Ex Parte Pullman

Patent Trials and Appeals Board

Apr 29, 2019

14714482 - (D) (P.T.A.B. Apr. 29, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/714,482 05/18/2015
23280 7590 05/01/2019
Davidson, Davidson & Kappel, LLC
589 8th A venue
16th Floor
New York, NY 10018
FIRST NAMED INVENTOR
David Pullman
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.
359.lOOlCON 5249
EXAMINER
MEINECKE DIAZ, SUSANNA M
ART UNIT PAPER NUMBER
3683
NOTIFICATION DATE DELIVERY MODE
05/01/2019 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):
ddk@ddkpatent.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte DAVID PULLMAN
Appeal2017-004700
Application 14/714,482
Technology Center 3600
Before MURRIEL E. CRAWFORD, ANTON W. PETTING, and
MATTHEWS. MEYERS, Administrative Patent Judges.
CRAWFORD, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant seeks our review under 35 U.S.C. § 134 of the Examiner's
final rejection of claim 1. We have jurisdiction under 35 U.S.C. § 6(b).
Appellant appeared for oral hearing on March 26, 2019.
SUMMARY OF DECISION
We AFFIRM.
THE INVENTION
Appellant claims a method and device for pooling intellectual
property assets for valuing and securitizing intellectual property assets.
(Spec. ,r 2, Title).
Appeal2017-004700
Application 14/714,482
Claim 1 is on appeal.
1. A method for creating a pool of intellectual
property assets for securitization comprising the steps of:
identifying rights to each of a plurality of
intellectual property assets including a first intellectual
property asset and a second intellectual property asset,
the rights including first rights corresponding to a first
revenue stream and second rights corresponding to a
second revenue stream;
identifying revenues in the first revenue stream
associated with the first intellectual property asset so as
to define first asset first revenues, and revenues in the
second revenue stream associated with the first
intellectual property asset so as to define first asset
second revenues;
identifying revenues in the first revenue stream
associated with the second intellectual property asset so
as to define second asset first revenues, and revenues in
the second revenue stream associated with the second
intellectual property asset so as to define second asset
second revenues;
selecting, using a processor, at least the first
intellectual property asset and the second intellectual
property asset from the plurality of the intellectual
property assets to form a pool of intellectual property
assets to be securitized, the pool having a first pool
revenue stream including the first asset first revenues and
the second asset first revenues and a second pool revenue
stream including the first asset second revenues and the
second revenue second revenues, the first and second
assets being selected so that the first pool revenue stream
is at least a first predetermined amount and the second
pool revenue is at least a second predetermined amount.
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Application 14/714,482
THE REJECTION
Claim 1 is rejected under 35 U.S.C. § 101 as directed to a judicial
exception without significantly more.
Claim 1 is rejected under 35 U.S.C. § I03(a) as unpatentable for
Moody in view of Keough.
Keough et al.
("Keough")
References
WO 02/37367 Al May 10, 2002
Jay H. Eisbruck Moody's Approach to Rating Music Royalty and
Intellectual Property-Backed Transactions: There's No Business Like Show
Business Moody's Investors Service 1-16 (July 2, 1999) (hereinafter
"Moody")
ANALYSIS
35 U.S.C. § 101 REJECTION
We will sustain the rejection of claim 1 under 35 U.S.C. § 101.
The Supreme Court
set forth a framework for distinguishing patents
that claim laws of nature, natural phenomena, and
abstract ideas from those that claim patent-eligible
applications of those concepts. First, ... determine
whether the claims at issue are directed to one of
those patent-ineligible concepts .... If so, ... 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
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Application 14/714,482
"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 Int'!, 573 U.S. 208, 217-218 (2014)
(citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66,
72-73 (2012)) ( citations omitted).
To perform this test, we must first determine whether the claims at
issue are directed to a patent-ineligible concept. 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."' See Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet
Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir.
2015)). 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.
In so doing we apply a "directed to" two prong test; 1) evaluate
whether the claim recites a judicial exception, and 2) if the claim recites a
judicial exception, evaluate whether the judicial exception is integrated into
a practical application. 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 FR 50, pp 50-57 (Jan. 7, 2019).
The Examiner determines that the claims are directed to securitizing
assets and thus is a fundamental economic practice. (Final Act. 4). The
Examiner found the processor is only broadly applied to the abstract ideas at
a high level of generality and functions in a manner that is routine,
conventional, and well-understood in the art. (Id.).
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Application 14/714,482
The Specification states that the invention relates generally to
methods and devices for valuing intellectual property assets. (Spec. 1 ).
Securities based on intellectual property royalties often involve receivables
which are not fully known and as such securitization transactions based on
intellectual property assets may require extensive analysis. (Spec. 2).
