Ex Parte AUSUBEL et al

Patent Trials and Appeals Board

Mar 1, 2019

14292838 - (D) (P.T.A.B. Mar. 1, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/292,838 05/31/2014
118582 7590
Stanley B. Green
STEIN IPLLC
1400 EYE STREET, NW
SUITE 300
Washington, DC 20005
03/05/2019
FIRST NAMED INVENTOR
Lawrence M. AUSUBEL
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
4349
EXAMINER
POINVIL, FRANTZY
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
03/05/2019 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):
docketing@steinip.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte LAWRENCE M. AUSUBEL, PETER C. CRAMTON, and
PAUL R. MILGROM
Appeal2017-005577
Application 14/292,83 8 1
Technology Center 3600
Before MURRIEL E. CRAWFORD, BRUCE T. WIEDER, and
MATTHEWS. MEYERS, Administrative Patent Judges.
WIEDER, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134 from the
Examiner's final rejection of claims 1-16. We have jurisdiction under
35 U.S.C. § 6(b). An oral hearing was held February 14, 2019.
We AFFIRM.
1 According to Appellants, the real party in interest is Efficient Auctions
LLC. (Appeal Br. 3.)
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Application 14/292,838
CLAIMED SUBJECT MATTER
Appellants' "invention relates to improving market mechanisms for
the sale or transfer of complementary goods and, more particularly, to the
implementation of market mechanisms yielding the efficient clearing of
spectrum encumbrances." (Spec. ,r 1.) In short, "[t]he present invention is a
system and method to sell or procure complementary goods." (Id. ,r 7.)
Claims 1 and 9 are the independent claims on appeal. Claim 1 is
illustrative. It recites: 2
1. A method implemented in a system compnsmg an
auctioneer computer and a communications interface, said
system arranged to receive information from a plurality of bidder
computers, said method for conducting a first auction of a first
set of items and a second auction of a second set of items, said
second set of items formed by an aggregation and/or partition of
said first set of items, at least two bidders participating in each
auction, the method comprising:
a) initiating the first auction by identifying the first set of
items,
b) receiving bids at the auctioneer computer for items in
the first set of items from the communications interface,
c) determining, using the auctioneer computer, whether
the first auction should terminate,
d) repeating b) and c) until the first auction is terminated,
e) initiating the second auction by identifying the second
set of items, wherein said second set of items is composed of
portions of selected items from said first set which are aggregated
with portions of other items from said first set,
f) receiving bids at the auctioneer computer for items in
the second set of items from the communications interface, and
2 Claim 1, as listed in the originally-filed Appeal Brief (Orig. Appeal
Br. 16), differs in format from claim 1 as amended in the response filed
June 27, 2015, and entered by the Examiner on September 11, 2015.
Claim 1, as entered by the Examiner, appears here.
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g) constraining received bids for items in one of said
auctions by accepting only bids which satisfy a constraint based
on bids received in another of said auctions.
REJECTION
Claims 1-16 are rejected under 35 U.S.C. § 101 as directed to a
judicial exception without significantly more.
ANALYSIS
In their briefs, Appellants do not separately argue independent claim 1
and 9, or dependent claims 2-8 and 10-16. We select claim 1 as
representative. Claims 2-16 will stand or fall with claim 1. See 37 C.F.R.
§ 4I.37(c)(l)(iv).
"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." 35 U.S.C. § 101. Section 101, however,
"'contains an important implicit exception: Laws of nature, natural
phenomena, and abstract ideas are not patentable.'" Alice Corp. Pty. Ltd. v.
CLS Bankint'l, 573 U.S. 208,216 (2014) (quoting Assoc.for Molecular
Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)).
Alice applies a two-step framework, earlier set out 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, 573 U.S. at 217.
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Under the two-step framework, it must first be determined if "the
claims at issue are directed to a patent-ineligible concept." Id. If the claims
are determined to be directed to a patent-ineligible concept, then the second
step of the framework is applied to determine if "the elements of the
claim ... contain[] an 'inventive concept' sufficient to 'transform' the
claimed abstract idea into a patent-eligible application." Id. at 221 ( citing
Mayo, 566 U.S. at 72-73, 79).
