Anbalagan, Karthik G. et al.

Patent Trials and Appeals Board

May 7, 2020

13075054 - (D) (P.T.A.B. May. 7, 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.
13/075,054 03/29/2011 Karthik G. Anbalagan AM2-0554US 1939
136607 7590 05/07/2020
Lee & Hayes P.C.
601 West Riverside Avenue
Suite 1400
Spokane, WA 99201
EXAMINER
SHERR, MARIA CRISTI OWEN
ART UNIT PAPER NUMBER
3685
NOTIFICATION DATE DELIVERY MODE
05/07/2020 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):
lhpto@leehayes.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte KARTHIK G. ANBALAGAN,
EMILY MARGARET ANDERSON, TOM KILLALEA, and
VALERIA A. PAKHOMOVA
Appeal 2019-004774
Application 13/075,054
Technology Center 3600
Before HUBERT C. LORIN, NINA L. MEDLOCK, and
MATTHEW S. MEYERS, Administrative Patent Judges.

MEYERS, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1–4, 6, 7, 9–17, 22, 25, 26, 29, 32–34,
and 36–42.
We have jurisdiction under 35 U.S.C. § 6(b).

1 We use the word Appellant to refer to “applicant” as defined in 37 C.F.R.
§ 1.42(a). Appellant identifies the real party in interest as Amazon
Technologies, Inc. Appeal Br. 3.
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We AFFIRM.
CLAIMED SUBJECT MATTER
Appellant’s claimed invention relates to “architectures and techniques
in which digital items, such as electronic books (or ‘eBook[s]’), may be
loaned and borrowed.” Spec. ¶ 16.
Claims 1, 13, and 25 are the independent claims on appeal. Claim 1,
reproduced below, is illustrative of the claimed subject matter:
1. A method implemented at least in part by one or more
computing devices having one or more processing units and one
or more memories, the method, comprising:
[(a)] managing access to a digital item protected by digital
rights management (DRM) that limits a number of times that
the digital item is to be provided for lending;
[(b)] receiving, by at least one of the one or more computing
devices, a plurality of messages, at least one message of the
plurality of messages comprising a first personal identifier with
a first indication of interest in borrowing the digital item, and at
least another message of the plurality of messages comprising a
second personal identifier with a second indication of interest in
borrowing the digital item;
[(c)] retrieving, by at least one of the one or more computing
devices, a first profile associated with the first personal
identifier;
[(d)] calculating, by at least one of the one or more computing
devices, a first metric for the first personal identifier, wherein
determining whether the first personal identifier is awarded a
loan of the digital item is based at least in part on the first
metric;
[(e)] retrieving, by at least one of the one or more computing
devices, a second profile associated with the second personal
identifier;
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[(f)] calculating, by at least one of the one or more computing
devices, a second metric for the second personal identifier,
wherein determining whether the second personal identifier is
awarded the loan of the digital item is based at least in part on
the second metric;
[(g)] determining that the second personal identifier was
previously selected to receive a different loan of a different
digital item;
[(h)] modifying, by at least one of the one or more computing
devices and based at least in part on determining that the second
personal identifier was previously selected to receive a different
loan of a different digital item, the second metric to create a
modified second metric, the modified second metric indicating
a decreased likelihood of the second personal identifier being
awarded the loan of the digital item;
[(i)] selecting, by at least one of the one or more computing
devices, either the first personal identifier or the second
personal identifier as a winning identifier based at least in part
on the first metric and the modified second metric; and
[(j)] sending the digital item, in compliance with the DRM, to
a device associated with the winning identifier.
Appeal Br. 42–43 (Claims Appendix).
REJECTION2
Claims 1–4, 6, 7, 9–17, 22, 25, 26, 29, 32–34, and 36–42 are rejected
under 35 U.S.C. § 101 as directed to a judicial exception without
significantly more.3

2 The rejections under 35 U.S.C. § 112 and 35 U.S.C. § 103 have been
withdrawn. Ans. 3.
3 Although claim 6 was omitted from the heading of the rejection (see Final
Act. 4–7), claim 6 depends from independent claim 1 and we do not see any
reason that claim 6 would not be included in the rejection under 35 U.S.C.
§ 101. Appellant understands claim 6 to be rejected under 35 U.S.C. § 101.
