Ex Parte 7024387 et alDownload PDFPatent Trial and Appeal BoardJun 24, 201595002032 (P.T.A.B. Jun. 24, 2015) Copy Citation 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. 95/002,032 07/02/2012 7024387 6208-0103PUS1 6972 2292 7590 06/24/2015 BIRCH STEWART KOLASCH & BIRCH, LLP PO BOX 747 FALLS CHURCH, VA 22040-0747 EXAMINER CARLSON, JEFFREY D ART UNIT PAPER NUMBER 3992 MAIL DATE DELIVERY MODE 06/24/2015 PAPER 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. PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ CHICAGO MERCANTILE EXCHANGE, INC. Requester and Appellant v. 5 TH MARKET Patent Owner and Respondent ____________________ Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 Technology Center 3900 ____________ Before JOHN A. JEFFERY, MICHAEL R. ZECHER, and ANDREW J. DILLON, Administrative Patent Judges. DILLON, Administrative Patent Judge DECISION ON APPEAL Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 2 STATEMENT OF THE CASE Requester appeals under 35 U.S.C. § 134(b) (2002) from the confirmation by the Examiner of the patentability of claims 1, 4, 7, 8, and 10. We have jurisdiction under 35 U.S.C. § 315 (2002). An oral hearing was held on May 27, 2015. A transcript of that hearing was entered into the record on June 15, 2015. We affirm-in-part. Invention The '387 patent describes an apparatus and method of automatically and anonymously buying and selling positions in fungible properties between subscribers. The specific embodiment described in the disclosure relates to the buying and selling of securities or contracts where the offer to purchase or sell the property may be conditioned upon factors such as the ability to purchase or sell other property or the actual purchase or sale of other property. Abstract. Claims Claims 1, 3-5 and 7-12 are subject to reexamination. Claims 3, 5, 9, 11, and 12 have been rejected and have not been appealed. Claims 1-12 are original patent claims. Claims 1 and 7 are independent. Claim 1 is illustrative. 1. A conditional order transaction network that matches or compares buy and sell orders for a plurality of items based upon conditions set forth within the order, including a price represented as an algorithm with Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 3 constraints thereon, the conditional order transaction network comprising: a variable number of trader terminals for entering an order for an item in the form of an algorithm with constraints thereon that represent a willingness to transact, where the price is the dependent variable of the algorithm within the constraints and dynamically changing price of another item is an independent variable, the price as the dependent variable being continuously changeable responsive to changes in price of the independent variable, the algorithm representing a buy or sell order; controller computer means coupled to each of the trader terminals over a communications network and receiving as inputs, each algorithm with its corresponding constraints; means for matching, in accordance with the constraints and conditions, algorithmic buy orders with algorithmic sell orders; one of the conditions being the requirement that two or more securities are tradable contemporaneously as a contingent trade of those respective securities, and means for matching or comparing, in accordance with the constraints and conditions, algorithmic buy/sell orders with non-algorithmic sell/buy orders; one of the conditions being the requirement that two or more securities are tradable contemporaneously as a contingent trade of those respective securities, and wherein the order algorithm can be represented as a line in two dimensional space with constraints having the price of one security as one axis and the price of another security as its other axis. Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 4 Prior Art Memorandum from the Commodity Futures Trading Commission on the New York Mercantile Exchange’s (“NYMEX”) Proposal to Implement the NYMEX ACCESS Trading System (Dec. 7, 1992) (on file with the Commodity Futures Trading Commission) (“CFTC”); Electronic Trading Systems: Strategic Implications of Market Design Choices, Stern School of Business by Levecq, H and Bruce W. Weber (Mar. 3, 1995) (hereinafter referred to as "Levecq"); SYCOM III User Guide (Oct. 1996) (hereinafter referred to as "SYCOM”); Eric K. Clemons & Bruce W. Webber, Restructuring Institutional Block Trading: An Overview of the Optimark System, Working Paper Series S-97- 21 (Oct. 1997) (on file with the N.Y. University, Leonard