Ex Parte Koop et al

Patent Trials and Appeals Board

Mar 29, 2019

13835172 - (D) (P.T.A.B. Mar. 29, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/835, 172 03/15/2013
37462 7590 04/02/2019
LANDO & ANASTASI, LLP
ONE MAIN STREET, SUITE 1100
CAMBRIDGE, MA 02142
FIRST NAMED INVENTOR
Jonathan Koop
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.
E2047-700010 1059
EXAMINER
WEISBERGER, RICHARD C
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
04/02/2019 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):
docketing@LALaw.com
CKent@LALaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JONATHAN KOOP and SHAWN MULLIGAN 1
Appeal2018-003070
Application 13/835, 172
Technology Center 3600
Before CARLA M. KRIVAK, HUNG H. BUI, and JON M. JURGOV AN,
Administrative Patent Judges.
BUI, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from a final rejection of
claims 21, 25-29, 33-37, and 41--44. We have jurisdiction under 35 U.S.C.
§ 6(b ).
WeAFFIRM. 2
1 Appellants identify the real party in interest as the inventors, Jonathan
Koop and Shawn Mulligan (Br. 3).
2 Our Decision refers to Appellants' Appeal Brief filed August 2, 2017
("App. Br."); Examiner's Answer mailed November 14, 2017 ("Ans.");
Final Office Action mailed August 12, 2016 ("Final Act."); and original
Specification filed March 15, 2013 ("Spec.").
Appeal2018-003070
Application 13/835, 172
STATEMENT OF THE CASE
Appellants' invention is directed to "debt acquisition systems and,
more particularly, to systems and processes of monetizing high risk debt"
(Spec. 1 :20-21 ).
Claims 21, 29, and 3 7 are independent. Independent claim 21,
reproduced below, is exemplary of the subject matter on appeal.
21. A debt processing computer system comprising:
a memory storing information descriptive of a plurality of
account groups classifying high risk debt, the account groups
including bankrupt accounts, deceased accounts, debt settlement
accounts, unclaimed funds accounts, cease and desist accounts,
or incarcerated accounts;
a network interface;
at least one processor in data communication with the
memory and the network interface; and
at least one component executable by the at least one
processor and configured to:
receive at least one common attribute of high risk
debt associated with an account group for classifying
accounts into an account group;
receive a rate of compensation for purchasing
accounts within a specified account group and associate
the rate of compensation with the account group;
receive a desired rate of return for a specified
account group and associate the desired rate of return with
the account group;
receive estimated return rates for a specified
account group and criteria for adjusting the estimated
return rates based on account information;
receive account information for a plurality of
accounts owned by a plurality of distinct parties, the
account information including a plurality of identifiers
corresponding to the plurality of accounts;
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transmit, via the network interface, the account
information to an account identification system distinct
from the debt processing computer system;
receive, from the account identification system via
the network interface, identification information
associating at least one identifier of the plurality of
identifiers with at least one attribute of high risk debt;
classify at least one account of the plurality of
accounts as being a member of at least one account group
of the plurality of account groups at least in part by
matching at least one common attribute of the at least one
account group to at least one attribute associated with at
least one identifier of the at least one account;
estimate a return on the at least one account using
the estimated return rate for the account group and
adjusting the estimated return rates based on the at least
one attribute associated with at least one identifier of the
at least one account;
determine whether the estimated return is sufficient
to warrant purchasing the at least one account at least in
part by determining whether the estimated return exceeds
an amount of compensation calculated using the
compensation rate associated with the at least one account
group by an amount greater than the desired rate of return
associated with the applicable account group; and
generate one or more purchase documents with
language that effects at least one transfer of ownership of
the at least one account from at least one party of the
plurality of distinct parties to at least one purchaser.
App. Br. 19 (Claims App.).
EXAMINER'S REJECTION
The Examiner rejected claims 21, 25-29, 33-37, and 41--44 under
3 5 U.S. C. § 1 01 as directed to non-statutory subject matter.
