Howard W. Lutnick

Patent Trials and Appeals Board

Aug 1, 2019

11857126 - (D) (P.T.A.B. Aug. 1, 2019)

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.
11/857,126 09/18/2007 Howard W. LUTNICK 06-2020 1321
63710 7590 08/01/2019
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
PIERCE, DAMON JOSEPH
ART UNIT PAPER NUMBER
3715
NOTIFICATION DATE DELIVERY MODE
08/01/2019 ELECTRONIC
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address(es):
lkorovich@cantor.com
patentdocketing@cantor.com
phowe@cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte HOWARD W. LUTNICK
____________

Appeal 2018-009060
Application 11/857,1261
Technology Center 3700
____________

Before JOSEPH A. FISCHETTI, BIBHU R. MOHANTY, and MEREDITH
PETRAVICK, Administrative Patent Judges.

FISCHETTI, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellant seeks our review under 35 U.S.C. § 134 of the Examiner’s
final rejection of claims 2, 4–8, 26, 28–31, 52, and 53. We have jurisdiction
under 35 U.S.C. § 6(b).

SUMMARY OF DECISION
We affirm.

1 Appellant identifies CFPH, LLC as the real party in interest.
App. Br. 3.
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THE INVENTION
Appellant’s Specification describes it as “methods of entering wagers
using incentive awards.” (Abstract).
Claim 2, reproduced below, is representative of the subject matter on
appeal.
A method comprising:
receiving an indication of an incentive award code
indicating a purchase of a good by a user;
determining an amount of a first type of points that may
be used to place a bet in a wager based on the incentive award
code;
providing an interface through which at least a portion of
the amount of the first type of points may be bet in a wager;
determining, by a processor, an amount of a second type
of points based on an outcome of the wager, in which the
second type of points may be redeemed for a non-cash prize;
and
providing, from the processor, an indication of the
amount of the second type of points, in which the incentive
award code is redeemable only for the first type of points and,
in which the first type of points may not be redeemed for the
non-cash prize.

App. Br. 8 (Claims App.).2

2 We refer to Appellant’s supplemental Appeal Brief dated, March 7, 2018
(“App. Br.”).
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THE REJECTION
The following rejection is before us for review.
Claims 2, 4–8, 26, 28–31, 52, and 53 are rejected under 35 U.S.C.
§ 101 as directed to a judicial exception. Final Act. 2.

FINDINGS OF FACT
We adopt the Examiner’s findings as set forth on pages 2–5 in the
Final Office Action3 and on pages 2–8 in the Examiner’s Answer,
concerning only the 35 U.S.C. § 101 rejection.

35 U.S.C. § 101 REJECTION
We will affirm the rejection of claims 2, 4–8, 26, 28–31, 52, and 53
under 35 U.S.C. § 101.
The Appellant argues claims 2, 4–8, 26, 28–31, 52, and 53 as a group,
and we select claim 2 as the representative claim for this group (App. Br. 4),
and so the remaining claims stand or fall with claim 1. See 37 C.F.R.
§ 41.37(c)(1)(iv) (2015).
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

3 All references to the Final Office Action refer to the Final Office Action
mailed on May 11, 2017.
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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, we
are guided by the Supreme Court’s two-step framework, described in Mayo
and Alice. 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.” See 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’ 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.
(15 How.) 252, 267–68 (1854))); and manufacturing flour (Benson, 409 U.S.
at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that “[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
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mathematical formula.” Diehr, 450 U.S. at 176; see also id. at 191 (“We
view respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, . . . and this principle cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment.” Id. (citing Benson and Flook); see, e.g., Diehr, 450 U.S. at
187 (“It is now commonplace that an application of a law of nature or
mathematical formula to a known structure or process may well be deserving
of patent protection.”).
If the claim is “directed to” an abstract idea, we 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. (alterations in original) (quoting Mayo, 566 U.S. at 77).
“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
that abstract idea into a patent-eligible invention.” Id.
The PTO recently published revised guidance on the application of
§ 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed.
Reg. 50 (Jan. 7, 2019) (“Guidance”). Under the Guidance, we first look to
whether the claim recites:
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(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 MANUAL OF PATENT EXAMINING
PROCEDURE (“MPEP”) §§ 2106.05(a)–(c), (e)–(h)).

Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is 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 Guidance, 84 Fed. Reg. at 56.
The U.S. Court of Appeals for the Federal Circuit has explained that
“the ‘directed to’ inquiry applies a stage-one filter to claims, considered in
light of the [S]pecification, based on whether ‘their character as a whole is
directed to excluded subject matter.’” Enfish, LLC v. Microsoft Corp.,
822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp. v.
Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). It asks whether
the focus of the claims is on a specific improvement in relevant technology
or on a process that itself qualifies as an “abstract idea” for which computers
are invoked merely as a tool. See id. at 1335–36.
In so doing, as indicated above, we apply a “directed to” two prong
test: 1) evaluate whether the claim recites a judicial exception, and 2) if the
claim recites a judicial exception, evaluate whether the claim “appl[ies],
rel[ies] on, or use[s] the judicial exception in a manner that imposes a
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meaningful limit on the judicial exception, such that the claim is more than a
drafting effort designed to monopolize the judicial exception.” Guidance, 84
Fed. Reg. at 53; see also MPEP § 2106.05(a)–(c), (e)–(h).
The Specification states:
In some embodiments, incentive awards may be provided for a
customer that provides information. For example, an incentive
award may be provided for a user registering with a website.
Such registration may include providing name, address, email,
preferences, income, demographic, and / or other information.
A size of an incentive award may be based on an amount of
information provided. For example, a first size may be awarded
a post office address and a second greater size for an email
address. The information provided may also include
information about other people, such as friends or family. In
some embodiments, incentive awards may be provided based
on attendance at an event, for example a marketing event or a
talk about a particular retailer or product. In other
embodiments, incentive rewards may be provided for a
customer not performing some act or buying some product.

