Ex Parte HAMOR

Patent Trial and Appeal Board

Aug 3, 2018

13958961 (P.T.A.B. Aug. 3, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/958,961 08/05/2013
41461 7590 08/07/2018
Charles A. Rattner
17379 BLUEBERRY DRIVE
BROOKINGS, OR 97415-9717
FIRST NAMED INVENTOR
ALAN B. HAMOR
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.
Jl21 U002US03 7983
EXAMINER
KHATTAR, RAJESH
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
08/07/2018 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):
charles.rattner@gmail.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ALAN B. HAMOR1
Appeal2017-000688
Application 13/958,961
Technology Center 3600
Before ANTON W. PETTING, NINA L. MEDLOCK, and
AMEE A. SHAH, Administrative Patent Judges.
PETTING, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE2
Alan B. Hamor (Appellant) seeks review under 35 U.S.C. § 134 of a
final rejection of claims 1-20, the only claims pending in the application on
appeal. We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b).
1 The real party in interest is WK NETWORKS, INC. App. Br. 1.
2 Our decision will make reference to the Appellant's Appeal Brief ("App.
Br.," filed April 11, 2016) and Reply Brief ("Reply Br.," filed October 11,
Appeal2017-000688
Application 13/958,961
The Appellant invented bidding systems accessible by various user
devices over networks. Specification para. 2.
An understanding of the invention can be derived from a reading of
exemplary claim 1, which is reproduced below (bracketed matter and some
paragraphing added).
1. A bidding system, comprising:
at least one network-enabled computer having a processor, a
memory for storing programming and processing instructions, a
system interface for receiving data and programming from an
operator and a network interface for communicating bi-
directionally with user devices over a data communication
network;
[ 1] the memory storing an identification of an item
for sale from a supplier to buyers in a designated
geographic region,
the supplier providing a total quantity of the item;
[2] the memory further storing a floor price for the item
determined by the supplier;
[3] the network interface for transmitting the identification of
the item for bidding to user devices of a plurality of bidders
within the geographic region over the data communication
network,
where the floor price of the item is suppressed from the
plurality of bidders
and
2016), and the Examiner's Answer ("Ans.," mailed August 10, 2016), and
Final Action ("Final Act.," mailed November 10, 2015).
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each of the plurality of bidders is authorized to submit a
predetermined number of bids on the item;
[ 4] the processor receives, via the network interface, a first bid
from a first bidder for a first quantity of the item less than the
total quantity,
and
the first bid within the predetermined number of bids and
including a first bid price determined by the first bidder;
[5] when
the first bid price is at least equal to the floor price,
and
independent of other bids by other bidders,
transmitting an acceptance of the first bid to the first
bidder substantially immediately in response to the first
bid·
'
[ 6] after said acceptance, the processor receives, from a second
bidder in the geographic region via the network interface, a
second bid on a second quantity of the item less than the total
quantity in the auction at a second bid price,
the second bid price at least equal to the floor price and
lower than the first bid price, and;
[7] the processor accepts the second bid from the second bidder;
[8] after which the processor completes the sale of the first
quantity of the item with the first bidder at the second bid price
in place of the first bid price,
based on the processor accepting the second bid,
wherein bidding continues when there is a remaining
quantity of the item and at least one bidder remains in the
geographic region.
Claims 1-20 stand rejected under 35 U.S.C. § 101 as directed to non-
statutory subject matter.
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ISSUES
The issues of eligible subject matter tum primarily on whether the claims
recite more than abstract conceptual advice of what a computer is to provide
without implementation details.
ANALYSIS
System claim 1 recites storing and transmitting an item identifier,
receiving a bid, comparing the bid to a floor price and transmitting an
acceptance when the bid is at least as high as the floor, receiving a second
bid, comparing that bid price to the floor and the first bid price, accepting
the second bid, and completing a sale based on the bids. Thus, claim 1
recites receiving, storing, and analyzing data and completing sales based on
the data. None of the limitations recites implementation details for any of
these steps, but instead recite functional results to be achieved by any and all
possible means. Data reception, analysis and modification, and sales
processing are all generic, conventional data processing operations to the
point they are themselves concepts awaiting implementation details. The
sequence of data reception-analysis-sale is equally generic and conventional.
