Ex Parte Aikens et al

Board of Patent Appeals and Interferences

Oct 21, 2010

10370640 (B.P.A.I. Oct. 21, 2010)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________________

Ex parte GLENN C. AIKENS, BRADFORD AUSTIN
FISHER, BRIAN DAVID JEFFREY, KEVIN J. KUHNER,
ROBERT LOUIS NIELSEN, JEFFREY MICHAEL SUMMERS
and DOUG KEVIN WILLENBORG
____________________

Appeal 2009-006565
Application 10/370,640
Technology Center 2400
____________________

Before HOWARD B. BLANKENSHIP, THU A. DANG, and JAMES R.
HUGHES, Administrative Patent Judges.

HUGHES, Administrative Patent Judge.

ORDER VACATING DECISION

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2
Appellants requested rehearing of the Decision mailed October 22,
2010, in which the Board vacated the prior art rejections of claims 1-12 and
entered a new ground of rejection under 35 U.S.C. § 101.
We hereby VACATE our July 27, 2011, Decision on Request for
Rehearing denying rehearing of the Decision – in which we reconsidered the
Decision, but declined to make any substantive change to the new ground of
rejection of Appellants’ claims 1-12 under 35 U.S.C. § 101.
It has come to the attention of the Board that an inadvertent error
occurred in the Decision with respect to the assigned panel.
The Decision on Request for Rehearing mailed July 27, 2011 is being
vacated and replaced with the new decision to be mailed concurrently with
this Order. All time periods for taking any subsequent action in connection
with the appeal are to be calculated based on the date of the new decision
mailed herewith.

VACATED

peb

UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________________

Ex parte GLENN C. AIKENS, BRADFORD AUSTIN
FISHER, BRIAN DAVID JEFFREY, KEVIN J. KUHNER,
ROBERT LOUIS NIELSEN, JEFFREY MICHAEL SUMMERS
and DOUG KEVIN WILLENBORG
____________________

Appeal 2009-006565
Application 10/370,6401
Technology Center 2400
____________________

Before HOWARD B. BLANKENSHIP, THU A. DANG, and JAMES R.
HUGHES, Administrative Patent Judges.

Opinion for the Board filed by Administrative Patent Judge JAMES R.
HUGHES.

Opinion Concurring filed by Administrative Patent Judge HOWARD B.
BLANKENSHIP.

HUGHES, Administrative Patent Judge.

DECISION ON REQUEST FOR REHEARING

1 Application filed February 20, 2003. The real party in interest is
International Business Machines Corp. (App. Br. 1.)
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2

BACKGROUND
Appellants request rehearing of the Decision mailed October 22,
2010, in which the Board vacated the prior art rejections of claims 1-12 and
entered a new ground of rejection under 35 U.S.C. § 101.
The invention at issue on rehearing relates to a system, method, and
machine readable storage for identifying and configuring metric components
for incorporation into a Service Level Agreement (SLA) managed by a
Service Level Management (SLM) system. (Spec. ¶ [0015].)2
Independent claims 1, 6, and 8 illustrate the claims on Rehearing:
1. A method for configuring an metric component for
use in a service level management (SLM) system, the method
comprising the steps of:
inspecting metric component references in a data store to
identify individual ones of said metric component references
which indicate that a corresponding metric component can be
incorporated in a service level agreement (SLA) and managed
by the SLM system; and,
for each metric component reference identified in said
inspecting step, configuring said corresponding metric
component for use in the SLM system.

6. A service level management (SLM) configuration
system comprising:
a data store comprising a plurality of references to metric
components;

2 We refer to Appellants’ Specification (“Spec.”); Appeal Brief (“App. Br.”)
filed May 22, 2007; Reply Brief (“Reply Br.”) filed April 21, 2008; and
Request for Rehearing (“Req. Reh’g.”) filed December 22, 2010. We also
refer to our Decision on Appeal (“Dec.”) mailed October 22, 2010.
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a discovery processor coupled to said data store and
programmed to identify individual ones of said metric
components through said references which can be incorporated
in a service level agreement (SLA) and managed by an
associated SLM system; and,
a registration processor coupled both to said discovery
processor and to said associated SLM system, said registration
processor having a configuration for adding identified ones of
said metric components to said associated SLM system for
management by said associated SLM system when said
identified ones of said metric components are incorporated into
an SLA managed by said associated SLM system.

8. A machine readable storage having stored thereon a
computer program for configuring an metric component for use
in a service level management (SLM) system, the computer
program comprising a routine set of instructions for causing the
machine to perform the steps of:
inspecting metric component references in a data store to
identify individual ones of said metric component references
which indicate that a corresponding metric component can be
incorporated in a service level agreement (SLA) and managed
by the SLM system; and,
for each metric component reference identified in said
inspecting step, configuring said corresponding metric
component for use in the SLM system.

SUMMARY OF REQUEST
Appellants, in their Request for Rehearing, make two broad
contentions. Firstly, Appellants contend that the Board of Patent Appeals
and Interferences (the “Board”) does not have the authority to vacate the
Examiner’s prior art rejections and that vacatur violates 37 C.F.R. § 41.1 and
5 U.S.C. §§ 555(b) and (e). (Req. Reh’g 2-4.) Secondly, Appellants
contend that the Board has failed to present a prima facie case of
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unpatentability under 35 U.S.C. § 101. (Req. Reh’g 5-16.) Specifically,
Appellants contend that: (1) the Board has not properly construed the
disputed claims, has not properly considered the language of Appellants’
claims, and the claims recite a data store and storage (Req. Reh’g 5-8); (2)
the claims are not directed to software per se, the Board has not “identif[ied]
how the claims, as a whole, are directed to ‘abstract ideas’” (Req. Reh’g 9),
and has again not properly considered the language of Appellants’ claims
(Req. Reh’g 8-10); (3) that the “Board’s reliance upon the alleged
abstractness of the ‘SLA’ is . . . misplaced” (Req. Reh’g 10); (4) data
structures are not an abstract idea (Req. Reh’g 11); (5) Appellants’
“independent claim 6 explicitly recites two different processors, which are
machines” (Req. Reh’g 12); (6) “[a] process . . . realized in software must
necessarily employ the use of a computer” (Req. Reh’g 12); (7) Appellants’
claim 6 is not a software system as it necessarily implicates and requires the
use of hardware (Req. Reh’g 13-14); (8) the machine readable storage is
hardware, implicates the use of a machine, and is not merely a computer
program (Req. Reh’g 14-15); and (9) that Appellants’ “independent claims
1, 6, and 8 are respectively directed to at least a process, a machine, and a
manufacture” (Req. Reh’g 15) and are not “as a whole . . . ‘an abstract idea’”
(Req. Reh’g 16).

