyalty program or present a loyalty identifier at a point of sale system of the qualified source of the electronic transaction.
As such, the invention is directed to the abstract idea of authorizing purchase transactions and applying qualifying discounts based on customer purchase history segmentation, which, pursuant to MPEP 2106.04(a), is aptly categorized as a method of organizing human activity (i.e., sales and commercial reward activities). Therefore, under Step 2A, Prong One, the claims recite a judicial exception.
Next, the aforementioned claims recite additional elements that are associated with the judicial exception, including: receiving an authorization request for a transaction comprising a first transaction amount; transmitting an augmented authorization request to a payment network for a second transaction amount; and transmitting an authorization request to the payment network for the first transaction amount. Dependent claims 26, 33, and 40 further disclose transmitting messages to a POS system. Examiner understands these limitations to be insignificant extrasolution activity. See Accenture, 728 F.3d 1336, 108 U.S.P.Q.2d 1173 (Fed. Cir. 2013), citing Cf. Diamond v. Diehr, 450 U.S. 175, 191-192 (1981) ("[I]nsignificant post-solution activity will not transform an unpatentable principle into a patentable process.").
The aforementioned claims also recite additional elements including "one or more processors" for executing the method; a "ledger" for recording data; a "database" for storing ledger entries; a "memory" for storing executable instructions; and a "payment network" for transmitting data. Dependent claims 22, 29, and 36 further describe a "POS system" for executing electronic transactions. These limitations are recited at a high level of generality and appear to be nothing more than generic computer components. Claims that amount to nothing more than an instruction to apply the abstract idea using a generic computer do not render an abstract idea eligible. Alice Corp., 134 S. Ct. at 2358, 110 USPQ2d at 1983. See also 134 S. Ct. at 2389, 110 USPQ2d at 1984.
Step 2A, Prong Two: Looking at the elements individually and in combination, the claims as a whole do not integrate the judicial exception into a practical application because they fail to: improve the functioning of a computer or a technical field, apply the judicial exception in the treatment or prophylaxis of a disease, apply the judicial exception with a particular machine, effect a transformation or reduction of a particular article to a different state or thing, or apply the judicial exception beyond generally linking the use of the judicial exception to a particular technological environment. Rather, the claims merely use a computer as a tool to perform the abstract idea(s), and/or add insignificant extra-solution activity to the judicial exception, and/or generally link the use of the judicial exception to a particular technological environment (e.g., a payment network or POS system).
Step 2B: The claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception because the additional elements, when considered both individually and as an ordered combination, do not amount to significantly more than the abstract idea. Furthermore, looking at the limitations as an ordered combination adds nothing that is not already present when looking at the elements taken individually. Simply put, as noted above, there is no indication that the combination of elements improves the functioning of a computer (or any other technology), and their collective functions are merely facilitated by generic computer implementation.
Additionally, pursuant to the requirement under Berkheimer, the following citations are provided to demonstrate that the additional elements, identified as extra-solution activity, amount to activities that are well-understood, routine, and conventional. See MPEP 2106.05(d).
Receiving or transmitting data over a network, e.g., using the Internet to gather data, Symantec, 838 F.3d at 1321, 120 USPQ2d at 1362; OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1363, 115 USPQ2d 1090, 1093 (Fed. Cir. 2015) (sending messages over a network); 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).
Thus, taken alone and in combination, the additional elements do not amount to significantly more than the above-identified judicial exception (the abstract idea), and are ineligible under 35 U.S.C. 101.
