MELTON, Hayden Paul.

Patent Trials and Appeals Board

Apr 17, 2020

14535776 - (D) (P.T.A.B. Apr. 17, 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.
14/535,776 11/07/2014 Hayden Paul MELTON 64NV-215723 3020
133759 7590 04/17/2020
Sheppard Mullin Richter & Hampton LLP
650 Town Center Drive, 10th Floor
Costa Mesa, CA 92626
EXAMINER
RAZA, ZEHRA
ART UNIT PAPER NUMBER
3685
NOTIFICATION DATE DELIVERY MODE
04/17/2020 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):
SheppardMullin_Pair@firsttofile.com
dmipdocketing@sheppardmullin.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte HAYDEN PAUL MELTON
____________

Appeal 2018-008091
Application 14/535,776
Technology Center 3600
____________

Before ANTON W. FETTING, BIBHU R. MOHANTY, and
AMEE A. SHAH, Administrative Patent Judges.

SHAH, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), the Appellant1 appeals from the
Examiner’s final decision to reject claims 1–6, 8–15, and 17–24, which are
all the pending claims. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. The Appellant identifies the real party in interest as
“THOMSON REUTERS GLOBAL RESOURCES UNLIMITED
COMPANY.” Br. 2.
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CLAIMED SUBJECT MATTER
The Appellant states its “invention relates to systems and methods for
distributing market data from an electronic trading venue” (Spec. ¶ 2) and
“for ensuring that data distributed to multiple recipients is accessible by all
of the recipients at substantially the same time, regardless of when the data
is actually received by each recipient” (id. ¶ 9).
Claims 1, 10, and 19 are the independent claims on appeal. Claim 1 is
illustrative of the subject matter on appeal and is reproduced below (with
added bracketing for reference):
1. A computer implemented method of distributing credit-
screened market data, the method being implemented in a
computer system having one or more physical processors
programmed with computer program instructions that, when
executed by the one or more physical processors, cause the
computer system to perform the method, the method comprising:
[(a)] obtaining, by the computer system, first market data;
[(b)] obtaining, by the computer system, credit data of
each of a plurality of data recipients, including at least first credit
data of a first data recipient and second credit data of a second
data recipient;
[(c)] generating, by the computer system, first credit-
screened market data for the first data recipient based on the first
credit data and the first market data;
[(d)] generating, by the computer system, second credit-
screened market data for the second data recipient based on the
second credit data and the first market data;
[(e)] encrypting, by the computer system, at least a portion
of the first credit-screened market data using an encryption key;
[(f)] encrypting, by the computer system, at least a portion
of the second credit-screened market data using the encryption
key;
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[(g)] transmitting, by the computer system, the encrypted
first credit-screened market data to the first data recipient over
an electronic communication network at a first time;
[(h)] transmitting, by the computer system, the encrypted
second credit-screened market data to the second data recipient
over the electronic communication network at a second time
different than the first time; and
[(i))] transmitting, by the computer system, at a third time
different than the first time and the second time, the encryption
key simultaneously to the first data recipient and the second data
recipient.
Br. 28 (Claims App.).
REFERENCES
The prior art relied upon by the Examiner is:
Name Reference Date
Negawa US 7,055,030 B2 May 30, 2006
Palmer US 8,010,450 B2 Aug. 30, 2011
Warmus et al.
(“Warmus”)
US 2004/0001087 A1 Jan. 1, 2004
REJECTIONS
Claims 1–6, 8–15, and 17–24 stand rejected under 35 U.S.C. § 101 as
being directed to a judicial exception without significantly more.
Claims 1–6, 8–15, and 17–24 stand rejected under 35 U.S.C. § 112(b)
as being indefinite.
Claims 1–6, 8–15, and 17–24 stand rejected under 35 U.S.C.
§ 102(a)(1) as being anticipated by over Palmer.2

2 We consider the Examiner’s reference to pre-AIA 35 U.S.C. § 102(b)
harmless error.
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Claims 1–6, 8–15, and 17–24 stand rejected under 35 U.S.C. § 103 as
being unpatentable over Palmer, Negawa, and Warmus.

OPINION
35 U.S.C. § 101 – Patentable Subject Matter
The Appellant argues the claims as a group. See Appeal Br. 11, 15.
We select claim 1 as representative of the group, with claims 2–6, 8–15,
and 17–24 standing or falling therewith. See 37 C.F.R. § 41.37(c)(1)(iv)
(2017).
35 U.S.C. § 101 Framework
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 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. 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 Supreme Court’s two-step 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.”).
