Medlmpact Healthcare Systems, Inc.

Patent Trials and Appeals Board

Jul 2, 2020

2020001894 (P.T.A.B. Jul. 2, 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.
14/985,931 12/31/2015 Paul M. Momita 117781-003CT1 8219
27189 7590 07/02/2020
PROCOPIO, CORY, HARGREAVES & SAVITCH LLP
525 B STREET
SUITE 2200
SAN DIEGO, CA 92101
EXAMINER
TOMASZEWSKI, MICHAEL
ART UNIT PAPER NUMBER
3686
NOTIFICATION DATE DELIVERY MODE
07/02/2020 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):
PTONotifications@procopio.com
docketing@procopio.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PAUL M. MOMITA
Appeal 2020-001894
Application 14/985,931
Technology Center 3600
Before ST. JOHN COURTENAY III, LARRY J. HUME, and
PHILLIP A. BENNETT, Administrative Patent Judges.
BENNETT, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1–3, 8–11, 16, and 17. We have
jurisdiction under 35 U.S.C. § 6(b).
We REVERSE and ENTER A NEW GROUND OF REJECTION
pursuant to our authority under 37 C.F.R. § 41.50(b).

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42(a). Appellant identifies the real party in interest as
MedImpact Healthcare Systems, Inc. Appeal Br. 2.
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CLAIMED SUBJECT MATTER
The claims relate to “prescription drug benefits programs, and, more
particularly, to proactively identifying impacts, recommendations, and/or
optimizations related to the modification of a drug formulary.” Spec. ¶ 2.
Claim 1, reproduced below, is illustrative of the claimed subject matter:
1. A computer-implemented method for identifying impacts
of a proposed modification to a formulary, the method
comprising, by at least one hardware processor:
receiving a proposed modification to a formulary from a
user, wherein the formulary comprises a plurality of drug entries,
arranged in two or more tiers, and one or more utilization
management rules;
in response to receiving the proposed modification to the
formulary,
accessing a plurality of data sources, wherein the plurality
of data sources comprise rebate information, member
information, and marketplace information,
determining an impact of the proposed modification to the
formulary based on the plurality of data sources, wherein the
impact comprises an increase or decrease in a rebate amount for
one or more of the plurality of drug entries based on the rebate
information, a number of members affected by the proposed
modification based on the member information, and a predicted
shift in market share resulting from the proposed modification
based on the marketplace information;
automatically identifying one or more alternative
modifications to the formulary that achieve a same or similar
objective as the proposed modification with less impact than the
proposed modification, and
providing the impact of the proposed modification to a
user, along with the one or more alternative modifications, prior
to implementation of the proposed modification;
receiving either an approval or disapproval of at least one
modification to the formulary, from among the proposed
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modification and one or more alternative modifications, from the
user;
when an approval of at least one modification is received
from the user, making the approved at least one modification to
the formulary, and initiating a communication to each of a
plurality of members of a prescription plan that have been
affected by the approved at least one modification to the
formulary; and
adjudicating at least one claim using the modified
formulary by receiving a request for a claim adjudication
associated with a drug from a pharmacy system over at least one
network,
determining a response to the request based on the
modified formulary, wherein the response comprises either a
denial or an approval, and
sending the response to the pharmacy system over the at
least one network.
Appeal Br. A-1, 2 (Claims Appendix).
REJECTION
Claims 1–3, 8–11, 16 and 17 stand rejected under 35 U.S.C. § 101 as
being directed to ineligible subject matter. Final Act. 2–5.
ANALYSIS
Standard for Patent Eligibility
In issues involving subject matter eligibility, our inquiry focuses on
whether the claims satisfy the two-step test set forth by the Supreme Court in
Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014). The Court
instructs us to “first determine whether the claims at issue are directed to a
patent-ineligible concept,” id. at 218, and, in this case, the inquiry centers on
whether the claims are directed to an abstract idea. If the initial threshold is
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met, we then move to the second step, in which we “consider the elements of
each claim both individually and ‘as an ordered combination’ to determine
whether the additional elements ‘transform the nature of the claim’ into a
patent-eligible application.” Id. at 217–18 (quoting Mayo Collaborative
Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 79, 78 (2012)). The Court
describes the second step as a search for “an ‘inventive concept’—i.e., an
element or combination of elements that is ‘sufficient to ensure that the
patent in practice amounts to significantly more than a patent upon the
[ineligible concept] itself.’” Id. (quoting Mayo, 566 U.S. at 72–73).
