Ex Parte TIMM et al

Patent Trials and Appeals Board

Jan 28, 2019

14083496 - (D) (P.T.A.B. Jan. 28, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
14/083,496 11/19/2013
74739 7590 01/30/2019
Potomac Law Group, PLLC (Oracle International)
8229 Boone Boulevard
Suite 430
Vienna, VA 22182
Chad Jeffrey TIMM
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.
2011-0327US01 9994
EXAMINER
BRIDGES, CHRISTOPHER
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
01/30/2019 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):
patents@potomaclaw.com
bgoldsmith@potomaclaw.com
eofficeaction@appcoll.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CHAD JEFFREY TIMM, ERICK MILES ROWE, GERALD
JOSEPH HANSON, and WRGEN RILEY SCHROEDER
Appeal2017-011232
Application 14/083,496
Technology Center 3600
Before ST. JOHN COURTENAY III, LARRY J. HUME, and
JOHN A. EVANS, Administrative Patent Judges.
COURTENAY, Administrative Patent Judge.
DECISION ON APPEAL
Appellants 1 appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 1, 2, 4, 5, 7, 8, 11-14, 16-18, and 20-24, which
constitute all the claims pending in this application. Claims 3, 6, 9, 10, 15,
and 19 are cancelled. 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 Oracle International
Corporation. App. Br. 3.
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Application 14/083,496
STATEMENT OF THE CASE
One embodiment of Appellants' invention relates "to a computer
system, and more particularly, to a computer system that matches invoices."
Spec. ,r 1 ( emphasis added).
Exemplary Claim
1. A non-transitory computer-readable medium having
instructions stored thereon that, when executed by a processor,
cause the processor to automatically optimize a configurable
invoice matching engine, the automatic optimizing comprising:
receiving a set of historical invoice matching data that
comprises invoices classified by the invoice matching engine and
resolution actions initiated by the invoice matching engine,
wherein the invoice matching engine classifies the invoices
based on a current set of invoice matching tolerance parameters
and initiates the resolution actions based on a current set of
invoice matching action parameters, the current set of invoice
matching tolerance parameters including an exact match
parameter, a tolerance match parameter and a non-match
parameter, and the current set of invoice matching action
parameters including:
an exact match parameter that defines an exact
match resolution action that the invoice matching engine
initiates in response to classifying the invoice as an exact
match with the purchase document,
a tolerance match parameter that defines a tolerance
resolution action that the invoice matching engine initiates
in response to classifying the invoice as a match within a
tolerance with the purchase document, and
a non-match parameter that defines a non-match
resolution action that the invoice matching engine initiates
in response to classifying the invoice as a non-match with
the purchase document;
defining a processing level parameter that defines a level
of granularity for calculating an overall cost, the level of
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granularity including a global level, a supplier level and an item
level, the global level providing improved processor
performance over the supplier level and the item level, and the
supplier level providing improved processor performance over
the item level, the global level calculating an overall cost for all
suppliers and item types, the supplier level calculating an overall
cost for each supplier, and the item level calculating an overall
cost for each supplier and item type;
defining a set of fixed factor parameters that define cost
values associated with the invoice matching engine initiating
resolution actions;
calculating a set of historical factor parameters that define
metric values based on the historical invoice matching data;
calculating a current overall cost associated with the
invoice matching engine initiating resolution actions based on
the level of granularity, the current set of invoice matching
tolerance parameters, the current set of invoice matching action
parameters, the set of fixed factor parameters, and the set of
historical factor parameters;
calculating a plurality of alternate overall costs, associated
with the invoice matching engine initiating resolution actions,
based on the level of granularity and a plurality of alternate sets
of invoice matching tolerance parameters, each alternate set
including at least one different tolerance parameter value;
determining an optimal set of invoice matching tolerance
parameters based on comparing the current overall cost with the
plurality of alternate overall costs; and
adjusting the current set of invoice matching tolerance
parameters to the optimal set of invoice matching tolerance
parameters.
App. Br. 22-23 (Claims Appendix).
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Rejection 2
Claims 1, 2, 4, 5, 7, 8, 11-14, 16-18, and 20-24 are rejected under
35 U.S.C. § 101, as being directed to a judicial exception, without
significantly more. Final Act. 3-21.
