Lukka, Inc.

Patent Trials and Appeals Board

May 3, 2021

2020005183 (P.T.A.B. May. 3, 2021)

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.
14/686,044 04/14/2015 Jake Ryan Benson 35852.2 2798
28221 7590 05/03/2021
PATENT DOCKET ADMINISTRATOR
LOWENSTEIN SANDLER LLP
ONE LOWENSTEIN DRIVE
ROSELAND, NJ 07068
EXAMINER
BORLINGHAUS, JASON M
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
05/03/2021 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@lowenstein.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JAKE RYAN BENSON
Appeal 2020-005183
Application 14/686,044
Technology Center 3600
Before DONALD E. ADAMS, JOHN G. NEW, and
RACHEL H. TOWNSEND, Administrative Patent Judges.
TOWNSEND, Administrative Patent Judge.
DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims directed to a method, systems, and tools
for computing taxable income and filing an estimated income tax statement
as being directed to patent-ineligible subject matter and for being obvious.
We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the term “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42. Appellant identifies the real party in interest as Lukka, Inc.
(Appeal Br. 4.)
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STATEMENT OF THE CASE
Claims 1–4, 6, 12, 14, 17–21, and 33–40 are on appeal. Claim 1,
reproduced below, is representative of the claimed subject matter:
1. A method, comprising:
[a] receiving, by a computing device, from a virtual
currency network, information regarding a plurality of virtual
currency transactions performed by a plurality of digital wallets
associated with a user;
[b] identifying, among the plurality of virtual currency
transactions, a set of incoming transactions representing receipts
of a virtual currency;
[c] identifying, among the plurality of virtual currency
transactions, a set of outgoing transactions representing
dispositions of the virtual currency;
[d] identifying, among the set of incoming transactions
and the set of outgoing transactions, a set of taxable transactions;
[e] identifying, among the set of incoming transactions, an
incoming transaction having a first transaction identifier
matching a second transaction identifier of an outgoing
transaction of the set of outgoing transactions;
[f] excluding, from the set of taxable transactions, the
identified incoming transaction and the identified outgoing
transaction as representing a non-taxable transfer among the
digital wallets of the user;
[g] computing a taxable income of the user based on the
identified set of taxable transactions;
[h] computing an estimated income tax payable by the user
on the taxable income; and
[i] electronically filing a statement of the estimated
income tax.
(Appeal Br. 25 (bracketed lettering added).)
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REFERENCES
The prior art relied upon by the Examiner is:
Name Reference Date
Wolfgang Schon et al. A Common
Consolidated Corporate
Tax Base for Europe
2008
Hakim US 2012/0101922 A1 Apr. 26, 2012
Sharp US 2016/0012465 A1 Jan. 14, 2016

REJECTIONS
The following grounds of rejection by the Examiner are before us on
review:
Claims 1–4, 6, 12, 14, 17–21, and 33–40 are rejected under 35 U.S.C.
§ 101 because the claimed invention is directed to an abstract idea without
significantly more.
Claims 1–4, 6, 12, 14, 17–21, and 33–40 are rejected under 35 U.S.C.
§ 103 as being unpatentable over Hakim, Schon, and Sharp.
DISCUSSION
I. Patent-Ineligible Subject Matter
The Dispute
The Examiner finds that the steps of claim 1 recite an abstract idea in
“a series of steps instructing how to perform tax computations, which is a
fundamental economic principle” which is a method of organizing human
interaction. (Final Action 2.) According to the Examiner, everything in the
claim from the step of receiving information regarding a plurality of virtual
currency transactions by a plurality of digital wallets through filing a
statement of the estimated tax make up the abstract idea. (Id.)
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The Examiner explains that the abstract idea is not integrated into a
practical application because to carry the method out only requires
generically recited computer elements, such as a network and computing
device, and the high-level of generality at which the elements are recited
“amounts [to] no more than mere instructions to apply the exception using a
generic computer component.” (Id. at 2–3.) The Examiner also finds that
the claims do not include additional elements to amount to significantly
more than the judicial exception, as the only additional elements are using
generically recited processors. (Id. at 3.) Thus, the Examiner concludes that
the claims are not directed to patent eligible subject matter. (Id.)
Appellant argues that the Examiner’s conclusion is in error because
the “claims offer specific improvements in the field of performing tax
computations and electronic filing” involving virtual currency transactions.
(Appeal Br. 10–11; Reply Br. 6 (noting the claims “alleviate the noted lack
of ‘tools, e.g., applications or services that comprehensively address the
determination of taxes for holdings in virtual currencies such as bitcoins’”).)
