Patent Board extends software per se, printed matter doctrines to reject computer-readable media (CRM) claims

Takeaway: Bucking decades of settled precedent and USPTO guidance, the Patent Board rejected claims reciting computer-readable media (CRM) as subject-matter ineligible software per se and printed matter, even as it reversed Alice rejections of the same claims.

Note: This is the second of two posts covering the same PTAB decision.  For the other, see "IBM wins reversal of Alice rejections for targeted ad delivery at airports".

Details:

Ex parte Musial
Appeal No. 2017-001164; Application No. 13/396,177; Tech. Center 3600
Decided: Apr. 30, 2018

Inventors for IBM filed an application relating to "a computer implemented method, data processing
system, and computer program product for . . . distributing advertisements to receptive audiences", and more specifically captive audiences sitting in airport terminals waiting to board their flights, or aboard airplanes waiting to take off or deboard.  The Board reproduced rejected independent claim 14 as representative:

14.     A computer program product for selecting an advertisement, the computer program product comprising:
         a computer readable non-transitory medium having computer readable program code stored thereon, the computer readable program code comprising:
                  program instructions to receive a first check-in corresponding to at least one person, wherein the first check-in is a indication of presence relative to an airport gate servicing a flight and the first check-in is received from a kiosk;
                  program instructions to receive a second check-in to form an aggregation of people, wherein the second check-in is a indication of presence relative to the airport gate servicing the flight;
                  program instructions to characterize the aggregation based on cumulative characteristics selected of at least one vital statistic of each person checking-in to form an aggregated population characteristic;
                  program instructions to receive flight details concerning the flight, wherein the flight details comprise a flight destination, and the advertisement concerns a service provider at the flight destination;
                  program instructions to select at least one advertisement based on the aggregated population characteristic and the flight details, in response to the second check-in;
                  program instructions to receive a check-out of at least one person, wherein the check-out comprises reading an identifier of an at least one person who departs;
                  program instructions to select at least one advertisement based on the aggregated population characteristic;
                  program instructions to second characterize the aggregation based on the cumulative characteristics to form a second cumulative characteristic based on the aggregation without at least one vital statistic corresponding to the at least one person who departs, wherein the program instructions to select at least one advertisement based on the aggregated population characteristic perform to select the at least one advertisement is based on the second cumulative characteristic;
                  program instructions to select at least one advertisement based on the second cumulative characteristic, and a destination of the flight details, wherein the destination is stated within the at least one advertisement;
                  program instructions to dispatch the at least one advertisement; and
                  program instructions to detect presence of a service vehicle associated with a flight near and outside an aircraft associated with the flight, wherein the detecting presence relies on at least one global positioning satellite (GPS) signal received at the service vehicle and reported as location data to the hardware processor, wherein program instructions to dispatch comprises instructions to dispatch the at least one advertisement to the service vehicle for rendering and such dispatching is responsive to detecting presence of the service vehicle.

(Emphasis added.)  The examiner rejected the claims as subject-matter ineligible under the Alice framework and its judicially-made exceptions to 35 U.S.C. § 101, but the Board reversed those rejections, and entered new grounds of rejection, finding the claims to be subject-matter ineligible as "directed to software per se and, thus, are not within one of the four classes of statutory subject matter", and also as "a mere arrangement of 'printed matter' and merely claiming the content of 'printed' information."

My two cents:

There are a couple of ways to read this surprising decision, but either interpretation leads to the conclusion of egregious Board error.  In the first and more generous interpretation of what happened in Musial's new grounds, the Board got distracted by the description in the specification and overlooked the limitations of the claims.  This would explain why the Board devotes ink to two long footnotes (notes 4 and 5) quoting portions of the specification allegedly supportive of a software per se interpretation, including, among other selections, language providing that "one or more embodiments may take the form of . . . an entirely software embodiment."  Although specification language may be used to construe or define claim terms, it would be an obvious misapplication of the law if the Board looked to the specification to override and effectively delete limiting language in the claims, in this case, the language specifying that the computer program product comprised a computer readable non-transitory medium having computer readable program code stored thereon.  Recitation of computer-readable media (specified as non-transitory in compliance with the prohibition of claiming transitory signals per se, as discussed in In re Nuijten, 500 F.3d 1346, 1356-57 (Fed. Cir. 2007)) suffices to avoid a software per se rejection, as discussed below.  The applicants' casting of the claims in CRM form must be seen as an express disclaimer of any broader scope inclusive of software per se, even if such may be described in the specification.

The theory that the Board simply got distracted by spec language is also difficult to reconcile with the Board's express finding that "the 'computer readable non-transitory medium' as claimed . . . also does not exclude it being software [per se]."  Except that it does; see, e.g., MPEP § 2111.05(III); Ex parte Kouznetsov, No. 2007-003470 (B.P.A.I. June 30, 2008) (“When functional descriptive material is recorded on some computer-readable medium, it becomes structurally and functionally interrelated to the medium and will be statutory in most cases since use of technology permits the function of the descriptive material to be realized.”).  The Board makes this conclusory declaration without any reasoning or citation to established law.  Indeed, the Board's decision goes against established law, the MPEP, and published USPTO guidance.  Thus, the second reading of the Board's decision is that it was made in ignorance.

The Board's new grounds of rejection cannot be reconciled with the ultimate outcome of the trilogy of mid-'90s Federal Circuit cases of In re Warmerdam, 33 F.3d 1354 (Fed. Cir. 1994), In re Lowry, 32 F.3d 1579 (Fed. Cir. 1994), and In re Beauregard, 53 F.3d 1583 (Fed. Cir. 1995), of which discussion can be found in the journal article by Vincent Chiappetta, Patentability of Computer Software Instruction as an 'Article of Manufacture": Software as Such as The Right Stuff, 17 J. Marshall J. Computer & Info. L. 89 (1998).  These cases culminated in the February 1996 USPTO Examination Guidelines for Computer-Related Inventions.  These guidelines state, with regard to functional descriptive material:

   [C]omputer programs claimed as computer listings per se, i.e., the descriptions or expressions of the programs, are not physical "things," nor are they statutory processes, as they are not "acts" being performed.  Such claimed computer programs do not define any structural and functional interrelationships between the computer program and other claimed aspects of the invention which permit the computer program's functionality to be realized.  In contrast, a claimed computer-readable medium encoded with a computer program defines structural and functional interrelationships between the computer program and the medium which permit the computer program's functionality to be realized, and is thus statutory.  Accordingly, it is important to distinguish claims that define descriptive material per se from claims that define statutory inventions.
   Computer programs are often recited as part of a claim.  Office personnel should determine whether the computer program is being claimed as part of an otherwise statutory manufacture or machine.  In such a case, the claim remains statutory irrespective of the fact that a computer program is included in the claim.  The same result occurs when a computer program is used in a computerized process where the computer executes the instructions set forth in the computer program.  Only when the claimed invention taken as a whole is directed to a mere program listing, i.e., to only its description or expression, is it descriptive material per se and hence non-statutory.

