Ex Parte Shier et al

Patent Trial and Appeal Board

Jan 16, 2019

13032415 (P.T.A.B. Jan. 16, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/032,415 02/22/2011
5073 7590
BAKER BOTTS L.L.P.
2001 ROSS A VENUE
SUITE 900
DALLAS, TX 75201-2980
01/18/2019
FIRST NAMED INVENTOR
Robert Charles Shier JR.
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.
002328.0817 6819
EXAMINER
CAMPEN, KELLY SCAGGS
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
01/18/2019 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):
ptomaill@bakerbotts.com
ptomail2@bakerbotts.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ROBERT CHARLES SHIER JR., ANDREW JACOB SHOURDS,
and MICHAEL ROBERT SHUTE
Appeal 2017-011168
Application 13/03 2,415
Technology Center 3600
Before ST. JOHN COURTENAY III, JUSTIN BUSCH, and
BETH Z. SHAW, Administrative Patent Judges.
COURTENAY, Administrative Patent Judge.
DECISION ON APPEAL
Appellants 1 appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 1-5, 7-13, 15-21, 23, and 24, which constitute all
the claims pending in this application. Claims 6, 14, and 22 are cancelled.
We have jurisdiction over the pending claims under 35 U.S.C. § 6(b ).
We affirm.
1 According to Appellants, the real party in interest is the Prudential
Insurance Company. App. Br. 2.
Appeal 2017-011168
Application 13/032,415
STATEMENT OF THE CASE
Embodiments of Appellants' invention relate "generally to financial
instruments and more particularly to a financial instrument transferable from
an employer to an employee." Spec. 1.
Exemplary Claim
1. A method for administering a financial instrument, the
method comprising:
storing a balance of an employee retirement plan account created
for an employee and owned by an employer of the employee as
an asset of the employer, the employee retirement plan account
comprising one or more variable investments, the balance of the
employee retirement plan account being based, at least in part,
on an initial deposit into the employee retirement plan account
from a deduction from wages paid by the employer to the
employee;
storing a minimum positive growth rate;
updating the stored balance of the employee retirement plan
account based on market performance of the one or more variable
investments;
calculating, by one or more processor devices executing logic, a
protected value, the calculated protected value being at least
equal to the initial deposit into the employee retirement plan
account growing at the stored minimum positive growth rate,
wherein the calculated protected value represents a guaranteed
positive rate of return regardless of market performance of the
one or more variable investments; and
upon occurrence of one or more of termination of the
employment of the employee, retirement of the employee,
restructuring of the employer, and receiving the employee's
request to receive ownership of the employee retirement plan
account, transferring ownership of the employee retirement plan
account from the employer to the employee as an asset of the
employee, wherein subsequent to or simultaneous to the transfer
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of ownership, a beneficiary designated by the employee is
guaranteed to receive the beneficiary's choice of either:
a lump sum of money from the employee retirement plan
account based on the updated stored balance of the employee
retirement plan account, or
for the life of the employee or the beneficiary, periodic
payments of an amount of money from the employee retirement
plan account based on the higher of the updated stored balance
of the employee retirement plan account or the calculated
protected value.
App. Br. 11 (Claims Appendix) (Contested limitations emphasized).
Rejections
A. Claims 1-5, 7-13, 15-21, 23, and 24 are rejected under 35 U.S.C.
§ 101, as being directed to a judicial exception, without
significantly more. Final Act. 3-7.
B. Claims 1-5, 7-13, 15-21, 23, and 24 are rejected under 35 U.S.C.
§ 101 on the ground of statutory double patenting. Final Act. 8-9.
C. Claims 1-5, 7-13, 15-21, 23, and 24 are rejected under 35 U.S.C.
§ 103 as being obvious over the combined teachings and
suggestions of Herr et al. (US 2007 /0033124 Al, published
February 8, 2007) (hereinafter "Herr") in view of Stiff et al. (US
8,024,248 B2, issued September 20, 2011) (hereinafter "Stiff').
Final Act. 9-14.
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Application 13/032,415
Issues on Appeal
A. Did the Examiner err in rejecting claims 1-5, 7-13, 15-21, 23, and 24
under 35 U.S.C. § 101, as being directed to a judicial exception,
without significantly more?
B. Did the Examiner err in rejecting claims 1-5, 7-13, 15-21, 23, and 24
under 35 U.S.C. § 101, on the ground of statutory double patenting
over the six commonly assigned patents and/or applications listed on
page 8 of the Final Action?
C. Did the Examiner err in rejecting claims 1-5, 7-13, 15-21, 23, and 24
under 35 U.S.C. § 103, as being obvious over the cited combination of
Herr and Stiff?
