Ex Parte Herschler et al

Patent Trials and Appeals Board

Apr 23, 2019

11671598 - (D) (P.T.A.B. Apr. 23, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/671,598 02/06/2007
5073 7590
BAKER BOTTS L.L.P.
2001 ROSS A VENUE
SUITE 900
DALLAS, TX 75201-2980
04/25/2019
FIRST NAMED INVENTOR
Jacob M. Herschler
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.
002328.0719 9283
EXAMINER
AKINTOLA, OLABODE
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
04/25/2019 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):
ptomaill@bakerbotts.com
ptomail2@bakerbotts.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JACOB M. HERSCHLER, DANIEL 0. KANE, N. DAVID
KUPERSTOCK, ROBERT FRANCIS O'DONNELL, STEVEN LEE
PUTTERMAN, DAIN ERIC RUNESTAD, ROBERT J. SCHWARTZ,
NICHOLAS BERARDIS JR., JOHN L. GRUCZA, MICHAEL ALBERT
GUIDO, and J. SCOTT DUNN
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Application 11/671,598
Technology Center 3600
Before ELENI MANTIS MERCADER, CARL L. SILVERMAN, and
JOHN D. HAMANN, Administrative Patent Judges.
SILVERMAN, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 100-102, 105-107, and 111-118, which constitute
all pending claims. We have jurisdiction under 35 U.S.C. § 6(b).
We affirm.
STATEMENT OF THE CASE
The invention relates to financial instruments, and particularly to
managing assets including transferring assets from one investment to
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alternate investments based on triggering events. Abstract; Spec. 1,
Technical Field of the Invention, Figs. 6-9. Claim 100, reproduced below,
is exemplary of the subject matter on appeal ( emphasis added):
Claim 100.
A non-transitory computer-readable medium comprising
software stored thereon, the software operable, when executed by one
or more processors, to:
update a balance of an account comprising a plurality of
assets allocated to one or more investments selected by a
guarantee recipient, the update based on market performance of
the one or more investments selected by the guarantee recipient,
wherein the account is subject to a first guarantee of a protected
value, a second guarantee entitling a beneficiary to receive a
transfer of an amount of money, and an agreement to allow at
least a portion of the account balance to be transferred in
response to a triggering event; and
using a minimum positive growth rate stored in one or
more memory devices, calculate a protected value such that the
calculated protected value is at least equal to an initial deposit
into the account growing at the stored minimum positive
growth rate, wherein:
the minimum positive growth rate is a fixed rate
between four percent and six percent;
the minimum positive growth rate is based on a
consumer price index; and
the calculated protected value represents a
guaranteed positive rate of return regardless of market
performance of the one or more investments;
detect an event trigger corresponding to one or more
events selected from the group consisting of:
a decrease in the balance of the account below a
specified threshold;
a decrease in the balance of the account at a rate
greater than a specified threshold rate;
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a change in one or more credit ratings of one or
more entities associated with one or more variable
investments; and
a change in a calculated risk associated with the
account;
in response to the detected event trigger, transfer at least a
portion of the plurality of assets of the account from at least one of the
one or more investments selected by the guarantee recipient to at least
one alternative investment selected by a guarantor of the first and
second guarantees, such that after the transfer the account comprises
the portion of the plurality of assets transferred to the at least one
alternative investment, the at least one alternative investment is
negatively correlated with the at least one of the one or more
investments selected by the guarantee recipient; and
calculate on a daily basis a periodic value as the greater of the
account balance and the periodic value from a preceding period
increased according to the minimum positive growth rate, wherein the
calculated protected value is at least equal to a maximum of the
calculated periodic values.
App. Br. 32-33. Claims Appendix.
THE REJECTI0N 1
Claims 100-102, 105-107, and 111-118 are rejected under 35 U.S.C.
§ 101 because the claimed invention is directed to patent-ineligible subject
matter. Final Act. 2--4.
PRINCIPLES OF LAW
Patent-eligible subject matter is defined in 35 U.S.C. § 101 of the
Patent Act, which recites:
1 The Examiner states that "[t]he 35 U.S.C § 103 rejection of claims 100-
102, 105-107 and 111-118 has been withdrawn." Final Act. 4.
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Whoever invents or discovers any new and useful
process, machine, manufacture, or composition of matter, or
any new and useful improvement thereof, may obtain a patent
therefor, subject to the conditions and requirements of this title.
