Peilin Chou

Patent Trials and Appeals Board

Aug 1, 2019

14269025 - (D) (P.T.A.B. Aug. 1, 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.
14/269,025 05/02/2014 Peilin Chou 1042_C 6995
23899 7590 08/01/2019
DOUGLAS L WELLER
1832 Rosemary Drive
Gilroy, CA 95020
EXAMINER
HAQ, NAEEM U
ART UNIT PAPER NUMBER
3625
NOTIFICATION DATE DELIVERY MODE
08/01/2019 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):
USPTO@dockettrak.com
patents@dougweller.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte PEILIN CHOU
____________________

Appeal 2018-005507
Application 14/269,0251
Technology Center 3600
____________________
Before JASON V. MORGAN, DANIEL N. FISHMAN, and
DAVID J. CUTITTA II, Administrative Patent Judges.
CUTITTA, Administrative Patent Judge.
DECISION ON APPEAL
Appellant appeals under 35 U.S.C. § 134(a) from a final rejection of
claims 1–19, all of the claims pending in the application. We have
jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 Appellant identifies Bridgewell, Incorporated as the real party in interest.
See Appeal Br. 3.
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STATEMENT OF THE CASE
Invention
According to Appellant, the claimed invention relates to a
“collaborative bargaining system [that] awards a time limited exclusive
opportunity to one seller of [an] item to obtain from [an] interest group a
commitment to buy the minimum quantity of items at the price per item as
bid by the one seller.” Spec.¶ 2.2 When the interest group commits to buy
the minimum quantity of items, sales of the item are closed. See id.
Representative Claim
Claims 1, 8, and 15 are independent. Claim 8, reproduced below with
bracketed material added, is representative of the claimed subject matter:
8. A method performed by a collaborative bargaining
system comprising:
[(a)] placing potential buyers of an item into an interest
group for the item when the potential buyers of the item
indicate to the collaborative bargaining system an interest in
purchasing the item;
[(b)] notifying potential sellers of the item that the
interest group exists, the notification being performed through a
broadcast module of the collaborative bargaining system, the
broadcasting system using a contact channel to communicate
with each potential seller, the contact channel for each potential
seller being an e-mail channel, an internet messaging channel or
a short message service gate (SMSG) channel;

2 This Decision refers to: (1) Appellant’s Specification filed May 2, 2014
(Spec.); (2) the Final Office Action mailed December 29, 2017 (Final Act.);
(3) the Appeal Brief filed January 19, 2018 (Appeal Br.); (4) the Examiner’s
Answer mailed April 19, 2018 (Ans.); and (5) the Reply Brief filed May 5,
2018 (Reply Br.).
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[(c)] receiving by the collaborative bargaining system
bids from sellers of the item, each bid consisting of a price per
item based on a minimum quantity of items; and,
[(d)] awarding a time limited exclusive opportunity to
one seller of the item for the one seller, exclusive of other
sellers, to obtain from the potential buyers in the interest group
a commitment to buy the minimum quantity of items at the
price per item as bid by the one seller;
[(e)] notifying members of the interest group of the bid
by the one seller awarded the time limited exclusive
opportunity, the notification being performed through the
broadcast module of the collaborative bargaining system, the
broadcasting system using a contact channel to communicate
with each member, the contact channel for each member being
an e-mail channel, an internet messaging channel or a short
message service gate (SMSG) channel; and
[(f)] using a delivery system to physically transport any
items from possession of the potential seller to possession of
members of the interest group that purchase the items from the
potential seller.
Appeal Br. 19–20.
REJECTION
Claims 1–19 stand rejected under 35 U.S.C. § 101 as directed to
patent-ineligible subject matter. See Final Act. 8–15.
Our review in this appeal is limited to the above rejection and the
issues raised by Appellant. Arguments not made are waived. See MPEP
§ 1205.02; 37 C.F.R. § 41.37(c)(1)(iv).
ANALYSIS
I. Principles of Law
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
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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. E.g., Alice Corp. Pty. Ltd. 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 id. at 219
(“On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4
in petitioners’ application explain the basic concept of hedging, or protecting
against risk.”).
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 67–68 (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))).
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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.”).
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. “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.
The PTO recently published revised guidance on the application of
§ 101. See 2019 Revised Patent Subject Matter Eligibility Guidance, 84
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Fed. Reg. 50 (USPTO Jan. 7, 2019) (“Guidance”). Under that guidance, we
first look to whether the claim recites:
(1) any judicial exceptions, including certain groupings of abstract
ideas (i.e., mathematical concepts, certain methods of organizing
human activities such as a fundamental economic practice, or mental
processes); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP §§ 2106.05(a)–(c), (e)–(h) (9th ed.
Rev. 08.2017, Jan. 2018)).
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 Guidance, 84 Fed. Reg. at 56.

