Ex Parte SCHNORF et al

Patent Trials and Appeals Board

Apr 3, 2019

13676661 - (D) (P.T.A.B. Apr. 3, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
13/676,661 11/14/2012 Blake SCHNORF
570 7590 04/05/2019
P ANITCH SCHWARZE BELISARIO & NADEL LLP
TWO COMMERCE SQUARE
2001 MARKET STREET, SUITE 2800
PHILADELPHIA, PA 19103
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.
688196-44Ul 5846
EXAMINER
VETTER, DANIEL
ART UNIT PAPER NUMBER
3628
NOTIFICATION DATE DELIVERY MODE
04/05/2019 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):
usptomail@panitchlaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte BLAKE SCHNORF, ARMAND CASTRO, NEIL SHANNON,
and MICHAEL SENGBUSCH 1
Appeal2018-002746
Application 13/67 6,661
Technology Center 3600
Before ROBERT E. NAPPI, ERIC S. FRAHM, and MICHAEL T. CYGAN,
Administrative Patent Judges.
NAPPI, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134(a) of the final
rejection of claims 1 through 16. We have jurisdiction under 35 U.S.C.
§ 6(b ).
We AFFIRM.
INVENTION
The invention is directed to a system for managing logistics sourcing
decisions including shipping rates. Abstract. Claim 1 is illustrative of the
invention and is reproduced below:
1 According to Appellants, the real party in interest is, Elemica, Inc. App.
Br. 1.
Appeal2018-002746
Application 13/676,661
1. A method of managing logistics sourcing decisions including
shipping rates in a logistics management network having a
consignee, a shipper and a plurality of carriers for shipping
freight from the shipper to the consignee, the method
compnsmg:
a) transmitting, by a central server, a shipping bid to the
plurality of carriers, the shipping bid comprising a request to
submit at least carrier shipping rates and carrier shipping
capacities, including shipping lanes for each of the plurality of
carriers;
b) receiving, at the central server, a plurality of bid
responses from the plurality of carriers in response to the
shipping bid, the plurality of bid responses including carrier
information comprising at least a first bid having a first
shipping rate, a first shipping capacity, first shipping lanes and
a first expiration date from a first carrier and a second bid
having a second shipping rate, a second shipping capacity,
second shipping lanes and a second expiration date from a
second carrier;
c) receiving, at the central server, a shipping constraint
from the shipper including at least an origin, a destination, a
description of goods and a business constraint from the shipper
including a favor constraint to favor the first carrier over the
second carrier of the plurality of carriers by weighting the first
shipping rate of the first carrier relative to the second shipping
rate of the second carrier;
d) determining, by the central server, whether the
plurality of bid responses meet the shipping constraint to
identify a plurality of accepted bids of the plurality of bid
responses, the central server determining the plurality of
accepted bids utilizing an optimizer, the optimizer determining
a lowest integer solution to identify the plurality of accepted
bids, the optimizer determining the lowest integer solution to
award a full load to the first carrier for the goods and associated
with the first shipping lanes;
e) storing, at the central server, the plurality of accepted
bids from step ( d) as a plurality of stored accepted bids;
f) receiving, by the central server, a selected bid of the
plurality of accepted bids of step ( e );
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g) determining, by the central server, a booking request
by mining the accepted bids, the determining including
identifying the first carrier associated with the selected bid and
considering the favor constraint;
h) transmitting, by the central server, the booking request
to the first carrier of the plurality of carriers; and
i) receiving, at the central server, tracking information
related to the freight being shipped by the first carrier on at least
one of the first shipping lanes to the consignee including a ship
date when the freight is received by the first carrier and a
receipt date when the freight is delivered to the consignee.
REJECTION AT ISSUE
The Examiner rejected claims 1 through 16 under 35 U.S.C. § 101 for
being directed to patent-ineligible subject matter. Final Act. 3-5. 2
PRINCIPLES OF LAW
Patent-eligible subject matter is defined in 35 U.S.C. § 101 of the
Patent Act, which recites:
Whoever invents or discovers any new and useful
process, machine, manufacture, or composition of matter, or
any new and useful improvement thereof, may obtain a patent
therefor, subject to the conditions and requirements of this title.