There are, however, three judicially created exceptions to the broad
categories of patent-eligible subject matter in 35 U.S.C. § 101: "[l]aws of
nature, natural phenomena, and abstract ideas." Alice Corp. Pty. Ltd. v. CLS
Bankint'l, 573 U.S. 208,216 (2014); Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 566 U.S. 66, 70 (2012).
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. See 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 id. 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 (Gottschalkv. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 191
(1981 )); "tanning, dyeing, making water-proof cloth, vulcanizing India
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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 191-192
("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
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 ( 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. ( quoting Mayo, 566 U.S. at 77).
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"[M]erely requir[ing] generic computer implementation[] fail[ s] to transform
that abstract idea into a patent-eligible invention." Id.
The PTO recently published revised guidance on the application of
§ 101. USPTO's January 7, 2019 Memorandum, 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 ("Memorandum").
Under that guidance, we first determine whether the claim recites:
( 1) any judicial exceptions, including certain groupings of abstract
ideas (i.e., mathematical concepts, certain methods of organizing
human activity such as a fundamental economic practice, or mental
processes); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a}-(c), (e}-(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then look 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.
See Memorandum.
ANALYSIS
The Examiner rejected claims 100-102, 105-107, and 111-118 under
35 U.S.C. § 101 because the claimed invention is directed to a judicial
exception (i.e., an abstract idea) without "significantly more." Final Act. 2.
According to the Examiner, regarding independent claim 100:
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The claim recites a various steps for providing a financial
instrument with an asset transfer feature. In other words, the
claim describes a process for managing assets allocated to one or
more investment that is transferable to alternative investment
based on triggers. It is a mental process that could be performed
in the human mind, or by a human using a pen and paper. Such
basic concept is similar to other mental processes found abstract
by the courts such as comparing new and stored information and
using rules to identify options in SmartGene, and obtaining and
comparing intangible data in Cybersource. The claim also recites
a various calculations using mathematical techniques and
outputting the results. In other words, the claimed method simply
describes the concept of gathering and combining data by
reciting steps of organizing information through mathematical
relationships. Thus, the claim is directed to a mathematical
formula, which is like a law of nature that falls within the
exceptions to patent-eligible subject matter.
Id. at 2-3.
Regarding whether the claim amounts to significantly more than the
abstract idea, the Examiner determines that the only additional limitation in
the claim is the processor configured to execute preventative maintenance
logic and, thus, the recited generic processor component performs no more
than its basic processor functions. Id. at 3. According to the Examiner, this
additional element is a well understood, routine and conventional limitation
that amounts to mere instructions to implement the abstract idea on a
computer, and, taking the computer limitations as an ordered combination
adds nothing that is not already present when the elements are taken
individually. Therefore, the Examiner determines the claim does not amount
to significantly more than the recited abstract idea. Id.
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Appellants argue the Examiner applies too high a level of abstraction
and errs in concluding the claims are directed to the abstract idea of
"providing a financial instrument with an asset transfer feature" and, even if
the asserted abstract idea were correct, the Examiner does not show
correspondence to court cases. App. Br. 9 ( citing Final Act. 2; Enfzsh, LLC
v. Microsoft Corp., No. 2:12-cv-07360, slip op. at 14 (Fed. Cir. May 12,
2016). Appellants argue the "claims recite a specific, unconventional
implementation of transforming a portion of assets from an investment to an
alternate investment." Id. at 9-10, ( emphasis omitted). Appellants argue the
claims recite a transformation of a portion of assets from an investment to an
alternative investment, which is not a preemption, and which constitutes a
patent eligible transformation under Bilski. Id. at 11 ( citing Bilski v.
Kappas, 561 U.S. 593 (2010)). Appellants argue the claims recite an
inventive concept of transferring a portion of assets from an investment to an
alternative investment and refer to advantages "over the known methods of
generating an annuity from an existing pension." Id. at 11 (citing Spec.
4:32-5:15).
