Clifford J. Weber et al.

Patent Trials and Appeals Board

Jan 3, 2020

14812717 - (D) (P.T.A.B. Jan. 3, 2020)

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.
14/812,717 07/29/2015 Clifford J. Weber MKT-14-1087CDCC-CON 1861
35811 7590 01/03/2020
IP GROUP OF DLA PIPER LLP (US)
ONE LIBERTY PLACE
1650 MARKET ST, SUITE 5000
PHILADELPHIA, PA 19103
EXAMINER
POLLOCK, GREGORY A
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
01/03/2020 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):
pto.phil@us.dlapiper.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CLIFFORD J. WEBER, SCOTT EBNER, CHARLES A. BAKER,
and BONNIE ARCULLI
Appeal 2018-005741
Application 14/812,717
Technology Center 3600
Before JENNIFER S. BISK, LARRY J. HUME, and
JULIET MITCHELL DIRBA, Administrative Patent Judges.
HUME, Administrative Patent Judge.
DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant,1 NYSE MKT LLC,
appeals from the Examiner’s decision rejecting claims 1–31, which are all
claims pending in the application. We have jurisdiction under 35
U.S.C. § 6(b).
We AFFIRM IN PART.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42(a). Appellant identifies the real party in interest as NYSE
MKT LLC. Appeal Br. 1.
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STATEMENT OF THE CASE2
The claims are directed to systems and methods for checking model
portfolios for actively managed funds. See Spec. (Title). In particular,
Appellant’s disclosed embodiments and claimed invention
relate[] to systems and methods to allow public intra-day
trading of financial instruments such as shares of actively
managed funds or exchange-traded notes on secondary markets
without knowledge of the specific assets underlying the traded
instruments. More particularly, this invention relates to
systems and methods for checking how well a model portfolio
tracks an actively managed fund.
Spec. ¶ 1.
Claim 1, reproduced below, is representative of the subject matter on
appeal (emphases and formatting added to contested prior-art limitations):
Exemplary Claim
1. A computer-implemented method for presenting
valuation information representative of data without revealing
contents of the data, the method comprising:
in at least one computer comprising non-transitory
memory storing computer readable instructions and at least one
processor executing the computer readable instructions, thereby
causing the at least one computer to perform the steps of:
executing a statistical comparison between a
first data set and a second data set, the first data set
defining a model portfolio, the second data set
defining a financial instrument having holdings,

2 Our decision relies upon Appellant’s Appeal Brief (“Appeal Br.,” filed
Aug. 28, 2017); Reply Brief (“Reply Br.,” filed May 14, 2018); Examiner’s
Answer (“Ans.,” mailed Mar. 16, 2018); Non-Final Office Action (“Non-
Final Act.,” mailed Apr. 7, 2017); and the original Specification (“Spec.,”
filed July 29, 2015).
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the model portfolio exhibiting first characteristics
that correspond to second characteristics of the
financial instrument without revealing the holdings
of the financial instrument,
said statistical comparison comprising
comparing the first characteristics of the model
portfolio and the second characteristics of the
financial instrument over some period of time;
compiling results of the statistical
comparison between the first data set and the
second data set; and
periodically publishing at least a portion of
the results of the statistical comparison throughout
a predetermined period by periodically
transmitting the at least portion of the results to
one or more participant computers in
communication with the at least one computer,
such that the published results do not reveal the
holdings of the financial instrument;
initiating, by the one or more participant computers, one
or more transactions involving at least a portion of the second
data set without receiving the second data set, based on the
published results; and
executing, by the at least one computer, the one or more
transactions initiated by the one or more participant computers.
Prior Art
The Examiner relies upon the following prior art as evidence in
rejecting the claims on appeal:
Dembo US 5,148,365 Sept. 15, 1992
Payne US 2003/0144947 A1 July 31, 2003
Present et al. (“Present”) US 2009/0063363 A1 Mar. 5, 2009
Pruitt US 7,668,773 B1 Feb. 23, 2010
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Related Application
A Notice of Appeal has been filed in copending child Application
Serial Number 14/822,286, Appeal Number 2018-005744. In our Decision
mailed December 31, 2019, we reversed the Examiner’s rejections.
Rejections on Appeal
R1. Claims 1, 7, and 14 stand rejected under pre-AIA 35 U.S.C.
§ 112, first paragraph, for lack of written description support. Non-Final
Act. 4.3
R2. Claims 1–31 stand rejected under 35 U.S.C. § 101 as being
directed to a judicial exception (i.e., a law of nature, a natural phenomenon,
or abstract idea) without significantly more. Non-Final Act. 5.
R3. Claims 1–27 stand provisionally4 rejected under the judicially
created doctrine of nonstatutory obviousness-type double patenting (OTDP)
as being unpatentable over claims 1–17 of issued patent US 7,822,678 and
claims 1–5 of issued US Patent 8,170,934. Non-Final Act. 11.
R4. Claims 1, 3–7, 9–14, and 16–31 stand rejected under 35 U.S.C.
§ 103(a) as being unpatentable over the combination of Payne, Pruitt, and

