Ex Parte Jones et al

Patent Trial and Appeal Board

Jul 25, 2016

10707491 (P.T.A.B. Jul. 25, 2016)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO.
101707,491
132787 7590
Docket Clerk-GOLD
P.O. Drawer 800889
Dallas, TX 75380
FILING DATE FIRST NAMED INVENTOR
12/17/2003 Emerson P. Jones
07/27/2016
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.
GOLDll-00046 1490
EXAMINER
DASS, BARISH T
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
07/27/2016 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):
john.maxin@gs.com
patents@munckwilson.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte EMERSON P. JONES,
KAREN SCHOEN,
and IVAN ROSS
Appeal2016--005430
Application 10/707,491
Technology Center 3600
Before MURRIEL E. CRAWFORD, ANTON W. PETTING, and
JOSEPH A. FISCHETTI, Administrative Patent Judges.
PETTING, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE1
Emerson P. Jones, Karen Schoen, and Ivan Ross (Appellants) seek
review under 35 U.S.C. § 134 of a final rejection of claims 32, 34--39, and
41--4 7, the only claims pending in the application on appeal. This is the
1 Our decision will make reference to the Appellants' Appeal Brief ("App.
Br.," filed November 6, 2015) and Reply Brief ("Reply Br.," filed May 2,
2016), and the Examiner's Answer ("Ans.," mailed March 2, 2016), and
Final Action ("Final Act.," mailed January 7, 2015).
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Application 10/707,491
third time this application has come before this panel for appeal. We have
jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b).
The Appellants invented a way of conducting financial transactions.
Specification para. 2.
An understanding of the invention can be derived from a reading of
exemplary claim 32, which is reproduced below (bracketed matter and some
paragraphing added).
32. A unit pricing device, comprising:
a processor;
a communication device
in communication with said processor and coupled
to receive information from one or more data sources;
and
a storage device
. . . . t. . ,..l ,..l •
m commumcat1on w1t11 saiu processor anu stormg
data structures and instructions to be executed by said
processor to:
[ 1] receive an issuer identifier
identifying an issuer of a unit;
[2] receive an equity security identifier
of an equity security associated with the issuer
identifier;
[3] populate a first data structure with forward
information,
including a forward settlement date and a forward
settlement price,
describing a forward transaction that obligates a
holder to purchase a number of shares of the equity
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security associated with the issuer at the forward
settlement date for the forward settlement price;
[ 4] populate a second data structure with convertible note
information,
including
a convertible note maturity date,
a convertible note interest rate,
a conversion ratio,
a convertible note issue price,
a convertible note principal amount,
conversion conditions
identifying circumstances under
which the convertible note may be
converted,
and
an opportunistic remarketing period
during which the issuer of the unit has
discretion to perform at least one of a
capped and uncapped remarketing,
describing a convertible note
that is convertible to the equity security
associated with the issuer according to a specified
conversion formula;
[5] populate a third data structure with financial
information
associated with the equity security identifier from
a data source;
[ 6] populate a fourth data structure with financial
information
associated with the issuer identifier from a data
source;
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and
[7] calculate,
based on
forward information in the first data
structure,
convertible note information in the second
data structure,
equity security financial information in the
third data structure,
and
issuer identifier financial information in the
fourth data structure,
pricing data associated with the unit comprising
the forward transaction and the convertible note.
The Examiner relies upon the following prior art:
n"'.l11..-"ht,,. TNh.')h.11')1 Rl T11 hr 1 '7 ')(\(\ 1
_L.J uu5_1__1_Lv \....JU v,L-vJ,JL._1_ .J......1_1_ .JU-_I_J _I_ I' L.VV _I_
Ross US 2003/0009406 Al Jan. 9,2003
Green US 2003/0093375 Al May 15, 2003
Birle, Jr. US 2003/0130941 Al July 10, 2003
Zivan US 2003/0144943 Al July 31, 2003
Galant US 6,839,686 Bl Jan.4,2005
Barron's Educational Series, Barron's Financial Dictionary, 1995
Claims 32, 34--39, and 41--47 stand rejected under 35 U.S.C. § 101 as
directed to non-statutory subject matter.
