NETSUITE INC.

Patent Trials and Appeals Board

Jul 20, 2020

2020002345 (P.T.A.B. Jul. 20, 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.
14/262,447 04/25/2014 Alfredo DIMAUNAHAN ORA180044 (NS-83) 9669
51444 7590 07/20/2020
Kraguljac Law Group/Oracle
4700 Rockside Road
Summit One, Suite 510
Independence, OH 44131
EXAMINER
POUNCIL, DARNELL A
ART UNIT PAPER NUMBER
3621
NOTIFICATION DATE DELIVERY MODE
07/20/2020 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):
DDay@KragLaw.com
MPusti@KragLaw.com
PTOMail@KragLaw.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte ALFREDO DIMAUNAHAN, DONNABELLE EMBUSCADO,
YUKTE OBEROI, SEAN KENNEDY, and BRAD STOUTIMORE

Appeal 2020-002345
Application 14/262,447
Technology Center 3600
____________

Before DONALD E. ADAMS, RICHARD M. LEBOVITZ, and
ELIZABETH A. LAVIER, Administrative Patent Judges.

LEBOVITZ, Administrative Patent Judge.

DECISION ON APPEAL
The Examiner rejected the claims under 35 U.S.C. § 101 as reciting
patent ineligible subject matter. Pursuant to 35 U.S.C. § 134(a), Appellant1
appeals from the Examiner’s decision to reject the claims. We have
jurisdiction under 35 U.S.C. § 6(b).
We REVERSE.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42. Appellant identifies the real party in interest as Oracle
International Corporation. Appeal Br. 2.
Appeal 2020-002345
Application 14/262,447

2
STATEMENT OF THE CASE
The Examiner rejected claims 1–14 under 35 U.S.C. § 101 “because
the claimed invention is directed to a judicial exception (i.e., an abstract
idea) without significantly more.” Final Act. 2.
There are two independent claims on appeal, rejected claims 1 and 8.
Claim 1 is directed to a method; claim 8 is directed to a system with
processors programed with instructions to carry out substantially the same
method steps as in claim 1. Claim 1 is representative. The claim is
reproduced below, annotated with bracketed numbers and letters to reference
the specific limitations discussed in this decision:
1. A method of providing a promotional offer for a customer,
comprising:
[1] providing content to a tenant terminal, wherein the
content is for a user interface configured to receive conditions
that are to be satisfied by the customer for the customer to be
eligible for the promotional offer, wherein the conditions define
a customer’s eligibility for the promotional offer in terms of:
[1a] an item to be placed in a customer’s shopping
cart, wherein the customer's shopping cart is to be created by a
customer terminal operated by the customer;
[1b] one or more sources of business related data to
be used to determine the customer's eligibility for the offer,
wherein the business related data is maintained by a plurality of
integrated business systems of a multi-tenant platform;
[1c] one or more values that the business related
data from each of the sources of business related data is to have
for the customer to be eligible for the promotional offer; and
[1d] one or more logical relations between the
sources of business related data and the one or more values of the
business related data to be satisfied for the customer to be eligible
for the promotional offer; and
[2] generate a set of instructions that are executable to
control application of the promotional offer, and store the set of
instructions in the data storage system of the multi-tenant
Appeal 2020-002345
Application 14/262,447

3
platform, wherein the set of instructions, when executed, cause
one or more processors participating in a transaction involving
the item to:
[2a] obtain the business related data from the
plurality of integrated business systems of the multi-tenant
platform,
[2b] identify the item in the customer's shopping
cart prior to the customer completing a payment transaction for
the item,
[2c] determine the one or more values of the
business related data to be used to determine eligibility for the
offer,
[2d] determine if the customer is eligible for the
promotional offer by evaluating the one or more logical relations
between sources of the business related data and the one or more
values of the business related data, and
[2e] in response to determining that the customer is
eligible for the promotional offer, control transmission of the
promotional offer to be applied to the item in the customer’s
shopping cart presented by the customer terminal.

