Thomas W. Denslow et al.

Patent Trials and Appeals Board

Oct 28, 2019

13956172 - (D) (P.T.A.B. Oct. 28, 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.
13/956,172 07/31/2013 Thomas W. DENSLOW III DISN/0181US (060007) 1097
77754 7590 10/28/2019
DISNEY ENTERPRISES, INC.
c/o Patterson & Sheridan, LLP
24 Greenway Plaza
Suite 1600
Houston, TX 77046-2472
EXAMINER
DELICH, STEPHANIE ZAGARELLA
ART UNIT PAPER NUMBER
3623
NOTIFICATION DATE DELIVERY MODE
10/28/2019 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):
PAIR_eOfficeAction@pattersonsheridan.com
PSDocketing@pattersonsheridan.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte THOMAS W. DENSLOW III, HAINING YU, HAI CHU, and
CAMERON DAVIES
____________

Appeal 2018-006035
Application 13/956,172
Technology Center 3600
____________

Before CAROLYN D. THOMAS, ERIC B. CHEN, and
HUNG H. BUI, Administrative Patent Judges.

THOMAS, Administrative Patent Judge.

DECISION ON APPEAL

Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1–6, 9–14, 17–22, and 25–30. We have
jurisdiction over the appeal under 35 U.S.C. § 6(b).
We AFFIRM.
The present invention relates generally to generating sales proposals
by determining a level of preference for each of a plurality of items. See
Abstr.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42. Appellant identifies the real party in interest as Disney
Enterprises, Inc. Appeal Br. 3.
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Independent claim 1, reproduced below, is representative of the
appealed claims:
1. A computer-implemented method to allocate available
time segments in which to broadcast digital media, by a networked
application having a plurality of modules executing on distinct
compute nodes, the computer-implemented method comprising:
determining, by a preference module and for a target
entity, a respective level of preference of reserving each of a plurality
of available time segments of different content types and in which to
broadcast digital media specified by the target entity, wherein each
level of preference is determined based on preference data stored in a
database;
identifying, by an optimization module, at least one
template, of a plurality of templates, applicable to generate a proposed
allocation, wherein each of the templates is of a respective type of
proposed allocation and specifies a respective set of optimization
parameters;
performing, by a grouping module, a clustering analysis
on each available time segment in order to classify each available time
segment into a respective one of a plurality of categories;
determining, by a payment module and for each available
time segment, a price range acceptable to the target entity for the
respective, available time segment;
computing, by a demand module, a respective demand
for each of the different content types of the available time segments;
selecting, by the networked application and for each
identified template, a subset of the available time segments based on:
(i) the respective demand computed for each of the different content
types of the available time segments, (ii) the determined level of
preference of reserving each of the available time segments, (iii) the
classification of each of the available time segments, and (iv) the
respective set of optimization parameters specified for each identified
template; and
generating, by the networked application when executed
by one or more computer processors, a proposed allocation
comprising: (i) a total cost for the proposed allocation, (ii) a cost for
each available time segment in the subset for each identified template,
and (iii) the respective type of proposed allocation of each identified
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template; wherein at least one of the available time segments is
allocated to the target entity based on the proposed allocation;
wherein each module of the plurality of modules of the
networked application, including the preference, optimization,
grouping, payment, and demand modules, executes on a distinct
compute node operatively connected to a network, in order to
orchestrate allocation of available time segments in which to
broadcast digital media.

Appellant appeals the following rejection:
Claims 1–6, 9–14, 17–22, and 25–30 are rejected under 35 U.S.C.
§ 101 because the claimed invention is directed to patent-ineligible subject
matter. Final Act. 3–8.
We review the appealed rejections for error based upon the issues
identified by Appellant, and in light of the arguments and evidence produced
thereon. Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010) (precedential).

