Yaacov SHIRAZI

Patent Trials and Appeals Board

Jul 6, 2020

2020001268 (P.T.A.B. Jul. 6, 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.
13/462,129 05/02/2012 Yaacov SHIRAZI 5800/16 8251
44696 7590 07/06/2020
Dr. Mark M. Friedman
Moshe Aviv Tower, 54th floor
7 Jabotinsky St.
Ramat Gan, 5252007
ISRAEL
EXAMINER
NGUYEN, LIZ P
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
07/06/2020 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):
friedpat.uspto@gmail.com
patents@friedpat.com
rivka_f@friedpat.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte YAACOV SHIRAZI1
Appeal 2020-001268
Application 13/462,129
Technology Center 3600
Before ERIC B. GRIMES, FRANCISCO C. PRATS, and
JEFFREY N. FREDMAN, Administrative Patent Judges.
GRIMES, Administrative Patent Judge.
DECISION ON APPEAL
This is an appeal under 35 U.S.C. § 134(a) involving claims to a
“method of providing water of different water quality categories,” which
have been rejected as ineligible for patenting. We have jurisdiction under
35 U.S.C. § 6(b).
We REVERSE.

1 Appellant identifies the real party in interest as Aqua Index Ltd. Appeal Br.
3. We use the word Appellant to refer to “applicant” as defined in 37 C.F.R.
§ 1.42(a).
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STATEMENT OF THE CASE
“The present invention relates to systems and methods for making a
stable price of fresh water and financial instruments using such price and
more particularly, to systems and methods where the price or index value of
fresh water is based on the water quality.” Spec. 1.2 “By considering the
quality of the water, the price may be more accurate, more stable and more
tailored to the different water sources throughout the different regions of the
world.” Id. at 21.
Claims 64–90 are on appeal. Claim 64, reproduced below, is
illustrative (emphasis added):
64. A method of providing water of different water
quality categories, the method comprising:
determining, using one or more processors, a first index
value based at least in part on a first water quality of a first
source or designated quantity of water and a varying property of
at least one substance other than water, wherein the first water
quality is defined by (i) a water quality category or (ii) a water
quality category and a grade within the water quality category,
transporting a defined quantity of drinkable water of the
first water quality that has the following ranges of the following
chemical ingredients (i) TDS and (ii) H2CO3 or carbonate: TDS
<50 mg/1, 30< H2CO3 or carbonate <250 mg/1, and has a pH in
a range of 5–10 mg/1, for sale at the first index value, the
quantity of drinkable water of the first water quality labeled so
as to identify the first water quality,
determining, using the one or more processors, a second
index value based at least in part on a second water quality of a
second source or designated quantity of water and the property
of the at least one substance, wherein the second water quality

2 Substitute Specification filed July 30, 2012.
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is defined by (i) a water quality category or (ii) a water quality
category and a grade within the water quality category,
transporting a defined quantity of drinkable water of the
second water quality that has the following ranges of the
following chemical ingredients (i) TDS and (ii) H2CO3 or
carbonate: TDS <150 mg/l, H2CO3 or carbonate <400 mg/l, and
has a pH in a range of 5–10 mg/1, for sale at the second index
value, the quantity of drinkable water of the second water
quality labeled so as to identify the second water quality,
wherein each of the drinkable water of the first water
quality and the drinkable water of the second water quality is
water that is recommended for drinking after treatment.

