Mark Schwans et al.

Patent Trials and Appeals Board

Dec 17, 2019

14086206 - (D) (P.T.A.B. Dec. 17, 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.
14/086,206 11/21/2013 Mark SCHWANS ORA140162 (O-305) 1065
51444 7590 12/17/2019
Kraguljac Law Group/Oracle
4700 Rockside Road
Summit One, Suite 510
Independence, OH 44131
EXAMINER
STEWART, CRYSTOL
ART UNIT PAPER NUMBER
3624
NOTIFICATION DATE DELIVERY MODE
12/17/2019 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):
DDay@KragLaw.com
MPusti@KragLaw.com
PTOMail@KragLaw.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte MARK SCHWANS,
GERALD JOSEPH HANSON,
and RENJITH MOOLAYIL
____________

Appeal 2018–007149
Application 14/086,206
Technology Center 3600
____________

Before ANTON W. FETTING, BIBHU R. MOHANTY, and
TARA L. HUTCHINGS, Administrative Patent Judges.

FETTING, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE1

Mark Schwans, Gerald Joseph Hanson, and Renjith Moolayil
(Appellant) seeks review under 35 U.S.C. § 134 of the Examiner’s Final
rejection of claims 1, 2, and 4–20, the only claims pending in the application

1 Our decision will make reference to the Appellant’s Appeal Brief (“App.
Br.,” filed March 22, 2018) and Reply Brief (“Reply Br.,” filed July 3,
2018), and the Examiner’s Answer (“Ans.,” mailed May 3, 2018), and Final
Action (“Final Act.,” mailed October 25, 2017).
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on appeal.2 We have jurisdiction over the appeal pursuant to
35 U.S.C. § 6(b).
We AFFIRM.
The Appellant invented a way of determining the best combination of
inventory “just-in-time” for need, in which businesses that align inventory to
consumer demand can still take advantage of all the supply chain efficiency
of pre-packaged assortments of items having multiple SKUs that can consist
of multiple sizes and/or multiple colors.3 Spec. para. 9.
An understanding of the invention can be derived from a reading of
exemplary claim 1, which is reproduced below (bracketed matter and some
paragraphing added).
1. A non-transitory computer-readable medium storing
instructions that when executed by one or more processors of a
device cause the device to perform at least:
[1] receiving, as an electronic input, a demand quantity for an
item that includes different types of the item that are sold using
a separate identifier for each of the different types,
wherein the demand quantity is electronically derived by
projecting the demand quantity according to seasonal
fluctuations in sales and from current sales data of the
item from when the demand quantity is received;
[2] accessing, by at least the processor by reading an electronic
data structure, a size profile that specifies a relative contribution
of each of the different types of the item to overall sales of the
item,

2 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. Appellant identifies the real party in interest as Oracle
International Corporation (Appeal Br. 2).

3 SKUs are stocking keeping units. Spec. para. 1.
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wherein the relative contribution identifies a fractional
amount assigned to each of the different types of the
item, wherein a sum of the fractional amounts equals
one;
[3] generating, by at least the processor, demand contributions
for the different types of the item as a function of the size
profile,
wherein an amount of each of the different types of items
is selected based on the fractional amount assigned to a
given type of the item;
[4] electronically producing, by at least the processor, a
plurality of demands using the demand quantity and the demand
contributions in real-time in response to the demand quantity,
where the plurality of demands correspond to demand for
the different types of the item;
and
[5] iteratively allocating, by at least the processor, the different
types of the item into one or more packs represented as a data
structure when the demand quantity is received to fulfill the
demand quantity for the item according to the plurality of
demands
by transmitting an electronic communication over a
network to an electronic distribution system of a
warehouse that
identifies the plurality of demands
and
causes the one or more packs of the item to
physically contain the amounts of each of the
different types of items based on the assigned
fractional amounts from the size profile and cause
the one or more packs to be shipped in satisfaction
of the demand quantity,
and
where allocating includes receiving a strategy selection
that controls whether the demand quantity is honored
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when allocating by permitting allocation of quantities of
the different types of the item in excess of the demand
quantity according to the strategy selection,
wherein the strategy selection specifies either
i) a no substitution strategy specifying that the
demand quantity cannot be exceeded by allocation
of any type of item and that fulfillment of less than
the entire demand quantity is permissible
or
ii) a substitution allowed strategy specifying that
the demand quantity can be exceeded by any
allocation and that fulfillment of less than the
entire demand quantity is not permissible.
The Examiner relies upon the following prior art:
Name Reference Date
Chien US 8,065,203 B1 Nov. 22, 2011
Pang US 8,131,581 B1 Mar. 6, 2012
Hoskin US 2004/0162763 A1 Aug. 19, 2004
Wertheimer US 2006/0143030 A1 June 29, 2006
McMains US 2012/0179507 A1 July 12, 2012
Vakhutinsky US 2012/0284071 A1 Nov. 8, 2012