ANALYSIS
Rejection under § 101
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 the framework,
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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.”). For example, 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,
69 (1972)).
Recently, the USPTO published revised guidance on the application
of 35 U.S.C. § 101. USPTO’s 2019 Revised Patent Subject Matter
Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Revised Guidance”).
Under the Revised Guidance “Step 2A,” the office first looks 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)). 84 Fed. Reg. at
51–52, 55.
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, does the Office then
(pursuant to the Revised Guidance “Step 2B”) look to whether the claim:
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(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. 84 Fed. Reg. at 56.

Step 2A, Prong 1 (Does the Claim Recite a Judicial Exception?)
With respect to independent method claim 1, and similarly, non-
transitory computer-readable storage medium claim 9 and system claim 17,
the Examiner determines that the claims are directed to “proposing an
allocation and allocating segments” (Final Act. 3), which the Examiner
associates with mental processes (id. at 5, 6), which is a type of abstract
idea.
A claim recites a mental process when the claim encompasses acts
people can perform using their minds or pen and paper. See, e.g.,
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372–73 (Fed.
Cir. 2011) (determining that a claim whose “steps can be performed in the
human mind, or by a human using a pen and paper” is directed to an
unpatentable mental process). This is true even if the claim recites that a
generic computer component performs the acts. See, e.g., Versata Dev.
Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1335 (Fed. Cir. 2015) (“Courts
have examined claims that required the use of a computer and still found that
the underlying, patent-ineligible invention could be performed via pen and
paper or in a person's mind.”); see also 2019 Eligibility Guidance 84 Fed.
Reg. at 52 n.14 (emphasis omitted) (“If a claim, under its broadest
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reasonable interpretation, covers performance in the mind but for the
recitation of generic computer components, then it is still in the mental
processes category unless the claim cannot practically be performed in the
mind.”).
Claim 1 recites at least the following limitations: (1) “determining . . .
a respective level of preference of reserving each of a plurality of available
time segments,” (2) “identifying . . . at least one template,” (3) “performing
. . . a clustering analysis,” (4) “determining . . . a price range,”
(5) “computing . . . a respective demand for each of the different content
types,” (6) “selecting . . . a subset of the available time segments,” and
(7) “generating . . . a proposed allocation.” See claim 1. It is the Examiner’s
position that these limitations, under their broadest reasonable interpretation,
recite mental processes because the limitations all recite mental processes
that can be performed in the human mind or by using pen and paper. See
Final Act. 5.
However, Appellant’s Specification discloses:
Product/service provider agreements with buyers can
become very complex when many products which may expire
are discussed within one deal and when the product and deal
level pricing is highly negotiable. With just a small number of
products, the number of potential combinations of bundles and
prices cannot be thoroughly analyzed by the human brain. The
product/service provider may provide an initial proposal or set
of proposals to the buyer as a foundation for negotiations
between the parties. Current methodologies to support the
generation of these proposals are largely based on pre-defined
packages or simple adjustments to prior deals. These
adjustments typically lack the insight into the complexities of
the overall inventory and demand picture to produce
incrementally profitable bundling or pricing recommendations.
Furthermore, these resulting proposals only output a single
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recommendation, thus lacking any insight into the unknown
behavior or preferences occurring during the negotiation
process.
Spec. ¶ 2. In other words, Appellant’s Specification explicitly notes that
“[p]roduct/service provider agreements with buyers can become very
complex” and “the number of potential combinations of bundles and prices
cannot be thoroughly analyzed by the human brain.” Id. Considering
Appellant’s aforementioned disclosure, we determine that Appellant’s
Specification notes features, i.e., pricing proposals, which cannot
“practically” be performed in the mind. As a result, we disagree with the
Examiner that the claimed invention recites mental processes.
On the other hand, the Examiner also determines that “[t]he claims
recite a series of steps that relate to solving a business problem.” Ans. 3.
Upon reviewing the Specification and the claim as a whole, as summarized
above, it is clear the claims recite commercial interactions, such as
advertising or sales activities or behaviors. For example, Appellant’s
Specification further notes:
Embodiments disclosed herein provide systems, computer-
implemented methods, and computer program products to
generate sales proposals for many inventory items that may
have variable pricing and expiration dates. Generally, internal
users associated with the seller may generate the proposal,
which may then be provided to a buyer or the buyer’s agency
for review. To generate a sales proposal, the software computes
customer preference and willingness to pay for a bundle or
grouping of products and generates bundles of products from
many possible combinations that are sellable and desirable to
the specific target customer. As used in this disclosure,
“customer” includes potential customers. The software also
places internal value on inventory to support maximized
revenue opportunity as well as maximized profit opportunity.
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The software may also set optimal “list” prices for inventory at
a segmented level to reduce the displacement of revenue that
occurs by selling inventory to customers when a higher paying
customer may still exist. In one embodiment, a sales proposal
may include an optimized mix of inventory with line item
prices. The result may also include multiple proposals
optimized relative to an optimization strategy. Generally,
pricing in the proposals may be based on a variety of criteria
such as current market conditions for the supplier, market
demand for the supplier’s inventory, historical transactions, and
external conditions in the overall marketplace.
Spec. ¶ 19.

