Mark Aspenson

Patent Trials and Appeals Board

Mar 8, 2021

2020006563 (P.T.A.B. Mar. 8, 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.
16/380,237 04/10/2019 Mark A. Aspenson P07759US2 2960
34082 7590 03/08/2021
ZARLEY LAW FIRM P.L.C.
CAPITAL SQUARE
400 LOCUST, SUITE 200
DES MOINES, IA 50309-2350
EXAMINER
SUTCH JR., NORMAN DONALD
ART UNIT PAPER NUMBER
3684
NOTIFICATION DATE DELIVERY MODE
03/08/2021 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):
crasmussen@zarleylaw.com
emarty@zarleylaw.com
kconrad@zarleylaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte MARK A. ASPENSON
____________

Appeal 2020-006563
Application 16/380,237
Technology Center 3600
____________

Before JOSEPH A. FISCHETTI, JAMES P. CALVE, and
NINA L. MEDLOCK, Administrative Patent Judges.

MEDLOCK, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s
final rejection of claims 1–7. 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. Our decision references Appellant’s Appeal Brief (“Appeal Br.,”
filed May 20, 2020) and Reply Brief (“Reply Br.,” filed September 21,
2020), and the Examiner’s Answer (“Ans.,” mailed July 20, 2020) and Final
Office Action (“Final Act.,” mailed November 22, 2019). Appellant does
not identify the real party in interest; therefore, we assume that the inventor,
Mark A. Aspenson, is the real party in interest (see 37 C.F.R.
§ 41.37 (c)(1)(i)).
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CLAIMED INVENTION
The Specification states, “[t]his invention is directed to a system for
selling and distributing products and services and more particularly to a
system that provides incentives to make sales and efficiencies in distributing
product” (Spec. 1:10–12).
Claim 1, reproduced below with bracketed notations added, is the sole
independent claim and representative of the subject matter on appeal:
1. A distribution and sales system, comprising:
[(a)] a master entity that owns rights to various products
and services and that has a controller with a processor connected
to an electronic network;
[(b)] a plurality of management tiers having different
management responsibilities, territories, and ownership rights;
[(c)] wherein ownership fees are paid by the
plurality of management tiers and received by the master
entity based upon the different responsibilities, territories,
and ownership rights and the processor calculates roll back
fees from the master entity and the master entity
distributes the roll back fees to the plurality of
management tiers based upon the different management
responsibilities, territories and ownership rights;
[(d)] a lowest management tier has a facility to
distribute products and services to purchasing customers;
[(e)] purchase/service orders are made through a
remote computer connected to the processor of the master
entity and the master entity processor determines whether
an order is large, small, exclusive, non-exclusive and
selects a distribution means based upon the determination;
[(f)] where the processor of the master entity
sends instructions to a manufacturer to deliver an ordered
product to the lowest management tier closest to a location
of a purchasing customer.
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REJECTION
Claims 1–7 are rejected under 35 U.S.C. § 101 as directed to a judicial
exception without significantly more.
ANALYSIS
Appellant argues claims 1–7 as a group (Appeal Br. 3–6). We select
independent claim 1 as representative. The remaining claims stand or fall
with claim 1. See 37 C.F.R. § 41.37(c)(1)(iv).
Under 35 U.S.C. § 101, “[w]hoever invents or discovers any new and
useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof, may obtain a patent therefor.” 35 U.S.C.
§ 101. The Supreme Court, however, has long interpreted § 101 to include
an implicit exception: “[l]aws of nature, natural phenomena, and abstract
ideas” are not patentable. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216
(2014).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66 (2012), “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., 573 U.S. at 217.
The first step in that analysis is to “determine whether the claims at issue are
directed to one of those patent-ineligible concepts.” Id. If the claims are not
directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry
ends. Otherwise, the inquiry proceeds to the second step where the elements
of the claims are considered “individually and ‘as an ordered combination’”
to determine whether there are additional elements that “‘transform the
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nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo,
566 U.S. at 79, 78). This is “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.’” Id. at 217–18 (alteration in original).
