Lawrence Ausubel

Patent Trials and Appeals Board

Jul 13, 2021

2021000765 (P.T.A.B. Jul. 13, 2021)

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.
14/826,193 08/13/2015 Lawrence M. Ausubel 4853-0104US 7101
6449 7590 07/13/2021
ROTHWELL, FIGG, ERNST & MANBECK, P.C.
607 14TH STREET, N.W.
SUITE 800
WASHINGTON, DC 20005
EXAMINER
DEGA, MURALI K
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
07/13/2021 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):
PTO-PAT-Email@rfem.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte LAWRENCE M. AUSUBEL
__________________

Appeal 2021-000765
Application 14/826,193
Technology Center 3600
____________________

Before BIBHU R. MOHANTY, JAMES P. CALVE, and
BRUCE T. WIEDER, Administrative Patent Judges.

CALVE, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the decision
of the Examiner to reject claims 1–30. Appeal Br. 2. We have jurisdiction
under 35 U.S.C. § 6(b). Appellant presented arguments at a June 24, 2021
hearing.
We AFFIRM.

1 “Appellant” refers to “applicant” as defined in 37 C.F.R. § 1.42. Appellant
identifies Efficient Auctions LLC as the real party in interest. Appeal Br. 1.
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CLAIMED SUBJECT MATTER
Claims 1, 11, and 21 are independent. Claim 1 recites:
1. A system useful for enabling a bidder to submit bids in a
clock auction of at least one type of item, said system
comprising a computer, one or more user interfaces, and a
network interface, said system comprising:
means for conveying first prices for one or more types of
items to the bidder via a user interface;
means for receiving one or more bids from the bidder via
a user interface, said bids indicating quantities of items
that the bidder wishes to transact;
means for checking whether each of said received bids
satisfies a constraint limiting the indicated quantities of
items and entering the bid only if it satisfies the
constraint;
means for communicating entered bids via the network
interface, said communicating of entered bids occurring
subsequently to the conveying of said first prices;
means for conveying second prices for said one or more
types of items to the bidder via a user interface, said
second prices differing from the first prices for at least
one type of item, said conveying of second prices
occurring subsequently to the communicating of entered
bids;
means for receiving one or more further bids from the
bidder via a user interface, at least one of said further
bids indicating an intra-round price, the intra-round price
situated between the first price and the second price of a
type of item, the at least one of said further bids
indicating a quantity of items that the bidder wishes to
transact at prices above the intra-round price and a
quantity of items that the bidder wishes to transact at
prices below the intra-round price;
means for checking whether each of said further bids
satisfies a constraint limiting the indicated quantities of
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items and entering the bid only if it satisfies the
constraint; and
means for communicating entered further bids via the
network interface, said communicating of entered further
bids occurring subsequently to the conveying of second
prices.
Appeal Br. 17 (Claims App.).
REJECTION
Claims 1–30 are rejected as directed to a judicial exception to
35 U.S.C. § 101 without significantly more.
ANALYSIS
Appellant argues the claims as a group. Appeal Br. 8–16. We select
claim 1 as representative. See 37 C.F.R. § 41.37(c)(1)(iv) (2019).
The Examiner determines that claim 1 recites certain methods of
organizing human activity by managing personal behavior and interactions
of people in bidding transactions that are a fundamental economic practice.
Final Act. 4; Ans. 4. The Examiner determines that the additional elements
of a computer, a user interface, and a network interface are recited at a high
level of generality as generic computer components that perform generic
computer functions of collecting, storing, and transmitting bid information
without imposing any meaningful limits on practicing the abstract idea to
integrate it into a practical application. Final Act. 4–5; Ans. 4, 9–10. The
Examiner determines that the steps can be performed by a human as mental
steps or manually with pen and paper, and they do not improve technology.
Ans. 5, 10–11. The Examiner further determines that the claims recite a
well-understood, routine, and conventional technological environment.
Final Act. 4–6; Ans. 5.
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Principles of Law
Whoever invents or discovers any new and useful
process, machine, manufacture, or composition of matter, or
any new and useful improvement thereof, may obtain a patent
therefor, subject to the conditions and requirements of this title.
