Early Warning Services, LLC

Patent Trials and Appeals Board

Mar 31, 2020

14281730 - (D) (P.T.A.B. Mar. 31, 2020)

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.
14/281,730 05/19/2014 Julie McNelley 90850-909341 (000520US) 6218
20350 7590 03/31/2020
KILPATRICK TOWNSEND & STOCKTON LLP
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
EXAMINER
SHARVIN, DAVID P
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
03/31/2020 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):
KTSDocketing2@kilpatrick.foundationip.com
ipefiling@kilpatricktownsend.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte JULIE MCNELLEY, RYAN TALBERT, and MIKE GROSS
____________

Appeal 2019-002981
Application 14/281,730
Technology Center 3600
____________

Before JOSEPH L. DIXON, ST. JOHN COURTENAY III, and
KRISTEN L. DROESCH, Administrative Patent Judges.

COURTENAY, Administrative Patent Judge.

DECISION ON APPEAL
Appellant1 appeals under 35 U.S.C. § 134(a) from a final rejection of
claims 2–10 and 18–26. Claim 1 is canceled. Claims 11–17 are withdrawn.
We have jurisdiction over the pending claims under 35 U.S.C. § 6(b).
We affirm.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42(a). According to Appellant, the real party in interest is Early
Warning Services, LLC of Scottsdale, Arizona. See Appeal Br. 3.

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STATEMENT OF THE CASE
Introduction
Embodiments of Appellant’s invention relate generally to
“identification of an individual or other entity and evaluation of risk from
doing business with that individual or entity.” Spec. ¶ 5.
Rejection
Claims 2–10 and 18–26 are rejected under 35 U.S.C. § 101, as being
directed to a judicial exception, without significantly more. See Final Act.
4–6.
Issue on Appeal
Did the Examiner err in rejecting claims 2–10 and 18–26 under 35
U.S.C. § 101, as being directed to a judicial exception, without significantly
more?
ANALYSIS
We reproduce infra independent claim 2 in Table One. We have
considered all of Appellant’s arguments and any evidence presented. We
highlight and address specific findings and arguments for emphasis in our
analysis below.
Rejection A under 35 U.S.C. § 101
Principles of Law
A. Section 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.
However, the U.S. Supreme Court has long interpreted 35 U.S.C. § 101 to
include implicit exceptions: “[l]aws of nature, natural phenomena, and

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abstract ideas” are not patentable. E.g., Alice Corp. Pty. Ltd. 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 Court’s two-part framework, described in Mayo and Alice.
Alice, 573 U.S. 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, 67 (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.
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
Court held that “a claim drawn to subject matter otherwise statutory does not
become nonstatutory simply because it uses a mathematical formula.”
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Diehr, 450 U.S. at 187; 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. (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.”).
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 (quotation marks 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. (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.
B. USPTO § 101 Guidance
The U.S. Patent and Trademark Office (“USPTO”) published revised
guidance on the application of § 101. USPTO’s January 7, 2019
Memorandum, 2019 Revised Patent Subject Matter Eligibility Guidance, 84
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Fed. Reg. 50 (“2019 Memorandum”).2 Under that guidance, we first look to
whether the claim recites:
(1) (see 2019 Memorandum Step 2A – Prong One) 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) (see 2019 Memorandum Step 2A – Prong Two) additional
elements that integrate the judicial exception into a practical
application (see MPEP § 2106.05(a)–(c), (e)–(h)).3
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:
(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

