Ex Parte Wesson et alDownload PDFPatent Trial and Appeal BoardFeb 7, 201713645283 (P.T.A.B. Feb. 7, 2017) Copy Citation United States Patent and Trademark Office UNITED STATES DEPARTMENT OF COMMERCE United States Patent and Trademark Office Address: COMMISSIONER FOR PATENTS P.O.Box 1450 Alexandria, Virginia 22313-1450 www.uspto.gov APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO. 13/645,283 10/04/2012 David S. Wesson PBK001 2590 34399 7590 02/09/2017 TtART TrK fr marktson EXAMINER Melanie Murdock DASS, HARISH T P.O. BOX 160727 AUSTIN, TX 78716-0727 ART UNIT PAPER NUMBER 3695 NOTIFICATION DATE DELIVERY MODE 02/09/2017 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): MMurdock@ TEX ASPATENTS .COM ghmptocor@texaspatents.com bpierotti @ texaspatents .com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte DAVID S. WESSON and OMAR BESIM HAKIM Appeal 2015-003264 Application 13/645,2831 Technology Center 3600 Before BIBHU R. MOHANTY, SHEILA F. McSHANE, and ROBERT J. SILVERMAN, Administrative Patent Judges. McSHANE, Administrative Patent Judge. DECISION ON APPEAL The Appellants seek our review under 35 U.S.C. § 134(a) of the Examiner’s final decision to reject claims 1—21. We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. 1 According to Appellants, the real party in interest is S Stream Capital, LLC. Appeal Brief filed September 26, 2014, hereafter “App. Br.,” 2. Appeal 2015-003264 Application 13/645,283 BACKGROUND The invention relates to facilitating the refinancing of real estate loans. Specification, hereafter “Spec.,” 14, Abstract. The invention provides for the calculation of a loan-to-value ratio, its comparison to an allowed threshold, and if the value of the ratio is greater than the threshold, then calculating the paydown capital to meet the threshold. Id. 122. Representative method claim 1 is reproduced from page 9 of the Appeal Brief (Claims App.) as follows, with emphasis added to the disputed limitations: 1. A method, the method comprising: calculating, via an apparatus, a loan-to-value ratio as a function of a balance owed on a real estate loan, and a re-appraised property value of a property associated with the real estate loan; responsive to the loan-to-value ratio being greater than a allowed loan-to-value threshold in a refinancing of the real estate loan, calculating via an apparatus, a value of paydown capital required to create a refinance loan-to-value ratio for a refinance loan that is less than or equal to the allowed loan-to-value threshold; and providing under revenue-capital repayment terms paydown capital equal to the value of paydown capital required to create the refinance loan-to-value ratio less than or equal to the allowed loan- to-value threshold. In a Final Rejection, under 35 U.S.C. § 103(a) the Examiner rejects: claims 1, 2, 8, 9, 15, and 16 as unpatentable over Chien2 and Courtney3; and, claims 3—7, 10-14, and 17—21 over Chien, Courtney, and Stmad II4. Final Action, hereafter “Final Act.,” 2—6, mailed February 21, 2014. In the 2 US Publication 2009/0271312 Al, published October 29, 2009. 3 US Publication 2001/0047327 Al, published November 29, 2001. 4 US Publication 2010/0185467 Al, published July 22, 2010. 2 Appeal 2015-003264 Application 13/645,283 Answer, the Examiner enters a new ground rejecting claims 1—21 under 35 U.S.C. § 101 as directed to non-statutory subject matter. Answer, hereafter “Ans.,” 2—4, mailed October 27, 2014. The Appellants exercised the option to maintain the appeal with the filing of a Reply Brief, with the Reply Brief addressing each ground of rejection under 37 C.F.R. § 41.39(b)(2). Reply Brief, hereafter “Reply Br.,” 2—6, filed December 18, 2014. DISCUSSION The Appellants argue the new ground of rejection under § 101 on the same issues, using claim 1 as representative. See Reply Br. 2—\. We will address the § 101 issues in the same manner. For the § 103 rejections, claims 1, 2, 8, 9, 15, and 16 are argued by the Appellants using claim 1 as representative. App. Br. 4—6. Additional arguments are presented for claims 3—7, 10-14, and 17—21 based on common issues. Id. at 6—7. In light of our decision on the obviousness rejections, we need only address issues related to independent claims 1, 8, and 15. 35 U.S.C. §101 The Examiner finds that claims 1—21 are patent-ineligible under 35 U.S.C. § 101 because they are directed to non-statutory subject matter not amounting to significantly more than an abstract idea because representative claim 1 is directed to the fundamental economic practice of refinancing, and is also directed to a method of organizing human activity. Ans. 3. The Examiner finds that the claimed method consists of the steps of appraising a property, comparing the value of appraised property with an outstanding 3 Appeal 2015-003264 Application 13/645,283 loan or mortgage and calculating the ratio of outstanding balance divided by value of property, “which is nothing but use of mathematic operations can be performed by human by using paper and pen/pencil, simple electronic calculator, or general purpose computer, and comparing visually or by calculator.” Id. The Examiner also finds that the steps of claim 1 do not qualify as “significantly more” because they only require a generic computer to perform generic computer functions. Id. Further, the Examiner finds that “the claim ... is nothing more than the instruction to implement the abstract idea . . . in a . . . well-understood, routine and conventional technological environment.” Id. at 4. The Appellants argue that the Examiner’s rejection refers to steps that do not appear in the claim at issue, and request that for this reason, the rejection should be withdrawn. Reply Br. 3. The Appellants additionally argue that claim 1 amounts to significantly more than an abstract idea because it goes beyond calculating the value of paydown capital and recites that this paydown capital is to be provided under revenue-capital repayment terms, and there is no showing by the Examiner that this is well understood in the field. Id. at 3^4. The Appellants allege the paydown capital under revenue-capital repayment terms is an unconventional step that represents significantly more than an abstract idea. Id. at 4. We are not persuaded by the Appellants’ arguments. To provide context, 35 U.S.C. § 101 provides that a new and useful “process, machine, manufacture, or