Christina Minnis et al.

Patent Trials and Appeals Board

Aug 26, 2019

14490356 - (D) (P.T.A.B. Aug. 26, 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.
14/490,356 09/18/2014 Christina Minnis GOLD11-00376 5052
132787 7590 08/26/2019
Docket Clerk-GOLD
P.O. Drawer 800889
Dallas, TX 75380
EXAMINER
MAGUIRE, LINDSAY M
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
08/26/2019 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):
patents@munckwilson.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte CHRISTINA MINNIS, KAREEM RAYMOND,
KATERINA SKORUPSKY, and TALAL KHAN
__________

Appeal 2018-0056491
Application 14/490,3562
Technology Center 3600
____________

Before JOSEPH A. FISCHETTI, MICHAEL A. ASTORINO, and
BRADLEY B. BAYAT, Administrative Patent Judges.

BAYAT, Administrative Patent Judge.

DECISION ON APPEAL

Appellants appeal under 35 U.S.C. § 134(a) from the Examiner’s
decision rejecting claims 1–13 and 27–39, which are all the claims pending
in the application, under 35 U.S.C. § 101 as directed to a judicial exception
without significantly more. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 Our Decision references Appellants’ Appeal Brief (“Appeal Br.,” filed
Feb. 1, 2018), Reply Brief (“Reply Br.,” filed May 9, 2018), the Examiner’s
Answer (“Ans.,” mailed Mar. 9, 2018), and Final Office Action (“Final
Act.,” mailed July 17, 2017).
2 Appellants identify “Goldman Sachs & Co. LLC” as the real party in
interest. Appeal Br. 2.
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STATEMENT OF THE CASE
Claimed Subject Matter
Appellants’ claimed invention relates to a method and apparatus for
“facilitating the structuring, issuing, valuing, and redeeming of debt
securities.” Spec. ¶ 2.
Independent claim 1, reproduced below with added bracketed lettering
and formatting, is illustrative of the subject matter on appeal.
1. A computer-implemented method comprising:
[(a)] receiving, by at least one processor via a network,
an electronic note request from a computer platform associated
with a plan sponsor to fund a pension plan using a secured
pension note, wherein the electronic note request includes a
principal amount;
[(b)] sending, by the at least one processor to a
collateral account server associated with an independent trustee
via the network, a request to open an escrow account that is to
be funded by transfers of the principal amount from the plan
sponsor, wherein the escrow account is managed by the
independent trustee in accordance with terms and conditions of
the secured pension note;
[(c)] receiving, by the at least one processor via the
network, a notification receipt from the collateral account
server after the collateral account server confirms that the plan
sponsor has funded the escrow account;
[(d)] linking, by the at least one processor upon funding
of the escrow account, a value of the secured pension note with
a funding level of the pension plan; and
[(e)] distributing, by the at least one processor at a
maturity of the secured pension note and dependent on the
value of the secured pension note, funds from the escrow
account to one or both of the pension plan and the plan sponsor.

Appeal Br. 36 (Claims App.).

