Josiah David et al.

Patent Trials and Appeals Board

Dec 28, 2020

2020003739 (P.T.A.B. Dec. 28, 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.
14/923,439 10/27/2015 Josiah David 5100
7590 12/28/2020
Josiah David
3 Telluride Court, Unit 3
Vernon, NJ 07462
EXAMINER
HAMILTON, LALITA M
ART UNIT PAPER NUMBER
3691
MAIL DATE DELIVERY MODE
12/28/2020 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 JOSIAH DAVID and
DENIS JOACHIM
___________

Appeal 2020-003739
Application 14/923,439
Technology Center 3600
____________

Before CARL W. WHITEHEAD JR., JASON V. MORGAN and
ADAM J. PYONIN, Administrative Patent Judges.

WHITEHEAD JR., Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE1
Appellant2 is appealing the final rejection of claims 1–18 under
35 U.S.C. § 134(a). Appeal Brief 2. Claim 1 is independent. We have
jurisdiction under 35 U.S.C. § 6(b). We affirm.

1 Rather than reiterate Appellant’s arguments and the Examiner’s
determinations, we refer to the Appeal Brief (filed November 4, 2019), the
Reply Brief (filed April 20, 2020), the Final Action (mailed March 19, 2019)
and the Answer (mailed February 19, 2020), for the respective details.
2 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42(a). Appellant identifies Josiah David as the real party in
interest. Appeal Brief 2.
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Introduction
According to Appellant, the claimed subject matter “provides a loan
made to an individual into an account at the lending bank, under contract
that the owner of the deposit account will leave the principal amount in
the account at the lending bank unless authorized to do otherwise by the
lending bank.” Abstract.
Representative Claim3
Claim 1 is reproduced below for reference (bracketed step lettering
added):
1) A method for a self liquidating loan from a lending bank,
[a] wherein the lending bank makes a loan to at least one of A) an
individual and B) an organization, [b] wherein the at least one of A)
an individual and B) an organization enters into a contract with the
bank guaranteeing that the principal amount of the loan will not be
moved from the lending bank without consent from the lending bank,
[c] wherein the amount of the loan is kept by the lending bank in at
least one of 1) computer readable medium on servers kept by the
lending bank institution for maintaining account balances, and 2)
physical instruments of monetary value.

3 We select independent claim 1 as the representative claim for this rejection.
See 37 C.F.R. § 41.37(c)(1)(iv).
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References
Name4 References Date
Pilzer US 2008/0281641 A1 November 13, 2008
Cassano US 2009/0018953 A1 January 15, 2009

Rejections on Appeal
Claims 1–18 stand rejected under 35 U.S.C. § 101 as being directed to
a judicial exception without significantly more. Final Action 6–8.
Claims 1–7, 10, 11 and 13–16 stand rejected under 35 U.S.C.
§ 102(a)(1) as being anticipated by Cassano. Final Action 8–11.
Claims 8, 9, 12, 17 and 18 stand rejected under 35 U.S.C. § 103 as
being unpatentable over Cassano and Pilzer. Final Action 11–13.

USPTO Section 101 Guidance
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101. 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (January 7, 2019)
(“2019 Revised Guidance”).5 “All USPTO personnel are, as a matter of
internal agency management, expected to follow the guidance.” Id. at 51;
see also October 2019 Update at 1.

4 All reference citations are to the first named inventor only.
5 In response to received public comments, the Office issued further
guidance on October 17, 2019, clarifying the 2019 Revised Guidance.
USPTO, October 2019 Update: Subject Matter Eligibility (the “October
2019 Update”) (available at https://www.uspto.gov/sites/default/files/
documents/peg_oct_2019_update.pdf).
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Under the 2019 Revised Guidance and the October 2019 Update, we
first look to 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) (“Step 2A, Prong One”); and
(2) additional elements that integrate the judicial exception into
a practical application (see MPEP § 2106.05(a)–(c), (e)–(h) (9th
ed. Rev. 10.2019, June 2020)) (“Step 2A, Prong Two”).6
2019 Revised Guidance at 52–55.
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then look, under
Step 2B, 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.
2019 Revised Guidance at 52–56.

