Ex Parte Browne et alDownload PDFPatent Trial and Appeal BoardMar 20, 201712830992 (P.T.A.B. Mar. 20, 2017) 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. 12/830,992 07/06/2010 Sid Browne GOLDl 1-00293 1617 132787 7590 Docket Clerk-GOLD P.O. Drawer 800889 Dallas, TX 75380 EXAMINER APPLE, KIRSTEN SACHWITZ ART UNIT PAPER NUMBER 3694 NOTIFICATION DATE DELIVERY MODE 03/22/2017 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): j ohn. maxin @ gs. com patents @ munckwilson. com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte SID BROWNE and ARTHUR MAGHAKIAN Appeal 2015-002437 Application 12/830,992 Technology Center 3600 Before HUBERT C. LORIN, BIBHU R. MOHANTY, and BRADLEY B. BAYAT, Administrative Patent Judges. BAYAT, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Appellants1 appeal under 35 U.S.C. § 134(a) from the Examiner’s Final rejection of claims 21 42. We have jurisdiction under 35 U.S.C. § 6(b). SUMMARY OF THE DECISION We AFFIRM and designate our affirmance as a NEW GROUND OF REJECTION pursuant to our authority under 37 C.F.R. § 41.50(b). 1 Appellants identify “Goldman, Sachs & Co.” as the real party in interest (Appeal Br. 2). Appeal 2015-002437 Application 12/830,992 CLAIMED INVENTION Appellants’ claimed invention relates to measuring market and credit risk (Spec. 1:2-4). Claim 39, reproduced below with bracketed numerals added, is illustrative of the subject matter on appeal. 39. A processor-implemented method for evaluating an integrated risk in a portfolio, comprising: [ 1 ] analyzing via a processor a portfolio comprising a plurality of financial instruments to determine at least one risk factor associated with each instrument, wherein the risk factor is noise-varying and comprises a noise component; [2] for each instrument, [3] receiving a parametric simulation model for the price of the financial instrument; [4] determining values of the risk factor at various times using historical data; and [5] generating, for each risk factor in the model, a set of simulated risk factors using values selected from corresponding standardized historical residual values; [6] applying the simulated risk factors to the model for the financial instrument; [7] aggregating the simulated prices for each of the instruments in the portfolio to produce a set of simulated prices for the portfolio; [8] analyzing the set of simulated prices for the portfolio; and [9] evaluating value at risk (V AR) [sic] of the portfolio based on the analyzed set of simulated prices. 2 Appeal 2015-002437 Application 12/830,992 THE REJECTIONS The Examiner relies upon the following as evidence of unpatentability: Browne et al. US 7,228,290 B2 June 5, 2007 (“the ‘290 patent”) Browne et al. US 7,783,551 B1 Aug. 24, 2010 (“the ‘551 patent”) The following rejections are before us for review: 1. Claims 21—42 stand rejected under 35 U.S.C. § 101 as being directed to ineligible subject matter. 2. Claims 21—42 stand rejected under the judicially created doctrine of obviousness-type double patenting as being unpatentable over claim 1 of the ‘290 patent and claim 1 of the ‘551 patent. ANALYSIS Non-statutory Subject Matter At the outset, we note § 101 case law has developed significantly since the briefing was submitted by Appellants and the Examiner. Nevertheless, we agree with the Examiner’s assessment that the claimed subject matter is not patent-eligible. In rejecting claims 21—42 under 35 U.S.C. § 101, the Examiner determines that the claims are “directed to the abstract idea of parametric simulation model for a financial instrument” (Ans. 2). According to the Examiner, “a model for a financial instrument is considered based on standard economic principals and therefore not patentable subject matter” and “additional element(s) or combination of elements in the claim(s) other 3 Appeal 2015-002437 Application 12/830,992 than the abstract idea per se amount(s) to no more than: processor with memory” {id. at 2—3). Alice2 identifies a two-step framework for determining whether claimed subject matter is judicially-excepted from patent eligibility under §101. According to step one, “[w]e must first determine whether the claims at issue are directed to a patent-ineligible concept,” such as an abstract idea. Alice, 134 S. Ct. at 2355. Taking claim 39 as representative of the claims on appeal, the claimed subject matter is directed to analyzing risk and simulating prices for financial instruments. Analyzing risk and simulating prices for financial instruments are well-known fundamental economic practices. As such, claim 39 is directed to an abstract idea. Cf. Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“The concept of hedging [risk], described in claim 1 and reduced to a mathematical formula in claim 4, is an unpatentable abstract idea, just like the algorithms at issue in Benson and Flook.”). Step two of the Alice framework is “a search for an ‘inventive concept’ — i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.Alice, 134 S. Ct. at 2355. We have considered the claim elements — both individually and as an ordered combination — and we see nothing in the subject matter claimed that transforms the abstract idea of analyzing risk and simulating prices into an inventive concept. 