Ex Parte Claus et al

Patent Trial and Appeal Board

Aug 24, 2018

13078189 (P.T.A.B. Aug. 24, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/078, 189 04/01/2011
63710 7590 08/28/2018
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
FIRST NAMED INVENTOR
Matthew W. Claus
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.
05-6287-C2 6955
EXAMINER
KHATTAR, RAJESH
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
08/28/2018 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):
patentdocketing@cantor.com
lkorovich@cantor.com
phowe@cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte MATTHEW W. CLAUS,
JAMES R. DRISCOLL,
GREGORY P. MANNING, and
JOSEPH C. NOVIELLO
Appeal2016-008585
Application 13/078, 189 1
Technology Center 3600
Before MURRIEL E, CRAWFORD, HUBERT C. LORIN, and
MATTHEWS. MEYERS, Administrative Patent Judges.
LORIN, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Matthew W. Claus (Appellants) seek our review under 35 U.S.C.
§ 134(a) of the Final Rejection of claims 1, 2, 4--13, 16-20, 37, and 38. We
have jurisdiction under 35 U.S.C. § 6(b). 2
1 The Appellants identify BGC Partners, Inc. as the real party in interest.
App. Br. 2.
2 The Appellants elected to waive their Request for Oral Hearing.
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Application 13/078, 189
SUMMARY OF DECISION
We AFFIRM.
THE INVENTION
Claim 13, reproduced below, is illustrative of the subject matter on
appeal.
13. A method for processing a composite trading order, comprising:
receiving, by the at least one computing device, a first trading
order for a first quantity of a first financial instrument from a first
trading participant;
responsive to receiving the first trading order, causing, by at
least one computing device, a display device to display a composite
value representing a weighted quantity of a plurality of financial
instruments, the plurality of financial instruments comprising at least a
second financial instrument that is different from the first financial
instrument;
determining, by the at least one computing device, at least one
input representing a composite trading order, wherein:
the at least one input comprises an amount that is
equal to at least a portion of the composite value;
the at least one input is usable to generate a
plurality of constituent trading orders for the plurality of
financial instruments that are configured to, if filled,
collectively substantially satisfy the composite trading
order, in which at least one of the constituent trading
orders comprises an order for the financial instrument
that is different from the first trading product; and
causing the at least one constituent trading order to
be transmitted to at least one market center.
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THE REJECTION
The following rejection is before us for review:
1. Claims 1, 2, 4--13, 16-20, 37, and 38 are rejected under 35 U.S.C.
§ 101 as being directed to judicially-excepted subject matter.
ISSUE
Did the Examiner err in rejecting claims 1, 2, 4--13, 16-20, 37, and 38
under 35 U.S.C. § 101 as being directed to judicially-excepted subject
matter.
ANALYSIS
The Appellants argued these claims as a group. See App. Br. 6 ("First
Group"). We select claim 13 as the representative claim for this group, and
the remaining claims 1, 2, 4--12, 16-20, 37, and 38 stand or fall with claim
13. 37 C.F.R. § 4I.37(c)(l)(iv).
Alice Corp. Pty. Ltd. v. CLS Banklnt'l, 134 S. Ct. 2347 (2014)
identifies a two-step framework for determining whether claimed subject
matter is judicially-excepted from patent eligibility under § 101.
According to Alice step one, "[ w ]e must first determine whether the
claims at issue are directed to a patent-ineligible concept," such as an
abstract idea. Alice, 134 S. Ct. at 2355.
In that regard, the Examiner determined that "[t]he claims are directed
to the abstract idea of processing a trade order which is a fundamental
economic practice." Final Rej. 3.
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The Appellants argue that "[ t ]he Office Action fails to identify which
specific recitation( s) recite the alleged abstract idea of 'processing a trading
order,' .... " App. Br. 7. From a plain reading of the claim, we see it
recited in the preamble ("method for processing a composite trading order").
See Two-Way Media Ltd. v. Comcast Cable Commc 'ns, LLC, 874 F.3d 1329,
1340 (Fed. Cir. 2017) ("First, we see no error here in the district court citing
to the preamble in its review of whether the claims are directed to an abstract
idea. See, e.g., BASCOM, 827 F.3d at 1348 (citing preamble for distillation
of abstract idea). The district court's inquiry centered on determining the
'focus' of the claims, and was thus in accord with our precedent. E.g., Elec.
Power Grp., 830 F.3d at 1353.").
The Appellants further argue that "[ t ]he Office Action also fails to
establish that 'processing a trading order' is, in fact, an abstract idea." App.