ANALYSIS
We have considered all of Appellants' arguments and any evidence
presented. We highlight and address specific findings and arguments for
emphasis in our analysis below.
Rejection A under 35 USC§ 101
Principles of Law
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 Bank Int '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
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and Alice. Id. 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. Kappas, 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 (Gottschalkv. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 192
( 1981) ); "tanning, dyeing, making waterproof cloth, vulcanizing India
rubber, smelting ores" (id. at 184 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 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 192 ("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
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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 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 ( 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.
USPTOJanuary 7, 2019 Revised Section 101 Memorandum
The PTO recently published revised guidance on the application of
§ 101. See 2019 Revised Patent Subject Matter Eligibility Guidance, 84
Fed. Reg. 50 (Jan. 7, 2019 ("Memorandum"). This new guidance is applied
in this opinion. Under the Memorandum guidance, we first look to whether
the claim recites:
(1) 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
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(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a}-(c), (e}-(h)).
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
( 4) simply appends well-understood, routine, and conventional
activities previously known to the industry, specified at a high level of
generality, to the judicial exception.
The Examiner's Rejection A under 35 USC§ 101
The Examiner concludes: Claims 1-5, 7-13, 15-21, 23, and 24 are
directed to a judicial exception, i.e., "[t]he claims are directed to the abstract
idea of creating financial contracts for retirement investment accounts."
Final Act. 3 ( emphasis added). 2 The Examiner provides several case
authorities in support:
The creation of a financial contractual relationship as recited in
the claim is a commercial arrangement involving contractual
relations similar to the fundamental economic practices, certain
methods of organizing human activities, an idea of itself and
mathematical relationships as found by the courts to be abstract
ideas ( e.g., hedging in In re Bilski, mitigating settlement risk in
2 "Patent eligibility under§ 101 presents an issue of law." Accenture Glob.
Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1340-41 (Fed.
Cir. 2013).
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In re Alice; managing an insurance policy (Bancorp); [3]
comparing new and stored information and using rules to identify
options (SmartGene); [4] managing a stable value protected life
insurance policy by performing calculations and manipulating
the results (Bancorp).
Final Act. 6.
The Examiner finds the claims do not include additional elements that
amount to significantly more than the judicial exception, because:
The additional elements or combination of elements in the claims
other than the abstract idea per se amount to no more than mere
instructions to implement the idea on a computer. Viewed as a
whole, these additional claim elements do not provide
meaningful limitations to transform the abstract idea into a
patent eligible application of the abstract idea such that the
claims amount to significantly more than the abstract idea itself.
The claim as a whole, does not amount to significantly more than
the abstract idea itself because: the claim does not affect an
improvement to another technology or technical field; the claim
3 The Examiner is referring to Bancorp Services, L.L. C. v. Sun Life Assur.
Co. of Canada (US.), 687 F.3d 1266, 1278 (Fed. Cir. 2012) ("the use of a
computer in an otherwise patent-ineligible process for no more than its most
basic function-making calculations or computations-fails to circumvent
the prohibition against patenting abstract ideas and mental processes.").
4 The Examiner is referring to SmartGene, Inc. v. Advanced Biological
Laboratories, SA, 555 F. App'x 950, 955 (Fed. Cir. 2014) ("Whatever the
boundaries of the 'abstract ideas' category, the claim at issue here involves a
mental process excluded from section 101: the mental steps of comparing
new and stored information and using rules to identify medical options.") In
SmartGene, step ( c) of Advanced Biological Laboratories' claim 1 recites:
"generating in said computing device advisory information for one or more
therapeutic treatment regimens in said ranked listing based on said patient
information and said expert rules." Id. at 952. (nonprecedential).
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does not amount to an improvement to the functioning of a
computer itself; and, the claim does not move beyond a general
link of an abstract idea to a particular technological
environment.
Final Act. 3--4 ( emphasis added).
The Examiner further concludes:
The claim recites the additional elements of a processor
executing logic to perform the calculating step. The memory
device is recited at a high level of generality and only performs
generic functions of storing data. Generic computers performing
generic computer functions, without an inventive concept, do not
amount to significantly more than the abstract idea. The type of
information being manipulated does not impose meaningful
limitations or render the idea less abstract. Looking at the
elements as a combination does not add anything more than the
elements analyzed individually. Therefore, the claim does not
amount to significantly more than the abstract idea itself. The
claim is not patent eligible.
Final Act. 7 ( emphasis added).
For the aforementioned reasons, the Examiner concludes that claims
1-5, 7-13, 15-21, 23, and 24 are not patent eligible under 35 U.S.C. § 101.
