Ex Parte Plow et al

Patent Trial and Appeal Board

Feb 7, 2017

13770758 (P.T.A.B. Feb. 7, 2017)

United States Patent and Trademark Office
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
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
13/770,758 02/19/2013 Gregory M. PLOW SVL920050148US3/A10992 9061
46159 7590 02/07/2017
SUGHRUE MION PLLC
USPTO CUSTOMER NO WITH IBM/SVL
2100 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, DC 20037
EXAMINER
MARCUS, LELAND R
ART UNIT PAPER NUMBER
3623
MAIL DATE DELIVERY MODE
02/07/2017 PAPER
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte GREGORY M. PLOW and FARROKH E. POURMIRZAIE
Appeal 2015-0019901
Application 13/770,7582
Technology Center 3600
Before JOSEPH A. FISCHETTI, NINA L. MEDLOCK, and
KENNETH G. SCHOPFER, Administrative Patent Judges.
MEDLOCK, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner’s final
rejection of claims 1—4, 9, 13, 17—21, 23, 24, 30, 34, 35, 37—39, 66, 77, 88,
and 100. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 Our decision references Appellants’ Appeal Brief (“App. Br.,” filed
May 19, 2014) and Reply Brief (“Reply Br.,” filed November 12, 2014), and
the Examiner’s Answer (“Ans.,” mailed September 11, 2014) and Final
Office Action (“Final Act.,” mailed December 17, 2013).
2 Appellants identify International Business Machines Corporation as the
real party in interest. App. Br. 2.
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Application 13/770,758
CLAIMED INVENTION
Appellants’ claimed invention “relates to systems and methods for
extracting value from a portfolio of assets” (Spec. 12).
Claims 1, 66, 77, 88, and 100 are the independent claims on appeal.
Claims 1 and 100, reproduced below, are illustrative:
1. A computer program product comprising a
permanent and durable computer useable medium having a
computer readable program, wherein the computer readable
program when executed on a computer causes the computer to
execute a method for extracting value from a portfolio of assets,
the method comprising:
granting a privilege to a second party by a first party at
time tl, wherein exercise of the privilege is conditioned upon an
occurrence of a predetermined event occurring at time t2 where
t2>tl, wherein the privilege comprises a right to obtain an interest
in one or more assets residing in a dynamic pool of assets
comprised of assets from the portfolio of assets at time t2,
wherein the assets residing in the dynamic pool of assets at time
t2 may be different from the assets residing in the dynamic pool
of assets at time tl, and wherein a computer stores information
concerning the dynamic pool of assets in a computer readable
memory.
100. A computer program product comprising a
permanent and durable computer useable medium having a
computer readable program, wherein the computer readable
program when executed on a computer causes the computer to
execute a method for extracting value from a dynamic pool of
assets, the method comprising:
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granting to a second party by a first party a conditional
right to i) obtain an interest in a patent from among a pool of
patents in which the first party holds an interest and ii) enforce
the patent in a counterclaim suit against a third party that alleges
infringement of a third party patent in which the third party holds
an interest, wherein exercise of the conditional right is
conditioned upon an occurrence of the third party alleging
infringement by the second party of the third party patent;
recording in a database an indication of the conditional
right granted to the second party; and
providing to the second party a list of patents from among
patents in the pool of patents from which the patent is selected to
enforce in the counterclaim suit against the third party, in
response to the third party alleging infringement by the second
party of the third party patent, based on the indication of the
conditional right recorded in the database.
REJECTIONS
Claims \-A, 9, 13, 17-21, 23, 24, 30, 34, 35, 37-39, 66, 77, 88, and
100 are rejected under 35 U.S.C. § 101 as directed to non-statutory subject
matter.
Claims 1—4, 9, 13, 23, 24, 30, 34, 35, 38, and 39 are rejected under
35 U.S.C. § 103(a) as unpatentable over Malackowski
(US 2010/0262530 Al, pub. Oct. 14, 2010) and Kazanchian
(US 2007/0156462 Al, pub. July 5, 2007).
Claims 17—21, 37, 66, 77, 88, and 100 are rejected under 35 U.S.C.
