T. DEAN et al.

Patent Trials and Appeals Board

Jan 1, 2021

2020002552 (P.T.A.B. Jan. 1, 2021)

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.
15/140,882 04/28/2016 T. Phillip DEAN E088 1010.3 4205
118311 7590 01/01/2021
Toering Patents PLLC
P.O. Box 1419
Leesburg, VA 20177
EXAMINER
REFAI, RAMSEY
ART UNIT PAPER NUMBER
3661
NOTIFICATION DATE DELIVERY MODE
01/01/2021 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):
admin@toeringpatents.com
rick@toeringpatents.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte T. PHILLIP DEAN, RICHARD EDWIN DEHORITY,
JAMES MICHAEL DEHORITY, and
WOODROW W. CHAMBERLAIN
____________________

Appeal 2020-002552
Application 15/140,882
Technology Center 3600
____________________

Before JOHN C. KERINS, JILL D. HILL, and JEREMY M. PLENZLER,
Administrative Patent Judges.

KERINS, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellant1 seeks our review under 35 U.S.C. § 134(a) of the
Examiner’s Decision rejecting claims 22–38, the only claims now pending in
the application. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 The term “Appellant” is used herein to refer to “applicant” as defined in
37 C.F.R. § 1.42. Appellant identifies eMars, Inc., as the real party in
interest. Appeal Br. 3.
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CLAIMED SUBJECT MATTER
Appellant’s invention relates to a computer-implemented method for
systematically coordinating analysis of payroll information. Independent
Claim 22 is illustrative, and is reproduced below:
22. A computer-implemented method for systematically
coordinating analysis of payroll information, the method
comprising:

receiving payroll information for each of a plurality of
employees from a contractor;

for each of the plurality of employees, performing, via a
computer, an automated compliance check on the payroll
information collected from the contractor, wherein the
automated compliance check determines whether the payroll
information for an individual one of the plurality of employees
complies with regulations applicable to the individual one of the
plurality of employees;

storing, as verified payroll information in at least one database,
the payroll information for each of the plurality of employees that
satisfied the automated compliance check;

performing, via the computer, an automated fraud check on the
verified payroll information by analyzing the verified payroll
information of at least two of the plurality of the employees in
the aggregate to identify at least one instance of possible fraud
not otherwise identifiable from the verified payroll information
of any individual one of the plurality of employees; and

notifying at least one auditor or at least one government agency
of the at least one instance of possible fraud.

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REJECTIONS
The Examiner rejects:
(i) claims 22–38 under 35 U.S.C. § 101, as being directed to ineligible
subject matter;
(ii) claims 22–38 on the ground of nonstatutory obviousness-type
double patenting, as being unpatentable over claims 1–20 of Dean (US
8,036,960 B2, issued Oct. 11, 2011);
(iii) claims 22, 24–32, and 34–37 under 35 U.S.C. § 103(a) as being
unpatentable over Kahn (US 6,401,079 B1, issued June 4, 2002) in view of
Gavan (US 6,601,048 B1, issued July 29, 2003).
A rejection of claims 22–38 under 35 U.S.C. § 103(a) in view of Kahn
alone is withdrawn. Ans. 3. Additionally, the rejection based on
unpatentability over Kahn in view of Gavan is withdrawn as to claims 23,
33, and 38. Id.
ANALYSIS
Claims 22–38--Patent-ineligible Subject Matter--35 U.S.C. § 101
Appellant argues that the Examiner’s rejection of all pending claims
under 35 U.S.C. § 101 as being directed to patent-ineligible subject matter is
in error. Appellant argues claims 22, 24, 29, 30, 32, 34, 35, and 37 as a
group, and provides separate arguments directed to claims 23, 25, 26, 27, 28,
31, 33, 36, and 38. Appeal Br. 7–20. We take claim 22 as representative of
the group that also includes claims 24, 29, 30, 32, 34, 35, and 37, and those
claims stand or fall with claim 22. The claims that are separately argued are
addressed separately from claim 22 at the conclusion of the analysis directed
to claim 22.

