Ex Parte Asher et al

Patent Trials and Appeals Board

Jun 25, 2019

10651537 - (D) (P.T.A.B. Jun. 25, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
10/651,537 08/29/2003
63710 7590 06/27/2019
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
FIRST NAMED INVENTOR
Joseph M. Asher
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
03-6167 1237
EXAMINER
SHAIKH, MOHAMMAD Z
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
06/27/2019 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):
patentdocketing@cantor.com
lkorovich@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 JOSEPH M. ASHER,
ASHWINI K. CHHABRA, and
HOW ARD W. LUTNICK
Appeal2017---005488
Application 10/651,537 1
Technology Center 3600
Before HUBERT C. LORIN, BIBHU R. MOHANTY, and
BRUCE T. WIEDER, Administrative Patent Judges.
LORIN, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Joseph M. Asher (Appellants) seek our review under 35 U.S.C.
§ 134(a) of the Final Rejection of claims 1, 3-17, 19-33, and 35-51. We
have jurisdiction under 35 U.S.C. § 6(b ).
SUMMARY OF DECISION
We AFFIRM.
1 The Appellants identify Cantor Index, LLC as the real party in interest.
App. Br. 2.
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Application 10/651,537
THE INVENTION
Claim 1, reproduced below ( emphasis added), is illustrative of the
subject matter on appeal.
1. A method, comprising:
receiving, by a computer processor, an indication
that a prospective wagerer has entered into a transaction for goods,
services or a financial transaction, the transaction being associated
with a non-zero monetary value; and
in response to receiving the indication, by the
computer processor:
receiving the value associated with the
trans action;
offering to the wagerer via a display device,
an opportunity to wager for a prize, the prize having a value derived
from the value of the transaction;
receiving from the wagerer the wagerer 's
selection of a non-zero risk value for the wager;
computing an odds value for the wager, the
computing based at least in part upon the value of the prize and the
risk value;
identifying an event having a possible
outcome whose odds of occurring are equal to the computed odds
value;
determining an actual outcome of the event;
and
determining whether the wager is won based
at least in part on the determined actual outcome of the identified
event.
THE REJECTION
The following rejection is before us for review:
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Claims 1, 3-17, 19-33, and 35-51 are rejected under 35 U.S.C. § 101
as being directed to judicially-excepted subject matter.
ISSUE
Did the Examiner err in rejecting claims 1, 3-17, 19-33, and 35-51
under 35 U.S.C. § 101 as being directed to subject matter judicially-excepted
from patent-eligibility?
ANALYSIS
The rejection of claims 1, 3-17, 19-33, and 35-51 under 35 U.S.C. §101 as
being directed to judicially-excepted subject matter.
Representative claim
The Appellants argued these claims as a group. App. Br. at 5-14. We
select claim 1 (reproduced above) as the representative claim for this group,
and the remaining claims 3-17, 19-33, and 35-51 stand or fall with claim 1.
37 C.F.R. § 4I.37(c)(l)(iv).
The Appellants set forth "Second to Forty-Fifth Groups." App. Br.
13. ( emphasis omitted). Other than indicating that each claim in these
groups have different recitations and asking that "each claim and its
recitations, considered individually and in combination, be considered
separately for purposes of this Appeal Brief' (App. Br. 13), no separate
argument for patent-eligibility is presented. In effect, the Appellants merely
point out what each claim recites. This will not be considered an argument
for separate patentability of the claims. 37 C.F.R. 41.37(0)(1).
Preliminary comment
3
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In their briefs, the Appellants refer to prior US PTO guidance ( e.g.,
"the guidelines of the IEG" (App. Br. 5)). Said guidance has been
superseded by the 2019 Revised Patent Subject Matter Eligibility Guidance,
84 Fed. Reg. 50 (Jan. 7, 2019) (hereinafter "2019 Revised 101 Guidance").
2019 Revised 101 Guidance 51 ("Eligibility-related guidance issued prior to
the Ninth Edition, R---08.2017, of the MPEP (published Jan. 2018) should
not be relied upon."). Accordingly, our analysis will not address the
sufficiency of the Examiner's rejection against the cited prior guidance.
Rather, our analysis will comport with the 2019 Revised 101 Guidance.
Introduction
35 U.S.C. § 101 provides that "[w]hoever 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."
In that regard, claim 1 covers a "process" and is, thus, statutory
subject matter for which a patent may be obtained. 2 This is not in dispute.
