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USPTO MPEP › Chapter 2100 - Patentability › MPEP § 2106.04(a)(2)

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MATHEMATICAL

CONCEPTS

The mathematical concepts grouping is defined

as mathematical relationships, mathematical formulas or equations, and

mathematical calculations. The Supreme Court has identified a number of

concepts falling within this grouping as abstract ideas including: a procedure

for converting binary-coded decimal numerals into pure binary form,

Gottschalk v. Benson,

409 U.S. 63, 65, 175 USPQ2d 673,

674 (1972); a mathematical formula for calculating an alarm limit,

Parker v. Flook,

437 U.S. 584, 588-89, 198 USPQ2d 193,

195 (1978); the Arrhenius equation,

Diamond v. Diehr,

450

U.S. 175, 191, 209 USPQ 1, 15 (1981); and a mathematical formula for hedging,

Bilski v. Kappos,

561 U.S. 593, 611, 95 USPQ 2d 1001,

1004 (2010).

The Court’s rationale for identifying these

“mathematical concepts” as judicial exceptions is that a ‘‘mathematical formula

as such is not accorded the protection of our patent laws,’’

Diehr,

450 U.S. at 191, 209 USPQ at 15 (citing

Benson,

409 U.S. 63, 175 USPQ 673), and thus ‘‘the

discovery of [a mathematical formula] cannot support a patent unless there is

some other inventive concept in its application.’’

Flook,

437 U.S. at 594, 198 USPQ at 199. In the past, the Supreme Court sometimes

described mathematical concepts as laws of nature, and at other times described

these concepts as judicial exceptions without specifying a particular type of

exception. See,

e.g., Benson,

409 U.S. at 65, 175 USPQ2d at

674;

Flook,

437 U.S. at 589, 198 USPQ2d at 197;

Mackay Radio & Telegraph Co. v. Radio Corp. of Am.,

306 U.S. 86, 94, 40 USPQ 199, 202 (1939) (‘‘[A] scientific truth, or the

mathematical expression of it, is not patentable invention[.]’’). More recent

opinions of the Supreme Court, however, have affirmatively characterized

mathematical relationships and formulas as abstract ideas. See,

e.g.,

Alice Corp. Pty. Ltd. v. CLS Bank Int’l

, 573 U.S

197;

Mackay Radio & Telegraph Co. v. Radio Corp. of Am.,

306 U.S. 86, 94, 40 USPQ 199, 202 (1939) (‘‘[A] scientific truth, or the

mathematical expression of it, is not patentable invention[.]’’). More recent

opinions of the Supreme Court, however, have affirmatively characterized

mathematical relationships and formulas as abstract ideas. See,

e.g.,

Alice Corp. Pty. Ltd. v. CLS Bank Int’l

, 573 U.S. 208, 218, 110

USPQ2d 1976, 1981 (2014) (describing

Flook

as holding “that

a mathematical formula for computing ‘alarm limits’ in a catalytic conversion

process was also a patent-ineligible abstract idea.”);

Bilski v.

Kappos,

561 U.S. 593, 611-12, 95 USPQ2d 1001, 1010 (2010) (noting

that the claimed “concept of hedging, described in claim 1 and reduced to a

mathematical formula in claim 4, is an unpatentable abstract idea,”).

When determining whether a claim recites a

mathematical concept (

i.e.,

mathematical relationships,

mathematical formulas or equations, and mathematical calculations), examiners

should consider whether the claim recites a mathematical concept or merely

limitations that are based on or involve a mathematical concept. A claim does

not recite a mathematical concept (

i.e.,

the claim

limitations do not fall within the mathematical concept grouping), if it is

only based on or involves a mathematical concept. See,

e.g., Thales

Visionix, Inc. v. United States,

850 F.3d 1343, 1348-49, 121

USPQ2d 1898, 1902-03 (Fed. Cir. 2017) (determining that the claims to a

particular configuration of inertial sensors and a particular method of using

the raw data from the sensors in order to more accurately calculate the

position and orientation of an object on a moving platform did not merely

recite “the abstract idea of using ‘mathematical equations for determining the

relative position of a moving object to a moving reference frame’.”)

rmining that the claims to a

particular configuration of inertial sensors and a particular method of using

the raw data from the sensors in order to more accurately calculate the

position and orientation of an object on a moving platform did not merely

recite “the abstract idea of using ‘mathematical equations for determining the

relative position of a moving object to a moving reference frame’.”). For

example, a limitation that is merely based on or involves a mathematical

concept described in the specification may not be sufficient to fall into this

grouping, provided the mathematical concept itself is not recited in the claim.

It is important to note that a mathematical

concept need not be expressed in mathematical symbols, because “[w]ords used in

a claim operating on data to solve a problem can serve the same purpose as a

formula.”

In re Grams,

888 F.2d 835, 837 and n.1, 12 USPQ2d

1824, 1826 and n.1 (Fed. Cir. 1989). See,

e.g., SAP America, Inc. v.

