Ex Parte Stone

Patent Trials and Appeals Board

Jul 1, 2019

12817806 - (D) (P.T.A.B. Jul. 1, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/817,806 06/17/2010
23460 7590 07/03/2019
LEYDIG VOIT & MA YER, LTD
TWO PRUDENTIAL PLAZA, SUITE 4900
180 NORTH STETSON A VENUE
CHICAGO, IL 60601-6731
FIRST NAMED INVENTOR
Stephen J. Stone
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.
706489 6363
EXAMINER
MAGUIRE, LINDSAY M
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
07/03/2019 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):
Chgpatent@leydig.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte STEPHEN J. STONE
Appeal2018-000635
Application 12/817,806
Technology Center 3600
Before MAHSHID D. SAADAT, BETH Z. SHAW, and
JAMES W. DEJMEK, Administrative Patent Judges.
SAADAT, Administrative Patent Judge.
DECISION ON APPEAL
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 1, 2, 4, 6-9, 11-16, and 18-21, which constitute all
the claims pending in this application. We have jurisdiction under
35 U.S.C. § 6(b).
We affirm.
1 According to Appellant, the real party in interest is American
International Group, Inc. Br. 1.
Appeal2018-000635
Application 12/817,806
STATEMENT OF CASE
Introduction
Appellant's Specification describes "systems, methods, and computer
program products for administering a guaranteed benefit of an investment
product." Spec. ,r 4.
Representative Claim
Representative claim 1 under appeal reads as follows;
1. A computer-implemented system for administering an
investment product having an account a term including a
p 1 umlity of time periods and a guaranteed benefit comprising:
a physical computer-readable medium including an
investment product benefit calculating program; and
a processor adapted to execute the investment product
benefit program contained in the physical computer-readable
medium;
a web-enabled interface operably arranged with the
processor, the web-enabled interface adapted to receive,
periodically, market information from a market information
source over the internet, the market information comprising at
least one market-based interest rate;
wherein the investment product program includes a
calculating module having computer executable instructions
adapted to determine, periodically, a guaranteed withdrawal
amount that can be withdrawn from the account in one time
period under the guaranteed benefit of the investment product
without affecting the guaranteed withdrawal amounts of
subsequent time periods, the guaranteed withdrawal amount
determined based upon a formula including a benefit rate, the
benefit rate including a variable component that varies as a
function of said at least one market-based interest rate, said at
least one market-based interest rate being correlated to cost
changes of a hedging investment activity for funding the
guaranteed withdrawal amount, said at least one market-based
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interest rate being set according to the market information
received from the market information source.
Rejection on Appeal
Claims 1, 2, 4, 6-9, 11-16, and 18-21 stand rejected under
35 U.S.C. § 101 for being directed to patent-ineligible subject matter. See
Final Act. 2.
ANALYSIS
The Examiner determines that the claims are directed to "a judicial
exception (i.e., a law of nature, a natural phenomenon, or an abstract idea)
without significantly more" by reciting method steps related to
"administering an investment product." Final Act. 2. Applying the first part
of the Alice analysis, the Examiner finds the claims "are drawn to the
abstract idea of administering an investment product with the steps of
1) collecting data, 2) recognizing certain data within the collected data set,
and 3) performing calculations and storing that recognized data in a
memory," which are "undisputedly well known." Id. Applying the second
part of the Alice analysis, the Examiner finds the claims do not amount to
significantly more than the abstract idea itself because the claims "contain
no limitations either individually or as an ordered combination--that
transform the abstract idea into a patent-eligible application." Id.
Appellant argues that the claimed invention is not directed to an
abstract idea because claim 1 "is directed to a statutory class of invention as
recognized in Section 101, namely a machine" or "a computer-implemented
system." Br. 6. According to Appellant, "[c]laim 1 recites additional
elements that amount to significantly more than a judicial exception" by
including "features that apply its claimed concepts to a new and useful end."
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Br. 6. Referring to paragraph 3 of the Specification, Appellant explains
"[t]he claimed approach helps an insurance provider periodically adjust the
guaranteed benefit according to the cost associated with hedging the
guarantee," which "is a significant improvement over any existing
technological system/process known at the time of the invention." Br. 6-7.
Appellant further asserts the recited features are "rooted in computer
technology in order to satisfy persistent needs specifically arising in the field
of investment products." Br. 7. Appellant argues independent claims 8 and
15 are patent-eligible by presenting arguments similar to those outlined
above regarding claim 1. Br. 8-12.