3 The Examiner does not reject claims depending from independent
claims 1, 7, and 14 as also lacking written description support.
4 The Examiner indicates this is a provisional OTDP rejection (Non-Final
Act. 11), but the reference patent claims are found in issued patents,
suggesting instead that the claims should be non-provisionally rejected under
the OTDP doctrine.
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Dembo or, alternatively, over the combination of Pruitt, Payne, and Dembo.
Non-Final Act. 13.5
R5. Claims 2, 8, and 15 stand rejected under 35 U.S.C. § 103(a) as
being unpatentable over the combination of Payne, Pruitt, Dembo, and
Present or, alternatively, over the combination of Pruitt, Payne, Dembo, and
Present. Non-Final Act. 18.
CLAIM GROUPING
Based on Appellant’s arguments (Appeal Br. 6–18) and our discretion
under 37 C.F.R. § 41.37(c)(1)(iv), we decide the appeal of patent-ineligible
subject matter Rejection R2 of claims 1–31 on the basis of representative
claim 1; and we decide the appeal of obviousness Rejection R4 of claims 1,
3–7, 9–14, and 16–31 on the basis of representative claim 1. We address
Rejection R1, infra. We address Rejections R3 and R5, not argued
separately or substantively, infra.6

5 Precedent guides that the ordering of references in a § 103 rejection is
insignificant regarding the Examiner’s ultimate legal determination of
obviousness. See In re Bush, 296 F.2d 491, 496 (CCPA 1961) (“[W]e deem
it to be of no significance, but merely a matter of exposition, that the
rejection is stated to be on A in view of B instead of on B in view of A, or
to term one reference primary and the other secondary.”).
6 “Notwithstanding any other provision of this paragraph, the failure of
appellant to separately argue claims which appellant has grouped together
shall constitute a waiver of any argument that the Board must consider the
patentability of any grouped claim separately.” 37 C.F.R. § 41.37(c)(1)(iv).
In addition, when Appellant does not separately argue the patentability of
dependent claims, the claims stand or fall with the claims from which they
depend. In re King, 801 F.2d 1324, 1325 (Fed. Cir. 1986).
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ISSUES AND ANALYSIS
We agree with particular arguments made by Appellant with respect
to Rejections R1, R2, R4, and R5 of claims 1–31. However, Appellant
presents no arguments with respect to Rejection R3 of claims 1–27. We
highlight and address specific findings and arguments regarding claim 1 for
emphasis as follows.
1. § 112, ¶ 1 Rejection R1 of Claims 1, 7, and 14
Issue 1
Appellant argues (Appeal Br. 6) the Examiner’s rejection of claims 1,
7, and 14 under 35 U.S.C. § 112, first paragraph, as lacking written
description support is in error. These contentions present us with the
following issue:
Did the Examiner err in finding the originally filed disclosure lacks
support for computer initiation of a trade, as variously recited in the
independent claims?
Principles of Law
The test for compliance with the written description requirement is
“whether the disclosure of the application relied upon reasonably conveys to
those skilled in the art that the inventor had possession of the claimed
subject matter as of the filing date.” Ariad Pharm., Inc. v. Eli Lilly & Co.,
598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc). “[T]he level of detail
required to satisfy the written description requirement varies depending on
the nature and scope of the claims and on the complexity and predictability
of the relevant technology.” Id.
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Further, the Specification “need not describe the claimed subject
matter in exactly the same terms as used in the claims.” Eiselstein v. Frank,
52 F.3d 1035, 1038 (Fed. Cir. 1995). “If . . . the specification contains a
description of the claimed invention, albeit not in ipsis verbis (in the
identical words), then the examiner . . . must provide reasons why one of
ordinary skill in the art would not consider the description sufficient.” In re
Alton, 76 F.3d 1168, 1175 (Fed. Cir. 1996).
Analysis
The Examiner determined Appellant introduced new matter in the
amendment to independent claims 1, 7, and 14 because “[t]here is no support
for a computer initiating a trade in the present disclosure. At best, a human
trader makes trade decisions based on the received information . . . . [T]he
amended claims . . . are, additionally, inoperable as claimed.” Non-Final
Act. 5.
Appellant responds by pointing to paragraphs 51, 55, and 56 of the
Specification, and Figure 3 of the Drawings as providing support for the
disputed limitations of the independent claims, e.g., “executing, by the at
least one computer, the one or more transactions initiated by the one or more
participant computers,” as recited in claim 1, for example.
We turn to the portions of the Specification cited by Appellant for
context. “The method depicted in Fig. 3 may be performed on a system
involving a fund computer 110 and a pricing and hedging computer (“PH
computer”) 300.” Spec. ¶ 51. “The method of Fig. 3 also provides a step
345 [“Create Hedging Portfolio”] for creating a hedging portfolio 350.
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Details of how the hedging portfolio may be created are set forth in the
descriptions accompanying Figs. 4 and 5.” Spec. ¶ 55.
Based on this disclosure, we are persuaded by Appellant’s arguments
that there is adequate written description support for the disputed limitations
of independent claims 1, 7, and 14. Therefore, for essentially the same
reasons argued by Appellant discussed above, we reverse the Examiner’s
written description Rejection R1 of independent claims 1, 7, and 14.
2. § 101 Rejection R2 of Claims 1–31
Issue 2
Appellant argues (Appeal Br. 5–9; Reply Br. 1–10) the Examiner’s
rejection of claim 1 under 35 U.S.C. § 101 as being directed to patent-
ineligible subject matter without significantly more is in error. These
contentions present us with the following issue:
Under the USPTO’s Revised Guidance, informed by our governing
case law concerning 35 U.S.C. § 101, is claim 1 patent-ineligible under
§ 101?
Principles of Law
A. 35 U.S.C. § 101
An invention is patent-eligible if it is a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.7
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include

