Ex Parte CHAPA et al

Patent Trial and Appeal Board

May 29, 2018

14272942 (P.T.A.B. May. 29, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/272,942 05/08/2014
20995 7590 05/31/2018
KNOBBE MARTENS OLSON & BEAR LLP
2040 MAIN STREET
FOURTEENTH FLOOR
IRVINE, CA 92614
UNITED ST A TES OF AMERICA
FIRST NAMED INVENTOR
Isaac CHAPA
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.
EXP.830Cl 8257
EXAMINER
ZIEGLE, STEPHANIE M
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
05/31/2018 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):
j ayna.cartee@knobbe.com
efiling@knobbe.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ISAAC CHAP A,
STEVEN HATLEY, and JOE ROSS
Appeal2016-006491
Application 14/272,942 1
Technology Center 3600
Before, JOSEPH A. FISCHETTI, MICHAEL C. ASTORINO,
and BRUCE T. WIEDER, Administrative Patent Judges.
FISCHETTI, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants seek our review under 35 U.S.C. § 134 of the Examiner's
final rejection2 of claims 1-20. We have jurisdiction under 35 U.S.C. § 6(b ).
1 Appellants identify CSIDENTITY CORPORATION as the real party in
interest. Br. 3.
2 We herein refer to the Specification ("Spec.") filed May 8, 2014; Final
Office Action ("Final Act."), mailed June 11, 2015; Appeal Brief, ("Br.")
filed Nov. 9, 2015; and the Examiner's Answer, ("Ans.") mailed Apr. 5,
2015. No Reply Brief has been filed.
Appeal2016-006491
Application 14/272,942
SUMMARY OF DECISION
We AFFIRM.
THE INVENTION
Appellants claim "system[ s] and methods of delayed billing for on-
demand products" (Spec ,r 2.).
Claim 1, reproduced below, is representative of the subject matter on
appeal:
1. A method comprising:
receiving, via an on-demand product provision system comprising at
least one server computer, a binding request from a consumer, wherein the
binding request comprises a selection of an on-demand product;
providing, by the on-demand product provision system, the on-
demand product to the consumer prior to billing the consumer;
automatically determining, by the on-demand product provision
system, delayed-billing settings that are applicable to the on-demand product
based, at least in part, on the selection, wherein the delayed-billing settings
comprise one or more product-delivery factors;
determining, by the on-demand product provision system, whether
delivery of the on-demand product is successful based, at least in part, on an
evaluation of the one or more product-delivery factors;
wherein the determining whether delivery of the on-demand product
is successful comprises performing at least one of the following actions:
determining whether the consumer has been added to a system that
provides a monitoring service, the on-demand product comprising the
monitoring service;
determining whether the on-demand product has been transmitted in
its entirety to the consumer; and
determining whether the on-demand product is accessible to the
consumer over a network; and
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the on-demand product provision system delaying billing of the
consumer for the on-demand product at least until it can be determined that
the delivery of the on-demand product is successful.
(Br., Claims Appendix, 20).
THE REJECTION
The following rejection is before us for review:
Claims 1-20 are rejected under 35 U.S.C. § 101. (See Final Act. 4--5;
Ans. 2.)
ANALYSIS
35 U.S.C. § 101 REJECTION
We will sustain the rejection of claims 1-20 under 35 U.S.C. § 101.
The Supreme Court instructs us:
[we] set forth a framework for distinguishing patents that claim
laws of nature, natural phenomena, and abstract ideas from
those that claim patent-eligible applications of those concepts.
First, ... determine whether the claims at issue are directed to
one of those patent-ineligible concepts. [] If so, we then ask,
"[ w ]hat else is there in the claims before us?" [] To answer that
question, ... consider the elements of each claim both
individually and "as an ordered combination" to determine
whether the additional elements "transform the nature of the
claim" into a patent-eligible application. [] [The Court has]
described step two of this analysis as 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
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significantly more than a patent upon the [ineligible concept]
itself."