2 Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). 4 Appeal 2015-002437 Application 12/830,992 Claim 39 recites “a processor-implemented method for evaluating an integrated risk in a portfolio” of financial instruments. Although claim 39 requires that the first step (“analyzing”) is performed “via a processor,” the Specification makes clear that the recited processor merely provides a generic, conventional environment in which to carry out the abstract idea. For example, the “processor” of claim 39 corresponds to the generic “high- power computing platform” such as a conventional “Sun OS computing system” disclosed in the Specification at page 14, lines 15—25. The Specification leaves it up to the reader to determine “implementation details, such as the specific computing and operating system at issue” and “appropriate software routines.” Id. “[T]he mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent- eligible invention.” Alice, 134 S. Ct. at 2358. Thus, the recited claim limitations both individually and as an ordered combination fail to transform the nature of the claim into a patent-eligible application. Appellants argue that there is no concern of monopolization (Reply Br. 4). However, while pre-emption “‘[jmight tend to impede innovation more than it would tend to promote it, thereby thwarting the primary object of the patent laws” {Alice, 134 S. Ct. at 2354 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012)), “the absence of complete preemption does not demonstrate patent eligibility” {Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)). See also OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362-63 (Fed. Cir. 2015), cert, denied, 136 S. Ct. 701, 193 (2015) (“[T]hat the claims do not preempt all price optimization or may be limited to price 5 Appeal 2015-002437 Application 12/830,992 optimization in the e-commerce setting do not make them any less abstract.”). Appellants cite Research Corp. Techs, v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010), and argue that “the claim provides improvements in the field of portfolio analysis using specific, non-generic, computer functions to analyze the portfolio in specific ways” (Reply Br. 4). The claimed invention is readily distinguishable from the blue noise mask in Research Corp. that produced “higher quality halftone images while using less processor power and memory space” (see Research Corp. 627 F.3d at 865). Here, the claimed invention relates to evaluating risk and simulating prices for financial instruments. We find the claimed invention similar to the claims related to economic practices held ineligible in Bilski (concept of hedging risk and the application of that concept to energy markets), OIP Techs, (automatically determining prices for products by testing prices and gathering statistics) and Versata Development Group v. SAP America, Inc., 793 F.3d 1306 at 1333—34 (Fed. Cir. 2015) (determining a price using organization and product group hierarchies). Like the claims at issue in Alice, OIP Techs., and Versata, the claimed invention merely requires implementation by a generic, conventional computer. Although the Specification describes the computational cost of conventional simulation techniques (Spec, at 3, line 18), the Specification does not disclose a technological solution to that problem, “but instead predominately describes the system and methods in purely functional terms.” In re TLI Commc’ns LLC Patent Litigation, 823 F.3d 607, 612 (Fed. Cir. 2016). The Specification does not describe a new computing platform, processor, memory, database, or new software routines. Rather, the 6 Appeal 2015-002437 Application 12/830,992 Specification describes a conventional computer implementation in purely functional terms, as to hardware and software alike. See, e.g., Spec, at 14, lines 15—17 (“A preferred method of implementation uses a set of appropriate software routines which are configured to perform the various method steps on a high-power computing platform”); Spec, at 14, lines 20- 24 (“Appropriate programming techniques will be known to those of skill in the art and the particular techniques used depend upon implementation details, such as the specific computing and operating system at issue”); Spec, at 15, lines 1—2 (“The various steps of the simulation method are implemented as C ++ classes and the intermediate data and various matrices are stored in respective files and databases.”). “[implementing a mathematical principle on a physical machine, namely a computer, [i]s not a patentable application of that principle.” Mayo, supra, at 1301 (citing Gottschalkv. Benson, 409 U.S. 63, at 71 (1972)). Appellants do not point to any specific improvement in computer technology or any other technology or technical field described in the Specification. Thus, “the claims at issue amount to ‘nothing significantly