Claims 22-27, 29-34, and 36-40 are dependent on the aforementioned independent claims and include all the limitations contained therein. These claims do not recite any additional technical elements and simply disclose additional limitations that further limit the abstract idea with details regarding the payment transaction, the transaction rule, or the POS system. Specifically, claims 22, 29, and 36 disclose that the payment transaction is received from a POS system; claims 23, 30, and 37 further specify that the payment transaction is a card-not-present transaction originated at a website, both of which merely identify the generic transactional environment in which the abstract idea is performed and add no technical distinction. Claims 24, 25, 31, 32, 38, and 39 disclose that the augmented authorization request reduces the transaction amount by a particular amount or percentage, a purely mathematical operation that further limits the abstract idea with additional abstract subject matter rather than transforming it. Claims 26, 33, and 40 disclose transmitting additional messaging to a POS system to resolve a discrepancy, which, as noted above, constitutes insignificant extrasolution activity. Claims 27 and 34 disclose that the rule relates to an amount, location, type, or number of electronic transactions, additional organizational criteria that further characterize the abstract idea of applying transaction rules without providing any meaningful technical limitation. Thus, the dependent claims merely provide additional non-structural (and predominantly non-functional) details that fail to meaningfully limit the claims or the abstract idea(s).
Therefore, claims 21-40 are not drawn to eligible subject matter, as they are directed to an abstract idea without significantly more.
Relevant Prior Art
The following references are deemed to be relevant to Applicant’s disclosures:
Linden et al. (20150106263), directed to a method for dynamically processing card payment authorization requests.
Badger et al. (20200357015), directed to a method for electronic transaction authorizations based on consumer device activity.
Olson et al. (12373858), directed to a method for loyalty points payment using distributed ledgers.
Badger (10810610), directed to a method for consumer loyalty management.
Response to Arguments
Applicant's arguments filed in response to the non-final office action mailed 3/26/26, regarding the rejection of claims 21-40 under 35 U.S.C. 101, have been fully considered but are not persuasive.
First, Applicant argues that the amended claims recite features that parallel those found allowable in parent U.S. Patent No. 10,810,610, and that the Office's reasons for allowance in the '610 patent (crediting an improvement in electronic consumer loyalty management in light of the existing techniques described in paragraph [0001] of the specification) warrant the same treatment here. These arguments are not persuasive.
Each application is examined on its own merits, and the eligibility of the claims presently pending must be determined by applying the subject matter eligibility framework of MPEP 2106 to the claims as they now stand. The claims of the '610 patent are not the claims at issue here, and a statement of reasons for allowance made in the prosecution of a parent application, directed to different claim language and rendered under the examination practice in effect at that time, does not control the eligibility analysis of the present claims. The present claims have been independently analyzed under the two-prong framework of MPEP 2106.04, as set forth in the rejection above, and are ineligible for the reasons stated therein.
Next, Applicant argues that the amended claims do not recite a judicial exception under Step 2A, Prong One, because the claims require evaluating merchant-specific rules using objectively defined historical purchase metrics maintained in a ledger entry, in an automated and data-driven manner that cannot be performed in the human mind, and because the enrollment-free operation recited in the wherein clause shows the system operates autonomously without human intervention. These arguments are not persuasive. As an initial matter, the rejection does not identify the abstract idea as a mental process; the claims are directed to a certain method of organizing human activity, specifically commercial sales activities and the management of loyalty-based reward programs. See MPEP 2106.04(a)(2). Whether the claimed evaluation could be performed in the human mind is therefore not dispositive of the grouping actually applied. Moreover, evaluating whether a customer qualifies for a benefit by comparing tracked purchase metrics (purchase frequency, average spend, average time between purchases) against a segment definition is the fundamental economic practice of customer segmentation, and conditionally granting or withholding a discount based on that evaluation, while tracking activity toward a future benefit when the condition is not met, is a longstanding commercial sales and marketing practice. Automating that practice with generic computing components does not remove it from the organizing human activity grouping; the mere recitation of computer implementation does not transform an otherwise abstract commercial practice into eligible subject matter. See Alice Corp., 134 S. Ct. at 2358. As to the wherein clause, a negative limitation specifying that the customer need not enroll in a loyalty program or present a loyalty identifier does not recite any technical operation at all; it merely describes the terms of the commercial arrangement under which the loyalty benefit is provided, and accordingly forms part of the abstract idea itself.