According to Appellant, the claims “recit[e] specific limitations which
describe technological advancements of the claimed method that is geared
towards efficiently processing large volumes of virtual currency transactions
originated by virtual currency networks, and specifically identifying and
excluding transactions that represent nontaxable transfers.” (Appeal Br. 11.)
Appellant identifies those steps as the receiving step (step [a]), identifying
matching incoming and outgoing transactions (step [e]), and excluding
certain identified incoming and outgoing transactions as non-taxable
transfers from the set of taxable transactions (step [f]). (Id.)
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Additionally Appellant argues that claim 12’s recitation of accessing a
digital wallet via an API (id. at 12), claim 33’s recitation of determining that
a first wallet address matches a second wallet address (id. at 12), and claim
36’s recitation of receiving authentication information via a GUI which is
used to receive the information the virtual currency network” (id. at 13)
describe further technological advancements geared towards securely and
efficiently processing virtual currency transactions originated by virtual
currency networks.
Appellant also argues that steps [a], [e], and [f] describe operations
“that facilitate efficient exclusion of certain non-taxable transactions from
large data sets” and thus “apply or use the alleged judicial exception in a
meaningful way beyond generally linking the alleged judicial exception to a
particular technological environment.” (Id. at 13–14.)
Appellant asserts that dependent claims 12, 33, and 36 describe an
integration of the alleged judicial exception into a practical application
because an API is recited for accessing user’s accounts (claim 12), a
criterion for transaction exclusion is recited (claim 33), and an authentication
process is recited (claim 36). (Id. at 14–15.)
Appellant then argues that the claim 1 is patent eligible because steps
[d] and [f] describe more than what was well-understood, routine,
conventional activity in the art, and thus represents an inventive concept.
(Id. at 16.) Regarding claims 33 and 36, Appellant argues that the
determining of matching wallet addresses recited in claim 33 and the use of
a GUI in authentication recited in claim 36 are a practical integration,
describe more than what was well-understood, routine, conventional activity
in the art, and thus represents an inventive concept. (Id. at 16.)
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The Analysis
The Supreme Court has established a two-step framework for
“distinguishing patents that claim laws of nature, natural phenomena, and
abstract ideas from those that claim patent-eligible applications of those
concepts.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 217
(2014). “First, we determine whether the claims at issue are directed to” a
patent-ineligible concept. Id. If so, “we 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.” Id. (quoting Mayo Collaborative Servs. v. Prometheus Labs.,
Inc., 566 U.S. 66, 78–79 (2012)).
Applying the 2019 Revised Patent Subject Matter Eligibility Guidance
(“Guidance”), 84 Fed. Reg. 50–57 (Jan. 7, 2019), and in accordance with
judicial precedent, we agree with the Examiner’s conclusion that the claims
are addressed to patent-ineligible subject matter.
A. STEP 2A, Prong One:
Under the Guidance, in determining what concept a claim is “directed
to” in step one of the Supreme Court’s two-step framework, we first look to
whether the claim recites any judicial exceptions, such as (a) mathematical
concepts, (b) methods of organizing human activity including fundamental
economic principles or practices (including hedging, insurance, mitigating
risk), and/or (c) mental processes including an observation, evaluation,
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judgment, or opinion. Guidance, 84 Fed. Reg. at 52, 54 (Step 2A, Prong
One).
Method of Organizing Human Activity
As noted above, a fundamental economic practice is characterized
under the Guidance as a method of organizing human activity. Id.
Determining ones income tax payable on one’s taxable income and filing an
income tax statement reporting one’s taxable income and tax owed thereon
is a fundamental economic practice required of every citizen of the United
States who earns income.
Claim 1 recites a series of steps to determine an estimated income tax
from virtual currency transactions and electronically filing a statement of
that determination. The series of steps of claim 1 for carrying out that
method include (1) the collection and analysis of information related to
virtual currency transactions performed by digital wallets to identify taxable
transactions, i.e., steps [a]–[f], (2) computing taxable income based on the
collection and analysis and computing the estimated income tax owed
thereon, i.e., steps [g] and [h], and (3) filing the statement of estimated
income tax, i.e., step [i].
Every step recited in the method of claim 1, thus, is effected in an
effort to carry out the fundamental economic practice of determining an
estimated income tax owed on virtual currency transactions and filing a
statement thereof. Thus, we agree with the Examiner that the “series of
steps” (Final Action 2) together recite a method of organizing human
activity. And, we disagree with Appellant’s suggestion (Appeal Br. 10), that
the Examiner summarily asserted, without analysis, that Appellant’s claim
recites an abstract idea.
