Ex Parte Kopelman et al

Patent Trial and Appeal Board

Oct 16, 2017

13442331 (P.T.A.B. Oct. 16, 2017)

United States Patent and Trademark Office
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
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
13/442,331 04/09/2012 Joshua M. Kopelman 2043.047U10 6742
49845 7590 10/18/2017
SCHWEGMAN LUNDBERG & WOESSNER/EBAY
P.O. BOX 2938
MINNEAPOLIS, MN 55402
EXAMINER
CRAWLEY, TALIA F
ART UNIT PAPER NUMBER
3687
NOTIFICATION DATE DELIVERY MODE
10/18/2017 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):
USPTO@SLWIP.COM
SLW @blackhillsip.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JOSHUA M. KOPELMAN and SRINIVAS BALIJEPALLI
Appeal 2016-001507
Application 13/442,331
Technology Center 3600
Before ANTON W. FETTING, MICHAEL W. KIM, and AMEE A. SHAH,
Administrative Patent Judges.
FETTING, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE1
Joshua M. Kopelman and Srinivas Balijepalli (Appellants) seek
review under 35 U.S.C. § 134 of a non—final rejection of claims 1—25, the
only claims pending in the application on appeal. We have jurisdiction over
the appeal pursuant to 35 U.S.C. § 6(b).
1 Our decision will make reference to the Appellants’ Appeal Brief (“App.
Br.,” filed March 20, 2015) and Reply Brief (“Reply Br.,” filed November
19, 2015), and the Examiner’s Answer (“Ans.,” mailed September 21,
2015), and Non-Final Action (“Non-Final Act.,” mailed August 21, 2014).
Appeal 2016-001507
Application 13/442,331
The Appellants invented a way of using communication networks to
price goods in electronic commerce applications. Specification para. 2.
An understanding of the invention can be derived from a reading of
exemplary claim 1, which is reproduced below (bracketed matter and some
paragraphing added).
1. A computer-implemented method comprising:
[1] receiving from a seller,
via a communications network,
data identifying a good offered for sale by the seller
at an unspecified fixed price
to be determined by a marketeer controller
as a function of a third party's price for a
comparable good;
[2] querying a third party to determine a price for a comparable
good;
[3] receiving, via the communications network, the price for
the comparable good;
and
[4] using the marketeer controller, establishing a sale price for
the good based on the price for the comparable good.
The Examiner relies upon the following prior art:
Nahan US 5,664,111
Walker US 5,797,127
Stack US 6,076,070
Sept. 2, 1997
Aug. 18, 1998
June 13, 2000
Claims 1—25 stand rejected under 35 U.S.C. § 101 as directed to
non—statutory subject matter.
Claims 1—11, 13—18, 20, and 22—25 stand rejected under 35 U.S.C.
§ 103(a) as unpatentable over Stack and Walker.
Claims 12 and 19 stand rejected under 35 U.S.C. § 103(a) as
unpatentable over Stack, Walker, and Official Notice.
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Claim 21 stands rejected under 35 U.S.C. § 103(a) as unpatentable
over Stack, Walker, Official Notice, and Nahan.
ISSUES
The issues of eligible subject matter turn primarily on whether the
claims recite more than abstract conceptual advice. The issues of
obviousness turn primarily on the breadth of the word “based.”
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
Stack
01. Stack is directed to the use of computer networks
(such as the Internet) for the purchase of goods and/or services,
and more specifically relates to a computer-implemented method
for on-line comparison of competitors’ prices and automatic price
reduction, over a distributed computer network such as the
Internet’s World Wide Web. Stack 1:7—13.
02. Stack describes a computer implemented on-line
price comparison over a computer network of requesting a
competitor’s price for an item over the computer network,
detecting whether the competitor’s price was received, displaying
the competitor's price, decreasing an item price by a
predetermined amount to create a new price if the competitor’s
price is less than the item price and the competitor’s price is
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greater than a predetermined threshold, and displaying the new
price. Stack 2:51—60.
03. Stack’s computer program compares the
competitor’s price for the item to the vendor's price. If the
competitor’s price is less than (or alternatively equal to) the
vendor's price, then the method proceeds to step 150. If the
vendor’s price is already lower than the competitor’s price, there
is no need to perform price reduction and the method terminates.
In step 150, the competitor’s price is compared to a predetermined
threshold to see if the vendor’s item price can be reduced. If the
competitor’s price is below the predetermined threshold, the item
price will not be lowered to be less than or equal to the
competitor’s price. In this way, the vendor can set a lower limit
beyond which he or she will not reduce the item price. This
feature prevents automatic price reduction below the vendor’s cost
or below a minimum target profit. In step 160, if it has been
determined that the item price can be lowered, the item price is
lowered to create a new price for the specified item. The amount
by which the item price may be lowered is set by the vendor.