(Emphases added.)  These guidelines were published after Beauregard, wherein the USPTO finally ceded the issue and recognized that claims reciting software embodied on a tangible medium constituted patent-eligible subject matter.  The '90s trilogy led to the evolution of the distinction between functional and non-functional descriptive material; even as late as Beauregard, software, despite being functional, was being rejected under the printed matter doctrine.  As the Federal Circuit found earlier in Lowry, "the printed matter cases have no factual relevance where 'the invention as defined by the claims  requires that the information be processed not by the mind but by a machine, the computer.'"  32 F.3d at 1583 (citing In re Bernhart, 417 F.2d 1395, 1399 (C.C.P.A. 1969), having an identical holding) (emphasis in original).  Lowry's claim 1 read as follows:

1.      A memory for storing data for access by an application program being executed on a data processing system, comprising:
         a data structure stored in said memory, said data structure including information resident in a database used by said application program and including:
                  a plurality of attribute data objects stored in said memory, each of said  attribute data objects containing different information from said database;
                  a single holder attribute data object for each of said attribute data objects, each of said holder attribute data objects being one of said plurality of attribute data objects, a being-held relationship existing between each attribute data object and its holder attribute data object, and each of said attribute data objects having a being-held relationship with only a single other attribute data object, thereby establishing a hierarchy of said plurality of attribute data objects;
                  a referent attribute data object for at least one of said attribute data objects, said referent attribute data object being nonhierarchically related to a holder attribute data object for the same at least one of said attribute data objects and also being one of said plurality of attribute data objects, attribute data objects for which there exist only holder attribute data objects being called element data objects, and attribute data objects for which there also exist referent attribute data objects being called relation data objects; and
                  an apex data object stored in said memory and having no being-held relationship with any of said attribute data objects, however, at least one of said attribute data objects having a being-held relationship with said apex data object.

(Emphasis added.)  With regard to this broadest claim, the Federal Circuit concluded:

More than mere abstractions, the [claimed] data structures are specific electrical or magnetic structural elements in memory. . . . [They] provide tangible benefits: data stored in accordance with the claimed data structures are more easily accessed, stored and erased. . . . [They] are physical entities that provide increased efficiency in computer operation.  They are not printed matter.  The Board is not at liberty to ignore such limitations.

Id. at 1583-84.  In other words, Lowry's claims related to the physical organization imparted to the data in the memory, and not data in the abstract.  Id. at 1583.

In Beauregard, the solicitor didn't even bother to defend the Board's affirmance of the examiner's rejection of computer program product claims as printed matter.  The solicitor averred before the Federal Circuit "that computer programs embodied in a tangible medium, such as floppy diskettes, are patentable subject matter under 35 U.S.C. § 101".  The CAFC appeal was withdrawn without a fight, and the February 1996 Guidelines were issued a few months later.  The USPTO position as to functional descriptive material was repeated in the November 2005 Interim Guidelines for Examination of Patent Applications for Patent Subject Matter Eligibility ("When functional descriptive material is recorded on some computer-readable medium it becomes structurally and functionally interrelated to the medium and will be statutory in most cases since use of technology permits the function of the descriptive material to be realized.").  CRM claims came to be known as "Beauregard claims".  Although § 101 law as a whole has evolved considerably since the time of the February 1996 and November 2005 Guidelines, particularly with the Supreme Court's judicial-exception decisions in Bilski, Mayo, and Alice, that evolution is not pertinent in the present consideration rejecting Beauregard claims as software per se, since the Board found the claims not to be ineligible under the framework that evolved from the abstract-idea cases.

It's also notable that the Board made the software per se new grounds of rejection despite the claims being amended, immediately prior to appeal, specifically to recite the "computer readable non-transitory medium" by examiner request and with examiner assurance, in an interview, that such language constitutes the preferred phrasing.

As alluded to above, the Board's rejection of the claims under the "printed matter" doctrine (or what is modernly and more accurately termed "nonfunctional descriptive material" doctrine) is as flawed as the rejection of the claims as software per se.  As explained in the "informative" Board decision of Ex parte Mathias, No. 2005-1851, 84 USPQ2d 1276, 1278-79 (B.P.A.I. Aug. 10, 2005),

[c]ommon situations involving nonfunctional descriptive material are:
- a computer-readable storage medium that differs from the prior art solely with respect to nonfunctional descriptive material, such as music or a literary work, encoded on the medium,
- a computer that differs from the prior art solely with respect to nonfunctional descriptive material that cannot alter how the machine functions (i.e., the descriptive material does not reconfigure the computer), or
- a process that differs from the prior art only with respect to nonfunctional descriptive material that cannot alter how the process steps are to be performed to achieve the utility of the invention

None of these scenarios are applicable here in Musial.  The Board in the present case cites to In re DiStefano, 808 F.3d 845 (Fed. Cir. 2015), in support of its finding that the claimed CRM computer program product constitutes printed matter, but DiStefano does not support the Board's conclusion; on the contrary, the CAFC in DiStefano vacated a Board finding that web assets amounted to printed matter.  "The common thread amongst all" printed matter cases, the reviewing court explained, "is that printed matter must be matter claimed for what it communicates", and the content of the information was not being claimed in DiStefano.  In re Miller, 418 F.2d 1392 (C.C.P.A. 1969), also cited by the Board in the present case, likewise was a court reversal of a Board decision of unpatentability, and fails to support the Board's contention that the CRM claims are printed matter.

