Ex Parte Glinberg et al

Patent Trials and Appeals Board

Mar 29, 2019

13085094 - (D) (P.T.A.B. Mar. 29, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/085,094 04/12/2011
12684 7590 04/02/2019
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
FIRST NAMED INVENTOR
Dmitriy Glinberg
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
4672-05870DUS 1424
EXAMINER
BORLING HAUS, JASON M
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
04/02/2019 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):
mail@lsk-iplaw.com
docket-us@lsk-iplaw.com
pair_lsk@firsttofile.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte DMITRIY GLINBERG, EDWARD GOGOL, and
TAE SEOK C. YOO
Appeal2017-010307
Application 13/085,094 1
Technology Center 3600
Before LARRY J. HUME, JOYCE CRAIG, and JASON M. REPKO,
Administrative Patent Judges.
HUME, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134(a) of the Final
Rejection of claims 21--40, which are all claims pending in the application.
Appellants have canceled claims 1-20. We have jurisdiction under 35
U.S.C. § 6(b ).
We AFFIRM.
1 According to Appellants, the real party in interest is Chicago Mercantile
Exchange Inc. App. Br. 2.
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Application 13/085,094
STATEMENT OF THE CASE2
The Invention
Appellants' disclosed embodiments and claimed invention relate to:
A hybrid cross-margining system is disclosed .... [that]
provides for both joint accounts, maintained by multiple
exchanges, as well as non-joint accounts, whereby the system
recognizes both intra-account offsets within the joint account
and interexchange offsets between the joint account and
accounts maintained by another exchange to minimize the
margin requirement of the associated market participant with
respect to the positions reflected in these accounts.
Spec. 28 ("Abstract").
Exemplary Claim
Claim 21, reproduced below, is representative of the subject matter on
appeal ( emphases added to contested prior-art limitations):
21. A method, comprising:
maintaining, by first circuitry, a first account data
structure, stored in a first database and further in a memory
coupled with the first circuitry, for a market participant,
the first account data structure storing data indicative of
a first plurality of positions resulting from a first one or more
trades executed by a first exchange and a second plurality of
positions resulting from a second one or more trades executed
by a second exchange, the first and the second plurality of
positions having a first net position,
2 Our decision relies upon Appellants' Appeal Brief ("App. Br.," filed
Dec. 20, 2016); Reply Brief ("Reply Br.," filed July 31, 2017); Examiner's
Answer ("Ans.," mailed June 1, 2017); Final Office Action ("Final Act.,"
mailed July 21, 2016); and the original Specification ("Spec.," filed
Apr. 12, 2011).
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the first account data structure being maintained
separately from other account data structures stored in a second
database maintained by the first exchange which are only
capable of exclusively storing data indicative of positions
resulting from trades executed on the first exchange, and
the first account data structure being maintained
separately from other account data structures stored in a third
database maintained by the second exchange which are only
capable of exclusively storing data indicative of positions
resulting from trades executed on the second exchange;
maintaining, by second circuitry, a second account data
structure stored in a fourth database and further in a memory
coupled therewith for the market participant,
the second account data structure storing data indicative
of a third plurality of positions resulting from a third one or
more trades executed on a third exchange, and the third
plurality of positions having a second net position; and
determining, by third circuitry, a third net position based
on the first, the second, and the third plurality of positions,
wherein a determination of the first net position and a
determination of the second net position are performed prior to
the determining of the third net position, wherein the
determination of the first net position results in a first un-netted
remaining position and the determination of the second net
position results in a second un-netted remaining position, and
wherein the determining of the third net position includes
netting the first and second un-netted remaining positions.
Prior Art
The Examiner relies upon the following prior art as evidence in
rejecting the claims on appeal:
Baecker et al. ("Baecker") US 2001/0049649 Al Dec. 6, 2001
Ward et al. ("Ward") US 2002/0077947 Al June 20, 2002
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Rejections on Appeal
RI. Claims 21--40 stand rejected under 35 U.S.C. § 101 as being
directed to patent-ineligible subject matter. Final Act. 2; Ans. 2.
R2. Claims 21--40 stand rejected under 35 U.S.C. § 112(b) as being
indefinite. Final Act. 3; Ans. 3.
R3. Claims 21--40 stand rejected under 35 U.S.C. § I03(a) as being
unpatentable over the combination of Ward and Baecker. Final Act. 5;
Ans. 4.
CLAIM GROUPING
Based on Appellants' arguments (App. Br. 5-19) and our discretion
under 37 C.F.R. § 4I.37(c)(l)(iv), we decide the appeal of patent-ineligible
subject matter Rejection RI of claims 21--40 on the basis of representative
claim 21; and we decide the appeal of obviousness Rejection R3 of
claims 21--40 on the basis of representative claim 21. 3 We address Rejection
R2 of claims 21--40 under 35 U.S.C. § 112, second paragraph, infra.
ISSUES AND ANALYSIS
In reaching this decision, we consider all evidence presented and all
arguments actually made by Appellants. To the extent Appellants have not
3 "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. § 4I.37(c)(l)(iv).
In addition, when Appellants do 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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advanced separate, substantive arguments for particular claims, or other
issues, such arguments are waived. 37 C.F.R. § 4I.37(c)(l)(iv).