Specification 15:19–30.
Understood in light of the Specification, claim 2, recites, in pertinent
part,
[R]eceiving an indication of an incentive award code
indicating a purchase of a good by a user; determining an
amount of a first type of points that may be used to place a bet
in a wager based on the incentive award code; providing an
interface through which at least a portion of the amount of the
first type of points may be bet in a wager; determining, . . . an
amount of a second type of points based on an outcome of the
wager, in which the second type of points may be redeemed for
a non-cash prize; and providing, . . . an indication of the amount
of the second type of points, in which the incentive award code
is redeemable only for the first type of points and, in which the
first type of points may not be redeemed for the non-cash prize.
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Accordingly, the Examiner found that the claims are directed to “the
idea of awarding different types of points for a person performing different
actions such as a concept relating to managing transactions between two
parties.” Final Act. 9.
We agree with the Examiner that the claims are directed “to awarding
different types of points for a person performing different actions” because,
claim 2 for, example, results in “providing,…, an indication of the amount of
the second type of points, in which the incentive award code is redeemable
only for the first type of points and, in which the first type of points may not
be redeemed for the non-cash prize.” Claim 2 also requires that the second
type of points be based on the betting behavior of the player, namely, “at
least a portion of the amount of the first type of points may be bet in a
wager.” Such behavior constitutes at least, interactions between people
(including social activities, teaching, and following rules or instruction)
which are included as certain methods of organizing human activity. The
patent-ineligible end of the spectrum includes certain methods of organizing
human activity. Guidance, 84 Fed. Reg. at 52 (citing Alice, 573 U.S. at
220).
Turning to the second prong of the “directed to” test, claim 2 only
generically requires “a processor.” This component is described in the
Specification at a high level of generality. See Spec. 8:31–32, 9:1–29. We
fail to see how the generic recitation of this most basic computer component
and/or of a system part so integrates the judicial exception as to “impose[] a
meaningful limit on the judicial exception, such that the claim is more than a
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drafting effort designed to monopolize the judicial exception.” Guidance, 84
Fed. Reg. at 53.
Thus, we find that the claims recite the judicial exception of certain
methods of organizing human activity that is not integrated into a practical
application.
That the claims do not preempt all forms of the abstraction or may be
limited to wagering, does not make them any less abstract. See OIP Techs.,
Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362–63 (Fed. Cir. 2015) (“And
that the claims do not preempt all price optimization or may be limited to
price optimization in the e-commerce setting do not make them any less
abstract.”).
Turning to the second step of the Alice analysis, because we find that
the claims are directed to abstract ideas/judicial exceptions, the claims must
include an “inventive concept” in order to be patent-eligible, i.e., there must
be an element or combination of elements sufficient to ensure that the claim
in practice amounts to significantly more than the abstract idea itself. See
Alice, 573 U.S. at 217–18 (quoting Mayo Collaborative Servs., 566 U.S. at
72–73).
Concerning this step the Examiner found the following:
The claims do not include additional elements that
are sufficient to amount to significantly more than
the judicial exception because the claims requires
the additional elements of a processor and
interface, however, these are generic computer
components claimed to perform basic functions of
determining and displaying participants
accumulated points. The additional elements or
combination of elements in the claims other than
the abstract idea per se amount to no more than:
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recitation of generic computer structure that serves
to perform generic computer functions that are
well-understood, routine, and conventional
activities previously known to the pertinent
industry. Viewed as a whole, these additional
claim elements do not provide meaningful
limitations to transform the abstract idea into a
patent eligible application of the abstract idea such
that the claims amount to significantly more than
the abstract idea itself.
Final Act. 2–3.
We agree with the Examiner. “[T]he relevant question is whether the
claims here do more than simply instruct the practitioner to implement the
abstract idea . . . on a generic computer.” Alice, 573 U.S. at 225. They do
not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to receive, provide, determine and apply decision criteria to data to
generate a result are some of the most basic functions of a computer. All of
these computer functions are well-understood, routine, conventional
activities previously known to the industry. See Elec. Power Grp., LLC v.
Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016); see also In re Katz
Interactive Call Processing Patent Litig., 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”). In short, each
step does no more than require a generic computer to perform generic
computer functions.
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Considered as an ordered combination, the computer components of
Appellant’s claims add nothing that is not already present when the steps are
considered separately. The sequence of data reception-analysis (receive,
provide, determine and apply decision criteria to data to generate a result),
and storing is equally generic and conventional or otherwise held to be