See Reply Br. 2 (“claims 1–4, 6–7, 9–17, 22, 25, 26, 29, 32–34, and 36–42
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OPINION
Appellant argues claims 1–4, 6, 7, 9–17, 22, 25, 26, 29, 32–34, and
36–42 as a group. Appeal Br. 15–31; Reply Br. 2–10. We select
independent claim 1 as representative. The remaining claims stand or fall
with claim 1. See 37 C.F.R. § 41.37(c)(1)(iv).
A. Section 101
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 U.S. 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 Court’s two-part 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

were rejected under 35 U.S.C. § 101”). Accordingly, we treat the rejection
under 35 U.S.C. § 101 as applicable to all pending claims.
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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
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 187; 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 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. (citation omitted)
(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
concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-
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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.
B. USPTO Section 101 Guidance
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101. 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(“2019 Revised Guidance”).4 “All USPTO personnel are, as a matter of
internal agency management, expected to follow the guidance.” Id. at 51;
see also October 2019 Update at 1.
Under the 2019 Revised Guidance and the October 2019
Update, 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 activity such as a fundamental economic
practice, or mental processes) (“Step 2A, Prong One”); and

4 In response to received public comments, the Office issued further
guidance on October 17, 2019, clarifying the 2019 Revised Guidance.
USPTO, October 2019 Update: Subject Matter Eligibility (the “October
2019 Update”) (available at https://www.uspto.gov/sites/default/files/
documents/peg_oct_2019_update.pdf).
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(2) additional elements that integrate the judicial exception into
a practical application (see MPEP §§ 2106.05(a)–(c), (e)–(h)
(9th ed. Rev. 08.2017, Jan. 2018)) (“Step 2A, Prong Two”).5
2019 Revised Guidance, 84 Fed. Reg. at 52–55.
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we 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.
2019 Revised Guidance, 84 Fed. Reg. at 52–56.
C. ANALYSIS
With regard to the first step of the Mayo/Alice framework and
Step 2A, Prong One of the 2019 Revised Guidelines, 84 Fed. Reg. at 54, the
Examiner determines that exemplary independent claim 1 broadly recites
“the abstract idea of making a choice as to which potential borrower would
be more reliable.” Final Act. 5; Ans. 3. More particularly, the Examiner
states that the limitations of independent claim 1 “recite applying an

5 This evaluation is performed by (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception, and
(b) evaluating those additional elements individually and in combination to
determine whether the claim as a whole integrates the exception into a
practical application. See 2019 Revised Guidance - Section III(A)(2), 84
Fed. Reg. 54–55.
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algorithm to compare two profiles and thereby choosing one to receive a
loan of item.” Ans. 4. The Examiner considers this to be an abstract idea,
inasmuch as the claimed concept is “grouped within the ‘certain methods of
organizing human activity’ and/or ‘mathematical concepts’ and/or ‘mental
processes.’” Id.
In response, Appellant argues that the Examiner’s characterization of
the claims is inaccurate because the invention does not assess reliability of
potential borrowers. Appeal Br. 16–18. According to Appellant, “the Office
has taken the alleged abstraction of the claims too far” and “seems to have
ignored many of the features of the claims when characterizing the claims.”
Id. at 18. According to Appellant
the claims are directed to “sending the digital item, in compliance
with the DRM, to a device associated with the winning
identifier,” “selecting, by at least one of the one or more
computing devices, either the first personal identifier or the
second personal identifier as a winning identifier based at least
in part on the first metric and the modified second metric,”
“calculating, by at least one of the one or more computing
devices, a second metric for the second personal identifier,
wherein determining whether the second personal identifier is
awarded the loan of the digital item is based at least in part on
the second metric,” and “modifying, by at least one of the one or
more computing devices and based at least in part on determining
that the second personal identifier was previously selected to
receive a different loan of a different digital item, the second
metric to create a modified second metric, the modified second
metric indicating a decreased likelihood of the second personal
identifier being awarded the loan of the digital item,” as recited
in claim 1.
Id. at 17–18.
We are not persuaded that the Examiner erred in determining that
independent claim 1 is directed to an abstract idea. The Federal Circuit has
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explained that “the ‘directed to’ inquiry applies a stage-one filter to claims,
considered in light of the specification, based on whether ‘their character as
a whole is directed to excluded subject matter.’” Enfish, LLC v. Microsoft
Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp.
v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). It asks
whether the focus of the claims is on a specific improvement in relevant
technology or on a process that itself qualifies as an “abstract idea” for
which computers are invoked merely as a tool. See id. at 1335–36. Here, it
is clear from the Specification (including the claim language) that the claims
focus on an abstract idea, and not on any improvement to technology and/or
a technical field.
