Ex Parte Malvey et al

Patent Trial and Appeal Board

May 29, 2018

13874214 (P.T.A.B. May. 29, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/874,214 04/30/2013
139180 7590 05/31/2018
Baker Botts LLP/Bank of America Corporation
2001 Ross Avenue
Suite 900
Dallas, TX 75201
FIRST NAMED INVENTOR
Kevin Malvey
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.
015444.0875 8414
EXAMINER
ANDERSON, MICHAEL W
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
05/31/2018 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):
ptomaill@bakerbotts.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte KEVIN MAL VEY, GEORGE S. CAREY,
MOLLY OXFORD, F ANI DAVIDSON, and ANTHONY KELL
Appeal2016-007424
Application 13/874,214 1
Technology Center 3600
Before JOSEPH A. FISCHETTI, KENNETH G. SCHOPPER, and
ALYSSA A. FINAMORE, Administrative Patent Judges.
FISCHETTI, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants seek our review under 35 U.S.C. § 134 from the
Examiner's final rejection of claims 1, 3, 4, 6-8, 10, 11, 13-15, 17, 18, 20,
and 21. We have jurisdiction under 35 U.S.C. § 6(b).
SUMMARY OF DECISION
We AFFIRM.
1 Appellants identify Bank of America Corporation as the real party in
interest. (Appeal Br. 2.)
Appeal2016-007424
Application 13/874,214
THE INVENTION
Appellants claims "relate[] generally to a tool for enhancing
competency of foreign regulations." (Spec. 1.)
Claim 1 reproduced below, is representative of the subject matter on
appeal.
1. An apparatus, comprising:
a memory operable to store information about a
competitor product selected to fund a first loan in a foreign
country, the information comprising: a currency of the first
loan, an interest rate of the first loan, a currency exchange rate
of the first loan, and a comment about the interest rate of the
first loan;
a network interface operable to receive a request for a
second loan; and
a processor communicatively coupled to the memory and
to the network interface and operable to:
determine that the second loan is requested to occur in
the foreign country;
determine an expected profit of the second loan based at
least in part upon the currency exchange rate of the first loan;
change the interest rate of the first loan based on the
comment about the interest rate of the first loan to form a first
product;
wherein the network interface is further operable to:
communicate, in response to the processor determining
that the second loan is requested to occur in the foreign country,
a message indicating:
that the first product should be offered to fund the second
loan; and
the expected profit of the second loan; and
communicate a second message indicating that, based on
the currency of the first loan and the foreign country in which
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the second loan is requested to occur, a second product is
selectable for servicing the second loan.
THE REJECTION
The Examiner relies upon the following as evidence of
unpatentability:
Basin et al.
Gonen et al.
US 2006/0248003 Al
US 2012/0239553 Al
Nov. 2, 2006
Sept. 20, 2012
The following rejections are before us for review:
Claims 1, 3, 4, 6-8, 10, 11, 13-15, 17, 18, 20, and 21 are rejected
under 35 U.S.C. § 101 because the claimed invention is not directed to
patent-eligible subject matter.
Claims 1, 3, 4, 6-8, 10, 11, 13-15, 17, 18, 20, and 21 are rejected
under 35 U.S.C. § 103 as being unpatentable over Basin in view of Gonen.
FINDINGS OF FACT
1. The Examiner found:
Therefore, the claims as a whole, do not amount to
significantly more than the abstract idea itself.
This is because the claims do not affect an
improvement to another technology or technical
field; the claims do not change the nature of the
computer itself or the technology; the claims do
not amount to an improvement to the functioning
of a computer itself; and the claims do not move
beyond a general link of the use of an abstract idea
to a particular technological environment. The
claims merely amount to the application or
instructions to apply the abstract idea (i.e.
determining an offer for a loan) using a generic
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computer, and is considered to amount to nothing
more than requiring a computer workstation and a
generic memory, network interface, and
processor to merely carry out the abstract idea
itself. As such, the claims, when considered as a
whole, are nothing more than the instruction to
implement the abstract idea (i.e. determining an
offer for a loan) in a particular, albeit well-
understood, routine and conventional technological
environment.
