Osama S. Tayeb et al.

Patent Trials and Appeals Board

Sep 30, 2019

13536539 - (D) (P.T.A.B. Sep. 30, 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.
13/536,539 06/28/2012 Osama S. TAYEB 740742-000043 7936
78198 7590 09/30/2019
Studebaker & Brackett PC
8255 Greensboro Drive
Suite 300
Tysons, VA 22102
EXAMINER
MADAMBA, CLIFFORD B
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
09/30/2019 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):
info@sbpatentlaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
______________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte OSAMA S. TAYEB and ISAM AL-FILALI
____________________

Appeal 2018-0056321
Application 13/536,539
Technology Center 3600
____________________

Before ANTON W. FETTING, PHILIP J. HOFFMANN, and
BRADLEY B. BAYAT, Administrative Patent Judges.

BAYAT, Administrative Patent Judge.

DECISION ON APPEAL

This is an Appeal from the final rejection2 of claims 1–8, 20, and 21,
which constitute all the claims pending in this Application, under 35 U.S.C.
§ 101 as directed to non-statutory subject matter. We have jurisdiction to
review the case under 35 U.S.C. §§ 134(a) and 6(b).
We AFFIRM.

1 Appellants identify King Abdulaziz University as the real party in interest.
Appeal Br. 2.
2 The rejection under 35 U.S.C. § 103(a) was withdrawn. Adv. Act. 4.
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STATEMENT OF THE CASE
“The present invention relates to financial instruments and the
exchange where they are traded. More particularly, the present invention
relates to financial instruments comprising knowledge-based stock and
knowledge-based commodities for trading on an independent knowledge
bourse.” Spec. 1.
Sole independent claim 1, reproduced below with added bracketed
matter, is representative of the subject matter on appeal.
1. A computer product, comprising:
[(a)] a computer-implemented program stored on a non-
transitory computer-readable medium that, when loaded into a
computer, causes the computer to perform a method for determining
knowledge maturity risk of intellectual property-related products
and/or services, the computer-implemented method comprising:
[(b)] obtaining knowledge development stages relating to
Knowledge Maturity Levels (KML), the knowledge development
stages including a technology life cycle;
[(c)] characterizing, by the computer, each knowledge
development stage as any one of a number of Knowledge Maturity
Product/Service Levels (KMPL), the KMPLs including Generate,
Transform, Enable, Use Internally, Sell/Transfer, Add Value, Use by
Customers, and Evaluate actions, wherein each of the actions related
to the Knowledge Maturity Product/Service Levels (KMPL) include a
plurality of sub-KMPL activities;
[(d)] assigning, by the computer, a risk weight to each of said
sub-KMPL activities so that each respective sub-KMPL activity is
associated with a respective risk of undertaking;
[(e)] determining, by the computer, a Maturity Score as a
product of said risk weight and completion status of each of the sub-
KMPL activities, wherein the maturity score is based on the following
equation: Maturity Score = (Risk Weight) x (Completion Status) x
(100), where the risk weight is a value between 0 and 1, the
completion status has a value of 0 for incomplete status and 1 for
complete status;
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[(f)] determining, by the computer, the knowledge maturity
risk based on said maturity score based, wherein the knowledge
maturity risk increases as the maturity score decreases, and
[(g)] conducting a trade or transfer of the intellectual property
products or services based on the knowledge maturity risk, wherein
knowledge is intellectual property-related products and services.

Appeal Br. 10 (Claims App.).

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. 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
in petitioners’ application explain the basic concept of hedging, or protecting
against risk.”).
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
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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.
USPTO § 101 Guidance
The PTO recently published revised guidance on the application of
§ 101. USPTO, 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 activity such as a fundamental economic
practice, or mental processes); and
(2) additional elements that integrate the judicial exception into
a practical application (see 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, do we 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.
See Guidance.