InvestPic, LLC,

898 F.3d 1161, 1163, 127 USPQ2d 1597, 1599 (Fed.

Cir. 2018) (holding that claims to a ‘‘series of mathematical calculations

based on selected information’’ are directed to abstract ideas);

Digitech Image Techs., LLC v. Elecs. for Imaging, Inc.,

758 F.3d 1344, 1350, 111 USPQ2d 1717, 1721 (Fed. Cir. 2014) (holding that

claims to a ‘‘process of organizing information through mathematical

correlations’’ are directed to an abstract idea); and

Bancorp Servs.,

LLC v. Sun Life Assurance Co. of Can. (U.S.),

687 F.3d 1266, 1280,

103 USPQ2d 1425, 1434 (Fed. Cir. 2012) (identifying the concept of ‘‘managing a

stable value protected life insurance policy by performing calculations and

manipulating the results’’ as an abstract idea).

Mathematical Relationships

A mathematical relationship is a

relationship between variables or numbers. A mathematical relationship may

be expressed in words or using mathematical symbols. For example, pressure

1434 (Fed. Cir. 2012) (identifying the concept of ‘‘managing a

stable value protected life insurance policy by performing calculations and

manipulating the results’’ as an abstract idea).

Mathematical Relationships

A mathematical relationship is a

relationship between variables or numbers. A mathematical relationship may

be expressed in words or using mathematical symbols. For example, pressure

(p) can be described as the ratio between the magnitude of the normal force

(F) and area of the surface on contact (A), or it can be set forth in the

form of an equation such as p = F/A.

Examples of mathematical relationships

recited in a claim include:

i. a relationship between reaction rate

and temperature, which relationship can be expressed in the form of a

formula called the Arrhenius equation,

Diamond v.

Diehr;

450 U.S. at 178 n. 2, 179 n.5, 191-92, 209 USPQ at

4-5 (1981);

ii. a conversion between binary coded

decimal and pure binary,

Benson,

409 U.S. at 64,

175 USPQ at 674;

iii. a mathematical relationship between

enhanced directional radio activity and antenna conductor arrangement

(

i.e.,

the length of the conductors with respect

to the operating wave length and the angle between the conductors),

Mackay Radio & Tel. Co. v. Radio Corp. of

America,

306 U.S. 86, 91, 40 USPQ 199, 201 (1939) (while

the litigated claims 15 and 16 of U.S. Patent No. 1,974,387 expressed

this mathematical relationship using a formula that described the

angle between the conductors, other claims in the patent

(

e.g.,

claim 1) expressed the mathematical

relationship in words); and

iv. organizing information and

manipulating information through mathematical correlations,

Digitech Image Techs., LLC v. Electronics for Imaging,

Inc.,

758 F.3d 1344, 1350, 111 USPQ2d 1717, 1721 (Fed.

Cir. 2014). The patentee in

Digitech

claimed

methods of generating first and second data by taking existing

information, manipulating the data using mathematical functions, and

organizing this information into a new form

ation and

manipulating information through mathematical correlations,

Digitech Image Techs., LLC v. Electronics for Imaging,

Inc.,

758 F.3d 1344, 1350, 111 USPQ2d 1717, 1721 (Fed.

Cir. 2014). The patentee in

Digitech

claimed

methods of generating first and second data by taking existing

information, manipulating the data using mathematical functions, and

organizing this information into a new form. The court explained that

such claims were directed to an abstract idea because they described a

process of organizing information through mathematical correlations,

Flook's

method of calculating using a

mathematical formula. 758 F.3d at 1350, 111 USPQ2d at 1721.

Mathematical Formulas or Equations

A claim that recites a numerical formula or

equation will be considered as falling within the “mathematical concepts”

grouping. In addition, there are instances where a formula or equation is

written in text format that should also be considered as falling within this

grouping. For example, the phrase “determining a ratio of A to B” is merely

using a textual replacement for the particular equation (ratio = A/B).

Additionally, the phrase “calculating the force of the object by multiplying

its mass by its acceleration” is using a textual replacement for the

particular equation (F= ma).

Examples of mathematical equations or formulas

recited in a claim include:

i. a formula describing certain

electromagnetic standing wave phenomena,

Mackay Radio &

Tel. Co. v. Radio Corp. of America,

306 U.S. 86, 91, 40

USPQ 199, 201 (1939) (50.9(l/lambda<-0.513>);

ii. the Arrhenius equation,

Diamond v. Diehr;

450 U.S. 175, 178 n. 2, 179

n.5, 191-92, 209 USPQ at 4-5 (1981) (ln v = CZ + x);

iii. a formula for computing an alarm

limit,

Parker v. Flook,

437 U.S. 584, 585, 198 USPQ

193, 195 (1978) (B1=B0 (1.0–F) + PVL(F)); and

iv. a mathematical formula for hedging

(claim 4),

Bilski v. Kappos,

561 U.S. 593, 599, 95

USPQ2d 1001, 1004 (2010) (Fixed Bill Price = Fi + [(Ci + Ti + LDi) x

(α + βE(Wi))]).

