Ex Parte Lo Faro et al

Patent Trial and Appeal Board

Feb 25, 2019

12783195 (P.T.A.B. Feb. 25, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/783, 195 05/19/2010
75564 7590 02/27/2019
DANIEL M. FITZGERALD (21652)
ARMSTRONG TEASDALE LLP
7700 Forsyth Boulevard
Suite 1800
St. Louis, MO 63105
FIRST NAMED INVENTOR
Walter F. Lo Faro
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.
21652-00097 6182
EXAMINER
CAO, VINCENT M
ART UNIT PAPER NUMBER
3688
NOTIFICATION DATE DELIVERY MODE
02/27/2019 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):
USpatents@armstrongteasdale.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Exparte WALTERF. LO FARO and CHRISTOPHERJ. MERZ
Appeal2017-007619 1
Application 12/783,1952
Technology Center 3600
Before HUBERT C. LORIN, NINA L. MEDLOCK, and
BRADLEY B. BAY AT, 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 1-5, 7, and 9-39. We have jurisdiction under 35 U.S.C.
§ 6(b).
We AFFIRM.
1 Our decision references Appellants' Appeal Brief ("App. Br.," filed
November 1, 2016) and Reply Brief ("Reply Br.," filed April 24, 2017), and
the Examiner's Answer ("Ans.," mailed February 24, 2017), and Final
Office Action ("Final Act.," mailed July 1, 2016).
2 Appellants identify MasterCard International Incorporated as the real party
in interest. App. Br. 1.
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Application 12/783,195
CLAIMED INVENTION
Appellants' claimed invention "relates generally to populating
customer profiles, and more particularly, to a computer-based system and
method for transaction based profiling of customers within a merchant
network" (Spec. ,r 2).
Claims 1, 18, and 3 3 are the independent claims on appeal. Claim 1,
reproduced below with bracketed numerals added, is illustrative of the
claimed subject matter:
1. A computer-based method for determining a targeted
marketing campaign for a candidate cardholder based upon a
customer profile, the customer profile being an improved
customer profile, the customer profile including a pattern of
usage of a payment card by the candidate cardholder at a
subdivision level with a business entity, the candidate cardholder
having an account associated with the payment card, the payment
card issued by an issuer and registered in a payment card network
to the candidate cardholder, said method performed using a
computer coupled to a plurality of databases, the computer
comprising one or more processors communicatively coupled to
a memory, the memory comprising instructions, which when
executed by the one or more processors, performs the steps of:
[(a)] receiving, through the payment card network, a
plurality of transaction authorization requests including
transaction information for a plurality of cardholders for
transactions with a business entity, the transaction information
including data representing each transaction initiated by the
plurality of cardholders with the business entity using an
associated payment card, the plurality of cardholders including
the candidate cardholder;
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[ (b)] receiving, from the business entity that is
participating in a rewards system, through a rewards system data
warehouse of the payment card network, merchant data
associated with the transactions with the business entity, the
merchant data including raw SKU transaction data and an
indication of a subdivision within the business entity in which
the transactions occurred;
[ ( c)] storing the transaction authorization requests
including transaction information within a first database of the
plurality of databases;
[ ( d)] storing the merchant data within a second database
of the plurality of databases;
[ ( e)] generating a customer profile using the stored
transaction information and the stored merchant data, for each of
the plurality of cardholders, each customer profile representing a
pattern of usage of the associated payment card by the cardholder
in each subdivision of the business entity, each customer profile
including a type, a recency and a frequency of transactions
initiated by the cardholder associated with the customer profile
using the associated payment card at the subdivision of the
business entity;
[(f)] electronically generating a score for each of the
customer profiles of each respective cardholder, the score of a
respective customer profile being based on a previously stored
transaction-based model, and spending behavior of the customer
profile of the respective cardholder in comparison to spending
behavior of the customer profiles of the other cardholders among
the plurality of cardholders;
[ (g)] electronically clustering the customer profile of the
candidate cardholder into a group with other customer profiles of
the plurality of cardholders having a score that is within a
predetermined range of a score of the customer profile of the
candidate cardholder with respect to the subdivision of the
business entity and also registered within the payment card
network;
[ (h)] identifying patterns of spending behavior of each of
the cardholders within the clustered group including the
candidate cardholder, with respect to the subdivision of the
business entity; and
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[(i)] transmitting, to the candidate cardholder, marketing
campaign information based on the identified patterns of the
spending behavior of the cardholders within the clustered group.
