Clark, Andrew et al.Download PDFPatent Trials and Appeals BoardOct 23, 201913189128 - (D) (P.T.A.B. Oct. 23, 2019) Copy Citation 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. 13/189,128 07/22/2011 Andrew Clark 64NV-215262 9598 133759 7590 10/23/2019 Sheppard Mullin Richter & Hampton LLP 650 Town Center Drive, 10th Floor Costa Mesa, CA 92626 EXAMINER BARTLEY, KENNETH ART UNIT PAPER NUMBER 3693 NOTIFICATION DATE DELIVERY MODE 10/23/2019 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): SheppardMullin_Pair@firsttofile.com dmipdocketing@sheppardmullin.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte ANDREW CLARK and JEFF KENYON ____________ Appeal 2018-000385 Application 13/189,128 Technology Center 3600 ____________ Before NINA L. MEDLOCK, TARA L. HUTCHINGS, and MATTHEW S. MEYERS, Administrative Patent Judges. MEDLOCK, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s final rejection of claims 1–31. We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. 1 We use the term “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42. Our decision references Appellant’s Appeal Brief (“Appeal Br.,” filed April 25, 2017) and the Examiner’s Answer (“Ans.,” mailed August 1, 2017) and Final Office Action (“Final Act.,” mailed October 25, 2016). Appellant identifies the real party in interest as Thompson Reuters (Markets) LLC. Appeal Br. 2. Appeal 2018-000385 Application 13/189,128 2 CLAIMED INVENTION Appellant describes that the invention “generally relates to a system and method for constructing outperforming portfolios relative to target benchmarks” (Spec. ¶ 1). Claims 1 and 14 are the independent claims on appeal. Claim 14, reproduced below with bracketed notations added, is illustrative of the claimed subject matter: 14. A method for constructing outperforming portfolios relative to a target benchmark index, the method being implemented in a computer system having one or more physical processors executing one or more computer program instructions which, when executed, perform the method, the method comprising: [(a)] obtaining, by one or more processors, one or more constraints related to a portfolio to be generated, wherein the portfolio to be generated is associated with one or more objectives; [(b)] providing, by the one or more processors, as an input to a data preparation engine, information related to the target benchmark index, the target benchmark index having a plurality of constituents, which includes at least a first constituent and a second constituent; [(c)] receiving by the one or more processors, as an output of the data preparation engine, a first rebalance list including at least the first constituent and the second constituent; [(d)] providing by the one or more processors, as an input to a rebalance engine, the first rebalance list; [(e)] eliminating, by the one or more processors, via the rebalance engine, the first constituent from the first rebalance list based on the one or more constraints and a first multi-factor score for the first constituent, wherein the first multi-factor score is based on the first constituent’s price-to-earnings ratio, price-to-book ratio, or cash flow; Appeal 2018-000385 Application 13/189,128 3 [(f)] generating, by the one or more processors via the rebalance engine, a second rebalance list that includes one or more candidate constituents based on the elimination, wherein the second rebalance list includes at least the second constituent, which was not eliminated; [(g)] providing, by the one or more processors via the rebalance engine, the second rebalance list as an input to the multi-objective evolutionary algorithm; [(h)] analyzing, by the one or more processors via the rebalance engine based on the multi-objective evolutionary algorithm, the one or more candidate constituents in the second rebalance list and produce a solution set having multiple proposed portfolios that individually include candidate constituent subsets selected from the one or more candidate constituents; [(i)] determining, by the one or more processors via the rebalance engine, multiple tangency portfolios based on a mean variance optimization of the multiple proposed portfolios, wherein a given tangency portfolio includes an allocation of weights to the candidate constituent subsets, and wherein a given weight indicates a proportion of the given tangency portfolio that a given candidate constituent occupies; [(j)] identifying, by the one or more processors via the rebalance engine, a subset of the multiple tangency portfolios that satisfy the one or more established objectives; and [(k)] selecting, by the one or more processors via the rebalance engine, one of the subset of the multiple tangency portfolios that best satisfy [sic] the one or more established objectives to be the portfolio to be created. REJECTION Claims 1–31 are rejected under 35 U.S.C. § 101 as directed to a judicial exception