ORACLE INTERNATIONAL CORPORATION

Patent Trials and Appeals Board

Mar 31, 2020

14616879 - (D) (P.T.A.B. Mar. 31, 2020)

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.
14/616,879 02/09/2015 Catalin POPESCU ORA150528 (O-351) 8585
51444 7590 03/31/2020
Kraguljac Law Group/Oracle
4700 Rockside Road
Summit One, Suite 510
Independence, OH 44131
EXAMINER
WAESCO, JOSEPH M
ART UNIT PAPER NUMBER
3683
NOTIFICATION DATE DELIVERY MODE
03/31/2020 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):
DDay@KragLaw.com
MPusti@KragLaw.com
PTOMail@KragLaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CATALIN POPESCU, LIN HE, and MING LEI
Appeal 2019-003531
Application 14/616,879
Technology Center 3600
Before ALLEN R. MacDONALD, PHILLIP A. BENNETT, and
IFTIKHAR AHMED, Administrative Patent Judges.
AHMED, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s
decision rejecting claims 1–3, 5, 7–10, and 12–20, which are all of the
claims pending in the application. Claims 4, 6, and 11 have been cancelled.
Appeal Br. 22, 25. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the word “Appellant” to refer to “Applicant” as defined in
37 C.F.R. § 1.42(a). Appellant identifies the real party in interest as Oracle
International Corporation. Appeal Br. 2.
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TECHNOLOGY
The claims relate to forecasting demand and determining the amount
of safety stock in retail businesses. Spec. ¶ 1. Claim 1 is illustrative and
reproduced below:
1. A method implemented by a computing device configured to
execute a computer application, wherein the computer
application is configured to process data in electronic form, the
method comprising:
for a class of retail items that are for sale at one or more
retail locations:
generating, at a class level, a historical error value
representing an uncertainty in a demand for the class of
retail items;
generating, at a retail item level, a scaling value
representing a variability in a demand for at least one retail
item in the class of retail items;
wherein generating the scaling value for the at least one
retail item in the class of retail items comprises:
selecting a demand forecast model for the class of
retail items for predicting a future demand for the class of
retail items;
reading historical demand data from at least one
data structure representing actual sales over a plurality of
past retail periods for the class of retail items at the retail
item level;
performing a backcast operation, using the demand
forecast model, on the historical demand data at the retail
item level to generate backcast data representing estimated
sales of the at least one retail item in the class of retail
items over the plurality of past retail periods; and
generating the scaling value for the at least one retail
item in the class of retail items based at least in part on the
historical demand data and the backcast data;
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generating a forecast error value representing an
uncertainty in the demand for the at least one retail item
by combining at least the scaling value for the at least one
retail item and the historical error value for the class;
generating a safety stock value for the at least one retail
item in the class of retail items based at least in part on the
forecast error value, wherein the safety stock value
represents an amount of the at least one retail item to add
to inventory to account for the variability in the demand of
the at least one retail item; and
controlling an inventory replenishment system to modify
an inventory amount of the at least one retail item based
on at least the safety stock value.
REJECTION
Claims 1–3, 5, 7–10 and 12–20 stand rejected under 35 U.S.C. § 101
for claiming patent-ineligible subject matter. Final Act. 4.
ISSUE
Did the Examiner err in concluding that claim 1 is directed to patent-
ineligible subject matter without significantly more?
ANALYSIS
35 U.S.C. § 101 defines patentable subject matter, but the Supreme
Court has “long held that this provision contains an important implicit
exception” that “[l]aws of nature, natural phenomena, and abstract ideas are
not patentable.” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566
U.S. 66, 70 (2012) (quotation omitted). “Eligibility under 35 U.S.C. § 101 is
a question of law, based on underlying facts.” SAP Am., Inc. v. InvestPic,
LLC, 898 F.3d 1161, 1166 (Fed. Cir. 2018). To determine patentable subject
matter, the Supreme Court has set forth a two part test.
