Ex Parte KIM et al

Patent Trials and Appeals Board

May 6, 2019

13854516 - (D) (P.T.A.B. May. 6, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/854,516 04/01/2013
21967 7590 05/06/2019
Hunton Andrews Kurth LLP
Intellectual Property Department
2200 Pennsylvania Avenue, N.W.
Washington, DC 20037
FIRST NAMED INVENTOR
David KIM
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.
52493.000659 9871
EXAMINER
KAZIMI, HAN! M
ART UNIT PAPER NUMBER
3691
MAIL DATE DELIVERY MODE
05/06/2019 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 DAVID KIM, ROBERT LIN,
REBECCA CONWAY JUSTICE, and SENA KW A WU
Appeal 2017-010641 1
Application 13/854,5162
Technology Center 3600
Before TARA L. HUTCHINGS, AMEE A. SHAH, and
MATTHEWS. MEYERS, Administrative Patent Judges.
MEYERS, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from a rejection of claims
38, 39, 42-50, 52, and 53. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 Our Decision references Appellants' Appeal Brief ("Appeal Br.," filed
February 7, 2017), Reply Brief ("Reply Br.," filed August 15, 2017), the
Examiner's Answer ("Ans.," mailed June 15, 2017), and Final Office Action
("Final Act.," mailed September 7, 2016).
2 Appellants identify Genworth Holdings, Inc. as the real party in interest.
Appeal Br. 1.
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Application 13/854,516
CLAIMED INVENTION
Appellants' claims relate "to a system and method for risk assessment,
and more particularly to a system and method for risk assessment in
connection with insurance pool participation" (Spec. 1 :3-5).
Claims 38, 50, and 53 are the independent claims on appeal. Claim
38, reproduced below with bracketed notations added, is illustrative of the
claimed subject matter:
38. A computer implemented method that assesses risk
associated with participating in an insurance pool based on
costs and expected benefits of participating, the computer
implemented method implemented on a computing device using
a tangibly embodied computer readable medium, the method
compnsmg:
[a] storing, in a database, an insurance pool's percentage
share to market, an insurance company's percentage share to
pool, the insurance company's percentage share to market, an
average policy amount, and a number of casualties in a
catastrophic event;
[b] determining, by a computer server comprising a
computer processor, an investment index associated with
investment by an insurance company in an insurance pool,
wherein the investment index comprises a product of the
number of casualties, the insurance pool's percentage share to
market, the insurance company's percentage share to pool, and
the average policy amount, the insurance pool being constituted
by member insurance companies each respectively contributing
a predetermined amount of respective capital to the pool, and
the investment, of said insurance company, being the respective
capital contributed by said insurance company;
[ c] determining, by the computer processor, a return
index associated with an expected return to the insurance
company from participating in the insurance pool, wherein the
return index comprises a product of the number of casualties,
the insurance company's percentage share to market, and the
average policy amount;
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[ d] calculating, by the computer processor, a computed
index based on the investment index and the return index,
wherein the computed index comprises a difference between the
investment and return indices; and
[ e] automatically generating and transmitting, by the
computer processor, the investment index, the return index and
the computed index in a graphical format to an interactive user
interface over a communication network.
REJECTION
Claims 38, 39, 42-50, 52, and 53 are rejected under 35 U.S.C. § 101
as directed to a judicial exception without significantly more.
ANALYSIS
Patent-Ineligible Subject Matter
Appellants argue claims 38, 39, 42-50, 52, and 53 as a group (Appeal
Br. 7-16; Reply Br. 1---6). We select independent claim 38 as representative.
The remaining claims stand or fall with claim 38. See 37 C.F.R.
§ 4I.37(c)(l)(iv).
Under 35 U.S.C. § 101, an invention is patent-eligible if it claims a
"new and useful process, machine, manufacture, or composition of matter."
35 U.S.C. § 101. Yet, subject matter belonging to any of the statutory
categories may, nevertheless, be ineligible for patenting. The Supreme
Court has interpreted § 101 to exclude laws of nature, natural phenomena,
and abstract ideas, because they are regarded as the basic tools of scientific
and technological work, such that including them within the domain of
patent protection would risk inhibiting future innovation premised upon
them. Ass 'nfor Molecular Pathology v. Myriad Genetics, Inc., 569 U.S.