35 U.S.C. § 101. Laws of nature, natural phenomena, and abstract ideas are
not patentable. See Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014).
To distinguish patents that claim laws of nature, natural phenomena,
and abstract ideas from those that claim patent-eligible applications, we first
determine whether the claims are directed to a patent-ineligible concept. Id.
at 217. If they are, we consider the claim elements, individually and as an
ordered combination, to determine if any additional elements provide an
inventive concept sufficient to ensure that the claims in practice amount to
significantly more than a patent on the ineligible concept. Id. at 217–18.
The USPTO has issued guidance about this framework. 2019 Revised
Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(“Revised Guidance”). To determine if a claim is “directed to” an abstract
idea, we evaluate whether the claim recites: (1) any judicial exceptions,
including certain groupings of abstract ideas listed in the Revised Guidance
(i.e., mathematical concepts, certain methods of organizing human activities
such as a fundamental economic practice, or mental processes); and
(2) additional elements that integrate the judicial exception into a practical
application.2 Id. at 52–55.

2 “A claim that integrates a judicial exception into a practical application
will 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.” Revised
Guidance, 84 Fed. Reg. at 54.
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If a claim (1) recites a judicial exception and (2) does not integrate
that exception into a practical application, we consider whether the claim
(3) provides an inventive concept such as by adding a limitation beyond a
judicial exception that is not “well-understood, routine, conventional” in the
field or (4) appends well-understood, routine, conventional activities
previously known to the industry, specified at a high level of generality, to
the judicial exception. Revised Guidance, 84 Fed. Reg. at 56.
Revised Guidance Step 1
We agree with the Examiner that claim 1 recites a system, which is a
statutory category of invention, namely, a machine. See Final Act. 3.
Alice Step One
Revised Guidance Step 2A, Prong One:
Do the Claims Recite a Judicial Exception?
We agree with the Examiner that claim 1 recites certain methods of
organizing human activity by managing interactions of people involved in
auction bidding, which is a fundamental economic practice. The steps can
be performed as mental processes. Revised Guidance, 84 Fed. Reg. at 52.
The claims relate to multi-unit auctions that provide bid information
to parties (unlike sealed bidding) and receive bids for items. Spec. ¶¶ 1, 7, 8.
An auctioneer sets bid prices. Bidders submit bids for quantities of items.
Id. ¶¶ 35, 42. Merely placing orders based on displayed or received market
information is a fundamental economic practice. See Trading Techs. Int’l,
Inc. v. IBG LLC, 921 F.3d 1084, 1092 (Fed. Cir. 2019) (“The fact that the
claims add a degree of particularity as to how an order is placed in this case
does not impact our analysis at step one.”); October 2019 Update: Subject
Matter Eligibility, 5 (same) (citing Trading Techs., 921 F.3d at 1092).
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Conducting such activities in a clock auction market does not alter the
analysis or outcome at Prong One where the claim simply transmits market
information (prices) and receives orders (bids). See In re Schrader, 22 F.3d
290, 294 (Fed. Cir. 1994) (“The only physical effect or result which is
required by the claim is the entering of bids in a “record,” a step that can be
accomplished simply by writing the bids on a piece of paper or a chalkboard.
For purposes of § 101, such activity is indistinguishable from the data
gathering steps . . . .”). Similar to claim 1 here, the claim in Schrader recited
a method of bidding on plural items by offering the items to plural bidders,
receiving bids from bidders for individual items and groups of items, and
entering and indexing the bids to identify a bid for all items at a prevailing
total price. Id. at 292. The court determined that the claimed process did
not transform or reduce an article to a different state or thing but involved
only information exchange and data processing steps. Id. at 293–94.
Here, claim 1 recites means for conveying first and second bid prices,
means for receiving bids of bidders using a generic user interface, means for
checking the bids against a constraint, and communicating entered bids over
a generic interface. See Appeal Br. 17 (Claims App.). When recited at this
level of generality, without any technical details beyond generic computer
and network components (Spec. ¶¶ 30–32), such limitations recite a mental
process that can be performed in the human mind. See Schrader, 22 F.3d at
294; Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1355 (Fed. Cir.
