BGC PARTNERS, INC.

Patent Trials and Appeals Board

Mar 1, 2022

2021004139 (P.T.A.B. Mar. 1, 2022)

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. 15/983,577 05/18/2018 Nigel J. Renton 03-6171-C1 3654 63710 7590 03/01/2022 CANTOR FITZGERALD, L.P. INNOVATION DIVISION 110 EAST 59TH STREET NEW YORK, NY 10022 EXAMINER ROBINSON, KITO R ART UNIT PAPER NUMBER 3619 NOTIFICATION DATE DELIVERY MODE 03/01/2022 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): Caitlyn.kelly@chareiter.com gabriella.zisa@chareiter.com patentdocketing@cantor.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________________ Ex parte NIGEL J. RENTON, and MICHAEL SWEETING ____________ Appeal 2021-004139 Application 15/983,577 Technology Center 3600 ____________ Before ANNETTE R. REIMERS, WILLIAM A. CAPP, and LISA M. GUIJT, Administrative Patent Judges. CAPP, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Appellant1 seeks our review under 35 U.S.C. § 134(a) of the non-final rejection of claims 1, 3-8, 10-18, and 20-23 under 35 U.S.C. § 101 as directed to a judicial exception to patentable subject matter. We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. 1 We use the word “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42(a). Appellant identifies BGC Partners, Inc. as the Applicant and real party in interest. Appeal Br. 1. Appeal 2021-004139 Application 15/983,577 2 THE INVENTION Appellant’s invention relates to computerized market trading. Spec. 1. Claim 15, reproduced below with paragraph indentation added, is illustrative of the subject matter on appeal. 15. An electronic trading system for managing trading, comprising: a computer system having a processor; and a computer readable medium comprising processor readable instructions that when executed by the processor, cause the processor to: receive a first bid for a first instrument from a first market maker at a first bid price, and a first offer for the first instrument from a second market maker at a first offer price, the first offer price being lower than the first bid price; compare the first offer price to the first bid price, and determine whether the first bid and first offer are both from market makers, and if the first offer price is lower than the first bid price establishing a crossing bid and the orders are both from market makers, automatically decrease the first bid price to match the first offer price and then delay any automatic action toward executing the orders against each other by the computer system until expiration of a first timer having a predetermined duration from the receipt of the two orders; before the first timer expires: receive from the first market maker an instruction to increase the first bid price to a new increased first bid price above the first offer price; increase the first bid price to the new increased first bid price as a result of receiving the instruction; and as a result of the first bid price being increased above the first offer price, automatically increase the first offer price to match the new increased first bid price and restart the first timer; and display to a customer at a customer terminal of the computer system a bid-offer spread, but not the crossing bid, prior to expiration of the first timer, wherein the bid price and the offer price of the bid-offer spread are both equal to the first bid price. Appeal 2021-004139 Application 15/983,577 3 OPINION Appellant argues all pending claims as a group. Appeal Br. 5-11. Claim 15 is representative. See 37 C.F.R. § 41.37(c)(1)(iv). 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 courts interpret Section 101 as excluding abstract ideas from patentable subject matter. Bilski v. Kappos, 561 U.S. 593, 601 (2010); Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014). The Supreme Court has set forth a framework for distinguishing patents that claim abstract ideas from those that claim patent-eligible applications of such ideas. Alice, 573 U.S. at 217 (citing Mayo Collaborative Servs. v. Prometheus Labs, Inc., 566 U.S. 66, 72-73 (2012)). According to the Supreme Court’s Alice/Mayo framework, we must first determine whether the claims at issue are directed to an abstract idea. Id. If so, we must consider the elements of each claim both individually and as an ordered combination to determine whether additional elements transform the nature of the claim into a patent-eligible application. Id. In situations where an abstract idea is implemented on a computer, the first step in the Alice/Mayo analysis asks whether the focus of the claims is on a specific improvement in computer capabilities or, instead, on a process that qualifies as an “abstract idea” for which computers are invoked merely as a tool. Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335-36 (Fed. Cir. 2016). The Supreme Court characterizes the second step of the 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 Appeal 2021-004139 Application 15/983,577 4 significantly more than a patent upon the [ineligible concept] itself.”’ Alice, 573 U.S. at 217-18 (brackets in original) (quoting Mayo, 566 U.S. at 72). We apply the PTO’s published guidance on the application of Section 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (hereinafter the “Guidelines”). Under the Guidelines, in conducting step one of the Alice framework, we first look to whether the claim recites: (1) a judicial exception such as an abstract idea; and (2) additional elements that integrate the judicial exception into a practical application. Id., see also MPEP § 2106.05((a)-(c), (e)-(h)). In other words, under prong 1 of an abstract idea analysis, we look to whether the claim recites an abstract idea. Then, if it does, under prong 2, we look at the claim, as a whole, and determine whether the claim is “directed to” the abstract idea or, instead, is “directed to” a “practical application” of the abstract idea. Step 1, Prong 1 The Guidelines identify as abstract ideas: (a) mathematical concepts; (b) mental processes; and (3) methods of organizing human activity. The courts also recognize a method of organizing human activity as an abstract idea. See In re TLI Communications LLC Patent Litig., 823 F.3d 607, 613 (Fed. Cir. 2016) (classifying and storing digital images is an abstract idea as a method of organizing human activity); see also Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1367 (Fed. Cir. 2015) (tracking financial transactions to determine whether they exceed a pre-set spending Appeal 2021-004139 Application 15/983,577 5 limit is an abstract idea as a method of organizing human activity); Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016) (screening messages is an abstract idea as a method of organizing human activity); BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1348 (Fed. Cir. 2016) (filtering internet content is an abstract idea as a method of organizing human behavior). With respect to the first step, the Examiner determines that the claimed electronic trading system is directed to an abstract idea in the form of a fundamental economic practice which is a method of organizing human activity. Final Act. 7-8. Appellant argues against the Examiner’s findings under prong 1 by asserting that clam 15 recites a “particular machine.” Appeal Br. 5-6. There is no real question here that claim 15 recites a judicial exception. Claim 15 recites comparing “offers” and “bid prices” in connection with making market trades. Claims App. We agree with the Examiner that such entails a fundamental economic practice long prevalent in our system of commerce. Alice, 573 U.S. at 219, Bilski 561 U.S. at 611. In challenging the Examiner’s findings under prong 1, Appellant argues that the claim uses a “particular machine.” Appeal Br. 5. This argument is off the mark. Under our Guidelines, a “particular machine” issue relates to whether a claim is “directed to” an abstract idea under prong 2, not whether it “recites” an abstract idea under prong 1. See Guidelines, 84 Fed. Reg. at 54-55. Step 1, Prong 2 Under Prong 2 of Step 1 of the Guidelines, we do not assume that all claims that “recite” an abstract idea are “directed to” the abstract idea Appeal 2021-004139 Application 15/983,577 6 because “all inventions [at some level] embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016) quoting Alice. Instead, “the claims are considered in their entirety to ascertain whether their character as a whole is directed to excluded subject matter.” McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299, 1312 (Fed. Cir. 2016). If the claims are not directed to an abstract idea, the inquiry ends. Guidelines. If the claims are “directed to” an abstract idea, then the inquiry proceeds to the second step of the Alice framework. Id. Consequently, we consider whether the claimed market trading system includes additional elements that integrate the judicial exception into a practical application. A claim that integrates a judicial exception into a practical application will 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. Guidelines, 84 Fed. Reg. at 53. Here, Appellant argues that claim 15 is directed to a practical application. Appeal Br. 6. Appellant characterizes its ability to disallow crossed markets between market makers, which would automatically trigger execution of a trade, as a “practical application” of the abstract idea. Id. Appellant further argues that the claim restricts the application of the abstract idea to displaying a locked price to customer, but not the crossing bid, prior art expiration of the timer. Id. According to Appellant, One would typically expect trades to automatically execute between market makers in a crossed market condition. But, this is not the case with Appellant's trading system . . . Appellant’s trading system is configured to create “some delay time in order to decide whether to avoid automatically executed trade with Appeal 2021-004139 Application 15/983,577 7 subsequent orders from other market makers” after changing a prior bid to establish a locked market . . . This is particularly beneficial in an electronic trading environment. Id. Appellant attempts analogize this case to Trading Techs. Int’l v. CQG, Inc., 675 Fed. Appx. 1001, 1002 (Fed. Cir. 2017), which purportedly entails “pricing issues that arise due to rapid market movement.” Appeal Br. 7, citing Trading Techs at 1002-03. Appellant also attempts to analogize the instant case to that of another non-precedential decision, EcoServices, LLC v. Certified Aviation Serv., LLC, 830 Fed. Appx. 634 (Fed. Cir. 2020). Appeal Br. 8. In response, the Examiner explains that determining whether a claim integrates a judicial exception into a practical application takes into consideration whether the claimed invention improves either: (1) the functioning of the computer itself; or (2) some other technology or technical field. Ans. 6. The Examiner finds that Appellant’s claims of technological elements amount to no more than mere instructions to apply the judicial exception using a generic computer. Id. at 7. In reply, Appellant provides a single paragraph comprised of six lines of text. Reply Br. 