The U.S. Patent and Trademark Office (the “USPTO”) published
revised guidance on January 7, 2019, for use by USPTO personnel in
evaluating subject matter eligibility under 35 U.S.C. § 101. 2019 REVISED
PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50 (Jan. 7,
2019) (the “2019 Revised Guidance”).2 That guidance revised the USPTO’s
examination procedure with respect to the first step of the Mayo/Alice
framework by (1) “[p]roviding groupings of subject matter that [are]
considered an abstract idea”; and (2) clarifying that a claim is not “directed
to” a judicial exception if the judicial exception is integrated into a practical
application of that exception. Id. at 50.
The first step, as set forth in the 2019 Revised Guidance (i.e.,
Step 2A), is, thus, a two-prong test. In Step 2A, Prong One, we look to
whether the claim recites a judicial exception, e.g., one of the following
three groupings of abstract ideas: (1) mathematical concepts; (2) certain
methods of organizing human activity, e.g., fundamental economic
principles or practices, commercial or legal interactions; and (3) mental
processes. 2019 Revised Guidance, 84 Fed. Reg. at 54. If so, we next
determine, in Step 2A, Prong Two, whether the claim as a whole integrates

2 The MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) incorporates
the revised guidance and subsequent updates at Section 2106 (9th ed.
Rev. 10.2019, rev. June 2020).
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the recited judicial exception into a practical application, i.e., whether the
additional elements recited in the claim beyond the judicial exception, apply,
rely on, or use the judicial exception in a manner that imposes a meaningful
limit on the judicial exception, such that the claim is more than a drafting
effort designed to monopolize the judicial exception. Id. at 54–55. Only if
the claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application do we conclude that the claim is
“directed to” the judicial exception, e.g., an abstract idea. Id.
If the claim is determined to be directed to a judicial exception under
revised Step 2A, we next evaluate the additional elements, individually and
in combination, in Step 2B, to determine whether they provide an inventive
concept, i.e., whether the additional elements or combination of elements
amounts to significantly more than the judicial exception itself; only then, is
the claim patent eligible. 2019 Revised Guidance, 84 Fed. Reg. at 56.
Here, in rejecting the pending claims under 35 U.S.C. § 101, the
Examiner determined that the claims recite
a system where a master entity . . . owns rights to various
products and services; a plurality of management tiers have
various characteristics; wherein ownership fees are paid by the
plurality of management tiers and received by the master entity
based upon the various characteristics and roll back fees from the
master entity are calculated and distributed to the plurality of
management tiers based upon the various characteristics; a
lowest management tier has a facility to distribute products and
services to purchasing customers; purchase/service orders are
made and the master entity determines a distribution means
based on the size of the order; the master entity sends instructions
to a manufacturer to deliver an ordered product to the lowest
management tier closest to a location of a purchasing customer[,]
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i.e., commercial or legal interactions, which are a “certain method of
organizing human activity” and, therefore, an abstract idea (Final Act. 6
(further observing that the claims are analogous to those in In re Ferguson,
558 F.3d 1359 (Fed. Cir. 2009), where “the court ruled that structuring a
distribution and sales company is an abstract idea”)), and that the recited
abstract idea is not integrated into a practical application (id. at 6–7). The
Examiner also determined that the claims do not include additional elements
sufficient to amount to significantly more than the abstract idea itself (id.
at 7).
Step One of the Mayo/Alice Framework (2019 Revised Guidance, Step 2A)
We are not persuaded by Appellant’s argument that the Examiner
erred in determining that claim 1 is directed to an abstract idea (Appeal
Br. 3–4). 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
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. Here, it is clear from the Specification (including
the claim language) that claim 1 focuses on an abstract idea, and not on an
improvement to technology and/or a technical field.
