AT&T INTELLECTUAL PROPERTY II, L.P.

Patent Trials and Appeals Board

Dec 28, 2020

2020001577 (P.T.A.B. Dec. 28, 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.
13/835,121 03/15/2013 Thomas Killian 2006-A0514-
CON/27.6110USC
2972
82866 7590 12/28/2020
AT&T Legal Department - H&C
Attn: Patent Docketing
One AT&T Way
Room 2A212
Bedminster, NJ 07921
EXAMINER
NIGH, JAMES D
ART UNIT PAPER NUMBER
3685
NOTIFICATION DATE DELIVERY MODE
12/28/2020 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):
eOfficeActionDocs@att.com
jodi@hciplaw.com
katie@hciplaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte THOMAS KILLIAN
____________

Appeal 2020-001577
Application 13/835,1211
Technology Center 3600
____________

Before HUBERT C. LORIN, JOSEPH A. FISCHETTI, and
BRADLEY B. BAYAT, Administrative Patent Judges.

BAYAT, Administrative Patent Judge.

DECISION ON APPEAL

Appellant appeals under 35 U.S.C. § 134(a) from the Examiner’s
decision to reject claims 1, 5–8, 12–15, and 19–23, which constitute all
pending claims in the application.2 We have jurisdiction under 35 U.S.C.
§ 6(b).
We AFFIRM and designate our affirmance as a NEW GROUND OF
REJECTION pursuant to our authority under 37 C.F.R. § 41.50(b).

1 This application is a continuation of 11/553,639, filed October 27, 2006,
now U.S. 8,401,972 B2, issued March 19, 2013.
2 We use the term “Appellant” to refer to “applicant” as defined in 37 C.F.R.
§ 1.42. Appellant identifies AT&T Intellectual Property II, L.P. as the real
party in interest. Appeal Br. 3.
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STATEMENT OF THE CASE
Appellant’s “invention relates to watermarking signals and more
specifically to a presale watermarking of digital files prior to compression.”
Spec. ¶ 3.
Claimed Invention
Method claim 1, system claim 8, and computer-readable storage
medium claim 15 are independent and recite substantially similar subject
matter. See Appeal Br. 18–19, 20, Claims App.
Claim 1, reproduced below with added bracketed matter, is
representative of the claimed subject matter.
1. A method comprising:
[(a)] receiving a request from a purchaser to purchase a
digital file, the digital file comprising a plurality of samples,
wherein each respective sample is within the plurality of
samples;
[(b)] adding a watermark to the each respective sample
of the plurality of samples of the digital file, by adding a +1 or a
–1 to the respective sample according to a probability value and
according to a safeguard boundary related to both a sampling
value upper limit and a sampling value lower limit, to yield an
altered digital file;
[(c)] compressing, via a processor, the altered digital
file to yield a compressed digital file; and
[(d)] transmitting the compressed digital file to a device
associated with the purchaser such that a playback difference
between an unaltered version of the digital file and the altered
digital file is below a perception threshold.

Appeal Br. 18, Claims App. (emphases added).