more’ than an instruction to apply the abstract idea [] using some unspecified, generic computer.” Alice 134 S. Ct. at 2360. Independent method claim 32 is directed to similar functionality as claim 39, albeit more broadly. Independent system claims 21 and 28 are directed to similar functionality as claim 39 (i.e., analyzing and simulating). Accordingly, we reach the same conclusion as to method claim 32 and system claims 21 and 28. As in Alice, “[t]he method claims recite the abstract idea implemented on a generic computer; the system claims recite a handful of generic computer components configured to implement the same idea.” Id. “[T]he mere 7 Appeal 2015-002437 Application 12/830,992 recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention. Stating an abstract idea “while adding the words ‘apply it’” is not enough for patent eligibility.” Id. at 2358. The rejection of independent claims 21, 28, and 32 is similarly sustained for failing to satisfy the Alice framework as discussed above. Accordingly, the non-statutory subject matter rejection of claims 21— 42 under 35 U.S.C. § 101 is sustained. We denominate this affirmed rejection as a New Ground of Rejection because in some instances our interpretation to sustain the rejection differs from the interpretation relied upon by the Examiner. Obviousness-type Double Patenting The Examiner finds that the language of claim 39 “can be found within claim 1” of the ‘551 and ‘290 patents (Final Act. 3). Appellants argue that the Examiner has not established a prima facie case as to claims 21—38 and 40-42 because the Examiner has not provided any analysis of the differences between the claims (Appeal Br. 8—17; see also Reply Br. 5—8). Regarding claim 39, Appellants argue that the Examiner has not shown that the steps of “[7] aggregating,” “[8] analyzing,” and “[9] evaluating” are obvious based on claim 1 of the ‘290 patent (Appeal Br. 15—17; see also Reply Br. 6—8). The Examiner responds that “[i]t is inherent what you can do for one financial instrument can be done for more than one and this can be done as a group” (Ans. 7). Regarding claims 21—38 and 40-42, the Examiner determines that “arguments regarding the other claims are irrelevant or moot” {id. at 5). 8 Appeal 2015-002437 Application 12/830,992 We are persuaded by Appellants’ arguments. The Examiner’s finding of inherency is relevant to the “aggregating” step, however, we fail to see where the Examiner addresses the “analyzing,” and “evaluating” steps of claim 39.3 We also agree with Appellants that the Examiner has not provided an adequate explanation for the rejection as to claims 21—38 and 40-42. Accordingly, we do not sustain the obviousness-type double patenting rejection. DECISION The decision of the Examiner to reject claims 21—42 under 35 U.S.C. § 101 is AFFIRMED and designated as a New Ground of Rejection. The decision of the Examiner to reject claims 21—42 under obviousness-type double patenting is REVERSED. Because in some instances the claim interpretation relied on by the Board to sustain the rejection of claims 21 42 differs from the interpretation relied on by the Examiner, we designate our affirmance of the rejection of these claims as a NEW GROUND OF REJECTION so as to provide Appellants with a full and fair opportunity to respond to the thrust of the rejection. This decision should not be construed to imply that, in all instances in which the Board affirms a rejection based on a claim interpretation that differs from the claim interpretation applied by the examiner, the thrust of the rejection has changed so as to warrant designation of the affirmance as a new ground of rejection. Rather, in this particular case, in light of the scope of the arguments presented by Appellants, the 3 We note that dependent claim 5 of the ‘290 patent includes both “aggregating” and “analyzing” steps, but the Examiner relies on claim 1. 9 Appeal 2015-002437 Application 12/830,992 Board deemed it, in the interests of fairness to Appellants, appropriate to designate the affirmance as a new ground of rejection. This decision contains a new ground of rejection pursuant to 37 C.F.R. § 41.50(b). 37 C.F.R. § 41.50(b) provides “[a] new ground of rejection pursuant to this paragraph shall not be considered final for judicial review.” 37 C.F.R. § 41.50(b) also provides that the Appellants, WITHIN TWO MONTHS FROM THE DATE OF THE DECISION, must exercise one of the following two options with respect to the new ground of rejection to avoid termination of the appeal as to the rejected claims: (1) Reopen prosecution. Submit an appropriate amendment of the claims so rejected or new evidence relating to the claims so rejected, or both, and have the matter reconsidered by the examiner, in which event the proceeding will be remanded to the examiner.... (2) Request rehearing. Request that the proceeding be reheard under § 41.52 by the Board upon the same record .... No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a). AFFIRMED: 37 C.F.R, $ 41.50(b) 10 Copy with citationCopy as parenthetical citation