Ausubel, Lawrence M.

Patent Trials and Appeals Board

Aug 20, 2020

13898214 - (D) (P.T.A.B. Aug. 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.
13/898,214 05/20/2013 Lawrence M. Ausubel 4853-102 3858
6449 7590 08/20/2020
ROTHWELL, FIGG, ERNST & MANBECK, P.C.
607 14TH STREET, N.W.
SUITE 800
WASHINGTON, DC 20005
EXAMINER
SUBRAMANIAN, NARAYANSWAMY
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
08/20/2020 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):
PTO-PAT-Email@rfem.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte LAWRENCE M. AUSUBEL
Appeal 2019-005178
Application 13/898,214
Technology Center 3600
Before ERIC S. FRAHM, BETH Z. SHAW, and
MATTHEW J. McNEILL, Administrative Patent Judges.
Opinion for the Board filed by Administrative Patent Judge,
BETH Z. SHAW.
Opinion dissenting filed by Administrative Patent Judge, ERIC S. FRAHM
SHAW, Administrative Patent Judge.
DECISION ON APPEAL

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Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1–51. See Final Act. 1. We have
jurisdiction under 35 U.S.C. § 6(b).
We conducted an oral hearing for this case on July 29, 2020.
We AFFIRM.
CLAIMED SUBJECT MATTER
The claims are directed to a system and method for an efficient
dynamic multi-unit auction. Claims 1 and 18, reproduced below, are
illustrative of the claimed subject matter:
1. A computer system for conducting a clock auction of
one or more types of items among a plurality of users, said
system comprising:
means for transmitting first prices for one or more types
of items;
means for receiving one or more bids, said bids
indicating quantities of items that a user wishes to transact
based on said first prices;
means for determining, based on received bids, whether
the auction should continue or terminate;
means for transmitting second prices for one or more
types of items, responsive to a determination to continue the
auction, said second prices differing from the first prices for at
least one type of item;
means for receiving further bids, said further bids
indicating intra-round prices, each said intra-round price
situated between the first price and the second price for a type
of item, each said further bid indicating a quantity of items that
a user wishes to transact at prices above the intra-round price
and a quantity of items that the user wishes to transact at prices
below the intra-round price;

1 We use the word Appellant to refer to “applicant” as defined in 37 C.F.R.
§ 1.42. Appellant identifies the real party in interest as Efficient Auctions
LLC. Appeal Br. 2.
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means for testing whether the received further bids
satisfy one or more constraints and applying only those further
bids that satisfy the constraints; and
means for determining, based on applied further bids,
whether the auction should continue or terminate.

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18. A method for conducting a clock auction of one or
more types of items among a plurality of users, said method
implemented in a computer system comprising a plurality of
computers including a first computer and at least one other
computer which is located remotely from the first computer and
interconnected by a communication system, said method
comprising:
transmitting first prices for one or more types of items
from said first computer to said communication system;
receiving, at one or more computers of said computer
system, one or more bids from said communication system, said
bids indicating quantities of items that a user wishes to transact
based on said first prices;
determining, at one or more computers of said computer
system, based on received bids, whether the auction should
continue or terminate;
transmitting from said first computer second prices for
one or more types of items, responsive to a determination to
continue the auction, said second prices differing from the first
prices for at least one type of item;
receiving, at one or more computers of said computer
system, further bids, said further bids indicating intra-round
prices, each said intra-round price situated between the first
price and the second price for a type of item, each said further
bid indicating a quantity of items that a user wishes to transact
at prices above the intra-round price and a quantity of items that
the user wishes to transact at prices below the intra-round price;
testing, at one or more computers of said computer
system, whether the received further bids satisfy one or more
constraints and applying only those further bids that satisfy the
constraints; and
determining, at one or more computers of said computer
system, based on applied further bids, whether the auction
should continue or terminate.
REJECTION
Claims 1–51 are rejected under 35 U.S.C. § 101. Final Act. 2.
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OPINION
As an initial matter, we note that independent claim 1 is written as a
means-plus-function claim and independent claim 18 is a method claim.
Appellant does not contest that the elements of claim 1 should be construed
as means-plus-function elements. See Appeal Br. 10 (“Claim 1 includes
several ‘means’ clauses, each relying on the 6th paragraph of section 112.”).
Although we address each set of claims (i.e., claims 1–17 and claims
18–51) separately in this decision in order to address each of Appellant’s
arguments,2 we find there to be no distinction between them
for § 101 purposes, because they recite the same concept. See Voter Verified,
Inc. v. Election Sys. & Software LLC, 887 F.3d 1376, 1385 (Fed. Cir.
2018), cert. denied, 139 S. Ct. 813 (2019) (“While these claims encompass
both methods and systems, we find there to be no distinction between them
for § 101 purposes, as they simply recite the same concept”) (citing Alice
Corp. v. CLS Bank Int’l, 573 U.S. 208, 226 (2014) (“[T]he system claims are
no different from the method claims in substance. The method claims recite
the abstract idea implemented on a generic computer; the system claims
recite a handful of generic computer components configured to implement
the same idea.”)).

PRINCIPLES OF LAW

2 Appellant groups claims 1–17 and claims 18–51 separately in the Appeal
Brief when presenting some arguments, though not all. See Appeal Br. 10–
20.
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A. Section 112
For means-plus-function elements, which are statutorily limited to the
“corresponding structure, material, or acts described in the specification and
equivalents thereof,” 35 U.S.C. § 112, ¶ 6 requires that the specification
must permit one of ordinary skill in the art to “know and understand what
structure corresponds to the means limitation.” Biomedino, LLC v. Waters
Techs. Corp., 490 F.3d 946, 951 (Fed. Cir. 2007).
B. 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, 573 U.S. at 216.
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);
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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
(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).
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“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.
C. USPTO Section 101 Guidance
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101. 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(“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 2019 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

3 In response to received public comments, the Office issued further
guidance on October 17, 2019, clarifying the 2019 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.p
df).
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(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
2019 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.
2019 Revised Guidance, 84 Fed. Reg. at 52–56.

Abstract Idea
For the following reasons, we conclude the claims recite a
fundamental economic practice, which is one of certain methods of
organizing human activity identified in the Revised Guidance, and thus, an
abstract idea. See 2019 Revised Guidance, 84 Fed. Reg. at 52, 53 (listing
“[c]ertain methods of organizing human activity—fundamental economic

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
practical application. See 2019 Revised Guidance - Section III(A)(2), 84
Fed. Reg. 54–55.
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principles or practices” as one of the “enumerated groupings of abstract
ideas”). Additionally, we conclude the claims recite a mental process, which
is one of certain methods of organizing human activity identified in the
Revised Guidance, and thus, an abstract idea. See 2019 Revised Guidance,
84 Fed. Reg. at 52, 53 (listing “[m]ental process” as one of the “enumerated
groupings of abstract ideas”).
Although we ultimately reach the same conclusion for all of claims 1–
51, we address claims 1–17 and claims 18–51 separately, for the reasons
discussed below.
Claim 1
Appellant addresses claims 1–17 as a group, and we treat claim 1 as
representative of this group. See Appeal Br. 10.
The claim is directed to an abstract idea because it is directed to a
fundamental economic practice, which is one of certain methods of
organizing human activity, as discussed below. The steps of claim 1, include,
with italics:
means for transmitting first prices for one or more types
of items;
means for receiving one or more bids, said bids
indicating quantities of items that a user wishes to transact
based on said first prices;
means for determining, based on received bids, whether
the auction should continue or terminate;
means for transmitting second prices for one or more
types of items, responsive to a determination to continue the
auction, said second prices differing from the first prices for at
least one type of item;
means for receiving further bids, said further bids
indicating intra-round prices, each said intra-round price
situated between the first price and the second price for a type
of item, each said further bid indicating a quantity of items that
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a user wishes to transact at prices above the intra-round price
and a quantity of items that the user wishes to transact at prices
below the intra-round price;
means for testing whether the received further bids
satisfy one or more constraints and applying only those further
bids that satisfy the constraints; and
means for determining, based on applied further bids,
whether the auction should continue or terminate.

