DETAILED ACTION
This action is responsive to papers filed on 6/25/2026.
Notice of Pre-AIA or AIA Status
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
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 1-8 are rejected under 35 U.S.C. 101 because, while the claims herein are directed to a method and/or system, which could be classified under one of the listed statutory classifications (i.e., 2019 Revised Patent Subject Matter Eligibility Guidance (hereinafter “PEG”) “PEG” Step 1=Yes), the claimed invention is directed to a judicial exception (i.e., a law of nature, a natural phenomenon, or an abstract idea) without significantly more.
Regarding claims 1, 5, the claims recite, in part, maintaining at least one auction rule that that specifies how to adjust a bid for a search term in an internet advertising auction in the case that the auction is determined to be uncontested, wherein a successful bid for a search term results in a corresponding paid ad provided by an advertiser appearing in a search engine results page (SERP) that is returned by a search engine in response to a search on the search term, and, wherein in an uncontested auction the SERP displays only one paid ad, the corresponding paid ad; receiving a search term; computing a contest score that estimates the likelihood that an auction for the search term is uncontested; determining, based on the contest score that the auction is uncontested; and performing an uncontested auction method that executes a bid for the search term, wherein the performing comprises: executing a bid walkdown method that lowers the reserve price for the search term, and executing a bid for the search term at the lowered reserve price.
The limitations, as drafted and detailed above, recites performing an uncontested advertising auction, which falls within the “Certain Methods of Organizing Human Activity” grouping of abstract ideas, and more specifically commercial interactions including advertising, marketing or sales activities or behaviors. Accordingly, the claim recites an abstract idea (i.e. “PEG” Revised Step 2A Prong One=Yes).
This judicial exception is not integrated into a practical application. In particular, the claims only recite the additional elements of computer-implemented (claim 1, no physical hardware is claimed), server computer (claim 5), processor (claim 5), communication interface (claim 5), data storage (claim 5), and memory (claim 5). The additional technical elements above are recited at a high-level of generality (i.e. as a generic processor performing a generic computer function of maintaining, receiving, computing, determining, and performing) such that it amounts to no more than mere instructions to apply the exception using a generic computer component. There are no additional functional limitations to be considered under prong two.
Accordingly, the additional technical elements above do not integrate the abstract idea/judicial exception into a practical application because it does not impose any meaningful limits on practicing the abstract idea. More specifically, the additional elements fail to include (1) improvements to the functioning of a computer or to any other technology or technical field (see MPEP 2106.05(a)), (2) applying or using a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition (see Vanda memo), (3) applying the judicial exception with, or by use of, a particular machine (see MPEP 2106.05(b)), (4) effecting a transformation or reduction of a particular article to a different state or thing (see MPEP 2106.05(c)), or (5) applying or using the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception (see MPEP 2106.05(e) and Vanda memo).
Rather, the limitations merely add the words “apply it” (or an equivalent) with the judicial exception, or mere instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea (see MPEP 2106.05(f)), or generally link the use of the
judicial exception to a particular technological environment or field of use (see MPEP 2106.05(h)). Thus, the claim is “directed to” an abstract idea (i.e. “PEG” Revised Step 2A Prong Two=Yes).
When considering Step 2B of the Alice/Mayo test, the claim(s) does/do not include additional elements that are sufficient to amount to significantly more than the judicial exception because the claims do not amount to significantly more than the abstract idea.
More specifically, as discussed above with respect to integration of the abstract idea into a practical application, the additional elements of using computer-implemented (claim 1, no physical hardware is claimed), server computer (claim 5), processor (claim 5), communication interface (claim 5), data storage (claim 5), and memory (claim 5) to perform the claimed functions amounts to no more than mere instructions to apply the exception using a generic computer component.
“Generic computer implementation” is insufficient to transform a patent-ineligible abstract idea into a patent-eligible invention (See Affinity Labs, _F.3d_, 120 U.S.P.Q.2d 1201 (Fed. Cir. 2016), citing Alice, 134 S. Ct. at 2352, 2357) and more generally, “simply appending conventional steps specified at a high level of generality” to an abstract idea does not make that idea patentable (See Affinity Labs, _F.3d_, 120 U.S.P.Q.2d 1201 (Fed. Cir. 2016), citing Mayo, 132 S. Ct. at 1300). Moreover, “the use of generic computer elements like a microprocessor or user interface do not alone transform an otherwise abstract idea into patent-eligible subject matter (See FairWarning, 120 U.S.P.Q.2d. 1293, citing DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014)). As such, the additional elements of the claim do not add a meaningful limitation to the abstract idea because they would be generic computer functions in any computer implementation. Thus, taken alone, the additional elements do not amount to significantly more than the above-identified judicial exception (the abstract idea). Looking at the limitations as an ordered combination adds nothing that is not already present when looking at the elements taken individually. There is no indication that the combination of elements improves the functioning of the computer or improves any other technology. Their collective functions merely provide generic computer implementation.