Diehr;

450 U.S. 175, 178 n. 2, 179

n.5, 191-92, 209 USPQ at 4-5 (1981) (ln v = CZ + x);

iii. a formula for computing an alarm

limit,

Parker v. Flook,

437 U.S. 584, 585, 198 USPQ

193, 195 (1978) (B1=B0 (1.0–F) + PVL(F)); and

iv. a mathematical formula for hedging

(claim 4),

Bilski v. Kappos,

561 U.S. 593, 599, 95

USPQ2d 1001, 1004 (2010) (Fixed Bill Price = Fi + [(Ci + Ti + LDi) x

(α + βE(Wi))]).

Mathematical

Calculations

A claim that recites a mathematical

calculation, when the claim is given its broadest reasonable interpretation

in light of the specification, will be considered as falling within the

“mathematical concepts” grouping. A mathematical calculation is a

mathematical operation (such as multiplication) or an act of calculating

using mathematical methods to determine a variable or number,

e.g.,

performing an arithmetic operation such as

exponentiation. There is no particular word or set of words that indicates a

claim recites a mathematical calculation. That is, a claim does not have to

recite the word “calculating” in order to be considered a mathematical

calculation. For example, a step of “determining” a variable or number using

mathematical methods or “performing” a mathematical operation may also be

considered mathematical calculations when the broadest reasonable

interpretation of the claim in light of the specification encompasses a

mathematical calculation.

Examples of mathematical calculations

recited in a claim include:

i. performing a resampled statistical

analysis to generate a resampled distribution,

SAP America,

Inc. v. InvestPic, LLC,

898 F.3d 1161, 1163-65, 127

USPQ2d 1597, 1598-1600 (Fed. Cir. 2018), modifying

SAP

America, Inc. v. InvestPic, LLC,

890 F.3d 1016, 126

USPQ2d 1638 (Fed. Cir. 2018);

ii. calculating a number representing an

alarm limit value using the mathematical formula

‘‘B

(1.0–F) +

PVL(F)’’,

Parker v. Flook,

437 U.S. 584, 585, 198

USPQ 193, 195 (1978);

iii. using a formula to convert geospatial

coordinates into natural numbers,

Burnett v

1597, 1598-1600 (Fed. Cir. 2018), modifying

SAP

America, Inc. v. InvestPic, LLC,

890 F.3d 1016, 126

USPQ2d 1638 (Fed. Cir. 2018);

ii. calculating a number representing an

alarm limit value using the mathematical formula

‘‘B

(1.0–F) +

PVL(F)’’,

Parker v. Flook,

437 U.S. 584, 585, 198

USPQ 193, 195 (1978);

iii. using a formula to convert geospatial

coordinates into natural numbers,

Burnett v. Panasonic

Corp.,

741 Fed. Appx. 777, 780 (Fed. Cir. 2018)

(non-precedential);

iv. managing a stable value protected life

insurance policy via performing calculations,

Bancorp Servs.,

LLC v. Sun Life Assur. Co. of Canada (U.S.)

, 687 F.3d

1266, 1280, 103 USPQ2d 1425, 1434 (Fed. Cir. 2012);

v. using an algorithm for determining the

optimal number of visits by a business representative to a client,

In re Maucorps,

609 F.2d 481, 482, 203 USPQ 812,

813 (CCPA 1979); and

vi. calculating the difference between

local and average data values,

In re Abele,

684

F.2d 902, 903, 214 USPQ 682, 683-84 (CCPA 1982).

II.

CERTAIN METHODS OF ORGANIZING

HUMAN ACTIVITY

The phrase “methods of organizing human

activity” is used to describe concepts relating to:

• fundamental economic principles or

practices (including hedging, insurance, mitigating risk);

• commercial or legal interactions

(including agreements in the form of contracts, legal obligations,

advertising, marketing or sales activities or behaviors, and business

relations); and

• managing personal behavior or

relationships or interactions between people, (including social

activities, teaching, and following rules or instructions).

The Supreme Court has identified a number of

concepts falling within the “certain methods of organizing human activity”

grouping as abstract ideas. In particular, in

Alice,

the

Court concluded that the use of a third party to mediate settlement risk is a

‘‘fundamental economic practice’’ and thus an abstract idea. 573 U.S. at

219–20, 110 USPQ2d at 1982

aching, and following rules or instructions).

The Supreme Court has identified a number of

concepts falling within the “certain methods of organizing human activity”

grouping as abstract ideas. In particular, in

Alice,

the

Court concluded that the use of a third party to mediate settlement risk is a

‘‘fundamental economic practice’’ and thus an abstract idea. 573 U.S. at

219–20, 110 USPQ2d at 1982. In addition, the Court in

Alice

described the concept of risk hedging identified as an abstract idea in

Bilski

as ‘‘a method of organizing human activity’’.

Id.

Previously, in

Bilski,

the Court

concluded that hedging is a ‘‘fundamental economic practice’’ and therefore an

abstract idea. 561 U.S. at 611–612, 95 USPQ2d at 1010.

