Ex Parte CHEN et al

Patent Trial and Appeal Board

Oct 12, 2018

14281586 (P.T.A.B. Oct. 12, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
14/281,586 05/19/2014 MAOMAOCHEN
35690 7590 10/16/2018
MEYERTONS, HOOD, KIVLIN, KOWERT & GOETZEL, P.C.
P.O. BOX 398
AUSTIN, TX 78767-0398
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
5924-23901 5232
EXAMINER
REFAI, RAMSEY
ART UNIT PAPER NUMBER
3668
NOTIFICATION DATE DELIVERY MODE
10/16/2018 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):
patent_docketing@intprop.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte MAOMAO CHEN and XIAO YU LI
Appeal2017---001736
Application 14/281,586
Technology Center 3600
Before ANTON W. PETTING, BRUCE T. WIEDER, and
MATTHEW S. MEYERS, Administrative Patent Judges.
PETTING, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE 1
Maomao Chen and Xiao Yu Li (Appellants)2 seek review under
35 U.S.C. § 134(a) of a final rejection of claims 17-36, the only claims
1 Our decision will make reference to the Appellants' Appeal Brief ("App.
Br.," filed April 1, 2016) and Reply Brief ("Reply Br.," filed November 8,
2016), and the Examiner's Answer ("Ans.," mailed September 8, 2016), and
Final Action ("Final Act.," mailed October 30, 2015).
2 Appellants identify Amazon Technologies, Inc. as the real party in interest.
App. Br. 2.
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Application 14/281,586
pending in the application on appeal. 3 We have jurisdiction over the appeal
pursuant to 35 U.S.C. § 6(b ).
The Appellants invented a way of allocating regional inventory to
reduce out-of-stock costs. Specification para. 14.
An understanding of the invention can be derived from a reading of
exemplary claim 30, which is reproduced below (bracketed matter and some
paragraphing added).
30. A method, comprising:
[ 1] performing, by one or more computing devices, receiving,
by a planning system,
a regional demand forecast
for an item
for each of a plurality of regions;
[2] receiving, by the planning system, a unit out-of-stock cost
of the item in each of the plurality of regions;
[3] calculating, by the planning system, an expected out-of-
stock cost
for each of the plurality of regions based, at least in part,
on each region's respective regional demand forecast,
target inventory of the item, and unit out-of-stock cost,
wherein the calculating comprises calculating respective
target inventories of the item for each of the plurality of
reg10ns,
such that a difference between the expected out-of-
stock costs for each of the plurality of regions is
reduced;
3 An amendment after final to the claims was filed December 30, 2015, and
was entered with an Advisory Action mailed January 13, 2016.
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[ 4] allocating, by the planning system, each calculated
respective target inventory of the item to the respective region
of the plurality of regions;
and
[5] cause distribution of physical inventory units of the item
to respective fulfillment centers of each of the plurality of
reg10ns
in accordance with the allocation of each calculated
respective target inventory and reduction of the
difference between the expected out-of-stock costs for
each of the plurality of regions.
Claims 17-36 stand rejected under 35 U.S.C. § 101 as directed to
non-statutory subject matter.
ISSUES
The issues of eligible subject matter tum primarily on whether the
claims recite more than abstract conceptual advice of what a computer is to
provide without implementation details.
ANALYSIS
Method claim 30 recites receiving demand forecasts and unit out-of-
stock costs, computing expected out-of-stock costs based on the demand and
unit cost data, allocating target inventory data to regions, and somehow
causing distribution of inventory according to the allocation. Thus, claim 30
recites receiving, analyzing, and transmitting data. None of the limitations
recite implementation details for any of these steps, but instead recite
functional results to be achieved by any and all possible means. In
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particular, claim 30 recites nothing about how the inventory distribution is
caused, but whatever the nature and implementation, it is within a computer4
and not external with the physical inventory itself. Data reception, analysis
and modification, and transmission are all generic, conventional data
processing operations to the point they are themselves concepts awaiting
implementation details. The sequence of data reception-analysis-
transmission is equally generic and conventional. The ordering of the steps
is therefore ordinary and conventional. The remaining claims merely
describe parameters for the computations, with no implementation details.
