Frank Pak-Ho. Siu et al.

Patent Trials and Appeals Board

Feb 18, 2020

14519991 - (D) (P.T.A.B. Feb. 18, 2020)

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.
14/519,991 10/21/2014 Frank Pak-Ho Siu 166.0021 4097
27997 7590 02/18/2020
Hultquist IP
P.O. Box 14329
Research Triangle Park, NC 27709
EXAMINER
SHAIKH, MOHAMMAD Z
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
02/18/2020 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):
hip@hultquistip.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte FRANK PAK-HO SIU and ANTHONY A. RENSHAW
____________

Appeal 2018-008812
Application 14/519,991
Technology Center 3600
____________

Before ST. JOHN COURTENAY III, MARC S. HOFF, and
ERIC FRAHM, Administrative Patent Judges.

COURTENAY, Administrative Patent Judge.

DECISION ON APPEAL
Appellant1 appeals under 35 U.S.C. § 134(a) from a Final rejection of
claims 1–32. We have jurisdiction over the pending claims under 35 U.S.C.
§ 6(b).
We affirm.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42(a). According to Appellant, the real party in interest is
Axioma, Inc. See Appeal Br. 3.

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STATEMENT OF THE CASE
Introduction
Embodiments of Appellant’s invention relate to “improved methods
for constructing investment portfolios and indexes while managing the
liquidity of the individual holdings and trades. More particularly, it relates
to improved computer based systems, methods and software for managing
the liquidity of investment portfolios and indexes.” Spec. 1, ll. 6–9.
Rejection2
Claims 1–32 are rejected under 35 U.S.C. § 101, as being directed to a
judicial exception, without significantly more. See Final Act. 22.
Issues on Appeal
Did the Examiner err in rejecting claims 1–32 under 35 U.S.C. § 101,
as being directed to a judicial exception, without significantly more?
ANALYSIS
We reproduce infra independent claim 1 in Table One. We have
considered all of Appellant’s arguments and any evidence presented. To the
extent Appellant has not advanced separate, substantive arguments for
particular claims, or other issues, such arguments are waived. See 37 C.F.R.
§ 41.37(c)(1)(iv).

2 Responsive to Appellant’s arguments in the Appeal Brief, the Examiner
withdrew all of the rejections under 35 U.S.C. § 103 in the Answer:
“Appellant’s arguments are persuasive, the 35 U.S.C 103 rejections for
claims 1–32 are hereby withdrawn.” Ans. 14. The Examiner also withdrew
the previous rejection(s) under 35 U.S.C. § 112(a): “The 35 U.S.C 112(a)
rejections for claims 1–23 are hereby withdrawn.” Final Act. 12. Therefore,
these withdrawn rejections are not before us on appeal.
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Rejection under 35 U.S.C. § 101
Principles of Law
A. Section 101
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
However, the U.S. Supreme Court has long interpreted 35 U.S.C. § 101 to
include implicit exceptions: “[l]aws of nature, natural phenomena, and
abstract ideas are not patentable.” E.g., Alice Corp. v. CLS Bank Int’l, 573
U.S. 208, 216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Court’s two-part framework, described in Mayo and Alice.
Alice, 573 U.S. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework,
we first determine what concept the claim is “directed to.” See Alice, 573
U.S. 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. Kappos, 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 (Gottschalk v. Benson, 409 U.S. 63, 67 (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
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rubber, smelting ores” (id. at 182 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))).
In Diehr, the claim at issue recited a mathematical formula, but the
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 187; see also id. at 191 (“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 turn 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.
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B. USPTO § 101 Guidance
The U. S. Patent and Trademark Office (USPTO) published revised
guidance on the application of § 101. USPTO’s January 7, 2019
Memorandum, 2019 Revised Patent Subject Matter Eligibility Guidance, 84
Fed. Reg. 50 (“2019 Memorandum”).3 Under that guidance, we first look to
whether the claim recites:
(1) (see 2019 Memorandum Step 2A — Prong One) 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) (see 2019 Memorandum Step 2A — Prong Two) additional
elements that integrate the judicial exception into a practical
application (see MPEP § 2106.05(a)–(c), (e)–(h)).4
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 The Office issued a further memorandum on October 17, 2019 (the
“October 2019 Memorandum”) clarifying guidance of the January 2019
Memorandum in response to received public comments. See https://
www.uspto.gov/sites/default/files/documents/peg_oct_2019_update.pdf.
Moreover, “[a]ll USPTO personnel are, as a matter of internal agency
management, expected to follow the guidance.” January 2019 Memorandum
at 51; see also October 2019 Memorandum at 1.
4 This evaluation is performed by (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception, and
(b) evaluating those additional elements individually and in combination to
determine whether the claim as a whole integrates the exception into a
practical application. See 2019 Memorandum - Section III(A)(2).
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(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 2019 Memorandum Step 2B.