2016) (“[M]erely selecting information, by content or source, for collection,
analysis, and display does nothing significant to differentiate a process from
ordinary mental processes, whose implicit exclusion from § 101 undergirds
the information-based category of abstract ideas.”).
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The Specification states, “an auction following these rules could be
conducted manually.” Spec. ¶ 12. Although the computerized conduct of
the auction allows all bidding information to be considered and the amount
of information transmitted to bidders to be controlled (id.), these purported
advantages are not claimed, at least not with technical details. As claimed,
claim 1 recites steps of data transmission, collection, analysis, and display
that can be performed as mental processes or with pen and paper. See Fort
Properties, Inc. v. Am. Master Lease LLC, 671 F.3d 1317, 1322–23 (Fed.
Cir. 2012) (citing with approval Schrader’s holding that patenting a method
of bidding at an auction by entering bids in a record could be accomplished
by writing the bids on a piece of paper or a chalkboard).
The Specification describes a “clock auction” as an auction in which
an auctioneer announces current prices to bidders who bid on items, and the
auctioneer determines whether the auction should continue. Spec. ¶ 41. If
the auctioneer determines the auction should continue, prices are updated.
Otherwise, the auctioneer allocates items among bidders. Id.
The “intra-round price” allows bidders to bid on items at prices they
choose between the first and second round prices. It recites, without any
technical details, a way to bid on items. Thus, it recites another aspect of the
same abstract idea. See RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322,
1327 (Fed. Cir. 2017) (“Adding one abstract idea (math) to another abstract
idea (encoding and decoding) does not render the claim non-abstract.”);
Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016) (“An
abstract idea can generally be described at different levels of abstraction.”);
Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir.
2016) (“[A] claim for a new abstract idea is still an abstract idea.”).
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Checking each received bid to see if it satisfies a constraint limiting
the indicated quantities of items and entering the bid only if it satisfies the
constraint recites another aspect of auction bidding. Constraints are auction
rules that limit a bidder’s ability to increase a bid quantity. Spec. ¶¶ 11, 63.
Bids that satisfy a constraint are entered as valid bids. Id. ¶ 63. Checking
can be done as a mental process by comparing a bid quantity to limits. See
Elec. Power, 830 F.3d at 1354 (“In a similar vein, we have treated analyzing
information by steps people go through in their minds, or by mathematical
algorithms, without more, as essentially mental processes within the
abstract-idea category.”); Intellectual Ventures I LLC v. Capital One Bank
(USA ), 792 F.3d 1363, 1367–69 (Fed. Cir. 2015) (determining whether
financial transactions exceed pre-set spending limits can be performed using
pencil and paper); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d
1366, 1372–73 (Fed. Cir. 2011) (obtaining information about Internet credit
card transactions, making a map of the credit card numbers, and using the
map to determine if a transaction is valid can be performed entirely in the
human mind including logical reasoning steps by writing a list of credit card
transactions from a particular IP address and observing transactions to see if
they use different credit cards and user names at the same IP address).
We do not consider citations to the Revised Guidance in the Answer
as shifting the rejection’s bases when the Revised Guidance issued after the
Final Office Action. Reply Br. 1–2. The Revised Guidance “extracts and
synthesizes key concepts identified by the courts as abstract ideas to explain
that the abstract idea exception includes . . . groupings of subject matter”
like certain methods of organizing human activity––fundamental economic
practices and mental processes. Revised Guidance, 84 Fed. Reg. at 52.
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Claim 1 recites a system that organizes auction activities of a bidder
and auctioneer. The auctioneer sends first and second prices to a bidder who
submits bids that are communicated via a network interface including bids at
an intra-round price. Appeal Br. 17 (Claims App.). The system organizes
bidding activities. As our reviewing court held in TLI Communications:
Consistent with the Supreme Court’s rejection of “categorical
rules” to decide subject matter eligibility, . . . we have applied
the “abstract idea” exception to encompass inventions
pertaining to methods of organizing human activity. . . . Here,
we find that, like the claims at issue in Content Extraction
which were directed to “collecting data,” “recognizing certain
data within the collected data set,” and “storing the recognized
data in memory,” 776 F.3d at 1347, attaching classification
data, such as dates and times, to images for the purpose of
storing those images in an organized manner is a well-
established “basic concept” sufficient to fall under Alice step 1.