In the Answer, the Examiner determines "[t]he entire concept as
described in the claim is simply a mechanism for managing assets allocated
to one or more investment that is transferable to alternative investments
based on triggers" and "[i]t is a mental process that could be performed in
the human mind, or by human using a pen and paper." Ans. 2. The
Examiner determines that this "managing of assets ... " is similar to the
abstract idea of managing risk (hedging) during consumer transactions in
Bilski, or mitigating settlement risk in financial transactions in Alice, and
collecting information, analyzing it, and displaying certain results of the
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collection and analysis in Electric Power Group. Id. ( citing Electric Power
Group, LLC, v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016). The Examiner
determines the various calculations or mathematical algorithms are like laws
of nature that fall within the exceptions to patent-eligibility subject matter
similar to mathematical formula for hedging in Bilski, and managing a
stable value protected life insurance policy by performing calculations and
manipulating the results in Bancorp. Id. at 2-3 ( citing Bancorp Servs,
L.L.C. v. Sun Life Assur. Co. of Can., 771 F.Supp.2d 1054, 1065 (E.D. Mo.
2011) aff'd, 687 F.3d 1266 (Fed. Cir. 2012)).
Regarding whether additional limitations amount to significantly more
than the abstract idea, the Examiner reiterates the Final Action determination
that the only additional limitation is the processor, and this is insufficient to
amount to significantly more than the abstract idea. Id. at 3; see Final Act.
3, supra). The Examiner states "[t]ransformation of data and/or concrete
and tangible system as alleged by Appellant are not factors in subject matter
eligibility" because "[u]sing a generic processor to perform such functions
inherently requires some form of transformation of data" and "such
transformation is not considered 'significantly more' because it is routine
and conventional that amounts to mere instructions to implement the abstract
idea on a computer." Id. at 5.
In the Reply Brief, Appellants argue the claims recite a transformation
of data and are patent-eligible under the machine-or-transformation test.
Reply Br. 2-3 ( citing Institution Decision of Covered Business Method
Patent Review, PNC Bank et al. v. Secure Axcess, LLC, CBM2014-00100
(Sep. 9, 2014); the PTAB has stated "[w]e understand that the machine-or-
transformation test is a useful tool ... for whether an invention is a patent-
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eligible process under§ 101." PNC Bank, at 23--4)). According to
Appellants,
[l]ike the challenged claims in PNC Bank, the pending claims
recite a transformation of one thing (e.g., an account comprising
assets from at least one of the one or more investments) to create
something else ( e.g., an account comprising assets from the at
least one alternative investment) and further recites a particular
manner of transforming.
Id. at 3. According to Appellants, the claims improve the functioning of a
computer because they "perform particular automatic actions, the automatic
performance of which is associated with a reduction in the use of computer
resources." Id. at 3--4 (citing Enfzsh, LLC v. Microsoft Corp., 822 F.3d
1327, 1337 (Fed. Cir. 2016); McRO, Inc. v. Bandai Namco Games Am. Inc.,
837 F.3d 1299 (Fed. Cir. 2016)). Appellants argue the claims are directed to
a specific and unconventional method and system of transforming assets and
are thus patent eligible and, like in Enfzsh, the claims here are not directed to
any form of managing assets. Id. at 4. According to Appellants, the claims
recite a specific process of managing assets that involves a physical
transformation, the physical transformation being prompted by the detection
of one or more particular events (e.g., a decrease in the balance of the
account below a specified threshold, a decrease in the balance of the account
at a rate greater than a specified threshold rate, a change in one or more
credit ratings of one or more entities associated with one or more variable
investments, and a chance in a calculated risk associated with the account).
Id. Appellants argue, by generalizing and abstracting the claims, the
Examiner has ensured that exceptions to § 101 swallow the rule. Id. ( citing
Enfish, at 1337).
As discussed below, we are not persuaded by Appellants' arguments.
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Applying the current Guidelines (Memorandum), we agree with the
Examiner that claim 1 recites abstract ideas constituting "mental processes"
and "certain methods of organizing human activity such as a fundamental
economic practice." See Final Act 2--4; Ans. 2-5; 84 Fed. Reg. 50 at I(a),
III.
We refer to the claim 100 limitations that recite software operable,
when executed by one or more processors, to ( 1) update a balance of an
account comprising a plurality of assets allocated to one or more
investments selected by a guarantee recipient; (2) using a minimum positive
growth rate stored in one or more memory devices, calculate a protected
value such that the calculated protected value is at least equal to an initial
deposit into the account growing at the stored minimum positive growth
rate; (3) detect an event trigger corresponding to one or more events; (4) in
response to the detected event trigger, transfer at least a portion of the
plurality of assets of the account; and (5) calculate on a daily basis a
periodic value. As discussed below, these limitations can be performed with
pen and paper and, therefore, constitute "mental processes."
