Tax Investment Scheme Not Patent Eligible

In re Greenstein (Fed. Cir. 2019) (nonprecedential)

An obvious “problem” with tax-deferral schemes (such as a retirement plan) is that Government officials would like to spend the money already.  Mark Greenstein has the solution – monetizing the taxes-owed.  Essentially the government could sell the right to collect the future taxes just like you might sell-off accounts receivables or unpaid invoices.  Because the state has powerful collection mechanisms, the particular approach here is that the Gov’t still collects the taxes and then forwards the money to the investors.

Greenstein’s pending patent application claims this approach.  Although the claims are a bit unclear, it looks like he intends to roll-up the future taxes into a couple of different funds with “which provide rates of return based on factors which are different from each other.”

Claims were rejected on eligibility – abstract idea. The PTAB explained:

Exchanging consideration for a right to receive future payments, as well as managing the amounts of those future payments, is a fundamental business practice, long prevalent in our system of commerce.

On appeal, the Federal Circuit has affirmed –agreeing that the claims use of technology is too abstract — simply using “generic computer elements to perform generic computer functions.”  Greenstein argued that his methodology new, complex, and specific.  However, the PTAB and Federal Circuit agreed that neither the novelty nor complexity solve “the problem of abstractness. . . . [T]he complexity of this known method does not impart patentability to computer-implementation of the method.”

Rejection affirmed.

= = = =

1. A [computerized] method … to manage the sale of taxes received by reason of removal of amounts from tax-deferred vehicles, the method including a specification of the measure of the taxes which are sold;

using one or more computers to track amounts contributed to and withdrawn from such tax-deferred vehicles;

specifying adjustments to the measure of amounts owed to purchasers of taxes sold and owed to purchasers of taxes sold based on removal of amounts from tax-deferred vehicles;

adjusting the amount owed to purchasers of taxes received by reason of removal from tax-deferred vehicles to take account of subsequent withdrawals and contributions to the tax deferred vehicles;

adjusting the amount payable of taxes which are sold to take account of subsequent withdrawals
from and contributions to the tax-deferred vehicles;

specifying an adjustment to take account of a change in tax rates;

adjusting the amount owed to purchasers of such taxes to take account of any specified adjustment in tax rates;

using one or more computers to divide the rights to receive the adjusted amount payable of such taxes sold into qualitatively different interests which provide rates of return based on factors which are different from each other;

tracking the ownership of such different interests;

receiving amounts payable of such taxes which amounts are adjusted to take account of withdrawals from and contributions to the tax deferred vehicles;

transferring the amounts due to the owners of the qualitatively different interests which provide rates of return based on factors which are different from each other.

52 thoughts on “Tax Investment Scheme Not Patent Eligible

  1. 9

    Here’s another one. KCG Technologies LLC sued CarMax for infringing U.S. 9,671,955 on a mounted touchscreen emulating a smartphone interface. The D.C. held that the patent was drawn to the abstract idea of “emulating the features of a smartphone or other handheld device on another screen,” and only recited the “desired function” without outlining a particular way to perform it.
    I.e., another Jules Vern wish-list patent improperly issued by a PTO examiner in spite of no enablement and therefor not even a completed invention?
    If those terrible Sup. Ct. 101 decisions can be eliminated then defendants in patent suits like this could be forced to pay up anyway to avoid going through a whole patent trial and appeal.

    1. 9.1

      Worse yet, pre-trial decisions like this lose millions in potential attorney billings.

      1. 9.1.1

        Do you need to hold up your sarcasm sign a little higher?

    2. 9.2

      “I.e., another Jules Vern wish-list patent improperly issued by a PTO examiner in spite of no enablement”

      There’s no enablement issue here. If you don’t want Wish-List Patents get a statute that explicitly excludes them or change the CAFC’s understanding of Written Description.

      1. 9.2.1

        There’s no enablement issue here.

        I do not know. Maybe there is and maybe there is not. Hard to say without a more developed record for claim construction.

        The claim recites “A virtual smart phone, comprising… a processor… [and] a software application executing on the processor to… emulate features of a handheld device… .” In other words, the claim recites a function without the recitation of sufficient structure to perform that function, but does not recite “means for.” The lack of “means for” recitation means that it presumptively does not invoke §112(f), but either party could challenge that presumption, and would probably be able to overcome the presumption.

