Ex Parte KUSHKULEY et al

Patent Trials and Appeals Board

Mar 26, 2019

13645722 - (D) (P.T.A.B. Mar. 26, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
13/645,722 10/05/2012
74739 7590 03/28/2019
Potomac Law Group, PLLC (Oracle International)
8229 Boone Boulevard
Suite 430
Vienna, VA 22182
Alex KUSHKULEY
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.
20 ll -0062USO 1 7042
EXAMINER
GARCIA-GUERRA, DARLENE
ART UNIT PAPER NUMBER
3683
NOTIFICATION DATE DELIVERY MODE
03/28/2019 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):
patents@potomaclaw.com
bgoldsmith@potomaclaw.com
eofficeaction@appcoll.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ALEX KUSHKULEY and SU-MING WU
Appeal2018-001747
Application 13/645,722
Technology Center 3600
Before ELENI MANTIS MERCADER, JAMES W. DEJMEK, and
JOYCE CRAIG, Administrative Patent Judges.
MANTIS MERCADER, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants 1 appeal under 35 U.S.C. § 134 from a rejection of claims
1-20. We have jurisdiction under 35 U.S.C. § 6(b ).
We affirm.
1 The real party in interest is Oracle International Corporation. App. Br. 2.
Appeal2018-001747
Application 13/645,722
CLAIMED SUBJECT MATTER
The claims are directed to a retail product pricing markdown system.
Claim 1, reproduced below, is illustrative of the claimed subject matter:
1. A non-transitory computer readable medium having
instructions stored thereon that, when executed by a processor,
cause the processor to determine a pricing markdown schedule
for a retail item at a store, the pricing markdown determination
compnsmg:
receive demand parameters of the retail item at the store
and one or more constraints, the demand parameters comprising
a base demand, an elasticity, an inventory effect and a
seasonality;
express an unknown price curve for the retail item as a
linear combination of price orthogonal polynomials and price
coefficients for the price orthogonal polynomials, and an
unknown inventory curve for the retail item as a linear
combination of inventory orthogonal polynomials and inventory
coefficients for the inventory orthogonal polynomials;
determine a revenue in terms of values of the price
coefficients for the price orthogonal polynomials and the
inventory coefficients for the inventory orthogonal polynomials;
determine initial guesses of the price coefficients and the
inventory coefficients, the initial guesses being based on
historical data and determined using integrals;
determine a gradient of the revenue, the gradient of the
oR iiR
revenue being determined using ap 1 and ar,', where R is the
revenue, 12..i are the price coefficients, and L are the inventory
coefficients;
maximize the revenue based on the revenue, the initial
guesses, the gradient, and the constraints, wherein the constraints
are in terms of the price coefficients and the inventory
coefficients; and
based on the maximized revenue, generate the price
markdown schedule.
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Application 13/645,722
REJECTION
Claims 1-20 stand rejected under 35 U.S.C. § 101 as being directed to
patent-ineligible subject matter.
OPINION
Appellants argue that the claims are not abstract because had the
Examiner conducted the proper analysis, the Examiner would have
concluded that the alleged abstract idea of a
series of steps instructing how to receive demand parameters of
the retail item at the store and one or more constraints, express
an unknown price curve for the retail item, determine a
revenue in terms of values of the price coefficients for the price
orthogonal polynomials and the inventory coefficients for the
inventory orthogonal polynomials, determine an initial guess of
the price coefficients and the inventory coefficients, determine
a gradient of the revenue, maximize the revenue based on the
revenue, and generate the price markdown schedule
is not in any way similar to the concept of reducing distortion in digital
image processing of Digitech. 2 App. Br. 6-7. Appellants stop short of
distinguishing Digitech from their case. Appellants also cite Mayo for the
proposition that a "process is not unpatentable simply because it contains a
law of nature or a mathematical algorithm" as "an application of a law of
nature or mathematical formula to a known structure or process may well be
deserving of patent protection." Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 69-73 (2012) (internal quotation marks and
2 Digitech Image Techs. LLC v. Electronics for Imaging, Inc., 758 F.3d 1344
(Fed. Cir. 2014).