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ANALYSIS
Principals 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
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk.”); see also Bilski v. Kappos, 130 S. Ct. 3218 (2010) (“Claims 1 and 4 in
petitioners’ application explain the basic concept of hedging, or protecting
against risk.”).
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. (alterations in original) (quoting Mayo,
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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.
USPTO § 101 Guidance
The USPTO recently published revised guidance on the application of
§ 101. USPTO’s 2019 Revised Patent Subject Matter Eligibility Guidance,
84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”). Under Step 2A, Prong One of
the Guidance, we determine if the claim recites a judicial exception,
including particular groupings of abstract ideas (i.e., mathematical concepts,
certain methods of organizing human activity, or mental processes). Id. at
52–53. If so, we then analyze the claim to determine whether the recited
judicial exception is integrated into a practical application of that exception
under Step 2A, Prong Two of the Guidance. Id. at 53–55; MPEP
§§ 2106.05(a)–(c), (e)–(h) (9th ed. Rev. 08.2017, Jan. 2018).
Only if the claim fails to integrate the exception and thus is “directed
to” the judicial exception, do we then look to whether the claim adds a
specific limitation beyond the judicial exception that is not well-understood,
routine, and conventional activity in the field or whether the claim simply
appends well-understood, routine, and conventional activities previously
known to the industry, specified at a high level of generality, to the judicial
exception. Guidance, 84 Fed. Reg. at 56.
Claims 1, 2, 4, 5, 10–12, 27, 28, 30, 31, and 36–38
Alice Step 1
Does claim 1 recite a judicial exception?
Under the first step of the Alice inquiry, the Examiner determined “the
claims are directed towards facilitating the structuring, issuing, valuing, and
redeeming of debt securities, to fund retirement plans,” which “is a
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fundamental economic practice and thus, the claims include an abstract
idea.” Final Act. 3. The Examiner found this to be analogous to
fundamental economic practices in Alice, Bilski, and buySAFE.3 Id. at 5.
Appellants argue independent claims 1 and 27 as a group. See Appeal
Br. 9–21. We select independent claim 1 as the representative claim for this
group, and, thus, claim 27 stands or falls with claim 1. 37 C.F.R.
§ 41.37(c)(1)(iv). Appellants do not dispute the Examiner’s characterization
of the abstract idea, but instead, argue that “the Examiner fails to establish
that the claims are directed to that idea.” Appeal Br. 9. We disagree with
Appellants for the reasons which follow.
Claim 1 recites a method comprising (a) “receiving . . . [a] note
request . . . to fund a pension plan using a secured pension note, wherein the
. . . request includes a principal amount;” (b) “sending . . . a request to open
an escrow account that is to be funded by transfers of the principal amount
from the plan sponsor, wherein the escrow account is managed by the
independent trustee in accordance with terms and conditions of the secured
pension note;” (c) “receiving . . . a notification receipt . . . after . . .
confirm[ing] that the plan sponsor has funded the escrow account;” (d)
linking . . . a value of the secured pension note with a funding level of the
pension plan; and” (e) “distributing . . . at a maturity of the secured pension
note and dependent on the value of the secured pension note, funds from the
escrow account to one or both of the pension plan and the plan sponsor.”
See Claim 1 supra.

3 buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014).
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Under the broadest reasonable interpretation of claim 1, steps (a)–(e)
describe a process of operating the funding of a retirement pension plan for
creating a contractual obligation between a plan sponsor and an independent
trustee for issuance of a secured note, which is similar to the fundamental
economic practices found by the courts to be abstract ideas (e.g., hedging in
Bilski or mitigating settlement risk in financial transactions in Alice) that
falls within the Guidance’s (b) Certain methods of organizing human
activity grouping. See Guidance 84 Fed. Reg. 52. Receiving a request from
a plan sponsor for issuance of a secured note including an amount the
sponsor desires to contribute to the plan, sending a request to open an
escrow account funded by the amount transferred, setting up an escrow in an
amount equal to the principal amount of the note as collateral, associating
the note and the collateral in escrow to the pension plan, and distributing
funds from the escrow account to one or both the pension plan and the plan
sponsor upon maturity describe the process of facilitating the structuring,
issuing, valuing, and redeeming of debt securities.
Thus, claim 1 recites a judicial exception under the Guidance’s
groupings of abstract ideas.

Is claim 1 “directed to” the recited judicial exception?
Because claim 1 recites an abstract idea, we determine whether the
recited judicial exception is integrated into a practical application.
Guidance, 84 Fed. Reg. at 51. When a claim recites a judicial exception and
fails to integrate the exception into a practical application, the claim is
“directed to” the judicial exception. Id. The claim may integrate the judicial
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exception when, for example, it reflects an improvement to technology or a
technical field. Id. at 55.
We look to the background of the Specification to assess the problems
recognized and solution advanced by Appellants, because “[t]he
‘abstract idea’ step of the inquiry calls upon us to look at the ‘focus of the
claimed advance over the prior art’ to determine if the claim’s ‘character as a
whole’ is directed to excluded subject matter.” Affinity Labs of Tex. v.
DirecTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016 (quoting Elec. Power
Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016)); see
also Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016).
According to Appellants:
Many plan sponsors that are considering making
discretionary contributions to their plans above the minimum
required levels to shore up funded status deficits are concerned
that market volatility or increases in interest rates will cause
their plans to become overfunded in a short time, trapping
excess funds in the plan; an inefficient use of funds that
ultimately benefits neither plan participants nor shareholders.
As a result, many plan sponsors may be reluctant to make large
discretionary contributions to the plans (leaving plans
underfunded or partially funded, which ultimately hurts plan
participants). Such underfunded pension plans also increase the
risk to the Pension Benefit Guaranty Corporation (PBGC)--the
independent U.S. government agency which insures private
pension plans and must pay plan participants when such plans
fail.