Alice Corp., Pty. Ltd. v CLS Banklnt'l, 134 S. Ct. 2347, 2355 (2014) (citing
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72-73
(2012) (citations omitted)).
To perform this test, we must first determine whether the claims at
issue are directed to a patent-ineligible concept.
Although the Court in Alice made a direct finding as to what the
claims were directed to, we find that this case's claims themselves and the
Specification provide enough information to inform one as to what they are
directed to.
The step( s) in claim 1 result in: delaying billing of the consumer for
the on-demand product at least until it can be determined that the delivery of
the on-demand product is successful.
The Specification states,
Numerous computer systems exist that provide on-
demand products to consumers. For purposes of
this patent application, an on-demand product is a
product that is requested by a consumer and is
intended by a provider to be delivered in real-time
or in near real-time. On-demand products are
generally requested electronically over a
communications network such as, for example,
public or private intranets, a public switched
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telephone network (PSTN), a cellular network, the
Internet, or the like. Examples of on-demand
products include content such as, for example, text,
graphics, photos, video, audio, code, software
applications, documents, access to cloud
applications, and the like. On-demand products
can also include content streaming, for example, of
video, audio, and the like. By way of further
example, on-demand products may include
services such as, for example, identity-monitoring
services. In general, on-demand products are not,
inter alia, physically shipped or delivered. Rather,
on-demand products are typically delivered
electronically over a communications network or
by initiating a requested service.
Specification Jr 3.
The Specification describes:
[ t ]raditionally, systems that provide on-demand
products bill for the on-demand product soon after
a consumer has made a binding request for the on-
demand product, for example, by requesting or
enrolling for the on-demand product and providing
payment information. When various complexities
cause the on-demand product to not be delivered, a
consumer is usually still charged for the on-
demand product. As consumer-protection laws and
regulations proliferate worldwide, such billing
practices can carry significant risk.
Specification ,r 4.
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Thus, all this evidence shows that claim 1 is directed to delaying
billing a consumer for the on-demand product at least until it can be
determined that the delivery of the on-demand product is successful. It
follows from prior Supreme Court cases, and Gottschalk v. Benson, 409 U.S.
63 (1972) in particular, that the claims at issue here are directed to an
abstract idea. Delaying billing a consumer for the on-demand product at
least until it can be determined that the delivery of the on-demand product is
successful is a fundamental economic practice of a transaction because
delivery of goods/services concurrent with or after payment is basic to the
transaction. The patent-ineligible end of the 35 U.S.C. § 101 spectrum
includes fundamental economic practices. See Alice Corp. Pty. Ltd., 134 S.
Ct. at 2355-1257. Also, we find the steps of:
1. automatically determining ... delayed-billing settings that are
applicable to the on-demand product based, at least in part, on the selection,
2. determining ... whether delivery of the on-demand product is
successful based, at least in part, on an evaluation of the one or more product
delivery factors;
3. wherein the determining whether delivery of the on-demand
product is successful comprises performing at least one of the following
actions:
a. determining whether the consumer has been added to a system that
provides a monitoring service, the on-demand product comprising the
monitoring service;
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b. determining whether the on-demand product has been transmitted
in its entirety to the consumer; and
c. determining whether the on-demand product is accessible to the
consumer over a network,
constitute physical acts by a human and/or "analyzing information by steps
people go through in their minds, or by mathematical algorithms, without
more, as essentially mental processes within the abstract-idea category."
Electric Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir.
2016). See also buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir.
2014) (claims directed to certain arrangements involving contractual
relations are directed to abstract ideas). Thus, delaying billing a consumer
for the on-demand product at least until it can be determined that the
delivery of the on-demand product is successful is an "abstract idea" beyond
the scope of§ 101.