without significantly more. Appeal 2018-000385 Application 13/189,128 4 ANALYSIS Appellant argues the pending claims as a group (Appeal Br. 9–23). We select independent claim 14 as representative. The remaining claims, thus, stand or fall with claim 14, see 37 C.F.R. §41.37(c)(1)(iv), except to the extent that the patent eligibility of dependent claims 2–13 and 15–31 is affected by Appellant’s additional, separate arguments with respect to these dependent claims (see Appeal Br. 23). Under 35 U.S.C. § 101, an invention is patent eligible if it claims a “new and useful process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101 to include an implicit exception: “[l]aws of nature, natural phenomena, and abstract ideas” are not patentable. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014). The Supreme Court, in Alice, reiterated the two-step framework previously set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), “for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Alice Corp., 573 U.S. at 217. The first step in that analysis is to “determine whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. If the claims are not directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry ends. Otherwise, the inquiry proceeds to the second step where the elements of the claims are considered “individually and ‘as an ordered combination’” to determine whether there are additional elements that “‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 566 U.S. at 79, 78). This is “a search for an ‘inventive concept’ — i.e., an Appeal 2018-000385 Application 13/189,128 5 element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’” Id. at 217–18 (alteration in original). In rejecting the pending claims under 35 U.S.C. § 101, the Examiner determined that the claims are directed to “using an algorithm to select a portfolio” (Final Act. 5). Specifically addressing independent claim 14, the Examiner determined that the method steps “describe the concept of selecting a best portfolio that satisf[ies] constraints” — a concept that the Examiner concluded is not meaningfully different from other concepts that the courts have held abstract (id. at 6). The Examiner also determined that claim 14 does not include additional elements that are sufficient to amount to significantly more than the abstract idea itself (id.), and that the remaining claims are patent ineligible for substantially similar reasons (id. at 6–8). The Examiner additionally noted that “the claims could be performed with a pen and paper as they are just processing an algorithm to select a portfolio and as such would be abstract also as an idea of itself” (id. at 8). The Examiner also opined that Appellant’s Specification “provides further support that the claims are related to the abstract concepts of the economy and commerce as well as the abstract concept of mathematical algorithms” (id. at 8–9 (citing Spec. ¶¶ 1, 22)). After Appellant’s briefs were filed, and the Examiner’s Answer mailed, the U.S. Patent and Trademark Office (the “USPTO”) published revised guidance on January 7, 2019 for use by USPTO personnel in evaluating subject matter eligibility under 35 U.S.C. § 101. 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50, 57 (Jan. 7, 2019) (the “2019 Revised Guidance”). That guidance revised the Appeal 2018-000385 Application 13/189,128 6 USPTO’s examination procedure with respect to the first step of the Mayo/Alice framework by (1) “[p]roviding groupings of subject matter that is considered an abstract idea”; and (2) clarifying that a claim is not “directed to” a judicial exception if the judicial exception is integrated into a practical application of that exception. Id. at 50. The 2019 Revised Guidance, by its terms, applies to all applications, and to all patents resulting from applications, filed before, on, or after January 7, 2019. Id.2 Step One of the Mayo/Alice Framework (2019 Revised Guidance, Step 2A) The first step in the Mayo/Alice framework, as mentioned above, is to determine whether the claims at issue are “directed to” a patent-ineligible concept, e.g., an abstract idea. Alice Corp., 573 U.S. at 217. This first step, as set forth in the 2019 Revised Guidance (i.e., Step 2A), is a two-prong test; in Step 2A, Prong One, we look to whether the claim recites a judicial exception, e.g., one of the following three groupings of abstract ideas: (1) mathematical concepts; (2) certain methods of organizing human activity, e.g., fundamental economic principles or practices, commercial or legal interactions; and (3) mental processes. 