Ex Parte Sandor et al

Patent Trial and Appeal Board

Dec 31, 2018

11840482 (P.T.A.B. Dec. 31, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/840,482 08/17/2007
35811 7590 01/03/2019
IP GROUP OF DLA PIPER LLP (US)
ONE LIBERTY PLACE
1650 MARKET ST, SUITE 4900
PHILADELPHIA, PA 19103
UNITED ST A TES OF AMERICA
FIRST NAMED INVENTOR
Richard Sandor
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.
CCX-10-1424CIP-CON 1411
EXAMINER
BORISSOV, IGOR N
ART UNIT PAPER NUMBER
3649
NOTIFICATION DATE DELIVERY MODE
01/03/2019 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):
pto. phil@dlapiper.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte RICHARD SANDOR, MICHAEL WALSH, and
MURALI KANAKASABAI
Appeal2017-001894
Application 11/840,482 1
Technology Center 3600
Before BIBHU R. MOHANTY, MICHAEL W. KIM, and
BRADLEY B. BAY AT, Administrative Patent Judges.
BAY AT, Administrative Patent Judge.
DECISION ON APPEAL
This is an appeal under 35 U.S.C. § 134(a) from the Examiner's
decision rejecting claims 1 and 36-46, which are all the pending claims in
the application. 2 Final Act. 2-33 (mailed Feb. 11, 2016). We have
jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 Appellants identify the real party in interest as "Chicago Climate
Exchange." Appeal Br. 1 (filed April 11, 2016).
2 Claims 2-35 have been canceled. Id. at 26.
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Application 11/840,482
STATEMENT OF THE CASE
Appellants' invention relates to systems and methods for "facilitating
trade of emission allowances and offsets among participants, which includes
establishing an emission reduction schedule for certain participants based on
emissions information provided by those participants and determining debits
or credits for each certain participant in order to achieve the reduction
schedule." Spec. 4: 10-14.
Claimed Subject Matter
Claims 1, 37, and 39 are the only independent claims on appeal and
recite substantially similar subject matter. See Appeal Br., Claim App.
Claim 1, reproduced below, is illustrative of the subject matter on appeal.
1. A computer-implemented method of promoting a
reduction of emissions of greenhouse gases (GHGs) wherein all
steps are performed by at least one computer, the computer-
implemented method comprising:
registering, by a computing system, participants on a
registry database, the computing system comprising the at least
one computer, the registry database and an electronic trading
platform;
establishing, by the computing system, a respective
emission reduction schedule for emission of the GHGs for a set
future period of time of greater than one year for each of the
registered participants that produces emissions ("emitting
participants") based on emissions information over previous
years provided by the emitting participants, wherein each
emission reduction schedule sets limits on GHG emissions
during the set future period of time for a particular one of the
emitting participants;
establishing, by the computer system, tradable financial
instruments representing an amount of emission reduction
equivalents comprising emission allowances, emission offsets,
and early action credits;
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establishing, by the computer system, a maximum
emission mitigation quantity that represents a maximum
quantity of emission reduction credits that a particular
registered participant must obtain in order to achieve
compliance with said participant's respective emission
reduction schedule;
crediting, by the computer system, the emission
allowances to each of the emitting participants based on the
respective emission reduction schedules by transmitting a signal
over a communications network to the registry database, the
signal causing the registry database to transfer an amount of
available emission allowances into the respective accounts of
the emitting participants;
crediting, by the computer system, a quantity of the early
action credits to those emitting participants that undertake at
least one emission-reduction project or activity prior to
establishment of their respective emission reduction schedules
by transmitting a signal over the communications network to
the registry database, the signal causing the registry database to
transfer the quantity of the early action credits into the
respective accounts of the emitting participants that undertake
said at least one emission-reduction project or activity;
interrogating, by the computing system, each of the
emitting participants over a communications network to collect
emissions data over the set future period of time for each of the
emitting participants;
comparing, by the computing system, for each of the
emitting participants, the respective collected emissions data
with corresponding data in the respective established reduction
schedule;
