Ex Parte Vasavada et alDownload PDFPatent Trial and Appeal BoardDec 13, 201714228949 (P.T.A.B. Dec. 13, 2017) Copy Citation United States Patent and Trademark Office 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 APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO. 14/228,949 03/28/2014 Maulin Vasavada 2043.877US2 4642 49845 7590 12/15/2017 SCHWEGMAN LUNDBERG & WOESSNER/EBAY P.O. BOX 2938 MINNEAPOLIS, MN 55402 EXAMINER CHANG, EDWARD ART UNIT PAPER NUMBER 3696 NOTIFICATION DATE DELIVERY MODE 12/15/2017 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): USPTO@SLWIP.COM SLW @blackhillsip.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte MAULIN VASAVADA, PRAKASH MUPPIRALA, MOHAN JAYAPAL, and SANJAY NARANG (Applicant: EBAY INC.) Appeal 2016-005540 Application 14/228,949 Technology Center 3600 Before BRUCE R. WINSOR, JEREMY J. CURCURI, and AMBER L. HAGY, Administrative Patent Judges. HAGY, Administrative Patent Judge. DECISION ON APPEAL Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s Final Rejection of claims 1—20, which are all of the pending claims. We have jurisdiction over these claims under 35 U.S.C. § 6(b). We affirm. 1 References herein to the “Appellant” are to the applicant eBay Inc., who is also identified in the Appeal Brief as the real party-in-interest. (App. Br. 2.) Appeal 2016-005540 Application 14/228,949 STATEMENT OF THE CASE Introduction Appellant’s claimed invention relates to “a method and system for an automated processing of an insurance claim.” Spec. 12. Exemplary Claim Claims 1, 10, and 19 are independent. Claim 1, reproduced below, is exemplary of the claimed subject matter: 1. A system, comprising: a processor; and memory having stored thereon instructions that are executable by the processor to cause the system to: receive information associated with a transaction of an item; determine, based on a fraud rate associated with a shipping destination address of the transaction, whether to offer shipping insurance for the item; and in response to determining to offer shipping insurance and to receiving a request for the shipping insurance, causing a shipping insurance policy to be issued. REJECTION Claims 1—20 stand rejected under 35 U.S.C. § 101 as directed to non- statutory subject matter. (Final Act. 2—5.) ANALYSIS Under 35 U.S.C. § 101, an invention is patent-eligible if it claims a “new and useful process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101 2 Appeal 2016-005540 Application 14/228,949 to include an implicit exception: “[l]aws of nature, natural phenomena, and abstract ideas” are not patentable. See, e.g., Alice Corp. Pty. Ltd. v. CLS Banklnt’l, 134 S. Ct. 2347, 2354 (2014). The Supreme Court, in Alice, reiterated the two-step framework previously set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66, 75—77 (2012), “for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Alice Corp., 134 S. Ct. at 2355. The first step in that analysis is to “determine whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. If the claims are not directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry ends. Otherwise, the inquiry proceeds to the second step, where the elements of the claims are considered “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.” Alice Corp., 134 S. Ct. at 2355 (quoting Mayo, 566 U.S. at 78—79). The Court acknowledged in Mayo that “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Mayo, 566 U.S. at 71. Therefore, in applying the Alice framework, the Federal Circuit has instructed that claims are to be considered in their entirety to determine “whether their character as a whole is directed to excluded subject matter.” McRO, Inc. v. Bandai Namco Games Am., Inc., 837 F.3d 1299, 1312 (Fed. Cir. 2016) {quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). 3 Appeal 2016-005540 Application 14/228,949 A. Examiner’s Prima Facie Case Appellant maintains here that the § 101 rejection cannot be sustained because the Examiner has failed to provide evidence to support the finding that the claims are directed to a fundamental economic practice and the abstract idea of a method of organizing human activities and has, thus, failed to establish a prima face case of patent-ineligibility. (App. Br. 6—12.) More particularly, Appellant charges that the Examiner is required under the Administrative Procedure Act to provide substantial evidence to support a § 101 rejection. (Id. at 7—8.) Appellant further asserts that, unless the Examiner provides authoritative documentation, as Appellant contends the Supreme Court and Federal Circuit did in Alice, Bilski v. Kappos, 561 U.S. 593 (2010), and buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014) , the Examiner has not performed a proper analysis under § 101. (Id. at 9-10.) As an initial matter, we find nothing in Alice, Bilski, or buySAFE that requires the Office to identify specific references or provide “authoritative documentation” to support a finding that a claim is directed to an abstract idea. Nor, contrary to Appellant’s suggestion (see id. at 10-11), did this Board hold, in Ex parte Poisson, Appeal No. 2012-011084 (PTAB Feb. 27, 2015) (non-precedential), that there