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Patent Trials and Appeals Board

Oct 1, 2019

14286401 - (D) (P.T.A.B. Oct. 1, 2019)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
14/286,401 05/23/2014 Joseph Campbell US-0917.01|USCO:0100 6069
130735 7590 10/01/2019
Fletcher Yoder PC / USAA
P.O. Box 692289
Houston, TX 77269
EXAMINER
JACOB, WILLIAM J
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
10/01/2019 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):
docket@fyiplaw.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte JOSEPH CAMPBELL
____________

Appeal 2019-000317
Application 14/286,401
Technology Center 3600
____________

Before ERIC B. CHEN, IRVIN E. BRANCH, and
JOSEPH P. LENTIVECH, Administrative Patent Judges.

BRANCH, Administrative Patent Judge.

DECISION ON APPEAL1
Pursuant to 35 U.S.C. § 134(a), Appellant2 appeals from the
Examiner’s decision to reject claims 1–3, 6–11, 14–19, and 22–30. We have
jurisdiction over the pending claims under 35 U.S.C. § 6(b).
We affirm.

1 We reference, herein, the Final Action mailed November 7, 2017 (“Final”),
Appeal Brief filed April 9, 2018 (“Br.”), Examiner’s Answer mailed
August 16, 2018 (“Ans.”), Reply Brief filed October 11, 2018 (“Reply”),
and Specification filed May 23, 2014 (“Spec.”).
2 According to Appellant, the real party in interest is “United Services
Automobile Association.” Br. 1.
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STATEMENT OF THE CASE
THE INVENTION
Appellant’s invention relates to “identify[ing] policyholders within
the population of insured that are [at] high-risk of water loss.” Spec. 1,
l. 24–2, l. 1.
Claim 1 is reproduced, below, with emphasis on “additional elements”
(explained infra).
1. A computer system comprising:
a memory configured to store instructions; and
a processor disposed in communication with the memory,
wherein the processor upon execution of the instructions is
configured to:
receive, electronically, insured homeowner data
including data for homeowners who have had a water
loss and homeowners who have not had a water loss;
identify a first group of insured homeowners, the first
group including all insured homeowners having prior
water loss experience in the insured homeowner data;
identify a second group of insured homeowners, the
second group including all insured homeowners not
having prior water loss experience in the insured
homeowner data;
construct a logical regression model based on the first
group of insured homeowners and a random sampling of
homeowners from the second group of insured
homeowners;
determine, based on the logical regression model,
log-odds of a likelihood that a policyholder will
experience water loss within a defined temporal period;
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determine an attribute indicative of the likelihood that the
policyholder will experience water loss within the
defined temporal period;
identify an insured having increased likelihood of water
loss using the attribute;
target the insured having increased likelihood of water
loss using the attribute with a water loss mitigation
strategy; and
provide, electronically, the water loss mitigation strategy
to the insured.
Br. 18–19 (claims appendix).
REJECTIONS3
Claims 1–3, 6–11, 14–19, and 22–30 stand rejected under
35 U.S.C. § 101 as directed to patent-ineligible subject matter. Final 3–5.
Claims 1–3, 6–11, 14–19, 22–24, 26, 28, and 30 stand rejected under
35 U.S.C. § 103 as obvious over Andrist (US 2010/0063851 A1; pub. Mar.
11, 2010) and Kontos (US 2009/0324049 A1; pub. Dec. 31, 2009). Final 6–
9.
Claims 25, 27, and 29 stand rejected under 35 U.S.C. § 103 as obvious
over Andrist, Kontos, and Tremiti (US 2004/0260579 A1; pub. Dec. 23,
2004). Final 9.

3 The Final Action presents a rejection under 35 U.S.C. § 112(b). Final 2–3.
The Answer does not mention this rejection. An Advisory Action, mailed
January 29, 2018, identifies “after-final claim amendments [that] address the
. . . [§] 112 rejection [and] have been entered[] so as to place the claims in
better position for appeal.” In view of the Answer and Advisory Action, we
consider the § 112 rejection to be withdrawn.