Claims 1, 2, and 4–20 stand rejected under 35 U.S.C. § 101 as
directed to a judicial exception without significantly more.
Claims 1, 6, 7, 9, and 15 stand rejected under 35 U.S.C. § 103(a) as
unpatentable over Chien, Vakhutinsky, Wertheimer, and Pang.
Claims 2, 8, 10, 14, 16, 19, and 20 stand rejected under 35 U.S.C.
§ 103(a) as unpatentable over Chien, Vakhutinsky, Wertheimer, Pang, and
McMains.
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Claims 4, 5, 11–13, 17, and 18 stand rejected under 35 U.S.C.
§ 103(a) as unpatentable over Chien, Vakhutinsky, Wertheimer, Pang,
McMains and Hoskin.
ISSUES
The issues of eligible subject matter turn primarily on whether the
claims recite more than abstract conceptual advice of results desired.
The issues of obviousness turn primarily on whether Pang describes
the recited size profile that specifies relative contributions in fractional
amounts.
FACTS PERTINENT TO THE ISSUES
The following enumerated Findings of Fact (FF) are believed to be
supported by a preponderance of the evidence.
Facts Related to the Prior Art
Chien
01. Chien is directed to providing estimations for product attributes.
Chien 1:17–20.
02. Chien describes providing estimations for a product for
purchase at a plurality of stores. Groups of stores are generated based
upon similarity of store demand data. For each group, a distribution
of attribute values is determined with respect to the attribute of the
product. The distribution is used to provide estimations with respect
to the amount of product to be provided for sale at the stores. Chien
1:48–56.
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Vakhutinsky
03. Vakhutinsky is directed to optimizing retail pre-packs.
Vakhutinsky para. 1.
04. Vakhutinsky describes determining an optimized pre-
pack solution. The system receives demand data and constraints
and initializes a current pre-pack configuration comprising a
current pre-pack design that comprises a plurality of pre-pack
types, each pre-pack type comprising one or more different
products. The system optimizes a pre-pack allocation based on
the current pre-pack configuration and determines an objective
function value improvement comprising, for each product in each
pre-pack type, changing a level of the product by one unit and
determining if the objective function value has improved. If the
objective function value has improved, the system generates a new
pre-pack design based on the changed level of the product and
assigns the new pre-pack design as the current pre-pack design
and re-optimizes the allocation. The system repeats until the
objective function value stops improving. The system then
outputs an optimized pre-pack configuration and optimized pre-
pack allocation. Vakhutinsky para. 6.
Wertheimer
05. Wertheimer is directed to computer systems for use in a
warehouse environment. Wertheimer para. 2.
06. Wertheimer describes providing relatively efficient allocation
of items to orders for those items. An optimal allocation of items
to meet a particular order is calculated. The items, then, may be
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allocated to the order according to the calculated allocation. This
describes allocating items so as to provide an amount of material
closest to the ordered amount. Wertheimer para. 10.
Pang
07. Pang is directed to effecting order fulfillment for a merchant
such as an on-line merchant or a brick and mortar retail outlet.
Pang 1:64–2:9.
08. Pang describes the product level demand forecast being
generated at an adapted critical ratio that is determined by the
critical ratio adaptor. Inputs to the critical ratio adaptor include a
desired critical ratio determined by inventory planners and is used
to calculate the product level demand forecast. By specifying the
desired critical ratio in this manner, inventory planners indicate
the desired probability that a given product level demand forecast
will exceed a demand for a given product. Thus, the critical ratio
comprises a value between 0 and 1. If planners want to ensure
that demand will not exceed inventory, for example, then a
relatively high desired critical ratio may be specified such as "0.9"
or other value. Lower values for the critical ratio may be around
0.6 or other value.
ANALYSIS
Initially we determine that although there are no nominal method
claims, the two non-transitory media claims are for all intents and purposes
method claims, as evidenced by the last three word of each of their
preambles, viz, “the method comprising.” We refer to these claims as
method claims below for this reason.
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Next we construe the limitation “allocating.” To allocate is to
apportion or designate.4 All of the claims have all of the limitations
performed by and on a computer. Therefore, such allocation is notational
rather than physical. We construe “allocating” as generating data
representing a notation of how to apportion or designate.
Next we construed the clause “causes the one or more packs of the
item to physically contain the amounts of each of the different types of items
based on the assigned fractional amounts from the size profile and cause the
one or more packs to be shipped in satisfaction of the demand quantity” in
limitation 5. Causing is not doing. Causation is a predicate, not a result.
Thus, causing containment and shipment is not containment and shipment,
but only the predicate for such.
The phrase “physically contain” is a state of existence, not a change in
form. The phrase does no more than state the logical consequence of
allocation, which is that the allocated parts as a whole contain the individual
allocated parts.
This is consistent with the Specification, which does not describe
physical movement of items, but only logical assignment of items. In
particular, Appellant cites Specification paragraphs 10, 22, 26, 32, 40, and
41 for support. Appeal Br. 4. All of these paragraphs describe logical
assignment. None describe physical movement. Nothing in the
Specification describes physical shipment. Thus, the recited causation of
physical shipment is no more than performing the predicate allocation upon
which some shipment outside the scope of the claim will be based on.