Based upon our review of the record, and the Revised Guidance
discussed herein, we find a preponderance of the evidence supports
particular arguments advanced by Appellants with respect to Rejection RI of
claims 21--40 under § 101 for the specific reasons discussed below.
However, we disagree with Appellants' arguments with respect to
Rejections R2 and R3 of claims 21--40 under 35 U.S.C. §§ 112, second
paragraph, and I03(a), respectively and, unless otherwise noted, we
incorporate by reference herein and adopt as our own: ( 1) the findings and
reasons set forth by the Examiner in the action from which this appeal is
taken, and (2) the reasons and rebuttals set forth in the Examiner's Answer
in response to Appellants' arguments.
We highlight and address specific findings and arguments regarding
claim 21, 22, 25, and 26 for emphasis as follows.
1. § 101 Rejection R 1 of Claims 21--40
Issue 1
Appellants argue (App. Br. 5-14; Reply Br. 1-8) the Examiner's
rejection of claim 21 under 35 U.S.C. § 101 as being directed to patent-
ineligible subject matter is in error. These contentions present us with the
following issue:
Under our governing case law and Revised Guidance concerning 35
U.S.C. § 101, did the Examiner err in concluding claim 21 is directed to a
judicial exception, i.e., an abstract idea, without significantly more, and thus
is patent-ineligible under§ 101?
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A. 35 U.S.C. § 101
PRINCIPLES OF LAW
"Whether a claim is drawn to patent-eligible subject matter is an issue
of law that we review de novo." SiRF Tech., Inc. v. Int'! Trade Comm 'n,
601 F.3d 1319, 1331 (Fed. Cir. 2010).
An invention is patent-eligible if it claims a "new and useful process,
machine, manufacture, or composition of matter." 35 U.S.C. § 101.4
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. 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'!, 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. Kappas, 561 U.S. 593, 611 (2010) ("Claims 1 and 4
4 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 l" in the patent-eligibility
inquiry under § 101.
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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 (Gottschalkv. Benson, 409 U.S. 63, 69 (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. (15 How.) 252, 267---68
(1854))); 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 "[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. (internal 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
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mathematical formula to a known structure or process may well be deserving
of patent protection.").
However, when claimed in a certain way, the Federal Circuit has held
claims ineligible as directed to an abstract idea when they merely collect
electronic information, display information, or embody mental processes
that could be performed by humans. Elec. Power Grp., LLC v. Alstom S.A.,
830 F.3d 1350, 1353-54 (Fed. Cir. 2016) (collecting cases). At the same
time, "all inventions at some level embody, use, reflect, rest upon, or apply
laws of nature, natural phenomena, or abstract ideas." Mayo, 566 U.S. at 71.
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 217-221. 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 tum 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
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. (brackets 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.
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B. USPTO Revised Guidance
The PTO recently published revised policy 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); 5 and
(2) additional elements that integrate the judicial
exception into a practical application (see MPEP
§§ 2106.05(a}-(c), (e}-(h)). 6
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 are not "well-understood, routine, conventional"
in the field (see MPEP § 2106.05(d)); or
5 Referred to as "Revised Step 2A, Prong l" in the Revised Guidance
(hereinafter "Step 2A(i)").
6 Referred to as "Revised Step 2A, Prong 2" in the Revised Guidance
(hereinafter "Step 2A(ii)").
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( 4) simply appends well-understood, routine,
conventional activities previously known to the industry,
specified at a high level of generality, to the judicial exception. 7
See Revised Guidance.
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).
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-
7 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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eligible at Step 2A(i). This determination concludes the eligibility analysis,
except in situations identified in the Revised Guidance. 8
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.
The seven identified "practical application" sections of the MPEP, 9
cited in the Revised Guidance under Step 2A(ii), are:
(1) MPEP § 2106.0S(a) Improvements to the Functioning of
a Computer or To Any Other Technology or Technical
Field
(2) MPEP § 2106.05(b) Particular Machine
8 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.
9 See MPEP § 2106.0S(a}-(c), (e}-(h). Citations to the MPEP herein refer to
revision [R-08.2017].
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(3) MPEP § 2106.05( c) Particular Transformation
(4) MPEP § 2106.05(e) Other Meaningful Limitations
(5) MPEP § 2106.05(±) 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
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. If not, then analysis proceeds to Step 2B.
Step 2B - "Inventive Concept" or "Significantly More"
Under our 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 elements that
render the claim patent eligible even though a judicial exception is recited in
a separate claim element. 10 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). 11 Therefore, if a claim has been
10 See, e.g., Diehr, 450 U.S. at 187.
11 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, 773 F.3d 1245, 1257-59 (Fed. Cir. 2014).
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determined to be directed to a judicial exception under Revised Step 2A, we
must 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). 12
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
at a high level of generality, to the judicial exception, which is indicative
that an inventive concept may not be present." See Revised Guidance,
III.B. 13
12 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).
13 In accordance with existing Step 2B guidance, an Examiner's conclusion
that an additional element ( or combination of elements) is well understood,
routine, conventional activity must be supported with a factual
determination. 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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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 ).
See Berkheimer Memo.
