Scanning System For Generating a Prosthesis Model Not Invalid Under § 101

Takeaway:  In denying a motion to dismiss, a district court in the SD of TX found the claimed subject matter was not directed to an abstract idea.  While the court did find that the claimed subject matter employed "software to process images and perform 3D modeling," the court also found that the claimed subject matter did involve substantial tangible components that included generating models to create a breast prosthetic as well as the use of "alignment markers placed on the breast and captured in the image to aid in computer modeling" such that the claimed subject matter was not an abstract idea. ContourMed Inc. v. American Breast Care LP, 4-15-cv-02769 (TXSD March 17, 2016, Order) (Miller, J.)

Details:  ContourMed Inc. (the plaintiff) owned U.S. Patent No. 7,058,439 (the "'439 Patent") and sued American Breast Care L.P. (the defendant) for patent infringement in the Southern District of Texas. The defendant moved to dismiss the lawsuit asserting that the '439 Patent claimed ineligible subject matter directed to the abstract idea of generic computer for modeling data collected from a generic scanner. The plaintiff countered that the scanning system was not generic, and that even if the court considered the patent as directed to an abstract idea, "the use of novel, non-abstract components transforms the invention into patent-eligible subject matter." The district recently denied this motion to dismiss by finding that the claimed subject matter was directed to patent-eligible subject matter.

Claim 1 of the '439 Patent recites:

     1.  A method of forming a model of a breast prosthesis for a patient who has had one breast at least partially removed, comprising:
     providing a scanning system comprising one or more imaging devices and one or more alignment markers, wherein at least one of the alignment markers comprises a tangible object, wherein the tangible object is noticeable in a scanned image and may be used to manipulate a scanned image as a reference point;
     arranging at least one of the alignment markers in the middle of the body of the patient and within the field of view of at least one of the imaging devices;
     determining a first set of data elements using the scanning system is based on a shape of the patient's intact breast;
     determining a first computer model of the intact breast based on the first set of data elements;
     using at least one of the alignment markers in the middle of the body of the patient as a fixed reference point relative to the patient to determine alignment of the first computer model of the intact breast;
     applying a reflection transformation to the first computer model of the intact breast to form a second computer model, the second computer model comprising a second set of data points that represents a mirror image of the first computer model;
     determining a third set of data elements using the scanning system based on a surgical site at which the breast was at least partially removed;
     determining a third computer model based on the third set of data elements; and
     combining the third computer model and the second computer model to form a breast prosthesis model,
     wherein the second computer model defines an anterior portion of the breast prosthesis model that mirrors the intact breast and the third computer model defines a posterior portion of the breast prosthesis model that is custom fit to the surgical site.

The court began its analysis of whether the claims at issue were directed to an abstract idea (Mayo Step 1). In its analysis, the court found that the claims at issue differed from Alice and Bilski because the claims were not directed to a "building block of the modern economy."

The court then distinguished the other cases cited by the defendant as lacking "physical components, merely beginning with data collection and ending with data storage." The court reasoned that "[w]hile the process claimed in the '439 Patent does employ software to process images and perform 3D modeling, the underlying concept involves substantial tangible components." More specifically, the claims at issue were directed to imaging a breast for the "ultimate end of creating a breast prosthetic, using alignment markers placed on the breast and captured in the image to aid in computer modeling."

The court did note that caution should be used against the approach that focuses only on physical or tangible results since this type of analysis "inappropriately focuses on the result of the claimed invention rather than the invention itself." However, the court still found that the claims were not directed to an abstract idea because "the concept of the invention involves substantially more than mere data collection and storage and does not threaten to pre-empt the use of scanners and computer modeling in other fields."

Based upon this analysis, the court did not move to Mayo Step 2 to determine whether the claims included an "inventive concept."

In some ways, this decision feels like the outcome was a result of the claims producing "a useful, concrete and tangible result."

Would Diehr and Morse Be Invalid Under the §101 Mayo Test?

