Loss of Use, Inc.

Patent Trials and Appeals Board

Jun 21, 2021

2021001143 (P.T.A.B. Jun. 21, 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.
14/814,493 07/30/2015 Brenda Lou Perkins 3725254.00003 5767
29156 7590 06/21/2021
K&L Gates LLP-ADMINRPL
P.O. Box 1135
CHICAGO, IL 60690
EXAMINER
POLLOCK, GREGORY A
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
06/21/2021 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):
USpatentmail@klgates.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte BRENDA LOU PERKINS
____________

Appeal 2021-001143
Application 14/814,493
Technology Center 3600
____________

Before NINA L. MEDLOCK, TARA L. HUTCHINGS, and
AMEE A. SHAH, Administrative Patent Judges.

MEDLOCK, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s
rejection of claims 1, 4–17, 21, and 22. We have jurisdiction under
35 U.S.C. § 6(b).
We AFFIRM.

1 We use the term “Appellant” to refer to “applicant,” as defined in
37 C.F.R. § 1.42. Our decision references Appellant’s Appeal Brief
(“Appeal Br.,” filed October 18, 2019) and the Examiner’s Answer (“Ans.,”
mailed October 5, 2020) and Non-Final Office Action (“Non-Final Act.,”
mailed April 18, 2019). Appellant identifies Loss of Use, Inc. as the real
party in interest (Appeal Br. 3).
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CLAIMED INVENTION
The Specification states, “the present invention relates to a claims
processing system for temporary housing claims to eliminate the mark-up
caused by middlemen, such as temporary housing suppliers, by providing
software platforms for managing the temporary housing claims transparently
using outside hotel and housing contractors” (Spec. ¶ 2).
Claims 1 and 21 are the independent claims on appeal. Claim 1,
reproduced below with bracketed notations added, is illustrative of the
claimed subject matter:
1. A claims processing system for processing an
insurance claim for a housing property loss insured by an insurer
comprising:
a controller; and
a memory in communication with the controller, the
memory including instructions that, when executed by the
controller, cause the controller to:
[(a)] receive a claim, the claim including claim
parameters including an anticipated lease term, a location related
to the housing property loss, a loss value, and a number of people
to be housed, wherein the claim is received from the adjuster
subsystem and communicated to the customer experience
subsystem, wherein the adjuster subsystem and customer
experience subsystem are in communication with the controller;
[(b)] generate, via the hotel/housing subsystem in
communication with the controller, a fair market evaluation of
loss based on a type of dwelling, a number of bedrooms, a
number of bathrooms, and a location of the housing property
loss;
[(c)] identify, via the hotel/housing subsystem, a pool of
acceptable housing accommodations matching within a range for
each of the claim parameters, wherein each of the acceptable
housing accommodations is within a predetermined monetary
range of the fair market evaluation of loss;
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[(d)] select, via the customer experience subsystem, a
housing accommodation from the pool of acceptable housing
accommodations;
[(e)] receive, via the hotel/housing subsystem, a vendor
invoice from a vendor providing the selected housing
accommodation including: an amount due, a retail rate, and a
discounted rate; and
[(f)] receive, via the accounting subsystem in
communication with the controller, confirmation of receipt of
payment from the insurer corresponding to the amount due and a
portion of the difference between the retail rate and the
discounted rate.
REJECTION2
Claims 1, 4–17, 21, and 22 are rejected under 35 U.S.C. § 101 as
directed to a judicial exception without significantly more.
ANALYSIS
Appellant argues the pending claims as a group (Appeal Br. 7–14).
We select independent claim 1 as representative. The remaining claims
stand or fall with claim 1. See 37 C.F.R. §41.37(c)(1)(iv).
Under 35 U.S.C. § 101, “[w]hoever 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.” 35 U.S.C.
§ 101. The Supreme Court, however, has long interpreted § 101 to include
an implicit exception: “[l]aws of nature, natural phenomena, and abstract
ideas” are not patentable. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216
(2014).

