Ex Parte Ellis et al

Patent Trial and Appeal Board

May 18, 2018

12250838 (P.T.A.B. May. 18, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/250,838 10/14/2008
21967 7590 05/18/2018
Hunton Andrews Kurth LLP
Intellectual Property Department
2200 Pennsylvania Avenue, N.W.
Washington, DC 20037
FIRST NAMED INVENTOR
PETER ELLIS
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.
73840.000003 4529
EXAMINER
OJIAKU, CHIKAODINAKA
ART UNIT PAPER NUMBER
3696
MAILDATE DELIVERY MODE
05/18/2018 PAPER
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.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PETER ELLIS and DANIEL LIZIO-KATZEN
Appeal2017-002877
Application 12/250,838
Technology Center 3600
Before JOHN A. JEFFERY, ST. JOHN COURTENAY III, and
JOYCE CRAIG, Administrative Patent Judges.
COURTENAY, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from a final rejection of
claims 1, 4, 7, 8, 10, 13, 15-17, and 19, which are all the claims pending in
this application. Claims 2, 3, 5, 6, 9, 11, 12, 14, and 18 are cancelled. We
have jurisdiction over the pending claims under 35 U.S.C. § 6(b ).
We affirm.
STATEMENT OF THE CASE
Introduction
Exemplary embodiments of Appellants' invention "provide a system
and method for providing web-based management solutions." Spec. i-f 29.
Exemplary embodiments may include, for example, "booking reservations,
customer/employee/inventory management, payments, marketing, etc.) for
any organization that provide time-dependent services." Id.
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Application 12/250,838
Exemplary Claim
1. A method for centrally managing profit for time
dependent services for a plurality of partner entities,
compnsmg:
charging, by a computer or other internet connected
device, a partner transaction fee for a transaction performed by
a partner, wherein the partner transaction fee is based on at least
one of a periodic, per-item, and percentage basis and wherein
the partner transaction fee is determined by the partner's
business volume;
receiving, by a computer or other internet connected
device, from a partner, payment for the partner transaction fee
when the partner performs a transaction;
paying, by a computer or other internet connected device,
in the event the partner performs a transaction through a third
party distribution entity, a base referral fee to the third party
distribution entity, the base referral fee is equal to or lesser than
the partner transaction fee and the base referral fee is based on a
product of a pre-set value and a number of reservations referred
to the third party distribution entity;
calculating, by a computer or other internet connected
device, a profit based on a difference between the partner
transaction fee and the base referral fee; and
receiving, by a computer or other internet connected
device, data that identifies an amount of the profit on the
transaction; the data that identifies an amount of the profit
received by a centralized web-based management system, the
centralized web-based management system configured as an
exclusive mechanism that centrally manages time dependent
services for the plurality of partner entities, the centralized web-
based management system coupled to a computer store, a user
interface communication module device and an application
programming interface configured to interact with the plurality
of user systems over a network, wherein the user interface
communication module receives appointment data from the
plurality of partner entities;
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the centralized web-based management system
comprising processing logic that executes: (1) employee
management to manage and coordinate employee information,
specialties, billing rates, schedules and payment for the
plurality of partner entities and (2) facilities management to
manage availability of rooms or facilities relating to the time
dependent services.
Rejections
A. Claims 1, 4, 7, 8, 10, 13, 15-17, and 19 are rejected under
35 U.S.C. § 101 as being directed to patent-ineligible subject matter.
Final Act. 16.
B. Claims 1, 4, 7, 8, and 19 are rejected under pre-AIA 35 U.S.C.
§ 103(a) as being obvious over the combined teachings and
suggestions of Johnson, (US Pat. Pub. 2009/0119176 Al, published
May 7, 2009), Crici et al., (US Pat. Pub. No. 2005/0027580 Al, Feb.
3, 2005) (hereinafter "Crici"), Zettner, (US Pat. No. 7,882,026 Bl,
issued Feb. 1, 2011), and Brush, (US Pat. Pub. No. 2004/0220816 Al,
published Nov. 4. 2004). Final Act. 17.
C. Claims 10, 13, and 15-17 are rejected under pre-AIA 35 U.S.C.
§ 103(a) as being obvious over the combined teachings and
suggestions of Johnson, Crici, and Zettner. Final Act 25.
Issues on Appeal
Did the Examiner err in rejecting claims 1, 4, 7, 8, 10, 13, 15-17, and
19 under 35 U.S.C. § 101, as being directed to patent-ineligible subject
matter?
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Did the Examiner err in rejecting claims 1, 4, 7, 8, 10, 13, 15-17, and
19 under pre-AIA 35 U.S.C. § 103(a), as being obvious over the cited
combination of references?