The USPTO has published revised guidance on the application of
§ 101 consistent with Alice and subsequent Federal Circuit decisions.
USPTO, 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed.
Reg. 50 (Jan. 7, 2019) (“Guidance”). Under the Guidance, 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) (referred to Step 2A, prong 1 in
the Guidance); and
(2) additional elements that integrate the judicial exception into
a practical application (see MPEP § 2106.05(a)–(c), (e)–(h))
(referred to Step 2A, prong 2 in the Guidance).
See Guidance, 84 Fed. Reg. 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 move to Step 2B of the Guidance. There, we look to
whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is not “well-understood, routine, conventional” in the field (see
MPEP § 2106.05(d)); or
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(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 Guidance, 84 Fed. Reg. at 56.
Examiner’s Findings and Conclusion
The Examiner rejects claim 1 as being directed to a judicial exception
without significantly more under § 101. Final Act. 2–5. The Examiner
specifically finds:
These limitations correspond to concepts identified as abstract
ideas by the courts, such as ‘an idea of itself’ in Alice. For
example, the claims are similar to COLLECTING
INFORMATION, ANALYZING IT, AND DISPLAYING
CERTAIN RESULTS OF THE COLLECTION AND
ANALYSIS, as identified in the Electric Power Group court
decision, because the claims define collecting information (e.g.,
proposed modifications to formularies), analyzing it (e.g.,
determining an impact, identifying alternatives), displaying
certain results (e.g., approvals or disapprovals, impacts,
communications).
Final Act. 4. The Examiner further determines:
[The claims] as a whole and in combination with one another, do
not include additional elements that are sufficient to amount to
significantly more than the judicial exception because the
additional elements or combination of elements in the claims,
other than the abstract idea per se, amount to no more than a
recitation of (A) a generic computer structure(s) that serves to
perform generic computer functions that serve to merely link the
abstract idea to a particular technological environment (i.e.,
computers); and/or (B) functions that are well-understood,
routine, and conventional activities previously known to the
pertinent industry.
Id. The Examiner specifically determines:
[I]ndependent claims 1, 9, and 16 include “one or more
limitations that correspond to an abstract idea including
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mathematical concepts, mental processes and/or certain methods
of organizing human activity. For example, independent claim
1, and similarly independent claims 9 and 16, recite ‘determining
a response to the request based on the modified formulary,
wherein the response comprises either a denial or an approval’
which can be a mental process because this limitation[] can be
performed in the human mind; and recite certain methods of
organizing human activity (e.g., formulary modification and
claim adjudication management).
Ans. 4. However, the Examiner does not analyze the remaining limitations.
See generally, Final Act., Ans.
Appellant’s Contentions
Appellant argues the Examiner has not specifically addressed each of
the limitations in the claims. Appeal Br. 7. Appellant specifically argues
“With respect to the first prong of step one, the Examiner has identified a
single limitation as falling within the three enumerated subject matter
groupings of abstract ideas.” Reply Br. 2.
Based upon our review of the record, we are persuaded by Appellant
that the Examiner has not provided sufficient analysis to explain why claim 1
is directed to patent-ineligible subject matter. See Final Act. 2–5; Ans. 4–
5. Although the Examiner’s Final Action was mailed on July 27, 2018,
before the issuance of the Guidance, the Answer (mailed Nov. 14, 2019) did
have the benefit of the Jan. 7, 2019 Guidance. The Guidance instructs us to
first determine whether any judicial exception to patent eligibility is recited
in the claim, and then to consider the remaining limitations individually and
as an ordered combination to determine whether they integrate the abstract
idea into a practical application. Here, the Examiner identifies only a single
limitation as reciting an abstract concept, but fails to consider the claim(s) as
a whole, and analyze the remaining claim limitations in the manner required
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by the Guidance. Accordingly, we are constrained on this record to reverse
the Examiner’s rejection because the Examiner summarily concludes the
limitations of claim 1 are directed to an abstract idea without applying the
Guidance to each of the limitations of claim 1 so as to consider the claim(s)
as a whole.
NEW GROUND OF REJECTION
We newly reject claims 1, 3, 8, 11, 16, and 17 under 35 U.S.C. § 101
as being directed to patent-ineligible subject matter as set forth below.