2 The Examiner has withdrawn the rejection of claim 1 under 35 U.S.C.
§ 112, second paragraph, as indefinite (Ans. 3–4).
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The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66 (2012), “for distinguishing patents that claim
laws of nature, natural phenomena, and abstract ideas from those that claim
patent-eligible applications of those concepts.” Alice Corp., 573 U.S. at 217.
The first step in that analysis is to “determine whether the claims at issue are
directed to one of those patent-ineligible concepts.” Id. If the claims are not
directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry
ends. Otherwise, the inquiry proceeds to the second step where the elements
of the claims are considered “individually and ‘as an ordered combination’”
to determine whether there are additional elements that “‘transform the
nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo,
566 U.S. at 79, 78). This is “a search for an ‘inventive concept’ — i.e., an
element or 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. at 217–18 (alteration in original).
The U.S. Patent and Trademark Office (the “USPTO”) published
revised guidance on January 7, 2019, for use by USPTO personnel in
evaluating subject matter eligibility under 35 U.S.C. § 101. 2019 REVISED
PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50 (Jan. 7,
2019) (the “2019 Revised Guidance”).3 That guidance revised the USPTO’s
examination procedure with respect to the first step of the Mayo/Alice
framework by (1) “[p]roviding groupings of subject matter that [are]