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Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
(1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267–68 (1853))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme 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 176; see also id. at 191 (“We
view respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, . . . and this principle cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment.” Id. (citing Benson and Flook); see, e.g., id. at 187 (“It is now
commonplace that an application of a law of nature or mathematical formula
to a known structure or process may well be deserving of patent
protection.”).
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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 (internal 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.
After the Appellant’s Briefs were filed and the Examiner’s Answer
mailed, 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 (Jan. 7, 2019) (“2019
Revised Guidance”). That guidance revised the USPTO’s examination
procedure with respect to the first step of the Mayo/Alice framework by
(1) providing groupings of subject matter that are considered an abstract
idea; and (2) clarifying that a claim is not “directed to” a judicial exception
if the judicial exception is integrated into a practical application of that
exception. Id. at 50. The 2019 Revised Guidance, by its terms, applies to all
applications, and to all patents resulting from applications, filed before, on,
or after January 7, 2019. Id. 3 Under the 2019 Revised Guidance, we first
look to whether the claim recites:

3 The 2019 Revised Guidance supersedes MPEP § 2106.04(II) and also
supersedes all versions of the USPTO’s “Eligibility Quick Reference Sheet
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(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); and
(2) additional elements that integrate the judicial exception into
a practical application (see MANUAL OF PATENT EXAMINING
PROCEDURE (MPEP) §§ 2106.05(a)–(c), (e)–(h) (9th Ed., Rev.
08.2017, Jan. 2018)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is not “well-understood, routine, conventional” in the field (see
MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
See 2019 Revised Guidance, 84 Fed Reg. at 54, 56.
Step One of the Mayo/Alice Framework
Under the first step of the Mayo/Alice framework, the Examiner
determines that claim 1 is “directed to an abstract idea of encrypting data
and credit-screening which according to the Alice examining guidelines is
method of organizing human activity, a mathematical algorithm and/or an
idea of itself” (Final Act. 5), or more specifically, “to sending and receiving
market data . . . which is a fundamental economic practice and an abstract
idea” using “a process of encryption which is a series of mathematical

Identifying Abstract Ideas.” See 2019 Revised Guidance, 84 Fed. Reg. at 51
(“Eligibility-related guidance issued prior to the Ninth Edition, R-08.2017,
of the MPEP (published Jan. 2018) should not be relied upon.”). Thus, the
Appellant’s arguments related to prior guidance (see, e.g., Appeal Br. 11
(arguing a necessity of comparing the ideas to court cases) will not be
considered.
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operations” (Ans. 3–4). When viewed through the lens of 2019 Revised
Guidance, Step 2A, Prong 1 (see 84 Fed. Reg. at 54), the Examiner’s
analysis depicts the claimed subject matter as a “[c]ertain method[] of
organizing human activity—fundamental economic principles or practices
(including hedging, insurance, mitigating risk)” (id. at 52) and as a
mathematical concept. The Examiner also determines that the elements of
the claim merely use a generic processor to perform the functions of the
claim. See Final Act. 4. When viewed through the lens of 2019 Revised
Guidance, Step 2A, Prong 2 (see 84 Fed. Reg. at 54–55), the Examiner
determines that the additional elements or combination of elements does not
integrate the exception into a practical application because the claim’s
elements because the recited “‘computer system having one or more
physical processors’ . . . only describes a generic computer at a high level of
generality and does no more than implement the abstract idea of encrypting
data” (Final Act. 5), i.e., “merely uses a computer as a tool to perform an
abstract idea” (2019 Revised Guidance, 84 Fed. Reg. at 55).
The Appellant contends that “[t]he character of the claim[] as a whole
in light of the Specification is directed to a networked computer system that
solves a problem that specifically arises out of electronic trading venues and
networks” (Br. 12) and analogizes the claim to those of McRO, Inc. v.
Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016), DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), and
Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir.
2016) (see id. at 13–15). When viewed through the lens of the 2019 Revised
Guidance, the Appellant contends that under Step 2A, Prong 2, the elements
of the claim integrate the abstract idea into a practical application because
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the combination of the elements “reflects an improvement in the functioning
of a computer, or an improvement to other technology or technical field.”
84 Fed. Reg. at 55. For at least the following reasons, we disagree.
Reciting a Judicial Exception
Before determining whether the claim at issue is directed to an
abstract idea, we first determine to what the claim is directed. The Federal
Circuit has explained that “the ‘directed to’ inquiry applies a stage-one filter
to claims, considered in light of the specification, based on whether ‘their
character as a whole is directed to excluded subject matter.’” Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet
Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir.