The term “certain” qualifies the “certain

methods of organizing human activity” grouping as a reminder of several

important points. First, not all methods of organizing human activity are

abstract ideas (

e.g.,

“a defined set of steps for combining

particular ingredients to create a drug formulation” is not a certain "method

of organizing human activity”),

In re Marco Guldenaar Holding

B.V.,

911 F.3d 1157, 1160-61, 129 USPQ2d 1008, 1011 (Fed. Cir.

2018). Second, this grouping is limited to activity that falls within the

enumerated sub-groupings of fundamental economic principles or practices,

commercial or legal interactions, and managing personal behavior and

relationships or interactions between people, and is not to be expanded beyond

these enumerated sub-groupings except in rare circumstances as explained in

MPEP § 2106.04(a)(3)

. Cir.

2018). Second, this grouping is limited to activity that falls within the

enumerated sub-groupings of fundamental economic principles or practices,

commercial or legal interactions, and managing personal behavior and

relationships or interactions between people, and is not to be expanded beyond

these enumerated sub-groupings except in rare circumstances as explained in

MPEP § 2106.04(a)(3)

. Finally, the sub-groupings

encompass both activity of a single person (for example, a person following a

set of instructions or a person signing a contract online) and activity that

involves multiple people (such as a commercial interaction), and thus, certain

activity between a person and a computer (for example a method of anonymous

loan shopping that a person conducts using a mobile phone) may fall within the

“certain methods of organizing human activity” grouping. It is noted that the

number of people involved in the activity is not dispositive as to whether a

claim limitation falls within this grouping. Instead, the determination should

be based on whether the activity itself falls within one of the sub-groupings.

Fundamental Economic Practices or

Principles

The courts have used the phrases “fundamental

economic practices” or “fundamental economic principles” to describe

concepts relating to the economy and commerce. Fundamental economic

principles or practices include hedging, insurance, and mitigating

risks.

The term “fundamental” is not used in the

sense of necessarily being “old” or “well-known.” See,

e.g., OIP

Techs., Inc. v. Amazon.com, Inc.

, 788 F.3d 1359, 1364, 115

U.S.P.Q.2d 1090, 1092 (Fed Cir. 2015) (a new method of price optimization

was found to be a fundamental economic concept);

In re

Smith,

815 F.3d 816, 818-19, 118 USPQ2d 1245, 1247 (Fed. Cir.

2016) (describing a new set of rules for conducting a wagering game as a

“fundamental economic practice”);

In re Greenstein,

774

Fed. Appx. 661, 664, 2019 USPQ2d 212400 (Fed Cir

Inc.

, 788 F.3d 1359, 1364, 115

U.S.P.Q.2d 1090, 1092 (Fed Cir. 2015) (a new method of price optimization

was found to be a fundamental economic concept);

In re

Smith,

815 F.3d 816, 818-19, 118 USPQ2d 1245, 1247 (Fed. Cir.

2016) (describing a new set of rules for conducting a wagering game as a

“fundamental economic practice”);

In re Greenstein,

774

Fed. Appx. 661, 664, 2019 USPQ2d 212400 (Fed Cir. 2019) (non-precedential)

(claims to a new method of allocating returns to different investors in an

investment fund was a fundamental economic concept). However, being old or

well-known may indicate that the practice is fundamental. See,

e.g., Alice Corp. Pty. Ltd. v. CLS Bank Int’l,

573

U.S. 208, 219-20, 110 USPQ2d 1981-82 (2014) (describing the concept of

intermediated settlement, like the risk hedging in

Bilski,

to be a “‘fundamental economic practice long

prevalent in our system of commerce’” and also as “a building block of the

modern economy”) (citation omitted);

Bilski v. Kappos,

561 U.S. 593, 611, 95 USPQ2d 1001, 1010 (2010) (claims to the concept of

hedging are a “fundamental economic practice long prevalent in our system of

commerce and taught in any introductory finance class.”) (citation omitted);

Intellectual Ventures I LLC v. Symantec Corp.,

838

F.3d 1307, 1313, 120 USPQ2d 1353, 1356 (Fed. Cir. 2016) (“The category of

abstract ideas embraces ‘fundamental economic practice[s] long prevalent in

our system of commerce,’ … including ‘longstanding commercial

practice[s]’”).

An example of a case identifying a claim as

reciting a fundamental economic practice is

Bilski v.

Kappos,

561 U.S. 593, 609, 95 USPQ2d 1001, 1009 (2010). The

fundamental economic practice at issue was hedging or protecting against

risk. The applicant in

Bilski

claimed “a series of steps

instructing how to hedge risk,”

i.e.,

how to protect

against risk. 561 U.S. at 599, 95 USPQ2d at 1005. The method allowed energy

suppliers and consumers to minimize the risks resulting from fluctuations in

market demand for energy

, 609, 95 USPQ2d 1001, 1009 (2010). The

fundamental economic practice at issue was hedging or protecting against

risk. The applicant in

Bilski

claimed “a series of steps

instructing how to hedge risk,”

i.e.,

how to protect

against risk. 561 U.S. at 599, 95 USPQ2d at 1005. The method allowed energy

suppliers and consumers to minimize the risks resulting from fluctuations in

market demand for energy. The Supreme Court determined that hedging is

“fundamental economic practice” and therefore is an “unpatentable abstract

idea.” 561 U.S. at 611-12, 95 USPQ2d at 1010.

