Ex Parte Joplin

Patent Trial and Appeal Board

Jul 17, 2018

14169819 (P.T.A.B. Jul. 17, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/169,819 01/31/2014
23859 7590 07/19/2018
Ballard Spahr LLP
SUITE 1000
999 PEACHTREE STREET
ATLANTA, GA 30309-3915
FIRST NAMED INVENTOR
Michael A. Joplin
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.
37341.0001U2 1743
EXAMINER
GAW,MARKH
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
07/19/2018 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):
USpatentmail@ballardspahr.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte MICHAEL A. JOPLIN 1
Appeal2017-000658
Application 14/169, 819
Technology Center 3600
Before ANTON W. PETTING, MICHAEL C. ASTORINO, and
ROBERT J. SILVERMAN, Administrative Patent Judges.
PETTING, Administrative Patent Judge.
DECISION ON APPEAL
1 According to Appellant, the real party in interest is Michael A. Joplin.
Appeal Br. 1.
Appeal2017-000658
Application 14/169,819
STATEMENT OF THE CASE2
Michael A. Joplin (Appellant) seeks review under 35 U.S.C. § 134 of a
final rejection of claims 1-20, the only claims pending in the application on
appeal. We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b).
The Appellant invented a way of processing debt portfolios.
Specification para. 3.
An understanding of the invention can be derived from a reading of
exemplary claims 1, 8, and 15, which are reproduced below (bracketed
matter and some paragraphing added).
1. A method of forming an organization, comprising:
[ 1] transferring legal title of a charged off debt portfolio from a
first organization to a second organization,
wherein the debt portfolio comprises a plurality of debt
accounts,
and
wherein the first organization claims an equity sharecash
flow participation right in the second organization as a
positive financial asset;
[2] evaluating worth of the debt portfolio according to a
valuation scheme;
[3] creating a collection plan based on the evaluation;
[ 4] performing collection activities according to the collection
plan resulting in collected funds;
2 Our decision will make reference to the Appellant's Appeal Brief ("Br.,"
filed May 31, 2016) and the Examiner's Answer ("Ans.," mailed July 29,
2016), and Final Action ("Final Act.," mailed May 1, 2015).
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and
[5] providing at least a portion of the collected funds to the first
organization as income to the first organization.
8. A method of evaluating a debt portfolio, comprising:
[ 1] receiving a debt portfolio having a plurality of accounts;
[2] identifying predictive data for one or more of the plurality
of accounts;
[3] comparing one or more accounts in the debt portfolio to one
or more accounts in a debt collection history based on the
predictive data;
and
[ 4] determining a predicted collection value based on the
comparing the one or more accounts in the debt portfolio to the
one or more accounts in the debt collection history.
15. A system, comprising:
a memory having computer-executable instructions encoded
thereon;
and
at least one processor functionally coupled to the memory and
configured, by the computer-executable instructions, for,
[ 1] receiving information of a debt portfolio from a first
organization for a second organization,
wherein the information comprises account data for a
plurality of accounts of the debt portfolio,
[2] evaluating the worth of the debt portfolio according to a
valuation scheme,
[3] generating a collection plan based on the evaluation,
[ 4] receiving collection data indicative of funds collected by the
second organization according to the collection plan,
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and
[ 5] providing an instruction to transfer at least a portion of the
funds collected by the second organization to the first
organization as income to the first organization.
The Examiner relies upon the following prior art:
White US 2002/0198796 Al Dec. 26, 2002
Tilton US 2003/0101120 Al May 29, 2003
O'Neil US 2004/0044604 Al Mar. 4, 2004
Shao US 7,191,150 Bl Mar. 13, 2007
Carroll US 2009/0024881 Al Jan.22,2009
Brenna, Understanding the Bad Bank, McKinsey & Company,
http://www.mckinsey.com/insights/financial_services/understanding_the
_bad_bank (2009).
Investopedia, CFA Level 1 -Fixed Income Investments: 14.23 -
Mortgage-Backed Securities (MBS)" Investopedia
http://www.investopedia.com/ exam-guide/ cfa-level-1/fixed-income-
investments/mbs-mortgage-backed-securities. asp (2008).