The Specification is entitled “Identification of Borrowers for Digital
Items” and states that the disclosure “describes various architectures and
techniques in which digital items, such as electronic books (or ‘eBook[s]’),
may be loaned and borrowed.” Spec. ¶ 16. According to the Specification,
“content items may be distributed online to electronic devices, without
production of a portable physical medium, such as a tape cassette, CD,
DVD, or physical paper-based book” and “[a]s a result, many of the
transaction costs associated with traditional channels of distribution on
physical media are being reduced or eliminated entirely.” Id. ¶ 2. The
Specification discloses that “[t]his leads to the possibility of new economic
and social models involving selling, lending, and borrowing of digital
items.” Id. The Specification describes “architectures” that “provide a
functional environment to permit transfer of such digital items, as well as
tracking of the lending behavior as a ‘lending metric.’” Id. ¶ 16. For
example, “a user may lend a digital item, such as an eBook, to another user
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and receive an increase in his or her lending metric” and “[c]onversely, the
user may also borrow a digital item from another user in which case the
user’s lending metric is decreased.” Id. The Specification further discloses
that “each borrowing or lending transaction may be assigned a lending
metric value 318” that represents “the net effect of lending or borrowing on
the community of users able to lend and borrow digital items.” Id. ¶ 44.
“Contributions to the community or activities that generally increase the
flow of loaned digital items may be associated with a positive number”
whereas “activities that detract or consume digital items that are available to
be loaned may be represented as a negative number.” Id. According to the
Specification, “the lending metric may be thought of as a type of ‘goodwill’
or positive ‘karma’ that is increased by lending and decreased by borrowing”
and “various rewards or benefits may be provided to those with high lending
metrics.” Id. ¶ 45.
Consistent with this disclosure, independent claim 1 recites a method
comprising steps for: (1) managing access to a digital item, i.e., “managing
access to a digital item protected by digital rights management (DRM)”
(step (a)); (2) receiving two requests to borrow the digital item, i.e., “at least
one message . . . comprising a first personal identifier with a first indication
of interest in borrowing the digital item, and at least another message . . .
comprising a second personal identifier with a second indication of interest
in borrowing the digital item” (step (b)); (3) calculating first and second
metrics for the two requests based on their associated profiles, i.e.,
“calculating . . . a first metric for the first personal identifier” and
“calculating . . . a second metric for the second personal identifier”
(steps (c)–(f)); (4) “determining that the second personal identifier was
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previously selected to receive a different loan of a different digital item”
(step (g)); (5) modifying the second metric to create a “modified second
metric indicating a decreased likelihood of the second personal identifier
being awarded the loan of the digital item” (step (h)); (6) selecting a winner,
i.e., “selecting . . . either the first personal identifier or the second personal
identifier as a winning identifier based at least in part on the first metric and
the modified second metric” (step (i)); and (7) sending the digital item to the
winner, i.e., “sending the digital item, in compliance with the DRM, to a
device associated with the winning identifier” (step (j)).
Upon reviewing the Specification and independent claim 1, as
summarized above, we agree with the Examiner that independent claim 1
recites broadly a series of steps for “compar[ing] two profiles and thereby
choosing one to receive a loan of [an] item” (Ans. 4), which can be
characterized as a certain method of organizing human activity. Here,
independent claim 1 manages access to a digital item (step (a)), receives
messages (step (b)), calculates metrics and modifies one of the metrics
(steps (c)–(h)), and then selects a winner based on the calculated metrics
(step (i)) and sends the item to the winner (step (j)). In other words, claim 1
broadly recites a method for identifying or coordinating a loan of a digital
item.
Thus, it is clear that independent claim 1 recites a form of commercial
interaction that, under the 2019 Revised Guidance, falls under the category
of “[c]ertain methods of organizing human activity” and more specifically
“commercial or legal interactions (including agreements in the form of . . .
sales activities or behaviors; business relations).” 2019 Revised Guidance,
84 Fed. Reg. at 52. Accordingly, independent claim 1 recites an abstract
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idea. Cf. Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d
1314, 1324 (Fed. Cir. 2016) (“The claim limitations, analyzed individually
and ‘as a whole,’ recite nothing more than the collection of information to
generate a ‘credit grading’ and to facilitate anonymous loan shopping.”)