Under the revised USPTO January 7, 2019 Section 101 policy
Memorandum we consider the following points of law:
Memorandum (1 ): Are the claims directed to any judicial exceptions,
including certain groupings of abstract ideas (i.e., mathematical concepts,
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certain methods of organizing human interactions such as a fundamental
economic practice, or mental processes)?
Regarding Memorandum ( 1 ), our view is that the Examiner did not err
in concluding that each of claims 1-5, 7-13, 15-21, 23, and 24 on appeal is
directed at least to the abstract idea of "creating financial contracts for
retirement investment accounts" (Final Act. 3), which we conclude is a
certain method of organizing human behavior, i.e., a fundamental economic
practice. We note the preamble of claim 1 is expressly directed to "[a]
method for administering a financial instrument," which reinforces our view
that the claim considered as a whole is directed to a fundamental economic
practice. To the extent Appellants advance arguments regarding Alice step
one, which also fall under Memorandum (2) (covering MPEP
§§ 2106.05(a}-(c) and (e}-(h)), we address these arguments infra.
Relevant Argued Court Decisions
We do not find persuasive Appellants' attempt to analogize the claims
to the subject claims considered by the court in McRO, Inc. v. Bandai
Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016). App. Br. 7.
We note the subject claim considered by the McRO court concerned a
method for automatically animating lip synchronization and facial
expressions. McRO, 837 F.3d at 1303. The McRO court concluded the
subject claims did not recite an abstract idea because the computer animation
improved the prior art through the use of rules, rather than artists, to set
morph weights and transitions between phonemes. Id. at 1308. Thus, the
claimed invention in McRO allowed for computer performance of animation
steps that previously had to be performed by human animators. Id. at 1309.
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The subject claims in McRO used "limited rules in a process specifically
designed to achieve an improved technological result" over "existing,
manual 3-D animation techniques." Id. at 1316 ( emphasis added).
Here, Appellants claimed invention does not apply positively recited
rules, per se. The invention under appeal merely adapts to a technological
setting ( e.g., comprising generic processor devices, processing modules,
and/ or memory devices) the broad concept of transferring ownership of an
employee retirement account upon the occurrence of one or more of four
recited conditions precedent. See independent claim 1, and independent
claims 9 and 1 7, which recite similar language of commensurate scope.
Thus, it is our view that Appellants' claims merely implement generic
computer components to perform the recited functions. We emphasize that
McRO (837 F.3d at 1312) also guides that "[t]he abstract idea exception
prevents patenting a result where 'it matters not by what process or
machinery the result is accomplished."' (Quoting O'Reilly v. Morse, 56
U.S. 62, 113 (1854). Emphasis added.
Regarding Appellants' further arguments analogizing the claims
before us on appeal to the subject claim in Enfzsh to (App. Br. 7-8), we note
the Enfzsh court concluded "the claims at issue in this appeal are not directed
to an abstract idea within the meaning of Alice. Rather, they are directed to
a specific improvement to the way computers operate, embodied in the self-
referential table." Enfzsh, 822 F.3d at 1336 ( emphasis added).
Thus, the Enfzsh court concluded the self-referential logical table was
a specific type of data structure designed to improve the way a computer
stores and retrieves data in memory. Id. at 1339. Because the analysis stops
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if there is no abstract idea under Alice step 1, the Enfzsh court concluded the
subject claims were patent eligible. Id.
Here, Appellants have not persuasively shown that any features of the
claimed invention improve the way the recited generic computer components
store and retrieve data in a manner analogous to that found by the court in
Enfzsh. Moreover, Appellants' claims 1-5, 7-13, 15-21, 23, and 24 are
silent regarding any mention of a database, much less a self-referential
database table similar to the specific type of logical table arrangement the
Enfzsh court found was designed to improve the way a computer stores and
retrieves data in memory. See Enfish, 822 F.3d at 1336.
Therefore, we are not persuaded that Appellants' claimed invention
improves the functionality or efficiency of the recited generic computer
components, or otherwise changes the way the computer components
function, at least in the sense contemplated by the Federal Circuit in Enfzsh.
Regarding Memorandum (2), and for the reasons which follow, we
conclude that Appellants' claims 1-5, 7-13, 15-21, 23, and 24 do not
integrate the judicial exception into a practical application. See MPEP
§§ 2106.05(a}-(c) and (e}-(h). Applying the revised 101 Memorandum
guidance, we address these "practical application" MPEP sections seriatim.
