Anthony A. RenshawDownload PDFPatent Trials and Appeals BoardJul 29, 201914495470 - (D) (P.T.A.B. Jul. 29, 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. 14/495,470 09/24/2014 Anthony A. Renshaw 166.0019 3038 27997 7590 07/29/2019 Hultquist IP P.O. Box 14329 Research Triangle Park, NC 27709 EXAMINER GREGG, MARY M ART UNIT PAPER NUMBER 3697 NOTIFICATION DATE DELIVERY MODE 07/29/2019 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): hip@hultquistip.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________________ Ex parte ANTHONY A. RENSHAW1 __________________ Appeal 2018-006737 Application 14/495,470 Technology Center 3600 ____________________ Before MICHAEL L. HOELTER, JAMES P. CALVE, and MICHAEL L. WOODS, Administrative Patent Judges. CALVE, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Appellant appeals under 35 U.S.C. § 134(a) from the decision of the Examiner finally rejecting claims 1–33 as directed to patent-ineligible subject matter under a judicial exception to 35 U.S.C. § 101.2 Appeal Br. 2. We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. 1 Axioma, Inc. is identified as the real party in interest. Appeal Br. 1. 2 The prior art rejections of claims 1–33 are withdrawn. See Ans. 3. Appeal 2018-006737 Application 14/495,470 2 CLAIMED SUBJECT MATTER Claims 1, 9, 17, 23, 29, and 33 are independent. Claim 1 is below. 1. A computer-implemented method for computing and reporting the performance attribution of a set of portfolio holdings over time comprising: electronically receiving and storing by the programmed computer a set of dates defining an attribution time horizon to be analyzed; for each date, electronically receiving and storing by the programmed computer a historical portfolio of holdings having investment weights in a set of investible assets; for each date, electronically receiving and storing by the programmed computer an original factor risk model modeling each investible asset in the historical portfolio of holdings as of that date, the original factor risk model comprising at least a set of factors, an original factor exposure matrix, and an original vector of factor returns; for each date, electronically receiving and storing by the programmed computer a partitioning of the investible assets as of that date into two or more partitioning groups such that each investible asset belongs to one and only one of the partitioning groups; for each date, electronically receiving and storing by the programmed computer a subset of factors to be partitioned which includes at least one original factor; for each date, electronically calculating and storing by the programmed computer for the subset of factors to be partitioned a set of partitioned factor contributions, each partitioned factor contribution corresponding to a partitioning group, each partitioned factor contribution being computed as a sum of a product of an investment asset weight for an asset in the partitioning group, an asset exposure from the original factor exposure matrix, and a factor return from the original factor return vector; computing a performance attribution analysis for the historical portfolios of holdings based on the partitioned factor contributions for each date; and Appeal 2018-006737 Application 14/495,470 3 electronically outputting the performance attribution results using an output device. ANALYSIS Subject Matter Eligibility of Claims 1–33 The Patent Laws provide “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C. § 101. However, “this provision contains an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014) (internal quotation and citation omitted). Because “all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas,” a framework was set forth to distinguish patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of these concepts. Id. at 217 (quoting Mayo Collaborative Serv. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012)). First, it is determined whether claims at issue are directed to a patent-ineligible concept. Id. If so, the elements of each claim are considered, both individually and as an ordered combination, to determine if there are additional elements that transform the nature of the claim into a patent eligible application, e.g., by providing an “inventive concept” that ensures the patent amounts to significantly more than a patent on the ineligible concept itself. Id. at 217–218 (internal quotation and citation omitted). Appeal 2018-006737 Application 14/495,470 4 Recently, the USPTO issued guidance about this framework. See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Revised Guidance”). To determine whether a claim is “directed to” an abstract idea, we evaluate whether the claim recites one of the judicial exceptions (law of nature, natural phenomenon, or abstract idea) and, if so, whether the recited judicial exception is integrated into a practical application, e.g., by applying, relying on, or using the judicial exception in a manner that imposes a meaningful limit on the judicial exception. Id. at 53. If a claim does not recite a judicial exception, or if it integrates a judicial exception into a practical