Where are we? Where are we going? What should we do now? CLE 2.17... · (FairWarning) – “[W]e...

Lawyers Association of KC - IP CLEFebruary 23, 2017

James Devaney

Patent Subject Matter EligibilityRecent Developments in

Where are we?

Where are we going? What should we do now?

February 23, 2017 Lawyers Association of KC ‐ IP CLE 2

Recent Developments + Strategies From Empirical Analyses• How was this material developed?

– Study of ~200 court decisions – focused on eligibility/validity– Study of 200+ cases in TC3600 art unit that overcame Alice-type §101 rejections– Study of ~150 recent PTAB decisions that reversed §101 rejections– 101 case law – USPTO Guidance + examples + training materials– Examiner (SPE) input– Pending cases (mostly TC 3600 and computer-related art units).

• Examples focus on aspects of law, trends, observational conclusions• Not a complete picture• Your strategy should be based on the facts of your case


Alice Corp. v. CLS Bank Int’l• Applies framework from Mayo v. Prometheus to all claims

directed to a judicial exception

• Judicial exceptions: natural laws, products of nature, and abstract ideas

• Two-step test from Mayo (the Mayo/Alice framework):• Step-1: Are the claims directed to a patent-ineligible concept (e.g. a

law of nature, natural phenomenon or abstract idea)?

• Step-2: If so, do the claim elements contain an “inventive concept” sufficient to ensure that the patent in practice amounts to “significantly more” than a patent upon the ineligible concept itself?


• District Courts: 209/332 cases invalidated < 40% survival

• Federal Circuit: 66/75 cases invalidated < 15% survival

• USPTO: Interim Guidance – 3rd major updates + 36 examples– 3 memoranda to examining corps – 2 listening tours– Summaries, charts, training materials


Where are we? - Alice in the courts

Source: Robert R. Sachs, “ALICE BRINGS A MIX OF GIFTS FOR 2016 HOLIDAYS" Bilski Blog, Dec. 23, 2016 available at: http://www.bilskiblog.com/blog/2016/12/alice‐brings‐a‐mix‐of‐gifts‐for‐2016‐holidays.html


Where are we? - Alice at the USPTO

Source: Robert R. Sachs, “ALICESTORM UPDATE FOR FALL 2016,” Bilski Blog, October 19, 2016 available at: http://www.bilskiblog.com/blog/2016/10/alicestorm‐update‐turbulence‐and‐troubles‐.html

101 Rejection Rates by Art Unit


What do we know? – Abstract Idea (AI)• Still no succinct test or definition for an AI

• AI identified using “common law methodology” by comparison to similar prior cases. (Amdocs)

• Follow example set by SCOTUS in Alice: • “[W]e need not labor to delimit the precise contours of the “abstract ideas” category in

this case. It is enough to recognize that there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here. Both are squarely within the realm of “abstract ideas” as we have used that term.”

• “Common law” approach also used by PTO.


What do we know? – Abstract Idea (AI)• A claim “directed to” an AI (or other exception)

– The "directed to" inquiry applies a filter to claims, when interpreted in view of the specification, “based on whether their character as a whole is directed to [a patent ineligible concept]”. (Enfish)

• we have described the first-stage inquiry as looking at the “focus” of the claims, their “‘character as a whole,’

• “It is not enough to merely identify a patent-ineligible concept underlying the claim; we must determine whether that patent-ineligible concept is what the claim is ‘directed to.’” (Rapid Litig. Mgmt. Ltd. v. Cellzdirect, Inc. (Fed. Cir. 2016))

• Not “a high level of abstraction” and “untethered from the language of the claims.” (Enfish)


What do we know? – Abstract Idea (AI)• Includes long-prevalent practices

– “fundamental . . . practice[s] long prevalent” are abstract ideas. (Intellectual Ventures I LLC v. Symantec Corp. (Fed Cir. 2016) (quoting Alice))