2 The Office issued a further memorandum on October 17, 2019 (October
2019 Update: Subject Matter Eligibility, the “October 2019 Memorandum”)
clarifying guidance of the January 2019 Memorandum in response to
received public comments. See https://www.uspto.gov/
sites/default/files/documents/peg_oct_2019_update.pdf. Moreover, “[a]ll
USPTO personnel are, as a matter of internal agency management, expected
to follow the guidance.” 2019 Memorandum, 84 Fed. Reg. at 51; see also
October 2019 Memorandum at 1.
3 This evaluation is performed by (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception, and
(b) evaluating those additional elements individually and in combination to
determine whether the claim as a whole integrates the exception into a
practical application. See 2019 Memorandum - Section III(A)(2).
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(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 2019 Memorandum Step 2B.
Because there is no single definition of an “abstract idea” under Alice
step 1, the PTO has recently synthesized, for purposes of clarity,
predictability, and consistency, key concepts identified by the courts as
abstract ideas to explain that the “abstract idea” exception includes the
following three groupings:
1. Mathematical concepts—mathematical relationships,
mathematical formulas or equations, mathematical
calculations;
2. Mental processes—concepts performed in the human mind
(including an observation, evaluation, judgment, opinion);
and
3. Certain methods of organizing human activity—fundamental
economic principles or practices (including hedging,
insurance, mitigating risk); commercial or legal interactions
(including agreements in the form of contracts; legal
obligations; advertising, marketing or sales activities or
behaviors; business relations); managing personal behavior
or relationships or interactions between people (including
social activities, teaching, and following rules or
instructions).
See 2019 Memorandum, 84 Fed. Reg. at 52.
According to the 2019 Memorandum, “[c]laims that do not recite
[subject] matter that falls within these enumerated groupings of abstract
ideas should not be treated as reciting abstract ideas,” except in rare
circumstances. Even if the claims recite any one of these three groupings of
abstract ideas, these claims are still not “directed to” a judicial exception
(abstract idea), and thus are patent eligible, if “the claim as a whole
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integrates the recited judicial exception into a practical application of that
exception.” See 2019 Memorandum, 84 Fed. Reg. at 53.
For example, limitations that are indicative of integration into a
practical application include:
1. Improvements to the functioning of a computer, or to any
other technology or technical field — see MPEP
§ 2106.05(a);
2. Applying the judicial exception with, or by use of, a
particular machine — see MPEP § 2106.05(b);
3. Effecting a transformation or reduction of a particular
article to a different state or thing — see MPEP
§ 2106.05(c); and
4. Applying or using the judicial exception in some other
meaningful way beyond generally linking the use of the
judicial exception to a particular technological
environment, such that the claim as a whole is more than
a drafting effort designed to monopolize the exception
— see MPEP § 2106.05(e).
In contrast, limitations that are not indicative of integration into a
practical application include:
1. Adding the words “apply it” (or an equivalent) with the
judicial exception, or merely include instructions to
implement an abstract idea on a computer, or merely uses a
computer as a tool to perform an abstract idea — see MPEP
§ 2106.05(f);
2. Adding insignificant extra-solution activity to the judicial
exception — see MPEP § 2106.05(g); and
3. Generally linking the use of the judicial exception to a
particular technological environment or field of use — see
MPEP § 2106.05(h).
See 2019 Memorandum, 84 Fed. Reg. at 54–55 (“Prong Two”).

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2019 Memorandum, Step 2A, Prong One4
The Judicial Exception
Under the 2019 Memorandum, we begin our analysis by first
considering whether the claims recite any judicial exceptions, including
certain groupings of abstract ideas, in particular: (a) mathematical concepts,
(b) mental steps, and (c) certain methods of organizing human activities.
The Examiner concludes the claims recite “a method of evaluating
[the] risk of conducting business with an entity through calculating a risk
level, which is an abstract idea similar to the concepts identified by the
courts of collecting and analyzing information to detect misuse and notifying
a user when misuse is detected.” Final Act. 4.
We apply the Director’s 2019 Memorandum de novo. In Table One
below, we identify in italics the specific claim limitations that we conclude
recite an abstract idea. We also identify in bold the additional (non-abstract)
claim elements that we find are generic computer components:

4 Throughout this opinion, we give the claim limitations the broadest
reasonable interpretation consistent with the Specification. See In re Morris,
127 F.3d 1048, 1054 (Fed. Cir. 1997).