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ANALYSIS
Alice Step 1
Does claim 1 “recite a judicial exception?”
Under the first step of the Alice inquiry, the Examiner determined that
in their broadest reasonable interpretation and in light of the
[S]pecification, the steps of the exemplary claims, as recited,
can be interpreted as describing and/or being directed towards
facilitating calculating the development risk of a technology-
related product, which is similar and corresponds to concepts
identified by the courts as abstract, such as such as a
fundamental economic practice (e.g., concepts relating to the
economy and commerce) as well as an idea of itself (e.g., data
recognition and storage as in Content Extraction; collecting
information, including wherein limited to a particular content
(which does not change its character as information) and/or
analyzing information by steps people go through in their
minds, or by mathematical algorithms, without more, as
essentially mental processes as in Electric Power Group) and
mathematical relationships and/or formulas (e.g., mathematical
concepts, algorithms, relationships, formulas, calculations as in
Flook).
Adv. Act. 2. According to the Examiner, “claim 1 recites steps and/or
processes that are similar and correspond to other concepts that have been
identified by the courts as abstract such as:”
“Obtaining knowledge development stages relating to
Knowledge Maturity Levels (KML), the knowledge
development stages including a technology life cycle”, which
describes the abstract idea of merely transmitting and receiving
data/information associated with a product and which is similar
and corresponds to the abstract concept(s) of an idea of itself
(e.g., data recognition and storage as in Content Extraction;
collecting information, including wherein limited to a particular
content (which does not change its character as information).

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“Characterizing, by the computer, each knowledge development
stage as any one of a number of Knowledge Maturity
Product/Service Levels (KMPL), the KMPLs including
Generate, Transform, Enable, Use Internally, Sell/Transfer,
Add Value, Use by Customers, and Evaluate actions, wherein
each of the actions related to the Knowledge Maturity
Product/Service Levels (KMPL) include a plurality of
subKMPL activities”, which describes the abstract idea of
merely analyzing (sorting) data/information and which is
similar and corresponds to the abstract concept(s) of an idea of
itself (e.g., data recognition and storage as in Content
Extraction; collecting information, including wherein limited to
a particular content (which does not change its character as
information).

“Assigning, by the computer, a risk weight to each of said sub-
KM PL activities so that each respective sub-KM PL activity is
associated with a respective risk of undertaking”, which
describes the abstract idea of merely performing a mathematical
calculation and which is similar and corresponds to the abstract
concept(s) of a fundamental economic practice (e.g., concepts
relating to the economy and commerce) as well as mathematical
relationships and/or formulas (e.g., mathematical concepts,
algorithms, relationships, formulas, calculations as in
Flook).

“Determining, by the computer, a Maturity Score as a product
of said risk weight and completion status of each of the sub-KM
PL activities, wherein the maturity score is based on the
following equation: Maturity Score = (Risk Weight) x
(Completion Status) x (100), where the risk weight is a value
between 0 and 1, the completion status has a value of 0 for
incomplete status and 1 for complete status”, which describes
the abstract idea of merely performing a mathematical
calculation and which is similar and corresponds to the abstract
concept(s) of a fundamental economic practice (e.g., concepts
relating to the economy and commerce) as well as mathematical
relationships and/or formulas (e.g., mathematical concepts,
algorithms, relationships, formulas, calculations as in Flook).
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“Determining, by the computer, the knowledge maturity risk
based on said maturity score based, wherein the knowledge
maturity risk increases as the maturity score decreases”, which
describes the abstract idea of merely performing a mathematical
calculation and which is similar and corresponds to the abstract
concept(s) of a fundamental economic practice (e.g., concepts
relating to the economy and commerce) as well as mathematical
relationships and/or formulas (e.g., mathematical concepts,
algorithms, relationships, formulas, calculations as in Flook).