DISCUSSION
A request for rehearing “‘must state with particularity the points
believed to have been misapprehended or overlooked by the Board’” and
“must specifically recite ‘the points of law or fact which appellant feels were
overlooked or misapprehended by the Board.’” Ex Parte Quist, 95 USPQ2d
1140, 1141 (BPAI 2010) (precedential) (quoting MPEP § 1214.03). The
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Board will not consider any issues or arguments not particularly contested
by Appellants. Ex Parte Frye, 94 USPQ2d 1072, 1075-76 (BPAI 2010)
(precedential). Although we have reconsidered our October 22, 2010
Decision in light of Appellants’ contentions in the Request, we find no errors
therein. Thus, we decline to change our prior decision for the reasons that
follow.
Issue 1: The Board’s Authority to Vacate an Examiner’s
Rejections
Appellants contend that the Board does not have the authority to
vacate the prior art rejections of an examiner and that vacatur of the
rejections violates statutes and rules governing the Board – 5 U.S.C.
§§ 555(b) and (e) and 37 C.F.R. § 41.1. (Req. Reh’g 2-4.) Specifically,
Appellants first contend that “‘the procedural rules governing appeals before
the Board are separate and distinct from the procedural rules of an Article III
Court of Appeals’” (Req. Reh’g. 2 (quoting Ex parte Borden, 93 USPQ2d
1473, 1475 (BPAI 2010) (informative)) and “[n]othing in 37 C.F.R[.] Part
41 grants the Board authority to vacate a rejection of the Examiner” (Req.
Reh’g. 3) because 37 C.F.R. § 41.50(a) “only permit[s] three dispositions of
. . . appealed rejections” (Req. Reh’g. 2). We agree with Appellants that the
Board’s rules are distinct from those governing Article III courts, but we do
not agree that 37 C.F.R. § 41.50(a) only permits three methods of disposing
of appealed rejections.
The rule governing the Board’s disposition of appeals – 37 C.F.R.
§ 41.50 – in relevant part states:
(a)(1) The Board, in its decision, may affirm or reverse
the decision of the examiner in whole or in part on the grounds
and on the claims specified by the examiner. The affirmance of
the rejection of a claim on any of the grounds specified
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constitutes a general affirmance of the decision of the examiner
on that claim, except as to any ground specifically reversed.
The Board may also remand an application to the examiner.
37 C.F.R. § 41.50(a)(1) (2010).
Rule 41.50(a)(1) states that the Board “in its decision, may affirm or
reverse the decision of the examiner . . . [or] remand an application to the
examiner” (emphasis added). The use of the word “may” rather than the
word “shall” in Rule 41.50(a)(1) indicates that “affirm,” “reverse,” or
“remand,” are three actions which the Board may take in its decision, but
they are not the only three actions which the Board may take. The word
“may” is permissive and expansive, not mandatory and inclusive. It does
not exclude other actions left to the Board’s discretion.
Appellants are correct that 37 C.F.R. § 41.50(a)(1) grants express
authority to the Board only to affirm, reverse or remand decisions
(rejections) of the examiner. This, however, does not make the Board’s
vacatur of a decision by an examiner ultra vires. The Board has the inherent
authority to vacate decisions (rejections) of an examiner.
The Board’s enabling statute, 35 U.S.C. § 6, states in relevant part that
“[t]he Board of Patent Appeals and Interferences shall, on written appeal of
an applicant, review adverse decisions of examiners upon applications for
patents.” 35 U.S.C. § 6(b) (2002). In ex parte appeals, the statutory duty of
the Board is to “review adverse decisions of examiners.” Id. By its terms,
the statute places no restrictions or conditions on how the Board should
review adverse decisions of examiners. See Berman v. Housey, 291 F.3d
1345, 1353-54 (Fed. Cir. 2002) (this section addresses “only what issues the
Board is empowered to consider, and thus does not establish any affirmative
obligations that it must perform”).
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Our reviewing court, the U.S. Court of Appeals for the Federal Circuit
(CAFC), has had occasion to analyze the word “review” as it is used in its
jurisdictional statutes – 35 U.S.C. § 144.3 See Gechter v. Davidson, 116
F.3d 1454, 1458, 1460 (Fed. Cir. 1997) (discussing the scope of review, and
vacating a Board decision that omits several crucial findings); accord
Champagne Louis Roederer, S.A. v. Delicato Vineyards, 148 F.3d 1373,
1377 (Fed. Cir 1998) (J. Michel concurring) (citing Gechter). We find the
Federal Circuit’s discussion of the term “review,” in the context of the
Federal Circuit’s review of Board decisions, to be particularly helpful in
determining the meaning of the word “review” in the context of our statutory
duty to review adverse decisions of examiners.
In Gechter, the CAFC determined that the Board had only provided
limited analysis and had not expressly construed a limitation of the claim in
dispute. Gechter, 116 F.3d at 1456. As the Gechter court explains:
The relevant statute and our own case law compel our
vacatur of the Board’s decision. . . . It then becomes our duty
to review that decision for error. 35 U.S.C. § 144 (1994) (“The
United States Court of Appeals for the Federal Circuit shall
review the decision from which an appeal is taken on the record
before the Patent and Trademark Office.” (emphasis added)).
For an appellate court to fulfill its role of judicial review, it
must have a clear understanding of the ground s for the decision
being reviewed. . . . When the opinion explaining the decision

3 Section 144 states:
The United States Court of Appeals for the Federal
Circuit shall review the decision from which an appeal is taken
on the record before the Patent and Trademark Office. Upon its
determination the court shall issue to the Director its mandate
and opinion, which shall be entered of record in the Patent and
Trademark Office and shall govern the further proceedings in
the case.

