Chief Judge David P. Ruschke

Chief Judge David P. Ruschke Patent Trial and Appeal Board USPTO P.O. Box 1450 Alexandria, Virginia 22313-1450

RE: Request to Make Ex parte Hafner et al., No. 2015-002200 (P.T.A.B. Jan. 31, 2017) Precedential

Dear Chief Judge Ruschke:

Pursuant to the Patent Trial and Appeal Board’s Standard of Operating Procedure (SOP) 2 (Revision 8), we are nominating Ex parte Hafner et al., No. 2015-002200 (P.T.A.B. Jan. 31, 2017) for precedential designation. The SOP indicates that the appellant, the patentee, a petitioner or a third party member of the public may, within 60 days of issuance of an opinion, request in writing that an opinion be made precedential, by forwarding that request, along with accompanying reasons, to the Chief Judge.

This request is being submitted within 60 days from the issuance of the Ex parte Hafner decision on behalf of the American Intellectual Property Law Association (“AIPLA”), a third party member of the public. AIPLA is a national bar association with approximately 15,000 members who are primarily lawyers in private and corporate practice, in government service, and in the academic community. AIPLA’s members represent a wide and diverse spectrum of individuals, companies, and institutions, and are involved directly or indirectly in the practice of patent, trademark, copyright, and unfair competition law. Our members represent both owners and users of intellectual property, in the United States and throughout the world.

Briefly, in the present case, the Board reversed the Examiner’s findings that claims 1-25 were directed to an abstract idea under 35 U.S.C. §101. The SOP indicates that an opinion “may be considered appropriate for precedential designation for any reason, but particular emphasis will be placed on opinions resolving conflicts or addressing novel questions.” We believe that Ex parte Hafner is well-suited for precedential designation for each of the following reasons.

I. Novel Questions

Ex parte Hafner applies the technology improvement analysis in harmony with Federal Circuit and Supreme Court precedent. See, e.g., Alice v. CLS Bank (considering whether the claims at issue “improve the functioning of the computer itself” or “effect an improvement in any other technology or technical field”); DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (finding that the claims are “necessarily rooted in computer technology” and “overcome a problem specifically arising in the realm of computer networks.”); Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1350 (Fed. Cir. 2016) (explaining how a particular arrangement of elements was “a technical improvement over prior art ways of filtering such content.”); McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299, 1315 (finding that the claims are directed to a technological improvement over the existing, manual 3-D animation techniques by using rules designed to achieve an improved technological result in conventional

1 practice); Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. 2016) (holding that the claims were “directed to a specific improvement to the way computers operate, embodied in [a] self-referential table); Trading Technologies International v. CQG Inc., 2016-1616 (Fed. Cir. January 18, 2017) (holding “the claimed graphical user interface method imparts a specific functionality to a trading system ‘directed to a specific implementation of a solution to a problem in the software arts.’”). In so doing, Ex parte Hafner clarifies two novel points on how a claimed invention can satisfy patent-eligibility under 35 U.S.C. §101 through articulation of an “improvement” in computer technology specifically related to software.

1. Novel Question: To What Extent Can Claims That Recite Software and Generic Computer Components Be Directed to Patent-Eligible Subject Matter?

First, Ex parte Hafner clarifies when software can be the technological improvement that makes a claimed invention patent-eligible. This is based on Federal Circuit precedent. For example, the Enfish Court, in ruling that the claims were patent-eligible for the specific improvement to the way computers operate, found, “Software can make non-abstract improvements to computer technology just as hardware improvements can.” Enfish further found, “Much of the advancement made in computer technology consists of improvements to structure that, by their very nature, may not be defined by physical features but rather by logical structures and processors.” Id. at p. 11. Also, as stated in TTI, “Software may be essential to conduct the contemplated improvements.” Enfish also held that “an invention’s ability to run on a general purpose computer does not automatically doom the claim.” See also Amdoc at 23 (holding that “the claim’s enhancing limitation necessarily requires that these generic components operate in an unconventional manner to achieve an improvement in computer functionality”). Thus, the Federal Circuit has established that the technological improvement of a claimed invention can be in the software, notwithstanding generically recited computer components. However, given the range of Federal Circuit decisions, providing uncertain guidance to Examiners, it would be very helpful to have a precedential decision addressing when software technological improvements on generic computer components can be patent-eligible.

Here, the Board identified that the appellant’s point of improvement was in the creation of the energy transaction plan (data object). Id. at 8 (“The improvement over existing solutions in the field of electric vehicle charging is in the form of an energy transaction plan which is explicitly used to control aspects of the electric vehicle charging transaction.”). The Board found that the claim language referred to software-related claim language, which was consistently referenced as such in the appellant’s remarks. Id. Specifically, the energy transaction plan was found to be a “logical controller” used to control charging, discharging, and storing operations with the electric vehicle. See id. The Board cited to Federal Circuit precedent showing that software can be the technological improvement. See id. The Examiner’s argument that the recited computing elements are generic, known and conventional was unpersuasive.

