Ex Parte Garcia-Martinez et al

Patent Trial and Appeal Board

Nov 7, 2018

13764750 (P.T.A.B. Nov. 7, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO.
13/764,750
87851 7590
Facebook/Fenwick
FILING DATE
02/11/2013
11/09/2018
Silicon Valley Center
801 California Street
Mountain View, CA 94041
FIRST NAMED INVENTOR
Antonio Felipe Garcia-Martinez
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www .uspto.gov
ATTORNEY DOCKET NO. CONFIRMATION NO.
26295-21346/US 1024
EXAMINER
MUNSON, PATRICIA H
ART UNIT PAPER NUMBER
3622
NOTIFICATION DATE DELIVERY MODE
11/09/2018 ELECTRONIC
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address(es):
ptoc@fenwick.com
fwfacebookpatents@fenwick.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ANTONIO FELIPE GARCIA-MARTINEZ and MARK RABKIN
Appeal2017-009681
Application 13/764,750
Technology Center 3600
Before ROBERT E. NAPPI, JAMES W. DEJMEK, and
STEVEN M. AMUNDSON, Administrative Patent Judges.
AMUNDSON, Administrative Patent Judge.
DECISION ON APPEAL
Appellants 1 seek our review under 35 U.S.C. § 134(a) from a final
rejection of claims 1---6 and 9--14, i.e., all pending claims. We have
jurisdiction under 35 U.S.C. § 6(b ).
We affirm.
STATEMENT OF THE CASE
The Invention
According to the Specification, the "invention relates generally to
advertising, and in particular to real-time bidding for advertising impressions
1 Appellants identify the real party in interest as Facebook, Inc. App. Br. 1.
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Application 13/764,750
in social networking and other online systems." Spec. ,r 1. 2 The
Specification explains that "[ a ]dvertisers may bid in real-time on
advertisement presentation if the online system determines the expected
revenue to the online system from real-time bids is above a threshold value,"
and "[ t ]he expected revenue may be determined based on a probability
distribution [ ofJ bids previously placed by advertisers for presenting
advertisements to the user or to users with similar characteristics as the
user." Id. Abstract; see id. ,r 4.
Exemplary Claim
Independent claim 1 exemplifies the claims at issue and reads as
follows:
1. A method comprising:
accessing historical bid information received at an online
system from a plurality of advertisers, the historical bid
information received from an advertiser describing bids
previously received from the advertiser for presenting
advertisements to one or more users of the online system and
bid values of the bids previously received from the advertiser;
determining using the accessed historical bid
information, a probability distribution of bid values from the
plurality of advertisers, the probability distribution indicating
probabilities of receiving bids from the advertisers at different
bid values;
2 This decision uses the following abbreviations: "Spec." for the
Specification, filed February 11, 2013; "Final Act." for the Final Office
Action, mailed October 8, 2015; "App. Br." for the Appeal Brief, filed
August 3, 2016; "Ans." for the Examiner's Answer, mailed May 4, 2017;
and "Reply Br." for the Reply Brief, filed July 5, 2017.
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determining, based on the probability distribution of bid
values, an expected revenue for the online system from real-
time receipt of bids for presenting an advertisement to a user of
the online system to fill an opportunity to advertise to the user;
comparing by the online system, the expected revenue to
a threshold value;
responsive to the comparison indicating the expected
revenue exceeds the threshold value, requesting real-time bids
from one or more of the advertisers for advertisements to fill
the opportunity to advertise to the user of the online system;
receiving one or more real-time bids from the one or
more advertisers for presenting an advertisement to the user to
fill the opportunity; and
selecting the advertisement to fill the opportunity based
on the received bids from the one or more of the advertisers.
App. Br. 21-22 (Claims App'x).
The Prior Art Supporting the Rejections on Appeal
As evidence ofunpatentability under 35 U.S.C. § I03(a), the
Examiner relies on the following prior art:
McElfresh et al.
Cunningham et al.
US 6,907,566 Bl June 14, 2005
US 2010/0241511 Al Sept. 23, 2010
The Rejections on Appeal
Claim 1 stands provisionally rejected on the ground of nonstatutory
double patenting as unpatentable over claim 7 of copending Application
13/789,463. Final Act. 3.
Claims 1-6 and 9-14 stand rejected under 35 U.S.C. § 101 as directed
to patent-ineligible subject matter. Final Act. 3--4.
Claims 1-6 and 9-14 stand rejected under 35 U.S.C. § I03(a) as
unpatentable over Cunningham and McElfresh. Final Act. 5-15.