The analysis in Step 2B further determines whether an additional
element or combination of elements:
(a) 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
(b) simply appends well-understood, routine,
conventional activities previously known to the industry,
specified at a high level of generality, to the judicial exception,
which is indicative that an inventive concept may not be
present.
Revised Guidance, and see Berkheimer Memo.
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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 does 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
Claim 21, 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 the claim is directed to a judicial exception without
significantly more.
Step 2A(i): Does the Claim Recite a Judicial Exception?
The Examiner generally determined "the claimed invention is directed
to a judicial exception (i.e. a law of nature, a natural phenomenon, or an
abstract idea) without significantly more." Final Act. 2. The Examiner
further concluded "the claimed invention is directed toward (i) a
fundamental economic practice (i.e. managing financial accounts) and thus
an abstract idea." Id.
We conclude claim 21 does not recite the judicial exceptions of either
natural phenomena or laws of nature. Therefore, we reevaluate de nova
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whether claim 21 recites one or more abstract ideas based upon the Revised
Guidance.
The Specification provides context as to what the claimed invention is
directed to. In this case, the Specification discloses that the invention sets
out to meet both the needs of minimizing Exchange risk, as well as the
burden on members "to approximate the requisite performance bond or
margin requirement as closely as possible to the actual positions of the
members at any given time," and "to improve the accuracy and flexibility of
the mechanisms which estimate performance bond requirements." Spec. ,r 6.
Appellants' Abstract describes the invention as:
A hybrid cross-margining system ... [that] provides for
both joint accounts, maintained by multiple exchanges, as well
as non-joint accounts, whereby the system recognizes both
intra-account offsets within the joint account and interexchange
offsets between the joint account and accounts maintained by
another exchange to minimize the margin requirement of the
associated market participant with respect to the positions
reflected in these accounts.
Spec. 28.
Claim 21 recites, in pertinent part, a method that includes the
following limitations:
( 1) "maintaining . . . a first account data structure . . . for
a market participant ... storing data indicative of a first
plurality of positions resulting from a first one or more trades
executed by a first exchange and a second plurality of positions
resulting from a second one or more trades executed by a
second exchange, the first and the second plurality of positions
having a first net position."
(2) "the first account data structure being maintained
separately from other account data structures stored in a second
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database maintained by the first exchange which are only
capable of exclusively storing data indicative of positions
resulting from trades executed on the first exchange, and the
first account data structure being maintained separately from
other account data structures stored in a third database
maintained by the second exchange which are only capable of
exclusively storing data indicative of positions resulting from
trades executed on the second exchange."
(3) "maintaining ... a second account data structure ...
for the market participant ... storing data indicative of a third
plurality of positions resulting from a third one or more trades
executed on a third exchange, and the third plurality of
positions having a second net position."
( 4) "determining ... a third net position based on the
first, the second, and the third plurality of positions, wherein a
determination of the first net position and a determination of the
second net position are performed prior to the determining of
the third net position, wherein the determination of the first net
position results in a first un-netted remaining position and the
determination of the second net position results in a second un-
netted remaining position, wherein the determining of the third
net position includes netting the first and second un-netted
remaining positions."
Claims App 'x.
We conclude claim 21 recites a certain method of organizing human
activity in the form of a fundamental economic practice to mitigate financial
risks, an abstract idea. This type of activity, i.e., separately maintaining
records of account data relating to positions resulting from trades on
different exchanges, including determining net positions, as recited in each
of limitations (1) through (3), for example, 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 F.3d 1366, 1375 (Fed. Cir. 2011).
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Further, under the broadest reasonable interpretation standard, 14 we
conclude limitations ( 1) through (3) quoted above recite steps that would
ordinarily occur when maintaining and managing financial accounts relating
to trades executed on one or more exchanges. See Final Act. 2; Ans. 2. For
example, maintaining an account data structure for a market participant that
stores data relating to positions resulting from trades executed by a first
exchange, and storing data relating to positions resulting from other trades
executed by a second exchange are operations that generally occur when
maintaining trade and position account data, i.e., managing financial
accounts. Further, netting of trade positions within a first or second
exchange is also a step that has long-standing usage in maintaining trade
accounts, whether initiated person-to-person, on paper, or using a computer.
Thus, under Step 2A(i), we agree with the Examiner that the method
of claim 21 recites a fundamental economic practice. We conclude
claim 21, as a whole, under our Revised Guidance, recites a judicial
exception of certain methods of organizing human activity, i.e., a
fundamental economic principle or practice, and thus is an abstract idea.
14 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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Application 13/085,094
Step 2A(ii): Judicial Exception Integrated into a Practical Application?
If the claims recite a patent-ineligible abstract idea, 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
(b) evaluating those additional elements individually and in combination to
determine whether they integrate the exception into a practical application.
In addition to the abstract steps (1) through (3) identified in Step
2A (i), supra, claim 21 recites limitation ( 4):
determining ... a third net position based on the first, the
second, and the third plurality of positions, wherein a
determination of the first net position and a determination of the
second net position are performed prior to the determining of
the third net position, wherein the determination of the first net
position results in a first un-netted remaining position and the
determination of the second net position results in a second un-
netted remaining position, wherein the determining of the third
net position includes netting the first and second un-netted
remaining positions.
