Kevin WangDownload PDFPatent Trials and Appeals BoardMar 18, 20212020005868 (P.T.A.B. Mar. 18, 2021) 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. 14/967,301 12/12/2015 Kevin Sunlin Wang 10235-3 2381 22442 7590 03/18/2021 Sheridan Ross PC 1560 Broadway Suite 1200 Denver, CO 80202 EXAMINER FADOK, MARK A ART UNIT PAPER NUMBER 3625 NOTIFICATION DATE DELIVERY MODE 03/18/2021 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): e-docket@sheridanross.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte KEVIN SUNLIN WANG ____________ Appeal 2020-005868 Application 14/967,301 Technology Center 3600 ____________ Before BIBHU R. MOHANTY, BRADLEY B. BAYAT, and TARA L. HUTCHINGS, Administrative Patent Judges. BAYAT, Administrative Patent Judge. DECISION ON APPEAL Kevin S. Wang (Appellant)1 appeals pursuant to 35 U.S.C. § 134(a) from the decision rejecting claims 1 and 119–147, which constitute all pending claims before us for review,2 under 35 U.S.C. § 101 as being directed to an abstract idea without significantly more. We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. 1 We use the term “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42. Appellant identifies the real party in interest as “Bynfor Inc.” Appeal Br. 2. 2 Claims 2–118 are canceled. Appeal Br. 22, Claims App. Appeal 2020-005868 Application 14/967,301 2 STATEMENT OF THE CASE Invention Appellant’s “disclosure relates to auctions and, more specifically, to a method and system for sealed bidding in online auctions.” Spec. ¶ 2. The Abstract section of the disclosure describes the invention as a system and method for sealed bid auctions through the implementation of computer device, wherein an auction includes sealed bids, assigning random IDs for undisclosed real IDs, and obtaining double confirmation from both bidders and vendors. Vendors may choose to have a reserve price such as an open reserve price and a conditional hidden reserve price. The system generates random bidder IDs and allows the bidders to self-determine into two different bidding categories, where one bidding category pays the full winning bid amount and the other bidding category purchases a “price-protection policy” that allows the recalculation of the final winning bid amount based on the “price-protection formula”, wherein the “price-protection formula” is calculated as a sum of the “price-protection fee”, the second-highest bid amount, and the amount from a pre-determined percentage of a difference between the highest bid amount and a second-highest bid amount. Claimed Subject Matter System claim 1 and method claim 133 recite substantially similar subject matter. Claim 133, reproduced below with added emphases, is representative of the subject matter on appeal. 133. A computer-implemented method for an online sealed bid auction, comprising: transferring for display, on one or more computing devices associated with one or more bidders, respectively, at least a portion of data related to an auction subject for the online sealed bid auction; receiving, by a server, one or more sets of bid data from the one or more computing devices, respectively, wherein each of the one or more sets of bid data comprises a bid amount; Appeal 2020-005868 Application 14/967,301 3 receiving one or more sets of commitment data, wherein each set of commitment data comprises a commitment to pay a committed amount for adjusting a winning bid amount upon winning the online sealed bid auction; automatically storing, on the server, the one or more sets of bid data and the one or more sets of commitment data; automatically transferring for display, on the one or more computing devices, a first representation of the online sealed bid auction comprising one or more different identifiers corresponding to the one or more sets of bid data, respectively; responsive to a closing of the online sealed bid auction: determining a highest bid amount as the winning bid amount for a winning bidder and a second highest bid amount based on the one or more sets of bid data; and responsive to the winning bid amount being associated with at least one of the one or more sets of commitment data comprising a respective committed amount: automatically re-calculating the winning bid amount for the winning bidder based on at least a portion of data related to the highest bid amount, the second highest bid amount, and the respective committed amount; and transferring for display, on the one or more computing devices, a second representation of the auction comprising data related to the winning payment amount or the winning bid amount; and transferring for display, on the one or more computing devices, additional data related to allocation of at least a portion of the respective committed amount to the one of more bidders or a vendor. OPINION 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 35 U.S.C. § 101 to include an implicit exception: “[l]aws of nature, natural Appeal 2020-005868 Application 14/967,301 4 phenomena, and abstract ideas” are not patentable. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (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 (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., 573 U.S. at 217. 