Samer Elbizri

Patent Trials and Appeals Board

Sep 30, 2019

12899344 - (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.
12/899,344 10/06/2010 Samer ElBizri I7707-0120 5596
62993 7590 09/30/2019
BUCHALTER
18400 VON KARMAN AVE.
SUITE 800
IRVINE, CA 92612
EXAMINER
ZARE, SCOTT A
ART UNIT PAPER NUMBER
3649
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):
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PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte SAMER ELBIZRI
Appeal 2019-001158
Application 12/899,344
Technology Center 3600
BEFORE DANIEL S. SONG, WILLIAM A. CAPP, and LEE L. STEPINA,
Administrative Patent Judges.
STEPINA, Administrative Patent Judge.
DECISION ON APPEAL

STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant,1 Samer ElBizri, appeals
from the Examiner’s decision to reject claims 1, 2, 5–8, 10–12, 21 and 22.
Final Act. 1. 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(a). Appellant identifies the real party in interest as Samer
ElBizri. Appeal Br. 1.
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CLAIMED SUBJECT MATTER
The claims are directed to a system for offsetting invoice obligations.
Claim 1, reproduced below, is illustrative of the claimed subject matter.
1. An invoice resolution system, comprising:
at least one sales invoice, wherein each sales invoice
comprises a credit value and is associated with a seller, and
at least one purchase invoice, wherein each purchase
invoice comprises a debit value and is associated with a
customer,
a non-transitory computer readable storage medium and a
network computer system,
at least one database or repository stored on the computer
readable storage medium, the network computer system or a
combination thereof comprising executable code for collecting
one or more pieces of information for the at least one sales
invoice and the at least one purchase invoice; and
an executable code stored on a computer readable storage
medium for, intelligently determining an invoice chain
comprising the at least one purchase invoice and the at least one
sales invoice, and offsetting the debit value of the at least one
purchase invoice with the credit value of the at least one sales
invoice to form an offset value, wherein a first seller associated
with the at least one sales invoice is not a customer in the invoice
chain.
Br. 19 (Claims App.).
REJECTIONS
I. Claims 1, 2, 5–8, 10–12, 21, and 22 are rejected under the
judicial exception to 35 U.S.C. § 101 as being directed to an abstract idea
without significantly more. Final Act. 2.
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II. Claim 5 is rejected under 35 U.S.C. § 112, second paragraph, as
indefinite.2 Final Act. 7.
OPINION
Rejection I
Appellant makes arguments for the patent eligibility of claims 1, 2, 7,
8, 10–12, 21, and 22 as a group. See Appeal Br. 8–27. We select claim 1 as
the representative claim, and claims 2, 7, 8, 10–12, 21, and 22 stand or fall
with claim 1. See 37 C.F.R. § 41.37(c)(1)(iv).
Referring to limitations in claim 1 requiring a system having (1) a
sales invoice, (2) a purchase invoice, and (3) executable code for
determining an invoice chain and offsetting a debit value with a credit value
to form an offset value, the Examiner concludes that this claim is directed to
any of three judicial exceptions to patent eligibility under § 101. Final Act.
3–6. Specifically, the Examiner finds that claim 1 is directed to each of “a
fundamental economic practice,” “a method of organizing human activity,”
and “an idea of itself.” Id. at 4–6.
Appellant contends that the system in claim 1 is not directed to a
fundamental economic practice because the system is not “foundational or
basic.” Br. 8. Specifically, Appellant states, “there is nothing foundational
or basic about using a computer system for ‘determining an invoice chain
comprising at least one purchase invoice having a debit value and at least
one sales invoice having a credit value, and offsetting the debit value with
the credit value to form an offset value’ as presently claimed.” Id.

