Smart SKUs Inc.

Patent Trials and Appeals Board

Sep 16, 2020

13684270 - (D) (P.T.A.B. Sep. 16, 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.
13/684,270 11/23/2012 Ronen Lazar P-78702-US 2591
49443 7590 09/16/2020
Pearl Cohen Zedek Latzer Baratz LLP
1500 Broadway
12th Floor
New York, NY 10036
EXAMINER
ZUKANOVICH, BRANDY A
ART UNIT PAPER NUMBER
3684
NOTIFICATION DATE DELIVERY MODE
09/16/2020 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):
Arch-USPTO@PearlCohen.com
USPTO@PearlCohen.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte RONEN LAZAR
____________

Appeal 2019-000429
Application 13/684,270
Technology Center 3600
____________

Before MURRIEL E. CRAWFORD, JOSEPH A. FISCHETTI, and
NINA L. MEDLOCK, Administrative Patent Judges.

MEDLOCK, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s
rejection of claims 1 and 3–17. An oral hearing in this appeal was held
July 1, 2020. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the term “Appellant” to refer to “applicant” as defined in 37 C.F.R.
§ 1.42. Our decision references Appellant’s Appeal Brief (“Appeal Br.,”
filed May 17, 2018) and Reply Brief (“Reply Br.,” filed October 23, 2018),
and the Examiner’s Answer (“Ans.,” mailed August 23, 2018), and Non-
Final Office Action (“Non-Final Act.,” mailed October 27, 2017). Appellant
identifies Smart SKUs Inc. as the real party in interest (Appeal Br. 1).
Appeal 2019-000429
Application 13/684,270

2
CLAIMED INVENTION
The claimed invention “relates generally to the sale of products and
services” and more specifically to
systems and methods for increasing the volume of sales
transactions between a single vendor and one or more
perspective buyers in a sales offering including one or more
identical or substantially identical and/or comparable products or
sets of products and/or services that are limited in quantity within
a specified time period, for example through a website on the
Internet
(Spec. ¶ 1).
Claims 1 and 16 are the independent claims on appeal. Claim 1,
reproduced below with bracketed notations added, is illustrative of the
claimed subject matter:
1. A computer-implemented method of providing a
volume and revenue maximizing retail sales platform comprising
the at least one of sequential, non-sequential, and sequence
independent steps of:
[(a)] transmitting, by a network server, at least one sales
offering of one or more comparable items associated with at least
one vendor to a plurality of potential buyers;
[(b)] receiving, via the network server, at least one
respective purchase offer, for at least one of the one or more
comparable items, from each of a plurality of interested buyers
during a sales offer period;
[(c)] determining, by an application computer processor,
a first average purchase offer comprising an average of at least a
portion of the plurality of purchase offers received from the
network server;
[(d)] comparing, by the application computer processor,
the first average purchase offer with at least one sales trigger
price associated with the at least one vendor;
Appeal 2019-000429
Application 13/684,270

3
[(e)] when the first average purchase offer is within a
predefined range associated with the at least one sales trigger
price, and when a first predefined volume of purchase offers has
been received:
executing, by the application computer processor, a
sale to each interested buyer whose purchase offer was
included in the determination of the first average purchase
offer; and
[(f)] when the first average purchase offer is not within
the predefined range associated with the at least one sales trigger
price, and the first predefined volume of purchase offers has been
received:
determining, by the application computer processor,
a second average purchase offer comprising an average of
the portion of the plurality of purchase offers considered
in the determination of the first average purchase offer
excluding at least one previously considered purchase
offer;
comparing, by the application computer processor,
the second average purchase offer with the at least one
sales trigger price associated with the at least one vendor;
and
executing, by the application computer processor, a
sale to each interested buyer whose purchase offer was
included in the determination of the second average
purchase offer when the second average purchase offer is
within the predefined range associated with the at least one
sales trigger price.
REJECTIONS
Claims 1 and 3–17 are rejected under 35 U.S.C. § 101 as directed to a
judicial exception without significantly more.
Claims 1, 3, and 5–17 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Growney et al. (US 2005/0187859 A1, published Aug. 25,
2005) (“Growney”) and Walker et al. (US 2002/0178071 A1, published
Nov. 28, 2002) (“Walker”).
Appeal 2019-000429
Application 13/684,270

