Lipsky, Scott Eric. et al.

Patent Trials and Appeals Board

Nov 4, 2019

11402354 - (D) (P.T.A.B. Nov. 4, 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.
11/402,354 04/12/2006 Scott Eric Lipsky 26295-23957 7605
87851 7590 11/04/2019
Facebook/Fenwick
Silicon Valley Center
801 California Street
Mountain View, CA 94041
EXAMINER
SUMMERS, KIERSTEN V
ART UNIT PAPER NUMBER
3688
NOTIFICATION DATE DELIVERY MODE
11/04/2019 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):
fwfacebookpatents@fenwick.com
ptoc@fenwick.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte SCOTT ERIC LIPSKY and CHEN YU
Appeal 2019-000329
Application 11/402,354
Technology Center 3600
Before ST. JOHN COURTENAY III, LARRY J. HUME, and
PHILLIP A. BENNETT, Administrative Patent Judges.
BENNETT, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 29, 30, 32, 33, 35–37, 41, 52–54, 56,
and 59–64. Non-Final Act. 1. We have jurisdiction under 35 U.S.C. § 6(b).
We affirm.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42(a). Appellant identifies the real party in interest as Facebook,
Inc. Appeal Br. 2.
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CLAIMED SUBJECT MATTER
The claims relate to dynamically optimizing the presentation of
advertising messages. Spec., Title. Claim 29, reproduced below, is
illustrative of the claimed subject matter:
29. A non-transitory computer-readable storage medium
whose contents cause a computing device to perform operations
comprising:
presenting advertising messages of an advertising
campaign over a network to users of a plurality of users of a
plurality of client computer systems, the advertising campaign
comprising a cost package including a cost to an advertiser for
presenting combinations of different advertising messages in
different placements within an online page, each combination of
an advertising message in a placement for the cost package
having an initial allocation for the advertising campaign;
tracking over the network a performance of the advertising
campaign with respect to each of the combinations across the
plurality of users;
based upon the tracking, attributing a performance score
to each of the combinations;
dynamically adjusting the initial allocations for the
campaign such that combinations of advertising messages in
placements that have higher performance scores compared to
other combinations are given increased allocations and
combinations of advertising messages in placements that have
lower performance scores compared to other combinations are
given reduced allocations; and
presenting advertising messages of the advertising
campaign according to the adjusted allocations.
App. Br. 18 (Claims Appendix).2

2 We note Appellant failed to include page numbering in the Appeal Brief.
Our references to page numbers within the respective Briefs are based on the
first page (having the case caption) being considered as page 1, and the
remaining pages numbered consecutively. Appellant is encouraged to
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REJECTIONS
Claims 29, 30, 32, 33, 35–37, 41, 52–54, 56, and 59–64 stand rejected
under the judicially created doctrine of obviousness-type double patenting as
being unpatentable over claims 1–7 of U.S. Patent 7,031,932. Non-Final
Act. 24. Appellant does not challenge this rejection in the Appeal Brief.
Accordingly, we summarily affirm the double patenting rejection.
Claims 29, 30, 32, 33, 35–37, 41, 52–54, 56, and 59–64 stand rejected
under 35 U.S.C. § 101 as being directed to ineligible subject matter. Non-
Final Act. 25.
ANALYSIS
Legal Standard
In issues involving subject matter eligibility, our inquiry focuses on
whether the claims satisfy the two-step test set forth by the Supreme Court in
Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014). The Court instructs us
to “first determine whether the claims at issue are directed to a patent-
ineligible concept,” Id. at 217–18, and, in this case, the inquiry centers on
whether the claims are directed to an abstract idea. If the initial threshold is
met, we then move to the second step, in which we “consider the elements of
each claim both individually and ‘as an ordered combination’ to determine
whether the additional elements ‘transform the nature of the claim’ into a
patent-eligible application.” Id. (quoting Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 566 U.S. 66, 79, 78 (2012)). The Court describes
the second step as a search for “an ‘“inventive concept”’—i.e., an element or

