Ex Parte CLARK

Patent Trial and Appeal Board

Nov 26, 2018

14925412 (P.T.A.B. Nov. 26, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/925,412 10/28/2015
62008 7590 11/28/2018
MAIER & MAIER, PLLC
345 South Patrick Street
ALEXANDRIA, VA 22314
FIRST NAMED INVENTOR
Vince CLARK
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.
VCLARK-001-COA 5150
EXAMINER
AKINTOLA, OLABODE
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
11/28/2018 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):
patent@maierandmaier.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte VINCE CLARK
Appeal2017-008775
Application 14/925,412 1
Technology Center 3600
Before ANTON W. PETTING, JOSEPH A. FISCHETTI, and KENNETH
G. SCHOPPER, Administrative Patent Judges.
FISCHETTI, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant seeks our review under 35 U.S.C. § 134 of the Examiner's
final rejection of claims 1-14. We have jurisdiction under 35 U.S.C. § 6(b).
SUMMARY OF DECISION
We AFFIRM.
1 Appellant identifies Vince Clark as the real party in interest. Br. 2.
Appeal2017-008775
Application 14/925,412
THE INVENTION
Appellant claims a method and system "for leveraging certain
business entities as real estate investment trusts." Specification ,r 4.
Claim 1 reproduced below, is representative of the subject matter on
appeal.
1. A method for leveraging certain business entities as real estate
investment trusts, comprising:
creating at least one operating partnership associated with a REIT;
placing at least one business entity into the at least one operating
partnership;
using a probabilistic model based on the current and projected assets
and liabilities of the business entity to determine a present value of the
business entity to the operating partnership;
determining a number of operating partnership units that reflect the at
least one business entity contribution to the operating partnership by
comparing the present value of the business entity to a present value of the
operating partnership calculated using the same probabilistic model when
the operating partnership has other value;
transferring the number of operating partnership units associated with
the at least one operating partnership to the owner of the at least one
business entity;
engaging in a transaction whereby a plurality of operating partnership
units associated
with the at least one operating partnership are exchanged for a plurality of
shares in the REIT; and
selling a plurality of the exchanged plurality of the shares in the REIT
to the public.
THE REJECTIONS
The Examiner relies upon the following as evidence of
unpatentability:
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Application 14/925,412
Bancroft
Petersen
Kroutik
Kunz
US 2005/0004861 Al
US 2008/0005040 Al
US 2009/0089198 Al
US 8,321,316 Bl
The following rejections are before us for review.
Claims 1-14 are rejected under 35 U.S.C. § 101.
Jan. 6,2005
Jan.3,2008
April 2, 2009
Nov. 27, 2012
Claims 1-14 are rejected under 35 U.S.C. § 103 as unpatentable over
Petersen, Bancroft, Kunz, and Kroutik.
ANALYSIS
35 U.S.C. § 103 REJECTION
Each of independent claims 1 and 14 recites, in one form or another,
"determining a number of operating partnership units that reflect the at least
one business entity contribution to the operating partnership by comparing
the present value of the business entity to a present value of the operating
partnership calculated using the same probabilistic model when the
operating partnership has other value."
The Examiner found concerning this limitation,
Kunz teaches a tool for calculating net value based
on assets and liabilities ( col. 8, lines 5 5-60).
Therefore, it would have been obvious to one of
ordinary skill in the art before the effective filing
date of the invention to include these feature as
taught by Kunz for the obvious reason of
estimating the current value of the entity.
Examiner notes that usmg the same calculator
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Application 14/925,412
(probabilistic model) to calculate the present value
of both the business entity and operating
partnership or any parameter for that matter would
have been obvious since the calculator works the
same regardless of the parameter in question.
Kroutik teaches the concept of determining a
number of operating partnership units that reflect
the at least one business entity contribution to the
operating partnership by comparing the present
value of the business entity to a present value of
the operating partnership calculated using the same
probabilistic model when the operating partnership
has other value (fig. 5, 0057, 0060, 0062-0063).
(Final Act. 7).
Appellant however argues,
Kunz merely teaches income analysis tools for
wealth management, and is cited in the outstanding
Action for an alleged teaching of a tool for
calculating net value based on assets and liabilities.