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.” Id. (quoting Mayo, 566 U.S. at 78, 79). This is “a search for an ‘inventive concept’ — i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’” Id. at 217–18 (alteration in original) (citation omitted). In rejecting claims 1 and 119–147 as directed to an abstract idea without significantly more, the Examiner evaluated the claims under the Alice framework and the 2019 Revised Guidance.3 Final Act. 9–39. 3 The U.S. Patent and Trademark Office (“USPTO”) published revised guidance for use by USPTO personnel in evaluating subject matter eligibility under 35 U.S.C. § 101. 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50 (Jan. 7, 2019) (the “2019 Revised Appeal 2020-005868 Application 14/967,301 5 Appellant argues all claims as a group. Appeal Br. 6–19. We select claim 133 as representative of the group, with claims 1, 119–132, and 134–147 standing or falling therewith. 37 C.F.R. § 41.37(c)(1)(iv)(2019). Statutory Categories under § 101 To determine subject matter eligibility under 35 U.S.C. § 101, the Examiner first determines if claim 133 falls into one of the four statutory categories of invention: processes, machines, manufactures, or composition of matter. See MPEP § 2106.03. The Examiner determines, and we agree, that claim 133 is directed to a process, which is a proper statutory category of invention under § 101. See Final Act. 10. We now turn to the two step Alice framework. Step One of the Alice Framework (2019 Revised Guidance, Step 2A) Step 2A, Prong One The first step in the Alice framework is to determine whether the claim at issue is “directed to” a patent-ineligible concept, e.g., an abstract idea. Alice Corp., 573 U.S. at 217. This first step, as set forth in the 2019 Revised Guidance (i.e., Step 2A), consists of a two-prong test. Prong One of Step 2A involves whether the claim recites a judicial exception, e.g., one of the following three groupings of abstract ideas: (1) mathematical concepts; (2) certain methods of organizing human activity (e.g., fundamental Guidance”). That guidance revised the USPTO’s examination procedure with respect to the first step of the Alice framework by (1) “[p]roviding groupings of subject matter that [are] considered an abstract idea”; and (2) “clarifying that a claim is not ‘directed to’ a judicial exception if the judicial exception is integrated into a practical application of that exception.” Id. at 50. The 2019 Revised Guidance has been incorporated into the MPEP, particularly sections 2103 through 2106.07(c). Appeal 2020-005868 Application 14/967,301 6 economic principles or practices, commercial or legal interactions); and (3) mental processes. 2019 Revised Guidance, 84 Fed. Reg. at 54. Claim 133 is drawn to a method for a sealed bid auction and recites, in part, the steps of: receiving bid data; receiving commitment data; determining a highest bid amount as the winning bid amount for a winning bidder and a second highest bid amount based on the bid data in response to a closing time of the auction; and responsive to the winning bid amount being associated with commitment data comprising a respective committed amount: re-calculating the winning bid amount for the winning bidder based on at least a portion of data related to the highest bid amount, the second highest bid amount, and the respective committed amount. As discussed above, Appellant’s scheme for conducting a sealed bid auction allows bidders to self-determine into two different bidding categories, where one bidding category pays the full winning bid amount and the other bidding category purchases a price-protection policy by committing to pay an amount for adjusting a winning bid amount that allows the recalculation of the winning bid amount based on the highest bid amount, the second-highest bid amount, and committed amount. Spec. Abstract. Under the broadest reasonable interpretation and consistent with Appellant’s disclosure, the Examiner determines, and we agree, that the steps of claim 133 (not italicized) as a whole describe “the abstract idea of [l]imiting risk in an auction by offering a Bid Protection policy,” which is a fundamental economic practice. Final Act. 9; see also Ans. 4 (The concept of “limiting risk in an auction by offering a bid protection policy is considered a bidders benefit that limits the risk of the user through the purchase of the commitment (policy) that optimizes the vendor-bidder Appeal 2020-005868 Application 14/967,301 7 benefit.”). Appellant’s scheme is akin to Alice’s “mitigat[ion] of settlement risk” and “risk hedging in Bilski.” Final Act. 11; see also 2019 Revised Guidance, 84 Fed. Reg. at 52 (Concepts related to managing relationships or transactions between people, or satisfying or avoiding a legal obligation is also an enumerated method of organizing human activity.). The Examiner also explains that the abstract idea recited here is also not meaningfully different from the idea found to be abstract in BuySAFE, Inc. v. Google Inc., 765 F.3d. 1350 (Fed. Cir. 2014), which “limits risk of both buyer and seller during a transaction (the auction being a form of transaction) and binds a transaction to a set of rules that have been agreed to upon the ending of the transaction.” Ans. 4. Under Step 2A, Prong One, Appellant argues that the rejections fails to identify “any courts’ decision in which the concept” characterized by the Examiner “was found to be an abstract idea.” Appeal Br. 7. This argument is without merit because the Examiner is not required to identify the exact abstract idea in a prior court decision. Since the Alice case, courts have been ‘‘compar[ing] claims at issue to those claims already found to be directed to an abstract idea in previous cases.’’ See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. 2016); see also Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016) (‘‘[T]he decisional mechanism courts now apply [to identify an abstract idea] is to examine earlier cases in which a similar or parallel descriptive nature can be seen—what prior cases were about, and which way they were decided.’’). As discussed, the Examiner compares Appellant’s claim with at least three prior court decisions, which Appellant appears to merely distinguish literally from their parallel descriptive abstract concepts. See Reply Br. 3. It Appeal 2020-005868 Application 14/967,301 8 is well-established that “fundamental economic practice[s] long prevalent in our system of commerce” are abstract ideas. Alice Corp., 573 U.S. at 219– 220. In Alice and Bilski, the Supreme Court found hedging financial risk and intermediated settlement qualified as fundamental economic practices. Id. In BuySAFE, the Federal Circuit built on these precedents and found transaction performance guarantees are abstract ideas. BuySAFE, 765 F.3d at 1355. Similar to BuySafe, receiving a commitment or consideration creates a contractual relationship as part of the sealed bid auction providing “mitigation of risks related to online auctions and optimization of vendor-bidder benefits.” Spec. ¶ 39. And, re-calculating the winning bid amount to be paid based on that respective commitment and other criteria is a simple mathematical calculation (see Spec. ¶¶ 74–85; see also Appeal Br. 8 (“If the winning bid is $500 and the commitment amount is $10, after recalculation, the winning bidder may end up paying more or less than the original winning bid of $500 – let’s say $525 or $490 is the recalculated winning bid amount, which depends on the highest bid amount, the second highest bid amount, and the commitment amount.”)) that can practically be performed in the human mind, which is a mental process and an abstract idea. 2019 Revised Guidance, 84 Fed. Reg. at 52 (“Mental processes—concepts performed in the human mind (including an observation, evaluation, judgment, opinion).”). Appellant acknowledges “that the present invention is directed to ‘mitigating risks related to online sealed bid auctions and the optimization of vendor-bidder benefits,’” yet contends that this “is significantly more than simply limiting risk in an auction.” Appeal Br. 7. Appellant argues that the Appeal 2020-005868 Application 14/967,301 9 Examiner “has not properly considered the novel features of the claimed invention, which provide a technical solution to a technical problem.” Id. According to Appellant, those three novel features include: (1) “receive a commitment to pay a committed amount for adjusting the winning bid amount upon winning the reverse auction”; (2) recalculate the winning bid amount for the winning bidder based on at least a portion of data related to the winning bid amount, the second bid amount, and the respective committed amount; and” (3) “allocate at least a portion of the respective committed amount to the one or more bidders.” Id. We are unpersuaded at least because this argument is more appropriately considered at the second step of the Alice test and under Prong Two of Step 2A, in evaluating whether the abstract idea is integrated into a practical application. To the extent Appellant is arguing that the invention must claim an auction with no variation to be related to the abstract idea of an auction, we disagree. The inquiry at this first prong is whether the claim at issue recites an abstract idea. We must consider if the claim before us is drawn to the concept of an auction, as the Court in Alice determined that those claims were drawn to the concept of intermediated settlement. A variation on the abstract idea does not necessarily render the claim non- abstract. BuySAFE, 765 F.3d at 1355 (The “narrowing of [a] long-familiar commercial transaction[] does not make the idea non-abstract for section 101 purposes”). Putting aside the implementation of the steps by a computer or server and in an online environment, not only are auctions extensively discussed in the Specification, claim 133 also substantively describes steps for carrying out an auction: receiving bids; receiving a commitment amount for adjusting Appeal 2020-005868 Application 14/967,301 10 a winning bid amount upon winning the sealed bid auction; upon closing of the auction: determining a highest bid amount as the winning bid amount and a second highest bid amount based on the bids; and responsive to the winning bid amount being associated with a committed amount: re- calculating the winning bid amount to be paid. Receiving a price-protection fee as consideration and re-calculating the winning bid based in part on the fee, which Appellant alleges are novel features, do not make the mitigation of risks related to sealed bid auctions any less abstract. And, the allocation feature recited as part of the display step, which Appellant indicates as the third novel feature, is identified by the Examiner as an additional element considered under Prong Two. For these reasons, we are not persuaded the Examiner erred in determining that claim 133 recites an abstract idea. Step 2A, Prong Two Having concluded that claim 133 recites a judicial exception, i.e. an abstract idea (Step 2A, Prong One), the Examiner next considers whether the claim recites additional elements that integrate the judicial exception into a practical application (Step 2A, Prong Two). 