Madisetti, Vijay

Patent Trials and Appeals Board

Apr 1, 2021

2021000148 (P.T.A.B. Apr. 1, 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.
16/286,932 02/27/2019 Vijay Madisetti 3026.00019 7514
39682 7590 04/01/2021
Widerman Malek, PL
1990 W. New Haven Avenue, Suite 201
Melbourne, FL 32904
EXAMINER
NGUYEN, LIZ P
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
04/01/2021 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):
Docket@USLegalTeam.com
Michelle@USLegalTeam.com
patentdocket@uslegalteam.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
________________

Ex parte VIJAY MADISETTI and ARSHDEEP BAHGA
________________

Appeal 2021-000148
Application 16/286,932
Technology Center 3600
________________

Before CAROLYN D. THOMAS, BRADLEY W. BAUMEISTER, and
JEREMY J. CURCURI, Administrative Patent Judges.

BAUMEISTER, Administrative Patent Judge.

DECISION ON APPEAL
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner’s final
rejection of claims 1–16, which constitute all of the pending claims.1
Appeal Br. 6–7. These claims stand rejected under 35 U.S.C. § 101 as being
directed to a judicial exception to patent-eligible subject matter (an abstract
idea) without significantly more. Final Office Action 3–6, mailed Nov. 15,
2019 (“Final Act.”).2 We have jurisdiction under 35 U.S.C. § 6(b). We
AFFIRM.

1 Appellant identifies the real party in interest as Vijay Madisetti. Appeal
Brief 3, filed April 14, 2020 (“Appeal Br.”).
2 Claim 1–16 were also rejected on the ground of nonstatutory double
patenting (Final Act. 8–9), but Appellant subsequently filed a terminal
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STANDARD OF REVIEW
The Board conducts a limited de novo review of the appealed
rejections for error based upon the issues identified by Appellant, and in
light of the arguments and evidence produced thereon. Ex parte Frye,
94 USPQ2d 1072, 1075 (BPAI 2010) (precedential).

CLAIMED SUBJECT MATTER
Appellant describes the present invention as follows:
A method of exchanging value across a blockchain
network including receiving lending offers from lenders,
recording each lending offer to a lender smart contract on a
blockchain network, and recording the lender smart contracts,
defining a lending pool, to a lending pool smart contract on the
blockchain network including lending pool conditions. The
method may further include receiving a borrower request from a
borrower including borrower conditions, recording the borrower
request to a borrower smart contract on the blockchain network,
determining if the borrower conditions fall within the lending
pool conditions, and upon determining the borrower conditions
fall within the lending pool conditions, recording the borrower
smart contract to the lending pool smart contract.
Abstract.
Independent claim 1 is representative of the appealed claims.3
Claim 1 is reproduced below with emphasis added to the claim language that
recites an abstract idea:

disclaimer mooting this rejection. See Appeal Br. 7; Examiner’s Answer 13,
mailed July 28, 2020 (“Ans.”) (withdrawing the rejection).
3 Appellant argues all of the claims together as a group. See Appeal Br. 6–7.
Accordingly, we select independent claim 1 as representative. See 37 C.F.R.
§ 41.37(c)(1)(iv).
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1. A method of exchanging value across a blockchain
network comprising:
receiving a first plurality of lending offers from a plurality
of lenders, each lending offer comprising at least one of an
amount to lend, a loan duration, and expected returns;
recording each lending offer of the first plurality of
lending offers to a smart contract of a first plurality of lender
smart contracts on a first blockchain network;
recording the first plurality of lending smart contracts,
defining a first lending pool, to a first lending pool smart
contract on the first blockchain network, the values of the
amount to lend, the loan duration, and the expected returns of
the plurality of lending smart contracts defining first lending
pool conditions;
receiving a first borrower request from a first borrower
comprising at least one of a loan amount, an expected loan
interest rate, and a loan duration, defining first borrower
conditions;
recording the first borrower request to a first borrower
smart contract on the first blockchain network;
determining if the first borrower conditions fall within the
first lending pool conditions;
upon determining the first borrower conditions fall within
the first lending pool conditions, recording the first borrower
smart contract to the first lending pool smart contract;
receiving an indication from a lender smart contract of the
first plurality of smart contracts that a loan thereof is ended; and
reconciling the first lending pool responsive to the ending
of the lender smart contract of the first plurality of smart
contracts.