Appellant’s claimed invention is directed to transmitting prices for
one or more types of items, receiving one or more bids, determining whether
an auction should continue or terminate, transmitting second prices for one
or more types of items responsive to a determination to continue the auction,
receiving further bids indicating intra-round prices (each said intra-round
price situated between the first price and the second price for a type of item,
each said further bid indicating a quantity of items that a user wishes to
transact at prices above the intra-round price and a quantity of items that the
user wishes to transact at prices below the intra-round price), testing whether
the received further bids satisfy constraints and applying only those further
bids that satisfy the constraints, and determining based on applied further
bids if the auction should continue or terminate.
Appellant argues that the various authorities of ineligible subject
matter of apparatus claims 1–17 relied on by the Examiner do not have “any
bearing on apparatus claims since each of these opinions only considered
method or medium claims.” Appeal Br. 10. Appellant points to Figures 1–3,
Figure 4, Figure 9a, 9b, and paragraphs 46, 47, 70–73, 82, 87–89, 66–69 as
support for the “means for” limitations recited in claim 1. See Appeal Br. 3,
4. In the oral hearing on July 29, 2020, Appellant specifically identified the
“algorithm” shown in Figures 9a and 9b as support for the “means for”
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elements of the claim. See Oral Hr’g Tr. 6:11–12; 9:19–22. To ascertain the
scope of claim 1, we examine these figures in more detail, as discussed
below. We begin with Figure 4 of Appellant’s Specification because Figures
9a and 9b refer back to Figure 4.
Figure 4 of Appellant’s Specification is reproduced below.
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Figure 4 is a flow diagram of an auction process. Spec. ¶ 22. Figures
9a, 9b, and 9c are more detailed flow diagrams illustrating, in more detail,
elements of Figure 4. Spec. ¶ 27.
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Figure 9a of Appellant’s Specification is reproduced below.

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Figure 9a illustrates a flow diagram of a subprocess of step 106 of
Figure 4. Spec. ¶ 87.

Figure 9b of Appellant’s Specification is reproduced below.

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Figure 9b illustrates a flow diagram of a subprocess of step 112 of
Figure 4. Spec. ¶ 88.
Even accepting Appellant’s assertion (see Appeal Br. 4) that the
corresponding “structure” of the “means for receiving further bids”
limitation of claim 1 corresponds to Figures 9a and 9b of the Specification,
this “means for” is described and shown as a flow diagram of a subprocess
of an auction process. For example, Figure 9a “illustrates an exemplary
process by which a particular bidder i may submit Intra-Round Bids.” Spec.
¶ 87. “Figure 9a begins with step 106-1, in which bidder i selects a group, G,
of item types on which he wishes to place a bid.” Id.
In step 106-2, bidder i selects price parameters for group G
representing a price vector between the previous round’s price
vector for group G and the current round’s price vector for
group G. In step 106-3, bidder i selects quantities of the item
types of group G that he would like to take effect as bids at the
selected price parameters. In step 106-4, bidder i expresses
whether he wishes to enter more bids. If so, the process loops
back to step 106-1. If not, the process continues to step 106-5.
In step 106-5, the computer determines whether bidder i has
submitted at least one bid for each group G of item types. If not,
the process loops back to step 106-1, and optionally the
computer prompts bidder i to submit bids on the groups G of
item types on which bidder i has not submitted at least one
valid bid in the current round. If so, the process goes to step 108
of Figure 4.

