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Patent Trials and Appeals Board

Nov 15, 2019

13796810 - (D) (P.T.A.B. Nov. 15, 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.
13/796,810 03/12/2013 Phillip Flaherty 13-2382 3847
63710 7590 11/15/2019
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
KAZIMI, HANI M
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
11/15/2019 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):
lkorovich@cantor.com
patentdocketing@cantor.com
phowe@cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PHILLIP FLAHERTY
Appeal 2019-000827
Application 13/796,810
Technology Center 3600
Before KARL D. EASTHOM, ADAM J. PYONIN, and AMBER L. HAGY,
Administrative Patent Judges.

EASTHOM, Administrative Patent Judge.

DECISION ON APPEAL

I. STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision rejecting claims 26–35 and 37 in a Final Office Action.
Final Act. 1. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 “Appellant” here includes “applicant” as defined in 37 C.F.R.
§ 1.42(a). Appellant identifies the real party in interest as CFPH, LLC.
Appeal Br. 2.
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II. DISCLOSED AND CLAIMED SUBJECT MATTER
The Specification describes a computer system for “reporting and
reconciling taxable events and liabilities” (Spec. ¶ 1) for people playing
“games of chance, casino games, horse or dog racing, sports betting, slot
machine betting, bingo, card games, roulette, lotto, etc.” (id. ¶ 10). Based on
the player’s winnings (id. ¶¶ 9–10), the system “prepare[s] a tax or
information return or other tax filing,” using “a computer system that
records, transmits, transfers, or organizes data related to such filing”
(id. ¶ 1).
Independent claim 26 reproduced below, illustrates the claimed
subject matter:
26. A method comprising:
receiving, into a memory of a computer gaming system, a
specification of tax treaties among a plurality of horizontally-related
tax jurisdictions of players and gaming operators;
computing, by a processor of the computer gaming
system, that a player has won an amount above a threshold
amount in which the amount won is taxable at two different tax
rates in at least two respective ones of the plurality of
horizontally-related tax jurisdictions;
transmitting, by the processor to a remote device, a
request for the player to provide tax related identification
information, in which the remote device and the processor are in
electronic communication over a network;
transmitting, by the processor, a request for the player’s
electronic signature on at least one tax-related paperwork;
receiving, by the processor, the tax-related identification
information and the player’s electronic signature;
based on the tax-related identification information
received and the specification of tax treaties, computing, by the
processor, a taxable amount owed by the player;
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withholding, by the processor, the taxable amount from
the amount won by the player.

III. OPINION
The Examiner rejects claims 26–35 and 37 for reciting “patent-
ineligible” subject matter. Final Act. 3–5. Appellant presents arguments
directed to no particular claim, but recites claim 26 as exemplary. See
Appeal Br. 2–7. Accordingly, claim 26 represents the claims on appeal.
A patent-eligible invention must claim a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
However, the Supreme Court, in a long line of precedent, interprets 35
U.S.C. § 101 to include implicit exceptions to statutory subject matter:
“[l]aws of nature, natural phenomena, and abstract ideas.” See, e.g., Alice
Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014).
In determining whether a claim falls within an excluded category, the
Court’s two-step framework, described in Mayo and Alice, frames the
analysis. Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012)). The framework first requires
determining what concept the claim is “directed to.” See Alice, 573 U.S. at
219 (“On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4
in petitioners’ application explain the basic concept of hedging, or protecting
against risk.”).
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
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mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 69 (1972)).
If the claim is “directed to” an abstract idea, the second step of the
Alice and Mayo framework requires “examin[ing] the elements of the claim
to determine whether it contains an ‘inventive concept’ sufficient to
‘transform’ the claimed abstract idea into a patent-eligible application.”
Alice, 573 U.S. at 221 (quotation marks omitted). “A claim that recites an
abstract idea must include ‘additional features’ to ensure ‘that the [claim] is
more than a drafting effort designed to monopolize the [abstract idea].’” Id.
(quoting Mayo, 566 U.S. at 77). “[M]erely requir[ing] generic computer
implementation[] fail[s] to transform that abstract idea into a patent-eligible
invention.” Id.