Because there is no single definition of an “abstract idea” under Alice
step 1, the PTO has recently synthesized, for purposes of clarity,
predictability, and consistency, key concepts identified by the courts as
abstract ideas to explain that the “abstract idea” exception includes the
following three groupings:
1. Mathematical concepts—mathematical relationships,
mathematical formulas or equations, mathematical
calculations;
2. Mental processes— concepts performed in the human mind
(including an observation, evaluation, judgment, opinion);
and
3. Certain methods of organizing human activity—fundamental
economic principles or practices (including hedging,
insurance, mitigating risk); commercial or legal interactions
(including agreements in the form of contracts; legal
obligations; advertising, marketing or sales activities or
behaviors; business relations); managing personal behavior
or relationships or interactions between people (including
social activities, teaching, and following rules or
instructions).
See 2019 Memorandum, 84 Fed. Reg. at 52.
According to the 2019 Memorandum, “[c]laims that do not recite
[subject] matter that falls within these enumerated groupings of abstract
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ideas should not be treated as reciting abstract ideas,” except in rare
circumstances. Even if the claims recite any one of these three groupings of
abstract ideas, these claims are still not “directed to” a judicial exception
(abstract idea), and thus are patent eligible, if “the claim as a whole
integrates the recited judicial exception into a practical application of that
exception.” See 2019 Memorandum, 84 Fed. Reg. at 53.
For example, limitations that are indicative of integration into a
practical application include:
1. Improvements to the functioning of a computer, or to any
other technology or technical field — see MPEP
§ 2106.05(a);
2. Applying the judicial exception with, or by use of, a
particular machine — see MPEP § 2106.05(b);
3. Effecting a transformation or reduction of a particular
article to a different state or thing — see MPEP
§ 2106.05(c); and
4. Applying or using the judicial exception in some other
meaningful way beyond generally linking the use of the
judicial exception to a particular technological
environment, such that the claim as a whole is more than
a drafting effort designed to monopolize the exception
— see MPEP § 2106.05(e).
In contrast, limitations that are not indicative of integration into a
practical application include:
1. Adding the words “apply it” (or an equivalent) with the
judicial exception, or merely include instructions to
implement an abstract idea on a computer, or merely uses a
computer as a tool to perform an abstract idea — see MPEP
§ 2106.05(f);
2. Adding insignificant extra-solution activity to the judicial
exception — see MPEP § 2106.05(g); and
3. Generally linking the use of the judicial exception to a
particular technological environment or field of use — see
MPEP § 2106.05(h).
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See 2019 Memorandum, 84 Fed. Reg. at 54–55 (“Prong Two”).

2019 Memorandum, Step 2A, Prong One5
The Judicial Exception
Under the 2019 Memorandum, we begin our analysis by first
considering whether the claims recite any judicial exceptions, including
certain groupings of abstract ideas, in particular: (a) mathematical concepts,
(b) mental steps, and (c) certain methods of organizing human activities.
The Examiner concludes that all claims 1–32 describe an abstract
idea: “constructing a portfolio of investments assets.” Final Act. 23. The
Examiner concludes “[t]he focus of claim 1 is to collect financial data,
organize the financial data utilizing mathematical formulas and then
display[] the results.” Final Act. 24.
We apply the Director’s 2019 Memorandum de novo. In Table One
below, we identify in italics the specific claim limitations that we conclude
recite an abstract idea. We also identify in bold the additional (non-abstract)
claim limitations that we find are generic computer components:

5 Throughout this opinion, we give the claim limitations the broadest
reasonable interpretation consistent with the Specification. See In re Morris,
127 F.3d 1048, 1054 (Fed. Cir. 1997).