II. The Examiner’s § 101 Rejection
The Examiner determines that representative3 claim 8 is directed to a
judicial exception: an abstract idea. See Final Act. 3–4; Ans. 2–3.
According to the Examiner, claim 8 is “directed to bringing together buyers

3 Appellant presents substantially similar arguments for each of the
independent claims and thus argues the claims as a group. See generally
Appeal Br. 9–15. We, therefore, select independent claim 8 as
representative of claims 1–19. See 37 C.F.R. § 41.37(c)(1)(iv).
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and an exclusive seller of an item in order to obtain a commitment from the
buyers to buy a minimum quantity of items at the price per item offered by
the seller” and “[t]his is an abstract idea because it is similar to ‘organizing a
human activity’ and a ‘fundamental economic practice.’” Final Act. 3. The
Examiner also determines “[t]aking the additional elements individually, the
computer components perform purely generic computer functions” and
“[t]aking the additional elements in combination, the claims as a whole are
directed to an abstract idea that is implemented using generic, routine and
conventional components” and “[a]s such . . . [t]he claim does not amount to
significantly more than the abstract idea itself.” Id. at 7.
We analyze claim 8 and the Examiner’s rejection in view of the
Guidance and we adopt the nomenclature for the steps used in the Guidance.

III. Step 1 in the Guidance
Analyzing the Examiner’s rejection in view of the Guidance, we must
first determine whether the claim is directed to a statutory class of invention.
Section 101 provides that “[w]hoever invents or discovers any new and
useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof, may obtain a patent therefor, subject to the
conditions and requirements of this title.” 35 U.S.C. § 101. Independent
claim 8 recites a method. As such, the claim is directed to a statutory class
of invention within 35 U.S.C. § 101, i.e., a process.

IV. Step 2A, Prong One in the Guidance (Alice/Mayo, Step 1)
Next, we determine whether the claim, being directed to a statutory
class of invention, nonetheless falls within a judicial exception. See
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Guidance, 84 Fed. Reg. at 51. Apart from generic hardware and extra-
solution activity discussed separately in sections V and VI below, claim 8
recites: (a) “placing potential buyers of an item into an interest group for the
item”; (b) “notifying potential sellers of the item that the interest group
exists”; (c) “receiving . . . bids from sellers of the item, each bid consisting
of a price per item based on a minimum quantity of items”; (d) “awarding a
time limited exclusive opportunity to one seller . . . to obtain from the
potential buyers in the interest group a commitment to buy the minimum
quantity of items at the price per item as bid by the one seller”; and (e)
“notifying members of the interest group of the bid by the one seller.”
Appeal Br. 19–20.
At a high level, as determined by the Examiner, these claimed steps
“are directed to an invention that brings together buyers and an exclusive
seller of an item in order to obtain a commitment from the buyers to buy a
minimum quantity of items at the price per item offered by the seller.”
Ans. 3; see Final Act. 3. We therefore agree with the Examiner that these
limitations recite a fundamental economic practice as “[a] commitment from
a buyer to buy a quantity of goods from a seller implicitly creates a
contractual relationship between the buyer and the seller” similar to cases in
which “courts have ruled that creating a contractual relationship is an
abstract idea.” Final Act. 3 (citing buySAFE, Inc. v. Google, Inc., 765 F.3d
1350 (Fed. Cir. 2014) (“creating a contractual relationship—a ‘transaction
performance guaranty’”). Fundamental economic practices fall into the
category of certain methods of organizing human activity and claim 8,
therefore, recites a judicial exception, i.e., an abstract idea. See 84 Fed. Reg.
at 52.
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V. Step 2A, Prong Two in the Guidance
(Integration into a Practical Application)
Because claim 8 recites an abstract idea, we now determine whether
the claim integrates the abstract idea into a practical application, i.e.,
whether the claim is directed to an improvement to the underlying
technology. See, e.g., Alice, 573 U.S. at 223, discussing Diehr, 450 U.S. at
175. Under prong two of revised step 2A, we determine whether the recited
judicial exception is integrated into a practical application of that exception
by: (a) identifying whether there are any additional elements recited in the
claim beyond the judicial exception(s); and (b) evaluating those additional
elements individually and in combination to determine whether they
integrate the exception into a practical application. We use the term
“additional elements” to refer to features, limitations, or steps that the claim
recites beyond the abstract idea itself. Guidance, 84 Fed. Reg. at 55 n.24.
The Examiner determines that claim 8, “recite[s] the additional
limitations of a broadcast system, a contact channel (e.g. e-mail or
messaging), and a delivery system” and finds these components “are routine
and conventional.” Final Act. 7.
Appellant argues “[s]everal, if not all the elements are physical/non-
abstract with concrete functionality.” Appeal Br. 10.
We are not persuaded that the claimed abstract idea is integrated into a
practical application. Aside from the abstract idea, claim 8 recites: (a) “a
collaborative bargaining system”; (b) “a broadcast module” and a
“broadcasting system”4; (c) a contact channel; and (d) “a delivery system.”