application, the claim is patent eligible. Id. at 54. A claim that recites a judicial exception and does not integrate the judicial exception into a practical application is “directed to” the judicial exception, but the claim may recite additional elements that render the claim patent eligible. Id. at 56. Additional elements are evaluated individually and in combination to determine whether they provide an inventive concept that amounts to significantly more than the exception itself so that the claim is patent eligible. Id. A claim that adds a specific limitation or combination of limitations that are not well-understood, routine, conventional activity in the field is indicative that an inventive concept may be present. Id. A claim that appends well-understood, routine, conventional activities previously known to the industry and specified at a high level of generality to a judicial exception is indicative that an inventive concept may not be present. Id. With respect to the present appeal and rejection of claims 1–33 as directed to a judicial exception under 35 U.S.C. § 101, Appellant argues the claims as a group. Appeal Br. 23–28. We select claim 1 as representative. See 37 C.F.R. § 41.37(c)(1)(iv). Appeal 2018-006737 Application 14/495,470 5 Step 2A, Prong One: Does Claim 1 Recite a Judicial Exception? The Examiner determines claim 1 recites a software method rooted in mitigation of risk, which the courts have held to be fundamental economic practices and abstract ideas.3 Final Act. 31–33. The Examiner determines that the method computes performance attribution analysis for determining portfolio performance (analysis and modelling of economic transactions to determine returns and performance of financial portfolios), and the process is a fundamental economic practice like hedging financial risk in Bilski and intermediated settlement in Alice. Id. at 32–33; see Alice, 573 U.S. at 219– 20; Bilski v. Kappos, 561 U.S. 609, 611 (2010). The Revised Guidance extracts and synthesizes key concepts identified by the courts as abstract ideas into the following three groups: (a) Mathematical concepts— mathematical relationships, mathematical formulas or equations, mathematical calculations; (b) Certain methods of organizing human activity— fundamental economic principles or practices (including hedging, insurance, mitigating risk); commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations); managing personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions); and (c) Mental processes—concepts performed in the human mind (including an observation, evaluation, judgment, opinion). Revised Guidance, 84 Fed. Reg. at 52. 3 The Examiner’s determination that the method of claim 1 is directed to a statutory eligibility category of a “process” satisfies Step 1 of the Revised Guidance. Final Act. 31; see Revised Guidance, 84 Fed. Reg. at 53–54. Appeal 2018-006737 Application 14/495,470 6 We agree with the Examiner. Claim 1 recites: (1) certain methods of organizing human activity––fundamental economic principles or practices of mitigating risk and (2) mathematical concepts––mathematical relationships, mathematical formulas or equations, mathematical calculations. Id. at 52; Final Act. 11 (the claims are directed to the abstract concept of calculating risk), 31–33 (the claims are rooted in the fundamental economic practice of risk mitigation and computing performance attribution analysis to determine portfolio performance); Ans. 3–4 (the claims recite computing and reporting of performance attributions of portfolio holdings together with risk factor contributions for the holdings by outputting results of a financial algorithm). The following limitations of claim 1 recite these abstract ideas. In the preamble, a “computer-implemented method for computing and reporting the performance attribution of a set of portfolio holdings over time” recites mathematical concepts––mathematical relationships, mathematical formulas or equations, and mathematical calculations and certain methods of organizing human activity––fundamental economic principles or practices including mitigating risk. This method is one for calculating factor-based performance attribution results for investment portfolios using factor risk models. Spec. 1:5–6. The factor-based performance attribution explains historical sources of return of a portfolio and identifies portfolio exposures or bets that perform well or under-perform so portfolio performance can be improved. Id. at 1:12–19. The “historical portfolio of holdings having investment weights in a set of investible assets” also recites mathematical concepts discussed above. The Specification gives an example of weighting as “exponential weighting” used to compute the covariance and variance. Id. at 15:15–22. Appeal 2018-006737 Application 14/495,470 7 Reciting “an original factor risk model modeling each investible asset in the historical portfolio of holdings as of that date, the original factor risk model comprising at least a set of factors, an original factor exposure matrix, and an original vector of factor returns” also recites mathematical concepts and methods of organizing