Ex Parte Stiff et al

Patent Trials and Appeals Board

Apr 23, 2019

11556396 - (D) (P.T.A.B. Apr. 23, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/556,396 11/03/2006
21967 7590 04/23/2019
Hunton Andrews Kurth LLP
Intellectual Property Department
2200 Pennsylvania Avenue, N.W.
Washington, DC 20037
FIRST NAMED INVENTOR
Geoffrey S. Stiff
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.
52493.000445 8597
EXAMINER
FU,HAO
ART UNIT PAPER NUMBER
3697
MAIL DATE DELIVERY MODE
04/23/2019 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 GEOFFREY S. STIFF, JAMES C. TEMPLEMAN,
MATTHEW P. SHARPE, WILLIAMS. WHITE,
and LANDIS ATKINSON
Appeal2018-001588
Application 11/556,396
Technology Center 3600
Before JAMES R. HUGHES, CARLL. SILVERMAN, and
JAMES W. DEJMEK, Administrative Patent Judges.
SILVERMAN, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 1-9 and 12-31, which constitute all pending
claims. We have jurisdiction under 35 U.S.C. § 6(b ).
We affirm.
Appeal2018-001588
Application 11/556,396
STATEMENT OF THE CASE
The invention relates to financial products and services, and
particularly providing an investor the ability to purchase an option to
exchange a future value of an asset or a portfolio of assets, regardless of
future performance or value, for at least one non-cash settlement instrument
outcome on a future date. Abstract; Spec. 1: 10-2:6; Figs. 1-3, 7. Claim 31,
reproduced below, is exemplary of the subject matter on appeal ( emphasis
added):
31. A computer implemented system that provides an option
to an investor to exchange a future value of a portfolio of assets,
regardless of future performance or value, for at least one non-
cash settlement instrument outcome on a future date, the
computer implemented system comprising:
a memory component that stores portfolio data
associated with one or more portfolios and corresponding
investment strategy;
a computer processor coupled to the memory component
and further programmed to:
assess, by the computer, an existing portfolio;
assess, by the computer, an underwriting strategy
associated with the portfolio;
determine, by the computer processor, a guaranteed
delivery of outcome other than cash based on the portfolio and
underwriting assessments;
execute, by the computer processor, an option to
exchange a future value of the portfolio, regardless of future
performance or value, for at least one non-cash settlement
instrument outcome on a future date;
electronically receive, by the computer processor, an
option payment; and
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executing an audit, by the computer processor, an
investment strategy of the portfolio;
and
automatically adjust, by the computer processor, the
guaranteed delivery of outcome in response to the audit;
wherein the guaranteed delivery of outcome is contingent
on the satisfaction of an audit, the satisfaction of the audit
associated with and dependent upon attainment of compliance
with a benchmark associated with the portfolio, such
benchmark being distinct from the future performance or value
of the portfolio of assets.
App. Br. 20-21 (Claims Appendix).
THE REJECTION 1
Claims 1-9 and 12-31 are rejected under 35 U.S.C. § 101 because the
claimed invention is directed to patent-ineligible subject matter. Final
Act. 16-23.
PRINCIPLES OF LAW
Patent-eligible subject matter is defined in 35 U.S.C. § 101 of the
Patent Act, which recites:
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.
1 The Examiner states that "[t]he rejection under 35 U.S.C [§] 103 of claims
1-9 and 12-31 has been withdrawn." Final Act. 14. Appellants state a
terminal disclaimer was filed on March 27, 2017, and assert that the
nonstatutory double patenting rejection is now moot. App. Br. 5; see Final
Act. 16.
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There are, however, three judicially created exceptions to the broad
categories of patent-eligible subject matter in 35 U.S.C. § 101: "'[l]aws of
nature, natural phenomena, and abstract ideas.'" Alice Corp. v. CLS Bank
Int'!, 573 U.S. 208, 216 (2014); Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 70 (2012).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court's two-step framework, described in Mayo
and Alice. See Alice, 573 U.S. at 217-18 (citing Mayo, 566 U.S. at 75-77).
In accordance with that framework, we first determine what concept the
claim is "directed to." See id. at 219 ("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."); see also 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.").