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MPEP § 2106.05(a) "Improvements to the Functioning of a Computer
or To Any Other Technology or Technical Field" [R-08.2017]
This section of the MPEP guides: "In determining patent eligibility,
examiners should consider whether the claim "purport( s) to improve the
functioning of the computer itself' or "any other technology or technical
field ... While improvements were evaluated in Alice Corp as relevant to
the search for an inventive concept (Step 2B), several decisions of the
Federal Circuit have also evaluated this consideration when determining
whether a claim was directed to an abstract idea (Step 2A)."
The MPEP instructs: "Thus, an examiner may evaluate whether a
claim contains an improvement to the functioning of a computer or to any
other technology or technical field at Step 2A or Step 2B, as well as when
considering whether the claim has such self-evident eligibility that it
qualifies for the streamlined analysis." MPEP § 2106.05(a) ( emphasis
added).
Appellants urge: "the data processing system follows a specific set of
steps to determine when to transfer ownership that offers improvements over
existing technology. As a result, the claims are not directed to 'creating
financial contracts for retirement investment accounts."' App. Br. 7.
We disagree, because claim 1 expressly recites: "storing a balance of
an employee retirement plan account created for an employee .... "
( emphasis added). Every employee retirement plan account comes with
associated terms and conditions, which we find creates financial contracts
for retirement investment accounts, i.e., a fundamental economic practice.
Appellants further contend that "even if the claims are directed to an
abstract idea, the claims include [: ]"
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significantly more than an abstract idea because the claims
improve a technology or technical field. For example, the claims
recite "upon occurrence of one or more of termination of the
employment of the employee, retirement of the employee,
restructuring of the employer, and receiving the employee's
request to receive ownership of the employee retirement plan
account, transfer ownership of the employee retirement plan
account from the employer to the employee as an asset of the
employee." This feature is an improvement over prior art data
processing systems because prior art data processing systems
did not transfer these accounts from employer to employee upon
determination of termination of the employment of the
employee, retirement of the employee, restructuring of the
employer, and receiving the employee's request to receive
ownership of the employee retirement plan account. Because the
claimed data processing system includes additional, useful
functionality that prior art data processing systems did not
perform, the claimed feature improves a technology or technical
field.
App. Br. 8 ( emphasis added).
However, the Supreme Court guides: "[t]he '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." Diehr, 450 U.S. at 188-89
( emphasis added). Our reviewing court further emphasizes that "[ e ]ligibility
and novelty are separate inquiries." Two-Way Media Ltd. v. Comcast Cable
Commc 'ns, LLC, 874 F.3d 1329, 1340 (Fed. Cir. 2017); see also Affinity
Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1263 (Fed. Cir. 2016)
(holding that "even assuming" that a particular claimed feature was novel
does not "avoid the problem of abstractness").
In reviewing the record, we find the claims on appeal are silent
regarding specific limitations directed to an improved computer system,
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processor, memory, network, database, or Internet. Therefore, we find
Appellants' claimed invention does not provide a solution "necessarily
rooted in computer technology in order to overcome a problem specifically
arising in the realm of computer networks," such as considered by the court
in DDR Holdings LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir.
2014) ( emphasis added).
Further regarding the use of the recited generic computer, processor( s)
and database, the Supreme Court has held "the mere recitation of a generic
computer cannot transform a patent-ineligible abstract idea into a patent-
eligible invention." Alice, 134 S. Ct. at 2358. Our reviewing court provides
additional guidance: See FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d
1089, 1096 (Fed. Cir. 2016) ("[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., Inc. v.
Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (claims reciting,
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 activities"' by either requiring
conventional computer activities or routine data-gathering steps (internal
citation omitted)); see also Elec. Power Grp., 830 F.3d at 1355 ("We have
repeatedly held that such invocations of computers and networks that are not
even arguably inventive are 'insufficient to pass the test of an inventive
concept in the application' of an abstract idea." (quoting buySAFE, Inc. v.
Google, Inc., 765 F.3d 1350, 1353, 1355 (Fed. Cir. 2014))); Intellectual
Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1341 (Fed. Cir.
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2017) ("Rather, the claims recite both a generic computer element-a
processor-and a series of generic computer 'components' that merely
restate their individual functions . . . . That is to say, they merely describe
the functions of the abstract idea itself, without particularity. This is simply
not enough under step two.").
MPEP § 2106.05(b) Particular Machine [R-08.2017], and
MPEP § 2106.05(c) Particular Transformation [R-08.2017]
Further regarding Memorandum (2), Appellants contend: "A claim is
not directed to an abstract idea if it recites a physical process such as
transforming data." App. Br. 7 (emphasis added).
At the outset, we note that the machine-or-transformation test is only
applicable to method (process) claims 1-5, 7, and 8 on appeal.
