Anahita Hassanzadeh et al.

Patent Trials and Appeals Board

Jul 30, 2019

13741817 - (D) (P.T.A.B. Jul. 30, 2019)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
13/741,817 01/15/2013 Anahita HASSANZADEH 2011-0094US01 1886
74739 7590 07/30/2019
Potomac Law Group, PLLC (Oracle International)
8229 Boone Boulevard
Suite 430
Vienna, VA 22182
EXAMINER
SWARTZ, STEPHEN S
ART UNIT PAPER NUMBER
3623
NOTIFICATION DATE DELIVERY MODE
07/30/2019 ELECTRONIC
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address(es):
bgoldsmith@potomaclaw.com
eofficeaction@appcoll.com
patents@potomaclaw.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte ANAHITA HASSANZADEH, ANDREW VAKHUTINSKY,
and KIRAN PANCHAMGAM1
____________

Appeal 2017-010683
Application 13/741,817
Technology Center 3600
____________

Before BIBHU R. MOHANTY, AMEE A. SHAH, and
MATTHEW S. MEYERS, Administrative Patent Judges.

MOHANTY, Administrative Patent Judge.

DECISION ON APPEAL
STATEMENT OF THE CASE
The Appellants seek our review under 35 U.S.C. § 134(a) of the final
rejection of claims 1, 3–7, 9–13, 15–18, and 22–24, which are all the claims
pending in the application. We have jurisdiction under 35 U.S.C. § 6(b).

SUMMARY OF THE DECISION
We AFFIRM.

1 The real party in interest is Oracle International Corporation. (App. Br. 2).
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THE INVENTION
The Appellants’ claimed invention is directed to a system that
optimizes product pricing (Spec., para. 1). Claim 7, reproduced below with
the italics added, is representative of the subject matter on appeal.

7. A computer implemented method for determining
markdown product pricing for a plurality of items over a plurality of
time periods, the method comprising:
receiving a non-linear time-dependent problem, wherein the
non-linear time-dependent problem comprises a demand model that
expresses a demand for an item as a non-linear function of item
prices;
determining approximate inventory levels for each item in each
time period;
for a plurality of pairs of items having a common product
category, for each of the pairs of items, determining coefficients for a
change in demand of a first product at each of the plurality of time
periods when a price of a second product is changed from a base
price level to other price levels on a price ladder using initial prices
and initial approximate inventory levels, wherein the determining
coefficients comprises

generating an approximate Mixed Integer Linear Programming
(MILP) problem comprising a change of demand based on a sum of
the determined coefficients for the plurality of pair of items, and
further comprising generating binary decision variables that
indicate whether price variables were assigned to a price on a
corresponding price ladder;
solving the MILP problem to generate revised prices and
revised inventory levels, the solving comprising setting a solved price
of each item to a non-zero binary variable of the generated binary
decision variables;
when the generated revised prices and revised inventory levels
do not satisfy a convergence criteria after the solving, repeating the
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determining coefficients, the generating the approximate MILP
problem and the solving the MILP problem using the
revised prices and the revised inventory levels as the initial prices and
initial approximate inventory levels until the convergence criteria is
satisfied;
when the convergence criteria is satisfied, assigning the revised
prices as the markdown product pricing.

THE REJECTION
The following rejection is before us for review:
Claims 1, 3–7, 9–13, 15–18, and 22–24 are rejected under 35 U.S.C.
§ 101 as being directed to non-statutory subject matter.

FINDINGS OF FACT
We have determined that the findings of fact in the Analysis section
below are supported at least by a preponderance of the evidence.2

ANALYSIS
Rejection under 35 U.S.C. § 101
The Appellants argue that the rejection of claim 7 is improper because
the claim is not directed to an abstract idea (App. Br. 4–8). The Appellants
argue further that the claim is “significantly more” than the alleged abstract
idea (App. Br. 4–10; Reply Br. 2, 3). The Appellants also argue the claims
do not preempt the abstract idea (App. Br. 10, 11).
In contrast, the Examiner has determined that the rejection of record is
proper (Final Action 7–15; Ans. 3–19).

2 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
(explaining the general evidentiary standard for proceedings before the
Patent Office).
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We agree with the Examiner. An invention is patent eligible if it
claims a “new and useful process, machine, manufacture, or composition of
matter.” 35 U.S.C. § 101. However, the Supreme Court has long interpreted
35 U.S.C. § 101 to include implicit exceptions: “[l]aws of nature, natural
phenomena, and abstract ideas” are not patentable. E.g., Alice Corp. v. CLS
Bank Int’l, 573 U.S. 208, 216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court’s two-step framework, described in Mayo
and Alice. Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework,
we first determine what concept the claim is “directed to.” See Alice,
573 U.S. at 219 (“On their face, the claims before us are drawn to the
concept of intermediated settlement, i.e., the use of a third party to mitigate
settlement risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010)
(“Claims 1 and 4 in petitioners’ application explain the basic concept of
hedging, or protecting against risk . . . .”).
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
(1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
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252, 267–68 (1854))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that “[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula.” Diehr, 450 U.S. at 176; see also id. at 191 (“We
view respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, and this principle cannot be circumvented by attempting
to limit the use of the formula to a particular technological environment.”
Id. (internal citation omitted) (citing Benson and Flook); see, e.g., id. at 187
(“It is now commonplace that an application of a law of nature or
mathematical formula to a known structure or process may well be deserving
of patent protection.”).
The PTO recently published revised guidance on the application of §
101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg.
50 (Jan. 7, 2019) (“Guidance”). Under the Guidance, we first look to
whether the claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
organizing human activity such as a fundamental economic
practice, or mental processes); and
(2) additional elements that integrate the judicial exception into
a practical application (see MPEP § 2106.05(a)–(c), (e)–(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then look to whether the claim:
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(3) adds a specific limitation beyond the judicial exception that
is not “well-understood, routine, conventional” in the field (see
MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
See Guidance.