4
Claim 4 is rejected under 35 U.S.C. § 103(a) as unpatentable over
Growney, Walker, and Boyd et al. (US 2004/0193489 A1, published
Sept. 30, 2004) (“Boyd”).
ANALYSIS
Patent-Ineligible Subject Matter
Appellant argues the pending claims as a group (Appeal Br. 8–17).
We select independent claim 1 as representative. The remaining claims
stand or fall with claim 1. See 37 C.F.R. §41.37(c)(1)(iv).
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.”
35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101
to include an implicit exception: “[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).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66 (2012), “for distinguishing patents that claim
laws of nature, natural phenomena, and abstract ideas from those that claim
patent-eligible applications of those concepts.” Alice Corp., 573 U.S. at 217.
The first step in that analysis is to “determine whether the claims at issue are
directed to one of those patent-ineligible concepts.” Id. If the claims are not
directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry
ends. Otherwise, the inquiry proceeds to the second step where the elements
of the claims are considered “individually and ‘as an ordered combination’”
to determine whether there are additional elements that “‘transform the
nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo,
Appeal 2019-000429
Application 13/684,270

5
566 U.S. at 79, 78). This is “a search for an ‘inventive concept’ — i.e., an
element or combination of elements that is ‘sufficient to ensure that the
patent in practice amounts to significantly more than a patent upon the
[ineligible concept] itself.’” Id. at 217–18 (alteration in original).
In rejecting the pending claims under 35 U.S.C. § 101, and treating
claim 1 as representative, the Examiner determined that the claims are
directed to auctioning items and, more specifically, to “executing a sale to
each interested buyer,” i.e., to a fundamental economic practice and,
therefore, to an abstract idea substantially similar to other concepts that
courts have held abstract (Non-Final Act. 4–6). The Examiner also
determined that the claims do not include additional elements sufficient to
amount to significantly more than the abstract idea itself (id. at 6–9).
After Appellant’s briefs were filed, and the Examiner’s Answer
mailed, the U.S. Patent and Trademark Office (the “USPTO”) published
revised guidance for use by USPTO personnel in evaluating subject matter
eligibility under 35 U.S.C. § 101. 2019 REVISED PATENT SUBJECT MATTER
ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50, 57 (Jan. 7, 2019) (the “2019
Revised Guidance”). That guidance revised the USPTO’s examination
procedure with respect to the first step of the Mayo/Alice framework by
(1) “[p]roviding 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
Appeal 2019-000429
Application 13/684,270

6
applications, and to all patents resulting from applications, filed before, on,
or after January 7, 2019. Id.2,3
Step One of the Mayo/Alice Framework (2019 Revised Guidance, Step 2A)
The first step in the Mayo/Alice framework, as mentioned above, is to
determine whether the claims at issue are “directed to” a patent-ineligible
concept, e.g., an abstract idea. Alice Corp., 573 U.S. at 217. This first step,
as set forth in the 2019 Revised Guidance (i.e., Step 2A), is a two-prong test;
in Step 2A, Prong One, we look to whether the claim recites a judicial
exception, e.g., one of the following three groupings of abstract ideas:
(1) mathematical concepts; (2) certain methods of organizing human
activity, e.g., fundamental economic principles or practices, commercial or
legal interactions; and (3) mental processes. 2019 Revised Guidance,
84 Fed. Reg. at 54. If so, we next consider whether the claim includes
additional elements, beyond the judicial exception, that “integrate the
[judicial] exception into a practical application,” i.e., that apply, rely on, or
use the judicial exception in a manner that imposes a meaningful limit on the

2 The 2019 Revised Guidance supersedes MANUAL OF PATENT EXAMINING
PROCEDURE (“MPEP”) § 2106.04(II) and also supersedes all versions of the
USPTO’s “Eligibility Quick Reference Sheet 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.”). Accordingly,
Appellant’s arguments challenging the sufficiency of the Examiner’s
rejection will not be addressed to the extent those arguments are based on
now superseded USPTO guidance.
3 The USPTO issued an update on October 17, 2019 (the “October 2019
Update: Subject Matter Eligibility,” available at https://www.uspto.gov/sites/
default/files/documents/peg_oct_2019_update.pdf) clarifying the
2019 Revised Guidance in response to comments received from the public.
Appeal 2019-000429
Application 13/684,270