abstract. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir.
2014) (sequence of receiving, selecting, offering for exchange, display,
allowing access, and receiving payment recited an abstraction); Inventor
Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir.
2017) (holding that sequence of data retrieval, analysis, modification,
generation, display, and transmission was abstract); Two-Way Media Ltd. v.
Comcast Cable Commc’ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017)
(holding sequence of processing, routing, controlling, and monitoring was
abstract). The ordering of the steps is, therefore, ordinary and conventional.
Thus, the claims at issue amount to nothing significantly more than
instructions to apply the abstract idea of a certain method of organizing
human activity using some unspecified, generic computer. Under our
precedents, that is not enough to transform an abstract idea into a patent-
eligible invention. See Alice, 573 U.S. at 225–26.
We have reviewed all the arguments Appellant has submitted
concerning the patent eligibility of the claims before us that stand rejected
under 35 U.S.C. § 101. App. Br. 4–7. We find that our analysis above
substantially covers the substance of all the arguments, which have been
made. But, for purposes of completeness, we will address various
arguments in order to make individual rebuttals of same.
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Appellant argues, “the Examiner fails to make a prima facie showing
that ‘awarding different types of points for a person performing different
actions such as a concept relating to managing transactions between two
parties’ is abstract.” App. Br. 6.
We disagree with Appellant. To the extent Appellant argues that the
Examiner erred in adequately supporting this determination by not providing
evidence, we are unpersuaded. In this regard, there is no requirement that
Examiners must provide evidentiary support in every case before a
conclusion can be made that a claim is directed to an abstract idea. See, e.g.,
MPEP § 2106.07(a)(III) (2018) (“The courts consider the determination of
whether a claim is eligible (which involves identifying whether an exception
such as an abstract idea is being claimed) to be a question of law. Thus, the
court does not require ‘evidence’ that a claimed concept is a judicial
exception, and generally decides the legal conclusion of eligibility without
resolving any factual issues.” (citations omitted.))
Moreover, the Federal Circuit made clear in Berkheimer that “not
every § 101 determination contains genuine disputes over the underlying
facts material to the § 101 inquiry.” Berkheimer v. HP Inc., 881 F.3d 1360,
1368 (Fed. Cir. 2018). In fact, the Federal Circuit in Berkheimer did not
require evidentiary support for independent claim 1 because “[t]he
limitations [of claim 1] amount to no more than performing the abstract idea
of parsing and comparing data with conventional computer components.”
Id. at 1370.
All that is required of the USPTO to meet its prima facie burden is
that the Examiner set forth the statutory basis of the rejection and the
reference or references relied upon in a sufficiently articulate and
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informative manner as to meet the notice requirement of 35 U.S.C. § 132.
As the statute itself instructs, the Examiner must “notify the applicant,”
“stating the reasons for such rejection,” “together with such information and
references as may be useful in judging the propriety of continuing the
prosecution of his application.” 35 U.S.C. § 132(a); see also In re Jung, 637
F.3d 1356, 1363 (Fed. Cir. 2011) (declining “to impose a heightened burden
on examiners beyond the notice requirement of § 132”). Here, as we found
above, the Examiner has made these findings as required by the statute. See
Final Act. 2–4.
Specifically, in rejecting the pending claims under § 101, the
Examiner notified Appellant that the claims are “directed to the abstract idea
of awarding different types of points for a person performing different
actions such as a concept relating to managing transactions between two
parties[,]” (Final Act. 2), and that “[v]iewed as a whole, these additional
claim elements do not provide meaningful limitations to transform the
abstract idea into a patent eligible application of the abstract idea such that
the claims amount to significantly more than the abstract idea itself.” Id. at
3. Thus, we find that a prima facie case was established by the Examiner.
We also disagree with Appellant that under the holding in Enfish our
decision would be different. (Appeal Br. 6–7). Enfish, LLC v. Microsoft
Corp., 822 F.3d 1327 (Fed. Cir. 2016). Appellant’s claims are not directed
to an improvement in computer technology like that of claim 17 in Enfish.
In Enfish, the invention at issue was directed at a wholly new type of logical
model for a computer database: a self-referential table that allowed the
computer to store many different types of data in a single table and index
that data by column and row information. Enfish, 822 F.3d at 1330–32. In
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finding the claims are “not directed to an abstract idea,” but “to a specific
improvement to the way computers operate,” the Federal Circuit noted that
“the claims are not simply directed to any form of storing tabular data, but
instead are specifically directed to a self-referential table for a computer
database.” Enfish, 822 F.3d at 1336–37. We find nothing in the claims
before us arising to this level of technical improvement in the claimed
“processor” which arises to the level of technical proficiency as found in
Enfish. Instead, we find the claims are focused on the abstraction of
“awarding different types of points for a person performing different actions
such as a concept relating to managing transactions between two parties.”

CONCLUSIONS OF LAW
We conclude the Examiner did not err in rejecting claims 2, 4–8, 26,
28–31, 52, and 53 under 35 U.S.C. § 101.

DECISION
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