2019 Revised Guidance, 84 Fed. Reg. at 54. If so, we next consider whether the claim includes additional elements, beyond the judicial exception, that “integrate the 2 The 2019 Revised Guidance supersedes MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) § 2106.04(II) and also supersedes all versions of the USPTO’s “Eligibility Quick Reference Sheet Identifying Abstract Ideas.” See 2019 Revised Guidance, 84 Fed. Reg. at 51 (“Eligibility-related guidance issued prior to the Ninth Edition, R-08.2017, of the MPEP (published Jan. 2018) should not be relied upon.”). Accordingly, Appellant’s arguments challenging the sufficiency of the Examiner’s rejection will not be addressed to the extent those arguments are based on now superseded USPTO guidance. Appeal 2018-000385 Application 13/189,128 7 [judicial] exception into a practical application,” i.e., that apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception (“Step 2A, Prong Two”). Id. at 54–55. Only if the claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application do we conclude that the claim is “directed to” the judicial exception, e.g., an abstract idea. We are not persuaded by Appellant’s arguments that the Examiner overgeneralized the concept to which claim 14 is directed (Appeal Br. 9– 10)3 or that the Examiner otherwise erred in determining that claim 14 is directed to an abstract idea (id. at 10–16). The Federal Circuit has explained that “the ‘directed to’ inquiry applies a stage-one filter to claims, considered in light of the specification, based on whether ‘their character as a whole is directed to excluded subject matter.’” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). It asks whether 3 The Examiner’s characterization of claim 14 is, in our view, fully consistent with the Specification, including the claim language. That the claim includes more words than the phrase the Examiner used to articulate the abstract idea, and that the Examiner, thus, articulates the abstract idea at a higher level of abstraction than would Appellant is an insufficient basis to persuasively argue that the claim language has been mischaracterized. See Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016) (“An abstract idea can generally be described at different levels of abstraction. As the Board has done, the claimed abstract idea could be described as generating menus on a computer, or generating a second menu from a first menu and sending the second menu to another location. It could be described in other ways, including, as indicated in the specification, taking orders from restaurant customers on a computer.”). Appeal 2018-000385 Application 13/189,128 8 the focus of the claims is on a specific improvement in relevant technology or on a process that itself qualifies as an “abstract idea” for which computers are invoked merely as a tool. See id. at 1335–36. Here, the Specification (including the claim language) makes clear that the claims focus on an abstract idea, and not on any improvement to computer technology and/or functionality. The Specification is entitled “SYSTEM AND METHOD FOR CONSTRUCTING OUTPERFORMING PORTFOLIOS RELATIVE TO TARGET BENCHMARKS,” and describes, in the Background section, that “[m]any financial firms, portfolio and fund managers, and individual investors . . . have historically attempted to develop investment strategies to generate returns that outperform . . . the returns that would otherwise be obtained from simply investing in a benchmark index” (Spec. ¶ 2). However, according to the Specification, developing effective investment strategies tends to be notoriously difficult due to the myriad factors that underlie how securities perform (id. ¶ 3). The Specification, thus, explains, that although “investors are always seeking new and better ways to outperform the broader market . . . existing systems tend to fall short in providing financial firms, portfolio and fund managers, and individual investors with the tools needed to achieve that elusive objective” (id. ¶ 4). The claimed invention is ostensibly intended to address the deficiencies of these existing systems by providing a system and method that can be used to construct outperforming stock portfolio relative to target benchmarks while satisfying the “real-world constraints that portfolio managers often have to deal with when building a stock portfolio” (id. ¶ 5). Claim 14, thus, recites a computer-implemented method for constructing Appeal 2018-000385 Application 13/189,128 9 outperforming portfolios relative to a target benchmark index by: (1) “obtaining, by . . . one or more processors, one or more constraints related to a portfolio to be generated, wherein the portfolio to be generated is associated with one or more objectives” (step (a)); (2) providing a target benchmark index having a plurality of constituents to a data preparation engine, and receiving, from the data preparation engine, a rebalance list comprising a subset of the constituents, i.e., providing, by the one or more processors, as an input to a data preparation engine, information related to the target benchmark index, the target benchmark index having a plurality of constituents, which includes at least a first