N. Stern School of Business) (“Clemons”); Record Volume on ITG Trading Desk, ITG Connect (Spring 1996) (hereinafter referred to as "Record Volume"); Combination Trading with Limit Orders, Journal of Applied Mathematics & Decision Sciences, 1(2), 133-150 (1997) by Schellhorn, H. (hereinafter referred to as "Schellhorn"); Globex User Guide, REUTERS Ltd. (1997) (“Globex User Guide”); Globex Member's Handbook (June 1992) (hereinafter referred to as "Globex Member's Handbook"); Allan D. Grody et al., Global Electronic Markets A Preliminary Report of Findings (Center for Digital Economy Research, Working Paper No. STERN IS-95-18, 1994) (“Grody”); IPE (International Petroleum Exchange) ETS Workstation User Manual (Sept. 1996) (hereinafter referred to as "IPE Workstation"). Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 5 Requester’s Contentions Requester contends that the Examiner erred in declining to enter the following proposed grounds of rejections against claims 1, 4, 7, 8, and 10 (App. Br. 5): A. The proposed rejection of claim 7 under 35 U.S.C. § 103(a) as being unpatentable over CFTC and Levecq; B. The proposed rejection of claim 1 under 35 U.S.C. § 103(a) as being unpatentable over CFTC and Levecq; C. The proposed rejection of claim 1 under 35 U.S.C. § 103(a) as being unpatentable over CFTC and SYCOM; D. The proposed rejection of claims 1, 4, 7, 8, and 10 under 35 U.S.C. § 103(a) as being unpatentable over Clemons, Record Volume, and Schellhorn; E. The proposed rejection of claim 1 under 35 U.S.C. § 103(a) as being unpatentable over Globex User Guide and Globex Member’s Handbook; F. The proposed rejection of claims 1 and 7 under 35 U.S.C. § 103(a) as being unpatentable over Grody and IPE Workstation. Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 6 ANALYSIS We address each of Requester’s contentions ad seriatim, in the order they were presented. Contention A Requester argues that the Examiner’s confirmation of claim 7 as patentable over CFTC and Levecq is unreasonable, given the adoption of the rejection of claim 9 over CFTC and Levecq, in view of the marked similarity between claim 7 and claim 9. App. Br. 7-8. As Requester demonstrates in a side-by-side comparison on pages 7 and 8 of the Appeal Brief, claims 7 and 9 are strikingly similar. Yet claim 9 was rejected, but claim 7 was not, despite the non-adopted rejection citing the same prior art references cited in the obviousness rejection of claim 9—a rejection that was not appealed. See Resp. Br. 4 (noting this point); see also Reb. Br. 4 (same). Claims 7 and 9 differ in their preambles, and applying the term “dynamically changing” to different algorithm variables. App. Br. 8 (acknowledging these differences). These minor differences, however, do not justify treating one claim as patentable, and the other unpatentable over the same prior art references, particularly in view of the variables’ interrelationships as Requester indicates. Id. To be sure, the proposed rejection of claim 7 cites the same references as the claim 9 rejection, yet applies them somewhat differently in connection with the “segment for matching or comparing” limitation, but the proposed rejection of claim 7 cites only Levecq for this feature. Id. Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 7 Despite this difference, we see no reason to treat these claims any differently on this record, particularly in light of our obligation to ensure consistent patentability determinations in reexamination proceedings under established precedent. See Q.I. Press Controls, B.V. v. Lee, 752 F.3d 1371, 1382–83 (Fed. Cir. 2014). Where, as here, all relevant references are before us, “an obligation is owed to the public not to permit inconsistent results when a proper challenge to that inconsistency is made on appeal.” Id. at 1383. To treat similar claims 7 and 9 differently over the same prior art references as the Examiner has done yields the very inconsistency that we are obligated to prevent under the court’s mandate. To be sure, the court qualified its statement that our obligation to not to permit inconsistent results arises “when a proper challenge to that inconsistency is made on appeal.” Id. (emphasis added). Therefore, not just any such challenge to an inconsistency will suffice: it must be proper. This begs the question whether a proper challenge to an inconsistency can be raised on appeal, despite such an issue going beyond the scope of the question raised by the reexamination request—a question that is answered by the reexamination