Ex Parte Hammond et al

Patent Trial and Appeal Board

Jul 24, 2018

12430483 (P.T.A.B. Jul. 24, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/430,483 04/27/2009
35811 7590 07/26/2018
IP GROUP OF DLA PIPER LLP (US)
ONE LIBERTY PLACE
1650 MARKET ST, SUITE 4900
PHILADELPHIA, PA 19103
UNITED ST A TES OF AMERICA
FIRST NAMED INVENTOR
Thomas Hammond
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.
ICE-08- ll 66R 3210
EXAMINER
POLLOCK, GREGORY A
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
07/26/2018 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):
pto. phil@dlapiper.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte THOMAS HAMMOND, THOMAS FARLEY,
and RAYMOND J. CUMMINGS
Appeal2017-002076 1
Application 12/430,483 2
Technology Center 3700
Before MURRIEL E. CRAWFORD, ANTON W. PETTING, and
NINA L. MEDLOCK, Administrative Patent Judges.
MEDLOCK, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 1-3, 7-13, 16-27, 39-51, and 54--59. We have
jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 Our decision references Appellants' Appeal Brief ("Br.," filed
February 26, 2016) and Reply Brief ("Reply Br.," filed October 25, 2016),
and the Examiner's Answer ("Ans.," mailed August 26, 2016) and Final
Office Action ("Final Act.," mailed December 18, 2015).
2 Appellants identify Intercontinental Exchange Holdings, Inc. as the real
party in interest. App. Br. 1.
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CLAIMED INVENTION
Appellants describe that the claimed invention "is generally related to
managing position concentration risk and to establishing thresholds and
generating alerts related to levels of position concentration risk" (Spec. ,r 2).
Claims 1 and 3 9 are the independent claims on appeal. Claim 1,
reproduced below, is illustrative of the claimed subject matter:
1. A method of managing a position concentration risk
of an account, comprising:
activating a threshold level module via a remote third party
computer terminal over the Internet;
establishing, by the threshold level module, a threshold
level for an aggregate trader position that is associated with one
or more customer accounts, said customer accounts being
managed by one or more clearing firms, wherein the aggregate
trader position comprises two or more contracts having
correlated risk profiles, two or more contracts having opposed
risk profiles, or both;
associating, by the threshold level module, the contracts
having said correlated risk profiles with the aggregate trader
position;
associating, by the threshold level module, the contracts
having said opposed risk profiles with the aggregate trader
position;
aggregating, by an aggregator module, an actual parameter
value associated with each of said customer accounts to
determine an aggregate parameter value;
comparing, by a comparer module, the aggregate
parameter value with the threshold level;
automatically generating, by an advisory alert generator,
an advisory alert only if, based on the comparing step, it is
determined that the aggregate parameter value has met or
exceeded the threshold level;
communicating, by a communication module, the
advisory alert to an authorized entity over the Internet; and
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activating, by a computing device compnsmg non-
transitory memory storing instructions and a processor executing
the instructions, one or more intervening measures only if the
aggregate parameter value has met or exceeded the threshold
level, the one or more intervening measures comprising
controlling a customer application to perform one of disabling
customer trade registration access, disabling customer access to
a trading system, disabling customer access to a clearing system,
and freezing a customer account.
REJECTIONS
Claims 1-3, 7-13, 16-27, 39-51, and 54--59 are rejected under
35 U.S.C. § 112, first paragraph, as failing to comply with the written
description requirement. 3
Claims 1-3, 7-13, 16-27, 39-51, and 54--59 are rejected under
35 U.S.C. § 112, second paragraph, as incomplete for omitting essential
structural cooperative relationships of elements.
Claims 1-3, 7-13, 16-27, 39-51, and 54--59 are rejected under
35 U.S.C. § 101 as directed to a judicial exception without significantly
more.
ANALYSIS
Written Description
Whether a specification complies with the written description
requirement of 35 U.S.C. § 112, first paragraph, is a question of fact and is
assessed on a case-by-case basis. See, e.g., Purdue Pharma L.P. v.
Paulding, Inc., 230 F.3d 1320, 1323 (Fed. Cir. 2000) (citing Vas-Cath, Inc.
3 Although the Examiner references independent claims 1 and 39 only, we
understand that the rejection also is applicable to dependent claims 2, 3, 7-
13, 16-27, 40-51, and 54--59.
