Craig S. Etchegoyen

Patent Trials and Appeals Board

Jun 22, 2020

13239260 - (D) (P.T.A.B. Jun. 22, 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.
13/239,260 09/21/2011 Craig S. Etchegoyen UN-NP-SU-068 (Large) 1398
96051 7590 06/22/2020
Uniloc USA Inc.
102 N. College Avenue
Suite 303
Tyler, TX 75702
EXAMINER
HUANG, JAY
ART UNIT PAPER NUMBER
3685
NOTIFICATION DATE DELIVERY MODE
06/22/2020 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):
kris.pangan@unilocusa.com
sean.burdick@unilocusa.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

Ex parte CRAIG S. ETCHEGOYEN

Appeal 2018-006457
Application 13/239,260
Technology Center 3600

Before MICHAEL W. KIM, PHILIP J. HOFFMANN, and
ROBERT J. SILVERMAN, Administrative Patent Judges.

KIM, Administrative Patent Judge.

DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1–16. We have jurisdiction under
35 U.S.C. § 6(b).
We AFFIRM.

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 Uniloc
USA, Inc. and Uniloc Luxembourg S.A. Appeal Br. 3.
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CLAIMED SUBJECT MATTER
The claimed invention relates to “an auditing service for reliable
software license authentication.” Spec. ¶ 3. Independent claim 1,
reproduced below, is representative of the claimed subject matter:
1. A system for auditing software usage on multiple network
devices, comprising:
a communication module;
an audit database accessible by the communication
module, the audit database storing audit numbers for the multiple
network devices, each audit number derived from a software
identifier identifying the software and from a device identifier,
each software identifier representing a particular licensing
instance of the software and number of seats licensed for the
instance, each device identifier being generated from a
combination of user-configurable and non-user-configurable
machine parameters and identifying a particular one of the
multiple network devices, each audit number representing an
activation of the software;
a display module;
at least one processor in operative communication with the
communication module and the display module; and
a memory in operative communication with the at least
one processor and comprising executable code for the at least one
processor to:
instruct the communication module to access the
database;
read the audit numbers;
sort the audit numbers according to at least one of
activated license seats and unactivated license seats;
read a number of seats licensed for each software
identifier; and
instruct the display module to display licensed seats
versus activations according to the sorted audit numbers.
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REJECTION
The Examiner rejected claims 1–16 under 35 U.S.C. § 101 as directed
to ineligible subject matter in the form of an abstract idea.
ANALYSIS
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.
Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
566 U.S. 66, 75–77 (2012)). In accordance with that framework, we first
determine what concept the claim is “directed to.” See 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,
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such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
(1981)); “tanning, dyeing, making waterproof 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 part
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, 566 U.S. at 77). “[M]erely
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requir[ing] generic computer implementation[] fail[s] to transform that
abstract idea into a patent-eligible invention.” Id.
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”).2 “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
(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”).3
2019 Revised Guidance, 84 Fed. Reg. at 52–55.