Securitization of intellectual property assets in simplified form involves an
owner selling certain royalty rights to noteholders, with notes being backed
by the future royalty stream. The owner receives an up-front payment and in
exchange the owner agrees that the future royalty payments will pay off the
principal and the interest due to the noteholder. (Spec. ,r 6). In the
invention, the processor uses a least squares linear regression mathematical
method to form groups of assets having more than a minimum total revenue
and more than the minimum number of assets. The group that most closely
resembles the desired ratio may then be selected to create the pool. (Spec. ,r
70). The method of creating a pool of intellectual property assets for
securitization of the present invention relates to activity connected to
commercial and sales interactions between owners of royalty rights and
buyers of royalty rights.
Claim 1 recites steps of creating a pool of intellectual property assets
and as such is directed to commercial and sales interactions between the
owner of the royalty rights and purchaser of the royalty rights. In this
regard, claim 1 recites "identifying rights to each of a plurality of intellectual
property assets including a first intellectual property asset and a second
intellectual property asset." The rights include "first rights corresponding to
a first revenue stream and second rights corresponding to a second revenue
stream." Next revenues in a "first revenue stream associated with the first
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intellectual property asset" and a "second revenue stream associated with the
second intellectual property asset" are identified. A pool is formed by
"selecting, using a processor, at least the first intellectual property asset and
the second intellectual property asset." The first and second assets are
selected "so that the first pool revenue stream is at least a first predetermined
amount and the second pool revenue is at least a second predetermined
amount."
We thus agree with the Examiner's findings that claim 1 recites a
fundamental economic practice because it relates to creating a pool of
intellectual property assets for securitization or sale of rights in those assets.
Claim 1 is directed to a certain method of organizing human activities i.e., a
fundamental economic practice related to sales activity. Guidance 52.
Also, we find the steps of "selecting at least the first intellectual
property asset and the second intellectual property asset" from the pool so
that the "first pool revenue stream is at least a first predetermined amount
and the second pool revenue is at least a second predetermined amount,"
(Spec. 19), constitute analyzing information by steps people go through in
their minds, or by mathematical algorithms, which without more, is
essentially a mental processes within the abstract-idea category. Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016); see
also buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014)
( claims directed to certain arrangements involving contractual relations are
directed to abstract ideas).
Turning to the second prong of the "directed to test", we note that
claim 1 requires a "processor." The recitation of the word "processor" does
not impose "a meaningful limit on the judicial exception, such that the claim
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is more than a drafting effort designed to monopolize the judicial
exception." 2019 Revised Patent Subject Matter Eligibility Guidance at 53.
The Supreme Court stated that:
[T]he mere recitation of a generic computer cannot
transform a patent-ineligible abstract idea into a
patent-eligible invention. Stating an abstract idea
"while adding the words 'apply it'" is not enough
for patent eligibility. Nor is limiting the use of an
abstract idea "'to a particular technological
environment."' Stating an abstract idea while
adding the words "apply it with a computer"
simply combines those two steps, with the same
deficient result. Thus, if a patent's recitation of a
computer amounts to a mere instruction to
"implement [t ]" an abstract idea "on . . . a
computer," that addition cannot impart patent
eligibility. This conclusion accords with the pre-
emption concern that undergirds our § 101
jurisprudence. Given the ubiquity of computers,
wholly generic computer implementation is not
generally the sort of "additional featur[ e ]" that
provides any "practical assurance that the process
is more than a drafting effort designed to
monopolize the [abstract idea] itself."
Alice, 573 U.S. at 223-224 (alterations in original) (citations omitted).
Instead, "the relevant question is whether the claims here do more
than simply instruct the practitioner to implement the abstract idea ... on a
generic computer." Id. at 225. They do not.
Using a computer to retrieve, select, and apply decision criteria to data
and modify the data, as a result, as is recited in claim 1, amounts to
electronic data query and retrieval----one of the most basic functions of a
computer. In short, each step does no more than require a generic computer
to perform generic computer functions. As to the data operated upon, "even
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if a process of collecting and analyzing information is 'limited to particular
content' or a particular 'source,' that limitation does not make the collection
and analysis other than abstract." SAP Am. Inc. v. InvestPic, LLC, 890 F.3d
1016, 1022 (Fed. Cir. 2018).
The recitation of a processor does not affect an improvement in the
functioning of a computer or other technology. The claim does not recite a
particular machine or manufacture that is integral to the claims, and does not
transform or reduce a particular article to a different state or thing. Id. As
such, claim 1 does not include additional elements that integrate the
exception into a practical application.
Turning to the second step of the Alice analysis, because we find that
claim 1 is directed to a fundamental economic practice, the claims must
include an "inventive concept" in order to be patent-eligible, i.e., there must
be an element or combination of elements that is sufficient to ensure that the
claim in practice amounts to significantly more than the abstract idea itself.
See Alice, at 217-218 ( quoting Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 72-73 (2012)).
All of the computer functions detailed above are well-understood,
routine, conventional activities previously known to the trading industry.
See Elec. Power Grp., 830 F.3d at 1354; see also In re Katz Interactive Call
Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011) ("Absent a
possible narrower construction of the terms 'processing,' 'receiving,' and
'storing,' ... those functions can be achieved by any general purpose
computer without special programming").