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v. Mahurkar, 935 F.2d 1555, 1561 (Fed. Cir. 1991)). The disclosure, as
originally filed, need not literally describe the claimed subject matter (i.e.,
using the same terms or in haec verba) in order to satisfy the written
description requirement. But the Specification must convey with reasonable
clarity to those skilled in the art that, as of the filing date, Appellants were in
possession of the claimed invention. See id.
Here, in rejecting independent claims 1 and 39 under§ 112, first
paragraph, the Examiner notes that the claims were amended to recite
"activating a threshold level module via a remote third party computer
terminal over the Internet" and "activating ... one or more intervening
measures only if the aggregate parameter value has met or exceeded the
threshold level" (Final Act. 3). The Examiner observes that "the term
activating ( or any form of the word activate) is not found within the
disclosure of the present application, let alone a third party performing the
function of activating a threshold level module over the internet" (id.). And
the Examiner concludes that "[a]s such, the amended claims 1 and 39 add
new matter and are, additionally, inoperable as claimed" (id.). The
Examiner applies substantially the same reasoning with respect to the step of
"activating ... one or more intervening measures only if the aggregate
parameter value has met or exceeded the threshold level" (id. at 3--4).
Appellants argue, and we agree, that the Specification provides the
requisite written description support for "activating a threshold level module
via a remote third party computer terminal over the Internet" at least at
paragraph 37 (App. Br. 4--5). There, the Specification expressly discloses
that "[ w ]hen the software application 220 is executed and accessed via the
one or more third party terminals 230, the threshold level module 221
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enables users of the third party terminals 230 to establish one or more
threshold levels for an aggregate trader position" (Spec. ,r 37). The
Specification also explicitly discloses that "if it is determined that the
aggregate parameter value meets, exceeds, or is within a predetermined
range of at least one of the threshold levels, then one or more intervening
measures may be imposed" (id. ,r 32), i.e., the Specification provides written
description support for "activating ... one or more intervening measures
only if the aggregate parameter value has met or exceeded the threshold
level."
In view of the foregoing, we do not sustain the Examiner's rejection of
claims 1 and 39 under 35 U.S.C. § 112, first paragraph, as failing to comply
with the written description requirement. For the same reasons, we also do
not sustain the rejection of dependent claims 2, 3, 7-13, 16-27, 40-51, and
54--59.
Indefiniteness
In rejecting the pending claims under§ 112, second paragraph, the
Examiner takes the position that the term "remote," as used in independent
claims 1 and 39, e.g., "activating a threshold level module via a remote third
party computer terminal over the Internet," is a relative term that renders the
claims indefinite (Final Act. 4). The Examiner maintains that this is so
because "the term 'remote' is not defined by the claim[s], the specification
does not provide a standard for ascertaining the requisite degree, and one of
ordinary skill in the art would not be reasonably apprised of the scope of the
invention" (id.). The Examiner concludes, "[a]s such, claims 1 and 39 and
any claims which depend therefrom are indefinite" (id.).
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The Examiner also rejects the claims as indefinite on the ground that
claims 1 and 39 are "incomplete for omitting essential structural cooperative
relationships of elements," i.e., "the modules and generators (software) and
physical structural element which corresponds to the cited software" (id.
at 4--5). The Examiner maintains that "[c]laims 1 and 39 list software
element( s) but do not recite what physical structural [sic] ... contain and
perform the function of the cited software element(s)" (id. at 5). The
Examiner asserts that "[t]o correct this deficiency, it must be clear which
disclosed component is storing the software component" (id.).
Further explaining the basis for this rejection, the Examiner notes that,
in amending the claims, Appellants deleted the limitation "wherein each of
the foregoing steps are performed via at least one computing device
comprising a memory for storing instructions and a processor for executing
said instructions" (Ans. 9). And the Examiner maintains that by removing
this claim limitation, "the modules no longer reside on any physical device
and have no claimed connection to each other that are [sic] essential when
attempting to draw the physical boundaries being claimed" (id.).
Addressing each of these bases in tum, we agree with Appellants that
a person of ordinary skill in the art would understand from the Specification,
particularly including paragraphs 37 and 50, that the term "remote" refers to
the wired or wireless connection between the third party terminals and the
server (App. Br. 5). Such a person would, thus, be reasonably apprised of
the scope of the claimed invention (id.).