Betancourt, How Companies Are Using Your Social Media Data,
http:/web.archive.org/web/20100305034812/http://mashable.com
(2010).
my Fico, myFICO, http://web.archive.org/web/ 20080410012721/
http://www.myfico.com (2014 ).
Sichelman, Lenders May Closely Monitor Borrowers For Life of a
Loan, http://articles.latimes.com (2010).
Wikipedia, Central Processing Unit, http://web.archive.org/web/
20090227014938 (2009).
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Claims 1-20 stand rejected under 35 U.S.C. § 101 as directed to non-
statutory subject matter.
Claims 1-3 and 6 stand rejected under 35 U.S.C. § 103(a) as
unpatentable over Tilton, Brenna, and White.
Claim 4 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Brenna, White, and O'Neil.
Claim 5 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Brenna, White, and Investopedia.
Claim 7 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Brenna, White, and Betancourt.
Claim 8 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton and Carroll.
Claim 9 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, and O'Neil.
Claim 10 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, O'Neil, and myFICO.
Claim 11 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, O'Neil, and Sichelman.
Claim 12 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, and Betancourt.
Claim 13 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, Betancourt, and Shao.
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Claim 14 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, and Shao.
Claim 15 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Wikipedia, Carroll, and White.
Claims 16, 17, and 19 stand rejected under 35 U.S.C. § 103(a) as
unpatentable over Tilton, Wikipedia, Carroll, White, and Brenna.
Claim 18 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Wikipedia, Carroll, White, and O'Neil.
Claim 20 stands rejected under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Wikipedia, Carroll, White, and Shao.
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.
The issues of obviousness tum primarily on whether the art describes the
claim limitations.
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FACTS PERTINENT TO THE ISSUES
The following enumerated Findings of Fact (FF) are believed to be
supported by a preponderance of the evidence.
Facts Related to the Prior Art
Tilton
01. Tilton is directed to asset securitization. Tilton para. 3.
02. Tilton describes securitizing a portfolio of at least 30% (and up
to 100%) distressed commercial credit facilities, such that all of
the securities above the equity or equity-like tranches issued by a
bankruptcy-remote special purpose entity to finance the
acquisition of the portfolio of distressed commercial credit
facilities are eligible to receive investment grade ratings Tilton
para. 3.
03. Securitization of distressed credit facilities has previously
generally been unavailable as an alternative for lenders. In a
traditional securitization of commercial or corporate credit
facilities and/or high yield loans, a portfolio of generally
performing credit facilities, characterized generally by regular
cash flows and predictable recoveries, is sold by a lender or
lenders to a bankruptcy-remote special purpose entity (an "SPE,"
e.g., a bankruptcy-remote special purpose trust, corporation or
limited liability company) that finances the purchase by issuing
asset-backed securities, (e.g., notes or bonds) and equity and/or
equity-like securities to its investors. "Bankruptcy remote", as
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used herein, has the meaning common in securitization
transactions of an entity which, due to governance provisions in
its organizational documents, agreements with equity owners and
creditors, or other measures, is less likely to be subject to a
petition in bankruptcy than a normal operating company. The
underlying pool of generally performing credit facilities is used to
secure or collateralize the asset-backed securities issued to
investors in the SPE and/or to the lender or lenders from whom
the credit facility pool is acquired. Heretofore, securitizations of
commercial credit facilities or high yield bonds have been
comprised principally of relatively high quality collateral with
predictable and scheduled interest and principal payments, thus
assuring predictable and regular cash flows and recoveries. The
asset-backed senior and mezzanine debt instruments issued by the
SPE in a securitization of such commercial credit facilities or high
yield bonds are known to have received investment grade ratings
( e.g., ratings of Baa2/BBB-, or better) from credit rating agencies
(e.g. S&P, Moody's Investor Services ("Moody's") and Fitch, Inc.
("Fitch")) based upon the predictable, regular stream of cash flows
(i.e., interim payments of interest and principal) and the
predictable recoveries (i.e., actual aggregate payouts of interest
and principal) generated by the underlying debt asset pool,
resulting in a high degree of certainty that the SPE can meet in a
timely manner all of its debt service obligations, including
principal and interest. The achievement of such investment grade
ratings for the asset-backed senior and mezzanine debt securities
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issued by the SPE allows the SPE to finance the acquisition of the
credit facility portfolio on a cost-effective basis (investment grade
securities generally bearing a significantly lower interest rate than
non-investment grade securities and generally being more easily
sold in the marketplace). Tilton para. 11.
