Ex Parte Howard et al

Patent Trial and Appeal Board

Sep 18, 2018

13115613 (P.T.A.B. Sep. 18, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/115,613 05/25/2011
28289 7590 09/20/2018
THE WEBB LAW FIRM, P.C.
ONE GATEWAY CENTER
420 FT. DUQUESNE BL VD, SUITE 1200
PITTSBURGH, PA 15222
UNITED ST A TES OF AMERICA
FIRST NAMED INVENTOR
Kevin L. Howard
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.
6315-110076 3801
EXAMINER
SHARVIN, DAVID P
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
09/20/2018 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):
patents@webblaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte KEVIN L. HOW ARD, PAUL D. SCHNEIDER,
and SCOTT W. EDBLOM 1
Appeal2017-004455
Application 13/115,613
Technology Center 3600
Before BRADLEY W. BAUMEISTER, STACEY G. WHITE, and
DAVID J. CUTITTA II, Administrative Patent Judges.
BAUMEISTER, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 1-3, 5-9, 11-18, 20, 21, 23, and 25, which stand rejected
under 35 U.S.C. § 101 as being directed to patent-ineligible subject matter.
App. Br. 1. Final Act. 3-5. 2 We have jurisdiction under 35 U.S.C. § 6(b ).
We affirm.
1 Appellants identify WESTERN & SOUTHERN FINANCIAL GROUP and
MID ATLANTIC CAPITAL GROUP as the real party in interest. Appeal
Brief 3, filed September 29, 2016 ("App. Br.").
2 Rather than repeat the Examiner's positions and Appellants' arguments in
their entirety, we refer to the above-mentioned Appeal Brief, as well as the
following documents for their respective details: the Final Action mailed
April 29, 2016 ("Final Act."); the Examiner's Answer mailed November 17,
2016 ("Ans."); and the Reply Brief filed January 17, 2017 ("Reply Br.").
Appeal2017-004455
Application 13/115,613
THE INVENTION
Appellants describe the present invention as follows:
A computer-implemented method for providing and
managing a variable annuity product capable of investing in
exchange-traded funds, including: rece1vmg, on a server
computer, a request to allocate an amount of annuity assets
comprising tax-deferred or tax-advantaged assets into at least one
subaccount corresponding to a specified exchange-traded fund;
allocating the amount of annuity funds into at least one
subaccount; and initiating the purchase of at least one share of an
exchange-traded fund relating to at least a portion of at least one
unit of the at least one subaccount. A system and a computer
program product for implementing the aforementioned method
includes appropriately communicatively connected hardware
components. Also disclosed is a computer-implemented method
for reducing risk in a variable annuity product as well as a system
and a computer program product for implementing the method
which includes appropriately communicatively connected
hardware components.
Abstract.
Independent claim 1, reproduced below, illustrates the claimed
invention:
1. A computer-implemented method for managing variable
annuity funds through a graphical user interface, comprising:
assigning each of a plurality of exchange-traded funds to
a corresponding subaccount, wherein each subaccount
corresponds to a different exchange-traded fund, and wherein
each subaccount represents a pooled account of assets from a
plurality of annuity accounts;
providing at least one graphical user interface
programmed to facilitate an allocation of assets to at least one
sub account;
creating, on a server computer, a variable annuity account
for an individual issued as an Individual Retirement Account
(IRA);
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Application 13/115,613
rece1vmg, on a server computer from the at least one
graphical user interface, a request from the individual to transfer,
as at least one rollover, assets from the individual's qualified
retirement plan into the variable annuity account;
transferring, with at least one computer processor, the
assets into the variable annuity account;
receiving, on a server computer from the at least one
graphical user interface, a request from the individual to allocate
an amount of assets within the variable annuity account into at
least one subaccount, wherein the request further comprises an
indication of how monetary distributions received in the at least
one subaccount are to be reinvested;
allocating, with at least one computer processor, the
amount of assets requested to be allocated into the at least one
subaccount;
initiating the purchase of at least a portion of at least one
share of the specified exchange-traded fund based on the amount
of annuity assets allocated into the at least one subaccount;
issuing a number of units associated with the individual
based on the amount of shares purchased in the at least one
subaccount; and
generating, by the at least one graphical user interface, a
display showing at least one of the following: the individual's
account value, the individual's subaccount values, the
individual's subaccount allocation, the individual's account
history, or any combination thereof.