2. Appellant, without elaboration, maintains its arguments from the Appeal Brief. Id. Appellant makes no attempt to rebut the Examiner’s findings that Appellant’s technological claim elements amount to no more than mere instructions to apply the judicial exception using a generic computer. Id. We are not persuaded by Appellant’s arguments that the claims are directed to a practical application of the abstract idea. In particular, we do not agree that Appellant’s invention is in anyway analogous to Trading Techs. Trading Techs involved a user interface that features a particular Appeal 2021-004139 Application 15/983,577 8 manner of arranging and presenting information on electronic devices. Trading Techs, 675 Fed. Appx. at 1003. The patents describe a trading system in which a graphical user interface “display[s] the market depth of a commodity traded in a market,2 including a dynamic display for a plurality of bids and for a plurality of asks in the market for the commodity and a static display of prices corresponding to the plurality of bids and asks.” ’132 patent col. 3, ll. 11-16; ’304 patent col. 3, ll. 15-20. In the patented system bid and asked prices are displayed dynamically along the static display, and the system pairs orders with the static display of prices and prevents order entry at a changed price. Id. An improved graphical user interface can potentially serve as a practical application. Many systems in a wide variety of technologies employ or engage human operators or users. Human information processing through a user interface falls largely into the realm of ergonomics. Skilled practitioners in the field of ergonomics understand that, in appropriate circumstances, the overall performance of a man-machine system can be improved by improving the rate of information transfer between the user/operator and the machine that takes place through the controls and displays of a user interface. The Federal Circuit, in Trading Techs, agreed with the district court below that the claims require a specific, structured graphical user interface paired with a prescribed functionality directly related to the graphical user interface’s structure that is addressed to and resolves a specifically identified problem in the prior state of the art. Id. at 1004. 2 “A commodity’s market depth is the current bid and ask prices and quantities in the market.” Trading Techs, 675 Fed. Appx. at 1003, n. 1. Appeal 2021-004139 Application 15/983,577 9 There is nothing in Appellant’s disclosure or claims that is remotely analogous to the situation presented in Trading Techs. Appellant’s claim merely recites the following: [D]isplay to a customer at a customer terminal of the computer system a bid-offer spread, but not the crossing bid, prior to expiration of the first timer, wherein the bid price and the offer price of the bid-offer spread are both equal to the first bid price. Claims App., claim 15. Appellant merely provides the user with an interface that allows a customer to participate in a trade. Id. Although Appellant’s claim includes a user interface (display), the claim is directed to market trading, not an improved user interface. Appellant does not direct us to any recitations in the claims or any disclosure in the Specification that so summarizes, organizes, and selectively filters and displays information that the claim can be considered to be “directed to” an improvement in user interface technology that amounts to a “practical application” of an abstract idea. Almost every user-operated computer system has an interface by which the user interacts with the software installed on the system. Were we to accept Appellant’s position, any and every computer device with a display screen would be deemed a practical application of an abstract idea. Merely displaying trade related information on a computer screen does not rise to the level of a practical application of an abstract idea under our Guideline. Similarly, Appellant’s effort to analogize the instant case to EcoServices hits well wide of the mark. According to the EcoServices court, the claims at issue were not directed to a result or effect that itself was the abstract idea (automated washing), but rather were directed to obtaining cleaner jet engines. EcoServices, 830 Fed. Appx. at 642. The practical application was getting the engines cleaner. There is no analog to a Appeal 2021-004139 Application 15/983,577 10 achieving a cleaner engine in the instant case. Appellant claims a system for computerized trading. What Appellant considers to be the “practical application” is merely the abstract idea itself, namely, the fundamental economic practice of market trading. The Examiner is correct that Appellant’s electronic trading system is merely a generic computer embodiment of its abstract idea. Ans. 8. The claims, thus, fail to integrate the judicial exception into a practical application and, therefore, are “directed to” an abstract idea. Step 2 Turning to step 2 of the Alice/Mayo analysis, we look more precisely at what the claim elements add in terms of whether they identify an “inventive concept” in the application of the ineligible matter to which the claim is directed. SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1167 (Fed. Cir. 2018). “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].’” Alice, 573 U.S. at 221 (quoting Mayo, 566 U.S. at 77-78). Those “additional features” must be more than well-understood, routine, conventional activity. Mayo, 566 U.S. at 79. Under step two of the Alice/Mayo framework, the Examiner determines, The