CFPH, LLC

Patent Trials and Appeals Board

Apr 7, 2020

13770087 - (D) (P.T.A.B. Apr. 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.
13/770,087 02/19/2013 Howard W. Lutnick 09-2317-C1 4621
63710 7590 04/07/2020
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
LEVINE, ADAM L
ART UNIT PAPER NUMBER
3625
NOTIFICATION DATE DELIVERY MODE
04/07/2020 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):
lkorovich@cantor.com
patentdocketing@cantor.com
phowe@cantor.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

Ex parte HOWARD W. LUTNICK, DEAN P. ALDERUCCI and
THOMAS D. BRADSHAW

Appeal 2019-001337
Application 13/770,087
Technology Center 3600

Before ROBERT E. NAPPI, CARL L. SILVERMAN, and
MICHAEL T. CYGAN, Administrative Patent Judges.

CYGAN, 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 16, 18, 20–21, 23–24, 26–36, 38, 40,
and 42. Appeal Br. 2. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. Appellant identifies the real party in interest as CFPH,
LLC. Appeal Br. 3.
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CLAIMED SUBJECT MATTER
The claimed invention generally relates to facilitating electronic
trading of works of art. Appeal Br. 2–4 (citing Spec. ¶¶ 1–270).2
Independent claim 1 is illustrative:
1. A method for facilitating electronic trading of works of
art over a communication network with interfaces of computing
devices, the method comprising:
determining an art allotment value for a first participant based
at least in part on a first quantity of ownership units associated
with the first participant, the first quantity of ownership units
being ownership units in a pool comprising a plurality of works
of art, the plurality of works of art comprising at least one first
work of art and a second work of art;
receiving by at least one processor, from an interface of a
computing device, rating information about at least one
category for each of the plurality of works of art including the
at least one first work of art and the second work of art, the
rating information comprising at least one first rating in at least
one category for the at least one first work of art and a second
rating in the at least one category for the second work of art,
each category comprising at least one of a genre of art,
historical time period, style of art, an artist, a medium of art, a
color scheme of art, and a field of art;
receiving by the at least one processor, from an interface of a
computing device, a value of the at least one first work of art;
determining by the at least one processor a current value of the
second work of art based on the at least one first rating, the

2 Appellant’s “Summary of Claimed Subject Matter” consists entirely of the
language of the independent clams and citations to the entirety of the
Specification and Figures. Appeal Br. 2–4. Appellant’s attention is directed
towards the purposes of the “concise” summary required by 37 C.F.R.
§ 41.37(c)(1)(v), as set forth in the 2004 rulemaking that promulgated the
rule. 69 Fed. Reg. 49959, 49976–49977.
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second rating, and the received value of the at least one first
work of art;
receiving, by the at least one processor, from an interface of a
computing device of a first participant a request to receive the
second work of art at a first geographic location designated by
the first participant;
responsive to receiving from the first participant the request to
receive the second work of art, determining, by the at least one
processor, whether to fulfill the request based at least in part on
the art allotment value of the first participant and the
determined current value of the second work of art, in which the
act of determining whether to fulfill the request comprises
determining to fulfill the request; and responsive to determining
to fulfill the request, causing, by the at least one processor, the
second work of art to be delivered to the first geographic
location designated by the first participant.
Appeal Br. 22–23 (Claims App.).
Independent claims 36 and 42 recite an apparatus and a storage
medium, respectively, that are similar in scope with claim 16. Id. at 28–31.
Dependent claims 18, 20–21, 23–24, 26–35, 38, and 40 each incorporate the
limitations of their respective independent claims. Id. at 23–30. Claims 1–
15, 17, 19, 22, 25, 37, 39, and 41 have been cancelled during prosecution.
Id. at 22–30.
REJECTION
Claims 16, 18, 20–21, 23–24, 26–36, 38, 40, and 42 are rejected under
35 U.S.C. § 101 as being ineligible subject matter.

