PTAB reverses abstract idea rejection of business method patent application – Some key practice tips

There has been much energy focused on the flawed nature of the current Alice/Mayo framework for evaluating patent-eligibility. Even the well-intentioned desires of USPTO director Andrei Iancu’s to move away from this framework has its limits.

In a recent decision, Ex Parte Pasupulati et al, the Board reversed an abstract idea rejection to a claim directed to integrating an API-based mechanism to a merchant’s website without the merchant having to understand the API or having to know how to code in a language specific to the API. The Board rebuffed the Examiner’s position for both steps.

Step 1

Under Step 1, the Board first found that the Examiner had improperly overgeneralized the claims as “payment management in a network” or the general concept of “coding”. Without being able to over simplify the claim, it makes it much more difficult for the claims to be “directed to” an abstract idea.

Next, the Board found that the focus of the claims is not on judicical exceptions (i.e., “do not recite a mathematical algorithm … [n]or do they recite a fundamental economic or longstanding commercial practice” identified as an “abstract idea” by the Supreme Court in its trilogy of Benson, Flook, and Diehr, and its recent duet of Bilski and Alice). Instead, the Board found that the claims provide a particular solution to the particular problem of integrating an API-based mechanism to a merchant’s website without the merchant having to understand the API or having to know how to code in a language specific to the API.

Still, the Board did not have the confidence to rely only on Step 1 in reversing this rejection because “identifying the precise nature of the abstract idea [of Appellants’ claims] is not as straightforward,” it proceeded to Step 2.

Step 2

The Board analogized to DDR Holdings in showing that the claims contain an “inventive concept” for two reasons. The first reason is somewhat related to the step 1 analysis. That is, the Board found that the claims provide a technical solution to a technical problem unique to the Internet. Here it was generating code snippets and files that can be automatically integrated with an online website so that an API-based mechanism can be used with the online website.

The second reason analogized to Bascom. The Board found that the combination of Appellants’ claim elements, like the claims in Bascom, provides a practical application of integrating an API based mechanism to a merchant’s website without the merchant having to understand the API or having to know how to code in a language specific to the APL This transforms any abstract idea (i.e., “coding” or “payment management in network”) into “a particular, practical application of that abstract idea.”

Conclusion

Despite the chorus of criticism of the Alice/Mayo framework continuing to grow, it is the law of the land. That being said, there are ways to navigate through its complexities. This decision nicely shows practice tips that can be used for similarly rejected applications. For step 1, one practice tip is not to let the examiner oversimplify what the claims are directed to. Consider focusing of the claims with its technical features as a problem to solve. For step 2, if applicable, consider showing how the claimed invention is solving a problem unique to a computer-specific environment (e.g., the Internet). Lastly, consider how the combination of claim elements might transform the alleged abstract idea into a particular, practical application.

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