Section 2106.05(c) of the MPEP guides: "Another consideration
when determining whether a claim recites significantly more is whether the
claim effects a transformation or reduction of a particular article to a
different state or thing." "[T]ransformation and reduction of an article 'to a
different state or thing' is the clue to patentability of a process claim that
does not include particular machines." Bilski v. Kappas, 561 U.S. 593, 658
(2010) (quoting Gottschalk v. Benson, 409 U.S. 63, 70, 175 (1972)). If such
a transformation exists, the claims are likely to be significantly more than
any recited judicial exception. Bilski emphasizes that although the
transformation of an article is an important clue, it is not a stand-alone test
for eligibility. MPEP § 2106.05(c).
However, regarding the argued transformation of data (App Br. 7),
our reviewing court guides: "[t]he mere manipulation or reorganization of
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data, however, does not satisfy the transformation prong." CyberSource
Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011).
Therefore, we conclude method claim 1 fails to satisfy the transformation
prong of the Bilski machine-or-transformation test. See MPEP § 2106.05( c)
"Particular Transformation."
Nor do Appellants argue that the method claims on appeal are tied to a
particular machine. See MPEP § 2106.05(b) "Particular Machine."
Arguments not made are waived. See 37 C.F.R. § 4I.37(c)(l)(iv).
MPEP § 2106.05(e) Other Meaningful Limitations [R-08.2017]
This section of the MPEP guides:
Diamond v. Diehr provides an example of a claim that recited
meaningful limitations beyond generally linking the use of the
judicial exception to a particular technological environment. 450
U.S. 175, 209 USPQ 1 (1981). In Diehr, the claim was directed
to the use of the Arrhenius equation ( an abstract idea or law of
nature) in an automated process for operating a rubber-molding
press. 450 U.S. at 177-78, 209 USPQ at 4. The Court evaluated
additional elements such as the steps of installing rubber in a
press, closing the mold, constantly measuring the temperature in
the mold, and automatically opening the press at the proper time,
and found them to be meaningful because they sufficiently
limited the use of the mathematical equation to the practical
application of molding rubber products. 450 U.S. at 184, 187,
209 USPQ at 7, 8. In contrast, the claims in Alice Corp. v. CLS
Bank International did not meaningfully limit the abstract idea
of mitigating settlement risk. 573 U.S. 134 S. Ct. 2347, 110
USPQ2d 1976 (2014). In particular, the Court concluded that the
additional elements such as the data processing system and
communications controllers recited in the system claims did not
meaningfully limit the abstract idea because they merely linked
the use of the abstract idea to a particular technological
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environment (i.e., "implementation via computers") or were
well-understood, routine, conventional activity.
MPEP § 2106.0S(e).
Applying this reasoning here, and for essentially the same reasons set
forth by the Examiner (Ans. 3 et seq.), we conclude Appellants' claims do
not add meaningful limitations beyond generally linking the use of the
judicial exception to a particular technological environment. Thus, we agree
with the Examiner's legal conclusion "that there are no meaningful
limitations in the claim that transform the judicial exception into a patent
eligible application such that the claim amounts to significantly more than
the judicial exception itself." Ans. 3 ( emphasis added).
MPEP §2106.05(!) Mere Instructions To Apply An Exception [R-
08.2017]
For the reasons discussed above, we conclude Appellants' claims
invoke generic computer components merely as a tool in which the computer
instructions apply the judicial exception (i.e., a fundamental economic
practice) - "creating financial contracts for retirement investment
accounts" (Final Act. 2), which we conclude is a certain method of
organizing human behavior, i.e., a fundamental economic practice. We
again note the preamble of claim 1 is expressly directed to "[a] method for
administering a financial instrument," which reinforces our view that the
claim considered as a whole is directed to a fundamental economic practice.
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MPEP § 2106.05(g) Insignificant Extra-Solution Activity [R-08.2017]
We conclude that "storing a balance of an employee retirement plan
account created for an employee ... the employee retirement plan account
comprising one or more variable investments" ( claim 1) is a step of data
gathering. Data gathering, as performed by the steps or function in
Appellants' claims, is a classic example of insignificant extra-solution
activity. See, e.g., In re Bilski, 545 F.3d 943, 963 (Fed. Cir. 2008) (en bane),
aff'd sub nom, Bilski v. Kappas, 561 U.S. 593 (2010).
The Supreme Court guides that 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 610-11 (quoting
Diehr, 450 U.S. at 191-92). On this record, we are of the view that
Appellants' claims do not operate the recited generic computer components
in an unconventional manner to achieve an improvement in computer
functionality.
