Ex Parte NASSIF et al

Patent Trials and Appeals BoardApr 22, 2019

13484569 - (D) (P.T.A.B. Apr. 22, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. FILING DATE FIRST NAMED INVENTOR 13/484,569 05/31/2012 Nathan Joseph NASSIF 30636 7590 04/22/2019 FAY KAPLUN & MARCIN, LLP 150 BROADWAY, SUITE 702 NEW YORK, NY 10038 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. 40144/00502 6069 EXAMINER NORMAN, SAMICA L ART UNIT PAPER NUMBER 3697 MAIL DATE DELIVERY MODE 04/22/2019 PAPER Please find below and/or attached an Office communication concerning this application or proceeding. The time period for reply, if any, is set in the attached communication. PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte NATHAN JOSEPH NASSIF, MICHAEL MARKOV, MICHAEL CHIDLOVSKY, and ALEXEY P ANCHECKHA Appeal2018-000582 Application 13/484,569 Technology Center 3600 Before BIBHU R. MOHANTY, NINA L. MEDLOCK, and AMEE A. SHAH, Administrative Patent Judges. SHAH, Administrative Patent Judge. DECISION ON APPEAL 1 The Appellants2 appeal under 35 U.S.C. Â§ 134(a) from the Examiner's final decision rejecting claims 1-20 under 35 U.S.C. Â§ 101 as being directed to a judicial exception without significantly more. We have jurisdiction under 35 U.S.C. Â§ 6(b ). We AFFIRM. 1 Throughout this Decision, we refer to the Appellants' Appeal Brief ("Appeal Br.," filed May 1, 2017), Reply Brief ("Reply Br.," filed Oct. 24. 2017), and Specification ("Spec.," filed May 31, 2012), and to the Examiner's Answer ("Ans.," mailed Aug. 24, 2017) and Final Office Action ("Final Act.," mailed Jan. 12, 2017). 2 According to the Appellants, the real party in interest is Markov Processes International, LLC. Appeal Br. 2. Appeal2018-000582 Application 13/484,569 STATEMENT OF THE CASE The Appellants' invention "relates to systems and methods for quantifying similarities between various financial instruments. Specifically, the exemplary systems and methods described herein relate to measuring a degree of similarity between several financial instruments using a 'factor intersection' metric." Spec,r 10. Claims 1, 13, and 16 are the independent claims on appeal. Claim 1 (Appeal Br. 18 (Claims App.)), is illustrative of the subject matter on appeal and is reproduced below (with added bracketing for reference): 1. A method, comprising: [ (a)] selecting, by a processor of a computer device, a model for factor intersection calculation of a two or more of financial instruments, the model including a plurality of factors; [ (b)] determining, by the processor, factor exposure values for first and second financial instruments on each of the factors; [(c)] determining, by the processor, a degree of similarity between the factor exposure values based on the selected model; and [ ( d)] generating, by the processor, a factor intersection result between the factor exposure values, wherein the factor intersection result includes the degree of similarity and at least one of an overlap amount and a non-overlap amount. ANALYSIS The Appellants argue claims 1-20 as a group. See Appeal Br. 4, 16. We select claim 1 from the group with claims 2-20 standing or falling therewith. See 37 C.F.R. Â§ 4I.37(c)(l)(iv). An invention is patent-eligible if it claims a "new and useful process, machine, manufacture, or composition of matter." 35 U.S.C. Â§ 101. 2 Appeal2018-000582 Application 13/484,569 However, the Supreme Court has long interpreted 35 U.S.C. Â§ 101 to include implicit exceptions: "[l]aws of nature, natural phenomena, and abstract ideas" are not patentable. E.g., Alice Corp. Pty. Ltd. v. CLS Bank Int 'l, 573 U.S. 208,216 (2014) (internal quotation marks and citation omitted). In determining whether a claim falls within an excluded category, we are guided by the Supreme Court's two-step framework, described in Mayo and Alice. Id. at 217-18 ( citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 75-77 (2012)). In accordance with that framework, we first determine what concept the claim is "directed to." See Alice, 573 U.S. at 219 ("On their face, the claims before us are drawn to the concept of intermediated settlement, i.e., the use of a third party to mitigate settlement risk."); see also Bilski v. Kappas, 561 U.S. 593, 611 (2010) ("Claims 1 and 4 in petitioners' application explain the basic concept of hedging, or protecting against risk."). Concepts determined to be abstract ideas, and thus patent ineligible, include certain methods of organizing human activity, such as fundamental economic practices (Alice, 573 U.S. at 219-20; Bilski, 561 U.S. at 611 ); mathematical formulas (Parker v. Flook, 437 U.S. 584, 594--95 (1978)); and mental processes (Gottschalkv. Benson, 409 U.S. 63, 67 (1972)). Concepts determined to be patent eligible include physical and chemical processes, such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 192 (1981) ); "tanning, dyeing, making water-proof cloth, vulcanizing India rubber, smelting ores" (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S. 252, 267---68 (1853))); and manufacturing flour (Benson, 409 U.S. at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))). 