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 .
DETAILED ACTION
Claim Rejections - 35 USC § 101
35 U.S.C. 101 reads as follows:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
Claims 1-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to a judicial exception (i.e., a law of nature, a natural phenomenon, or an abstract idea) without significantly more. Regarding independent claims 1, 8, 15 the claimed invention recites an abstract idea without significantly more. The claims recites the abstract idea of providing invoicing terms which is a mental process. Other than reciting processor/computer nothing in the claims precludes the steps from being performed mentally. But for the processor the limitations on accessing payment data, calculate payment dates for payment terms, determine effectiveness of payment terms, determine recommended payment term, generate invoice is a process that under its broadest reasonable interpretation could be performed by mentally but for the recitation of generic computer elements. If claim limitations, under the broadest reasonable interpretation, covers performance of the limitation in the mind but for the recitation of generic computer components, then it falls within the “Mental Processes” grouping of abstract ideas. Further the above limitations related to invoicing terms stripped of the identified additional and insignificant elements could also be considered a “Method of Organizing Human Activity” relating to the managing human behavior and interactions. (fundamental economic practice). Thus, the claims recite an abstract idea.
The judicial exception is not integrated into a practical application. The computers are recited at a high-level of generality such that it amounts no more than mere instructions to apply the exception using generic computer components. The additional element(s) does not integrate the abstract idea into a practical application because it does not impose any meaningful limits on practicing the abstract idea. Simply implementing the abstract idea on a generic computer environment is not a practical application of the abstract idea and does not take the claim out of the mental process or method of organizing human activity grouping.
The claims 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 element of a computer or processor amounts to no more than mere instructions to apply the exception using a generic computer components. Mere instructions to apply an exception using generic computer components cannot provide an inventive concept. Collecting, analyzing and displaying information, and receiving and transmitting over a network are conventional in the computing arts. (MPEP 2106.05h; See also MPEP 2106.05, Alice v. CLS, “. Nearly every computer will include a ‘communications controller’ and ‘data storage unit’ capable of performing the basic calculation, storage, and transmission functions required by the method claims.”). The claims are not patent eligible.
Regarding the dependent claims, these claims are directed to limitations which serve to limit the invoice term provisioning steps. The subject matter of claims 2/9/16 (minimize DSO), 3/10/17 (maximize revenue), 4/11/18 (perform term determination using country information), 5/12/19 (perform term determination using customer segment information), 6/13/20 (determine and display payment terms for selection and invoice generation), 7/14 (payment term is based on customer ranking)
appear to add additional steps to the abstract idea, implemented by generic computers. These claims neither introduce a new abstract idea nor additional limitations which are significantly more than an abstract idea. They provide descriptive details that offer helpful context, but have no impact on statutory subject matter eligibility.
Therefore the limitations on the invention, when viewed individually and in ordered combination are directed to in-eligible subject matter.
Claim Rejections - 35 USC § 103
In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status.
In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status.
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 section 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 1-3,5,6,8,9,10,12,13,15,16,17,19,20 rejected under 35 U.S.C. 103 as being unpatentable over Shah 12190345
Verma, “What Are Net Payment Terms & Why Are They Important?”, 7/2024, https://www.highradius.com/resources/Blog/what-are-net-payment-terms-why-are-they-important/
Regarding Claim 1,
accessing stored payment data;
for each payment term of a plurality of payment terms in the stored payment data,
Shah is directed to a “buy now pay later” (BNPL) system for allowing merchants to offer customer installment payment plans. (Shah, abstract). Shah discloses present a plurality of payment plans to a user based on criteria including past performance. (Shah, col.7,ln.64-col.9ln.14, “One or more “best offers” are the top N (where N is a non-zero integer) offers among all applicable installment offers ranked based on ranking criteria, which may include the repayment terms, qualification criteria, personalized criteria including historical selections by the buyer or demographically similar buyers, and/or other data known about the installment offers. The payment network server may transmit the best offers to the specialized application. For example, the personalized criteria may be based on data of installment offers accepted by the current buyer, denied by the current buyer, accepted by demographically similar buyers, denied by demographically similar buyers, and/or other data known about the buyer that would indicate a preference for one installment over another installment offer. These preferences can include a preference minimize or maximize the term, minimize the interest rate, FI preferences, and/or other repayment preferences.”).