Id. Figure 9b “illustrates an exemplary process by which a computer
determines whether the auction should continue, in a system where bidders
are permitted to submit Intra-Round Bids.” Spec. ¶ 88.
Thus, even if we agree with Appellant’s assertion that the “means for
receiving further bids” is limited to the “structure” of the flow of steps 106-1
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through 106-3 shown in Figures 9a of the Specification (Appeal Br. 4), the
structure, i.e., the algorithm, of the “means for receiving further bids” still
falls under the umbrella of economic practices and mental steps, as
discussed in more detail below. It is also significant that this means-plus-
function limitation, as construed by Appellant, does not correspond to
tangible structure. C.f. Allvoice Developments US, LLC v. Microsoft Corp.,
612 F. App’x 1009, 1018 n.5 (Fed. Cir. 2015) (non-precedential) (“[I]t is
also significant that the means-plus-function limitations, as construed
by Allvoice, do not correspond to tangible structure, as opposed to software
instructions.”).
Under Supreme Court precedent, claims directed purely to an abstract
idea are patent ineligible. As set forth in the 2019 Revised Guidance, which
extracts and synthesizes key concepts identified by the courts, abstract ideas
include (1) mathematical concepts, (2) certain methods of organizing human
activity, and (3) mental processes. Among those certain methods of
organizing human activity listed in the 2019 Revised Guidance are
fundamental economic practices, such as the concept of intermediated
settlement in Alice, and the concept of hedging in Bilski.
Like those concepts, claim 1 also recites a fundamental economic
practice. Specifically, the italicized steps fall under the umbrella of
economic practices, because the steps, including at least the means for
“transmitting first prices for one or more types of items”; “receiving one or
more bids, said bids indicating quantities of items that a user wishes to
transact based on said first prices”; “determining, based on received bids,
whether the auction should continue or terminate”; means for “transmitting
second prices for one or more types of items, responsive to a determination
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to continue the auction, said second prices differing from the first prices for
at least one type of item”; means for “receiving further bids, said further
bids indicating intra-round prices, each said intra-round price situated
between the first price and the second price for a type of item, each said
further bid indicating a quantity of items that a user wishes to transact at
prices above the intra-round price and a quantity of items that the user
wishes to transact at prices below the intra-round price”; means for “testing
whether the received further bids satisfy one or more constraints and
applying only those further bids that satisfy the constraints”; and means for
“determining, based on applied further bids, whether the auction should
continue or terminate,” would ordinarily take place in clock auctions, which
occur in our system of commerce. See Spec. ¶ 6 (“This provides the
advantage of improving the economic efficiency of the auction design over
the prior art. The present invention usefully enables a seller or buyer to
efficiently auction multiple types of goods or services, and to efficiently
auction items with complex possibilities for substitution.”). In particular, the
Specification explains that:
A clock auction is a dynamic auction procedure whereby:
the auctioneer announces the current prices to bidders; the
bidders respond with current bids; the auctioneer determines
whether the auction should continue based on the bidding
history; the auctioneer updates the current prices based on the
bidding history and the process repeats, if it is determined that
the auction should continue; and the auctioneer allocates the
items among the bidders and assesses payments among the
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bidders based on the bidding history, if it is determined that the
auction should not continue.
Spec. ¶ 44.
In Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d
1363, 1369 (Fed. Cir. 2015), an advertisement taking into account the time
of day and tailoring the information presented to the user based on that
information was considered another “fundamental . . . practice long
prevalent in our system.” In Credit Acceptance Corp. v. Westlake Servs., 859
F.3d 1044 (Fed. Cir. 2017), patent claims directed to a system and method
for providing financing to allow a customer to purchase a product selected
from an inventory of products maintained by a dealer were considered patent
ineligible as directed to the abstract idea of processing an application for
financing a purchase, an economic practice long prevalent in commerce.
Like the claims at issue in Intellectual Ventures I and Credit Acceptance, the
claimed “system for conduction a clock auction of one or more types of
items among a plurality of users” is “a fundamental economic practice long
prevalent in our system of commerce.” Credit Acceptance, 859 F.3d at 1054.
Even if the “means for receiving further bids” is limited to the flow of
steps depicted in Figure 9a or Figure 9b, these are steps that would
ordinarily take place in clock auctions, which occur in our system of
commerce. Appellant argues, without support, that “[o]ffering a bid is not a
commercial interaction.” Reply Br. 5. We disagree because offering a bid for
an item is an offer to purchase an item, which is a part of a commercial
interaction. Thus, we conclude claim 1 recites a fundamental economic
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practice, which is one of certain methods of organizing human activity
identified in the 2019 Revised Guidance, and thus an abstract idea.
Additionally, claim 1 is similar to claims that courts have concluded
recite a mental process. See Intellectual Ventures I LLC v. Symantec Corp.,
838 F.3d 1307, 1318 (Fed. Cir. 2016) (“[W]ith the exception of generic
computer-implemented steps, there is nothing in the claims themselves that
foreclose them from being performed by a human, mentally or with pen and
paper.”), quoted in 2019 Revised Guidance, 84 Fed. Reg. at 52 n.14; Mortg.
Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1324 (Fed.
Cir. 2016) (holding that computer-implemented method for “anonymous
loan shopping” was an abstract idea because it could be “performed by
humans without a computer”); quoted in 2019 Revised Guidance, 84 Fed.
Reg. at 52 n.14.
A person can perform the above-quoted steps of claim 1 by using his
or her mind (or pen and paper) in the claimed manner. For example, a person
can “transmit[] first prices for one or more types of items,” using pen and
paper. A person can “receiv[e] one or more bids, said bids indicating
quantities of items that a user wishes to transact based on said first prices”
using pen and paper. A person can “determin[e], based on received bids,
whether the auction should continue or terminate,” via his or her mind or via
pen and paper. A person can transmit “second prices for one or more types
of items, responsive to a determination to continue the auction, said second
prices differing from the first prices for at least one type of item” using pen
and paper. A person can “receiv[e] further bids, said further bids indicating
intra-round prices, each said intra-round price situated between the first
price and the second price for a type of item, each said further bid indicating
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a quantity of items that a user wishes to transact at prices above the intra-
round price and a quantity of items that the user wishes to transact at prices
below the intra-round price,” using pen and paper. A person can, via pen
and paper, or his or her mind “test[] whether the received further bids satisfy
one or more constraints and apply[] only those further bids that satisfy the
constraints.” A person can “determin[e], based on applied further bids,
whether the auction should continue or terminate,” using his or her mind, or
pen and paper. Cf. CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d
1366, 1372–73 (Fed. Cir. 2011) (noting that a recited step that constructed a
map of credit card numbers could be performed by merely writing down a
list of credit card transactions made from a particular IP address.); see also
In re Grams, 888 F.2d 835, 837 n.1 (Fed. Cir. 1989) (“Words used in a
claim operating on data to solve a problem can serve the same purpose as a
formula.”); Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354
(Fed. Cir. 2016) (noting that analyzing information by steps people go
through in their minds, or by mathematical algorithms, without more, are
essentially mental processes within the abstract idea category); Digitech
Image Tech., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir.
2014) (“Without additional limitations, a process that employs mathematical
algorithms to manipulate existing information to generate additional
information is not patent eligible.”); Benson, 409 U.S. 63 (holding ineligible
claims involving a mathematical algorithm and directed to converting
binary-coded-decimal (BCD) numerals into pure binary numerals for use
with a computer). Accord CyberSource, 654 F.3d at 1375 (“That purely
mental processes can be unpatentable, even when performed by a computer,
was precisely the holding of the Supreme Court in [Benson].”). Therefore,
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the limitations fall squarely within the mental processes category of the
agency’s guidelines and, therefore, recite an abstract idea. See 2019 Revised
Guidance, 84 Fed. Reg. at 52.
In accordance with the 2019 Revised Guidance, and looking to MPEP
§§ 2106.05(a)–(c) and (e)–(h), we determine that the additional elements of
claim 1, both individually and as an ordered combination, do not integrate a
judicial exception, in this case the abstract idea of a fundamental economic
practice or a mental process, into a practical application. Claim 1 is directed
to the implementation of the abstract idea on a generic computer system.
Here, the the recited “computer system” in the preamble is the only
recited element beyond the abstract idea, but this additional element does not
integrate the abstract idea into a practical application when reading claim 1
as a whole. First, we are not persuaded that the claimed invention improves
the computer or its components’ functionality or efficiency, or otherwise
changes the way those devices function, at least in the sense contemplated
by the Federal Circuit in Enfish, LLC v. Microsoft Corporation, 822 F.3d
1327 (Fed. Cir. 2016), despite Appellant’s argument to the contrary (Appeal
Br. 10). The claimed self-referential table in Enfish was a specific type of
data structure designed to improve the way a computer stores and retrieves
data in memory. Enfish, 822 F.3d at 1339. To the extent Appellant contends
that the claimed invention uses such a data structure to improve a
computer’s functionality or efficiency, or otherwise change the way that
device functions, there is no persuasive evidence on this record to
substantiate such a contention.
To the extent Appellant contends that the claimed invention is rooted
in technology because it is ostensibly directed to a technical solution, we
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disagree. Even assuming, without deciding, that claimed invention can
conduct a clock auction faster than doing so manually, any speed increase
comes from the capabilities of the generic computer components—not the
recited process itself. See FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d
1089, 1095 (Fed. Cir. 2016) (citing Bancorp Servs., LLC v. Sun Life
Assurance Co. of Canada (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012)
(“[T]he fact that the required calculations could be performed more
efficiently via a computer does not materially alter the patent eligibility of
the claimed subject matter.”)); see also Intellectual Ventures I LLC v. Erie
Indemnity Co., 711 F. App’x 1012, 1017 (Fed. Cir. 2017) (unpublished)
(“Though the claims purport to accelerate the process of finding errant files
and to reduce error, we have held that speed and accuracy increases
stemming from the ordinary capabilities of a general-purpose computer ‘do[]
not materially alter the patent eligibility of the claimed subject matter.’”).
Like the claims in FairWarning, the focus of claim 1 is not on an
improvement in computer processors as tools, but on certain independently
abstract ideas that use generic computing components as tools. See
FairWarning, 839 F.3d at 1095 (citations and quotation marks omitted).
As recognized by the Supreme Court, “the mere recitation of a generic
computer cannot transform a patent ineligible abstract idea into a patent-