(Final Act. 3).
ANALYSIS
35 U.S.C. § 103 REJECTION
We will reverse the rejection of claims 1, 3, 4, 6-8, 10, 11, 13-15, 17,
18, 20, and 21under35 U.S.C. § 103.
Each of independent claims 1, 8, and 15 recites, in pertinent part, the
steps of,
a network interface operable to receive a request for a
second loan; ...
determine an expected profit of the second loan based at
least in part upon the currency exchange rate of the first loan;
change the interest rate of the first loan based on the
comment about the interest rate of the first loan to form a first
product[.]
Appellants argue,
the proposed Basin-Gonen combination does not even disclose,
teach, or suggest each and every element of the claims. First,
the Examiner alleges that i-f [0051] and Figure 1 of Basin
disclose "a network interface operable to receive a request for a
second loan," but Basin does not disclose, teach, or suggest this
element. Office Action, p. 6. Basin merely discloses
presenting pricing information for a single requested loan. See
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Basin, i-f [0051]. No second loan is disclosed. The claims here
recite both a first loan and a second loan. Furthermore, the
claims recite "determine an expected profit of the second loan
based at least in part upon the currency exchange rate of the
first loan." Therefore, Basin's disclosure of a single loan
cannot disclose both a first loan and a second loan, let alone
determining an expected profit of the second loan based on the
first loan.
(Appeal Br. 5.)
The Examiner, however, found "'a network interface operable to
receive a request for a second loan; and' [is disclosed by Basin at]
('multiple lender ... underwriting systems ... Internet 14' See at least
paragraph 0051, Figure 1element14: claim 1)." (Final Act. 6).
Additionally, in the Answer the Examiner supplements this finding, stating:
The network interface is operable to receive a second loan as
Basin teaches, "multiple lender ... underwriting systems ...
Internet 14" See at least paragraph 0051. In addition, by
teaching, Figure 1 element 14 as well as claim 1. In addition,
by teaching, in Figure 2 "subordinate financing" element 34
which shows for example second position on a house versus a
first position. This can be a down payment used to buy a house
for example. The second loan or subordinate financing implies
that the debt ranks behind the first secured lender, and means
that the secured lenders will be paid back before subordinate
debt holders. This definition can be found from Investopedia's
website as well as others as it is well-known. In addition, by
teaching, in Figure 6 multiple lenders with multiple loans. In
addition, by teaching, "numerous mortgage loan quotations"
See at least paragraph 0065. Finally, Figure 3 shows that the
user enters the loan scenarios in element 22 then the system
requests multiple loans.
(Answer 7.)
We agree with Appellants. While Basin does disclose offering plural
loans, nowhere is it disclosed that information from each loan's process
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results in "determin[ing] an expected profit of the second loan based at least
in part upon the currency exchange rate of the first loan; change the interest
rate of the first loan based on the comment about the interest rate of the first
loan to form a first product," as claimed. The Examiner finds that Basin at
paragraphs 51 and 65 discloses a request for a second loan. (Final Act. 6,
Answer 7.) Paragraph 65 of Basin discloses "the entry screen 24 includes
various different parameters that are entered by the mortgage professional
relating to the particular situation facing the borrower." Paragraph 51 of
Basin only discloses "loan pricing information based upon selectable loan
parameters, such as the mortgage rate, broker rebate points, or other
parameters that are valuable to the individual mortgage professional." The
Examiner relies on Basin at paragraphs 11 and 32 for the "determining" part
of the limitation listed above. (Final Act. 6). But, paragraph 11 only
discloses the general idea of profit by collecting interest on money, and
paragraph 32 only discloses the existence of conforming or nonconforming
loans. It is not apparent, and the Examiner does not explain, how one of
ordinary skill in the art would have known these limitations are disclosed by
Basin based on these generalized disclosures in Basin. Even taking the
Examiner's proposal of "subordinate financing," it is unclear how
cooperation between loans competing for the same securitization result in a
more profitable secondary loan based on the parameters of the underlying
first loan.