        If neither party chooses to try to invoke §112(f) here, then there is definitely a scope of enablement issue. The claim reads on any software that achieves the stated function, including software written in machine languages that have not yet been developed. One cannot plausibly say that this application enables the writing of software in C+++++++++++++++++++++++++++.

        If either party chooses to try to invoke §112(f), then the claim scope would be limited to equivalents of the software disclosed in the application. Maybe the figures can be understood (by a person of skill in this art) to disclose a sufficiently definite software by which the claim scope could be meaningfully considered enabled across its full scope. I am not really the right one to judge that question.

        1. 9.2.1.1

          The claim reads on any software that achieves the stated function, including software written in machine languages that have not yet been developed

          It need not – you clearly are outside of your knowledge base when it comes to software, Greg.

          This point actually has been covered in extensive detail over on the Slashdot/Techdirt forums (including long dissertations by a poster named PoiR).

        2. 9.2.1.2

          Another easy one. Method? Yes. Result only information? Yes. Utility of information arising from human consumption? Yes.

          Ineligible.

          Also totally obvious to PHOSITA. Nearly every environment is emulated sooner or later. A deeply unfit patent.

          1. 9.2.1.2.1

            Another easy one. Method? Yes.

            Marty, you jump to “another easy one” and immediately jump into the weeds.

            You are replying to Paul’s “Here’s another one. KCG Technologies LLC sued CarMax for infringing U.S. 9,671,955 on a mounted touchscreen emulating a smartphone interface

            The claims therein (in a majority) are directed to a device.

            There is a method claim, and that method claim is:

            A method of accessing features of a smart phone in an automobile, comprising:

            receiving at a processor in an automobile information representative of a smart phone user interface, including features thereof;

            receiving at a processor in an automobile information representative of data associated with the smart phone;

            displaying an image representative of the smart phone including actionable elements based on the data; and

            facilitating, with the processor, access to at least one feature of the smart phone in response to a user interacting with at least one of the actionable elements independent of access to the smart phone,

            wherein the actionable elements comprise volume control, messages, phone call, email, internet browser, music player, calendar, Global Positioning System, contacts, and maps.

            While the claim itself is atrocious (for a variety of reasons), the method is CLEARLY directed to accessing features of the item (and NOT — as is your ‘want’ related to any type of “result only information”)

            Your over eagerness in expounding on your worthless paradigm is a nuisance, and — yet again — does not even fit the situation.

            Not only can you NOT bother to learn the terrain upon which you would wish to do battle, you do not bother to open your eyes as to ANY of the terrain into which you try to insert your paradigm.

        3. 9.2.1.3

          “The claim reads on any software that achieves the stated function, including software written in machine languages that have not yet been developed. One cannot plausibly say that this application enables the writing of software in C+++++++++++++++++++++++++++.”

          This may be a reasonable reading of the statute, but it is not the law that the CAFC has implemented.

          If this was the law we would see: (1) almost all litigation involving software resolving by enablement based invalidation, (2) all practicioners in the software arts including 112f claim variants in every software application, (3) practicioners in the software arts defining which languages can be used to implement the invention. None of these are true. It’s not the law.

          And I’m not convinced that the above reading of the statute is reasonable or desirable. Should a claim involving a haloalkane raise enablement issues because Unseptunium hasn’t been produced? I think probably not. Why would c+^8 be any different?

          1. 9.2.1.3.1

            This may be a reasonable reading of the statute, but it is not the law that the CAFC has implemented.

            I think that you are correct in this assertion.

            Should a claim involving a haloalkane raise enablement issues because Unseptunium hasn’t been produced?

            It is fairly common in the chemical arts to include in the definitions section something along the lines of “as used herein, ‘alkane’ conveys an unsaturated, one to eight carbon molecule” (or “one to ten carbon” or “one to twelve carbon,” etc, as appropriate, see, e.g., [0101] in US 2017/0174600). One includes this definition precisely in order to obviate the problem that you name. In other words, we in the chem arts really do not regard your suggestion as a reductio ad absurdum.

            1. 9.2.1.3.1.1

              Chem arts are their own animal.

              Knowing when to differentiate that animal from other Arts is something NO practitioner should need be told or advised.

              This is not rocket science, and all practitioners should understand the basics that accompany the differences in Art fields (at the least in recognizing that a Person Having Ordinary Skill In The Art brings a legal fiction that MUST be understood to be different per the peculiarities of the Art involved.