As in Alice Corp. Pty. Ltd., we need not labor to delimit the precise
contours of the "abstract ideas" category in this case. It is enough to
recognize that there is no meaningful distinction in the level of abstraction
between the concept of an intermediated settlement in Alice and the concept
of delaying billing of the consumer for the on-demand product at least until
it can be determined that the delivery of the on-demand product is
successful, at issue here. Both are squarely within the realm of "abstract
ideas" as the Court has used that term. That the claims do not preempt all
forms of the abstraction or may be limited to on-demand products, does not
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make them any less abstract. See OIP Techs., Inc. v. Amazon.com, Inc., 788
F.3d 1359, 1360-61 (Fed. Cir. 2015).
The introduction of a computer into the claims does not alter the
analysis at Mayo step two.
the mere recitation of a generic computer cannot transform a
patent-ineligible abstract idea into a patent-eligible invention.
Stating an abstract idea "while adding the words 'apply it"' is
not enough for patent eligibility. [] Nor is limiting the use of an
abstract idea "'to a particular technological environment."'
Stating an abstract idea while adding the words "apply it with a
computer" simply combines those two steps, with the same
deficient result. Thus, if a patent's recitation of a computer
amounts to a mere instruction to "implemen[t]" an abstract idea
"on ... a computer," [] that addition cannot impart patent
eligibility. This conclusion accords with the preemption
concern that undergirds our § 101 jurisprudence. Given the
ubiquity of computers, ... []wholly generic computer
implementation is not generally the sort of "additional
feature[ e ]" that provides any "practical assurance that the
process is more than a drafting effort designed to monopolize
the [ abstract idea] itself."
Alice Corp. Pty. Ltd., 134 S. Ct. at 2358 (alterations in original) (citations
omitted).
"[T]he relevant question is whether the claims here do more than
simply instruct the practitioner to implement the abstract idea ... on a
generic computer." Alice Corp. Pty. Ltd., 134 S. Ct. at 2359. They do not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to take in data, compute a result, and return the result to a user
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amounts to electronic data query and retrieval-some of the most basic
functions of a computer. All of these computer functions are well-
understood, routine, conventional activities previously known to the
industry. In short, each step does no more than require a generic computer
to perform generic computer functions.
Considered as an ordered combination, the computer components of
Appellants' method add nothing that is not already present when the steps
are considered separately. Viewed as a whole, Appellants' claims simply
recite the concept of delaying billing a consumer for the on-demand product
at least until it can be determined that the delivery of the on-demand product
is successful. The claims do not, for example, purport to improve the
functioning of the computer itself. Nor do they effect an improvement in
any other technology or technical field. Instead, the claims at issue amount
to nothing significantly more than instructions to delay billing a consumer
for the on-demand product at least until it can be determined that the
delivery of the on-demand product is successful. The sequence of data
reception-analysis-access found in the determining steps is equally generic
and conventional or otherwise held to be abstract. See Ultramercial, Inc. v.
Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014) (sequence of receiving,
selecting, offering for exchange, display, allowing access, and receiving
payment recited an abstraction), Two-Way Media Ltd. v. Comcast Cable
Communications, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017) (sequence of
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processing, routing, controlling, and monitoring). The ordering of the steps
is therefore ordinary and conventional.
Under our precedents, this is not enough to transform an abstract idea
into a patent-eligible invention. See Alice Corp. Pty. Ltd., 134 S. Ct. at
2360.
As to the structural claims, they
are no different from the method claims in substance. The
method claims recite the abstract idea implemented on a generic
computer; the system claims recite a handful of generic
computer components configured to implement the same idea.
This Court has long "warn[ ed] ... against" interpreting § 101 "in
ways that make patent eligibility 'depend simply on the
draftsman's art.'
Alice Corp. Pty. Ltd., 134 S. Ct._at 2360 (alterations in original).
We have reviewed all the arguments (See Br. 6-19) Appellants have
submitted concerning the patent eligibility of the claims before us which
stand rejected under 35 U.S.C. § 101. We find that our analysis above
substantially covers the substance of all the arguments which have been
made. But, for purposes of completeness, we will address various
arguments in order to make individual rebuttals of same.
