Ex Parte Zarawani

Patent Trial and Appeal Board

Sep 7, 2018

12817654 (P.T.A.B. Sep. 7, 2018)

UNITED STA TES p A TENT 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.
12/817,654 06/17/2010 Sohail Abdul-Rahim Abdulla Jaffar Al Zarawani 002740/0007 6006
26610 7590 09/11/2018
STROOCK & STROOCK & LAV AN LLP
180 MAIDEN LANE
NEW YORK, NY 10038
EXAMINER
KHATTAR, RAJESH
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
09/11/2018 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):
uspatents@stroock.com
jmann@stroock.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte SO HAIL ABDUL-RAHIM ABDULLA JAFF AR
ALZARAWANI
Appeal2017-006960
Application 12/817,654 1
Technology Center 3600
Before BRUCE T. WIEDER, TARA L. HUTCHINGS, and
AMEE A. SHAH, Administrative Patent Judges.
WIEDER, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134 from the
Examiner's rejection of claims 14--16. We have jurisdiction under 35 U.S.C.
§ 6(b ).
We AFFIRM.
1 According to Appellant, the real party in interest is Sohail Abdul-Rahim
Abdulla Jaffar Al Zarawani. (Appeal Br. 4.)
Appeal2017-006960
Application 12/817,654
CLAIMED SUBJECT MATTER
Appellant's invention "generally relates to methods of financing and
investment." (Spec. 1, 1. 14.) In particular, a "method is provided that
infuses a pledged amount into an account of an issuer in a just-in-time
manner." (Id. at 5, 11. 10-11.)
Claims 14 is the sole independent claim on appeal. It recites:
14. A computer implemented method for organizing pledged
amounts into tranches for use by a party in a just-in-time manner
for financing a transaction, comprising the steps of:
(a) establishing in a host machine connected to a
distributed computer network one or more pledge agreements
each having terms including (i) the pledged amount of a
prescribed asset associated with an account of a respective asset
holder, and (ii) a benchmark description of a security asset to be
acquired upon transfer of the pledged amount;
(b) confirming access to the asset-holder account over the
computer network and, thereafter, repeatedly monitoring over
the computer network any established asset holder accounts to
ensure a current availability of the associated prescribed asset
associated with the pledged amount to provide a just-in-time
asset transfer and notifying the asset holder via a wireless
communication if the prescribed asset amount is in default in
order to give the asset holder an opportunity to cure the default;
( c) defining a tranche of pledge agreements based upon
distinct risk-return profiles by matching a benchmark description
of any pledge agreements within the host machine;
( d) assigning beneficial ownership of the tranche to a
third-party; and
( e) in response to an instruction received from the party at
the host machine:
(i) processing the terms of the pledge agreements of
the tranche by using rules defined by the party, to rank the
pledge agreements in accordance with at least one defined
criterion;
(ii) identifying from among the processed pledge
agreements one or more asset-holder accounts having the
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current availability for infusing at least a portion of the
pledged amount into an account of the party;
(iii) instructing the identified accounts to transfer at
least a portion of the prescribed assets in the identified
asset-holder accounts to the party account; and
(iv) for each account having at least the portion of
the prescribed assets transferred, crediting the account
holder with a security asset satisfying the benchmark
description of the security asset.
REJECTION
Claims 14--16 are rejected under 35 U.S.C. § 101 as directed to a
judicial exception without significantly more.
ANALYSIS
"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." 35 U.S.C. § 101. Section 101, however,
"'contains an important implicit exception: Laws of nature, natural
phenomena, and abstract ideas are not patentable."' Alice Corp. Pty. Ltd. v.
CLS Bankint'l, 134 S. Ct. 2347, 2354 (2014) (quoting Assoc.for Molecular
Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)).
Alice applies a two-step framework, earlier set out in Mayo
Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66
(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, 134 S. Ct. at 2355.
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Under the two-step framework, it must first be determined if "the
claims at issue are directed to a patent-ineligible concept." Id. If the claims
are determined to be directed to a patent-ineligible concept, e.g., an abstract
idea, then the second step of the framework is applied to determine if "the
elements of the claim ... contain[] an 'inventive concept' sufficient to
'transform' the claimed abstract idea into a patent-eligible application." Id.
at 2357 (citing Mayo, 566 U.S. at 72-73, 79).