– “FairWarning’s claims merely implement an old practice in a new environment. These are the same questions … that humans in analogous situations detecting fraud have asked for decades, if not centuries. ” (FairWarning IP, LLC v. Iatric Systems, Inc.(Fed Cir. 2016))

– The Court’s task is “to determine the breadth of the claims in order to determine whether the claims extend to cover a ‘fundamental . . . practice long prevalent in our system . . . .’” (Intellectual Ventures I LLC v. Capital One Bank (USA), (Fed Cir. 2015) (quoting Alice))


What do we know? – Abstract Idea (AI)• Includes inventions that can be carried out mentally

– “Methods that can be performed entirely in the human mind are unpatentable [because] these are the types of methods that embody the basic tools of scientific and technological work that are … reserved exclusively to none.” (Synopsys, Inc. v. Mentor Graphics Corp. (Fed Cir. 2016) (quoting CyberSource))

– “[M]erely presenting the results of abstract processes of collecting and analyzing information without more is abstract[.]” (FairWarning)

– “[W]e have treated analyzing information by steps people go through in their minds, or by mathematical algorithms, without more, as essentially mental processes within the abstract-ideas category.” (Elec. Power)

• Mental steps doctrine and the “pencil and paper” test


What do we know? – Abstract Idea (AI)• Driving concern is preemption

– “The preemption concern arises when the claims are not directed to a specific invention and instead improperly monopolize “the basic tools of scientific and technological work.” (Alice, quoting Myriad)

– The abstract idea exception has been applied to prevent patenting of claims that abstractly cover results where “it matters not by what process or machinery the result is accomplished.” (McRo,O’Reilly v. Morse)

– “There is a critical difference between patenting a particular, concrete solution to a problem and attempting to patent the abstract idea of a solution to the problem in general.” (Alstom)

– Look to whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery (McRo)

• Distinguish between clams reciting the “ends sought and particular means of achieving them, between the desired results … and particular ways of achieving (performing) them.” (Alstom)


What do we know? – Recurring Themes of AIs

• Business/Economic Practices – E.g., Alice, Ultramercial, buySafe, OIP Techs, DDR Holdings

• Gathering, organizing, or presenting information– E.g., Digitech, Content Extraction, TLI Communications,

Alstom, Amdocs, Evolutionary Intelligence*

• Using ordinary computer for pre-computer era activity

– E.g., Planet Bingo, Symantec, Fairwarning IP

*Nonprecedential


What do we know? – “Significantly More”• An inventive concept…

• We have described step two of this analysis as a search for an “ ‘inventive concept’”—i.e., an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” (Alice)

• A “claimed abstract idea [has to] supply a new and useful application of the idea to be patent eligible.” (Gottschalk v. Benson)

• An inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces. (Bascom)

• Relying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible. (OIP Techs, citing Alice)

• A new combination of steps may be patentable even though all the constituents of the combination were well known and in common use before the combination was made.” (Rapid Litig., citing Alice, Diehr))


Case Basis for ValidityDDR Holdings (Fed. Cir. 2014)

Inventive Concept (step 2) ‐ Modified Internet hyperlinks “override” theconventional operation of the Internet/hyperlinking.

Enfish(Fed. Cir. 2016)

No AI (Step 1) – Claims focus on “a specific means or method” to improve the waya computer stores and retrieves data in memory.

BASCOM(Fed. Cir. 2016)

Inventive Concept (step 2) – Claims a specific, particular arrangement of atechnology based solution to filter content on the Internet that overcomesexisting problems with other Internet filtering systems.

Rapid Litig. (Fed. Cir. 2016)

No AI (Step 1) – Claims are not directed to naturally occurring hepatocyte cells ortheir ability to survive multiple freeze‐thaw cycles. Rather the claims cover a newand useful method of producing a desired preparation of hepatocyte cells.Confirms step 2 – the claims recite IC through repeating steps that the prior arttaught to perform only once.