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THE EXAMINER’S DETERMINATIONS
The Examiner determines that claim 1 is directed to a statutory
category of a method. Final Act. 3. The Examiner determines that claim 1
recites certain methods of organizing human activity—a judicial exception
to patent-eligible subject matter. Id. at 4–5. The Examiner additionally
determines that claim 1 does not integrate the abstract idea into a practical
application. Id. at 5. The Examiner further determines that claim 1 does not
include additional elements that are sufficient to amount to significantly
more than the judicial exception. Id. at 5–6. The Examiner makes similar
determinations for the remainder of the claims. Id. at 6.
Appellant’s arguments are addressed in the Analysis section below.

PRINCIPLES OF LAW
A. SECTION 101
Inventions for a “new and useful process, machine, manufacture, or
composition of matter” generally constitute patent-eligible subject matter.
35 U.S.C. § 101. However, the U.S. Supreme Court has long interpreted
35 U.S.C. § 101 to include implicit exceptions: “[l]aws of nature, natural
phenomena, and abstract ideas” are not patentable. Alice Corp. v. CLS Bank
Int’l, 573 U.S. 208, 216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Court’s two-step framework, described in Mayo
Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66
(2012), and Alice. Alice, 573 U.S. at 217–18 (citing Mayo, 566 U.S. at 75–
77). 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
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claims before us are drawn to the concept of intermediated settlement, i.e.,
the use of a third party to mitigate settlement risk.”); see also Bilski v.
Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4 in petitioners’
application explain the basic concept of hedging, or protecting against
risk.”).
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
(1981)); “tanning, dyeing, making 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
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; see also id. at 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 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
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Benson and Flook); see also, e.g., 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.”).
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
concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-
eligible application.” Alice, 573 U.S. at 221 (internal quotation marks
omitted). “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
In January 2019, the U.S. Patent and Trademark Office (“USPTO”)
published revised guidance on the application of 35 U.S.C. § 101. See
2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50
(Jan. 7, 2019) (“2019 Guidance”), updated by USPTO, October 2019
Update: Subject Matter Eligibility (available at https://www.uspto.gov/sites/
default/files/documents/peg_oct_2019_update.pdf) (“October 2019
Guidance Update”); see also October 2019 Patent Eligibility Guidance
Update, 84 Fed. Reg. 55942 (Oct. 18, 2019) (notifying the public of the
availability of the October 2019 Guidance Update). “All USPTO personnel
are, as a matter of internal agency management, expected to follow the
guidance.” 2019 Guidance, 84 Fed. Reg. at 51; see also October 2019
Guidance Update at 1. The Manual of Patent Examining Procedure
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(“MPEP”) now incorporates this revised guidance and subsequent updates at
Section 2106 (9th ed. Rev. 10.2019, rev. June 2020).4
Per MPEP § 2106, we look to whether the claim recites the following:
(1) any judicial exceptions, including certain groupings of abstract
ideas (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.5
MPEP §§ 2106.04(a), (d).
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, [and] conventional activity” in the field; 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.
MPEP § 2106.05(d).

