Ex Parte BAKER et al

Patent Trial and Appeal Board

Aug 21, 2018

12971401 (P.T.A.B. Aug. 21, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/971,401 12/17/2010
35811 7590 08/23/2018
IP GROUP OF DLA PIPER LLP (US)
ONE LIBERTY PLACE
1650 MARKET ST, SUITE 4900
PHILADELPHIA, PA 19103
UNITED ST A TES OF AMERICA
FIRST NAMED INVENTOR
Charles A. BAKER
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
NGI-14-1143R 7854
EXAMINER
OYEBISI, OJO 0
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
08/23/2018 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@dlapiper.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CHARLES A. BAKER AND LISA DALLMER
Appeal2016-007637
Application 12/971,401 1
Technology Center 3600
Before JOSEPH A. FISCHETTI, PHILIP J. HOFFMANN,
and SHEILA F. McSHANE, Administrative Patent Judges.
McSHANE, Administrative Patent Judge.
DECISION ON APPEAL
Appellants seek our review under 35 U.S.C. § 134(a) of the
Examiner's final decision to reject claims 1-7, 9-11, and 16-20. We have
jurisdiction under 35 U.S.C. § 6(b ).
We AFFIRM.
1 According to Appellants, the real party in interest is NYSE Group, Inc.
Appeal Brief filed November 13, 2015, hereafter "App. Br.," 1.
Appeal2016-007637
App li cation 12/971, 40 1
BACKGROUND
The invention is directed to a method for settling transactions in
shares of mutual funds in a centralized manner. Specification, hereafter
"Spec.," Abstract, 6:11-16.
Claims 1, 17, and 20 are the independent claims on appeal.
Representative claim 1 is reproduced from page 21 of the Claims Appendix
of the Appeal Brief (Claims App.) as follows:
1. A method of settling transactions in shares of a mutual fund
compnsmg:
receiving at a central computer system over a secure
computer network, order information for a plurality of orders
from one or more entities to buy or sell at least one of: shares of
multiple fund classes of a single mutual fund, shares of multiple
mutual funds and shares of multiple fund classes of multiple
mutual funds;
calculating, by the central computer system, a net number
of shares to be bought or sold for each mutual fund by netting
all orders from all entities for all fund classes pertaining to each
said mutual fund;
generating an aggregate trade order for each mutual fund
that includes the net number of shares to be bought or sold
thereof;
sending each aggregate trade order by the central
computer system to a respective mutual fund entity associated
therewith for execution;
storing, by the central computer system, records
associated with said plurality of orders,
said aggregate trade orders as well as information
associated with the identities of the entities who place orders to
buy or sell shares of each mutual fund;
receiving, by the central computer system, a confirmation
from the mutual fund entity for each aggregate trade order;
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generating, by the central computer system, individual
confirmations for the one or more entities that submitted the
plurality of orders; and
settling, by the central computer system, the plurality of
orders with the one or more entities that submitted the plurality
of orders.
The Examiner rejects claims 1-7, 9-11, and 16-20 under 35 U.S.C.
§ 101 as reciting a judicial exception without significantly more. Final
Action mailed June 26, 2015, hereafter "Final Act.," 2-3; see also
Examiner's Answer mailed June 9, 2016, hereinafter "Ans.," 2.
DISCUSSION
§ 101
Appellants argue the § 101 rejection using independent claim 1 as
representative. See App. Br. 19. We will address the rejection in the same
manner.
The Examiner determines that the claims, and more specifically,
representative claim 1, are directed to non-statutory subject matter because
"the claims are directed towards the abstract idea of settling transactions in
shares of a mutual fund," which is a fundamental financial/economic
practice. Final Act. 2. Additional claim elements are found to not be
significantly more than an abstract idea because "the claims do not include
an improvement to another technology or technical field, an improvement to
the functioning of the computer itself, or meaningful limitations beyond
generally linking the use of an abstract idea to a particular technological
environment." Id. The Examiner finds that each of the limitations are done
by "generically recited storage devices and computer processors." Id. at 2-
3. The Examiner further finds that "[t]he limitations are merely instructions
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App li cation 12/971, 40 1
to implement the abstract idea on a computer and require no more than a
generic computer to perform generic computer functions that are well-
understood, routine and conventional activities previously known to the
industry." Id. at 3.
Appellants argue that the rejection of claim 1 is flawed because the
Examiner has not provided sufficient support for the identification of the
abstract idea, not addressed all the parts of the claim, nor has provided
sufficient reasoning and information in support of the rejection. App. Br. 6.