4 Merriam-Webster Dictionary (accessed Dec. 12, 2019),
https://www.merriam-webster.com/dictionary/allocate
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Thus, we construe “causes the one or more packs of the item to
physically contain the amounts of each of the different types of items based
on the assigned fractional amounts from the size profile and cause the one or
more packs to be shipped in satisfaction of the demand quantity” to mean
“assigning the ‘amounts of each of the different types of items’ to the one or
more packs of the item based on the assigned fractional amounts from the
size profile in preparation for the one or more packs to later be shipped in
satisfaction of the demand quantity.”
Claims 1, 2, and 4–20 rejected under 35 U.S.C. § 101 as directed to a
judicial exception without significantly more
STEP 15
Claim 1, as a non-transitory computer-readable medium storing
computer-executable instructions, which we construe as a method claim for
the reasons supra, nominally recites one of the enumerated categories of
eligible subject matter in 35 U.S.C. § 101. The issue before us is whether it
is directed to a judicial exception without significantly more.
STEP 2
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, we 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-

5 For continuity of analysis, we adopt the steps nomenclature from 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7,
2019) (“Revised Guidance”).
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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., Pty. Ltd. v CLS Bank Intl, 573 U.S. 208, 217–18 (2014)
(citations omitted) (citing Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66 (2012)). To perform this test, we must first
determine what the claims are directed to. This begins by determining
whether the claims recite one of the judicial exceptions (a law of nature, a
natural phenomenon, or an abstract idea). Then, if claims recite a judicial
exception, determining whether the claims at issue are directed to the recited
judicial exception, or whether the recited judicial exception is integrated into
a practical application of that exception, i.e., that the claims “apply, rely on,
or use the judicial exception in a manner that imposes a meaningful limit on
the judicial exception, such that the claim is more than a drafting effort
designed to monopolize the judicial exception.” Revised Guidance 54. If
the claims are directed to a judicial exception, then finally determining
whether the claims provide an inventive concept because the additional
elements recited in the claims provide significantly more than the recited
judicial exception.
STEP 2A Prong 1
At a high level, and for our preliminary analysis, we note that method
claim 1 recites receiving demand data, accessing profile data, generating
SKU demand contributions, producing plural demands, and allocating items
to fulfill demand quantity. Accessing data is receiving data. Generating
demand contributions, producing demands, and allocating items are all
conventional mathematical calculations and are therefore conventional
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computer analysis. Thus, claim 1 recites receiving and analyzing data.
None of the limitations recite technological implementation details, or even
mathematical algorithms, for any of these steps, but instead recite only
results desired by any and all possible means.
From this we see that claim 1 does not recite the judicial exceptions of
either natural phenomena or laws of nature.
Under Supreme Court precedent, claims directed purely to an abstract
idea are patent in-eligible. As set forth in the Revised Guidance, which
extracts and synthesizes key concepts identified by the courts, abstract ideas
include (1) mathematical concepts,6 (2) certain methods of organizing
human activity,7 and (3) mental processes.8 Among those certain methods
of organizing human activity listed in the Revised Guidance are commercial
or legal interactions. Like those concepts, claim 1 recites the concept of
allocating inventory to meet market demand. Specifically, claim 1 recites
operations that would ordinarily take place in advising one to allocate items
based on contributions to overall demand based on multiple SKU sizes. The
advice to allocate items based on contributions to overall demand based on