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35 U.S.C. § 101
PRINCIPLES OF LAW
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. Pty. Ltd. v. CLS Bank Int’l,
573 U.S. 208, 216 (2014) (internal quotation marks and citation omitted).
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, 130 S. Ct. 3218 (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, 130 S. Ct. 3218
(2010)); mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95
(1978)); and mental processes (Gottschalk v. Benson, 409 U.S. 63, 69
(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,
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vulcanizing India rubber, smelting ores” (id. at 184 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
Supreme 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 176; 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 Supreme 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. (citing Benson and Flook); see 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 citation
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).
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“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
that abstract idea into a patent-eligible invention.” Id.
PTO GUIDANCE
The United States Patent and Trademark Office (USPTO) recently
published revised guidance on the application of § 101. 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019)
(“Guidance”). Under the Guidance, we first look to whether the
claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
organizing human interactions 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) (9th Ed.,
Rev. 08.2017, Jan. 2018)).
See Guidance, 84 Fed. Reg. at 52, 54–55. Only if a claim (1) recites a
judicial exception and (2) does not integrate that exception into a practical
application, we conclude the claim is directed to a judicial exception
(id. at 54) and then look to whether the claim:
(3) adds a specific limitation or combination of limitations
beyond the judicial exception that are not “well-understood,
routine, conventional” activity in the field (see
MPEP § 2106.05(d)); or
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(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
See Guidance, 84 Fed. Reg. at 56.
ANALYSIS
Claim 1 is representative of claims 2, 3, 6–11, 14–19, and 22–30.
Br. 5; see also 37 C.F.R. § 41.37(c)(1)(iv) (representative claims). There is
no dispute that claim 1 falls within a category of patentable subject matter.
See 35 U.S.C. § 101 (“process, machine, manufacture, or composition of
matter”); see also Guidance, 84 Fed. Reg. at 53–54 (“Step 1”). We
accordingly turn to the issues raised by the Guidance and Appellant’s
arguments.
STEP 2A, PRONG ONE:4 DOES THE CLAIM RECITE
ANY JUDICIAL EXCEPTIONS?
Turning to the above first step of the Guidance (see supra 6, bullet
“(1)”), we determine claim 1 recites judicial exceptions. Specifically, we

4 The Guidance separates the enumerated issues (1) to (4) (see supra 6–7)
into Steps 2A(1), 2A(2), and 2B, as follows:
[T]he revised procedure . . . focuses on two aspects [of whether
a claim is “directed to” a judicial exception under the first
step of the Alice/Mayo test (USPTO Step 2A)]: (1) [w]hether
the claim recites a judicial exception; and (2) whether a recited
judicial exception is integrated into a practical application.
[W]hen a claim recites a judicial exception and fails to integrate
the exception into a practical application, . . . further analysis
pursuant to the second step of the Alice/Mayo test (USPTO
Step 2B) . . . is needed . . . in accordance with existing USPTO
guidance as modified in April 2018. [footnote omitted]
84 Fed. Reg. at 51.
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agree with the Examiner that:
[Claim 1] recite[s] a fundamental economic practice . . . of
determining an attribute indicative of increased likelihood of
future insurance loss based on sampling and modeling of prior
loss experience, identifying an insured having increased
likelihood of loss using the attribute, and providing a mitigation
strategy to said insured . . . , which all reflect a fundamental and
long standing commercial practice. That is to say, insurance
companies have long sampled and modeled historical data in
order to determine attributes indicative of future loss.
Final 4; see also id. at 5 (“[W]ater loss has been a type of insurance loss for
as long as insurance has existed”). We also agree the claimed “insurance
loss data is organized and transformed through a logical regression model
(i.e., a mathematical correlation).” Ans. 4. We further agree that, for
“minimal data sets[], the [claimed] invention may be performed manually
and via mental steps.” Id. at 11.5
We add that each of the un-emphasized features of reproduced claim 1
(supra 2–3 (claimed operations following “execution of the instructions is