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lacks adequate fact findings, meaningful review is not possible,
frustrating the very purpose of appellate review as well as this
court’s compliance with its statutory mandate. Therefore, the
statute’s mandate to “review” implies inherent power in this
court to require that the Board’s decision be capable of review.
Gechter, 116 F.3d at 1457 (citations omitted).
We see no reason to interpret the word “review” as it appears in § 6(b)
of the statute more restrictively. In other words, just as the word “review” in
§ 144 of the statute implies that the court has inherent powers concerning its
review of a Board decision, this Board also has inherent powers concerning
its review of an examiner’s adverse decision on patentability under section
6(b) of the statute. We believe those inherent powers include taking actions
which are ordinarily and customarily taken by appellate bodies in reviewing
an underlying decision. Vacatur is one of those actions.
As explained by the Gechter court (supra), vacatur is appropriate
when the decision under review “lacks adequate fact findings [and]
meaningful review is not possible.” Gechter, 116 F.3d at 1457. The federal
circuit courts of appeal vacate trial court decisions “[w]hen an appellate
court discerns that a district court has failed to make a finding because of an
erroneous view of the law.” Pullman-Standard v. Swint, 456 U.S. 273, 291
(1982). See 9 Moore’s Federal Practice § 52.12[1] (3d ed., Matthew Bender
& Co., Inc. 1997) (“When the trial court completely fails . . . to make
findings on a material issue, the appellate court is entitled to vacate the
judgment and remand the action to the district court . . . .” (footnotes
omitted)).
Analogizing these concepts from federal appellate practice to the
administrative appeal process in the USPTO, the patent examiner is the
initial fact finder and decision maker while the Board is the reviewing
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appellate tribunal. The patent examiner is charged with determining the
patentability of the claims presented in a patent application. The examiner’s
decision on patentability (office action) must be complete as to the facts
relied upon and the legal basis used in determining that an applicant’s patent
claims are unpatentable. It is our duty in an ex parte appeal proceeding to
review that decision. If the facts relied upon by the examiner are unclear or
the legal basis for reaching the decision is uncertain, the record forwarded to
the Board by the examiner is not susceptible to meaningful review. When
confronted with these circumstances, the Board should have available to it
the full range of actions or dispositions which appellate tribunals use. In our
view, like other appellate tribunals which have the duty to review decisions,
this Board, in reviewing an examiner’s adverse decision on patentability,
may vacate that decision if appropriate.
We next address Appellants’ arguments that vacatur of the prior art
rejections violates statutes and rules governing the Board – 5 U.S.C.
§ 555(b) and (e) and 37 C.F.R. § 41.1. (Req. Reh’g 2-4.) Appellants’ legal
arguments are unavailing and without merit.
Firstly, with respect to Rule 41.1, Appellants assert that vacatur
introduces unreasonable delay and expense. It is unclear how the Board’s
exercise of its discretion in deciding a matter properly before it would in any
way impede the “the just, speedy, and inexpensive resolution” (37 C.F.R. §
41.1(b)) of such a matter. Appellants have not provided any evidence, much
less persuasive evidence of any “unreasonable” delay or expense.
Secondly, with respect to 5 U.S.C. § 555(b), this statute concerns
compelling persons to appear before an agency. Appellants chose the
avenues by which they prosecute their patent application. The USPTO is
responsible “for the granting and issuing of patents.” 35 U.S.C. § 2(a)(1).
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The agency has the duty to grant patents that meet the requirements of the
patent statute (including § 101). (See discussion of In re Comiskey (infra).)
To the extent this section applies to administrative appellate tribunals, rather
than an agency in general, we note that our decision returns jurisdiction of
the patent application to the Examiner – concluding the matter before us in a
reasonable time. Appellants fail to present any persuasive evidence of
undue delay.
Lastly, with respect to 5 U.S.C. § 555(e), the Board’s Decision
provides prompt and detailed notice of the new grounds of rejection under
§ 101, as well as the reasons for vacating the Examiner’s prior art rejections.
The result promotes efficient use of agency resources (supra) and does not
put Appellants’ patent application into “never ending loops” as averred by
Appellants. We remain unpersuaded that vacatur produces unreasonable
delay or expense.
Appellants’ core argument seems to be that a decision delayed is a
decision denied (here we paraphrase the legal maxim that “justice delayed is
justice denied”). We completely agree with Appellants that procedural
“yo-yoing” burdens the applicants, the examining corps, future panels of the
Board and the public – in that the public loses the benefits of the patent grant
and is subject to the burdens of exclusivity longer than necessary as a result
of patent term adjustment. Inasmuch as Appellants argue that an incomplete
disposition is not a best practice – Appellants has a valid point that would in
most cases be persuasive (see our discussion infra).
The present case, however, does not involve an incomplete
disposition. As a consequence of the original Board decision, all of
Appellants’ claims stand rejected. Without further action, Appellants’
application will be abandoned. A decision need not resolve all rejections to
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be complete. See KSR Int’l v. Teleflex Inc., 550 U.S. 398, 426 (2007) (not
reaching alternate basis because obviousness sufficient to dispose of case).
Resolution of a single rejection for a claim renders other rejections moot.
See, e.g., 37 C.F.R. § 41.50(a)(1) (“The affirmance of the rejection of a
claim on any of the grounds specified constitutes a general affirmance of the
decision of the examiner on that claim . . . .”). Moreover, any resolution of
the statutory subject matter rejection is likely to affect the prior art
rejections. The order in which to reach the rejections and whether all
rejections should be reached is a matter of sound discretion guided by logic,
precedent and overall process efficiency. 37 C.F.R. § 41.125(a) (providing
in interferences that the Board “may take up motions…in any order”); see
also Berman, 291 F.3d at 1352.
Even though the Board has the quasi-judicial authority as an
administrative (appellate) tribunal to vacate examiner rejections, the
question remains whether such action is appropriate in this instance. We
find there is a better course of action for returning this matter to the
Examiner with a new ground of rejection.
The Board has a considerable inventory for completely disposing of
an appeal on the merits. As pointed out by Appellants (Req. Reh’g. 2-3),
these include affirming, reversing, or remanding examiner rejections (37
C.F.R. § 41.50(a)) or entering a new ground of rejection (37
C.F.R. §41.50(b)). When the Board enters a new ground of rejection,
Appellants may either reopen prosecution or request rehearing. Id.
Although not expressed in the rules, the Board may also vacate examiner
rejections (supra). The Board may further affirm a rejection with a
statement regarding amendment (37 C.F.R. § 41.50(c)).
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Further still, the Board may decide not to reach alternate grounds for
examiner rejections. As with vacatur, the Board has available to it the full
range of actions or dispositions which appellate tribunals use, and we
conclude the Board has within its authority and discretion the ability to not
decide certain issues. Both the Supreme Court and our reviewing court
frequently decide not to reach particular issues or questions, e.g., alternate
grounds for a particular issue. See, e.g., Jerman v. Carlisle, McNellie, Rini,
Kramer & Ulrich LPA, 130 S.Ct. 1605, 1610-11, n. 4 (2010) (deciding not
to reach the alternate ground of whether 15 U.S.C. § 1692k(c) of the Fair
Debt Collection Practices Act (FDCPA) applies due to a debt collectors
misinterpretation of the legal requirements of state law or federal law other
than the FDCPA); Microsoft Corp. v. AT & T Corp., 550 U.S. 437, 453-54,
n. 14 (2007) (deciding not to reach the issue of whether installing a
computer program on a foreign computer would give rise to liability under
35 U.S.C. § 271(f). This case is interesting in that only a plurality of
Justices decided not to reach the issue. Three Justices did reach the issue in
a concurrence. See id. at 459-62.); Liebel-Flarsheim Co. v. Medrad, Inc.,
481 F.3d 1371, 1382 (Fed. Cir. 2007) (deciding not to reach alternate ground
for holding of invalidity).
In particular, our reviewing court has declined to reach alternate
grounds of affirmance (examiner rejection) when presented with a 35 U.S.C.
§ 101 non-statutory subject matter issue – “[w]e do not reach the ground
relied on by the Board below–that the claims were unpatentable as obvious
. . . –because we conclude that many of the claims are ‘barred at the
threshold by § 101.’” In re Comiskey, 554 F.3d 967, 973 (Fed. Cir.
2009)(quoting Diamond v. Diehr, 450 U.S. 175, 188 (1981)). Similarly, we