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ANALYSIS
Claims 21, 29, and 37
To determine whether claims are patent eligible under § 101, we apply
the Supreme Court's two-step framework articulated in Alice Corp. v. CLS
Bankint'l, 573 U.S. 208 (2014). First, we determine whether the claims are
directed to a patent-ineligible concept: laws of nature, natural phenomena,
and abstract ideas. Id. at 216. If so, we then proceed to the second step to
consider the elements of the claims "individually and 'as an ordered
combination"' to determine whether there are additional elements that
"'transform the nature of the claim' into a patent-eligible application." Id. at
21 7. In other words, the second step is to "search for an 'inventive
concept'-i.e., 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."' Id. at 218 ( alteration in original).
The Federal Circuit has described the Alice step-one inquiry as
looking at the "focus" of the claims, their "character as a whole," and the
Alice step-two inquiry as looking more precisely at what the claim elements
add-whether they identify an "inventive concept" in the application of the
ineligible matter to which the claim is directed. See Elec. Power Grp., LLC
v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016); Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335-36 (Fed. Cir. 2016); Internet Patents
Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015).
Because there is no single definition of an "abstract idea" under Alice
step 1, the PTO has recently recognized, for purposes of clarity,
predictability, and consistency, key concepts identified by the courts as
abstract ideas to explain that the "abstract idea" exception includes the
following three groupings:
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( 1) Mathematical concepts-mathematical relationships, mathematical
formulas or equations, mathematical calculations;
(2) Certain methods of organizing human activity-fundamental
economic principles or practices (including hedging, insurance,
mitigating risk); commercial or legal interactions (including
agreements in the form of contracts; legal obligations; advertising,
marketing or sales activities or behaviors; business relations);
managing personal behavior or relationships or interactions between
people (including social activities, teaching, and following rules or
instructions); and
(3) Mental processes----concepts performed in the human mind
(including an observation, evaluation, judgment, opinion).
See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg.
50, 52 (Jan. 7, 2019 ("PTO§ 101 Memorandum")) which is effective on
January 7, 2019.
According to the PTO § 101 Memorandum, "[ c ]laims that do not
recite [subject] matter that falls within these enumerated groupings of
abstract ideas should not be treated as reciting abstract ideas," except in rare
circumstances. Even if the claims recite any one of these three groupings of
abstract ideas, these claims are still not "directed to" a judicial exception
(abstract idea), and thus are patent-eligible, if "the claim as a whole
integrates the recited judicial exception into a practical application of that
uudicial] exception." See PTO§ 101 Memorandum, 84 Fed. Reg. at 53.
"[I]ntegration into a practical application" requires an additional element or
a combination of additional elements in the claim to apply, rely on, or use
the judicial exception in a manner that imposes a meaningful limit on the
judicial exception, such that the claim is more than a drafting effort designed
to monopolize the exception. See PTO§ 101 Memorandum, 84 Fed. Reg. at
53-55.
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For example, limitations that are indicative of "integration into a
practical application" include:
1) Improvements to the functioning of a computer, or to any other
technology or technical field- see MPEP 2106.05(a);
2) Applying the judicial exception with, or by use of, a particular
machine - see MPEP 2106.05(b );
3) Effecting a transformation or reduction of a particular article to a
different state or thing- see MPEP 2106.05( c ); and
4) Applying or using the judicial exception in some other 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( e ).
In contrast, limitations that are not indicative of "integration into a
practical application" include:
1) Adding the words "apply it" ( or an equivalent) with the judicial
exception, or mere instructions to implement an abstract idea on a
computer, or merely using a computer as a tool to perform an
abstract idea-see MPEP 2106.05(±);
2) Adding insignificant extra-solution activity to the judicial exception
-see MPEP 2106.05(g); and
3) Generally linking the use of the judicial exception to a particular
technological environment or field of use - see MPEP 2106.05(h).
See PTO§ 101 Memorandum, 84 Fed. Reg. at 54--55 ("Prong Two").