With regard to step one of the Alice framework, the Examiner
determines that claim 14 "is directed to the abstract idea of creating a
contractual relationship. [ Although t ]he claim does not specifically state[]
'creating a contract,' the concept of 'creating a contract,' is described by the
various steps." (Non-Final Action 4.)
Appellant disagrees and argues that "[t]he claims at issue are not
simply directed to any form of creating a contractual relationship. They
disclose a specific and novel way to infuse pledged assets into an issuer
account." ( Appeal Br. 13.) Appellant further argues that "the claims are
directed to specific methods of infusing a pledged asset in a specific manner
under specific conditions." (Id.)
Under step one of the Alice framework, we "look at the 'focus of the
claimed advance over the prior art' to determine if the claim's 'character as a
whole' is directed to excluded subject matter." Affinity Labs of Texas, LLC
v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) (quoting Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016)).
The Specification provides evidence as to what the claimed invention
is directed. In this case, the Specification discloses that Appellant's
invention "generally relates to methods of financing and investment."
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(Spec. 1, 1. 14.) Claim 14 provides further evidence. Claim 14 recites a
"method for organizing pledged amounts into tranches," comprising
"establishing ... pledge agreements each having terms including (i) the
pledged amount of a prescribed asset ... and (ii) a benchmark description of
a security asset," "confirming access to the asset-holder account ... and ...
monitoring ... any established asset holder accounts to ensure a current
availability of the associated prescribed asset ... and notifying the asset
holder ... if the prescribed asset amount is in default," "defining a tranche
of pledge agreements ... by matching a benchmark description of any
pledge agreements," "assigning beneficial ownership of the tranche to a third
party," and "in response to an instruction," "processing the terms of the
pledge agreements," "identifying ... one or more asset-holder accounts
having the current availability for infusing at least a portion of the pledged
amount," "instructing the identified accounts to transfer at least a portion of
the prescribed assets," and "crediting the account holder with a security asset
satisfying the benchmark description."
Although we and the Examiner describe, at different levels of
abstraction, to what the claims are directed, it is recognized that "[a]n
abstract idea can generally be described at different levels of abstraction."
Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016). That
need not and, in this case does not, "impact the patentability analysis." See
id. at 1241.
Claim 14 recites creating contractual relationships, i.e., pledge
agreements, and using a computer and computer network to monitor account
information, and issue instructions associated with those pledge agreements,
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including defining a tranche of pledge agreements and notifying asset
holders in the event of a default.
As in Alice, we need not labor to delimit the precise contours of the
"abstract ideas" category in this case. It is enough to recognize that there is
no meaningful distinction in the level of abstraction between the concept of
"creating a contractual relationship" in buySAFE, Inc. v. Google, Inc., 7 65
F.3d 1350, 1354--55 (Fed. Cir. 2014) and "creat[ing] electronic records,
track[ing] multiple transactions, and issu[ing] ... instructions" in Alice, 134
S. Ct. at 2359, and the concept of organizing pledged amounts into tranches
for financing transactions through instructions to establish pledge
agreements, monitor accounts, and transfer assets from and credit assets to
appropriate accounts. All are squarely within the realm of "abstract ideas"
as the Court has used that term. See Alice, 134 S. Ct. at 2357.
Nonetheless, Appellant argues "that the claims are directed to specific
methods of infusing a pledged asset in a specific manner under specific
conditions." (Appeal Br. 14, citing Enfzsh LLC v. Microsoft Corp., 822 F.3d
1327 (2016).) We disagree. The claim limitations do not recite
implementation details. Instead, they recite functional results to be
achieved. In other words, the claims do not recite "a particular way of
programming or designing the software ... , but instead merely claim the
resulting system." Apple, Inc., 842 F.3d at 1240. Additionally, unlike the
present claims, the claims in Enfzsh were "specifically directed to a self-
referential table for a computer database." Enfzsh, 822 F.3d at 1337. That
is, "the plain focus of the claims [was] on an improvement to computer
functionality itself, not on economic or other tasks for which a computer is
used in its ordinary capacity." Id. at 1336.
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Appellant also argues that "[ t ]he claims are directed to an
improvement in investment and insurance processes." (Appeal Br. 14.)