However, the§ 101 provision "'contains an important implicit
exception: Laws of nature, natural phenomena, and abstract ideas are not
patentable."' Alice Corp. v. CLS Bankint'l, 573 U.S. 208,216 (2014)
(quoting Ass 'n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S.
576, 589 (2013)).
2 This corresponds to Step 1 of the 2019 Revised 101 Guidance which
requires determining whether a "claim is to a statutory category." 2019
Revised 101 Guidance 53; see also id. at 53-54 ("[C]onsider[] whether the
claimed subject matter falls within the four statutory categories of patentable
subject matter identified by 35 U.S.C. [§] 101 .... ").
4
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In that regard, notwithstanding claim 1 covers statutory subject
matter, the Examiner has raised a question of patent-eligibility on the
ground that claim 1 is directed to an abstract idea. Eligibility is a question of
law based on underlying facts. SAP Am. v. Investpic, LLC, 890 F.3d 1016,
1020 (Fed. Cir. 2018).
Alice identifies a two-step framework for determining whether
claimed subject matter is directed to an abstract idea. Alice, 573 U.S. at 217.
Alice step one - the "directed to" inquiry
According to Alice step one, "[w]e must first determine whether the
claims at issue are directed to a patent-ineligible concept." Id. at 218
( emphasis added).
The Examiner determined that claim 1 is directed to
receiving an indication that a prospective wagerer has
entered into a transaction for goods, services or a
financial transaction associated with a non-zero monetary
value, in response to receiving the indication receiving
the value associated with the transaction, offering the
wagerer an opportunity to wager for a prize with the
prize having a value derived from the value of the
transaction, receiving from the wagerer the wagerer' s
selection of a non-zero risk value for the wager,
computing an odds value for the wagerer based on the
value of the prize and the risk value, identifying an event
having a possible outcome whose odds of occurring are
equal to the computed odds value, determining an
outcome of the event, and determining whether the wager
is won based on the determined actual outcome of the
identified event.
Final Act. 2-3.
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The Appellants contend that
App. Br. 12.
the present claims solve a problem rooted in computer
technology to improve the functionality of computer-
implemented systems by enabling a bet type that involves
computer-assisted calculations to implement and manage
in real time. The claimed solution is necessarily
implemented in a networked computer environment due
to the fast calculations required and the placing of the bet
over a computer network.
Accordingly, there is a dispute over what claim 1 is directed to. Is it
directed to ". . . determining whether . . . [a] wager is won based on the
determined actual outcome of the identified event" (Final Act. 2-3) or "a
problem rooted in computer technology" (App. Br. 12)?
Claim Construction3
3 "[T]he important inquiry for a § 101 analysis is to look to the claim."
Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336,
1345 (Fed. Cir. 2013). "In Bancorp Servs., L.L.C. v. Sun Life Assurance Co.
of Can., 687 F.3d 1266, 1273 (Fed. Cir. 2012), the court observed that
'claim construction is not an inviolable prerequisite to a validity
determination under § 101.' However, the threshold of§ 101 must be
crossed; an event often dependent on the scope and meaning of the claims."
Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1347--48
(Fed. Cir. 2015).
6
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We consider the claim as a whole4 giving it the broadest reasonable
construction 5 as one of ordinary skill in the art would have interpreted it in
light of the Specification 6 at the time of filing.
Claim 1 calls for a "method, comprising:"
receiving, by a computer processor, [Information A J; and
in response to receiving [Information AJ, by the computer processor:
receiving [Information BJ;
claim 1,
where
offering to [ a J wagerer via a display device, [Information CJ;
receiving from the wagerer [Information DJ;
computing [Information EJ;
identifying [Information FJ;
determining [Information GJ; and
determining [Information HJ.
Information A= "an indication that a prospective wagerer has
entered into a transaction for goods, services or a financial transaction,
the transaction being associated with a non-zero monetary value;"
Information B = "the value associated with the transaction;"
4 "In determining the eligibility of respondents' claimed process for patent
protection under § 101, their claims must be considered as a whole."
Diamond v. Diehr, 450 U.S. 175, 188 (1981).
5 2019 Revised 101 Guidance 53 n.14 (If a claim, "under its broadest
reasonable interpretation ... " ( emphasis added).).
6 "First, it is always important to look at the actual language of the claims.