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219-20; Bilski, 561 U.S. at 611 );
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594--95 (1978)); and
mental processes (Gottschalkv. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 191
(1981) ); "tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores" (id. at 183 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267---68 (1853))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
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In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that "[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula." Diehr, 450 U.S. at 176; see also id. at 191-92 ("We
view respondents' claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula."). Having
said that, the Supreme Court also indicated that a claim "seeking patent
protection for that formula in the abstract ... is not accorded the protection
of our patent laws, ... and this principle cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment." Id. ( citing Benson and Flook); see, e.g., id. at 187 ("It is now
commonplace that an application of a law of nature or mathematical formula
to a known structure or process may well be deserving of patent
protection.").
If the claim is "directed to" an abstract idea, we tum to the second
step of the Alice and Mayo framework, where "we must examine the
elements of the claim to determine whether it contains an 'inventive
concept' sufficient to 'transform' the claimed abstract idea into a patent-
eligible application." Alice, 573 U.S. at 221 ( quotation marks omitted). "A
claim that recites an abstract idea must include 'additional features' to
ensure 'that the [claim] is more than a drafting effort designed to
monopolize the [abstract idea]."' Id. ( quoting Mayo, 566 U.S. at 77).
"[M]erely requir[ing] generic computer implementation[] fail[ s] to transform
that abstract idea into a patent-eligible invention." Id.
The PTO recently published revised guidance on the application of
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§ 101. USPTO, 2019 Revised Patent Subject Matter Eligibility Guidance,
84 Fed. Reg. 50 (Jan. 7, 2019) ("Memorandum"). Under that guidance, we
first determine whether the claim recites:
( 1) any judicial exceptions, including certain groupings of abstract
ideas (i.e., mathematical concepts, certain methods of organizing
human activity such as a fundamental economic practice, or mental
processes); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a}-(c), (e}-(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that is not
"well-understood, routine, conventional" in the field (see MPEP
§ 2106.05(d)); or
( 4) simply appends well-understood, routine, conventional activities
previously known to the industry, specified at a high level of
generality, to the judicial exception.
See Memorandum.
ANALYSIS
The Examiner rejected claims 1-9 and 12-31 under 35 U.S.C. § 101
because the claimed invention is directed to a judicial exception (i.e., an
abstract idea) without "significantly more." Final Act. 16-23. According to
the Examiner:
The present independent claims are directed to a
method/system for providing investor the ability to purchase an
option to exchange a future value of an asset for noncash
settlement on a future date. As such, the claimed invention is
essentially describing a process of hedging or mitigating
settlement risk, which was found to be abstract by the courts.
Examiner also points out that the present claims, even if they
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are implemented by computers, are still directed to a concept of
hedging, in particular, a concept of exchanging a future value of
a portfolio assets for at least one non-cash settlement instrument
outcome on a future date. The claimed concept falls under the
same category of "mitigating risks" as Bilski and Alice Corp.
The claimed process comprises the steps of determining a
delivery of the non-cash guaranteed outcome and an option
payment amount, and effecting a purchase of the option. These
steps describe the process of hedging, but do not render the
concept less abstract. Therefore, the present claims are directed
to an abstract idea. Examiner further points out that the focus
of the present claims is not on improving existing computer
technology. The present claims are very different from those of
Enfzsh, which improve a specific computer database technology
(i.e. "self-referential data structure") that fundamentally
changes how computer stores and retrieves data. Instead, the
focus of the present claims is on certain independent abstract
concept (i.e. exchanging a future value of a portfolio assets for
at least one non-cash settlement instrument outcome on a future
date) that uses computers as tools. The present invention,
unlike Enfzsh, do[ es] not improve existing computer technology
by increasing flexibility, enhancing processing efficiency, or
shortening search time. Similar to the ineligible concept in the
recent case, Electric Power Group v. Alstom S.A., the present
claimed concept merely implements an abstract concept using
existing computer technology. Therefore, the claimed
computer implemented system and method of hedging are still
directed to an abstract concept.
Id. at 17-19.
The Examiner also concludes the claims are directed to "'an idea of
itself' (i.e. an idea standing alone such as an uninstantiated concept, plan or
scheme, as well as a mental process that can be performed in the human
mind, or by a human using a pen and paper)." Id. at 19. According to the
Examiner
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[ e ]ven though the claims recite these process steps are
performed by a computer processor, there is no reason why one
of ordinary skill in the art cannot perform such vaguely
described steps manually. There is no evidence that processing
and analysis in the claims are too complex for human. It
appears that the present claims are merely utilizing a generic
computer processor to execute human-programmed instructions
to perform analysis that could be done by human. As such, the
present claims are considered an idea of itself.