is any such requirement. Instead, the Federal Circuit has repeatedly noted that “the prima facie case is merely a procedural device that enables an appropriate shift of the burden of production.” Hyatt v. Dudas, 492 F.3d 1365, 1369 (Fed. Cir. 2007) (citing In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992)). The court has, thus, held that the Office carries its procedural burden of establishing a prima facie case when its rejection satisfies the requirements of 35 U.S.C. § 132 by 4 Appeal 2016-005540 Application 14/228,949 notifying the applicant of the reasons for rejection, “together with such information and references as may be useful in judging of the propriety of continuing the prosecution of [the] application.” See In re Jung, 637 F.3d 1356, 1362 (Fed. Cir. 2011). Put simply, all that is required of the Office is that it set forth the statutory basis of the rejection in a sufficiently articulate and informative manner as to meet the notice requirement of § 132. Id.', see also Chester v. Miller, 906 F.2d 1574, 1578 (Fed. Cir. 1990) (noting that section 132 “is violated when a rejection is so uninformative that it prevents the applicant from recognizing and seeking to counter the grounds for rejection”). Here, in rejecting the pending claims under § 101, the Examiner analyzed the claims using the Mayo/Alice two-step framework, consistent with the guidance set forth in the USPTO’s “2014 Interim Guidance on Patent Subject Matter Eligibility,” 79 Fed. Reg. 74618 (Dec. 16, 2014), in effect at the time the Final Office Action was mailed. Specifically, the Examiner notified Appellant that claims 1—20 are directed to “a fundamental economic practice and the abstract idea of a method of organizing human activities”; that this is an abstract idea; and that the claims do not include limitations that are “significantly more” than the abstract idea itself. (Final Act. 3-4). In so doing, the Examiner notified Appellant of the reasons for the rejection “together with such information and references as may be useful in judging of the propriety of continuing the prosecution of [the] application.” 35 U.S.C. § 132. We find, therefore, that the Examiner set forth a prima facie case of patent-ineligibility such that the burden of production then shifted to Appellant to demonstrate that the claims are patent-eligible. 5 Appeal 2016-005540 Application 14/228,949 B. Streamlined Analysis Appellant argues that the claims at issue “qualify for streamlined analysis” under the 2014 Interim Guidance because they “do[] not seek to tie up any judicial exception such that others cannot practice it.” (App. Br. 12— 13 (citing 14 Interim Guidance on Patent Subject Matter Eligibility, Fed. Reg. 79, 241, pp. 74618-24 (December 16, 2014)). In particular, Appellant argues that the pending claims “do not preempt the entire field of ‘allowing consumers to shop for and optionally purchase merchandise,’” and therefore, should be patentable under that streamlined analysis. (Id. at 13, 16 (citing Non-Final Office Action dated October 3, 2014); see also Final Act. 4.) We are not persuaded by Appellant’s arguments. We first note that the Guidance does not carry the force of law, Enzo Biochem, Inc. v. Gen-Probe Inc., 323 F.3d 956, 964 (Fed. Cir. 2002), as we must ensure we follow binding precedent in evaluating whether the Examiner erred in rejecting the claims as lacking patent-eligibility. Thus, even if the Examiner’s analysis is not consistent with the Guidance, that inconsistency is not of itself dispositive of Examiner error. Although the Supreme Court has described “the concern that drives this exclusionary principle [i.e., the exclusion of abstract ideas from patent eligible subject matter] as one of pre-emption,” Alice Corp., 134 S. Ct. at 2354, characterizing pre-emption as a driving concern for patent eligibility is not the same as characterizing pre-emption as the sole test for patent eligibility. “The Supreme Court has made clear that the principle of preemption is the basis for the judicial exceptions to patentability” and “[f]or this reason, questions on preemption are inherent in and resolved by the § 101 analysis.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 6 Appeal 2016-005540 Application 14/228,949 1379 (Fed. Cir. 2015) (citing Alice Corp., 134 S. Ct. at 2354). Although “preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility.” Id. Therefore, we are not persuaded the Examiner erred in not finding the claims patentable under a streamlined eligibility analysis. C. Application of Mayo/Alice Test 1. Step One: Whether the Claims Are Directed to a Patent-Ineligible Concept Addressing the first step of the Mayo/Alice analysis, Appellant asserts that determining whether a claim is directed to an abstract idea involves determining whether the claim is directed to (1) an idea of itself, e.g., an “algorithm” or “mathematical formula”; or (2) a “fundamental economic practice.” (App. Br. 13.) Arguing that “these two types of claims are the only types of claims that the Court has positively identified as being within the abstract ideas category” {id. (emphasis added)), Appellant insists that none of the pending