Robert William. Graham et al.

Patent Trials and Appeals Board

Jul 31, 2019

13730999 - (D) (P.T.A.B. Jul. 31, 2019)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
13/730,999 12/29/2012 Robert William Graham Graham007 4102
25179 7590 07/31/2019
A PATENT LAWYER, LLC
R WILLIAM GRAHAM
8586 Eagle Ridge
Springboro, OH 45066
EXAMINER
DANZIG, REVA R
ART UNIT PAPER NUMBER
3687
NOTIFICATION DATE DELIVERY MODE
07/31/2019 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):
billg@apat1.com
info@apat1.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte ROBERT WILLIAM GRAHAM and DAVID B. JOHNSON
____________

Appeal 2018-006595
Application 13/730,9991
Technology Center 3600
____________

Before DONALD E. ADAMS, ERIC B. GRIMES, and DEBORAH KATZ,
Administrative Patent Judges.

Opinion for the Board filed by Administrative Patent Judge ADAMS.
Opinion dissenting filed by Administrative Patent Judge KATZ.
ADAMS, Administrative Patent Judge.

DECISION ON APPEAL
This Appeal under 35 U.S.C. § 134(a) involves claims 22–26 (Final
Act.2 2; see App. Br. 1). Examiner entered a rejection under 35 U.S.C.
§ 101. We have jurisdiction under 35 U.S.C. § 6(b).
We REVERSE.

1 Appellants identify “Robert William Graham and David Johnson” as the
real parties in interest (Appellants’ September 19, 2017 Appeal Brief (App.
Br.) 1).
2 Examiner’s November 4, 2016 Final Office Action.
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STATEMENT OF THE CASE
Appellants’ disclosure relates to “an improved method of tracking
expenses. More particularly, the invention is directed to a system and
process for tracking expenses employing in part a hand held computer.”
(Spec. 1: 4–6). Appellants’ sole independent claim, claim 22, is
representative and reproduced below:
22. A system for processing a transaction by a user at a
transaction point, the system comprising:
a processor disposed at the transaction point, the processor
being configured to detect an initiation of the transaction by the
user and generate transaction information data corresponding to
the transaction;
a communication device associated with the processor, the
communication device configured to transmit the transaction
information data;
a remote processor configured to receive the transaction
information data and store the transaction information data in a
database; and
a hand held device disposed in communication with the
communication device, the hand held device configured to:
store transaction authority data;
receive the transaction information data from the
communication device;
enable the transaction at the transaction point based on the
transaction information data and the transaction authority data;
automatically displaying and prompting a user on said hand
held device at said transaction point for tagging said transaction
data at said transaction point as one of personal or business with
tagging to a particular client, creating tagged transaction
information data,
receive a user input indicative of the transaction being one of a
personal transaction or a business transaction with tagging to a
particular client; and
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transmit the user input to the remote processor,
wherein the remote processor is further configured to tag the
stored transaction information data in the database based on the
user input as one of a personal transaction or a business
transaction thereby transforming transaction information data
on said remote database through electronic communication
therebetween.
(App. Br. 17–18.)

Claims 22–26 stand rejected under 35 U.S.C. § 101.

ISSUE
Does the preponderance of evidence of record support Examiner’s
finding that Appellants’ claimed invention is directed to patent ineligible
subject matter?
PRINCIPLES OF LAW
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,
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
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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, 191
(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 (1853))); and manufacturing flour (Gottschalk, 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 to limit the use of the formula to a particular technological
environment.” Id. (citing Gottschalk and Parker); see, e.g., id. at 187 (“It is
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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.”).
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 (quotation marks omitted). “A
claim that recites an abstract idea must include ‘additional features’ to
ensure ‘that the [claim] is more than a drafting effort designed to
monopolize the [abstract idea].’” Id. (quoting Mayo, 566 U.S. at 77).
“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
that abstract idea into a patent-eligible invention.” Id.
The PTO recently published revised guidance on the application of
§ 101. USPTO, 2019 Revised Patent Subject Matter Eligibility Guidance,
84 Fed. Reg. 50 (January 7, 2019) (“Revised Guidance”). Under that
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)).
See 84 Fed. Reg. 54–55. 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:
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(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 84 Fed. Reg. 51.
ANALYSIS
The Revised Guidance instructs us first to determine whether any
judicial exception to patent eligibility is recited in the claim. The Revised
Guidance identifies three judicially-excepted groupings identified by the courts
as abstract ideas: (1) mathematical concepts, (2) certain methods of organizing
human behavior such as fundamental economic practices, and (3) mental
processes.
Examiner finds that Appellants’ expense tracking system comprises
“the steps of generating transaction information; transmitting the transaction
information; receiving and storing the transaction information in a database;
and sending transaction data to a hand held device, that automatically
prompts a user to tag the data as one of personal or business,” which
represent a system/method of organizing human activity, such as
fundamental economic practices, and, as such, is an abstract idea (Ans.3 7;
see also id. at 4–5). See Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611.
We agree with the Examiner’s finding.
Having determined that Appellants’ claim 1 recites a judicial
exception, the Revised Guidance directs us to next consider whether the
claims integrate the judicial exception into a practical application. On this