§ 103(a) as unpatentable over Malackowski, Kazanchian, and Official
Notice.
Claims \-A, 9, 13, 17-21, 23, 24, 30, 34, 35, 37-39, 66, 77, 88, and
100 are rejected on the ground of non-statutory obviousness-type double
patenting as unpatentable over Plow (US 8,386,350 B2, iss. Feb. 26, 2013).
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ANALYSIS
Non-Statutory Subject Matter
Under 35 U.S.C. § 101, an invention is patent-eligible if it claims a
“new and useful process, machine, manufacture, or composition of matter.”
35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101
to include an implicit exception: “[l]aws of nature, natural phenomena, and
abstract ideas” are not patentable. See, e.g., Alice Corp. Pty Ltd. v. CLS
BankInt 7, 134 S. Ct. 2347, 2354 (2014).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus Labs.,
Inc., 132 S. Ct. 1289, 1300 (2012), “for distinguishing patents that claim
laws of nature, natural phenomena, and abstract ideas from those that claim
patent-eligible applications of these concepts.” Alice Corp., 134 S. Ct.
at 2355. The first step in that analysis is to “determine whether the claims at
issue are directed to one of those patent-ineligible concepts,” id., e.g., to an
abstract idea. If the claims are not directed to an abstract idea, the inquiry
ends. Otherwise, the inquiry proceeds to the second step where the elements
of the claims are considered “individually and ‘as an ordered combination”’
to determine whether there are additional elements that “‘transform the
nature of the claim’ into a patent-eligible application.” Alice Corp.,
134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1297).
The Court acknowledged in Mayo, that “all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena,
or abstract ideas.” Mayo, 132 S. Ct. at 1293. We, therefore, look to whether
the claims focus on a specific means or method that improves the relevant
technology or are instead directed to a result or effect that itself is the
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abstract idea and merely invoke generic processes and machinery.
See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).
As the Federal Circuit has instructed, claims are to be considered in their
entirety to determine “whether their character as a whole is directed to
excluded subject matter.” McRO, Inc. v. Bandai Namco Games America,
Inc., 837 F.3d 1299, 1312 (Fed. Cir. 2016) (quoting Internet Patents Corp. v.
Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)).
We are not persuaded, as an initial matter, by Appellants’ argument
that the Examiner has failed to establish a prima facie case of
unpatentability. Appellants ostensibly maintain that, in order to establish a
prima facie case, the Examiner must set forth objective evidence establishing
that extracting value from a portfolio of assets is a fundamental economic
practice and must also set forth “objective evidence or articulated reasoning”
to explain why the elements of the claims are well-understood, routine, or
conventional activities, which fail to provide meaningful limitations that
transform an abstract idea into a patent-eligible application of the abstract
idea ((Reply Br. 4—7). Appellants charge that the Examiner’s rejection here
amounts to conclusory statements unsupported by objective evidence, and
that the section 101 rejection is, therefore, prima facie deficient (id.).
We disagree.
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 held
that the USPTO carries its procedural burden of establishing a prima facie
case when its rejection satisfies the requirements of 35 U.S.C. § 132 by
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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.” See In re Jung, 637 F.3d
1356, 1362 (Fed. Cir. 2011). Thus, all that is required of the Office is that it
set forth the statutory basis of the rejection, and any reference or references
on which the rejection relies, 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) (Section 132 “is violated when
the rejection is so uninformative that it prevents the applicant from
recognizing and seeking to counter the grounds for rejection.”).
Here, in rejecting the pending claims under § 101, the Examiner
analyzed the claims using the Mayo two-step framework, in accordance with
the guidance set forth in the USPTO’s June 25, 2014 “Preliminary
Examination Instructions in view of the Supreme Court Decision in Alice
Corporation Pty. Ltd. v. CLS Bank International, et althe Examiner also
fully complied with the requirement set forth in Manual of Patent Examining
Procedure (“MPEP”) § 2106(111) to “identify and explain in the record the
reasons why a claim is for an abstract idea.” Specifically, the Examiner
notified Appellants that the claims are directed to “extracting value from a
portfolio of assets,” i.e., to a “fundamental economic practice” and,
therefore, to an abstract idea”; that the additional claim elements or
combination of elements in the claims, other than the abstract idea, amount
to no more than “recitation of generic computer structure that serves to
perform generic computer functions that are well-understood, routine, and
conventional activities previously known to the pertinent industry”; and that
these additional claim elements do not provide meaningful limitations that
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transform the abstract idea into a patent-eligible application of the abstract
idea (Ans. 2—3). The Examiner, thus, notified Appellants of the reasons for
the rejection “together with such information and references as may be
useful in judging of the propriety of continuing the prosecution of [the]
application.” 35 U.S.C. § 132. And, in doing so, we find that the Examiner
made a prima facie case of unpatentability.
