Ex Parte Cole et al

Patent Trial and Appeal Board

Feb 28, 2017

13311182 (P.T.A.B. Feb. 28, 2017)

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.
13/311,182 12/05/2011 Lee COLE JRL-4010-223 9845
23117 7590 03/02/2017
NIXON & VANDERHYE, PC
901 NORTH GLEBE ROAD, 11TH FLOOR
ARLINGTON, VA 22203
EXAMINER
MAGUIRE, LINDSAY M
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
03/02/2017 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):
PTOMAIL@nixonvan.com
pair_nixon @ firsttofile. com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte LEE COLE, DOUGLAS G. KITTELSEN,
M. GARY LAFEVER, and TED MYERSON
Appeal 2014-007700
Application 13/311,182
Technology Center 3600
Before: MURRIEL E. CRAWFORD, JOSEPH A. FISCHETTI, and
MICHAEL W. KIM, Administrative Patent Judges.
FISCHETTI, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE1
Appellants seek our review under 35 U.S.C. § 134 from the
Examiner’s final rejection of claims 1—20. We REVERSE and enter a new
ground of rejection under 35 U.S.C. § 101.
1 Appellants identify FTEN, Inc. as the real party in interest. (Appeal Br. 3).
Appeal 2014-007700
Application 13/311,182
THE CLAIMED INVENTION
Appellants claim a transaction management system. (Spec. para. 7).
Claim 1 is illustrative of the claimed subject matter:
1. A computer-implemented method for open order
management used in an open order management apparatus, the
open order management apparatus having one or more
processors, the computer-implemented method comprising:
creating, via the one or more processors, a financial
transaction grouping having a permission setting and one or more
nodes;
establishing, via the one or more processors, a
specific credit limit for the financial transaction grouping;
establishing, via the one or more processors,
individual credit limits for each node in the financial transaction
grouping;
determining, via the one or more processors, an
available credit amount for the financial transaction grouping
corresponding to a difference between the specific credit limit
and a sum of the individual credit limits for each node;
monitoring, via the one or more processors,
transactions conducted by each node; and
adjusting, via the one or more processors, an
individual credit limit for a node in the financial transaction
grouping when the node requires the adjusted individual credit
limit in accordance with the permission setting.
REFERENCES
The prior art relied upon by the Examiner in rejecting the claims on
appeal is:
Mills etal. US 7,024,386 B1 Apr. 4,2006
Togher et. al US 2004/0059668 A1 Mar. 25, 2004
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Application 13/311,182
REJECTIONS
The following rejection is before us for review. The Examiner
rejected claims 1—20 under 35 U.S.C. § 103(a) as unpatentable over Mills
and Togher.
FINDINGS OF FACT
We find the following facts by a preponderance of the evidence.
1. Mills is directed to “to electronic brokerage systems and in particular to
systems in which counterparties trade anonymously within fixed credit
limits.” (Mills col. 1,11. 6—8).
2. Mills discloses the adjustment of available credit by netting trades
within fixed credit limits, in disclosing:
an anonymous trading system for trading financial instruments
between traders for storing credit limits available for trades
between each trader or group of traders and possible counterparty
traders or groups of traders and credit adjustment means for
adjusting the credit available between a given party and a
counterparty following a trade with that counterparty, the credit
adjustment means calculating the change in exposure to the party
resulting from the trade and adjusting the credit limits
accordingly, whereby trades between a given trader and each
counterparty are netted.
{Id. at col. 2,11. 37-47).
3. Mills discloses that the netting of trades leads to more credit being
available “without varying credit limits.” {Id. at col. 2 11. 51—54).
4. Mills describes “credit limit” when instead actually describing credit
remaining available, in that Mills discloses the “gross counter party
credit limit is the minimum amount of remaining credit between two
counterparties.” {Id. at col. 1,11. 30-32).
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Application 13/311,182
5. Mills provides an example of netting that has a minimal effect on
available credit, in that two equal and opposite 10M trades net to zero,
and a $10.7M trade between parties is offset by a $10.8M opposite-
direction trade between the same parties, resulting in an effect on
available credit of only $0.1M, at Figure 9, shown below:
BANKA:
Trade 1
Trade 2
Exposure
EUR
10.Q0M
(10.00M)
0
USD
; 10.70?/;
1Q.8QM
Q.1M
6.