Principles of Law
Section 101 of the Patent Act provides that "any new and useful
process, machine, manufacture, or composition of matter, or any new and
useful improvement thereof' is patent eligible. 35 U.S.C. § 101. But the
Supreme Court has long recognized an implicit exception to this section:
"Laws of nature, natural phenomena, and abstract ideas are not patentable."
Alice Corp. v. CLS Bankint'l, 573 U.S. 208,216 (2014) (quotingAss'nfor
Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)).
To determine whether a claim falls within one of these excluded categories,
the Court has set out a two-part framework. The framework requires us first
to consider whether the claim is "directed to one of those patent-ineligible
concepts." Alice, 573 U.S. at 217. If so, we then examine "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." Alice, 573 U.S. at 217 (quoting Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 78, 79 (2012)).
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That is, we examine the claims for an "inventive concept," "an element or
combination of elements that is 'sufficient to ensure that the patent in
practice amounts to significantly more than a patent upon the [ineligible
concept] itself."' Alice, 573 U.S. at 217-18 ( alteration in original) ( quoting
Mayo, 566 U.S. at 72-73).
In January 2019, the USPTO published revised guidance on the
application of§ 101. See 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) ("Guidance"). 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 activities 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)).
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, and conventional in the field (see MPEP
§ 2106.05(d)); or
( 4) simply appends well-understood, routine, and conventional
activities previously known to the industry, specified at a high level of
generality, to the judicial exception.
See Guidance, 84 Fed. Reg. at 56.
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Abstract Idea
To determine whether a claim recites an abstract idea, we (1) identify
the claim's specific limitations that recite an abstract idea, and (2) determine
whether the identified limitations fall within certain subject matter
groupings, namely (a) mathematical concepts2; (b) certain methods of
organizing human activity3; or ( c) mental processes. 4
Under step 2A, prong 1, of the Guidance ( consistent with the Alice
analysis), we must determine "whether the claims at issue are directed to one
of those patent-ineligible concepts," including the abstract ideas enumerated
in the Guidance. Claim 1 recites, in part, "receive, ... , market information,"
and employing the "calculating module ... to calculate, periodically, a
guaranteed withdrawal amount that can be withdrawn from the account in
one time period under the guaranteed benefit of the investment product
without affecting the guaranteed withdrawal amounts of subsequent time
periods." Claims 8 and 15 recite similar elements.
Consistent with the Examiner's finding, the above-mentioned
elements recite a concept of facilitating a guaranteed withdrawal amount
2 Mathematical concepts include mathematical relationships, mathematical
formulas or equations, and mathematical calculations. See Guidance, 84
Fed. Reg. at 52.
3 Certain methods of organizing human activity include 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). See Guidance, 84 Fed. Reg. at 52.
4 Mental processes are concepts performed in the human mind including an
observation, evaluation, judgment, or opinion. See Guidance, 84 Fed. Reg.
at 52.
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based on a formula that relates to at least one market-based interest rate,
which is correlated to cost changes of a hedging investment activity.
Hedging and mitigating risk are examples of fundamental or long-standing
economic practices. The Guidance identifies "fundamental economic
principles or practices" as an example of certain methods of organizing
human activity, which is an enumerated category of abstract ideas. See
Guidance, 84 Fed. Reg. at 52. Further, the fact that the hedging and
mitigating risk steps are performed by instructions executed on one or more
computing devices does not impart patent eligibility on the claims, because
the recitation of "computer-implemented system," "processor," "web-
enabled interface," and calculating module" merely amounts to a statement
to use a computing system to receive market information and calculate a
guaranteed withdrawal amount. "[I]f a patent's recitation of a computer
amounts to a mere instruction to 'implemen[t]' an abstract idea 'on ... a
computer,' that addition cannot impart patent eligibility." Alice, 573 U.S. at
223 ( quoting Mayo, 566 U.S. at 84). Thus, claims 1, 8, and 15, as well as
the corresponding dependent claims, recite an abstract idea.
Notwithstanding Appellant's argument that the claimed approach improves
the existing systems for adjusting the guaranteed benefit are directed to
technical aspects of determining a guaranteed withdrawal, rather than the
hedging and mitigating risk processes themselves, Appellant's argument
does not change the fact that the claims recite a concept of fundamental
economic practices, and thus, recite an abstract idea. 5
5 The Examiner also finds the claims recite performing calculations to
determine the guaranteed withdrawal amount "which is something that can
be accomplished by the human mind with pen and paper, given enough
. " A 4 time. ns. .
