Fout, Hamilton et al.

Patent Trials and Appeals Board

Aug 18, 2020

2019001965 (P.T.A.B. Aug. 18, 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.
13/279,739 10/24/2011 Hamilton Fout 880417-0111-US00 9156
134795 7590 08/18/2020
MICHAEL BEST & FRIEDRICH LLP (DC)
790 N WATER ST
SUITE 2500
MILWAUKEE, WI 53202
EXAMINER
WEISENFELD, ARYAN E
ART UNIT PAPER NUMBER
3689
NOTIFICATION DATE DELIVERY MODE
08/18/2020 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 HAMILTON FOUT, ERIC ROSENBLATT,
VINCENT YAO, BENJAMIN HOFFMAN, and
MATTHEW DAVID MOKEY
____________________

Appeal 2019-001965
Application 13/279,739
Technology Center 3600
____________________

Before PHILIP J. HOFFMANN, BRUCE T. WIEDER, and
MATTHEW S. MEYERS, Administrative Patent Judges.

HOFFMANN, Administrative Patent Judge.

DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s rejection of claims 28–47. We have jurisdiction under 35 U.S.C.
§ 6(b). Appellant argued at the Board on June 25, 2020.
We AFFIRM.

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. Appellant identifies the real party in interest as Fannie
Mae. Appeal Br. 2.
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According to Appellant, the invention is directed “to comparing . . .
comparable[] sales listed on . . . appraisals to those selected by a comparable
selection model.” Spec. ¶ 1. Claims 28 and 42–44 are the independent
claims on appeal. Below, we reproduce independent claim 28 as illustrative
of the appealed claims.2
28. A method of evaluating a completed appraisal of a
subject property, comprising:
receiving, by a computing device, data descriptive of the
completed appraisal, the data indicative of a first set of N
properties that were relied upon in the completed appraisal as
comparable properties, N being a first integer greater than 1;
performing, by the computing device, a data quality
check on the completed appraisal of the subject property to
determine whether the completed appraisal is complete;
responsive to determining that the completed appraisal is
complete, executing, by the computing device, an automated
comparable selection model based on the subject property to
generate and rank a second set of M properties for use as
alternative comparable properties to the subject property, where
M is a second integer greater than N, and wherein the second
set of M properties includes the first set of N properties and P
best properties, where P is a third integer equal to N;
evaluating, by the computing device, each property in the
first set of N properties according to a plurality of evaluation
dimensions including a comparable ranking dimensions that
compares rankings of the first set of N properties to rankings of
the P best properties;
assigning, by the computing device, a category score for
each evaluation dimension of the plurality of evaluation
dimensions based on the evaluation of the each property in the
first set of N properties; and
assigning, by the computing device, an overall appraisal
quality score to the completed appraisal based on category

2 Italics omitted.
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scores that have been assigned to the plurality of evaluation
dimensions.
REJECTIONS AND PRIOR ART
The Examiner rejects the claims as follows:
I. Claims 28–47 under 35 U.S.C. § 101 as reciting only patent-
ineligible subject matter; and
II. Claims 28–47 under 35 U.S.C. § 103(a) as unpatentable based
on Graboske3 and Cheetham.4
PRINCIPLES OF LAW CONCERNING 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 has long interpreted 35 U.S.C. § 101 to include implicit
exceptions, however: “[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) (citation omitted).
In determining whether a claim falls within an excluded category, the
Supreme Court’s two-step framework, described in Mayo and Alice, guides
us. See 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.” Id. 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. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4 in petitioners’