Step 1 – Statutory Category
Claim 1, as a method claim, recites one of the enumerated categories
of eligible subject matter in 35 U.S.C. § 101. Therefore, the issue before us
is whether it is directed to a judicial exception without significantly more.
Step 2A, Prong 1: Does the Claim Recite a Judicial Exception?
We evaluate, de novo, whether claim 1 recites an abstract idea based
upon the Revised Guidance.
In TABLE 1 below, we identify in italics the specific claim
limitations in claim 1 that we conclude recite an abstract idea. We
additionally identify in bold the additional (non-abstract) claim limitations
that are generic computer components and techniques, and underline
limitations representing extra or post-solution activity:
TABLE 1
Independent Claim 1 Revised Guidance
A computer-implemented
method for identifying impacts
of a proposed modification to a
A method is a statutory subject matter
class. See 35 U.S.C. § 101.

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Independent Claim 1 Revised Guidance
formulary, the method
comprising,
by at least one hardware
processor:

As claimed, a processor is a generic
computer component.
[L1] receiving a proposed
modification to a formulary
from a user, wherein the
formulary comprises a plurality
of drug entries, arranged in two
or more tiers, and one or more
utilization management rules
“[R]eceiving a proposed modification to
a formulary from a user,” is i.e.,
receiving and processing information, is
merely insignificant extra-solution
activity that does not add significantly
more to the abstract idea to render the
claimed invention patent-eligible.
Guidance, 84 Fed. Reg. at 55 n.31.
[L2] in response to receiving
the proposed modification to
the formulary, accessing a
plurality of data sources,
wherein the plurality of data
sources comprise rebate
information, member
information, and marketplace
information
“Accessing a plurality of data sources” is
merely insignificant extra-solution
activity (i.e., data gathering) that does
not add significantly more to the abstract
idea to render the claimed invention
patent-eligible. Guidance, 84 Fed. Reg.
at 55 n.31.
[L3] determining an impact of
the proposed modification to
the formulary based on the
plurality of data sources,
wherein the impact comprises
an increase or decrease in a
rebate amount for one or more
of the plurality of drug entries
based on the rebate
information, a number of
members affected by the
proposed modification based
on the member information,
and a predicted shift in market
share resulting from the
Making a determination, i.e.,
“determining an impact of the proposed
modification to the formulary. . .” is an
abstract idea, i.e., an “observation,
evaluation, judgment, opinion” which
could be performed as a mental process.
See Guidance, 84 Fed. Reg. at 52.
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Independent Claim 1 Revised Guidance
proposed modification based
on the marketplace information
[L4] automatically identifying
one or more alternative
modifications to the formulary
that achieve a same or similar
objective as the proposed
modification with less impact
than the proposed modification
Identifying, i.e., “automatically
identifying . . . alternative
modifications to the formulary” is also
an abstract idea, i.e., an “observation,
evaluation, judgment, opinion” which
could be performed as a mental process.
See Guidance, 84 Fed. Reg. at 52.
[L5] providing the impact of
the proposed modification to a
user, along with the one or
more alternative modifications,
prior to implementation of the
proposed modification
“providing the impact of the proposed
modification to a user . . .” is merely
insignificant extra-solution activity that
does not add significantly more to the
abstract idea to render the claimed
invention patent-eligible. Guidance, 84
Fed. Reg. at 55 n.31.
[L6] receiving either an
approval or disapproval of at
least one modification to the
formulary, from among the
proposed modification and one
or more alternative
modifications, from the user;
“receiving either an approval or
disapproval of at least one modification
to the formulary from a user” is merely
insignificant extra-solution activity that
does not add significantly more to the
abstract idea to render the claimed
invention patent-eligible. Guidance, 84
Fed. Reg. at 55 n.31.
[L7] when an approval of at
least one modification is
received from the user, making
the approved at least one
modification to the formulary,
and
initiating a communication to
each of a plurality of members
of a prescription plan that have
been affected by the approved
“making the approved at least one
modification to the formulary” are
abstract ideas, i.e., an “observation,
evaluation, judgment, opinion” which
could be performed as a mental process.
See Guidance, 84 Fed. Reg. at 52.