MPEP § 2106.05(h) Field of Use and Technological Environment [R-
08.2017]
"[T]he Supreme Court has stated that, even if a claim does not wholly
preempt an abstract idea, it still will not be limited meaningfully if it
contains only insignificant or token pre- or post-solution activity-such as
identifying a relevant audience, a category of use,field of use, or
technological environment." Ultramercial Inc. v. Hulu LLC, 722 F.3d 1335,
1346 (Fed. Cir. 2013) (citations omitted) (emphasis added).
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Applying this reasoning here, we agree with the Examiner that "[t]he
claim as a whole, does not amount to significantly more than the abstract
idea itself because: the claim does not affect an improvement to another
technology or technical field; the claim does not amount to an improvement
to the functioning of a computer itself; and, the claim does not move beyond
a general link of an abstract idea to a particular technological environment."
Ans. 3. (emphasis added).
For at least the aforementioned reasons, we are not persuaded the
Examiner erred in concluding that each of claims 1-5, 7-13, 15-21, 23, and
24 on appeal is directed at least to the abstract idea of "creating financial
contracts for retirement investment accounts" (Final Act. 3), which we
conclude is a fundamental economic practice, that could additionally be
performed as mental steps. 5
Accordingly, for the reasons discussed above, we conclude
Appellants' claims do not include additional elements that integrate the
judicial exception into a practical application (see MPEP §§ 2106.05(a}-
( c ), ( e }-(h), as discussed above).
5 Our reviewing court guides: "a method that can be performed by human
thought alone is merely an abstract idea and is not patent-eligible under§
101." CyberSource, 654 F.3d at 1373. See also Synopsys, Inc. v. Mentor
Graphics Corp., 839 F.3d 1138, 1146-47 (Fed. Cir. 2016) ("While the
Supreme Court has altered the § 101 analysis since CyberSource in cases
like Mayo and Alice, we continue to 'treat[] 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."'
(brackets in original) ( quoting Elec. Power Grp. LLC v. Alstom S.A., 830
F.3d 1350, 1354 (Fed. Cir. 2016)).
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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:
Memorandum (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
Memorandum (4), simply appends well-understood, routine,
conventional activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
Here, the Examiner has provided in the record a list of computer
functions and a corresponding list of case authorities to support the findings
that the listed computer functions are well-understood, routine, and
conventional (WURC) functions. Final Act. 19--20. We note the
Examiner's Final Action (June 13, 2016) was mailed before Berkheimer v.
HP Inc. (881 F.3d 1360 (Fed. Cir. 2018)) was decided on February 8, 2018.
Nevertheless, we find the Examiner presciently provided factual
evidence that complies with the USPTO April 19, 2018 Berkheimer
Memorandum, entitled "'Changes in Examination Procedure Pertaining to
Subject Matter Eligibility, Recent Subject Matter Eligibility Decision
(Berkheimer v. HP, Inc.)"' ("USPTO Berkheimer Memorandum"). See
Berkheimer fact type 2: "A citation to one or more of the court decisions
discussed in MPEP § 2106.0S(d)(II) as noting the well-understood, routine,
conventional nature of the additional element(s)." USPTO Berkheimer
Memorandum 4.
In reviewing the record, we recognize that Appellants have not had
the opportunity to argue Berkheimer, which was decided by the Federal
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Circuit on February 8, 2018. We note the Reply Brief was filed on August
28, 2017. Because Berkheimer (881 F.3d at 1369) and the USPTO
Berkheimer Memorandum are intervening authorities, Appellants will be
permitted to argue any new issues related to Berkheimer in a Request for
Rehearing, under our procedural rule. See 3 7 C.F .R.
§ 4I.52(a)(2)("Appellant may present a new argument based upon a recent
relevant decision of either the Board or a Federal Court.").
However, on the record before us, Appellants have not shown that the
claims on appeal add a specific limitation beyond the judicial exception that
is not "well-understood, routine, and conventional" in the field (see MPEP
§ 2106.05(d)).
In light of the foregoing, we conclude, under the USPTO Revised 101
Guidance (Memorandum), that each of Appellants' claims 1-5, 7-13, 15-21,
23, and 24, considered as a whole, is directed to a patent-ineligible abstract
idea that is not integrated into a practical application.
Accordingly, for the reasons discussed above, we sustain the
Examiner's rejection A under 35 U.S.C. § 101 of claims 1-5, 7-13, 15-21,
23, and 24. 6
6 To the extent Appellants have not advanced separate, substantive
arguments for particular claims, or other issues, such arguments are waived.
See 37 C.F.R. § 4I.37(c)(l)(iv).
