Gilbert, Mary Ann.Download PDFPatent Trials and Appeals BoardAug 12, 202013616937 - (D) (P.T.A.B. Aug. 12, 2020) 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. 13/616,937 09/14/2012 Andrew C. Gilbert 01-1046-C1 1233 63710 7590 08/12/2020 INNOVATION DIVISION CANTOR FITZGERALD, L.P. 110 EAST 59TH STREET (6TH FLOOR) NEW YORK, NY 10022 EXAMINER KANERVO, VIRPI H ART UNIT PAPER NUMBER 3691 NOTIFICATION DATE DELIVERY MODE 08/12/2020 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): lkorovich@cantor.com mcatarino@cgolaw.com patentdocketing@cantor.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte ANDREW C. GILBERT ___________ Appeal 2019-001719 Application 13/616,937 Technology Center 3600 ____________ Before ERIC B. CHEN, JEREMY J. CURCURI, and JOHN F. HORVATH, Administrative Patent Judges. CHEN, Administrative Patent Judge. DECISION ON APPEAL Appeal 2019-001719 Application 13/616,937 2 STATEMENT OF THE CASE Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the Examiner’s decision to reject claims 1–10, 15–17, 19–21, and 26–28. Claims 11–14, 18, 22–25, and 29 have been cancelled. We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. CLAIMED SUBJECT MATTER The claims are directed to creating and trading dynamic securities. (Abstract.) Claim 1, reproduced below, is illustrative of the claimed subject matter, with bracketing added and with disputed limitations in italics: 1. A method for creating a dynamic security over an electronic trading system communicating with interfaces of computing devices, the method comprising: [i] generating electronic signals for causing to execute commands to communicate to a computing device to auto- populate a graphical user interface with a first portion to display a plurality of securities and a second portion to display a list of selected plurality of securities; [ii] in response to a request to select a plurality of securities from the graphical user interface of a computing device, selecting a plurality of securities from a list of securities to form a selected plurality of securities, the plurality of securities include an ownership interest in real property and a lease to the real property; 1 We use the word “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42(a). Appellant identifies the real party in interest as BGC Partners, Inc. (Appeal Br. 3.) Appeal 2019-001719 Application 13/616,937 3 [iii] forming a dynamic security from the selected plurality of securities; [iv] monitoring a rate of return of the dynamic security; and [v] comparing the rate of return to a pre-determined target rate of return; [vi] generating electronic signals for causing to execute commands to communicate to the graphical user interface of the computing device, graphical objects to allow user selection for trading of the selected securities or the dynamic security; [vii] generating electronic signals for causing to execute commands for providing a notification to the graphical user interface of the computing device when the rate of return deviates at a pre-determined ratio from the target rate of return; and [viii] generating electronic signals for causing to execute commands for trading at least one of the selected plurality of securities from the dynamic security. REJECTIONS Claims 1–10, 15–17, 19–21, and 26–28 stand rejected under 35 U.S.C. § 101 as directed to patent-ineligible subject matter. (Final Act. 5.) Claims 1–10, 15–17, 19–21, and 26–28 stand rejected under 35 U.S.C. § 112, first paragraph, as failing to comply with the written description requirement. (Final Act. 4.) The rejection of claims 1–10, 15–17, 19–21, and 26–28 under 35 U.S.C. § 103(a) has been withdrawn by the Examiner. (Ans. 3.) Appeal 2019-001719 Application 13/616,937 4 OPINION § 101 Rejection We are unpersuaded by Appellant’s arguments (Appeal Br. 8–14) that independent claims 1 and 19 are directed to patent-eligible subject matter under 35 U.S.C. § 101. The Examiner determined that: The creation of forming a dynamic security from investor-selected plurality of securities where the dynamic security can be traded as a whole or alternatively the individual components of the whole may be traded separately, as recited in the independent claims 1 and 19, is similar to a fundamental economic practice found by the courts to be abstract ideas (e.g., mitigating settlement risk in Alice Corp.). (Final Act. 6; see also Ans. 5.) Moreover, regarding the additional elements of these claims (e.g., a processor, memory, or graphical user interface) the Examiner determined that: Individually, the additional elements are well understood, routine, and conventional elements that amount to no more than implementing the abstract idea of forming a dynamic security from investor-selected plurality of securities where the dynamic security can be traded as a whole or alternatively the individual components of the whole may be traded separately with a computerized system. (Final Act. 7.) We agree with the Examiner’s determinations and ultimate conclusion that the claims are directed to patent-ineligible subject matter. 