Appellants allege that "the claims are not merely directed to the concept of
'settling transaction in shares of a mutual fund," and are directed to specific
technical features of a specialized system. Id. at 7-8. More specifically,
Appellants assert that the methods are executed by a central computer
system over a secure computer network that falls within statutory categories.
Id. at 8. Appellants argue that the Examiner's findings lack sufficient
factual support. Id. at 9-11. Appellants further aver that the allowance of
these claims will not preempt others from transactions in shares of a mutual
fund, thus supporting patentability. Id. at 12.
Appellants additionally allege that the collective claim elements
provide an improvement to the technical field of electronic trading that is
significantly more than the abstract idea, and represents new features and
functions in a completely computerized environment where direct bi-
directional transactions between the investing entity and the fund company
are required. Id. at 12-14. Appellants contend that the new centralized
computer system, separate from the fund company system, removes
significant processing and record-keeping requirements. Id. at 15.
Appellants contend that the specific limitations of the claim are other than
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App li cation 12/971, 40 1
what is well-understood, routine, and conventional in the field, and none of
the claims were rejected over the prior art which suggests that the claims are
novel and non-obvious. Id. at 18. Appellants further assert that the
invention represents the change of physical information, i.e., order
information, into a different state, i.e., aggregate trade orders, individual
confirmations. Id. at 16-17. 2 It is argued that the claims are applied to the
use of a "specialized" machine due to the programming of the particular
functions in a generic computer. Id. at 17.
Appellants further compare claim 1 to a patent-eligible global
positioning system3 that is patent eligible because of alleged similarities
where "the combination of elements [that] impose meaningful limits in that
the mathematical operations are applied to improve an existing technology,"
where it is alleged that the claim at issue offers a technical solution to the
bilateral direct communication interaction between entities. Id. at 18-19.
Appellants refer to Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1335
(Fed. Cir. 2016) ("Enfish") as an example of where claims were still patent
eligible when implemented on a generic computer, because they improved
computer functionality, which is asserted to be the case here because steps of
2 Appellants analogize the claim to the transformation of rubber to another
state, wherein the "claims transform data by receiving order information,
calculating a net number of shares, and generating ( creating) new things"
like orders and confirmations. App. Br. 16 ( citing Diamond v. Diehr, 450
U.S. 175 (1981) ("Diehr").
3 Appellants refer to "Example 4" of the July 2015 Update of the 2014
Interim Guidance on Patent Subject Matter Eligibility issued by the
U.S.P.T.O. on December 16, 2014. "Example 4" refers to SiRF Technology
Inc. v. International Trade Commission, 601 F.3d 1319 (Fed. Cir. 2010)
("SiRF'').
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App li cation 12/971, 40 1
the claim "preprocess" orders. Reply Brief filed August 4, 2016, hereafter
"Reply Br.," 2-5. Appellants also assert similarities to BASCOM Global
Internet Servs. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016)
("BASCOM'), because the steps are alleged to represent a "technology-
based solution that includes novel system components" and "perform novel
technical functions." Id. at 5---6.
To provide context, 35 U.S.C. § 101 provides that a new and useful
"process, machine, manufacture, or composition of matter" is eligible for
patent protection. The Supreme Court has made clear that the test for patent
eligibility under Section 101 is not amenable to bright-line categorical rules.
See Bilski v. Kappas, 561 U.S. 593, 609 (2010). There are, however, three
limited, judicially created exceptions to the broad categories of patent-
eligible subject matter in § 101: "[L Jaws of nature; natural phenomena, and
abstract ideas". See Mayo Collaborative Services v. Prometheus Labs., Inc.,
566 U.S. 66, 70 (2012).
In Alice Corporation Pty, Ltd. v. CLS Bank International, 134 S. Ct.
2347 (2014), the Supreme Court reiterated the framework set forth
previously in Mayo, "for distinguishing patents that claim laws of nature,
natural phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts." Alice, 134 S. Ct. at 2355 (citation omitted).
Under Alice, the first step of such analysis is to "determine whether the
claims at issue are directed to one of those patent-ineligible concepts." Id.
( citation omitted). If it is determined that the claims are directed to a patent-
ineligible concept, the second step in the analysis is to consider the elements
of the claims "individually and 'as an ordered combination"' to "determine
whether the additional elements 'transform the nature of the claim' into a
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App li cation 12/971, 40 1
patent-eligible application." Id. (quoting Mayo, 566 U.S. at 79, 78). In
other words, the second step is to "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. (alteration in original) (quoting Mayo,
566 U.S. at 72-73).
After considering Appellants' arguments and the evidence presented
in this Appeal for the§ 101 rejections, we are not persuaded that Appellants
identify reversible error. We add the following for emphasis.