constituent and a second constituent; [and] receiving, by the one or more processors, as an output of the data preparation engine, a first rebalance list including at least the first constituent and the second constituent (steps (b) and (c)); and (3) providing the rebalance list to a rebalance engine that employs mean variance optimization calculations and a multi-objective evolutionary algorithm to produce one or more potentially feasible portfolios that satisfy the portfolio objectives, and selecting, as the portfolio to be created, the one of the potentially feasible portfolios that best satisfies the portfolio objectives, i.e., providing by the one or more processors, as an input to a rebalance engine, the first rebalance list; eliminating, by the one or more processors, via the rebalance engine, the first constituent from the first rebalance list based on the one or more constraints and a first multi-factor score for the first constituent, wherein the first multi-factor score is based on the first constituent’s price-to-earnings ratio, price-to- book ratio, or cash flow; generating, by the one or more processors via the rebalance engine, a second rebalance list that includes one or more candidate constituents based on the elimination, wherein Appeal 2018-000385 Application 13/189,128 10 the second rebalance list includes at least the second constituent, which was not eliminated; providing, by the one or more processors via the rebalance engine, the second rebalance list as an input to the multi- objective evolutionary algorithm; analyzing, by the one or more processors via the rebalance engine based on the multi-objective evolutionary algorithm, the one or more candidate constituents in the second rebalance list and produce a solution set having multiple proposed portfolios that individually include candidate constituent subsets selected from the one or more candidate constituents; determining, by the one or more processors via the rebalance engine, multiple tangency portfolios based on a mean variance optimization of the multiple proposed portfolios, wherein a given tangency portfolio includes an allocation of weights to the candidate constituent subsets, and wherein a given weight indicates a proportion of the given tangency portfolio that a given candidate constituent occupies; identifying, by the one or more processors via the rebalance engine, a subset of the multiple tangency portfolios that satisfy the one or more established objectives; and selecting, by the one or more processors via the rebalance engine, one of the subset of the multiple tangency portfolios that best satisfy [sic] the one or more established objectives to be the portfolio to be created. (steps (d) through (k)). Simply put, we agree with the Examiner that claim 14 recites selecting a portfolio that best meets investor constraints using a mathematical algorithm, i.e., mathematical calculations, which are mathematical concepts and, therefore, an abstract idea. See 2019 Revised Guidance, 84 Fed. Reg. at 52. See also SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018) (holding that claims to a “series of mathematical calculations based on selected information” are directed to abstract ideas); Digitech Image Techs., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344, 1350 (Fed. Cir. 2014) (holding that claims to a “process of Appeal 2018-000385 Application 13/189,128 11 organizing information through mathematical correlations” are directed to an abstract idea); Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1280 (Fed. Cir. 2012) (identifying the concept of “managing a stable value protected life insurance policy by performing calculations and manipulating the results” as an abstract idea). Having concluded that claim 14 recites a judicial exception, i.e., an abstract idea (Step 2A, Prong 1), we next consider whether the claim recites additional elements that integrate the judicial exception into a practical application (Step 2A, Prong 2). The only additional elements recited in claim 14, beyond the abstract idea, are the claimed “one or more processors,” “data preparation engine,” and “rebalance engine” — elements that, as the Examiner observes (Final Act. 6), are recited at a high level of generality, i.e., as generic computer components performing generic computer functions (see, e.g., Spec. ¶ 22). We find no indication in the Specification, nor does Appellant direct us to any indication, that the operations recited in claim 14 require any specialized computer hardware or other inventive computer components, i.e., a particular machine, invoke any assertedly inventive programming, or that the claimed invention is implemented using other than generic computer components to perform generic computer functions. See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (“[A]fter Alice, there can remain no doubt: recitation of generic computer