Hodjat, Babak et al.

Patent Trials and Appeals Board

Dec 19, 2019

14259005 - (D) (P.T.A.B. Dec. 19, 2019)

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.
14/259,005 04/22/2014 Babak Hodjat SEN0003-DIV1 4242
93261 7590 12/19/2019
Bey & Cotropia PLLC (Trizetto Customer Number)
ATTN: Dawn-Marie Bey
213 Bayly Court
Richmond, VA 23229
EXAMINER
KHATTAR, RAJESH
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
12/19/2019 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):
bey_cotropia_docketing@cardinal-ip.com
dawnmarie@beycotropia.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte BABAK HODJAT and HORMOZ SHAHRZAD
____________

Appeal 2018-001738
Application 14/259,005
Technology Center 3600
____________

Before MURRIEL E. CRAWFORD, AMEE A. SHAH, and
ROBERT J. SILVERMAN, Administrative Patent Judges.

CRAWFORD, Administrative Patent Judge.

DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant1 seeks our review under 35 U.S.C. § 134 of the Examiner’s
final rejection of claims 1–7. We have jurisdiction under 35 U.S.C. § 6(b).
SUMMARY OF DECISION
We AFFIRM.
THE INVENTION
Appellant claims a class-based distributed evolutionary algorithm for
asset management and trading. (Spec. ¶ 1, Title).
Claim 1 is representative of the subject matter on appeal.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42. Appellant identifies the real party in interest as Sentient
Technologies (Barbados) Limited. (Appeal Brief 4).
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1. A server computer system for use
with a plurality of individuals, each individual in
the plurality of individuals identifying a plurality
of indicators and at least one corresponding action
in dependence upon the indicators,
the server computer system being for use
further with a plurality of client computers each
assigned to a respective class of individuals in the
plurality of individuals, each of the classes being
associated with a respective subset of indicators in
the plurality of indicators, not all of the subsets
being the same,
the plurality of individuals including a first
subset of individuals all of which are in a first one
of the classes of individuals, the server computer
comprising:
a memory accessible to the server computer
system and storing a server candidate pool having
individuals in the plurality of individuals;
a communications port through which the
server computer system receives individuals from
the client computers, including receiving from
client computers assigned to the first class
individuals in the first subset of the individuals;
and
a processor configured to:
determine whether the first class
satisfies a predetermined convergence
condition, and if so then to merge the first
class with a second one of the classes to
derive a merged class, the client computers
that were assigned to the first class being re-
assigned to the merged class, and
transmit to the client computers for
further evaluation, individuals in the first
subset of the received individuals;
wherein each individual in the first subset
transmitted for further evaluation is transmitted for
further evaluation to:
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a client computer assigned to the first class,
if the first class did not satisfy the predetermined
convergence condition, and
a client computer assigned to the merged class, if
the first class did satisfy thepredetermined
convergence condition.

THE REJECTION
Claims 1–7 are rejected under 35 U.S.C. § 101 as directed to a judicial
exception without significantly more.

