Ex Parte Pearson et al

Patent Trials and Appeals Board

Jan 28, 2019

11106020 - (D) (P.T.A.B. Jan. 28, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
11/106,020 04/14/2005
20350 7590 01/30/2019
KILPATRICK TOWNSEND & STOCKTONLLP
Mailstop: IP Docketing - 22
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
Eric Edward Pearson
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.
91845-859377 (000510US) 3145
EXAMINER
SUMMERS, KIERSTEN V
ART UNIT PAPER NUMBER
3688
NOTIFICATION DATE DELIVERY MODE
01/30/2019 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):
ipefiling@kilpatricktownsend.com
KTSDocketing2@kilpatrick.foundationip.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ERIC EDWARD PEARSON, MICHAEL MENIS,
and DANIEL DELANO ROSS JR. 1
Appeal2017-010076
Application 11/106,020
Technology Center 3600
Before MICHAEL J. STRAUSS, J. JOHN LEE, and MICHAEL J. ENGLE,
Administrative Patent Judges.
STRAUSS, Administrative Patent Judge.
DECISION ON APPEAL
1 According to Appellants, the real party in interest is Six Continents Hotels,
Inc. See App. Br. 3.
Appeal2017-010076
Application 11/106,020
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from a rejection of claims
1-17, 21, 23, and 24. Claims 18-20 and 22 are withdrawn from
consideration. Final Act. 1. We have jurisdiction under 35 U.S.C. § 6(b ).
We affirm. 2
THE INVENTION
The claims are directed to a self-funded commission management
system. Spec., Title. Claim 1, reproduced below with a disputed limitation
emphasized in italics, is representative of the claimed subject matter:
1. A method for generating self-funded commission management
for affiliates providing online advertising campaigns targeted to
users for products or services offered by merchants associated
with a travel industry, the method comprising:
assigning, by a system computing device associated with
an administrator, an affiliate identifier to an affiliate providing
an online advertising campaign over a data network for a
merchant in the travel industry, the affiliate identifier using a
format based on a separate system of the travel industry, the
separate system configured to track commissions of travel
agencies and being different from the system computing device,
the format enabling the separate system to be repurposed for
tracking commissions of the affiliates such that the travel
agencies assume affiliate roles and receive electronic payments
via the separate system based on the commissions;
associating, by the system computing device, the affiliate
identifier with an online advertisement provided as a part of the
online advertising campaign by integrating the affiliate identifier
with an advertisement identifier of the online advertisement;
receiving, by the system computing device, a user-initiated
transaction over the data network and associated with the
2 We refer to the Specification, filed April 14, 2005 ("Spec."); the Final
Office Action, mailed August 15, 2016 ("Final Act."); Appeal Brief, filed
March 16, 2017 ("Br."); and the Examiner's Answer, mailed May 24, 2017
("Ans.").
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merchant in response to the online advertisement of the affiliate,
the user-initiated transaction comprising a tracking identifier
configured to trace the user-initiated transaction to the online
advertisement of the affiliate;
determining, by the system computing device, that the
user-initiated transaction is associated with the affiliate based on
the tracking identifier and the affiliate identifier;
receiving, by the system computing device, a confirmation
that the user-initiated transaction yielded a consumed
transaction, the consumed transaction including (i) an online
payment for a corresponding product or service offered by the
merchant and (ii) consumption of the corresponding product or
service and being associated with the corresponding affiliate
identifier;
receiving, by the system computing device from a
computing device over the data network, a commission provided
on behalf of the merchant and associated with the user-initiated
transaction in response to receiving the confirmation;
associating, by the system computing device, the
commission with the affiliate based on the determining that the
user-initiated transaction is associated with the affiliate;
forming an aggregated commission, by the system
computing device, by depositing the commission in a central
electronic fund storing a plurality of commissions, aggregating
the commission with the plurality of commissions, and storing
the aggregated commission in the central electronic fund,
wherein the plurality of commissions are received by the system
computing device and are provided on behalf of the merchant,
wherein each commission of the plurality of commissions
corresponds to a different affiliate of a plurality of affiliates and
is associated with an online advertising campaign of the different
affiliate, wherein the central electronic fund is configured to
enable the aggregated commission to be shared between the
online advertising campaign of the affiliate and respective online
advertising campaigns of the plurality of affiliates, wherein the
online advertising campaign and the respective online
advertising campaigns form a plurality of online advertising
campaigns;
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determining, by the system computing device, an
electronic payment for the affiliate from the aggregated
commission based on compensation terms associated with the
affiliate, an allocation of the aggregated commission between the
