Ari StudnitzerDownload PDFPatent Trials and Appeals BoardSep 3, 201914091681 - (D) (P.T.A.B. Sep. 3, 2019) Copy Citation UNITED STATES PATENT AND TRADEMARK OFFICE UNITED STATES DEPARTMENT OF COMMERCE United States Patent and Trademark Office Address: COMMISSIONER FOR PATENTS P.O. Box 1450 Alexandria, Virginia 22313-1450 www.uspto.gov APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO. 14/091,681 11/27/2013 Ari Studnitzer 004672-11382Z-US 7458 12684 7590 09/03/2019 Lempia Summerfield Katz LLC/CME 20 South Clark Street Suite 600 Chicago, IL 60603 EXAMINER MAGUIRE, LINDSAY M ART UNIT PAPER NUMBER 3693 NOTIFICATION DATE DELIVERY MODE 09/03/2019 ELECTRONIC Please find below and/or attached an Office communication concerning this application or proceeding. The time period for reply, if any, is set in the attached communication. Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the following e-mail address(es): docket-us@lsk-iplaw.com mail@lsk-iplaw.com pair_lsk@firsttofile.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________________ Ex parte ARI STUDNITZER ____________________ Appeal 2018-0071911 Application 14/091,6812 Technology Center 3600 ____________________ Before BRADLEY W. BAUMEISTER, IRVIN E. BRANCH, and PHILLIP A. BENNETT, Administrative Patent Judges. BENNETT, Administrative Patent Judge. DECISION ON APPEAL 1 We refer to the following papers in this decision: Final Office Action mailed Nov. 22, 2016 (Final Act.), the Advisory Action mailed April 6, 2017 (Adv. Act.), Appellant’s Brief filed Nov. 24, 2017 (App. Br.), Appellant’s Second Supplemental Appeal Brief filed Feb. 28, 2018 (2d Supp. App. Br.), the Examiner’s Answer mailed May 3, 2018 (Ans.), and the Reply Brief filed July 3, 2018 (Reply Br.). 2 Appellant’s Brief (“App. Br.”) identifies Chicago Mercantile Exchange Inc. as the real party in interest. App. Br. 1. Appeal 2018-007191 Application 14/091,681 2 STATEMENT OF THE CASE Appellant appeals under 35 U.S.C. § 134(a) from the Examiner’s final rejection of claims 19 and 20, which constitute all of the pending claims in this application.3 We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. RELATED PROCEEDINGS Appellant’s Brief identifies a matter co-pending before the Board in U.S. Patent Application No. 13/834,891 as a related proceeding. That related proceeding was assigned Appeal No. 2018-002186, and was decided on May 15, 2019. CLAIMED SUBJECT MATTER The claims are directed to a trade matching platform with variable pricing based on clearing relationships. Spec., Title. Claim 19, reproduced below, illustrates the claimed subject matter: 19. A computer system comprising: an exchange server apparatus comprising: a computer processor, and a computer memory storing computer-executable instructions that, when executed by the computer processor, 3 The final Office Action mailed on November 22, 2016 rejected then- pending claims 19–24. Appellant sought to cancel claims 21–24 in a response filed March 23, 2017. However, the Examiner issued an Advisory Action on April 6, 2017 indicating that she would not enter the amendment. See Adv. Act. 3. Upon filing this appeal, Appellant cancelled claims 21–24. See 2d Supp. App. Br. 6 (“Applicants request conserving USPTO resources by expeditiously cancelling claims 21–24 to focus the PTAB’s attention on appeal to the non-prior art based rejections under 35 U.S.C. 101 and 35 U.S.C. 112, 1st rejections of claims 19–20.”). Appeal 2018-007191 Application 14/091,681 3 cause the exchange server apparatus to perform a method comprising: receiving, from a computing device of a user, an order for an enhanced financial instrument comprising at least a clearinghouse attribute, wherein the enhanced financial instrument corresponds to an over-the-counter financial product available at a plurality of clearinghouses including at least a first clearinghouse, a second clearinghouse, and a third clearinghouse; matching the order using a matching engine module; processing the order using an order processing module, wherein the clearinghouse attribute of the enhanced financial instrument identifies the first clearinghouse, the second clearinghouse, and the third clearinghouse; determining, by a computer processor, that orders of the user at the first clearinghouse are non-actionable; determining, by the computer processor, that orders of the user at the second clearinghouse are actionable; determining, by the computer processor, that orders of the user at the third clearinghouse are actionable, but that the third clearinghouse requires backwards compatibility; removing, by the computer processor, the clearinghouse attribute before sending to the third clearinghouse; blocking, by the computer processor, the matched order from being sent to the first clearinghouse; and submitting, by the computer processor, the matched order to the second clearinghouse and the third clearinghouse; wherein a network communicatively couples the computing device, the first clearinghouse, the second clearinghouse, and the exchange server apparatus. 