OPINION
Patent-eligible subject matter is defined in 35 U.S.C. § 101 of the
Patent Act, which recites:
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Whoever invents or discovers any new and useful process,
machine, manufacture, or composition of matter, or any new
and useful improvement thereof, may obtain a patent therefor,
subject to the conditions and requirements of this title.
There is, however, an implicit, longstanding exception to patent-
eligible subject matter in 35 U.S.C. § 101: “[l]aws of nature, natural
phenomena, and abstract ideas are not patentable.” Alice Corp. v. CLS Bank
Int’l, 573 U.S. 208, 216 (2014) (citation omitted). This exception precludes
patenting of “the basic tools of scientific and technological work” from
which all inventions spring. Id. at 216–17 (quotation marks and citation
omitted). Invention or discovery under § 101 is distinguished as being the
application of such tools to an end otherwise satisfying the requirements of
the patent statutes. See Gottschalk v. Benson, 409 U.S. 63, 67 (1972).
The Supreme Court has established a framework for this eligibility
determination. Where a claim is directed towards a law of nature, natural
phenomena, or abstract idea, the elements of the claim as a whole must
ensure that the claim, in practice, amounts to significantly more than a patent
on the law of nature, natural phenomena, or abstract idea itself. Alice, 573
U.S. at 217–18. In applying this eligibility analysis, our reviewing court has
stated, “the decisional mechanism courts now apply is to examine earlier
cases in which a similar or parallel descriptive nature can be seen[,] . . . the
classic common law methodology for creating law when a single governing
definitional context is not available.” Amdocs (Isr.) Ltd. v. Openet Telecom,
Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016) (citation omitted).
To address the growing body of precedent, the USPTO recently
published revised examination guidance on the application of § 101. See
2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50,
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50 (Jan. 7, 2019) (hereinafter 2019 Guidance). The 2019 Guidance seeks to
improve the clarity of the subject matter eligibility analysis and improve
consistency of this analysis across the USPTO. Id.
Under the 2019 Guidance, we first look to whether the claim is
directed to a judicial exception because:
(1) the claim recites a law of nature, natural phenomenon, or abstract
idea, the last of which includes certain groupings, identified as
mathematical concepts, certain methods of organizing human activity
and mental processes; and
(2) the claim as a whole fails to recite additional elements that
integrate the judicial exception into a practical application (see
MANUAL OF PATENT EXAMINATION PROCEDURE (hereinafter “MPEP”)
§ 2106.05(a)–(c), (e)–(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then look to whether the claim:
adds a specific limitation beyond the judicial exception that are not
“well-understood, routine, conventional” in the field (see MPEP
§ 2106.05(d)); or instead,
simply appends well-understood, routine, conventional activities
previously known to the industry, specified at a high level of
generality, to the judicial exception.
See 2019 Guidance, passim.
A. Analysis
We have reviewed the Examiner’s subject matter eligibility rejection
(Final Act. 8–14; Ans. 3–6) in light of Appellant’s contentions that the
Examiner has erred (Appeal Br. 9–15; Reply Br. 2–5). We are not
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persuaded by Appellant’s contention of Examiner error in rejecting all of the
pending claims, 16, 18, 20–21, 23–24, 26–36, 38, 40, and 42, under 35
U.S.C. §101. Because Appellant does not argue any claim separately, we
select claim 16 as representative of the grouping, and claims 18, 20–21, 23–
24, 26–36, 38, 40, and 42 stand or fall with claim 16. 37 C.F.R.
§ 41.37(c)(1)(iv).
1. “Recites an Abstract Idea”
The Examiner finds claim 16 directed to the concept of monetization
of art works by converting them into ownership units in a pooled asset
account based on valuations. Final Act. 10. Specifically, the Examiner
finds claim 16 to recite an abstract idea in the form of the following
identified limitations:
"determining an art allotment value for a first participant based
at least in part on a first quantity of ownership units associated
with the first participant, the first quantity of ownership units
being ownership units in a pool comprising a plurality of works
of art, the plurality of works of art comprising at least one first
work of art and a second work of art; receiving [. . .] from an
interface [. . .] rating information about at least one category for