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Moreover, we note regarding the clam limitations [a]-[i], as our
reviewing Court has explained, a process that can be and has been performed
by humans without the use of a computer is an abstract idea. See Mortg.
Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1324 (Fed.
Cir. 2016) (finding that the asserted claims drawn to a computerized loan
application process could all be performed by a human and thus were
abstract). Appellant’s Specification itself implies that the recited steps for
determining estimated income tax owed for virtual currency transactions,
i.e., steps [a]-[i], had been performed to date by hand by tax preparers. In
particular, the Specification indicates that it is US law that US taxpayers
holding virtual currencies must pay taxes on them. (Spec. ¶ 4.) The
Specification also indicates that under US law virtual currencies are to be
treated as “property” for all tax purposes, but gathering the transactions can
be “complex and time consuming,” and the computation of taxes on it can be
“daunting.” (Id.) The Specification does not state that taxes could not be
determined previously, just that “[t]here are no tools, e.g., applications or
services that comprehensively address the determination of taxes for
holdings in virtual currencies such as bitcoins.” (Id.)
Mental Processes
Beyond the foregoing, however, we also find that the specific steps
individually recite a number of mental processes, as the Examiner
recognized in the Answer (Ans. 8–9). A claim recites a mental process
when the claim encompasses acts people can perform using their minds or
pen and paper. See, e.g., CyberSource Corp. v. Retail Decisions, Inc., 654
F.3d 1366, 1372–73 (Fed. Cir. 2011) (determining that a claim whose “steps
can be performed in the human mind, or by a human using a pen and paper”
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is directed to an unpatentable mental process). This is true even if the claim
recites that a generic computer component performs the acts. See, e.g.,
Versata Dev. Grp. v. SAP Am., 793 F.3d 1306, 1335 (Fed. Cir. 2015)
(“Courts have examined claims that required the use of a computer and still
found that the underlying, patent-ineligible invention could be performed via
pen and paper or in a person’s mind.”); see also Guidance, 84 Fed. Reg. at
52 n.14 (“If a claim, under its broadest reasonable interpretation, covers
performance in the mind but for the recitation of generic computer
components, then it is still in the mental processes category unless the claim
cannot practically be performed in the mind.”). Identifying whether a
transaction is incoming or outgoing to create sets of incoming and outgoing
transactions and identifying among those sets which transactions are taxable
to create a set of taxable transactions and identifying matching incoming to
outgoing transactions by identifiers, i.e., steps [b]–[e], are steps that could be
performed in one’s mind with or without the assistance of pen and paper.
Likewise excluding the matched transactions from the set of taxable
transactions, i.e., step [f], also is capable of being performed in one’s mind.
Indeed, Appellant’s Specification supports such a conclusion, though noting
that these steps performed prior to the claimed invention were complex and
time consuming. (Spec. ¶ 4.)
Mathematical Processes
In addition, the claim recites mathematical processes. Namely,
computations of both taxable income (e.g., determination of gains or losses
from the exchange of virtual currencies (see Spec. ¶¶ 23, 25, 29, 35, 51, 52,
69, 77, Figs. 7 and 8)) and an estimated income tax payable (a determination
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made based on the gains and/or losses (id. ¶ 78)), i.e., steps [g] and [h], are
steps that require mathematical calculations.
Consequently, we conclude that claim 1 recites several abstract ideas.
“Adding one abstract idea . . . to another abstract idea . . . does not render the
claim non-abstract.” RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322,
1327 (Fed. Cir. 2017). Having found the foregoing, we proceed to evaluate
claim 1 under Prong Two of the Guidance.

B. STEP 2A, Prong Two:
We next consider whether “the claim as a whole integrates the recited
judicial exception into a practical application of the exception,” i.e., whether
the claim “appl[ies], rel[ies] on, or use[s] the judicial exception in a manner
that imposes a meaningful limit on the judicial exception.” Guidance, 84
Fed. Reg. at 54. This analysis includes “[i]dentifying whether there are any
additional elements recited in the claim beyond the judicial exception(s)”
and “evaluating those additional elements individually and in combination to
determine whether they integrate the exception into a practical application.”
