Hamilton Fout et al.

Patent Trials and Appeals Board

Nov 3, 2020

13312372 - (D) (P.T.A.B. Nov. 3, 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.
13/312,372 12/06/2011 Hamilton Fout 880417-0115-US00 5688
134795 7590 11/03/2020
MICHAEL BEST & FRIEDRICH LLP (DC)
790 N WATER ST
SUITE 2500
MILWAUKEE, WI 53202
EXAMINER
LINDSEY III, JOHNATHAN J
ART UNIT PAPER NUMBER
3629
NOTIFICATION DATE DELIVERY MODE
11/03/2020 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, YONG CHEN, ELIF ONMUS-BAYKAL,
ERIC ROSENBLATT, and WENXIONG W. YAO
Appeal 2020-002702
Application 13/312,372
Technology Center 3600
Before JEREMY J. CURCURI, JUSTIN BUSCH, and
PHILLIP A. BENNETT, Administrative Patent Judges.
BENNETT, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant appeals from the Examiner’s
decision to reject claims 28, 29, and 31–33.1 We have jurisdiction under
35 U.S.C. § 6(b).
We affirm.

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. 2.
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CLAIMED SUBJECT MATTER
The claims relate to assigning confidence values to automated property
valuations by using the non-typical property characteristics of the properties.
Spec., Title. Claim 28, reproduced below, is illustrative of the claimed subject
matter:
28. A non-transitory computer readable medium storing
program code for automatically assessing the reliability of property
valuations, the program code being executable by at least one
processor to perform operations comprising: performing, by
the at least one processor, a first regression respectively correlating
price contributions to each of a first set of characteristics, the first
set of characteristics including a plurality of property
characteristics retrieved from a property data resources database
over a network connection, the first regression being performed for
a given geographical area in which a subject property resides;
receiving a request for assessing the reliability of a property
valuation for the subject property as of a given date, wherein the
subject property resides in a census block group, a census tract and
a county that are within the given geographical area;
identifying a smallest geographic area among the census
block group, the census tract, and the county that includes at least
a predetermined number of property transactions within a
predetermined time frame from the given date;
determining, by the at least one processor, the property
valuation for the subject property as of the given date using an
automated valuation model applied to comparable properties
corresponding to the property transactions included in the smallest
geographic area;
performing, by the at least one processor, a second regression
having a dependent variable and independent variables, wherein the
dependent variable is a probability that property valuation
determined using the automated valuation model is within a
predetermined percentage of actual transaction price and the
independent variables include a second set of characteristics,
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wherein the second set of characteristics includes differences in the
plurality of property characteristics, wherein
Appeal Br. 16–17 (Claims Appendix).
REJECTION
Claims 28, 29, and 31–33 stand rejected under 35 U.S.C. § 101 as being
directed to ineligible subject matter. Final Act. 2–8.
ANALYSIS
We have reviewed the Examiner’s rejections in light of Appellant’s
arguments set forth in the Appeal Brief and the Reply Brief. We are not
persuaded by Appellant’s arguments. We adopt as our own: (1) the findings
and reasons set forth by the Examiner in the action from which this appeal is
taken (Final Act. 2–8), and (2) the findings, reasons, and explanations set forth
by the Examiner in the Examiner’s Answer in response to Appellant’s Brief
(Ans. 3–13) and concur with the conclusions reached by the Examiner. We
highlight the following for emphasis.
Standard for Patent Eligibility
In issues involving subject matter eligibility, our inquiry focuses on
whether the claims satisfy the two-step test set forth by the Supreme Court in
Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014). The Court instructs us to
“first determine whether the claims at issue are directed to a patent-ineligible
concept,” id. at 218, and, in this case, the inquiry centers on whether the claims
are directed to an abstract idea. If the initial threshold is met, we then move to
the second step, in which we “consider the elements of each claim both
individually and ‘as an ordered combination’ to determine whether the
additional elements ‘transform the nature of the claim’ into a patent-eligible
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application.” Id. at 217–18 (quoting Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 79, 78 (2012)). The Court describes the second step
as a search for “an ‘“inventive concept”’—i.e., an element or combination of
elements that is ‘sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the [ineligible concept] itself.’” Id.
(quoting Mayo, 566 U.S. at 72–73).
The USPTO has published revised guidance on the application of § 101
consistent with Alice and subsequent Federal Circuit decisions. USPTO, 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7,
2019) (“Guidance”), updated by USPTO, October 2019 Update: Subject
Matter Eligibility (available at https://www.uspto.gov/sites/default/files/
documents/peg_oct_2019_update.pdf) (“October 2019 Guidance Update”).
Under the 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) (referred to as Step 2A, prong 1 in the Guidance); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a)–(c), (e)–(h))