3 Graboske, US 2008/0004893 A1, published Jan. 3, 2008.
4 Cheetham et al., US 6,115,694, issued Sept. 5, 2000 (“Cheetham”).
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application explain the basic concept of hedging, or protecting against
risk.”).
Concepts that the courts 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 that the courts 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, although the claim at issue recited a mathematical formula,
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.”).
Nonetheless, 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.
2019 Revised Patent Subject Matter Eligibility Guidance
In early 2019, the U.S. Patent and Trademark Office published revised
guidance on the application of § 101. See 2019 Revised Patent Subject
Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”).
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 i) a fundamental economic
practice, or ii) managing personal behavior or relationships or
interactions between people, or mental processes); and
(2) additional elements that integrate the judicial
exception into a practical application (see MANUAL OF PATENT
EXAMINING PROCEDURE (“MPEP”) § 2106.05(a)–(c), (e)–(h)
(9th Ed., Rev. 08.2017, Jan. 2018)).
A practical application “appl[ies], rel[ies] on, or use[s] the judicial exception
in a manner that imposes a meaningful limit on the judicial exception, such
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that the claim is more than a drafting effort designed to monopolize the
judicial exception.” Guidance, 84 Fed. Reg. at 54.
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 either:
(3) adds a specific limitation beyond the judicial
exception which is not “well-understood, routine, [or]
conventional” in the field (see MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, and
conventional activities previously known to the industry,
specified at a high level of generality, to the judicial exception.
See generally Guidance.
ANALYSIS
Rejection I—Eligibility rejection of claims 28–47
Initially, we note that Appellant argues against the Examiner’s § 101
rejection of the claims as a group. Appeal Br. 38–45. We choose
independent claim 28 for our analysis, and the remaining claims stand or fall
with claim 28. See 37 C.F.R. § 41.37 (c)(1)(iv). For the following reasons,
based on our review of the record, we sustain the Examiner’s rejection of the
claims as patent-ineligible.
We determine that in accordance with point (1) of the Guidance
referenced above, independent claim 28 recites at least one judicial
exception, including an abstract idea. More specifically, as described in
further detail, the abstract idea includes mental processes.
As set forth above, independent claim 28 recites (with numbering and
italics added):
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28. A method of evaluating a completed appraisal of a
subject property, comprising:
[1.] receiving, by a computing device, data descriptive of
the completed appraisal, the data indicative of a first set of N
properties that were relied upon in the completed appraisal as
comparable properties, N being a first integer greater than 1;
[2.] performing, by the computing device, a data quality
check on the completed appraisal of the subject property to
determine whether the completed appraisal is complete;
[3.] responsive to determining that the completed
appraisal is complete, executing, by the computing device, an
automated comparable selection model based on the subject
property to generate and rank a second set of M properties for
use as alternative comparable properties to the subject
property, where M is a second integer greater than N, and
wherein the second set of M properties includes the first set of
N properties and P best properties, where P is a third integer
equal to N;
[4.] evaluating, by the computing device, each property
in the first set of N properties according to a plurality of
evaluation dimensions including a comparable ranking
dimensions that compares rankings of the first set of N
properties to rankings of the P best properties;
[5.] assigning, by the computing device, a category score
for each evaluation dimension of the plurality of evaluation
dimensions based on the evaluation of the each property in the
first set of N properties; and
[6.] assigning, by the computing device, an overall
appraisal quality score to the completed appraisal based on
category scores that have been assigned to the plurality of
evaluation dimensions.
Appeal Br., Claims App. (emphases added). Each of the italicized steps may
be performed mentally, within the mind of a person, with or without the use
of paper and pen or pencil. For example, the claim’s step 2 may include
nothing more than making sure all the requested information for the
appraisal is provided—such as a determination that may be made in a
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person’s mind after reading a form on which appraisal information is
recorded. This is consistent with Appellant’s Specification, which appears
to use the word “complete” only a single time. In particular, paragraph 115
of Appellant’s Specification states, in relevant part, “Appraisal(s) 701 must
pass a data quality check 702 or data integrity check to be eligible for an
appraisal score and pass/fail decision. This data quality check ensures that
the appraisal form was adequately prepared, that the data is complete and
reasonable.” Spec. ¶ 115.
With respect to step 3, the step may include nothing more than