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TABLE ONE
Independent Claim 2 2019 Memorandum
[a] A method of evaluating a
risk from conducting business
with an entity, the method
comprising:5
Abstract Idea: Evaluating a risk
from conducting business with an
entity is a method of organizing
human activity, i.e., a fundamental
economic practice including
mitigating risk, commercial or legal
interactions including agreements in
the form of contracts, legal
obligations, sales activities or
behaviors and business relations.

See 2019 Memorandum, 84 Fed.
Reg. at 52.

[b] receiving, at a processor
of a custodian system,
identity information related to
the entity, the identity
information including
information from an identity
credential presented by the
entity, the identity credential
issued by a governmental
entity and having identity
information encoded on the
identity credential, the
identity information having a
specified format;
Receiving identity information
related to the entity is insignificant
extra-solution activity (i.e., data
gathering). See 2019 Memorandum,
84 Fed. Reg. at 55 n.31; see also
MPEP § 2106.05(g).

5 A method falls under the statutory subject matter class of a process. See
35 U.S.C. § 101 (“Whoever invents or discovers any new and useful
process, machine, manufacture, or composition of matter, or any new and
useful improvement thereof, may obtain a patent therefor, subject to the
conditions and requirements of this title.”).

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Independent Claim 2 2019 Memorandum
[c] validating, with the
processor of the custodian
system, the identity
credential based on the
information from the identity
credential and a plurality of
positive databases
maintained by the custodian
system, the plurality of
positive databases including
stored format information
contributed by the
governmental entity and
relating to the correct format
of the identity information,
the validating of the identify
credential including
determining that the identify
information received from the
identity credential has the
correct format based on the
stored format information;
Abstract Idea: Validating, the
identity credential based on the
information from the identity
credential and a plurality of positive
databases maintained by the
custodian system can be performed
alternatively as a mental process.
See 2019 Memorandum, 84 Fed.
Reg. at 52. See also MPEP
§ 2106.05(g).

[d] verifying, with the
processor of the custodian
system, an identity of the
entity based on the identity
information and the plurality
of positive databases;
Abstract Idea: Verifying an identity
of the entity based on the identity
information and the plurality of
positive databases can be performed
alternatively as a mental process.
See 2019 Memorandum, 84 Fed.
Reg. at 52. See also MPEP
§ 2106.05(g).

[e] screening, with the
processor of the custodian
system and using the identity
information encoded on the
identity credential, the entity
Abstract Idea: Screening, using the
identity information encoded on the
identity credential, the entity against
a plurality of negative databases,
can be performed alternatively as a
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Independent Claim 2 2019 Memorandum
against a plurality of
negative databases
maintained by the custodian
system based on the identity
information for entities
related to the entity and
indicating past transactions
with one or more other
entities, and wherein
screening is further based on
one or more screening
criteria maintained by the
custodian system and
provided to the custodian
system by a party
considering doing business
with the entity;
mental process. See 2019
Memorandum, 84 Fed. Reg. at 52.
[f] calculating, with the
processor of the custodian
system, a risk level based on
the validation of the identity
credential, the verification of
the identity of the entity, and
the screening of the entity,
wherein the risk level
represents an amount of risk
posed by the entity to the
party considering doing
business with the entity; and
Abstract Idea: Calculating a
risk level based on the
validation of the identity
credential, the verification of
the identity of the entity, and
the screening of the entity is a
mathematical calculation that
can be performed as a mental
process. See 2019
Memorandum, 84 Fed. Reg. at
52.
[g] reporting, from the
processor of the custodian
system, a response based on
the calculated risk level to the
party considering doing
business with the entity.
Reporting a response based on the
calculated risk level to the party
considering doing business with the
entity is insignificant post-solution
activity. See 2019 Memorandum, 84
Fed. Reg. at 55 n.31; see also MPEP
§ 2106.05(g).
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Abstract Idea