7 This threshold analysis of whether a claim is directed to one of the four
statutory categories of invention, i.e., a process, machine, manufacture, or
composition of matter, is referred to as “Step 1” in the USPTO’s patent-
eligibility analysis under § 101. MPEP § 2106.
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implicit exceptions: “[l]aws of nature, natural phenomena, and abstract
ideas” are not patentable. Mayo Collaborative Servs. v. Prometheus Labs.,
Inc., 566 U.S. 66, 70 (2012) (brackets in original) (citing Diamond v. Diehr,
450 U.S. 175, 185 (1981)).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court’s two-step framework, described in Mayo
and Alice. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217–18 (2014)
(citing Mayo, 566 U.S. at 75–77). In accordance with that framework, we
first determine what concept the claim is “directed to.” See Alice, 573 U.S.
at 219 (“On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4
in petitioners’ application explain the basic concept of hedging, or protecting
against risk . . . .”).
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diehr, 450 U.S. at 191); “tanning,
dyeing, making water-proof cloth, vulcanizing India rubber, smelting ores”
(id. at 182 n.7 (quoting Corning v. Burden, 56 U.S. 252, 267–68 (1853)));
and manufacturing flour (Benson, 409 U.S. at 69 (citing Cochrane v.
Deener, 94 U.S. 780, 785 (1876))).
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In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held “[a] claim drawn to subject matter otherwise statutory
does not become nonstatutory simply because it uses a mathematical
formula.” Diehr, 450 U.S. at 187; see also id. at 191 (“We view
respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, and this principle cannot be circumvented by attempting
to limit the use of the formula to a particular technological environment.”
Id. (citation omitted) (citing Benson and Flook); see, e.g., id. at 187 (“It is
now commonplace that an application of a law of nature or mathematical
formula to a known structure or process may well be deserving of patent
protection.”).
Abstract ideas may include, but are not limited to, fundamental
economic practices, methods of organizing human activities, and
mathematical formulas or relationships. Alice, 573 U.S. at 217–21. Under
this guidance, we must therefore ensure at step one that we articulate what
the claims are directed to with enough specificity to ensure the step one
inquiry is meaningful. Id. at 217 (“[W]e tread carefully in construing this
exclusionary principle lest it swallow all of patent law.”).
If the claim is “directed to” an abstract idea, we turn to the second
step of the Alice and Mayo framework, where “we must examine the
elements of the claim to determine whether it contains an ‘“inventive
concept”’ sufficient to ‘transform’ the claimed abstract idea into a patent-
eligible application.” Alice, 573 U.S. at 221 (citation omitted). “A claim
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that recites an abstract idea must include ‘additional features’ to ensure ‘that
the [claim] is more than a drafting effort designed to monopolize the
[abstract idea].’” Id. (alterations in original) (quoting Mayo, 566 U.S. at 77).
“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
that abstract idea into a patent-eligible invention.” Id.
B. USPTO Revised Guidance
The PTO recently published revised guidance in the Federal Register
concerning the application of § 101. 2019 Revised Patent Subject Matter
Eligibility Guidance, 84 Fed. Reg. 50 (January 7, 2019) (hereinafter
“Revised Guidance”) (https://www.govinfo.gov/content/pkg/FR-2019-01-
07/pdf/2018-28282.pdf).
Under the Revised 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);8 and
(2) additional elements that integrate the judicial
exception into a practical application (see Manual for Patent
Examining Procedure (“MPEP”) §§ 2106.05(a)–(c), (e)–(h)).9
See Revised Guidance 52–53.

8 Referred to as “Revised Step 2A, Prong 1” in the Revised Guidance
(hereinafter “Step 2A(i)”).
9 Referred to as “Revised Step 2A, Prong 2” in the Revised Guidance
(hereinafter “Step 2A(ii)”).
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Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then 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.10
See Revised Guidance 56.
Step 2A(i) – Abstract Idea
Informed by our judicial precedent, the Revised Guidance extracts and
synthesizes key concepts identified by the courts as abstract ideas to explain
that the abstract idea exception includes the following groupings of subject
matter, when recited as such in a claim limitation:
(a) Mathematical concepts—mathematical relationships,
mathematical formulas or equations, mathematical calculations;
(b) Certain methods of organizing human activity —
fundamental economic principles or practices (including
hedging, insurance, mitigating risk); commercial or legal
interactions (including agreements in the form of contracts;
legal obligations; advertising, marketing or sales activities or
behaviors; business relations); managing personal behavior or
relationships or interactions between people (including social
activities, teaching, and following rules or instructions); and
(c) Mental processes—concepts performed in the human
mind (including an observation, evaluation, judgment, opinion).

10 Items (3) and (4) continue to be collectively referred to as “Step 2B” of
the Supreme Court’s two-step framework, described in Mayo and Alice.
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Revised Guidance 52 (footnotes omitted).
Under the Revised Guidance, if the claim does not recite a judicial
exception (a law of nature, natural phenomenon, or subject matter within the
enumerated groupings of abstract ideas above), then the claim is patent-
eligible at Step 2A(i). This determination concludes the eligibility analysis,
except in situations identified in the Revised Guidance.11
However, if the claim recites a judicial exception (i.e., an abstract idea
enumerated above, a law of nature, or a natural phenomenon), the claim
requires further analysis for a practical application of the judicial exception
in Step 2A(ii).
Step 2A(ii) – Practical Application
If a claim recites a judicial exception in Step 2A(i), we determine
whether the recited judicial exception is integrated into a practical
application of that exception in Step 2A(ii) by: (a) identifying whether there
are any additional elements recited in the claim beyond the judicial
exception(s); and (b) evaluating those additional elements individually and
in combination to determine whether they integrate the exception into a
practical application.

