Ex Parte Bruno

Patent Trials and Appeals BoardFeb 7, 2019

13412758 - (D) (P.T.A.B. Feb. 7, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. FILING DATE 13/412,758 03/06/2012 62008 7590 02/11/2019 MAIER & MAIER, PLLC 345 South Patrick Street ALEXANDRIA, VA 22314 FIRST NAMED INVENTOR Daniel B. Bruno 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 ATTORNEY DOCKET NO. CONFIRMATION NO. 05380001US 8803 EXAMINER VYAS, ABHISHEK ART UNIT PAPER NUMBER 3691 NOTIFICATION DATE DELIVERY MODE 02/11/2019 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): patent@maierandmaier.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte DANIEL B. BRUNO Appeal2018-000828 1 Application 13/412,758 Technology Center 3600 Before MURRIEL E. CRAWFORD, MICHAEL W. KIM, and PHILIP J. HOFFMANN, Administrative Patent Judges. KIM, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE This is an appeal from the final rejection of claims 1, 3, 5-7, 9, 11, and 13-15. We have jurisdiction to review the case under 35 U.S.C. Â§Â§ 134 and 6(b). 1 The Appellant identifies the inventor, Daniel B. Bruno, as the real party in interest. Br. 2. Appeal2018-000828 Application 13/412,758 The invention relates generally to providing debt securities denominated in a virtual currency. Spec. ,r 1. Independent claim 1 is illustrative: 1. A web-based system for providing debt secuntles denominated in a virtual currency, the system comprising: one or more decentralized data stores configured to store a debt security instrument created by an issuer, wherein said debt security instrument is denominated in said virtual currency, wherein said debt security instrument comprises one or more identifiers configured to associate said debt security instrument to an investor; a business web application server operatively coupled to the one or more decentralized data stores; a first memory in the business web application server, the first memory containing computer-executable code that, when processed by one or more decentralized computing devices, performs steps comprising: receiving a request from said investor regarding said debt security instrument, wherein said request comprises request information associated with a potential transaction; matching said investor to said debt security instrument via one or more of said one or more identifiers; generating a transaction from said request information, wherein said transaction effects a change on said debt security instrument; recording said change to one or more of said one or more decentralized data stores; and transmitting to said investor a confirmation associated with said change; wherein the debt security instrument is configured to mature independent of any action taken by the issuer because the debt security instrument is pregnant with the virtual currency that is released following a maturity event. 2 Appeal2018-000828 Application 13/412,758 The Examiner rejected claims 1, 3, 5-7, 9, 11, and 13-15 under 35 U.S.C. Â§ 112, first paragraph, as failing to comply with the written description requirement. The Examiner rejected claims 1, 3, 5-7, 9, 11, and 13-15 under 35 U.S.C. Â§ 101 as directed to ineligible subject matter in the form of abstract ideas. We AFFIRM. ANALYSIS Reiection under 35 USC Â§ 112. First Paragraph The original version of claims 1 and 11 recited "wherein said debt security instrument is pregnant with said virtual currency." After the Examiner rejected the claims as indefinite because of this clause, the Appellant "acknowledge[d] the examiner's contention that the term 'pregnant' is vague and indefinite in context of the claim as a whole," and amended the clause out of the claims. Appellant's Amendment filed Jan. 2, 2014. Later, the Appellant amended claims 1 and 11 to include "wherein the debt security instrument is configured to mature independent of any action taken by the issuer." Amendment, filed Sept. 14, 2014. In response, the Examiner rejected the claim amendments as new matter under 35 U.S.C. Â§ 112, first paragraph. Non-Final Act. 7 (mailed Oct. 1, 2015). The Appellant responded by further amending the claim language to additionally include "because the debt security instrument is pregnant with the virtual currency that is released following a maturity event" after the "wherein" clause, which led to the currently pending rejection. See Final Act. 19. 3 Appeal2018-000828 Application 13/412,758 We are not persuaded by the Appellant's arguments that the Examiner "failed to present any evidence or reasoning to rebut the presumption of adequate written description," and that support for the amended limitation is provided in paragraphs 9, 14, 16, 21, and 3 8 of the Specification. Br. 11. The Appellant further indicates support for the limitation is provided at paragraph 35. Id. at 3--4. The first problem with the Appellant's argument, which cites the MANUAL OF PATENT EXAMINING PROCEDURE ("MPEP") Â§ 2163(II)(A) (9th ed. 2018) (see Br. 11 ), is that the presumption upon which the argument is based is directed to the enablement portion of the written description requirement inÂ§ 112, first paragraph, and applies to original claims. See MPEP 2163(II)(A), Ninth Ed., Rev. 07.2015, November 2015, pp. 2100- 236, 238, 251. But, as here, new or amended claims that introduce elements or limitations that are not supported by the as-filed disclosure violate the written description requirement. See, e.g., In re Lukach, 442 F.2d 