Katch, LLC

Patent Trials and Appeals Board

Apr 24, 2020

14485565 - (D) (P.T.A.B. Apr. 24, 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.
14/485,565 09/12/2014 Patrick Quigley 111346-8001.US01 2389
25096 7590 04/24/2020
PERKINS COIE LLP - SEA General
PATENT-SEA
P.O. BOX 1247
SEATTLE, WA 98111-1247
EXAMINER
SNIDER, SCOTT
ART UNIT PAPER NUMBER
3621
NOTIFICATION DATE DELIVERY MODE
04/24/2020 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):
patentprocurement@perkinscoie.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PATRICK QUIGLEY, QUANG NGUYEN, and
TODD FAUCHER1
Appeal 2019-001967
Application 14/485,565
Technology Center 3600
Before ERIC B. GRIMES, JOHN E. SCHNEIDER, and RYAN H. FLAX,
Administrative Patent Judges.
GRIMES, Administrative Patent Judge.
DECISION ON APPEAL
This is an appeal under 35 U.S.C. § 134(a) involving claims to a
method of charging for website advertising based on advertisers’ bids for
different modes of engaging with consumers, which have been rejected as
ineligible for patenting and as obvious. We have jurisdiction under
35 U.S.C. § 6(b).
We AFFIRM the rejection based on patent ineligibility.

1 Appellant identifies the real party in interest as QUINSTREET, INC.
Appeal Br. 3. We use the word Appellant to refer to “applicant” as defined
in 37 C.F.R. § 1.42(a).
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STATEMENT OF THE CASE
“In today’s digital world, advertisers compete to reach the vast
number of consumers that perform research online before purchasing goods
or services.” Spec. ¶ 2. “[V]arious marketplaces have emerged that allow
advertisers to bid for the opportunity to connect with those consumers.” Id.
“Typically, such marketplaces have employed an auction process.” Id.
“[E]xisting marketplaces have proven to be inefficient for advertisers. The
cost of advertising can often be expensive, and the quality of the referred
consumers poor.” Id.
The Specification discloses a
marketplace system [that] allows an advertiser to place a base
bid for engagement opportunities associated with each of the
different modes of engagement with a consumer (e.g., click,
call, chat, inquiry, or the like) within a particular vertical
market segment (e.g., post-secondary education, personal loans,
auto insurance, health insurance, home repair, TV, phone and
other digital services, etc.).
Spec. ¶ 19. “[T]he marketplace system [also] allows an advertiser to modify
each base bid with one or more enhanced bids. An enhanced bid is an
amount by which the advertiser is willing to increase or decrease their base
bid if a consumer satisfies one or more selected attributes.” Id. ¶ 20. For
example, an advertiser might be willing to pay more to engage consumers in
a certain geography, or consumers having a college degree. Id.
The disclosed system also “uses a performance index to adjust the
amount charged to the advertiser.” Spec. ¶ 35. “[A] performance index
attempts to estimate the present value of engagement opportunities provided
to the advertiser based on historical conversion information associated with
prior engagement opportunities that were provided by that publisher.” Id.
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“[T]he performance index is used to adjust the final bid to arrive at the
actual price to be paid by the advertiser for the corresponding engagement.
The adjustment is typically downward, thereby causing the amount charged
to more accurately reflect the true value of the engagement to the
advertiser.” Id.