11 In the rare circumstance in which an examiner believes a claim limitation
that does not fall within the enumerated groupings of abstract ideas should
nonetheless be treated as reciting an abstract idea, the procedure described in
of the Guidance for analyzing the claim should be followed. See Revised
Guidance, Section III.C.
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The seven identified “practical application” sections of the MPEP,12
cited in the Revised Guidance under Step 2A(ii), are:
(1) MPEP § 2106.05(a) Improvements to the Functioning of
a Computer or To Any Other Technology or Technical
Field
(2) MPEP § 2106.05(b) Particular Machine
(3) MPEP § 2106.05(c) Particular Transformation
(4) MPEP § 2106.05(e) Other Meaningful Limitations
(5) MPEP § 2106.05(f) Mere Instructions To Apply An
Exception
(6) MPEP § 2106.05(g) Insignificant Extra-Solution Activity
(7) MPEP § 2106.05(h) Field of Use and Technological
Environment
See Revised Guidance 55.
If the recited judicial exception is integrated into a practical
application as determined under one or more of the MPEP sections cited
above, then the claim is not directed to the judicial exception, and the patent-
eligibility inquiry ends. See Revised Guidance 54. If not, then analysis
proceeds to Step 2B.
Step 2B – “Inventive Concept” or “Significantly More”
Under our reviewing courts’ precedent, it is possible that a claim that
does not “integrate” a recited judicial exception under Step 2A(ii) is
nonetheless patent eligible. For example, the claim may recite additional

12 See MPEP §§ 2106.05(a)–(c), (e)–(h). Citations to the MPEP herein refer
to revision [R-08.2017]. Sections 2106.05(a), (b), (c), and (e) are indicative
of integration into a practical application, while §§ 2106.05(f), (g), and (h)
relate to limitations that are not indicative of integration into a practical
application.
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elements that render the claim patent eligible even though one or more claim
elements may recite a judicial exception.13 The Federal Circuit has held
claims eligible at the second step of the Alice/Mayo test (USPTO Step 2B)
because the additional elements recited in the claims provided “significantly
more” than the recited judicial exception (e.g., because the additional
elements were unconventional in combination).14 Therefore, if a claim has
been determined to be directed to a judicial exception under Revised Step
2A, we must also evaluate the additional elements individually and in
combination under Step 2B to determine whether they provide an inventive
concept (i.e., whether the additional elements amount to significantly more
than the exception itself).15
Under the Revised Guidance, we must consider in Step 2B whether an
additional element or combination of elements: (1) “Adds a specific
limitation or combination of limitations that are not well-understood,
routine, conventional activity in the field, which is indicative that an
inventive concept may be present;” or (2) “simply appends well-understood,
routine, conventional activities previously known to the industry, specified

13 See, e.g., Diehr, 450 U.S. at 187.
14 See, e.g., Amdocs (Israel), Ltd. v. Openet Telecom, Inc., 841 F.3d 1288,
1300, 1304 (Fed. Cir. 2016); BASCOM Global Internet Services, Inc. v.
AT&T Mobility LLC, 827 F.3d 1341, 1349–52 (Fed. Cir. 2016); DDR
Holdings v. Hotels.com, L.P., 773 F.3d 1245, 1257–59 (Fed. Cir. 2014).
15 The patent eligibility inquiry may contain underlying issues of fact.
Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1325
(Fed. Cir. 2016). In particular, “[t]he question of whether a claim element or
combination of elements is well-understood, routine and conventional to a
skilled artisan in the relevant field is a question of fact.” Berkheimer v. HP
Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018).
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at a high level of generality, to the judicial exception, which is indicative
that an inventive concept may not be present.” See Revised Guidance,
Section III.B.16
In the Step 2B analysis, an additional element (or combination of
elements) is not well-understood, routine or conventional unless the
examiner finds an evidentiary basis, and expressly supports a rejection in
writing with, one or more of the following:
1. A citation to an express statement in the
specification or to a statement made by an applicant during
prosecution that demonstrates the well-understood, routine,
conventional nature of the additional element(s). . . .
2. A citation to one or more of the court decisions
discussed in MPEP § 2106.05(d)(II) as noting the well-
understood, routine, conventional nature of the additional
element(s).
3. A citation to a publication that demonstrates the
well-understood, routine, conventional nature of the additional
element(s). . . .
4. A statement that the examiner is taking official
notice of the well-understood, routine, conventional nature of
the additional element(s). . . .