2 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).
3 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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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.
Step 2A, Prong 1: “recites a judicial exception”
Under the first step of the Alice/Mayo framework, the Examiner
determines that the claims are directed to “accessing audit numbers, sorting
audit numbers, and displaying data according to the sorted audit numbers”
which is “an example of an idea of itself (i.e. an idea standing alone such as
an uninstantiated concept, plan, or scheme, as well as a mental process that
can be performed in the human mind or by a human using a pen and paper).”
Final Act. 6. Appellant argues that the Examiner has oversimplified the
claims and asserts that the claims are directed not to an abstract idea, but
rather specific actions in determining whether to grant a software license.
Appeal Br. 9–11; Reply Br. 2–3. We agree with the Examiner.
Claim 1 recites steps to “read the audit numbers,” “sort the audit
numbers according to at least one of activated license seats and unactivated
license seats,” and “read a number of seats licensed for each software
identifier.” As recited, the steps to “read the audit numbers” and “read a
number of seats licensed for each software identifier” are so broad as to
encompass a human “reading” via observation, which is a mental process.
2019 Revised Guidance, 84 Fed. Reg. at 52. Additionally, as also recited,
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the steps of a person sorting audit numbers according to at least one of
activated license seats and unactivated license seats involve no more than
what a human could practically do mentally, via an evaluation or judgment,
and certainly could be accomplished using a pen and paper. See Final
Act. 6–7. As such, the recited acts of reading audit numbers, sorting audit
numbers, and reading a number of seats licensed here can each be
reasonably characterized as involving mental processes, such as observation,
evaluation, and judgment. The 2019 Guidance expressly recognizes mental
processes as abstract ideas. 2019 Guidance, 84 Fed. Reg. at 52.
Appellant argues that the Examiner’s broad generalizations of the
claims ignores the recited audit database storing audit numbers derived from
software identifiers and device identifiers and other specific actions. Appeal
Br. 10–11; Reply Br. 2–3. But the Specification indicates, and the claim
confirms, that the recited audit numbers are merely data to be manipulated
by the abstract idea identified by the Examiner. See Spec. ¶¶ 52–53 (“the
audit number 142 may be generated from the device identifier 124, the
software identifier 130, and/or the geo-location code 140 via any number of
suitable approaches”), ¶ 27 (“[t]he device identifier may be generated using
a combination of user-configurable and non-user-configurable machine
parameters as input to a process that results in the device identifier, which
may be expressed in digital data as a binary number”), ¶ 49 (“[t]he collected
software identifier may include the software serial number, product
identification number, product key, etc.”), ¶ 51 (“the geo-locater 140 may
comprise the IP address or the like of the device 110.”). The Examiner
refers to the audit numbers by identifying the abstract idea as “accessing
audit numbers, sorting audit numbers, and displaying data according to the
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sorted audit numbers.” Final Act. 5. We are not persuaded that the
Examiner ignores the recited specific audit numbers merely because the
Examiner does not identify the specific format of the audit numbers when
identifying the abstract idea in the claim.
Therefore, we agree with the Examiner that claim 1 recites a judicial
exception of an abstract idea.
Step 2A, Prong 2: “does not integrate that exception into a
practical application”
Because claim 1 is recites an abstract idea, we turn to Prong Two of
Revised Step 2A of the 2019 Revised Guidance, where we identify
“additional elements” beyond the abstract idea, and evaluate whether “those
additional elements individually and in combination to determine whether
they integrate the exception into a practical application.” 2019 Revised
Guidance, 84 Fed. Reg. at 54–55.
Claim 1 recites additional elements beyond the abstract idea in the
form of additional components and additional steps. The additional
components are: (1) “a communication module”; (2) “an audit database
accessible by the communication module, the audit database storing audit
numbers for the multiple network devices, each audit number derived from a
software identifier identifying the software and from a device identifier, each
software identifier representing a particular licensing instance of the
software and number of seats licensed for the instance, each device identifier
being generated from a combination of user-configurable and non-user-
configurable machine parameters and identifying a particular one of the
multiple network devices, each audit number representing an activation of
the software”; (3) “a display module”; (4) “at least one processor in
operative communication with the communication module and the display
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module”; and (5) “a memory in operative communication with the at least
