Paul D. Adcock et al.

Patent Trials and Appeals Board

Sep 4, 2019

11416943 - (D) (P.T.A.B. Sep. 4, 2019)

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.
11/416,943 05/03/2006 Paul D. Adcock NGI-14-1144R 8303
35811 7590 09/04/2019
IP GROUP OF DLA PIPER LLP (US)
ONE LIBERTY PLACE
1650 MARKET ST, SUITE 5000
PHILADELPHIA, PA 19103
EXAMINER
VYAS, ABHISHEK
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
09/04/2019 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):
pto.phil@us.dlapiper.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte PAUL D. ADCOCK, MICHAEL A. CORMACK,
THOMAS F. HALLER, and ROBERT A. HILL
____________________

Appeal 2018-005874
Application 11/416,9431
Technology Center 3600
____________________

Before JOHN A. EVANS, JOHN P. PINKERTON, and
MICHAEL M. BARRY, Administrative Patent Judges.

PINKERTON, Administrative Patent Judge.

DECISION ON APPEAL

Appellants appeal under 35 U.S.C. § 134 from the Examiner’s Final
Rejection of claims 1–23 and 26–29. Claims 22–25 are canceled. We have
jurisdiction under 35 U.S.C. § 6(b).
We reverse.

1 Appellants identify NYSE Group, Inc. as the real party in interest. App.
Br. 2.
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STATEMENT OF THE CASE
Introduction
Appellants generally describe the disclosed and claimed invention as
follows:
A tracking liquidity order and related market center and
process are disclosed which allow posting market centers (e.g.
exchanges) to fill routable, smaller orders that would have
otherwise routed off the posting market center. Such tracking
liquidity orders increase the liquidity of that posting market
center and allow it to execute more orders internally, without
having to route them to an away market center.
Abstract.2
Claims 1 and 14–16 are independent claims. Claim 1 is representative
of the subject matter on appeal and reads as follows:
1. A computer-implemented method comprising:
in a computing system comprising a posting market
center computer coupled to a plurality of external data sources
via a network, the posting market center computer having at
least one memory with at least one region for storing executable
program code and at least one processor for executing the
program code stored in the memory, the program code defining
at least one interface, at least one order matching engine, and at
least one order book:
receiving, via the at least one interface from among the
external data sources, displayed and nondisplayed orders, at
least one of the nondisplayed orders comprising a tracking
liquidity order having a price and size component, the tracking
liquidity order configured to only execute on the posting market