proceeding. See Belkin Int’l, Inc. v. Kappos, 696 F.3d 1379, 1382 (Fed. Cir. 2014). As the court in Belkin indicates, the scope of reexamination is limited to only those patentability issues raised in the request. Id. But where, as here, a proposed rejection of a claim is based on the same prior art references as those used by the Examiner in rejecting a substantially similar claim, a challenge to an inconsistency in patentability determinations of those claims on appeal is proper, despite the application of Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 8 those references to certain recited limitations differing from that proposed in the request. In this instance, Requester’s inconsistency challenge comports reasonably with the scope of the issues raised in the request, namely whether claims 7 and 9 would have been obvious over the collective teachings of CFTC and Levecq. To be sure, the different bases for applying the cited references for the “segment for matching or comparing” limitations in claims 7 and 9 arguably constitute different grounds of rejection despite Requester’s contentions to the contrary at the oral hearing. See Oral Hearing Transcript filed June 15, 2015, at 19–20. Nevertheless, the fact remains that the same prior art references were before the Examiner in reaching diametrically opposite patentability determinations for substantially similar claims—the very inconsistency we have an obligation to prevent under Q.I. Press Controls. Lastly, to the extent that Patent Owner contends that to enter a new ground of rejection to cure the above-noted inconsistency presupposes improperly that the Examiner’s rejection of claim 9 was correct as was suggested at the oral hearing (see Transcript, at 28–29), no such argument regarding any purported error in that rejection was raised earlier. Accordingly, any arguments that the Examiner erred in rejecting claim 9 are waived. In short, the same prior art references were before the Examiner in reaching diametrically opposite obviousness determinations for claims 7 and 9—claims that are strikingly similar. This is the very inconsistency we have Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 9 an obligation to prevent under Q.I. Press Controls. Consequently, we find the Examiner erred in failing to reject claim 7. Contention B Requester argues that the Examiner erred by not adopting the proposed rejection of claim 1 under 35 U.S.C. § 103(a) as being unpatentable over CFTC and Levecq. Requester notes the basis for the Examiner’s failure to adopt this rejection was the alleged failure of the cited references to show or suggest “the order algorithm can be represented as a line in two dimensional space with constraints having the price of one security as one axis and the price of another security as its other axis." App. Br. 13. Requester asserts that the order algorithm of CFTC can be represented as a line in a two dimensional space, particularly CFTC’s so-called “crack” spread order which Requester urges can be represented as a line in two dimensional space with constraints having the price of one security as one axis and the price of another security as a second axis. Id. at 14. Patent Owner argues that Requester’s assertion is mere speculation and is supported by an unsuccessful argument of inherency, which cannot take the place of “substantial evidence.” Resp. Br. 6-7. The bases for the Examiner’s failure to adopt the rejection set forth in contention B, as set forth in the Action Closing Prosecution (A.C.P.), are listed as follows: 1) the failure of Requester to set forth what claimed feature is missing from CFTC, what particular claimed feature in Levecq would have been used to modify CFTC and in what way, and why such Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 10 modification would have been made, leading to a clear articulation of the reasons why the claimed invention would have been obvious; and 2) the failure of the cited references to show or suggest “the order algorithm can be represented as a line. . . “ A.C.P. 7. We find that, although Requester responded at length regarding the inherent capability of the references to represent an order algorithm “as a line in two dimensional space,” Requester fails to address the Examiner’s position regarding what claimed feature is missing from CFTC, what particular claimed feature in Levecq would have been used to modify CFTC and in what way, and why such modification would have been made. With regard to the second enumerated issue, we find the