While embodiments disclosed herein are discussed with the
media advertising sales industry (including, but not limited to
television, video, Internet, print, and radio) as a reference
example, the techniques disclosed herein may support other
industries. The general setting is a business-to-business
transaction in a marketplace where prices are highly negotiable
and there are many products that may be perishable and can be
packaged together in different ways to create a long list of
potential proposals presentable to the buyer. One example of a
marketplace includes a cable advertising scatter market, where
every sale of commercial inventory as well as the price for the
inventory is negotiated. For cable networks having different
channels or broadcast mediums (e.g. television, Internet, print,
radio), manually building a proposal mix is heavily biased
towards the inventory most frequently seen in the past.
Inventory in such a setting is highly perishable in that
commercial inventory for one day cannot be saved and sold for
the next day. Furthermore, the inventory hierarchy in such a
setting is highly heterogeneous.
Id. at 20. In other words, Appellant’s Specification describes generating
sales proposals, fundamental economic practices (i.e., certain methods of
organizing human activity) (see Ans. 3; “solving a business problem”),
which is another type of abstract idea.
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For example, at least the following decisions from our reviewing court
have found many types of fundamental commercial practices patent
ineligible: OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir.
2015), cert. denied, 136 S. Ct. 701 (mem) (2015) (offer-based price
optimization); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir.
2014) (transaction guaranty); Personalized Media Commc’ns, L.L.C. v.
Amazon.com Inc., 671 F. App’x 777 (mem) (Fed. Cir. 2016) (receiving
instructions for ordering); Macropoint, LLC v. Fourkites, Inc., 671 F. App’x
780 (mem) (Fed. Cir. 2016) (tracking freight); Wireless Media Innovations,
LLC v. Maher Terminals, LLC, 636 F. App’x 1014 (mem) (Fed. Cir. 2016)
(monitoring shipping containers); America’s Collectibles Network, Inc. v.
Jewelry Channel, Inc. USA, 672 F. App’x 997 (mem) (Fed. Cir. 2017)
(conducting reverse auction by adjusting price and inventory); and EasyWeb
Innovations, LLC v. Twitter, Inc., 689 F. App’x 969 (Fed. Cir. 2017)
(receiving, authenticating, and publishing data).
Appellant challenges the Examiner’s determination on the ground that
“the claims do not preempt any alternative approaches of allocating
available time segments in which to broadcast digital media . . . [thus,] the
instant claim is not abstract.” Appeal Br. 15–16.
Although pre-emption “‘might tend to impede innovation more than it
would tend to promote it,’ thereby thwarting the primary object of the patent
laws” (Alice, 573 U.S. at 216 (citing Mayo, 566 U.S. at 71)), “the absence of
complete preemption does not demonstrate patent eligibility” (Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)).
Moreover, because we find the claimed subject matter covers patent-
ineligible subject matter, the pre-emption concern is necessarily addressed.
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“Where a patent’s claims are deemed only to disclose patent ineligible
subject matter under the Mayo framework, . . . preemption concerns are fully
addressed and made moot.” Ariosa Diagnostics, 788 F.3d at 1379.
Other than the aforementioned argument relating to preemption,
Appellant does not directly challenge whether claim 1 recites an abstract
idea, i.e., a fundamental economic practice. The dependent claims contain
limitations that recite the identified abstract idea, and do not create any
additional elements beyond this abstract idea. Appellant’s arguments also
fail to persuasively explain how the elements in the dependent claims recite
more than the abstract ideas. Appeal Br. 19–32.
Therefore, for at least the aforementioned reasons, we agree with the
Examiner that claim 1 recites an abstract idea, which we conclude is “a
fundamental economic practice.”
Step 2A—Prong 2 (integration into Practical Application)2
Under the Revised Guidance, we now must determine if additional
elements in the claims integrate the judicial exception into a practical
application (see MPEP § 2106.05(a)–(c), (e)–(h)).
We discern no additional element (or combination of elements)
recited in Appellant’s representative claim 1 that integrates the judicial
exception into a practical application. See Revised Guidance, 84 Fed. Reg.
at 54–55 (“Prong 2”). For example, Appellant’s claimed additional elements
(e.g., “a networked application,” “a preference module,” “ a target entity,”