Claims App 'x.
As argued by Appellants, "the claims are directed to a novel and
patentable specific application which reconciles data, e.g. indicative of
positions resulting from trades, among independently maintained databases,
e.g. to identify a offset risk from positions represented in those databases in
a specific and particular manner." App. Br. 5---6. Appellants further
contend:
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As opposed to claiming algorithms themselves or
otherwise merely providing instructions to implement or apply
such algorithms, the claimed invention improves upon the
technical field of data and transaction processing by providing a
system which provides a specific mechanism for identifying
offsetting positions stored in independently maintained
databases which improves efficiency and reduces complexity
thereof and the attendant resource and bandwidth consumption
thereof. See, for example, Appellants' Specification, paras. 22-
23 explaining the benefits of the claimed hybrid approach. This
is neither a routine nor conventional activity previously known
in the industry, or a generic computerization thereof, as
evidenced by the lack of prior art, but is instead a specific,
patentable application and meaningful limitation beyond
generally linking the use of an abstract idea to a particular
technological environment.
App. Br. 6-7.
The Specification at these cited paragraphs discloses:
[0022] While an exchange may elect to implement a 1 bucket
model or a 2 bucket model with another exchange, the disclosed
embodiments relate to a hybrid of the 1 and 2 bucket models.
The disclosed hybrid cross-margining system handles
participants that deal with more than two exchanges and
consolidates the exchange space without requiring that the
exchanges merge into a single organization. This may be useful,
for example, in situations where all of the participating
exchanges cannot join together as a single organization, such as
for regulatory reasons. Further, the disclosed embodiments are
applicable beyond futures to any markets that require any type
of collateral movement or any type of variation/mark to market
movement. Further, the disclosed embodiments are application
to any instruments that can be converted to novation. i.e. permit
the substitution of the clearing house for the opposite
contracting party, and as long as they are correlated, they can be
offset in this model.
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[0023] In the disclosed hybrid cross margining system, the
dedicated joint account ( of the one bucket model) is augmented
with flexibility to spread anything left over in the joint account
against another exchange (as in two bucket model). Effectively,
the disclosed embodiments create a virtual exchange which
includes both one or more joint accounts and one or more inter-
exchange risk offset recognition agreements. In calculating the
overall margin requirement for the market participant, the
positions in the joint accounts may be offset against each other
first to the extent possible, and then interexchange risk offset is
accounted for in any remaining un-netted positions. In an
alternative embodiment, inter-exchange offsets may be
accounted for first, with any unnetted positions then being
offset against available positions within the joint account.
Spec. ,r,r 22-23.
Based upon Appellants' arguments and the support provided by the
Specification, we conclude limitation ( 4) integrates the abstract idea into a
practical application as determined under at least one of the MPEP sections
cited above. 15 Specifically, we find Appellants' argument persuasive that
step 4 "determining ... a third net position based on the first, the second,
and the third plurality of positions," 16 is an improvement in the technical
field of data and transaction processing. See Br. 16-18; and see MPEP
§ 2106.0S(a) or, alternatively,§ 2106.0S(e) "Other Meaningful Limitations."
15 For example, see MPEP § 2106.0S(e) "Improvements to the Functioning
of a Computer or To Any Other Technology or Technical Field" or
§ 2106.0S(e) "Other Meaningful Limitations."
16 Because we agree with at least one of the dispositive arguments advanced
by Appellants, we need not reach the merits of Appellants' 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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With respect to these other meaningful limitations, Appellants cite
(Reply Br. 4--5) Trading Technologies International, Inc. v. CQG, INC., 675
F. App'x 1001 (Fed. Cir. 2017), and argue:
[T]he claimed system and method for hybrid cross margining
are directed to a specific implementation of a solution to a
problem in the software arts, providing a system which handles
participants that deal with more than two exchanges and
consolidates the exchange space without requiring that the
exchanges merge into a single organization which may be used
in situations where all of the participating exchanges cannot
join together.
Reply Br. 5 ( citing Spec. ,r 22).
Concerning these "other meaningful limitations," we find guidance in
the Manual for Patent Examining Procedure section 2106.05(e), which
summarizes and relies upon our reviewing court's holdings in Diamond v.
Diehr, cited supra, and Classen, 659 F .3d 1057 ( decision on remand from
the Supreme Court, which had vacated the lower court's prior holding of
ineligibility in view of Bilski v. Kappas).
In Diehr, the Court evaluated the additional non-abstract limitations,
and "found them to be meaningful because they sufficiently limited the use
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 Court held that, "[a]lthough 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
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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, i.e., "determining ... a
third net position based on the first, the second, and the third plurality of
positions," integrate the abstract idea into a practical application, and thus
"the steps impose meaningful limits that allow for determining a net position
across multiple independent account databases ... [ such that] the claim
amounts to significantly more than the judicial exception." App. Br. 8.
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 drawn to patent-eligible subject matter, such that we do not
sustain the § 101 rejection of claim 21, and grouped claims 22--40 which
stand therewith. See Claim Grouping, supra.
2. § 112, iJ 2 Rejection R2 of Claims 21--40
Issue 2
Appellants argue (App. Br. 14--15) the Examiner's rejection of
claims 21--40 under 35 U.S.C. § 112, second paragraph, as being indefinite,
is in error. These contentions present us with the following issue:
Did the Examiner err in concluding the pending claims are indefinite
under§ 112, second paragraph?
