MedImpact Healthcare Systems, Inc.

Patent Trials and Appeals Board

Dec 24, 2020

2020003704 (P.T.A.B. Dec. 24, 2020)

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.
14/836,885 08/26/2015 Paul M. Momita 117781-004CT1 3226
27189 7590 12/24/2020
PROCOPIO, CORY, HARGREAVES & SAVITCH LLP
525 B STREET
SUITE 2200
SAN DIEGO, CA 92101
EXAMINER
BURGESS, JOSEPH D
ART UNIT PAPER NUMBER
3626
NOTIFICATION DATE DELIVERY MODE
12/24/2020 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):
PTONotifications@procopio.com
docketing@procopio.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PAUL M. MOMITA
Appeal 2020-003704
Application 14/836,885
Technology Center 3600
Before MURRIEL E. CRAWFORD, PHILIP J. HOFFMANN, and
BRADLEY B. BAYAT, Administrative Patent Judges.
BAYAT, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1, 3–10, and 12–19, which constitute all
pending claims in the application. 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. Appellant identifies the real party in interest as “MedImpact
Healthcare Systems, Inc. of San Diego, California.” Appeal Br. 2.
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CLAIMED SUBJECT MATTER
The claimed invention “relates generally to prescription drug benefits
programs, and, more particularly, to the generation and utilization of a
hybrid formulary comprising at least portions of multiple formularies.”
Spec. ¶ 3. A drug formulary is “the list of drugs covered by the prescription
drug benefits program and their associated tiers.” Id. ¶ 5. Independent
claim 1, reproduced below with added emphasis, is representative of the
claimed subject matter:
1. A computer-implemented method of managing a hybrid
formulary comprising, by at least one hardware processor:
receiving a configuration comprising a plurality of source
identifiers and one or more hierarchy rules, wherein the plurality
of source identifiers comprise a source identifier that identifies a
first source formulary and a source identifier that identifies a
second source formulary, wherein the second source formulary
is different than the first source formulary, wherein each of the
first source formulary and the second source formulary
comprises a plurality of components, and wherein each of the
plurality of components of both the first source formulary and
the second source formulary comprises at least one of one or
more drug entries, one or more tiers, and one or more utilization
management rules;
generating a hybrid formulary by combining one or more
of the plurality of components of the first source formulary with
one or more of the plurality of components of the second source
formulary, while applying the one or more hierarchy rules to
resolve at least one conflict between one or more of the plurality
of components of the first source formulary and one or more of
the plurality of components of the second source formulary,
wherein the hybrid formulary comprises a plurality of
components, and wherein each of the plurality of components of
the hybrid formulary is associated with a tag that identifies the
one of the first source formulary and the second source formulary
from which the component was derived;
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receiving a request for a claim adjudication associated
with a drug;
determining a response to the request based on the hybrid
formulary;
sending the response to a recipient, wherein the response
comprises either a denial or an approval; and
associating the response with the one of the first source
formulary and the second source formulary from which one or
more components of the hybrid formulary, used to adjudicate the
claim, were derived, based on the tags associated with those one
or more components of the hybrid formulary.
REJECTION
The Examiner rejected claims 1, 3–10, and 12–19 under 35 U.S.C.
§ 101 as directed to a judicial exception without significantly more.
OPINION
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: “[l]aws of nature, natural phenomena, and abstract
ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’l, 573 U.S. 208,
216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court’s two-step framework, described in Mayo
and Alice. Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework,
we first determine what concept the claim is “directed to.” See Alice, 573
U.S. at 219 (“On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4
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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))).
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 (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. (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.
The PTO published revised guidance on the application of § 101.
2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50
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(Jan. 7, 2019) (“Guidance”). Under the Guidance, the Examiner first looks
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); and
(2) additional elements that integrate the judicial exception into
a practical application (see Manual of Patent Examining
Procedure (“MPEP”) § 2106.05(a)–(c), (e)–(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate
that exception into a practical application, does the Examiner then look
to whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is not “well-understood, routine, conventional” in the field (see
MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
Guidance, 84 Fed. Reg. 52–56.
Prong One of Revised Step 2A of the Guidance
Appellant does not argue any claim specifically, so we select claim 1
as representative. See Appeal Br., Reply Br, passim.
Claim 1 recites “receiving . . . source identifiers . . . and . . . rules,”
where the “source identifiers” identify two different “formularies,” and the
formularies contain “components” that represent drugs, tiers, and
“management rules.” The claim recites “combining . . . components” of the
two formularies, “while applying . . . hierarchy rules to resolve” any
“conflicts between . . . components” of the two formularies. The claim also
recites that “each of the plurality of components of the hybrid formulary is
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associated with a tag that identifies the one of the first source formulary and
the second source formulary from which the component was derived.”