As detailed above in Table One, evaluating a risk from conducting
business with an entity is a method of organizing human activity: (1) a
fundamental economic practice including mitigating risk, and (2)
commercial or legal interactions including agreements in the form of
contracts, legal obligations, sales activities or behaviors and business
relations. See 2019 Memorandum, 84 Fed. Reg. at 52.
After considering representative method claim 2 as a whole, we
conclude that the italicized steps shown in Table One could be performed
alternatively as mental processes.6 See “Intellectual Ventures I LLC v.
Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016) (‘[W]ith the
exception of generic computer-implemented steps, there is nothing in the
claims themselves that foreclose them from being performed by a human,
mentally or with pen and paper.’).” 2019 Memorandum, 84 Fed. Reg. at 52

6 If a method can be performed by human thought alone, or by a human
using pen and paper, it is merely an abstract idea and is not patent eligible
under § 101. See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d
1366, 1372–73 (Fed. Cir. 2011); “[t]hat purely mental processes can be
unpatentable, even when performed by a computer, was precisely the
holding of the Supreme Court in Gottschalk v. Benson.” CyberSource, 654
F.3d at 1375. See also Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d
1138, 1146–47 (Fed. Cir. 2016). Moreover, “[u]sing a computer to
accelerate an ineligible mental process does not make that process patent-
eligible.” Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (U.S.),
687 F.3d 1266, 1279 (Fed. Cir. 2012); see also OIP Techs., Inc. v.
Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (“[R]elying on a
computer to perform routine tasks more quickly or more accurately is
insufficient to render a claim patent eligible.”).

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n.14.
Additionally, step “f” recites a mathematical calculation. See 2019
Memorandum, 84 Fed. Reg. at 52.
“An abstract idea can generally be described at different levels of
abstraction.” Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir.
2016). Merely combining several abstract ideas does not render the
combination any less abstract. See RecogniCorp, LLC v. Nintendo Co., Ltd.,
855 F.3d 1322, 1327 (Fed. Cir. 2017) (“Adding one abstract idea (math) to
another abstract idea . . . does not render the claim non-abstract.”);
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093–94 (Fed. Cir.
2016) (determining the pending claims were directed to a combination of
abstract ideas).
Because we conclude all of claims 2–10 and 18–26 on appeal recite an
abstract idea, as identified above, under Step 2A, Prong One, we proceed to
Step 2A, Prong Two.
2019 Memorandum, Step 2A, Prong Two
Integration of the Judicial Exception into a Practical Application

Pursuant to the 2019 Memorandum, we consider whether there are
additional elements set forth in the claims that integrate the judicial
exception into a practical application. See 2019 Memorandum, 84 Fed. Reg.
at 54–55.
Additional Generic Computer Limitations
As emphasized in bold in Table One, supra, we note the additional
generic computer components recited in independent claim 2, for example:
“a processor of a custodian system” and positive and negative databases.
(emphasis added). We further note the supporting exemplary, non-limiting
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descriptions of generic computer components in the Specification, for
example, the Specification, paragraph 10: “According to yet another
embodiment, a system for identification and risk evaluation comprises a
processor and a memory communicatively connected with and readable by
the processor.”
We emphasize that McRO, Inc. v. Bandai Namco Games Am. Inc.,
837 F.3d 1299 (Fed. Cir. 2016), guides: “[t]he abstract idea exception
prevents patenting a result where ‘it matters not by what process or
machinery the result is accomplished.’” 837 F.3d at 1312 (quoting O’Reilly
v. Morse, 56 U.S. 62, 113 (1854)) (emphasis added). See supra Table One.