6 See, e.g., Gottschalk v. Benson, 409 U.S. 63, 71–72 (1972); see also Bilski
v. Kappos, 561 U.S. 593, 611 (2010); and Mackay Radio & Telegraph Co. v.
Radio Corp. of Am., 306 U.S. 86, 94 (1939); SAP Am., Inc. v. InvestPic,
LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018).
7 See, e.g., Bilski, 561 U.S. at 628; see also Alice, 573 U.S. at 219–20;
Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed Cir. 2014); Smart
Sys. Innovations, LLC v. Chicago Transit Auth., 873 F.3d 1364, 1383 (Fed.
Cir. 2017); and In re Marco Guldenaar Holding B.V., 911 F.3d 1157, 1160–
61 (Fed. Cir. 2018).
8 See, e.g., Benson, 409 U.S. at 67; see also CyberSource Corp. v. Retail
Decisions, Inc., 654 F.3d 1366, 1371–72 (Fed. Cir. 2011); and Intellectual
Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016).
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multiple SKU sizes involves allocating items for sale, which is an economic
act, and basing this on demand, which is an act ordinarily performed in the
stream of commerce. For example, claim 1 recites “allocating items,” which
is an activity that would take place whenever one is readying inventory for
sale in a market. Similarly, claim 1 recites “to fulfill the demand,” which is
also characteristic of selling optimally into a market.
The Examiner determines the claims to be directed to allocation of
retail goods based on a size profile and/or a selected strategy. Final Act. 12.
The preamble to claim 1 does not recite what it is to achieve, but the
steps in claim 1 result in calculating how to allocate items to meet demand
absent any technological mechanism other than a conventional computer for
doing so.
As to the specific limitations, limitations 1 and 2 recite receiving data.
Limitations 3–5 recite generic and conventional receiving and analyzing of
demand data, which advise one to apply generic functions to get to these
results. The limitations thus recite advice for allocating items based on
contributions to overall demand based on multiple SKU sizes. To advocate
allocating items based on contributions to overall demand based on multiple
SKU sizes is conceptual advice for results desired and not technological
operations.
The Specification at paragraph 9 describes the invention as relating to
determining the best combination of inventory “just-in-time” for need, in
which businesses that align inventory to consumer demand can still take
advantage of all the supply chain efficiency of pre-packaged assortments of
items having multiple SKUs that can consist of multiple sizes and/or
multiple colors. Thus, all this intrinsic evidence shows that claim 1 recites
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allocating inventory to meet market demand. This is consistent with the
Examiner’s determination.
This in turn is an example of commercial or legal interactions as a
certain method of organizing human activity because allocating inventory to
meet market demand is part of the process of making inventory available for
commercial sale. The concept of allocating inventory to meet market
demand by allocating items based on contributions to overall demand based
on multiple SKU sizes is one idea for matching the demand in commerce to
availability. The steps recited in claim 1 are part of how this might
conceptually be premised.
Our reviewing court has found claims to be directed to abstract ideas
when they recited similar subject matter. Credit Acceptance Corp. v.
Westlake Services, 859 F.3d 1044, 1055 (2017) (selection of parts from
inventory).
Alternately, this is an example of concepts performed in the human
mind as mental processes because the steps of receiving and analyzing data
mimic human thought processes of observation, evaluation, judgment, and
opinion, perhaps with paper and pencil, where the data interpretation is
perceptible only in the human mind. See In re TLI Commc’ns LLC Patent
Litig., 823 F.3d 607, 611 (Fed. Cir. 2016); see also FairWarning IP, LLC v.
Iatric Sys., Inc., 839 F.3d 1089, 1093–94 (Fed. Cir. 2016). Claim 1, unlike
the claims found non-abstract in prior cases, uses generic computer
technology to perform data reception and analysis and does not recite an
improvement to a particular computer technology. See, e.g., 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
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improvement in computer animation.”). As such, claim 1 recites receiving
and analyzing data, and not a technological implementation or application of
that idea.
Alternately, this is an example of a mathematical concept because the
steps of determining demand contributions, applying such contributions to
demand quantity, and allocating to meet the demand perform mathematical
algorithms. The remaining steps are mere data gathering and incidental post
processing steps.
From this we conclude that at least to this degree, claim 1 recites
allocating inventory to meet market demand by allocating items based on
contributions to overall demand based on multiple SKU sizes, which is a
commercial and legal interaction, one of certain methods of organizing
human activity identified in the Revised Guidance, and, thus, an abstract
idea.
STEP 2A Prong 2
The next issue is whether claim 1 not only recites, but is more
precisely directed to this concept itself or whether it is instead directed to
some technological implementation or application of, or improvement to,
this concept i.e. integrated into a practical application.9
At the same time, we tread carefully in construing this
exclusionary principle lest it swallow all of patent law. At
some level, “all inventions . . . embody, use, reflect, rest upon,
or apply laws of nature, natural phenomena, or abstract ideas.”
Thus, an invention is not rendered ineligible for patent simply
because it involves an abstract concept. “[A]pplication[s]” of
such concepts “‘to a new and useful end,’” we have said,