. . . Second, in considering the roles played by individual limitations, it is
important to read the claims 'in light of the specification."' Smart Sys.
Innovations, LLC v. Chicago Transit Authority, 873 F.3d 1364, 1378 (Fed.
Cir. 2017) (J. Linn, dissenting in part and concurring in part), citing Enfzsh,
LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016), among
others.
7
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Application 10/651,537
Information C = "an opportunity to wager for a prize, the prize
having a value derived from [Information BJ;"
Information D = "the wagerer's selection of a non-zero risk
value for the wager;"
Information E = "an odds value for the wager, the computing
based at least in part upon the [Information CJ and [Information DJ;"
Information F = "an event having a possible outcome whose
odds of occurring are equal to [Information EJ;"
Information G = "an actual outcome of the event," and,
Information H = "whether the wager is won based at least in
part on [Information GJ."
The claim provides no structural details 7 that would distinguish the
individual "computer processor" and "display device" from those that were
well known8 at the time the application was filed. (Appeal Br. 15).
One difference between the claimed "computer processor" and other
well-known computer processors is that the claimed "computer processor"
7 Cf Move, Inc. v. Real Estate Alliance Ltd., 721 Fed. Appx. 950 (Fed. Cir.
2018) (N onprecedential) ("Claim 1 is aspirational in nature and devoid of
any implementation details or technical description that would permit us to
conclude that the claim as a whole is directed to something other than the
abstract idea identified by the district court.").
8 Cf Intellectual Ventures I LLC v. Capital One Financial Corporation, 850
F.3d 1332, 1341 (Fed. Cir. 2017) ('the claims recite ... [J a generic
computer element-a processor- ... "'); Planet Bingo, LLC v. VKGS LLC,
576 Fed. Appx. 1005, 1008 (Fed. Cir. 2014) (nonprecedential). ('the claims
at issue ... [J require' 'a computer with a central processing unit,' 'a
memory,' 'an input and output terminal,' 'a printer,' in some cases 'a video
screen,' and 'a program ... enabling' the steps of managing a game of bingo
... the claims recite a generic computer implementation of the covered
abstract idea."); and, Smartflash LLC v. Apple Inc., 680 Fed. Appx. 977, 984
(Fed. Cir. 2017) ( nonprecedential) ("we find here that 'interfaces,' 'program
stores,' and 'processors' are all generic computer components.")
8
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receives a certain type of information and, in response to that, receives,
offers, computes, identifies, and determines other types of information.
(Appeal Br. 15). The difference between the claimed "display device" and
other well known display devices is that the" display device" offers certain
information provided to it by the "computer processor." (Appeal Br. 15) But
an informational difference alone is not patentably consequential. This is so
because "[ c ]laim limitations directed to the content of information and
lacking a requisite functional relationship are not entitled to patentable
weight because such information is not patent eligible subject matter under
35 U.S.C. § 101." Praxair Distrib., Inc. v. Mallinckrodt Hosp. Prods. IP
Ltd., 890 F.3d 1024, 1032 (Fed. Cir. 2018).
Functionally, claim 1 calls on the "computer processor" and "display
device" to perform certain processing steps. The processing steps are
receiving, offering, computing, identifying, and determining. (Appeal Br.
15).
A scheme is described by these steps whereby a prospective wagerer
who has entered into a transaction is given the opportunity to wager for a
prize "having a value derived from the value of the transaction" ( claim 1 ).
The wagerer wins the prize "based at least in part on the determined actual
outcome of [an] identified event" ( claim 1 ); the "identified event" being that
"having a possible outcome whose odds of occurring are equal to [a]
computed odds value" ( claim 1 ), which "computed odds value" is based on a
selection of a non-zero risk value received from the wagerer and the value
of the prize. The steps describe a wagering scheme for a prize. The
Specification supports this view.
9
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The Specification states that the "present invention relates generally
to wagering systems and more particularly to a system and method for
wagering the value of a financial transaction" (Spec. 1 :3--4) and describes
embodiments for establishing a wager (id. at 3:2-12). One technique
comprises determining a prize for a wager and
determining a risk value for the wager. The method
continues by determining odds associated with the wager,
wherein the odds are based at least in part upon a value
of the prize and the risk value. The method concludes by
determining whether the wager is won as a function of
the determined odds.