7
judicial exception, such that the claim is more than a drafting effort designed
to monopolize the judicial exception (“Step 2A, Prong Two”). Id. at 54–55.
Only if the claim (1) recites a judicial exception and (2) does not integrate
that exception into a practical application do we conclude that the claim is
“directed to” the judicial exception, e.g., an abstract idea. Id.
We are not persuaded here that the Examiner erred in determining that
claim 1 is directed to an abstract idea. 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 claims 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 (including the claim language) that claim 1 focuses on an
abstract idea, and not on any improvement to technology and/or a technical
field.
The Specification is titled “Systems and Methods of Providing a
Volume and Revenue Maximizing Retail Sales Platform,” and describes, in
the Background section, that retailing typically employs a vendor-controlled
format whereby the vendor determines the non-negotiable fixed price at
which the products and/or services are sold (Spec. ¶ 6). To avoid losing out
on sales, where a retailer’s price is higher than the price being offered by a
competitor, some retailers employ a price match policy whereby they match
the price a competitor publishes for an identical product or service (id. ¶ 7).
Appeal 2019-000429
Application 13/684,270

8
Another sales format, known as the daily deal format, advertises discounted
pricing, e.g., 50–90% off suggested retail pricing, based on a minimum
volume of products or services purchased within a specified timeframe (id.
¶ 8). This sales format is conducive to selling a volume of products and
services, but it does not maximize revenue; many vendors also view heavily
discounted pricing as unsustainable and harmful to established product and
service brands (id.).
Auctions are an additional way to negotiate price based on consumer
demand (Spec. ¶ 9). And the Specification describes a number of different
auction formats (id. ¶¶ 10–17). None of these auction formats, however, is
“conducive to selling [a] volume of an identical or substantially identical
product or service and maximize[s] revenue in a single offering” (id. ¶ 18).
Therefore, according to the Specification, there is “currently” no system
available for use by vendors to
produce a single offering that maximizes a volume of sales of a
fixed number of identical or substantially identical units of a
product or service and maximizes revenue based on all consumer
interest in a product or service regardless of whether offers are
submitted at varying price levels and whether a bid falls below a
specified sales price
(id. ¶ 19).
The claimed invention is intended to address this shortcoming.
Claim 1, thus, recites a computer-implemented method of providing a
volume and revenue maximizing retail sales platform comprising:
(1) transmitting a vendor’s sales offering of one or more comparable items
to a plurality of potential buyers, i.e., “transmitting, by a network server, at
least one sales offering of one or more comparable items associated with at
least one vendor to a plurality of potential buyers” (step (a)); (2) receiving
Appeal 2019-000429
Application 13/684,270

9
purchase orders from each of a plurality of interested buyers, i.e., “receiving,
via the network server, at least one respective purchase offer, for at least one
of the one or more comparable items, from each of a plurality of interested
buyers during a sales offer period” (step (b)); (3) calculating a first average
purchase offer4 and comparing the first average purchase order to a sales
trigger price, which is the minimum price acceptable to the vendor, i.e.,
determining, by an application computer processor, a first
average purchase offer comprising an average of at least a
portion of the plurality of purchase offers received from the
network server; [and]
comparing, by the application computer processor, the
first average purchase offer with at least one sales trigger price
associated with the at least one vendor
(steps (c) and (d)); (4) if the first average purchase order is within a
predetermined range associated with the sales trigger price, and a first
predetermined volume of purchase orders has been received, executing a
sale to each buyer whose purchase offer was included in determining the
first average purchase offer, i.e.,
when the first average purchase offer is within a
predefined range associated with the at least one sales trigger
price, and when a first predefined volume of purchase offers has
been received:
executing, by the application computer processor, a
sale to each interested buyer whose purchase offer was
included in the determination of the first average purchase
offer
(step (e)); and (5) if a first predetermined volume of purchase orders has
been received but the first average purchase order is not within the

4 The Specification discloses a mathematical algorithm for calculating an
average offer price (see Spec. ¶¶ 59–67).
Appeal 2019-000429
Application 13/684,270