eligible invention.” Alice, 573 U.S. at 223; see id. at 225 (concluding claims
“simply instruct[ing] the practitioner to implement the abstract idea of
intermediated settlement on a generic computer” are not patent eligible); see
also Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715–16 (Fed. Cir. 2014)
(claims merely reciting abstract idea of using advertising as currency as
applied to particular technological environment of the Internet are not patent
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eligible); Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728
F.3d 1336, 1344–45 (Fed. Cir. 2013) (claims reciting “generalized software
components arranged to implement an abstract concept [of generating
insurance-policy-related tasks based on rules to be completed upon the
occurrence of an event] on a computer” are not patent eligible); Dealertrack,
Inc. v. Huber, 674 F.3d 1315, 1333–34 (Fed. Cir. 2012) (“Simply adding a
‘computer aided’ limitation to a claim covering an abstract concept, without
more, is insufficient to render [a] claim patent eligible” (internal citation
omitted)).
Nor is this a case involving eligible subject matter as in DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014). There,
instead of a computer network operating in its normal, expected manner by
sending a website visitor to a third-party website apparently connected with
a clicked advertisement, the claimed invention in DDR generated and
directed the visitor to a hybrid page that presented (1) product information
from the third party, and (2) visual “look and feel” elements from the host
website. DDR, 773 F.3d at 1258–59. Given this particular Internet-based
solution, the court held that the claimed invention did not merely use the
Internet to perform a business practice known from the pre-Internet world,
but rather was necessarily rooted in computer technology to overcome a
problem specifically arising in computer networks. Id. at 1257.
That is not the case here. As noted previously, Appellant’s claimed
invention, in essence, is directed to conducting a clock auction for one or
more items—albeit using computer-based components to achieve that end.
The claimed invention here is not necessarily rooted in computer technology
in the sense contemplated by DDR where the claimed invention solved a
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challenge particular to the Internet. Although Appellant’s invention uses a
computer system, as noted previously, the claimed invention does not solve
a challenge particular to the computing components used to implement this
functionality.
Appellant’s reliance on Finjan, Inc. v. Blue Coat Systems, Inc., 879
F.3d 1299 (Fed. Cir. 2018) (see Appeal Br. 15), is likewise unavailing.
There, the court held eligible claims directed to a behavior-based virus
scanning system. In reaching this conclusion, the court noted that the
claimed invention employed a new kind of file that enabled a computer
security system to do that which could not be done previously, including
accumulating and using newly-available, behavior-based information about
potential threats. Finjan, 879 F.3d at 1305.
That is not the case here. To the extent that Appellant contends that
the claimed invention is directed to such improvements in computer
capabilities (see Appeal Br. 15), there is no persuasive evidence on this
record to substantiate such a contention.
We reach the same conclusion regarding Appellant’s reliance on Core
Wireless Licensing S.A.R.L. v. LG Electronics, Inc., 880 F.3d 1356 (Fed. Cir.
2018). Appeal Br. 15. There, the court held eligible claims reciting a
computing device that could display an application summary window that
was not only reachable directly from the main menu, but could also display a
limited list of selectable functions while the application was in an un-
launched state. Core Wireless, 880 F.3d at 1360–63. Upon selecting a
function, the device would then launch the application and initiate the
selected function. Id. at 1360. In reaching its eligibility conclusion, the court
noted that the claimed invention was directed to an improved user interface
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for computing devices that used a particular manner of summarizing and
presenting a limited set of information to the user, unlike conventional user
interface methods that displayed a generic index on a computer. Id. at 1362–
63.
That is not the case here. To the extent that Appellant contends that
the claimed invention is directed to such improvements in computer
capabilities (see Appeal Br. 15), there is no persuasive evidence on this
record to substantiate such a contention.
Appellant’s reliance on Trading Technologies International, Inc. v.
CQG, Inc. et al., 675 F. App’x 1001 (Fed. Cir. 2017) (non-precedential)
(Appeal Br. 18), is likewise unavailing, at least because the decision is non-
precedential. Moreover, in Trading Technologies, the Federal Circuit
affirmed the district court’s holding that the claims were not directed to an
abstract idea because the claims required “a specific, structured graphical
user interface paired with a prescribed functionality directly related to the
graphical user interface’s structure that is addressed to and resolves a
specifically identified problem in the prior state of the art.” Trading Techs.,
675 F. App’x at 1004. Here, the claims do not recite a graphical user
interface and, therefore, are readily distinguishable from the claims
in Trading Technologies. As discussed above, a generic computer system is
used to implement the steps, and there is no indication that claim 1 improves
the functioning of the processor, makes it operate more efficiently, or solves
a technological problem with a solution rooted in computer technology.
Accordingly, the claim as a whole does not integrate the abstract idea
into a practical application because the claim limitations do not impose any
meaningful limits on practicing the abstract idea. Stated differently, the
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claims do not (1) improve the functioning of a computer or other technology,
(2) are not applied with any particular machine (except for generic computer
components), (3) do not effect a transformation of a particular article to a
different state, and (4) are not applied in any 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. See MPEP
§§ 2106.05(a)–(c), (e)–(h).
Inventive Concept
Because we determine that claim 1 is “directed to” an abstract idea,
we next consider whether claim 1 recites an “inventive concept.” The
Examiner determined that claim 1 does not recite an inventive concept
because the additional elements in the claim do not amount to “significantly
more” than an abstract idea. See Ans. 13, 14.
We agree with the Examiner’s determination in this regard. See Ans.
13, 14. Using generic computer components to perform abstract ideas does
not provide the necessary inventive concept. See Alice, 573 U.S. at 223
(“[T]he mere recitation of a generic computer cannot transform a patent-
ineligible abstract idea into a patent-eligible invention.”). Thus, the elements
of claim 1 do not amount to “significantly more” than the abstract idea itself.
Preemption is a driving concern when determining patent eligibility.
See Alice, 573 U.S. at 216–17. Patent law cannot inhibit further discovery by
improperly tying up the future use of the building blocks of human
ingenuity. See id. (citing Mayo, 566 U.S. at 85–86). Although preemption is
characterized as a driving concern for patent eligibility, preemption itself is
not the test for patent eligibility. “Where a patent’s claims are deemed only
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to disclose patent ineligible subject matter under the Mayo framework, as
they are in this case, preemption concerns are fully addressed and made
moot.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379
(Fed. Cir. 2015). “While preemption may signal patent ineligible subject
matter, the absence of complete preemption does not demonstrate patent
eligibility.” Id.
To the extent Appellant contends that the recited limitations, including
those detailed above in connection with Alice step one, add significantly
more than the abstract idea to provide an inventive concept under
Alice/Mayo step two (see Appeal Br. 15, 16), these limitations are not
additional elements beyond the abstract idea, but rather are directed to the
abstract idea as noted previously. See 2019 Revised Guidance, 84 Fed. Reg.
at 56 (instructing that additional recited elements should be evaluated in
Alice/Mayo step two to determine whether they (1) add specific limitations
that are not well-understood, routine, and conventional in the field, or (2)
simply append well-understood, routine, and conventional activities
previously known to the industry (citing MPEP § 2106.05(d)). These
elements form part of the recited abstract ideas and thus are not “additional
elements” that “‘transform the nature of the claim’ into a patent-eligible
application.” Alice, 573 U.S. at 217 (quoting Mayo, 566 U.S. at 78); see also
2019 Revised Guidance, 84 Fed. Reg. at 55 n.24 (“USPTO guidance uses
the term ‘additional elements’ to refer to claim features, limitations, and/or
steps that are recited in the claim beyond the identified judicial exception.”
(Emphasis added)).
To the extent Appellant contends that the claimed invention is rooted
in technology because it is ostensibly directed to a technical solution (see
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Appeal Br. 16, 17), we disagree. Even assuming, without deciding, that the
claimed invention can conduct a clock auction of one or more types of items
among users faster than before, any speed increase comes from the
capabilities of the generic computer components—not the recited process
itself. See FairWarning IP, 839 F.3d at 1095 (citing Bancorp Servs., 687
F.3d at 1278 (“[T]he fact that the required calculations could be performed
more efficiently via a computer does not materially alter the patent eligibility
of the claimed subject matter.”)); see also Erie Indemnity Co., 711 F. App’x
at 1017 (“Though the claims purport to accelerate the process of finding
errant files and to reduce error, we have held that speed and accuracy
increases stemming from the ordinary capabilities of a general-purpose
computer ‘do[ ] not materially alter the patent eligibility of the claimed
subject matter.’”). Like the claims in FairWarning, the focus of claim 1 is
not on an improvement in computer processors as tools, but on certain
independently abstract ideas that use generic computing components as
tools. See FairWarning, 839 F.3d at 1095 (citations and quotation marks
omitted).
As recognized by the Federal Circuit in Ultramercial, 772 F.3d at
715–16, Bilski’s “machine-or-transformation” test can also provide a “useful
clue” in the second step of the Alice framework. See In re Bilski, 545 F.3d
943, 954 (Fed. Cir. 2008) (en banc). Under Bilski’s test, a claimed process is
patent-eligible under 35 U.S.C. § 101 if: (1) it is tied to a particular machine
or apparatus; or (2) it transforms a particular article into a different state or
thing. Bilski, 545 F.3d at 954 (citing Benson, 409 U.S. at 70). However,
Appellant’s claims are neither sufficiently “tied to a particular machine or
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apparatus” nor involved in any type of transformation of any particular
article.5
Limiting an abstract concept of conducting a clock auction to a
general purpose computer having generic components, such as the
“computer system” recited in Appellant’s claims, does not make the abstract
concept patent-eligible under 35 U.S.C. § 101. As recognized by the
Supreme Court, “the mere recitation of a generic computer cannot transform
a patent-ineligible abstract idea into a patent-eligible invention.” Alice, 573
U.S. at 223; see id. at 225 (concluding claims “simply instruct[ing] the
practitioner to implement the abstract idea of intermediated settlement on a
generic computer” are not patent eligible); see also Ultramercial, 772 F.3d
at 715–16 (claims merely reciting abstract idea of using advertising as
currency as applied to particular technological environment of the Internet
are not patent eligible); Accenture, 728 F.3d at 1344–45 (claims reciting
“generalized software components arranged to implement an abstract
concept [of generating insurance-policy-related tasks based on rules to be
completed upon the occurrence of an event] on a computer” are not patent
eligible); Dealertrack, 674 F.3d at 1333–34 (“Simply adding a ‘computer
aided’ limitation to a claim covering an abstract concept, without more, is
insufficient to render [a] claim patent eligible” (internal citation omitted)).
With regard to Appellant’s argument that the pending claims are
patent eligible because there are no obviousness or novelty rejections of the
claims, (see Reply Br. 4–5), Appellant improperly conflates the