It is, of course, not correct to say that the nonfunctional descriptive material doctrine never applies to software claims.  When the doctrine is properly applied, an isolated feature at the point of novelty is shown to be descriptive rather than functional.  Mathias presents the classic case, wherein, in a claim directed to an "on-screen icon", the recited sporting event icon was "non-functional descriptive material [that] cannot lend patentability to an invention that would have otherwise been anticipated by the prior art."  As a sampling of representative cases, one can point to, e.g., Ex parte Curry, No. 2005-0509, 84 USPQ2d 1272 (B.P.A.I. June 30, 2005); Ex parte Nehls, No. 2007-1823, 88 USPQ2d 1883, 1887-89 (B.P.A.I. Jan. 28, 2008) (precedential); Ex parte Kerr, No. 2009-013183 (P.T.A.B. Dec. 26, 2012); Ex parte Okamoto, No. 2012-000836 (P.T.A.B. Jan. 23, 2013); Ex parte Gooch, No. 2010-008687 (P.T.A.B. July 26, 2013); Ex parte Sen, No. 2011-006544 (P.T.A.B. Dec. 23, 2013); Ex parte Sharma, No. 2010-011909 (PT.A.B. June 7, 2013).  However, the Board in Musial fails to explain how any of these cases are relevant or how the point-of-novelty feature (if any single one can be pointed to) amounts to matter that is purely nonfunctional and descriptive.  Consequently, the rejection of the claims as printed matter is misplaced.

Generally, when the Board suspects a new reason for unpatentability but would prefer not to do the heavy lifting of demonstrating it with reasoned explanation in its opinion, the Board notes the potential new grounds, as in a footnote, by way of suggestion to the examiner to inquire into such grounds upon return of the application to the examiner's jurisdiction.  The Board did not do that in this case, and instead made rejections inconsistent with the law in this area.  The panel overlooked the significance of the physical media recitation or misapprehended the meaning of "software per se".

IBM wins reversal of Alice rejections for targeted ad delivery at airports

Takeaway: Finding, under step two of the Alice analysis, the rejected claims to recite an advancement to the technology for delivering targeted advertising, the Patent Board reversed § 101 rejections of claims directed to delivery of targeting advertising in airports.

Note: This is the first of two posts covering the same PTAB decision.  For the other, see "Patent Board extends software per se, printed matter doctrines to reject computer-readable media (CRM) claims".

Details:

Ex parte Musial
Appeal No. 2017-001164; Application No. 13/396,177; Tech. Center 3600
Decided: Apr. 30, 2018

Inventors for IBM filed an application relating to "a computer implemented method, data processing
system, and computer program product for . . . distributing advertisements to receptive audiences", and more specifically captive audiences sitting in airport terminals waiting to board their flights, or aboard airplanes waiting to take off or deboard.  The Board reproduced rejected independent claim 14 as representative:

14.     A computer program product for selecting an advertisement, the computer program product comprising:
         a computer readable non-transitory medium having computer readable program code stored thereon, the computer readable program code comprising:
                  program instructions to receive a first check-in corresponding to at least one person, wherein the first check-in is a indication of presence relative to an airport gate servicing a flight and the first check-in is received from a kiosk;
                  program instructions to receive a second check-in to form an aggregation of people, wherein the second check-in is a indication of presence relative to the airport gate servicing the flight;
                  program instructions to characterize the aggregation based on cumulative characteristics selected of at least one vital statistic of each person checking-in to form an aggregated population characteristic;
                  program instructions to receive flight details concerning the flight, wherein the flight details comprise a flight destination, and the advertisement concerns a service provider at the flight destination;
                  program instructions to select at least one advertisement based on the aggregated population characteristic and the flight details, in response to the second check-in;
                  program instructions to receive a check-out of at least one person, wherein the check-out comprises reading an identifier of an at least one person who departs;
                  program instructions to select at least one advertisement based on the aggregated population characteristic;
                  program instructions to second characterize the aggregation based on the cumulative characteristics to form a second cumulative characteristic based on the aggregation without at least one vital statistic corresponding to the at least one person who departs, wherein the program instructions to select at least one advertisement based on the aggregated population characteristic perform to select the at least one advertisement is based on the second cumulative characteristic;
                  program instructions to select at least one advertisement based on the second cumulative characteristic, and a destination of the flight details, wherein the destination is stated within the at least one advertisement;
                  program instructions to dispatch the at least one advertisement; and
                  program instructions to detect presence of a service vehicle associated with a flight near and outside an aircraft associated with the flight, wherein the detecting presence relies on at least one global positioning satellite (GPS) signal received at the service vehicle and reported as location data to the hardware processor, wherein program instructions to dispatch comprises instructions to dispatch the at least one advertisement to the service vehicle for rendering and such dispatching is responsive to detecting presence of the service vehicle.

(Emphasis added.)  The Board summarized the claim as computer program products for distributing advertisements to an aggregation of people in an airport, using a service vehicle associated with a flight for which the people have checked-in, where such service vehicles can include fuel trucks, food and beverage delivery trucks, and baggage handling equipment.

The examiner rejected the claims under § 101 as being directed to ineligible subject matter, specifically, the abstract idea of "displaying advertisements based on an aggregation of people which falls into the category of . . . a method of organizing human activities, . . . [and] an idea of itself."  Under step two of the Alice analysis, the examiner found the claim to offer "no more than the recitation of generic computer structure that serves to perform generic computer functions that are well-understood, routine, and conventional activities previously known to the pertinent industry."

The applicants argued that by placing its display apparatus on a service vehicle like a fuel truck, and detecting the presence of the vehicle near an airplane to display the selected ad, the computer program product permits useful information to reach its users within the airplane, which was unique and inventive:

[A] number of heterogeneous links between disparate machines and people occur, in some cases, in an ad hoc basis, to form a network that allows communication that would be impossible or difficult otherwise.  In other words, a conventional approach would be to use extra machinery within the aircraft.  But because aircraft need to be maintained when such machinery breaks, and weight is a factor in aircraft fuel efficiency, the more complex computer program product and supporting devices are necessary.

In an advisory action, the examiner "disagree[d]" that the claims presented significantly more than an abstract idea: "[T]here appears to only be an electronic device that runs/performs/executes the abstract idea manipulation. . . . [The asserted] improvements described by Applicant are not actual improvements to the technology."  The applicants filed a pre-appeal request, relying solely on DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014), but were told to take it to the Board.

The examiner argued, on appeal, that the service vehicle amounted to a kiosk, and that "[t]he claimed kiosk and GPS are electronic devices that run/perform/execute the abstract idea manipulation.  These claimed devices perform the same functionality that they would normally perform and do not lend themselves to any type of unconventional processing."  Rejecting the idea that the claims improved any technology, the examiner found that the

claims seek to address a problem that existed and continues to exist outside of the realm of the technology associated with the additionally recited elements (targeted advertising).  The proposed solution is one that could have been implemented directly by a human performing analogous functions by hand and/or with the assistance of a general purpose computer applied to facilitate the functions at a high level of generality or with the assistance of additional elements performing well-known, conventional functions.