Id. at 19.
The Examiner concludes the claims are unlike DDR because
the present claimed elements do not solve an Internet-centric
problem [and] a claimed solution that is necessarily rooted in
the computer technology. The problem of converting a
portfolio of assets into a guaranteed income flow at a future
date is not unique in the Internet environment, and the process
can be done without computer. In the present claims, general
purpose computer is merely used as a tool to execute the
abstract concept of converting a portfolio of assets into a
guaranteed income flow at a future date. Therefore, the rational
from DOR Holdings does not apply to the present claims.
Moreover, the present claims do not include any physical
transformation of one particular article from one physical state
to another and the claimed concept can clearly be performed by
a general purpose computer, thus the claims fail the machine-
or-transformation test. Therefore, the present claims are
directed to an abstract idea.
Id. at 21.
The Examiner concludes the claims do not recite additional elements
that amount to significantly more than the abstract idea. Id. at 21-22. More
particularly, the computer processor and memory component constitute
generic computer components wherein the memory component is recited to
store portfolio data (i.e. receiving, processing, and storing data) and the
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computer processor is recited to assess portfolio data, underwriting strategy
(i.e., performing calculation and automating mental task), determining a
guaranteed delivery of outcome (i.e. performing calculation), and executing
an option (i.e. transmitting order data over network). Id. According to the
Examiner, "performing repetitive calculations," "receiving, processing, and
storing data," "electronically scanning or extracting data from a physical
document," "electronic recordkeeping," "automating mental tasks," and
"receiving or transmitting data over a network, e.g., using the Internet to
gather data" are considered well-understood, routine, and conventional
functions of a computer. Id. at 22 (citing USPTO, July 2015 Update:
Subject Matter Eligibility, https://www.uspto.gov/sites/default/files/
documents/ieg-july-2015-update.pdf. According to the Examiner, the
computer components described in the Specification are generic computer
components, which are the same or similar to a general purpose computer,
and the recitation of the computer element amounts to mere instruction to
implement the abstract idea on a computer. Id. ( citing Spec. 16-17).
Appellants argue the claims differ from other claims found by the
courts to recite abstract ideas in that they do not merely recite the
performance of some business practice known from the pre-Internet world
along with the requirement to perform it on the Internet. App. Br. 6.
According to Appellants, the claimed solution is necessarily rooted in
computer technology in order to overcome a problem specifically arising in
the realm of computer networks. Id. ( citing DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014).
Appellants argue the Examiner does not adequately explain why the
claims are directed to an abstract idea. Id. at 7-8. Appellants argue that the
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processing of the claim and the complex analysis "is not possible without
use of a computer-thus the claims (as was the case in DDR Holdings) are
not abstract as they were not subject to a prior art process that was doing the
same thing but outside a computing environment." Id. at 8. Appellants
argue the claims do not preempt the abstract idea and argue none of the
examples given for the abstract ideas match the pending claims. Id. at 8- 9.
Appellants argue the claims recite "significantly more" than an
abstract idea because the computer processor limitations add more than
generally linking the use of the alleged abstract idea to a computer and solve
a problem with a claimed solution that is necessarily rooted in computer
technology, similar to the additional elements of DDR. Id. at 11. According
to Appellants, the claimed computer processor is integral to the claimed
invention because, for a computer to be "'integral to the claimed invention,
[it must] facilitat[ e] the process in a way that a person making calculations
or computations could not."' Id. at 12-13 (citing Bancorp Servs., LLC v.
Sun Life Assurance Co. of Canada (U.S.), 687 F.3d 1266, 1278 (Fed. Cir.
2012) ( citing SiRF Tech. Inc. v. Int 'l Trade Comm 'n, 601 F .3d 1319, 1333
(Fed. Cir. 2010)). According to Appellants, "[h]ere, it is not possible for the
steps of the claims to be performed without a computer. These claims are
not an example of 'implementing an abstract concept faster and more
efficiently on a computer' -- instead, the process could not occur absent a
computer." Id. at 13. Appellants argue the claimed embodiments both
"' improve the functioning of the computer itself'" and "'effect an
improvement in [a] technical field"' and, therefore, the claims recite
meaningful limitations beyond generally linking the use of an abstract idea
to a particular technological environment. Id. at 13.