Claims 1–27 are on appeal. Claim 1, reproduced below, is illustrative:
1. A method of operating a marketplace on a computing
system in which advertisers bid for different engagement modes
with consumers, the method comprising:
maintaining a plurality of performance indices, each
associated with one of a plurality of publishers, each
performance index comprised of a plurality of performance
scores, wherein each performance score is associated with a
different mode of engagement with a consumer;
receiving indications of interest to engage with
consumers from a plurality of advertisers, an indication of
interest to engage with a consumer comprising:
an indication of a vertical market segment in which
to provide advertisements to the consumer;
for each of multiple modes of engagement with the
consumer, an indication of a base bid amount that the
advertiser will pay to interact with the consumer via the
corresponding mode of engagement, where a mode of
engagement determines a manner in which the consumer
receives additional information pertaining to products or
services of the advertiser, subsequent to the consumer
interacting with an advertisement, the manner being
selected from the group consisting of a website, an email,
a chat session, or a voice call; and
an indication of one or more enhanced bid amounts
that are to be applied to adjust an advertiser’s base bid
amount if the consumer satisfies a corresponding
attribute;
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receiving indications from a website publisher, from the
plurality of publishers, of an opportunity to engage with
consumers, the opportunity to engage with consumers having
multiple modes of engagement,
comparing the received indications of interest from the
plurality of advertisers with the opportunity to engage with
consumers received from the website publisher and identifying
one or more advertisers for the website publisher based on
corresponding base and enhanced bid amounts of the identified
advertisers;
providing an indication to the website publisher of the
identified advertisers and two or more modes of engagement
available with each advertiser, the indication causing a display
by the website publisher of advertising content for each of the
identified advertisers and the two or more modes of
engagement available with each advertiser;
receiving an indication of an advertiser selected by a
consumer and a selected mode of engagement, selected from
the displayed modes of engagement corresponding to the
selected advertiser, made by the consumer to engage with the
advertiser;
selecting a performance score, from the performance
index associated with the website publisher, based on the
selected mode of engagement;
causing the consumer to be connected to the selected
advertiser through the selected mode of engagement; and
charging the selected advertiser for the consumer
engagement based on the base bid amount associated with the
selected engagement mode as adjusted by any applicable
enhanced bid amounts and the selected performance score.

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The claims stand rejected as follows:
Claims 1–27 under 35 U.S.C. § 101 as being directed to patent
ineligible subject matter (Final Action2 3);
Claims 1, 3, 5, 6, 8–12, 15, 17–24, 26, and 27 under 35 U.S.C. § 103
as obvious based on Ramer,3 Network Solutions,4 and Benson5 (Final Action
5);
Claims 2, 16, and 25 under 35 U.S.C. § 103 as obvious based on
Ramer, Network Solutions, Benson, and Performance Marketing6 (Final
Action 27);
Claim 4 under 35 U.S.C. § 103 as obvious based on Ramer, Network
Solutions, Benson, and Koopersmith7 (Final Action 28);
Claim 7 under 35 U.S.C. § 103 as obvious based on Ramer, Network
Solutions, Benson, and Tom8 (Final Action 29);
Claim 13 under 35 U.S.C. § 103 as obvious based on Ramer, Network
Solutions, Benson, and Wikipedia9 (Final Action 30); and

2 Office Action mailed August 1, 2017.
3 US 2009/0234711 A1, published Sept. 17, 2009.
4 What is Pay Per Action?, Wayback Machine accessed on Aug. 28, 2011,
accessible at http://web.archive.org/web/20110828114750/
http://www.networksolutions.com/support/what-is-pay-per-action.
5 US 8,346,607 B1, issued Jan. 1, 2013.
6 Performance Marketing, Wayback Machine accessed on Oct. 29, 2010,
accessible at http://web.archive.org/web/20101020004806/http://www.
adtelligentsia.com/index.php/main/program/performance_marketing.
7 US 2001/0042002 A2, published Nov. 15, 2001.
8 US 2009/0228920 A1, published Sept. 10, 2009.
9 Vertical Marketing, accessed on May 25, 2012, accessible at
http://en.wikipedia.org/w/index.php?title=Vertical_market&oldid=494377947.
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Claim 14 under 35 U.S.C. § 103 as obvious based on Ramer, Network
Solutions, Benson, and Zamani10 (Final Action 31).
OPINION
Eligibility
Claims 1–27 stand rejected under 35 U.S.C. § 101 as being “directed
to a judicial exception . . . without significantly more.” Final Action 3. The
Examiner finds that “[c]laim 1 is directed to the abstract idea of matching
advertising opportunities with advertisers and auctioning the advertisement
engagement opportunity.” Id.
The Examiner also finds that “[t]he claims do not include additional
elements that are sufficient to amount to significantly more than the judicial
exception” because “the additional limitations of operating a marketplace on
a computer, selecting an engagement mode from a list consisting of
‘website’, ‘email’, ‘chat session’ or ‘voice call’ and receiving indications
‘from a website publisher’ are an attempt to limit the use of the abstract idea
to a particular technological environment.” Id. at 4.
