Daley, Thomas J. et al.Download PDFPatent Trials and Appeals BoardAug 21, 201910766965 - (D) (P.T.A.B. Aug. 21, 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. 10/766,965 01/29/2004 Thomas J. Daley 04-6175 4387 63710 7590 08/21/2019 INNOVATION DIVISION CANTOR FITZGERALD, L.P. 110 EAST 59TH STREET (6TH FLOOR) NEW YORK, NY 10022 EXAMINER BEHNCKE, CHRISTINE M ART UNIT PAPER NUMBER 3624 NOTIFICATION DATE DELIVERY MODE 08/21/2019 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): lkorovich@cantor.com patentdocketing@cantor.com phowe@cantor.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________________ Ex parte THOMAS J. DALEY, PAVAN K. GARAPATI, PHIL G. REEVES, and MARK E. STUTZMANN ____________________ Appeal 2018-007453 Application 10/766,9651 Technology Center 3600 ____________________ Before ROBERT E. NAPPI, SCOTT B. HOWARD, and MICHAEL T. CYGAN, Administrative Patent Judges. HOWARD, Administrative Patent Judge. DECISION ON APPEAL Appellants appeal under 35 U.S.C. § 134(a) from the Final Rejection of claims 12, 17, 18, 22, 34, 36–41, and 50–52, which constitute all of the claims pending in this application. Claims 1–11, 13–16, 19–21, 23–33, 35, and 42–49 have been cancelled. App. Br. 10–13 (Claims App’x). We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. 1 Appellants identify BGC Partners, Inc. as the real party in interest. App. Br. 3. Appeal 2018-007453 Application 10/766,965 2 THE INVENTION The disclosed and claimed invention is directed to “[a] system for avoiding transaction costs associated with trading orders comprises a memory and a processor.” Abstract. Claim 12, which is illustrative of the claimed subject matter, is reproduced in the analysis section. REJECTION Claims 12, 17, 18, 22, 34, 36–41, and 50–52 stand rejected under 35 U.S.C. § 101 as directed to patent-ineligible subject matter. ANALYSIS We have reviewed the Examiner’s rejection in light of Appellants’ arguments that the Examiner erred. In reaching this decision, we have considered all evidence presented and all arguments made by Appellants. We are not persuaded by Appellants’ arguments regarding the pending claims. An invention is patent eligible if it claims a “new and useful process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101. However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include implicit exceptions: “[l]aws of nature, natural phenomena, and abstract ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014). 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. Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework, Appeal 2018-007453 Application 10/766,965 3 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, 69 (1972)). Concepts determined to be patent eligible include physical and chemical processes, such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191 (1981)); “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))). In Diehr, the claim at issue recited a mathematical formula, but the Supreme Court held that “[a] claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula.” Diehr, 450 U.S. at 176; 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 Appeal 2018-007453 Application 10/766,965 4 attempting to limit the use of the formula to a particular technological environment.” Id. (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.”). 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 (quotation marks omitted). “A claim 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. (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. The PTO recently published revised guidance on the application of § 101. USPTO’s January 7, 2019 Memorandum, 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Memorandum”). Under that 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); and (2) additional elements that integrate the judicial exception into a practical application (see MPEP § 2106.05(a)–(c), (e)–(h)). Appeal 2018-007453 Application 10/766,965 5 See Memorandum, 84 Fed. Reg. at 52, 55–56. 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. See id. at 56. USPTO Step 2A, Prong 1 The Examiner determines that the pending claims are “directed to . . . processing trading orders in a trading exchange platform, as evidenced by the claim language found in claim 12, which is collecting information, analyzing it and displaying certain results of the collection and analysis (Electric Power Group) and obtaining and comparing intangible data (CyberSource),” which, according to the Examiner, is an abstract idea. Final Act. 6 (emphasis omitted); see also Ans. 3–4. The Memorandum “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(s) (that is, when recited on their own or per se)”: (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; Appeal 2018-007453 Application 10/766,965 6 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). Memorandum, 84 Fed. Reg. at 52 (footnotes omitted). Claim 12 is reproduced below with certain limitations emphasized and numbers added: 12. A method comprising: [1] receiving, by a processor of a trading exchange platform that manages trading between a network of remote client devices and a plurality of market centers, disclosure policies and fee policies for each of the plurality of market centers, in which each market center is an electronic market center that is external to the trading exchange platform; [2] populating, by the processor, a database with the disclosure policies and fee policies; [3] receiving, by the processor from a client device of the network of remote client devices over a communication interface, [] a first trading order for a financial instrument, in which the trading order comprises a desired quantity, a desired price, and a desired disclosure policy; [4] matching, by the processor, a portion of the desired quantity of the first trading order with at least one internal trading order in an order book of the trading exchange