5 Alice also confirmed that, if a patent’s systems claims are no different in
substance from its method claims, they will stand or fall together. Alice, 573
U.S. at 226. The same was true of the Alice patent’s media claims. Id.
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requirements for eligible subject matter (§ 101) with the independent
requirements of novelty (§ 102) and non-obviousness (§ 103). “The
‘novelty’ of any element or steps in a process, or even of the process itself, is
of no relevance in determining whether the subject matter of a claim falls
within the § 101 categories of possibly patentable subject matter.” Diehr,
450 U.S. at 188–89; see also Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d
1369, 1376 (Fed. Cir. 2016) (stating that, “under the Mayo/Alice framework,
a claim directed to a newly discovered law of nature (or natural phenomenon
or abstract idea) cannot rely on the novelty of that discovery for the
inventive concept necessary for patent eligibility”).
Accordingly, we sustain the Examiner’s rejection of claims 1–17
under 35 U.S.C. § 101 as directed to patent-ineligible subject matter.

Claims 18–51
Appellant addresses claims 18–51 as a group, and we treat claim 18 as
representative. See Appeal Br. 10. Independent claim 18 is a method claim,
and independent claim 35 is a computer readable medium storing a sequence
of instructions. See Claims App’x.
Claim 18 is directed to an abstract idea because it is directed to a
fundamental economic practice, which is one of certain methods of
organizing human activity, as discussed below. The steps of claim 18,
include, with italics:
transmitting first prices for one or more types of items
from said first computer to said communication system;
receiving, at one or more computers of said computer
system, one or more bids from said communication system,
said bids indicating quantities of items that a user wishes to
transact based on said first prices;
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determining, at one or more computers of said computer
system, based on received bids, whether the auction should
continue or terminate;
transmitting from said first computer second prices for
one or more types of items, responsive to a determination to
continue the auction, said second prices differing from the first
prices for at least one type of item;
receiving, at one or more computers of said computer
system, further bids, said further bids indicating intra-round
prices, each said intra-round price situated between the first
price and the second price for a type of item, each said further
bid indicating a quantity of items that a user wishes to transact
at prices above the intra-round price and a quantity of items
that the user wishes to transact at prices below the intra-round
price;
testing, at one or more computers of said computer
system, whether the received further bids satisfy one or more
constraints and applying only those further bids that satisfy the
constraints; and
determining, at one or more computers of said computer
system, based on applied further bids, whether the auction
should continue or terminate.