(citations omitted); LendingTree, LLC v. Zillow, Inc., 656 F. App’x 991,
992–93 (Fed. Cir. 2016) (non-precedential) (holding ineligible claims
directed to “coordinating loans” using “a filter comprising the plurality of
selection criteria of the database to select without manual intervention each
one of said plurality of lending institutions associated with a match”); and
Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) (finding the
claims at issue recited the abstract idea of using advertising as a currency as
applied to the particular technological environment of the Internet).
We also do not agree with Appellant that the Examiner over-
generalized claim 1 as directed to “compar[ing] two profiles and thereby
choosing one to receive a loan of [an] item” or, otherwise, failed to consider
the claim as a whole. See Appeal Br. 18. And, to the extent that Appellant
argues that the § 101 rejection cannot be sustained because the particular
language that the Examiner used in characterizing the concept to which
claim 1 is directed is not recited in the claim (see id. at 16–18), we note the
Examiner’s formulation of the abstract idea need not copy the claim
language.
Appellant argues that “independent claims 1, 13, and 25 include
specific, non-abstract features that provide an improved solution to real-
world technical problem(s), such as allowing the use of DRM protected
digital items using metrics” (Appeal Br. 19) and that “the present claims
address technical challenges with regard to providing compliance with
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digital rights management (DRM)” (Appeal Br. 20). In particular, Appellant
contends that “managing access to a digital item protected by digital rights
management (DRM) may improve the efficiency of use of the computing
resources, as well as the content being lent” which “may lead to more
optimized deployment of resources.” Id.; see also id. at 30; Reply Br. 7
(“the features recited in claim 1 determine the most efficient and optimal
lending/borrowing parameters . . .”). However, as described above, we find
no indication in the Specification that the operations recited in claim 1
improve the efficiency of any computer or other device. Claim 1 does not
require any particular DRM technology. Instead, claim 1 merely requires
the digital item to be “protected by” some unspecified type of “digital rights
management (DRM)” and calls for sending the digital item “in compliance
with the DRM.” The Specification broadly and generically describes the
implementation of DRM. The Specification teaches that “digital rights
management (DRM) or other technological features may prevent lending or
limit a number of times that the digital copy of the common work may be
lent.” Spec. ¶ 22. The Specification further describes:
The number of times the digital item can be loaned or borrowed
may be enforced by the lending module 412 through the use of
DRM or similar technology to prevent copying or transfer of data
from one device to another. The owner of a particular copy of a
digital item may choose to limit the number of times that the
digital item may be lent.
The limited number of times that [t]he digital item can be
lent or borrowed may also be specified by an entity having rights
in the digital item. This “rights holders” may include at least an
author and/or a publisher. In general, a rights holder may be any
person or entity that holds or has rights to reproduce, distribute,
import, export, create derivatives, perform or display publicly,
sell or transmit the content. In some instances, there may be more
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than one rights holder for the content (e.g., a publisher may have
rights to distribute the content in certain countries, while the
author retains the rights to distribute the content in other
countries; or publisher A may have the rights to distribute a book
in printed form and publisher B may have the rights to distribute
a book in eBook form). Examples of rights holders for various
types of digital content include, but are not limited to, authors,
publishers, music labels, movie studios, artists, songwriters,
performers, heirs, and delegates.
The ability of a rights holder to specify a number of times
that a digital item can be lent may lead to different pricing for
copies of a digital item depending on how many “loans” are
purchased with the digital item. For example one copy of the
digital item 400 owned by the lender 102, copy 400(1), may have
been purchased for $12.95 and be able to be loaned once.
However, another copy of the same digital item 400 owned by
user 410 and stored on user device 412, copy 400(2), may have
been purchased for a lower price of $9.99, but not include the
ability to loan this copy 400(2). While every copy of digital item
400 may be the same in that each contains the same content (e.g.,
same text, same audio, same video, etc.) each copy is also distinct
in that some copies may be lendable while others may not.
Thus, the ability to loan a digital item and being granted
permission to borrow a digital item may be valuable
commodities that can be brokered in a marketplace and even
monetized. For example, the value of borrowing a copy of digital
item 400 may be based the on difference in prices of a lendable,
400(1) for $12.95, and non-lendable, 400(2) for $9.99, versions
of the digital item 400.
Spec. ¶¶ 60–63. It is clear from the above disclosure that the DRM
limitations recited in claim 1 merely serve as a generic placeholder for any
method that may be used to limit the number of times that the digital item
may be lent. Viewed in light of the Specification, the claimed steps of
“managing access” and “sending the digital item, in compliance with the
DRM” relate to business and/or legal constraints specified by a “rights
holder,” and not to any specific computer technology. Thus, we find the
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focus of independent claim 1 is not on any technological advancement, but
rather on the implementation of the abstract idea, “for which computers are
invoked merely as a tool.” See Enfish, 822 F.3d at 1336. Here, claim 1
simply requires compliance with some unspecified DRM that limits a
number of times that the digital item is to be provided for lending. Cf.