claims is directed to either an idea of itself or a fundamental economic practice and, therefore, none of the claims is directed to an abstract idea. {Id. at 14—15.) Appellant acknowledges that the category of abstract ideas may “include some methods of organizing human activity” (App. Br. 14) and also notes that the Examiner takes the position that the claims are directed to an abstract idea by virtue of being directed to a method of organizing human activity {id. at 7 (citing Final Act. 3)). Appellant argues, however, that whether a claim is directed to a method of organizing human activity is not determinative of whether the claim is abstract. (App. Br. 15.) We agree with Appellant that the Court did not suggest in Alice that all methods of organizing human activities are directed to an abstract idea. (App. Br. 15.) 7 Appeal 2016-005540 Application 14/228,949 But neither did the Court hold that only claims directed to an “idea of itself’ or a “fundamental economic practice” are directed to an abstract idea. In addition, Appellant cannot reasonably deny, does it deny, that the Court, in Alice, referred to the concept of risk hedging (which the Court, in Bilski, identified as an abstract idea) as “a method of organizing human activity.” Alice Corp., 134 S. Ct. at 2356. Appellant nevertheless argues that the pending claims are not directed to a fundamental economic practice because the claimed activity has not been shown “to have been performed before” and thus cannot be “found to constitute a fundamental economic practice long prevalent in our system of commerce.” (App. Br. 15.) We disagree. First, the fact that the Examiner does not show Appellant’s claimed invention “to have been performed before” (such as through a prior- art rejection) does not inform us of error in the Examiner’s rejection under §101. Although the novelty of the claims is not before us, even if novel and nonobvious, a claim directed to a purely abstract idea is, nonetheless, patent- ineligible. See Mayo, 566 U.S. at 90. Thus, an abstract idea does not transform into an inventive concept just because the Examiner has not cited prior art that discloses or suggests it. Indeed, “[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.” Diamond v. Diehr, 450 U.S. 175, 188-189 (1981). Second, as the Examiner finds, and we agree, the series of steps that are performed in the claims for the purpose of “offering shipping insurance” involve particular behaviors that are “interpersonal activities” of “managing relationships or transactions between people, social activities, or behaviors,” 8 Appeal 2016-005540 Application 14/228,949 “satisfying or avoiding a legal obligation,” and “sales activities or behaviors,” which are “subcategories of activities that the precedential courts have found to be abstract idea under ‘certain methods of organizing human activity.’” (Ans. 5.) Indeed, what Appellant claims here (offering shipping insurance to mitigate a perceived risk of fraud) is a form of risk management in a commercial transaction, which has been recognized by the Supreme Court as a fundamental economic practice. E.g., Bilski v. Kappos, 561 U.S. 593 (2010) (method of entering into contracts to hedge risk in commodity prices); Alice, 134 S. Ct. at 2356 (methods and systems for “exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk”). The Court in both cases relied on the fact that the contractual relations at issue constituted “a fundamental economic practice long prevalent in our system of commerce.” Bilski, 561 U.S. at 611; Alice, 134 S. Ct. at 2356, 2357. Appellant, on the other hand, presents no persuasive argument or technical reasoning to explain why the pending claims are not directed to a method of organizing human activity that qualifies for treatment as an abstract idea. And, as noted above, we also are not persuaded of Examiner error by Appellant’s argument that the pending claims are patent-eligible because the claims do not preempt or otherwise tie up a judicial exception such that others cannot practice it. (App. Br. 15—17; see also id. at 20.) Because we agree with the Examiner, at step one of the Alice analysis, that the claims are directed to an abstract idea, we turn to the second step of the Alice analysis, in which we must determine whether the additional elements of the claims transform them into patent-eligible subject matter. 9 Appeal 2016-005540 Application 14/228,949 2. Step Two: Whether Additional Elements Transform The Idea Into Patent-Eligible Subject Matter Turning to the second step of the Mayo/Alice framework, Appellant presents several arguments, which we address in turn. (App. Br. 17—21.) Appellant first asserts that even if the claims are directed to an abstract idea, the claims are nonetheless directed to patent-eligible subject matter because the claims recite a “specially-configured computer.” (App. Br. 18.) Yet there is no indication in Appellant’s Specification that any specialized hardware is involved. To the contrary, the Specification describes the claimed hardware as part of a generic computer system. (Spec. 49-50.) Thus, this argument is not persuasive. Appellant further argues that claims are