Ex parte Aydin

Ex parte BURCU AYDIN and MICHAEL TAMIR Technology Center 3600

Appeal 2017-010858

Application 14/084, 903

United States Patent and Trademark Office, Patent Trial and Appeal Board

January 28, 2019

FILING DATE: 11/20/2013

Before JEAN R. HOMERE, ADAM J. PYONIN, and DAVID J. CUTITTAII Administrative Patent Judges.

DECISION ON APPEAL

HOMERE, Administrative Patent Judge

Appellants appeal under 35 U.S.C. § 134(a) from a Final Rejection of claims 1-4 and 6-19, which constitute all claims pending in this application.^[1] App.Br.l. Claim 5 has been canceled. Claims App'x. We have jurisdiction under 35 U.S.C. § 6(b).

We affirm.

Introduction

According to Appellants, the claimed subject matter relates to an electronic commerce (e-commerce) website (30) including a classifier (33) for clustering customers (20) exhibiting similar purchasing habits (38) and demographic data (39) so as to provide tailored services (35) to each customer (20) based on a derived generalization associated with the cluster to which the customer (20) is assigned. Spec. ¶¶ 1, 20, 22-24, Fig. 1.

Representative Claim

Independent claim 1 is representative, and reads as follows:

1. A computer-implemented method, comprising: iteratively splitting a plurality of customers into a plurality of clusters based on purchase history data and demographic data for the plurality of customers, wherein each iteration comprises selecting a cluster of customers and splitting the selected cluster until a stopping rule is satisfied; and

tailoring services provided to a customer based on a cluster from the plurality of clusters in which the customer resides.

Rejection on Appeal

Claims 1-4 and 6-19 stand rejected under 35 U.S.C. § 101 as being directed to patent-ineligible material. Final Act. 5-9.

ANALYSIS^[2]

An invention is patent-eligible if it claims a "new and useful process, machine, manufacture, or composition of matter." 35 U.S.C. § 101. However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include implicit exceptions: "[l]aws of nature, natural phenomena, and abstract ideas" are not patentable. E.g., Alice Corp. v. CLS Bank Int'l, 573 U.S 208, 216(2014).

In determining whether a claim falls within an excluded category, we are guided by the Supreme Court's two-step framework, described in Mayo and Alice. Id. at 217-18 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 75-77 (2012)). In accordance with that framework, we first determine what concept the claim is "directed to." See Alice, 573 U.S. at 219 ("On their face, the claims before us are drawn to the concept of intermediated settlement, i.e., the use of a third party to mitigate settlement risk."); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010) ("Claims 1 and 4 in petitioners' application explain the basic concept of hedging, or protecting against risk.").

Concepts determined to be abstract ideas, and thus patent ineligible, include certain methods of organizing human activity, such as fundamental economic practices (Alice, 573 U.S. at 219-20; Bilski, 561 U.S. at 611); mathematical formulas (Parker v. Flook, 437 U.S. 584, 594-95 (1978)); and mental processes (Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts determined to be patent eligible include physical and chemical processes, such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 192 (1981)); "tanning, dyeing, making waterproof cloth, vulcanizing India rubber, smelting ores" (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S. 252, 267-68 (1854))); and manufacturing flour (Benson, 409 U.S. at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).

In Diehr, the claim at issue recited a mathematical formula, but the Supreme Court held that "[a] claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula." Diehr, 450 U.S. at 187; see also id. at 191 ("We view respondents' claims as nothing more than a process for molding rubber products and not as an attempt to patent a mathematical formula."). Having said that, the Supreme Court also indicated that a claim "seeking patent protection for that formula in the abstract... is not accorded the protection of our patent laws, . . . and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment." Id. (citing Benson and Flook); see, e.g., id. at 187 ("It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.").

If the claim is "directed to" an abstract idea, we turn to the second step of the Alice and Mayo framework, where "we must examine the elements of the claim to determine whether it contains an '"inventive concept'" sufficient to 'transform' the claimed abstract idea into a patent-eligible application." Alice, 573 U.S. at 221. "A claim that recites an abstract idea must include 'additional features' to ensure 'that the [claim] is more than a drafting effort designed to monopolize the [abstract idea].'" Id. (alterations in original) (quoting Mayo, 566 U.S. at 77). "[M]erely requiring] generic computer implementations fail[s] to transform that abstract idea into a patent-eligible invention." Id.

The PTO recently published revised guidance on the application of § 101. USPTO's January 7, 2019 Memorandum, 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 ("Memorandum"). Under that guidance, the office first looks to whether the claim recites:

(1)any judicial exceptions, including certain groupings of abstract ideas (i.e., mathematical concepts, certain methods of organizing human interactions such as a fundamental economic practice, or mental processes); and

(2)additional elements that integrate the judicial exception into a practical application (see MPEP § 2106.05(a)-(c), (e)-(h).

Only if a claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application, does the office then look to whether the claim:

(3)adds a specific limitation beyond the judicial exception that are not "well-understood, routine, conventional" in the field (see MPEP § 2106.05(d)); or

(4)simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception.

Alice/Mayo Analysis, Step I (Abstract Idea)

Appellants do not dispute the Examiner's determination that claims 1- 4 and 6-19 are directed to the abstract idea of "classifying or grouping customers." App. Br. 10-11; Reply Br. 4. According to Appellants, to the extent the claims are directed to an abstract idea, they also involve a particular solution, a practical embodiment that implements how to analyze customer data to tailor services to customers based on such analysis. App. Br. 13-15.

This argument is not persuasive. As an initial matter, we note the method of independent claim 1 recites, inter alia, "tailoring services provided to a customer based on a cluster from the plurality of clusters in which the customer resides." Appellants' Specification indicates that tailoring services to customers based on identified clusters of customers' purchasing habits pertains to providing targeted advertisements to customers based on clusters derived from similar purchasing habits of observed customers. Spec. ¶ 23. Accordingly, the claimed recitation is directed to a method of organizing human activities, a judicial exception involving commercial interaction in an ecommerce environment, wherein a business owner markets targeted advertisements to a customer based on observed purchasing habits of the customer as assigned to a relevant one of a plurality of clusters. Further, the claim does not integrate the noted judicial exception into a practical application. In particular, the claim does not recite an additional element reflecting an improvement in the functioning of a computer, or an improvement to other technology or technical field. See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1258-69 (Fed. Cir. 2014). Nor does the claim recite an additional element that implements the abstract idea with a particular machine or manufacture that is integral to the claim. Instead, the claim limitations only recite additional elements that add insignificant extra-solution activity to the judicial exception. See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011). Our reviewing court has consistently held that mere characterizations of human activities within the stream of commerce are not patent eligible. See, e.g., Elec. Power Grp. v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016) (claims directed to collection, manipulation, and display of data); Intellectual Ventures ILLC v. Capital One Bank (USA), 792 F.3d 1363, 1370 (Fed. Cir. 2015) (customizing information and presenting it to users based on particular characteristics). Prior to the Internet, such activities were widely practiced, and became computerized with the assistance of human administrators to facilitate the processing of claim submissions. See OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1364 (Fed. Cir. 2015).

Alice/Mayo Analysis, Step II (Significantly More than Abstract Idea)

Appellants argue that the claims recite significantly more than the abstract idea of "classifying or grouping customers." App. Br. 10-11. In particular. Appellants argue that the claims are sufficiently narrow to avoid preempting the entire field of "classifying or grouping customers" thereby addressing a particular solution to a specific problem, as opposed to precluding all other solutions thereto. App. Br. 11-15 (citing Virginia Innovation^[3] McRO, ^[...