Isaac Saft et al.

Patent Trials and Appeals Board

Sep 27, 2019

14272825 - (D) (P.T.A.B. Sep. 27, 2019)

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.
14/272,825 05/08/2014 Isaac SAFT VTXB P0014 1760
122066 7590 09/27/2019
M&B IP Analysts, LLC
500 Headquarters Plaza
Morristown, NJ 07960-7070
EXAMINER
MADAMBA, CLIFFORD B
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
09/27/2019 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):
eofficeaction@appcoll.com
michael.benshimon@gmail.com
pair@mb-ip.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte ISAAC SAFT and NOAM GUZMAN
____________________

Appeal 2018-008791
Application 14/272,8251
Technology Center 3600
____________________

Before ST. JOHN COURTENAY, III, MARC S. HOFF, and
KRISTEN L. DROESCH, Administrative Patent Judges.

HOFF, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134 from a Final Rejection of
claims 1–8, 10–18, 21, and 22.2 We have jurisdiction under 35 U.S.C.
§ 6(b).
We reverse.
Appellants’ invention is a method and system for predicting a
likelihood of success of a potential value-added tax (VAT) reclaim. The
method includes receiving at least one VAT receipt; analyzing, by a server,
the VAT receipt, including determining, via digital image recognition,

1 Appellants state that the real party in interest is Vatbox, Ltd. Appeal Br. 3.
2 Claims 9, 19, and 20 have been cancelled.
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information contained in the VAT receipt and whether a portion of the
receipt is obscured; retrieving at least one VAT success parameter, including
at least one obscurity success parameter; and determining the likelihood of
success of the potential VAT reclaim based on a computed success measure.
Abstract; Spec. ¶¶ 34, 39, 51–54.
Claim 1 is reproduced below:
1. A computerized method for predicting a likelihood of
success of a potential value-added tax (VAT) reclaim, comprising:
receiving, by a server including a digital image processor, at least one
VAT receipt;
analyzing, by the server, the at least one VAT receipt, wherein
the analysis includes at least determining, via digital image
recognition, information contained in the at least one VAT receipt and
whether a portion of each VAT receipt is obscured;
retrieving, based on the VAT receipt analysis, at least one VAT
success parameter, wherein the at least one VAT success parameter
includes at least one obscurity success parameter, wherein each
obscurity success parameter represents a relative obscurity of an
obscured portion with respect to one of the at least one VAT receipt;
computing a success measure using the at least one VAT
success parameter; and
determining, based on the computed success measure, the
likelihood of success of the potential VAT reclaim.

Claims 1–8, 10–18, 21, and 22 stand rejected under 35 U.S.C. § 101
as being directed to non-statutory subject matter.
Throughout this decision, we make reference to the Appeal Brief
(“App. Br.,” filed [Mar. 20, 2018]), the Reply Brief (“Reply Br.,” filed
[Sept. 12, 2018]), and the Examiner’s Answer (“Ans.,” mailed [July 12,
2018]) for their respective details.