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ANALYSIS
We have reviewed the rejections in light of Appellants' arguments
that the Examiner erred. For the reasons explained below, we disagree with
Appellants' assertions regarding Examiner error and concur with the
Examiner's conclusions concerning ineligibility under § 101 and
unpatentability under§ 103(a). We adopt the Examiner's findings and
reasoning in the Final Office Action and Answer. See Final Act. 3-16;
Ans. 2-7. We add the following to address and emphasize specific findings
and arguments.
The Provisional Double-Patenting Rejection of Claim 1
Appellants do not present arguments about the provisional double-
patenting rejection. App. Br. 6. We decline to reach the provisional
rejection as the issues are not ripe for decision. See Ex parte Moncla,
95 USPQ2d 1884, 1885 (BP AI 2010) (precedential); see also Ex parte Jerg,
No. 2011-000044, 2012 WL 1375142, at *3 (BPAI Apr. 13, 2012)
(informative).
The§ 101 Rejection of Claims 1-6 and 9-14
INTRODUCTION
The Patent Act defines patent-eligible subject matter broadly:
"Whoever invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and useful improvement
thereof, may obtain a patent therefor, subject to the conditions and
requirements of this title." 35 U.S.C. § 101. In Mayo Collaborative
Services v. Prometheus Laboratories, Inc., 566 U.S. 66, 70 (2012), and Alice
Corp. v. CLS Bank International, 134 S. Ct. 2347, 2354 (2014), the Supreme
Court explained that § 101 "contains an important implicit exception" for
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laws of nature, natural phenomena, and abstract ideas. See Diamond v.
Diehr, 450 U.S. 175, 185 (1981 ). In Mayo and Alice, the Court set forth a
two-step analytical framework for evaluating patent-eligible subject matter:
First, "determine whether the claims at issue are directed to" a patent-
ineligible concept, such as an abstract idea. Alice, 134 S. Ct. at 2355. If so,
"consider the elements of each claim both individually and 'as an ordered
combination' to determine whether the additional elements" add enough to
transform the "nature of the claim" into "significantly more" than a patent-
ineligible concept. Id. at 2355, 2357 (quoting Mayo, 566 U.S. at 79).
Step one in the Mayol Alice framework involves looking at the "focus"
of the claims at issue and their "character as a whole." Elec. Power Grp.,
LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016); Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). Step two involves
the search for an "inventive concept." Alice, 134 S. Ct. at 2355; Elec.
Power, 830 F.3d at 1353. An "inventive concept" requires more than "well-
understood, routine, conventional activity already engaged in" by the
relevant community. Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F .3d
1042, 1047 (Fed. Cir. 2016) (quoting Mayo, 566 U.S. at 79-80). But "an
inventive concept can be found in the non-conventional and non-generic
arrangement of known, conventional pieces." BASCOM Global Internet
Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1350 (Fed. Cir. 2016).
Under step two, "an inventive concept must be evident in the claims."
RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1327 (Fed. Cir. 2017).
A PRIMA F ACIE CASE OF INELIGIBILITY
Appellants note that the PTO "has issued various guidance for
evaluating applications for patent subject matter eligibility," including the
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"2014 Interim Guidance on Patent Subject Matter Eligibility," 79 Fed. Reg.
74,618 (Dec. 16, 2014) ("2014 Guidance"), and the "July 2015 Update:
Subject Matter Eligibility" ("2015 Update"). App. Br. 6-7. Based on the
2014 Guidance and the 2015 Update, Appellants assert that "a proper
identification of a judicial exception must be similar to at least one concept
previously identified by the courts." Id. at 8. Appellants then contend that
"the examiner has not identified how the present claims are similar to the
methods of organizing human activity or fundamental economic practices
previously identified by the courts and set forth in" the 2014 Guidance and
the 2015 Update. Id.; see Reply Br. 7-8. Appellants urge that "the
Examiner has further erred by not addressing the[] different and additional
limitations" in independent claim 6 and dependent claims 2-5 and 9-14.
App. Br. 17; see Reply Br. 15. Also, Appellants fault the Examiner for a
"conclusory analysis" based on "conclusory statements." App. Br. 8-9; see
Reply Br. 7-8, 10.
Appellants' arguments do not persuade us of Examiner error. A May
2016 Federal Register notice explains that the PTO's § 101 guidance
materials "were developed as a matter of internal Office management," "do
not constitute substantive rulemaking," "do not have the force and effect of
law," and instead "set out examination policy" regarding § 101 rejections.
81 Fed. Reg. 27,381, 27,382 (May 6, 2016). The 2014 Guidance includes a
similar explanation. 79 Fed. Reg. at 74,619. The May 2016 notice also
explains that "[ r ]ejections will continue to be based upon the substantive
law, and it is these rejections that are appealable." 81 Fed. Reg. at 27,382;
see 79 Fed. Reg. at 74,619. Thus, an Examiner's failure to follow the§ 101
guidance materials is appealable only to the extent there has been a failure
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follow statutory or decisional law. If the guidance materials exceed
statutory or decisional law with additional restrictions, an Examiner's failure
to comply with those additional restrictions may warrant a petition to the
Director.