There are, however, three judicially created exceptions to the broad
categories of patent-eligible subject matter in 35 U.S.C. § 101: "[l]aws of
nature, natural phenomena, and abstract ideas." Alice Corp. v. CLS Bank
2 Throughout this Opinion, we refer to the Appeal Brief, filed August 15,
2017 ("App. Br."), the Reply Brief ("Reply Br."), filed January 3, 2018, the
Examiner's Answer, mailed November 16, 2017 ("Answer"), and the Final
Office Action, mailed May 18, 2017 ("Final Act.").
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Int'!, 573 U.S. 208, 216 (2014); Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 70 (2012).
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. Alice, 573 U.S. at 217-18 (citing Mayo, 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 water-proof cloth, vulcanizing India
rubber, smelting ores" (id. at 182 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 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.").
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 ( citation 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. USPTO's 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 is directed to a judicial exception because:
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( 1) the claim recites a judicial exception, including certain groupings
of abstract ideas (i.e., mathematical concepts, certain methods of
organizing human activity such as a fundamental economic practice,
or mental processes); and
(2) the claim as a whole fails to recite additional elements that
integrate the judicial exception into a practical application (see MPEP
§ 2106.0S(a}-(c), (e}-(h) (9th ed. 2018).
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 are not
"well-understood, routine, conventional" in the field (see MPEP
§ 2106.0S(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.
ANALYSIS
Abstract Idea.
The Examiner finds that the claims are not patent eligible as they are
directed to a judicial exception without reciting significantly more. Final
Act. 3-5. Specifically, the Examiner finds that the claims are directed to an
abstract idea; in particular, "a method of organizing human activities that
involves basic economic practices ( e.g., commercial
relationships/transactions between a shipper and carrier, bidding/offers,
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acceptance/rejection of bid responses based on business rules/constraints,
tracking shipments)." Final Act. 3--4; Answer 3--4.
Appellants do not contest that the claims recite an abstract idea but
instead assert that the claims "are directed to an ordered combination that is
more than the abstract idea identified by the Examiner of 'optimizing
logistics sourcing transactions decisions.'" App. Br. 3.
We concur with the Examiner's uncontested finding that
representative claim 1 recites a method of organizing human activity ( an
abstract idea). Claim 1 recites limitations "managing logistics sourcing
decisions ... having a consignee, a shipper and a plurality of carriers for
shipping freight" (all of which are human or human organizations). The
method includes steps "a) transmitting ... a shipping bid to the plurality of
carriers" (transmitting an information used in contract formation); b) and c)
which includes steps of receiving information concerning the bid and other
information used in contract formation); "d) determining ... whether the
plurality of bid responses meet the shipping constraint ... utilizing an
optimizer, the optimizer determining a lowest integer solution to award a full
load to the first carrier for the good" ( determine that rules are met for
agreement); and "g) determining ... a booking request" (creating the
contract to have the carrier ship the freight). These limitations, under their
broadest reasonable interpretation recite a process of creating an agreement
between a consignee, shipper and carriers to ship freight, which involves
organizing human activity, which is both a fundamental economic practice
and a commercial or legal interaction. These concepts are similar to those at
issue in OIP Techs, where our reviewing court found claims directed to
concepts of price optimization to be a fundamental economic practice and as
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such constitute an abstract concept. OIP Techs., Inc. v. Amazon.com, Inc.,
788 F.3d 1359, 1362-1363 (Fed. Cir. 2015). See also buySAFE, in which
our reviewing court concluded claims directed to the creation of a
contractual relationship were directed to an abstract idea. buySAFE v.
Google, Inc., 765 F.3d 1350, 1353-54 (Fed. Cir. 2014).
Thus, the claim limitations collectively recite an abstract idea of a
certain method of organizing human activity.
Accordingly, we concur with the Examiner's finding that
representative claim 1 recites an abstract idea.
Practical Application/Significantly more than Abstract Idea.