Second, Ex parte Hafner clarifies the threshold of how a claimed invention with its improvement in software is patent-eligible. Federal Circuit precedent shows that software technological improvements are patent-eligible when they improve the capability of the computer or system as a whole. See Engish at 11 (holding that the determination is “whether the focus of the claims is on the specific asserted improvement in computer capabilities ... or, instead, on a process that qualifies as an ‘abstract idea’ for which computers are invoked merely as a tool.”); see also TTI at 8 (“Abstraction is avoided or overcome when a proposed new application or computer- implemented function is not simply the generalized use of a computer as a tool to conduct a known or obvious process, but instead is an improvement to the capability of the system as a whole.”).

Here, Ex parte Hafner clarifies how the claims qualify as a technological improvement. As discussed above, the generation of the energy transaction plan was the improvement over existing solutions. Thus, the production of the plan (data object) itself was sufficient to transform the computer. In other words, it is improvement in technology to “generate by the processor in the computer, … a plan” that optimizes (maximize etc.) a set of predefined parameters (preferences in the claim).

And this improvement need not require any new hardware or improve the objective performance of the computer. Examiners frequently state that there is no new hardware or new computer provided to reject the claim. Hafner clarifies that no new computer hardware is needed. Their system was entirely “generic” computer elements. See, e.g., Hafner, Figs. 1-8. The second point is equally important: examiners often say that there is no measurable improvement in the computer, it does not execute faster, use less memory, etc. (pointing to Enfish for support). Haftner clarifies that there is no requirement to make the computer itself operate faster, etc. The Hafner decision highlights the standard used by the Federal Circuit: through improvement to the capability of the system as a whole.

Also, the Board found that the Appellants put forward a position that is comprehensive in explaining how claim limitations root the solution to the problem being solved in technology and thereby render the claim limitations as meaningful limitations beyond simply employing a generic computer. The claimed energy transaction plan was found to be a “logical controller” used to control each of charging, discharging, and storing operations with the electric vehicle. See id. at 7. The energy transaction plan was found to include terms of the charging transaction to account for each of charging, discharging, and storing electric power. See id. Thus, the Board found that as a software component, the energy transaction plan played a role in improving the system as a whole. See id. at 8. The Board found that this improvement that the software performed on the system as a whole was sufficient to reverse the Examiner’s rejection. See page 9.

This decision thus offers the claimed invention as an example of a software claim that describes how it improves the technology. The technical improvement standard for patent-eligibility may in the future be encountered with increasing frequency when determining whether the claimed elements, individually or in combination, are patent-eligible. Ex parte Hafner provides a clear analysis of this question by indicating that claims that recite software elements and generic computer components may be patent-eligible provided that the computer capabilities or system as a whole are improved through the software.

II. Existing Legal Conflict: Current Precedential Ex Parte Decisions Involving Judicial Exceptions to Patent-Eligible Subject Matter Are No Longer Good Law

3 Ex parte Hafner addresses and resolves existing legal conflicts among precedential decisions regarding the proper framework for determining patent eligibility. In view of the Supreme Court decisions Mayo, Myriad and Alice on patent eligibility, and related cases, Examiners and PTAB Judges have inconsistently applied the two-part test for determining patent eligibility. This analysis requires: (1) determining whether the claims are directed to a patent-ineligible concept, i.e., the exceptions – law of nature, a natural phenomenon, or abstract idea; and (2) determining whether the claim’s elements, considered both individually and as an ordered combination, transform the nature of the claims into a patent-eligible application.

Ex parte Hafner goes through the complete two-step framework in arriving at its decision. Importantly, the board rejected the examiner’s argument that “basic economic practices” are ineligible: “This is not the law.” Rather, the practice must be fundamental and a blocking block. This clarification is in line with case law and is important because examiners routinely reject claims that have any commercial aspects to them on the ground that such commercial transactions are ordinary or basic. The decision here clearly requires that the practice must be more than ‘basic’ but fundamental.

The Board also considered the claim elements as a whole and clarified that it is improper to characterize data processing steps as “only manipulating abstract data elements.” That “is not a fair reading of what is claimed.” This is important because it means that the board is looking at the CONTENT of the claim elements (i.e., what is being done in terms of the underlying semantics of the information) not merely at the generic “how” (processing data elements regardless of content). This is important because examiners routinely ignore the details of the claim and reject on very similar grounds of merely “manipulating” data. Thus, the Hafner decision made clear the proper way for an Alice/Mayo analysis should look like.

