Ex Parte Schoen et al

Patent Trial and Appeal Board

Jul 30, 2014

10784719 (P.T.A.B. Jul. 30, 2014)

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.
10/784,719 02/23/2004 Matthew B. Schoen Schoen-P1-04 9452
28710 7590 07/31/2014
PETER K. TRZYNA, ESQ.
P O BOX 7131
CHICAGO, IL 60680
EXAMINER
MEINECKE DIAZ, SUSANNA M
ART UNIT PAPER NUMBER
3683
MAIL DATE DELIVERY MODE
07/31/2014 PAPER
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.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte MATTHEW B. SCHOEN,
JEAN-PHILIPPE KHODARA,
and
SWAMINATHAN PALANI
____________

Appeal 2012-007267
Application 10/784,719
Technology Center 3600
____________

Before MURRIEL E. CRAWFORD, HUBERT C. LORIN, and
ANTON W. FETTING, Administrative Patent Judges.

CRAWFORD, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellants seek our review under 35 U.S.C. § 134 of the Examiner’s
final decision rejecting claims 1–5, 35–43, 48, 51, 52, 57–65, 70–85, 115–
123, 128, 131, 132, 137–145, 150–162, and 166. We have jurisdiction over
the appeal under 35 U.S.C. § 6(b). The Appellants appeared for oral hearing
on June 24, 2014.

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Application 10/784,719

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Pursuant to our authority under 37 C.F.R. § 41.50(b), enter a new
ground of rejection under 35 U.S.C. § 101 of claims 1–5, 35–43, 48, 51, 52,
57–65, 70–85, 115–123, 128, 131, 132, 137–145, 150–162, and 166. We
reverse the prior art rejections pro forma.

BACKGROUND
Appellants’ invention is directed to computer aspects for carrying out
a method for determining participation in a pool (Spec. 13).
Claim 1 is illustrative:
1. A computer-aided method of determining
participation in a pool, the method including the steps of:
forming a pool to handle a monetary obligation that is a
financial liability over a period of time;
storing, in a computer system, rules for member
participation in the pool, the rules including a requirement that
at least one member of the pool assumes a larger share of the
obligation in the event at least one other member of the pool
has a reduced share of the obligation; and
applying the rules, with the computer system, to carry out
the step of determining the participation within the period of
time.

The Examiner relies on the following prior art reference as evidence
of unpatentability:
King US 5,704,045 Dec. 30, 1997
Walker US 6,119,093 Sept. 12, 2000
Kale US 7,050,998 B1 May 23, 2006

Sam McCord et al., Partnerships: If There’s A Beginning . . . There’s
An End, 37 The National Public Accountant 18–22 (Apr. 1992)
(hereinafter “McCord”).
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Appellants appeal the following rejections:
Claims 1–5, 35, 40–42, 57–65, 70–85, 115, 120–122, 137–145, 150–
162, and 166 are rejected under 35 U.S.C. § 103(a) as being unpatentable
over Walker and McCord.
Claims 36–39, 43, 48, 52, 116–119, 123, 128, and 132 are rejected
under 35 U.S.C. § 103(a) as being unpatentable over Walker, McCord, and
King.
Claims 51 and 31 are rejected under 35 U.S.C. § 103(a) as being
unpatentable over Walker, McCord, King, and Kale.

ISSUE
The issue in this appeal is whether the appealed claims recite patent
eligible subject matter pursuant to 35 U.S.C. § 101.

