NEW YORK LIFE INSURANCE COMPANY

Patent Trials and Appeals Board

Jul 1, 2020

2020000694 (P.T.A.B. Jul. 1, 2020)

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.
14/157,938 01/17/2014 John R. Meyer 101656-0059 6384
1923 7590 07/01/2020
MCDERMOTT, WILL & EMERY LLP
The McDermott Building
500 North Capitol Street, N.W.
Washington, DC 20001
EXAMINER
CHAKRAVARTI, ARUNAVA
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
07/01/2020 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):
mweipdocket@mwe.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________
________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte JOHN R. MEYER
_____________
________

Appeal 2020-000694
Application 14/157,938
Technology Center 3600
____________

Before NORMAN H. BEAMER, ADAM J. PYONIN, and
GARTH D. BAER, Administrative Patent Judges.

PYONIN, Administrative Patent Judge.

DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s rejection. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. Appellant identifies New York Life Insurance Company
as the real party in interest. Appeal Br. 2.
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STATEMENT OF THE CASE
Introduction
The application is directed to “stabilizing revenue derived by a
variable annuity provider from variable annuities having a mortality and
expense fee computed based on at least one variable that is not directly
affected by market conditions.” Abstract. Claims 1, 3–5, 9, 10, 12–14, and
18–23 are pending; claims 1, 10, and 19 are independent. Appeal Br. 17–22.
Claim 1 is reproduced below for reference, with emphasis added:
1. A computerized method for offering variable annuities,
the method comprising:
receiving, by a processing device, annuitant information
from a client device;
electronically generating, via the processing device, a
variable annuity with a guaranteed minimum death benefit for
an individual using the annuitant information, wherein the
guaranteed minimum death benefit comprises a payment based
on an accumulation of premium payments by the individual;
electronically determining, via the processing device, at
least one variable including an annual rate having a value that
is dependent on the guaranteed minimum death benefit and
independent of an accumulated value of the investments;
monitoring, via the processing device, an annuity
database of the premium payments for the variable annuity;
tracking, via the processing device, the value of the
investments associated with the variable annuity;
electronically calculating, via the processing device, a
mortality and expense fee for a plurality of periods based on the
at least one variable and the accumulation of the premium
payments corresponding to the guaranteed minimum death
benefit, the mortality and expense fee is independent of the
accumulated value of the investments;
transmitting, via the processing device, data
corresponding to the generated variable annuity, amount of the
premium payments, and the mortality and expense fee to an
annuity administrator system component;
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generating, via the processing device, interface data for
the annuity administrator system component, the interface data
including instructions that allow interface software installed on
a client device to access the annuity administrator system and
the transmitted data;
transmitting, via the processing device, the interface data
over a network to the client device; and
causing, by the annuity administrator system component,
the interface software on the client device to display the
interface data and to enable a network connection via a link to
the annuity administrator system component when the client
device is communicatively connected to the processing device
and the processing device is online;
wherein the mortality and expense fee funds, at least in
part, a risk associated with the guaranteed minimum death
benefit of the variable annuity.

The Examiner’s Rejections
Claims 1, 3–5, 9, 10, 12–14, and 18–23 stand rejected under 35 U.S.C.
§ 112(a) as failing to comply with the written description requirement. Final
Act. 2.
Claims 1, 3–5, 9, 10, 12–14, and 18–23 stand rejected under 35 U.S.C.
§ 101 because the claimed invention is directed to a judicial exception (i.e., a
law of nature, a natural phenomenon, or an abstract idea) without
significantly more. Final Act. 6.
Claims 1, 3–5, 9, 10, 12–14, and 18–23 stand rejected under 35 U.S.C.
§ 103 as being unpatentable over Fisher (US 2006/0111998 A1; May 25,
2006) and Flagg (US 6,456,979 B1; Sept. 24, 2002). Final Act. 9.

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ANALYSIS
We have reviewed the Examiner’s rejections in light of Appellant’s
arguments. Arguments Appellant could have made but chose not to make
are waived. See 37 C.F.R. § 41.37(c)(1)(iv).