9 See, e.g., Alice, 573 U.S. at 223 (discussing Diamond v. Diehr, 450 U.S.
175 (1981)).
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remain eligible for patent protection. Accordingly, in applying
the § 101 exception, we must distinguish between patents that
claim the “‘buildin[g] block[s]’” of human ingenuity and those
that integrate the building blocks into something more.
Alice, 573 U.S. at 217 (citations omitted).
Taking the claim elements separately, the operation performed by the
computer at each step of the process is expressed purely in terms of results,
devoid of implementation details. Steps 1 and 2 are pure data gathering
steps. Limitations describing the nature of the data do not alter this. Steps
3–5 recite generic computer processing expressed in terms of results desired
by any and all possible means and so present no more than conceptual
advice. All purported inventive aspects reside in how the data is interpreted
and the results desired, and not in how the process physically enforces such
a data interpretation or in how the processing technologically achieves those
results.
As we construe supra “causes the one or more packs of the item to
physically contain the amounts of each of the different types of items based
on the assigned fractional amounts from the size profile and cause the one or
more packs to be shipped in satisfaction of the demand quantity” to mean
assigning the “amounts of each of the different types of items [to the one or
more packs of the item] based on the assigned fractional amounts from the
size profile in preparation for the one or more packs to later be shipped in
satisfaction of the demand quantity,” this limitation only expresses the
implication of the assignment. Reply Br. 6.
Viewed as a whole, Appellant’s claim 1 simply recites the concept of
allocating inventory to meet market demand by allocating items based on
contributions to overall demand based on multiple SKU sizes as performed
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by a generic computer. This is no more than conceptual advice on the
parameters for this concept and the generic computer processes necessary to
process those parameters, and do not recite any particular implementation.
Claim 1 does not, for example, purport to improve the functioning of
the computer itself. Nor does it effect an improvement in any other
technology or technical field. The 19+ pages of specification do not bulge
with disclosure, but only spell out different generic equipment10 and
parameters that might be applied using this concept and the particular steps
such conventional processing would entail based on the concept of
allocating inventory to meet market demand by allocating items based on
contributions to overall demand based on multiple SKU sizes under different
scenarios. They do not describe any particular improvement in the manner a
computer functions. Instead, claim 1 at issue amounts to nothing
significantly more than an instruction to apply allocating inventory to meet
market demand by allocating items based on contributions to overall demand
based on multiple SKU sizes using some unspecified, generic computer.
Under our precedents, that is not enough to transform an abstract idea into a
patent-eligible invention. See Alice, 573 U.S. at 225–26.
None of the limitations reflect an improvement in the functioning of a
computer, or an improvement to other technology or technical field, applies
or uses a judicial exception to effect a particular treatment or prophylaxis for
a disease or medical condition, implements a judicial exception with, or uses
a judicial exception in conjunction with, a particular machine or manufacture

