Ex Parte Carpenter et al

Patent Trial and Appeal Board

Dec 29, 2014

11796760 (P.T.A.B. Dec. 29, 2014)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte STEVEN A. CARPENTER,
DOUGLAS E. REED, and
SVEN JUNKERGARD
____________________

Appeal 2012-0060891
Application 11/796,7602
Technology Center 3600
____________________

Before BIBHU R. MOHANTY, NINA L. MEDLOCK, and
TARA L. HUTCHINGS, Administrative Patent Judges.

HUTCHINGS, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellants seek our review under 35 U.S.C. § 134 from the
Examiner’s final rejection of claims 1–35. We have jurisdiction under
35 U.S.C. § 6(b).
We AFFIRM-IN-PART.

1 Our decision references Appellants’ Appeal Brief (“App. Br.,” filed Sept.
14, 2011) and Reply Brief (“Reply Br.,” filed Feb. 23, 2012), and the
Examiner’s Answer (“Ans.,” mailed Dec. 23, 2011) and Final Office Action
(“Final Act.,” mailed Apr. 14, 2011).
2 The real party in interest, identified by Appellants, is E*Trade Financial
Corporation. App. Br. 3.
Appeal 2012-006089
Application 11/796,760

2
CLAIMED INVENTION
Appellants’ claimed invention is generally related to methods for
gathering and sharing investment and trade data. Spec. 1, ll. 14–15.
Claim 1, reproduced below, is illustrative of the subject matter on
appeal:
1. A method comprising:
receiving rank data of a plurality of investors, wherein
the rank data is a plurality of rank groups formed according to a
rank of each investor of the plurality of investors, wherein each
rank group corresponds to a segment of the plurality of
investors organized according to rank;
designating as a predictor group a rank group of the
plurality of rank groups, the predictor group identifying the
segment of the plurality of investors whose past performance is
a predictor of future investment performance; and
generating, using a server, an equity rating for each
security of a plurality of securities using trade parameters of
real-time trade data of investors of the predictor group, the
equity rating representing expected future performance of each
security.

REJECTIONS
Claims 1–18 are rejected under 35 U.S.C. § 101 as directed to non-
statutory subject matter.
Claims 1–15, 17–32, and 35 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Eicher (US 2007/0294119 A1, pub. Dec. 20, 2007),
Condron (US 2005/0267835 A1, pub. Dec. 1, 2005) and Kaundinya
(US 2007/0139212 A1, pub. June 21, 2007).
Claims 16, 33, and 34 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Eicher, Condron, Kaundinya, and Hughes
(US 2007/0043653 A1, pub. July 18, 2002).
Appeal 2012-006089
Application 11/796,760

3
ANALYSIS
Non-Statutory Subject Matter
The Examiner maintains that claims 1–18 are properly rejected under
§ 101 because the claims fail the machine-or-transformation test, i.e., the
claims are neither tied to a particular machine nor transform a particular
article into a different state or thing. Ans. 4–5 and 13–15. Appellants argue
that the rejection is improper because the claims recite that the claimed
method is performed “using a server,” i.e., a particular machine. App. Br.
10. The Examiner notes that “using a server” could mean sitting on a server
and manually generating equity ratings, but then concedes that this
interpretation is not supported by the Specification. Ans. 14
Before the mailing date of the Examiner’s Answer, the Supreme Court
held in Bilski v. Kappos, 130 S. Ct. 3218 (2010) that a patent claim’s failure
to satisfy the machine-or-transformation test is not dispositive of the § 101
inquiry. Id. at 3227. Because the Examiner relies only on the machine-or-
transformation test, the Examiner has failed to establish a prima facie case of
patent-ineligibility.
Therefore, we do not sustain the Examiner’s rejection of claims 1–18
under 35 U.S.C. § 101.
Obviousness
Independent Claim 1
We are not persuaded by Appellants’ argument that the Examiner
erred in rejecting independent claim 1 under 35 U.S.C. § 103(a) because
claim 1 requires generating an equity rating representing “expected future
performance of each security,” and not risk. App. Br. 11–12 and Reply
Br. 1. Appellants recognize that Condron teaches determining exposure to
Appeal 2012-006089
Application 11/796,760

4
certain types of risk, but argue that risk is not an “expected future
performance” because it does not predict a direction of a particular
investment or market. Id.
Claim 1 broadly recites “expected future performance of each
security,” not predicting a future direction of a particular investment or
market, as advocated by the Appellants. See App. Br. 12 and Reply Br. 1.
In addition, the Specification identifies risk as an exemplary performance
measure. Spec. 27, ll. 9–11 (“analyze each member’s portfolio to calculate
and monitor performance measures so that a member is provided data on
his/her portfolio returns, risk level, risk-adjusted performance and ranking”).
The Examiner explains that risk indicates a chance that an investment’s
actual return differs from an expected return and, thus, also indicates an
“expected future performance.” Ans. 15–16 (citing
www.investopedia.com/terms/r/risk.asp, accessed Dec. 16, 2011).
Elaborating further, knowing there is a low (or high) chance that a security’s
actual return will differ from an expected return would generally indicate
how the security is expected to perform in the future.
We agree with the Examiner’s finding that a broad, but reasonable,
interpretation of “expected future performance” includes risk. Because we
are not persuaded the Examiner erred, we sustain the rejection of
independent claim 1 under 35 U.S.C. § 103(a).
Dependent Claim 2
We are not persuaded by Appellants’ argument that Condron does not
teach or suggest investment data includes “watch lists,” because Condron
teaches storing securities in which there is a current investment, and not
securities that are not held or invested in. App. Br. 13.
Appeal 2012-006089
Application 11/796,760