Appeal Br. 26–27 (Claims Appendix).

PRINCIPLES OF LAW
Under 35 U.S.C. § 101, an invention is patent-eligible if it claims a
“new and useful process, machine, manufacture, or composition of matter.”
However, not every discovery is eligible for patent protection. Diamond v.
Diehr, 450 U.S. 175, 185 (1981). “Excluded from such patent protection are
laws of nature, natural phenomena, and abstract ideas.” Id. The Supreme
Court articulated a two-step analysis to determine whether a claim falls
within an excluded category of invention. Alice Corp. Pty. Ltd. v. CLS Bank
Int’l, 134 S.Ct. 2347 (2014); Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012).
Appeal 2020-002345
Application 14/262,447

4
In the first step, it is determined whether the claims at issue recited
one of those patent-ineligible concepts. Alice, 134 S.Ct. at 2355. If it is
determined that the claims recite an ineligible concept, then the second step
of the two-part analysis is applied in which it is asked “[w]hat else is there in
the claims before us?” Id. The Court explained that this step involves 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.’”
Alice, 134 S.Ct. at 2355 (citing from Mayo, 566 U.S. at 75–77).
Alice, relying on the analysis in Mayo of a claim directed to a law of
nature, stated that in the second part of the analysis, “the elements of each
claim both individually and ‘as an ordered combination’” must be
considered “to determine whether the additional elements ‘transform the
nature of the claim’ into a patent-eligible application.” Alice, 134 S.Ct. at
2355.
The PTO published guidance on the application of 35 U.S.C. § 101.
USPTO’s January 7, 2019 Memorandum, 2019 Revised Patent Subject
Matter Eligibility Guidance, 84 Fed. Reg. 50, 51–57 (2019) (“Eligibility
Guidance”). This guidance provides additional direction on how to
implement the two-part analysis of Mayo and Alice.
Step 2A, Prong One, of the 2019 Guidance, looks at the specific
limitations in the claim to determine whether the claim recites a judicial
exception to patent eligibility. In Step 2A, Prong Two, the claims are
examined to identify whether there are additional elements in the claims that
integrate the exception in a practical application, namely, is there a
“meaningful limit on the judicial exception, such that the claim is more than
Appeal 2020-002345
Application 14/262,447

5
a drafting effort designed to monopolize the judicial exception.” 84 Fed.
Reg. 54 (2. Prong Two).
If the claim recites a judicial exception that is not integrated into a
practical application, then as in the Mayo/Alice framework, Step 2B of the
Eligibility Guidance instructs us to determine whether there is a claimed
“inventive concept” to ensure that the claims define an invention that is
significantly more than the ineligible concept, itself. 84 Fed. Reg. 56.
With these guiding principles in mind, we proceed to determine
whether the claimed subject matter in this appeal is eligible for patent
protection under 35 U.S.C. § 101.

DISCUSSION
Claim 1 is directed to a “method.” Following the first step of the
Mayo/Alice analysis, we find that the claim is directed a “process,” and
therefore falls into one of the broad statutory categories of patent-eligible
subject matter under 35 U.S.C. § 101. We thus proceed to Step 2A, Prong
One, of the Eligibility Guidance.

Step 2A, Prong One
In Step 2A, Prong One, of the Eligibility Guidance, the specific
limitations in the claim are examined to determine whether the claim recites
a judicial exception to patent eligibility, namely whether the claim recites an
abstract idea, law of nature, or natural phenomenon.
We first begin by addressing the specific limitations in the claim to
discern whether abstract ideas are recited in them. The Eligibility Guidance,
based on the case law, identified three categories of abstract ideas: certain
methods of organizing human activity, mathematical concepts, and mental
Appeal 2020-002345
Application 14/262,447