In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 613 (Fed. Cir.
2016) (emphasis added); see Content Extraction and Transmission LLC v.
Wells Fargo Bank, National Ass’n, 776 F.3d 1343, 1347 (Fed. Cir. 2014)
(collecting data, recognizing certain data in the collected data set, and
storing recognized data are well-known activities and “humans have always
performed these functions”); see also Berkheimer v. HP Inc., 881 F.3d 1360,
1367 (Fed. Cir. 2018) (“The parsing and comparing of claims 1–3 and 9 are
similar to the collecting and recognizing of Content Extraction, 776 F.3d at
1347, and the classifying in an organized manner of TLI, 823 F.3d at 613.”).
Here, claim 1 receives and classifies bids by quantity, price, and a
constraint, enters bids, and communicates that fact via a generic network
interface. See Intellectual Ventures, 792 F.3d at 1367 (claiming the Internet
and telephone networks does not make the claims any less abstract).
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Applying constraints to filter the bids recites a method of organizing
human activity. BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility
LLC, 827 F.3d 1341, 1348 (Fed. Cir. 2016) (“We agree with the district
court that filtering content is an abstract idea because it is a longstanding,
well-known method of organizing human behavior, similar to concepts
previously found to be abstract.”).
Appellant also asserts that the limitations of claim 1 cannot be
performed as a mental process because the first computer, user interface, and
network interface limitations cannot be ignored and cannot be performed by
a human or in the mind of a person. Reply Br. 3–5. We are not persuaded.
“That purely mental processes can be unpatentable, even when
performed by a computer, was precisely the holding of the Supreme Court in
Gottschalk v. Benson.” CyberSource, 654 F.3d at 1375 (citing Gottschalk v.
Benson, 409 U.S. 63 (1972)). CyberSource held that obtaining credit card
numbers from a database could be performed by reading records of Internet
credit card transactions from a database. Id. at 1372 (“even if some physical
steps are required to obtain information from the database (e.g., entering a
query via a keyboard, clicking a mouse), such data-gathering steps cannot
alone confer patentability”).
Appellant asserts, “[w]hile auctions might be considered an economic
practice, Applicant challenges that enabling bidding as recited in the rejected
claims could be considered a fundamental economic practice.” Reply Br. 3.
Appellant cites a declaration submitted by the inventor as “evidence that the
clock auction (which is the type of auction improved by the claimed
invention) was not at all fundamental, or even long prevalent as of the
priority date of the present application.” Id. (citing Ausubel Decl. ¶ 7).
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Paragraph 7 of the “Declaration Under 37 C.F.R. § 1.132” submitted
by Dr. Lawrence M. Ausubel and dated May 30, 2018 (hereinafter “Ausubel
Decl.”), states that “[c]ontrary to the basis for the rejection, clock auctions
were not a fundamental practice or long prevalent in July 2001, as alleged.
Furthermore, intra-round bids were wholly unknown at the time.” Ausubel
Decl. ¶ 7. Dr. Ausubel does not cite any authority to support his testimony.
As claimed, the clock auction conveys first and second prices of items
to a bidder who submits orders for items at the first round price and an intra-
round price. Such bidding on items is a fundamental economic practice as
the bids are orders for items at particular prices and quantities in an auction
market. Trading Techs., 921 F.3d at 1092; see Schrader, 22 F.3d at 293–94.
Dr. Ausubel’s declaration describes the goal of auctioneers as selling
all items at an optimal price and the risks of overshooting or underselling in
trying to do so. Ausubel Decl. ¶¶ 10–15. Intra-round prices mitigate this
risk of overshooting and underselling and hedge against the risk of selling
less than all items or not obtaining an optimal price for items. Id. Hedging
or protecting against risk is a fundamental economic practice. See Bilski v.