35 U.S.C. § 112(a)
The Examiner finds that, “while the Specification states that M&E
fees computed based on at least one variable independent of the value of the
annuity investments (Specification: Para [0024]), there is no support for
variable value dependent on the GMDB.” Final Act. 3.
Appellant argues that the claims “are improperly rejected under 35
U.S.C. § 112” (Appeal Br. 6) and “directs attention to . . . portions of the
Specification.” Appeal Br. 7, quoting Spec. 7:16–23, 9:16–19, 9:23–10:2,
10:19–22.
We are not persuaded of Examiner error. The Examiner finds, and we
agree, that
Appellant has failed to point out where in [Spec. 7:16–23, 9:16–19,
9:23–10:2, 10:19–22], the Specification discloses the limitation of “at
least one variable having a value that is dependent on the guaranteed
minimum death benefit.” The Specification or Drawings do not
disclose any formulas setting forth the relationship between M&E
[Mortality and Expense] fees, variables and death benefits.

Ans. 4. The Examiner further finds, and we agree, that
M&E fees may be based on fixed rate ($100) that may be increased
periodically ($150); they may be based on percentage of the premium
(0.1 %); or they may be based on a variable such as return of premium.
But there is no support for M&E fees being based at least one variable
and on accumulated premium payments corresponding to the
guaranteed minimum death benefit.
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Ans. 6, citing Spec. 8:13–9:2, 9:1–10, 9:16–10:2. We find no error in the
Examiner’s detailed findings, and Appellant does not respond as no Reply
Brief was filed. Accordingly, we sustain the Examiner’s written description
rejection of claims 1, 3–5, 9, 10, 12–14, and 18–23.
35 U.S.C. § 101
The Examiner determines the claims are patent ineligible under
35 U.S.C. § 101 because the “claimed invention is directed to a judicial
exception (i.e., a law of nature, a natural phenomenon, or an abstract idea)
without significantly more.” Final Act. 6; see also Alice Corp. v. CLS Bank
Int’l, 573 U.S. 208, 217 (2014) (describing the two-step framework “for
distinguishing patents that claim laws of nature, natural phenomena, and
abstract ideas from those that claim patent-eligible applications of those
concepts”).
After the filing of the Appeal Brief—but prior to the mailing of the
Answer—the USPTO published revised guidance on the application of
§ 101 (“Guidance”). See, e.g., USPTO 2019 Revised Patent Subject Matter
Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Memorandum”);
USPTO October 2019 Update: Subject Matter Eligibility (Oct. 17, 2019)
(“Update”), noticed at 84 Fed. Reg. 55942 (Oct. 18, 2019).
Under Step 2A of the Guidance, the Office looks to whether the claim
recites:
(1) Prong One: any judicial exceptions, including certain groupings
of abstract ideas (i.e., mathematical concepts, certain methods
of organizing human activity such as a fundamental economic
practice, or mental processes); and
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(2) Prong Two: additional elements that integrate the judicial
exception into a practical application (see MPEP
§§ 2106.05(a)-(c), (e)-(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, does the Office then look, under Step
2B, to whether the claim:
(3) adds a specific limitation beyond the judicial exception that is
not well-understood, routine, conventional in the field (see
MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
See Memorandum, 84 Fed. Reg. at 54–56.
Appellant does not separately argue the claims. See Appeal Br. 8–13.
We select claim 1 as representative. See 37 C.F.R. §41.37(c)(1)(iv). We are
not persuaded the Examiner’s rejection is in error. We adopt the Examiner’s
findings and conclusions as our own, and we add the following primarily for
emphasis and clarification with respect to the Guidance.

A. Step 2A, Prong One
Claim 1 recites a “computerized method for offering variable
annuities,” including various computing components (i.e., a processing
device, an annuity database, an annuity administrator system component,
and a client device). Pursuant to Step 2A, Prong One of the Guidance, we
agree with the Examiner that claim 1 recites a judicial exception. See Final
Act. 6–8, Ans. 7–8. Particularly, claim 1 recites the steps of “electronically
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generating . . . a variable annuity,” “electronically determining . . . at least
one variable,” “monitoring . . . an annuity database,” “tracking . . . the value
of the investments associated with the variable annuity,” and “electronically
calculating . . . a mortality and expense fee.”
These limitations are intended to handle “certain instances [in which]
the M&E fee may not properly reflect the risk assumed by the company
providing the variable annuity” (Spec. 2:18–20) by “provid[ing] a level or
stable M&E fee and consequently a level or stable revenue stream derived
from M&E fees” (Spec. 2:22–23). They recite “fundamental economic
principles or practices” that include “hedging, insurance, and mitigating
risk.” Memorandum, 84 Fed. Reg. at 52. Thus, the claim recites the abstract
concept of certain methods of organizing human activity. See id.
Accordingly, we conclude the claims recite a judicial exception under
Prong One of the Guidance. See Memorandum, 84 Fed Reg. at 54.

