Federal Circuit Affirms Section 101 Rejection of Pro Se Applicant’s Bartering Method Claims

The U.S. Court of Appeals for the Federal Circuit (CAFC) issued a decision today in In re Wenkman affirming a Patent Trial and Appeal Board (PTAB) decision that upheld the rejection of all pending claims in a pro se applicant’s patent application directed to a computer-implemented method for bartering groceries and other goods for silver and gold. The CAFC agreed with the Board that the claims are directed to an abstract idea and lack an inventive concept under 35 U.S.C. Section 101.

Gregory John Wenkman appealed the Board’s affirmation of the rejection of claims 1 through 20 of U.S. Patent Application No. 18/424,833. The application describes a method that lets a business enter into barter transactions by exchanging groceries and other goods with customers for silver or gold. A computer-implemented program assigns a bartered value, which the specification distinguishes from any nation’s currency, to a card, token, or mobile device.

The specification states that the patentable subject matter is the computer-implemented process and an inventive concept produced by a “special computer program,” rather than the electronically activated physical devices recited in the claims. The CAFC observed that the specification provides no further description of that program.

In a final office action, the examiner rejected claims 1 through 20 as patent ineligible under Section 101. The Board affirmed the examiner’s rejection and added a separate ground for rejecting all claims for lack of written description under 35 U.S.C. Section 112(a). After the Board denied a request for rehearing, Wenkman timely appealed, arguing that the Board erred in its Section 101 and written description determinations. The CAFC exercised jurisdiction under 28 U.S.C. Section 1295(a)(4)(A).

Chief Judge Moore and Circuit Judges Dyk and Prost issued a per curiam decision that reviewed the Section 101 determination de novo. Under the two-step framework established in Alice Corp. v. CLS Bank International, step one asks whether a claim is directed to a patent-ineligible concept, such as an abstract idea. Step two examines whether the claim elements, individually and as an ordered combination, provide an inventive concept that transforms the claim into a patent-eligible application.

The CAFC cited precedent explaining that claimed functions that can be performed as mental processes or with pencil and paper indicate abstraction, and that invoking a computer merely as a tool to improve a fundamental practice is not enough. At step two, covering conventional computers and networks carrying out their usual operations does not suffice, even when the claim is limited to a particular use or environment.

The Board designated claim 1 as representative, and the CAFC did not disturb that designation. Claim 1 recites a business that sells and barter groceries and other goods and a customer who presents silver or gold in the form of a coin, token, bar, or bill. A computer-implemented program determines a barter value that the customer accepts or rejects, and the business assigns the bartered value electronically to a card, token, or mobile device with a unique identifying code. At checkout, the business exchanges or debits the bartered value for selected goods using an electronic scanner or reader.

The Federal Circuit “agreed with the Board’s determination that the claim is directed to the abstract idea of organizing human activity in the context of a fundamental economic practice (bartering).” The CAFC explained that the claim uses a computer to carry out bartering, and that processes directed to a fundamental economic practice are abstract.

In support, the CAFC cited Alice, which concluded that claims for intermediated settlement were directed to an abstract idea, and Bilski v. Kappos, which concluded that hedging is an unpatentable abstract idea. The CAFC also cited cxLoyalty, Inc. v. Maritz Holdings Inc., which concerned claims directed to brokering a transaction between a purchaser using one form of value and a seller transacting in another. The court also cited Smart Systems Innovations, LLC v. Chicago Transit Authority, which reached the same conclusion for claims directed to forming financial transactions in a particular field and collecting related data.

At Alice step two, the CAFC held that claim 1 “does not contain an inventive concept.” The claim elements invoke a generic computer and an electronically activated card, mobile device, or tablet to perform basic computer functions such as receiving, transmitting, processing, and displaying data. The CAFC cited Alice, stating that “mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.” The CAFC also cited BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC for the requirement that the elements of a computer-related claim be significantly more than the abstract idea itself.

The CAFC concluded that the Board correctly affirmed the examiner’s rejection of the ‘833 application’s claims under Section 101. Since the CAFC affirmed on that basis, it did not reach Wenkman’s challenge to the written description ruling, and found Wenkman’s remaining arguments unpersuasive. Ultimately, the CAFC affirmed the Board’s decision affirming the examiner’s rejection of claims 1 through 20 of the ‘833 application under Section 101.