ANALYSIS
We have considered all of Appellants' arguments and any evidence
presented. To the extent Appellants have not advanced separate, substantive
arguments for particular claims, or other issues, such arguments are waived.
See 37 C.F.R. § 41.37(c)(l)(iv). We highlight and address specific findings
and arguments for emphasis in our analysis below.
Mayo/Alice Analysis under 35 U.S. C. § 1 OJ
Under 35 U.S.C. § 101, a patent may be obtained for "any new and
useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof." The Supreme Court has "long held that
this provision contains an important implicit exception: Laws of nature,
natural phenomena, and abstract ideas are not patentable." Alice Corp. Pty.
Ltd. v. CLS Bankint'l, 134 S. Ct. 2347, 2354 (2014) (quotingAss'nfor
Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116
(2013) ). 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, 82-84 (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, 134 S. Ct.
at 2355.
The first step in that analysis is to determine whether the claims at
issue are directed to one of those patent-ineligible concepts, such as an
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abstract idea. Abstract ideas may include, but are not limited to,
fundamental economic practices, methods of organizing human activities, an
idea of itself, and mathematical formulas or relationships. Id. at 23 55-57.
If the claims are not directed to a patent-ineligible concept, the inquiry
ends. See Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1262 (Fed.
Cir. 2017).
Otherwise, the inquiry proceeds to the second step in which the
elements of the claims are considered "individually and 'as an ordered
combination' to determine whether the additional elements 'transform the
nature of the claim' into a patent-eligible application." Alice, 134 S. Ct. at
2355 (quoting Mayo, 566 U.S. at 79, 78). We consider the question of
whether the claims are directed to a specific improvement in the capabilities
of the computing devices, or, instead, "a process that qualifies as an 'abstract
idea' for which computers are invoked merely as a tool." Enfzsh, LLC v.
Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).
We, therefore, decide under step two whether the claims: (a) set forth
an inventive concept that provides a specific means or method that improves
the relevant technology, or (b) are directed to a result or effect that itself is
the abstract idea, in which the claims merely invoke generic processes and
machinery. See Enfzsh, 822 F.3d at 1336.
The Examiner's Rejection A under 35 U.S.C. § 1 OJ
Regarding the first step of the Alice/ Mayo analysis, the Examiner
concludes claims 1, 4, 7, 8, 10, 13, 15-17, and 19 are directed to the abstract
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idea of the "payment of commission or referral fees." Final Act. 16. 1
Regarding the second step of the Mayo/Alice analysis, the Examiner
finds the claims do not include:
additional elements that are sufficient to amount to significantly
more than the judicial exception because the computer as
recited is a generic computer component that performs
functions (i.e. charging a fee, receiving payment; paying a
referral fee to a third party; calculating a profit, and receiving a
profit on the transaction.
Final Act. 16-17.
The Examiner finds:
These are generic computer functions (i.e. charging, receiving,
paying, calculating and receiving) that are well-understood,
routine, conventional activities previously known to the
industry. The claims also recite a computer to perform
charging, receiving paying, calculating and receiving which
do[ es] not add meaningful limitations to the idea of referral fee
payouts, beyond generally linking the system to a particular
technological environment, that is, implementation via
computers.
Final Act. 17 (emphasis added). 2
1 "Patent eligibility under§ 101 presents an issue of law." Accenture Glob.
Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1340 (Fed. Cir.
2013).
2 The patent eligibility inquiry may contain underlying issues of fact. Mortg.
Grader, Inc. v. First Choice Loan Servs. Inc., 811F.3d1314, 1325 (Fed.
Cir. 2016). In particular, "[t]he question of whether a claim element or
combination of elements is well-understood, routine and conventional to a
skilled artisan in the relevant field is a question of fact." Berkheimer v. HP
Inc., 881F.3d1360, 1368 (Fed. Cir. 2018).
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Therefore, the Examiner concludes "[t]he claims do not amount to
significantly more than the underlying abstract idea of commission or
referral fee payout." Final Act. 17. Accordingly, the Examiner concludes
that all claims 1, 4, 7, 8, 10, 13, 15-17, and 19 on appeal are not patent-
eligible under 35 U.S.C. § 101.
Mayol Alice Analysis - Step 1
In response, and regarding Alice Step 1, Appellants recite portions of
claim 1, and contend, inter alia, that "[t]he claimed system comprises a
device or set of devices and, therefore, is directed to a machine which is a
statutory category of invention." App. Br. 9. Appellants urge: "To the
extent step one of the analysis has been conducted, it is clear the claims are
directed to a device with computer hardware, including a computer store, a
centralized web based management system and a user interface, which
means that the claims are not directed to an abstract idea." App. Br. 11.