Issue on Appeal
Did the Examiner err in rejecting claims 1, 2, 4, 5, 7, 8, 11-14, 16-18,
and 20-24 under 35 U.S.C. § 101, as being directed to a judicial exception,
without significantly more?
ANALYSIS
We have considered all of Appellants' arguments and any evidence
presented. We highlight and address specific findings and arguments for
emphasis in our analysis below.
Rejection under 35 U.S.C. § 101
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. v. CLS Bank Int 'l, 573 U.S. 208,
216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court's two-step framework, described in Mayo
2 Responsive to Appellants' arguments and amendments, the Examiner
withdrew the rejection under 35 U.S.C. § 103 of all pending claims 1, 2, 4,
5, 7, 8, 11-14, 16-18, and 20-24. Final Act. 21.
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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
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 of rubber products" (Diamond v. Diehr, 450 U.S. 175, 192
(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 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
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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).
"[M]erely requir[ing] generic computer implementation[] fail[ s] to transform
that abstract idea into a patent-eligible invention." Id.
USPTO January 7, 2019 Revised Section 1 OJ Memorandum
The USPTO recently published revised guidance on the application of
§ 101. See 2019 Revised Patent Subject Matter Eligibility Guidance, 84
Fed. Reg. 50 (Jan. 7, 2019) ("Memorandum"). This new guidance is applied
in this opinion. Under the 2019 Memorandum guidance, we first look to
whether the claim recites:
(1) any judicial exceptions, including certain groupings of abstract
ideas (i.e., mathematical concepts, mental processes, or certain methods of
organizing human activity such as a fundamental economic practice or
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managing personal behavior or relationships or interactions between
people); 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)). 3 84 Fed. Reg. at 51-52, 55.
A claim that integrates a judicial exception into a practical application
applies, relies on, or uses 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 judicial exception. 84 Fed. Reg.
at 54. When the judicial exception is so integrated, then the claim is not
directed to a judicial exception and is patent-eligible under§ 101. 84 Fed.
Reg. at 54.
Only if a claim: (1) recites a judicial exception, and (2) does not
integrate that exception into a practical application, do we then evaluate
whether the claim provides an inventive concept. 84 Fed. Reg. at 56; Alice,
134 S. Ct. at 2350, 2355. For example, we 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, and conventional
activities previously known to the industry, specified at a high level of
generality, to the judicial exception. 84 Fed. Reg. at 56.
Because there is no single definition of an "abstract idea" under Alice
step 1, the PTO has recently synthesized, for purposes of clarity,
3 The references to the MPEP are to the Ninth Edition, Revision 08-2017
(rev. Jan. 2018).
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predictability, and consistency, key concepts identified by the courts as
abstract ideas to explain that the "abstract idea" exception includes the
following three groupings:
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 or interactions
between people (including social activities, teaching, and
following rules or instructions).
According to the Memorandum, "claims 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), if "the claim as a whole integrates the recited judicial exception into a
practical application of that judicial exception." "Integration 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 Memorandum, 84 Fed. Reg. at 53.
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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 Memorandum, 84 Fed. Reg. at 54--55 ("Prong Two").
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The Examiner's Rejection under 35 U.S.C. § 101
The Examiner concludes under Memorandum (1 ): Claims 1, 2, 4, 5,
7, 8, 11-14, 16-18, and 20-24 are directed to a judicial exception:
the claims are directed to optimizing invoice matching which is
considered to be an abstract idea inasmuch as such activity is
considered a method of organizing human activity similar to the
concept of using an algorithm for determining the optimal
number of visits by a business representative to a client which
the courts found abstract (In re Maucorps), mathematical
relationships/formulas such as concepts related to performing
mathematical calculations similar to reducing the amount of
calculations in known and established computations
(FuzzySharp) and using an algorithm for determining the
optimal number of visits by a business representative to a client
which the courts found abstract (In re Maucorps) and abstract
ideas of themselves similar to the concept of collecting and
comparing known information which the courts found abstract
in Classen Immunotherapies Inc. v. Biogen IDEC, obtaining
and comparing intangible data which the courts found abstract
in Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366,
1372 (Fed. Cir. 2011), comparing new and stored information
and using rules to identify options which the courts found
abstract in SmartGene Inc. v. Advanced Biological Labs., [4]
using categories to organize, store and transmit information
which the courts found abstract in Cyberfone Systems, LLC v.
