International Business Machines Corporation

Patent Trials and Appeals Board

May 13, 2020

15294272 - (D) (P.T.A.B. May. 13, 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.
15/294,272 10/14/2016 Praveen Jayachandran POU920160231US1 9306
137494 7590 05/13/2020
Proactive Patents LLC
955 Garden Park Drive
Ste 230
Allen, TX 75013
EXAMINER
OYEBISI, OJO O
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
05/13/2020 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):
eofficeaction@appcoll.com
legal@proactivepatents.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte PRAVEEN JAYACHANDRAN
____________

Appeal 2019-007020
Application 15/294,272
Technology Center 3600
____________

Before ERIC B. GRIMES, RACHEL H. TOWNSEND, and
JAMIE T. WISZ, Administrative Patent Judges.

WISZ, Administrative Patent Judge.

DECISION ON APPEAL

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STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 seeks review of claims 1–
20. We have jurisdiction under 35 U.S.C. § 6(b).
For the reasons set forth below, we AFFIRM.

CLAIMED SUBJECT MATTER
The Specification describes “identifying asset states, linking assets to
blockchain transactions and tracking assets in the blockchain, and more
particularly . . . keeping a record of asset changes and related information in
the blockchain for reference and planning of transactions.” Spec. ¶ 1.
Claims 1, 8, and 15 are independent claims. Claim 1 is illustrative
and is set forth below (annotated with bracketed numbers for reference to the
limitations in the claim):
1. A method implemented by a processor executing
computer program instructions stored in memory,
comprising:
[1] logging a transaction on a blockchain, by the
processor;
[2] linking one or more assets to the transaction, by the
processor;
[3] recording, by the processor, a current asset state on
the blockchain of the one or more assets responsive to
linking the one or more assets to the transaction;

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
International Business Machines Corporation. Appeal Br. 3.
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[4] determining, by the processor, that one or more
parties to the blockchain transaction has requirement criteria
associated with the current asset state; and
[5] monitoring the current asset state, by the processor, to
identify whether a lapse in the requirement criteria has
occurred.
Appeal Br. 42 (Claims Appendix). Independent claim 8 recites an
apparatus comprising a processor configured to perform the recited
steps and independent claim 15 recites a “non-transitory computer-
readable storage medium” configured to store instructions to cause a
processor to perform these steps. Id. at 43, 45.
REJECTIONS
The Examiner rejected claims 1–20 under 35 U.S.C. § 101 as being
directed to patent-ineligible subject matter.
I. PRINCIPLES OF LAW
A. Section 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.
However, the U.S. Supreme Court has long interpreted 35 U.S.C. § 101 to
include implicit exceptions: “[l]aws of nature, natural phenomena, and
abstract ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’l, 573
U.S. 208, 216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Court’s two-part framework, described in Mayo and Alice.
Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
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566 U.S. 66, 75–77 (2012)). In accordance with that framework, we first
determine whether the claim recites an abstract idea. See Alice, 573 U.S. 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
that recite abstract ideas, but are nonetheless 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 waterproof 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))).
If the claim is “directed to” an abstract idea, we turn to the second part
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 (quotation marks omitted). “A claim that recites an
abstract idea must include ‘additional features’ to ensure ‘that the [claim] is
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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.
B. USPTO Section 101 Guidance
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101. 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(“2019 Revised Guidance”).2 “All USPTO personnel are, as a matter of
internal agency management, expected to follow the guidance.” Id. at 51;
see also October 2019 Update at 1.
Under the 2019 Revised Guidance and the October 2019 Update, 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) (“Step 2A, Prong One”); and

2 The Office issued further guidance on October 17, 2019. USPTO, October
2019 Update: Subject Matter Eligibility (the “October 2019 Update”)
(available at
https://www.uspto.gov/sites/default/files/documents/peg_oct_2019_update.p
df).
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(2) additional elements that integrate the judicial exception into
a practical application (see MPEP § 2106.05(a)–(c), (e)–(h) (9th ed.
Rev. 08.2017, Jan. 2018)) (“Step 2A, Prong Two”).3
2019 Revised 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 look, under
Step 2B, 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 (“Step 2B”).
2019 Revised Guidance, 84 Fed. Reg. at 52–56.
II. ANALYSIS
Applying the Revised Guidance to the facts on this record, we find
that claims 1–20 are directed to patent-ineligible subject matter.
Claim 1 is directed to a method of logging and monitoring
transactions on a blockchain. Following the first step of the Mayo/Alice