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Appellants argue the Office Action is devoid of any evidence that the
combination of claim elements are well-known, routine or conventional in
the field and, therefore, the claimed combination of steps are unconventional
and confine the claims to a particular useful application. Id. at 12.
Appellants further argue that the Office admits that the claims are novel and
non-obvious. Id.
In the Answer, the Examiner additionally concludes that the claims,
even if they are implemented by computers, are still directed to a concept of
hedging, in particular, a concept of exchanging a future value of a portfolio
assets for at least one non-cash settlement instrument outcome on a future
date. Ans. 4. According to the Examiner, the claimed concept falls under
the same category of "mitigating risks" as Bilski and Alice Corp. and the
claimed concept of providing an option to exchange a future value of one
asset for a non-cash settlement on a future date can be implemented without
a computer, thus, the claims are also directed to an idea of itself (i.e., an idea
standing alone such as an uninstantiated concept, plan or scheme, as well as
a mental process that can be performed in the human mind, or by a human
using a pen and paper). Id. The Examiner concludes that these are clearly
mental tasks that can be performed by human and there is no evidence that
processing and analysis in the claims are too complex for human to perform.
Id.
In the Reply Brief, Appellants argue, even assuming that the claims
recite generic purpose functions that the ordered combination of the claim
elements results in significantly more than an abstract idea because the
claims are not simply directed to automating a known process. Reply Br. 3.
Appellants argue that McRO cautioned that courts "must be careful to avoid
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oversimplifying the claims" by looking at them generally and failing to
account for the specific requirements of the claims. Id. at 5 ( emphasis
added) (citingMcRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299,
1313 (Fed. Cir. 2016)).
Appellants argue that the claims are like the claims in BASCOM,
where the court found an "'an inventive concept ... in the non-
conventional and non-generic arrangement of known, conventional
pieces.'" Id. (citing BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility
LLC, 827 F.3d 1341, 1350 (Fed. Cir. 2016)). Appellants refer to En.fish
finding that an invention is not automatically ineligible just because it can
run on a general-purpose computer. Id. at 6 ( citing En.fish, LLC v. Microsoft
Corp., 822 F.3d 1327 (Fed. Cir. 2016)).
As discussed below, we are not persuaded by Appellants' arguments.
Applying the current Guidelines (Memorandum), we conclude that
claim 31 recites abstract ideas constituting "mental processes" that can be
performed with pen and paper and "certain methods of organizing human
activity such as a fundamental economic practice." See Final Act. 17-23;
Ans. 2-13; Memorandum, 84 Fed. Reg. at I(a), III. In view of the current
Guidelines, we clarify and expand the Examiner's reasoning as follows.
The claim 31 preamble recites a (computer implemented) system that
provides an option to an investor to exchange a future value of a portfolio of
assets, regardless of future performance or value, for at least one non-cash
settlement instrument outcome on a future date. Aside from the recitation of
being computer implemented, the claim preamble generally concerns
hedging and mitigating risk. The limitations assess, (by the computer), an
existing portfolio and assess an underwriting strategy associated with the
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portfolio are mental processes associated with hedging and mitigating risk.
The limitations determine, (by the computer processor), a guaranteed
delivery of outcome other than cash based on the portfolio and underwriting
assessments; and execute, (by the computer processor), an option to
exchange a future value of the portfolio, regardless of future performance or
value, for at least one non-cash settlement instrument outcome on a future
date are mental processes associated with hedging and mitigating risk. The
limitations (electronically) receive, (by the computer processor,) an option
payment; and executing an audit, (by the computer processor,) an
investment strategy of the portfolio; and automatically adjust, (by the
computer processor,) the guaranteed delivery of outcome in response to the
audit are mental processes associated with hedging and mitigating risk. The
wherein clause, wherein the guaranteed delivery of outcome is contingent on
the satisfaction of an audit, the satisfaction of the audit associated with and
dependent upon attainment of compliance with a benchmark associated with
the portfolio, such benchmark being distinct from the future performance or
value of the portfolio of assets, also constitutes mental processes associated
with hedging and mitigating risk.
Aside from the (computer implemented, memory component,
computer processor, processor) elements, the identified limitations of claim
31 are nothing more than "mental processes" that could be performed in the
human mind or by a human using a pen and paper-a subject matter that
falls within the three types of abstract ideas identified by the Memorandum.