Kappos, 561 U.S. 593, 611 (2010); see also Alice, 573 U.S. at 219–20
(mitigating settlement risk is a fundamental economic practice); Schrader,
22 F.3d at 293 (determining an optimal combination of bids is abstract).
Arguments for Alice, Bilski, Two-Way Media Ltd. v. Comcast Cable
Commc’ns, LLC, 874 F.3d 1329 (Fed. Cir. 2017), and buySAFE, Inc. v.
Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014) are mooted by the Examiner’s
reliance on the recently-issued Revised Guidance to reject the claims under a
judicial exception to § 101. See Ans. 5–8; Appeal Br. 8–13; Reply Br. 6.
Thus, we determine claim 1 recites the abstract idea identified above.
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Alice Step One
Revised Guidance Step 2A, Prong Two:
Is There an Integration into a Practical Application?
We next consider whether claim 1 recites additional elements that
integrate the abstract idea into a practical application. Revised Guidance,
84 Fed. Reg. at 54. We agree with the Examiner that claim 1 does not
improve computers or other technology or implement the abstract idea with
a particular machine that is integral to the claim. Nor does claim 1 include
elements that transform or reduce a particular article to a different state or
thing or apply the abstract idea in a meaningful way beyond linking it to a
particular technological environment. Id. at 55; see Ans. 9–10.
The additional elements of “a computer,” “a user interface,” and “a
network interface” are recited as generic computer components that perform
generic computer functions of transmitting data (prices for items on auction,
entered bids), receiving data (bids from a bidder), and analyzing data (do the
bids satisfy a constraint). Appeal Br. 17 (Claims App.). The Specification
describes these elements in equally generic terms as auction computer 60,
bidder terminal user system 70a, 70b, and auctioneer terminal user system
80 that communicate prices or bids over network 90 that may be any system
capable of providing the communication to and from these computers such
as a local or wide area network, Ethernet, token ring, Internet, World Wide
Web, intranet, virtual private network, telephone system, email system, or a
wireless communications system. Spec. ¶¶ 31–32, Figs. 1–3. The computer
includes “a typical user interface 65, 75a–n, 85 for input/output which may
include a conventional keyboard, display, and other input/output devices.”
Id. ¶ 31. Each user interface is coupled to a network interface that receives
and outputs auction information of bids and prices. Id. ¶¶ 31–35, 43–45.
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We find no evidence that the means for conveying/receiving data,
interpreted in light of the Specification, improve computers, networks, or
other technology. Nor do they represent machines that are integral to the
claims or that transform an article to a different state or thing. They merely
receive and transmit auction data without improving computers, interfaces,
or networks. See Elec. Power, 830 F.3d at 1354 (“[L]imiting the claims to a
particular technological environment of power-grid monitoring is, without
more, insufficient to transform them into patent-eligible applications of the
abstract idea at their core.”); see also Alice, 573 U.S. at 221 (a generic
computer implementation does not transform an abstract idea into a patent-
eligible invention); ChargePoint, Inc. v. Semaconnect, Inc., 920 F.3d 759
(Fed. Cir. 2019) (communication over a network for device interaction is a
building block of the modern economy); WhitServe LLC v. Donuts Inc., 809
F. App’x 929, 933 (Fed. Cir. 2020) (performing a fundamental economic
practice involving simple information exchange is an abstract idea).
Appellant also argues that the declaration of Dr. Ausubel indicates
that the claims solved a technical problem of clock auctions. Reply Br. 6–7.
Dr. Ausubel testifies that auctioneers confronted a problem when they set
prices for a round of an auction that the price might overshoot the optimal
price and result in “undersell” where the auctioneer does not receive orders
for all items being auctioned. Ausubel Decl. ¶ 10. If auctioneers set price
increases in smaller increments to avoid overshooting/undersell, they might
require an unacceptably larger number of auction rounds to sell all of the
items. Id. ¶ 11. According to Dr. Ausubel, intra-round bids “provide a
technical solution to this technical problem” by allowing buyers to submit
bids at prices between the first and second round prices. Id. ¶ 12.