2015)). It asks whether the focus of the claim is on a specific improvement
in relevant technology or on a process that itself qualifies as an “abstract
idea” for which computers are invoked merely as a tool. See id. at 1335–36.
Here, it is clear from the Specification, and the claim language, that the
focus of claim 1 is on an abstract idea, and not on any improvement to
technology and/or a technical field.
The Specification provides for “FAIR CREDIT SCREENED
MARKET DATA DISTRIBUTION.” Spec. Title. The “FIELD OF THE
INVENTION” section provides “[t]he invention relates to systems and
methods for distributing market data from an electronic trading venue.” Id.
¶ 2. The “BACKGROUND” section provides for market data updates to be sent
to electronic market participants that are typically sent out in very large
numbers. See id. ¶ 4. Sometimes “information from the market data update
will be the same for all interested market participants” using “the IP
Multicast protocol” (id. ¶ 5). However, on some electronic trading venues,
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different data is sent to different recipients based on bilateral credit via “a
point-to-point or one-to-one communication protocol.” Id. ¶ 6. “To this
end, on many electronic trading venues where it is necessary to send
different views of the CLOB to different participants within the same market
data update, the TCP/IP protocol is used.” Id. Further, for fairness, market
data updates are received by participants at the same time, and for the
“electronic trading venues in which a different view of the CLOB is sent to
each participant at each market data update, achieving fairness in market
data distribution is more difficult.” Id. ¶ 7. However, “[m]odern computer
networks serialize data and in doing so impose a total ordering of the data
being sent,” resulting in a failure to “provide all recipients with data at the
same time,” based on “the bandwidth of the network, size in bytes of the
views and number of participants to which the views are being sent,” with a
difference of “100’s of microseconds (μs) or even several milliseconds”
between the first and last market participants’ view of the data. Id. ¶ 8. To
that end, the invention “relates to systems and methods for ensuring that data
distributed to multiple recipients is accessible by all of the recipients at
substantially the same time, regardless of when the data is actually received
by each recipient,” by distributing encrypted data with an encryption key
distributed “at substantially the same time.” Id. ¶ 9.
Consistent with the disclosure, claim 1 recites “[a] computer
implemented method of distributing credit-screened market data”
implemented in a computer system with a processor(s) programmed with
instructions causing the system to perform the steps of the method
comprising: (1) obtaining data, i.e., limitations (a) and (b); (2) generating
data, i.e., limitations (c) and (d); (3) encrypting data, i.e., limitations (e) and
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(f); and (4) transmitting data, i.e., limitations (g), (h), and (i). See Br. 28
(Claims. App). The limitations are performed by the computing system and
are recited functionally without any implementation details.
When considered collectively and under the broadest reasonable
interpretation, the limitations of claim 1 recite a method of distributing
“screened market data.”4 Ans. 4. This is an abstract idea of a “[c]ertain
method[] of organizing human activity—fundamental economic principles
or practices (including hedging, insurance, mitigating risk); commercial or
legal interactions (. . . business relations).” 2019 Revised Guidance, 84 Fed.
Reg. at 52. This is consistent with the Examiner’s characterization.
The courts have held similar concepts to be abstract. For example, the
Federal Circuit has held abstract the concepts of “communicating requests to
a remote server and receiving communications from that server, i.e.,
communication over a network” in ChargePoint, Inc. v. SemaConnect Inc.,
920 F.3d 759, 766 (Fed. Cir. 2019), “capturing and transmitting data from
one device to another” in Cellspin Soft, Inc. v. Fitbit, Inc., 927 F.3d 1306,
1315 (Fed. Cir. 2019), cert. denied sub nom. Garmin USA, Inc. v. Cellspin
Soft, Inc., 140 S. Ct. 907 (2020), “providing someone an additional set of
information without disrupting the ongoing provision of an initial set of
information” in Interval Licensing LLC v. AOL, Inc., 896 F.3d 1335, 1344
(Fed. Cir. 2018), “synchronous communications and automatic formatting
for different handheld devices” in Ameranth, Inc. v. Domino's Pizza, LLC,

4 We note 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). The Board’s “slight revision of its abstract idea analysis
does not impact the patentability analysis.” Id. at 1241.
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792 F. App’x 780, 787 (Fed. Cir. 2019); and “communicating information
using a personalized marking” in Bridge & Post, Inc. v. Verizon Commc'ns,
Inc., 778 F. App'x 882, 890 (Fed. Cir. 2019).