Another example of a case identifying a

claim as reciting a fundamental economic practice is

Bancorp

Services., L.L.C. v. Sun Life Assurance Co. of Canada (U.S.),

687 F.3d 1266, 103 USPQ2d 1425 (Fed. Cir. 2012). The fundamental economic

practice at issue in

Bancorp

pertained to insurance. The

patentee in

Bancorp

claimed methods and systems for

managing a life insurance policy on behalf of a policy holder, which

comprised steps including generating a life insurance policy including a

stable value protected investment with an initial value based on a value of

underlying securities, calculating surrender value protected investment

credits for the life insurance policy; determining an investment value and a

value of the underlying securities for the current day; and calculating a

policy value and a policy unit value for the current day. 687 F.3d at

1270-71, 103 USPQ2d at 1427. The court described the claims as an “attempt

to patent the use of the abstract idea of [managing a stable value protected

life insurance policy] and then instruct the use of well-known

[calculations] to help establish some of the inputs into the equation.” 687

F.3d at 1278, 103 USPQ2d at 1433 (alterations in original) (citing

Bilski

Other examples of "fundamental economic

principles or practices" include:

i. mitigating settlement risk,

Alice Corp. v. CLS Bank,

573 U.S. 208, 218, 110

USPQ2d 1976, 1982 (2014);

life insurance policy] and then instruct the use of well-known

[calculations] to help establish some of the inputs into the equation.” 687

F.3d at 1278, 103 USPQ2d at 1433 (alterations in original) (citing

Bilski

Other examples of "fundamental economic

principles or practices" include:

i. mitigating settlement risk,

Alice Corp. v. CLS Bank,

573 U.S. 208, 218, 110

USPQ2d 1976, 1982 (2014);

ii. rules for conducting a wagering game,

In re Smith,

815 F.3d 816, 818-19, 118 USPQ2d

1245, 1247 (Fed. Cir. 2016);

iii. financial instruments that are

designed to protect against the risk of investing in financial

instruments,

In re Chorna,

656 Fed. App'x 1016,

1021 (Fed. Cir. 2016) (non-precedential);

iv. offer-based price optimization,

OIP Techs., Inc. v. Amazon.com, Inc.,

788 F.3d

1359, 1362–63, 115 USPQ2d 1090, 1092-93 (Fed. Cir. 2015);

v. local processing of payments for

remotely purchased goods,

Inventor Holdings, LLC v. Bed Bath

Beyond,

876 F.3d 1372, 1378-79, 125 USPQ2d 1019, 1023

(Fed. Cir. 2017);

vi. using a marking affixed to the outside

of a mail object to communicate information about the mail object,

i.e.,

the sender, recipient, and contents of the

mail object,

Secured Mail Solutions LLC v. Universal Wilde,

Inc.,

873 F.3d 905, 911, 124 USPQ2d 1502, 1506 (Fed. Cir.

2017); and

vii. placing an order based on displayed

market information,

Trading Technologies Int’l, Inc. v. IBG

LLC,

921 F.3d 1084, 1092, 2019 USPQ2d 138290 (Fed. Cir.

2019).

Commercial or Legal Interactions

“Commercial interactions” or “legal

interactions” include agreements in the form of contracts, legal

obligations, advertising, marketing or sales activities or behaviors, and

business relations.

An example of a claim reciting a commercial

or legal interaction, where the interaction is an agreement in the form of

contracts, is found in

buySAFE, Inc. v. Google, Inc.,

765

F.3d. 1350, 112 USPQ2d 1093 (Fed. Cir. 2014). The agreement at issue in

buySAFE

was a transaction performance guaranty, which

is a contractual relationship

marketing or sales activities or behaviors, and

business relations.

An example of a claim reciting a commercial

or legal interaction, where the interaction is an agreement in the form of

contracts, is found in

buySAFE, Inc. v. Google, Inc.,

765

F.3d. 1350, 112 USPQ2d 1093 (Fed. Cir. 2014). The agreement at issue in

buySAFE

was a transaction performance guaranty, which

is a contractual relationship. 765 F.3d at 1355, 112 USPQ2d at 1096. The

patentee claimed a method in which a computer operated by the provider of a

safe transaction service receives a request for a performance guarantee for

an online commercial transaction, the computer processes the request by

underwriting the requesting party in order to provide the transaction

guarantee service, and the computer offers, via a computer network, a

transaction guaranty that binds to the transaction upon the closing of the

transaction. 765 F.3d at 1351-52, 112 USPQ2d at 1094. The Federal Circuit

described the claims as directed to an abstract idea because they were

“squarely about creating a contractual relationship--a ‘transaction

performance guaranty’.” 765 F.3d at 1355, 112 USPQ2d at 1096.

Other examples of subject matter where the

commercial or legal interaction is an agreement in the form of contracts

include:

i. managing a stable value protected life

insurance policy via performing calculations,

Bancorp Servs.,

LLC v. Sun Life Assur. Co. of Canada (U.S.),

687 F.3d

1266, 1280, 103 USPQ2d 1425, 1434 (Fed. Cir. 2012); and

ii. processing insurance claims for a

covered loss or policy event under an insurance policy

(

i.e.,

an agreement in the form of a contract),

Accenture Global Services v. Guidewire Software,

Inc.,

728 F.3d 1336, 1338-39, 108 USPQ2d 1173, 1175-76

(Fed. Cir. 2013).