576, 589 (2013).
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Of course, "[a]t some level, 'all inventions ... embody, use, reflect,
rest upon, or apply'" these basic tools of scientific and technological work.
Alice Corp. v. CLS Bank Int 'l, 573 U.S. 208, 217 (2014) (internal citation
omitted). Accordingly, evaluating ineligible subject matter, under this
judicial exclusion, involves a two-step framework for "distinguish[ing]
between patents that claim the buildin[g] block[ s] of human ingenuity and
those that integrate the building blocks into something more, thereby
transform[ing] them into a patent-eligible invention." Id. (internal quotation
marks and citation omitted). The first step determines whether the claim is
directed to judicially excluded subject matter (such as a so-called "abstract
idea"); the second step determines whether there are any "additional
elements" recited in the claim that ( either individually or as an "ordered
combination") amount to "significantly more" than the identified judicially
excepted subject matter itself. Id. at 217-18.
The USPTO recently published revised guidance on the application of
§ 101, in accordance withjudicial precedent. USPTO, 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50, 57 (Jan. 7, 2019)
("2019 Revised Guidance"). Under the 2019 Revised Guidance, a claim is
"directed to" an abstract idea, only if the claim recites any of
(1) mathematical concepts, (2) certain methods of organizing human
activity, and (3) mental processes - without integrating such abstract idea
into a "practical application," i.e., without "apply[ing], rely[ing] on, or
us[ing] the judicial exception in a manner that imposes a meaningful limit on
the judicial exception, such that the claim is more than a drafting effort
designed to monopolize the judicial exception." Id. at 53-55. A claim so
"directed to" an abstract idea constitutes ineligible subject matter, unless it
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recites an additional element ( or combination of elements) amounting to
significantly more than the abstract idea. Id. at 56.
With regard to the first step of the Alice framework, the Examiner
states that independent claim 3 8 is directed towards "risk assessment in
connection with insurance pool participation" (Final Act. 3), and determines
that the process recited in independent claim 38 is directed to "a
fundamental economic practice ( concepts relating to commerce such as
forming contracts and business relations) and a method of organizing human
activity ( concepts relating to interpersonal activities such as managing
transactions and sales activities)" (id.). When viewed through the lens of the
2019 Revised Guidance, the Examiner's analysis depicts the claimed subject
matter as one of the ineligible "[ c ]ertain methods of organizing human
activity" that include "fundamental economic principles or practices" and
"commercial ... interactions," such as "advertising, marketing or sales
activities or behaviors" and "business relations," as well as "managing
personal behavior or relationships or interactions between people (including
social activities, teaching, and following rules or instructions)" under
Prong One of Revised Step 2A. See 2019 Revised Guidance, 84 Fed. Reg.
at 51-52.
In response to the Examiner's determination, Appellants argue that
independent claim 38 "do[es] not simply claim the general concept of
'allowing users to assess the risk of an investment'" (Appeal Br. 12 (citing
Final Act. 4)); but rather, "recite[s] a very specific method for determining
whether to participate in an insurance pool" (Appeal Br. 12; see also id. at
7-11 ). We cannot agree.
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Under the first prong of step 2A of the 2019 Revised Guidance, we
first determine if the claims recite an abstract idea. In this regard, we note
that the Specification is titled "SYSTEM AND METHOD FOR POOL
RISK ASSESSMENT." The Specification discloses that "[t]he present
invention relates to a system and method for risk assessment, and more
particularly to a system and method for risk assessment in connection with
insurance pool participation" (Spec. 1 :3-5). According to the Specification,
[r]isk assessment is a cornerstone of the insurance
industry. An insurance company's success is based, in part, on
its ability to accurately predict, assess, and thereafter assume
risk. Assumption of too much risk may result in the insurance
company not having enough reserve capital to cover its claims,
while assumption of too little risk may result in unrealized
business opportunities.