See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372-73
(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."); see
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also In re Comiskey, 554 F.3d 967, 979 (Fed. Cir. 2009) ("[M]ental
processes----or processes of human thinking-standing alone are not
patentable even if they have practical application."); Benson, 409 U.S. at 67
("Phenomena of nature, ... mental processes, and abstract intellectual
concepts are not patentable, as they are the basic tools of scientific and
technological work" ( emphasis added).). Additionally, mental processes
remain unpatentable even when automated to reduce the burden on the user
of what once could have been done with pen and paper. CyberSource, 654
F.3d at 1375 ("That purely mental processes can be unpatentable, even when
performed by a computer, was precisely the holding of the Supreme Court in
Gottschalk v. Benson."). For example, the limitations of claim 31 can be
performed by a financial analyst through observation, evaluation, and
judgment.
In addition to the mental processes discussed, supra, the claim
limitations, under their broadest reasonable interpretation, are associated
with mitigating risk and hedging, in particular, a concept of exchanging a
future value of a portfolio assets for at least one non-cash settlement
instrument outcome on a future date. See Final Act. 18. As discussed
below, this constitutes a certain method of organizing human activity, such
as a fundamental economic practice, which also constitutes an abstract idea.
Additionally, we note the Specification states "[t]his invention relates
generally to a system and method for providing financial products and
services, and more particularly, to a system and method for providing an
option to convert an asset or portfolio of assets into a guaranteed income
flow or other settlement at a future date." Spec. 1:10-12; see also id. at
1: 14--2:6.
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As in our discussion, supra, regarding the abstract idea of mental
processes, the limitations also recite steps to mitigate risk by managing
financial instruments to enable an investor to exchange an unknown future
value of a portfolio of assets for a known guaranteed investment outcome.
For example, the limitations: assess an existing portfolio and an
underwriting strategy associated with the portfolio; determine a guaranteed
delivery of outcome other than cash based on the portfolio and underwriting
assessments; execute an option to exchange a future value of the portfolio,
regardless of future performance or value, for at least one non-cash
settlement instrument outcome on a future date; receive an option payment
and executing an audit an investment strategy of the portfolio; and
automatically adjust the guaranteed delivery of outcome in response to the
audit wherein the guaranteed delivery of outcome is contingent on the
satisfaction of an audit, the satisfaction of the audit associated with and
dependent upon attainment of compliance with a benchmark associated with
the portfolio, such benchmark being distinct from the future performance or
value of the portfolio of assets, are directed toward mitigating risk and
hedging by managing financial accounts.
Mitigating risk by managing financial instruments involves organizing
human activity and is an economic act that includes products ordinarily sold
in the stream of commerce. 2 As described in the Specification,
2 The Specification describes, "[i]n some embodiments, the Counterparty
can offer the option on any acceptable asset or portfolio or investment
structure, which may include but not be limited to: mutual funds, separate
accounts, structured products, custodial accounts, trust accounts,
commingled funds, hedge funds, securities, annuities, plans ( e.g., pension,
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[t]he majority of available products transfer performance and
other risks to the investor. Generally, an investor invests in a
strategy ( e.g., stocks, bonds or otherwise) the investor believes
will behave in a manner consistent with a perceived risk/reward
profile. However, if the product does not perform as expected,
it is the investor who generally bears that risk, not the financial
product or issuer of the financial product.
Annuities are one such financial product that seeks to
address the issue described above by providing certain
guarantees and assurances to an investor. Fixed deferred
annuities, for example, may guarantee a certain future income
stream in return for a current investment or deposit. In this
instance, an investor may transfer performance risk to the issuer
of the fixed deferred annuity
and "there is a need for an investment product ( or structure) that allows an
investor an unencumbered ability to exchange an unknown future value of a
portfolio of assets for a known guaranteed investment stream on a known
future date." Spec. 1: 16-2:6.
Thus, like the concept of intermediated settlement in Alice, and the
concept of hedging in Bilski, the concept of mitigating risk and hedging by
managing financial instruments recited in Appellants' claims "is a
fundamental economic practice long prevalent in our system of commerce."
Alice, 573 U.S. at 219 (citations and internal quotation marks omitted).