3 This evaluation is performed by (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception, and
(b) evaluating those additional elements individually and in combination to
determine whether the claim as a whole integrates the exception into a
practical application. See 2019 Revised Guidance - Section III(A)(2), 84
Fed. Reg. 54–55.
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analysis, we find that the claim is directed to a “process,” and therefore falls
into one of the broad statutory categories of patent-eligible subject matter
under 35 U.S.C. § 101. We thus proceed to Step 2A, Prong One, of the
Eligibility Guidance.
A. Guidance Step 2A, Prong 1
The Revised Guidance instructs us first to determine whether any
judicial exception to patent eligibility is recited in the claim. The Revised
Guidance identifies three judicially-excepted groupings classified by the
courts as abstract ideas: (1) mathematical concepts, (2) certain methods of
organizing human activity such as fundamental economic practices, and (3)
mental processes.
The Examiner finds that “[o]ther than the recitation of a processor,
there is nothing in the claim that precludes the recited steps from practically
being performed by the human mind” and, therefore, the claims recite a
mental process. Final Act. 3. The Examiner further finds that the claims
recite “a series of steps monitoring assets involved in a transaction where the
assets are recorded in a blockchain which represents an accounting of
transactions that occur between parties involved in a peer to peer network,”
which is a fundamental economic practice, which falls under certain
methods of organizing human activity. Ans. 3.
We agree with the Examiner that claim 1 recites a judicial exception.
More specifically, claim 1, reproduced above, recites a method implemented
by a processor executing computer program instructions stored in a memory
comprising the steps of: [1] “logging a transaction on a blockchain,” [2]
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“linking one or more assets to the transaction,” [3] “recording . . . a current
asset state on the blockchain . . .” [4] “determining . . . that one or more
parties to the blockchain transaction has requirement criteria associated with
the current asset state,” and [5] “monitoring the current asset state . . . .”
Appeal Br. 42. Under the broadest reasonable interpretation, limitations [1]
through [5] recite fundamental economic practices.
Appellant argues that “the claimed invention cannot reasonably be
construed to be a process that can be performed mentally.” Reply 4.
Appellant further asserts that “blockchain technology is far removed from
taking already existing human activities and merely digitizing them via
software to run on a generic computer.” Id. at 5.
Regardless of whether the invention can be performed mentally, we
find that the claim does recite fundamental economic practices; i.e.,
monitoring transactions that occur on a blockchain. The Specification
describes that “transactions on the blockchain are usually related to a
purchase or sale of goods or assets” and that “[t]he assets are therefore part
of the blockchain transaction even though the transactions may not specify
the asset data.” Spec. ¶ 2. The Specification further describes that “there is
a need for entities or individuals, such as buyers, sellers, producers,
consumers, etc., to have preferences with regard to assets which are bought
or sold.” Id. Such preferences, or “requirement criteria,” may include “a
product rating, product compliance measure, certification, etc.” Id. ¶ 20.
Therefore, claim 1 recites logging and monitoring an economic transaction
involving assets and identifying whether preferences regarding an asset have
lapsed. Accordingly, we find that the steps of claim 1 recite a fundamental
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economic practice, which corresponds to the judicial exception of a method
of organizing human activity.
B. Guidance Step 2A, Prong 2
Having determined that the claims recite a judicial exception, we next
consider whether the claims integrate the judicial exception into a practical
application. “[I]ntegration into a practical application” requires that the
claim recite an additional element or a combination of elements, that when
considered individually or in combination, “apply, rely on, or use the
judicial exception in a manner that imposes a meaningful limit on the
judicial exception, such that the claim is more than a drafting effort designed
to monopolize the judicial exception.” 2019 Revised Guidance, 84 Fed.
Reg. at 54.
Appellant asserts that the claimed invention integrates the alleged
abstract idea into a practical application. Appeal Br. 33. Specifically,
Appellant asserts that “the claimed invention is directed to tracking asset
states in a blockchain and determining whether certain requirement criteria
are met in this blockchain, or whether they have lapsed” and further asserts
that:
[T]hese features represent at least an additional element that
reflects an improvement in the functioning of a computer, or an
improvement to another technology or technical field, and
furthermore, apply or use the alleged judicial exception in some
other meaningful way beyond generally linking the use of the
alleged judicial exception to a particular technological
