Ex Parte Himmelstoin

Patent Trial and Appeal Board

Feb 28, 2019

11455556 (P.T.A.B. Feb. 28, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/455,556 06/19/2006
13010 7590 03/01/2019
The Law Office of Patrick F. O"Reilly III, LLC
1509 Lafayette Drive
Columbus, OH 43220-3869
FIRST NAMED INVENTOR
Richard B. Himmelstoin
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.
68940-22 3842
EXAMINER
NILFOROUSH, MOHAMMAD A
ART UNIT PAPER NUMBER
3685
MAIL DATE DELIVERY MODE
03/01/2019 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 RICHARD B. HIMMELSTOIN
Appeal2017-006882
Application 11/455,556 1
Technology Center 3600
Before JOSEPH A. FISCHETTI, SCOTT C. MOORE, and
BRADLEY B. BAY AT, Administrative Patent Judges.
FISCHETTI, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant seeks our review under 35 U.S.C. § 134 of the Examiner's
final rejection of claims 2-15 and 21-26, which are the only claims pending
in the application. We have jurisdiction under 35 U.S.C. § 6(b ).
SUMMARY OF DECISION
We AFFIRM.
1 Appellant identifies "BarterSecurities, Inc." as the real party in interest.
Br. 4.
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Application 11/455,556
THE INVENTION
The title of Appellant's application is an electronic real estate
bartering system (Spec. 1 ).
Claim 2, reproduced below, is illustrative of the subject matter on
appeal.
2. A computerized system for exchanging a first real estate
item for a second real estate item, the system comprising:
a processor; and
a memory storing instructions controlling the operation
of the processor, the instructions directing the processor to:
identify a first real estate item on the computerized
system, selected by a user;
determine a value of the first real estate item as an
amount of the system's own currency;
exchange by the computerized system the first real
estate item for the amount of the system's own currency;
select on the computerized system criteria
identified by the user;
display on the computerized system a list of at
least one matching real estate item based on the criteria;
select on the computerized system a second real
estate item identified by the user from the list of the at
least one matching real estate item; and
process by the computerized system an exchange
of the second real estate item for the amount of the
system's own currency, whereby a deferred exchange of
the first real estate item for the second real estate item is
completed.
THE REJECTIONS
The Examiner relies upon the following as evidence of
unpatentability:
Tometta
Deming
us 4,870,576
us 5,500,793
2
Sept. 26, 1989
Mar. 19, 1996
Appeal2017-006882
Application 11/455,556
Graff
Forward
Mini
Moore
Lundberg
Churchill
US 6,192,347 Bl
US 6,578,011 B 1
US 6,684,196 Bl
US 6,847,938 Bl
US 7,340,432 B 1
US 7,461,022 Bl
The following rejections are before us for review:
Feb.20,2001
June 10, 2003
Jan. 27, 2004
Jan.25,2005
Mar. 4, 2008
Dec. 2, 2008
Claims 2-15 and 21-26 are rejected under 35 U.S.C. § 101 as being
directed to a judicial exception without significantly more.
Claims 3-15 and 21-26 are rejected under 35 U.S.C. § 112(b) or
35 U.S.C. § 112 (pre-AIA), second paragraph, as being indefinite.
Claims 2, 3, 8, 10, 21, and 24--26 are rejected under pre-AIA
35 U.S.C. § I03(a) as being unpatentable over Deming in view of Lundberg.
Claim 4 is rejected under pre-AIA 35 U.S.C. § I03(a) as being
unpatentable over Deming in view of Lundberg and further in view of Graff.
Claims 5 and 9 are rejected under pre-AIA 35 U.S.C. § I03(a) as
being unpatentable over Deming in view of Lundberg and further in view of
Churchill.
Claims 6 and 22 are rejected under pre-AIA 35 U.S.C. § I03(a) as
being unpatentable over Deming in view of Lundberg and further in view of
Mini.