“[I]nitating a communication” is merely
insignificant extra-solution activity that
does not add significantly more to the
abstract idea to render the claimed
invention patent-eligible. Guidance, 84
Fed. Reg. at 55 n.31; see buySAFE, Inc.
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Independent Claim 1 Revised Guidance
at least one modification to the
formulary;
v. Google, Inc., 765 F.3d 1350, 1355
(Fed. Cir. 2014) (computer receives and
sends information over a network).
[L8] adjudicating at least one
claim using the modified
formulary by receiving a
request for a claim adjudication
associated with a drug from a
pharmacy system over at least
one network
“adjudicating at least one claim using
the modified formulary,” is an abstract
idea, i.e., an observation, evaluation,
judgment, opinion” which could be
performed as a mental process. See
Guidance, 84 Fed. Reg. at 52.
As claimed, a “system” and a
“network” represent generic computer
components. Spec. ¶¶ 52–75.
[L9] determining a response to
the request based on the
modified formulary, wherein
the response comprises either a
denial or an approval
“determining a response to the request
based on the modified formulary”
which could be performed as a mental
process. See Guidance, Fed. Reg. at 52.
[L10] sending the response to
the pharmacy system over
the at least one network.
Sending a response is post-solution
activity that does not add significantly
more to the abstract idea to render the
claimed invention patent-eligible. See
buySAFE, Inc. v. Google, Inc., 765 F.3d
1350, 1355 (Fed. Cir. 2014) (computer
receives and sends information over a
network).
Appeal Br. A-1 (Claims App.).
Under the broadest reasonable interpretation standard,2 and other than
any computer-related aspects recited in the claim, we conclude limitations

2 During prosecution, claims must be given their broadest reasonable
interpretation when reading claim language in light of the specification as it
would be interpreted by one of ordinary skill in the art. In re Am. Acad. of
Sci. Tech. Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). Under this standard,
we interpret claim terms using “the broadest reasonable meaning of the
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L3, L4, L7, L8, and L9 recite mental steps that would ordinarily take place
when identifying impacts of a proposed modification to a formulary.
We determine that claim 1, overall, recites a mental process that may
also be performed by pen and paper.3 This type of activity, i.e., identifying
impacts of a proposed modification to a formulary could be carried out by a
human in their mind with the aid of pen and paper. See CyberSource Corp.
v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (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.”).

words in their ordinary usage as they would be understood by one of
ordinary skill in the art, taking into account whatever enlightenment by way
of definitions or otherwise that may be afforded by the written description
contained in the applicant’s specification.” In re Morris, 127 F.3d 1048,
1054 (Fed. Cir. 1997).
3 Our reviewing court recognizes that “[a]n abstract idea can generally be
described at different levels of abstraction.” Apple, Inc. v. Ameranth, Inc.,
842 F.3d 1229, 1240 (Fed. Cir. 2016). That need not and, in this case does
not, “impact the patentability analysis.” Id. at 1241. Further, “[t]he Board’s
slight revision of its abstract idea analysis does not impact the patentability
analysis.” Id. Moreover, merely combining several abstract ideas does not
render the combination any less abstract. 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.”); see
also 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). We also note the “determining” steps can be carried out
by a human in the mind or by use of pen and paper. See CyberSource, 654
F.3d at 1375. Thus, whether the various steps of claim 1 are characterized as
“mental processes”, “fundamental economic practices, or “commercial
interactions” is not dispositive to our ultimate determination of abstractness.
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Thus, under Step 2A Prong 1, we determine that claim 1’s method
recites a judicial exception, and under our Revised Guidance, claim 1 recites
a judicial exception of a mental process, and thus is an abstract idea.
Step 2A Prong 2: Judicial Exception Integrated into a Practical Application
Because we conclude above that the claims are directed to a judicial
exception, we proceed to the “practical application” Step 2A, Prong 2, in
which we determine whether the recited judicial exception is integrated into
a practical application of that exception by: (a) identifying whether there are
any additional elements recited in the claim beyond the judicial exception(s);
and (b) evaluating those additional elements individually and in combination
to determine whether they integrate the exception into a practical
application. Appellant presents arguments with respect to this step of the
analysis. Appellant argues
The integration of impact identification with the claim
adjudication process reflects an improvement in the technical
field of automated, network-based pharmacy benefit
management (PBM). At the very least, the combination of the
impact identification with the claim adjudication process uses the
limitations in some other meaningful way beyond generally
linking the use of the judicial exception to a particular
technological environment even assuming, arguendo, that the
impact identification represents an abstract idea, the claims link
these limitations to an automated claim adjudication process,
rather than simply computers or the Internet.”