REJECTION
Claims 1-5, 7, and 9-39 are rejected under 35 U.S.C. § 101 as
directed to a judicial exception without significantly more.
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: "[l]aws of nature, natural phenomena, and
abstract ideas" are not patentable. Alice Corp. v. CLS Bank Int 'l, 573 U.S.
208,216 (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., 573 U.S. at 217.
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 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).
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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)).
We are not persuaded, as an initial matter, that the Examiner erred in
determining that the claims are directed to an abstract idea or that the
Examiner otherwise overgeneralized the concept to which the claims are
directed without taking the actual claim language into account (App.
Br. 6-14 ). There is no requirement that the Examiner's formulation of the
abstract idea copy the claim language. And, as described below, the
Examiner's characterization of the claims (i.e., as directed to collecting
market information to determine consumer trends (Final Act. 2-3)) is fully
consistent with the Specification. 3
3 An abstract idea, moreover, can be expressed at various levels of
abstraction. See Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240-41
(Fed. Cir. 2016) ("An abstract idea can generally be described at different
levels of abstraction. As the Board has done, the claimed abstract idea could
be described as generating menus on a computer, or generating a second
menu from a first menu and sending the second menu to another location. It
could be described in other ways, including, as indicated in the specification,
taking orders from restaurant customers on a computer."). That the claim
language includes more words than the phrase the Examiner used to
articulate the abstract idea, and that the Examiner, thus, articulates the
abstract idea at a higher level of abstraction than would Appellants is an
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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."' Enfish, LLCv. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir.
2016) (quoting Internet Patents Corp., 790 F.3d at 1346). It asks whether
the focus of the claims is on a specific improvement in relevant technology
or on a process that itself qualifies as an "abstract idea" for which computers
are invoked merely as a tool. See id. at 1335-36. Here, it is clear from the
Specification, including the claim language that the claims focus on an
abstract idea, and not on any improvement to computer technology and/or
functionality.
The Specification is entitled "METHOD AND SYSTEM FOR
TRANSACTION BASED PROFILING OF CUSTOMERS WITHIN A
MERCHANT NETWORK." The Background section of the Specification
describes that a challenge in the field is to predict the future behavior of
customers "at any one of a purchase, merchant or merchant network level so
that card networks, card issuers, and merchants accepting the cards for
payments can provide the services that will result in retention of existing
customers and will attract new card users" (Spec. ,r 7). The claimed
invention is ostensibly intended to address this challenge by gathering
transaction data and using that data to determine and populate
customer/cardholder loyalty profiles (see, e.g., claim 1 ("A computer-based
method for determining a targeted marketing campaign for a candidate
cardholder based upon a customer profile"); Spec. ,r 2 ("This invention
insufficient basis for determining that the claims are not directed to an
abstract idea.
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relates generally to populating customer profiles, and more particularly, to a
computer-based system and method for transaction based profiling of
customers within a merchant network."); id. ,r 18 ("Described herein are
exemplary embodiments of systems and processes for providing a
transaction-based approach to determine and populate a loyalty profile of a
cardholder. ") ).
Considered in light of the Specification, the purported advance over
the prior art is, thus, a way of populating customer profiles, based on the
customers' previous transactions, for use in implementing targeted
marketing campaigns. In that context, claim 1 is directed to (1) collecting
transaction information for cardholders (steps (a)- (d)); (2) storing the
collected data in a customer profile (step (e)); (3) analyzing the stored data
to generate a score for each customer profile (step (f)); (4) clustering the
customer profiles based on the scores (step (g)); (5) identifying patterns of
spending behavior of cardholders (step (h)); and (6) transmitting marketing
campaign information to a cardholder based on the identified patterns
( step (i)) - in other words, to targeted advertising based on identified
patterns of consumer spending behavior, which is a fundamental economic
practice, i.e., a method of organizing human activity and, therefore, an
abstract idea.