Having concluded that claim 1 recites a judicial exception, i.e., an
abstract idea, in determining whether the claim is directed to this abstract
idea, we next consider whether the claim recites additional elements that
integrate the judicial exception into a practical application.
Integration into a Practical Application
Under Step 2A, Prong 2 of the 2019 Revised Guidance, 84 Fed. Reg.
at 54, we look to whether 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, such that the claim is more than a drafting effort designed
to monopolize the judicial exception,” i.e., “integrates a judicial exception
into a practical application.” Here, the only additional element recited in
claim 1 beyond the abstract idea is “a computer system having one or more
physical processors programmed with computer program instructions that,
when executed by the one or more physical processors, cause the computer
system to perform the method” — element(s) that, as the Examiner observes
(Final Act. 5; Ans. 5), are described in the Specification as generic computer
components. See Spec. ¶¶ 38–40, 64–71, Figs., 1, 2 (describing that the
system is a generic computer system comprising generic components and
generic computer readable media).
Limitations (a) and (b) of obtaining market and credit data are extra-
solution activities. See In re Bilski, 545 F.3d 943, 963 (Fed. Cir. 2008) (en
banc), aff’d sub nom Bilski v. Kappos, 561 U.S. 593) (characterizing data
gathering steps as insignificant extra-solution activity). The limitations of
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generating market data (limitations (c) and (d)) are recited functionally
without technical or technological details on how, i.e., by what algorithm or
on what basis/method, the processor is caused to generate data, and we do
not see further detail in the Specification. See Spec. ¶¶11, 20, 45, 75,
(discussing generating data without further detail). As such, these
limitations can comprise some analysis of data, which can be performed
mentally (see Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354
(Fed. Cir. 2016) (“[W]e have treated analyzing information by steps people
go through in their minds, or by mathematical algorithms, without more, as
essentially mental processes”). Limitations (e) and (f) encrypting data using
an encryption key are recited functionally without technical or technological
details on how, i.e., by what algorithm or on what basis/method, the
processor is caused to encrypt data. The Specification describes an
encryption key as being used to encrypt data, the “encryption key may
generally refer to a piece of information (e.g., a random number, a hash, a
parameter, etc.) that determines the functional output of a process used to
encrypt data” (Spec. ¶ 43), and the encryption of data “may use the
Advanced Encryption Standard (AES), or may be an XOR cipher used as a
One Time Pad, or some other encryption standard or technique” (id. ¶ 46).
The end result, encryption, is entirely conventional; the Appellant does not
suggest they invented encryption. As such, these limitations comprise using
mathematical operations to manipulate data, which is an abstract idea.
Limitations (g), (h), and (i) of transmitting the encrypted data and the key
comprise communicating the resulting information, which is a post-solution
activity (see Bilski, 561 U.S. at 610–11 (“Flook stands for the proposition
that the prohibition against patenting abstract ideas ‘cannot be circumvented
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by attempting to limit the use of the formula to a particular technological
environment’ or adding ‘insignificant postsolution activity.”’) (quoting
Diehr, 450 U.S. at 191–92); Elec. Power Grp., 830 F.3d at 1354 (“we have
recognized that merely presenting the results of abstract processes of
collecting and analyzing information, without more (such as identifying a
particular tool for presentation) is abstract as an ancillary part of such
collection and analysis.”), and an abstract idea (see ChargePoint, 920 F.3d
at 769–70 (communicating information is an abstract idea).
We find no indication in the Specification, nor does the Appellant
direct us to any indication, that the operations recited in claim 1 require any
specialized computer hardware or other inventive computer components,
i.e., a particular machine, invoke any asserted inventive programming, or
that the claimed invention is implemented using other than generic computer
components to perform generic computer functions. See DDR Holdings,
773 F.3d at 1256 (“[A]fter Alice, there can remain no doubt: recitation of
generic computer limitations does not make an otherwise ineligible claim
patent-eligible.”).
The Appellant argues that, like DDR Holdings,
the instant claims recite a technical solution to a problem in
which users may have access credit-screened market data over a
network because a computer such as one for an electronic trading
venue may generate one recipient’s credit-screened market data
sooner or later than another recipient's credit-screened market
data, and due to network latencies and other performance issues.