The PTO recently published revised guidance on the application of
§ 101. USPTO’s January 7, 2019, Memorandum, 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (“Guidance”). Under
Step 2A of the Guidance, PTO judges and examiners must determine (1) if
the claims recite any judicial exceptions, i.e., a law of nature, a natural
phenomenon, or an abstract idea (mathematical concepts, certain methods of
organizing human activity such as a fundamental economic practice, or
mental processes) (Prong 1); and (2) if the claims, as a whole, include
additional elements that integrate the judicial exception into a practical
application (see MPEP § 2106.05(a)–(c), (e)–(h)) (Prong 2). Id. at 52–54.
Furthermore, under Prong 1, the Guidance “extracts and synthesizes
key concepts identified by the courts as abstract ideas to explain that the
abstract idea exception includes the following groupings of subject matter,
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when recited as such in a claim limitation(s) (that is, when recited on their
own or per se)”:
(a) Mathematical concepts—mathematical relationships,
mathematical formulas or equations, mathematical calculations;
(b) Certain methods of organizing human activity—
fundamental economic principles or practices (including
hedging, insurance, mitigating risk); commercial or legal
interactions (including agreements in the form of contracts; legal
obligations; advertising, marketing or sales activities or
behaviors; business relations); managing personal behavior or
relationships or interactions between people (including social
activities, teaching, and following rules or instructions); and
(c) Mental processes—concepts performed in the human
mind (including an observation, evaluation, judgment, opinion).
Id. at 52 (footnotes omitted).
Under Step 2B of the Guidance, only if a claim recites a judicial
exception and does not recite additional elements that integrate the judicial
exception into a practical idea, then PTO examiners and judges investigate
whether the claim
[a]dds a specific limitation or combination of limitations
that are not well-understood, routine, conventional activity in the
field, which is indicative that an inventive concept may be
present; or
simply appends well-understood routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception, which is indicative
that an inventive concept may not be present.
Id. at 56 (bullet points omitted).
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Guidance, Step 2A, Prong 1
The Examiner contends the claims recite an abstract idea of “reporting
and reconciling taxable events and liabilities.” Office Action 3.2 The
Examiner explains “[t]he concept of reporting and reconciling taxable events
and liabilities as recited in the claim can be performed by using a ‘processor’
and is similar to the kind of ‘organizing human activity’ at issue in [Alice].”
Id. The Examiner further explains
the abstract idea of reporting and reconciling taxable events and
liabilities is similar to the abstract idea of managing risk
(hedging) during consumer transactions (Bilski), creating a
contractual relationship (buySAFE), managing a game of Bingo
(Planet Bingo) and allowing players to purchase additional
objects during a game (Gametek). Claim 1 therefore is directed
to an abstract idea.
Id. (citing, inter alia, Buysafe, Inc. v. Google, Inc., 765 F.3d 1350, 1355
(Fed. Cir. 2014) (holding as abstract, claims directed to “creating a
contractual relationship—a ‘transaction performance guaranty’”); Planet
Bingo, LLC v. VKGS LLC, 576 F. App’x 1005, 1007–08 (Fed. Cir. 2014)
(determining that methods of managing a game of bingo were directed to
abstract ideas)). The record supports the Examiner’s determination that
claim 26 recites limitations directed to organizing human activity, namely a
fundamental economic practice of reporting and reconciling taxable events
and liabilities based on income generated by gambling. Under the
Guidance, certain methods of organizing human activity, including a

2 The Final Office Action refers to this previous Office Action (mailed June
16, 2017). See Final Act. 5 (“As mentioned in the previous office action
. . . .”).