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Dr. Ausubel provides no technical details regarding this process nor
any indication that intra-round bids are implemented using improvements to
computers, interfaces, or networks. Indeed, the Specification confirms that
generic computers and components are used to implement this abstract idea.
Spec. ¶¶ 30–32, 43–45, Figs. 1–4. Even if we consider intra-round pricing
to be a technical innovation, the Specification and Dr. Ausubel describe it as
a feature that uses multiple bids at multiple prices between prices of a first
and a second round. Spec. ¶¶ 78–83; Ausubel Dec. ¶¶ 10–12. Here, claim 1
only requires one further bid (“at least one”) at “an intra-round price” rather
than plural bids at multiple prices where “bidders express their demands in
each round at all prices in the interval from the ‘start-of-round price’ to the
‘end-of-round price’” as Dr. Ausubel testifies. Ausubel Decl. ¶ 12.
Furthermore, merely submitting bids for different quantities of items
at different bid prices involves the abstract idea identified under Prong One.
The Specification illustrates intra-round bids of a bidder between a Round 4
price of $1,000,000 and a Round 5 price of $1,050,000 as follows:
53 units at $1,010,000 per unit;
51 units at $1,020,000 per unit;
49 units at $1,030,000 per unit;
45 units at $1,035,000 per unit;
40 units at $1,040,000 per unit; and
30 units at $1,045,000 per unit.
Spec. ¶¶ 80–82. Appellant indicates this feature involves a bid information
processor receiving a revised price vector through its network interface and
applying the prices via the user interface for the user (auctioneer). Appeal
Br. 4 (summary of claimed subject matter) (citing Spec. ¶¶ 31, 44, Figs. 2, 4,
6, 8). These elements are described generically. Spec. ¶¶ 31–35, 44.
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Any generic speed and efficiency increases from a generic computer
implementation do not improve computer functions. See Customedia Techs,
LLC v. Dish Network Corp., 951 F.3d 1359, 1365 (Fed. Cir. 2020); see also
Bozeman Fin. LLC v. Fed. Reserve Bank of Atlanta, 955 F.3d 971, 979 (Fed.
Cir. 2020) (using well-known computer components to collect, analyze, and
present data does not render the claims any less abstract); Credit Acceptance
Corp. v. Westlake Servs., 859 F.3d 1044, 1055 (Fed. Cir. 2017) (automating
manual processes using generic computers is not a patentable improvement
to computer technology); see also Spec. ¶ 12 (an auction following these
rules can be conducted manually).
Ex Parte Gooch, 2019 WL 6208001, Appeal 2018-004639 (PTAB,
Oct. 7, 2019) involved claims to performing instantiations and “recite[d] a
specific arrangement of classes and the invocation or instantiation of those
classes that integrates the judicial exception into a practical application.” Id.
at *6. Here, claim 1 allows a bidder to bid at “an intra-round price” between
first and second prices. No instantiation is used for intra-round bidding. See
Reply Br. 7–8. Intra-round bidding is part of the abstract idea under Prong
One. Bidders bid for items at a price(s) that they choose. See Spec. ¶¶ 4, 42.
Ex Parte Rabin, 2019 WL 6208265, Appeal 2018-008794 (PTAB Oct.
17, 2019) involved claims that improved computer software functionality by
detecting anomalies occurring during execution of a running program to aid
a software developer in identifying and fixing problems in code to optimize
program performance or find bugs or other problems in the code. Id. at *5.
Here, Appellant has not identified any improvements to computer code or
software functionality recited in claim 1. See Reply Br. 8–9.
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Furthermore, claim 1 here does not optimize computer operations.
The claimed intra-round bid limitation is designed to optimize the sale of
items at a clock auction, which is part of the abstract idea identified above.