determining, by the computing system, for each of the
emitting participants, whether said collected emissions data
exceeds or does not exceed the corresponding data in the
established reduction schedule of the respective emitting
participant based on the comparison; and
converting, by the computing system, for the respective
emitting participant, the determination into a debit or a credit,
wherein the converting of the determination into the debit
includes debiting the respective emitting participant a quantity
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of the tradable financial instruments by transmitting a signal
over the communications network to the registry database that
causes the registry database to transfer the quantity of the
tradable financial instruments out of the respective account of
the emitting participant, thereby penalizing said emitting
participant, when the collected emissions data exceeds the
corresponding data in the established reduction schedule of said
emitting participant,
said emitting participant achieving compliance with the
established reduction schedule by obtaining an additional
quantity of at least one of the financial instruments and the
emission reduction equivalents responsive to the debiting of the
quantity of the financial instruments, said achieving compliance
further comprising transmitting a signal over the
communications network to the registry database to cause the
registry database to transfer the obtained additional quantity
into the respective account of the respective emitting
participant, the obtained additional quantity being selected from
a lesser one of the established maximum emission mitigation
quantity and a difference quantity associated with a difference
between the collected emissions data and the corresponding
data in the established reduction schedule of the respective
emitting participant; and
wherein the converting of the determination into the
credit includes crediting the respective emitting participant at
least one of additional financial instruments and additional
emission reduction equivalents by transmitting a signal over the
communications network to the registry database that causes
the registry database to transfer the at least one of the additional
financial instruments and the additional emission reduction
equivalents into the respective account of the emitting
participant, thereby rewarding the respective emitting
participant, when the collected emissions data does not exceed
the corresponding data in the established reduction schedule of
said emitting participant,
said emitting participant, responsive to the crediting,
executes at least one of trading via the electronic trading
platform and banking via the registry database of at least one of
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the additional financial instruments and the additional emission
reduction equivalents.
Appeal Br. 24--26, Claims App.
Rejections3
Claims 1 and 36-46 are rejected under 35 U.S.C. 101 because the
claimed invention is directed to non-statutory subject matter.
Claims 1, 36, and 37 are rejected under 35 U.S.C. I03(a) as being
unpatentable over Acid Rain Program, SO2 Allowance Auction and
Electronic Allowance Transfer; Federal Register: June 6, 1996, 6 pages
(EPA Notice) in view of Soestbergen et al. (US 2002/0143693 Al, published
Oct. 3, 2002), and further in view of Bartels et al. (US 2009/0070252 Al,
published Mar. 12, 2009).
Claims 1, 36, and 37 are rejected under 35 U.S.C. I03(a) as being
unpatentable over Acid Rain Program, SO2 Allowance Auction and
Electronic Allowance Transfer; Federal Register: June 6, 1996, 6 pages
(EPA Notice) in view of Soestbergen, and further in view of Parry et al.
(Greenhouse Gas "Early Reduction" Programs: A Critical Appraisal; July
2000, 14 pages).
Claims 39, 40, 43 and 46 are rejected under 35 U.S.C. I03(a) as being
unpatentable over EPA Notice in view of Soestbergen, and further in view of
Togher et al. (US 6,014,627, issued Jan. 11, 2000).
Claim 38 is rejected under 35 U.S.C. I03(a) as being unpatentable
over EPA Notice in view of Soestbergen, further in view of Bartels, and
further in view of Togher.
3 Ans. 3--4 (mailed Sept. 20, 2016).
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Claim 38 is rejected under 35 U.S.C. I03(a) as being unpatentable
over EPA Notice in view of Soestbergen, further in view of Parry, and
further in view of Togher.
Claim 44 is rejected under 35 U.S.C. I03(a) as being unpatentable
over EPA Notice in view of Soestbergen, further in view of Togher, and
further in view of EPA: Programs & Regulations; Acid Rain Program; 2001
(Acid Rain Program).
Claim 45 is rejected under 35 U.S.C. I03(a) as being unpatentable
over EPA Notice in view of Soestbergen, further in view of Togher, and
further in view of Sharp et al. (US 2002/0111892 Al, published Aug. 15,
2002).