Br. 7. In that regard, "the decisional mechanism courts now apply [to help
answer that question] is to examine earlier cases in which a similar or
parallel descriptive nature can be seen-what prior cases were about, and
which way they were decided." Amdocs (Israel) Limited v. Openet Telecom,
Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016). In accord with that mechanism,
International Securities Exchange, LLC v. Chicago Bd. Options Exchange,
Inc., 2015 WL 930204 (PTAB 2015), ajfd, 640 F. App'x 986 (Mem) (Fed.
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Cir. 2016) is one such case. The claims involved therein are similar3 and
were determined to be patent-ineligible for being directed to the abstract idea
3 E.g., claim 1 of US 8,266,044:
1. A system for processing trades of securitized instruments based on
security orders and quotes received from client computers,
compnsmg:
at least one server computer comprising a memory, and a processor,
said server computer configured to perform the steps of:
receiving orders and quotes, wherein specified ones of said
quotes belong to a quote group, and wherein said specified ones of
said quotes have associated trading parameters comprising a
predefined number of bought or sold contracts relating to said quote
group;
generating a trade by matching said received orders and quotes
to previously received orders and quotes;
storing each of said orders and quotes when a trade is not
generated;
determining whether a quote having associated trading
parameters has been filled as a result of the generated trade, and if so,
determining a number of contracts that have been bought or sold
within said quote group, including the generated trade;
comparing said number of contracts that have been bought or
sold within said quote group with said predefined number of bought
or sold contracts relating to said quote group; and,
automatically modifying at least one of the remaining specified
ones of said quotes in the quote group if said predefined number of
bought or sold contracts is exceeded.
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of "managing trading risk ('risk management')." Id. at *6. Albeit
"processing a trading order," per se, and "managing trading risk ('risk
management')" are different, for purposes of determining whether the
concept to which the claims are directed to is an abstract idea, it is
difference in the level of abstraction at which the concept is described. See
Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240-1241 (Fed. Cir. 2016)
("An abstract idea can generally be described at different levels of
abstraction. As the Board has done, the claimed abstract idea could be
described as generating menus on a computer, or generating a second menu
from a first menu and sending the second menu to another location. It could
be described in other ways, including, as indicated in the specification,
taking orders from restaurant customers on a computer.") "Processing a
trading order" describes the concept to which the claims are directed to at a
very high level of abstraction, but here the concept can also be characterized
at a lower level of abstraction similar to the "managing trading risk ('risk
management')" description given for the concept to which the Chicago Bd.
Options Exchange claims were determined to be directed to. For example,
here the concept could be described as a scheme for displaying and
employing composite values. See Spec. 3: 12-20. Arguably, "the heart of
the claimed invention lies [there] .... " Intellectual Ventures I LLC v. Erie
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Indemnity Company, 850 F.3d 1315, 1328 (Fed. Cir. 2017). 4 Nevertheless,
when "[t]he focus of the asserted claims" is "on collecting information,
analyzing it, and displaying certain results of the collection and analysis,"
the claims are directed to an abstract idea. Elec. Power Grp., LLC v. Alstom
S.A., 830 F.3d 1350, 1343 (Fed. Cir. 2016). Accordingly, notwithstanding
the Examiner characterized the abstract idea to which the claims are directed
to at a very high level of abstraction, even if the concept is described at a
lower level of abstraction (e.g., displaying and employing composite values),
the claims are nonetheless directed to an abstract idea.
We have reviewed all the arguments as to the step one determination
but do not find them persuasive as to error in the determination that claim 13
is directed to an abstract idea.
Step two is "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."' Alice, 134 S. Ct. at 2355 (alteration in original) (quoting
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 73
(2012)).
In that regard, the Examiner determined that
4 "the 'directed to' inquiry applies a stage-one filter to claims, considered in
light of the specification, based on whether 'their character as a whole is
directed to excluded subject matter.' Internet Patents Corp. v. Active
Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015); see Genetic Techs. Ltd.
v. Merial L.L.C., 818 F.3d 1369, 1375, 2016 WL 1393573, at *5 (Fed. Cir.
2016) (inquiring into 'the focus of the claimed advance over the prior art')."
Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016).
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[ t ]he additional elements or combination of elements in the
claims other than the abstract idea per se amounts to no more
than: (i) mere instructions to implement the idea on a computer,
and (ii) recitations of generic computer structure that serves to
perform generic computer functions that are well-understood,
routine, and conventional activities previously known to the
pertinent industry. Viewed as a whole, these additional claim
elements do not provide meaningful limitations to transform the
abstract idea into a patent eligible application of the abstract
idea such that the claims amount to significantly more than the
abstract idea itself.
