Dylan Tyson et al.

Patent Trials and Appeals Board

Mar 22, 2022

2021003324 (P.T.A.B. Mar. 22, 2022)

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. 13/875,940 05/02/2013 Dylan J. Tyson 002328.0874 7869 5073 7590 03/22/2022 BAKER BOTTS L.L.P. 2001 Ross Avenue, Suite 900 Dallas, TX 75201 EXAMINER GREGG, MARY M ART UNIT PAPER NUMBER 3697 NOTIFICATION DATE DELIVERY MODE 03/22/2022 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): PTOmail1@bakerbotts.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte DYLAN J. TYSON, JOHN F. BRADLEY III, BRIAN J. CURRAN, SCOTT D. KAPLAN, ALFRED LERMAN, and BRENT W. WALDER ____________ Appeal 2021-003324 Application 13/875,9401 Technology Center 3600 ____________ Before JAMES P. CALVE, NINA L. MEDLOCK, and BRADLEY B. BAYAT, Administrative Patent Judges. BAYAT, Administrative Patent Judge. DECISION ON APPEAL Appellant appeals under 35 U.S.C. § 134(a) from the Examiner’s final rejection of claims 1, 8, and 14, which constitute all pending claims in the application, under 35 U.S.C. § 101 as directed to an abstract idea without significantly more.2 We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. 1 “Appellant” refers to “applicant” as defined in 37 C.F.R. § 1.42. Appellant identifies the real party in interest as “The Prudential Insurance Company of America.” Appeal Br. 2. 2 Claims 2-7, 9-13, and 15-20 have been canceled. Appeal Br. 21, 23, 25 (Claims App.). Appeal 2021-003324 Application 13/875,940 2 STATEMENT OF THE CASE Claimed Invention Appellant’s invention “relates generally to retirement plans and more particularly to an asset-based adjustment of premium amounts for the generation of an annuity based on a pension plan.” Spec. 1:5-7. The Abstract section of the Specification describes the invention as including one or more processors operable to determine a premium amount associated with a generation of an annuity based on a pension plan, and receive data indicative of a plurality of assets to be used towards a payment of the premium amount. The processors are further operable to, for each of one or more characteristics, receive data indicative of at least one threshold associated with the characteristic, determine whether at least a portion of the assets have a characteristic value that is above or below the threshold, and based on the determination, determine a non-conformance amount associated with the characteristic. The processors are further operable to, based on the non-conformance amount of each of the characteristics, adjust the premium amount, and communicate the adjusted premium amount for display. System claim 1, computer-readable medium claim 8, and method claim 14 are independent and recite substantially similar subject matter. Claim 14, reproduced below with added bracketed matter, is representative of the subject matter on appeal. 14. A method comprising: [(a)] determining, by the one or more processors, a premium amount for a generation of an annuity based on a pension plan, the annuity sufficient to satisfy a benefit of the pension plan; [(b)] receiving, by the one or more processors, data indicative of a plurality of assets to be used towards a payment of the premium amount; Appeal 2021-003324 Application 13/875,940 3 [(c)] for each of one or more characteristics of the plurality of assets, the characteristics comprising at least one of a sector limit, a country limit, a single issue limit, an aggregate credit rating quality limit, an asset class limit, a reinvestment asset limit, a key rate duration, and a technical breach adjustment: [(1)] receiving, by the one or more processors data indicative of at least one threshold of the characteristic; [(2)] determining a characteristic value of a first portion of the assets; [(3)] comparing the characteristic value and the threshold; [(4)] based on the comparison of the characteristic value and the threshold: [(i)] determining a second portion of the assets based on the difference between the characteristic value and the threshold, wherein the first portion of the assets comprises the second portion of the assets; [(ii)] determining a monetary value of the second portion of the assets; [(iii)] determining a non-conformance for each single issuer provided assets threshold percentage factor of the characteristic; and [(iv)] multiplying the non-conformance factor of the each single issuer provided assets to generate a non- conformance of the each single issuer provided assets amount; [(5)] based on the non-conformance of the each single issuer provided assets amount of each of the characteristics, determining, by the one or more processors, an adjusted premium amount by adding the non-conformance of the each single issuer provided assets amount of each of the characteristics to the premium amount; [(d)] communicating, by the one or more processors, the adjusted premium amount for display. Appeal Br. 24-25 (Claims App. (emphases and formatting added)). Appeal 2021-003324 Application 13/875,940 4 OPINION 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 78, 79). This is “a search for an ‘inventive concept’ - i.e., an 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) (citation omitted). The U.S. Patent and Trademark Office (“USPTO”) published revised guidance for use by USPTO personnel in evaluating subject matter Appeal 2021-003324 Application 13/875,940 5 eligibility under 35 U.S.C. § 101. 