5 The Examiner also determines that the following activities are judicial
exceptions: “collecting and comparing known information[;] collection,
manipulation, and display of data[;] using categories to organize, store and
transmit information[;]organizing and transforming information through
mathematical correlations[;] data recognition and storage.” Final 4 (citations
omitted). The Guidance does not recognize these activities as judicial
exceptions. See Guidance, 84 Fed. Reg. at 52. Therefore, pursuant to
USPTO policy, we do not uphold the above findings. See Guidance
84 Fed. Reg. at 51 (“All USPTO personnel are, as a matter of internal
agency management, expected to follow the guidance.”). Nor do we,
however, hold these findings erred as a matter of law. See id. (“Rejections
will continue to be based upon the substantive law[.]”). Instead, and because
the Guidance was issued after submission of the appeal papers, we apply the
Guidance to facilitate prosecution.
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configured to”)) falls within the Guidance’s following categories of judicial
exceptions: “(a) Mathematical concepts—mathematical relationships,
mathematical formulas or equations, mathematical calculations; (b) Certain
methods of organizing human activity—fundamental economic principles or
practices (including . . . insurance, mitigating risk); . . . (c) Mental
processes—concepts performed in the human mind (including an
observation, evaluation, judgment, opinion).” Guidance, 84 Fed. Reg. at 52
(footnotes omitted). Moreover, except for twice reciting the word
“electronically,” the claimed operations entirely fall within the above
judicial exceptions.
For the foregoing reasons, we determine claim 1 recites judicial
exceptions.
STEP 2A, PRONG TWO: ARE THE RECITED JUDICIAL EXCEPTIONS
INTEGRATED INTO A PRACTICAL APPLICATION?
Turning to the above second step of the Guidance (see supra 6, bullet
“(2)”), we determine the claimed additional elements do not integrate the
recited judicial exceptions into a practical application. Specifically, we
determine the additional elements are solely and entirely the claimed
“computer system comprising . . . a memory configured to store instructions
. . . and a processor disposed in communication with the memory, wherein
the processor upon execution of the instructions.” Claim 1 thus only recites:
the above generic computer system; the claimed operations (which constitute
only judicial exceptions); and the unspecified use of the computer system to
perform the claimed operations. Accordingly, the combination of additional
elements and judicial exceptions does not constitute a “meaningful limit on
the [judicial exceptions], such that the claim is more than a drafting effort
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designed to monopolize the [exceptions].” Guidance, 84 Fed. Reg. at 53
(defining a “practical application” for Step 2A, Prong Two); see also id. at
55 (“exemplary considerations . . . indicative that an additional element (or
combination of elements) may have integrated the exception into a practical
application”).
For the foregoing reasons, we determine claim 1 is directed to the
recited judicial exceptions—not to a practical application thereof.
STEP 2B: DOES THE CLAIM RECITE ANYTHING THAT IS
BEYOND THE RECITED JUDICIAL EXCEPTIONS AND NOT A WELL-UNDERSTOOD,
ROUTINE, CONVENTIONAL ACTIVITY?
Turning to the above third and fourth steps of the Guidance (see
supra 6–7, bullets “(3) and (4)”), we determine the claimed invention does
not comprise a feature that is neither a judicial exception nor “well
understood, routine, conventional.” 84 Fed. Reg. at 56. Specifically, and as
discussed above, we determine the additional elements are solely and
entirely the claimed “computer system comprising . . . a memory configured
to store instructions . . . and a processor disposed in communication with the
memory, wherein the processor upon execution of the instructions.”
Accordingly, the combination of additional elements and judicial exceptions
constitutes a generic computer system performing only a generic function
and doing so merely to apply the judicial exceptions (i.e., claimed
operations). See id. (“apply it” bullet corresponding to the Guidance’s
footnote 30); id. at n. 30 (“mere instructions to apply a judicial exception”);
see also MPEP § 2106.05(f) (cited by the Guidance’s footnote 30 as
instructive for this issue).
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For the foregoing reasons, we determine the claimed additional
elements do nothing more than append generic computer technology to
merely apply judicial exceptions.
APPELLANT’S ARGUMENTS
Appellant’s arguments all bear the same deficiency. Each rests
entirely upon the claimed operations and thus “entirely in the realm” of
judicial exceptions. SAP America, Inc. v. InvestPic, LLC, 898 F.3d 1161,
1163 (Fed. Cir. 2018), cert. denied 139 S. Ct. 2747 (2019) (“[An] advance
[that] lies entirely in the realm of abstract ideas . . . is ineligible for
patenting.”).
For example, Appellant contends “the detailed recitation of the
specific restructuring and use [of] policyholder data for particular modeling”
renders the claimed use of the logistical regression unconventional. Br. 9.
Even assuming this contention is correct, it is unpersuasive because the
claimed use of the logical regression model merely combines judicial
exceptions by applying mathematical concepts to longstanding insurance
practices. RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1327
(Fed. Cir. 2017) (“Adding one abstract idea (math) to another abstract idea
. . . does not render the claim non-abstract.”).
Appellant also contends “the claimed technology addresses specific
