DETAILED ACTION
Response to Amendment
This Final office action is in response to Applicant’s amendment filed 5/4/2026. Claims 1, 8 and 15 have been amended. Claims 1-20 are pending.
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Applicant's arguments filed 5/4/2026 have been fully considered but they are not persuasive.
The previously pending objection to the specification has been withdrawn.
Terminal Disclaimer
The terminal disclaimer filed on 5/4/2026 disclaiming the terminal portion of any patent granted on this application which would extend beyond the expiration date of USPN 12240856 has been reviewed and is accepted. The terminal disclaimer has been recorded.
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 1-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to non-statutory subject matter. The claims are directed to an abstract idea without significantly more.
Here, under step 1 of the Alice analysis, method claims 1-7 are directed to a series of steps, system claims 8-14 are directed to a server, comprising one or more processors and memory, and computer-readable medium claims 15-20 are embodied with software. Thus the claims are directed to a process, machine, and manufacture, respectively.
Under step 2A Prong One of the analysis, the claimed invention is directed to an abstract idea without significantly more. The claims recite improving an inventory policy, including receiving, determining, solving, calculating, performing and transporting steps.
The limitations of receiving, determining, solving, calculating, performing and transporting, are a process that, under its broadest reasonable interpretation, covers organizing human activity concepts, but for the recitation of generic computer components.
Specifically, the claim elements recite receiving an inventory policy based on a demand distribution and a target service level for each of one or more items, wherein a current state of each of the one or more items is based at least in part on received item data; determining a transition matrix to assess a quality of one or more inventory policies; solving the transition matrix to determine a solution vector, wherein the solution vector comprises a probability of being in a state at any time; calculating a cost associated with each possible inventory state; calculating a fill rate by calculating an expected backlog; calculating a proportion of a time that an inventory is not in a stockout state; performing a local search to determine an improved inventory policy; and based on the determined improved inventory policy, causing items to be transported among one or more supply chain entities to restock inventory according to a current state of items in a supply chain network.
That is, other than reciting a computer and automated machinery, the claim limitations merely cover commercial interactions, including sales activities and business relations, thus falling within the “Certain Methods of Organizing Human Activity” grouping of abstract ideas. Accordingly, the claims recite an abstract idea.
Under Step 2A Prong Two, the eligibility analysis evaluates whether the claim as a whole integrates the recited judicial exception into a practical application of the exception. This judicial exception is not integrated into a practical application. The claims include a computer and automated machinery. The computer and automated machinery in the steps is recited at a high-level of generality, such that it amounts no more than mere instructions to apply the exception using a generic computer component. Accordingly, this additional element does not integrate the abstract idea into a practical application because it does not impose any meaningful limits on practicing the abstract idea. As a result, the claims are directed to an abstract idea.
The claims do 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 computer and automated machinery amounts to no more than mere instructions to apply the exception using a generic computer component. Mere instructions to apply an exception using a generic computer component cannot provide an inventive concept.
Further, the claim limitation “transporting by the automated machinery items among the one or more supply chain entities to restock the inventory of the one or more items according to the current state of items in the supply chain network” is deemed to merely be insignificant extra-solution activity.
Limitations that the courts have found not to be enough to qualify as "significantly more" when recited in a claim with a judicial exception include: iii. Adding insignificant extra-solution activity to the judicial exception, e.g., mere data gathering in conjunction with a law of nature or abstract idea such as a step of obtaining information about credit card transactions so that the information can be analyzed by an abstract mental process, as discussed in CyberSource v. Retail Decisions, Inc., 654 F.3d 1366, 1375, 99 USPQ2d 1690, 1694 (Fed. Cir. 2011). See MPEP §2106.05(I)(A).
As explained by the Supreme Court, the addition of insignificant extra-solution activity does not amount to an inventive concept, particularly when the activity is well-understood or conventional. Parker v. Flook, 437 U.S. 584, 588-89, 198 USPQ 193, 196 (1978). In Flook, the Court reasoned that "[t]he notion that post-solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process exalts form over substance. A competent draftsman could attach some form of post-solution activity to almost any mathematical formula". 437 U.S. at 590; 198 USPQ at 197; Id. (holding that step of adjusting an alarm limit variable to a figure computed according to a mathematical formula was "post-solution activity"). See also Mayo Collaborative Servs. v. Prometheus Labs. Inc., 566 U.S. 66, 79, 101 USPQ2d 1961, 1968 (2012) (additional element of measuring metabolites of a drug administered to a patient was insignificant extra-solution activity). See MPEP §2106.05(g).
None of the dependent claims recite additional limitations that are sufficient to amount to significantly more than the abstract idea. Claims 2-5 and 7 further describe the transition matrix, the calculated cost and the expected backlog. Claim 6 recites an additional calculating step. Similarly, dependent claims 9-14 and 16-20 recite additional details that further restrict/define the abstract idea. A more detailed abstract idea remains an abstract idea.
Under step 2B of the analysis, the claims include, inter alia, a computer and automated machinery.
