Ex Parte White et al

Patent Trial and Appeal Board

Feb 22, 2019

13671555 (P.T.A.B. Feb. 22, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO.
13/671,555
132787 7590
Docket Clerk-GOLD
P.O. Drawer 800889
Dallas, TX 75380
FILING DATE FIRST NAMED INVENTOR
11/07/2012 Christopher White
02/26/2019
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-00430 7856
EXAMINER
BOVEJA, NAMRATA
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
02/26/2019 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):
patents@munckwilson.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Exparte CHRISTOPHER WHITE, JUSTIN GMELICH,
DIMITER GEORGIEV, DEBRA HERSCHMANN, PAUL J. HUCHRO,
WICHAR JIEMPREECHA, ROSS LEVINSKY, JOHNNY SHAFFER,
STEPHANIE MIRIAM SKLAR, and PAUL WALKER
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Application 13/671,555 1
Technology Center 3600
Before JOHNNY A. KUMAR, CATHERINE SHIANG, and
JASON J. CHUNG, Administrative Patent Judges.
CHUNG, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134(a) of the Final
Rejection of claims 1, 3-37, and 43--45. 2 We have jurisdiction under
35 U.S.C. § 6(b).
We affirm.
1 According to Appellants, Goldman, Sachs & Co. is the real party in
interest. App. Br. 3.
2 Claims 2 and 38--42 have been canceled. App. Br. 28, 35.
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Application 13/671,555
INVENTION
The invention is directed to filling orders based on time of order entry
and liquidity allocation. Abstract. Claim 1 is illustrative of the invention
and is reproduced below:
1. An order execution method, comprising:
receiving, by an electronic trading system server during an
order entry period, a plurality of orders to trade a financial
instrument, each order being submitted via an order entry user
interface and specifying an order size and a trade side;
identifying, by the electronic trading system server, a trade
side with an aggregate order size larger than that of an opposing
trade side;
assigning, based on the time of order entry, a first
n-number of orders on the identified trade side, where n is a
predefined number greater than one;
determining, by the electronic trading system server, a first
priority for executing the first n-number of orders on the
identified trade side, based on available liquidity and time of
order entry, wherein the first priority maximizes the number of
trades;
executing, by the electronic trading system server, the first
n-number of orders on the identified trade side according to the
determined first priority; and
based on available liquidity, executing, by the electronic
trading system, remaining orders on the identified trade side.
REJECTION AT ISSUE
Claims 1, 3-37, and 43--45 stand rejected under 35 U.S.C. § 101 as
being directed to patent ineligible subject matter. Final Act. 4--10.
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ANALYSIS
I. Independent Claims 1, 14, and 26 Rejected Under 35 US.C. § 101
A. The Examiners Conclusions and Appellants 'Arguments
The Examiner concludes the present claims are directed to an abstract
idea of fulfilling prioritizing orders for trading. Final Act. 5. The Examiner
concludes that certain limitations in the independent claims recite concepts
performed in the human mind. Id. at 5-6. And the Examiner determines the
present claims do not amount to significantly more than an abstract idea
because the Examiner finds the abstract idea is implemented on a computer
using generic computer functions that are well-understood, routine, and
conventional activities previously known to the industry. Id. at 7-8 ( citing
Spec. ,r,r 32-36).
Appellants argue the Examiner improperly overgeneralizes the
independent claims are directed towards the abstract idea of receiving
intangible information and processing or analyzing the information in a
human mind or by mathematical algorithm. App. Br. 19-21; Reply Br. 2--4.
Appellants argue the independent claims are directed to an unconventional
solution for an electronic trading system that fills orders in a trade having
imbalanced trade sides that uses a process rewarding both time priority and
order size and the claims do not preempt any abstract idea. App. Br. 21-22;
Reply Br. 4---6. Appellants argue the Examiner does not provide evidence to
support the finding that the abstract idea implements generic components
using well-understood, routine, and conventional activities previously
known to the industry claims. App. Br. 22-23; Reply Br. 7-9. Appellants
argue the Examiner merely analyzes limitations individually, but fails to
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explain why the independent claims as a whole do not meet the significantly
more threshold. App. Br. 23-25.