Claim 32 stands rejected under 35 U.S.C. § 103(a) as unpatentable
over Galant, Birle, Green, Daughtery, and Ross.
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Claims 34--39 and 41--47 stand rejected under 35 U.S.C. § 103(a) as
unpatentable over Galant, Birle, Green, Daughtery, Ross, Zivan, Barron's
Financial Dictionary, and Admitted Prior Art.
ISSUES
The issues of statutory subject matter tum primarily on whether the
claims are directed to more than simply directing a generic computer to
perform the abstract idea of pricing securities. The issues of obviousness
tum primarily on whether the data added to the recited data structures is
sufficient to make the claims as a whole patentable.
FACTS PERTINENT TO THE ISSUES
The following enumerated Findings of Fact (FF) are believed to be
supported by a preponderance of the evidence.
Facts Related to the Prior Art
Gal ant
01. Galant is directed to investment information to
assist in the evaluation of securities and ways for analyzing a
variety of debt and equity instruments. Galant 1 :8-14.
02. In the past, bond-pricing and rating information on
a specific bond issue was obtained through personal contacts and
various services. This process is cumbersome and time intensive
as no single contact could provide comprehensive information,
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thus a complete market evaluation was impossible to achieve.
Galant 1: 15-21.
03. Galant facilitates the identification of arbitrage
opportunities. The method and apparatus additionally provide for
the analysis of a group of securities regarding intrinsic and
incremental value, average portfolio coupon, average portfolio
maturity, portfolio option value, theoretical portfolio value, and
portfolio efficiency. Gal ant 2 :4-10.
Green
04. Green is directed to systems and methods for
creating, issuing, servicing, or maintaining convertible and
exchangeable financial instruments and computer-based user
interfaces thereof. Green para 0002.
05. Green creates (including testing and evaluating),
issues (including offering and selling, and services or maintains
convertible or exchangeable financial instruments. These
financial instruments are created by a "building block approach",
which allows a user to build a financial instrument by selecting
specific objects and features, and then providing the specific
inputs for each selected feature. Green provides a user with the
ability to experiment by selecting and re-selecting desired objects
and/or features ofa new financial instruments. Specifically the
model/calculator allows flexibility by providing a user the
opportunity to select the desired objects and state the features of
each desired object. The benefit of the flexible model/calculator
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and associated system is that a user can simulate, generate and
evaluate new financial instruments without creating a new
model/ computer and system for each new financial instrument.
Green allows capital markets to experiment with new product
ideas in an affordable and time-effective manner and minimize
time period between the creation of a new financial instrument
and the marketing of the new financial instrument. Green para
0008.
06. FIG. 3 illustrates some preferred embodiments to
issue or pricing a convertible or exchangeable financial
instrument. Green para 0014.
07. Objects are used to compartmentalize inputs.
Examples of objects include: Redemption (i.e., expiration and
return of principal), Cash Flow (i.e., coupons or dividends),
Conversion (i.e., Holder's option to convert or exchange the
instrument into an underlying asset), Issuer Call Terms (i.e.,
Issuer's option for an early redemption), Holder's Put (i.e.,
Holder's option for an early redemption), Credit, Issue Terms,
Bankruptcy, Accretion, Contingent Payment ("CoPa"), Contingent
Conversion ("CoCo"), and Model Parameters. Green para 0034.
08. The convertible or exchangeable bond object
simply passes as an argument to the convertible or exchangeable
model/calculator along with the other convertible or exchangeable
model/calculator inputs. Green para 0037.
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09. A rules engine maintains objects and inputs of
newly created convertible or exchangeable financial instruments,
allowing a user an opportunity to evaluate and manage a new
financial instrument in the after market. In some embodiments, a
rules engine utilizes financial instrument features from several
sources (i.e., internal or external financial sources). Green para
0043.