human activity with fundamental principles or practices of risk mitigation. The Specification describes the mathematical concepts, formulas, equations, and calculations used to calculate the factor risk model, exposure matrix, and vector or return factors. Id. at 13:17–28:4. The clamed “partitioning of the investible assets . . . into two or more partitioning groups such that each investible asset belongs to one and only one of the partitioning groups” with “a subset of factors to be partitioned which includes at least one original factor” recite mathematical concepts and relationships. The Specification discloses the mathematical relationships, formulas, equations, and calculations that are used in this partitioning or “factor splitting” with at least one original factor. Id. at 28:5–30:31; see Appeal Br. 5–7 and portions of the Specification cited therein. The claimed “subset of factors to be partitioned a set of partitioned factor contributions, each partitioned factor contribution corresponding to a partitioning group, each partitioned factor contribution being computed as a sum of a product of an investment asset weight for an asset in the partitioning group, an asset exposure from the original factor exposure matrix, and a factor return from the original factor return vector” also recites mathematical concepts, formulas, equations, and calculations and methods of organizing human activity including fundamental economic principles or practices of risk mitigation. See Appeal Br. 7–8 and Specification citations provided therein. Appeal 2018-006737 Application 14/495,470 8 The limitation “computing a performance attribution analysis for the historical portfolios of holdings based on the partitioned factor contributions for each date” also involves mathematical concepts, equations, calculations, and formulas. See Appeal Br. 7–9. Step 2A, Prong Two: Is There Integration into a Practical Application? The Examiner determines that claim 1 is directed to abstract ideas of risk calculation with mathematical formulas rather than improving computer technology, and individual elements involve collecting and analyzing data at a high level of generality with generic computers and generic functions. See Final Act. 11, 33–42. The Examiner determines the ordered combination of elements is directed to gathering and identifying data for use in an algorithm to model and calculate risk rather than improving another technology or technical field and uses computers as tools. Id. at 12–15, 42–43. Appellant argues that the present invention “relates to improved computer based systems, methods, and software for calculating performance attribution results using more granular factors than are present in the original factor risk mode.” Appeal Br. 24 (quoting Spec. 1:7–9). Appellant argues that “the present invention provides new tools that allow ‘portfolio managers to split the original risk model factors into more granular factors that cover smaller subsets of the assets in the portfolio.’” Id. at 25 (quoting Spec. 5:4– 6). Appellant also argues that the claimed approach does not preempt other and different “mitigation of risk” of “performance attribution” strategies. Id. at 25–26. Appellant further argues that the present invention is necessarily rooted in computer technology and addresses problems in existing factor attribution strategies by providing advantageous techniques for adapting accordingly. Id. at 26–28. Appeal 2018-006737 Application 14/495,470 9 We determine that claim 1 as a whole does not integrate the recited judicial exceptions into a practical application. See Revised Guidance, 84 Fed. Reg. at 54. Additional elements recited in claim 1 beyond the abstract ideas discussed above do not integrate the ideas into a practical application. See id. at 54–55. The steps of “electronically receiving and storing by the programmed computer a set of dates defining an attribution time horizon to be analyzed,” or “an original factor risk model,” or “a partitioning of the investible assets as of that date,” or “a subset of factors to be partitioned” all add insignificant extra-solution activity to the judicial exception in the form of “mere data gathering.” Id. at 55 & n.31; see Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353–54 (Fed. Cir. 2016) (holding that steps of data collection and analysis, without more, are not sufficient to make an abstract idea patent eligible). The final claimed step of “electronically outputting the performance attribution results using an output device” recites insignificant extra-solution activity that does not integrate the abstract ideas into a practical application. Revised Guidance, 84 Fed. Reg. at 55 & n.31; see MPEP § 2106.05(g). The asserted improvements to computer based systems, methods, and software of calculating performance attribution results with more granular factors than are present in the original factor risk mode and providing new tools that allow portfolio managers to split the original risk model factors into more granular factors that cover smaller subsets of the assets in the portfolio (Appeal Br. 24–25) pertain to the abstract ideas identified