16 In accordance with existing Step 2B guidance, an Examiner’s finding that
an additional element (or combination of elements) is well understood,
routine, conventional activity must be supported with at least one of the four
specific types of evidence required by the USPTO Berkheimer
Memorandum, as shown above. For more information concerning evaluation
of well-understood, routine, conventional activity, see MPEP § 2106.05(d),
as modified by the USPTO Berkheimer Memorandum (USPTO
Commissioner for Patents Memorandum dated Apr. 19, 2018, “Changes in
Examination Procedure Pertaining to Subject Matter Eligibility, Recent
Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.)” (hereinafter
“Berkheimer Memo”).
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See Berkheimer Memo 3–4.
If the Examiner or the Board determines under Step 2B that the
element (or combination of elements) amounts to significantly more than the
exception itself, the claim is eligible, thereby concluding the eligibility
analysis.
However, if a determination is made that the element and combination
of elements do not amount to significantly more than the exception itself, the
claim is ineligible under Step 2B, and the claim should be rejected for lack of
subject matter eligibility.
Analysis
Step 1 – Statutory Category
Claim 1, as a method (process) claim, recites one of the enumerated
categories of eligible subject matter in 35 U.S.C. § 101. Therefore, the issue
before us is whether it is directed to a judicial exception without
significantly more.
Step 2A(i): Does the Claim Recite a Judicial Exception?
The Examiner determined that claim 1 is “directed to the abstract
idea(s) of allowing public intra-day trading of financial instruments such as
shares of actively managed funds or exchange-traded notes on secondary
markets without knowledge of the specific assets underlying the traded
instruments” Non-Final Act. 5. More particularly, the Examiner concludes
the claim limitations
describe idea(s) which are analogous to the basic concepts of
data recognition and storage . . . a mathematical procedure for
converting one form of numerical representation to another . . .
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organizing information through mathematical correlations . . .
using categories to organize, store, and transmit information . . .
comparing new and stored information and using rules to
identify options . . . organizing human activity (i.e., human
analog that can be performed by hand or by merely thinking)
. . . and trading which is a fundamental economic practice . . .
all of which have been found by the courts to be an abstract
idea. As an ordered combination, the claims are directed toward
allowing public intra-day trading of financial instruments such
as shares of actively managed funds or exchange-traded notes
on secondary markets without knowledge of the specific assets
underlying the traded instruments and particularly which is
analogous to organizing human activity (activities which can be
performed mentally by a human using a pencil and paper) and
to trading which is a fundamental economic practices found to
be abstract ideas by the courts.
Non-Final Act. 7–8 (citations omitted).
We conclude claim 1 does not recite the judicial exceptions of either
natural phenomena or laws of nature. We evaluate, de novo, whether
claim 1 recites an abstract idea based upon the Revised Guidance.
First, we look to the Specification to provide context as to what the
claimed invention is directed to. In this case, the Specification discloses that
the invention
relates to systems and methods to allow public intra-day trading
of financial instruments such as shares of actively managed
funds or exchange-traded notes on secondary markets without
knowledge of the specific assets underlying the traded
instruments. More particularly, this invention relates to
systems and methods for checking how well a model portfolio
tracks an actively managed fund.
Spec. ¶ 1.
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Appellant’s Abstract describes the invention thusly:
Embodiments include systems and methods for
evaluating the integrity of a model portfolio designed to have
substantially the same values, returns, or risk characteristics as
a financial instrument. Embodiments include operating a first
computer to perform a statistical comparison between said
model portfolio and the financial instrument, wherein said
statistical comparison compares at least one of the periodic
values, returns, and risk characteristics of the model portfolio
and the financial instrument over some period of time. The
results of the statistical comparison are periodically published
throughout a trading day for use by a trader to at least one (i)
price and (ii) hedge an investment in the financial instrument.
According to embodiments, the model portfolio does not reveal
the holdings of a reference asset for the financial instrument.
Spec. 65 (Abstract).
In TABLE 1 below, we identify in italics the specific claim
limitations in claim 1 that we conclude recite an abstract idea. We
additionally identify in bold the additional (non-abstract) claim limitations
that are generic computer components and techniques, and underline
limitations representing extra or post-solution activity:
TABLE 1
Independent Claim 1 Revised Guidance
A computer-implemented method
for presenting valuation
information representative of data
without revealing contents of the
data, the method comprising:
A process (method) is a statutory
subject matter class. See 35 U.S.C.
§ 101.
[L1] in at least one computer
comprising non-transitory
memory storing computer
readable instructions and at
A computer, memory, and computer-
readable instructions are generic
computer components.
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Independent Claim 1 Revised Guidance
least one processor executing the
computer readable instructions,
thereby causing the at least one
computer to perform the steps of:
[L2] executing a statistical
comparison between a first data
set and a second data set, the first
data set defining a model
portfolio, the second data set
defining a financial instrument
having holdings, the model
portfolio exhibiting first
characteristics that correspond to
second characteristics of the
financial instrument without
revealing the holdings of the
financial instrument,
Comparing data is an abstract idea,
i.e., an “observation, evaluation,
judgment, opinion” which could be
performed as a mental process. See
Revised Guidance 52.
Alternatively, executing a statistical
comparison can be construed as
involving mathematical calculations,
which is an abstract idea. Revised
Guidance 52 and n.12 citing SAP
America, Inc. v. InvestPic, LLC, 898
F.3d 1161, 1163 (Fed. Cir. 2018)
(holding that claims to a “series of
mathematical calculations based on
selected information” are directed to
abstract ideas).
[L3] said statistical comparison
comprising comparing the first
characteristics of the model
portfolio and the second
characteristics of the financial
instrument over some period of
time;
Comparing data is an abstract idea,
i.e., an “observation, evaluation,
judgment, opinion” which could be
performed as a mental process. See
Revised Guidance 52.
[L4] compiling results of the
statistical comparison between
the first data set and the second
data set; and
Compiling results, i.e., data
gathering, is merely insignificant
extra-solution activity that does not
add significantly more to the abstract
idea to render the claimed invention
patent-eligible. See In re Bilski, 545
F.3d 943, 962 (Fed. Cir. 2008) (en
banc), aff’d on other grounds, 561
U.S. 593 (2010) (“[T]he involvement
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Independent Claim 1 Revised Guidance
of the machine or transformation in
the claimed process must not merely
be insignificant extra-solution
activity”).
[L5] periodically publishing at
least a portion of the results of the
statistical comparison throughout
a predetermined period by
periodically transmitting the at
least portion of the results to one
or more participant computers in
communication with the at least
one computer, such that the
published results do not reveal
the holdings of the financial
instrument;
Publishing or transmitting
information is insignificant extra-
solution activity that does not add
significantly more to the abstract idea
to render the claimed invention
patent-eligible. Revised Guidance 55,
n.31; see also MPEP § 2106.05(g);
and see buySAFE, Inc. v. Google,
Inc., 765 F.3d 1350, 1355 (Fed. Cir.
2014) (computer receives and sends
information over a network).
[L6] initiating, by the one or
more participant computers, one
or more transactions involving at
least a portion of the second data
set without receiving the second
data set, based on the published
results; and
Initiating a transaction is an abstract
idea, i.e., a certain method of
organizing human activity including
a commercial interaction in the form
of sales activity. See Revised
Guidance 52.
See Step 2A(ii), infra.
[L7] executing, by the at least
one computer, the one or more
transactions initiated by the one
or more participant computers.
Executing a transaction is an abstract
idea, i.e., a certain method of
organizing human activity including
a commercial interaction in the form
of sales activity. See Revised
Guidance 52.
Spec. 19 (Claims App.).
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Under the broadest reasonable interpretation standard,17 we conclude
limitations L1 through L7 recite steps and functions that would ordinarily
occur when carrying out the abstract idea of trading financial instruments
without knowledge of the specific assets underlying the traded instruments
in order to preserve fund secrecy. See Non-Final Act. 5–9; and see Spec.
¶ 35. For example, statistically creating a proxy or model portfolio as a
stand-in or surrogate for a financial instrument having specific holdings is an
abstract idea, whether initiated person-to-person, on paper, or using a
computer.
We determine that claim 1, overall, recites a certain method of
organizing human activity as a commercial interaction in the form of
execution of one or more sales transactions that may also be performed by
pen and paper. This type of activity, i.e., executing one or more transactions
using information from a statistically-determined model portfolio, as recited
in limitations L1 through L7, for example, and aside from any computer-
related aspects, includes longstanding conduct that existed well before the
advent of computers and the Internet, and could be carried out by a human
with pen and paper. See CyberSource Corp. v. Retail Decisions, Inc., 654