              Which is one reason why Greg is so often out of his league on software discussions (and the same goes for Malcolm).

            2. 9.2.1.3.1.2

              “In other words, we in the chem arts really do not regard your suggestion as a reductio ad absurdum.”

              I’ll admit that defining the specific elements that make up halogens is pretty sharp drafting. But I suspect that any art is ultimately vulnerable to literalist “full scope” of enablement issues.

              The art you cited defines akyl groups based on “carbon” atoms, but does not limit “carbon” to any particular isotopes. Carbon-23 has not been discovered, and one of ordinary skill in the art cannot make compounds including this isotope. Is a claim involving an akyl group unenabled because when the full scope of akyl groups includes undiscovered isotopes of carbon?

  2. 8

    OT, not a coincidence that patents have been zero’ed in value at the same time that anti-trust has been neutralized.

    1. 8.1

      For this case, the operative part of the opinion is that Newman said that the P did not allege the method was new only that it performed better on the computer. So they appeared to admit that the underlying method was already in use. Weird.

      1. 8.1.1

        This is a pro se case by an M.D.

      2. 8.1.2

        Had the same thought Night.

  3. 7

    If one were to get a patent on this, and, as a result, successfully prevent the government from ever implementing such a scheme, I say it’s eligible!!

    1. 7.1

      from ever”…?

      Sister anon, patents are a limited times type of thing.

  4. 6

    Tax-deferred vehicle data is one of most difficult kind of data to work with. Almost as tough for computers to do math on that kind of data as real estate availability data, or remote banking transaction data.

    Maybe someday someone will invent a device that do math on a number regardless of the meaning assigned to the number. But that day is so far away! Centuries away, probably.

    1. 6.1

      Data about the location of fetal DNA needs no computer to be useful or non-obvious.

      1. 6.1.1

        Data is ineligible for patenting, period, regardless of what the data “means” and regardless of how valuable or non-obvious the data is.

        Welcome to the patent system, Martin. Until recently, it was a relatively s@-ne enterprise. Of course, when one of the major political parties in the country and its water-carriers engage in relentless gaslighting and argue that facts no longer exist (“Hey, Rich Whitey says that data is the ‘essence of electronic structure’ and we MUST respect that no matter how jacked up and ridiculous it is because … the party is more fun that way! Besides, we’re going to pass the cost of this nonsense onto the poor people anyway LOL!”) we might as well just turn out the lights if nobody objects. Right?

        Black people **enjoyed** slavery! Pass it on and help your oppressed Repu-k-k-k-e out.

        1. 6.1.1.1

          Your untethered rants are noted.

          1. 6.1.1.1.1

            My comment is very well “tethered”, Bildo.

            Go on — tell everyone again about how “software is not instructions for a computer”. That bit of gaslighting behavior on your part was always good for a big laugh.

            Make us all laugh again, Bildo. Because you are funny, at your own expense.

            1. 6.1.1.1.1.1

              tell everyone again about how “software is not instructions for a computer”.

              Your misdirection (and lack of appreciation of the patent equivalence of the design choice of wares in the computing arts) is noted.

              1. 6.1.1.1.1.1.1

                There’s no “misdirection”. Gaslighting is a well-regarded tool of the maximalists. You’ve employed it religiously here for many years. The practice is well-documented, as are your specific bizarre and repeated assertions that software is “not instructions” for an instructable computer.

                Be honest: you’ve never even managed to articulate the facts of the Prometheus v. Mayo case, and Prometheus’ theory of infringement. Doesn’t that strike you as an incredibly f—-king l-a-m-e move on your part, Bildo? You’re a sniveling coward and you’ve got the intellectual honesty and heft of a tapeworm.

                1. Gaslighting is one of your own prime t001s.

                  Not surprising at all, given that your number one meme of all time is the Accuse Others Of That Which Malcolm Does.

                  As for ANY assertions as to what software is, you need to try to be at least a little bit accurate (so far, you are painfully off).

                  As tot he rest of your denigrations, bah, YOU are by far the one that has been spineless as to ANY engaging on the merits of points and counterpoints presented (leastwise, engaging in an inte11ectually honest manner).

        2. 6.1.1.2

          MM
          Thinking is ineligible for patenting. Period.