Appellant’s claimed invention is directed to transmitting prices for
one or more types of items, receiving one or more bids, determining whether
an auction should continue or terminate, transmitting second prices for one
or more types of items responsive to a determination to continue the auction,
receiving further bids indicating intra-round prices, testing whether the
received further bids satisfy constraints and applying only those further bids
that satisfy the constraints, and determining based on applied further bids if
the auction should continue or terminate.
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The italicized steps of claim 18 fall under the umbrella of economic
practices and mental steps, as discussed in more detail below.
Under Supreme Court precedent, claims directed purely to an abstract
idea are patent ineligible. As set forth in the 2019 Revised Guidance, which
extracts and synthesizes key concepts identified by the courts, abstract ideas
include (1) mathematical concepts, (2) certain methods of organizing human
activity, and (3) mental processes. Among those certain methods of
organizing human activity listed in the 2019 Revised Guidance are
fundamental economic practices, such as the concept of intermediated
settlement in Alice, and the concept of hedging in Bilski. Like those
concepts, claim 18 also recites a fundamental economic practice.
Specifically, the italicized steps fall under the umbrella of economic
practices, because the italicized steps, would ordinarily take place in clock
auctions, which occur in our system of commerce. See Spec. ¶ 6 (“This
provides the advantage of improving the economic efficiency of the auction
design over the prior art. The present invention usefully enables a seller or
buyer to efficiently auction multiple types of goods or services, and to
efficiently auction items with complex possibilities for substitution.”).
In Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d
1363, 1369 (Fed. Cir. 2015), an advertisement taking into account the time
of day and tailoring the information presented to the user based on that
information was considered another “fundamental . . . practice long
prevalent in our system.” In Credit Acceptance Corporation, patent claims
directed to a system and method for providing financing to allow a customer
to purchase a product selected from an inventory of products maintained by
a dealer were considered patent ineligible as directed to the abstract idea of
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processing an application for financing a purchase, an economic practice
long prevalent in commerce. Like the claims at issue in Intellectual Ventures
I and Credit Acceptance, the claimed “method for conducting a clock
auction of one or more types of items among a plurality of users” is “a
fundamental economic practice long prevalent in our system of
commerce.” Credit Acceptance, 859 F.3d at 1054.
Appellant argues, without support, that “[o]ffering a bid is not a
commercial interaction.” Reply Br. 5. We disagree because offering a bid is
an offer to purchase an item, which is a part of a commercial interaction.
Thus, we conclude claim 18 recites a fundamental economic practice, which
is one of certain methods of organizing human activity identified in the 2019
Revised Guidance, and thus an abstract idea.
Additionally, claim 18 is similar to claims that courts have concluded
recite a mental process. See Symantec Corp., 838 F.3d at 1318 (“[W]ith the
exception of generic computer-implemented steps, there is nothing in the
claims themselves that foreclose them from being performed by a human,
mentally or with pen and paper.”), quoted in 2019 Revised Guidance, 84
Fed. Reg. at 52 n.14; Mortg. Grader, 811 F.3d at 1324 (holding that
computer-implemented method for “anonymous loan shopping” was an
abstract idea because it could be “performed by humans without a
computer”); quoted in 2019 Revised Guidance, 84 Fed. Reg. at 52 n.14.
A person can perform the above-quoted steps of claim 18 by using his
or her mind (or pen and paper) in the claimed manner. For example, a person
can “transmit[] first prices for one or more types of items,” using pen and
paper. A person can “receiv[e] one or more bids, . . . said bids indicating
quantities of items that a user wishes to transact based on said first prices”
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using pen and paper. A person can determine “based on received bids,
whether the auction should continue or terminate,” via his or her mind or via
pen and paper. A person can transmit “second prices for one or more types
of items, responsive to a determination to continue the auction, said second
prices differing from the first prices for at least one type of item” using pen
and paper. A person can receive “further bids, said further bids indicating
intra-round prices, each said intra-round price situated between the first
price and the second price for a type of item, each said further bid indicating
a quantity of items that a user wishes to transact at prices above the intra-
round price and a quantity of items that the user wishes to transact at prices
below the intra-round price,” using pen and paper. A person can, via pen
and paper, or his or her mind, test “whether the received further bids satisfy
one or more constraints and apply[] only those further bids that satisfy the
constraints.” A person can determine “based on applied further bids,
whether the auction should continue or terminate,” using his or her mind, or
pen and paper. Cf. CyberSource, 654 F.3d at 1372–73 (noting that a recited
step that constructed a map of credit card numbers could be performed by
merely writing down a list of credit card transactions made from a particular
IP address.); see also In re Grams, 888 F.2d at 837 n.1 (“Words used in a
claim operating on data to solve a problem can serve the same purpose as a
formula.”); Elec. Power Grp., 830 F.3d at 1354 (noting that analyzing
information by steps people go through in their minds, or by mathematical
algorithms, without more, are essentially mental processes within the
abstract idea category); Digitech, 758 F.3d at 1351 (“Without additional
limitations, a process that employs mathematical algorithms to manipulate
existing information to generate additional information is not patent
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eligible.”); Benson, 409 U.S. 63 (holding ineligible claims involving a
mathematical algorithm and directed to converting binary-coded-decimal
(BCD) numerals into pure binary numerals for use with a computer). Accord
CyberSource, 654 F.3d at 1375 (“That purely mental processes can be
unpatentable, even when performed by a computer, was precisely the
holding of the Supreme Court in [Benson].”). Therefore, the limitations fall
squarely within the mental processes category of the agency’s guidelines
and, therefore, recite an abstract idea. See 2019 Revised Guidance, 84 Fed.
Reg. at 52.
In accordance with the 2019 Revised Guidance, and looking to MPEP
§§ 2106.05(a)–(c) and (e)–(h), we determine that the additional elements of
claim 18, both individually and as an ordered combination, do not integrate a
judicial exception, in this case the abstract idea of a fundamental economic
practice or a mental process, into a practical application. Claim 18 is
directed to the implementation of the abstract idea on a generic computer
system.
Here, the the recited “computer,” “communication system,” and
“computer system” are the only recited elements beyond the abstract idea,
but these additional elements do not integrate the abstract idea into a
practical application when reading claim 18 as a whole. These elements are
generic components. See, e.g., Spec. Fig. 1, ¶¶ 29–31 (“In one embodiment,
each of the systems are personal computers or workstations.”).
We are not persuaded that the claimed invention improves the
“computer,” “communication system,” and “computer system” or their
components’ functionality or efficiency, or otherwise changes the way those
devices function, at least in the sense contemplated by the Federal Circuit in
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Enfish, despite Appellant’s argument to the contrary (Appeal Br. 10). The
claimed self-referential table in Enfish was a specific type of data structure
designed to improve the way a computer stores and retrieves data in
memory. Enfish, 822 F.3d at 1339. To the extent Appellant contends that the
claimed invention uses such a data structure to improve a computer’s
functionality or efficiency, or otherwise change the way that device
functions (Appeal Br. 18), there is no persuasive evidence on this record to
substantiate such a contention.
To the extent Appellant contends that the claimed invention is rooted
in technology because it is ostensibly directed to a technical solution, we
disagree. Even assuming, without deciding, that claimed invention can
conduct a clock auction faster than doing so manually, any speed increase
comes from the capabilities of the generic computer components—not the
recited process itself. See FairWarning, 839 F.3d at 1095 (citing Bancorp
Servs., 687 F.3d at 1278 (“[T]he fact that the required calculations could be
performed more efficiently via a computer does not materially alter the
patent eligibility of the claimed subject matter.”)); see also Erie Indemnity
Co., 711 F. App’x at 1017 (“Though the claims purport to accelerate the
process of finding errant files and to reduce error, we have held that speed
and accuracy increases stemming from the ordinary capabilities of a general-
purpose computer ‘do[] not materially alter the patent eligibility of the
claimed subject matter.’”). Like the claims in FairWarning, the focus of
claim 18 is not on an improvement in computer processors as tools, but on
certain independently abstract ideas that use generic computing components
as tools. See FairWarning, 839 F.3d at 1095 (citations and quotation marks
omitted).
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As recognized by the Supreme Court, “the mere recitation of a generic
computer cannot transform a patent ineligible abstract idea into a patent-
eligible invention.” Alice, 573 U.S. at 223; see id. at 225 (concluding claims
“simply instruct[ing] the practitioner to implement the abstract idea of
intermediated settlement on a generic computer” are not patent eligible); see
also Ultramercial, 772 F.3d at 715–16 (claims merely reciting abstract idea
of using advertising as currency as applied to particular technological
environment of the Internet are not patent eligible); Accenture, 728 F.3d at
1344–45 (claims reciting “generalized software components arranged to
implement an abstract concept [of generating insurance-policy-related tasks
based on rules to be completed upon the occurrence of an event] on a
computer” are not patent eligible); Dealertrack, 674 F.3d at 1333–34
(“Simply adding a ‘computer aided’ limitation to a claim covering an
abstract concept, without more, is insufficient to render [a] claim patent
eligible” (internal citation omitted)).
Appellant’s reliance on Finjan (Appeal Br. 15) is likewise unavailing,
here, the court held eligible claims directed to a behavior-based virus
scanning system. In reaching this conclusion, the court noted that the
claimed invention employed a new kind of file that enabled a computer
security system to do that which could not be done previously, including
accumulating and using newly-available, behavior-based information about
potential threats. Finjan, 879 F.3d at 1305.
That is not the case here. To the extent that Appellant contends that
the claimed invention is directed to such improvements in computer
capabilities (see Appeal Br. 15), there is no persuasive evidence on this
record to substantiate such a contention.
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We reach the same conclusion regarding Appellant’s reliance on Core
Wireless. Appeal Br. 15. There, the court held eligible claims reciting a
computing device that could display an application summary window that
was not only reachable directly from the main menu, but could also display a
limited list of selectable functions while the application was in an un-
launched state. Core Wireless, 880 F.3d at 1360–63. Upon selecting a
function, the device would then launch the application and initiate the
selected function. Id. at 1360. In reaching its eligibility conclusion, the court
noted that the claimed invention was directed to an improved user interface
for computing devices that used a particular manner of summarizing and
presenting a limited set of information to the user, unlike conventional user
interface methods that displayed a generic index on a computer. Id. at 1362–
63.
That is not the case here. To the extent that Appellant contends that
the claimed invention is directed to such improvements in computer
capabilities (see Appeal Br. 15), there is no persuasive evidence on this
record to substantiate such a contention.
Appellant’s reliance on Trading Technologies International (Appeal
Br. 18), is likewise unavailing at least because the decision is non-
precedential. Moreover, in Trading Technologies, the Federal Circuit
affirmed the district court’s holding that the claims were not directed to an
abstract idea because the claims required “a specific, structured graphical
user interface paired with a prescribed functionality directly related to the
graphical user interface’s structure that is addressed to and resolves a
specifically identified problem in the prior state of the art.” Trading Techs.,
675 F. App’x at 1004. Here, the claims do not recite a graphical user
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interface and, therefore, are readily distinguishable from the claims
in Trading Technologies. As discussed above, a generic computer system is
used to implement the steps, and there is no indication that claim 1 improves
the functioning of the processor, makes it operate more efficiently, or solves
a technological problem with a solution rooted in computer technology.
Accordingly, the claim as a whole does not integrate the abstract idea
into a practical application because the claim limitations do not impose any
meaningful limits on practicing the abstract idea. Stated differently, the
claims do not (1) improve the functioning of a computer or other technology,
(2) are not applied with any particular machine (except for generic computer
components), (3) do not effect a transformation of a particular article to a
different state, and (4) are not applied in any 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. See MPEP
§§ 2106.05(a)–(c), (e)–(h).
Inventive Concept
Because we determine that claim 18 is “directed to” an abstract idea,
we next consider whether claim 18 recites an “inventive concept.” The
Examiner determined that claim 18 does not recite an inventive concept
because the additional elements in the claim do not amount to “significantly
more” than an abstract idea. See Ans. 13, 14.
We agree with the Examiner’s determination in this regard. See Ans.
13, 14. Using generic computer components to perform abstract ideas does
not provide the necessary inventive concept. See Alice, 573 U.S. at 223
(“[T]he mere recitation of a generic computer cannot transform a patent-
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ineligible abstract idea into a patent-eligible invention.”). Thus, the elements
of claim 18 do not amount to “significantly more” than the abstract idea
itself.
Preemption is a driving concern when determining patent eligibility.
See Alice, 573 U.S. at 216–17. Patent law cannot inhibit further discovery by
improperly tying up the future use of the building blocks of human
ingenuity. See id. (citing Mayo, 566 U.S. at 85–86). Although preemption is
characterized as a driving concern for patent eligibility, preemption itself is
not the test for patent eligibility. “Where a patent’s claims are deemed only
to disclose patent ineligible subject matter under the Mayo framework, as
they are in this case, preemption concerns are fully addressed and made
moot.” Ariosa, 788 F.3d at 1379. “While preemption may signal patent
ineligible subject matter, the absence of complete preemption does not
demonstrate patent eligibility.” Id.
To the extent Appellant contends that the recited limitations, including
those detailed above in connection with Alice step one, add significantly
more than the abstract idea to provide an inventive concept under
Alice/Mayo step two (see Appeal Br. 15, 16), these limitations are not
additional elements beyond the abstract idea, but rather are directed to the
abstract idea as noted previously. See 2019 Revised Guidance, 84 Fed. Reg.
at 56 (instructing that additional recited elements should be evaluated in
Alice/Mayo step two to determine whether they (1) add specific limitations
that are not well-understood, routine, and conventional in the field, or (2)
simply append well-understood, routine, and conventional activities
previously known to the industry (citing MPEP § 2106.05(d)). These
elements form part of the recited abstract ideas and thus are not “additional
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elements” that “‘transform the nature of the claim’ into a patent-eligible
application.” Alice, 573 U.S. at 217 (quoting Mayo, 566 U.S. at 78); see also
2019 Revised Guidance, 84 Fed. Reg. at 55 n.24 (“USPTO guidance uses
the term ‘additional elements’ to refer to claim features, limitations, and/or
steps that are recited in the claim beyond the identified judicial exception.”
(Emphasis added)).
To the extent Appellant contends that the claimed invention is rooted
in technology because it is ostensibly directed to a technical solution (see
Appeal Br. 16, 17), we disagree. Even assuming, without deciding, that the
claimed invention can conduct a clock auction of one or more types of items
among users faster than before, any speed increase comes from the
capabilities of the generic computer components—not the recited process
itself. See FairWarning, 839 F.3d at 1095 (citing Bancorp Servs., 687 F.3d
at 1278 (“[T]he fact that the required calculations could be performed more
efficiently via a computer does not materially alter the patent eligibility of
the claimed subject matter.”)); see also Erie Indemnity Co., 711 F. App’x at
1017 (“Though the claims purport to accelerate the process of finding errant
files and to reduce error, we have held that speed and accuracy increases
stemming from the ordinary capabilities of a general-purpose computer ‘do[
] not materially alter the patent eligibility of the claimed subject matter.’”).
Like the claims in FairWarning, the focus of claim 1 is not on an
improvement in computer processors as tools, but on certain independently
abstract ideas that use generic computing components as tools. See
FairWarning, 839 F.3d at 1095 (citations and quotation marks omitted).
As recognized by the Federal Circuit in Ultramercial, 772 F.3d at
715–16, Bilski’s “machine-or-transformation” test can also provide a “useful
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clue” in the second step of the Alice framework. See In re Bilski, 545 F.3d at
954. Under Bilski’s test, a claimed process is patent-eligible under 35 U.S.C.
§ 101 if: (1) it is tied to a particular machine or apparatus; or (2) it
transforms a particular article into a different state or thing. Bilski, 545 F.3d
at 954 (citing Benson, 409 U.S. at 70). However, Appellant’s claims are
neither sufficiently “tied to a particular machine or apparatus” nor involved
in any type of transformation of any particular article.6
Limiting an abstract concept of “selecting an address, identifying
locations based on an address, showing the locations on a map, and plotting
a travel path to one of those locations” to a general purpose computer having
generic components, such as the “computer” recited in Appellant’s claims,
does not make the abstract concept patent-eligible under 35 U.S.C. § 101.
As recognized by the Supreme Court, “the mere recitation of a generic
computer cannot transform a patent ineligible abstract idea into a patent-
eligible invention.” Alice, 573 U.S. at 223; see id. at 225 (concluding claims
“simply instruct[ing] the practitioner to implement the abstract idea of
intermediated settlement on a generic computer” are not patent eligible); see
also Ultramercial, 772 F.3d at 715–16 (claims merely reciting abstract idea
of using advertising as currency as applied to particular technological
environment of the Internet are not patent eligible); Accenture, 728 F.3d at
1344–45 (claims reciting “generalized software components arranged to
implement an abstract concept [of generating insurance-policy-related tasks
based on rules to be completed upon the occurrence of an event] on a