4 Claim 8 alternatively and inconsistently recites a broadcast module and a
broadcasting system for performing the notifying steps in (b) and (e).
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These additional elements––considered in the context of claim 8 as a
whole––do not integrate the abstract idea into a practical application. See
Guidance, 84 Fed. Reg. at 55 nn. 25 & 27–32 (citing MPEP §§ 2106.05(a)–
(c), (e)–(h)). The additional limitations merely add generic computer
activity to communicate data and conventional activity to deliver goods,
which is insufficient to integrate the judicial exception into a practical
application. See MPEP § 2106.05(a). For instance, we agree with the
Examiner’s finding that “[a] broadcast system that uses a contact channel
such e-mail or SMSG is routine and conventional” because merely
“[c]ommunicating through e-mail, internet message channel, or short
message service channel (i.e. text messaging) is routine and conventional.”
Final Act. 8; Ans. 4–5. In addition, we agree with the Examiner’s finding
that “Appellant’s specification does not provide any specific details about
the physical structure of the ‘delivery system’ other than to show two boxes
labeled ‘Delivering’ in Figs. 1 and 2” and so the claimed delivery system is
“routine and conventional.” Ans. 5. Moreover, using a conventional
delivery system to physically transport goods is mere post-solution activity.
“Purely ‘conventional or obvious’ ‘post-solution activity’ is normally not
sufficient to transform an unpatentable law of nature into a patent-eligible
application of such a law.” Mayo, 566 U.S. at 79 (quoting Flook, 437 U.S. at
590).

Moreover “the broadcasting system” lacks antecedent basis. Claim 8 also
recites “a contact channel” twice. In view of these issues and in the event of
further prosecution, the Examiner should determine whether the claim meets
the requirements of 35 U.S.C. § 112, second paragraph, to particularly point
out and distinctly define the metes and bounds of the claimed subject matter.
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We agree with the Examiner that the solution addressed by
Appellant’s claim is a business problem, not a technical problem. Final
Act. 4 (“Bringing buyers and sellers together in order to conduct a business
transaction has long been prevalent in our economy and is a fundamental
economic practice.”). Rather than addressing a problem unique to the
technology in which the solution is implemented, Appellant’s claim 8
merely automates, using generic computer technology, a business process
that allows buyers to collectively bargain with sellers. As set forth in the
Specification, the invention “provides a creative way for buyers as well as
sellers to initiate and purchase goods” and which “reduces risk for the seller
and tends to minimize the price paid for goods by a buyer, creating a win-
win situation for buyers and sellers.” Spec. ¶ 8. Thus, claim 8 is directed to
collaborative bargaining, which is not an improvement to technology and
does not recite a particular solution to a technological problem or a
particular way to achieve a desired outcome by reciting an improvement to
technology. See MPEP § 2106.05 (a).
In addition, Appellant’s claimed additional elements do not require a
particular computer and so the claim also does not define or rely on a
“particular machine.” See MPEP § 2106.05(b). Further, the claim does not
transform matter; at best, it transforms information. That is, the claim
simply manipulates and outputs data such as by notifying members of the
interest group and potential sellers via the contact channel, e.g., using email.
See MPEP § 2106.05 (c); see also Benson, 409 at 71–72 (holding that a
computer based algorithm that merely transforms data from one form to
another is not patent-eligible). As such, the claim has no other meaningful
limitations (see MPEP § 2106.05 (e)), and merely recites instructions to
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execute an abstract idea on generic hardware (see MPEP § 2106.05 (f)),
along with insignificant extra-solution activity. See MPEP § 2106.05 (g).
We, therefore, determine claim 8 is not directed to a specific asserted
improvement in technology or otherwise integrated into a practical
application and thus is directed to a judicial exception.