10 The Specification describes a computer that includes a processor, a
memory, and input/output ports operably connected by a bus. Spec. para.
45.
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that is integral to the claim, effects a transformation or reduction of a
particular article to a different state or thing, or applies or uses the judicial
exception in some other meaningful way beyond generally linking the use of
the judicial exception to a particular technological environment, such that
the claim as a whole is more than a drafting effort designed to monopolize
the exception.
We conclude that claim 1 is directed to achieving the result of
allocating inventory to meet market demand by advising one to allocate
items based on contributions to overall demand based on multiple SKU
sizes, as distinguished from a technological improvement for achieving or
applying that result. This amounts to commercial or legal interactions,
which fall within certain methods of organizing human activity that
constitute abstract ideas. The claim does not integrate the judicial exception
into a practical application.
STEP 2B
The next issue is whether claim 1 provides an inventive concept
because the additional elements recited in the claim provide significantly
more than the recited judicial exception.
The introduction of a computer into the claims does not generally alter
the analysis at Mayo step two.
the 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 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 “implement[t]” an abstract
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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
feature[e]” that provides any “practical assurance that the
process is more than a drafting effort designed to monopolize
the [abstract idea] itself.”
Alice, 573 U.S. at 223–24 (citations omitted).
“[T]he relevant question is whether the claims here do more than
simply instruct the practitioner to implement the abstract idea [] on a generic
computer.” Alice, 573 U.S. at 225. 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 for receiving and analyzing data amounts to electronic data query
and retrieval—one of the most basic functions of a computer. All of these
computer functions are generic, routine, conventional computer activities
that are performed only for their conventional uses. See Elec. Power Grp. v.
Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016); see In re Katz Interactive
Call Processing Patent Litigation, 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.”). None of these activities
are used in some unconventional manner nor do any produce some
unexpected result. Appellant does not contend it invented any of these
activities. 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 particular ‘source,’ that limitation does not make the collection
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and analysis other than abstract.” SAP America, Inc. v. InvestPic LLC, 898
F.3d 1161, 1168 (Fed. Cir. 2018).
Considered as an ordered combination, the computer components of
Appellant’s claim 1 add nothing that is not already present when the steps
are considered separately. The sequence of data reception-analysis is
equally generic and conventional. See Ultramercial, Inc. v. Hulu, LLC, 772
F.3d 709, 715 (Fed. Cir. 2014) (sequence of receiving, selecting, offering for
exchange, display, allowing access, and receiving payment recited an
abstraction); see also Inventor Holdings, LLC v. Bed Bath & Beyond, Inc.,
876 F.3d 1372, 1378 (Fed. Cir. 2017) (sequence of data retrieval, analysis,
modification, generation, display, and transmission); and Two-Way Media
Ltd. v. Comcast Cable Communications, LLC, 874 F.3d 1329, 1339 (Fed.
Cir. 2017) (sequence of processing, routing, controlling, and monitoring).
The ordering of the steps is therefore ordinary and conventional.
We conclude that claim 1 does not provide an inventive concept
because the additional elements recited in the claim do not provide
significantly more than the recited judicial exception.
REMAINING CLAIMS
Claim 1 is representative. The other independent non-transitory
computer-readable medium storing computer-executable instructions claim
16 which we construe as a method claim is substantially similar at least as
regards this analysis. The remaining claims construed as method claims
merely describe process parameters. We conclude that the method claims at
issue are directed to a patent-ineligible concept itself, and not to the practical
application of that concept.
As to the structural system claims, they
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are no different from the method claims in substance. The
method claims recite the abstract idea implemented on a generic
computer; the system claims recite a handful of generic
computer components configured to implement the same idea.
This Court has long “warn[ed] . . . against” interpreting § 101
“in ways that make patent eligibility ‘depend simply on the
draftsman’s art.’”
Alice, 573 U.S. at 226. As a corollary, the claims are not directed to any
particular machine.
LEGAL CONCLUSION
From these determinations we further determine that the claims do not
recite an improvement to the functioning of the computer itself or to any
other technology or technical field, a particular machine, a particular
transformation, or other meaningful limitations. From this we conclude the
claims are directed to the judicial exception of the abstract idea of certain
methods of organizing human activity as exemplified by the commercial and
legal interaction of allocating inventory to meet market demand by advising
one to allocate items based on contributions to overall demand based on
multiple SKU sizes, without significantly more.
APPELLANT’S ARGUMENTS
As to Appellant’s Appeal Brief arguments, we adopt the Examiner’s
determinations and analysis from Final Action 12–13 and Answer 4–22 and
28–29 and reach similar legal conclusions. We now turn to the Reply Brief.
We are not persuaded by Appellant’s argument that there is no
showing that the limitations are conventional. Reply Br. 3. Such showing is
presented supra under Step 2B.
We are not persuaded by Appellant’s argument that the claims contain
an inventive concept that is also found in the specific ordered combination
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of the limitations, similar to the Federal Circuit's findings in BASCOM