The appellants' reply brief complained that the examiner failed to explain

how dispatching an advertisement for rendering at a service vehicle would be conventional given that passengers/users who have checked-in/checked-out are not even on or in that service vehicle.  A fair characterization would be that to render such advertisements (or even the mere dispatching of advertisements) to such a vehicle runs counter to the notion that passenger/users should be entertained/informed within the aircraft.  Rather, such an approach, as described in the claim limitations, is odd, counter-intuitive and unconventional. . . . [An] unconventional feature is the feature of bringing destination related information to the eyes of network-stranded occupants of an aircraft—which is unheard of—given the frequent admonitions of flight crews to turn all connected devices to a disconnected state. . . . Certainly, it is unconventional to dispatch and/or render material for an audience on a vehicle that the audience does not even occupy. Accordingly, again, the Office again fails to consider the synergy of the claim combination, and incorrectly states that the ordered combination adds nothing.

Citing to the holding in Bascom Global Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d
1341, 1349-50 (Fed. Cir. 2016), that "an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces," the Board found that, contrary to the examiner's allegations, "[t]he ordered combination of Appellants' steps thus recites an advancement to the technology for delivering targeted advertising."  Reversing the examiner, the Board found:

[T]he ordered combination of steps in claims 14 and 21 is directed to a specific technological solution to a specific problem pertaining to targeted advertising, namely the problem of assessing receptiveness to various advertisements and then advertising to changing captive audiences in airport areas where network access may be limited or constrained. . . . Therefore, claims 14 and 21 include "additional features" that ensure the claims are "more than a drafting effort designed to monopolize [an abstract idea]." Alice, 134 S. Ct. at 2357.

My two cents: 

As noted in the Board's decision, targeted advertising claims have repeatedly been found to amount to unpatentable abstract ideas.  Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1369 (Fed. Cir. 2015); Affinity Labs of Tex., LLC v. Amazon.com, Inc., 838 F.3d 1266, 1271 (Fed. Cir. 2016); ); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713 (Fed. Cir. 2014); Morsa v. Facebook, Inc., 77 F. Supp. 3d 1007 (C.D. Cal. 2014), aff'd, 622 F. App'x 915 (Fed. Cir. 2015); OpenTV, Inc. v. Netflix Inc., 76 F. Supp. 3d 886, 893 (N.D. Cal. 2014).

But there's a lot going on in the claims at issue, and the examiner's analysis was little more than conclusory.  The examiner failed to contradict that the claims involved a number of interactive elements that inventively combined to produce what the applicants referred to as a "creepy" effect of seeing an evidently targeted ad on a vehicle out an airplane window.  As such, the Board was able to find that the claims amounted to "something more" than an attempt at monopolizing "displaying advertisements based on an aggregation of people", which was the abstract idea to which the examiner found the claims to be directed.  The examiner declined to consider that targeted advertising was a technology that could be improved and was, in fact, improved by the claims.

Although the examiner's analysis was deficient, it was all too typical of rejections made under Alice.  The extent of the analysis in many rejections is still limited to whether claims include non-computing elements "[o]nce the abstract idea is removed", as went the examiner's reasoning in the advisory action.  Even when such elements are present, examiners typically dismiss them as "insignificant extrasolution activity", making it difficult to draft and defend even inventive claims without having to go to the Board.

So, the Board got it right in reversing the Alice rejections, if for no other reason than that the examiner failed to set forth a prima facie case of ineligibility under the Alice framework.  But right about here is where the decision in this case takes a left turn into the Twilight Zone, in a twist so surprising that it's worth devoting a whole other blog post to analyzing: although the claims clear Alice, they're still ineligible under § 101 as software per se and printed matter!  (No way!  Yes, way!  No, actually, no way.)

Do examiners really need to follow the Berkheimer memo?

Takeaway: The argument that an Alice rejection failed to follow a USPTO requirement to identify abstract ideas by way of comparison to concepts already found by the courts to be abstract is not a successful argument before the Patent Trial and Appeal Board, because the case law on which Office guidance is based does not place the same requirements on examiners as the guidance does.  The case for PTAB enforcement of the new Berkheimer memo may be stronger.

Details:

Ex parte Burchfield
Appeal No. 2016-007437; Application No. 12/016,280; Tech. Center 3600
Decided: Apr. 19, 2018

Ex parte Dominguez
Appeal No. 2016-008588; Application No. 12/903 ,916; Tech. Center 3600
Decided: Apr. 3, 2018

Ex parte Hammock
Appeal No. 2016-007736; Application No. 14/042,379; Tech. Center 3600
Decided: Apr. 3, 2018

Ex parte Hwang
Appeal No. 2017-007960; Application No. 13/809,835; Tech. Center 2600
Decided: Mar. 20, 2018

Ex parte Austin
Appeal No. 2016-004640; Application No. 12/787,721; Tech. Center 3600
Decided: Jan. 11, 2018

Dozens of Board decisions, the above listing including only a few among the more recent, contain nearly identical language redressing appellant arguments that an examiner's subject-matter eligibility rejections fail to follow USPTO guidance requiring examiners to liken the alleged abstract idea to which the claims are said to be directed to concepts already found by the courts to be abstract.  It suffices to quote from two such cases:

Austin:

Appellants first argue that the rejection under § 101 cannot be sustained because the Examiner has failed to comply with the USPTO’s “July 2015 Update on Subject Matter Eligibility” . . . and, more particularly, because the Examiner failed in the Final Office Action to “explain how the alleged abstract idea recited in the invention is similar to one of the concepts previously identified [as patent-ineligible] by the courts” . . . .  The July 2015 Update instructs examiners to refer to the body of case law precedent in order to identify abstract ideas by way of comparison to concepts already found to be abstract, and explains that “[t]his discussion is meant to . . . ensure that a claimed concept is not identified as an abstract idea unless it is similar to at least one concept that the courts have identified as an abstract idea” . . . .  That argument is not persuasive at least because an examiner’s failure to follow the Director’s guidance is appealable only to the extent that the examiner has failed to follow the relevant statutes or case law.  To the extent the Director’s guidance goes beyond the case law and is more restrictive on the examiner than the case law, the failure of the examiner to follow those added restrictions is a matter for petition to the Director.  We are aware of no controlling precedent, nor do Appellants identify any controlling case law, that precludes an examiner from finding a claimed concept patent-ineligible unless it is similar to a concept that a court has previously identified as abstract.