The Specification is titled “DISTRIBUTION AND SALES SYSTEM
FOR PRODUCTS AND SERVICES,” and describes, in the Background
section, that “[p]resently, most systems create a competitive environment
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where sales individuals in the same organization compete against one
another and are not rewarded financially for assisting other sales
representatives. As a result, there is little incentive to assist others”
(Spec. 1:13–16). The Specification describes that the distribution of
products from the manufacturer to a customer also is often inefficient in that
product is either shipped in less than full loads or a full load is directed to
multiple delivery locations; the process additionally goes through multiple
brokers, distributors, and sales personnel (id. at 1:17–19).
The claimed invention is ostensibly intended to address these
shortcomings by providing a system where all members benefit from the sale
of a product or service, and where products are delivered more efficiently
(Spec. 1:21–24). Claim 1, thus, recites a distribution and sales system
comprising: (1) a master entity that owns the rights to various products and
services, i.e., “a master entity that owns rights to various products and
services and that has a controller with a processor connected to an electronic
network” (limitation (a)); and (2) “a plurality of management tiers having
different management responsibilities, territories, and ownership rights”
(limitation (b)), “[the] lowest management tier [having] a facility to
distribute products and services to purchasing customers” (limitation (d)).
Claim 1 further recites that: (1) the management tiers pay ownership
fees to the master entity and the master entity, in return, distributes roll back
fees to the management tiers based on their respective management
responsibilities, territories and ownership rights, i.e.,
wherein ownership fees are paid by the plurality of
management tiers and received by the master entity based upon
the different responsibilities, territories, and ownership rights
and the processor calculates roll back fees from the master entity
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and the master entity distributes the roll back fees to the plurality
of management tiers based upon the different management
responsibilities, territories and ownership rights
(limitation (c)); and (2) the master entity receives purchase/service orders;
selects a distribution means depending on whether an order is large, small,
exclusive or non-exclusive; and instructs the manufacturer to deliver the
ordered product to the lowest management tier that is closest to the
purchasing customer’s location, i.e.,
purchase/service orders are made through a remote
computer connected to the processor of the master entity and the
master entity processor determines whether an order is large,
small, exclusive, non-exclusive and selects a distribution means
based upon the determination;
where the processor of the master entity sends instructions
to a manufacturer to deliver an ordered product to the lowest
management tier closest to a location of a purchasing customer
(limitations (e) and (f)). We agree with the Examiner that these limitations,
when given their broadest reasonable interpretation, recite marketing or sales
activities or behaviors, e.g., fee-splitting arrangements between business
entities, and are similar to structuring a distribution and sales company,
which the court in In re Ferguson held is patent ineligible (Final Act. 6).
Appellant argues that, in determining that claim 1 recites an abstract
idea, the Examiner ignored “essential limitations of the claimed subject
matter,” including “the necessary presence of a controller with a processor
connected to an electronic network” and the required presence of a remote
computer connected to the processor (Appeal Br. 3). Appellant maintains
that “[t]he presence of these physical, non-human elements and their
required configurations clearly move[s] the claimed subject matter into the
realm of eligibility as the claimed subject matter goes well beyond
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organizing human activity” (id.). Yet, the fact that a computer may be
required is an insufficient basis to persuasively argue that claim 1 is not
directed to an abstract idea. Indeed, a substantially similar argument was
expressly rejected by the Court in Alice. Thus, although the claimed
invention in Alice involved a computer system acting as a third-party
intermediary between two parties, Alice Corp., 573 U.S. at 224, the Court
held that “the claims at issue amount to ‘nothing significantly more’ than an
instruction to apply the abstract idea of intermediated settlement using some
unspecified, generic computer.” Id. at 225–26. See also FairWarning IP,
LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1098 (Fed. Cir. 2016) (“the inability
for the human mind to perform each claim step does not alone confer
patentability. As we have explained, ‘the fact that the required calculations
could be performed more efficiently via a computer does not materially alter
the patent eligibility of the claimed subject matter.’” (citation omitted));
In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016)
(“[N]ot every claim that recites concrete, tangible components escapes the
reach of the abstract-idea inquiry.”).