Because claims 3, 4, 6, 7, 10, 11, 13, 14, 17, 18, 20, and 21 depend
from one of claims 1, 8, and 15 and because we cannot sustain the rejection
of the base claims, the rejection of dependent claims, likewise, cannot be
sustained.
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35 U.S.C. § 101 REJECTION
We will sustain the rejection of claims 1, 3, 4, 6-8, 10, 11, 13-15, 17,
18, 20, and 21under35 U.S.C. § 101.
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, ...
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 Bank Int'!, 134 S. Ct. 2347, 2355 (2014)
(citations omitted) ( quoing Mayo Collaborative Servs. v. Prometheus Labs.,
Inc., 566 U.S. 66, 72-73 (2012)).
To perform this test, we must first determine whether the claims at
issue are directed to a patent-ineligible concept.
Although the Court in Alice made a direct finding 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 steps in claim 1 result in: "communicate a second message
indicating that, based on the currency of the first loan and the foreign
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country in which the second loan is requested to occur, a second product is
selectable for servicing the second loan."
The Specification further states,
store information pertaining to previous loans in country B of
the previous example. When the company indicates that it
wants to apply for a loan from country A to country B, the
system may predict the exchange rate of the loan based on the
exchange rates of the previous loans in country B. For
example, the system may determine that the exchange rates of
loans in country B has been increasing the past few months and
determine, in response, that the exchange rate for the
company's loan will be higher than the average exchange rate
of the previous month. The system may also use current rates
from public sites, such as Reuters or Bloomberg, to predict the
information. In this manner, the company would not be
required to apply for the loan before receiving estimates on
important information. Rather, the system may predict this
information for the company prior to the company applying for
the loan thus reducing network traffic associated with loan
applications.
(Spec. 7.)
Thus, all this evidence shows that claim 1 is directed to determining
expected profit of a second loan based on the currency exchange rate and
interest commentary associated with a first loan each made in a foreign
country. It follows from prior Supreme Court cases, and Gottschalk v.
Benson, 409 U.S. 63 (1972) in particular, that the claims at issue here are
directed to an abstract idea. Determining expected profit of a loan based on
the currency exchange rate and interest commentary is a fundamental
economic practice of a transaction because loan profit is based on the
anticipated cost of debt-a basic principle of economics. The patent-
ineligible end of the 35 U.S.C. § 101 spectrum includes fundamental
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economic practices. See Alice, 134 S. Ct. at 2355-57. Also, we determine
the steps of;
determin[ing] that the second loan is requested to occur
in the foreign country;
determin[ing] an expected profit of the second loan based
at least in part upon the currency exchange rate of the first loan;
chang[ing] the interest rate of the first loan based on the
comment about the interest rate of the first loan to form a first
product,
constitute "analyzing information by steps people go through in their minds,
or by mathematical algorithms, without more, as essentially mental
processes within the abstract-idea category." Elec. Power Grp., LLC v.
Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016); see also buySAFE, Inc.
v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014) (determining that claims
directed to certain arrangements involving contractual relations are directed
to abstract ideas). Thus, determining expected profit of a loan based on the
currency exchange rate and interest is an "abstract idea" beyond the scope of
§ 101.
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
an intermediated settlement in Alice and the concept of determining
expected profit of a loan based on the currency exchange rate and interest, at
issue here. Both are squarely within the realm of "abstract ideas" as the
Court has used that term. That the claims do not preempt all forms of the
abstraction or may be limited to foreign country loans, does not make them
any less abstract. See OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359,
1360----61 (Fed. Cir. 2015).