What do we know? – 6 (of 7 total) eligible decisions decided last year!


What do we know? – 6 (of 7 total) eligible decisions decided last year!

Case Basis for ValidityMcRo

(Fed.Cir. 2016)No AI (Step 1) – Ordered combination of claim steps, including specific, limitingfeatures is not directed to an AI and allows for the improvement realized by theinvention.

Amdocs(Fed.Cir. 2016)

Inventive Concept (Step 2) – For all three patents at issue, unconventionaldistributed architecture provides an inventive concept and technological solutionto a technological problem.

Trading Tech.(Fed.Cir. 2016)

(nonprecedential)

No AI (Step 1) – Claimed graphical user interface system is not an idea that haslong existed and solves a problem of prior graphical user interface devices.


What do we know? – Recent Notable CasesTLI Commc’ns LLC v. AV Auto., LLC. 823 F.3d 607, 611 (Fed. Cir. 2016)Claims assigning classification data to digital images and sending images to a server

• Fed. Cir. May. 17, 2016 - Ineligible– Part 1: “classifying and storing digital images in an organized manner” Abstract

• The claims are not directed to an solution to a technological problem. The problem facing the inventor was not how to combine a camera with a cell phone, transmit images via a cellular network, or how to append classification information to the data.

• Rather, the claims are directed to the use of conventional or generic technology in a nascent but well-known environment, without any claim that the invention reflects an inventive solution to any problem presented by combining the two.

– Part 2: Nothing significantly more; no inventive concept. • The claims recite generic computer components insufficient to add an IC to an otherwise abstract environment. • The recited hardware elements (e.g., telephone unit) behave as expected and simply provide the environment in

which the abstract idea is carried out.


What do we know? – Recent Notable CasesElec. Power Grp., LLC v. Alstom S.A., 2016 WL 4073318 (Fed. Cir. Aug. 1, 2016).

Claims cover real-time performance monitoring of electric power grid by collecting data from multiple source, analyzing the data, and displaying the results

• Fed. Cir. Aug. 1, 2016 - Ineligible– Part 1: “collecting, analyzing, and presenting information” Abstract – Part 2: Nothing significantly more; no inventive concept.

• The claims do not require an arguably inventive set of components or methods (such as measurement devices or techniques) for generating the data, do not invoke assertively inventive programming, nor require an arguably inventive device or technology for displaying information.

• There is a critical difference between patenting a particular concrete solution to a problem and attempting to patent the abstract idea of a solution to the problem in general.

• Rather than claiming some specific way or particular implementation, the patentee purports to monopolize every potential solution to the problem.

• Essentially results-focused, functional character of claim language has been a frequent feature of ineligible claims.


What do we know? – Recent Notable Cases

Patent Mayo/Alice Part 1 Mayo/Alice Part 2

6,460,050 Filtering files/e‐mail No inventive concept in claims, only generic computer elements.

6,073,142Routing message delivery based on business rules

No inventive concept; claims a routine and conventionalimplementation using no more than generic computers performinggeneric computer functions.

5,987,610Screening data for computer‐software viruses

No inventive concept; claim recites only conventional elements:generic computers that use generic virus screening technologyimplemented in a generic environment (a telephone network).

• Background sections: described claimed concepts as common practices performed by people, thus admitting that claims were directed to abstract ideas.

• Spec does not describe nor do claims restrict how claimed “essential” results are accomplished.• First dissenting §101 opinion for eligibility - Judge Stoll argues for ‘610 patent eligibility• Concurrence by Judge Mayer argues no patent protection for software under §101

Intellectual Ventures I LLC v. Symantec Corp. No. 15-1769 (Fed. Cir. Sept. 30, 2016)• Fed. Cir. Sept. 30, 2016 – Ineligible (3 patents)

What do we know? – Recent Notable CasesFairWarning IP, LLC v. Iatric Systems, Inc. U.S. App. LEXIS 18313 (Fed. Cir. Oct. 11, 2016)

Claims method of detecting improper access (e.g., fraud or misuse) of a patients health record information (PHI) in a computer environment.