affiliate and the plurality of affiliates from the central electronic
fund, and a value of the user-initiated transaction;
sending, by the system computing device, the electronic
payment to a computing device of the affiliate based on the
affiliate identifier;
determining, by the system computing device, a surplus
fund from the aggregated commission after completing the
electronic payment for the affiliate, the surplus fund available
from the central electronic fund; and
reallocating, by the system computing device, the surplus
fund from the central electronic fund across the plurality of
online advertising campaigns of the affiliate and the plurality of
affiliates based on performance variables of the plurality of
online advertising campaigns, wherein a performance variable of
the online advertising campaign of the affiliate is measured based
on the commission and on the value of the user-initiated
transaction, wherein the reallocating the surplus fund comprises:
automatically reallocating a portion of the surplus fund
equivalent to an amount previously budgeted for a second online
advertising campaign of a second affiliate of the plurality of
affiliates to the online advertising campaign of the affiliate based
on the performance variable of the online advertising campaign
of the affiliate and on a second performance variable of the
second online advertising campaign of the second affiliate,
wherein the automatic reallocation self-funds the online
advertising campaign of the affiliate based on the performance
variables and the affiliate identifier and without input of the
administrator or the affiliate for funding the online advertising
campaign.
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REJECTIONS
The Examiner made the following rejections3:
Claims 1-17, 21, 23 and 24 stand rejected under 35 U.S.C. § 101
because the claimed invention is directed to a judicial exception without
significantly more. Final Act. 11-14.
Claims 1-17, 21, 23 and 24 stand rejected under 35 U.S.C. § 112, first
paragraph, as failing to comply with the written description requirement.
Final Act. 14--16.
ANALYSIS
Appellants' contentions are unpersuasive of reversible Examiner error.
We adopt as our own (1) the findings and reasons set forth by the Examiner
in the action from which this appeal is taken (Final Act. 2-8, 11-16), and
(2) the reasons set forth by the Examiner in the Examiner's Answer in
response to Appellants' Appeal Brief (Ans. 2-35), and concur with the
conclusions reached by the Examiner. We highlight the following for
emphasis.
§ 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.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: "[l]aws of nature, natural phenomena, and abstract
3 The rejection of claims 1-17, 21, 23, and 24 under 35 U.S.C. § 103(a), has
been withdrawn. Ans. 6.
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ideas" are not patentable. E.g., Alice Corp. 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 Mayo
and 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 ( Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 192
( 1981) ); "tanning, dyeing, making waterproof cloth, vulcanizing India
rubber, smelting ores" (id. at 184 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267---68 (1854))); 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
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mathematical formula." Diehr, 450 U.S. at 176; see also id. at 192 ("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.").
If the claim is "directed to" an abstract idea, we tum to the second
step of the Alice and Mayo 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).
"[M]erely requir[ing] generic computer implementation[] fail[ s] to transform
that abstract idea into a patent-eligible invention." Id.
The PTO recently published revised guidance on the application of
§ 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed.
Reg. 50 (Jan. 7, 2019) ("Memorandum"). Under that guidance, we first look
to whether the claim recites:
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(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 MPEP § 2106.05(a}-(c), (e}-(h)).
See Memorandum, 84 Fed. Reg. at 52, 54--55.
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 Memorandum, 84 Fed. Reg. at 56.
Here, the Examiner determines the claims are directed towards:
the idea of commissions for referring a user that completes a
purchase and reallocating resources based on those commissions
( e.g. in order to increase revenue) .... [which] is a fundamental
economic practice and hence the claims include [an] abstract
idea.
Final Act. 12. The Examiner compares the concept recited by the claims
with precedential cases in which courts determined similar concepts to be
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abstract. Id. at 12-13 (citing Ultramercial, 4 Dealertrack, 5 and buySAFE6,7).
In connection with the second step of the Alice/ Mayo analysis, the Examiner
determines "[t ]he claims do not include additional elements that are
sufficient to amount to significantly more than the judicial exception." Id. at
13. In particular, the Examiner determines the additional elements of
implementing the otherwise abstract idea on a computer and limiting the use
to a particular technical environment (i.e., online travel computers) is recited
at a high level of generality "requiring no more than a generic computer for
perform[ing] generic computer functions that are well-understood, routine,
and conventional activities previously known to the industry." Id. at 13-14.