composition of matter” is eligible for patent protection. The Supreme Court has made clear that the test for patent eligibility under Section 101 is not amenable to bright-line categorical rules. See Bilski v. Kappos, 130 S. Ct. 3218, 3229-30. There are, however, three limited, 4 Appeal 2015-003264 Application 13/645,283 judicially-created exceptions to the broad categories of patent-eligible subject matter in § 101: laws of nature; natural phenomena; and abstract ideas. See Mayo Collaborative Services v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012). In Alice, the Supreme Court reiterated the framework set forth previously in Mayo, “for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of these concepts.” Alice, 134 S. Ct. at 2355 (citation omitted). Under Alice, the first step of such analysis is to “determine whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. (citation omitted). If determined that the claims are directed to a patent- ineligible concept, the second step in the analysis is to consider the elements of the claims “individually and ‘as an ordered combination”’ to determine whether the additional elements “‘transform the nature of the claim’ into a patent-eligible application.” Id. (citing Mayo, 132 S. Ct. at 1291, 1297). In other words, the second step is to “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.’” Id. (citing Mayo, 132 S. Ct. at 1294). With this context in mind, we evaluate the Examiner’s rejections of the claims at issue. We agree with the Examiner that the claims are directed to an abstract idea. Claim 1 recites steps associated with calculations related to loan-to- value ratios and paydown capital to achieve certain ratios, which is a fundamental economic practice of refinancing involving mathematical calculations. Our reviewing court has found that if a method can be 5 Appeal 2015-003264 Application 13/645,283 performed by human thought alone, or by a human using pen and paper, it is merely an abstract idea and is not patent-eligible under § 101. CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1373 (Fed. Cir. 2011) (“. . . a method that can be performed by human thought alone is merely an abstract idea and is not patent-eligible under § 101These processes remain unpatentable even when automated to reduce burden to the user of what once could have been done with pen and paper. Id. at 1375 (“That purely mental processes can be unpatentable, even when performed by a computer, was precisely the holding of the Supreme Court in Gottschalk v. Benson, [409 U.S. 63 (1972)].”). Turning to the second step of the Alice analysis, although it appears that the Examiner refers to some steps that are not in the claim at issue, the Examiner identifies the correct claimed steps at issue (Ans. 3), and we find no reversible error because from the context of the findings it appears that the inclusion of others was inadvertent error. Moreover, the Appellants present no argument that the steps of the actual claim at issue are nothing more than instruction to implement an abstract idea, except for the argument that is based on the issue of paydown capital under revenue-capital repayment terms. See Reply Br. 4. On that issue, the Appellants allege that the provision of payback capital under revenue-capital is an unconventional step. There is no evidence, short of attorney argument, provided on this point. Id. For instance, no portions of the Specification are identified to provide support that the use of “revenue-capital” is unconventional or represent “significantly more.” The Appellants’ associated argument that the step that provides for paydown capital under revenue-capital repayment terms confines the claim to a particular application is not persuasive. Id. 6 Appeal 2015-003264 Application 13/645,283 Although it may be that there are other methods of calculations related to loan-to-value ratios that are not as limited as that claimed, the issue is not dispositive as to whether the claims are patent eligible. See Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1377 (Fed. Cir. 2015) (“While preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility.”). Therefore, based on the record before us, we sustain the rejection of claims 1—21 under 35 U.S.C. § 101. 35U.S.C.§ 103 The Examiner finds that Chien teaches calculating a loan-to-value ratio and providing paydown capital equal to the value of paydown capital required to create a refinance loan-to-value ratio less than or equal to the allowed threshold. Final Act. 3 (citing Chien || 11—12, 16, 19, 26, 36, 50, 61, 69-71 (implementation 1), 82—84, 90-93). The Examiner also determines that the invention is directed to payments to bring the loan-to- value ratio to below a threshold, and the nature of repayment, such as revenue capital repayment terms of claim 1, is directed to non-functional language. Id.\ Ans. 4—5 (citing Chien Fig. 1 (step 108), Fig. 2 (step 212); | 28). The Appellants argue that Chien fails to disclose providing paydown capital for a refinancing transaction under revenue capital repayment terms, and the clause “under revenue-capital repayment terms” of claim 1 modifies “paydown capital” and should be afforded patentable weight. App. Br. 5; Reply Br. 5. Upon consideration of the evidence on this record in light of the arguments advanced by the Appellants, we find that the Appellants have identified reversible error in the Examiner’s determination that the claims 7 Appeal 2015-003264 Application 13/645,283 are unpatentable. Accordingly, we reverse the Examiner’s obviousness rejection of the claims for the reasons discussed below. We agree with the Appellants that the term of claim 1 of “under revenue-capital repayment terms” modifies “paydown capital” and should be afforded patentable weight. We also agree with the Appellants that Chien fails to teach this limitation. We therefore cannot sustain the rejection of independent claim 1 or independent claims 8 and 15 that contain similar limitations at issue, as well as dependent claims 2—7, 9-14, and 16—21 by virtue of their dependencies on the independent claims. SUMMARY The rejection of claims 1—21 under 35 U.S.C. § 101 is affirmed. The rejections of claims 1—21 under 35 U.S.C. § 103(a) are reversed. No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a). AFFIRMED 8 Copy with citationCopy as parenthetical citation