10
predetermined range, calculating a second average purchase offer by
excluding at least one previously considered purchase offer, comparing the
second average purchase order to the sales trigger price, and executing a sale
to each buyer whose purchase offer was included in determining the second
average purchase offer when the second average purchase offer is within the
predefined range, i.e.,
when the first average purchase offer is not within the
predefined range associated with the at least one sales trigger
price, and the first predefined volume of purchase offers has been
received:
determining, by the application computer processor,
a second average purchase offer comprising an average of
the portion of the plurality of purchase offers considered
in the determination of the first average purchase offer
excluding at least one previously considered purchase
offer;
comparing, by the application computer processor,
the second average purchase offer with the at least one
sales trigger price associated with the at least one vendor;
and
executing, by the application computer processor, a
sale to each interested buyer whose purchase offer was
included in the determination of the second average
purchase offer when the second average purchase offer is
within the predefined range associated with the at least one
sales trigger price
(step (f)). We agree with the Examiner that these limitations, when given
their broadest reasonable interpretation, recite conducting an auction of
items, which is a fundamental economic practice, i.e., one of certain
methods of organizing human activity that are judicial exceptions and,
therefore, an abstract idea. See 2019 Revised Guidance, 84 Fed. Reg. at 52.
See also Priceplay.com, Inc. v. AOL Advert., Inc., 83 F. Supp. 3d 577, 583
(D. Del. 2015) (“Auctions, competitive activities, and sales transactions are
Appeal 2019-000429
Application 13/684,270

11
all abstract ideas, and do not become non-abstract when combined and
conducted over the Internet.”), aff’d mem., 627 F. App’x 925 (Fed. Cir.
2016); Advanced Auctions LLC v. eBay Inc., No. 13CV1612 BEN (JLB),
2015 WL 1415265, at *4 (S.D. Cal. Mar. 27, 2015) (“Like hedging financial
risk, intermediated settlement, or using advertising as currency, an auction is
a ‘fundamental economic practice long prevalent in our system of
commerce.’ Alice Corp., [573 U.S. at 219].”).
Having concluded that claim 1 recites a judicial exception, i.e., an
abstract idea (Step 2A, Prong One), we next consider whether the claim
recites additional elements that integrate the judicial exception into a
practical application (Step 2A, Prong Two).
The only additional elements recited in claim 1, beyond the abstract
idea, are a “network server” and an “application computer processor” —
elements that, as the Examiner observed, are generic computer components
(Non-Final Act. 7), and disclosed as such in the written disclosure (see, e.g.,
Spec. ¶¶ 75, 76, 85, 86, 109, 115, 119, 132). We find no indication in the
Specification that the operations recited in claim 1 require any specialized
computer hardware or other inventive computer components, i.e., a
particular machine, invoke any allegedly inventive programming, or that the
claimed invention is implemented using other than generic computer
components to perform generic computer functions. See DDR Holdings,
LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (“[A]fter
Alice, there can remain no doubt: recitation of generic computer limitations
does not make an otherwise ineligible claim patent-eligible.”).
We also find no indication in the Specification that the claimed
invention effects a transformation or reduction of a particular article to a
Appeal 2019-000429
Application 13/684,270

12
different state or thing. Nor do we find anything of record, short of attorney
argument, that attributes an improvement in technology and/or a technical
field to the claimed invention or that otherwise indicates that the claimed
invention integrates the abstract idea into a “practical application,” as that
phrase is used in the 2019 Revised Guidance.5
Appellant argues that the § 101 rejection cannot be sustained because
the claims are directed to an improvement in computer-related technology
(Appeal Br. 8), i.e., an improvement in computer processing speed and
memory availability (id. at 10). Appellant notes that typical legacy online
auctions promote each item separately, determine a price for each item
separately, and process each transaction separately; therefore, according to
Appellant, “[i]n order to maximize volume, more transactions would be
required, requiring more processing power and more memory storage” (id.
at 9).
Appellant charges that these legacy systems also “cause tremendous
amounts of computer processing power and memory to be wasted,”
inasmuch as there may be multiple potential buyers vying for a few or only
one product or service, requiring processing and storing of separate
bids/offers, with the end result being that only one bid/offer is accepted
(Appeal Br. 9 (“[W]hile in the end only the winning bid/offer actually

5 The 2019 Revised Guidance references MPEP § 2106.05(a)–(c) and (e) in
describing the considerations that are indicative that an additional element or
combination of elements integrates the judicial exception, e.g., the abstract
idea, into a practical application. 2019 Revised Guidance, 84 Fed. Reg.
at 55. If the recited judicial exception is integrated into a practical
application, as determined under one or more of these MPEP sections, the
claim is not “directed to” the judicial exception.
Appeal 2019-000429
Application 13/684,270