CNN Interactive Group, Inc., 558 Fed. Appx. 988, 993 (Fed.
4 The Examiner is referring to SmartGene, Inc. v. Advanced Biological
Laboratories, SA, 555 F. App'x 950, 955 (Fed. Cir. 2014) ("Whatever the
boundaries of the 'abstract ideas' category, the claim at issue here involves a
mental process excluded from section 101: the mental steps of comparing
new and stored information and using rules to identify medical options.") In
SmartGene, step (c) of Advanced Biological Laboratories' claim 1 recites:
"generating in said computing device advisory information for one or more
therapeutic treatment regimens in said ranked listing based on said patient
information and said expert rules." Id. at 952. (nonprecedential).
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Cir. 2014) [5] and data recognition and storage which the courts
found abstract in Content Extraction and Transmission LLC v.
Wells Fargo Bank, NA., 776 F.3d 1343, 1358-59 (Fed. Cir.
2014).
Final Act. 4.
The Examiner further concludes: "a human being could carry out the
mental steps of gathering invoices (invoice data), comparing the
information/ data contained in these invoices to any number of parameters
desired and based on which category each invoice ended up, initiate some
type of response/resolution." Final Act. 5.
Regarding Memorandum (2), the Examiner finds the claims do not
include additional elements that amount to significantly more than the
judicial exception, because:
18. The steps of the process are performed by a generic
computing device comprising a processor executing a computer
program coupled to memory and a database to carry out the
abstract idea.
19. The elements of the instant process, when taken alone, each
execute in a manner routinely and conventionally expected of
these elements. For instance[,] functions such as "receiving,
initiates, defining, calculating, determining and adjusting" are
conventional functions of a computing system suitably
programmed. The elements of the instant process, when taken in
combination, together do not offer substantially more than the
sum of the functions of the elements when each is taken alone.
Final Act. 10.
5 The Examiner is referring to Cyberfone Systems, LLC v. CNN Interactive
Group, Inc., 558 Fed. Appx. 988, 993 (Fed. Cir. 2014) (nonprecedential)
(receiving or transmitting data over a network, e.g., using the Internet to
gather data, is abstract).
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Regarding Memorandum (3 and 4, i.e., the "Berkheimer" issues
discussed further infra):
The Examiner finds:
That is, the elements involved in the recited process undertake
their roles in performance of their activities according to their
generic functionalities which are well-understood, routine and
conventional. The elements together execute in routinely and
conventionally accepted coordinated manners and interact with
their partner elements to achieve an overall outcome which,
similarly, is merely the combined and coordinated execution of
generic computer functionalities which are well-understood,
routine and conventional activities previously known to the
industry.
Final Act. 10-11 ( emphasis added).
The Examiner additionally finds:
The claims merely amount to the application or instructions to
apply the abstract idea (i.e.[,] optimizing invoice matching) on
one or more computers, and is considered to amount to nothing
more than requiring a generic computer system (e.g.[,]
processing units suitably programmed and coupled to memory
and a database) to merely carry out the abstract idea itself. As
such, the claims, when considered as a whole, are nothing more
than the instruction to implement the abstract idea (i.e.[,]
optimizing invoice matching) in a particular, albeit [in a] well-
understood, routine and conventional technological
environment.
Final Act. 15.
For the aforementioned reasons, the Examiner concludes that all
claims 1, 2, 4, 5, 7, 8, 11-14, 16-18, and 20-24 on appeal are not patent
eligible under 35 U.S.C. § 101.
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Under the revised USPTO January 7, 2019 Section 101 policy
Memorandum, we consider the following points of law:
Memorandum (1 ): Are the claims directed to any judicial exceptions,
including certain groupings of abstract ideas (i.e., mathematical concepts,
certain methods of organizing human interactions such as a fundamental
economic practice, or mental processes)?
