Richard Peter. Nespola

Patent Trials and Appeals Board

Aug 21, 2019

10981494 - (D) (P.T.A.B. Aug. 21, 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.
10/981,494 11/05/2004 Richard Peter Nespola JR. 260009US-8 CONT 6926
22850 7590 08/21/2019
OBLON, MCCLELLAND, MAIER & NEUSTADT, L.L.P.
1940 DUKE STREET
ALEXANDRIA, VA 22314
EXAMINER
RANKINS, WILLIAM E
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
08/21/2019 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):
OBLONPAT@OBLON.COM
iahmadi@oblon.com
patentdocket@oblon.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte RICHARD PETER NESPOLA, JR
____________

Appeal 2018-0013581
Application 10/981,4942
Technology Center 3600
____________

Before MURRIEL E. CRAWFORD, JOSEPH A. FISCHETTI, and
NINA L. MEDLOCK, Administrative Patent Judges.

MEDLOCK, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner’s final
rejection of claims 1–4, 6–9, 12–19, 30, 56, 57, 64–67, 72–75, 77–80, 83–
90, 93, and 94. We have jurisdiction under 35 U.S.C. § 6(b). Appellant’s
representative appeared for oral argument on August 8, 2019.
We AFFIRM.

1 Our decision references Appellant’s Appeal Brief (“App. Br.,” filed
August 2, 2017) and Reply Brief (“Reply Br.,” filed November 20, 2017),
and the Examiner’s Answer (“Ans.,” mailed September 18, 2017) and Final
Office Action (“Final Act.,” mailed December 2, 2016).
2 Appellant identifies Freddie Mac as the real party in interest. App. Br. 2.
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CLAIMED INVENTION
Appellant describes that the present invention “generally relates to
financial methods, systems, and computer program products for processing
financial information and for securing repayment of loans” and, more
particularly, to “systems and methods for structuring and allocating
responsibility for payments on loans[,] the repayment of which are [sic]
secured by a lien, or other legal instruments” (Spec. ¶ 1).
Claims 1, 30, and 72 are the independent claims on appeal. Claim 1,
reproduced below with bracketed notations added, is illustrative of the
claimed subject matter:
1. A method of providing assistance to a loan
borrower, the method comprising:
[(a)] receiving, by circuitry, a request from the loan
borrower to forgo a portion of an amount due of a periodic
payment on a loan for a property, the loan administered in
accordance with a loan agreement having predetermined flexible
payment terms that include the loan borrower being responsible
for a debt associated with said loan and for making a plurality of
periodic total payments associated with said loan in accordance
with a predetermined amortization schedule;
[(b)] a guarantor initiating an electronic payment, to be
received by the circuitry, of at least the portion of the amount due
of one or more of the periodic total payments on said loan on
behalf of the loan borrower such that the timing and amount of
the periodic total payments remains consistent with said
amortization schedule during the life of the loan, thereby
ensuring consistency in the cash flows associated with the loan;
and
[(c)] said guarantor taking an equity interest in said real
estate property in proportion to the amount paid by the guarantor
on behalf of the loan borrower;
[(d)] determining, by the circuitry, whether to approve
the request by the loan borrower;
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[(e)] automatically transmitting, by the circuitry when
the circuitry approves the request by the loan borrower, an
approval notification to the loan borrower;
[(f)] automatically transmitting, by the circuitry when
the circuitry approves the request by the loan borrower, a
payment due notification to the guarantor, the payment due
notification indicating the portion of the amount due based on the
approved request;
[(g)] receiving, by the circuitry, the electronic payment
from the guarantor; and
[(h)] automatically adjusting, by the circuitry after
reception of the electronic payment from the guarantor, a
property record that stores the guarantor’s equity interest in the
property according to a ratio between said amount paid by the
guarantor on behalf of the loan borrower and at least one of the
value of the property at the time of loan origination and the value
of the property at the time of the guarantor payment.
REJECTION
Claims 1–4, 6–9, 12–19, 30, 56, 57, 64–67, 72–75, 77–80, 83–90, 93,
and 94 are rejected under 35 U.S.C. § 101 as directed to a judicial exception
without significantly more.
ANALYSIS
Appellant argues the pending claims as a group (App. Br. 9–14). 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, an invention is patent-eligible if it claims a
“new and useful process, machine, manufacture, or composition of matter.”
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).
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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
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).
In rejecting the pending claims under 35 U.S.C. § 101, the Examiner
determined that the claims are directed to “allocating equity interest in a
property to a guarantor based on the receipt of a payment from the guarantor
on behalf of a borrower,” i.e., to an abstract idea similar to other concepts
that the courts have held abstract (Final Act. 4–5 (citing Digitech Image
Techs., LLC v. Elec. for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014)
(organizing information through mathematical correlations)), and that the
abstract idea is recited in the independent claims as:
A guarantor initiating . . . payment . . . on behalf of the loan
borrower;
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Said guarantor taking an equity interest in said real estate
property;
Receiving . . . the . . . payment; [and]
Automatically adjusting . . . a property record that stores the
guarantor’s equity interest in the property according to a ratio
between said amount paid by the guarantor and . . . the value of
the property
(Final Act. 4–5). The Examiner also determined that the claims do not
include additional elements that are sufficient to amount to significantly
more than the abstract idea itself (id. at 5–7). In this regard, the Examiner
reasoned that “the circuitry/devices recited is generic and does not transform
the [abstract] idea into patent-eligible subject matter, and that the remaining
limitations, e.g., receiving a request to forgo a portion of an amount due,
initiating an electronic payment, etc. are merely limitations for post-solution
activity (id. at 6).3
After Appellant’s briefs were filed, and the Examiner’s Answer
mailed, the U.S. Patent and Trademark Office (the “USPTO”) published
revised guidance 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, 57 (Jan. 7, 2019) (the “2019
Revised Guidance”). That guidance revised the USPTO’s examination
procedure with respect to the first step of the Mayo/Alice framework by
(1) providing groupings of subject matter that is 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.