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TABLE ONE
Independent Claim 16 2019 Memorandum
[a] A computer-implemented
method for constructing a
portfolio of investment assets
comprising:
Abstract idea: constructing a
portfolio of investment assets is a
fundamental economic practice
including business relations that
could be performed alternatively as a
mental process. See 2019
Memorandum 52.

The computer is an additional non-
abstract limitation.
[b] electronically receiving
by a programmed computer
a set of N investment assets
having a range of liquidities;
Receiving a set of N investment
assets having a range of liquidities is
insignificant extra-solution activity
(data gathering). 2019
Memorandum, 55 n.31; see also
MPEP § 2106.05(g).
A programmed computer is an
additional non-abstract limitation.
[c] electronically receiving by
the programmed computer
an N-dimensional vector
giving a measure of the
trading liquidity for each of
the investment assets;
Retrieving an N-dimensional vector
giving a measure of the trading
liquidity for each of the investment
assets is insignificant extra-solution
activity (data gathering). 2019
Memorandum, 55 n.31; see also
MPEP § 2106.05(g).

6 A method falls under the statutory subject matter class of a process. See 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.”).

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Independent Claim 16 2019 Memorandum
The programmed computer is an
additional non-abstract limitation.
[d] electronically receiving
by the programmed
computer an N-dimensional
vector giving percentage
weights for a benchmark
portfolio of investment
assets;
Retrieving an N-dimensional vector
giving percentage weights for a
benchmark portfolio of investment
assets is insignificant extra-solution
activity (data gathering). 2019
Memorandum, 55 n.31; see also
MPEP § 2106.05(g).
The programmed computer is an
additional non-abstract limitation.
[e] electronically receiving by
a programmed computer a
subset of illiquid assets from
the investment assets;
Receiving a subset of illiquid assets
from the investment assets is
insignificant extra-solution activity
(data gathering). 2019
Memorandum, 55 n.31; see also
MPEP § 2106.05(g).
The programmed computer is an
additional non-abstract limitation.
[f] calculating on the
programmed computer a
portfolio of investment assets
with percentage weights,
wherein a first summation of
a first ratio is less than or
equal to a constant value
times a second summation of
a second ratio, where both
the first and second
summations are performed on
the subset of illiquid assets,
and the first ratio is a
squared percentage weight of
an asset in the portfolio
divided by the measure of the
Abstract Idea: Calculating a
portfolio of investment assets with
percentage weights (as claimed) is a
mathematical concept, including
mathematical relationships,
mathematical formulas or equations,
and mathematical calculations, that
could be performed alternatively as a
mental process. See 2019
Memorandum 52.
Such calculating a portfolio of
investment assets with percentage
weights is also a fundamental
economic practice including business
relations that could be performed
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Independent Claim 16 2019 Memorandum
asset's trading liquidity, and
the second ratio is a squared
percentage weight of the
asset in the benchmark
divided by the measure of the
asset's trading liquidity
wherein the constant value is
independent of a number of
shares or a currency amount
invested in each potential
investment;
alternatively as a mental process.
See 2019 Memorandum 52.
The programmed computer is an
additional non-abstract limitation.
[g] electronically outputting
the portfolio employing an
output device.
Outputting the portfolio employing
an output device is insignificant
post-solution activity. 2019
Memorandum, 55 n.31; see also
MPEP § 2106.05(g).
The output device is an additional
non-abstract limitation.

Abstract Idea — Mental Processes
After considering representative method claim 1 as a whole, we
conclude that the recited italicized steps shown in Table One could also be
performed alternatively as mental processes.7 See 2019 Memorandum, 84

7 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. See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d
1366, 1372–73 (Fed. Cir. 2011); “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.” CyberSource, 654
F.3d at 1375. See also Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d
1138, 1146–47 (Fed. Cir. 2016). Moreover, “[u]sing a computer to
accelerate an ineligible mental process does not make that process patent-
eligible.” Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (U.S.),
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Fed. Reg. at 52. See also “Intellectual Ventures I LLC v. Symantec Corp.,
838 F.3d 1307, 1318 (Fed. Cir. 2016) (‘[W]ith the exception of generic
computer-implemented steps, there is nothing in the claims themselves that
foreclose them from being performed by a human, mentally or with pen and
paper.’).” 2019 Memorandum, 84 Fed. Reg. at 52 n.14.
“An abstract idea can generally be described at different levels of
abstraction.” Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir.
2016). Merely combining several abstract ideas does not render the
combination any less abstract. See RecogniCorp, LLC v. Nintendo Co., 855
F.3d 1322, 1327 (Fed. Cir. 2017) (“Adding one abstract idea (math) to
another abstract idea . . . does not render the claim non-abstract.”);
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093–94 (Fed. Cir.
2016) (determining the pending claims were directed to a combination of
abstract ideas).
For at least these reasons, we conclude representative claim 1 recites
the specific types of abstract ideas identified above in Table One.

