Ex Parte O et al

Patent Trial and Appeal Board

Feb 21, 2018

12848510 (P.T.A.B. Feb. 21, 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.
12/848,510 08/02/2010 Robert Francis O'Donnell 002328.0813 6087
5073 7590 02/23/2018
RAKFR ROTTST T P
EXAMINER
2001 ROSS AVENUE KANERVO, VIRPI H
SUITE 700
DALLAS, TX 75201-2980 ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
02/23/2018 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):
ptomaill @bakerbotts.com
ptomai!2 @ bakerbotts .com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ROBERT FRANCIS O’DONNELL, MARC JOSEPH BUZZELLI,
ROBERT ALAN FISHBEIN, JACOB M. HERSCHLER,
FIONA ALEXANDRA JACKMAN-WARD, DANIEL O. KANE,
N. DAVID KUPERSTOCK, GARY E. PHIFER III,
STEVEN LEE PUTTERMAN, POLLY RAE, DAIN ERIC RUNESTAD,
ROBERT J. SCHWARTZ, and CHRISTOPHER PATRICK SHECKLEV
Appeal 2016-0046451
Application 12/848,5102
Technology Center 3600
Before NINA L. MEDLOCK, MATTHEW S. MEYERS, and
ROBERT J. SILVERMAN, Administrative Patent Judges.
MEDLOCK, Administrative Patent Judge.
DECISION ON APPEAL
1 Our decision references Appellants’ Appeal Brief (“App. Br.,” filed
September 8, 2015) and Reply Brief (“Reply Br.,” filed April 1, 2016), and
the Examiner’s Answer (“Ans.,” mailed February 2, 2016), and Final Office
Action (“Final Act.,” mailed March 17, 2015).
2 Appellants identify The Prudential Insurance Company of America as the
real party in interest. App. Br. 2.
Appeal 2016-004645
Application 12/848,510
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner’s final
rejection of claims 70-81, 84-97, and 100-106. We have jurisdiction under
35 U.S.C. § 6(b).
We AFFIRM.
CLAIMED INVENTION
Appellants’ claimed invention “relates generally to financial
instruments and more particularly to a financial instrument providing a
guaranteed growth rate and a guarantee of lifetime payments” (Spec. 1,11. 2-
5).
Claims 70, 71, and 87 are the independent claims on appeal.
Claim 70, reproduced below, is illustrative of the claimed subject matter:
70. A data processing system configured to manage a
financial instrument, the financial instrument guaranteeing, for
the life of one or more designated parties, minimum annual
withdrawals from a financial account regardless of investment
performance of one or more investments selected for the
financial account, the guarantee subject to conditions defined in
the financial instrument, the data processing system comprising:
one or more processors; and
one or more memory modules, wherein at least one of the
one or more memory modules comprises software configured,
when executed by the one or more processors, to:
calculate a protected value, wherein the protected
value is at least equal to an account balance of the financial
account increasing at a minimum positive growth rate
guaranteed under conditions specified by the financial
instrument, wherein the account balance is determined as
of an effective date of the guarantee of the minimum
annual withdrawals, and wherein the minimum positive
growth rate is a variable rate;
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calculate a guaranteed minimum annual withdrawal
amount from the financial account as a function of the
protected value;
calculate a step-up to the protected value based at
least in part on an account balance of the financial account
as determined on a periodic basis;
add, to the protected value, the calculated step-up to
the protected value based at least in part upon the account
balance;
calculate an increase to the protected value based at
least in part on a cumulative total of one or more
payments;
add, to the protected value, the calculated increase
to the protected value based at least in part upon the
cumulative total of one or more payments;
calculate a reduction to the protected value in
response to a determination that a cumulative total of one
or more withdrawals from the financial account for a
certain time period exceeds the guaranteed minimum
annual withdrawal amount by an excess amount, wherein
the reduction to the protected value calculated by the
software is based at least in part on the excess amount, and
wherein the certain time period is defined in the financial
instrument;
subtract, from the protected value, the calculated
reduction; and
calculate, in response to determining an increase in
the protected value, a new guaranteed minimum annual
withdrawal amount as a function of the increased
protected value.
REJECTION
Claims 70-81, 84-97, and 100-106 are rejected under 35 U.S.C.
§ 101 as directed to non-statutory subject matter.
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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. See, e.g., Alice Corp. Pty. Ltd. v. CIS
Bank Inti, 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
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
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(Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc.,
790 F.3d 1343, 1346 (Fed. Cir. 2015)).
Appellants maintain here that the § 101 rejection cannot be sustained
because the Examiner has not satisfied the Office’s initial burden of
establishing a prima facie case that the claims are directed to non-statutory
subject matter (App. Br. 6-8). Appellants charge that the Examiner has
repeatedly refused to identify an abstract idea, and has sought to improperly
shift the burden to Appellants to establish a prima facie case that the claims
are not directed to non-statutory subject matter (id. at 6). Appellants argue
that the Examiner merely asserts that ‘“the claims are directed to the abstract
idea of a method of organizing human activities’ without any further
explanation” (id. at 6), and further argue that, although the Examiner
concludes that the additional elements in the claims do not amount to
significantly more than the abstract idea, the Examiner does not identify the
additional elements or explain why these particular elements do not amount
to significantly more than an abstract idea (id. at 7). Appellants, thus,
maintain that by not providing any explanation or rationale to support the
rejection under § 101, the Examiner has denied Appellants a meaningful
opportunity to evaluate the merits of the rejection and provide an effective
response (id. at 6-7).
Responding, in the Answer, to Appellants’ arguments, the Examiner
explains that the claims are directed to a “process for managing a financial
instrument guaranteeing minimum periodic withdrawals from a financial
account regardless of investment performance,” which the Examiner
