LUTNICK, Howard W. et al.

Patent Trials and Appeals Board

Jul 31, 2020

12840187 - (D) (P.T.A.B. Jul. 31, 2020)

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.
12/840,187 07/20/2010 Howard W. LUTNICK 06-1122-C1 9657
63710 7590 07/31/2020
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
MADAMBA, CLIFFORD B
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
07/31/2020 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 HOWARD W. LUTNICK, JOSEPH NOVIELLO,
MICHAEL SWEETING, and BIJOY PAUL
____________

Appeal 2019-003353
Application 12/840,187
Technology Center 3600
____________

Before MURRIEL E. CRAWFORD, MICHAEL W. KIM, and
MATTHEW S. MEYERS, Administrative Patent Judges.

CRAWFORD, Administrative Patent Judge.

DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant1 seeks our review under 35 U.S.C. § 134 of the Examiner’s
final rejection of claims 1–20. We have jurisdiction under 35 U.S.C. § 6(b).
SUMMARY OF DECISION
We AFFIRM.
THE INVENTION
Appellant claims an electronic systems and methods for obtaining
priority and/or exclusivity in electronic trading systems. (Spec. ¶ 2).

1 We use the word “Appellant” to refer to “applicant” as defined in 37 C.F.R.
§ 1.42. The Appellant identifies the real party in interest as BGC
PARTNERS, INC. Appeal Br. 3.
Appeal 2019-003353
Application 12/840,187

2

Claim 1 is representative of the subject matter on appeal.
1. A method for trading an item in an electronic trading
system that includes communication over a network with a
graphical user interface of a workstation, the method
comprising:
receiving at at least one processor, from a graphical user
interface of a workstation, an incoming order for the item over a
network;
determining by the at least one processor that the
incoming order is contra to a current order, includes a volume
equal to or greater than a volume of the current order, and
satisfies a predetermined minimum volume requirement;
based on the act of determining that the incoming order is
contra to a current order, includes a volume equal to or greater
than a volume of the current order, and satisfies the
predetermined minimum volume requirement:
transacting a trade between the incoming order and the
current order in the electronic trading system;
providing in the electronic trading system a
predetermined time period of exclusive trading between an
interface of a workstation of a participant associated with the
incoming order and an interface of a workstation of a
participant associated with the current order;
executing a process to generate electronic commands to
form a data structure comprising a trading stack in memory of
the electronic trading system to allow to:
(a) keep track of data representing the participant
associated with the incoming order and the participant
associated with the current order to complete a requisite
minimum trade requirement, and (b) manage entries in the
trading stack to keep track of data representing the participant
associated with the incoming order and the participant
associated with the current order;
executing a process to generate electronic commands to
check entries in the trading stack for positions of the entries
representing the participant associated with the incoming order
and the participant associated with the current order;
Appeal 2019-003353
Application 12/840,187

3

executing a process to generate electronic commands to
manage the trading stack in the memory including to:
(a) maintain the data representing the participant
associated with the incoming order and the participant
associated with the current order at a trading position at a top of
the trading stack in memory of the electronic trading system to
allow to complete a requisite minimum trade requirement, or
(b) insert the data representing the participant associated with
the incoming order and the participant associated with the
current order at a trading position at an end of the trading stack
in memory of the electronic trading system to allow to complete
a requisite minimum trade requirement; and
generating electronic commands for communicating with
a clearing center server to exchange messages with the clearing
center server to cause the clearing center server to:
(a) execute electronic commands to complete the trade,
(b) execute electronic commands to clear the trade, and
(c) execute electronic commands to verify that the trade
is completed and cleared.

Appeal Br. 20–21 (Claims Appendix).

THE REJECTION
Claims 1–20 are rejected under 35 U.S.C. § 101 as directed to non-
statutory subject matter.
ANALYSIS
35 U.S.C. § 101 REJECTION
In the briefing, Appellant refers to prior USPTO guidance regarding
§ 101, including, for example: May 2016 Subject Matter Eligibility Update,
81 Fed. Reg. 27,381 (May 6, 2016). However, the 2016 guidance and other
prior guidance, including: (1) 2014 Interim Guidance on Patent Subject
Matter Eligibility, 79 Fed. Reg. 74,618 (December 16, 2014); (2) July 2015
Update on Subject Matter Eligibility, 80 Fed. Reg. 45,429 (July 30, 2015)
Appeal 2019-003353
Application 12/840,187