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fundamental economic practice, represent an abstract idea. See Guidance,
84 Fed. Reg. at 52.
Claim 26 recites several limitations directed to procedures and
computations performed by an accountant and individuals to determine taxes
owed and to satisfy taxing authorities, a fundamental economic practice. For
example, claim 26 recites “receiving . . . a specification of tax treaties among
a plurality of horizontally-related tax jurisdictions of players and gaming
operators,” “computing . . . that a player has won an amount above a
threshold amount in which the amount won is taxable at two different tax
rates in at least two respective ones of the plurality of horizontally-related
tax jurisdictions,” “transmitting . . . a request for the player to provide tax
related identification information,” “transmitting . . . a request for the
player’s . . . signature on at least one tax-related paperwork,” “receiving . . .
the tax-related identification information and the player’s electronic
signature,” “based on the tax-related identification information received and
the specification of tax treaties, computing . . . a taxable amount owed by the
player,” and “withholding . . . the taxable amount from the amount won by
the player.” Accordingly, the Examiner shows that the above steps, and
claim 26 as a whole, recite an abstract idea in the form of a certain method
of organizing human activity, i.e., the fundamental economic practice of
reporting and reconciling taxable events and liabilities based on income
generated by gambling.
In addition to raising the abstract recitation of “‘organizing human
activity,’ at issue in Alice,” Planet Bingo, 576 F. App’x 1008, the
Examiner’s citation to Planet Bingo raises the issue of reciting mental
processes. See id. at 1007–08 (“Claim 7 . . . for example, recites the steps of
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selecting, storing, and retrieving two sets of numbers, assigning a player
identifier and a control number, and then comparing a winning set of bingo
numbers with a selected set of bingo numbers. Like the claims at issue in
Benson, not only can these steps be ‘carried out in existing computers long
in use,’ but they also can be ‘done mentally.”) (quoting Benson, 409 U.S. at
67)).
In other words, similar to the claims in Planet Bingo and Benson,
claim 26 includes steps that reasonably can be performed by a human. For
example, by using accounting evaluation techniques, an accountant or
bookkeeper can perform the following steps recited in claim 26: “receiv[e]
tax treaties,” “comput[e] that a player has won an amount above a threshold
amount in which the amount won is taxable at two different tax rates in at
least two respective ones of the plurality of horizontally-related tax
jurisdictions,” “request . . . the player to provide tax related identification
information,” “request . . . the player’s . . . signature on at least one tax-
related paperwork,” “receiv[e] . . . the tax-related identification information
and the player’s . . . signature,” and “withhold[ ] . . . the taxable amount
from the amount won by the player.” Under the Guidance, “mental
processes—concepts performed in the human mind (including an
observation, evaluation, judgment, opinion)” also constitute an abstract idea.
See Guidance, 84 Fed. Reg. at 52. Accordingly, the Examiner shows that
the above recitations, and the claim as a whole, recite an abstract idea
involving mental processes.
Appellant contends the Examiner “fails to make a prima facie
showing of abstractness.” Appeal Br. 5. According to Appellant, the
Examiner “has failed to identify any similar cases to [the] claims,” and the
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Examiner “cites numerous cases, but none of them relate to the abstract idea
alleged or [the] claims.” Id. As Appellant indicates, the Examiner relies
upon and cites several cases in the noted prior Office Action (supra note 2)
and the Final Action to support the determination that the claims recite an
abstract idea:
Nothing in the claims, understood in light of the
specification, requires anything other than off-the-shelf,
conventional computer, network, and database technology. The
Courts have repeatedly held that such invocations of computers
and networks that are not even arguably inventive are
“insufficient to pass the test of an inventive concept in the
application” of an abstract idea. buySAFE, 765 F.3d at 1353,
1355; see, e.g., Mortg. Grader, Inc. v. First Choice Loan Servs.
Inc., 811 F.3d 1314, 1324–25 (Fed. Cir. 2016); Intellectual
Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1370
(Fed. Cir. 2015); Internet Patents, 790 F.3d at 1348–49; Content
Extraction, 776 F.3d at 1347–48.
Final Act. 10.
Appellant does not address these cases cited by the Examiner as
related to the claims here and fails to show any meaningful difference
between the abstract ideas involved in those cases and here. See Appeal Br.
2–7. Appellant does not dispute with sufficient argument or evidence that
reporting and withholding taxes for income, including for gambling
activities, has long been prevalent as a fundamental economic practice, and
recites steps directed to mental processes. Accordingly, Appellant’s
arguments fail to show error in the Examiner’s determination.