limitations does not make an otherwise ineligible claim patent-eligible.”). We also find no indication in the Specification that the claimed invention effects a transformation or reduction of a particular article to a different state or thing. Nor do we find anything of record that attributes an Appeal 2018-000385 Application 13/189,128 12 improvement in technology and/or a technical field to the claimed invention or that otherwise indicates that the claimed invention integrates the abstract idea into a “practical application,” as that phrase is used in the 2019 Revised Guidance.4 Appellant argues that the claims are not merely directed to a patent- ineligible concept and that the claims instead recite a “specific technical solution” that addresses “multi-objective optimization problems in the context of stock portfolios” (Appeal Br. 10–11). Yet, to the extent Appellant maintains that the claims are not directed to an abstract idea because the claims are “specific,” we note that a specific abstract idea is still an abstract idea. For example, “cases have not distinguished among different laws of nature according to whether or not the principles they embody are sufficiently narrow.” Mayo, 566 U.S. at 88–89 (citing Parker v. Flook, 437 U.S. 584 (1978) (holding narrow mathematical formula unpatentable)). See also, e.g., Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1321 (Fed. Cir. 2016) (“A narrow claim directed to an abstract idea, however, is not necessarily patent-eligible.”); BSG Tech LLC v. BuySeasons, Inc., 899 F.3d 1281, 1287 (Fed. Cir. 2018) (“[A] claim is not patent eligible merely because it applies an abstract idea in a narrow way.”). 4 The 2019 Revised Guidance references MPEP § 2106.05(a)–(c) and (e) in describing the considerations that are indicative that an additional element or combination of elements integrates the judicial exception, e.g., the abstract idea, into a practical application. 2019 Revised Guidance, 84 Fed. Reg. at 55. If the recited judicial exception is integrated into a practical application, as determined under one or more of these MPEP sections, the claim is not “directed to” the judicial exception. Appeal 2018-000385 Application 13/189,128 13 We also are not persuaded by Appellant’s argument that the pending claims are analogous to those held patent eligible in DDR Holdings (Appeal Br. 13–15). There, the claims were directed to retaining website visitors, and in particular to a system that modified the conventional web browsing experience by directing a user of a host website, on clicking an advertisement, to a “store within a store” on the host website, rather than to the advertiser’s third-party website. DDR Holdings, 773 F.3d at 1257–58. The court determined that “the claims address a business challenge (retaining website visitors) [that] is a challenge particular to the Internet.” Id. at 1257. The court also determined that the invention was “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks,” and that the claimed invention did not simply use computers to serve a conventional business purpose. Id. Rather, there was a change to the routine, conventional functioning of Internet hyperlink protocol. Id. Appellant asserts here that, like the claims at issue in DDR Holdings, the present claims recite “a technical solution to . . . a multi-objective optimization problem of constructing an outperforming stock portfolio” (Appeal Br. 14). Appellant, thus, maintains that by “unconventionally generating multiple rebalance lists based on constraints received by the system, providing a generated rebalance list to a multi-objective evolutionary algorithm to produce a solution set of proposed portfolios, and identifying a proposed portfolio that satisfies one or more established objectives, a technical solution to the problem is achieved” (id. at 14–15). Appellant argues that “[a]s such, the claims are not directed to a patent- ineligible abstract idea, but are instead directed to a solution necessarily Appeal 2018-000385 Application 13/189,128 14 rooted in computer technology in order to overcome a problem specifically arising from two or more objectives subject to certain constraints or trade- offs” (id.). We are not persuaded that constructing a stock portfolio designed to outperform a selected target benchmark index is a challenge particular to computer networks or one necessarily rooted in computer technology. Constructing stock portfolios to satisfy particular investor objectives existed before, and still exists outside computers and computer technology. Indeed, the Specification acknowledges that financial firms, portfolio and fund managers, and individual investors have “historically attempted to develop investment strategies to generate returns that outperform or beat the returns that would otherwise be obtained from simply investing in a benchmark index” (Spec. ¶ 2). Also, unlike the situation