Id. at 3:2---6. According to the Specification, "[a]n advantage of the system
and method described herein is that the value of a financial transaction may
now be wagered according to odds that are dynamically determined based
upon the value of the prize of the wager and the risk value associated with
the wager." Id. at 3:15-18.
Based on the record before us, the steps for carrying out the recited
wagering scheme do not ask the "computer processor" and "display device"
to go beyond their common information-processing functions. (Appeal Br.
15). While computer-based instructions can be patentably significant (see
Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) andAncora
Technologies, Inc. v. HTC America, Inc., 908 F.3d 1343 (Fed. Cir. 2018)),
here the instant record does not sufficiently support the view that said steps
have any non-conventional effect on the "computer processor" and "display
device." To the contrary, the record supports viewing the inclusion of the
phrases "computer processor" and "display device" as amounting to a mere
instruction to implement the recited wagering scheme for a prize on generic
10
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components of a generic computer. Cf Alice, 573 U.S. at 225-26 ("Instead,
the claims at issue amount to 'nothing significantly more' than an instruction
to apply the abstract idea of intermediated settlement using some
unspecified, generic computer.").
Accordingly, we reasonably broadly construe claim 1 as being
directed to a wagering scheme for a prize implemented on a generic
computer system.
The Abstract Idea 9
Above, where we reproduce claim 1, we identify in italics the
limitations we believe recite an abstract idea. 10 Based on our claim
construction analysis (above), we determine that the identified limitations
describe a type of commercial interaction, more particularly a wagering
scheme for a prize. Since this is a method of organizing human activity, it is
9 This corresponds to Step 2A of the 2019 Revised 101 Guidance. Step 2A
determines "[w]hether a [c]laim [i]s '[d]irected to' a Li]udicial [e]xception,"
such as an abstract idea. 2019 Revised 101 Guidance 53. Step 2A is a two
prong mqmry.
10 This corresponds to Prong One (a) of Step 2A of the 2019 Revised 101
Guidance. "To determine whether a claim recites an abstract idea in Prong
One, examiners are now to: (a) Identify the specific limitation(s) in the
claim under examination (individually or in combination) that the
[E]xaminer believes recites an abstract idea .... " 2019 Revised 101
Guidance 54.
11
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an abstract idea. 11 The remaining (i.e., not italicized) limitations do no more
than require computer elements (i.e., a "computer processor" and a "display
device") to be used as a tool to perform this abstract idea. (Appeal Br. 15).
Improvement in the Functioning of a Computer 12 (Appellants'
Argument)
11 This corresponds to Prong One ("Evaluate Whether the Claim Recites a
Judicial Exception") (b) of Step 2A of the 2019 Revised 101 Guidance.
"To determine whether a claim recites an abstract idea in Prong One,
examiners are now to: ... (b) determine whether the identified limitation( s)
falls within the subject matter groupings of abstract ideas enumerated in
Section I of the [2019 Revised 101 Guidance]." 2019 Revised 101 Guidance
54. This case implicates subject matter grouping "(b )": "(b) Certain
methods of organizing human activity-fundamental economic principles or
practices (including hedging, insurance, mitigating risk); commercial or
legal interactions (including agreements in the form of contracts; legal
obligations; advertising, marketing or sales activities or behaviors; business
relations); managing personal behavior or relationships or interactions
between people (including social activities, teaching, and following rules or
instructions)." Id. at 52 (emphasis added).
12 This corresponds to Prong Two ("If the Claim Recites a Judicial
Exception, Evaluate Whether the Judicial Exception Is Integrated Into
a Practical Application") of Step 2A of the 2019 Revised 101 Guidance.
2019 Revised 101 Guidance 54. "A claim that integrates a judicial
exception into a practical application will apply, rely on, or use the judicial
exception in a manner that imposes a meaningful limit on the judicial
exception, such that the claim is more than a drafting effort designed to
monopolize the judicial exception." Id. One consideration, implicated here,
that is "indicative that an additional element ( or combination of elements)[]
may have integrated the exception into a practical application" (id. at 55) is
if "[a]n additional element reflects an improvement in the functioning of a
computer, or an improvement to other technology or technical field" (id.).
