Ex Parte Greenstein

Patent Trial and Appeal Board

Jul 31, 2018

14088593 (P.T.A.B. Jul. 31, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
14/088,593 11/25/2013 Mark Greenstein
23364 7590 08/02/2018
BACON & THOMAS, PLLC
625 SLATERS LANE
FOURTH FLOOR
ALEXANDRIA, VA 22314-1176
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.
GREE3013/FJD 3721
EXAMINER
BORLING HAUS, JASON M
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
08/02/2018 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):
MAIL@BACONTHOMAS.COM
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte MARK GREENSTEIN
Appeal2017-002077
Application 14/088,593
Technology Center 3600
Before JEREMY J. CURCURI, BARBARA A. BENOIT, and
DAVID J. CUTITTA, II Administrative Patent Judges.
CURCURI, Administrative Patent Judge.
DECISION ON APPEAL
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner's
rejection of claims 1-9. See Final Act. 1. We have jurisdiction under 35
U.S.C. § 6(b ).
Claims 1-9 are rejected under 35 U.S.C. § 101 as directed to a judicial
exception without significantly more. Final Act. 2.
Claims 1-9 are rejected under 35 U.S.C. § l 12(b) as being indefinite.
Final Act. 2---6.
Appeal2017-002077
Application 14/088,593
Claims 1-9 are rejected under pre-AIA 35 U.S.C. § I03(a) as obvious
over Asher (US 2005/0160029 Al; Jul. 21, 2005) and Wasserman (US
2011/0178823 Al; Jul. 21, 2011). Final Act. 6-9.
We affirm.
STATEMENT OF THE CASE
Appellant's invention relates to "assigning and managing the rights to
receive taxes when amounts are disbursed from tax-advantaged accounts for
which a prior deduction has been received." Abstract; see also Fig. 4 (Tax
Collection Entity 8 receiving Consideration 60 from Investor(s) 4;
Investor(s) 4 receiving Right to Receive Taxes 64 from Tax Collection
Entity 8). Claim 1 is illustrative and reproduced below (paragraphing added
for readability):
1. A method of using one or more computers to manage amounts
owed by reason of taxes received, wherein amounts are removed from tax-
deferred vehicles, amounts removed from tax-deferred vehicles and
contributions to tax-exempt vehicles are tracked and recorded;
taxes are received by reason of removal of amounts from tax-deferred
vehicles, a sale of amounts based on amounts removed from tax-deferred
vehicles is made and recorded;
wherein the sale includes a specification of the measure amounts
owed by reason of the receipt of such of taxes, the method comprising:
a specification of the measure of the amounts owed by reason of taxes
on amounts withdrawn from tax-deferred vehicles;
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determining that a contribution to or withdrawal from such tax-
deferred vehicles has occurred using one or more computers to track
amounts contributed to and withdrawn from such tax-deferred vehicles;
specifying adjustments to the measure of amounts owed to purchasers
of amounts owed by reason of the receipt of such taxes sold and owed to
purchasers based on removal of amounts from tax-deferred vehicles;
adjusting the amount owed to purchasers of amounts owed by reason
of the receipt of such taxes to take account of withdrawals and contributions
to the tax-deferred vehicles determined subsequent to the sale of such
amounts;
adjusting the amount owed by reason of taxes received by reason of
contributions to and removal of amounts from tax-deferred vehicles which
are sold to take account of subsequent withdrawals from and contributions to
the tax-deferred vehicles;
specifying an adjustment to take account of a change in tax rates;
adjusting the amount owed to purchasers to take account of any
specified adjustment in tax rates;
using one or more computers to divide the rights to receive the
adjusted amount payable based on removal of amounts from tax-deferred
vehicles into qualitatively different interests which provide rates of return
based on factors which are different from each other;
tracking the ownership of such different interests;
receiving adjusted amounts payable by reason of contributions to and
removal of amounts from tax-deferred vehicles transferring the amounts due
to the owners of the qualitatively different interests which provide rates of
return based on factors which are different from each other.
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PRINCIPLES OF LAW
We review the appealed rejections for error based upon the issues
identified by Appellants, and in light of the arguments and evidence
produced thereon. Ex parte Frye, 94 USPQ2d 1072, 107 5 (BP AI 2010)
(precedential).
ANALYSIS
THE 35 U.S.C. § 101 REJECTION OF CLAIMS 1-9
Contentions
The Examiner concludes claims 1-9 are directed to a judicial
exception without significantly more. See Final Act. 2; see also Ans. 10-13.
