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Patent Trials and Appeals Board

Oct 2, 2019

14063090 - (D) (P.T.A.B. Oct. 2, 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.
14/063,090 10/25/2013 Rahul Chowdhury 114826-74102(299US01) 8194
118627 7590 10/02/2019
McCarter & English, LLP / Walmart Apollo, LLC
265 Franklin Street
Boston, MA 02110
EXAMINER
ANDERSON, SCOTT C
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
10/02/2019 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):
docket@mccarter.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte RAHUL CHOWDHURY, CHARLES BRANDON FLETCHER,
and CAROLINE CONWAY
____________

Appeal 2019-000308
Application 14/063,090
Technology Center 3600
____________

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 1–10, 12–24, and 26–28. We have
jurisdiction over the pending claims under 35 U.S.C. § 6(b).
We affirm.

1 We reference, herein, the Final Office Action mailed December 28, 2017
(“Final”), Appeal Brief filed May 22, 2018 (“Br.”), Examiner’s Answer
mailed August 10, 2018 (“Ans.”), Reply Brief filed October 10, 2018
(“Reply”), and Specification filed October 25, 2013 (“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 “Walmart
Apollo, LLC.” Br. 3.
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STATEMENT OF THE CASE
THE INVENTION
Appellant describes the invention as follows:
Embodiments described herein provide a system and
method for analyzing and identifying “inelastic” products in a
retail environment. As defined herein, a product for sale in a
retail environment is classified as an “inelastic” product when
the sales of the product are not affected by (or inelastic to) a
current price markdown, regardless of the time and/or level of
the price markdown. By comparing markdowns of an “outlier”
store to a “sister” store with similar characteristics, a retailer
may be able to quantitatively identify inelastic products in the
outlier store. As defined herein, a store within a group of stores
is classified as an “outlier” store when the expected total
markdown of the store is higher than the expected total
markdown of a majority of other stores in the group. As
defined herein, a store within a group of stores is classified as a
“sister” store to an outlier store in the group when the store has
similar sales and similar characteristics to the outlier store but
less expected total markdown.
Once an inelastic product is identified in a store, the
markdown of the inelastic product may be adjusted to provide
greater return to the retailer. For example, according to one
embodiment, the markdown of the inelastic product may be
adjusted to bring the current price of the item more in line with
a base price of the inelastic product, which will provide greater
return to the retail store while maintaining relatively stable sales
of the inelastic product.
Spec. 1, l. 19–2, l. 2. Appellant states the invention arose from the following
“appreciat[ion]” of the inventors:
Applicant has appreciated that as the sales of an inelastic
product are relatively not affected by a price markdown (no
matter the markdown’s level), the sales of the inelastic product
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will remain relatively the same even if the price markdown is
reduced or eliminated. Accordingly, by reducing (or
eliminating) the price markdown of an inelastic product, the
relatively level sales (at a higher price) of the inelastic product
will produce a greater return to the retailer.
Id. at 8, ll. 27–32.
ILLUSTRATIVE CLAIM
Claim 1 is reproduced, below, with emphasis on “additional elements”
(explained infra).