The Examiner also finds that “the claims require no more than a
generic device,” “[t]here is no indication that the combination of elements
improves the functioning of a computer or improves any other technology,”
and “[t]heir collective functions merely provide conventional computer
implementation.” Id. at 4–5. The Examiner concludes that “the additional
computer elements, which are recited at a high level of granularity, provide,
conventional computer functions that do not add meaningful limits to
practicing the abstract idea.” Id. at 3.

10 US 2009/0018888 A1, published Jan. 15, 2009.
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Appellant argues that “[t]he Examiner’s characterization of the claims
as merely ‘matching advertising opportunities with advertisers and
auctioning the advertisement engagement opportunity’ is improper,” Appeal
Br. 32, and “overlook[s] specific limitations directed to multiple engagement
modes and the use of a performance score to adjust charged amounts.” Id. at
34. Appellant argues that “the claimed system is so specific that it cannot be
said to preempt a fundamental, abstract concept.” Id. at 36.
Appellant also argues that
[a] method for auctioning engagement opportunities through
multiple modes of engagement, and facilitating an advertiser-
consumer connection through a selected engagement mode, is
not a “fundamental economic practice” on par with claims
directed to intermediated settlement, as was the case in Alice
. . . [or] hedging or protecting against risk, as in Bilski, and thus
not an attempt to claim “methods of organizing human
activity.”
Id. at 37.
Finally, Appellant argues that the “claims effect an improvement to a
technological field—in particular, the field of computer-based consumer
advertising and consumer engagement.” Id. at 40. Appellant argues that
[b]y providing a way for advertisers to tailor their engagement
bids based on how much they are willing to spend for different
engagement opportunities, and by enabling consumers to
connect to the advertiser through the engagement mode of their
choosing, the Appellant’s system improves the likelihood of
consumer engagement and the efficiency of advertisers’
advertising spending.
Id.
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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.
Id. 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 waterproof 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 (1854))); 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 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. (citation omitted)
(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. (alterations in original) (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 Section 101 Guidance
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101. See 2019 Revised
Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(“Revised Guidance”).11 “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.
Under the 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. 08.2017, Jan. 2018)) (“Step 2A, Prong Two”).12
Revised Guidance, 84 Fed. Reg. at 52–55.

11 In response to received public comments, the Office issued further
guidance on October 17, 2019, clarifying the 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).
12 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 Revised Guidance — Section III(A)(2), 84 Fed.
Reg. 54–55.
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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.
Revised Guidance, 84 Fed. Reg. at 52–56.
Revised Guidance Step 2(A), Prong 1
Following the Revised Guidance, we first consider whether the claims
recite a judicial exception. Claim 1 recites, among other steps, “receiving
indications of interest to engage with consumers from a plurality of
advertisers” (“an indication of interest” comprising “an indication of a
vertical market segment,” “a base bid amount” for each of multiple modes of
engagement, and an “enhanced bid amount” if a consumer satisfies a certain
attribute), “receiving indications from a website publisher . . . of an
opportunity to engage with consumers,” “comparing” the advertisers’
indications of interest with the publisher’s opportunity to engage with
consumers “based on corresponding base and enhanced bid amounts,”
“causing a display by the website publisher of advertising content,”
“receiving an indication” that a consumer has selected an advertiser and a
mode of engagement, “selecting a performance score,” “causing the
consumer to be connected to the selected advertiser through the selected
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mode of engagement,” and “charging the selected advertiser for the
consumer engagement.”
The Revised Guidance identifies “[c]ertain methods of organizing
human activity,” including “commercial or legal interactions (including
agreements in the form of contracts; legal obligations; advertising,
marketing or sales activities or behaviors; business relations)”—as abstract
ideas. 84 Fed. Reg. at 52 (emphasis added). See also Ultramercial, Inc. v.
Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014) (The “claims are indeed
directed to an abstract idea, which is . . . a method of using advertising as an
exchange or currency.”); OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d
1359, 1362–63 (Fed. Cir. 2015) (“[T]he claims are directed to the concept of
offer-based price optimization. . . . [T]hat the claims do not preempt all price
optimization or may be limited to price optimization in the e-commerce
setting do not make them any less abstract.”).
