Ex Parte Cordelli

Patent Trial and Appeal Board

Feb 4, 2019

10661508 (P.T.A.B. Feb. 4, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
10/661,508 09/15/2003 Brandt Gerard Cardelli
23599 7590 02/06/2019
MILLEN, WHITE, ZELANO & BRANIGAN, P.C.
2200 CLARENDON BL VD.
SUITE 1400
ARLINGTON, VA 22201
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.
JCORD-0001 7398
EXAMINER
EVANS, KIMBERLYL
ART UNIT PAPER NUMBER
3629
NOTIFICATION DATE DELIVERY MODE
02/06/2019 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):
docketing@mwzb.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte BRANDT GERARD CORDELL!
Appeal2017-010865 1
Application 10/661,5082
Technology Center 3600
Before ANTON W. PETTING, BIBHU R. MOHANTY, and
NINA L. MEDLOCK, Administrative Patent Judges.
MEDLOCK, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 1, 2, 5-8, 11-20, 33, 34, and 39-44. We have
jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 Our decision references Appellant's Appeal Brief ("App. Br.," filed
October 28, 2016) and Reply Brief ("Reply Br.," filed May 30, 2017), and
the Examiner's Answer ("Ans.," mailed April 21, 2017) and Final Office
Action ("Final Act.," mailed May 11, 2016).
2 Appellant identifies the inventor, Brandt Gerard Cordelli, as the real party
in interest. App. Br. 1.
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Application 10/661,508
CLAIMED INVENTION
Appellant's claimed invention relates to "methods and systems for
determining which individual claims and/or suits submitted for a defense
under a policy of liability insurance are best suited to be referred to a higher
level of analysis, such as outside legal counsel for a coverage opinion and
analysis" (Spec. 1 ).
Claims 1 and 2 are the independent claims on appeal. Claim 2,
reproduced below with bracketed notations added, is illustrative of the
claimed subject matter:
2. A method for determining whether a claim for a
defense under a liability insurance policy should be referred to a
higher review level comprising:
[ (a)] conducting, on a computer configured with
particular data on whether each of a multiplicity of categories of
circumstances relevant to the determination regarding referral of
the claim for defense either apply or do not apply, computer-
executable instructions particular to determining, based on: how
many categories apply, programmed weightings of the categories
which apply and a programmed threshold of the sum of
weightings of the total categories or a sub-set of categories,
whether the claim for a defense under a liability insurance policy
should be referred to a higher review level,
[ (b)] displaying on the computer the results of applicable
categories and result of determination of whether a claim for a
defense under a liability insurance policy should be referred to a
higher review level.
REJECTIONS
Claims 1, 2, 5-8, 11-20, 33, 34, and 39-44 are rejected under
35 U.S.C. § 101 as directed to a judicial exception without significantly
more.
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Claims 1, 2, 5, 6, 33, 34, 39, 43, and 44 are rejected under 35 U.S.C.
§ I02(b) as anticipated by Heckman et al. (US 5,875,431, iss. Feb. 23, 1999)
("Heckman").
Claims 7, 8, and 11-20 are rejected under 35 U.S.C. § I03(a) as
unpatentable over Heckman and Lee et al. (US 2003/0074354 Al,
pub. Apr. 17, 2003) ("Lee").
Claims 40-42 are rejected under 35 U.S.C. § I03(a) as unpatentable
over Heckman, Lee, and Henrion et al. (US 7,080,071 B2, iss. July 18, 2006)
("Henrion").
ANALYSIS
Patent-Ineligible Subject Matter
Appellant argues the pending claims as a group (App. Br. 4---6). We
select independent claim 2 as representative. The remaining claims stand or
fall with claim 2. See 37 C.F.R. §4I.37(c)(l)(iv).
Under 35 U.S.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. The Supreme Court, however, has long interpreted§ 101
to include an implicit exception: "[l]aws of nature, natural phenomena, and
abstract ideas" are not patentable. Alice Corp. v. CLS Bank Int 'l, 573 U.S.
208,216 (2014).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66 (2012), "for distinguishing patents that claim
laws of nature, natural phenomena, and abstract ideas from those that claim
patent-eligible applications of those concepts." Alice Corp., 573 U.S. at 217.