Even if we agreed with Appellant's characterization of the claims, the
asserted improvement would be, nonetheless, to a business practice
regarding infusing funds into an account. In other words, "these claims in
substance [are] directed to nothing more than the performance of an abstract
business practice ... using a conventional computer. Such claims are not
patent-eligible." DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245,
1256 (Fed. Cir. 2014). Moreover, "[ n Jo matter how much of an advance in
the finance field the claims recite, the advance lies entirely in the realm of
abstract ideas, with no plausibly alleged innovation in the non-abstract
application realm." SAP America, Inc. v. InvestPic, LLC, 898 F.3d 1161,
1163 (Fed. Cir. 2018); see also id. at 1168.
In view of the above, we agree with the Examiner that claim 14 is
directed to an abstract idea.
Step two of the Alice framework has been described "as a 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."' Alice, 134 S. Ct.
at 2355 (quoting Mayo, 566 U.S. at 72-73).
Appellant argues that "[t]he 5S Pledge is a new invention and method
for financing and insurance." (Appeal Br. 14, quoting Spec. 11, 11. 15-17.)
But "under the Mayo/Alice framework, a claim directed to a newly
discovered law of nature (or natural phenomenon or abstract idea) cannot
rely on the novelty of that discovery for the inventive concept necessary for
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patent eligibility." Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369,
1376 (Fed. Cir. 2016).
Appellant seeks to analogize the claims to those in Bascom Global
Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir.
2016). (See Appeal Br. 16-17.) Appellant argues that "[s]imilar to the
unique ISP filter location in BASCOM, the implementation of this new
security instrument [i.e., the pledge agreement] constitutes a unique
arrangement of elements that effects a non-conventional improvement over
the prior art." (Appeal Br. 17.) We disagree.
In Bascom, the court determined that "an inventive concept can be
found in the non-conventional and non-generic arrangement of known,
conventional pieces." Bascom, 827 F.3d at 1350. Specifically, "[t]he
inventive concept described and claimed in the '606 patent is the installation
of a filtering tool at a specific location, remote from the end-users, with
customizable filtering features specific to each end user." Id. at 1350. The
Federal Circuit determined that this "particular arrangement of elements is a
technical improvement over prior art ways of filtering." Id. Appellant does
not indicate what element(s) in claim 14 corresponds to, e.g., the "filtering
tool at a specific location, remote from the end-users" that provides a
technical improvement. Therefore, we do not find this argument persuasive.
Appellant also argues that the claims do not involve generic computer
components. (Appeal Br. 18.) We disagree. The Specification discloses
that Figure 1 shows an "operating environment for the present invention."
(Spec. 7, 11. 14--15.) The Specification further discloses that "[e]ach of the
components in the illustration of Figure 1 communicates in a conventional
manner over conventional communication lines" and that "[ e Jach of the
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machines has a typical complement of other components and software
including, without limitation, respective processors, memory circuits,
communication ports, operating systems and other software ( e.g., web
browsers)." (Id. at 11, 11. 8-13.)
Nonetheless, Appellant argues that "the present claims' unique non-
generic arrangement of elements should be found to be a patent-eligible
inventive concept." (Appeal Br. 18.) But Appellant does not persuasively
argue what computer elements are arranged in a unique, non-generic
manner.
Appellant further argues that "claim 14 is in line with Example 21,
claim 2 of the Office's July 2015 Update: Subject Matter Eligibility
('Update')."2 (Appeal Br. 18.) In particular, Appellant argues that in
claim 2 of the Example, "the claimed invention alerted the subscriber with
particular information when the subscriber was offline" and that "[t]his was
achieved by 'transmitting the alert over a wireless communication channel."'
(Id. at 19.) Appellant then argues that "[ c ]laim 14 of the present application
is similar to this Example 21, and achieves a very similar solution, i.e., to
alert the subscriber via a wireless communication." (Id.)
As an initial matter, we note that the Update simply presents
hypothetical examples. (See Update Appendix 1.) We also note that claim 2
in Example 21 recites "[a] method of distributing stock quotes over a
network to a remote subscriber computer" including the steps of
2 See July 2015 Update: Subject Matter Eligibility (July 2015) (available at
https://www.uspto.gov/sites/default/files/documents/ieg-july-2015-
update.pdf); see also July 2015 Update Appendix 1: Examples (July 2015)
(available at https://www.uspto.gov/sites/default/files/documents/ieg-july-
2015-app 1.pdf) ("Update Appendix").
