Richard O. Michaud et al.Download PDFPatent Trials and Appeals BoardAug 20, 201913234575 - (D) (P.T.A.B. Aug. 20, 2019) Copy Citation 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. 13/234,575 09/16/2011 Richard O. Michaud 2165/109 2479 2101 7590 08/20/2019 Sunstein Kann Murphy & Timbers LLP 125 SUMMER STREET BOSTON, MA 02110-1618 EXAMINER OYEBISI, OJO O ART UNIT PAPER NUMBER 3697 NOTIFICATION DATE DELIVERY MODE 08/20/2019 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): usptomail@sunsteinlaw.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte RICHARD O. MICHAUD, ROBERT MICHAUD, and DAVID N. ESCH ____________ Appeal 2017-010033 Application 13/234,575 Technology Center 3600 ____________ Before MURRIEL E. CRAWFORD, BIBHU R. MOHANTY, and BRUCE T. WIEDER, Administrative Patent Judges. CRAWFORD, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Appellants seek our review under 35 U.S.C. § 134 from the Examiner’s final rejection of claims 1–16. We have jurisdiction under 35 U.S.C. § 6(b). SUMMARY OF DECISION We AFFIRM. Appeal 2017-010033 Application 13/234,575 2 THE INVENTION Appellants claim a calibrating a threshold that is derived from a statistical process, and, more particularly, embodiments of the present invention may be applied to asset management. (Spec. ¶ 2.) Claim 1 is representative of the subject matter on appeal. 1. An apparatus for calibrating a need-to-trade trigger threshold based on two sets of inputs corresponding to a stochastic process, the apparatus thereby accounting for common information in the two sets of multivariate stochastic inputs, the apparatus comprising: a. a database server storing an initial portfolio comprising a plurality of assets, each asset characterized by a weighting coefficient, the plurality of assets defining a vector in a portfolio space; b. a processing server having stored thereon computer- executable software configured to derive a need-to-trade probability based on a first set of data based on a first input and a second set of data based on a second input, at least one of the first or second inputs being an optimization input; c. a computer-executable module resident on the processing server for recursively replacing a subset of the first set of data with data sampled from the second input to a specified extent of replacement, thereby generating a substituted set of data, the extent of replacement governed by an extent of common information, and for calculating an ensemble of ersatz optimal portfolios having an ersatz optimal portfolio for each of the substituted sets of data; d. a computer-executable module for calculating a set of rebalance probabilities on the basis of the ensemble of ersatz optimal portfolios; e. a computer module for selecting the Lth percentile for the set of rebalance probabilities, where L is a specified confidence level, to derive an adjusted critical value; and Appeal 2017-010033 Application 13/234,575 3 f. a computer-executable module for establishing the need-to-trade trigger when an observed rebalance probability exceeds the adjusted critical value corresponding to the specified confidence level L. THE REJECTION Claims 1–16 are rejected under 35 U.S.C. § 101 as directed to a judicial exception without significantly more. ANALYSIS 35 U.S.C. § 101 REJECTION We will sustain the rejection of claims 1–16 under 35 U.S.C. § 101. The Supreme Court set forth a framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts. First, . . . determine whether the claims at issue are directed to one of those patent-ineligible concepts. . . . If so, . . . then ask, “[w]hat else is there in the claims before us?” . . . To answer that question, . . . consider the elements of each claim both individually and “as an ordered combination” to determine whether the additional elements “transform the nature of the claim” into a patent-eligible application. . . . [The Court] described step two of this analysis as a search for an “‘inventive concept’”—i.e., an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217–18 (2014) (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72–73 (2012)) (citations omitted). To perform this test, we must first determine whether the claims at Appeal 2017-010033 Application 13/234,575 4 issue are directed to a patent-ineligible concept. The Federal Circuit has explained that “the ‘directed to’ inquiry applies a stage-one filter to claims, considered in light of the [S]pecification, based on whether ‘their character as a whole is directed to excluded subject matter.’” See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). It asks whether the focus of the claims is on a specific improvement in relevant technology or on a process that itself qualifies as an “abstract idea” for which computers are invoked merely as a tool. See id. at 1335–36. In so doing we apply a “directed to” two prong test: 1) evaluate whether the claim recites a judicial exception, and 2) if the claim recites a judicial exception, evaluate whether the judicial exception is integrated into a practical application. USPTO, 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50, 50–57 (Jan. 7, 2019) (“Guidance”). The Examiner determines that the claims are directed to calibrating a need-to-trade trigger threshold that is derived from a statistical process which is considered to be an abstract idea inasmuch as such activity is considered both a fundamental economic practice and a method of organizing human activity by providing an opportunity for parties to enter into specified agreement. (Final Act. 3.) The Examiner finds that the elements in addition to the abstract idea, i.e. the database server and processor server, are recited at a high level of generality to simply perform the generic computer functions of receiving, processing, calculating, transmitting and storing information and do not