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50 (Jan. 7, 2019) (the “2019 Revised Guidance”). That guidance revised the USPTO’s examination procedure with respect to the first step of the Alice framework by (1) “[p]roviding groupings of subject matter that [are] 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 first step in the Alice framework is to determine whether the claim at issue is “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), consists of a two-prong test. Prong One of Step 2A involves 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. Appellant argues claims 1, 8, and 14 as a group. See Appeal Br. 11- 16. We select claim 14 as representative of the group, with claims 1 and 8 standing or falling therewith. See 37 C.F.R. § 41.37(c)(1)(iv)(2020). Under Prong One of Step 2A, the Examiner determines that all the steps of claim 14, sans “the one or more processors” (italicized in claim 8 supra), “recite processes (determine, receive, compare, multiply and communicate functions), that can easily be performed in the human mind as mental processes.” Final Act. 8 (“mimic human thought processes of Appeal 2021-003324 Application 13/875,940 6 observation, evaluation and opinion”). And, according to the Examiner, limitation (c) is nothing more than data content and does not affect the operation of the process applied to the characteristics, but instead is data for consideration of the proceeding limitations. Furthermore, when considered as a whole the claimed subject matter is directed toward analyzing data related to pension assets. Such concepts can be found in the abstract category of business relations. These concepts are enumerated in Section I of the 2019 revised patent subject matter eligibility guidance published in the federal register (84 FR 50) on January 7, 2019) is directed toward abstract category of mental processes and organizing human activity. Id. Appellant argues: Rather than simply being directed to “analyzing data related to pension assets,” the claims recite a set of specific features including automatically determining current values of certain characteristics of a set of assets, applying a specific set of rules that use the current values of the characteristics to automatically determine an adjusted premium payment amount, and communicating that adjusted premium amount for display, which, as described below, offer technical improvements over existing annuity generating systems. Because the Examiner’s approach of overgeneralizing the claims directly contradicts Federal Circuit precedent, the Examiner should be reversed. Appeal Br. 11. We disagree that the Examiner has overgeneralized the claims by “strip[ping] away the technical details of the claim and simply declar[ing] what remains an abstract idea.” Appeal Br. 11. Appellant’s characterization of claim 14 as reciting a “method for generating and administering an annuity based on a pension plan” (id. at 4) and “automatically determining current values of certain characteristics of a set of assets, applying a specific Appeal 2021-003324 Application 13/875,940 7 set of rules that use the current values of the characteristics to automatically determine an adjusted premium payment amount, and communicating that adjusted premium amount for display” (see id. at 11 (emphasis added)) is consistent with the Examiner’s broader articulation of the claim as a whole. 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.”). Indeed, the Examiner is required under Alice to review the claim at some level of generalization and determine whether the claim as a whole is directed to an abstract idea. The Examiner reviewed claim 14 and determined that the only additional element recited, i.e., “one or more processors,” amounts to no more than invoking computers as a tool to perform the abstract ideas of collecting information (receiving step), analyzing information (determining, comparing, multiplying steps), and presenting the results of the analysis (communicating for display step). In Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016), the court held that collecting information, analyzing it, and displaying certain results of the collection and analysis is patent ineligible. See also 2019 Revised Guidance, 84 Fed. Reg. at 52; Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1335 (Fed. Cir. 2015) (“Courts have examined claims that required the use of a computer and still found that the underlying, patent-ineligible invention could be performed via pen and paper or in a person’s mind.”); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1373 (Fed. Cir. 2011) (holding that method steps that can be performed in the human mind, or by a human using a pen and paper, are unpatentable mental processes). Appeal 2021-003324 Application 13/875,940 8 Moreover, claim 14 does not recite the term “automatically” and Appellant’s characterization appears to be referring to the automation resulting from the use of a processor to implement the abstract idea. However, such automation does not improve computers or solve a technical problem. See Cellspin Soft, Inc. v. Fitbit, Inc., 927 F.3d 1306, 1316 (Fed. Cir. 2019) (“But the need to perform tasks automatically is not a unique technical problem.”); Customedia Techs., LLC v. Dish Network Corp., 951 F.3d 1359, 1365 (Fed. Cir. 2020) (“The only improvements identified in the specification are generic speed and efficiency improvements inherent in applying the use of a computer to any task. . . . This is not an improvement in the functioning of the computer itself.”); Credit Acceptance Corp. v. Westlake Servs., 859 F.3d 1044, 1055 (Fed. Cir. 2017) (“[A]utomation of manual processes using generic computers does not constitute a patentable improvement in computer technology.”); Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1279 (Fed. Cir. 2012) (“Using a computer to accelerate an ineligible mental process does not make that process patent-eligible.”). Accordingly, we are not apprised of Examiner error under Step 2A, Prong One. Having concluded that claim 14 recites a judicial exception, i.e., an abstract idea, the Examiner next determines whether the claim recites additional elements that integrate the judicial exception into a practical application (Step 2A, Prong Two). 