determines is “similar to a method of organizing human activities found by
the courts to be abstract ideas”; and that the claims, when considered as a
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whole, do not amount “significantly more” than the abstract idea because the
claims do not effect an improvement to another technology or technical
field, do not amount to an improvement to the functioning of a computer
itself, and do not move beyond a general link of the use of an abstract idea to
a particular technological environment (Ans. 3—4). Referencing claim 70,
for example, the Examiner notes that the limitations that set forth or describe
the abstract idea are:
“calculating” (a protected value; a guaranteed minimal annual
withdrawal amount; a step-up to a protected value; an increase to
the protected value; a reduction to a protected value; and a new
guaranteed minimal annual withdrawal amount), “adding” (the
calculated step-up to the protected value; and the calculated
increase to the protected value), and “subtracting” (the calculated
reduction).
Id. at 3.
Responding in the Reply Brief, Appellants assert that the rejection
continues to be improper. Appellants charge that, rather than identifying an
abstract idea, the Examiner merely “parrot[s] a short list of claim elements
and declare[s] those elements abstract” (Reply Br. 2), and that the Examiner
“provides an insufficient explanation for why the identified concept is an
abstract idea” {id. at 2-3). Appellants, thus, ostensibly maintain that the
Examiner still has failed to establish a prima facie case of patent-
ineligibility. We disagree.
The Federal Circuit 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
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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, 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.”).
The Examiner, in our view, set forth the statutory basis of the
rejection in a sufficiently articulate and informative manner as to meet the
notice requirement of 35 U.S.C. § 132. And we find that, in doing so, the
Examiner set forth a prima facie case of patent-ineligibility such that the
burden shifted to Appellants to demonstrate that the claims are patent-
eligible.
Addressing the first step of the Mayo!Alice framework, Appellants
argue that the claims are directed to a tangible system that manages a
particular type of financial instrument in a particular way, and not to an
abstract idea (Reply Br. 2-3; see also App. Br. 8). Yet, although claim 70,
for example, recites tangible components, i.e., one or more processors, the
recited physical components merely provide the platform on which to
perform the abstract idea. As the court noted in In re TLI Commc ’ns LLC
Patent Litig., 823 F.3d 607 (Fed. Cir. 2016), “not every claim that recites
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concrete, tangible components escapes the reach of the abstract-idea
inquiry.” Id. at 611.
Similar to the situation in TLI, the focus of the claims here is not on
the improvement of any technology or technical field, but instead on
implementation of the abstract idea, i.e., managing a financial instrument to
provide guaranteed minimum annual payments regardless of investment
performance. Indeed, the Specification supports this view, describing that
“the invention may allow an account holder to maintain liquidity in an
account while at the same time receiving a guarantee of lifetime income and
a guaranteed growth” and that “[cjertain embodiments may also allow an
account holder to receive the potentially higher rates of return associated
with variable annuities while . . . avoiding the associated risk of loss by
obtaining a guaranteed growth rate” (Spec. 4-5).
Appellants assert that the system “calculates a protected value that is
at least equal to an account balance of the financial account”; “calculates the
minimum annual withdrawal amount as a function of the protected value”;
and “calculates a step-up, an increase, and a reduction to the protected value
based on an account balance of the financial account determined on a
periodic basis, a cumulative total of one or more payments, or an excess
amount” (Reply Br. 3; see also App. Br. 8). Yet, we find no indication in
the record, nor do Appellants point to anything in the record to indicate, that
these operations 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 to carry out the claimed operations, which, as
the Examiner observes (Ans. 3), involve no more than “calculating,”
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“adding,” and “subtracting,” i.e., receiving and processing information,
which are generic computer functions. See Elec. Power Grp., LLC v. Alstom
S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016) (claims held to be directed to an
abstract idea where “[t]he advance they purport to make is a process of
gathering and analyzing information of a specified content, then displaying
the results, and not any particular assertedly inventive technology for
performing those functions.”); DDR Holdings, 773 F.3d at 1256 (“[Ajfter
Alice, there can remain no doubt: recitation of generic computer limitations
does not make an otherwise ineligible claim patent-eligible. The bare fact
that a computer exists in the physical rather than purely conceptual realm is
beside the point.”) (internal citations and quotation marks omitted).
Also, to the extent that Appellants argue that the claims are patent-
eligible because they satisfy the transformation prong of the machine-or-
transformation test set forth in Bilski v. Kappos, 130 S. Ct. 3218 (2010), i.e.,
that the data processing system “transforms a protected value by calculating
and adding various values to the protected value” (App. Br. 8), we note that
the alleged “transformation” is a manipulation of data, which is not
sufficient to meet the transformation prong under § 101. See Gottschalkv.
Benson, 409 U.S. 63, 71-72 (1972) (a computer-based algorithm that merely
transforms data from one form to another is not patent-eligible).
We are not persuaded, for the reasons set forth above, that the
Examiner erred in rejecting claims 70-81, 84-97, and 100-106 under
35 U.S.C. § 101. Therefore, we sustain the Examiner’s rejection.
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DECISION
The Examiner’s rejection of claims 70-81, 84-97, and 100-106 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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