Id. at 54–55.
i. Claim 1
As we noted above, all of the steps form the abstract idea that is a
fundamental economic practice that has in the past been performed by
humans (albeit likely with the aid of computers for calculations). The only
element additional to the abstract ideas is “a computing device” that receives
the transaction information and electronic filing of a statement. The claim
does not require any specific computing device for retrieving information,
nor does it specify any particular device for the electronic filing of a
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statement. Indeed, the Specification indicates simply that a “server” can
perform these functions. (See Spec. ¶ 29 (“[t]he server 105 can obtain the
wallet information . . . and extract the virtual currency transactions . . . [t]he
server 105 analyzes the virtual currency transactions 125 to identify the
taxable transactions, computes the gains and/or losses based on one or more
cost basis methods, and computes the income tax on the gains and/or losses
accordingly”), id. ¶36 (“The server 105 can generate the necessary reports
130, e.g., prepared tax forms, that can be used to file the taxes . . . . In some
embodiments, the server 105 also facilitates electronic filing of the taxes
with [the] concerned department.”).) “[A]fter Alice, there can remain no
doubt: recitation of generic computer limitations does not make an otherwise
ineligible claim patent-eligible.” FairWarning IP, LLC v. Iatric Sys., Inc.,
839 F.3d 1089, 1097 (Fed. Cir. 2016).
Appellant’s argument that claim 1 “recite[s] specific limitations which
describe technological advancements of the claimed method that is geared
towards efficiently processing large volumes of virtual currency transactions
originated by virtual currency networks” (Appeal Br. 11 (emphasis added)) is
unavailing to establish a practical integration. We conclude that the claim does
not recite any “technological advancement.” The claim is neither directed to an
improvement in computer functionality, nor does it provide a specific
improvement in the way computers operate. The focus of claim 1 is on using
generic computer components to receive data, categorize it, and effect
computations using the computer. In other words, the claim does not recite a
technological solution. The problem addressed by the inventors, i.e., the
time consuming nature of gathering transactions regarding virtual currencies
and the complex cost basis tax calculations on virtual currency transactions
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(Spec. ¶ 4), is not one that arises specifically in computer technology.
Appellant does not provide reasoning or evidence, and we do not see from
the claim, how the limitations requiring the use of a generic computer
component provide a technological solution to a computer-based problem.
Instead, the advance is only at the abstract level of computerization. See
Mortg. Grader, 811 F.3d at 1324 (finding that the asserted claims drawn to a
computerized loan application process could all be performed by a human
and thus were abstract).
Nor are we faced with a claim providing a practical application of a
solution addressing a digitally-rooted challenge like the claims in DDR
Holdings, LLC v. Hotels.com, 773 F.3d 1245 (Fed. Cir. 2014). In DDR
Holdings, the Federal Circuit determined that the claims addressed the
problem of retaining website visitors who, if adhering to the routine,
conventional functioning of Internet hyperlink protocol, would be
transported instantly away from a host’s website after clicking on an
advertisement and activating a hyperlink. DDR, 773 F.3d at 1257. The
claimed invention in DDR Holdings provided for the computer network not
to operate in its normal, expected manner; the claimed invention in DDR
generated and directed the visitor to a hybrid page that presented: (1)
product information from the third party, and (2) the visual “look and feel”
elements from the host website. DDR, 773 F.3d at 1258–59. Claim 1 at
issue here is not similarly addressing a problem specifically arising in the
realm of computer networks and solving that technological problem.
Here, the claim is concerned with making it easier to determine one’s
tax liability of virtual currency transactions by using computers. It is clear
that the focus of the claim is on the abstract idea for which computers are
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invoked merely as a tool. Appellant’s claimed additional elements (1) do
not improve the functioning of a computer or other technology; (2) are not
applied with any particular machine; (3) do not effect a transformation of a
particular article to a different state; and (4) are not applied in any
meaningful way beyond generally linking the use of the judicial exception to
a particular technological environment, such that the claim as a whole is
more than a drafting effort designed to monopolize the exception. See
MPEP §§ 2106.05(a)–(c), (e)–(h). Instead, these limitations merely serve to
narrow the recited abstract idea using generic computer components, which
cannot impart patent-eligibility. See Bancorp Servs., L.L.C. v. Sun Life
Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012).