in DDR Holdings, there is no indication here that the claimed “one or more processors” are used other than in their normal, expected, and routine manner for receiving, storing, and processing information. Citing the Federal Circuit’s decision in McRO, Inc. v. Bandai Namco Games America, Inc., 837 F.3d 1299 (Fed. Cir. 2016), Appellant asserts that, in applying step one of the Mayo/Alice framework, “the specificity and the particularity of the functions and process” recited by the claims must be taken into account (Appeal Br. 16). Appellant maintains that the present claims are similar to the claims at issue in McRO because the claim recitations relate to “specifically and particularly applying rules (e.g., computer logic) that improve the efficiency and accuracy of a computer in automating the task of selecting outperforming portfolios relative to a target benchmark index” (id.). Yet, there is a fundamental difference between Appeal 2018-000385 Application 13/189,128 15 computer functionality improvements, on the one hand, and uses of existing computers as tools to perform a particular task, on the other. Indeed, the Federal Circuit applied this distinction in Enfish in rejecting a § 101 challenge at the step one stage in the Alice analysis because the claims at issue focused on a specific type of data structure, i.e., a self-referential table, designed to improve the way a computer carries out its basic functions of storing and retrieving data, and not on asserted advances in the uses to which existing computer capabilities could be put. Id. at 1335–36. Automating the task of selecting outperforming portfolios relative to a target benchmark index does not concern an improvement to computer capabilities but instead relates to the implementation of a task for which a computer is used in its ordinary capacity. In McRO, the Federal Circuit concluded that the claim, when considered as a whole, was directed to a “technological improvement over the existing, manual 3-D animation techniques” and used limited rules in a process “specifically designed to achieve an improved technological result in conventional industry practice.” McRO, 837 F.3d at 1316. In particular, the Federal Circuit found that the claimed rules allow computers to produce accurate and realistic lip synchronization and facial expressions in animated characters that previously could only be produced by human animators. Id. at 1313. Appellant has not identified any analogous improvement here that is attributable to the claimed invention. Generating multiple rebalance lists based on inventor constraints and providing a generated rebalance list to a multi-objective evolutionary algorithm to produce a set of proposed portfolios, from which an optimal portfolio can be selected, may well Appeal 2018-000385 Application 13/189,128 16 improve a business process, i.e., constructing an outperforming stock portfolio. But, we are not persuaded that it achieves an improved technological result. Finally, we are not persuaded of Examiner error to the extent Appellant maintains that the present claims are patent eligible because they do not “preempt other approaches and/or methods for ‘using an algorithm to select a portfolio’” (Appeal Br. 16). Although the Supreme Court has described “the concern that drives [the exclusion of abstract ideas from patent-eligible subject matter] as one of pre-emption,” Alice Corp., 573 U.S. at 216, characterizing preemption as a driving concern for patent eligibility is not the same as characterizing preemption as the sole test for patent eligibility. “The Supreme Court has made clear that the principle of preemption is the basis for the judicial exceptions to patentability” and “[f]or this reason, questions on preemption are inherent in and resolved by the § 101 analysis.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (citing Alice Corp., 573 U.S. at 216). “[P]reemption may signal patent ineligible subject matter, [but] the absence of complete preemption does not demonstrate patent eligibility.” Id. We conclude, for the reasons outlined above, that claim 14 recites a mathematical concept, i.e., an abstract idea, and that the additional elements recited in the claim are no more than generic components used as tools to perform the recited abstract idea. As such, they do not integrate the abstract idea into a practical application. See Alice Corp., 573 U.S. at 223–24 (“[W]holly generic computer implementation is not generally the sort of ‘additional featur[e]’ that provides any ‘practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] Appeal 2018-000385 Application 13/189,128 17 itself.’” (quoting Mayo, 566 U.S. at 77)). Accordingly, we agree with the Examiner that claim 14 is directed to an abstract idea. Step Two of the Mayo/Alice Framework (2019 Revised Guidance, Step 2B) Having determined under step one of the Mayo/Alice framework that claim 14 is directed to an abstract idea, we next consider under Step 2B of the 2019 Revised Guidance, the second step of the Mayo/Alice framework, whether claim 14 includes additional elements or a combination of elements that provides an “inventive concept,” i.e., whether the additional elements amount to “significantly more” than the judicial exception itself. 