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Applicable Legal Principles
Section 101 of the Patent Act states:
Whoever invents or discovers any new and useful process,
machine, manufacture, or composition of matter, or any new and
useful improvement thereof, may obtain a patent therefor, subject
to the conditions and requirements of this title.
35 U.S.C. § 101. This provision contains an implicit exception: “Laws of
nature, natural phenomena, and abstract ideas are not patentable.” Alice
Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014).
To distinguish patents that claim laws of nature, natural phenomena,
and abstract ideas from those that claim patent-eligible applications, we first
determine whether the claims are directed to a patent-ineligible concept. Id.
at 217. If they are, we consider the elements of each claim, individually and
“as an ordered combination,” to determine if additional elements “‘transform
the nature of the claim’ into a patent-eligible application” by providing an
“inventive concept” to ensure the patent amounts to significantly more than
a patent on the ineligible concept itself. Id. at 217–18.
The USPTO has issued guidance for applying this framework. 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7,
2019) (“Revised Guidance”). Under the Revised Guidance, to determine
whether a claim is “directed to” an abstract idea, we evaluate whether the
claim recites (1) any judicial exceptions, including certain groupings of
abstract ideas listed in the Revised Guidance (i.e., mathematical concepts,
certain methods of organizing human activities such as a fundamental
economic practice, or mental processes); and (2) additional elements that
integrate the judicial exception into a practical application (see MPEP2

2 Manual of Patent Examining Procedure.
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§§ 2106.05(a)–(c), (e)–(h)). See Revised Guidance, 84 Fed. Reg. at 52–55.
Only if a claim (1) recites a judicial exception and also (2) does not
integrate that exception into a practical application, do we then consider
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. Revised Guidance, 84 Fed. Reg.
at 56.

Claims 22, 24, 29, 30, 32, 34, 35, and 37
Examiner’s Findings and Determinations
The Examiner determines that all of the operative steps recited in
method claim 22 are related to payroll data and fraud analysis that can be
performed as a series of mental steps, and thus fall within the abstract idea
category of mental processes. Ans. 6. The Examiner determines claim 22
lacks additional elements beyond the abstract idea that amount to
significantly more, in that the only additional elements, i.e., the claimed at
least one computer and at least one database, are generically recited as being
used in their ordinary capacity to implement the abstract idea. Id.
The Examiner additionally finds that the additional elements do not
integrate the abstract idea into a practical application because they do not
impose any meaningful limits on practicing the abstract idea, nor are the
additional elements indicative of an inventive concept. Ans. 6.
Step 1 – Statutory Category
Claim 22 recites a method, which is a process, and thus recites one of
the enumerated categories of eligible subject matter in 35 U.S.C. § 101.
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Therefore, the ultimate issue before us is whether claim 22 is directed to a
judicial exception without significantly more.
Step 2A(i): Does the Claim Recite a Judicial Exception?
We agree with the Examiner that claim 1 recites an abstract idea. The
Revised Guidance includes, as forms of abstract ideas, (1) mathematical
concepts and calculations and (2) mental processes–concepts performed in
the human mind. Revised Guidance, 84 Fed. Reg. at 52; see Ans. 3, 5.
The computer-implemented method of claim 22 recites steps of
“receiving payroll information,” “performing . . . an automated compliance
check on the payroll information,” “storing . . . the payroll information for
each of the plurality of employees that satisfied the automated compliance
check,” “performing . . . an automated fraud check on the verified payroll
information by analyzing the verified payroll information . . . to identify at
least one instance of potential fraud,” and “notifying at least one auditor or
at least one government agency of the at least one instance of possible
fraud,” which all recite aspects of the abstract idea. Appeal Br., Claims
Appendix.
Appellant appears to acknowledge that at least a portion of the method
recites an abstract idea, in asserting that “Appellant has pointed to an
additional element of claim 22, for example, that falls outside the abstract
idea, that provides a meaningful limitation to practicing the abstract idea,
and that provides an inventive concept.” Reply Br. 4. Appellant reproduces
the following limitation from claim 22 which is asserted to fall outside the
abstract idea:
performing, via the computer, an automated fraud check on the
verified payroll information by analyzing the verified payroll
information of at least two of the plurality of the employees in
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the aggregate to identify at least one instance of possible fraud
not otherwise identifiable from the verified payroll information
of any individual one of the plurality of employees.
Id.
Appellant refers to this limitation as the “Analyzing Feature of Claim
22.” Id. Appellant asserts that it was error for the Examiner to have “merely
lumped” the Analyzing Feature into the alleged abstract idea. Id. Appellant
does not, however, traverse the Examiner’s finding that the Analyzing
Feature step is one of the steps deemed to be a mental process that can be
performed mentally and manually by a user. We agree with the Examiner
that, absent evidence or cogent technical argument to the contrary, the
Analyzing Feature step is indeed a mental process or step in the claim, and is
properly “lumped” in with the other steps in claim 22, in the sense of
treating them all as being capable of being performed mentally, thus
individually and collectively reciting an abstract idea.
For the foregoing reasons, we determine that claim 22 recites abstract
ideas of method steps which can be performed as mental processes in the
human mind.
Step 2A, Prong Two: Is There Integration into a Practical
Application?
We next consider whether claim 1 recites any additional elements that
integrate the abstract ideas into a practical application. Revised Guidance,
84 Fed. Reg. at 54 (Revised Step 2A, Prong Two). As noted above,
Appellant argues that the Analyzing Feature step should be considered to be
an element in addition to the abstract idea for the purposes of determining
whether claim 22 integrates the abstract idea into a practical application.
Reply Br. 4–5.
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Appellant maintains that:
The Analyzing Feature of Claim 22 eliminates the practice of
fraud detection performed on information from individual
employees from its scope, thereby placing a meaningful (and
significant) limitation to practicing fraud analysis. The
Analyzing Feature of Claim 22 is not a feature necessary to
practicing the general concept identified by the Examiner of
“fraud analysis by performing a compliance and fraud check on
payroll information and notifying an auditor or government
agency of the possible fraud.”
Reply Br. 4–5.
As to the first contention, claim 22 does not specifically eliminate a
practice of fraud detection performed on information from individual
employees; claim 22 recites a method “comprising”3 the steps including the
Analyzing Features, but not to the exclusion of another possible step
whereby some form of fraud analysis is performed on information from
individual employees. That there might be certain types of possible fraud
that are identifiable only by analyzing information of at least two employees,
as the claim language suggests, does not limit the claimed process to only
that type of analysis. As to the second contention, even if the Analyzing
Feature is not necessary to practice fraud analysis as a general matter, that
does not detract from the seemingly admitted fact that the Analyzing
Feature, as recited in Claim 22, can be performed in the mind of a user, thus
being a mental step and abstract idea.
“It has been clear since Alice that a claimed invention’s use of the
ineligible concept to which it is directed cannot supply the inventive concept