04. A liquidation analysis may be performed for various asset
classes of the borrower by inputting low and high estimates of
recovery value for each asset category. These estimates are often
based on historical studies of liquidation recoveries for particular
asset classes by industry, written appraisals or other
documentation included in the loan documentation, estimates
obtained from professional liquidators or other experts, and the
experience of the collateral manager. Tilton para. 102.
05. A field may be provided for the anticipated or actual equity
kicker date (if any) for each loan ( e.g., the date the borrower is
sold to a third party, or is recapitalized or the borrower has its debt
restructured), and a field 1054 may be provided for the anticipated
or actual value (if any) of the equity kicker for each loan. As used
by Tilton, "equity kicker" has its common meaning in lending
parlance, namely an interest in the equity of the borrower (e.g.,
capital stock, membership or partnership interests, or warrants,
options or other rights to acquire an equity interest, which are
obtained in connection with a restructuring or refinancing of
existing debt or the issuance of new debt, or in connection with
the granting of a forbearance, waiver, forgiveness of debt or other
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accommodation, or an interest calculated with reference to the
borrower's profits or the performance of its equity). Tilton para.
115.
06. After the collateral manager enters collateral value estimates, a
workout strategy, and workout parameters for each of the loans in
each credit facility in the distressed credit facility portfolio, a loan
valuation is calculated for each loan. Tilton para. 116.
07. Tilton describes several accounts used in a computer model of
cash flow waterfalls (Tilton Fig. 25) within the overall modelling
process (Tilton Fig. 18). Tilton para. 147.
Brenna
08. Brenna is directed to explaining a "Bad Bank." Brenna Title.
09. Brenna describes bad banks. A bank divides its assets into two
categories. Into the bad pile go the illiquid and risky securities
that are the bane of the banking system, along with other troubled
assets such as nonperforming loans. For good measure, the bank
can toss in non-strategic assets from businesses it wants to exit, or
assets it simply no longer wants to own as it seeks to lessen risk
and deleverage the balance sheet. What are left are the good
assets that represent the ongoing business of the core bank. By
segregating the two, the bank keeps the bad assets from
contaminating the good. So long as the two are mixed, investors
and counterparties are uncertain about the bank's financial health
and performance, impairing its ability to borrow, lend, trade, and
raise capital. The bad-bank concept has been used with great
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success in the past and has today become a valuable solution for
banks seeking shelter from the financial crisis. Brenna 1.
10. There are still economic losses and risks on the balance sheet
that must be shared between the good- bank and bad-bank
investors. Brenna 2: para. 4.
White
01. White is directed to debt collection. White para. 1.
02. White describes increasing collections from a set of debt
including determining a collection model for a set of debt owed by
a set of debtors, approximating of a cost of debt collection. White
para. 6.
03. White describes increasing collections from a set of debt
including determining a collection model for a set of debt owed by
a set of debtors, determining an approximate cost of debt
collection, and selecting a compensation package from a plurality
of compensation packages payable to a collection entity for the set
of debt in accordance with the approximate cost of debt collection
and the collection model of the set of debt. White para. 7.
04. White describes increasing collections from a set of debt
including inputting a collection model for a set of debt owed by a
set of debtors into a computer, inputting an approximate cost of
debt collection into the computer, performing a calculation to
determine plural commission rates payable to a collection entity
for the set of debt in accordance with a cost of collecting the set of
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debt and the collection model of the set of debt using the
computer, and outputting the plural commission rates. White
para. 8.
Carroll
05. Carroll is directed to debt valuation systems. Carroll para. 2.
06. Carroll describes debt evaluation for acquisition including
providing a seller with an assessment mechanism for a debt
portfolio, receiving from the seller a proposed price and debt
account information for the debt portfolio based on the use of the
assessment mechanism, and determining whether to acquire the
debt portfolio based on the use of the assessment mechanism.
Carroll para. 8.