3 The MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) incorporates
the revised guidance and subsequent updates at Section 2106 (9th ed.
Rev. 10.2019, rev. June 2020).
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considered an abstract idea”; and (2) clarifying that a claim is not “directed
to” a judicial exception if the judicial exception is integrated into a practical
application of that exception. Id. at 50.
The first step, as set forth in the 2019 Revised Guidance (i.e.,
Step 2A), is, thus, a two-prong test. In Step 2A, Prong One, we look to
whether the claim recites a judicial exception, e.g., one of the following
three groupings of abstract ideas: (1) mathematical concepts; (2) certain
methods of organizing human activity, e.g., fundamental economic
principles or practices, commercial or legal interactions; and (3) mental
processes. 2019 Revised Guidance, 84 Fed. Reg. at 54. If so, we next
determine, in Step 2A, Prong Two, whether the claim as a whole integrates
the recited judicial exception into a practical application, i.e., whether the
additional elements recited in the claim beyond the judicial exception, 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. Id. at 54–55. Only if
the claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application do we conclude that the claim is
“directed to” the judicial exception, e.g., an abstract idea. Id.
If the claim is determined to be directed to a judicial exception under
revised Step 2A, we next evaluate the additional elements, individually and
in combination, in Step 2B, to determine whether they provide an inventive
concept, i.e., whether the additional elements or combination of elements
amounts to significantly more than the judicial exception itself; only then, is
the claim patent eligible. 2019 Revised Guidance, 84 Fed. Reg. at 56.
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Here, in rejecting the pending claims under § 101, the Examiner
determined that steps (a) through (f) of claim 1 recite processing an
insurance claim for a housing property loss, i.e., a method of organizing
human activity and, therefore, an abstract idea (Non-Final Act. 3–5). The
Examiner also determined that the claim does not include additional
elements that integrate the abstract idea into a practical application; that the
additional elements recited in claim 1 are not sufficient to amount to
significantly more than the abstract idea itself; and that the remaining claims
are patent ineligible for substantially the same reasons (id. at 5–7).
Step One of the Mayo/Alice Framework (2019 Revised Guidance, Step 2A)
We are not persuaded by Appellant’s argument that the Examiner
erred in determining that claim 1 is directed to an abstract idea (Appeal
Br. 18–33). The Federal Circuit has explained that “the ‘directed to’ inquiry
applies a stage-one filter to claims, considered in light of the specification,
based on whether ‘their character as a whole is directed to excluded subject
matter.’” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir.
2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d
1343, 1346 (Fed. Cir. 2015)). It asks whether the focus of the claims is on a
specific improvement in relevant technology or on a process that itself
qualifies as an “abstract idea” for which computers are invoked merely as a
tool. See id. at 1335–36. Here, it is clear from the Specification (including
the claim language) that claim 1 focuses on an abstract idea, and not on an
improvement to technology and/or a technical field.
The Specification is titled “CLAIM PROCESSING SYSTEM FOR
TEMPORARY HOUSING CLAIMS,” and describes that, prior to 1980,
property and casualty (“P&C”) insurers offered no assistance to
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policyholders who needed temporary housing following a loss (Spec. ¶ 4).
“Realizing that this was an overwhelming undertaking for their insured, the
P&C Insurers decided to offer a service to assist their insured”; and “they
teamed up with the temporary housing industry to facilitate Schedule D
claims — additional living expenses” (id.).
The temporary housing industry is part of the hotel industry, and
emerged as an alternative to hotels to meet corporate America’s need to
relocate employees for short-term assignments; in accordance with this
model, a temporary housing supplier, i.e., a middleman retailer, rents goods
and services from various vendors, marks up the original retail costs to cover
overhead and profit, and then rents (subleases) the fully furnished temporary
dwelling to the customer for one all-inclusive price (id. ¶ 6). This cost-plus
model works for corporate business that spend money as an investment,
fully expecting a return on investment (id. ¶ 7). “However, with the P&C
industry all money spent is a loss expense; therefore, controlling actual costs
is of paramount importance” (id.).
The Specification describes that, before teaming up with the
temporary housing industry, the P&C Industry did not perform its due
diligence; “[c]onsequently the P &C Industry has been overcharged . . .
millions of dollars by [its] temporary housing suppliers over the last 30 years
in inflated loss expense payouts — artificially increasing [its] risk liability”
(id. ¶ 5). Previous attempts have been made to solve the problem of
temporary housing overbilling, but, according to the Specification, these
attempts have been largely unsuccessful (id. ¶¶ 16–23). Therefore, “there is
a need for a claims processing system for temporary housing claims to
remove the costly markup of temporary housing suppliers” (id. ¶ 24).
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The claimed invention ostensibly is intended to address this need.
Claim 1, thus, recites a claims processing system for processing an insurance
claim for a housing property loss insured by an insurer comprising a
controller and a memory in communication with the controller. The
memory includes instructions that, when executed by the controller, cause
the controller to: (1) receive a claim including claim parameters, i.e., an
anticipated lease term, a location related to the housing property loss, and a
number of people to be housed, i.e.,
receive a claim, the claim including claim parameters
including an anticipated lease term, a location related to the
housing property loss, a loss value, and a number of people to be
housed, wherein the claim is received from the adjuster
subsystem and communicated to the customer experience
subsystem, wherein the adjuster subsystem and customer
experience subsystem are in communication with the controller
(step (a)); (2) identify a pool of acceptable housing accommodations based
on a fair market evaluation of the housing property loss, i.e.,
generate, via the hotel/housing subsystem in
communication with the controller, a fair market evaluation of
loss based on a type of dwelling, a number of bedrooms, a
number of bathrooms, and a location of the housing property
loss; [and]
identify, via the hotel/housing subsystem, a pool of
acceptable housing accommodations matching within a range for
each of the claim parameters, wherein each of the acceptable
housing accommodations is within a predetermined monetary
range of the fair market evaluation of loss
(steps (b) and (c)); (3) select a housing accommodation from the pool of
acceptable housing accommodations and receive an invoice from the vendor
providing the selected accommodation, i.e., “select, via the customer
experience subsystem, a housing accommodation from the pool of
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acceptable housing accommodations” and “receive, via the hotel/housing
subsystem, a vendor invoice from a vendor providing the selected housing
accommodation including: an amount due, a retail rate, and a discounted
rate” (steps (d) and (e)); and (4) receive confirmation that payment has been
received from the insurer, i.e., “receive, via the accounting subsystem in
communication with the controller, confirmation of receipt of payment from