3 Examiner’s January 11, 2018 Answer.
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record, Appellants’ claim 22 does not integrate the abstract idea, i.e., the
system/method of organizing human activity, into a practical application.
For example, the steps of Appellants’ claimed system do not improve the
underlying computer/processor, because those steps require only a generic
computer/processor (see Ans. 3–4; see also id. at 6). In this regard, we note
that the limitations of Appellants’ claim 22 that require the processing of a
transaction by a user at a transaction point, wherein transactions are tagged
as either personal or business transactions, are not an improvement to
technology. See MPEP § 2106.05(a) (“Improvements to the Functioning of
a Computer or to Any Other Technology or Technical Field”); see also, e.g.,
McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1316 (Fed.
Cir. 2016) (holding that the claim in that case is directed to a technological
improvement over existing 3-D animation techniques and, therefore, not
directed to an abstract idea); BASCOM Global Internet Servs., Inc. v. AT&T
Mobility LLC, 827 F.3d 1341, 1351 (Fed. Cir. 2016) (holding that the ‘606
patent is claiming a technology-based solution (not an abstract idea based
solution) to filter content on the Internet that overcomes existing problems
with other Internet filtering systems). Further, the system of Appellants’
claim 22 does not transform matter; to the contrary, Appellants’ system, at
best, transforms information, i.e., data. See MPEP § 2106.05(c); see also
Gottschalk, 409 U.S. at 71–72 (holding that a computer based algorithm that
merely transforms data from one form to another is not patent-eligible).
Having determined that the judicial exception is not integrated into a
practical application, the Revised Guidance requires us to evaluate the
additional elements of Appellants’ claimed invention, individually and in
combination, to determine whether they provide an inventive concept, such
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as a specific limitation beyond the judicial exception that is not well-
understood, routine, and conventional in the field, or instead simply appends
well-understood, routine, conventional activities previously known to the
industry, specified at a high level of generality, to the judicial exception.
See 84 Fed. Reg. 51. “Whether something is well-understood, routine, and
conventional to a skilled artisan at the time of the patent, however, is a
factual determination.” Berkheimer v. HP Inc., 881 F.3d 1360, 1369 (Fed.
Cir. 2018). On this record, Examiner finds:
The prior art of record neither anticipates nor renders
oblivious [sic] a system for processing a transaction by a user at
a transaction point, the system comprising:
a hand held device disposed in communication with the
communication device the hand held device configured to:
automatically displaying and prompting a user on said
hand held device at said transaction point for tagging said
transaction data at said transaction point as one of personal or
business with tagging to a particular client, creating tagged
transaction information data,
receive a user input indicative of the transaction being of
a personal transaction or a business transaction with tagging to
a particular client; and
wherein the remote processor is further configured to tag
the stored transaction information data in the database based on
the user input as one of a personal transaction or a business
transaction thereby transforming transaction information data
on said remote database through electronic communication
therebetween.
(Final Act. 7–8.) In support of the foregoing finding, Examiner surveys the
prior art of record and finds that “Keld[4] fails to disclose automatically
displaying a prompt at the transaction point for tagging the transaction as

4 Keld, US 2009/0150265 A1, published June 11, 2009.
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personal or business transaction and transforming the data based on the user
input,” “Ho[5] fails to teach configuring the stored data based on a user input
indicating a transaction as personal or business,” and “Rathbun[6] fails to
teach that the automatically prompted input is to tag a transaction as one of
personal or business with tagging to a particular client” (id. at 8). Thus, on
this record, Examiner evaluated the additional elements of Appellants’
claimed invention individually, and in combination, and made a factual
determination that the additional elements of Appellants’ claimed invention
provide an inventive concept, such as a specific limitation beyond the
judicial exception that is not well-understood, routine, and conventional in
the field (id. at 7–8; see also App. Br. 6 (“No such single or multiple
components existed to perform the task claimed by the instant claimed
invention”)).
Therefore, we are compelled to reverse the rejection of record.
CONCLUSION OF LAW
The preponderance of evidence of record fails to support Examiner’s
finding that Appellants’ claimed invention is directed to patent ineligible
subject matter. The rejection of claims 22–26 under 35 U.S.C. § 101 is
reversed.
REVERSED