The ordering of the steps is, therefore, ordinary and conventional. The
remaining claims merely describe parameters and selection criteria for the
bid process, with no implementation details.
The Supreme Court
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, []
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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] 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 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 Services v. Prometheus Laboratories, Inc., 566 U.S. 66
(2012)).
To perform this test, we must first determine whether the claims at issue
are directed to a patent-ineligible concept. The Examiner finds the claims
directed to a bidding system for accepting bids from a plurality of bidders on
an item. Final Act. 2.
Although the Court in Alice made a determination 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 preamble to claim 1 does not recite what it is directed to, but the
operations in claim 1 result in selling items based on bids. The Specification
at paragraph 2 recites that the invention relates to bidding systems accessible
by various user devices over networks. Thus, all this evidence shows that
claim 1 is directed to sales based on bids, i.e., auctions. This is consistent
with the Examiner's finding.
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It follows from prior Supreme Court cases, and Bilski (Bilski v. Kappas,
561 U.S. 593 (2010)) in particular, that the claims at issue here are directed
to an abstract idea. Like the risk hedging in Bilski, the concept of auctions is
a fundamental economic practice long prevalent in our system of commerce.
The use of auctions is also a building block of ingenuity in market
economies. Thus, auctions, like hedging, is an "abstract idea" beyond the
scope of§ 101. See Alice Corp., 134 S. Ct. at 2356.
As in Alice, 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
risk hedging in Bilski and the concept of auctions at issue here. Both are
squarely within the realm of "abstract ideas" as the Court has used that term.
See Alice Corp., 134 S. Ct. at 2357.
Further, claims involving data collection, analysis, and display are
directed to an abstract idea. Elec. Power Grp. v. Alstom S.A., 830 F.3d 1350,
1353 (Fed. Cir. 2016) (holding that "collecting information, analyzing it, and
displaying certain results of the collection and analysis" are "a familiar class
of claims 'directed to' a patent-ineligible concept"); see also In re TL!
Commc 'ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016);
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093-94 (Fed. Cir.
2016). Claim 1, unlike the claims found non-abstract in prior cases, uses
generic computer technology to perform data retrieval, analysis, and sales
processing and does not recite an improvement to a particular computer
technology. See, e.g., McRO, Inc. v. Bandai Namco Games Am. Inc.,
837 F.3d 1299, 1314--15 (Fed. Cir. 2016) (finding claims not abstract
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because they "focused on a specific asserted improvement in computer
animation"). As such, claim 1 is directed to the abstract idea of receiving,
analyzing, and transmitting data and sales processing.
The remaining claims merely describe parameters and selection criteria
for the bid process. We conclude that the claims at issue are directed to a
patent-ineligible abstract idea.
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 "implement[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., 134 S. Ct. at 2358 (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., 134 S. Ct. at 2359. They do not.
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Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to receive, store, and analyze data amounts to electronic data query
and retrieval----one of the most basic functions of a computer. Sales
processing using a computer is equally basic. All of these computer
functions are well-understood, routine, conventional activities previously
known to the industry. See Elec. Power Grp. v. Alstom S.A., supra. Also see
In re Katz Interactive Call Processing Patent Litigation, 639 F.3d 1303,
1316 (Fed. Cir. 2011) ("' Absent a possible narrower construction of the
terms 'processing,' 'receiving,' and 'storing,' ... those functions can be
achieved by any general purpose computer without special programming"').
In short, each step does no more than require a generic computer to perform
generic computer functions. As to the data operated upon, "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." SAP America, Inc. v. Investpic, LLC, 890 F.3d 1016,
1022 (Fed. Cir. 2018).
Considered as an ordered combination, the computer components of
Appellant's method add nothing that is not already present when the steps
are considered separately. The sequence of data reception-analysis-sale 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), Inventor Holdings,
LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017)
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(sequence of data retrieval, analysis, modification, generation, display, and
transmission), Two-Way Media Ltd. v. Comcast Cable Commc 'ns, LLC, 874
F.3d 1329, 1339 (Fed. Cir. 2017) (sequence of processing, routing,
controlling, and monitoring). The ordering of the steps is therefore ordinary
and conventional.
