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Patent Trials and Appeals Board

Sep 27, 2019

13595446 - (D) (P.T.A.B. Sep. 27, 2019)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
13/595,446 08/27/2012 Kevin S. Beyer ARC920100037US2(890.003C) 7628
99337 7590 09/27/2019
FERENCE & ASSOCIATES LLC
409 BROAD STREET
PITTSBURGH, PA 15143
EXAMINER
LO, SUZANNE
ART UNIT PAPER NUMBER
2127
MAIL DATE DELIVERY MODE
09/27/2019 PAPER
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.
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte KEVIN S. BEYER, VUK ERCEGOVAC,
PETER HAAS, EUGENE J. SHEKITA, and FEI XU
____________

Appeal 2019-000908
Application 13/595,446
Technology Center 2100
____________

Before DAVID M. KOHUT, IRVIN E. BRANCH, and
JOSEPH P. LENTIVECH, Administrative Patent Judges.

BRANCH, Administrative Patent Judge.

DECISION ON APPEAL1
Pursuant to 35 U.S.C. § 134(a), Appellant2 appeals from the
Examiner’s decision to reject claims 1–11. We have jurisdiction over the
pending claims under 35 U.S.C. § 6(b).
We affirm.

1 We reference, herein, the Final Action mailed December 18, 2017
(“Final”), Appeal Brief filed May 21, 2018 (“Br.”), Examiner’s Answer
mailed September 10, 2018 (“Ans.”), Reply Brief filed November 13, 2018
(“Reply”), and Specification filed August 27, 2012 (“Spec.”).
2 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42. According to Appellant, the real party in interest is
“International Business Machines Corporation.” Br. 3.
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RELATED APPEAL
Appellant notes this appeal is related to an appeal of U.S. Application
12/826,077. Br. 4. That appeal has been docketed as Appeal 2019-000812.
STATEMENT OF THE CASE
THE INVENTION
Appellant’s claimed subject matter is related to stochastic simulation,
a “numerical technique” for analyzing a “probability distribution” (e.g.,
stock prices). Spec. ¶ 3. Simulation generates random samples from a
probability distribution. Id. Each sample is generated by a “Monte Carlo
replication” that inputs a stream of random integers called “seeds.” Id. ¶ 4.
A simulation computes the samples in parallel (e.g., on respectively “tens to
thousands” of parallel processors). Id. ¶ 5.
Appellant’s invention also “relates to parallel processing of
. . . stochastic simulations.” Id. ¶ 1. Whereas as traditional systems seed at
(i.e., provide a stream of random integers to) the parallel processors
performing simulations, the invention stores seed sequences (i.e., the streams
of random integers) “within” the probability distribution records that will
undergo simulation. Id. ¶ 6. Because the appropriate seed sequences are
carried by the records, simulation workloads can be freely distributed to
processors (i.e., the records need not be sent to appropriately seeded
processors). Id.
The seeds are generated by a pseudo-random number generator that
outputs a large “cycle of seeds.” Id. ¶ 31 (emphasis omitted); Fig. 1. This
cycle cannot provide non-overlapped seed sequences to a high quantity of
records (e.g., to billions of records each consuming millions of seeds)
because the seed integers, and thus the seed sequences, become too large to
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store a seed sequence within a record. Id. ¶¶ 33–34. The Specification
identifies two solutions:
Accordingly, example embodiments . . . limit the amount of
seeding information in a record by employing techniques for
combining generators and for skipping ahead on a cycle.
Thus, for implementing the parallelization schemes, as per the
example embodiments discussed herein, specialized techniques
are utilized to provide adequate seeding.
Id. ¶ 37 (emphasis added). These “specialized techniques” (above block
quote) are “SeedSkip” and “SeedMult” methods described by reference to
Figures 3A and B (and need not be further discussed herein). Id. ¶¶ 49–64.
REPRESENTATIVE CLAIM
Claim 1 is representative of all claims (37 C.F.R. § 41.37(c)(1)(iv))
and reproduced, below, with emphasis on “additional elements” (explained
infra), added formatting, and removal of redundant “code” elements.
1. A method . . . utilizing at least one processor to execute
computer code configured to perform the steps of[:]
assigning records of a database for seeding to one of a
plurality of parallel-processing nodes;
at each of and in parallel with the plurality of
parallel-processing nodes, seeding each record using the node
assigned to the record, said seeding further comprising adding
a unique source of pseudorandom numbers to each record;
providing, using a cycle of seeds, seeded records to a
plurality of processing nodes for parallel asynchronous