B. Step 2A, Prong Two
Appellant argues that “[t]he present claims solve a problem in the
communication and interoperability between various software components.”
Appeal Br. 11. Particularly, Appellant contends claim 1’s limitations of
generating, via the processing device, interface data for the
annuity administrator system component, the interface data
including instructions that allow interface software installed on a
client device to access the annuity administrator system and the
transmitted data;
transmitting, via the processing device, the interface data
over a network to the client device; and
causing, by the annuity administrator system component,
the interface software on the client device to display the interface
data and to enable a network connection via a link to the annuity
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administrator system component when the client device is
communicatively connected to the processing device and the
processing device is online,

(see Appeal Br. 10–11), serve to
recite a system that allows server components to be accessed
through software from a client device. This technical
improvement allows adding functionalities to software on local
devices that are provided through the server.

Appeal Br. 11, citing DDR Holdings, LLC v. Hotels.com et al., 773 F.3d
1245 (Fed. Cir. 2014).
We are not persuaded the Examiner’s rejection is in error pursuant to
Step 2A, Prong Two of the Guidance. See Final Act. 6–8, Ans. 6–19. The
features asserted by Appellant—such as the generation and transmission of
interface data used to connect the annuity administrator system component
to the client device—are part of the abstract idea discussed above, and do
not integrate the judicial exception into a practical application. Further,
present claim 1 is unlike the claimed e-commerce outsourcing system in
DDR Holdings, as Appellant has not shown the communication between the
client device and the annuity administrator system component, and the
display of interface data on the client device, is improved. See
Memorandum n. 25 (“improvements in the functioning of a computer or to
any other technology or technical field, including a discussion of the
exemplar provided herein, which is based on DDR Holdings”); cf. Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1355 (Fed. Cir. 2016)
(“The claims at issue here do not require an arguably inventive device or
technique for displaying information.”).
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Here, the claims do not change the underlying or other technology,
rather the claimed techniques merely transmit and display information (the
interface data), allowing annuity administration. Appellant’s assertion that
the claimed method “allows adding functionalities to software on local
devices that are provided through the server” is unsupported attorney
argument, as Appellant supplies no citation to the disclosure to support this
assertion. We note that the only support we can find in the disclosure is that
agent interface 202 may transmit data to the server 214 and the
server 214, equipped with appropriate software to perform the
back end functionality, including performing the appropriate
computations and communicating data to the agent interface
202, causing the agent interface 202 to display information,
such as information related to the premium or fees.

Spec. 16:4–8, emphasis added. The disclosure is devoid of any description
of the “appropriate software to perform the back end functionality,” and as
further discussed below in Step 2B, the disclosure describes server 214 and
agent interface 202 as generic computer components. See, for example,
Spec. 14:5–7 (“[t]he agent interface 202 is at least one of a programmable
calculator, or a personal computer or special purpose computer having
appropriate software”).
Accordingly, the claimed additional elements “merely use[] a
computer as a tool to perform an abstract idea” or “do[] no more than
generally link the use of a judicial exception to a particular technological
environment.” Memorandum, 84 Fed. Reg. at 55; see Customedia Techs.,
LLC v. Dish Network Corp., No. 2018-2239, 2020 WL 1069742, at *3 (Fed.
Cir. Mar. 6, 2020) (“We have held that it is not enough, however, to merely
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improve a fundamental practice or abstract process by invoking a computer
merely as a tool.”).
Accordingly, we determine claim 1 does not integrate the judicial
exception into a practical application. See Memorandum, 84 Fed. Reg. at
54. As the claim recites a judicial exception and fails to integrate the
exception into a practical application, the claim is “directed to the . . .
judicial exception.” Id. at 54.