An example of a claim reciting a commercial

or legal interaction in the form of a legal obligation is found in

Fort Properties, Inc. v. American Master Lease, LLC,

671 F.3d 1317, 101 USPQ2d 1785 (Fed Cir. 2012)

n insurance policy

(

i.e.,

an agreement in the form of a contract),

Accenture Global Services v. Guidewire Software,

Inc.,

728 F.3d 1336, 1338-39, 108 USPQ2d 1173, 1175-76

(Fed. Cir. 2013).

An example of a claim reciting a commercial

or legal interaction in the form of a legal obligation is found in

Fort Properties, Inc. v. American Master Lease, LLC,

671 F.3d 1317, 101 USPQ2d 1785 (Fed Cir. 2012). The patentee claimed a

method of “aggregating real property into a real estate portfolio, dividing

the interests in the portfolio into a number of deedshares, and subjecting

those shares to a master agreement.” 671 F.3d at 1322, 101 USPQ2d at 1788.

The legal obligation at issue was the tax-free exchanges of real estate. The

Federal Circuit concluded that the real estate investment tool designed to

enable tax-free exchanges was an abstract concept. 671 F.3d at 1323, 101

USPQ2d at 1789.

Other examples of subject matter where the

commercial or legal interaction is a legal obligation include:

i. hedging,

Bilski v.

Kappos

, 561 U.S. 593, 595, 95 USPQ2d 1001, 1004

(2010);

ii. mitigating settlement risk,

Alice Corp. Pty. Ltd. v. CLS Bank Int'l,

573

U.S. 208, 218, 110 USPQ2d 1976, 1979 (2014); and

iii. arbitration,

In re

Comiskey

, 554 F.3d 967, 981, 89 USPQ2d 1655, 1665 (Fed.

Cir. 2009).

An example of a claim reciting advertising is

found in

Ultramercial, Inc. v. Hulu, LLC,

772 F.3d 709,

714-15, 112 USPQ2d 1750, 1753-54 (Fed. Cir. 2014). The patentee in

Ultramercial

claimed an eleven-step method for

displaying an advertisement (ad) in exchange for access to copyrighted

media, comprising steps of receiving copyrighted media, selecting an ad,

offering the media in exchange for watching the selected ad, displaying the

ad, allowing the consumer access to the media, and receiving payment from

the sponsor of the ad. 772 F.3d. at 715, 112 USPQ2d at 1754

Ultramercial

claimed an eleven-step method for

displaying an advertisement (ad) in exchange for access to copyrighted

media, comprising steps of receiving copyrighted media, selecting an ad,

offering the media in exchange for watching the selected ad, displaying the

ad, allowing the consumer access to the media, and receiving payment from

the sponsor of the ad. 772 F.3d. at 715, 112 USPQ2d at 1754. The Federal

Circuit determined that the "combination of steps recites an abstraction—an

idea, having no particular concrete or tangible form" and thus was directed

to an abstract idea, which the court described as "using advertising as an

exchange or currency."

Id.

Other examples of subject matter where the

commercial or legal interaction is advertising, marketing or sales

activities or behaviors include:

i. structuring a sales force or marketing

company, which pertains to marketing or sales activities or behaviors,

In re Ferguson,

558 F.3d 1359, 1364, 90 USPQ2d

1035, 1038 (Fed. Cir. 2009);

ii. using an algorithm for determining the

optimal number of visits by a business representative to a client,

In re Maucorps,

609 F.2d 481, 485, 203 USPQ 812,

816 (CCPA 1979); and

iii. offer-based price optimization, which

pertains to marketing,

OIP Techs., Inc. v. Amazon.com,

Inc.,

788 F.3d 1359, 1362-63, 115 USPQ2d 1090, 1092 (Fed.

Cir. 2015).

An example of a claim reciting business

relations is found in

Credit Acceptance Corp. v. Westlake

Services,

859 F.3d 1044, 123 USPQ2d 1100 (Fed. Cir. 2017). The

business relation at issue in

Credit Acceptance

is the

relationship between a customer and dealer when processing a credit

application to purchase a vehicle. The patentee claimed a “system for

maintaining a database of information about the items in a dealer’s

inventory, obtaining financial information about a customer from a user,

combining these two sources of information to create a financing package for

each of the inventoried items, and presenting the financing packages to the

user.” 859 F.3d at 1054, 123 USPQ2d at 1108

tion to purchase a vehicle. The patentee claimed a “system for

maintaining a database of information about the items in a dealer’s

inventory, obtaining financial information about a customer from a user,

combining these two sources of information to create a financing package for

each of the inventoried items, and presenting the financing packages to the

user.” 859 F.3d at 1054, 123 USPQ2d at 1108. The Federal Circuit described

the claims as directed to the abstract idea of “processing an application

for financing a loan” and found “no meaningful distinction between this type

of financial industry practice” and the concept of intermediated settlement

Alice

or the hedging concept in

Bilski.

