Ex Parte Bruno

Patent Trial and Appeal Board

Feb 7, 2019

13412758 (P.T.A.B. Feb. 7, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/412,758 03/06/2012
62008 7590 02/11/2019
MAIER & MAIER, PLLC
345 South Patrick Street
ALEXANDRIA, VA 22314
FIRST NAMED INVENTOR
Daniel B. Bruno
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.
05380001US 8803
EXAMINER
VYAS, ABHISHEK
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
02/11/2019 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):
patent@maierandmaier.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte DANIEL B. BRUNO
Appeal2018-000828 1
Application 13/412,758
Technology Center 3600
Before MURRIEL E. CRAWFORD, MICHAEL W. KIM, and
PHILIP J. HOFFMANN, Administrative Patent Judges.
KIM, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
This is an appeal from the final rejection of claims 1, 3, 5-7, 9, 11,
and 13-15. We have jurisdiction to review the case under 35 U.S.C. §§ 134
and 6(b).
1 The Appellant identifies the inventor, Daniel B. Bruno, as the real party in
interest. Br. 2.
Appeal2018-000828
Application 13/412,758
The invention relates generally to providing debt securities
denominated in a virtual currency. Spec. ,r 1.
Independent claim 1 is illustrative:
1. A web-based system for providing debt secuntles
denominated in a virtual currency, the system comprising:
one or more decentralized data stores configured to store
a debt security instrument created by an issuer, wherein said debt
security instrument is denominated in said virtual currency,
wherein said debt security instrument comprises one or more
identifiers configured to associate said debt security instrument
to an investor;
a business web application server operatively coupled to
the one or more decentralized data stores;
a first memory in the business web application server, the
first memory containing computer-executable code that, when
processed by one or more decentralized computing devices,
performs steps comprising:
receiving a request from said investor regarding said debt
security instrument,
wherein said request comprises request information
associated with a potential transaction;
matching said investor to said debt security instrument via
one or more of said one or more identifiers;
generating a transaction from said request information,
wherein said transaction effects a change on said debt
security instrument;
recording said change to one or more of said one or more
decentralized data stores; and
transmitting to said investor a confirmation associated
with said change;
wherein the debt security instrument is configured to
mature independent of any action taken by the issuer because the
debt security instrument is pregnant with the virtual currency that
is released following a maturity event.
2
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Application 13/412,758
The Examiner rejected claims 1, 3, 5-7, 9, 11, and 13-15 under
35 U.S.C. § 112, first paragraph, as failing to comply with the written
description requirement.
The Examiner rejected claims 1, 3, 5-7, 9, 11, and 13-15 under
35 U.S.C. § 101 as directed to ineligible subject matter in the form of
abstract ideas.
We AFFIRM.
ANALYSIS
Reiection under 35 USC § 112. First Paragraph
The original version of claims 1 and 11 recited "wherein said debt
security instrument is pregnant with said virtual currency." After the
Examiner rejected the claims as indefinite because of this clause, the
Appellant "acknowledge[d] the examiner's contention that the term
'pregnant' is vague and indefinite in context of the claim as a whole," and
amended the clause out of the claims. Appellant's Amendment filed Jan. 2,
2014.
Later, the Appellant amended claims 1 and 11 to include "wherein the
debt security instrument is configured to mature independent of any action
taken by the issuer." Amendment, filed Sept. 14, 2014. In response, the
Examiner rejected the claim amendments as new matter under 35 U.S.C.
§ 112, first paragraph. Non-Final Act. 7 (mailed Oct. 1, 2015). The
Appellant responded by further amending the claim language to additionally
include "because the debt security instrument is pregnant with the virtual
currency that is released following a maturity event" after the "wherein"
clause, which led to the currently pending rejection. See Final Act. 19.
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Application 13/412,758
We are not persuaded by the Appellant's arguments that the Examiner
"failed to present any evidence or reasoning to rebut the presumption of
adequate written description," and that support for the amended limitation is
provided in paragraphs 9, 14, 16, 21, and 3 8 of the Specification. Br. 11.
The Appellant further indicates support for the limitation is provided at
paragraph 35. Id. at 3--4.
The first problem with the Appellant's argument, which cites the
MANUAL OF PATENT EXAMINING PROCEDURE ("MPEP") § 2163(II)(A)
(9th ed. 2018) (see Br. 11 ), is that the presumption upon which the argument
is based is directed to the enablement portion of the written description
requirement in§ 112, first paragraph, and applies to original claims. See
MPEP 2163(II)(A), Ninth Ed., Rev. 07.2015, November 2015, pp. 2100-
236, 238, 251.
But, as here, new or amended claims that introduce elements or
limitations that are not supported by the as-filed disclosure violate the
written description requirement. See, e.g., In re Lukach, 442 F.2d 967
(CCPA 1971).
The purpose of the written description requirement is to
prevent an applicant from later asserting that he invented that
which he did not; the applicant for a patent is therefore required
"to recount his invention in such detail that his future claims can
be determined to be encompassed within his original creation."
