Ex Parte Himmelstein

Patent Trial and Appeal BoardMay 11, 2016

11944042 (P.T.A.B. May. 11, 2016)

UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. 111944,042 86318 7590 Lech Law, LLC P.O. Box 3473 Dublin, OH 43016 FILING DATE FIRST NAMED INVENTOR 11/21/2007 Richard Himmelstein 05/12/2016 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. 69174-6 4582 EXAMINER ABDI, KAMBIZ ART UNIT PAPER NUMBER 3694 MAILDATE DELIVERY MODE 05/12/2016 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 RICHARD HIMMELSTEIN Appeal2013-007474 1 Application 11/944,0422 Technology Center 3600 Before BRADLEY B. BAY AT, TARA L. HUTCHINGS, and AMEE A. SHAH, Administrative Patent Judges. BAY AT, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Appellant appeals under 35 U.S.C. Â§ 134(a) from the Examiner's rejection of claims 29--33, 35--41, 43, and 44. 3 We have jurisdiction under 35 U.S.C. Â§ 6(b ). STATEMENT OF THE DECISION We AFFIRM. 1 Our decision references Appellant's Appeal Brief ("Br.," filed Nov. 5, 2012), the Examiner's Answer ("Ans.," mailed Feb. 19, 2013), and the Non- Final Office Action ("Non-Final Act.," mailed Nov. 3, 2011). 2 Appellant identifies "BarterSecurities, Inc." as the real party in interest. Br. 4. 3 Claims 1-28, 34, and 42 are canceled. Id. at 24--26, Claims App. Appeal2013-007474 Application 11/944,042 CLAIMED fNVENTION Appellant's claimed invention "provide[s] an electronic bartering system for bartering items or securities" (Spec. 4). Independent claim 29 is illustrative of the subject matter on appeal: 29. A method for facilitating buying and selling employee stock options on a computerized transferable stock option trading system, the method comprising: identifying, by the computerized system, a first trader and a second trader, the first trader seeking to acquire option rights for a stock, the second trader being an employee controlling option rights for the stock; receiving, by the computerized system, an offer from the first trader, the offer identifying the stock for which the first trader seeks to acquire option rights and a price associated with the option rights; receiving, by the computerized system, an order from the second trader, the order identifying the stock for which the employee controls option rights and a quantity of options to sell; assisting, by the computerized system, the second trader in determining whether the offer is financially advantageous; matching, by the computerized system, the order with the offer; transferring, by the computerized system, the option rights for the stock from the second trader to the first trader; and transferring, by the computerized system, funds in accordance with the offer from the first trader to the second trader. Br. 24, Claims App. REJECTIONS I. Claims 29-33, 35, and 36 are rejected under 35 U.S.C. Â§ 101 as directed to non-statutory subject matter. Non-Final Act. 2--4. 2 Appeal2013-007474 Application 11/944,042 II. Claims 29--33, 35--41, 43, and 44 are rejected under 35 U.S.C. Â§ 101 as unsupported by either a clearly asserted utility or a well- established utility. Id. at 5. III. Claims 29-33, 35--41, 43, and 44 are rejected under 35 U.S.C. Â§ 112, first paragraph. Id. IV. Claims 29-33, 35--41, 43, and 44 are rejected under 35 U.S.C. Â§ 112, second paragraph. Id. at 5---6. V. Claims 29-32 and 37--40 are rejected under 35 U.S.C. Â§ 103(a) as unpatentable over Gutterman (US 5,297,031, iss. Mar. 22, 1994), Popolo (US 5,715,402, iss. Feb. 3, 1998), Cristofich (US 6, 173,270 Bl, iss. Jan. 9, 2001), Barron's Dictionary (Dictionary of Finance and Investment Terms, Fifth Edition, pub. 1998), and AAP A. 4 Id. at 6-11. VI. Claims 33 and 41 are rejected under 35 U.S.C. Â§ 103(a) as unpatentable over Gutterman, Popolo, Cristofich, Barron's Dictionary, AAPA, and Perg (US 5,237,500, iss. Aug. 17, 1993). Id. at 11. VII. Claims 35, 36, 43, and 44 are rejected under 35 U.S.C. Â§ 103(a) as unpatentable over Gutterman, Popolo, Cristofich, Barron's Dictionary, AAP A, and Anderson (US 6,064,985, iss. May 16, 2000). Id. at 11-12. 4 Although the statement of the rejection fails to list claims 30-32 and 38- 40, these claims are rejected in the body of the rejection. See Non-Final Act. 10-11. We consider this omission an inadvertent and harmless error on the part of the Examiner. 