Ericsson Inc. v. TCL Commc’n Tech. Holdings Ltd., No. 2018-2003,
2020 WL 1856498, at *6 (Fed. Cir. Apr. 14, 2020) (holding that claims “are
directed to the abstract idea of controlling access to, or limiting permission
to, resources.”). And to the extent that the method of claim 1 “may lead to
more optimized deployment” of digital items by selecting a winner based on
the calculated metrics and sending the digital item to the winner’s device
(Appeal Br. 20), Appellant does not persuasively explain how that amounts
to a technological, rather than a business improvement. Cf. OIP Techs., Inc.
v. Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (holding that
claims are directed to “the abstract idea of offer-based price optimization”).
Having concluded that claim 1 recites a judicial exception, i.e., an
abstract idea, we turn to the Step 2A, Prong Two of the 2019 Revised
Guidance and determine whether the claim integrates the recited judicial
exception into a practical application of the judicial exception. Here we look
to see if, for example, any additional elements of the claim (i) reflect an
improvement in the functioning of a computer or to another technological
field, (ii) implement the judicial exception with, or by use of, a particular
machine, (iii) effect a transformation or reduction of a particular article to a
different state or thing, or (iv) use the judicial exception in some other
meaningful way beyond generally linking the use of the judicial exception to
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a particular technological environment. See 2019 Revised Guidance,
84 Fed. Reg. at 55; see also MPEP §§ 2106.05(a)–(c), (e)–(h).
Here, the only additional elements recited in claim 1 beyond the
abstract idea are “one or more computing devices having one or more
processing units and one or more memories,” which perform steps (b)–(f),
(h), and (i), and “a device associated with the winning identifier” recited in
step (j). However, the additional elements are described generically in the
Specification (see, e.g., Spec. ¶¶ 21, 75–79, 116). We find no indication in
the Specification, nor does Appellant direct us to any indication, that the
steps recited in claim 1 invoke any assertedly inventive programming,
require any specialized computer hardware or other inventive computer
components, i.e., a particular machine, or that the claimed invention is
implemented using other than generic computer components to perform
generic computer functions. See DDR Holdings, LLC v. Hotels.com, L.P.,
773 F.3d 1245, 1256 (Fed. Cir. 2014) (“[A]fter Alice, there can remain no
doubt: recitation of generic computer limitations does not make an otherwise
ineligible claim patent-eligible.”).
We also find no indication in the Specification that the claimed
invention effects a transformation or reduction of a particular article to a
different state or thing. Nor do we find anything of record, short of attorney
argument, that attributes an improvement in computer technology and/or
functionality to the claimed invention or that otherwise indicates that the
claimed invention integrates the abstract idea into a “practical application,”
as that phrase is used in the 2019 Revised Guidance.6

6 The 2019 Revised Guidance references MPEP §§ 2106.05(a)–(c) and (e) in
describing the considerations that are indicative that an additional element or
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Appellant argues that independent claim 1 “integrate[s] the purported
judicial exception into a practical application” because “the calculated
metrics may improve the lending system by promoting and/or incentivizing
lending/borrowing activity (e.g., users with certain activity levels may have
a higher metric and may be more likely to be chosen), thereby improving the
system and ensuring customer satisfaction on both ends of the transaction.”
Reply Br. 7. Yet, we are not persuaded that promoting and/or incentivizing
lending/borrowing activity and ensuring customer satisfaction is “necessarily
rooted in computer technology” or a technological improvement as opposed
to an improvement in a business practice. Lenders, making decisions
between multiple potential borrowers, existed before, and still exist outside
of computer technology and computer networks. And the purported solution
here of, at best, generic computer components performing generic computer
functions, is not necessarily rooted in computer technology.
Appellant further argues that “the claims satisfy the requirements of
McRO” and “the claims are similar to the claims in Thales Visionix.” Reply
Br. 5; see also Appeal Br. 28–29 (discussing McRO). We disagree.
Independent claim 1, unlike the claims found non-abstract in prior cases,
uses generic computer technology to coordinate a loan of a digital item, and
does not recite an improvement to a particular computer technology. See
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

combination of elements integrates the judicial exception, e.g., the abstract
idea, into a practical application. 2019 Revised Guidance, 84 Fed. Reg.
at 55. If the recited judicial exception is integrated into a practical
application, as determined under one or more of these MPEP sections, the
claim is not “directed to” the judicial exception.
