Ex Parte Ray et al

Patent Trials and Appeals Board

Mar 21, 2019

11882899 - (D) (P.T.A.B. Mar. 21, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
11/882,899 08/07/2007 Randall E. Ray
4372 7590 03/25/2019
ARENT FOX LLP
1717 K Street, NW
WASHINGTON, DC 20006-5344
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.
028904-00002 8327
EXAMINER
COBANOGLU, DILEK B
ART UNIT PAPER NUMBER
3626
NOTIFICATION DATE DELIVERY MODE
03/25/2019 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):
patentdocket@arentfox.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CHRISTOPHER D. PREST, FLETCHER ROTHKOPF, and
RICHARD H. DINH
Appeal2018-001274
Application 11/882,889
Technology Center 2600
Before CAROLYN D. THOMAS, JOSEPH P. LENTIVECH, and
SCOTT RAEVSKY, Administrative Patent Judges.
LENTIVECH, Administrative Patent Judge.
DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellants 1 appeal from the
Examiner's decision to reject claims 1-3, 5-7, 10-17, 19-27, 29-31, and
34--40. Claims 4, 8, 9, 18, 28, 32, and 33 have been canceled. See App.
Br. 24--30 (Claims Appendix). We have jurisdiction over the pending claims
under 35 U.S.C. § 6(b ).
We affirm.
1 According to Appellants, the real party in interest is Lyfebank LLC. App.
Br. 2.
Appeal2018-001274
Application 11/882,889
STATEMENT OF THE CASE
Appellants' Invention
Appellants' invention generally relates to "providing multiple funding
sources for healthcare and health insurance." Spec. ,r 2. Claim 1, which is
illustrative, reads as follows:
1. A method for providing multiple funding sources for
approved healthcare expense reimbursement, performed by a
specially-programmed computer comprising a processor, the
method comprising:
receiving, at the computer and from a first employer of a
plurality of employers, an agreement between the first employer
and a first employee of a plurality of eligible employees eligible
for healthcare expense reimbursement to create a first non-
insurance employee healthcare expense funding source;
receiving, at the computer and from a second employer of
the plurality of employers, an agreement between the second
employer and the first employee to create a second noninsurance
employee healthcare expense funding source;
receiving, at the computer and from the first employer a
first file record layout (FRL) file regarding the plurality of
employees eligible for healthcare expense reimbursement
including a first contribution amount for the first employer for
the first employee;
receiving, at the computer and from the second employer
a second FRL file including a second contribution amount for the
second employer for the first employee;
funding, via the processor, the first funding source and the
second funding source for the first employee with at least the first
contribution amount and the second contribution amount; and
upon request of an approved healthcare expense
reimbursement, providing, via the processor, healthcare expense
reimbursement associated with the first employee, the healthcare
reimbursement being obtained by accumulating funds from the
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funded first funding source and the funded second funding
source.
App. Br. 24 (Claims Appendix).
Rejections
Claims 1-3, 5-7, 10, 31, 34, 37, and 40 stand rejected under 35 U.S.C.
§ 112, first paragraph, as failing to comply with the written description
requirement. Non-Final Act. 3--4.
Claims 1-3, 5-7, 10-17, 19-27, 29-31, and 34--40 stand rejected
under 35 U.S.C. § 101 because the claimed subject matter isjudicially-
excepted from patent eligibility under § 101. Non-Final Act. 4--7.
Issues on Appeal
Did the Examiner err in finding that claims 1-3, 5-7, 10, 31, 34, 37,
and 40 fail to comply with the written description requirement under§ 112,
first paragraph?
Did the Examiner err in finding that claims 1-3, 5-7, 10-17, 19-27,
29-31, and 34--40 are directed to subject matter that is judicially-excepted
from patent eligibility under § 101?
