Ex Parte Schoen et al

Patent Trial and Appeal Board

Jun 28, 2018

10784719 (P.T.A.B. Jun. 28, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
10/784,719 02/23/2004 Matthew B. Schoen
28710 7590 06/28/2018
PETER K. TRZYNA, ESQ.
PO BOX 7131
CHICAGO, IL 60680
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.
Schoen-Pl-04 9452
EXAMINER
MEINECKE DIAZ, SUSANNA M
ART UNIT PAPER NUMBER
3683
MAIL DATE DELIVERY MODE
06/28/2018 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. SHOEN, JEAN-PHILLIPPE KHODARA, and
SW AMIN ATHAN P ALANI
Appeal2016-006151
Application 10/784,719
Technology Center 3600
Before MURRIEL E. CRAWFORD, HUBERT C. LORIN, and
ANTON W. PETTING, Administrative Patent Judges.
CRAWFORD, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant(s) 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, 150-160, 162 and 166. We have jurisdiction over
the appeal under 35 U.S.C. § 6(b).
Appeal 2016-006151
Application 10/784,719
BACKGROUND
Appellants' invention is directed to a superstructure pool computer
system. Spec. 1
Claim 1 is illustrative
1. A method of digitally applying a data structure when
determining participation in a pooling superstructure, the
method including the steps of:
after forming a pool to handle an obligation that is a
financial liability over a period of time in exchange for revenue,
digitally accessing a data structure in a computer system
programmed to implement a pooling superstructure, the data
structure configured to comprise, and containing data
comprising , rules governing member participation in the pool,
the rules including:
minimum criteria for maintaining in the pool, and the
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 obligation
such that the sum of the shares equals one hundred percent, a
process and terms for adding a new member; and
applying the data structure and rules, with the computer
systems, when digitally determining the participation within the
period of time, said determining comprising:
monitoring members of the pool for compliance with said
rules and,
in event of an application for membership in the pool,
analyzing the application for compliance with said rules, and.
detecting for failure of any said member to maintain the
minimum criteria for membership in the pool; and
generating, with the computer system, output indicative
of the participation in the pooling superstructure.
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The Examiner relies on the following prior art reference as evidence
of unpatentability:
Walker et al. us 6,119,093 Sept. 12, 2000
Sam McCord et al., Partnership: If There's A Beginning ... There's An End,
37 The National Public Account 18-22 (Apr. 1992) ("McCord")
Appellant(s) appeal the following rejection(s):
Claims 1-5, 35-43, 48, 51, 52, 57-55, 70-85, 115-123, 128, 131, 132, 137-
145, 150-160, 162, and 166 are rejected 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, 150-160, 162 and 166 are rejected under 35 U.S.C. 103(a) as
unpatentable over Walker and f3d McCord.
PRINCIPLES OF LAW
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 implicit
exceptions: "[l]aws of nature, natural phenomena, and abstract ideas" are
not patentable. E.g., Alice Corp. Pty. Ltd. v. CLS Bank Int 'l, 134 S.Ct. 2347,
2354 (2014).
In determining whether a claim falls within the excluded category of
abstract ideas, we are guided in our analysis by the Supreme Court's two-
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step framework, described in Mayo and Alice. Id. at 2355 (citing Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1296-97
(2012)). In accordance with that framework, we first determine whether the
claim is "directed to" a patent-ineligible abstract idea. See Alice, 134 S. Ct.
at 2356 ("On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk."); Bilski v. Kappas, 561 U.S. 593, 611 (2010) ("Claims 1 and 4 in
petitioners' application explain the basic concept of hedging, or protecting
against risk."); Diamond v. Diehr, 450 U.S. 175, 184 (1981) ("Analyzing
respondents' claims according to the above statements from our cases, we
think that a physical and chemical process for molding precision synthetic
rubber products falls within the § 101 categories of possibly patentable
subject matter."); Parker v. Flook, 437 U.S. 584, 594--595 (1978)
("Respondent's application simply provides a new and presumably better
method for calculating alarm limit values."); Gottschalk v. Benson, 409 U.S.