Prima Facie Case of Subject Matter Ineligibility
a. Argument: The Examiner does not provide any reasoned rationale
for why the claims are directed to a judicial exception
Appellants contend the Examiner has failed to clearly articulate the
reasons why the claimed invention is not patent eligible. Br. 23 ( citing the
"July 2015 Update: Subject Matter Eligibility" to 2014 Interim Guidance on
4 Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014)
( claims merely reciting abstract idea of using advertising as currency as
applied to particular technological environment of the Internet not patent
eligible).
5 Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012) (claims
directed to abstract idea of processing loan information through
a clearinghouse).
6 buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1354--55 (Fed. Cir. 2014)
( claims directed to creating a contractual relationship----a "'transaction
performance guaranty"' deemed abstract).
7 Although the Examiner also cites to SmartGene, Inc. v. Advanced
Biological Laboratories, S.A., 555 Fed. App'x 950, 954--56 (Fed. Cir. 2014)
( claims drawn to abstract idea of comparing new and stored information and
using rules to identify options) (Final Act. 12), the reference to that decision
is later removed (Ans. 16).
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Subject Matter Eligibility (2014 IEG), 79 Fed. Reg. 74618 (Dec. 16, 2014)
(hereinafter the "July 2015 Update" to the "Interim Guidance,"
respectively)). Appellants assert the Examiner had not provided sufficient
evidence on which to base a determination that the claims are directed to a
judicial exception. Id. (citing Ex parte Poisson, Appeal 2012-011084
(PTAB Feb. 27, 2015) (non-precedential)). According to Appellants, the
Examiner's characterization of the claims is an improper oversimplification
that ignores significant features and fails to consider the claims as a whole.
Id. at 24. Appellants argue the Examiner fails to "explain how the ...
claimed features amount to the alleged abstract idea of 'commissions for
referring a user that completes a purchase and reallocating resources based
on those commissions' [or] fall under or are similar to the example of a 'sale
at home products where a referrer hosts a party at someone's home and
people buy products from a company."' Id. at 25. Likewise, Appellants
argue "the Examiner has failed to substantiate her position that the above
claimed elements are properly comparable to the 'home sale product
example."' Id. According to Appellants, "the Examiner does not provide
any substantiated support for why the ... claimed features are found to be a
fundamental economic practice" and, lacking the allegedly missing
"rationale or evidential support, the [Examiner's characterization of the
claims] is merely the Examiner's opinion." Id.
The Examiner responds, characterizing Appellants' contention as
"argu[ ment] that the claims are not directed towards an abstract idea because
the claims include elements beyond the abstract idea," which "combin[es]
steps [1 (determining whether the claims are directed to an abstract idea)]
and [2 ( determining whether the additional elements transform the nature of
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the claim into a patent-eligible application)] into one step, rather than two
steps." Ans. 9. According to the Examiner, Appellants fail to identify a
specific limitation that would distinguish the claims from an abstract idea.
Id. at 11. The Examiner further disagrees there was a failure to present a
prima facie case of ineligibility, and the Examiner states that the Final
Action included "a reasoned rationale that identifies the judicial exception
recited in the claim and why it is considered an exception" such that
Appellants have "sufficient notice and [are] able to effectively respond." Id.
at 13.
Appellants' contentions are unpersuasive. The Federal Circuit has
repeatedly noted that "the prima facie case is merely a procedural device that
enables an appropriate shift of the burden of production." Hyatt v. Dudas,
492 F.3d 1365, 1369 (Fed. Cir. 2007) (citing In re Oetiker, 977 F.2d 1443,
1445 (Fed. Cir. 1992)). The court has, thus, held that the Office carries its
procedural burden of establishing a prima facie case when its rejection
satisfies the requirements of 35 U.S.C. § 132 by notifying the applicant of
the reasons for rejection, "together with such information and references as
may be useful in judging of the propriety of continuing the prosecution of
[the] application." In re Jung, 637 F.3d 1356, 1362 (Fed. Cir. 2011). All
that is required of the Office is that it set forth the statutory basis of the
rejection in a sufficiently articulate and informative manner as to meet the
notice requirement of§ 132. Id.; see also Chester v. Miller, 906 F.2d 1574,
1578 (Fed. Cir. 1990) (noting that§ 132 "is violated when a rejection is so
uninformative that it prevents the applicant from recognizing and seeking to
counter the grounds for rejection").