platform; [5] computing, by the processor, a remaining quantity of the first trading order, in which the remaining quantity comprises the desired quantity minus the portion of the first trading order that was matched with the at least one internal trading order; [6] based on disclosure policies in the database, identifying, by the processor, at least one market center of the plurality of market centers that is capable of matching the remaining quantity with the desired disclosure policy; Appeal 2018-007453 Application 10/766,965 7 [7] receiving, by the processor, best pricing information for the financial instrument at each of the at least one of the plurality of market centers; [8] calculating, by the processor based on the fee policies in the database, adjusted best pricing information for each of the at least one of the plurality of market centers; [9] selecting, by the processor, a single one of the at least one market center based on the adjusted best pricing information; [10] determining, by the processor, that the single one market center charges a fee for orders that remain unmatched for a length of time; [11] routing, by the processor, a second trading order that comprises the remaining quantity to the single one market center; [12] monitoring, by the processor, whether the second trading order is matched within the length of time; [13] in response to determining that the second trading order will remain at the single one market center for longer than the length of time, canceling, by the processor, the second trading order and submitting, by the processor, a third trading order that comprises the remaining quantity to the single one market center. App. Br. 10–11 (emphases added). These limitations, under their broadest reasonable interpretation, recite processing trading orders in a trading exchange platform. Processing trading orders in a trading exchange platform involves selling, which is an economic act, and a security, which is ordinarily sold in financial markets. Thus, like the concept of intermediated settlement in Alice, and the concept of hedging in Bilski, the concept of placing trading orders recited in Appellants’ claims “is a fundamental economic practice long prevalent in our system of commerce.” Alice, 573 U.S. at 216 (citations and internal quotation marks omitted); see also OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362–63 (Fed. Cir. 2015) (concluding that claimed concept of “offer-based price optimization” is an Appeal 2018-007453 Application 10/766,965 8 abstract idea “similar to other ‘fundamental economic concepts’ found to be abstract ideas by the Supreme Court and this court”); Credit Acceptance Corp. v. Westlake Servs., 859 F.3d 1044, 1054 (Fed. Cir. 2017), (“The Board determined that the claims are directed to the abstract idea of ‘processing an application for financing a purchase.’ . . . We agree.”). Accordingly, we conclude the claims recite a fundamental economic practice, which is one of certain methods of organizing human activity identified in the Revised Guidance, and thus an abstract idea. Additionally, the emphasized limitations above recite steps of observation, evaluation, and judgement that can be practically performed by a human, either mentally or with the use of pen and paper. Specifically, the limitations all related to placing trade orders, determining the price of the orders, and selecting the market with the best prices. Each of those steps, both individually and as a combination, can be performed by a human, either mentally or with the aid of paper and pencil, which is similar to the claims found patent ineligible as mental processes in Electric Power Group and CyberSource. See Elec. Power Grp., LLC v. Alstom, S.A., 830 F.3d 1350, 1353–54 (Fed. Cir. 2016) (“[W]e have treated collecting information, including when limited to particular content (which does not change its character as information), as within the realm of abstract ideas. . . . In a similar vein, we have treated analyzing information by steps people go through in their minds, or by mathematical algorithms, without more, as essentially mental processes within the abstract-idea category. . . . And we have recognized that merely presenting the results of abstract processes of collecting and analyzing information, without more (such as identifying a particular tool for presentation), is abstract as an ancillary part of such Appeal 2018-007453 Application 10/766,965 9 collection and analysis.” (citations omitted)); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1373 (Fed. Cir. 2011) (“Such a method that can be performed by human thought alone is merely an abstract idea and is not patent-eligible under § 101.”) (footnote omitted)); see also Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016) (“[W]ith the exception of generic computer-implemented steps, there is nothing in the claims themselves that foreclose them from being performed by a human, mentally or with pen and paper.”); Versata Dev. Grp. v. SAP Am., Inc., 793 F.3d 1306, 1335 (Fed. Cir. 2015) (“Courts have examined claims that required the use of a computer and still found that the underlying, patent-ineligible invention could be performed via pen and paper or in a person’s mind.”). Accordingly, we conclude the claim recites a method of observation, evaluation, and judgment that can be practically performed in the human mind, which is a mental process identified in the Memorandum, and thus an abstract idea. We are not persuaded by Appellants’ arguments that the Examiner erred. First, Appellants argue that the Examiner improperly ignored elements of the claim. App. Br. 7. According to Appellants, because of the improper “reduction of the claims,” the Examiner “failed to identify an idea to which the claims are allegedly directed.” Id. We do not agree. As discussed above, claim 12 recites steps for processing trading orders in a