5 Ho, US 2012/0143702 A1, published June 7, 2012.
6 Rathbun, US 2012/0144461 A1, published June 7, 2012.

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte ROBERT WILLIAM GRAHAM and DAVID B. JOHNSON
____________

Appeal 2018-006595
Application 13/730,999
Technology Center 3600
____________

Before DONALD E. ADAMS, ERIC B. GRIMES, and DEBORAH KATZ,
Administrative Patent Judges.

KATZ, Administrative Patent Judge, dissenting.

DECISION ON APPEAL
I respectfully dissent from my colleagues’ reversal of the rejection
under 35 U.S.C. § 101 in this case.
I agree with my colleagues that, for the reasons articulated, the
expense tracking system of Appellants’ claim 22 is directed to the abstract
idea of a method of organizing human activity, such as a fundamental
economic practice. I also agree with my colleagues that, again for the
reasons articulated, claim 22 does not integrate this abstract idea into a
practical activity.
I disagree with my colleagues that because the Examiner found the
prior art of record does not anticipate or render obvious the hand held device
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of the system of claim 22 (see Ans. 7–8), the claims must be drawn to
eligible subject matter.
The Supreme Court cautioned that even though the § 101 patent-
eligibility inquiry and prior art inquiries might sometimes overlap, “to shift
the patent-eligibility inquiry entirely to these later sections risks creating
significantly greater legal uncertainty, while assuming that those sections
can do work that they are not equipped to do.” Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 566 U.S. 66, 90 (2012). See also Diamond v. Diehr,
450 U.S. 175, 188–89 (1981) (“[t]he ‘novelty’ of any element or steps in a
process, or even of the process itself, is of no relevance in determining
whether the subject matter of a claim falls within the § 101 categories of
possibly patentable subject matter.”). Putting this into practice, the Federal
Circuit has held that “a claim for a new abstract idea is still an abstract idea.
The search for a § 101 inventive concept is thus distinct from demonstrating
§ 102 novelty.” Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138,
1151 (Fed. Cir. 2016) (holding claims to a method for converting a
hardware-independent user description of a logic circuit are ineligible
because the use of assignment conditions as an intermediate step in the
translation process is an aid to a mental process and does not change the
nature of the claims to being directed to more than an abstract idea).
Rather than review whether the claims are patentable over the prior
art, the rejection before us requires us to answer the question of whether the
patent claims add enough to the judicial exception of the abstract idea to
allow the processes they describe to qualify as patent-eligible processes that

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apply the abstract idea. See Mayo, 566 U.S. at 77. The Revised Guidance
instruct us that
if a claim has been determined to be directed to a judicial exception
under revised Step 2A, examiners should then evaluate the additional
elements individually and in combination under Step 2B to determine
whether they provide an inventive concept (i.e., whether the additional
elements amount to significantly more than the exception itself).
84 Fed. Reg. 56.
The Examiner determined that the claims include the “additional
limitations” performed on the hand held device of automatically prompting a
user to tag the transaction information as personal or business and receiving
and transmitting the tagged transaction data to a remote processor. See Ans.
8. But the Examiner also determined that
[t]he use of multiple devices working together to perform
authorization of a transaction and tagging of data at the
contemporaneous point of the transaction do not amount to
significantly more than concepts relating to processes or organizing
information that can be performed mentally such as using categories
to organize, store, and transmit as similarly found in Cyberfone.
Id., citing Cyberfone Sys., LLC v. CNN Interactive Group, Inc., 558 Fed.
Appx. 988 (Fed. Cir. 2014).
I agree with the Examiner because the Examiner found that the
difference between the hand held device claimed and those in the three prior
art references noted are that the prior art fails to contemplate user
determinations that a transaction is personal and business. See Final Office
Action 7–8. This difference does not transform Appellants’ system into
more than the abstract idea of organizing human activity, such as a
fundamental economic practice.
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Accordingly, the Examiner did not err in rejecting the claims before
us under 35 U.S.C. § 101 and I respectfully dissent from the majority
opinion.