above. See RecogniCorp, LLC v. Nintendo Co., Ltd., 855 F.3d 1322, 1327 (Fed. Cir. 2017) (“Adding one abstract idea (math) to another abstract idea (encoding and decoding) does not render the claim non-abstract.”). Appeal 2018-006737 Application 14/495,470 10 Even if claim 1 recites a new combination of abstract ideas, that combination does not provide an additional limitation or inventive step to ingrate the abstract ideas into a practical application. See Mayo, 566 U.S. at 88–90 (the patent eligibility of an abstract idea does not depend on its alleged novelty or non-obviousness); SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163, 1170 (Fed. Cir. 2018) (“No matter how much of an advance in the finance field the claims recite, the advance lies entirely in the realm of abstract ideas, with no plausibly alleged innovation in the non- abstract application realm. An advance of that nature is ineligible for patenting.”; holding that the invocation of computers and networks that are not inventive does not establish an “inventive concept” and using such computers to carry out improved mathematical calculations recites what is well-understood, routine, and conventional); Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016) (“But, a claim for a new abstract idea is still an abstract idea.”); Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1335 (Fed. Cir. 2015) (claims that improved an abstract idea, but not a computer’s performance are unpatentable). Applying the abstract ideas in a generic computer environment uses computers as tools to perform abstract ideas. Ans. 3–4; see Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1345 (Fed. Cir. 2013) (“Accenture attempts to limit the abstract idea of claim 1 by applying it in a computer environment and within the insurance industry. However, those types of limitations do not ‘narrow, confine, or otherwise tie down the claim.’ . . . [S]imply implementing an abstract concept on a computer, without meaningful limitations to that concept, does not transform a patent- ineligible claim into a patent-eligible one.”); Alice, 573 U.S. at 223 (same). Appeal 2018-006737 Application 14/495,470 11 Claim 1 recites no elements that improve computers or technology, that implement abstract ideas on a particular machine integral to the claim, or that transform a particular article to a different state or thing. See Revised Guidance, 84 Fed. Reg. at 55; see also MPEP §§ 2106.05(b), 2106.05(c); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011) (“The mere manipulation or reorganization of data . . . does not satisfy the transformation prong.”). Claim 1 applies the abstract ideas on generic computers that perform generic functions. MPEP § 2106(b); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716–17 (Fed. Cir. 2014) (applying abstract ideas with generic computer functions is not tied to a particular machine). The system comprises a computer or mobile device such as a personal computer, workstation, or server that connects to a server or other computer via an Internet, local area network, or wireless connection. Spec. 12:4–17. Standard input and output devices are used with a personal computer with Windows 7 or a Linux-based server system. Id. at 12:18–13:13. Contrary to Appellant’s argument (Appeal Br. 26), the invention is not rooted in computer technology, and DDR Holdings and McRO illustrate this distinction. DDR dealt with a computer- and Internet-specific problem of websites losing visitors to third-party merchants when visitors clicked on a third-party merchant’s advertisement on a host site. DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1248 (Fed. Cir. 2014). The claimed system generated a new, composite web page that retained the look and feel of the host website while displaying product information of a third-party merchant. Id. at 1248–49. Here, claim 1 recites steps of gathering portfolio holdings with a mathematical original factor risk model for each investible asset and then partitioning the assets into smaller groups for more analysis. Appeal 2018-006737 Application 14/495,470 12 Similarly in McRO, Inc. v. Bandai Namco Games America, Inc., 837 F.3d 1299 (Fed. Cir. 2016), the claims focused on a concrete improvement in the field of computer animation. The claimed process used a combined order of specific rules that render information into a specific format that was used and applied to create a desired result––a sequence of synchronized, animated characters. McRO, 837 F.3d at 1314–15. The claims recited a process of automated lip-synchronization of 3-D characters resulting from a specific order of rules as a relationship between sub-sequences of phonemes, timing, and weight of visual expression at a particular timing by a morph weight set. Id. at 1315. Here, claim 1 recites steps of data manipulation without a concrete, physical transformation of portfolios or investible assets. In Amdocs, the claims recited accounting information correlated to a network accounting record used to enhance the first network accounting record based on the invention’s distributed architecture that apply a number of field enhancements in a distributed fashion that represented a critical advance over the prior art by solving a technological problem of massive record flows that previously required massive databases. Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1300–01 (Fed. Cir. 2016). Here, claim 1 recites receiving and storing information for analysis using the abstract concepts discussed above. None of these judicial exceptions or the additional steps improve computers, networks, or any other technology. See SAP Am., 898 F.3d at 1167, 1168 (holding that claims to mathematical techniques to perform statistical analysis on investment data and displaying the results were abstract ideas that did not improve computers or networks, but improved abstract concepts of mathematical analysis and used computers as tools); MPEP § 2106.05(a). Appeal 2018-006737 Application 14/495,470 13 Applying the abstract ideas on a “programmed computer” and “output device” is not an integration. See Alice, 573 U.S. at 223 (“[M]ere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.”) (quoting Mayo, 566 U.S. at 72); Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Canada (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012) (“To salvage an otherwise patent-ineligible process, a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not.”); Versata, 793 F.3d at 1335 (“the claims at issue do not transform a general purpose computer into a specific machine . . . .. They involve the normal, basic functions of a computer.”); MPEP § 2106.05(c).4 Step 2B: Does Claim 2 Recite an Inventive Concept? We next consider whether claim 1 recites elements, individually or as an ordered combination, which provide an inventive concept. Alice, 573 U.S. at 217–18. This step is satisfied when claim limitations involve more than performance of well-understood, routine, [and] conventional activities previously known to the industry. Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018) (internal quotations and citation omitted); Revised Guidance, 84 Fed. Reg. at 56 (explaining that the second step of the Alice analysis considers whether a claim adds a limitation beyond a judicial exception that is not “well-understood, routine, conventional” activity). 4 See also Finjan, Inc. v. Blue Coat Systems, Inc., 879 F.3d 1299, 1305 (Fed. Cir. 2018) (quoting Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016)) wherein the court stated, “In Enfish, for instance, the court determined that claims related to a database architecture that used a new, self-referential logical table were nonabstract because they focused on ‘an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity.’” Appeal 2018-006737 Application 14/495,470 14 Individually, the limitations of claim 1 recite abstract ideas discussed above or extra-solution activities of mere data gathering and displaying the results of the abstract mathematical concepts, formulas, and calculations. As an ordered combination, a new combination of abstract ideas is not an inventive concept. See SAP, 898 F.3d at 1163 (“No matter how much of an advance in the finance field the claims recite, the advance lies entirely in the realm of abstract ideas, with no plausibly alleged innovation in the non- abstract application realm. An advance of that nature is ineligible for patenting.”); 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.”); Final Act. 11 (calculating risk does not improve computers). Linking the abstract ideas to a particular environment using generic computers to receive and store data and display results of calculations that are abstract ideas does not impose a meaningful limit on the abstract ideas. Ans. 4–5; Digitech Image Techs, LLC v. Elec. for Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014) (“Without additional limitations, a process that employs mathematical algorithms to manipulate existing information to generate additional information is not patent eligible. ‘If a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is nonstatutory.’”) (internal citation omitted); Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1084, 1093–94 (Fed. Cir. 2019) (holding that the claims did not transform routine data gathering and display of market information on a scaled price axis or improve computer functionality to provide an inventive concept). Appeal 2018-006737 Application 14/495,470 15 Arguments about preemption (Appeal Br. 14–15) are resolved by our § 101 analysis. Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015); see also Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017) (where patent claims are deemed patent ineligible, “preemption concerns are fully addressed and made moot”); see Ans. 5–6; Final Act. 3–5. For all the foregoing reasons, we sustain the rejection of claim 1 and claims 2–33, which fall therewith, as directed to patent-ineligible subject matter under 35 U.S.C. § 101. DECISION We affirm the rejection of claims 1–33 as directed to patent-ineligible subject matter under a judicial exception to 35 U.S.C. § 101. 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. § 1.136(a)(1)(iv); 37 C.F.R. § 41.50(f). AFFIRMED Copy with citationCopy as parenthetical citation