Additional Limitations
As emphasized in bold in Table One, supra, we note the additional
non-abstract limitations, for example (claim 1): A computer-implemented
method and a programmed computer.

687 F.3d 1266, 1279 (Fed. Cir. 2012); see also OIP Techs., Inc. v.
Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (“[R]elying on a
computer to perform routine tasks more quickly or more accurately is
insufficient to render a claim patent eligible.”).

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We further note the supporting exemplary descriptions of generic
computer components in the Specification, for example:
The present invention may be suitably implemented as a
computer based system, in computer software which is stored in
a non-transitory manner and which may suitably reside on
computer readable media, such as solid state storage devices,
such as RAM, ROM, or the like, magnetic storage devices such
as a hard disk or solid state drive, optical storage devices, such
as CD-ROM, CD-RW, DVD, Blue Ray Disc or the like, or as
methods implemented by such systems and software. The
present invention may be implemented on personal computers,
workstations, computer servers or mobile devices such as cell
phones, tablets, IPads™, IPods™ and the like.
Spec. 18, ll. 17–24 (emphasis omitted).
It will be appreciated, in light of the present description of the
invention, that the present invention may be practiced in any of
a number of different computing environments without
departing from the spirit of the invention. For example, the
system 100 may be implemented in a network configuration
with individual workstations connected to a server. Also, other
input and output devices may be used, as desired. For example,
a remote user could access the server with a desktop computer,
a laptop utilizing the Internet or with a wireless handheld device
such as cell phones, tablets and e-readers such as an IPad™,
IPhone™, TPod™, Blackberry™, Treo™, or the like.
Spec. 19, ll. 22–25 and Spec. 20, ll. 1–4 (emphasis added).
We emphasize that McRO, Inc. v. Bandai Namco Games Am. Inc.,
(837 F.3d 1299 (Fed. Cir. 2016)), guides: “[t]he abstract idea exception
prevents patenting a result where ‘it matters not by what process or
machinery the result is accomplished.’” 837 F.3d at 1312 (quoting O’Reilly
v. Morse, 56 U.S. 62, 113 (1854)) (emphasis added). See supra Table One.
Because we conclude all claims 1–32 on appeal recite an abstract idea, as
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identified above, under Step 2A, Prong One, we proceed to Step 2A, Prong
Two.
2019 Memorandum, Step 2A, Prong Two
Integration of the Judicial Exception into a Practical Application

Pursuant to the 2019 Memorandum, we consider whether there are
additional elements set forth in the claims that integrate the judicial
exception into a practical application. See 2019 Memorandum, 84 Fed. Reg.
at 54–55.
MPEP § 2106.05(a)
Improvements to the Functioning of a Computer or
to Any Other Technology or Technical Field

Appellant argues the claimed invention provides an improvement to
computer functionality:
Here, the claims do not address a fundamental economic
practice, a method of organizing human activity, an idea itself
or a mathematical relationship or formula. To the contrary, the
present invention relates to details of an improved computer
tool and procedures to better manage the liquidity of investment
portfolios. [See] Present application page 14, lines 13, 14, 17
and 18, for example. Drilling down further, the present
invention specifies two new parameters and preferred ranges for
these parameters to more effectively improve liquidity with
minimal degradation on performance, Page 27, lines 8-10. By
analogy to an improved chemical process, these new
parameters and specific ranges are shown to be advantageous in
achieving improved process results.
. . .
Among its several aspects, the present invention provides
new tools and procedures based in improved computers and
software that enable users to more effectively manage liquidity.
In several claimed embodiments, very specific approaches
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are addressed in detail. These and other aspects of the
invention are expanded upon throughout the specification.
Aspects of the present invention address deficiencies in prior art
approaches and provide advantageous alternatives thereto so
that new computer based procedures and tools are provided to
users of the present invention as defined by the claims.
Appeal Br. 23 (emphasis added).
However, Appellant merely recites the claim language in support. See
Appeal Br. 24. Appellant has not provided sufficient details regarding how
the recited “computer-implemented method” and “programmed
computer” (claim 1 (emphasis added)) include more than mere instructions
to perform the recited steps to qualify as an improvement to an existing
technology. As discussed above, we conclude Appellant’s generic
computer-implemented method performs steps that can be performed
alternatively as mental processes. See independent claims 1, 6, 11, 17, and
23. Moreover, the “‘mere automation of manual processes using generic
computers’ . . . ‘does not constitute a patentable improvement in computer
technology,’” Trading Techs. Int’l v. IBG LLC, 921 F.3d 1378, 1384 (Fed.
Cir. 2019) (quoting Credit Acceptance Corp. v. Westlake Servs., 859 F.3d
1044, 1055 (Fed. Cir. 2017).