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“First, we determine whether the claims at issue are directed to one of
those patent-ineligible concepts” of “laws of nature, natural phenomena, and
abstract ideas.” Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217 (2014). A
court must be cognizant that “all inventions at some level embody, use,
reflect, rest upon, or apply laws of nature, natural phenomena, or abstract
ideas” (Mayo, 566 U.S. at 71), and “describing the claims at . . . a high level
of abstraction and untethered from the language of the claims all but ensures
that the exceptions to § 101 swallow the rule.” Enfish, LLC v. Microsoft
Corp., 822 F.3d 1327, 1337 (Fed. Cir. 2016). Instead, “we evaluate the
focus of the claimed advance over the prior art to determine if the character
of the claim as a whole, considered in light of the specification, is directed to
excluded subject matter.” Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d
1084, 1092 (Fed. Cir. 2019) (quotation omitted). “The inquiry often is
whether the claims are directed to ‘a specific means or method’ for
improving technology or whether they are simply directed to an abstract
end-result.” RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1326 (Fed.
Cir. 2017).
If the claims are directed to an abstract idea or other ineligible
concept, then we continue to the second step and “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.” Alice, 573 U.S. at 217 (quoting Mayo, 566 U.S.
at 79, 78). The Supreme Court has “described step two of this analysis as a
search for an ‘inventive concept’—i.e., an element or combination of
elements that is sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the ineligible concept itself.” Id. at
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217–18 (quotation omitted). However, “[t]he abstract idea itself cannot
supply the inventive concept, no matter how groundbreaking the advance.”
Trading Techs., 921 F.3d at 1093 (quotation omitted).
In 2019, the U.S. Patent & Trademark Office published revised
guidance on the application of § 101. USPTO, 2019 Revised Patent Subject
Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”);
USPTO, October 2019 Update: Subject Matter Eligibility, available at
https://www.uspto.gov/sites/default/files/documents/peg_oct_2019_update.p
df (“Oct. Update”). Under that guidance, we look to whether the claim
recites
(1) a judicial exception, such as a law of nature or any of the
following groupings of abstract ideas:
(a) mathematical concepts, such as mathematical formulas;
(b) certain methods of organizing human activity, such as a
fundamental economic practice; or
(c) mental processes, such as an observation or evaluation
performed in the human mind;
(2) any additional limitations such that the claim as a whole
integrates the judicial exception into a practical application (see
MPEP § 2106.05(a)–(c), (e)–(h)); and
(3) any additional limitations beyond the judicial exception that,
alone or in combination, were not “well-understood, routine,
conventional” in the field (see MPEP § 2106.05(d)).
See Guidance 52, 55, and 56. Here, there is no dispute with respect to
USPTO Step 1, so we proceed to the remaining steps.
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USPTO Step 2A, Prong One
Prong 1 asks whether the claim recites an abstract idea, such as a
mental process. Here, claim 1 recites controlling an inventory replenishment
system to modify an inventory amount of a retail item based on a safety
stock value. “[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.” Intellectual
Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016).
We agree with the Examiner that, other than the generic “retrieving” and
“storing” steps, which recite generic “computing device,” “computer
application,” and “data structure,” the claimed steps, i.e., the “generating,”
“selecting,” and “performing” steps can be performed mentally. See Ans. 4–
5. For example, the human mind, either alone or with written records, is
fully capable of calculating historical error values, selecting a demand
forecast model, performing backcast operations using the demand forecast
model to generate a scaling value, calculating a forecast error value and a
corresponding safety stock value in the manner recited in claims.
The dependent claims merely specify which information is used for
various calculations (e.g., claims 8) or provide further mental processes
(e.g., claim 2 reciting further steps for “generating the historical error value,”
claim 5 reciting further steps for “generating the scaling value”). But these
do not change that the processes can be performed in the human mind.