2d Supp. App. Br. 2–3 (Updated Claims Appendix). REJECTIONS Claims 19 and 20 stand rejected under 35 U.S.C. § 112(a) for lack of written description. Final Act. 2–3. Appeal 2018-007191 Application 14/091,681 4 Claims 19 and 20 stand rejected under 35 U.S.C. § 101 as being directed to ineligible subject matter. Final Act. 3–5. REJECTION UNDER 35 U.S.C. § 112 The Examiner rejects claim 19 as lacking written description for the limitation “determining, by the computer processor, that orders of the user at the third clearinghouse are actionable, but that the third clearinghouse requires backwards compatibility.” Final Act. 3. The Examiner reasons that although the Specification describes the use of backwards compatible RFQ’s and also describes removing a clearinghouse attribute from an order for backwards compatibility reasons, these disclosures are “not the same as the third clearinghouse requiring backwards compatibility.” Final Act. 3. Appellant argues the limitation is supported in the Specification’s “teachings of backwards compatible RFQ.” 2d Supp. App. Br. 7 (citing Spec. ¶ 25). Appellant further contends that paragraph 44 of the Specification supports the limitation because it describes removing a clearinghouse attribute prior to sending an order for backwards compatibility reasons. Id. We agree with Appellant. Here, a person of ordinary skill in the art would have understood from the cited paragraphs that Appellant possessed determining that orders are actionable at clearinghouses that require backwards compatibility. Appellant’s Specification provides examples of the claimed system making determinations as to whether orders are actionable at particular clearinghouses. See, e.g., Spec. ¶¶ 8 (“A computer processor may determine that orders of the user at the first clearinghouse are non-actionable, but that orders of the user at the second clearinghouse are actionable.”), 23 (“The Appeal 2018-007191 Application 14/091,681 5 [graphical user interface (GUI)] may, as described herein, include values that are non-actionable by a particular user for various reasons.”). The Specification further describes “removing the clearinghouse attribute . . . for backwards compatibility reasons.” Spec. ¶ 44. We agree with Appellant that a person of ordinary skill in the art would have understood that the removal of the clearinghouse attribute would have necessitated making a prior determination that the clearinghouse required backwards compatibility. Accordingly, we are persuaded the Examiner erred in rejecting the claims for lack of written description, so we do not sustain the rejection under 35 U.S.C. § 112, first paragraph. REJECTION UNDER 35 U.S.C. § 101 Standard for Patent Eligibility In issues involving subject matter eligibility, our inquiry focuses on whether the claims satisfy the two-step test set forth by the Supreme Court in Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014). The Court instructs us to “first determine whether the claims at issue are directed to a patent- ineligible concept,” id. at 217–18, and, in this case, the inquiry centers on whether the claims are directed to an abstract idea. If the initial threshold is met, we then move to the second step, in which we “consider the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 79, 78 (2012)). The Court describes the second step as a search for “an ‘“inventive concept”’—i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in Appeal 2018-007191 Application 14/091,681 6 practice amounts to significantly more than a patent upon the [ineligible concept] itself.’” Id. (quoting Mayo, 566 U.S. at 72–73). The USPTO has published revised guidance on the application of § 101 consistent with Alice and subsequent Federal Circuit decisions. USPTO, 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”). Under the Guidance, we first look to whether the claim recites: (1) any judicial exceptions, including certain groupings of abstract ideas (i.e., mathematical concepts, certain methods of organizing human activity such as a fundamental economic practice, or mental processes) (referred to Step 2A, prong 1 in the Guidance); and (2) additional elements that integrate the judicial exception into a practical application (see MPEP §§ 2106.05(a)–(c), (e)–(h)) (referred to Step 2A, prong 2 in the Guidance). Only if a claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application, do we then move to Step 2B of the Guidance. There, we look to whether the claim: (3) adds a specific limitation beyond the judicial exception that is not “well-understood, routine, conventional” in