Kris Bliesner

Patent Trials and Appeals Board

Dec 10, 2019

13865952 - (D) (P.T.A.B. Dec. 10, 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.
13/865,952 04/18/2013 Kris BLIESNER S234-0002US 3644
29150 7590 12/10/2019
LEE & HAYES, P.C.
601 W. RIVERSIDE AVENUE
SUITE 1400
SPOKANE, WA 99201
EXAMINER
CHEIN, ALLEN C
ART UNIT PAPER NUMBER
3687
NOTIFICATION DATE DELIVERY MODE
12/10/2019 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):
lhpto@leehayes.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte KRIS BLIESNER
Appeal 2018-000183
Application 13/865,952
Technology Center 3600
Before ALLEN R. MacDONALD, JASON V. MORGAN, and
JOHN R. KENNY, Administrative Patent Judges.
KENNY, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1–21. 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 2nd Watch, Inc.
Appeal Br. 3.
Appeal 2018-000183
Application 13/865,952

2
SPECIFICATION
Appellants’ Specification is directed to methods for providing billing
services for resellers of cloud computing commodities. Spec. ¶ 2.
ILLUSTRATIVE CLAIMS
Claims 1 and 5, reproduced below, are illustrative of the claimed
subject matter:
1. A method for distributing a consolidated bill for cloud
computing services comprising:
obtaining, by a rebilling server from a cloud-computing-
services provider during a billing period, the consolidated bill;
identifying, by the rebilling server, a plurality of entities
that were billed at a blended billing rate determined based at least
in part on aggregate usage of a cloud-computing resource in one
or more variously shared network devices in a heterogeneous
distributed computing environment by the identified plurality of
entities, and further based at least in part on a plurality of term-
based discount entitlements associated with the identified
plurality of entities;
selecting, by the rebilling server, an entity of the identified
plurality of entities as being individually associated with one or
more entity-specific term-based discount entitlements;
obtaining, by the rebilling server, periodic usage statistics
corresponding to cloud-computing-resource usage in the one or
more variously shared network devices specific to the selected
entity during the billing period;
determining, by the rebilling server, based at least in part
on the periodic usage statistics and the one or more entity-
specific term-based discount entitlements, a first billing rate for
a first amount of the cloud-computing resource in association
with a cost increment and specific to at least some of the entity-
specific cloud-computing-resource usage, the first billing rate
being a discounted billing rate;
Appeal 2018-000183
Application 13/865,952

3
determining, by the rebilling server, based at least in part
on the periodic usage statistics, a second billing rate for a second
amount of the cloud-computing resource in association with the
cost increment and applicable to at least some of the entity-
specific cloud-computing-resource usage to which the one or
more entity-specific term-based discount entitlements does not
apply;
computing, by the rebilling server, based at least in part on
the first billing rate for the first amount of the cloud-computing
resource in association with the cost increment and, on the
second billing rate, and on the periodic usage statistics, an
unblended entity-specific cost for the second amount of the
cloud-computing resource in association with the cost increment
for the selected entity corresponding to the entity-specific cloud-
computing-resource usage, the first amount of the cloud-
computing resource being a higher amount of the cloud-
computing resource than the second amount of the cloud-
computing resource; and
storing, by the rebilling server, the unblended entity-
specific cost for the higher amount of the cloud-computing
resource in association with the cost increment for the selected
entity, the cloud-computing resource being selected from a group
consisting of memory, storage, and bandwidth.

