Lawrence M. Ausubel et al.Download PDFPatent Trials and Appeals BoardAug 20, 201913843338 - (D) (P.T.A.B. Aug. 20, 2019) 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. 13/843,338 03/15/2013 Lawrence M. Ausubel 0601.1010 8214 49455 7590 08/20/2019 STEIN IP, LLC 1990 M STREET, NW SUITE 610 WASHINGTON, DC 20036 EXAMINER SMITH, LINDSEY B ART UNIT PAPER NUMBER 3625 NOTIFICATION DATE DELIVERY MODE 08/20/2019 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): docketing@steinip.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte LAWRENCE M. AUSUBEL and OLEG V. BARANOV1 ____________ Appeal 2018-003291 Application 13/843,338 Technology Center 3600 ____________ Before MURRIEL E. CRAWFORD, JOSEPH A. FISCHETTI, and NINA L. MEDLOCK, Administrative Patent Judges. CRAWFORD, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Appellants seek our review under 35 U.S.C. § 134 of the Examiner’s final rejection of claims 1–51. We have jurisdiction under 35 U.S.C. § 6(b). Appellants appeared for oral hearing on August 8, 2019. SUMMARY OF DECISION We AFFIRM. THE INVENTION Appellants claim a computer-implemented auction and, more particularly, a computer-implemented auction that includes elements of clock auctions and/or combinatorial auctions. (Spec. ¶ 4, Title). 1 According to Appellants, the real party in interest is Efficient Auctions LLC. Appeal 2018-003291 Application 13/843,338 2 Claim 1 is representative of the subject matter on appeal. 1. A computer system for conducting an auction of a plurality of types of items among a plurality of bidders, said system comprising: receiving means for determining whether to continue the auction based on the received bids; constraining means for constraining bids that are employed by said deteremining means, said constraining means for constraining bids with an activity rule so that a bid will only be accepted which, when taken together with the bidder’s prior bids, reveals a consistent set of objectives; and pricing means for calculating one bidder’s guaranteed winning value associated with a package of the plurality of types of items and outputting said one bidder’s guaranteed winning value, said one bidder’s guaranteed winning value based upon the bids of other bidders than said one bidder and the activity rule applied to the other bidders by said constraining means. THE REJECTION Claims 1–51 are rejected under 35 U.S.C. § 101. Claims 1, 10, and 19 are rejected under 35 U.S.C. § 103(a) as unpatentable over Ausubel et al. (US 2004/0054551 A1, pub. Mar. 18, 2004) (“Ausubel 2004”) and Ausubel (US 2006/0167787 A1, pub. July 27, 2006) (“Ausubel 2006”). Appeal 2018-003291 Application 13/843,338 3 ANALYSIS 35 U.S.C. § 101 REJECTION We will sustain the rejection of claims 1–16, 18–19, and 22 under 35 U.S.C. § 101. The Supreme Court set forth a framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts. First, . . . determine whether the claims at issue are directed to one of those patent-ineligible concepts. . . . If so, . . . then ask, “[w]hat else is there in the claims before us?” . . . To answer that question, . . . consider the elements of each claim both individually and “as an ordered combination” to determine whether the additional elements “transform the nature of the claim” into a patent-eligible application. . . . [The Court] described step two of this analysis as 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.” Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014) (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72–73 (2012)) (citations omitted). To perform this test, we must first determine whether the claims at issue are directed to a patent-ineligible concept. The Federal Circuit has explained that “the ‘directed to’ inquiry applies a stage-one filter to claims, considered in light of the [S]pecification, based on whether ‘their character as a whole is directed to excluded subject matter.’” See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). It asks whether the Appeal 2018-003291 Application 13/843,338 4 focus of the claims is on a specific improvement in relevant technology or on a process that itself qualifies as an “abstract idea” for which computers are invoked merely as a tool. See id. at 1335–36. In so doing we apply a “directed to” two prong test: 1) evaluate whether the claim recites a judicial exception, and 2) if the claim recites a judicial exception, evaluate whether the judicial exception is integrated into a practical application. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 FR 50, 57 (Jan. 7, 2019) (“Guidance”). The Examiner determines that the claims are directed to conducting an auction and providing an opportunity for parties to enter into a contractual relationship, which the Examiner determines to be a fundamental economic practice. (Final Act. 6–7; Ans. 7). The Examiner also determines that conducting an auction encompasses conducting an auction of a plurality of types of items. (Ans. 7). The Examiner also determines that the claims are directed to automating tasks that can be performed mentally or with pen and paper, including concepts relating to performing mathematical concepts such as mathematical algorithms, mathematical relationships, mathematical formulas and calculations such as “constraining bids” with an activity rule and “calculating” one bidder’s guaranteed winning value. (Ans. 10). The Examiner finds the claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception. The Examiner further finds that claim 1 recites generic computer components that perform functions of receiving data, performing a calculation, modifying data and calculating a value which are well- understood, routine and conventional activities previously known to the industry. (Final Act. 7). The Examiner concludes that these additional Appeal 2018-003291 Application 13/843,338 5 elements, taken alone, do not amount to significantly more than the abstract idea and as an ordered combination the elements add nothing that is not already present when looking at the elements individually. (Final Act. 7). The Specification describes the invention as providing improvements applicable to auctions. In a first set of embodiments, the present invention is an improved activity rule that constrains the bids that may be submitted by a bidder, based on the bidder’s own prior bids. Such activity rules tend to reduce the possibilities for strategic behavior in the auction and improve the quality of information reported throughout the auction, thereby potentially improving the auction’s performance. In a second set of embodiments, the present invention is an improved pricing rule that appropriately discounts the amounts (as compared to linear pricing) of bids that need to be submitted by a bidder. Such pricing rules reduce the need for bidders to submit unnecessarily high bids, thereby potentially improving the auction’s performance, particularly when bidders are budget-constrained. (Spec. ¶ 14). As such, the Specification supports the Examiner’s determination that the claims are directed to conducting an auction and providing an opportunity for parties to enter into a contractual relationship. Claim 1 also supports this determination by reciting “a computer system for conducting an auction of a plurality of types of items,” “receiving means for receiving bids,” “determining means for determining whether to continue the auction,” “constraining means constraining bids,” and “pricing means for calculating one bidders guaranteed winning value.” As such, the steps of claim 1 relate to steps performed in conducting an auction. In addition, the steps of claim 1 are related to receiving data (bids), processing data (determining whether to continue auction, constraining bids and Appeal 2018-003291 Application 13/843,338 6 calculating a winning value) and therefore the steps of claim 1 support the Examiner’s determination that the steps recite automating tasks that can be performed mentally or with pen and paper including concepts relating to performing mathematical concepts. In this regard, the steps of receiving bids, determining whether to continue an auction, constraining bids and calculating a winning value can be performed in the human mind or with a pen and paper using a mathematical operation. We thus agree with the Examiner’s determination that claim 1 recites steps performed to conduct an auction. We determine more specifically that claim 1 recites steps performed to conduct an auction of a plurality of types of items. Conducting an auction of a plurality of types of items is a fundamental economic practice and a mental process. Guidance, 84 Fed. Reg. at 52. The various steps recited in claim 1, which are performed to conduct an auction, relate to a commercial interaction and a sales activity and are therefore recitations of a method of organizing human activity. The steps also relate to evaluation and judgment i.e. whether to continue an auction and determining which bids are accepted and therefore are steps that constitute “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.” Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016); see also buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (claims directed to certain arrangements involving contractual relations are directed to abstract ideas). Turning to the second prong of the “directed to test,” claim 1 merely Appeal 2018-003291 Application 13/843,338 7 requires a “computer system.” The recitation of the words “computer system” does not impose “a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.” Guidance, 84 Fed. Reg. at _53___. We find no indication in the Specification, nor do Appellants direct us to any indication, that the operations recited in independent claim 1 invoke any inventive programming, require any specialized computer hardware or other inventive computer components, i.e., a particular machine, or that the claimed invention is implemented using other than generic computer components to perform generic computer functions. See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (“[A]fter Alice, there can remain no doubt: recitation of generic computer limitations does not make an otherwise ineligible claim patent-eligible.”). We also find no indication in the Specification