Accordingly, we conclude the claims recite a fundamental economic
401 (k), 403(b ), 457 and 529), individual retirement accounts ('IRAs'),
structured settlements, funding agreements, private placements, partnerships,
corporations, and any other acceptable structure that may be converted to a
delivery instrument according to the systems and methods described herein
( any single or combination of the preceding assets or instruments hereinafter
referred to as a 'portfolio of assets')." Spec. 7:10-17.
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practice, which is one of certain methods of organizing human activity, and
thus, an abstract idea.
Next, we consider whether the claim includes additional elements that
integrate the judicial exception into a practical application. To determine
whether the judicial exception is integrated into a practical application, we
identify whether there are "any additional elements recited in the claim
beyond the judicial exception(s)" and evaluate those elements to determine
whether they integrate the judicial exception into a recognized practical
application. Memorandum, 84 Fed. Reg. at 54--55 (emphasis added); see
also Manual of Patent Examining Procedure ("MPEP") § 2106.05(a}-(c),
(e}-(h) (9th ed., Rev. 08.2017, Jan. 2018).
Here, we find the additional limitations do not integrate the judicial
exception into a practical application. More particularly, the claims do not
recite: (i) an improvement to the functionality of a computer or other
technology or technical field (see MPEP § 2106.05(a)); (iii) use a "particular
machine" to apply or use the judicial exception (see MPEP § 2106.05(b ));
(iv) a particular transformation of an article to a different thing or state (see
MPEP § 2106.05(c)); or (vi) any other meaningful limitation (see MPEP
§ 2106.05(e)). See also Memorandum, 84 Fed. Reg. at 55.
Here, although the claim includes additional elements ( computer
implemented system, memory component, computer processor, computer),
these are insufficient to constitute integration into a practical application
because these elements are recited at high level of generality and the claim
simply applies the judicial exception using "computer," "computer
processor," and "memory component." That is, the claim merely utilizes
these additional elements as a tool to perform the abstract idea (mental
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processes and fundamental economic practices). See MPEP § 2106.05(±);
Memorandum, 84 Fed. Reg. at 55; see also Alice, 573 U.S. at 223 ("if [the]
recitation of a computer amounts to a mere instruction to implement an
abstract idea on a computer that addition cannot impart patent eligibility"
( quotations and internal citations omitted)).
The additional elements also do not constitute a particular machine.
Even assuming the additional elements represent a generically recited
computer (i.e., generic computer components) to perform the abstract idea,
that is insufficient. See Memorandum, 84 Fed. Reg. 50 at III A(2); MPEP
§ 2106.05(b ); Eibel Process Co. v. Minnesota & Ontario Paper Co., 261
U.S. 45, 64---65 (1923); MPEP § 2106.05(±); Alice, 573 U.S. at 222-26;
Benson, 409 U.S. 63; Credit Acceptance Corp. v. Westlake Servs., 859 F.3d
1044 (Fed. Cir. 2017).
Appellants' arguments regarding improved functioning of a computer
are not persuasive as the arguments are conclusory and not commensurate
with the scope of the claim. Mere attorney arguments and conclusory
statements that are unsupported by factual evidence are entitled to little
probative value. See In re Geisler, 116 F.3d 1465, 1470 (Fed. Cir. 1997); In
re De Blauwe, 736 F.2d 699, 705 (Fed. Cir. 1984); Ex parte Belinne, Appeal
2009-004693, 2009 WL 2477843, at *3--4 (BPAI Aug. 10, 2009)
(informative). Contrary to Appellants' arguments, the claim recitations are
not a technological improvement or an improvement in a technology.
Appellants' claim 31 does not "improve the functioning of the computer
itself' or "any other technology or technical field." Alice, 573 U.S. at 225.
Nor, does it provide a technological solution to a technological problem.
See DDR Holdings, 773 F.3d at 1257; MPEP § 2106.05(a). Rather,
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Appellants' claims and, in particular, the above-identified additional
elements are similar to the claims in Alice (see Alice, 573 U.S. at 225-26)
and Versata Dev. Group, Inc. v. SAP America., Inc., 793 F.3d 1306, 1333-
34 (Fed. Cir. 2015) in that the instant claims implement a known economic
practice utilizing a general purpose computer.
Unlike the claims of Enfzsh, claim 31 is not "directed to an innovative
logical model for a computer database [that] includes all data entities in a
single table, with column definitions provided by rows in that same table" or
similar improvements. Enfzsh, 822 F.3d at 1330. Unlike the claims of DDR,
claim 31 does not "specify how interactions with the Internet are
manipulated to yield ... a result that overrides the routine and conventional
sequence of events" or provide similar technology improvements. DDR
Holdings, 773 F.3d at 1258-59. Further, claim 31 recites an invention that
merely uses computer elements as a tool-the opposite of what the claims of
DDR represent. See id.