Appeal Br., Claims App. A-1.
Under the broadest reasonable interpretation, these recited steps
describe mental processes that can be performed in the human mind or with
pen and paper, because a person can combine two formularies into a single
formulary, apply rules to resolve conflicts, and add data (“tag”) that
identifies the source formulary for each component. Guidance, 84 Fed. Reg.
at 52 (“Mental processes—concepts performed in the human mind
(including an observation, evaluation, judgment, opinion)”). This would
involve “observation, evaluation, and judgment,” by looking at each
formulary, copying components to a combined formulary list, adding a
source identifier, and applying the rules to determine which formulary
prevails for each component if there is a conflict. This is consistent with the
Specification, which describes that the claimed invention “relates . . . to the
generation and utilization of a hybrid formulary comprising at least portions
of multiple formularies.” Spec. ¶ 3.
The last four limitations of claim 1 recite “receiving a request for a
claim adjudication associated with a drug; determining a response to the
request based on the hybrid formulary; sending the response to a recipient
. . . and associating the response with the one of the first source formulary
and the second source formulary from which one or more components of the
hybrid formulary, used to adjudicate the claim, were derived, based on the
tags.” Appeal Br., Claims App. A-1. The first three of these steps involve
“utilizing multiple incongruent formularies for claims adjudication,” and
thus manage insurance claims adjudication. Spec. ¶ 46 (“The claim
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adjudication request seeks approval of the drug purchase transaction from
the PBM 30 [pharmacy benefits manager]. The PBM 30 adjudicates the
claim based on the request and a hybrid formulary . . . .”). As to the final
“associating” step, the Specification describes that “whenever a claim
adjudication is processed, a source formulary identifier can be associated
with each response or outcome . . . these identifiers are used internally . . .
[so] a user or operator can more easily identify how an outcome was
achieved for debugging, auditing, or other reporting or notification
purposes.” Id. ¶ 39.
Thus, these final four step describe a drug insurance claim
adjudication process, including internal record-keeping of the source
formulary relied upon. “[M]anaging a hybrid formulary for claims
adjudication” (Spec., Abstract) describe activities performed by an
administrator of a prescription drug benefits program provided through a
health insurance plan, which is a method of organizing human activity and a
fundamental economic practice (insurance) enumerated under the Guidance.
See Guidance, 84 Fed. Reg. at 52.
Therefore, claim 1 recites mental processes (generating a formulary),
and a method of organizing human activity (insurance claims adjudication),
which are abstract ideas. See MPEP § 2106.04(a)(2)(II)(B),
§ 2106.04(a)(2)(III)(A–C).
This is consistent with the Examiner’s determination that claim 1
“corresponds to the abstract ideas identified by the courts relating to
collecting and classifying data, such as classifying and storing digital images
in an organized manner (TLI Comms.), [and] creating an index and using
that index to search for and retrieve data (Int. Ventures v. Erie Indemnity),”
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which are “certain methods of organizing human behavior.” Final Act. 5–6.
The Examiner also determines that a “human could associate different
drugs/quantity limits from different source formularies to form a hybrid
formulary,” which is a mental process. Answer 9.
Appellant argues that “none of the claim limitations constitute a
mental process,” because “the human mind is not equipped to perform the
claim limitations.” Appeal Br. 9. More specifically, Appellant argues that
“the human mind is not equipped to receive a configuration, generate a
hybrid formulary with components having associated tags, and perform
claim adjudication based on the hybrid formulary while using the tags to
associate the adjudication response with a source formulary.” Id.; see also
Reply Br. 4 (“the claims do not fall within the mental processes grouping
since they cannot be practically performed in the human mind”). We
disagree.
The Specification provides the following example involving a hybrid
formulary:
hybrid formulary H may comprise components H1, H2, H3, and
H4, of which component H1 specifies quantity limit L1C for drug
D1 and component H2 specifies quantity limit L2B for drug D2. In
this case, the quantity limit L1C can be tagged or otherwise
associated with an indication that this utilization management
rule was derived from source formulary C. Alternatively or
additionally, drug D1 can be tagged or otherwise associated with
such an indication. Similarly, the quantity limit L2B and/or drug
D2 can be associated with indications of their derivation from
source formulary B.
Spec. ¶ 39 (cited Appeal Br. 2–3). The Examiner, relying on this
example, creates a hybrid formulary in the form of a table, reproduced
below:
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Answer 5.
