Ex Parte Kushkuley et al

Patent Trial and Appeal Board

Feb 9, 2018

13686138 (P.T.A.B. Feb. 9, 2018)

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.
13/686,138 11/27/2012 Alex KUSHKULEY T9049-19436US02 7286
74739 7590 02/13/2018
Potomac Law Group, PLLC
Oracle International Corporation
5335 Wisconsin Avenue
Suite 440
Washington, DC 20015
EXAMINER
NGUYEN, NGA B
ART UNIT PAPER NUMBER
3683
NOTIFICATION DATE DELIVERY MODE
02/13/2018 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):
patents @ potomaclaw. com
bgoldsmith@potomaclaw.com
eofficeaction @ appcoll.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ALEX KUSHKULEY and SU-MING WU
Appeal 2016-0047191
Application 13/686,13 82
Technology Center 3600
Before NINA L. MEDLOCK, PHILIP J. HOFFMANN, and
ROBERT J. SILVERMAN, 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—9, 11—17, 19, and 20. We have jurisdiction under
35 U.S.C. § 6(b).
We AFFIRM.
1 Our decision references Appellants’ Appeal Brief (“App. Br.,” filed
August 17, 2015) and Reply Brief (“Reply Br.,” filed April 4, 2016), and the
Examiner’s Answer (“Ans.,” mailed February 3, 2016) and Final Office
Action (“Final Act.,” mailed March 18, 2015).
2 Appellants identify Oracle International Corporation as the real party in
interest. App. Br. 2.
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Application 13/686,138
CLAIMED INVENTION
Appellants’ claimed invention “is directed generally to a computer
system that forecasts retail sales or provides pricing, and in particular to
estimating elastic and inventory effect for a computer system that forecasts
retail sales or provides pricing” (Spec. 12).
Claims 1, 9, and 17 are the independent claims on appeal. Claim 1,
reproduced below, is illustrative of the claimed subject matter:
1. A non-transitory computer-readable medium
having instructions stored thereon that, when executed by a
processor, cause the processor to generate a sales forecast for an
item at a store, the generating comprising:
receiving a sales condition relationship for the item at the
store, the relationship comprising an elasticity parameter, an
inventory effect parameter and a sales constant;
receiving a demand model for sales of the item in terms of
the elasticity parameter and the inventory effect parameter and a
base demand for the item selling at the store;
estimating the sales constant, the estimating comprising
generating a theta parameter by taking logarithms of the sales
condition relationship;
using linear regression to estimate a logarithm of the sales
constant and a value of the theta parameter;
determining a relationship between the elasticity
parameter and the inventory effect parameter based on the value
of the theta parameter;
wherein the inventory effect parameter comprises a power
function of inventory levels;
eliminating either the elasticity parameter or the inventory
effect parameter from the demand model based on the value of
theta to generate a single variable demand model;
using a single parameter linear regression to determine the
base demand and to solve for either the elasticity parameter or
the inventory effect parameter in the single variable demand
model;
setting a price for the item; and
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generating the sales forecast at the price using the demand
model and based at least on the determined base demand and the
elasticity parameter or inventory effect parameter.
REJECTIONS
Claims 1, 3—9, 11—17, 19, and 20 are rejected under 35 U.S.C. § 101
as directed to non-statutory subject matter.3
ANALYSIS
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: “[ljaws of nature, natural phenomena, and
abstract ideas” are not patentable. See, e.g., Alice Corp. Pty. Ltd. v. CLS
Banklnt’l, 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,
the inquiry ends. Otherwise, the inquiry proceeds to the second step where
the elements of the claims are considered “individually and ‘as an ordered
3 We treat the Examiner’s reference, in the Final Office Action, to cancelled
claims 2, 10, and 18 as inadvertent error.
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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 claims under 35 U.S.C. § 101, the Examiner
found that the claims are directed to a process of “‘estimating elasticity and
inventory effect,’” i.e., to an abstract idea; that “the claimed method simply
describe[s] the concept of gathering, generating, and organizing data through
mathematical relationships”; and that the claims do not include additional
elements or a combination of elements that amount to significantly more
than the abstract idea itself (Final Act. 2—4).