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Rejections
Claims 1, 5–8, 12–15, and 19–23 stand rejected under 35 U.S.C. § 101
because the claimed invention is directed to a judicial exception without
significantly more.
Claims 1, 5–8, 12–15, and 19–23 stand rejected under 35 U.S.C.
§ 103(a) as being unpatentable over Lee (Lee et al., U.S. 2004/0247121 A1;
pub. Dec. 9, 2004) (“Lee”) and Levy (Levy et al., U.S. 2003/0167173 A1;
pub. Sept. 4, 2003) (“Levy”).
ANALYSIS
35 U.S.C. § 101
Under 35 U.S.C. § 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. The Supreme Court, however, has long interpreted § 101
to include an implicit exception: “[l]aws of nature, natural phenomena, and
abstract ideas” are not patentable. Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
573 U.S. 208, 216 (2014).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
566 U.S. 66 (2012), “for distinguishing patents that claim laws of nature,
natural phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts.” Alice, 573 U.S. at 217. The first step in that
analysis is to “determine whether the claims at issue are directed to one of
those patent-ineligible concepts.” Id. If the claims are not directed to a
patent-ineligible concept, e.g., an abstract idea, the inquiry ends. Otherwise,
the inquiry proceeds to the second step where the elements of the claims are
considered “individually and ‘as an ordered combination’” to determine
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whether there are additional elements that “‘transform the nature of the
claim’ into a patent-eligible application.” Id. (quoting Mayo, 566 U.S. at 79,
78). This is “a search for an ‘inventive concept’—i.e., an element or
combination of elements that is ‘sufficient to ensure that the patent in
practice amounts to significantly more than a patent upon the [ineligible
concept] itself.’” Id. at 217–18.
The Examiner rejects claims 1, 5–8, 12–15, and 19–23 as being
directed to patent-ineligible subject matter under the Alice framework and
evaluates claim 1 under the 2019 Revised Guidance, 84 Fed. Reg.3 Final
Act. 4–22; see also Advisory Act. 2. Appellant argues claims 1, 5–8, 12–15,
and 19–23 as a group. Appeal Br. 6–12. Pursuant to 37 C.F.R.
§ 42.37(c)(1)(iv), we select claim 1 as representative for the group, with
claims 5–8, 12–15, and 19–23 standing or falling therewith.
Statutory Categories under 35 U.S.C. § 101 (2019 Revised Guidance,
84 Fed. Reg., Step 1)
To determine subject matter eligibility under 35 U.S.C. § 101, the
Examiner must first determine if the claims fall into one of the four statutory
categories of invention: processes, machines, manufactures, or composition

3 The U.S. Patent and Trademark Office (“USPTO”) published revised
guidance for use by USPTO personnel in evaluating subject matter
eligibility under 35 U.S.C. § 101. 2019 REVISED PATENT SUBJECT MATTER
ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50, 57 (Jan. 7, 2019) (the “2019
Revised Guidance, 84 Fed. Reg.”). That guidance revised the USPTO’s
examination procedure with respect to the first step of the Alice framework
by (1) “[p]roviding groupings of subject matter that [are] considered an
abstract idea”; and (2) “clarifying that a claim is not ‘directed to’ a judicial
exception if the judicial exception is integrated into a practical application of
that exception.” 2019 Revised Guidance, 84 Fed. Reg. 50.

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of matter. See MPEP § 2106.03. The Examiner determines that claim 1
recites a process and is directed to one of the four categories of statutory
subject matter under 35 U.S.C. § 101. Final Act. 4.
We now turn to the two step Alice framework.
Step One of the Alice Framework (2019 Revised Guidance,
84 Fed. Reg., Step 2A)
Step 2A, Prong One
The first step in the Alice framework is to determine whether the
claims at issue are “directed to” a patent-ineligible concept, e.g., an abstract
idea. Alice, 573 U.S. at 217. This first step, as set forth in the 2019 Revised
Guidance, 84 Fed. Reg. (i.e., Step 2A), is a two-prong test; in Step 2A,
Prong 1, the Examiner looks to whether the claim recites a judicial
exception, e.g., one of the following three groupings of abstract ideas:
(1) mathematical concepts; (2) certain methods of organizing human
activity, e.g., fundamental economic principles or practices, commercial or
legal interactions; and (3) mental processes. 2019 Revised Guidance,
84 Fed. Reg. 54.
To that end, the Examiner determines that claim 1 is “directed towards
the organization of human activity through a combination of commercial and
legal interaction,” and falls “within one of the groupings of abstract ideas
involving commercial interactions directed to sales activities which in this
case involve a purchase of a file and modifying the file by adding a
watermark, compressing the file and transmitting the file to the purchaser
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device and therefore clearly meet[s] prong one of the new test.” Ans. 4; see
also Advisory Act. 2.4
Appellant disagrees and argues that “a request to purchase a digital
file is a minor incidental feature of the claims.” Appeal Br. 6. According to
Appellant, the primary feature of claim 1 is “adding a watermark to the
digital file to yield the altered digital file [which] does not naturally fall into
any of the commercial or legal interactions section of the category of certain
methods of organizing human activity.” Id. at 6–7. We agree that claim 1 is
better directed to a judicial exception other than commercial interactions
involving sales activties.
The claimed invention, however, is nevertheless directed to an
abstract idea, albeit for reasons different than those articulated by the
Examiner.
Appellant’s “invention relates to watermarking signals.” Spec. ¶ 3.
The Background section of Appellant’s Specification explains that when
attempting to prevent piracy or unauthorized copying of audio files, the
music industry often assumes the source of MP3 files to be illegal rather
than from an authorized owner under copyright law, and “proving or
disproving such assumption can be problematic.” Id. ¶ 4. According to
Appellant: “Digital rights management (DRM) schemes essentially sidestep