Br. 14. However, the purported “technical solution” to having access to
screened data in a timely manner so as “[t]o run a fair market” (Spec. ¶ 8) is
not rooted in computer technology. This purported solution requires the use
of a generic system, comprising a generic processor and medium, operating
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in its ordinary capacity. See supra; see also Alice, 573 U.S. at 224–26. The
Appellant does not, and cannot, claim to have invented the use of the
computer system. There is no indication that the obtaining, generating,
encrypting, and transmitting are performed in a different, unconventional
manner, or by a special type of unconventional device. The “focus” of the
claim is not “on the specific asserted improvement in computer capabilities”
(Enfish, 822 F.3d at 1336), but rather on using the computer components as
tools to implement the abstract idea in the particular field of electronic
trading. That the claim involves “architecture” (Br. 15) of a computer
performing the steps at best limits the invention to a computer environment
and does not make the claim less abstract. See Affinity Labs of Tex., LLC v.
DIRECTV, LLC, 838 F.3d 1253, 1259 (Fed. Cir. 2016) (“The Supreme Court
and [the Federal Circuit] have repeatedly made clear that merely limiting the
field of use of the abstract idea to a particular existing technological
environment does not render the claims any less abstract.”). Any
improvement to distributing data lies in the process itself, an improvement in
the abstract idea itself, not to any technological improvement. The claim’s
focus is “not a physical-realm improvement but an improvement in a wholly
abstract idea.” SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1168 (Fed.
Cir. 2018)).
Regarding McRO, the claims there were directed to a specific
improvement in computer animation and used rules to automate a subjective
task of humans to create a sequence of synchronized, animated characters.
See McRO, 837 F.3d at 1314–15. Unlike Flook, Bilski, and Alice, it was not
the use of the computer, but the incorporation of the rules that improved an
existing technological process. Id. at 1314. Here, there is no such
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improvement to technology or a technological process. The Appellant does
not assert an improvement in the technical or technological aspects of
obtaining, generating, encrypting, and transmitting data, which are all
claimed without any specific details on how they are performed. Rather, any
improvement lies in the timing of transmitting a key, which we note may
suffer the same delivery timing issues with network bandwidth and number
of participants discussed in the Specification. See Spec. ¶ 8. As discussed
above, this alleged improvement lies in the abstract idea itself, not to any
technological improvement. See BSG Tech LLC v. Buyseasons, Inc., 899
F.3d 1281, 1287–88 (Fed. Cir. 2018). The Appellant also does not direct our
attention to anything in the Specification to indicate that the invention
provides a technical improvement in the obtaining, generating, encrypting,
or transmitting of data or that claim 1 incorporates rules to automate a
subjective task of humans, similar to those in McRO.
The Appellant also argues that the claim is similar to the claims of
Amdocs, because “the claim[] recite[s] technological solutions tied to
computer architecture.” Br. 15. In Amdocs, the Federal Circuit held the
claim was patent eligible because the claim entailed an unconventional
technological solution (enhancing data in a distributed fashion) to a
technological problem (massive record flows which previously required
massive databases). Although the solution required generic components, the
court adopted the district court’s interpretation of the claim term “enhance,”
stating, it approved “reading the ‘in a distributed fashion’ and the ‘close to
the source’ of network information requirements into the term ‘enhance,’”
and determined that “the claim’s enhancing limitation necessarily requires
that these generic components operate in an unconventional manner to
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achieve an improvement in computer functionality” and that the “enhancing
limitation depends not only upon the invention’s distributed architecture, but
also depends upon the network devices and gatherers––even though these
may be generic––working together in a distributed manner.” Amdocs, 841
F.3d at 1300–01. Here, there is no similar evidence that the architecture of a
computer system to perform the functions of obtaining, generating,
encrypting, and transmitting data is comparable to the components in
Amdocs or otherwise establishes that the computer operates in an
unconventional manner.
Accordingly, we conclude claim 1 does not contain an element that
imposes a meaningful limit on the abstract idea that integrates the abstract
idea into a practical application.
Thus, we are not persuaded of error in the Examiner’s determination
that claim 1 is directed to an abstract idea.
Step Two of the Mayo/Alice Framework
Under the second step in the Alice framework (corresponding to Step
2B of the 2019 Revised Guidance), we find supported the Examiner’s
determination that the limitations of claim 1, taken individually and as an
ordered combination, do not amount to significantly more than the judicial
exception. See Final Act. 5; Ans. 5.
The Appellant argues that “the Examiner’s position pre-supposes
without establishing that each claim recitation recites a generic computer
function . . . [and thus] has not established a prima facie case that each of
the claim recitations individually recite a generic computer function”
(Br. 15, 16) and that “[l]ike the claims in BASCOM, the instant claims recite
significantly more than an alleged abstract idea . . . [of] ‘organizing human
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activity.’ Even if the claims recite organizing human activity, the particular
manner in which the claims recite doing so is a technological improvement”
(id. at 16–17 (citing see BASCOM Glob. Internet Servs., Inc. v. AT&T
Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016)).