The Specification does not define the term “tag,” but describes that
“the hybrid formulary 136 may comprise tags to identify the source
formulary from which the drug or utilization management rule was derived.”
Spec. ¶ 39. Considering this table from paragraph 39’s example, the
Examiner’s table identifies that Drug D1 with Quantify L1C came from
Formulary C and thus contains a tag in the context of the Specification’s
description, because it identifies the source formulary from which a drug and
utilization management rule were derived. The Examiner’s creation of a
table that is a hybrid formulary and meets the claim requirements,
demonstrates that this process can be performed in the human mind and with
pen and paper, which qualifies as a mental process and an abstract idea.
Appellant argues that the “use of tags eliminates any need for an NxM
table,” and “a table would also create an additional level of complexity,
since the table would have to be maintained in addition to the hybrid
formulary itself.” Reply Br. 3. We are not persuaded by Appellant’s
argument because the table the Examiner created from the example in
paragraph 39 is a formulary, not a table separate from a formulary. A table
is merely an organized list, and a formulary is a list giving details of
medications organized mostly on cost (containing drugs and tiers
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information). Spec. ¶ 5 (formulary is “the list of drugs covered by the
prescription drug benefits program and their associated tiers”).
We agree with the Examiner (Final Act. 5) that claim 1 is similar to
claims held ineligible by our reviewing court in Intellectual Ventures I LLC
v. Erie Indemnity Company, 850 F.3d 1315 (Fed. Cir. 2017). There, an
index created “organizes [] information using a series of ‘tags.’” Id. at 1326.
Those claims were deemed to be similar to library catalog prior art methods,
in which “classifiers organize and cross-reference information and resources
(such as books, magazines, or the like) by certain identifiable tags, e.g., title,
author, subject.” Id. Similar to the XML tags in Erie, here, tags are used to
identify, organize, and locate the desired resource.” Id. at 1327.
Accordingly, we agree with the Examiner that claim 1 recites a
judicial exception.
Prong Two of Revised Step 2A of the Guidance
Having concluded that claim 1 recites a judicial exception, i.e. an
abstract idea (Step 2A, Prong One), we next consider whether the claim
recites additional elements that integrate the judicial exception into a
practical application (Step 2A, Prong Two). Guidance, 84 Fed. Reg. at 51.
When a claim recites a judicial exception and fails to integrate the exception
into a practical application, the claim is “directed to” the judicial exception.
Id. A claim may integrate the judicial exception when, for example, it
reflects an improvement to technology or a technical field. Id. at 55.
Our reviewing court clarified that a relevant inquiry is “to ask whether
the claims are directed to an improvement to computer functionality versus
being directed to an abstract idea.” Enfish, LLC v. Microsoft Corp., 822
F.3d 1327, 1335 (Fed. Cir. 2016). The court contrasted claims “directed to
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an improvement in the functioning of a computer” with claims “simply
adding conventional computer components to well-known business
practices,” or claims reciting “use of an abstract mathematical formula on
any general purpose computer,” or “a purely conventional computer
implementation of a mathematical formula,” or “generalized steps to be
performed on a computer using conventional computer activity.” Id. at
1338.
The only additional element beyond the recited abstract idea is “one
hardware processor,” which is recited in the preamble of claim 1. As such,
none of the recited steps are tied to the processor, with each step being
performed without any connection to computer technology. We agree with
the Examiner that claim 1 does not integrate the recited judicial exception
into a practical application.
Appellant unpersuasively argues that only the claimed adjudication
steps recite an abstract idea, and that those steps are “integrated into the
practical application of a novel and nonobvious hybrid formulary with tags.”
Appeal Br. 12. This amounts to one abstract idea being “integrated” into
another abstract idea, and not an improvement to computer functionality.
See Guidance at 54–55.
Appellant also argues claim 1 integrates the abstract idea into a
practical application because it is “directed to a data structure that improves
the way a computer stores and retrieves data during a claim adjudication
process.” Reply Br. 4–5; Appeal Br. 7 (“embodiments of the claims use the
data structure of the hybrid formulary to preserve this source information”).
Appellant’s argument is not commensurate with the scope of claim 1. Claim
1 does not identify any “data structure” implemented in any computing
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environment to reflect an improvement in computer or network technology.
However, “to 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
Techs., LLC v. Dish Network Corp., 951 F.3d 1359, 1365 (Fed. Cir. 2020)
(citing Enfish, 822 F.3d at 1336–39). The alleged improvements identified
by Appellant cannot “enable[] a computer . . . to do things it could not do
before” (Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1305 (Fed. Cir.