Figure 9 of Mills showing the effect on available credit from
netting opposite-direction trades between two parties.
Mills describes that in Figure 9:
there will be no EUR payment as the net result of the two EUR
transactions is +10M-10M=0. The net result of the two USD
transactions is a payment from Bank B to Bank A of USD
100,000 representing the difference between the USD sale and
purchase. Thus, the amount of credit utili[z]ed or the total
exposure to Bank A is USD 100,000.
(Id. at col. 13,11.31-36).
7. Mills provides an example at Figure 12 of the same USD trades between
Bank A and Bank B without the netting of trades, that has a $21.5M
reduction in available credit, without adjusting the $50M credit limit:
Bank A:
Credit Deal Credit
Limit (USD) Amount (USD) Available
SOtVf TO,71V! 39.3M
SOM io.aw 28.5M
Figure 12 of Mills showing the affect on available credit without
netting of trades.
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Application 13/311,182
8. Mills describes Figure 12, stating “each of the two trades would result
in the credit limits being decreased by the USD value of the trade such
that the total reduction in credit for the two trades would be
USD21.5M.” {Id. at col. 15,11. 40-43).
9. Togher discloses a system that filters out from display any anonymous
trade offers that a trader would not be eligible to conduct with a
particular anonymous counterparty, given the available credit left
between the parties by prescreening trades before display, where “the
prescreening is a simple check to determine whether any credit remains
between the two possible counterparties to the potential transaction, and
thus may be performed using a simple yes/no Preauthorization Matrix
before any bid or offer is transmitted to a particular client site.” (Togher
para. 8).
10. Togher discloses that an administrator with appropriate permissions
may alter a counterparty-specific credit limit for a group of traders,
which limit is “a maximum Business Day Credit Limit for each eligible
counterparty which represents the maximum cumulative value of trades
that may be executed by all traders of the Trading Floor with the
designated counterparty” or group of trading floors together. (Togher
para. 53).
11. The Specification describes that a “node” may be a “computer.” (Spec,
para. 34).
12. The Specification also describes that a “node” may be an “individual
trader.” (Spec. para. 37).
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Application 13/311,182
13. The Specification describes that the claimed processes may be
performed “with a suitably programmed microprocessor or general
purpose computer.” (Spec. para. 28).
ANALYSIS
Rejection under 35 U.S.C. § 103(a)
Each of independent claims 1, 8, 9, and 15, which are all the pending
independent claims, recites language substantially equivalent to “adjusting,
via the one or more processors, an individual credit limit for a node in the
financial transaction grouping when the node requires the adjusted
individual credit limit in accordance with the permission setting,” as recited
in independent claim 1.
Appellants argue that the combination of Mills and Togher fails to
disclose the adjustment of an individual credit limit in accordance with a
permission setting. (Reply Br. 2—3; see also Appeal Br. 13—15).
In rejecting claim 1, the Examiner finds that Mills discloses
“adjusting, via the one or more processors, an individual credit limit for a
node in the financial transaction grouping when the node requires the
adjusted individual credit limit,” (at Mills col. 2 11. 37-47 and 64—67, and at
col. 12,1. 60 to col. 13,1. 10) (Final Act. 3). The Examiner, however, finds
that Mills fails to disclose a “permission setting,” and adjusting the limit “in
accordance with the permission setting,” which the Examiner finds instead
in Togher at claim 32. (Id.). The remaining independent claims are rejected
using the same rationale. (Final Act. 6).
Mills discloses fixed credit limits for anonymous trading, where the
netting of opposite-direction trades has a reducing effect on available credit,
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thus, avoiding the need to adjust credit limits. (FF 1—3). Mills refers
interchangeably to “available credit” and “credit limit.” (See FF 4). Mills
discloses two examples of trade scenarios where netting is, and is not used
showing the increase of available credit through netting that would
otherwise consume available credit without netting ($0.1M vs. $21.5M).
(FF 5-8).
But, we find that Mills does not adjust credit limits, because Mills
discloses using netting of trades to AVOID adjusting credit limits. (FF 1, 3).