Claim 7 is rejected under pre-AIA 35 U.S.C. § I03(a) as being
unpatentable over Deming in view of Lundberg and further in view of
Moore.
Claims 11, 12, 14, and 23 are rejected under pre-AIA 35 U.S.C.
§ I03(a) as being unpatentable over Deming in view of Lundberg and
further in view of Forward.
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Claim 13 is rejected under pre-AIA 35 U.S.C. § 103(a) as being
unpatentable over Deming in view of Lundberg and Forward, and further in
view of Graff.
Claim 15 is rejected underpre-AIA 35 U.S.C. § 103(a) as being
unpatentable over Deming in view of Lundberg and further in view of
Tometta.
FINDINGS OF FACT
We adopt the Examiner's findings as set forth on pages 2-7 of the
Final Office Action (mailed Jan. 8, 2016) and pages 2--4 of the Answer
(mailed Jan. 23, 2017) concerning only the rejection under 35 U.S.C. § 101.
ANALYSIS
35 U.S.C. § 101 REJECTION2
We will affirm the rejection of claims 2-15 and 21-26 under
35 U.S.C. § 101. Appellant argued all the claims as a group. (Br. 7). We
select claim 2 as the representative claim for this group, and, thus, the
remaining claims stand or fall with claim 2. See 37 C.F.R. § 4I.37(c)(l)(iv).
An invention is patent-eligible if it claims a "new and useful process,
machine, manufacture, or composition of matter." 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: "[l]aws of nature, natural phenomena, and abstract
ideas" are not patentable. E.g., Alice Corp. v. CLS Bank Int 'l, 573 U.S. 208,
216 (2014).
2 In a prior decision on Appeal 2012-012370 mailed April 24, 2015, the
Board issued a New Ground of Rejection of claims 2-15 and 21-26 under
35 U.S.C. § 101.
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In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court's two-step framework, described in Mayo
and Alice. Id. at 217-18 ( citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75-77 (2012)). In accordance with that framework,
we first determine what concept the claim is "directed to." See id. at 219
("On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk."); see also Bilski v. Kappas, 561 U.S. 593, 611 (2010) ("Claims 1 and 4
in petitioners' application explain the basic concept of hedging, or protecting
against risk . . . . ").
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219-20; Bilski, 561 U.S. at 611 );
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594--95 (1978)); and
mental processes (Gottschalkv. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 192
( 1981) ); "tanning, dyeing, making waterproof cloth, vulcanizing India
rubber, smelting ores" (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267---68 (1853))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that "[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula." Diehr, 450 U.S. at 187; see also id. at 191 ("We
view respondents' claims as nothing more than a process for molding rubber
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products and not as an attempt to patent a mathematical formula."). Having
said that, the Supreme Court also indicated that a claim "seeking patent
protection for that formula in the abstract ... is not accorded the protection
of our patent laws, and this principle cannot be circumvented by attempting
to limit the use of the formula to a particular technological environment."
Id. (internal citation omitted) ( citing Benson and Flook); see, e.g., id. at 187
("It is now commonplace that an application of a law of nature or
mathematical formula to a known structure or process may well be deserving
of patent protection.").
If the claim is "directed to" an abstract idea, we tum to the second
step of the Alice and Mayo framework, where "we must examine the
elements of the claim to determine whether it contains an '"inventive
concept'" sufficient to 'transform' the claimed abstract idea into a patent-
eligible application." Alice, 573 U.S. at 221 ( citation omitted). "A claim
that recites an abstract idea must include 'additional features' to ensure 'that
the [claim] is more than a drafting effort designed to monopolize the
[abstract idea]."' Id. (alterations in original) (quoting Mayo, 566 U.S. at 77).
"[M]erely requir[ing] generic computer implementation[] fail[ s] to transform
that abstract idea into a patent-eligible invention." Id.
The PTO recently published revised guidance on the application of
§ 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed.