(Id. at 1:6-10). The Specification identifies that "[a] common industry
response to a catastrophic event is to form an insurance pool--a collection of
member insurance companies each contributing a predetermined amount of
capital to the pool" (id. at 1: 18-20). However, the Specification describes
that after the September 11 attacks, "[ m Jany insurance companies formerly
associated with such pools have withdrawn their participation in response to
the heavy losses incurred" (id. at 2:3-9). The Specification discloses that
there is presently "no system or method whereby an insurance company may
assess or determine the expected costs, benefits and/ or risks that result from
participating in an insurance pool" (id. at 2:12-14). To address these
drawbacks, the present invention "provide[ s] a system and method for
assessing the risks of participating in an insurance pool based on the costs
and expected benefits of participating" (id. at 2:24--26).
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Consistent with this description, independent claim 38 recites broadly
"[a] method that assesses risk associated with participating in an insurance
pool based on costs and expected benefits of participating" including steps
for "storing" data (i.e., "[1] an insurance pool's percentage share to market,
[2] an insurance company's percentage share to pool, [3] the insurance
company's percentage share to market, [ 4] an average policy amount, and
[5] a number of casualties in a catastrophic event"), "determining ... an
investment index," "determining ... a return index," "calculating ... a
computed index based on ... a difference between the investment and return
indices," and "automatically generating and transmitting ... the investment
index, the return index and the computed index ... to an interactive user
interface."
Upon reviewing the Specification and the claim as whole, as
summarized above, we agree with the Examiner that exemplary independent
claim 38 is at least directed to one of the ineligible "[ c ]ertain methods of
organizing human activity" that include "fundamental economic principles
or practices" and "commercial ... interactions" (see Final Act. 3). Here,
independent claim 3 8 "stor[ es]" data (limitation [a]), "determin[ es] ... an
investment index" based on a portion of the stored data (limitation [b ]),
"determin[ es] ... a return index" based on a portion of the stored data
(limitation [ c ]), "calculate[ es] ... a computed index," which is simply the
"difference between the investment and return indices" (limitation [ d]), and
then "transmit[ s] ... the investment index, the return index and the
computed index ... to an interactive user interface" (limitation [ e ]).
Together these steps simply provide a user with data that enables a user to
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assess "the risks, benefits and/ or costs associated with participating in an
insurance pool" (cf Spec. 2:19-26).
Thus, like the concept of intermediated settlement in Alice, and the
concept of hedging in Bilski, the concept of "risk assessment in connection
with insurance pool participation" (Final Act. 3) recited in exemplary
independent claim 1 "is a fundamental economic practice long prevalent in
our system of commerce." Alice, 573 U.S. 216 (citations and internal
quotation marks omitted). Accordingly, we conclude that exemplary
independent claim 3 8 recites fundamental economic practices and/ or
commercial transactions that, under the Revised Guidance, fall under the
category of abstract ideas related to "[ c ]ertain methods of organizing human
activity." 2019 Revised Guidance, 84 Fed. Reg. at 52. Accordingly,
independent claim 3 8 recites an abstract idea.
Next, we tum to the second prong of step 2A of the 2019 Revised
Guidance and determine whether the claims recite a practical application of
the recited judicial exception. Here we look to see if, for example, (i) any
additional elements of the claims reflects an improvement in the functioning
of a computer or to another technological field, (ii) an application of the
judicial exception with, or by use of, a particular machine, (iii) a
transformation or reduction of a particular article to a different state or thing
(iv) or a use of the judicial exception in some other meaningful way beyond
generally linking the use of the judicial exception to a particular
technological environment. See 2019 Revised Guidance, 84 Fed. Reg. at 55;
See also MPEP § 2106.05(a}-(c), (e}-(h).
Appellants argue that independent claim 1 "improve[ s] efficiencies,
both physical and transactional, for 'assess[ing] risk associated with
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participating in an insurance pool based on costs and expected benefits of
participating'" (Appeal Br. 15 (emphases omitted); see also Reply Br. 4).