Appellants argue independent claims 21, 29, and 37 as a group,
providing arguments for representative claim 21 (see Br. 9-10, 17). 3
Appellants present several arguments against the§ 101 rejection. The
Examiner has provided a comprehensive response to Appellants' arguments
(see Ans. 6-8). We do not find Appellants' arguments persuasive, as
discussed in greater detail below. We adopt the Examiner's findings and
3 The citations are to the Appeal Brief filed on August 2, 2017.
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conclusions and analyze the claims under the 2019 Revised§ 101 Guidance
and adopt the nomenclature for the steps used in the PTO § 101
Memorandum.
Examiner's Determination of Patent Ineligibility
In support of the § 101 rejection, the Examiner determines
Appellants' claim 21 is directed to "a method of monetizing high risk debt
using a [sic] debt processing," which is a fundamental economic practice
long prevalent in our system of commerce (Final Act. 2, 4 ). The Examiner
also determines the claimed steps for monetizing debt "can be performed
mentally," and are similar to other concepts identified as abstract by the
courts, such as using categories to organize, store, and transmit information
( Cyberfone) and comparing new and stored information and using rules to
identify options (SmartGene) (Final Act. 3--4). See Cyberfone Sys., LLC v.
CNN Interactive Grp., Inc., 558 F. App'x 988, 992 (Fed. Cir. 2014) (holding
that claims directed to "collecting information" and "separating and
transmitting that information according to its classification" are "not patent-
eligible"); SmartGene, Inc. v. Advanced Biological Labs., SA, 852 F.Supp.2d
42 (D.D.C. 2012), aff'd 555 F.App'x 950 (Fed. Cir. 2014) (holding that
claims directed to "comparing new and stored information and using rules to
identify medical options" are not patent-eligible).
The Examiner then determines the claim elements, when analyzed
individually or as an ordered combination, do not amount to significantly
more than the abstract idea (Final Act. 2, 4--5).
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Alice/May~tep 1 (Abstract Idea)
Step 2A~Prongs 1 and 2 identified in the Revised Guidance
Step 2A-Prong 1
Appellants argue the Examiner has overlooked technical details
recited in claim 21, such as "specific technical aspects of a distributed
computer system that allows for quick and efficient access of individual
account information as opposed to bundled account data" (Br. 10-11 ). As
such, Appellants argue claim 21 is not directed to an abstract idea, but is
rather directed to technological improvements to computers and networks,
similar to the claims in Enfzsh and McR04 (Br. 9, 11 ( citing Enfzsh, 822 F.3d
at 1327, 1336; andMcRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d
1299 (Fed. Cir. 2016).
Appellants' arguments are not persuasive. At the outset, we note
Appellants' reliance on McRO is misplaced. For example, McRO 's '576
patent (U.S. Patent No. 6,307,576) describes computer software for
matching audio to a 3D animated mouth movement to provide lip-synched
animation. McRO 's claims contain (i) specific limitations regarding a set of
rules that "define[] a morph weight set stream as a function of phoneme
sequence and times associated with said phoneme sequence" to enable
computers to produce "accurate and realistic lip synchronization and facial
expressions in animated characters" (McRO, 837 F.3d at 1313) and, when
viewed as a whole, are directed to (ii) a "technological improvement over
4 In addition to Enfzsh and McRO, Appellant also presents several patent-
eligibility arguments based on Amdocs (Israel) Ltd. v. Openet Telecom, Inc.,
841 F.3d 1288 (Fed. Cir. 2016). App. Br. 13. However, the Federal
Circuit's decision in Amdocs is applicable to the analysis under Prong Two
of the PTO § 101 Memorandum and Alice step 2 under the Federal Circuit
precedent, rather than Alice step 1, and, as such, will be addressed separately
in that context. See MPEP § 2106.05(a).
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the existing, manual 3-D animation techniques" that uses "limited rules in a
process specifically designed to achieve an improved technological result in
conventional industry practice." Id. at 1316.