Appeal Br. 8.
Appellant further argues the lack of prior art rejections indicate “the
use of these new types of information, to determine an impact of a proposed
modification to a formulary, represents a new technique for analyzing the
new types of information.” Appeal Br. 7.
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In response, we note the Supreme Court emphasizes, “[t]he ‘novelty’
of any element or steps in a process, or even of the process itself, is of no
relevance in determining whether the subject matter of a claim falls within
the § 101 categories of possibly patentable subject matter.” Diehr, 450 U.S.
at 188–89 (emphasis added). Our reviewing court further guides that
“[e]ligibility and novelty are separate inquiries.” Two-Way Media Ltd. v.
Comcast Cable Commc'ns, LLC, 874 F.3d 1329, 1340 (Fed. Cir. 2017); see
also Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1263
(Fed. Cir. 2016) (holding that “[e]ven assuming” that a particular claimed
feature was novel does not “avoid the problem of abstractness”).
We disagree that the claimed invention provides a technological
improvement because the test of eligibility is not based on whether the
claimed invention could only be carried out with a computer. Rather, when
using a generic computer, the test is whether the claimed invention effects an
improvement to another technology or technical field; whether the claimed
invention amount to an improvement to the functioning of a computer itself;
and whether the claimed invention move beyond a general link of the use of
an abstract idea to a particular technological environment. In this case, the
claimed invention does not meet any of the aforementioned criteria. We
determine that the technology implemented in the instant application is
useful to solve a business problem, but the additional elements are not a
technological solution to a technological problem, or a solution to a problem
introduced by the technology itself.
As to the specific limitations, we find above that limitations L3, L4,
L7, L8, and L9 recite abstract ideas. We further find limitations L1, L2, L5,
and L6 recited insignificant extra-solution activity that does not add
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significantly more to the abstract idea to render the claimed invention patent-
eligible. We also find L10 recites post-solution activity that does not add
significantly more to the abstract idea to render the claimed invention patent-
eligible. The Supreme Court guides that the “prohibition against patenting
abstract ideas ‘cannot be circumvented by’ . . . adding ‘insignificant
postsolution activity.’” Bilski, 561 U.S. at 610–11 (quoting Diehr, 450 U.S.
at 191–92). Claim 1 further recites “one hardware processor.” Similar well-
understood, routine, and conventional computer components are recited in
each of independent claims 9 and 16.
On this record, we conclude Appellant’s claims do not operate the
recited generic computer components in a manner to achieve an
improvement in computer functionality. See MPEP § 2106.05(a).
Thus, we find each of the limitations of claim 1 recite abstract ideas or
extra-solution activity, and none of the limitations, individually or as an
ordered combination, integrate the judicial exception of identifying impacts
of a proposed modification to a formulary into a practical application as
determined under one or more of the MPEP sections cited above. The claim
as a whole merely uses instructions to implement the abstract idea on a
computer or, alternatively, merely uses a computer as a tool to perform the
abstract idea.
Under analogous circumstances, the Federal Circuit has held that
“[t]his is a quintessential ‘do it on a computer’ patent: it acknowledges that
[such] data . . . was previously collected, analyzed, manipulated, and
displayed manually, and it simply proposes doing so with a computer. We
have held such claims are directed to abstract ideas.” Univ. of Fla. Research
Found., Inc. v. Gen. Elec. Co., 916 F.3d 1363, 1367 (Fed. Cir. 2019).
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Therefore, the claim as a whole merely uses instructions to implement
the abstract idea on a computer or, alternatively, merely uses a computer as a
tool to perform the abstract idea. Thus, on this record, Appellant has not
shown an improvement or practical application under the guidance of MPEP
section 2106.05(a) (“Improvements to the Functioning of a Computer or to
Any Other Technology or Technical Field”) or section 2106.05(e)(“Other
Meaningful Limitations”). Nor does Appellant advance any arguments in
the Brief(s) that are directed to the Bilski machine-or-transformation test,
which would only be applicable to the method (process) claims on appeal.
See MPEP §§ 2106.05(b) (Particular Machine) and 2106.05(c) (Particular
Transformation).
