Improvement arguments and recitation of "time cell" win IBM reversal of Alice rejections at PTAB

Takeaway: The Patent Board reversed § 101 Alice rejections of commercial transaction processing claims when the claims relied on a "time cell" and thus presented an improvement of the "relevant technology."

Details:

Ex parte Berstis
Appeal No. 2016-007050; Application No. 12/366,951; Tech. Center 3600
Decided: Mar. 12, 2018

The application is a continuation-in-part with priority to a line of applications related to a "time cell," basically a charge storage element with a known electrostatic discharge profile by which an amount of time elapsed since the initial charge can be determined, and the use of said time cell in what essentially amount to self-expiring coupons.  A representative claim on appeal read:

16.   A method for processing a commercial transaction using data processing devices, the method comprising:
        determining a state of a time cell that is associated with a commercial transaction that has been at least partially performed on a first data processing device at a time prior to a current time;
        generating, at a second data processing device, a first time value that represents when the time cell was programmed at the time prior to the current time, based on the determined state of the time cell; and
        processing information about the commercial transaction using the first time value to represent when the commercial transaction occurred at the time prior to the current time,
wherein:
        the time cell is an electrical device having an insulating medium and an electrostatic charge storage element that is programmed by giving the electrostatic charge storage element a desired electrical potential,
        the time cell discharges electrostatic charge from the electrostatic charge storage element through the insulating medium at a predetermined rate of discharge, and
        determining the state of the time cell comprises detecting a current electrostatic charge stored in the electrostatic charge storage element.

(Emphasis added.)

The examiner rejected the claims as

directed to the abstract idea of processing information about a commercial transaction based on the timing of the commercial transaction.  Analyzing a commercial transaction is a certain method of organization human activity related to commercial activity, an example of an abstract idea referenced in Alice Corp.

Under the second step of the Alice framework, the examiner still found the claims to be subject matter ineligible:

The additional element(s) or combination of elements in the claim(s) other than the abstract idea per se amount(s) to no more than a mere instruction to apply the abstract idea to a time cell that uses electrostatic physics.  Viewed as a whole, these additional claim element(s) do not provide meaningful limitation(s) to transform the abstract idea into a patent eligible application of the abstract idea such that the claim(s) amounts to significantly more than the abstract idea itself.

In the appeal brief, the appellants complained that the examiner had overgeneralized the subject matter, and submitted that the claims were

directed to mechanisms . . . for processing information about a commercial transaction that was at least partially performed on a first data processing device at a prior time based on a time value, generated at a second data processing device, that represents when an electrical device (time cell) was programmed at the prior time of the commercial transaction, based on a determined state of the time cell, where the state of the time cell is determined by detecting a current electrostatic charge stored in an electrostatic charge storage element of the time cell, and where the time cell has the physical configuration set forth in the claims. . . . [T]he claims are not directed to only [the identified] abstract idea and are not attempting to preempt every possible way of processing information about a commercial transaction based on the timing of the commercial transaction.  To the contrary, the very recitation of the operation of processing information about a commercial transaction, at least partially performed on a first data processing device, is tied to the generation of the first time value, at a second data processing device, which is generated based on the determined state of the electrical device (time cell) which is determined at least by detecting a current electrostatic charge stored in the electrostatic charge storage element.  Thus, the claims are clearly directed to a specific application and implementation of the concept of processing information about a commercial transaction with regard to a specific type of electrical device, referred to as a time cell, and specifically directed to mechanisms that detect the electrostatic state of the time cell as a mechanism for processing the commercial transaction.

The appellants further argued that the claims involved "a synergistic interplay between tangible, material elements", that the claims had not been properly examined as a whole, and that they did not relate to fundamental economic practices, methods of organizing human activities, abstract ideas of themselves, or mathematical relationships/formulas.

If the method claim recites operations that can only be performed within technology, then the method claim does not recite an abstract idea. That is, "inventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act" (see Research Corp. Techs., Inc. v. Microsoft Corp., 627 F.3d 869 (Fed. Cir. 2010)).  In other words, if the claims recite specific applications or improvements to technologies, as in the present case, then the abstract concepts are not being preempted or "tied up" but rather, the claims are directed to a specific application of the abstract concepts which is statutory.

(Emphasis added.)  Reviewing the specific time cell-related claim features, the claims were

clearly directed to an improvement to technology and [are] clearly not attempting to "tie up" or preempt the alleged abstract idea of "processing information about a commercial transaction based on the timing of the commercial transaction" but rather a specific mechanism for processing information about a commercial transaction that involves the programming of a time cell at the time the commercial transaction was at least partially performed, and detecting the state of the time cell at a second data processing device to thereby process information about the commercial transaction.

(Emphasis altered.)

The examiner answered that the claims' "limitations that describe the electrostatic physics behind the use of a time cell . . . merely link the use of an abstract idea to a particular technological environment: the field of time cells" and that "the aforementioned limitations do not improve the technical field of time cells."  In the examiner's view, the claims also failed to improve a technical field, because "[d]ispensing an article of manufacture by a first data processing device is akin to dispensing a coupon through a vending machine".  Finally, the examiner cited the old and discredited case of Ex parte Pfeiffer, 135 USPQ 31 (B.P.A.I. 1961), for the proposition that structural limitations (in this case, the structure of the time cell) carry no patentable weight in method claims.