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Here, in rejecting the pending claims under § 101, the Examiner
analyzed the claims using the Mayol Alice two-step framework, consistent
with the then available guidance set forth in the USPTO's Interim Guidance.
Specifically, the Examiner notified Appellants that claims 1-17, 21, 23, and
24 are directed to "commissions for referring a user that completes a
purchase and reallocating resources based on those commissions," and that
such commissions are "a fundamental economic practice and hence the
claims include [an] abstract idea." Final Act. 3, 6, 12; Ans. 3.
The Examiner's characterization is fully consistent with Appellants'
Specification. For example, Appellants' application is entitled "Self-Funded
Commission Management System" (Spec., Title) wherein "[a] user-initiated
transaction is received as a result of a referral from an affiliate" (Spec. ,r 4),
including a "self-funded commission system 100 [which] can reallocate
resources across multiple advertising campaigns ... based on performance
variables" (Spec. ,r 27). According to the Specification, the system
reallocates surplus funds from one advertising campaign to an advertising
campaign performing outside of desired metrics. Id.
The Examiner characterizes the claims as directed to fundamental
economic practices such as creating a contractual relationship as in buySAFE
(Final Act. 13; Ans. 3), i.e., certain methods of organizing human activity,
and the claims further include aspects directed to other methods of
organizing human activity, including activities relating to commercial or
legal interactions, e.g., advertising, marketing, and sales activities or
behaviors as in Ultramercial (id.), as cited by the Examiner. In contrast,
Appellants provide insufficient evidence or argument to persuade us the
Examiner's characterization of the claims is inconsistent with Appellants'
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disclosure and, therefore, that the Examiner erred in determining the claims
are directed to a judicial exception.
Having determined the claims are directed to an abstract idea under
prong 1 of the Memorandum, we consider whether the abstract idea has been
integrated into a practical application under prong 2. For the reasons
discussed by the Examiner (Final Act. 13-14), the abstract idea has not been
integrated into a practical application. In particular, the additional elements
of a system computing device and data network merely require use of a
computer and data transmission facilities as tools to perform the abstract
idea identified by the Examiner, i.e., providing commissions for referring a
user that completes a purchase and reallocating resources based on those
commissions. Other than automating implementation of the abstract idea,
the claims fail to reflect an improvement in the functioning of a computer or
to other technology or technical field, integrate a particular machine into the
claims, or otherwise require additional elements integrating the judicial
exception into a practical application.
We are also not persuaded the Examiner's characterization of the
claims is an oversimplification. Br. 25. In articulating the subject matter to
which the claims are directed, we note "[ a ]n abstract idea can generally be
described at different levels of abstraction." Apple, Inc. v. Ameranth, Inc.,
842 F.3d 1229, 1240-41 (Fed. Cir. 2016). There is no definitive rule to
determine what constitutes an "abstract idea." Rather, our reviewing court
has explained that "both [the Federal Circuit] and the Supreme Court have
found it sufficient to compare claims at issue to those claims already found
to be directed to an abstract idea in previous cases." Enfzsh, LLC v.
Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. 2016). In that regard, we
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agree with the Examiner that claim 1, when viewed as a whole, is similar to
the ideas identified as abstract in Ultramercial, Dealertrack, and buySAFE
(Final Act. 12-13; Ans. 3), and to other cases directed to sales activities such
as targeted advertising based on demographic information provided by the
user as in Affinity Labs of Texas, LLC v. Amazon.com Inc., 838 F.3d 1266,
1271 (Fed. Cir. 2016).
b. Argument: The Examiner does not properly rely on any legal
precedent
Appellants contend the cases cited by the Examiner in determining
Appellants' claims recite concepts similar to those found by the courts to be
abstract fail to provide support for a similar finding in the instant appeal.
First Appellants argue the Examiner's reliance on SmartGene is improper
because the case is not precedential. As "the Examiner has removed the
reference to SmartGene in the 101 rejection" (Ans. 16), the issue is rendered
moot.
