DETAILED ACTION
Notice of Pre-AIA or AIA Status
The present application is being examined under the pre-AIA first to invent provisions.
Response to Arguments
Applicant's arguments filed in the Amendment (“Response”) on 30 July 2026 have been fully considered but they are not persuasive.
Using computers to apply commonplace ideas-such as generating payroll-is not a patentable invention, even if the computer is able to handle volumes and complexity at levels impossible for humans. See Alice, 134 S. Ct. at 2350 ("Neither stating an abstract idea while adding the words 'apply it,' nor limiting the use of an abstract idea to a particular technological environment, is enough for patent eligibility." (internal quotation marks omitted) (quoting Mayo,132 S. Ct. at 1294; Bilski, 561 U.S. at 610-611). Simply utilizing a generic cloud-based computer system to record, receive and generate information and to perform conventional calculations faster and more efficiently is not enough to transform a patentineligible claim into a patent-eligible invention. See Bancorp Servs. LLC v. Sun Life Assurance Co. of Canada, 687 F.3d 1266, 1279 (Fed. Cir. 2012) (finding a claim not patent-eligible when “the computer simply performs more efficiently what could otherwise be accomplished manually”); SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1333 (Fed. Cir. 2010) (“In order for the addition of a machine to impose a meaningful limit on the scope of a claim, it must play a significant part in permitting the claimed method to be performed, rather than function solely as an obvious mechanism for permitting a solution to be achieved more quickly . . . .”). Nearly every computer has the capability of performing the basic calculation, storage, and transmission functions. See Alice, 134 S. Ct. at 2360. At most, the computer implementation involved in the claims at issue here is an attempt to limit use of the abstract concept to a particular technological environment. That, however, is insufficient to transform a patent-ineligible abstract idea into a patent-eligible invention. See id. at 2358; Mayo, 132 S. Ct. at 1294; Bilski, 561 U.S. at 610–11; Diamond v. Diehr, 450 U.S. 175, 191 (1981).
Claims 30-48 are unlike the claims in Enfish. There, the Court relied on the distinction made in Alice between, on one hand, computer-functionality improvements and, on the other, uses of existing computers as tools in aid of processes focused on “abstract ideas” (in Alice, as in so many other § 101 cases, the abstract ideas being the creation and manipulation of legal obligations such as contracts involved in fundamental economic practices). Enfish, 822 F.3d at 1335–36; see Alice, 134 S. Ct. at 2358–59. That distinction, the Supreme Court recognized, has common-sense force even if it may present line-drawing challenges because of the programmable nature of ordinary existing computers. In Enfish, the Court applied the distinction to reject the § 101 challenge at stage one because the claims at issue focused not on asserted advances in uses to which existing computer capabilities could be put, but on a specific improvement—a particular database technique—in how computers could carry out one of their basic functions of storage and retrieval of data. Enfish, 822 F.3d at 1335–36; see Bascom, 2016 WL 3514158, at *5; cf. Alice, 134 S. Ct. at 2360 (noting basic storage function of generic computer). The present case is different: the focus of the claims is not on such an improvement in computers as tools, but on certain independently abstract ideas that use computers as tools.
Claim Rejections - 35 USC § 101
35 U.S.C. 101 reads as follows:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
Claims 30-48 are rejected under 35 U.S.C. § 101 because the claimed invention is directed to a judicial exception (i.e., an abstract idea) without “significantly more.” Claims 30-48 are directed to recording and sending transaction information, sending employee information, recording transaction and employee information for the accounting period, recording gratuity distribution information, calculating a first gratuity allocation, generating a plurality of first payroll reports, receiving at least one updated transaction information, calculating a second gratuity allocation and generating second payroll report which is considered an abstract idea. Further, the claim(s) as a whole, when examined on a limitation-by-limitation basis and in ordered combination do not include an inventive concept.
Step 1 – Statutory Categories
As indicated in the preamble of the claims, the examiner finds the claims are directed to a process and machine.