phrasing “can be” is permissible language that renders the claim language that follows optional, under a broadest reasonable interpretation of the language. Consequently, we find that the prior art is not required to demonstrate the representation of an order algorithm “as a line in two dimensional space.” Nevertheless, in view of Requester’s failure to address the manner in which CFTC and Levecq are to be combined, as noted above, we find the Examiner did not err in declining to adopt the proposed rejection of claim 1 under 35 U.S.C. § 103(a) as being unpatentable over CFTC and Levecq. Contention C Requester argues that the Examiner erred in declining to adopt the proposed rejection of claim 1 under 35 U.S.C. § 103(a) as being unpatentable over CFTC and SYCOM. App. Br. 16-18. Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 11 As set forth in the Action Closing Prosecution, the basis for the Examiner’s declining to adopt this proposed rejection is substantially identical to that set forth above with respect to Contention B. Compare A.C. P. 7, with A.C.P. 8. As above, we find the Requester responded at length regarding the representation of an order algorithm “as a line in two dimensional space,” which we find to be optional language, but failed to address the Examiner’s position based upon Requester’s failure to set forth what claimed feature is missing from CFTC, what particular claimed feature in SYCOM would have been used to modify CFTC and in what way, and why such a modification would have been made. Indeed, Requester, when arguing in support of this proposed rejection, fails to mention SYCOM at all. Consequently, we find the Examiner did not err by failing to adopt the rejection of claim 1. Contention D Requester argues that the Examiner erred in failing to adopt the proposed rejection of claims 1, 4, 7, 8, and 10 under 35 U.S.C. § 103(a) as being unpatentable over Clemons, Record Volume, and Schellhorn. App. Br. 18-29. In the Action Closing Prosecution, the Examiner found that this proposed rejection failed to set forth a prima facie case of obviousness, with regard to claim 1, for failing to demonstrate where the prior art suggested “the order algorithm can be represented as a line. . .” Further, the Examiner found that Requester had failed to set Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 12 forth what features were missing from Clemons and what features of Record Volume would have been used to modify Clemons. The Examiner found that Record Volume did not provide a teaching that a dependent price variable changes as an independent price variable changes. The Examiner also notes that, while Clemons is noted as “contemporaneously tradable,” it is not clear that Clemons teaches “contemporaneously tradable as a contingent trade.” A.C.P. 11 (emphasis omitted). We have addressed the claim language setting forth “the order algorithm can be represented as a line. . . ” above, noting our finding that the claim language following “can be,” under a broadest reasonable interpretation, represents an optional feature of the claimed invention. In the Appeal Brief, Requester acknowledges the Examiner’s objection to the failure of the proposed references to show or suggest “contemporaneously tradable as a contingent trade;” however, Requester once again fails to identify the source of such teaching within the proposed rejection. Consequently, we find no error in the Examiner’s declining to adopt the proposed rejection of claim 1 under 35 U.S.C. § 103(a) as being unpatentable over Clemons, Record Volume, and Schellhorn. In the Action Closing Prosecution, the Examiner found that this proposed rejection failed to set forth a prima facie case of obviousness, with regard to claim 7, for failing to set forth clearly what elements are missing from Clemons and what features of Record Volume would have been used to modify Clemons, in what way. The Examiner finds that Record Volume fails to show or suggest a teaching that a dependent price variable changes as Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 13 an independent price variable changes. The Examiner also finds it is not clear how Record Volume is relied upon to suggest “a segment for controlling a computer coupled to each of the trader terminal.” The Examiner acknowledges that Clemons may teach pricing from an external exchange, but finds it unclear where Clemons teaches such external pricing as the claimed independent variable. A.C.P. 13. Requester asserts various reasons why claim 7 should be rejected under 35 