Appellants further argue "the Examiner does not properly compare the
claimed concepts to any prior court decision." Br. 27 (citing the Interim
Guidance). According to Appellants, the Examiner "does not explain how
the claimed features are comparable to the claims or concepts at issue in
these court decisions." Id. The Examiner responds, noting that a
comparison was provided at pages 12-13 of the Final Action. Ans. 16-17.
Appellants' argument is unpersuasive of Examiner error. We
determine that the Examiner's mapping of the claims to the features
determined to constitute abstract ideas provides the disputed explanation of
why Appellants' claims likewise constitute abstract ideas. Final Act. 12-13.
In particular, we disagree the Examiner has failed to properly compare the
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claimed concepts to any prior court decision. Br. 27-28. As explained
above, the Examiner compares Appellants' claims to the ideas identified as
abstract in Ultramercial, Dealertrack, and buySAFE (Final Act. 12-13; Ans.
3, 16-17). We also disagree it is improper to "reject[] a claim over a
combination of multiple abstract ideas where the abstract ideas are
selectively applied to the limitations of the claim." Br. 28. Merely
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 (math) 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) (determining the
pending claims were directed to a combination of abstract ideas).
Step 1 (Prong 1)
a. Argument: The claims are not directed to an abstract idea because
they improve a computer-related technology
Appellants argue the claims address a computer-related problem by
repurposing an existing system using a particular affiliate identifier to track
affiliates' commissions. Br. 32. According to Appellants, the subject claims
are analogous to those found to be patent-eligible in McRO, 8 BASCOM, 9 and
Enfzsh. Id. at 30. The Examiner responds, distinguishing the present claims
over those held to encompass "computer-related technology by allowing
computer performance of a function not previously performable by a
computer." Rather than addressing a computer-related problem as argued by
Appellants, the Examiner determines the claims are "directed towards the
8 McRO, Inc. v. Bandai Namco Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016).
9 BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341
(Fed. Cir. 2016).
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abstract idea of commissions for referring a user that completes a purchase
and reallocating resources based on those commissions ( e.g. in order to
increase revenue)." Ans. 21. According to the Examiner, the claims include
tracking referrals based on identifying referrals using information ( e.g., a
name) that is formatted based on a separate system. Id. The Examiner notes
that repurposing information such as a name is not a problem particular to
computers but, instead, is a technique existing "long before being involved
in the referral system." Id. at 22.
Appellants' contention is unpersuasive. We agree with the Examiner
that use of information formatted based on a separate system, absent some
underlying technical reason, is not a technological problem, and Appellants
have failed to provide sufficient evidence or argument to persuade us
otherwise. In particular, Appellants' Specification discloses the pseudo-
IAT A schema as an example of a standardized format for an affiliate
identifier that is patterned after the International Air Transport Association
number or IATA. Spec. 20. Thus, the claimed "format" requirement is
merely one system adopting an identifier provided by another system. As
explained by the Examiner, this is no more than using a previously given
name by another system for the purpose of identification of some entity such
as the claimed affiliate. Designations such as names have long been
assigned to people, animals, and other items and objects, and these
designations including names were subsequently adopted by others for
purposes of identifying the person or item in various situations and contexts.
Thus, Appellants fail to persuade us reuse of a name is a technological
problem unique or special to computers as opposed to a feature of the
underlying abstract idea.
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We are also unpersuaded by Appellants' citations to prior decisions
determining claims to be directed to patent-eligible subject matter because
the cited decisions address subject matter distinguishable over the
Appellants' invention. In particular, the claims in McRO recited a "specific
... improvement in computer animation" using "unconventional rules that
relate[d] sub-sequences of phonemes, timings, and morph weight sets."
McRO, 837 F.3d at 1302---03, 1307---08, 1314--15. Moreover, it was not the
mere presence of unconventional rules in McRO that led to patent eligibility;
rather, it was that the rules were used "in a process specifically designed to
achieve an improved technological result." Id. at 1316. Here, Appellants
have not shown how "the claimed solution involv[ing] using a particular
identifiers, central fund, parameters for allocating a payment, and automated
reallocation of surplus funds for online advertising campaigns" (Br. 32-33)
achieves an improved technological result.
Appellant's reliance on BASCOM, 827 F.3d at 1350, is also
unpersuasive. App. Br. 30. In BASCOM, the court determined that "an
inventive concept can be found in the non-conventional and non-generic
arrangement of known, conventional pieces." BASCOM, 827 F.3d at 1350.