Amgen Inc. v. Hoechst Marion Roussel Inc., 314 F.3d 1313, 1330 (Fed. Cir.
2003) (citing Vas Cath Inc. v. Mahurkar, 935 F.2d 1555, 1561 (Fed. Cir.
1991) ). While there is no in haec verba requirement, newly added claim
limitations must be supported in the specification through express, implicit,
or inherent disclosure. The fundamental factual inquiry is whether the
specification conveys, with reasonable clarity to those skilled in the art, that
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as of the filing date sought applicant was in possession of the invention as
now claimed. See, e.g., Vas-Cath, Inc., 935 F.2d at 1563-64. When an
explicit limitation in a claim is not present in the written description, it must
be shown that a person of ordinary skill would have understood that the
description requires that limitation. Hyatt v. Boone, 146 F.3d 1348, 1353,
(Fed. Cir. 1998). If the originally-filed disclosure does not provide support
for each claim limitation, a new or amended claim must be rejected under 35
U.S.C. § 112, first paragraph, as lacking adequate written description.
Turning to the portions of the Specification identified by the
Appellant for the disputed limitation, we discern that paragraphs 9 and 16
are summary paragraphs that restate, in prose, original independent system
and method claims, including the language "wherein said debt security
instrument is pregnant with said virtual currency," but without any language
about maturity. Paragraphs 14 and 21 state "the transaction comprises a
maturity event," but provide no additional information. Paragraph 35
describes access points and decentralized system setup, but fails to describe
any maturity details. Paragraph 3 8, reproduced in its entirely below, also
does not address maturity of debt security instruments:
Another advantage the present system with respect to the
prov1s10n of debt instruments, options and other
securities/commodity trading instruments denominated in a
virtual currency is that the system is configured to allow for these
debt instruments, options and other securities/commodity trading
instruments to be pregnant with the virtual currency. In this
manner, virtual currency denominated debt instruments, options
and other securities/commodity trading instruments cannot
default. This simply is not possible with fiat currencies or other
instruments based on gold or other physical assets.
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Application 13/412,758
Spec. ,r 38. The Specification does not provide further information about the
meaning of "pregnant," and does not address actions at maturity.
The Appellant has thus not shown error in the Examiner's rejection,
because none of the cited sections of the original Disclosure establish that
the Appellant had possession of the following limitation as a whole:
"wherein the debt security instrument is configured to mature independent of
any action taken by the issuer because the debt security instrument is
pregnant with the virtual currency that is released following a maturity
event." It is left unexplained why a pregnant contract is the reason the
contract matures without action of an issuer, especially since it appears an
investor creates the pregnant contract. Therefore, we sustain the rejection of
all claims under 35 U.S.C. § 112, first paragraph, as failing to meet the
written description requirement for the amended claim language.
Rei ection under 3 5 US. C. § 101
An invention is patent-eligible if it claims a "new and useful process,
machine, manufacture, or composition of matter." 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: "[l]aws of nature, natural phenomena, and abstract
ideas" are not patentable. E.g., Alice Corp. v. CLS Bank Int 'l, 573 U.S. 208,
216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court's two-step framework, described in Mayo
and Alice. Id. at 217-18 ( citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75-77 (2012)). In accordance with that framework,
we first determine what concept the claim is "directed to." See Alice, 573
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U.S. at 219 ("On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk."); see also Bilski v. Kappas, 561 U.S. 593, 611 (2010) ("Claims 1 and 4
in petitioners' application explain the basic concept of hedging, or protecting
against risk.").
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219--20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594--95 (1978)); and
mental processes ( Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 192
( 1981) ); "tanning, dyeing, making waterproof cloth, vulcanizing India
rubber, smelting ores" (id. at 184 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267---68 (1853))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that "[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula." Diehr, 450 U.S. at 176; see also id. at 192 ("We
view respondents' claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula."). Having
said that, the Supreme Court also indicated that a claim "seeking patent
protection for that formula in the abstract ... is not accorded the protection
of our patent laws, ... and this principle cannot be circumvented by
attempting to limit the use of the formula to a particular technological
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environment." Id. ( citing Benson and Flook); see, e.g., id. at 187 ("It is now
commonplace that an application of a law of nature or mathematical formula
to a known structure or process may well be deserving of patent
protection.").
If the claim is "directed to" an abstract idea, we tum to the second
step of the Alice and Mayo framework, where "we must examine the
elements of the claim to determine whether it contains an 'inventive
concept' sufficient to 'transform' the claimed abstract idea into a patent-
eligible application." Alice, 573 U.S. at 221 ( citation omitted). "A claim
that recites an abstract idea must include 'additional features' to ensure 'that
the [claim] is more than a drafting effort designed to monopolize the
[abstract idea]."' Id. (quoting Mayo, 566 U.S. at 77). "[M]erely requir[ing]
generic computer implementation[] fail[ s] to transform that abstract idea into
a patent-eligible invention." Id.