As most patent practitioners are aware, the Supreme Court set forth a two-part test for determining patent eligibility under 35 U.S.C. § 101 in Alice Corp. v. CLS Bank International under the framework set forth in Mayo v. Prometheus Laboratories (e.g., the Mayo test). The Mayo test requires that (1) determine whether the claims at issue are directed to a patent-ineligible concept; and if so, (2) determine whether the claims at issue include an “inventive concept.”  In other words, a determination is being made of whether the claims at issue merely recite “well-understood, routine, and conventional activity” or whether an element or combination of elements within the patent recite an “inventive concept” that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.

If one were to apply the Mayo test to patents previously held to be patentable (e.g., the Diehr patent, the Morse patent, etc.) by the Supreme Court, those patents may very well be found to be invalid as being directed to patent ineligible subject matter.

Recent trends during Patent Office examination, patents in post-grant proceeds, and decisions by federal courts have resulted in a determination of claims that are directed to patent ineligible subject matter.  Typically, a patent examiner, a Patent Trial and Appeal Board (PTAB) panel, or a federal court will find the claim is directed to an abstract idea under step one of the Mayo test and then distill or dissect the ordered combination into individual claim elements to find each of the individual claim elements are directed to “well-understood, routine, and conventional activity” at step two of the Mayo test.

Additionally, patent examiners, PTAB panels, and courts (see Ariosa v. Sequenom) will look to the applicant’s or patent owner’s specification to support a finding under step one or step two of Mayo.  For instance, the Federal Circuit found that the method steps set forth in Sequenom’s patent did not support patentability because the specification stated “[t]he preparation of serum or plasma from the maternal blood sample is carried out by standard techniques.” In other words, the Federal Circuit found that “the method steps were well-understood, conventional and routine, the method of detecting paternally inherited cffDNA is not new and useful.”

One particularly famous Supreme Court case upholding that the technology claimed in the patent application was directed to patent eligible subject matter is Diamond v. Diehr.  The Diehr patent was directed to “accurate and automatic control of the molding time for rubber compounds and the automatic opening of rubber-molding presses when the cure is calculated to be complete.”  Claim 1 of the Diehr patent recited:

A method of operating a rubber-molding press for precision molded compounds with the aid of a digital computer, comprising:

providing said computer with a data base for said press including at least,

natural logarithm conversion data (1n),

the activation energy constant (C) unique to each batch of said compound being molded, and

a constant (x) dependent upon the geometry of the particular mold of the press,

initiating an interval timer in said computer upon the closure of the press for monitoring the elapsed time of said closure,

constantly determining the temperature (Z) of the mold at a location closely adjacent to the mold cavity in the press during molding,

constantly providing the computer with the temperature (Z),

repetitively performing in the computer, at frequent intervals during each cure, integrations to calculate from the series of temperature determinations the Arrhenius equation for reaction time during the cure, which is 1n v=CZ+x

where v is the total required cure time,

repetitively comparing in the computer at frequent intervals during the cure each said calculation of the total required cure time calculated with the Arrhenius equation and said elapsed time, and

opening the press automatically when a said comparison indicates completion of curing.

If one were to apply step one of the Mayo test, one could argue the abstract idea is controlling molding times for rubber compounds.  In fact, the Supreme Court stated in its decision to find that the claims were directed to patent eligible subject matter “We view respondents’ claims as nothing more than a process for molding rubber products…”  

Transitioning to step two of the Mayo test, one could find that each claim element was “well-understood, routine, and conventional activity.”  One of the claim elements recites a well-known mathematical formula.  The Diehr specification states the “invention uses computers of well-known type with data storage banks containing the time-temperature cure data for the compound or compounds being used” and that “the relatively simple system of FIG. 1 is easily expanded within the capability of many present-day computers.”  As such, the specification of Diehr illustrates that the technology being utilized was already present. 

Finally, treating each claim element as being well-understood and conventional, one could then find that the claims, as a whole, do not amount to anything other the sum of the well-understood and conventional claim elements.