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The introduction of a computer into the claims does not alter the
analysis at Mayo step two. According to the Court,
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 "implemen[ t ]" an abstract idea
"on ... a computer," that addition cannot impart patent
eligibility. This conclusion accords with the pre-emption
concern that undergirds our § 101 jurisprudence. Given the
ubiquity of computers, wholly generic computer
implementation is not generally the sort of "additional
featur[ e ]" that provides any "practical assurance that the
process is more than a drafting effort designed to monopolize
the [abstract idea] itself."
Alice, 134 S. Ct. at 2358 (alterations in original) (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, 134 S. Ct. at 2359. They do not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to take in data, compute a result, and return the result to a user
amounts to electronic data query and retrieval-some of the most basic
functions of a computer. All of these computer functions are well-
understood, routine, conventional activities previously known to the
industry. See Elect. Power, 830 F.3d at 1354. In short, each step does no
more than require a generic computer to perform generic computer
functions.
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Considered as an ordered combination, the computer components of
Appellants' claims add nothing that is not already present when the steps are
considered separately. Sequences of data reception-analysis-communication
are 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)
(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, Appellants' claims simply recite the concept of
determining expected profit of a loan based on the currency exchange rate
and interest. 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. Instead, the claims at issue amount
to nothing significantly more than instructions to determine expected profit
of a loan based on the currency exchange rate and interest. Under our
precedents, that is not enough to transform an abstract idea into a patent-
eligible invention. See Alice, 134 S. Ct. at 2360.
As to the structural claims, they
are no different from the method claims in substance. The
method claims recite the abstract idea implemented on a generic
computer; the system claims recite a handful of generic
computer components configured to implement the same idea.
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This Court has long "warn[ ed] ... against" interpreting § 101 "in
ways that make patent eligibility 'depend simply on the
draftsman's art."'
Alice, 134 S. Ct. at 2360 (alterations in original).
We have reviewed all the arguments (Appeal Br. 6-9) Appellants
have submitted concerning the patent eligibility of the claims before us
which stand rejected under 35 U.S.C. § 101. We find that our analysis
above substantially covers the substance of all the arguments which have
been made. But for purposes of completeness, we will address various
arguments in order to make individual rebuttals of same.
Appellants ague that "the Examiner does not establish a prima facie
case that the claims are directed to an abstract idea." (Appeal Br. 7.)
We disagree with Appellants. All that is required of the office to meet
its prima facie burden of production is the Examiner must "notify the
applicant," "stating the reasons for such rejection," "together with such
information and references as may be useful in judging the propriety of
continuing prosecution of his application." 35 U.S.C. § 132; see also In re
Jung, 637 F.3d 1356, 1363 (Fed. Cir. 2011). The Examiner has done this
here. The Examiner indicated that claims 1, 3, 4, 6-8, 10, 11, 13-15, 17, 18,
20, and 21 are rejected under 35 U.S.C. § 101 as being directed "a
fundamental economic practice, as well as a method of organizing human
activities, and thus an abstract idea." (Final Act. 4--5.)
Appellants also argue,
the claims recite "change the [stored] interest rate of the first
loan based on the comment about the interest rate of the first
loan to form a first product," a physical step of data
transformation. As a result, the claims include a physical
process and cannot be directed to an abstract idea.
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(Appeal Br. 8.)
We disagree with Appellants that changing interest rates constitutes a
physical process-it is a change generated in the human mind and by human
decision and not a physical process, such as curing rubber. Diamond v.
Diehr, 450 U.S. 175, 184 (1981) ("Analyzing respondents' claims according
to the above statements from our cases, we think that a physical and
chemical process for molding precision synthetic rubber products falls
within the§ 101 categories of possibly patentable subject matter.").