each of the plurality of works of art, including the at least one
first work of art and the second work of art, the rating
information comprising at least one first rating in at least one
category for the at least one first work of art and a second rating
in the at least one category for the second work of art, each
category comprising at least one of a genre of art, historical
time period, style of art, an artist, a medium of art, a color
scheme of art, and a field of art; receiving [. . .] from an
interface [. . .] a value of the at least one first work of art;
determining [. . .] a current value of the second work of art
based on the at least one first rating, the second rating, and the
received value of the at least one first work of art; receiving [. .
.] from an interface [. . .] of a first participant a request to
receive the second work of art at a first geographic location
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designated by the first participant; responsive to receiving from
the first participant the request to receive the second work of
art, determining [. . .] whether to fulfill the request based at
least in part on the art allotment value of the first participant
and the determined current value of the second work of art, in
which the act of determining whether to fulfill the request
comprises determining to fulfill the request; and responsive to
determining to fulfill the request, causing [. . .] the second work
of art to be delivered to the first geographic location designated
by the first participant.
Id. at 9–10.
The Examiner has found these limitations to recite a fundamental
economic practice that is similar to concepts previously found abstract by
the courts. Id. at 10. The USPTO’s 2019 Guidance states that the abstract
idea exception includes certain methods of organizing human activity, which
include “fundamental economic principles or practices . . . commercial or
legal interactions [and] managing personal behavior or relationships or
actions between people.” 2019 Guidance, 84 Fed. Reg. at 52. Examples of
such methods of organizing activity in the 2019 Guidance include
“agreements in the form of contracts; legal obligations[;] sales activities or
behaviors [and] business relations].” Id.
We agree with the Examiner’s determination that the above-identified
limitations of claim 16, involving the determination of allotment value based
on ownership units in a pool and other data, recite the type of commercial,
economic interaction characteristic of those certain methods of organizing
human activity that have been identified as abstract ideas. October 2019
Update at 4–6. Consequently, we agree with the Examiner that claim 16
recites an abstract idea.
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a) “Directed to an Abstract Idea”
Having determined that claim 16 recites an abstract idea, we next
determine, under Step 2A, Prong 2 of the 2019 Guidance, whether the claims
are directed to that abstract idea, or whether the claims have additional
elements that integrate the abstract idea into a practical application of that
abstract idea. 84 Fed. Reg. at 54.
The Examiner finds claim 16 to have elements additional to those
limitations reciting an abstract idea; namely, works of art, processor, and a
computing device. Final Act. 11. The Examiner further determines that the
claim is directed to the above-identified abstract idea because the additional
elements
do not improve computer functionality by specifically asserting
an improvement in computer capabilities, instead invoking
computers only as a tool, and they do not present a new process
created using different rules especially for implementation by a
computer that enables computers to perform an activity that
could previously be performed only by humans.
Id. at 10.
Appellant argues that the claimed invention “may help computer
performance” because the claimed techniques “may help control activity
over the network and control computer workload including computer
resources.” Appeal Br. 10–11; Reply Br. 3–4 (citing Spec. ¶¶ 179, 240–
243). Appellant draws an analogy to the eligible invention at issue in Core
Wireless Licensing S.A.R.L. v. LG Electronics Inc., 880 F.3d 1356 (Fed. Cir.
2018). Id. at 12–13. Appellant argues that the claimed invention provides
an improved interface that provides advantages over prior art systems and
improves the efficiency of the electronic devices. Id. at 13.
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An improvement to a technology or technical field may be indicative
that an additional element or combination of elements integrates the
exception into a practical application. 2019 Guidance, 84 Fed. Reg. at 55.