the field (see MPEP § 2106.05(d)); or (4) simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception. See Guidance, 84 Fed. Reg. at 52. Appeal 2018-007191 Application 14/091,681 7 Examiner’s Findings and Conclusions In the first step of the Alice inquiry, the Examiner determines the claims are “directed towards performing order matching” and that “[p]erforming order matching is a fundamental economic practice.” Final Act. 4. At Alice step 2, the Examiner determines the claims do not recite elements sufficient to amount to significantly more than the abstract idea because: [T]he claims do not include an improvement to another technology or technical field, an improvement to the functioning of the computer itself, or meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment. Note that the limitations, in the instant claims, are done by the generically recited computing device of the user and computer processor. The limitations are merely instructions to implement the abstract idea on a computer and require no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional activities previously known to the industry. Final Act. 4–5. The Examiner further determines that the claimed limitations are conventional and can be performed on a generic computer: The steps of the claims recite an arrangement of common generic hardware that uses software that is currently used for matching or could be used for future matching software and not something that amounts to significantly more (Specification paragraphs [0040-0042]). Ans. 7. Appeal 2018-007191 Application 14/091,681 8 Appellant’s Contentions Appellant presents several arguments in favor of eligibility. First, Appellant argues the claims are eligible in view of Amdocs (Isr.) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir. 2016). 2d Supp. App. Br. 10. Appellant contends Amdocs “closely parallels the subject matter in [the] claims at issue in this appeal.” Id. More specifically, Appellant argues the claims “recite an ‘enhanced’ claim limitation” similar to the claims in Amdocs, and also recite other similar features such as “an exchange server apparatus” that “performs several operations in an unconventional manner.” 2d Supp. App. Br. 11. Appellant further contends that the claims are not directed to an abstract idea because they are narrowly drawn and do not preempt advancement. 2d Supp. App. Br. 13–15. Appellant also asserts that the claims are patent-eligible under Alice step 2. 2d Supp. App. Br. 15–26. Specifically, Appellant argues the Federal Circuit’s decision in BASCOM Global Internet Servs. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016) supports a finding that the claims supply an inventive concept under the second step of the Alice inquiry. 2d Supp. App. Br. 15. Appellant asserts that similar to the eligible claims in Bascom, the claims under appeal “recite a non-conventional, purposeful arrangement of a network of clearinghouses and other computer components with novel and inventive process to specifically solve the problem of backwards compatibility in a computer network system, as well as controlling/limiting user access to particular computer networks.” 2d Supp. App. Br. 16. Appeal 2018-007191 Application 14/091,681 9 Step 2A, Prong 1: The Judicial Exception Applying the Guidance, we are not persuaded of Examiner error. The Guidance instructs us first to determine whether any judicial exception to patent eligibility is recited in the claim. The Guidance identifies three judicially-excepted groupings: (1) mathematical concepts, (2) certain methods of organizing human behavior such as fundamental economic practices, and (3) mental processes. 84 Fed. Reg. 52–55. We focus here on the second and third groupings—certain methods of organizing human behavior, such as fundamental economic practices, and mental processes. Claim 19 recites the following limitations: (1) “receiving . . . an order for an enhanced financial instrument comprising at least a clearinghouse attribute, wherein the enhanced financial instrument corresponds to an over- the-counter financial product available at a plurality of clearinghouses including at least a first clearinghouse, a second clearinghouse, and a third clearinghouse,” (2) “matching the order using a matching engine module,” (3) “processing the order using an order processing module . . . wherein the . . . financial instrument identifies the first clearinghouse, the second clearinghouse, and the third clearinghouse,” (4) “determining . . . that orders of the user at the first clearinghouse are non-actionable,” (5) “determining . . . that orders of the user at the second clearinghouse are actionable,” (6) “determining . . . that order of the user at the third clearinghouse are actionable, but that the third clearinghouse requires backwards compatibility,” (7) “removing . . . the clearinghouse attribute before sending to the third clearinghouse,” (8) “blocking . . . the matched order from being sent to the first clearinghouse,” and (9) “submitting . . . the matched order to Appeal 2018-007191 Application 14/091,681 10 the second clearinghouse and the third clearinghouse.” 