2018), because none of the steps of claim 1 are implemented by a computer.
And, “the specification is silent as to any specific structural or inventive
improvements in computer functionality related to this claim.” Customedia
Techs., 951 F.3d at 1365. At best, Appellant’s alleged improvement may lie
in the abstract process described above. However, “a claim for a new
abstract idea is still an abstract idea.” Synopsys, Inc. v. Mentor Graphics
Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016) (emphasis omitted).
Because the processor recited in the preamble of claim 1 fails to
integrate the abstract idea into a practical application, we agree with the
Examiner that claim 1 is directed to a judicial exception.
Step 2B of the Guidance
We next consider whether claim 1 recites additional elements,
individually, or as an ordered combination, that provide an inventive
concept. Alice, 573 U.S. at 217–18. The second step of the Alice test is
satisfied when the claim limitations involve more than the performance of
well-understood, routine, and conventional activities previously known to
the industry. Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018);
see 2019 Revised Guidance, 84 Fed. Reg. 56 (explaining that the second step
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of the Alice analysis considers whether a claim adds a specific limitation
beyond a judicial exception that is not “well-understood, routine,
conventional” activity in the field).
As discussed, the only “additional element,” which is a “hardware
processor” in the preamble of the claim, is described in Appellant’s
disclosure as a conventional general purpose computer. Spec. ¶ 49
(“conventional personal computer, computer server, personal digital
assistant, smart phone, tablet computer, or any other processor enabled
device”); see also id. ¶ 70. Beyond the recitation of a processor in the
preamble, none of the steps in the claim are computer implemented. Even
when implemented by a conventional processor, the Federal Circuit has
repeatedly determined that such claims do not contain an “inventive
concept” under Alice step two and are invalid under § 101. See Elec. Power
Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353–56 (Fed. Cir. 2016); see also
Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 717 (Fed. Cir. 2014). And,
“relying on a computer to perform routine tasks more quickly or more
accurately is insufficient to render a claim patent eligible.” OIP Techs., Inc.
v. Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015); see also
Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363,
1370 (Fed. Cir. 2015) (“[O]ur precedent is clear that merely adding
computer functionality to increase the speed or efficiency of the process
does not confer patent eligibility on an otherwise abstract idea.”); CLS Bank
Int'l v. Alice Corp., 717 F.3d 1269, 1286 (Fed. Cir. 2013) (en banc) (Lourie,
J., concurring).
Appellant argues the claims “represent significantly more than the
abstract idea” because “the undisputedly novel and nonobvious hybrid
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formulary with tags ensures that the claims represent significantly more than
a patent on the claim-adjudication process itself.” Appeal Br. 13.
Appellant’s argument is not persuasive because the question is whether the
claim includes additional elements, i.e., elements other than the abstract idea
itself, that “‘transform the nature of the claim’ into a patent-eligible
application.” Alice Corp., 573 U.S. at 217 (quoting Mayo, 566 U.S. at 79,
78). The judicial exception cannot serve as the inventive concept and, as
discussed, there is no additional element or possible combination beyond the
conventional processor (see Spec. ¶¶ 49, 70) in the preamble of the claim
that transforms the abstract idea into patent-eligible subject matter.
We also find Appellant’s no risk of preemption argument (Reply Br.
6) unpersuasive because a claim “need not, however, preempt an entire field
to run afoul of § 101; instead, the question is whether the patent ‘would risk
disproportionately tying up’ the use of the abstract idea.” Mayo, 566 U.S. at
73. Here, all the steps in claim 1 are directed to an abstract idea, without any
technological implementation. “The Supreme Court has [also] 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).
We have considered but are unpersuaded by Appellant’s additional
arguments under Step 2B as to whether the claims represent significantly
more than the abstract idea that is “borne out by numerous Federal Circuit
decisions” (Appeal Br. 13–19; Reply Br. 7–9); we find no parallel between
claim 1 and the claims at issue in those cases.
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Accordingly, we agree with the Examiner that claim 1 lacks an
inventive concept sufficient to transform the abstract idea into patent-eligible
subject matter. Thus, we sustain the rejection of independent claim 1 as
directed to a judicial exception under 35 U.S.C. § 101, and claims 3–10, 12–
19, which fall with claim 1.
CONCLUSION
The Examiner’s rejection under 35 U.S.C. § 101 is AFFIRMED.
DECISION SUMMARY
Claim(s)
Rejected
35 U.S.C. § Basis Affirmed Reversed
1, 3–10, 12–19 101 Eligibility 1, 3–10, 12–19

TIME PERIOD FOR RESPONSE
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1)(iv).
AFFIRMED