Most patent practitioners remember the Supreme Court case O’Reilly v. Morse as holding that an abstract idea, apart from its implementation, is not directed to patent eligible subject matter when the Supreme Court invalidated claim 8 of the Morse patent.  However, the Supreme Court also held that claim 1 of the Morse patent to be directed to patent-eligible subject matter.  More specifically, the Supreme Court stated “[t]he first seven inventions, set forth in the specifications of his claims, are not subject to exception.”

Claim 1 of the Morse patent recites:

Making use of the motive power of magnetism, when developed by the action of such current or currents substantially as set forth in the foregoing description of the first principal part of my invention, as means of operating or giving motion to machinery which may be used to imprint signals upon paper or other suitable material, or to produce sounds in any desired manner, for the purpose of telegraphic communication at any distances.

In essence, Morse disclosed the use of repeaters in between a transmitter and receiver to restore the signal transmitted by the transmitted to substantially its initial level.  Morse admitted in his specification that “it had been essayed to use the currents of electricity or galvanism for telegraphic purposes” prior to his invention.  Additionally, the individual components utilized by Morse had been previously available.

Applying the Mayo test to claim 1 of the Morse patent may also result in the claimed subject matter being found to be directed to patent ineligible subject matter.  For example, applying step one of the Mayo test, one could find the abstract idea to be utilizing magnetism to provide “communication at any distances.”

Applying step two of the Mayo test, one could find that each of the individual components were “well-understood, routine, and conventional activities.”  Again, treating each claim element as being well-understood and conventional, one could then find that the claims as an ordered combination do not amount to anything other the sum of the well-understood and conventional claim elements.

Thus, application of the Mayo test to patents previously held to be directed to patent eligible subject matter by the Supreme Court would likely result in a contradicting decision that those patents are instead directed to patent ineligible subject matter.  However, a solution may reside in this statement from then Justice Rehnquist in Diamond v. Diehr: “when a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect (e. g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of 101.”  In other words, the claims need to be considered as a whole during application of step two of the Mayo test.  It is too simple to distill each claim into its individual claim elements to state that each element is “well-understood, routine, and conventional activity” and then consider that the ordered combination does not amount to anything other than the sum of those well-understood, routine, and conventional” claim elements.

New contributor to All Things Pros: Tyson Benson

Last week featured a guest post by Tyson Benson. I'm pleased to announce that Tyson will be joining All Things Pros as a regular contributor. Tyson's initial focus will be the topsy-turvy world § 101 in the Alice-Mayo regime.

Tyson Benson is a registered patent attorney and partner at Advent, LLP. Tyson's practice includes all aspects of patent prosecution and has experience drafting and prosecuting patent applications relating to integrated circuitry, electronics, medical devices, telecommunications, geographic information system technologies, graphics processing, computer networking, communications protocols, and computer architecture.

PTAB interprets "searching only a solutions data store" to allow a search of another database due to comprising

Takeaway: On appeal, the Applicant argued that the claim language "searching only a solutions data store" wasn't disclosed by the reference, which taught that both the "potential solutions" and the "approved fix" databases were searched. The Board disagreed, noting Applicant's use of the transition term "comprising" in the method claim. The reference system performed a first search in one database, and conditionally performed a second search on a different database. The scenario where no second search occurred was clearly covered by the claim language. An additional search of a second database wasn't excluded ("comprising") so the second scenario was also in the scope of the claim. (Ex parte Fisher, PTAB 2015.)

Details:

Ex parte Fisher
Appeal 2013-002943; Appl. No. 11/833,949; Tech. Center 3600
Decided:  November 24, 2015

The application on appeal dealt with automated technical support. A client application generated a system configuration profile and transferred it to a server. The server searched a knowledge base for relevant problem resolution information, using the profile to narrow the search. This problem resolution information was sent to the client in the form of a hyperlink to a web pages "instructive of" a problem solution.

