Fannie Mae

Patent Trials and Appeals Board

Oct 23, 2020

14681377 - (D) (P.T.A.B. Oct. 23, 2020)

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.
14/681,377 04/08/2015 Weifeng Wu 880417-0144-US00 6210
134795 7590 10/23/2020
MICHAEL BEST & FRIEDRICH LLP (DC)
790 N WATER ST
SUITE 2500
MILWAUKEE, WI 53202
EXAMINER
CRANDALL, RICHARD W.
ART UNIT PAPER NUMBER
3689
NOTIFICATION DATE DELIVERY MODE
10/23/2020 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):
DCipdocket@michaelbest.com
nbenjamin@michaelbest.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte WEIFENG WU, JOHN TREADWELL, ERIC ROSENBLATT,
JESSE D. STAAL, and FOTIS GAVRIIL
___________

Appeal 2020-002884
Application 14/681,377
Technology Center 3600
____________

Before JASON V. MORGAN, ERIC B. CHEN, and IRVIN E. BRANCH,
Administrative Patent Judges.

CHEN, Administrative Patent Judge.

DECISION ON APPEAL

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Application 14/681,377

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STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1–22. We have jurisdiction under
35 U.S.C. § 6(b).
We AFFIRM.

CLAIMED SUBJECT MATTER
The claims are directed to computer modeling of real estate property
values. (Spec. ¶ 1.)
Claim 1, reproduced below, is illustrative of the claimed subject
matter, with bracketing added:
1. A non-transitory computer readable medium that
stores program code that is configured to, when executed by a
computing system, cause the computing system to perform
operations comprising:
[i] accessing property data that describes properties
located in a geographic region that includes various sub-
regions;
[ii] determining, based on the property data, a regression
function that models a relationship between a sale price and a
set of explanatory variables;
[iii] determining an estimated value of the sale price for
each of the properties by using the regression function;
[iv] determining a property-level location effect for each
of the properties based on a difference between the estimated
value of the sale price determined for the respective property
and an actual value of the sale price of the respective property;

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42(a). Appellant identifies the real party in interest as Fannie
Mae. (Appeal Br. 3.)
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[v] determining, for each of the properties, a location
effect data point that includes coordinates that specify a
location of the respective property and the property-level
location effect determined for the respective property;
[vi] determining, for each of the sub-regions, a property-
level location effect function that relates location effect as a
dependent variable to one or more independent variables that
specify location by fitting to the location effect data points of at
least those of the properties that are located in the respective
sub-region and at least one location effect data point of a
property that is located in an adjoining sub-region, the property-
level location effect function varying in value within the
respective sub-region and being continuous with an adjoining
property-level location effect function of the adjoining sub-
region; and
[vii] storing discrete calculated values of the property-
level effect function in a lookup table for a predetermined set of
functions.

REJECTIONS
Claims 1–22 stand rejected under 35 U.S.C. § 101 as directed to
patent-ineligible subject matter.