2019 Revised Guidance, 84 Fed. Reg. at 51. When a claim recites a judicial exception and fails to integrate the exception into a practical application, the claim is “directed to” the judicial exception. Id. A claim may integrate the judicial exception when, for example, it reflects an improvement to technology or a technical field. Id. at 55. The Federal Circuit has explained that “the ‘directed to’ inquiry applies a stage-one filter to claims, considered in light of the specification, based on whether ‘their character as a whole is directed to excluded subject Appeal 2020-005868 Application 14/967,301 11 matter.’” Enfish, 822 F.3d at 1335 (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 13133, 1346 (Fed. Cir. 2015)). In the context of computer-implemented inventions, the court has clarified that a relevant inquiry is “to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea.” Id. The court contrasted claims “directed to an improvement in the functioning of a computer” with claims “simply adding conventional computer components to well-known business practices,” or claims reciting “use of an abstract mathematical formula on any general purpose computer,” or “a purely conventional computer implementation of a mathematical formula,” or “generalized steps to be performed on a computer using conventional computer activity.” Id. at 1338. Under Step 2A, Prong Two, the Examiner determines that the additional elements recited in claim 133 (italics) include: “transferring for display” steps, “storing” step, “computing devices,” and a “server.” Final Act. 16–19. According to the Examiner, these additional elements do not reflect “an improvement to the functionality of a computer or other technology or technical field” and fail to integrate the abstract idea into a practical application. Id. at 21. As discussed above, Appellant similarly argues that “[t]he rejection does not provide reasoning or explanation as to why the Three Novel Features of the present invention are not considered additional limitations.” Appeal Br. 13; see also Reply Br. 5–6. According to Appellant: “Since the Three Novel Features recalculates the winning bid amount to a different amount, it is obvious that the Three Novel Features put additional or meaningful limitations on a traditional or conventional auction.” Id. at 13. Appeal 2020-005868 Application 14/967,301 12 This argument is unpersuasive, in part, because the first two features Appellant relies upon are part of the abstract idea but the evaluation under Prong Two of Step 2A is whether the additional elements integrate the judicial exception into a practical application. 2019 Revised Guidance, 84 Fed. Reg. at 51. The third allocation feature Appellant relies upon is recited in claim 133 as “transferring for display, on the one or more computing devices, additional data related to allocation of at least a portion of the respective committed amount to the one of more bidders or a vendor.” The transferring of data (e.g., allocation data) for display is described in the Specification as performed by any generic “computing device known in the art.” Spec. 66 (“Each of the bidder computing devices (300) may also have a display (304) and be any computing device known in the art. For example, a smartphone, tablet, personal computer or any other computing device.”). As such, the “transferring for display” steps merely invoke generic computing devices as tools to present information to a user, rather than reflecting an improvement in computer functionality. See Interval Licensing LLC v. AOL, Inc., 896 F.3d 1335, 1344–45 (Fed. Cir. 2018) (Instructions to display two sets of information on a computer display in a non-interfering manner, without any limitations specifying how to achieve the desired result, is insufficient to show an improvement in computer functionality.). We recognize that “[s]oftware can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route.” Enfish, 822 F.3d at 1335. However, “to be directed to a patent-eligible improvement to computer functionality, the claims must be directed to an improvement to the functionality of the computer or network platform itself.” Customedia Appeal 2020-005868 Application 14/967,301 13 Techs., LLC v. Dish Network Corp., 951 F.3d 1359, 1365 (Fed. Cir. 2020) (citing Enfish, 822 F.3d at 1336–39). Claim 133 recites generic computing components (i.e., computing devices and a server) arranged in no particular way to perform standard functions of transferring for display, receiving, storing, determining, and calculating without improving computers or networks. The Specification’s description of these components makes clear that they are generic components that do not improve the functioning of a computer or other technology, and which are used as tools in their ordinary capacity to implement the abstract idea. See, e.g., Spec. ¶¶ 