Here, the Examiner correctly considers the claim’s limitations
individually and as an ordered combination as factors in determining that the
claim does not recite limitations that transform the nature of the claim into a
patent-eligible invention. See Final Act. 5; Ans. 5. Thus, the Examiner has
clearly articulated the reasons as to why the claim is directed to an abstract
idea and has notified the Appellant of the reasons for the rejection “together
with such information and references as may be useful in judging of the
propriety of continuing the prosecution of [the] application.” 35 U.S.C.
§ 132. In doing so, the Examiner has set forth a prima facie case of
unpatentability. See In re Jung, 637 F.3d 1356, 1362 (Fed. Cir. 2011);
Chester v. Miller, 906 F.2d 1574, 1578 (Fed. Cir. 1990) (Section 132 “is
violated when a rejection is so uninformative that it prevents the applicant
from recognizing and seeking to counter the grounds for rejection”).
Further, the Appellant does not show how the claim here is similar to
BASCOM’s “particular arrangement of elements [that] is a technical
improvement over prior art ways of filtering such content.” 827 F.3d
at 1350; cf. Br. 16–17. The patent at issue in BASCOM “claim[ed] 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.” Id. at 1351. The court determined that “[b]y taking a prior art
filter solution (one-size-fits-all filter at the ISP server) and making it more
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dynamic and efficient (providing individualized filtering at the ISP server),
the claimed invention represents a ‘software-based invention[ ] that
improve[s] the performance of the computer system itself.’” Id. Here, there
is no such improvement to the claimed computing system or processor itself,
or an unconventional arrangement of processors in that system that is a
technical improvement. As discussed above, any improvement lies in the
process of sending information, i.e., the abstract idea itself.
The Specification indisputably shows the claimed computing system
was conventional at the time of filing. See supra; Spec. ¶¶ 38–40, 64–71.
The Appellant provides no argument, reasoning, or evidence to the contrary.
Accordingly, no genuine issue of material fact exists as to the well-
understood, routine, or conventional nature of the system as claimed.
The Appellant also does not offer additional reasoning or argument
why the claim “[a]dds a specific limitation or combination of limitations that
[is] not well-understood, routine, conventional activity in the field, which is
indicative that an inventive concept may be present.” 2019 Revised
Guidance, 84 Fed. Reg. at 56. As discussed above, the claim simply recites
the functional results to be achieved by a conventional computer system.
The claim “provides only a result-oriented solution[] with insufficient detail
for how a computer accomplishes it. Our law demands more.” Intellectual
Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1342 (Fed. Cir.
2017). The claimed generic system with programmed processor(s) operates
in its ordinary and conventional capacity to perform the well-understood,
routine, and conventional functions of obtaining data, generating data,
encrypting data, and transmitting data. See Spec. ¶¶38, 65–68 (describing
that the method can be performed in any order with generic computer
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elements); Electric Power, 830 F.3d at 1354–55 (gathering, sending,
monitoring, analyzing, selecting, and presenting information does not
transform the abstract process into a patent-eligible invention); Alice, 573
U.S. at 226 (“Nearly every computer will include a ‘communications
controller’ and ‘data storage unit’ capable of performing the basic
calculation, storage, and transmission functions required by the method
claims.”); ChargePoint, 920 F.3d at 766, 769–70 (communicating
information and causing an action based on the communication did not
transform the abstract idea into a patentable invention); Bridge & Post, 778
F. App’x at 891–893 (determining information, generating an identifier,
tagging data including encrypting data, and transmitting data did not create
an inventive concept); Ameranth, 792 F. App’x at 787 (“‘real-time
synchronization,’ ‘automatic formatting ... for display as cascaded sets of
linked graphical user interface[s],’ and a ‘different number of user interface
screens from at least one other wireless handheld computing device’ do not
make the claims inventive.”).
Considered as an ordered combination, the components of the
Appellant’s claim 1 add nothing that is not already present when the steps
are considered separately. As discussed above, the functions are recited
generically, are conventional, and can be performed by a generic computer
system. The sequence of obtaining, generating, encrypting
(analyzing/manipulating), and transmitting data is equally generic and
conventional or otherwise held to be abstract. See Elec. Power, 830 F.3d
at 1354–56 (holding that the sequence of gathering, analyzing, and
displaying in real-time was abstract).