In particular, the Examiner concludes
Claim(s) 1-10 [sic] is/are directed to (i) a fundamental
economic practice and (ii) a method of organizing human
activities (i.e. managing an investment vehicle).
The claim( s) does/ do not include additional elements that
are sufficient to amount to significantly more than the judicial
exception because the additional element( s) or combination of
elements in the claim( s) other than the abstract idea per se
amount( s) to no more than: (i) mere instructions to implement
the idea on a computer, and/or (ii) recitation of generic
computer structure that serves to perform generic computer
functions that are well-understood, routine, and conventional
activities previously known to the pertinent industry.
Final Act. 2; see also Ans. 11 ("Like the management of an investment
vehicle (risk management contracts) in Alice, the concept of managing
investment vehicle ( sold tax accounts) is a fundamental economic practice
long prevalent in our system of commerce. As such, the claimed invention
is a patent-ineligible abstract idea."), Ans. 11-12 ("Like the identification
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and forwarding of commodities due to purchasers in Bilski, the concept of
measuring and forwarding amounts due to purchasers is a fundamental
economic practice long prevalent in our system of commerce. As such, the
claimed invention is a patent-ineligible abstract idea."), and Ans. 13 ("Like
the fraud detection in CyberSource, the concept of 'measur[ing] and
forward[ing] the amounts due to the purchasers' is a method that could be
performed in the human mind or with a pen-and-paper. As such, the claimed
invention is a patent-ineligible abstract idea.").
Appellant presents the following principal arguments:
1.
The claims are not directed to managing an investment
vehicle. The claims do not describe the management of "a
product used by investors with the intention of having positive
returns." Also, no property is managed toward the goal of
achieving positive returns, e.g., not [sic] property is purchased
or sold with the objective of achieving positive returns .... In
short, the claims merely operate to measure and forward the
amounts due to the purchasers in a manner which is specific to
the nature of what is sold.
Appeal Br. 21; see also Reply Br. 4 ("management of a vehicle, while
undefined and not referenced by the Examiner, presumably means more than
for example purchasing a coin and placing it in a drawer, instead it must
include operating to achieve the goal of profit which involves purchasing
and selling investments"), Reply Br. 5 ("the adjustments are not
management if management means attempting to achieve a profit per the
definition of investment vehicle"), and Reply Br. 5-6 ("the clams [sic]
respond to a problem which originated very recently and contains [sic]
limitations, such as the previously discussed adjustments that are very
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specific to the problems and limit the application of the claims to the noted
problem.").
11.
The Examiner asserts that contrary to the definition [ of
investment vehicle] cited by Applicant that the objective of
achieving positive returns is not a necessary component of an
investment vehicle. Examiner does not cite any source for this
assertion. Therefore, Examiner's position is an opinion with no
supporting evidence in the record which is not permissible.
Appeal Br. 21.
111.
A reasoned examination of whether a streamlined
[eligibility] analysis should be used would reveal that the
limitations in the claims, taken together, are directed to a very
specific issue and modem problem that severely limits its
practical application. Once this is understood a streamlined
analysis would be appropriate even if the claims were directed
to a judicial exception.
Appeal Br. 22; see Reply Br. 7-8.
1v. "[T]he combination of novelty, usefulness and unconventional
steps means the claims are not an abstract idea and are significantly more
applying the language cited by the Examiner." Appeal Br. 22.
v. There is no technology requirement as stated by the Examiner.
See Appeal Br. 22-23; see also Reply Br. 8-9.
Our Review
A patent may be obtained for "any new and useful process, machine,
manufacture, or composition of matter, or any new and useful improvement
thereof." 35 U.S.C. § 101. The Supreme Court has held that this provision
contains an important implicit exception: laws of nature, natural phenomena,
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and abstract ideas are not patentable. Alice Corp. Pty. Ltd. v. CLS Bank
Int'!, 134 S.Ct. 2347, 2354 (2014); Gottschalkv. Benson, 409 U.S. 63, 67
(1972) ("Phenomena of nature, though just discovered, mental processes,
and abstract intellectual concepts are not patentable, as they are the basic
tools of scientific and technological work."). Notwithstanding that a law of
nature or an abstract idea, by itself, is not patentable, the application of these
concepts may be deserving of patent protection. Mayo Collaborative
Services v. Prometheus Labs., Inc., 566 U.S. 66, 71-72 (2012). In Mayo, the
Court stated that "to transform an unpatentable law of nature into a patent-
eligible application of such a law, one must do more than simply state the
law of nature while adding the words 'apply it."' Mayo, 566 U.S. at 72
( citation omitted).