Regarding the second basis for the Examiner's rejection, although the
amended claims removed some claim limitations related to physical
structural elements, we are not persuaded that a person of ordinary skill in
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the art would be unable to determine the metes and bounds of the claims,
when read in light of the Specification. See In re Zietz, 893 F.2d 319, 322
(Fed. Cir. 1989) (During examination, after applying the broadest reasonable
interpretation to the claim, if the metes and bounds of the claimed invention
are not clear, the claim is indefinite and should be rejected); Orthokinetics,
Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1576 (Fed. Cir. 1986)
(The test for definiteness under 35 U.S.C. § 112, second paragraph is
whether "those skilled in the art would understand what is claimed when the
claim is read in light of the specification.").
Therefore, we do not sustain the Examiner's rejection of claims 1-3,
7-13, 16-27, 39-51, and 54--59 under 35 U.S.C. § 112, second paragraph.
Patent-Ineligible Subject Matter
Under 35 U.S.C. § 101, an invention is patent-eligible if it claims a
"new and useful process, machine, manufacture, or composition of matter."
35 U.S.C. § 101. The Supreme Court, however, has long interpreted§ 101
to include an implicit exception: "[l]aws of nature, natural phenomena, and
abstract ideas" are not patentable. See, e.g., Alice Corp. Pty. Ltd. v. CLS
Bank Int'!, 134 S. Ct. 2347, 2354 (2014).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66 (2012), "for distinguishing patents that claim
laws of nature, natural phenomena, and abstract ideas from those that claim
patent-eligible applications of those concepts." Alice Corp., 134 S. Ct.
at 2355. The first step in that analysis is to "determine whether the claims at
issue are directed to one of those patent-ineligible concepts." Id. If the
claims are not directed to a patent-ineligible concept, e.g., an abstract idea,
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the inquiry ends. Otherwise, the inquiry proceeds to the second step where
the elements of the claims are considered "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).
The Court acknowledged in Mayo, that "all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena,
or abstract ideas." Mayo, 566 U.S. at 71. Therefore, the Federal Circuit has
instructed that claims are to be considered in their entirety to determine
"whether their character as a whole is directed to excluded subject matter."
McRO, Inc. v. Bandai Namco Games Am., Inc., 837 F.3d 1299, 1312
(Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc.,
790 F.3d 1343, 1346 (Fed. Cir. 2015)).
Here, in rejecting the pending claims under 35 U.S.C. § 101, the
Examiner determined that the claims are directed to "methods of managing
position concentration risk and to establishing thresholds and generating
alerts related to levels of position concentration risk," which the Examiner
determined is an idea similar to "organizing information through
mathematical correlations"; "using categories to organize, store, and
transmit information"; "comparing new and stored information and using
rules to identify options"; and/or "mitigating settlement risk, hedging, or
creating a contractual relationship which are fundamental economic
practices all of which have been found by the courts to be an abstract idea"
(Final Act. 6-7). The Examiner also determined that the claims do not
include additional elements that are sufficient to amount to significantly
more than the judicial exception (id. at 7-8).
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Appellants argue that the§ 101 rejection cannot be sustained because
the present claims are comparable to those found patent-eligible in DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014)
(App. Br. 7-8). But, we do not agree that there is any parallel between the
present claims and those at issue in DDR Holdings.
The claims at issue in DDR Holdings were directed to retaining
website visitors, and in particular to a system that modified the conventional
web browsing experience by directing a user of a host website, who clicks
an advertisement, to a "store within a store" on the host website, rather than
to the advertiser's third-party website. DDR Holdings, 773 F.3d at 1257-
1258. The court determined that "the claims address a business challenge
(retaining website visitors) [that] is a challenge particular to the Internet."
Id. at 1257. The court also determined that the invention was "necessarily
rooted in computer technology in order to overcome a problem specifically
arising in the realm of computer networks," and that the claimed invention
did not simply use computers to serve a conventional business purpose. Id.
Rather, there was a change to the routine, conventional functioning of
Internet hyperlink protocol. Id.