also note that the Board has had occasion not to reach alternate grounds of
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affirmance when presented with a 35 U.S.C. § 101 non-statutory subject
matter issue. See Ex Parte Gutta, 93 USPQ2d 1025, 1036 (BPAI 2009)
(precedential).
Each of these actions by the Board is procedurally different but has a
similar effect on the examiner’s rejection. For example, every reversal by
the Board necessarily vacates the rejection reversed and remands the
rejection to the examiner for further prosecution; and every remand returns
the remanded rejection to the examiner for further findings, clarification, or
withdrawal. Similarly, a new ground of rejection, if not subject to rehearing,
returns the patent application and the new ground of rejection to the
examiner for further prosecution.
Thus, no matter the “label” for the Board’s action, the final result is
the same – to return the application to the jurisdiction of the examiner, with
or without a particular rejection intact, for further action. If a rejection
remains (stands), e.g. through an affirmance or new ground of rejection, or
by the Board’s inaction (decision not to reach the rejection), then the patent
applicant may choose to further prosecute the application, e.g., by amending
the claims. If a rejection has been reversed or vacated, then the examiner
may choose to further prosecute the application using the guidance from the
Board, e.g., by presenting a new or revised rejection.
Therefore, we find the more appropriate action or “label” for our
action in the present appeal would be for us to not reach the Examiner’s
prior art rejections, rather than to affirm the panel’s vacatur of the rejections.
In the present case, the Board’s decision on appeal found Appellants’ claims
were directed to non-statutory subject matter. (Dec. 4-6.) As explained by
our reviewing court in its Comiskey decision, failure to meet the
requirements of § 101 bars review of the claims under §§ 102 and 103 –
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“[w]e do not reach the [prior art rejections] because we conclude that many
of the claims are ‘barred at the threshold by § 101.’” Comiskey, 554 F.3d at
973 (quoting Diamond v. Diehr, 450 U.S. 175, 188 (1981)). The court
further explained:
It is well-established that “[t]he first door which must be
opened on the difficult path to patentability is § 101.” State St.
Bank & Trust Co. v. Signature Fin. Group, Inc., 149 F.3d 1368,
1372 n. 2 (Fed. Cir.1998) (quoting In re Bergy, 596 F.2d 952,
960 (CCPA 1979)). Only if the requirements of § 101 are
satisfied is the inventor “allowed to pass through to” the other
requirements for patentability, such as novelty under § 102 and,
of pertinence to this case, non-obviousness under § 103. See id.
As the Supreme Court stated in Parker v. Flook,“[t]he
obligation to determine what type of discovery is sought to be
patented [so as to determine whether it is ‘the kind of
“discoveries” that the statute was enacted to protect’] must
precede the determination of whether that discovery is, in fact,
new or obvious.” 437 U.S. 584, 593, 98 S.Ct. 2522, 57 L.Ed.2d
451 (1978) (emphases added).
Comiskey, 554 F.3d at 973.
Once the original panel found that Appellants’ claims did not meet the
requirements of § 101, in effect the panel found that the Examiner omitted
(failed to make findings on) a material issue, § 101, that would have
prevented further inquiry. The panel’s new grounds of rejection therefore
rendered superfluous the Examiner’s decision rejecting the claims under
§§ 102 and 103.
Moreover, economy of the USPTO’s administrative and judicial
resources favors not reaching the prior art rejections. The Board should not
be compelled to reach a final decision, affirming or reversing an examiner’s
rejection, when the record does not allow for a reasoned review of the issues
raised in the appeal. Nor should the Board be limited to remand when the
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record before us on appeal is not susceptible to meaningful review. There
are circumstances where we should not reach alternate grounds for rejecting
a claim (affirming or reversing an examiner’s rejection) because these
subordinate issues may be enlightened or clarified, or rendered moot, by
subsequent action of Appellants or our reviewing court. There are no bright
lines which govern such decisions. The wisest course under the present
circumstances would be to allow Appellants to revise their claims –
rendering the prior art rejections moot – or to appeal our decision. If
Appellants appeal, then the CAFC will either affirm our § 101 rejection –
again requiring Appellants to amend or abandon the claims – or reverse our
§ 101 rejection – leaving the prior art rejections ripe for resolution. Under
such circumstances, clarity of the record and conservation of agency
resources are best served if we do not reach the prior art rejections.
In summary, we conclude that it was within our authority and
discretion to vacate the Examiner’s prior art rejections. Appellants have not
presented any persuasive evidence that the panel’s decision was
unreasonable. Even so, on reconsideration we find and conclude that the
more appropriate action is to enter the new ground of rejection under § 101
and not reach the Examiner’s prior art rejections under §§ 102 and 103.
Accordingly, we have reconsidered the original panel’s Decision, we vacate
our vacatur of the Examiner’s prior art rejections of claims 1-12 and instead
do not reach the Examiner’s prior art rejections of claims 1-12.
Issue 2: Rejections Under 5 U.S.C. § 101
Under 35 U.S.C. § 101, four categories of subject matter are eligible
for patent protection: (1) processes; (2) machines; (3) manufactures; and (4)
compositions of matter. Patentable subject matter must fall within one of the
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categories set out in 35 U.S.C. § 101 – “Those four categories define the
explicit scope and reach of subject matter patentable under 35 U.S.C.
§ 101. . . .” In re Nuijten, 500 F.3d 1346, 1357 (Fed. Cir. 2007). “The four
categories together describe the exclusive reach of patentable subject matter.
If a claim covers material not found in any of the four statutory categories,
that claim falls outside the plainly expressed scope of § 101 even if the
subject matter is otherwise new and useful.” Id. at 1354; see In re Ferguson,
558 F.3d 1359, 1365 (Fed. Cir. 2009).
As the Supreme Court has explained in a well-settled line of precedent
addressing patentable subject matter – laws of nature, abstract ideas, and
natural phenomena are excluded from patent protection. See Diamond v.
Diehr, 450 U.S. 175, 185 (1981). Consistent with this precedent, the Court
has unswervingly held that software is not patentable.
In Gottschalk v. Benson, the Court explained that an algorithm
representing a concept or abstract idea is not patentable:
It is conceded that one may not patent an idea. But in
practical effect that would be the result if the formula for
converting BCD numerals to pure binary numerals were
patented in this case. The mathematical formula involved here
has no substantial practical application except in connection
with a digital computer, which means that if the judgment
below is affirmed, the patent would wholly pre-empt the
mathematical formula and in practical effect would be a patent
on the algorithm itself.
Gottschalk v. Benson, 409 U.S. 63, 71-72 (1972).
Subsequently, in Parker v. Flook, the Court addressed the
patentability of a method of calculating and updating alarm limits utilizing
an algorithm, reiterating that algorithms and methods directed essentially to
algorithms are not patentable. Parker v. Flook, 437 U.S. 584 (1978). The
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Court stated that “‘if a claim is directed essentially to a method of
calculating, using mathematical formula, even if the solution is for a specific
purpose, the claimed method is nonstatutory.’” Id. at 595 (quoting In re
Richman, 563 F.2d 1026, 1030 (CCPA 1977)). The Court explained that, to
be eligible for patent protection, “[a] process itself, not merely the
mathematical algorithm, must be new and useful” (id. at 591); it is
“incorrect[] [to] assume[] that if a process application implements a
principle in some specific fashion, it automatically falls within the patentable
subject matter of § 101” (id. at 593); and that such an assumption “would
make the determination of patentable subject matter depend simply on the
draftsman’s art and would ill serve the principles underlying the prohibition
against patents for ‘ideas’ or phenomena of nature” (id.). The Court also
stated that “post-solution” activity could not make a process patentable.
The notion that post-solution activity, no matter how
conventional or obvious in itself, can transform an unpatentable
principle into a patentable process exalts form over substance.
A competent draftsman could attach some form of post-solution
activity to almost any mathematical formula; the Pythagorean
theorem would not have been patentable, or partially patentable,
because a patent application contained a final step indicating
that the formula, when solved, could be usefully applied to
existing surveying techniques. The concept of patentable
subject matter under § 101 is not “like a nose of wax, which
may be turned and twisted in any direction . . . .”
Id. at 590 (citations omitted).
In Diamond v. Diehr, the Court again addressed the patentability of a
process (curing rubber) utilizing a known algorithm and again reiterated that