63, 64 (1972) ("They claimed a method for converting binary-coded decimal
(BCD) numerals into pure binary numerals.").
The patent-ineligible end of the spectrum includes fundamental
economic practices, Alice, 134 S. Ct. at 2357; Bilski, 561 U.S. at 611;
mathematical formulas, Parker, 437 U.S. at 594--95; and basic tools of
scientific and technological work, Gottschalk, 409 U.S. at 69. On the patent-
eligible side of the spectrum are physical and chemical processes, such as
curing rubber, Diamond, 450 U.S. at 184 n.7, "tanning, dyeing, making
waterproof cloth, vulcanizing India rubber, smelting ores," and a process for
manufacturing flour, Gottschalk, 409 U.S. at 69.
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In addition, the Federal Circuit has held that if a method can be
performed by human thought alone, or by a human using pen and paper, it is
merely an abstract idea and is not patent-eligible under § 101. CyberSource
Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1373 (Fed. Cir. 2011) ("[A]
method that can be performed by human thought alone is merely an abstract
idea and is not patent-eligible under§ 101.").
Claims involving data collection, analysis, and display are directed to
an abstract idea. Elec. Power Grp. LLC v. Alstom S.A., 830 F.3d 1350, 1353
(Fed. Cir. 2016) (holding that "collecting information, analyzing it, and
displaying certain results of the collection and analysis" are "a familiar class
of claims 'directed to' a paten-ineligible concept"); see also In re TL!
Comma 'ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016);
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093-94 (Fed. Cir.
2016). Claims that use a generic computer technology to perform data
collection, analysis, and display and does not recite an improvement to a
particular computer technology are directed to an abstract idea. See, e.g.,
McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314-15
(Fed. Cir. 2016) (finding claims not abstract because they "focused on a
specific asserted improvernent in computer animation").
If the claim is "directed to" a patent-ineligible abstract idea, we then
consider the elements of the claim-both individually and as an ordered
combination-to assess whether the additional elements transform the nature
of the claim into a patent-eligible application of the abstract idea. Alice, 134
S. Ct. at 2355. This is a search for an "inventive concept"-an element or
combination of elements sufficient to ensure that the claim amounts to
"significantly more" than the abstract idea itself. Id.
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ANALYSIS
Rejection under 35 USC §101
In the Final Rejection, the Examiner holds that claim 1 is directed to a
method of how to determine participation and membership in a pool to
handle monetary obligations and that this is an abstract idea. Fin. Act. 14.
The Examiner found that the recitations in the claim in addition to the
abstract idea amount to little more than reciting that the computer system
applies the abstract idea. Fin. Act. 14. In regard to the remaining claims,
the Examiner held that these claims include 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 defining step and are therefore also directed to
an abstract idea and do not add significantly more than the abstract idea.
Fin. Act. 15. We agree.
In addition to the above, the steps of claim 1 of applying a data
structure and rules with a computer system, monitoring members for
compliance with rules, analyzing application compliance with rules,
detecting the failure of members to comply with the rules and generating an
output are essentially the collection, analysis and displaying of data which as
noted above has been found to be an abstract idea. As such, the claims are
directed to an abstract idea on this basis as well.
We are not persuaded of error on the part of the Examiner by
Appellants argument that the Examiner failed to present a prim a f acie
evidence of preemption. "While preemption may signal patent ineligible
subject matter, the absence of complete preemption does not demonstrate
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patent eligibility." Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d
1371, 1379 (Fed. Cir. 2015); see also OIP Techs., Inc. v. Amazon.com, Inc.,
788 F.3d 1359, 1362-63 (Fed. Cir. 2015), cert, denied, 136 S. Ct. 701, 193
(2015) ("[T]hat the claims do not preempt all price optimization or may be
limited to price optimization in the e-commerce setting do not make them
any less abstract."). And, "[ w ]here a patent's claims are deemed only to
disclose patent ineligible subject matter under the Mayo framework, as they
are in this case, preemption concerns are fully addressed and made moot."