As the Federal Circuit has said, “we continue to treat analyzing
information by steps people go through in their minds, or by mathematical
algorithms, without more, as essentially mental processes within the
abstract-idea category.” Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d
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1138, 1146 (Fed. Cir. 2016) (quotation omitted); see also SAP, 898 F.3d at
1167 (“The focus of the claims . . . is on selecting certain information,
analyzing it using mathematical techniques, and reporting or displaying the
results of the analysis. That is all abstract.”). Thus, the claims recite mental
processes, which are abstract ideas.
USPTO Step 2A, Prong Two
Prong 2 asks whether the claim recites any additional limitations that
integrate the judicial exception into a practical application.
Appellant asserts that “[t]he rules specified in claim 1 transform a
traditionally subjective process of inventory replenishment into a
mathematically automated process executed on computers.” Appeal Br. 11
(citing McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed.
Cir. 2016)). According to Appellant,
claim 1 provides a process that uses a combined order of specific
rules (e.g., a rule pertaining to the generation of a historical error
value, a set of rules pertaining to the generation of a scaling
value, a rule pertaining to the generation of a forecast error value)
that render information into a specific format (e.g., a safety stock
value) that is used to account for variability in demand of a retail
item and ensure proper inventory amounts.
Id. Appellant further asserts that
[c]laim 1 is directed to a computer-implemented method that
improves an existing technological process of controlling an
inventory replenishment system in a more accurate manner
(improved process) and modifying an inventory amount of a
retail item based upon a determined safety stock value (using a
novel technique/ improvement for generating a scaling factor and
forecast error value).
Id. at 12–13; Reply Br. 4–5.

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We are not persuaded by Appellant’s argument that the problem or
solution is technological. The Federal Circuit has made clear that “[t]he
abstract idea itself cannot supply the inventive concept, no matter how
groundbreaking the advance.” Trading Techs. Int’l, Inc. v. IBG LLC, 921
F.3d 1084, 1093 (Fed. Cir. 2019) (quotation omitted). As discussed above,
other than reciting generic computer functionality, the steps recited in the
claim can be performed mentally or with a pen and paper. See Ans. 6.
Thus, Appellant cannot rely on the abstract idea as providing the basis to
conclude the abstract idea is integrated into a practical application.
We are also unpersuaded that the claims here are similar to those in
McRO. “The claims in McRO were directed to the creation of something
physical—namely, the display of ‘lip synchronization and facial
expressions’ of animated characters on screens for viewing by human eyes.”
SAP, 898 F.3d at 1167 (explaining that “[t]he claimed improvement [in
McRO] was to how the physical display operated (to produce better quality
images), unlike . . . a claimed improvement in a mathematical technique,”
like the one claimed here). Moreover, the claims in McRO, unlike the
claims here, did not “simply use a computer as a tool to automate
conventional activity,” and there was “no evidence that the process
previously used by animators [was] the same as the process required by the
claims.” McRO, 837 F.3d at 1314–15 (explaining that the claimed process
was different than the one that would be performed by a human). The focus
of the claims here, however, is on forecasting demand and managing
inventory replenishment based on historical data—in many ways, similar to
what has been done traditionally in the retail industry—using the computer
merely as a tool. See Ans. 5.
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Appellant argues that a “computer that more accurately forecasts
inventory levels and safety stock values of an item, and modifies the
inventory amount of the item based on the generated data” “integrate[s] any
alleged judicial exception into a practical application and satisfy Step 2A,
Prong 2.” Reply Br. 5 (emphasis added). However, the claimed process
merely uses conventional computers to automate tasks that would have
otherwise been performed by a human. See OIP Techs., Inc. v. Amazon.com,
Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (“relying on a computer to
perform routine tasks more quickly or more accurately is insufficient to
render a claim patent eligible”).
The Federal Circuit “look[s] to whether the claims in these patents
focus on a specific means or method that improves the relevant technology
or are instead directed to a result or effect that itself is the abstract idea and
merely invoke generic processes and machinery.” McRO, 837 F.3d at 1314
(citations omitted). Here, the computer does not provide a specific means or
method that improves a technology. Instead, the improvement focuses on
the task of inventory management, i.e., “to allow for a more balanced
replenishment of an inventory of a class of retail items.” See Spec. ¶ 43.
