Ex Parte Calabria et al

Patent Trial and Appeal Board

Mar 28, 2014

10743520 (P.T.A.B. Mar. 28, 2014)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
10/743,520 12/19/2003 Hermann Calabria A3360Q1USNP-XER00688US01 7681
27885 7590 03/28/2014
FAY SHARPE LLP
1228 Euclid Avenue, 5th Floor
The Halle Building
Cleveland, OH 44115
EXAMINER
SORKOWITZ, DANIEL M
ART UNIT PAPER NUMBER
3681
MAIL DATE DELIVERY MODE
03/28/2014 PAPER
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.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte HERMANN CALABRIA, FRANCINE R. CHEN,
AYMAN O. FARAHAT, and DANIEL H. GREENE
____________

Appeal 2011-012292
Application 10/743,520
Technology Center 3600
____________

Before MURRIEL E. CRAWFORD, MEREDITH C. PETRAVICK, and
MICHAEL W. KIM, Administrative Patent Judges.

CRAWFORD, Administrative Patent Judge.

DECISION ON APPEAL

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STATEMENT OF THE CASE
Appellants seek our review under 35 U.S.C. § 134 of the Examiner’s
final decision rejecting claims 1-21, 23-52, and 55-60. We have jurisdiction
over the appeal under 35 U.S.C. § 6(b).
We AFFIRM-IN-PART.

BACKGROUND
Appellants’ invention is directed to keyword advertising associated
with an Internet search engine in response to a keyword query submitted by
a user (Spec., para. [0001]).
Claim 1 is illustrative:
1. A server-based method of submitting a plurality of bids
to a competitive bidding process for an advertiser for placement
of at least one advertisement, the method including:
a) selecting at least one candidate advertisement
associated with the advertiser for subsequent placement in
search results lists;
b) selecting an initial plurality of candidate keywords;
c) expanding the initial plurality of candidate keywords
selected in b) based at least in part on the at least one candidate
advertisement selected in a) to form an expanded plurality of
candidate keywords;
d) creating an advertisement-keyword pair for each
candidate advertisement selected in a) and each candidate
keyword, wherein each advertisement-keyword pair includes
one or more keywords of the expanded plurality of candidate
keywords resulting from c);
e) estimating a click-through rate for each advertisement-
keyword pair created in d);
f) calculating a return on advertising investment (ROAI)
for each advertisement keyword pair created in d) based at least
in part on the corresponding click-through rate estimated in e);
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g) calculating an optimized bid for each advertisement-
keyword pair created in d) based at least in part on the
corresponding ROAI calculated in f); and
h) automatically submitting the optimized bids for each
advertisement-keyword pair calculated in g) to the competitive
bidding process for placement of each candidate advertisement
selected in a) in search results lists generated in response to
search queries comprising at least one keyword of the expanded
plurality of candidate keywords resulting from c).

Appellants appeal the following rejections:
Claims 1-21, 23-52, 55, 56, and 58-60 rejected under 35 U.S.C. § 101
as being directed to non-statutory subject matter.
Claims 40 and 41 rejected under 35 U.S.C. § 102(e) as being
anticipated by Skinner (US 2003/0105677 B1; pub. Jun. 5, 2003).
Claims 1-21, 23-39, 42-52, and 55-59 rejected under 35 U.S.C.
§ 103(a) as being unpatentable over Skinner and Paine (US 2003/0055816
A1; pub. Mar. 20, 2003).
Claim 60 rejected under 35 U.S.C. § 103(a) as being unpatentable
over Skinner, Paine, and Phelan (US 2004/0093296 A1; pub. May 13, 2004).