Ariosa, 788 F.3d at 1379.
Appellants argument that the finding that the claims are directed to an
abstract idea is not supported by evidence is also not persuasive.
Consideration of evidence in making a determination under the first step of
the Alice framework has merit. See .Apple, lnc .. 'V .. filneranth, Inc., 842 F.Jd
1229 (FecL Ch'. 20 l 6). But there is no requirement that examiners must
provide evidentiary support in every case before a conclusion can be made
that a claim is directed to an abstract idea. All that is required of the Office
is that it set forth the statutory basis of the rejection in a sufficiently
articulate and informative manner as to meet the notice requirement of§
violated when a rejection is so uninformative that it prevents the applicant
from recognizing and seeking to counter the grounds for rejection").
Evidence may be helpful in certain situations but it is not always necessary.
It is not necessmy in this case because the claims are clearly directed to the
collection, analysis and display of data which has been held to be an abstract
idea.
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We are not persuaded of error on the part of the Examiner by
Appellants argument that the rejection is ambiguous because the Office
Action does not make it clear whether the abstract idea of how to determine
participation and membership in a pool to handle monetary obligations
relates to applying data structure and rules, monitoring members, detecting
for a failure. Appellants state that the Examiner advances different
articulations of the abstract idea. We do not agree. In our view each of each
of the steps above is part of the abstract idea of determining membership in a
pool. In addition, each of these steps relate to the collection, analysis and
display of data. Therefore, the rejection is not ambiguous.
\Ve are no persuaded of error on the part of the Examiner because the
method of the claims cannot be done entirely by a human rnind because the
Examiner does not rest the determination that the claims are directed to an
abstract idea on the holding that the steps of the claims can be done entirely
by a human mind. As we discussed above, the claims are determined to be
directed to the abstract idea of determining paiiicipation in a pool and a
method involving the collection, analysis and display of data. \Ve note that
it is not necessary that the Examiner delimit the precise contours of the
"abstract ideas" category in this case as being a fundamental economic
practice or a method that can be done by the human mind. See Alice Corp.
Pty. Ltd., 134 S. Ct. at 2357. It is enough to recognize that there is no
meaningful distinction in the level of abstraction between the concept of an
intermediated settlement in Alice and the concept of determining
participation in a pool by collecting, analyzing and displaying data. Both are
squarely within the realm of "abstract ideas" as the Court has used that term.
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We are not persuaded of error on the part of the Examiner by
Appellants argument that the Examiner failed to include supporting evidence
that the claim elements are routine or conventional. In the second step of the
analysis, the Examiner found that the additional elements of the claim in
addition to the abstract idea did not amount to significantly more than the
abstract idea because the recitations are little more than reciting that the
computer system applies the abstract idea. Fin. Act. 14. Using a computer
to analyze data by utilizing stored data (i.e. the claimed data structure and
rules) to analyze compliance ,vith the rules and generate an output in
response to this analysis is one of the most basic functions of a computer.
s~ee Elec. Power Grp v. Alstom S.A., supra. In this regard, Appellants' own
Specification provides evidence that this is accurate by disclosing that
generic off the shelf computers and components i.e. a Toshiba monitor, and
Intel Pentium series processor, a Hewlett Packard keyboard, a Hewlett
Packard printer, and a modem or wireless connection can be used to
implement the steps of the invention. Spec. 32. We note that in
Berkheimer v. HP Inc., 890 F.3d 1360, 1369 (Fed. Cir. 2018), the court
held that "[ t ]he patent eligibility inquiry may contain underlying issues of
fact." Berkheimer, 881 F.3d 1365 (quoting Mortgage Grader, Inc. v. First
Choice Loan Servs. Inc., 811 F.3d 1314, 1325 (Fed. Cir. 2016) ("The§ 101
inquiry 'may contain underlying factual issues."')). The court also held
"[ w ]hen there is no genuine issue of material fact regarding whether the
claim element or claimed combination is well-understood, routine, [and]
conventional to a skilled artisan in the relevant field, this issue can be
decided on summary judgment as a matter of law." Id. at 1368. In the
instant case there is no genuine issue of material fact.
