Ex Parte Margolis et al

Patent Trials and Appeals Board

Jan 31, 2019

14578806 - (D) (P.T.A.B. Jan. 31, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/578,806 12/22/2014
63710 7590 02/04/2019
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
FIRST NAMED INVENTOR
Josh Margolis
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.
07-2125-C3 7985
EXAMINER
TINKLER, MURIEL S
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
02/04/2019 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):
patentdocketing@cantor.com
lkorovich@cantor.com
phowe@cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JOSH MARGOLIS, LAWRENCE TREVOR GAGE,
SCOTT HARTZELL, and ANDREW PRITCHARD 1
Appeal2017-010574
Application 14/578,806
Technology Center 3600
Before DAVID M. KOHUT, ERIC B. CHEN, and
JOSEPH P. LENTIVECH, Administrative Patent Judges.
KOHUT, Administrative Patent Judge.
DECISION ON APPEAL
Appellants seek our review, under 35 U.S.C. § 134(a), of the
Examiner's final rejection of claims 29-48. We have jurisdiction under
35 U.S.C. § 6(b).
We AFFIRM.
1 According to Appellants, the real party in interest is "CFPH, LLC."
App. Br. 2.
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Application 14/578,806
INVENTION
The present invention creates a financial trust that includes
investments having carbon footprints and a counterbalance of investments
having carbon credits. Spec., Abst.; ,r,r 76, 80, 98. Claim 29 is illustrative
and reproduced below.
29. An apparatus comprising:
at least one processor; and
at least one memory storing instructions which, when executed
by the at least one processor, direct the at least one processor to:
determine a first amount of carbon credit for neutralizing
a carbon footprint of at least one financial instrument;
and
generate a financial instrument determined to have a
neutralized carbon footprint, in which the act of
generating the financial instrument comprises:
based on the act of determining the first amount of
carbon credit, causing to be purchased a second
amount of carbon credit; and
causing the at least one financial instrument and
the second amount of carbon credit to be stored in
a trust.
REJECTIONS
Claims 29--48 are rejected under 35 U.S.C. § 101 as being directed to
non-statutory subject matter. Final Act. (Dec. 23, 2015) 5-7; Ans. (June 7,
2017) 3-7.
Claims 29, 47, and 48 are rejected on the ground of non-statutory
obviousness-type double patenting as being unpatentable over claims 29, 46,
and 48 of Margolis et al. (US 8,930,255 B2; Jan. 6, 2015 (hereinafter
"Margolis")). Final Act. 8-9; Ans. 2-3, 11.
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35 U.S.C. § 101 REJECTION OF CLAIM 29
Principles of Law
An invention is patent-eligible if it claims a "new and useful process,
machine, manufacture, or composition of matter." 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: "[l]aws of nature, natural phenomena, and abstract
ideas" are not patentable. E.g., Alice Corp. Pty. Ltd. v. CLS Bank Int 'l,
573 U.S. 208,216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court's two-step framework, described in
Alice. Id. at 217-18 (citing Mayo Collaborative Servs. v. Prometheus Labs.,
Inc., 566 U.S. 66, 75-77 (2012)). In accordance with that framework, we
first determine what concept the claim is "directed to." See Alice,
573 U.S. at 219 ("On their face, the claims before us are drawn to the
concept of intermediated settlement, i.e., the use of a third party to mitigate
settlement risk."); see also Bilski v. Kappas, 561 U.S. 593, 611 (2010)
("Claims 1 and 4 in petitioners' application explain the basic concept of
hedging, or protecting against risk.").
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219-20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594--95 (1978)); and
mental processes (Gottschalkv. Benson, 409 U.S. 63, 67 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 191
( 1981) ); "tanning, dyeing, making waterproof cloth, vulcanizing India
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rubber, smelting ores" (id. at 182 n. 7 ( quoting Corning v. Burden,
56 U.S. 252, 267---68 (1853))); and manufacturing flour (Benson,
409 U.S. at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that "[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula." Diehr, 450 U.S. at 176; see also id. at 191 ("We
view respondents' claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula."). Having
said that, the Supreme Court also indicated that a claim "seeking patent
protection for that formula in the abstract ... is not accorded the protection
of our patent laws, ... and this principle cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment." Id. ( citing Benson and Flook); see, e.g., id. at 187 ("It is now
commonplace that an application of a law of nature or mathematical formula
to a known structure or process may well be deserving of patent protection."
