Business method abstract idea rejections continue to get reversed at the Board, sparking form over substance debate?

In today’s Anticipat Recap email (March 22, 2018), three decisions at least partially reversed abstract idea rejections for business method claims. One of the decisions, Ex Parte Gershfang et al (PTAB Mar. 22, 2018), even included a dissenting opinion. Here, we report on an interesting decision pulled from another decision, Ex parte Beach (PTAB Mar. 22, 2018).

Before getting into Beach, some context behind the debate about form over substance of patent-eligibility. The Supreme Court in Alice v. CLS Bank struck down the method claims as abstract ideas, but also, importantly, struck down the computer system and computer readable medium claims for the same reason. The Supreme Court did not want clever practitioners to be able to get a claim based on the draftsman art. So just because a claim included computer recitations did not, by itself, make the claims more than an abstract idea. For this reason, it is very rare for the Board to split the claim set baby. For the most part, either all the claims are upheld as abstract or all the claims are reversed.

Ex parte Beach comes out differently than Alice because here the Board upheld the abstract idea rejection on the method claims but at the same time overturned the abstract idea rejection on the system claims. The representative method claim is here:

58. A method for processing coins, the method comprising:

receiving a plurality of randomly oriented coins in a coin counting machine;
dispensing a financial instrument from the coin counting machine in exchange for at least a portion of the coins;
receiving the financial instrument from a customer;
reading a code off the financial instrument with a machine;
sending at least a portion of the code to a database in a query for information to determine if the financial instrument is valid;
receiving the information from the database; and
redeeming the financial instrument for at least one of cash and merchandize [sic merchandise] when the information received from the database indicates the financial instrument is valid.

The Board found claim 58 to be a patent-ineligible abstract idea.

By contrast, the Board overturned the system claims as not an abstract idea. Here is a claim that was reversed:

91. A system for processing coins, the system comprising:

a coin counting machine, the coin counting machine having:

a coin input region configured to receive a plurality of randomly oriented coins from a user;
a coin discriminator configured to count the coins to determine a total; and
a dispenser configured to dispense a financial instrument to the user in exchange for at least a portion of the coins, wherein the financial instrument includes a code;

a database configured to receive information from the coin counting machine related to the financial instrument; and
a recognition subsystem configured to read the code off the financial instrument and send a related query to the database for information related to the financial instrument.

In its reasoning, the Board distinguished these system claims from the ineligible method claims because the structural elements of the system claims “simply do not recite an abstract idea.” According to the Board, these structural elements include a coin counting machine having “a coin input region configured to receive a plurality of randomly oriented coins from a user,” “a coin discriminator configured to count the coins,” “a printer configured to print a machine-readable code and a value on a voucher,” and “a dispenser configured to dispense the voucher.”

So here the Board holds that for a coin machine system claim, the structure of a coin input region, the coin discriminator to count the coins, the printer to print a voucher and the dispenser to dispense the voucher makes a claim patent-eligible.

Beach shows that the Board is willing to affirm some claims that were rejected as abstract ideas while reversing others. This is important because it shows that after Alice, the Board appears to be able to analyze the claims in a very much nuanced manner. Indeed, the extent that structural claim recitations can render a claim not abstract is far from over. But when it comes to a coin counting machine, these structural limitations were sufficient for the Board.

The Board will likely continue to render affirmed-in-part determinations on patent-ineligible judicial exception rejections only in rare cases. But we will report of any trends that develop.

One response

  1. Pingback: The State of Appealing Abstract Idea Rejections of Business Method Applications post-Alice | Anticipat Blog

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