3 Appeal2018-000582 Application 13/484,569 In Diehr, the claim at issue recited a mathematical formula, but the Supreme Court held that "[a] claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula." Diehr, 450 U.S. at 187; see also id. at 191 ("We view respondents' claims as nothing more than a process for molding rubber products and not as an attempt to patent a mathematical formula."). Having said that, the Supreme Court also indicated that a claim "seeking patent protection for that formula in the abstract ... is not accorded the protection of our patent laws, ... and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment." Id. ( citing Benson and Flook); see, e.g., id. at 187 ("It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection."). If the claim is "directed to" an abstract idea, we tum to the second step of the Alice and Mayo framework, where "we must examine the elements of the claim to determine whether it contains an 'inventive concept' sufficient to 'transform' the claimed abstract idea into a patent-eligible application." Alice, 573 U.S. at 221 ( citation omitted). "A claim that recites an abstract idea must include 'additional features' to ensure 'that the [claim] is more than a drafting effort designed to monopolize the [abstract idea]."' Id. ( quoting Mayo, 566 U.S. at 77). "[M]erely requir[ing] generic computer implementation[] fail[ s] to transform that abstract idea into a patent-eligible invention." Id. The PTO recently published revised guidance on the application of Â§ 101. 2019 REVISED PA TENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 4 Appeal2018-000582 Application 13/484,569 84 Fed. Reg. 50 (Jan. 7, 2019) ("2019 Revised Guidance"). Under the 2019 Revised Guidance, we first look to whether the claim recites: (1) any judicial exceptions, including certain groupings of abstract ideas (i.e., mathematical concepts, certain methods of organizing human activity such as a fundamental economic practice, or mental processes); and (2) additional elements that integrate the judicial exception into a practical application (see MANUAL OF PATENT EXAMINING PROCEDURE (MPEP) Â§ 2106.05(a}-(c), (e}-(h) (9th Ed., Rev. 08.2017, Jan. 2018)). Only if a claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application, do we then look to whether the claim: (3) adds a specific limitation beyond the judicial exception that is not "well-understood, routine, conventional" in the field (see MPEP Â§ 2106.05(d)); or ( 4) simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception. See 2019 Revised Guidance. Step One of the Mayo/Alice Framework Under the first step of the Mayo/Alice framework and Step 1 of Office Guidelines (see 2014 Interim Guidance of Patent Subject Matter Eligibility, 79 Fed. Red. 74619, 74621 (Dec. 16, 2014)), the Examiner first determines that the independent claims recite a process and product/apparatus, two of the categories of statutory subject matter. See Final Act. 2; Ans. 5. Under the first step of the Mayo/Alice framework and Step 2A of Office Guidelines (Prong 1 of the 2019 Revised Guidelines, 84 Fed. Reg. at 54), the Examiner determines that "the steps of the claim collectively correspond the concept of calculation and comparison (See In re Alice - mathematical relationships/formula), which is considered to be an abstract 5 Appeal2018-000582 Application 13/484,569 idea inasmuch as such activity involves comparing two securities having similar profile (specification 1][02-03)," and citing judicial decisions, determines the concept "relate[ s] to fundamental economic practice (In re Alice, Arbitrage), organizing human activity, and mathematical relationships/formula (model and using it to calculate comparison), (see July 2015 Update: Interim Eligibility Guidance pages 4--7 for abstract idea found by the court) in which court have found not eligible." Ans. 6-7. The Appellants first contend, in the Appeal Brief at page 6, that the Examiner fails to explain, per Office Guidelines issued in May 2016, "'why [the purported abstract idea] corresponds to a concept that the courts have identified as an abstract idea,' as required by the USPTO." However, we note that under the 2019 Revised Guidance, there is no such requirement that the Examiner cite to and explain the correspondence to judicial decisions. 3 Moreover, the Examiner further explains the relevance of judicial decisions in the Answer at pages 7-8 in a manner that notifies the Appellants of the reasons for the rejection in a sufficiently articulate and informative manner as to meet the notice requirement of 35 U.S.C. Â§ 132. See In re Jung, 637 F.3d 1356, 1362 (Fed. Cir. 2011). The Appellants further contend that the Examiner's determination is in error because "the Examiner is incorrectly simplifying the claims," and "the claims are not directed to a mere mathematical formula, but rather, the claims are directed to a new and improved way of measuring a degree of similarity between several financial instruments to solve problems arising in 3 The 2019 Revised Guidance "applies to all applications, and to all patents resulting from applications, filed before, on, or after January 7, 2019." 