Daniel H. Greene

Patent Trials and Appeals Board

Dec 30, 2019

12062823 - (D) (P.T.A.B. Dec. 30, 2019)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
12/062,823 04/04/2008 Daniel H. Greene PARC-20071056-US-NP 1018
35699 7590 12/30/2019
PVF -- PARC
c/o PARK, VAUGHAN, FLEMING & DOWLER LLP
2820 FIFTH STREET
DAVIS, CA 95618-7759
EXAMINER
POLLOCK, GREGORY A
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
12/30/2019 ELECTRONIC
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address(es):
jenny@parklegal.com
sy_incoming@parklegal.com
tia@parklegal.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte DANIEL H. GREENE

Appeal 2018-000615
Application 12/062,823
Technology Center 3600
____________

Before DAVID M. KOHUT, BETH Z. SHAW, and
JAMES W. DEJMEK, Administrative Patent Judges.

KOHUT, Administrative Patent Judge.

DECISION ON APPEAL

Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1–222. 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(a) (2015). Appellant identifies the real party in interest as
Palo Alto Research Center Incorporated. Appeal Br. 1.
2 The rejection of claims 1–22 under 35 U.S.C. § 103(a) has been withdrawn
by the Examiner. Ans. 8–13.
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INVENTION
The present invention is directed to an activity-based advertising
system that manages its auction size. Spec. ¶ 3. Claim 1 is illustrative of the
invention and is reproduced below.
1. A computer-implemented method for managing auction
size in an activity-based advertising system, the method
comprising:
determining, by one or more computers, an auction
criterion for delivering an online ad to a user;
responsive to determining that a number of bids received
from a plurality of auction participants is not within a
predetermined range, revising the auction criterion;
sending the revised auction criterion over a network to
the plurality of auction participants;
receiving, from the plurality of auction participants over
the network, a new set of bids that satisfy the revised auction
criterion; and
in response to determining that a number of the new set
of bids is within the predetermined range, presenting the
advertisements from a winning bid to a mobile device of the
user.

REJECTION
Claims 1–22 stand rejected under 35 U.S.C. § 101 as being directed to
ineligible subject matter.3

3 The Final Rejection mailed February 25, 2016 included a rejection of
claims 1–22 under 35 U.S.C. § 101; however, the Examiner’s Answer states
that the rejection under 35 U.S.C. § 101 is a new ground of rejection.
Ans. 3; Final Act. 2–4. In accordance with 37 C.F.R. § 41.41, Appellant has
requested to maintain the appeal. Reply Br. i.
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ANALYSIS
An invention is patent eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: “[l]aws of nature, natural phenomena, and abstract
ideas” are not patentable. E.g., Alice Corp. 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 Supreme Court’s two-step framework, described in Mayo
and Alice. Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework,
we first determine what concept the claim is “directed to.” See Alice, 573
U.S. at 219 (“On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4
in petitioners’ application explain the basic concept of hedging, or protecting
against risk.”).
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
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, 69 (1972)).
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 (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. (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.
The PTO has published revised guidance on the application of § 101.
USPTO’s January 7, 2019 Memorandum, 2019 Revised Patent Subject
Matter Eligibility Guidance, 84 Fed. Reg. 55 (“Memorandum”). Under that
guidance, we first look to whether the claim recites:
(1) any judicial exceptions, including certain groupings of abstract
ideas (i.e., mathematical concepts, certain methods of organizing
human activity such as a fundamental economic practice, or mental
processes); and
(2) additional elements that integrate the judicial exception into a
practical application (see 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:
(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.
See Memorandum at 50.
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Step 2A, Prong 1: “recites a judicial exception”
Under the first step of the Alice/Mayo framework, the Examiner
determines the claims are directed to the abstract idea of “managing an
auction size,” which the Examiner asserts is a fundamental economic
practice and a method of organizing human activity. Final Act. 2–3; Ans. 3,
6; see Memorandum at 52. The Examiner further asserts that the claimed
steps are analogous to the basic concepts of comparing new and stored
information to identify options and using categories to organize, store, and
transmit information. Ans. 4–6. We agree.
Appellant disagrees and argues that rather than being directed to an
abstract idea, “the claims focus on improvements in the technical process of
monitoring electronic auction participation and dynamically interacting with
remote participant's computing devices to avoid auction participation levels
at above or below targeted threshold levels.” Appeal Br. 11; Reply Br. 8.
Under step one of the Alice framework, we “look at the ‘focus of the
claimed advance over the prior art’ to determine if the claim’s ‘character as a
whole’ is directed to excluded subject matter.” Affinity Labs of Texas, LLC
v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) (quoting Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016)).
The “directed to” inquiry . . . cannot simply ask whether the
claims involve a patent-ineligible concept, because essentially
every routinely patent-eligible claim involving physical products
and actions involves a law of nature and/or natural phenomenon
. . . . Rather, 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.” Internet Patents Corp. v. Active Network, Inc.,
790 F.3d 1343, 1346 (Fed. Cir. 2015).