We note remaining independent claims 10 and 19 recite similar language of
commensurate scope. 3
Contrary to Appellants' arguments, id., our reviewing court guides
that claimed fundamental economic and conventional business practices are
often abstract ideas, even if performed on a computer. See, e.g., OIP Techs.
Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362---63 (Fed. Cir. 2015); Credit
Acceptance Corp. v. Westlake Servs., 859 F.3d 1044, 1054 (Fed. Cir. 2017)
3 We give the contested claim limitations the broadest reasonable
interpretation (BRI) consistent with the Specification. See In re Morris,
127 F.3d 1048, 1054 (Fed. Cir. 1997).
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("Each of the claims is directed to the abstract idea of processing an
application for financing a purchase.").
Thus, under a broad but reasonable interpretation, we conclude each
of Appellants' claims on appeal is directed to an economic or business
practice, i.e., to the result of "employee management" and "facilities
management." (Claim 1; see similar language of commensurate scope, as
recited in independent claims 10 and 19). (Claims App.). However, our
reviewing court guides "[t]he abstract idea exception prevents patenting a
result where 'it matters not by what process or machinery the result is
accomplished."' McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d
1299, 1312 (Fed. Cir. 2016) (quoting 0 'Reilly v. Morse, 56 U.S. 62, 113
(1854)) (emphasis added).
Moreover, but for the recitation of a generic processor or computer
(claims 1, 10, and 19), we find the recited steps or functions could be
performed as mental steps, or with the aid of pen and paper. See
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir.
2011) ("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.").
In the Reply Brief (3--4), Appellants further rebut the Examiner's
conclusion the claims are directed to an abstract idea, and cite in support to
Bascom Global Internet, Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed.
Cir. 2016). Appellants urge: "Like the claims in Bascom, the claims here
recite improvements to conventional systems and methods." Id. Appellants
advance several additional arguments based upon Bascom. Reply Br. 4.
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However, Bascom was decided on June 27, 2016, which was before
the July 11, 2016 filing date of Appellants' Appeal Brief. Thus, Bascom is
not an intervening case. Because Appellants did not raise these arguments in
the opening brief and good cause has not been shown why it should be
considered, we will not consider Appellants' untimely arguments. See
37 C.F.R. §41.41(b)(2); Exparte Borden, 93 USPQ2d 1473, 1474 (BPAI
2010) (Informative) ("[T]he reply brief [is not] an opportunity to make
arguments that could have been made in the principal brief on appeal to
rebut the Examiner's rejections, but were not."). Nevertheless, we note the
court in Bascom, 827 F.3d at 1348, guides that implementing "[a]n abstract
idea on 'an Internet computer network' or on a generic computer is still an
abstract idea."
Therefore, on this record, we are not persuaded of error regarding the
Examiner's legal conclusion that all claims on appeal are directed "to the
abstract idea of payment of commission or referral fees" which we conclude
is a fundamental economic practice. Final Act. 16.
Mayo/Alice Analysis - Step 2
Because the claims are directed to an abstract idea, we tum to the
second part of the Mayo/Alice analysis. We analyze the claims to determine
if there are additional limitations that individually, or as an ordered
combination, ensure the claims amount to "significantly more" than the
abstract idea. Alice, 134 S. Ct. at 2357.
Regarding Alice Step 2, Appellants urge:
the invention as a whole amounts to significantly more than
simply an abstract idea. The claimed invention manages profit
for time dependent services for a plurality of partner entities.
This is addressed by implementing a centralized web-based
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management system configured as an exclusive mechanism that
centrally manages time dependent services for a plurality of
partner entities, as claimed by Appellants. These are meaningful
limitations that add more than generally linking the use of the
alleged abstract idea to a computer, because they solve a
problem with a claimed solution that is necessarily rooted in
computer technology, similar to the additional elements of DDR
Holdings.
App. Br. 15.
However, we do not find Appellants' claims are analogous to the
claimed solution the court held to be patent-eligible in DDR Holdings, LLC
v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014). In DDR, the Federal
Circuit applied the Supreme Court's Alice two-step framework, and upheld
the validity of DDR's patent on its web-page display technology. DDR, 773
F.3d at 1255.
In DDR, the claims were directed to retaining a website visitor when
the visitor clicked on a third-party merchant's advertisement on the host
website. Instead of taking the visitor to the third-party merchant's website
(and thus losing the visitor to the third-party merchant), DDR's claimed
system generated a hybrid web page that: (1) displayed product information
from the third-party merchant, but also, (2) retained the host website's "look
and feel."