6
processes. Eligibility Guidance, 84 Fed. Reg. 82. We thus begin by
searching the claim limitations for these concepts.
The first step of the claim is “providing content to a tenant terminal.”
A “tenant” is a merchant. Spec. ¶ 4–6. The “content” is information used to
determine whether a customer is eligible for a promotional offer. A
customer’s eligibility to receive a promotion is based on limitations [1a]–
[1d].
[1a] recites an item placed in the customer’s shopping cart.
[1b] recites sources of “business related data” to be used to determine
the customer’s eligibility for the promotion. The Specification discloses that
business data can be “inventory levels, financial operations, salesperson
activity, customer behavior (such as prior purchases or product views), etc.”
Spec. ¶ 7. See also Spec. ¶ 6 for other examples of business related data.
[1c] recites the values that the business related data is to have for the
customer to be eligible for a promotional offer.
[1d] is “one or more logical relations between the sources of business
related data [in 1b] and the one or more values of the business related data
[in 1c] to be satisfied for the customer to be eligible for the promotional
offer.”
In step [2] of the claim, instructions are generated that, when
executed, control application of the promotional offer to the item in the
shopping cart ([1a]). These steps involve obtaining the business related data
([2a]), identifying the item in the customer’s shopping cart ([2b]),
determining the values of the business related data ([2c]), and determining if
the customer is eligible for the promotion offer by evaluating the logical
Appeal 2020-002345
Application 14/262,447

7
relations ([2d]). Each of the steps use the data identified in the step [1] ([1a]–
[d]).
We consider at least steps [2c] and [2d] of the claim to be mental
processes, and abstract ideas,2 because a human could make the
determination of the value of the business related data in step [2c] and
evaluate in step [2d] if a customer is eligible for an offer based on the logical
relations.
Specifically, Appellant identifies paragraphs 12 and 48 of the
Specification as written description support for the values of the business
related data of [2c], but these paragraphs do not explain how the values are
chosen. Appeal Br. 4–5. We find that the values could be chosen by the
human mind by evaluating or judging how much value to assign to each
business related data. Accordingly, the values are derived by a mental
process and therefore represent an abstract idea.
In [2d], “one or more logical relations between sources of the business
related data and the one or more values of the business related data” is
evaluated. Appellant identifies paragraphs 12 and 48 of the Specification for
a description of this limitation. Paragraph 48 recites substantially the same
wording that appears in the claim: “One or more logical relations between
data sources and data source values that must be present in order for the
promotional offer to be valid or available.” Spec. ¶ 48. Neither this
paragraph nor paragraph 12 does describes how the logical relation is
determined or derived. Because we have not been directed to guidance in the

2 One category identified by the courts as an “abstract idea” is “mental
processes” which are “concepts performed in the human mind (including an
observation, judgement, opinion). Eligibility Guidance, 84 Fed. Reg. 52.

Appeal 2020-002345
Application 14/262,447

8
Specification as to how the logical relation is determined, we interpret it to
encompass a mental process in which the merchant determines what value of
the specific business data must be met for a customer to be eligible for an
offer.
The last step [2e] of the claim is controlling the transmission of the
promotional offer to be applied to the item in the shopping cart in response
to determining in step [2d] that a customer is eligible for the offer. We do
not consider this step of the claim to be an abstract idea.
The Examiner found that the claims are also directed to the abstract
idea category of certain methods of organizing human activity. Final Act. 4.
We agree with the Examiner’s determination that the claims recite certain
methods of organizing human activity. Specifically, claim 1 comprises steps
of determining whether a customer is eligible for a promotional offer (step
[2d]) and then applying the offer to the item in a shopping cart (step [2e]).
Providing a customer with a promotional offer to buy an item is a form of
“sales activities,” which the Eligibility Guidance identifies as a method of
organizing human activity. Eligibility Guidance, 84 Fed. Reg. 52.
In sum, for the foregoing reasons, we find that claim 1 recites an
abstract idea. Accordingly, we proceed to Step 2A, Prong Two, of the
Eligibility Guidance.