(Emphasis added, citations omitted, and hyperlink and footnote text placed inline.)

Hammock:

Appellants also argue that the § 101 rejection cannot be sustained because the Examiner has not identified a case in which the courts have identified a similar concept as an abstract idea . . . . Yet, to the extent Appellants maintain that the § 101 rejection must be withdrawn because the Examiner has failed to comply with USPTO guidelines, i.e., the USPTO's May 4, 2016 Memorandum, "Formulating a Subject Matter Eligibility Rejection and Evaluating the Applicant's Response to a Subject Matter Eligibility Rejection," we note that an examiner's failure to follow the Director's guidance is appealable only to the extent that the examiner has failed to follow the statutes or case law.  To the extent the Director's guidance goes beyond the case law and is more restrictive on the Examiner than the case law, the failure of the Examiner to follow those added restrictions is a matter for petition to the Director.  We are aware of no controlling precedent, nor do Appellants identify any controlling case law, that precludes an examiner from finding a claimed concept patent-ineligible unless it is similar to a concept that a court has previously identified as abstract.

(Emphasis added and citations omitted.)

My two cents: Courts have long held abstract ideas to be unpatentable, and in Alice Corp. Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014), the Supreme Court set out a framework for determining whether patent claims should be rejected as abstract.  As the Federal Circuit has pointed out, because there is no definition of "abstract idea" for the purposes of subject-matter eligibility analysis of claims with regard to that judicial exception to 35 U.S.C. § 101, we are resigned to compare each new case to prior cases:

The Supreme Court has not established a definitive rule to determine what constitutes an "abstract idea" sufficient to satisfy the first step of the Mayo/Alice inquiry.  Rather, both this court and the Supreme Court have found it sufficient to compare claims at issue to those claims already found to be directed to an abstract idea in previous cases.

Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. 2016) (internal citation omitted).

Following the Enfish decision, the USPTO memorandum "Formulating a Subject Matter Eligibility Rejection and Evaluating the Applicant's Response to a Subject Matter Eligibility Rejection", issued May 4, 2016, turned the Federal Circuit's lament into USPTO policy by requiring examiners to explain why the identified abstract idea corresponds to a concept that the courts have previously identified as abstract:

[W]hen an examiner determines that a claim is directed to an abstract idea (Step 2A), the rejection should identify the abstract idea as it is recited (i.e., set forth or described) in the claim and explain why it corresponds to a concept that the courts have identified as an abstract idea.
...
When the examiner has determined the claim recites an abstract idea, the rejection should identify the abstract idea as it is recited (i.e., set forth or described) in the claim, and explain why it corresponds to a concept that the courts have identified as an abstract idea. See, for example, the concepts identified on the July 2015 Update: Interim Eligibility Guidance Quick Reference Sheet, page 2. Citing to an appropriate court decision that supports the identification of the subject matter recited in the claim language as an abstract idea is a best practice that will advance prosecution. Examiners should be familiar with any cited decision relied upon in making or maintaining a rejection to ensure that the rejection is reasonably tied to the facts of the case and to avoid relying upon language taken out of context. Examiners should not go beyond those concepts that are similar to what the courts have identified as abstract ideas. Examiners are reminded that a chart of court decisions is available on the USPTO's Internet Web site.

However, as shown by the above Board cases, the options for applicant enforcement of the Enfish memo are few and poor.  When examiners fail to follow the official guidance, applicants can complain to supervisors, TC directors, the ombudman, or, by way of petition, to the same supervisors or TC directors and ultimately the Office of Petitions, but applicants cannot go to the Board.  None of the available options toll the prosecution clock, meaning that an application can go abandoned while an applicant fights a procedural battle that may have little bearing on the ultimate patentability of the claims.

On April 19, 2018, the USPTO released a new Alice-rejection-related guidance memo, following the decision in Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018).  Berkheimer held that whether a particular technology is well-understood, routine, and conventional is a question of fact within the legal determination of subject-matter ineligibility, and one that goes beyond what was simply known in the prior art.  "The mere fact that something is disclosed in a piece of prior art, for example, does not mean it was well-understood, routine, and conventional."  881 F.3d at 1369.  In a nutshell, the Berkheimer memo instructs that examiners must provide record evidence supporting allegations that claim elements or ordered combinations of elements amount only to "well-understood, routine, and conventional" features that thus fail to add "significantly more" to the claims than the abstract idea to which they are alleged to be directed.  Such record evidence can be based on applicant admissions, prior court decisions, or findings made from cited publications, but "cannot be based only on the fact that the specification is silent with respect to describing such element" and cannot be shown "merely [by] finding the additional element in a single patent or published application . . . unless the patent or published application demonstrates that the additional element[s] are widely prevalent or in common use in the relevant field."

There are generally good reasons for making USPTO policy dictating what an examiner must or must not do when setting forth a rejection procedurally enforceable at the Patent Trial and Appeal Board, but those reasons may be weaker when it comes to the first step of the Alice framework.  To be sure, forcing examiners to adhere to USPTO policy provides safeguards to applicant procedural due process and helps to ensure that USPTO decisions are not arbitrary, capricious, or discriminatory.  Additionally, the Board considers itself to be a reviewing body, and not a place of initial examination; as such, the Board ought to free itself of reviewing abstract-idea determinations made at Alice step one that do not comport with USPTO guidance, and should just summarily reverse such determinations.  Austin, Hammock, and other decisions show that this is not the case, however, nor is this a particularly new position taken by the Board, see. e.g., Ex parte Lyons, No. 2009-007300 (B.P.A.I. Dec. 13, 2010) ("Failure to comply with guidance is not per se appealable to the Board, as the jurisdiction of the Board is limited to review of rejections rather than the conduct of the examination."), even if exceptions can be found in the appeal records.

But the appellants lost in those cases because they were not able to show binding precedential support for their suppositions as to what was required during examination.  The Federal Circuit's Berkheimer decision, however, provides more definite precedential support for the content of the Berkheimer memo than Enfish does for the May 2016 Enfish memo.  For instance, Berkheimer states in no uncertain terms that "The mere fact that something is disclosed in a piece of prior art, for example, does not mean it was well-understood, routine, and conventional."  881 F.3d at 1369.  As such, applicants may have more success in asking the Board to uphold the procedural requirements imposed on examiners by the Berkheimer memo, at Alice step two, than they have had in trying to enforce the July 2015 and May 2016 guidance memos, relating to step one of the Alice framework.