For example, claim 1 does not provide any technological way to control an
inventory replenishment system. Instead, the claim recites only an abstract
idea that is “implemented by a computing device” and that modifies an
inventory amount based on the mathematical determination of a safety stock
value. As the Supreme Court has held, “the mere recitation of a generic
computer cannot transform a patent-ineligible abstract idea into a patent-
eligible invention.” Alice, 573 U.S. at 223.
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Thus, we are not persuaded that any additional limitation, alone or in
combination, reflects an improvement in the functioning of a computer or
other technology. Therefore, claim 1 does not integrate the abstract idea into
a practical application.
USPTO Step 2B
The additional limitations in claim 1 such as a “computer” and “data
structure” were well-understood, routine, and conventional. The
Specification explains that the computer can be any generic computer. E.g.,
Spec. ¶¶ 83 (the invention may be implemented on “a processor, a computer,
a server operating in a cloud computing system, a server configured in a
Software as a Service (SaaS) architecture, a smart phone, and so on”), 84
(“the disclosed methods or their equivalents are performed by either:
computer hardware configured to perform the method; or computer
software”). Likewise, the Specification explains that the data structure can
be any “organization of data in a computing system.” Id. ¶ 105 (“A data
structure may be any one of, for example, a data field, a data file, a data
array, a data record, a database, a data table, a graph, a tree, a linked list, and
so on.”). The “controlling” step, i.e., the only step other than the claimed
mental process, is directed at modifying a single inventory value and “does
not particular[ly] control a system itself.” Ans. 5.
Appellant argues that the Examiner’s analysis fails to comply with
USPTO guidelines. Appeal Br. 14–16 (citing USPTO, Memorandum on
Changes in Examination Procedure Pertaining to Subject Matter Eligibility,
Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.) (Apr.
19, 2018)); Reply Br. 7; see also Berkheimer v. HP Inc., 881 F.3d 1360
(Fed. Cir. 2018). Appellant asserts that “no evidence has been provided by
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the Examiner to support the conclusion that any claim element, let alone the
combined elements, are well-understood, routine, and conventional.”
Appeal Br. 15. In support, Appellant points only to the abstract method
steps of claim 1 to argue that “[t]he ordered combination of elements in
claim 1 as a whole recite steps that are not ‘well-understood, routine, and
conventional.’” Id. at 14. However, this misunderstands Step 2B. The
“well-understood, routine, conventional” portion of the test applies only to
additional limitations beyond the abstract idea. See e.g., Mayo, 566 U.S. at
79–80 (“any additional steps consist of well-understood, routine,
conventional activity already engaged in by the scientific community; and
those steps, when viewed as a whole, add nothing significant beyond the
sum of their parts taken separately” (emphasis added)). As noted above,
“[t]he abstract idea itself cannot supply the inventive concept, no matter how
groundbreaking the advance.” Trading Techs., 921 F.3d at 1093 (quotation
omitted).
In sum, whether the additional limitations are considered individually
or in ordered combination, claim 1 fails to recite an inventive concept
beyond the abstract idea.
Accordingly, we sustain the rejection under § 101 of claim 1, and
claims 2–3, 5, 7–10, and 12–20, which Appellant argues are patentable for
similar reasons. See Appeal Br. 18; 37 C.F.R. § 41.37(c)(1)(iv).
DECISION
For the reasons above, we affirm the Examiner’s decision rejecting
claims 1–3, 5, 7–10, and 12–20 under § 101.
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Claims
Rejected Statute Basis Affirmed Reversed
1–3, 5, 7–10
12–20
§ 101 Eligibility 1–3, 5, 7–10
12–20

TIME TO RESPOND
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.
§ 1.36(a)(1)(iv).
AFFIRMED