the insurer corresponding to the amount due and a portion of the difference
between the retail rate and the discounted rate” (step (f)). We agree with the
Examiner that these limitations, when given their broadest reasonable
interpretation, recite “processing an insurance claim for a housing property
loss” (Non-Final Act. 3), i.e., a commercial interaction, which is a method of
organizing human activity and, therefore, an abstract idea. See 2019
Revised Guidance, 84 Fed. Reg. at 52.
Appellant does not challenge the Examiner’s determination that
claim 1 recites an abstract idea. Instead, Appellant maintains that claim 1 is
not directed to an abstract idea because the claim includes additional
elements that improve a technical field and, thus, integrate any alleged
judicial exception into a practical application (Appeal Br. 8–9).
The 2019 Revised Guidance references MPEP, Ninth Edition
(rev. Jan 2018) (available at https://www.uspto.gov/web/offices/
pac/mpep/old/mpep_E9R08-2017.htm) § 2106.05(a)–(c) and (e) in
non-exhaustively listing considerations indicative that an additional element
or combination of elements may have integrated a recited judicial exception
into a practical application. 2019 Revised Guidance, 84 Fed. Reg. at 55.
In particular, the Guidance describes that an additional element may have
integrated the judicial exception into a practical application if the additional
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element (1) reflects an improvement in the functioning of a computer or an
improvement to other technology or technical field; (2) applies or uses the
judicial exception to effect a particular treatment or prophylaxis for a disease
or medical condition; (3) implements the judicial exception with, or uses the
judicial exception with, a particular machine or manufacture integral to the
claim; (4) effects a transformation or reduction of an article to a different
state or thing; or (5) applies or uses the judicial exception in some other
meaningful way beyond generally linking the use of the judicial exception to
a particular technological environment, such that the claim as a whole is
more than a drafting effort designed to monopolize the exception. Id. At the
same time, the Guidance makes clear that merely including instructions to
implement an abstract idea on a computer, or merely using a computer as a
tool to perform an abstract idea; adding insignificant extra-solution activity
to the judicial exception; or only generally linking the use of the judicial
exception to a particular technological environment or field are not sufficient
to integrate the judicial exception into a practical application. Id.
Appellant argues here that “the present system is directed to the
improved technology of a claim processing system for temporary housing
claims by eliminating the mark-up caused by middlemen, such as temporary
housing suppliers” and “by providing software platforms for managing the
temporary housing claims transparently using outside hotel and housing
contractors” (Appeal Br. 9). Appellant asserts that, in contrast to prior art
systems, the present system improves technology by providing
“unobstructed analytical insight into actual supplier costs” and “a P&C
Insurance Industry specific proprietary ‘supplier’ data processing system for
receiving, collecting, recording, storing, monitoring and reporting
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information necessary to process Schedule D claims” (id. at 10), and that
“[t]he present invention creates a technical improvement over the prior art
by providing technology to improve the Schedule D Claims loss to improve
operational efficiency” (id. at 11).
Appellant further explains,
the present system creates a technical improvement by providing
a structural interface between an adjuster system, customer
experience manager subsystem, H/H subsystems, and an
accounting subsystem, wherein the system generates a fair
market evaluation of loss and identifies and selects a housing
accommodation within a predetermined range of the fair market
evaluation of loss
(Appeal Br. 11). But, we are not persuaded that these are technological
improvements as opposed to improvements to the abstract idea of processing
claims for housing property losses, which is not enough for patent eligibility.
See SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1170 (Fed. Cir. 2018)
(“[P]atent law does not protect such claims[, i.e., claims to an asserted
advance in the realm of abstract ideas], without more, no matter how
groundbreaking the advance.”). This is particularly true where, as here, we
find no indication in the Specification that the operations recited in claim 1
require any specialized computer hardware or other inventive computer
components, invoke any allegedly inventive programming, or that the
claimed invention is implemented using other than generic computer
components as tools operating in their normal and ordinary capacity.
We also are not persuaded of Examiner error to the extent Appellant
maintains that claim 1 is patent eligible because it presents no risk of
preemption (Appeal Br. 11–12). Although the Supreme Court has described
“the concern that drives [the exclusion of abstract ideas from patent-eligible
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subject matter] as one of pre-emption,” Alice Corp., 573 U.S. at 216,
characterizing preemption as a driving concern for patent eligibility is not
the same as characterizing preemption as the sole test for patent eligibility.
“The Supreme Court has made clear that the principle of preemption is the
basis for the judicial exceptions to patentability” and “[f]or this reason,
questions on preemption are inherent in and resolved by the § 101 analysis.”
Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir.
2015) (citing Alice Corp., 573 U.S. at 216). “[P]reemption may signal
patent ineligible subject matter, [but] the absence of complete preemption
does not demonstrate patent eligibility.” Id.
We conclude, for the reasons outlined above, that claim 1 recites a
method of organizing human activity, i.e., an abstract idea, and that the
additional elements recited in the claim beyond the abstract idea, i.e., “a
controller” and “a memory in communication with the controller,” are no
more than generic computer components used as tools to perform the recited
abstract idea. As such, they do not integrate the abstract idea into a practical
application. See Alice Corp., 573 U.S. at 223–24 (“[W]holly generic
computer implementation is not generally the sort of ‘additional featur[e]’
that provides any ‘practical assurance that the process is more than a drafting
effort designed to monopolize the [abstract idea] itself.’” (quoting Mayo,
566 U.S. at 77)). Accordingly, we agree with the Examiner that claim 1 is
directed to an abstract idea.
Step Two of the Mayo/Alice Framework (2019 Revised Guidance, Step 2B)
Having determined under step one of the Mayo/Alice framework that
claim 1 is directed to an abstract idea, we next consider under Step 2B of the
2019 Revised Guidance, the second step of the Mayo/Alice framework,
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whether claim 1 includes additional elements or a combination of elements
that provides an “inventive concept,” i.e., whether claim 1 includes
additional elements that amount to “significantly more” than the judicial
exception itself. 2019 Revised Guidance, 84 Fed. Reg. at 56.
We agree with the Examiner that claim 1 does not include any such
additional elements. And Appellant does not present any arguments to the
contrary.
We are not persuaded, on the present record, that the Examiner erred
in rejecting claim 1 under 35 U.S.C. § 101. Therefore, we sustain the
Examiner’s rejection of claim 1, and claims 4–17, 21, and 22, which fall
with claim 1.
CONCLUSION
In summary:
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1, 4–17,
21, 22
101 Eligibility 1, 4–17,
21, 22

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