10. Green describes a Conversion Object for creating,
simulating or generating a financial instrument and selecting from
a list of Conversion features. Conversion inputs may include:
Capped, Date Schedule, None, Types of Instrument (e.g.,
PRIDES, PRIZES, etc.), Ratio, and Schedule. Upon selection of
Capped, the user preferably is provided with a list of appropriate
inputs corresponding to the Capped conversion, which includes:
Ratio, Begins, Conversion Cap, Exchangeable Type, Cash and
Ends. Upon selection of Date Schedule, the user preferably is
provided with a list of appropriate inputs corresponding to the
Date Schedule. Green para 0054.
Birle
11. Birle is directed to convertible and exchangeable
financial instruments and methods and systems for offering and
servicing the same, and relates more particularly to debit
instruments which are convertible into equity instruments. Birle
para 0002.
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12. Birle describes that a bond is a common financial
instrument having language indicative of a principle amount, and
having further language indicative of a borrower's obligation to
repay the principal at some future time. Birle para 0003. Bonds
can further specify the borrower's obligation to make interest
payments at specific times or not specify any obligation to interest
payments prior to maturity. Birle para 0003.
13. Convertible bonds are instruments which have
some qualities of bonds as well as some of the qualities of stock,
where the bond can be converted by the holder into a number of
shares of equity. Birle para's 0005 and 0009. The number of
shares can be a fixed number or determined by a formula. Birle
para 0005.
14. A contingent payment financial instrument may be
a convertible debt instrument. If the instrument is callable, the
issuer may have the right to redeem the instruments at their
accreted value. Holders may also have the right to require the
issuer to redeem the instruments at their accreted value specified
dates, and upon a change in control of the issuer. The difference
between the issue price and principal amount of the contingent
payment debt instrument will accrue by a specified percentage. A
three-percent yield, for example, may be a reasonable rate under
some market conditions. Beginning at a pre-determined period of
time after issuance of the contingent payment instruments the
issuer may pay contingent interest if the trading value of the
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instrument exceeds a specified percentage of the accreted value of
each instrument for some pre-determined number of consecutive
days (or any other suitable period) immediately preceding the first
day of the interest accrual period. In some embodiments, the
specified percentage of the accreted value may change, for
example, by a predetermined percentage on a periodic basis. Also,
in some embodiments, the amount of the contingent payment may
change with multiple triggers that may be triggered at specified
pre-determined times. Other embodiments may have multiple
triggers that may be triggered at any time. In some embodiments,
contingent payments may be triggered by only one trigger or by
more than one trigger. In some embodiments, a trigger may be
any event and may or may not be associated with the financial
instrument paying such contingent payments. Birle para 0039.
15. From the point of view of the holder, after the non-
call period the holder may value the debt instrument, as an
economic matter, as a right to convert the debt instrument into
issuer stock coupled with a right to receive cash which, if the
issuer's stock drops in value, is equal to the accreted value of the
instrument. That is, the pure bond features of a contingent
payment debt instrument may be valued at that point as a form of
"insurance" or put option. Because it may be more valuable, for
holders, to have a right to convert the contingent payment debt
instrument into the issuer's stock coupled with this bond element
than to simply hold the issuer's stock, the trading value of the
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instrument may exceed the value of the issuer stock into which it
is convertible. If the issuer's stock rises enough that the
"insurance" or put characteristics of the pure bond elements of the
contingent payment debt instrument are reduced in value,
however, the trading value of the contingent interest debt
instrument may tend to approximate the fair market value of issuer
stock. Birle para 0040.
Ross
16. Ross is directed to structuring an obligation, and
more particularly, structuring an interest-bearing obligation which
is convertible into stock. Ross para. 1.
1 7. As background, Ross describes a number of
financial mechanisms exist for paying interest to the purchaser of
an obligation including a bond (such as a convertible bond; for
example), a bond plus a warrant unit structure to buy stock, or a
money market fund. Likewise, a number of financial mechanisms
exist which permit a holder to purchase stock at a future date. For
example, "options contracts", which are typically sold to the
public, give the holder of the contract the right to purchase a given
stock at a fixed price at a future date. Similarly, "warrants", which
are typically given or sold to employees of a company, give the
holder the right to purchase stock in the employee's company at a
fixed price at a future date. Ross para. 2-3.