The remainders of limitation ( 1 }-( 5) can also be performed with pen
and pencil: the remainder of limitation ( 1) the update based on market
performance of the one or more investments selected by the guarantee
recipient, wherein the account is subject to a first guarantee of a protected
value, a second guarantee entitling a beneficiary to receive a transfer of an
amount of money, and an agreement to allow at least a portion of the
account balance to be transferred in response to a triggering event can be
performed with pen and paper; the remainder of limitation (2) wherein the
minimum positive growth rate is a fixed rate between four percent and six
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percent; the minimum positive growth rate is based on a consumer price
index; and the calculated protected value represents a guaranteed positive
rate of return regardless of market performance of the one or more
investments can be performed with pen and paper; the remainder of
limitation (3) selected from the group consisting of a decrease in the
balance of the account below a specified threshold; a decrease in the
balance of the account at a rate greater than a specified threshold rate; a
change in one or more credit ratings of one or more entities associated with
one or more variable investments; and a change in a calculated risk
associated with the account; the remainder of limitation ( 4) from at least one
of the one or more investments selected by the guarantee recipient to at least
one alternative investment selected by a guarantor of the first and second
guarantees, such that after the transfer the account comprises the portion of
the plurality of assets transferred to the at least one alternative investment,
the at least one alternative investment is negatively correlated with the at
least one of the one or more investments selected by the guarantee recipient;
and the remainder of limitation ( 5) as the greater of the account balance and
the periodic value from a preceding period increased according to the
minimum positive growth rate, wherein the calculated protected value is at
least equal to a maximum of the calculated periodic values.
Limitations ( 1 }-( 5) of claim 100 are nothing more than "mental
processes" that could be performed in the human mind or by a human using
a pen and paper-a subject matter that falls within the three types of abstract
ideas identified by the Memorandum. See CyberSource Corp. v. Retail
Decisions, Inc., 654 F.3d 1366, 1372-73 (Fed. Cir. 2011) ("[A] method that
can be performed by human thought alone is merely an abstract idea and is
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not patent-eligible under§ 101."); see also In re Comiskey, 554 F.3d 967,
979 (Fed. Cir. 2009) ("[M]ental processes----or processes of human
thinking-standing alone are not patentable even if they have practical
application."); Gottschalkv. Benson, 409 U.S. 63, 67 (1972) ("Phenomena
of nature, ... mental processes, and abstract intellectual concepts are not
patentable, as they are the basic tools of scientific and technological work."
(Emphasis added)). Additionally, mental processes remain unpatentable
even when automated to reduce the burden on the user of what once could
have been done with pen and paper. 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 Gottschalk v.
Benson.").
For example, limitations ( 1) through ( 5) of claim 100 can be
performed by a financial analyst through observation, evaluation, and
judgment. Additionally, we note the Specification states "[ w ]hile in certain
embodiments financial instrument 100 is entered into without using a
computer, other embodiments may have a computerized option for entering
into an agreement." Spec. 46:25-28.
In addition to the mental processes discussed, supra, the claim
limitations, under their broadest reasonable interpretation, recite
transforming a portion of assets from an investment to an alternative
investment in response to detecting an event trigger. As discussed below,
this constitutes a method of organizing human activity, such as a
fundamental economic practice, which also constitutes an abstract idea.
Additionally, we note the Specification states "[t]his invention relates
generally to financial instruments and more particularly to a financial
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instrument with an asset transfer feature." Spec. 1, Technical Field of the
Invention; 2:1-3:7.
As in our discussion, supra, regarding the abstract idea of mental
processes, limitations (1) update a balance of an account comprising a
plurality of assets allocated to one or more investments selected by a
guarantee recipient; (2) using a minimum positive growth rate stored in one
or more memory devices, calculate a protected value such that the
calculated protected value is at least equal to an initial deposit into the
account growing at the stored minimum positive growth rate; (3) detect an
event trigger corresponding to one or more events; (4) in response to the
detected event trigger, transfer at least a portion of the plurality of assets of
the account; and ( 5) calculate on a daily basis a periodic value also recite
steps in managing financial instruments. More particularly, the claim is
directed to managing financial instruments with an asset transfer feature.
The remainder of limitations ( 1 }-( 5) provide additional detail on the
managing and asset transfer features.
