Robert Novembre

Patent Trials and Appeals BoardAug 10, 2021

2021000609 (P.T.A.B. Aug. 10, 2021)

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. 14/032,841 09/20/2013 Robert Novembre G8160-00004 1040 156204 7590 08/10/2021 Duane Morris-CHICAGO IP 190 S. LaSalle Street Ste. 3700 Chicago, IL 60603 EXAMINER ANDERSON, JOHN A ART UNIT PAPER NUMBER 3698 NOTIFICATION DATE DELIVERY MODE 08/10/2021 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): IP.Inbox.Chicago@DuaneMorris.com nlvilliard@duanemorris.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte ROBERT NOVEMBRE ____________ Appeal 2021-000609 Application 14/032,841 Technology Center 3600 ____________ Before BIBHU R. MOHANTY, NINA L. MEDLOCK, and ROBERT J. SILVERMAN, Administrative Patent Judges. MEDLOCK, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s final rejection of claims 3, 5–7, and 12–15. We have jurisdiction under 35 U.S.C. § 6(b). We REVERSE. 1 We use the term “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42. Our decision references Appellant’s Appeal Brief (“Appeal Br.,” filed June 9, 2020) and Reply Brief (“Reply Br.,” filed November 2, 2020), and the Examiner’s Answer (“Ans.,” mailed August 31, 2020) and Final Office Action (“Final Act.,” mailed November 26, 2019). Appellant identifies Clarity Markets Holdings LLC as the real party in interest (Appeal Br. 3). Appeal 2021-000609 Application 14/032,841 2 CLAIMED INVENTION The Specification states, “[t]he present invention relates to a new type of financial instrument for trade over an auction platform designed to trade the new financial instrument, a new trading platform and associated system, and a method of trading thereof,” and more specifically to a “new variable maturity long-term security such as a bond or, more specifically, a municipal bond” (Spec. ¶ 2). Claim 3, reproduced below with bracketed notations added, is the sole independent claim, and representative of the subject matter on appeal: 3. A method for trading a biddable financial instrument over a bidding platform, the bidding platform comprising a plurality of user personal computers, each with at least a computer processor with a computer memory for executing software in the computer memory by the computer processor, a computer display and interface connected to the computer processor, and a computer connection to a network, wherein the software in each of the computer processors is an investor software interface of a remote bidding platform, and at least one network-enabled server connected to the network with a server processor and a server memory for executing the bidding platform, wherein the bidding platform is connected to the investor software interfaces via the network for each of the plurality of personal computers, wherein the investor software interface includes a display of a list of positions of financial instruments including at least one opening position of current holdings held in a portfolio of the investor and the software platform to react differently to a desire by the investor to change the volume of a current position of the financial instrument in the list of positions between two subsequent periods, the method including the steps of: [(a)] fixing for an issue of a biddable financial instrument a period during which a floating rate is reset for the issue using the bidding platform for the period; Appeal 2021-000609 Application 14/032,841 3 [(b)] fixing at least two maturity terms associated with the issue of the biddable financial instrument, wherein the first maturity term is a long term and the second maturity term is a short term; [(c)] fixing for the issue a first condition of trading on the bidding platform, resulting in an acceleration of the term of the issue from the long term to the short term; [(d)] fixing for the issue a second condition of trading on the bidding platform, resulting in a deceleration of the term of the issue from the short term to the long term; [(e)] trading on the bidding platform the issue for multiple periods having either the short term or the long term; [(f)] determining based on the trading of the issue on the bidding platform if either the first condition or the second condition has been met; [(g)] wherein the issue is introduced on the bidding platform having the long term, [(h)] wherein the determination step reveals that the first condition has been met, [(i)] wherein the method further includes the steps of changing the term from the long term to the short term for the issue, determining that the second condition has been met and changing the term back from the short term to the long term for the issue, [(j)] wherein the step of determining if either the first condition or the second condition has been met is performed by the bidding platform, wherein the first condition is a failure to allocate the entire issue to holders at each of a first consecutive number of periods, [(k)] wherein the second condition is an allocation of the entire issue to holders at each of a second consecutive number of periods, and wherein the first condition further includes the allocation of a portion of the entire issue to holders at a maximum failure rate. REJECTION Claims 3, 5–7, and 12–15 are rejected under 35 U.S.C. § 101 as directed to a judicial exception without significantly more. Appeal 2021-000609 Application 14/032,841 4 ANALYSIS Under 35 U.S.C. § 101, “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor.” 35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101 to include an implicit exception: “[l]aws of nature, natural phenomena, and abstract ideas” are not patentable. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014). The Supreme Court, in Alice, reiterated the two-step framework previously set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), “for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Alice Corp., 573 U.S. at 217. The first step in that analysis is to “determine whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. If the claims are not directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry ends. Otherwise, the inquiry proceeds to the second step where the elements of the claims are considered “individually and ‘as an ordered combination’” to determine whether there are additional elements that “‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 566 U.S. at 79, 78). This is “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.’” Id. at 217–18 (alteration in original). The U.S. Patent and Trademark Office (the “USPTO”) published revised guidance on January 7, 2019, for use by USPTO personnel in Appeal 2021-000609 Application 14/032,841 5 evaluating subject matter eligibility under 35 U.S.C. § 101. 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50 (Jan. 7, 2019) (the “2019 Revised Guidance”).2 That guidance revised the USPTO’s examination procedure with respect to the first step of the Mayo/Alice framework by (1) “[p]roviding groupings of subject matter that [are] considered an abstract idea”; and (2) clarifying that a claim is not “directed to” a judicial exception if the judicial exception is integrated into a practical application of that exception. Id. at 50. The first step, as set forth in the 2019 Revised Guidance (i.e., Step 2A), is, thus, a two-prong test. In Step 2A, Prong One, we look to whether the claim recites a judicial exception, e.g., one of the following three groupings of abstract ideas: (1) mathematical concepts; (2) certain methods of organizing human activity, e.g., fundamental economic principles or practices, commercial or legal interactions; and (3) mental processes. 2019 Revised Guidance, 84 Fed. Reg. at 54. If so, we next determine, in Step 2A, Prong Two, whether the claim as a whole integrates the recited judicial exception into a practical application, i.e., whether the additional elements recited in the claim beyond the judicial exception, apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception. Id. at 54–55. Only if the claim (1) recites a judicial exception and (2) does not integrate that 2 The MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) incorporates the revised guidance and subsequent updates at Section 2106 (9th ed. Rev. 10.2019, rev. June 2020). Appeal 2021-000609 Application 14/032,841 6 exception into a practical application do we conclude that the claim is “directed to” the judicial exception, e.g., the abstract idea. Id. If the claim is determined to be directed to a judicial exception under revised Step 2A, we next evaluate the additional elements, individually and in combination, in Step 2B, to determine whether they provide an inventive concept, i.e., whether the additional elements or combination of elements amounts to significantly more than the judicial exception itself; only then, is the claim patent eligible. 2019 Revised Guidance, 84 Fed. Reg. at 56. Here, the Examiner determined that the claims, when given their broadest reasonable interpretation, recite trading biddable financial instruments over a bidding platform and making trade adjustments, i.e., a method of organizing human activity and, therefore, an abstract idea (Final Act. 3–7; see also Ans. 7).3 The Examiner also determined that the recited abstract idea is not integrated into a practical application, and that the claims do not include additional elements sufficient to amount to significantly more than the abstract idea itself (Final Act. 7–11). Independent Claim 3 The Federal Circuit has explained that “the ‘directed to’ inquiry applies a stage-one filter to claims, considered in light of the specification, based on whether ‘their character as a whole is directed to excluded subject matter.’” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). It asks whether the focus of the claims is on a 3 The Examiner opined that the claims also can be reasonably interpreted as falling within the “Mental Processes” grouping of abstract ideas (Final Act. 7). Appeal 2021-000609 Application 14/032,841 7 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. Here, the Specification is titled “METHOD OF TRADING A BIDDABLE FINANCIAL INSTRUMENT WITH A VARIABLE MATURITY DATE,” and describes that “[t]he present invention relates to a new type of financial instrument for trade over an auction platform. . . , and more specifically to a new variable maturity long-term security such as a bond, or more specifically, a municipal bond” (Spec. ¶ 15). Claim 3, thus, recites a method for trading a biddable financial instrument over a bidding platform comprising: (1) fixing, for an issue of the financial instrument, a period during which a floating rate for the issue is reset, and fixing at least two maturity terms for the financial instrument, where one maturity term is a long term and the other is a short term, i.e., “fixing for an issue of a biddable financial instrument a period during which a floating rate is reset for the issue using the bidding platform for the period” and “fixing at least two maturity terms associated with the issue of the biddable financial instrument, wherein the first maturity term is a long term and the second maturity term is a short term” (limitations (a) and (b)); (2) fixing a first condition of trading the instrument on the bidding platform that results in acceleration of the issue term from the long term to the short term and a second condition that results in deceleration of the issue term from the short term to the long term, i.e., “fixing for the issue a first condition of trading on the bidding platform, resulting in an acceleration of the term of the issue from the long term to the short term” and “fixing for the issue a second condition of trading on the bidding platform, resulting in a deceleration of the term of the issue from the Appeal 2021-000609 Application 14/032,841 8 short term to the long term” (limitations (c) and (d)); (3) trading the financial instrument on the bidding platform over multiple periods and determining if either condition has been met, i.e., “trading on the bidding platform the issue for multiple periods having either the short term or the long term” and “determining based on the trading of the issue on the bidding platform if either the first condition or the second condition has been met” (limitations (e) and (f)); (4) if the financial instrument has a long maturity term and the first condition has been met, changing the issue term from the long term to the short term and, changing back from the short term to the long term if the second condition is met, i.e., wherein the issue is introduced on the bidding platform having the long term, wherein the determination step reveals that the first condition has been met, wherein the method further includes the steps of changing the term from the long term to the short term for the issue, determining that the second condition has been met and changing the term back from the short term to the long term for the issue, wherein the step of determining if either the first condition or the second condition has been met is performed by the bidding platform, wherein the first condition is a failure to allocate the entire issue to holders at each of a first consecutive number of periods, wherein the second condition is an allocation of the entire issue to holders at each of a second consecutive number of periods, and wherein the first condition further includes the allocation of a portion of the entire issue to holders at a maximum failure rate (limitations (g) through (k)). Applying the 2019 Revised Guidance, we are persuaded, even if claim 3 is directed to an abstract idea, as the Examiner determined, that the Examiner has not sufficiently established, under Step 2B, i.e., the second Appeal 2021-000609 Application 14/032,841 9 step of the Mayo/Alice framework, that claim 3 does not include additional elements or a combination of elements that adds specific limitations beyond the abstract idea that are not “well-understood, routine, or conventional in the field, which is indicative that an inventive concept may be present.” See 2019 Revised Guidance, 84 Fed. Reg. at 56. In Berkheimer v. HP, 881 F.3d 1360 (Fed. Cir. 2018), the Federal Circuit held that, although the ultimate determination of patent eligibility is a question of law, the question, under the second step of the Mayo/Alice test, of “whether a claim element or combination of elements is well-understood, routine, and conventional to a skilled artisan in the field is a question of fact.” Berkheimer, 881 F.3d at 1368. Shortly after the Federal Circuit issued the decision in Berkheimer, the USPTO issued an April 19, 2018 Memorandum to the Patent Examining Corps titled, “Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.)” (the “Berkheimer Memorandum”).4 That memorandum instructed the Patent Examining Corps that, in a step 2B analysis (i.e., an analysis under step two of the Mayo/Alice framework), an additional element (i.e., an element other than the abstract idea) or combination of elements is not well-understood, routine, or conventional unless the examiner finds, and expressly supports a rejection in writing with one or more of (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 4 Available at: https://www.uspto.gov/sites/default/files/documents/memo- berkheimer-20180419.PDF. Appeal 2021-000609 Application 14/032,841 10 court decisions discussed in MPEP § 2106.05(d)(II) as noting the well- understood, routine, conventional nature of the additional element(s)”; and (3) “[a] citation to a publication that demonstrates the well-understood, routine, conventional nature of the additional element(s).” Berkheimer