2 The Examiner withdrew rejections of claims 6 and 22 as indefinite. Ans. 3.
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Appellant also specifically contests the Examiner’s characterization of
the subject matter of claim 1 as a method of organizing human activity,
asserting that the Examiner provided no analysis of the specific facts of the
case. Br. 9. Appellant also notes that not all methods of organizing human
activity are abstract ideas. Br. 9 (citing MPEP § 2106.04(a)(2).
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. See Alice, 573 U.S. 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.”
Id. 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.”).
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,
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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 (1853))); 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 (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. (alteration in the original) (quoting
Mayo, 566 U.S. at 77). “[M]erely requir[ing] generic computer
implementation[] fail[s] to transform that abstract idea into a patent-eligible
invention.” Id.
In January of 2019, the PTO published revised guidance on the
application of § 101. 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY
GUIDANCE, 84 Fed. Reg. 50 (Jan. 7, 2019) (hereinafter “Memorandum”).
Under Step 2A of that 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 MANUAL OF PATENT EXAMINING
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PROCEDURE (“MPEP”) §§ 2106.05(a)–(c), (e)–(h) (9th Ed., Rev.
08.2017, 2018)).
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then look, in Step
2B, 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 Memorandum.
Step 1 – Statutory Category
Claim 1 recites “a non-transitory computer readable storage medium
and a network computer system” (Appeal Br. 19 (Claims App.)), and,
therefore, falls into either the machine or article of manufacture categories of
statutory subject matter.
Step 2A, Prong 1 – Recitation of Judicial Exception
Claim 1 also recites, in part, “at least one sales invoice . . . at least
one purchase invoice . . . intelligently determining an invoice chain
comprising the at least one purchase invoice and the at least one sales
invoice.” Br. 19 (Claims App.). Claim 1 further recites, “offsetting the
debit value of the at least one purchase invoice with the credit value of the at
least one sales invoice to form an offset value.” Id.
Offsetting debt with credit and creating an offset value amounts to a
fundamental economic practice similar to the method of exchanging
financial obligations between two parties as in Alice. 573 U.S. at 213 (“the
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claims are designed to facilitate the exchange of financial obligations
between two parties by using a computer system as a third-party
intermediary.”); see also id. at 219. Appellant’s contention that the subject
matter of claim 1 is “not foundational or basic” is unavailing because of the
similarity between Appellant’s claim 1 and the claim at issue in Alice. See
id. at 213, n. 2. We appreciate Appellant’s contention that “[a]s provided in
[Appellant’s] disclosure, exemplary embodiments involve computer-
implemented systems that ‘are peer-to-peer [and] do not use or need to use
aggregation at a clearing institution or a substitution of counter parties.’”
Br. 12. Thus, unlike the claim at issue in Alice, at least some exemplary
embodiments do not require aggregation at a clearing institution (clearing
house). See Alice at 213, n. 2, 220. Nonetheless, such a difference does not
make the recitation in claim 1 less of a fundamental economic practice.
Rather, it would appear to make it more of one by eliminating a third party
from the transaction. Such fundamental economic practices qualify as one
of the certain methods of organizing human activity. See id. 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’’). Thus, claim 1 recites an abstract
idea, one of the judicial exceptions. See Alice, 573 U.S. at 216.
Accordingly, the outcome of our analysis under Step 2A, Prong 1, requires
us to proceed to Step 2A, Prong 2. See Memorandum, 84 Fed. Reg. at 54.
Step 2A, Prong 2 – Integrated Into a Practical Application
In Step 2A, Prong 2, we determine whether the recited judicial
exception is integrated into a practical application of that exception by: (a)
identifying whether there are any additional elements recited in the claim
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beyond the judicial exception(s); and (b) evaluating those additional
elements individually and in combination to determine whether they
integrate the exception into a practical application. See Memorandum. This
evaluation requires an additional element or a combination of additional
elements in the claim to 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
exception. See id.
Appellant contends that claim 1 is directed to a “technical solution to
the limitations facing current computer-implemented systems, and does not
recite the network computer system ‘with a high level of generality’” and
“one current limitation of such systems is the inability to fully offset invoice
obligations without making a payment drawn from a bank, credit or
investment account.” Br. 12.
Appellant’s argument on this point is unavailing because claim 1 does
not improve a technical field, instead, it improves (or carries out) the
financial transaction discussed above. Further, the system recited in claim 1
does not improve the functioning of the computer itself, instead, the system
merely carries out the fundamental economic activity recited in claim 1. Nor
do we see any transformation or particular machine recited in claim 1.
In summary, claim 1 does not integrate the recited judicial exception
into a practical application. Thus, we proceed to step 2B.
Step 2B – Well-Understood, Routine, Conventional Activity
The Examiner next finds that “the [claimed] computer components
merely collect data, sort data, and output data” and “the claims merely