ANALYSIS
35 U.S.C. § 101 Rejection
The Examiner determines claims 1–18 are patent ineligible under
35 U.S.C. § 101. See Final Action 6–8; Alice, 573 U.S. at 217 (describing

6 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 Revised Guidance at 54–55.
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the two-step framework “for distinguishing patents that claim laws of nature,
natural phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts”).
We are not persuaded the Examiner’s rejection is in error. Unless
otherwise indicated, we adopt the Examiner’s findings and conclusions as
our own. We add the following primarily for emphasis and clarification
with respect to the Revised Guidance.

Step 2A—Prongs 1 and 2 identified in the 2019 Revised Guidance
Prong One
The Examiner determines, “Claim 1 falls into the category of a
method of organizing human activity (fundamental economic practice). The
claim is directed to a judicial exception to an abstract idea.” Answer 4.
The Specification discloses:
The self liquidating loan is preferably carried out by the
processors on servers 5 held by the lending bank 1, and recorded
on the computer readable medium of the servers. These secure
servers 5 of the lending bank 1 are used to track and move the
funds held by the lending bank 1, and to link the funds to
accounts and account owners 2.
Specification ¶ 13; see Figure 1.
Claim 1 recites a method for a self liquidating loan from a
lending bank.7 Claim 1 further recites the lending bank makes a loan

7 We note claim 1, although reciting a “method for a . . . loan,” does not
recite any positive method steps. In the event of further prosecution, the
Examiner may wish to determine whether the claim is indefinite. See, e.g.,
MPEP § 2173.05(q) (“Attempts to claim a process without setting forth any
steps involved in the process generally raises an issue of indefiniteness.”).
Solely for the purpose of explaining our analysis herein, we treat the claim
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and the borrower enters into a contract with the bank guaranteeing
that the principal of the loan will not be moved for the bank without
the bank’s consent in limitations [a], [b]. Claim 1 also recites the
amount of the loan is kept by the bank for maintaining account
balances in limitation [c].
These claim limitations comprise fundamental economic principles or
practices (including hedging, insurance, mitigating risk) and thus, the claim
recites the judicial exceptions of “[c]ertain methods of organizing human
activity.” 2019 Revised Guidance, Section I (Groupings of Abstract Ideas).
Further, our reviewing court has found claims to be directed to
judicial exceptions when they recited similar subject matter. See Alice, 573
U.S. at 219–20 (concluding that use of a third party to mediate settlement
risk is a “fundamental economic practice” and thus an abstract idea); id.
(describing the concept of risk hedging identified as an abstract idea in Bilski
as “a method of organizing human activity”); Inventor Holdings, LLC v. Bed
Bath & Beyond, Inc., 876 F.3d 1372, 1378–79 (Fed. Cir. 2017) (holding that
concept of “local processing of payments for remotely purchased goods” is a
“fundamental economic practice, which Alice made clear is, without more,
outside the patent system”); OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d
1359, 1362–63 (Fed. Cir. 2015) (concluding that claimed concept of “offer-
based price optimization” is an abstract idea “similar to other ‘fundamental
economic concepts’ found to be abstract ideas by the Supreme Court and

limitations as reciting steps involved in the method. Further, the Examiner
may wish to determine whether the dependent claims, each directed to a
“self liquidating loan,” comply with the requirement that a claim recites any
of a process, machine, manufacture, or composition of matter.
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this court”); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir.
2014) (holding that concept of “creating a contractual relationship—a
‘transaction performance guaranty’” is an abstract idea).
Therefore, we conclude the claims recite a judicial exception pursuant
to Step 2A, Prong One, of the 2019 Revised Guidance.