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18. Ross describes a senior unsecured obligation
which is convertible into shares of stock. The note may have a
predetermined issue price and a nominal maturity amount,
wherein the nominal maturity amount may be subject to any
upward adjustment in the event there is an interest adjustment.
The nominal maturity amount may represent a predetermined
annual initial accretion rate and such initial accretion rate may be
in effect for a predetermined period of time after the issuance of
the note. After the predetermined period of time has elapsed,
there may be one or more interest adjustments by which the
accretion rate may be varied according to a formula described in
detail below. Further, the note may be repurchased, redeemed, or
converted into shares of stock under conditions described. Of
note, the obligation may have one or more "put" dates (i.e., dates
at which a holder of the obligation may "put", or sell, the
obligation). In addition, the interest adjustment for the obligation
may occur on a put date for the obligation or a non-put date (i.e.,
any other desired date). Further, the value of the adjusted interest
may be dependent upon the price of a stock and/or the price of a
stock in combination with the price of the obligation. For
example, the value of the adjusted interest may be dependent
upon: i) the price of the stock; or ii) the price of the stock in
combination with the price of the obligation (wherein the price of
the stock and/or the price of the obligation may be weighted
relative to one another); or iii) a ratio of the price of the stock to
the price of the obligation (wherein the price of the stock and/or
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the price of the obligation may be weighted relative to one
another); or iv) a ratio of the price of the obligation to the price of
the stock (wherein the price of the stock and/or the price of the
obligation may be weighted relative to one another). Further still,
the interest may be reset to a market rate (which may be actual or
calculated) for debt having a maturity which may correspond to
one or more put dates of the obligation. Ross para. 26-27.
Daughtery
19. Daughtery is directed to automatically calculating
options for use in a variety of markets, such as commodities or
securities markets. Daughtery 1: 14--17.
20. Daughtery describes financial instruments that
have been shown to be equivalent or relatable to options,
including fixed-income instruments identical to an individual or
series of cash-settled, "capped" call options--a call option with a
maximum benefit. These options are purchased with the
expectation that the issuer will remain a viable, profitable entity.
However, the maximum return on the call is "capped" at some
amount (the coupon payment and principal payment at the end of
the period). One capped option represents each coupon payment
as well as the principal or notional value repaid. Daughtery 21 : 1-
21.
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Barron's
21. Barron's is directed to a dictionary of finance and
investment terms. Barron's Title.
22. Barron's provides that the definition of a unit, in
the context of securities, is more than one class of securities traded
together. Barron's 677: Unit definition 3. For example, a
common share and a subscription warrant might sell as a unit.
Barron's 677: Unit definition 3. Barron's further defines a unit in
primary and secondary distributions of securities, one share of
stock or one bond. Barron's 677: Unit definition 4.
23. Barron's provides that the definition of a
convertible is a corporate security, such as preferred shares or
bonds, that is exchangeable for a set number of another form at a
pre-stated price. Barron's 120: Convertibles.
24. Barron's provides that the definition of a
subscription warrant is a type of security, usually issued together
with a bond or preferred stock, which entitles the holder to buy a
proportionate amount of common stock at a specified price.
Barron's 607: Subscription Warrant.
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ANALYSIS
Claims 32, 34-39, and 41--47 rejected under 35 U.S.C. § 1 OJ as
directed to non-statutory subject matter
The Supreme Court
set forth a framework for distinguishing patents that
claim laws of nature, natural phenomena, and abstract ideas
from those that claim patent-eligible applications of those
concepts. First, [] determine whether the claims at issue are
directed to one of those patent-ineligible concepts. []If so, we
then ask, "[ w ]hat else is there in the claims before us? [] To
answer that question, [] consider the elements of each claim
both individually and "as an ordered combination" to determine
whether the additional elements "transform the nature of the
claim" into a patent-eligible application. [The Court] described
step two of this analysis as a search for an "'inventive
concept'"-i.e., an element or combination of elements that is
"sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the [ineligible concept]
itself."
