The Patent Trial and Appeal Board (PTAB) affirmed an examiner’s rejection under 35 USC § 101 of claims directed to “managing customer discounts following the receiving of a cancellation request by a customer,” finding that the rejection was appropriate even though the examiner did not provide factual evidence to support his finding that the claims were directed to an abstract idea. Ex Parte Bradley Johnson et al., Appeal No. 2016-004623 (PTAB, Jan. 18, 2018) (Medlock, APJ).

The application at issue relates to a system and method for customer discount management. The US Patent and Trademark Office (PTO) examiner found the pending claims directed to “a fundamental economic practice and, therefore, to an abstract idea.” The claims were therefore rejected under § 101. Applicants appealed.

The PTAB, after explaining that there was “no controlling authority that requires the Office to provide factual evidence to support a finding that a claim is directed to an abstract idea,” dismissed applicants’ argument that the rejection could not be sustained because the examiner did not present evidence supporting his conclusion that the claims were directed to an abstract idea.

The PTAB further explained that the US Court of Appeals for the Federal Circuit has “repeatedly” noted that “the prima facie case is merely a procedural device that enables an appropriate shift of the burden of production,” refuting the appellants’ suggestion that the PTAB had previously held that such requirement existed. The PTAB further concluded that all that is required of the examiner is to sufficiently articulate the reasons for rejection in an informative manner that satisfies the notice requirements of 35 USC § 132.

Practice Note: Practitioners should note the possible impact of this decision on the examiner guidance issued by the PTO in 2016 regarding how to formulate a subject matter eligibility rejection (IP Update, Vol. 19, No. 5). The guidance requires office actions to provide an explanation as to why each patent claim is unpatentable.