that the claimed invention effects a transformation or reduction of a particular article to a different state or thing. Nor do we find anything of record, short of attorney argument, that attributes any improvement in computer technology and/or functionality to the claimed invention or that otherwise indicates that the claimed invention integrates the abstract idea into a “practical application,” as that phrase is used in the revised Guidance. See Guidance, 84 Fed. Reg. at 55. In this regard, the Specification discloses that the computer system claimed may be any device that contains a processor and has the capability of connecting to other processors via a communication system, including but not limited to a smart phone, an iPhone, an iPad, an Android device, a Windows device, a Blackberry, a PDA, or a facsimile machine. (Spec. ¶44). Appeal 2018-003291 Application 13/843,338 8 The network used, if any, can be any system capable of providing the necessary communication to/from a Bidding Information Processor (BIP), a Bidding Terminal (BT), and an Auctioneer’s Terminal (AT). The network may be a local or wide area network such as, for example, Ethernet, token ring, the Internet, the World Wide Web, the information superhighway, an intranet or a virtual private network, or alternatively a telephone system, either private or public, a facsimile system, an electronic mail system, or a wireless communications system, or combinations of the foregoing. (Spec. ¶45). As such, the Specification supports the finding that the claims do not include an improvement to the computer system or network used to practice the steps of claim 1. Thus, claim 1 recites judicial exceptions that are not integrated into a practical application and thus claim 1 is directed to an “abstract idea.” Turning to the second step of the Alice analysis, because we find that the claims are directed to abstract ideas, the claims must include an “inventive concept” in order to be patent-eligible, i.e., there must be an element or combination of elements that is sufficient to ensure that the claim in practice amounts to significantly more than the abstract idea itself. See Alice, 134 S. Ct. at 2355 (alteration in original) (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72–73 (2012)). The introduction of a computer system into the claims does not alter the analysis at Alice step two. [T]he mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent- eligible invention. Stating an abstract idea “while adding the words ‘apply it’” is not enough for patent eligibility. Nor is limiting the use of an abstract idea “‘to a particular technological environment.’” Stating an abstract idea Appeal 2018-003291 Application 13/843,338 9 while adding the words “apply it with a computer” simply combines those two steps, with the same deficient result. Thus, if 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. This conclusion accords with the preemption concern that undergirds our § 101 jurisprudence. Given the ubiquity of computers, wholly generic computer implementation is not generally the sort of “additional featur[e]” that provides any “practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.” Alice, 134 S. Ct. at 2358 (alterations in original) (citations omitted). Instead, “the relevant question is whether the claims here do more than simply instruct the practitioner to implement the abstract idea . . . on a generic computer.” Id. at 2359. They do not. Taking the claim elements separately, the function performed by the computer at each step of the process is purely conventional. Using a computer to retrieve, select, and apply decision criteria to data and modify the data as a result amounts to electronic data query and retrieval—one of the most basic functions of a computer. All of these computer functions are well-understood, routine, conventional activities previously known to the trading industry. See Elec. Power Grp., 830 F.3d at 1354; see also 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,’ . . . those functions can be achieved by any general purpose computer without special programming”). In short, each step does no more than require a generic computer to perform generic computer functions. As to the data operated upon, “even if a process of collecting and analyzing information is ‘limited to particular content’ or a Appeal 2018-003291 Application 13/843,338 10 particular ‘source,’ that limitation does not make the collection and analysis other than abstract.” SAP Am. Inc. v. InvestPic, LLC, 898 F.3d 1161, 1168 (Fed. Cir. 2018). Considered as an ordered combination, the computer components of Appellants’ claims add nothing that is not already present when the steps are considered separately. The claims do not, for example, purport to improve the functioning of the computer itself. As we stated above, the claims do not effect an improvement in any other technology or technical field. The Specification spells out different generic equipment and parameters that might be applied using this concept and the particular steps such conventional processing would entail based on the concept of