Appellants argue,
[L ]ike the stock quotes in Simpleair, both delivery
of and billing for on-demand products are time-
sensitive, as electronic delivery and billing are
real-time or near real-time processes. If a
consumer, however, is real-time billed for an on-
demand product without real-time electronic
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delivery having occurred in the way that it should,
then the consumer has been wrongly billed.
(Br. 7); see Google Inc. v. SimpleAir, Inc., CBM 2014-00170
(Jan. 22, 2015).
We disagree with Appellants. Claim 1 of U.S. Patent 8,601,154 B2
to SimpleAir Inc. deals with parsing data through a gateway configured to
"build data blocks from the parsed data and assign addresses to the data
blocks." By comparison, the most detailed recitation of device technology
in the claims at hand is a claimed, "on-demand product provision server. "3
When Appellants argue here that the realtime aspect of the claims results in
eliminating wrong billing, they are arguing an effect of the process, and not
3 Claim 1 of US Patent US 81601J54 B2 assigned to SimpleAir Inc. recites
in pertinent part:
''(c) transmitting the generated data to a central broadcast server configured
to process the generated data using at least one parser and transmit the
processed data to receivers communicatively coupled with remote
computing devices associated with subscribed users, wherein the central
broadcast server:
(i) comprises one or more servers associated with a parser to parse the
g:enerated data received from the information source:
0 '
(ii) is communicatively coupled to at least one information gateway, the
information gateway configured to build data blocks from the parsed data
and assign addresses to the data blocks; and
(iii) is communicatively coupled to at least one transmission gateway) the
transrnission gateway configured to prepare the addressed data blocks fbr
transmission to the receivers and configured to cause the addressed data
blocks to be transmitted to the receivers, and wherein the transmission is
made whether the remote computing devices are online or off1ine from a
data channel associated with the remote computing devices.')
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a technological improvement. In the claims on appeal, the claims as a whole
are not "focus[ ed] on a specific means or method that improves the relevant
technology," but rather are "directed to a result or effect that itself is the
abstract idea and merely invoke generic processes and machinery." McRO,
Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314 (Fed. Cir.
2016).
A like analysis is applicable for Appellants' argument that the claims
on appeal can be liken to those in DDR Holdings (Appeal Br. 8, 12). In
DDR, the claims at issue involved, inter alia, "web page[] displays [with] at
least one active link associated with a commerce object associated with a
buying opportunity of a selected one of a plurality of merchants" ( claim 1 of
US 7,818,399 Bl). There is no such claim element with this degree of detail
here before us. All that is required by the claims is a generically recited
"on-demand product provision server".
Appellants further argue,
Appellant[ s] respectfully submit[ s] that the mere
listing of judicial exceptions does not provide a
reasoned rationale, therefore a prima facie
rejection has not been established.
Appellant[ s] further submit[ s] that it is a
contradiction for the Office to recognize that the
subject matter to which the claims are directed
encompasses all of the recitations of the claims,
but contend[ s] that the subject matter of the claims
comprises a fundamental economic practice when
that subject matter was deemed not to have been
taught by the prior art.
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(Br. 10).
We disagree with Appellants. All that is required of the office to meet
the notice requirement of§ 132 is that the examiner must "notify the
applicant," "stating the reasons for such rejection," "together with such
information and references as may be useful in judging the propriety of
continuing prosecution of his application." 35 U.S.C. § 132. In re Jung, 637
F.3d 1356 at 1363 (Fed. Cir. 2011). Further, there is no absolute
requirement that an examiner provide evidentiary support in every case
before a conclusion can be made that a claim is directed to an abstract idea. 4
Although evidence may be helpful, e.g., where facts are in dispute, it is not
always needed. See Mortgage Grader, Inc. v. First Choice Loan Servs. Inc.,
811 F.3d 1314, 1325-26 (Fed. Cir. 2016) ("[I]t is also possible, as numerous
cases have recognized, that a § 101 analysis may sometimes be undertaken
without resolving fact issues.").