Stack 3:62-4:15.
Walker
04. Walker is directed to pricing and selling airline
tickets. Walker 1:8—9.
05. Walker describes pricing options to purchase
airline tickets. This method includes inputting information
specifying where a customer wishes to depart from and where he
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wishes to fly to, and at least one time when the customer desires to
travel. A price for an option that gives the customer a right to
purchase a ticket to fly from the origin to the destination during a
desired time is calculated and output. The purchase price of the
ticket is one of the terms of the option. Walker 2:34-43.
06. Walker describes its flight information (and
optional customer data) from the agent terminal being received.
The central controller calculates the price of an option based on
the flight information received from the agent terminal together
with information from the option database. When the flight
information includes multiple flights, the price of the option may
be simply the lowest price selected from a set of individual
options on each of the flights which the customer may ultimately
fly on. Alternatively, that price can be discounted below that level
by a predetermined percentage depending on the number of flights
included in the flight information. A more sophisticated model
could determine the probability of an empty seat on any one of a
given number of flights, and compute the price of the option
accordingly. Walker 6:5—27.
ANALYSIS
Claims 1—25 rejected under 35 U.S.C. § 101 as directed to
non—statutory subject matter
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,. . .
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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 Inti, 134 S.Ct. 2347, 2355 (2014) (citing
Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct.
1289 (2012)).
To perform this test, we must first determine whether the claims at
issue are directed to a patent-ineligible concept. The Examiner finds the
claim directed to establishing a sales price for an item posted for sale. Final
Act. 3.
While the Court in Alice made a direct finding 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 does not recite what the method is directed
to, but the steps in claim 1 result in establishing a sale price. The
Specification at paragraph 2 recites that the invention relates to using
communication networks to price goods in electronic commerce
applications. Thus, all this evidence shows that claim 1 is directed to price
goods, i.e. pricing. This is consistent with the Examiner’s finding.
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It follows from prior Supreme Court cases, and Bilski (Bilski v
Kappos, 561 U.S. 593 (2010)) in particular, that the claims at issue here are
directed to an abstract idea. Like the risk hedging in Bilski, we have no
trouble finding that the concept of pricing is a fundamental business practice
long prevalent in our system of commerce. The use of pricing is also a
building block of marketing. See Versata Dev. Group, Inc. v. SAP America,
Inc., 793 F.3d 1306, 1333—34 (determining a price using hierarchies is a
building block and abstract idea). Thus, pricing, like hedging, is an “abstract
idea” beyond the scope of §101. See Alice Corp. Pty. Ltd. 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 pricing at
issue here. Both are squarely within the realm of “abstract ideas” as the
Court has used that term. See Alice Corp. Pty. Lid.at 2357.
The remaining claims merely describe timing and pricing parameters.
We conclude that the claims at issue are directed to a patent-ineligible
concept.
The introduction of a computer into the claims does not alter the
analysis at Mayo step two.
the mere recitation of a generic computer cannot
transform a patent-ineligible abstract idea into a patent-eligible
invention. Stating an abstract idea “while adding the words
‘apply if” 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
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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
feature[e]” that provides any “practical assurance that the
process is more than a drafting effort designed to monopolize
the [abstract idea] itself.”
Alice Corp. Pty. Ltd., 134 S.Ct. at 2358 (citations omitted).
“[T]he relevant question is whether the claims here do more than
simply instruct the practitioner to implement the abstract idea ... on a
generic computer.” Alice Corp. Pty. Ltd., 134 S.Ct. at 2359. They do not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to receive, query, and compute data 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. 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
Appellants’ method add nothing that is not already present when the steps
are considered separately. Viewed as a whole, Appellants’ method claims
simply recite the concept of pricing as performed by a generic computer.
The method claims do not, for example, purport to improve the functioning
of the computer itself. Nor do they effect an improvement in any other
technology or technical field. Instead, the claims at issue amount to nothing
significantly more than an instruction to apply the abstract idea of pricing
using some unspecified, generic computer. Under our precedents, that is not
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enough to transform an abstract idea into a patent-eligible invention. See
Alice Corp. Pty. Ltd. at 2360.
As to the structural claims, they
are no different from the method claims in substance. The
method claims recite the abstract idea implemented on a generic
computer; the system claims recite a handful of generic
computer components configured to implement the same idea.