859 F.3d at 1054, 123 USPQ2d at 1108.

Another example of subject matter where the

commercial or legal interaction is business relations includes:

i. processing information through a

clearing-house, where the business relation is the relationship

between a party submitted a credit application

(

e.g.,

a car dealer) and funding sources

(

e.g.,

banks) when processing credit

applications,

Dealertrack v. Huber,

674 F.3d 1315,

1331, 101 USPQ2d 1325, 1339 (Fed. Cir. 2012).

Managing Personal Behavior or Relationships or Interactions

Between People

The sub-grouping “managing personal behavior

or relationships or interactions between people” include social activities,

teaching, and following rules or instructions.

An example of a claim reciting managing

personal behavior is

Intellectual Ventures I LLC v. Capital One

Bank (USA),

792 F.3d 1363, 115 USPQ2d 1636 (Fed. Cir. 2015).

The patentee in this case claimed methods comprising storing user-selected

pre-set limits on spending in a database, and when one of the limits is

reached, communicating a notification to the user via a device. 792 F.3d. at

1367, 115 USPQ2d at 1639-40

claim reciting managing

personal behavior is

Intellectual Ventures I LLC v. Capital One

Bank (USA),

792 F.3d 1363, 115 USPQ2d 1636 (Fed. Cir. 2015).

The patentee in this case claimed methods comprising storing user-selected

pre-set limits on spending in a database, and when one of the limits is

reached, communicating a notification to the user via a device. 792 F.3d. at

1367, 115 USPQ2d at 1639-40. The Federal Circuit determined that the claims

were directed to the abstract idea of “tracking financial transactions to

determine whether they exceed a pre-set spending limit

(

i.e.,

budgeting)”, which “is 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.”

792 F.3d. at 1367-68, 115 USPQ2d at 1640.

Other examples of managing personal behavior

recited in a claim include:

i. filtering content,

BASCOM

Global Internet v. AT&T Mobility, LLC,

827 F.3d 1341,

1345-46, 119 USPQ2d 1236, 1239 (Fed. Cir. 2016) (finding that

filtering content was an abstract idea under step 2A, but reversing an

invalidity judgment of ineligibility due to an inadequate step 2B

analysis);

ii. considering historical usage

information while inputting data,

BSG Tech. LLC v.

Buyseasons, Inc.,

899 F.3d 1281, 1286, 127 USPQ2d 1688,

1691 (Fed. Cir. 2018); and

iii. a mental process that a neurologist

should follow when testing a patient for nervous system malfunctions,

In re Meyer,

688 F.2d 789, 791-93, 215 USPQ 193,

194-96 (CCPA 1982).

An example of a claim reciting social

activities is

Voter Verified, Inc. v. Election Systems &

Software, LLC,

887 F.3d 1376, 126 USPQ2d 1498 (Fed. Cir. 2018).

The social activity at issue in

Voter Verified

was

voting

and

iii. a mental process that a neurologist

should follow when testing a patient for nervous system malfunctions,

In re Meyer,

688 F.2d 789, 791-93, 215 USPQ 193,

194-96 (CCPA 1982).

An example of a claim reciting social

activities is

Voter Verified, Inc. v. Election Systems &

Software, LLC,

887 F.3d 1376, 126 USPQ2d 1498 (Fed. Cir. 2018).

The social activity at issue in

Voter Verified

was

voting. The patentee claimed “[a] method for voting providing for

self-verification of a ballot comprising the steps of” presenting an

election ballot for voting, accepting input of the votes, storing the votes,

printing out the votes, comparing the printed votes to votes stored in the

computer, and determining whether the printed ballot is acceptable. 887 F.3d

at 1384-85, 126 USPQ2d at 1503-04. The Federal Circuit found that the claims

were directed to the abstract idea of “voting, verifying the vote, and

submitting the vote for tabulation”, which is a “fundamental activity that

forms the basis of our democracy” and has been performed by humans for

hundreds of years. 887 F.3d at 1385-86, 126 USPQ2d at 1504-05.

Another example of a claim reciting social

activities is

Interval Licensing LLC, v. AOL, Inc.,

896

F.3d 1335, 127 USPQ2d 1553 (Fed. Cir. 2018). The social activity at issue

was the social activity of “’providing information to a person without

interfering with the person’s primary activity.’” 896 F.3d at 1344, 127

USPQ2d 1553 (citing

Interval Licensing LLC v. AOL, Inc.,

193 F. Supp.3d 1184, 1188 (W.D. 2014)). The patentee claimed an attention

manager for acquiring content from an information source, controlling the

timing of the display of acquired content, displaying the content, and

acquiring an updated version of the previously-acquired content when the

information source updates its content. 896 F.3d at 1339-40, 127 USPQ2d at

1555

Licensing LLC v. AOL, Inc.,

193 F. Supp.3d 1184, 1188 (W.D. 2014)). The patentee claimed an attention

manager for acquiring content from an information source, controlling the

timing of the display of acquired content, displaying the content, and

acquiring an updated version of the previously-acquired content when the

information source updates its content. 896 F.3d at 1339-40, 127 USPQ2d at

1555. The Federal Circuit concluded that “[s]tanding alone, the act of

providing someone an additional set of information without disrupting the

ongoing provision of an initial set of information is an abstract idea,”

observing that the district court “pointed to the nontechnical human

activity of passing a note to a person who is in the middle of a meeting or

conversation as further illustrating the basic, longstanding practice that

is the focus of the [patent ineligible] claimed invention.” 896 F.3d at

1344-45, 127 USPQ2d at 1559.