Here, the steps of receiving base and enhanced bids from advertisers,
identifying advertisers for a website publisher based on the bid amounts,
causing display of advertising content, and charging an advertiser for
consumer engagement based on the bid amounts and the performance score
are expressly directed to advertising and sales activity. See Spec. ¶ 14 (“The
system 100 allows advertisers 102 to reach consumers 103 by bidding in a
marketplace for opportunities to engage with consumers via one or more
publishers.”); ¶ 26 (“[T]he marketplace system . . . auctions the
opportunities to potential advertisers.”). Thus, the steps of claim 1 recite the
sale of advertising opportunities, which is a method of organizing human
activity within the categories of abstract ideas that have been identified by
the courts. We agree with the Examiner that claim 1 recites an abstract idea.
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Revised Guidance Step 2(A), Prong 2
Although claim 1 recites an abstract idea, it would still be patent-
eligible if “the claim as a whole integrates the recited judicial exception into
a practical application of the exception”; i.e., if the claim “appl[ies], rel[ies]
on, or use[s] the judicial exception in a manner that imposes a meaningful
limit on the judicial exception.” 84 Fed. Reg. at 54. The analysis of whether
the claim integrates the judicial exception into a practical application
includes “[i]dentifying whether there are any additional elements recited in
the claim beyond the judicial exception(s)” and “evaluating those additional
elements individually and in combination to determine whether they
integrate the exception into a practical application.” Id. at 54–55.
The exemplary considerations indicating that an additional element
may integrate an exception into a practical application include “[a]n
additional element [that] reflects an improvement in the functioning of a
computer, or an improvement to other technology or technical field.” Id. at
55. However, “[a]n additional element . . . [that] merely includes instructions
to implement an abstract idea on a computer, or merely uses a computer as a
tool to perform an abstract idea” is an indication that “a judicial exception
has not been integrated into a practical application.” Id.
Here, claim 1 states that the claimed method is operated “on a
computing system,” involves “a website publisher,” and provides computer-
based modes of engagement (“a website, an email, a chat session, or a voice
call”). However, claim 1 does not recite any specific physical requirements
for the computing system, the website, or the computer-based modes of
engagement. The claimed method therefore requires no more than a generic,
conventional computer system. The claim does not require any specific
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configuration of the recited computing system or its components that might
reflect an improvement in computer functioning.
The Specification confirms that Appellant’s invention is not in the
computing system used to perform the claimed method. For example, the
Specification states that “the marketplace system 100 may be implemented
on any computing system or device,” including “personal computers, server
computers, hand-held or laptop devices,” etc. Spec. ¶ 52. The Specification
states that “[s]uch computing systems or devices may include one or more
processors that execute software (in the form of program instructions) to
perform the functions described herein,” but no specific software is
described. See id.
We conclude that the method of claim 1 does not reflect an
improvement in the functioning of a computer, or an improvement to
another technical field. Rather, the generic computing system, website, and
computer-based modes of engagement recited in the claim merely
implement the recited advertising and sales activity on a computer. They
therefore do not integrate the recited judicial exception into a practical
application.
Claim 1 also recites a step of “maintaining a plurality of performance
indices, each associated with one of a plurality of publishers, each
performance index comprised of a plurality of performance scores, wherein
each performance score is associated with a different mode of engagement
with a consumer.” A “performance index” is “based on historical conversion
information associated with prior engagement opportunities that were
provided by [a] publisher.” Spec. ¶ 35. “In general, . . . the performance
index is a weighted average of the performance of the engagement across
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multiple metrics,” such as the click-through ratio, the inquiry conversion
percentage, and the sale conversion percent. Id. ¶ 41.
The Revised Guidance states that “examples in which a judicial
exception has not been integrated into a practical application” include “an
additional element [that] adds insignificant extra-solution activity to the
judicial exception.” 84 Fed. Reg. at 55. An example of such insignificant
extra-solution activity is “mere data gathering such as a step of obtaining
information about credit card transactions” (i.e., customer transaction data)
to analyze for detecting fraudulent activity. Id. at 55 n.31.