Viewed as a whole, Appellant's claims simply recite the concept of
auctions as performed by a generic computer. To be sure, the claims recite
doing so by advising one to accept bids, rank them and compare them to
some floor, and accept the bids in some sequence. But this is no more than
abstract conceptual advice on the parameters for such auctions and the
generic computer processes necessary to process those parameters, and does
not recite any particular implementation.
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. The Specification spells out different generic equipment3
and parameters that might be applied using this concept and the particular
steps such conventional processing would entail based on the concept of
auctions under different scenarios. They do not describe any particular
improvement in the manner a computer functions. Instead, the claims at
issue amount to nothing significantly more than an instruction to apply the
abstract idea of auctions using some unspecified, generic computer. Under
3 Specification paragraphs 23 and 27 describe using programmable cellular
phone, telephone, fax machine, computer, television, personal digital
assistant.
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our precedents, that is not enough to transform an abstract idea into a patent-
eligible invention. See Alice Corp., 134 S. Ct. at 2360.
Appellant concedes that the claims fail the first part of the Alice test for
being directed to the abstract concept of an auction. App. Br. 8-9.
Appellant contends the claims pass the Alice step 2 test. Id.
We are not persuaded by Appellant's argument that "the Examiner's
assertion that all elements are generic and convention[al] is clearly and
demonstrably in error." App. Br. 16. Appellant contends
There have been no prior bidding systems in which the final
highlighted step above has been performed. The act of
substituting a separate, unrelated bidder's lower bid price prior
to completion of a sale to the first bidder is an unconventional
processing step that must be specially programmed. Likewise,
the step of accepting a bid merely because it is above the floor
price is not conventional in prior art electronic bidding systems
App. Br. 17. This is a contention as to novelty. "[A] claim for a new
abstract idea is still an abstract idea. The search for a § 101 inventive
concept is thus distinct from demonstrating § 102 novelty." Synopsys, Inc.
v. Mentor Graphics Corporation, 839 F.3d 1138, 1151 (Fed. Cir. 2016).
Appellant goes on to contend that "these steps do not in any way
represent a 'fundamental economic practice long prevalent in our system of
commerce' as required under the Alice test." App. Br. 17. This conflates
the two tests. A determination that what a claim is directed to is or is not a
fundamental practice is part of the Alice step 1 test, which Appellant does
not contest. Appellant goes on to argue that "[a]s a result, the above series
of recited processing steps, as an ordered combination, is something
'significantly more' than was in practice in the prior art." Id. This is a non-
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sequitur. Mere novelty of operations performed does not imply that the
ordering of the operations is significantly more than an abstraction. Further,
as we determined supra, the sequence of receiving, storing, analyzing data
and processing a sale was old and commonplace at the time of filing.
Appellant further argues that the asserted claims are akin to the
claims found patent-eligible in DDR Holdings, LLC v. Hotels.com, L.P.,
773 F.3d 1245 (Fed. Cir. 2014). App. Br. 17-18. In DDR Holdings, the
court evaluated the eligibility of claims "address[ing] the problem of
retaining website visitors that, if adhering to the routine, conventional
functioning of Internet hyperlink protocol, would be instantly
transported away from a host's website after 'clicking' on an
advertisement and activating a hyperlink." Id. at 1257. There, the court
found that the claims were patent-eligible because they transformed the
manner in which a hyperlink typically functions to resolve a problem
that had no "pre-Internet analog." Id. at 1258. The court cautioned,
however, "that not all claims purporting to address Internet-centric
challenges are eligible for patent." Id. For example, in DDR Holdings
the court distinguished the patent-eligible claims at issue from claims
found patent-ineligible in Ultramercial. See id. at 1258-59 (citing
Ultramercial, 772 F.3d at 715-16). As noted there, the Ultramercial
claims were "directed to a specific method of advertising and content
distribution that was previously unknown and never employed on the
Internet before." Id. at 1258 (quoting Ultramercial, 772 F.3d at 714).