07. Carroll describes assessing a portfolio of debt accounts using an
assessment mechanism including collecting debt account
information regarding at least one debt account, storing the debt
account information in an account record, creating a debt
portfolio, wherein the debt portfolio includes at least one debt
account, and valuating the debt portfolio, wherein a valuation
results in a proposed price for the debt portfolio. Carroll para. 9.
08. For the seller, the process of selling a debt portfolio to the buyer
may include various phases, including gathering charged-off
account information, grouping accounts into a portfolio, soliciting
quotes, and final negotiations and sale. The charged-off account
information required to sell a debt portfolio may be detailed and
must meet the requirements of the buyer. The information
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required for each charged-off account may include the details
about the customer, co-debtor if applicable, account terms,
payments, security, charge-off, and lender. The seller may group
various charged-off accounts into a portfolio at the seller's
discretion. During this process, a less sophisticated seller may not
have an accurate estimate of the market value of the portfolio until
the seller receives quotes from potential buyers. Sellers may form
relationships with particular buyers and may prefer to negotiate
with previous buyers of their portfolios. Carroll para. 39.
ANALYSIS
Claims 1-20 rejected under 35 US.C. § 101 as directed to non-statutory
subject matter
Method claim 1 recites transferring legal title, evaluating worth, creating
a collection plan, performing collection activities, and providing funds.
Thus, claim 1 recites a legal action and financial actions, none of which rely
on a computer or any other structure. Method claim 8 recites receiving a
debt portfolio, identifying predictive data and using that data for comparing
account, and determining some value based on the comparison. Thus, claim
8 recites financial actions, none of which rely on a computer or any other
structure. System claim 15 recites receiving debt portfolio information,
evaluating portfolio worth, generating a collection plan, receiving collection
data, and providing some instruction to transfer funds. Thus, claim 15
recites receiving, analyzing, and transmitting data. Data reception, analysis
and modification, and transmission are all generic, conventional data
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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. 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. Legal actions and
financial activities are all generic, conventional operations upon abstract
entities such as legal documents and numbers. The sequence of such
activities is equally generic and conventional. The ordering of the steps is
therefore ordinary and conventional. The remaining claims merely describe
legal and accounting actions, 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)).
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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 segregating underperforming assets from an asset pool without
giving up the beneficial economic ownership of such assets. Final Act. 3.
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 1 recites that it is a method of forming an
organization. The steps in claim 1 result in providing at least a portion of
the collected funds to the first organization as income to the first
organization. The preamble to claim 8 recites that it is a method of
evaluating a debt portfolio. The steps in claim 8 result in determining a
predicted collection value based on the comparing the one or more accounts
in the debt portfolio to the one or more accounts in the debt collection
history. The preamble to claim 15 does not recite what it is directed to, but
the steps in claim 15 result in gathering collection data and transmitting an
instruction to transfer some of the collections. The Specification at
paragraph 3 recites that the invention relates to processing debt portfolios.
Thus, all this evidence shows that claims 1, 8, and 15 are directed to
processing debt portfolios, i.e. debt management and collection. 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
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to an abstract idea. Like the risk hedging in Bilski, the concept of debt
management and collection is a fundamental economic practice long
prevalent in our system of commerce. For evidence one has to only look at
banking systems since before the Medici's. The use of debt management
and collection is also a building block of ingenuity in finance. Thus, debt
management and collection, like hedging, is an "abstract idea" beyond the
scope of §101. See Alice Corp. Pty. Ltd., 134 S. Ct. at 2356.
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 debt
management and collection at issue here. Both are squarely within the realm
of "abstract ideas" as the Court has used that term. See Alice Corp. Pty.
Ltd., 134 S. Ct. at 2357.
Further, claims focused on 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 the claims focused on "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). Claims 1 and 8, unlike the claims found
non-abstract in prior cases, does not even use 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.
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Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314--15 (Fed. Cir. 2016)
(finding claims not abstract because they "focused on a specific asserted
improvement in computer animation.") As such, claim 1 is even more so
directed to the abstract idea of receiving, analyzing, and transmitting data for
not even reciting automated support.
The remaining claims merely describe legal and accounting actions. We
conclude that the claims at issue are directed to a patent-ineligible concept.