We conclude that the Final Office Action adequately explains the
§ 101 rejection. "[T]he prima facie case is merely a procedural device that
enables an appropriate shift of the burden of production." Hyatt v. Dudas,
492 F.3d 1365, 1369 (Fed. Cir. 2007) (citing In re Oetiker, 977 F.2d 1443,
1445 (Fed. Cir. 1992)). The "PTO carries its procedural burden of
establishing a prima facie case when its rejection satisfies" § 132 "in
'notify[ing] the applicant ... [by] stating the reasons for [its] rejection, or
objection or requirement, together with such information and references as
may be useful in judging of the propriety of continuing the prosecution of
[the] application."' In re Jung, 637 F.3d 1356, 1362 (Fed. Cir. 2011)
(alterations in original) (quoting 35 U.S.C. § 132). The PTO violates§ 132
"when a rejection is so uninformative that it prevents the applicant from
recognizing and seeking to counter the grounds for rejection." Chester v.
Miller, 906 F.2d 1574, 1578 (Fed. Cir. 1990). But if the PTO "adequately
explain[ s] the shortcomings it perceives ... the burden shifts to the applicant
to rebut the prima facie case with evidence and/or argument." Hyatt,
492 F.3d at 1370.
Here, for Mayo/Alice step one, the Examiner determines that the
claims are directed to abstract ideas, i.e., "coordination of real time bidding,"
"presenting of advertisements," "generation of probability distributions
using Gaussian techniques," and "targeted advertising." Final Act. 3--4, 15.
The Examiner explains that the abstract ideas involve "coordinating human
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activity, the fundamental business practice of marketing and the use of
mathematical equations and relationships." Id. at 3--4, 15. The Examiner
reasons that courts have decided that similar claims were directed to abstract
ideas. Id. at 15 ( citing Digitech Image Techs., LLC v. Elecs. for Imaging,
Inc., 758 F.3d 1344 (Fed. Cir. 2014); Cyberfone Sys., LLC v. CNN
Interactive Grp., Inc., 558 F. App'x 988 (Fed. Cir. 2014); SmartGene, Inc. v.
Advanced Biological Labs., SA, 555 F. App'x 950 (Fed. Cir. 2014)). Thus,
the Examiner (1) identifies the abstract-idea judicial exception rather than
the natural-phenomenon or law-of-nature judicial exception, (2) defines the
abstract ideas, and (3) cites court decisions to support the analysis.
Moreover, claim 14 depends from independent claim 6 and requires
"presenting the selected advertisement for display to the user." App. Br. 25
(Claims App'x). Among the claims at issue, only claim 14 requires
presenting an advertisement to a user. Id. at 21-25. Yet the Examiner
determines that the claims are directed to the abstract idea "presenting of
advertisements." Final Act. 3--4. Thus, the Examiner analyzes the
dependent claims as well as the independent claims when considering
whether the claims are directed to a judicial exception.
Further, for Mayo/Alice step two, the Examiner determines that the
"generically recited online system" requires "no more than a generic
computer to perform generic computer functions that are well-understood,
routine and conventional activities previously known to the industry." Final
Act. 15-16. The Examiner also determines that the additional elements do
not improve "the technical field that the abstract idea is applied," "any other
technical field," or "the functioning of the computer itself." Id. at 4, 15.
Accordingly, the Examiner reasons that the claims lack an "inventive
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concept" sufficient to transform them into significantly more than patent-
ineligible abstract ideas. Id. at 4, 15-16.
The Examiner's statements satisfy§ 132 because they apply the
Mayo/Alice analytical framework and apprise Appellants of the reasons for
the § 101 rejection under that framework. As discussed in more detail
below, Appellants recognize the Examiner's Mayo/Alice analysis and
present arguments addressing the merits of that analysis. See App. Br. 7-17;
Reply Br. 4--15.
MAYO/ALICE STEP ONE
Appellants assert that the claims are not directed to an abstract idea
because they "are limited to a particular method of determining whether to
request real-time bids to fill an advertising opportunity based on expected
revenue from the real-time bids." App. Br. 12. But "limiting an abstract
idea to one field of use" does not impart patent eligibility. See Bilski v.
Kappas, 561 U.S. 593, 612 (2010); see also Parker v. Flook, 437 U.S. 584,
589-90 (1978); Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d
1253, 1259 (Fed. Cir. 2016). "[A] claim is not patent eligible merely
because it applies an abstract idea in a narrow way." BSG Tech LLC v.
BuySeasons, Inc., 899 F.3d 1281, 1287 (Fed. Cir. 2018).
Here, the claims cover data collection, manipulation, and display.