THE REJECTION
The Examiner finds that "[ the claims] are directed to managing a
variable annuity fund, which is an abstract idea similar to those [ideas]
identified by the courts [that are directed to] certain methods of organizing
human activities." Final Act. 4 ( citing various federal court cases for the
proposition that this category of abstract ideas more specifically includes
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methods of managing transactions between people, managing an insurance
policy, tax-free investing, hedging, and generating rule-based tasks for
processing an insurance claim). The Examiner also finds that the claims can
be characterized as the abstract idea of "an idea of itself." Id. The Examiner
further determines that the claims do not include additional elements that are
sufficient to amount to significantly more than the judicial exception. Id. at
4--5.
Appellants present multiple arguments (App. Br. 13-27; Reply Br. 2-
6), which we address below seriatim.
PRINCIPLES OF LAW
We review the appealed rejections for error based upon the issues
identified by Appellants, and in light of the arguments and evidence
produced thereon. Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010)
(precedential).
Regarding the question of patent eligibility under 35 U.S.C. § 101, the
Supreme Court has set forth an analytical "framework 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. v. CLS Bank Int'!, 134 S. Ct. 2347, 2355 (2014) (citing Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71-73 (2012)).
In determining whether the § 101 exception applies, "we must distinguish
between patents that claim the 'buildin[g] block[s]' of human ingenuity and
those that integrate the building blocks into something more." Alice, 134
S. Ct. at 2354--55.
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In the first step of the analysis, we determine whether the claims at
issue are "directed to" a judicial exception, such as an abstract idea. Id. at
2355. If not, the inquiry ends. Thales Visionix Inc. v. US., 850 F.3d 1343,
1346 (Fed. Cir. 2017); Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1339
(Fed. Cir. 2016). If the claims are determined to be directed to an abstract
idea, then we consider under step two whether the claims contain an
"inventive concept" sufficient to "transform the nature of the claim into a
patent-eligible application." Alice, 134 S. Ct. at 2355 ( quotations and
citation omitted).
In considering whether the claims are directed to an abstract idea, we
acknowledge, as did the Supreme Court, 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. We therefore look to whether the
claims focus on a specific means or method that improves the relevant
technology or are instead directed to a result or effect that, itself, is the
abstract idea and merely invokes generic processes and machinery. See
Enfzsh, 822 F.3d at 1336.
In the second step of the Alice analysis, if applicable, we then must
consider whether the claims contain an element or a combination of
elements that is sufficient to transform the nature of the claims into a patent-
eligible application. Ultramercial, Inc. v. Hulu LLC, 772 F.3d 709, 714
(Fed. Cir. 2014); Alice, 134 S. Ct. at 2355.
In applying step two of the Alice analysis, we must
"determine whether the claim[] do[ es] significantly more than
simply describe [the] abstract method" and thus transform the
abstract idea into patentable subject matter. We look to see
whether there are any "additional features" in the claim[] that
constitute an "inventive concept," thereby rendering the claim[]
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eligible for patenting even if [it is] directed to an abstract idea.
Those "additional features" must be more than "well-understood,
routine, conventional activity."
Intellectual Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1328 (Fed.
Cir. 2017) ( citations omitted).
Claims that "merely require generic computer implementation[] fail to
transform [an] abstract idea into a patent-eligible invention." Alice, 134
S. Ct. at 2357.
CONTENTIONS AND ANALYSIS
I.
Appellants first describe the procedural history of the present case.
App. Br. 13. Appellants assert that the application has been subjected to
protracted examination entailing five Office Actions by three different
examiners. Appellants also point out that there are no outstanding prior-art
rejections, and that multiple examiners have found the claims to be novel
and non-obvious.