( emphasis omitted)).
If the claim is "directed to" an abstract idea, we tum to the second
step of the Alice framework, where "we must examine the elements of the
claim to determine whether it contains an 'inventive concept' sufficient to
'transform' the claimed abstract idea into a patent-eligible application."
Alice, 573 U.S. at 221 (quotation marks omitted). "A claim that recites an
abstract idea must include 'additional features' to ensure 'that the [claim] is
more than a drafting effort designed to monopolize the [ abstract idea]."'
Id. (quoting Mayo, 566 U.S. at 77 (alterations in original)). "[M]erely
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requir[ing] generic computer implementation[] fail[ s] to transform
that abstract idea into a patent-eligible invention." Id.
Per recently published guidance regarding 35 U.S.C. § 101, we first
look to whether the claim recites:
(1) any judicial exceptions, including certain groupings of abstract
ideas (i.e., mathematical concepts, certain methods of organizing
human interactions such as a fundamental economic practice, or
mental processes); and
(2) additional elements that integrate the judicial exception into a
practical application (see Manual of Patent Examining Procedure
(MPEP) § 2106.05(a}-(c), (e}-(h)).
See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg.
50 (Jan. 7, 2019) ("Guidance"). 2 Only if a claim (1) recites a judicial
exception and (2) does not integrate that exception into a practical
application, do we then look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that is not
"well-understood, routine, conventional" in the field (see MPEP
§ 2106.05(d)); or
(4) simply appends well-understood, routine, conventional activities
previously known to the industry, specified at a high level of
generality, to the judicial exception.
See Guidance.
2 Also available at https://www.federalregister.gov/documents/
2019/01/07/2018-28282/2019-revised-patent-subject-matter-eligibility-
guidance.
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Issue (1): Does claim 29 recite ajudicial exception?
The Examiner concludes the functional limitations of claim 29, i.e., all
limitations recited after the "processor" and "memory" limitations, in toto,
recite a similar abstract idea as described in [b]uySAFE, Inc. v. Google, Inc.,
765 F.3d 1350 (Fed. Cir. 2014). Ans. 5; Final Act. 7. In doing so, the
Examiner specifies the functional limitations as:
determine a first amount of carbon credit for neutralizing a
carbon footprint of at least one financial instrument; and
generate a financial instrument determined to have a neutralized
carbon footprint, in which the act of generating the financial
instrument comprises: based on the act of determining the first
amount of carbon credit, causing to be purchased a second
amount of carbon credit; and causing the at least one financial
instrument and the second amount of carbon credit to be stored
in a trust.
Final Act. 7. The Examiner specifies the abstract idea as:
generating socially responsible investment trusts (i.e. financial
instruments, see specification paragraph 7 6), which is similar to
concepts found to be abstract by the Courts, such as: a
fundamental economic practice (i.e. creating contractual
relationships, [b]uySAFE); certain methods of organizing
human activity (see also [b]uySAFE).
Ans. 5.
We agree with the Examiner's determinations, principally in view of
buySAFE 's following description of the addressed abstract idea:
The relevant Supreme Court cases are those which find an
abstract idea in certain arrangements involving contractual
relations, which are intangible entities. Bilski ... involved a
method of entering into contracts to hedge risk in commodity
prices, and Alice involved methods and systems for
"exchanging financial obligations between two parties using a
third-party intermediary to mitigate settlement risk," Alice,
[573 U.S. at 219]. More narrowly, the Court in both cases relied
on the fact that the contractual relations at issue constituted "a
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fundamental economic practice long prevalent in our system of
commerce." Bilski, 561 U.S. at 611 ... ; see Alice, [573 U.S. at
219--21].
765 F.3d at 1353-54. As the Examiner finds, buySAFE describes (above) an
abstract idea of contractually facilitating a fundamental economic practice.