“Conducting a trade or transfer of the intellectual property
products or services based on the knowledge maturity risk,
wherein knowledge is intellectual property-related products and
services”, which describes the abstract idea of merely
conducting trading transactions of a product on an exchange
and which is similar and corresponds to the abstract concept(s)
of a fundamental economic practice (e.g., concepts relating to
the economy and commerce).
Id. at 2–3; Ans. 6–8. “Hence the steps of the claim, taken individually or as
an ordered combination, correspond to abstract ideas.” Id. at 3.
Appellants do not dispute the Examiner’s characterization of the claim
and corresponding abstract ideas. Rather, Appellants take issue with the
Examiner’s reliance on the USPTO’s eligibility guidelines. Appeal Br. 3
(citing In re Smith, 815 F.3d 816 (Fed. Cir. 2016). Appellants do not
address the Examiner’s analysis, but instead argue the legitimacy of the
PTO’s eligibility guidelines. Id. at 4 (“Mere recitation from a questionable
flowchart penned by an anonymous source and accompanied by conclusory
remarks is not the basis for any rejection.”).
We cannot address Appellants’ argument that the PTO’s Guidelines
on Patent Subject Matter Eligibility exceeds the scope of § 101. Appellants’
challenge to the Guidelines is not properly before us in this Appeal, and
thus, unpersuasive of Examiner error. See 35 U.S.C. § 141(a) (stating that
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an applicant “dissatisfied with the final decision” of the Board may appeal
that decision to the Federal Circuit).
Appellants’ argument that the rejection is not based on preemption
(Appeal Br. 5) is not persuasive. Cf. OIP Techs., Inc. v. Amazon.com, Inc.,
788 F.3d 1359, 1362–63 (Fed. Cir.) (“[T]hat the claims do not preempt all
price optimization or may be limited to price optimization in the e-
commerce setting do not make them any less abstract.”), cert. denied 136 S.
Ct. 701 (2015). Preemption is not a separate test for patent eligibility or
under the Supreme Court’s Alice framework, and as such, the rejection was
not required to be based on preemption. See Ans. 5 (“preemption not an
issue if it already fails the 2 part test of the Mayo test”). Although
“preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility.” Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
“Where a patent’s claims are deemed only to disclose patent ineligible
subject matter” under the Alice framework, “preemption concerns are fully
addressed and made moot.” Id.
We also disagree with Appellants’ contention that the Examiner
failed to address the claims as a whole. Appeal Br. 8–9. Indeed, as shown
above, the Examiner assesses the claim as a whole under the broadest
reasonable interpretation of the claim in light of the Specification, and
individually analyzes each limitation. Besides expressing their
disagreement, Appellants fail to substantively challenge and rebut the
Examiner’s explicit findings.
When considered collectively, the limitations of claim 1 recite trading
financial instruments (i.e., knowledge stocks and futures) based on the
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knowledge maturity risk. Conducting a security transaction is a fundamental
economic practice that falls within the Guidance’s “Certain methods of
organizing human activity,” which is an abstract idea. See Guidance, 84
Fed. Reg. at 52 n.14 (citing Alice, 573 U.S. at 219–20 (concluding that use
of a third party to mediate settlement risk is a “fundamental economic
practice” and, thus, an abstract idea); id. (describing the concept of risk
hedging identified as an abstract idea in Bilski as “a method of organizing
human activity”); Bilski, 561 U.S. at 611–12 (concluding that hedging is a
“fundamental economic practice” and, therefore, an abstract idea);3 Inventor
Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378–79 (Fed.
Cir. 2017) (holding that concept of “local processing of payments for
remotely purchased goods” is a “fundamental economic practice, which
Alice made clear is, without more, outside the patent system.”); OIP Techs.,

3 For example, independent claim 1 at issue in Bilski (561 U.S. at 599) reads
as follows:
(a) initiating a series of transactions between said
commodity provider and consumers of said commodity wherein
said consumers purchase said commodity at a fixed rate based
upon historical averages, said fixed rate corresponding to a risk
position of said consumers;
(b) identifying market participants for said commodity
having a counter-risk position to said consumers; and
(c) initiating a series of transactions between said
commodity provider and said market participants at a second
fixed rate such that said series of market participant transactions
balances the risk position of said series of consumer
transactions.
The security transaction recited here in independent claim 1 is more basic
than the claim determined to be ineligible in Bilski, because independent
claim 1 only involves one security transaction, while the claim in Bilski
involved “initiating a series of transactions” between multiple entities.