3 Appeal2013-007474 Application 11/944,042 ANALYSIS Rejection I Non-statutory Subject Matter Appellant argues claims 29--33, 35, and 36 as a group, and chooses independent claim 29 for discussion. Accordingly, we select claim 29 as representative of the group, and thus, claims 30-33, 35, and 36 stand or fall with claim 29. See 37 C.F.R. Â§ 41.37(c)(l)(iv). The Examiner finds "[b ]ased upon consideration of all the relevant factors with respect to the claim as a whole, claim 29 is held to claim an abstract idea, and is therefore rejected as ineligible subject matter under 35 USC 101." Non-Final Act. 3. Claim 29 is directed to using a computerized system to facilitate buying and selling of stock options among users. The Examiner finds that "[i]ndependent claim 29 recites a process comprising [steps including] identifying, receiving, matching, and transferring." Id. The Examiner asserts that claim 29 neither recites the structural apparatus that performs the method steps nor positively recites the subject matter that is being transformed to a different state. Id. The Examiner determines that the steps of claim 29 performed "'by the computerized system' could mean a human using a desktop computer system to perform all the steps" and does not indicate that a particular machine has been programmed to perform the method steps. Id. at 4. Appellant contends that the Examiner misapplied USPTO guidelines by limiting the focus of the rejection only on the machine-or-transformation test. Br. 9. "Specifically, [Appellant argues] the claims recite that the machine performs every step of the recited process. Accordingly, the machine is not merely nominally related to the process, but rather integral 4 Appeal2013-007474 Application 11/944,042 and necessary to the process." Id. According to Appellant, "[t]he steps of the process include recitations of elements that further distinguish the computerized system from a general purpose computer. For example, the machine comprises an offer/order matching algorithm." Id. at 10. We disagree that the Examiner limited the non-statutory analysis of claim 29 solely to the machine-or-transformation test. See Non-Final Act. 2--4. The Supreme Court in Bilski held that claims explaining the basic concept of an activity (hedging) would allow the Appellant to preempt the use of this approach in all fields, and would effectively grant a monopoly over an abstract idea. Bilski v. Kappas, 130 S. Ct. 3218, 3231 (2010). Abstract ideas are not patent eligible. Id. at 3225. Alice involved "a method of exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk." Alice Corp. Pty. Ltd. v. CLS Bank Int'!, 134 S. Ct. 2347, 2356 (2014). Like the method ofhedging risk in Bilski, Alice held that "intermediated settlement... is an 'abstract idea' beyond the scope ofÂ§ 101." Id. Here, claim 29 does no more than lay out the concept of performing a financial transaction between two parties. The claim neither refers to a specific machine by reciting structural limitations to any apparatus, nor recites any specific operations that would cause a machine to be the mechanism to identify, receive, assist, match, and transfer. As the Examiner observes, performing the recited steps requires no machine, but only the conscious thought of a human controlling the operation. Absent any specific structural limitations, claim 29 recites no more than the abstract concept and basic principles of performing a financial transaction between two parties for buying stock options in exchange for funds. As in Bilski and Alice, a patent including this claim would allow the Appellant to preempt the 5 Appeal2013-007474 Application 11/944,042 use of this approach in all fields, and would effectively grant a monopoly over an abstract idea. Moreover, as to "the computerized system" recited with respect to each step in claim 29, even if some physical steps are required to obtain information from a database (e.g., entering a query via a keyboard, clicking a mouse), such data-gathering steps cannot alone confer patentability. Indeed, the Court in Alice cautioned that merely limiting the use of an abstract idea "to a particular technological environment" or implementing the abstract idea on a "wholly generic computer" is not sufficient as an additional feature to