The introduction of a computer into the claims would not alter the
analysis at Mayo step two.
[T]he 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 "implement[ 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).
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"[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.
But the instant method claims do not even recite using any form of
automation. As to the system claims, 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.
Taking the claim elements separately, the function performed at each step
of the process is purely conventional. The claims recite data query and
retrieval----one of the most abstract set of operations. The limitation of
providing funds is not an active step, but may be no more than noting some
purpose for funds. 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. 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. 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 Am. Inc. v. InvestPic LLC, 890 F.3d 1016, 1022 (Fed. Cir. 2018).
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Considered as an ordered combination, the components of Appellant's
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, controlling, and
monitoring). The ordering of the steps is therefore ordinary and
conventional.
Viewed as a whole, Appellant's method claims simply recite the concept
of debt management and collection as performed by generic clerical
operations. To be sure, the claims recite doing so by advising one to transfer
title, perform analysis, somehow provide funds, and let one know the results.
But this is no more than abstract conceptual advice on the parameters for
such debt management and collection and the generic clerical 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 financial technology itself. Nor do they effect an
improvement in any other technology or technical field. The 30 pages of
specification spell out different generic equipment and parameters that might
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be applied using this concept and the particular steps such conventional
processing would entail based on the concept of debt management and
collection 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 than an instruction to apply the
abstract idea of debt management and collection using some unspecified,
generic clerical operations. Under our precedents, that is not enough to
transform an abstract idea into a patent-eligible invention. See Alice Corp.
Pty. Ltd., 134 S. Ct. at 2360.
We adopt the Examiner's findings and determinations from Final Action
2--4 and Answer 3-10 and reach similar legal conclusions. In particular, we
are not persuaded by Appellant's argument that "[T]he Examiner failed to
show that it is a fundamental economic principle to transfer charged off
assets in the manner described in claim 1." Br. 10. Transferring charged off
assets is a bookkeeping activity and as such is abstract, as any bookkeeping
entry per se is. Some technological mechanism for performing bookkeeping
may be non-abstract, but the entry resulting and the idea of making the entry
is perceptible only to the human mind.
Further, we are not persuaded by Appellant's argument that the claims
recite an equity share and providing funds. Br. 11. Few concepts are more
abstract than those of equity shares and funds. Neither are tangible and both
rely on human belief in the underlying legal systems for any credibility.
Thus they are the height of abstract concepts perceptible only to the human
mind.
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As to arguments regarding preemption, we note that although
preemption may be the concern driving the exclusion of abstract ideas from
patent-eligible subject matter, preemption is not the test for 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)
(citing Alice, 134 S. Ct. at 2354).
We are not persuaded by Appellants' argument that "[t]hese claim
recitations are not merely generic hardware or steps, but instead are specific
steps and meaningful limitations that transform the claims into patentable
subject matter." Br. 13. This argument is entirely conclusory and ignores
the underlying fact that all of the steps are conventional clerical operations
that may be performed with paper and pencil. The steps are specific only in
the sense they are specified using language. They recite no specific
technological implementation, which is what it means to be specific in an
eligible subject matter sense.
Features such as network streaming and a customized user
interface do not convert the abstract idea of delivering
media content to a handheld electronic device into a concrete
solution to a problem. The features set forth in the claims are
described and claimed generically rather than with the
specificity necessary to show how those components provide
a concrete solution to the problem addressed by the patent.
In particular, claim 14 requires a "network based delivery
resource," but that does not make the claim a patent-eligible
implementation of an abstract idea. The specification makes
clear that any technology capable of wireless communication
of audio information to the device would be covered. See '085
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patent, col. 4, 11. 41-45 ("The present invention
advantageously allows for several different embodiments of
wirelessly communicating selected audio information to
[an] electronic device ... and is not limited to any specific
configuration described below.")
Affinity Labs of Texas, LLC v. Amazon.com Inc., 838 F.3d 1266, 1271
(2016).
Claims 1-3 and 6 rejected under 35 US.C. § 103(a) as unpatentable over
Tilton, Brenna, and White
We are persuaded by Appellant's argument that the references fail to
describe "the first organization claims an equity share cash flow
participation right in the second organization as a positive financial asset."
