Ex Parte Nangalia et al

Patent Trial and Appeal Board

May 25, 2017

12133139 (P.T.A.B. May. 25, 2017)

United States Patent and Trademark Office
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O.Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
12/133,139 06/04/2008 Rishi Nangalia GOLDl 1-00270 9082
132787 7590
Docket Clerk-GOLD
P.O. Drawer 800889
Dallas, TX 75380
05/30/2017 EXAMINER
PUTTAIAH, ASHA
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
05/30/2017 ELECTRONIC
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address(es):
j ohn. maxin @ gs. com
patents @ munckwilson. com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte RISHINANGALIA, JOHN MAHONEY,
and DEBRA L. RIBAUDO
Appeal 2015-004142
Application 12/133,1391
Technology Center 3600
Before, MURRIEL E. CRAWFORD, JOSEPH A. FISCHETTI, and BRUCE
T. WIEDER, Administrative Patent Judges.
FISCHETTI, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants seek our review under 35 U.S.C. § 134 of the Examiner’s
final rejection of claims 55—62. We have jurisdiction under 35 U.S.C.
§ 6(b).
1 Appellants identify Goldman, Sachs & Co. of New York, NY as the real
party in interest. Br. 2.
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SUMMARY OF DECISION
We AFFIRM.
THE INVENTION
Appellants claim methods and apparatus for processing and routing
securities orders. Specification 1:5-6.
Claim 55 reproduced below, is representative of the subject matter
on appeal.
55. An apparatus comprising:
a processor; and
a storage device in communication with said processor and
storing instructions to be executed by said processor to:
determine during a trading session a percentage of total market
volume in a particular security handled during the trading session by a
securities exchange or electronic communication network (ECN); and
determine during the trading session, based at least in part on
the determined percentage of total market volume, at least one of: (a)
whether to route an order to the securities exchange or ECN, and (b) a
proportion of the order to allocate to the securities exchange or ECN.
THE REJECTION
The Examiner relies upon the following as evidence of
unpatentability:
Waelbroeck US 2002/0010672 A1 Jan. 24, 2002
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The following rejections are before us for review.
Claims 55-62 are rejected under 35 U.S.C. § 103(a) over Waelbroeck.
Claims 55-62 are rejected under 35 § U.S.C. 101.
ANALYSIS
35 U.S.C. § 103(a) REJECTION
Each of independent claims 55 and 58 require in one form or another:
determine during a trading session a percentage of total market
volume in a particular security handled during the trading session by a
securities exchange or electronic communication network (ECN); and
determine during the trading session, based at least in part on the
determined percentage of total market volume, at least one of: (a) whether to
route an order to the securities exchange or ECN, and (b) a proportion of
the order to allocate to the securities exchange or ECN.
Appellants argue,
Claim 55 also recites, in part, “determine during
the trading session, based at least in part on the
determined percentage of total market volume, at
least one of: (a) whether to route an order to the
securities exchange or ECN, and (b) a proportion
of the order to allocate to the securities exchange
or ECN.” Waelbroeck does not, in fact, determine
whether to route an order or a proportion of an
order to an exchange or ECN. Instead, Waelbroeck
uses auction systems to match orders (see e.g.,
Waelbroeck: [0092]). At best Waelbroeck uses the
ECNs as a data source to verify users' historical
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and current trading interests (see e.g., Waelbroeck:
[0025]).
(Appeal Br. 5).
The Examiner, however, found that Walebroeck discloses:
a proportion of the order to allocate to the
securities exchange or ECN. (See at least
Waelbroeck, [0027-0028] notification parameters,
orders placed in response, partial full execution,
different specifications for different securities and
different users wherein partial, full execution and
different specifications for different entities is akin
to a proportion of the order to allocate)
(Final Act. 6).
We agree with Appellants. Our review of Waelbroeck at paragraphs
27 and 28 reveals that, at best, Waelbroeck discloses limiting CTI (certified
trading interest) notifications
to initiating interests over 100,000 shares for
certain securities and 500,000 shares for others. In
a preferred embodiment the notification
parameters can be modified by the user at any
time, and can be on the basis of order size,
security, identity of initiating user, or statistics
regarding the initiating user's activity history.