The Examiner notes simply implementing an abstract concept on a computer, without meaningful limitations to that concept, does not transform a patent-ineligible claim into a patent- eligible one (See Accenture, 728 F.3d 1336, 108 U.S.P.Q.2d 1173 (Fed. Cir. 2013), citing Bancorp, 687 F.3d at 1280), limiting the application of an abstract idea to one field of use does not necessarily guard against preempting all uses of the abstract idea (See Accenture, 728 F.3d 1336, 108 U.S.P.Q.2d 1173 (Fed. Cir. 2013), citing Bilski, 130 S. Ct. at 3231), and further the prohibition against patenting an abstract principle “cannot be circumvented by attempting to limit the use of the [principle] to a particular technological environment” (See Accenture, 728 F.3d 1336, 108 U.S.P.Q.2d 1173 (Fed. Cir. 2013), citing Flook, 437 U.S. at 584), and finally merely limiting the field of use of the abstract idea to a particular existing technological environment does not render the claims any less abstract (See Affinity Labs, _F.3d_, 120 U.S.P.Q.2d 1201 (Fed. Cir. 2016), citing Alice, 134 S. Ct. at 2358; Mayo, 132 S. Ct. at 1294; Bilski v. Kappos, 561 U.S. 593, 612 (2010); Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat' l Ass' n, 776 F.3d 1343, 1348 (Fed. Cir. 2014); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014).
Applicant herein only requires a general purpose computer (see Applicant specification Figure 1, paragraphs 0038-0046); therefore, there does not appear to be any alteration or modification to the generic activities indicated, and they are also therefore recognized as insignificant activity with respect to eligibility.
The dependent claims 2-4 and 6-8 appear to merely limit computing a contest score of uncontested auctions during a sample period, performing a bid walkdown method, and specifics of a bid success metric, and therefore only limit the application of the idea, and not add significantly more than the idea (i.e. “PEG” Step 2B=No).
The computer-implemented (claim 1, no physical hardware is claimed), server computer (claim 5), processor (claim 5), communication interface (claim 5), data storage (claim 5), and memory (claim 5) are each functional generic computer components that perform the generic functions of maintaining, receiving, computing, determining, and performing, all common to electronics and computer systems.
Applicant's specification does not provide any indication that the computer-implemented (claim 1, no physical hardware is claimed), server computer (claim 5), processor (claim 5), communication interface (claim 5), data storage (claim 5), and memory (claim 5) are anything other than generic, off-the-shelf computer components. Therefore, the claims do not amount to significantly more than the abstract idea (i.e. “PEG” Step 2B=No).
Thus, based on the detailed analysis above, claims 1-8 are not patent eligible.
Novel/Non-Obvious Subject Matter
Claims 1-8 as currently written are novel/non-obvious over prior art. However the rejection under 35 U.S.C. 101 is currently pending and represents a barrier to allowability. Examiner notes that any amendments made to the claims in an attempt to correct pending rejections could drastically alter the claim scope and could open up the possibility of prior art being applied in a future action.
Farmer (U.S. Patent No. 9,129,313) teaches an auction scenario in which there may be only one bidder, in which the system lowers the bid price (walkdown) until it reaches the current price floor (Column 8 Lines 10-23). However, Farmer does not teach each and every limitation recited in the independent claim language.
Els (U.S. Patent No. 10,282,758), like Famer, also teaches an auction scenario in which there may be only one bidder, in which the system lowers the bid price (walkdown) until it reaches the current price floor (Column 17 Lines 34-49). However, Els does not teach each and every limitation recited in the independent claim language.
Schwarz (U.S. Pub No. 2010/0262458) teaches determining an optimal minimum reserve price based on historical bid data (Paragraphs 0054-0055). However, Schwarz does not teach each and every limitation recited in the independent claim language.