A representative claim on appeal read:

1. A method for obtaining customer support, the method comprising:
[1] transmitting parameters specific to an end user product
    to a network–based application
          operable to dynamically generate a web page
               instructive of a solution to a problem associated with the end user product
          based on the parameters
          by searching only a solutions data store
               that stores a plurality of solutions
                    which were moved to the solutions data store from a predisposition solutions data store,
                         the predisposition solutions data store storing a plurality of potential solutions
                              that are accessible by technical support center agents
                              but inaccessible to an end user,
                    when each of the plurality of solutions
                         was validated and approved for use
                              based on implementation of the potential solutions
                                    by the technical support center agents;
[2] receiving an interactive link to the dynamically generated web page; and
[3] browsing the dynamically generated web page by selecting the interactive link.
(Emphasis added.)

The claim language on appeal was that emphasized above. The Examiner used a combination of four references to reject as obvious, and relied on Wing for the above-emphasized feature. The Applicant argued that the claims require searching only one data store – one having solutions moved from another store of solutions inaccessible to an end user.” The Applicant argued that in Wing, "both the ‘potential solutions’ (those not formally approved) and the ‘approved fix’ databases are searched ... regardless of where they are from.”

In the Answer, the Examiner maintained the rejection. The Examiner explicitly mapped the claimed "predisposition database" to Wing's attention file and the claimed "solutions data store" to Wing's dynamic disposition database. The Examiner characterized Wing's teachings as follows:

• "searching only a solutions data store that stores a plurality of solutions which were moved to the solutions data store from a predisposition solutions data store"
  [Wing: content developer can consider moving potential fixes from attention files to dynamic disposition database that stores approved fixes]
• predisposition solutions data store storing a plurality of potential solutions that are accessible by technical support center agents but inaccessible to an end user
  [Wing: attention files are only accessible by content developer/technician and not inaccessible by enduser]

The Applicant filed a Reply Brief to make several points. One, the Examiner equated Wing's dynamic disposition database with the claimed solutions data store, but "nowhere does Wing teach that only the disposition database is searched." Two, the "Examiner is incorrect that the 'attention files' of Wing are only accessible by content developer/technician." Wing merely stated that these files are accessible by a content developer, but "mentions nothing about others (e.g., end users) not being able to access the potential solutions therein.

The Board affirmed the obviousness rejection and discussed three different sub-issues. First, the method claim included only three steps, and almost all of step [1] related to activity after the transmitting, with language describing how the transmitted parameters affect a remote database. All this language was non-functional descriptive material, and thus given no patentable weight (citing King Pharm., Inc. v. Eon Labs, Inc., 616 F.3d 1267, 1279 (Fed. Cir. 2010)). Second, the Board found it "predictable to narrow the domain of a search in general," since it is "predictable to delete a step for the purpose of removing its function."

Finally, even giving patentable weight to the "searching only a solutions data store," limitation, the Board found that the Wing reference disclosed this feature. Wing's system performed a first search in one database, and conditionally performed a second search on a different database, depending on the results. A scenario where only the first search occurred was clearly covered by "searching only." And the use of "comprising" meant an additional search of a second database wasn't excluded, so the second scenario was also in the scope of the claim.

Here's the Board's full explanation:

     Wing describes searching only its solutions set database and that after making that search, only of that database, [when] an approved fix for a reported problem does not appear in the database of approved fixes, a potential solution, i.e. a solution that has not been formally administered and added to the database of approved fixes, may be provided to the end-user, to resolve their issues based on the live creation of a solution set.
     This second step may or may not occur by Wing’s wording. In the instance where it does not occur, the search only of the approved database is clear on its face. In the instance where it does occur, Wing does not say another database is searched, but rather that the technician himself creates a potential solution set. Even if the technician performs a search to create that solution set, Wing describes this as occurring subsequent to searching only the approved fixes. As the claim uses the transition phrase “comprising,” additional unrecited steps will not remove art from the scope of the claim.

