Theodore Crooks et al.

Patent Trials and Appeals Board

Jul 20, 2020

13274247 - (D) (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.
13/274,247 10/14/2011 Theodore James Crooks 372566-000014 5925
26379 7590 07/20/2020
DLA PIPER LLP (US )
2000 UNIVERSITY AVENUE
EAST PALO ALTO, CA 94303-2248
EXAMINER
NORMAN, SAMICA L
ART UNIT PAPER NUMBER
3697
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):
PatentDocketingUS-PaloAlto@dlapiper.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte THEODORE JAMES CROOKS, LOUIS STEVEN BIAFORE,
MICHAEL A. THIEMANN, and KRISHNA M. GOPINATHAN
____________

Appeal 2020-001880
Application 13/274,247
Technology Center 3600
____________

Before NORMAN H. BEAMER, ADAM J. PYONIN, and
GARTH D. BAER, Administrative Patent Judges.

BEAMER, Administrative Patent Judge.

DECISION ON APPEAL
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s
final rejection of claims 1–3, 11, and 12. We have jurisdiction over the
pending rejected claims under 35 U.S.C. § 6(b).
We AFFIRM.

THE INVENTION
Appellant’s disclosed and claimed invention is directed to a dynamic
incentive system that provides bonuses, incentives, or other rewards for a

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. Appellant identifies Gain Credit Holdings, Inc. as the real
party in interest. (Appeal Br. 1.)
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credit group, based on group credit performance (i.e. the performance of
credit agreements associated with the group, such as loans). (Spec. ¶ 151.)
Independent claim 1, reproduced below, is illustrative of the subject
matter on appeal:
1. A method of managing a credit group comprising:
using a computer based Group Credit Management
System;
forming, by the Group Credit Management System, a
credit group, the credit group having a plurality of members;
associating, by the Group Credit Management System, a
plurality of credit agreements with the group;
monitoring, by the Group Credit Management System,
the performance of each credit agreement;
determining, by the Group Credit Management System, if
the group has achieved a milestone associated with the plurality
of credit agreements; and
providing, by the Group Credit Management System to
each member of the credit group, a reward in the form of a
physical voucher or an electronic voucher when the group
achieved the milestone.
Appeal Br. 7. (Claims Appendix.)

REJECTION
The Examiner rejected claims 1–3, 11, and 12 under 35 U.S.C. § 101
because the claimed invention is directed to a judicial exception (i.e., a law
of nature, a natural phenomenon, or an abstract idea) without significantly
more. (Final Act. 3.)

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ISSUE ON APPEAL
Appellant’s arguments in the Appeal and Reply Briefs presents the
following issue:2
Whether the Examiner erred in finding claims 1–3, 11, and 12 are
directed to a judicial exception without significantly more. (Appeal Br. 4–6;
Reply Br. 1–2.)
ANALYSIS
We have reviewed the Examiner’s rejections 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).
The Examiner concludes that under the “broadest reasonable
interpretation,” the claim limitations “cover[] managing relationships and
legal interactions but for the recitation of generic computer components”
(Ans. 3–4), and that the claims “fall[] within the ‘Certain Methods of
Organizing Human Activity’ grouping of abstract ideas.” (Ans. 4.) The
Examiner further concludes “[t]he claim(s) does/do not include additional
elements that are sufficient to amount to significantly more than the judicial
exception.” (Ans. 4.)
Appellant argues with respect to Step 2A, Prong One, that “the
claimed processes” are “not fundamental economic practices” (Appeal Br.
4–5), and that “the claims do not recite a mental process.” (Appeal Br. 5.)

2 Rather than reiterate the arguments of Appellant and the positions of the
Examiner, we refer to the Appeal Brief (filed Oct. 14, 2019); the Reply Brief
(filed Jan. 13, 2020); the Final Office Action (mailed Sept. 14, 2018); and
the Examiner’s Answer (mailed Nov. 18, 2019) for the respective details.
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Appellant argues with respect to Step 2A, Prong Two, that “the claims
are directed to an improvement in a credit process” and the claimed method
“cannot be performed in the human mind when read as a whole.” (Appeal
Br. 5.) Appellant contends
the claims recite a process that is not merely a pure mental
process and generates a real world result (the electronic or
physical voucher). That real worl[d] result further shows that
the claimed method is not merely an abstract idea, but that any
abstract idea are integrated into a practical application.