environment, such that the claim as a whole is more than a
drafting effort designed to monopolize the alleged exception.
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Id. Appellant also contends that, “[t]he claimed invention provides a novel
approach for monitoring blockchain asset states and determining whether
they have lapsed.” Id.
We are not persuaded by Appellant’s arguments. We agree with the
Examiner that “the claims here merely use a general purpose computer as a
tool for logging a transaction, linking assets to the transaction and
monitoring the current asset state” and that “[t]here is no claimed
improvement to the technology of linking assets to the transaction.” Ans. 3–
4. We also agree with the Examiner that “there is no recitation of how the
assets are linked to the transaction in the [S]pecification” and “the recitation
of the blockchain occurs at a very high level.” Id. at 4. While the claimed
invention adds additional information to the blockchain (e.g., an asset state
and requirement criteria), Appellant has not persuasively shown that this
additional information actually changes the manner in which the blockchain
itself works. Therefore, we do not find that the claims provide an
improvement to the blockchain technology.
Accordingly, we find that there is no practical integration of the
abstract idea. Other than the limitations directed to the abstract idea,
discussed above, the remaining element is directed to a processor, which is a
generic computer element that does not recite a specific data structure. For
this reason, this element is distinguishable from Enfish, LLC v. Microsoft
Corp., 822 F.3d 1327, 1337 (Fed. Cir. 2016) in which the claims were found
to be an improvement to conventional databases.
As explained in McRO, Inc. v. Bandai Namco Games Am. Inc., 837
F.3d 1299, 1314 (Fed. Cir. 2016), the “abstract idea exception has been
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applied to prevent patenting of claims that abstractly cover results where ‘it
matters not by what process or machinery the result is accomplished.’
[O’Reilly v. Morse, 56 U.S. 62, 113 (1853)]; see also Mayo, 132 S.Ct. at
1301.” McRO stated that therefore, a court must “look to whether the claims
in these patents focus on a specific means or method that improves the
relevant technology or are instead directed to a result or effect that itself is
the abstract idea and merely invoke generic processes and machinery.”
McRO, 837 F.3d at 1314. Here, the invention is claimed at a very high level
of generality without integrating the abstract ideas into a practical
application because Appellant did not explain sufficiently why the claims
provide an additional element, outside the abstract idea, that improves the
technology or technical field.
Therefore, on this record, we conclude that the judicial exception in
Appellant’s claims is not integrated into a practical application.
C. Guidance Step 2B
Having determined that the judicial exception is not integrated into a
practical application, we next evaluate the additional elements individually
and in combination to determine whether they provide an inventive concept,
such as a specific limitation beyond the judicial exception that is not well-
understood, routine, and conventional in the field, or whether the claim
simply appends well-understood, routine, conventional activities previously
known to the industry, specified at a high level of generality, to the judicial
exception. See 2019 Revised Guidance, 84 Fed. Reg. 51.
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Appellant asserts that the claims apply “blockchain technology in a
novel way in order to monitor blockchain assets and determine whether
lapses have occurred based on criteria” and that “[t]his is not merely using a
generic computer to perform the unspecified alleged abstract idea” but,
“[r]ather, this operation itself constitutes an additional element that must be
analyzed.” Appeal Br. 35–36. Appellant acknowledges that “the computing
systems implementing the claimed invention may be conventional in some
embodiments” but asserts that “what provides substantially more than any
alleged abstract idea is the claimed process.” Id. at 36. According to
Appellant, similar to BASCOM Global Internet Services, Inc. v. AT&T
Mobility LLC, AT&T Corp., 827 F.3d 1341 (Fed. Cir. 2016), “it is the
process that Appellant is claiming” and “implementing a new process for
tracking assets and lapses in a blockchain” satisfies Alice and BASCOM. Id.
at 36–38.
We are not persuaded by this argument. As found by the Examiner, in
BASCOM, “the claims were held to be patent-eligible because the claimed
solution focused upon the specific asserted improvement in filtering
technology by providing individually customizable filtering at a remote ISP
server by taking advantage of the technical capability of certain
communication networks.” Ans. 5. Therefore, the invention in BASCOM
“was a technological solution to a technological problem, using an improved
filtering technology rather than using conventional filtering technology.” Id.
Unlike the claims in BASCOM, the current claims do not involve a
technological solution to a technological problem but “provide a generically
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computer-implemented solution to a business-related or economic problem.”