3 We do not agree with the Examiner’s characterization of these limitations
as “post-solution activity.” Instead, these limitations, in our view, are part of
the abstract idea itself.
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Id. at 50. The 2019 Revised Guidance, by its terms, applies to all
applications, and to all patents resulting from applications, filed before, on,
or after January 7, 2019. Id.4
Step One of the Mayo/Alice Framework (2019 Revised Guidance, Step 2A)
The first step in the Mayo/Alice framework, as mentioned above, is to
determine whether the claims at issue are “directed to” a patent-ineligible
concept, e.g., an abstract idea. Alice Corp., 573 U.S. at 217. This first step,
as set forth in the 2019 Revised Guidance (i.e., Step 2A), is 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 consider whether the claim includes
additional elements, beyond the judicial exception, “that integrate the
[judicial] exception into a practical application,” i.e., that 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 (“Step 2A, Prong Two”). Id. at 54–55.
Only if the claim (1) recites a judicial exception and (2) does not integrate

4 This guidance supersedes previous guidance memoranda. See
2019 Revised Guidance, 84 Fed. Reg. at 51 (“Eligibility-related guidance
issue prior to prior to the Ninth Edition, R-08.2017 of the MPEP (published
Jan. 2018) should not be relied upon.”). As such, Appellant’s arguments,
challenging the sufficiency of Examiner’s rejection, will not be addressed to
the extent the arguments are based on now-superseded USPTO guidance.
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that exception into a practical application do we conclude that the claim is
“directed to” the judicial exception, e.g., an abstract idea.
We are not persuaded, as an initial matter, that the Examiner
overgeneralized the concept to which claim 1 is directed (App. Br. 9–11;
see also Reply Br. 2–5). Instead, the Examiner’s characterization of claim 1
is, in our view, fully consistent with the Specification, including the claim
language. That the claim includes more words than the phrase the Examiner
used to articulate the abstract idea, and that the Examiner, thus, articulates
the abstract idea at a different level of abstraction than would Appellant is an
insufficient basis to persuasively argue that the claim language has been
mischaracterized or that the Examiner failed to consider the claim as a
whole. See Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (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.”).
We also do not agree with Appellant that the Examiner erred in
determining that claim 1 is directed to an abstract idea. 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.’” 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
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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 the
claims focus on an abstract idea, and not on any improvement to technology
and/or a technical field.
The Specification is entitled “METHOD, SYSTEM, AND
COMPUTER PROGRAM PRODUCT FOR STRUCTURING AND
ALLOCATING PAYMENTS ON A LOAN WITH SECURED
REPAYMENTS,” and states that the invention relates, in particular, to
“systems and methods for structuring and allocating responsibility for
payments on loans[,] the repayment of which are [sic] secured by a lien, or
other legal instruments” (Spec. ¶ 1). In discussing the related art, the
Specification describes that homebuyers apply for mortgages from primary
market mortgage lenders, e.g., banks, thrifts, mortgage companies, credit
unions, and online lenders (id. ¶ 2). After closing, the primary lender may
either hold the mortgage in its portfolio or sell it in the secondary mortgage
market to secondary market institutions, which often repackage qualifying
loans (i.e., loans that meet specific underwriting and product standards) into
mortgage-backed securities and sell those securities to Wall Street investors
(id.). The Specification describes that secondary market investors demand a
predictable stream of monthly loan repayments with steady loan
amortization (id. ¶ 8) whereas consumers, on the other hand, demand
payment flexibility – a characteristic that, according to the Specification, is
especially important to lower income borrowers or borrowers who are
subject to disruptive life events, e.g., death, divorce, medical issues, that
affect their cash flow (id. ¶ 11). The Specification describes several
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conventional approaches to flexible mortgage programs (id. ¶¶ 12–22).
Nonetheless, the Specification states that what is needed is a “method,
system, and computer program product that provides repayment flexibility to
borrowers while maintaining a predictable stream of monthly loan payments
to secondary market investors” (id. ¶ 23).
The claimed invention is ostensibly intended to address this need by
providing a system and method for managing a loan that balances the desires
of secondary market investors and the needs of borrowers (id. ¶¶ 23–24).
The method, thus, involves extending a loan, secured by real estate or
another asset, to a borrower, where the loan terms provide an option for the
borrower to request another entity to make a predetermined payment on his
or her behalf; that entity then takes an equity interest in the mortgaged
property in relation to the amount paid on the borrower’s behalf (id.¶ 24).
Consistent with this disclosure, claim 1 recites a method for providing
assistance to a loan borrower comprising: (1) receiving a request from the
borrower to forgo payment of a portion of the amount due on a loan for a
property, i.e.,
receiving, by circuitry, a request from the loan borrower to forgo
a portion of an amount due of a periodic payment on a loan for a
property, the loan administered in accordance with a loan
agreement having predetermined flexible payment terms that
include the loan borrower being responsible for a debt associated
with said loan and for making a plurality of periodic total
payments associated with said loan in accordance with a
predetermined amortization schedule
(step (a)); (2) determining whether to approve the borrower’s request, and
