Michael Chiovari et al.Download PDFPatent Trials and Appeals BoardAug 14, 201911332935 - (D) (P.T.A.B. Aug. 14, 2019) Copy Citation 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. 11/332,935 01/17/2006 Michael Chiovari 26454-0021 4925 101373 7590 08/14/2019 Eversheds Sutherland (US) LLP / CEI 999 Peachtree Street Suite 2300 Atlanta, GA 30309 EXAMINER TROTTER, SCOTT S ART UNIT PAPER NUMBER 3696 NOTIFICATION DATE DELIVERY MODE 08/14/2019 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): patentdocket@eversheds-sutherland.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte MICHAEL CHIOVARI and DALE POLLAK ____________ Appeal 2018-001648 Application 11/332,9351 Technology Center 3600 ____________ Before ANTON W. FETTING, NINA L. MEDLOCK, and TARA L. HUTCHINGS, Administrative Patent Judges. FETTING, Administrative Patent Judge. DECISION ON APPEAL 1 According to Appellants, the real party in interest is vAuto, Inc. (Appeal Br. 1). Appeal 2018-001648 Application 11/332,935 2 STATEMENT OF THE CASE2 Michael Chiovari and Dale Pollak (Appellants) seek review under 35 U.S.C. § 134 of a final rejection of claims 1, 3, 4, 6, 8–11, 15–18, 31, 34, and 35, the only claims pending in the application on appeal. We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b). The Appellants invented a way of managing a business. Spec. 1:7–8. An understanding of the invention can be derived from a reading of exemplary claim 1, which is reproduced below (bracketed matter and some paragraphing added). 1. A method of evaluating an acquisition of at least one used vehicle for subsequent sale by a dealer, comprising: [1] receiving a first login request from a first user device by the application server system, wherein the first login request is associate[d] with a user account; [2] validating the first login request; [3] receiving a second login request from a second user device by the application server system, wherein the second login request is associate[d] with the user account; [4] determining, by the application server system comprising at least one computing device, an initial water value of an inventory of the dealer 2 Our decision will make reference to the Appellants’ Appeal Brief (“App. Br.,” filed May 30, 2017) and Reply Brief (“Reply Br.,” filed December 4, 2017), and the Examiner’s Answer (“Ans.,” mailed October 5, 2017), and Final Action (“Final Act.,” mailed January 9, 2017). Appeal 2018-001648 Application 11/332,935 3 by calculating a difference between a cost of each vehicle in the inventory and a wholesale value of each vehicle in the inventory; [5] determining, by the application server system, an initial average gross profit of the inventory of the dealer by calculating an average difference between a sales amount of each vehicle in the inventory and the cost of each vehicle of the inventory sold over a period of time; [6] calculating, by the application server system, an initial metric of the inventory, said initial metric of the inventory based at least in part on a relationship between said initial average gross profit of the inventory and said initial water value of the inventory by dividing said initial average gross profit of the inventory by said initial water value of the inventory; [7] receiving, by the application server system, an appraisal value for the acquisition of said at least one used vehicle; [8] determining, by the application server system, a revised water value of a revised inventory of the dealer, comprising the inventory and the at least one used vehicle, by calculating a difference between a cost of each vehicle in the revised inventory and a wholesale value of each vehicle in the revised inventory, the calculation including information from the at least one used vehicle; [9] calculating, by the application server system, a proposed metric by dividing said average gross profit of the inventory by said revised water value of the revised inventory; [10] comparing, by the application server system, said initial metric to said proposed metric to evaluate the acquisition of said at least one used vehicle; and Appeal 2018-001648 Application 11/332,935 4 [11] providing, by the application server system to the dealer, information associated with the comparing. Claims 1, 3, 4, 6, 8–11, 15–18, 31, 34, and 35 stand rejected under 35 U.S.C. § 101 as directed to a judicial exception without significantly more. ISSUES The issues of eligible subject matter turn primarily on whether the claims recite more than abstract conceptual advice of results desired. ANALYSIS STEP 13 Claim 1, as a method claim, nominally recites one of the enumerated categories of eligible subject matter in 35 U.S.C. § 101. The issue before us is whether it is directed to a judicial exception without significantly more. STEP 2 The Supreme Court set forth a framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts. First, . . . determine whether the claims at issue are directed to one of those patent-ineligible concepts. If so, we then ask, “[w]hat else is there in the claims before us? To answer that question, . . . 