5. The method of Claim 4, further comprising:
identifying, according to the periodic usage statistics,
cloud-computing-resource usage by the selected entity that was
billed at the second billing rate, but that with an immaterial
modification could have been billed at the first billing rate for a
first amount of the cloud computing resource in association with
a cost increment and according to an un-utilized term based
discount entitlement; wherein the immaterial modification
comprises re-provisioning at least one cloud-computing
commodity from a standard-priced smaller instance to a larger
reserved instance; and
Appeal 2018-000183
Application 13/865,952

4
recommending the re-provisioning of the at least one
cloud-computing commodity.
REJECTION
Claims 1–21 stand rejected under 35 U.S.C. § 101 as directed to
patent ineligible subject matter. Final Act. 7.
ANALYSIS
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 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 exception, we are
guided by the Supreme Court’s two-step framework, described in Mayo and
Alice. Alice, 573 U.S. 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 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.”) (emphasis omitted); 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);
Appeal 2018-000183
Application 13/865,952

5
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 [of] rubber products” (Diamond v. Diehr, 450 U.S. 175,
191 (1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267–68 (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
mathematical formula.” Diehr, 450 U.S. at 187, 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. at 191 (citing Benson and Flook); id. 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.”) (Emphasis omitted).
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
Appeal 2018-000183
Application 13/865,952

6
concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-
eligible application.” Alice, 573 U.S. at 221 (quoting Mayo, 566 U.S. at 72,
79). “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.
B. USPTO Section 101 Guidance
The United States Patent and Trademark Office (“USPTO”) recently
published revised guidance on the application of section 101. USPTO’s
January 7, 2019 Guidance, 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50 (“Guidance”); see also USPTO, October 2019
Update: Subject Matter Eligibility, available at https://www.uspto.gov/sites/
default/files/documents/peg_oct_2019_update.pdf (Oct. 17, 2019). Under
that Guidance, we first look to whether the claim recites:
(1) (see Guidance Step 2A—Prong One) any judicial
exceptions, including certain groupings of abstract ideas (i.e.,
mathematical concepts, certain methods of organizing human activity
such as commercial or legal interactions, or mental processes); and
(2) (see Guidance Step 2A—Prong Two) additional elements
that integrate the judicial exception into a practical application (see
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
Appeal 2018-000183
Application 13/865,952

7
(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 Step 2B.
C. Representative Claims
Appellant argues claims 1, 3, 7–21 as a group and claims 2, 4, 5, and 6
as a group. Appeal Br. 18–26. We select claims 1 and 5 as representative of
these respective groups.2 See 37 C.F.R. § 41.37(c)(1)(iv).
D. Claim 1
We agree with the Examiner that claim 1 does not recite eligible
subject matter for the reasons discussed below.
1. Alice Step One
a. USPTO Step 2A—Prong One
The Examiner determines that claim 1 is directed to, for example,
analyzing a bill for cloud computing services. Final Act. 7. Appellant
argues that Examiner erred by not analyzing claim 1 as a whole and argues
that this case is not analogous to the cases establishing subject matter
ineligibility. Appeal Br. 17–20.
Consistent with the Examiner’s findings, we determine that claim 1
recites fundamental economic practices and commercial interactions, which
are two of the certain methods of organizing human activity identified in the
Guidance as constituting abstract ideas. Guidance 52 (identifying
“fundamental economic . . . practices” and “commercial or legal interactions

2 We chose claim 5 because Appellant specifically addresses limitations of
claim 5 when arguing for the patentability of claims 2, 4, 5, and 6. Appeal
Br. 24–25.
Appeal 2018-000183
Application 13/865,952

8
(including agreements in the form of contracts; legal obligations;
advertising, marketing or sales activities or behaviors; business relations” as
among the certain methods of organizing human activity that are abstract
ideas).
The preamble or claim 1 recites “[a] method for distributing a
consolidated bill for cloud computing.” A method for distributing a bill is
both a fundamental economic practice and a commercial interaction. Claim
1 also recites: obtaining a consolidated bill, identifying entities billed at
particular rates, selecting entities with discount entitlements, determining
usage statistics, determining first and second billing rates, computing an
entity specific cost, and storing the entity specific cost. All of these
recitations recite both fundamental economic practices and commercial
interactions, and, therefore, recite abstract ideas. Guidance 52 n. 13; see
also Alice, 573 U.S. at 219–20 (concluding that use of a third party to
mediate settlement risk is a fundamental economic practice); id. (describing
the concept of risk hedging in Bilski as a method of organizing human
activity”); Bilski, 561 U.S. at 611–12 (concluding that hedging is a
“fundamental economic practice”); Inventor Holdings, LLC v. Bed Bath &
Beyond, Inc., 876 F.3d 1372, 1378–79 (Fed. Cir. 2017) (holding that concept
of “local processing of payments for remotely purchased goods” is a
“fundamental economic practice.”).
b. USPTO Step 2A—Prong Two
Prong Two of the Guidance instructs us to examine whether a claim
recites additional elements that integrate a judicial exception into a practical
application and to do so by evaluating the claim as a whole. Guidance 54.
Appeal 2018-000183
Application 13/865,952