3 The use of the open-ended transitional phrase “comprising” does not have
the effect of excluding additional, unrecited elements. See, e.g., Mars Inc. v.
H.J. Heinz Co., 377 F.3d 1369, 1376, (Fed. Cir. 2004).
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that renders the invention ‘significantly more’ than that ineligible concept.”
BSG Tech LLC v. Buyseasons, Inc., 899 F.3d 1281, 1290 (Fed. Cir. 2018);
see id. at 1291 (“As a matter of law, narrowing or reformulating an abstract
idea does not add ‘significantly more’ to it.”); Versata Dev. Grp., Inc. v. SAP
Am., Inc., 793 F.3d 1306, 1335 (Fed. Cir. 2015) (claims that improved an
abstract idea, but not a computer’s performance, were held unpatentable).
Accordingly, we determine that claim 22 lacks any additional
elements that are sufficient to integrate the abstract ideas recited therein into
a practical application.
Step 2B: Does Claim 22 Include an Inventive Concept?
We next consider whether claim 22 recites elements, individually, or
as an ordered combination, that provide an inventive concept. Alice, 573
U.S. at 217–18.
Appellant argues that the Analyzing Feature provides the inventive
concept of aggregating information from two employees to identify potential
fraud not otherwise identifiable from information of individual employees.
Reply Br. 5. Appellant asserts that the Analyzing Feature is not shown to be
in the prior art, and for that reason, should be regarded as an inventive
concept. Id.
The Revised Guidance states, under Step 2B, “examiners should . . .
evaluate the additional elements individually and in combination . . . to
determine whether they provide an inventive concept (i.e., whether the
additional elements amount to significantly more than the exception itself).”
84 Fed. Reg. at 56. As the Analyzing Feature has been determined to be part
of the exception itself, and not an additional element, Appellant’s reliance on
that aspect of the claim as providing an inventive concept is misplaced.
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Taking the claimed elements individually, claim 22 recites abstract
ideas in the form of mental processes as steps performed on a generic
computer and database, as discussed above. We fail to see anything
unconventional about the “ordered combination” that is not merely the sum
of the parts. See In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 615
(Fed. Cir. 2016); see also Elec. Power Grp., 830 F.3d 1350, 1355 (Fed. Cir.
2016) (holding that the claims interpreted in light of the specification
required only off-the-shelf, conventional computer, network, and display
technology to gather, send, and present desired information and “displaying
concurrent visualization” required only readily-available displays).
Conclusion
Accordingly, we determine that claim 22 does not recite any elements,
individually or as an ordered combination, that provide an inventive concept
sufficient to transform the abstract ideas into patent eligible subject matter.
Thus, we sustain the rejection of claim 22 as being directed to patent-
ineligible subject matter under a judicial exception to 35 U.S.C.
§ 101. Claims 24, 29, 30, 32, 34, 35, and 37 fall with claim 22.