13
required processing and storing by computer, many non-winning bids are
processed and stored, only to subsequently be rejected and discarded.”)).
Appellant also charges that non-willing bidders “often enter new/revised
bids on a second listing[,] which further tax[es] the processor and memory of
the system unnecessarily” (id.).
Appellant argues that in contrast to these legacy systems, the claimed
invention “provide[s] at least two clear improvements to the computer
technology, particularly improving the computer processing speed and
memory availability” (Appeal Br. 10). Appellant, thus, maintains that by
aggregating bids/offers from multiple buyers, determining a first average
purchase offer, and executing a sale for all the offers when the first average
purchase offer is within a predefined range, the computer is enabled to
process and store data for a larger volume of sales offers simultaneously
“(1) without requiring executing each [offer] individually, dramatically
decreasing required processing power; and (2) obviating the requirement for
multiple listings (thus decreasing database memory and processing
requirements significantly)” (id.). Appellant also maintains that by
determining a second average purchase offer, which excludes at least one
previously considered purchase offer, the computer is enabled to execute
“the simultaneous sale for a plurality of bids/offers . . . without wasting all
the processing and memory required for those bids/offers and without
necessitating additional processing and memory for new/revised bids/offers”
(id.).
The difficulty with Appellant’s arguments is that they, at best,
establish that the claimed invention provides an improved method of
auctioning items, i.e., an improved abstract idea, which is not enough for
Appeal 2019-000429
Application 13/684,270

14
patent eligibility. See SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1170
(Fed. Cir. 2018) (“[P]atent law does not protect such claims[, i.e., claims to
an asserted advance in the realm of abstract ideas], without more, no matter
how groundbreaking the advance.”). As the Examiner observes, and we
agree, although claim 1 may manifest some reduction in processing and
memory storage, this reduction is “a relative reduction [based on the volume
of orders to be processed] (i.e.[,] this procedure [requires] less offers [to be
individually] executed [and stored] than another procedure for executing
[and storing] offers), rather than an improvement to the computing
processes themselves in an effort reduce database memory and
processing requirements” (Ans. 7).
Contrary to Appellant’s assertion, we also find no parallel here
between claim 1 and the patent-eligible claims in Example 3 of the
USPTO’s “Examples: Abstract Ideas” (Appeal Br. 11 (arguing that “the
present claims are analogous with respect to their patent-eligibility to the
patent-eligible claims in Example 3 . . . provided in the ‘Abstract Idea
Examples (January 27, 2015)’ issued by the Office”)). 6
The claims in Example 3 are hypothetical claims modeled after the
technology in Research Corporation Technologies Inc. v. Microsoft Corp.,
627 F.3d 859 (Fed. Cir. 2010), not actual claims at issue in that case. In
Research Corp., the Federal Circuit determined that the claims were patent
eligible because the claimed invention presented “functional and palpable
applications in the field of computer technology” and addressed “a need in

6 Available at https://www.uspto.gov/sites/default/files/documents/
abstract_idea_examples.pdf, and referred to hereinafter as “Examples:
Abstract Ideas.”
Appeal 2019-000429
Application 13/684,270

15
the art for a method of and apparatus for the halftone rendering of gray scale
images in which a digital data processor is utilized in a simple and precise
manner to accomplish the halftone rendering.” Id. at 868–69. Addressing
hypothetical claim 1 in Example 3, the Office posits that claim 1,
when taken as a whole, does not simply describe the generation
of a blue noise mask via a mathematical operation and receiving
and storing data, but combines the steps of generating a blue
noise mask with the steps for comparing the image to the blue
noise mask and converting the resulting binary image array to a
halftoned image.
Examples: Abstract Ideas 9. The Office determines that this goes “beyond
the mere concept of simply retrieving and combining data using a
computer,” and that the claimed process further improves the functioning of
the computer itself in that it “allows the computer to use less memory,
results in faster computation times without sacrificing the quality of
resulting image as occurred in prior processes, and produces an improved
digital image.” Id. The Office, thus, concludes that the hypothetical claim is
an “an innovation in computer technology, namely digital image processing
. . . [and] reflects both an improvement in the functioning of the computer
and an improvement in another technology.” Id. We are not persuaded, for
the reasons set forth above, that claim 1 provides a comparable improvement
in computer functionality or an improvement in another technology.
We conclude, for the reasons outlined above, that claim 1 recites a
method of organizing human activity, i.e., an abstract idea, and that the
additional elements recited in the claim are no more than generic computer
components used as tools to perform the recited abstract idea. As such, they
do not integrate the abstract idea into a practical application. See Alice
Corp., 573 U.S. at 223–24 (“[W]holly generic computer implementation is
Appeal 2019-000429
Application 13/684,270