Although available credit is a form of a limit, the claim differentiates
between a credit limit and an available credit, because available credit is
determined, in the claim, by calculating the “difference between the specific
credit limit and a sum of the individual credit limits for each node.”
Therefore, Mills does not disclose adjusting a credit limit as claimed,
especially as an “individual” credit limit.
Togher does not remedy this deficiency. Togher discloses a system to
filter out displaying potential trades between a trading floor’s traders and
particular counterparties when the potential trade would exceed a credit
limit, if executed. (FF 9). In that case, Togher’s system does not display the
potential trade to the traders. (Id.).
Togher does, however, disclose that an administrator may manually
adjust a credit limit for an entire group of traders, such as a “Trading Floor”
or groups of Trading Floors. (FF 10). This is a manual step, for an entire
group of traders rather than an individual trader, and is not disclosed as
being undertaken “when the node requires the adjusted individual credit
limit” as claimed. Togher, thus, meets the claim language as to
“establishing, via the one or more processors, a specific credit limit for the
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financial transaction grouping,” but not establishing or adjusting credit limits
for individual trading nodes or traders, as claimed.
For these reasons, the Examiner, in relying on the disclosures of Mills
and Togher, without more, has failed to establish a prima facie case of
obviousness of the independent claims under 35 U.S.C. § 103(a).
New Ground of Rejection under 35 U.S.C. § 101
The patent statute provides that a patent may be obtained for “any new
and useful process, machine, manufacture, or composition of matter, or any
new and useful improvement thereof.” 35 U.S.C. § 101. Yet the Supreme
Court has “long held that this provision contains an important implicit
exception: Laws of nature, natural phenomena, and abstract ideas are not
patentable.” Alice Corp. Pty. Ltd. v. CLS BankInt'l, 134 S. Ct. 2347, 2354
(2014) (quoting Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 133
S. Ct. 2107, 2116 (2013)). The Court has, thus, made clear that
“[phenomena of nature, though just discovered, mental processes, and
abstract intellectual concepts are not patentable, as they are the basic tools of
scientific and technological work.” Gottschalk v. Benson, 409 U.S. 63, 67
(1972).
The Supreme Court in Alice reiterated the two-step framework, set
forth previously in Mayo Collaborative Services v. Prometheus Labs., Inc.,
132 S. Ct. 1289, 1300 (2012), “for distinguishing patents that claim laws of
nature, natural phenomena, and abstract ideas from those that claim patent-
eligible applications of these concepts.” Alice, 134 S. Ct. at 2355. The first
step in that analysis is to “determine whether the claims at issue are directed
to one of those patent-ineligible concepts.” Id. If so, the second step is to
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Application 13/311,182
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 patent-eligible application.” Id. {citing Mayo, 132
S. Ct. at 1291, 1297). 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. {citingMayo, 132 S.
Ct. at 1294).
The Specification describes that a claimed “node” may be either a
computer or a trader. (FF 11, 12). Independent claim 1, thus, is directed to a
method for determining a gross trading credit limit for a group of traders or
computers, allocating a portion of the credit limit to each of various traders
or computers as individual credit limits, determining an unallocated portion
of the group credit limit, monitoring each trader’s/computer’s use of the
credit limit in trading transactions, and adjusting an individual credit limit
for a trader or computer when a node “requires.” More succinctly, we find
that independent claim 1 is directed to management of group credit. See
also Spec. Tfl[ 8—12 (summary of invention directed to the same).
With find that a credit limit is an abstract mental concept, as are
individual limits allocated among members of a group to which the credit
limit applies. We find further that the monitoring of trades is an input
operation to get data that is then used in a simple mathematical calculation
for determining how much credit is used by trades. We find additionally
that adjusting an individual credit limit is also a mental task of altering an
abstract number, based on what the individual “requires.” The establishing,
monitoring, and adjusting of credit limits can be performed entirely through
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Application 13/311,182
mental thought, potentially using only pen and paper. We find additionally
that the management of group credit has been a fundamental economic
practice for millennia.
The Federal Circuit has held that if a method can be performed by
human thought alone, or by a human using pen and paper, it is merely an
abstract idea and is not patent-eligible under § 101. CyberSource Corp. v.