simulations via:
with respect to the cycle of seeds, generating skips of
varied length based on the records of the database; . . .
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modifying, based on the generated skips of varied length,
a start point for a cycle of at least one simulation; and
each of the seeded records undergoing a single
simulation.
Br. 31 (Claims Appendix).
REJECTION
Claims 1–11 stand rejected under 35 U.S.C. § 101 as directed to
patent-ineligible subject matter. Final 2–3.
PRINCIPLES OF LAW
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: “[l]aws of nature, natural phenomena, and abstract
ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’l, 573 U.S. 208,
216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court’s two-step framework, described in Mayo
and Alice. Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework,
we first determine what concept the claim is “directed to.” See Alice,
573 U.S. at 219 (“On their face, the claims before us are drawn to the
concept of intermediated settlement, i.e., the use of a third party to mitigate
settlement risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010)
(“Claims 1 and 4 in petitioners’ application explain the basic concept of
hedging, or protecting against risk.”).
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Concepts determined to be abstract ideas, and, thus, patent-ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). Concepts
determined to be patent-eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
(1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden,
56 U.S. 252, 267–68 (1853))); and manufacturing flour (Benson,
409 U.S. at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that ”[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula.” Diehr, 450 U.S. at 176; see also id. at 191 (“We
view respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, . . . and this principle cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment.” Id. (citing Benson and Flook); see, e.g., id. at 187 (“It is now
commonplace that an application of a law of nature or mathematical formula
to a known structure or process may well be deserving of patent
protection.”).
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If the claim is “directed to” an abstract idea, we turn to the second
step of the Alice and Mayo framework, where “we must examine the
elements of the claim to determine whether it contains an ‘inventive
concept’ sufficient to ‘transform’ the claimed abstract idea into a
patent-eligible application.” Alice, 573 U.S. at 221 (internal quotation marks
omitted). “A claim that recites an abstract idea must include ‘additional
features’ to ensure ‘that the [claim] is more than a drafting effort designed to
monopolize the [abstract idea].’” Id. (alterations in original) (quoting Mayo,
566 U.S. at 77). “[M]erely requir[ing] generic computer implementation[]
fail[s] to transform that abstract idea into a patent-eligible invention.” Id.
PTO GUIDANCE
The United States Patent and Trademark Office (USPTO) recently
published revised guidance on the application of § 101. 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(“Guidance”). Under the Guidance, we first look to whether the
claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
organizing human interactions such as a fundamental economic
practice, or mental processes); and
(2) additional elements that integrate the judicial exception into
a practical application (see Manual of Patent Examining
Procedure (MPEP) §§ 2106.05(a)–(c), (e)–(h) (9th Ed.,
Rev. 08.2017, Jan. 2018)).
See Guidance, 84 Fed. Reg. at 52, 54–55. Only if a claim (1) recites a
judicial exception and (2) does not integrate that exception into a practical
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application, we conclude the claim is directed to a judicial exception
(id. at 54) and then look to whether the claim:
(3) adds a specific limitation or combination of limitations
beyond the judicial exception that are not “well-understood,
routine, conventional” activity 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 Guidance, 84 Fed. Reg. at 56.
ANALYSIS
There is no dispute that claim 1 falls within a category of patentable
subject matter. See 35 U.S.C. § 101 (“process, machine, manufacture, or
composition of matter”); see also Guidance, 84 Fed. Reg. at 53–54
(“Step 1”). We accordingly turn to the issues raised by the Guidance and
Appellant’s arguments.
STEP 2A, PRONG ONE:3 DOES THE CLAIM RECITE
ANY JUDICIAL EXCEPTIONS?
Turning to the first issue set forth by the Guidance (see supra 6–7,
bullet “(1)”), we determine claim 1 recites judicial exceptions. Specifically,