1. A system for identifying a store server associated with at
least one inelastic product in a retail environment and
automatically adjusting a price of the at least one inelastic
product, the system comprising:
a central server configured to be coupled to a communication
network;
a markdown analysis module within the central server,
configured to communicate with a plurality of store servers
associated with a plurality of retail stores in the retail
environment and the communication network; and
a database coupled to the markdown analysis module;
wherein the markdown analysis module is further configured
to:
receive signals from the plurality of store servers
associated with the plurality of retail stores including
information related to product sales in each retail store of
the plurality of retail stores;
calculate, using a regression analysis based on the
received product sales information, a total expected
markdown over a period of time for each retail store of
the plurality of retail stores;
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generate a regression model for the plurality of retail
stores corresponding to the total expected markdown for
each retail store of the plurality of retail stores;
identify, based on the regression model, a store server
associated with an outlier store from the plurality of
store servers associated with plurality of retail stores that
has a total expected markdown greater than an expected
total markdown threshold in the regression model;
identify a store server associated with a sister store from
the plurality of store servers associated with the plurality
of retail stores, where the sister store has at least one
similar characteristic to the outlier store and a total
expected markdown that is less than the total expected
markdown of the outlier store;
compare the total expected markdown of the outlier store
with the total expected markdown of the sister store;
identify, based on the comparison between the total
expected markdown of the outlier store and the sister
store, at least one product in the outlier store that is not
yet determined to be inelastic;
analyze a price, a markdown, and sales of the at least one
product in the outlier store at predefined intervals to
determine that the at least one identified product in the
outlier store is an inelastic product; and
transmit instructions to a database of the store server
associated with the outlier store to automatically
reconfigure a current markdown of the at least one
product in the outlier store to a target level that is a
predefined percentage less than a preprogrammed base
price of the at least one product in response to a
determination that the at least one product is inelastic,
wherein reconfiguring the database of the outlier store
to adjust the markdown of the at least one product causes
a Point-of-Sale (POS) system in communication with the
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store server associated with the outlier store to reflect a
new price of the at least one product upon scanning the
at least one product.
Br. 18–19 (claims appendix).
REJECTION
Claims 1–10, 12–24, and 26–28 stand rejected under 35 U.S.C. § 101
as directed to patent-ineligible subject matter. Final 2–7.
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. Pty. Ltd. v. CLS Bank Int’l,
573 U.S. 208, 216 (2014) (internal quotation marks and citation omitted).
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.”).
Concepts determined to be abstract ideas, and, thus, patent-ineligible,
include certain methods of organizing human activity, such as fundamental
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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 (1854))); 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.”).
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
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concept’ sufficient to ‘transform’ the claimed abstract idea into a
patent-eligible application.” Alice, 573 U.S. at 221 (internal citation
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. (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
application, we conclude the claim is directed to a judicial exception
(id. at 54) and then look to whether the claim:
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(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
Claim 1 is representative of all claims. Br. 16; see also
37 C.F.R. § 41.37(c)(1)(iv) (2017) (representative claims). 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 7,
bullet ”(1)”), we determine claim 1 recites judicial exceptions. Specifically,

3 The Guidance separates the enumerated issues (1) to (4) (see supra 6) 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’s determination that claim 1 recites
mathematical techniques, longstanding commercial practices, and related
mental steps. Final 3. That is, we agree:
[C]entrally receiving information about product sales from
branch stores was old and well-known before there was any
such thing as a computer[.] Calculating an expected markdown
for the stores is simply unspecified mathematics, [e.g.,] “using a
regression analysis” is simply a broad category of mathematical
techniques, and this could all be done by hand without avail of
computers.
Identifying a store associated with an outlier store that
has a greater-than-expected markdown . . . can be done
mentally; someone looking over a list of expected markdowns
for stores, printed or written on a piece of paper, could notice
that one of the numbers is unusually large, and could then,
again mentally, be aware of a similar store (the “sister store” of
the claim) and compare the expected markdowns of the two
stores by, again, just looking at the numbers on the page.

[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 (referencing, via the omitted footnote, “USPTO
Memorandum of April 19, 2018, ‘Changes in Examination Procedure
Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility
Decision (Berkheimer v. HP, Inc.)’ (Apr. 19, 2018), available at https://
www.uspto.gov/sites/default/files/documents/memo-berkheimer-
20180419.PDF [ . . . ‘USPTO Berkheimer Memorandum’].”).
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Since a person could mentally determine what products
are elastic and what products are not, she could mentally keep
track of those not yet having been deemed inelastic and could
look over sales reports to perform the “analyze . . . to
determine” step, and again[.] She could then call the store on
the telephone and tell a manager to adjust a price[.] . . . [T]he
manager could simply change the price on the product with a
marking-pen.