The Federal Circuit has consistently held that abstract ideas include
the concepts of collecting data, analyzing the data, and displaying the results
of the collection and analysis, including when limited to particular content.
See, e.g., Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d
1332, 1340 (Fed. Cir. 2017) (identifying the abstract idea of collecting,
displaying, and manipulating data); Elec. Power Grp., LLC v. Alstom S.A.,
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830 F.3d 1350, 1354 (Fed. Cir. 2016) (characterizing collecting information,
analyzing information by steps people go through in their minds, or by
mathematical algorithms, and presenting the results of collecting and
analyzing information, without more, as matters within the realm of abstract
ideas); see also SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1168
(Fed. Cir. 2018) ("As many cases make clear, 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." (quoting Elec. Power Grp., 830 F.3d at 1353, 1355 (citing cases)).
Targeting customers with particular targeted marketing material also is a
longstanding marketing and advertising practice, and is substantially similar
to economic practices that the courts have found patent-ineligible. See, e.g.,
Morsa v. Facebook, Inc., 77 F. Supp. 3d 1007, 1013 (C.D. Cal. 2014), ajf'd,
622 F. App'x 915 (Fed. Cir. 2015) (concluding that targeting advertisements
to certain consumers is no more than an abstract idea); Ultramercial, Inc. v.
Hulu, LLC, 772 F.3d 709, 713 (Fed. Cir. 2014) (offering media content in
exchange for viewing an advertisement); Intellectual Ventures I LLC v.
Capital One Bank (USA), 792 F.3d 1363, 1370 (Fed. Cir. 2015) (tailoring
information presented to a user based on particular information); Affinity
Labs of Texas, LLC v. Amazon.com, Inc., 838 F.3d 1266, 1271 (Fed. Cir.
2016) ( customizing a user interface to have targeted advertising based on
user information).
The Specification describes, as mentioned above, that transaction data
for a customer is gathered and utilized to populate loyalty profiles (Spec.
,r 19), and that "[t]hese profiles can then be used in a near real-time
environment for implementing campaigns that increase a customer's spend,
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frequency of visit, and the breadth of spend within the store or with a
merchant" (id.). It, thus, clearly appears from the Specification that the
focus of the claimed invention is on addressing a business objective (i.e.,
providing marketing campaigns to targeted individuals to increase customer
spending), and not on any claimed means for accomplishing that goal that
improves technology.
We find no indication in the Specification, nor do Appellants direct us
to any indication, that the operations recited in claim 1, for example, invoke
any assertedly inventive programming, require any specialized computer
hardware or other inventive computer components, i.e., a particular machine,
or that the claimed invention is implemented using other than generic
computer components to perform generic computer functions. See DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014)
("[ A ]fter Alice, there can remain no doubt: recitation of generic computer
limitations does not make an otherwise ineligible claim patent-eligible."). In
fact, the Specification suggests just the opposite, i.e., that the claimed
invention may be implemented using only generic computer components
(see, e.g., Spec. ,r,r 34--41 ).
We also find no indication in the Specification that the claimed
invention effects a transformation or reduction of a particular article to a
different state or thing. Nor do we find anything of record, short of attorney
argument, that attributes any improvement in technology or a technical field
to the claimed invention or that otherwise indicates that the claimed
invention integrates the abstract idea into a "practical application," as that
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phrase is used in the USPTO's "2019 Revised Patent Subject Matter
Eligibility Guidance," 84 Fed. Reg. 50, 55 (January 7, 2019). 4
Appellants argue that "the rejection offers absolutely no evidence that
the claims are directed to the alleged 'abstract idea"' (App. Br. 9) and that
"the Examiner has failed to establish a prima facie case for asserting that the
claims are directed to an abstract idea" (id.). That argument is not
persuasive at least because 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. Evidence may be helpful, e.g., where
facts are in dispute. But, 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
4 In accordance with the USPTO' s revised guidance, a claim will be
considered "directed to" an abstract idea if (1) the claim recites subject
matter falling within one of the following groupings of abstract ideas: (a)
mathematical concepts; (b) certain methods of organizing human
interactions, e.g., fundamental economic principles or practices, commercial
or legal interactions; and ( c) mental processes, and (2) the claim does not
integrate the abstract idea into a practical application. See Revised
Guidance, 84 Fed. Reg. at 54--55. The Revised Guidance references Manual
of Patent Examining Procedure ("MPEP") §§ 2106.05 (a}-(c) and (e}-(h) in
describing the considerations that are indicative that an additional element or
combination of elements integrates the judicial exception, e.g., the abstract
idea, into a practical application. Id. at 55. If the recited judicial exception
is integrated into a practical application, as determined under one or more of
these MPEP sections, the claim is not "directed to" the judicial exception.