Appellants maintain here that the pending claims, like the claims in
DDR Holdings, are necessarily rooted in computer technology in order to
overcome a problem specifically arising in the realm of computer networks
(id. at 7). Appellants argue that the claims solve this "computer-centric
problem (i.e., inability of different clearing systems to access and share
account data)" by creating a computer system, with various modules
working over the Internet, that accesses account data from any number of
firms or entities, aggregates the customer account data, and, if a
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predetermined aggregate threshold parameter is reached or surpassed,
activates certain remote disabling and/or access-prevention functions (id.).
It is, however, not clear to us how allowing multiple clearing firms to access
and share information relating to customer accounts is a challenge particular
to computer networks and/or the Internet. And, unlike the situation in DDR
Holdings, we find no indication in the record, nor do Appellants point us to
any indication, that a computer network, or the Internet, in particular, is used
other than in its normal, expected, and routine manner, e.g., for receiving
and transmitting information.
Appellants maintain that, as in DDR Holdings, the present claims do
not simply apply a known business practice from the pre-Internet world to
computers or the Internet (App. Br. 7). Appellants assert that entry into the
Internet era presented new and unique problems for companies within the
computer trading space, "including exposure by customers who can easily
open multiple electronic accounts with multiple firms that do not have the
ability to communicate and gage a customer's aggregate trader position,"
and that the present claims solve some of these problems, including "the
unique problem of controlling a customer's access to data and trading by
activating intervening measures, such as disabling a customer's ability to
trade, according to use rules, to limit the exposure that customer can impose
on a particular firm" - access control that Appellants maintain was
unknown in the pre-Internet era (id. at 7-8).
Appellants ostensibly maintain that present claims, thus, address an
Internet-centric challenge (id. at 8). Yet, as the court cautioned in DDR
Holdings, "not all claims purporting to address Internet-centric challenges
are eligible for patent." DDR Holdings, 773 F.3d at 1258. Thus, in
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Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014), although the
patentee argued that its claims were "directed to a specific method of
advertising and content distribution that was previously unknown and never
employed on the Internet before," Ultramercial, 772 F.3d at 714, the court
found that this alone could not render its claims patent-eligible where the
claims merely recited the abstract idea of "offering media content in
exchange for viewing an advertisement," along with "routine additional
steps such as updating an activity log, requiring a request from the consumer
to view the ad, restrictions on public access, and use of the Internet." Id.
at 715-716.
Similarly here, we find that invocation of the Internet is not sufficient
to transform Appellants' otherwise patent-ineligible abstract idea into
patent-eligible subject matter. For example, there is no indication that the
particular operations recited in the claims require any specialized computer
hardware or other inventive computer components, invoke any assertedly
inventive programming, or that the claimed invention is implemented using
other than generic computer components to perform the claimed method
steps, which is not enough for patent-eligibility. 4 See DDR Holdings,
773 F.3d at 1256 ("And after Alice, there can remain no doubt: recitation of
4 The Specification explicitly discloses that "the various components
described herein with respect to the system 200 may include one or more
computing devices, hand-held communication devices, mobile computers
and/or any other electronic communication means" and that "[t]he
components may be described in the general context of comprising
computer-executable instructions, such as program modules, being executed
by a computer" (Spec. ,r 41).
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generic computer limitations does not make an otherwise ineligible claim
patent-eligible.").
We also cannot agree with Appellants that there is any parallel
between the present claims and those at issue in Diamond v. Diehr, 450 U.S.
175 (1981) (App. Br. 8). The claims in Diehr were directed to a process for
curing synthetic rubber, and recited a series of steps (e.g., the loading of a
mold with raw, uncured rubber, closing the mold, constantly determining the
mold temperature, constantly recalculating the cure time, and automatically
opening the press at the proper time) that together provided a significant and
novel practical application of the well-known Arrhenius equation and
transformed uncured synthetic rubber into a new state or thing. See Diehr,
450 U.S. at 184--87.
Appellants argue that the present claims are patent-eligible under the
reasoning of Diehr because the claims recite features for "determining when
to activate intervening measures" (i.e., when a threshold level is met or
exceeded) and then "actually activating other components and devices to
function" (App. Br. 8). Yet we fail to see how activating intervening
measures ( e.g., disabling customer access to a trading system, disabling
customer access to a clearing system, and/ or freezing a customer account,
when a threshold level is met or exceeded) is similar to controlling a
physical process, like the rubber molding process in Diehr. Appellants'
claimed method does not involve any industrial or physical and chemical
process, and does not involve the transformation of an article into a different
state or thing.