ANALYSIS
Rejection under 35 U.S. C. § 112, first paragraph
The Examiner rejects claim 1 under 35 U.S.C. § 112, first paragraph,
for failing to comply with the written description requirement because
"specially-programmed computer," as recited in claim 1, was not described
in the Specification in such a way as to reasonably convey to one skilled in
the art that the inventors, at the time the application was filed, had
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possession of the claimed invention. Non-Final Act. 3. In particular, the
Examiner finds:
The computer system 600 described in the specification includes
generic computer components such as processor, memory.
Computer programs stored in the memory and "Such computer
programs, when executed, enable the computer system 600 to
perform the features of the present invention" ( specification,
paragraphs 127-132). Therefore, it's unclear and not described
in the present specification what the "specially-programmed
computer" is and what it does specially. Also, special program
is not defined in the present specification.
Non-Final Act. 4. We disagree.
Based on the plain meaning of the terms, a "specially-programmed
computer," as recited in claim 1, refers to a computer that is programmed to
perform the claimed process for providing multiple funding sources for
approved healthcare expense reimbursement. We agree with Appellants that
paragraph 126 of the Specification provides "that the computer system 600
is controlled by computer programs that, when executed, enable the
computer system 600 to perform the features of the present invention" and
that "[t]he remainder of the [S]pecification provides the details of the
implementation of the computer system 600 via computer programs." App.
Br. 13. We also agree with Appellants that, at the time of filing, one skilled
in the art "would have understood the inventor to be in possession of a
specially programmed computer for performing the methods illustrated in
FIGS. 3-5 using the GUI screens in FIGS. 8A-8E and the FRL illustrated in
FIG. 9 for communication between the entities in FIG. 10." App. Br. 14.
Accordingly, we do not sustain the Examiner's rejection of claim 1
under 35 U.S.C. § 112, first paragraph. For the same reasons, we also do not
sustain the Examiner's 35 U.S.C. § 112, first paragraph, rejection of claims
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2, 3, 5-7, 10, 31, 34, 37, and 40 which were rejected based on their
dependence from claim 1. Non-Final Act. 4.
Rejection under 35 U.S.C. § 101
Regarding the rejection of claims 1-3, 5-7, 10-17, 19-27, 29-31, and
34--40 under 35 U.S.C. § 101, Appellants do not substantively argue the
claims separately, but instead rely on the same arguments for all claims. See
App. Br. 22. In accordance with 37 C.F.R. § 4I.37(c)(l)(iv), we select
independent claim 1 as the representative claim. Remaining claims 2, 3, 5-
7, 10-17, 19-27, 29-31, and 34--40 stand or fall together with claim 1.
PRINCIPLES OF LAW
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 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. Pty. Ltd. v. CLS Bank Int 'l, 573
U.S. 208,216 (2014) (internal quotation marks and citation omitted).
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
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
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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
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 ("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
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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 (internal 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 PTO recently published revised guidance on the application of
§ 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed.
Reg. 50 (Jan. 7, 2019) ("Memorandum"). Under that guidance, 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); and
(2) additional elements that integrate the judicial exception into
a practical application (see MANUAL OF PATENT EXAMINING
PROCEDURE (MPEP) § 2106.05(a}-(c), (e}-(h) (9th Ed., Rev.
08.2017, Jan. 2018)).
See Memorandum, 84 Fed. Reg. at 52, 54--55. Only if a claim (1) recites a
judicial exception and (2) does not integrate that exception into a practical
application, do we then look to whether the claim:
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(3) adds a specific limitation beyond the judicial exception that
is not "well-understood, routine, conventional" in the field (see
MPEP § 2106.0S(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, 84 Fed. Reg. at 56.