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supporting reasoning as to why, is insufficient to require the Examiner to
provide evidentiary support. 5
The Federal Circuit, moreover, has observed repeatedly 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) (alteration in original). Thus,
what 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.").
Here, in rejecting the pending claims under § 101, the Examiner
notified Appellants of the reasons for the rejection in a sufficiently articulate
and informative manner as to meet the notice requirement of§ 132 (see
Final Act. 2-3). And we find that the Examiner, in doing so, set forth a
prima facie case of patent-ineligibility.
5 We note that Appellants have put forward no rebuttal evidence showing
the claims are not directed to an abstract idea.
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Appellants further argue that the claims are not directed to an abstract
idea because they "improve the technical field of predictive modeling" (App.
Br. 9). Appellants maintain that the claims do so by "reciting a method of
accurately targeting a cardholder for a marketing campaign based on
electronically generated patterns of usage that are modeled using improved
customer profiles" and that "[ t ]he claimed systems and methods result in ...
targeted marketing campaigns that are more closely tailored to individual
customers' spending patterns, thereby specifically improving the technical
field of predictive modeling" (id.). But, we are not persuaded that producing
marketing campaigns that are more closely tailored to individual customers'
spending patterns is a technical improvement, as opposed to an improvement
in a business practice, i.e., targeted advertising.
Appellants assert that "[ c ]laim 1 allows for the generation of an
improved customer profile based on two different types of non-public data6
that [are] generally unattainable and not previously utilized together" and,
thus, allows for "better detection of detailed changes in spending of the
customer and transmitting better targeted marketing material to the
customer" (App. Br. 10-11; see also id. at 16 ("two different types of
previously unattainable data")). Appellants maintain that this improved
customer profile "is an improvement on existing technology because the two
different types of data ... are ... capable of being linked and utilized
6 Appellants describe the two types of data as including (1) transaction
information for a plurality of cardholders for transactions with a business
entity received through the payment card network; and (2) merchant data
that include raw SKU transaction data associated with the transactions with
the business entity received from a rewards system data warehouse (App.
Br. 10-11).
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together to generate a more detailed and precise improved customer profile"
(id. at 11). We, however, fail to see how, and Appellants have not
adequately explained how, collecting and analyzing "different types of non-
public data" in order to populate a loyalty profile of a cardholder amounts to
a technological improvement where, as here, there is no indication that any
allegedly inventive programming is invoked or that any specialized or
inventive computer components are required.
Moreover, to the extent the claimed method, as recited in claim 1,
allows for the generation of "improved customer profiles" ( e.g., profiles
including "raw SKU transaction data"), as argued by Appellants, we do not
see how the informational content of the customer profile 7 alters the § 101
analysis. Cf Praxair Distribution, Inc. v. Mallinckrodt Hospital Products
IP Ltd., 890 F.3d 1024, 1032 (Fed. Cir. 2018) ("Claim limitations directed to
the content of information and lacking a requisite functional relationship are
not entitled to patentable weight because such information is not patent
eligible subject matter under 35 U.S.C. § 101.").