ranking other properties that were not used in the appraisal, relative to each
other and the original properties, to find the best properties. The claim does
not recite on what criteria the properties are to be ranked. Thus, for
example, a person’s mind may be used to compare distances from the
appraised property to each of the original and other properties, and a
person’s mind may be used to rank the original and other properties based on
distance, such as from closest to farthest, from the appraised property, to
identify the best properties that were not used in the appraisal.
With respect to step 4, the step may include nothing more than
comparing at least two aspects of the best properties to the two aspects of the
original properties. The claim does not recite what aspects are to be
compared. Thus, a person’s mind may be used to compare lot size and
structure age for each of the best and original properties. Step 5 may include
nothing more than a person’s mind assigning a value to each of the
compared aspects—for example a “1” to lot size and a “2” to structure age,
thereby indicating that lot size is more important than structure age. Step 6
may include nothing other than using all of the information to determine the
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quality of the appraisal, by evaluating, in a person’s mind, the extent to
which the original properties are like the best properties.
Accordingly, claim 28 is directed to an abstract idea.
In accordance with point (2) of the Guidance referenced above, we
determine that independent claim 28 does not integrate the judicial exception
into a “practical application.” Guidance at 54. To the extent that the claim
uses various information that is not generated in a person’s mind, uses a
computer to execute a model, and otherwise uses a computer, these are all
insignificant extra-solution activities. Guidance at 55; see also MPEP
§ 2106.05(g); Bilski v. Kappos, 561 U.S. 593, 610–11 (2010) (“Flook stands
for the proposition that the prohibition against patenting abstract ideas
‘cannot be circumvented by attempting to limit the use of the formula to a
particular technological environment’ or adding ‘insignificant postsolution
activity.”’) (Quoting Diehr, 450 U.S. at 191–92).
Further, we note that the method concerns “evaluating a completed
appraisal of a subject property” (Appeal Br., Claims App.), and as such the
claimed method does not improve another technology, because any
improvement recited by the claims concerns evaluating the quality of
particular data (Guidance at 55; see also MPEP § 2106.05(a)). Appellant’s
Specification does not describe the use of any specialized or particular
computer. Because a particular computer is not required, the claim also does
not define or rely on a “particular machine.” Guidance at 55; see also MPEP
§ 2106.05(b). Further, the method does not transform matter. Guidance
at 55; see also MPEP § 2106.05(c). The method that claim 28 recites has no
other meaningful limitations (MPEP § 2106.05(e)), and thus merely recites
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instructions to execute the abstract idea on a computer (MPEP § 2106.05(f)).
Guidance at 55.
Consequently, independent claim 28 does not integrate the judicial
exception into a “practical application.”
In accordance with points (3) and (4) of the Guidance referenced
above, claim 28 fails to recite a specific limitation beyond the judicial
exception which is not well understood, routine, and conventional in the
field, but instead simply appends well-understood, routine, and conventional
activities previously known to the industry, specified at a high level of
generality, to the judicial exception. Taking the claim elements separately,
the claimed hardware, as well as the functions performed by the claimed
hardware, are purely conventional. Specifically, claim 28 does not recite
anything other than using known, conventional components to perform their
known, basic functions. See, e.g., Spec. ¶¶ 36, 37, 39. Although, arguably,
the actual information differs, the claim recites the hardware only at a high
level of generality. In other words, here the claim recites only well-
understood, routine, and conventional functions. See In re Katz, 639 F.3d
1303, 1316 (Fed. Cir. 2011) (“Absent a possible narrower construction of
the terms ‘processing,’ ‘receiving,’ and ‘storing,’ . . . those functions can be
achieved by any general purpose computer without special programming.”).
Further, when considered as an ordered combination, claim 28’s
limitations do not add anything that is not already present when we consider
the steps separately. See, e.g., Spec. ¶ 25, Fig. 1. The hardware and its
technological configuration remain the same before, during, and after
estimating the risk of an on-line transaction. Thus, the claim amounts to
nothing significantly more than instructions to apply the abstract idea with
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conventional hardware, and does not require an improved version or
arrangement of the recited hardware. Accordingly, the claim recitations are
insufficient to transform the abstract idea into a patent-eligible invention.
See Alice, 573 U.S. at 225–26.
We have considered all of Appellant’s arguments in the Briefs, but
Appellant does not persuade us that the claims recite patent-eligible subject
matter. See Appeal Br. 38–45; see Reply Br. 6–14. We now address certain
arguments below.
During the hearing, and in both Briefs, Appellant discusses