In that case, the installation of a filtering tool at a specific location, remote
from the end users, with customizable filtering features specific to each end
user, provided an inventive concept in that it gave the filtering tool both the
benefits of a filter on a local computer and the benefits of a filter on the ISP
server. Id. We find no analogous achievement of a technical improvement
here. Instead, the claims recite results-focused limitations of assigning an
affiliate identifier using a format of another system, associating the identifier
with an online advertisement, receiving a transaction and confirmation the
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transaction was completed (i.e., "consumed"), receiving a commission
related to the transaction, associating the transaction with the affiliate,
forming an aggregated commission for the merchant for each of its affiliates,
determining and sending a payment due the affiliate, determining a surplus
fund remaining after the payment is completed, and reallocating the surplus
fund across online advertising campaigns of the affiliates based on
performance variable of the online advertising campaigns. None of these
steps have been shown to address a technological problem much less a
problem specific to a computing device or online transactions and
advertising. Accordingly, Appellants' reliance on BASCOM is inapposite
and, therefore, unpersuasive of Examiner error.
b. Argument: The claims are not directed to abstract ideas because
they recite a particular solution to a problem or a particular way
to achieve a desired outcome
Appellants argue, "[l]ike McRO, [the claim] limitations (as opposed to
the mere recitation of a computer) resolve the problem in a particular way
and achieve the desired outcome." Br. 34. According to Appellants, these
limitations "allow the efficient and timely management of online advertising
campaigns by automating the process of allocating payments and surplus
funds across the online advertising campaigns." Id. The Examiner
responds, distinguishing Appellants' claims over those held patent-eligible
in McRO because "the present application does not discuss an improvement
in computer-related technology by allowing computer performance of a
function not previously performable by a computer, as in McRO." Ans. 24.
We are not persuaded of Examiner error. The argued limitations
merely limit the use of the abstract idea to a particular technological
environment, which the Court made clear in Alice is insufficient to transform
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an otherwise patent-ineligible abstract idea into patent-eligible subject
matter. See Alice, 573 U.S. at 223.
c. Argument: The claims do not preempt other means for practicing
the alleged abstract idea
Appellants contend "[i]n McRO, the court found the claims to be
subject matter eligible because they recite a specific means or method and
do not preempt other approaches for the desired result." Br. 34. According
to Appellants "[b ]ecause the claimed solution does not preempt other
implementations of the alleged abstract idea, the 35 U.S.C. § 101 [rejection]
should be withdrawn." Id. The Examiner responds, citing to Robert W.
Bahr, Memorandum--Recent Subject Matter Eligibility Decisions (McRO,
Inc. dba Planet Blue v. Bandai Namco Games America Inc., BASCOM
Global Internet Services v. AT&T Mobility LLC, and Amdocs (Israel) Ltd. v.
Openet Telecom, Inc.), United States Patent and Trademark Office
(November 2, 2016) as providing guidance explaining the lack of pre-
emption is not dispositive of patent eligibility. Ans. 25.
Appellants' pre-emption argument is unpersuasive. As indicated by
the Examiner (Ans. 25), although preemption "'might tend to impede
innovation more than it would tend to promote it,' thereby thwarting the
primary object of the patent laws" (Alice, 573 U.S. at 216 (quoting Mayo,
566 U.S. at 71)), "the absence of complete preemption does not demonstrate
patent eligibility" (Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d
1371, 1379 (Fed. Cir. 2015)). See also OIP Techs., Inc. v. Amazon.com,
Inc., 788 F.3d 1359, 1362---63 (Fed. Cir. 2015) ("[T]hat the claims do not
preempt all price optimization or may be limited to price optimization in the
e-commerce setting do not make them any less abstract.").
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d. Argument: The claims do not meet the requirements for the
fundamental economic practice judicial exception
Appellants contend the Examiner errs in determining the claims are
directed to a fundamental economic practice because "[t]he claims involve
using specific operations performed via a computing system to automate the
collection of commissions and the disbursement of payments and surplus
funds across online advertising campaigns." Br. 35. Appellants argue
"[ n Jone of [the] claimed elements is a fundamental economic practice
because neither the claimed elements themselves nor the combination of
these elements relate to agreements between people in the form of contracts,
legal obligations, and business relations." Id. at 36. The Examiner
responds, finding Appellants' contention unpersuasive because it is based on
the false premise "that the claims are not directed towards an abstract idea of
a fundamental economic practice because the claims include elements
beyond the abstract idea of a fundamental economic practice." Ans. 28. As
explained by the Examiner, such argument emphasizing the technical
implementation of the idea conflates "steps 2A and step 2B of subject matter
eligibility tests for products and processes." Id.