2 We acknowledge that some of the considerations at Step 2A, Prong 2,
properly may be evaluated under Step 2 of Alice (Step 2B of the Office
revised guidance). For purposes of maintaining consistent treatment within
the Office, we evaluate them under Step 1 of Alice (Step 2A of the Office
revised guidance). See Revised Guidance, 84 Fed. Reg. at 55 n.25, 27–32.

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“an optimization module,” “template,” “a grouping module,” “a payment
module,” “a demand module,” and “computer processors”) do not: (1)
improve the functioning of a computer or other technology; (2) are not
applied with any particular machine (except for a generic computer); (3) do
not effect a transformation of a particular article to a different state; and (4)
are not applied in any meaningful way beyond generally linking the use of
the judicial exception to a particular technological environment, such that
the claim as a whole is more than a drafting effort designed to monopolize
the exception. See MPEP §§ 2106.05(a)–(c), (e)–(h).
Appellant contends “[t]he claimed process solves the technological
problem of improving efficiency, load balancing, and accuracy of allocating
available time segments in which to broadcast digital media . . . because the
specific modules can execute in parallel and harness the computing power of
multiple compute nodes.” Appeal Br. 16. Appellant further contends that
“[l]ike the claims at issue in Amdocs, the presently claimed solution relies on
a distributed architecture of a networked application having specific modules
executing on distinct compute nodes.” Id. at 19. In analyzing whether a
claim is directed to an abstract idea, we look to other decisions where similar
concepts were previously found abstract by the courts. See Amdocs (Israel)
Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016).
For example, the claims at issue in Enfish were directed to a specific
type of data structure, i.e., a self-referential table for a computer database,
designed to improve the way a computer carries out its basic functions of
storing and retrieving data. See Enfish, LLC v. Microsoft Corp., 822 F.3d
1327, 1335–36 (Fed. Cir. 2016). In rejecting a § 101 challenge, the court in
Enfish held that “the plain focus of the claims is on an improvement to
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computer functionality itself, not on economic or other tasks for which a
computer is used in its ordinary capacity.” Id. at 1336.
Here, Appellant does not direct our attention to anything in the
Specification to indicate that the invention provides an improvement in the
computer’s technical functionality. Instead, the claimed sales proposals
improves economic tasks, i.e., pricing optimization. That is, here the
arguably innovative technique of the appealed claims is inextricably a part of
the abstract idea of “solving a business problem.” See Ans. 3. Moreover,
nothing in the claims, understood in light of the Specification, requires
anything other than an off-the-shelf, conventional computer used for
collecting and processing/analyzing various information/data. See Spec.
¶ 76 (“These computer program instructions may be provided to a processor
of a general purpose computer . . .”). Therefore, unlike Enfish, the claims
are directed not to improvement in computer capabilities, but to the results
of applying an abstract idea.
Furthermore, regarding Appellant’s contention that “specific modules
can execute in parallel and harness the computing power of multiple
compute nodes” (see Appeal Br. 16), Appellant is reminded that “relying on
a computer to perform routine tasks more quickly or more accurately is
insufficient to render a claim patent eligible.” OIP Techs., 788 F.3d at 1363
(citing Alice, 573 U.S. at 224 (“use of a computer to create electronic
records, track multiple transactions, and issue simultaneous instructions” is
not an inventive concept)).
For at least the reason noted supra, we determine that claim 1
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(1) recites a judicial exception and (2) does not integrate that exception into
a practical application. Thus, representative claim 1 is directed to the
aforementioned abstract idea.
Alice/Mayo—Step 2 (Inventive Concept)
Step 2B identified in the Revised Guidance
Turning to the second step of the Alice inquiry, we now look to
whether claim 1 contains any “inventive concept” or adds anything
“significantly more” to transform the abstract concept into a patent-eligible
application. Alice, 573 U.S. at 216. As recognized by the Revised
Guidance, an “inventive concept” under Alice step 2 can be evaluated based
on whether an additional element or combination of elements:
(1) adds a specific limitation or combination of limitations that are
not well-understood, routine, conventional activity in the field,
which is indicative that an inventive concept may be present; or
(2) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception, which is indicative
that an inventive concept may not be present.