Here, Appellants' claims 1, 4, 7, 8, 10, 13, 15-17, and 19 are silent
regarding any specific mention of a website or webpage, much less a website
that retains the host website's "'look and feel"' while displaying product
information from the third-party merchant, as was the case in DDR, 773 F .3d
at 1257. Even though each of Appellants' independent claims 1, 10, and 19
includes a "centralized web-based management system," it is our view that
Appellants have not established that the claims on appeal are directed to
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solving "a challenge particular to the Internet," as considered by the court in
DDR. Id. at 1256-57. Thus, we find Appellants' claimed invention does not
provide a solution "necessarily rooted in computer technology in order to
overcome a problem specifically arising in the realm of computer networks."
Id. at 1257. 4
We find no language in the claims on appeal that focuses on a specific
means or method that improves the recited "computer" (claim 1 ), "system"
and/or "computer store," (i.e., memory- claim 10), or "processing logic"
(claim 19). Thus, we conclude Appellants' claimed solution is not rooted in
computer technology, such that the invention on appeal overcomes a
problem specifically arising in the realm of computers, including computer
networks, as was the case with the type of claim the court concluded was
patent-eligible in DDR Holdings. DDR, 773 F.3d at 1257.
We further conclude that independent claims 1, 10, and 19 are not
related to the type of patent-eligible database claim considered by the court
in Enfzsh. We note all claims on appeal are silent regarding any mention of
a database. Therefore, none of Appellants' claims is directed to a "self-
referential table for a computer database" of the type considered in Enfzsh,
822 F.3d at 1336. See App. Br. 18, citing Enfish.
Nevertheless, Appellants urge that "[t]he claims here, however, are
admittedly novel -- the Office Action has only applied an obviousness type
4 As emphasized by the Federal Circuit: "DDR Holdings does not apply
when ... the asserted claims do not 'attempt to solve a challenge particular
to the Internet."' Smart Sys. Innovations, LLC v. Chi. Transit Auth.,
873 F.3d 1364, 1375 (Fed. Cir. 2017) (quoting In re TL! Commc 'ns LLC
Patent Litig., 823 F.3d 607, 613 (Fed. Cir. 2016)).
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rejection. The Office has not applied any prior art that supports the position
that the concepts are long-standing or well-known." App. Br. 13. 5
We note that what is well-known would fall under a§ 103 analysis
(i.e., obvious over Official Notice by the Examiner). Furthermore, the
Supreme Court emphasizes that: "[t]he '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) (emphasis added). Our reviewing court further guides that
"[e]ligibility and novelty are separate inquiries." Two-Way Media Ltd. v.
Comcast Cable Commc 'n, LLC, 874 F.3d 1329, 1340 (Fed. Cir. 2017); see
also Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1263
(Fed. Cir. 2016) (holding that "[e]ven assuming" that a particular claimed
feature was novel does not "avoid the problem of abstractness").
Appellants' arguments do not persuade us the Examiner erred,
because Appellants essentially recite the claim limitations (App. Br. 13, 15)
without any persuasive explanation of how the limitations either
individually, or as an ordered combination, amount to an inventive concept
that converts the abstract idea (i.e., the fundamental economic practice of
"centrally managing profit for time dependent services" - preamble claim 1)
into patent-eligible subject matter.
5 The Examiner further responds in the Answer 8-9: "All of these computer
functions are 'well understood, routine, conventional activities' previously
known in the industry. Each step does no more than require a generic
computer to perform generic computer functions. Use of a computer in a
generalized fashion to boost efficiency does not meaningfully limit
otherwise abstract claims (See, e.g., Bancorp, 687 F.3d at 1279; Gottschalk,
409 U.S. at 67)."
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See also Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1355
(Fed. Cir. 2016) ("We have repeatedly held that such invocations of
computers and networks that are not even arguably inventive are
'insufficient to pass the test of an inventive concept in the application' of an
abstract idea.") (internal citations omitted); Intellectual Ventures I LLC v.
Capital One Fin. Corp., 850 F.3d 1332, 1341 (Fed. Cir. 2017) ("Rather, the
claims recite both a generic computer element-a processor-and a series of
generic computer 'components' that merely restate their individual functions
.... That is to say, they merely describe the functions of the abstract idea
itself, without particularity.)
Because none of Appellants' claims on appeal is directed to an
improvement in a processor, database, or other computer/network
component, we find none of the claim limitations, viewed "both individually
and as an ordered combination," amounts to significantly more than the
judicial exception in order to sufficiently transform the nature of the claims
into patent-eligible subject matter. See Alice, 134 S. Ct. at 2355 (internal
quotations omitted) (quoting Mayo, 566 U.S. at 79).