(Bascom Global Internet v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir.
2016)). Reply Br. 3. Initially, we remind Appellant that BASCOM did not
find claims eligible on the substance, but rather that the Appellees did not
provide sufficient evidence to support a 12(b)(6) motion to dismiss in which
facts are presumed in the non-movant’s favor.
The key fact in BASCOM was the presence of a structural change in
“installation of a filtering tool at a specific location, remote from the end-
users, with customizable filtering features specific to each end user. This
design gives the filtering tool both the benefits of a filter on a local computer
and the benefits of a filter on the ISP server.” BASCOM, 827 F.3d at 1350.
The instant claims have no analogous structural benefit.
We are not persuaded by Appellant’s argument that
It is not well-understood, routine, and convention to iteratively
allocate packs and generate demand contributions as a function
of a size profile, and then to identify a fractional amount
assigned to each of different types of an item that is specified in
the size profile, and then to cause packs of the item to
physically contain the amounts of each of the different types of
items based on the assigned fractional amounts from the size
profile as recited in claim 1. These are not well-understood or
routine functions.
Reply Br. 4. All of these are mathematical algorithms performed on
specified data. As we determined supra, the nature or origin of the data
cannot confer eligibility. Also, information is abstract. “Information,
whether displayed in the form of price values or P&L values, is abstract.”
Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1378, 1384 (Fed. Cir. 2019).
Similarly, reciting the performance of a mathematical algorithm cannot
confer eligibility.
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Nothing “transforms” the abstract idea of encoding and
decoding into patent-eligible subject matter. Nor does the
presence of a mathematical formula dictate otherwise. Claims
that are directed to a nonabstract idea are not rendered abstract
simply because they use a mathematical formula. But the
converse is also true: A claim directed to an abstract idea does
not automatically become eligible merely by adding a
mathematical formula.
RecogniCorp, LLC v. Nintendo Co., Ltd., 855 F.3d 1322, 1328 (2017). And
as we also determined supra, the limitation regarding causing “packs of the
item to physically contain the amounts of each of the different types of
items” (claim 1, limitation 5) is not part of the step and does no more
than recite a state of being.
We are not persuaded by Appellant’s argument that the
claim limitations are similar to those in Diamond v. Diehr that
were directed to an improved process for determining when to
cause an action from a machine after the computer determines
some conditions: “opening the press automatically when a said
comparison indicates equivalence[.]” (Claim 1 in Diamond v.
Diehr). Opening a press (which is caused by a computer
control signal) after the computer determines temperature
conditions is an action by a machine controlled by the
computer. This is similar to the present claims that involve the
computer determining a number of allocation conditions and
causing packs to be filled with specified items, which is an
action by a machine.
Reply Br. 6. Here, Appellant further argues that the asserted claims are akin
to the claims found patent-eligible in Diamond v. Diehr, 450 U.S. 175
(1981). Reply Br. 7–8. But,
we must read Diehr in light of Alice, which emphasized that
Diehr does not stand for the general proposition that a claim
implemented on a computer elevates an otherwise ineligible
claim into a patent-eligible improvement, Alice. Rather, Diehr
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involved “a ‘well-known’ mathematical equation . . . used . . .
in a process designed to solve a technological problem in
‘conventional industry practice.’”
OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015).
Diehr solved a technological problem in the conventional industry practice
of molding tires. Here, Appellant argues that the invention causes packs to
be filled. But causing is not doing. And the claim does not recite filling.
We construe supra “causes the one or more packs of the item to
physically contain the amounts of each of the different types of items based
on the assigned fractional amounts from the size profile and cause the one or
more packs to be shipped in satisfaction of the demand quantity” to mean
“assigning the amounts of each of the different types of items to the one or
more packs of the items based on the assigned fractional amounts from the
size profile [in preparation for] the one or more packs to [later] be shipped in
satisfaction of the demand quantity.” This is thus an abstraction and not an
industrial operation like opening Diehr’s tire manufacturing machine.
We are not persuaded by Appellant’s argument that the claims are
analogous to those in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed.
Cir. 2016). Reply Br. 7–8. The claims differ from those found patent
eligible in Enfish, where the claims were “specifically directed to a self-
referential table for a computer database.” See Enfish. The claims thus
were “directed to a specific improvement to the way computers operate”
rather than an abstract idea implemented on a computer. Enfish, 822 F.3d
at 1336. Here, by contrast, the claims are not directed to an
improvement in the way computers operate. Though the claims purport
to accelerate the process of allocating items, our reviewing court has held
that speed and accuracy increases stemming from the ordinary
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capabilities of a general purpose computer “do[] not materially alter the
patent eligibility of the claimed subject matter.” Bancorp Servs., L.L.C. v.
Sun Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir.
2012). Instead, the claims are more analogous to those in FairWarning,
wherein claims reciting “a few possible rules to analyze audit log data” were
found directed an abstract idea because they asked “the same questions
(though perhaps phrased with different words) that humans in analogous
situations detecting fraud have asked for decades.” FairWarning, 839 F.3d at
1094, 1095.

