CFPH, LLC

Patent Trials and Appeals Board

Jun 2, 2021

2019005539 (P.T.A.B. Jun. 2, 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.
14/576,995 12/19/2014 James R. Driscoll 07-2112-C2 7292
63710 7590 06/02/2021
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
KALINOWSKI, ALEXANDER G
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
06/02/2021 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):
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 JAMES R. DRISCOLL and
MATTHEW W. CLAUS1
____________

Appeal 2019-005539
Application 14/576,995
Technology Center 3600
____________

Before CARL W. WHITEHEAD JR., JEFFREY S. SMITH, and
PHILLIP A. BENNETT, Administrative Patent Judges.

SMITH, Administrative Patent Judge.

DECISION ON APPEAL

1 We use “Appellant” to refer to “applicant” as defined in 37 C.F.R. §
1.42. Appellant identifies BGC Partners, Inc. as the real party in interest.
Appeal Br. 3.
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Application 14/576,995

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STATEMENT OF THE CASE
This is an appeal under 35 U.S.C. § 134(a) from the Examiner’s final
rejection of claims 33–38, 40, and 41, which are all claims remaining in the
application. See Appeal Br. 6. We have jurisdiction under 35 U.S.C. § 6(b).
We affirm.

Illustrative Claim
Claim 33 is independent, and recites:
33. A method for correcting network delays in a trading
system, in which the method comprises:
transmitting, by at least one processor, data indicative of a
of a bid or offer to an electronic trading system;
transmitting, by the at least one processor, a request to
cancel the bid or offer;
receiving, by the at least one processor, an indication that
the request to cancel was unsuccessful as a result of the bid or
offer having already been matched,;
computing, by the at least one processor, a lag time
between when the request to cancel was submitted and when the
request to cancel was received by the trading system; and
adjusting, by the at least one processor, at least one trading
algorithm based at least in part on the lag time so as to improve
a response time to any future requests to cancel.

Examiner’s Rejection
Claims 33–38, 40, and 41 stand rejected under 35 U.S.C. § 101 as
directed to patent ineligible subject matter.

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ANALYSIS
The Examiner determines that the claims are directed to a method of
receiving a request, determining a lag time, and adjusting an algorithm based
on the lag time, which amounts to an abstract idea without significantly
more. Final Act. 4; see Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217
(2014) (describing the two-step framework “for distinguishing patents that
claim laws of nature, natural phenomena, and abstract ideas from those that
claim patent-eligible applications of those concepts.”).
The USPTO published revised guidance on the application of § 101.
2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50
(January 7, 2019) (hereinafter “Memorandum”).2 Under the Memorandum,
the Office first looks to whether the claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., (a) mathematical concepts, (b) certain
methods of organizing human activity such as a fundamental
economic principles and practice, commercial or legal
interactions, managing personal behavior, relationships,
interpersonal interactions, (c) 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. 2018).