Appellants argue that the pending claims, similar to those in McRO,
are directed to "a specific asserted improvement in predictive modeling, not
an abstract idea," and recite "a specific method" for generating a customer
profile using stored transaction data and cardholder's usage patterns that
improves upon manual methods and known computer-based methods for
profiling customers (App. Br. 11-12). Yet, we are not persuaded that there
7 Claim 1 recites, inter alia, "receiving ... merchant data including raw
SKU transaction data" and "generating a customer profile using the stored
transaction information and the stored merchant data." (App. Br. 17 (Claims
Appendix)).
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is any parallel between the present claims and the claim in McRO that the
court determined was not directed to an abstract idea.
In McRO, the Federal Circuit concluded that the claim, when
considered as a whole, was directed to a "technological improvement over
the existing, manual 3-D animation techniques" and "uses the limited rules
in a process specifically designed to achieve an improved technological
result in conventional industry practice." McRO, 837 F.3d at 1316.
Specifically, the Federal Circuit found that the claimed rules allow
computers to produce accurate and realistic lip synchronization and facial
expressions in animated characters that previously could only be produced
by human animators; and the rules are limiting because they define morph
weight sets as a function of phoneme sub-sequences. Id. at 1313.
Appellants have not identified any analogous improvement here that
is attributable to the claimed invention. Although generating a customer
profile using stored transaction data and cardholder's usage patterns may
improve a business process, i.e., developing a targeted marketing campaign,
it does not achieve an improved technological result. We see no parallel
between the limiting rules described in McRO and the use of stored
transaction data and cardholder's usage patterns to generate a customer
profile, as recited in Appellants' claims.
We also do not agree with Appellants that the Federal Circuit's ruling
in Enfzsh impacts the patent-eligibility of the present claims (App. Br. 14).
The claims at issue in Enfish were directed to 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. Enfzsh, 822 F.3d at 1335-36. There, in rejecting a§ 101
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challenge, the court held that "the plain focus of the claims is on an
improvement to computer functionality itself, not on economic or other tasks
for which a computer is used in its ordinary capacity." Id. at 1336.
We find no parallel here between the pending claims and the claims in
Enfish nor any comparable aspect in the pending claims that represents an
improvement to computer functionality. Appellants argue that the pending
claims are analogous to those in Enfzsh because they are not directed to a
fundamental economic practice or mathematical equation but instead to "a
specific implementation of a solution" (i.e., (targeted marketing campaigns
built based on improved customer profiles that are generated from SKU-
level transaction data segmented at a business entity level) to a problem in
the software arts (i.e., overbroad profiling that cannot account for business-
entity level data) (App. Br. 14). But, we are not persuaded that "overbroad
profiling," which Appellants ostensibly characterize as the "inability to
accurately predict consumer behavior and generate targeted marketing
campaigns at a business entity subdivision level" (id. at 15), is a technical
problem, as opposed as to a business problem. We also are not persuaded
that building targeted marketing campaigns based on customer profiles
generated from SKU-level transaction data segmented at a business entity
level is a technological improvement, as opposed to an improvement to a
business practice, i.e., developing targeted marketing campaigns - a
process in which a computer is used as a tool in its ordinary capacity.
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Referencing the USPTO' s Abstract Ideas Examples, 8 Appellants point
to the claims in Example 4 as an instance in which claims directed to an
improved algorithm that allows better processing of GPS satellite signals
were found patent-eligible (App. Br. 15-16). The claims in Example 4,
however, are hypothetical claims modeled after the technology in SiRF
Technology Inc. v. International Trade Commission, 601 F.3d 1319
(Fed. Cir. 2010); they are not actual claims at issue in that case.
In SiRF, Appellants challenged the Commission's determination that
the asserted claims of the '801 and '187 patents, 9 which are directed to
calculating an absolute position of a GPS receiver, recite patent-eligible
subject matter under§ 101. SiRF, 601 F.3d at 1331-32. In affirming the
Commission's decision, the Federal Circuit held "that the claims at issue are
properly directed to patentable subject matter as they explicitly require the
use of a particular machine (a GPS receiver) and could not be performed
without the use of such a receiver." Id. at 1333 ( emphasis added).