The first step in that analysis is to "determine whether the claims at issue are
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directed to one of those patent-ineligible concepts." Id. If the claims are not
directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry
ends. Otherwise, the inquiry proceeds to the second step where the elements
of the claims are considered "individually and 'as an ordered combination'"
to determine whether there are additional elements that "'transform the
nature of the claim' into a patent-eligible application." Id. (quoting Mayo,
566 U.S. at 79, 78).
The Court acknowledged in Mayo, that "all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena,
or abstract ideas." Mayo, 566 U.S. at 71. Therefore, the Federal Circuit has
instructed that claims are to be considered in their entirety to determine
"whether their character as a whole is directed to excluded subject matter."
McRO, Inc. v. Bandai Namco Games Am., Inc., 837 F.3d 1299, 1312
(Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc.,
790 F.3d 1343, 1346 (Fed. Cir. 2015)).
We are not persuaded, as an initial matter, by Appellant's argument
that the § 101 rejection should be withdrawn as inconsistent with the
Board's May 21, 2015 decision in this application (App. Br. 4--5). Appellant
notes that the Board did not enter a new ground of rejection under 35 U.S.C.
§ 101 in the previous decision; and Appellant argues that "[b ]y reversing all
grounds of rejection, the Board was essentially indicating that the claims
were patentable ( on all grounds)" (id.). Appellant mistakenly interprets the
Board's decision not to exercise its discretion under 37 C.F.R. § 4I.50(b) as
an affirmative indication that the claims are patent-eligible - it is not.
37 C.F.R. § 4I.50(b) provides that "[s]hould the Board have
knowledge of any grounds not involved in the appeal for rejecting any
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pending claim, it may include in its opinion a statement to that effect ... ,
and designate such a statement as a new ground of rejection of the claim."
Id. (emphasis added). In other words, the Board has discretion to enter a
new ground of rejection. But no inference should be drawn when, as here,
the Board declines to exercise that discretion.
We also are not persuaded by Appellant's argument that the Examiner
erred in determining that the claims are directed to an abstract idea (App.
Br. 4--5). The Federal Circuit has explained that "the 'directed to' inquiry
applies a stage-one filter to claims, considered in light of the [S]pecification,
based on whether 'their character as a whole is directed to excluded subject
matter."' Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir.
2016) (quoting Internet Patents Corp., 790 F.3d at 1346). It asks whether
the focus of the claims is on a specific improvement in relevant technology
or on a process that itself qualifies as an "abstract idea" for which computers
are invoked merely as a tool. See id. at 1335-36. Here, the Specification,
including the claim language, makes clear that the claims focus on an
abstract idea, and not on any improvement to computer technology and/or
functionality.
The Specification is titled "LIABILITY INSURANCE COVERAGE
REFERRAL SYSTEMS AND METHODS," and describes that, when a
claim or suit is first submitted for a defense under a liability insurance
policy, the insurance company or third-party administrator to whom the
claim is submitted initially determines whether the claim or suit is covered
by the insurance policy (Spec. 2). In the vast majority of cases, the claim
will be either plainly covered, or plainly not covered, by the policy such that
the personnel designated to handle claims at the initial level can make the
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determination whether the claim is covered or not (id.). However, because
of the overall volume of cases these individuals are asked to handle on a
regular basis, the Specification describes that they are not able to devote the
time, attention, and level of analysis required to address the minority of
cases with "coverage issues" (id. at 3). "Responses to [this] problem have
taken different forms, from referring out [ e.g., to coverage counsel] all
claims of a certain class, to requiring senior officers of an insurance
carrier ... to approve such referrals" (id. at 4). The Specification describes
that the former approach tends to incur unnecessary expenses 3 while the
latter approach tends to create a bottleneck that delays referrals, which
should be made early, and generally results in, at a minimum, increased
defense, indemnity, and/or coverage litigation expenses (id.). The claimed
invention is ostensibly intended to address this issue by providing a
system/method whereby the initial claims handler can determine "simply
and efficiently, whether a matter should be referred out to coverage counsel
at the earliest possible stage of the process" (id.).