U.S.C. § 103(a) as being unpatentable over Clemons, Record Volume, and Schellhorn, but fails to set forth clearly the proposed manner in which these references should be combined. Specifically, Requester fails to set forth where the combined references suggest a teaching that a dependent price variable changes as an independent price variable changes or teach external pricing as the claimed independent variable, as set forth in claim 7. App. Br. 23-26. We decline to address the application of Clemons, Record Volume, and Schellhorn to claims 4, 8, and 10, which depend from claims 1 and 7, for the reasons set forth above. We, thus, find that the Examiner did not err in failing to adopt the rejection of claims 1, 4, 7, 8, and 10 under 35 U.S.C. § 103(a) as being unpatentable over Clemons, Record Volume, and Schellhorn. Contention E Requester argues the Examiner erred in failing to adopt the proposed rejection of claim 1 under 35 U.S.C. § 103(a) as being unpatentable over Globex User Guide and Globex Member’s Handbook. App. Br. 29-30. Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 14 In the Action Closing Prosecution, the Examiner found that this proposed rejection failed to set forth a prima facie case of obviousness, with regard to claim 1, for failing to demonstrate where the prior art suggested “the order algorithm can be represented as a line. . . ” Further, the Examiner found that Requester had failed to set forth what features were missing from the Globex User Guide and what features of the Globex Member’s Handbook would have been used to modify the Globex User Guide. A.C.P. 9. We have addressed the “the order algorithm can be represented as a line. . . ” above, and for the same reasons we set forth above, we find the failure of the references to show or suggest this optional feature does not serve as a basis for failing to adopt the proposed rejection. Requester argues that the proposed rejection should have been adopted by the Examiner, but failed to set forth the manner in which the two references should be combined in the request for reexamination. In the original request for reexamination, the Requester proposed the Global Members Handbook as suggesting that it would have been obvious to “combine two user guides for the Globex trading system.” Req. Reexam. Exhibit 13, pp. 2-3. In the present Appeal Brief, Requester cites the Global Members Handbook in support of the allegation that these references disclose that an order algorithm can be represented as a line in two dimensional space. App. Br. 30. Requester has failed to set forth a viable basis for asserting that the Examiner erred in declining to adopt the proposed rejection of claim 1 under 35 U.S.C. § 103(a) as being unpatentable over Globex User Guide and Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 15 Globex Member’s Handbook. In its Appeal Brief, Requester proposes a rejection based upon alternate portions of the cited references, which, in our view, is not germane to the issue of whether or not the Examiner erred in failing to adopt the rejection initially proposed in the original request for reexamination. We, therefore, find the Examiner did not err in failing to adopt the rejection of claim 1 under 35 U.S.C. § 103(a) as being unpatentable over Globex User Guide and Globex Member’s Handbook. Contention F Requester argues the Examiner erred by declining to adopt the proposed rejection of claims 1 and 7 under 35 U.S.C. § 103(a) as being unpatentable over Grody and IPE Workstation. App. Br. 31-33. In the Action Closing Prosecution, the Examiner found that this proposed rejection failed to set forth a prima facie case of obviousness, with respect to claim 1, for failing to show or suggest “the order algorithm can be represented as a line. . . ” Additionally, the Examiner found that Requester failed to express clearly what features were missing from the Grody reference, and what features of IPE Workstation could be used to modify Grody, in what way, along with why such a modification would have been obvious. A.C.P. 10. With respect to claim 7, the Examiner found the Requester failed to express clearly what features were missing from the Grody reference, and what features of IPE Workstation could be used to modify Grody, in what way, along with why such a modification would have been obvious. Further, the Examiner found that the “price borrowing” of Grody did not Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 16 provide a teaching to use an external price feed for prices used as an independent