B. Legal Principles
An invention is patent-eligible if it claims a "new and useful process,
machine, manufacture, or composition of matter." 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 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 ( Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 191
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(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))).
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 192 ("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 (internal 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).
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"[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
§ 101. USPTO's January 7, 2019 Memorandum, 2019 Revised Patent
Subject Matter Eligibility Guidance ("Memorandum"). Under that
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 interactions 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) § 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 are not
"well-understood, routine, conventional" in the field (see MPEP
§ 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 Memorandum.
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C. Discussion
1. Step 2A, Prong 1 (Alice Step 1)
As an initial matter, we discern no error in the Examiner's conclusion
that the present claims are directed to an abstract idea of fulfilling
prioritizing orders for trading (i.e., a commercial interaction, which is a
certain method of organizing human activity). Final Act. 5. We consider
claim 1 (with emphases), reproduced below.
1. An order execution method, comprising:
receiving, by an electronic trading system server during an
order entry period, a plurality of orders to trade a financial
instrument, each order being submitted via an order entry user
interface and specifying an order size and a trade side;
identifying, by the electronic trading system server, a trade
side with an aggregate order size larger than that of an opposing
trade side;
assigning, based on the time of order entry, a first
n-number of orders on the identified trade side, where n is a
predefined number greater than one;
determining, by the electronic trading system server, a
first priority for executing the first n-number of orders on the
identified trade side, based on available liquidity and time of
order entry, wherein the first priority maximizes the number of
trades;
executing, by the electronic trading system server, the first
n-number of orders on the identified trade side according to the
determined first priority; and
based on available liquidity, executing, by the electronic
trading system, remaining orders on the identified trade side.
We conclude the emphasized portions of claim 1 recite the abstract
idea of a commercial interaction, which is a certain method of organizing
human activity. We also agree with the Examiner's conclusion that certain
limitations (i.e., the emphasized portions of the paragraphs beginning with
"identifying," "assigning," and "determining" recited directly above) in the
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independent claims recite concepts that can be performed in the human
mind, which is the abstract idea of a mental process.
We, therefore, disagree with Appellants' argument (App. Br. 19--21;
Reply Br. 2--4) that the Examiner improperly overgeneralizes the
independent claims are directed towards the abstract idea of receiving
intangible information and processing or analyzing the information in a
human mind or by mathematical algorithm because a majority of claim 1
recites an abstract idea, as indicated by the emphasized portions above.
Wealso disagree with Appellants' argument (App. Br. 21-22; Reply
Br. 4---6) that the independent claims are directed to an unconventional
solution for an electronic trading system that fills orders in a trade having
imbalanced trade sides that uses a process rewarding both time priority and
order size because the claims do not improve an electronic trading system
server.
Additionally, we disagree with Appellants' argument that the present
claims are patent eligible because they do not preempt any abstract idea
(App. Br. 21-22; Reply Br. 4--6); while preemption may denote patent
ineligibility, its absence does not demonstrate patent eligibility. See
FairWarning, IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1098 (Fed. Cir.
2016). For claims covering a patent-ineligible concept, preemption concerns
"are fully addressed and made moot" by an analysis under the Mayol Alice
framework. Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1379 (Fed. Cir. 2015).
Because the independent claims recite a certain method of organizing
human activity and a mental process, we proceed to prong 2.
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2. Step 2A, Prong 2 (Alice Step 2)
From reproduced claim 1, shown above in the discussion pertaining to
Alice step 1, prong 1, claim 1 recites additional limitations pertaining to an
electronic trading system server. The recitation of an electronic trading
system server in claim 1 is recited at a high level of generality. This generic
electronic trading system server limitation is no more than a generic
component. 3
Accordingly, this additional element does not integrate the abstract
idea into a practical application because it does not impose any meaningful
limits on practicing the abstract idea. Because the present claims are
directed to an abstract idea, we proceed to Step 2B.