Focusing on step one of the Mayo!Alice framework, Appellants argue
that the Examiner has overgeneralized the claims as directed to “estimating
elasticity and inventory effect,” and ignored most of the claim limitations
(App. Br. 4). But, aside from quoting the language of claim 1, Appellants
offer no persuasive argument or reasoning to explain why any particular
claim limitation requires altering the Examiner’s findings regarding the
concept to which the clam is directed.
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Appellants also argue that the § 101 rejection cannot be sustained
because the Examiner has provided no evidence that the claims are directed
to an abstract idea. That argument is similarly unpersuasive.
There is no requirement that an examiner provide evidentiary support
in every case before a conclusion can be made that a claim is directed to an
abstract idea. See, e.g., para. IV “July 2015 Update: Subject Matter
Eligibility”4 to 2014 Interim Guidance on Subject Matter Eligibility,
79 Fed. Reg. 74618 (Dec. 16, 2014) (“The courts consider the determination
of whether a claim is eligible (which involves identifying whether an
exception such as an abstract idea is being claimed) to be a question of law.
Accordingly, courts do not rely on evidence that a claimed concept is a
judicial exception, and in most cases resolve the ultimate legal conclusion on
eligibility without making any factual findings.”). Nor, contrary to
Appellants’ suggestion, did this Board hold in Ex parte Renald Poisson,
Appeal 2012-011084 (PTAB Feb. 27, 2015), that there is any such
requirement.5 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) (“[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
4 Available at https://www.uspto.gov/sites/default/files/documents/ieg-july-
2015-update.pdf.
5 We would not be bound, in any event, by a non-precedential decision of
another panel of the Board.
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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 Patent
Subject Matter Eligibility,” in effect at the time the Final Office Action was
mailed. Specifically, the Examiner notified Appellants that the claims are
directed to a process of “‘estimating elasticity and inventory effect,” which
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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the Examiner found is an abstract idea; that “the claimed method simply
describe[s] the concept of gathering, generating, and organizing data through
mathematical relationships”; and that the claims do not include additional
elements or a combination of elements that amount to significantly more
than the abstract idea itself (Final Act. 2-4). 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.
Further referencing the USPTO’s “July 2015 Update: Subject Matter
Eligibility,” Appellants argue the § 101 rejection cannot be sustained
because “estimating elasticity and inventory effect” is not similar to a
concept that the courts have identified as an abstract idea.7 Yet Appellants
present no persuasive argument or technical reasoning to explain why the
Examiner’s finding, i.e., that “[tjhis idea is similar to the basic concept of
manipulating information using mathematical relationships (e.g., converting
7 The July 2015 Update instructs examiners to refer to the body of case law
precedent in order to identify abstract ideas by way of comparison to
concepts already found to be abstract {id. at 3), and explains that “[tjhis
discussion is meant to . . . ensure that a claimed concept is not identified as
an abstract idea unless it is similar to at least one concept that the courts
have identified as an abstract idea” {id.). Examiners also are instructed to
clearly articulate “the reason(s) why the claimed invention is not eligible, for
example, by providing a reasoned rationale that identifies the judicial
exception recited in the claim and why it is considered an exception, and that
identifies the additional elements in the claim (if any) and explains why they
do not amount to significantly more than the exception” {id. at 6).
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numerical representation in Benson), which has been found by the courts to
an abstract idea” (Final Act. 3), is unreasonable or unsupported.
Also, to the extent Appellants maintain that the § 101 rejection must
be withdrawn because the Examiner has failed to comply with USPTO
guidelines, we note, for the record, that an Examiner’s failure to follow the
Director’s guidance is appealable only to the extent that the Examiner has
failed to follow the statutes or case law. To the extent the Director’s
guidance goes beyond the case law and is more restrictive on the Examiner
than the case law, the failure of the Examiner to follow those added
restrictions is a matter for petition to the Director. We are aware of no
controlling precedent, nor do Appellants identify any controlling case law,
that precludes an examiner from finding a claimed concept patent-ineligible
unless it is similar to a concept that a court has identified as being patent-
ineligible.