Id.
Appellant further asserts that the claims are similar to those found
patent eligible in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245
(Fed. Cir. 2014) because “the claimed invention is necessarily rooted in
computer technology” in that “the claims arise out of needs specific to
computer-based systems that simply did not exist in the pre-computer
world” because “[i]t cannot be said that the blockchain existed prior to
computers.” Appeal Br. 38. According to Appellant, “the claimed invention
adds a specific limitation or combination of limitations that are not well-
understood, routine, conventional activity in the field, which is indicative
that an inventive concept may be present.” Id. Specifically, Appellant
asserts that the claims “are directed to tracking asset states in a blockchain
and determining whether certain requirement criteria are met in this
blockchain, or whether they have lapsed.” Id. at 38–39
We are not persuaded that this fact pattern is similar to that
in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir.
2014). DDR Holdings determined that the claims addressed the problem of
retaining website visitors who, if adhering to the routine, conventional
functioning of Internet hyperlink protocol, would be transported instantly
away from a host’s website after clicking on an advertisement and activating
a hyperlink. DDR Holdings, 773 F.3d at 1257. The Federal Circuit, thus,
held that the claims were directed to patent-eligible subject matter because
they claim a solution “necessarily rooted in computer technology in order to
overcome a problem specifically arising in the realm of computer
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networks.” Id. While the instant claims concern transactions occurring via
computers, they merely apply generic computer technology to the
fundamental economic practice of monitoring an asset state to identify
whether a lapse in the requirement criteria (e.g., buyer or producer
preferences), has occurred. Therefore, the only additional element in the
claim, which is not part of the abstract idea itself, is applying the abstract
idea on a conventional computer.
Instead, we find the claimed invention more akin to the claims
in Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 714 (Fed. Cir. 2014) than
those in DDR Holdings. In Ultramercial, the patentee argued that its claims
were “directed to a specific method of advertising and content distribution
that was previously unknown and never employed on the Internet
before.” Ultramercial, 772 F.3d at 714. However, Ultramercial found that
the majority of the steps were directed to the abstract idea of offering media
content in exchange for viewing an advertisement, and the “routine
additional steps[,] such as updating an activity log, requiring a request from
the consumer to view the ad, restrictions on public access, and use of the
Internet[,]” were insufficient to transform the patent-ineligible abstract idea
into patent-eligible subject matter. Id. at 715–16. Here, while the claims
recite a specific abstract idea for logging a transaction on a blockchain and
monitoring a current asset state linked to the transaction, that idea does not
alter the computer itself in any structural way.
Furthermore, Appellant did not direct us to anything in the
Specification indicating that any additional steps or components beyond the
abstract idea recited in the claims are not generic or conventional. And we
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find the Specification describes the use of conventional components. For
example, the Specification describes that “various types of processors” can
be used. Spec. ¶ 27. Similarly, a “computer program may be embodied on a
computer readable medium, such as a storage medium,” which includes
random access memory (“RAM”), flash memory, hard disk, a compact disk
read-only memory (“CD-ROM”), “or any other form of storage medium
known in the art.” Id. ¶ 21. The use of a generic computer to perform
generic computer functions that are “well-understood, routine, conventional
activit[ies]” previously known in the industry is not enough to transform the
abstract idea into a patent-eligible invention. See Alice, 573 U.S. at 225–26.
Accordingly, the preponderance of evidence of record supports the
Examiner’s finding that Appellant’s claimed invention is directed to patent-
ineligible subject matter. The rejection of claim 1 under 35 U.S.C. § 101 is
affirmed. Independent claims 8 and 15 suffer from the same deficiencies as
claim 1 and we affirm the rejection of these claims for the reasons discussed
above. While Appellant argues that the Examiner did not provide analysis
of the dependent claims, Appellant did not provide any evidence as to why
the additional elements of the dependent claims render them eligible.
Appeal Br. 40. Therefore, claims 2–7, 9–14, and 16–20 are not argued
separately, and fall with claims 1, 8, and 15. See 37 C.F.R.
§ 41.37(c)(1)(iv).
CONCLUSION
For the reasons described herein and those already of record, we
affirm the Examiner’s rejection of claims 1–20.
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DECISION SUMMARY
In summary:
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–20 101 Eligibility 1–20

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