• Fed. Cir. Oct. 11, 2016 - Ineligible– Part 1: “analyzing records of human activity for suspicious behavior” Abstract

• Claims are directed to collecting and analyzing information to detect misuse and then notifying.• Merely implements an old practice in a new environment (computers) using same processes as

humans. • Improvement (efficiency) due to use of general purpose computer not the claimed method.

– Part 2: Nothing significantly more. • The use of generic computer elements (user interface, microprocessor) does not supply the IC.• Combination of data sources to provide a “full picture” as an technical improvement not sufficient

(Elec. Power.)


What do we know? – Recent Notable Cases


Synopsys, Inc. v. Mentor Graphics Corp. 2016 U.S. App. LEXIS 18561 (Fed. Cir. 2016)

• Fed. Cir. Oct. 17, 2016 - Ineligible– Part 1: “translating a functional description of a logic circuit into a hardware

component description of the logic circuit” Abstract • The translation method, as claimed, can be (and was) performed mentally or by pencil and paper.

– Part 2: No inventive concept. • Novelty does not = inventive concept. “A claim for a new abstract idea is still an abstract idea.” • No technical solution. No technical advance or improvement. • Patentee’s claimed “assignment conditions” for conversion are not an inventive concept because

they aid in the mental process as opposed to computer efficacy.

Claims method for converting Hardware Description Language (HDL - a hardware-independent description

of a logic circuit) into hardware components.


Where are we going?

• Courts: Increase # of decisions finding eligibility, but ineligible still more likely than not.

• USPTO: Continues to struggle. 2016 included a guidance update (May 4), 3 memoranda to examining corp., and “roundtable” listening tour.

• Congress: Key players taking steps to enact legislative reform to 101 statute.


Where are we going? – §101 Decisions By Month

Source: Robert R. Sachs, “ALICE BRINGS A MIX OF GIFTS FOR 2016 HOLIDAYS" Bilski Blog, Dec. 23, 2016 available at: http://www.bilskiblog.com/blog/2016/12/alice‐brings‐a‐mix‐of‐gifts‐for‐2016‐holidays.html


Where are we going? – Legislative Reform? IPO-proposed legislation to amend 35 U.S.C. § 101:

101(a) ELIGIBLE SUBJECT MATTERWhoever invents or discovers, and claims as an invention, any useful process, machine, manufacture, composition of matter, or any useful improvement thereto, shall be entitled to a patent for a claimed invention thereof, subject only to the exceptions, conditions, and requirements set forth in this Title.

101(b) SOLE EXCEPTION TO SUBJECT MATTER ELIGIBILITYA claimed invention is ineligible under subsection (a) if and only if the claimed invention as a whole, as understood by a person having ordinary skill in the art to which the claimed invention pertains, exists in nature independently of and prior to any human activity, or exists solely in the human mind.

101(c) SOLE ELIGIBILITY STANDARDThe eligibility of a claimed invention under subsections (a) and (b) shall be determined without regard as to the requirements or conditions of sections 102, 103, and 112 of this Title, the manner in which the claimed invention was made or discovered, or the claimed invention’s inventive concept.

February 23, 2017 Lawyers Association of KC ‐ IP CLE 24February 23, 2017 Lawyers Association of KC ‐ IP CLE 24

STRATEGIES


Strategies derived from analysis of TC3600 casesAnalysis of TC3600 art unit applications that overcame Alice-type §101 rejections (2015-early 2016) • Applicants arguments (including after amending claims):

• ~80% - Improves functioning of computer / Solves a problem rooted in the Internet / Improves another technology/technical field

• ~30% - No preemption / Examiner did not consider all limitations

• ~15% - Claims cover a practical application (satisfy mental steps doctrine)