In contrast to Enfzsh and McRO, Appellants' Specification and claims
do not describe technological improvements or specific improvement to the
way computers operate or to the way computers store and retrieve data in
memory. See Enfzsh, 822 F.3d at 1336, 1339. Rather, Appellants'
Specification and claims describe techniques that "locate, extract, evaluate,
and liquidate non-typical types of debt," such as high risk debt, and
"monetiz[e] [the] high risk debt" (see Spec. 1:20-21, 2:9-12).
For example, claim 21 recites the following limitations: (1) "storing
information descriptive of a plurality of account groups classifying high risk
debt, the account groups including bankrupt accounts, deceased accounts,
debt settlement accounts, unclaimed funds accounts, cease and desist
accounts, or incarcerated accounts"; (2) four steps of "receiving" financial
performance measures including a "common attribute of high risk debt
associated with an account group," "rate of compensation for purchasing
accounts" for that account group, "desired rate of return" for the account
group, and "estimated return rates" and "criteria for adjusting the estimated
return rates" for the account group; (3) two steps of "associating" the "rate
of compensation" and "desired rate of return" with the account group; (4)
steps of receiving and transmitting "account information for a plurality of
accounts"; (5) steps of "associating" an account's identifier "with at least
one attribute of high risk debt" and "classifying" the account as a member of
one account group "by matching" the account's identifier to the group; (6)
steps of "estimating a return" on the account using the group's estimated
return rate, "adjusting the estimated return rates" based on the account's
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identifier, and "determining whether the estimated return is sufficient to
warrant purchasing" the account "by determining whether the estimated
return exceeds an amount of compensation calculated using the
compensation rate associated with the at least one account group by an
amount greater than the desired rate of return associated with the applicable
account group"; and (7) a step of "generating one or more purchase
documents with language that effects at least one transfer of ownership" of
the account. These limitations recite identifying valuable distressed debt and
requesting purchases of such debt, which are operations that would
ordinarily take place during distressed debt trading.
For example, limitations (1 ), (2), and (3) in claim 21 characterize
distressed debt based on type (e.g., debt settlement accounts or bankrupt
accounts) and based on financial performance (e.g., "rate of return"), which
are activities ordinarily performed by a financial advisor managing
distressed debt investments. Similarly, limitations (4), (5), and (6) in claim
21 describe identifying a tradable financial instrument holding high risk
debt, and determining if the financial instrument is profitable-again,
activities ordinarily performed by a financial advisor exploring investment
opportunities for a client's portfolio. For example, the limitation of
"determining whether the estimated return is sufficient to warrant purchasing
[a high risk debt account]" is a basic financial activity of identifying
profitable financial instruments for acquisition. Thus, limitations ( 1 }-( 6) in
claim 21 recite identifying profitable debt investments to purchase based on
at least one comparison, which is a known business activity and a
fundamental economic practice of owning profitable financial instruments, a
basic premise of economics. Thus, similar to the concept of intermediated
settlement in Alice, and the concept of hedging in Bilski, the concept of
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monetizing high risk debt by identifying profitable debt investments as in
Appellants' claims "[is] a fundamental economic practice long prevalent in
our system of commerce." See Alice, 573 U.S. at 219; Bilski, 561 U.S. at
611-12 ("Claims 1 and 4 in petitioners' application explain the basic
concept of hedging, or protecting against risk.").
Thus, we conclude limitations ( 1 }-( 6) in claim 21, and similar
limitations in claims 29 and 37, recite a fundamental economic practice,
which is one of the methods of organizing human activity identified in the
PTO § 101 Memorandum, and thus an abstract idea. See PTO § 101
Memorandum (Revised Step 2A, Prong One), 84 Fed. Reg. at 52, 54.