In Alice, the Supreme Court reaffirmed the framework set forth
previously in Mayo "for distinguishing patents that claim laws of nature,
natural phenomena, and abstract ideas from those that claim patent-eligible
applications of these concepts." Alice, 134 S.Ct. at 2355. The first step in
the analysis is to "determine whether the claims at issue are directed to one
of those patent-ineligible concepts." Id. If the claims are directed to a
patent-ineligible concept, then the second step in the analysis is to consider
the elements of the claims "individually and 'as an ordered combination"' to
determine whether there are additional elements that "'transform the nature
of the claim' into a patent-eligible application." Id. (quoting Mayo, 566 U.S.
at 79, 78). In other words, the second step is to "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."' Id. (quoting Mayo, 566 U.S. at 72-73).
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"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. at 2357 (quoting Mayo, 566 U.S. at 77-
78). The prohibition against patenting an abstract idea "cannot be
circumvented by attempting to limit the use of the formula to a particular
technological environment or adding 'insignificant post[-]solution activity."'
Bilski v. Kappas, 561 U.S. 593, 610-11 (2010) (citation omitted). The Court
in Alice noted that "' [ s ]imply appending conventional steps, specified at a
high level of generality,' [was] not 'enough' [in Mayo] to supply the
'inventive concept."' Alice, 134 S.Ct. at 2357 (quoting Mayo, 566 U.S. at
82-83, 77-78, and 72-73).
Step one: Are the claims at issue directed to a patent-ineligible concept?
Appellant's Specification describes the invention as "transferring the
right to receive taxes due [when] amounts are withdrawn from [a] tax-
deferred solution in exchange for current consideration such as money."
Spec. 3 :25--4: 1; see also Fig. 4 (Tax Collection Entity 8 receiving
Consideration 60 from Investor(s) 4; Investor(s) 4 receiving Right to
Receive Taxes 64 from Tax Collection Entity 8). In particular, Claim 1 is a
method claim reciting method steps of "manag[ing] amounts owed by reason
of taxes received."
Exchanging consideration for a right to receive future payments, as
well as managing the amounts of those future payments, is a fundamental
business practice, long prevalent in our system of commerce, like the risk
hedging in Bilski (see Bilski v. Kappas, 561 U.S. 593 (2010)), the
intermediated settlement in Alice (see Alice, 134 S. Ct. at 2356-57),
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verifying credit card transactions in CyberSource (see CyberSource Corp. v.
Retail Decisions, Inc., 654 F.3d 1366, 1370 (Fed. Cir. 2011)), collecting and
analyzing information to detect and notify of misuses in FairWarning (see
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093-94 (Fed. Cir.
2016)), and guaranteeing transactions in buySAFE (see buySAFE, Inc. v.
Google, Inc., 765 F.3d 1350, 1354 (Fed. Cir. 2014)). Exchanging
consideration for a right to receive future payments, as well as managing the
amounts of those payments is also a building block of a market economy.
The particulars of the management of the amounts of those payments are all
part of the abstract idea. Thus, managing amounts owed by reasons of taxes
received as recited in claim 1, like the fundamental business practices above,
is an "abstract idea" beyond the scope of§ 101. See Alice 134 S. Ct. at
2356. Accordingly, do not see error in Examiner's determination that the
claims are directed to a fundamental economic practice (Final Act. 2).
Step two: Is there something else in the claims that ensures they are directed
to significantly more than a patent-ineligible concept?
Because claim 1 is directed to an abstract idea, the question to be
settled next, according to Alice, is whether claim 1 recites an element, or
combination of elements, that is enough to ensure that the claim is directed
to significantly more than the abstract idea.
Claim 1 recites "using one or more computers to manage amounts
owed by reason of taxes received." These claimed computers are generic,
purely conventional elements. Appellant's Specification confirms that the
recited "one or more computers" are generic, conventional elements.
Spec. 7-9.
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Additional limitations recited in the claim include, for example,
"using one or more computers to track amounts contributed to and
withdrawn from such tax-deferred vehicles"; and "using one or more
computers to divide the rights to receive the adjusted amount payable based
on removal of amounts from tax-deferred vehicles into qualitatively different
interests which provide rates of return based on factors which are different
from each other." Thus, the claims do no more than require generic
computer elements to perform generic computer functions, rather than
improve computer capabilities. Put another way, looking beyond the
abstract idea of managing amounts owed by reasons of taxes received, we do
not see any inventive concept in the remaining claim limitations individually
or in combination. Appending various combinations of conventional
computers is not enough to transform the idea into a patent-eligible
invention. See Alice, 134 S.Ct. at 2358 ("[T]he mere recitation of a generic
computer cannot transform a patent-ineligible abstract idea into a patent-
eligible invention.").