include page numbering in order to allow for efficient review of the issues
presented.
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combination of elements that is ‘sufficient to ensure that the patent in
practice amounts to significantly more than a patent upon the [ineligible
concept] itself.’” Id. (quoting Mayo, 566 U.S. at 72–73).
The USPTO has published revised guidance on the application of
§ 101 consistent with Alice and subsequent Federal Circuit decisions.
USPTO, 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed.
Reg. 50 (Jan. 7, 2019) (“Guidance”). Under the Guidance, we first look to
whether the claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
organizing human activity such as a fundamental economic
practice, or mental processes) (referred to Step 2A, prong 1 in
the Guidance); and
(2) additional elements that integrate the judicial exception into
a practical application (see MPEP §§ 2106.05(a)–(c), (e)–(h))
(referred to Step 2A, prong 2 in the Guidance).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then move to Step 2B of the
Guidance. There, we look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is not “well-understood, routine, conventional” in the field (see
MPEP § 2106.05(d)); or
(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 52.
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Examiner’s Findings and Conclusion
In the first step of the Alice inquiry (Step 2A, prong 1 of the
Guidance), the Examiner determines the claims are directed to an abstract
idea of “changing initial allocations based on performance to increase
revenue (e.g. spending more on better performing ads, and less on inferior
performing ads).” Non-Final Act. 25. The Examiner further determines:
Changing initial allocations based on performance to increase
revenue (e.g. spending more on better performing ads, and less
on inferior performing ads to increase revenue), is a fundamental
economic practice as well as an idea ‘of itself’ and hence the
claims include an abstract idea.
Non-Final Act. 25.
In the second step of the Alice inquiry (Step 2A, prong 2 and Step 2B
of the Guidance), the Examiner determines:
[T]he claim(s) do not include additional elements that are
sufficient to amount to significantly more than the judicial
exception because the additional elements in claim when
considered alone and in combination amount to no more than:
(1) Adding the words “apply it” (or an equivalent) with the
judicial exception, or mere instructions to implement an abstract
idea on a computer . . .
(2) Simply appending well-understood, routine, and
conventional activities previously known to the industry,
specified at a high level of generality, to the judicial exception,
e.g. a claim to an abstract idea requiring no more than a generic
computer to perform generic computer functions that are well-
understood, routine, and conventional activities previously
known the industry [including]:
(a) performing repetitive calculations: “dynamically
adjusting” and “dynamically assigning;”
(b) receiving or transmitting data over a network, e.g.
using the Internet to gather data;
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(c) receiving, processing, and storing data; automating
mental tasks;
(d) electronic recordkeeping; and
(3) Generally linking the use of the judicial exception to a
particular technological environment or field of use.
Non-Final Act. 26–27.
Appellant’s Contentions
Appellant presents several arguments in favor of eligibility of the
claims. In the briefing, Appellant and Examiner refer to the common law,
analogy-driven approach adopted by the Federal Circuit in Amdocs (Israel)
Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016) to
determine whether a patent claim recites an “abstract idea” under Alice—
that is, to look at earlier cases with “a similar or parallel descriptive nature”
— i.e., similar fact patterns. Appeal Br. 4–16; see Amdocs, 841 F.3d at
1295. In addition, Appellant also refers to prior USPTO guidance regarding
§ 101, including the July 2015 Update on Subject Matter Eligibility, 80 Fed.
Reg. 45,429 (July 30, 2015) (“the July 2015 Update”). Appeal Br. 15.
However, the prior guidance has been superseded by the 2019 Revised
Guidance. See 2019 Revised Guidance, 84 Fed. Reg. at 52. As such, our
analysis will not address the sufficiency of the Examiner’s rejection against
the cited prior guidance. Rather, our analysis will comport with the 2019
Revised Guidance. We will also review patent eligibility under § 101 de
novo as discussed below. Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333
(Fed. Cir. 2012).
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Revised Guidance, Step 2A, Prong One 3
The Judicial Exception
Applying the guidance set forth in the Guidance, we are not persuaded
of Examiner error. The Guidance instructs us first to determine whether any
judicial exception to patent eligibility is recited in the claim. The guidance
identifies three judicially-excepted groupings: (1) mathematical concepts,
(2) certain methods of organizing human activity such as fundamental
economic practices, and (3) mental processes. We focus here on the
second— certain methods of organizing human activity.
Claim 29 recites4 the following limitations: (1) “presenting advertising
messages of an advertising campaign . . . to users of a plurality of users of a
plurality of client computer systems, the advertising campaign comprising a
cost package including a cost to an advertiser for presenting combinations of
different advertising messages in different placements within an online page,
each combination of an advertising message in a placement for the cost
package having an initial allocation for the advertising campaign,” (2)
“tracking . . . a performance of the advertising campaign with respect to each
of the combinations across the plurality of users,” (3) “attributing a
performance score to each of the combinations,” (4) “dynamically adjusting