4 Because the Final Office Action was mailed prior to the 2019 Revised
Guidance, 84 Fed. Reg., the Examiner modified the 35 U.S.C. § 101
rejection to comply with the new guidelines. Appellant’s arguments “focus
on the Advisory Action as it is the only office action that has been provided
after the new Guidance.” Appeal Br. 5. Thereofore, we review the rejection
and reasoning advanced by the Examiner in the Advisory Action and
Answer.
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this issue by trying to make illegal use technically impossible” and
“render[ing] an end user’s experience in purchasing and downloading digital
files such as MP3 music files so difficult that the market can be stifled.” Id.
Appellant indicates that “[w]hat is needed in the art is a mechanism by
which copyrighted information can be tracked to the original purchaser
while not restricting the use of the distributed digital file or its functionality
in any way.” Id.
Appellant’s solution to the problem is watermarking a digital signal
by altering samples of a file by adding a number, which may be any symbol
or letter, such as a + or a –1 to each sample of the file according to a
probability value and compressing the file with the altered samples. Spec.
¶¶ 6, 16. “[A]fter compression of the digital file with the altered samples the
file is then distributed over any kind of network to a receiving device.” Id.
¶ 16. Therefore, Appellant’s “invention provides each purchaser of a digital
file, such as a music file, with a unique watermarked file [that] allows the
legitimate owner and copyright owner of the file to produce a receipt for its
purchase just as any other piece of merchandise,” which “protects the
copywight owner, the seller and the purchaser.” Id. ¶ 20.
Claim 1 describes a process for watermarking a digital file and recites
four steps: (a) receiving a request to purchase a digital file; (b) adding a
watermark to each sample of the digital file yielding an altered digital file;
(c) compressing the altered digital file to yield a compressed digital file; and
(d) transmitting the compressed digital file. Appeal Br. 18, Claims App.
We determine claim 1 recites an abstract idea because steps (b) and
(c) fall within the grouping of mental processes. The mental-processes
grouping includes claims that can be “performed by a human, mentally or
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with pen and paper.” Intellectual Ventures I LLC v. Symantec Corp., 838
F.3d 1307, 1335 (Fed. Cir. 2016).
Step (b)
Step (b) recites “adding a watermark to the each respective sample of
the plurality of samples of the digital file, by adding a +1 or a –1 to the
respective sample according to a probability value and according to a
safeguard boundary related to both a sampling value upper limit and a
sampling value lower limit, to yield an altered digital file.” Appeal Br. 18.
Notably, step (b) is devoid of any reference to a computer or any other
physical component. Appellant’s Specification neither defines a watermark
nor describes technical details for adding a watermark to each sample of a
digital file, which may be “an audio file, a video file, a multimedia file or a
text file and the like.” Spec. ¶ 17 (emphasis added). A watermark is defined
as “a marking in paper resulting from differences in thickness usually
produced by pressure of a projecting design in the mold or on a processing
roll and visible when the paper is held up to the light.”5 The Specification
describes “altering samples of the digital file by adding a number such as +
or –1 to each sample of file according to a probability value,” which is
preferably “a relatively small probability [but] any particular range of the
probability value is not an essential requirement of the invention.” Id. ¶¶ 16,
18.
As a non-limiting example, the probability value could be 1 in
500. Thus, if the digital file is comprised of 2000 samples, then
the method would include processing each of the 2000 samples
such that each would have a 1 in 500 chance of having a +1 or a