Appellants do not contend that they did not understand the Examiner’s
new ground of rejection. To the contrary, Appellants’ understanding of the
rejection is manifested by their substantive response to the rejection as set
forth in their Reply Brief (Reply Br. 7—15).
Applying the framework set forth in Alice, and as the first step of that
analysis, we agree with the Examiner that the claims are directed to the
abstract idea of extracting value from a portfolio of assets — a finding that
also is fully consistent with the Specification (see Spec. 12 (stating that the
present invention “relates to systems and methods for extracting value from
a portfolio of assets”)). Claim 1, for example, recites a method comprising
the singular step of granting by a first party to a second party the right, upon
the occurrence of a predetermined event, to exercise a privilege to obtain an
interest in one or more of the assets residing in a pool of assets. Claims 66,
77, 88, and 100, in this regard, are substantially similar.
Claim 1 recites, as do claims 66, 77, 88, and 100, that the claimed
method step is executed by a computer. Yet this step involves no more than
a first party granting an option to a second party to obtain an interest in an
asset — an action that could be performed in the human mind, or by a
human using a pen and paper, without the need of any computer or other
machine.
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The law is clear that “[a] method that can be performed by human
thought alone is merely an abstract idea and is not patent-eligible under
§ 101.” CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372—
73 (Fed. Cir. 2011); see also Gottschalkv. Benson, 409 U.S. 63, 67 (1972)
(“[phenomena of nature . . ., mental processes, and abstract intellectual
concepts are not patentable, as they are the basic tools of scientific and
technological work.”). Moreover, mental processes remain unpatentable
even when automated to reduce the burden on the user of what once could
have been done with pen and paper. CyberSource, 654 F.3d at 1375 (“That
purely mental processes can be unpatentable, even when performed by a
computer, was precisely the holding of the Supreme Court in Gottschalk v.
Benson").
Independent Claims 1, 66, 77, and 88 and Dependent Claims 2—4, 9, 13, 17—
21, 23, 24, 30, 34, 35, and 37-39
Turning to the second step of the Alice analysis, and focusing
specifically on independent claims 1, 66, 77, and 88, Appellants argue that
even if the claims are directed to the abstract idea of “extracting value from
a portfolio of assets,” claims 1, 66, 77, and 88 “pose no risk of pre-empting
the entire field of extracting value from a portfolio of assets” and, as such,
are patent-eligible (Reply Br. 9). Appellants’ argument is not persuasive.
Although the Supreme Court has described “the concern that drives
this exclusionary principle [i.e., the exclusion of abstract ideas from patent
eligible subject matter] as one of pre-emption,” Alice, 134 S. Ct. at 2354,
characterizing pre-emption as a driving concern for patent eligibility is not
the same as characterizing pre-emption as the sole test for patent eligibility.
“The Supreme Court has made clear that the principle of preemption is the
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basis for the judicial exceptions to patentability” and “[f]or this reason,
questions on preemption are inherent in and resolved by the § 101 analysis.”
Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed.
Cir.2015) (citing Alice, 134 S. Ct. at 2354). Yet although “preemption may
signal patent ineligible subject matter, the absence of complete preemption
does not demonstrate patent eligibility.” Id.