Claims 41 and 42 are rejected under 35 U.S.C. I03(a) as being
unpatentable over EPA Notice in view of Soestbergen, further in view of
Togher, and further in view of Rosenberg (Emissions Credit Futures
Contracts on the Chicago Board of Trade: and Rational Challenges to the
Right to Pollute; Introduction; Spring, 1994 ).
ANALYSIS
Non-Statutory Subject Matter
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. CLS
Bank Int'!, 573 U.S. 208, 215-17(2014) (internal quotation marks and
citation omitted).
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The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Incorporated, 566 U.S. 66, 82-84 (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,
573 U.S. at 2. 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., to 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. 66, 78-79).
Under Alice step one, the Examiner determines "claims 1 and 36-46
describe the concept of establishing an emission reduction schedule,
comparing the determined emissions data with the corresponding data in the
established reduction schedules, and debiting or crediting a trading
participant's account based on said 'comparing' ... similar to the concepts
involving human activity relating to commercial practices (e.g., hedging in
Bilski) that have been found by the courts to be abstract ideas." Final Act. 3;
id. at 3--4 ( the Examiner reproduces all the recited steps of claim 1, sans the
computing system, as encompassing the abstract idea.). Additionally, the
Examiner determines "[ t ]he recited steps merely employs mathematical
relationships to manipulate existing information to generate additional
information in the form of a 'determining whether a participant's account
should be debited or credited,' and outputting said determined data. This
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idea is similar to the basic concept of manipulating information using
mathematical relationships ( e.g., converting numerical representation in
Benson), which has been found by the courts to be an abstract idea." Ans. 5.
Appellants argue claims 1 and 36-46 as a group. See Appeal Br. 9--
18. We select independent claim 1 as the representative claim for this group,
and, thus, claims 3 6-46 stand or fall with claim 1. 3 7 C.F .R.
§ 4I.37(c)(l)(iv).
Alleging error in the rejection, Appellants argue
the claims are not directed to "a basic economic practice."
Instead, the claims recite very specialized computer-centric
methods and systems that include, among other things, features
such as generating and transmitting control signals that
automatically cause another computer component to transfer
financial instruments, early action credits, allowances, etc. into
and out of participant accounts based on their respective
emissions activities.
Appeal Br. 10. This argument fails to show error in the rejection because
the Examiner did not characterize the abstract idea as "a basic economic
practice." As discussed above, the Examiner determines the claims are
similar to concepts involving certain methods of organizing human activity
relating to commercial practices. See Final Act. 4.
We disagree with Appellants' contention that the claims are patent-
eligible in view of Enfzsh and McRO. See Reply Br. 2--4, 5-8. Appellants
have not offered any persuasive evidence or technical reasoning that the
computer implementation improves the functioning of the computing system
itself. "[F]aster and more efficient retrieval of information provided by the
indexed registry database ... [ may be] important for the debiting and
crediting of respective emitting participant accounts" (id. at 3), but this does
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not reflect an improvement to the functioning of the claimed computing
system. 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. In Enfish, for example, the court
noted that "[ s ]oftware can make non-abstract improvements to computer
technology just as hardware improvements can." Enfzsh, LLC v. Microsoft
Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). The court asked "whether the
focus of the claims is on [a] specific asserted improvement in computer
capabilities ... or, instead, on a process that qualifies as an 'abstract idea'
for which computers are invoked merely as a tool." Id. at 1335-36. The
court found that the "plain focus of the claims" there was on an
improvement to computer functionality itself (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), not on economic or other
tasks for which a computer is used in its ordinary capacity. Id. Thus, we
determine whether the claim as a whole "focus[ es] on a specific means or
method that improves the relevant technology" or is "directed to a result or
effect that itself is the abstract idea and merely invoke [ s] generic processes
and machinery." McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d
1299, 1314--15 (Fed. Cir. 2016) (claims determined not abstract because
they "focused on a specific asserted improvement in computer animation.").
Unlike Enfish and McRO, we find the focus of the claim as whole here on is
on the latter, because the claimed computing system is merely invoked as a
tool for trading emission reductions in a technological environment.