2019 Revised Guidance, 84 Fed. Reg. at 56. Appellant points to the Federal Circuit’s holding, in BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016), that an inventive concept can be found in the non-conventional and non-generic arrangement of known conventional pieces (Appeal Br. 17). And Appellant argues that the present claims, like those in BASCOM, recite significantly more than the alleged abstract idea (id.). Yet, we can find no parallel between claim 14 and the claims at issue in BASCOM. In BASCOM, the Federal Circuit determined that the claimed installation of a filtering tool at a specific location, remote from the end- users, with customizable filtering features specific to each end user provided an inventive concept in that it gave the filtering tool both the benefits of a filter on a local computer and the benefits of a filter on the ISP server. BASCOM, 827 F.3d at 1350. The court, thus, held that the second step of the Mayo/Alice framework was satisfied because the claimed invention “represents a ‘software-based invention[ ] that improve[s] the performance of the computer system itself.’” Id. at 1351 (stating that like DDR Holdings, Appeal 2018-000385 Application 13/189,128 18 where the patent “claimed a technical solution to a problem unique to the Internet,” the patent in BASCOM claimed a “technology-based solution . . . to filter content on the Internet that overcomes existing problems with other Internet filtering systems . . . making it more dynamic and efficient”) (internal citations omitted). Appellant asserts here that the claims recite “a particular combination of specific features that amount[s] to . . . a computer platform that provides a technical solution for multi-objective optimization problems, including selecting an outperforming stock portfolio relative to a target benchmark index” (Appeal Br. 17). Yet, Appellant does not identify, and we do not find, any improvement to computer technology analogous to the ordered combination described in BASCOM or any additional element or elements recited in claim 14 that yield an improvement in the functioning of a computer, or an improvement to another technology or technical field. Appellant further directs our attention to Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1302 (Fed. Cir. 2016) (id. at 18–19). And Appellant argues that, like the claims in Amdocs, the present claims are “tied to the particular architecture described in the instant specification,” i.e., the architecture of system 100, including “a data preparation engine 120 and a rebalance engine 130 comprising a candidate constituent engine 140 and a optimization engine 160” (id. at 19). Appellant’s reliance on Amdocs is misplaced. In Amdocs, the Federal Circuit held that the claim at issue was patent eligible because it “entail[ed] an unconventional technological solution (enhancing data in a distributed fashion) to a technological problem (massive record flows which previously required massive databases).” Appeal 2018-000385 Application 13/189,128 19 Amdocs, 841 F.3d at 1300. The court explained that the claim was “tied to a specific structure of various components (network devices, gatherers, ISMs, a central event manager, a central database, a user interface server, and terminals or clients)” and that these components were “purposefully arrange[d] . . . in a distributed architecture to achieve a technological solution to a technological problem specific to computer networks.” Id. at 1301. Although the solution required generic components, the court determined that “the claim’s enhancing limitation” necessarily required that these generic components “operate in an unconventional manner to achieve an improvement in computer functionality.” Id. at 1300–01. Here, unlike the situation in Amdocs, there is no indication in the Specification that the method steps, as recited in claim 14, require any particularized structure. Nor do we find any indication of record that claim 14 requires that the recited components, i.e., the one or more processors and the data preparation and rebalance engines, operate in an unconventional manner to achieve an improvement in computer functionality. Quoting the entirety of the method steps recited in claim 14, Appellant argues that “[a]t least the foregoing features recited by the claims, individually or in combination, do not comprise well-understood, routine, and conventional activities of a computer previously known to the industry” (Appeal Br. 21–22). Yet, that argument is not persuasive, at least