4 All references to the MPEP are to the Ninth Edition, Revision 10.2019
(Last Revised June 2020), unless otherwise indicated.
5 “Examiners evaluate integration into a practical application by:
(1) identifying whether there are any additional elements recited in the claim
beyond the judicial exception(s); and (2) evaluating those additional
elements individually and in combination to determine whether [the claim as
a whole] integrate[s] the exception into a practical application.” MPEP
§ 2106.04(d)II.
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ANALYSIS
Step 2A, Prong 1
Under step 2A, prong 1, of the 2019 Guidance, we first look to
whether the claim recites any judicial exceptions, including certain
groupings of abstract ideas (i.e., mathematical concepts, certain methods of
organizing human activities such as a fundamental economic practice, or
mental processes). MPEP § 2106.04(a).
Appellant does not dispute that claim 1 recites abstract ideas within
the meaning of step 2A, prong 1, of the 2019 Guidance. See Appeal Br. 6–7.
Accordingly, we determine claim 1 recites an abstract idea, and we turn to
the next prong of the step 2A analysis under the 2019 Guidance.
Step 2A, Prong 2
Under step 2A, prong 2, of the 2019 Guidance, we next analyze
whether claim 1 recites additional elements that individually or in
combination integrate the judicial exception into a practical application.
2019 Guidance, 84 Fed. Reg. at 53–55. The 2019 Guidance identifies
considerations indicative of whether an additional element or combination of
elements integrate the judicial exception into a practical application, such as
an additional element reflecting an improvement in the functioning of a
computer or an improvement to other technology or technical field. Id.
at 55; MPEP § 2106.05(a).
Appellant “acknowledges that accounting reconciliation is a known
procedure,” but argues that reconciliation of lending, as claimed, is not a
known procedure. Appeal Br. 7. According to Appellant, “the claimed
invention represents an improvement over the prior art by, inter alia,
enabling reconciliation, as ‘manual reconciliation is not possible when the
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number of active and passive investors enter and leave the pool.’” Id.; Spec.
¶ 111. This argument is unpersuasive because claim 1 does not recite a
minimum number of investors entering or leaving the pool. As such,
Appellant’s argument is not commensurate in scope with the claim.
Appellant next argues,
the claim elements, when taken in combination, amount to an
inventive concept. Reconciling a first lending pool, in the
context of a lending pool comprising a plurality of lending offers,
is not so broad as to represent the abstract idea of reconciling
generally but can only be reasonably interpreted as to be the
performance of the concept of reconciliation within the narrow
context of a loan pool. This represents a practical application of
a judicial exception, as such reconciliation was previously not
performed and only made possible by the present invention and
as such is not well-understood, routine, or conventional.
Appeal Br. 7.
This argument is unpersuasive because Appellant does not explain
why account reconciliation of a pool is any less of an abstract idea than
account reconciliation generally. That is, reconciling the accounts of a pool
merely constitutes a more specific abstract idea. See SAP Am., Inc. v.
InvestPic, LLC, 898 F.3d 1161, 1168 (Fed. Cir. 2018) (“[E]ven if a process
of collecting and analyzing information is ‘limited to particular content’ or a
particular ‘source,’ that limitation does not make the collection and analysis
other than abstract.”).
“It has been clear since Alice that 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).
“[A] claim for a new abstract idea is still an abstract idea.” Synopsys, Inc. v.
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Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016) (emphasis
omitted). “What is needed is an inventive concept in the non-abstract
application realm.” SAP Am., Inc., 898 F.3d at 1168.
For these reasons, Appellant does not persuade us that claim 1 is
directed to an improvement in the function of a computer or to any other
technology or technical field. MPEP § 2106.05(a). Nor does Appellant
persuasively demonstrate that claim 1 is directed to a particular machine or
transformation, or that claim 1 adds any other meaningful limitations for the
purposes of the analysis under Section 101. MPEP §§ 2106.05(b), (c), (e).
Accordingly, Appellant does not persuade us that claim 1 integrates the
recited abstract ideas into a practical application within the meaning of the
2019 Guidance. See 2019 Guidance, 84 Fed. Reg. at 52–55.
Step 2B
Under step 2B of the 2019 Guidance, we next analyze whether
claim 1 adds any specific limitations beyond the judicial exception that,
either alone or as an ordered combination, amount to more than “well-
understood, routine, conventional” activity in the field. 2019 Guidance,
84 Fed. Reg. at 56; MPEP § 2106.05(d).
Appellant’s Specification describes the computer-related components
as being well understood, routine, and conventional:
All of the above-described methods are performable on
computerized systems, such systems comprising a processor, a
data store (such as memory) positioned in communication with
the processor, and a network communication device position in
communication with the processor and operable to communicate
across a network, as are all known in the art.
Spec. ¶ 164.
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Furthermore, Appellant’s Specification does not indicate that
consideration of these conventional elements as an ordered
combination adds any significance beyond the additional elements, as
considered individually. Rather, Appellant’s Specification indicates
that the invention is directed to an abstract idea that is made more
efficient with generic computer components—exchanging
information, value or tokens with and between blockchain networks
and the real physical world. Spec. ¶ 8.
For these reasons, Appellant does not persuade us that claim 1 recites
additional elements that, either individually or as an ordered combination,
amount to significantly more than the judicial exception within the meaning
of the 2019 Guidance. 2019 Guidance, 84 Fed. Reg. at 52–55; MPEP
§ 2106.05(d).
Accordingly, we sustain the Examiner’s rejection of claim 1 under
35 U.S.C. § 101 as being directed to an exception to patent-eligible subject
matter without reciting significantly more. We, likewise, sustain the 101
rejection of claims 2–16, which Appellant does not argue separately. Appeal
Br. 6–7.

DECISION SUMMARY
In summary:
Claim(s)
Rejected
35 U.S.C. § Reference(s)/
Basis
Affirmed Reversed
1–16 101 Eligibility 1–16
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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)(1). See 37 C.F.R.
§ 1.136(a)(1)(iv).

AFFIRMED