provide "practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself." Alice, 134 S. Ct. at 2358. Here, Appellant contends that because each element of the method of claim 29 is performed "by the computerized system," every step of the method is tied to another statutory class. Br. 11. We disagree with Appellant's contention because the recitation of a generic computer system does not limit the claims sufficiently or add any inventive concept to the abstract idea of performing a financial transaction as discussed above. The fact that certain algorithms are disclosed in the Specification as argued by Appellant does not change the outcome either, because a claim may preempt only that which the claim encompasses, not what is disclosed but left unclaimed. In other words, claim 29 does not recite a specialized algorithm that could move it from the abstract to the concrete, and simply executing an abstract concept on a computerized system does not render a computer "specialized"; nor does it transform a patent-ineligible claim into a patent- eligible one. See Bancorp Servs., LLC v. Sun Life Assurance Co. of Can., 6 Appeal2013-007474 Application 11/944,042 687 F.3d 1266, 1280 (Fed. Cir. 2012). Thus, to the extent that claim 29 recites a "computerized system" to implement the steps, we do not find these limitations limit the scope of the claim to anything less than the abstract idea itself. Accordingly, we sustain the rejection of claim 29 under 35 U.S.C. Â§ 101 as directed to non-statutory subject matter, including claims 30-33, 35, and 36, which fall with claim 29. Rejection II Utility The Examiner rejects claims 29--33, 35--41, 43, and 44 under 35 U.S.C. Â§ 101 as being unsupported by either a clearly asserted utility or a well-established utility. Non-Final Act. 5. In particular, the Examiner finds Independent claims 29 and 37 are inoperative because the buy Id. and sell offers cannot be matched and thus cannot result in a transaction and a transfer of fi1nds. The computer assisted determination would prevent a determination since the counter party offers each do not constitute valid, actionable offers since the buy offer lacks a quantity and the sell offer lacks a price. Hence, the steps as claimed cannot be a computer automated process. Dependent claims 30-33, 35, 36, 38--41, 43 and 44 are rejected because of their dependence on independent claims 29 and 37. An examiner has the initial burden of setting forth a reason to doubt an appellant's presumptively correct assertion of utility. In re Swartz, 232 F.3d 862, 864 (Fed. Cir. 2000). "The PTO may establish a reason to doubt an invention's asserted utility when the written description 'suggest[s] an inherently unbelievable undertaking or involve[ s] implausible scientific 7 Appeal2013-007474 Application 11/944,042 principles."' In re Cortright, 165 F.3d 1353, 1357 (Fed. Cir. 1999) (quoting Jn re Brana, 51F.3d1560, 1566 (Fed. Cir. 1995)). Thus, the Examiner must present evidence necessary to establish a reason for one of ordinary skill in the art to question the objective truth of the statement of utility. Swartz, 232 F.3d at 864. In our view, the Examiner has not set forth a factual basis to establish that there is reason for one skilled in the art to question the presumptively correct assertion of utility for the claimed invention. Thus, we agree with Appellant "that the Office's rejection is conclusory and is insufficient to make aprimafacie case ofunpatentability." Br. 11. The Examiner fails to consider and address the passages in the Specification cited by Appellant in support of a credible utility (see Br. 12) and merely refers to the rejection of record, which fails to present any evidence or factual basis to support the Examiner's findings. See Ans. 3 ("RESPONSE: Please see the rejections mailed November 3, 2011."). Accordingly, the rejection of claims 29-33, 35--41, 43, and 44 under 35 U.S.C. Â§ 101 as being inoperative, and therefore lacking credible utility, is not sustained. Rejection III Enablement The Examiner rejects claims 29-33, 35--41, 43, and 44 under 35 U.S.C. Â§ 112, first paragraph, because "the claimed invention is not supported by either a clearly asserted utility or a well established utility for 8 Appeal2013-007474 Application 11/944,042 the reasons set forth