C. Step 2B
We are not persuaded the Examiner errs in determining that “viewed
as an ordered combination, the claims simply recite the conventional
methods of creating and administering variable annuities using generic
computers.” Ans. 14. As identified above, the disclosure describes agent
interface 202 using generic computer components. Similarly, server 214 is
generically described as including “an annuity calculator 220, an M&E fee
calculator 240, [and] an annuity administrator 260” (Spec. 15:11) or as
including “at least one database, such as an annuity database 210, and/or an
annuity features database 212.” Spec. 15:12–13. The disclosure contains no
further description of these calculators or databases.
We find the Examiner’s determination to be reasonable, in view of the
record before us. See Spec. 14:1–16:8, Fig. 2; see also Alice, 573 U.S. at
226 (“Nearly every computer will include a ‘communications controller’ and
‘data storage unit’ capable of performing the basic calculation, storage, and
transmission functions required by the method claims.”); Trading Techs.
Int’l, Inc. v. IBG LLC, 921 F.3d 1378, 1385 (Fed. Cir. 2019). Thus, we find
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independent claim 1’s elements, individually and as an ordered combination,
do not provide significantly more than the recited judicial exception.
Accordingly, we agree with the Examiner that independent claim 1 is
patent ineligible, as well as independent claims 10 and 19, and all claims
dependent therefrom. See App. Br. 8–13.

35 U.S.C. § 103
Appellant argues that “Flagg discusses ‘premium-based charges,’
‘cash-value based charges,’ and ‘fixed-type charges’” but “fails to teach or
suggest an annual rate that is dependent on the presently claimed guaranteed
minimum death benefit. Charges, as discussed by Flagg, do not depend on a
guaranteed minimum death benefit.” Appeal Br. 14, citing Final Act. 22.
We agree. The Examiner finds that Flagg discloses that “cost of
insurance for a given policy depends on the COI [cost of insurance] rate and
the type of death benefit (level or increasing).” Ans. 20, citing Flagg 3:40–
60. The cited portion of Flagg describes cost of insurance amounts for both
“permanent life insurance policies” that have either a “level death benefit” or
an “increasing death benefit” and states that
the actual COIs for a given policy will be a function of the COI rate
provided by the insurance company for each year of a given policy,
the net amount at risk in each of those years of the given policy, and
the design of the policy death benefit (i.e. level death benefit or
increasing death benefit) for the given policy.

Flagg 3:3:57–62. Elsewhere Flagg defines “Cost of Insurance Charges” as
“deductions from permanent life insurance policies to cover anticipated
payments for claims.” Flagg 2:11–13. The Examiner fails to provide a
finding explaining why a level or increasing death benefit for a permanent
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life insurance policy corresponds to the claimed “variable annuity with a
guaranteed minimum death benefit.” While a death benefit payable via
variable annuity is similar to a payment from a simple life insurance policy
in that both payments occur at the death of the policy holder, the Examiner
fails to explain why one skilled in the art would consider the particular cost
structures of a permanent life insurance policy to teach or suggest cost
structures of a variable annuity. Accordingly, we are constrained by the
record to reverse the obviousness rejection of independent claim 1, as well
as independent claims 10 and 19 commensurate in scope, and all dependent
claims therefrom.

CONCLUSION
The Examiner’s decision is affirmed because we have affirmed at
least one ground of rejection with respect to each claim on appeal. See 37
C.F.R. § 41.50(a)(1).
DECISION SUMMARY
Claims
Rejected
35 U.S.C. § Basis Affirmed Reversed
1, 3–5, 9,
10, 12–14,
18–23
112(a) Written
Description
1, 3–5, 9,
10, 12–14,
18–23

1, 3–5, 9,
10, 12–14,
18–23
101 Eligibility 1, 3–5, 9,
10, 12–14,
18–23

1, 3–5, 9,
10, 12–14,
18–23
103 Fisher, Flagg 1, 3–5, 9,
10, 12–14,
18–23
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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

Overall
Outcome
1, 3–5, 9,
10, 12–14,
18–23