Appellant additionally argues:
As was the case in DDR Holdings, the present claims do not
simply use a computer to automate what was done previously,
but rather address an invention that recognizes a problem and
advantageously improves upon what was previously done with
a computer, solving a specific problem and providing an
improvement to computer technology.
Appeal Br. 28 (emphasis added in bold).
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DDR Holdings
We do not agree with Appellant that this is a case involving eligible
subject matter, as was the case in DDR Holdings, LLC v. Hotels.com, L.P.,
773 F.3d 1245 (Fed. Cir. 2014). See Appeal Br. 28.
In DDR, instead of a computer network operating in its normal,
expected manner by sending a website visitor to a third-party website via a
clicked advertisement, the claimed invention generated and directed the
visitor to a hybrid page that presented: (1) product information from the
third party, and (2) the visual “look and feel” elements from the host
website, thus retaining the visitor at the original website. DDR, 773 F.3d at
1258–59. Given this particular Internet-based solution, the court held that
the claimed invention did not merely use the Internet to perform a business
practice known from the pre-Internet world, but rather was necessarily
rooted in computer technology to overcome a problem specifically arising in
computer networks. Id. at 1257.
That is not the case here. Although Appellant’s claimed invention
results in the last recited step of “[g] electronically outputting the portfolio
employing an output device,” this step does not improve the recited
“programmed computer” of claim 1. Nor is there any mention of the
Internet or a website, as was the case in DDR. To the extent that Appellant
has invented an improved method of “constructing a portfolio of investment
assets” (claim 1), we note an improved abstract idea is still an abstract idea.
See Mayo, 566 U.S. at 90 (holding that a novel and nonobvious claim
directed to a purely abstract idea is, nonetheless, patent-ineligible).
Therefore, it is our view that Appellant’s claimed invention is not
rooted in computer technology in the sense contemplated by DDR, in which
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the claimed invention solved a challenge particular to the Internet. Thus, we
agree with the Examiner’s response in the Answer: “The claims in the
instant invention do not address problems unique to the Internet, so DDR has
no applicability.” Ans. 16.
Accordingly, on this record, we conclude independent claims 1, 6, 11,
17, and 23, and associated dependent claims, do not recite an improvement
to the functionality of a computer or other technology or technical field. See
MPEP § 2106.05(a).
MPEP §§ 2106.05(b) and (c)
The Bilski Machine-or-Transformation test (“MoT”)

We note the Supreme Court cautions that the MoT test is not the sole
test, but may provide a useful clue:
This Court’s precedents establish that the machine-or-
transformation test is a useful and important clue, an
investigative tool, for determining whether some claimed
inventions are processes under § 101. The machine-or-
transformation test is not the sole test for deciding whether an
invention is a patent-eligible “process.”

Bilski, 561 U.S. at 604 (emphasis added).
Here, Appellant advances no arguments that any of computer-
implemented method claims 1–32 are tied to a particular machine, or
transform an article to a different state or thing. See MPEP § 2106.05(c).