3 Throughout this opinion, we give the claim limitations the broadest
reasonable interpretation consistent with the Specification. See In re Morris,
127 F.3d 1048, 1054 (Fed. Cir. 1997).
4 We select claim 29 as representative. 37 C.F.R. § 41.37(c)(iv) (“When
multiple claims subject to the same ground of rejection are argued as a group
or subgroup by Appellant, the Board may select a single claim from the
group or subgroup and may decide the appeal as to the ground of rejection
with respect to the group or subgroup on the basis of the selected claim
alone.”).
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the initial allocations for the campaign such that combinations of advertising
messages in placements that have higher performance scores compared to
other combinations are given increased allocations and combinations of
advertising messages in placements that have lower performance scores
compared to other combinations are given reduced allocations,” and (5)
“presenting advertising messages of the advertising campaign according to
the adjusted allocations.” Appeal Br. 18 (Claims Appendix).
These limitations, under their broadest reasonable interpretation,
recite certain methods of organizing human activity — commercial
interactions (advertising, marketing or sales activities) as defined in the
guidance. Limitation (1) recites presenting advertising messages from an
advertising campaign, along with specifying business parameters and
transactional attributes of the advertising campaign. Limitation (2) recites
the practice of tracking the performance of the advertising campaign.
Limitations (3) and (4) recite adjusting allocations of these advertising
messages based on attributed performance scores. Limitation (5), which
recites presenting advertising messages according to the adjusted allocations
implements the familiar practice of delivering advertising to consumers.
Accordingly, we conclude claim 29 recites a judicial exception of certain
methods of organizing human activity, and more specifically a commercial
interaction.
Revised Guidance, Step 2A, Prong Two
Integration of the Judicial Exception into a Practical Application
Having determined that claim 29 recites a judicial exception, our
analysis under the Memorandum turns now to determining whether claim 29
is directed to the recited judicial exception. We do so by determining
whether there are “additional elements that integrate the [judicial] exception
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into a practical application.” See Memorandum (Step 2A, prong 2), see also
MPEP § 2106.05(a)–(c), (e)–(h)). The only elements additional to the
recited judicial exception is the recitation of a “computer-readable storage
medium” and a “computing device” and “over a network.” However, it is
well-established the nominal recitation of such storage medium and
computing device does not take the claim limitation out of the certain
methods of organizing human activity grouping, and is not sufficient to
integrate the judicial exception into a practical application.
Appellant argues the claims are eligible based on their similarity to
those found eligible in McRO, Inc. v. Bandai Namco Games America Inc.,
837 F.3d 1299 (Fed. Cir. 2016). App. Br. 10–12. Specifically, Appellant
argues that like the claim in McRo, the claims “recite a process without a
human analogue.” App. Br. 12. We are not persuaded McRO controls here.
In holding the invention in McRO eligible, the Federal Circuit found “the
automation goes beyond merely ‘organizing [existing] information into a
new form’ or carrying out a fundamental economic practice.” McRO, Inc. v.
Bandai Namco Games Am. Inc., 837 F.3d 1299, 1315 (Fed. Cir. 2016). The
court further determined that the claims provided a specific and identifiable
improvement to computer technology. McRO, Inc. v. Bandai Namco Games
Am. Inc., 837 F.3d 1299, 1313 (Fed. Cir. 2016) (“[T]he claimed
improvement here is allowing computers to produce ‘accurate and realistic
lip synchronization and facial expressions in animated characters’ that
previously could only be produced by human animators.”). In contrast,
Appellant’s claims merely use a computer to carry out an improved
advertising method. That is, unlike the claims in McRO, the claims use
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computers and networks only as tools to perform the recited judicial
exception.
Appellant argues the claims amount to more than the judicial
exception because “[e]ven if the underlying idea were known, the
application here is inventive because prior to the priority date of this
application in 1999, almost 20 years ago, no methods had been developed to
gauge the performance of advertisements in various placements, as
evidenced in part by the lack of prior art cited by the examiner, and as
shown above in section II of this document.” Appeal Br. 16. We disagree.
This argument lacks merit because it presupposes that any claim
found to be novel and non-obvious over prior art cannot be found to be
ineligible in the Alice/Mayo framework. We are aware of no authority or
case supporting this proposition, nor does Appellant cite to any. Patent-
eligibility under 35 U.S.C. § 101 is a threshold requirement that must be
satisfied in addition to being novel, nonobvious, and fully and particularly
described. See Bilski v. Kappos, 561 U.S. 593, 602 (2010). A finding of
novelty or non-obviousness does not necessarily lead to the conclusion that
subject matter is patent-eligible. “Groundbreaking, innovative, or even
brilliant discovery does not by itself satisfy the § 101 inquiry.” Ass’n for
Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013).
Appellant’s approach to the Alice step 2 search for an inventive concept is
inconsistent with the legal framework established in the Patent Act, as it
would limit the application of 35 U.S.C. § 101 to only those claims found to