If the claim is “directed to” an abstract idea, we turn to the second
step of the Alice and Mayo framework, where “we must examine the
elements of the claim to determine whether it contains an ‘“inventive
concept”’ sufficient to ‘transform’ the claimed abstract idea into a patent-
eligible application.” Alice, 573 U.S. at 221 (citation omitted). “A claim
that recites an abstract idea must include ‘additional features’ to ensure ‘that
the [claim] is more than a drafting effort designed to monopolize the
[abstract idea].’” Id. (alterations in original) (quoting Mayo, 566 U.S. at 77).
“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
that abstract idea into a patent-eligible invention.” Id.
Here, the Examiner has determined that the claim directed to the
concept of determining a markdown in product pricing for multiple items
over a period of time and is directed to an abstract idea (Final Act. 7). We
substantially agree with the Examiner in this regard as claim 7 is directed to
the steps in italics in the claim above. These steps are directed to the
concept of determining markdown product pricing for a plurality of items
using linear programming which is fundamental economic practice and
drawn to an abstract idea. In Versata Dev. Grp., Inc. v. SAP Am., Inc., 793
F.3d 1306, 1333 (Fed. Cir. 2015), it was held that determining a price, using
organizational and product group hierarchies was held to be an abstract idea.
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In OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, (Fed. Cir. 2015) at
1363, it was held that offer-based price optimization was directed to an
abstract idea. See Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350
(Fed. Cir. 2016) (collecting information, analyzing it, and displaying results
from certain results of the collection and analysis was held to be an abstract
idea).
Thus, we consider the claim to recite an abstract idea as identified
above
Turning to the second step of the Alice and Mayo framework, we
determine that the claim does not contain an inventive concept sufficient to
“transform” the abstract nature of the claim into a patent-eligible application.
The claims do not improve computer functionality, improve another field or
technology, utilize a particular machine, or effect a physical transformation.
Rather, we determine that nothing in the claims imposes a meaningful limit
on the judicial exception, such that the claims are more than a drafting effort
to monopolize the judicial exception.
For example, in claim 7 the steps of [1] “receiving a non-linear time-
dependent problem”; [2] “determining approximate inventory levels for each
item in each time period”; [3] “generating an approximate Mixed Integer
Linear Programming (MILP) problem comprising a change of demand”; [4]
“solving the MILP problem to generate revised prices and revised inventory
levels”; and [5] “assigning the revised prices as the markdown product
pricing” are merely conventional steps performed by a generic computer that
do not improve computer functionality. That is, these recited steps [1]–[5]
“do not purport to improve the functioning of the computer itself” but are
merely generic functions performed by a conventional processor. Likewise,
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these same steps [1]–[5] listed above do not improve the technology of the
technical field and merely use generic computer components and functions
to perform the steps. Also, the recited method steps [1]–[5] above do not
require a “particular machine” and can be utilized with a general purpose
computer, and the steps performed are purely conventional. In this case the
general purpose computer is merely an object on which the method operates
in a conventional manner and does not provide “significantly more” to the
claim beyond a nominal or insignificant execution of the method. Further,
the claim as a whole fails to effect any particular transformation of an article
to a different state in a manner that would render the claim “significantly
more” than the abstract idea. The recited steps [1]–[5] fail to provide
meaningful limitations to limit the judicial exception and rather are mere
instructions to apply the method to a generic computer. Considering the
elements of the claim both individually and as “an ordered combination” the
functions performed by the computer system at each step of the process are
purely conventional. Each step of the claimed method does no more than
require a generic computer to perform a generic computer function.
Further, the claim fails to add a specific limitation beyond the judicial
exception that is not well-understood, routine, and conventional in the field.
Rather, the claim uses well-understood, routine, and conventional activities
previously known in the art at a high level of generality to the judicial
exception. The Specification at paragraphs 22–25 for example, describes
using conventional computer components such as a processor, memory, and
a network in a conventional manner. The functions of a computer to
implement the method are well-understood, routine, and conventional
functions in the field of computers. The Appellants have not shown these
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claimed generic computer components, which are used to implement the
claimed method, are not well understood, routine, or conventional in the
field. The Appellants have not demonstrated that the computer components
described in the Specification at paragraphs 22–25 for instance are not
general purpose computer components beyond those known to be routine
and conventional to perform similar functions in a well-understood manner.
The Appellants in the Appeal Brief at page 8 have also cited to McRO,
Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016), but
the claims in that case are distinguished from this case in being directed to
rules for lip sync and facial expression animation.
For these above reasons, the rejection of claim 7 is sustained. The
Appellants have presented the same arguments for the remaining claims
which are drawn to similar subject matter and the rejection of these claims is
sustained for the same reasons given above.

CONCLUSIONS OF LAW
We conclude that Appellants have not shown that the Examiner erred
in rejecting claims 1, 3–7, 9–13, 15–18, and 22–24 under 35 U.S.C. § 101.

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DECISION
The Examiner’s rejection of claims 1, 3–7, 9–13, 15–18, and 22–24 is
sustained.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv). See
37 C.F.R. § 41.50(f).

AFFIRMED