2019 Revised Guidance, 84 Fed. Reg. at 50. 6 Appeal2018-000582 Application 13/484,569 investment selection and allocation decisions among financial instruments." Reply Br. 2; See also Appeal Br. 8-11. An examination of the claims shows that independent claim 1 recites "[a] method, comprising:" (a) a computer processor selecting a model including a plurality of factors; (b) the processor determining factor exposure values for first and second financial instruments; ( c) the processor determining a degree of similarity between the factor exposure values based on the selected model; and ( d) the processor generating a factor intersection result between the factor exposure values, including the degree and an overlap or non-overlap amount. See Appeal Br. 18 (Claims App.). The processor for performing the claimed functions is a generic processor in a general purpose computer device. See Spec. ,r 25, Fig. 1. The Specification provides "[ w ]hen making investment selection and allocation decisions among various financial instruments, such as individual securities or portfolios, it is important to understand how these instruments relate to each other, how similar or dissimilar they are." Spec. ,r 2. The Specification further provides that "the exemplary systems and methods described herein relate to measuring a degree of similarity between several financial instruments using a 'factor intersection' metric." Id. ,r 10. The claim recites the results of the functions without providing details on how, i.e., by what algorithm or on what basis/method, the processor performs the steps/functions of (a) selecting a model, (b) determining values, ( c) determining a similarity degree, and ( d) generating a result. The Specification provides no further technological details. For example, the Appellants cite to paragraphs 30, 38, 40, and 43 as support for the claimed steps. Appeal Br. 2. However, there is no discussion of how, 7 Appeal2018-000582 Application 13/484,569 technologically or by what algorithm, a model is selected. Similarly, paragraphs 3 8 and 40 discuss computing factor exposures and factor intersection data and that there are a wide range and multiple type of multifactor model types used in finance analysis, but do not discuss how the factors are determined. And paragraph 43 provides that a factor intersection map is generated based on the results, but does not discuss how, technologically or by what algorithm, a result or a map is generated. Thus, the claim, under the broadest reasonable interpretation of the claim limitations, recites a method for measuring a degree of similarity between financial instruments by selecting a model, determining values and a similarity degree by any analysis, and generating an intersection result by any analysis. 4 The limitations of selecting, determining, and generating are mental processes and activities that are ordinarily performed in selecting items such as financial instruments. Measuring a degree of similarity between financial instruments, or as the Appellants characterize the claim, a "new and improved way of measuring a degree of similarity between several financial instruments," (Reply Br. 2), is similar to the concepts of "selecting certain information, analyzing it using mathematical techniques, and reporting or displaying the results of the analysis" in SAP America, Inc. v. InvestPic, LLC, 898 F.3d 1161, 1167 (Fed. Cir. 2018), of "comparing BRCA sequences and determining the existence of alterations" in In re BR CAI - and 4 We note that although the description of the abstract idea may differ slightly from the Examiner's characterization, "[a]n abstract idea can generally be described at different levels of abstraction." Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016). The Board's "slight revision of its abstract idea analysis does not impact the patentability analysis." Id. at 1241. 8 Appeal2018-000582 Application 13/484,569 BRCA2-Based Hereditary Cancer Test Patent Litig., 774 F.3d 755, 763 (Fed. Cir. 2014), and calculating alarm limit values for a specific purpose in Flook, 437 U.S. at 594--95. Accordingly, we conclude the claim recites a way of evaluating information, which is one of the mental processes identified in the 2019 Revised Guidance (84 Fed. Reg. at 52), using a mathematical formula (see id.), and thus an abstract idea. As such, we disagree with the Appellants' contentions that the Examiner oversimplifies the claim. See Reply Br. 2. Under Step 2A, Prong 2 of the 2019 Revised Guidance (84 Fed. Reg. at 54), we look to whether the claims "apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception," i.e., "integrates the ... judicial exception into a practical application." Here, the Appellants contend that the claim is "directed to solving problems arising in investment selection and allocation decisions among financial instruments. The claimed invention is an improvement in automation that allows a processor to measure a degree of similarity between several financial instruments." Appeal Br. 8-9 ( citing Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016)); see also id. at 14. 