However, we find no indication in the Specification that the present
invention improves a computer or other technology, invokes any assertedly
inventive programming, requires any specialized computer hardware or
other inventive computer components (see, e.g., Spec. 13:9-14:4, 16:17-24,
17: 14--18:3), i.e., a particular machine, or that the claimed invention is
implemented using other than generic computer components to perform
generic computer functions. See DDR Holdings, LLC v. Hotels.com, L.P.,
773 F.3d 1245, 1256 (Fed. Cir. 2014) ("[A]fter Alice, there can remain no
doubt: recitation of generic computer limitations does not make an
otherwise ineligible claim patent-eligible.") (see also Ans. 6-9). Instead, the
"improvements" to which Appellants refer are business improvements rather
than an improvement to a technological or technical field (see OIP Techs.,
Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) ("[R]elying
on a computer to perform routine tasks more quickly or more accurately is
insufficient to render a claim patent eligible.") (see also Ans. 7).
We also find no indication in the Specification that the claimed
invention effects a transformation or reduction of a particular article to a
different state or thing. Nor do we find anything of record, short of attorney
argument, that attributes any improvement in computer technology and/or
functionality to the claimed invention or that otherwise indicates that the
claimed invention "appl[ies ], rel[ies] on, or us[ es] the judicial exception in a
manner that imposes a meaningful limit on the judicial exception, such that
the claim is more than a drafting effort designed to monopolize the judicial
exception." See 2019 Revised Guidance, 84 Fed. Reg. at 54.
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Appellants argue that independent claim 3 8 is similar to the claims in
Bascom Global Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d
1341 (Fed. Cir. 2016). More particularly, Appellants argue
the claims here recite improvements to conventional systems and
methods that require a very particular system that "determin[ es],
by a computer server comprising a computer processor, an
investment index associated with investment by an insurance
company in an insurance pool, wherein the investment index
comprises a product of the number of casualties, the insurance
pool's percentage share to market, the insurance company's
percentage share to pool, and the average policy amount, the
insurance pool being constituted by member insurance
companies each respectively contributing a predetermined
amount of respective capital to the pool, and the investment, of
said insurance company, being the respective capital contributed
by said insurance company." Thus, like the claims in Bascom,
the novel and non-generic arrangements recited in the claim are
patent-eligible.
(Reply Br. 5.) We cannot agree.
The difficulty with Appellants' argument is that Appellants simply
reproduce limitations from independent claim 3 8 and assert, without
explaining, that the present claim is similar to claims in Bascom. Appellants
fail to provide adequate evidence or technical reasoning that independent
claim 38 improves some existing technological process or solves some
technological problem in conventional industry practice, such as in Diamond
v. Diehr, 450 U.S. 175 (1981). See Versata Dev. Grp., Inc. v. SAP Am., Inc.,
793 F.3d 1306, 1334 (Fed. Cir. 2015) (Determining that the "claims recit[ed]
a commonplace business method aimed at processing business information
despite being applied on a general purpose computer."), cert. denied, 136 S.
Ct. 2510 (2016); see also Alice, 573 U.S. at 224.
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Consequently, we are not persuaded that independent claim 38 is
similar to the claims in Bascom, which recited a "non-conventional and non-
generic arrangement of known, conventional pieces" within a network, the
arrangement of elements being "a technical improvement over prior art ways
of filtering." Bascom, 827 F.3d at 1350; see also Intellectual Ventures I
LLC v. Capital One Bank (USA), 792 F.3d 1363, 1370 (Fed. Cir. 2015)
("Rather, the 'interactive interface' simply describes a generic web server
with attendant software, tasked with providing web pages to and
communicating with the user's computer.").
We are not persuaded of Examiner error to the extent Appellants
maintain that the claims are patent-eligible because "[t ]he claims do not
wholly pre-empt the field of 'allowing users to assess the risk of an
investment' due to numerous non-infringing alternatives that are significant
and substantial" (Appeal Br. 12; see also Reply Br. 5-6). There is no
dispute that the Supreme Court has described "the concern that drives [ the
exclusion of abstract ideas from patent eligible subject matter] as one of pre-
emption," Alice Corp., 573 U.S. at 216. But, characterizing preemption as a
driving concern for patent eligibility is not the same as characterizing
preemption as the sole test for patent eligibility. "The Supreme Court has
made clear that the principle of preemption is the basis for the judicial
exceptions to patentability" and "[ fJor 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, 573
U.S. at 216). "[P]reemption may signal patent ineligible subject matter,
[but] the absence of complete preemption does not demonstrate patent
eligibility." Id.