because “the relevant inquiry is not whether the claimed invention as a whole is unconventional or non-routine.” BSG Tech, 899 F.3d at 1290. Instead, the question under step two of the Mayo/Alice framework (i.e., step 2B) is whether the claim includes additional elements, i.e., elements other than the Appeal 2018-000385 Application 13/189,128 20 abstract idea itself, that “‘transform the nature of the claim’ into a patent- eligible application.” Alice Corp., 573 U.S. at 217 (quoting Mayo, 566 U.S. at 79, 78). See also Mayo, 566 U.S. at 72–73 (requiring that “a process that focuses upon the use of a natural law also contain other elements or a combination of elements, sometimes referred to as an ‘inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself” (emphasis added)). The Examiner determined here, and we agree, that the only claim elements beyond the abstract idea are the claimed “one or more processors,” “data preparation engine,” and “rebalance engine,” i.e., generic computer components used to perform generic computer functions (Final Act. 6) — a determination amply supported by, and fully consistent with the Specification (see, e.g., Spec. ¶ 22).5 Appellant cannot reasonably contend that there is a genuine issue of material fact regarding whether the operation of these components is well-understood, routine, or conventional, where, as here, there is nothing in the Specification to indicate that the operations recited in claim 14 require any specialized hardware or inventive computer components, invoke any assertedly inventive software, or that the claimed 5 The Office’s April 19, 2018 Memorandum to the Examining Corps from Deputy Commissioner for Patent Examination Policy, Robert W. Bahr, entitled, Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.), available at https://www.uspto.gov/sites/default/files/documents/ memo-berkheimer-20180419.pdf, expressly directs that an examiner may support the position that an additional element (or combination of elements) is not well-understood, routine or conventional with “[a] citation to an express statement in the specification . . . that demonstrates the well- understood, routine, conventional nature of the additional element(s)” (id. at 3). Appeal 2018-000385 Application 13/189,128 21 invention is implemented using other than generic computer components to perform generic computer functions, e.g., receiving, transmitting, and processing information. We are not persuaded, on the present record, that the Examiner erred in rejecting independent claim 14 under 35 U.S.C. § 101. Therefore, we sustain the Examiner’s rejection of independent claim 14, and independent claim 1, which falls with claim 14. Appellant’s Separate Arguments Regarding Dependent Claims 2–13 and 15–31 Addressing dependent claims 2–13 and 15–31 separately, Appellant argues that the rejection of these dependent claims under § 101 cannot be sustained because the Examiner has failed to establish a prima facie case of patent ineligibility (Appeal Br. 23). Appellant ostensibly maintains that the Examiner is required, under USPTO guidance, to provide a separate explanation as to why each individual claim is unpatentable, and that the Examiner, by failing to do so, has not established a prima facie case of patent ineligibility. We disagree. There is no dispute that examiners are instructed to evaluate the patent eligibility of each claim individually. But, consideration of each claim individually does not require a separate written analysis for each individual claim. Moreover, we agree with the Examiner that the dependent claims are directed to the same abstract idea as independent claims 1 and 14, albeit at differing levels of specificity (Final Act. 7). Cf. Content Extraction & Transmission LLC v. Wells Fargo Bank, N.A., 776 F.3d 1343, 1348 (Fed. Cir. 2014) (explaining that when all claims are directed to the same Appeal 2018-000385 Application 13/189,128 22 abstract idea, “addressing each claim of the asserted patents [is] unnecessary.”). Appellant charges that the Examiner “has not provided an explanation as to why each claim is unpatentable sufficient to establish a prima facie case with respect to the subject-matter eligibility analysis” (Appeal Br. 23). Yet, Appellant offers no substantive arguments in support of the separate patent eligibility of the dependent claims. Instead, Appellant’s substantive arguments are directed either to “claims 1–31” or more generally to “the pending claims.” In view of the foregoing, and for the reasons set forth above with respect to independent claim 14, we sustain the Examiner’s rejection of dependent claims 2–13 and 15–31 under 35 U.S.C. § 101. CONCLUSION In summary: Claims Rejected 35 U.S.C. § Basis Affirmed Reversed 1–31 101 Eligibility 1–31 No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R. § 1.136(a)(1)(iv). AFFIRMED Copy with citationCopy as parenthetical citation