With regard to step one of the Alice framework, we apply a "directed
to" two prong test to: 1) evaluate whether the claim recites a judicial
exception, and 2) if the claim recites a judicial exception, evaluate whether
the claim "appl[ies ], rel[ies] on, or use[ s] 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." See 2019 Revised Patent Subject Matter Eligibility Guidance,
84 Fed. Reg. 50, 54 (Jan. 7, 2019) (hereinafter "2019 Guidance").
Here, the Examiner determines that claim 1 is directed to a
fundamental business practice, i.e., "performing a first auction of a first set
of items and a second auction of a second set of items." (Final Action 3.) In
other words, claim 1 is directed to a method of organizing human activity.
See 2019 Guidance at 52.
Appellants disagree and argue that "[t]he invention solves the
technical problem occasioned when the value of items subject to an auction
( the first set of items) depends on the availability of complementary items
which are not available in the auction." (Appeal Br. 4.)
Under step one of the Alice framework, we "look at the 'focus of the
claimed advance over the prior art' to determine if the claim's 'character as a
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whole' is directed to excluded subject matter." Affinity Labs of Texas, LLC
v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) (quoting Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016)).
The "directed to" inquiry ... cannot simply ask whether the
claims involve a patent-ineligible concept, because essentially
every routinely patent-eligible claim involving physical products
and actions involves a law of nature and/or natural phenomenon
.... Rather, 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." Internet Patents Corp. v. Active Network, Inc.,
790 F.3d 1343, 1346 (Fed. Cir. 2015).
Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). In
other words, the first step of the Alice framework "asks whether the focus of
the claims is on the specific asserted improvement in [ the relevant
technology] or, instead, on a process that qualifies as an 'abstract idea' for
which computers are invoked merely as a tool." Id. at 1335-36; see also
2019 Guidance at 54--55.
The Specification provides evidence as to what the claimed invention
is directed. In this case, the Specification discloses that the invention relates
to "a system and method to sell or procure complementary goods." (Spec.
,r 7.) Claim 1 provides further evidence. Claim 1 recites a "method for
conducting a first auction of a first set of items and a second auction of a
second set of items ... comprising:" "initiating the first auction," "receiving
bids," "determining ... whether the first auction should terminate,"
"repeating ... until the first auction is terminated," "initiating [a] second
auction," "receiving bids," "and constraining received bids." In short,
claim 1 is directed to performing auctions. Regardless of whether we
describe it in terms of a fundamental business practice or a commercial
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interaction, claim 1 is directed to the abstract idea of organizing human
activity. See 2019 Guidance at 52. This is accomplished by initiating the
auction/process, receiving information, and analyzing the information.
Although we and the Examiner describe, at different levels of
abstraction, to what the claims are directed, it is recognized that "[a]n
abstract idea can generally be described at different levels of abstraction."
Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016). That
need not and, in this case does not, "impact the patentability analysis." Id.
at 1241.
We note that claims directed to performing auctions, have been
determined to be directed to an abstract idea. See, e.g., In re Schrader, 22
F.3d 290 (Fed. Cir. 1994); see also Priceplay.com, Inc. v. AOL Advert., Inc.,
83 F. Supp. 3d 577 (D. Del. 2015), aff'd 627 F. App'x 925 (Fed. Cir. 2016).
Additionally, "we have treated collecting[, i.e., receiving] information,
including when limited to particular content (which does not change its
character as information), as within the realm of abstract ideas." Elec.
Power Grp., 830 F.3d at 1353. "In a similar vein, we have treated analyzing
information by steps people go through in their minds, or by mathematical
algorithms, without more, as essentially mental processes within the
abstract-idea category." Id. at 1354. The limitations recited in claim 1 could
be performed by a person using a pencil and paper, or with ordinary mental
steps. See id. at 1355. "Here, the claims are clearly focused on the
combination of those abstract-idea processes." Id. at 1354.
We do not find persuasive Appellants' argument that "[t]he invention
solves the technical problem occasioned when the value of items subject to
an auction ( the first set of items) depends on the availability of
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complementary items which are not available in the auction." (Appeal
Br. 4.) As an initial matter, claim 1 does not recite "complementary items."
The Specification discloses that "[g]ood A and good Bare said to be
complements when they are most usefully consumed or produced together."
(Spec. ,r 3.) But claim 1 simply recites that "said second set of items is
composed of portions of selected items from said first set which are
aggregated with portions of other items from said first set." Therefore, we
find that Appellants' argument is not commensurate with the scope of
claim 1. Moreover, the steps of performing a second auction on a subset of
the items from the first auction do not solve a technical problem. Rather, the
asserted improvement is to a commercial/business practice regarding
auctioning items.