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Rejection B under 35 USC§ 101 (Statutory Double Patenting)
Appellants advance no arguments in the Appeal Brief or Reply Brief
traversing the Examiner's rejection of claims 1-5, 7-13, 15-21, 23, and 24
over six separate grounds of statutory double patenting, i.e., over the
commonly assigned patents and/or applications listed on page 8 of the Final
Action. Arguments not made are waived. See 37 C.F.R. § 4I.37(c)(l)(iv).
Therefore, we proforma sustain the Examiner statutory double patenting
rejections, under 35 U.S.C. § 101, as enumerated on page 8 of the Final
Action.
Rejection C under 35 USC§ 103(a)
GROUPING OF CLAIMS
Based upon Appellants' arguments (App. Br. 8-9) and our discretion
under 37 C.F.R. § 41.37(c)(l)(iv), we decide the appeal of obviousness
Rejection C of claims 1-5, 7-13, 15-21, 23, and 24 on the basis of
representative claim 1.
Rejection C of Independent Claim 1 under 35 US. C § 103 (a)
Issues: Under 35 U.S.C. § 103(a), did the Examiner err by finding the
cited combination of Herr and Stiff would have taught or suggested the
contested conditional limitation:
upon occurrence of one or more of termination of the
employment of the employee, retirement of the employee,
restructuring of the employer, and receiving the employee's
request to receive ownership of the employee retirement plan
account, transferring ownership of the employee retirement plan
account from the employer to the employee as an asset of the
employee [,]
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within the meaning of representative claim 1 ?7 ( emphasis added).
We have reviewed Appellants' arguments in the Briefs, the
Examiner's obviousness rejections, and the Examiner's response to
Appellants' arguments. Appellants do not proffer sufficient argument or
evidence for us to find error in the Examiner's findings. See Ex parte Frye,
94 USPQ2d 1072, 1075 (BPAI 2010) (precedential). For at least the reasons
discussed below, we agree with and adopt the Examiner's underlying factual
findings and legal conclusions of obviousness, as set forth in the Final
Action (9--14) and Answer (18-19).
The Examiner finds Herr ,r 42, as modified by the cited features of
Stiff, teaches or suggests the contested limitation of claim 1. See Final Act.
10. Turning to the evidence, Herr describes:
In certain embodiments, the method further comprises the step of
providing a death benefit, based on the participant's account
value, to be paid if the participant dies during a period in which
an account value is available. Certain embodiments may further
comprise the step of providing a joint life distribution option
which may be elected by the participant. The method may also
include the step of providing at least one of a lump sum death
benefit and payment of lifetime benefits to a designated
beneficiary upon death of the participant.
7 We give the contested claim limitations the broadest reasonable
interpretation ("BRI") consistent with the Specification. See In re Morris,
127 F.3d 1048, 1054 (Fed. Cir. 1997); see, e.g., Spec. 34--35 ("Although the
present invention has been described in several embodiments, a myriad of
changes and modifications may be suggested to one skilled in the art, and it
is intended that the present invention encompass such changes and
modifications as fall within the present appended claims.").
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Appellants disagree with the Examiner's findings, and contend
that Herr's description of plan termination or some other plan transition is
not "one or more of termination of the employment of the employee,
retirement of the employee, restructuring of the employer, and receiving the
employee's request to receive ownership of the employee retirement plan
account," as recited in claim 1. App. Br. 9 (emphasis added).
In response, the Examiner further explains the basis for the rejection:
[The] Examiner disagrees (see Herr [0042] The method may also
include the step of providing at least one of a lump sum death
benefit and payment of lifetime benefits to a designated
beneficiary upon death of the participant). Both Herr and Stiff
teach employee retirement plans. Herr clearly presents a plan that
includes death benefits to the beneficiary of employee upon the
death of said employee as is one example of how ownership
transfers from employee to the heirs of employee. Stiff goes
further to explain the transfer of ownership. Stiff describes that
it is common for an employer to maintain ownership and control
of a retirement benefits plan until an employee has worked for
employer for an amount of time. Stiff explains that these benefits
are designed to reward an employee for there long career. What
Stiff explains is the transfer of ownership only after a vesting
period has been reached. After such period employee has a
vested interest and control of retirement account. Further,
transferring ownership to the employee's beneficiary is within
the scope of transferring ownership to the employee. Further, the
instant claim is directed to the beneficiary of the employee
receiving a lump sum or periodic payments from the retirement
plan.
Ans. 19 ( emphasis added).
