Ex Parte Banke et al

Patent Trial and Appeal Board

Aug 22, 2018

14163097 (P.T.A.B. Aug. 22, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/163,097 01/24/2014
12684 7590 08/24/2018
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
FIRST NAMED INVENTOR
Scott D. Banke
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.
4672-12012DUS 7013
EXAMINER
DONLON, RY AND
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
08/24/2018 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):
mail@lsk-iplaw.com
docket-us@lsk-iplaw.com
pair_lsk@firsttofile.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte SCOTT D. BANKE, STANISLA V LIBERMAN,
NEIL A. LUSTYK, JAMES BAILEY, ASHRAF ANSARI,
PEARCE PECK-WALDEN, JOHN SCHEERER,
HAIFENG ZHENG, MATTHEW J. KELLY,
BRIAN M. WOLF, and TROY C. KANE
(Applicant: Chicago Mercantile Exchange Inc.)
Appeal2017-002014
Application 14/163 ,097 1
Technology Center 3600
Before ERIC B. CHEN, NABEEL U. KHAN, and PHILLIP A. BENNETT,
Administrative Patent Judges.
BENNETT, Administrative Patent Judge.
DECISION ON APPEAL
1 References herein to "Appellant" are to the applicant, Chicago Mercantile
Exchange Inc., also identified as the real party in interest. App. Br. 2.
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Application 14/163,097
STATEMENT OF THE CASE
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 1-21. We have jurisdiction under 35 U.S.C. § 6(b).
We affirm.
CLAIMED SUBJECT MATTER
The claims are directed to "determin[ing] when a market for a
particular product moves too quickly in too short of period of time, e.g., the
velocity of the market exceeds a defined threshold." Spec., Abstract.
Claim 1, reproduced below, is illustrative of the claimed subject matter:
1. A computer-implemented method for mitigating an effect
of a change in a market for a product traded on an exchange, the
change in the market comprising a negative movement and/or a
positive movement, the method comprising:
monitoring, by a processor, the market for the product;
identifying, by the processor, a comparison value of the
product during each elapse of a duration of time and at least one
comparative value of the product upon each elapse of the
duration of time and determining each previously identified
comparative value identified within a threshold time thereof,
wherein the threshold time for a positive movement is different
than the threshold time for a negative movement;
determining, by the processor, a difference between the
identified comparison value and each of the determined
previously identified comparative values;
determining, by the processor, if any of the determined
differences deviates from a threshold value; and
performing, by the processor, an action, when any of the
determined differences deviates from the threshold value.
App. Br. 10 (Claims Appendix).
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REJECTION
Claims 1-21 stand rejected under 35 U.S.C. § 101 as being directed to
patent-ineligible subject matter. Final Act. 2-5.
ANALYSIS
Legal Standard for Patent-Eligibility
In issues involving subject matter eligibility, our inquiry focuses on
whether the claims satisfy the two-step test set forth by the Supreme Court in
Alice Corp. v. CLS Bank Int'!, 134 S. Ct. 2347 (2014). The Supreme Court
instructs us to "first determine whether the claims at issue are directed to a
patent-ineligible concept," id. at 2355, and, in this case, the inquiry centers
on whether the claims are directed to an abstract idea. If the initial threshold
is met, we then move to the second step, in which we "consider the elements
of each claim both individually and 'as an ordered combination' to
determine whether the additional elements 'transform the nature of the
claim' into a patent-eligible application." Id. (quoting Mayo Collaborative
Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 79, 78 (2012)). The Supreme
Court describes the second step 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 significantly more than a patent upon the
[ineligible concept] itself."' Id. ( quoting Mayo, 566 U.S. at
72-73).
The Examiner's Findings
The Examiner rejects claims 1-21 under the two-step Alice
framework. Under the first step, the Examiner determines the claims are
directed to an abstract idea:
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Claims 1-12 (method claims or process claims), claims 13-21
( system claims or machine) are directed to financial instrument
trading and contracts (see specification pages 1-2) which is a
fundamental economic practice . . . and method of organizing
human activities (see admitted prior art in specification).