Spec. ¶ 18. Appellants solved this problem by providing a secured note and
relying on an escrow account that is managed by an independent trustee.
Utilizing a note and a trusted intermediary “is designed to encourage plan
sponsors to more fully fund their plans, thus increasing the security of plan
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participant benefits without leaving any resulting surplus locked into the
plan and lost to shareholders.” Id. at 19.
Appellants argue “the instant claims are more like those of Enfish . . .
since the instant claims recite a particular technique that encourages pension
plan sponsors to more fully fund their plans, thus increasing the security of
plan participant benefits without leaving any resulting surplus locked into
the plan and lost to shareholders. This represents a functionality
improvement for a system that must adapt to changing conditions.” Appeal
Br. 11. We disagree. The claimed invention provides an alternative to
funding a pension plan by utilizing a trusted intermediary, which may reflect
an improvement to the abstract idea rather than an improvement to
technology.
Using a trusted intermediary to facilitate a contractual obligation is
unlike the technology-based integration in Enfish. In Enfish, the Federal
Circuit noted “[s]oftware can make non-abstract improvements to computer
technology just as hardware improvements can[.]” Enfish, 822 F.3d at 1335.
The court asked “whether the focus of the claims is on [a] specific asserted
improvement in computer capabilities . . . or, instead, on a process that
qualifies as an ‘abstract idea’ for which computers are invoked merely as a
tool.” Id. at 1335–36. There, the “plain focus of the claims” was on an
improvement to computer functionality itself, a self-referential table for a
computer database designed to improve the way a computer carries out its
basic functions of storing and retrieving data. Id. We find no parallel
between claim 1 and the claims in Enfish, nor any comparable aspect in
claim 1 that represents an improvement to computer functionality. Unlike
Enfish, claim 1 is not focused on an improvement to computer capabilities or
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functionality (i.e., an improved processor). Cf. In re TLI Commc’ns LLC
Patent Litig., 823 F.3d 607, 613 (Fed. Cir. 2016) (The claims’ focus “was
not on an improved telephone unit or an improved server.”). There is a
fundamental difference between computer functionality improvements, on
the one hand, and uses of existing computers as tools to perform a particular
task, on the other. Appellants’ assertion that “the instant claims provide a
network-based environment that facilitates electronic communication of
secured note-related information between disparate independent actors,
which is an improved technological result” (Appeal Br. 14), is admittedly
not focused on a specific means or process that improves computer
technology, but rather, on improving the structuring, issuing, valuing, and
redeeming of debt securities, for which a computer is used as a tool in its
ordinary capacity. That the invention is implemented in a network-based
environment does not necessarily make the claim non-abstract. See
Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014)
(limiting the use of the abstract idea “to a particular technological
environment” does not make the abstract idea patent-eligible) (citation
omitted). As such, the Appellants’ alleged improvement lies in the abstract
idea itself and does not reflect any technological improvement.
We agree with the Examiner that the claimed method here is similar to
Alice. The claims at issue in Alice were to a computer system used as a
third-party intermediary. Alice, 134 S. Ct. at 2352. There, the computer
mitigated settlement risk by allowing only those transactions in which the
parties had sufficient resources to satisfy their obligations. Id. The Supreme
Court, however, held that these claims were directed to the “abstract idea of
intermediated settlement,” which is a “fundamental economic practice.” Id.
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at 2355–56. Likewise, the claims here are directed to a method that
facilitates the structuring, issuing, valuing, and redeeming of debt securities
by utilizing a secured pension note and an independent trustee. Although
claim 1 recites a “processor via a network,” this additional element does no
more than generally link the use of a judicial exception to a particular
technological environment or field of use. Appellants have not cited to any
persuasive evidence in the Specification to support the contention that the
claimed invention improves the way the processor carries out the recited
functions. Here, like the claims in Alice and other cases cited by the
Examiner (e.g., buySAFE and Bilski), claim 1 is directed to an abstract idea.
Appellants’ argument as to the lack of preemption (Appeal Br. 14–15;
Reply Br. 8) is unpersuasive. Cf. OIP Techs., Inc. v. Amazon.com, Inc., 788
F.3d 1359, 1362–63 (Fed. Cir. 2015) (“[T]hat the claims do not preempt all
price optimization or may be limited to price optimization in the e-
commerce setting do not make them any less abstract.”), cert. denied, 136 S.
Ct. 701 (2015). Although “preemption may signal patent ineligible subject
matter, the absence of complete preemption does not demonstrate patent
eligibility.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1379 (Fed. Cir. 2015). “Where a patent’s claims are deemed only to
disclose patent ineligible subject matter” under the Alice framework,
“preemption concerns are fully addressed and made moot.” Id.
On this record, we are unpersuaded that the Examiner erred in
concluding that claim 1 is directed to a judicial exception.