App. Br. 21-25 (Claims App'x); see Final Act. 15; Ans. 3. The Federal
Circuit has ruled that claims covering data collection, manipulation, and
display were directed to abstract ideas. See, e.g., SAP Am., Inc. v. InvestPic,
LLC, 898 F.3d 1161, 1164--67 (Fed. Cir. 2018); Secured Mail Sols. LLC v.
Universal Wilde, Inc., 873 F.3d 905, 907---08, 910-11 (Fed. Cir. 2017);
Credit Acceptance Corp. v. Westlake Servs., 859 F.3d 1044, 1047, 1054--56
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& n.6 (Fed. Cir. 2017); RecogniCorp, 855 F.3d at 1324, 1326-27;
Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332,
1339-41 (Fed. Cir. 2017); Elec. Power, 830 F.3d at 1351-54; OIP Techs.,
Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1361-63 (Fed. Cir. 2015).
"A process that start[ s] with data, add[ s] an algorithm, and end[ s] with a new
form of data [is] directed to an abstract idea." RecogniCorp, 855 F.3d
at 1327.
Moreover, the claims recite a series of steps for auctioning advertising
space for targeted advertisements. App. Br. 21-25 (Claims App'x); see
Spec. ,r,r 4, 13, 29, 31-32, 39-41, 55-68, 75, Fig. 7; Reply Br. 11. The
claimed series of steps resembles the claimed "series of steps instructing
how to hedge risk" in a commodities market in Bilski. See 561 U.S. at 599.
In Alice, the Supreme Court explained that the claims in Bilski concerned a
method of organizing human activity. Alice, 134 S. Ct. at 2356; see also
Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363,
1367 (Fed. Cir. 2015) (deeming the claim at issue "not meaningfully
different from the ideas found to be abstract in other cases before the
Supreme Court and our court involving methods of organizing human
activity").
Appellants contend that a fundamental economic practice must be
"long known and long prevalent" as shown by evidence. App. Br. 10. That
contention does not persuade us of examiner error. Auctions have been
"long known and long prevalent." See, e.g., Heber Leonidas Hart, Auctions
and Auctioneers, 2 ENCYCLOPJEDIA BRITANNICA 895 (11th ed. 1910).
Targeted advertising and the "tailoring of content based on information
about the user-such as where the user lives or what time of day the user
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views the content-is an abstract idea that is as old as providing different
newspaper inserts for different neighborhoods." Affinity Labs of Tex., LLC
v. Amazon.com Inc., 838 F.3d 1266, 1271 (Fed. Cir. 2016).
Additionally, in OIP Technologies, Inc. v. Amazon.com, Inc., the
claims concerned offer-based price optimization, and a representative claim
required "(1) testing a plurality of prices; (2) gathering statistics generated
about how customers reacted to the offers testing the prices; (3) using that
data to estimate outcomes ... ; and ( 4) automatically selecting and offering a
new price based on the estimated outcome." OIP Techs., 788 F.3d at
1361---62. The Federal Circuit concluded that "the claims describe[d] the
automation of the fundamental economic concept of offer-based price
optimization through the use of generic-computer functions." Id. at 1363.
In reaching that conclusion, the Federal Circuit did not cite any evidence
other than the patent in suit and its prosecution history. Id. at 1360---63.
Similarly, in Credit Acceptance Corp. v. Westlake Services, the Federal
Circuit did not cite any evidence other than the patent at issue when deciding
that claims covering "processing an application for financing a purchase"
involved a fundamental economic practice. Credit Acceptance, 859 F.3d
at 1054--55.
Appellants assert that the Examiner erred under Mayo/Alice step one
because the Examiner did not identify "any specific claim limitations"
reciting the abstract ideas and then analyze them separately from the
limitations "not reciting the judicial exception but as failing to provide an
inventive application of the idea." App. Br. 12. That assertion does not
persuade us of examiner error. For Mayo/Alice step one, the Examiner
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accurately assesses the "focus" of the claims and their "character as a
whole." Final Act. 3--4, 15; Ans. 3; see Elec. Power, 830 F.3d at 1353.
Appellants urge that "'the use of mathematical equations and
relationships,' and more specifically the involvement of Gaussian techniques
in a single step of the claim, is not sufficient to establish the claims as being
patent-ineligible." App. Br. 11. But the Examiner's analysis does not rest
on only "the use of mathematical equations and relationships." Final Act.
3--4, 15; Ans. 3. The Examiner explains that the abstract ideas encompassed
by the claims also involve "coordinating human activity, [and] the
fundamental business practice of marketing." Final Act. 3--4. Adding
abstract ideas together "does not render the claim[s] non-abstract."
RecogniCorp, 855 F.3d at 1327; see also FairWarning IP, LLC v. Iatric Sys.,
Inc., 839 F.3d 1089, 1093-94 (Fed. Cir. 2016) (determining that the claims
were directed to a combination of abstract ideas).