        3. 6.1.1.3

          MM
          Protons are ineligible for patenting. Period.

          MM
          Neutrons are ineligible for patenting. Period.

          MM
          Electrons are ineligible for patenting. Period.

          Oh wait, you want to talk about eligibility properly (claim as a whole) and configurations of these things?

          Well, why didn’t you make that clear?

  5. 5

    This is why nobody can understand current eligibility law, despite MM’s assurance that we all know it when we see it. It’s Calvinball.

    Is truly the problem with patenting this method that it is “a fundamental business practice, long prevalent in our system of commerce”? Does that mean that a similar method, but a non-obvious one, could be eligible?

    Again and again and again….in my scheme, this is so simple.

    Is it a method? Yes Does performing the method only result in information? Yes. Does the utility of the information arise from it’s human consumption? Yes.

    Ineligible. Without resort to some construction of what is or is not a “fundamental business practice”, which is mere low-judicial comedy.

    1. 5.1

      Doing math on tax-related data (or any money value) is both a fundamental business concept and an abstraction. As a result, it’s all ineligible.

      Where’s the uncertainty, Martin?

      Answer: there isn’t any.

    2. 5.2

      All math results in “only information”.

      That’s why doing math is ineligible. Doing it “on a computer” changes nothing because computers are prior art machines that were created to do math. Same as “do it with a slide rule” or “do it with pencil and paper.”

      Where’s the uncertainty?

      Answer: there isn’t any.

      1. 5.2.1

        Sure MM. Go infringe this one:

        link to patents.justia.com

        and explain to Dolby that there will be no uncertainty when they sue you. I would not wager on a district court outcome on these claims.

        They are eligible in my scheme, of course. I am not a PHOSITA of video encoding so I can’t say if they are obvious or not. Or fundamental practices of any sort, but I think they may be…..

        1. 5.2.1.1

          I would not wager on a district court outcome on these claims.

          Because why? Because the outcome is not certain to you? Or because you don’t have the money to get into the game?

          I’m not going to analyze every granted claim under the sun for you. The bottom line is that if the claim describes doing math on a computer and nothing more than that, then the claim has serious eligibility issues. If the claim describes more, i.e., causing a tangible modification in physical reality, then there is an improved chance of eligibility provided that the modification is not purely informational in nature (i.e., the modification is not content specific).

          Whether a particular district court is going to have the intellectual chops to see the light or not is only complicated *IF* the underlying facts are complicated. The analysis itself is not very difficult, nor should it be. Of course, when some desperate attorneys and demented judges start pretending that recited abstractions in a claim have a “structure” that isn’t really a structure, well, then you are “on your own”, so to speak, and if you don’t reject that kind of disgusting nonsense then you get the uncertainty that you deserve. Not my problem. I didn’t create it. The uncertainty was created by people who PROFIT off the uncertainty. Own it.

        2. 5.2.1.2

          Why are they eligible in your scheme? A video or picture is information. The utility of a picture or video is in its consumption by a human. Not sure why you think this passes your scheme.

          If you think about it, you will see your scheme is not actually that straightforward.

          1. 5.2.1.2.1

            His “scheme” is more than a bit arbitrary and is completely disassociated from the patent sense of the word “utility” (and how in the ultimate sense, utility is ONLY measured in the humans consumption sense).

          2. 5.2.1.2.2

            ksksksksk the consumer of the MPEG code is a decoder. You can’t get a patent on the movie- which is also information-because movies aren’t in the useful arts. No human can decode an MPEG. That information has no human meaning.

            MM, I don’t want you to analyze every granted claim under the sun, just this one. Because if 100 lawyers look at it, you will get 100 different opinions about its eligibility. You know, uncertainty.

            1. 5.2.1.2.2.1

              No human can decode an MPEG? Really?

              Maybe you want to qualify that somewhat.

              LOL

            2. 5.2.1.2.2.2

              f 100 lawyers look at it, you will get 100 different opinions about its eligibility

              Nope. You’ll get a three or four rationales and the result will be either “ineligible” or “eligible”. And if the claim is owned by “Bob Dirpenstein, Esq.” instead of Dolby and that claim is asserted *against* Dolby or (worse) a large corporation that isn’t invested in the survival of the claim, you’ll get even fewer opinions that that (if you talk to some smart patent attorneys).