My two cents: Oh, where do I begin ... Here's my biggest beef with this decision: it's a leap to characterize narrowing a search ("searching only") as removing a step. OK, there were two databases here. If you understand "search" to mean "search both" or "search all" then, yeah, "search only one" is narrowing. But who says a POSITA understands plain old search in this context to mean "search all" ? The Board offered no explanation, evidence, or reasoning about this, just the sweeping generalization that narrowing a search is analogous to removing a step, which is generally predictable and thus obvious. Note that the Examiner didn't use this rationale, and instead cited a specific benefit mentioned in the Wing reference.

Moving on to the "searching only" limitation. The Applicant understood Wing to teach searching two databases, and argued that the claim language excluded this. The Examiner never explained how "searching only a solutions data store" read on two searches. The Board came up with a clever (devious?) explanation involving additional steps and "comprising." To me, that explanation reads "only" out of the claim. "`Comprising' is not a weasel word with which to abrogate claim limitations." Spectrum Int'l, Inc. v. Sterilite Corp., 164 F.3d 1372, 1380 (Fed.Cir.1998).

Unless you look at it another way ?? The Applicant characterized Wing as a search of two databases – to me, clearly excluded by "searching only a solutions data store." Is the Board instead characterizing Wing as two searches? The first search is covered by the claim, because it is indeed  limited to the particular database recited in the claim (approved fixes = "solutions data store"). The second, separate, search of the potential fixes database is simply an extra step not excluded by the claim.

Is that a fair reading of Wing ... two separate searches, as compared to one search of two databases? Assuming there is a difference to a POSITA, which would a POSITA understand Wing to teach? I'd be surprised if the patent attorney writing the Wing spec meant to make such a distinction. In fact, the drafter of Wing would want his description to read on both implementations, right?

How do you craft a claim that avoids Wing? Do you need "consisting of" rather than "comprising"? Do you need to completely re-think the claim strategy? (Which can be very difficult to pull off when you're stuck with the spec that was filed.)

This post is about the Fisher decision and "searching only." But what if you're drafting Wing and want to cover both implementations: two separate searches; one search of two databases. Is there a way to craft a claim that covers both? Or maybe it's a good idea to have different claim sets directed to different implementations. Sometimes we patent attorneys get hung up on having one claim that captures everything.

Finally, Applicants should take heed of the Board's warning about including receiver behavior in a sender claim (or vice versa). Same goes for including server behavior in a client claim (or vice versa). I see this mentioned a lot in appeal decisions.

Guest Post: Beware – Patent Prosecution Arguments Can Be Utilized as Evidence of Patent-Ineligible Concept Under §101

[Guest Post by Tyson Benson, a registered patent attorney and partner at Advent, LLP. Tyson's practice includes all aspects of patent prosecution and has experience drafting and prosecuting patent applications relating to integrated circuitry, electronics, medical devices, telecommunications, geographic information system technologies, graphics processing, computer networking, communications protocols, and computer architecture.]

In a recent decision handed down by the Patent Trial and Appeal Board (PTAB), PTAB introduced a new grounds for rejection under 35 U.S.C. §101 and supported this new ground for rejection with the Appellant’s arguments made during prosecution.

In Ex parte Hoitsma (Appeal 2014-003035 – decided March 4, 2016), the Appellant appealed the final rejection of a number of claims under 35 U.S.C. § 103(a). The patent application at issue was directed to methods and apparatus for determining probability distribution functions and/or cumulative probability distributions. Claim 1 of the patent application is reproduced below:

     1.  A method comprising:
     receiving a plurality of values of an input variable at an input to a processor, wherein the input variable is representative of a physical characteristic of a component or system; and
     using the processor to implement a physics model to produce an estimate of an output for each of the input values;
     wherein the processor
          maps the output estimates to the input values by fitting the estimates to a plurality of curves;
          selects values from corresponding points on the curves to produce an output probability density or cumulative distribution function for the physical characteristic at a future time; and
          outputs the probability density or cumulative distribution function.

The technology could be utilized to predict the occurrence of defects such as cracks in components of an aircraft and the estimated crack lengths could be used to determine the probability that a crack length would exceed a predetermined threshold at some future time.