• ~10% - Lack of prior art evidence of unconventional steps (inventive concept)

• ~5 % - Examiner does not establish a prima facie case

• Other strategies: Overwhelm examiner with additional limitations & throw in some technical jargon for good measure


Strategies derived from analysis of recent PTAB decisions

• Analysis of PTAB decisions reversing Alice-type §101 rejections:• < 20% - Likelihood of reversal

• ~60% of reverses due to examiner failing to establish a prima facie case

• ~50% of reversals at Step 2A (Examiner mischaracterizes abstract idea)

•


Strategies derived from analysis of District Court decisions

• Statistics not helpful (except maybe at judge/district level)

• Analysis revealed common misunderstandings, bad practices:• Sub-optimally framing the Abstract Idea

• E.g., failing to recognizing an AI, awkward analogies to pre-computer era practices, overly-technical AIs, untethered AIs, not analogizing to best prior cases.

• Ignoring significant limitations or portions of the claim

• Mixing analysis of step 1 with step 2 (or vice versa)

• Confusing 101 arguments with 102/103


Strategy – Assessing the caseHow to evaluate a claim• Identify the objective of the claimed invention.

– What is the purpose? What is the point? What does it do?

• Look for technical improvement recited in the claims, supported by the spec.– Is the objective technical? Is technology improved? Does it solve a problem arising out of technology?– If the claim uses technology to carry out its objective, is the objective related to the technology or is the

technology merely a tool to carry out the objective? (See e.g., Alstom

• Does the objective align with recurring 101 themes (e.g., well-known business practices, organizing information, computer-performed human activity, etc.)

• Look for specificity – do claims recite desired results or “ends sought” rather than a particular way of achieving/performing them?

• Identify novel steps/elements of claims, which may indicate an inventive concept.– Are the elements/steps commonly performed individually and in combination? Is any improvement realized by the

ordered combination?


Strategy – Amending the Claims 3 Amendment Strategies For Overcoming § 101 1) Including/Clarifying the inventive concept

Should have connection to specification (ideally with detailed support) May be closely tied to 102/103 amendments Avoid claim language that is essentially result-focused without the technical specificity for achieving the result For a good example of a claim without an IC, see TLI Communications, Elec. Power

2) Adding an components to overcome a rejection based on mental processes Generic components may be sufficient. But component needs to be recited in the body of the claim / tied to the claims steps

(Preamble is not good enough. See e.g., Digitech).

Don’t argue that a human could not perform the calculations, etc. (Just assume that the person performing the claim is really smart and has super-human analytical powers.)

Consider adding an element/component to provide a specific, technical implementation. A common trait of these ineligible claims is having a results-focused, functional character without claiming the particular

way of performing the functions or achieving the results. (See Elec. Power, slip op. pg. 12)

Avoid claims that merely calculate/determine information or make a decision based on the calculation. USPTO Guidance lists other “common characteristics” of these types of ineligible claims. (See July 2015 Update: Subject

Matter Eligibility. p. 5.)


Strategy – Amending the Claims 3 Amendment Strategies For Overcoming § 101 3) Adding steps for performing a “useful application…”

Avoid claims that merely calculate/determine information or make a decision based on the calculation. Adding “storing the calculation” or similar “storing” element is insufficient

“Adding a final step of storing data to a process that only recites computing the area of a space (a mathematical relationship) does not add a meaningful limitation to the process of computing the area.” (USPTO Guidance, May 4, 2016)

This may require amending the preamble (may require changing the thrust of the claim) Tie the useful application to the element(s) reciting the IC. (I.e., don’t merely add “apply it”) *Be mindful of the claim scope!* Ideally this useful application also would be carried out by an infringer. For example, see claims at issue in McRO.

WINNING COMBINATION: Claim includes a clear inventive concept (may be point of novelty) coupled with an application or use (not only a mental process) that realizes an improvement to a technology (which should be described in specification) or solves a problem inherent to a technology.