The Examiner finds the claims "are directed to the abstract idea of
providing debt security instruments denominated in a virtual currency," and
recites steps for "providing and managing debt security instruments
(financial instruments and financial contracts or agreements)." Final
Act. 13-14. We agree. 2 For example, independent claim 1 recites
"receiving a request from said investor regarding said debt security
instrument," "matching said investor to said debt security instrument," and
"wherein said transaction effects a change on said debt security instrument,"
2 In doing so, we address the claim limitation that we find does not have
written description support. The Specification does not describe how a debt
instrument may be "pregnant with the virtual currency," so we construe this
broadly to be a standard contract for debt that describes the currency it is
valued in. See, e.g., Spec. ,r 38.
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which we agree are a part of "providing and managing debt security
instruments." We also find that "providing and managing debt security
instruments" is a fundamental economic practice.
We are not persuaded by the Appellant's argument that the present
invention provides a clear technical improvement in the creation of bonds,
through the utilization of virtual currency, with "the software-based bond
that is pregnant with the virtual currency to be released following a maturity
event." Br. 5.
The claims recite a "debt security instrument is denominated in said
virtual currency." This means the instrument is created with reference to a
"virtual currency." A "virtual currency" is described as an "electronic"
currency. Spec. ,r 36. A "currency" is not defined, and only a "fiat
currency" and a "virtual currency" are mentioned. See id. at 2, 38. The
ordinary and customary meaning of "currency" is "any form of money that
is in circulation as a medium of exchange in a country." RANDOM HOUSE
KERNERMAN WEBSTER'S COLLEGE DICTIONARY, 2010. Money itself, as a
medium of exchange, is an abstract relationship of value to something,
usually physical, that represents the value. An electronic, or virtual,
currency, then, may be merely a record of data.
Although the Appellant refers to a blockchain-based exemplary
current called a SWIFTCOIN, and a related, though undescribed contract
called a "Solidus Bond," the claims are not limited to a blockchain-based, or
any software-implemented technology. See Spec. ,r 36. Instead, the claim is
broad enough to encompass a distributed electronic record of value, much
like an account that is spread out in more than one physical location. This
can include copies, such that the claim's distributed servers may just store a
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copy of information that is a debt instrument in an abstract currency that
exists only in account form, rather than having a physical representation. As
such, merely storing copies of an account on multiple computers is not an
improvement to technology, because it is commonly done for disaster
recovery purposes.
Furthermore, inasmuch as the Appellant attaches technological
significance to the forms of currency and financial instruments created,
merely naming a currency is a standard feature of any financial instrument,
and is thus not a technological invention. Debt instruments essentially are
contracts, and as such are themselves intangible. An instrument
denominated in an abstract currency is therefore also intangible.
The Appellant's arguments of various benefits of anonymous creation,
security through a unique identifier, reduced recordkeeping, the
impossibility of counterfeiting, and so on, are not persuasive because the
claims are not limited to any implementation that may possess these alleged
benefits. Br. 6-9. Indeed, we agree with the Appellant's assertion, in
essence, that the claimed debt instrument is merely printed matter: "the
created debt security instrument is, in fact, data. The data that comprises the
financial instrument can therefore be transferred via an external device that
stores and receives the financial instrument and can transport it over distance
and time as desired by a user or investor." Id. at 9. Data is intangible, and
does not transform the claimed abstract idea into eligible subject matter.
Furthermore, the Examiner responds, and we agree, with the
following:
At best, the claims describe the automation and application
of routine, conventional technology to a fundamental economic
concept of issuing financial contracts to mitigate risk through the
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use of generic-computer functions. The ability to automate or
otherwise make more efficient traditional methods is not
sufficient to render a claim patent eligible. Relying on a
computer to perform routine tasks more quickly or more
accurately is insufficient to render a claim patent eligible. See
Alice, 134 S. Ct. at 23 59 ("use of a computer to create electronic
records, track multiple transactions, and issue simultaneous
instructions" is not an inventive concept); Bancorp Servs., L.L.C.
v. Sun Life Assur. Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed.
Cir. 2012) ( a computer "employed only for its most basic
function ... does not impose meaningful limits on the scope of
those claims").
Ans. 6; see also Spec. ,r,r 55-67 (indicating that the system can be
implemented using conventional computer components).
The Appellant has not shown error in the rejection of claims as
directed to abstract ideas. Therefore, we sustain the rejection of claims 1, 3,
5-7, 9, 11, and 13-15 under 35 U.S.C. § 101.
DECISION
We AFFIRM the rejection of claims 1, 3, 5-7, 9, 11, and 13-15 under
35 U.S.C. § 112, first paragraph.
We AFFIRM the rejection of claims 1, 3, 5-7, 9, 11, and 13-15 under
35 U.S.C. § 101.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv).
AFFIRMED
11