Id. at 2–3.
We add that each of the un-emphasized features of reproduced claim 1
(supra 3–4) fall within at least one of the Guidance’s following categories of
judicial exceptions:4 “(a) Mathematical concepts—mathematical
relationships, mathematical formulas or equations, mathematical
calculations;[] (b) Certain methods of organizing human
activity—fundamental economic principles or practices[;] (c) Mental
processes—concepts performed in the human mind[.]” Guidance,
84 Fed. Reg. at 52. We determine so in view of the claim itself, Appellant’s
above-quoted descriptions of the invention (supra 2–3), our agreement with
the Examiner’s above-quoted findings, and Appellant’s Figures 2 and 7 that
provide the disclosure’s only process flows and list only activities falling

4 The Examiner alleges a judicial exception not recognized by the Guidance.
Namely, the Examiner alleges an exception of: “collecting and analyzing
information in order to provide a desirable information-based result, which
is similar to the concept identified as abstract by the court in [Elec. Power
Grp., LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016)].” Final 2.
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.”). Nor do
we, however, find this identification of a judicial exception erred 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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within the above judicial exceptions. See also Spec. 10, ll. 14–30
(regression analysis), 11, ll. 3–8 (identifying departments and products “of
opportunity” via “Pareto’s” principle), 11, l. 16–12, l. 5 (operations of the
“markdown analysis module”) (internal citation omitted).
We also add that the Federal Circuit has found that a
price-optimization technique constitutes an abstract idea. For example, OIP
Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir. 2015), found the
following claim limitations “directed to the concept of offer-based price
optimization” (id. at 1362) and thereby “similar to other [patent-ineligible]
‘fundamental economic concepts’” (id.):
(1) testing a plurality of prices; (2) gathering statistics generated
about how customers reacted to the offers testing the prices;
(3) using that data to estimate outcomes (i.e. mapping the
demand curve over time for a given product); and
(4) automatically selecting and offering a new price based on
the estimated outcome.
Id. at 1361; compare supra 2–3 (Appellant’s descriptions of the invention).
Similarly, Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306
(Fed. Cir. 2015), found the patent-ineligible claim “directed to the abstract
idea of determining a price . . . using organizational and product group
hierarchies.” Id. at 1333.
For the foregoing reasons, claim 1 recites judicial exceptions.
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
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exceptions], such that the claim is more than a drafting effort designed to
monopolize the [exceptions]”). Specifically, we agree with the Examiner
that the claimed additional elements—i.e., the emphasized features of
reproduced claim 1 (supra 3–4)—are remote servers, a central server,
databases, a POS, and communications by these elements over the network.
Final 4. We also agree the involvement of these features is
“barely-specified.” Ans. 4. That is, we agree:
Each step of the [claim] process performed . . . is
. . . either [a] collection of data[,] abstract[, or a] barely-
specified analysis of data[.] To “receive signals” from
computers “including information” related to various things is
nothing more than collecting information. To calculate a
mathematical result and generate, in no particular way [aside
from using] a “regression model”, which is a broad class of
mathematical models, is nothing more than barely-specified
analysis of information[. T]he claim is [also] not in any way
specific as to how the calculation is performed nor as to how
the regression model is generated.
To identify a store that has a certain characteristic . . . is
simply more barely-specified analysis of information[. T]he
claim discloses the input to the identification and the output, but
gives no hint as to how the output is derived from the input.
The same can be said [for] the identification of a “sister store”
with certain characteristics[,] which is, again, done in no
particular way.
Identifying a product [“]not yet determined to be
inelastic”[ is] done in no particular way[—]just based on the
available inputs[.]
Ans. 4 (original emphasis); see also Interval Lic. LLC v. AOL, Inc.,
896 F.3d 1335 (Fed. Cir. 2018) (explaining, throughout the opinion, the need
to recite “how” results are achieved).
