Ex Parte WOODMANSEY et al

Patent Trial and Appeal Board

Mar 25, 2019

12948119 (P.T.A.B. Mar. 25, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/948,119 11/17/2010
63710 7590 03/27/2019
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
FIRST NAMED INVENTOR
Robert J. WOODMANSEY
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.
99-1005-C6 3246
EXAMINER
BOVEJA, NAMRATA
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
03/27/2019 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):
patentdocketing@cantor.com
lkorovich@cantor.com
phowe@cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte ROBERT J. WOODMANSEY, PHILIP M. GINSBERG,
and GLENN D. KIRWIN 1
Appeal2017-005427
Application 12/948, 119
Technology Center 3600
Before HUBERT C. LORIN, JOSEPH A. FISCHETTI, and
BIBHU R. MOHANTY, Administrative Patent Judges.
MOHANTY, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
The Appellants seek our review under 35 U.S.C. § 134 of the final
rejection of claims 48-105 which are all the claims pending in the
application. We have jurisdiction under 35 U.S.C. § 6(b ). Oral arguments
were presented March 14, 2019.
SUMMARY OF THE DECISION
We AFFIRM.
1 The real party in interest is BGC Partners, Inc. App. Br. 2.
Appeal2017-005427
Application 12/948, 119
THE INVENTION
The Appellants' claimed invention is related to systems and methods
for linking orders in trading systems (Spec., page 1, lines 9, 10). Claim 48,
reproduced below with the italics added, is representative of the subject
matter on appeal.
48. A method, comprising:
receiving, by a computing device, from a trader, a
selection of a first financial instrument, wherein the first
financial instrument is transacted in a first market; wherein the
computing device comprises at least one of:
a workstation used by the trader;
an electronic trading system configured to rank and store
bid and offers for instruments in a queue; and
a device that facilitates communication between the
trader and an external trading system;
receiving, by the computing device, from the trader, a
selection of a second financial instrument, wherein the second
financial instrument is transacted in a second market, and
wherein the first financial instrument is different from the
second financial instrument;
receiving, by the computing device, from the trader, a
linking relationship between the first financial instrument and
the second financial instrument;
monitoring, by the computing device, bids and offers
from at least one external trading system, wherein the bids and
offers comprise bids and offers for at least the first financial
instrument;
controlling, by the computing device, a submission of
orders for the second financial instrument based at least in part
on the linking relationship, wherein controlling the submission
of orders for the second financial instrument comprises:
generating, by the computing device, a price of an order
for the second financial instrument based at least in part on
applying a conversion factor to a price of a monitored bid or
offer for the first financial instrument;
2
Appeal2017-005427
Application 12/948, 119
generating, by the computing device, a size of the order
for the second financial instrument based at least in part on
applying a hedge ratio to a size of the monitored bid or offer for
the first financial instrument; and
submitting, by the computing device, the order for the
second financial instrument to a second trading system.
THE REJECTION
The following rejection is before us for review:
Claims 48-105 are rejected under 35 U.S.C. § 101 as being directed to
non-statutory subject matter.
FINDINGS OF FACT
We have determined that the findings of fact in the Analysis section
below are supported at least by a preponderance of the evidence. 2
ANALYSIS
Rejection under 35 USC§ 101
The Appellants argue that the rejection of claim 48 is improper
because an abstract idea has not been properly identified (App. Br. 6-9;
Reply Br. 3). The Appellants also argue that the claim adds "significantly
more" to transform the alleged abstract idea into patentable subject matter
(App. Br. 9-11; Reply Br. 3-5, 8, 9).
In contrast, the Examiner has determined that the rejection of record is
proper (Final Rej. 2-8; Ans. 2-9).
2 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
( explaining the general evidentiary standard for proceedings before the
Patent Office).
3
Appeal2017-005427
Application 12/948, 119
We agree with the Examiner. 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. v. CLS
Bankint'l, 573 U.S. 208,216 (2014).
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
( 1981) ); "tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores" (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
4
Appeal2017-005427
Application 12/948, 119
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 176; 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. (internal citation omitted) ( 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]erelyrequir[ing]
generic computer implementation[] fail[ s] to transform that abstract idea into
a patent-eligible invention." Id.
5
Appeal2017-005427
Application 12/948, 119
The PTO recently published revised guidance on the application of§
IOI. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg.
50 (Jan. 7, 2019) ("Guidance"). Under the 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 MPEP § 2106.0S(a}-(c), (e}-(h)).
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 § 2106.0S(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 Guidance.
The Examiner has presented an analysis of the exemplary claim 48 in
the Answer at page 3. Here, the Examiner has determined that the claim is
directed to the concept of trading financial instruments by linking orders,
which is a fundamental economic practice and therefore an abstract idea
(Ans. 3, 4). We substantially agree with the Examiner's analysis in this
regard. Claim 48 is reproduced above with the italics used to highlight the
abstract concept that the claim is directed to. For example, the claim
includes limitations for: "receiving ... a selection of a first financial
instrument," "receiving ... a selection of a second financial instrument,"
"receiving ... a linking relationship between the first financial instrument
and the second financial instrument," "monitoring ... bids and offers,"
"controlling ... submission of orders," "generating ... a price of an order,"
6