Step 2A – Prong One - Abstract Idea Analysis
Exemplary claim 30 (and similarly claim 37) recites the following abstract concepts, in italics below, which are found to include an “abstract idea”:
A method of managing gratuity allocations with a cloud-based gratuity management system, comprising:
recording original transaction information for sales at each of a plurality of businesses on respective business computing systems located at each of the plurality of businesses, wherein the original transaction information includes information about sales and associated gratuities paid in connection with those sales;
causing the original transaction information for an accounting period for each of the plurality of businesses to be sent from the plurality of respective business computing systems to a cloud-based gratuity management system;
causing original employee information for the accounting period to be sent from the plurality of businesses to the cloud-based gratuity management system, where the original employee information for each business indicates the hours worked by a plurality employees of the business during the accounting period;
recording the original transaction information for the accounting period sent from the respective plurality of business computing systems in at least one transaction database of the cloud-based gratuity management system;
recording the original employee information for the accounting period sent from the plurality of businesses in at least one employee database of the cloud-based gratuity management system;
recording gratuity distribution information for each of the plurality of businesses in at least one gratuity rules database of the cloud-based gratuity management system, wherein the gratuity distribution information for each of the plurality of businesses indicates how gratuities are to be allocated to employees of that business;
calculating, with the cloud-based gratuity management system, a plurality of first gratuity allocations for the accounting period, each of the plurality of first gratuity allocations being for a different one of the plurality of businesses and being based on the recorded gratuity distribution information, the recorded original transaction information for the accounting period and the recorded original employee information for the accounting period;
generating, with the cloud-based gratuity management system, a plurality of first electronic payroll reports for the accounting period, each of the plurality of first electronic payroll reports being for a different one of the plurality of businesses, wherein each first electronic payroll report for the accounting period can be electronically submitted to a payroll system, wherein each first electronic payroll report for the accounting period includes information about the calculated first gratuity allocation for the respective business for the accounting period, and wherein each first electronic payroll report for the accounting period is generated after the first gratuity allocation for the business for the accounting period has been calculated;
receiving at the cloud-based gratuity management system, and subsequent to generating a first electronic payroll report for the accounting period for a first business of the plurality of businesses, at least one of updated transaction information for the accounting period for the first business and updated employee information for the accounting period for the first business, where updated transaction information for the first business includes at least one change relative to the original transaction information for the first business and where updated employee information for the first business includes at least one change relative to the original employee information for the first business;
calculating with the cloud-based gratuity management system a second gratuity allocation for the accounting period for the first business using at least one of the updated transaction information for the first business and the updated employee information for the first business, wherein the step of calculating the second gratuity allocation for the accounting period for the first business is performed immediately after receiving updated transaction information for the first business or updated employee information for the first business; and
generating with the cloud-based gratuity management system a second electronic payroll report for the accounting period for the first business that can be submitted to the payroll system for the first business, wherein the second electronic payroll report for the accounting period for the first business includes information about the calculated second gratuity allocation for the accounting period for the first business and/or differences between the first gratuity allocation for the accounting period for the first business and the second gratuity allocation for the accounting period for the first business.
The claim features in italics above as drafted, under its broadest reasonable interpretation, are mental processes and/or certain methods of organizing human activity performed by generic computer components. That is, other than reciting “a plurality of respective business computing systems”, “a cloud-based gratuity management system,” “at least one employee database”, “at least one transaction database”, “at least one gratuity rules database”, “electronically submitted to a payroll system”, “a first electronic payroll report” and “a second electronic payroll report”, nothing in the claim element precludes the step from practically being performed in the mind or a method of organized human activity. While Examiner is treating herein each of the recited systems as an additional element, the systems do not necessarily equate to a physical components, i.e. a processor or computer, and are therefore not necessarily additional elements. Further, the payroll report itself is not an additional element, but it being electronic or electronically submitted makes it non-abstract and therefore an additional element. For example, but for the “plurality of respective business computing systems”, “cloud-based gratuity management system,” “at least one employee database”, “at least one transaction database”, “at least one gratuity rules database” and “payroll system” language, “recording original transaction information for sales at each of a plurality of businesses … located at each of the plurality of businesses, wherein the original transaction information includes information about sales and associated gratuities paid in connection with those sales; recording the original transaction information for the accounting period sent from the respective plurality of business …; recording the original employee information for the accounting period sent from the plurality of businesses …; recording gratuity distribution information for each of the plurality of businesses …, wherein the gratuity distribution information for each of the plurality of businesses indicates how gratuities are to be allocated to employees of that business; calculating… a plurality of first gratuity allocations for the accounting period, each of the plurality of first gratuity allocations being for a different one of the plurality of businesses and being based on the recorded gratuity distribution information, the recorded original transaction information for the accounting period and the recorded original employee information for the accounting period; generating… a plurality of first … payroll reports for the accounting period, each of the plurality of first … payroll reports being for a different one of the