Final Act. 3. The Examiner further explains that the claims can also be
fairly characterized as being directed to the abstract idea of "risk mitigation,
which corresponds to concepts identified as abstract ideas by the courts such
as Alice, Bilski, International Securities Exchange LLC v. Chicago Board
Options Exchange, Inc., and OIP Technologies v. Amazon.Com, Inc .. "
Ans. 4. The Examiner explains that the concept covered by Appellant's
claims is similar to those covered in the identified cases because "[a]ll of
these concepts relate to economic practices and organizing human activities .
. . in which financial risk is managed." Id.
Under Alice step 2, the Examiner determines the claims do not
"include additional elements that are sufficient to amount to significantly
more than the judicial exception because the additional elements, when
considered both individually and as an ordered combination do not amount
to significantly more than the abstract idea." Ans. 4. The Examiner further
determines the various steps recited in the claims amount only to an
"instruction to implement the abstract idea (i.e. to mitigate the effect of
market changes with respect to threshold values and react to market and
adjust the price or quantity during trading) in a particular, albeit well-
understood, routine and conventional technological environment." Final
Act. 4--5. In support of this finding, the Examiner cites Appellant's
Specification at paragraphs 90-92 and 99 (Ans. 5), noting that it describes
generic computer components "such as: processor, memory, and executable
logic by processor, which are recited at a high level of generality, provide
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conventional computer functions that do not add meaningful limits to
practicing the abstract idea." Ans. 3--4.
Appellant's Arguments
Appellant presents several arguments in favor of eligibility. First,
Appellant asserts the "the claimed invention is directed to methods and
systems for rapidly determining when a market for a particular product
moves too quickly, either up or down, in too short a period of time." App.
Br. 4. Appellant further contends the "the claims are directed to ...
mitigating positive or negative fluctuations in values in a dynamic system,
e.g., a financial market, i.e. in a transaction processing system which
operates to complete transaction[ s] between parties for a product by
matching offer transactions at particular values." App. Br. 5. Based on
these characterizations, Appellant argues the claims are not directed to an
abstract idea because the invention "improves upon the technical field of
transaction processing by providing a specifically defined system which
determines acceleration of change in value as compared to a threshold and
identifies when that acceleration deviates from the threshold, e.g. as
indicative of a problem." App. Br. 5.
Appellant also challenges the Examiner's step 2 determination as
being inconsistent with patent eligibility guidance issued by the Office.
App. Br. 6-9. More specifically, Appellant argues the claims are "akin to
the USPTO' s provided patent eligible examples" which "indicate that the
recited monitoring, identifying, determining, and performing are patentable."
App. Br. 7. Appellant also contends "the claimed system requires more than
just a general purpose computer to operate" because it "requires the specific
environment of transaction processing system based market." App. Br. 7.
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Appellant also argues the claimed invention is patent-eligible under DDR
Holdings because it is "directed to solving a transaction/data processing-
centric problem." Id. Finally, Appellant contends the reasoning in the
Board's denial of institution in Chicago Mercantile Exchange, Inc. v. 5th
Market, Inc., CBM2015-00061 (PTAB July 16, 2015) (Paper 9), weighs in
favor of eligibility because a recited "means for matching" was found to
"impart[] a meaningful limitation or add[] significantly more to the abstract
idea." App. Br. 8.
Analysis
We are not persuaded by Appellant's arguments, and we address each
argument in tum. Appellant argues the Examiner's characterization of the
claims is overly broad because they involve more than simply "financial
instrument trading" and/or "risk mitigation," and the claims are instead
directed to "methods and systems for rapidly determining when a market for
a particular product moves too quickly, either up or down, in too short a
period of time." The problem with this argument is that even if it is correct,
the claims are still directed to abstract idea. We find Electric Power Group,
LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016) instructive here. In
Electric Power Group, the Federal Circuit addressed a claim drawn to a
"method of detecting events on an inter-connected electric power grid in real
time over a wide area and automatically analyzing the events on the
interconnected power grid." Id. at 13 51. The Federal Circuit found the
claim directed to an abstract idea because "the claims fall into a familiar
class of claims 'directed to' a patent-ineligible concept. The focus of the
asserted claims [] is on collecting information, analyzing it, and displaying
certain results of the collection and analysis." Id. at 1353. Focusing on the
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nature of the invention, the court determined because "[t]he advance they
purport to make is a process of gathering and analyzing information of a
specified content, then displaying the results, and not any particularly
inventive technology for performing those functions," the claims were
"directed to an abstract idea." Id at 1354. Similarly here, the claims
"gather" information by "monitoring the market for the product" and
"identifying" various comparison values and threshold times. The claims
also "analyze" that gathered data in the recited "determining" steps.