information access under different scenarios. (See, e.g., Spec. ¶¶ 44, 45). Thus, the claims at issue amount to nothing significantly more than instructions to apply the abstract idea using some unspecified, generic computer. Under our precedents, that is not enough to transform an abstract idea into a patent-eligible invention. See Alice, 134 S. Ct. at 2360. We have reviewed all the arguments (Appeal Br. 13–26; Reply Br. 3– 10). Appellants have submitted concerning the patent eligibility of the claims before us that stand rejected under 35 U.S.C. § 101. We find that our analysis above substantially covers the substance of all the arguments, which have been made. But, for purposes of completeness, we will address various arguments in order to make individual rebuttals of same. We are not persuaded of error on the part of the Examiner by Appellants’ argument that the claims are not directed to a long standing fundamental economic practice because auctions for plural types of items Appeal 2018-003291 Application 13/843,338 11 are much more recent and novel. (Appeal Br. 10). In addition, Appellants argue that the constraining means and the pricing means are novel and enable an auction with a new feature. (Id. at 12). Appellants also argue that the invention finds a novel way to circumvent the “missing bids” problem. (Id.). To the extent Appellants maintain that the limitations of claim 1 necessarily amount to “significantly more” than an abstract idea because the claimed apparatus is allegedly patentable over the prior art, Appellants misapprehend the controlling precedent. Although the second step in the Alice/Mayo framework is termed a search for an “inventive concept,” the analysis is not an evaluation of novelty or non-obviousness, but rather, a search for “‘an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.”’ Alice, 134 S. Ct. at 2355. A novel and nonobvious claim directed to a purely abstract idea is, nonetheless, patent- ineligible. See Mayo, 132 S. Ct. at 1304. To the extent that the Appellants are arguing that the steps of claim 1 related to plural types of items are a recitation of significantly more because it was not known to conduct an auction of plural types of items, these recitations are part of the abstract idea itself. Appellants argue that claim 1 recites significantly more because, according to the Ausubel I declaration, when 100 or more items are offered for auction the number of possible packages of items may be astronomical and winner determination using today’s optimization software has a practical limit that cannot be solved in any practical length of time. (Appeal Br. 13). This argument is not persuasive because it is not commensurate in scope with the recitations of claim 1; claim 1 does not recite that 100 or more items Appeal 2018-003291 Application 13/843,338 12 are offered for sale but rather only recites that a plurality of types of items is offered and thereby is broad enough to cover just two types of items and just two items. We are not persuaded of error on the part of the Examiner by Appellants’ argument that the constraining means and the calculating a winning value are not well-understood, routine or conventional because these recitations are part of the abstract idea of conducting an auction for a plurality of types of items. The determination of whether elements in claim 1 are well-understood, routine and conventional relates to the recitions that are in addition to the abstract idea. Guidance, 84 Fed. Reg. at 57. We are not persuaded of error on the part of the Examiner by Appellants’ argument made at oral argument that the rejection of the Examiner is not supported by evidence as required by Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018). As we discussed above, the Specification at paragraphs 44–45 discloses that generic computer components are used to perform the invention thereby providing intrinsic evidence that the computer system recited is well-understood, conventional and routine. In view of the foregoing, we will sustain the Examiner’s rejection of claim 1 under 35 U.S.C. § 101. We will also sustain the rejection as it is directed to the remaining claims because Appellants have not argued the separate eligibility of these claims. REJECTION UNDER 35 U.S.C. § 103(a) We will not sustain this rejection because we agree with Appellants that Ausubel 2006 does not disclose calculating a guaranteed winning value. Appeal 2018-003291 Application 13/843,338 13 The portions of Ausubel relied on by the Examiner (paragraphs 36–45) relate to calculating a quantity vector not a winning value. CONCLUSIONS OF LAW We conclude the Examiner did not err in rejecting claims 1–51 under 35 U.S.C. § 101. We conclude the Examiner did err in rejecting claims 1, 10, and 19 under 35 U.S.C. ¶ 103(a). DECISION The decision of the Examiner to reject claims 1–51 under 35 U.S.C. § 101 is affirmed. The decision of the Examiner to rejection claims 1, 10, and 19 under 35 U.S.C. § 103(a) is not 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). See 37 C.F.R. § 1.136(a)(1)(iv). AFFIRMED Copy with citationCopy as parenthetical citation