Final Rej. 3--4.
The Appellants argue that the Examiner failed to provide "a detailed
element-by-element analysis with an explanation for how each additional
element does not amount to significantly more than the alleged abstract idea
itself." App. Br. 9. However, we are satisfied that the Examiner provided
sufficient explanation in this case. Claim 13 calls for a "computing device"
to (a) "receiv[e]" a first information ("a first trading order ... "); (b), in
response thereto, "causing ... a display device to display" a second
information ["a composite value ... "]; and, ( c) "determin[ e ]" a third
information ["at least one input representing a composite trading order ... "].
Receiving, displaying, and determining are common information-processing
functions of generic computers, as the Examiner has indicated. There is
nothing in the claim to suggest that the scope of the claimed subject matter
precludes the use of a generic computer for doing so. In fact, the intrinsic
evidence supports the view that the scope of the claimed subject matter
covers the use of a generic computer, in line with the Examiner's
determination. See Spec. 9:8-17 ("System 10 may comprise one or more
clients 14 ... client 14 may comprise a computer, workstation, telephone, an
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Internet browser, an electronic notebook, a Personal Digital Assistant
(PDA), a pager, or any other suitable device (wireless or otherwise) .... ").
The Appellants further argue that "[t]he claims recite significantly
more than the alleged abstract idea." App. Br. 9. However, other than
reproducing claim 1 (App. Br. 9), it is not entirely clear what the Appellants
are pointing to in the claim that transforms the abstract idea into an inventive
application. The Appellants state that "[i]n fact, exemplary claim 1 does
recite 'significantly more' than simply 'processing a trading order."' App.
Br. 10. That is true. But the step two determination does not depend on the
number of words in the claim but rather whether the claim includes an
element or combination of elements sufficient to ensure that the subject
matter claimed in practice amounts to significantly more than to be upon the
abstract idea itself. As we have shown, claim 13, which claim 1 parallels, is
directed to processing a trade order or, more specifically, a scheme or
displaying and employing composite values, which are abstract ideas, while
using a generic computer as a conduit for implementing them. See In re TL!
Communications LLC Patent Litigation, 823 F.3d 607, 612 (Fed. Cir. 2016)
("Put differently, the telephone unit itself is merely a conduit for the abstract
idea of classifying an image and storing the image based on its classification.
Indeed, the specification notes that it 'is known' that 'cellular telephones
may be utilized for image transmission,' id. at col. 1 11. 31-34, and existing
telephone systems could transmit pictures, audio, and motion pictures and
also had 'graphical annotation capability,' id. at col. 1 11. 52-59.") Cf
Credit Acceptance Corp. v. Westlake Services, 859 F.3d 1044, 1057 (Fed.
Cir. 2017):
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Significantly, the claims do not provide details as to any non-
conventional software for enhancing the financing process. See
Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d
1332, 1342 (Fed. Cir. 2017) (explaining that "[o]ur law
demands more" than claim language that "provides only a
result-oriented solution, with insufficient detail for how a
computer accomplishes it"); Elec. Power Grp., 830 F.3d at
1354 (explaining that claims are directed to an abstract idea
where they do not recite "any particular assertedly inventive
technology for performing [ conventional] functions").
For these reasons, the Appellants' arguments are unpersuasive as to error in
the Examiner's determination that the claim does not include an element or
combination of elements sufficient to ensure that the subject matter claimed
in practice amounts to significantly more than to be upon the abstract idea
itself.
We note the question "if no feature of the claims ( alone or in
combination) recites 'significantly more' than simply 'processing a trading
order,' then why are the claims deemed allowable over the art?" App. Br.
10. But "a claim for a new abstract idea is still an abstract idea." Synopsys,
Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (quoting Mayo, 566
U.S. at 90). The question in step two of the Alice framework is not whether
an additional feature is novel or nonobvious but whether the implementation
of the abstract idea involves "more than [the] performance of 'well-
understood, routine, [and] conventional activities previously known to the
industry."' Content Extraction and Transmission LLC v. Wells Fargo Bank,
Nat. Ass 'n, 776 F.3d 1343, 1347--48 (Fed. Cir. 2014) (quoting Alice, 134 S.
Ct. at 2359).
There is a statement that "[i]n any event, the claims are directed
toward specific and narrow embodiments including meaningful limitations
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that in no way 'tie up' or pre-empt 'processing a trading order' such that
others cannot practice it." App. Br. 11. But"[ w ]hat matters is whether a
claim threatens to subsume the full scope of a fundamental concept, and
when those concerns arise, we must look for meaningful limitations that
prevent the claim as a whole from covering the concept's every practical
application." CLS Bank Int 'l v. Alice Corp. Pty. Ltd., 717 F .3d 1269, 1281
(Fed. Cir. 2013) (Lourie, J., concurring). Here, the additional words in the
claim simply narrows the abstract idea so that it is described at a lower level
of abstraction. They do not render the abstract idea to which the claim is
directed to any less an abstract idea. Also, pre-emption is not a separate test.