9
One exemplary consideration is whether an additional element reflects an
improvement in the functioning of a computer or an improvement to other
technology or a technical field. Id. at 55. Appellant argues that the
following recitations in claim 1 are directed to an improvement in
technology:
computing . . . an unblended entity-specific cost for the second
amount of the cloud-computing resource in association with the
cost increment . . . corresponding to the entity-specific cloud-
computing-resource usage, the first amount of the cloud-
computing resource being a higher amount . . . than the second
amount of the cloud-computing resource; and storing . . . the
unblended entity-specific cost for the higher amount of the
cloud-computing resource in association with the cost increment
. . . the cloud-computing resource being selected from a group
consisting of memory, storage, and bandwidth.
Appeal Br. 20–21. We are not persuaded by this argument. The quoted
recitations are directed to billing for a cloud-computing resource, rather than
a technological improvement regarding cloud computing. Consistent with
this fact, the Specification describes its disclosure as being “directed to
providing billing services for resellers of cloud computing commodities.”
Spec. ¶ 2. And “merely limiting the field of use of the abstract idea to a
particular existing technological environment does render the claims any less
abstract.” Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253,
1259 (Fed. Cir. 2016).
Appellant also argues that claim 1 is analogous to claim 2 of Example
21 provided in the USPTO’s July 2015 Update Appendix 1: Examples.
(“July 2015 Appendix”). Appeal Br. 23–24. We disagree. Claim 2 in
Example 21 “addresses the Internet-centric challenge of alerting a subscriber
with time sensitive information when the subscriber’s computer is offline.”
Appeal 2018-000183
Application 13/865,952

10
July 2015 Appendix, 4. Claim 2 does this “by transmitting the alert over a
wireless communication channel to activate the stock viewer application,
which causes the alert to display and enables the connection of the remote
subscriber computer to the data source over the Internet when the remote
subscriber computer comes online.” Id. As Example 21 explains, “[t]hese
are meaningful limitations that add more than generally linking the use of
the abstract idea (the general concept of organizing and comparing data) to
the Internet, because they solve an Internet‐centric problem with a claimed
solution that is necessarily rooted in computer technology.” Id. In contrast,
the quoted recitations above limit billing practices, not computer technology.
The Guidance lists other indicia of integration. Guidance 55. None
are present in claim 1.
For example, “[t]ransformation and reduction of an article ‘to a
different state or thing’ is the clue to patentability of a process claim that
does not include particular machines.” Bilski, 561 U.S. at 604 (emphasis
added), quoted in MPEP § 2106.05(c). Yet “not all transformations . . .
infuse an otherwise ineligible claim with an ‘inventive concept.”’ DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014).
Claim 1's method does not transform a physical object or substance.
In this way, the claim is unlike the transformations found in some eligible
claims. See, e.g., Diehr, 450 U.S. at 184 (a process that transforms rubber).
Therefore, claim 1 does not integrate a judicial exception into a
practical application.
Appeal 2018-000183
Application 13/865,952