There is no indication that Appellant has claimed or used improvements to
computers, interfaces, networks, or other technologies to accomplish this
result. Claim 1 uses generic computer components to do so. This trading
procedure, as implemented on generic computer and network components
used as tools to implement the abstract idea identified above, thus does not
integrate that abstract idea into a practical application. Such optimization is
similar to concepts courts have held to be fundamental economic concepts
when recited at this level of generality. See OIP Techs., Inc. v. Amazon.com,
Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015) (pricing a product for sale using
an automatic pricing method and apparatus in electronic commerce involved
offer-based price optimization, which is similar to other fundamental
economic concepts); In re Gopalan, 809 F. App’x 942, (Fed. Cir. 2020)
(optimizing measurements for spectral signals using an “optimization
technique” and “an optimization parameter” recited an abstract idea without
any technical details or concrete solution to a problem); Schrader, 22 F.3d at
293 (an optimal combination of bids is an abstract idea as claimed).
In OIP, the claimed method tested plural prices for a product by
sending electronic messages with offer terms and prices for products to
potential customers, receiving offers for the products, analyzing the pricing
data to select a price at which to sell the product based on the estimated
outcome determined by the computerized system, and sending a second set
of electronic messages over the network with offers to be presented to
potential customers of the product at the selected price. Id. at 1361.
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Here, claim 1 similarly sends out offers for bid at selected prices and
allows a bidder to submit one or more bids at prices between the first and
second prices to optimize the sale of the items. Essentially, the intra-round
bid allows the auctioneer to select/obtain optimal prices for items. Thus, at
best, intra-round bids may improve the profitability of clock auctions similar
to price optimization in OIP. See OIP, 788 F.3d at 1363 (price optimization
provided a core advantage of reducing the extremely high testing costs of
brute force live price testing of known techniques that cost more, took more
time, and were less accurate by providing more price granularity but did so
by using computers to perform routine tasks of creating electronic records,
tracking multiple transactions, and issuing instructions more quickly or more
accurately, which was insufficient implementation to make the claims patent
eligible); Ausubel Decl. ¶¶ 8–12 (intra-round pricing avoids the need for
smaller price increases and more lengthy auction processes and provides
more information for an auctioneer to decide the exact optimal price and
allocation for auctioned items); Spec. ¶¶ 76–78 (auctions may last a very
long time or risk undersell if larger bid increments are used whereas to the
extent bidders use intra-round bids, sellers “should be expected to attain
higher auction revenues and to reduce the probability of undersell”). We
discern no technical solution to a technical problem in intra-round bids.
The decision Ex Parte Smith, 2019 WL 764497 (PTAB Jan. 31, 2019)
(Informative) found an integration because the claims recited “a specific
timing mechanism in which the execution of a matching order is delayed for
a specific period of time” to allow for other matching orders to be received
from in-market participants. Id. at *5. The use of timing mechanisms and
temporary restraints on trade execution improved trading technology. Id.
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Here, claim 1 lacks a timing mechanism or similar delay in trading of
derivatives or other financial instruments. Instead, bidders submit a bid at
one or more intra-round prices between first and second prices using generic
user interfaces without improvements to computers, networks, or interfaces.
As claimed, the intra-round bid allows bidders to choose a price(s) to bid for
an item as occurs in many auction formats during a round of a clock auction.
See Spec. ¶¶ 4, 42, 43. Combining or narrowing an abstract idea is still an
abstract idea. See RecogniCorp, 855 F.3d at 1327; Apple, 842 F.3d at 1240.
We recognize that “[s]oftware can make non-abstract improvements
to computer technology just as hardware improvements can, and sometimes
the improvements can be accomplished through either route.” Enfish, LLC
v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). “[T]o be directed
to a patent-eligible improvement to computer functionality, the claims must
be directed to an improvement to the functionality of the computer or
network platform itself.” Customedia, 951 F.3d 1359 at 1365.
Here, a clock auction with intra-round bidding is used to mitigate the
risk of undersell and overshooting when obtaining optimal prices for items.
Ausubel Decl. ¶¶ 8–12. Hedging risk is a fundamental economic practice.