Prong Two
Under Prong Two of the 2019 Revised Guidance, we must determine
“whether the claim as a whole integrates the recited judicial exception into a
practical application of the exception.” 2019 Revised Guidance, Section
III(A)(2). We note that a “claim that integrates a judicial exception into a
practical application will apply, rely on, or use the judicial exception in a
manner that imposes a meaningful limit on the judicial exception, such that
the claim is more than a drafting effort designed to monopolize the judicial
exception.” 2019 Revised Guidance, Section III(A)(2).
Appellant argues:
[T]he Answer fails to recognize that software-based innovations,
such as those at issue in this matter can make non-abstract
improvements to computer technology and be deemed patent-
eligible subject matter at step 1 of the Mayo/Alice test. Finjan,
Inc. v. Blue Coat Sys., 879 F.3d 1299, 1304 (Fed. Cir. 2018);
Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1258
(Fed. Cir. 2017); Enfish, LLC v. Microsoft Corp., 822 F.3d 1327,
1335 (Fed. Cir. 2016).
Reply Brief 2.
We find Appellant’s claims are distinguished from those claims that
our reviewing court has found to be patent eligible by virtue of reciting
technological improvements to a computer system because Appellant’s
claims merely employ a computer readable medium on servers to implement
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the judicial exception wherein there is no improvement to the servers. See,
e.g., Answer 3, 4; DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245,
1249, 1257 (Fed. Cir. 2014) (holding that claims reciting computer processor
for serving “composite web page” were patent eligible because “the claimed
solution is necessarily rooted in computer technology in order to overcome a
problem specifically arising in the realm of computer networks”); Visual
Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1259 (Fed. Cir. 2017)
(holding that claims directed to “an improved computer memory system”
having many benefits were patent eligible); see Enfish, LLC v. Microsoft
Corp., 822 F.3d 1327, 1335–36 (Fed. Cir. 2016) (distinguishing between
“claims are directed to an improvement to computer functionality versus
being directed to an abstract idea” or whether “the focus of the claims is on
the specific asserted improvement in computer capabilities . . . or, instead,
on a process that qualifies as an ‘abstract idea’ for which computers are
invoked merely as a tool”); see also Alice, 573 U.S. at 222 (“In holding that
the process was patent ineligible, we rejected the argument that
‘implement[ing] a principle in some specific fashion’ will ‘automatically
fal[l] within the patentable subject matter of § 101.’” (alterations in original)
(quoting Parker v. Flook, 437 U.S. at 593).
Appellant contends, “Here, the claims are directed to a novel lending
and securitization process that includes the maintenance of account balances
on servers or physical instruments of monetary value. The claimed self-
liquidating loan process is novel and is a practical application that renders
the present application patent eligible.” Appeal Brief 9.
As the Federal Circuit has explained, a “claim for a new abstract idea
is still an abstract idea.” Synopsis, Inc. v. Mentor Graphics Corp., 839 F.3d
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1138, 1151 (Fed. Cir. 2016). Even assuming the technique claimed was
“[g]roundbreaking, innovative, or even brilliant,” that would not be enough
for the claimed abstract idea to be patent eligible. See Ass’n for Molecular
Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013).
We find claim 1 does not recite any improvement to the claimed
computer system; instead claim 1 only uses the computer system to manage
account balances for lending purposes. See Specification ¶ 13.
Additionally, we detect no additional element (or combination of elements)
recited in Appellant’s representative claim 1 that integrates the judicial
exception into a practical application. See 2019 Revised Guidance, Section
III(A)(2). For example, Appellant’s claimed additional elements (e.g.,
computer readable medium on servers) do not: (1) improve the functioning
of a computer or other technology; (2) is not applied with any particular
machine (except for generic devices); (3) does not effect a transformation of
a particular article to a different state; and (4) is not applied in any
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(a)–(c), (e)–(h).
Accordingly, we determine the claim does not integrate the recited
judicial exception into a practical application. See 2019 Revised Guidance,
Section III(A)(2).