2 In January 2019, the United States Patent and Trademark Office
(“USPTO”) published revised guidance on the application of 35 U.S.C.
§ 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed.
Reg. 50 (January 7, 2019) (“2019 Guidance”), updated by USPTO, October
2019 Update: Subject Matter Eligibility (available at https://www.uspto.gov/
sites/default/files/documents/peg_oct_2019_update.pdf) (jointly referred to
as “the 2019 Guidance”); see also October 2019 Patent Eligibility Guidance
Update, 84 Fed. Reg. 55942 (October 18, 2019) (notifying the public of the
availability of the October update).
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Only if a claim (1) recites a judicial exception and (2) does not integrate
that exception into a practical application, does the Office then look to
whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is 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 Memorandum.
Appellant contends that independent claim 33 integrates the abstract
idea into a practical application, because it improves the functioning of the
computer by ensuring that a canceled bid does not fail due to network
latency. Appeal Br. 8. Appellant contends that the claimed solution is
necessarily rooted in computer technology by providing a solution to the
problem of requests canceled due to network latency. Appeal Br. 9.
Appellant’s arguments are not persuasive. Instead, pursuant to Step
2A of the Memorandum, we agree with the Examiner’s determination that
the claims are directed to an abstract idea. Final Act. 4; Memorandum,
Section III(A) (Revised Step 2A).
Alice/Mayo—Step 1 (Abstract Idea)
Step 2A–Prongs 1 and 2 identified in the Memorandum
Step 2A, Prong One
The Specification discloses:
It will be readily apparent to one of ordinary skill in the art
that the various processes described herein may be implemented
by, e.g., appropriately programmed general purpose computers,
special purpose computers and computing devices. Typically a
processor (e.g., one or more microprocessors, one or more
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microcontrollers, one or more digital signal processors) will
receive instructions (e.g., from a memory or like device), and
execute those instructions, thereby performing one or more
processes defined by those instructions. Instructions may be
embodied in, e.g., a computer program.
Spec. ¶ 49. The Specification also discloses:
Thus a description of a process is likewise a description of
an apparatus for performing the process. The apparatus that
performs the process can include, e.g., a processor and those
input devices and output devices that are appropriate to perform
the process.
Id. at ¶ 51. The Specification also discloses:
Such information may provide useful to a trader in a
number of ways. For example, the system may indicate to a
trader that for the past month, all of his requests to cancel have
arrived, on average, 5 milliseconds after the exchange has
formed a match between his previously submitted bid and a
corresponding offer. The trader may use this information to
modify his trading algorithm to react in a manner that
compensate for this 5 millisecond lag time. In another example,
the system indicates to the trader that his request to cancel arrived
at the exchange a full minute after a match has been formed.
Since requests typically arrive at an exchange within very small
increments of time (e.g., milliseconds), this information alerts
the trader to a potential problem in its transmission system. For
example, an internet line may be down, thus resulting in a slow
transmission time.
Id. at ¶ 100.
Claim 33 recites:
33. A method for correcting network delays in a trading
system, in which the method comprises:
transmitting, by at least one processor, data indicative of a
of a bid or offer to an electronic trading system;
transmitting, by the at least one processor, a request to
cancel the bid or offer;
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receiving, by the at least one processor, an indication that
the request to cancel was unsuccessful as a result of the bid or
offer having already been matched,;
computing, by the at least one processor, a lag time
between when the request to cancel was submitted and when the
request to cancel was received by the trading system; and
adjusting, by the at least one processor, at least one trading
algorithm based at least in part on the lag time so as to improve
a response time to any future requests to cancel.
The claimed steps recite certain methods of organizing human activity
of commercial or legal interactions (including agreements in the form of
contracts). For example, the steps of “transmit[] . . . a bid or offer,”
“transmit[] . . . a request to cancel the bid or offer,” “receiv[e] . . . an
indication that the request to cancel was unsuccessful,” “comput[e] . . . a lag
time between when the request to cancel was submitted and when the
request to cancel was received,” and “adjust[] . . . at least one trading
algorithm . . . to improve a response time to any future requests to cancel”
organize the human activity of a person canceling a commercial trade of
securities. See Spec. ¶ 98. Thus, the claim recites the abstract idea of
“certain methods of organizing human activity” such as trading securities.
See Memorandum, Section I (Groupings of Abstract Ideas); see also Spec.
¶¶ 97–111.
Therefore, we conclude the claims recite an abstract idea pursuant to
Step 2A, Prong One of the guidance. See Memorandum, Section III(A)(1)
(Prong One: Evaluate Whether the Claim Recites a Judicial Exception).