In this respect, two precedential Board of Patent Appeals and Interferences (“BPAI”) decisions are outdated and apply a deprecated framework of patent-eligibility. For example, in Ex parte Gutta et al., No. 2008-4366 (B.P.A.I. August 10, 2009), the BPAI applied the machine-or- transform test to determine whether a process claim satisfies § 101, at a time when the machine- or-transformation test was the sole test for determining patent-eligibility. See Ex parte Gutta at page 9. However, the Supreme Court has since held that the machine-or-transformation test is not the sole test for determining patent-eligibility in Bilski v. Kappos, 561 U.S. 593 (2010).

Similarly, in Ex parte Lundgren, No. 2003-2088 (B.P.A.I. April 20, 2004), the Board applied the useful, concrete and tangible result test for determining patent eligibility under § 101 articulated in State Street Bank and Trust Company v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998). Relying on the State Street Bank decision, the Board found that a process claim that applies a mathematical algorithm to "produce a useful, concrete, tangible result without pre- empting other uses of the mathematical principle, on its face comfortably falls within the scope of § 101”. However, the useful, concrete and tangible result test is no longer to be relied on for determining patent eligibility.

These conflicting precedential opinions, inter alia, do not accurately reflect the proper patent eligibility framework. It is important to clarify the law with respect to this issue, so as to guide and provide clarity to Appellants, Examiners and PTAB Judges and to promote consistent and predictable examination outcomes. Ex parte Hafner clarifies the proper two-step analysis for determining patent eligibility.

III. Conclusion

Designating Ex parte Hafner as a precedential decision will encourage Appellants, Examiners and PTAB Judges to read and understand the insightful logic included therein. This designation may therefore reduce the number of erroneous rejections issued, appeals filed, etc., encourage expedited resolution of pending appeals and application, and improve the consistency of appeal decisions. Thus, a precedential designation will serve to promote compact prosecution and to reduce the Board’s workload.

Thus, Ex parte Hafner is particularly well-suited for a precedential designation, and such designation will facilitate clarity, consistency and efficiency. We thank you for your consideration of this request and welcome any questions or discussions.

Claim 1, reproduced below, is illustrative of the subject matter on appeal.

1. A computer implemented method of generating an energy transaction plan for controlling aspects of an electric vehicle charging transaction, the computer implemented method comprising:

identifying, by a processor in the computer, an electric vehicle associated with a charging station and a set of principals associated with a charging transaction for the electric vehicle, wherein a principal in the set of principals is an entity having an interest in the charging transaction for the electric vehicle including an owner and an operator the electric vehicle and wherein the charging transaction is a transaction associated with at least one of charging the electric vehicle, storing electric power in an electric storage mechanism associated with the electric vehicle, and de-charging the electric vehicle;

receiving charging transaction information, by the processor in the computer, wherein the charging transaction information comprises requirements, constraints, and preferences applicable to the charging transaction, wherein the preferences comprise at least one user-selected preference having a type specified as one of static, effective until an associated preference changes; dynamic, requiring user input of a value in real time; and temporary, effective for a predetermined period of time, with the preferences used to manage, govern, and control one or more aspects of the electric vehicle charging transaction so as to minimize, maximize, or optimize the aspects, and further the preferences are maintained in a vehicle preference service comprised of a software component for creating, managing, storing, requesting, updating, deleting, and retrieving the preferences according to the energy transaction plan;

5 identifying, by the processor in the computer, a weighting value associated with each preference, wherein the weighting value indicates a priority of each preference relative to other preferences and determines an extent to which an associated preference is minimized, maximized, or optimized;

generating, by the processor in the computer, an energy transaction plan to control all aspects of the charging, discharging, and storing operations with the electric vehicle based on the charging transaction information, wherein the energy transaction plan comprises an identification of the electric vehicle, an identification of a principal in the set of principals to pay for the charging transaction, an identification of at least one electric power provider associated with the charging transaction, an owner of the charging station, charging transaction time driven event sequences that indicate the electric flow direction relative to the electric vehicle and rate of flow at each of a time mark and that specifies start and end times for the charging transaction and controls each of charging, discharging, and storing operations with the electric vehicle, and includes terms of the charging transaction to account for each of charging, discharging, and storing electric power, and further the energy transaction plan maximizes, minimizes, or optimizes each preference in accordance with the weighting value assigned to each preference, to control charging, discharging, and storing electric power; and

starting, conducting, and ending charging of the electric vehicle charging transaction using a computer the processor in the computer configured to execute the generated energy transaction plan to control all aspects of the charging, discharging, and storing operations with the electric vehicle.