"Appellants respectfully submit that interpreting all claims that
include a general-purpose computer as encompassing an abstract idea simply
because of the existence of the general-purpose computer effectively renders
4 See, e.g., MPEP 2106.07(a)(III) (2018) ("The courts consider the
determination of whether a claim is eligible (which involves identifying
whether an exception such as an abstract idea is being claimed) to be a
question of law. Thus, the court does not require 'evidence' that a claimed
concept is a judicial exception, and generally decides the legal conclusion of
eligibility without resolving any factual issues." (Citations omitted.))
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all business methods patents patent ineligible, a result in direct contradiction
to the holdings in Bilski and Alice." (Br. 14).
We disagree with Appellants' interpretation of the precedent which
clearly states limiting an abstract concept, such as updating data, to a generic
purpose computer or apparatus, does not make the abstract concept patent-
eligible under 35 U.S.C. § 101. As recognized by the Supreme Court, "the
mere recitation of a generic computer cannot transform a patent ineligible
abstract idea into a patent-eligible invention." See Alice, 134 S. Ct. at 2359
( concluding claims "simply instruct[ing] the practitioner to implement the
abstract idea of intermediated settlement on a generic computer" not patent
eligible); see also Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715-716
(Fed. Cir. 2014)) (claims merely reciting abstract idea of using advertising as
currency as applied to particular technological environment of the Internet
not patent eligible).
Appellants further argue that, "[ t ]he present claims include recitations
of unconventional steps that confine the claim to a particular useful
application." (Br. 18).
The question in step two of the Alice framework is not whether an
additional feature is novel. "The 'novelty' of any element or steps in a
process, or even of the process itself, is of no relevance in determining
whether the subject matter of a claim falls within the § 101 categories of
possibly patentable subject matter." Diamond v. Diehr, 450 U.S. 175, 188-
89 (1981). Nor do we find persuasive Appellants' argument that the claim is
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confined to a particular application, which we understand to be an argument
that the claim does not preempt all uses of the abstract idea. But "[ w ]here a
patent's claims are deemed only to disclose patent ineligible subject matter
under the Mayo framework, as they are in this case, preemption concerns are
fully addressed and made moot." Ariosa Diagnostics, Inc. v. Sequenom,
Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
Finally, Appellants argue,
Appellant submits that the recited claims add
specific limitations other than what is well-
understood, routine and conventional in the fields
of the alleged abstract idea of "conducting a
purchase of a product," and thus are patent-eligible
at least as adding "significantly more" to an
b .d ,, a stract 1 ea, ....
(Appeal Br. 16, see also id. at 8).
We disagree with Appellants because the Examiner's reliance on the
determination of "well understood routine and conventional" extends only to
the technological environment of the claims. (Final Act. 3, stating, "The
claims merely amount to the application or instructions to apply the abstract
idea (i.e. conducting a purchase of a product) using a system comprising at
least one server, and is considered to amount to nothing more than requiring
a generic server to merely carry out the abstract idea itself.") Such an
analysis is a factual determination. See Berkheimer v. HP Inc., 881 F.3d
1360, 1369 (Fed. Cir. 2018) ("[w]hether something is well-understood,
routine, and conventional to a skilled artisan at the time of the patent is a
factual determination."). However, we agree with the Examiner that the
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claims require a technological environment which only uses well understood
routine and conventional parts because the claims at best only require a
product a server computer, and a network, or in the case of claims 20, a non-
transitory computer program. Indeed, the Specification recognizes that use
of a generic server computer, a network, and a client computing device is
conventional. (See, e.g., Spec. ,r,r 3, 16, 24.)
CONCLUSION OF LAW
We conclude the Examiner did not err in rejecting claims 1-20 under
35 U.S.C. § 101.
DECISION
The decision of the Examiner to reject claims 1-20 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). See 37 C.F.R.
§ 1.136(a)(l )(iv).
AFFIRMED.
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