3 The Guidance separates the enumerated issues (1) to (4) (see supra 7) into
Steps 2A(1), 2A(2), and 2B, as follows:
[T]he revised procedure . . . focuses on two aspects [of whether
a claim is “directed to” a judicial exception under the first
step of the Alice/Mayo test (USPTO Step 2A)]: (1) [w]hether
the claim recites a judicial exception; and (2) whether a recited
judicial exception is integrated into a practical application. . . .
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we agree with the Examiner that claim 1 recites a mathematical algorithm
for “calculations to perform statistical analysis” (Ans. 7) and, more
particularly, for “seeding records, adding a unique source of pseudo-random
numbers to a record, generating skips, generating a start point of a
simulation, and performing a simulation” (id. at 6). We also agree claim 1 is
analogous to the patent-ineligible claims of SAP Am., Inc. v. InvestPic, LLC
(Ans. at 6–7), where “[t]he focus of the claims . . . is on selecting certain
information, analyzing it using mathematical techniques, and reporting
. . . the results” 898 F.3d 1161, 1167 (Fed. Cir. 2018), cert. denied, 139
S. Ct. 2747 (2019), reh’g denied, (U.S. Aug. 23, 2019).4

[W]hen a claim recites a judicial exception and fails to integrate
the exception into a practical application, . . . further analysis
pursuant to the second step of the Alice/Mayo test (USPTO
Step 2B) . . . is needed . . . in accordance with existing USPTO
guidance as modified in April 2018.
84 Fed. Reg. at 51.
4 Because the pertinence of InvestPic is not challenged, we do not address it
with particularity. We note, however, Appellant’s claim 1 and the InvestPic
claims similarly concern “a technique that utilizes resampled statistical
methods for the analysis of financial data” (e.g., “estimat[ing] the
distribution of data in a pool . . . by repeated sampling of the data in the
pool”). 898 F.3d at 1164 (internal quotation marks omitted). Below is
InvestPic’s cited claim 22 (Ans. 6), which recites a statistical analysis
performed via parallel processing.
22. A system for providing statistical analysis of investment
information over an information network comprising:
a financial data database for storing investment data;
a client database;
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We add that the un-emphasized features of reproduced claim 1
(supra 3–4) fall within the Guidance’s following categories of judicial
exceptions:5 “(a) Mathematical concepts—mathematical relationships,
mathematical formulas or equations, mathematical calculations;
. . . (c) Mental processes—concepts performed in the human mind.”
Guidance, 84 Fed. Reg. at 52. We determine so in view of the claim itself,
the disclosed invention (see supra 2–3), and lack of rebuttal to the
Examiner’s finding that seeding and simulating are mathematical concepts
(Ans. 6 (quoted above)).
For the foregoing reasons, we determine claim 1 recites judicial
exceptions.