This Court has long “wam[ed] . . . against” interpreting §
101“in ways that make patent eligibility ‘depend simply on the
draftsman’s art.’
Alice Corp. Pty. Ltd. at 2360.
We are not persuaded by Appellants' argument that “the rejection will
require factual evidence to support a finding that claim is directed to an
abstract idea. It will also require evidence and clear reasoning to support a
finding that a claim is not directed to something more.” App. Br. 9. We
find supra the claims and Specification themselves provide adequate
evidence that the claims are directed to pricing, and that the remaining
limitations are no more than abstract advice as to conventional
programming. Pricing per se is too notoriously old a practice to consider
there to be any question that it is a fundamental practice.
We are not persuaded by Appellants' argument that the claim is not
directed to pricing, but to facilitating sales and pricing of goods by removing
direct price control from the buyer and the seller of the goods. App. Br.
11—12. Appellants conflate the two parts of the Alice test. The first part
asks about what the claim is directed toward. It is the second part that looks
to how it does so. The evidence cited supra shows the claims to be directed
to pricing.
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We are not persuaded by Appellants’ argument that the Specification
describes non-abstract limitations. Id. The Specification is not imported
into the claims.
We are not persuaded by Appellants’ argument that claims at issue are
not directed to an idea or algorithm of itself. App. Br. 12—15. As we find
supra, the claims are directed to pricing, which is a fundamental economic
practice.
We are not persuaded by Appellants’ argument that even if claims are
directed to an abstract idea, they are not directed to an unpatentable abstract
idea. App. Br. 15—19. Appellants first point to the cited information sources
upon which pricing is predicated. Id. But these sources are no more than
abstract conceptual advice on where to obtain pricing data.
Appellants further argue that the asserted claims are akin to the
claims found patent-eligible in DDR Holdings, LLC v. Hotels.com, L.P.
773 F.3d 1245 (Fed. Cir. 2014). In DDR Holdings, the Court evaluated
the eligibility of claims “address[ing] the problem of retaining website
visitors that, if adhering to the routine, conventional functioning of
Internet hyperlink protocol, would be instantly transported away from a
host’s website after ‘clicking’ on an advertisement and activating a
hyperlink.” Id. at 1257. There, the Court found that the claims were patent
eligible because they transformed the manner in which a hyperlink
typically functions to resolve a problem that had no “pre-Internet
analog.” Id. at 1258. The Court cautioned, however, “that not all claims
purporting to address Internet-centric challenges are eligible for patent.”
Id. For example, in DDR Holdings the Court distinguished the patent-
eligible claims at issue from claims found patent-ineligible in
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Ultramercial. See id. at 1258—59 (citing Ultramercial, 772 F.3d at
715—16). As noted there, the Ultramercial claims were “directed to a
specific method of advertising and content distribution that was
previously unknown and never employed on the Internet before.” Id. at
1258 (quoting Ultramercial, 772 F.3d 709, 715—16 (Fed. Cir. 2016)).
Nevertheless, those claims were patent ineligible because they “merely
recite[d] 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.
Appellants’ asserted claims are analogous to claims found ineligible
in Ultramercial, and distinct from claims found eligible in DDR Holdings.
The ineligible claims in Ultramercial recited “providing [a] media product
for sale at an Internet website;” “restricting general public access to said
media product;” “receiving from the consumer a request to view [a]
sponsor message;” and “if the sponsor message is an interactive message,
presenting at least one query to the consumer and allowing said consumer
access to said media product after receiving a response to said at least one
query.” 772 F.3d at 712. Similarly, Appellants’ asserted claims recite
receiving, querying, and computing data. This is precisely the type of
Internet activity found ineligible in Ultramercial.
We are not persuaded by Appellants’ argument that the claims do not
preempt the making, using, and selling of basic tools of scientific and
technological work. App. Br. 19—20. The claims do preempt the abstract
concept of pricing recited in the claims. We find there is nothing substantial
beyond that concept recited.
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We are not persuaded by Appellants’ argument that the amount of
data on the Internet precludes human operation. Reply Br. 2—3. The claims
are not limited as to volume of data or number of transactions. In any event,
the ability of a computer to perform faster than humans, in itself, is not a
technical solution for purposes of eligibility analysis.
Claims 1—11, 13—18, 20, and22—25 rejected under 35 U.S.C. §
103(a) as unpatentable over Stack and Walker
Claim 1 recites receiving data identifying a good, getting a third party
vendor price for that good, and establishing a price for the good based on
that third party price. Stack does so much and this is not under contention.
Basically, Stack begins with a ceiling for a price, but the price at which the
good will be sold is not initially fixed. Instead, it is computed based on the
third party vendor price.