Alice Corp., Pty. Ltd. v CLS Bank Intl, 134 S.Ct. 2347, 2355 (2014)
(citing Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132
S.Ct. 1289 (2012)).
To perform this test, we must first determine whether the claims at
issue are directed to a patent-ineligible concept. The preamble to claim 32
recites that it is a unit pricing device. The seven steps in claim 32 result in
providing a price for a unit comprising a forward transaction and a
convertible note. The Specification at 1 recites that the invention relates to
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conducting transactions, and more particularly, embodiments relate to
issuing a unit including a forward contract and a note or other instrument.
Thus, all this evidence shows that claim 1 is directed to pricing a security.
It follows from prior Supreme Court cases, and Bilski in particular,
that the claims at issue here are directed to an abstract idea. Like the risk
hedging in Bilski, the concept of security pricing is a fundamental economic
practice long prevalent in our system of commerce. The use of security
pricing is also a building block of the modem economy. Thus, security
pricing, like hedging, is an "abstract idea" beyond the scope of§ 101. See
Alice Corp. Pty. Ltd., 134 S.Ct. at 2356.
As in Alice Corp. Pty. Ltd., we need not labor to delimit the precise
contours of the "abstract ideas" category in this case. It is enough to
recognize that there is no meaningful distinction in the level of abstraction
between the concept of risk hedging in Bilski and the concept of security
pricing at issue here. Both are squarely within the realm of "abstract ideas"
as the Court has used that term. See Alice Corp. Pty. Ltd., 134 S.Ct. at 2357.
The remaining claims merely describe examples of attributes that
might characterize such a security. We conclude that the claims at issue are
directed to a patent-ineligible concept.
The introduction of a computer into the claims does not alter the
analysis at Mayo step two.
the mere recitation of a generic computer cannot
transform a patent-ineligible abstract idea into a patent-eligible
invention. Stating an abstract idea "while adding the words
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'apply it'" is not enough for patent eligibility. Nor is limiting
the use of an abstract idea "'to a particular technological
environment.'" Stating an abstract idea while adding the words
"apply it with a computer" simply combines those two steps,
with the same deficient result. Thus, if a patent's recitation of a
computer amounts to a mere instruction to "implement[t]" an
abstract idea "on ... a computer," that addition cannot impart
patent eligibility. This conclusion accords with the preemption
concern that undergirds our § 101 jurisprudence. Given the
ubiquity of computers, wholly generic computer
implementation is not generally the sort of "additional
feature [ e]" that provides any "practical assurance that the
process is more than a drafting effort designed to monopolize
the [abstract idea] itself."
Alice Corp. Pty. Ltd., 134 S.Ct. at 2358 (citations omitted).
"[T]he relevant question is whether the claims here do more than
simply instruct the practitioner to implement the abstract idea [] on a generic
computer." Alice Corp. Pty. Ltd., 134 S.Ct. at 2359. They do not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to receive data, populate a data structure, and calculate a price
amounts to electronic data processing---one of the most basic functions of a
computer. All of these computer functions are well-understood, routine,
conventional activities previously known to the industry. In short, each step
does no more than require a generic computer to perform generic computer
functions. The limitations of a processor, communications device and
storage device only recite components of any general purpose computer.
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Considered as an ordered combination, the computer components of
petitioner's method add nothing that is not already present when the steps
are considered separately. Viewed as a whole, petitioner's device claims
simply recite the concept of security pricing as performed by a generic
computer. The device claims do not, for example, purport to improve the
functioning of the computer itself. Nor do they effect an improvement in
any other technology or technical field. Instead, the claims at issue amount
to nothing significantly more than an instruction to apply the abstract idea of
security pricing using some unspecified, generic computer. Under our
precedents, that is not enough to transform an abstract idea into a patent-
eligible invention. See Alice Corp. Pty. Ltd., 134 S.Ct. at 2360.
We are not persuaded by Appellants' argument that
while each individual step recited in Claim 32 could
theoretically be performed by a conventional computing
system, the operations recited in Claim 32 combine to create an
ordered combination that is not well- understood, routine, or
conventional and that is not previously known to the industry.