12
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The Examiner's characterization of what the claim is directed to is
similar to our own ("wagering scheme"), albeit our characterization is
described at a lower level of abstraction. Cf Apple, Inc. v. Ameranth, Inc.,
842 F.3d 1229, 1240-41 (Fed. Cir. 2016) ("An abstract idea can generally be
described at different levels of abstraction. As the Board has done, the
claimed abstract idea could be described as generating menus on a computer,
or generating a second menu from a first menu and sending the second menu
to another location. It could be described in other ways, including, as
indicated in the specification, taking orders from restaurant customers on a
computer.")
The Appellants dispute the Examiner's characterization. Presumably,
the Appellants would dispute our characterization as well.
We have reviewed the record and are unpersuaded as to error in our or
the Examiner's characterization of what claim 1 is directed to.
The Appellants argue that insufficient evidence has been provided to
show that the Examiner's characterization (and thus our own) of what the
claim is directed to is a fundamental business practice and accordingly an
abstract idea. App. Br. 6-7. Suffice it to say that one of ordinary skill
would know that wagering is a fundamental business practice. The
Specification says as much. See, e.g., Spec. 2:3--4 ("Various types of betting
products and systems exist that facilitate betting on the outcome of a
particular game.").
The Appellants further argue that the steps are too detailed to be
directed to an abstract idea. App. Br. 6-7. But the question under step one
13
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of the Alice framework is not how detailed the concept is described in the
claim but whether as described it is directed to an abstract idea. Here it is.
The Appellants disagree, arguing that the claimed subject matter is
instead directed to an improvement in computer functionality - albeit the
Appellants make the argument in the context of challenging the Alice step
two determination. See, e.g., App. Br. 12. As we explain in more detail
below in our Alice step two analysis, we are unpersuaded that the record
supports such a characterization of what claim 1 is directed to.
It is true that specific asserted improvements in computer capabilities,
when claimed, can render claimed subject matter not directed to an abstract
idea. Cf McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299,
1316 (Fed. Cir. 2016) ("When looked at as a whole, claim 1 is directed to a
patentable, technological improvement over the existing, manual 3-D
animation techniques."). However, there is insufficient evidence in the
record before us that the claimed subject matter reflects any specific asserted
improvement in computer capabilities.
"The 'abstract idea' step of the inquiry calls upon us to 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 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)); see also Enfzsh, 822 F.3d at 1335, quoted in Apple, 842 F.3d at
1241; see alsoAncora, 908 F.3d at 1347:
We examine the patent's "'claimed advance' to determine whether the
claims are directed to an abstract idea." Finjan, Inc. v. Blue Coat Sys.,
Inc., 879 F.3d 1299, 1303 (Fed. Cir. 2018).") "In cases involving
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software innovations, this inquiry often turns on whether the claims
focus on 'the specific asserted improvement in computer capabilities .
. . or, instead, on a process that qualifies as an "abstract idea" for
which computers are invoked merely as a tool."' Id. ( quoting Enfzsh,
822 F.3d at 1335-36); see BSG Tech LLC v. Buyseasons, Inc., 899
F.3d 1281, 1285-86 (Fed. Cir. 2018). Computers are improved not
only through changes in hardware; "[ s ]oftware can make non-abstract
improvements to computer technology .... " Enfish, 822 F.3d at
1335. See Finjan, 879 F.3d at 1304. We have several times held
claims to pass muster under Alice step one when sufficiently focused
on such improvements.
As we pointed out above in our Claim Construction analysis, the
Specification's description of the invention and its advantage shows the
advance over the prior art by the claimed invention is in a particular
wagering scheme for a prize, not on any improvement in computer
functionality. The heart of the invention lies in how the wagering is to be
conducted, not the "computer processor" or "display device" which, as the
Specification indicates, are merely generic. Cf Intellectual Ventures I LLC
v. Erie Indemnity Co., 850 F.3d 1315, 1328 (Fed. Cir. 2017) ("[T]he heart of
the claimed invention lies in creating and using an index to search for and
retrieve data ... an abstract concept.").
We have carefully reviewed the Specification but can find no
disclosure of an improvement to computer functionality.
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Rather than being directed to any specific asserted improvement in
computer capabilities, the record supports the view that the claimed subject
matter is directed to a wagering scheme. 13
We have considered all the Appellants' arguments challenging the
Examiner's determination under step one of the Alice framework and find
them unpersuasive. For the foregoing reasons, the record supports the
Examiner's determination that claim 1 is directed to an abstract idea.