ANALYSIS
35 U.S.C. § 101 REJECTION
We will sustain the rejection of claims 1–7 under 35 U.S.C. § 101.
The Supreme Court
set forth a framework for distinguishing patents
that claim laws of nature, natural phenomena, and
abstract ideas from those that claim patent-eligible
applications of those concepts. First, . . . determine
whether the claims at issue are directed to one of
those patent-ineligible concepts. If so, . . . then ask,
“[w]hat else is there in the claims before us?” To
answer that question, . . . consider the elements of
each 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. [The Court] described
step two of this analysis as a search for an
“‘inventive concept’”—i.e., an element or
combination of elements that is “sufficient to
ensure that the patent in practice amounts to
significantly more than a patent upon the
[ineligible concept] itself.”
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Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217–218 (citing Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72–73 (2012))
(citations omitted, first and third alterations in original).
To perform this test, we must first determine whether the claims at
issue are directed to a patent-ineligible concept. The Federal Circuit has
explained that “the ‘directed to’ inquiry applies a stage-one filter to claims,
considered in light of the [S]pecification, based on whether ‘their character
as a whole is directed to excluded subject matter.’” See Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet
Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir.
2015)). It asks whether the focus of the claims is on a specific improvement
in relevant technology or on a process that itself qualifies as an “abstract
idea” for which computers are invoked merely as a tool. See id. at 1335–36.
In so doing we apply a “directed to” two prong test: 1) evaluate
whether the claim recites a judicial exception, and 2) if the claim recites a
judicial exception, evaluate whether the judicial exception is integrated into
a practical application. 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”).
The Examiner determines that the claims are directed to “determining
if the received individual satisfies a condition (i.e. rule) and merge the
individual to derive a merged class (i.e. identify option) and transmit the
individual for further evaluation (identify option)” which is similar to other
concepts that have been found by the courts to be abstract in nature such as
comparing new and stored information and using rules to identify options.
(Final Act. 3–4). The Examiner explains that claim 1 describes a concept of
collecting information, analyzing it, and displaying certain results of the
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collection and analysis, which is similar to the concept found to be abstract
by the courts. (Ans. 4). The Examiner finds claim 1 recites limitations in
addition to the abstract idea, i.e., the server computer system, a plurality of
client computers, a memory accessible to the server computer system, and a
processor. These are all recited at a high level of generality and their
broadest reasonable interpretation comprises a microprocessor, memory, and
other computer related components, which are simply performing their
routine, well-understood, and conventional functions similar to what has
been found by the courts not to be adding significantly more to the
underlying abstract idea. (Final Act. 4).
The Specification discloses that a genetic algorithm is a way to find an
optimum solution to a problem, using techniques that attempt to emulate
Darwinian evolution. To perform a genetic algorithm, it is provided with a
target problem, an environment and a fitness function by which the genetic
algorithm quantifies how good a particular solution is at negotiating the
environment. (Spec. ¶ 4). Genetic algorithms are used to categorize a stock
as following or not following a trend. (Spec. ¶ 3). A gene may be defined
by a set of rules governing its behavior within the environment. A rule is a
list of conditions followed by an action to be performed in the environment.
A fitness function may be defined by the degree to which an evolving rule
set is successfully negotiating the environment. A fitness function is thus
used for evaluating the fitness of each gene in the environment. A
reproduction function generates new genes by mixing rules with the fittest of
the parent genes. In each generation, a new population of genes is created.
(Spec. ¶ 4).
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At the start of the process of the invention, genes constituting the
initial population are created randomly by putting together the building
blocks that form a gene or rule. The memory in each client computer is
operative to store a multitude of solutions or “individuals”, each
characterized by a set of conditions. (Spec. ¶ 6). Each client computer is
assigned to one of a multitude of classes and each class is associated with
and represented by a subset of indicators that are used by client members to
create new genes or rules.
The invention is a method of solving a computational problem, which
is done by storing a multitude of genetic algorithms characterized by a
number of conditions, a subset of indicators, and a gene class. Data
associated with the gene is periodically received and the performance
characteristics of each gene are evaluated by comparing a solution or
individual provided by the gene with periodically received data associated