Appellant’s further argument, i.e., that the Examiner’s position is
contradictory, is similarly unavailing (Appeal Br. 3). Appellant ostensibly
maintains that the Examiner’s determination that claim 1 is directed to a
machine, i.e., that the claimed subject matter falls within one of the four
categories of patentable subject matter, is contrary to the Examiner’s
determination that claim 1 recites an abstract idea, i.e., a method of
organizing human activity. Yet, as described above, although 35 U.S.C.
§ 101 provides that “[w]hoever invents or discovers any new and useful
process, machine, manufacture, or composition of matter, or any new and
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useful improvement thereof, may obtain a patent therefor,” the Supreme
Court has interpreted § 101 to include an implicit exception: “[l]aws of
nature, natural phenomena, and abstract ideas” are not patentable. Alice
Corp., 573 U.S. at 216. Thus, although a claim may be directed, for
example, to a machine, i.e., one of the categories of patentable subject
matter, the claim is nonetheless excluded from patent eligibility if the
claimed subject matter is an abstract idea. We find no contradiction in the
Examiner’s determination here that claim 1, although directed to a machine,
recites marketing or sales activities or behaviors, i.e., one of “certain
methods of organizing human activity” and, therefore, an abstract idea. See
2019 Revised Guidance, 84 Fed. Reg. at 52.
We also are not persuaded of Examiner error by Appellant’s argument
that claim 1 includes additional elements that integrate the recited abstract
idea into a practical application (Appeal Br. 3–4).
The 2019 Revised Guidance references MPEP, Ninth Edition
(rev. Jan 2018) (available at https://www.uspto.gov/web/offices/
pac/mpep/old/mpep_E9R08-2017.htm) § 2106.05(a)–(c) and (e) in
non-exhaustively listing considerations indicative that an additional element
or combination of elements may have integrated a recited judicial exception
into a practical application. 2019 Revised Guidance, 84 Fed. Reg. at 55. In
particular, the Guidance describes that an additional element may have
integrated the judicial exception into a practical application if the additional
element (1) reflects an improvement in the functioning of a computer or an
improvement to other technology or technical field; (2) applies or uses the
judicial exception to effect a particular treatment or prophylaxis for a disease
or medical condition; (3) implements the judicial exception with, or uses the
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judicial exception with, a particular machine or manufacture integral to the
claim; (4) effects a transformation or reduction of an article to a different
state or thing; or (5) applies or uses the judicial exception in some other
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. Id. At the
same time, the Guidance makes clear that merely including instructions to
implement an abstract idea on a computer, or merely using a computer as a
tool to perform an abstract idea; adding insignificant extra-solution activity
to the judicial exception; or only generally linking the use of the judicial
exception to a particular technological environment or field are not sufficient
to integrate the judicial exception into a practical application. Id.
Appellant argues here that the claimed subject matter includes
elements and combinations of elements that impose meaningful limitations,
such that the claimed subject matter is more than a drafting effort designed
to monopolize the exception (Appeal Br. 4). Yet, Appellant misapprehends
the controlling precedent to the extent Appellant maintains that claim 1 is
patent eligible because there is no risk of preemption. Although the
Supreme Court has described “the concern that drives [the exclusion of
abstract ideas from patent-eligible subject matter] as one of pre-emption,”
Alice Corp., 573 U.S. at 216, characterizing preemption as a driving concern
for patent eligibility is not the same as characterizing preemption as the sole
test for patent eligibility. “The Supreme Court has made clear that the
principle of preemption is the basis for the judicial exceptions to
patentability” and “[f]or this reason, questions on preemption are inherent in
and resolved by the § 101 analysis.” Ariosa Diagnostics, Inc. v. Sequenom,
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Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (citing Alice Corp., 573 U.S.
at 216). “[P]reemption may signal patent ineligible subject matter, [but] the
absence of complete preemption does not demonstrate patent eligibility.” Id.
We also are not persuaded to the extent Appellant maintains that
claim 1 is patent eligible because the abstract idea is implemented with, or
uses a particular machine or manufacture, i.e., “a controller with a
processor” and “a remote computer” (Appeal Br. 4). The Federal Circuit has
recognized that the machine-or-transformation test,3 although not the only
test, “can provide a ‘useful clue’” to patent eligibility under the Mayo/Alice
framework. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir.