MPEP § 2106.05(a)
Improvements to the Functioning of a Computer or
to Any Other Technology or Technical Field

Appellant contends the claimed method overcomes technical
problems arising from advances in counterfeiting technology, which make it
difficult to distinguish legally issued identity credentials from fraudulent
identity credentials:
When considering the recited language of the claims as a
whole, Applicant’s claimed concept is much different than the
concept identified at the high level of abstraction used by the
Examiner. Specifically, Applicant submits that the claims are
directed to the concept of specially programmed computer
systems and methods (including a custodian system) that
validate an identity credential, verify the identity of an entity
that provides the identity credential, and then screen the entity,
using both positive databases and negative databases. The
identity credential is validated based on identity information
encoded on the identity credential, using the positive databases.
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The positive databases have stored format information
contributed by the governmental entity issuing the identity
credential, and the stored format information is used to
determine that the identity information on the identity
credential has the correct format. The identity information itself
is verified also using the positive databases, and the entity
providing the identity credential is screened against the negative
databases that have indication of past transactions, and based on
screening criteria maintained by the custodian system. A risk
level associated with the entity is calculated based on the
validity of the identity credential, the verification of the identity
of the entity, and the screening of the entity. As noted earlier,
the claimed system and method overcome technical problems
arising from advances in counterfeiting technology which make
it difficult to distinguish legally issued identity credentials from
fraudulent identity credentials (see, e.g., Specification,
paragraphs 0002 and 0028).
Appeal Br. 8 (emphasis added).
MPEP § 2106.05(a) provides applicable guidance:
To show that the involvement of a computer assists in
improving the technology, the claims must recite the details
regarding how a computer aids the method, the extent to which
the computer aids the method, or the significance of a computer
to the performance of the method. Merely adding generic
computer components to perform the method is not sufficient.
Thus, the claim must include more than mere instructions to
perform the method on a generic component or machinery to
qualify as an improvement to an existing technology.
Id. (emphasis added).
Here, the argued improvement that overcomes problems arising from
advances in counterfeiting technology is not claimed. The claims are silent
regarding any mention of counterfeiting technology. Appellant has not
sufficiently explained how the recited generic computer components
(including the processor and databases) include more than mere instructions
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to perform the recited steps to demonstrate an improvement to an existing
technology. See claim 2.
Accordingly, on this record, we conclude independent claims 2 and
18 and associated dependent claims, do not recite an improvement to the
functionality of a computer or other technology or technical field. See
MPEP § 2106.05(a).
MPEP §§ 2106.05(c), 2106.05(e)
Appellant advances no arguments that any of the method claims on
appeal are tied to a particular machine, or transform an article to a different
state or thing. See MPEP § 2106.05(c). Nor does Appellant advance further
substantive, persuasive arguments as to any particular “meaningful” claim
limitations, such as those of the types addressed under MPEP § 2106.05(e),
that impose meaningful limits on the judicial exception.7

MPEP § 2106.05(f)
Merely including instructions to implement
an abstract idea on a computer, or
Merely using a computer as a tool
to perform an abstract idea
We conclude Appellant’s claimed invention merely implements the
abstract idea using instructions executed on generic computer components,
as depicted in bold type in Table One, and as supported in our reproduction
of the Specification, paragraph 10, supra. Thus, we conclude Appellant’s

7 See 2019 Memorandum, 84 Fed. Reg. at 55, citing MPEP § 2106.05(e):
“[A]pply[ing] or us[ing] the judicial exception in some other meaningful
way beyond generally linking the use of the judicial exception to a particular
technological environment, such that the claim as a whole is more than a
drafting effort designed to monopolize the exception.” (emphasis added).
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claims merely use a programmed computer as a tool to perform an abstract
idea.
MPEP § 2106.05(g)
Adding insignificant extra-solution activity
to the judicial exception

As mapped in the right column of Table One, supra, we conclude that
representative independent claim 2 recites extra or post-solution activities
that courts have determined to be insufficient to transform judicially
excepted subject matter into a patent-eligible application. See MPEP
§ 2106.05(g); 2019 Memorandum, 84 Fed. Reg. at 55 n.31.