However, an additional element that merely includes instructions to
implement an abstract idea on a computer, or merely uses a computer as a
tool to perform an abstract idea, may be indicative that the judicial exception
is not integrated into a practical application. Id.
The Examiner finds, and we agree, that Appellant has not shown any
improvement to a computer itself. Ans. 4. The additional elements of
processor and computing device are described as executing instructions to
gather data and to compare data with the goal of identifying “a quantity of
shares of the legal ownership entity . . . based on the participant value
determined for the participant.” Spec ¶ 120. The computer instructions
themselves are not described in technological detail beyond the tasks they
perform. Spec. ¶ 97 (“It is well known to one of ordinary skill in the art that
a specified function may be implemented via different algorithms, and any
of a number of different algorithms would be a mere design choice for
carrying out the specified function.”). Appellant has not explained how the
alleged improvement to computer functioning necessarily results from the
involvement of the claimed technological components, rather than from the
tasks themselves that the Examiner has identified as the abstract idea.
With respect to Appellant’s invocation of Core Wireless, the decision
in Core Wireless relied, in part, on a determination that the claims recited “a
specific manner of displaying a limited set of information to the user, rather
than using conventional user interface methods to display a generic index on
a computer.” Core Wireless, 880 F.3d at 1362–1363 (specifying a particular
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manner by which an application summary window is reached directly from a
particular menu while one or more applications are in an un-launched state).
Appellant alleges, but does not explain, a specific manner of performing the
computerized functions, so as to provide a technological improvement to the
computer itself. Appeal Br. 10–11; Reply Br. 3–4. Instead, the computer
may perform its functions by any suitable algorithm. Spec ¶ 95.
Accordingly, the facts before us are distinguishable from those presented in
Core Wireless.
Our reviewing court provides further guidance: “‘[t]he mere
automation of manual processes using generic computers’ . . . ‘does not
constitute a patentable improvement in computer technology.’” Trading
Techs. Int’l v. IBG LLC, 921 F.3d 1378, 1384 (Fed. Cir. 2019) (quoting
Credit Acceptance Corp. v. Westlake Servs., 859 F.3d 1044, 1055 (Fed. Cir.
2017)). USPTO examination procedure also requires that “the claim must
include more than mere instructions to perform the method on a generic
component or machinery to qualify as an improvement to an existing
technology.” MPEP § 2106.05(a). Consequently, we are not persuaded that
the additional elements of claim 16 reflect an improvement in the
functioning of a computer, or an improvement to another technology or
technical field.
We instead agree with the Examiner’s determination that the
additional elements of claim 16 are instructions to implement the claimed
technique of assembling data to make decisions on legal and financial
determinations in the field of art; in effect, using a generically claimed
computer as a tool for that purpose.
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For these reasons, we are not persuaded that claim 16 is directed to
any improvement in a computer, a technology or a technological field so as
to show error in the Examiner’s determination that the additionally recited
elements are not more than a processing tool that aids in the above-identified
judicially excepted method of organizing human activity. Consequently, we
are not persuaded of error in the Examiner’s determination that claim 16 is
directed to an abstract idea.
Appellant further argues that the claims do not preempt all processes
for achieving the intended result. However, as recognized by Appellant,
“the absence of complete preemption does not demonstrate [p]atent
eligibility.” Appeal Br. 15 (quoting Ariosa Diagnostics, Inc. v. Sequenom,
Inc., 788 F.3d. 1371, 1379 (Fed. Cir. 2015) (emphasis in Appeal Br.
omitted). We are not persuaded of error by Appellant’s preemption
argument because preemption concerns are addressed by the Supreme
Court’s eligibility framework, which, as applied here, has resulted in a
finding of patent ineligible subject matter, infra. Ariosa, 788 F.3d at 1379
(stating “[w]here a patent's claims are deemed only to disclose patent
ineligible subject matter under the Mayo framework, . . . preemption
concerns are fully addressed and made moot”). A lack of complete