2d Supp. App. Br. 19–20 (Claims Appendix). These limitations, under their broadest reasonable interpretation, reasonably can be characterized as reciting the fundamental economic practices of matching received orders and sending the matched orders to identified clearinghouses based on pre-defined settings. This is so because these limitations all recite the operations that would ordinarily take place in performing such an order matching and clearing process. For example, limitation (1) recites the customary practice of receiving a trade order from a user and analyzing its contents. Limitations (2) and (3), which recite matching and processing the order to identify clearinghouses capable of clearing an executed trade, are typical business practices in the trading of financial instruments. Limitations (4), (5), and (6), which recite making determinations regarding whether and how a user’s orders are actionable at clearing houses, are reasonably characterized as mental processes, which the Guidance also recognizes as constituting an abstract idea. Limitation (7), which recites removing the clearinghouse attribute for specific clearinghouse, reflects the common practice of formatting electronic information so that it can be processed by a recipient. Limitations (8) and (9), which respectively recite blocking the matched order from being sent to a particular clearinghouse and sending it to other clearinghouses, merely describe performing the logical action in light of those mental determinations, namely blocking the order from being sent to a clearinghouse that is restricted from the user, and sending it to those that are not. Appeal 2018-007191 Application 14/091,681 11 Similar to the concept of hedging in Bilski and the concept of intermediated settlement in Alice (which involve settlement of transactions involving financial instruments), the concept of matching received orders and sending the matched order to identified clearinghouses based on pre- defined settings, as recited in Appellant’s claims, “is a fundamental economic practice long prevalent in our system of commerce.” Alice, 573 U.S. at 219–20 (citations and internal quotation marks omitted). Accordingly, we conclude the claims recite a judicial exception of an abstract idea, specifically a fundamental economic practice. Step 2A, Prong Two Integration into a Practical Application Having determined that the claims recite a judicial exception, our analysis under the Guidance turns now to determining whether there are “additional elements that integrate the judicial exception into a practical application.” MPEP § 2106.05(a)–(c), (e)–(h). Appellant’s claim 19 recites that several of the steps of the claimed method are performed by “an exchange server apparatus,” which includes “a computer processor” and “a computer memory storing computer-executable instructions that, when executed by the processor, cause the exchange server apparatus to perform a method.” The claimed “exchange server apparatus” and “computer processor” are described primarily in functional terms in the Specification, and without meaningful detail about their structural configuration that differentiates it from standard, generic computer processors performing the recited operations. See, e.g., Spec. ¶¶ 40, 50, 57. As such, the claims’ recitations of Appeal 2018-007191 Application 14/091,681 12 the “exchange server apparatus” and the “computer processor” are insufficient to integrate the judicial exception into a practical application. Claim 19 also recites the use of a “network” that “communicatively couples the computing device, the first clearinghouse, the second clearinghouse, and the exchange server apparatus.” As with the other computer-hardware limitations, the “network” is described in the Specification at a high level, and the recitation is insufficient to integrate the abstract idea into a practical application. In sum, these limitations are insufficient to integrate the recited judicial exception into a practical application within the meaning of the Guidance. The mere use of these computer components to implement the abstract idea does not improve the functioning of a computer, nor does it solve any technological problem with a technological solution. MPEP § 2106.05(a). Rather, the computer-related claim elements affect an improvement to the business process, i.e., to the financial instrument order itself. In view of the discussion above, we conclude the additional limitations recited in