(Appeal Br. 6.)
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101. Here,
independent claim 1 and its dependent claims relate to a method — i.e., a
process. However, the Supreme Court has long held that “[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) (quoting Assoc. for Molecular
Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589–90 (2013)). The
“abstract ideas” category embodies the longstanding rule that an idea, by
itself, is not patentable. Alice, 573 U.S. at 216–17.
In Alice, the Supreme Court sets forth an analytical “framework for
distinguishing patents that claim laws of nature, natural phenomena, and
abstract ideas from those that claim patent-eligible applications of those
concepts.” Id. at 217. The first step in the analysis is to “determine whether
the claims at issue are directed to one of those patent-ineligible concepts,”
such as an abstract idea. Id. 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 v.
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Kappos, 561 U.S. 593, 611 (2010); mathematical concepts (Parker v. Flook,
437 U.S. 584, 594–95 (1978)); and mental processes (Gottschalk v. Benson,
409 U.S. 63, 69 (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))).
If the claims are directed to a patent-ineligible concept, the second
step in the Alice/Mayo analysis is to consider the elements of the claims
“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.” 573 U.S. at 217 (quoting Mayo Collaborative
Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 79, 78 (2012)). In other
words, the second step is to “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.” 573 U.S. at 217–18 (quoting Mayo, 566 U.S. at
72–73.) 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. 573 U.S. at 221. A transformation into a
patent-eligible application requires more than simply stating the abstract idea
while adding the words “apply it.” Id.
Further to the Alice/Mayo analytical framework, and acknowledged
by Appellant in the Briefs, the USPTO published revised guidance on the
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application of Section 101. See 2019 Revised Patent Subject Matter
Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (hereinafter “Revised
Guidance”). Under the Revised 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
activity 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)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, does the Office then look to whether
the claim:
(3) adds a specific limitation beyond the judicial exception that are 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 Revised Guidance.
In evaluating the claims at issue, we consider claim 1 as
representative, consistent with how Appellant and the Examiner analyze the
claims. See 37 C.F.R. § 41.37(c)(1)(iv)(2016). Omitting the portions of the
claim invoking use of generic technology (which are discussed separately
below), the remaining limitations of claim 1 elaborate on a method of
managing a credit group, via the steps of:
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(a) forming a credit group;
(b) associating a plurality of credit agreements with the
group;
(c) monitoring the performance of each credit agreement;
(d) determining if the credit group has a achieved a
milestone associated with the plurality of credit agreements;
and
(e) providing to each member of the credit group, a reward
in the form of a physical voucher or an electronic voucher when
the group achieved the milestone.
Apart from the use of generic technology (discussed further below),
each of these limitations describes steps taken to administer a contract that
provides awards to credit group members based on the performance of a set
of credit agreements.
As stated in the Revised Guidance, “methods of organizing human
activity” considered an abstract idea include “commercial or legal
interactions” including “agreements in the form of contracts,” “legal
obligations,” and “marketing or sales activities or behaviors.” (Revised
Guidance, 84 Fed. Reg. at 52). The above listed claim 1 limitations relate to
the subject matter of managing a contract in which
a plurality of borrowers, lenders, and/or referencers can define
themselves as a credit group and combine forces to obtain better
terms or conditions
through
an active and dynamic incentive system that can provide
bonuses, incentives, or other rewards for the group based on
group credit performance (i.e. the performance of credit
agreements associated with the group, such as loans).
(Spec. ¶ 151.)
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Appellant’s disclosure thus indicates the claimed method performs the
management and administration of “bonuses, incentives, or other rewards”
to claimed “credit group” and as such represents “the creation and
manipulation of legal obligations such as contracts involved in fundamental
economic practices” and constitutes an “abstract idea[].” Electric Power
Group, LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016).
Appellant’s argument that “the claimed processes” are “not
fundamental economic practices” (Appeal Br. 4–5) is unsupported by
persuasive reasoning or factual evidence and is conclusory. Therefore, we