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Appellants also argue that the Examiner failed to provide sufficient
evidence that the step of applying a data structure is conventional or routine.
\Ve agree with the Examiner that step of applying a data structure and rules
is part of the abstract idea and is not considered in the second step of the
analysis. The Examiner correctly considered whether the recitation in the
claims related to the recited "computer systern" applying a data structure is
conventional or routine.
\Ve also find no error in the Examiner's finding that the claims do not
recite an improvement to the functionality of the computer. 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. Indeed, the Federal Circuit applied this distinction in
Enfish, LLC v. Microsoft Corp, 822 F.3d 1327 (Fed. Cir. 2016) in rejecting a
§ 101 challenge at the step one stage in the Alice analysis because the claims
at issue focused on 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, and not on
asserted advances in uses to which existing computer capabilities could be
put. Id. at 1335-36. In the present case, a general computer is used to apply
a data structure and this finding is clearly supported by the Specification.
We note that we do not find the JPTOS articles submitted by the Appellants
relevant to the question of whether the instant claims recite an improvement
to computer technology because the articles do not discuss the claimed
invention.
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We have considered the other arguments made by the Appellants but
do not find them persuasive of error on the part of the Examiner.
In view of the foregoing, we will sustain the Examiner's rejection of
claim 1. We will also sustain the Examiner's rejections of the remaining
claims subject to this rejection because the Appellants do not argue the
separate eligibility of these claims.
Reiection under 103
We will not sustain the rejection of claim 1 under 35 U.S.C. §103
because we agree with the Appellants that the prior art does not disclose
applying rules which require 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 such that the shares equal one hundred percent.
The Examiner recognizes that his subject matter is not disclosed in
Walker and relies on the teaching in McCord that at dissolution, a
partnership may be continued as a new partnership including remaining
partners.
We find that Walker discloses a system that forms an insurance
syndicate with individual investors. (Col. 1, 11. 14-16). Each investor
pledges an unused credit line as collateral for an investment (Col. 2, 11. 46-
48). The amount of the credit line is frozen for the amount of the
investment. (col. 5, 11. 13-15). The syndicate can cover all or a part of the
total amount of coverage. ( col. 6, 11. 64-67). If the syndicate covers a part of
the total amount, the remaining amount is covered by the company. When a
claim is filed the company draws on the credit line of each investor's credit
card for the appropriate percentage of the amount paid out by the company.
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If an investor cancels his or her credit card, the bank that issued the card
notifies the syndication service which subsequently cancels the investor's
stake in the policy. (col. 5, 1. 66 to col. 6, 1. 4).
We agree with the Appellants that as Walker relates to individual
investors whose investments are limited to their individual credit lines, one
of ordinary skill in the art would have no reason to modify Walker so that at
least one investor assumes a larger share if one investors has a reduced
obligation. The system in Walker requires an action by the investor so that
any increase by any one investor would require an increased pledge by the
investor and would not happen automatically in the event that one other
investor's share is reduced.
In view of the foregoing, we will not sustain the Examiner's rejection
of claim 1 and the claims dependent therefrom. We will also not sustain the
rejection as it is directed to claim 81 and the claims dependent therefrom for
the same reasons.
We will not sustain the remaining rejections for the same reasons.
DECISION
We affirm the Examiner's § 101 rejection.
We do not affirm the Examiner's§ 103 rejections.
TIME PERIOD
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) (2009).
ORDER
AFFIRMED
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