See Revised Guidance, 84 Fed. Reg. at 56; see MPEP § 2106.05(d).
We find no element or combination of elements recited in Appellant’s
claim 1 that contains any “inventive concept” or adds anything “significantly
more” to transform the abstract concept into a patent-eligible application.
Appellant has not adequately explained how claim 1 is performed such that
it is not a routine and conventional function of a generic computer.
Furthermore, a finding of novelty or non-obviousness does not require the
conclusion that the claimed subject matter is patent-eligible. Although the
second step in the Mayo/Alice framework is termed a search for an
“inventive concept,” the analysis is not an evaluation of novelty or
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nonobviousness, but, rather, is a search for “an element or combination of
elements that is ‘sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the [ineligible concept] itself.”’ Alice,
573 U.S. at 217. “Groundbreaking, innovative, or even brilliant discovery
does not by itself satisfy the § 101 inquiry.” Ass’n for Molecular Pathology
v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013). A novel and non-
obvious claim directed to a purely abstract idea is, nonetheless, patent-
ineligible. See Mayo, 566 U.S. at 90. See also Diamond v. Diehr, 450 U.S.
175, 188–89 (1981) (“The ‘novelty’ of any element or steps in a process, or
even of the process itself, is of no relevance in determining whether the
subject matter of a claim falls within the § 101 categories of possibly
patentable subject matter.”).
Because Appellant’s independent claim 1 is directed to a patent-
ineligible abstract concept, does not include additional elements that
integrate the judicial exception into a practical application, and does not add
a specific limitation beyond the judicial exception that is not “well-
understood, routine, and conventional,” we sustain the Examiner’s rejection
of the claims under 35 U.S.C. § 101 as being directed to non-statutory
subject matter in light of Alice, its progeny, and the Revised Guidance.

CONCLUSION
In summary:
Claims
Rejected
Basis  Affirmed Reversed
1–6, 9–14, 17–22,
25–30
§ 101   1–6, 9–14,
17–22, 25–30

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No period for taking any subsequent action in connection with this
appeal may be extended under 37 C.F.R. § 1.136(a).

AFFIRMED