              This isn’t complicated stuff. And as the CAFC just finished telling you, the “complexity” of the abstract c-r-a-p is totally beside the point.

              1. 5.2.1.2.2.2.1

                Three or four? I think the Alice case itself produced 15 between CAFC and USSC.

                No sir: nobody can tell you if these claims are eligible or not, and it’s essentially the district court judge draw that will decide that issue.

                There is merit to the uncertainty argument despite your handwaving because a policy choice about magical technology inventions has not been made, and there are reasonable arguments on both sides.

                I think MPEG’s could be patentable subject matter, despite being logic and abstractions. They are 100% functional and there could be a free-rider problem if the patent incentive and exclusion is not there. That’s my policy position. I’d prefer zero logic and instructions in the system, but if that’s not tenable, my line is far from arbitrary. It’s natural and suitable.

                So far, not one good objection has arisen.

            3. 5.2.1.2.2.3

              So in your scheme: information for consumption by humans is not eligible, but information for consumption by computers so that it can produce other information for consumption by humans is eligible?

              Here’s your scheme, applied to the claims you think would be eligible under your scheme:

              Is it a method? Yes. Does performing the method only result in information? Yes (it results in a stream of code that can be used to produce a video viewable by a human, so information). Does the utility of the information arise from it’s human consumption? Yes (there is no utility in a stream of code that can produce a video viewable by humans OTHER than human consumption of the video).

              Your scheme does not solve any problems.

              1. 5.2.1.2.2.3.1

                ksksksks,

                First, thanks for engaging. Always good to see new handles here.

                My scheme requires that the result of a method has to be construed as a matter of law; it should be anyway as a matter of complete claim construction. The Supreme Court has said in a number of cases that a method must have an identified result.

                The result of an MPEG encoding method is the encoded bitstream. Your analysis suggests that a new method of refining gasoline could actually be construed as having the utility of powering your lawn mower, but your lawn mower or any later use of the gasoline past the bounds of the method’s result are irrelevant.

                The utility is achieved by the decoder processing the coded bitstream. Any post-solution activity is not part of the analysis.

                My scheme solves major problems whenever an item or species of information is the point of novelty or the useful result of an invention, which happens every single day.

                1. Where is “point of novelty” or “useful result” located in the 35 USC 101, Marty?

                  (noting that 35 USC 101 has two — and ony two aspects:

                  i) that an innovation can be presented (by the applicant) in at least one statutory category; and

                  ii) that the innovation provides a utility within the Useful Arts.

                  Contemplate your “useful result” OUTSIDE of your known biases that simply do not exist within the context of the law.

  6. 4

    “Complexity” has not been relevant to the question of eligibility …. ever.

    Where are the sanctions?

  7. 3

    Greg DeLassus could not have predicted this result! Therefore there is no objective reality, everything is abstract, nothing is eligible, and we must rewrite the patent statute so the rich can get even more fabulously wealthy. If we don’t do it, then China will!!!

    /gaslighting maximalist off

  8. 2

    One should pause for a moment and realize that method claims need not involve “hardware” of any kind, and the “but it’s a computer” mantra is a debilitating side show.

    The score board is broken.

  9. 1

    “Essentially the government could sell the right to collect the future taxes just like you might sell-off accounts receivables or unpaid invoices. Because the state has powerful collection mechanisms, the particular approach here is that the Gov’t still collects the taxes and then forwards the money to the investors.”

    Given that the government collects the money, how is this not just “buying a government bond with extra steps”?

    1. 1.1

      That was my thought as well. Seems like this one should have failed under 102/103 in any event. It is not a good thing that the claims were tanked under the wrong section, but the applicant was never entitled to these claims.

      1. 1.1.1

        It is not a good thing that the claims were tanked under the wrong section

        Unless of course you ascribe to the anti-Sir Thomas More view of the Ends justify the Means…

      2. 1.1.2

        “Seems like this one should have failed under 102/103 in any event.”

        It would have if everyone above the examiner wasn’t interested in resolving the case as easily as possible.

        The examiner rejected under 101, 112b, and 103. The Board affirmed the 101 and the 112b, and reversed the 103 because the claim was indefinite. The CAFC affirmed the 101 and ignored the 112b.

        If we extrapolate that pattern to a SCOTUS review, an affirmation based on intuition and ignoring 101 would be pretty darn appropriate!

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