These arguments are unpersuasive. Any perceived undue delay in
examination is not an appealable matter. Appropriate recourse for
addressing such issues would be one of the following: ( 1) request the
Examiner's Supervisory Patent Examiner (SPE) to exercise supervisory
oversight, or (2) file a petition to the Director to invoke supervisory
authority under 37 C.F.R. § 181(a)(3).
Also, the fact that no art-based rejections are asserted against the
claims is similarly irrelevant to the present appeal. "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
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categories of possibly patentable subject matter." Diamond v. Diehr, 450
U.S. 175, 188-89 (1981). A novel and nonobvious claim directed to a
purely abstract idea is, nonetheless, patent-ineligible. See Mayo, 566 U.S. at
90; see also Parker v. Flook, 437 U.S. 584, 594--95 (1978) (holding claims
to "a new and presumably better method for calculating alarm limit values,"
of undisputed usefulness, to be directed to patent-ineligible subject matter);
see also Ass 'nfor Molecular Pathology v. Myriad Genetics, Inc., 569 U.S.
576, 591 (2013) ("Groundbreaking, innovative, or even brilliant discovery
does not by itself satisfy the § 101 inquiry.").
II.
Appellants request that the Board take notice that this case has not
been examined on a claim-by-claim basis. App. Br. 13. Appellants
effectively allege that the Examiner has strong-armed Appellants to accept
examination of only claim 1 by threatening to issue a restriction requirement
if Appellants did not so agree. Id. Appellants complain that it is improper
for the Examiner to refuse to examine all of the claims. Id.
This argument is not directed to an appealable issue. Appellants'
recourse for addressing such an alleged impropriety in the examination
procedure would be to either (1) request the Examiner's SPE to exercise
supervisory oversight or (2) file a petition to the Director to invoke
supervisory authority under 37 C.F.R. § 181(a)(3).
Furthermore, the Board only addresses the individual claims' separate
patentability on appeal to the extent that Appellants present separate
arguments in relation to any of the individual claims. See Frye ( explaining
that the Board review appealed rejections for error based upon the issues
identified by Appellants); see also 3 7 C.F .R. § 41.3 7 ( c )(1 )(iv):
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\Vhen multiple claims subject to the same ground of rejection are
argued as a group or subgroup by appellant, the Board may select
a single claim from the group or subgroup and may decide the
appeal as to the ground of rejection ,vith respect to the group or
subgroup on the basis of the selected c1aim alone.
Notwithstanding any other provision of this paragraph1 the
failure of appellant to separately argue claims [ that] appellant has
grouped together shall constitute a vvaiver of any argument that
the Board must consider the patentability of any grouped claim
separately.
III.
Appellants argue two reasons for why the Examiner erred in
determining that "the claims 'are directed to managing a variable annuity
fund, which is an abstract idea."' App. Br. 14. First, Appellants
acknowledge that "some claims refer to a method and system 'for managing
variable annuity funds ... , "' but Appellants note that "independent claim 18
is directed to a 'computer-implemented method for reducing risk in a
variable annuity product' and claim 23 is directed to a 'computer program
product ... for causing a computer to reduce risk in a variable annuity
product."' Id. at 14--15.
It is not entirely clear why these minor differences in claim wording
allegedly refute the Examiner's determination that the claims are directed to
an abstract idea. Regardless, Appellants' mere recitation of the claim
language does not constitute persuasive substantive argument. See
37 C.F.R. § 4I.37(c)(l)(iv) ("[a] statement [that] merely points out what a
claim recites will not be considered an argument for separate patentability of
the claim"). Moreover, the level of abstraction at which the Examiner
describes the invention does not change the accuracy of the Examiner's
determination. Apple v. Ameranth Inc., 842 F.3d 1229, 1240 (Fed.
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Cir. 2016) ("An abstract idea can generally be described at different levels of
abstraction.")