As discussed with respect to Step 2A Prong Two, the additional elements in the claim amount to no more than mere instructions to apply the exception using a generic computer component. The same analysis applies here in 2B, i.e., mere instructions to apply an exception on a generic computer cannot integrate a judicial exception into a practical application at Step 2A or provide an inventive concept in Step 2B.
There isn’t any improvement to another technology or technical field, or the functioning of the computer itself. Moreover, individually, there are not any meaningful limitations beyond generally linking the abstract idea to a particular technological environment, i.e., implementation via a computer system. Further, taken as a combination, the limitations add nothing more than what is present when the limitations are considered individually. There is no indication that the combination provides any effect regarding the functioning of the computer or any improvement to another technology.
In addition, as discussed in paragraph 0032 of the specification, “FIGURE 2 illustrates inventory planner 110 of FIGURE 1 in greater detail in accordance with an embodiment. As discussed above, inventory planner 110 may comprise one or more computers 160 at one or more locations including associated input devices 162, output devices 164, non-transitory computer-readable storage media, processors 166, memory, or other components for receiving, processing, storing, and communicating information according to the operation of supply chain network 100. Additionally, inventory planner 110 comprises server 112 and database 114. Although inventory planner 110 is shown as comprising a single computer 160, a single server 112 and a single database 114; embodiments contemplate any suitable number of computers, servers, or databases internal to or externally coupled with inventory planner 110.”
As such, this disclosure supports the finding that no more than a general purpose computer, performing generic computer functions, is required by the claims.
Viewed as a whole, these additional claim element(s) do not provide meaningful limitation(s) to transform the abstract idea into a patent eligible application of the abstract idea such that the claim(s) amounts to significantly more than the abstract idea itself. Therefore, the claim(s) are rejected under 35 U.S.C. 101 as being directed to non-statutory subject matter. See Alice Corporation Pty. Ltd. v. CLS Bank Int’l et al., No. 13-298 (U.S. June 19, 2014).
Response to Arguments
In the Remarks, Applicant argues that Applicants' claims are not directed to "abstract ideas" such as mathematical concepts, certain methods of organizing human activity, mental processes, laws of nature or natural phenomena. Therefore, since Applicants' claims do not recite matter that falls within the enumerating groupings of abstract ideas, Applicants' claims should not be treated as reciting an abstract idea.
Furthermore, even if Applicants' claims recites a judicial exception (a law of nature, a natural phenomenon, or the enumerating groupings of abstract ideas), which they do not, the Examiner must analyze Applicants' claims to determine whether any alleged judicial exception is integrated into a practical application of that exception. Applicants respectfully submit that Applicants' claims are not "directed to" a judicial exception, and thus are patent eligible, for at least the reason that Applicants' claims as a whole integrates any alleged judicial exception into a practical application of that exception. Appropriate clarification is respectfully requested.
Applicants respectfully submit that Applicants' claimed additional elements, among other things, integrate any abstract idea into a practical application. Specifically: receiving, by the computer, an inventory policy based on a demand distribution and a target service level for each of one or more items, wherein a current state of each of the one or more items is based at least in part on received item data from automated machinery; determining, by the computer, a transition matrix to assess a quality of one or more inventory policies; solving, by the computer, the transition matrix to determine a solution vector, wherein the solution vector comprises a probability of being in a state at any time; calculating, by the computer, a cost associated with each possible inventory state; calculating, by the computer, a fill rate by calculating an expected backlog; calculating, by the computer, a proportion of a time that an inventory is not in a stockout state; performing, by the computer, a local search to determine an improved inventory policy; and based on the determined improved inventory policy, causing, by the computer, items to be transported by the automated machinery among one or more supply chain entities to restock inventory according to the current state of items in a supply chain network integrates any abstract idea into a practical application.
Applicants respectfully direct the Examiner to paragraphs [0029]-[0031], [0038] and Figure 3 of Applicants' specification. Applicants thus respectfully submit that the claimed invention is not directed to an abstract idea of merely performing generic supply chain planning, but as a whole, because of the claimed additional elements, integrates any abstract idea into a practical application. The Examiner respectfully disagrees.
As described in paragraph 0040 of Applicant’s specification, “In one embodiment, demand data 210 of database 114 may comprise for example, any data relating to past sales, past demand, purchase data, promotions, events, or the like of one or more supply chain entities 150. Demand data 210 may be stored at time intervals such as, for example, by the minute, hour, daily, weekly, monthly, quarterly, yearly, or any suitable time interval, including substantially in real time. According to embodiments, demand data 210 includes a demand function, comprising demand values and probabilities. For a historical demand, a demand function may comprise probabilities calculated from a frequency associated with demand value for one or more time steps. According to embodiments, demand data 210 may be used to determine a discrete demand distribution and/or a target service level.”
Additionally, paragraph 0053 recites “In one embodiment, the determined transition matrix may comprise a set of states of different inventory levels and the probability of transitioning between each pair of states. The transition matrix may depend on the particular demand distribution and the inventory policy that is evaluated. The transition matrix may be determined from an (s, S) inventory policy, which is not based on a fixed order quantity. According to embodiments, the discrete demand probability may be received by one or more supply chain entities 150 or calculated by inventory policy generator 200 based on, for example, historical sales or other demand data.”