Claims 80, 85, 88, and 90 are also independent, and also require
“transporting a defined quantity” of water of at least two different water
qualities.
OPINION
Claims 64–90 stand rejected under 35 U.S.C. § 101, on the basis that
“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.” Ans. 3. The Examiner finds that each of the steps of claim 64, “under
its broadest reasonable interpretation, covers performance of the limitations
in the mind. That is, nothing in the claim elements preclude the steps from
practically being performed in the mind.” Id. at 4–5. Thus, the Examiner
finds that claim 64 recites abstract ideas that “fall[] within the ‘Mental
Processes’ grouping of abstract ideas.” Id. at 5.
The Examiner finds that claim 64 does not integrate the recited
abstract ideas into a practical application, because
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generic computer components (i.e., one or more processors) are
recited to obtain and determine data. The additional elements
(i.e., transporting a defined quantity of drinkable water of the
first and second water quality . . .) are recited at a high-level of
generality such that they amount to no more than mere
instructions to apply the exception using generic computer
components (i.e., transporting a defined quantity of drinkable
water . . . as using computers to instruct to dip a cup or bottle of
water in a container.)
Ans. 5.
Finally, the Examiner finds that claim 64 does not amount to
significantly more than the judicial exception because “the additional
elements (i.e., transporting a defined quantity of drinkable water of the first
and second water quality, for sale at the first index value and the second
index value) amount to no more than mere instructions to apply the
exception using generic computer components.” Id. at 6. The Examiner finds
that the same analysis applies to the other independent claims. Id.
Appellant argues that “it is impossible to transport water in the human
mind.” Appeal Br. 17. Appellant also argues that “the step of ‘transporting a
defined quantity of drinkable water . . .’ cannot possibly be a mere
instruction to apply the ‘determining’ step using generic computer
components. Generic computers do not transport defined quantities of
drinkable water.” Id. Appellant argues that “[f]urthermore, the ‘transporting
. . . for sale at the first index value’ step integrates the ‘determining . . . a
first index value’ step into the practical application of transporting labeled
drinkable water of a particular defined water quality (defined by chemical
ingredients and pH) labeled with that water quality for sale at the first index
value.” Id. at 17–18.
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Principles of Law
A. Section 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.
However, the U.S. 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. 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 Court’s two-part framework, described in Mayo and Alice.
Alice, 573 U.S. 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 Alice, 573
U.S. 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 (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
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(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))).
In Diehr, the claim at issue recited a mathematical formula, but the
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 187; 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 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. (citation omitted)
(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 (quotation marks omitted).
“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,
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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.
B. USPTO Section 101 Guidance
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101. See 2019 Revised
Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(“Revised Guidance”).3 “All USPTO personnel are, as a matter of internal
agency management, expected to follow the guidance.” Id. at 51; see also
October 2019 Update at 1.
Under the Revised Guidance and the October 2019 Update, 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) (“Step 2A, Prong One”); 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)) (“Step 2A, Prong Two”).4

3 In response to received public comments, the Office issued further
guidance on October 17, 2019, clarifying the Revised Guidance. USPTO,
October 2019 Update: Subject Matter Eligibility (the “October 2019
Update”) (available at https://www.uspto.gov/sites/default/files/
documents/peg_oct_2019_update.pdf).
4 This evaluation is performed by (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception, and
(b) evaluating those additional elements individually and in combination to
determine whether the claim as a whole integrates the exception into a
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Revised Guidance, 84 Fed. Reg. at 52–55.
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then look, under
Step 2B, 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.
Revised Guidance, 84 Fed. Reg. at 52–56.
Revised Guidance Step 2A, Prong 1
Following the Revised Guidance, we first consider whether the claims
recite a judicial exception. The Revised Guidance identifies three groupings
of subject matter included in the abstract idea exception, including “[m]ental
processes—concepts performed in the human mind (including an
observation, evaluation, judgment, opinion).” 84 Fed. Reg. at 52. “If a claim,
under its broadest reasonable interpretation, covers performance in the mind
but for the recitation of generic computer components, then it is still in the
mental processes category unless the claim cannot practically be performed
in the mind.” Id. at 52, n.14.
Claim 64 recites
determining, using one or more processors, a first index value
based at least in part on a first water quality of a first source or