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ISSUES
Does the claimed invention recite an abstract idea?
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. See, 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 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. Kappos, 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 (Gottschalk v. 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
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U.S. 175, 192 (1981)); “tanning, dyeing, making waterproof cloth,
vulcanizing India rubber, smelting ores” (id. at 184 n.7 (quoting Corning
v. Burden, 56 U.S. 252, 267–68 (1854))); 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 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 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 turn 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
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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. USPTO’s January 7, 2019 Memorandum, 2019 Revised Patent
Subject Matter Eligibility Guidance (“Memorandum”). 84 Fed. Reg. 50.
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 MPEP § 2106.05(a)–(c), (e)–(h)).
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
are not “well-understood, routine, conventional” in the field
(see MPEP § 2106.05(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.
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ANALYSIS
SECTION 101 REJECTION
With regard to subject matter eligibility, Appellants make a unitary
argument directed to all pending claims. App. Br. 6–9. Accordingly, we
select independent claim 1 as representative of the rejected claims.
Claim 1 recites the following limitations:
(a) receiving, by a server including a digital image processor, at least
one VAT receipt;
(b) analyzing, by the server, the at least one VAT receipt, wherein the
analysis includes at least determining, via digital image
recognition, information contained in the at least one VAT receipt
and whether a portion of such VAT receipt is obscured;
(c) retrieving, based on the VAT receipt analysis, at least one VAT
success parameter, wherein the at least one VAT success
parameter includes at least one obscurity success parameter,
wherein each obscurity success parameter represents a relative
obscurity of an obscured portion with respect to one of the at least
one VAT receipt;
(d) computing a success measure using the at least one VAT success
parameter; and
(e) determining, based on the computed success measure, the
likelihood of success of the potential VAT reclaim.
These limitations, under the broadest reasonable interpretation,
constitute a plurality of steps to receive a value added tax (VAT) receipt,
analyze it to determine whether a portion of the receipt is obscured, and
determine the likelihood of success of a potential VAT reclaim given said
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obscured portion. The claim limitations recite the operations that would
ordinarily be performed by a person giving an opinion concerning the
likelihood a VAT reclaim will succeed, combined with a recitation that
information is determined, by a server, via digital image recognition.
Limitation (a) corresponds to a person or entity receiving a receipt.
Limitations (b) and (c) correspond to examining the receipt and determining
whether any portion of the receipt is obscured, and to what extent it is
obscured. Limitations (d) and (e) correspond to calculation of the likelihood
that submission of the VAT receipt will result in customer reimbursement.
The Memorandum recognizes that certain groupings of subject matter
have been found by the courts to constitute judicially excepted abstract
ideas: (a) mathematical concepts, (b) certain methods of organizing human
activity, and (c) mental processes. Memorandum, 84 FR at 52. We regard
the claimed limitations of (1) examining a receipt and determining whether
any portion of the receipt is obscured, and to what extent it is obscured, (2)
computing a success measure using a VAT success parameter, and (3)
determining the likelihood of success of a potential VAT reclaim based on
that computed success measure, without more, to constitute a mental process
classified as an abstract idea under the Memorandum. Examining a receipt
to determine if any portions are obscured, and computing a score indicating
the likelihood one would be successful in pursuing a VAT reclaim, without
more, constitute concepts that could be performed in the human mind. If a
claim, under its broadest reasonable interpretation, covers performance in
the mind but for the recitation of generic computer components, then it is
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still in the mental processes category unless the claim cannot practically be
performed in the mind.3

3 See Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318
(Fed. Cir. 2016) (“[W]ith the exception of generic computer implemented
steps, there is nothing in the claims themselves that foreclose them from
being performed by a human, mentally or with pen and paper.”); Mortg.
Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d. 1314, 1324 (Fed.
Cir. 2016) (holding that computer-implemented method for “anonymous
loan shopping” was an abstract idea because it could be “performed by
humans without a computer”); Versata Dev. Grp. v. SAP Am., Inc., 793 F.3d
1306, 1335 (Fed. Cir. 2015) (“Courts have examined claims that required the
use of a computer and still found that the underlying, patent-ineligible
invention could be performed via pen and paper or in a person’s mind.”);
CyberSource Corp. v. Retail Decisions, Inc., 654
F.3d 1366, 1375, 1372 (Fed. Cir. 2011) (holding that the incidental use of
“computer” or “computer readable medium” does not make a claim
otherwise directed to process that “can be performed in the human mind, or
by a human using a pen and paper” patent eligible); id. at 1376
distinguishing Research Corp. Techs. v. Microsoft Corp., 627 F.3d 859
(Fed. Cir. 2010), and SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319
(Fed. Cir. 2010), as directed to inventions that “could not, as a practical
matter, be performed entirely in a human’s mind”). Mayo, 566 U.S. at 71
(“‘[M]ental processes[ ] and abstract intellectual concepts are not
patentable, as they are the basic tools of scientific and technological work’”
(quoting Benson, 409 U.S. at 67)); Flook, 437 U.S. at 589 (same); Benson,
409 U.S. at 67, 65 (noting that the claimed “conversion of [binary-coded
decimal] numerals to pure binary numerals can be done mentally,” i.e., “as a
person would do it by head and hand.”); Synopsys, Inc. v. Mentor Graphics
Corp., 839 F.3d 1138, 1139, (Fed. Cir. 2016) (holding that claims to the
mental process of “translating a functional description of a logic circuit into
a hardware component description of the logic circuit” are directed to an
abstract idea, because the claims “read on an individual performing the
claimed steps mentally or with pencil and paper”); In re BRCA1 & BRCA2-
Based Hereditary Cancer Test Patent Litig., 774 F.3d 755, 763 (Fed. Cir.
2014) (concluding that concept of “comparing BRCA sequences and
determining the existence of alterations” is an “abstract mental process”); In
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Appellants argue, however, that the claims require digital image
recognition and therefore cannot be performed in the human mind. Appeal
Br. 7. Appellants contend that the use of digital image recognition means
that likelihood of success is determined in a way that is distinct from any
mental process. According to Appellants, a customs official could
subjectively evaluate the relative obscurity of a VAT receipt, and assign a
likelihood of success, but such an evaluation “would naturally lead to
inconsistencies due to differences in determined likelihoods among customs
officials.” Appeal Br. 7–8 (emphasis added).
Appellants further argue that the distinction between the described
subjective mental process and the claimed process including digital image
recognition is analogous to the distinction between the subjective process
performed by human animators and the rules-based computational process at
issue in McRO Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed
Cir. 2016). The McRO court found that the invention at issue realized
computer animation by improving the prior art through “the use of rules,
rather than artists, to set the morph weights and transitions between
phonemes.” Id. at 1313. The court held that “the claimed improvement here
is allowing computers to produce ‘accurate and realistic lip synchronization