6 Alice also confirmed that, if a patent’s systems claims are no different in
substance from its method claims, they will stand or fall together. Alice, 573
U.S. at 226. The same was true of the Alice patent’s media claims. Id.
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computer” are not patent eligible); Dealertrack, 674 F.3d at 1333–34
(“Simply adding a ‘computer aided’ limitation to a claim covering an
abstract concept, without more, is insufficient to render [a] claim patent
eligible” (internal citation omitted)).
With regard to Appellant’s argument that the pending claims are
patent eligible because there are no obviousness or novelty rejections of the
claims (see Reply Br. 4–5), Appellant improperly conflates the requirements
for eligible subject matter (§ 101) with the independent requirements of
novelty (§ 102) and non-obviousness (§ 103). “The ‘novelty’ of any element
or steps in a process, or even of the process itself, is of no relevance in
determining whether the subject matter of a claim falls within the § 101
categories of possibly patentable subject matter.” Diehr, 450 U.S. at 188–89;
see also Genetic Techs., 818 F.3d at 1376 (stating that, “under the
Mayo/Alice framework, a claim directed to a newly discovered law of nature
(or natural phenomenon or abstract idea) cannot rely on the novelty of that
discovery for the inventive concept necessary for patent eligibility”).
Accordingly, we sustain the Examiner’s rejection of claims 18–51
under 35 U.S.C. § 101 as directed to patent-ineligible subject matter.