Appellants do not persuasively argue how the invention improves a
technical field or the functioning of a computer. Appellants use the
computer to receive and analyze data. And "relying on a computer to
perform routine tasks more quickly or more accurately is insufficient to
render a claim patent eligible." See OIP Techs., Inc. v. Amazon.com, Inc.,
788 F.3d 1359, 1363 (Fed. Cir. 2015). Moreover, "[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).
Additionally, the limitations of claim 1 do not recite implementation
details. Instead, they recite functional results to be achieved. In other
words, claim 1 does not recite "a particular way of programming or
designing the software ... , but instead merely claim[ s] the resulting
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[method]." Apple, Inc., 842 F.3d at 1241. "Indeed, the claim language here
provides only a result-oriented solution, with insufficient detail for how a
computer accomplishes it. Our law demands more." Intellectual Ventures I
LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1342 (Fed. Cir. 2017).
Nor do we find persuasive Appellants' argument that "assum[ing] that
the rejection is based on the alleged proposition that if some auctions are
considered a 'fundamental business practice' then all auctions are considered
patent ineligible." (Appeal Br. 11.) As discussed above, if a claim is
directed to a patent-ineligible concept (a determination under step one of the
Alice framework), without "apply[ing], rely[ing] on, or us[ing] the judicial
exception in a manner that imposes a meaningful limit on the judicial
exception," then the second step of the framework is applied to reach a
determination as to patent eligibility. (See Guidance at 52-55.)
Appellants also seek to analogize the claims to those in BASCOM
Global Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed.
Cir. 2016). (Appeal Br. 13-14.) Specifically, Appellants argue that
the rejected claims do not merely call for implementing an
auction on a computer. Rather the claims are directed at a
particular problem of allocating complementary goods where
one set ( a second set) of goods is formed by an aggregation and
partitioning of the items of the first set of goods and which also
includes constraining bids in one auction based on bids in another
auction. This is a specific solution to a specific problem and does
not pre-empt all ways of conducting auctions.
(Appeal Br. 14.)
We do not find this argument persuasive. In BASCOM, the court
determined that "an inventive concept can be found in the non-conventional
and non-generic arrangement of known, conventional pieces." BASCOM,
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827 F.3d at 1350. Specifically, "[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." Id. at 1350. The Federal Circuit determined that
this "particular arrangement of elements is a technical improvement over
prior art ways of filtering." Id. Here, the Appellants do not contend, and
claim 1 does not specify, that the recited auctioneer computer must be
arranged in a non-conventional manner. Nor do Appellants explain how the
claimed method allegedly improves the function of the auctioneer computer.
Rather, Appellants' argument is, at best, an argument that the claimed
invention provides an improved commercial interaction, i.e., that the claim is
to the abstract idea of an improved auction. Additionally, as discussed
above, claim 1 does not even recite "complementary goods." Thus, we also
find that Appellants' argument is not commensurate with the scope of the
claim.
Moreover, Appellants do not argue that they invented the "auctioneer
computer." (See, e.g., Spec. ,r 31.) Nor do we see how the recitation of the
auctioneer computer, even in conjunction with the recited functions,
"ensure[ s] 'that the [claim] is more than a drafting effort designed to
monopolize the [abstract idea]." Alice, 573 U.S. at 221 (brackets in original)
(quoting Mayo, 566 U.S. at 77.)
Citing McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d
1299, 1313 (Fed. Cir. 2016), Appellants argue that, like the claim limitations
in McRO, the limitations in claim 1 "will likewise prevent broad preemption
of all auction processes or even auction processes that include two auctions."
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(Appeal Br. 14.) We do not find this argument persuasive. Preemption is
not a separate test.
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 132 S. Ct. at 1294
[566 U.S. at 72-73].
CLS Bankint'l v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1281 (Fed. Cir.
2013) (Lourie, J., concurring), aff'd, 573 U.S. 208 (2014). Moreover,
"[ w ]here a patent's claims are deemed only to disclose patent ineligible
subject matter under the Mayo framework, as they are in this case,
preemption concerns are fully addressed and made moot." Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
In other words, "preemption may signal patent ineligible subject matter,
[but] the absence of complete preemption does not demonstrate patent
eligibility." Id.