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We add that the additional elements are not analogous to any of the
Guidance’s “exemplary considerations . . . indicative that an additional
element (or combination of elements)[] may have integrated the exception
into a practical application.” Guidance, 84 Fed. Reg. at 55. Rather, the
additional elements “generally link[] the use of the judicial exception[s] to a
particular technological environment” (id.)—namely to computer
automation provided by a computer network of retail stores and their central
office.
For the foregoing reasons, 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 7–8, 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” (herein “conventional”).
84 Fed. Reg. at 56. Specifically, we agree with the Examiner that the
claimed “[additional] elements are common to computers of all types and are
recited at a high level of generality.” Final 4. We also agree that “the
applicant makes it explicitly clear, [in] the [S]pecification, that nothing is
required beyond a ‘general-purpose computer system’.” Id. (citing Spec. 8,
l. 4); see also Spec. 22, ll. 23–25 (“[A]ny computer system or systems may
be used[. T]he invention is not limited to any number, type, or configuration
of computer systems.”); id. at 9, l. 7–10, l. 13; 22, l. 15–25, l. 15; Figs. 1, 9–
10. We further agree that “a central server communicating with retail POS
systems was common and routine many years before the filing of the
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claimed invention.” Final 4. We also agree that “[t]he ‘configuration’ of the
invention is nothing but a single computer [(central server)]
. . . communicat[ing] with other computers, and . . . [this] was a ubiquitous
configuration in the retail-store space many years before . . . the present
invention.” Id. at 6.
We add that the claimed computer elements are the only additional
elements. Therefore, in light of our above agreement with the Examiner, we
determine the claimed combination of additional elements and judicial
exceptions amount to generic computer technology that merely applies the
recited judicial exceptions. See Guidance, 84 Fed. Reg. at 55 (“apply it”
bullet corresponding to the Guidance’s footnote 30). That is, the additional
elements are “mere instructions to apply a judicial exception.” Id. at n.30;
see also MPEP § 2106.05(f) (cited by the Guidance’s footnote 30 as
instructive for this issue).
For the foregoing reasons, claim 1 merely appends generic computer
technology to judicial exceptions.
APPELLANT’S ARGUMENTS
Appellant contends the Examiner has unreasonably characterized the
claimed invention. Br. 7. Appellant further contends the claimed invention
should be instead characterized as follows:
The instant application is directed to using a central server
receiving signals from various distributed store servers,
identifying store servers among the various store servers that
are associated with an identified outlier store and an identified
sister store, identifying an inelastic product at the outlier store
and reconfiguring the database associated with the store server
of the outlier store to adjust the markdown of the inelastic
product. . . . [As part thereof], the system is [also] directed to
selecting a pair of store servers from a large number of
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distributed store servers based on the content of databases
associated with each selected store server, and reconfiguring the
database of one of the selected store servers based on the
content of the database of the other selected store server. [T]he
system[, therefore,] does not provide [merely an]
information-based result[. R]ather, the result is reconfiguring
the store’s database via the store server to reflect the new
markdown.
Id. We are unpersuaded. Claim 1 is directed to the invention of the
Specification descriptions quoted by this Opinion. See supra 2–3. The
claimed servers (see above contention) are mere substitutes for the retailer’s
central office and stores—generally linking the central office and stores with
computers that nondescriptly apply the judicial exceptions. See supra 11–14
(Step 2A, Prong Two, and Step 2B); see also CLS Bank Int’l v. Alice
Corp. Pty., 717 F.3d 1269, 1291 (Fed. Cir. 2013) (“Although the system
claims associate certain computer components with some of the method
steps, none of the recited hardware offers a meaningful limitation beyond
generally linking the use of the method to . . . implementation via
computers.”) (internal quotation marks, citation, and bracketed matter
omitted), aff’d by Alice, 573 U.S. at 208.