Appellants finally argue, because
the system reduces network traffic associated with
communicating noncompetitive offers by "chang[ing] the
interest rate of the first loan based on the comment about the
interest rate of the first loan to form a first product[,] ... the
claims improve a technological process, technology, or
technical field, the claims amount to significantly more than an
abstract idea and is patent eligible.
(Appeal Br. 9.)
We disagree with Appellants. Appellants, here, are arguing the effect
of the abstraction and not a technological improvement. That is, the
question is whether the claims as a whole "focus on a specific means or
method that improves the relevant technology" or are "directed to a result or
effect that itself is the abstract idea and merely invoke generic processes and
machinery." McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299,
1314 (Fed. Cir. 2016). In this case, claim 1 as a whole is focused on
satisfying certain contingencies of a "currency of the first loan and the
foreign country in which the second loan is requested to occur, [and
creating] a second product [] selectable for servicing the second loan."
In their Reply Brief, Appellants argue,
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The Examiner merely argues that the claims do not include an
inventive concept because certain elements of the claim
(hardware memory, network interface, and processor) are
"routine and conventional." Answer, p. 6. However, the
Examiner's approach is improper because the Examiner does
not examine the ordered combination of the elements of the
claim. Rather, the Examiner isolates individual elements and
declares each element to be known.
(Reply Br. 8).
We disagree with Appellants. First, we disagree with Appellants that
the claims in Rapid Litigation Management Ltd. v. CellzDirect, Inc., 827
F.3d 1042 (Fed. Cir. 2016) are analogous to the claims before us. The court
in Rapid Litigation found that "the claims are directed to a new and useful
method of preserving hepatocyte cell." Id. at 1048. A hepatocyte cell is
composed from matter, whereas a loan is an abstraction. Second, as found
supra, we have engaged in "ordered combination" findings. Third, the
Examiner's determination here of "well-understood, routine, and
conventional" is directed to the technological environment of the claims (FF.
1 ), which determination we find proper. That is, the Examiner provides a
rational basis for his conclusion stating:
the claims do not amount to an improvement to the functioning
of a computer itself; and the claims do not move beyond a
general link of the use of an abstract idea to a particular
technological environment. The claims merely amount to the
application or instructions to apply the abstract idea (i.e.
determining an offer for a loan) using a generic computer,
and is considered to amount to nothing more than requiring a
computer workstation and a generic memory, network
interface, and processor to merely carry out the abstract idea
itself.
Id. Such an analysis is a factual determination. See Berkheimer v. HP Inc.,
881F.3d1360, 1369 (Fed. Cir. 2018) ("Whether something is well-
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understood, routine, and conventional to a skilled artisan at the time of the
patent is a factual determination."). We find the Examiner's noting (FF. 1)
of generic nature of the component parts recited in the claims provides
sufficient evidence of a generic computer system used to implement the
abstraction. See Credit Acceptance Corp. v. Westlake Services, 859 F.3d
1044, 1057 (Fed. Cir. 2017) ("Significantly, the claims do not provide
details as to any non-conventional software for enhancing the financing
process.). See Intellectual Ventures I LLC v. Capital One Fin. Corp., 850
F.3d 1332, 1342 (Fed. Cir. 2017) (explaining that "[o]ur law demands more"
than claim language that "provides only a result-oriented solution, with
insufficient detail for how a computer accomplishes it").
CONCLUSIONS OF LAW
We conclude the Examiner did err in rejecting claims 1, 3, 4, 6-8, 10,
11, 13-15, 17, 18, 20, and 21under35 U.S.C. § 103.
We conclude the Examiner did not err in rejecting claims 1, 3, 4, 6-8,
10, 11, 13-15, 17, 18,20,and21under35U.S.C.§101.
DECISION
The decision of the Examiner to reject claims 1, 3, 4, 6-8, 10, 11, 13-
15, 17, 18, 20, and 21 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). See 37 C.F.R.
§ 1.136(a)(l )(iv).
AFFIRMED.
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