Appellant's claims do not "display" the result as was the case in Electric
Power Group, but failing to do so makes them more, and not less abstract.
We also are unpersuaded by Appellant's argument that the claims are
not directed to an abstract idea because the claimed invention "improves
upon the technical field of transaction processing by providing a specifically
defined system which determines acceleration of change in value as
compared to a threshold and identifies when that acceleration deviates from
the threshold, e.g. as indicative of a problem." App. Br. 5. The problem
addressed by Appellant's invention-rapid, excessive market fluctuations-
is not a problem unique to computer networks. See, e.g. Spec. ,r 7
("[T]raders, whether human or electronic, may not always react in a rational
manner .... "). Appellant does not claim to have invented electronic
trading, or even handling extreme market changes in electronic trading
markets. Spec. ,r 16 ("Systems exist to handle extreme market changes ...
. "). As such, the invention claimed here is not dissimilar to that found
abstract in other cases, as the focus is on "collecting information, analyzing
it using mathematical techniques" and as "many cases make clear, even if a
process of collecting and analyzing information is 'limited to particular
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content' or a particular 'source,' that limitation does not make the collection
and analysis other than abstract." SAP America, Inc. v. InvestPic, LLC,
Docket No. 2017-2081, Slip Op. 12-13 (Fed. Cir. Aug. 2, 2018) (quoting
Electric Power, 830 F.3d at 1353, 1355). In sum, Appellant does not
persuasively argue the claims are not directed to an abstract idea, and, we
therefore continue to step 2 of the Alice framework.
With respect to step 2, Appellant argues the claims are "akin to the
USPTO' s provided patent eligible examples" which "indicate that the recited
monitoring, identifying, determining, and performing are patentable." App.
Br. 7.
We also are not persuaded that by Appellant's contention that "the
claimed systems requires more than just a general purpose computer to
operate" because it "requires the specific environment of transaction
processing system based market." We note the claim itself does not recite
any "transaction processing system based market." Instead, it "monitor[ s ]" a
market and "identif[ies ]" information generated by the market, but the
claimed process does not specify that any of the claimed process steps are
performed by any transaction processing system based market. Indeed, the
Specification indicates that the claimed process may be performed by a
general purpose computer, and does not require specialized hardware in
order to do so. See Spec. ,r,r 90, 91.
We also do not find persuasive Appellant's contention that "the
claimed invention is patent-eligible under DDR Holdings because it is
"directed to solving a transaction/data processing-centric problem." App.
Br. 7. Rather, we view the problem as primarily a business problem-
mitigating the irrational trading behavior caused by extreme market activity
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and excessive volatility in trading markets, which may include both human
and electronic trading. See Spec. ,r,r 6-8. As such, we do not agree with
Appellant that the invention is rooted in technology in the same way as the
claims found to be eligible in DDR Holdings.
Finally, we do not find persuasive Appellant's argument that the
reasoning in the Board's denial of institution in Chicago Mercantile
Exchange, Inc. v. 5th Market, Inc., CBM2015-00061 (PTAB July 16, 2015)
(Paper 9), is highly relevant here. We note the cited decision of Chicago
Mercantile Exchange, Inc. was not designated precedential by the Patent
Trial and Appeal Board and is not binding on this panel. Moreover, the key
issue in Chicago Mercantile Exchange is not present here. Rather, the panel
in that proceeding merely held that the petitioner failed to adequately
address the proper interpretation of a means-plus-function element of a
claim, and consequently, failed to establish that it was more likely than not
that the claim was directed to patent-ineligible subject matter under§ 101.
See Chicago Mercantile Exchange at 37-38.
For the above-discussed reasons, we are not persuaded the Examiner
has erred in concluding Appellant's claims are directed to patent-ineligible
subject matter, and we therefore sustain the rejection under 35 U.S.C. § 101.
DECISION
We affirm the Examiner's decision to reject claims 1-21.
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)(l )(iv).
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AFFIRMED
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