Step 2A, Prong Two
Prong Two of Step 2A under the 2019 Eligibility Guidance asks
whether there are additional elements that integrate the exception into a
practical application. As in the Mayo/Alice framework, we must look at the
claim elements individually and “as an ordered combination” to determine
whether the additional elements integrate the recited abstract idea into a
Appeal 2020-002345
Application 14/262,447

9
practical application. The Eligibility Guidance explains that “[a] claim that
integrates a judicial exception in a practical application will apply, rely on,
or use the judicial exception in a manner that places a meaningful limit on
the judicial exception, such that the claim is more than a drafting effort
designed to monopolize the judicial exception.” Eligibility Guidance, 84
Fed. Reg. 54. Integration into a practical application is evaluated by
identifying whether there are additional elements individually, and in
combination, which go beyond the judicial exception. Eligibility Guidance,
84 Fed. Reg. 54–55.
The October 2019 Update to Subject Matter Eligibility3 explains that
“first the specification should be evaluated to determine if the disclosure
provides sufficient details such that one of ordinary skill in the art would
recognize the claimed invention as providing an improvement.” PEG Update
12. Thus, we turn to the Specification.
The Specification states that “[c]onventional approaches to specifying
characteristics of promotions fail to provide a business with the ability to
customize such promotions to customers based on relevant business data,
such as inventory levels, financial operations, salesperson activity, customer
behavior (such as prior purchases or product views), etc.” Spec. ¶ 7. The
Specification further states that “[t]ypically, a business is limited to static
types of promotions that are based on a fixed percentage off, an amount off
if an amount purchased exceeds a threshold, buy-one-get-one (BOGO) type
offers, an offer of free shipping, etc. where such offers must be defined

3 Available at
https://www.uspto.gov/sites/default/files/documents/peg_oct_2019_update.p
df (last accessed Jul. 3, 2020) (“PEG Update”).

Appeal 2020-002345
Application 14/262,447

10
without reference to variable quantities.” Id. The Specification also discloses
that the “conventional approaches” do not provide systems and methods that
permit customizable promotions using business data. Spec. ¶¶ 6, 7.
To address this problem, the Specification discloses a system in which
promotional offer(s) may be configured to suit the tenant’s short
term and/or long term business needs, such as to encourage
purchase of a particular product or service at a particular time, to
encourage a purchase in response to a particular business event
or situation, to encourage a purchase in response to a particular
action or lack of action by the consumer, to encourage a purchase
in response to a particular inventory level or revenue amount of
the tenant, to encourage a purchase in response to determining
that the consumer was the object of a sales pitch from one of the
tenant’s salespeople, etc.
Spec. ¶ 9.
The Specification explains that the systems and methods use business
related data (see claim 1, [1b], [2a], [2c], [2d]) to implement these
customizable promotional offers. Spec. ¶¶ 10, 11, 29, 30. Consistent with the
Specification disclosure, Appellant describes the claims as “enabl[ing] the
creation of custom promotional offers, and controls transmission of the
promotional offer to be applied to an item in a customer’s shopping cart.”
Appeal Br. 13. Appellant contends that the claimed subject matter is a
“practical application for controlling transactions for the sales of items in
‘consideration of the tenant’s [the merchant] current inventory, cash flow,
competitive environment, salesforce performance, season, day of month, tax
situation, currency values, etc.’ as explained in ¶ [0006] of the present
application.” Appeal Br. 13. Appellant further argues:
The limitations recited in claim 1 overcome the technical
shortcomings of previous multi-tenant platforms, by adding new
functionality to such platforms. Such limitations are meaningful
Appeal 2020-002345
Application 14/262,447