66, 79–83, Figs. 1A, 1B, 3, 4. When considered as a whole, claim 133 fails to integrate the recited abstract idea into a practical application because the additional elements fail to apply or use the judicial exception in some meaningful way beyond generally linking the use of the judicial exception to a particular technological environment. Accordingly, claim 133 is directed to a judicial exception. Step Two of the Alice Framework (2019 Revised Guidance, Step 2B) The Examiner next considers whether claim 133 recites additional elements, individually, or as an ordered combination, that provide an inventive concept. Alice Corp., 573 U.S. at 217–18. The second step of the Alice test is satisfied when the claim limitations involve more than performance of well-understood, routine, and conventional activities previously known to the industry. Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018). The Examiner finds that claim 133 lacks additional elements that are sufficient to amount to significantly more than the judicial exception. Final Act. 35–39. The Examiner finds the Specification shows the use of Appeal 2020-005868 Application 14/967,301 14 conventional computer components in a known technological environment (i.e., Internet) that perform well-understood, routine, or conventional functions, which amount to no more than generally linking the use of the judicial exception to the particular technological environment. Id. at 37–38. Appellant argues that the “Three Novel Features” discussed above are “by no means ‘generic computer functions’ because no computer has performed them previously. Appeal Br. 15. We disagree. The “commitment” and “allocation” features of “receiving, by the auction server, one or more set of commitment data” and “transferring for display, on the one or more remote computing devices” are each described in the Specification as being performed by generic and conventional computing components. See, e.g., Spec. ¶ 66 (“Each of the bidder computing devices (300) may also have a display (304) and be any computing device known in the art.”); ¶ 79 (“Examples of well-known computing systems, environments, and/or configurations that may be suitable for use with the invention include, but are not limited to, personal computers, server computers, hand-held, laptop or mobile computer or communications devices such as cell phones and PDA’s” etc.), ¶ 81 (“The software components may, generally, be implemented in hardware, if desired, using conventional techniques.”). And, it is well-established by now, “[t]hat a computer receives and sends the information over a network—with no further specification—is not even arguably inventive.” BuySAFE, 765 F.3d at 1355; In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011) (Absent a possible narrower construction of the terms processing, receiving, and storing functions can be achieved by any general purpose computer without special programming.). Appeal 2020-005868 Application 14/967,301 15 The “automatically re-calculating” feature of processing data and carrying out mathematical calculations, as discussed above, represent the most basic function of any computer. The Federal Circuit has recognized that “an invocation of already-available computers that are not themselves plausibly asserted to be an advance, for use in carrying out improved mathematical calculations, amounts to a recitation of what is ‘well- understood, routine, [and] conventional.”’ SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1170 (alteration in original) (citing Mayo, 566 U.S. at 73). Simply appending well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception fails to qualify as “significantly more.” Alice Corp., 573 U.S. at 225. As an ordered combination, the additional elements provide no more than when they are considered individually. Alice, 573 U.S. at 225. They recite generic computer components that perform well-understood and conventional functions. They are used as tools to implement the judicial exception. See SAP Am., 898 F.3d at 1169–70 (limitations of various databases and processors did not improve computers but used already available computers and available functions as tools to execute the claimed process); Inventor Holdings LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017) (considering the method steps of the representative claims as an “ordered combination” reveals that they “amount to ‘nothing significantly more’ than an instruction to apply [an] abstract idea” using generic computer technology). Thus, we agree with the Examiner that claim 133 lacks an inventive concept sufficient to transform the abstract idea into patent-eligible subject matter. Appeal 2020-005868 Application 14/967,301 16 We have considered Appellant’s remaining arguments, but we find them unpersuasive. Accordingly, we sustain the rejection of independent claim 133 as directed to a judicial exception without significantly more, and claims 1, 119–132, and 134–147, which fall with claim 133. CONCLUSION The rejection under 35 U.S.C. § 101 is affirmed. DECISION SUMMARY Claims Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 1, 119–147 101 Eligibility 1, 119–147 TIME PERIOD FOR RESPONSE No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv). AFFIRMED Copy with citationCopy as parenthetical citation