3. Step 2B, (Alice Step 2 Continued)
We discern no error in the Examiner's determination that the
independent claims do not amount to significantly more than an abstract idea
because the Examiner finds the abstract idea is implemented on a computer
using generic computer functions that are well-understood, routine, and
conventional activities previously known to the industry. Final Act. 7-8
(citing Spec. ,r,r 32-36).4
We disagree with Appellants' argument (App. Br. 22-23; Reply Br.
7-9) that the Examiner does not provide evidence to support the finding that
the abstract idea implements generic components using
3 See also Final Act. 7-8 (citing Spec. ,r,r 32-36) (Paragraphs 32 through 36
describe the components in an open ended manner. For example, paragraph
32 states, "executed by a general-purpose computer, a personal computer, a
server, and/or other computing systems," which indicates the generic nature
of the components recited in the independent claims).
4 See n.4.
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well-understood, routine, and conventional activities previously known to
the industry claims because the Examiner cites to paragraphs 32 through 36
of Appellants' Specification as evidence to support the Examiner's finding.
Final Act. 7-8 (citing Spec. ,r,r 32-36).
We also disagree with Appellants' argument (App. Br. 23-25) that the
Examiner fails to explain why the independent claims as a whole do not
meet the significantly more threshold because the Examiner analyzes the
entire claim by analyzing each limitation individually and supporting
well-understood, routine, and conventional activities previously known to
the industry claims finding by citing to paragraphs 3 2 through 3 6 of
Appellants' Specification. Final Act. 7-8 (citing Spec. ,r,r 32-36).
Accordingly, we sustain the Examiner's rejection of claims 1, 14, and
26 under 35 U.S.C. § 101.
II. Claims 3-13, 15-25, 27-37, and 43-45 Rejected Under 35 USC
§ 101
Appellants separately argue dependent claim 7 ( and similarly recited
claims 22 and 34). We consider claim 7 (with emphasis), reproduced below.
7. The method of claim 5, wherein when order size of
at least one of the selected first n-number orders is smaller than
the allocated available liquidity, determining the first priority for
executing the selected first n-number orders further comprises:
determining an executable order size for the at least one
of the selected first n-number orders by reallocating the
available liquidity equivalent to the order size to the at least one
of the selected first n-number orders;
determining an executable order size for each of the
remaining selected first n-number orders by reallocating
remainder of the available liquidity equally to each of the
remaining selected first n-number orders.
We conclude the emphasized portions of claim 7 recite the abstract
idea of a commercial interaction, which is a certain method of organizing
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human activity that do not amount to significantly more than any abstract
idea because we find the abstract idea is implemented on a computer using
generic computer functions that are well-understood, routine, and
conventional activities previously known to the industry. Final Act. 7-8
(citing Spec. ,r,r 32-36). Similarly, we conclude the emphasized claim 7
limitations above recite concepts performed in the human mind, which is the
abstract idea of a mental process that do not amount to significantly more
than any abstract idea because we find the abstract idea is implemented on a
computer using generic computer functions that are well-understood,
routine, and conventional activities previously known to the industry. Final
Act. 7-8 (citing Spec. ,r,r 32-36).
Appellants argue claims 3-13, 15-25, 27-37, and 43--45 are patent
eligible because they are directed towards a particular methodology for
fulfilling prioritized orders by guaranteeing at least partial fulfillment of an
order for a limited number of orders. App. Br. 25-26. We disagree for at
least the reasons stated supra pertaining to the independent claims.
Accordingly, we sustain the Examiner's rejection of claims 3-13, 15-25,
27-37, and 43--45 under 35 U.S.C. § 101
We have only considered those arguments that Appellants actually
raised in the Briefs. Arguments Appellants could have made, but chose not
to make, in the Briefs have not been considered and are deemed to be
waived. See 37 C.F.R. § 4I.37(c)(l)(iv).
DECISION
We affirm the Examiner's decision rejecting claims 1, 3-37, and
43--45 under 35 U.S.C. § 101.
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No time period for taking any subsequent action in connection with
this appeal maybe extended under 37 C.F.R. § 1.136(a)(l)(iv).
AFFIRMED
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