Applying the aforementioned guidance from our reviewing courts to
the claims before us on appeal, we conclude, in our Mayo/Alice analysis, that
each of Appellants' claims 1, 4, 7, 8, 10, 13, 15-17, and 19, considered as a
whole, is directed to (under step one), a patent-ineligible abstract idea, and
under step two, does not recite something "significantly more" to transform
the nature of the claim into a patent-eligible application.
Therefore, we conclude the additional elements recited in the claims
of a processor or a computer, and the inclusion of certain steps, acts, or
functions that may be performed without a computer as mental steps (albeit
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more slowly than a computer using pen and paper), do not provide an
inventive concept, without more. 6 Accordingly, for at least the reasons
discussed above, we sustain the Examiner's rejection under 35 U.S.C. § 101
of claims 1, 4, 7, 8, 10, 13, 15-17, and 19, as being directed to patent-
ineligible subject matter in light of Alice and its progeny. 7
Rejection B of Claims 1, 4, 7, 8, and 19 under§ 103(a)
Based upon Appellants' arguments, we decide the appeal of the
rejection B under§ 103(a) of claims 1, 4, 7, 8, and 19 on the basis of
representative independent claim 1. We address§ 103(a) rejection C of
claims 10, 13, and 15-17, infra. See n.5 infra.
Issue: Under pre-AIA 35 U.S.C. § 103(a), did the Examiner err by
finding that Johnson, Crici, Zettner, and Brush collectively teach or suggest
the limitations L 1-L6 of claim 1 contested in the Appeal Brief. We note in
the Reply Brief, at page 5, Appellants clearly denote contested limitations
L 1-L6 of claim 1 on a single page, using underline, as reproduced below for
convemence:
"charging, by a computer or other internet connected device, a
partner transaction fee for a transaction performed by a partner,
wherein the partner transaction fee is based on at least one of a
periodic, per-item, and percentage basis and wherein [Ll] the
6 See Bancorp Servs., LLC v. Sun Life Assurance Co., 687 F.3d 1266, 1279
(Fed. Cir. 2012) ("Using a computer to accelerate an ineligible mental
process does not make that process patent-eligible.").
7 To the extent Appellants have not advanced separate, substantive
arguments for particular claims, or other issues, such arguments are waived.
See 37 C.F.R. § 41.37(c)(l)(iv).
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partner transaction fee is determined by the partner's business
volume·"
~~~'
"paying, by a computer or other internet connected device, in
the event the partner performs a transaction through [L2] a third
party distribution entity, a base referral fee to the third party
distribution entity, the base referral fee is equal to or lesser than
the partner transaction fee and [L3] the base referral fee is
based on a product of a preset value and a number of
reservations referred to the third party distribution entity;"
"calculating, by a computer or other internet connected device,
a profit based on a difference between the partner transaction
fee and the base referral fee; and"
"receiving, by a computer or other internet connected device,
[L4] data that identifies an amount of the profit on the
transaction; the [L4] data that identifies an amount of the profit
received by a centralized web-based management system, the
centralized web-based management system configured as an
exclusive mechanism [LS] that centrally manages time
dependent services for the plurality of partner entities, ... "
"[L6] the centralized web-based management system
compris[es] processing logic that executes: (1) employee
management to manage and coordinate employee information,
specialties, billing rates, schedules and payment for the
plurality of partner entities and (2) facilities management to
manage availability of rooms or facilities relating to the time
dependent services."
(Lettering and brackets added regarding contested limitation L 1-L6).
Based upon our review of the record, we disagree with Appellants'
arguments, and agree with and adopt the Examiner's underlying factual
findings and ultimate legal conclusion of obviousness for representative
independent claim 1. We further agree with and adopt the reasons,
rationales, and explanations articulated by the Examiner: (i) in the Final
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Action (17-21) from which this appeal is taken, and, (ii) as set forth in the
Examiner's responsive explanations in the Answer (17-24). 8
Regarding contested limitation L 1 ("the partner transaction fee is
determined by the partner's business volume"), the Examiner (Answer 17-
24), provides detailed explanations supporting the Examiner's legal
conclusion of obviousness, including setting forth a claim construction for
the contested claim 1 term "volume" in light of the supporting description in
Appellants' Specification (i-f 93). The Examiner notes: "Absent is any
definition of volume and therefore taking the broadest reasonable
interpretation business volume is the total sales or purchase amount." Ans.
18 (emphasis added).
Regarding the claimed business volume, the Examiner relies, inter
alia, on Johnson (i-f 23), and finds:
The transacting parties can go beyond established
practices and negotiate different arrangements (Johnson, paras.
0023). Moreover, a collaborative arrangement of this nature
benefits both the issuer and the merchant because the shared
common goal of increasing usage of the card at this particular
merchant boosts customer traffic and as a consequence
increased sales volume for the merchant and the attendant fees
derived from such sales for the issuer.