amount to applying the abstract idea on a computer.” Final Act. 6.
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Appellant contends that the Examiner has not adequately supported, in
writing, how the elements recited in claim 1 amount to well-understood,
routine, and conventional material. Br. 12–13 (citing Berkheimer v. HP Inc.,
881 F.3d 1360 (Fed. Cir. 2018)). Appellant also contends “the claims are
clearly directed to an inventive concept. In fact, the Examiner correctly
acknowledged ‘the present claims ... are distinguishable from prior art of
record.’ (Final Office Action dated April 6, 2016, Pg. 4).” Id. at 13.
We are not apprised of Examiner error on this point. The Examiner
correctly finds that the “improvement” recited in claim 1 relates to the
abstract idea itself, and, is therefore, not significantly more than the abstract
idea. Ans. 7. Furthermore, the non-transitory computer readable medium
and computer network system are, despite Appellant’s unsupported
contention to the contrary (Br. 12), recited at a high level of generality.
Such elements are not the kind of additional features, taken alone or as an
ordered combination, that result in significantly more than the recitation of
the abstract idea performed on a generic computer. See Alice, 573 U.S. at
226 (“Nearly every computer will include a “communications controller”
and “data storage unit” capable of performing the basic calculation, storage,
and transmission functions required by the method claims.”). Moreover, the
fact that the claimed invention may be unconventional or novel as compared
to the prior art of record does not establish that it is directed to patent
eligible subject matter. See Ass’n for Molecular Pathology v. Myriad
Genetics, Inc., 569 U.S. 576, 591 (2013).
We have considered all of Appellant’s arguments in support of the
patent eligibility of claim 1, but find them unpersuasive. Accordingly, we
sustain the rejection of claims 1, 2, 7, 8, 10–12, 21, and 22 as being directed
to patent-ineligible subject matter.
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Claim 5
Claim 5 recites, “[t]he system of claim 1, wherein an ending point of
an invoice chain, a length of an invoice chain, a discount offered by a seller,
and an amount of an invoice, is utilized to determine an optimal starting
point for the invoice chain.” Br. 19 (Claims App.) (emphasis added). For
the reasons discussed below relating to Rejection II, we pro forma reverse
the rejection of claim 5 as being directed to patent ineligible subject matter.
Claim 6
Claim 6 recites, “[t]he system of claim 1, wherein the invoice chain is
determined by at least one condition, comprising an ending point of an
invoice chain, a length of an invoice chain, a discount offered by a seller,
and an amount of an invoice.” Br. 19–20.
Appellant’s entire argument in support of the patent eligibility of
claim 6 amounts to restating the language of claim 6 and then asserting
“[t]hese features are clearly not foundational or basic and have been looked
over in the Office Action. For this reason, Appellant respectfully requests
that the U.S.C. 101 rejection be withdrawn.” Br. 15.
We do not agree with Appellant on this point. The invoice chain is
already recited in claim 1, and setting forth the basis upon which the chain is
determined, using factors such as those recited in claim 6, is merely a part of
the fundamental economic practice recited in claim 1. Accordingly, we
sustain the Examiner’s rejection of claim 6 as being directed to patent-
ineligible subject matter.
Rejection II
The Examiner determines that claim 5 is indefinite because, in light of
the Specification, “it remains ambiguous as to under what circumstances the
starting point would be ‘optimal.’” Final Act. 8.
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Appellant argues, “the specification states with clarity the conditions
for an ‘optimal’ starting point. For example, the specification explains ‘an
Optimal Starting Point depends on the conditions or results defined and
determined in the system’s ‘Determined Optimal Conditions’.’
(Specification, pg. 15 lines 26–28).” Br. 16. Appellant goes on to quote
lines 13–24 of page 13 and lines 5–9 of page 30 of the Specification as
support for the assertion that “the ‘optimal’ starting point is clearly defined
in the specification and is not indefinite under 35 U.S.C. 112.” Id.
Appellant’s argument is unavailing. Even assuming for the sake of
argument that the variables that control whether a starting point is an
“optimal” one are clearly defined and measurable, the Specification does not
explain how a person of ordinary skill in the art would use the value of such
variables to arrive at an optimal starting point. In other words, what is
optimal, itself, is not defined. For example, if the optimal starting point of
the invoice chain is determined based only on the factors recited in claim 5,
and such factors were available for precise calculation, the Specification still
leaves unanswered the question of whether starting point X, starting point Y,
or some other starting point for the chain would be the “optimal” starting
point. In this regard, we note that claim 5 does not merely require basing the
determination of the starting point of the invoice chain on a particular set of
conditions. Rather, claim 5 requires that “an optimal” starting point is
determined based on those conditions. Accordingly, we sustain the
Examiner’s rejection of claim 5 as indefinite.
As claim 5 is indefinite, we are unable to apply the Alice test as set
forth above for Rejection I. Thus, without commenting on the patent-
eligibility of claim 5, we reverse the rejection of this claim as being directed
to patent-ineligible subject matter as set forth supra.
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DECISION
The Examiner’s rejections are AFFIRMED.
More specifically,

DECISION SUMMARY
Claims
Rejected
Basis Affirmed Reversed
1, 2, 5–8,
10–12, 21,
and 22
§ 101 1, 2, 6–8,
10–12, 21,
and 22
5
5 §112 5
FINALITY AND 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