14223623 - (D) (P.T.A.B. Oct. 23, 2019)

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Patent Trials and Appeals BoardOct 23, 2019

14223623 - (D) (P.T.A.B. Oct. 23, 2019)

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. 14/223,623 03/24/2014 Robert TAKETOMO 1011571-00015 8807 22904 7590 10/23/2019 LOCKE LORD LLP 600 TRAVIS SUITE 2800 HOUSTON, TX 77002-3095 EXAMINER LE, LINH GIANG ART UNIT PAPER NUMBER 3686 NOTIFICATION DATE DELIVERY MODE 10/23/2019 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): patent@lockelord.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte ROBERT TAKETOMO Appeal 2019-000588 Application 14/223,623 Technology Center 3600 Before ERIC B. CHEN, DANIEL N. FISHMAN, and ADAM J. PYONIN, Administrative Patent Judges. PYONIN, Administrative Patent Judge. DECISION ON APPEAL Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the Examiner’s rejection. Non-Final Act. 1. 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(a). Appellant identifies the real party in interest as Ventegra, Inc. See Appellant’s Brief (“Br.”) 1. We note the USPTO records list VENTEGRA, LLC, as Applicants. See Bib Data Sheet. Appeal 2019-000588 Application 14/223,623 2 STATEMENT OF THE CASE Introduction The Application is directed to “managing the cost of prescription drugs and other pharmaceutical products” by “determining a single reference price for a pharmaceutical product based upon the actual cost of the product and the availability of the product in the market.” Spec. ¶ 1. Claims 1–20 are pending; claims 1, 8, and 15 are independent. Br. 18–22. Claim 1 is reproduced below for reference (emphasis added): 1. A computer-based system for implementing computer-to- computer communication of high-volume disparate data, comprising: a central processing unit mounted within the computer- based system; a display electrically connected to the central processing unit and displaying computer-generated reference prices for pharmaceutical products; a data input unit in data communication with the central processing unit, the data input unit receiving disparate pricing and availability data for the pharmaceutical products from computing systems at multiple distributors of the pharmaceutical products, the disparate pricing and availability data received from the computing systems including Quantity on Hand (QOH), Actual Acquisition Cost (AAC), Wholesale Acquisition Cost (WAC), and Average Wholesale Price (AWP) for each pharmaceutical product from each distributor, the data input unit further receiving from the computing systems identification data including Package Size for the pharmaceutical products from a publisher of the identification data; and a storage device in data communication with the central processing unit, the storage device storing a PCM application, the PCM application being executed by the central processing unit to filter the disparate data received from the computing systems to remove unwanted or unneeded data and sort the remaining data into standardized groups, then communicate the filtered and sorted data to a computer-based PCM claims system Appeal 2019-000588 Application 14/223,623 3 by transforming the data to a reference price index (RPI) for each pharmaceutical product, including adding the AAC, WAC, or A WP for each pharmaceutical product, dividing the total by the QOH times the Package Size for each pharmaceutical product, the RPI representing a weighted cost that takes into account the latest cost and number of units available for each pharmaceutical product from each distributor thereof, resulting in reference prices that reflect actual cost and availability of the pharmaceutical product in the market, and using the RPI as a basis to establish a reference price for the pharmaceutical product, then uploading the RPI to the computer-based PCM claims system over a network connection automatically on a daily basis. Rejection Claims 1–20 are rejected under 35 U.S.C. § 101 for being patent ineligible. Non-Final Act. 3. OPINION We have reviewed the Examiner’s rejection in light of Appellant’s arguments. Arguments Appellant could have made but chose not to make are deemed to be waived. See 37 C.F.R. § 41.37(c)(1)(iv). We disagree with Appellant that the Examiner erred and adopt as our own the findings and reasons set forth by the Examiner, to the extent consistent with our analysis below. The Examiner determines the claims are patent ineligible under 35 U.S.C. § 101, because “the claimed invention is directed to a judicial exception (i.e., law of nature, natural phenomenon, or abstract idea) without significantly more.” Non-Final Action 3; see also Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 217 (2014) (Describing the two-step framework “for distinguishing patents that claim laws of nature, natural Appeal 2019-000588 Application 14/223,623 4 phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.”). After the docketing of this Appeal, the USPTO promulgated revised guidance on the application of § 101 (“Guidance”). See, e.g., USPTO’s 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Memorandum”). Under Step 2A of the Guidance, the office looks to whether the claim recites: (1) Prong One: 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) Prong