Strategy – Develop arguments Identify the objective(s) of the invention and the points of novelty

(inventive concept).

Now, look at the asserted judicial exception(s), develop arguments and amend the claims (if necessary).

Initially: Did the examiner establish a prima facie case? Under Step 2A proper § 101 rejection should cite a court case in which a similar abstract

idea was identified and explain why that abstract idea corresponds to the abstract idea in the claim. (See USPTO May 2016 Interim Eligibility Guidance Update at p. 6)


Strategy – Develop arguments• Step 2A: Is the (amended) claim directed to the purported

abstract idea?

• The “directed to” inquiry applies a stage-one filter to the claims, considered in light of the specification, based on whether their character as a whole is directed to excluded subject matter.” (Enfish)

• “It is not enough to merely identify a patent-ineligible concept underlying the claim; we must determine whether that patent-ineligible concept is what the claim is ‘directed to.’” (Rapid Litig. Mgmt. Ltd. v. Cellzdirect, Inc. (Fed. Cir. 2016))

• The examiner’s characterization of the claim cannot be at “a high level of abstraction” and “untethered from the language of the claims.” (Enfish)


Strategy – Develop arguments Step 2A: Are claims directed to an improvement of a computer

functionality or computer related technology? Step 2A: Does it solve a problem particular to or rooted in

Internet/computer-related technology? Can the invention be framed as one of these?

• Does it solve a problem arising out of the technology? (DDR Holdings)• Is it directed to an improvement of an existing technology? (Enfish)• Is the solution implemented via technology? • If computers are used, does the claimed invention improve the computer, computer-functionality, or a

computer-related technology? Or is the computer merely used as a tool to carry out the invention (e.g., a process implemented on the computer)? (See e.g., Alstom, slip op. pg. 8)

• If the later, then you may need to focus on a strong argument in Step 2B.

• Considering the objective of the invention, is this an objective that preexisted computers, but is improved because it is implemented on a computer?

• Using a computer to automate a task performed by a person may not be an improvement of the computer or an existing technology. (See e.g., Alice, Bilski, Gottschalk )


Strategy – Develop arguments Step 2B: The “significantly more” inquiry

We have described step two of this analysis as a search for an “ ‘inventive concept’”—i.e., an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” (Alice)

Identify at least 1 inventive concept (IC) as recited in the claims (amend to clarify if necessary) IC should not be a well-understood, routine, or conventional step or element

USPTO Guidance (May 4, 2016): not “widely prevalent” alone or in combination with other additional elements

A single 102-reference cited against the IC element(s) does not imply “widely prevalent” Generally, IC should be consistent with your point(s) of novelty (a stronger argument)


Strategy – Develop arguments Step 2B: The “significantly more” inquiry – searching for an inventive concept (IC) Does claim recite unconventional steps? – Is the IC unconven’l in some way?

Show that the conventional approach to a problem addressed by the claimed invention (the IC) is different. Look for support in the specification See DDR Holdings – Modified Internet hyperlinks “override” the conventional operation of the Internet/hyperlinking. This is one of the strongest 101 arguments.

Does the claim recite (does the IC cover) a specific, particular implementation of a technology-based solution that overcomes a technological problem (a problem arising out of technology)?See BASCOM Global Internet Servs., Inc. v. AT&T Mobility LLC, (Fed. Cir. 2016). “The [Bascom patent] is instead claiming a technology based solution (not an abstract-idea-based solution implemented with

generic technical components in a conventional way) to filter content on the Internet that overcomes existing problems with other Internet filtering systems.”

“The claims do not merely recite the abstract idea … along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components. Such claims would not contain an inventive concept. See CyberSource Corp. … (reasoning that the use of the Internet to verify a credit card transaction does not meaningfully add to the abstract idea of verifying the transaction). Nor do the claims preempt all ways of filtering content on the Internet; rather, they recite a specific, discrete implementation of the abstract idea of filtering content.”