(referred to as Step 2A, prong 2 in the Guidance).
See Guidance, 84 Fed. Reg. at 52–55. Only if a claim (1) recites a judicial
exception and (2) does not integrate that exception into a practical application,
do we then move to Step 2B of the Guidance. There, we look to whether the
claim:
(3) adds a specific limitation beyond the judicial exception that is
not “well-understood, routine, conventional” in the field (see
MPEP § 2106.05(d)); or
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(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 Guidance, 84 Fed. Reg. at 56.
Examiner’s Findings and Conclusions
The Examiner rejects claim 28 as being directed to a judicial exception
without significantly more under the Guidance. Final Act. 2–8; Ans. 3–13.
Under Step 2A, prong 1, the Examiner determines claim 28 recites a judicial
exception. Final Act. 2–4; Ans. 3–5. Specifically, the Examiner determines
that the claim recites “mathematical calculations and mathematical formulas or
equations” (Final Act. 2–3), and additionally a mental process (Final Act. 3).
The Examiner further determines that the claim recites “a method for
generating a property valuation and assigning a confidence factor to the
generated property valuation” which, according to the Examiner constitutes “a
sales activity and/or fundamental economic practice.” Ans. 4.
Under Step 2A, prong 2, the Examiner determines claim 28 does not
integrate the abstract idea into a practical application because the additional
limitations in the claim “recite data gathering and data output” and that “[t]he
Office has long considered data gathering and data output to be insignificant
extra-solution activity.” Ans. 5–6.
Citing paragraphs 31–33, 49–50, and 62 of the Specification as
evidence, the Examiner determines that the computer components recited in
claim 28 does not integrate the abstract idea into a practical application
because “[t]he claims appear to invoke these computing elements only as tools
to execute the identified abstract idea [and] only describe the technological
environment in which to apply the judicial exception and do not impose
meaningful limits on the claims.” Ans. 8 (footnotes omitted).
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Under Step 2B, the Examiner determines the additional claim elements
do not amount to significantly more than the judicial exception because the
additional limitations “describe the conventional computer functions of
‘receiving or transmitting data over a network.’” Ans. 8 (citing MPEP
§ 2106.05(d)(iii)).
The Examiner addresses each of the dependent claims individually,
concluding they each recite ineligible subject matter “because the additional
recited limitations further describe the identified abstract idea and/or do not
recite limitations that integrate the abstract idea into practical application or
that qualify as significantly more under the Office’s current guidance.” Ans. 9;
see also Final Act. 7–8 (evaluating each dependent claim separately), Ans. 9–
13 (same).
Appellant’s Contentions
Appellant presents several arguments for eligibility, focusing on Step
2A, prong 2 and claim 28. Appellant first argues “[t]he features of claim 28
are representative of narrowly tailored improvements to assessing property
valuations and generating a corresponding graphical user interface.” Appeal
Br. 7. Appellant further contends:
This claim here recites a very specific multiple stage regression that
at least improves upon any known valuation by firstly narrowing
analysis to a smallest geographical area and then using a second
regression in determining an estimated probability that the property
valuation is within a predetermined percentage of an actual
transaction price for a given date. It is not merely “a multiple stage
regression” but is instead a specifically articulated (and novel)
example of a multiple stage regression.
Appeal Br. 9. Appellant further asserts that the functions recited in claim 28
integrate any recited judicial exception into a practical application because they
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“clearly represent an articulated improvement in the functioning of a computer,
or an improvement to other technology or technical field.” Appeal Br. 9.
Appellant further assert that claim 28 bears similarity to Example 37
from the Guidance, and is eligible because “like Claim 1 of Example 37, claim
28 is also patent-eligible because it recites a specific manner to better
determine property valuation and confidence values, as well as a corresponding
graphical user interface that displays information regarding property
characteristics information.” Appeal Br. 10–11.
Under Step 2B of the Guidance, Appellant argues the Examiner has
failed to establish a prima facie case of ineligibility because the Examiner has
not provided sufficient evidence of the well-understood, routine and
conventional nature of the claims under Berkheimer. Appeal Br. 12–13.
Revised Guidance, Step 2A, Prong 1
The Judicial Exception
Applying the Guidance, we are not persuaded the Examiner has erred in
determining that the claims recite a judicial exception to patent eligible subject
matter.2 The Guidance identifies three judicially-excepted groupings:
(1) mathematical concepts, (2) certain methods of organizing human activity
such as fundamental economic practices and commercial interactions
(including . . . advertising, marketing or sales activities or behaviors; business
relations), and (3) mental processes.3

