My apologies - I am not well versed with the US patent process but I thought that the detailed description saying:

"Described herein are systems and methods for cartoon face generation. In one implementation, an exemplary system generates a cartoon face from an original image, such as a photo that portrays a user's face. The style of cartoon face resembles the likeness of the person portrayed in the original photo more than cartoons generated by conventional vector-based cartooning techniques. The cartoon faces thus achieved render an attractive facial appearance and thus have wide applicability in art, gaming, and messaging applications in which a cartoon, avatar, or action figure is desired that captures the user's appearance with a pleasing degree of realism but without exaggerated comedy or caricature. For example, a user can insert a cartoon or graphic of the user's own face into a game or an instant messaging forum. The exemplary system achieves pleasing cartoon faces by applying pixel-based methods separately to some parts of the cartooning process. "

pretty much described a method of generating a cartoon image from a picture - hence the suggestion of prior art.

I am sure I have seen those "photographic" type booths in service stations that do cartoony caricatures of people - are these not prior art? and what about avatars for forums - does Microsoft now own the patent on these? What about services like befunky? http://www.befunky.com are they now going to have to pay MS a license fee for continuing to provide services?