We agree with the Examiner. As explained above, Appellants' claims
are directed to a self-funded commission management system (Spec., Title)
and, in particular, "commissions for referring a user that completes a
purchase and reallocating resources based on those commissions ( e.g. in
order to increase revenue)." Final Act. 12. Given the claims and
specification here and the Examiner's rational explanation of the intrinsic
evidence, Appellants provide insufficient evidence or argument to persuade
us that reallocating advertising resources is not a fundamental economic
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practice and/or other method of organizing human activity including
commercial or legal interactions. Accordingly, we agree with the
Examiner's determination that the claims are directed to an abstract idea.
Step 1 (Prong 2)
Under prong 2 we determine whether an additional element ( or
combination of elements) may have integrated the exception into a practical
application. Memorandum, 84 Fed. Reg. at 54--55. Although, as part of the
guidance provided by the recently issued Memorandum, this prong was not
explicitly discussed as a separate consideration during the prior prosecution
of Appellants' application, the relevant facts and considerations have been
addressed and discussed. That is, for the reasons discussed above, the
claims do not recite an additional element that reflects an improvement in
the functioning of a computer, or an improvement to other technology or
technical field. See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245,
1258-59 (Fed. Cir. 2014). Instead, certain claim limitations (e.g., receiving
transaction information and reallocating surplus funds) only recite additional
elements that add insignificant extra-solution activity to the judicial
exception. See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366,
1375 (Fed. Cir. 2011). As discussed further below, the remaining claim
elements only recite generic computer components that are well-understood,
routine, and conventional. See Alice, 573 U.S. at 225
Step 2
Argument: The claimed solution is necessarily rooted in computer
technology in order to overcome a problem specifically arising in the realm
of computer networks
Appellants contend:
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[I]n the instant application, the claimed solution is necessarily
rooted in computer technology ( e.g., using affiliate identifiers
having particular formats to track comm1ss10ns and
automatically reallocate surplus funds across multiple online
advertising campaigns) in order to overcome a problem
specifically arising in the realm of computer networks (e.g., the
efficiency and timeliness involved with managing the online
advertising campaigns). In particular, the claims do not simply
take an abstract business method from the pre-Internet world and
implement it on a computer.
Br. 39. Appellants argue, as in BASCOM, the instant claims include a non-
conventional and non-generic arrangement of known, conventional pieces
that are significantly more than the underlying abstract idea. Id. According
to Appellants "the Examiner does not consider the claimed elements in
combination such that the claims are analyzed as a whole. A proper analysis
under step 2B demonstrates that the claims recite[] elements that are
significantly more than the alleged abstract idea." Id.
The Examiner responds, finding "the idea of commissions for
referring a user that completes a purchase and reallocating resources based
on those commissions (e.g. in order to increase revenue) is [an] idea that
existed before and still exists outside the realm of computer technology."
Ans. 32. The Examiner dismisses Appellants' argument that the claimed
automatic reallocation of surplus funds across multiple online advertising
campaigns is a feature rooted in computer technology, finding such
automatic reallocation is a "well-understood, routine, and conventional
activit[y] previously known to the industry, specified at a high level of
generality" that is insufficient to transform the nature of the claim into a
patent-eligible application. Id. at 33-34.
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Appellants' contentions are unpersuasive of Examiner error. Other
than conclusory statements alleging the additional elements constitute
significantly more than the underlying abstract idea, Appellants provide
insufficient evidence or argument to identify any such elements or persuade
us the claims otherwise include eligible subject matter. Although the claims
require a system computing device and the provision of an online advertising
campaign over a data network, the system computing device is disclosed
only as "any special purpose or general purpose processor capable of
executing instructions within software stored on the memory element 114."
