Ari Studnitzer

Patent Trials and Appeals Board

Sep 3, 2019

14091681 - (D) (P.T.A.B. Sep. 3, 2019)

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.
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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.”).
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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.
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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
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[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
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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.

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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.
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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.
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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
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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.
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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
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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
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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
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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
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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