2014) (quoting Bilski, 561 U.S. at 594). As such, satisfying either prong of
that test may integrate an abstract idea into a practical application. See 2019
Revised Guidance, 84 Fed. Reg. at 55 nn.27–28 (citing MPEP § 2106.05(b),
(c)).
At the same time, however, it is well settled that “whether a [recited]
device is ‘a tangible system (in § 101 terms, a ‘machine’)’ is not
dispositive.” ChargePoint, Inc. v. SemaConnect, Inc., 920 F.3d 759, 770
(Fed. Cir. 2019) (quoting Alice Corp., 573 U.S. at 224). For a machine to
impose a meaningful limit on the claimed invention, it must play a
significant part in permitting a claimed method to be performed, rather than
merely providing the generic environment in which to implement the recited
abstract idea. Cf. Versata Dev. Grp. v. SAP Am., Inc., 793 F.3d 1306, 1335

3 Under the machine-or-transformation test, a claimed process is patent
eligible if: (1) it is tied to a particular machine or apparatus, or (2) it
transforms a particular article into a different state or thing. In re Bilski,
545 F.3d 943, 954 (Fed. Cir. 2008), aff’d sub nom. Bilski v. Kappos,
561 U.S. 593 (2010).
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(Fed. Cir. 2015) (explaining that in order for a machine to add significantly
more, it must “play a significant part in permitting the claimed method to be
performed, rather than function solely as an obvious mechanism for
permitting a solution to be achieved more quickly”); see also MPEP
§ 2106.05(b)(II) (citing Versata).
Here, the controller, processor, and remote computer perform the
latter role. As the Examiner observes, these elements are recited at a high
level of generality ((Final Act. 6–7); they also are similarly described in the
Specification (see, e.g., Spec. 2:13–14, 3:21–24). Rather than being tied to a
particular machine, claim 1 merely implements an abstract idea using
generic computer components, which is not enough for patent eligibility.
See Alice Corp., 573 U.S. at 223 (“[T]he mere recitation of a generic
computer cannot transform a patent-ineligible abstract idea into a patent-
eligible invention.”); BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility
LLC, 827 F.3d 1341, 1348 (Fed. Cir. 2016) (“An abstract idea on ‘an
Internet computer network’ or on a generic computer is still an abstract
idea”) (citation omitted).
We also note that although Appellant asserts, “at a minimum, the
claimed subject matter amounts to a narrow and practical application of
structuring a distribution and sales company” (Appeal Br. 4), the relevant
question under Step 2A, Prong 2 is not whether the claimed invention itself,
i.e., structuring a distribution and sales company, is a practical application;
instead, the question is whether the claim includes additional elements
beyond the judicial exception that integrate the judicial exception into a
practical application. Here, the only additional elements recited in claim 1
beyond the abstract idea are “a controller with a processor connected to an
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electronic network”; and “a remote computer connected to the processor,”
i.e., generic computer components.
We conclude, for the reasons outlined above, that claim 1 recites a
method of organizing human activity, i.e., an abstract idea, and that the
additional elements recited in the claim beyond the abstract idea are no more
than generic computer components used as tools to perform the recited
abstract idea. As such, they do not integrate the abstract idea into a practical
application. See Alice Corp., 573 U.S. at 223–24 (“[W]holly 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.’” (quoting Mayo,
566 U.S. at 77)). Accordingly, we agree with the Examiner that claim 1 is
directed to an abstract idea.