notifying the borrower and the borrower’s guarantor if the request is
approved, i.e.,
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determining, by the circuitry, whether to approve the request by
the loan borrower;
automatically transmitting, by the circuitry when the circuitry
approves the request by the loan borrower, an approval
notification to the loan borrower; [and]
automatically transmitting, by the circuitry when the circuitry
approves the request by the loan borrower, a payment due
notification to the guarantor, the payment due notification
indicating the portion of the amount due based on the approved
request
(steps (d), (e), and (f)); (3) receiving payment of the portion of the amount
due from the guarantor on the borrower’s behalf, i.e.,
a guarantor initiating an electronic payment, to be received by
the circuitry, of at least the portion of the amount due of one or
more of the periodic total payments on said loan on behalf of the
loan borrower such that the timing and amount of the periodic
total payments remains consistent with said amortization
schedule during the life of the loan, thereby ensuring consistency
in the cash flows associated with the loan; and
receiving, by the circuitry, the electronic payment from the
guarantor
(steps (b) and (g)); and (4) adjusting a property record that stores the
guarantor’s equity interest in the property according to a ratio between the
amount paid by the guarantor and either the value of the property at the time
of loan origination or the value of the property at the time of the guarantor’s
payment, i.e.,
[(c)] said guarantor taking an equity interest in said real
estate property in proportion to the amount paid by the guarantor
on behalf of the loan borrower; [and]
[(h)] automatically adjusting, by the circuitry after
reception of the electronic payment from the guarantor, a
property record that stores the guarantor’s equity interest in the
property according to a ratio between said amount paid by the
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guarantor on behalf of the loan borrower and at least one of the
value of the property at the time of loan origination and the value
of the property at the time of the guarantor payment
(steps (c) and (h)). These limitations, when given their broadest reasonable
interpretation, recite a method for managing a mortgage loan comprising
(1) receiving a request from a borrower to forego payment of a portion of an
loan amount due; (2) determining whether to approve the request; and (3) if
the borrower’s request is approved, allocating an equity interest in the
mortgaged property to a guarantor after receiving payment from the
guarantor on the borrower’s behalf, i.e., a fundamental economic practice,
which is a method of organizing human activity and, therefore, an abstract
idea. See 2019 Revised Guidance, 84 Fed. Reg. at 52. Cf. CMG Fin. Servs.,
Inc. v. Pac. Tr. Bank, F.S.B., 50 F. Supp. 3d 1306, 1325 (CD. Cal. 2014)
(determining that claims are directed to “the abstract idea of a mortgagee
paying down a mortgage early when funds are available and borrowing
funds as needed to reduce the overall interest charged by the mortgage”),
aff’d, 616 F. App’x 420 (Fed. Cir. 2015).
It also is significant here that although claim 1 recites that the method
steps are performed “by circuitry,” the underlying processes recited in the
claim are all acts that could be performed by a human, e.g., mentally or
manually, using pen and paper, without the use of a computer or any other
machine. For example, a person could receive a request from a borrower to
forgo payment of a portion of a loan amount due either orally or in
document form, and also could communicate approval of the request to the
borrower and guarantor orally or in writing. Rather than initiating an
electronic payment, the guarantor could forward the payment via mail or in
person delivery; a human, using pen and paper, also could appropriately
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record the guarantor’s equity interest in the property after receiving the
guarantor’s payment on the borrower’s behalf. Simply put, in addition to
reciting a fundamental economic practice, claim 1 recites a mental process,
i.e., a concept performed in the human mind or manually, using pen and
paper, and therefore, an abstract idea. See 2019 Revised Guidance,
84 Fed. Reg. at 52; CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d
1366, 1373 (Fed. Cir. 2011) (holding that method steps that can be
performed in the human mind, or by a human using a pen and paper, are
unpatentable mental processes). See also Elec. Power Grp., LLC v. Alstom,
S.A., 830 F.3d 1350, 1355 (Fed. Cir. 2016) (explaining that the Federal
Circuit treats “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”); Versata Dev. Grp., Inc. 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.”). In this regard, we note, for the record, that “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, 1363 (Fed. Cir. 2015)
Having concluded that claim 1 recites a judicial exception, i.e., an
abstract idea (Step 2A, Prong 1), we next consider whether the claim recites
“additional elements that integrate the judicial exception into a practical
application” (Step 2A, Prong 2).
The only additional element recited in claim 1, beyond the abstract
idea, is the claimed “circuitry” — an element that, as the Examiner observes,
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is described in the Specification without any specificity and can reasonably
be characterized as generic (Final Act. 6 (citing Spec. ¶ 54 (describing that
“hard-wired circuitry may be used in place of or in combination with
software instructions” and that “embodiments are not limited to any specific
combination of hardware circuitry and software”)).
We find no indication in the Specification, nor does Appellant direct
us to any indication, that the operations recited in claim 1 require any
specialized computer hardware or other inventive computer components,
i.e., a particular machine, invoke any assertedly inventive programming, 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 that attributes an
improvement in technology and/or a technical field 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 2019 Revised
Guidance.5