algorithms and methods directed essentially to algorithms are not patentable.
Diehr, 450 U.S. at 185-87, 191-92. In contrast with Flook, the claim in
Diehr included an algorithm and additional process steps tied to machines
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and transformations (e.g., “opening the press automatically” in response to a
comparison output) and was found to be within the patentable subject matter
of § 101. Diehr, 450 U.S. at 187, 191-93.
Recently, in Bilski v. Kappos, the Court invoked Benson, Flook, and
Diehr, explaining that Bilski’s claims sought “to patent both the concept of
hedging risk and the application of that concept to energy markets” and “are
not patentable processes because they are attempts to patent abstract ideas.”
Bilski v. Kappos, 130 S.Ct. 3218, 3229-30 (2010). In particular, the Court
explained “[t]he concept of hedging, described in claim 1 and reduced to a
mathematical formula in claim 4, is an unpatentable abstract idea, just like
the algorithms at issue in Benson and Flook.” Bilski, 130 S.Ct. at 3231.
The Supreme Court has also explained that “[a]bstract software code
is an idea without physical embodiment,” i.e., an abstraction. Microsoft
Corp. v. AT&T Corp., 550 U.S. 437, 449 (2007). A claim that recites no
more than software, logic or a data structure (i.e., an abstract idea) – with no
structural tie or functional interrelationship to an article of manufacture,
machine, process or composition of matter does not fall within any statutory
category and is not patentable subject matter. In re Warmerdam, 33 F.3d
1354, 1361 (Fed. Cir. 1994); see Nuijten, 500 F.3d at 1357. The scope of
such a claim is not limited to any particular practical application. In
particular, data structures in the abstract, i.e., not claimed as embodied in a
non-transitory, tangible computer-readable medium, are descriptive material
per se and are not statutory subject matter because they are not capable of
causing functional change in a computer. In re Warmerdam, 33 F.3d at
1361; cf. In re Lowry, 32 F.3d 1579, 1583-84 (Fed. Cir. 1994); accord
MPEP § 2106.01 (2007).
In contrast to Warmerdam, Lowry explains that:
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Lowry’s data structures impose a physical organization on the
data.
. . .
More than mere abstraction, the data structures are
specific electrical or magnetic structural elements in a memory.
According to Lowry, the data structures provide tangible
benefits: data stored in accordance with the claimed data
structures are more easily accessed, stored, and erased . . . .
[and] represent complex data accurately and enable powerful
nested operations. In short, Lowry’s data structures are
physical entities that provide increased efficiency in computer
operation.
Lowry, 32 F.3d at 1583-84.
In summary, as explained in Warmerdam, “the dispositive issue for
assessing compliance with § 101 . . . is whether the claim is for a process
that goes beyond simply manipulating ‘abstract ideas’ or ‘natural
phenomena.’” Warmerdam, 33 F.3d at 1360. Claims to data structures and
methods of manipulating data structures are not patentable subject matter
because they merely embody or manipulate “abstract ideas.” Id.
A computer program (software), no matter its function, is nothing
more than the representation of an algorithm or group of algorithms,
conceptually no different from a list of steps written down with pencil and
paper for execution by a human being. See Benson, 409 U.S. at 72;
Comiskey, 554 F.3d at 979 (“[M]ental processes – or processes of human
thinking – standing alone are not patentable even if they have practical
application.”).
With this background in mind, we review Appellants’ disputed claims
for compliance with § 101 and address Appellants’ asserted bases of error.
Appellants make a number of arguments (Summary, supra) with respect to
the new ground of rejection under 35 U.S.C. § 101. (Req. Reh’g. 5-16.)
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Appellants initially contend the Decision did not properly consider the claim
language nor did the Decision properly construe the claims (Req. Reh’g. 5,
7-8) in that the claims “necessarily involve[] the use of statutory subject
matter” (i.e., a computer) (Req. Reh’g. 7); in particularly, claims 1, 6, and 8
recite a data store (Req. Reh’g. 7); and claim 8 recites a storage, which,
similar to a data store, stores data (Req. Reh’g. 8). (See Req. Reh’g. 5-10.)
The Decision summarizes Appellants’ service level management
(SLM) system (Dec. 5-6) with reference to Appellants’ Specification and
figures therein and relates the summary to Appellants’ claims (Dec. 6).
Accordingly, the Decision properly considers the claim language and
construes the claims to the extent necessary for the new ground of rejection
under § 101.
The Decision also specifically addresses the data store and storage of
claims 1, 6, and 8. The Decision states:
This most recent discussion aptly characterizes method
independent claim 1 . . . . The data store of system independent
claim 6 is stated to comprise plural references to metric
components. This claimed data store is not stated to store
anything but is merely stated to comprise or be data elements
per se. . . . The machine readable storage in the preamble of
independent claim 8 on appeal is said to comprise a computer
program per se which is further stated to comprise a routine set
of instructions to cause the same functionality recited in earlier
claims. No hardware structure is recited in this claim in which
or on which to physically embody the claimed program and
instructions. Therefore, it appears that the computer program
and the routine set of instructions associated with it comprise
the readable storage itself.
(Dec. 6.) We note that Appellants’ own summary of the claimed subject
matter (App. Br. 3-4) references Figure 2 with respect to claims 1, 6, and 8,
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and the recited data store and that nothing in Figure 2 or the Specification
defines or describes the data store with any particularity.
We give claim terminology the “broadest reasonable interpretation
consistent with the Specification” in accordance with our mandate that
“claim language should be read in light of the Specification as it would be
interpreted by one of ordinary skill in the art.” In re Am. Acad. of Sci. Tech
Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004) (citations omitted). Claim 1
recites “inspecting metric component references in a data store.” Claim 6
recites “a data store comprising a plurality of references to metric
components.” Claim 8 recites (in the preamble) a “machine readable storage
having stored thereon a computer program,” and “inspecting metric
component references in a data store.” In view of Appellants’ recited claim
language and Specification disclosures, we find that the claimed data store
and storage do not implicate any physical structure. Claim 1 and claim 8
merely require that inspecting be performed on metric component references
(data structures) in a data store. In this context, we construe (both here and
in the Decision) a “data store” to be a data structure. Similarly, claim 6
merely requires a data store (data structure) comprising references to metric
components (data structures). The preamble of claim 8 recites a storage
storing a computer program (a data structure), which we construe (both here
and in the Decision) to be a data structure comprising/storing the computer
program data structure, or as expressed in the Decision, “the computer
program and the routine set of instructions associated with it comprise the
readable storage itself” (Dec. 6). Thus, we agree with the Decision that the
“claimed data store is not stated to store anything but is merely stated to
comprise or be data elements per se.” (Dec. 6.)
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Secondly, Appellants contend the claims are not directed to software
per se, the Board has not identified how the claims are directed to abstract
ideas, and the recitation of data structures does not in itself mean that the
claims fail to meet the requirements of § 101. (Req. Reh’g. 9-11.) In
particular, Appellants assert that “[n]either the claims nor Appellants’
[S]pecification makes any mention to ‘software per se.’” (Req. Reh’g. 9.)
Appellants concede that the Specification describes the claim
elements may be composed of software or a computer program (see Req.
Reh’g. 9; Dec. 6 (citing Spec. ¶ [0021]); Spec. [0021]-[0023]), but
distinguish software, as used in the Specification, from “software per se”
(computer instructions) in that software necessarily includes a medium on
which the instructions are stored. (Req. Reh’g. 9, n.4.) We find Appellants’
arguments unpersuasive and disagree with their overly narrow interpretation
of software and the claims.
We give claim limitations their broadest reasonable construction
consistent with Appellants’ Specification (supra). We must, however, avoid
importing limitations from Appellants’ Specification. Superguide Corp. v.
DirecTV Enterprises, Inc., 358 F.3d 870, 875 (Fed. Cir. 2004) (“Though
understanding the claim language may be aided by explanations contained in
the written description, it is important not to import into a claim limitations
that are not part of the claim.”). We are not persuaded that the claims
incorporate or implicate software stored on media, as the claims lack any
mention of media. The Decision did not construe the claims to include
software. Rather, the Decision construed the claims, based on Appellants’