Additionally, these specific features are other than what is well-
understood, routine, and conventional in the field. For example,
no cited references disclose or suggest the above elements of
Claim 32 as recited in the overall combination of the claim.
Therefore, these specific features clearly cannot be considered
well-understood, routine, and conventional in the field.
App. Br. 11. A combination of data structures on which the price of a
security is in some un-recited fashion is based is as a matter of notoriously
well known fact entirely conventional. Appellants apparently mean to
assign weight to the uniqueness of the combination of particular data
elements populated in the data structures. Such a list of data for use is no
more than conceptual advice as to what data would be useful in forming a
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price, and the claim does no more than attach labels for mental perception to
each of the data elements. The claim recites no manner in which the data are
actually used in some manner dictated by that label, or any manner of use at
all for that manner. The claim instead recites that a price is calculated on
some unrecited basis from some subset of the data. So, again, this is simply
advice to somehow form a price using some of this data. This claim is so
preemptive that simply displaying the data content, receiving someone's
judgement as to a price based on the viewed data, and computing a price as
the assignment of that received price is within the claim scope.
We are not persuaded by Appellants' argument that this case is similar
to DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed Cir 2014).
App. Br. 12. This claim does not even refer to the internet and it does not
solve a problem created by computer technology. This invention performs a
price calculation that can also be done with paper and pencil.
We are not persuaded by Appellants' argument that the claim recites
particular computer components. App. Br. 13. As discussed supra, the
recited components are conventional in any general purpose computer and
are used to do only the expected functions of such components.
We are not persuaded by Appellants' argument that "[ w ]hen viewed as
a whole, Claim 32 clearly recites significantly more than simply pricing
convertible securities. These recited claim elements are more than sufficient
to show that the claims amount to significantly more than an attempt to
patent the alleged abstract idea." Id. This argument does not explain why
claim 32 recites significantly more and so is entirely conclusory.
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Claim 32 rejected under 35 U.S.C. § 103(a) as unpatentable over
Galant, Birle, Green, Daughtery, and Ross
Much of this claim remains the same as in the prior appeal and the
issues related to those portions were resolved in that appeal. Issue
preclusion keeps those issues from being resurrected, except to the extent the
changes affect the meaning and interpretation of those portions. The only
change to claim 32 is the insertion of the following additional convertible
note information into the second data structure in limitation [ 4]: "conversion
conditions identifying circumstances under which the convertible note may
be converted, and an opportunistic remarketing period during which the
issuer of the unit has discretion to perform at least one of a capped and
uncapped remarketing." Appellants' arguments are directed exclusively to
this newly added limitation.
We first find that this additional recital does not define or even narrow
the manner or implementation of identifying of circumstances, the scope of
such circumstances, the nature of such conditions or how such conditions are
expressed. More problematic for Appellants is that the recited remarketing
period is again a period of time entered in a data structure. A period of time
in a data structure does not inherently have any relation to remarketing or
discretion. Thus, simply entering a one character code and a single date is
within the scope of these two additions. Interpretation may reside
exclusively within the mind of the beholder and still be within the scope of
these limitations.
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We further find that the pricing recited in limitation [7] is based on
forward information in the first data structure, convertible note information
in the second data structure, equity security financial information in the third
data structure, and issuer identifier financial information in the fourth data
structure. This limitation does not specify which parts of the forward
information, convertible note information, equity security financial
information, and issuer identifier financial information are used and
certainly does not recite that all parts are used. This limitation is therefore
no more than basing pricing on some forward information in the first data
structure, some convertible note information in the second data structure,
some equity security financial information in the third data structure, and
some issuer identifier financial information in the fourth data structure.
Thus, there is no recital that the particular additions, supra, to convertible
note information are among the portion of the convertible note information
in the second data structure relied on in pncmg.
The Examiner cited Green, Daughtery, and Ross to show it was
known to attach conditions for conversion and to have capped and uncapped
remarketing of such securities and to attach dates to circumscribe when
certain such events are permitted. As these references are clear in such
regard, it is not such knowledge that Appellants contest. Rather, Appellants
contend that the references fail to describe a data structure that contains such
information. App. Br. 20-23.