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Although claim 1 recites an abstract idea based on certain method of
organizing human activity- specifically a fundamental economic practice,
under step 2A, prong 2, of the Guidance, we must still determine whether
the abstract idea is integrated into a practical application, namely whether
the claim applies, relies on, or uses the abstract idea in a manner that
imposes a meaningful limit on the abstract idea, such that the claim is more
than a drafting effort designed to monopolize the abstract idea. See
Guidance, 84 Fed. Reg. at 54--55. We, therefore, (1) identify whether there
are any additional recited elements beyond the abstract idea, and (2) evaluate
those elements individually and collectively to determine whether they
integrate the exception into a practical application. See id.
Here, the processor, the interface, and the calculating module, as well
as executing the program, are the only recited elements beyond the abstract
idea, but these additional elements do not integrate the abstract idea into a
practical application when reading claims 1, 8, and 15 as a whole.
Therefore, we are not persuaded that the claimed invention improves the
computer or its components' functionality or efficiency, or otherwise
changes the way those devices function. In another words, contrary to
Appellant's assertion (Br. 7), the claimed invention here merely uses generic
computing components to calculate a guaranteed withdrawal amount based
on collected market information-a generic computer implementation that is
not only directed fundamental economic practices, but also does not improve
a display mechanism as was the case in McRO, Inc. v. Bandai Namco Games
America, Inc., 837 F.3d 1299 (Fed. Cir. 2016).
The written description discloses that the recited processor, interface,
and calculating module encompass generic components such as a general-
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purpose computer, memory, and network. See, e.g., Spec. ,r 31 (Describing
the computing environment as including "any type of computer system
based on: a microprocessor, a mainframe computer, a digital signal
processor, a portable computing device, a personal organizer, a device
controller, or a computational engine within an appliance."). See also Spec.
,r 56. Simply adding generic hardware and computer components to perform
abstract ideas does not integrate those ideas into a practical application. See
Guidance, 84 Fed. Reg. at 55 (identifying "merely includ[ing] instructions to
implement an abstract idea on a computer" as an example of when an
abstract idea has not been integrated into a practical application).
Thus, the claimed limitations do not integrate the abstract idea into a
practical application because they do not impose any meaningful limits on
practicing the abstract idea. 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 MPEP § 2106.05(a}-(c), (e}-(h).
Inventive Concept
Because we determine claims 1, 8, and 15 are "directed to" an abstract
idea, we consider whether the claims recites an "inventive concept." The
Examiner determined the claims do not recite an inventive concept because
the additional elements in the claims do not amount to "significantly more"
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Application 12/817,806
than an abstract idea and do not involve "well-understood, routine, and
conventional activities." See Final Act. 2; Ans. 4--5.
We agree. The additional elements recited in the claim include
processor, interface, and calculating module, which are recited at a high
level of generality, and the written description indicates that these elements
are generic computer components. See, e.g., Spec. ,r,r 31 and 56. Using
generic computer components to perform abstract ideas does not provide the
necessary inventive concept. See Alice, 573 U.S. at 223 ("[T]he mere
recitation of a generic computer cannot transform a patent-ineligible abstract
idea into a patent-eligible invention."). Thus, these elements, taken
individually or together, do not amount to "significantly more" than the
abstract ideas themselves.
Consistent with the Examiner's findings, we see nothing in the claims
or the Specification suggesting that these additional elements are anything
but generic computer components that perform well-understand, routine, and
conventional activities. See Ans. 5. As such, Appellant's claims can be
distinguished from patent-eligible claims such as those in BASCOM Global
Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016)
and Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir.
2016) (Br. 11 ), that are directed to "solving a technology-based problem"
(BASCOM, 827 F.3d at 1349-52) and "enhancing data in a distributed
fashion" (Amdocs, 841 F.3d at. 1300--01).
Conclusion
For at least the above reasons, we agree with the Examiner that claims
1, 8, and 15 are "directed to" an abstract idea and does not recite an
"inventive concept." Accordingly, we sustain the Examiner's rejection of
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claims 1, 8, and 15 and the remaining claims that fail to include additional
elements that add significantly more to the abstract idea, under 35 U.S.C.
§ 101.
DECISION
We affirm the Examiner's rejection of claims 1, 2, 4, 6-9, 11-16, and
18-21 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) (2015).
AFFIRMED
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