5 The 2019 Revised Guidance references the MANUAL OF PATENT
EXAMINING PROCEDURE (“MPEP”) § 2106.05(a)–(c) and (e) in describing
the considerations that are indicative that an additional element or
combination of elements integrates the judicial exception, e.g., the abstract
idea, into a practical application. Id. at 55. If the recited judicial exception
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Appellant asserts that the “totality of the claim features . . . improve[s]
upon conventional methods and apparatus for loan provision and loan
assistance” (id. at 13; see also Reply Br. 9), and cites the “automatically
adjusting step, i.e., step (h), as recited in claim 1, as reciting “specific
structures and method steps to facilitate such resulting automatic
adjustment” (id.). Yet, we fail to see how, and Appellant does not explain
how, automatically adjusting a guarantor’s equity interest in a loan property
amounts to a technological improvement, as opposed to an improvement in a
business practice, i.e., implementing a flexible mortgage program. As the
court explained in Enfish, the relevant inquiry is not whether there is a
business challenge resolved by the claimed invention, but whether the
challenge is one rooted in technology, or one where, as here, the proposed
solution is merely using computers as a tool. See Enfish, 822 F.3d at 1335–
36.
We conclude, for the reasons set forth above, that claim 1 recites a
fundamental economic practice and/or a mental process, i.e., an abstract
idea, and that the circuitry recited in the claim is no more than a generic
component used as a tool to perform the recited abstract idea. As such, it
does 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 feature[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)).

