Robert H. Scheer

Patent Trials and Appeals Board

Sep 20, 2019

12536777 - (D) (P.T.A.B. Sep. 20, 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.
12/536,777 08/06/2009 Robert H. Scheer 31083.05US6 4019
34018 7590 09/20/2019
Greenberg Traurig, LLP
77 W. Wacker Drive
Suite 3100
CHICAGO, IL 60601-1732
EXAMINER
BUCHANAN, CHRISTOPHER R
ART UNIT PAPER NUMBER
3627
NOTIFICATION DATE DELIVERY MODE
09/20/2019 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):
chiipmail@gtlaw.com
clairt@gtlaw.com
jarosikg@gtlaw.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte ROBERT H. SCHEER1
____________

Appeal 2018-001114
Application 12/536,777
Technology Center 3600
____________

Before MURRIEL E. CRAWFORD, ANTON W. FETTING, and BIBHU R.
MOHANTY, Administrative Patent Judges.

MOHANTY, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE

The Appellant seeks our review under 35 U.S.C. § 134(a) of the final
rejection of claims 7–13, which are all the claims pending in the application.
We have jurisdiction under 35 U.S.C. § 6(b).

SUMMARY OF THE DECISION
We AFFIRM.

1 Appellant identifies W.W. Grainger, Inc. as the real party of interest.
(App. Br. 2).
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THE INVENTION
The Appellant’s claimed invention is directed to a method for
managing inventory within an integrated supply chain (Spec., page 1, lines
10–12). Claim 7, reproduced below with the italics added, is representative
of the subject matter on appeal.

7. A computer-readable media having computer-executable
instructions for managing inventory of an item within a supply chain
having a plurality of geographically distinct distribution points,
the instructions performing steps comprising:
providing a forecast of demand over a forecast period for the
item;
using the forecast of demand for the item to establish a critical
stocking ratio for the item, the critical stocking ratio indicating a total
quantity of the item which can be held in inventory over the forecast
period;
using the critical stocking ratio for the item to apportion the
total quantity of the item which can be held in inventory over the
forecast period in shares to the plurality of geographically distinct
distribution points in the supply chain by assigning over the forecast
period a base stock level for the item at each of the plurality of
geographically distinct distribution points in the supply chain and a
reorder point for the item at each of the plurality of geographically
distinct distribution points in the supply chain;
using an ontology, in which frames acting as nodes in a
semantic network define attributes indicative of restrictions and
allowable locations within the supply chain for the item, to determine
a shipping method for replenishing the item at each of the plurality of
geographically distinct distribution points in the supply chain; and
executing the shipping method when any of the plurality of
geographically distinct distribution points in the supply chain fails to
have a base stock level for the item thereby causing inventory within
the supply chain to be managed in accordance with the critical
stocking ratio.

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THE REJECTION
Claims 7–13 are rejected under 35 U.S.C. § 101 as being directed to
non-statutory subject matter.

FINDINGS OF FACT
We have determined that the findings of fact in the Analysis section
below are supported at least by a preponderance of the evidence.2
Additionally, we make the following enumerated facts below:
FF1. Ontology may be defined in one definition as: 2. A set of
concepts and categories in a subject area or domain that shows their
properties and the relations between them.
(Obtained from https://www.lexico.com/en/definition/ontology on
September 9, 2019, definition number 2).
FF2. The Frame node is a useful tool for organizing nodes by
collecting related nodes together in a common area. Frames are useful when
a node setup becomes large and confusing yet the re-usability of a Node
Group is not required. (Obtained from
https://docs.blender.org/manual/en/latest/interface/controls/nodes/frame.html
September 11, 2019).