Step Two of the Mayo/Alice Framework (2019 Revised Guidance, Step 2B)
Having determined under step one of the Mayo/Alice framework that
claim 1 is directed to an abstract idea, we next consider under Step 2B of the
2019 Revised Guidance, the second step of the Mayo/Alice framework,
whether claim 1 includes additional elements or a combination of elements
that provides an “inventive concept,” i.e., whether an additional element or
combination of elements adds specific limitations beyond the judicial
exception that are not “well-understood, routine, conventional activity” in
the field (which is indicative that an inventive concept is present) or simply
appends well-understood, routine, conventional activities previously known
to the industry to the judicial exception. 2019 Revised Guidance,
84 Fed. Reg. at 56.
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The Examiner determined here, and we agree, that the only additional
elements recited in claim 1, beyond the abstract idea, are “a controller with a
processor” and “a remote computer,” i.e., generic computer components
(Final Act. 6–7) — a determination amply supported by, and fully consistent
with the Specification (see, e.g., Spec. 2:13–14, 3:21–24). Appellant cannot
reasonably maintain that there is insufficient factual support for the
Examiner’s determination that these components are well-understood,
routine, or conventional, where, as here, there is nothing in the Specification
to indicate that the operations recited in claim 1 require any specialized
hardware or inventive computer components or that the claimed invention is
implemented using other than a generic computer component to perform
generic computer functions, e.g., receiving, processing, and transmitting
information. Indeed, the Federal Circuit, in accordance with Alice, has
“repeatedly recognized the absence of a genuine dispute as to eligibility”
where claims have been defended as involving an inventive concept based
“merely on the idea of using existing computers or the Internet to carry out
conventional processes, with no alteration of computer functionality.”
Berkheimer v. HP Inc., 890 F.3d 1369, 1373 (Fed. Cir. 2018) (Moore, J.,
concurring) (internal citations omitted); see also BSG Tech LLC v.
BuySeasons, Inc., 899 F.3d 1281, 1291 (Fed. Cir. 2018) (“BSG Tech does
not argue that other, non-abstract features of the claimed inventions, alone or
in combination, are not well-understood, routine and conventional database
structures and activities. Accordingly, the district court did not err in
determining that the asserted claims lack an inventive concept.”).
Appellant ostensibly maintains here that claim 1 provides an inventive
concept because the claimed distribution and sales system provides an
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improvement to a technological process (Appeal Br. 5–6). Citing page one
of the Specification, Appellant asserts that it has identified a number of
technological problems (i.e., the insubstantial incentive to assist others
where sales individuals compete against one another in the same
organization and are not rewarded financially for assisting other sales
representatives; and the distribution problem that exists where products to a
customer are shipped inefficiently in less than a full load or a full load is
directed to multiple delivery locations), and that these problems “have a
technological solution and are solved by the claimed distribution and sales
system” (id. at 5).
Appellant observes that the claimed system, as recited in claim 1,
requires a plurality of management tiers having different management
responsibilities, territories, and ownership rights and that “a processor
calculates roll back fees from ownership fees paid based upon the different
management responsibilities, territories and ownership rights (i.e., rules)”
(Appeal Br. 5). Appellant argues that these rules solve “the technical
problem where sales individuals who compete against one another in the
same organization are financially rewarded for assisting other sales
representatives and an incentive to assist others is provided” and that the
system, in requiring that the processor of the master entity send instructions
to a manufacturer to deliver an ordered product to the lowest management
tier closest to a location of a purchasing customer, “provides a technological
solution to the distribution problem where products to a customer are often
shipped inefficiently either in less than full loads or a full load is directed to
multiple delivery locations” (id. at 5–6).
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Appellant maintains that the claimed invention, thus, provides a
technological improvement. But, we are not persuaded that providing an
incentive for sales representatives to assist other sales representatives or that
instructing a manufacturer to ship products to the distribution facility closest
to a customer’s location is a technological improvement as opposed to an
improvement to the abstract idea of structuring a sales and distribution
operation, which is not enough for patent eligibility. See SAP Am., Inc. v.
InvestPic, LLC, 898 F.3d 1161, 1170 (Fed. Cir. 2018) (“[P]atent law does
not protect such claims[, i.e., claims to an asserted advance in the realm of
abstract ideas], without more, no matter how groundbreaking the advance.”).
We are not persuaded, on the present record, that the Examiner erred
in rejecting independent claim 1 under 35 U.S.C. § 101. Therefore, we
sustain the Examiner’s rejection of claim 1, and claims 2–7, which fall with
claim 1.
CONCLUSION
In summary:
Claim(s)
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