extensively McRO, Inc. dba Planet Blue v. Bandai Namco Games America
Inc., 837 F.3d 1299 (Fed. Cir. 2016). In McRO the claims were directed to a
specific asserted improvement in computer animation—i.e., the automatic
use of rules of a particular type. Id. at 1313. The Federal Circuit clarified
that the “automation” recited in the claims at issue went beyond merely
“carrying out [the abstract idea].” Id. at 1315. Specifically, the Federal
Circuit premised its determination that the claims were patent eligible not
merely on the specificity of the claimed animation scheme, but rather on the
fact that the claims, when considered as a whole, were directed to a
technological improvement over the existing, manual 3-D animation
techniques, and used limited rules in a process specifically designed to
achieve an improved technological result in conventional industry practice.
Id. at 1314–15. Unlike McRO, the automation recited in Appellant’s
claim 28 is for carrying out an abstract idea—i.e., the abstract idea of
evaluating a property appraisal. Consequently, we are not persuaded by
Appellant’s arguments with respect to McRO.
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Rejection II—Obviousness rejection of claims 28–47
As set forth above, independent claim 28 recites a “method of
evaluating a completed appraisal of a subject property,” which includes, in
relevant part,
receiving, by a computing device, data descriptive of the
completed appraisal, the data indicative of a first set of N
properties that were relied upon in the completed appraisal as
comparable properties, N being a first integer greater than 1; . . .
[and]
responsive to determining that the completed appraisal is
complete, executing, by the computing device, an automated
comparable selection model based on the subject property to
generate and rank a second set of M properties for use as
alternative comparable properties to the subject property, where
M is a second integer greater than N, and wherein the second
set of M properties includes the first set of N properties and P
best properties, where P is a third integer equal to N.
Appeal Br., Claims App. (emphasis added). The Examiner relies on
Graboske to disclose receiving data descriptive of a completed appraisal, the
data indicative of a first set of N properties upon which the completed
appraisal relied as comparable properties. See, e.g., Final Action 6–7. The
Examiner finds, however, that Graboske does not disclose executing an
automated comparable selection model to generate and rank a second set of
M properties for use as alternative comparable properties to the subject
property, where M is a second integer greater than N, and wherein the
second set of M properties includes the first set of N properties and P best
properties, where P is a third integer equal to N. See, e.g., id. at 9.
According to the Examiner, Cheetham discloses these claim recitations. See,
e.g., id. at 10–11.
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However, based on our review of the cited portion of Cheetham and
the Examiner’s further remarks in the Final Office Action (and Answer), it is
clear to us that the Examiner does not rely on Cheetham to disclose
executing an automated comparable selection model to generate and rank a
second set of M properties for use as alternative comparable properties to the
subject property, where M is a second integer greater than N, and wherein
the second set of M properties includes the first set of N properties and P
best properties, where P is a third integer equal to N. Instead, the Examiner
determines that the claim recitation “where P is a third integer equal to N” is
“nonfunctional descriptive material.” Appeal Br., Claims App.; Final
Action 12. The Examiner errs in making this determination.
It is well settled that nonfunctional descriptive material cannot lend
patentability to an invention that would have otherwise been anticipated by
the prior art. In re Ngai, 367 F.3d 1336, 1339 (Fed. Cir. 2004). The claim
recitation under discussion, however, is not directed to the type of claimed
material (i.e., that the claimed information is property data)—rather the
claim recitation is directed to the amount of information (i.e., claim 28
recites that the second set of M properties includes the first set of N
properties and P best properties, where the number of P properties is equal to
the number of N properties).
Consequently, inasmuch the Examiner does not support adequately
that either the above claim recitation is nonfunctional descriptive material,
the claim recitation is disclosed by Graboske or Cheetham, or it would have
been obvious to modify Graboske and Cheetham to provide the claim
recitation, we do not sustain the Examiner’s obviousness rejection of
independent claim 28. We also do not sustain the Examiner’s obviousness
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rejection of independent claims 42–44 that each include a similar recitation
as, and the Examiner rejects with, independent claim 28. Further, we do not
sustain the obviousness rejection of claims 29–41 and 45–47 that depend
from the independent claims.
CONCLUSION
We AFFIRM the Examiner’s § 101 rejection of claims 28–47.
We REVERSE the Examiner’s § 103(a) rejection of claims 28–47.
In summary:
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 41.50(f).
AFFIRMED

Claims
Rejected
35 U.S.C. § Basis/Reference(s) Affirmed Reversed
28–47 101 Eligibility 28–47
28–47 103(a) Graboske,
Cheetham
28–47
Overall
Outcome
28–47