Appellant's arguments
Regarding Appellant's arguments (i) and (ii), these arguments do not
show any error in the Examiner's conclusions because, for reasons discussed
above, we conclude managing amounts owed by reasons of taxes received,
like the fundamental business practices discussed above, is an "abstract
idea" beyond the scope of§ 101. See Alice 134 S. Ct. at 2356. We are not
persuaded of Examiner error where the Examiner concluded that the claimed
invention is directed toward management of an investment vehicle. Final
Act. 2; see also Ans. 11. The Examiner's determination is based on the
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finding that "[a] vehicle in which an investor invests funds is inherently an
investment vehicle" and the Appellant's specification referring to investors
as principal actors in the invention. Ans. 11 ( citing Spec. 9, Fig. 1 ); Spec. 1
( characterizing Fig. 1 as depicting "the principal actors in the invention");
Spec. 1 (indicating the title of the application is "Selling Income from Tax
Deferred Investments").
In addition, Appellant characterizes its claims as describing "how to
monetize amounts to be received in taxes from tax-deferred vehicles, such as
Individual Retirement Accounts, and making these amounts available for
current budgetary priorities." Reply Br. 2. This characterization further
supports the Examiner's determination that the claimed invention is directed
toward management of an investment vehicle.
Regarding Appellant's arguments (iii) and (v), these arguments also
do not show any error in the Examiner's conclusions. In determining subject
matter eligibility, we apply the two-part analysis from Alice and Mayo.
Based on this two-part analysis, we have determined that the claims are
directed to an abstract idea, without reciting significantly more.
Moreover, a streamlined eligibility analysis is a process that the
Examiner can use when the claims viewed as a whole "clearly" do not seek
to tie up any judicial exception such that others cannot practice it. Ans. 12
( quoting the Federal Register notice). In other words, the streamlined
process shortens the analysis required in certain cases. Nor should the
streamlined method produce a different result than the two-step analysis of
Alice. In addition, the Federal Register guidance further explained 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." Ans. 12
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( quoting the Federal Register notice). The Examiner conducted the full
analysis because the Examiner had doubts, which the Examiner explained
were based on the examples provided by the guidance in the Federal
Register and the claim as a whole. Ans. 13.
In addition regarding Appellant's argument (v), the Examiner
responds that concepts that can be performed in the human mind or with a
pen-and-paper are patent-ineligible abstract ideas. Ans. 13. Appellant
acknowledges this limitation on patent eligibility. Reply Br. 8.
Regarding Appellant's argument (iv), this argument does not show
any error in the Examiner's conclusions because the particulars of the
management of the amounts of the payments are all part of the abstract idea.
The claims do no more than require generic computer elements to perform
generic computer functions, rather than improve computer capabilities. Put
another way, "[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 [section] 101 categories of possibly
patentable subject matter." Intellectual Ventures I LLC v. Symantec Corp.,
838 F.3d 1307, 1315 (Fed. Cir. 2016) (quoting Diamond v. Diehr, 450 U.S.
175, 188-89 (1981)).
Conclusion
We sustain the Examiner's rejection under 35 U.S.C. § 101 of claim 1.
We also sustain the Examiner's rejection under 35 U.S.C. § 101 of claims 2-
9, which are not separately argued with particularity. See Appeal Br. 20-23;
see also Reply Br. 3-9.
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THE INDEFINITENESS REJECTION OF CLAIMS 1-9
Contentions
The Examiner concludes claims 1-9 are indefinite. Final Act. 2-6;
see also Ans. 13-14.
Appellant argues claims 1-9 are definite when analyzed from the
perspective of a skilled artisan. See Appeal Br. 14--20; see also Reply
Br. 20-27.
Our Review
During examination of a patent application, a claim is given its
broadest reasonable construction "in light of the specification as it would be
interpreted by one of ordinary skill in the art." In re Am. Acad. of Sci. Tech
Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004) (citations omitted) (internal
quotation marks omitted). Additionally, "[t]hough understanding the claim
language may be aided by the explanations contained in the written
description, it is important not to import into a claim limitations that are not
a part of the claim." See SuperGuide Corp. v. DirecTV Enterprises, Inc.,
358 F.3d 870, 875 (Fed. Cir. 2004).
We agree with and adopt as our own the Examiner's conclusions for
the reasons given by the Examiner in the Final Action on pages 2---6 and in
the Examiner's Answer on pages 13-14.