with that gene. (Spec. ¶ 11). Two or more classes are merged to generate a
new class of genes represented by a subset of indicators that are used by the
client members of the class to created new genes. (Spec. ¶ 27).
This disclosure makes it clear that the invention is directed to
collecting and analyzing data. As such, the Specification supports the
Examiner’s determination that the claims are directed to the concept of
collecting information, analyzing it, and displaying certain results of the
collection and analysis.
Consistent with this disclosure, claim 1 recites a processor configured
to analyze data to “determine whether the first class satisfies a
predetermined convergence condition, and if so then to merge the first class
with a second one of the classes to derive a merged class,” transmit “to the
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client computer[] . . . individuals in the first subset of . . . individuals,”
transmit individual for evaluation to “a client computer assigned to the first
class, if the first class did not satisfy the predetermined . . . condition,” and
“a client computer assigned to the merged class, if the first class did satisfy
the predetermined convergence condition.”
We thus agree with the Examiner’s findings that the claims are
directed to collecting information, analyzing it, and displaying certain
results. The steps of claim 1, for example, constitute “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.” Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354
(Fed. Cir. 2016); see also buySAFE, Inc. v. Google, Inc., 765 F.3d 1350,
1355 (Fed. Cir. 2014) (claims directed to certain arrangements involving
contractual relations are directed to abstract ideas). Thus, we find that the
claims recite a system that performs evaluation and judgement of whether a
particular individual or algorithmic solution satisfies a predetermined
convergence condition and as such is a mental process. Guidance, 84 Fed.
Reg. at 52.
Turning to the second prong of the “directed to test”, claim 1 requires
a “server computer system” and “client computers.” These recitations do
not impose “a meaningful limit on the judicial exception, such that the claim
is more than a drafting effort designed to monopolize the judicial
exception.” Guidance, 84 Fed. Reg. at 53. We find no indication in the
Specification, nor does Appellant directs us to any indication, that the
operations recited in independent claim 1 invoke any inventive
programming, require any specialized computer hardware or other inventive
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computer components, i.e., a particular machine, or that the claimed
invention is implemented using other than generic computer components to
perform generic computer functions. See DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (“[A]fter Alice, there
can remain no doubt: recitation of generic computer limitations does not
make an otherwise ineligible claim patent-eligible.”).
We also find no indication in the Specification that the claimed
invention effects a transformation or reduction of a particular article to a
different state or thing. Nor do we find anything of record, short of attorney
argument, that attributes any improvement in computer technology and/or
functionality to the claimed invention or that otherwise indicates that the
claimed invention integrates the abstract idea into a “practical application,”
as that phrase is used in the Guidance. See Guidance, 84 Fed. Reg. at 55.
In this regard, the recitation does not effect an improvement in the
functioning of a server computer system, client computers or other
technology, does not recite a particular machine or manufacture that is
integral to the claims, and does not transform or reduce a particular article to
a different state or thing. Id. Thus, claim 1 is directed to a judicial
exception that is not integrated into a practical application and thus is
directed to an “abstract idea.”
Turning to the second step of the Alice analysis, because we find that
the claims are directed to abstract ideas/judicial exceptions, the claims must
include an “inventive concept” in order to be patent-eligible, i.e., there must
be an element or combination of elements that is sufficient to ensure that the
claim in practice amounts to significantly more than the abstract idea itself.
See Alice, 573 U.S. at 217–18 (quoting Mayo, 566 U.S. at 72–73).
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The introduction of a computer into the claims does not alter the
analysis at Alice step two.
[T]he mere recitation of a generic computer cannot
transform a patent-ineligible abstract idea into a
patent-eligible invention. Stating an abstract idea
“while adding the words ‘apply it’” is not enough
for patent eligibility. Nor is limiting the use of an
abstract idea “‘to a particular technological
environment.’” Stating an abstract idea while
adding the words “apply it with a computer”
simply combines those two steps, with the same
deficient result. Thus, if a patent’s recitation of a
computer amounts to a mere instruction to
“implemen[t]” an abstract idea “on ... a computer,”
that addition cannot impart patent eligibility. This
conclusion accords with the preemption concern
that undergirds our § 101 jurisprudence. Given the
ubiquity of computers, wholly generic computer
implementation is not generally the sort of
“additional featur[e]” that provides any “practical
assurance that the process is more than a drafting