We agree with the Examiner that all the elements of claim 1 are
directed towards the abstract idea of settling transactions in shares of a
mutual fund.
Similar to the claims at issue in Electric Power, the claimed invention
here receives, calculates, analyzes, and presents information of a specified
content, but does not use any particular inventive technology for performing
those functions. That the information pertains to data associated with
mutual funds is of little consequence because collecting and analyzing such
information does not make the collection and analysis non-abstract. See
SAP America, Inc. v. Investpic, LLC, 2018 WL 3656048 at *1, *5 (Fed. Cir.
2018) ("SAP") (''No matter how much of an advance in the finance field the
claims recite, the advance lies entirely in the realm of abstract ideas, with no
plausibly alleged innovation in the non-abstract application realm").
Further, Appellants' arguments about the alleged similarities to Enfzsh and
BASCOM fail to persuade us because the claims in those cases were deemed
to be patent eligible because they were directed to improvements in the way
computers and networks carry out their basic functions. See Enfzsh, 822
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F.3d at 1335-36; BASCOM, 827 F.3d at 1348--49; see also Electric Power,
830 F.3d at 1354. Here, the focus of the claims is not to improved computer
operations or functions, but rather is directed to a fundamental business
practice, namely, settling transactions in shares of a mutual fund-an
abstract idea. See also, In re Chorna, 656 F. App'x 1016, 1022 (Fed. Cir.
2016) (unpublished) (holding ineligible claims directed to financial
instruments valued using an allocation formula, traded, and cleared as
directed to an abstract idea). Moreover, although a claim would avoid being
abstract by the addition of specific meaningful limitations directed to
physical transformations as in Diehr or use of a specialized machine as in
SiRF, that is not the case here----claim 1 is directed only settling transactions
in shares of a mutual fund and only provides forms of associated reports.
Additionally, it may be true that there are other methods of transactions that
perform functions associated with shares of a mutual fund, that issue is not
dispositive as to whether the claim is patent eligible. See Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)
("While preemption may signal patent ineligible subject matter, the absence
of complete preemption does not demonstrate patent eligibility.").
Turning to step 2 of Alice, Appellants characterize the invention as
significantly more than an abstract idea because the invention provides an
improvement to the technical field of electronic trading; improves the
functions of a computer; recite limitations other than what is well-
understood, routine, and conventional in the field; transforms articles into
different states; and the claims apply to a specialized machine. App. Br. 12-
19. We do not find these arguments to be persuasive.
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Although Appellants argue that the invention presents new features
and functions involving bi-directional transactions with centralized computer
functions, we discern nothing in the record to support that the argued
improvements represent patentable technological improvements to computer
systems or technology. Rather, the claim only implements the abstract idea
and it is "clear that the basic character of a process claim drawn to an
abstract idea is not changed by claiming only its performance by computers,
or by claiming the process embodied in program instructions on a computer
readable medium." CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d
1366, 1375 (Fed. Cir. 2011). Further, as to the allegations that the claims
entail the use of a "specialized" machine due to the programming of the
particular functions in a generic computer, we find no reversible error with
the Examiner's findings of implementation on a generic computer system to
perform generic computer functions that are well-understood, routine and
conventional activities. The Specification discloses the use of a centralized
computer (Spec. 12-13), but we find no suggestion that a specialized
computer system is used. Rather, the Specification describes the use of
electronic processing on a computer with the use of a database for storage,
with no specialized computer processes described. Id. Despite Appellants'
repeated arguments related to alleged improvements to computer systems,
the Federal Circuit's analysis in SAP is instructive:
Some of the claims require various databases and processors,
which are in the physical realm of things. But it is clear, from
the claims themselves and the specification, that these limitations
require no improved computer resources [patent owner] claims
to have invented, just already available computers, with their
already available basic functions, to use as tools in executing the
claimed process.
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SAP, 2018 WL 3656048 at *7.
There is a difference between improving computer functionality and
use of existing computers to perform tasks, and here, there is no underlying
change as to how the technology operates under claim 1.
Therefore, we sustain the rejection of claims 1-7, 9-11, and 16-20
under§ 101.
SUMMARY
The rejection of claims 1-7, 9-11, and 16-20 under 35 U.S.C. § 101 is
sustained.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a).
AFFIRMED
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