5 https://www.merriam-webster.com/dictionary/watermark, last visited Nov.
2020.
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-1 added to the respective sample. The new altered digital file
could, for example, have sample numbers 42, 589, 1030 and
1853 each being altered with the +1 or -1.
Appeal Br. 4. Unlike Appellant’s example of 2000 samples and a
probability value of 1 in 500, the breadth of claim 1 merely calls for adding
a + or –1 to a plurality of samples of a text file according to any probability
value which, under the broadest reasonable interpretation, can practically be
performed in the human mind and with pencil and paper.
Even if we consider the example algorithm provided in the
Specification of “a short program in C programming language which will
illustrate how the invention may be implemented,” we reach the same result.
Spec. ¶ 21. Without “limit[ing] the scope of the claims,” Appellant’s
algorithm illustrates how a watermark is added according to a probability
value and “shows example code which illustrates the safeguard value upper
limit and the sampling value lower limit,” as recited in step (b). Id. ¶ 22; see
also Appeal Br. 3. In other words, the functional language recited in step
(b), without any hardware, mirrors the short mathematical algorithm, which
is essentially a mental process. Electric Power Grp., LLC v. Alstom S.A.,
830 F.3d 1350, 1354 (Fed. Cir. 2016) (The Federal Circuit has “treated
analyzing information by steps people go through in their minds, or by
mathematical algorithms, without more, as essentially mental processes
within the abstract-idea category.”).
Similarly, in Digitech, the court held that “employ[ing] mathematical
algorithms to manipulate existing information to generate additional
information is not patent eligible.” Digitech Image Techs., LLC v. Elecs. for
Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014). There, the claims of
the challenged patent were directed to the abstract idea of organizing
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information through mathematical correlations. Id. at 1350–51. The claim
in Digitech “recite[d] a process of taking two data sets and combining them
into a single data set” simply by organizing existing data into a new form.
Id. at 1351. The court explained that a process that started with data, added
an algorithm, and ended with a new form of data was directed to an abstract
idea. Id. Similarly here, a mathematical algorithm is employed to
manipulate a digital file to add a watermark to generate an altered digital
file, although step (b) requires no input from a physical device. See
Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1340
(Fed. Cir. 2017) (Holding abstract claims “directed to . . . collecting,
displaying, and manipulating data.”).
Step (c)
Step (c) recites “compressing, via a processor, the altered digital file
to yield a compressed digital file.” Except for the recitation of a processor,
which is an additional element for consideration under Step 2A, Prong Two,
the step of compressing can practically be performed in the human mind.
The Specification does not define the term compressing or describe how it is
achieved. Compressing is defined as “[e]xpressing in a shorter form;
abridge.”6
Under the broadest reasonable intrerpretation, the claimed altered text
file can be compressed by expressing the altered text in a shorter or
abbreviated form to yield a compressed text file. Simply put, the act of
compressing text can be performed mentally, and expressed verbally or in
writing, by substituting abbreviated text or characters similar to shorthand.