calculating a distribution of payment dates before, on, and after a due date;
Shah discloses that a payment plan may include timing of payments and early/late payment terms. (Shah, col.6,lns.57-65, “Additionally, the BNPL database 151 may contain information associated with installment offers contained within the database including an identification, an item identifier to identify the item, a total price, a number of installments, a price of each installment, a timeline for installment payment, an interest rate, a late payment fee, an early repayment penalty, an expiration date, and/or eligibility criteria specifying the criteria that customers must meet in order to qualify for the offer.”)
determining an effectiveness of each of a plurality of payment terms based in part on the distribution of payment dates,
determining a recommended payment term based at least in part on the effectiveness of each of the plurality of payment terms and an objective;
(Shah, col.7,ln.64-col.9ln.14, “One or more “best offers” are the top N (where N is a non-zero integer) offers among all applicable installment offers ranked based on ranking criteria, which may include the repayment terms, qualification criteria, personalized criteria including historical selections by the buyer or demographically similar buyers, and/or other data known about the installment offers. The payment network server may transmit the best offers to the specialized application. For example, the personalized criteria may be based on data of installment offers accepted by the current buyer, denied by the current buyer, accepted by demographically similar buyers, denied by demographically similar buyers, and/or other data known about the buyer that would indicate a preference for one installment over another installment offer. These preferences can include a preference minimize or maximize the term, minimize the interest rate, FI preferences, and/or other repayment preferences.”).
Shah does not explicitly disclose
wherein effectiveness is defined as a time difference between a payment due date and a payment date;
and generating an invoice including the recommended payment term.
Verma is an article discussing business invoicing terms. (Verma, introduction, “It is no secret that businesses run on cash and late payments impact cash flow. But did you know that net payment terms play a crucial role in getting paid and can affect your business’s readily available cash flow? Well, now you do. In fact, one of the biggest issues for the finance department is getting invoices paid on time.”) Verma discloses that it is known to consider a business’ cash flow needs, customer relationships and payment history to determine the best invoicing terms offered to customers. (Verma, p.3, “Businesses relying on net payment terms must wait for customers to honor their payment obligations.
This can strain cash flow, especially if there are delays or defaults in payment, as a significant portion of sales is tied up in accounts receivable with extended payment terms. Businesses can navigate these disadvantages by implementing strategies such as late fees or discounts for early payment. Companies often set specific terms regarding late payments, typically in the form of late fees.
So, if customers fail to pay within the agreed-upon timeframe, they will be charged a late fee along with the billed amount. Similarly, offering early payment discounts encourages customers to make payments before the deadline. This, in turn, helps businesses prevent the risks of delinquent payments or cash flow disruptions.
How To Choose The Right Payment Terms For Your Business?
As mentioned above, net payment terms are not the same for all businesses. Factors like the nature of business operations, industry, credit history, etc., come into the picture when deciding the right payment terms for your business. Below-given are some tips to help you make the best choice that will benefit your business:
1. Analyze your cash flow needs
You must start by understanding your business's cash flow requirements. This means you must know when your overheads need to be paid. You can use the average period collection formula to estimate the suitable net terms and avoid disrupting smoother cash flows. Average collection period= (Accounts Receivable/ Net Credit Sales) x 365 days
2. Know your industry standards
Research typical payment terms used in your industry. This is because every industry will have
different requirements when it comes to maintaining liquidity. Also, aligning with industry norms can make your terms more attractive to customers.
3. Evaluate customers payment history
You might agree that not all your customers consistently make timely payments. Therefore, when offering flexible payment terms, it's essential to review the client's past transactions to assess their reliability in meeting payment deadlines.
4. Review and adjust terms
As businesses evolve, so do their clientele relationships. You must regularly assess opportunities and consider the competitive advantage that your clients contribute to your business. This will help you determine the potential risk associated with extending credit and minimize bad debts.”) It would have been obvious to one of ordinary skill in the art before the filing date of the invention to combine Shah with the financing term evaluation of Shah with the motivation of improving cash flow. Id.