Turning to the second step of the Mayo!Alice framework, Appellants
assert that even if the claims are directed to an abstract idea, the claims are
nonetheless patent-eligible because “the claims include an ‘inventive
concept’ or additional elements so that the abstract idea is transformed into a
patent-eligible application” (App. Br. 5). Yet, to the extent Appellants
maintain that the claimed invention is patent-eligible, i.e., that the recited
functionality is not “‘well-understood’ or ‘previously known’” because the
claims are “indicated to be allowable over the cited prior art” {id.),
Appellants misapprehend the controlling precedent.
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
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“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 ’n.for
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.”).
Appellants argue that the claims “go well beyond the mere concepts
of simply retrieving, comparing and combining data using a computer,” and
note that claim 1 recites, inter alia, “using linear regression to estimate a
logarithm of the sales constant and a value of the theta parameter”; that “the
inventory effect parameter comprises a power function of inventory levels”;
and “using a single parameter linear regression to determine the base
demand and to solve for either the elasticity parameter or the inventory
effect parameter in the single variable demand model” (App. Br. 6).
However, we find no indication in the record, nor do Appellants point us to
any 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, which is not
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enough for patentability. See DDR Holdings, LLC v. Hotels.com, L.P., 773
F.3d 1245, 1256 (Fed. Cir. 2014) (“[AJfter Alice, there can remain no doubt:
recitation of generic computer limitations does not make an otherwise
ineligible claim patent-eligible.”).
We also are not persuaded of Examiner error by Appellants’ argument
that the claims are patent-eligible because they “do not attempt to preempt
every application” of estimating elasticity and inventory effect (App. Br. 7).
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.” Arioso
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)
(citing Alice, 134 S. Ct. at 2354). Although “preemption may signal patent
ineligible subject matter, the absence of complete preemption does not
demonstrate patent eligibility.” Id.
Appellants further argue that the claims are patent-eligible because
they provide improvements to the functioning of the computer (App. Br. 7—
8). Citing paragraph 36 of the Specification,8 Appellants assert that “[t]he
Paragraph 36 reads:
Having a value for theta now gives a relationship between alpha and
gamma as follows:
a0 — 1 = y
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elimination of [the] inaccuracies of the prior art clearly leads to a better
result when using embodiments of the present invention” {id. at 8). But,
even 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, LLC v.
Microsoft Corp., 822 F.3d. 1327 (Fed. Cir. 2016) 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 on asserted
advances in uses to which existing computer capabilities could be put. Id.
at 1335—36. The alleged improvement that Appellants tout does not concern
an improvement to computer capabilities but instead relate to an alleged
improvement in generating a sales forecast for an item at a store for which a
computer is used as a tool in its ordinary capacity.
Finally, Appellants argue that the Examiner failed to consider the
claim elements both individually and in combination and, thus, failed to
consider the “innovative interaction between elements and how one element
uses an input from another element in an innovative manner, as evidenced
by the lack of prior art that discloses the claimed functionality” (App. Br. 8—
(Equation 3)
Based on Equation 2 above, embodiments use the relationship between
alpha and gamma of Equation 3 to eliminate gamma from the regression.
Therefore, embodiments avoid the need to estimate both alpha and
gamma simultaneously, as is done in prior systems, which can lead to
inaccuracy in alpha and gamma.
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9). But again, as described above, a finding of novelty or non-obviousness
does not automatically lead to the conclusion that the claimed subject matter
is patent-eligible.
We are not persuaded for the foregoing reasons that the Examiner
erred in rejecting claims 1, 3—9, 11—17, 19, and 20 under 35 U.S.C. § 101.
Therefore, we sustain the Examiner’s rejection.
DECISION
The Examiner’s rejection of claims 1, 3—9, 11—17, 19, and 20 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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