patent-eligible because the claimed steps are specified at a “low level of generality” and “are not purely conventional.” (App. Br. 18—19.) This argument is also not persuasive. Even if those statements were true, an abstract idea can generally be described at different levels of abstraction. That the claimed steps may be specified at a low level of generality is an insufficient basis for finding that the claims are not directed to an abstract idea. See Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240-1241 (Fed. Cir. 2016) (“An abstract idea can generally be described at different levels of abstraction. As the Board has done, the claimed abstract idea could be described as generating menus on a computer, or generating a second menu from a first menu and sending the second menu to another location. It could be described in other ways, including, as indicated in the specification, taking orders from restaurant customers on a computer.”). It also is insufficient, without more, that the functionality, i.e., the particular operations recited in the claims, e.g., “determin[ing], based on a 10 Appeal 2016-005540 Application 14/228,949 fraud rate associated with a shipping destination address of the transaction, whether to offer shipping insurance for the item,” as recited in claim 1, may not be routine or conventional, absent some indication that the claim elements are implemented using other than generic computer components. “[A]fter Alice, there can remain no doubt: recitation of generic computer limitations does not make an otherwise ineligible claim patent-eligible.” DDR Holdings, LLCv. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (citing Alice Corp., 134 S. Ct. at 2358)). Appellant further argues that the claims, when considered as “an ordered combination,” recite significantly more than an abstract idea. (App. Br. 19.) In particular, Appellant argues that the step of “causing a shipping insurance policy to be issued,” as cited in independent claim 1 and commensurately recited in independent claims 10 and 19, is significantly more than an alleged abstract idea. (Id.) We disagree. The claim limitation of actually issuing the shipping policy in response to an offer and an acceptance for the policy is merely part of the abstract idea itself, i.e., the fundamental economic practice of mitigating risk of fraud in ecommerce by providing shipping insurance. Appellant also argues the claims “purport to improve the functioning of the computer itself.” (App. Br. 20.) In particular, Appellant asserts that “the functioning of a computer is its degree of usefulness in aiding people in performing particular tasks,” and that determining whether to offer shipping insurance based on a “fraud rate associated with a shipping destination,” as claimed, improves “the functioning of the computer in performing tasks related to the issuance of shipping insurance.” (Id.) That argument is likewise unpersuasive. Even accepting Appellant’s argument, there is a 11 Appeal 2016-005540 Application 14/228,949 fundamental difference between computer functionality improvements, on the one hand, and uses of existing computers as tools to perform a particular task, on the other. Indeed, the Federal Circuit applied this distinction in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) in rejecting a § 101 challenge at the step one stage in the Alice analysis because the claims at issue focused on a specific type of data structure, i.e., a self- referential table for a computer database, designed to improve the way a computer carries out its basic functions of storing and retrieving data, and not on asserted advances in uses to which existing computer capabilities could be put. Id. at 1335-36. We find no parallel here between independent claims 1,10, and 19 and the claims in Enfish nor any comparable aspect in claims 1,10, and 19 that represents “an improvement to computer functionality.” The alleged advantages that Appellant touts do not concern an improvement to computer capabilities but instead relate to an alleged improvement in risk management in e-commerce by correlating a risk of fraud with a shipping destination and offering shipping insurance based on that risk—a process in which a computer is used as a tool in its ordinary capacity. Appellant further argues that the claims are directed to solving “a technological problem in conventional industry practice of, for example, automatically providing shipping insurance without incurring excessive risk due to fraud,” and that “[t]his is a problem rooted in computer technology and arising particularly in the realm of e-commerce and shipping.” (App. Br. 21.) Based on that premise, Appellant contends that the present case is similar to DDR Holdings. (Id.) But we find no parallel between the present claims and those at issue in DDR Holdings. 