Hamilton Fout et al.Download PDFPatent Trials and Appeals BoardNov 3, 202013312372 - (D) (P.T.A.B. Nov. 3, 2020) Copy Citation 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. Appeal 2020-002702 Application 13/312,372 2 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, Appeal 2020-002702 Application 13/312,372 3 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 Appeal 2020-002702 Application 13/312,372 4 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 Appeal 2020-002702 Application 13/312,372 5 (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). Appeal 2020-002702 Application 13/312,372 6 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 Appeal 2020-002702 Application 13/312,372 7 “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 Appeal 2020-002702 Application 13/312,372 8 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). Appeal 2020-002702 Application 13/312,372 9 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. Appeal 2020-002702 Application 13/312,372 10 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. Appeal 2020-002702 Application 13/312,372 11 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 Appeal 2020-002702 Application 13/312,372 12 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 Appeal 2020-002702 Application 13/312,372 13 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.” Appeal 2020-002702 Application 13/312,372 14 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- Appeal 2020-002702 Application 13/312,372 15 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 Copy with citationCopy as parenthetical citation