OPINION
We are unpersuaded by Appellant’s arguments (Appeal Br. 9–12; see
also Reply Br. 3–7) that independent claims 1 and 12 are directed to patent-
eligible subject matter under 35 U.S.C. § 101.
The Examiner determined that “[t]he abstract idea steps recited in
claims 1 and [12] are those which could be performed mentally or manually,
as in on pen and paper.” (Final Act 4.) In particular, the Examiner
determined that “[t]he steps consist of ‘accessing’ data, which could be done
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mentally, by recall, and then a series of determining steps, which could also
be done mentally or on paper” and “‘storing’ the calculated values could be
done mentally or on paper, including [in] a ‘lookup table.’” (Id.) The
Examiner further determined that “[t]he steps are valuating property, which
is a commonplace business method—commonplace business methods
performed on a computer is merely using the computer as a tool, which is
not a practical application of an abstract idea.” (Id.)
In addition, regarding the additional elements (e.g., computing
system), the Examiner determined that “[t]he claim(s) does/do not include
additional elements that are sufficient to amount to significantly more than
the judicial exception because . . . the generic computer elements are merely
instructions to apply an abstract idea to a computer.” (Id. at 5 (emphasis
omitted).) We agree with the Examiner’s determinations and ultimate
conclusion that the claims are directed to patent-ineligible subject matter.
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: “[l]aws of nature, natural phenomena, and abstract
ideas” are not patentable. E.g., Alice Corp. 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. Alice, 573 U.S. 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
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the concept of intermediated settlement, i.e., the use of a third party to
mitigate settlement risk.”); see also Bilski v. Kappos, 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, 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 (1853))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that “a claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula.” Diehr, 450 U.S. at 187; 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
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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 turn 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 published revised guidance on the application of § 101.
USPTO, 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84
Fed. Reg. 50 (Jan. 7, 2019); see also USPTO, October 2019 Update: Subject
Matter Eligibility, 84 Fed. Reg. 55942 (Oct. 18, 2019). Under that guidance,
we first look to whether the claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
organizing human activity 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) (9th
ed. 2019)).
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:
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(3) adds a specific limitation beyond the judicial exception that
are 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 84 Fed. Reg. 56.

Are the claims at issue directed
to a patent-ineligible concept?
Step One
Claim 1 is a computer readable medium claim, which falls within the
“manufacture” category of 35 U.S.C. § 101. Likewise, claim 12 is method
claim, which falls within the “process” category of 35 U.S.C. § 101.
Therefore, claims 1 and 12 fall within one of the four statutory categories of
patentable subject matter identified by 35 U.S.C. § 101.
Although claims 1 and 12 fall within the statutory categories, we must
still determine whether the claims are directed to a judicial exception,
namely an abstract idea. See Alice, 573 U.S. at 216. Thus, we must
determine whether the claims recite a judicial exception and whether the
exception is integrated into a practical application. See 84 Fed. Reg. at 52–
55. If a claim recites a judicial exception without integrating the judicial
exception into a practical application, the claim is directed to a judicial
exception under the first step of the Alice/Mayo test. See id.

Step 2A, Prong One
Claim 1 is a system claim for performing operations having multiple
steps, each of which can be performed in the human mind or by a human
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using pen and paper. See CyberSource Corp. v. Retail Decisions, Inc., 654
F.3d 1366, 1372–73 (Fed. Cir. 2011) (“[U]npatentable mental processes”
include “steps [that] can be performed in the human mind, or by a human
using a pen and paper”).
Step [i], which recites, “accessing property data that describes
properties located in a geographic region that includes various sub-regions,”
can be performed by a real estate professional by searching the latest real
estate listings for various neighborhoods in a specific city. Step [ii], which
recites “determining, based on the property data, a regression function that
models a relationship between a sale price and a set of explanatory
variables,” and step [iii], which recites “determining an estimated value of
the sale price for each of the properties by using the regression function,”
can be performed by the real estate professional recognizing (1) the
relationship between the sale price of a property as a function of gross living
area (or number of bedrooms) and (2) the relationship between the sale price
of a property as a function of distance to a desirable location (e.g.,
oceanfront). Step [iv], which recites, “determining a property-level location
effect for each of the properties based on a difference between the estimated
value of the sale price determined for the respective property and an actual
value of the sale price of the respective property” can be performed by the
real estate professional realizing that a property with a small gross living
area may have an abnormally high sale price due to its proximity to the
desirable location (e.g., oceanfront). Step [v], which recites “determining,
for each of the properties, a location effect data point that includes
coordinates that specify a location of the respective property and the
property-level location effect determined for the respective property,” can be
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performed by the real estate professional calculating the distances from each
property to the desirable location (e.g., oceanfront) based on global
positioning system (GPS) coordinates (i.e., latitude and longitude). Step
[vi], which recites
determining, for each of the sub-regions, a property-level
location effect function that relates location effect as a
dependent variable to one or more independent variables that
specify location by fitting to the location effect data points of at
least those of the properties that are located in the respective
sub-region and at least one location effect data point of a
property that is located in an adjoining sub-region,
can be performed by the real estate professional (1) recording the sale prices
of multiple properties from multiple neighborhoods, along with
corresponding GPS coordinates; (2) calculating the distances from each
property to the desirable location (e.g., oceanfront) based upon GPS
coordinates; and (3) observing the relationship between sale prices of
multiple properties as a function of distance to the desirable location (e.g.,
oceanfront). Step [vii], which recites “storing discrete calculated values of
the property-level effect function in a lookup table for a predetermined set of
functions,” can be performed by the real estate agent recording the sales
prices for the properties in tabular format as a function of GPS coordinates.
Because all the steps of claim 1 can either be performed by human
thought alone, or by a human using pen and paper, claim 1 is directed to a
patent-ineligible abstract idea. Claim 12, a corresponding method claim,
recite limitations similar to those discussed with respect claim 1. Thus,
claim 12 is also directed to a patent-ineligible abstract idea.