Ans. 5. As the Examiner further finds, the functional limitations of claim 29
are each squarely directed to this concept (Final Act. 7}-namely by creating
a financial trust (contract) to ensure a desired/planned management of
investments (fundamental economic practice). 3
Appellants argue that the Examiner fails to specify the limitations of
claim 29 that recite an abstract idea. App. Br. 7-8. We are unpersuaded
because the Examiner plainly and reasonably correlates all functional
claim limitations-i.e., all but the claimed processor and memory
themselves-to the abstract idea of contractually facilitating a fundamental
economic practice. Ans. 5; Final Act. 7.
Appellants also argue that the record does not show a fundamental
economic practice of carbon-neutral investing. Reply Br. 3 ("The claims of
[b]uySafe . .. do not correspond to the carbon credit concept claimed in the
instant application."); see also App. Br. 9, 11, 15. We are unpersuaded
because, as shown in buySAFE, a claim directed to contractually facilitating
3 Though this correlation of Appellants' claimed invention to buySAFE is
alone sufficient, we note to the additional similarities of the methods of
Bilski and Alice as described by buySAFE. Both Bilski 's method and the
claimed invention counterbalance an unwanted aspect of investments:
Bilski 's method hedging risk; and the claimed invention offsetting carbon
footprints. See supra 7 (block-quote of buySAFE). Both Alice's method and
the claimed invention use a third party to ensure agreed-upon performance:
Alice's method using an intermediary; and the claimed invention using a
trustee. Id.
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a fundamental economic practice is not rendered patent-eligible by merely
restricting the contract to particular types of performance "themselves
familiar." 765 F.3d at 1354--55. Thus, claim 29 is not rendered
patent-eligible by merely restricting the financial trust to a familiar type of
investment activity-namely to socially responsible investing. Spec. ,r,r 76-
82 ( describing carbon-neutral investing as one of many means of socially
responsible investing).
Issue (2): Does claim 29 recite additional elements
that integrate the judicial exception into a practical
application?
Per our above analysis and as the Examiner finds, the additional
elements of claim 29 are the processor and memory that store and execute
the abstract idea (i.e., perform the functional limitations) as computer
instructions. Ans. 6. As the Examiner further finds, the processor and
memory are not otherwise described and thus constitute only a generic
computer. Id. Implementing an abstract idea on a generic computer is,
without more (i.e., such as here), not a practical application of the abstract
idea. See Alice, 573 U.S. at 221-24; see also MPEP § 2106.05([) ("Mere
Instructions To Apply An Exception").
Appellants argue claim 29 restricts the invention to a practical
application of the abstract idea by reciting a "specific and narrow"
embodiment of the invention, such that the claim does not preempt the
concept of "generating investment trusts." App. Br. 16. We are
unpersuaded because, as discussed, the carbon-neutral investing of claim 29
(i.e., the "specific" embodiment) merely restricts the financial trust to a
familiar type of investment activity. That is, the carbon-neutral investing
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narrows the abstract idea. It does not narrow the implementation, much less
narrow the implementation to a practical application of the abstract idea.
Issues (3) and (4): Does claim 29 recite additional elements
that are not well-understood, routine, or conventional (in the
industry), or, simply append well-understood, routine, or
conventional activities, at a high level of generality, to the
judicial exception?
The Examiner finds the additional elements of claim 29 are generic
and accordingly can be read on conventional computer technology. Ans. 6-
7. In support, the Examiner cites the Specification to show that a
conventional processor and memory can implement the abstract idea. Id.
at 6 ( citing Spec. ,r,r 54, 83).
We agree with the Examiner. As discussed, the additional elements of
claim 29 are recited as a generic processor and memory. Furthermore, the
Specification confirms that all of the claimed operations can be performed
by conventional computer technology (Spec. ,r,r 20, 50, 54, 60-61, 83), and
even performed by a stand-alone personal computer (id. ,r,r 60-61 ).
Appellants argue that the lack of a prior art rejection shows claim 29
recites significantly more than a fundamental economic practice ( abstract
idea) and its implementation by conventional means. App. Br. 13. As
argued, a "pragmatic analysis of [35 U.S.C.] § 101 is facilitated by
considerations analogous to those of§§ 102 and 103." Internet Patents
Corp. v. Active Network, Inc., 790 F.3d 1343, 1347 (Fed. Cir. 2015).
