Ex Parte Greim

Patent Trial and Appeal Board

Feb 7, 2019

13112845 (P.T.A.B. Feb. 7, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
13/112,845 05/20/2011 Hannes Greim
13708 7590 02/07/2019
Johnson, Marcou & Isaacs, LLC
PO Box 691
Hoschton, GA 30548
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.
CITI-0703 8310
EXAMINER
SHRESTHA, BIJENDRA K
ART UNIT PAPER NUMBER
3691
MAIL DATE DELIVERY MODE
02/07/2019 PAPER
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte HANNES GREIM
Appeal2017-008242
Application 13/112, 845 1
Technology Center 3600
Before MARC S. HOFF, JOHN A. EVANS, and BETH Z. SHAW,
Administrative Patent Judges.
HOFF, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant appeals under 35 U.S.C. § 134 from a Final Rejection of
claims 1-23. We have jurisdiction under 35 U.S.C. § 6(b).
We affirm.
Appellant's invention is a method and system for matching buy and
sell orders that maximize the number of shares matched while providing an
even allocation of shares regardless of when a given order is received. An
optimization function determines a price point at which a maximum number
of shares can be matched using as inputs a set of buy and sell orders, market
1 The real party in interest is Citigroup Global Markets, Inc. (Br. 3).
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Application 13/112,845
spread, and participant-defined exclusion criteria. Shares are evenly
allocated using, for example, and round-lot base allocation procedure. An
anti-gaming function is also used, compressing multiple orders from a single
participant into a single participant interest. See Abstract.
Claim 1 is reproduced below:
1. A method for matching buy and sell orders, comprising:
determining, using a microprocessor, an optimized price point within
a market spread that maximizes the number of shares matched for a
matching event given a plurality of buyer-side and seller-side orders wherein
each order defines at least a number of shares and an acceptable price range
criteria;
selecting, with the microprocessor, executable buyer-side and seller-
side orders eligible to participate in a matching event, said selecting
comprising filtering the plurality of buyer-side and seller-side orders based
on the optimized price point and on any exclusion criteria defined in any of
said buyer-side and seller side orders, said exclusion criteria comprising any
of a specifically identified counterparty, a specifically
identified counterparty business category, and a counterparty identified at
least in part with reference to specifically identified trading behavior;
evenly allocating shares other than on a pro-rated or first-in-first-out
basis between all of the executable buyer-side and seller-side orders, using
the microprocessor, by mapping available shares between the seller-side and
buyer-side orders based on a round-lot base allocation; and
distributing, using the microprocessor, the allocated shares from the
seller-side orders to the buyer-side orders.
The Examiner relies upon the following prior art in rejecting the
claims on appeal:
Lupien et al.
Cushing
us 6,098,051
US 7,162,447 Bl
2
Aug. 1, 2000
Jan.09,2007
Appeal2017-008242
Application 13/112,845
Greenberg et al.
Waelbroeck et al.
US 2007/0150405 Al
US 2009/0018947 Al
June 28, 2007
Jan. 15,2009
Claim 1-23 stand rejected under 35 U.S.C. § 101 as being directed to
patent-ineligible subject matter.
Claims 1-8, 22, and 23 stand rejected under 35 U.S.C. § I03(a) as
being unpatentable over Cushing, Lupien, and Waelbroeck.
Claims 9-14 stand rejected under 35 U.S.C. § I03(a) as being
unpatentable over Cushing, Lupien, Waelbroeck, and Greenberg.
Throughout this decision, we make reference to the Appeal Brief
("Br.," filed Nov. 21, 2016), and the Examiner's Answer ("Ans.," mailed
Mar. 03, 2017) for their respective details.
ISSUES
1. Is the claimed invention directed to a judicial exception?
2. Is the judicial exception integrated into a practical application?
3. Does the combination of Cushing, Lupien, and Waelbroeck disclose
or suggest evenly allocating shares other than on a pro-rated or first-in-first-
out basis between all executable buyer-side and seller-side orders, by
mapping available shares between seller-side and buyer-side orders based on
a round-lot base allocation?