Here, the step of “maintaining a plurality of performance indices” in
the method of claim 1 is mere data gathering, because the performance index
is simply aggregated data regarding how engagement opportunities on a
particular website have performed in the past. Therefore, neither the
maintenance of the performance indices nor their use in determining the
amount charged to an advertiser for a given engagement opportunity
integrate the recited abstract idea into a practical application. See
Ultramercial, 772 F.3d at 716 (“[C]onsulting and updating an activity log
represent insignificant ‘data-gathering steps,’ CyberSource Corp. v. Retail
Decisions, Inc., 654 F.3d 1366, 1370 (Fed. Cir. 2011), and thus add nothing
of practical significance to the underlying abstract idea.”).
In summary, claim 1 recites an abstract idea and does not integrate it
into a practical application. Claim 1 is therefore directed to a judicial
exception to patentability.
Revised Guidance Step 2(B)
Finally, the Revised Guidance directs us to consider whether claim 1
includes “additional elements . . . [that] provide[] ‘significantly more’ than
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the recited judicial exception.” 84 Fed. Reg. at 56. The Revised Guidance
states that an additional element that “simply appends well-understood,
routine, conventional activities previously known in the industry, specified
at a high level of generality, to the judicial exception, . . . is indicative that
an inventive concept may not be present.” Id.
As discussed above, and aside from the steps that are expressly
directed to the sale of advertising opportunities, claim 1 recites data-
gathering steps (“maintaining a plurality of performance indices”) and a
generic computing system. With regard to the data-gathering steps, the
Revised Guidance requires reevaluating elements found to be insignificant
extra-solution activity under Step 2(A) to determine whether they are
“unconventional or otherwise more than what is well-understood, routine,
conventional activity in the field.” 84 Fed. Reg. at 56. For example,
when evaluating a claim reciting an abstract idea . . . and a
series of data gathering steps that collect a necessary input . . . ,
an examiner might consider the data gathering steps to be
insignificant extra-solution activity in revised Step 2A, and
therefore find that the judicial exception is not integrated into a
practical application. However, when the examiner reconsiders
the data gathering steps in Step 2B, the examiner could
determine that the combination of steps gather data in an
unconventional way and therefore include an “inventive
concept,” rendering the claim eligible at Step 2B.
Id. (footnote omitted).
Here, we do not find that Appellant claims or that the Specification
describes a specific, let alone unconventional, method of gathering data
regarding the performance of an engagement on particular websites. The
Specification states, for example, that
[t]he performance index will vary depending on the market
vertical [sic] and the amount/type of conversion information
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that is received. In general, however, the performance index is a
weighted average of the performance of the engagement across
multiple metrics. Representative metrics include, but are not
limited to, the click-through ratio (the number of times that
consumers click on a presented advertiser compared to the total
number of presentations of that advertiser), the inquiry
conversion percentage (the number of times that consumers
make an inquiry based on a presented advertiser compared to
the total number of presentations of that advertiser), and the
sale conversion percent (the number of times that consumers
complete a sale based on a presented advertiser compared to the
total number of presentations of that advertiser).
Spec. ¶ 41.
The Specification presents two equations that can be used to calculate
a performance index, id., but also states that “the disclosed performance
indexes equations are merely representative of the type of calculations that
may be used to calculate a performance index representing the quality of the
quality of [sic] engagements that was referred to an advertiser.” Id. ¶ 42.
Thus, the Specification does not disclose, and claim 1 is not limited
to, any specific, unconventional way of calculating performance indices.
More important, the Specification provides no description of how to gather
the data used to determine the metrics that can then be used to calculate a
performance index. The Specification therefore does not show that the
claimed method involves an unconventional way of gathering the data used
to calculate and maintain performance indices.
With regard to the computing system of claim 1, the claim itself does
not require any unconventional computer configuration or software, nor does
the Specification describe any unconventional computer implementation as
part of the claimed method. Thus, claim 1 requires using only a generic
computer system to carry out the claimed process, and “the mere recitation
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of a generic computer cannot transform a patent-ineligible abstract idea into
a patent-eligible invention.” Alice Corp. v. CLS Bank Int’l, 573 U.S. 208,
223 (2014).
In summary, the combination of elements recited in the method of
claim 1 does not amount to significantly more than the judicial exception
itself, and under 35 U.S.C. § 101 the claimed method is ineligible for
patenting.