Guidance, Step 2A, Prong 2
In determining whether the claims are “directed to” the identified
abstract idea, the PTO considers whether the claims recite “additional
elements” beyond the abstract idea that integrate the judicial exception into a
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practical application. See Guidance, 84 Fed. Reg. at 54–55.3 The Examiner
contends that “[t]he claims do not include additional elements that are
sufficient to amount to significantly more than the judicial exception
because the additional elements are generic computer components claimed
to perform their basic functions of retrieving and processing data (by the
processor).” Final Act. 5.
The Examiner describes the generic functions of the claimed
processor as follows:
The additional elements include a processor. The
processor carries out the functions of computing that a player has
on an amount above a threshold amount; transmitting a request
for the player to provide tax-related identification information;
transmitting a request for the player’s electronic signature on at
least one tax-related paperwork; receiving the tax-related
identification information and the player’s electronic signature;
computing a taxable amount owed by the player; and
withholding the taxable amount from the amount won by the
player. The processor is a general purpose processor . . . that
performs general purpose functions of receiving data, managing
and processing data and communicating with another system
. . . . The recitation of the claimed limitations amounts to mere
instructions to implement the abstract idea on a computer.
Taking the additional elements individually and in combination,
each step of the process performs purely generic computer
functions. As such, there is no inventive concept sufficient to
transform the claimed subject matter into a patent-eligible
application. The claim does not amount to significantly more
than the abstract idea itself. The claims do not include additional
elements that are sufficient to amount to significantly more than
the judicial exception because the additional elements are simply

3 We acknowledge that some of the considerations at Step 2A, prong two,
properly may be evaluated under Step 2 of Alice (Step 2B of the Guidance).
See 84 Fed. Reg. at 55 n.25, 27–32.

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a generic recitation of a computer processor performing its
generic computer functions. Accordingly, claims are ineligible.
Final Act. 5–6 (citing Specification).
The Examiner also describes the whole claimed process as a “generic
computer process” and contends that using the claimed “memory” and
“processor” “to receive, compute and transmit data in order to report and
reconcile taxable events and liabilities does not make it less abstract.” Final
Act. 6. Appellant does not dispute with evidence or persuasive argument
that claim 26 recites generic computer components arranged in a
functionally generic manner. Appellant argues “there is no evidence of
record that the arrangement of elements is conventional or generic.” Appeal
Br. 7. Appellant also argues that “the Office Action’s reliance on some of
the claim elements possibly being performed using generic computer
components or generic computer functions is not sufficient to raise a prima
facie showing of unpatentability.” Id.
These conclusory arguments do not upset the Examiner’s showing.
As the Examiner determines, in addition to reciting the abstract idea, claim
26 recites highly general data gathering and computing steps by a generic
processor and memory. For example, it recites “receiving, into a memory of
a computer gaming system, a specification of tax treaties among a plurality
of horizontally-related tax jurisdictions of players and gaming operators.”
This receiving step involves generic data gathering steps and storage in a
memory of “tax treaties.” The next-listed step, “computing, by a processor
of the computer gaming system, that a player has won an amount above a
threshold amount in which the amount won is taxable at two different tax
rates in at least two respective ones of the plurality of horizontally-related
tax jurisdictions,” involves a simple general computation step, comparing
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winnings with a threshold combined with the simple idea that different
jurisdictions may tax the winnings at different rates. The next-listed step,
“transmitting, by the processor to a remote device, a request for the player to
provide tax-related identification information, in which the remote device
and the processor are in electronic communication over a network,” involves
a simple and general transmission of a request for “tax-related identification
information.” The next-listed step, “transmitting, by the processor, a request
for the player’s electronic signature on at least one tax-related paperwork,”
involves a simple and general request for more data, a “player’s electronic
signature.” The next-listed step, “receiving, by the processor, the tax-related
identification information and the player’s electronic signature,” involves a
simple and general receiving step for the electronic signature data. The final
two steps, “based on the tax-related identification information received and
the specification of tax treaties, computing, by the processor, a taxable
amount owed by the player,” and “withholding, by the processor, the taxable
amount from the amount won by the player,” involve simple general
computing steps, namely computing a “taxable amount” and “withholding”
the amount. As the Examiner finds, the steps individually and as a whole,
focus on and involve a highly general system for computing and withholding
taxes of players.