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Analysis
The Examiner broadly states, without support, "[c]aims 21-40 are
replete with structural problems." Final Act. 3; Ans. 3 (emphasis omitted).
However, the Examiner provides particular, exemplary limitations in each of
claims 21, 22, 25, and 26 and concludes these claims are indefinite, but
provides no further details of alleged indefiniteness of remaining claims 23,
24, and 27--40, other than to say "Applicant is requested to review all
pending claims and make all corrections as needed." Final Act. 4.
The Examiner further concludes "[b] ecause Claims 21--40 are so
indefinite, no art rejection is warranted as substantial guesswork would be
involved in determining the scope and content of these claims." Id. ( citing
In re Steele, 305 F.2d 859 (CCPA 1962)). We find the statement that "no art
rejection is warranted" to be surprising because the Examiner later rejects
claims 21--40 obvious under 35 U.S.C. § 103(a) over Ward and Baecker.
See Rejection R3, supra.
Claim 21
"[A] patent is invalid for indefiniteness if its claims, read in light of
the specification delineating the patent, and the prosecution history, fail to
inform, with reasonable certainty, those skilled in the art about the scope of
the invention." Nautilus, Inc. v. Biosig Insts., Inc., 572 U.S. 898, 901
(2014). Further, we give pending claims "their broadest reasonable
interpretation consistent with the specification" and "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 at 1364.
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The Examiner concludes the recitation in claim 21 of "the first
account data structure being maintained separately from other account data
structures stored in the database and maintained by the first exchange which
are only capable of exclusively storing data indicative of positions resulting
from trades executed on the first exchange" is unclear because the claim
further recites, in apparent contradiction, "the first account also stores
second positions resulting from trades executed on a second exchange.
There is no exclusivity. Claim 21 also recites that the database is maintained
by the second exchange." Final Act. 3.
The Examiner also concludes the recitation in claim 21 of "'the first
and the second plurality of positions having a first net position' ... [ and]
'wherein the determination of the first net position also results in a first
unnetted remaining position"' are indefinite because "[i]f you have a first
net positon, the resulting remainder has been netted." Id.
In response, Appellants contend:
With respect to the Examiner's concern regarding how
the claimed data structures are maintained, Appellants have
previously amended claims 21, 28 and 3 5 to clarify what data is
stored in each database and which exchange maintains which
database. The Examiner is also referred to para. 80 of the
Specification as well as Figure 3. Accordingly, Appellants
submit that these claim limitations are definite.
App. Br. 14 ( emphasis added). We note there is no paragraph 80 in the
Specification to which we may refer.
In the Answer, the Examiner responds:
Calculating a net position or netting positions means
combining positions ....
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While calculating a net position or netting positions may
result in positions being partially or completely offset, netting
positions is not synonymous with offsetting positions.
Offsetting positions are just one possibility when the positions
are combined ....
If a "net position" is not analogous to positions offsetting
each other when combined, then an "unnetted" position is not
analogous to a position not offset when combined, as Appellant
contends.
Ans. 16.
We are not persuaded by further arguments Appellants make in the
Reply Brief. For example:
Appellants submit that the claimed netting include offsetting
when the netted positions are opposing and one of ordinary skill
in the art would clearly understand this. Appellants further
submit that if the positions are not able to be netted together,
the claimed "net position" may be identical to the position prior
to netting and, if all of the positions are can be netted together,
there may be no "un-netted remaining positions". However,
Appellants submit that such situations do not render any of the
claim elements optional as the claimed system in specified in a
manner so as to be operable for all types of positons which may
be represented in the claimed data structures.
Reply Br. 6 ( emphasis added).
We are not persuaded because we find Appellants are arguing what a
person with skill in the art would understand, without citing to any evidence
of record as to how a skilled artisan would interpret the claim. See In re
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Geisler, 116 F.3d 1465, 1470 (Fed. Cir. 1997); see also In re De Blauwe,
736 F.2d 699, 705 (Fed. Cir. 1984). 17
Furthermore, Appellants appear to be arguing conditional limitations
not recited in claim 21, and ignore the recitation of "un-netted remaining
positions" by arguing "if the positions are not able to be netted together, the
claimed 'net position' may be identical to the position prior to netting and, if
all of the positions are can be netted together, there may be no 'un-netted
remaining positions."' Reply Br. 6.
Therefore, we agree that the above-quoted limitations of claim 21 are
unclear for the same reasons articulated by the Examiner. Final Act. 3. 18
Claim 22
The Examiner concludes the recitation in claim 22 of "wherein at least
a subset of the first and second plurality of positions are characterized by a
marginable correlation" is unclear because, according to the Specification,
"'marginable correlation' means that one position has the potential to offset
the risk presented by another. However, every position has the potential or
capability to offset the risk presented by another position, depending on how
one defines the risk." Final Act. 3 (internal citation omitted) (citing Spec.
,r 13); Ans. 3.
17 "Argument in the brief does not take the place of evidence in the record."
In re Schulze, 346 F.2d 600,602 (CCPA 1965) (citing In re Cole, 326 F.2d
769, 773 (CCPA 1964)).