Appellants contend that the claims here "like the claims in McRO do
not generically recite an abstract result, or simply automate any existing
human process," but instead "are directed to a very specific computer-
implemented process." Reply Br. 6-7 (citing McRO, Inc. v. Bandai Namco
Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016)). Appellants misplace their
reliance on McRO.
The claims in McRO--unlike the claims here-recited a "specific ...
improvement in computer animation" using "unconventional rules" that
related "sub-sequences of phonemes, timings, and morph weight sets" to
automatically animate lip synchronization and facial expressions for three-
dimensional characters that only human animators could previously produce.
McRO, 837 F.3d at 1302---03, 1307---08, 1313-15. In McRO, "the
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incorporation of the claimed rules" improved an existing technological
process. Id. at 1314.
In contrast to the claims in McRO, the claims here do not improve an
existing technological process. See Alice, 134 S. Ct. at 2358 (explaining that
"the claims in Diehr were patent eligible because they improved an existing
technological process"); see also Final Act. 4, 15; Ans. 4. Instead, the
claims concern auctioning advertising space for targeted advertisements.
App. Br. 21-25 (Claims App'x); see Spec. ,r,r 4, 13, 29, 31-32, 39-41, 55-
68, 75, Fig. 7; Reply Br. 11. Rather than reciting "unconventional rules,"
the claims require evaluating the expected revenue from a real-time auction
vis-a-vis a specified criterion, i.e., "a threshold value" in claim 1, "a clearing
price" in claim 2, and "a threshold amount above the clearing price" in
claim 6.
MAYO/ALICE STEP Two
Appellants contend that "when viewed as a whole, the claims clearly
do not tie up all possible ways of presenting recommendation units to a user
and are not directed to this idea, itself." App. Br. 13-14. That contention
does not persuade us of Examiner error. While preemption may denote
patent ineligibility, its absence does not demonstrate patent eligibility. See
FairWarning, 839 F.3d at 1098. For claims covering a patent-ineligible
concept, preemption concerns "are fully addressed and made moot" by an
analysis under the Mayo/Alice framework. Ariosa Diagnostics, Inc. v.
Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015); see Ans. 4.
As additional elements, the claims expressly recite an "online system"
and implicitly require a processor, a memory, and a display. App. Br. 21-25
(Claims App'x). The Examiner determines that the "generically recited
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online system" requires "no more than a generic computer to perform
generic computer functions that are well-understood, routine and
conventional activities previously known to the industry." Final Act. 15-16;
Ans. 4--5.
Consistent with that determination, the Specification describes the
"online system" and its computer components generically. See, e.g., Spec.
,r,r 21-22, 83-84. For example, the Specification explains that "[t]he
network 110 is typically the Internet, but may be any communication
pathway, such as a local area network (LAN), a metropolitan area network
(MAN), a wide area network (WAN), a mobile wired or wireless network, a
private network, or a virtual private network." Id. ,r 21. The Specification
also explains that "[t]he client device 102 may be a desktop computer, laptop
computer, portable computer, personal digital assistant (PDA), smart phone,
or any other device including computing functionality and data
communication capabilities." Id. ,r 22. The Specification does not describe
an unconventional arrangement of any conventional computer components.
In addition, court decisions have recognized that conventional
computer components operating to collect, manipulate, and display data are
well understood, routine, and conventional to a skilled artisan. See, e.g.,
Alice, 134 S. Ct. at 2360; SAP Am., 898 F.3d at 1164--65 & n.1, 1170;
Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318-20
(Fed. Cir. 2016); Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306,
1334 (Fed. Cir. 2015); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709,
715-16 (Fed. Cir. 2014); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350,
1355 (Fed. Cir. 2014); Cyberfone Sys., LLC v. CNN Interactive Grp., Inc.,
558 F. App'x 988, 993 (Fed. Cir. 2014).
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Appellants assert that the claims "are analogous to the claims at issue
in the DDR Holdings case." App. Br. 15 (citing DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014)); Reply Br. 13. DDR
Holdings does not help Appellants.
In DDR Holdings, the Federal Circuit determined that certain claims
satisfied Mayol Alice step two because "the claimed solution amount[ ed] to
an inventive concept for resolving [a] particular Internet-centric problem,"
i.e., a challenge unique to the Internet. DDR Holdings, 773 F.3d at 1257-59;
see Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir.