That the claim recites limitations “that facilitate efficient exclusion of
certain non-taxable transactions from large data sets reflecting crypto currency
transactions” (Appeal Br. 14) does not persuade us that the claim as a whole
integrates the recited judicial exception into a practical application of the
exception. Appellant’s solution to the time consuming nature of gathering
transactions regarding virtual currencies and the complex cost basis tax
calculations on virtual currency transactions recited by the claim is to have a
computer receive the information and process it, as noted by the Examiner in
the Answer (Ans. 10). “[M]erely adding computer functionality to increase
the speed or efficiency of the process does not confer patent eligibility on an
otherwise abstract idea.” See Intellectual Ventures I LLC v. Capital One
Bank (USA), 792 F.3d 1363, 1370 (Fed. Cir. 2015); Customedia Techs., LLC
v. Dish Network Corp., 951 F.3d 1359, 1364 (Fed. Cir. 2020) (“‘[C]laiming
the improved speed or efficiency inherent with applying the abstract idea on
a computer’ [is] insufficient to render the claims patent eligible . . . .”
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(citation omitted)); Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1084,
1090 (Fed. Cir. 2019) (“This invention makes the trader faster and more
efficient, not the computer. This is not a technical solution to a technical
problem.”). Indeed, as the Federal Circuit held in University of Florida
Research Foundation, Inc. v. General Electric Co., 916 F.3d 1363 (Fed. Cir.
2019), claims focused just on replacing “pen and paper methodologies” with
“data synthesis technology”—without a focus on specific, assertedly
improved processing techniques—are claims that are directed to an abstract
idea. 916 F.3d at 1367.
Although “software can make patent-eligible improvements to
computer technology, and related claims are eligible as long as they are
directed to non-abstract improvements to the functionality of a computer or
network platform itself,” Uniloc USA, Inc. v. LG Electronics USA, Inc., 957
F.3d 1303, 1309 (Fed. Cir. 2020); see also TecSEC, Inc. v. Adobe Inc., 978
F.3d 1278, 1293 (Fed. Cir. 2020), Appellant’s claimed method does not
appear to even recite particular software to achieve efficient processing of
large volumes of virtual currency transactions or efficient exclusion certain non-
taxable transaction. But, even if it could be concluded that such software
implementations were implicated by certain claim limitations, the claim does not
recite improvements to the functionality of a computer or network platform
itself.
The Federal Circuit has explained that “the ‘directed to’ inquiry
applies a stage-one filter to claims, considered in light of the specification,
based on whether ‘their character as a whole is directed to excluded subject
matter.”’ Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir.
2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d
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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 Enfish, 822 F.3d at 1335–36. Appellant does not point us to any
specific improvement in technology. “Steps that do nothing more than spell
out what it means to ‘apply it on a computer’ cannot confer patent-
eligibility.” Intellectual Ventures, 792 F.3d at 1370.
We do not find persuasive Appellant’s argument that its claim is
similarly situated to those found patent eligible in McRO, Inc. v. Bandai
Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016), because the claim
recites “specific limitations which describe processing large volumes of
virtual currency transactions originated by virtual currency networks, and
specifically describe the rules for identifying transactions that represent non-
taxable transfers” and is thus directed to “specific computer-implemented
improvements over prior art.” (Reply Br. 4–5, 6.) The claimed method in
McRO “allow[ed] computers to produce ‘accurate and realistic lip
synchronization and facial expressions in animated characters’ that
previously could only be produced by human animators,” providing “an
improved technological result in conventional industry practice.” Id. at
1313, 1316. As the court explained in McRO, the recited rules “are limiting
in that they define morph weight sets as a function of the timing of phoneme
sub-sequences.” Id. at 1313. “The claimed process [in McRO] uses a
combined order of specific rules that renders information into a specific
format that is then used and applied to create desired results: a sequence of
synchronized, animated characters.” Id. at 1315 (emphasis added). Thus,
the claims in McRO were found to be directed to a “technological
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improvement over the existing, manual 3-D animation techniques.” Id. at
1316. In Appellant’s claim, there is no similar improvement to a
technological process. Indeed, unlike McRO, the identification steps and
exclusion step recited at a high level of abstraction and calculations that can
be performed in the mind or with pen and paper do not render information in
a specific format to improve technology or a technical process. Cf. SAP
Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1167 (Fed. Cir. 2018)
(explaining that the claims in McRO “avoided being ‘abstract’ in another
sense reflected repeatedly in our cases” because “they had the specificity
required to transform a claim from one claiming only a result to one
claiming a [particular] way of achieving it”).