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. [The Court] described step two of this analysis as a search for an “‘inventive concept’”—i.e., an element or combination of elements that is “sufficient to ensure 3 For continuity of analysis, we adopt the steps nomenclature from 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Revised Guidance”). Appeal 2018-001648 Application 11/332,935 5 that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” Alice Corp., Pty. Ltd. v CLS Bank Int’l, 573 U.S. 208, 217–18 (2014) (citations omitted) (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012)). To perform this test, we must first determine what the claims are directed to. This begins by determining whether the claims recite one of the judicial exceptions (a law of nature, a natural phenomenon, or an abstract idea). Then, if the claims recite a judicial exception, determining whether the claims at issue are directed to the recited judicial exception, or whether the recited judicial exception is integrated into a practical application of that exception, i.e., that the claims “apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.” Revised Guidance, 84 Fed. Reg. at 54. If the claims are directed to a judicial exception, then finally determining whether the claims provide an inventive concept because the additional elements recited in the claims provide significantly more than the recited judicial exception. STEP 2A Prong 1 At a high level, and for our preliminary analysis, we note that method claim 1 recites receiving and validating login data, calculating differences and metrics, receiving appraisal value data, calculating differences and quotients, comparing data, and providing the comparison data. Validating data is rudimentary analysis. Calculating differences, quotients, and metrics are forms of mathematical calculation and thus analysis. Comparing data is rudimentary analysis. Providing data is data transmission. Thus, claim 1 recites receiving, analyzing, calculating, and transmitting data. None of the Appeal 2018-001648 Application 11/332,935 6 limitations recites technological implementation details for any of these steps, but instead recite only results desired by any and all possible means. From this we see that claim 1 does not recite the judicial exceptions of either natural phenomena or laws of nature. Under Supreme Court precedent, claims directed purely to an abstract idea are patent in-eligible. As set forth in the Revised Guidance, which extracts and synthesizes key concepts identified by the courts, abstract ideas include (1) mathematical concepts,4 (2) certain methods of organizing human activity,5 and (3) mental processes.6 Among those certain methods of organizing human activity listed in the Revised Guidance are fundamental economic practices and commercial or legal interactions. Like those concepts, claim 1 recites the concept of financial analysis. Specifically, claim 1 recites operations that would ordinarily take place in advising one to provide information about a comparison between metrics mathematically calculated from wholesale values, profits, and costs of one vehicle and those of an inventory of vehicles. The advice to provide information about a comparison between metrics mathematically calculated from wholesale values, profits, and costs of one vehicle and those of an inventory of vehicles 4 See, e.g., Gottschalk v. Benson, 409 U.S. 63, 71–72 (1972); Bilski v. Kappos, 561 U.S. 593, 611 (2010); Mackay Radio & Telegraph Co. v. Radio Corp. of Am., 306 U.S. 86, 94 (1939); SAP America, Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018). 5 See, e.g., Bilski, 561 U.S. at 628; Alice, 573 U.S. at 219–20; Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed Cir. 2014); Smart Sys. Innovations, LLC v. Chicago Transit Auth., 873 F.3d 1364, 1383 (Fed. Cir. 2017); In re Marco Guldenaar Holding B.V., 911 F.3d 1157, 1160–61 (Fed. Cir. 2018). 6 See, e.g., Benson, 409 U.S. at 67; CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1371–72 (Fed. Cir. 2011); Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016). Appeal 2018-001648 Application 11/332,935 7 involves analyzing an inventory of vehicles, which is an economic act, and comparing costs and profits, which is an act ordinarily performed in the stream of commerce. For example, claim 1 recites “calculating a difference between a cost of each vehicle in the inventory and a wholesale value of each vehicle in the inventory,” which is an activity that would take place whenever one is performing the cost or market calculation required by standard accounting principles in commerce. Similarly, claim 1 recites “evaluate the acquisition of said at least one used vehicle,” which is also characteristic of commercial vehicle transactions. The Examiner determines the claims to be directed to the concept of calculating value metrics of a vehicle inventory - an abstract idea which would fall within the universe of ineligible subject matter envisioned by courts as being an exception to patentability, e.g., a fundamental economic activity (abstract idea) simply being carried out via an electronic device, a general purpose computer and/or a computer system. Final Act. 4. The preamble to claim 1 recites that it is a method of evaluating an acquisition of at least one used vehicle for subsequent sale by a dealer. The steps in claim 1 result in providing metrics information to evaluate the acquisition of a used vehicle absent any technological mechanism other than a conventional computer for doing so. As to the specific limitations, limitations 1, 3, and 7 recite data retrieval. Limitation 11 is insignificant data transmission. Limitation 2 is generic data validation, conventionally performed to some