16
not generally the sort of ‘additional featur[e]’ that provides any ‘practical
assurance that the process is more than a drafting effort designed to
monopolize the [abstract idea] itself.’” (quoting Mayo, 566 U.S. at 77)).
Accordingly, we agree with the Examiner that claim 1 is directed to an
abstract idea.
Step Two of the Mayo/Alice Framework (2019 Revised Guidance, Step 2B)
Having determined under step one of the Mayo/Alice framework that
claim 1 is directed to an abstract idea, we next consider under Step 2B of the
2019 Revised Guidance, the second step of the Mayo/Alice framework,
whether claim 1 includes additional elements or a combination of elements
that provides an “inventive concept,” i.e., whether the additional elements
amount to “significantly more” than the judicial exception itself.
2019 Revised Guidance, 84 Fed. Reg. at 56.
Appellant argues that “[i]ndependent claim 1 includes additional
limitations that amount to significantly more than an abstract idea of
‘auctioning items’” (Appeal Br. 15). But, that argument is not persuasive at
least because the limitations that Appellant identifies as the inventive
concept, i.e., steps (e) and (f) recited in claim 1, are part of the abstract idea;
they are not additional elements to be considered when determining whether
claim 1 includes additional elements or a combination of elements sufficient
to amount to significantly more than the judicial exception.
It could not be clearer from Alice, that under step two of the
Mayo/Alice framework, the elements of each claim are considered both
individually and “as an ordered combination” to determine whether the
additional elements, i.e., the elements other than the abstract idea itself,
“transform the nature of the claim” into a patent-eligible application. Alice
Appeal 2019-000429
Application 13/684,270

17
Corp., 573 U.S. at 217 (internal quotations and citation omitted); see Mayo,
566 U.S. at 72–73 (requiring that “a process that focuses upon the use of a
natural law also contain other elements or a combination of elements,
sometimes referred to as an ‘inventive concept,’ sufficient to ensure that the
patent in practice amounts to significantly more than a patent upon the
natural law itself” (emphasis added) (internal citation omitted)). In other
words, the inventive concept under step two of the Mayo/Alice test cannot be
the abstract idea itself:
It is clear from Mayo that the “inventive concept” cannot be the
abstract idea itself, and Berkheimer . . . leave[s] untouched the
numerous cases from this court which have held claims ineligible
because the only alleged “inventive concept” is the abstract idea.
Berkheimer v. HP Inc., 890 F.3d 1369, 1374 (Fed. Cir. 2018) (Moore, J.,
concurring); see also BSG Tech LLC v. BuySeasons, Inc., 899 F.3d 1281,
1290 (Fed. Cir. 2018) (“It has been clear since Alice that a claimed
invention’s use of the ineligible concept to which it is directed cannot supply
the inventive concept that renders the invention ‘significantly more’ than
that ineligible concept.”) (internal citation omitted).
The Examiner determined here, and we agree, that the only claim
elements beyond the abstract idea are a “network server” and an “application
computer processor,” i.e., generic computer components used to perform
generic computer functions (Non-Final Act. 7) — a determination amply
supported by, and fully consistent with the Specification (see, e.g., Spec.
¶¶ 75, 76, 85, 86, 109, 115, 119, 132). Appellant cannot reasonably contend
that there is insufficient factual support for the Examiner’s determination
that the operation of these components is well-understood, routine, or
conventional, where, as here, there is nothing in the Specification to indicate
Appeal 2019-000429
Application 13/684,270