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Step 2A, Prong Two
Because claims 1 and 12 recite a judicial exception, we next
determine if the claims recite additional elements that integrate the judicial
exception into a practical application.
The preamble of independent claim 1 recites “[a] non-transitory
computer readable medium that stores program code that is configured to,
when executed by a computing system” (emphases added) to performed
multiple steps. Independent claims 12 does not recite additional element in
the form of computer hardware.
The recited additional elements, including “computer readable
medium” and “computing system” are merely tools for performing the
recited abstract idea. See Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838
F.3d 1253, 1262 (Fed. Cir. 2016) (“[T]he claims are directed not to an
improvement in cellular telephones but simply to the use of cellular
telephones as tools in the aid of a process focused on an abstract idea.”).
Thus, claims 1 and 12 do not recite additional elements that integrate
the judicial exception into a practical application.

Is there something else in the claims
that ensures that they are directed to significantly
more than a patent ineligible concept?
Step 2B
Because claims 1 and 12 are directed to a judicial exception, we next
determine, according to Alice, whether these claims recite an element, or
combination of elements, that ensure that the claim is directed to
significantly more than the judicial exception.
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The preamble of independent claim 1 recites “computer readable
medium” and “computing system.” With respect to the claimed additional
elements, Appellant’s Specification discloses the following:
The determination of the location effect functions may be
performed by an appropriately configured computing system,
such as the computing system 100 illustrated in Figure 1. A
processor 105 may execute program code that is stored on a
non-transitory computer readable medium 110, and, when
executed, the program code may cause the computing system to
perform the various operations described in this disclosure.
The computing system may include various components such
as input/output components 115, a display 120, and a
communications unit 125, as well as other components not
discussed in detail herein.
(Spec. ¶ 29.)
The generalized functional terms by which the additional elements are
described reasonably indicate that Appellant’s Specification discloses: (i) a
conventional “computer readable medium” (e.g., computer readable medium
110); and (ii) a conventional “computing system” (e.g., “computing system
[100] may include various components such as input/output components
115, a display 120, and a communications unit 125” (id.)).
Moreover, Appellant’s Figure 1 illustrates computing system 100,
which includes “processor 105 [that] may execute program code . . . stored
on a non-transitory computer readable medium 110.” (Id.) Accordingly,
Appellant’s Specification, including Figure 1, discloses that computer
system 100 and computer readable medium 110 function cooperatively as an
ordered combination.
Thus, independent claims 1 and 12 do no more than require generic,
purely conventional computer elements, as an ordered combination,
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performing generic computer functions, rather than improve computer
capabilities.
First, Appellant argues that “[t]he dictionary definition of the phrase
‘lookup table,’ [as claimed] which explicitly attributes the term to the
‘computing’ art, is ‘an array or data structure enabling a result to be found
faster than by calculating or searching for it, by matching one or more
criteria’” (Appeal Br. 9; see also Reply Br. 3–7) and “the Examiner
expressly construes the phrase ‘lookup table’ as being equivalent to the word
‘table’” (Appeal Br. 10). Accordingly, Appellant argues, “[o]ne of ordinary