Appellant’s argument that the claim recites “new techniques for
analyzing [information]” through the step of “identifying, among the set of
incoming transactions, an incoming transaction having a first transaction
identifier matching a second transaction identifier of an outgoing transaction
of the set of outgoing transactions” (Reply Br. 5) thereby rendering the claim
directed to patent eligible subject matter is also unpersuasive. As discussed
above in the Prong One analysis, the identification of related transactions by
matching identifiers, is itself an abstract idea, i.e., a mental concept. Thus, it
is not an additional element recited in the claim beyond the judicial
exception. See, e.g., Two-Way Media Ltd. v. Comcast Cable Commc'ns,
LLC, 874 F.3d 1329, 1337 (Fed. Cir. 2017) (“The claim [before the court]
requires the functional results of ‘converting,’ ‘routing,’ ‘controlling,’
‘monitoring,’ and ‘accumulating records,’ but does not sufficiently describe
how to achieve these results in a non-abstract way.”).
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Moreover, we do not see how this step is a “new technique” for
analyzing transactions of property to determine whether the transaction
involves a non-taxable transfer. Determining tax consequences of
dispositions of property in whole or in part requires that one be able to
identify the property when it comes into and leaves one’s possession. (See,
e.g., Schon 37 (describing following disposition of depreciable assets
between related corporate entities versus non-member entities).) And
techniques for identifying property, such as by its description, are well
known by tax preparers. (Id.)
In sum, we find that the invention recited in claim 1 does not integrate
the abstract idea into a “practical application,” as that phrase is used in the
Guidance. See Guidance, 84 Fed. Reg. at 55.
ii. Dependent claims 12, 33, and 36
Appellant argues that claim 12’s accessing step, namely “accessing,
via an application programming interface (API), a digital wallet of the
plurality of digital wallets” further describes a technological advancement
geared to efficient processing because it “recit[es] an API for accessing
users’ accounts represented by respective digital wallets.” (Appeal Br. 12,
14.) We disagree that this limitation is sufficient to establish the claim is
directed to statutory subject matter. First, the fact that use of an API is
generically recited to access the relevant transaction information does not
change the fact that claim 1 (from which claim 12 depends) recites a host of
other abstract ideas. Second, that data retrieval involves the use of an API is
not an integration of the claimed abstract ideas. It is just a recitation of a
way of accessing the data, using technology, which data is then processed in
performing the tax analysis of virtual currency transactions. Moreover, the
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generic recitation of the technology used, i.e., an API, itself indicates that the
claim step is not a technological improvement to the manner of collecting
the data that is then processed, much less to the manner of identifying
particular data sets and calculating the estimated income tax.
Appellant argues that claim 33’s limitation “recit[es] a criterion for
transaction exclusion based on matching digital wallets” and thus further
describes a technological advance geared toward efficient processing.
(Appeal Br. 12, 14–15.) We disagree that this limitation is sufficient to
establish the claim is directed to statutory subject matter as it is just a
specific way to identify transactions that are non-taxable and are to be
excluded, i.e., limiting the data to be analyzed. Providing data is an extra-
solution activity, as is limiting the data to a particular subset. See In re
Bilski, 545 F.3d 943, 963 (Fed. Cir. 2008) (en banc), aff'd sub nom Bilski v.
Kappos, 561 U.S. 593 (2010) (characterizing data gathering steps as
insignificant extra-solution activity); Intellectual Ventures I LLC v. Erie
Indem. Co., 850 F.3d 1315, 1328–29 (Fed. Cir. 2017) (limiting a database
index to XML tags); In re Rosenberg, 813 F. App’x. 594, 597 (Fed. Cir.
2020) (“As many cases make clear, 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.” (citation omitted)). This step does not demonstrate an
improvement to computers or computer functionality, and does not
otherwise apply, rely on or use the abstract idea of tax analysis of virtual
currency, or the mental processes or mathematical concepts recited in the
claim.
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Appellant argues that claim 36’s reciting an authentication process,
where authentication information is received by a graphical user interface
and is used to receive the information from the virtual currency network,
“describes technological advancements of the claimed method that is geared
towards securely and efficiently processing virtual currency transactions.”
(Appeal Br. 13, 15.) We disagree that this limitation is sufficient to establish
the claim is directed to statutory subject matter for similar reasons as the API
limitation of claim 12 was not sufficient. In particular, like the API, the GUI
is generically recited. Moreover, that data retrieval cannot happen until
authentication information is received, is not an integration of the claimed
abstract ideas. It is just a recitation of a way of accessing the data, using
technology, which data is then processed in performing the tax analysis of
virtual currency transactions. The generic recitation of the technology used,
i.e., a GUI, itself indicates that the claim step is not a technological
improvement to the manner of collecting the data that is then processed,
much less to the manner of identifying particular data sets and calculating
the estimated income tax.