2019 Revised Guidance, 84 Fed. Reg. at 51. When a claim recites a judicial exception and fails to integrate the exception into a practical application, the claim is “directed to” the judicial exception. Id. A claim may integrate the judicial exception when, for Appeal 2021-003324 Application 13/875,940 9 example, it reflects an improvement to technology or a technical field. Id. at 55. Under Prong Two of Step 2A, Appellant argues that the claim addresses waste of computational resources by automatically adjusting the premium payment in response to determining that the assets to be used for the premium payment have changed, such that they no longer possess the agreed-to characteristics. In this manner, the system does not have to repeat one or more steps of the administration process used to generate an annuity agreement, and thereby conserves computing resources that would otherwise be used if the annuity did not generate due to fluctuations in the composition of the assets to be used for the premium payment. Furthermore, in order to help ensure that the parties are aware of any adjustments made to the premium, the system is configured to automatically communicate the adjusted premium for display by the device(s) used by the issuer and/or pension plan to interact with the claimed system. As explained in the specification, “such a display of the adjusted premium amount may allow pension plan 22 and issuer 18 to both understand the total cost for the annuity generation 26, when adjusted for the assets 42 that may not (or may) meet the one or more characteristics previously agreed to. As such, pension plan 22 may provide the correct payment of premium 46 to issuer 18, and annuity generation 26 may occur.” Specification at 48:10-15. Appeal Br. 13; see also Reply Br. 2. The Examiner is not persuaded because: Appellant attempts to argue that such processes conserve resources, [yet] the Appellant fails to point to how technology is integral to the data analysis beyond being utilized as a tool for performing the analysis. The communication Appellant points to is to output results to a user but not to impose meaningful limits on the judicial exception. There is not integration with technology beyond generally linking the use of the judicial exception in a technical environment. Appeal 2021-003324 Application 13/875,940 10 Ans. 4-5. We agree with the Examiner. In the context of computer-implemented inventions, our reviewing court has clarified that a relevant inquiry is “to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea.” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). The court contrasted claims “directed to an improvement in the functioning of a computer” with claims “simply adding conventional computer components to well-known business practices,” or claims reciting “use of an abstract mathematical formula on any general purpose computer,” or “a purely conventional computer implementation of a mathematical formula,” or “generalized steps to be performed on a computer using conventional computer activity.” Enfish, 822 F.3d. at 1338. Besides Appellant’s allegation that the recited steps of claim 14 offer improvements over existing technology, we are not apprised of anything supported by the Specification that is sufficient to remove the claim from the class of subject matter ineligible for patenting. The focus of claim 14 is not on improving any technology, but on using generic computer operations, in which a general purpose computer is used in its ordinary capacity, for processing data related to a financial agreement. We recognize that “[s]oftware can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route.” Enfish, 822 F.3d at 1335. However, “to be directed to a patent-eligible improvement to computer functionality, the claims must be directed to an improvement to the functionality of the computer or network platform itself.” Customedia Techs., LLC v. Dish Appeal 2021-003324 Application 13/875,940 11 Network Corp., 951 F.3d 1359, 1365 (Fed. Cir. 2020) (citing Enfish, 822 F.3d at 1336-39). Claim 14 recites a generic component (i.e., a processor) arranged in no particular way to perform standard computer functions (receiving, determining, comparing, multiplying, and communicating information) without improving the computer or processor. See Spec. 18:18-20:9. And, “[m]erely claiming ‘those functions in general terms, without limiting them to technical means for performing the functions that are arguably an advance,’ does not make a claim eligible at step one.” Ericsson Inc. v. TCL Commc’n Tech. Holdings Ltd., 955 F.3d 1317, 1328 (Fed. Cir. 2020) (citation omitted); SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1167-68 (Fed. Cir. 2018) (to avoid ineligibility, a claim must have the specificity to transform it from one claiming only a result to one that claims a way of achieving the result); Elec. Power, 830 F.3d at 1356 (the result-focused, functional nature of the claim language is a frequent feature of claims that are patent-ineligible). When considered as a whole, claim 14 lacks any additional elements sufficient to integrate the abstract idea into a practical application. Therefore, we agree with the Examiner that the claim is directed to an abstract idea. Under Step 2B, the Examiner finds that claim 14’s additional element, i.e., a conventional processor, is insufficient to provide an inventive concept. Final Act. 11-13. The second step of the Alice test is satisfied when the claim limitations involve more than performance of well-understood, routine, and conventional activities previously known to the industry. Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018); see 2019 Revised Guidance, 84 Fed. Reg. at 56 (explaining that the second step of the Appeal 2021-003324 Application 13/875,940 12 Alice analysis considers whether a claim adds a specific limitation beyond a judicial exception that is not a “well-understood, routine, conventional” activity in the field). In contesting the Examiner’s rejection under Step 2B, Appellant repeats arguments made under Prong Two. See Appeal Br. 14-15. In support of those arguments, Appellant relies on limitations identified by the Examiner as part of the abstract idea. For example, Appellant highlights the determining steps and multiplying step recited in limitation (c)(4) of claim 14 and asserts that “the claims recite a specific way of determining an adjusted premium amount that may be used to generate an annuity, in a manner that was not possible with existing systems.” Appeal Br. 16. Appellant’s argument is unpersuasive of Examiner error at least because “[i]t has been clear since Alice that a claimed invention’s use of the ineligible concept to which it is directed cannot supply the inventive concept that renders the invention ‘significantly more’ than that ineligible concept.” BSG Tech. LLC v. Buyseasons, Inc., 899 F.3d 1281, 1290 (Fed. Cir. 2018). “As a matter of law, narrowing or reformulating an abstract idea does not add ‘significantly more’ to it.” Id. at 1291; see also Berkheimer, 881 F.3d at 1370 (claims to performing the abstract idea of parsing and comparing data with conventional computer components lacked an inventive concept); Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017) (sequence of data retrieval, analysis, modification, generation, display and transmission is not inventive and amounts to instructions to apply the abstract idea using generic computer technology); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (“That a computer receives and sends the information over a network-with no Appeal 2021-003324 Application 13/875,940 13 further specification-is not even arguably inventive.”). We also are not persuaded of error by Appellant’s contention that “the primary concern underlying the Court’s § 101 interpretation is one of preemption” and the pending claims are patent eligible because the specific steps for accomplishing that goal in a particular manner does not preempt all other ways of achieving it. Appeal Br. 15. To be clear, the proper focus is not preemption per se, for some measure of preemption is intrinsic in the statutory right granted with every patent to exclude competitors, for a limited time, from practicing the claimed invention. See 35 U.S.C. § 154. Rather, the animating concern is that claims should not be coextensive with a natural law, natural phenomenon, or abstract idea; a patent-eligible claim must include one or more substantive limitations that, in the words of the Supreme Court, add “significantly more” to the basic principle, with the result that the claim covers significantly less. See Mayo, 566 U.S. at 72-73. Thus, broad claims do not necessarily raise § 101 preemption concerns, and seemingly narrower claims are not necessarily exempt. CLS Bank Int’l v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1281 (Fed. Cir. 2013); see also Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (“[w]hile preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility.”). Because we find the claimed subject matter covers patent- ineligible subject matter, the pre-emption concern is necessarily addressed. “Where a patent’s claims are deemed only to disclose patent ineligible subject matter under the Mayo framework, . . . preemption concerns are fully addressed and made moot.” Ariosa Diagnostics, 788 F.3d at 1379. For the first time in the Reply Brief, Appellant alleges without any Appeal 2021-003324 Application 13/875,940 14 further explanation that “[b]ecause the pending claims operate in an unconventional manner to achieve technical improvements over existing electronic annuity generation systems, the claims are patent eligible.” Reply Br. 3 (citing BASCOM3). Although this argument is waived, we find Appellant’s reliance on BASCOM is misplaced. In BASCOM, the Federal Circuit held that “[t]he inventive concept described and claimed in the ’606 patent is the installation of a filtering tool at a specific location, remote from the end-users, with customizable filtering features specific to each end user.” BASCOM, 827 F.3d at 1350. The court explained that the remote location of a filtering tool having customizable user-specific filtering features provides the filtering tool with both the benefits of a filter on a local computer and the benefits of a filter on the ISP server, which is a technical improvement over prior art ways of filtering content. Id. at 1350-51. Here, besides a general allegation, Appellant has not demonstrated any particular arrangement in the claim as providing an inventive concept parallel to BASCOM’s technology-based solution. Accordingly, we are not persuaded of error in the Examiner’s conclusion that claim 14 is directed to patent-ineligible subject matter. Therefore, we sustain the Examiner’s rejection of independent claim 14 under 35 U.S.C. § 101, and independent claims 1 and 8, which fall with claim 14. 3 BASCOM Global Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1346 (Fed. Cir. 2016) (hereinafter “BASCOM”). Appeal 2021-003324 Application 13/875,940 15 CONCLUSION The rejection of claims 1, 8, and 14 under 35 U.S.C. § 101 is affirmed. DECISION SUMMARY In summary: Claim(s) Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 1, 8, 14 101 Ineligibility 1, 8, 14 TIME PERIOD FOR RESPONSE 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). AFFIRMED