disclosures, to be computer instructions (“software per se”) comprising
abstract ideas, data structures and functional relationships there between.
(Dec. 5-6.) Appellants explain that the claim elements may be entirely
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composed of software and admit that software per se (computer instructions)
is an abstract idea – “one is not purchasing an abstract idea (i.e., software per
se).” (Req. Reh’g. 9, n.4.) Their attempt to limit the claims to software,
which they contend also includes a medium, is wholly unpersuasive.
Here Appellants’ claims 1, 6, and 8 do not explicitly recite any
physical structure nor are the functional limitations related to or tied to any
particular machine (discussed infra). We also note that Appellants’ own
claims and arguments contradict the incorporation of a medium into
software (a computer program). (See Req. Reh’g. 7-8 (discussing claim 8
which separately recites a storage and a computer program (a “storage
having stored thereon a computer program”)).)
Claim 1 recites inspecting data structures (metric component
references) in a data structure (data store) to identify metric components
(data structures) (supra) that can be incorporated into a service level
agreement (an abstract concept, discussed infra) and managed by the service
level management (SLM) system (a software system, discussed infra). The
entire claim recites only data structure elements, abstract idea elements, and
functional language relating the elements. In view of Appellants’
disclosures, the claimed functions/processes are broadly but reasonably
construed to be realized in software (see Spec. ¶ [0021]). Accordingly, the
claim recites only data elements and abstract ideas. Similarly, claim 8
recites a method identical to that of claim 1 performed by a computer
program (an abstract idea/data structure) comprised in a data structure
(storage) (supra).
Claim 6 recites a data structure (data store) comprising data structures
(metric component references) (supra), a discovery processor performing
identifying functions (a software component or module, discussed infra),
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and a registration processor (a software component or module, discussed
infra) adding metric components (data structures) to the SLM. Again, the
entire claim recites only data elements and abstract ideas.
While Appellants are correct that the mere inclusion of data structures
does not take a claim outside the scope of § 101, claims directed to no more
than abstract ideas and data structures fail to meet the requirements of § 101.
Appellants’ reliance on Lowry (Req. Reh’g. 9, 11) is misplaced. In Lowry,
the claimed memory included a particular data structure for organizing
memory (a functionally related device/machine/hardware component) to
improve efficiency. See Lowry, 32 F.3d at 1583-84. In other words,
Lowry’s stored data structure changed the memory and was functionally
related to the memory. On the other hand, the data structure described in
Warmerdam was claimed in the abstract and was not capable of causing
functional change in a computer. See Warmerdam, 33 F.3d at 1361. The
present claims recite data structures in the abstract and do not functionally
relate the data structures to any machine(s) or device(s). Accordingly, we
also find this argument unavailing.
Appellants also assert that a service level agreement (SLA) should not
be considered abstract as it is not positively recited. (Req. Reh’g. 11.) Each
of the disputed claims contains limitations directed to identifying metric
component data structures that can be incorporated into an SLA to be
managed by the SLM. Here, the SLA is functionally related to the metric
components (data structures) but merely represents an abstract concept – an
agreement – much like the concept of hedging found to be abstract in the
Bilski opinions:
We hold that the Applicants’ process as claimed does not
transform any article to a different state or thing. Purported
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transformations or manipulations simply of public or private
legal obligations or relationships, business risks, or other such
abstractions cannot meet the test because they are not physical
objects or substances, and they are not representative of
physical objects or substances.
In re Bilski, 545 F.3d 943, 963 (Fed. Cir. 2008) (en banc), aff’d sub nom.
Bilski v. Kappos, 130 S.Ct. 3218 (2010) (emphasis added).
In light of these precedents, it is clear that petitioners'
application is not a patentable “process.”. . . The concept of
hedging, described in claim 1 and reduced to a mathematical
formula in claim 4, is an unpatentable abstract idea, just like the
algorithms at issue in Benson and Flook. Allowing petitioners
to patent risk hedging would pre-empt use of this approach in
all fields, and would effectively grant a monopoly over an
abstract idea.
Bilski, 130 S.Ct. at 3231.
Allowing Appellants to patent methods of configuring, identifying
and incorporating data into an SLA and a system for managing an SLA
“would effectively grant a monopoly over an abstract idea.” Id.
Thirdly, Appellants contend that claims 1, 6, and 8 are directed to at
least a process, a machine, and a manufacture respectively, that claim 1
employs the use of a computer (hardware), and that claims 6 and 8 recite
particular machines and implicate the use of a computer and hardware (Req.
Reh’g. 7-8, 10, 12-16).
We reiterate that we give claim limitations their broadest reasonable
construction (supra). We also note that regardless of form, the analysis of a
“method,” “machine,” and “manufacture” claim is the same under § 101.
See AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352, 1357 (Fed.
Cir. 1999) (abrogated by In re Bilski, 545 F.3d 943) (“Whether stated
implicitly or explicitly, we consider the scope of § 101 to be the same
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regardless of the form--machine or process--in which a particular claim is
drafted.”); State Street Bank & Trust Co. v. Signature Financial Group, Inc.,
149 F.3d 1368 (Fed. Cir. 1998) (abrogated by In re Bilski, 545 F.3d 943).
Here, Appellants’ claims do not recite any particular structure or
hardware, and the limitations are not explicitly tied to any machine. With
respect to method (process) claim 1, we previously explained that this claim
only recites data elements and abstract ideas interrelated by functional
processes realized in software. Claim 1 does not employ nor implicate the
use of computer.
With respect to Appellants’ processor elements in claim 6 (the
“machine claim”), we broadly but reasonably construe these “processors” to
simply be software components or modules (computer instructions) that
perform the recited functionality when executed by a computer.
Specifically, the recitation of a “processor” (“discovery processor” or
“registration processor”) performing various functions (the recited discovery
processor performing identifying functions and registration processor adding
metric components to the SLM) fails to impose any meaningful limits on the
claim’s scope. Here, there is no distinguishable difference between the
process and processor (e.g., a discovery process identifying data structures
as compared with a discovery processor identifying data structures). The
recitation of a processor in combination with purely functional recitations of
method/process steps, where the functions are implemented using an
unspecified algorithm, is insufficient to transform otherwise unpatentable
method steps into a patent eligible process. Holding otherwise would exalt
form over substance and would allow pre-emption of the fundamental
principle present in the non-machine implemented method by the addition of
the mere recitation of a “processor.” Such a field-of-use limitation is
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insufficient to render an otherwise ineligible process claim patent eligible.
See In re Bilski, 545 F.3d at 957 (citing Diehr, 450 U.S. at 191-92 (noting
that eligibility under § 101 “cannot be circumvented by attempting to limit
the use of the formula to a particular technological environment.”)).
Accordingly, Appellants’ SLM system is a system of only data elements and
abstract ideas interrelated by functional processes realized in software – a
“software system” or “software per se.” The system does not necessarily
implicate nor requires the use of hardware.
We again find Appellants’ contrary arguments unavailing. That claim
6 also recites the processors are “programmed” adds no meaningful limit to
the claims scope – the processors (software modules) simply are capable of
performing the recited functions when executed by a computer.
Accordingly, the processors are also software, an abstract idea.
With respect to the machine readable storage of claim 8 (the “machine
claim”), we previously explained that we construe the storage to be a data
structure. Claim 8 only recites data elements and abstract ideas interrelated
by functional processes realized in software; it does not employ nor
implicate the use of computer, hardware, or a machine.
As USPTO guidelines4 explain:
A claim that includes terms that imply the invention is directed
to a product . . . but fails to include tangible limitations in
accordance with its broadest reasonable interpretation is not
limited to a practical application, but rather wholly embraces or
encompasses the concept upon which the invention is based.
This is impermissible as such claim coverage would extend to