Appellant’s Arguments
Appellant argues that the claims are not directed to an abstract idea,
and “[t]he Examiner’s characterization of the claims as merely ‘matching
advertising opportunities with advertisers and auctioning the advertisement
engagement opportunity’ is improper,” and an “oversimplification.” Appeal
Br. 32. Appellant argues that “the claims contain numerous limitations that
cause the claims to be narrower than the characterization proposed [by] the
Examiner” and the “very particularized claim scope constitutes more than
merely matching advertising opportunities with advertisers and auctioning
the advertisement engagement opportunity as characterized by the
Examiner.” Id. at 33.
This argument is not persuasive. It is true that claim 1 includes
limitations allowing an advertiser to bid different base amounts for reaching
consumers via different “engagement modes”—i.e., via website, email, chat
session, or phone call—and to also bid an “enhanced” amount for consumers
satisfying certain attributes. And claim 1 recites showing the advertiser’s
advertisement on a website, and charging the advertiser based on both its
bids and a “performance score” that reflects the past performance of ads on
that website.
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Even taken together, however, these limitations do not amount to
more than an abstract idea in the field of selling advertising spots;
specifically, the abstract idea of price optimization of opportunities for
directing advertising to certain consumers and certain response methods. See
OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1356, 1362–63 (Fed. Cir.
2015) (“Th[e] concept of ‘offer based pricing’ is similar to other
‘fundamental economic concepts’ found to be abstract ideas by the Supreme
Court and this court. And that the claims do not preempt all price
optimization or may be limited to price optimization in the e-commerce
setting does not make them any less abstract.”) (citations omitted). We
therefore disagree with Appellant’s position that
[the claimed] method for auctioning engagement opportunities
through multiple modes of engagement, and facilitating an
advertiser-consumer connection through a selected engagement
mode, is not a “fundamental economic practice” on par with
claims directed to intermediated settlement, as was the case in
Alice. Nor is such a method comparable to claims merely
directed to hedging or protecting against risk, as in Bilski and
thus not an attempt to claim “methods of organizing human
activity.”
Appeal Br. 37.
Appellant argues that “the claimed system is so specific that it cannot
be said to preempt a fundamental, abstract concept. . . . One can readily
match advertising opportunities with advertisers in accordance, for example,
with the technology described in Ramer without performing the claimed
operations.” Appeal Br. 36–37.
As the Examiner has pointed out, however, “[p]reemption is not a
stand-alone test for eligibility.” Ans. 7. See Ariosa Diagnostics, Inc. v.
Sequenom, Inc., 788 F3d 1371, 1379 (Fed. Cir. 2015):
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While preemption may signal patent ineligible subject matter,
the absence of complete preemption does not demonstrate
patent eligibility. . . . Where 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.
Appellant also argues that, even if the claims are directed to an
abstract principle, they “still recite patent-eligible subject matter as they
recite a novel combination of features beyond any abstract idea.” Appeal
Br. 38. Specifically, Appellant argues that, “[w]hen considered as an ordered
combination, the[] claim elements . . . transform the Appellant’s claims into
a composite and novel system that facilitates multi-engagement mode
advertising to consumers, thereby improving engagement with consumers
and engagement cost returns for advertisers.” Id. at 39. Appellant argues that
the claims thus “effect an improvement to a technological field—in
particular, the field of computer-based consumer advertising and consumer
engagement.” Id. at 40. Appellant argues that the claimed “system improves
the likelihood of consumer engagement and the efficiency of advertisers’
advertising spending.” Id.
This argument is also unpersuasive, because an improvement in
“consumer advertising and consumer engagement,” even if “computer-
based,” is not an improvement in a technological field, but rather an
improvement in a method of advertising or marketing. Appellant’s
Specification does not purport to improve the functioning of the computer
system used in the claimed method.
In fact, the Specification states that “the marketplace system 100 may
be implemented on any computing system or device.” Spec. ¶ 52. “Such
computing systems or devices may include one or more processors that
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execute software . . . to perform the functions described herein.” Id. And
“[s]oftware may include one or more program modules which include
routines, programs,” etc. Id. However, the Specification does not describe
any particular computer system, processor, or software for use in the claimed
method. “[T]he mere recitation of a generic computer cannot transform a
patent-ineligible abstract idea into a patent-eligible invention.” Alice, 573
U.S. at 223.