Targeted advertising claims survive Alice step two

Takeaway: Improvement arguments succeeded in overturning § 101 subject-matter eligibility rejections of claims relating to Internet-based directed-advertising under circumstances involving broadcast TV and simultaneous chat room participation.  The arguments had failed to persuade at step one of the Alice framework but worked at step two.

Details:

Ex parte Relyea
Appeal No. 2017-001443; Application No. 12/410,588; Tech. Center 3600
Decided: Apr. 18, 2018

Inventors for Verizon filed a patent application including the following representative claim for targeted advertising:

1.      A method comprising:
        providing, by one or more devices, broadcast programming to a plurality of user devices, associated with a plurality of users, via a television network;
        hosting, by the one or more devices, at least one chat group associated with the broadcast programming provided via the television network,
             hosting the at least one chat group including hosting a virtual chat room for the chat group that provides interaction via at least one of text-based discussion or a video client,
             the at least one chat group being displayed with the broadcast programming;
        determining, by the one or more devices and based on hosting the at least one chat group, information identifying a group of users, of the plurality of users, currently in a same chat group, of the at least one chat group, associated with the broadcast programming provided via the television network;
        defining, by the one or more devices, a micro-group to include user accounts associated with the group of users in the same chat group, the user accounts being added to the microgroup based on the group of users joining and currently being in the same chat group associated with the broadcast programmmg;
        creating, by the one or more devices, a profile associated with the micro-group based on user information associated with the user accounts;
        monitoring, by the one or more devices and based on hosting the at least one chat group, real time behavior of the group of users in the same chat group to detect one or more actions taken by one or more users of the group of users, the one or more actions being associated with content of the chat group;
        modifying, by the one or more devices, the profile associated with the micro-group based on the one or more actions;
        retrieving, by the one or more devices, advertising content targeted to the group of users in the same chat group based on the profile that is created based on the user information associated with the user accounts of the group of users in the same chat group and that is modified based on the one or more actions taken by the one or more users of the group of users in the same chat group; and
        providing, by the one or more devices, the advertising content to user devices, of the plurality of user devices, associated with users currently in the chat group, the advertising content being displayed in a same view as the chat group and being integrated into a television program included in the broadcast programming provided to the group of users in the same chat group. 

As explained in the specification, 

Target advertising typically seeks to generate improved customer response rates by directing particular advertisements to consumers based on observed behavior.  Television service providers that can simultaneously direct a variety of advertisements to smaller similarly-interested groups may be poised to generate more revenue than those using a single advertisement to all viewers watching the same program. . . . Implementations . . . may allow a subscription television service provider to define micro-groups of users and identify micro-group tendencies to provide targeted advertising to members of the micro-group . . . of subscribers to the subscription television service that are associated by an expressed interest.  The micro-group may be created based on a variety of techniques, including social networking (e.g., chat group participation, accepting an invitation as a group member, etc.), past viewing histories, and/or real-time viewing behavior.  In some implementations, the micro-group tendencies may change dynamically as different users join or leave the micro-group.  Implementations described herein may be incorporated using a television display and video client (e.g., a set-top box), a personal computer, a mobile telecommunications device, and/or combinations thereof.

The examiner identified the abstract idea to which the claims were allegedly directed as "targeting of advertisements to a micro-group of users based on profile data and chat group content."  The examiner found that such a concept was similar to the decision SmartGene, Inc. v. Advanced Biological Labs., SA, 555 F. App'x 950 (Fed. Cir. 2014), in which new and stored information was compared and analyzed using rules to identify options.  While acknowledging the more recent Enfish decision, the examiner nevertheless found that the claims merely used conventional computers to implement abstract ideas, unlike the self-referential table of Enfish which improved the computing technology itself.

Appealing the examiner's Alice rejections, the appellants argued that the claims were not abstract because they provided an improvement in a computer-related technology and addressed a problem "necessarily rooted in computer technology at least because the claims do not recite a process that can be performed in the human mind, or by a human using a pen and paper."

The Board did not credit appellants' arguments relating to step one of the Alice framework. The Board found that the claims did not attempt to solve a challenge particular to the Internet, and thus DDR Holdings was of no particular help.  The Board also found the advertising claims not to be analogous to the rule-based automated computer animation claims found eligible in McRO.

However, the Board appeared to be persuaded by the appellants' arguments relating to step two of the framework, the "search for an inventive concept" step, i.e., that the claims "improve[d] the technical field of broadcasting television programs by dynamically integrating targeted advertising content into the television programs that are broadcast to users of the chat group," and thus provided "a detailed level of targeted advertising [that] was not technologically achievable for television broadcasting in the past"; further that the claims included limitations "not widely prevalent in the field" that "leverage[d] [the] real-time behavior of users in the chat groups to integrate targeted advertising content into broadcast programming"; and still further that the claims were confined to the particular useful application of integrating targeted advertising content "into a television program included in the broadcast programming provided to the group of users in the same chat group."  The Board appeared to credit the appellants' assertion that "[t]he ability to integrate the claimed level of detailed targeted advertising was not achievable for television broadcasting in the past" and noted, as the examiner had, that the particular combination of circumstances recited in the claims appeared to be somewhat unique.  Thus, the Board reversed the Alice rejections.

My two cents:

Claims for innovations in targeted advertising on the Internet have been prime targets for Alice rejection or invalidation.  See, e.g., Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1271 (Fed. Cir. 2016); Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1369-70 (Fed. Cir. 2015) Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014); Ex parte Greene, No. 2016-007319 (P.T.A.B Apr. 18, 2018) (claims directed to "identifying indeterminacy for activity-based advertising" deemed an unpatentably abstract "method of organizing human activity"); Ex parte Ferber, No. 2016-008650 (P.T.A.B. Jan. 9, 2018) (claims directed to targeted advertising deemed an unpatentably abstract fundamental economic practice); Ex parte Malden, No. 2016-004867 (P.T.A.B. Jul. 24, 2017) (claims directed to targeted advertising and brokerage of ads held an unpatentably abstract comparison of new and stored information and using rules to identity options); Ex parte Kendall, No. 2015-008182 (P.T.A.B. Apr. 19, 2017) (claims directed to communicating actions within a social network for the purpose of advertising a product and/or selling advertising held an unpatentably abstract fundamental economic practice and method of organizing human activities), reh'g denied, Kendall (P.T.A.B. Aug. 23, 2017); Ex parte Kendall, No. 2015-008149 (P.T.A.B. Apr. 19, 2017) (same).  An overarching reason for this may be because the benefits provided by such claims are characterized not as technical or technological improvements, but instead as business benefits in better targeting a customer's needs or dynamically adjusting to a customer's activity.  So it is remarkable that the Internet advertising claims in Relyea passed muster at the Board.  Why were they able to get past Alice?