2 Throughout this opinion, we give the claim limitations the broadest
reasonable interpretation consistent with the Specification. See In re Morris,
127 F.3d 1048, 1054 (Fed. Cir. 1997).
3 Appellant’s arguments against the § 101 rejection are made to claim 28. We
treat claim 28 as representative. 37 C.F.R. § 41.37(c)(1)(iv) (2018) (“When
multiple claims subject to the same ground of rejection are argued as a group
or subgroup by Appellant, the Board may select a single claim from the group
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We conclude the limitations of claim 28 identified by the Examiner do
recite a combination of abstract ideas.4 Ans. 4–5. Specifically, we agree with
the Examiner’s determination that the following limitations of claim 28 recite a
judicial exception of sales activity and/or a fundamental economic practice:
(1) “performing . . . a first regression respectively correlating price
contributions to each of a first set of characteristics . . . the first regression
being performed for a given geographical area in which a subject property
resides,” (2) “identifying a smallest geographic area among the census block
group, the census tract, and the county that includes at least a predetermined
number of property transactions within a predetermined time frame from a
given date,” (3) “determining . . . the property valuation for the subject
property as of the given date using an automated valuation model applied to
comparable properties corresponding to the property transactions included in
the smallest geographic area,” (4) “performing . . . a second regression having
a dependent variable and independent variables, wherein the dependent
variable is a probability that property valuation determined using the
automated valuation model is within a predetermined percentage of actual
transaction price and the independent variables include a second set of
characteristics, wherein the second set of characteristics includes differences in
the plurality of property characteristics, wherein the second set of

or subgroup and may decide the appeal as to the ground of rejection with
respect to the group or subgroup on the basis of the selected claim alone.”).
4 RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1327 (Fed. Cir. 2017)
(“Adding one abstract idea . . . to another abstract idea . . . does not render the
claim non-abstract.”); see also FairWarning IP, LLC v. Iatric Sys., Inc., 839
F.3d 1089, 1093–94 (Fed. Cir. 2016) (patent-ineligible claims were directed to
a combination of abstract ideas).
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characteristics further includes variables respectively produced by the
automated valuation model, the variables including weighted comparable
value, weighted economic distance, and weighted absolute location adjustment,
and wherein the second set of characteristics further includes a model volatility
corresponding to the automated valuation model,” (5) “applying results of the
second regression to the property valuation for the subject property that was
determined by the automated valuation model at the smallest geographic area,”
and (6) “determining, by the at least one processor, a confidence factor for the
property valuation based upon applying the results of the second regression,
the confidence factor comprising an estimated probability that the property
valuation determined by the automated valuation model for the subject
property is within the predetermined percentage of an actual transaction price
for the given date.” Appeal Br. 16–17 (Claims Appendix).
The process recited in the limitations above generates a property
valuation and a confidence factor as to the accuracy and/or reliability of the
property valuation. Like the concept of intermediated settlement in Alice, and
the concept of hedging in Bilski, the concepts of property valuation and
assessing the reliability of property valuation estimates recited in Appellant’s
claims constitute “a fundamental economic practice long prevalent in our
system of commerce.” Alice, 573 U.S. at 216 (citations and internal quotation
marks omitted). Further, we also agree with the Examiner that property
valuation is a commercial practice and/or sales activity under the Guidance.
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As such, we conclude the claims recite a judicial exception of a fundamental
economic practice.5
Revised Guidance, Step 2A, Prong 2
Integration of the Judicial Exception into a Practical Application
Having determined that claim 28 recites a judicial exception, our
analysis under the Guidance turns now to determining whether claim 28 recites
any additional elements that integrate the judicial exception into a practical
application. See Guidance, 84 Fed. Reg. at 54–55 (citing MPEP § 2106.05(a)–
(c), (e)–(h)).
Under the Guidance, limitations that are indicative of “integration into a
practical application” include:
1. Improvements to the functioning of a computer, or to any other
technology or technical field — see MPEP § 2106.05(a);
2. Applying the judicial exception with, or by use of, a particular
machine — see MPEP § 2106.05(b);
3. Effecting a transformation or reduction of a particular article to a
different state or thing — see MPEP § 2106.05(c); and
4. Applying or using the judicial exception in some other meaningful
way beyond generally linking the use of the judicial exception to a
particular technological environment, such that the claim as a
whole is more than a drafting effort designed to monopolize the
exception — see MPEP § 2106.05(e).