Br. 15-16. The Examiner cites Brenna 2: para. 4. Final Act. 6. This portion
of Brenna only describes sharing economic losses and risks on the balance
sheet.
Claim 8 rejected under 35 US.C. § 103(a) as unpatentable over Tilton and
Carroll
We are not persuaded by Appellants' argument that "[t]he use of
generalized estimates of asset classes for recovery value, as taught in Tilton,
is clearly not equivalent to the claimed comparison of individual accounts to
collection history data." Br. 17. This argument is not commensurate with
the scope of the claim. The claim does not narrow the manner of
comparison and in particular does not recite doing so on an individual
account by account basis. The claim only recites "comparing one or more
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Application 14/169,819
accounts in the debt portfolio to one or more accounts in a debt collection
history." Claim 8. Doing so in aggregate or in any other means is within the
scope of the claim.
Claim 15 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Wikipedia, Carroll, and White
We are persuaded by Appellants' argument that the references "do not
teach providing an instruction to transfer at least a portion of the funds
collected by the second organization to the first organization as income to
the first organization." Br. 17-18. The Examiner finds that Tilton
paragraph 14 7 describes this. Final Act. 20. This paragraph describes a
modelling process, not a payment process.
Claim 4 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Brenna, White, and O'Neil
This claim depends from claim 1.
Claim 5 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Brenna, White, and Investopedia
This claim depends from claim 1.
Claim 7 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Brenna, White, and Betancourt
This claim depends from claim 1.
Claim 9 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Carroll, and O'Neil
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This claim depends from claim 8 and is argued accordingly.
Claim 10 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Carroll, O'Neil, and myFICO
This claim depends from claim 8 and is argued accordingly.
Claim 11 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Carroll, O'Neil, and Sichelman
This claim depends from claim 8 and is argued accordingly.
Claim 12 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Carroll, and Betancourt
This claim depends from claim 8 and is argued accordingly.
Claim 13 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Carroll, Betancourt, and Shao
This claim depends from claim 8 and is argued accordingly.
Claim 14 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Carroll, and Shao
This claim depends from claim 8 and is argued accordingly.
Claims 16, 17, and 19 rejected under 35 US.C. § 103(a) as unpatentable
over Tilton, Wikipedia, Carroll, White, and Brenna
These claims depend from claim 15 and are argued accordingly.
Claim 18 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Wikipedia, Carroll, White, and O'Neil
This claim depends from claim 15 and is argued accordingly.
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Claim 20 rejected under 35 US.C. § 103(a) as unpatentable over Tilton,
Wikipedia, Carroll, White, and Shao
This claim depends from claim 15 and is argued accordingly.
CONCLUSIONS OF LAW
The rejection of claims 1-20 under 35 U.S.C. § 101 as directed to non-
statutory subject matter is proper.
The rejection of claims 1-3 and 6 under 35 U.S.C. § 103(a) as
unpatentable over Tilton, Brenna, and White is improper.
The rejection of claim 4 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Brenna, White, and O'Neil is improper.
The rejection of claim 5 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Brenna, White, and Investopedia is improper.
The rejection of claim 7 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Brenna, White, and Betancourt is improper.
The rejection of claim 8 under 35 U.S.C. § 103(a) as unpatentable over
Tilton and Carroll is proper.
The rejection of claim 9 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, and O'Neil is proper.
The rejection of claim 10 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, O'Neil, and myFICO is proper.
The rejection of claim 11 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, O'Neil, and Sichelman is proper.
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The rejection of claim 12 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, and Betancourt is proper.
The rejection of claim 13 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, Betancourt, and Shao is proper.
The rejection of claim 14 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Carroll, and Shao is proper.
The rejection of claim 15 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Wikipedia, Carroll, and White is improper.
The rejection of claims 16, 17, and 19 under 35 U.S.C. § 103(a) as
unpatentable over Tilton, Wikipedia, Carroll, White, and Brenna is
improper.
The rejection of claim 18 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Wikipedia, Carroll, White, and O'Neil is improper.
The rejection of claim 20 under 35 U.S.C. § 103(a) as unpatentable over
Tilton, Wikipedia, Carroll, White, and Shao is improper.
DECISION
The rejection of claims 1-20 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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