Two: additional elements that integrate the judicial exception into a practical application (see MPEP §§ 2106.05(a)– (c), (e)–(h)). Only if a claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application, does the Office then continue under Step 2B to look 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 Memorandum, 84 Fed. Reg. 56. We agree with the Examiner’s determination the claims are not patent eligible; we add the following primarily for emphasis and clarification with respect to the Guidance. Appeal 2019-000588 Application 14/223,623 5 A. Step 2A, Prong One Pursuant to the Guidance, we agree with the Examiner that claim 1 recites an abstract concept. See Non-Final Act. 3. The claim recites a financial calculation for determining “a reference price for a given pharmaceutical product.” Spec. ¶ 12. Specifically, claim 1 recites a “data input unit” performing the following steps2: receiving disparate pricing and availability data for the pharmaceutical products from computing systems at multiple distributors of the pharmaceutical products, the disparate pricing and availability data received from the computing systems including Quantity on Hand (QOH), Actual Acquisition Cost (AAC), Wholesale Acquisition Cost (WAC), and Average Wholesale Price (AWP) for each pharmaceutical product from each distributor, the data input unit further receiving from the computing systems identification data including Package Size for the pharmaceutical products from a publisher of the identification data. These steps relate to receiving information relating to pharmaceutical products. See, e.g., Spec. ¶ 45. The limitations are steps of observation and/or evaluation, which the Guidance provides comprise the abstract concept of “[m]ental processes.” Memorandum, 84 Fed. Reg. 52. Claim 1 further recites a “storage device in data communication with the central processing unit” performing the following steps: 2 In the event of further prosecution, the Examiner may wish to determine whether the claims are indefinite for reciting both a system and a method for using that system. See IPXL Holdings, L.L.C. v. Amazon.com, Inc., 430 F.3d 1377, 1384 (Fed. Cir. 2005) (“Because claim 25 recites both a system and the method for using that system, it does not apprise a person of ordinary skill in the art of its scope, and it is invalid under section 112, paragraph 2.”). Appeal 2019-000588 Application 14/223,623 6 storing a PCM application, the PCM application being executed by the central processing unit to filter the disparate data received from the computing systems to remove unwanted or unneeded data and sort the remaining data into standardized groups, then communicate the filtered and sorted data to a computer-based PCM claims system by transforming the data to a reference price index (RPI) for each pharmaceutical product, including adding the AAC, WAC, or AWP for each pharmaceutical product, dividing the total by the QOH times the Package Size for each pharmaceutical product, the RPI representing a weighted cost that takes into account the latest cost and number of units available for each pharmaceutical product from each distributor thereof, resulting in reference prices that reflect actual cost and availability of the pharmaceutical product in the market, and using the RPI as a basis to establish a reference price for the pharmaceutical product, then uploading the RPI to the computer- based PCM claims system over a network connection automatically on a daily basis. These steps relate to storing information, determining a reference price index (RPI) for each pharmaceutical product based on the information, and sending the RPI to another entity. Under the Guidance, these limitations are steps of evaluation, judgment, and/or opinion, and are thus the abstract concept of “[m]ental processes.” Memorandum, 84 Fed. Reg. 52; see also Versata Dev. Grp. v. SAP Am., Inc., 793 F.3d 1306, 1335 (Fed. Cir. 2015) (“Courts have examined claims that required the use of a computer and still found that the underlying, patent-ineligible.”). The limitations are also steps of “marketing or sales activities or behaviors[,] business relations[,] . . . and following rules or instructions,” which are “commercial or legal interactions” and “managing personal behavior or relationships or interactions between people.” Memorandum, 84 Fed. Reg. 52. Pursuant to Appeal 2019-000588 Application 14/223,623 7 the Guidance, the limitations are the abstract concept of “[c]ertain methods of organizing human activity.” Id. Accordingly, we conclude the claim recites an abstract idea under Prong One of the Guidance. Id. at 52, 54. B. Step 2A, Prong Two Appellant contends the Examiner’s rejection is in error, because “[t]he use of an RPI in the manner recited in the claims constitutes an inventive concept reflecting ‘non-conventional and non-generic arrangement of known conventional pieces’ that renders the claimed invention patent eligible.” Br. 11 (emphases omitted). Particularly, Appellant argues that “claim l’s ‘transforming’ limitation necessarily required that these generic components operate in an unconventional manner to achieve an improvement in computer functionality.” Br. 13. We are not persuaded the Examiner’s rejection is in error under Prong Two of Step 2A of the Guidance. Appellant’s arguments focus on the “transforming the data to a reference price index (RPI)” limitation (see, e.g., id.); however, as discussed above, this limitation is part of the recited judicial exception and does not comprise an additional element imparting eligibility. See Memorandum at 55, n. 24 (“USPTO guidance uses the term ‘additional elements’ to refer to claim features, limitations, and/or steps that are recited in the claim beyond the identified judicial exception.”). “[U]nder the Mayo/Alice framework, a claim directed to a newly discovered law of nature (or natural phenomenon or abstract idea) cannot rely on the novelty of that discovery for the inventive concept necessary for patent eligibility.” Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1376 (Fed. Cir. 2016). Appeal 2019-000588 Application 14/223,623 8 Further, we are not persuaded the transforming limitation, even considered as an additional element, integrates the judicial exception into a practical application. Appellant argues the claim “reduc[es] large amounts of disparate data for purposes of computer-to-computer communication of that data” (Br. 12, emphasis omitted), but does not explain how less data is sent compared to conventional systems or that this limitation otherwise improves a computer or other technical system; rather, the limitations improve a financial or business matter (the pricing applied to the pharmaceutical product). The claim merely uses the ordinary capabilities of a general-purpose computer. See FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1095 (Fed. Cir. 2016) (“[T]he fact that the required calculations could be performed more efficiently via a computer does not materially alter the patent eligibility of the claimed subject matter.”); Memorandum 84 Fed. Reg. 55 (“The courts have also identified examples in which a judicial exception has not been integrated into a practical application: []An additional element merely recites the words ‘apply it’ (or an equivalent) with the judicial exception.”). Appellant further compares the current claims to claims of various granted patents. See Br. 13 (“As can be seen, each limitation recited by the claim in Amdoc[3] corresponds almost exactly to a limitation in currently pending claim 1.”); App. 15 (“As can be seen, other than its length, claim 1 of Miller[4] is virtually identical to the currently pending claims in nature and character.”). As discussed above, however, we do not find error in the 3 Amdoc (Israel) Ltd v. Openet Telecom Inc., 841 F.3d 1288 (Fed. Cir. 2016). 4 US Patent No. 9,779,631, issued Oct. 3, 2017. Appeal 2019-000588 Application 14/223,623 9 Examiner’s rejection because—unlike the claims at issue in Amdocs—the present claims do not provide a technical improvement. See Ans. 7. Further, Appellant’s analogy to other patent claims does not persuasively show the Examiner errs. See BlackLight Power v. Rogan, 295 F.3d 1269, 1273–1274 (Fed. Cir. 2002) (quoting In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994) (“the Commissioner has an obligation to refuse to grant a patent if . . . doing so would be contrary to law.”).5 Accordingly, we determine claim 1 does not integrate the judicial exception into a practical application. See Memorandum, 84 Fed. Reg. 54. As the “claim recites a judicial exception and fails to integrate the exception into a practical application” (id. at 51), “the claim is directed to the judicial exception” (id. at 54). C. Step 2B Pursuant to step 2B of the Guidance, we agree with the Examiner the claimed additional elements are “are recited at a high level of generality, [and] provide conventional computer functions that do not add meaningful limits to practicing the abstract idea.” Non-Final Act. 3; see also Memorandum, 84 Fed. Reg. 56. We find the Examiner’s analysis to be reasonable. See, e.g., Spec. ¶ 27 (“While a developer’s efforts might be complex and time consuming in an absolute sense, such efforts would nevertheless be a routine undertaking for those of skill in this art having the 5 Separately, in the event of further prosecution, the Examiner may wish to consider whether the patent claims cited by Appellant may constitute the basis of rejection(s) under anticipation or obviousness. Additionally, Appellant may wish to consider whether a derivation proceeding may be warranted. See MPEP 2310. Appeal 2019-000588 Application 14/223,623 10 benefit of this disclosure.”); see also Spec. ¶¶ 2–10, 33–38, 40; Alice, 573 U.S. at 226. Accordingly, we are not persuaded the Examiner errs in determining claim 1 does not include an inventive concept which amounts to significantly more than the exception itself. See Non-Final Act. 3–7; Memorandum at 56. Pursuant to the Guidance, we agree with the Examiner that claim 1 is patent ineligible. See Memorandum at 51. Appellant advances no further substantive argument on the remaining claims. See Br. 8–22. Accordingly, we sustain the Examiner’s rejection of claims 1–20 for the reasons discussed above. CONCLUSION Claims Rejected 35 U.S.C. § Affirmed Reversed 1–20 101 1–20 TIME PERIOD FOR RESPONSE No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R. § 1.136(a)(1)(iv). AFFIRMED