Additional limitation (7) in claim 21 ("generate one or more purchase
documents with language that effects at least one transfer of ownership" of
an account) is an activity that would ordinarily take place when transferring
asset ownership. Limitation (7), together with limitations ( 1 }-( 6) of claim
21, recite steps readily performable by a human being ( e.g., by lawyers and
creditors transacting bankruptcy debt or distressed business accounts). Thus,
we conclude limitations ( 1 }-(7) in claim 21, and similar limitations in claims
29 and 37, recite concepts readily performed mentally and by pen and paper,
which is another abstract idea identified in the PTO § 101 Memorandum.
See PTO § 101 Memorandum (Revised Step 2A, Prong One-Mental
processes), 84 Fed. Reg. at 52, 54; 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 not
patent-eligible under§ 101.").
Separately, we note much of Appellants' arguments are not
commensurate with the argued claims. For example, claim 21 does not
require "creat[ing] economies of scale not possible using conventional
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computer systems," or providing a solution to a computer network problem,
as Appellants argue (see Br. 12). Appellants further argue the claims are not
directed to an abstract idea because certain steps "require a distributed
computer network, and cannot be performed mentally" (Br. 13-14 ).
We remain unpersuaded because the claims merely automate actions
that can be performed manually with pen and paper, as discussed supra. For
example, the claimed drafting of purchase documents to reflect transfer of
ownership is manually performable by a business contracts lawyer (Ans. 6,
8). See 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 Gottschalkv. Benson.").
In conclusion, claims 21, 29, and 3 7 recite abstract ideas comprising
mental processes and a fundamental economic practice. As our reviewing
court has held, combining several abstract ideas does not render the
combination any less abstract. RecogniCorp, LLC v. Nintendo Co., Ltd., 855
F.3d 1322, 1327 (Fed. Cir. 2017) ("Adding one abstract idea ... to another
abstract idea ... does not render the claim non-abstract."); see also
FairWarning IP, LLC v. Iatric Systems, Inc., 839 F.3d 1089, 1093-94 (Fed.
Cir. 2016) (Patent-ineligible claims were directed to a combination of
abstract ideas.).
Step 2A-Prong 2 (Integration into Practical Application)
Under Revised Step 2A, Prong Two of the PTO § 101 Memorandum,
we discern no additional element ( or combination of elements) recited in
Appellants' claims 21, 29, and 3 7 that may have integrated the judicial
exceptions into a practical application. See PTO § 101 Memorandum, 84
Fed. Reg. at 54--55. Appellants' claims generally link the use of a judicial
exception to a particular technological environment or field of use. That is,
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although Appellants' claims recite hardware components (generic computers
and processors, readable medium, memory, and network interface), the
components are configured to perform numerous real-world functions and
operations, adding nothing of substance to the underlying abstract idea. It is
clear from the claims and the specification ( discussing "commercially
available processors," "data stores ... of any logical construction capable of
storing information," and "any communication network through which
computer systems may exchange data"), these limitations require no
improved networks or computer resources that Appellants claim to have
invented (see Spec. 18:7-9, 21:13-15 and 27-30). Thus, the claims'
limitations are not indicative of "integration into a practical application."
Rather, the processors and other claimed hardware components are readily
available computing elements using their already available basic functions as
tools in executing the claimed debt monetization process. See SAP Am., Inc.
v. InvestPic LLC, 898 F. 3d 1161 (Fed. Cir. 2018).
For business-centric inventions such as Appellants' invention
involving "monetizing high risk debt using a [sic] debt processing," the
"integration into a practical application" prong further requires consideration
of whether the claims purport to provide "a technical solution to a technical
problem" as required by the Federal Circuit's precedential decisions in ( 1)
DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir.
2014) and (2) Amdocs (Isr.) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288
(Fed. Cir. 2016). See MPEP § 2106.05(a).
For example, the Federal Circuit found DDR 's claims are patent-
eligible under section 101 because DDR 's claims: (1) do not merely recite
"the performance of some business practice known from the pre-Internet
world" previously disclosed in Bilski and Alice; but instead (2) provide a
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technical solution to a technical problem unique to the Internet, i.e., a
"solution ... necessarily rooted in computer technology in order to
overcome a problem specifically arising in the realm of computer networks."