Following, the claim limitations merely cover commercial interactions, including sales activities and business relations, thus falling within the “Certain Methods of Organizing Human Activity” grouping of abstract ideas. Accordingly, the claims recite an abstract idea.
Under Step 2A Prong Two, the eligibility analysis evaluates whether the claim as a whole integrates the recited judicial exception into a practical application of the exception. This evaluation is performed by (a) identifying whether there are any additional elements recited in the claim beyond the judicial exception, and (b) evaluating those additional elements individually and in combination to determine whether the claim as a whole integrates the exception into a practical application. 2019 PEG Section III(A)(2), 84 Fed. Reg. at 54-55. Besides the abstract idea, the claims include a computer and automated machinery.
The computer and automated machinery in the steps is recited at a high-level of generality, such that it amounts no more than mere instructions to apply the exception using a generic computer component. These limitations can also be viewed as nothing more than an attempt to generally link the use of the judicial exception to the technological environment of a computer. It should be noted that because the courts have made it clear that mere physicality or tangibility of an additional element or elements is not a relevant consideration in the eligibility analysis, the physical nature of these computer components does not affect this analysis. See MPEP 2106.05(I) for more information on this point, including explanations from judicial decisions including Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208, 224-26 (2014).
Even when viewed in combination, the additional elements in the claims do no more than use computer components as a tool (i.e., a computer and automated machinery). There is no change to the computers and/or other technology recited in the claims, thus the claims do not improve computer functionality or other technology. See, e.g., Trading Technologies Int’l v. IBG, Inc., 921 F.3d 1084, 1093 (Fed. Cir. 2019) (using a computer to provide a trader with more information to facilitate market trades improved the business process of market trading, but not the computer) and the cases discussed in MPEP 2106.05(a)(I), particularly FairWarning IP, LLC v. Iatric Sys., 839 F.3d 1089, 1095 (Fed. Cir. 2016) (accelerating a process of analyzing audit log data is not an improvement when the increased speed comes solely from the capabilities of a general-purpose computer) and Credit Acceptance Corp. v. Westlake Services, 859 F.3d 1044, 1055 (Fed. Cir. 2017) (using a generic computer to automate a process of applying to finance a purchase is not an improvement to the computer’s functionality). Accordingly, the claim as a whole does not integrate the recited judicial exception into a practical application and the claim is directed to the judicial exception.
Moreover, as described in paragraph 0030, “For example, the methods described herein may include computers receiving product data from automated machinery having at least one sensor and the product data corresponding to an item detected by the automated machinery. The received product data may include an image of the item, an identifier, as described above, and/or other product data associated with the item (dimensions, texture, estimated weight, and any other like data). The method may further include computers looking up the received product data in a database system associated with inventory planner 110, inventory system 120, and/or transportation network 140 to identify the item corresponding to the product data received from the automated machinery.”
Following, here, the automated machinery merely functions as obvious data gathering mechanisms. This type of data gathering is similar to that seen in Content Extraction v. Wells Fargo Bank (Fed. Cir. Dec. 23, 2014), which found that a scanner using known OCR technology was not significantly more than the abstract idea.
Further, the claim limitation “causing, by the computer, items to be transported by the automated machinery among one or more supply chain entities to restock inventory according to the current state of items in a supply chain network” is deemed to merely be insignificant extra-solution activity.
Limitations that the courts have found not to be enough to qualify as "significantly more" when recited in a claim with a judicial exception include: iii. Adding insignificant extra-solution activity to the judicial exception, e.g., mere data gathering in conjunction with a law of nature or abstract idea such as a step of obtaining information about credit card transactions so that the information can be analyzed by an abstract mental process, as discussed in CyberSource v. Retail Decisions, Inc., 654 F.3d 1366, 1375, 99 USPQ2d 1690, 1694 (Fed. Cir. 2011). See MPEP §2106.05(I)(A).
As explained by the Supreme Court, the addition of insignificant extra-solution activity does not amount to an inventive concept, particularly when the activity is well-understood or conventional. Parker v. Flook, 437 U.S. 584, 588-89, 198 USPQ 193, 196 (1978). In Flook, the Court reasoned that "[t]he notion that post-solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process exalts form over substance. A competent draftsman could attach some form of post-solution activity to almost any mathematical formula". 437 U.S. at 590; 198 USPQ at 197; Id. (holding that step of adjusting an alarm limit variable to a figure computed according to a mathematical formula was "post-solution activity"). See also Mayo Collaborative Servs. v. Prometheus Labs. Inc., 566 U.S. 66, 79, 101 USPQ2d 1961, 1968 (2012) (additional element of measuring metabolites of a drug administered to a patient was insignificant extra-solution activity). See MPEP §2106.05(g).
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 ANDRE D BOYCE whose telephone number is (571)272-6726. The examiner can normally be reached M-F 10a-6:30p.
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/ANDRE D BOYCE/Primary Examiner, Art Unit 3623 July 9, 2026
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