The sole limitation at issue is that of “wherein the price of the good
offered for sale by the seller is at an unspecified fixed price to be determined
by a marketeer controller as a function of a third party’s price for a
comparable good.”
As a matter of construction, the phrase “an unspecified fixed price to
be determined” at first glance seems to be a non sequitur, as it is unclear
how a price not yet determined is fixed. The disclosure clarifies this phrase
is to be construed as a price not yet specified, but to be fixed when
determined. The final limitation does specify that the final price
computation is by the marketeer controller, but other than that, the remainder
of the limitation at issue does not functionally affect the remainder of the
claim, and so is of limited patentable weight. In any event, as Stack does not
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finalize its price until after computing a price based on the third party price,
Stack describes the price of the good offered for sale being at an as yet
unspecified price to be fixed as a function of the third party price. The
Examiner, in an abundance of caution, also applies Walker, because Stack
does describe a ceiling for its price computation, whereas Walker’s option
pricing would be totally free of any pricing circumscription. Final Act. 4—5.
We are not persuaded by Appellants’ argument that the claimed
pricing method is not based on criteria set by a buyer or a seller as the
Examiner appears to argue, but by reference to a third party vendor’s price
for a comparable good. App. Br. 22. The criteria Examiner describes
includes the third party price.
We are not persuaded by Appellants’ argument that “Walker is not
relevant because it does not determine the price of a good with reference to a
third party’s price for a comparable good, as claimed. Rather, Walker
determines at great length the price of an option (as a form of risk hedge)
based on a host of other factors relating to flight and customer information
and other variables that might affect value.” App. Br. 23. First, Stack
determines a price based on the third party vendor price. Second, the
limitation at issue neither specifies nor narrows its implementation. Option
pricing, by definition, is based on the value of its underlying asset’s price.
Therefore, a price based on an option is a price based on the price of the
option’s underlying asset.
We are not persuaded by Appellants’ argument that Walker’s option is
not comparable to an airline ticket. App. Br. 23. Stack is used to show
obtaining the price for a comparable item. Walker is only applied to show a
way of using the price, of that comparable item, in an unconstrained fashion
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for pricing a comparable item. Also, as the price of an option is tied to the
price of its underlying asset, obtaining the price of an option is an indirect
form of obtaining the price of its underlying asset. Again, no
implementation, narrowing or otherwise, of how the pricing is based is
recited.
We are not persuaded by Appellants’ argument that the equivalent to
the marketeer in the applied references is the seller itself, and not a fourth
entity. App. Br. 24. First, as the marketeer, as recited, is a computer, and
the seller is a legal entity able to convey the goods, which a computer is not,
and the marketeer is, by definition, neither buyer nor third party, the
marketeer is necessarily a fourth entity.
Second, Appellants rely on the Specification at paragraph 20, which
recites “[t]he invention automates the pricing process by deriving a sale
price from a third party's index price using a method set by either the seller
or an intermediary, referred to herein as the ‘marketeer’.” It is unclear from
this whether the marketeer is necessarily only an intermediary, or either the
seller or an intermediary. If the latter, the seller in the applied art trivially
answers the argument. If the former, even a computer operated by the seller
acts as an intermediary.
Third, as one of ordinary skill in options trading knows, the options
are transacted on an intermediary platform on behalf of the option owners
(sellers) and buyers. The Chicago Options Exchange does not own the
options traded there, and neither would the software running the options
exchange in Walker.
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Fourth, in light of the notoriety of using intermediaries for financial
arrangements, the use of an intermediary for Stack and Walker would be
predictable, even if there were none explicitly described.
Claims 12 and 19 rejected under 35 U.S.C. § 103(a) as
unpatentable over Stack, Walker, and Official Notice
These claims are not separately argued.
Claim 21 rejected under 35 U.S.C. § 103(a) as unpatentable
over Stack, Walker, Official Notice, and Nahan
These claims are not separately argued.
CONCLUSIONS OF LAW
The rejection of claims 1—25 under 35 U.S.C. § 101 as directed to
non—statutory subject matter is proper.
The rejection of claims 1—11, 13—18, 20, and 22—25 under 35 U.S.C.
§ 103(a) as unpatentable over Stack and Walker is proper.
The rejection of claims 12 and 19 under 35 U.S.C. § 103(a) as
unpatentable over Stack, Walker, and Official Notice is proper.
The rejection of claim 21 under 35 U.S.C. § 103(a) as unpatentable
over Stack, Walker, Official Notice, and Nahan is proper.
DECISION
The rejection of claims 1—25 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) (2011).
AFFIRMED
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