Considered in light of the Specification, the purported advance over
the prior art is, thus, a way of automatically determining, at the time a claim
is initially submitted, whether the claim should be referred to outside
coverage counsel. In that context, claim 2 is directed to ( 1) collecting data
3 The Specification describes that, because of the way most liability
insurance risks are structured, e.g., though reinsurance, there is a
disincentive to refer claims out for a separate opinion or handling by a
coverage attorney. Although the reinsurer agrees to reimburse the direct
insurer for defense expenses and indemnification costs in exchange for a
portion of the premium, often the reinsurer does not agree to reimburse the
direct insurance for costs associated with retaining coverage counsel. As
such, that expense is borne entirely by the direct insurer. See Spec. 3
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for a claim or suit and analyzing the data to determine, based on how many
categories apply to the data, the programmed weightings of the categories
which apply, and a programmed threshold of the sum of weightings of the
total categories or a sub-set of categories, whether the claim should be
referred to a higher review level (step (a)); and (2) displaying the results of
the collection and analysis, i.e., the results of applicable categories and the
result of the referral determination (step (b )). In other words, we agree with
the Examiner that claim 2 is directed to determining whether to make a
liability coverage referral -to a fundamental economic practice, i.e., a
method of organizing human activity and, therefore, an abstract idea (Final
Act. 3).
The Federal Circuit has consistently held that abstract ideas include
the concepts of collecting data, analyzing the data, and displaying the results
of the collection and analysis, including when limited to particular content.
See, e.g., Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d
1332, 1340 (Fed. Cir. 2017) (identifying the abstract idea of collecting,
displaying, and manipulating data); Elec. Power Grp., LLC v. Alstom S.A.,
830 F.3d 1350, 1354 (Fed. Cir. 2016) (characterizing collecting information,
analyzing information by steps people go through in their minds, or by
mathematical algorithms, and presenting the results of collecting and
analyzing information, without more, as matters within the realm of abstract
ideas); see also SAP Am., Inc. v. Investpic, LLC, 898 F.3d 1161, 1168
(Fed. Cir. 2018) ("As many cases make clear, even if a process of collecting
and analyzing information is 'limited to particular content' or a particular
'source,' that limitation does not make the collection and analysis other than
abstract." (quoting Elec. Power Grp., 830 F.3d at 1353, 1355 (citing cases)).
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Processing insurance claims also is a longstanding economic practice, and is
substantially similar to practices that the courts have found patent-ineligible.
See, e.g., Accenture Global Servs., GmbH v. Guidewire Software, Inc.,
728 F.3d 1336 (Fed. Cir. 2013) (finding ineligible claims directed to
generating rule-based tasks for processing an insurance claim); Bancorp
Servs., L.L.C. v. Sun Life Assur. Co. of Can., 687 F.3d 1266 (Fed. Cir. 2012)
( finding claims directed to the abstract idea of managing a life insurance
policy ineligible).
We find no indication in the Specification, nor does Appellant direct
us to any indication, that the operations recited in claim 2 invoke any
assertedly inventive programming or require any specialized computer
hardware or other inventive computer components, i.e., a particular machine.
In fact, the Specification suggests that the claimed invention could be
performed manually, e.g., using pen and paper, without the use of a
computer or any other machine (see, e.g., Spec. 8, 11 ( describing the
claimed invention can be implemented in paper form)). And the law is clear
that a claim whose steps can be performed in the human mind or by a human
using a pen and paper is directed to a patent-ineligible mental process, i.e., to
an abstract idea. See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d
1366, 1372-73 (Fed. Cir. 2011); see also Gottschalkv. Benson, 409 U.S. 63,
67 (1972) ("[p ]henomena of nature ... , mental processes, and abstract
intellectual concepts are not patentable, as they are the basic tools of
scientific and technological work."); see also CyberSource, 654 F.3d at 1375
("That purely mental processes can be unpatentable, even when performed
by a computer, was precisely the holding of the Supreme Court in
Gottschalk v. Benson.").
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We also find nothing of record, short of attorney argument, that
attributes any improvement in computer technology and/or functionality to
the claimed invention or that otherwise indicates that the claimed invention
integrates the abstract idea into a "practical application," as that phrase is
used in the USPTO's "2019 Revised Patent Subject Matter Eligibility
Guidance," 84 Fed. Reg. 50, 55 (January 7, 2019). 4
The Specification describes, as mentioned above, that the claimed
invention streamlines the decision whether to refer a matter to outside
coverage counsel, and advantageously avoids unnecessary outside counsel
expenses, as well as the increased defense, indemnity, and/or coverage
litigation expenses associated with delaying referrals, which should have
been made earlier. The Specification also describes that the claimed
system/method serves to collect valuable information that will be of use in
designing new and different systems for handling claims and enable insurers
to reduce or eliminate the costs and/or expenses that can reasonably be
traced to inefficient, ineffective - or even an absence of- claims handling
procedures (Spec. 12). It, thus, clearly appears from the Specification that
the focus of the claimed invention is on addressing a business objective
(i.e., enhancing the efficient processing of insurance claims), and not on any
claimed means for accomplishing that goal that improves technology.