Regarding Memorandum ( 1 ), our view is that the Examiner did not err
in concluding that each of claims 1, 2, 4, 5, 7, 8, 11-14, 16-18, and 20-24
on appeal is directed at least to the abstract idea of "optimizing invoice
matching which is considered to be an abstract idea inasmuch as such
activity is considered a method of organizing human activity similar to the
concept[ s ]" used in the Examiner's list of cited case authorities. Final
Act. 4. See also Final Act. 13 "Furthermore, paying an invoice is a
fundamental economic practice and a method of organizing human activity
similar to creating a contractual relationship which the courts found abstract
in buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014)."
( emphasis added).
We note the preamble of claim 1 is expressly directed to
"automatically optimiz[ing] a configurable invoice matching engine" which
we conclude is directed to a certain method of organizing human behavior,
i.e., a fundamental economic practice. To the extent Appellants advance
arguments regarding Alice step one, which also fall under Memorandum (2)
(covering MPEP §§ 2106.05(a)-(c) and (e)-(h)), we address these arguments
infra.
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Relevant Argued Court Decisions
We do not find persuasive Appellants' attempt to analogize the claims
to the subject claims considered by the court in McRO, Inc. v. Bandai
Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016). App. Br. 15-
18.
We note the subject claim considered by the McRO court concerned a
method for automatically animating lip synchronization and facial
expressions. McRO, 837 F.3d at 1303. The McRO court concluded the
subject claims did not recite an abstract idea because the computer animation
improved the prior art through the use of rules, rather than artists, to set
morph weights and transitions between phonemes. Id. at 1308. Thus, the
claimed invention in McRO allowed for computer performance of animation
steps that previously had to be performed by human animators. Id. at 1309.
The subject claims in McRO used "limited rules in a process specifically
designed to achieve an improved technological result" over "existing,
manual 3-D animation techniques." Id. at 1316 (emphasis added).
Here, Appellants' claimed invention does not apply positively recited
rules, per se. The invention under appeal merely adapts to a technological
setting ( e.g., comprising generic processors, memory, and a database) the
broad concept of "adjusting the current set of invoice matching tolerance
parameters to the optimal set of invoice matching tolerance parameters."
See independent claim 1, and independent claims 13 and 1 7, which recite
similar language of commensurate scope.
Thus, it is our view that Appellants' claims merely implement generic
computer components to perform the recited functions. We emphasize that
McRO (837 F.3d at 1312) guides that "[t]he abstract idea exception prevents
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patenting a result where 'it matters not by what process or machinery the
result is accomplished.'" (Quoting O'Reilly v. Morse, 56 U.S. 62, 113
(1853)) (emphasis added).
Appellants' analogy to BASCOM 6 is similarly unavailing. App.
Br. 19. In support, Appellants urge that "the final Office Action admits that
the claims are allowable over the prior art, which means that all of the
pending claims recite an inventive concept per Step 2B, as discussed in
BASCOM." Id. (emphasis added). See supra, n.2 (the Examiner withdrew
the 35 U.S.C. § 103 rejection of all claims).
However, the Supreme Court guides: "[t]he 'novelty' of any element
or steps in a process, or even of the process itself, is of no relevance in
determining whether the subject matter of a claim falls within the § 101
categories of possibly patentable subject matter." Diehr, 450 U.S. at 188-89
( emphasis added). Our reviewing court further emphasizes that "[ e ]ligibility
and novelty are separate inquiries." Two-Way Media Ltd. v. Comcast Cable
Commc 'ns, LLC, 874 F.3d 1329, 1340 (Fed. Cir. 2017); see also Affinity
Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1263 (Fed. Cir. 2016)
(holding that "even assuming" that a particular claimed feature was novel
does not "avoid the problem of abstractness").
The Federal Circuit held in BASCOM that the claimed Internet content
filtering, which featured an implementation "versatile enough that it could
be adapted to many different users' preferences while also installed remotely
in a single location," expressed an inventive concept in "the non-
6 BASCOM Global Internet Servs. v. AT&T Mobility, LLC, 827 F.3d 1341
(Fed. Cir. 2016).
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conventional and non-generic arrangement of known, conventional pieces."