re Brown, 645 F. App’x. 1014, 1017 (Fed. Cir. 2016) (non-precedential)
(claim limitations “encompass the mere idea of applying
different known hair styles to balance one’s head. Identifying head shape
and applying hair designs accordingly is an abstract idea capable, as the
Board notes, of being performed entirely in one’s mind”).
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and facial expressions in animated characters” that previously could only be
produced by human animators. Id.
We agree with Appellants that the claimed requirement of analysis of
the VAT receipt by a server, including determining information contained in
the receipt and potential obscurity of the receipt via digital image
recognition, serves to remove the subjectivity that would be inherent in
having a human inspect a VAT receipt visually and come up with a
quantified likelihood of success. Appeal Br. 8. We agree with Appellants
that the recitation of digital image recognition, performed by a server, means
that the claimed invention cannot practically be performed in the mind.
Whether or not the claimed invention affirmatively recites “rules” in the
same way that McRO’s claimed invention recites rules, it is inherent in the
claimed invention that the server tasked with analyzing a digitally imaged
VAT receipt would follow pre-set rules in order to assign the value of the
claimed “obscurity success parameter.” Appellants disclose that “obscurity
is associated with a success parameter that varies depending on the area of
the VAT receipt that is obscured relative to the total receipt area and upon
the location of the obscurity relative to the rest of the receipt.” Spec. ¶ 54.
The McRO court concluded that, when looked at as a whole, the
claimed invention was “directed to a patented, technological improvement
over the existing, manual 3-D animation techniques.” McRO, 837 F.3d at
1316. The claimed invention was determined to use “the limited rules in a
process specifically designed to achieve an improved technological result in
conventional industry practice.” Id. Similarly, we determine that the
invention under appeal is directed, through the use of digital image
recognition, to a technological improvement over the subjective evaluation
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of VAT receipts. We thus determine, as in McRO, that the claims do not
recite an abstract idea.
SUBJECT MATTER ELIGIBILITY - CONCLUSION
Because we determine that the claims do not recite an abstract idea,
we need not proceed to consider whether any such abstract idea is integrated
into a practical application, or whether the claim recites additional elements
that constitute an inventive concept. We conclude that the Examiner erred in
rejecting the claims under 35 U.S.C. § 101. We do not sustain the
Examiner’s rejection of claims 1–8, 10–18, 21, and 22.

CONCLUSION
The claimed invention does not recite an abstract idea.

ORDER
The Examiner’s decision to reject claims 1–8, 10–18, 21, and 22
under 35 U.S.C. § 101 is reversed.
REVERSED