2 Our Decision refers to the Final Office Action mailed May 31, 2017
(“Final Act.”), Appellants’ Appeal Brief filed October 17, 2017 (“App. Br.”)
and Reply Brief filed May 22, 2018 (“Reply Br.”), the Examiner’s Answer
mailed March 22, 2018 (“Ans.”), and the original Specification filed May 3,
2006 (“Spec.”).
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center computer, no price nor size component of the tracking
liquidity order being displayed on the order book;
storing, by the order matching engine in the order book,
the displayed and nondisplayed orders according to a ranking
index and a price index, the ranking index being based on an
extent of disclosure of the displayed and nondisplayed orders,
the tracking liquidity order positioned in the order book
according to a tracking liquidity order ranking and the price of
the tracking liquidity order;
receiving, via the at least one interface, from among the
external data sources, an incoming order that is eligible for
routing to an away market among the external data sources; and
determining, by the order matching engine to prevent
said incoming order that is eligible for routing to the away
market from being routed to the away market by:
(i) interrogating the price index of the order book
corresponding to a price of the incoming order to identify
a contra side order in the order book;
(ii) interrogating the ranking index of the order
book to determine whether the contra side order is the
tracking liquidity order;
(iii) determining that a size of the incoming order
is not greater than the size component of the tracking
liquidity order based on information associated with the
tracking liquidity order in the order book; and
(iv) executing said incoming order against the
tracking liquidity order without routing said incoming
order to the away market.
App. Br. 24 (Claims App’x).
Rejection on Appeal
Claims 1–23 and 26–29 stand rejected under 35 U.S.C. § 101 as being
directed to a judicial exception (i.e., an abstract idea) without significantly
more. Final Act. 7–11.
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ANALYSIS
On May 31, 2017, the Office mailed the Final Office Action, in which
the Examiner rejected claims 1–23 and 26–29 under 35 U.S.C. § 101 as
being directed to a judicial exception (i.e., an abstract idea) without
significantly more. Final Act. 7–11. In step 2B of the § 101 analysis, the
Examiner asserted that “[t]he claim(s) do not include additional elements
that are sufficient to amount to significantly more than the judicial exception
because the additional computer elements, which are recited at a high level
of generality, provide conventional computer functions that do not add
meaningful limitations to practicing the abstract idea.” Id. at 8. The
Examiner further asserted that “generic computer components are claimed to
perform their basic functions of storing, retrieving, processing, and
displaying that are well-understood, routine, and conventional activities
which amount to no more than implementing the abstract idea with a
computerized programmed system.” Id. at 11.
On October 17, 2017, Appellants filed the Appeal Brief, disputing,
among other things, the Examiner’s assertions that the additional elements
recited in claim 1 are well-understood, routine and conventional. App. Br.
11–14. In particular, Appellants argued that “the claimed routing prevention
mechanism (which does not exist in the prior art computer networks in this
field) enables Appellants’ network to operate differently (and better) from
conventional computer networks.” Id. at 12. Appellants also argued that
their “invention is able to fully process and execute an order that would
otherwise be rerouted to another market by a conventional system.” Id. at
13. Appellants further argued that the “order book structure itself is also
unconventional, does not exist in prior art electronic trading networks, and
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provides computer functioning improvements,” such as “efficient storage
(and retrieval) of order data for multiple order types (e.g., displayed/partially
displayed/non-displayed orders).” Id. at 13–14 (emphasis omitted).
On February 8, 2018, the Federal Circuit issued its decision in
Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018). In Berkheimer, the
Federal Circuit held that “[t]he question of whether a claim element or
combination of elements is well-understood, routine and conventional to a
skilled artisan in the relevant field is a question of fact.” Berkheimer, 881
F.3d at 1368.
On March 22, 2018, the Office mailed the Examiner’s Answer, in
which the Examiner again found that the recited claim elements and their
respective functions are well-understood, routine and conventional. Ans. 5–
8. First, the Examiner asserted that “[t]he courts have found functions such
as filtering, sorting, eliminating, formatting, indexing data as routine,
conventional and well understood.” Id. at 5 (citing Versata Dev. Grp. v.
SAP Am., Inc., 793 F. 3d 1306, 1335 (Fed. Cir. 2015); Bascom
Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1348
(Fed. Cir. 2016); In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 611
(Fed. Cir. 2016); Intellectual Ventures I LLC v. Erie Indem. Co., 850 F.3d
1315, 1326–27 (Fed. Cir. 2017); Elec. Power Grp., LLC v. Alstom S.A., 830
F.3d 1350, 1353–54 (Fed. Cir. 2016)). Second, the Examiner asserted that
“[t]he Courts have found classifying data and organizing data in an indexed
manner as routine, conventional and well understood.” Id. (citing TLI, 823
F.3d at 611; Intellectual Ventures, 850 F.3d at 1326–27). Third, the
Examiner found that the “collective functions” of the claimed computing
elements “merely provide conventional computer implementation.” Final
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Act. 11. Fourth, the Examiner also found that “[p]roviding different means
of organizing and indexing information is considered well understood,
routine, and conventional.” Ans. 6. Fifth, the Examiner found that
“[f]iltering of data, displaying analyzed results, displaying complex