6 https://www.lexico.com/en/definition/compress, last visited Nov. 2020.
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In the same way, the Federal Circuit in Recognicorp identified a
method “directed to the abstract idea of encoding and decoding image data”
as “reflect[ing] standard encoding and decoding, an abstract concept long
utilized to transmit information.” RecogniCorp, LLC v. Nintendo Co., 855
F.3d 1322, 1326 (Fed. Cir. 2017); see also Intellectual Ventures I LLC v.
Capital One Fin. Corp., 850 F.3d 1332, 1340–41 (Fed. Cir. 2017)
(organizing, displaying, and manipulating data encoded for human-and
machine-readability is directed to an abstract concept). The court likened
this to “[m]orse code, ordering food at a fast food restaurant via a numbering
system, and Paul Revere’s ‘one if by land, two if by sea’ signaling system all
exemplify encoding at one end and decoding at the other end.”
RecogniCorp, LLC, 855 F.3d at 1326. Step (c) similarly recites the abstract
idea of encoding text data.
Under the broadest reasonable interpretation of claim 1, steps (b) and
(c) recite abstract concepts that qualify as mental processes.
Step 2A, Prong Two
Having concluded that claim 1 recites a judicial exception, i.e., an
abstract idea (Step 2A, Prong 1), we next consider whether the claim recites
additional elements that integrate the judicial exception into a practical
application (Step 2A, Prong 2). 2019 Revised Guidance, 84 Fed. Reg. 51.
When a claim recites a judicial exception and fails to integrate the exception
into a practical application, the claim is “directed to” the judicial exception.
Id. at 55.
Our reviewing court clarified that a relevant inquiry is “to ask whether
the claims are directed to an improvement to computer functionality versus
being directed to an abstract idea.” Enfish, LLC v. Microsoft Corp., 822
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F.3d 1327, 1335 (Fed. Cir. 2016). The court contrasted claims “directed to
an improvement in the functioning of a computer” with claims “simply
adding conventional computer components to well-known business
practices,” or claims reciting “use of an abstract mathematical formula on
any general purpose computer,” or “a purely conventional computer
implementation of a mathematical formula,” or “generalized steps to be
performed on a computer using conventional computer activity.” Enfish,
822 F.3d. at 1338.
We acknowledge that “[s]oftware can make non-abstract
improvements to computer technology just as hardware improvements can,
and sometimes the improvements can be accomplished through either
route.” Id. at 1335. However, “to be directed to a patent-eligible
improvement to computer functionality, the claims must be directed to an
improvement to the functionality of the computer or network platform
itself.” Customedia Techs., LLC v. Dish Network Corp., 951 F.3d 1359,
1365 (Fed. Cir. 2020) (citing Enfish, 822 F.3d at 1336–39). Claim 1 is not
directed to a specific improvement to computer functionality. The additional
elements recited in claim 1 (italicized) are steps (a) and (d), and “processor”
recited in step (c). As for step (a), Appellant acknowledges that receiving “a
request to purchase a digital file is a minor incidental feature of the
[independent] claims.” Appeal Br. 6. Indeed, paragraph 16 of the
Specification discloses that “the step of receiving a request is not necessary.”
If the step of receiving a request from a purchaser to purchase a digital file is
incidental, consequently, transmitting or distributing the requested file to the
device of the purchaser in response, as recited in step (d), would also be
incidental.
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Appellant’s Specification supports this interpretation because the only
method embodiment of the invention fails to show any transmission of the
compressed file, and indicates that “the file is simply available for capable of
distribution in some manner.” Spec. ¶ 16, and Fig. 3 (emphasis added).
Moreover, the Specification states: “Typically, after compression of the
digital file with the altered samples the file is then distributed over any kind
of network to a receiving device and such aspects of the distribution, such as
billing, tracking, generating a receipt are also accomplished as is known in
the art.” Id. Therefore, receiving step (a) and transmitting step (d) merely
add insignificant extra-solution activity to the recited mental processes, and
when considered individually and in combination, do not in any way
indicate that the claim integrates the abstract idea into a practical
application.
A claim however may integrate the exception, for example, by
reciting a particular machine. 2019 Revised Guidance, 84 Fed. Reg. 55. For
example, the invention may use additional elements with a particular
machine or manufacture that is integral to the claim. Id. Claim 1’s
processor however, which is only recited in step (c), is not a particular
machine. The recited processor, covers a general purpose computer
executing the mental process described above. See Spec. ¶ 25 (“[P]ersonal
computers, hand-held devices, multi-processor systems, microprocessor-
based or programmable consumer electronics, network PCs, minicomputers,
mainframe computers, and the like.”). A general purpose processor that
merely executes the judicial exception as a tool is not a particular machine.
See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716–17 (Fed. Cir. 2014)
(cited in MPEP § 2106.05(b)(I)); see also DDR Holdings, LLC v.
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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.”).
Compressing step (c) does not use the processor in a way that
indicates the judicial exception has been integrated into a practical
application. Claim 1 simply relies on functional language to describe the
compressing step, and the Specification does not purport to implement any
improvement in compression technology. See In re TLI Commc’ns LLC
Patent Litig., 823 F.3d 607, 615 (Fed. Cir. 2016). Indeed, “[o]ur law
demands more” than claim language that “provides only a result-oriented
solution, with insufficient detail for how a computer accomplishes it.”
Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1362–
63 (Fed. Cir. 2017).
“[T]he ‘directed to’ inquiry applies a stage-one filter to claims,