Appellants also seek to analogize claim 1 to the claims in Trading
Technologies International, Inc. v. CQG, Inc., 675 F. App'x 1001 (Fed. Cir.
2017). (Reply Br. 5---6.) Appellants argue that "Li]ust as in Trading, the
claims involved in this appeal have no pre-electronic trading analog" and
that "[t]he inventive method and system in Trading appear also to be
implemented using generic computer hardware." (Reply Br. 5.) We are not
persuaded of error.
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Claim 1 in Trading Technologies recites, in part,
displaying the bid and ask display regions in relation to fixed
price levels positioned along the common static price axis such
that when the inside market changes, the price levels along the
common static price axis do not move and at least one of the first
and second indictors moves in the bid or ask display regions
relative to the common static price axis.
Trading Techs., 675 F. App'x at 1003. The Federal Circuit agreed with the
district court's determination that "[t]he claims require a specific, structured
graphical user interface paired with a prescribed functionality directly
related to the graphical user interface's structure that is addressed to and
resolves a specifically identified problem in the prior state of the art." Id.
at 1004. The Federal Circuit agreed with the district court that "the
challenged patents solve problems of prior graphical user interface devices
... in the context of computerized trading[] relating to speed, accuracy and
usability." Id. (internal quotations omitted). "The [district] court found that
these patents are directed to improvements in existing graphical user
interface devices." Id.; see also Core Wireless Licensing S.A.R.L. v. LG
Elecs., Inc., 880 F.3d 1356, 1362---63 (Fed. Cir. 2018) (The court determined
that "[t]he asserted claims in this case are directed to an improved user
interface for computing devices," that the claim "limitations disclose a
specific manner of displaying a limited set of information to the user, rather
than using conventional user interface methods," and that "[t]he disclosed
invention improves the efficiency of using the electronic device." The court
determined that the claims were not directed to an abstract idea.)
Here, Appellants do not explain what claim elements solve a problem
of prior graphical user interface devices or improve a graphical user
interface device. Nor do Appellants point to anything in the Specification
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disclosing how the claimed invention solves a problem relating to, or
improves upon, a graphical user interface device.
Appellants also do not persuasively argue, particularly in view of
Schrader and Priceplay.com, why the claimed auctions "have no pre-
electronic trading analog." To the extent Appellants are arguing that claim 1
recites a novel method for conducting auctions, we do not find this argument
persuasive. "The 'novelty' of any element or steps in a process, or even of
the process itself, is of no relevance in determining whether the subject
matter of a claim falls within the § 101 categories of possibly patentable
subject matter." Diamond v. Diehr, 450 U.S. 175, 188-89 (1981).
In view of the above, we agree with the Examiner that claim 1 is
directed to an abstract idea.
Step two of the Alice framework has been described "as 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."' Alice, 573 U.S.
at 217-18 (brackets in original) (quoting Mayo, 566 U.S. at 72-73).
Taking the claim elements separately, the function performed by the
generic computer at each step is purely conventional. Receiving and
analyzing information are basic computer functions, i.e., they are well-
understood, routine, and conventional functions previously known to the
industry. See Elec. Power Grp., 830 F.3d at 1356 (The claims "do not
include any requirement for performing the claimed functions of gathering,
analyzing, and displaying in real time by use of anything but entirely
conventional, generic technology. The claims therefore do not state an
arguably inventive concept .... "); see also In re Katz Interactive Call
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Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011) ("Absent a
possible narrower construction of the terms 'processing,' 'receiving,' and
'storing,' ... those functions can be achieved by any general purpose
computer without special programming.").
Considered as an ordered combination, the generic computer of
Appellants' method adds nothing that is not already present when the steps
are considered separately. For example, claim 1 does not, as discussed
above, purport to improve the functioning of the computer itself. Nor does it
effect an improvement in any other technology or technical field. Instead,
claim 1 amounts to nothing significantly more than an instruction to apply
the abstract idea using a generic computer. That is not enough to transform
an abstract idea into a patent-eligible invention. See Alice, 573 U.S. at 225-
26.
In view of the above, we are not persuaded that the Examiner erred in
rejecting claim 1. Claims 2-16 fall with claim 1. See 37 C.F.R.
§ 4I.37(c)(l)(iv).
DECISION
The Examiner's rejection of claims 1-16 under 35 U.S.C. § 101 is
affirmed.
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)(l )(iv).
AFFIRMED
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