Claims 1, 6, 7, 9, and 15 rejected under 35 U.S.C. § 103(a) as unpatentable
over Chien, Vakhutinsky, Wertheimer, and Pang

We are persuaded by Appellant’s argument that Pang does not
describe the recited size profile that specifies relative contributions in
fractional amounts. Appeal Br. 18–20; see also Reply Br. 9–10. In
particular, Appeal Brief 19, first paragraph, articulates precisely why Pang’s
probability ratio of whether a forecast will exceed a demand does not
describe the recited relative contribution ratio. The Examiner provides no
reasoning for why Pang’s probability forecast should read on the recited
contribution ratio in the Answer.

Claims 2, 8, 10, 14, 16, 19, and 20 rejected under 35 U.S.C. § 103(a) as
unpatentable over Chien, Vakhutinsky, Wertheimer, Pang, and McMains

These are dependent claims, and so Appellant’s arguments are
persuasive here.

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Claims 4, 5, 11–13, 17, and 18 rejected under 35 U.S.C. § 103(a) as
unpatentable over Chien, Vakhutinsky, Wertheimer, Pang, McMains and
Hoskin

These are dependent claims, and so Appellant’s arguments are
persuasive here.
CONCLUSIONS OF LAW
The rejection of claims 1, 2, and 4–20 under 35 U.S.C. § 101 as
directed to a judicial exception without significantly more is proper.
The rejection of claims 1, 6, 7, 9, and 15 under 35 U.S.C. § 103(a) as
unpatentable over Chien, Vakhutinsky, Wertheimer, and Pang is improper.
The rejection of claims 2, 8, 10, 14, 16, 19, and 20 under 35 U.S.C. §
103(a) as unpatentable over Chien, Vakhutinsky, Wertheimer, Pang, and
McMains is improper.
The rejection of claims 4, 5, 11–13, 17, and 18 under 35 U.S.C. §
103(a) as unpatentable over Chien, Vakhutinsky, Wertheimer, Pang,
McMains and Hoskin is improper.
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CONCLUSION
The rejection of claims 1, 2, and 4–20 is affirmed.
In summary:
Claims
Rejected
35 U.S.C. § Basis Affirmed Reversed
1, 2, 4–20 101 Eligibility 1, 2, 4–20
1, 6, 7, 9, 15 103 Chien, Vakhutinsky,
Wertheimer, Pang
1, 6, 7, 9, 15
2, 8, 10, 14, 16,
19, 20
103 Chien, Vakhutinsky,
Wertheimer, Pang,
McMains
2, 8, 10, 14,
16, 19, 20
4, 5, 11–13, 17,
18
103 Chien, Vakhutinsky,
Wertheimer, Pang,
McMains Hoskin
4, 5, 11–13,
17, 18
Overall
Outcome
1, 2, 4–20

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) (2011).
AFFIRMED

Notice of References Cited
Application/Control No.

14/086,206
Applicant(s)/Patent Under Patent
Appeal No.
2018–007149
Examiner

Art Unit

3624

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U Merriam-Webster Dictionary (accessed Dec. 12, 2019), https://www.merriam-webster.com/dictionary/allocate.

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