is integrated into a practical application, as determined under one or more of
these MPEP sections, the claim is not “directed to” the judicial exception.
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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 the additional elements
amount to “significantly more” than the judicial exception itself.
2019 Revised Guidance, 84 Fed. Reg. at 56.
Appellant maintains that even if claim 1 is directed to an abstract idea,
the claim recites features that are sufficient to ensure that the claim amounts
to significantly more than a judicial exception (App. Br. 11). Yet, the
feature that Appellant ostensibly identifies as amounting to significantly
more, i.e., “automatically adjusting . . . the guarantor’s equity interest in the
property according to a ratio between said amount paid by the guarantor . . .
and at least one of the value of the property at the time of loan origination
and the value of the property at the time of the guarantor payment,” is part of
the abstract idea itself; it is not an additional element to be considered when
determining whether claim 1 includes additional elements or a combination
of elements that is sufficient to amount to significantly more than the
judicial exception.
It could not be clearer from Alice, that under step two of the
Mayo/Alice framework, the elements of each claim are considered both
individually and “as an ordered combination” to determine whether the
additional elements, i.e., the elements other than the abstract idea itself,
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“transform the nature of the claim” into a patent-eligible application. Alice
Corp., 573 U.S. at 217 (internal quotations and citation omitted); see Mayo,
566 U.S. at 72–73 (requiring that “a process that focuses upon the use of a
natural law also contain other elements or a combination of elements,
sometimes referred to as an ‘inventive concept,’ sufficient to ensure that the
patent in practice amounts to significantly more than a patent upon the
natural law itself” (emphasis added) (internal citation omitted)). In other
words, the inventive concept under step two of the Mayo/Alice test cannot be
the abstract idea itself:
It is clear from Mayo that the “inventive concept” cannot be the
abstract idea itself, and Berkheimer . . . leave[s] untouched the
numerous cases from this court which have held claims ineligible
because the only alleged “inventive concept” is the abstract idea.
Berkheimer v. HP, Inc., 890 F.3d 1369, 1374 (Fed. Cir. 2018) (Moore, J.,
concurring); see also BSG Tech LLC v. BuySeasons, Inc., 899 F.3d 1281,
1290 (Fed. Cir. 2018) (“It has been clear since Alice that a claimed
invention’s use of the ineligible concept to which it is directed cannot supply
the inventive concept that renders the invention ‘significantly more’ than
that ineligible concept.”) (internal citation omitted).
Here, the only claim element beyond the abstract idea is the claimed
circuitry, which the Examiner determined, and we agree, is a generic
computer component used to perform generic computer functions (Final
Act. 6) — a determination amply supported by, and fully consistent with the
Specification (see, e.g., Spec. ¶ 54).6