4 Interim Examination Instructions for Evaluating Subject Matter Eligibility
Under 35 U.S.C. § 101, http://www.uspto.gov/web/offices
/pac/dapp/opla/2009-08-25_interim_101_instructions.pdf, at 3 (Aug. 2009).
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every way of applying the abstract idea, law of nature or natural
phenomenon.
Because claims 1, 6, and 8 recite only data structures and abstract
ideas, they fail to include tangible limitations. Thus, the scope of these
claims is not limited to any particular practical application. The claims are
therefore patent ineligible. Moreover, without tying these functional
limitations to any concrete parts, devices, or combinations of devices, these
functional limitations could be performed solely within one’s mind and are
therefore unpatentable. See Benson, 409 U.S. at 72; Comiskey, 554 F.3d at
979.
For all these reasons, we agree with the Decision that Appellants’
claims are “directed to software per se, abstract ideas, abstract concepts and
methodologies, and the like.” (Dec. 5.) We also agree that
[the] claimed data store [(of claims 1, 6, and 8)] is not stated to
store anything but is merely stated to comprise or be data
elements per se[,] . . . claim 6 appears to be only a software
“system,” . . . . [and with respect to the] machine readable
storage in the preamble of independent claim 8 . . . . [i]t appears
that the computer program and the routine set of instructions
associated with it comprise the readable storage itself.
(Dec. 6.)
Thus, we find that Appellants’ disputed claims 1, 6, and 8 fail to meet
the requirements of 35 U.S.C. § 101. We conclude that the Decision
properly presented a new ground of rejection under § 101, and we find
Appellants have not presented any persuasive evidence that the panel’s
decision was in error. Accordingly, we decline to make any substantive
change in the panels’ decision rejecting Appellants’ claims 1-12 under 35
U.S.C. § 101.