above, one skilled in the art clearly would not know how to use the claimed invention." Non-Final Act. 5. However, the question under the enablement requirement ofÂ§ 112 is whether the Specification teaches those in the art to make and use the invention without undue experimentation. See In re Vaeck, 947 F.2d 488, 495 (Fed. Cir. 1991). That question has not been addressed by the Examiner. Accordingly, a prima facie case of a lack of enablement under the first paragraph ofÂ§ 112 has not been made out in the first instance, and therefore, the rejection of claims 29-33, 35--41, 43, and 44 under 35 U.S.C. Â§ 112, first paragraph, as failing to comply with the enablement requirement, is not sustained. Rejection IV Indefiniteness The Examiner rejects claims 29-33, 35--41, 43, and 44 under 35 U.S.C. Â§ 112, second paragraph, because of "ambiguities created by the lack of an offer price mechanism and the lack of an offer quantity in independent claims 29 and 37." Non-Final Act. 5---6. In light of the Specification, one of ordinary skill in the art would understand the claimed subject matter comprises an offer price mechanism and an offer quantity as claimed. That said, claim 29 recites an offer identifying the stock sought and a price associated with the offer. "Breadth is not indefiniteness." In re Gardner, 427 F.2d 786, 788 (CCPA 1970). Accordingly, the rejection of claims 29-33, 35--41, 43, and 44 under 35 U.S.C. Â§ 112, second paragraph, as being indefinite for failing to particularly 9 Appeal2013-007474 Application 11/944,042 point out and distinctly claim the subject matter which Appellant regards as the invention, is not sustained. Rejection V Obviousness Independent claims 29 and 37, and dependent claims 30-32 and 38-40 Appellant argues that the Examiner erred in rejecting claim 29 under 35 U.S.C. Â§ 103(a) because Gutterman fails to disclose or suggest "identifying, by the computerized system, a first trader and a second trader." Br. 18. In the Non-Final Office Action, the Examiner cites column 11, lines 23-36 of Gutterman as disclosing the argued limitation (Non-Final Act. 6). Moreover, in the Answer, the Examiner cites column 14, lines 21-24 of Gutterman, asserting "that the identification of a trader is being disclosed." Ans. 5. We have reviewed the cited passages of Gutterman on which the Examiner relies. Gutterman discloses that orders are communicated to the workstation via an electronic order entry system, and the information presented with each incoming order includes at least an identification number of each trader placing the order and the trader's account number. See Gutterman 11:23-26 and 14:21-24. As such, we find that the Examiner's interpretation of "identifying, by the computerized system, a first trader and a second trader" is reasonable, because the computerized system of Gutterman identifies traders via an identification number and an account number. Appellant contends that "[t]he Office fails to provide prior art teaching or suggesting the element of 'assisting, by the computer[ized] system, the second trader in determining whether the offer is financially 10 Appeal2013-007474 Application 11/944,042 advantageous'." Br. 18 (emphasis omitted). "Specifically, [Appellant argues that] the selection of a reasonable asking price[, as described by Popolo,] does not reveal whether selling at that price would be advantageous given a seller's specific financial situation." Id. at 19. Appellant's argument however is not commensurate in scope with the language of claim 29. The claimed limitation "determining whether the offer is financially advantageous" is not based upon a seller's specific financial situation, as argued, but rather broadly recited to encompass any basis for determining whether the offer is financially advantageous. Indeed, by "assist[ing] the seller in establishing a reasonable asking price," Popolo teaches a system that determines whether the offer is financially advantageous so that the seller does not underprice, and therefore, be financially disadvantaged. See Ans. 6 (citing Popolo 16:21-22). Appellant further contends that Gutterman does not teach or suggest "matching, by the computer[ized] system, the order with the offer," as recited in claim 29. Br. 20. In particular, Appellant argues that