Therefore, we conclude the abstract idea is not integrated into a
practical application, and thus the claim is directed to the judicial exception.
Step 2B – “Inventive Concept” or “Significantly More”
If the claims are directed to a judicial exception, and not integrated
into a practical application, as we conclude above, we proceed to the
“inventive concept” step. For Step 2B we must “look with more specificity
at what the claim elements add, in order to determine ‘whether they identify
an “inventive concept” in the application of the ineligible subject matter’ to
which the claim is directed.” Affinity Labs, 838 F.3d at 1258.
In applying step two of the Alice analysis, our reviewing court guides
we must “determine whether the claims do significantly more than simply
describe [the] abstract method” and thus transform the abstract idea into
patentable subject matter. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709,
715 (Fed. Cir. 2014). We look to see whether there are any “additional
features” in the claims that constitute an “inventive concept,” thereby
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rendering the claims eligible for patenting even if they are directed to an
abstract idea. Alice, 573 U.S. at 221. Those “additional features” must be
more than “well-understood, routine, conventional activity.” Mayo, 566
U.S. at 79.
Limitations referenced in Alice that are not enough to qualify as
“significantly more” when recited in a claim with an abstract idea include, as
non-limiting or non-exclusive examples: adding the words “apply it” (or an
equivalent) with an abstract idea4; mere instructions to implement an
abstract idea on a computer5; or requiring no more than a generic computer
to perform generic computer functions that are well-understood, routine and
conventional activities previously known to the industry.6
Evaluating claim 1 under step 2 of the Alice analysis, we conclude it
lacks an inventive concept that transforms the abstract idea of identifying
impacts of a proposed modification to a formulary into a patent-eligible
application of that abstract idea.
The patent eligibility inquiry may contain underlying issues of fact.
Mortg. Grader, 811 F.3d at 1325. In particular, “[t]he question of whether a
claim element or combination of elements is well-understood, routine and
conventional to a skilled artisan in the relevant field is a question of fact.”
Berkheimer, 881 F.3d at 1368.

4 Alice, 573 U.S. at 221–23.
5 Alice, 573 U.S. at 222–23, e.g., simply implementing a mathematical
principle on a physical machine, namely a computer.
6 Alice, 573 U.S. at 225 (explaining using a computer to obtain data, adjust
account balances, and issue automated instructions involves computer
functions that are well-understood, routine, conventional activities).
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As evidence of the conventional nature of the recited “processor” in
method claim 1, similarly recited in system claim 9 and method claim 16,
the Specification discloses conventional processors by describing:
[T]he various illustrative logical blocks, modules, and methods
described in connection with the embodiments disclosed herein
can be implemented or performed with a general purpose
processor, a digital signal processor (“DSP”), an ASIC, FPGA or
other programmable logic device, discrete gate or transistor
logic, discrete hardware components, or any combination thereof
designed to perform the functions described herein. A general-
purpose processor can be a microprocessor, but in the alternative,
the processor can be any processor, controller, microcontroller,
or state machine. A processor can also be implemented as a
combination of computing devices, for example, a combination
of a DSP and a microprocessor, a plurality of microprocessors,
one or more microprocessors in conjunction with a DSP core, or
any other such configuration.
Spec. ¶ 73.
Thus, because the Specification describes the additional elements in
general terms, without describing the particulars, we conclude the claim
limitations may be broadly but reasonably construed as reciting conventional
computer components and techniques, particularly in light of Appellant’s
Specification, as quoted above.7
The MPEP, based upon our precedential guidance, provides additional
considerations with respect to analysis of the well-understood, routine, and
conventional nature of the recited computer-related components.

7 Claim terms are to be given their broadest reasonable interpretation, as
understood by those of ordinary skill in the art and taking into account
whatever enlightenment may be had from the Specification. In re Morris,
127 F.3d 1048, 1054 (Fed. Cir. 1997).
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Another consideration when determining whether a claim recites
significantly more than a judicial exception is whether the
additional elements amount to more than a recitation of the words
“apply it” (or an equivalent) or are more than mere instructions
to implement an abstract idea or other exception on a computer.
As explained by the Supreme Court, in order to transform a
judicial exception into a patent-eligible application, the
additional element or combination of elements must do “‘more
than simply stat[e] the [judicial exception] while adding the
words ‘apply it’”. Alice Corp. v. CLS Bank, 573 U.S. __, 134 S.