2 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
(explaining the general evidentiary standard for proceedings before the
Patent Office).
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ANALYSIS
Rejection under 35 U.S.C. § 101
The Appellant argues that the rejection of claim 7 is improper because
the claim “set[s] forth the use of a programmatic structure that improves the
functioning of technology” (App. Br. 5) (emphasis omitted). Specifically,
the Appellant argues the claimed use of an “an ontology, in which frames
acting as nodes in a semantic network define attributes indicative of
restrictions and allowable locations with the supply chain for the item”
(App. Br. 5) (emphasis omitted). The Appellant argues that “the use of this
specific type of programmatic structure is an improvement over ontologies
that simply use plain nodes in the semantic network” which eliminates the
need for substantial amounts of redundancy in the physical implementation
of the database. (Emphasis omitted). The Appellant cites to the
Specification at page 36 as demonstrating this (App. Br. 5).
In contrast, the Examiner has determined that the rejection of record is
proper (Final Action 2–4; Ans. 2, 3).
We agree with the Examiner. An invention is patent eligible if it
claims a “new and useful process, machine, manufacture, or composition of
matter.” 35 U.S.C. § 101. However, the Supreme Court has long interpreted
35 U.S.C. § 101 to include implicit exceptions: “[l]aws of nature, natural
phenomena, and abstract ideas” are not patentable. 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, we
are guided by the Supreme Court’s two-step framework, described in Mayo
and Alice. Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework,
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we first determine 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);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 192
(1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267–68 (1854))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that “[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula.” Diehr, 450 U.S. at 176; see also id. at 191 (“We
view respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, and this principle cannot be circumvented by attempting
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to limit the use of the formula to a particular technological environment.”
Id. (internal citation omitted) (citing Benson and Flook); see, e.g., id. at 187
(“It is now commonplace that an application of a law of nature or
mathematical formula to a known structure or process may well be deserving
of patent protection.”).
The PTO recently published revised guidance on the application of
§ 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed.
Reg. 50 (Jan. 7, 2019) (“Guidance”). Under the Guidance, we first look to
whether the claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
organizing human activity such as a fundamental economic
practice, or mental processes); and
(2) additional elements that integrate the judicial exception into
a practical application (see MPEP § 2106.05(a)–(c), (e)–(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is not “well-understood, routine, conventional” in the field (see
MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
See Guidance.