Alice step two-Does the Claim Provide an Inventive Concept? 14
Step two is "a search for an 'inventive concept'-i.e., an element or
combination of elements that is 'sufficient to ensure that the patent in
practice amounts to significantly more than a patent upon the [ineligible
concept] itself."' Alice, 573 U.S. at 217-18 ( quoting Mayo Collaborative
Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 73 (2012)).
In that regard, the Examiner determined the following:
13 See the 2019 Revised 101 Guidance 55 ("The courts have also identified
examples in which a judicial exception has not been integrated into a
practical application: An additional element merely recites the words 'apply
it' ( or an equivalent) with the judicial exception, or merely includes
instructions to implement an abstract idea on a computer, or merely uses a
computer as a tool to perform an abstract idea.").
14 This corresponds to Step 2B of the 2019 Revised 101 Guidance page 56
("[I]f a claim has been determined to be directed to a judicial exception
under revised Step 2A, examiners should then evaluate the additional
elements individually and in combination under Step 2B to determine
whether they provide an inventive concept (i.e., whether the additional
elements amount to significantly more than the exception itself).").
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Final Act. 3.
The claims do not include additional elements that are
sufficient to amount to significantly more than the
judicial exception because the claim(s) as a whole,
considering all claim elements both individually and in
combination, do not amount to significantly more than an
abstract idea. The additional element(s) or combination
of elements in the claim( s) other than the abstract idea
per se amount(s) to no more than: (i) mere instructions to
implement the idea on a generic computer and (ii)
recitation of generic computer structure that serves to
perform generic computer and network functions (Spec.
page 5) that are well-understood, routine, and
conventional activities previously known to the pertinent
industry. Viewed as a whole, these additional claim
element( s) do not provide meaningful limitation( s) to
transform the abstract idea into a patent eligible
application of the abstract idea such that the claim(s)
amounts to significantly more than the abstract idea
itself.
We agree with the Examiner's analysis and determination.
The Appellants argue that "the present claims solve a problem rooted
in computer technology to improve the functionality of computer-
implemented systems by enabling a bet type that involves computer-assisted
calculations to implement and manage in real time. The claimed solution is
necessarily implemented in a networked computer environment due to
the fast calculations required and the placing of the bet over a computer
network." App. Br. 12. The difficulty with this argument is that we can find
no basis for it in the claim or the Specification. "Many of appellant's
arguments fail from the outset because, ... they are not based on limitations
appearing in the claims .... " In re Self, 671 F.2d 1344, 1348 (CCPA 1982).
Nowhere in the record is there any suggestion that following the wagering
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scheme as claimed on a generic computer "enabl[ es] a bet type that involves
computer-assisted calculations to implement and manage in real time," let
alone solves a problem with "the fast calculations required and the placing
of the bet over a computer network" as the Appellants argue. App. Br. 12. A
"network" is not even mentioned. The argument is not only not
commensurate in scope with what is claimed but, because the record does
not reflect it, amounts to mere attorney argument. Attorney argument,
however, cannot take the place of record evidence. See In re Geisler, 116
F.3d 1465, 1470 (Fed. Cir. 1997); Johnston v. IVAC Corp., 885 F.2d 1574,
1581 (Fed. Cir. 1989).
Above, we noted that specific asserted improvements in computer
capabilities can tum claimed subject matter away from being directed to an
abstract idea under step one of the Alice framework. This is consistent with
the case law. See Ancora, 908 F.3d at 1347 ("We have several times held
claims to pass muster under Alice step one when sufficiently focused on
such improvements."). Such an argument, as the Appellants have done here
(see App. Br. 12), can also challenge a determination under step two of the
Alice framework. See buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1354--
55 (Fed. Cir. 2014). "[R ]ecent Federal Circuit jurisprudence has indicated
that eligible subject matter can often be identified either at the first or the
second step of the Alice/Mayo . .. [framework]." 2019 Revised 101
Guidance 53; see also id. at 53 n.17.
Be that as it may, we are unpersuaded that claim 1 presents an element
or combination of elements indicative of a specific asserted improvement in
computer capabilities, thereby rendering the claimed subject matter
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sufficient to ensure that the patent in practice amounts to significantly more
than a patent upon the trading scheme itself.
We have reviewed the Specification and, as explained above, we can
find no suggestion of any improvements to a computer system as a result of
performing the recited steps. The Specification conveys that the Appellants'
invention is focused on a wagering scheme, not on the "computer processor"
or the "display device," individually or in the combination as claimed.