18 Moreover, as mentioned above, we also are not persuaded by Appellants'
argument, at least for the reason that we find no paragraph 80 in the
Specification to which we can refer for context, i.e., the Specification only
contains paragraphs 1-51.
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In response,
Appellants again submit, with respect to the Examiner's
concern regarding the term "marginable correlation," that one
of ordinary skill in the art would understand that not every
permutation of positions is a "marginable correlation," that
results in offset risk. For example, the risk in a position to buy a
first commodity may not necessarily be offset by the risk in
another position to buy a second commodity unless there was
some form of correlation existing between those two
commodities. As will be appreciated by one of ordinary skill in
the art, risk, as used in the present application, refers to risk of
loss. Accordingly, Appellants submit that these claim
limitations are definite.
App. Br. 15 (internal citation omitted) (citing Spec. ,r,r 13, 16, 19, 21, 22,
and 33).
As noted above, attorney arguments and conclusory statements
unsupported by factual evidence are entitled to little probative value.
Geisler, 116 F.3d at 1470. On this record, there is no evidence as to how a
person with skill in the art would interpret the phrase "marginable
correlation."
Turning to the Specification in paragraph 13, it appears that the
recited "marginable correlation" refers in an exemplary manner to
considerations for determining margin requirements in the context of two
different products traded on the same exchange, and which have some
correlation as to the risk of loss. However, we find the Examiner's broader
statement regarding construction of the disputed phrase above to be broad,
but reasonable, and further note the claim does not provide any further
definition of "marginable correlation" that would preclude the Examiner's
broader reading.
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In the Reply Brief, Appellants provide and argue separate definitions
of "margin" and "correlation" (Reply Br. 7) and assert, without proof, that
"[ m ]arginable correlation refers to a correlation between positions which
affects the margin calculation for those positions, e.g. that they may be for
same underlier." Id. Notwithstanding the fact that "margin" and
"correlation" may have well-known definitions, either by a dictionary or by
usage in the financial industry, on this record, we are not persuaded that
Appellants have adequately bounded the claim with respect to the recited
"marginable correlation."
Therefore, we agree with the Examiner that the disputed limitation of
claim 22 is unclear for the same reasons articulated by the Examiner.
Claim 25
The Examiner concludes the limitation "transferring one or more of
the first plurality of positions to one of the other accounts maintained by the
first exchange or the second exchange" is unclear because the "Examiner is
uncertain what is happening here based upon newly amended claim
language in Claim 21," as the first position pertains to trades performed on
the first exchange, and the other accounts exclusively pertain to trades
performed on the second exchange. Final Act. 4 ( emphasis added); Ans. 3.
In response:
Appellants submit that this claim is clear as written. That is the
claim further adds the limitation of transferring the one or more
of the first plurality of positions[, resulting from a first one or
more trades executed by a first exchange,] to one of the other
accounts maintained by the first exchange[, in the second
database,] or the second exchange[, in the third database].
App. Br. 15 (brackets in original).
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We are not persuaded by this argument, because it fails to address the
Examiner's finding that "the other accounts exclusively pertain to trades
performed on the second exchange," while the claim recites transferring "to
one of the other accounts maintained by the first exchange or the second
exchange."
Therefore, we agree with the Examiner that the disputed limitation of
claim 25 is unclear for the same reasons articulated by the Examiner.
Claim 26
The Examiner concludes the limitation "wherein the determining of
the second net position, further comprises recognizing intra-commodity
spreads and intercommodity spreads with respect to the third exchange," is
indefinite because "'[R]ecognizing' just means identifying or
acknowledging. Does recognizing intra-commodity spreads and
intercommodity spreads with respect to the third exchange result in the
method performing the method differently if the spreads exist or the spreads
do not exist? Or is the method performed the same regardless?" Final
Act. 4; Ans. 3.
In response, "Appellants again submit that one of ordinary skill in the
art would understand that 'recognizing' a spread means to identify that two
positions are off setting for the subsequent purpose of then calculating the
off set risk. Accordingly, Appellants submit that this claim is definite."
App. Br. 15 (internal citation omitted) (citing Spec. ,r,r 12, 16, 17, 18, 32, 34,
36-39, 42, and 45--47).
Under the Examiner's interpretation of the plain meaning of
"recognizing" set forth above, we agree that claim 26 is indefinite. To the
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extent that "recognition" or "recognizing" may have an art-specific meaning
in the financial industry different than the Examiner's determination,
Appellants do not offer any evidence or cite to any dictionary definition to
rebut the Examiner's construction.
Therefore, we agree with the Examiner that the disputed limitation of
claim 26 is unclear for the same reasons articulated by the Examiner.