Strategy – Develop arguments Typical Scenario: Examiner rejects claims under § 101, asserts the entire claim is the AI, cites a list of

marginally relevant cases to support his/her conclusion. Suggested Response Strategy:

1) Realize that there can be disagreement on Step 2A (whether the claims are directed to an abstract idea). Make your case, but there’s no need to win this battle.

High level of inconsistency (and arguably error) by examiners around properly identifying AIs and citing relevant cases to support findings.

TC 3600 typically better because more experience and special training. Other art units not as prepared to handle.

2) Focus on Step 2B. Look to the PTO Guidance regarding what constitutes “significantly more”

3) Use the example indicators of “significantly more” to distinguish your claims from the cited cases. Show that the example indicators of “significantly more” are not present in the cited cases (because these claims cover

only the abstract idea and conventional elements). But in contrast, your claims still have other elements that must be considered and align with one or more of the example indicators of “significantly more.”


More Strategy • When determining an AI, try to keep it simple, readily recognizable

– Business/economic practices, organizing information are suspect• Overwhelming number of AIs and ineligible decisions in these categories

• Avoid confusing §101 with §§ 112, 103 when applying the framework

• When prosecuting, ensure claims recite an inventive concept (IC)– Often helpful when IC is consistent with your 103/103 position (if you have one)

• When drafting:– Emphasize innovation, try to characterize invention as a technically implemented

solution to a problem rooted in technology – Include detailed description of ICs– Draft claims with objective and IC in mind


PTAB Decisions – Example 1 (Ex parte Barous 8/1/16)

Example Claim: 14. A system for distributing third-party coupons by a retailer on the Internet, the Internet including a computer with a

monitor and a printer, the third-party coupons being associated with goods or services of a third-party retailer, which goods or services are unrelated to the goods or services of the retailer and wherein the third-party retailer purchases advertising from the retailer, the system comprising: a server configured to: cause a graphical user interface (GUI) to be displayed on the monitor; display an advertisement associated with a third-party coupon of the third-party retailer; display a threshold value in the GUI; calculate a value of a transaction based on a purchase of goods or services made from the retailer by a consumer; display the value of the transaction in the GUI; and enable the computer to print the third-party coupon when the value of the transaction exceeds the threshold value; wherein the third-party coupon is redeemable for the goods or services of the third-party retailer; and wherein goods or services of the third-party retailer are unrelated to the goods or services sold by the retailer and therefore are unpurchaseable from the retailer.


PTAB Decisions – Example 1 (Ex parte Barous 8/1/16) • Examiner position:

• Step 2A: The claimed invention is directed to distributing coupons by a retailer for the purpose of enhancing revenue, which is a FEP that employs mathematical relationships / formulas (algorithms) to achieve this outcome.

• Step 2B: The steps performed by the claims are not enough to qualify as significantly more and instead are a mere instruction to apply the abstract idea.

• Applicant’s argument: • Step 2B: The claims recite unconventional steps (IC) of configuring retailer's POS register to

print a coupon for the purchase of a third-party retailer’s unrelated goods or services. This enhances the primary retailer's revenue because the shopper increases his or her purchase from the retailer in order to receive discount coupons for a third-party retailer.

• Examiner’s analysis ignores these additional features of the claim


PTAB Decisions – Example 1 (Ex parte Barous 8/1/16) • PTAB Eligibility Analysis (decided at step 2B):

• Step 2A: Appellant’s claims are not directed to the “abstract idea” as defined by the Examiner.• Third-party related limitations clearly narrow the claims so that they do not preempt the

“abstract idea” defined by the Examiner.

• Claims directed to more limited systems and methods distributing only coupons redeemable at a third-party retailer for goods that were unpurchaseable at the issuing retailer and/or are unrelated to the goods or services offered by the issuing retailer, and then only upon the occurrence of certain conditions.