17 During prosecution, claims must be given their broadest reasonable
interpretation when reading claim language in light of the specification as it
would be interpreted by one of ordinary skill in the art. In re Am. Acad. of
Sci. Tech. Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). Under this standard,
we interpret claim terms using “the broadest reasonable meaning of the
words in their ordinary usage as they would be understood by one of
ordinary skill in the art, taking into account whatever enlightenment by way
of definitions or otherwise that may be afforded by the written description
contained in the applicant’s specification.” In re Morris, 127 F.3d 1048,
1054 (Fed. Cir. 1997).
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F.3d 1366, 1375 (Fed. Cir. 2011) (“That purely mental processes can be
unpatentable, even when performed by a computer, was precisely the
holding of the Supreme Court in Gottschalk v. Benson.”).18
Thus, under Step 2A(i), we agree with the Examiner that claim 1’s
“computer-implemented method for presenting valuation information
representative of data without revealing contents of the data” recites a
judicial exception. We conclude claim 1, under our Revised Guidance,
recites a judicial exception of a certain method of organizing human activity,
i.e., a commercial interaction in the form of sales activities, and thus is an
abstract idea.
Step 2A(ii): Judicial Exception Integrated into a Practical Application?
If the claims recite a judicial exception, as we conclude above, we
proceed to the “practical application” Step 2A(ii) in which we determine
whether the recited judicial exception is integrated into a practical
application of that exception by: (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception(s); and

18 Our reviewing court recognizes that “[a]n abstract idea can generally be
described at different levels of abstraction.” Apple, Inc. v. Ameranth, Inc.,
842 F.3d 1229, 1240 (Fed. Cir. 2016). That need not and, in this case does
not, “impact the patentability analysis.” Id. at 1241. Further, “[t]he Board’s
slight revision of its abstract idea analysis does not impact the patentability
analysis.” Id. Moreover, merely combining several abstract ideas does not
render the combination any less abstract. RecogniCorp, LLC v. Nintendo
Co., 855 F.3d 1322, 1327 (Fed. Cir. 2017) (“Adding one abstract idea (math)
to another abstract idea . . . does not render the claim non-abstract.”); see
also FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093–94 (Fed.
Cir. 2016) (determining the pending claims were directed to a combination
of abstract ideas).
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(b) evaluating those additional elements individually and in combination to
determine whether they integrate the exception into a practical application.
As to the specific limitations, we find limitation L4 recites
insignificant data gathering. See MPEP § 2106.05(g). Data gathering, as
performed by the steps or function in Appellant’s claims, is a classic
example of insignificant extra-solution activity. See, e.g., In re Bilski, 545
F.3d 943, 963 (Fed. Cir. 2008) (en banc), aff’d sub nom, Bilski v. Kappos,
561 U.S. 593 (2010).
We also find limitation L5 recites insignificant extra-solution activity.
The Supreme Court guides that the “prohibition against patenting abstract
ideas ‘cannot be circumvented’ [by] adding ‘insignificant postsolution
activity.’” Bilski, 561 U.S. at 610–11 (quoting Diehr, 450 U.S. at 191–92).
On this record, we are of the view that Appellant’s claims do not operate the
recited generic computer components in an unconventional manner to
achieve an improvement in computer functionality. See MPEP § 2106.05(a).
In addition to the abstract steps recited in limitations L2, L3, and L7
identified in Step 2A(i), supra, claim 1 further recites (emphasis added)
limitation L6, i.e., “initiating, by the one or more participant computers, one
or more transactions involving at least a portion of the second data set
without receiving the second data set, based on the published results.”
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For the reasons discussed below, we conclude limitation L6 integrates
the abstract idea into a practical application as determined under at least one
of the MPEP sections cited above.19
Appellant’s Specification discloses, “[t]his invention relates to
systems and methods to allow public intra-day trading of financial
instruments such as shares of actively managed funds or exchange-traded
notes on secondary markets without knowledge of the specific assets
underlying the traded instruments.” Spec. ¶ 1.
The invention provides systems and methods that allow
trading of any fund while maintaining secrecy of the specific
assets of the fund. While much of the following description is
in terms of AMETFs, the funds traded using the systems and
methods of the invention can include (and the term "fund" as
used herein includes at least the following): any type of
investment instrument including, for example, shares of mutual
funds, unit investment trusts (UITs), closed- end funds, grantor
trusts, hedge funds, any investment company, or any other type
of collective investment. Furthermore, while the examples
provided herein demonstrate intra-day trading of fund shares on
a stock exchange without disclosure of fund assets, the systems
and methods of the invention are equally applicable to trading
of secret-asset fund shares at any time on any venue, market, or
exchange, for example, after-hours trading on a U.S. or foreign
exchange, or on an electronic trading network (ECN) or over-
the-counter, third market, or other off-exchange trading venue.
Spec. ¶ 35.
Appellant argues, their “invention includes a completely novel set of
rules for creating and publishing the type of information needed to provoke