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Appellants also appear to argue that independent claim 3 8 is not
directed to an abstract idea because it is similar to the claims at issue in
McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir.
2016) (Reply Br. 4 ). However, Appellants do not point to anything in the
claims that resembles the improvement to the technical field of computer
animation that was not simply the use of a generic computer in McRO.
Appellants do not direct our attention to anything in the Specification to
indicate that the present invention provides an improvement in the
computer's technical functionality. The claims recite no technical element
or details for implementing the steps, and the "improvement" to which
Appellants refer is a business improvement rather than a technological one.
Turning to Step 2B of the of the 2019 Revised Guidance, we
determine whether the additional elements or combination of elements
( 1) add a specific limitation or combination of limitations that is not well-
understood, routine, and conventional activity in the field, which is
indicative that an inventive concept may be present; or (2) simply appends
well-understood, routine, conventional activities previously known to the
industry, specified at a high level of generality, to the judicial exception,
which is indicative that an inventive concept may not be present. See 2019
Revised Guidance, 84 Fed. Reg. at 56.
Appellants argue that independent claim 38 recites limitations which
"represent 'significantly more' than the alleged abstract idea of 'risk
assessment in connection with insurance pool participation"' (Appeal Br.
10). However, we agree with the Examiner that:
[t]he elements of the instant process, when taken in
combination, together do not offer substantially more than the
sum of the functions of the elements when each is taken alone.
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That is, the elements involved in the recited process undertake
their roles in performance of their activities according to their
generic functionalities which are well-understood, routine and
conventional. The elements together execute in routinely and
conventionally accepted coordinated manners and interact with
their partner elements to achieve an overall outcome which,
similarly, is merely the combined and coordinated execution of
generic computer functionalities which are well-understood,
routine and conventional activities previously known to the
industry.
(Final Act. 10; see also id. at 9-10 (citing Spec. 13-15).)
Finally, to the extent Appellants maintain that the claimed invention is
patent-eligible, i.e., that claim 38 amounts to "significantly more" than an
abstract idea, because "[t]he Office Action cannot cite to any prior art
references that anticipate or render obvious the claimed combination of
features" (Appeal Br. 13; Reply Br. 3--4), Appellants misapprehend the
controlling precedent.
Neither a finding of novelty nor a non-obviousness determination
automatically leads to the conclusion that the claimed subject matter is
patent-eligible. Although the second step in the Mayo/Alice framework is
termed a search for an "inventive concept," the analysis is not an evaluation
of novelty or non-obviousness, but rather, a search for "an element or
combination of elements that is 'sufficient to ensure that the patent in
practice amounts to significantly more than a patent upon the [ineligible
concept] itself."' Alice, 573 U.S. at 217-18 ( citation omitted).
"Groundbreaking, innovative, or even brilliant discovery does not by itself
satisfy the§ 101 inquiry." Ass 'nfor Molecular Pathology, 569 U.S. at 591.
A novel and non-obvious claim directed to a purely abstract idea is,
nonetheless, patent-ineligible. See Mayo, 566 U.S. at 90; see also Diamond,
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450 U.S. at 188-89 ("The 'novelty' of any element or steps in a process, or
even of the process itself, is of no relevance in determining whether the
subject matter of a claim falls within the § 101 categories of possibly
patentable subject matter.").
We are not persuaded, on the present record, that the Examiner erred
in rejecting independent claim 38 under 35 U.S.C. § 101. Therefore, we
sustain the Examiner's rejection of independent claim 38, and claims 39, 42-
50, 52, and 53, which fall with independent claim 38.
DECISION
The Examiner's rejection of claims 38, 39, 42-50, 52, and 53 under
35 U.S.C. § 101 is affirmed.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv).
AFFIRMED
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