18
that the operations recited in claim 1 require any specialized hardware or
inventive computer components or that the claimed invention is
implemented using other than a generic computer component to perform
generic computer functions, e.g., receiving, transmitting, and processing
information. Indeed, the Federal Circuit, in accordance with Alice, has
“repeatedly recognized the absence of a genuine dispute as to eligibility”
where claims have been defended as involving an inventive concept based
“merely on the idea of using existing computers or the Internet to carry out
conventional processes, with no alteration of computer functionality.”
Berkheimer, 890 F.3d at 1373 (Moore, J., concurring) (internal citations
omitted); see also BSG Tech, 899 F.3d at 1291 (“BSG Tech does not argue
that other, non-abstract features of the claimed inventions, alone or in
combination, are not well-understood, routine and conventional database
structures and activities. Accordingly, the district court did not err in
determining that the asserted claims lack an inventive concept.”).
Appellant also misapprehends the controlling precedent to the extent
Appellant maintains that claim 1 is patent eligible because the claim does
not “preempt or tie up any alleged abstract idea” (Appeal Br. 16). Although
the Supreme Court has described “the concern that drives [the exclusion of
abstract ideas from patent-eligible subject matter] as one of pre-emption,”
Alice Corp., 573 U.S. at 216, characterizing preemption as a driving concern
for patent eligibility is not the same as characterizing preemption as the sole
test for patent eligibility. “The Supreme Court has made clear that the
principle of preemption is the basis for the judicial exceptions to
patentability” and “[f]or this reason, questions on preemption are inherent in
and resolved by the § 101 analysis.” Ariosa Diagnostics, Inc. v. Sequenom,
Appeal 2019-000429
Application 13/684,270

19
Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (citing Alice Corp., 573 U.S. at
216). “[P]reemption may signal patent ineligible subject matter, [but] the
absence of complete preemption does not demonstrate patent eligibility.” Id.
We are not persuaded, on the present record, that the Examiner erred
in rejecting independent claim 1 under 35 U.S.C. § 101. Therefore, we
sustain the Examiner’s rejection of claim 1, and claims 3–17, which fall with
claim 1.
Obviousness
Independent Claims 1 and 16 and Dependent Claims 3, 5–15, and 17
We are persuaded by Appellant’s argument that the Examiner erred in
rejecting independent claims 1 and 16 under 35 U.S.C. § 103(a) at least
because neither Growney nor Walker, individually or in combination,
discloses or suggests checking whether “a first predefined volume of
purchase offers has been received,” as called for in steps (e) and (f) of
claim 1, and similarly called for in claim 16 (Appeal Br. 4–6).
The Examiner acknowledges that Growney does not disclose the
argued feature, and cites paragraphs 278 and 279 of Walker to cure this
deficiency (Final Act. 10–13). However, we agree with Appellant that
although Walker discloses executing a sale of an individual item if the offer
price reaches or exceeds a trigger price, and executing a batch sale of
multiple items if the average offer price reaches or exceeds the trigger price,
we find nothing in the cited portion of Walker that discloses or suggests that
the sale is conditioned on whether a predefined volume of purchase offers
has been received (Appeal Br. 5).
Responding to Appellant’s argument, the Examiner asserts in the
Answer that “a broad, reasonable interpretation of ‘a first predetermined
Appeal 2019-000429
Application 13/684,270

20
volume of purchase offers has been received’ includes a batch process of
received offers (as shown in Walker)” (Ans. 4). But, as Appellant observes,
Walker discloses determining an average price for a batch process of orders
and comparing the average price to a price threshold, which is not the same
as comparing the volume of purchase offers to a volume threshold, as called
for in independent claims 1 and 16 (Reply Br. 1).
In view of the foregoing, we do not sustain the Examiner’s rejection
of independent claims 1 and 16 under 35 U.S.C. § 103(a). For the same
reasons, we also do not sustain the rejection of dependent claims 3, 5–15,
and 17. Cf. In re Fritch, 972 F.2d 1260, 1266 (Fed. Cir. 1992) (“dependent
claims are nonobvious if the independent claims from which they depend are
nonobvious”).
Dependent Claim 4
Claim 4 depends from independent claim 1. The rejection of claim 4
does not cure the deficiency in the Examiner’s rejection of claim 1.
Therefore, we do not sustain the Examiner’s rejection of dependent claim 4
for the same reasons set forth above with respect to independent claim 1.
CONCLUSION
In summary:
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1, 3–17 101 Eligibility 1, 3–17
1, 3, 5–17 103(a) Growney, Walker 1, 3, 5–17
4 103(a) Growney, Walker,
Boyd
4
Appeal 2019-000429
Application 13/684,270

21
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
Overall
Outcome
1, 3–17
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