The Office appears to concede that Kunz does not
explicitly teach the probabilistic model of the
present invention but nonetheless concludes this
limitation would be obvious 'since the calculator
works the same regardless of the parameter in
question.'
(Appeal Br. 7).
We agree with Appellant. We find nothing in the excerpts cited by
the Examiner which discloses, suggests, or makes obvious the claimed,
"comparing the present value of the business entity to a present value of the
operating partnership calculated using the same probabilistic model."
Our review of Kunz reveals that Kunz discloses:
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Application 14/925,412
The Net Worth analysis tool 904 can be configured
to assist a user with identifying assets and
liabilities and to calculate a Net Worth value based
on the identified assets and liabilities. In this
manner, the Net Worth analysis tool 904 can be
employed to generate a personalized balance sheet
of assets and liabilities for clients 104.
Kunz 8: 56-62.
Our review of Kroutik at paragraph 57 reveals,
an electronic system for creating, marketing, and
selling equity shares, represented by stock in
individual real estate parcels, between an owner of
the individual real estate parcel and at least one of
a plurality of investors is provided.
Paragraph 60 of Kroutik only discloses a
real estate information system communication
coupling, which may be connected to the central
controller across the network between the central
controller and a real estate information system, is
configured to receive information validating real
estate parcel value, existing debt, and property
conditions.
Paragraph 63 of Kroutik only discloses a
central controller, upon receiving a request from
the investor interface, is configured to invoke the
pricing system to retrieve one or more stock shares
from the real estate stock offering database,
associate a price with the one or more stock shares,
and to deliver the price to the investor interface.
Upon receiving a purchase commitment from the
investor interface, the central controller is
configured to invoke the trading system to
generate an identifier specifying at least a financial
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Application 14/925,412
account.
As shown above, nothing in these excerpts discloses or suggests the
use of a probabilistic model. The Specification describes using a
probabilistic model in the context of:
it may be necessary to determine the value of
every business entity to be contributed to the REIT
using a consistent methodology. For example, a
computer may be configured to accept user input
regarding a business entity to be placed into an
operating partnership by an owner of the business
entity; determine, using a probabilistic model
based on the current and projected assets and
liabilities of the business entity, a present value of
the business entity to the operating partnership;
determine, based on the present value of the
business entity to the operating partnership and the
present value of the operating partnership, a
number of operating partnership units that reflect
the business entity contribution to the operating
partnership; and award said number of operating
partnership units to the owner of the business
entity.
,r 26. The Examiner equates the calculator in Kunz with the claimed
"probabilistic model" (Final Act. 7:7), but it is not apparent and the
Examiner does not explain how the two equate. A model is defined as "a
system of postulates, data, and inferences presented as a mathematical
description of an entity or state of affairs."2 In contrast, the disclosed
calculator in Kunz deals with empiric values which "assist a user with
2 https://www.merriam-webster.com/dictionary/model (last visited
10/21/18).
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identifying assets and liabilities and to calculate a Net Worth value based on
the identified assets and liabilities" (Kunz col. 8, 11. 57-59), and not
inferences, such as found in a model.
Therefore, we will not sustain the rejection of independent claims 1
and 14. Since claims 2-13 depend from claim 1, and since we cannot
sustain the rejection of claim 1, the rejection of the dependent claims 2-13
likewise will not be sustained.
35 U.S.C. § 101 REJECTION
We sustain the rejection of claims 1-14 under 35 U.S.C. § 101.
Appellant argues claims 1-14 as a group. We select independent
claim 1 as representative. The remaining claims stand or fall with claim 1.
See 37 C.F.R. § 4I.37(c)(l)(iv) (2015).
In judging whether independent claim 1 falls within the excluded
category of abstract ideas, we are guided in our analysis by the Supreme
Court's two-step framework, described in Mayo and Alice. Alice Corp. v.
CLS Bank Int'!, 134 S. Ct. 2347, 2355 (2014) (citing Mayo Collaborative
Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1296-97 (2012)). In
accordance with that framework, we first determine whether the claims are
"directed to" a patent-ineligible abstract idea. If so, we then consider the
elements of the claim both individually and as "an ordered combination" to
determine whether the additional elements "transform the nature of the
claim" into a patent-eligible application of the abstract idea. Id. This is a
search for an element or combination of elements sufficient to ensure that
the claim amounts to "significantly more" than the abstract idea itself. Id.