claims, individually or in combination, do not include additional elements that are sufficient to amount to significantly more than the judicial exception because as discussed with respect to Step 2A Prong Two, the additional element in the claim amounts to no more than mere instructions to apply the exception using a generic computer component . . . Mere Appeal 2021-004139 Application 15/983,577 11 instructions to apply an exception cannot provide an inventive concept. Final Act. 8-9. Appellant argues that the claims require automatically decreasing a bid price to match an offer price in response to a cross market condition and then delaying an automatic action toward executing orders against each other until expiration of a timer. Appeal Br. 9. Appellant also argues that the claims require displaying a locked price to a customer terminal, but not the crossing bid, prior to expiration of the timer. Id. Appellant characterizes the foregoing as “unconventional” features that improve the electronic trading experience and, in so doing, satisfy the “significantly more” requirement of the Alice/Mayo analysis. Id. Appellant argues that they constitute an “inventive concept” that is used in a “meaningful way” so as to render the subject matter eligible for patenting. Id. The rejection fails to establish that automatically decreasing a bid price to match an offer price and then delaying any automatic action toward executing the orders against each other until expiration of a timer is a technique that is well-understood, routine or conventional . . . The rejection also fails to establish that preventing the display of a crossed price, while displaying a corresponding locked price established by setting the bid price and offer price equal to each other, is well understood, routine or conventional. Id. at 10. Appellant also criticizes the Examiner for failing to comply with the Guidelines related to the so-called Berkheimer memo3 that was published 3 Memorandum from the U.S. Patent & Trademark Office, Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.) (Apr. 19, 2018). Appeal 2021-004139 Application 15/983,577 12 after the Federal Circuit’s decision in Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018). Appeal Br. 9-10. Appellant’s argument is not persuasive. The claim elements that Appellant asserts are not well-understood, routine, or conventional are just aspects of the abstract idea itself. However, the phrase “additional elements” in the Step 2 analysis means what it says. They are claim elements that are in “addition” to recital of an abstract idea. Guidelines, 84 Fed. Reg. at 55, n. 24. However, even if we assume that the claimed techniques are “[g]roundbreaking, innovative, or even brilliant,” that is not enough for eligibility. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013). The elements that are recited in claim 15 that are in addition to the recitals of the abstract idea comprise: (1) a computer system with a processor; (2) a computer readable medium with instructions; and (3) a customer terminal display. Claims App., claim 15. Appellant’s Specification admits that computers used in the invention may be any “suitable device” such as a personal computer. Spec. 7-8. The system also includes conventional human interface devices such as a mouse, keyboard, or pointer. Id. at 8. Appellant describes communications network 20 as a communicative platform that uses an internet architecture. Id. at 9. Appellant’s trading platform 18 may be a computer, but a human agent may act as a proxy or broker for placing orders on trading platform 18. Id. at 10. Most of Appellant’s Specification is devoted to describing various trading management rules and procedures. Id. at 11-22. Appellant describes the computer technology used by the invention at a high level of generality that presumes familiarity on the part of the reader. Appellant provides neither Appeal 2021-004139 Application 15/983,577 13 evidence nor persuasive technical argument that it has achieved an improvement in computer technology. See generally Appeal Br. For purposes of the Alice/Mayo analysis, a specification demonstrates the well- understood, routine, conventional nature of step 2 “additional elements” when it describes them in a manner that indicates they are sufficiently well- known that they need not be described with particularity to satisfy 35 U.S.C. § 112(a). Berkheimer memo, III.A.1. That is the case here. Where a claim is directed to an abstract idea that is implemented on a computer, merely stating the abstract idea while adding the words “apply it” is not enough to establish such an inventive concept. Alice, 573 U.S. at 223. [I]f that were the end of the § 101 inquiry, an applicant could claim any principle of the physical or social sciences by reciting a computer system configured to implement the relevant concept. Id. at 224. Appellant’s computerized trading system falls squarely within the rule laid down by the Supreme Court in Alice. Accordingly, for the above reasons, the recited elements of claim 15, considered individually and as an ordered combination, do not constitute an “inventive concept” that transforms independent claim 1 into patent-eligible subject matter. On this record, we sustain affirm the Examiner’s § 101 rejection of claim 1, as well as claims 3-8, 10-18, and 20-23 that fall therewith. CONCLUSION Claims Rejected 35 U.S.C. § Basis Affirmed Reversed 1, 3-8, 10-18, 20-23 101 Eligibility 1, 3-8, 10-18, 20-23 Appeal 2021-004139 Application 15/983,577 14 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