The Specification further supports the Examiner’s finding and reveals
a high degree of generality, including “appropriately programmed general
purpose computers” using “processors” receiving instructions “from a
memory or like device”:
Various processes described herein may be implemented
by appropriately programmed general purpose computers,
special purpose computers and computing devices. Typically a
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processor (e.g., one or more microprocessors, one or more
microcontrollers, one or 5 more digital signal processors) will
receive instructions (e.g., from a memory or like device), and
execute those instructions, thereby performing one or more
processes defined by those instructions.
Spec. ¶ 38 (emphases added).
The Specification also states “[a]lgorithms other than those described
may be used.” Id. (emphasis added). This high degree of generality
described in the Specification further shows that claim 26 embraces generic
computer components and functionality, as the Examiner finds.
Appellant also contends BASCOM Global Internet Services Inc. v.
AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016) supports its position.
See Appeal Br. 6–7 (“[T]he Federal Circuit . . . make[s] abundantly clear
that the ability of implementation to occur using generic computer
components and/or using generic computer functionality is not determinative
of whether a claim adds significantly more to an abstract idea.”). Appellant
does not compare claim 26 to the claims involved in BASCOM other than in
a general sense.
BASCOM involved claims generally directed to filtering content. 827
F.3d at 1348. Although the Federal Circuit determined the claims recited
generic computer, network, and Internet components, deemed not inventive
individually, the Federal Circuit found the ordered combination of the
components and other limitations provided the requisite inventive concept.
Id. at 1349–1350 (“[A]n inventive concept can be found in the non-
conventional and non-generic arrangement of known, conventional
pieces.”). There, the patent claimed and explained how a particular
arrangement of elements creates “a technical improvement over prior art
ways of filtering such content.” Id. at 1350 (“According to BASCOM, the
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inventive concept harnesses this technical feature of network technology in a
filtering system by associating individual accounts with their own filtering
scheme and elements while locating the filtering system on an ISP server.”).
Unlike in BASCOM, Appellant does not explain adequately how the
Examiner erred in determining that claim 26 at issue here does not provide a
technical improvement, but rather recites generic processor and memory
involving data gathering and computation steps that an accountant or
bookkeeper could have gathered and created manually.
As the Examiner recognizes as quoted above, claim 26 merely recites
generic computer systems to arrive at, and withhold, a tax amount owed by a
player, without reciting any improvement to computer functionality. See
Final Act. 5–6. At most, claim 26 automates certain processes, including
obtaining electronic signatures and withholding a tax amount owed by a
player.
These automation steps, rooted in the fundamental economic practice
of reporting and reconciling taxable events and liabilities based on income
generated by gambling, do not alter the basic abstract character of claim 26.
See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed Cir. 2014)
(holding that claim ‘‘describ[ing] only the abstract idea of showing an
advertisement before delivering free content’’ is patent ineligible); Credit
Acceptance Corp. v. Westlake Servs., 859 F.3d 1044, 1055 (Fed. Cir. 2017)
(“Our prior cases have made clear that mere automation of manual processes
using generic computers does not constitute a patentable improvement in
computer technology.”). Moreover, “relying on a computer to perform
routine tasks more quickly or more accurately is insufficient to render a
claim patent eligible.” OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359,
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1363 (Fed. Cir. 2015) (citing Alice, 573 U.S. at 224 (“use of a computer to
create electronic records, track multiple transactions, and issue simultaneous
instructions” is not an inventive concept)); Bancorp Servs., L.L.C. v. Sun
Life Assur. Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012) (a
computer “employed only for its most basic function . . . does not impose
meaningful limits on the scope of those claims”).
In addition to reciting a fundamental economic practice using generic
computer components and functionality as a tool as outlined above, under
the Guidance,
[i]f 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. See Intellectual Ventures I LLC v. Symantec Corp., 838
F.3d 1307, 1318 (Fed. Cir. 2016) (“[W]ith the exception of
generic computer implemented steps, there is nothing in the
claims themselves that foreclose them from being performed by
a human, mentally or with pen and paper.”); Mortg. Grader, Inc.
v. First Choice Loan Servs. Inc., 811 F.3d. 1314, 1324 (Fed. Cir.