Under Alice step two, the Examiner determines the additional
elements such as using a computer fail to transform the nature of the claim
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into a patent-eligible application because "the generic computing elements
recited are known and conventional. Final Act. 5. According to the
Examiner,
[ n Jone of the hardware recited "offers a meaningful limitation
beyond generally linking 'the use of the [method] to a particular
technological environment,' that is, implementation via
computers." . . . As per "transmitting a signal over a
communications network to the registry database, the signal
causing the registry database to transfer an amount of available
emission allowances into the respective accounts of the
emitting participants;" and "transmitting a signal over the
communications network to the registry database, the signal
causing the registry database to transfer the quantity of the early
action credits into the respective accounts of the emitting
participants that undertake said at least one emission-reduction
project or activity;" recitation, these limitations do not add
significantly more because they are simply an attempt to limit
the abstract idea to a particular technological environment, that
is, implementation via computers."
Id. at 5---6.
Appellants argue the claims include elements that amount to
significantly more than the abstract idea because: (i) the claims effect a
transformation of a particular article to a different state or thing, (ii) the
claims provide an improvement to another technology/technical field, (iii)
the claims include features such as activating separate computer components
to cause particular functions to occur only when certain conditions are met,
which is patent-eligible under Diehr, 4 (iv) the claims include features that
are comparable to patent-eligible Example 21 from the July 2015 Update on
Subject Matter Eligibility, (v) the limitations of the claims prevent the
4 Diamond v. Diehr, 450 U.S. 175 (1981).
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claims from preempting all methods and systems for gathering and
combining data, (iv) the elements of the claims are applied by use of a
particular machine provides improvements to the functioning of the
computer itself, and (vii) the claims recite specific limitations other than
what is well-understood, routine, and conventional in the field. Appeal Br.
11-17.
We have considered Appellants' arguments, but we are not persuaded
the Examiner erred in concluding that the additional elements fail to
transform the nature of the claim into a patent-eligible application. We
agree with the Examiner's rationale and response to arguments set forth on
pages 7-22 of the Answer as fully responsive to Appellants' arguments. As
such, we adopt them as our own. We add the following for emphasis.
In the Reply Brief, Appellants contend that the Examiner is
oversimplifying the claims and argue the "claims are directed to a computer
system with a novel system topography, including a uniquely-configured
registry database that improves upon the efficiency and speed of storing and
retrieving data when compared to conventional systems in this art. As such,
the focus of claims is in fact on the improvements to the existing
technological processes and functioning of the computing system and
software." Reply Br. 9. According to Appellants, the claims do effect a
transformation because they "recite that a first component ( e.g., a computer)
transmits control signals to a second component (e.g., a registry database).
In this manner the first computer is controlling the actions of a technology
( e.g., the registry database) and technological process such as transferring of
credits and allowances into and out of the respective accounts of the registry
database." Id. at 10.
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The difficulty with Appellants' argument is that these alleged
improvements are neither reflected in claim 1 nor supported by the
Specification. For example, the Specification describes the computer
implementation of claim 1 as "includ[ing] a personal computer, a computer
workstation (e.g., Sun, Hewlett-Packard), a laptop computer, a server
computer, a mainframe computer, a handheld device ( e.g., a personal digital
assistant, a Pocket Personal Computer (PC), a cellular telephone, etc.), an
information appliance, and/ or another type of generic or special purpose,
processor-controlled device capable of receiving, processing, and/or
transmitting digital 30 data." Spec. 40:25-30 (emphasis added). Further,
the purportedly "uniquely-configured registry" is described as "be[ing]
implemented using a database and computer software ... [that] can also
include information on retirement accounts for allowances and offsets and
early action credits based on activities prior to establishment of the system."
Id. 11: 18-21. The Specification describes these additional elements as well-
known conventional computing components that perform basic and routine
computer functions, such as transmitting a signal. We are not apprised of
any supporting disclosure for this alleged novel topography and its
associated improvements to the functioning of the claimed computer system.