a plurality of processors collectively arranged to perform a
parallel processing computation, wherein the plurality of
processors is adapted to:
receive a statistical analysis request corresponding to a selected
investment;
based upon investment data pertaining to the selected
investment, perform a resampled statistical analysis to generate
a resampled distribution; and,
provide a report of the resampled distribution.
Id. at 1165.
5 The Examiner alleges a judicial exception not recognized by the Guidance.
Namely, the Examiner alleges an exception of “collection and analysis of
information.” Ans. 6. Pursuant to USPTO policy, we do not uphold this
determination. See Guidance 84 Fed. Reg. at 51 (“All USPTO personnel
are, as a matter of internal agency management, expected to follow the
guidance.”). We do not, however, find this identification of a judicial
exception error as a matter of law. See id. (“Rejections will continue to be
based upon the substantive law.”). Instead, and because the Guidance was
issued after submission of the appeal papers, we apply the Guidance to
facilitate prosecution.
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STEP 2A, PRONG TWO: ARE THE RECITED JUDICIAL EXCEPTIONS
INTEGRATED INTO A PRACTICAL APPLICATION?
Turning to the second issue set forth by the Guidance (see supra 7,
bullet “(2)”), we determine the recited judicial exceptions are not integrated
into a practical application. See Guidance, 84 Fed. Reg. at 53 (describing a
“practical application” as a “meaningful limit on the [recited] judicial
exception[s], such that the claim is more than a drafting effort designed to
monopolize the . . . exception[s]”); see also id. at 55 (“exemplary
considerations . . . indicative that an additional element (or combination of
elements) may have integrated the exception into a practical application”
(footnote omitted). Specifically, we agree with the Examiner that claim 1’s
“additional elements [are] a generic parallel processing computer system that
only performs well-understood, routine, and convention[al] computer
process[es,] . . . including assignment of records to nodes and mathematical
calculations.” Ans. 9. We also agree that claim 1’s inclusion of these
features does not result in an invention “directed towards solving a problem
specific to parallel computing or simulation[; e.g.,] in contrast[, the
patent-eligible claim of McRO, Inc. v. Bandai Namco Games Am. Inc., 837
F.3d 1299 (Fed. Cir. 2016)] was directed towards solving a problem specific
to 3-D animation.” Final 3.
We add that McRO exemplifies claim 1’s lack of a practical
application. McRO’s claim was held patent-eligible in part because of
“us[ing] a combined order of specific rules that renders information into a
specific format that is then used and applied to create desired results.”
837 F.3d at 1315. The underlying basis for this finding was that a
claim reciting a judicial exception is nonetheless patent-eligible if reciting a
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mechanism that prevents preemption of the exception; i.e., the claimed
rules satisfied this criterion. Id. at 1314. McRO explains:
The preemption concern arises when the claims are not
directed to a specific invention and instead improperly
monopolize the basic tools of scientific and technological work.
. . . A patent is not good for an effect . . . because such patents
would prohibit all other persons from making the same thing by
any means whatsoever. . . . We therefore look to whether the
claims in these patents focus on a specific means or method
that improves the relevant technology or are instead directed to
a result or effect that itself is the abstract idea and merely
invoke generic processes and machinery.
Id. (citations and internal quotation marks omitted). Claim 1 does not
overcome these concerns. Claim 1 recites abstract concepts of stochastic
simulation and a broad-scoped implementation thereof (parallel processing
for seeding and simulating).
We also add that, except for parallel processing, each of the disclosed
invention’s above-discussed features (supra 2–3) constitutes a judicial
exception and/or is not claimed. That is, we determine the stochastic
simulation is a mathematical concept and claimed only to the extent of
included seeding and simulating techniques. We determine the cycle of
seeds, which skips to a different sequence of seed integers for each
simulation, is a mathematical concept and mental step of generating random
numbers. We determine the “specialized techniques” (e.g., the “SeedSkip”
and “SeedMult” methods) are not claimed; i.e., the claimed “skips of varied
length based on the records” merely changes the starting point of a seed
sequence (a mathematical concept). We determine the storing of seeds
within a record itself is not claimed; i.e., the claimed “adding . . . []random
numbers to each record” and “provide, using a cycle of seeds, seeded
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records to . . . processing nodes for parallel asynchronous simulations” does
not restrict how (e.g., where) the records and seed sequences are integrated.
We acknowledge the invention’s principle objective of storing seed
sequences within records so as to allow independent seeding and
simulating (see, e.g., Spec. ¶ 6)—that is, such that a system can: distribute
records to parallel processing that stores seed sequences within records; and