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Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). In
other words, the first step of the Alice framework “asks whether the focus of
the claims is on the specific asserted improvement in [the relevant
technology] or, instead, on a process that qualifies as an ‘abstract idea’ for
which computers are invoked merely as a tool.” Id. at 1335–36; see also
Memorandum at 54–55.
The Specification provides evidence as to what the claimed invention
relates to. In this case, the Specification discloses that the invention relates
to “advertising systems,” or more specifically, “an activity-based advertising
system that manages its auction size.” Spec. ¶ 3. In order to manage the
auction size, the Specification states that “[t]he system then determines the
quality of auction size and manages the auction size by modifying the
auction criteria. The system then presents the advertisements based on the
winning bids.” Spec. ¶ 7.
Claim 1 provides further evidence. Claim 1 recites a “method for
managing auction size in an activity-based advertising system . . .
comprising” “determining . . . that a number of bids received from a
plurality of auction participants is not within a predetermined range,”
“revising the auction criterion,” “sending the revised auction criterion . . . to
a plurality of auction participants,” “receiving . . . a new set of bids,”
“determining that a number of the new set of bids is within the
predetermined range,” “and presenting the advertisements from the winning
bid to a . . . user.” In short, claim 1 recites managing an auction size.
Regardless of whether we describe it in terms of a fundamental business
practice or a commercial interaction, claim 1 recites the abstract idea of a
certain method of organizing human activity. See Memorandum at 52. This
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is accomplished by initiating the auction/process, receiving information,
analyzing the information, modifying the auction criteria, and choosing a
winning bid.
We do not find persuasive Appellant’s argument that the claimed
invention is not a fundamental economic practice or method of organizing
human activities. First, Appellant argues that the claims do not recite any
fundamental economic practices such as creating a contractual relationship,
hedging, or mitigating settlement risk. Appeal Br. 13. Second, Appellant
argues that the claims do not recite a method of organizing human activities
because the claims do not recite any concepts relating to interpersonal
activities such as managing a game of bingo, tax-free investing, or
structuring a sales force. Id. However, we note that claims reciting auctions
have been determined to be ineligible. See, e.g., In re Schrader, 22 F.3d 290
(Fed. Cir. 1994); see also Priceplay.com, Inc. v. AOL Advert., Inc., 83 F.
Supp. 3d 577 (D. Del. 2015), aff’d 627 F. App’x 925 (Fed. Cir. 2016).
Further, an auction is akin to a sales transaction, which is undoubtedly “a
fundamental economic practice long prevalent in our system of commerce.”
Ans. 6; see Alice, 573 U.S. at 219–20.
We are also not persuaded by Appellant’s arguments pertaining to the
Examiner’s reliance on Electric Power Group and Content Extraction.
Reply Br. 7–9 (citing Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350,
1355 (Fed. Cir. 2016), Content Extraction & Transmission LLC v. Wells
Fargo Bank, Nat. Ass 'n, 776 F.3d 1343, 1347 (Fed. Cir. 2014)). The
Examiner asserts that the claims are analogous to those found ineligible in
Electric Power Group and Content Extraction because they include “the
basic concepts of comparing new and stored information and using rules to
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identify options,” and “using categories to organize, store, and transmit
information.” Ans. 4–6. Appellant attempts to distinguish the claims by
asserting that unlike Electric Power Group and Content Extraction, the
claims go beyond merely collecting and displaying information or extracting
and storing information because the claimed invention utilizes a feedback
loop and “revises auction criterion to elicit and target number of bids.”
Reply Br. 8.
We are not persuaded by Appellant’s argument because the feedback
loop that includes revising auction criterion to elicit and target a number of
bids is itself part of managing an auction size. As we noted above, we agree
with the Examiner that the claims are directed to “managing an auction
size,” which is an abstract idea in the form of a fundamental economic
practice which is a method of organizing human activity. See Memorandum
at 52; Ans. 6; Final Act. 2–3. Accordingly, we conclude the claims recite a
fundamental economic practice, which is one of certain methods of
organizing human activity identified in the Memorandum, and thus an
abstract idea.
Step 2A, Prong 2: “does not integrate that exception into a
practical application”
The Examiner asserts that “[t]here is no indication that the
combination of elements improve the functioning of a computer or improves
any other technology. Their collective functions merely provide
conventional computer implementation.” Ans. 7. We agree.
We do not find persuasive Appellant’s argument that “[b]ecause the
claims recite improvements in computer capabilities, and the claims are
directed to a specific implementation of a solution to a problem in the
software arts, Appellants respectfully submit that the claims are not directed
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to an abstract idea.” Appeal Br. 13; see also id. at 11. Specifically,
Appellant asserts, analogizing to Enfish, the claims provide an “an improved
electronic auction and communication system that analyzes auction
participation levels to determine how to elicit the proper responses from
remote participants to achieve a target participation rate.” Appeal Br. 12
(citing Enfish, LLC. v. Microsoft Corp. et al., 822 F.3d 1327 (Fed Cir.