As for the above-argued “reconfiguring the database of the outlier
store to adjust the markdown of the at least one product causes a Point-of-
Sale (POS) system” (claim 1), that is plainly a modern-day retailer’s generic
database operation for changing a product’s price; the modern analogue of a
retailer changing a markdown “in the books” and then accordantly changing
price tags.
Appellant also contends:
[The] claims solve a technical problem using a technical
solution (i.e., identifying and selecting a pair of store servers
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from a large number of distributed store servers based on the
content of databases associated with each store server, and
reconfiguring the database of one of the selected store servers
based on the content of the database of the other identified store
server).
Br. 8. We are unpersuaded. The importance of claiming a technical solution
is explained in McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1311
(Fed. Cir. 2016). McRO explains that a claim reciting a judicial exception is
nonetheless patent-eligible if reciting a specific mechanism that prevents
preemption of the exception. Id. at 1314. McRO states:
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, or the result of a certain
process because such patents would prohibit all other persons
from making the same thing by any means whatsoever. A
patent may issue for the means or method of producing a
certain result, or effect, and not for the result or effect produced.
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. (internal citations and quotation marks omitted). Rather than
implementing such a technical solution, Appellant’s claimed invention
invokes generic computer technology—e.g., “identifying [servers] . . . based
on the content of [their] databases . . . and reconfiguring the database of [a]
selected . . . server[] based on the content” (Br. 8 (block-quoted above))—to
implement the judicial exceptions. The claimed technology does not
prevent preemption of the following claimed judicial exceptions:
(i) communicating with retail stores; (ii) receiving information related to
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product sales in each retail store; (iii) calculating, using a regression analysis
based on the received product sales information, a total expected markdown
over a period of time for each retail store; (iv) generating a regression model
for the plurality of retail stores corresponding to the total expected
markdown for each retail store of the plurality of retail stores;
(v) identifying, based on the regression model, an outlier store that has a
total expected markdown greater than an expected total markdown threshold
in the regression model; (vi) identifying a sister store that has a similar
characteristic to the outlier store and a total expected markdown less than the
total expected markdown of the outlier store; (vii) comparing the total
expected markdown of the outlier store with the total expected markdown of
the sister store; (viii) identifying, based on the comparison between the total
expected markdown of the outlier store and the sister store, a product in the
outlier store that is not yet determined to be inelastic; (ix) analyzing a price,
a markdown, and sales of the product at predefined intervals to determine it
is an inelastic product; (x) reconfiguring a current markdown of the product
to a target level that is a predefined percentage less than a base price of the
product in response to a determination that the product is inelastic; and
(xi) adjusting the markdown of the product so as to cause a POS to reflect a
new price of the product.
Appellant also contends that claim 1 compels a finding of
patent-eligibility under DDR Holdings, LLC v. Hotels.com, L.P.,
773 F.3d 1245 (Fed. Cir. 2014), Enfish, LLC v. Microsoft Corp.,
822 F.3d 1327 (Fed. Cir. 2016), Bascom Glob. Internet Servs., Inc. v. AT&T
Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016), and Amdocs (Israel)
Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir. 2016). Br. 11–15.
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These decisions, like McRO, emphasize the requirement for a claimed
mechanism that prevents preemption of recited judicial exceptions. See
DDR, 773 F.3d at 1259 (The claims “do not attempt to preempt . . . making
two web pages look the same,” but “[r]ather . . . recite a specific way to
automate the creation of a composite web page.”); Enfish, 822 F.3d at 1339
(The claims “recited . . . a specific type of data structure . . . confirm[ing]
. . . the § 101 analysis has not been deceived by the ‘draftsman’s art.’”
