Ex Parte Allen et al

Patent Trial and Appeal BoardAug 27, 2013

09929886 (P.T.A.B. Aug. 27, 2013)

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. 09/929,886 08/15/2001 Anne E. Allen 09163-20901 9301 27171 7590 08/28/2013 MILBANK, TWEED, HADLEY & MCCLOY 1 CHASE MANHATTAN PLAZA NEW YORK, NY 10005-1413 EXAMINER CHENCINSKI, SIEGFRIED E ART UNIT PAPER NUMBER 3695 MAIL DATE DELIVERY MODE 08/28/2013 PAPER 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. PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________________ Ex parte ANNE E. ALLEN and PAUL N. DESROCHES ____________________ Appeal 2011-004858 Application 09/929,886 Technology Center 3600 ____________________ Before: MURRIEL E. CRAWFORD, MEREDITH C. PETRAVICK, and MICHAEL W. KIM, Administrative Patent Judges. CRAWFORD, Administrative Patent Judge. DECISION ON APPEAL Appeal 2011-004858 Application 09/929,886 2 STATEMENT OF THE CASE Appellants seek our review under 35 U.S.C. § 134 from the Examiner’s final rejection of claims 12-15, 17-19, 21-24, 42, 43, 46-50, 52- 57, 87-89, 93, and 94. We have jurisdiction under 35 U.S.C. § 6(b). SUMMARY OF THE DECISION We reverse. BACKGROUND Appellants’ invention is directed to automated securities transactions on a securities exchange with a display book and an auction market crowd. (Spec. 1:12-14). Claim 12 is illustrative: 12. A method implemented at least partially in a programmed computer for processing a round-lot securities order on a single securities exchange, the method comprising: a) receiving by the programmed computer, an execution allocation option for a security, wherein the execution allocation option is one of three options selected from the group consisting of allocate execution to crowd only, allocate execution to book only, or allocate a percentage of execution to crowd and allocate a percentage of execution to book; b) receiving by the programmed computer, the round-lot securities order for the security, after receiving the execution allocation option; c) determining by the programmed computer, whether the securities order includes an indicator requesting automatic execution, wherein the indicator requesting automatic execution directs the single securities exchange to execute the securities order at either a best bid to buy or best offer to sell as reflected in a quote price for the security that is published by the single securities exchange and also acknowledges that the securities Appeal 2011-004858 Application 09/929,886 3 order will not be exposed to an auction market crowd of the single securities exchange for possible price improvement; d) if the securities order does not include the indicator requesting automatic execution, exposing the securities order to the auction market crowd of the single securities exchange for possible price improvement; e) if the securities order includes the indicator requesting automatic execution, automatically executing by the programmed computer, the securities order at the best bid to buy or best offer to sell as reflected in the published quote price for the security, without exposing the securities order for possible price improvement; and f) after automatically executing the securities order, allocating by the programmed computer, shares of the automatic execution among contra parties according to the previously received execution allocation option. Appellants appeal the following rejections: Claims 12-15, 17-19, 23, 24, 42, 43, 46-50, 54 and 87-891 are rejected under 35 U.S.C. § 101 as reciting non-statutory subject matter. Claims 12-15, 17-19, 21-24, 42, 46-48, 52-57, 93, and 94 are rejected under 35 U.S.C. § 103(a) as unpatentable over Cristofich (US 6,173,270 B1, iss. Jan. 9, 2001), Applicant Admitted Prior Art (hereafter AAPA), Lupien (US 6,098,051, iss. Aug. 1, 2000), and Braddock (US 4,412,287, iss. Oct. 25, 1983). Claims 43 and 49 are rejected under 35 U.S.C. § 103(a) over Cristofich, AAPA, Lupien, Braddock, and Madoff (US 2001/0044767 A1, pub. Nov. 22, 2001). 1 We interpret as inadvertent error the inclusion of canceled claims 16, 44, and 45 in the Examiner’s statement of rejection. Ans. 6. Appeal 2011-004858 Application 09/929,886 4 Claim 50 is rejected under 35 U.S.C. § 103(a) as unpatentable over Cristofich, AAPA, Lupien, Braddock, and Wilton (US 6,519,574 B1, iss. Feb. 11, 2003). Claims 87-89 are rejected under 35 U.S.C. § 103(a) as unpatentable over Cristofich, AAPA, Lupien, and Joel Hasbrouck, et al., New York Stock Exchange Systems and Trading Procedures, NYSE Working Paper #93-01, 3-60 (Apr. 27, 1993) (hereafter Hasbrouck). ANALYSIS Patentable subject matter We are persuaded of error by Appellants’ argument that the pending method claims recite patentable subject matter, because the methods “are not mere principles, fundamental truths, original causes, or motives. Rather, they are discrete and finite technical processes that are implemented at least partially on a computer that is specifically programmed to process a particular type of order ....” App. Br. 22. The Examiner argues, among other things, that step “c) determining by the programmed computer, whether the securities order includes an indicator,” as in independent claims 12, 23, 24, 42, and 54 (with substantially similar language in independent claim 87) is “insignificant [extra] solution [activity]” that is merely gathering data. Ans. 22. However, the determining step is not just gathering data, because it is making a decision, by a specially-programmed, particular machine. We therefore find that claims 12, 23, 24, 42, 54, and 87 recite patentable subject matter by reciting methods performed on a particular, programmed computer, that are not merely abstract ideas. For this reason, we reverse the Appeal 2011-004858 Application 09/929,886 5 rejection under 35 U.S.C. § 101 of claims 12-15, 17-19, 23, 24, 42, 43, 46- 50, 54, and 87-89. Obviousness We are persuaded of error by Appellants’ argument that the cited section of Cristofich does not disclose the determining limitation, c), because “Cristofich only shares the word ‘indicator’ in common with step c). Cristofich is describing a ‘tax payment field’ being used [as] an ‘indicator of whether a stock or cash disbursement is requested.’ This has nothing to do” with the claimed determining step. App. Br. 31-32. With respect to limitation c), the Examiner finds that Cristofich discloses “using indicators for specific transaction requests,” directing our attention to Cristofich, column 15, line 41. Ans. 10. The Examiner additionally finds “Re. c) Lupien discloses best bid and best ask, which is equivalent to a best bid to buy or best offer to sell,” directing our attention to Lupien, column 2, line 8. Ans. 11. The Examiner further reasons: The ordinary practitioner would have seen it as obvious to have used indicators throughout the securities transaction invention, including for determining by the programmed computer, whether the securities order includes an indicator requesting automatic execution, wherein the indicator requesting automatic execution directs the single securities exchange to execute the securities order at either a best bid to buy or best offer to sell as reflected in a quote price for the security that is published by the single securities exchange and also acknowledges that the securities order will not be exposed to an auction market crowd of the single securities exchange for possible price improvement. Performing the trades within the exchange within which the security is listed would have been the most obvious course to take for the ordinary practitioner for this invention, since it would require special instructions to motivate the practitioner to do otherwise[]. Appeal 2011-004858 Application 09/929,886 6 Ans. 10. The first cited section, Cristofich, discloses “an indicator,” but this is designated as a “tax payment field as an indicator of whether a stock or cash disbursement is requested.” Col. 15, ll. 40-46. This is part of a section of the disclosure, from column 13, line 3, through column 16, that discloses “simulations of the tax consequences of an option exercise” (col. 13, ll. 3-6), and does not disclose the function of determining if an indicator requesting automatic execution of a trade is included in a securities order, as claimed. The second cited section, Lupien, column 2, line 8, does generally disclose the terms of best bid and ask. (“Trades are executed at the closing price for exchange-listed issues, and at the midpoint of the inside market (best bid and ask) for OTC issues.”) (Col. 2, ll. 6-9). But this appears to have nothing to do with determining if an indicator requesting automatic execution of a trade is included in a securities order, as claimed, and thus does not meet the claim language. The claim, for example, does not use the terms best bid or best ask. Although the Examiner has generally argued, above, that using indicators throughout a securities transaction may be obvious, the Examiner does not direct us to any evidentiary support for the assertion that the specific, claimed “determining ... whether the securities order includes an indicator requesting automatic execution” would be obvious, other than the assertion itself. In response to arguments, the Examiner further articulates that “Cristofich makes a detailed disclosure o[f] a general process which of step c) ...,” directing our attention to “(Col. 9, ll. 1-20 – indicator – l. 3 – a time function; and l. 20, automatic execution).” Ans. 32. However, this citation Appeal 2011-004858 Application 09/929,886 7 is new, and happens to match the location to which the Examiner directs us as disclosing limitation a) related to “an execution allocation option.” Ans. 30-31. This new reasoning in the response to arguments, however, appears to supersede the Examiner’s earlier, and opposite, finding that “Cristofich does not explicitly disclose: a) receiving by the programmed computer an execution allocation option for a security.” Ans. 10. The most recent argument by the Examiner, therefore, is that both the “execution allocation option” of limitation a), and the “indicator requesting automatic execution” of limitation c), are both found at the single disclosure at Cristofich, column 9, lines 1-20. This section of Cristofich discloses a price comparison to determine if an option contract should be exercised, stating: At test 600, the system determines if a target price exercise o[r]der has been entered for the user and if so the target price, TP(I) and the duration DD(I) for the Ith participant, block 610. The system then accesses the current quote for the specified security, defined as MAR_P(D), at block 620 and compares this price data at test 630. If the comparison criteria is met, logic proceeds to block 640 where the system links to an exchange for automatic execution of the options exercised. (Col. 9, ll. 12-20). Although this price comparison could be interpreted as disclosing either the “allocation option” or the “determining ... whether the securities order includes an indicator,” a single price comparison does not disclose both limitations, as argued, because they are different operations. In addition, we do not think that performing a price comparison can be interpreted as including an indicator (as in limitation c)), because the price itself is not an indicator, but only an input used to make a decision on the Appeal 2011-004858 Application 09/929,886 8 basis of a calculation. That calculation is not included in a securities order, and thus also does not meet the claim language. Thus, we find the cited sections, to which the Examiner has directed us as disclosing limitation c), fail to disclose the limitation. As a result, we find the Examiner has failed to set forth a prima facie case of obviousness, because the claimed limitation c), for determining whether the securities order includes an indicator requesting automatic execution, is missing. Therefore, we will not sustain the rejection under 35 U.S.C. § 103(a) of claim 12, as well as dependent claims 13-15, 17-19, 93, and 94. Each of the other independent claims, 21-24, 42, 52-54, and 87, include a limitation c) that is substantially identical to the recitation of claim 12. The Examiner has rejected the corresponding limitation of each of these claims only by reference to the rejection of claim 12. Ans. 9, 13, 14, 16, and 19. We therefore will not sustain the rejections of any of these claims, nor their dependent claims 43, 46-50, 55-57, 88, or 89. DECISION We reverse the rejection under 35 U.S.C. § 101 of claims 12-15, 17- 19, 23, 24, 42, 43, 46-50, 54, and 87-89. We reverse the rejections under 35 U.S.C. § 103(a) of claims 12-15, 17-19, 21-24, 42, 43, 46-50, 52-57, 87-89, 93, and 94. REVERSED Appeal 2011-004858 Application 09/929,886 9 hh