preemption does not make the claims any less abstract. See OIP Techs., Inc.
v. Amazon.com, Inc., 788 F.3d 1359, 1362–1363 (“[T]hat the claims do not
preempt all price optimization or may be limited to price optimization in the
e-commerce setting do not make them any less abstract.”).
b) “Significantly More Than an Abstract Idea”
The Examiner has determined that the additional elements of
processor and computer do not amount to significantly more than the
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abstract idea when considered both individually and as a combination, since
they amount to no more than a generic computer performing generic
computer functions that would be routine, conventional and well-understood
to one of ordinary skill in the computer art. Final Act. 8. The Examiner
relies on the Specification as providing recognition that the claimed
processor and computer are no more than general purpose computing
devices performing well-understood, routine, and conventional computer
functions. Final Act. 12–14 (citing Spec. ¶¶ 99–100).
Appellant alleges, without any detailed explanation, that the Examiner
has not based such a determination on a fact as required by the USPTO’s
Berkheimer memorandum. Reply Br. 2. However, the Berkheimer
memorandum provides for a “citation to an express statement in the
specification . . . that demonstrates the well-understood, routine,
conventional nature of the additional element(s).” Id. (quoting Changes in
Examination Procedure Pertaining to Subject Matter Eligibility, Recent
Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.) (April 19,
2018), available at https://www.uspto.gov/sites/default/files
/documents/memo-berkheimer-20180419.PDF. The Examiner has cited
specific portions of the Specification to support the Examiner’s
determination. Final Act. 12–14. Appellant has not explained persuasively
why the Examiner’s characterization of the functions of the computer and
processor, based on the description of those components in the Specification,
is in error.
Furthermore, generically claimed elements of computers and
computer databases have been found to be no more than well-understood,
routine, and conventional activity in the context of gathering and assembling
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data. See, e.g., Berkheimer v. HP Inc., 890 F.3d 1369, 1370 (Fed. Cir. 2018)
(“The conventional limitations of claim 1, combined with limitations of
analyzing and comparing data and reconciling differences between the data .
. . amount to no more than performing the abstract idea of parsing and
comparing data with conventional computer components); Ultramercial, Inc.
v. Hulu, LLC, 772 F.3d 709, 716 (updating an activity log by computer is
well-understood, routine, conventional activity). As explained by the
Supreme Court, the presence of a generic computer performing generic
computer functions, such as calculation and transmission of data, is not
enough to transform an abstract idea into a patent-eligible invention. Alice
Corp. v. CLS Bank, 573 U.S. 208, 225–226 (2014). Here, the processor and
computer function as computational tools to store data (pertaining to
ownership units, rating information, value of a first work of art), generate
data (pertaining to a current value of a second work of art) based on user
selections, compare data (determining to fulfill a request based on the art
allotment value of the first participant and the determined current value of
the second work of art), and to enable communication (to deliver art). Under
our governing case law, this is not enough to show that the processor and
computer cause claim 16 to be significantly more than the identified abstract
idea. Accordingly, we are not persuaded by Appellant’s argument.
In view of the foregoing, under the 2019 Guidance, informed by our
governing case law concerning 35 U.S.C. § 101, Appellant has not shown
the Examiner erred in concluding claim 16 is directed to a judicial exception,
i.e., an abstract idea, without significantly more, and thus is patent-ineligible
under § 101. We therefore sustain the Examiner’s rejection of claim 16.
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Since claims 18, 20–21, 23–24, 26–36, 38, 40, and 42 stand or fall with
claim 16, we therefore sustain the Examiner’s rejection of those claims.

CONCLUSION
For the above-described reasons, we affirm the Examiner’s rejection
of claims 16, 18, 20–21, 23–24, 26–36, 38, 40, and 42 as lacking subject
matter eligibility under 35 U.S.C. § 101.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1)(iv).
DECISION SUMMARY
In summary:
Claims
Rejected
35
U.S.C.
§
Basis Affirmed Reversed
16, 18,
20–21,
23–24,
26–36,
38, 40, 42
101 Eligibility 16, 18,
20–21,
23–24,
26–36, 38,
40, 42

AFFIRMED