Regarding Claim 2, Shah and Verma disclose the method of claim 1.
wherein the objective is to minimize a days sales outstanding value.
See prior art rejection of claim 1 regarding Verma
Regarding Claim 3, Shah and Verma disclose the method of claim 1.
wherein the objective is to maximize revenue.
See prior art rejection of claim 1 regarding Shah. The examiner interprets offering BNPL as a means to increase revenue by selling to customers that cannot pay outright and require financing.
Regarding Claim 5, Shah and Verma disclose the method of claim 1.
wherein the stored payment data includes customer segment data, the computer implemented method further comprising:
comparing the effectiveness of each of the plurality of payment terms for each
of a plurality of customer segments; and
wherein the determining the recommended payment term is further based in part on the comparing the effectiveness of each of the plurality of payment terms for each of a plurality of customer segments.
(Shah, col.7,ln.64-col.9ln.14, “One or more “best offers” are the top N (where N is a non-zero integer) offers among all applicable installment offers ranked based on ranking criteria, which may include the repayment terms, qualification criteria, personalized criteria including historical selections by the buyer or demographically similar buyers, and/or other data known about the installment offers. The payment network server may transmit the best offers to the specialized application. For example, the personalized criteria may be based on data of installment offers accepted by the current buyer, denied by the current buyer, accepted by demographically similar buyers, denied by demographically similar buyers, and/or other data known about the buyer that would indicate a preference for one installment over another installment offer. These preferences can include a preference minimize or maximize the term, minimize the interest rate, FI preferences, and/or other repayment preferences.”).
Regarding Claim 6, Shah and Verma disclose the method of claim 1.
determining a plurality of payment terms
displaying the plurality of payment terms;
receiving a selection of one of the plurality of the payment terms; and
wherein the generating the invoice includes the selected payment term as the recommended payment term.
See prior art rejection of claim 1.
Regarding Claims 8,9,10,12,13,15,16,17,19,20,
See prior art rejections of claims 1,2,3,5,6,1,2,3,5,6
Claims 4,11,18 are rejected under 35 U.S.C. 103 as being unpatentable over Shah 12190345
Verma, “What Are Net Payment Terms & Why Are They Important?”, 7/2024, https://www.highradius.com/resources/Blog/what-are-net-payment-terms-why-are-they-important/
In view of Reid US8175961B2
Regarding Claim 4, Shah and Verma disclose the method of claim 1.
Shah does not explicitly disclose
wherein the stored payment data includes customer country information, the computer implemented method further comprising:
comparing the effectiveness of each of the plurality of payment terms for each of a plurality of countries for various countries; and
wherein the determining the recommended payment term is further based in part on the comparing the effectiveness of each of the plurality of payment terms for each of the plurality of countries for various countries.
Reid is directed to a system for basing financial decisions on retrieved historical transaction information. (Reid, background). Reid discloses that it is known to consider foreign country customer data, when such data is available. (Reid, background, “In addition, as a practical matter, credit information is difficult to obtain and/or may not be current or timely. This is particularly true if the buyers and sellers are in different jurisdictions and/or foreign countries, or if they are new and have not developed suitable transaction histories. In such cases, the sellers or financing entities may not have access to any reliable credit reports, let alone credit reports that are accurate and allow them to make informed decisions relating to specific commercial transactions.”) It would have been obvious to one of ordinary skill in the art before the filing date of the invention to combine Shah and Verma with the foreign data of Reid with the motivation of making better business decisions. Id.
Regarding Claims 11,18
See prior art rejections of claims 4,4
Claims 7,13 are rejected under 35 U.S.C. 103 as being unpatentable over Shah 12190345
Verma, “What Are Net Payment Terms & Why Are They Important?”, 7/2024, https://www.highradius.com/resources/Blog/what-are-net-payment-terms-why-are-they-important/
In view of Chirehdast 8660943
Regarding Claim 7, Shah and Verma disclose the method of claim 1.
generating a customer ranking based in part on a length of relationship and a volume of transactions; and
wherein the determining the recommended payment term is further based in least in part on the customer ranking.