Managing financial instruments involves organizing human activity and
is an economic act that includes products ordinarily sold in the stream of
commerce. 2 The transfer ( or "transformation" as asserted by Appellants) of
assets between investments is an economic practice. Thus, like the concept
of intermediated settlement in Alice, and the concept of hedging in Bilski,
the concept of managing financial instruments recited in Appellants' claims
2 The Specification describes, "[f]or example, investment 132 may represent
a municipal bond, a bond 10 fund, a money market account, a corporate
security, an index fund, a mutual fund, a real estate investment trust, hedges,
swaps, derivatives, or any other appropriate type of investment." Spec.
10:8-15.
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"is a fundamental economic practice long prevalent in our system of
commerce." Alice, 573 U.S. at 219 ( citations and internal quotation marks
omitted). Accordingly, we conclude the claims recite a fundamental
economic practice, which is one of certain methods of organizing human
activity, and thus an abstract idea.
Next, we consider whether the claim includes additional elements that
integrate the judicial exception into a practical application. To determine
whether the judicial exception is integrated into a practical application, we
identify whether there are "any additional elements recited in the claim
beyond the judicial exception(s)" and evaluate those elements to determine
whether they integrate the judicial exception into a recognized practical
application. 84 Fed. Reg. at 54--55 (emphasis added); see also Manual of
Patent Examining Procedure (MPEP) § 2106.05(a}-(c), (e}-(h) (9th ed. Rev.
08.2017, Jan. 2018).
Here, we find the additional limitations do not integrate the judicial
exception into a practical application. More particularly, the claims do not
recite: (i) an improvement to the functionality of a computer or other
technology or technical field (see MPEP § 2106.05(a)); (ii) use a "particular
machine" to apply or use the judicial exception (see MPEP § 2106.05(b ));
(iii) a particular transformation of an article to a different thing or state (see
MPEP § 2106.05(c)); or (iv) any other meaningful limitation (see MPEP
§ 2106.05(e)). See also 84 Fed. Reg. at 55.
Here, although the claim includes additional elements, one or more
processors and one or more memory devices, these are insufficient to
constitute integration into a practical application because these elements are
recited at high level of generality and the claim simply applies the judicial
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exception using "processors" and "memory devices." In particular, the
additional elements do not constitute a particular machine, but, even
assuming the "processors" and "memory devices" represent a generically
recited computer (i.e., generic computer components) to perform the abstract
idea, that is insufficient. See 84 Fed. Reg. 50 at III A(2); MPEP
§ 2106.05(b ); Eibel Process Co. v. Minnesota & Ontario Paper Co., 261
U.S. 45, 64---65 (1923); MPEP § 2106.05([); Alice, 573 U.S. at 222-26;
Benson, 409 U.S. 63; Credit Acceptance Corp. v. Westlake Services, 859
F.3d 1044 (Fed. Cir. 2017).
Appellants' arguments regarding improved functioning of a computer
are not persuasive as the arguments are conclusory and not commensurate
with the scope of the claim. Mere attorney arguments and conclusory
statements that are unsupported by factual evidence are entitled to little
probative value. See In re Geisler, 116 F.3d 1465, 1470 (Fed. Cir. 1997); In
re De Blauwe, 736 F.2d 699, 705 (Fed. Cir. 1984); Ex parte Belinne, Appeal
2009-004693, 2009 WL 2477843, at *3--4 (BPAI Aug. 10, 2009)
(informative).
Unlike the claims of Enfish, claim 100 is not "directed to an
innovative logical model for a computer database [that] includes all data
entities in a single table, with column definitions provided by rows in that
same table" or similar improvements. Enfish, 822 F.3d at 1330.
Appellants' arguments that the claim 100 physical transformation of
data establishes patent eligibility are not persuasive. Although we agree
with Appellants to the extent that the machine-or-transformation test is a
useful tool ("clue") in determining patent eligibility, here, it does not
establish patent eligibility. Bilski, 561 U.S. at 611. In particular, the claims
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recite the abstract ideas of "mental processes" and "fundamental economic
practice" and, even if there is a transformation, it is inadequate to overcome
the current record that there is no integration into a practical application.
Additionally, the "transformation" asserted here is merely the intangible
monetary content of funds being transformed into a different fund.