Focusing particularly on the language of claim 1, Appellants next
argue that the recited “privilege” amounts to significantly more than the
abstract idea (Reply Br. 9—13). Yet, rather than amounting to “significantly
more,” the privilege is merely part of the abstract idea itself, i.e., it is the
granting of the privilege that allows value to be extracted from the asset
portfolio. The only claim element beyond the abstract idea is the computer,
i.e., a generic component, on which the method of extracting value from the
asset portfolio is performed. And, “after Alice, there can remain no doubt:
recitation of generic computer limitations does not make an otherwise
ineligible claim patent-eligible.” DDR Holdings, LLC v. Hotels.com, L.P.,
773 F.3d 1245, 1256 (Fed. Cir. 2014 (citing Alice Corp., 134 S. Ct.
at 2358)).
Appellants would have us conclude that the claimed “privilege”
amounts to “significantly more” because the privilege is “both
unconventional and effects an improvement in the field of intellectual
property licensing owing to its conditional and dynamic in nature,” i.e.,
exercise of the privilege is conditioned on the occurrence of a predetermined
event, and the assets residing in the asset pool at that time may be different
from the assets residing in the pool at the time the privilege was granted
(Reply Br. 10—13). Yet the conditional and dynamic nature of the privilege
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is merely a reflection of the particular license, i.e., contract, terms that the
claimed first party chose to attach to the privilege. We fail to see how or
why, and Appellants do not adequately explain how or why, the choice of
particular license terms, even if those terms are different from those
conventionally employed, effects an improvement in the field of intellectual
property licensing
In view of the foregoing, we sustain the Examiner’s rejection of
independent claims 1, 66, 77, and 88 under 35 U.S.C. § 101. We also
sustain the rejection of dependent claims 2—4, 9, 13, 17—21, 23, 24, 30, 34,
35, and 37—39, which are not argued separately.
Independent Claim 100
Appellants argue that claim 100 includes additional features that are
significantly more than the abstract idea of “extracting value from a portfolio
of assets,” and that these additional features are even more significant than
the features of claim 1 (Reply Br. 14). Yet the features that Appellants
identify as “significantly more” (i.e., a first party’s grant of a conditional
right to a second party to obtain an interest in a patent in which the first
party has an interest, and to enforce that patent in a counterclaim suit against
a third party alleging infringement by the second party of the third party’s
patent) are merely part of the abstract idea itself. As with claim 1, the only
claim element beyond the abstract idea is the computer, i.e., a generic
component, on which the method of extracting value from the asset portfolio
is performed — this is not enough to make an otherwise ineligible claim
patent-eligible.
We also are not persuaded of Examiner error by Appellants’ further
argument that claim 100 poses no risk of pre-emption to the abstract idea of
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extracting value from a portfolio of assets {id. at 15). As explained above,
the absence of preemption does not demonstrate patent eligibility.
For the foregoing reasons, we sustain the Examiner’s rejection of
claim 100 under 35 U.S.C. § 101.
Obviousness
Independent Claim 1 and Dependent Claims 1—4, 9, 13, 23, 24, 30, 34, 35,
38, and 39
We are persuaded by Appellants’ argument that the Examiner erred in
rejecting independent claim 1 under 35 U.S.C. § 103(a) because neither
Malackowski nor Kazanchian, individually or in combination, discloses or
suggests “granting a privilege to a second party by a first party at time tl,
wherein exercise of the privilege is conditioned upon an occurrence of a
predetermined event occurring at time t2 where t2> tl, [and] wherein the
privilege comprises a right to obtain an interest in one or more assets
residing in a dynamic pool of assets,” as recited in claim 1 (App. Br. 10-15).
Malackowski is directed to an intellectual property (“IP”) trading
exchange for licensing and selling IP, and discloses that the IP may include a
pool of issued patents or pending patent applications (Malackowski 116).
Malackowski discloses that, in one embodiment, an IP owner licenses the IP
to an investment bank in exchange for a cash payment; the investment bank
may then list the IP on the IP trading exchange and sublicense the IP to
perspective buyers (id. at H 21, 22). The IP bank may have the right to
enforce the IP should an infringer not purchase a license from the IP trading
exchange, with the IP owner joining in the enforcement processing, if
desired or necessary {id. at 122). In an alternative embodiment, the IP
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owner performs the listing itself, without the assistance of an IP investment
bank (id. at 121).