19 See, e.g., MPEP § 2106.05(a) “Improvements to the Functioning of a
Computer or To Any Other Technology or Technical Field,” and
§ 2106.05(e) “Other Meaningful Limitations.”
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certain computer activities, while maintaining the basis of that information
(i.e., proprietary information) private. No other system in this art performs
such functions, whether manually or electronically.” Appeal Br. 15.
Further,
the claimed published statistical behavior information creation
and execution rules only exist in Appellant’s invention. It is the
incorporation of the Appellant’s new set of rules that keeps
proprietary data secret while allowing execution of the
proprietary data set in a completely unconventional manner,
and not a mere use of a computer, that provides the
improvement to prior computer systems.
Appeal Br. 15–16.
We find Appellant’s argument persuasive that at least carrying out the
step of limitation L6, i.e., “initiating, by the one or more participant
computers, one or more transactions involving at least a portion of the
second data set without receiving the second data set, based on the published
results” provides improvements to the underlying technology or technical
field, namely, fund trading systems. See MPEP § 2106.05(a) or,
alternatively, § 2106.05(e) “Other Meaningful Limitations.”
With respect to these other meaningful limitations, we find guidance
in MPEP § 2106.05(e), which summarizes and relies upon the Supreme
Court’s holding in Diehr, cited supra, and our reviewing court’s holdings in
Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057 (Fed. Cir.
2011) (decision on remand from the Supreme Court, which had vacated the
lower court’s prior holding of ineligibility in view of Bilski v. Kappos).
In Diehr, the Court evaluated the additional non-abstract limitations,
and found them to be meaningful, because they sufficiently limited the use
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of the (abstract idea) mathematical equation to the practical application of
molding rubber products. MPEP § 2106.05(e) (citing Diehr, 450 U.S. at
184, 187).
In Classen, the Federal Circuit held that, although the analysis step
was an abstract mental process that collected and compared known
information, the (practical application) immunization step was meaningful
because it integrated the results of the analysis into a specific and tangible
method that resulted in the method “moving from abstract scientific
principle to specific application.” MPEP § 2106.05(e) (citing Classen, 659
F.3d at 1066–68).
We find these other meaningful limitations identified above provide a
technological improvement to fund trading systems. Appeal Br. 6 et seq.
Accordingly, we conclude, when the claim is considered as a whole, the
recited judicial exception is integrated into a practical application as
determined under either MPEP sections 2106.06(a) or 2106.05(e) cited
above, such that the claim is patent-eligible.
Because the claims are directed to a patent-eligible concept, this
concludes the patent-eligibility inquiry.
Therefore, based upon the findings and legal conclusions above, on
this record and in consideration of the Revised Guidance, we are persuaded
the claims are directed to patent-eligible subject matter, such that we do not
sustain the § 101 rejection of claim 1, and grouped claims 2–31 which stand
therewith. See Claim Grouping, supra.
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3. OTDP Rejection R3 of Claims 1–27
Issue 3
Did the Examiner err in rejecting claims 1–27 under the doctrine of
non-statutory obviousness type double patenting over the reference patent
claims indicated above?
Analysis
In view of the lack of any substantive or separate arguments directed
to OTDP Rejection R3 of claims 1–27 (see Appeal Br. 18), we pro forma
affirm the Examiner’s rejection of these claims. Arguments not made are
waived.20
4. § 103 Rejection R4 of Claims 1, 3–7, 9–14, 16–31
Issue 4
Appellant argues (Appeal Br. 16–17) the Examiner’s rejection of
claim 1 under 35 U.S.C. § 103(a) as being obvious over the combination of
Payne, Pruitt, and Dembo is in error. These contentions present us with the
following issue:
Did the Examiner err in finding the cited prior art combination teaches
or suggests “[a] computer-implemented method for presenting valuation
information representative of data without revealing contents of the data”
that includes, inter alia, the steps of “executing a statistical comparison