BASCOM, 827 F.3d at 1346, 1350.
Here, Appellants have not shown a non-conventional, non-generic
arrangement regarding the generic (known, conventional) processor,
memory, and database recited in system (apparatus) independent claim 17.
Therefore, we agree with the Examiner that "[t]he invention in
Bascom was a technological solution to a technological problem (using an
improved filtering technology rather than using conventional filtering
technology). Appellants' invention is a business solution to a problem
rooted in the abstract idea of optimizing invoice matching through the
collection, analysis and calculation of data." Ans. 6. As found by the
Examiner, we agree that Appellants' claims do "not involve any
improvements to another technology, technical field, or improvements to the
functioning of the computer itself as was seen in Bascom." Id.
Regarding Memorandum (2), and for the reasons which follow, we
conclude that Appellants' claims 1, 2, 4, 5, 7, 8, 11-14, 16-18, and 20-24
do not integrate the judicial exception into a practical application. See
MPEP §§ 2106.05(a)-(c) and (e)-(h).
We address these "practical application" MPEP sections seriatim:
MPEP § 2106.05(a) "Improvements to the Functioning of a Computer
or To Any Other Technology or Technical Field"
This section of the MPEP guides: "In determining patent eligibility,
examiners should consider whether the claim 'purport( s) to improve the
functioning of the computer itself' or 'any other technology or technical
field .... While improvements were evaluated in Alice Corp. as relevant to
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the search for an inventive concept (Step 2B), several decisions of the
Federal Circuit have also evaluated this consideration when determining
whether a claim was directed to an abstract idea (Step 2A)."
The MPEP instructs: "Thus, an [E]xaminer may evaluate whether a
claim contains an improvement to the functioning of a computer or to any
other technology or technical field at Step 2A or Step 2B, as well as when
considering whether the claim has such self-evident eligibility that it
qualifies for the streamlined analysis." MPEP § 2106.05(a) (emphasis
added).
Appellants appear to argue that the claims on appeal provide an
improvement in computer-related technology similar to the subject lip
animation claims the McRO court held were patent eligible. We have found
these arguments unpersuasive for the reasons discussed above.
In reviewing the record, we find the claims on appeal are silent
regarding specific limitations directed to an improved computer system,
processor, memory, network, database, or Internet. Therefore, we find
Appellants' claimed invention does not provide a solution "necessarily
rooted in computer technology in order to overcome a problem specifically
arising in the realm of computer networks," such as considered by the court
in DDR Holdings LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir.
2014) (emphasis added).
MPEP § 2106.05(b) Particular Machine, and
MPEP § 2106.05(c) Particular Transformation
At the outset, we note that the Bilski machine-or-transformation test is
only applicable to the method (process) claims on appeal.
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Section 2106.05(c) of the MPEP guides: "Another consideration
when determining whether a claim recites significantly more is whether the
claim effects a transformation or reduction of a particular article to a
different state or thing." "' [T]ransformation and reduction of an article 'to a
different state or thing' is the clue to patentability of a process claim that
does not include particular machines."' Bilski v. Kappas, 561 U.S. 593, 658
(2010) (quoting Gottschalkv. Benson, 409 U.S. 63, 70, 175 (1972)). If such
a transformation exists, the claims are likely to be significantly more than
any recited judicial exception. Bilski emphasizes that although the
transformation of an article is an important clue, it is not a stand-alone test
for eligibility. MPEP § 2106.05( c ).
However, regarding any purported transformation of data performed
by Appellants' claims, our reviewing court guides: "[t]he mere
manipulation or reorganization of data, however, does not satisfy the
transformation prong." CyberSource, 654 F.3d at 1375. Therefore, we
conclude Appellants' computer-implemented method claims 13, 14, 16, 21,
and 23 fail to satisfy the transformation prong of the Bilski machine-or-
transformation test. See MPEP § 2106.05( c) "Particular Transformation."
Nor do Appellants argue that the method claims on appeal are tied to a
particular machine. See MPEP § 2106.05(b) "Particular Machine."
Arguments not made are waived. See 37 C.F.R. § 4I.37(c)(l)(iv).