DDR, 773 F.3d at 1257. Likewise, the Federal Circuit also found Amdocs'
claims patent-eligible under section 101 because like DDR, Amdocs' claims
"entail[] an unconventional technological solution ( enhancing data in a
distributed fashion) to a technological problem (massive record flows which
previously required massive databases)" and "improve the performance of
the system itself." Amdocs, 841 F.3d at 1300, 1302.
In contrast to DDR and Amdocs, Appellants' Specification and claims
describe "a method of monetizing high risk debt using a [sic] debt
processing," which is a fundamental economic practice long prevalent in our
system of commerce (Final Act. 2, 4). Such" a method of monetizing high
risk debt" does not provide a technical solution to a technical problem
unique to the Internet, i.e., a "solution ... necessarily rooted in computer
technology in order to overcome a problem specifically arising in the realm
of computer networks." DDR, 773 F.3d at 1257. Nor does Appellants'
invention entail, like Amdocs, any "unconventional technological solution
( enhancing data in a distributed fashion) to a technological problem
(massive record flows which previously required massive databases)" and
"improve the performance of the system itself." Amdocs, 841 F.3d at 1300,
1302. Instead, the solution proposed by Appellants is a business solution
rather than a technological solution that utilizes a general purpose computer
(Ans. 6-7).
For these reasons, we agree with the Examiner's determination that
Appellants' claims 21, 29, and 3 7 are directed to an abstract idea that does
not integrate a practical application.
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Alice/May~tep 2 (Inventive Concept)
Step 2B identified in the Revised Guidance
In the second step of the Alice inquiry, Appellants argue claims 21,
29, and 3 7 recite significantly more than a judicial exception for the reasons
that: ( 1) claimed steps "are necessarily rooted in computer technology" as in
DDR, without any "pre-Internet, real-world analogy"; and (2) the claims
"provide specific, technical improvements over the traditional computer-
based debt acquisition process" (Br. 15-16 (citing DDR., 773 F.3d 1245).
Appellants argue the technical improvements include a user configuring "the
system to automatically evaluate the potential profitability of pools of debt,
large and small, without the need to evaluate individual debt accounts
manually" (Br. 16). These improvements are allegedly enabled by the
claimed "account groups" that are "a computer-implemented construct to
which a user may assign pre-defined criteria" for use in asset valuation (id.).
Appellants' arguments are not persuasive for reasons discussed in
connection with DDR. As further recognized by the PTO§ 101
Memorandum, an "inventive concept" under Alice step 2 can also be
evaluated based on whether an additional element or combination of
elements:
( 1) "adds a specific limitation or combination of limitations that are
not well-understood, routine, conventional activity in the field,
which is indicative that an inventive concept may be present;" or
(2) "simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception, which is indicative
that an inventive concept may not be present."
See PTO§ 101 Memorandum, 84 Fed. Reg. at 56.
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In this case, however, we find no element or combination of elements
recited in Appellants' claims 21, 29, and 3 7 that contain any "inventive
concept" or add anything "significantly more" to transform the abstract
concept into a patent-eligible application. Alice, 573 U.S. 208 at 221. Nor
do the claims provide any technical solution to a technical problem as
required by DDR Holdings or entail an unconventional technological
solution to a technological problem as required by Amdocs. We are not
persuaded by Appellants' argument that the claims "provide specific,
technical improvements over the traditional computer-based debt acquisition
process" (see Br. 16), as Appellants' argument does not recite or direct us to
any such "technical improvements." Appellants also have not demonstrated
their claimed generic processors, memory, and network interface are able,
alone or in combination, to performfunctions that are not merely generic, as
the claims in DDR. See DDR Holdings, 773 F.3d at 1258. As discussed
supra, Appellants' claims merely recite computation steps performable by
conventional computers, or even manually by creditors and traders buying
distressed business accounts: steps that are well-understood, routine, and
conventional. That is, Appellants' independent claims simply add a high
level of generality to the judicial exception of identifying profitable debt
investments for distressed debt trading. For these reasons we also disagree
with Appellants that the claimed steps have "no pre-Internet, real-world
analogy" (see Br. 15).