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CONCLUSION
We conclude and hold that Appellants’ claims 1-12 fail to meet the
requirements of 35 U.S.C. § 101. The Decision properly considered all of
the evidence of record and properly presented a new ground of rejection
under § 101. Accordingly, we decline to make any substantive change in the
panel’s decision rejecting Appellants’ claims 1-12 under 35 U.S.C. § 101 for
reasons stated in the Decision and as set forth above. Although the panel
had the authority and discretion to vacate the Examiner’s prior art rejections
of claims 1-12, we conclude that the most appropriate action is to not reach
these rejections. Accordingly, we vacate the vacatur of the Examiner’s prior
art rejections of claims 1-12 under §§ 102 and 103, and we decline to reach
the rejection of claims 1-12 under §§ 102 and 103. Because we maintain the
new ground of rejection under § 101 and do not reach the prior art rejections,
the Decision remains in the same procedural posture. We decline to
withdraw the § 101 or substantively review the Examiner’s §§ 102 and 103
rejections. Accordingly, we do not grant the relief requested (to the extent
such relief is requested) in Appellants’ Request for Rehearing.

DECISION
We have granted Appellants’ Request to the extent we have
reconsidered the Decision as indicated above. We decline to make any
substantive change to the new ground of rejection of Appellants’ claims 1-12
under 35 U.S.C. § 101. We also vacate the vacatur of the rejections of
claims 1-12 under §§ 102 and 103, and we decline to reach the rejection of
claims 1-12 under §§ 102 and 103.

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DENIED

peb
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BLANKENSHIP, Administrative Patent Judge, Concurring.
I do not join, nor do I express any opinion about, the Issue 1 “vacatur”
analysis and result. In my view, the issue is not properly before this panel
because Appellants’ only request for relief in the rehearing is that we reverse
the § 101 rejection that was entered in a new ground of rejection. Although
Appellants complain that the Board lacks authority to “vacate” appealed
rejections, Appellants do not request in the rehearing that we reach a
decision on the merits of the (vacated) prior art rejections that were entered
by the Examiner. Nor do Appellants request that we reverse or “vacate” the
earlier panel’s vacatur.

Msc/peb