However, the search for an inventive concept ("significantly more") must
ensure a claim "in practice amounts to significantly more than ... the
ineligible concept itself" Alice, 573 U.S. at 217-18 (quoting Mayo, 566
U.S. at 72-73) (brackets omitted; emphasis added); see also SAP Am., Inc. v.
Investpic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018) ("No matter how
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much of an advance in the finance field the claims recite, the advance lies
entirely in the realm of abstract ideas[.] ... An advance of that nature is
ineligible for patenting."). For reasons discussed supra, any novelty of
claim 29 lies strictly within the recited abstract idea (the functional
limitations).
Appellants also argue: "Similar to the claims in DDR Holdings[, LLC
v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014)], the present
claims solve a problem rooted in computer technology to improve the
functionality of electronic trading systems[,] by enabling the creation of a
carbon-neutral investment vehicle." App. Br. 16. We are unpersuaded
because the claims of DDR Holdings addressed a problem limited to Internet
and website technologies. DDR Holdings, 773 F.3d at 1257. Therefore, the
solution to that problem was necessarily rooted in technology. Id.
Appellants have not shown, nor do we find, that only technology can address
the present invention's objective of creating a carbon-neutral investment
vehicle.
Conclusion
For the foregoing reasons, Appellants have not apprised us of error in
the rejection of claim 29 under 35 U.S.C. § 101. Accordingly, we sustain
the rejection.
35 U.S.C. § 101 REJECTION OF CLAIMS 30-48
The Examiner presents the same 35 U.S.C. § 101 rejection for claims
30-48, as presented for claim 29, because "independent claims 47 and 48 are
similar in scope to claim 29" and the remaining "dependent claims do not
correct the deficiencies." Final Act. 7. Appellants argue only that the
rejection fails to address claims individually. App. Br. 12-13. The
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Examiner responds that the "Office Action [ need not] contain a separate
write-up for each individual claim" and "the write-up of [ claim 29]
represent[ s] ... how the claim( s) were analyzed." Ans. 9.
We are unpersuaded by Appellants' argument because it fails to rebut
the Examiner's position that a separate "write-up" is not needed for claims
30-48 (id.}-i.e., that the write-up for claim 29 is sufficient. Appellants do
not show, for example, the write-up for claim 29 lacks notice under
35 U.S.C. § 132 for a particular feature of claims 30-48. See In re Jung,
637 F.3d 1356, 1363-1365 (Fed. Cir. 2011) (explaining the notice
requirement). Appellants merely "note that each claim recites different
subject matter" and "request that each claim be considered separately."
App. Br. 16-17. Appellants therefore only raise, at best, a petitionable issue
of whether an office action must separately address each claim. See
Ex Parte Frye, 94 USPQ2d 1072, 1077-78 (PTAB 2010) ("Petitionable
Matters" section); 3 7 C.F .R. § 1.181 ( a )(1) (Petition from an examination
requirement).
For the foregoing reasons, Appellants have not apprised us of error in
the rejection of claims 30-48 under 35 U.S.C. § 101. Accordingly, we
sustain the rejection.
OBVIOUSNESS-TYPE DOUBLE PATENTING REJECTION
OF CLAIMS 29, 47, AND 48
The Examiner rejects claims 29, 47, and 48 "on the ground of
nonstatutory double patenting as being unpatenable over claims 29, 46 and
48 of U.S. Patent No. 8,930,255 [Margolis]." 4 Final Act. 9; Ans. 3.
4 We note that Margolis does not contain claims 29, 46, and 48, as indicated
by the Examiner (Final Act. 9; Ans. 3).
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Appellants request that this rejection "be held in abeyance until the
application is otherwise in condition for allowance." App. Br. 18. The
Examiner, therefore, maintains the rejection in view of the request for
abeyance. Ans. 11.
Accordingly, in view of the request for abeyance, we proforma
sustain the double patenting rejection of claims 29, 47, and 48.
DECISION
We affirm the Examiner's decision rejecting claims 29--48.
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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