practical application. See Revised Guidance - Section III(A)(2), 84 Fed. Reg.
at 54–55.
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designated quantity of water and a varying property of at least
one substance other than water, wherein the first water quality
is defined by (i) a water quality category or (ii) a water quality
category and a grade within the water quality category,
and
determining, using the one or more processors, a second index
value based at least in part on a second water quality of a
second source or designated quantity of water and the property
of the at least one substance, wherein the second water quality
is defined by (i) a water quality category or (ii) a water quality
category and a grade within the water quality category.
The Specification states that the “invention relates . . . to systems and
methods where the price or index value of fresh water is based on the water
quality.” Spec. 1 (emphasis added). The Specification also describes a
“financial instrument identifying on its face a particular amount of fresh water
of a particular water quality category [that] may state a price determined using
an index value of fresh water of a particular water quality category.” Id. at 19
(emphasis added). Under the heading “Quality categories - an index pricing,”
the Specification states that “[b]ased on an analysis of relevant aspects of
water quality we can design a unified basis for pricing.” Id. at 31.
We agree with the Examiner that, under its broadest reasonable
interpretation, the steps of determining first and second index values of
water encompass mental processes; specifically, the process of assigning a
value to water of a particular quality, for use in determining its price. Mental
processes are “concepts performed in the human mind (including an
observation, evaluation, judgment, opinion).” Revised Guidance, 84 Fed.
Reg. at 52 (emphasis added). The act of assigning a value to a commodity is
equivalent to evaluating that commodity and providing an opinion as to its
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worth. Thus, the “determining” steps of the claims encompass mental
processes, notwithstanding the recitation of “using one or more processors.”
See id. at 52, n.14 (“If a claim, under its broadest reasonable interpretation,
covers performance in the mind but for the recitation of generic computer
components, then it is still in the mental processes category unless the claim
cannot practically be performed in the mind.”).
Revised Guidance Step 2A, Prong 2
Although the claims recite an abstract idea, they would still be patent-
eligible if “the claim as a whole integrates the recited judicial exception into
a practical application of the exception.” Revised Guidance, 84 Fed. Reg. at
53. “A claim that integrates a judicial exception into a practical application
will apply, rely on, or use the judicial exception in a manner that imposes a
meaningful limit on the judicial exception.” Id. The analysis of whether a
claim integrates a judicial exception into a practical application includes
“[i]dentifying whether there are any additional elements recited in the claim
beyond the judicial exception(s)” and “evaluating those additional elements
individually and in combination to determine whether they integrate the
exception into a practical application.” Id. at 54–55.
Considerations indicating that an exception is integrated into a
practical application include “an additional element [that] applies or uses the
judicial exception in some . . . meaningful way beyond generally linking the
use of the judicial exception to a particular technological environment, such
that the claim as a whole is more than a drafting effort designed to
monopolize the exception.” Revised Guidance, 84 Fed. Reg. at 55. However,
“[a]n additional element . . . [that] merely includes instructions to implement
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an abstract idea on a computer, or merely uses a computer as a tool to
perform an abstract idea” is an indication that “a judicial exception has not
been integrated into a practical application.” Id.
Here, in addition to the steps that are equivalent to mental processes,
claim 64 recites “transporting a defined quantity of drinkable water” of two
different water qualities. The other independent claims likewise recite
“transporting a defined quantity” of water of at least two different qualities.
The Examiner reasons that these limitations
amount to no more than mere instructions to apply the
exception using generic computer components (i.e.,
transporting a defined quantity of drinkable water of the first
and second water quality, for sale at the first index value and
the second index value as using computers to instruct to dip a
cup or bottle of water in a container.)
Ans. 5 (emphasis added). See also id. at 8.
Appellant argues that step of “transporting a defined quantity of
drinkable water”
cannot possibly be a mere instruction to apply the
“determining” step using generic computer components.
Generic computers do not transport defined quantities of
drinkable water having specific ranges of chemical ingredients.
Furthermore, the “transporting . . . for sale at the first index
value” step integrates the “determining . . . a first index value”
step into the practical application of transporting labeled
drinkable water of a particular defined water quality.
Appeal Br. 17–18.
We agree with Appellant that the Examiner has not persuasively
established that the “transporting” limitations of the claims do not practically
apply the recited judicial exception. As Appellant points out, a generic
computer does not transport water. Rather, “transporting a defined quantity”
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of water requires physically moving water—e.g., in a bottle, a tanker truck,
or a pipeline—from one location to a spatially distinct location. The
Examiner has not adequately explained how a generic computer could be
used to transport defined quantities of water, or even how a generic
computer, without more, is used to “dip a cup or bottle of water in a
container.” Ans. 5.
Thus, the Examiner has not shown that the claims are “directed to” an
abstract idea. See Revised Guidance, 84 Fed. Reg. at 54 (“When the
exception is so integrated [into a practical application], then the claim is not
directed to a judicial exception . . . and is eligible.”). “This concludes the
eligibility analysis.” Id. We reverse the rejection of claims 64–90 under 35
U.S.C. § 101.
DECISION SUMMARY
In summary:
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
64–90 101 Eligibility 64–90

REVERSED