In sum, we find that none of claims 12, 33, or 36 recite additional
limitations that integrate the abstract idea into a “practical application,” as
that phrase is used in the Guidance. See Guidance, 84 Fed. Reg. at 55.
Thus, we conclude that these claims are directed to an abstract idea. We
next turn to the second step of the Alice analysis, i.e., whether the claims
includes an “inventive concept.”

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C. STEP 2B
Step 2B requires that we look to whether the claim, that we have
determined above to set forth the judicial exception of an abstract idea,
“[a]dds a specific limitation [beyond the judicial exception that is] not well-
understood, routine, conventional in the field.” Guidance 84 Fed. Reg. at
56; MPEP § 2106.05(d)).
Appellant argues that the claimed identification step that involves
matching of incoming and outgoing transactions based on identifiers and
excluding matched transactions as representing non-taxable transfers is an
inventive concept. (Appeal Br. 16.) We do not find this argument
persuasive because Appellant does not identify steps that are beyond the
judicial exception. That the claim recites a specific action to match
transactions and to exclude those as non-taxable transfers (Reply Br. 11) is
simply insufficient to render the claim patent-eligible because those steps are
part of the fundamental economic tax analysis, as well as being mental
processes regardless, and thus are part of the abstract idea. “It 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). What is needed to
be sufficient to remove a claim from the class of subject matter ineligible for
patenting at this stage “is an inventive concept in the non-abstract
application realm.” SAP Am., 898 F.3d at 1168.
Furthermore, it is fundamental to tax analysis to determine whether a
transaction is or is not a taxable transfer. Appellant provides no evidence
that matching incoming and outgoing virtual currency transactions to make
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such an assessment is not a conventional activity. Attorney argument is not
evidence. Icon Health & Fitness, Inc. v. Strava, Inc., 849 F.3d 1034, 1043
(Fed. Cir. 2017). And, indeed, Appellant’s Specification would suggest that
such activity was conventional, though time consuming and complex.
(Spec. ¶¶ 4, 52.)
Appellant argues that “[t]here are no tools, e.g., applications or
services that comprehensively address the determination of taxes for
holdings in virtual currencies.” (Appeal Br. 11.) As the Examiner
explained, novelty and eligibility are separate inquiries. Two-Way Media,
874 F.3d at 1340; see also Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838
F.3d 1253, 1263 (Fed. Cir. 2016) (holding that “[e]ven assuming” that a
particular claimed feature was novel does not “avoid the problem of
abstractness”). The 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.” Diamond v. Diehr, 450 U.S. 175, 188–89 (1981).
Appellant argues that claim 33’s recitation of determining that a first
wallet address on an identified incoming transaction matches a second wallet
address of the identified outgoing transaction is more than what is well
understood, routine, conventional activity in the field. (Appeal Br. 16.)
However, we agree with the Examiner, that this is a step that is part of the
abstract idea, the fundamental economic tax analysis of the virtual currency
transactions. As noted above, it is fundamental to tax analysis to determine
whether a transaction is or is not a taxable transfer. Moreover, a virtual
currency transaction requires a digital wallet. Appellant provides no
evidence that matching incoming and outgoing virtual currency transactions
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in a digital wallet to make such an assessment is not a conventional activity.
Attorney argument is not evidence. Icon Health & Fitness, 849 F.3d at
1043.
Regarding claim 36, Appellant argues that the use of a GUI for
authentication purposes before receiving information is not conventional
activity. (Appeal Br. 16.) Again, however, Appellant provides no evidence
in support of that argument. Authenticating users prior to providing
financial information in the computer environment is well-understood and
conventional as evidenced by Sharp as are the use of GUIs. (See, e.g., Sharp
¶¶ 113, 388, 695, 700, Fig. 299.) Consequently, Appellant has not
adequately established error in the Examiner’s rejection.
In light of the foregoing, we are not persuaded that the Examiner erred
in rejecting claims 1–4, 6, 12, 14, 17–21, and 33–40 under 35 U.S.C. § 101.

II. Obviousness
The Examiner finds that Hakim teaches a method that includes steps
[a]–[d] and [g]–[i], where payments are received by a user and sales are
made and capital gains tax owed by disposition of an asset received and
subsequently sold is determined, an estimated income tax on the taxable
income is computed and a statement of estimated income tax is
electronically filed. (Final Action 3–4 (citing Hakim ¶¶ 88–90, 109).) The
Examiner notes that Hakim does not teach steps [e] or [f] and does not teach
the currency for which transaction are received are virtual currency or that
the transactions involve a digital wallet. (Id. at 4.)