PTAB affirmed-in-part the final rejection under 35 U.S.C. § 103(a). However, as mentioned above, PTAB also introduced a new rejection under 35 U.S.C. § 101. After reciting the current state of the law (e.g., Alice, Mayo, etc.), PTAB applied the Mayo framework to the claims at issue.

The interesting part of this decision is that PTAB utilized the Appellant’s arguments during prosecution as evidence that the claims at issue were directed to a patent-ineligible concept (Mayo step 1). More specifically, PTAB held that the claims were directed to “a mathematical algorithm in the form of a probability distribution mapping function” and pointed to portions of the Applicant’s specification. Additionally, PTAB stated:

Our conclusion ...is reinforced is reinforced by Appellants’ arguments directed to the Examiner’s rejection of claims 1 and 11 under 35 U.S.C. § 103. Appellants’ arguments are focused solely on the probability density or cumulative distribution function (mathematical algorithm) encompassed by claims 1 and 11. For example, Appellants argue “Barajas et al. does not disclose or suggest that a probability density or cumulative distribution function for a physical characteristic at a future time can be produced by selecting values from corresponding points on a plurality of curves.”

PTAB went on to hold that there was no “inventive concept” under Mayo step 2. For instance, PTAB indicated that the processor was generic and purely conventional and that the inputs “encompass purely theoretical (made-up) input values to produce theoretical predictions of a theoretical component or system.”

As such, Applicants/Appellants should be mindful that arguments made during prosecution to differentiate claim language from the prior art may be utilized as evidence to support a rejection under 35 U.S.C. § 101.

Snapshot of 101 Patent Eligible Subject Matter Decisions in May 2014

Posted by: Adam Ellsworth

As the PTAB recently admitted, "the case law regarding 101 continues to evolve" (Ex parte Fickle, Appeal No. 2011-007587).

I thought it might be helpful to look at cases decided by the PTAB in the last month to see if there are any patterns in how the Board is deciding issues of patent-eligible subject matter under 35 U.S.C. 101. It turns out that the case law regarding computer-readable media has pretty-well settled at the PTAB, but it is harder to define clear patterns in decisions regarding the patent-eligibility of other types of methods and systems.

The Rejection of Computer-Readable Media

I considered 32 cases that addressed issues of patent-eligible subject matter under 35 U.S.C. 101. The majority of these cases (22 cases) involved computer-readable media. The takeaway from all of these cases is that in light of Ex parte Mewherter, 107 USPQ2d 1857 (PTAB 2013 (precedential), do not expect to prevail at the PTAB by arguing that a "computer-readable medium," or even a "computer-readable storage medium," does not include transitory signals. The decisions were unanimous.  If a claim directed to a computer-readable medium omits the words "non-transitory" and lacks other structural limitations, then the computer-readable medium encompasses transitory signals and the claim is not patent-eligible.

Among the cases directed to computer-readable media, Ex parte Makkinejad (Appeal 2011-012801; Decided May 15, 2014) is interesting, because it was not directed to just a computer-readable medium, but rather to a computer-readable storage medium. The result, however, was the same.
Claim 19 of the application is directed to a "computer readable storage medium" and the claim was rejected by the Examiner under 35 U.S.C. 101 as being directed to patent-ineligible subject matter, since, the Examiner argued, the claim encompassed transitory signals. The Appellant argued that "the term 'storage media' would not include any embodiments in which the medium is merely a propagation medium, as opposed to a medium that actually stores data." The Board disagreed and cited as an example, "circulating memory," which uses a delay line to store information in the form of a pattern of pulses. (I'm not convinced by the Board's example, since circulating memory is in itself a physical structure, and the "pattern of pulses" cannot exist without the delay line, sensors, and amplifiers described by the Board. But the Board sustained the rejection of claim 19 under 35 U.S.C. 101.) 

The Rejections of Other Types of Claims (Not Computer-Readable-Media)

Among the non-computer-readable medium cases, two were cases involving biological processes, Ex parte Schatteman (Appeal No. 2011-013696) and Ex parte Cardwell (Appeal No. 2012-001657). In both of these cases, the Board reversed rejections under 35 U.S.C. 101. Among the remaining eight cases, the Board reversed 101 rejections in three cases and upheld 101 rejections in five cases.