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 Appeal 2019-001719 Application 13/616,937 5 ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’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. Alice, 573 U.S. 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. Kappos, 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, 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, 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. 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 Appeal 2019-001719 Application 13/616,937 6 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 turn 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 § 101. USPTO’s 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50 (Jan. 7, 2019); see also USPTO, October 2019 Update: Subject Matter Eligibility, 84 Fed. Reg. 55942 (Oct. 17, 2019). Under that guidance, we first look to whether the claim recites: Appeal 2019-001719 Application 13/616,937 7 (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 § 2106.05(a)–(c), (e)–(h) (9th ed. 2019)). 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 84 Fed. Reg. 56. Are the claims at issue directed to a patent-ineligible concept? Step One Claim 1 is a method claim, which falls within the “process” category of 35 U.S.C. § 101. Likewise, claim 19 is a system claim, which falls within the “manufacture” category of 35 U.S.C. § 101. Therefore, claims 1 and 19 fall within one of the four statutory categories of patentable subject matter identified by 35 U.S.C. § 101. Although claims 1 and 19 fall within the statutory categories, we must still determine whether the claims are directed to a judicial exception, namely an abstract idea. See Alice, 573 U.S. at 216. Thus, we must determine whether the claims recite a judicial exception and whether the Appeal 2019-001719 Application 13/616,937 8 exception is integrated into a practical application. See 84 Fed. Reg. at 52– 55. If a claim recites a judicial exception without integrating the judicial exception into a practical application, the claim is directed to a judicial exception under the first step of the Alice/Mayo test. See id. Step 2A, Prong One Independent claim 1 recites the following limitations: “[ii] selecting a plurality of securities from a list of securities to form a selected plurality of securities, the plurality of securities include an ownership interest in real property and a lease to the real property,” “[iii] forming a dynamic security from the selected plurality of securities,” “[iv] monitoring a rate of return of the dynamic security,” “[v] comparing the rate of return to a pre-determined target rate of return,” “[vi] allow user selection for trading of the selected securities or the dynamic security,” “[vii] providing a notification . . . when the rate of return deviates at a pre-determined ratio from the target rate of return,” and “[viii] trading at least one of the selected plurality of securities from the dynamic security.” Such method steps of claim 1 are directed to a patent-ineligible abstract idea of certain methods of organizing human activity, for example the fundamental economic practice of trading stocks (or other securities) on a stock exchange, which would include monitoring such stocks for a rate of return or comparing that rate of return to a target rate of return. See, e.g., Alice, 573 U.S. at 219–20 (a “fundamental economic practice” is an abstract idea). In particular, in the “Background of the Invention” section, Appellants’ Specification states that “[f]or example, electronic trading systems have been created which facilitate the trading of financial Appeal 2019-001719 Application 13/616,937 9 instruments such as stocks, bonds, currency, futures, or other suitable financial instruments.” (Spec. ¶ 1.) Alternatively, such method steps of claim 1 are directed to a patent- ineligible abstract idea of mental steps. See, e.g., CyberSource, 654 F.3d 1366 at 1372–73 (“unpatentable mental processes” include “steps [that] can be performed in the human mind, or by a human using a pen and paper”). For example, a person could: (i) select multiple securities for purchase from a list of available securities; (ii) continuously monitor the rate of return for each purchased security relative to a benchmark index; and (iii) sell the security if the rate of return either outpaces or lags the benchmark index. Accordingly, claim 1 recites a judicial exception. Claim 19 recites limitations