967 (CCPA 1971). The purpose of the written description requirement is to prevent an applicant from later asserting that he invented that which he did not; the applicant for a patent is therefore required "to recount his invention in such detail that his future claims can be determined to be encompassed within his original creation." Amgen Inc. v. Hoechst Marion Roussel Inc., 314 F.3d 1313, 1330 (Fed. Cir. 2003) (citing Vas Cath Inc. v. Mahurkar, 935 F.2d 1555, 1561 (Fed. Cir. 1991) ). While there is no in haec verba requirement, newly added claim limitations must be supported in the specification through express, implicit, or inherent disclosure. The fundamental factual inquiry is whether the specification conveys, with reasonable clarity to those skilled in the art, that 4 Appeal2018-000828 Application 13/412,758 as of the filing date sought applicant was in possession of the invention as now claimed. See, e.g., Vas-Cath, Inc., 935 F.2d at 1563-64. When an explicit limitation in a claim is not present in the written description, it must be shown that a person of ordinary skill would have understood that the description requires that limitation. Hyatt v. Boone, 146 F.3d 1348, 1353, (Fed. Cir. 1998). If the originally-filed disclosure does not provide support for each claim limitation, a new or amended claim must be rejected under 35 U.S.C. Â§ 112, first paragraph, as lacking adequate written description. Turning to the portions of the Specification identified by the Appellant for the disputed limitation, we discern that paragraphs 9 and 16 are summary paragraphs that restate, in prose, original independent system and method claims, including the language "wherein said debt security instrument is pregnant with said virtual currency," but without any language about maturity. Paragraphs 14 and 21 state "the transaction comprises a maturity event," but provide no additional information. Paragraph 35 describes access points and decentralized system setup, but fails to describe any maturity details. Paragraph 3 8, reproduced in its entirely below, also does not address maturity of debt security instruments: Another advantage the present system with respect to the prov1s10n of debt instruments, options and other securities/commodity trading instruments denominated in a virtual currency is that the system is configured to allow for these debt instruments, options and other securities/commodity trading instruments to be pregnant with the virtual currency. In this manner, virtual currency denominated debt instruments, options and other securities/commodity trading instruments cannot default. This simply is not possible with fiat currencies or other instruments based on gold or other physical assets. 5 Appeal2018-000828 Application 13/412,758 Spec. ,r 38. The Specification does not provide further information about the meaning of "pregnant," and does not address actions at maturity. The Appellant has thus not shown error in the Examiner's rejection, because none of the cited sections of the original Disclosure establish that the Appellant had possession of the following limitation as a whole: "wherein the debt security instrument is configured to mature independent of any action taken by the issuer because the debt security instrument is pregnant with the virtual currency that is released following a maturity event." It is left unexplained why a pregnant contract is the reason the contract matures without action of an issuer, especially since it appears an investor creates the pregnant contract. Therefore, we sustain the rejection of all claims under 35 U.S.C. Â§ 112, first paragraph, as failing to meet the written description requirement for the amended claim language. Rei ection under 3 5 US. C. Â§ 101 An invention is patent-eligible if it claims a "new and useful process, machine, manufacture, or composition of matter." 35 U.S.C. Â§ 101. However, the Supreme Court has long interpreted 35 U.S.C. Â§ 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 Supreme Court's two-step 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 6 Appeal2018-000828 Application 13/412,758 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. Kappas, 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, 69 (1972)). Concepts determined to be patent eligible include physical and chemical processes, such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 192 ( 1981) ); "tanning, dyeing, making waterproof cloth, vulcanizing India rubber, smelting ores" (id. at 184 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 Supreme 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 176; see also id. at 192 ("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 Supreme 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 7 Appeal2018-000828 Application 13/412,758 environment." Id. ( 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 tum 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 ( citation 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. (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. The Examiner finds the claims "are directed to the abstract idea of providing debt security instruments denominated in a virtual currency," and recites steps for "providing and managing debt security instruments (financial instruments and financial contracts or agreements)." Final Act. 13-14. We agree. 