4

(“the 2015 Update”); and (3) Memorandum on Subject Matter Eligibility
Decisions dated Nov. 2, 2016 have been superseded by the 2019 Revised
Guidance. See 2019 Revised Patent Subject Matter Eligibility Guidance, 84
FR 50, pp 50–57 (Jan. 7, 2019) (“Guidance”). As such, our analysis will
not address the sufficiency of the Examiner's rejection against the cited prior
guidance. Rather, our analysis will comport with the 2019 Guidance as
discussed below.
We will sustain the rejection of claims 1–20 under 35 U.S.C. § 101.
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, . . . 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.”
Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 217–218 (citing Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72–73 (2012))
(citations omitted).
To perform this test, we must first determine whether the claims at
issue are directed to a patent-ineligible concept. The Federal Circuit has
explained that “the ‘directed to’ inquiry applies a stage-one filter to claims,
considered in light of the [S]pecification, based on whether ‘their character
Appeal 2019-003353
Application 12/840,187

5

as a whole is directed to excluded subject matter.’” See Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet
Patents Corp., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). It asks whether the
focus of the claims is on a specific improvement in relevant technology or
on a process that itself qualifies as an “abstract idea” for which computers
are invoked merely as a tool. See id. at 1335–36.
In so doing we apply a “directed to” two prong test: 1) evaluate
whether the claim recites a judicial exception, and 2) if the claim recites a
judicial exception, evaluate whether the judicial exception is integrated into
a practical application. See Guidance, 84 Fed. Reg. at 50–57.
The Examiner determines that the claims are directed to facilitating
trading queueing exclusivity/priority based on certain criteria in an
automated manner, which is a fundamental economic practice. The
Examiner also determines that the claims are directed to collecting and
comparing known information. (Final Act. 7–8) The Examiner finds the
computing/processor device recited in the claims perform only the basic
function of processing and/or executing computer instructions and
data/information in order to implement the steps described above which is a
well-known function or computer processor devices. The Examiner finds
that the claims do not include an improvement to the functioning of the
computer itself or meaningful limitations beyond generally linking the use of
the abstract idea to a particular technological environment. (Final Act. 9–
10).
The Specification states that the invention relates to electronic
systems and methods for obtaining exclusivity in electronic trading systems.
(Spec. ¶ 2). Order exclusivity is the right of certain participants to trade on
Appeal 2019-003353
Application 12/840,187

6

orders in an electronic trading system. (Spec. ¶ 9). Order exclusivity may
be granted to traders in certain trading states based on certain criteria. A
trading state is defined as a set of rules or conditions that govern the
interaction between trading participants. Id.
Consistent with this disclosure, claim 1 recites “determining . . . that
the incoming order is contra to a current order, includes a volume equal to
the volume of the current order and satisfies a predetermined minimum
volume requirement,” and “providing . . . a predetermined time period of
exclusive trading between an interface . . . of a participant associated with
the incoming order.”
We thus agree with the Examiner’s determination that the claims
concern facilitating trading queueing exclusivity/priority based on certain
criteria. Because claim 1 recites a trading system which facilitates a
commercial/sales interaction between parties, we agree with the Examiner
that claim 1 recites a certain method of organizing human activity in the
form of a fundamental economic practice. Guidance 84 Fed. Reg. 52.
Also, we find “the steps of receiving . . . an incoming order,” and
“determining . . . that an incoming order. . . satisfies a predetermined
minimum volume requirement” “constitute “analyzing information by steps
people go through in their minds, or by mathematical algorithms, without
more, as essentially mental processes within the abstract-idea category.”
Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir.
2016); see also buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed.
Cir. 2014) (claims directed to certain arrangements involving contractual
relations are directed to abstract ideas). Thus, in summary, we find that
claim 1 recites the judicial exception of one of certain methods of organizing
Appeal 2019-003353
Application 12/840,187

7

human activity in the form of a fundamental economic practice, and, in the
alternative, the judicial exception of a mental process.
Turning to the second prong of the “directed to” test, of claim 1, we
agree with the Examiner that the processor recited performs only its basic
function of storing instructions and receiving and transmitting
data/information for implementing the steps described above. We also agree
that the workstations’ graphical user interface recited merely performs the
basic function of inputting/outputting and displaying data. In addition, we
agree that the electronic trading system is a platform consisting of a server
and processor devices configured to execute stored software, and the
memory performs the basic function of storing data and instructions. (Final
Act. 9). These recitations do not impose a meaningful limit on the judicial
exception, such that the claim is more than a drafting effort designed to
monopolize the judicial exception. Guidance at 53. We find no indication
in the Specification, nor does Appellant direct us to any indication, that the
operations recited in independent claim 1 invoke any inventive
programming, require any specialized computer hardware or other inventive
computer components, i.e., a particular machine, or that the claimed
invention is implemented using other than generic computer components to
perform generic computer functions. See DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (“[A]fter Alice, there
can remain no doubt: recitation of generic computer limitations does not
make an otherwise ineligible claim patent-eligible.”).
We also find no indication in the Specification that claim 1 affects a
transformation or reduction of a particular article to a different state or thing.
Nor do we find anything of record, short of attorney argument, that attributes
Appeal 2019-003353
Application 12/840,187