2016) (holding that computer-implemented method for
“anonymous loan shopping” was an abstract idea because it
could be ‘‘performed by humans without a computer’’); Versata
Dev. Grp. v. SAP Am., Inc., 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.”).
Guidance, 84 Fed. Reg. at 52 & n.4. Setting aside the generic processor and
memory, with generic receiving and transmission steps recited, nothing else
recited in claim 26 prevents the tax calculations and withholding steps from
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being performed in the mind of an accountant with certain other steps
performed manually (e.g., obtaining and receiving signatures).
Accordingly, based on the foregoing discussion, claims 26–35 and 37
recite limitations for, and are directed as a whole to, abstract ideas such
including certain methods of organizing human activity and mental
processes.
Guidance, Step 2B and Alice/Mayo Step 2
Step 2 of the Alice/Mayo framework and Step 2B of the Guidance
require determining whether the claims add an inventive concept beyond the
recited abstract idea. This determination involves investigating whether the
claims (a) add a specific limitation or combination of limitations that are not
well-understood, routine, conventional activity in the field, or (b) simply
append well-understood, routine, conventional activities previously known
to the industry, specified at a high level of generality, to the judicial
exception. See Guidance, 84 Fed. Reg. at 56.
The Examiner finds claim 26 simply appends well-understood,
routine, conventional activities previously known to the industry, specified
at a high level of generality, to the judicial exception, as follows:
The processor is a general purpose processor (see para [0053-
0057] of the specification) that performs general purpose
functions of receiving data, managing and processing data and
communicating with another system that are routine,
conventional and well understood. The recitation of the claimed
limitations amounts to mere instructions to implement the
abstract idea on a computer. Taking the additional elements
individually and in combination, each step of the process
performs purely generic computer functions. As such, there is
no inventive concept sufficient to transform the claimed subject
matter into a patent-eligible application.
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Final Act. 5–6 (emphasis added).4 The Examiner also finds “[u]sing a
memory of a computer gaming system and a processor to receive, compute
and transmit data in order to report and reconcile taxable events and
liabilities does not make it less abstract.” Id. at 6.
The Specification supports the Examiner as indicated in the previous
section. Namely, it reveals a high degree of generality, including
“appropriately programmed general purpose computers” using “processors”
that receive instructions “from a memory or like device.” Spec.
¶ 38. The Specification states “[a]lgorithms other than those described may
be used.” Id. As the Examiner determines, representative claim 26
includes, within its high level of generality, well-understood, routine,
conventional activities previously known to the industry, namely routine
data gathering (transmitting and receiving) steps and routine computing or
comparison steps typically performed by a processor. Final Act. 5–6; Ans.
6–7. Claim 26 merely appends routine, conventional, and well-understood
processor and memory functions to implement the judicial exception, a
fundamental economic practice of reporting and reconciling taxable events
and liabilities based on income generated by gambling. In other words,
claim 26 uses the processor and memory as a tool in a conventional manner
to transmit, receive and process data to implement the judicial exception,
without altering the conventional functionality of the tool. Final Act. 7; Ans.

4 The Examiner’s citation to paragraphs 53–57 of the Specification appears
to represent a citation to the printed publication, U.S. Pub. No.
2014/0279317 A1. The Specification as filed only contains 45 paragraphs
(thirteen pages). Paragraphs 38–42 of the Specification as filed support the
Examiner’s findings.
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7. Accordingly, claim 26 does not add an inventive concept beyond the
recited abstract idea.
Appellant also contends “[t]he claims do not recite some business
practice from the pre-Internet world.” Appeal Br. 7. This argument does
not relate to showing how claim 26 recites “additional elements” beyond the
recited abstract idea.5 As the Federal Circuit explained, patent law does not
protect abstract ideas, “no matter how groundbreaking the advance.” SAP
America, Inc. v. Investpic LLC, 898 F.3d 1161, 1170 (Fed. Cir. 2018); see
also Mayo, 566 U.S. at 90 (holding that a novel and nonobvious claim
directed to an abstract idea does not render the claim patent-ineligible).