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Step 2A, Prong Two
Under Prong Two of the Memorandum, we must determine “whether
the claim as a whole integrates the recited judicial exception into a practical
application of the exception”; it is noted that 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.” Memorandum, Section III(A)(2).
Appellant argues that the claims in the instant application are
“directed to a technical improvement to a technical problem (i.e., cancelation
requests fail . . . due to network latency),” which “is necessarily rooted in
computer technology in order to overcome a problem specifically arising in
the realm of computer networks.” Appeal Br. 9 (emphasis omitted) (citing
DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014)).
Appeal Br. 14. We do not find Appellant’s arguments persuasive. We find
Appellant’s claims are distinguished from those of DDR Holdings. Here, the
recited limitations do not reflect an improvement in the functioning of a
computer or other technology or technical field. Rather, in Appellant’s
claims, the network latency is computed, but not reduced or eliminated. The
claims only make the trader more efficient. See Memorandum, 84 Fed. Reg.
at 55; cf. Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1084, 1090 (Fed.
Cir. 2019) (“This invention makes the trader faster and more efficient, not
the computer. This is not a technical solution to a technical problem.”).
Further, we do not find Appellant’s arguments persuasive because the
claims utilize general purpose hardware and networking as a tool to perform
securities trades. See Specification ¶¶ 86–91; see also Enfish, LLC v.
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Microsoft Corp., 822 F.3d 1327, 1335–36 (Fed. Cir. 2016) (“[W]e find it
relevant to ask whether the claims are directed to an improvement to
computer functionality versus being directed to . . . a process that qualifies
as an ‘abstract idea’ for which computers are invoked merely as a tool.”);
Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d at 1370
(“[M]erely adding computer functionality to increase the speed or efficiency
of the process does not confer patent eligibility on an otherwise abstract
idea.”).
Subsequently, we detect no additional element (or combination of
elements) recited in claim 33 that integrates the judicial exception into a
practical application. See Memorandum, Section III(A)(2). For example,
Appellant’s claimed additional elements (e.g., the preamble recitation of
“network delays” and “at least one processor” recited in the body) do not:
(1) improve the functioning of a computer or other technology; (2) are not
applied with any particular machine (except for generic hardware); (3) do
not effect a transformation of a particular article to a different state; and (4)
are not applied in any meaningful way beyond generally linking the use of
the judicial exception to a particular technological environment, such that
the claim as a whole is more than a drafting effort designed to monopolize
the exception. See MPEP §§ 2106.05(a)–(c), (e)–(h).
Accordingly, we determine the claims do not integrate the recited
judicial exception into a practical application. See Memorandum, Section
III(A)(2) (Prong Two: If the Claim Recites a Judicial Exception, Evaluate
Whether the Judicial Exception Is Integrated Into a Practical Application).
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Alice/Mayo—Step 2 (Inventive Concept)
Step 2B identified in the Memorandum
Step 2B
Next, we determine whether the claims include additional elements
that provide significantly more than the recited judicial exception, thereby
providing an inventive concept. Alice, 573 U.S. at 217–18 (quoting Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72–73 (2012)).
Appellant contends that the Final Action fails to meet the Berkheimer
guidelines and completely ignores the technical advantages discussed in the
Specification. Appeal Br. 10.
The Examiner finds:
The limitations of transmitting by a processor data
indicative of a bid or offer, transmitting a request to cancel the
bid are interpreted as generic data gathering over a network and
therefore not significantly more, See Applicant's specification
paragraphs 49-59. The limitations claimed do not qualify as
significantly more as the implementation is generic, on generic
hardware and therefore does not perform functions that are not
routine, conventional and well understood.
Final Act. 5; see Ans. 6–9.
Consequently, we agree with the Examiner’s findings that the
additional claim elements are well-understood, routine, and conventional,
and are properly based upon a factual determination as specified in the
Berkheimer Memorandum,3 Section III (A)(2). See Final Act. 4–6.
We sustain the rejection of claims 33–38, 40, and 41 under 35 U.S.C.
§ 101.

3 Memorandum on Changes in Examination Procedure Pertaining to Subject
Matter Eligibility, April 19, 2018.
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DECISION
The Examiner’s rejection under 35 U.S.C. § 101 is affirmed.

DECISION SUMMARY
In summary:
Claims
Rejected
35 U.S.C. § Reference(s)/
Basis
Affirmed Reversed
33–38, 40, 41 101 Eligibility 33–38, 40, 41
Overall
Outcome
33–38, 40, 41

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). See 37 C.F.R.
§ 1.136(a)(1)(iv).

AFFIRMED