The problem Appellants have with this argument is that one of
ordinary skill in the programming arts, indeed anyone in an introductory
programming course, knows that you have to have physical data to represent
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the conceptual data one is working with, and this requires some form of data
structure. The originally filed disclosure does not suggest any advantages to
filling four data structures in the particular manner recited, and indeed does
not mention data structures as such and populating them at all. Thus, once it
is shown that it was known to take the factors added in the amendment into
consideration for convertible instruments, which is uncontested, it inherently
followed that the only way to do so in a computer automation environment
was by populating data structures with such data.
As to the argument regarding the number of references cited (App. Br.
21 ), Appellants admit that this in itself is unpersuasive. In any event, this is
not an instance where five disparate references are pieced together like
Flopsy, but an instance in which a complex instrument such as a convertible
security has many facets, and often any given reference only discusses a
portion. Thus, this is a case of using five references to put the picture of the
whole together from references each describing parts of that whole. This is
not an indication of hindsight. It is an indication of complexity of something
already known.
Claims 34-39 and 41--47 rejected under 35 U.S.C. § 103(a) as
unpatentable over Gal ant, Birle, Green, Daughtery, Ross, Zivan, Barron's
Financial Dictionary, and Admitted Prior Art
Claim 34 adds a datum of a contract fee. Claim 41 adds data of dates
associated with at least one capped remarketing and a date associated with
an uncapped remarketing. Claim 43 adds a datum of a number of warrants
distributed. Claim 44 adds a datum regarding an issuer call option. Claim
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45 adds data of an initial share price, an initial share conversion price, an
initial share conversion premium, and a share conversion ratio.
Claims 35-39 further describe the contract fee, the number of shares,
and the interest rate. Claim 42 adds that a contingency is associated with the
note. These claims do not recite that these data items are used in the claim
32 pricing.
Claim 46 adds that pricing is based on prior historical convention and
claim 4 7 adds software instructions to execute on a computer.
First, we find these limitations are unchanged from the prior appeal
and the addition to parent claim 32 has no effect on the issues related to
these claims. Thus, the issues related to these claims were resolved in the
prior appeal and the arguments presented here are subject to issue
preclusion.
We adopt the Examiner's findings and analysis from Final Act. 7-9
and reach similar legal conclusions.
As to claims 34, 41, 43, and 44, Appellants do not contest the
Examiner's findings that the informational content of these limitations were
known, but instead contest the Examiner's decision to afford them no
patentable weight. App. Br. 25. Again, Appellants do not contest that the
data referred to were known.
To fully appreciate the Examiner's findings regarding patentable
weight, we first recall that the parent claim, and therefore all of the
dependent claims are directed to structural rather than procedural subject
matter.
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As to structural inventions, such claims must be distinguished from
the prior art in terms of structure rather than function, see, e.g., In re
Schreiber, 128 F.3d 1473, 1477-78 (Fed. Cir. 1997). In order to satisfy the
functional limitations in an apparatus claim, however, the prior art apparatus
as disclosed must be capable of performing the claimed function. Id. at
1478. When the functional language is associated with programming or
some other structure required to perform the function, that programming or
structure must be present in order to meet the claim limitation. Typhoon
Touch Techs., Inc. v. Dell, Inc., 659 F.3d 1376, 1380 (Fed. Cir. 2011)
(discussing Microprocessor Enhancement Corp. v. Texas Instruments, Inc.,
520 F.3d 1367 (Fed. Cir. 2008)). In some circumstances generic structural
disclosures may be sufficient to meet the functional requirements, see Ergo
Licensing, LLC v. CareFusion 303, Inc., 673 F.3d 1361, 1364 (Fed. Cir.
2012) (citing Telcordia Techs., Inc. v. Cisco Sys., Inc., 612 F.3d 1365,
1376-77 (Fed. Cir. 2010)).