As the second reason for alleging error, Appellants argue that "it is
improper [ for the Examiner to attempt] to satisfy the first prong of Alice by
merely reiterating the preamble." Id. at 15. Appellants posit that such an
approach would effectively mean that every claim is directed to an abstract
idea. Id. Appellants also argue that rather than being directed to the abstract
idea of "managing a variable annuity fund," the claims, instead, are directed
to
Id.
specific, technological systems and processes for creating
a variable annuity account, facilitating user interaction with
specific user interfaces, allowing for tax-deferred or tax-
advantaged assets to be invested in a variable annuity, using
subaccounts to allocate funds into corresponding exchange-
traded funds (ETFs) and to pool assets from multiple annuity
accounts, issuing units based on shares purchased for
subaccounts, and reducing risk in a variable annuity account, as
examples.
These arguments are unpersuasive. The fact that the claims may
recite technical hardware, or "systems and processes," does not negate the
fact that the claims are, in fact, directed to concepts that can be characterized
as either (i) relating to agreements between people or performance of
financial transactions (see MPEP § 2106.04(a)(2) Part (I)) or (ii) relating to
managing relationships or transactions between people, or satisfying or
avoiding a legal obligation (See MPEP § 2106.04(a)(2) Part (II)). The fact
that the claims further recite hardware components is more appropriately
addressed under step 2 of the Alice inquiry when determining whether the
claims recite significantly more than an abstract idea.
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IV.
Appellants next present three arguments for why, even if one were to
assume arguendo that the claims are directed to an abstract idea, the claims
recite inventive concepts that are substantially more than the idea and why
the Examiner failed to consider the claim elements as an ordered
combination, as well as individually. App. Br. 15. We address these
arguments in tum.
IV.A.
Appellants first argue that the Examiner has not shown the claimed
invention will preempt all methods and systems for managing a variable
annuity fund, or even preempt all methods of managing a variable annuity
account that invests in exchange-traded funds. Id. at 16. This argument is
unpersuasive.
We recognize that the Supreme Court has described "the concern that
drives this exclusionary principle [i.e., the exclusion of abstract ideas from
patent eligible subject matter] as one of pre-emption." See Alice Corp., 134
S. Ct. at 2354. However, characterizing preemption as a driving concern for
patent eligibility is not the same as characterizing preemption as the sole test
for patent eligibility. As our reviewing court has explained: "The Supreme
Court has made clear that the principle of preemption is the basis for the
judicial exceptions to patentability" and "[ f]or this reason, questions on
preemption are inherent in and resolved by the§ 101 analysis." Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)
( citing Alice Corp., 134 S. Ct. at 2354). Although "preemption may signal
patent ineligible subject matter, the absence of complete preemption does
not demonstrate patent eligibility." Id.
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IV.B.
Appellants next argue that the claims recite significantly more than an
abstract idea because claim 1 includes several additional claim elements that
are more than the abstract idea alleged by the Examiner in combination with
pre- and post-solution steps of receiving data and displaying data. App.
Br. 16. Appellants then reproduce claim 1 with substantial portions
underlined to indicate that "the majority of claim 1 is directed to more than
'managing a variable annuity fund."" Id. at 16-17. Appellants also present
substantive arguments in relation to the following of the underlined
elements:
(1) "assigning each of a plurality of exchange-traded funds to
a corresponding subaccount, wherein each subaccount
corresponds to a different exchange-traded fund, and wherein
each subaccount represents a pooled account of assets from a
plurality of annuity accounts;"
(2) "initiating the purchase of at least a portion of at least one
share of the specified exchange-traded fund based on the amount
of annuity assets allocated into the at least one subaccount;" and
(3) "issuing a number of units associated with the individual
based on the amount of shares purchased in the at least one
sub account."
Id. at 19--20.