Appellants further argue that the present claims are analogous to
patent-eligible claim 2 of Example 21 of the July 2015 Update on Subject
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Matter Eligibility (App. Br. 8-9). 5 But, claim 2 of Example 21 is not a
strong basis for arguing that the present claims are patent-eligible at least
because claim 2 is a hypothetical claim, not an actual claim at issue in
Google Inc. v. Simpleair, Inc., CBM 2014-00170, 2015 WL 331089
(PTAB Jan. 22, 2015). Also, contrary to Appellants' suggestion, the Board
did not hold a claim like claim 2 of Example 21, or any claim in
US 7,035,914 Bl for that matter, patent-eligible as a matter of law. Instead,
the Board found that the Petitioner had not "shown sufficiently that
claims 1-3, 7, and 22-24 [of US 7,035,914 Bl] are more likely than not
unpatentable as being directed to patent-ineligible subject matter under
35 U.S.C. § 101." Id. at *10 ("Petitioner's generalized arguments, not
directed to the specific language of the challenged claims, are insufficient to
show that the claims more likely than not are directed to a patent-ineligible
abstract idea.").
Even were that not so, we do not agree with Appellants that claim 2 of
Example 21 is comparable to the present claims. Appellants observe that
claim 2 of Example 21 recites
wherein the alert activates the stock viewer application to cause
the stock quote alert to display on the remote subscriber
computer and to enable connection via the URL to the data
source over the Internet when the wireless device is locally
connected to the remote subscriber computer and the remote
subscriber computer comes online activates [a] stock viewer
application to cause the stock quote alert to display on the remote
subscriber computer and to enable connection via the URL to the
data source over the Internet when the wireless device is locally
5 See July 2015 Update, Appendix 1: Examples (available at
https://www.uspto.gov/sites/default/fi1es/ documents/ieg-july-2015-
app l .pdf).
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connected to the remote subscriber computer and the remote
subscriber computer comes online
and assert that the present claims are "very similar to Example 21 insofar as
they recite one device activating other components and imposing access-
controlling intervening measures" (App. Br. 8-9). Yet, the USPTO
determined that claim 2 was patent-eligible because the claimed invention
addressed the Internet-centric challenge of alerting a subscriber with time-
sensitive information when the subscriber's computer is offline. We are not
persuaded that the present claims address any comparable Internet-centric
challenge.
We also are not persuaded of Examiner error by Appellants' argument
that even if the claims are directed to an abstract idea, the claims are
nonetheless patent-eligible because allowance of the claims will not preempt
others from practicing "methods of managing position concentration risk"
(id. at 9-10). There is no dispute that the Supreme Court has described "the
concern that drives [the exclusion of abstract ideas from patent eligible
subject matter] as one of pre-emption." Alice Corp., 134 S. Ct. at 2354. But
characterizing preemption as a driving concern for patent eligibility is not
the same as characterizing preemption as the sole test for patent eligibility.
"The Supreme Court has made clear that the principle of preemption is the
basis for the judicial exceptions to patentability" and "[ f]or this reason,
questions on preemption are inherent in and resolved by the§ 101 analysis."
Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir.
2015) (citingAlice Corp., 134 S. Ct. at2354). "[P]reemptionmaysignal
patent ineligible subject matter, [but] the absence of complete preemption
does not demonstrate patent eligibility." Id.
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Appellants also misapprehend the controlling precedent to the extent
Appellants maintain that the claimed invention is patent-eligible because the
claims are allegedly novel and/or non-obvious in view of the prior art (App.
Br. 10 ("[T]he claims as a whole may not be considered abstract because, at
a minimum, the claims include novel features (e.g., using a threshold level
module, etc.) that transform whatever abstract elements may allegedly exist
into a novel and meaningful application thereof."). A finding of novelty or
non-obviousness does not automatically lead to the conclusion that the
claimed subject matter is patent-eligible. Although the second step in the
Mayo/Alice framework is termed a search for an "inventive concept," the
analysis is not an evaluation of novelty or non-obviousness, but rather, a
search for "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., 134 S. Ct. at 2355.