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The Court also stated that "the mere recitation of a generic computer cannot
transform a patent-ineligible abstract idea into a patent-eligible invention."
Id. at 2358.
The Specification states it relates to "a method for leveraging certain
business entities as real estate investment trusts." Spec. ,r 4. Thus, we
determine that the claims are directed to a fundamental business principle of
leveraging certain business entities as real estate investment trusts. The
Examiner also found that "the concept is similar to the method of
'organization of human activity."' (Final Act. 2). A method of organizing
human activities/behavior and fundamental economic practices long
prevalent in our system of commerce, are abstract ideas beyond the scope of
§ 101. See Alice, 134 S. Ct. at 2355-56. The Examiner further found that
the claimed "[p ]robabilistic models are considered mathematical
algorithm[ s] similar to the concept of gathering and combining data by
reciting steps of organizing information through mathematical
relationships." (Final Act. 2). We also agree. Collecting information,
analyzing it, and displaying results from certain results of the collection and
analysis are abstract ideas. See Elec. Power Grp., LLC v. Alstom S.A., 830
F.3d 1350 (Fed. Cir. 2016).
Considered as an ordered combination, the computer components of
Appellant's claim 143 add nothing that is not already present when the
3 Although our analysis here is directed to claim 1, for purposes of
completeness of our Alice analysis we address claim 14 for it is the only
claim which recites device components.
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limitations are considered separately. The sequence of data reception-
analysis-access/display is equally generic and conventional or otherwise
held to be abstract. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715
(Fed. Cir. 2014) (sequence of receiving, selecting, offering for exchange,
display, allowing access, and receiving payment recited an abstraction);
Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378
(Fed. Cir. 2017) (holding that sequence of data retrieval, analysis,
modification, generation, display, and transmission was abstract); Two-Way
Media Ltd. v. Comcast Cable Commc 'ns, LLC, 874 F.3d 1329, 1339 (Fed.
Cir. 2017) (holding sequence of processing, routing, controlling, and
monitoring was abstract). The ordering of the steps is, therefore, ordinary
and conventional.
We next consider whether additional elements of claim 1, both
individually and as an ordered combination, transform the nature of the
claim into a patent-eligible application of the abstract idea, e.g., whether the
claim does more than simply instruct the practitioner to implement the
abstract idea using generic computer components. We conclude that it does
not. Claim 1 fails to even mention a computer component, but even if it did,
the Specification, at paragraph 10, discloses using generic computer
components in a conventional manner for their known functions.
Appellant argues,
the present invention is not an abstract idea, but
rather a physical product that is an assemblage of
real property, known financial instruments and
business entities that have been reconstituted and
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transformed in an explicit way to form a different
transferrable product.
(Appeal Br. 5).
We disagree with Appellant. Business investment instruments, such
as real estate investment trusts (REITs), constitute contract-based
investments which are premised on agreements between parties, e.g.,
meetings of the minds, which is an abstraction. That the subject matter of
these agreements is physical property does not affect our determination
because "[l]imiting the field of use of the abstract idea to a particular
existing technological environment does not render any claims less
abstract." Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253,
1258 (Fed. Cir. 2016).) (citing Alice, 134 St. Ct. at 2358; Mayo, 132 S. Ct.
at 1294).
We also disagree with Appellant that repackaging ownership rights in
a financial instrument into shares falls short of the "transformation" held in
Diehr. In Diehr, the Court established eligibility under § 101 for claims
containing mathematical formulas when the claim "implements or applies
that formula in a structure or process which, when considered as a whole,"
causes or performs "e.g., transforming or reducing an article to a different
state or thing .... " Diamond v. Diehr, 450 U.S. 175, 192-193 (1981). In
contrast, we fail to see how further dividing ownership rights constitutes
transforming or reducing an article into a different state or thing.
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CONCLUSIONS OF LAW
We conclude the Examiner did not err in rejecting claims 1-14 under
35 U.S.C. § 101.
We conclude the Examiner did err in rejecting claims 1-14 under 35
U.S.C. § 103.
DECISION
The decision of the Examiner to reject claims 1-14 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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