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788 F.3d at 1362–63 (concluding that claimed concept of “offer-based price
optimization” is an abstract idea “similar to other ‘fundamental economic
concepts’ found to be abstract ideas by the Supreme Court and this court.”).
Accordingly, claim 1 recites a judicial exception.

Does claim 1“integrate that exception into a practical application?”
Having determined that claim 1 recites a judicial exception, we next
look to whether the claim recites “additional elements that integrate the
exception into a practical application.” Guidance, 84 Fed. Reg. at 53–54.
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. at 51. A claim may integrate the judicial exception when, for example, it
reflects an improvement to technology or a technical field. Id. at 55.
We are unable to discern any improvement to computer technology.
See MPEP § 2106.05(a). The additional limitations of independent claim 1
recite “a computer-implemented program stored on a non-transitory
computer-readable medium that, when loaded into a computer, causes the
computer to perform” steps for conducting a security transaction based on
the knowledge security risk, and not how a computer operates to perform
those functions. There are no details as to how the computer performs this
task. The recitation of a result-oriented solution that lacks any details as to
how the computer performed the modifications is the equivalent of the
words “apply it.” Intellectual Ventures I LLC v. Capital One Fin. Corp.,
850 F.3d 1332, 1341–42 (Fed. Cir. 2017) (citing Elec. Power Grp., LLC,
830 F.3d 1350, 1356 (Fed. Cir. 2016) (cautioning against claims “so result-
focused, so functional, as to effectively cover any solution to an identified
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problem.”)). This is indistinguishable from mere instructions to conduct a
trade based on the determined knowledge maturity risk, which is part of
conducting a security transaction, on a computer. MPEP §§ 2106.05(f), (h).
Appellants’ reliance on Trading Technologies4 is unavailing (Appeal
Br. 5–6) because claim 1 does not even recite a graphical user interface. In
Trading Technologies, the Federal Circuit accepted the lower court’s
holding, that the claims provided “an inventive concept that allows traders to
more efficiently and accurately place trades using this electronic trading
system.” Trading Technologies, 675 F. App’x at 1004. “The court
distinguished this system from the routine or conventional use of computers
or the Internet, and concluded that the specific structure and concordant
functionality of the graphical user interface are removed from abstract ideas,
as compared to conventional computer implementations of known
procedures.” Id. Thus, the distinguishing feature for the claims
in Trading Technologies was an advance in efficiency provided by an
improved graphical user interface as compared to other computer processes.
In contrast to Trading Technologies, no such distinguishing features are
recited in claim 1, and the method before us does not concern an
improvement to a technology.
Furthermore, Appellants argue “the present claims are comparable to
Diamond v. Diehr.”5 Appeal Br. 7. Unlike the process claimed in Diehr,
which was directed to a specific industrial process, i.e., “a physical and
chemical process for molding precision synthetic rubber products” (Diehr,