Rather than focusing on the said elements, the Specification focuses on a
scheme, the "computer processor" and the "display device" being merely a
conduit for performing said scheme. Cf In re TL! Commc 'ns LLC Patent
Litig., 823 F.3d 607, 612 (Fed. Cir. 2016) ("Put differently, the telephone
unit itself is merely a conduit for the abstract idea of classifying an image
and storing the image based on its classification. Indeed, the specification
notes that it 'is known' that 'cellular telephones may be utilized for image
transmission,' id. at col. 1 11. 31-34, and existing telephone systems could
transmit pictures, audio, and motion pictures and also had 'graphical
annotation capability,' id. at col. 111. 52-59.").
The Appellants argue that the facts in DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014) match this case. App. Br.
12. We disagree. Unlike that decision, here no improvement in computer
functionality has been shown. See DDR, 773 F.3d 1245 at 1258 ("[T]he
claims at issue here specify how interactions with the Internet are
manipulated to yield a desired result-a result that overrides the routine and
conventional sequence of events ordinarily triggered by the click of a
hyperlink.").
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As discussed above, the Specification evidences the conventionality
of the claimed "computer processor" and "display device," structurally and
functionally, individually and in combination. See Spec. 5:2-22. Much like
the "data storage unit" and "computer, coupled to said storage unit" in the
claims of Alice (US Patent 7,149,720, claim 1 ), "the claims here do [ not do]
more than simply instruct the practitioner to implement the abstract idea
[ ... ] on a generic computer." Alice, 573 U.S. at 225. For the reasons
discussed above, we are unpersuaded that the record supports interpreting
the wagering scheme recited in the claim as yielding any improvement in
technology as the Appellants have argued.
We cited the Specification in our discussion as intrinsic evidence that
the claimed elements "computer processor" and "display device" are
conventional. In doing so, we have followed "Changes in Examination
Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter
Eligibility Decision (Berkheimer v. HP Inc.[, 881 F.3d 1360 (Fed. Cir.
2018)]," USPTO Memorandum, Robert W. Bahr, Deputy Commissioner For
Patent Examination Policy, April 19, 2018 (the "Berkheimer Memo")). The
court in Berkheimer held that "[t]he patent eligibility inquiry may contain
underlying issues of fact." Berkheimer, 881 F.3d at 1365 (quoting Mortgage
Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1325 (Fed.
Cir. 2016) ("The§ 101 inquiry 'may contain underlying factual issues."')).
But the court also held that "[ w ]hen there is no genuine issue of material fact
regarding whether the claim element or claimed combination is well-
understood, routine, [and] conventional to a skilled artisan in the relevant
field, this issue can be decided on summary judgment as a matter of law."
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Id. at 1368 (emphasis added). This qualification has been subsequently
reiterated.
If there is a genuine dispute of material fact, Rule 5 6
requires that summary judgment be denied. In
Berkheimer, there was such a genuine dispute for claims
4--7, but not for claims 1-3 and 9 .... [I]n accordance
with Alice, we have repeatedly recognized the absence of
a genuine dispute as to eligibility for the many claims
that have been defended as involving an inventive
concept based merely on the idea of using existing
computers or the Internet to carry out conventional
processes, with no alteration of computer functionality.
Berkheimer v. HP Inc., 890 F.3d 1369, 1371-74 (Fed. Cir. 2018) (Order, On
Petition for rehearing en bane, May 31, 2018) (Moore J. concurring); see
also Aatrix Software, Inc. v. Green Shades Software, Inc., 890 F.3d 1354,
1368 (Fed. Cir. 2018) (Order, On Petition for rehearing en bane, May 31,
2018) (Reyna, J. dissenting) ("A factual allegation or dispute should not
automatically take the determination out of the court's hands; rather, there
needs to be justification for why additional evidence must be considered-
the default being a legal determination."). Here, the Specification
indisputably shows the claimed "computer processor" and "display device"
were conventional at the time of filing. See Spec. 5:2-22. Accordingly, no
genuine issue of material fact exists as to the well-understood, routine, or
conventional nature of the claimed elements "computer processor" and
"display device," individually or in the combination as claimed.
The Appellants argue that the "Office Action did not reject any claim
under 35 U.S.C. §§ 102 or 103, thereby acknowledging that independent
claims 1, 17, and 33 are allowable over all cited art." App. Br. 8.