"Groundbreaking, innovative, or even brilliant discovery does not by itself
satisfy the§ 101 inquiry." Ass 'nfor Molecular Pathology v. Myriad
Genetics, Inc., 569 U.S. 576, 591 (2013). A novel and non-obvious claim
directed to a purely abstract idea is, nonetheless, patent-ineligible. See
Mayo, 566 U.S. at 90; see also Diamond v. Diehr, 450 U.S. 175, 188-89
( 1981) ("The '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 § 101 categories of possibly patentable subject
matter.").
Citing In re Alappat, 33 F.3d 1526, 1543 (Fed. Cir. 1994), Appellants
ostensibly argue that the claims are tied to a particular machine, and are,
thus, patent-eligible because a general purpose computer becomes a special
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purpose computer once it is programmed to perform particular functions
pursuant to instructions from program software (App. Br. 10-11). However,
the Federal Circuit, in Eon Corp. v. AT&T Mobility LLC, 785 F.3d 616
(Fed. Cir. 2015), explicitly noted that "Alappat has been superseded by
Bilski and Alice Corp." Id. at 623 ( citations omitted). And, as the Supreme
Court made clear in Alice, the recitation of generic computer limitations is
not enough to transform an otherwise patent-ineligible abstract idea into a
patentable invention. See Alice Corp., 134 S. Ct. at 2358.
We also are not persuaded by Appellants' argument that "the
Examiner has not met the burden of establishing a rejection under § 101"
(App. Br. 10-11 ). Appellants note that the Supreme Court, in Bilski v.
Kappas, 561 U.S. 593 (2010), and in Alice, cited authority (i.e., three finance
textbooks in Bilski and a textbook from 1896 in Alice), to substantiate its
finding in Bilski, that "hedging," and in Alice, that "intermediated
settlement," is a fundamental economic practice (id.). And Appellants
ostensibly maintain that the Examiner is likewise required to produce
evidence here in order to establish a prima facie case of patent-ineligibility
(id. at 11 ( arguing that "the Examiner has not produced any evidence that,
for example, Appellants' claims are a fundamental economic practice")).
Yet, we find nothing in Bilski or Alice that requires an examiner to
provide evidentiary support in every case before a conclusion can be made
that a claim is directed to an abstract idea. Nor have Appellants articulated
sufficiently their assertion that the Administrative Procedure Act imposes
any such requirement (id.). Although evidence may be helpful, e.g., where
facts are in dispute, it is not always needed. See Mortgage Grader, Inc. v.
First Choice Loan Servs. Inc., 811 F.3d 1314, 1325-26 (Fed. Cir. 2016)
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("[I]t is also possible, as numerous cases have recognized, that a§ 101
analysis may sometimes be undertaken without resolving fact issues.").
Appellants' bare assertion that evidence is needed here, without any
supporting reasoning as to why, is insufficient to require the Examiner to
provide evidentiary support. 6
The Federal Circuit, moreover, has repeatedly observed that "the
prima facie case is merely a procedural device that enables an appropriate
shift of the burden of production." Hyatt v. Dudas, 492 F.3d. 1365, 1369
(Fed. Cir. 2007) (citing In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992)).
The court has, thus, held that the USPTO carries its procedural burden of
establishing a prima facie case when its rejection satisfies the requirements
of 35 U.S.C. § 132 by notifying the applicant of the reasons for the rejection,
"together with such information and references as may be useful in judging
of the propriety of continuing the prosecution of [the] application."
See In re Jung, 637 F.3d 1356, 1362 (Fed. Cir. 2011). Thus, all that is
required of the Office is that it sets forth the statutory basis of the rejection
in a sufficiently articulate and informative manner as to meet the notice
requirement of§ 132. Id.; see also Chester v. Miller, 906 F.2d 1574, 1578
(Fed. Cir. 1990) (Section 132 "is violated when a rejection is so
uninformative that it prevents the applicant from recognizing and seeking to
counter the grounds for rejection.").
In rejecting the pending claims under § 101, the Examiner analyzed
the claims using the Mayo/Alice two-step framework, consistent with the
guidance set forth in the USPTO's 2014 Interim Guidance on Subject Matter
6 We note that the Appellants have put forward no rebuttal evidence
showing the claims are not directed to an abstract idea.
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Eligibility and July 2015 Update, in effect at the time the Final Office
Action was mailed. The Examiner, thus, set forth the statutory basis of the
rejection in a sufficiently articulate and informative manner as to meet the
notice requirement of§ 132. And we find that, in doing so, the Examiner set
forth a proper rejection under§ 101 such that the burden shifted to
Appellants to demonstrate that the claims are patent-eligible.