Ans. 20, emphasis added.
Regarding contested limitation L6, the Examiner broadly but
reasonably construes the claim language, and concludes: "[A ]bsent, is any
indication as to the impact of the specifics of the time management system
8 To the extent Appellants advance new arguments in the Reply Brief
without showing good cause, Appellants have waived such arguments. See
37 C.F.R. § 41.41(b)(2).
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on the claimed invention and therefore [(limitation L6)] is considered non-
functional descriptive matter and is not given patentable weight."9
(emphasis added). Ans. 22.
Because Appellants fail to substantively traverse the Examiner's
aforementioned claim constructions in the Reply Brief ( 5---6), on this record,
we are not persuaded the Examiner's broader reading of limitations LI and
L6 on the cited portions of the references is overly broad, unreasonable, or
inconsistent with Appellants' Specification. 10
Regarding the contested claim 1 limitation L2 ("a third party
distribution entity, a base referral fee to the third party distribution entity"),
the Examiner relies on Johnson (in combination with the other cited
references) for teaching or suggesting this limitation: "(Johnson, Fig. 2
element s4; paras. 0019-0023; see also para. 0013; see also para. 0005, Fig.
1elements,150, 160)." Final Act. 18 (emphasis omitted).
9 See Claim 1, limitation L6: "the centralized web-based management
system compris[ es] processing logic that executes: (1) employee
management to manage and coordinate employee information, specialties,
billing rates, schedules and payment for the plurality of partner entities and
(2) facilities management to manage availability of rooms or facilities
relating to the time dependent services."
10 The :rvianua1 of Patent Examining Procedure (l\1PEP) provides further
guidance: "where the claim as a whole is directed to conveying a message
or meaning to a human reader independent of the intended computer system,
and/or the computer-readable medium merely serves as a support for
information or data, no functional relationship exists." MPEP § 2111.05
(III.) (9th Ed., Rev. 08.2017, Last Revised Jan. 2018). See also Ex parte
Nehls, 88 USPQ2d 1883, 1889 (BPAI 2008) (precedential) ("[T]he nature of
the information being manipulated does not lend patentability to an
otherwise unpatentable computer-implemented product or process.")
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Appellants also contest related limitation L3 of claim 1 ("the base
referral fee is based on a product of a pre-set value and a number of
reservations referred to the third party distribution entity"). Appellants
contend, inter alia:
[N]either Johnson nor Crici discloses "a third party distribution
entity" and "a base referral fee to the third party distribution
entity, the base referral fee is equal to or lesser than the partner
transaction fee and the base referral fee is based on a product of
a pre-set value and a number of reservations referred to the
third party distribution entity." Johnson discloses - at most - two
fees (e.g., a "special program fee" and an "interchange fee").
App. Br. 21.
Regarding both limitations L2 and L3, Appellants fail to further
substantively address the Examiner's specific findings (Final Act. 18; Ans.
23, citing Brush i-f 26, e.g. "at settlement, the referral fee is paid to the
middleman;" Brush p. 6, claims 8 and 9) in the Reply Brief. Therefore, on
this record, we find a preponderance of the evidence support the Examiner's
findings that the contested limitations are at least suggested by the
Examiner's proffered combination of references. 11
Moreover, we are of the view that the claimed "base referral fee
[being] based on a product of a pre-set value and a number of reservations
referred to the third party distribution entity" (claim 1 ), would have merely
produced a predictable result. See KSR Int'! Co. v. Teleflex Inc., 550 U.S.
11 Our reviewing court guides: "'the question under 35 USC 103 is not
merely what the references expressly teach but what they would have
suggested to one of ordinary skill in the art at the time the invention was
made."' Merck & Co. v. Biocraft Labs., Inc., 874 F.2d 804, 807 (Fed. Cir.
1989) (quoting In re Lamberti, 545 F.2d 747, 750 (CCPA 1976)) (emphasis
added); see also MPEP § 2123.
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398, 401 (2007) ("[A] combination of familiar elements according to known
methods is likely to be obvious when it does no more than yield predictable
results.").
Regarding the contested limitation L4 of claim 1 ("data that identifies
an amount of the profit"), the Examiner finds this limitation is taught or
suggested by Johnson: "(Johnson, para. 0019 - credits difference between
base and 18 months same as cash program which offers higher interchange
fee; see also para. 0022 - card payment association handles the adjustments
related to the different merchant transaction arrangements)." Final Act. 19.
Appellants fail to directly address the Examiner's specific findings in
the Appeal Brief 22. Nor do Appellants further substantively traverse this
limitation, or any of limitations Ll-L6 in the Reply Brief. We note that "[a]
statement which merely points out what a claim recites will not be
considered an argument for separate patentability of the claim." 3 7 C.F .R.