2016) (noting that "[i]n DDR Holdings, we held that claims 'directed to
systems and methods of generating a composite web page that combines
certain visual elements of a 'host' website with content of a third-party
merchant' contained the requisite inventive concept"). The Federal Circuit
explained that the patent-eligible claims specified "how interactions with the
Internet are manipulated to yield a desired result ... that overrides the
routine and conventional sequence of events ordinarily triggered by the click
of a hyperlink." DDR Holdings, 773 F.3d at 1258. The court reasoned that
those claims recited a technological solution "necessarily rooted in computer
technology" that addressed a "problem specifically arising in the realm of
computer networks." Id. at 1257.
The claims here do not address a similar problem and do not contain a
similar inventive concept as the patent-eligible claims in DDR Holdings.
See App. Br. 21-25 (Claims App'x); Ans. 4--5. Instead, the claims concern
auctioning advertising space for targeted advertisements. App. Br. 21-25
(Claims App'x); see Spec. ,r,r 4, 13, 29, 31-32, 39-41, 55---68, 75, Fig. 7;
Reply Br. 11. Applying the abstract ideas encompassed by the claims to the
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particular technological environment of a network, e.g., the Internet, does
not suffice for patent eligibility. See Ultramercial, 772 F.3d at 712, 715-16.
"[T]he use of the Internet is not sufficient to save otherwise abstract claims
from ineligibility under § 101." Id. at 716; see Ans. 5 ( citing Ultramercial).
Appellants contend that "the claimed invention provides a technical
improvement to the computing processes associated with Internet
advertising, and therefore also constitutes 'significantly more' than merely
presenting advertisements via the Internet." App. Br. 14; see Reply Br. 10.
Specifically, Appellants assert that the claimed invention "uses less
bandwidth" and "decreases latency" when selecting an ad compared to prior-
art real-time bidding systems "by not requesting real-time bids each time an
ad space is accessed, while still maintaining the ability to selectively request
real-time bids" for an ad space. App. Br. 15; Reply Br. 3, 10-11, 17. But
the Specification does not describe reduced bandwidth or decreased latency
as an improvement over prior-art real-time bidding systems. Although the
Specification discusses an embodiment that compares the expected revenue
from a real-time auction to the revenue from a standard auction plus the
bandwidth price for the real-time auction, the Specification does not explain
how that embodiment improves over prior-art real-time bidding systems.
Spec. ,r 62; see id. ,r,r 2--4; App. Br. 14--15. Rather, the Specification
describes increased "revenue to the social networking system" as the
invention's advantage. Spec. ,r 4.
Further, unclaimed features do not support patent eligibility under
Mayo/Alice step two. See, e.g., Berkheimer v. HP Inc., 881 F.3d 1360,
1369-70 (Fed. Cir. 2018); Two-Way Media Ltd. v. Comcast Cable
Commc 'ns, LLC, 874 F.3d 1329, 1338-39 (Fed. Cir. 2017); Intellectual
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Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1331-32 (Fed. Cir.
2017). "[A]n inventive concept must be evident in the claims."
RecogniCorp, 855 F.3d at 1327.
Here, however, independent claims 1 and 6 do not specify what
happens when the expected revenue from a real-time auction fails to satisfy
the evaluation criterion. Also, claim 1 's evaluation criterion "a threshold
value" may correspond to "a clearing price" that does not account for the
bandwidth price for a real-time auction. App. Br. 21-22 (claims 1-2); see
Spec. ,r,r 4, 58, 66-68, 70. Further, claim 6's evaluation criterion "a
threshold amount above the clearing price" does not necessarily equal the
bandwidth price for a real-time auction. As for the dependent claims, in the
Appeal Brief Appellants do not argue patent eligibility separately for any
dependent claim. See App. Br. 6-17.
Appellants cite the "July 2015 Update Appendix 1: Examples"
("2015 Update App.") and assert that patent-eligible claim 4 in Example 23
resembles the claims here. App. Br. 11-12. In particular, Appellants
contend that the claimed invention "does not just recite a calculation, but
includes numerous steps that do not recite a calculation, and when
considered as [an] ordered combination, amount to significantly more than
any abstract idea that might be included." Id. at 11-12.
Appellants' arguments do not persuade us of Examiner error. The
claims here differ from claim 4 in Example 23 because claim 4 improves the
"basic display function of the computer itself." 2015 Update App. 12; see
Ans. 3--4. The claims here do not improve the "basic display function of the
computer itself' or any other function of the computer itself. See Final
Act. 4, 15; Ans. 4. Appellants do not describe an advance in hardware or
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software that, for example, causes a computer itself to operate faster or more
efficiently. Instead, Appellants rely on alleged improvements in network
performance, i.e., reduced bandwidth and decreased latency. See App.
Br. 14--15; Reply Br. 3, 10-11, 17.
Also, Appellants' arguments about the similarity of the claims here to
claim 4 in Example 23 undermine their arguments that the claims here are
not directed to abstract ideas. Claim 4 "is directed to an abstract idea."