Contrary to Appellants' argument (Reply Br. 4--5), we disagree that
the claims are patent-eligible in view of Bascom. 5 In Bascom, the Federal
Circuit held that "[t]he inventive concept described and claimed in the '606
patent is the installation of a filtering tool at a specific location, remote from
5 Bascom Global Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341
(Fed. Cir. 2016).
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the end-users, with customizable filtering features specific to each end user."
Bascom, 827 F.3d at 1350. The court explained that the remote location of a
filtering tool having customizable user-specific filtering features provides
the filtering tool both the benefits of a filter on a local computer and the
benefits of a filter on the ISP server, which is a technical improvement over
prior art ways of filtering content. Id. at 1350-51. Here, Appellants have
not demonstrated any particular arrangement in the claim as providing an
inventive concept parallel to Bascom in claiming a technology-based
solution.
In view of the foregoing, we are not persuaded that the Examiner
erred in concluding that claim 1 is directed to non-statutory subject matter.
Accordingly, we sustain the Examiner's rejection of claim 1 under 35 U.S.C.
§ 101, and claims 3 6-46, which fall with claim 1.
Obviousness
We are persuaded by Appellants' arguments that EPA Notice, on
which the Examiner relies, fails to disclose a maximum emission mitigation
quantity, as required by independent claims 1, 37, and 39. See Appeal Br.
18-20.
During examination, claims are to be given their broadest reasonable
interpretation consistent with the specification, and the language should be
read in light of the specification as it would be interpreted by one of ordinary
skill in the art. In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed.
Cir. 2004) ( citations omitted).
Here, maximum emission mitigation quantity "represents a maximum
quantity of emission reduction credits that a particular registered participant
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must obtain in order to achieve compliance with said participant's respective
emission reduction schedule." Claim 1. Maximum emission mitigation
quantity is described "as the maximum quantity of purchases of [Carbon
Financial Instruments] CFls ... participants undertake in order to achieve
compliance with annual emission reduction commitments." Spec. 14:27-
15:2. Figure 5 shows that the maximum quantity of emission mitigation
required rises at a fixed rate over time, "such that the maximum amount of
CO2 equivalent emissions recognized in determining the annual true-up for
each member is 2% above that participant's baseline emission level during
year 1 and year 2, and 3% above baseline during year 3 and year 4." Id.
14:23-25. For example, a participant with an emission target of 98% of the
baseline with emissions of 106% would not have to purchase CFis
corresponding to the difference of 8%; "[ r ]ather, the claimed maximum
emission mitigation quantity ensures that the participant only has to
purchase CFis corresponding to 4% of the baseline (i.e., the difference
between the lesser of the maximum recognized emission increase of 102%
of the baseline and the emissions of 106% of the baseline and the emission
target of98% of the baseline)." Reply Br. 12 (citing Spec., Figure 6). "In
other words, the claimed maximum emission mitigation quantity caps the
amount of CFis a participant must purchase." Id.
Although EPA Notice teaches that the minimum number of
allowances a participant purchases must be greater than the maximum total
emissions that the participant emits, it does not place any cap or limit on the
number of allowances that a participant must purchase to achieve
compliance, as maximum emission mitigation quantity would have been
understood by one of ordinary skill in the art. The Examiner's interpretation
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"that the number of allowances equal to total emissions at that participant
(unit) corresponds to the maximum emission mitigation quantity" (Ans. 23)
is inconsistent with the Specification. Under the Examiner's interpretation,
the participant in the above discussed example would be required to
purchase CFis equating at least 8% of the baseline target to be in
compliance, whereas the claimed maximum emission mitigation quantity
caps that purchase at 4% of the baseline.
Accordingly, we do not sustain the rejections of independent claims 1,
37, and 39 under 35 U.S.C. § 103(a). We also do not sustain the rejections
of dependent claims 36, 38, and 40-46, which rely on the same erroneous
interpretation as their corresponding independent claims.
DECISION
The Examiner's rejection under 35 U.S.C. § 101 is affirmed.
The Examiner's rejections under 35 U.S.C. § 103(a) are reversed.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a).
AFFIRMED
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