Step 2B identified in the 2019 Revised Guidance
In Step 2B, we consider whether an additional or combination of
elements, “[a]dds a specific limitation or combination of limitations that are
not well-understood, routine, conventional activity in the field, which is
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indicative that an inventive concept may be present” or “simply appends
well-understood, routine, conventional activities previously known to the
industry, specified at a high level of generality, to the judicial exception,
which is indicative that an inventive concept may not be present.”
2019 Revised Guidance at 56.
Appellant argues:
The final Office Action presents no factual evidence that would
support a determination that the claimed subject matter involves
the performance of well-understood, routine and conventional
activities previously known to the industry. Instead, the final
Office Action merely makes the conclusory assertions that
“[c]laim(s) 1–18 are directed to the abstract idea of self
liquidating loans.” Such a conclusory and unevidenced assertion,
without supporting facts, does not support a factual conclusion
that the claimed subject matter involves the performance of
well-understood, routine and conventional activities previously
known to the industry.
Appeal Brief 8.
The 2019 Revised Guidance states:
In accordance with existing guidance, an examiner’s
conclusion that an additional element (or combination of
elements) is well understood, routine, conventional activity must
be supported with a factual determination. For more information
concerning evaluation of well-understood, routine, conventional
activity, see MPEP 2106.05(d), as modified by the USPTO
Berkheimer Memorandum.[8]
2019 Revised Guidance at 56 n.36 (Section III(B)) (emphasis added).

8 USPTO Commissioner for Patents Memorandum dated April 19, 2018,
“Changes in Examination Procedure Pertaining to Subject Matter Eligibility,
Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.)”
available at https://www.uspto.gov/sites/default/files/documents/memo-
berkheimer-20180419.PDF.

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The Berkheimer Memorandum Section III(A) states when formulating
rejections, “[i]n a step 2B analysis, an additional element (or combination of
elements) is not well-understood, routine or conventional unless the
examiner finds, and expressly supports a rejection in writing.” Berkheimer
Memorandum at 3. The Berkheimer Memorandum provides four criteria for
the Examiner to utilize to provide support for the additional elements to be
considered to be well-understood, routine or conventional.9
The Examiner finds:
The steps are carried out using a computer readable medium,
which can be any computer, and thus, it is a general purpose
computer carrying out the steps of claim. (See Spec. ¶ [9]) (“The
money of the principal amount 4 of the loan is transferred and
stored either on the non-transitory computer readable medium of
the servers 5 used by the lending bank 1 institution, or in physical
monetary or value holding instruments 5 held by the lending
bank 1.”).
Answer 3, 4; see Final Action 7, 8.
Accordingly, the Examiner supports the determination by citing to
Appellant’s Specification. We do not find Appellant’s argument persuasive
because, in determining if the additional elements (or combination of
additional elements) represent well-understood, routine, conventional