Reg. 50 (Jan. 7, 2019) ("2019 Memorandum"). Under that guidance, we
first look to whether the claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
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organizing human interactions such as a fundamental economic
practice, or mental processes); and
(2) additional elements that integrate the judicial exception into
a practical application, i.e., that "apply, rely on, or use the judicial
exception in a manner that imposes a meaningful limit on the judicial
exception, such that the claim is more than a drafting effort designed
to monopolize the judicial exception." 2019 Memorandum, 84 Fed.
Reg. at 54; see also MPEP § 2106.05(a}-(c), (e}-(h).
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then look to
whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is not "well-understood, routine, conventional" in the field (see MPEP
§ 2106.05(d)); or
( 4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high level of
generality, to the judicial exception.
See generally 2019 Memorandum.
The Federal Circuit has explained that "the 'directed to' inquiry
applies a stage-one filter to claims, considered in light of the [S]pecification,
based on whether 'their character as a whole is directed to excluded subject
matter."' Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir.
2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d
1343, 1346 (Fed. Cir. 2015)). It asks whether the focus of the claims is on a
specific improvement in relevant technology or on a process that itself
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qualifies as an "abstract idea" for which computers are invoked merely as a
tool. See id. at 1335-36.
In so doing, as indicated above, we apply a "directed to" two-prong
test: 1) evaluate whether the claim recites a judicial exception, and 2) if the
claim recites a judicial exception, evaluate whether the claim "appl[ies ],
rel[ies] on, or use[ s] the judicial exception in a manner that imposes a
meaningful limit on the judicial exception, such that the claim is more than a
drafting effort designed to monopolize the judicial exception." See 2019
Memorandum, 84 Fed. Reg. at 54.
The Examiner determined that the claims "are directed to the abstract
idea of performing a deferred exchange in which currency is used to account
for differences in value between the items that are exchanged." Final Act.
10. The Examiner provides evidence that, "[a]s described in the
specification, the system effectuates a tax-deferred exchange of barter items,
such as real estate" and "[ d]eferred exchanges are a strategy that is designed
to permit a property owner to trade one property for another without
incurring federal income tax liability." Id. ( citing Spec. 3).
We agree that the claims are directed to a transaction in which value
exchanged, is system specific currency, which we determine is a
fundamental economic principle. The patent-ineligible end of the spectrum
includes fundamental economic practices. Alice, 573 U.S. at 220.
Turning to the second prong of the "directed to" test, claim 2 only
generically requires "a computerized system," "a processor," and "a
memory." We fail to see how the generic recitations of these most basic of
computer components so integrate the judicial exception as to "impose[] a
meaningful limit on the judicial exception, such that the claim is more than a
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drafting effort designed to monopolize the judicial exception." 2019
Memorandum, 84 Fed. Reg. at 54.
Thus, we determine that the claims recite the judicial exception of a
fundamental economic principle.
That the claims do not preempt all forms of the abstraction or may be
limited to real estate transactions, does not make them any less abstract. See
OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362-63 (Fed. Cir.
2015) ("[T]hat the claims do not preempt all price optimization or may be
limited to price optimization in the e-commerce setting do not make them
any less abstract.").
Turning to the second step of the Alice framework, because we
determined that the claims are directed to abstract ideas/judicial exceptions,
the claims must include an "inventive concept" in order to be patent-eligible,
i.e., there must be an element or combination of elements sufficient to ensure
that the claim in practice amounts to significantly more than the abstract idea
itself. See Alice, 573 U.S. at 217-18 (quoting Mayo, 566 U.S. at 72-73).
Concerning this step, the Examiner found:
The claims do not include additional elements that are
sufficient to amount to significantly more than the judicial
exception because while the claims require a processor and a
memory, the steps recited in the claim only involve generic
computer functions, such as receiving inputs and selections,
performing calculations, and updating records in a database.
Such limitations, specified at a high level of generality, do not
make the abstract idea of performing a deferred exchange of
real estate items patentable.