§ 41.37(c)(l)(iv). See also Reply Br. 5 (which merely recites the claim
language and asserts it is not taught by the cited references).
Regarding contested limitation L5 of claim 1 ("the centralized web-
based management system configured as an exclusive mechanism [L5] that
centrally manages time dependent services for the plurality of partner
entities"), we find Appellants have not provided a definition for "the
centralized web-based management system" that would preclude the
Examiner's broader reading (Final Act. 19), on Crici's paragraph 31:
The system to which the service provider's schedule
is input can be located at the service provider's place of
business or at some other central location which will therefore
coordinate the business and/or personal schedules of a
plurality of service providers from related or unrelated
businesses and similar or different types of service providers.
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See also Crici's paragraph 34, in pertinent part, as also cited by the
Examiner, Final Act. 19: "Other aspects of the present invention comprise
methods of providing a plurality of service receivers with remote
appointment scheduling capabilities for at least one common service
provider, preferably a plurality of service providers, over the Internet."
We emphasize that our reviewing court guides that "[ t ]he test for
obviousness is what the combined teachings of the references would have
suggested to one of ordinary skill in the art." In re Young, 927 F.2d 588,
591 (Fed. Cir. 1991) (citing In re Keller, 642 F.2d 413, 425 (CCPA 1981))
(emphasis added).
This reasoning is applicable here. Therefore, on this record, we find
the Examiner's findings (Final Act. 17-21) regarding contested limitations
L 1-L6 are supported by a preponderance of the evidence, based upon the
combined teachings and suggestions of the cited references. Accordingly,
we find Appellants' arguments unavailing regarding the contested
limitations Ll-L6 of representative claim 1. See App. Br. 19-25.
Comb inability of the References under § 103
Appellants advance a second purported reason for reversal, and
contend the Examiner's proffered combination of references is "based on
improper hindsight reasoning and completely ignores the actual teachings of
the references." App. Br. 26. Appellants assert, inter alia: "The Office
Action fails to explain why Johnson, as a whole, would suggest use of Crici,
Zettner and Brush's systems, and if so, how that would work." Id.
We disagree, and find the Examiner (Final Act. 19-21) sets forth
sufficient "articulated reasoning with some rational underpinning to support
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the legal conclusion of obviousness." In re Kahn, 441F.3d977, 988 (Fed.
Cir. 2006). We note the presence or absence of a reason "to combine
references in an obviousness determination is a pure question of fact." In re
Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000) (citing In re Dembiczak,
175 F.3d 994, 1000 (Fed. Cir. 1999)). Furthermore, a reason to combine
teachings from the prior art "may be found in explicit or implicit teachings
within the references themselves, from the ordinary knowledge of those
skilled in the art, or from the nature of the problem to be solved." WMS
Gaming Inc. v. Int'! Game Tech., 184 F.3d 1339, 1355 (Fed. Cir. 1999)
(citing In re Rouffet, 149 F.3d 1350, 1355 (Fed. Cir. 1998)).
Here, the Examiner finds an artisan would have been motivated:
to modify Johnson with the scheduling mechanism of Crici
because it would be using well known methods of logistics
planning to more efficiently track appointments by offering a
visual display. This provides the user with immediate and
accessible viewing of the appointment schedule thereby
minimizing the potential for inadvertent scheduling of
conflicting appointments.
Final Act. 19-20.
The Examiner finds an artisan would have been further motivated:
to modify Johnson and Crici with Zettner such that the partner
participation in offering this payment option is encouraged
rather than discouraged because of the penalties associated with
"card not present transactions" which are potentially more
expensive and riskier for the partner/merchant.
Final Act. 20.
The Examiner finds an artisan would have been additionally
motivated:
to modify Johnson, Crici and Zettner with Brush because it is
in the same field of endeavor or referral fee or commission
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payouts thereby providing an improvement in cost recoupment
through participation in the referral scheme.
Final Act. 21.
The Examiner finds an artisan would have also been motivated to
combine:
Id.
the system as taught by Johnson, Crici and Zettner with
Brush to realize the claimed invention, since the claimed
invention is merely a combination of old elements, and in the
combination each element merely would have performed the
same function as it did separately, and one of ordinary skill in
the art would have recognized that the results of the
combination were predictable.
In further support of the proffered combination, the Examiner (id.)
cites to KSR, 550 U.S. at 401 ("[A] combination of familiar elements
according to known methods is likely to be obvious when it does no more
than yield predictable results."), and MPEP i-f 2141(III)(A)("Combining prior
art elements according to known methods to yield predictable results.").