5 The Appellants similarly contend that the claim is "directed to a new and improved way of measuring a degree of similarity between several financial instruments to solve problems arising in investment selection and 5 We acknowledge that some of these considerations may be properly evaluated under Step 2 of Alice (Step 2B of Office guidance). Solely for purposes of maintaining consistent treatment within the Office, we evaluate them under Step 1 of Alice (Step 2A of Office guidance). See 2019 Revised Guidance, 84 Fed. Reg. at 55. 9 Appeal2018-000582 Application 13/484,569 allocation decisions among financial instruments." Reply Br. 2; see also id. at 4--5. In other words, the Appellants contend that the claim contains "[a]n additional element [that] reflects an improvement in the functioning of a computer, or an improvement to other technology or technical field" as described in the 2019 Revised Guidance (84 Fed. Reg. at 55) as indicative that the elements may have integrated the judicial exception into a practical application. Here, the claimed hardware comprises a conventional component, i.e., a processor in a device, used in its ordinary capacity. See Spec. ,r 25. The Appellants do not contend that they invented the processor or its basic functions or that the processor, claimed generally, was unknown in the art as of the time of the invention. Affinity Labs of Texas, LLC v. Amazon.com, Inc., 838 F.3d 1266, 1270 (Fed. Cir. 2016); see also SAP Am., 898 F.3d at 1170. Unlike Enfzsh (cf Appeal Br. 8-9), where there was a technological improvement in the way computers work, here, there is no such improvement to the processor or device used or to the technological aspects of electronic trading. And unlike Thales Visionix Inc. v. United States, 840 F.3d 1343, 1348--49 (Fed. Cir.) (cf Reply Br. 3) where the improvement was to a physical tracking system, here "the focus of the claim[] is not to a physical-realm improvement but an improvement in wholly abstract ideas- the selection and mathematical analysis of information, followed by reporting or display of the results" (SAP Am., 898 F.3d at 1168). That the invention is related to electronic trading does not necessarily make the claim not abstract. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014) (limiting the use of the abstract idea "to a particular technological environment" does not make the abstract idea patent-eligible) ( citation 10 Appeal2018-000582 Application 13/484,569 omitted). The Appellants' alleged improvement to measuring similarity lies in the abstract idea itself, not to any technological improvement. Further, the Appellants have not provided evidence or reasoning that the "problems arising in investment selection and allocation decisions among financial instruments" are problems "necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks." Appeal Br. 8-9; see also DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2015). The Specification discusses the importance of considering similarities (see Spec. ,r 2) and that "[k ]now ledge of the [ degree of closeness of their fundamental or economic properties] is extremely important in periods of economic shocks and certain extreme segment or sector-specific events" (id. ,r 3). However, there is no discussion of any technological or technology-rooted problems or that the invention addresses anything other than these business problems. See Appeal Br. 15 ("Examiner concedes that the pending claims provide a solution to a business-related or economic problem"). And the purported "improvement in automation" in allowing a processor to measure a degree of similarity (Appeal Br. 9) is unsupported. The claim recites the results of the functions without any implementation details using a conventional processor. There is no indication how the processor itself or "automation" is improved or that the purported solution requires anything other than the processor operating in its ordinary capacity. We disagree with the Appellants' contention that the claim is similar to those of McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016), because "the intended improvements are realized through the use of the claimed rules with computers, rather than human investors." 