Final Act. 11.
We agree with the Examiner. "[T]he relevant question is whether the
claims here do more than simply instruct the practitioner to implement the
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abstract idea ... on a generic computer." Alice, 573 U.S. at 225. 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 identify, determine, retrieve, select, display, and apply decision
criteria to data and store a result amounts to electronic data query and
retrieval----one of the most basic functions of a computer. All of these
computer functions are well-understood, routine, conventional activities
previously known to the industry. See Elec. Power Grp., LLC v. Alstom
S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016); see also In re Katz Interactive
Call Processing Patent Litig., 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.
Considered as an ordered combination, the computer components of
Appellant's claims add nothing that is not already present when the steps are
considered separately. The sequence of data reception-analysis and
displaying 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) (holding that sequence of data retrieval, analysis, modification,
generation, display, and transmission was abstract); Two-Way Media Ltd. v.
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Comcast Cable Commc 'ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017)
(holding sequence of processing, routing, controlling, and monitoring was
abstract). The ordering of the steps is, therefore, ordinary and conventional.
Thus, the claims at issue amount to nothing significantly more than
instructions to apply the abstract idea of a transaction using some
unspecified, generic computer. Under our precedents, that is not enough to
transform an abstract idea into a patent-eligible invention. See Alice,
573 U.S. at 226.
We have reviewed Appellant's arguments (Br. 7-10) concerning the
patent eligibility under 35 U.S.C. § 101. Our analysis above substantially
covers the substance of Appellant's argument. But, for purposes of
completeness, we will address argument in order to make an individual
rebuttal of same.
Appellant argues:
Independent claims 2 and 3, and all remaining claims 4-15 and
21-26 through dependency, include a specific limitation that
any exchanges accomplished using the claimed invention must
be processed based on the "system's own currency." This
limitation narrows the broadest reasonable interpretation of the
claims to exclude virtually all previously known tax-deferred
exchanges.
Br. 8-9.
We disagree with Appellant because "a claim for a new abstract idea
is still an abstract idea." Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d
1138, 1151 (Fed. Cir. 2016) (citing Mayo, 566 U.S. at 90). The limitation of
processing a transaction by the "system's own currency" is an abstract idea
as it pertains to currency, which is a fundament economic principle.
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35 U.S.C. § 112 REJECTION
We will not sustain the rejection of claims 3-15 and 21-26 under 35
U.S.C. § 112 (pre-AIA), second paragraph.
Concerning claim 3, the Examiner states: "Claim 3 then recites
'receive an identification ... by a user.' This limitation recites a function
that is performed by a user. It is unclear [to] one of ordinary skill how the
stored instructions can direct a processor to perform a function by a user."
Final Act. 13; Ans. 5.
We disagree with the Examiner's interpretation of the claim language.
The limitation is not an action performed by a user, but rather, an action of
the processor to "receive" an ID.
Regarding claim 25, the Examiner finds there is insufficient
antecedent basis for "the closest matching real estate item." The
Specification provides that "the system 100 may continually update the
closest matches, thereby permitting an individual to either ignore, choose
one, or choose multiple ones. If the individual chooses a match or several
matches, with excess remaining funds, these excess funds are held in
escrow." Specification 33: 1--4. So, "the closest matches" refer to one or
more matches.
The Examiner identifies as problematic, the term "the age" in claim 5.
But, "the age" of the system's own currency recitation, which refers to the
length of time an IOU is held (Spec. 7), is inherent in claim 5 because all
things hold time in existence, or age.
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35 U.S.C. § 103(a) REJECTION
All claims are rejected under 35 U.S.C. § 103(a) based at least on
Lundberg US 7,340,432, which issued on March 4, 2008, and has a U.S
filing date of December 16, 1999.
The present application, 11/455,556, has a U.S. filing date of June 19,
2006, and in the Oath, claims the benefit of U.S. Application 09/454,035,
filed on December 3, 1999, which issued as U.S. Patent 7,080,050.