We recognize that the claimed invention is directed to managing
amounts owed by reason of taxes received. See Claim 1. We also recognize
that a skilled artisan would understand the concepts presented in the
Specification. However, as drafted, the claims contain structural problems
resulting in indefiniteness, which should be corrected by amending the
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claims. When interpreting the claims under the broadest reasonable
interpretation standard, we decline to import limitations from the
Specification to correct these structural problems.
We, therefore, sustain the Examiner's indefiniteness rejection claim 1.
We also sustain the Examiner's indefiniteness rejection of claims 2-9, which
are not separately argued with particularity. See Appeal Br. 14--20; see also
Reply Br. 20-27.
THE OBVIOUSNESS REJECTION OF CLAIMS 1-9 OVER ASHER AND WASSERMAN
Contentions
The Examiner finds Asher (titled "System and Method for Forming a
Financial Instrument Indexed to Entertainment Revenue") and Wasserman
(titled "Defraying Taxes on Conversion of Traditional Individual Retirement
Account to a Roth Individual Retirement Account") teach all limitations of
claim 1. Final Act. 6-8; see also Ans. 15-22.
In particular, the Examiner finds Asher's financial instrument indexed
to entertainment revenue
does not teach a method wherein the revenue is derived from
taxes paid by reason of removal of amounts from tax-deferred
vehicles; tracking the amounts contributed to and withdrawn
from such tax-deferred vehicles; specifying an adjustment to
take account of a change in tax rates; adjusting the amount
owed due to any specified adjustment in tax rates.
Final Act. 7 ( citing Asher ,r,r 31, 32, 52); see also Ans. 16-19.
In particular, the Examiner finds Wasserman's defraying taxes on
conversion of traditional Individual Retirement Account to a Roth Individual
Retirement Account cures the deficiencies of Asher. Final Act. 7 ( citing
Wasserman ,r,r 17-18, 30); see also Ans. 19-22.
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The Examiner reasons
It would have been obvious to one of ordinary skill in the
art at the time the invention was made to have modified Asher
by incorporating revenue generated by any means that the
inventor wanted, such as the revenue traditionally generated via
taxes based upon the removal of amounts from tax-deferred
vehicles, as disclosed by Wasserman, thereby allowing for a tax
agency to raise funding today secured through the promise of
repayment via revenue raised tomorrow.
Final Act. 7-8.
Appellant presents the following principal arguments:
1. "In Asher the value of interests changes [is] not due to
adjustments but rather [is] due to the changes in value of the underlying
securities or securities bundle. These are not adjustments at all but rather
changes in value due to marketplace fluctuations." Appeal Br. 11; see also
Reply Br. 11-15.
11. "Instead those paragraphs [of Wasserman (i1i117-18)] are
addressed to the purchase of an annuity and the deferral of taxes without any
discussion of tracking amounts contributed and withdrawn." Appeal Br. 12.
"The cited paragraph of Wasserman [(i130)] instead is concerned wither
[sic] the interaction of the annuity and the payment of taxes at the then
prevailing rate and not any adjustment of amounts owed to an investor due
to a change in tax rates and is therefore inapposite." Appeal Br. 12; see also
Reply Br. 15-20.
111. The claims are not obvious based on additional considerations.
See Appeal Br. 12-14.
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Our Review
It is well settled that "[b ]efore considering the rejections ... , we must
first [determine the scope of] the claims .... " In re Geerdes, 491 F.2d 1260,
1262 (CCP A 1974). In the present case, for reasons explained above, the
metes and bounds of the claim protection being sought cannot be reasonably
ascertained. It would be improper, then, to speculate as to the meaning of
the claims. A prior art rejection of a claim, which is so indefinite that
"considerable speculation as to [the] meaning of the terms employed and
assumptions as to the scope of such claims" is needed, is likely imprudent.
See In re Steele, 305 F.2d 859, 862, (CCPA 1962) (holding that the
Examiner and the Board were wrong in relying on what, at best, were
speculative assumptions as to the meaning of the claims and in basing a
rejection under 35 U.S.C. § 103 thereon).
We, therefore, summarily reverse the Examiner's rejection under pre-
AIA 35 U.S.C. § 103(a) of claims 1-9.
ORDER
The Examiner's decision rejecting claims 1-9 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)(l).
AFFIRMED
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