In their reply brief, the appellants cited USPTO guidance issued in the wake of Enfish decision and argued that the claims were directed not to an abstract idea but to

an improvement to computer based processing of commercial transactions which is rooted in computer technology and directed to solving a problem in the computer arts by providing a new and non-obvious (as indicated by the fact that there is no prior art rejection against the present claims) mechanism that operates in conjunction with a time cell.  Moreover, the present specification clearly sets forth numerous improvements made by the claimed invention with regard to processing commercial transactions using mechanisms that operate on and with time cells.

(Emphasis added.)

The Board found that "using a non-volatile memory cell . . . which does not require a battery to measure time is an inventive concept that provides a specific means or method that improves the relevant technology" and that the recited time cell was a particular machine, "not a generic machine, because, unlike a generic computer, which can perform many different functions when programmed, the recited 'time cell' can only be used for a single, dedicated purpose (measuring a predetermined passage of time as a function of the decay over time of an electrical charge)."  Moreover, the provided time measurement could not be done as a mental step.  The Board thus found the time cell features to lend the claims "significantly more" than the identified abstract idea and reversed the § 101 rejections.

My two cents:

This post is the sixth in a series about improvement arguments beating Alice rejections at the Patent Board.  "Coupon" would seem to be patent profanity if one wants to avoid an Alice rejection.  See, e.g., Ex parte MacNeille, No. 2016-004411 (P.T.A.B. Mar. 28, 2018).  Here, although the claims do not use the word "coupon," the examiner likened the claims to coupon-related technologies, leading the applicants to protest that the USPTO had issued coupon-related patents in the past and thus presumably found them to be statutory ("see U.S. Patent Nos. 5,039,848; 6,648,761; 9,361,606, etc.").  "But it worked in the past" is not an argument that carries much weight at the Board given the directive to consider each case on its own merits.  See, e.g., Ex parte Heinrich, No. 2016-002486 (P.T.A.B. Feb. 27, 2018), citing In re Gyurik, 596 F.2d 1012, 1016 n.15 (C.C.P.A. 1979).  It seems instead that the Board engaged in a much more variegated analysis, looking at the machine-or-transformation test and crediting or modifying the Enfish-based improvement arguments made by the appellant.

Although the application and its parents take great pains not to say so, the "time cell" of the invention sounds like it reads on a leaky capacitor, which is to say, any practical capacitor, of known discharge profile, that can be periodically sampled to determine remaining charge.  If so, it is not something new; see, e.g., U.S. patent No. 5,760,644, "Integrated circuit timer function using natural decay of charge stored in a dielectric" (priority date 1995, approximately a decade before the priority dates involved in this application).  If a time cell is old, one can understand why an examiner would take the position that it could not offer "significantly" more under the second step of the Alice framework, but even so, the Board found such novelty or lack thereof irrelevant in the § 101 consideration:

[E]ven if time measurement devices are notoriously well known in the art, this has no bearing upon our analysis under § 101.  The Supreme Court guides: "[t]he '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." Diamond v. Diehr, 450 U.S. 175, 188–89 (1981) (emphasis added).  Our reviewing court further emphasizes: "[e]ligibility and novelty are separate inquiries." Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC, 874 F.3d 1329, 1340 (Fed. Cir. 2017) (emphasis added).

Citing a Board decision that briefly appeared in an old revision of the MPEP (see § 2117), the examiner argued that structural elements carry no patentable weight in method claims, but if the Board declined even to address that argument, it may have been because they discarded it many times in the past.  See, e.g., Ex parte Sigler, No. 2016-001256 (P.T.A.B. Sep. 19, 2017); Ex parte Paul, No. 2011-006827 (P.T.A.B. Mar. 7, 2013); Ex parte Lind, No. 2010-005289 (B.P.A.I. Aug. 29, 2012); Ex parte Tuma, No. 2006-002308 (B.P.A.I. Sep. 26, 2006); Ex parte Holderness, No. 1998-000553 (B.P.A.I. Mar. 13, 2001); Ex parte Zeigler, No. 1996-002718 (B.P.A.I. May 18, 2000); Ex parte Kirkland, No. 1997-000172 (B.P.A.I. Aug. 25, 1998).  However, the Board did drop a footnote instructing the examiner to consider whether the claims were indefinite under § 112 and MPEP § 2173.05(p)(II) as hybrid claims reciting an apparatus and method steps.  I don't think mere recital of structure renders a method claim a hybrid claim, since, at bottom, the issue is whether the claim language creates confusion is as to when direct infringement occurs, and that would not seem to be the case here or in most method claims that describe what structural materials and tools are involved in the performance of the method.

The Board did not specify in their decision what "relevant technology" the claimed invention improves, but presumably the relevant technology is that of electronic couponing, or commercial transactions more generally.  As noted in a previous post with practice tips for defeating Alice rejections, it can be important in making improvement arguments to state what the previous state of the technology field and how the claims at issue offer both a clear difference and a significant improvement over the state of the art.  Defining the previous state of the technology field may not have been particularly important in this case because the cited prior art, and the claims' overcoming rejections in view of that art, inferentially defined the previous state of the technology field.