The Examiner finds that:
The additional elements recited in the independent and
dependent claims beyond further refinements of the abstract
idea identified above (and its attendant insignificant extra-
solution data-gathering and outputting functions) are known
and conventional generic computing elements ("central
server"). Apart from being instructed to perform the abstract
idea itself they only serve to perform well-understood functions
( e.g., receiving, storing, transmitting, and displaying data ... ) .
. . The claims only manipulate abstract data elements. They do
not present improvements to another technological field or the
functioning of the computer itself.
Final Act. 4. Further, the Examiner states:
The Specification further notes that the "central server 18 is not
limited to a specific type or variety of server or any particular
type or variety of hardware" (i1 0031 ). Looking at the
limitations as an ordered combination adds nothing that is not
already present when looking at the elements taken
individually. There is no indication that the combination of
elements improves the functioning of a computer or improves
any other technology. Their collective functions merely provide
conventional computer implementation.
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Final Act. 5.
As discussed above, Appellants argue the claims recite an ordered
combination of elements, which are more than the abstract idea. App. Br. 3.
Specifically, Appellants argue that the claims recite a "central server to
apply a favor constraint" to a first carrier to determine a solution from a
plurality of bids to award a full load to a carrier. App. Br. 3. Appellants
argue this solves a problem with traditional shipping logistics management
methods which were "'labor intensive,' 'difficult to organize' and 'difficult
to optimize"' and further solves the problem of awarding fractional loads to
shippers "which is a sub-optimal solution to the complicated supply chain."
App. Br. 5---6 (citing Specification paragraphs 2 and 76) and Reply Br. 1.
And while Appellants acknowledge that the claimed solution "may, in some
ways, be described as automating a previously-manual process[.] [t]he
proper analysis is to evaluate whether 'the claimed rules, not the use of the
computer, [] 'improved [the] existing technological process' by allowing the
automation of further tasks."' App. Br. 6 ( citing McRO, Inc. v. Bandai
Namco Games America Inc., 837 F.3d 1299, 1314 (Fed. Cir. 2016)).
The Examiner in response states:
These types of improvements to the abstract idea result from
the routine application of computers as tools, not from any
technical innovation. See Intellectual Ventures I LLC v. Capital
One Bank (USA), 792 F.3d 1363, 1367 (Fed. Cir. 2015)
("claiming the improved speed or efficiency inherent with
applying the abstract idea on a computer [ does not] provide a
sufficient inventive concept"); Bancorp Servs., L.L. C. v. Sun
Life Assur. Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir.
2012) ("[T]he fact that the required calculations could be
performed more efficiently via a computer does not materially
alter the patent eligibility of the claimed subject matter.").
"[R ]elying on a computer to perform routine tasks more quickly
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or more accurately is insufficient to render a claim patent
eligible." OIP Technologies, Inc. v. Amazon.com, Inc., 788
F.3d 1359, 1363 (Fed. Cir. 2015) (citing Alice Corp., 134 S. Ct.
at 2359).
Answer4-5.
We concur with the Examiner. We do not consider representative
claim 1 to recite an ordered combination of elements, which transform the
abstract idea to patent eligible subject matter. We first address Appellants'
contention that the claims improve a technological process in a manner
analogous to that in McRO. App. Br. 5---6. Our reviewing court in McRO
reviewed claims which use "a combined order of specific rules that renders
information into a specific format that is then used and applied to create
desired results: a sequence of synchronized, animated characters" McRO,
837 F.3d at 1315. Further the court found that the claims did not "simply
use a computer as a tool to automate conventional activity" but instead uses
the computer to "perform a distinct process" that is carried out in a different
way than the prior non-computer method to improve the technology of (3-D
animation techniques). See McRO, 837 F.3d at 1314--16.