then freely redistribute those records to parallel processing that performs
simulations. Though this independent seeding and simulating may
(arguendo) provide a practical application for these basic tools of stochastic
simulation, the claimed invention does not disassociate seeding and
simulating. Per claim 1, a first plurality of parallel-processing nodes
“seed[s] each record using the node assigned to the record” and a second
plurality of parallel-processing nodes are “provid[ed], using a cycle of seeds,
seeded records . . . for parallel asynchronous simulations.” These limitations
are broad enough to read on parallel processing whereby each parallel
branch seeds and simulates a record.
For the foregoing reasons, we determine claim 1 is directed to the
recited judicial exceptions—not to a practical application thereof.
STEP 2B: DOES THE CLAIM RECITE ANYTHING THAT IS
BEYOND THE RECITED JUDICIAL EXCEPTIONS AND NOT A WELL-UNDERSTOOD,
ROUTINE, CONVENTIONAL ACTIVITY?
Turning to the third and fourth issues set forth by the Guidance
(see supra 7, bullets “(3)” and “(4)”), we determine the claimed invention
does not comprise a feature that is neither a judicial exception nor
“well-understood, routine, conventional.” 84 Fed. Reg. at 56. Specifically,
we agree with the Examiner that:
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Claim 1 recites at least one processor that refers to a general
purpose computer[.] . . . The process of assigning records for
processing in a computer system is well-understood, routine,
and conventional activity in data processing (Specification,
[0005] . . . ). Seeding records is merely the performance of
repetitive calculations, which has been identified as
well-understood, routine, and conventional computer functions.
Performing repetitive calculations in parallel [is] also
well-understood, routine, and conventional as that is a common
use of multi-core processors and multiple processor computer
systems (Specification, [0002]-[0005]). Performing simulations
using the parallel-processing nodes is also the performance of
repetitive calculations[.] . . . Parallel asynchronous simulation
is a well-understood, routine, and conventional computer
function (Specification, [0005] . . . ). [In sum,] the additional
elements are directed towards a general purpose computer and
well-understood, routine, and conventional computer
functions[.]
Ans. 4–5. We also agree InvestPic shows that nondescript
parallel-processing is not a patent-eligible implementation of a judicial
exception. Id. at 7; see also InvestPic, 898 F.3d at 1169–70.
For the foregoing reasons, we determine the claimed additional
elements do nothing more than append generic computer technology that
merely applies the recited judicial exceptions.
APPELLANT’S ARGUMENTS
We have reviewed Appellant’s arguments and, in view of our above
findings, are not persuaded the Examiner erred. Moreover, we adopt as our
own the Examiner’s findings and reasoning set forth in the Final Action and
Answer. We address Appellant’s below contentions for emphasis.
Appellant contends:
[The Examiner] has not identified any particular abstract idea
allegedly claimed as corresponding to the abstract idea defined
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by the courts. Rather, the Office has simply summarized,
generically and incorrectly, the claim language and offered a
single case citation, without any application of the
claim language to that case.
Br. 16 (emphasis omitted).6 We are unpersuaded. As reflected above for
Step 2A, Prong One, the Examiner determines claim 1 recites a
mathematical concept of “perform[ing] statistical analysis” by “seeding
records, adding a unique source of pseudo random numbers to a record,
generating skips, generating a start point of a simulation, and performing a
simulation.” Ans. 6. The Examiner also determines claim 1 is analogous to
the patent-ineligible claim 22 of InvestPic, particularly inasmuch claim 22 is
directed to “providing statistical analysis . . . [and] parallel processing . . . to
perform . . . the statistical analysis.” Id.; see also supra 9, n. 4 (InvestPic’s
claim 22).
Appellant also contends “the claimed limitations provide a technique
for parallel processing of data-intensive simulation by using nodes that
perform parallel asynchronous simulations.” Br. 17. We are unpersuaded.
As reflected above for Step 2A, Prong Two, the disclosed invention may
implement such techniques and accordingly overcome concerns of
preemption. The claimed invention, rather, implements basic tools of
stochastic simulation via nondescript parallel processing.
Appellant also contends claim 1 compels a finding of patent-eligibility
under DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245
(Fed. Cir. 2014). Br. 23–25. We are unpersuaded. Like the claim of McRO
(see supra 11–12), the claim of DDR was patent-eligible because of reciting

6 The Appeal Brief and Reply Brief are identical, i.e., present the same
arguments verbatim.
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a specific mechanism of the invention that prevented preemption of the
recited abstract ideas (see DDR, 773 F.3d at 1257–59). As explained,
claim 1 is not specific in this regard.
CONCLUSION
Claim(s) Rejected Basis Affirmed Reversed
1–11 § 101 1–11

DECISION
We affirm the rejection of claims 1–11 under 35 U.S.C. § 101.
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