Para. 28. We do not find that limiting notification of initiating interests at
various number of shares 100,000 or 500,000 equates to determine during
the trading session, based at least in part on the determined percentage of
total market volume, at least one of: (a) whether to route an order to the
securities exchange or ECN, and (b) a proportion of the order to allocate to
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the securities exchange or ECN. According to Waelbroeck, “[b]ecause there
is often no way for a market participant to verify an expressed trading
interest or to know which other market participants have a history of
unscrupulous trading behavior, all prices must incorporate the possibility of
such behavior.” Para. 6. Waelbroeck is concerned with trader authenticity
and not with optimizing routing. Thus, Waelbroeck at paragraph 3,
discloses the need for a "certified trading interest" which “describe[s] a
trading interest that has been verified as genuine and certified as such by
some trusted third party.” In contrast, the Specification describes,
“[e]xisting securities order processing and routing systems may make
routing decisions based on current order book conditions at various potential
order destinations such as securities exchanges, market makers or specialists,
and/or ECNs (Electronic Communication Networks). Specification 1:8-11.
We fail to see how Waelbroeck’s disclosure of limiting notification of
initiating interests at various number of shares e.g., 100,000 or 500,000,
meets the claimed routing requirements set forth above. Thus, because the
CTI notification parameters based on various share break-downs disclosed
by Waelbroeck do not cause allocation of orders to be routed to various
different systems, we do not sustain the rejection of these independent
claims based on Waelbroeck.
Since claims 56, 57, 59, and 60 depend from one of claims 55 and 58
and since we cannot sustain the rejection of claims 55 and 58, the rejection
of claims 56, 57 59, and 60 likewise cannot be sustained.
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Independent claim 61 requires,
determine during a trading session at least one
attribute of a securities exchange or electronic
communication network (ECN), wherein the
determined at least one attribute is selected from
the group consisting of: (a) an average amount of
time that the securities exchange or ECN offered a
price for the particular security at least as good as
other order destinations; (b) a percentage of the
trading session during which the securities
exchange or ECN offered a price for the particular
security at least as good as other order
destinations; and (c) an average amount of time
required during the trading session for the
securities exchange or ECN to match a price
offered for the particular security by another order
destination; ....
The Examiner found concerning this limitation: “(See at least
Waelbroeck. Fig. 1, Fig. 3, [0011-0013], dissemination, targeted
dissemination, [0026-0030] CTI Manager [0096] actively routes orders
for a possible match [0096-0098] route to where better price available ..
choice of destination based on CTI information).” (Final Act. 9-10).
Appellants argue:
The rejection acknowledges that Waelbroeck does
not disclose this limitation of claim 61. However,
the rejection alleges that a "certified trading
interest" is the functional equivalent of "an
attribute of the securities exchange of ECN." Even
if arguendo, Waelbroeck's "certified trading
interest" is the functional equivalent of "an
attribute of the securities exchange of ECN," a
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certified trading interest is not equivalent to any of
"(a) an average amount of time that the securities
exchange or ECN offered a price for the particular
security at least as good as other order
destinations; (b) a percentage of the trading session
during which the securities exchange or ECN
offered a price for the particular security at least as
good as other order destinations; and (c) an
average amount of time required during the trading
session for the securities exchange or ECN to
match a price offered for the particular security by
another order destination," as recited in claim 61.
(Appeal Br. 7.)
We agree with Appellants. Waelbroeck at paragraph 3 discloses “the
term ‘certified trading interest’ is used herein to describe a trading interest
that has been verified as genuine and certified as such by some trusted third
party.” Waelbroeck at paragraph 96 does disclose routing based on CTI
matches, but we do not see where any of the limitations (a), (b), or (c),
supra, is disclosed or suggested in Waelbroeck’s matching trading interests
that have been verified as genuine and certified as such by some trusted third
party. Each of items (a), (b), and (c) is generally directed to offering price
by order destinations, or percentage of trading session, or an average amount
of time to match price, without mention of any certification as verified. We
therefore will not sustain the rejection of claim 61.
Since claim 62 depends from claim 61, and since we cannot sustain
the rejection of claim 61, the rejection of claim 62 likewise cannot be
sustained.