one processor and comprising executable code for the at least one
processor.” See Final Act. 8. The additional steps are: (1) “instruct the
communication module to access the database”; and (2) “instruct the display
module to display licensed seats versus activations according to the sorted
audit numbers.” Id.
Appellant asserts that the claims are not directed to an abstract idea
because they recite one or more steps that are “specifically designed to
achieve improved software auditing techniques.” Appeal Br. 11–14; Reply
Br. 3. To support this assertion, Appellant cites the “highly specific and
non-generic step” of using a device identifier generated from a combination
of user-configurable and non-user configurable machine parameters. Appeal
Br. 11–14; Reply Br. 3. We are not persuaded that the claims recite
additional elements sufficient to integrate the abstract idea into a practical
application.
Appellant essentially argues that using a device identifier generated
from a combination of user-configurable and non-user configurable machine
parameters improves the technical field of software auditing. But all claim 1
requires is a system comprising an audit database storing pre-derived audit
numbers. The recited audit numbers are derived from device identifiers,
which are generated from a combination of user-configurable and non-user
configurable machine parameters. The recited audit database serves as a
data store for information that is subsequently accessed by the recited
communication module and analyzed. Obtaining information from a pre-
compiled database, however, is a data gathering step. CyberSource Corp. v.
Retail Decisions, Inc., 654 F.3d 1366, 1370, 1372 (Fed. Cir. 2011) (citing In
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re Grams, 888 F.2d 835, 839–40 (Fed. Cir. 1989)). A data gathering step is
insignificant extra-solution activity that fails to integrate the abstract idea
into a practical application. 2019 Revised Guidance, 84 Fed. Reg. at 55; see
MPEP § 2106.05(g). Therefore, obtaining audit numbers from an audit
database, by itself and as recited, fails to integrate the abstract idea into a
practical application.
Using the specific, recited audit number itself also fails to integrate
the abstract idea into a practical application. This recited audit number
merely specifies the type of information that the system stores and collects.
That is, claim 1 merely performs the abstract idea on specific audit numbers.
But “[e]ven if a process of collecting and analyzing information is ‘limited
to particular content’ or a particular ‘source,’ that limitation does not make
the collection and analysis other than abstract.” SAP America, Inc. v.
InvestPic, LLC, 890 F.3d 1016, 1022 (Fed. Cir. 2018); Elec. Power Grp,
LLC v. Alstom S.A., 830 F.3d 1350, 1355 (Fed. Cir. 2016) (“[M]erely
selecting information, by content or source, for collection, analysis, and
display does nothing significant to differentiate a process from ordinary
mental processes.”). At best, using a specific audit number generally links
the abstract idea to a particular technological environment. An additional
element that does no more than generally link a judicial exception to an
abstract idea fails to integrate the abstract idea into a practical application.
2019 Revised Guidance, 84 Fed. Reg. at 55; see MPEP § 2106.05(h).
Therefore, using specific audit numbers also fails to integrate the abstract
idea into a practical application.
The remaining additional elements also fail to integrate the abstract
idea into a practical application. For example, the recited communication
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module, display, at least one processor, and memory are used in an ordinary
manner and for their ordinary functions. And Appellant admits that the
claims improve upon “existing processes of software auditing.” Appeal
Br. 13. We are unpersuaded that an improvement upon existing processes of
software auditing recites any improvement to those components themselves.
See MPEP § 2106.05(a). As claimed, any additional computer elements are
used in manner that is indistinguishable from merely providing instructions
to apply the method on a general-purpose computer. See MPEP
§ 2106.05(f). And because the use of the computers is so generic, a
particular computer is not required, and so the claim does not define or rely
on a “particular machine.” See MPEP § 2106.05(b). Further, the method
does not transform matter; at best it transforms information. See MPEP
§ 2106.05(c); Gottschalk, 409 U.S. at 71–72 (holding that a computer based
algorithm that merely transforms data from one form to another is not
patent-eligible). Moreover, the recited step to “instruct the display module
to display licensed seats versus activations according to the sorted audit
numbers” is extra-solution activity because it is a mere nominal or tangential
addition to the claim, i.e., a generic presentation of the collected and
analyzed data. See Elec. Power Grp., 830 F.3d at 1354; see also SAP
America, 890 F.3d at 1021 (“[M]erely presenting the results of abstract
processes of collecting and analyzing information, without more (such as
identifying a particular tool for presentation), is abstract as an ancillary part
of such collection and analysis.”) (citations omitted).
For all these reasons, we are not persuaded that independent claim 1
recites any additional elements that “integrate the abstract idea into a