Appellants cannot reasonably maintain that the rejection was not
understood or that the rejection otherwise fails to satisfy the notice
requirement of§ 132. Indeed, Appellants' understanding of the rejection is
plainly manifested by Appellants' responses, as set forth in their briefs.
Responding to the Examiner's Answer, Appellants variously argue in
the Reply Brief that the Federal Circuit's decisions in Enfzsh, LLC v.
Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016); Bascom Global Internet
Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016); and
McRO "explicitly contradict" many of the reasons for the § 101 rejection
(Reply Br. 2). None of Appellants' arguments is persuasive.
As an initial matter, we cannot agree with Appellants that there is any
parallel between the present claims and those at issue in Enfzsh, which the
Federal Circuit held were directed to "a specific improvement to the way
computers operate." Enfish, 822 F.3d at 1336. Appellants argue that, as
compared to conventional computer systems, the claimed data collection and
processing mechanism improves data accuracy by collecting user data from
among multiple accounts and multiple data sources; improves monitoring
with faster detection of a threshold condition; and improves data access
intervention by not only generating an advisory alert but also automatically
imposing user-specific intervention measures (Reply Br. 2-5). Yet, even
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accepting Appellants' argument, 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. Indeed, the
Federal Circuit applied this distinction in Enfish, in rejecting a§ 101
challenge at the step one stage in the Alice analysis because the claims at
issue focused on a specific type of data structure, i.e., 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, and not merely on asserted
advances in uses to which existing computer capabilities could be put.
Enfzsh, 822 F.3d at 1335-36.
We find no parallel here between independent claims 1 and 39 and the
claims in Enfzsh nor any comparable aspect in claims 1 and 39 that
represents an improvement to computer functionality. The alleged
advantages that Appellants tout do not concern an improvement to computer
capabilities but instead relate to an alleged improvement in managing
position concentration risk exposure for which a computer is used as a tool
in its ordinary capacity.
For much the same reasons, we also cannot agree with Appellants that
there is any parallel between the present claims and those at issue in Bascom
(Reply Br. 5). There, the Federal Circuit held that the second step of the
Mayo/Alice framework was satisfied because the claimed invention
"represents a 'software-based invention[] that improve[s] the performance
of the computer system itself."' Bascom, 827 F.3d at 1351 (stating that like
DDR Holdings, where the patent "claimed a technical solution to a problem
unique to the Internet," the patent in Bascom claimed a "technology-based
solution ... to filter content on the Internet that overcomes existing
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problems with other Internet filtering systems ... making it more dynamic
and efficient") ( citations omitted). As described above, we find no
comparable aspect in claims 1 and 39 that represents an improvement to
computer functionality.
Appellants' argument that the clams are analogous to those at issue in
McRO is likewise unpersuasive (Reply Br. 5-6). The Federal Circuit
premised its determination that the claims in McRO were patent-eligible on
the fact that the claims, when considered as a whole, were directed to a
technological improvement over the existing, manual 3-D animation
techniques and used limited rules in a process specifically designed to
achieve an improved technological result in conventional industry practice.
Appellants assert that, similar to the patent-eligible claims in McRO, the
claimed process implements a novel set of rules that improves on the prior
art processes of managing risk (id. at 6). But we are not persuaded that
managing risk is a technological process, as opposed to a business process or
that activating intervening measures to limit a trader's exposure is a
technological improvement, rather than an improvement to a business
process.
We are not persuaded, on the present record, that the Examiner erred
in rejecting claims 1-3, 7-13, 16-27, 39-51, and 54--59 under 35 U.S.C.
§ 101. Therefore, we affirm the Examiner's rejection.
DECISION
The Examiner's rejection of claims 1-3, 7-13, 16-27, 39-51, and 54--
59 under 35 U.S.C. § 112, first paragraph, is reversed.
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Application 12/430,483
The Examiner's rejection of claims 1-3, 7-13, 16-27, 39-51, and 54--
59 under 35 U.S.C. § 112, second paragraph, is reversed.
The Examiner's rejection of claims 1-3, 7-13, 16-27, 39-51, and 54--
59 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)(l)(iv).
AFFIRMED
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