4 Trading Techs. Int’l Inc. v. CQG, Inc., 675 F. App’x 1001 (Fed. Cir. 2017)
(hereinafter “Trading Technologies”).
5 Diamond v. Diehr, 450 U.S. 175 (1981).
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450 U.S. at 184), claim 1 merely recites a computer-implemented method of
conducting a trade based on the determined knowledge maturity risk.
Achieving a better result by mathematical manipulation of data (determining
a maturity score and knowledge maturity risk) does not by itself transform
an otherwise abstract idea into patentable subject matter. The Court held the
claims in Diehr to be patent eligible despite the fact that several steps of the
process used a mathematical equation, not because of it. Id. Diehr, in
contrast, employed the result of its calculations to determine the cure time of
the rubber and signal the mold to open.
Appellants’ reliance on Visual Memory6 (Appeal Br. 8) is also
unpersuasive. The patent-eligible claim of Visual Memory was directed to
“[c]onfiguring the [claimed] memory system based on the type of processor
connected to the memory system [, which] is the improvement in computer
technology.” Visual Memory, 867 F.3d at 1261. The patent-eligible claim
in Visual Memory recited features that improved the computer memory. In
contrast to the claim at issue in Visual Memory and as discussed above,
Appellants’ claim is directed to conducting a trade based on the
mathematically determined knowledge maturity risk––not an improvement
of computer technology.
Alice Step 2
Does claim 1 provide an inventive concept?
To determine whether a claim provides an inventive concept, the
additional elements are considered—individually and in combination—to
determine whether they (1) add a specific limitation beyond the judicial
exception that is not “well-understood, routine, [and] conventional” in the

6 Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253 (Fed. Cir. 2017).
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field or (2) simply append well-understood, routine, and conventional
activities previously known to the industry, specified at a high level of
generality, to the judicial exception. Guidance, 84 Fed. Reg. at 56.
In that regard, Appellants argue that under Berkheimer v. HP Inc., 881
F.3d 1360 (Fed. Cir. 2018), the Examiner “erroneously declare[d] that no
evidence is needed for a factual finding” of whether a claim element or
combination of elements is well-understood, routine, and conventional.
Reply Br. 5. We disagree because the court in Berkheimer held that “[t]he
patent eligibility inquiry may contain underlying issues of fact.”
Berkheimer, 881 F.3d at 1365 (quoting Mortgage Grader, Inc. v. First
Choice Loan Servs. Inc., 811 F.3d 1314, 1325 (Fed. Cir. 2016) (“The
§ 101 inquiry ‘may contain underlying factual issues.”’)). The inquiry as to
whether a claim element or combination is well-understood, routine, and
conventional falls under step two in the § 101 framework. Berkheimer v. HP
Inc., 890 F.3d 1369, 1374 (Fed. Cir. 2018) (citation omitted). As such, there
is no genuine issue of material fact when the only alleged “inventive
concept” is the abstract idea. Id. (“Berkheimer and Aatrix leave untouched
the numerous cases from this court which have held claims ineligible
because the only alleged ‘inventive concept’ is the abstract idea”) (citation
omitted). “When there is no genuine issue of material fact regarding
whether the claim element or claimed combination is well-understood,
routine, [and] conventional to a skilled artisan in the relevant field, this issue
can be decided on summary judgment as a matter of law.” Berkheimer, 881
F.3d at 1368. Thus, evidence may be helpful where, for instance, facts are in
dispute, but evidence is not always necessary. Appellants have not
persuaded us that a factual dispute has arisen and evidence is necessary to
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resolve such a dispute. “Patent law does not protect claims to an ‘asserted
advance in the realm of abstract ideas . . . no matter how groundbreaking the
advance.’” Berkheimer, 890 F.3d at 1373 (citing SAP Am., Inc. v. Investpic,
LLC, 890 F.3d 1016, 1024 (Fed. Cir. 2018)).
As for the recited computer components (“a computer-implemented
program stored on a non-transitory computer-readable medium . . . loaded
into a computer”), we agree with the Examiner that they are “well-
understood, routine, conventional,” and thus, do not provide an “inventive
concept” that is “significantly more” under Alice. See Ans. 10.
In view of the foregoing, we are not persuaded that the Examiner
erred in concluding that claim 1 is directed to patent-ineligible subject
matter. Accordingly, we sustain the Examiner’s rejection of claim 1 under
35 U.S.C. § 101, and of dependent claims 2–8, 20, and 21, which are not
separately argued.
DECISION
We AFFIRM the rejection under 35 U.S.C. § 101.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a).

AFFIRMED