MPEP § 2106.05(e) Other Meaningful Limitations
This section of the MPEP guides:
Diamond v. Diehr provides an example of a claim that recited
meaningful limitations beyond generally linking the use of the
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judicial exception to a particular technological environment.
450 U.S. 175,209 USPQ 1 (1981). In Diehr, the claim was
directed to the use of the Arrhenius equation ( an abstract idea or
law of nature) in an automated process for operating a rubber-
molding press. 450 U.S. at 177-78, 209 USPQ at 4. The Court
evaluated additional elements such as the steps of installing
rubber in a press, closing the mold, constantly measuring the
temperature in the mold, and automatically opening the press at
the proper time, and found them to be meaningful because they
sufficiently limited the use of the mathematical equation to the
practical application of molding rubber products. 450 U.S. at
184, 187, 209 USPQ at 7, 8. In contrast, the claims in Alice
Corp. v. CLS Bank International did not meaningfully limit the
abstract idea of mitigating settlement risk. 573 U.S. 134 S. Ct.
2347, 110 USPQ2d 1976 (2014). In particular, the Court
concluded that the additional elements such as the data
processing system and communications controllers recited in
the system claims did not meaningfully limit the abstract idea
because they merely linked the use of the abstract idea to a
particular technological environment (i.e., "implementation via
computers") or were well-understood, routine, conventional
activity.
MPEP § 2106.05(e).
The Examiner concludes that "there are no meaningful limitations in
the claims that transform the judicial exception into a patent eligible
application such that the claims amount to significantly more than the
judicial exception itself." Final Act. 15 (emphasis added). In the Appeal
and Reply Briefs, Appellants advance no persuasive arguments substantively
addressing the Examiner specific legal conclusion. Id.
MPEP § 2106.05(!) Mere Instructions To Apply An Exception
For the reasons discussed above, we conclude Appellants' claims
invoke generic computer components merely as a tool in which the computer
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instructions apply the judicial exception (i.e., a fundamental economic
practice - "adjusting the current set of invoice matching tolerance
parameters to the optimal set of invoice matching tolerance parameters" -
claim 1, which we conclude is a certain method of organizing human
behavior, i.e., a fundamental economic practice. We again note the
preamble of claim 1 is expressly directed to "automatically optimiz[ing] a
configurable invoice matching engine," which reinforces our view that the
claim considered as a whole is directed to a fundamental economic practice.
MP EP § 2106. 05 (g) Insignificant Extra-Solution Activity
We conclude that "receiving a set of historical invoice matching data
that comprises invoices" ( claim 1) is a step of data gathering. Data
gathering, as performed by the steps or function in Appellants' claims, is a
classic example of insignificant extra-solution activity. See, e.g., In re
Bilski, 545 F.3d 943,963 (Fed. Cir. 2008) (en bane), aff'd sub nom, Bilski v.
Kappas, 561 U.S. 593 (2010).
The Supreme Court guides that the "prohibition against patenting
abstract ideas 'cannot be circumvented by attempting to limit the use of the
formula to a particular technological environment' or [by] adding
'insignificant postsolution activity."' Bilski, 561 U.S. at 610-11 (quoting
Diehr, 450 U.S. at 191-92). On this record, we are of the view that
Appellants' claims do not operate the recited generic computer components
in an unconventional manner to achieve an improvement in computer
functionality.
Further regarding the use of the recited generic computer, processor(s)
and database, the Supreme Court has held "the mere recitation of a generic
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computer cannot transform a patent-ineligible abstract idea into a patent-
eligible invention." Alice, at 223. Our reviewing court provides additional
guidance: See FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089,
1096 (Fed. Cir. 2016) ("[T]he use of generic computer elements like a
microprocessor or user interface do not alone transform an otherwise
abstract idea into patent-eligible subject matter."); OIP Techs., Inc. v.
Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (claims reciting,
inter alia, sending messages over a network, gathering statistics, using a
computerized system to automatically determine an estimated outcome, and
presenting offers to potential customers found to merely recite "'well-
understood, routine conventional activit[ies ]'" by either requiring
conventional computer activities or routine data-gathering steps (internal
citation omitted)); see also Elec. Power Grp., 830 F.3d at 1355 ("We have
repeatedly held that such invocations of computers and networks that are not
even arguably inventive are 'insufficient to pass the test of an inventive
concept in the application' of an abstract idea." ( quoting buySAFE, Inc. v.
