Ex Parte Nangalia et alDownload PDFPatent Trial and Appeal BoardMay 25, 201712133139 (P.T.A.B. May. 25, 2017) Copy Citation 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. 1 Appeal 2015-004142 Application 12/133,139 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 2 Appeal 2015-004142 Application 12/133,139 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 3 Appeal 2015-004142 Application 12/133,139 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 4 Appeal 2015-004142 Application 12/133,139 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. 5 Appeal 2015-004142 Application 12/133,139 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 6 Appeal 2015-004142 Application 12/133,139 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. 7 Appeal 2015-004142 Application 12/133,139 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.” 8 Appeal 2015-004142 Application 12/133,139 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 9 Appeal 2015-004142 Application 12/133,139 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. 10 Appeal 2015-004142 Application 12/133,139 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 11 Appeal 2015-004142 Application 12/133,139 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 12 Appeal 2015-004142 Application 12/133,139 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. 13 Appeal 2015-004142 Application 12/133,139 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 14 Copy with citationCopy as parenthetical citation