degree (e.g. validating proper data types for data fields) in all computer processes, and for login requests in particular in many multi-user systems such as UNIX. Limitations 4–9 recite mathematical calculations of data. Mathematical calculations are one of the Appeal 2018-001648 Application 11/332,935 8 broad categories of abstract ideas recognized in Supreme Court decisions. See also Revised Guidance, 84 Fed. Reg. at 52. The limitations thus recite advice for providing information about a comparison between metrics mathematically calculated from wholesale values, profits, and costs of one vehicle and those of an inventory of vehicles. To advocate providing information about a comparison between metrics mathematically calculated from wholesale values, profits, and costs of one vehicle and those of an inventory of vehicles is conceptual advice for results desired and not technological operations. The Specification at 1:7–8 describes the invention as relating to managing a business. Thus, all this intrinsic evidence shows that claim 1 is directed to computing vehicle value, profit and cost statistics, i.e. financial analysis. This is consistent with the Examiner’s determination. This in turn is an example of fundamental economic practices and commercial or legal interactions as a certain method of organizing human activity, because maintaining an inventory of vehicles for sale is both a fundamental economic practice and a precursor to the recited acquisition and sale as commercial transactions. The concept of financial analysis by providing information about a comparison between metrics mathematically calculated from wholesale values, profits, and costs of one vehicle and those of an inventory of vehicles is one idea for evaluating particular transactions. The steps recited in claim 1 are part of how this might conceptually be premised. Our reviewing court has found claims to be directed to abstract ideas when they recited similar subject matter. Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1367 (2015) (tracking financial Appeal 2018-001648 Application 11/332,935 9 transactions); Credit Acceptance Corp. v. Westlake Services, 859 F.3d 1044, 1054 (2017) (processing for financing a purchase). Alternately, this is an example of concepts performed in the human mind as mental processes because the steps of receiving, analyzing, calculating, and transmitting data mimic human thought processes of observation, evaluation, judgment, and opinion, perhaps with paper and pencil, where the data interpretation is perceptible only in the human mind. See In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016); FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093–94 (Fed. Cir. 2016). Claim 1, unlike the claims found non-abstract in prior cases, uses generic computer technology to perform data reception, analysis, calculation, and transmission and does not recite an improvement to a particular computer technology. See, e.g., McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314–15 (Fed. Cir. 2016) (finding claims not abstract because they “focused on a specific asserted improvement in computer animation”). As such, claim 1 is directed to receiving, analyzing, calculating, and transmitting data, and not a technological implementation or application of that idea. Alternately, this is an example of a mathematical concept because the steps of computing statistics from wholesale values, profits, and costs perform a mathematical algorithm. The remaining steps are mere data gathering and incidental post processing steps. From this we conclude that at least to this degree, claim 1 is directed to financial analysis by providing information about a comparison between metrics mathematically calculated from wholesale values, profits, and costs of one vehicle and those of an inventory of vehicles, which is a commercial Appeal 2018-001648 Application 11/332,935 10 and legal interaction, one of certain methods of organizing human activity identified in the Revised Guidance, and, thus, an abstract idea. STEP 2A Prong 2 The next issue is whether claim 1 not only recites, but is more precisely directed to this concept itself, or whether it is instead directed to some technological implementation or application of, or improvement to, this concept, i.e., integrated into a practical application.7 At the same time, we tread carefully in construing this exclusionary principle lest it swallow all of patent law. At some level, “all inventions ... embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Thus, an invention is not rendered ineligible for patent simply because it involves an abstract concept. “[A]pplication[s]” of such concepts “ ‘to a new and useful end,’ ” we have said, remain eligible for patent protection. Accordingly, in applying the § 101 exception, we must distinguish between patents that claim the “ ‘buildin[g] block[s]’ ” of human ingenuity and those that integrate the building blocks into something more. Alice, 573 U.S. at 217 (citations omitted). Taking the claim elements separately, the operation performed by the computer at each step of the process is expressed purely in terms of results, devoid of implementation details. Steps 1 and 3 are pure data gathering steps. Limitations describing the nature of the data do not alter this. Step 10 is insignificant post solution activity, such as transmitting or displaying the results. Steps 2 