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specific asserted improvement in computer animation”). And unlike Thales
Visionix Inc. v. United States, 840 F.3d 1343, 1348–49 (Fed. Cir. 2017),
where the improvement was to a physical tracking system, here “the focus of
the claim[] is not [to] a physical-realm improvement but an improvement in
wholly abstract ideas — the selection and mathematical analysis of
information, followed by reporting or display of the results.” SAP Am., Inc.
v. InvestPic, LLC, 898 F.3d 1161, 1168 (Fed. Cir. 2018).
Based on the above, we conclude that independent claim 1 recites a
method of organizing human activity, i.e., an abstract idea, and that the
additional elements recited in the claim are no more than generic
components used as tools to perform the recited abstract idea. As such, they
do not integrate the abstract idea into a practical application. See Alice
Corp., 573 U.S. at 223–24 (“[W]holly generic computer implementation is
not generally the sort of ‘additional featur[e]’ that provides any ‘practical
assurance that the process is more than a drafting effort designed to
monopolize the [abstract idea] itself.’” (alterations in original) (quoting
Mayo, 566 U.S. at 77)). Accordingly, we agree with the Examiner that
independent claim 1 is directed to an abstract idea.
Having determined under step one of the Mayo/Alice framework that
claim 1 is directed to an abstract idea, we next consider under Step 2B of the
2019 Revised Guidance, the second step of the Mayo/Alice framework,
whether claim 1 includes additional elements or a combination of elements
that provides an “inventive concept,” i.e., whether an additional element or
combination of elements adds specific limitations beyond the judicial
exception that are not “well-understood, routine, conventional activity” in
the field (which is indicative that an inventive concept is present) or simply
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appends well-understood, routine, conventional activities previously known
to the industry to the judicial exception. 2019 Revised Guidance,
84 Fed. Reg. at 56.
Specifically referencing steps (h) and (i), as recited in claim 1,
Appellant argues that the § 101 rejection cannot be sustained because the
Examiner has failed to provide a “citation to a publication that demonstrates
the well-understood, routine, conventional nature of the additional
element(s).” Appeal Br. 23–24.
There is no dispute that an examiner must show — with supporting
facts — that certain claim elements are well-understood, routine, and
conventional when the examiner has made such a finding. See Berkheimer
v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018) (holding that the question
of whether a claim element or combination of elements is well-understood,
routine, and conventional to a skilled artisan in the relevant field is a
question of fact). Indeed, shortly after the Federal Circuit issued its decision
in Berkheimer, the USPTO issued an April 19, 2018 Memorandum to the
Patent Examining Corps entitled, “Changes in Examination Procedure
Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility
Decision (Berkheimer v. HP, Inc.)” (i.e., the “Berkheimer Memo” that
Appellant references),7 in which the Office revised the procedures set forth
in MPEP § 2106.07(a) (Formulating a Rejection For Lack of Subject Matter
Eligibility) and § 2106.07(b) (Evaluating Applicant’s Response). The Patent
Examining Corps was, thus, instructed that “in a step 2B analysis [i.e., an
analysis under step two of the Mayo/Alice framework], an additional element

7 Available at https://www.uspto.gov/sites/default/files/documents/memo-
berkheimer-20180419.PDF.
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(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” (1) a “citation to an express statement in the specification or
to a statement made by an applicant during prosecution that demonstrates the
well-understood, routine, conventional nature of the additional element(s)”;
(2) a “citation to one or more of the court decisions discussed in MPEP
§ 2106.05(d)(II) as noting the well-understood, routine, conventional nature
of the additional element(s)”; (3) a “citation to a publication that
demonstrates the well-understood, routine, conventional nature of the
additional element(s)”; and (4) a “statement that the examiner is taking
official notice of the well-understood, routine, conventional nature of the
additional element(s).” Berkheimer Memo at 3–4.
Appellant contends here that the Examiner must provide evidentiary
support for the conventionality or routineness of steps (h), (i), and (j), as
recited in claim 1. Appeal Br. 24. But, that argument fails at least because it
is not commensurate with the more limited scope of the Examiner’s
findings. See Final Act. 6 (“Receiving data, transmitting data, and
comparing data --- one of the most basic functions of a computer. All of
these computer functions are well-understood, routine, conventional
activities previously known to the industry.”). Cf. Bancorp Servs., L.L.C. v.