OUR ANALYSIS
At the outset, we note the Memorandum governs all patent-eligibility
analysis under Alice and§ 101 effective as of January 7, 2019. In particular,
the PTO has acknowledged that the Federal Circuit's common law, analogy-
driven approach (a.k.a. "analogous claim" test) was effective soon after
Alice was decided by the Supreme Court, but that approach has since
become impractical as the growing body of Federal Circuit precedent has
become increasingly more difficult for the Office and examiners to apply in
a predicable manner. As a result, the PTO has synthesized, for purposes of
clarity, predictability, and consistency, the "abstract idea" exception to
include three categories of abstract ideas: ( 1) mathematical concepts-
mathematical relationships, mathematical formulas or equations,
mathematical calculations; (2) mental processes----concepts performed in the
human mind (including an observation, evaluation, judgment, opinion); and
(3) 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
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or interactions between people (including social activities, teaching, and
following rules or instructions). See Memorandum, 84 Fed. Reg. at 54--55.
STEP]
Under "Step 1" of the analysis, we determine whether the claimed
subject matter falls within the four categories of patentable subject matter
identified by 35 U.S.C. § 101. Id. at 53-54. Claim 1 is directed to a method
and, therefore, falls within the four categories of patentable subject matter-
a process.
STEP 2A, PRONG ONE
Under "Step 2A, Prong One" of the analysis, we determine whether
the claim recites a judicial exception. Id. at 54. Claim 1 recites, among
other things, the limitations of:
funding, via the processor, the first funding source and the
second funding source for the first employee with at least the first
contribution amount and the second contribution amount; and
upon request of an approved healthcare expense
reimbursement, providing, via the processor, healthcare expense
reimbursement associated with the first employee, the healthcare
reimbursement being obtained by accumulating funds from the
funded first funding source and the funded second funding
source.
These limitations, as drafted, are processes that, under their broadest
reasonable interpretation are fundamental economic practices similar to risk
the intermediated settlement in Alice (see Alice, 573 U.S. at 218-19),
verifying credit card transactions in CyberSource Corp. v. Retail Decisions,
Inc., 654 F.3d 1366, 1370 (Fed. Cir. 2011), and guaranteeing transactions in
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buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1354 (Fed. Cir. 2014). As
such, the claims recite a fundamental economic practice-i.e., a method of
organizing human activity-and, therefore, an abstract idea. See
Memorandum, 84 Fed. Reg. at 54--55. That the claims require the steps to
be performed "via the processor" fails to take the claim limitations out of the
method of organizing human activity grouping because an abstract idea
(such as a fundamental economic practice) is not rendered patent-eligible
merely by coupling it to a machine or manufacture. See Alice, 537 U.S. at
223. Additionally, as our reviewing court noted in In re TL! Commc 'ns LLC
Patent Litig., 823 F.3d 607 (Fed. Cir. 2016), "not every claim that recites
concrete, tangible components escapes the reach of the abstract-idea
inquiry." Id. at 611.
STEP 2A, PRONG Two
Under "Step 2A, Prong Two," we determine whether the claim as a
whole integrates the recited judicial exception into a practical application of
the exception. Memorandum, 84 Fed. Reg. at 54. Claim 1 recites the
following additional elements:
receiving, at the computer and from a first employer of a
plurality of employers, an agreement between the first employer
and a first employee of a plurality of eligible employees eligible
for healthcare expense reimbursement to create a first non-
insurance employee healthcare expense funding source;
receiving, at the computer and from a second employer of
the plurality of employers, an agreement between the second
employer and the first employee to create a second noninsurance
employee healthcare expense funding source;
receiving, at the computer and from the first employer a
first file record layout (FRL) file regarding the plurality of
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employees eligible for healthcare expense reimbursement
including a first contribution amount for the first employer for
the first employee; [and]
receiving, at the computer and from the second employer
a second FRL file including a second contribution amount for the
second employer for the first employee.
We find these additional limitations fail to integrate the judicial exception
into a practical application. For example, the claims do not ( 1) improve the
functioning of a computer or other technology, (2) are not applied with any
particular machine (except for a generic computer), (3) do not effect a
transformation of a particular article to a different state, and (4) are not
applied in any meaningful way beyond generally linking the use of the
judicial exception to a particular technological environment, such that the
claim as a whole is more than a drafting effort designed to monopolize the
exception. See Memorandum, 84 Fed. Reg. at 54--55; MPEP §§ 2106.05(a}-
( c ), ( e }-(h). Instead, generic computer components, such as, for example, a
computer and a processor, are merely used as tools to facilitate the receiving
of the claimed agreements and file record layouts. See BASCOM Glob.
Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1348 (Fed. Cir. 2016).
The claimed "receiving" limitations amount to mere data gathering, which is
a form of insignificant extra-solution activity. See CyberSource, 654 F .3d at
1370.
For the foregoing reasons, claim 1 is directed to a method of
organizing human activity ( e.g., a fundamental economic practice), i.e., an
abstract idea, and does not integrate the judicial exception into a practical
application.
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STEP2B
We next evaluate the claim under "Step 2B" to determine whether the
claim provides an "inventive concept" (e.g., recites significantly more than
the abstract idea). Memorandum, 84 Fed. Reg. at 56.
As recognized by the Memorandum, an "inventive concept" under
Alice step 2 can 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 (see MPEP § 2106.05(d)); 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 Memorandum, 84 Fed. Reg. at 56.
In this case, however, we find no element or combination of elements
recited in Appellants' claim that adds a specific limitation or combination of
limitations that are not well-understood, routine, conventional activity in the
field. See id. We agree with the Examiner that the claimed computer
elements "are recited at a high level of generality" and "provide
conventional computer functions that do not add meaningful limits to
practicing the abstract idea." Non-Final Act. 5.
In particular, we are unpersuaded by Appellants' contention that the
Office "provides no reasoning to support the assertion that [ the claims recite]
well-understood, routine, or conventional activity. See App. Br. 22.
Appellants assert that the following limitation is not merely well-understood,
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routine, or conventional: "upon request of an approved healthcare expense
reimbursement, providing, via the processor, healthcare expense
reimbursement associated with the first employee, the healthcare
reimbursement being obtained by accumulating funds from the funded first
funding source and the funded second funding source." Id. However, this
limitation is one that we point to above as reciting a fundamental economic
practice-an abstract idea. A limitation as this one, which recites solely an
abstract idea, as a matter of law cannot recite significantly more than the
abstract idea. See Alice, 573 U.S. at 217-18 ("[W]e consider the elements of
each claim both individually and 'as an ordered combination' to determine
whether the additional elements 'transform the nature of the claim' into a
patent-eligible application.") ( emphasis added). Thus, the Office need not
provide evidence that this limitation is well-understood, routine, or
conventional. See Memorandum-Changes in Examination Procedure
Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility
Decision (Berkheimer v. HP, Inc.) 3 (April 19, 2018) ("The question [is]
whether additional elements represent well-understood, routine,
conventional activity[.]") ( emphasis added).
We are also unpersuaded by Appellants' argument that the claims
"solve[] the problems of the prior art by providing a specific method and
system for coordinating contributions to employee healthcare expense
reimbursements" and the "claims are directed to an inventive concept of
using a computer system to coordinate multiple parties, including a first
employer and a second employer to provide for a single healthcare expense
reimbursement." App. Br. 19. The claimed improvements to coordinating
contributions made by multiple parties to employee healthcare expense
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reimbursements are improvements to a business process and are not a
technical solution to a technical problem as required by DDR Holdings. See
DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir.
2014).
For the foregoing reasons, we find claims 1-3, 5-7, 10-17, 19-27,
29-31, and 34--40 are directed to a patent-ineligible abstract concept, and do
not recite something "significantly more" under the second prong of the
Alice analysis. Accordingly, we sustain the Examiner's rejection of these
claims under 35 U.S.C. § 101.
DECISION
We reverse the Examiner's rejection of claims 1-3, 5-7, 10, 31, 37,
and 40 under 35 U.S.C. § 112, first paragraph.
We affirm the Examiner's rejection of claims 1-3, 5-7, 10-17, 19-27,
29-31, and 34--40 under 35 U.S.C. § 101.
Since at least one rejection encompassing all claims on appeal is
affirmed, the decision of the Examiner 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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