2 For example, independent claim 1 recites "receiving a request from said investor regarding said debt security instrument," "matching said investor to said debt security instrument," and "wherein said transaction effects a change on said debt security instrument," 2 In doing so, we address the claim limitation that we find does not have written description support. The Specification does not describe how a debt instrument may be "pregnant with the virtual currency," so we construe this broadly to be a standard contract for debt that describes the currency it is valued in. See, e.g., Spec. ,r 38. 8 Appeal2018-000828 Application 13/412,758 which we agree are a part of "providing and managing debt security instruments." We also find that "providing and managing debt security instruments" is a fundamental economic practice. We are not persuaded by the Appellant's argument that the present invention provides a clear technical improvement in the creation of bonds, through the utilization of virtual currency, with "the software-based bond that is pregnant with the virtual currency to be released following a maturity event." Br. 5. The claims recite a "debt security instrument is denominated in said virtual currency." This means the instrument is created with reference to a "virtual currency." A "virtual currency" is described as an "electronic" currency. Spec. ,r 36. A "currency" is not defined, and only a "fiat currency" and a "virtual currency" are mentioned. See id. at 2, 38. The ordinary and customary meaning of "currency" is "any form of money that is in circulation as a medium of exchange in a country." RANDOM HOUSE KERNERMAN WEBSTER'S COLLEGE DICTIONARY, 2010. Money itself, as a medium of exchange, is an abstract relationship of value to something, usually physical, that represents the value. An electronic, or virtual, currency, then, may be merely a record of data. Although the Appellant refers to a blockchain-based exemplary current called a SWIFTCOIN, and a related, though undescribed contract called a "Solidus Bond," the claims are not limited to a blockchain-based, or any software-implemented technology. See Spec. ,r 36. Instead, the claim is broad enough to encompass a distributed electronic record of value, much like an account that is spread out in more than one physical location. This can include copies, such that the claim's distributed servers may just store a 9 Appeal2018-000828 Application 13/412,758 copy of information that is a debt instrument in an abstract currency that exists only in account form, rather than having a physical representation. As such, merely storing copies of an account on multiple computers is not an improvement to technology, because it is commonly done for disaster recovery purposes. Furthermore, inasmuch as the Appellant attaches technological significance to the forms of currency and financial instruments created, merely naming a currency is a standard feature of any financial instrument, and is thus not a technological invention. Debt instruments essentially are contracts, and as such are themselves intangible. An instrument denominated in an abstract currency is therefore also intangible. The Appellant's arguments of various benefits of anonymous creation, security through a unique identifier, reduced recordkeeping, the impossibility of counterfeiting, and so on, are not persuasive because the claims are not limited to any implementation that may possess these alleged benefits. Br. 6-9. Indeed, we agree with the Appellant's assertion, in essence, that the claimed debt instrument is merely printed matter: "the created debt security instrument is, in fact, data. The data that comprises the financial instrument can therefore be transferred via an external device that stores and receives the financial instrument and can transport it over distance and time as desired by a user or investor." Id. at 9. Data is intangible, and does not transform the claimed abstract idea into eligible subject matter. Furthermore, the Examiner responds, and we agree, with the following: At best, the claims describe the automation and application of routine, conventional technology to a fundamental economic concept of issuing financial contracts to mitigate risk through the 10 Appeal2018-000828 Application 13/412,758 use of generic-computer functions. The ability to automate or otherwise make more efficient traditional methods is not sufficient to render a claim patent eligible. Relying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible. See Alice, 134 S. Ct. at 23 59 ("use of a computer to create electronic records, track multiple transactions, and issue simultaneous instructions" is not an inventive concept); Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012) ( a computer "employed only for its most basic function ... does not impose meaningful limits on the scope of those claims"). Ans. 6; see also Spec. ,r,r 55-67 (indicating that the system can be implemented using conventional computer components). The Appellant has not shown error in the rejection of claims as directed to abstract ideas. Therefore, we sustain the rejection of claims 1, 3, 5-7, 9, 11, and 13-15 under 35 U.S.C. Â§ 101. DECISION We AFFIRM the rejection of claims 1, 3, 5-7, 9, 11, and 13-15 under 35 U.S.C. Â§ 112, first paragraph. We AFFIRM the rejection of claims 1, 3, 5-7, 9, 11, and 13-15 under 35 U.S.C. Â§ 101. No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. Â§ 1.136(a)(l )(iv). AFFIRMED 11