Gutterman's grouping and color-coding of orders (i.e., all buys and sells of the same commodity price) for quick identification and action "would be matched by the trader or user, not the computerized system as claimed." Id. We disagree. Gutterman' s computerized system automatically sorts through numerous incoming orders to identify all buys and sells of the same commodity and price and presents the matched orders and offers by color- coding them for easy identification for the broker. See Gutterman 11 :23--45; see also Gutterman 5:49-53 ("More than such a system for merely matching buy and sell orders, the present invention provides a system that allows brokers to manage their decks and to improve the accuracy of 11 Appeal2013-007474 Application 11/944,042 communications between the trading floor and the customers. ")(emphasis added). We are not persuaded by Appellant's argument that neither Gutterman nor Cristofich discloses or suggests "transferring, by the computerized system, the options rights for the stock from the second trader to the first trader" (Br. 20), because as the Examiner explains (see Ans. 8-9), this limitation of claim 29 is rejected as obvious over the combination of Gutterman and Cristofich, and not over either one of them individually. See In re Merck & Co., 800 F.2d 1091, 1097 (Fed. Cir. 1986) ("Non- obviousness cannot be established by attacking references individually where the rejection is based upon the teachings of a combination of references."). Finally, Appellant argues "[ t ]he Office admits that Gutterman does not teach or suggest the element of 'transferring, by the computerized system, funds in accordance with the off er from the first trader to the second trader'." Br. 21. Appellant submits that Cristofich fails to disclose this limitation because "the system of Cristofich does not automatically transfer the funds." Id. To the contrary, the Examiner asserts that "Gutterman suggests the transferring of funds in col. 13, 11. 3 7-40 ... [but] Gutterman does not explicitly disclose the transfer of rights." Ans. 7. The Examiner relies on Cristofich in combination with the teachings of Gutterman to render obvious this disputed limitation. Id. at 7-8 ("Thus the ordinary practitioner would have seen it as obvious that the known methods of Gutterman in view of Cristofich disclosed and suggested 'transferring, by the computerized system, funds in accordance with the off er from the first trader to the second trader'."). By attacking Cristofich individually, 12 Appeal2013-007474 Application 11/944,042 Appellant fails to adequately address the reasoning proffered by the Examiner in rejecting this contested limitation, and thus, we are not apprised of error on the part of the Examiner. Furthermore, we note that Appellant's argument that Cristofich's computerized system does not "automatically" transfer the funds is not commensurate in scope with the recited claim language. The claim limitation as recited does not preclude a broker using the computerized system to transfer funds. We are not persuaded, based on the present record, that the Examiner erred in rejecting claim 29 under 35 U.S.C. Â§ 103(a). Therefore, we sustain the Examiner's rejection of independent claim 2 9, and independent claim 3 7, which recites substantially similar limitations and is argued based on claim 29. See Br. 21. We also sustain the Examiner's rejection of dependent claims 30-32 and 38--40, which are not argued separately except based on their dependence on claims 29 and 37. See id. Dependent claims 33 and 41 Rejection VI Obviousness For the foregoing reasons, we sustain the rejection of claims 33 and 41 under 35 U.S.C. Â§ 103(a), which are not argued separately except based on their dependence on claims 29 and 37. See Br. 22. Rejection VII Obviousness Dependent claims 35, 36, 43, and 44 We sustain the Examiner's rejection under 35 U.S.C. Â§ 103(a) of claims 35, 36, 43, and 44 for the same reasons discussed above because they 13 Appeal2013-007474 Application 11/944,042 are not argued separately except based on their dependence on claims 29 and 37. See id. DECISION Rejections I, V, VI, and VII are affirmed. Rejections II, III, and IV are reversed. No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. Â§ 1.136(a)(l )(iv). AFFIRMED 14