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Application 13/645,722
emphasis omitted). Again, Appellants stop short of distinguishing Mayo
from their case.
Appellants further argue that, contrary to the Examiner's finding,
there is no evidence that such complex mathematical relationships recited in
the pending claims can be performed manually. App. Br. 7-8.
Appellants also argue improvement of computer related technology
because, by expressing price curves and inventory curves in terms of an
orthogonal polynomial, "the huge space of all possible price curves and all
possible inventory curves is reduced to a small set of coefficients," which
results in efficiencies. App. Br. 9-10 citing Spec. para. 23.
Finally, Appellants argue that the claims do not preempt an abstract
idea. App. Br. 10.
We are not persuaded by Appellants' argument. 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 Supreme Court
has long interpreted 35 U.S.C. § 101 to include implicit exceptions: "[l]aws
of nature, natural phenomena, and abstract ideas" are not patentable. E.g.,
Alice Corp. v. CLS Banklnt'l, 573 U.S. 208,216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court's two-step framework, described in Mayo
and Alice. Id. at 217-18 (citing Mayo, 566 U.S. at 75-77). 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. Kappas, 561 U.S. 593, 611
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Application 13/645,722
(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 (Gottschalkv. 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 (1853))); 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
Supreme Court held that "[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula." Diehr, 450 U.S. at 176; 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
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Appeal2018-001747
Application 13/645,722
to a known structure or process may well be deserving of patent
protection.").
If the claim recites an abstract idea, we tum 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 (internal citation 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.
The PTO recently published revised guidance on the application of
§ 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed.
Reg. 50 (Jan. 7, 2019) ("Memorandum"). Under that guidance, we first look
to whether the claim recites:
( 1) any judicial exceptions, including certain groupmgs of
abstract ideas (i.e., mathematical concepts, certain methods of
organizing human activity, such as a fundamental economic
practice, or mental processes); and
(2) additional elements that integrate the judicial exception into
a practical application (see Manual of Patent Examining
Procedure (MPEP) § 2106.05(a}-(c), (e}-(h) (9th Ed., Rev. 08-
2017 (Jan. 2018)).
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:
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Application 13/645,722
(3) adds a specific limitation beyond the judicial exception that
is not "well-understood, routine, conventional" in the field (see
MPEP § 2106.0S(d)); or
( 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 Memorandum.
We agree with the Examiner that the claim is directed to an abstract
idea, and we conclude that claim 1 recites both mathematical concepts and
organizing human activity. Claim 1 recites, in pertinent part, mathematical
manipulations:
express an unknown price curve for the retail item as a
linear combination of price orthogonal polynomials and price
coefficients for the price orthogonal polynomials, and an
unknown inventory curve for the retail item as a linear
combination of inventory orthogonal polynomials and
inventory coefficients for the inventory orthogonal
polynomials;
determine a revenue in terms of values of the price
coefficients for the price orthogonal polynomials and the
inventory coefficients for the inventory orthogonal
polynomials;
determine initial guesses of the price coefficients and the
inventory coefficients, the initial guesses being based on
historical data and determined using integrals;
determine a gradient of the revenue , the gradient of the
oR {JR
revenue being determined using dpi and ot;', where R is the
revenue, 12.i are the price coefficients, and L are the inventory
coefficients;
maximize the revenue based on the revenue, the initial
guesses, the gradient, and the constraints, wherein the
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Application 13/645,722
constraints are in terms of the price coefficients and the
inventory coefficients; and
based on the maximized revenue, generate the price
markdown schedule.
Accordingly, we conclude that claim 1 reciting the above limitations
encompasses generating a price markdown schedule based on price and
inventory parameters-i.e., a mathematical relationship. Claim 1 further
recites a commercial interaction or sales activity wherein the end result is to
"maximize revenue" and "generate the price markdown schedule."