Claims 28-40
Based upon the Examiner's statement, "[c]aims 21-40 are replete with
structural problems" (Final Act. 3), and the lack of any supporting details at
least with respect to claims 28--40, 19 we find the Examiner failed to make a
proper prima facie case of indefiniteness for these claims. 20
The Federal Circuit has held, "the prima facie case is merely a
procedural device that enables an appropriate shift of the burden of
production." Hyatt v. Dudas, 492 F.3d 1365, 1369 (Fed. Cir. 2007). The
Federal Circuit stated that this burden is met by "adequately explain[ing] the
shortcomings it perceives so that the applicant is properly notified and able
to respond." Id. at 1370. It is only "when a rejection is so uninformative
that it prevents the applicant from recognizing and seeking to counter the
grounds for rejection" that the prima facie burden has not been met and the
19 We note claims 23, 24, and 27 depend from independent claim 21, and
thus inherit the deficiencies of rejected claim 21 under 35 U.S.C. § 112 ,r 2,
as discussed above.
20 Because the Board is "basically a board of review," Ex parte Gambogi,
62 USPQ2d 1209, 1211 (BP AI 2001 ), and not a place of initial examination,
we will not engage in the de nova examination required to determine
whether claims 28--40 meet the definiteness requirements of 35 U.S.C.
§ 112, second paragraph.
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rejection violates the minimal requirements of 35 U.S.C. § 132. Chester v.
Miller, 906 F.2d 1574, 1578 (Fed. Cir. 1990).
In this case we find the Examiner's rejection of these claims is
uninformative to the extent that the prima facie case has not been met.
Accordingly, we reverse the Examiner's indefiniteness Rejection R2 of
claims 28--40.
3. § 103 Rejection R3 of Claims 21--40
Issue 3
Appellants argue (App. Br. 16-19) the Examiner's rejection of
claim 21 under 35 U.S.C. § 103(a) as being obvious over the combination of
Ward and Baecker 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 method that includes, inter alia, the limitations of:
a first account data structure ... storing data indicative of
a first plurality of positions ... and a second plurality of
positions ... the first and the second plurality of positions
having a first net position ...
a second account data structure ... storing data indicative
of a third plurality of positions ... the third plurality of
positions having a second net position ...
determining ... a third net position based on the first, the
second, and the third plurality of positions ...
wherein the determination of the first net position results
in a first un-netted remaining position and the determination of
the second net position results in a second un-netted remaining
position, and wherein the determining of the third net position
includes netting the first and second un-netted remaining
positions,
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as recited in claim 21?
Analysis
Appellants contend neither Ward nor Baecker "teaches [or] suggests
the hybrid intra- and inter database position netting, as claimed." App.
Br. 16. "Instead Ward discloses what is referred to as a '2 bucket' approach
to evaluating two separate position databases." App. Br. 17. Appellants
further argue:
Ward does not disclose the hybrid evaluation as claimed ...
that is Ward fails to disclose the claimed netting first within the
claimed first account and subsequently among the claimed first
and second accounts. At best Ward discloses merely netting
among first and second accounts but there is no teaching or
suggestion that intra-account netting is performed first in either
of those accounts.
Id. ( emphasis added). 21
From these general arguments, and without quoting specific claim
language, it appears Appellants are arguing that the combination of Ward
and Baecker specifically does not teach or suggest:
a first account data structure ... storing data indicative of
a first plurality of positions ... and a second plurality of
positions ... the first and the second plurality of positions
having a first net position ...
a second account data structure ... storing data indicative
of a third plurality of positions ... the third plurality of
positions having a second net position ...
21 The Examiner relies upon the teachings of Baecker for the somewhat
trivial finding that accounts can be stored in databases. Final Act. 7 ( citing
Baecker Fig. 7; ,r,r 68-69).
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determining ... a third net position based on the first, the
second, and the third plurality of positions ...
wherein the determination of the first net position results
in a first un-netted remaining position and the determination of
the second net position results in a second un-netted remaining
position, and wherein the determining of the third net position
includes netting the first and second un-netted remaining
positions.
Claim 21.
The test for obviousness is what the combined teachings of the prior
art would have suggested to the hypothetical person of ordinary skill in the
art. In re Keller, 642 F.2d 413,425 (CCPA 1981). Appellants have not
challenged the combinability of the teachings of Ward and Baecker.
The Examiner finds Ward teaches both a first account data structure
storing data indicative of a first plurality of positions and a second plurality
of positions, with the recited netting of positions as claimed. Final Act. 5
(citing Ward Fig. 2; ,r,r 38--42); Ans. 4--5. For example, Ward teaches:
[A] centralized virtual clearing service is needed that allows
members of existing financial exchanges to gain financial
advantage by netting-out equivalent but opposite positions
across two or more exchanges, and by using modem portfolio
theory, which is well known in the art, to determine the net
margin for positions across two or more exchanges which are
equivalent but not opposite.
Ward ,r 38. In addition, the Examiner finds Ward's invention
further provides mechanisms for receiving position information
from clearers, calculates and delivers netted margin positions to
the clearers, provides to clearing houses and member firms
payment information to reconcile the determined net margin,
and requests a capital guarantee and provides a cover to
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clearing houses for the shortfall between the gross margin and
the determined net margin.
Ward ,r 39. Still further, Ward's invention is described as
using the received position information from clearer 5 and from
clearer 20, [ and] next calculates, without human processing, net
margin by netting out all of the like contracts owned by
financial institution 1 across all of the different geographies and
products ( e.g. securities), so that, for example, two products
that are the same but with opposite positions, the net margin
charge will net out to zero.
Ward ,r 43.