similar to those discussed with respect to claim 1. Thus, claim 19 also recite a judicial exception. Step 2A, Prong Two Because claims 1 and 19 recite a judicial exception, we next determine if the claims recite additional elements that integrate the judicial exception into a practical application. Independent claim 1 recites the following: “[ii] in response to a request to select a plurality of securities from the graphical user interface of a computing device, selecting a plurality of securities,” “[vi] generating electronic signals for causing to execute commands to communicate to the graphical user interface of the computing device, graphical objects to allow user selection for trading of the selected securities or the dynamic security,” “[vii] generating electronic signals for causing to execute commands for providing a notification to the graphical user interface of the computing Appeal 2019-001719 Application 13/616,937 10 device when the rate of return deviates at a pre-determined ratio from the target rate of return,” and “[viii] generating electronic signals for causing to execute commands for trading at least one of the selected plurality of securities from the dynamic security.” The recited additional elements, including “computing device,” “graphical user interface,” and “graphical objects” are merely tools for performing the recited abstract idea. See Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1262 (Fed. Cir. 2016) (“[T]he claims are directed not to an improvement in cellular telephones but simply to the use of cellular telephones as tools in the aid of a process focused on an abstract idea.”). Moreover, claim 1 further recites “[i] generating electronic signals for causing to execute commands to communicate to a computing device to auto-populate a graphical user interface with a first portion to display a plurality of securities and a second portion to display a list of selected plurality of securities” Such limitations merely add insignificant extra- solution activity to the judicial exception. See Flook, 437 U.S. at 590 (“The notion that post-solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process exalts form over substance”). Accordingly, claim 1 does not recite additional elements that integrate the judicial exception into a practical application. Claim 19 recites limitations similar to those discussed with respect to claim 1. Thus, claim 19 does not recite additional elements that integrate the judicial exception into a practical application. Appeal 2019-001719 Application 13/616,937 11 Is there something else in the claims that ensures that they are directed to significantly more than a patent ineligible concept? Step 2B Because claims 1 and 19 are directed to a judicial exception, we next determine, according to Alice, whether these claims recite an element, or combination of elements, that ensure that the claim is directed to significantly more than the judicial exception. Independent claim 1 recites “graphical user interface,” “computing device,” and “graphical objects.” Similarly, independent claim 19 recites “computing devices,” “processor,” “memory,” and “graphical user interface.” With respect to the claimed additional elements, Appellant’s Specification discloses the following: In system 100, user computer 102 may be a computer, processor, personal computer, laptop computer, handheld computer, personal digital assistant, computer terminal, a combination of such devices, or any other suitable data processing device. User computer 102 may have any suitable device capable of receiving user input and displaying user choices. (Spec. ¶ 23.) FIG. 2 is an illustration of an interface that may be presented in accordance with certain aspects of the present invention. As shown, interface 200 may include a menu of securities 202, up and down arrows 204, price of security field 206, quantity of security field 208, up and down arrows 210, purchase button 212, basket of securities 220, up and down arrows 222, and sell button 224. (Id. ¶ 28.) Appeal 2019-001719 Application 13/616,937 12 The generalized functional terms by which the additional elements are described reasonably indicate that Appellant’s Specification discloses: (i) a conventional “graphical user interface” with conventional “graphical objects” (e.g., interface 200 with menu of securities 202, up and down arrows 204, price of security field 206, quantity of security field 208, up and down arrows 210, purchase button 212, basket of securities 220, up and down arrows 222, and sell button 224, as illustrated in Figure 2 ); (ii) a conventional “computing device” (e.g., user computer 102 (id. ¶ 23)); and (iii) conventional “processor” and “memory”2 (e.g., user computer 102 with computer processor (id.)). Moreover, Appellant’s Figure 1 illustrates “system 100 [that] may include one or more user computers 102 . . . connected by one or more communication links 104 and a computer network 106 to a trading server 108.” (¶ 22.) Similarly, Appellant’s Figure 3 illustrates “a flow diagram for the creation and trading of a dynamic security.” (¶ 31.) Accordingly, Appellant’s Specification, including Figures 1 and 3, discloses that: (i) the graphical user interface includes graphical objects; and (ii) computing device, having a processor and a memory, function cooperatively as an ordered combination. Thus, independent claims 1 and 19 do no more than require generic, purely conventional computer elements, as an ordered combination, 2 One relevant definition of “processor” (or “CPU”) is “[t]he computational and control unit of a computer,” such that “the term [CPU] encompasses both the processor and the computer’s memory.” MICROSOFT® COMPUTER DICTIONARY 132 (5th ed. 2002). Appeal 2019-001719 Application 13/616,937 13 performing generic computer functions, rather than improve computer capabilities. Appellant argues the following: Appellant’s claimed subject matter is also drawn to an improved user interface which provides advantages over the prior art systems which improves the efficiency of the electronic devices, thereby overcoming disadvantages of prior systems, as explained above. As the Federal Circuit in Core Wireless has explicitly held that an improved graphical user interface is patent eligible, Appellant requests that the Examiner similarly find that the presently claimed invention provides a user interface which may improve the efficiency of using the electronic devices is patent-eligible. (Appeal Br. 11–12 (emphases omitted).) In particular, Appellant cites to paragraph 32 of the Specification, which discloses that “[t]he system and methods 300 may monitor the trading price of the dynamic security 306 or monitor included in the dynamic security 308” and “[t]he user is notified in Step 314 and Step 316 when securities deviate substantially from the pre- determined target rate.” (Id. at 10.) Similarly, Appellant argues “that the claimed invention, in one example, recites an additional element (or combination of elements) that are ‘not well-understood, routine or conventional’ for displaying on a graphical user interface visual indicators based on user movement and selection.” (Id. at 12–13 (emphases omitted).) However, Appellant has not adequately explained why the claim “purport[s] to improve the functioning of the computer itself” or “any other technology or technical field.” Alice, 573 U.S. at 225. In particular, Appellant has not explained why monitoring the trading price of securities, which is either a method of organizing human activity (e.g., fundamental economic practice) Appeal 2019-001719 Application 13/616,937 14 or mental steps, improves the function of a computer or other technology, such as the claimed “graphical user interface.” Appellant further argues the following: The instant claims recite features that include displaying on a graphical user interface visual indicators based on user movement and selection which may help reduce the number of transactions over the network. It is clear that the features of the instant claims, including at least the claimed elements emphasized above, do not preempt all ways of achieving the intended result because the claimed recitations are very specific and do not cover all possible approaches. (Appeal Br. 14 (emphases omitted).) However, although “preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015). Where claims are deemed to recite only patent ineligible subject matter under the two-step Alice analysis, as they are here, “preemption concerns are fully addressed and made moot.” Id. Thus, we agree with the Examiner that claims 1 and 19 are directed towards patent-ineligible subject matter. Accordingly, we sustain the rejection of independent claims 1 and 19 under 35 U.S.C. § 101. Claims 2–10, 15–17, 20, 21, and 26–28 depend from claims 1 and 19, and Appellant has not presented any additional substantive arguments with respect to these claims. Therefore, we sustain the rejection of claims 2–10, 15–17, 20, 21, and 26–28 under 35 U.S.C. § 101, for the same reasons discussed with respect to independent claims 1 and 19. Appeal 2019-001719 Application 13/616,937 15 § 112, First Paragraph Rejection We are persuaded by Appellant’s arguments (Reply Br. 3) that the limitations “to auto-populate a graphical user interface” and “graphical objects to allow user selection for trading,” as recited in independent claims 1 and 19, comply with the written description requirement under 35 U.S.C. § 112, first paragraph. The Examiner found that “both newly amended features [adding the limitations ‘to auto-populate a graphical user interface’ and ‘graphical objects to allow user selection for trading’] are new matter” because Appellant’s Specification lacks written description support. (Ans. 4.) We do not agree with the Examiner’s findings. Appellant’s Figure 2, which illustrates interface 200, is reproduced below: Appeal 2019-001719 Application 13/616,937 16 Figure 2 “is an illustration of an interface that may be presented in accordance with certain aspects of the present invention.” (Spec. ¶ 28). Moreover, Appellant’s Specification discloses the following: As shown, interface 200 may include a menu of securities 202, up and down arrows 204, price of security field 206, quantity of security field 208, up and down arrows 210, purchase button 212, basket of securities 220, up and down arrows 222, and sell button 224. In order to create a dynamic security using interface 200, the user preferably first selects two or more different securities from a menu of securities 202. Up and down arrows 204 are used to scroll through the menu of securities. As the user scrolls through the menu, individual securities will be highlighted one at a time. The price of each highlighted security is displayed in field 206. . . . Once the desired security and quantity thereof have been specified, the user may submit the purchase order by pressing purchase button 212. Once the purchase has been completed, the security will appear in the basket of securities 220. (Id. ¶¶ 28–29 (emphases added).) In order to trade the dynamic security, the user can sell the entire basket of securities 220 by highlighting the entire collection of securities in field 220 and pressing sell button 224. Alternatively, the user can sell individual securities by selecting individual securities from field 220 through the use of the up and down arrows 222. Once the desired individual security has been selected from field 220, the user may complete the sale by pressing sell button 224. (Id. ¶ 30 (emphasis added).) Thus, because Appellant’s Specification discloses that “interface 200 may include a menu of securities 202” from which individual securities are selected, as illustrated in Figure 2, the Specification provides support for the limitation “to auto-populate a graphical user interface.” Similarly, because Appeal 2019-001719 Application 13/616,937 17 Appellant’s Specification disclose that: (i) the user can buy securities by navigating up and down arrows 204 to scroll through the menu of securities 220 and highlight securities, followed by pressing purchase button 212; and (ii) the user can sell securities by navigating up and down arrows 222 to scroll through basket of securities 220, followed by pressing sell button 224, the Specification provides support for the limitation “graphical objects to allow user selection for trading.” Accordingly, we are persuaded by Appellant’s arguments that “the interface includes a menu of securities which are auto-populated (automatically) by the system as described in paragraphs [0028] of Appellant’s published disclosure supports the features of ‘to auto-populate a graphical user interface’” and “the up and down arrows are graphical objects as described in paragraphs [0029] of Appellant’s published disclosure supports the features of graphical objects to allow user selection for trading.” (Reply Br. 3 (emphases omitted).) Thus, we do not agree with the Examiner that the Specification fails to provide written description support for the limitations “to auto-populate a graphical user interface” and “graphical objects to allow user selection for trading,” as recited in independent claims 1 and 19. Accordingly, we do not sustain the rejection of independent claims 1 and 19 under 35 U.S.C. § 112, first paragraph. Claims 2–10, 15–17, 20, 21, and 26–28 depend from claims 1 and 19. Therefore, we do not sustain the rejection of claims 2–10, 15–17, 20, 21, and 26–28 under 35 U.S.C. § 112, first paragraph for the same reasons discussed above with respect to independent claims 1 and 19. Appeal 2019-001719 Application 13/616,937 18 CONCLUSION The Examiner’s decision rejecting claims 1–10, 15–17, 19–21, and 26–28 under 35 U.S.C. § 101 is affirmed. The Examiner’s decision rejecting claims 1–10, 15–17, 19–21, and 26–28 under 35 U.S.C. § 112, first paragraph is reversed. DECISION In summary: Claims Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 1–10, 15– 17, 19–21, 26–28 101 Eligibility 1–10, 15– 17, 19–21, 26–28 1–10, 15– 17, 19–21, 26–28 112, first paragraph Written Description 1–10, 15– 17, 19–21, 26–28 Overall Outcome 1–10, 15– 17, 19–21, 26–28 TIME PERIOD FOR RESPONSE No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv). AFFIRMED Copy with citationCopy as parenthetical citation