Considered as an ordered combination, the processor of claim 1 adds
nothing that is not already present when the steps are considered separately.
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The sequence of data reception-analysis-access/display is equally generic
and conventional or otherwise held to be abstract. See Ultramercial, Inc. v.
Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014) (sequence of receiving,
selecting, offering for exchange, display, allowing access, and receiving
payment recited an abstraction), Inventor Holdings, LLC v. Bed Bath &
Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017) (holding that sequence
of data retrieval, analysis, modification, generation, display, and
transmission was abstract), Two-Way Media Ltd. v. Comcast Cable
Commc 'ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017) (holding sequence of
processing, routing, controlling, and monitoring was abstract). The ordering
of the steps is, therefore, ordinary and conventional.
The claims do not, for example, purport to improve the functioning of
the computer itself. As we stated above, the claims do not affect an
improvement in any other technology or technical field. The Specification
spells out that a client computer is used to perform the steps of claim 1.
(See, e.g., Spec. ,r,r 69). Thus, the claims at issue amount to nothing
significantly more than instructions to apply the abstract idea of information
access using some unspecified, generic computer. Under our precedents,
that is not enough to transform an abstract idea into a patent-eligible
invention. See Alice, at 226.
\Ve have reviewed all the arguments (Appeal Br. 4; Reply Br. 2----3)
Appellant has submitted concerning the patent eligibility of the claims
before us that stand rejected under 35 U.S.C. § 101. We find that our
analysis above substantially covers the substance of all the arguments, which
have been made. But, for purposes of completeness, we will address various
arguments in order to make individual rebuttals of same . .._,
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We are not persuaded of error on the part of the Examiner by
Appellant's argument that the processor is not being "broadly applied to the
abstract ideas at a high level of generality" but rather a very specific
processor. Appeal Br. 4. The claims do not recite a specialized processor.
No details about the processor are recited. In addition, the Appellant does
not direct our attention to a description in the Specification of a specialized
processor. The Specification discloses that the computer may be a client
computer which indicates that the processor recited is a general purpose
computer. (Spec. i169). Further, Appellant has not established that the steps
of claim l which involve identifying data (rights/revenue data) and
processing that data by selecting which assets to place in a pool must be
performed by a specialized computer. In our view, transmitting and
processing data are computer functions that can be performed by any general
purpose computer.
The gravamen of Appellant's argument appears to be that the claim
requires a general purpose computer to execute the specific recited
instructions, which renders the cornputer a "specialized" processor. In
contrast, courts have consistently held that, in a§ 101 analysis, mere use of a
computer as a tool to execute instn1ctions that are no more than abstract
ideas, i.e., what Appellant refers to as a "specific" computer, does not confer
patent eligibility on an otherwise ineligible claim. Credit Acceptance Corp.
v. Westlake Servs., 859 F.3d 1044, 1055 (Fed. Cir. 2017) (explaining that
Federal Circuit cases "have rnade clear that mere automation of manual
processes using generic computers does not constitute a patentable
improvement in computer technology" because in such cases "the focus of
the claims is not on ... an improvement in computers as tools, but on ...
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independently abstract ideas that use computer as tools") (inten1al quotation
marks and citations omitted); see also Guidance, 84 Fed. Reg. at 55.
In view of the foregoing, we will sustain the Examiner's rejection of
claim 1 under 35 U.S.C. § 101.
3' li S' C " 101 ) RI:cJT'('"l-"JO-N ,../ ,, e ~ C /. ~· - ..__, ( a. _["'..,1 LI J - -
\Ve will not sustain this rejection because we agree with the Appellant
that the prior art does not disclose selecting at least the first intellectual
property asset and the second intellectual property asset to form a pool of
intellectual property assets, "the.first and second assets being selected so
that the first pool revenue stream is at least a first predetermined amount
and the second pool revenue is at least a second predetermined amount."
Claim l ( emphasis added).
The Examiner relies on Keough' s Figure 1 and page 2 for teaching
this subject matter. (Final Act. 6). Specifically, the Examiner finds that
Keough teaches that various revenue streams may be such that 50% is
international, tax-based, 25% is enteiiainment based) and 25% is (50%
health insurance and 501% malpractice). \Vhile the Examiner may be correct
that Keough teaches that the mix of revenue streams are allocated according
to the above criteria, the Examiner has failed to establish that Keough
teaches that the allocations are such that the "first and second assets being
selected so that the first pool revenue stream is at least a first predetermined
amount and the second poo1 revenue is at least a second predetermined
arnount" as required by c1aim 1.
In view of the foregoing, we will not sustain this rejection.
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CONCLUSIONS OF LAW
We conclude the Examiner did not err in rejecting claim 1 under
35 U.S.C. § 101.
DECISION
The decision of the Examiner to reject claim 1 under 35 U.S.C. § 101
is affirmed.
The decision of the Examiner to rejection claim 1 under 35 U.S.C.
§ 103(a) is not affirmed.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(l )(iv).
AFFIRMED
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