4 In accordance with the USPTO' s revised guidance, a claim will be
considered "directed to" an abstract idea if (1) the claim recites subject
matter falling within one of the following groupings of abstract ideas: (a)
mathematical concepts; (b) certain methods of organizing human
interactions, e.g., fundamental economic principles or practices, commercial
or legal interactions; and ( c) mental processes, and (2) the claim does not
integrate the abstract idea into a practical application. See Revised
Guidance, 84 Fed. Reg. at 54--55.
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Appellant argues that the "high specificity of the claims and recitation
of numerous detailed elements ... should make [it] clear" that the claims are
directed to "more than the mere judicial exception (i.e., allegedly a mere
abstract idea) and otherwise conventional steps" (App. Br. 5; see also Reply
Br. 3). Yet, merely limiting the scope of an abstract idea ( effectively
claiming a very particular abstract idea described at a higher level of
specificity) does not make a claim any less abstract. The limitations of
claim 2, even if specific, merely elaborate on the abstract idea, i.e., they
identify the specific data on which the referral decision is based.
Turning to step two of the Mayol Alice framework, Appellant argues
that patent-eligibility is "strongly supported by the fact that the elements of
the invention other than the alleged abstract ideas taken in combination are
clearly not 'well-understood, routine, conventional' activities in the relevant
art" (App. Br. 5). Appellant does not identify the specific elements "other
than the alleged abstract idea" that, taken in combination, are allegedly not
"well-understood, routine, and conventional" in the Appeal Brief. Yet, it
clearly appears from the Reply Brief that Appellant is arguing that the
rejection cannot be sustained because the Examiner has failed to provide any
evidence that the entirety of the claimed method, as recited in claim 2,
including the steps of determining whether the claim should be referred to a
higher review level "based on: how many categories apply, programmed
weightings of the categories which apply and a programmed threshold of the
sum of weightings of the total categories or a sub-set of categories"; and
displaying the result of the determination "were conventional and
particularly conventionally used together" (Reply Br. 4--5).
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Appellant's argument is not persuasive at least because "the relevant
inquiry is not whether the claimed invention as a whole is unconventional or
non-routine." BSG Tech. LLC v. BuySeasons, Inc., 899 F.3d 1281, 1290
(Fed. Cir. 2018). Instead, the question is whether the claim includes
additional elements, i.e., elements other than the abstract idea itself, that
"'transform the nature of the claim' into a patent-eligible application."
Alice Corp., 134 S. Ct. at 2355 (quoting Mayo, 566 U.S. at 79, 78).
The Examiner determined here, and we agree, that the only additional
elements beyond the abstract idea are the recited computer and computer-
executable instructions (Final Act. 3), i.e., generic computer components
used to perform generic computer functions, e.g. storing, receiving,
processing, and displaying information. Appellant cannot reasonably
contend that there is a genuine issue of material fact ( and, therefore, a
requirement for evidence) regarding whether operation of the claimed
computer is well-understood, routine, or conventional, where, as here, there
is nothing in the Specification to indicate that the operations recited in the
clam 2 ( or any other claim, for that matter) require any specialized hardware
or inventive computer components. Indeed, the Federal Circuit, in
accordance with Alice, has "repeatedly recognized the absence of a genuine
dispute as to eligibility" where claims 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, 1373
(Fed. Cir. 2018) (Moore, J., concurring) ( citations omitted); see also BSG
Tech., 899 F.3d at 1291 ("BSG Tech does not argue that other, non-abstract
features of the claimed inventions, alone or in combination, are not well-
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understood, routine and conventional database structures and activities.
Accordingly, the district court did not err in determining that the asserted
claims lack an inventive concept.").