Also, a structural invention is not distinguished by the work product it
operates upon, such as data in a computer. "[E]xpressions relating the
apparatus to contents thereof during an intended operation are of no
significance in determining patentability of the apparatus claim." Ex parte
Thibault, 164 USPQ 666, 667 (Bd. App. 1969). Furthermore, "inclusion of
the material or article worked upon by a structure being claimed does not
impart patentability to the claims." In re Otto, 312 F.2d 937, 940 (CCPA
1963).
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The data referred to in these limitations are identified by labels but are
otherwise not narrowed. Nothing in the claim depends on or enforces the
perceptual labels the claim suggests. Mental perceptions of what data
represents are non-functional and given no weight. King Pharm., Inc. v.
Eon Labs, Inc., 616 F.3d 1267, 1279 (Fed. Cir. 2010) ("[T]he relevant
question is whether 'there exists any new and unobvious functional
relationship between the printed matter and the substrate.'") (citations
omitted). See also In re Lowry, 32 F.3d 1579, 1583 (Fed.Cir.1994)
(describing printed matter as "useful and intelligible only to the human
mind") (quoting In re Bernhart, 417 F.2d 1395, 1399 (CCPA 1969)). Data
labels are just examples of such mental perceptions. Data, being a
succession of binary digits, are just those digits, not perceptual labels of
those digits. The binary digits may impose some functional consequence,
but absent some recitation of how so, such consequence is not an issue.
No structure per se is recited in these claims and the only functions
recited are those in the parent claim 32, which include data entry and storage
and price calculation. As no particular data storage format is recited, text
files are within the scope of the data entry and storage which any general
purpose computer, including those described in the prior art, are able to
perform as part of the operating system capacity. And, as we found supra
with regard to the statutory subject matter rejection, as no price calculation
algorithm is recited, simply displaying the data and receiving someone's
judgement as to what the price should be is also within the scope of the price
calculation limitation as the mathematical operator of assignment is a
calculation operator. Again this is within the capacity of any general
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purpose computer. Thus, the Examiner's finding as to patentable weight is
supported by the capacity of any general purpose computer to perform the
recited functions.
The findings as to lack of patentable weight are also supported by the
fact that the claims to no more than store labelled binary data and perform
some calculation with some of that data, which again, any general purpose
computer does. As we found supra, the labels are non-functional, being
merely vehicles for instilling mental perceptions. Nor do the labels narrow
the pricing calculation as no algorithm is recited that would depend on the
perception induced by such labels.
As to claim 46, Appellants contest whether this limitation was
described in the admitted prior art. App. Br. 26. Claim 46 recites:
The device of claim 32, further comprising instructions to
be executed by said processor to:
retrieving [sic, retrieve] financial information associated
with previous issuers of convertible instruments; and
using [sic, use] the financial information nation
associated with previous issuers of convertible instruments
during generation of the pricing data associated with the
proposed unit.
The Examiner finds that Green described this in the prior appeal and
Appellants did not contest this finding. Appeal Decision mailed Sept. 30,
2013 at 14:23-24. Thus we will not relitigate this issue.
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As to claim 38, Appellants contest Examiner's finding as to design
choice. Claim 38 recites:
The device of claim 32, wherein the number of shares
received by the holder as a result of the forward transaction is
reduced if the value of the equity security increases.
As this limitation does not alter the structure or function of parent
claim 32, the Examiner's finding that simply asserting some factor that is not
part of the claimed structure and does not affect its function is an obvious
matter of design choice.
CONCLUSIONS OF LAW
The rejection of claims 32, 34--39, and 41--47 under 35 U.S.C. § 101
as directed to non-statutory subject matter is proper.
The rejection of claim 32 under 35 U.S.C. § 103(a) as unpatentable
over Galant, Birle, Green, Daughtery, and Ross is proper.
The rejection of claims 34--39 and 41--47 under 35 U.S.C. § 103(a) as
unpatentable over Galant, Birle, Green, Daughtery, Ross, Zivan, Barron's
Financial Dictionary, and Admitted Prior Art is proper.
DECISION
The rejection of claims 32, 34--39, and 41--47 is affirmed.
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No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(l)(iv) (2011).
AFFIRMED
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