ANALYSIS
Non-Statutory Subject Matter
Appellants argue that the rejection of claim 1 under 35 U.S.C. § 101 is
improper because “at least one of elements e) through h) (i.e., estimating a
click-through rate, calculating an ROAI, calculating an optimized bid, and
automatically submitting the optimized bid) of claim 1 inherently require a
computer or a processor to be performed” (App. Br. 14-16; Reply Br. 2-3).
In contrast, referencing the machine-or-transformation test, the Examiner
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maintains that the rejection is proper because the method steps can be
performed by a human being and no use of a computer is recited by the
claim (Ans. 4 and 31-32).
The Supreme Court clarified in Bilski that the machine-or-
transformation test “is not the sole test for deciding whether an invention is a
patent-eligible ‘process’ under § 101.” Yet the Court explained that this test
remains a “useful and important clue [or] investigative tool.” See Bilski v.
Kappos, 130 S. Ct. 3218, 3227 (2010).
We agree with the Examiner. Contrary to Appellants’ argument, the
steps of “estimating a click-through rate,” “calculating an ROAI,”
“calculating an optimized bid,” and “automatically submitting the optimized
bid,” as recited by steps e) through h) of claim 1 read on a process that can
be performed in the human mind or by a human using pen and paper (see
Ans. 32). A method that can be performed “by human thought alone is
merely an abstract idea and is not patent-eligible under § 101.” CyberSource
Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1373 (Fed. Cir. 2011). While
Appellants assert that at least one of these steps inherently requires a
computer or processor to be performed, Appellants have provided no
evidence to support this assertion, and there is nothing in the language of
claim 1 that expressly or implicitly limits these steps to being performed by
a machine. Thus, claim 1 fails to satisfy the machine prong of the machine-
or-transformation test.
We also are not persuaded by Appellants’ argument that claim 1
recites patentable subject matter because it “transforms data pertaining to
selected keywords and selected advertisements to optimized bids for
advertisement-keyword pairs” (App. Br. 16; Reply Br. 2-3). The
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transformation of one type of electronic data (i.e., selected keywords and
selected advertisements) into another type of electronic data (i.e., optimized
bids for advertisement-keyword pairs) is not a transformation or reduction of
an article into a different state or thing constituting patent-eligible subject
matter. “The mere manipulation or reorganization of data . . . does not
satisfy the transformation prong.” CyberSource, 654 F.3d at 1375.
Therefore, claim 1 also fails to satisfy the transformation prong of the
machine-or-transformation test.
The Supreme Court has made clear that a patent claim’s failure to
satisfy the machine-or-transformation test is not dispositive of the § 101
inquiry. See Bilski, 130 S. Ct. at 3227. However we conclude that, absent
other factors weighing either toward or against patent eligibility, the two
machine-or-transformation factors both weighing against patent eligibility
are alone sufficient to establish a prima facie case of patent-ineligibility.
See id. (The machine-or-transformation test is “a useful and important clue,
an investigative tool, for determining whether some claimed inventions are
processes under § 101.”)
We conclude that the Examiner correctly determined that claim 1 fails
to recite patent-eligible subject matter. Appellants have not pointed to, nor
are we able to readily ascertain, any convincing factors that weigh towards
patent eligibility.
Based on the above, we will sustain the Examiner’s rejection of claim
1, and its dependent claims 2-21, 23-30, 55, 56, and 58-60, under 35 U.S.C.
§ 101. We also will sustain the Examiner’s rejection as it is directed to
independent claims 40 and 42, and their respective dependent claims 41 and
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43-52, because Appellants rely on the arguments made with respect to
independent claim 1.
We also are not persuaded that the Examiner erred in rejecting claims
31-39 under 35 U.S.C. § 101 by Appellants’ argument that “the elements
(e.g., advertisement selection system, keyword selection system,
advertisement-keyword selection system, and bid determination system) of
claim 31 are each directed to physical components of a server-based
apparatus.” (App. Br. 18-19). The body of claim 31 recites various
“system[s]” for performing functional limitations, which we agree with the
Examiner, may be construed to read solely on software embodiments. While
we acknowledge that a system is normally considered an apparatus, in the
present case this interpretation is not in keeping with the body of claim 31,
which merely recites functions that may be implemented by software alone.
Additionally, Appellants’ Appeal Brief at pages 7-8 identifies the
“advertisement selection system” as logic (see Fig. 1; element 54), “keyword
selection system” as an agent (see Fig. 1; element 52), “advertisement-
keyword selection system” as agents (see Fig. 1; elements 50 and 60), and
bid determination system as an agent (see Fig. 1; element 50). These
“system[s]” may be implemented on computer hardware, however, the claim
makes no recitation that would instantiate any of the instructions contained
within these “system[s].”
In view of the foregoing, we will sustain the Examiner’s rejection of
claim 31, and its dependent claims 32-39, under 35 U.S.C. § 101 as being
directed to non-statutory subject matter.

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Anticipation/Obviousness
The Appellants argue that Skinner does not disclose “selecting at least
one candidate advertisement,” as recited by claim 40 (App. Br. 19-21; Reply
Br. 3-4). Specifically, Appellants argue that the Examiner improperly relies
on the “search terms” disclosed in Skinner to address the “candidate
advertisement” recited by claim 40 (Id. at 20). We agree.
The Examiner interprets the “search terms related to an advertiser’s
service or product and linked to web site” in Skinner as disclosing the step
of “selecting at least one candidate advertisement” (Ans. 5) and cites to
Skinner at paragraphs [0014], [0018], and [0037] through [0043], and Figure
2, elements 42-44 and Figure 3, element 50 for support (Id. at 5 and 32-34).
However, we find the “search terms” in Skinner to be related to a user’s
search query, not a “candidate advertisement” (para. [0037]). While the
Examiner may be correct that Skinner’s “search terms” are used to “market
an advertiser’s product or services in online marketing media” (para.
[0012]), it is the resulting advertising listing displayed in response to the
entered search terms that corresponds to an advertisement (para. [0039]), not
the search terms themselves.
In view of the foregoing, we will not sustain the Examiner’s rejection
of independent claim 40, and its dependent claim 41 under 35 U.S.C.
§ 102(e).
We also will not sustain the Examiner’s rejections under 35 U.S.C.
§ 103(a) of the remaining claims because independent claims 1, 31, 42, and
57, from which the remaining claims depend, each require “selecting at least
one candidate advertisement,” and the Examiner relies solely on Skinner for
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teaching this subject matter in the rejections of the remaining independent
claims.

DECISION
We affirm the Examiner’s rejection of claims 1-21, 23-52, 55, 56, and
58-60 under 35 U.S.C. § 101.
We reverse the Examiner’s rejections of claims 1-21, 23-52, and 55-
60 under 35 U.S.C. §§ 102(e) and 103(a).
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1) (2011).

AFFIRMED-IN-PART

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