101 Rejections Reversed

In the cases in which 101 rejections were reversed, the claims recited physical structures.

Processor and Memory: In Ex parte Cutlip, Appeal No. 2011-011658, rejected claim 7 recited a system comprising a processor and memory configured to provide instructions to the processor, and multiple "modules" to perform various functions. The modules are not explicitly tied to the processor and memory in the claim (such as by having the processor execute instructions of the module), but the specification described functions being performed by the processor. The Board reversed the Examiner's rejection of claim 7, stating that the Examiner had not established a prima facie case of non-statutory subject matter.

Data storage device: In Ex parte Bogues, Appeal No. 2011-013523, the Board held that a claim directed to a "data storage device" excludes transitory signals.

LAN and WAN: And in Ex parte Waites, Appeal No. 2012-000932, the Board held that claim elements "local-area network" and "wide-area network" include computers and associated devices, and therefore the claim did not encompass software per se.

101 Rejections Sustained

Computer program products: In the cases in which 101 rejections were sustained, one of the cases (Ex parte Arrasvuori, Appeal No. 2012-002671) included claims directed to computer program products, and the Board held that the claims could encompass software-only embodiments, and therefore were directed to patent-ineligible subject matter.

Hardware System: In one case, Ex parte Adam (Appeal No. 2012-002144), the claims recited a method in which requests are received, and messages published "by a publish/subscribe hardware system." However, the Board held that this recitation was insufficient to render the claims patent-eligible, stating that the "publish/subscribe hardware system" was merely a "nominal recitation of a computer."

Conclusion

While decisions directed to computer-readable media are consistent in stating that such media encompass transitory signals, other 101 decisions appear to vary on a case-by-case basis. Claims reciting physical structures that perform the steps of the claims are more likely to overcome 101 rejections at the PTAB, but a claim reciting a generic physical structure, such as a "hardware system," may not be patent-eligible.

PTAB reverses 103: statement that combining pieces is predictable doesn't explain why a POSITA would combine

Takeaway: The Applicant appealed an obviousness rejection of claims to a currency trading user interface, including the feature "determine a currency in which to quote skew for each of the risk reversals." The Examiner relied on a combination of two references. The Board found the Examiner's rationale for combining was deficient. "Apparently, the Examiner finds that using market trend indicators, such as skew, is predictable with currency swap market transactions, including risk reversals. This is hard to quarrel with as such, but does not find why one of ordinary skill would determine a currency in which to quote skew for each of the risk reversals." (Ex parte Breitenbach, PTAB 2015.)

Details:

Ex parte Breitenbach
Appeal No. 2013-005344; Appl. No. 12/197734; Tech. Center 3600
Decided:  Jan. 15, 2016
 
The application on appeal was directed to a user interface that displays currency trading information. The Examiner rejected as obvious using a combination of Rodgers ("Trading Options") and Thompson ("Displaying Trading Trends"). An independent claim on appeal read:

1.  A system comprising [a computing device operable to:]
[allegedly in Rodgers] retrieve market data for a plurality of risk reversals for a currency pair at a first time ...
[allegedly in Thompson] determine a currency in which to quote skew for each of the risk reversals;
[cause] an interface screen to be displayed [on another] computing devices
     a listing comprising the first and second risk reversals, the market data, and an indication of the determined skew for each of the risk reversals;
...

Thus, according to the rejection, the Examiner relied on Rodgers for the entirety of one limitation (retrieval of risk reversal data), and Thompson for the entirety of another (currency determination). The Examiner gave this explanation of the reason to combine: "obvious to use skew as a market indicator in the Rodgers system, in view of Thompson's teaching that skew is a market trend indicator that the investor can consult to make better trade decisions."