information concurrently have all been found by the Courts to be well
understood, routine and conventional and nothing more than the generic
function of a display.” Id. at 7 (citing Elec. Power Grp., 830 F.3d at 1355;
Parker v. Flook, 437 U.S. 584, 590 (1978); Gottschalk v. Benson, 409 U.S.
63, 64–65 (1972); Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1242–43
(Fed. Cir. 2016); Versata, 793 F.3d at 1335; Intellectual Ventures I LLC v.
Capital One Fin. Corp., 850 F.3d 1332, 1341 (Fed. Cir. 2017)). Sixth, the
Examiner found “[t]he claimed concept here does not rely on a technical
basis such as a TCP[/]IP or similar protocol to monitor and filter or flag data
on a technical basis, rather relies on functions rooted in conventional data
filtering, sorting and presentation.” Id. at 8.
On April 19, 2018, in response to Berkheimer, the Patent Office
issued new guidelines for examining patent applications under Step 2B of
the Mayo/Alice framework. See Robert W. Bahr, Changes in Examination
Procedures Pertaining to Subject Matter Eligibility, Recent Subject Matter
Eligibility Decision (Berkheimer v. HP, Inc.), USPTO 1–5 (2018) (“USPTO
Memorandum”). The USPTO Memorandum set forth a new fact finding
requirement for examiners with respect to the step 2B analysis of rejections
under § 101 based on patent-ineligible subject matter. See Alice Corp. v.
CLS Bank Int’l, 573 U.S. 208, 217–18 (2014). In particular, the USPTO
Memorandum provides that, in a step 2B analysis, an additional element (or
combination of elements) is not well-understood, routine or conventional
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unless the examiner finds, and expressly supports a rejection in
writing with, one or more of the following:
(1) [a] citation to an express statement in the Specification or to
a statement made by an applicant during prosecution that
demonstrates the well-understood, routine, conventional
nature of the additional element(s)[;] . . .
(2) [a] citation to one or more of the court decisions discussed
in MPEP § 2106.05(d)(II) as noting the well-understood,
routine, conventional nature of the additional element(s)[;] .
. .
(3) [a] citation to a publication that demonstrates the well-
understood, routine, conventional nature of the additional
element(s)[; and,] . . .
(4) [a] statement that the Examiner is taking official notice of
the well-understood, routine, conventional nature of the
additional element(s). . . .
USPTO Memorandum 3–4.
On May 22, 2018, Appellants filed their Reply Brief, arguing, among
other things, that the Examiner erred by failing to provide sufficient
evidence to support the assertions that the additional limitations of the
claims were “well‑understood, routine, and conventional,” as required under
Berkheimer. Reply Br. 3–5. In particular, Appellants argue “the Examiner
continues to allege that the Appellants’ claims operate in a conventional
manner, but fails to prove any evidence whatsoever to support such an
assertion.” Id. at 3. According to Appellants, “simply alleging or stating
that something is ‘well understood, routine and conventional’, without any
actual evidentiary support is not an adequate basis for sustaining a rejection
under §101.” Id. (citing Berkheimer, 881 F.3d at 1368–69). Appellants
further argue that the additional elements of claim 1 are not conventional
because
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both the [S]pecification and claims describe (among other
things) a posting market center computer with very specific
structures (interface(s), an order matching engine and an order
book) that together, enable the posting market center computer
to keep and execute orders that conventional systems in the art
would ordinarily have to route to external systems for
execution. The [S]pecification describes creating a uniquely
configured order book that indexes and arranges
displayed/partially displayed/non-displayed orders according to
a ranking index and a pricing index; that the order matching
engine implements a routing prevention mechanism with
specific rules for interrogating the price and ranking indices of
the order book structure; and that these interrogation rules
coupled with the particularly structured order book enables the
(same) computer to execute an incoming order against a
tracking liquidity order without having to route the incoming
orders to the away market system (i.e., another computer
system in the network), as occurs in conventional systems in
this art.
Id. at 4–5. Therefore, Appellants “submit that because [the Examiner’s]
assertions are false and unsupported by any factual evidence, any rejection
based thereon is improper and should be reversed.” Reply Br. 3.
We are persuaded by Appellants’ arguments that the Examiner erred.
Although the Examiner cites various case law in the Answer as evidence that
certain functions of claim 1 are conventional, these elements are part of the
alleged abstract ideas themselves, which pertain to Step 2A—not Step 2B—
of the § 101 analysis. The Examiner does not provide sufficient evidence, as
required by Berkheimer and explained by the USPTO Memorandum, to
support the assertion under Step 2B of the § 101 analysis that each of the
additional elements of claim 1—i.e., posting market center computer having
at least a memory and a processor, the external data sources, the network,
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the matching engine, and the order book—are well-understood, routine, and
conventional.
Thus, upon considering the Examiner’s rejection of claims 1–23 and
26–29 under §101 as being directed to patent-ineligible subject matter in
view of the Federal Circuit’s decision in Berkheimer, the USPTO
Memorandum, and Appellants’ arguments, we are constrained on this record
to reverse the Examiner’s rejection of claims 1–23 and 26–29 under § 101
because the step 2B analysis of the rejection is not properly supported by
evidence that each of the additional elements of claim 1 is “well-understood,
routine, and conventional.”

DECISION
We reverse the Examiner’s rejection of claims 1–23 and 26–29 under
35 U.S.C. § 101.

REVERSED