The Board compared the claims to the dynamic-display electronic securities trading claims in Trading Technologies International, Inc. v. CQG, Inc., 675 F. App'x 1001 (Fed. Cir. 2017), pointing out that the claims in this case "provide a detailed level of targeted advertising that changes dynamically based on the real-time behavior of users in a chat group."

It may be that such dynamic functioning inventively amounts to "significantly more" than the identified abstract idea itself, but on the other hand, it is not clear why such is "more" than "using rules to identify options," the previously held abstract concept.  The extension of the Trading Technologies holding to apply to dynamic advertising claims may just be yet another example of the subject-matter eligibility pendulum swinging back.

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.

IBM's improvement arguments overcome Alice rejections, win random number generation claims at the PTAB

Takeaway: The PTAB reversed Alice rejections of pure-software random digital generation claims, crediting the appellants' improvement argument in the face of examiner criticism of that argument and even in the absence of a reply brief addressing that criticism.

Details:

Ex parte Sherwood
Appeal No. 2017-006552; Application No. 13/906,056; Tech. Center 2100
Decided: Sep. 28, 2017

The application on appeal, titled "Balancing Consumption of Random Data", described improved operation of an apparatus for generating random data in a computer system, and in particular, to the improved operation of obtaining entropy data for seeding the random data generation.  A representative claim on appeal read:

21.  A digital data apparatus for producing random digital data, comprising:
       at least one physical processor;
       a physical system memory;
       a plurality of entropy sources each generating respective random source digital data having a corresponding level of entropy, including a first entropy source generating random source digital data having a first level of entropy, and a second entropy source generating random source digital data having a second level of entropy lower than said first level of entropy, said second entropy source being independent of said first entropy source;
       a random number generator embodied as computer program code storable in said physical system memory and executable on said at least one physical processor, said random number generator receiving input from each said plurality of entropy sources, said random number generator generating a random digital data output by a deterministic algorithm using input from a selective one of said plurality of entropy sources as a seed for said deterministic algorithm;
       an entropy manager embodied as computer program code storable in said physical system memory and executable on said at least one physical processor, wherein said entropy manager automatically selects one entropy source among said plurality of entropy sources as input for the seed for said deterministic algorithm used by said random number generator, said entropy manager automatically selecting one entropy source among said plurality of entropy sources by determining a minimum level of entropy required by a consuming entity from among multiple possible minimum levels of entropy required, wherein the consuming entity consumes random digital data output by said random number generator to perform at least one data processing function, wherein the minimum level of entropy required by the consuming entity is a minimum level required as input for the seed for said random number generator to produce the random digital data output consumed by the consuming entity, said entropy manager further automatically selecting an entropy source from among said plurality of entropy sources having the lowest corresponding level of entropy which meets said minimum level of entropy required by the consuming entity.

(Emphasis added.)

The final rejection held that the claims were directed to the abstract idea of "performing mathematical steps drawn to generating random data, receiving inputs, selecting entropy sources, determining levels of entropy, consuming random data, monitoring/analyzing events, accessing rules, determining levels of entropy, preventing flipping of entropy selection states, and performing cryptographic operations."  The rejection stated that

[t]hese steps merely employ basic concepts drawn to manipulating information using mathematical and logical concepts which is similar to the basic concept of manipulating information using mathematical relationships found to be an abstract idea by the courts. The claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception because the claims do not add a meaningful limitation to the abstract steps as they would be routinely used by those having ordinary skill in the art on a general purpose computer.

With regard to the second step of the Alice framework, the examiner found that the recitation of processor and memory in the claims did not amount to significantly more, and likewise,

the recitation of elements such as "entropy sources", "random number generator", "entropy manager", and "cryptographic apparatus" are also generic because there is no evidence in the specification that these elements must be specific hardware elements. For example, the claimed random number generator and entropy manager are embodied as code and the claimed cryptographic functionality is defined in the specification as software. A general purpose computer can be programmed to execute code and software.

The examiner also addressed the applicant's argument that the claims were directed to an improvement in computer technology:

[T]he invention as claimed is not drawn to an improved encryption engine for a computer system that improves efficiency. . . . [T]he applicant has failed to point to evidence that using "relatively lower entropy data for certain less essential purposes" improves efficiency of the claimed invention.  The applicant's arguments cannot take the place of evidence.

(Emphasis in original.)

The appeal brief is worth quoting at length:

[The] invention relates to "improved operation of an apparatus for generating random data in a computer system, and in particular, to the improved operation of obtaining entropy data for seeding the random data generation" . . . Although improved performance is the primary motivation, Appellant's technique . . . may, by using highest quality random data only when necessary, permit a higher quality of randomness to be used in those circumstances which require it.
A computer-implemented cryptographic engine or random data generator necessarily receives input in the form of data, i.e., strings of '1's and '0's, and performs a series of mathematical steps and takes branches based on determinations made using data, to produce a final result, which is again data, i.e., strings of '1's and '0's.  . . . [A]ny computer-implemented process can ultimately be reduced to receiving data as input, performing a series of mathematical steps and branches based on determinations made using the data, and producing a result in the form of data.  That is the very essence of a deterministic sequential state machine.  No computer, no matter how fast, sophisticated or advanced over other computers, can do anything beyond these basic steps.
If any machine or process which is limited to receiving data input, performing mathematical manipulations of the data, making decisions based on results, and outputting data, is deemed an "abstract idea", the Patent Office might as well give up patenting computer implemented inventions, for all such inventions, no matter how complex or sophisticated, ultimately can be broken down into simple mathematical steps and branches.  This is clearly not what the law is and not what was intended by the recent Supreme Court decision in Alice Corp. v. CLS Bank. . . . [T]t is true that in a very general sense Applicant's invention does [manipulate information using mathematical relationships].  As does each and every computer-implemented invention that has been patented by the Patent Office. . . . The Examiner's reasoning appears to be exactly the type of overly broad application of the "abstract idea" doctrine which was disapproved by the Federal Circuit in Enfish. . . .  Appellant's invention does not come close to pre-empting the field of "manipulating information using mathematical relationships".

(Emphasis in original.)