and 4–9 recite generic computer processing expressed in terms of results desired by any and all possible means and so present no more than conceptual advice. All purported inventive aspects reside in how the data are interpreted and the results desired, and not in how the process 7 See, e.g., Alice, 573 U.S. at 223, discussing Diamond v. Diehr, 450 U.S. 175 (1981). Appeal 2018-001648 Application 11/332,935 11 physically enforces such a data interpretation or in how the processing technologically achieves those results. Viewed as a whole, Appellants’ claim 1 simply recites the concept of financial analysis by providing information about a comparison between metrics mathematically calculated from wholesale values, profits, and costs of one vehicle and those of an inventory of vehicles as performed by a generic computer. This is no more than conceptual advice on the parameters for this concept and the generic computer processes necessary to process those parameters, and do not recite any particular implementation. Claim 1 does not, for example, purport to improve the functioning of the computer itself. Nor does it effect an improvement in any other technology or technical field. The Specification spells out different generic equipment8 and parameters that might be applied using this concept and the particular steps such conventional processing would entail based on the concept of financial analysis by providing information about a comparison between metrics mathematically calculated from wholesale values, profits, and costs of one vehicle and those of an inventory of vehicles under different scenarios. It does not describe any particular improvement in the manner a computer functions. Instead, claim 1 at issue amounts to nothing significantly more than an instruction to apply financial analysis by providing information about a comparison between metrics mathematically calculated from wholesale values, profits, and costs of one vehicle and those of an inventory of vehicles using some unspecified, generic computer. Under our precedents, that is not enough to transform an abstract idea into a patent-eligible invention. See Alice, 573 U.S. at 225–26. 8 The Specification describes a desktop computer or server. Spec. 5:1–3. Appeal 2018-001648 Application 11/332,935 12 None of the limitations reflects an improvement in the functioning of a computer, or an improvement to other technology or technical field, applies or uses a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition, implements a judicial exception with, or uses a judicial exception in conjunction with, a particular machine or manufacture that is integral to the claim, effects a transformation or reduction of a particular article to a different state or thing, or 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. We conclude that claim 1 is directed to achieving the result of financial analysis by advising one to provide information about a comparison between metrics mathematically calculated from wholesale values, profits, and costs of one vehicle and those of an inventory of vehicles, as distinguished from a technological improvement for achieving or applying that result. This amounts to commercial or legal interactions, which fall within certain methods of organizing human activity that constitute abstract ideas. The claim does not integrate the judicial exception into a practical application. Appeal 2018-001648 Application 11/332,935 13 STEP 2B The next issue is whether claim 1 provides an inventive concept because the additional elements recited in the claim provide significantly more than the recited judicial exception. The introduction of a computer into the claims does not generally alter the analysis at Mayo step two. [T]he mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention. Stating an abstract idea “while adding the words ‘apply it’” is not enough for patent eligibility. Nor is limiting the use of an abstract idea “‘to a particular technological environment.’” Stating an abstract idea while adding the words “apply it with a computer” simply combines those two steps, with the same deficient result. Thus, if a patent’s recitation of a computer amounts to a mere instruction to “implement[t]” an abstract idea “on . . . a computer,” that addition cannot impart patent eligibility. This conclusion accords with the preemption concern that undergirds our § 101 jurisprudence. Given the ubiquity of computers, wholly generic computer implementation is not generally the sort of “additional feature[e]” that provides any “practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.” Alice, 573 U.S. at 223–24 (citations omitted). “[T]he relevant question is whether the claims here do more than simply instruct the practitioner to implement the abstract idea [] on a generic computer.” Alice, 573 U.S. at 225. They do not. Taking the claim elements separately, the function performed by the computer at each step of the process is purely conventional. Using a computer for receiving, analyzing, calculating, and transmitting data amounts to electronic data query and retrieval—one of the most basic Appeal 2018-001648 Application 11/332,935 14 functions of a computer. All of these computer functions are generic, routine, conventional computer activities that are performed only for their conventional uses. See Elec. Power Grp. v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016). See