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Rejection under 35 U.S.C. § 101 as Reciting an Abstract Idea
Claims 55 and 58 are directed to two steps, viz.
determine during a trading session a percentage of
total market volume in a particular security
handled during the trading session by a securities
exchange or electronic communication network
(ECN); and
determine during the trading session, based at
least in part on the determined percentage of total
market volume, at least one of: (a) whether to
route an order to the securities exchange or ECN,
and (b) a proportion of the order to allocate to the
securities exchange or ECN.
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.”
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Alice Corp., Pty. Ltd. v CLSBanklnt’l, 134 S. Ct. 2347, 2355 (2014)
(citations omitted) (citing Mayo Collaborative Servs. v. Prometheus Labs.,
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.
While the Court in Alice made a direct finding as to what the claims were
directed to, we find that this case’s claims themselves and the Specification
provide enough information to inform one as to what they are directed to.
The two steps in claim 55 result in determining one of, (a) whether to
route an order to the securities exchange or ECN, and (b) a proportion of the
order to allocate to the securities exchange or ECN. The Specification
describes “routing decisions based only on current order book conditions
and/or on historical data that has customarily been used may not optimize
trading performance.” Specification 1:15-17. The Specification also
describes known “routing decisions based on current order book conditions
at various potential order destinations such as securities exchanges, market
makers or specialists, and/or ECNs (Electronic Communication Networks).”
Specification 1:8-11. Thus, all this evidence shows that claim 1 is directed
to determining which route to use to optimize trades in security markets.
It follows from prior cases, and Electric Power Grp., LLC v. Alstom S.A.,
830 F.3d 1350, 1353—54 (Fed. Cir. 2016) in particular, that the claims at
issue here are directed to an abstract idea. The selection of trading
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destinations like the concept of intermediated settlement is a fundamental
economic practice long prevalent in our system of commerce. Using one of
various trading order destinations is a fundamental building block of the
world economy because providing plural trading routes increases throughput
of the trades. Alice, 134 S. Ct. at 2357. Collecting information and
processing it through algorithms, such as in determining a processing route
which optimizes trading performance to different destinations 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 performing a mathematical algorithm and the
concept of trade routing decisions based on current order book conditions 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. That
the claims do not preempt all forms of the abstraction or may be limited to
the abstract idea in the financial instrument setting do not make them any
less abstract. See OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359,
1360—1361 (Fed. Cir. 2015). Perhaps more to the point, claim 55 does no
more than offer a determination as to where to route a trade, and that is the
epitome of abstraction.
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The subject matter of claim 61 requires further abstract steps as requiring
one of three possible conditions,
wherein the determined at least one attribute is
selected from the group consisting of: (a) an
average amount of time that the securities
exchange or ECN offered a price for the particular
security at least as good as other order
destinations; (b) a percentage of the trading
session during which the securities exchange or
ECN offered a price for the particular security at
least as good as other order destinations; and (c)
an average amount of time required during the
trading session for the securities exchange or ECN
to match a price offered for the particular security
by another order destination; ....
Like the limitations discussed supra, with claims 55 and 58, these
alternative limitations are nothing more than an abstraction, i.e., mental
exercise of determining time averages and percentages in conjunction with
routing an order destination based on certain performance conditions to
optimize trading performance.
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 ‘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
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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 (alterations in original) (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 take in data and compute a result from a database to make a
determination amounts to electronic data query and retrieval—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.
Considered as an ordered combination, the computer components of
Appellants’ claims add nothing that is not already present when the steps are
considered separately. Viewed as a whole, Appellants’ claims simply recite
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the concept of determining a processing route which optimizes trading
performance to different destinations, as performed by a generic computer.
The 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
determining a processing route which optimizes trading performance to
different destinations, using a 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.
As to the structural claims, they
are no different from the method claims in substance. The
method claims recite the abstract idea implemented on a generic
computer; the system claims recite a handful of generic
computer components configured to implement the same idea.
This Court has long “wam[ed] ... against” interpreting § 101 “in
ways that make patent eligibility ‘depend simply on the
draftsman’s art.’
Alice Corp. Pty. Ltd. 134 S. Ct. at 2360 (alterations in original).
CONCLUSIONS OF LAW
We conclude the Examiner did err in rejecting claims 55-62 under 35
U.S.C. § 103(a).
We conclude the Examiner did not err in rejecting claims 55-62 under
35 U.S.C. § 101.
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DECISION
The decision of the Examiner to reject claims 55-62 is affirmed.
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).
AFFIRMED
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