CONCLUSION
We affirm the rejection of claims 1–51.
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DECISION SUMMARY
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1–51 101 1–51

TIME PERIOD FOR RESPONSE
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1)(iv).
AFFIRMED

UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte LAWRENCE M. AUSUBEL
Appeal 2019-005178
Application 13/898,214
Technology Center 3600
Before ERIC S. FRAHM, BETH Z. SHAW, and
MATTHEW J. McNEILL, Administrative Patent Judges.
FRAHM, Administrative Patent Judge, dissenting.
I fully join the decision as to (i) the means-plus-function interpretation
(see Maj. Op. 10–16) (i); and (ii) the determination, under Step 2A, Prong
One of the 2019 Revised Guidance, that claims 1–51 recite a fundamental
economic practice (e.g., an clock auction, auction process, commercial or
business transaction) that is an abstract idea (see Maj. Op. 9–11, 16–18).
However, I respectfully disagree with my colleagues’ conclusion that the
claims are directed to an abstract idea, and thus, ineligible under 35 U.S.C. §
101.
More specifically, I agree with the Majority that “the claims recite a
fundamental economic practice, which is one of certain methods of
organizing human activity identified in the Revised Guidance, and thus, an
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abstract idea. See 2019 Revised Guidance, 84 Fed. Reg. at 52, 53 (listing
‘[c]ertain methods of organizing human activity—fundamental economic
principles or practices’ as one of the ‘enumerated groupings of abstract
ideas’)” (Maj. Op. 9). Because the claims, in light of the Specification as a
whole (see Spec. ¶¶ 6–8, 82–92; Figs. 1–4, 9A–C), set forth a complex
bidding structure for a clock auction for multiple items, and a computer
would be required to perform the recited process, I respectfully do not agree
with the Majority that the claims recite a mental process that can be
performed in the human mind, or with the aid of pen and paper (see Maj.
Op. 18–20). Giving claims 1, 18, and 35 the broadest reasonable
interpretation consistent with the Specification (see In re Morris, 127 F.3d
1048, 1054 (Fed. Cir. 1997)), and considering Figures 1–4, 9A, and 9B and
paragraphs 6–8, 81, and 82, 87–92 of the Specification, I would conclude
that the claimed clock auction process, including the intra-round bidding
step, cannot be performed mentally without a computer.
Looking at the “additional elements” for claim features, limitations, or
steps that the claim recites beyond the identified judicial exception (see 2019
Revised Guidance at 55 n.24), in claims 1, 18, and 35, the additional
elements include the steps and/or elements for receiving intra-round bid
prices that go beyond just a standard clock auction.
Under Step 2A, Prong Two of the 2019 Revised Guidance, I differ
from my colleagues in that I would determine the step of receiving intra-
round prices in each of independent claims 1, 18, and 35 to be an additional
feature, element, or limitation beyond the abstract idea (i.e., the auction or
clock auction), that (i) is not a mental process that can be performed
mentally by a human, with or without pen and paper; and (ii) is not directed
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to the abstract idea because the intra-round price bidding step is a
meaningful feature, element, or limitation that integrates the abstract idea
into a practical application of the idea. I also disagree with the Majority that
the means for “receiving further bids, said further bids indicating intra-
round prices, each said intra-round price situated between the first price
and the second price for a type of item, each said further bid indicating a
quantity of items that a user wishes to transact at prices above the intra-
round price and a quantity of items that the user wishes to transact at prices
below the intra-round price” (claim 1) “would ordinarily take place in clock
auctions, which occur in our system of commerce” (Maj. Op. 16–17 citing
Spec. ¶¶ 6, 44). It is precisely this feature that was at the heart of the Notice
of Allowability mailed on April 16, 2014, page 4 (see Appeal Br. 29,
Evidence Appendix), in which the Examiner stated that the prior art, in any
combination, “failed to teach or render obvious to one of ordinary skill in the
art, the method step of . . . [receiving bids indicating intra-round prices, as
set forth in claims 1, 18, and 35].”
According to Appellant, the ability to receive intra-round bids as
claimed is precisely the technological improvement and invention (see Spec.
¶¶ 74–83), and represents a technological improvement in discrete round
dynamic auctions (i.e., clock auctions) (see Oral Hr’g Tr. 4:13–15; 5:20–24;
8:10–13, 19–21). And, as stated by Appellant (i) at the Oral Hearing (Oral
Hr’g Tr. 6:9–26; 8:10–24; 9:17–10:2); and (ii) in the Appeal Brief (see
Appeal Br. 3–6) (explaining the support for the intra-round price bid receipt
for claims 1, 18, and 35), Figures 9A and 9B, and the accompanying
description (see Spec. ¶¶ 87–89), provide the algorithm for performing a
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dynamic clock auction with a discrete round structure, including receiving
intra-round bid prices.
Furthermore, I agree with Appellant’s contentions (see Appeal Brief
15–17; Reply Br. 6–8; Oral Hr’g Tr. 8:9–24), that the step of receiving intra-
round bidding (see claims 1, 18, 35) is a meaningful limitation in addition to
the abstract idea that is an improvement to clock auctions, and integrates the
abstract idea (i.e., a clock auction) into a practical application (see Spec.
¶¶ 6, 81, 82, 92; Oral Hr’g Tr. 5:3–26) (explaining the usefulness of such an
improvement). Considering each of claims 1, 18, and 35 as a whole, and in
light of the Specification (see at least Spec. ¶¶ 6, 82, 92), the intra-round
bidding step applies or uses the abstract idea (e.g., clock auctions) in a
meaningful way such that the claims as a whole are more than a drafting
effort designed to monopolize the exception (e.g., clock auctions).
The claims (1) improve the functioning of a computer or other
technology (e.g., the field of clock auctions with discrete round bidding),
and (2) are applied in a meaningful way beyond generally linking the use of
the judicial exception to a particular technological environment, such that
each of claims 1, 18, and 35, as a whole, is more than a drafting effort
designed to monopolize the exception. See MPEP §§ 2106.05(b). Thus, I
would conclude the abstract idea is integrated into a practical application.
Because I would conclude that each of claims 1, 18, and 35 as a whole
integrate the abstract idea (e.g., clock auctions) into a practical application
(e.g., receiving intra-round bids), I would not sustain the Examiner’s
rejection under 35 U.S.C. § 101.
In summary, for the reasons discussed, I concur with the
Majority’s determination that the claims are directed to certain methods
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5
of organizing human activity, i.e. clock auctions or commercial
transactions. Certain methods of organizing human activity are
identified in the 2019 Revised Guidance as abstract ideas. However, I
would further determine the additional claim element(s), and thus the
ordered combinations of elements recited in each of claims 1, 18, and 35,
integrate the judicial exception into a practical application.
In addition, for similar reasons as already discussed above with
regard to a practical application, I would determine the claims recite
limitations that amount to significantly more than the abstract idea itself.
I would also find that the additional element of receiving intra-round
bids is an inventive concept that is not well-understood, routine, or
conventional activity in the field
Accordingly, I would not sustain the rejection of independent
claims 1, 18, and 35 under 35 U.S.C. § 101 and, for the same reasons, the
rejection of dependent claims 2–17, 19–34, and 46–51 depending
respectively therefrom.