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Thus, we are not persuaded of error in the Examiner’s determination
that the limitations of claim 1 do not transform the claim into significantly
more than the abstract idea.
We therefore sustain the Examiner’s rejection under 35 U.S.C. § 101
of independent claim 1 and of claims 2–6, 8–15, and 17–24, the rejection of
which stands with claim 1.
35 U.S.C. § 112(b) – Indefiniteness
The Examiner rejects independent claims 1, 10, and 19 (and thus also
their dependent claims) under 35 U.S.C. § 112(b) because the term “credit-
screened” lacks antecedent basis. Final Act. 6. Specifically, the Examiner
finds the independent claims are “silent on the specific act of credit
screening, therefore the term credit screened lacks antecedent basis.”
Ans. 5.
The Appellant states [t]he term ‘credit-screened’ is introduced in the
preamble for each of the independent claims. It is unclear why or how this
term lacks antecedent basis.” Br. 17.
We agree with the Examiner that the claims do not recite a specific
step or act of credit screening. However, the Specification provides that
credit-screened can be simply “screened.” Spec. ¶ 6. Thus, in light on the
Specification, one of ordinary skill in the art would understand “credit-
screened market data,” as recited in the claims, to indicate the type of data
that is generated in some way based on credit data and market data.
Based on the foregoing, we do not sustain the indefiniteness rejection
of the independent claims 1, 10, and 19, and of the associated dependent
claims, on the basis discussed above.
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35 U.S.C. § 102(a)(1) – Anticipation
The Examiner finds that Palmer discloses the limitations of
independent claims 1, 10, and 19 (and thus also those of their dependent
claims) in that “Palmer discloses ‘one or more physical processors
programmed with computer program instructions . . . cause the computer
system to perform. . . . ’” Final Act. 7. The Examiner reasons that as “[t]he
stated language is intended use of the physical processors and will not
differentiate the claims from a prior art,” simply having a programmed
computer discloses all of the claimed functions. See id.; Ans. 6.
The Appellant argues that the Examiner’s rejection is in error because
the Examiner “ignores each and every one of the recitations that follow” the
preamble, and has thus “failed to establish prima facie case of anticipation
based on Palmer.” Br. 17–18. We agree.
Claim 1 recites a method comprising steps performed by a computing
system. Claim 10 recites an apparatus comprising processors programmed
to perform certain functions, and claim 19 recites a computer readable
storage device with instructions that cause a computer to perform certain
functions. Regardless of the structure of the system, the steps of the method
recite functions that must be considered. See In re Lowry, 32 F.3d 1579,
1582 (Fed. Cir. 1994) (“The Patent and Trademark Office (PTO) must
consider all claim limitations when determining patentability of an invention
over the prior art.”) (citing In re Gulack, 703 F.2d 1381, 1385 (Fed. Cir.
1983). To the extent the Examiner’s position is that the limitations comprise
printed matter, the Examiner did not establish that the claimed limitations
“lack a new and nonobvious functional relationship with the memory [or
processor].” Lowry, 32 F.3d at 1584. Moreover, “the printed matter
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doctrine is not applicable” to programs embodied in a tangible medium (In
re Beauregard, 53 F.3d 1583 (Fed. Cir. 1995)) and “[w]here the
programming performs some function with respect to the computer with
which it is associated, a functional relationship will be found” (MPEP
§ 2111.05(III). See also Typhoon Touch Techs., Inc. v. Dell, Inc., 659 F.3d
1376, 1381 (Fed. Cir. 2011) (“the ‘processor for executing said data
collection application’ requires that ‘the recited function must be performed
(namely, executing the application and the libraries to facilitate data
collection operations).’”).
Because the Examiner fails to clearly articulate the reasons as to how
the recited functions are disclosed by Palmer “with such information and
references as may be useful in judging of the propriety of continuing the
prosecution of [the] application” (35 U.S.C. § 132), the Examiner’s
“rejection is so uninformative that it prevents the applicant from recognizing
and seeking to counter the grounds for rejection” (Chester, 906 F.2d at
1578). Thus, the Examiner has not set forth a prima facie case of
unpatentability, and we do not sustain the anticipation rejection of the
independent claims 1, 10, and 19, and of the associated dependent claims, on
the basis discussed above.
35 U.S.C. § 103 – Obviousness
Independent claims 1, 10, and 19 recite substantially similar
limitations. See Br. 28, 30, 31. The Appellant argues the independent
claims as a group. See id. at 18–23. We select claim 1 as representative of
the group. See 37 C.F.R. § 41.37(c)(1)(iv) (2017).