also In re Katz Interactive Call Processing Patent Litigation, 639 F.3d 1303, 1316 (Fed. Cir. 2011) (“Absent a possible narrower construction of the terms ‘processing,’ ‘receiving,’ and ‘storing,’ . . . those functions can be achieved by any general purpose computer without special programming”). None of these activities is used in some unconventional manner nor do any produce some unexpected result. Appellants do not contend they invented any of these activities. In short, each step does no more than require a generic computer to perform generic computer functions. As to the data operated upon, “even 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.” SAP America, Inc. v. InvestPic LLC, 898 F.3d 1161, 1168 (Fed. Cir. 2018). Considered as an ordered combination, the computer components of Appellants’ claim 1 add nothing that is not already present when the steps are considered separately. The sequence of data reception-analysis- calculation-transmission is equally generic and conventional. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014) (sequence of receiving, selecting, offering for exchange, display, allowing access, and receiving payment recited an abstraction), Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017) (sequence of data retrieval, analysis, modification, generation, display, and transmission), Two-Way Media Ltd. v. Comcast Cable Communications, Appeal 2018-001648 Application 11/332,935 15 LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017) (sequence of processing, routing, controlling, and monitoring). The ordering of the steps is therefore ordinary and conventional. We conclude that claim 1 does not provide an inventive concept because the additional elements recited in the claim do not provide significantly more than the recited judicial exception. REMAINING CLAIMS Claim 1 is representative. The other independent method claims 15, 31, and 34 are substantially similar at least as regards this analysis. The remaining method claims merely describe process parameters. We conclude that the method claims at issue are directed to a patent-ineligible concept itself, and not to the practical application of that concept. There are no structural claims. As a corollary, the claims are not directed to any particular machine. LEGAL CONCLUSION From these determinations we further determine that the claims do not recite an improvement to the functioning of the computer itself or to any other technology or technical field, a particular machine, a particular transformation, or other meaningful limitations. From this we conclude the claims are directed to the judicial exception of the abstract idea of certain methods of organizing human activity as exemplified by the commercial and legal interaction of financial analysis by advising one to providing information about a comparison between metrics mathematically calculated from wholesale values, profits, and costs of one vehicle and those of an inventory of vehicles, without significantly more. Appeal 2018-001648 Application 11/332,935 16 APPELLANTS’ ARGUMENTS As to Appellants’ Appeal Brief arguments, we adopt the Examiner’s determinations and analysis from Final Action 3–7 and Answer 6–8 and reach similar legal conclusions. We now turn to the Reply Brief. Appellants attempt to analogize the claims to those involved in Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1259–60 (Fed. Cir. 2017). Reply Br. 2. In Visual Memory, the court held that the claims were directed to “‘an improved memory system having one or more programmable operational characteristics, said characteristics being defined through configuration by said computer based on the type of said processor,’ and ‘determin[ing] a type of data stored by said cache.’” Visual Memory, 867 F.3d at 1259. Claim 1 does not alter the way the computer operates as in Visual Memory. Instead, claim 1 recites conventional mathematical operations to provide financial analysis. Here, the focus of the claims is not any improved computer or network, but the improved mathematical analysis; and indeed, the specification makes clear that off-the-shelf computer technology is usable to carry out the analysis SAP America, 890 F.3d at 1022 (distinguishing Visual Memory). We are not persuaded by Appellants’ argument that the “number and speed of iterations performed on the computer is simply not possible manually.” Reply Br. 2. Using a computer for speed is insufficient. At best, the claims describe the automation of the fundamental economic concept of offer-based price optimization through the use of generic-computer functions. Both the prosecution history and the specification emphasize that the key distinguishing feature of the claims is the ability to automate or otherwise make more efficient traditional price-optimization methods. . . . But relying on a computer Appeal 2018-001648 Application 11/332,935 17 to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible. OIP Technologies, Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1363 (2015). CONCLUSIONS OF LAW The rejection of claims 1, 3, 4, 6, 8–11, 15–18, 31, 34, and 35 under 35 U.S.C. § 101 as directed to a judicial exception without significantly more is proper. DECISION The rejection of claims 1, 3, 4, 6, 8–11, 15–18, 31, 34, and 35 is affirmed. 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) (2011). AFFIRMED Copy with citationCopy as parenthetical citation