Here, we do not find that the claims recite such an ordered set of rules
carried out in a different way than the non-computer method. As Appellants
state, the claimed solution "may, in some ways, be described as automating a
previously-manual process." App. Br. 6. The use of a favor constraint to
have shipments of full loads and not partial loads, is not a technological
solution to a technological problem, but rather a factor to be considered in
making an economic decision. Neither Appellants' Specification nor
Appellants' arguments have identified this as a solution that cannot be
implemented manually, just that doing so is "labor intensive," difficult to
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organize/optimize and more complicated. As stated by the Examiner,
performing tasks more quickly or accurately through use of a computer does
not typically render a claim patent eligible. Answer 4--5, citing Bancorp and
OIP Technologies. Thus, Appellants' arguments have not persuaded us the
Examiner erred in finding that the claims fail to represent an improvement to
an existing technology.
Appellants additionally argue that the claims are narrowly drawn to
withstand preemption concerns. App. Br. 7-8. Appellants argue that the
claims have been amended to include the favor constraint, which overcame
the anticipation rejection based upon Thomas (US Patent Publication
2002/0116318), and, thus, the claim has been narrowed to withstand the
preemption concern. App. Br. 8 (citing Amdocs (Israel) Ltd. v. Openet
Telecom, Inc., 841 F.3d 1288, 1300--01, 1303 (Fed. Cir. 2016)) and Alice.
The Examiner responds to Appellants' preemption arguments stating
that the preemption concerns are addressed by the two-part Alice/Mayo test
applied in the rejection. Answer 6 (citing Ariosa Diagnostics, Inc. v.
Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) and OIP Techs., Inc).
Further, the Examiner identifies that the argument concerning the
overcoming the art rejection does not have any effect on the eligibility
analysis. Answer 6 (citing Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d
1369, 1376 (Fed. Cir. 2016)).
We concur with the Examiner and are not persuaded by Appellants'
arguments concerning preemption. "While preemption may signal patent
ineligible subject matter, the absence of complete preemption does not
demonstrate patent eligibility." Ariosa Diagnostics, Inc. 788 F.3d at 1379;
see also OIP Techs., Inc. 788 F.3d at 1362 ("[T]hat the claims do not
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preempt all price optimization or may be limited to price optimization in the
e-commerce setting do not make them any less abstract."). Appellants'
further argument grounded in novelty and non-obviousness is not
persuasive, the Examiner has found, and we concur, that the user of favor
constraint is directed to a mathematical business data analysis, which is part
of the fundamental economic practice and a commercial or legal interaction.
Answer 5. Additionally, we note that issues of novelty and non-obviousness
under 35 U.S.C. §§ 102 and 103 may not be substituted for the issue of
subject matter eligibility under 35 U.S.C. § 101. Mayo, 566 U.S. at 91.
Accordingly, we are not persuaded that the claims are eligible subject matter
by Appellants' arguments based on preemption, or on novelty and
nonobviousness.
We next address the issue of whether the claims provide significantly
more that the recited abstract idea. Appellants argue the claims present a
"specific unconventional technological solution" to the problem of finding
efficient distribution of shipping resources. App. Br. 6-7 ( citing Amdocs,
841 F.3d at 1300--01, 1303 and BASCOM Glob. Internet Servs., Inc. v.
AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016)). Specifically,
Appellants argue the solution of using a central service to apply a favor
constraint and utilizing an optimizer to determine a solution to accept bids
for a full load to the first carrier is a unconventional technological solution.
Id. Further, Appellants argue the solution "provide[ s] real-time analysis to
carriers." App. Br. 6.
The Examiner responds stating "[ s ]hipping logistics management" is
commercial venture and not a technology to be improved. Answer 5.
Further, the Examiner finds that applying a favor constraint to a carrier as
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claimed is not a technological solution; rather, it is describing a
mathematical business analysis. Answer 5 (finding that claims are
distinguishable from DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d
1245 (Fed. Cir. 2014) andMcRO, 837 F.3d at 1314 as they do not solve a
"solve a problem specific to the Internet or computerized animation").
Similarly, the Examiner finds that the claims are distinguishable from
Amdocs, 841 F.3d at 1300--01, 1303 and BASCOM, 827 F.3d 1341 as they
do not recite "anything akin to the particular network architectures." Id.