2015 Update App. 11.
SUMMARY
For the reasons discussed above, Appellants' arguments have not
persuaded us of any error in the Examiner's findings or conclusions under
Mayo/Alice step one or step two. Hence, we sustain the§ 101 rejection of
claims 1-6 and 9-14.
The§ 103(a) Rejection of Claims 1-6 and 9-14
INDEPENDENT CLAIM 1: "REQUESTING
REAL-TIME Brns" RESPONSIVE TO A COMPARISON
Appellants argue that the Examiner erred in rejecting claim 1 because
Cunningham does not teach or suggest the following limitation in claim 1:
"responsive to the comparison indicating the expected revenue exceeds the
threshold value, requesting real-time bids from one or more of the
advertisers for advertisements to fill the opportunity to advertise to the user
of the online system." See App. Br. 17-20; Reply Br. 16-23. In particular,
Appellants contend that "in Cunningham, regardless of whether the
expected clearing price is greater than the publisher-specified reserve price,
the real-time bidding market conducts a real-time auction." App. Br. 18; see
Reply Br. 16-19. Appellants also contend that "Cunningham describes a
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method to optimize the reserve price (based on prior price reporting periods)
to maximize the price paid to the publisher, but ultimately, Cunningham still
conducts a real time auction regardless of whether the expected clearing
price is greater than the publisher-specified reserve price." App. Br. 19.
Further, Appellants assert that "Cunningham does not disclose any
conditions for conducting the real-time auction, whereas claim 1 recites
'requesting real time bids ... ' in response 'to the comparison indicating the
expected revenue exceeds the threshold value."' Reply Br. 17.
Appellants' arguments do not persuade us of Examiner error because,
as the Examiner explains, claim 1 "does not preclude an auction from being
conducted whether or not the expected clearing price is greater than the
publisher-specified reserve price." Ans. 6. Claim 1 uses the transitional
term "comprising." App. Br. 21 (Claims App'x). The transitional term
"comprising" is "inclusive or open-ended" and "does not exclude unrecited
elements." See Regeneron Pharm., Inc. v. Merus N. V., 864 F.3d 1343, 1352
(Fed. Cir. 2017) ( citing Manual of Patent Examining Procedure § 2111.03).
As noted above, claim 1 does not specify what happens when the expected
revenue from a real-time auction fails to satisfy the evaluation criterion.
Further, the Examiner correctly finds that Cunningham teaches or
suggests requesting real-time bids responsive to a comparison exceeding a
threshold value. See Final Act. 5, 16; Ans. 6. Specifically, Cunningham
discloses an online marketplace for ad space that "brings together content
publishers with an available inventory of ad space and advertisers who
desire to have display ads presented in the ad spaces" of the content
publishers. Cunningham ,r 15. The online marketplace includes a "real-time
bidding market" and "external markets," i.e., "one or more alternative
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markets, such as other ad networks or ad exchanges." Id. ,r,r 15-17, 22,
Fig. 1; see id. ,r 4. Those ad networks or ad exchanges may "use[] an
auction system." Id. ,r 6.
During selected periods, an ad market server tests a publisher-
established reserve price for the real-time bidding market by offering some
of the publisher's ad space "to advertisers participating in one or more
external markets to determine the price that the advertisers participating in
the external markets are willing to pay for the publisher's ad space."
Cunningham ,r,r 16-17, 34, 37, Abstract, Fig. 4. If advertisers are willing to
pay more than the publisher-established reserve price for the real-time
bidding market, the ad market server replaces that reserve price with "a
market reserve price that is based on an analysis of the results of the price
optimization process" for the external markets. Id. ,r,r 16-17, 34, 38, 46,
Abstract, Fig. 4. Additionally, the ad market server calculates the actual
average clearing price for each external market during prior periods and uses
that price to determine an expected clearing price for each external market in
the current period. Id. ,r,r 3 8-39. Then, in the current period, the ad market
server selects a winning bidder for the publisher's ad space by (1) selecting
an external market and (2) determining whether the expected clearing price
for the selected external market "exceeds the highest active bid from a
bidder in the real-time bidding market, whose bid exceeds the market
reserve price." Id. ,r 40, Fig. 4; see id. ,r 34. "If the highest active bid in the
real-time bidding market exceeds the expected clearing price" for the
selected external market, the real-time bidding market processes the
publisher's ad space. Id. ,r 40, Fig. 4. But "[i]f the expected clearing price
for the selected external market is higher than the highest active bid" in the
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real-time bidding market, the selected external market processes the
publisher's ad space. Id. ,r 40, Fig. 4.
Hence, Cunningham describes a comparison between the expected
clearing price for the selected external market and the highest active bid in
the real-time bidding market. Cunningham ,r,r 16, 34--40, 46, Fig. 4. The
highest active bid in the real-time bidding market corresponds to claim 1 's
"threshold value." See Final Act. 16; Ans. 6. If the expected clearing price
for the selected external market exceeds that "threshold value," the selected
external market processes publisher's ad space. Cunningham ,r 40, Fig. 4.