11
2. Alice Step Two/USPTO Step 2B
For Alice Step Two, Appellant argues the elements of claim 1 recite a
non-conventional and non-generic arrangement of features and, therefore,
are patent eligible under Bascom Global Internet Services, Inc. v. AT&T
Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016). Appeal Br. 25–26. In
particular, Appellant asserts that “claim 1 recites a non-conventional
arrangement of features for conducting a ‘method for distributing a
consolidated bill for cloud computing services,’ such as ‘an unblended
entity-specific cost,’ multiple ‘billing rates,’ ‘cost increments,’ ‘discount
entitlements,’ and ‘entity specific cloud-computing-resource usage,’ which
in combination allow for the unblended entity specific cost.” Id. at 26. We
are not persuaded by this argument because this purportedly non-
conventional arrangement of features is directed to a solution for billing
practices, not any improvement in technology, like in Bascom. Bascom, 827
F.3d at 1351 (“The . . . patent [challenged in Bascom] is . . . claiming a
technology-based solution (not an abstract-idea based solution implemented
with generic technical components in a conventional way) . . . .”).
Thus, we determine claim 1 does not have additional recitations that
individually or as an ordered combination make it significantly more than its
patent-ineligible abstract idea.
3. Preemption
Appellants further argue that claim 1 is patent eligible because, even if
the claim were deemed to recite an abstract idea, claim 1 would not preempt
others from using any such idea. Appeal Br. 27. We are not persuaded by
this assertion because even if we were to accept the proposition that claim 1
Appeal 2018-000183
Application 13/865,952

12
would not preempt any abstract idea, that proposition would not render
claim 1 patent eligible. Although preemption may denote patent
ineligibility, its absence does not demonstrate patent eligibility. See
FairWarning, IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1098 (Fed. Cir.
2016). For claims covering a patent-ineligible concept, preemption concerns
“are fully addressed and made moot” by an analysis under the Mayo/Alice
framework. Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1379 (Fed. Cir. 2015).
Thus, we sustain the section 101 rejection of claim 1, and of claims 3
and 7–21, not argued separately.
E. Claim 5
Claim 5 incorporates the limitations of claim 1 by dependency. The
analysis regarding those incorporated limitations is the same as for claim 1.
Further, relying on a limitation expressly recited by claim 5, Appellant
argues that claim 5 contains “features that amount to ‘significantly more’
than the alleged abstract idea because the claimed features solve a problem
that is necessarily rooted in computer technology in order to overcome a
problem specifically arising in the realm of cloud computing systems, and
improve the functioning of the computer itself.” Appeal Br. 24. This
argument could be directed to Prong Two of USPTO Guidance Step 2A.
Appellant notes that the Specification discloses that “the functionality
provided by a commodity usage would not be materially impaired by
switching from a less capable class of computing commodity usage to a
more capable class of the same service.” Id. at 25 (quoting Spec. ¶ 59).
Appellant argues that “in many instances there may be potential savings
‘that may be available by making immaterial modifications such as re-
Appeal 2018-000183
Application 13/865,952

13
provisioning certain commodity usage to make more efficient use of
available discount entitlements.’” Id. (quoting Spec. ¶ 61). Further,
Appellant asserts “claim 5 recites, a recommendation can be made based on
the determinations of the method for ‘re-provisioning’ ‘at least one cloud-
computing commodity from a standard-priced smaller instance to a larger
reserved instance.’” Id. According to Appellant, “[r]e-provisioning can
result in processing power and memory being better utilized by cloud-
computing systems while maintaining the same level of performance, and
savings may be experienced by users of the cloud-computing systems.” Id.
We are not persuaded by these arguments. Claim 5 merely recites
providing a recommendation for lowering billing costs by transitioning from
one class of computing to another. The recitations of claim 5 concern billing
practices and recommendations, rather than solutions regarding computer
technology.
Thus, we sustain the section 101 rejection of claim 5 and of claims 2,
4, and 6, not separately argued.
CONCLUSION
The Examiner’s rejection is affirmed.
DECISION SUMMARY
In summary:
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1–21 101 Eligibility 1–21

Appeal 2018-000183
Application 13/865,952

14
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