effort designed to monopolize the [abstract idea]
itself.”
Alice, 573 U.S. at 223 (alterations in original) (citations omitted).
Instead, “the relevant question is whether the claims here do more
than simply instruct the practitioner to implement the abstract idea . . . on a
generic computer.” Id. at 225. They do not.
Taking the claim elements separately, the function performed by the
computer system at each step of the process is purely conventional. Using a
computer to retrieve, select, and apply decision criteria to data and modify
the data as a result amounts to electronic data query and retrieval—one of
the most basic functions of a computer. All of these computer functions are
well-understood, routine, conventional activities previously known to the
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trading industry. See Elec. Power Grp., 830 F.3d at 1354; see also In re
Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed.
Cir. 2011) (“Absent a possible narrower construction of the terms
‘processing,’ ‘receiving,’ and ‘storing,’ . . . those functions can be achieved
by any general purpose computer without special programming”). In short,
each step does no more than require a generic computer to perform generic
computer functions. As to the data operated upon, “even if a process of
collecting and analyzing information is ‘limited to particular content’ or a
particular ‘source,’ that limitation does not make the collection and analysis
other than abstract.” SAP Am. Inc. v. InvestPic, LLC, 890 F.3d 1016, 1022
(Fed. Cir. 2018).
Considered as an ordered combination, the computer components of
Appellant’s claims add nothing that is not already present when the steps are
considered separately. In this regard, the combination of a server computer
system that communicates with client computers is well-understood,
conventional and routine. 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.
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Claim 1 does not, for example, purport to improve the functioning of
the server computer system itself or of the client computers. As we stated
above, claim 1 does not effect an improvement in any other technology or
technical field. The Specification spells out different generic equipment and
parameters that might be applied using this concept and the particular steps
such conventional processing would entail based on the concept of
information access under different scenarios. (See, e.g., Spec. ¶ 27). Thus,
the recitations in claim 1 amount to nothing significantly more than
instructions to apply the abstract idea of information access using some
unspecified, generic computer. Under our precedents, that is not enough to
transform an abstract idea into a patent-eligible invention. See Alice, 573
U.S. at 226.
We have reviewed all the arguments (Appeal Br. 5–8; Reply Br. 4–
16) Appellant has submitted concerning the patent eligibility of the claims
before us that stand rejected under 35 U.S.C. § 101. We find that our
analysis above substantially covers the substance of all the arguments, which
have been made. But, for purposes of completeness, we will address various
arguments in order to make individual rebuttals of same.
At the outset, we do not agree with Appellant’s characterization of the
invention as one that addresses the problem of too much data and too many
candidate individuals. In making this argument, Appellant states that the
invention drastically reduces the amount of data, which can be massive, that
must be transmitted to the client computers for their use in performing the
evaluations. (Appeal Brief 6–7). However, this characterization is not
commensurate in scope with the recitations of claim 1. Claim 1 does not
recite a massive amount of data or too much data and too many candidate
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individuals. Instead, claim 1 recites a “plurality of individuals” or solutions.
As a plurality can be interpreted as more than one individual, claim 1 is
broad enough to include a system for use with two individuals, which is not
a massive amount of data. Appellant argues that the embodiments of the
invention can operate in an environment in which there is a substantial
amount of data, so much in fact, that it is impossible to test an individual on
all the available data sample. However, this is not what is claimed.
We are not persuaded of error on the part of the Examiner by
Appellant’s argument that the claims, like the claims in Enfish, improve the
computer system in general. (Appeal Brief 11). Appellant argues that the
invention is directed to a server computer system which is arranged relative
to client computer systems so that it groups individuals into indicator-
defined classes, receives individuals from client computer systems, decides
whether to merge classes, and sends the individual back for further testing to
client computer systems with in the same class or the merged class. Id.
However, claim 1 differs from those found patent eligible in Enfish, where
the claims were “specifically directed to a self-referential table for a
computer database.” Enfish, 822 F.3d at 1337. The claims thus were
“directed to a specific improvement to the way computers operate” rather
than an abstract idea implemented on a computer. Id. at 1336. Here, by
contrast, the claims are not directed to an improvement to the way
computers operate.
We agree with the Examiner’s response to this argument found on
pages 9–12 of the Answer and adopt the response as our own. Specifically,