(quoting Alice, 573 U.S. at 226)); Bascom, 827 F.3d at 1352 (The claims “do
not preempt . . . filtering content,” but rather “carve out a specific location
for the filtering system (a remote ISP server).”); Amdocs, 841 F.3d at
1301(“[C]laim 1 . . . is tied to a specific structure of various components
. . . [and thereby] narrowly drawn to not preempt any and all generic
enhancement of data in a similar system.”). As discussed with reference to
McRO, the argued features of Appellant’s claim 1 do not prevent preemption
of the judicial exceptions, but rather append generic technology to merely
apply the judicial exceptions.
Appellant also contends that claim 1 compels a finding of
patent-eligibility under Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299
(Fed. Cir. 2018). Unlike DDR, Enfish, Bascom, and Amdocs, Finjan does
expressly state a need for a claimed mechanism that prevents preemption of
the recited judicial exceptions. Such a mechanism was, nonetheless, the
underlying basis of Finjan’s holding. Namely, the claimed invention
“employ[ed] a new kind of file” to identify suspicious code and accordingly
did not preempt virus screening (the abstract idea). See 879 F.3d at 1305;
see also id. at 1304 (“[B]y itself, virus screening is well-known and
constitutes an abstract idea. . . . Here the claimed method does a good deal
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more.”) (internal citation and quotation marks omitted). Appellant does not
identify any claim element that prevents preemption of the above-identified
judicial exceptions, much less identify a “new kind” (id. at 1305) of
technology that “does a good deal more” (id. at 1304).
Referencing the Berkheimer Memorandum (see supra n. 2), Appellant
also contends the Examiner must present evidence that the claimed
additional elements constitute “well-understood, routine, conventional”
(herein “conventional”) technology. Br. 15–16. We are unpersuaded for
each of two reasons.
First, the Examiner addresses the Berkheimer Memorandum by citing
Alice, Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014),
Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253
(Fed. Cir. 2016), and Elec. Power Grp. (cited supra n.4) as support for
finding the claimed additional elements (see supra 11–13) constitute
conventional technology. Appellant does not dispute these decisions support
the Examiner’s findings that the claimed computer functions are
conventional.5
Second, even assuming (arguendo) the Examiner did not present such
evidence, the Examiner must do so only if the rejection rests on a finding
that an additional element constitutes a “well-understood, routine,
conventional” activity. See USPTO Berkheimer Memorandum 3 (“[A]n

5 As discussed, examples of those claimed computer functions include:
“gathering information, performing unspecified mathematics[,] making
comparisons . . . , and sending some information somewhere else as a result”
(Ans. 6); “chang[ing data] within the database, [e.g.,] changing a price” (id.);
“computers communicating with each other” (id. at 8); “receive signals . . .
including information” (Final 4); “calculate a mathematical result and
generate . . . . a broad class of mathematical models” (id.).
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additional element (or combination of elements) is not well-understood,
routine or conventional unless the examiner finds, and expressly supports a
rejection in writing with, one or more of the following . . .”). As discussed,
the claimed additional elements constitute mere instructions to apply an
abstract idea on a computer. See supra 14 (Step 2B). Neither Berkheimer
nor the USPTO Berkheimer Memorandum concerns mere instructions to
“apply” a judicial exception on a computer. See USPTO Berkheimer
Memorandum 1–2 (“Berkheimer informs the inquiry into . . . well-
understood, routine, conventional activity.”); see also id. at 3 (“This
memorandum revises . . . MPEP § 2106.07(a) . . . and . . . (b)); Guidance, 84
Fed. Reg. at 55 n.30 (“See MPEP 2106.05(f) for . . . mere instructions to
apply a judicial exception”); MPEP 2106.05(f) (“[T]he well-understood,
routine, conventional consideration (see MPEP § 2106.05(d)) . . . may assist
. . . a determination of . . . mere instructions to apply an exception.”
(emphasis added)).
CONCLUSION
Claim(s) Rejected Basis Affirmed Reversed
1–10, 12–24,
26–28
§ 101 1–10, 12–24,
26–28

DECISION
We affirm the rejection of claims 1–10, 12–24, and 26–28.
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