VI. Step 2B in the Guidance (Alice/Mayo, Step 2) (Inventive Concept)
Because the claim does not integrate the judicial exception into a
practical application, we determine whether the additional elements of the
claim, individually or in combination, provide an inventive concept. See
Guidance, 84 Fed. Reg. at 56. To determine whether the claim provides an
inventive concept, the additional elements are considered—individually and
in combination—to determine whether they (1) add a specific limitation
beyond the judicial exception that is not “well-understood, routine,
conventional” in the field or (2) simply append well-understood, routine,
conventional activities previously known to the industry, specified at a high
level of generality, to the judicial exception. id.
The Examiner determines “[t]he use of generic computer components
to perform functions such as receiving, calculating, generating, transmitting,
defining and selecting, processing, inputting and (sequentially and
dynamically) evaluating does not impose any meaningful limit on the
computer implementation of the abstract idea.” Final Act. 10. Thus, “the
additional elements do not amount to significantly more than the above-
identified judicial exception (the abstract idea).” Id. We agree with the
Examiner. The Examiner finds (1) [t]aking the additional elements
individually,” claim 8 recites “a broadcast system, a contact channel (e.g. e-
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mail or messaging), and a delivery system,” which are “routine and
conventional” and (2) “[t]aking the additional elements in combination, the
claims as a whole are directed to an abstract idea that is implemented using
generic, routine and conventional components.” Final Act. 7.
Appellant argues the ordered combination of claim elements contains
an inventive concept. See Appeal Br. 11–15. Specifically, Appellant argues
claim 8 is directed to significantly more than the judicial exception because
(1) “[c]laim 8 sets out using a delivery system to physically transport any
items from possession of the potential seller to possession of members of the
interest group” and “transportation of goods is not an abstract idea” because
“[i]t requires physical movement of items from one location for another” and
(2) “[the] contact channel . . . is not an abstract idea” because [i]t requires
being able to communicate with multiple computing devices over
sophisticated communication networks” and “[t]here is nothing abstract
about such communication capability.” Appeal Br. 12.
Considering the claimed functions of those components, both
separately and as an ordered combination, we agree with the Examiner that
those functions are generic, routine, and conventional activities that are
performed only for their conventional uses in an ordinary manner. As noted
by the Examiner, “Appellant’s specification does not provide any specific
details about the physical structure of the ‘delivery system’ other than to
show two boxes labeled ‘Delivering’ in Figs. 1 and 2.” Accordingly, we
agree with the Examiner that delivery by “the US Postal service or a delivery
truck” would read on the claim and “[d]elivering a product through the US
postal service or a delivery truck is routine and conventional.” Ans. 4. We
also agree that “[c]ommunicating through e-mail, internet message channel,
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or short message service channel (i.e. text messaging) is routine and
conventional.” Ans. 4–5. Appellant, in turn, does not persuasively argue
that these elements operate in an unconventional manner. See generally
Appeal Br. 11–13. The claim recites the additional elements at a high level
of generality and the disclosure describes the elements in generalities. See,
e.g., Spec. ¶¶ 27, 31, 43, Figs. 1, 2. Appellant also fails to identify the
ordered combination in the claim that allegedly adds significantly more to
the abstract idea to provide an inventive concept. See Appeal Br. 11–15.
Appellant argues that claim 8 amounts to significantly more than the
judicial exception based on DDR Holdings and McRO.5 See Reply Br. 2–4.
We decline to consider such arguments raised for the first time in the Reply
Brief. These arguments are deemed waived, in the absence of a showing of
good cause by Appellant, because the Examiner has not been provided a
chance to respond. See 37 C.F.R. § 41.41(b)(2); In re Hyatt, 211 F.3d 1367,
1373 (Fed. Cir. 2000) (noting that an argument not first raised in the brief to
the Board is waived on appeal); Ex parte Nakashima, 93 USPQ2d 1834,
1837 (BPAI 2010) (informative) (explaining that arguments and evidence
not timely presented in the Appeal Brief, will not be considered when filed
in a Reply Brief, absent a showing of good cause). Appellant has provided
no such showing of good cause.
We, thus, conclude that claim 8 does not provide an inventive concept
because the additional elements recited in claim 8 do not recite significantly
more than the recited judicial exception. Accordingly, claim 8 does not

5 Citing DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed.
Cir. 2014) and McRO, Inc. v. Bandai Namco Games Am., 837 F.3d 1299
(Fed. Cir. 2016).
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recite patent-eligible subject matter. Because claim 8 is argued as
representative of the other claims, we also conclude that independent claims
1 and 15 and dependent claims 2–7, 9–14, and 16–19 do not recite patent-
eligible subject matter. Therefore, we sustain the rejection of claims 1–19
under 35 U.S.C. § 101 as being directed to patent-ineligible subject matter.

DECISION
We affirm the Examiner’s decision to reject claims 1–19 under
35 U.S.C. § 101.
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.
§ 41.50(f).
AFFIRMED