Therefore, under the Memorandum, claim 31 is directed to an abstract
idea, and we proceed to analyze the claim under Alice, step 2. As discussed
above, in the Alice, step 2 inquiry, we determine whether there is an
inventive concept that renders the abstract idea patent eligible.
We note the introduction of a processor into the claims to implement
an abstract idea is not a patentable application of the abstract idea. Alice,
573 U.S. at 222-23. The computer implementation here is purely
conventional and performs basic functions. See id. at 224--25. Appellants
do not adequately show how the claimed steps are done technically such that
they cannot be done manually or that they are not routine and conventional
functions of a generic computer. See Versata, 793 F.3d at 1334 ("[T]he
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limitations of claim 17 involve arranging a hierarchy of organizational and
product groups, storing pricing information, retrieving applicable pricing
information, sorting pricing information, eliminating less restrictive pricing
information, and determining the price. All of these limitations are well-
understood, routine, conventional activities previously known to the
industry."). Moreover, the Specification does not support the view that the
computer related claim elements are unconventional. See Spec. 16:20-
17 :20.
Appellants' argument regarding the absence of a prior art rejection is
unpersuasive, because a prior art rejection is determined under 35 U.S.C.
§ 102 and§ 103, which are different statutory requirements. As the
Supreme Court emphasizes: "[t]he 'novelty' of any element or steps in a
process, or even of the process itself, is of no relevance in determining
whether the subject matter of a claim falls within the § 101 categories of
possibly patentable subject matter." Diehr, 450 U.S. at 188-89 (emphasis
added). Our reviewing court further guides that "[ e ]ligibility and novelty are
separate inquiries." Two-Way Media Ltd. v. Comcast Cable Commc 'ns,
LLC, 874 F.3d 1329, 1340 (Fed. Cir. 2017).
We find no element or combination of elements recited in Appellants'
claim 31 that contains any "inventive concept" or adds anything
"significantly more" to transform the abstract concept into a patent-eligible
application. Alice, 573 U.S. at 221. As discussed supra, we are not
persuaded the added computer elements transform the abstract idea into a
patent eligible invention. As our reviewing court has observed, "after Alice,
there can remain no doubt: recitation of generic computer limitations does
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not make an otherwise ineligible claim patent-eligible." DDR, 773 F.3d at
1256 ( citing Alice, 573 U.S. at 223).
We note the patent eligibility inquiry may contain underlying issues of
fact. Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314,
1325 (Fed. Cir. 2016). In particular, "[t]he question of whether a claim
element or combination of elements is well-understood, routine and
conventional to a skilled artisan in the relevant field is a question of fact."
Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018). Here, the
additional elements are set forth at a high level of generality, as discussed
supra, and the record sufficiently establishes that these elements and the
combination are well-understood, routine and conventional to a skilled
artisan in the relevant field.
Regarding preemption, although preemption may denote patent
ineligibility, its absence does not demonstrate patent eligibility. See
Fair Warning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1098 (Fed. Cir.
2016). For claims covering a patent-ineligible concept, preemption concerns
"are fully addressed and made moot" by an analysis under the Mayo/Alice
framework. Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1379 (Fed. Cir. 2015).
Unlike the claims of McRO, claim 31 is not directed to "a specific
asserted improvement in computer animation" or similar improvements.
McRO, 837 F.3d at 1314. Nor is claim 31 directed to using "a combined
order of specific rules that renders information into a specific format that is
then used and applied to create desired results: a sequence of synchronized,
animated characters" or similar functions. Id. at 1315. Instead, as discussed,
supra, claim 31 focuses on abstract ideas that merely use processors and a
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memory component as tools to manipulate information.
In view of the above, we sustain the rejection of claim 31,
independent claim 1 as it recites similar limitations to claim 31 and is not
argued separately, and dependent claims 2-9 and 12-30 as these claims are
not argued separately by Appellants.
DECISION
We affirm the Examiner's decision rejecting claims 1-9 and 12-31
under 35 U.S.C. § 101.
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). See
37 C.F.R. § 41.50(±).
AFFIRMED
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