(Chirehdast , Col.21,lns. 24-42, “All pooled credit scores (product specific or borrower centric) exclusively use credit attributes as independent variables for model development. The custom scores, however, predominantly use credit attributes as variables to the model. A few variables and attributes focusing on the customers, and their relationship with the lender, may be used as segmentation or independent variables in the custom score model. (Please note some lending and banking literature refers to independent or segmentation variables as characteristics.) Currently, no credit score uses customer and relationship attributes exclusively or predominantly as input variables. Such customer and relationship attributes measure (A) the depth (volume and balance of business), (B) breadth (how many products), (C) length (how long), and (D) the quality (e.g., activity or recent delinquencies) of relationship the lender or its affiliate financial companies have with the customer or (E) other relevant customer data (for example, marketing segments) to assess the customer's probability of default and payment performance in the future.”)
Regarding Claims 13
See prior art rejections of claims 7
Conclusion
Relevant art not relied on but made of record include
White, “Understanding the Dynamics of Working Capital and DSO”, 8/23, available at https://trovata.io/blog/working-with-capitol-dso/ (“As an example of the importance of DSO, let’s consider an auto mechanic called Big Bob’s Auto Repairs. Big Bob has managed to build up an amazing reputation of honesty and high-quality work. Right now, business is booming and they have a waiting list of customers looking to have their cars repaired. That’s great for Bob, because it means that his company’s revenue is growing strongly. On paper, his revenue, gross profit and EBITDA is up month over month and year over year.
But there’s a problem. Bob’s customers are taking a long time to make payment after the work is done. The cars are being repaired and Bob has been sending customers the invoice to be paid with 7 day payment terms.
Unfortunately, many customers are taking far longer to pay than that, and his DSO is over 30 days. It’s causing Bob major headaches and cash flow problems, because he needs to pay his own suppliers and employees every month. His working capital is always under pressure, because he’s always behind on his own payments.
That means he’s paying additional interest to his suppliers and relying on overdrafts and short term credit to pay his staff. Not ideal at all. For a business that is so successful, it’s causing Bob major stress.
So Bob goes through his finances and realizes that it’s his lengthy DSO which is causing the problem. By identifying the issue, Bob is able to implement processes to avoid it. Now, Bob requires a 25% deposit to start work, and then requires full payment from his customers before he releases their vehicle back to them.
With these new measures in place, Bob’s DSO drops to just 2 days, and his cash flow problems disappear.”)
Ang 20080262919 (“A method is disclosed for offering transaction account consumers with payment term options to pay a minimum amount due early, defer payment into the following payment cycle, and pay a standard amount when due. When generating a periodic billing statement, the invention determines a consumer's eligibility to elect early payment, deferred payment, and regular payment. When a consumer is eligible for early payment, a received payment is compared to a discount rate tier, then a discount amount is calculated and credited to the consumer's account. When the consumer is eligible for deferred payment, the system calculates a new current minimum payment due by multiplying the current non-deferred balance by a predetermined percentage amount and adding the result to the deferred balance. When the consumer is not eligible for deferred payment, the system calculates a new current minimum due by summing the current non-deferred balance with the deferred balance.”)
Santoro CA 2644872 A1 (“Systems and methods are provided to perform an analysis of the accounts receivable of a business. Each component of the accounts receivable is reviewed individually and all factors related to that particular component are accounted for. A data tool is then implemented to analyze the data and to recognize the areas of all of the components that are susceptible to improvement. A strategy is then developed to maximize the efficiency of the accounts receivable.”)
Any inquiry concerning this communication or earlier communications from the examiner should be directed to ALLEN C CHEIN whose telephone number is (571)270-7985. The examiner can normally be reached Monday-Friday 8am -5pm.
Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice.
If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Florian Zeender can be reached at (571) 272-6790. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
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/ALLEN C CHEIN/Primary Examiner, Art Unit 3627
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