skill in the art at the time of invention would have readily understood that
the word ‘lookup’ in the phrase ‘lookup table’ conveys meaning and is not
superfluous.” (Id.) Even if we adopt Appellant’s claim construction of
“lookup table,” Appellant has not demonstrated that the Examiner’s prima
facie case when making an eligibility rejection is in error. The Examiner has
identified the appropriate judicial exceptions as “mental processes” and the
Examiner has compared the claimed concepts of independent claim 1 to
appropriate Federal Circuit decisions (i.e., CyberSource).
Second, Appellant argues that “[a]t least because a lookup table,
properly construed, is a computerized array or data structure, at least the
claim feature of storing cannot practically be performed in the human mind.”
(Appeal Br. 11.) However, the Examiner’s rejection was based upon a
determination that the claims can be “performed mentally or manually, as in
on pen and paper” (i.e., CyberSource). (Final Act. 4.) Appellant has not
provided any persuasive arguments or evidence as to why the claimed
“lookup table” cannot be performed by a human using pen and paper.
Moreover, “the inability for the human mind to perform each claim step does
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not alone confer patentability.” FairWarning, IP, LLC v. Iatric Sys., Inc.,
839 F.3d 1089, 1098 (Fed. Cir. 2016).
Third, Appellant argues that the “claims integrate the abstract idea
(allegedly recited elsewhere in the claim) into a practical application of the
abstract idea and improve the functioning of a computer or other
technology.” (Appeal Br. 11–12.) In particular, Appellant argues that
the claimed lookup table is a particular computerized element
that is integral to the claim and is an additional element that
applies the alleged abstract idea in a meaningful way other than
merely linking the use of the judicial exception to a particular
technological environment, both according to the plain meaning
of the claimed phrase and according to the particular
technological advantages.
(Id. at 12.) However, Appellant has not adequately explained why the claim
“purport[s] to improve the functioning of the computer itself” or “any other
technology or technical field.” Alice, 573 U.S. at 225. In particular,
Appellant has not explained why the mental process of estimating real estate
values improves the function of a computer or other technology.
Last, Appellant argues that
Appellant’s specification expressly states describes
“stor[ing] in a look-up table discrete calculated values of the
location effect functions fi(x,y) for a predetermined set of
locations” and notes that “[d]oing so may reduce the processing
resources required to respond to future requests for determining
location effect values for a given location.”
(Appeal Br. 12.) However, any benefit derived by “reducing[] the
processing resources” is derived solely from the capabilities of a general-
purpose computer. FairWarning IP, LLC v. Iatric Sys., 839 F.3d 1089, 1095
(Fed. Cir. 2016).
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Thus, we agree with the Examiner that claims 1 and 12 are directed
towards patent-ineligible subject matter.
Accordingly, we sustain the rejection of independent claims 1 and 12
under 35 U.S.C. § 101. Claims 2–11 and 13–22 depend from claims 1 and
12, and Appellant has not presented any additional substantive arguments
with respect to these claims. Therefore, we sustain the rejection of claims 2–
11 and 13–22 under 35 U.S.C. § 101, for the same reasons discussed with
respect to independent claims 1 and 12.

CONCLUSION
The Examiner’s decision rejecting claims 1–22 under 35 U.S.C. § 101
is affirmed.

DECISION
In summary:
Claims
Rejected
35 U.S.C. § Basis Affirmed Reversed
1–22 101 Eligibility 1–22

TIME PERIOD FOR RESPONSE
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv).

AFFIRMED