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MPEP § 2106.05(e) — Meaningful Claim Limitations8
The Examiner finds “The Internet and computer technology
implementation limitations are simply a field of use and does not add a
meaningful limit on the abstract idea.” Final Act. 27 (emphasis added).
Appellant does not advance further substantive, persuasive arguments
as to any particular “meaningful” claim limitations, such as those of the
types addressed under MPEP § 2106.05(e), that impose meaningful limits on
the judicial exception.
Appellant has not argued, nor do we find, that the additional generic
programmed computer (bolded in Table One supra) does more than
generally link the abstract idea (italicized in Table One) to a particular
technological environment (i.e., the generic recited “computer-implemented
method” and “programmed computer” — claim 1.
Accordingly, on this record, we conclude representative independent
claim 1 has no other argued meaningful limitations, as considered under
section 2106.05(e) of the MPEP, pursuant to the 2019 Memorandum.

8 See 2019 Memorandum, 84 Fed. Reg. 55, citing MPEP § 2106.05(e):
“[A]pply[ing] or us[ing] the judicial exception in some other meaningful
way beyond generally linking the use of the judicial exception to a particular
technological environment, such that the claim as a whole is more than a
drafting effort designed to monopolize the exception.” (Emphasis added).

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MPEP § 2106.05(f)
Merely including instructions to implement
an abstract idea on a computer, or
Merely using a computer as a tool
to perform an abstract idea

We conclude Appellant’s claimed invention merely implements the
abstract idea using instructions executed on generic computer components,
as depicted in bold type in Table One, and as supported in our reproduction
of pertinent portions of the Specification, e.g., at pages 18 and 19, supra.
Thus, we conclude Appellant’s claims merely use a programmed computer
as a tool to perform an abstract idea.

MPEP § 2106.05(g)
Adding insignificant extra-solution activity
to the judicial exception
As mapped in the right column of Table One, supra, we conclude that
representative independent claim 1 recites extra or post-solution activities
that courts have determined to be insufficient to transform judicially
excepted subject matter into a patent-eligible application. See MPEP
§ 2106.05(g); 84 Fed. Reg. at 55 n.31.

MPEP § 2106.05(h)
Generally linking the use of the judicial exception to a particular
technological environment or field of use

The Supreme Court guides: “the prohibition against patenting
abstract ideas ‘cannot be circumvented by attempting to limit the use of the
formula to a particular technological environment’ or [by] adding
‘insignificant postsolution activity.’” Bilski, 561 U.S. at 611–12, (quoting
Diehr, 450 U.S. at 191–92).
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Appellant argues:
the claim steps considered in a combination as a whole provide
an advantageous solution to a problem in the existing art and a
technological advance thereon resulting in an improved
computing procedure. Thus, it can be clearly seen the claims
pose no risk to pre-emption of ‘factor risk models’ generally
and the concerns of Alice Corp. are not implicated.
Appeal Br. 24 (emphasis added).
However, our reviewing court provides applicable guidance: “While
preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility.” Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
Nor do claims 1–32 on appeal present any other issues as set forth in
the 2019 Memorandum regarding a determination of whether the additional
generic elements integrate the judicial exception into a practical application.
See 2019 Memorandum, 84 Fed. Reg. at 55.
Thus, under Step 2A, Prong Two (MPEP §§ 2106.05(a)–(c) and (e)–
(h)), we conclude claims 1–32 do not integrate the judicial exception into
a practical application. Therefore, we proceed to Step 2B, The Inventive
Concept.
2019 Memorandum, Step 2B
The Inventive Concept
Under the 2019 Memorandum, 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 adds a specific limitation
beyond the judicial exception that is not “well-understood, routine,
conventional” in the field (see MPEP § 2106.05(d)); or, simply appends
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well-understood, routine, conventional activities previously known to the
industry, specified at a high level of generality, to the judicial exception.
Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018)
We note that Berkheimer was decided by the Federal Circuit on
February 8, 2018. On April 19, 2018, the PTO issued the Memorandum
titled: “Changes in Examination Procedure Pertaining to Subject Matter
Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP,
Inc.)” (hereinafter “Berkheimer Memorandum”).9 The Berkheimer
Memorandum provided specific requirements for an Examiner to support
with evidence any finding that claim elements (or a combination of elements)
are well-understood, routine, or conventional.
Under Step 2B, the Examiner finds, inter alia:
The additional steps only add to those abstract ideas using well-
understood and conventional functions, and the claims do not
show improved ways of, for example, an unconventional non-
routine method for collecting, analyzing data and displaying the
results that could then be pointed to as being “significantly
more” than the abstract ideas themselves. Moreover, [the]
Examiner was not able to identify any “unconventional” steps,
which, when considered in the ordered combination with the
other steps, could have transformed the nature of the abstract
idea previously identified. The instant application, therefore,
still appears to only implement the abstract ideas to the
particular technological environments using what is well-
understood, routine, and conventional in the related arts.
Final Act. 29 (emphasis added).