MPEP § 2106.05(h)
Generally linking the use of the judicial exception to a particular
technological environment or field of use

The Supreme Court guides: “the prohibition against patenting
abstract ideas ‘cannot be circumvented by attempting to limit the use of the
formula to a particular technological environment’ or [by] adding
‘insignificant postsolution activity.’” Bilski, 561 U.S. at 610–12 (quoting
Diehr, 450 U.S. at 191–92).
Appellant contends there is an absence of preemption:
Finally, it is clear that the claims at issue do not attempt
to preempt every application of the abstract idea as
characterized by the Examiner (“evaluating risk of conducting
business with an entity through calculating a risk level”). The
claims include many significant additional features (all
referenced above) that are recited in the body of the claims and
that are directed to the computerized operations that ensure that
the claims are much “more than a drafting effort designed to
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monopolize the abstract idea,” as in DDR Holdings.
Appeal Br. 17.
However, our reviewing court provides applicable guidance: “While
preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility.” Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
Nor do claims 2–10 and 18–26 on appeal present any other issues as
set forth in the 2019 Memorandum regarding a determination of whether the
additional generic elements integrate the judicial exception into a practical
application. See 2019 Memorandum, 84 Fed. Reg. at 55.
Thus, under Step 2A, Prong Two (MPEP §§ 2106.05(a)–(c) and (e)–
(h)), we conclude claims 2–10 and 18–26 do not integrate the judicial
exception into a practical application. Therefore, we proceed to Step 2B,
The Inventive Concept.

The Inventive Concept – Step 2B
Under the 2019 Memorandum, 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 adds a specific limitation
beyond the judicial exception that is not “well-understood, routine,
conventional” in the field (see MPEP § 2106.05(d)); or, simply appends
well-understood, routine, conventional activities previously known to the
industry, specified at a high level of generality, to the judicial exception.

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Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018)
We note that Berkheimer was decided by the Federal Circuit on
February 8, 2018. On April 19, 2018, the PTO issued the Memorandum
titled: “Changes in Examination Procedure Pertaining to Subject Matter
Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP,
Inc.)” (hereinafter “Berkheimer Memorandum”).8 The Berkheimer
Memorandum provided specific requirements for an Examiner to support
with evidence any finding that claim elements (or a combination of elements)
are well-understood, routine, or conventional.
Under Step 2B, the Examiner finds:
The claim(s) do not include additional elements that are
sufficient to amount to significantly more than the judicial
exception because the additional element of a processor of a
custodian system is a generic computer component that is
performing routine and conventional computer functions of
receiving identity information, validating, verifying, screening,
and calculating. . . .”
Final Act. 4 (emphasis added).
The specification at ¶ [0019] states “in other instances, well-
known structures and devices are shown in block diagram
form” and the drawings show almost all the components and
steps of the invention in block diagram form, leading the
Examiner to conclude that nearly every structure or device in
the invention can be considered well-known, routine, and
conventional under the BRI of the claims. Viewing the
limitations as an ordered combination does not add anything
further that looking at the limitations individually.
Final Act. 5 (emphasis added).