Appeal2017-005427
Application 12/948, 119
"generating ... a size of the order," and "submitting ... the order." Here,
these claim limitations are representative of the claim being directed to the
concept of trading financial instruments by linking orders which is a method
of organizing human activities and fundamental economic practice and an
abstract idea. Further, the Specification at page 1 states that the invention
relates to "linking orders in electronic trading systems." Thus, we consider
the claim to be directed to an abstract idea as identified above.
Turning to the next step of the Alice and Mayo framework, we
determine that the claims do not improve computer functionality, improve
another field or technology, utilize a particular machine, or effect a physical
transformation. Rather, we determine that nothing in the claims imposes a
meaningful limit on the judicial exception, such that the claims are more
than a drafting effort to monopolize the judicial exception.
For example, in claim 48 the steps of [1] "receiving" the selection of
the first financial instrument; [2] "receiving" the selection of the second
financial instrument; [3] "receiving" a linking relationship between the
financial instrument; [ 4] "monitoring" the bids and offers; [ 5] "controlling"
the submission of orders; [ 6] "generating" a price of an order; [7]
"generating" the size of an order; and [8] "submitting" the order for the
second financial instrument are merely conventional steps performed by a
generic computer that do not improve computer functionality. That is, these
recited steps [1]-[8] "do not purport to improve the functioning of the
computer itself' but are merely generic functions performed by a
conventional processor. Likewise, these same steps [1]-[8] listed above do
not improve the technology of the technical field and merely use generic
computer components and functions to perform the steps. Also, the recited
7
Appeal2017-005427
Application 12/948, 119
method steps [1]-[8] above do not require a "particular machine" and can be
utilized with a general purpose computer, and the steps performed are purely
conventional. In this case the general purpose computer is merely an object
on which the method operates in a conventional manner and does not
provide "significantly more" to the claim beyond a nominal or insignificant
execution of the method. Further, the claim as a whole fails to effect any
particular transformation of an article to a different state in a manner that
would render the claim "significantly more" than the abstract idea. The
recited steps [1 ]-[8] fail to provide meaningful limitations to limit the
judicial exception and rather are mere instructions to apply the method to a
generic computer. Considering the elements of the claim both individually
and as "an ordered combination" the functions performed by the computer
system at each step of the process are purely conventional. Each step of the
claimed method does no more than require a generic computer to perform a
generic computer function.
The Appellants have also cited to Enfzsh, LLC v. Microsoft Corp., 822
F.3d 1327 (Fed. Cir. 2016) to show that the claim is not abstract but the
claims in that case were not similar in scope to those here in contrast and
were in contrast directed to a self-referential data table.
The Appellants cite to DDR Holdings, LLC v. Hotels, L.P., 773 F.3d
1245, 1257 (Fed. Cir. 2014) and argue that the claim is "rooted in computer
technology" (App. Br. 13, 14). We disagree as the Appellants have not
shown how the claimed subject matter is rooted in technology given that the
Specification describes only the use of generic computer equipment used in
routine, conventional, and generic manner.
8
Appeal2017-005427
Application 12/948, 119
Further the claim fails to add a specific limitation beyond the judicial
exception that is not well-understood, routine, and conventional in the field.
Rather the claim uses well-understood, routine, and conventional activities
previously known in the art at a high level of generality to the judicial
exception. The Specification at pages 5-7 for example describes using
conventional computer components such as personal computers, wireless
terminals, microprocessors, and Internet browsers in a conventional manner.
The claim specifically includes recitations for a "computing device",
"workstation", "electronic trading system", and a "device" to implement
communications to carry out the method but these computer components are
all used in a manner that is well-understood, routine, and conventional in the
field. The Appellant has not shown these claimed generic computer
components which are used to implement the claimed method are not well
understood, routine, or conventional in the field. The Appellants have not
demonstrated that the computer described in the Specification at page 5 or
the claimed "computing device" for instance are not a general purpose
computer components beyond those known to be routine and conventional
known to perform similar functions in a well-understood manner.
We note the point about pre-emption (App. Br. 12, 13). While pre-
emption "'might tend to impede innovation more than it would tend to
promote it,' thereby thwarting the primary object of the patent law" (Alice,
573 U.S. at 216 (quoting Mayo, 566 U.S. at 71), "the absence of complete
preemption does not demonstrate patent eligibility" (Ariosa Diagnostics,
Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)). See also OIP
Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362---63 (Fed. Cir. 2015),
cert. denied, 136 S. Ct. 701, 193 (2015) ("[T]hat the claims do not preempt
9
Appeal2017-005427
Application 12/948, 119
all price optimization or may be limited to price optimization in the e-
commerce setting do not make them any less abstract.").
For these reasons the rejection of claim 48 is sustained. Similar
arguments have been presented for the remaining claims. The rejection of
these claims is sustained as the remaining claims are directed to similar
subject matter as claim 48.
CONCLUSIONS OF LAW
We conclude that Appellants have not shown that the Examiner erred
in rejecting claims 4 8---1 0 5 under 3 5 U.S. C. § 10 1 as being directed to non-
statutory subject matter.
DECISION
The Examiner's rejection of claims 48-105 is sustained.
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). See
37 C.F.R. § 4I.50(f).
AFFIRMED
10