Spec. ,r 14. Likewise, the data network is described at a high level of
generality as "a local area network, wide area network, wireless network, the
Internet, or some other suitable media." Id. ,r 15. These generic recitations
of a computer system, processor, memory and communication network
performing basic, generic computer and data communication functions do
not amount to significantly more than the judicial exception, and Appellants
fail to direct attention to evidence that these elements are other than generic
components. Instead, we agree with the Examiner that the recited computer
and network elements are well-understood, routine, or conventional as found
in prior relevant court decisions. See Bancorp Servs., L.L. C. v. Sun Life
Assurance Co. of Can. (US.), 687 F.3d 1266, 1278 (Fed. Cir. 2012) (a
computer "employed only for its most basic function ... does not impose
meaningful limits on the scope of those claims"); Lending Tree, LLC v.
Zillow, Inc., 656 F. App'x 991, 997 (Fed. Cir. 2016) (holding ineligible
claims to a computerized method of speeding up a loan-application process);
Alice, 573 U.S. at 223 ("[T]he mere recitation of a generic computer cannot
transform a patent-ineligible abstract idea into a patent-eligible invention");
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OIP Techs., 788 F.3d at 1363 ("[R]elying on a computer to perform routine
tasks more quickly or more accurately is insufficient to render a claim patent
eligible."); buySAFE, 765 F.3d at 1355 ("That a computer receives and
sends the information over a network-with no further specification-is not
even arguably inventive."); Ultramercial, 772 F.3d at 715-16 (claims
merely reciting abstract idea of using advertising as currency as applied to
particular technological environment of the Internet not patent eligible).
Accordingly, we agree with the Examiner in determining the additional
claim elements fail to transform the abstract idea into patent-eligible subject
matter, and we sustain the rejection of claims 1-1 7, 21, 23 and 24 under 3 5
U.S.C. § 101 as directed to a judicial exception without significantly more.
§ 112, first paragraph
The Examiner finds the Specification fails to provide written
description support for the limitation "wherein the automatic reallocation
self-funds the online advertising campaign of the affiliate based on the
performance variables and the affiliate identifier and without input of the
administrator or the affiliate." Final Act. 15. According to the Examiner,
the Specification discloses that performance variables are set by the
merchant or administrator and, because the disputed automatic reallocation
is based on these performance variables, the reallocation is also dependent
on input by the merchant or administrator, i.e., the reallocation step is not
without administrator or affiliate input. Final Act. 15-16. Appellants
contend the disclosed merchant or administrator input is received during
system set-up but does not "relate[] to the automated reallocation once the
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aggregated commission has been formed and surplus fund has been
determined." Br. 22.
Appellants' contention is unpersuasive of Examiner error. To satisfy
the written description requirement under 35 U.S.C. § 112(a), "the disclosure
of the application relied upon [must] reasonably convey[] to those skilled in
the art that the inventor had possession of the claimed subject matter as of
the filing date." Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351
(Fed. Cir. 2010) (en bane) (citations omitted); see also Vas-Cath Inc. v.
Mahurkar, 935 F.2d 1555, 1563---64 (Fed. Cir. 1991) ("[T]he applicant must
... convey with reasonable clarity to those skilled in the art that, as of the
filing date sought, he or she was in possession of the invention.").
Claim 1 is directed to "[a] method for generating self-funded
commission management for affiliates providing online advertising
campaigns targeted to users for products or services offered by merchants
associated with a travel industry." The method includes multiple steps
including a step of reallocating surplus funds across advertising campaigns
including automatically reallocating a portion of the surplus fund based on
various factors "wherein the automatic reallocation self-funds the online
advertising campaign of the affiliate based on the performance variables and
the affiliate identifier and without input of the administrator or the affiliate
for funding the online advertising campaign." It is not clear if the "without"
language is limited to only the reallocation step so as to permit administrator
or affiliate input in establishing the performance variables which control the
reallocation step, or if the claim excludes the use of performance variables
that had such input even if the automatic reallocation itself does not.
However, in either case, because a failure to disclose administrator or
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affiliate input as part of the automatic reallocation step is not equivalent to
an affirmative disclosure of excluding such input, we agree there is
inadequate written description support for the disputed limitation explicitly
excluding such input. Accordingly, we sustain the rejection of claims 1-17,
21, 23 and 24 under 35 U.S.C. § 112, first paragraph.
DECISION
We affirm the Examiner's decision to reject claims 1-17, 21, 23 and
24 under 35 U.S.C. § 101.
We affirm the Examiner's decision to reject claims 1-17, 21, 23 and
24 under 35 U.S.C. § 112, first paragraph.
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). See 37
C.F.R. § 41.50(±).
AFFIRMED
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