Appellants' arguments have not persuaded us the Examiner erred in
not considering the clams as being directed to an unconventional
technological solution. We concur with the Examiner that shipping is a
commercial venture, contractual relationship between parties to transport
goods and the logistics of shipping is just the organization of the parties, not
a technology to be improved. Answer 5. Contrary to Appellants' arguments,
the recitation of a favor and awarding bids to full loads are not concepts
similar to those found to be an unconventional technological solution in
Amdocs, 841 F.3d at 1300--01, 1303. In Amdocs, the Court found the
claimed invention provided an "unconventional technological solution" in
which "generic components operate in an unconventional manner" through
the use of network devices and "gatherers" that permit data to "reside in the
peripheries of the system" but still "be accessible from a central location."
Here, the claim merely requires use of a constraint, a favor constraint, to
optimize a solution to achieve a desired result of a full load. As discussed
above the Examiner has found the favor analyses to describe a mathematical
business analysis. Answer 5.
We concur with the Examiner and are not persuaded by Appellants'
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arguments that there "is no evidence that the claimed solutions,
incorporating the use of favor constraints and lowest integer solutions, are in
any way conventional or generic." Representative claim 1 and Appellants'
Specification identifies this favor constraint is a weighing of certain bids to
give preference to shippers of full load bids. Specification para. 39. This
favor constraint is included in the business constraint sent from the shipper
to the central server. Id. The favor constraint is therefore received
(gathered) data. Mere data gathering by a computer over a network is not
"unconventional activity." See e.g., Intellectual Ventures v. Symantec, 838
F.3d 1307, 1321 (Fed. Cir. 2016), MPEP §2106.0S(d)(II)(i). The
Specification describes the optimization as calculating a solution to a
mathematical problem. Specification para. 75. Performance of repetitive
calculations by a computer is not "unconventional activity." See e.g.,
Bancorp Services v. Sun Life, 687 F.3d 1266, 1278 (Fed. Cir. 2012) (Fed.
Cir. 2016), MPEP § 2106.0S(d)(II)(ii). Thus, the record supports the
Examiner's finding that the use of a computer (including a server) to receive
data such as favor constraints, and to perform calculation such as the
disclosed manner of optimization, are have been recognized as well-
understood, routine, conventional activity.
Further, we concur with the Examiner and we do not see Appellants'
claims as similar to those at issue in BASCOM. In BASCOM, the court
found the claimed invention to provide "the installation of a filtering tool at
a specific location, remote from the end-users, with customizable filtering
features specific to each end user" by "taking advantage of the ability of at
least some ISPs to identify individual accounts that communicate with the
ISP server, and to associate a request for Internet content with a specific
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individual account." BASCOM, 827 F.3d at 1350. However, each of the
servers was merely described as a well-known, generic computer
component. Id. at 1349. Here, the claims recite the bids are received by and
determined by a central server, however, as the Examiner has found
Appellants' Specification in paragraph 31, states, "central server 18 is not
limited to a specific type or variety of server or any particular type or variety
of hardware." Answer 5. Appellants have not shown any unconventional
abilities to result from the activity of the server in combination with the
other additional elements in the same manner as BASCOM such that the
Examiner erred in finding the additional elements to, collectively, "merely
provide conventional computer implementation." Final Act. 5. Thus,
Appellants have not persuaded us that the claims present a "specific
unconventional technological solution."
In summary, Appellants' arguments have not persuaded us of error in
the Examiner's determination that the claims are directed to an abstract idea;
a certain method of organizing human activity which is both a fundamental
economic practice and a commercial or legal interaction.. Further,
Appellants' arguments have not persuaded us that the Examiner erred in
finding that the claims are not directed to: an improvement in the
functioning of the computer or to other technology or other technical field; a
particular machine; performing or affecting a transformation of an article to
a different state or thing; and/or using a judicial exception in some
meaningful way beyond linking the exception to a particular technological
environment such that the claim as a whole is more than a drafting effort to
monopolize the judicial exception.
Accordingly, we sustain the Examiner's rejection of claims 1 through
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16 under 35 U.S.C. § 101 as being directed to patent ineligible subject
matter.
DECISION
The decision of the Examiner to reject claims 1 through 16 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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