Claims 23, 25, 26, 27, 28, 31, 33, 36, and 38
For each of these claims, which depend from either independent claim
22 or 32, Appellant argues that the Examiner has failed to provide proper
support that the limitations recited in the claims are well-understood,
routine, or conventional, in accordance with Berkheimer. Appeal Br. 15–20.
The requirement to establish that a particular limitation is well-
understood, routine, or conventional, applies onto to claim limitations that
are beyond the judicial exception. Revised Guidance, 84 Fed. Reg. at 56.
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The Examiner found that the limitations in each of these claims are steps
characterized as mental process steps which are not beyond the judicial
exception, and we agree. Ans. 10–14. The Examiner specifically notes that
no conclusion is made or relied on that the limitations in these claims are
well-understood, routine, or conventional. Id.
Accordingly, Appellant’s argument for these claims fails to apprise us
of Examiner error. We sustain the rejection of claims 23, 25, 26, 27, 28, 31,
33, 36, and 38 as being directed to patent-ineligible subject matter under a
judicial exception to 35 U.S.C. § 101.

Claims 22–38--Nonstatutory Obviousness-type Double Patenting
The Examiner determines that the subject matter of claims 22–38 on
appeal are not patentably distinct from the subject matter of claims 1–20 in
Dean. Final Act. 4–5. Appellant posits that this rejection is not the subject
of this appeal, and that a terminal disclaimer obviating the rejection is to be
filed once otherwise patentable subject matter is determined. Appeal Br. 7;
Reply Br. 2–3. An appeal is presumed to be taken from the rejection of all
claims under rejection unless claims are cancelled by an amendment filed by
the applicant and entered by the Office. 37 C.F.R. § 41.31(c).
There being no traversal on the merits of this rejection, and there
being no terminal disclaimer of record, the rejection is summarily sustained.

Claims 22, 24–32, and 34–37--35 U.S.C. § 103(a)--Kahn/Gavan
The Examiner relies on Kahn as teaching most of the limitations set
forth in independent claims 22 and 32, but finds that Kahn does not disclose
the step of performing an automated fraud check that involves analyzing
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payroll information from at least two employees in the aggregate to identify
possible fraud that is not otherwise identifiable from analyzing individual
payroll information. Final Act. 9. The Examiner asserts that Gavan
discloses such a step, citing to several passages in Gavan in support. Id.,
citing Gavan, Abstract; col. 4, ll. 38–43; col. 8, ll. 21–29; col 28, ll. 13–24;
claims 1, 14.
Appellant argues, inter alia, that, even if the teachings of Gavan are
properly considered as being combinable with Kahn, Gavan does not
disclose any aspect of detecting fraud events in payroll information, nor how
fraud detection in a telecommunications system, to which Gavan is
principally directed, could or would be applied to fraud detection in payroll
systems. Appeal Br. 27. Appellant additionally argues that none of the
portions of Gavan identified by the Examiner evidence the analyzing of
information from at least two employees in the aggregate in identifying
possible fraud that is not identifiable from analyzing information from
employees individually. Reply Br. 8–9.
Appellant has the better position here. The Examiner provides no
clear indication as to how any of the portions of Gavan that are cited and
relied on would apply in any manner to payroll information and detection of
possible fraud, were the Gavan teachings somehow used to modify the Kahn
system. The Examiner also does not adequately explain how Gavan can be
said to perform analysis of information pertaining to two employees or other
similar plural sources of information in the aggregate, and how that would
be seen as identifying potential fraud, whereas analysis of such sources of
information on an individual basis would not allow for identification of
potential fraud.
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The rejection of claims 22, 24–32, and 34–37 as being unpatentable
over Kahn and Gavan is not sustained.
DECISION
The rejection of claims 22–38 under 35 U.S.C. § 101, as being
directed to ineligible subject matter, is affirmed.
The rejection of claims 22–38 on the ground of nonstatutory
obviousness-type double patenting is affirmed.
The rejection of claims 22, 24–32, and 34–37, as being
unpatentable over Kahn and Gavan is reversed.

DECISION SUMMARY
In summary:
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
22–38 101 Eligibility 22–38
22–38 Nonstatutory
Obviousness-type
Double Patenting
22–38
22. 24–
32, 34–37
103(a) 22, 24–32,
34–37
Overall
Outcome
22–38

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