PRINCIPLES OF LAW
An invention is patent-eligible if it claims a "new and useful process,
machine, manufacture, or composition of matter." 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to
include implicit exceptions: "[l]aws of nature, natural phenomena, and
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Application 13/112,845
abstract ideas" are not patentable. See, e.g., Alice Corp. v. CLS Bank Int 'l,
573 U.S. 208,216 (2014).
In determining whether a claim falls within an excluded category,
we are guided by the Supreme Court's two-step framework, described in
Mayo and Alice. Id. at 217-18 (citing Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 566 U.S. 66, 75-77 (2012)). In accordance with
that framework, 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 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" (Diamond v. Diehr, 450
U.S. 17 5, 192 (1981) ); "tanning, dyeing, making waterproof cloth,
vulcanizing India rubber, smelting ores" (id. at 184 n.7 (quoting Corning
v. Burden, 56 U.S. 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 that "[a] claim drawn to subject matter otherwise
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statutory does not become nonstatutory simply because it uses a
mathematical formula." Diehr, 450 at 17 6; see also id. at 192 ("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. (citing Benson and Flook); see, e.g., id. at
187 ("It is now commonplace that an application of a law of nature or
mathematical formula to a known structure or process may well be
deserving of patent protection.").
If the claim is "directed to" an abstract idea, we 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 ( quotation marks omitted). "A
claim that recites an abstract idea must include 'additional features' to
ensure 'that the [claim] is more than a drafting effort designed to
monopolize the [abstract idea]."' Id. ( quoting Mayo, 566 U.S. at 77).
"[M]erely requir[ing] generic computer implementation[] fail[ s] to
transform that abstract idea into a patent-eligible invention." Id.
The PTO recently published revised guidance on the application of
§ 101. USPTO's January 7, 2019 Memorandum, 2019 Revised Patent
Subject Matter Eligibility Guidance ("Memorandum"). Under that
guidance, we first look to whether the claim recites:
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(1) any judicial exceptions, including certain groupings of abstract
ideas (i.e., mathematical concepts, certain methods of organizing
human interactions such as a fundamental economic practice, or
mental processes); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.0S(a}-(c), (e}-(h)).
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
(seeMPEP § 2106.0S(d)); or
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
See Memorandum.
ANALYSIS
SECTION 101 REJECTION
Independent claim 1 is directed to matching buy and seller orders by,
inter alia, determining an optimized price point that maximizes the number
of shares matched; selecting orders eligible to participate in a matching point
including filtering orders based on the optimized price point and any
exclusion criteria; evenly allocating shares other than on a pro-rated or first-
in-first-out basis, by mapping available shares between seller-side orders and
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buyer-side orders based on a round-lot base allocation; and distributing the
allocated shares from the seller-side orders to the buyer-side orders.
Independent claims 15, 22, and 23 recite analogous limitations. Appellant
presents a unitary argument directed to all claims together. Accordingly, we
select claim 1 for discussion as representative of the rejected claims. We
refer to the rejected claims collectively herein as "the claims." See 37
C.F.R. § 4I.37(c)(l)(iv); In re King, 801 F.2d 1324, 1325 (Fed. Cir. 1986).
ABSTRACT IDEA - FUND AMENT AL ECONOMIC PRACTICE
We conclude that the matching of buyer-side orders and seller-sider
orders recited in independent claim 1 is directed to the abstract idea of a
fundamental economic practice. Alice, 573 U.S. at 219-20 ( concluding that
use of a third party to mediate settlement risk is a ''fundamental economic
practice" and thus an abstract idea); id. (describing the concept of risk
hedging identified as an abstract idea in Bilski as "a method of organizing
human activity"); Bilski, 561 U.S. at 611---612 (concluding that hedging is a
"fundamental economic practice" and therefore an abstract idea); Bancorp,
687 F.3d at 1280 (concluding that "managing a stable value protected life
insurance policy by performing calculations and manipulating the results'' is
an abstract idea); Inventor Holdings, LLC v. Bed Bath & Beyond, Inc.,
876 F.3d 1372, 1378-79 (Fed. Cir. 2017) (holding that concept of "local
processing of payments for remotely purchased goods" is a "fundamental
economic practice, which Alice made clear is, without more, outside the
patent system."); OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359,
1362---63 (Fed. Cir. 2015) (concluding that claimed concept of "offer-based
price optimization" is an abstract idea "similar to other 'fundamental
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economic concepts' found to be abstract ideas by the Supreme Court and
this court'').
We determine that matching buy and sell orders for shares [ of stock]
is a core function of a stock market. We consider that the buying and selling
of stock in a stock market is a fundamental economic practice ( concepts
demonstrated to be fundamental, long prevalent, well-known, and
extensively used for many years) because of the worldwide proliferation of
stock markets and because of stock markets' long-standing operation.