The Examiner finds that Schon discloses a method of identifying
intra-group transactions among seller’s and purchaser’s accounts and
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excluding intra-group transfers as representing non-taxable transfers among
the account users, which are steps [e] and [f] of claim 1. (Id.; Ans. 14.)
According to the Examiner, it would have been obvious to one having
ordinary skill in the art to have modified Hakim’s process to exclude
matching transactions of an asset as non-taxable as disclosed by Schon “as is
standard an convention[al] in tax accounting.” (Final Action 4.)
The Examiner finds that Sharp discloses a method where accounts are
digital and currency is virtual currency. (Id. at 5.) The Examiner finds that
“[i]t would have been obvious to one of ordinary skill in the art . . . to have
modified Hakim and Schon to account for virtual currency, as disclosed by
Sharp as virtual currency transactions still need to satisfy the tax
consequences of those virtual currency transactions.” (Id.)
We do not agree with the Examiner’s conclusion that the method of
claim 1 would have been obvious from the teachings of Hakim, Schon, and
Sharp. Hakim concerns software that allows for a recorded accounting
transaction to be broken down into constituent elements of the legal tender
used for the purchase or sale of an item, such that metal coin value can be
separated from its face value. (See, e.g., Hakim ¶¶ 4, 5, 67–68, 86–87.)
Doing this allows for capturing dual treatment aggregate value transactions
and being able to determine whether disposal of an asset can “enjoy
treatment at [a] lower tax rate.” (Id. ¶¶ 88–89.) Although Hakim mentions
that the record keeping can be used to manage the capital gains tax
consequences on the sale of an asset such as a gold coin that was received by
a user (Id. ¶¶ 88–90), Hakim does not address a method of determining a set
of taxable transactions of a user and computing a user’s taxable income,
computing a user’s estimated income tax payable, and electronically filing
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an estimated income tax statement. At best, Hakim provides for an
accounting system in which an incoming asset is monitored in some way,
such as by the description of what the asset is, such that when the asset is
later disposed of, capital gains can be determined by subtracting the cost
basis of the asset from the profit realized from the sale of the asset, rather
than having to report the gain realized from the sale as income. (Id. ¶¶ 88–
90.)
The portion of Schon that the Examiner relies on as teaching matching
incoming and outgoing transactions via an identifier and excluding a
particular transaction as a non-taxable transfer of the asset rather than a
taxable transaction is simply a general teaching of deferring taxation of
profits and losses from an intra-group transaction of a non-depreciable asset.
(Schon 37.) Although we agree with the Examiner that Schon implicitly
requires there be an identifier on the books from which one can discern a
particular type of asset has been transferred within a company’s business
groups (i.e., a non-depreciable asset), we do not see how this teaching adds
to Hakim’s teaching which also necessarily requires that an asset be
identifiable when received so that the sale of it later can be assessed for
purposes of determining whether capital gains treatment can be claimed
versus requiring the gain to be treated as regular income. And although
Schon certainly raises the concept of a non-taxable transfer, we do not see
how one of ordinary skill in the art would be motivated to combine that
teaching concerning the transfer of corporate assets within a corporation
with Hakim’s teachings discussed above concerning monitoring “dual
treatment aggregate value” transactions for purposes of determining its tax
treatment. That is true regardless of the fact, as the Examiner notes, that
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standard conventional tax accounting excludes non-taxable transactions from
the calculation of taxes (Final Action 4).
We also agree with Appellant that Sharp does not cure the foregoing
defects.
A proper § 103 analysis requires “a searching comparison of the
claimed invention—including all its limitations—with the teachings of the
[cited] prior art.” In re Ochiai, 71 F.3d 1565, 1572 (Fed. Cir. 1995). We
conclude on the record before us that the Examiner has not established that
the cited prior art teaches or renders obvious all of the limitations recited in
the method of claim 1. Thus, we do not sustain the Examiner’s rejection of
claims 1–4, 6, 12, 14, 17–21, and 33–40 as being obvious from Hakim,
Schon, and Sharp.
DECISION SUMMARY
Claim(s)
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1–4, 6, 12,
14, 17–21,
33–40
101 Eligibility 1–4, 6, 12,
14, 17–21,
33–40

1–4, 6, 12,
14, 17–21,
33–40
103 Hakim, Schon,
Sharp
1–4, 6, 12,
14, 17–21,
33–40
Overall
Outcome
1–4, 6, 12,
14, 17–21,
33–40

TIME PERIOD FOR RESPONSE
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).
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AFFIRMED