What is necessary to impart patent eligibility for a claim that recites an
abstract idea is a specific limitation beyond the judicial exception that is not
well-understood, routine, and conventional. Similar to Appellant’s
arguments here, in Ultramercial, Inc. v. Hulu LLC, 772 F.3d. 709 (Fed. Cir.
2014), the patentee argued that a financial arrangement (a method of using
advertising as an exchange or currency) distinguished from the “routine,”
“long prevalent,” or “conventional” abstract idea in Alice, because it was
“directed to a specific method of advertising and content distribution that
was previously unknown.” Id. at 714. The court rejected the patentee’s

5 Even if somehow Appellant’s argument relates to “additional elements”
beyond the abstract idea, Appellant does not explain sufficiently why claim
26, absent the generic and conventional computer functionality, and drawn
to mental processes and a fundamental economic practice of reporting and
reconciling taxable events and liabilities based on income generated by
gambling, represents a business practice from the post-Internet world.
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position that “abstract ideas remain patent-eligible under § 101 as long as
they are new ideas not previously well known, and not routine activity.” Id.
Appellant also argues “[b]ecause the claims are necessarily rooted in
computer technology to overcome a problem arising in the realm of
computer networks and include a non-conventional and non-generic
arrangement of components that improve the performance of computer
systems, the claims include significantly more than an abstract idea.”
Appeal Br. 7. However, Appellant does not explain how the generic
computer components recited in claim 26 individually and as a whole render
the claimed invention rooted in computer technology. See id. Appellant
does not point to anything in claim 26 that supports its position. See id.
Appellant also fails to point to any problem that claim 26 overcomes, fails to
show how it requires “a non-conventional and non-generic arrangement of
components,” and fails to show “how it improves the performance of
computer systems.” See id.
In FairWarning IP, LLC v. Iatric Systems, Inc., 839 F.3d 1089 (Fed.
Cir. 2016), the patentee argued “its system allowed for the compilation and
combination of . . . disparate information sources and that the patented
method ‘made it possible to generate a full picture of a user’s activity,
identity, frequency of activity, and the like in a computer environment.’”
FairWarning, 839 F.3d at 1096–97. Dismissing the argument, the court
stated
[a]s we have explained, “merely selecting information, by
content or source, for collection, analysis, and [announcement]
does nothing significant to differentiate a process from ordinary
mental processes, whose implicit exclusion from § 101
undergirds the information-based category of abstract ideas.”
Elec. Power, 830 F.3d at 1355. Furthermore, to the extent that
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FairWarning suggests that its claimed invention recites a
technological advance relating to accessing and combining
disparate information sources, its claims do not recite any such
improvement. Rather, the claimed invention is directed to the
broad concept of monitoring audit log data. The claims here do
not propose a solution or overcome a problem “specifically
arising in the realm of computer [technology].” DDR Holdings,
773 F.3d at 1257. At most, the claims require that these
processes be executed on a generic computer. But, “after Alice,
there can remain no doubt: recitation of generic computer
limitations does not make an otherwise ineligible claim patent-
eligible.” Id. at 1256 (citing Alice, 134 S.Ct. at 2358).
Id. at 1097 (citing Elec. Power Group, LLC v. Alstom S.A., 830 F.3d 1350
(Fed. Cir. 2016)); see also Alice, 573 U.S. at 224–26 (receiving, storing,
sending information over networks insufficient to add an inventive concept).
Here, like the “broad concept of monitoring audit log data,” claim 26 is
directed to the broad concept of determining and withholding a taxable
amount based on income, and does not recite significantly more than this
concept.
As set forth above, the additional elements in claim 26 amount to no
more than mere routine instructions in a conventional processor to compute
and withhold a taxable amount using a generic processor and memory.
Claims 27–35 and 37 stand or fall with claim 26 as indicated above.
Accordingly, Appellant does not show that the Examiner erred in rejecting
claims 26–35 and 37 under 35 U.S.C. § 101.
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IV. DECISION SUMMARY
Claims
Rejected
35 U.S.C. § Basis Affirmed Reversed
26–35, 37 101 Patent-ineligible
Subject Matter
26–35, 37
V. 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).
AFFIRMED