The Examiner asserts that because the Specification does not
reference the parent application, Appellant is not entitled to the filing date of
the parent application. Ans. 22-23. We agree.
On review of the record, we find that the Oath of the present
application does reference and claim priority based on application
09/454,035. The present application is still pending. Therefore, the
omission is not fatal because the Specification could be amended 3 to include
a reference to parent application 09/454,035, which was properly referenced
in the Oath filed as part of the application before us here on appeal.
3See 35 U.S.C. § 120 ("An application for patent for an invention disclosed
in the manner provided by section 112(a) (other than the requirement to
disclose the best mode) in an application previously filed in the United
States, or as provided by section 363 or 385 which names an inventor or
joint inventor in the previously filed application shall have the same effect,
as to such invention, as though filed on the date of the prior application, if
filed before the patenting or abandonment of or termination of proceedings
on the first application or on an application similarly entitled to the benefit
of the filing date of the first application and if it contains or is amended to
contain a specific reference to the earlier filed application. No application
shall be entitled to the benefit of an earlier filed application under this
section unless an amendment containing the specific reference to the earlier
filed application is submitted at such time during the pendency of the
application as required by the Director.").
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However, we take the application as it stands on appeal which means
Appellants have not satisfied the requirements ofMPEP §§ 211.01 I, II in
order to obtain the earlier filing date. As far as relying on provisional
application 60/154, 840, we note that that provisional application is also not
referenced in the present application, nor in application 09/666,725, which is
referenced in the present application. Provisional application 60/154,840
was filed on September 20, 1999. But, neither the present application
Specification or that of its parent, 09/666,725, now U.S. 7,158,956, indicate
the relationship between applications. Therefore, we agree with the
Examiner that Appellants have not perfected their claim of priory based on
these applications at least as required by MPEP §§ 211.02 I, II.
Independent claims 2 and 3, the only independent claims before us on
appeal, recite in one form or another, "process by the computerized system
an exchange of the second real estate item for the amount of the system's
own currency, whereby a deferred exchange of the first real estate item for
the second real estate item is completed."
Concerning Lundberg, Appellants argue that "[b ]ased on the
definition provided by Lundberg, trade credits are not 'a system's own
currency.' The 'system's own currency' of the present invention is not
issued by a trading company, and they are not redeemable in combination
with cash for products between companies." (Appeal Br. 12).
The Examiner determines concerning the limitation, "system's own
currency, whereby a deferred exchange of the first real estate item for the
second real estate item is completed", that "wherein/whereby" clauses,
according to the MPEP, a 'whereby clause in a method claim is not given
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weight when it simply expresses the intended result of a process step
positively recited."' (Final Act. 16, Answer 8).
We disagree with the Examiner. We construe this "whereby clause"
to be functional language in that it functions to complete the transaction,
albeit inferentially. As functional language, we are required to give the
involved functional language weight to the extent that the prior art is or is
not capable of meeting the limitation. In re Schreiber, 128 F.3d 1473, 1477-
78 (Fed. Cir. 1997). The Examiner has not shown how Lundberg is capable
of performing the deferred exchange. Therefore, we find reversible error in
the Examiner's rejection of independent claims 2 and 3 under 35 U.S.C. §
103(a).
Since claims 4--15 and 21-26 depend from claim 3, and since we
cannot sustain the rejection of claim 3, the rejection of the dependent
claims likewise cannot be sustained.
CONCLUSIONS OF LAW
We conclude the Examiner did not err in rejecting claims 2-15 and
21-26 under 35 U.S.C. § 101.
We conclude the Examiner did err in rejecting claims 3-15 and 21-26
under 35 U.S.C. § 112.
We conclude the Examiner did err in rejecting claims 2-15 and 21-26
under 35 U.S.C. § 103(a).
DECISION
The decision of the Examiner to reject claims 2-15 and 21-26 is
affirmed.
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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).
AFFIRMED
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