If the claim recites an abstract idea, we tum 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 (quoting Mayo, 566 U.S. at 72-73, 79). "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.
We agree with the Examiner's determination (see Ans. 9) that the
claimed combination merely describes how to generally "apply" the concept
of maximizing revenue by generating a price markdown schedule using
mathematical concepts. The claimed computer components of a computer-
readable medium, and a processor are all generic computer elements recited
at a high level of generality and are merely invoked as tools to execute
mathematical concepts and generate a price markdown schedule.
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Application 13/645,722
Appellants' Specification describes the processor as "any type of general or
specific purpose processor" (para. 14) and the computer readable medium as
"any available media" (para. 15). Spec. 6. Simply implementing the
abstract idea on a generic computer is not a practical application of the
abstract idea. See Memorandum, Step 2A, Prong Two.
Furthermore, merely combining several abstract ideas does not render
the combination any less abstract. RecogniCorp, LLC v. Nintendo Co., 855
F.3d 1322, 1327 (Fed. Cir. 2017) ("Adding one abstract idea (math) to
another abstract idea ... does not render the claim non-abstract."); see also
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). In other words, using mathematical concepts for
organizing human activity does make the abstract ideas any less abstract.
We also agree with the Examiner that the claimed mathematical
concepts could be performed by pen and paper. Ans. 9. Appellants'
argument to the contrary is not substantiated by evidence. In re Pearson,
494 F.2d 1399, 1405 (CCPA 1974) ("Attorney's argument in a brief cannot
take the place of evidence").
Finally, we note that preemption is the concern that drives the
exclusionary principle of judicial exceptions to patent-eligible subject
matter. Alice, 134 S. Ct. at 2354. However, preemption is not a separate test
of patent-eligibility, but is inherently addressed within the Alice framework.
See Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed.
Cir. 2015) ("While preemption may signal patent ineligible subject matter,
the absence of complete preemption does not demonstrate patent
eligibility."). Accordingly, Appellants' argument that claim 1 does not
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Application 13/645,722
preempt an abstract idea (App. Br. 10), is not, by itself, persuasive of patent-
eligibility.
Appellants' argument regarding improvement of computer related
technology because "the huge space of all possible price curves and all
possible inventory curves is reduced to a small set of coefficients," resulting
in efficiencies (App. Br. 9-10 citing Spec. para. 23), is not persuasive.
Appellants do not provide any evidence to support their assertion of
computer efficiencies. Furthermore, we agree with the Examiner that
receiving demand parameters of the retail item at the store and one or more
constraints, determining a revenue in terms of values of the price
coefficients for the price orthogonal polynomials and the inventory
coefficients for the inventory orthogonal polynomials, determining an initial
guess of the price coefficients and the inventory coefficients, and
determining a gradient of the revenue are an example of receiving and
processing data. Ans. 12. The various additional elements of the claims
also receive, process, and store data as well as receive and transmit data over
a network. Id. Additionally, the Examiner determined that the application
of orthogonal polynomials and Chebyshev polynomials does not amount to
significantly more and would not result in an improvement to the computer
itself or to another technology or technical field, and does not go beyond
well-understood, routine, and conventional in the art activities. See Final
Act. 15. We note that the patents of record including Walser (para. 103),
Desai (Figures 2B and 2C), and Myr (paras. 99, 100), use coefficients in the
analysis of optimized price markdown schedules. Accordingly, this further
supports the Examiner's finding that the application of coefficients is
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Application 13/645,722
nothing more than what is well-understood, routine, and conventional
activity in the field. See Memorandum, Step 2B, Prong 2.
Accordingly, we affirm the Examiner's rejection of claims 1-20 under
35 U.S.C. § 101.
DECISION
We affirm the Examiner's rejection of claims 1-20.
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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