5 We also agree with the Examiner that these limitations also are reasonably
characterized as reciting mathematical equations or calculations under the
Guidance. Ans. 5.
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In contrast, limitations that are not indicative of “integration into a
practical application” include:
1. Adding the words “apply it” (or an equivalent) with the judicial
exception, or merely include instructions to implement an abstract
idea on a computer, or merely uses a computer as a tool to
perform an abstract idea — see MPEP § 2106.05(f);
2. Adding insignificant extra-solution activity to the judicial
exception — see MPEP § 2106.05(g); and
3. Generally linking the use of the judicial exception to a particular
technological environment or field of use — see MPEP
§ 2106.05(h).
See Guidance, 84 Fed. Reg. at 54–55 (“Prong 2”).
As shown above, most of the limitations in claim 28 recite abstract
ideas. Additional to those abstract limitations, claim 28 recites that various
steps are performed by “at least one processor.” Appeal Br. 16–17 (Claims
Appendix). It is well-settled that mere recitation of a non-specific and generic
computer is insufficient to integrate the recited judicial exception into a
practical application. See MPEP 2106.05(f) (explaining that it is not indicative
of integration into a practical application where the claims “merely include
instructions to implement an abstract idea on a computer, or merely uses a
computer as a tool to perform an abstract idea”).
As noted by the Examiner (Ans. 5–6), claim 28 additionally recites
(a) “the first set of characteristics including a plurality of property
characteristics retrieved from a property data resources database over a
network connection,” and (b) “receiving a request for assessing the reliability
of a property valuation for the subject property as of a given date, wherein the
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subject property resides in a census block group, a census tract and a county
that are within the given geographical area,” and (c) “updating a geographical
user interface, by the at least one processor, the geographical user interface
including a depiction of a map image that indicates the smallest geographic
area, the subject property and corresponding comparable properties, and
concurrently with the depiction of the map image, the graphical user interface
including corresponding property grid data includes the results of the property
valuation for the subject property including the confidence factor.” Appeal Br.
16–17 (Claims Appendix).
These limitations do not integrate the abstract idea into a practical
application because we do not discern in these limitations any improvements to
the functioning of a computer, or to any other technology or technical field.
MPEP § 2106.05(a). Rather, we agree with the Examiner that these limitations
are correctly viewed as reciting extra-solution activity in the form of data
gathering and data output. Ans. 6 (“The Office has long considered data
gathering and data output to be insignificant extra-solution activity.”).
Limitation (a), which recites that the property characteristics are received from
a database over a network connection, merely recites how data is gathered for
the purpose of applying the judicial exception. That is, the limitation specifies
how information is obtained so that the fundamental economic practice of
property valuation may be performed using the obtained data. Generally
linking the use of the judicial exception to a particular technological
environment or field of use, however, is not indicative of integration into a
practical application. MPEP § 2106.05(h). Limitation (b), which recites
receiving a request made for the reliability of the valuation of a property
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having certain characteristics, also is extra-solution activity because it merely
precipitates the performance of the reliability assessment.
Limitation (c), which generally recites that information is output on a
graphical user interface, also does not integrate the abstract idea into a practical
application because it can be also reasonably characterized as extra-solution
activity. MPEP § 2106.05(f) (identifying “[s]electing a particular data source
or data type” and outputting data as examples of extra-solution activities). The
claim does not recite any improvement to how a graphical user interface
operates, and instead merely recites that the data generated in carrying out the
abstract idea is output for display in a specific display configuration.
Appellant further asserts that claim 28 bears similarity to Example 37
from the Guidance, and is eligible because “like Claim 1 of Example 37, claim
28 is also patent-eligible because it recites a specific manner to better
determine property valuation and confidence values, as well as a corresponding
graphical user interface that displays information regarding property
characteristics information.” Appeal Br. 10–11. We disagree.
The issue illustrated by that particular example was whether a mental
process was recited in the claim.6 Here, as explained by the Examiner, the
main focus of the claim is a fundamental economic practice and/or sales
activity. Thus, even if Example 37 were pertinent to the mental process
analysis in this case, Appellant’s argument inadequately explains why the
claim does not recite a fundamental economic practice.
In sum, whether viewed individually or as an ordered combination, the
additional elements recited in claim 28 are not an improvement to technology.