Based upon the above disclosures, we agree with the Examiner's
finding that Ward teaches or suggests the "first account data structure," with
all the variously recited netting operations, as found in claim 21. Final
Act. 5; Ans. 4--5.
With respect to the recitation of "a second account data structure ...
storing data indicative of a third plurality of positions ... the third plurality
of positions having a second net position," the Examiner concludes:
[I]t would have been obvious to one having ordinary skill in the
art at the time the invention was made to have modified Ward
by duplicating claim elements contained in Ward ( e.g. first
account, first exchange, second exchange, first plurality of
positions, second plurality of positions, first net position) to
create additional claim elements ( e.g. second account, third
exchange, third plurality of positions, second net position, third
net position) wherein each additional claim element would
serve the same function as the original claim element. In the
combination each element ( original element and additional
element) would merely have performed the same function as it
did previously, and one of ordinary skill in the art at the time
the invention was made would have recognized that the results
of the combination were predictable.
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Ans. 5-6 (citing MPEP § 2144.04 (VI)(A)).
In response, Appellants argue:
[The] claimed databases and account data structures are not
mere duplicative elements but are in fact necessary structural
claim elements not shown by the cited references. In particular,
Appellants' claims are specifically directed to a structure
involving multiple exchanges, wherein at least two of these
exchanges each maintain an exchange-exclusive database for
storing intra-exchange transactions, the claimed second and
third databases, and jointly maintain another database, the
claimed first database, for storing inter-exchange transactions.
These are not mere duplicative elements but specifically
required components which have specifically defined functions.
App. Br. 18.
Regarding the contested "second account data structure" of claim 21,
we find "maintaining ... a second account data structure" would have been
a "predictable use of prior art elements according to their established
functions." KSR Int 'l Co. v. Teleflex Inc., 550 U.S. 398, 417 (2007). Thus,
claiming a mere plurality of prior art elements is not an unobvious
distinction over the prior art of record, because using plural elements would
have produced a predictable result under§ 103. Cf In re Harza, 274 F.2d
669, 671 (CCP A 1960) ("It is well settled that the mere duplication of parts
has no patentable significance unless a new and unexpected result is
produced .... "). Moreover, we are not persuaded that maintaining first and
second account data structures would have been "uniquely challenging or
difficult for one of ordinary skill in the art." Leapfrog Enters., Inc. v.
Fisher-Price, Inc., 485 F.3d 1157, 1162 (Fed. Cir. 2007) (citing KSR, 550
U.S. at 418).
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Here, we conclude claiming a mere plurality of prior art elements
(i.e., first and second account data structures) used in combination to store
data indicative of first, second, and third pluralities of positions is not an
unobvious distinction over the prior art of record, absent some showing of
secondary considerations, such as unexpected results. "A mere duplication
of parts is not invention." In re Marcum, 47 F.2d 377,378 (CCPA 1931)
(citing Topliff v. Topliff, 145 U.S. 156, 163 (1892)). "It is well settled that
the mere duplication of parts has no patentable significance unless a new and
unexpected result is produced .... " Harza, 274 F.2d at 671.
We note Appellants do not rebut the Examiner's findings and legal
conclusions in the Answer with respect to the § 103 obviousness Rejection
R3 in the Reply Brief.
Therefore, based upon the findings above, on this record, we are not
persuaded of error in the Examiner's reliance on the cited prior art
combination to teach or suggest the disputed limitations of claim 21, nor do
we find error in the Examiner's resulting legal conclusion of obviousness.
Therefore, we sustain the Examiner's obviousness rejection of independent
claim 21, and grouped claims 22--40 which fall therewith. See Claim
Grouping, supra.
REPLY BRIEF
To the extent Appellants may advance new arguments in the Reply
Brief (Reply Br. 1-8) not in response to a shift in the Examiner's position in
the Answer, we note arguments raised in a Reply Brief that were not raised
in the Appeal Brief or are not responsive to arguments raised in the
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Appeal2017-010307
Application 13/085,094
Examiner's Answer will not be considered except for good cause (see 37
C.F.R. § 41.4I(b)(2)), which Appellants have not shown.
CONCLUSIONS
(1) Under our Revised Guidance, governed by relevant case law,
we conclude claims 21--40, rejected in Rejection RI under 35 U.S.C. § 101,
are directed to patent-eligible subject matter, and we do not sustain the
rejection.
(2) The Examiner did not err with respect to indefiniteness
Rejection R2 of claims 21-27 under 35 U.S.C. § 112, second paragraph, and
we sustain the rejection.
(3) The Examiner erred with respect to indefiniteness Rejection R2
of claims 28--40 under 35 U.S.C. § 112, second paragraph, and we do not
sustain the rejection.
(4) The Examiner did not err with respect to obviousness Rejection
R3 of claims 21--40 under 35 U.S.C. § 103(a) over the cited prior art
combination of record, and we sustain the rejection.
Because we have affirmed at least one ground of rejection with
respect to each claim on appeal, we affirm the Examiner's decision. See 3 7
C.F.R. § 4I.50(a)(l).
DECISION
We affirm the Examiner's decision rejecting claims 21--40.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.I36(a)(l)(iv). See 37
C.F.R. § 41.50(±).
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Appeal2017-010307
Application 13/085,094
AFFIRMED
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