Patent-Eligibility Lessons from the PTAB (No. 1)

How is the USPTO’s Patent Trial and Appeal Board (PTAB) addressing patent-eligibility rejections under 35 U.S.C. § 101 in ex parte appeals?  What arguments work, and what arguments fail, when you are trying to persuade the PTAB judges that rejected claims pass the Mayo/Alice test?  How should you draft your claims to best condition them for an appeal to the PTAB?

The answer to these questions is of ginormous relevance to patent prosecutors – even more relevant, in many aspects, that how the district courts, or even the Federal Circuit, are deciding Section 101 cases.  PTAB decisions in Inter Partes and Covered Business Method Review proceedings get a lot of attention these days.  PTAB decisions in appeals arising from patent-eligibility rejections in ex parte appeals, not so much.  Thus, today we begin what will be an occasional – but regular – series summarizing PTAB patent-eligibility decisions in ex parte appeals.

On the theory that every good lawyer knows to look at cases reaching each possible result on an issue, below we summarize one case in which an Examiner’s Section 101 rejection was affirmed, and one case in which the Examiner’s Section 101 rejection was reversed.  Note that the USPTO classified the claims in both cases as pertaining to business methods; both come from that hotbed of Alice activity, Tech Center 3600.

PTAB Affirms Section 101 Rejection: Ex parte Badros (Facebook, Inc.) (May 23, 2017)

Art Unit 3622: Data Processing: Financial, Business Practice, Management, or Cost/Price Determination

Summary of claimed subject matter: “Claim 1 is directed to . . . receiving a request for an advertisement, retrieving an advertisement tag, retrieving data, creating a social endorsement, and sending the advertisement and social endorsement.”

Stated problem: deficiencies with prior “ad targeting attempts.”

Solution: Specification disclosed a “comprehensive solution to providing social endorsement information in conjunction with online ads on third-party publisher systems in order to maximize ad relevancy and effectiveness.” (Emphasis added.)

Abstract idea: “creating and providing social endorsements for targeted advertising, a fundamental economic and conventional business practice.”

Reasoning: There was not “significantly more” that the abstract idea.  Appellants could show nothing more than “routine and conventional functions of a generic computer.”

PTAB Reverses Section 101 Rejection: Ex parte Hwang et al. (Korea Smart Card Co., Ltd.) (April 26, 2017)

Art Unit 3628: Data Processing: Financial, Business Practice, Management, or Cost/Price Determination

Summary of claimed subject matter: method for a consumer to activate an electronic payment unit by requesting activation through an activating server, including providing at the activating server a parameter value corresponding to a detected class of the user based on the personal user information, and paying a fare according to the parameter value.

Alleged abstract idea: “The Examiner finds that ‘the claims are directed to allowing consumers to activate an electronic payment unit which is considered to be an abstract idea.’ Ans. 3. Not much more is said.”

Stated problem: inefficient electronic payment means activation.

Solution: “[T]he claims provide enhancing limitations that entail unconventional technological solutions (e.g., ‘providing at the activating server a first parameter value corresponding to the detected class of the user’).”

Reasoning: “[G]iven the discussion in the Specification and that the Examiner has not put forward an opposing detailed reasoning or evidence . . .  we find . . . ‘the focus of the claims is on [a] specific asserted improvement in computer capabilities . . . [and not on] an “abstract idea” for which computers are invoked merely as a tool.’” (Quoting Enfish).

Thanks to law clerk and patent agent David Thomas for his assistance in finding and summarizing these cases.

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