11
limitations that improve existing technological processes of
controlling promotional offers available on a multi-tenant
platform. Claim 1 is thus not directed to an abstract idea, and is
patent eligible.
Appeal Br. 15.
The Specification clearly identifies the use of business related data for
determining the eligibility for a promotional offer as the improvement over
conventional methods for providing promotional offers. This improvement is
reflected in steps [2a], [2c], and [2d] of the claim in which the values of the
business related data is determined (from [1c]) and the logical relations
between the sources of the business data and the business data values is
evaluated (from [1d]). The promotion is applied in [2e] based on the
evaluation of the preceding step [2d]. The issue is whether these steps confer
eligibility on the abstract idea in the claim. To reach this issue, we must ask
“[w]hat else is there in the claims before us” other than the recited abstract
idea. Alice, 134 S.Ct. at 2355. Alice, referring to the “what else” as
“additional elements,” directs the § 101 analysis to be a search for additional
elements in the claim, apart from the abstract idea, that transform the claim
into a patent-eligible practical application. Id.
The steps that Appellant identifies as the improvement to
conventional systems are step [2c] of determining of business related data
values and step [2d] of evaluating the relationship between these values and
the sources of the business related data. We do not consider these steps to be
integral to the abstract idea involving sales activities because the evidence
from the Specification, and uncontroverted by the Examiner, is that these
steps are not part of the conventional practice in which promotional offers
are made. However, as explained above, these steps could be performed in
Appeal 2020-002345
Application 14/262,447

12
the human mind and therefore are abstract and cannot serve as the “what
else” in the claim to transform the abstract idea into a patent-eligible subject
matter.
In making this determination, it is instructive to distinguish McRO,
Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016) in
which method steps were considered adequate to confer patent eligibility.
In McRO, the claim was directed to a “method for automatically
animating lip synchronization and facial expression of three-dimensional
characters.” McRO, 837 F.3d, 1307–08. The claim recited a series of steps
that “produce[d] lip synchronization and facial expression control of said
animated characters.” Id. The court found that the claimed “automation goes
beyond merely ‘organizing [existing] information into a new form’ or
carrying out a fundamental economic practice.” McRO, 837 F.3d at 1315
(citation omitted). Instead, the court found that the “claimed process uses a
combined order of specific rules that renders information into a specific
format that is then used and applied to create desired results: a sequence of
synchronized, animated characters.” Id. McRO found that the recited rules
“are limiting in that they define morph weight sets as a function of the
timing of phoneme sub-sequences.” Id. at 1313. The claims were found to be
directed to a “technological improvement over the existing, manual 3-D
animation techniques.” Id. at 1316.
Here, steps [2c] and [2d] do not identify how these determinations of
business related data values and logical relations are accomplished.
Similarly, step [2e] controls transmission of the promotional offer based on
the determination in step [2d], but does not recite specifically how the
transmission is controlled. Unlike in McRO where specific rules were recited
Appeal 2020-002345
Application 14/262,447

13
in the claim as to how the result is accomplished, the steps in claim 1 direct a
determination to be made, but do not disclose how to implement the
determination. The steps are stated with such generality, that the recited
abstract idea of managing sales activities with a promotional offer would be
preempted. As explained in McRO, the “limitations in claim 1 prevent
preemption of all processes for achieving automated lip-synchronization of
3–D characters.” McRO, 837 F.3d at 1315. The court held that “[t]he
specific structure of the claimed rules would prevent broad preemption of all
rules-based means of automating lip synchronization.” Id. McRO noted that
the “abstract idea exception has been applied to prevent patenting of claims
that abstractly cover results where ‘it matters not by what process or
machinery the result is accomplished.’” [O’Reilly v. Morse, 56 U.S. (15
How.) 62, 113,]; see also Mayo, 132 S.Ct. at 1301.” McRO, 837 F.3d at
1314. McRO stated that therefore, a court must “look to whether the claims
in these patents focus on a specific means or method that improves the
relevant technology or are instead directed to a result or effect that itself is
the abstract idea and merely invoke generic processes and machinery.”
McRO, 837 F.3d at 1314. Rejected claim 1 does not identify a specific
means or method by which the determinations in step [2c] and [2d] and the
transmission of the promotion in step [2e] are made.
In sum, we have not been guided to an additional element in the
claim, beyond the abstract idea, that integrates the judicial exception in
practical application.
Appeal 2020-002345
Application 14/262,447