amount to significantly more than the abstract idea. Appeal 2017-010033 Application 13/234,575 5 The Specification discloses that the invention relates to method and apparatus for calibrating a threshold that is derived from a statistical process which can be applied to asset management. (Spec. ¶ 2.) The method of the invention may be employed advantageously for calibrating a threshold that accounts for common information in prior and current multivariate mean- variance stochastic inputs. This threshold is used to trigger revision when a related process meaningfully deviates from optimality or some other specified condition. (Id. ¶ 36.) As such, the Specification discloses a method of organizing the actions of humans to trigger trading activity in connection with a financial account and as such relates to a certain method of organizing human activity i.e. a commercial interaction. Claim 1 recites the steps of “a database server storing an initial portfolio,” “a processing server . . . configured to derive a need-to-trade probability,” “a computer-executable module . . . for recursively replacing a subset of the first set of data,” “a computer-executable module for calculating a set of rebalance probabilities,” “a computer module for selecting the . . . percentile,” “a computer-executable module for establishing the need-to-trade trigger.” As such, claim 1 recites a method of organizing the actions of humans to trigger trading activity in connection with a financial account and as such relates to a certain method of organizing human activity, i.e. a commercial interaction. We, thus, agree with the Examiner’s findings that the claims are directed to a certain method of organizing human activity which is a judicial exception. Guidance, 84 Fed. Reg. at 52. Turning to the second prong of the “directed to” test, claim 1 merely requires a “database server,” “a processing server,” and several “computer- Appeal 2017-010033 Application 13/234,575 6 executable” modules. The Specification discloses that the computer system used to practice the invention may be a general purpose computer system and that the servers are implemented in one or more commercially available servers. We find no indication in the Specification, nor do Appellants direct us to any indication, that the operations recited in independent claim 1 invoke any assertedly inventive programming, require any specialized computer hardware or other inventive computer components, i.e., a particular machine, or that the claimed invention is implemented using other than generic computer components to perform generic computer functions. See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (“[A]fter Alice, there can remain no doubt: recitation of generic computer limitations does not make an otherwise ineligible claim patent-eligible.”). We also find no indication in the Specification that the claimed invention effects a transformation or reduction of a particular article to a different state or thing. Nor do we find anything of record, short of attorney argument, that attributes any improvement in computer technology and/or functionality to the claimed invention or that otherwise indicates that the claimed invention integrates the abstract idea into a “practical application,” as that phrase is used in the revised Guidance. See Guidance, 84 Fed. Reg. at 55. The recitation of the words “server” and “computer-executable module” does not impose “a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.” Id. at 53. Appeal 2017-010033 Application 13/234,575 7 Turning to the second step of the Alice analysis, because we find that the claims are directed to abstract ideas/judicial exceptions, the claims must include an “inventive concept” in order to be patent-eligible, i.e., there must be an element or combination of elements that is sufficient to ensure that the claim in practice amounts to significantly more than the abstract idea itself. See Alice, 573 U.S. at 217–18 (alteration in original) (quoting Mayo, 566 U.S. at 72–73). The introduction of a computer or server into the claims does not alter the analysis at Alice step two. [T]he mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention. Stating an abstract idea “while adding the words ‘apply it’” is not enough for patent eligibility. Nor is limiting the use of an abstract idea “‘to a particular technological environment.’” Stating an abstract idea while adding the words “apply it with a computer” simply combines those two steps, with the same deficient result. Thus, if a patent’s recitation of a computer amounts to a mere instruction to “implemen[t]” an abstract idea “on . . . a computer,” that addition cannot impart patent eligibility. This conclusion accords with the pre-emption concern that undergirds our § 101 jurisprudence. Given the ubiquity of computers, wholly generic computer implementation is not generally the sort of “additional featur[e]” that provides any “practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.” Id. at 223–24 (alterations in original) (citations omitted). Instead, “the relevant question is whether the claims here do more than simply instruct the practitioner to implement the abstract idea . . . on a generic computer.” Id. at 225. They do not. Taking the claim elements separately, the function performed by the computer at each step of the process is purely conventional. Using a Appeal 2017-010033 Application 13/234,575 8 computer to retrieve, select, and apply decision criteria to data and modify the data as a result amounts to electronic data query and retrieval—some of the most basic functions of a computer. All of these computer functions are well-understood, routine, conventional activities previously known to the trading industry. See Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016); see also In re Katz Interactive Call Processing Pat. Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011) (“Absent a possible narrower construction of the terms ‘processing,’ ‘receiving,’ and ‘storing,’ . . . those functions can be achieved by any general purpose computer without special programming”). In short, each step does no more than require a generic computer to perform generic computer functions. As to the data operated upon, “even if a process of collecting and analyzing information is ‘limited to particular content’ or a particular ‘source,’ that limitation does not make the collection and analysis other than abstract.” SAP Am., Inc. v. Investpic, LLC, 890 F.3d 1016, 1022 (Fed. Cir. 2018). Considered as an ordered combination, the computer components of Appellants’ claims add nothing that is not already present when the steps are considered separately. The sequence of data reception-analysis- access/display is equally generic and conventional or otherwise held to be abstract. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014) (sequence of receiving, selecting, offering for exchange, display, allowing access, and receiving payment recited an abstraction); Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017) (holding that sequence of data retrieval, analysis, modification, generation, display, and transmission was abstract); Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017) Appeal 2017-010033 Application 13/234,575 9 (holding sequence of processing, routing, controlling, and monitoring was abstract). The ordering of the steps is, therefore, ordinary and conventional. The claims do not, for example, purport to improve the functioning of the servers. As we stated above, the claims do not affect an improvement in any other technology or technical field. The Specification spells out different generic equipment and parameters that might be applied using this concept and the particular steps such conventional processing would entail based on the concept of information access under different scenarios. (See, e.g., Spec. ¶ 84.) Thus, the claims at issue amount to nothing significantly more than instructions to apply the abstract idea of information access using some unspecified, generic computer. Under our precedents, that is not enough to transform an abstract idea into a patent-eligible invention. See Alice, 573 U.S. at 226. We have reviewed all the arguments (App. Br. 17–23; Reply Br. 1–5) Appellants have submitted concerning the patent eligibility of the claims before us that stand rejected under 35 U.S.C. § 101. We find that our analysis above substantially covers the substance of all the arguments, which have been made. But, for purposes of completeness, we will address various arguments in order to make individual rebuttals of same. We are not persuaded of error on the part of the Examiner by Appellants’ argument that the claims are characterized more broadly than warranted by the claim. (App. Br. 17.) In Appellants’ view, the invention should be characterized as “calibrating a need-to-trade trigger as between portfolios optimized on the basis of shared common information.” (Id. at 18 (emphasis omitted).) We note that the Examiner determined that the claim was “directed to calibrating a need-to-trade trigger threshold that is derived Appeal 2017-010033 Application 13/234,575 10 from a statistical process.” (Final Act. 3.) The Appellants characterize what the claimed subject matter is directed to at a level of abstraction lower than what the Examiner has characterized it to be directed to. See Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240–41 (Fed. Cir. 2016) (“An abstract idea can generally be described at different levels of abstraction. As the Board has done, the claimed abstract idea could be described as generating menus on a computer, or generating a second menu from a first menu and sending the second menu to another location. It could be described in other ways, including, as indicated in the specification, taking orders from restaurant customers on a computer.”). Therefore, although the Examiner describes what the claims are directed to at a different level of abstraction, the abstract nature of the claim remains the same. We are not persuaded of error on the part of the Examiner by Appellants’ argument that the claims are not directed to a fundamental economic practice because it does not pertain to the core of economic practice and in order to be a fundamental economic practice many people would need to practice the method. (App. Br. 18–19.) We do not agree. As claim 1 is directed to commercial interactions, the claim is directed to a certain method of organizing human activity i.e. a fundamental economic practice. Guidance, 84 Fed. Reg. at 52. We note that the Appellants admit that the method recited in claim 1 is a method of organizing human activity because it governs what people are doing. (App. Br. 20.) We are not persuaded of error on the part of the Examiner by Appellants’ argument that there is no evidence that the other elements in addition to the abstract idea are well-understood, routine and conventional. We find that the Specification provides intrinsic evidence to this effect by Appeal 2017-010033 Application 13/234,575 11 teaching that the computer system and servers may be general purpose computers and commercially available servers. (Spec. ¶¶ 80–84.) In view of the foregoing, we will sustain the rejection as it is directed to claim 1. We will also sustain the rejection as it is directed to the remaining claims because Appellants do not argue the separate eligibility of these claims. CONCLUSIONS OF LAW We conclude the Examiner did not err in rejecting claims 1–16 under 35 U.S.C. § 101. DECISION The Decision of the Examiner is affirmed. 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 Copy with citationCopy as parenthetical citation