If the claim is “directed to” an abstract idea, we turn to the second
step of the Alice and Mayo framework, where “we must examine 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 (citation omitted). “A claim
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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. (alterations in original) (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.
Here, the Examiner has determined that the claim is directed to the
concept of forecasting and replenishing supply chains, which is considered a
fundamental economic practice and therefore an abstract idea (Ans. 2). We
substantially agree with the Examiner in this regard as claim 7 is directed to
the steps in italics in the claim above. These steps are directed to the
forecasting and replenishing of supply chains, which is considered a
fundamental economic practice and an abstract idea. Here, the claim is also
directed to organizing and manipulating information through mathematical
correlations and is directed to a judicial exception. A system, like the
claimed system, “a process that employs mathematical algorithms to
manipulate existing information to generate additional information is not
patent eligible.” See Digitech Image Techs, LLC v. Elecs. for Imaging, Inc.,
758 F.3d 1344, 1351 (Fed. Cir. 2014). In Intellectual Ventures I LLC v.
Capital One Financial, 850 F.3d 1332, 1340 (Fed. Cir. 2017) it was held
that collecting, displaying, and manipulating data was directed to an abstract
idea. See Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir.
2016) (collecting information, analyzing it, and displaying results from
certain results of the collection and analysis was held to be an abstract idea).
Thus, we consider the claim to be directed to a judicial exception as
identified above.
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The claims do not improve computer functionality, improve another
field of technology, utilize a particular machine, or effect a physical
transformation. Rather, we determine that nothing in the claims imposes a
meaningful limit on the judicial exception, such that the claims are more
than a drafting effort to monopolize the judicial exception.
For example, in claim 7 the steps of [1] “providing a forecast of
demand over a forecast period for the item”; [2] “using the forecast of
demand for the item to establish a critical stocking ratio for the item”; [3]
“using the critical stocking ratio for the item to apportion the total quantity
of the item which can be held in inventory over the forecast period”; [4]
“assigning over the forecast period a base stock level for the item at each of
the plurality of geographically distinct distribution points in the supply
chain”; [4] “using an ontology, in which frames acting as nodes in a
semantic network define attributes indicative of restrictions and allowable
locations within the supply chain for the item, to determine a shipping
method for replenishing the item”; and [5] “executing the shipping method
when any of the plurality of geographically distinct distribution points in the
supply chain fails to have a base stock level for the item thereby causing
inventory within the supply chain to be managed in accordance with the
critical stocking ratio,” are merely conventional computer steps performed
by a generic computer that do not improve computer functionality. That is,
these recited steps [1]–[5] “do not purport to improve the functioning of the
computer itself” but are merely generic functions performed by a
conventional processor. Likewise, these same steps [1]–[5] listed above do
not improve the technology of the technical field and merely use generic
computer components and functions to perform the steps. Also, the recited
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method steps [1]–[5] above do not require a “particular machine” and can be
utilized with a general purpose computer, and the steps performed are purely
conventional. In this case, the general purpose computer is merely an object
on which the method operates in a conventional manner. Further, the claim
as a whole fails to effect any particular transformation of an article to a
different state. The recited steps [1]–[5] fail to provide meaningful
limitations to limit the judicial exception and rather are mere instructions to
apply the method to a generic computer.
Considering the elements of the claim both individually and as “an
ordered combination” the functions performed by the computer system at
each step of the process are purely conventional. Each step of the claimed
method does no more than require a generic computer to perform a generic
computer function. Thus, the claimed elements have not been shown to
integrate the judicial exception into a practical application. See Guidance,
84 Fed. Reg. at 54–55. The Revised Guidance references the MANUAL OF
PATENT EXAMINING PROCEDURE (“MPEP”) §§ 2106.05(a)–(c) and (e)–(h).
Turning to the second step of the Alice and Mayo framework, we
determine that the claim does not contain an inventive concept sufficient to
“transform” the abstract nature of the claim into a patent-eligible application.
The claim fails to add a specific limitation beyond the judicial exception that
is not well-understood, routine, and conventional in the field. Rather, the
claim uses well-understood, routine, and conventional activities previously
known in the art at a high level of generality. The Specification at pages 14
and 15 for example describes using conventional computer components such
as general purpose computing devices, computers, servers, and monitors in a
conventional manner. The claim specifically includes recitations for a
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computer-executable instructions to implement the method but these
computer components described in the Specification are all used in a manner
that is well-understood, routine, and conventional in the field. The
Appellant has not shown that the generic computer components which are
used to implement the claimed method are not well understood, routine, or
conventional in the field. The Appellant has not demonstrated that the
computers described in the Specification at pages 14 and 15 for instance are
not a general purpose computer components beyond those known to be
routine and conventional known to perform similar functions in a well-
understood manner.
The Appellant has specifically argued that the claimed “programmatic
structure . . . improves the functioning of the technology” (App. Br. 5). The
Appellant argues that the claims recite “the use of an ontology, in which
frames acting as nodes in a semantic network define attributes indicative of
restrictions and allowable locations within the supply chain for the item, to
determine a shipping method for replenishing the item at each of the
plurality of geographically distinct distribution points in the supply chain”
(App. Br. 5). The Appellant argues that this is an improvement over
ontologies that simply use plain nodes in the semantic network and this
improvement, in turn provides the benefit of “eliminat[ing] the need for
substantial amounts [of] redundancy in the physical implementation of the
ontology database.” Id. (emphasis omitted). In contrast, the Examiner has
determined that the “feature related to using an ontology in which frames act
as nodes in a semantic network is merely a particular, routine use of well-
known schemes for knowledge representation” (Ans. 3, emphasis added).
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We disagree with this contention by the Appellant. The Specification
at page 36 states that the “ontology 92 is a description of concepts and
relationships that can exist for a community of agents.” The Specification
also states at page 36 that there is a querying of the ontology 92 but such a
query of an ontology is conventional to obtain the desired data. Further, the
use of frames as nodes is a conventional use of frames in large systems
(FF2) and, is, thus, a conventional use of known computer components.
We find no indication in the Specification, nor do Appellant directs us
to any indication, that the operations recited in independent claim 7 invoke
any 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 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 Appellant in the Appeal Brief at page 4 have cited to Enfish, LLC
v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) to show that the claim is
not abstract but the claims in that case were not similar in scope to those
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here in contrast and were in contrast directed to a self-referential data table.
The Appellant in the Appeal Brief at page 4 have also cited to McRO, Inc. v.
Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016) but the
claims in that case are distinguished from this case in being directed to rules
for lip sync and facial expression animation. The Appellant cites to DDR
Holdings, LLC v. Hotels, L.P., 773 F.3d 1245 (Fed. Cir. 2014) and argue that
the claim is “rooted in computer technology” (App. Br. 4). We disagree as
the Appellant has not shown how the claimed subject matter is rooted in
technology given that the Specification describes only the use of generic
computer equipment used in routine, conventional, and generic manner.
For these above reasons, the rejection of the claim is sustained. The
remaining claims are directed to similar subject matter for which the same
arguments have been presented and the rejection of these claims is sustained
for the same reasons given above.

CONCLUSIONS OF LAW
We conclude that Appellant has not shown that the Examiner erred in
rejecting claims 7–13 under 35 U.S.C. § 101.

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DECISION
The Examiner’s rejection of claims 7–13 is sustained.
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). See
37 C.F.R. § 41.50(f).

AFFIRMED