The Supreme Court
set forth a framework for distinguishing patents that claim laws
of nature, natural phenomena, and abstract ideas from those that
claim patent-eligible applications of those concepts. First, []
determine whether the claims at issue are directed to one of
those patent-ineligible concepts. [] If so, we then ask, "[ w ]hat
else is there in the claims before us? [] To answer that question,
[] consider the elements of each claim both individually and "as
an ordered combination" to determine whether the additional
elements "transform the nature of the claim" into a patent-
eligible application. [The Court] described step two of this
analysis as a search for an "'inventive concept'"-i.e., an
element or combination of elements that is "sufficient to ensure
that the patent in practice amounts to significantly more than a
patent upon the [ineligible concept] itself."
Alice Corp., Pty. Ltd. v CLS Bank Intl, 134 S.Ct. 2347, 2355 (2014) (citing
Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66
(2012)).
4 "[P]erforming, by one or more computing devices." Claim 30.
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To perform this test, we must first determine whether the claims at
issue are directed to a patent-ineligible concept. The Examiner finds the
claims directed to allocating inventory to respective regions based on
demand forecast and out-of-stock cost of item to reduce out-of-stock costs,
which is considered a method of organizing human activities, a
mathematical relationship/formula, and a fundamental economic practice.
Final Act. 4.
Although the Court in Alice made a determination as to what the
claims were directed to, we find that this case's claims themselves and the
Specification provide enough information to inform one as to what they are
directed to.
The preamble to claim 30 does not recite what it is directed to, but the
steps in claim 30 result in inventory levels based on inventory targets and
costs. The Specification at paragraph 14 recites that the invention relates to
allocating regional inventory to reduce out-of-stock costs. Thus, all this
evidence shows that claim 3 0 is directed to allocating inventory based on
targets and costs, i.e. inventory optimization. This is consistent with the
Examiner's finding.
It follows from prior Supreme Court cases, and Bilski (Bilski v
Kappas, 561 U.S. 593 (2010)) in particular, that the claims at issue here are
directed to an abstract idea. The concept of inventory optimization is a
fundamental business practice long prevalent in our system of commerce.
The use of inventory optimization is also a building block of ingenuity in
production planning. Thus, inventory optimization, like hedging, is an
"abstract idea" beyond the scope of§ 101. See Alice Corp. Pty. Ltd. at 2356.
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As in Alice Corp. Pty. Ltd., we need not labor to delimit the precise
contours of the "abstract ideas" category in this case. It is enough to
recognize that there is no meaningful distinction in the level of abstraction
between the concept of risk hedging in Bilski and the concept of inventory
optimization at issue here. Both are squarely within the realm of "abstract
ideas" as the Court has used that term. See Alice Corp. Pty. Ltd. at 2357.
Further, claims involving data collection, analysis, and display are
directed to an abstract idea. Elec. Power Grp. v. Alstom S.A., 830 F.3d 1350,
1353 (Fed. Cir. 2016) (holding that "collecting information, analyzing it, and
displaying certain results of the collection and analysis" are "a familiar class
of claims 'directed to' a patent ineligible concept"); see also In re TL!
Commc'ns LLC Patent Litig., 823 F.3d 607,611 (Fed. Cir. 2016);
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093-94 (Fed. Cir.
2016). Claim 30, unlike the claims found non-abstract in prior cases, uses
generic computer technology to perform data retrieval, analysis, and
transmission and does not recite an improvement to a particular computer
technology. See, e.g., McRO, Inc. v. Bandai Namco Games Am. Inc., 837
F.3d 1299, 1314 (Fed. Cir. 2016) (finding claims not abstract because they
"focused on a specific asserted improvement in computer animation"). As
such, claim 30 is directed to the abstract idea of receiving, analyzing, and
transmitting data.
The remaining claims merely describe parameters for the
computations. We conclude that the claims at issue are directed to a patent-
ineligible concept.
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The introduction of a computer into the claims does not alter the
analysis at Mayo step two.
the mere recitation of a generic computer cannot transform a
patent-ineligible abstract idea into a patent-eligible invention.
Stating an abstract idea "while adding the words 'apply it'" is
not enough for patent eligibility. Nor is limiting the use of an
abstract idea "'to a particular technological environment."'