Next, Applicant argues that the claims integrate any recited judicial exception into a practical application under Step 2A, Prong Two, because the specification (paragraphs [0001], [0015], [0018], and [0019]) describes an improvement over conventional loyalty programs, consistent with the USPTO Memorandum dated August 4, 2025 and MPEP 2106.04(d)(1), and because the conditional dual-path processing and transparent operation within the payment authorization architecture represent a specific technical implementation that improves the functioning of electronic consumer loyalty management systems. These arguments are not persuasive. The Examiner has consulted the specification, as the cited guidance directs, and the specification confirms that the asserted improvement is an improvement to the underlying commercial practice rather than to any technology or technical field. Paragraph [0001] describes the shortcomings of conventional loyalty programs in commercial terms: customers must register and present a unique identifier, and merchants must set up and manage a program. Paragraphs [0015] and [0018] describe the solution in equally commercial terms: the consumer loyalty server provides "programless" loyalty management services so that merchants can offer loyalty benefits without hosting or managing the technology, and so that consumers need not enroll or present any identifier beyond the payment vehicle itself. Eliminating enrollment requirements and merchant program-management burdens is a refinement of the loyalty program business model; it is not an improvement to the functioning of a computer, the payment network, or any other technology. See MPEP 2106.05(a); Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335-36 (Fed. Cir. 2016). Indeed, the specification itself confirms that the surrounding technical infrastructure is unchanged: the POS system "can generally be unmodified" (paragraph [0007]), the acquirer transmits authorization requests to the issuer "using conventional messaging" (paragraph [0019]), and the transparency that Applicant relies upon from paragraph [0019] exists precisely because the augmentation is applied within the existing payment stream without any modification to the upstream or downstream systems. A process that operates invisibly within conventional infrastructure, using that infrastructure exactly as designed, does not improve that infrastructure. The conditional dual-path processing fares no better: selecting between transmitting a discounted amount and transmitting the original amount while recording the customer's activity is the abstract commercial practice itself, and reciting it with greater specificity does not integrate it into a practical application. See MPEP 2106.04(d).
Finally, Applicant argues under Step 2B that the combination of a structured ledger with historical purchase variables, conditional dual-path authorization processing, and variable updating constitutes an unconventional arrangement; that the Office has not provided Berkheimer support for finding this combination well-understood, routine, or conventional; and that the absence of any prior art rejection supports the conclusion that the claims recite an unconventional arrangement of elements. These arguments are not persuasive. The Berkheimer evidentiary requirement applies to additional elements, not to the limitations that constitute the judicial exception itself. See MPEP 2106.05(d); Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018). The features Applicant identifies as unconventional (the ledger-stored historical purchase variables, the segment-based rule evaluation, the conditional generation of an augmented authorization request or updating of a ledger variable, and the enrollment-free operation) are part of the abstract idea, as set forth in the rejection above, and no finding of conventionality is required for them. An asserted advance in the abstract realm cannot supply the inventive concept; even a novel and nonobvious abstract idea remains an abstract idea. See SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018). The actual additional elements are the generic computing components and the receipt and transmission of authorization data over a network, and the rejection provides the required Berkheimer support for the network activity (Symantec, OIP Techs., buySAFE) together with the appropriate analysis of the generic components under Alice. With respect to the absence of a prior art rejection, that circumstance is not probative of eligibility under 35 U.S.C. 101; the eligibility and patentability inquiries are separate and distinct. See Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1376 (Fed. Cir. 2016); MPEP 2106.05(d)(I) (the search for an inventive concept is not a search for novelty).
Accordingly, Applicant's arguments have been fully considered but are not persuasive. The rejection of claims 21-40 under 35 U.S.C. § 101 is therefore maintained.
Conclusion
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.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to CHRISTOPHER BUSCH whose telephone number is (571)270-7953. The examiner can normally be reached M-F 10-7.
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/CHRISTOPHER C BUSCH/Examiner, Art Unit 3621
/WASEEM ASHRAF/Supervisory Patent Examiner, Art Unit 3621
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