Bilski, 561 U.S. at 611. Bilski sought to patent the concept of hedging risk
in energy markets using known random analysis techniques. Id. 612. Here,
claim 1 seeks to hedge risk in a clock auction by using intra-round bids with
generic computers and components that perform generic data processing of
sending and receiving data to auction securities, contracts, commodities,
spectra, and other items. See Spec. ¶¶ 34, 42, 72–83.
Thus, we determine that claim 1 lacks additional elements that are
sufficient to integrate the abstract idea into a practical application.
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Alice, Step Two and Revised Guidance Step 2B:
Do the Claims Include an Inventive Concept?
We next consider whether claim 1 recites any additional elements,
individually or as an ordered combination, to provide an inventive concept.
Alice, 573 U.S. at 217–18. This step is satisfied when claim limitations are
more than well-understood, routine, and conventional activities known in the
industry. Berkheimer, 881 F.3d at 1367; Revised Guidance, 84 Fed. Reg. at
56 (the second step of Alice considers if a claim adds an element beyond the
abstract idea that is not “well-understood, routine, conventional” activity).
The additional elements of “a computer,” “a user interface,” and “a
network interface” are known components that perform well-understood,
routine, and conventional acts of sending and receiving data to implement
the abstract idea without an inventive concept. The generic description of
these elements indicates they are well-known enough that further details are
not required to understand their structure or functions.3 See Spec. ¶¶ 30–33.
Without such generic computer limitations nothing remains in the claims but
the abstract idea identified under Prong One. Bancorp Servs., L.L.C. v. Sun
Life Assur. Co. of Can. (U.S.), 687 F.3d 1266, 1280 (Fed. Cir. 2012). “[A]
claimed invention’s use of the ineligible concept to which it is directed
cannot supply the inventive concept that renders the invention ‘significantly
more’ than that ineligible concept.” BSG Tech LLC v. Buyseasons, Inc., 899
F.3d 1281, 1290 (Fed. Cir. 2018); SAP Am., Inc. v. InvestPic, LLC, 898 F.3d
1161, 1163, 1170 (the asserted advance in the realm of abstract ideas is not
an inventive concept “no matter how groundbreaking the advance.”).

3 Appellant identifies the “means for conveying/receiving/communicating”
as generic user/network interfaces. Appeal Br. 3–5 (claimed subject matter).
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As an ordered combination, claim 1 recites no more than when the
limitations are considered individually. BSG, 899 F.3d at 1290–91 (“If a
claim’s only ‘inventive concept’ is the application of an abstract idea using
conventional and well-understood techniques, the claim has not been
transformed into a patent-eligible application of an abstract idea.”); Elec.
Power, 830 F.3d at 1355 (using off-the-shelf, conventional computer,
network, and display technology to gather, send, and present desired data is
not an inventive concept); see also cxLoyalty, Inc. v. Maritz Holdings Inc.,
986 F.3d 1367, 1377 (Fed. Cir. 2021) (reciting generic and conventional
computer components of a processor, GUI, and API and the functionality to
carry out the abstract idea is not inventive; communication of information by
GUIs and APIs is well-known); Two-Way Media Ltd. v. Comcast Cable
Commc’ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017) (processing, routing,
controlling, and monitoring data reception with conventional technology is
not inventive and complying with network communication protocols to route
data in response to user signals did not claim specific
protocols/parameters).4

4 To the extent the “means for conveying first/second prices,” “means for
receiving one or more bids,” “means for receiving . . . an intra-round price”
invoke functionality described in Appellant’s Figures 4–9c, those flowcharts
describe basic data gathering, processing, and analysis steps using basic
mathematical concepts and principles described in the Specification at
paragraphs 43–89 without any indication that these functions do anything
other than implement the abstract idea using conventional computers and
user/network interfaces to process data. See Elec. Power, 830 F.3d at 1354
(analyzing information by steps people go through in their minds or by
mathematical algorithms, without more, is essentially a mental process in the
abstract-idea category).
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Thus, we sustain the rejection of claim 1 and claims 2–30, which fall
with claim 1.
CONCLUSION
In summary:
Claim(s)
Rejected
35
U.S.C. §
Reference(s)/
Basis
Affirmed Reversed
1–30 101 Eligibility 1–30
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