trading exchange platform. Accordingly, the Examiner sufficiently explains how the claims recite processing trading orders in a trading exchange platform without improperly oversimplifying the claims. Appeal 2018-007453 Application 10/766,965 10 Second, Appellants argue that the Examiner erred by “not cit[ing] to appropriate court decisions or explain how the concepts correspond to concepts in cited court decisions.” Id. According to Appellants, “the Examiner mentions Electric Power Group and Cyber Source” but “Electric Power Grid involved power use monitoring” and “Cybersource involved credit card fraud.” Id. at 8. We disagree. The Examiner cites two cases, Electric Power Group and CyberSource, and explains how the abstract idea recited in claim 12 is similar to the abstract idea recited in those cases. See Final Act. 7–9; Ans. 3–5. That is, like claim 12, the claims in Electric Power Group and CyberSource are directed to mental steps which can be practically performed by the human mind. Nor are we persuaded by Appellants’ argument that the claims in the cases are directed to different technology: power use monitoring in Electric Power Group and credit card fraud in CyberSource. Appellants’ argument focuses too narrowly on the technology and ignores the broader holding of those cases. USPTO Step 2A, Prong 22 In determining whether claim 12 is “directed to” the identified abstract ideas, we next consider whether claim 12 recites additional elements that integrate the judicial exception into a practical application. For the reasons set forth below, we discern no additional element (or combination of 2 We acknowledge that some of these considerations may be properly evaluated under Step 2 of Alice (Step 2B of Office guidance). Solely for purposes of maintaining consistent treatment within the Office, we evaluate it under Step 1 of Alice (Step 2A of Office guidance). Appeal 2018-007453 Application 10/766,965 11 elements) recited in claim 12 that integrates the judicial exception into a practical application. See Memorandum at 54–55. The Examiner determines that the additional limitations recited in claim 12 simply invoke the use of “computers, networks and displays [which] does not transform the claimed subject matter into patent-eligible applications.” Final Act. 6. Specifically, the Examiner determines that “[t]he claims at issue do not require any nonconventional computer network, or display components, or even a ‘non-conventional and non-generic arrangement of known, conventional pieces,’ but merely call for performance of the claimed information collection analysis and display functions ‘on a set of generic computer components’ and display devices.” Id. at 6–7 (citing BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016)). The Examiner further determines that the additional limitations of a processor, remote client devices, trading exchange apparatus, process, network interface, and memory do not “recite 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.” Id. at 7. Instead, the Examiner determines that the improvement recited in the claims are improvements to the abstract idea. Id. at 8–9; see also Ans. 6 (“The identified improvements argued by Applicant are at best improvements to the performance of the abstract idea (e.g., improvements made in the underlying business method) and not in the operations of any additional elements or technology.”). Appeal 2018-007453 Application 10/766,965 12 The Examiner further finds that although Appellants argue that the claim is directed to a technological improvement, Appellants “have not provided any evidence or technical reasoning that the claims improve some existing technological process or solves some technological problem in conventional industry practice, such as in Diehr.” Ans. 6; see also id. at 7 (“Use of a computer or other machinery in its ordinary capacity for economic or other tasks (e.g., to receive, store, or transmit data) or simply adding a general purpose computer or computer components after the fact to an abstract idea (e.g., a fundamental economic practice or mathematical equation) does not provide significantly more.” (citations omitted)). Appellants argue the Examiner improperly focuses on the hardware components of the claims and ignores the inventive software components. App. Br. 8. According to Appellants, the Federal Circuit recognizes that “software can make an inventive concept.” Id. Appellants further argue, citing BASCOM, that the ability to implement an invention using “generic computer elements or performing generic functions is not determinative of whether a claim adds significantly more to an abstract idea.” Id. at 9. According to Appellants, because the claimed invention “improve[s] the efficiency and usability of trading systems,” the additional limitations “add significantly more than an abstract idea.” Id. We disagree with Appellants. Claim 12 does not constitute an improvement to computer technology; rather, it merely adapts the fundamental economic practice and mental process described above to an execution of steps performed by computer components. Relying on a computer to perform routine tasks more quickly or more accurately is Appeal 2018-007453 Application 10/766,965 13 insufficient to render a claim patent eligible. See Alice, 573 U.S. at 224 (“use of a computer to create electronic records, track multiple transactions, and issue simultaneous instructions” is not an inventive concept); Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012) (a computer “employed only for its most basic function . . . does not impose meaningful limits on the scope of those claims”); MPEP § 2106.05(f)(2) (“Use of a computer or other machinery in its ordinary capacity for economic or other tasks (e.g., to receive, store, or transmit data) or simply adding a general purpose computer or computer components after the fact to an abstract idea (e.g., a fundamental economic practice or mathematical equation) does not provide significantly more.”). Contrary the Appellants’ arguments, claim 12 is not similar to the claims found patent eligible in BASCOM. There, the claims recited a “specific method of filtering Internet content” requiring “the installation of a filtering tool at a specific location, remote from the end-users, with customizable filtering features specific to each end user.” BASCOM, 827 F.3d at 1345–46, 1350. The Federal Circuit reasoned that the claims covered “a technology-based solution . . . to filter content on the Internet that overcomes existing problems with other Internet filtering systems” and “improve[s] an existing technological process.” Id. at 1351 (citing Alice, 573 U.S. at 223); see Alice, 573 U.S. at 223 (explaining that “the claims in Diehr were patent eligible because they improved an existing technological process”). In contrast to the claims in BASCOM, the claims here do not cover a technology-based solution that improves an existing technological process. See Final Act. 6–9; Ans. 4–8. As the Examiner determines, the claimed Appeal 2018-007453 Application 10/766,965 14 invention does not focus on improving an existing technological process, Ans. 7–88. Hence, the claims here do not resemble the claims in BASCOM. Similarly unpersuasive is Appellants’ reliance on Enfish3 in arguing that computer software can be patentable. In Enfish, the patent was “directed to a specific improvement to computer functionality,” embodied in a self-referential database table, and recited technical details for a software component that distinguished from the prior art, thus improving how the computer was configured. Enfish, 822 F.3d at 1338–1339. Further, the Federal Circuit has explained that the claims “in Enfish did more than allow computers to perform familiar tasks with greater speed and efficiency” by “permitt[ing] users to launch and construct databases in a new way.” Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1305 (Fed. Cir. 2018). In contrast to Enfish, Appellants do not describe an advance in hardware or software that, for example, causes a computer itself or a network itself to operate faster or more efficiently. The alleged improvement in processing trading orders in a trading exchange platform does not parallel the improvement in Enfish and does not impart patent eligibility. See Secured Mail Sols. LLC v. Universal Wilde, Inc., 873 F.3d 905, 910 (Fed. Cir. 2017) (explaining that the claims in Enfish “focused on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity”). The claims here use computers and networks in their ordinary capacities. Accordingly, we are not persuaded of error in the Examiner’s determination that claim 12 is recites an abstract idea, and we find the 3 Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016). Appeal 2018-007453 Application 10/766,965 15 claimed additional elements do not integrate the abstract idea into a practical application. USPTO Step 2B Turning to step 2 of the Alice/Mayo framework, we look to whether claim 12 (a) adds a specific limitation or combination of limitations that are not well-understood, routine, conventional activity in the field, or (b) simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception. Memorandum, 84 Fed. Reg. at 56. The Examiner determines that “[t]he steps/functions of identifying data, accessing data, determining data, and presenting data are well- understood, routine, and conventional functions of a generic computer.” Ans. 7 (citing FairWarning IP, LLC v. latric Sys., Inc., 839 F.3d 1089, 1095 (Fed. Cir. 2016)). Appellants do not directly address this finding. In FairWarning, the Federal Circuit found that a user interface and a microprocessor that analyzes data are “generic computer elements” that “do not alone transform an otherwise abstract idea into patent-eligible subject matter.” 839 F.3d at 1096 (citing DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014)). Similarly, the Federal Circuit has also found communication networks generic. E.g., Mortg. Grader, Inc. v. First Choice Loan Serv. Inc., 811 F.3d 1314, 1324–25 (Fed. Cir. 2016) (“Instead, the claims ‘add’ only generic computer components such as an ‘interface,’ ‘network,’ and ‘database.’ These generic computer components do not satisfy the inventive concept requirement.” (citations omitted)). Appeal 2018-007453 Application 10/766,965 16 Similar to the claims found not patent eligible in FairWarning and Mortgage Grader, the additional elements of claim 12 of the instant application merely recites generic computer components such as a processor and a communications link. Such generic components have been found by the Courts to be well-understood, routine, and conventional and not sufficient to transform an abstract idea into patent-eligible subject matter. Moreover, as pointed out by the Examiner (Ans. 6–7), Appellants have not argued that the additional limitations are anything other than well- understood, routine, and conventional. See Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010) (precedential) (“If an appellant fails to present arguments on a particular issue — or, more broadly, on a particular rejection — the Board will not, as a general matter, unilaterally review those uncontested aspects of the rejection.”). Conclusion on Section 101 Rejection Accordingly, we sustain the Examiner’s rejection of claim 12 as being directed to patent-ineligible subject matter, as well as independent claim 34 with commensurate limitations, and dependent claims 17, 18, 22, 36–41, and 50–52, not separately argued. DECISION For the above reasons, we affirm the Examiner’s decisions rejecting claims 12, 17, 18, 22, 34, 36–41, and 50–52. 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). Appeal 2018-007453 Application 10/766,965 17 AFFIRMED Copy with citationCopy as parenthetical citation