variable. Id. at 10-11. With respect to claim 1, we have found that the language reciting “the order algorithm can be represented as a line. . . ” to be optional, under a broadest reasonable interpretation. However, the Requester only argues the Examiner has “misinterpreted the disclosures of Grody and IPE Workstation,” and fails to address the Examiner’s assertion that Requester has failed to express clearly what features were missing from the Grody reference, and what features of IPE Workstation could be used to modify Grody, in what way, along with why such a modification would have been obvious. In the absence of contrary argument by Requester, we find the Examiner did not err in declining to adopt the rejection of claim 1 under 35 U.S.C. § 103(a) as being unpatentable over Grody and IPE Workstation. With respect to claim 7, Requester acknowledges the Examiner’s finding that the “price borrowing” of Grody did not provide a teaching to use an external price feed for prices used as an independent variable; however, Requester once again points out the availability of external pricing, but fails to provide an indication that Grody utilizes such external price information as an independent variable, as claimed. Consequently, we find the Examiner did not err in failing to adopt the proposed rejection of claim 7 under 35 U.S.C. § 103(a) as being unpatentable over Grody and IPE Workstation. Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 17 DECISION The Examiner’s decision not to adopt the listed proposed rejections of claims 1, 4, 8, and 10 is affirmed. The Examiner’s decision not to adopt the proposed rejection of claim 7 is reversed. Pursuant to 37 C.F.R. § 41.77(a), the above-noted reversal constitutes a new ground of rejection. Section 41.77(b) provides that “[a] new ground of rejection . . . shall not be considered final for judicial review.” That section also provides that Patent Owner, WITHIN ONE MONTH FROM THE DATE OF THE DECISION, must exercise one of the following two options with respect to the new grounds of rejection to avoid termination of the appeal proceeding as to the rejected claims: (1) Reopen prosecution. The owner may file a response requesting reopening of prosecution before the examiner. Such a response must be either an amendment of the claims so rejected or new evidence relating to the claims so rejected, or both. (2) Request rehearing. The owner may request that the proceeding be reheard under § 41.79 by the Board upon the same record. The request for rehearing must address any new ground of rejection and state with particularity the points believed to have been misapprehended or overlooked in entering the new ground of rejection and also state all other grounds upon which rehearing is sought. Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 18 In accordance with 37 C.F.R. § 41.79(a)(1), the “[p]arties to the appeal may file a request for rehearing of the decision within one month of the date of: . . . [t]he original decision of the Board under § 41.77(a).” A request for rehearing must be in compliance with 37 C.F.R. § 41.79(b). Comments in opposition to the request and additional requests for rehearing must be in accordance with 37 C.F.R. § 41.79(c)–(d), respectively. Under 37 C.F.R. § 41.79(e), the times for requesting rehearing under paragraph (a) of this section, for requesting further rehearing under paragraph (c) of this section, and for submitting comments under paragraph (b) of this section may not be extended. An appeal to the United States Court of Appeals for the Federal Circuit under 35 U.S.C. §§ 141–144 and 315 and 37 C.F.R. § 1.983 for an inter partes reexamination proceeding “commenced” on or after November 2, 2002 may not be taken “until all parties’ rights to request rehearing have been exhausted, at which time the decision of the Board is final and appealable by any party to the appeal to the Board.” 37 C.F.R. § 41.81. See also MPEP § 2682 (8th ed., Rev. 8, July 2010). No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a). Requests for extensions of time in this inter partes reexamination proceeding are governed by 37 C.F.R. § 1.956. See 37 C.F.R. § 41.79. AFFIRMED-IN-PART 37 C.F.R. 41.77(a) Appeal 2014-008891 Reexamination Control 95/002,032 Patent 7,024,387 B1 19 Patent Owner: Birch Stewart Kolasch & Birch, LLP P.O. Box 747 Falls Church, VA 22040-0747 Third Party Requester: Finnegan, Henderson, Farabow, Garrett & Dunner, LLP 901 New York Avenue, NW Washington, DC 20001-4413 Copy with citationCopy as parenthetical citation