Stating an abstract idea while adding the words "apply it with a
computer" simply combines those two steps, with the same
deficient result. Thus, if a patent's recitation of a computer
amounts to a mere instruction to "implemen[t]" an abstract idea
"on ... a computer," that addition cannot impart patent
eligibility. This conclusion accords with the preemption
concern that undergirds our § 101 jurisprudence. Given the
ubiquity of computers, wholly generic computer
implementation is not generally the sort of "additional
featur[ e ]" that provides any "practical assurance that the
process is more than a drafting effort designed to monopolize
the [ abstract idea] itself."
Alice Corp. Pty. Ltd., 134 S.Ct. at 2358 ( citations omitted).
"[T]he relevant question is whether the claims here do more than
simply instruct the practitioner to implement the abstract idea ... on a
generic computer." Alice Corp. Pty. Ltd., 134 S.Ct. at 2359. They do not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to receive, analyze, and transmit data amounts to electronic data
query and retrieval----one of the most basic functions of a computer. The
limitation of causing distribution is just that, some form of causation trigger,
such as data generated to use for subsequent inventory distribution. By the
claim's terms, such causation is performed by a computing device and so
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does not extend to actual physical transport. Simply displaying or emailing
an instruction to do so would be within the scope of causing distribution.
All of these computer functions are well-understood, routine, conventional
activities previously known to the industry. See Elec. Power Grp. v. Alstom
S.A., supra. Also see In re Katz Interactive Call Processing Patent
Litigation, 639 F.3d 1303, 1316 (Fed. Cir. 2011)("Absent a possible
narrower construction of the terms 'processing,' 'receiving,' and 'storing,' ...
those functions can be achieved by any general purpose computer without
special programming"). In short, each step does no more than require a
generic computer to perform generic computer functions. As to the data
operated upon, "even if a process of collecting and analyzing information is
'limited to particular content' or a particular 'source,' that limitation does
not make the collection and analysis other than abstract." SAP America Inc.
v. InvestPic LLC, 898 F.3d 1161, 1168 (Fed. Cir. 2018)
Considered as an ordered combination, the computer components of
Appellants' method add nothing that is not already present when the steps
are considered separately. The sequence of data reception-analysis-
transmission is equally generic and conventional or otherwise held to be
abstract. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir.
2014) (sequence of receiving, selecting, offering for exchange, display,
allowing access, and receiving payment recited an abstraction), Inventor
Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir.
2017) (sequence of data retrieval, analysis, modification, generation, display,
and transmission), Two-Way Media Ltd. v. Comcast Cable Commc 'ns, LLC,
874 F.3d 1329, 1339 (Fed. Cir. 2017)(sequence of processing, routing,
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controlling, and monitoring). The ordering of the steps is therefore ordinary
and conventional.
Viewed as a whole, Appellants' method claims simply recite the
concept of inventory optimization as performed by a generic computer. To
be sure, the claims recite doing so by advising one to use out-of-stock costs
and inventory target levels to allocate inventory and let one know when and
how much inventory to distribute. But this is no more than abstract
conceptual advice on the parameters for such inventory optimization and the
generic computer processes necessary to process those parameters, and do
not recite any particular implementation.
The method claims do not, for example, purport to improve the
functioning of the computer itself. Nor do they effect an improvement in
any other technology or technical field. The Specification spells out
different generic equipment5 and parameters that might be applied using this
concept and the particular steps such conventional processing would entail
based on the concept of inventory optimization under different scenarios.
They do not describe any particular improvement in the manner a computer
functions. Instead, the claims at issue amount to nothing significantly more
5 Processors 910 may be any suitable processor capable of
executing instructions. For example, in various embodiments
processors 910 may be a general-purpose or embedded
processor implementing any of a variety of instruction set
architectures (IS As), such as the x96, Power PC, SP ARC, or
MIPS ISAs, or any other suitable ISA. In multiprocessor
systems, each of processors 910 may commonly, but not
necessarily, implement the same ISA.
Spec. para. 81.
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than an instruction to apply the abstract idea of inventory optimization using
some unspecified, generic computer. Under our precedents, that is not
enough to transform an abstract idea into a patent-eligible invention. See
Alice Corp. Pty. Ltd. at 2360.
As to the structural claims, they
are no different from the method claims in substance. The
method claims recite the abstract idea implemented on a generic
computer; the system claims recite a handful of generic
computer components configured to implement the same idea.