The Appellant contends, in relevant part, that the Examiner does not
adequately show how the prior art references Palmer, Negawa, and Warmus,
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alone or in combination, teach “transmitting, by the computer system, the
encrypted first credit-screened market data to the first data recipient over an
electronic communication network at a first time,” as recited in limitation (g)
of independent claim 1. Br. 19. The Appellant also contends that the
Examiner thus also does not adequately show that the prior art teaches
transmitting encrypted second information at a second time different than
the first time and transmitting the key at a third time different from the first
and second times, as recited in limitations (h) and (i). See id. at 20–23. We
agree.
The Examiner finds that Palmer teaches obtaining first market and
credit data, generating first and second credit-screened market data, and
transmitting the second credit-screened market data to the second recipient
at a second time different than the first time, as recited in limitations (a)–(d)
and (h). See Final Act. 9–10. The Examiner acknowledges that Palmer does
not teach encrypting the data using an encryption key, as recited in
limitations (e) and (f), for which the Examiner relies on Negawa. See id.
at 10. The Examiner also finds that the combination Palmer and Negawa
does not teach transmitting the key at a third time different than the first and
second times, as recited in limitation (i), for which the Examiner relies on
Warmus. See id. at 11. Although the Examiner makes no specific finding in
the Final Action regarding the limitation of transmitting the encrypted first
credit-screened market data at a first time as recited in limitation (g), the
Examiner elaborates in the Answer that the combination of Palmer and
Negawa teaches this limitation. See Ans. 6–7. Specifically, the Examiner
finds that
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Palmer teaches a server system using customer data within
database to approve or pre-approve customers and then uses
customer data to determine risk score. An approval is generated
by the server system and then the customer is notified by sending
check package to the customer in Col. 11 line 49–Col. 12 line 8,
Col. 12 lines 9–34. Also Negawa discloses the encrypted first
credit-screened market data to the first data recipient over an
electronic communication network at a first time by teaching a
multicasting communication system connected to the internet.
Clients belong to the multicast group and they receive distributed
data transmitted by the IP multicasting from the server in Col. 5
lines 23–49 and Col. 6 lines 12–37. Figure 1 of Negawa
discloses number of clients. The server transmits distribution
data in encrypted form and clients belong to the multicast group
and they acquire a decryption key for decrypting the encrypted
distribution data.
Id. at 7.
As best interpreted, the Examiner considers Palmer’s notification of
approval to the customer (see Palmer col. 5, ll. 62–65) as teaching
transmitting data to a first recipient at a first time, and Palmer’s notification
to the merchant (see id. at col. 12, ll. 4–8) as teaching transmitting data to a
second recipient at a second time. However, the Examiner has not
adequately explained, and we do not readily see, how or where Palmer
teaches that these two times are different, as required by the claim. To the
extent the Examiner relies on Negawa for teaching that these times are
different, the Examiner has not adequately explained how Negawa teaches
this. Negawa teaches that encrypted data is distributed to client in a
multicast group with clients from that group that become subscribers
receiving a decryption key for the data. Negawa, col. 5, ll. 43–49. At best,
Negawa teaches that the encrypted data is multicast simultaneously to all
clients at a first time, with the decryption key being sent to subscriber clients
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(from the first clients) at a second time. See id. at col. 5, ll. 43–49, col. 6,
ll. 12–37. However, the Examiner does not explain how Negawa’s teaching
of transmitting content at one time and a key at a second time teaches, alone
or in combination with Palmer and/or Warmus, transmitting first data to a
first recipient at a first time, second data to a second recipient at a second
time different than the first time, and the key to the first and second
recipients simultaneously at a third time different from the first and second
times.
Based on the record before us and the foregoing, we do not sustain the
obviousness rejection of the independent claims 1, 10, and 19, and of the
associated dependent claims.
CONCLUSION
The Examiner’s decision to reject claims 1–6, 8–15, and 17–24 is
sustained.
In summary:
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1–6, 8–15,
17–24
101 Eligibility 1–6, 8–15,
17–24

1–6, 8–15,
17–24
112(b) Indefiniteness 1–6, 8–15,
17–24
1–6, 8–15,
17–24
102(a)(1) Palmer 1–6, 8–15,
17–24
1–6, 8–15,
17–24
103 Palmer, Negawa,
Warmus
1–6, 8–15,
17–24
Overall Outcome 1–6, 8–15,
17–24

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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)(l)(iv).
AFFIRMED