Appellants' claims also do not solve "a challenge particular to the
Internet" as considered by the court in DDR. See DDR Holdings, 773 F.3d
at 1256-57. Rather, Appellants' claims merely implement an abstract idea
of purchasing valuable distressed debt using generic computers, memory,
and network interfaces (see Spec. 18:7-9, 20:22-25, 21: 13-18 and 27-31,
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22:3). However, "after Alice, there can remain no doubt: recitation of
generic computer limitations does not make an otherwise ineligible claim
patent-eligible." DDR, 773 F .3d at 1256 ( citing Alice, 573 U.S. 208 at 223).
Appellants' arguments are also not commensurate with claim 21,
which does not require "configur[ing] the system to automatically evaluate
the potential profitability of pools of debt, large and small, without the need
to evaluate individual debt accounts manually" (see Br. 16). Appellants'
claim 21 also does not recite return rates specifically tailored to particular
account groups, as Appellants assert (id.). Rather, claim 21 claims generic
"estimated return rates" for "a specified account group."
Appellants argument the claims do not preempt all practical
applications of the alleged abstract idea, is also not persuasive (Br. 12-13).
We note preemption is a necessary clue for patent eligibility, but a lack of
preemption is not sufficient for patent eligibility. As the McRO court
explicitly recognized, "the absence of complete preemption does not
demonstrate patent eligibility." See McRO, 837 F.3d at 1315 (quoting
Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir.
2015)). "Where a patent's claims are deemed only to disclose patent
ineligible subject matter" under the Alice/Mayo framework, "preemption
concerns are fully addressed and made moot." Ariosa, 788 F.3d at 1379.
Because Appellants' independent claims 21, 29, and 37 are directed to
a patent-ineligible abstract concept and do not recite an "inventive concept"
by providing a solution to a technical problem under the second prong of the
Alice analysis, we sustain the Examiner's§ 101 rejection of independent
claims 21, 29, and 37.
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Appeal2018-003070
Application 13/835, 172
Dependent Claims 25-28, 33-36, and 41--44
Appellants contend the§ 101 rejections of dependent claims 25-28,
33-36, and 41--44 are in error because each dependent claim "adds
additional technical features" and "technological improvement," thereby
reciting "significantly more" (Br. 17-18). Appellants' arguments, however,
do not recite or direct us to specific limitations in the dependent claims that
recite a technology-specific "inventive concept," beyond the judicial
exception. Rather, Appellants' dependent claims simply claim limitations
that add a high level of generality to the judicial exception (Ans. 8; see PTO
§ 101 Memorandum, 84 Fed. Reg. at 56).
For example, claim 27 recites a "component" configured to generate
and transmit a document (a collection claim form), merely automating a
manual action performable by, e.g., a creditor. Generating collection claim
forms is a necessary requirement in conventional transactions ( e.g., in
distressed debt trading). As one skilled in the art at the time of Appellants'
invention would appreciate, computers conventionally replace manual
document drafting to minimize drafting errors and delays. The document
preparation limitation in claim 27 is not technical in nature and does not
provide any "technical solution to a technical problem" as contemplated by
the Federal Circuit inDDR and Amdocs. See MPEP § 2106.05(a).
Accordingly, we sustain the Examiner's§ 101 rejection of Appellants'
dependent claims 25-28, 33-36, and 41--44, as Appellants' arguments have
not persuaded us the claims are "integrated into a practical application" or
recite something "significantly more," and thus do not provide an inventive
concept.
18
Appeal2018-003070
Application 13/835, 172
DECISION
The Examiner's decision rejecting claims 21, 25-29, 33-37, and 41-
44 is affirmed.
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).
AFFIRMED
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