We find Appellants' allegation of impermissible hindsight is
unsupported by evidence in the record. App. Br. 25. Although we are fully
aware that hindsight bias often plagues determinations of obviousness,
Graham v. John Deere Co., 383 U.S. 1, 36 (1966), we are also mindful the
Supreme Court has clearly stated the "combination of familiar elements
according to known methods is likely to be obvious when it does no more
than yield predictable results." KSR, 550 U.S. at 416. Moreover, "[i]n
determining whether the subject matter of a patent claim is obvious, neither
the particular motivation nor the avowed purpose of the patentee controls."
(Id. at 419.)
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This guidance is applicable here. Instead of relying on Appellants'
Specification and claims to use as a guide, we find the Examiner provides
sufficient articulated reasoning with some rational underpinning to establish
why an artisan would have been motivated to combine the cited secondary
references with the primary Johnson reference. Final Act. 19-21.
Moreover, Appellants do not provide evidence sufficient to
demonstrate that combining the teachings of Johnson, Crici, Zettner, and
Brush, as proffered by the Examiner (id.), would have been "uniquely
challenging or difficult for one of ordinary skill in the art," (Leapfrog
Enters., Inc. v. Fisher-Price, Inc., 485 F.3d 1157, 1162 (Fed. Cir. 2007)),
nor have Appellants provided any objective evidence of secondary
considerations, which our reviewing court guides "operates as a beneficial
check on hindsight." Cheese Sys., Inc. v. Tetra Pak Cheese and Powder
Sys., Inc., 725 F.3d 1341, 1352 (Fed. Cir. 2013)
Appellants additionally contend the references relied upon by the
Examiner are non-analogous art. App. Br. 27. In particular, Appellants
urge:
One having ordinary skill in the art would not look to non-
analogous teachings of appointment scheduling to address
the deficiencies of an interchange adjustment system described
by Johnson and the flat interchange fee of Zettner. One skilled
in the art would not have been motivated to combine the
references as suggested by the Office Action. Even if these
disparate references could be combined as suggested by the
Office Action, the resulting combination is nevertheless
severely deficient for at least the reasons stated above.
App. Br. 28.
As correctly stated by Appellants: "[a]lthough 'familiar items may
have obvious uses beyond their primary purposes,' KSR Int 'l Co. v. Teleflex,
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Inc., 550 U.S. 398, 420 (2007), a reference is only reasonably pertinent
when it 'logically would have commended itself to an inventor's attention in
considering his problem.' In re Clay, 966 F.2d 656, 659 (Fed. Cir. 1992)."
App. Br. 28.
Applying this guidance here, we find the references cited by the
Examiner are reasonably pertinent to the particular problem with which the
inventor is involved for the reasons stated in the Examiner's proffered
motivation findings, as reproduced and discussed above. Final Act. 19-21.
See also Kahn, 441 F.3d at 987, citing In re Oetiker, 977 F.2d 1443, 1447
(Fed. Cir. 1992).
Therefore, based upon a preponderance of the evidence, we sustain
the Examiner's§ 103(a) rejection B of representative independent claim 1,
and of the additional claims 4, 7, 8, and 19, also rejected under rejection B,
which are not argued separately. See 37 C.F.R. § 41.37(c)(l)(iv).
Rejection C of Remaining Claims 10, 13, and 15-17 under§ 103(a)
Because Appellants have not advanced separate, substantive
arguments for the remaining rejected claims 10, 13, and 15-17 on appeal,
such arguments are waived. See 37 C.F.R. § 41.37(c)(l)(iv). See, e.g.,
"Independent claim 10 recites similar limitations to that of independent
claim 1. Therefore, independent claim 10 is allowable for similar reasons
discussed above with respect to independent claim 1." App. Br. 28.
Therefore, we sustain the Examiner's§ 103 rejection C of claims 10, 13, and
15-17 for the same reasons discussed above regarding rejection B of
independent claim 1.
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CONCLUSIONS
The Examiner did not err in rejecting claims 1, 4, 7, 8, 10, 13, 15-17,
and 19 under 35 U.S.C. § 101, as being directed to patent-ineligible subject
matter.
The Examiner did not err in rejecting claims 1, 4, 7, 8, 10, 13, 15-17,
and 19, under pre-AIA 35 U.S.C. § 103(a), as being obvious over the
combined teachings and suggestions of the cited references.
DECISION
We affirm the Examiner's decision rejecting claims 1, 4, 7, 8, 10, 13,
15-17, and 19, under 35 U.S.C. § 101.
We affirm the Examiner's decision rejecting claims 1, 4, 7, 8, 10, 13,
15-17, and 19, under pre-AIA 35 U.S.C. § 103(a).
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). See
37 C.F.R. § 41.50(±).
AFFIRMED
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