ANALYSIS
New ground of rejection under 35 U.S.C. § 101
Claims 1–5, 35–43, 48, 51, 52, 57–65, 70–85, 115–123, 128, 131,
132, 137–145, 150–162, and 166 are rejected under 35 U.S.C. § 101 as being
directed to patent ineligible subject matter.
Patent-eligible subject matter is defined in 35 U.S.C. § 101:
Whoever invents or discovers any new and useful process,
machine, manufacture, or composition of matter, or any new
and useful improvement thereof, may obtain a patent therefor,
subject to the conditions and requirements of this title.
There are three limited, judicially-created exceptions to the broad
categories of patent-eligible subject matter in § 101: laws of nature; natural
phenomena; and abstract ideas. Mayo Collaborative Servs. v. Prometheus
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Labs., Inc., 132 S. Ct. 1289, 1293 (2012). Nevertheless, “all inventions at
some level embody, use, reflect, rest upon, or apply laws of nature, natural
phenomena, or abstract ideas.” Id. Although a law of nature or an abstract
idea by itself is not patentable, a practical application of the law of nature or
abstract idea may be deserving of patent protection. Id. at 1293–94.
In Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), the
Supreme Court reiterated the framework set forth previously in Mayo, “for
distinguishing patents that claim laws of nature, natural phenomena, and
abstract ideas from those that claim patent-eligible applications of these
concepts.” Alice, 134 S. Ct. at 2355. The first step in the analysis is to
“determine whether the claims at issue are directed to one of those patent-
ineligible concepts.” Id. If they are directed to a patent-ineligible concept,
the second step in the analysis is to consider the elements of the claims
“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, 132 S. Ct. at 1297). In other
words, the second step is to “search for an ‘inventive concept’—i.e., 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.” Id. (brackets in original) (quoting Mayo, 132 S.
Ct. at 1294).
Alice involved “a method of exchanging financial obligations between
two parties using a third-party intermediary to mitigate settlement risk.”
Alice, 134 S. Ct. at 2356. Like the method of hedging risk in Bilski v.
Kappos, 561 U.S. 593 (2010)—which the Court deemed “a method of
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organizing human activity”—Alice's “concept of intermediated settlement”
was held to be “‘a fundamental economic practice long prevalent in our
system of commerce.”’ 134 S. Ct. at 2356. Similarly, the Court found that
“[t]he use of a third-party intermediary . . . is also a building block of the
modern economy.” Id. “Thus,” the Court held, “intermediated settlement
. . . is an ‘abstract idea’ beyond the scope of § 101.” Id.
Claim 1 of the instant application is directed to a computer-aided
method for determining participation in a pool that handles monetary
obligations that involves the steps of forming the pool, storing rules for
membership in the pool in a computer and applying the rules to determine
participation in the pool. In this regard, claim 1 is directed to the abstract
idea of how to determine participation and membership in a pool to handle
monetary obligations.
Now that we have completed the first step of determining whether the
claims recite an abstract idea, we turn to the second step outlined in Alice,
i.e., we determine whether the recitations in claim 1 such as “computer-
aided” and “computer system” relate to an inventive concept that is
significantly more than the abstract idea of how to determine participation
and membership in a pool to handle monetary obligations. We conclude that
it does not.
The recitations of “computer-aided,” “storing, in a computer system,”
and “applying the rules, with the computer system,” amount to little more
than reciting that the computer system applies the abstract idea of how to
determine participation and membership in a pool to handle monetary
obligations.
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In Alice, the Court turned to its previous decisions in Mayo, Bilski,
Diamond v. Diehr, 450 U.S. 175 (1981), Parker v. Flook, 437 U.S. 584
(1978), and Gottschalk v. Benson, 409 U.S. 63 (1972) as instructive on this
question:
[Mayo, Bilski, Flook, and Benson] demonstrate that the 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 “‘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 “implemen[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, 134 S. Ct. at 2358 (Internal citations omitted).
We also reject the remaining claims on appeal because these claims
recite patent ineligible subject matter as well because these claims include
the subject matter that is recited in claim 1 and either further define the rules
used to determine participation in the pool or further define the determining
step. As such, the claims further define the abstract idea of claim 1 but do
not add an inventive concept that is significantly more than the abstract idea.
In regard to the claims that recite the additional steps of computing,
monitoring, signaling, notifying, etc., these steps relate to only ordinary
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functions of a computer and do not confer patent eligibility to the claims.
See Bancorp Servs., L.L.C. v. Sun Life Assurance Co., 687 F.3d 1266, 1278–
79 (Fed. Cir. 2012).

Prior Art Rejections
As claims 1–5, 35–43, 48, 51, 52, 57–65, 70–85, 115–123, 128,
131, 132, 137–145, 150–162, and 166 are subject to a new ground of
rejection as being directed to patent ineligible subject matter under 35
U.S.C. § 101, we reverse the rejection of claims 1–5, 35–43, 48, 51, 52,
57–65, 70–85, 115–123, 128, 131, 132, 137–145, 150–162, and 166 as
obvious under § 103(a) pro forma. See, e.g., In re Comiskey, 554 F.3d
967, 973 (Fed. Cir. 2009) (“We do not reach the ground relied on by the
Board below—that the claims were unpatentable as obvious over Ginter
in view of Walker, Perry, and ‘Arbitration Fee Schedule’—because we
conclude that many of the claims are ‘barred at the threshold by §
101.’”) (Internal citation omitted); Ex Parte Gutta, 93 USPQ2d 1025,
1036 (BPAI 2009) (precedential) (same).

DECISION
We reverse the rejections under 35 U.S.C. § 103(a) pro forma.
We enter a new ground of rejection of claims 1–5, 35–43, 48, 51, 52,
57–65, 70–85, 115–123, 128, 131, 132, 137–145, 150–162, and 166 under
35 U.S.C. § 101.
This decision contains a new ground of rejection pursuant to 37
C.F.R. § 41.50(b). 37 C.F.R. § 41.50(b) provides “[a] new ground of
rejection pursuant to this paragraph shall not be considered final for judicial
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review.” 37 C.F.R. § 41.50(b) also provides that Appellants, WITHIN TWO
MONTHS FROM THE DATE OF THE DECISION, must exercise one of
the following two options with respect to the new ground of rejection to
avoid termination of the appeal as to the rejected claims:
(1) Reopen prosecution. Submit an
appropriate amendment of the claims so rejected or
new evidence relating to the claims so rejected, or
both, and have the matter reconsidered by the
examiner, in which event the proceeding will be
remanded to the examiner . . . .
(2) Request rehearing. Request that the
proceeding be reheard under § 41.52 by the Board
upon the same record . . . .
If Appellants elect prosecution before the Examiner and this does not
result in allowance of the application, abandonment or a second appeal, this
case should be returned to the Patent Trial and Appeal Board for final action
on the affirmed rejection, including any timely request for rehearing thereof.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv).

REVERSED; 37 C.F.R. § 41.50(b)

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