• Step 2B: Claims recite specific limitations other than what is well understood, routine and conventional in the field, or adding unconventional steps that confine the claim to a particular useful application.”


PTAB Decisions – Example 2 (Ex parte Kanada 8/31/16) Example Claim: 21. A clinical information processing method, the method comprising:

[1] accessing a memory device which stores a clinical information database, and obtaining from the clinical information database: [a] registration case information for calculating a likelihood ratio …; and [b] registration case information for calculating a degree of similarity …; [2] in a processing apparatus comprising a target case obtainment unit and a display control unit, obtaining [a classification];[3] calculating … a likelihood ratio, likelihood ratio information for each combination …; [4] calculating, for each of the combinations, values in such a manner …; [5] specifying, based on the determined weighting coefficient information, the weighting coefficient …, and [6] calculating a degree of similarity …; [7] extracting, …, [8] retrieving the similar case information …; [9] outputting the retrieved similar case information to the display control unit; and [10] displaying the similar case information on a display device which is controlled by the display control unit of the processing apparatus.


• Examiner position: • Step 2A: Claims are directed to the abstract idea of calculating a degree of similarity, which

has been determined to be a mathematical relationship and are also directed to the abstract idea of comparing new and stored information and using rules to identify options.

• Step 2B: The claims do not amount to significantly more than the underlying abstract ideas

• PTAB Analysis (decided at step 2A): • Examiner’s determination of the abstract idea under the first step of the Alice inquiry is

unfounded. The Examiner’s assertions lack any analysis or reasoning, and the Examiner has not shown that the claimed method merely describes the concept of calculating a degree of similarity through mathematical relationships.

• The claim as a whole does not seek to “tie up” a mathematical relationship for calculating a degree of similarity nor is the claim directed to comparing new and stored information and using rules to identify options.

PTAB Decisions – Example 2 (Ex parte Kanada 8/31/16)


PTAB – Other Helpful Decisions

• Ex parte Kahn (9/14/16)

• Ex parte Ismail (7/1/16)

• Ex parte Borer (8/1/16)

• Ex parte Scott (3/12/15) (GUI)

• Ex parte Ravenel (4/1/16) (mental processes)


Strategy from example DC Decisions• When determining the AI, consider the focus of the claim as a whole

– POWERbahn, LLC v. Foundation Fitness, LLC et al, 3-15-cv-00327 (NVD)

• Claim directed at a piece of exercise equipment

• Defendant argued claim as a whole is drawn to laws of nature, specifically focusing on the haptic equation included in the last line of the claim.

• Defendants' motion for judgment on the pleadings denied.

– Although it includes the haptic equation formula, the claim is clearly directed at a piece of exercise equipment.


Strategy from example DC Decisions• Ensure your AI analogies are accurate and preferably simple

– Core Wireless Licensing SARLl v. LG Electronics, Inc. et al, 2-14-cv-00911 (TXED)

• Claim directed to an improvement on an existing type of 'traffic metering' in the wireless network

• Magistrate Judge recommended Defendants' MSJ denied.

– “While there are some parallels between [defendant's] freeway onramp analogy and claim 21, the claim is manifestly narrower than 'traffic metering' and does not cover what happens at a freeway onramp.”


Strategy from example DC Decisions• Don’t ignore key claim elements when determining the AI

– Intellectual Ventures I LLC et al v. J Crew Group, Inc., 6-16-cv-00196 (TXED)

• Claims cover the combined use of nonpredictable bar codes with transaction information

• Defendant argued patent is directed toward the abstract idea of retrieving a transaction record, dismissed nonpredictable barcode because it was known in the art.

• Defendants' motion to dismiss denied.

– Defendant dismissed nonpredictable barcode because it was known in the art, but claimed invention lies in the combined use of the nonpredictable barcodes with transaction information.

February 23, 2017 Lawyers Association of KC ‐ IP CLE 47February 23, 2017 Lawyers Association of KC ‐ IP CLE 47

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