Appellants' arguments are unpersuasive that these claim limitations
add significantly more to the abstract idea of claim 1. These cited
limitations are not directed to technological solutions to technological
problems. These cited limitations, instead, all can be reasonably
characterized as constituent steps of the overall abstract idea of managing a
variable annuity fund. See BSG Tech LLC v. BuySeasons, Inc., No. 2017-
1980, _ F.3d_, 2018 WL 3862646, at *7 (Fed. Cir. Aug. 15, 2018) ("It
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has been clear since Alice that a claimed invention's use of the ineligible
concept to which it is directed cannot supply the inventive concept that
renders the invention 'significantly more' than that ineligible concept.").
Furthermore, it would be immaterial if the cited limitations were
deemed to constitute separate abstract ideas that are distinct from the
abstract idea to which the Examiner finds claim 1 to be directed. A claim
need not be directed to a single abstract idea to be patent ineligible. As our
reviewing court has held, combining several abstract ideas does not render
the combination any less abstract. RecogniCorp, LLC v. Nintendo Co.,
855 F.3d 1322, 1327 (Fed. Cir. 2017) ("Adding one abstract idea ... to
another abstract idea ... does not render the claim non-abstract."); see also
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093-94 (Fed.
Cir. 2016) (patent-ineligible claims were directed to a combination of
abstract ideas).
IV.C.
Appellants next argue that the rejection is improper because the
Examiner fails to address the various limitations as an ordered combination.
App. Br. 20-23.
For example, if the claim elements are considered as an
"ordered combination," it is clearly evident that the claims recite
significantly more than "managing a variable annuity fund."
First, claim 1 requires creating a variable annuity account for an
individual issued as an Individual Retirement Account (IRA).
Claim l also requires that the request received from the graphical
user interface is to transfer assets from someone's qualified
retirement plan into the variable annuity account as at least one
rollover. The claim also requires a request received from a
graphical user interface to allocate an amount of assets within the
variable annuity account into at least one subaccount, wherein
the request further comprises an indication of how monetary
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distributions received in the at least one subaccount are to be
reinvested. Several more steps are recited, including the step of
allocating, with at least one computer processor, the amount of
assets requested to be allocated into the at least one subaccount,
initiating the purchase of at least a portion of at least one share
of the specified exchange-traded fund based on the amount of
annuity assets allocated into the at least one subaccount, and
issuing a number of units associated with the individual based on
the amount of shares purchased in the at least one subaccount.
Id. at 21.
Appellants' argument is unpersuasive. As we explained in the
preceding section, the limitations upon which Appellants rely do not
constitute elements that are additional to the abstract idea. The argued
limitations constitute the abstract ideas themselves. As such, those
limitations cannot render the claims any less abstract. RecogniCorp,
855 F.3d at 1327.
IV.D.
Appellants next repeat their prior argument that "[t]he established
novelty and non-obviousness of the claimed invention establishes that [the
claims] include[] an 'inventive concept."' App. Br. 24 ( emphasis omitted).
Appellants' argument is unpersuasive. As we explained above, "[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." Diehr,
450 U.S. at 188-89.
IV.E.
Lastly, Appellants argue that the Examiner erred in determining that
the claims are directed to patent-eligible subject matter because "the
inventiveness of the claimed invention is further demonstrated by the
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documentary evidence submitted by Appellants during prosecution of this
application which shows that third parties also considered the claimed
invention to be novel and innovative." App. Br. 24; see generally id. at 24--
26. "Appellants submit that these secondary considerations of non-
obviousness should be considered in determining whether the pending
claims include an inventive concept." Id. at 26.
Again, though, "[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." Diehr, 450 U.S. at 188-89.
CONCLUSION
For the foregoing reasons, Appellants have not persuaded us of error
in the Examiner's determination that the appealed claims are directed to
patent-ineligible subject matter.
DECISION
The Examiner's decision rejecting claims 1-3, 5-9, 11-18, 20, 21, 23,
and 25 is affirmed.
No time period for taking any subsequent action in connection with
this appeal maybe extended under 37 C.F.R. § 1.136(a)(l). See 37 C.F.R.
§ 1.136(a)(l )(iv).
AFFIRMED
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