11 Appeal2018-000582 Application 13/484,569 Appeal Br. 10; see also id. at 11, 14--15; Reply Br. 5. The Appellants do not point to anything in the claims that resembles the improvement to the technical field of computer animation that was not simply the use of a generic computer in McRO. As discussed above, the Specification, including the claim, does not discuss or claim how any technical aspect of the processor is improved. The claim does not recite how the "rules," i.e., the limitations of selecting a model, determining factors, and generating a result (Appeal Br. 11 ), are used to improve an existing technological process. Cf McRO, 837 F.3d at 1314. Regarding the Appellants' argument that the claims are patent-eligible under Alice because "the specific structure of the claimed rules prevents broad preemption of all rules-based means of determining a degree of similarity between financial instruments" (Appeal Br. 11; see also id. at 15; Reply Br. 4 ), although the Supreme Court has described "the concern that drives this exclusionary principle[, i.e., the exclusion of abstract ideas from patent eligible subject matter,] as one of pre-emption" (see Alice, 573 U.S. at 216-17), characterizing preemption as a driving concern for patent eligibility is not the same as characterizing preemption as the sole test for patent eligibility. "The Supreme Court has made clear that the principle of preemption is the basis for the judicial exceptions to patentability" and "[f]or this reason, questions on preemption are inherent in and resolved by theÂ§ 101 analysis." Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (citing Alice, 573 U.S. at 216). Although "preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility." Id. 12 Appeal2018-000582 Application 13/484,569 We also disagree with the Appellants' contention that the claim is similar to those of BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016), because "claim 1 is recited in a specific and unconventional order that results in an improvement in automation in the field of finance." Appeal Br. 13; see also id. at 15, 16; Reply Br. 5---6. The Appellants provide no further arguments how the claim's particular arrangement and/or integration of elements is a technical improvement or is a "non-conventional and non-generic arrangement of known, conventional pieces." BASCOM, 827 F.3d at 1350 ("Filtering content on the Internet was already a known concept, and the patent describes how its particular arrangement of elements is a technical improvement over prior art ways of filtering such content" ( emphasis added)). Thus, we are not persuaded of error in the Examiner's determination that claim 1 is directed to an abstract idea. Step Two of the Mayo/Alice Framework Under the second step in the Mayo/Alice framework, and Step 2B of the 2019 Revised Guidance, we find supported the Examiner's determination that claim 1 's limitations, taken individually or as an ordered combination, do not amount to significantly more than the judicial exception and that the claim recites a processor "performing generic computer functions that are well-understood, routine and conventional activities [that] amount to no more than implementing the abstract idea with a computerized system." Final Act. 4; see also Ans. 8 ( citing In re TL! Commc 'ns LLC Patent Litig., 823 F.3d 607 (Fed. Cir. 2016) and Elec. Power Grp., LLC, v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016)). 13 Appeal2018-000582 Application 13/484,569 To the extent the Appellants contend that the claim recites an inventive concept because it recites an "unconventional approach" in measuring a degree of similarity (see Appeal Br. 9) and "a new and improved way of measuring a degree of similarity between several financial instruments" (Reply Br. 2-3), an abstract idea does not transform into an inventive concept just because the prior art does not disclose or suggest it. See Mayo, 566 U.S. at 78. The steps of selecting a model, determining a factor and similarity degree, and generating a factor intersection result are all part of the abstract idea and can be performed mentally. "It has been clear since Alice that a claimed invention's use of the ineligible concept to which it is directed cannot supply the inventive concept that renders the invention 'significantly more' than that ineligible concept." BSG Tech LLC v. Buyseasons, Inc., 899 F.3d 1281, 1290 (Fed. Cir. 2018). Moreover, as discussed above, the claim simply recites the functional results to be achieved by a generic processor. The claims "provide[] only a result- oriented solution[] with insufficient detail for how a computer accomplishes it. Our law demands more." Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1342 (Fed. Cir. 2017). Thus, we are not persuaded of error in the Examiner's determination that the limitations of claim 1 do not transform the claims into significantly more than the abstract idea. Based on the foregoing, we are not persuaded that the Examiner erred in rejecting independent claim 1 under 35 U.S.C. Â§ 101, and we sustain the rejection of claim 1 and of claims 2-20, which fall with claim 1. 14 Appeal2018-000582 Application 13/484,569 DECISION The Examiner's rejection of claims 1-20 under 35 U.S.C. Â§ 101 is AFFIRMED. 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 15