We find a preponderance of the evidence supports the Examiner's
underlying factual findings and ultimate legal conclusion of obviousness
regarding the contested limitation, because we find payment of a lump sum
death benefit to a designated beneficiary, as described in paragraph 42 of
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Herr, teaches or suggests "termination of the employment of the employee,"
due to the death of the employee. Claim 1. We emphasize the "upon
occurrence of one or more" claim language that precedes the contested list
of four conditions. Claim 1 ( emphasis added). Only one of the four recited
conditions needs to be taught or suggested to render the contested limitation
obvious.
We also emphasize that the Examiner's ultimate legal conclusion of
obviousness is based upon the combined teachings of the cited references.
Moreover, "'the question under 35 USC 103 is not merely what the
references expressly teach but what they would have suggested to one of
ordinary skill in the art at the time the invention was made."' Merck & Co.
v. Biocraft Labs., Inc., 874 F.2d 804, 807 (Fed. Cir. 1989) (quoting In re
Lamberti, 545 F.2d 747, 750 (CCPA 1976)). (Emphasis added); see also
MPEP § 2123.
This reasoning is applicable here. However, in the event that our
reviewing court may disagree, we further emphasize the conditional
language employed in the contested "upon occurrence of one or more" (four
listed conditions) limitation recited in claim 1. See Ex parte Schulhauser,
Appeal No. 2013-007847, at *9 (PTAB, April 28, 2016) (precedential)
(holding
The Examiner did not need to present evidence of the
obviousness of the remaining method steps of claim 1 that are
not required to be performed under a broadest reasonable
interpretation of the claim (e.g., instances in which the
electrocardiac signal data is not within the threshold
electrocardiac criteria such that the condition precedent for the
determining step and the remaining steps of claim 1 has not been
met.);
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see also Ex parte Katz, Appeal No. 2010-006083, 2011 WL 514314, at *4--5
(BPAI Jan. 27, 2011).
Here, we apply the controlling guidance of Schulhauser, and
additionally find the Examiner need not present evidence of the obviousness
of the conditional method step "upon occurrence of one or more" (four listed
conditions) as recited in claim 1, because the conditional step of transferring
ownership is not positively recited as being actually peiformed under a
broadest reasonable interpretation of the claim. 8
For at least the aforementioned reasons, we find a preponderance of
the evidence supports the Examiner's underlying factual findings and
ultimate legal conclusion of obviousness regarding the contested limitation
of representative claim 1, as rejected under rejection C. Therefore, we
sustain the Examiner's Rejection C of claim 1, and Rejection C of grouped
claims 2-5, 7-13, 15-21, 23, and 24, not argued separately. See supra,
"GROUPING OF CLAIMS."
8 See, also e.g., Applera Corp. v. Illumina, Inc., 375 Fed. Appx. 12, 21 (Fed.
Cir. 2010) (unpublished) (affirming a district court's interpretation of a
method claim as including a step that need not be practiced if the condition
for practicing the step is not met); Cybersettle, Inc. v. Nat 'l Arbitration
Forum, Inc., 243 Fed. Appx. 603, 607 (Fed. Cir. 2007) (unpublished) ("It is
of course true that method steps may be contingent. If the condition for
performing a contingent step is not satisfied, the performance recited by the
step need not be carried out in order for the claimed method to be
performed.").
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Reply Brief
To the extent Appellants may advance new arguments in the Reply
Brief not in response to a shift in the Examiner's position in the Answer, we
note arguments raised in a Reply Brief that were not raised in the Appeal
Brief or are not responsive to arguments raised in the Examiner's Answer
will not be considered except for good cause. See 37 C.F.R. § 41.41(b)(2).
CONCLUSIONS
The Examiner did not err in rejecting claims 1-5, 7-13, 15-21, 23,
and 24 under 35 U.S.C. § 101, as being directed to a judicial exception,
without significantly more.
Based on the doctrine of waiver, Appellants have not shown the
Examiner erred in rejecting claims 1-5, 7-13, 15-21, 2 3, and 24 under
35 U.S.C. § 101, on multiple grounds of statutory double patenting, as listed
in the Final Act. 8-9. See 37 C.F.R. § 4I.37(c)(l)(iv).
The Examiner did not err in rejecting claims 1-5, 7-13, 15-21, 23,
and 24 under 35 U.S.C. § 103, as being obvious over the cited combination
of Herr and Stiff.
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DECISION
We affirm the Examiner's decision rejecting claims 1-5, 7-13, 15-21,
23, and 24 under 35 U.S.C. § 101.
We affirm the Examiner's decision rejecting claims 1-5, 7-13, 15-21,
23, and 24 under 35 U.S.C. § 103.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv). See
37 C.F.R. § 4I.50(f).
AFFIRMED
29