Appellant, citing Alice, admit that "the use of a third-party intermediary ( or
'clearing house') is also a building block of the modem economy," and that
the Amsterdam Stock Exchange, established in 1602, employed a
clearinghouse at least as early as the 17th Century. Br. 1 O; see Alice, 573 U.S.
at 217-20. Appellant alleges that the "claimed invention is not a long-
prevalent and fundamental practice," but offer no detailed refutation beyond
contending that the Examiner has not supported the allegation that the claim
is directed to an abstract idea. Br. 11.
ABSTRACT IDEA - MENTAL PROCESS
We further conclude that the claimed invention is directed to the
abstract idea of a mental process. The claim steps recite matching buy and
sell orders by determining an optimized price point that maximizes the
number of shares matched; selecting orders eligible to participate in
matching by filtering said orders by the optimized price point and exclusion
criteria; evenly allocating orders between buyer-side and seller-side orders
based on a round-lot base allocation. The claim recites "using a
microprocessor" with regard to each step, without any further technological
limitations. If a claim, under its broadest reasonable interpretation, covers
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performance in the mind but for the recitation of generic computer
components, then it is still in the mental processes category unless the claim
cannot practically be performed in the mind. 2 We determine that but for the
generic computer components recited ("using a microprocessor"), the
claimed price-point determination, order selection, exclusion, and share
allocation is capable of performance in the human mind.
INTEGRATED INTO A PRACTICAL APPLICATION
We determine that the identified abstract idea is not integrated into a
practical application. The claimed invention does not constitute an
improvement to the functioning of a computer; rather, it merely constitutes
the adaptation of an abstract idea, previously performed mentally or
2 See Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318
(Fed. Cir. 2016) ("[W]ith the exception of generic computer-implemented
steps, there is nothing in the claims themselves that foreclose them from
being performed by a human, mentally or with pen and paper.''); Mortg.
Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d. 1314, 1324 (Fed.
Cir. 2016) (holding that computer-implemented method for "anonymous
loan shopping'' was an abstract idea because it could be ''performed by
humans without a computer''); Versata Dev. Grp. v. SAP Am., Inc., 793
F.3d 1306, 1335 (Fed. Cir. 2015) ("Courts have examined claims that
required the use of a computer and still found that the underlying, patent-
ineligible invention could be performed via pen and paper or in a person's
mind."); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375,
1372 (Fed. Cir. 2011) (holding that the incidental use of "computer" or
"computer readable medium" does not make a claim otherwise directed to
process that '' can be performed in the human mind, or by a human using a
pen and paper'' patent eligible).
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manually, to execution as steps performed by a computer. MPEP
2106.05(a).
The invention is directed to the use of the computer as merely a tool to
perform an existing process, in this case, matching and allocating shares
between buy and sell orders. See Ans. 7. Appellant's Specification makes
clear that the object of the invention is to provide "a matching engine that
optimizes a price point and provides an in-line single pass optimization at
the time of matching and identifies those orders, in advance, that are able to
interact with one another to generate the maximum number of shares
matched, while at the same time minimizing gaming of the process by
participants." Spec. 1. Appellant concedes that the claimed invention "does
not purport to provide a faster microprocessor for a computer or better
computer memory or any other improvement to the computer per se." Br.
14. Appellant claimed invention may "maximize[] efficiency and
eliminate[] manipulation of the processing," but we regard these touted
advantages as an improvement to the underlying abstract idea, using the
computer merely as a tool. Id.
Appellant argues that the claimed solution is necessarily rooted in
computer technology in order to overcome a problem specifically arising in
the realm of computer networks. Br. 15-16; DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014). We are not persuaded that
the claimed invention "recites specific processing that integrates specifically
identified components in order to solve specific legacy crossing engine
problems." Br. 16. Rather, we agree with the Examiner that the claims
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provide a generic computer-implemented solution to a business-related
problem. See Ans. 9.
Turning to the other options under the Guidelines for integration of an
abstract idea into a practical application, the claimed invention is not applied
with, or by use of, a particular machine. MPEP 2106.05(b ). Appellant's
invention does not effect the transformation or reduction of a particular
article to a different state or thing. MPEP 2106.05(c). We determine, rather,
that Appellant's invention constitutes mere instructions to implement an
abstract idea on a computer. MPEP 2106.05(±). We consider that the
claimed distribution of allocated shares from the seller-side orders to the
buyer-side orders amounts to insignificant extra-solution activity. See
MPEP 2106.05(g).