Sun Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012)
(“The computer required by some of Bancorp’s claims is employed only for
its most basic function, the performance of repetitive calculations, and as
such does not impose meaningful limits on the scope of those claims.”);
buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (“That
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a computer receives and sends the information over a network — with no
further specification — is not even arguably inventive.”).
Appellant references steps (h), (i), and (j), as recited in claim 1.
Appeal Br. 25. Yet, these steps are part of the abstract idea itself; they are
not additional elements to be considered when determining whether claim 1
includes additional elements or a combination of elements that is sufficient
to amount to significantly more than the judicial exception.
It could not be clearer from Alice, that under step two of the
Mayo/Alice framework, the elements of each claim are considered both
individually and “as an ordered combination” to determine whether the
additional elements, i.e., the elements other than the abstract idea itself,
“transform the nature of the claim” into a patent-eligible application.
Alice Corp., 573 U.S. at 217; see Mayo, 566 U.S. at 72–73 (requiring that “a
process that focuses upon the use of a natural law also contain other
elements or a combination of elements, sometimes referred to as an
‘inventive concept,’ sufficient to ensure that the patent in practice amounts
to significantly more than a patent upon the natural law itself” (emphasis
added)). In other words, the inventive concept under step two of the
Mayo/Alice framework cannot be the abstract idea itself:
It is clear from Mayo that the “inventive concept” cannot be the
abstract idea itself, and Berkheimer . . . leave[s] untouched the
numerous cases from this court which have held claims ineligible
because the only alleged “inventive concept” is the abstract idea.
Berkheimer v. HP Inc., 890 F.3d 1369, 1374 (Fed. Cir. 2018) (Moore, J.,
concurring); see also BSG Tech LLC v. BuySeasons, Inc., 899 F.3d 1281,
1290 (Fed. Cir. 2018) (“It has been clear since Alice that a claimed
invention’s use of the ineligible concept to which it is directed cannot supply
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the inventive concept that renders the invention ‘significantly more’ than
that ineligible concept.”).
The Examiner determined here, and we agree, that the only claim
elements beyond the abstract idea are the “one or more computing devices
having one or more processing units and one or more memories” and “a
device associated with the winning identifier,” i.e., generic computer
components used to perform generic computer functions (Ans. 4) —
a determination amply supported by, and fully consistent with the
Specification (see, e.g., Spec. ¶¶ 21, 75–79, 116).8
To the extent Appellant maintains that the claimed invention is patent
eligible, i.e., that claim 1 amounts to “significantly more” than an abstract
idea, because the claimed “operations are not currently known or performed”
and “are part of a novel combination that is distinct from prior systems”
(Appeal Br. 25), Appellant misapprehends the controlling precedent.
Neither a finding of novelty nor a non-obviousness determination
automatically leads to the conclusion that the claimed subject matter is
patent eligible. Although the second step in the Mayo/Alice framework is
termed a search for an “inventive concept,” the analysis is not an evaluation
of novelty or non-obviousness, but, rather, a search for “an element or
combination of elements that is ‘sufficient to ensure that the patent in
practice amounts to significantly more than a patent upon the [ineligible

8 The Berkheimer Memo, as described above, expressly directs that an
examiner may support the position that an additional element (or
combination of elements) is well-understood, routine or conventional with
“[a] citation to an express statement in the specification . . . that
demonstrates the well-understood, routine, conventional nature of the
additional element(s).” Berkheimer Memo at 3.
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concept] itself.’” Alice, 573 U.S. at 217–18 (alteration in original).
“Groundbreaking, innovative, or even brilliant discovery does not by itself
satisfy the § 101 inquiry.” Ass’n for Molecular Pathology v. Myriad
Genetics, Inc., 569 U.S. 576, 591 (2013). A novel and non-obvious claim
directed to a purely abstract idea is, nonetheless, patent-ineligible. See
Mayo, 566 U.S. at 90; see also Diehr, 450 U.S. at 188–89 (“The ‘novelty’ of
any element or steps in a process, or even of the process itself, is of no
relevance in determining whether the subject matter of a claim falls within
the § 101 categories of possibly patentable subject matter.”).