8 Available at https://www.uspto.gov/sites/default/files/documents/memo-
berkheimer-20180419.PDF.
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In the Appeal Brief, filed September 27, 2018, Appellant cites to
Berkheimer. See Appeal Br. 15. Appellant makes a demand for Berkheimer
evidence, such as one or more of the specific types of factual evidence
identified in the USPTO Berkheimer Memorandum: “Appellant respectfully
submits that the Examiner has not met this burden, and that the lack of cited
art and the lack of cited court decisions (with at least some
explanation/analysis), in fact, supports Appellant’s position that the claim
elements recite ‘significantly more’ than the Examiner-characterized abstract
idea.” Appeal Br. 15.
The Examiner disagrees with Appellant, and further explains the basis
for the rejection, relying on the Specification, at paragraphs 19, 30–32, as
supporting evidence:
As to the argument presented to para. [0019], the Examiner has
provided the rationale as to how the block diagrams can be
entirely well-known structures and devices under the broadest
reasonable interpretation of the specification. Although the
Appellant argues that the structures are not all well-known, the
specification nor the Appellant provides guidance as to what
structures are not well-known and under what instance the
structures are well-known; therefore the Examiner has
reasonably concluded that nearly all the structures could be
well-known in a certain instance and the additional
specification paras [0030]-[0032] support that the computer
components and structures can be nearly any well-known
structure.
Ans. 6–7 (emphasis added).
Appellant files a Reply Brief that further traverses the Examiner’s
findings regarding paragraph 19 of the Specification. However, Appellant
does not rebut or otherwise persuasively traverse the Examiner specific
findings regarding paragraphs 30–32 of the Specification, in the Appeal
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Brief (15–17) or in the Reply Brief. Arguments not made are waived. See
37 C.F.R. § 41.37(c)(1)(iv) (2018).
BASCOM
We note the Federal Circuit held in BASCOM that the claimed
Internet content filtering, which featured an implementation “versatile
enough that it could be adapted to many different users’ preferences while
also installed remotely in a single location,” expressed an inventive concept
in “the non-conventional and non-generic arrangement of known,
conventional pieces.” BASCOM Glob. Internet Servs., Inc. v. AT&T
Mobility LLC, 827 F.3d 1341, 1350 (Fed. Cir. 2016).
Although Appellant cites BASCOM as a case authority in support
(Appeal Br. 16), we do not find a substantive argument analogizing the
claims on appeal to the subject claim considered by the BASCOM court. In
particular, Appellant has not persuasively shown an unconventional, non-
generic arrangement regarding the non-abstract limitations of generic
computer components in any of the claims on appeal, as was held by the
court in BASCOM. See 2019 Memorandum, 84 Fed. Reg. at 52. Arguments
not made are waived. See 37 C.F.R. § 41.37(c)(1)(iv).
Further, regarding the use of the recited generic computer components
identified above in Table One, the Supreme Court has held that “the mere
recitation of a generic computer cannot transform a patent-ineligible abstract
idea into a patent-eligible invention.” Alice, 573 U.S. at 223. Our reviewing
court provides additional guidance: See FairWarning, 839 F.3d at 1096
(“[T]he use of generic computer elements like a microprocessor or user
interface do not alone transform an otherwise abstract idea into patent-
eligible subject matter.”); OIP Techs., 788 F.3d at 1363 (claims reciting,
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inter alia, sending messages over a network, gathering statistics, using a
computerized system to automatically determine an estimated outcome, and
presenting offers to potential customers found to merely recite “‘well-
understood, routine conventional activit[ies],’ either by requiring
conventional computer activities or routine data-gathering steps”).
This reasoning is applicable here. Therefore, on the record before us,
Appellant has not shown that the claims on appeal add a specific limitation
beyond the judicial exception that is not well-understood, routine, and
conventional, when the claim limitations are considered both individually
and as an ordered combination. See MPEP § 2106.05(d).
In light of the foregoing, we conclude, under the 2019 Memorandum,
that each of Appellant’s claims 2–10 and 18–26, considered as a whole, is
directed to a patent-ineligible abstract idea that is not integrated into a
practical application, and does not include an inventive concept.9 Therefore,
we sustain the Examiner’s Rejection under 35 U.S.C. § 101 of claims 2–10
and 18–26.

CONCLUSION
Under the Director’s 2019 Memorandum, as governed by relevant
case law, we conclude that all claims 2–10 and 18–26, rejected under 35
U.S.C. § 101, are directed to patent-ineligible subject matter.

9 For the reasons discussed above, grouped claims 2–10 and 18–26 fall with
representative independent claim 2 under 35 U.S.C. § 101. See 37 C.F.R.
§ 41.37(c)(1)(iv).

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DECISION SUMMARY
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
2–10, 18–26 101 Eligibility 2–10, 18–26

FINALITY AND 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). See
37 C.F.R. § 41.50(f).
AFFIRMED