An example of a claim reciting following

rules or instructions is

In re Marco Guldenaar Holding

B.V.,

911 F.3d 1157, 1161, 129 USPQ2d 1008, 1011 (Fed. Cir.

2018). The patentee claimed a method of playing a dice game including

placing wagers on whether certain die faces will appear face up. 911 F.3d at

1160; 129 USPQ2d at 1011. The Federal Circuit determined that the claims

were directed to the abstract idea of “rules for playing games”, which the

court characterized as a certain method of organizing human activity. 911

F.3d at 1160-61; 129 USPQ2d at 1011.

Other examples of following rules or

instructions recited in a claim include:

i. assigning hair designs to balance head

shape,

In re Brown

, 645 Fed. Appx. 1014, 1015-16

(Fed. Cir. 2016) (non-precedential); and

ii. a series of instructions of how to

hedge risk,

Bilski v. Kappos

, 561 U.S. 593, 595, 95

USPQ2d 1001, 1004 (2010).

III.

MENTAL

PROCESSES

The courts consider a mental process (thinking)

that “can be performed in the human mind, or by a human using a pen and paper”

to be an abstract idea.

CyberSource Corp. v

hape,

In re Brown

, 645 Fed. Appx. 1014, 1015-16

(Fed. Cir. 2016) (non-precedential); and

ii. a series of instructions of how to

hedge risk,

Bilski v. Kappos

, 561 U.S. 593, 595, 95

USPQ2d 1001, 1004 (2010).

III.

MENTAL

PROCESSES

The courts consider a mental process (thinking)

that “can be performed in the human mind, or by a human using a pen and paper”

to be an abstract idea.

CyberSource Corp. v. Retail Decisions,

Inc.,

654 F.3d 1366, 1372, 99 USPQ2d 1690, 1695 (Fed. Cir. 2011).

As the Federal Circuit explained, “methods which can be performed mentally, or

which are the equivalent of human mental work, are unpatentable abstract ideas

the ‘basic tools of scientific and technological work’ that are open to all.’”

654 F.3d at 1371, 99 USPQ2d at 1694 (citing

Gottschalk v.

Benson,

409 U.S. 63, 175 USPQ 673 (1972)). See also

Mayo

Collaborative Servs. v. Prometheus Labs. Inc.,

566 U.S. 66, 71,

101 USPQ2d 1961, 1965 (2012) (“‘[M]ental processes[] and abstract intellectual

concepts are not patentable, as they are the basic tools of scientific and

technological work’” (quoting

Benson,

409 U.S. at 67, 175

USPQ at 675));

Parker v. Flook,

437 U.S. 584, 589, 198 USPQ

193, 197 (1978) (same).

Accordingly, the “mental processes” abstract

idea grouping is defined as concepts performed in the human mind, and examples

of mental processes include observations, evaluations, judgments, and opinions.

A discussion of concepts performed in the human mind, as well as concepts that

cannot practically be performed in the human mind and thus are not “mental

processes”, is provided below with respect to point A.

The courts do not distinguish between mental

processes that are performed entirely in the human mind and mental processes

that require a human to use a physical aid (

e.g.,

pen and

paper or a slide rule) to perform the claim limitation. See,

e.g.,

Benson,

409 U.S

s that

cannot practically be performed in the human mind and thus are not “mental

processes”, is provided below with respect to point A.

The courts do not distinguish between mental

processes that are performed entirely in the human mind and mental processes

that require a human to use a physical aid (

e.g.,

pen and

paper or a slide rule) to perform the claim limitation. See,

e.g.,

Benson,

409 U.S. at 67, 65, 175 USPQ at 674-75, 674 (noting that

the claimed “conversion of [binary-coded decimal] numerals to pure binary

numerals can be done mentally,”

i.e.,

“as a person would do

it by head and hand.”);

Synopsys, Inc. v. Mentor Graphics

Corp.,

839 F.3d 1138, 1139, 120 USPQ2d 1473, 1474 (Fed. Cir. 2016)

(holding that claims to a mental process of “translating a functional

description of a logic circuit into a hardware component description of the

logic circuit” are directed to an abstract idea, because the claims “read on an

individual performing the claimed steps mentally or with pencil and paper”).

Mental processes performed by humans with the assistance of physical aids such

as pens or paper are explained further below with respect to point B.

Nor do the courts distinguish between claims

that recite mental processes performed by humans and claims that recite mental

processes performed on a computer. As the Federal Circuit has explained,

“[c]ourts have examined claims that required the use of a computer and still

found that the underlying, patent-ineligible invention could be performed via

pen and paper or in a person’s mind.”

Versata Dev. Group v. SAP Am.,

Inc.,

793 F.3d 1306, 1335, 115 USPQ2d 1681, 1702 (Fed. Cir. 2015).