8

any improvement in computer technology and/or functionality to the claimed
invention or that otherwise indicates that the claimed invention integrates the
abstract idea into a “practical application,” as that phrase is used in the
Revised Guidance. See Guidance, 84 Fed. Reg. at 55.
In this regard, the recitation does not affect an improvement in the
functioning of the electronic trading system, processor, graphical user
interface of the workstation, center server or other technology, does not
recite a particular machine or manufacture that is integral to the claims, and
does not transform or reduce a particular article to a different state or thing.
Id. Thus, claim 1 is directed to judicial exceptions that are not integrated
into a practical application, and thus claim 1 is directed to abstract ideas.
Turning to the second step of the Alice analysis, because we find that
claim 1 is directed to abstract ideas, the claim must include an “inventive
concept” in order to be patent-eligible, i.e., there must be an element or
combination of elements that is sufficient to ensure that the claim in practice
amounts to significantly more than the abstract idea itself. See Alice, 573
U.S. at 217–18 (alteration in original) (quoting Mayo, 566 U.S. at 72–73).
The introduction of a computer and computer components into the
claims does not alter the analysis at Alice step two.
[T]he 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
deficient result. Thus, if a patent’s recitation of a computer
amounts to a mere instruction to “implemen[t]” an abstract idea
“on . . . a computer,” that addition cannot impart patent
Appeal 2019-003353
Application 12/840,187

9

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
featur[e]” that provides any “practical assurance that the
process is more than a drafting effort designed to monopolize
the [abstract idea] itself.”
Alice, 573 U.S. at 223 (alterations in original) (citations omitted).
Instead, “the relevant question is whether the claim here does more
than simply instruct the practitioner to implement the abstract idea . . . on a
well-understood, routine, conventional generic computer.” Id. at 225. It
does not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
processor to retrieve, select, and apply decision criteria to data and modify
the data as a result 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
trading industry. See Elec. Power Grp., 830 F.3d at 1354; see also In re
Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed.
Cir. 2011) (“Absent a possible narrower construction of the terms
‘processing,’ ‘receiving,’ and ‘storing,’ . . . those functions can be achieved
by any general purpose computer without special programming”). In short,
each step does no more than require a generic computer to perform generic
computer functions. As to the data operated upon, “even if a process of
collecting and analyzing information is ‘limited to particular content’ or a
particular ‘source,’ that limitation does not make the collection and analysis
Appeal 2019-003353
Application 12/840,187

10

other than abstract.” SAP Am. Inc. v. InvestPic, LLC, 890 F.3d 1016, 1022
(Fed. Cir. 2018).
Considered as an ordered combination, the computer components of
Appellant’s claims add nothing that is not already present when the steps are
considered separately. The sequence of data reception-analysis-
access/display is equally generic and conventional or otherwise held to be
abstract. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir.
2014) (sequence of receiving, selecting, offering for exchange, display,
allowing access, and receiving payment recited an abstraction), Inventor
Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir.
2017) (holding that sequence of data retrieval, analysis, modification,
generation, display, and transmission was abstract), Two-Way Media Ltd. v.
Comcast Cable Commc’ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017)
(holding sequence of processing, routing, controlling, and monitoring was
abstract). The ordering of the steps is, therefore, ordinary and conventional.
The claims do not, for example, purport to improve the functioning of
the recited computer components. As we stated above, the claims do not
affect an improvement in any other technology or technical field. The
Specification spells out different generic equipment and parameters that
might be applied using this concept and the particular steps such
conventional processing would entail based on the concept of information
access under different scenarios. (See, e.g., Spec. ¶¶ 32–37). Thus, claim 1
at issue amounts to nothing significantly more than instructions to apply the
abstract idea of information access using some unspecified, generic
computer in a well-understood, routine and conventional way. Under our
Appeal 2019-003353
Application 12/840,187

11

precedents, that is not enough to transform an abstract idea into a patent-
eligible invention. See Alice, 573 U.S. at 226.
We have reviewed all the arguments (Appeal Br. 10–19; Reply Br. 2–
6) Appellant has submitted concerning the patent eligibility of the claims
before us that stand rejected under 35 U.S.C. § 101. We find that our
analysis above substantially covers the substance of all the arguments, which
have been made. But, for purposes of emphasis, we will address various
arguments in order to make individual rebuttals of same.
We are not persuaded of error, on the part of the Examiner, by
Appellant’s argument that the recited function of forming a trading stack in
memory, to manage and insert data representing orders in the trading stack
for orders over a network, reduces the amount of transactions over the
network, and reduces computer workload including computer resources such
as memory, processor resources and network resources such as network
bandwidth. (Appeal Br. 12).
The difficulty with this argument is that we can find no basis for it in
the claim or the Specification. Nowhere in the record is there any
suggestion that a problem associated with computer workload has been
solved by the recited steps of claim 1. The argument is not only not
commensurate in scope with what is claimed but, because the record does
not reflect it, amounts to mere attorney argument. Attorney argument,
however, cannot take the place of record evidence. See In re Geisler, 116
F.3d 1465, 1470 (Fed. Cir. 1997); Johnston v. IVAC Corp., 885 F.2d 1574,
1581 (Fed. Cir. 1989).
We are not persuaded of error, on the part of the Examiner, by
Appellant’s argument that the additional elements of forming a trading stack
Appeal 2019-003353
Application 12/840,187

