CFPH, LLCDownload PDFPatent Trials and Appeals BoardApr 7, 202013770087 - (D) (P.T.A.B. Apr. 7, 2020) Copy Citation 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. Appeal 2019-001337 Application 13/770,087 2 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. Appeal 2019-001337 Application 13/770,087 3 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: Appeal 2019-001337 Application 13/770,087 4 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, Appeal 2019-001337 Application 13/770,087 5 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 Appeal 2019-001337 Application 13/770,087 6 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 Appeal 2019-001337 Application 13/770,087 7 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. Appeal 2019-001337 Application 13/770,087 8 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. Appeal 2019-001337 Application 13/770,087 9 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 Appeal 2019-001337 Application 13/770,087 10 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. Appeal 2019-001337 Application 13/770,087 11 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 Appeal 2019-001337 Application 13/770,087 12 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 Appeal 2019-001337 Application 13/770,087 13 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. Appeal 2019-001337 Application 13/770,087 14 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 Copy with citationCopy as parenthetical citation