On appeal, the Applicant argued that Thompson merely mentioned skew as a market trend indicator, did not include the phrase "risk reversal" anywhere, and did not mention currency in the paragraphs relied on by the Examiner. Thus, Thompson did not disclose or suggest "determine a currency in which to quote skew for each of the risk reversals," as specifically asserted by the Examiner.

In the Answer, the Examiner first clarified his position on Thompson with respect to currency. The Examiner noted that Thompson contains many instances of both "currency" and "currency pairs," then explained that "a prior art reference must be considered in its entirety, i.e., as a whole," citing W.L. Gore & Assocs v. Garlock, 721 F.2d 1540, 220 (Fed. Cir. 1983). Moreover, Thompson's Summary explicitly describes the invention as related to currency pairs. Therefore "the details of the invention recited in Thompson relate to currency pairs." (Emphasis added.) With respect to risk reversals, the Examiner cited to several mentions in Rodgers – despite the reliance in the Final Office Action on Thompson for the entire "determine ... for each of the risk reversals" limitation.

The Board first made some Findings of Fact:

Rodgers describes displaying prices for currency pair risk reversals. Thompson is directed to providing a visual display of a two-line cross-over method signaling buying and selling opportunities of foreign currency pairs  in the foreign exchange.   

The Board then reversed the rejection under § 103, with this explanation:

Each of these paragraphs [in Thompson relied on by the Examiner] lists a variety of market trend indicators, among which is included skew [but do not] describe how a skew is used nor describes determining a currency in which to quote skew for risk reversals. Rodgers describes risk reversals, but does not discuss using skew at all. Apparently, the Examiner finds that using market trend indicators, such as skew, is predictable with currency swap market transactions, including risk reversals. This is hard to quarrel with as such, but does not find why one of ordinary skill would determine a currency in which to quote skew for each of the risk reversals.
(Emphasis added.) 

My two cents: Great save by the Board. I characterize this as a "save" because the real issue wasn't deficiency in the individual teachings of the reference, but the deficiency in the combination. The parties focused on the former, while the Board zeroed in on the latter. 

The Applicant focused exclusively on Thompson's failure to teach risk reversal in the context of a currency determination, as claimed. Understandable, because the rejection appeared to specifically rely on that feature being taught in Thompson.  There was one sentence in the Answer that hinted that the Examiner had instead combined the risk reversal in Rodgers with Thompson's teachings about currency and skew. But that hint was buried in the point-counterpoint structure of the Answer, and the Applicant didn't pick up on this in the Reply Brief. 

Reading in between the lines, I think the Examiner really did rely on the combination to arrive at "determine a currency in which to quote skew for each of the risk reversals." Seems like the display of risk reversal for currency pairs from Rodgers' FIG. 1 was added to Thompson's mentions of and skew as a market indicator – to arrive at "determine a currency in which to quote skew for each of the risk reversals."

But suppose we generously give the Examiner credit for what he might have been thinking (as opposed to what he actually put in the record). As the Board found, even that wasn't enough to make the combination obvious. 

The Board's analysis focused on the lack of connection between the teachings in the two references. Each reference had various pieces of the claim, but these teachings weren't related enough for a POSITA to combine them as claimed. 

Many Applicants dealing with disparate teachings from multiple references either argue non-analogous art or just simply quote the teachings and say "Hey, look, these are different things." I found the Board's explanation for non-obviousness to be persuasive, because instead of simply listing differences, they put these differences in context: Yes, reference X taught A and B, but not in the context of C. Yes, reference Y taught C, but not in the context of A and B. Simply knowing about the pieces isn't enough of a reason to combine because the contexts are different and/or have little overlap.

The Board used the magic word "predictable" in its analysis, which to me is a clear reference to KSR's "predictable results" rationale. What are we to make of the Board's reversal of obviousness despite the apparent concession that "using market trend indicators, such as skew, is predictable with currency swap market transactions, including risk reversals."

Is the Board saying that generally combining the pieces at a high level is predictable, but the claimed combination is more specific than that and so a high level predictable result isn't enough?

Thanks to Robert K S for calling my attention to the Breitenbach decision.