None of the prior art of record, alone or in combination, teaches each and every limitation of the claimed invention. Specifically, none of the applied references teaches maintaining an auction rule on how to adjust a bid when the auction is uncontested, determining a score representative of a likelihood that the auction is uncontested, and performing a bid walkdown to lower the reserve price based on the score. There is no prior art that teaches each and every limitation of the invention as a whole or in combination with one another. Therefore Examiner finds the independent claims to be allowable over the prior art of record.
Response to Arguments
Applicant has submitted a declaration from co-inventor John Holsworth and argues “based on now having roughly 18 months of operational results with major clients, that the invention makes it significantly cheaper to purchase digital ads; thus, the invention results in a company's advertising budget being deployed much more efficiently” and “The Holsworth SMED identifies claim elements that provide "significantly more" in reaching a solution to a digital advertising problem associated with the ability of a digital advertising network operator to set prices for ads that do not reflect market rates”. Mr. Holsworth does an admirable job of explaining the problem (4), the solution (5 and 6), the objective results (8), the nexus between claim elements, specification citations, and figures (10), and overall explaining why the claimed invention provides the results that he alleges. However, the problem with the declaration is at section 9, in which Mr. Holsworth describes how the invention provides significantly more. Mr. Holsworth states that the invention represents a breakthrough in the digital advertising field and makes it possible to achieve savings, reach, and control. But the digital advertising field is not a technical field, but rather a business field firmly within the abstract category of Certain Methods of Organizing Human Activity. When looking for significantly more, improvements are sought to the additional elements in the claim language. The achievement of savings, reach, and control are not improvements to the additional elements, but rather to the abstract idea of performing an uncontested advertising auction. In the SAP decision (See SAP America, Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163, 127 USPQ2d 1597, 1599 (Fed. Cir. 2018)), the courts found that an improvement made to the abstract idea is not patent eligible. SAP v. Investpic: Page 2, line 22 through Page 3, line 13 - Even assuming that the algorithms claimed are groundbreaking, innovative or even brilliant, the claims are ineligible because their innovation is an innovation in ineligible subject matter because there are nothing but a series of mathematical algorithms based on selected information and the presentation of the results of those algorithms. Thus, the advance lies entirely in the realm of abstract ideas, with no plausible alleged innovation in the non-abstract application realm. An advance of this nature is ineligible for patenting; and Page 10, lines 18-24 - Even if a process of collecting and analyzing information is limited to particular content, or a particular source, that limitations does not make the collection and analysis other than abstract. Therefore, the declaration from Mr. Holsworth is not effective in overcoming the 101 rejection.
Applicant argues “Claims 1 and 5 are comparable to Example 1 of Appendix 1 to the October 2019 Update on Subject Matter Eligibility” and provides a side by side comparison of the instant claim 1 and the claim in Example 1. Applicant then explains the alleged similarities between the instant claim 1 and the claim in Example 1 and argues “Analogously, we claim that the amended limitations in Claim 1 and in Claim 5 of the subject application concerning (1) computing a contest score that estimates the likelihood that an auction for the search term is uncontested, and (2) executing a bid walkdown method that lowers the reserve price are also "meaningful limitations" that integrate the judicial exception into the overall digital advertising system and accordingly practically apply the exception”. However, as explained by Applicant, the referenced claim in Example 1 was found to be eligible because it did not recite an abstract idea. The instant claimed invention does recite an abstract idea though (a fact that Applicant does not dispute), and therefore the claims are not analogous at all. Unfortunately, the computing and executing steps do not represent meaningful limitations that integrate the judicial exception into a practical application, but rather are specific steps that directly recite the abstract idea without any additional elements that represent significantly more.
Conclusion
Applicant's amendment necessitated the new ground(s) of rejection presented in this Office action. Accordingly, THIS ACTION IS MADE FINAL. See MPEP § 706.07(a). 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 MICHAEL BEKERMAN whose telephone number is (571)272-3256. The examiner can normally be reached 9PM-3PM EST M, T, TH, F.
Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice.
If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, WASEEM ASHRAF can be reached at (571) 270-3948. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
Information regarding the status of published or unpublished applications may be obtained from Patent Center. Unpublished application information in Patent Center is available to registered users. To file and manage patent submissions in Patent Center, visit: https://patentcenter.uspto.gov. Visit https://www.uspto.gov/patents/apply/patent-center for more information about Patent Center and https://www.uspto.gov/patents/docx for information about filing in DOCX format. For additional questions, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.
/MICHAEL BEKERMAN/Primary Examiner, Art Unit 3621
Prosecution Insights