Memorandum 3–4. Here, addressing Step 2B in the Final Office Action, the Examiner determined that claim 3 does not include additional elements that are sufficient to amount to significantly more than the judicial exception (Final Act. 9). The Examiner identified the additional elements as “a data processing device” (id. (“The claim recites the additional limitations of a ‘data processing device.’”)). The Examiner also observed, “using one data processing device to determine trades on the bidding platform . . . is stated at a high level of generality and its broadest reasonable interpretation comprises only the generic use of a processor to conduct financial trades” (id.). The Examiner concluded, “[m]ere instructions to apply an exception using a generic computer component cannot provide an inventive concept” (Final Act. 10). Yet, the difficulty with the Examiner’s analysis, as Appellant observes, is that claim 3 does not recite a “data processing device”; the claim also does not recite “using one data processing device to determine trades on the bidding platform” (Appeal Br. 27). And Figure 3 of the Specification, which Examiner cited as disclosing “generic computer systems and components that conduct the method” (Final Act. 10), is “a third and final illustration from the prior art” (Spec. ¶ 19). Appeal 2021-000609 Application 14/032,841 11 Claim 3 recites that the method steps are performed using “a bidding platform” — an element that, as described in the preamble of claim 3, comprises: a plurality of user personal computers, each with at least a computer processor with a computer memory for executing software in the computer memory by the computer processor, a computer display and interface connected to the computer processor, and a computer connection to a network, wherein the software in each of the computer processors is an investor software interface of a remote bidding platform, and at least one network-enabled server connected to the network with a server processor and a server memory for executing the bidding platform, wherein the bidding platform is connected to the investor software interfaces via the network for each of the plurality of personal computers, wherein the investor software interface includes a display of a list of positions of financial instruments including at least one opening position of current holdings held in a portfolio of the investor and the software platform to react differently to a desire by the investor to change the volume of a current position of the financial instrument in the list of positions between two subsequent periods. The Examiner has not established, on this record, that the recited billing platform, i.e., an additional element beyond the abstract idea, is “well- understood, routine, or conventional” in the field.5 And, as such, the Examiner has not established a prima facie case of patent ineligibility. 5 As an aside, we note that Appellant overcame a rejection under § 101 in a related application, Serial No. 13/902,496 (see Appeal Br. 19–21). The sole independent claim 1 in that application was directed to a system for implementing a competitive bidding software platform, and recited, in the body of the claim, that the system comprises “an investor software interface,” wherein the investor software interface includes a display of a list of positions including at least one opening position of current holdings held in a portfolio of the investor and the competitive Appeal 2021-000609 Application 14/032,841 12 Accordingly, we do not sustain the Examiner’s rejection of independent claim 3 under 35 U.S.C. § 101. Dependent Claims 5–7 and 12–15 Each of claims 5–7 and 12–15 depends from independent claim 3, and therefore, includes all of the limitations of claim 3. Therefore, we do not sustain the Examiner’s rejection under 35 U.S.C. § 101 of these dependent claims for the same reasons set forth above with respect to claim 3. bidding software platform to react differently to a desire by the investor to change the volume of a current position in the list of positions between two subsequent periods. See Response to Non-Final Office Action filed July 25, 2019. The claims in the related application were deemed patent eligible because, in the words of the Notice of Allowance: [U]nder Step 2B, the claims include more than mere features or functions that are well-understood, routine or conventional in the relevant field. For example, it is not routine or conventional in the relevant field (at least insofar as the art of record indicates) to “wherein the investor software interface includes a display of a list of positions including at least one opening position of current holdings held in a portfolio of the investor and the competitive bidding software platform to react differently to a desire by the investor to change the volume of a current position in the list of positions between two subsequent periods” as claim 1 now recites. See Appeal Br. 20. Claim 3 at issue here includes substantially identical language. Appeal 2021-000609 Application 14/032,841 13 CONCLUSION In summary: Claim(s) Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 3, 5–7, 12–15 101 Eligibility 3, 5–7, 12–15 REVERSED