Notwithstanding that "'the§ 101 patent-eligibility inquiry and, say, the
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§ 102 novelty inquiry might sometimes overlap,' ... [ ] a claim for a new
abstract idea is still an abstract idea." Synopsys, Inc. v. Mentor Graphics
Corp., 839 F.3d 1138, 1151 (quoting Mayo, 566 U.S. at 90). The question in
step two of the Alice framework is not whether an additional feature is novel
but whether the implementation of the abstract idea involves "more than the
performance of 'well-understood, routine, [and] conventional activities
previously known to the industry."' Content Extraction and Transmission
LLC v. Wells Fargo Bank, Nat. Ass 'n, 776 F.3d 1343, 1347--48 (quoting
Alice, 134 S.Ct. at 2359). In that regard, for the reason discussed, the
Appellants have not shown novel features of the wagering scheme described
in the claim transform the abstract idea (i.e., wagering for a prize) into
patent-eligible subject matter.
Finally, the Appellants argue that there is no pre-emption concern.
App. Br. 12. According to the Appellants, "the claims are directed toward
specific and narrow embodiments including meaningful limitations that in
no way "tie up" or pre-empt any fundamental business practice such that
others cannot practice it." App. Br. 12.
The difficulty with this argument is that it confuses the pre-emption
concern with the level of abstraction describing the abstract idea. With
respect to the pre-emption concern, "[ w ]hat matters is whether a claim
threatens to subsume the full scope of a fundamental concept, and when
those concerns arise, we must look for meaningful limitations that prevent
the claim as a whole from covering the concept's every practical
application." CLS Banklnt'l v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1281
(Fed. Cir. 2013) (Lourie, J., concurring). Here, said relied-on claim
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limitations simply narrow the wagering abstract idea so that it is described at
a lower level of abstraction. It does not render the abstract idea to which the
claim is directed to any less an abstract idea. Pre-emption is not a separate
test.
To be clear, the proper focus is not preemption per se, for
some measure of preemption is intrinsic in the statutory
right granted with every patent to exclude competitors,
for a limited time, from practicing the claimed invention.
See 35 U.S.C. § 154. Rather, the animating concern is
that claims should not be coextensive with a natural law,
natural phenomenon, or abstract idea; a patent-eligible
claim must include one or more substantive limitations
that, in the words of the Supreme Court, add
'significantly more' to the basic principle, with the result
that the claim covers significantly less. See Mayo 132 S.
Ct. at 1294. Thus, broad claims do not necessarily raise
§ 101 preemption concerns, and seemingly narrower
claims are not necessarily exempt.
Id. See also Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1379 (Fed. Cir. 2015) ("[w]hile preemption may signal patent ineligible
subject matter, the absence of complete preemption does not demonstrate
patent eligibility."). Because we find the claimed subject matter covers
patent-ineligible subject matter, the pre-emption concern is necessarily
addressed. "Where 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." Id. at 1379.
No other persuasive arguments having been presented, we conclude
that no error has been committed in the determination under Alice step two
that claim 1 does not include an element or combination of elements
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circumscribing the patent-ineligible concept it is directed to so as to
transform the concept into an inventive application.
We have considered all of the Appellants' remaining arguments
(including those made in the Reply Brief) and find them unpersuasive.
Accordingly, because we are not persuaded as to error in the
determinations that representative claim 1, and claims 3-17, 19-33, and 35-
51, which stand or fall with claim 1, are directed to an abstract idea and do
not present an "inventive concept," we sustain the Examiner's conclusion
that they are directed to patent-ineligible subject matter for beingjudicially-
excepted from 35 U.S.C. § 101. Cf LendingTree, LLC v. Zillow, Inc., 656
Fed. App'x 991, 997 (Fed. Cir. 2016) ("We have considered all of
Lending Tree's remaining arguments and have found them unpersuasive.
Accordingly, because the asserted claims of the patents in suit are directed to
an abstract idea and do not present an 'inventive concept,' we hold that they
are directed to ineligible subject matter under 35 U.S.C. § 101."); see, e.g.,
OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1364 (Fed. Cir. 2015);
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1098 (Fed. Cir.
2016).
DECISION
The decision of the Examiner to reject claims 1, 3-17, 19-33, and 35-
51 is affirmed.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv).
AFFIRMED
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