2016)). Appellant asserts that this process provides improved efficiency and
effectiveness of the bidding process. Id. at 12.
To be sure, independent claim 1 does utilize computer components
such as a “computer” for determining an auction criterion and a “network”
for sending and receiving auction criterion and bids. Both components,
however, are used in an ordinary manner, and for their ordinary functions,
and we are thus unpersuaded that independent claim 1 recites any
improvement to those components themselves. See MPEP § 2106.05(a).
Claim 1 merely uses the computer to send, receive, and analyze data.
Hence, instead of a technical improvement, the claimed steps of adjusting
auction criteria to manage an auction merely improve the commercial and
business practice of auctioning. Moreover, the improved efficiency and
effectiveness is a result of the improved managing of an auction, not on any
claimed improvement to technology. Such an improvement does not
integrate the abstract idea into a practical application. See OIP Techs., Inc.
v. Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (“relying on a
computer to perform routine tasks more quickly or more accurately is
insufficient to render a claim patent eligible.”).
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Step 2B: “well-understood, routine, conventional”
We must now determine whether independent claim 28 recites any
elements additional to the abstract idea that are not well-understood, routine,
or conventional. See MPEP § 2106.05(d). We are unable to identify any.
The Examiner asserts:
The claim(s) does/do not include additional elements that are
sufficient to amount to significantly more than the judicial
exception because the additional elements when considered both
individually and as an ordered combination do not amount to
significantly more that the abstract idea(s). The claims require
the additional limitations of a computer with a processor and a
tangible, non-transitory memory. These generic computer
components are claimed to perform their basic functions of
storing, retrieving, processing, and displaying that are well-
understood, routine, and conventional activities which amount to
no more than implementing the abstract idea with a computerized
programmed system.
Ans. 7. Appellant argues that:
[T]he claimed embodiment is patent eligible because it involves
more than simply retrieving and combining data. The claimed
system interacts with auction participants in order to achieve a
proper balance of auction participation levels appropriate for the
electronic auctioning system. The claimed system analyzes and
adjusts the criterion for delivering an online ad, and interacts
with auction participants in order to achieve a level of
participation that is beneficial for both the auction host and the
participating companies. Furthermore, the claimed system
delivers advertisements from a winning bid to a mobile device
over the network.
Appeal Br. 19 (citing Research Corp. Techs. v. Microsoft Corp., 627 F.3d
859, 868–869 (Fed. Cir. 2010). Appellant further argues that the ordered
combination of claim elements “involves the non-conventional arrangement
of computing devices.” Reply Br. 10–11 (citing BASCOM Glob. Internet
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Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1349–52 (Fed. Cir.
2016)). Finally, Appellant argues that the withdrawal of the 35 U.S.C. § 103
rejections indicates that the ordered combination of claim elements is not
routine and conventional. Reply Br. 13. We are not persuaded by
Appellant’s arguments.
Taking the claim elements separately, the function performed by the
generic computer at each step is purely conventional. Receiving, analyzing,
and transmitting information are basic computer functions, i.e., they are
well-understood, routine, and conventional functions previously known to
the industry. See Elec. Power Grp., 830 F.3d at 1356 (The claims “do not
include any requirement for performing the claimed functions of gathering,
analyzing, and displaying in real time by use of anything but entirely
conventional, generic technology. The claims therefore do not state an
arguably inventive concept . . . .”); see also In re Katz Interactive Call
Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011) (“Absent a
possible narrower construction of the terms ‘processing,’ ‘receiving,’ and
‘storing,’ . . . those functions can be achieved by any general purpose
computer without special programming.”).
Considered as an ordered combination, the generic computer of
Appellant’s method adds nothing that is not already present when the steps
are considered separately. For example, claim 1 does not, as discussed
above, purport to improve the functioning of the computer itself. Nor does it
affect an improvement in any other technology or technical field. Instead,
claim 1 amounts to nothing significantly more than an instruction to apply
the abstract idea using a generic computer. That is not enough to transform
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an abstract idea into a patent-eligible invention. See Alice, 573 U.S. at 225–
26.
Finally, to the extent Appellant argues the claims necessarily contain
an "inventive concept" based on their alleged novelty or non-obviousness
over the cited references, Appellant misapprehends the controlling
precedent. Although the second step in the Alice/Mayo 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
concept] itself.’” Alice, 573 U.S. at 217–218. A novel and nonobvious
claim directed to a purely abstract idea is, nonetheless, patent-ineligible. See
Mayo, 566 U.S. at 90.
In view of the above, we are not persuaded that the Examiner erred in
rejecting claim 1. Claims 2–22 fall with claim 1. See 37 C.F.R.
§ 41.37(c)(1)(iv).
CONCLUSION
We AFFIRM the rejection of claims 1–22 under 35 U.S.C. § 101.
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–22 101 Eligibility 1–22
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