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transmit[ing] the formatted stock quote alert over a
wireless communication channel to a wireless device associated
with a subscriber based upon the destination address and
transmission schedule,
wherein the alert activates the stock viewer application to
cause the stock quote alert to display on the remote subscriber
computer and to enable connection via the URL to the data
source over the Internet when the wireless device is locally
connected to the remote subscriber computer and the remote
subscriber computer comes online.
(Update Appendix 3.) The Update Appendix explains that
[t]he claimed invention addresses the Internet-centric challenge
of alerting a subscriber with time sensitive information when the
subscriber's computer is offline. This is addressed by
transmitting the alert over a wireless communication channel to
activate the stock viewer application, which causes the alert to
display and enables the connection of the remote subscriber
computer to the data source over the Internet when the remote
subscriber computer comes online.
(Id. at 4.)
Claim 1 in Example 21 is similar to Claim 2 except that Claim 1 lacks
the stock viewer application; and, thus, does not address "the Internet-centric
challenge of alerting a subscriber ... when the subscriber's computer is
offline" or "enable[] the connection of the remote subscriber computer to the
data source over the Internet when the remote subscriber computer comes
online." Claim 1 in Example 21 is described as patent ineligible. (Id. at 3-
4.) Appellant's claim 14 recites "notifying the asset holder via a wireless
communication if the prescribed asset amount is in default." Appellant does
not explain why simply notifying the asset holder via a wireless
communication addresses "the Internet-centric challenge of alerting a
subscriber ... when the subscriber's computer is offline" and, in particular,
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"enables the connection of the remote subscriber computer to the data source
over the Internet when the remote subscriber computer comes online." (See
id. at 4.)
Appellant also argues that "[a] plain reading of claim 14 demonstrates
that this claim does not preempt all methods of entering into contracts, or
even all types of pledge agreements." (Appeal Br. 20.) Preemption,
however, is not a separate test.
To be clear, the proper focus is not preemption per se, for some
measure of preemption is intrinsic in the statutory right granted
with every patent to exclude competitors, for a limited time, from
practicing the claimed invention. See 35 U.S.C. § 154. Rather,
the animating concern is that claims should not be coextensive
with a natural law, natural phenomenon, or abstract idea; a
patent-eligible claim must include one or more substantive
limitations that, in the words of the Supreme Court, add
"significantly more" to the basic principle, with the result that
the claim covers significantly less. See Mayo 132 S. Ct. at 1294
[566 U.S. at 72-73].
CLS Bank Int 'l v. Alice Corp. Pty. Ltd., 717 F .3d 1269, 1281 (Fed. Cir.
2013), aff'd, 134 S. Ct. 2347 (2014) (Lourie, J., concurring). Moreover,
"[ 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
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
In other words, "preemption may signal patent ineligible subject matter,
[but] the absence of complete preemption does not demonstrate patent
eligibility." Id.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
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computer to obtain data, analyze data and issue instructions/messages based
on the results, and modify data are basic computer functions. See, e.g.,
Alice, 134 S. Ct. at 2359. In other words, each step does no more than
require a generic computer to perform generic computer functions.
Considered as an ordered combination, the computer components of
Appellant's method add nothing that is not already present when the steps
are considered separately. The claims do not, for example, purport to
improve the functioning of the computer itself. Nor do they effect an
improvement in any other technology or technical field. Instead, the claims
at issue amount to nothing significantly more than an instruction to apply the
abstract idea using some unspecified, generic computer. That is not enough
to transform an abstract idea into a patent-eligible invention. Id. at 2360.
In view of the above, we agree with the Examiner that claim 14 is
directed to a judicial exception without significantly more. Appellant argues
that dependent claims 15 and 16 are patent eligible for at least the same
reasons as claim 14. (Appeal Br. 20.) For the reasons discussed above,
claims 15 and 16 fall with claim 14.
DECISION
The Examiner's rejection of claims 14--16 under 35 U.S.C. § 101 is
affirmed.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(l )(iv).
AFFIRMED
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