considered in light of the [S]pecification, based on whether ‘their character
as a whole is directed to excluded subject matter.’” Enfish, 822 F.3d at 1335
(quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346
(Fed. Cir. 2015)). Appellant asserts that “[t]he primary feature of claim 1
relates to the technical processing of adding a watermark to the digital file to
yield the altered digital file[,]” yet, nothing technical is recited in step (b) of
claim 1. Appeal Br. 6. According to Appellant, “the focus and important
features of the claim are not the fact of the file being purchased but the
detailed and technical watermarking process,” however, adding a +1 or -1 to
samples of text files according to a probability/sampling value and devoid of
any implementation details or technical description does not permit us to
conclude that the claim as a whole is directed to something other than the
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abstract idea. Id. at 7. It is clear to us that the focus of claim 1 is not on a
specific improvement in computer technology, but rather, on a process that
itself qualifies as an abstract idea, for which a computer isnt’t even invoked
as a tool in the watermarking process. The character as a whole and the
focus of claim 1 is centered on the abstract idea.
Accordingly, we determine that claim 1 is directed to an abstract idea.
Step Two of the Alice Framework (2019 Revised Guidance,
84 Fed. Reg., Step 2B)
Having determined under step one of the Alice framework that claim 1
is directed to an abstract idea, we next consider under Step 2B of the 2019
Revised Guidance, 84 Fed. Reg., the second step of the Alice framework,
whether claim 1 includes additional elements or a combination of elements
that provides an “inventive concept,” i.e., whether the additional elements
amount to “significantly more” than the judicial exception itself.
2019 Revised Guidance, 84 Fed. Reg. 56.
We determine that the additional elements add no more than what is
well-understood, routine, and conventional. As discussed, receiving step (a)
and transmitting step (d) do not even recite utilizing a computer or any
physical device. Even if they did, courts have recognized these computer
functions as well‐understood, routine, and conventional functions when they
are claimed in a merely generic manner (e.g., at a high level of generality) or
as insignificant extra-solution activity, as here. See, e.g., OIP Techs., Inc., v.
Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (sending messages
over a network); see also buySAFE, Inc. v. Google, Inc., 765 F.3d 1350,
1355 (Fed. Cir. 2014) (computer receives and sends information over a
network). As discussed above, Appellant’s Specification acknowledges that
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such aspects of transmission and distribution are conventional and known in
the art. Spec. ¶ 16.
As for compressing step (c), the record contains no indication that
there is anything unconventional about data compression. See TLI, 823 F.3d
at 615. The only claimed computer element beyond the abstract idea, as
discussed above, is a conventional processor, which does not amount to an
inventive concept. In fact, the Specification makes clear that “[t]he basic
components are known to those of skill in the art and appropriate variations
are contemplated depending on the type of device, such as whether the
device is a small, handheld computing device, a desktop computer, or a
computer server” and that “[t]here is no restriction on the invention
operating on any particular hardware arrangement.” Spec. ¶¶ 12, 14, and 22
(“The general steps of the invention and modules disclosed herein for
performing various functions may be implemented in any programming
language on any type of computing device.”). On this record, these
additional elements, individually and in combination, do not provide an
inventive concept.
Considered as an ordered combination, the computer component of
Appellant’s claim adds nothing that is not already present when the steps are
considered separately. The sequence of data reception-analysis
(receiving/adding/compressing/transmitting) is equally generic and
conventional or otherwise held to be abstract. See Ultramercial, Inc. v.
Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014) (sequence of receiving,
selecting, offering for exchange, display, allowing access, and receiving
payment recited an abstraction), Inventor Holdings, LLC v. Bed Bath &
Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017) (holding that sequence
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of data retrieval, analysis, modification, generation, display, and
transmission was abstract).
As our analysis deviates from the Examiner as to why claim 1 is
directed to ineligible subject matter, we sustain the Examiner’s rejection and
designate our affirmance of independent claim 1 as a new ground of
rejection under 35 U.S.C. § 101, as well as claims 5–8, 12–15, and 19–23,
which fall with claim 1.
35 U.S.C. § 103(a)
We are persuaded the Examiner erred in rejecting independent
claim 1 as unpatentable over Lee and Levy because the Examiner’s
interpretation of step (b) as applied to Lee is inconsistent with the
Specification. See Reply Br. 8.
Step (b) recites, in part, “adding a+ 1 or a -1 to the respective sample
according to a probability value and according to a safeguard boundary
related to both a sampling value upper limit and a sampling value lower
limit, to yield an altered digital file.” Appeal Br. 18.
Appellant argues that the Examiner’s interpretation of this feature is
erroneous and inconsistent with the Specification becase “the probability
value is described (as an example) of being 1 in 10,000. Thus, each sample
has a 1 in 10,000 probability of having a+ 1 or a -1 added to it. Many
samples would have no value added and other (1 in 10,000) samples could
have a +1 added or a -1 added.” Reply Br. 8 (citing Spec. ¶ 18).
Appellant’s argument is persuasive of error because in applying Lee’s
examples in paragraphs 60 and 61, the Examiner correlates “adding 1,
adding 0, adding -1 or adding -2 which covers the range of values being
claimed and these operations would be performed in a probalistic manner
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Application 13/835,121