12

in memory, to manage and insert data representing orders in the trading
stack for orders over a network, are not well-understood, routine, or
conventional. (Appeal Br. 13). However, forming a trading stack in
memory to manage and insert data is part of the abstract idea of facilitating
trading queueing exclusivity/priority based on certain criteria. Appellant’s
argument relies on the ineligible concept itself to establish that the claims
recite an inventive concept. But “[i]t 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, 899 F.3d at 1290.
Moreover, “[n]o matter how much of an advance in the finance field the
claims recite, the advance lies entirely in the realm of abstract ideas, with no
plausibly alleged innovation in the non-abstract application realm.” SAP
America, Inc., 898 F.3d at 1163; see also id. at 1168.
We are not persuaded that the appealed claims are drawn to an
improved user interface which provides advantages over the prior art
systems, such as improved efficiency, and are similar to the claims in Core
Wireless Licensing S.A.R.L. v. LG Electronics MobileComm U.S.A., (Fed.
Cir. 2018). (Appeal Br. 15). In Core Wireless the court held that claims
which recited an interface were patent eligible, as the claims recited specific
limitations of the interface, such as: an application summary that can be
reached through a menu, the data being in a list and being selectable to
launch an application, and additional limitations directed to the actual user
interface displayed and how it functions. Core Wireless, 880 F.3d at 1363.
The court found that the claims were directed to an improved user interface,
and not the abstract concept of an index, as the claim “limitations disclose a
Appeal 2019-003353
Application 12/840,187

13

specific manner of displaying a limited set of information to the user, rather
than using conventional user interface methods to display a generic index on
a computer.” Id. Further, an improvement in efficiency alone does not
render it patent eligible. “While the claimed system and method certainly
purport to accelerate the process of analyzing audit log data, the speed
increase comes from the capabilities of a general-purpose computer, rather
than the patented method itself. See Bancorp Servs., L.L.C. v. Sun Life
Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012) (“‘[T]he
fact that the required calculations could be performed more efficiently via a
computer does not materially alter the patent eligibility of the claimed
subject matter.’).”; FairWarning IP, LLC v. Iatric Sys., 839 F.3d 1089, 1095
(Fed. Cir. 2016).
Appellant argues that the claims are patent eligible because the claims
do not preempt all processes for achieving the intended result. (Appeal Br.
16). Although preemption may signal patent ineligible subject matter, the
absence of complete preemption does not demonstrate patent eligibility. See
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 all price optimization or may be limited to price
optimization in the e-commerce setting do not make them any less
abstract.”). And, “[w]here a patent's claims are deemed only to disclose
patent ineligible subject matter under the Mayo framework, as they are in
this case, preemption concerns are fully addressed and made moot.” Ariosa,
788 F.3d at 1379.
Appeal 2019-003353
Application 12/840,187

14

We are not persuaded of error, on the part of the Examiner, by
Appellant’s argument that the lack of prior art references indicate patent
eligibility. (Appeal Br. 17). To the extent Appellant maintains that the
limitations of claim 1 necessarily amount to “significantly more” than an
abstract idea, because the claimed apparatus is allegedly patentable over the
prior art, Appellant misapprehends the controlling precedent. Although the
second step in the Alice/Mayo framework is termed a search for an
“inventive concept,” the analysis is not an evaluation of novelty or non-
obviousness, but rather, a search for “‘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.”’ Alice,
573 U.S. at 217. A novel and nonobvious claim directed to a purely abstract
idea is, nonetheless, patent-ineligible. See Mayo, 566 U.S. at 90.
In view of the foregoing, we will sustain the Examiner’s rejection of
claim 1 under 35 U.S.C. § 101. We will also sustain the rejection, as it is
directed to the remaining claims, because the Appellant has not argued the
separate eligibility of these claims.

CONCLUSION OF LAW
We conclude the Examiner did not err in rejecting claims 1–20 under
35 U.S.C. § 101.

CONCLUSION
In summary:
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1–20 101 Eligibility 1–20
Appeal 2019-003353
Application 12/840,187

15

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)(1)(iv).
AFFIRMED