6 We note the Guidance states that “[t]he examples below are hypothetical and
only intended to be illustrative of the claim analysis under the 2019 PEG.”
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The recited process, at best, affects an improvement to the abstract idea itself.
It is well-established, however, that improvements in the abstract idea are
insufficient to confer eligibility on an otherwise ineligible claim. SAP Am. Inc.
v. InvestPic, LLC, 898 F.3d 1161, 1168 (Fed. Cir. 2018). We conclude claim
28 is directed to a judicial exception under step 2A, prong 2, of the Guidance.
The Inventive Concept – Step 2B
Having determined the claim is directed to a judicial exception, we
proceed to evaluating whether claim 28 adds a specific limitation beyond the
judicial exception that is not “well-understood, routine, conventional” in the
field (see MPEP § 2106.05(d)) or simply appends well-understood, routine,
conventional activities previously known to the industry, specified at a high
level of generality, to the judicial exception. See Guidance, 84 Fed. Reg. at 56.
Our review of the Examiner’s rejection under Step 2B is guided by the
Berkheimer Memorandum, which sets forth what fact finding requirements are
applicable to rejections under § 101. Consistent with the Berkheimer
Memorandum, we agree with the Examiner that claim 28 does not add specific
limitations beyond what is well-understood, routine, and conventional.
Our analysis focuses largely on the same limitations addressed in
Step 2A, prong 2, above. The Examiner finds that the additional limitations
are generic computer components and the remaining limitations are recited a
high level of generality. Ans. 5–9. Moreover, consistent with the Berkheimer
Memorandum, the Examiner cited MPEP § 2106.05(d) and portions of
Appellant’s Specification (¶¶ 31–33, 49, 50, 62) as evidence of the well-
understood, routine, and conventional nature of the additional limitations. See
Ans. 7 (citing Specification parargraphs), 8 n.9 (citing MPEP § 2106.05(d)(ii)).
Appellant does not explain why the Examiner’s evidence of the well-
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understood, routine, and conventional nature of the additional limitations is
insufficient.
Because the Examiner correctly concluded claim 28 is directed to a
judicial exception, and because Appellant does not identify any error in the
Examiner’s determination under step 2B of the Guidance, we sustain the
rejection of representative claim 28 under 35 U.S.C. § 101, as well as of the
remaining claims.
CONCLUSION
We affirm the rejection under 35 U.S.C. § 101.
DECISION SUMMARY
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
28, 29, 31–
33
101 Eligibility 28, 29, 31–
33

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). See 37 C.F.R.
§ 1.136(a)(1)(iv).
AFFIRMED