The selected external market may "use[] an auction system." Id. ,r 6.
Because the selected external market may "use[] an auction system,"
Cunningham teaches or suggests requesting real-time bids responsive to a
comparison exceeding a threshold value. See Final Act. 5, 16; Ans. 6.
INDEPENDENT CLAIM 6: DETERMINING WHETHER "EXPECTED REVENUE
Is GREATER THAN A THRESHOLD AMOUNT ABOVE THE CLEARING PRICE"
Appellants argue that the Examiner erred in rejecting claim 6 because
Cunningham does not teach or suggest the following limitation in claim 6:
"determining whether the expected revenue is greater than a threshold
amount above the clearing price." See App. Br. 20; Reply Br. 23. In
particular, Appellants contend that"[ w ]hile Cunningham describes
comparing an expected clearing price to a publisher-specified reserve price,
Cunningham does not disclose determining the expected clearing price is
greater than the publisher-specified reserve price by at least a threshold
amount." App. Br. 20. Further, Appellants assert that Cunningham's
"publisher-specified reserve price is neither of the claim 6 elements of a
computed expected revenue determined based on probability distributions or
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a clearing price determined based on bid values in ad requests" but instead
"just a minimum value set by the publisher for the real-time bidding
market." Reply Br. 23.
Appellants' arguments do not persuade us of Examiner error because
they attack the references individually, while the Examiner relies on the
combined disclosures in the references to reject claim 6. See Final Act.
9-12, 16; Ans. 6-7. Where a rejection rests on the combined disclosures in
the references, Appellants cannot establish nonobviousness by attacking the
references individually. See In re Merck & Co., 800 F.2d 1091, 1097
(Fed. Cir. 1986). Here, the combined disclosures in Cunningham and
McElfresh teach or suggest the disputed limitation in claim 6. See Final Act.
9-12, 16; Ans. 6-7.
For instance, McElfresh teaches or suggests a probability distribution
of bid values. See Final Act. 11-12 (citing McElfresh 3:8-11, 3:55---64,
11:18-25, 11:40-45, 12:15-18, 12:30-32). Further, Cunningham discloses
determining the "fee charged by the operator of the real-time bidding market
for brokering the transaction" and considering that fee when comparing a
price in an external market to a price in the real-time bidding market.
Cunningham ,r 46. Hence, Cunningham teaches or suggests claim 6's
"threshold amount above" feature. See Final Act. 10-11 ( citing
Cunningham ,r,r 16-17, 34, 37--40, 46, Fig. 4).
SUMMARY FOR INDEPENDENT CLAIMS 1 AND 6
For the reasons discussed above, Appellants' arguments have not
persuaded us that the Examiner erred in rejecting the independent claims
under§ 103(a). Thus, we sustain the§ 103(a) rejection of the independent
claims.
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DEPENDENT CLAIMS 2-5 AND 9-14
Claims 2-5 depend from claim 1, and claims 9-14 depend from
claim 6. App. Br. 22, 24--25 (Claims App'x). In the Appeal Brief,
Appellants do not argue patentability separately for any dependent claim.
See App. Br. 17-20. Because Appellants do not argue the claims separately,
we sustain the§ 103(a) rejection of these dependent claims for the same
reasons as the independent claims. See 37 C.F.R. § 4I.37(c)(l)(iv) (2016).
In the Reply Brief, Appellants argue for the first time that dependent
claim 13 differs from Cunningham "because claim 13 recites 'responsive to
the expected revenue not exceeding the threshold value, selecting the
advertisement based on the bid values included in the stored ad requests."'
Reply Br. 24. This new argument is not responsive to an argument in the
Answer, and Appellants have not shown good cause for us to consider it.
See Ans. 6-7; Reply Br. 24. Hence, we decline to consider this new
argument. See 37 C.F.R. § 4I.41(b )(2); see also Ex parte Borden,
93 USPQ2d 1473, 1475 (BPAI 2010) (informative) (discussing procedural
difficulties with belated arguments). "Considering an argument advanced
for the first time in a reply brief ... is not only unfair to an appellee, but also
entails the risk of an improvident or ill-advised opinion on the legal issues
tendered." McBride v. Merrell Dow & Pharm., Inc., 800 F.2d 1208, 1211
(D.C. Cir. 1986).
DECISION
We affirm the rejection of claims 1---6 and 9-14 under 35 U.S.C.
§ 101.
We affirm the rejection of claims 1---6 and 9-14 under 35 U.S.C.
§ 103(a).
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No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l)(iv). See
37 C.F.R. § 4I.50(f).
AFFIRMED
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