5
Claim 2 broadly recites “watch lists” in a list of investment data. The
claim does not limit the term “watch lists” to securities that an investor is
watching, but not holding or investing in. As explained by the Examiner,
the term “watch list” is generally understood to mean “[a] list of securities
being monitored closely by a brokerage or exchange in order to spot
irregularities” and does not restrict the list to securities not held. Ans. 17–18
(citing http://www.investopedia.com/terms/w/watchlist.asp, accessed Dec.
16, 2011). Appellants’ Specification does not provide a definition for
“watch list” contrary to its generally accepted definition.
The Appellants argue that the Specification at page 21, lines 10–13
supports an interpretation of watch lists that precludes securities that an
investor is holding or investing. The referenced language, however, explains
that the IDSS provides information regarding what the “top 10%” of
members are holding, investing in, watching, and/or transacting. Spec. 21,
ll. 10–13. It does not state that one of these actions, if performed, must
preclude the other, such as investments being watched cannot be held,
invested in or transacted; or investments currently held cannot be invested in
further, otherwise transacted or watched.
In view of the foregoing, we do not find error in the Examiner’s
rejection under 35 U.S.C. § 103(a) of dependent claim 2.
Dependent Claim 7
We are persuaded by Appellants’ argument that the Examiner erred in
rejecting claim 7, because the cited combination fails to teach or suggest
generating an equity rating for each security representing expected future
performance of each security by “generating a quantity by subtracting the
number of sell transactions from the number of buy transactions; and
Appeal 2012-006089
Application 11/796,760

6
dividing the quantity by the total trade volume of the security.” App. Br.
13–14. The Specification describes that the claimed generating and dividing
steps provide information about which members have been buying a
particular security over a certain time period. Spec. 26, ll. 7–14.
The Examiner cites Eicher as disclosing these steps. Ans. 17–18.
However, the cited portions of Eicher disclose interpreting investment and
infrastructure data against a changing context, such as changing settlement
rates. Eicher ¶¶ 80–81. For example, Eicher discloses comparing a number
of trades settled in the current period to a number of trades settled in a
previous period, and including other information to interpret any change in
rate, such as an effect on the operation of the asset management business
under evaluation. Id. at ¶ 81.
Eicher’s disclosure of comparing a number of trades settled in the
current period to a number of trades settled in a previous period does not
teach or suggest subtracting the number of sell transactions from the number
of buy transactions and dividing the quantity by the total trade volume of the
security.
Thus, we do not sustain the rejection of dependent claim 7.
Dependent Claim 18
We are persuaded by Appellants’ argument that the Examiner erred in
rejecting the claim because the cited combination fails to teach or suggest
“balancing the transactional history, wherein the balancing manipulates the
transactional history to match the current holdings.” App. Br. 14.
Claim 18 ultimately depends from claim 1, and recites that the method
further comprises normalizing investment data, wherein normalizing
comprises:
Appeal 2012-006089
Application 11/796,760

7
classifying transactions of the investment data and
generating a transactional history of the investor;
comparing current holdings of an investor with the
transactional history; and
balancing the transactional history, wherein the balancing
manipulates the transactional history to match the current
holdings.

The Examiner concludes that Eicher’s teaching of building a baseline
of measures and comparing the measures to a prior period is the same as
building a transactional history and manipulating the transactional history to
match current holdings. Ans. 18. We disagree. Eicher discloses collecting
experiential data, such as the number of trades settled in a current period,
current trade volume, assets under management, a number of each security
type traded in a current period and a number of each transaction type.
Eicher ¶ 86. The experiential data is analyzed to identify how various
measures affect the business’ infrastructure performance and/or investment
performance. Id. at ¶¶ 71-76 and 86. We find nothing in the cited portions
of Eicher that discloses or suggests balancing the transactional history,
wherein the balancing manipulates the transactional history to match the
current holdings.
Therefore, we do not sustain the Examiner’s rejection of claim 18
under 35 U.S.C. § 103(a).
Dependent claims 3–6 and 8–17
Each of claims 3–6 and 8–17 depends from independent claim 1.
Appellants do not present any arguments for the separate patentability of
these dependent claims except to argue that the claims are allowable based
on their dependence on independent claim 1. App. Br. 13.
Appeal 2012-006089
Application 11/796,760

8
Because we are not persuaded, for the reasons outlined above, that the
Examiner erred in rejecting claim 1 under 35 U.S.C. § 103(a), we sustain the
Examiner’s rejection of claims 2–7, 9–14, and 16–20 for the same reasons.
Independent claims 19 and 35 and dependent claims 20–34
Claims 19 and 35 include language substantially similar to the
language of claim 1. We are not persuaded for the reasons set forth above
that the Examiner erred in rejecting claim 1 under 35 U.S.C. § 103(a).
Therefore, we sustain the Examiner’s rejection of independent claims 19 and
35 under 35 U.S.C. § 103(a) for the same reasons. We also sustain the
rejection of claims 20–34, which depend from claim 19.
DECISION
The Examiner’s rejection of claims 1–18 under 35 U.S.C. § 101 is
reversed.
The Examiner’s rejections of claims 1–6, 8–17, and 19–35 under 35
U.S.C. § 103(a) are affirmed.
The Examiner’s rejection of claims 7 and 18 under 35 U.S.C. § 103(a)
is reversed.
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-IN-PART

pgc