we agree that the improvements of claim 1 are in the area of genetic
algorithms and do not carry over to the computer functionality. Though the
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claims may accelerate and simplify the process of analyzing data, our
reviewing court has held that speed and accuracy increases stemming
from the ordinary capabilities of a general purpose computer “do[] not
materially alter the patent eligibility of the claimed subject matter.”
Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (U.S.), 687 F.3d
1266, 1278 (Fed. Cir. 2012).
We are not persuaded of error on the part of the Examiner by
Appellant’s argument that the steps of the claimed invention never were and
never could be purely mental steps because claim 1, for example, recites
numerous features that are not a familiar part of the conscious process that
can be performed in a person’s head. Appellant directs our attention to the
recitation of a plurality of client computers, a communication port, a server
computer system, and the transmission to client computers. However, these
elements were analyzed by the Examiner when determining whether the
claims were directed to significantly more than the abstract idea and were
not determines to be directed to the abstract idea of a mental process.
Appellant’s argument that portions of claim 1 are not recitations of
generic computer and network Internet components is unpersuasive.
Appellant directs our attention to the recitations of the client computers and
the steps that determine whether a first class satisfies a predetermined
convergence condition and if so merging the first class with a second one to
derive a merged class and transmitting individuals to the client computers
for further evaluation. (Appeal Brief 19). We agree with the Examiner’s
response to this argument found on pages 13–14 of the Answer and adopt
this response as our own. In particular, we agree that these recitations relate
to collecting information, analyzing it, and displaying certain results, and as
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such relate to the abstract idea itself. And as we found above, the recitation
of the client computers, which is not part of the abstract idea, is a recitation
of generic computer components. In the same vein, we do not agree with
Appellant that the way the computer decides which client computers are to
receive particular individuals for further evaluation cannot be said to be
conventional or generic and provides an inventive concept. (Appeal
Brief 20). The exact way the computer performs these functions is part of
the abstract idea of collecting information, analyzing it, and displaying
certain results, and thus cannot provide the inventive concept. Appellant’s
argument relies on the ineligible concept itself to establish that the claims
recite an inventive concept. But “[i]t has been clear since Alice that a
claimed invention’s use of the ineligible concept to which it is directed
cannot supply the inventive concept that renders the invention ‘significantly
more’ than that ineligible concept.” BSG Tech LLC v BuySeasons, Inc., 899
F.3d 1281, 1290 (Fed. Cir. 2018). Moreover, “[n]o matter how much of an
advance in the finance field the claims recite, the advance lies entirely in the
realm of abstract ideas, with no plausibly alleged innovation in the non-
abstract application realm.” SAP Am., Inc., 898 F.3d at 1163; see also id. at
1168.
We are not persuaded of error on the part of the Examiner by
Appellant’s argument that the claimed invention involves a specific novel
and unconventional method and reduces massive data flow among
computers. (Reply Br. 5). As we discussed above, claim 1 does not recite a
method in which massive data flow occurs because claim 1 only recites a
plurality of individuals which is broad enough to cover just two individuals.
In addition, to the extent Appellant maintains that the limitations of claim 1
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necessarily amount to “significantly more” than an abstract idea because the
claimed apparatus is allegedly patentable over the prior art, Appellant
misapprehends the controlling precedent. Although the second step in the
Alice/Mayo framework is termed a search for an “inventive concept,” the
analysis is not an evaluation of novelty or non-obviousness, but rather, a
search for “an element or combination of elements that is ‘sufficient to
ensure that the patent in practice amounts to significantly more than a patent
upon the [ineligible concept] itself.”’ Alice, 573 U.S. at 217–18 (alteration
in original). A novel and nonobvious claim directed to a purely abstract idea
is, nonetheless, patent-ineligible. See Mayo, 566 U.S. at 90.
In view of the foregoing, we will sustain this rejection as it is directed
to claim 1. We will also sustain the rejection as it is directed to the
remaining claims because the Appellant has not argued the separate
eligibility of these claims.

DOUBLE PATENTING REJECTION
We do not reach this rejection because the Appellant filed a terminal
disclaimer on December 6, 2017, which was accepted by the Examiner on
December 15, 2017. Therefore, this rejection is moot.

CONCLUSIONS OF LAW
We conclude the Examiner did not err in rejecting claims 1–7 under
35 U.S.C. § 101.

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DECISION
In summary:
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–7 101 Eligibility 1–7

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)(1)(iv).
AFFIRMED