Nevertheless, those claims were patent-ineligible because they "merely
recite[d] the abstract idea of 'offering media content in exchange for
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viewing an advertisement,' along with 'routine additional steps such as
updating an activity log, requiring a request from the consumer to view the
ad, restrictions on public access, and use of the Internet."' Id. ( quoting
Ultramercial, 772 F.3d at 715-716).
Appellant's asserted claims are analogous to claims found ineligible in
Ultramercial and distinct from claims found eligible in DDR Holdings.
The ineligible claims in Ultramercial recited "providing [a] media product
for sale at an Internet website"; "restricting general public access to said
media product"; "receiving from the consumer a request to view [a]
sponsor message"; and "if the sponsor message is an interactive message,
presenting at least one query to the consumer and allowing said consumer
access to said media product after receiving a response to said at least one
query." 772 F.3d at 712. Similarly, Appellant's asserted claims recite
reading, receiving, and analyzing data and then processing a sale. This is
precisely the type of Internet activity found ineligible in Ultramercial.
We are not persuaded by Appellant's argument that the claims do not
preempt all uses of the idea. App. Br. 18-19.
The Supreme Court has made clear that the principle of
preemption is the basis for the judicial exceptions to
patentability. Alice, 134 S. Ct at 2354 ("We have described the
concern that drives this exclusionary principal as one of pre-
emption"). For this reason, questions on preemption are
inherent in and resolved by the § 101 analysis. The
concern is that "patent law not inhibit further discovery by
improperly tying up the future use of these building blocks of
human ingenuity." Id. (internal quotations omitted). In other
words, patent claims should not prevent the use of the basic
building blocks of technology-abstract ideas, naturally
occurring phenomena, and natural laws. While preemption
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may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility.
In this case, Sequenom's attempt to limit the breadth of the
claims by showing alternative uses of cfIDNA outside of the
scope of the claims does not change the conclusion that the
claims are directed to patent ineligible subject matter. Where
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).
We are not persuaded by Appellant's argument that the Examiner
provided no evidence that the Applicant's improved electronic bidding
system is, as a whole, conventional or previously well-known. App. Br. 19.
The analysis supra cites Federal Circuit decisions in which the steps
performed and their sequence are conventional or otherwise abstract. Again,
viewed as a whole, Appellant's claims simply recite the concept of auctions
as performed by a generic computer. The notoriety of auctions over
centuries is sufficient that we take notice of it.
We are not persuaded by Appellant's argument that
[t]he applicant's claimed inventions, by which communications
over a data network are coordinated between separating
communicating hardware components, simultaneously
approving bids while evaluating others, and at the same time
continuing to conduct an electronic auction with other bidders
can not be reasonably performed by a human with mental steps
or pen and paper, and therefore do not represent a mere
improvement in speed over what a human can perform.
App. Br. 19--20. Appellant goes on to argue the claims pass the machine or
transformation test as they use machines and transform data. Id. The
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problem for Appellant is that the machines are generic computers and simply
using computers for speed and accuracy is insufficient. Similarly
transformation of an abstraction such as data is itself an abstraction.
Because the claims are directed to an abstract idea, the
claims must include an "inventive concept" in order to be
patent-eligible. No such inventive concept is present here.
Instead, the claims "add" only generic computer components
such as an "interface," "network," and "database." These
generic computer components do not satisfy the inventive
concept requirement.
Mortgage Grader, Inc. v. First Choice Loan Services Inc., 811 F .3d 1314,
1324--1325 (Fed. Cir. 2016) (internal citations and quotation marks omitted).
The use and arrangement of conventional and generic computer
components recited in the claims-such as a database, user
terminal, and server- do not transform the claim, as a whole,
into "significantly more" than a claim to the abstract idea itself.
"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."
Credit Acceptance Corp. v. Westlake Services, 859 F.3d 1044, 1056
(Fed. Cir. 2017) ( citations omitted).
CONCLUSIONS OF LAW
The rejection of claims 1-20 under 35 U.S.C. § 101 as directed to non-
statutory subject matter is proper.
DECISION
The rejection of claims 1-20 is affirmed.
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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) (2011).
AFFIRMED
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