plurality of businesses, wherein each first … payroll report for the accounting period can be … submitted …, wherein each first … payroll report for the accounting period includes information about the calculated first gratuity allocation for the respective business for the accounting period, and wherein each first electronic payroll report for the accounting period is generated after the first gratuity allocation for the business for the accounting period has been calculated; calculating … a second gratuity allocation for the accounting period for the first business using at least one of the updated transaction information for the first business and the updated employee information for the first business, wherein the step of calculating the second gratuity allocation for the accounting period for the first business is performed immediately after receiving updated transaction information for the first business or updated employee information for the first business; and generating … a second … payroll report for the accounting period for the first business that can be submitted … for the first business, wherein the second … payroll report for the accounting period for the first business includes information about the calculated second gratuity allocation for the accounting period for the first business and/or differences between the first gratuity allocation for the accounting period for the first business and the second gratuity allocation for the accounting period for the first business” in the context of this claim encompasses mental processes. If the claim limitations, under its broadest reasonable interpretation, covers steps which could be performed in the human mind including an observation, evaluation, judgement of opinion but for the recitation of generic computer components, then it falls within the “mental process” grouping of abstract ideas. Further, “causing the original transaction information for an accounting period for each of the plurality of businesses to be sent …; causing original employee information for the accounting period to be sent from the plurality of businesses …, where the original employee information for each business indicates the hours worked by a plurality employees of the business during the accounting period; receiving …, and subsequent to generating a first … payroll report for the accounting period for a first business of the plurality of businesses, at least one of updated transaction information for the accounting period for the first business and updated employee information for the accounting period for the first business, where updated transaction information for the first business includes at least one change relative to the original transaction information for the first business and where updated employee information for the first business includes at least one change relative to the original employee information for the first business” in the context of this claim encompasses certain methods of organizing human activity. If the claim limitations, under its broadest reasonable interpretation, covers a fundamental economic practice, commercial or legal interaction or managing personal behavior or relationships or interactions between people but for the recitation of generic computer components, then it falls within the “certain methods of organizing human activity” grouping of abstract ideas. Accordingly, the claim recites an abstract idea.
Step 2A – Prong Two - Abstract Idea Analysis
This judicial exception is not integrated into a practical application. In particular, the claim only recites five additional elements – “a plurality of respective business computing systems”, “a cloud-based gratuity management system,” “at least one employee database”, “at least one transaction database”, “at least one gratuity rules database”, “electronically submitted to a payroll system”, “a first electronic payroll report” and “a second electronic payroll report”. The “plurality of respective business computing systems”, “cloud-based gratuity management system,” “at least one employee database”, “at least one transaction database”, “at least one gratuity rules database”, “electronically submitted to a payroll system”, “first electronic payroll report” and “second electronic payroll report” are recited at a high-level of generality (i.e., as a generic processor performing generic computer functions) such that it amounts no more than mere instructions to apply the exception using a generic computer component (MPEP 2106.05(f), i.e. the recording, causing (sending), calculating and generating steps), data gathering, which is a form of insignificant extra-solution activity (MPEP 2106.05(g), i.e. the receiving step) and linking the use of the judicial exception to a particular technological environment or field of use (MPEP 2106.05(h), i.e. gratuity/payroll management). Accordingly, these additional elements do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea. The claim is directed to an abstract idea.
Step 2B - Significantly More Analysis
The claim does not include additional elements that are sufficient to amount to
significantly more than the judicial exception. As discussed above with respect to integration of the abstract idea into a practical application, the additional element of “a plurality of respective business computing systems”, “a cloud-based gratuity management system,” “at least one employee database”, “at least one transaction database”, “at least one gratuity rules database”, “electronically submitted to a payroll system”, “a first electronic payroll report” and “a second electronic payroll report” amount to no more than mere instructions to apply the exception using a generic computer component, insignificant extra-solution activity and linking the use of the judicial exception to a particular technological environment or field of use. Mere instructions to apply the exception using a generic computer component, insignificant extra-solution activity and linking the use of the judicial exception to a particular technological environment or field of use cannot provide an inventive concept. Further, the background does not provide any indication that the “plurality of respective business computing systems”, “cloud-based gratuity management system,” “at least one employee database”, “at least one transaction database”, “at least one gratuity rules database”, “electronically submitted to a payroll system”, “first electronic payroll report” and “second electronic payroll report” are anything other than a generic, off-the-shelf computer components. For these reasons, there is no inventive concept. The claim is not patent eligible.
Conclusion
THIS ACTION IS MADE FINAL. Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a).
A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory action is mailed, and any nonprovisional extension fee (37 CFR 1.17(a)) pursuant to 37 CFR 1.136(a) will be calculated from the mailing date of the advisory action. In no event, however, will the statutory period for reply expire later than SIX MONTHS from the mailing date of this final action.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to Hunter Wilder whose telephone number is (571)270-7948. The examiner can normally be reached Monday-Friday 8:30AM-5:30PM.
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If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Florian Zeender can be reached at (571)272-6790. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
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/A. Hunter Wilder/Primary Examiner, Art Unit 3627
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