9 Berkheimer Memorandum at 3–4 (Section III(A)) (“1. A citation to an
express statement in the specification or to a statement made by an applicant
during prosecution that demonstrates the well-understood, routine,
conventional nature of the additional element(s). . . . 2. A citation to one or
more of the court decisions discussed in MPEP § 2106.05(d)(II) as noting
the well-understood, routine, conventional nature of the additional
element(s). 3. A citation to a publication that demonstrates the well-
understood, routine, conventional nature of the additional element(s). . . .
4. A statement that the examiner is taking official notice of the well-
understood, routine, conventional nature of the additional element(s).”).
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activity, the Examiner supported the determination based upon a factual
determination as specified in the Berkheimer Memorandum. See
Berkheimer Memorandum at 3–4 (Section III(A)(1)).
Further in Bascom, our reviewing court found that while the claims of
the patent were directed to a judicial exception, the patentee alleged an
“inventive concept can be found in the ordered combination of claim
limitations that transform the abstract idea of filtering content into a
particular, practical application of that abstract idea.” Bascom Global
Internet Services, Inc., v. AT&T Mobility LLC, 827 F.3d 1341, 1352 (Fed.
Cir. 2016). In particular, the patent in Bascom claimed “a technology-based
solution (not an abstract-idea-based solution implemented with generic
technical components in a conventional way) to filter content on the Internet
that overcomes existing problems with other Internet filtering systems.”
Bascom at 1351.
Claim 1 is distinguishable, as it recites an abstract-idea-based
solution, that is, a method for lending money with generic technical
components (e.g., computer readable medium servers), in a conventional
way. See generally Specification. Therefore, we are not persuaded that
ordered combination of limitations in representative claim 1 provides an
inventive concept, and we find the claims simply append a well-understood,
routine and conventional activity to the judicial exception. See 2019
Revised Guidance at 56.
Accordingly, we conclude claims 1–18 are directed to fundamental
economic principles or practices (including hedging, insurance, mitigating
risk) and thus, the claim recites the judicial exception of “[c]ertain methods
of organizing human activity” and further, the claims recite the judicial
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exception while failing to recite limitations that amount to significantly more
than the abstract idea itself. See 2019 Revised Guidance, Section I
(Groupings of Abstract Ideas). Therefore, we sustain the Examiner’s § 101
rejection of claims 1–18.
35 U.S.C. § 102 Rejection
Appellant contends, “Notwithstanding the assertions of the final
Office Action, the applied portions of Cassano teach a method where an
individual ‘gives a principal’ to a ‘provider’ (e.g., a bank) that is used
as collateral for a line of credit from which the individual can take periodic
disbursements.” Appeal Brief 10 (citing Cassano ¶¶ 12, 13, 40). Appellant
argues, “There is no evidence that Cassano teaches [a] ‘self liquidating loan’
or any ‘bank guaranteeing that the principal amount of the loan will not be
moved from the lending bank without consent from the lending bank.’ Thus,
the process of Cassano is different from the claimed subject matter.” Appeal
Brief 11.
The Examiner determines:
Cassano describes that a loan agreement is created using
collateral. The collateral is held by the bank and cannot be moved
without permission. This is similar to the Appellant’s
specification, which describes, “the principal amount of the loan
is retained in the lending bank[.]” This allows the bank to retain
liquidity in the amount of most of the principal amount. The loan
is governed by a third party, in the form of a contract,
organization or person. The third party or contract prevents the
owner from accessing the funds in the deposit account 6 without
consent of the lending bank (para.10).
Answer 7.
Appellant argues, “In attempting to support the improperly evidenced
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anticipation rejection, after presenting some somewhat convoluted
reasoning, the Answer concludes (emphasis added), ‘This is similar to the
Appellant’s specification, which describes, ‘the principal amount of the loan
is retained in the lending bank.’’” Reply Brief 4. Appellant contends,
“There is simply no evidence that Cassano teaches and ‘self liquidating loan’
or any ‘bank guaranteeing that the principal amount of the loan will not be
moved from the lending bank without consent from the lending bank.’ Thus,
the process of Cassano is different from the claimed subject matter.” Reply
Brief 4.
We find Appellant’s argument that Cassano’s process is different
from the claimed invention to be persuasive of Examiner error. “‘For a prior
art reference to anticipate in terms of 35 U.S.C. § 102, every element of the
claimed invention must be identically shown in a single reference.’” In re
Bond, 910 F.2d 831, 832 (Fed. Cir. 1990) (quoting Diversitech Corp. v.
Century Steps, Inc., 850 F.2d 675, 677 (Fed. Cir. 1988)). The Examiner
determines that Cassano teaches the “collateral is held by the bank and
cannot be moved without permission” and “[t]his is similar to the
Appellant’s specification, which describes, ‘the principal amount of the loan
is retained in the lending bank’” (Answer 7); however, claim 1 requires “an
organization enters into a contract with the bank guaranteeing that the
principal amount of the loan will not be moved from the lending bank
without consent from the lending bank.” There is no evidence that Cassano
teaches the disputed claim limitation and having a teaching that is similar to
Appellant’s Specification is not enough to establish anticipation. See Bond,
910 F.2d at 832. Accordingly, we reverse the Examiner’s anticipation
rejection of claims 1–7, 10, 11 and 13–16.
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35 U.S.C. § 103 Rejection
We reverse the Examiner’s obviousness rejection of claims 8, 9, 12,
17 and 18 because Pilzer does not cure Cassano’s deficiency. See Final
Action 12–13. Further, even if Pilzer addressed the deficiency of Cassano,
Pilzer was not used to address independent claim 1 in the anticipation
rejection. See Final Action 9.
CONCLUSION
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1–18 101 Eligibility 1–18
1–7, 10, 11,
13–16
102 Cassano 1–7, 10,
11, 13–16
8, 9, 12, 17,
18
103 Cassano, Pilzer 8, 9, 12,
17, 18
Overall
Conclusion
1–18

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). See 37 C.F.R.
§ 1.136(a)(1)(v).

AFFIRMED