problems that arise in computer-based loss mitigation systems, and improves
the functioning such systems.” Br. 9–10 (emphasis added). Appellant is
referencing the Federal Circuit’s frequent instruction to assess whether a
claim is sufficiently “specific” for patent-eligibility; an instruction perhaps
best set forth by McRO, Inc. v. Bandai Namco Games America Inc.,
837 F.3d 1299 (Fed. Cir. 2016).
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In McRO, the claimed invention was held patent-eligible because of
“us[ing] a combined order of specific rules that renders information into a
specific format that is then used and applied to create desired results.”
837 F.3d at 1315 (emphasis added). The underlying basis of the holding was
as follows:
The preemption concern arises when the claims are not directed
to a specific invention and instead improperly monopolize the
basic tools of scientific and technological work. . . . A patent
is not good for an effect . . . because such patents would
prohibit all other persons from making the same thing by any
means whatsoever. . . . We therefore look to whether the
claims in these patents focus on a specific means or method
that improves the relevant technology or are instead directed to
a result or effect that itself is the abstract idea and merely
invoke generic processes and machinery.
Id. at 1314 (emphasis added; citations and quotations omitted). Thus, a
claim reciting a judicial exception is nonetheless “directed to a specific
invention” (above block quote) and accordingly patent-eligible if reciting a
mechanism that prevents preemption of the exception. Id. The argued
features of Appellant’s claim 1 do not constitute a mechanism that prevents
preemption of the judicial exceptions, but rather detail the judicial
exceptions—namely the claimed operations.
Appellant further contends that claim 1 compels a finding of
patent-eligibility under DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d
1245 (Fed. Cir. 2014), Enfish, LLC v. Microsoft Corp., 822 F.3d 1327
(Fed. Cir. 2016), and Bascom Glob. Internet Servs., Inc. v. AT&T Mobility
LLC, 827 F.3d 1341 (Fed. Cir. 2016). Br. 7, 10–11; Reply 9. These
decisions, like McRO, emphasize a need for a claimed mechanism
that prevents preemption of recited judicial exceptions. See DDR, 773 F.3d
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at 1259 (The claims “do not attempt to preempt . . . making two web pages
look the same,” but “[r]ather . . . recite a specific way to automate the
creation of a composite web page.”); Enfish, 822 F.3d at 1339 (The claims
“recited . . . a specific type of data structure . . . confirm[ing] . . . the § 101
analysis has not been deceived by the ‘draftsman’s art.’” (Quoting Alice,
573 U.S. at 226)); Bascom, 827 F.3d at 1352 (The claims “do not preempt .
. . filtering content,” but rather “carve out a specific location for the filtering
system (a remote ISP server).”). As discussed with reference to McRO, the
argued features of Appellant’s claim 1 do not prevent preemption of the
judicial exceptions, but rather detail the judicial exceptions themselves.
For the foregoing reasons, we sustain the 35 U.S.C. § 101 rejection of
claims 1–3, 6–11, 14–19, and 22–30.
35 U.S.C. § 103
Each of claims 1–3, 6–11, 14–19, and 22–30 is rejected as obvious
over: Andrist and Kontos; or Andrist, Kontos, and Tremiti. Claim 1 is
representative of all claims. Br. 14.
Appellant argues that the Examiner does not address the following
claim requirement:
“[C]onstruct a [logistical] regression model” based on a “first
group of insured homeowners including all insured
homeowners having prior water loss experience in the insured
homeowner data” and “a random sampling of homeowners”
from a “second group of insured homeowners including all
insured homeowners not having prior water loss experience in
the insured homeowner data.”
Br. 15. Appellant contends the Examiner fails to address the claim
requirement inasmuch:
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Andrist does not describe employing a random sampling of
homeowners not having prior water loss experience, much less
constructing a logistic regression model with such data. In the
Final Office Action, the Examiner . . . [presents] merely
conclusory statements and are not clearly articulation of the
reason(s) why [this claim feature] would have been obvious.
. . .
Furthermore, . . . [t]he Examiner has not articulated . . . how a
person having ordinary skill in the art would understand that
[Andrist’s cited] grouping of data from various zip codes
described . . . “necessarily teaches” the use of a “random
sampling of homeowners not having prior water loss
experience” to generate “a [logistic] regression model.”
Id. at 16.6
We are unpersuaded. The Examiner’s findings are clear and
supported. The Examiner finds Andrist, by “predict[ing] the statistical
likelihood of future claims or losses based on past data (such as the historical
loss data)” (Andrist ¶ 38), indicates a comparison of “insured homeowners
having prior water loss” against statistics for “insured homeowners not
having prior water loss” (claim 1). Final 7 (“determination of zipcodes with
most similar risk of loss indicates receipt of those experiencing loss and
those that did not”); see also Andrist ¶ 40 (“analysis . . . of historical loss
data . . . by peril of loss for property coverage[,] e.g., . . . water”). The
Examiner finds that, due to the large population of “homeowners not having
prior water loss” (claim 1), it would have been obvious to use a random
sample of this group. Ans. 12–13 (citing Horst Stenger, Regression analysis
and random sampling, Journal of Statistical Planning and Inference,
Vol. 102, Issue 1, March 1, 2002, pp. 169–78). The Examiner also finds