Appellants assert here that "[ s ]imilarly, the pending claims are
directed to generating an improved customer profile that allows for the
determination and transmission of better targeted marketing information to a
customer based on these two different types of previously unattainable data"
and that "the customer profile recited in the Claims is at least an
improvement over known customer profiles by virtue of the claimed
customer profile incorporating stock-keeping unit (SKU) level transaction
8 See January 2015 Update, Appendix 1: Examples ( available at
https ://www. uspto. gov/ sites/ default/files/ documents/ abstract_idea_examples
.pdf)
9 U.S. Patent Nos. 6,417,801 ("the '801 patent") and U.S. Patent No.
6,937,187 ("the '187 patent").
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data at a business entity subdivision level" (App. Br. 16). But, we do not
see, and Appellants do not adequately explain, how an "improved customer
profile" that contains "previously unattainable data" is similar to an
improved technique for computing the position of a particular GPS receiver.
Also unlike the situation in SiRF, Appellants do not contend that the pending
claims are tied to a particular machine.
Turning to the second step of the Mayo/Alice framework, Appellants
argue that the pending claims "overcome a problem arising in computer
networks" (i.e., the inability to accurately predict consumer behavior and
generate targeted marketing campaigns at a business entity subdivision
level) and that "[a]s such, the independent claims necessarily recite
'significantly more' than the alleged 'abstract idea"' (App. Br. 14--15 (citing
DDR Holdings). We are not persuaded that accurately predicting consumer
behavior and generating targeted marketing campaigns is a problem
particular to computer networks. As mentioned above, targeted advertising
existed before and still exists outside of computer technology and computer
networks. See Tuxis Technologies, LLC v. Amazon.com, Inc.,
No. CV 13-1771-RGA, 2014 WL 4382446, at *5 (D. Del. Sept. 3, 2014)
(Matching consumers with a given product or service "has been practiced as
long as markets have been in operation."). And the purported solution here
of, at best, generic computer components performing generic computer
functions, is not necessarily rooted in computer technology.
Appellants further argue that "the pending claims recite an inventive
concept as defined by the decision in BASCOM' (App. Br. 12; see also id.
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at 15). 10 Appellants note that "[i]n BASCOM, the inventive concept related
to using a remote ISP server to associate a request for Internet content with a
specific individual account" (id. at 13). And Appellants argue that the
pending claims similarly "recite a method including generating a customer
profile that represents a usage pattern associated with a subdivision of a
business entity" (id.). Appellants also argue that, as in BASCOM, where a
filtering tool was remote from end-users but nevertheless applied their
customizations and preferences, "the pending claims recite a method where a
remote SKU-based loyalty profile engine is able to electronically generate
a score for each of the customer profiles of each respective cardholder"
(id.). In other words, according to Appellants, "the pending claims recite a
method for remote-scoring of a customer profile (remote-filtering in
BASCOM) using spending behavior of individual customers (filter
customizations of individual customers in BASCOM)" (id.).
Appellants' arguments are unpersuasive at least because they are not
commensurate with the scope of the claims. Claim 1, for example, does not
recite "a remote SKU-based loyalty profile engine" or any other remote
arrangement of computer components. Indeed, claim 1 does not recite a
"loyalty profile engine" or any other "engine." And we find no disclosure in
the Specification of the remote SKU-based loyalty profile engine or remote-
scoring argued by Appellants; nor do Appellants direct us to any portion of
the Specification that discloses such an arrangement. 11
10 BASCOM Global Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d
1341 (Fed. Cir. 2016)
11 We note that the Specification discloses that "[i]n an alternative
embodiment, database 120 is stored remotely from server system 112 and
may be non-centralized." Spec. ,r 36. But that feature is not recited in the
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As to the argument that the customer profile represents a usage pattern
specific to a subdivision of a business entity, Appellants have not adequately
explained how this provides "a technology-based solution" that improves the
performance of the computer system itself, like the "ordered combination" in
BASCOM. See BASCOM, 827 F.3d at 1351. Rather, as evidenced by the
Specification, the argued improvements lie in the content of the information
stored. 12
Appellants' argument that "[ c ]laim 1 includes specific, detailed
recitations that leave open numerous other avenues for tailoring rewards
program and other marketing information to customers" is likewise
unpersuasive of Examiner error (Reply Br. 3). Although 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., 573 U.S.
at 216, characterizing preemption as a driving concern for patent eligibility
claims and, therefore, cannot be relied on to provide an inventive concept.
See Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d
1336, 1345 (Fed. Cir. 2013) ("[T]he complexity of the implementing
software or the level of detail in the specification does not transform a claim
reciting only an abstract concept into a patent-eligible system or method.");
see also Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1322
(Fed. Cir. 2016) ("The district court erred in relying on technological details
set forth in the patent's specification and not set forth in the claims to find an
inventive concept." (citing Accenture, 728 F.3d at 1345, and Content
Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass 'n, 776 F.3d
1343, 1346 (Fed. Cir. 2014))).
12 See, e.g., Spec. ,r 119 ("Using the above described embodiments to
generate profiles, or customer-level summaries capturing a 'profile' of a
transaction card's state allows an entity to obtain a rich summary of
spending behavior at a merchant partner. Such spend behavior can span
store departments or even SKU-level behavior.")
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is not the same as characterizing preemption as the sole test for patent
eligibility. "The Supreme Court has made clear that the principle of
preemption is the basis for the judicial exceptions to patentability" and "[ f]or
this reason, questions on preemption are inherent in and resolved by the
§ 101 analysis." Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1379 (Fed. Cir. 2015) (citing Alice Corp., 134 S. Ct. at 2354).
"[P]reemption may signal patent ineligible subject matter, [but] the absence
of complete preemption does not demonstrate patent eligibility." Id.
Finally, Appellants misapprehend the controlling precedent to the
extent that Appellants maintain that the claims are patent-eligible, i.e., that
the claims recite additional elements that are not well-known, routine, and
conventional, because the claims allegedly are novel and/or non-obvious in
view of the prior art (see, e.g., App. Br. 15 ("Claim 9, for example, include
types of data received and utilized in generating an improved customer
profile. These types of data are not conventionally obtained for use in
customer profile management as evidenced by the lack of cited references
put forth by the Office"); id. at 16 ("The claimed customer profile is further
improved over any profile generated by known methods because it is
clustered with similar customer profiles using a multi-dimensional Euclidean
space. 13 This step provides significantly more than any abstract idea.
Additionally, the Examiner cites not a single previous court decision or prior
13 Although Appellants do not specify claim numbers, we understand this
argument to be addressed to dependent claims 10-12, which recite "a multi-
dimensional Euclidean space."
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art reference that would reference this inventive concept") 14). Neither a
finding of novelty nor a non-obviousness determination automatically leads
to the conclusion that the claimed subject matter is patent-eligible. Although
the second step in the Mayo/Alice framework is termed a search for an
"inventive concept," the analysis is not an evaluation of novelty or non-
obviousness, but rather, a search for "an element or combination of elements
that is 'sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the [ineligible concept] itself."'
Alice Corp., 573 U.S. at 217-18 (citation omitted). "Groundbreaking,
innovative, or even brilliant discovery does not by itself satisfy the § 101
inquiry." Ass 'nfor Molecular Pathology v. Myriad Genetics, Inc., 569 U.S.
576, 591 (2013). A novel and non-obvious claim directed to a purely
abstract idea is, nonetheless, patent-ineligible. See Mayo, 566 U.S. at 90;
see also Diamond v. Diehr, 450 U.S. 175, 188-89 (1981) ("The 'novelty' of
any element or steps in a process, or even of the process itself, is of no
relevance in determining whether the subject matter of a claim falls within
the§ 101 categories of possibly patentable subject matter.").
We are not persuaded, on the present record, that the Examiner erred
in rejecting claims 1-5, 7, and 9-39 under 35 U.S.C. § 101. Therefore, we
sustain the Examiner's rejection.
14 We note that under the USPTO's 2019 Revised Guidance, there is no
requirement that the Examiner cite to judicial decisions as evidence that the
claims are directed to an abstract idea. See 84 Fed. Reg. at 51-54.
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DECISION
The Examiner's rejection of claims 1-5, 7, and 9-39 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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