In summary, claim 1 is directed to an abstract idea and does not
include additional elements that amount to significantly more than the
abstract idea. We therefore affirm the rejection of claim 1 under 35 U.S.C.
§ 101. Claims 2–27 fall with claim 1 because they were not argued
separately. 37 C.F.R. § 41.37(c)(1)(iv).
Obviousness Based on Ramer, Network Solutions, and Benson
Claims 1, 3, 5, 6, 8–12, 15, 17–24, 26, and 27 stand rejected as
obvious based on Ramer, Network Solutions, and Benson. Final Action 5.
The Examiner finds that Ramer discloses most of the limitations of claim 1,
including “for each of multiple [advertising opportunities] with the
consumer, an indication of a base bid amount that the advertiser will pay to
interact with the consumer via the corresponding [advertising
opportunities].” Id. at 6 (alterations in original).
The Examiner finds that “Ramer does not appear to make explicit
maintaining performance indices for multiple modes of engagement for
multiple publishers. However, Benson teaches maintaining performance
estimates for multiple publishers, advertisers & users.” Id. at 8. The
Examiner also finds that Ramer “does not appear to specify presenting the
consumer with a choice of ‘mode of engagement,’” but “Network Solutions
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teaches [] exchanging a fee subsequent to viewing an advertisement based
upon the type of customer engagement employed.” Id. at 9. The Examiner
concludes that it would have been obvious to modify Ramer to include the
elements taught by Benson and Network Solutions. Id. at 8–9.
Appellant argues, among other things, that
the combination of Ramer, Network Solutions, and Benson fails
to disclose or suggest “receiving indications of interest to
engage with consumers from a plurality of advertisers . . .
comprising . . . for each of multiple modes of engagement with
the consumer, an indication of a base bid amount that the
advertiser will pay, where a mode of engagement determines a
manner in which the consumer receives additional information
pertaining to products or services of the advertiser,” as required
by each of claims 1, 15, 23, and 24.
Appeal Br. 19. Appellant argues that the
Examiner contends that Ramer teaches receiving . . . a base bid
amount the advertiser is willing to pay to interact with
consumers for each of multiple advertising opportunities. . . .
The Examiner correctly concedes, however, that Ramer does
not teach modes of engagement, and incorporates Network
Solutions to allegedly cure the shortcomings of Ramer.
Id.
Appellant argues that Network Solutions does not disclose the
disputed limitation:
Although Network Solutions describes ways that a consumer
can interact with an advertiser (e.g., an advertising click, a
phone call, an email) and also generally describes a charge to
the advertiser, it fails to describe the specific mechanism by
which the advertiser charge is determined or that the charge
may vary based on engagement mode. In particular, Network
Solutions does not describe receiving bid amounts from
advertisers for each of multiple modes of engagement.
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Id. at 19–20. “Therefore the combination of Ramer and Network Solutions
fails to describe receiving base bid amounts for each of multiple engagement
modes. . . . Benson fails to disclose different modes of engagement, and
therefore fails to cure the deficiencies of Ramer and Network Solutions.” Id.
at 20.
We agree with Appellant that the Examiner has not shown that the
cited references would have made obvious receiving from an advertiser, “for
each of multiple modes of engagement with the consumer, an indication of a
base bid amount that the advertiser will pay to interact with the consumer via
the corresponding mode of engagement,” as required by the claims.
The Examiner acknowledges that Ramer does not teach base bids
from an advertiser for different modes of engagement. See Final Action 6
(Ramer teaches base bids for “advertising opportunities”), 9 (Ramer does not
teach “presenting the consumer with a choice of ‘mode of engagement’”).
The Examiner relies on Network Solutions to remedy this deficiency. See id.
at 10; Ans. 3 (“Network Solutions teaches an advertiser paying per
interaction by a customer with the advertisement for each of multiple modes
of engagement with the customer.”). In responding to Appellant’s argument,
the Examiner states that “[i]t would have been obvious to one of ordinary
skill in the art at the time of the invention to replace the Pay Per Click fees
of Network Solutions with the auctioning of the advertisement opportunity
as taught by Ramer.” Ans. 3.