Therefore, under the Memorandum, claim 100 is directed to an
abstract idea, and we proceed to analyze the claim under Alice, step 2. As
discussed above, in the Alice, step 2 inquiry, we determine whether there is
an inventive concept that renders the abstract idea patent eligible.
We note the introduction of a processor into the claims to implement
an abstract idea is not a patentable application of the abstract idea. Alice, at
222-23. The computer implementation here, assuming the claimed
"processors and memory devices" constitute computers, is purely
conventional and performs basic functions. See id. at 224--225. Appellants
do not adequately show how the claimed steps are done technically such that
they cannot be done manually or that they are not routine and conventional
functions of a generic computer. See Versata Dev. Grp., Inc. v. SAP Am.,
Inc., 793 F.3d 1306, 1334 (Fed. Cir. 2015) ("the limitations of claim 17
involve arranging a hierarchy of organizational and product groups, storing
pricing information, retrieving applicable pricing information, sorting
pricing information, eliminating less restrictive pricing information, and
determining the price. All of these limitations are well-understood, routine,
conventional activities previously known to the industry."). Moreover, the
Specification does not support the view that the computer related claim
elements are unconventional. See Spec. 50:7-52:2.
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We are not persuaded by Appellants' arguments that the claims "recite
an unconventional method and system of transforming a portion of assets
from an investment to an alternative investment in response to detecting an
event trigger" and an inventive concept significantly more than an abstract
idea. See App. Br. 11 (citing Spec. 4:32-5:15). These arguments are
conclusory and not commensurate with the claim scope. In particular,
Appellants argue the purported advantages of the claims but do not identify
claim limitations that support their arguments. Id.
We find no element or combination of elements recited in Appellants'
claim 100 that contains any "inventive concept" or adds anything
"significantly more" to transform the abstract concept into a patent-eligible
application. Alice, 573 U.S. at 221. As discussed supra, we are not
persuaded the added computer elements transform the abstract idea into a
patent eligible invention. As our reviewing court has observed, "after Alice,
there can remain no doubt: recitation of generic computer limitations does
not make an otherwise ineligible claim patent-eligible." DDR Holdings,
LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (citing Alice,
573 U.S. at 223).
We note the patent eligibility inquiry may contain underlying issues of
fact. Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314,
1325 (Fed. Cir. 2016). In particular, "[t]he question of whether a claim
element or combination of elements is well-understood, routine and
conventional to a skilled artisan in the relevant field is a question of fact."
Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018). Here, the
processors and memory devices' elements are set forth at a high level of
generality, as discussed supra, and the record sufficiently establishes that
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Appeal2018-001035
Application 11/671,598
these elements and the combination are well-understood, routine and
conventional to a skilled artisan in the relevant field.
Regarding preemption, although preemption may denote patent
ineligibility, its absence does not demonstrate patent eligibility. See
FairWarning, IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1098 (Fed. Cir.
2016). For claims covering a patent-ineligible concept, preemption concerns
"are fully addressed and made moot" by an analysis under the Mayo/Alice
framework. Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1379 (Fed. Cir. 2015).
Unlike the claims of McRO, claim 100 is not directed to "a specific
asserted improvement in computer animation" or similar improvements.
McRO, 837 F.3d at 1314--15. Nor is claim 100 directed to using "a
combined order of specific rules that renders information into a specific
format that is then used and applied to create desired results: a sequence of
synchronized, animated characters" or similar functions. Id. Instead, as
discussed, supra, claim 100 focuses on abstract ideas that merely use
processors and memory devices as tools to manipulate information.
In view of the above, we sustain the rejection of claim 100, and
independent claims 113 and 116 as these claims recite similar limitations to
claim 100 and are not argued separately. 3
Regarding dependent claims 101, 102, 105-107, 111, 112, 114, 115,
117, and 118, the Examiner's finding are adequate and reasonable, and are
not specifically argued by Appellants. See Final Act. 3--4. Therefore, we
sustain the rejection of claims 101, 102, 105-107, 111, 112, 114, 115, 117,
and 118.
3 Appellants state "[t]aking Claim 100 as an example, ... " App. Br. 9.
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Appeal2018-001035
Application 11/671,598
DECISION
We affirm the Examiner's decision rejecting claims 100-102, 105-
107, and 111-118 under 35 U.S.C. § 101.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l)(iv). See
37 C.F.R. § 41.50(±).
AFFIRMED
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