Kazanchian is directed to an insurance instrument for providing
insurance coverage for criminal litigation actions brought against a
policyholder (Kazanchian || 6, 7). Kazanchian discloses that the insurance
instrument provides insurance coverage for litigation expenses and
associated costs due to arrest, trial expenses, and costs incurred in defending
the action, including loss of business and personal income (id.).
In rejecting claim 1 under 35 U.S.C. § 103(a), the Examiner relies on
Malackowski as disclosing substantially all of the features of claim 1 (Final
Act. 3). However, the Examiner acknowledges that Malackowski does not
disclose the argued limitation, and the Examiner cites Kazanchian to cure
the deficiency of Malackowski (id. at 2). The Examiner then concludes that
it would have been obvious to a person of ordinary skill in the art at the time
of Appellants’ invention to combine the patent licensing of Malackowski
with the litigation insurance of Kazanchian because the claimed invention is
“simply a combination of old elements, and in the combination each element
performs the same function as it does separately, and the results of the
combination are predictable” (id. at 3 4).
The Examiner reasons that a person of ordinary skill in the art at the
time of Appellants’ invention “would recognize a combination of
Malackowski and Kazanchian was predictably litigation insurance including
the option to acquire a patent license as a defensive measure” (id. at 3). The
Examiner, thus, ostensibly characterizes Malackowsi’s patent license as
insurance against a patent infringement action. However, a patent license is
a mechanism for averting litigation — it is not a compensatory mechanism,
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i.e., insurance, that compensates the licensee for the costs of patent
infringement litigation for the simple reason that no litigation occurs. We
fail to see how or why, and the Examiner does not adequately explain how
or why, a person of ordinary skill in the art would have combined the
litigation insurance, disclosed in Kazanchian, which is a compensatory
medium designed to reimburse a policy holder for losses, and provide
compensation for expenses incurred during a criminal legal matter, with
Malackowsi’s patent license, which conveys the right to practice a patented
invention, to arrive at the argued feature, i.e., to conditionally grant a right to
obtain a patent license.
In view of the foregoing, we do not sustain the Examiner’s rejection
of independent claim 1 under 35 U.S.C. § 103(a). For the same reasons, we
also do not sustain the rejection of dependent claims 1—4, 9, 13, 23, 24, 30,
34, 35, 38, and 39. Cf. In reFritch, 972 F.2d 1260, 1266 (Fed. Cir. 1992)
(“dependent claims are nonobvious if the independent claims from which
they depend are nonobvious”).
Independent Claims 66, 77, 88, and 100
Independent claims 66, 77, 88, and 100 include language substantially
similar to the language of claim 1, and stand rejected based on the same
rationale applied with respect to claim 1 (Final Act. 10). Therefore, we do
not sustain the Examiner’s rejection of independent claims 66, 77, 88, and
100 under 35 U.S.C. § 103(a) for the same reasons set forth above with
respect to claim 1.
Dependent Claims 17—21 and 37
Each of claims 17—21 and 37 ultimately depends from independent
claim 1. The Examiner’s rejection of these dependent claims does not cure
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the deficiency in the rejection of independent claim 1. Therefore, we do not
sustain the Examiner’s rejection of dependent claims 17—21 and 37 under
35 U.S.C. § 103(a) for the same reasons set forth above with respect to
claim 1.
Double Patenting
Appellants do not challenge the Examiner’s double patenting
rejection. Instead, Appellants indicate that they “respectively hold any
further response to the double patenting rejection in abeyance until, the
substantive rejections are overcome” (App. Br. 24). Therefore, the double
patenting rejection is summarily sustained.
DECISION
The Examiner’s rejection of claims 1—4, 9, 13, 17—21, 23, 24, 30, 34,
35, 37—39, 66, 77, 88, and 100 under 35 U.S.C. § 101 is affirmed.
The Examiner’s rejections of claims 1—4, 9, 13, 17—21, 23, 24, 30, 34,
35, 37—39, 66, 77, 88, and 100 under 35 U.S.C. § 103(a) are reversed.
The Examiner’s rejection of claims 1—4, 9, 13, 17—21, 23, 24, 30, 34,
35, 37—39, 66, 77, 88, and 100 on the ground of non-statutory obviousness-
type double patenting is affirmed.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l)(iv).
AFFIRMED
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