Google, Inc., 765 F.3d at 1355))); Intellectual Ventures I LLC v. Capital One
Fin. Corp., 850 F.3d 1332, 1341 (Fed. Cir. 2017) ("Rather, the claims recite
both a generic computer element-a processor-and a series of generic
computer 'components' that merely restate their individual functions ....
That is to say, they merely describe the functions of the abstract idea itself,
without particularity. This is simply not enough under step two.").
MPEP § 2106.05(h) Field of Use and Technological Environment
Appellants submit that the claims recite a particular way to achieve a
desired outcome, i.e., automatically optimizing a configurable invoice
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matching engine, that clearly does not preempt other approaches that use
different parameters or different techniques. App. Br. 17-18.
In response, the Examiner further explains the basis for the rejection:
preemption is not a stand-alone test. Preemption concerns have
been addressed by the [E]xaminer through the application of the
two-step framework. Appellant's attempt to argue alternative
uses of the abstract idea outside the scope of the claims does
not change the conclusion that the claims are directed to patent
ineligible subject matter. Similarly, Appellant's attempt to show
that the recited abstract idea is a very narrow and specific one is
not persuasive. A specific abstract idea is still an abstract idea
and is not eligible for patent protection without significantly
more elements recited in the claim.
Ans. 4.
We find Appellants' contentions (App. Br. 17-18) unavailing
because: "[T]he Supreme Court has stated that, even if a claim does not
wholly preempt an abstract idea, it still will not be limited meaningfully if it
contains only insignificant or token pre- or post-solution activity-such as
identifying a relevant audience, a category of use,field of use, or
technological environment." Ultramercial Inc. v. Hulu LLC, 722 F.3d 1335,
1346 (Fed. Cir. 2013) (citations omitted) (emphasis added).
For at least the aforementioned reasons, we are not persuaded the
Examiner erred in concluding that each of claims 1, 2, 4, 5, 7, 8, 11-14,
16-18, and 20-24 on appeal is directed at least to the abstract idea of
"optimizing invoice matching" which is considered to be a method of
organizing human activity that we conclude is a fundamental economic
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practice, that could additionally be performed as mental steps. 7 See Final
Act. 5.
Accordingly, for the reasons discussed above, we conclude
Appellants' claims do not include additional elements that integrate the
judicial exception into a practical application (see MPEP §§ 2106.05(a}-
( c ), ( e }-(h), as discussed above).
Only if a claim (1) recites a judicial exception, and (2) does not
integrate that exception into a practical application, do we then look
(Memorandum (3)) to whether the claim:
adds a specific limitation beyond the judicial exception that is not
"well-understood, routine, conventional" in the field (see MPEP
§ 2106.05(d)); or
Memorandum (4), simply appends well-understood, routine,
conventional activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
The Examiner finds:
the elements involved in the recited process undertake their
roles in performance of their activities according to their
generic functionalities which are well-understood, routine and
7 Our reviewing court guides: "a method that can be performed by human
thought alone is merely an abstract idea and is not patent-eligible under§
101." CyberSource, 654 F.3d at 1373. See also Synopsys, Inc. v. Mentor
Graphics Corp., 839 F.3d 1138, 1146-47 (Fed. Cir. 2016) ("While the
Supreme Court has altered the § 101 analysis since Cy her Source in cases
like Mayo and Alice, we continue to 'treat[] analyzing information by steps
people go through in their minds, or by mathematical algorithms, without
more, as essentially mental processes within the abstract-idea category."'
(brackets in original) ( quoting Elec. Power Grp. LLC v. Alstom S.A., 830
F.3d 1350, 1354 (Fed. Cir. 2016)).
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conventional. The elements together execute in routinely and
conventionally accepted coordinated manners and interact with
their partner elements to achieve an overall outcome which,
similarly, is merely the combined and coordinated execution of
generic computer functionalities which are well-understood,
routine and conventional activities previously known to the
industry. 8
Final Act. 10-11 ( emphasis added).