agree with the Examiner that the subject matter of claim 1 recites an abstract
idea, as do the remaining claims.
Further pursuant to the Revised Guidance, we consider whether there
are additional elements set forth in claim 1 that integrate the judicial
exception into a practical application. Revised Guidance, 84 Fed. Reg. at
54–55. Here, the abstract idea of claim 1 is carried out using a “computer
based Group Credit Management System.” We agree with the Examiner
that the claimed “Group Credit Management System” in “all steps is recited
at a high-level of generality such that it amounts to no more than mere
instructions to apply the exception using generic computer components.”
(Ans. 4, citing Spec. ¶ 171.) “[M]erely requir[ing] generic computer
implementation[] fail[s] to transform that abstract idea into a patent-eligible
invention.” Alice, 573 U.S. at 221.
Nor does the subject matter of claim 1 contain additional elements
that implement the judicial exception with a “particular machine,” because
the claims do not specify any details in regard to the system. See MPEP
§ 2106.05(b).
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Further, the method does not transform matter; at best it transforms
information. See MPEP § 2106.05(c). While the claimed method might
provide “a real world result” such as an “electronic or physical voucher”
(see Appeal Br. 6), this is only a transformation of information that does not
integrate the judicial exception into a practical application, but rather
represents insignificant extra-solution activity. Revised Guidance, 84 Fed.
Reg. at 55 n. 31.
Nor does claim 1 have any other meaningful limitations (MPEP
§ 2106.05(e)), or any of the other considerations set forth in the Revised
Guidance regarding a determination of whether additional elements integrate
the judicial exception into a practical application. See Revised Guidance, 84
Fed. Reg. at 55. Accordingly, we conclude that the subject matter of claim 1
(and the remaining claims) is directed to fundamental economic principles or
practices, which are examples of the certain methods of organizing human
activity, and thus an abstract idea, and the additional elements recited therein
do not integrate the abstract idea into a practical application.
Turning to the second step of the Alice inquiry, we consider the
elements of the claims “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.” 573 U.S. at 217 (quoting
Mayo, 566 U.S. at 66, 79, 78 (2012)). The Examiner finds, and we agree,
that
this additional element [the Group Credit Management System]
does not integrate the abstract idea into a practical application
because it does not impose any meaningful limits on practicing
the abstract idea.
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(Ans. 4.) “[T]he mere recitation of a generic computer cannot transform a
patent-ineligible abstract idea into a patent-eligible invention.” Alice, 573
U.S. at 223. This additional element of claim 1, whether individually or in
combination, fails to add “significantly more” to the basic abstract idea
encompassed by the claim sufficient to transform the claimed abstract idea
into a patent-eligible application. Other than using generic technology —
for example, computer 1601 (see Spec. ¶ 172), or “any suitable computing
environment including personal computing devices, smart-phones, pad
computers, and the like” (Spec ¶ 181) — these improvements are
elaborations on the basic abstract idea itself, in which a computer is used to
manage and administer bonuses, incentives, or other rewards based on
performance of a set of contracts.
“It is clear from Mayo that the ‘inventive concept’ cannot be the
abstract idea itself.” Aatrix Software, Inc. v. Green Shades Software, Inc.,
890 F.3d 1354, 1359 (Fed. Cir. 2018). Moreover, “[p]atent law does not
protect claims to an ‘asserted advance in the realm of abstract ideas . . . no
matter how groundbreaking the advance.’” 890 F.3d at 1359 (Fed. Cir.
2018).
The record supports the Examiner’s finding that the additional
element — the “Group Credit Management System” uses “generic computer
components.” (Ans. 5.) These devices are well-understood, routine,
conventional, and specified at a high level of generality. Revised Guidance,
84 Fed. Reg. at 56.
Nothing regarding any aspect of the “ordered combination” of the
claim elements provide significantly more than the abstract idea that claim 1
is directed to.
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Accordingly, we sustain the Examiner’s 35 U.S.C. § 101 rejection of
claim 1. Appellant provides no arguments that would differentiate the
remaining claims from claim 1. Thus, the foregoing analysis of claim 1 is
exemplary of that for dependent claims 2, 3, 11, and 12. See 37 C.F.R.
§ 41.37(c)(1)(iv) (2016). Therefore, we also sustain the Examiner’s
35 U.S.C. § 101 rejection of those claims.
CONCLUSION
For the reasons stated above, we affirm the Examiner’s non-statutory
subject matter rejection of claims 1–3, 11, and 12.

DECISION SUMMARY
In summary:
Claims
Rejected
35
U.S.C. §
Reference(s)/Basis Affirmed Reversed
1–3, 11, 12 101 non-statutory subject matter 1–3, 11, 12

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)(1)(iv).

AFFIRMED