Appellant also misapprehends the controlling precedent to the extent
Appellant maintains that the claimed invention is patent-eligible, i.e., that
the recited elements are not "well-understood, routine, and conventional
activities," because the claims are allegedly novel and/or non-obvious in
view of the prior art (App. Br. 5---6; see also Reply Br. 3). Neither a finding
of novelty nor a non-obviousness determination automatically leads to the
conclusion that the claimed subject matter is patent-eligible. Although the
second step in the Mayo/Alice framework is termed a search for an
"inventive concept," the analysis is not an evaluation of novelty or non-
obviousness, but rather, a search for "an element or combination of elements
that is 'sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the [ineligible concept] itself."' Alice
Corp., 573 U.S. at 217-18. "Groundbreaking, innovative, or even brilliant
discovery does not by itself satisfy the§ 101 inquiry." Ass 'nfor Molecular
Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013). A novel and
non-obvious claim directed to a purely abstract idea is, nonetheless, patent-
ineligible. See Mayo, 566 U.S. at 90; see also Diamond v. Diehr, 450 U.S.
175, 188-89 (1981) ("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.").
Further responding to the Examiner's Answer, Appellant argues that
the claimed invention provides an improvement to another technology or
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technical field, i.e., the field of liability insurance (Reply Br. 3). Appellant
maintains that "the steps related to a 'claim for defense' provide an
improvement to the very specific critical determination the insurance
provider makes - up front - of whether a third-party suit against the
policyholder is clearly covered, potentially covered, or not covered at all"
(id.). But, determining whether a third party suit against a policyholder is
covered by the policy is not a technical problem, it is a business problem.
And determining, based on claim data, whether to refer a claim to a higher
level of analysis is a business, not a technical solution where, as here, there
is no indication in the Specification that the operations recited in claim 2,
require any specialized or inventive computer components, invoke any
allegedly inventive programming, or that the claimed invention, as recited in
claim 2 is implemented using other than generic computer components to
perform generic computer functions, e.g., storing, receiving, processing, and
displaying information.
We are not persuaded, on the present record, that the Examiner erred
in rejecting independent claim 2 under 35 U.S.C. § 101. Therefore, we
sustain the Examiner's rejection of claim 2, and claims 1, 5-8, 11-20, 33,
34, and 39--44, which fall with claim 2.
Anticipation
We are persuaded by Appellant's argument that the Examiner erred in
rejecting independent claims 1 and 2 under 35 U.S.C. § 102 because
Heckman does not disclose "determining ... whether a claim for a defense
under a liability insurance policy should be referred to a higher review
level," as recited in claim 1, and similarly recited in claim 2 (App. Br. 8-13).
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Heckman is directed to a legal strategic analysis planning and
evaluation control system and method, and discloses that the system includes
a computer-generated legal strategy for streamlining the legal process by
converting it from a traditional task-oriented system to a process-oriented
system (Heckman Abstract). Heckman discloses that, by so doing,
predetermined objectives and tasks are defined according to a disciplined
time schedule, cost targets are defined, and deliverables are agreed upon
prior to beginning the legal process (id.). As Appellant correctly observes,
Heckman, thus, describes methods/systems for conducting a legal action,
i.e., a lawsuit, and evaluating outcomes of legal actions to assess best
practices (App. Br. 10).
In rejecting claims 1 and 2 as anticipated by Heckman, the Examiner
cites column 7, lines 15-22; column 17, lines 23-34; column 18,
lines 27-33; and column 22, lines 12-17, as disclosing the argued limitation
(Final Act. 7-8). However, we agree with Appellant that there is nothing in
these portions of Heckman that discloses "determining ... whether the claim
for a defense under a liability insurance policy should be referred to a higher
review level," as called for in independent claims 1 and 2.
In view of the foregoing, we do not sustain the Examiner's rejection
of independent claims 1 and 2 under 35 U.S.C. § 102. For the same reasons,
we also do not sustain the Examiner's rejection of dependent claims 5, 6, 33,
34, 39, 43, and 44.
Obviousness
The rejections of dependent claims 7, 8, 11-20, and 40-42 depend on
the same erroneous finding described above with respect to Heckman.
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Therefore, we do not sustain the Examiner's rejections of claims 7, 8, 11-20,
and 40-42 under 35 U.S.C. § 103.
DECISION
The Examiner's rejection of claims 1, 2, 5-8, 11-20, 33, 34, and 39-
44 under 35 U.S.C. § 101 is affirmed.
The Examiner's rejection of claims 1, 2, 5, 6, 33, 34, 39, 43, and 44
under 35 U.S.C. § 102 is reversed.
The Examiner's rejections of claims 7, 8, 11-20, and 40-42 under
35 U.S.C. § 103(a) are reversed.
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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