To be clear, the proper focus is not preemption per se, for
some measure of preemption is intrinsic in the statutory right
granted with every patent to exclude competitors, for a limited
time, from practicing the claimed invention. See 35 U.S.C. §
154. Rather, the animating concern is that claims should not be
coextensive with a natural law, natural phenomenon, or abstract
idea; a patent-eligible claim must include one or more
substantive limitations that, in the words of the Supreme Court,
add "significantly more" to the basic principle, with the result
that the claim covers significantly less. See Mayo, 132 S. Ct. at
1294. Thus, broad claims do not necessarily raise§ 101
preemption concerns, and seemingly narrower claims are not
necessarily exempt.
Id. See also Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
13 79 (Fed. Cir. 2015) ("[ w ]hile preemption may signal patent ineligible
subject matter, the absence of complete preemption does not demonstrate
patent eligibility."). Because we find the claimed subject matter covers
patent-ineligible subject matter, the pre-emption concern is necessarily
addressed. "Where a patent's claims are deemed only to disclose patent
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ineligible subject matter under the Mayo framework, [] preemption concerns
are fully addressed and made moot." Ariosa Diagnostics, 788 F.3d at 1379.
The Appellants further argue that
the present claims solve a problem rooted in computer
technology to improve the functionality of computer-
implemented trading systems by enabling an order for one
product to be analyzed and at least partially filled by orders for
a different product. The claimed solution is necessarily
implemented in a networked computer environment due to the
fast calculations required and the liquidity provided by a
plurality of traders in networked communication with one
another, e.g., via a central processor.
App. Br. 12. Notwithstanding that claim 13 makes no mention of a
networked computer environment, nevertheless for the reasons discussed -
namely because the claimed subject matter covers employing generic
computers for their common functions - we are unpersuaded that claim 13
recites any particular assertedly inventive technology. See also Bancorp
Services, L.L.C. v. Sun Life Assur. Co. of Canada (US.), 687 F.3d 1266,
1278 (Fed. Cir. 2012) ("[T]he use of a computer in an otherwise patent-
ineligible process for no more than its most basic function-making
calculations or computations-fails to circumvent the prohibition against
patenting abstract ideas and mental processes."); buySAFE, Inc. v. Google,
Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (stating "[t]hat a computer
receives and sends the information over a network-with no further
specification-is not even arguably inventive"); and, OIP Techs., Inc. v.
Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) ("relying on a
computer to perform routine tasks more quickly or more accurately is
insufficient to render a claim patent eligible").
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For the foregoing reasons, the Appellants' arguments are unpersuasive
as to error in the Examiner's determination that claim 13 does not include an
element or combination of elements sufficient to ensure that the claimed
subject matter in practice amounts to significantly more than to be upon the
abstract idea itself.
Pages 12-13 of the Appeal Brief ("3. Second to Twentieth Groups:
Claims 1-2, 4-13, 16-20, and 37-38, considered individually") urge that
each claim be separately treated. However, the discussion there does little
more than reproduce the claimed subject matter and rely on the arguments
we have already addressed above in challenging the patent-ineligibility of
claim 13. Accordingly, our earlier discussion is incorporated herein. Where
all claims are directed to the same abstract idea, "addressing each claim of
the asserted patents ... [is] unnecessary." Content Extraction, 776 F.3d at
1348.
We have considered all of the Appellants remaining arguments and
have found them unpersuasive. Accordingly, we find the Examiner's
determination that representative claim 13, and claims 1, 2, 4--12, 16-20, 37,
and 38, which stand or fall with claim 13, are directed to ineligible subject
matter under 35 U.S.C. § 101 has not been shown to be in error. Cf
LendingTree, LLC v. Zillow, Inc., 656 F. App'x 991, 997 (Fed. Cir. 2016)
("We have considered all of Lending Tree's remaining arguments and have
found them unpersuasive. Accordingly, because the asserted claims of the
patents in suit are directed to an abstract idea and do not present an
'inventive concept,' we hold that they are directed to ineligible subject
matter under 35 U.S.C. § 101.").
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DECISION
The decision of the Examiner to reject claims 1, 2, 4--13, 16-20, 37,
and 3 8 is affirmed.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv).
AFFIRMED
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