claim 19 are not sufficient to integrate the claimed process into a practical application. And, therefore, claim 19 is directed to a judicial exception. Step 2B: The Inventive Concept Having determined the claim is directed to a judicial exception, we next evaluate whether claim 19 adds a specific limitation beyond the judicial exception that is not “well-understood, routine, conventional” in the field (see MPEP § 2106.05(d)) or simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high Appeal 2018-007191 Application 14/091,681 13 level of generality, to the judicial exception. Memorandum, 84 Fed. Reg. at 56. We agree with the Examiner that the claim does not supply the inventive concept required under Alice step 2. Appellant’s argument under Alice step 2—that the “non-conventional, purposeful arrangement of a network of clearinghouses and other computer components [provides a] novel and inventive process to specifically solve the problem of backwards compatibility in a computer network system, as well as controlling/limiting user access to particular computer networks”—relies primarily on BASCOM Global Internet Servs. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016). 2d Supp. App. Br. 16. We observe no disclosure in Appellant’s Specification characterizing backwards compatibility or the limiting of user access as problems in the prior art to be addressed by Appellant’s invention. Moreover, Appellant does not explain how these purported inventive concepts are in the non-abstract realm. SAP Am., Inc. v. InvestPic, LLC, No. 2017-2081, 2018 U.S. App. LEXIS 12590, Slip. Op. 13 (Fed. Cir. May 15, 2018) (“[w]hat is needed is an inventive concept in the non-abstract realm”). Indeed, Appellant’s Specification states that the invention “may be implemented with one or more mainframes, servers, gateways, controllers, desktops or other computers,” which are generic computer components. Spec. ¶ 40. Appellant also argues that the Examiner has failed to provide sufficient evidence that the additional limitations of the claim are well- understood, routine, and convention. Reply Br. 3–5 (citing Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018)). More specifically, Appellant argues the Examiner has failed to provide evidence to show that the Appeal 2018-007191 Application 14/091,681 14 limitations of “an enhanced financial instrument’ that includes a “clearinghouse attribute” that the exchange server apparatus accesses and affirmatively removes before sending to the third clearinghouse that requires backwards compatibility,” is well-understood, routine, and conventional. Reply Br. 4. We do not find this argument persuasive for two reasons. First, the aspects of the claim identified as lacking sufficient evidence are within the recitation of the abstract idea itself. See supra 9–10. As such, they are not “additional elements,” to be considered in Step 2B. Moreover, even if considered “additional elements,” the Specification describes the attributes that may be included in an agreement as “commonplace” (Spec. ¶ 19). Although the Specification describes the result of including the clearinghouse attribute, it provides little description or detail of how that result is accomplished. A high-level description such as this is evidence of the well-understood nature of the limitation. Because the asserted improvements are within the abstract realm, and because the claimed process is carried out using a generic computer, we do not discern in claim 19 any “specific limitation beyond the judicial exception that is not ‘well-understood, routine, conventional.’” MPEP § 2106.05(d). Consequently, we agree with the Examiner that claim 19 does not supply an inventive concept sufficient to transform the judicial exception into patent- eligible subject matter. Summary Because the Examiner correctly concluded claim 19 is directed to a judicial exception, and because Appellant does not identify any error in the Appeal 2018-007191 Application 14/091,681 15 Examiner’s determination under Alice step 2, we sustain the rejection of claim 19 under 35 U.S.C. § 101. Appellant does not present substantive arguments for dependent claim 20. App. Br. 5–15. Accordingly, we treat claim 19 as representative, and sustain the patent-eligibility rejection claim 20 for the same reasons. 37 C.F.R. § 41.37(c)(1)(iv). DECISION We reverse the Examiner’s rejection of claims 19 and 20 under 35 U.S.C. § 112, first paragraph. We affirm the Examiner’s rejection of claims 19 and 20 under 35 U.S.C. § 101. Because we have affirmed at least one ground of rejection for each claim on appeal, we affirm the Examiner’s decision to reject the claims. 37 C.F.R. § 41.50(a)(1). No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R. § 1.136(a)(1)(iv). AFFIRMED Copy with citationCopy as parenthetical citation