6 The Office’s April 19, 2018 Memorandum to the Examining Corps from
Deputy Commissioner for Patent Examination Policy, Robert W. Bahr,
entitled, Changes in Examination Procedure Pertaining to Subject Matter
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Appellant cannot reasonably contend, nor does Appellant, that the
operation of this component is not 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 generic computer components to perform generic computer
functions, e.g., receiving, transmitting, and processing 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, 890 F.3d at 1373
(Moore, J., concurring) (internal citations omitted); see also BSG Tech,
899 F.3d at 1291 (“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 further argues that even if the claims recite generic
circuitry/devices, the claimed features, in combination, are able to perform

Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP,
Inc.), available at https://www.uspto.gov/sites/default/files/documents/
memo-berkheimer-20180419.pdf, expressly directs that an examiner may
support the position that an additional element (or combination of elements)
is not well-understood, routine or conventional with “[a] citation to an
express statement in the specification . . . that demonstrates the well-
understood, routine, conventional nature of the additional element(s)” (id.
at 3).
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functions that are not merely generic and, therefore, amount to “significantly
more” than an abstract idea itself (App. Br. 13–14). Appellant, thus, asserts
that a person of skill in the art, if asked, for example, to name a generic
computer function, would not answer “automatically adjusting . . . the
guarantor’s equity interest in the property according to a ratio between said
amount paid by the guarantor . . . and at least one of the value of the
property at the time of loan origination and the value of the property at the
time of the guarantor payment” (App. Br. 14; see also Reply Br. 9).
That argument is not persuasive (even putting aside that
“automatically adjusting” is part of the abstract idea) at least because the
issue is not whether “automatically adjusting” is a generic computer
function. Instead, the issue is whether the operation, i.e., the automatic
adjustment, invokes any allegedly inventive programming, requires any
specialized computer hardware or other inventive computer components, or
is implemented using other than generic computer components to perform
generic computer functions, i.e., receiving and processing information.
Appellant has offered no persuasive argument or technical reasoning
to demonstrate that the “automatically adjusting” step recited in claim 1
involves more than well-understood, routine, and conventional computer
activities, i.e., generic computer functions. Cf. In re Katz Interactive Call
Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011) (“Katz has
not claimed a specific function performed by a special purpose computer,
but has simply recited the claimed functions of ‘processing,’ ‘receiving,’ and
‘storing.’ Absent a possible narrower construction of the terms ‘processing,’
‘receiving,’ and ‘storing,’ discussed below, those functions can be achieved
by any general purpose computer without special programming.”). Simply
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programming a general-purpose computer or generic circuitry to perform an
abstract idea does not provide an “inventive concept” such that the claim
amounts to significantly more than that abstract idea. See Alice, 573 U.S.
at 221–227 (applying an abstract idea, such as an algorithm, on a general
purpose computer is not enough to transform a patent-ineligible abstract idea
into a patent-eligible invention.); EON Corp. IP Holdings LLC v. AT&T
Mobility LLC, 785 F.3d 616, 623 (Fed. Cir. 2015) (“A general purpose
computer is flexible – it can do anything it is programmed to do.”).
We are not persuaded, on the present record, that the Examiner erred
in rejecting claim 1 under 35 U.S.C. § 101. Therefore, we sustain the
Examiner’s rejection of claim 1, and claims 2–4, 6–9, 12–19, 30, 56, 57, 64–
67, 72–75, 77–80, 83–90, 93, and 94, which fall with claim 1.
DECISION
The Examiner’s rejection of claims 1–4, 6–9, 12–19, 30, 56, 57, 64–
67, 72–75, 77–80, 83–90, 93, and 94 under 35 U.S.C. § 101 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)(1)(iv).
AFFIRMED