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based on the setting of sparseness index.” Ans. 8 (“Per MPEP § 2131.03 (II)
prior art which ‘teaches a range overlapping or touching the claimed range
anticipates if the prior art range discloses the claimed range with ‘sufficient
specificity.’”).
As Appellant points out, the Examiner “incorrectly interprets the
claim as the probability value being used to determine whether each sample
will get a + 1 or a -1. In other words, the Examiner is interpreting the claim
to cover where each sample gets some data added and the value of + 1 or -1
is chosen based on a probability value such that each sample then gets a + 1
or a -1.” Reply Br. 8. We agree that this interpretation is not consistent with
the claim language as supported by the Specification.
Accordingly, we do not sustain the rejection of claim 1 as
unpatentable over Lee and Levy, and independent claims 8 and 15, which
are rejected based on the same rationale. We also do not sustain the
rejection of dependent claims 5–7, 12–14, and 19–23 for the same reaons.
CONCLUSION
The rejection of claims 1, 5–8, 12–15, and 19–23 under 35 U.S.C.
§ 101 is affirmed and our affirmance is designated as a New Ground of
Rejection.
The rejection of claims 1, 5–8, 12–15, and 19–23 under 35 U.S.C.
§ 103(a) is reversed.
NEW GROUND OF REJECTION
This decision contains new grounds of rejection pursuant to 37 C.F.R.
§ 41.50(b). 37 C.F.R. § 41.50(b) provides “[a] new ground of rejection
pursuant to this paragraph shall not be considered final for judicial review.”
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Application 13/835,121

19
37 C.F.R. § 41.50(b) also provides that the Appellants, WITHIN
TWO MONTHS FROM THE DATE OF THE DECISION, must exercise
one of the following two options with respect to the new grounds of
rejection to avoid termination of the appeal as to the rejected claims:
(1) Reopen prosecution. Submit an appropriate amendment
of the claims so rejected or new evidence relating to the
claims so rejected, or both, and have the matter
reconsidered by the examiner, in which event the
proceeding will be remanded to the examiner. . . .

(2) Request rehearing. Request that the proceeding be
reheard under § 41.52 by the Board upon the same
record. . . .

DECISION SUMMARY
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1, 5–8, 12–
15, 19–23
101 Eligibility 1, 5–8, 12–
15, 19–23

1, 5–8, 12–
15, 19–23
103(a) Lee, Levy 1, 5–8,
12–15,
19–23
Overall
Outcome
1, 5–8, 12–
15, 19–23

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; 37 C.F.R. § 41.50(b)