12 Appeal 2016-005540 Application 14/228,949 First, avoiding excessive risk due to fraud in e-commerce, as Appellant’s claimed invention purports to address, is not a technical problem; it is a business problem. And automatically correlating an option of shipping insurance with a higher perceived risk of fraud associated with a shipping destination is a commercial solution, not a technical solution. The only portion of the pending claims that could be considered “technological” is the generic computer hardware, i.e., the claimed “processor” used to implement the claimed invention, which is not enough to confer subject matter eligibility. See Alice Corp., 134 S. Ct. at 2358 (“[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.”) (internal citations omitted). In DDR Holdings, in contrast, the Federal Circuit determined that, although the patent claims at issue involved conventional computers and the Internet, the claims addressed a challenge particular to the Internet, i.e., retaining website visitors who, if adhering to the routine, conventional functioning of Internet hyperlink protocol, would be transported instantly away from a host’s website after “clicking” on an advertisement and activating a hyperlink. DDR Holdings, 773 F.3d at 1257. The Federal Circuit, thus, held that the claims were directed to statutory subject matter because they claimed a solution “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.” Id. No such technological advance is evident in the present invention. Unlike the situation in DDR Holdings, Appellant does not identify any problem particular to computer networks and/or the Internet that the claims 13 Appeal 2016-005540 Application 14/228,949 allegedly overcome. Instead, the claims merely employ generic computer components to perform generic computer functions, i.e., receiving and processing information. For the foregoing reasons, we are not persuaded the Examiner erred in rejecting independent claims 1, 10, and 19 under 35 U.S.C. § 101, or in rejecting on the same basis dependent claims 2, 4, 6—11, 13, and 15—20, which Appellant does not argue separately. (App. Br. 21.) D. Dependent Claims 3, 5, 12, and 14 Appellant argues dependent claims 3, 5, 12, and 14 separately. (App. Br. 22-23.) Claims 3 and 12, which depend from independent claims 1 and 10, respectively, recite “automatically and without human intervention file a claim based on the seller failing to lodge the claim within a predetermined period, via the electronic marketplace on which the transaction of the item occurred.” (App. Br. (Claims App’x).) Appellant argues, in essence, that because these claims are to be performed automatically instead of by a human being, they are not directed to an abstract idea. (Id. at 22.) We disagree. Claims 3 and 12, unlike claims found non-abstract in prior cases, merely employ generic computer technology to automate a step in a method of organizing human activity as recited in the base claims, and, as such, do not recite an improvement to a particular computer technology. Cf. McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314-15 (Fed. Cir. 2016) (finding claims not abstract because they “focused on a specific asserted improvement in computer animation”). Claims 3 and 12 are not directed to anything more technically specific than the base claims—for 14 Appeal 2016-005540 Application 14/228,949 example, they do not focus on or provide technical detail about structures that must be used to perform the claimed functions. Instead, the claims are directed to the high-level function of filing an insurance claim regarding an ecommerce transaction. Adding this step, even if automated using conventional computer technology, does not remove the focus of these claims from the abstract idea to which the underlying independent claims are directed. Claims 5 and 14, which depend from independent claims 1 and 10, respectively, recite “cause the system to provide a shipping label that incorporates information identifying the shipping insurance.” (App. Br. (Claims App’x).) Appellant argues that actually providing a shipping label “is a meaningful limitation that does not merely link the use of the alleged abstract idea to a particular technological environment.” {Id. at 23.) We disagree. The additional limitations added by claims 5 and 14 are merely generic recitations of part of the process of shipping an item with shipping insurance. As the Supreme Court has admonished, the prohibition against patenting an ineligible concept, such as an abstract idea, “‘cannot be circumvented by attempting to limit the use of the [abstract idea] to a particular technological environment’ or adding ‘insignificant postsolution activity.”’ Bilski, 561 U.S. at 610—11; see also Parker v. Flook, 437 U.S. 584, 588—90 (1978) (insignificant post-solution activity step found to be insufficient to impart patentability). Claims 5 and 14, which merely recite insignificant post-solution activity of providing a shipping label that identifies shipping insurance that was offered and accepted, do not recite a technological improvement in manufacturing devices or processes. 15 Appeal 2016-005540 Application 14/228,949 For the foregoing reasons, we are not persuaded of error in the Examiner’s § 101 rejection of dependent claims 3, 5, 12, and 14 and we, therefore, sustain that rejection. DECISION For the above reasons, the Examiner’s rejection of claims 1—20 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 16 Copy with citationCopy as parenthetical citation