20 Appellant merely argues, “[a]s this is a provisional rejection, the
Appellant respectfully refrains from addressing this rejection until such time
as this application is deemed allowable.” Appeal Br. 18. As we highlighted
above (see n.4), we determine this rejection should not be designated as
provisional because the reference claims are found in issued patents.
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between a first data set and a second data set, the first data set defining a
model portfolio . . . the model portfolio exhibiting first characteristics that
correspond to second characteristics of the financial instrument without
revealing the holdings of the financial instrument,” and “periodically
publishing at least a portion of the results of the statistical comparison . . .
such that the published results do not reveal the holdings of the financial
instrument,” as recited in claim 1?
Analysis
The Examiner finds Dembo teaches or suggests that the model
portfolio does not reveal the holdings of a reference asset for the financial
instrument. Non-Final Act. 15 (citing Dembo col. 3, ll. 1–6, 23–26; col. 8,
ll. 12–16; claims 8 and 14).
Appellant responds by arguing, “Dembo is directed to a method for
generating a replicating portfolio which models a target portfolio containing
financial instruments.” Appeal Br. 16. “[I]n Dembo, the specific holdings
of the target portfolio and the replicating portfolio are indeed known and
revealed to the user, i.e., portfolio manager.” Id.
The Examiner further finds:
Dembo states that “A portfolio manager controls a portfolio (or
‘book’) of equities or other securities that are usually traded on
an exchange, such as the New York Stock Exchange. The
portfolio manager must continuously adjust the book by making
trades aimed at increasing reward (that is, profit) while reducing
the risk of loss. In some cases, the portfolio manager may
decide to undertake a particular risk where the risk is slight
compared to the potential reward. As the portfolio manager
makes trades, the risk and potential reward values of the
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portfolio adjust according to the characteristics of the changing
portfolio assets.”
Ans. 21–22 (citing Dembo col. 1, ll. 15–25).21
We are persuaded by Appellant’s argument22 because the cited portion
of Dembo discloses that the underlying assets of the fund are known:
The computer 202 is in communication with a number of
databases 206 to 210 which store information relating to the
various types of short term options that are available in today's
market, (i.e. 3 months, 6 months, etc.), the underlying assets
available for each type of short term options, (e.g. IBM shares,
Texaco shares, etc.), and expected payouts on any of the assets
(i.e., dividends payable).
Dembo col. 8, ll. 27–34 (emphasis added).
Based upon the findings above, on this record, we are persuaded of at
least one error in the Examiner’s reliance on the cited prior art combination
to teach or suggest the disputed limitation of claim 1, such that we find error
in the Examiner’s resulting legal conclusion of obviousness. Therefore, we
do not sustain the Examiner’s obviousness rejection of independent claim 1,
and independent claims 7 and 14, which recited the disputed limitation in
commensurate form. We also do not sustain the rejection of grouped

21 The Examiner also states, “[t]he invention of Kiron et al. is direct toward
mutual funds ([Title] [Abstract]) and mutual fund portfolio managers
([1]6]).” Appeal Br. 22 (emphasis added). We do not understand the
reference to “Kiron et al.” because, on this record, Kiron does not appear to
be implicated in any rejection before us on Appeal.
22 Because we agree with at least one of the dispositive arguments advanced
by Appellant, we need not reach the merits of Appellant’s other arguments.
See Beloit Corp. v. Valmet Oy, 742 F.2d 1421, 1423 (Fed. Cir. 1984)
(finding an administrative agency is at liberty to reach a decision based on “a
single dispositive issue”).
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dependent claims 3–6, 9–13, and 16–31 which stand therewith. See Claim
Grouping, supra.
5. Rejection R5 of Claims 2, 8, and 15
In light of our reversal of the rejections of independent claims 1, 7,
and 14, supra, we also reverse obviousness Rejection R5 of claims 2, 8, and
15 under § 103, which variously and ultimately depend from claims 1, 7,
and 14. On this record, the Examiner has not shown how the additionally
cited secondary Present reference overcomes the aforementioned
deficiencies with Dembo, as discussed above regarding claim 1.
REPLY BRIEF
To the extent Appellant may advance new arguments in the Reply
Brief (Reply Br. 1–10) not in response to a shift in the Examiner’s position
in the Answer, arguments raised in a Reply Brief that were not raised in the
Appeal Brief or are not responsive to arguments raised in the Examiner’s
Answer will not be considered except for good cause (see 37 C.F.R.
§ 41.41(b)(2)), which Appellant has not shown.
CONCLUSIONS
(1) The Examiner erred with respect to written description
Rejection R1 of claims 1, 7, and 14 under 35 U.S.C. § 112, first paragraph,
and we do not sustain the rejection.
(2) Under our Revised Guidance, governed by relevant case law,
claims 1–31 in Rejection R2 are patent-eligible under 35 U.S.C. § 101, and
we do not sustain the rejection.
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(3) Appellant has not offered any argument to persuade us that the
Examiner erred with respect to OTDP Rejection R3 of claims 1–27 over the
reference patent claims indicated above, and we pro forma affirm the
rejection.
(4) The Examiner erred with respect to obviousness Rejections R4
and R5 of claims 1–31 under 35 U.S.C. § 103(a) over the cited prior art
combinations of record, and we do not sustain the rejections.
DECISION SUMMARY
Claims
Rejected
35 U.S.C.
§
Basis /
References
Affirmed Reversed
1, 7, 14 112, ¶ 1 Written
Description
1, 7, 14
1–31 101 Subject Matter
Eligibility
1–31
1–27 Obviousness-
Type Double
Patenting
1–27
1, 3–7, 9–
14, 16–31
103(a) Payne, Pruitt,
Dembo
1, 3–7, 9–14,
16–31
2, 8, 15 103(a) Payne, Pruitt,
Dembo,
Present
2, 8, 15
Overall
Outcome
1–27 28–31
FINALITY AND RESPONSE
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv). See 37
C.F.R. § 41.50(f).
AFFIRMED IN PART