The Examiner, however, has not cited an evidentiary basis for
concluding that base bids specific for different engagement modes would
have been obvious based on Ramer and Network Solutions. The Examiner
cites Ramer’s disclosure of bidding for advertising opportunities, where “the
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maximum bid may be associated with simple matching criteria (e.g. such as
matching a keyword) or it may be associated with a more complicated
st[r]ing or weighted string of terms, events, or characteristics.” Ramer ¶ 842.
As the Examiner has acknowledged, however, this disclosure does not
address bids differing by mode of engagement.
The Examiner also cites the disclosure of Network Solutions, which
reads in its entirety:
Our Pay Per Click Advertising service is based on the Pay Per
Action model. Under this model, your advertising budget is
consumed by clicks and leads. In other words, you pay when
someone clicks on your ad in the search engines. You will also
incur cost when potential customers take action such as placing
a phone call to the number listed on your site, sending you an
e-mail, filling out an inquiry form or making a purchase in your
online store. You will be charged for actions only if you choose
to enable these additional lead types as part of your advertising
campaign.
Network Solutions 1.
Network Solutions discloses charging advertisers when customers
engage them through different engagement modes, but it does not describe
base charges for each of the different engagement modes. And, importantly,
it does not describe the advertiser specifying particular base bids for the
different engagement modes, as required by Appellant’s claims. The
Examiner has not pointed to any disclosure in Benson that makes up for the
deficiency in Ramer and Network Solutions.
Thus, the Examiner’s conclusion that this limitation would have been
obvious based on the cited references is not supported by a preponderance of
the evidence. We therefore reverse the rejection of claims 1, 3, 5, 6, 8–12,
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15, 17–24, 26, and 27 under 35 U.S.C. § 103 based on Ramer, Network
Solutions, and Benson.
Remaining Obviousness Rejections
Dependent claims 2, 4, 7, 13, 14, 16, and 25 stand rejected as obvious
based on Ramer, Network Solutions, and Benson, further combined with one
of Performance Marketing, Koopersmith, Tom, Wikipedia, or Zamani. For
each of these rejections, the Examiner relies on Ramer, Network Solutions,
and Benson for the limitations of the independent claims, and cites the other
references only for their disclosure of dependent claim limitations. See Final
Action 27–31.
As discussed above, however, the Examiner has not provided an
adequate evidentiary basis for concluding that Ramer, Network Solutions,
and Benson would have made obvious receiving from an advertiser, “for
each of multiple modes of engagement with the consumer, an indication of a
base bid amount that the advertiser will pay to interact with the consumer via
the corresponding mode of engagement,” as required by the claims. The
Examiner has not cited any disclosure of this limitation in Performance
Marketing, Koopersmith, Tom, Wikipedia, or Zamani. For the reasons
discussed above, therefore, we reverse the rejection of claims 2, 4, 7, 13, 14,
16, and 25 under 35 U.S.C. § 103 based on Ramer, Network Solutions, and
Benson, further combined with one of Performance Marketing,
Koopersmith, Tom, Wikipedia, or Zamani.
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DECISION SUMMARY
In summary:
Claims
Rejected
35 U.S.C. § Reference(s)/
Basis
Affirmed Reversed
1–27 101 Eligibility 1–27
1, 3, 5, 6, 8–
12, 15, 17–
24, 26, 27
103 Ramer,
Network
Solutions,
Benson
1, 3, 5, 6, 8–12,
15, 17–24, 26,
27
2, 16, 25 103 Ramer,
Network
Solutions,
Benson,
Performance
Marketing
2, 16, 25
4 103 Ramer,
Network
Solutions,
Benson,
Koopersmith
4
7 103 Ramer,
Network
Solutions,
Benson, Tom
7
13 103 Ramer,
Network
Solutions,
Benson,
Wikipedia
13
14 103 Ramer,
Network
Solutions,
Benson,
Zamani
14
Overall
Outcome
1–27
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TIME PERIOD FOR 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). See 37 C.F.R.
§ 1.136(a)(1)(iv).
AFFIRMED