The examiner answered that:

[P]reemption is not the test for judging subject matter eligibility under the Alice analysis.  Rather, the test consists of (in summary) determining whether the claimed invention is drawn to a judicially recognized exception.  If so, then the claimed invention is further analyzed to determine whether there is additional subject matter recited that amounts to significantly more than the judicial exception.
The claims are drawn to apparatuses, methods, and computer program products which perform mathematical steps. These steps manipulate information using mathematical and logical concepts. Ideas such as this have been found by the courts to be abstract. See Parker v. Flook, 437 U.S. 584 (1978); Gottschalk v. Benson, 409 U.S. 63 (1972).  In Flook, the claimed invention was drawn to the abstract idea of gathering numerical information and manipulating it mathematically.  In the instant case, entropy information is gathered in the form of binary numbers and is manipulated mathematically to generate random data, which is also represented in binary.

The examiner called the appellants' improvement argument "flawed":

Appellant's only explanation that the claimed invention is an improvement is that computer system efficiency is improved "by using relatively lower entropy data for certain less essential purposes." . . . However, Appellant never defines what these "purposes" are.  More importantly, the entropy data is used for random number generation, this being the only "purpose" that can be inferred from Appellant's argument.  How this improves computer system efficiency is not explained in Appellant's argument. Appellant merely asserts that these purposes exist without citing any evidence as to what they are.

The appellants did not file a reply brief to address this rebuttal.  Nevertheless, the Board "agree[d] with Appellants that the Examiner has overgeneralized the claimed invention by summarizing it as the mere performance of mathematical steps, or as information gathered in the form of binary numbers that is manipulated mathematically to generate random data", and took it upon themselves to scour the specification for the inventive concept:

[The] invention is directed to generating random digital data for use by a consuming entity.  For certain purposes, e.g., strong encryption, random data having higher entropy is required; for other purposes, lower entropy (and thus quicker to gather) random data will suffice. . . . In the invention, an entropy manager determines the minimum level of entropy required by a consuming entity, and selects the random data (i.e., entropy) source that supplies random data having a requisite level of entropy for the consuming entity’s purposes.
We do agree generally with the Examiner’s conclusion that Appellants’ claimed invention is drawn to an abstract idea. The claims under appeal are drawn to method and apparatus for producing random digital data, including a random number generator for generating said random digital data by following a deterministic algorithm using input from one of a plurality of entropy sources as a seed.
Appellants persuade us, however, that the claims are, nonetheless, statutory under the second prong of the Alice analysis.  Representative claim 21 recites, inter alia, an entropy manager that “automatically selects one entropy source” from among a plurality, as the seed for the deterministic algorithm. The entropy manager makes this selection “by determining a minimum level of entropy required by a consuming entity . . . the minimum level of entropy required by the consuming entity is a minimum level required as input for the seed for said random number generator . . . said entropy manager further automatically selecting an entropy source from among said plurality of entropy sources having the lowest corresponding level of entropy which meets said minimum level of entropy required by the consuming entity.”
In support, Appellants’ Specification discloses that “[h]igh-entropy data is difficult for a computer to generate,” and even if one resorts to techniques such as monitoring network traffic, “it takes time in order to gather such random data.” . . . Appellants’ invention, thus, sets forth a system that automatically balances the tradeoff between (a) high entropy, hard to predict (and thus hard to attack) data that is scarce, time-consuming to produce, or both, and (b) lower entropy, less difficult to predict (but less secure) data that is easier to gather, less computationally intensive to produce, or both. See Spec. 9-10.
We conclude that the function of the entropy manager in the claimed invention results in claims drawn to significantly more than an abstract idea.  See Alice, 134 S. Ct. at 2355.  Like the animation method in McRO Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016), we conclude that the claims under appeal are limited to rules with specific characteristics.  McRO, 837 F.3d at 1314—15.  Like the self-referential logical table in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016), we conclude that the appealed claims focus on a specific means or method that improves the relevant technology.  See Enfish, 822 F.3d at 1335.  Here, Appellants’ invention focuses on a specific method of providing an entropy manager to make a decision concerning the appropriate entropy level to be employed, in order to supply random digital data of sufficient entropy while conserving computer processing power and/or time.

(Emphasis added.)  Thus, the Board reversed the subject-matter eligibility rejections, and the appellants were issued their patent (No. 9,934,000).


My two cents:

This post in the fifth in a series examining improvement arguments and their rapidly mounting significance in winning reversals of Alice rejections at the Board.  The first post in the series provided a set of practice tips.  This case is an example of an improvement argument winning at step two of the Alice framework, and illustrates the examiner demanding evidence in support of the improvement argument (see practice tip #7) but the appellants not needing it to win.

The abstract idea to which the examiner alleged the claims were directed ("performing mathematical steps drawn to generating random data, receiving inputs, selecting entropy sources, determining levels of entropy, consuming random data, monitoring/analyzing events, accessing rules, determining levels of entropy, preventing flipping of entropy selection states, and performing cryptographic operations") is a mouthful, but the Board nonetheless agreed that the claims were drawn to an abstract idea, albeit one of a different description: "producing random digital data, including a random number generator for generating said random digital data by following a deterministic algorithm using input from one of a plurality of entropy sources as a seed."

The Board gave no credit to the examiner's argument that additional evidence was required to show that using "relatively lower entropy data for certain less essential purposes" resulted in an efficiency improvement.  Instead, the Board found the description in the specification to be self-evident of the cause and effect reasoning necessary to support the improvement argument.

Only about six months elapsed between the docketing of the appeal and the handing down of the Board's decision.  This seems unusual, as most practitioners are more accustomed to appeal pendency on the order of years rather than months.  According to contemporary PTAB statistics, average appeal pendency for cases originating from technology center 2100 at the time of this decision was 13.2 months, down a spectacular 11.1 months from the same time the previous year.  Although appeal pendency has been dealt with very effectively and continues to fall (it's down to 13.0 months in 2100 at last count), this appeal was still delivered in less than half the average time.  One can only speculate whether this case was hastened by a PTO directive to build Alice guidance by expediting appeals deciding § 101 controversies, or because of the particular Board section to which the appeal was assigned and the workload thereof, or because of the identity of the real party in interest (IBM) and the volume of applications filed by that particular assignee.  Whatever the reason for the favoritism (if any), the appellants got a good deal with this appeal, only waiting about twice as long as they would have for another Office action.

We're not done yet with looking at improvement argument cases, so stay tuned for more.