9 Available at https://www.uspto.gov/sites/default/files/documents/memo-
berkheimer-20180419.PDF.
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The Appeal Brief was filed on April 17, 2018, more than two months
after the Feb. 8, 2018 Berkheimer CAFC opinion. However, the Appeal
Brief is silent regarding any mention of Berkheimer.
In the Reply Brief, filed Sept. 11, 2018, Appellant cites to Berkheimer
and the “Berkheimer Memorandum.” Reply Br. 1–2. However, Appellant
makes no demand for Berkheimer evidence, such as the specific types of
factual evidence identified in the Berkheimer Memorandum. Arguments not
made are waived. See 37 C.F.R. § 41.37(c)(1)(iv).
Instead, Appellant argues that, in light of Berkheimer, the Examiner’s
statement that analysis of the prior art plays no role in the analysis for patent
eligibility “makes no sense as with respect to step 2 novelty and
nonobviousness would appear to always be relevant.” Reply Br. 3
(emphasis added).
However, any analysis based upon obviousness is not relevant to our
analysis for patent eligibility under 35 U.S.C. § 101. See Return Mail, Inc.
v. U.S. Postal Service, 868 F.3d 1350, 1370 (Fed. Cir. 2017). Although the
second step in the Alice/Mayo test is a search for an “inventive concept,” the
analysis is not directed to novelty or nonobviousness, but rather searches for
elements sufficient to ensure that the claimed invention is directed to more
than a patent ineligible concept, such as an abstract idea. See Alice, 573 U.S.
at 217–18. “Groundbreaking, innovative, or even brilliant discovery does
not by itself satisfy the § 101 inquiry.” Ass’n for Molecular Pathology v.
Myriad Genetics, Inc., 569 U.S. 576, 591 (2013); see also Diamond v.
Diehr, 450 U.S. 175, 188–89 (1981) (“The ‘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
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possibly patentable subject matter.”); Affinity Labs of Texas, LLC v.
DIRECTV, LLC, 838 F.3d 1253, 1263 n.3 (Fed. Cir. 2016) (noting that an
eligibility finding does not turn on the novelty of using a user-downloadable
application for the particular purpose recited in the claims). As discussed
above, an improved abstract idea is still an abstract idea. See Mayo, 566
U.S. at 90 (holding that a novel and nonobvious claim directed to a purely
abstract idea is, nonetheless patent-ineligible).
Further, regarding the use of the recited generic computer components
identified above in Table One, the Supreme Court has held “the mere
recitation of a generic computer cannot transform a patent-ineligible abstract
idea into a patent-eligible invention.” Alice, 573 U.S. at 223. Our reviewing
court provides additional guidance: See FairWarning, 839 F.3d at 1096
(“[T]he use of generic computer elements like a microprocessor or user
interface do not alone transform an otherwise abstract idea into patent-
eligible subject matter.”); OIP Techs, 788 F.3d at 1363 (claims reciting, inter
alia, sending messages over a network, gathering statistics, using a
computerized system to automatically determine an estimated outcome, and
presenting offers to potential customers found to merely recite “‘well-
understood, routine conventional activit[ies],’ either by requiring
conventional computer activities or routine data-gathering steps” (alteration
in original)).
This reasoning is applicable here. Therefore, on the record before us,
Appellant has not shown that the claims on appeal add a specific limitation
beyond the judicial exception that is not well-understood, routine, and
conventional, when the claim limitations are considered both individually
and as an ordered combination. See MPEP § 2106.05(d).
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CONCLUSION
In light of the foregoing, we conclude, under the Director’s 2019
Memorandum, that each of Appellant’s claims 1–32 considered as a whole,
is directed to a patent-ineligible abstract idea that is not integrated into a
practical application, and does not include an inventive concept.

DECISION SUMMARY
FINALITY AND RESPONSE
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). See 37
C.F.R. § 41.50(f).
AFFIRMED

Claims
Rejected
35 U.S.C. § Reference(s)Basis Affirmed Reversed
1–32 101 Eligibility 1–32