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Alice Step 2
Does claim 1 provide an inventive concept?
Under step two of the Alice framework, Appellants argue that the
claims include limitations that recite significantly more than the abstract idea
because “Claim 1 recites a specific process that uses specific data in a
manner never done before. Even if the individual functions in Claim 1 are
implemented using standard computer functions (such as send, receive, add,
subtract, etc.), the operations themselves recited in Claim 1 are not standard
functions.” Appeal Br. 18; see also Reply Br. 4–7. Appellants reproduce
steps (a)–(e) of claim 1 as representative of those operations. Appeal Br.
17–18. Appellants’ argument is not persuasive because “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.” BSG Tech LLC v. BuySeasons, Inc., 899 F.3d 1281,
1290 (Fed. Cir. 2018).
Appellants argue that, considering the limitations in combination,
claim 1 recites significantly more than the abstract idea. Reply Br. 10 (citing
BASCOM4). Appellants’ reliance on BASCOM is misplaced because we find
no parallel between claim 1 and the patent-eligible claims in BASCOM.
There, the Federal Circuit held that “[t]he inventive concept described and
claimed in the ’606 patent is the installation of a filtering tool at a specific
location, remote from the end-users, with customizable filtering features
specific to each end user.” BASCOM, 827 F.3d at 1350. The court
explained that the remote location of a filtering tool having customizable

4 BASCOM Global Internet Servs., Inc. v. AT&T Mobility LLC, 827
F.3d 1341 (Fed. Cir. 2016).
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user-specific filtering features provides the filtering tool both the benefits of
a filter on a local computer and the benefits of a filter on the ISP server,
which is a technical improvement over prior art ways of filtering content.
Id. at 1350–51. Here, Appellants have not demonstrated any particular
arrangement in the claim as providing an inventive concept parallel to
BASCOM’s technology-based solution.
Accordingly, we sustain the rejection of independent claim 1 under 35
U.S.C. § 101, and independent claim 27, which falls with claim 1. We also
sustain the rejection of dependent claims 2, 4, 5, 10–12, 28, 30, 31, and 36–
38, which are not argued separately.
Claims 3, 6, 7, 8, 9, 13, 29, 32, 33, 34, 35, and 39
We disagree with Appellants’ arguments that dependent claims 3, 6,
7, 8, 9, 13, 29, 32, 33, 34, 35, and 39 recite significantly more than the
abstract idea, and thus, recite patent-eligible subject matter. Appeal Br. 21–
33. In arguing against each of these dependent claims, Appellants argue that
the additional steps recited in the dependent claims ensure that the
independent claims are limited to specific techniques that do not preempt
approaches that use different techniques. See id. at 23, 25, 27, 29, 31, and
33. For example, we are unpersuaded that claims 3 and 29 recite
significantly more than the abstract idea because “the addition of
‘calculating the value of the secured pension note and sending an indication
of an updated funding level to the computer platform associated with the
plan sponsor’ to the independent claims further demonstrates that the instant
claims are clearly limited to a specific process using particular information
and techniques and do not preempt approaches that use rules of a different
structure or different techniques.” Id. at 23. As discussed, preemption is not
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a separate test for patent eligibility under Alice, because although
“preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility.” Ariosa, 788
F.3d at 1377. Although the dependent claims may limit the scope of the
abstract idea to which the independent claims are directed, their character
remains unchanged, especially given that these dependent claims provide no
insight to improvements in computer functionality beyond what one would
expect from using a generic computer as a tool in performing the scheme as
claimed. None of these claims add anything significantly more to transform
the abstract idea. Thus, Appellants have not persuaded us that the Examiner
erred in rejecting these claims as being directed to patent-ineligible subject
matter. Therefore, we sustain the rejection of claims 3, 6, 7, 8, 9, 13, 29, 32,
33, 34, 35, and 39 under 35 U.S.C. § 101.

DECISION
The Examiner’s rejection 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).

AFFIRMED