This Court has long "warn[ ed] ... against" interpreting § 101 "in
ways that make patent eligibility 'depend simply on the
draftsman's art. '
Alice Corp. Pty. Ltd. at 2360.
We are not persuaded by Appellants' argument that "because the
Office has not adequately articulated what the similarity is (to say nothing of
what case law precedent are the source of such concepts, thereby providing
the necessary claims of those cases as a source of comparison) a prima facie
rejection has not been established." App. Br. 7 ( emphases omitted). The
Examiner determined what the claims are directed to, why they are abstract
ideas, and that the claim details and claim as a whole do not provide
significantly more than the abstract idea. We have done so as well, supra.
We are not persuaded by Appellants' argument that "Appellants' claim
is not actually similar to any of the concepts recited in the rejection. Instead,
Appellants' claim pertains to physically arranging quantities of an inventory
items [sic] among different physical fulfillment centers in a manner that
reduces differences in out-of-stock costs for different regions." App. Br. 8.
As we find supra, Appellants' claims are analogous to those in Electric
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Power. As we also determine supra, Appellants' claims on their own terms
are performed within a computer and so do not and cannot extend to
physically arranging quantities of an inventory. Claim 30 only recites
causing distribution, not distributing. Such a cause may be any trigger such
as providing the data used to trigger the subsequent distribution.
We are not persuaded by Appellants' argument that "describes a novel
technique used to control the physical distribution of inventory among
different physical locations, much like the calculations in a computer in
Diehr were used to control when to open a rubber curing oven." App. Br. 8
(citing Diamond v. Diehr, 450 U.S. 175 (1981)).
First as to novelty, "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
Corporation, 839 F.3d 1138, 1151 (Fed. Cir. 2016). As to Diehr, first unlike
Diehr, which recited "opening said press when a said comparison of
calculated total required cure time and monitored elapsed time indicates
equivalence" and "removing from said mold the resultant precision molded
and cured rubber article," Diehr, 450 U.S. at 220, the instant claim only
recites causing distribution of inventory.
The Diehr Court found those claims eligible because they "involve[ d]
the transformation of an article, ... raw, uncured synthetic rubber, into a
different state or thing" and "describe[ d] in detail a step-by-step method for
accomplishing such, beginning with the loading of a mold with raw, uncured
rubber and ending with the eventual opening of the press at the conclusion of
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the cure." Id. at 184. 6 Because Appellant's claims are not directed an
industrial process, Diehr is inapposite.
Again, in the instant claim, the recited causation does not encompass
physical distribution, as contrasted with Diehr 's physical press opening and
tire removal. More to the point, at the time of Diehr, it was unknown to use
a computer's algorithmic output to send the signal to the press, so the
computer and press formed a combined special purpose press that has
structural novelty. It has long been known to compute optimal inventory
levels and then follow up on those levels in inventory distribution.
Much as the phones in Affinity Labs of Texas, absent some
technological improvement in the distribution itself or the technological
linkage between computational output and distribution, the recitation of
causing to distribute, or even distributing, is no more than abstract
conceptual advice to do so and adds nothing substantive to the claim.
In this case, the claims are directed not to an improvement in
cellular telephones but simply to the use of cellular telephones
as tools in the aid of a process focused on an abstract idea. That
is not enough to constitute patentable subject matter.
Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1262 (Fed.
Cir. 2016).
6 Exemplary claims at issue in Diehr are reproduced in note 2 of the opinion
and include limitations such as "constantly determining the temperature (Z)
of the mold at a location closely adjacent to the mold cavity in the press
during molding" and "opening the press automatically when a said
comparison indicates equivalence."
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We are not persuaded by Appellants' argument that "Appellants
submit that the claims are directed to patent-eligible subject matter at least
because the claims are directed to inventions that clearly do not seek to tie
up the alleged judicial exception and thus the claims should be examined via
streamlined eligibility analysis." App. Br. 9 (emphases omitted). As to the
preemption argument, " [ w ]here a patent's claims are deemed only to
disclose patent ineligible subject matter under the Mayo [/Alice] framework,
as they are in this case, preemption concerns are fully addressed and made
moot." Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379
(Fed. Cir. 2015).