practical application.”
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Step 2B: “well-understood, routine, conventional”
Under Step 2B of the 2019 Revised Guidance, we next analyze
whether claim 1 adds any specific limitations beyond the judicial exception
that, either alone or as an ordered combination, provide an “inventive
concept.” 2019 Revised Guidance, 84 Fed. Reg. at 56. In doing so, we
consider whether the additional elements, individually and in an ordered
combination, are well-understood, routine, and conventional. Id.; See MPEP
§ 2106.05(d).
The Examiner concludes that the claims do not contain any additional
elements, individual or in combination, that amount to significantly more
than the abstract idea. Final Act. 8–9. Appellant argues that the Examiner
fails to establish that the claims do not recite significantly more than an
abstract idea when the additional claim elements are considered as an
ordered combination. Appeal Br. 12–13; Reply Br. 3–4. Appellant also
asserts that the claims recite one or more steps that are “specifically
designed to achieve improved software auditing techniques.” Appeal
Br. 11–14; Reply Br. 3. To support this assertion, Appellant cites the
“highly specific and non-generic step” of using a device identifier generated
from a combination of user-configurable and non-user configurable machine
parameters and the lack of prior art suggesting anticipation or obviousness
for this limitation. Appeal Br. 11–14; Reply Br. 3–4. We agree with the
Examiner.
As an initial matter, we note that to the extent Appellant argues the
claims necessarily contain an “inventive concept” based on their alleged
novelty or non-obviousness over the cited references, Appellant
misapprehends the controlling precedent. Id. Although the second step in
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the Alice/Mayo framework is termed a search for an “inventive concept,” the
analysis is not an evaluation of novelty or non-obviousness, but rather, a
search for “an element or combination of elements that is ‘sufficient to
ensure that the patent in practice amounts to significantly more than a patent
upon the [ineligible concept] itself.’” Alice, 573 U.S. at 217–218. A novel
and nonobvious claim directed to an abstract idea is, nonetheless, patent-
ineligible. See Mayo, 566 U.S. at 90.
Further, when viewed individually, the additional elements fail to
provide an inventive concept. As we demonstrated above, beyond the
abstract idea, claim 1 recites only the additional components of “a
communication module,” “an audit database,” “a display module,” “at least
one processor in operative communication with the communication module
and the display module,” and “a memory in operative communication with
the at least one processor and comprising executable code for the at least one
processor.” Claim 1 further includes the additional steps to “instruct the
communication module to access the database” “instruct the display module
to display licensed seats versus activations according to the sorted audit
numbers.”
The recited communication module, processor, and memory are all
parts of a generic computer, whose operation within the scope of the claim
steps is merely well-understood, routine, and conventional, as they are used
to generally store transmit, analyze, and store information. See
Alice Corp. Pty. v. CLS Bank Int’l, 573 U.S. 208, 225–26 (finding a “data
processing system” with a “communications controller” and “data storage
unit” to be generic computer components that are well-understood, routine,
and conventional).
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And as noted above, the audit database that is accessed by the
communication module merely provides a preexisting database for data
collection. When re-evaluated again at Step 2B, this is still a data gathering
step that is insignificant extra-solution activity. CyberSource, 654 F.3d at
1370, 1372 (citing In re Grams, 888 F.2d at 839–40); See MPEP
§ 2106.05(g). Similarly, the display module that may be instructed to
display licensed seats versus activations is still, upon re-evaluation,
insignificant extra-solution activity because it merely outputs the result of
the mental processes. See MPEP § 2106.05(g); Elec. Power Grp., 830 F.3d
at 1354; SAP America, Inc. v. InvestPic, LLC, 890 F.3d at 1021. Therefore,
providing an audit database to store audit numbers and a display module to
display licensed seats versus activations do not provide an inventive concept.
When viewed in an ordered combination, the additional elements in
claim 1 do no more than automate the mental processes used to audit
software licenses. The ordered combination of additional elements are no
more than generic computer components performing generic computer
functions and insignificant extra-solution activity.
Therefore, the additional elements, individually and in combination,
fail to provide an inventive concept because they are all well-understood,
routine, and conventional.
For the reasons above, we sustain the rejection of claims as directed to
abstract ideas under 35 U.S.C. § 101.
DECISION
The Examiner’s rejection under 35 U.S.C. § 101 is affirmed.
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CONCLUSION
Claims
Rejected
35 U.S.C. § Reference(s)/
Basis
Affirmed Reversed
1–16 101 Eligibility 1–16

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