Ex Parte Browne et al

Patent Trial and Appeal Board

Mar 20, 2017

12830992 (P.T.A.B. Mar. 20, 2017)

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.
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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
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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).
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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
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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
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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
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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).
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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.
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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)
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