6 The Reply Brief does not address the 35 U.S.C. § 103 rejections.
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Kontos shows it would have been obvious, in performing a statistical
analysis of binary “having” and “not having” events (claim 1), to “use [a]
logical regression model . . . to reduce costs.” Ans. 8 (citing Kontos ¶ 3).
The above findings address all features of the argued claim
requirement. Moreover, even assuming otherwise, Appellant does not show
the above findings are incorrect or otherwise insufficient. See In re
Piasecki, 745 F.2d 1468, 1472 (Fed. Cir. 1984) (“After a prima facie case
. . . has been established, the burden of . . . [r]ebuttal is . . . a showing of
facts supporting the opposite conclusion.” (internal quotation marks and
citation omitted)); SHOW, Black’s Law Dictionary (10th ed. 2014) (“To
make (facts, etc.) apparent or clear by evidence; to prove”).
For the foregoing reasons, we sustain the 35 U.S.C. § 103 rejections
of claims 1–3, 6–11, 14–19, and 22–30.
CONCLUSION
Claim(s) Rejected Basis Affirmed Reversed
1–3, 6–11, 14–19,
22–30
§ 101 1–3, 6–11,
14–19, 22–30

1–3, 6–11, 14–19,
22–30
§ 103 1–3, 6–11,
14–19, 22–30

DECISION
We affirm the rejections of claims 1–3, 6–11, 14–19, and 22–30.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv).
AFFIRMED