be otherwise unpatentable under other sections of the Act (e.g., 35 U.S.C.
§§ 102, 103, and 112). In short, because nearly all of the limitations in claim
29 are part of the abstract idea itself, any improvements provided by the
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claim are in the abstract realm, and they are insufficient to integrate the
recited abstract idea into a practical application. SAP Am., Inc. v. InvestPic,
LLC, 898 F.3d 1161, 1168 (Fed. Cir. 2018) (“What is needed is an inventive
concept in the non-abstract application realm.”). Accordingly, we conclude
claim 29 is directed to a judicial exception.
The Inventive Concept – Step 2B
Having determined the claim is directed to a judicial exception, we
proceed to evaluating whether the claim adds a specific limitation beyond
the judicial exception that is not “well-understood, routine, conventional” in
the field (see MPEP § 2106.05(d)) or simply appends well-understood,
routine, conventional activities previously known to the industry, specified
at a high level of generality, to the judicial exception. See Memorandum
(Step 2B). Our review of the Examiner’s rejection under Step 2B is guided
by the revised examination procedure published online by the USPTO on
April 19, 2018, entitled “Changes in Examination Procedure Pertaining to
Subject Matter Eligibility, Recent Subject Matter Eligibility Decision
(Berkheimer v. HP, Inc.)” (“Berkheimer Memorandum”), which imposed a
new fact finding requirement for Examiners, as applicable to rejections
under § 101. We agree with the Examiner that the claim does not add
specific limitations beyond what is well-understood, routine, and
conventional. We agree with the Examiner that claim 29 does not add
specific limitations beyond what is well-understood, routine, and
conventional. See Non-Final Act. 26.
Appellant argues the claims set forth a “non-conventional and non-
generic arrangement” which is sufficient to supply an inventive concept
under BASCOM Global Internet Servs. v. AT&T Mobility LLC, 827 F.3d
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1341 (Fed. Cir. 2016). App. Br. 13–15. We are not persuaded of error. The
claims in Bascom involved content filtering in the Internet, and provided a
technological improvement because “prior art filters were either susceptible
to hacking and dependent on local hardware and software, or confined to an
inflexible one-size-fits-all scheme.” Bascom, 827 F.3d at 1350. The Federal
Circuit emphasized that these technical challenges were met by the “claims
carrv[ing] out a specific location for the filtering system (a remote ISP
server) and requir[ing] the filtering system to give users the ability to
customize filtering for their individual network accounts.” Id. at 1352.
Appellant identifies no comparable improvement provided by the claimed
invention. Rather, the improvements asserted by Appellant are
improvements to advertising (i.e., the abstract idea). App. Br. 15–16.
Appellant further argues the Examiner has failed to provide evidence.
Reply Br. 5–6. The Berkheimer Memorandum provides that the Examiner
may support a finding that an additional element or combination of elements
may be supported by “[a] citation to one or more of the court decisions
discussed in MPEP § 2106.05(d)(II) as noting the well-understood, routine,
conventional nature of the additional element(s).” Berkheimer
Memorandum at 4, § III(A)(2).
Here, the Examiner cites to OIP Technologies, Inc. v. Amazon.com,
Inc., 788 F.3d 1359 (Fed. Cir. 2015), which is discussed in MPEP
§ 2106.05(d)(II) as noting the well-understood, routine, conventional nature
of subject matter similar to the additional limitations in Appellant’s claims.
See Non-Final Act. 13–15. Appellant does not provide any argument or
explanation as to how or why this evidence is insufficient. Accordingly, we
are not persuaded the Examiner erred in the Step 2B analysis.
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Furthermore, as we noted above, with the exception of the recitation
of “storage medium,” “computing device,” and “over a network,” all the
limitations recited in claim 29, form the abstract idea. As such, the
limitations Appellant asserts are inventive cannot be considered “a specific
limitation beyond the judicial exception.” See SAP Am., Inc., 898 F.3d at
1168 (“What is needed is an inventive concept in the non-abstract
application realm.”). Accordingly, we do not discern in claim 29 any
specific limitation beyond the judicial exception that is not “well-
understood, routine, conventional,” and instead agree with the Examiner’s
analysis and findings that the claims do not provide an inventive concept
sufficient to transform the judicial exception into patent-eligible subject
matter. Non-Final Act. 26.
Because the Examiner correctly concluded claim 29 is directed to a
judicial exception, and because Appellant does not identify any error in the
Examiner’s determination under Step 2B of the Guidance, we sustain the
rejection of representative claim 29 under 35 U.S.C. § 101.
In light of the foregoing, we conclude, under the Guidance, that each
of Appellant’s claims on appeal, considered as a whole, is directed to a
patent-ineligible abstract idea that is not integrated into a practical
application and does not include an inventive concept.

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CONCLUSION
We affirm the Examiner’s rejections of the claims.
DECISION SUMMARY
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
29, 30, 32,
33, 35–37,
41, 52–54,
56, 59–64
obviousness-type
double patenting
29, 30, 32,
33, 35–37,
41, 52–54,
56, 59–64

29, 30, 32,
33, 35–37,
41, 52–54,
56, 59–64
101 patent eligibility 29, 30, 32,
33, 35–37,
41, 52–54,
56, 59–64

Overall
Outcome
29, 30, 32,
33, 35–37,
41, 52–54,
56, 59–64

FINALITY AND 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)(1)(iv). See 37
C.F.R. § 41.50(f).
AFFIRMED