Appellant contends, with reference to limitations (h) and (i), that
claim 1 contains “a non-conventional sequence of features that is not merely
an abstract concept” and that “the individual claim elements represent part of
the technical solution, and carry inventive weight in the context of the
claims” (Appeal Br. 26), and that claim 1 is therefore analogous to the
situation in BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC,
827 F.3d 1341 (Fed. Cir. 2016).
However, Appellant does not persuasively explain how, and we do not
see how, Appellant’s claim 1 parallels the claims in BASCOM, which recited
a “non-conventional and non-generic arrangement of known, conventional
pieces” within a network, the arrangement of elements being “a technical
improvement over [the] prior art ways of filtering.” See BASCOM, 827 F.3d
at 1350. In BASCOM, the court determined that “[b]y taking a prior art filter
solution (one-size-fits-all filter at the ISP server) and making it more
dynamic and efficient (providing individualized filtering at the ISP server),
the claimed invention represents a ‘software-based invention[ ] that
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improve[s] the performance of the computer system itself.’” Id. at 1351
(second and third alterations in original).
In contrast, independent claim 1 does not require any non-
conventional and non-generic arrangement of known computer components
on a network. Nor does Appellant show in the claim that the solution is
technology-based, a technical improvement over conventional and routine
ways of selecting between multiple borrowers, or an improvement to the
performance of the computer system itself. For example, claim 1 does not
require any particular arrangement of the “one or more computing devices
having one or more processing units and one or more memories” and “a
device associated with the winning identifier.”
We are also unpersuaded by Appellant’s argument that “the solutions
claimed in independent claims 1, 13, and 25 are necessarily rooted in
computer technology” because “the claimed subject matter necessarily relies
on computers to receive provide [sic] compliance with digital rights
management (DRM)” and “the storing of the billing data in a data store
requires computer storage and network access.” Appeal Br. 27. As our
reviewing court has made clear, “relying on a computer to perform routine
tasks more quickly or more accurately is insufficient to render a claim patent
eligible.” OIP Techs., 788 F.3d at 1363. See also Versata Dev. Grp., Inc. v.
SAP Am., Inc., 793 F.3d 1306, 1335 (Fed. Cir. 2015) (“The steps in
Versata’s claims (e.g., arranging, storing, retrieving, sorting, eliminating,
determining) are conventional, routine, and well-known. They involve the
normal, basic functions of a computer.”).
Viewed as a whole, independent claim 1 simply recites a series of
steps instructing how to select a winner between two personal identifiers
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interested in borrowing a digital item. See Ultramercial, 772 F.3d at 716
(“[T]he claimed sequence of steps comprises only ‘conventional steps,
specified at a high level of generality,’ which is insufficient to supply an
‘inventive concept.’” (citing Alice, 573 U.S. at 222)). Here, independent
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, as discussed above with respect to Prong Two of Step 2A.
Instead, independent claim 1 amounts to nothing significantly more than an
instruction to apply the abstract idea using a generic computer, which under
our precedents, is not enough to transform an abstract idea into a patent-
eligible invention. See Alice, 573 U.S. at 226.
Finally, Appellant argues that the present “claims would not pre-empt
or monopolize a whole field” because “there may be various other
procedures for managing the lending of digital items and providing
compliance with DRM other than the systems and methods claimed herein.”
Appeal Br. 30; see also id. at 28 (“allowance of claims would not grant a
monopoly over the broad fields of digital rights management”); Reply Br. 8–
10. Appellant’s preemption argument does not, however, alter our § 101
analysis. Preemption concerns are fully addressed and made moot where a
patent’s claims are deemed to disclose patent-ineligible subject matter under
the two-part framework described in Mayo and Alice. Ariosa Diagnostics,
Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015). “While
preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility.” Id.
Appellant’s other arguments, including those directed to now-
superseded USPTO guidance, have been considered but are not persuasive
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of error. See 2019 Revised Guidance, 84 Fed. Reg. at 51 (“Eligibility-
related guidance issued prior to the Ninth Edition, R–08.2017, of the MPEP
(published Jan. 2018) should not be relied upon.”).
We are not persuaded, on the present record, that the Examiner erred
in rejecting independent claim 1 under 35 U.S.C. § 101. Therefore, we
sustain the Examiner’s rejection of independent claim 1, and claims 2–4, 6,
7, 9–17, 22, 25, 26, 29, 32–34, and 36–42, which fall with independent
claim 1.
CONCLUSION
In summary:
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–4, 6, 7,
9–17, 22,
25, 26, 29,
32–34, 36–
42
101 Eligibility 1–4, 6, 7,
9–17, 22,
25, 26, 29,
32–34, 36–
42

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). See 37 C.F.R.
§ 1.136(a)(1)(iv).
AFFIRMED