In response to Appellant's argument that the claims do not pre-empt
or entirely tie up the "abstract idea of evenly allocat[ing] and distribut[ing]
the shares between buyer and seller order" (Br. 18), we agree with the
Examiner that lack of preemption will not demonstrate patent eligibility.
Ans. 7. "Where a patent's claims are deemed only to disclose patent
ineligible subject matter under the Mayo framework, as they are in this case,
preemption concerns are fully addressed and made moot." Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
WELL-UNDERSTOOD, ROUTINE, CONVENTIONAL
Having determined that the claims recite a judicial exception, and do
not integrate that exception into a practical application, we consider whether
the claim adds a specific limitation beyond the judicial exception that is not
"well understood, routine, and conventional" in the field. US PTO, 2019
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Revised Patent Subject Matter Eligibility Guidance, 84(4) Fed. Reg. 50, 56
(January 7, 2019) ("Revised Guidance").
Appellant recites, at several points in independent claim 1, that several
steps are to be performed "using a microprocessor."
Appellant's Specification discloses that the invention is to be
performed by a personal computer, or across a plurality of platforms.
Embodiments may employ client devices that include random access
memory coupled to a processor. Spec. ,r 57. Such processors may include
"a microprocessor, an application specific integrated circuit (ASIC), and or
(sic) state machines." Id. As Appellant have not disclosed any features of
the claimed microprocessor that would be considered as other than "well-
understood, routine, and conventional," these claim limitations fail to
indicate the presence of an inventive concept. We further find that
Appellant's disclosure of the claimed "microprocessor" is specified at a high
level of generality.
We conclude that none of the claim limitations, viewed "both
individually and as an ordered combination," amount to significantly more
than the judicial exception in order to sufficiently transform the nature of the
claims into patent-eligible subject matter. See Alice, 571 U.S. at 217.
Accordingly, we sustain the Examiner's 35 U.S.C. § 101 rejection of claims
1-23.
SECTION 103 REJECTIONS
CLAIMS 1-8, 22, AND 23
Independent claim 1 recites, inter alia, "evenly allocating shares other
than on a pro-rated or first-in-first-out basis between all of the executable
buyer-side and seller-side orders ... by mapping available shares between
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Application 13/112,845
the seller-side and buyer-side orders based on a round-lot base allocation."
Independent claims 22 and 23 recite analogous limitations.
The Examiner effectively concedes that the cited combination of
Cushing, Lupien, and Waelbroeck fails to map available shares based on
round-lot based allocations, stating that this feature "is disclosed by cited
prior art of Greenberg ... as described on page 19--20 of the Final Rejection
( claims 9--14) from which the Appeal Brief was filed." Ans. 11. Because
Greenberg is not applied against these claims, the asserted combination of
references fails to disclose all the limitations of claims 1-8, 22, and 23. We
do not sustain the Examiner's§ 103(a) rejection.
CLAIMS 9--14
We agree with the Examiner's finding that Greenberg discloses
mapping available shares between seller-side and buyer-side orders based on
round-lot based allocations. Greenberg ,r,r 36-39; Ans. 11; Final Act. 19-20.
Contrary to Appellant's allegation that Greenberg fails to remedy the
deficiencies of Cushing, Lupien, and Waelbroeck (Br. 20), we find that
Greenberg thus discloses the limitation missing from the Examiner's
combination with respect to independent claim 1, from which these claims
depend. We sustain the Examiner's§ 103(a) rejection of claims 9-14.
CONCLUSIONS
1. The claimed invention is directed to a judicial exception.
2. The judicial exception is not integrated into a practical application.
3. The combination of Cushing, Lupien, and Waelbroeck does not
disclose or suggest evenly allocating shares other than on a pro-rated or first-
in-first-out basis between all executable buyer-side and seller-side orders, by
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mapping available shares between seller-side and buyer-side orders based on
a round-lot base allocation.
ORDER
The Examiner's decision to reject claims 1-23 under 35 U.S.C. § 101
is affirmed. The Examiner's decision to reject claims 1-8, 22, and 23 under
35 U.S.C. § 103(a) is reversed. The Examiner's decision to reject claims 9-
14 under 35 U.S.C. § 103(a) is affirmed.
No time period for taking any subsequent action in connection with
this appeal maybe extended under 37 C.F.R. § 1.136(a)(l).
AFFIRMED
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