As to the streamlined eligibility analysis argument, Appellants
mischaracterize the purpose of section 1 (B)(3) of the 2014 Interim Guidance
on Patent Subject Matter Eligibility guidelines as placing a requirement on
the Examiner. Rather, section 1 (B)(3) is available to the Examiner as a
discretionary streamlined § 101 Alice/ Mayo analysis favoring Applicant.
Section 1 (B)(3) is explicit that "if there is doubt as to whether the applicant
is effectively seeking coverage for a judicial exception itself, the full
analysis should be conducted." Emphasis added. Contrary to Appellants'
argument, the streamlined patent-eligibility analysis under section 1 (B)(3) is
not required to be available to Appellants; rather, it is at the Examiner's
discretion. The Examiner choosing to perform a full§ 101 Alice/Mayo
analysis is not an error.
Further, any Examiner's failure to follow the Director's guidance is
appealable only to the extent that the Examiner has failed to follow the
statutes or case law. That is, to the extent the Director's guidance goes
beyond the case law and is more restrictive on the Examiner than the case
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law, failure of the Examiner to follow those added restrictions is a matter for
petition to the Director. We review Appellants' particular arguments against
the case law and find no requirement in the law that the Examiner perform a
section l(B)(3) streamlined§ 101 Alice/Mayo analysis.
We are not persuaded by Appellants' argument that the claim do not
preempt an idea (App. Br. 10-11) for the same reasons we find supra.
We are not persuaded by Appellants' argument that "at least because
the Office has failed to show that independent claim 17 is directed to subject
matter that the Court has positively identified as being within any exception
to subject matter eligibility, the Office has failed to make a prima facie
rejection" (App. Br. 13) for the same reasons we find supra.
Similarly, we are not persuaded by Appellants' argument that
"Appellants' claimed subject matter is not actually similar to the concepts
already found to be abstract in the body of case law precedent." See App.
Br. 14--20. Appellants contend that because no case has yet opined on the
eligibility of inventory optimization, no rejection may be made. We do not
disagree that inventory optimization is not a financial instrument concept as
in Alice. But inventory optimization is inherently economic in character as it
by definition optimizes the trade-offs between actual costs of inventory
carrying and storage against opportunity costs of sales delayed and foregone
from inventory outages. In fact the prototypical inventory optimization
algorithm from the early 1900' s is the economic order quantity (EOQ)
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algorithm. 7 Thus, the claims are directed to an economic idea of optimizing
inventory costs.
We are not persuaded by Appellants' argument that the claims are
analogous to those in Diehr (App. Br. 22-24) for the same reasons we find
supra.
We are not persuaded by Appellants' argument that "if a claim is
directed to a concept which amounts to significantly more than an abstract
idea, claiming a generic computer implementation of the concept does not
automatically render the claim patent-ineligible, under Alice Corp." App.
Br. 26. First, a concept per se is an abstract idea. The Supreme Court held
that claims that explained the basic concept of an activity (hedging) would
allow the Appellant to pre-empt the use of this approach in all fields, and
would effectively grant a monopoly over an abstract idea. Bilski v. Kappas,
561 U.S. 593, 611---612 (June 2010). Abstract ideas are not patent eligible.
Id. at 601 and 653. Hence, concepts without more are patent ineligible. We
take Appellants to mean that if a claim is directed to a process which
amounts to significantly more than an abstract idea, claiming a generic
computer implementation of the concept does not automatically render the
claim patent ineligible, under Alice Corp. We agree, but we disagree that
the claims recite significantly more for the reasons we determine supra.
As to Appellants' arguments regarding lack of detail in rejecting the
dependent claims, Appellants conflate consideration with explication. The
Examiner is required to consider every claim separately, but the analysis
7 See e.g., Wilson, R.H. (1934). "A Scientific Routine for Stock Control".
Harvard Business Review. 13: 116-28.
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may include summarization of findings. As we find supra, all of the
dependent claims recite no more than parameters used for the computations,
and such parameters are themselves abstractions.
CONCLUSIONS OF LAW
The rejection of claims 17-36 under 35 U.S.C. § 101 as directed to
non-statutory subject matter is proper.
DECISION
The rejection of claims 17-36 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). See 37 C.F.R.
§ 1.136(a)(l)(iv) (2011).
AFFIRMED
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