14
Step 2B
Because we determined that the judicial exception is not integrated
into a practical application, we proceed to Step 2B of the Eligibility
Guidelines, which asks whether there is an inventive concept. In making this
Step 2B determination, we must consider whether there are specific
limitations or elements recited in the claim “that are not well-understood,
routine, conventional activity in the field, which is indicative that an
inventive concept may be present” or whether the claim “simply appends
well-understood, routine, conventional activities previously known to the
industry, specified at a high level of generality, to the judicial exception,
indicative that an inventive concept may not be present.” Eligibility
Guidance, 84 Fed. Reg. 56 (footnote omitted). We must also consider
whether the combination of steps perform “in an unconventional way and
therefore include an ‘inventive step,’ rendering the claim eligible at Step
2B.” Id. In this part of the analysis, 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.” Alice, 134 S.Ct. at 2355.
Appellant argues that the Examiner did not address all the claim
limitations recited in the claim, and determine based on the combination of
limitations, whether the method performed the customized promotional offer
in a routine and conventional way. See, e.g., Appeal Br. 16–19. Appellant
argues that the Examiner did not satisfy the burden under Berkheimer v. HP
Inc., 881 F.3d 1360 (Fed. Cir. 2018) of establishing that the combination of
elements were well-understood, routine, and conventional. Appeal Br. 20.
The Examiner responded that the “claims are mere instructions to implement
Appeal 2020-002345
Application 14/262,447

15
an abstract idea on a computer or merely uses a computer as a tool to
perform the abstract idea.” Ans. 7. The Examiner also argued that the
additional elements in the claim of the tenant terminal in [1], [2e], shopping
cart in [1a] and [2e], and data storage in [2] “are generic computer elements
that taken individually or in combination amount to no more than mere
instruction to implement the idea on a computer and do not appear to
improve the functioning of a computer or another technology of technical
field.” Id. at 8.
We agree with Appellant that the Examiner did not meet the burden
under Berkheimer. While the shopping cart and tenant terminal when
considered alone might be generic because a shopping cart at merchant
terminal was known prior to the filing date of the application, these
additional elements must be considered in combination with the other steps
recited in the claim. The claim requires that tenant terminal controls delivery
of a promotional offer to the shopping cart based on the business related data
in step [2c] and the logical relations in step [2d] using the business related
data and sources. The Examiner did not establish that using the business
related data in this way to determine when a tenant terminal places a
promotional offer in shopping cart as recited in step [2e] of the claim was
routine and conventional to one of ordinary skill in the art at the time the
application was filed. The Specification states that the business related data
described in paragraphs 6 and 7 was not used in conventional systems to
determine when to place a promotional offer in the shopping cart controlled
by the tenant terminal. The Examiner did not address the asserted non-
conventionality in how the steps recited in [2] of the claim enables the
transmission of a promotional offer to the shopping cart. While steps [2c]
Appeal 2020-002345
Application 14/262,447

16
and [2d] of the claim are abstract, like in Diehr, where the abstract idea was
used to control a physical process by determining when a compound was
cured in order to automatically open the mold, the abstract idea here is used
in an asserted non-conventional way to “control transmission” of a
promotional offer to a shopping cart by a tenant terminal. The Examiner did
not provide evidence to rebut this assertion.

Summary
For the foregoing reasons, we reverse the rejection of claim 1 under
§ 101. Independent claim 8 has substantially the same limitations as claim 1
and the rejection of it under § 101 is reversed, as well. Claims 2–7 and 9–14
depend from claims 1 and 8, and the rejection of these claims is reversed for
the same reasons.

CONCLUSION
In summary:
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–14 101 Eligibility 1–14

REVERSED