Ct. 2347, 2357, 110 USPQ2d 1976, 1982-83 (2014) (quoting
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S.
66, 72, 101 USPQ2d 1961, 1965). Thus, for example, claims that
amount to nothing more than an instruction to apply the abstract
idea using a generic computer do not render an abstract idea
eligible. Alice Corp., 134 S. Ct. at 2358, 110 USPQ2d at 1983.
See also 134 S. Ct. at 2389, 110 USPQ2d at 1984 (warning
against a § 101 analysis that turns on “the draftsman’s art”) . . . .
In Alice Corp., the claim recited the concept of intermediated
settlement as performed by a generic computer. The Court found
that the recitation of the computer in the claim amounted to mere
instructions to apply the abstract idea on a generic computer. 134
S. Ct. at 2359-60, 110 USPQ2d at 1984. The Supreme Court also
discussed this concept in an earlier case, Gottschalk v. Benson,
409 U.S. 63, 70, 175 USPQ 673, 676 (1972), where the claim
recited a process for converting binary-coded decimal (BCD)
numerals into pure binary numbers. The Court found that the
claimed process had no substantial practical application except
in connection with a computer. Benson, 409 U.S. at 71-72, 175
USPQ at 676. The claim simply stated a judicial exception (e.g.,
law of nature or abstract idea) while effectively adding words
that “apply it” in a computer. Id.
MPEP § 2106.05(f) (“Mere Instructions To Apply An Exception”).
With respect to the Step 2B analysis, we conclude, similar to Alice, the
recitation of a method that includes a “processor”, (claim 1) as argued by
Appellant, and similarly for claims 9 and 16, is simply not enough to
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19
transform the patent-ineligible abstract idea here into a patent-eligible
invention under Step 2B. See Alice, 573 U.S. at 221 (“[C]laims, which
merely require generic computer implementation, fail to transform [an]
abstract idea into a patent-eligible invention.”).
We conclude the claims fail the Step 2B analysis because claim 1, in
essence, merely recites various computer-based elements along with no
more than mere instructions to implement the identified abstract idea using
the computer-based elements.
Therefore, in light of the foregoing, we conclude, under the Revised
Guidance, that each of Appellant’s claims 1–3, 8–11, 16, and 17, 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.
CONCLUSION
We reverse the Examiner’s § 101 rejection. However, claims 1–3, 8–
11, 16, and 17 are newly rejected under 35 U.S.C. § 101 for the reasons
discussed above.
This decision contains a new ground of rejection pursuant to
37 C.F.R. § 41.50(b). Section 41.50(b) provides “[a] new ground of
rejection pursuant to this paragraph shall not be considered final for judicial
review.” Section 41.50(b) also provides:
When the Board enters such a non-final decision, the appellant,
within two months from the date of the decision, must exercise
one of the following two options with respect to the new ground
of rejection to avoid termination of the appeal as to the rejected
claims:
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(1) Reopen prosecution. Submit an appropriate
amendment of the claims so rejected or new Evidence relating to
the claims so rejected, or both, and have the matter reconsidered
by the examiner, in which event the prosecution will be
remanded to the examiner. The new ground of rejection is
binding upon the examiner unless an amendment or new
Evidence not previously of Record is made which, in the opinion
of the examiner, overcomes the new ground of rejection
designated in the decision. Should the examiner reject the claims,
appellant may again appeal to the Board pursuant to this subpart.
(2) Request rehearing. Request that the proceeding be
reheard under § 41.52 by the Board upon the same Record. The
request for rehearing must address any new ground of rejection
and state with particularity the points believed to have been
misapprehended or overlooked in entering the new ground of
rejection and also state all other grounds upon which rehearing
is sought.
Further guidance on responding to a new ground of rejection can be
found in the Manual of Patent Examining Procedure § 1214.01
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).
DECISION SUMMARY
Claims
Rejected
35 U.S.C.
§
Basis Affirmed Reversed New Ground
1–3, 8–
11, 16, 17
101 Eligibility 1–3, 8–
11, 16, 17
1–3, 8–11,
16, 17
Overall
Outcome
1–3, 8–
11, 16, 17
1–3, 8–11,
16, 17

REVERSED; 37 C.F.R, § 41.50(b)