We note the Examiner provides in the record a list of computer
functions and a corresponding list of case authorities to support the findings
that the listed generic computer functions are well-understood, routine, and
convention (WURC) functions. Final Act. 11-14. We also note the
Examiner's Final Action (Oct. 31, 2016) was mailed before Berkheimer v.
HP Inc. (881 F.3d 1360 (Fed. Cir. 2018)) was decided on February 8, 2018.
Nevertheless, we find the Examiner presciently provided factual
evidence that complies with the USPTO April 19, 2018 Berkheimer
Memorandum, entitled "'Changes in Examination Procedure Pertaining to
Subject Matter Eligibility, Recent Subject Matter Eligibility Decision
(Berkheimer v. HP, Inc.)"' ("USPTO Berkheimer Memorandum").
See Berkheimer fact type 2: "A citation to one or more of the court
decisions discussed in MPEP § 2106.0S(d)(II) as noting the well-understood,
routine, conventional nature of the additional element(s)." USPTO
Berkheimer Memorandum 4.
8 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, 8 81
F.3d at 1368.
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Moreover, Appellants' Specification (i1 15) describes the use of
generic computer components:
Processor 22 may be any type of general or specific purpose
processor. System 10 further includes a memory 14 for storing
information and instructions to be executed by processor 22.
Memory 14 can be comprised of any combination of random
access memory ("RAM"), read only memory ("ROM"), static
storage such as a magnetic or optical disk, or any other type of
machine or computer-readable medium. System 10 further
includes a communication device 20, such as a network
interface card or other communications interface, to provide
access to a network. As a result, a user may interface with
system 10 directly, or remotely through a network or any other
method.
Spec. ,r 15 ( emphasis added).
Appellants have not substantively and persuasively traversed the
Examiner's findings in the Appeal Brief or in the Reply Brief. In reviewing
the record, we recognize that Appellants did not have the opportunity to
argue Berkheimer in support of their appeal, until after Berkheimer was
decided by the Federal Circuit on February 8, 2018, which occurred over
five months after the Reply Brief was filed on August 16, 2017. Because
Berkheimer (881 F.3d at 1369) and the USPTO Berkheimer Memorandum
are intervening authorities, we note that Appellants will be permitted to
argue any new issues related to Berkheimer in a Request for Rehearing,
under our procedural rule. See 37 C.F.R. § 41.52(a)(2)("Appellant may
present a new argument based upon a recent relevant decision of either the
Board or a Federal Court.").
However, on the record before us, Appellants have not shown that the
claims on appeal add a specific limitation beyond the judicial exception that
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is not "well-understood, routine, conventional" in the field (see MPEP
§ 2106.05(d)).
In light of the foregoing, we conclude, under the USPTO Revised 101
Guidance (Memorandum), that each of Appellants' claims 1, 2, 4, 5, 7, 8,
11-14, 16-18, and 20-24, considered as a whole, is directed to a patent-
ineligible abstract idea that is not integrated into a practical application.
Accordingly, for the reasons discussed above, we sustain the
Examiner's rejection under 35 U.S.C. § 101 of claims 1, 2, 4, 5, 7, 8, 11-14,
16-18, and 20-24. 9
Reply Brief
To the extent Appellants may advance new arguments in the Reply
Brief not in response to a shift in the Examiner's position in the Answer, we
note arguments raised in a Reply Brief that were not raised in the Appeal
Brief or are not responsive to arguments raised in the Examiner's Answer
will not be considered except for good cause. See 37 C.F.R. § 4I.41(b)(2).
CONCLUSION
The Examiner did not err in rejecting claims 1, 2, 4, 5, 7, 8, 11-14,
16-18, and 20-24 under 35 U.S.C. § 101, as being directed to a judicial
exception, without significantly more.
9 To the extent Appellants have not advanced separate, substantive
arguments for particular claims, or other issues, such arguments are waived.
See 37 C.F.R. § 4I.37(c)(l)(iv).
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DECISION
We affirm the Examiner's decision rejecting claims 1, 2, 4, 5, 7, 8,
11-14, 16-18, and 20-24 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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