Retail Decisions, Inc., 654 F.3d 1366, 1373 (Fed. Cir. 2011) (“[A] method
that can be performed by human thought alone is merely an abstract idea and
is not patent-eligible under § 101.”). Additionally, mental processes, e.g.,
computing a score, as recited in claim 1, remain unpatentable even when
automated to reduce the burden on the user of what once could have been
done with pen and paper. Id. at 1375 (“That purely mental processes can be
unpatentable, even when performed by a computer, was precisely the
holding of the Supreme Court in Gottschalkv. Benson, [409 U.S. 63
(1972)].”). We determine also that, on this record, the subject matter recited
in dependent claims 2—7 do not alter appreciably our above analysis of
independent claim 1. That same analysis is also applicable to independent
claims 8, 9, and 15, and all of their respective dependent claims.
Turning to the second step of the Alice analysis, because we find that
claim 1 is directed to an abstract idea, the claim must include an “inventive
concept” in order to be patent-eligible, i.e., there must be an element or
combination of elements that is sufficient to ensure that the claim in practice
amounts to significantly more than the abstract idea itself.
The Specification describes that the process may be performed with a
“general purpose computer.” (FF 13). Claim 1, at best then, adds only a
processor, i.e., a generic computer component, which does not satisfy the
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inventive concept. “[A]fter Alice, there can remain no doubt: recitation of
generic computer limitations does not make an otherwise ineligible claim
patent-eligible. The bare fact that a computer exists in the physical rather
than purely conceptual realm is beside the point.” DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (internal citations
and quotation marks omitted).
The dependent claims further define mathematical formulas (claims 2,
3,10, and 16), define what the limits apply to (claims 4, 11), indicate that
“requires” means exceeding a limit based on a size of transactions (claims 5,
12, and 18), allocate unallocated reserve credit limit (claims 6, 13, and 19),
or move credit limit from node to node (claims 7, 14, and 20). Nothing in
method claims 1—7 purports to improve computer functioning or “effect an
improvement in any other technology or technical field.” Alice, 134 S. Ct. at
2359. Nor do claims solve a problem unique to the Internet. See DDR
Holdings, 773 F.3d at 1257. The claims also are not adequately tied to “a
particular machine or apparatus.” Bilski v. Kappos, 561 U.S. 593, 601
(2010).
Because claims 1—7 are directed to an abstract idea and nothing in the
claims adds an inventive concept, the claims are not patent-eligible under
§101.
We find no meaningful distinction between independent method claim
1 and either independent medium claim 8, independent apparatus claim 9, or
independent system claim 15; the claims all are directed to the same
underlying invention, namely, group credit management. Therefore, we
enter a new rejection of independent claims 1, 8, 9, and 15 under § 101. As
the Federal Circuit has made clear “the basic character of a process claim
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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.” See CyberSource, 654 F.3d at 1375-76
(citing In re Abele, 684 F.2d 902 (CCPA 1982)). Because we find that
dependent claims 2—7, 10-14, and 16—20 lack additional elements that
would render the claims patent-eligible, we also enter a new ground of
rejection under § 101 of these dependent claims on the same basis as the
independent claims from which they depend.
CONCLUSIONS OF LAW
The Examiner erred in rejecting claims 1—20 under 35 U.S.C.
§ 103(a).
DECISION
For the above reasons, the Examiner’s rejection under 35 U.S.C.
§ 103(a) of claims 1-20 is REVERSED.
We enter a new ground of rejection under 35 U.S.C. § 101 of claims
1—20 as reciting ineligible subject matter in the form of an abstract idea.
This decision contains new grounds of rejection pursuant to 37 C.F.R.
§ 41.50(b) (2008). 37 C.F.R. § 41.50(b) provides “[a] new ground of
rejection pursuant to this paragraph shall not be considered final for judicial
review.”
37 C.F.R. § 41.50(b) also provides that the appellant, WITHIN TWO
MONTHS FROM THE DATE OF THE DECISION, must exercise one of
the following two options with respect to the new ground of rejection to
avoid termination of the appeal as to the rejected claims:
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(1) Reopen prosecution. Submit an appropriate
amendment of the claims so rejected or new evidence relating to
the claims so rejected, or both, and have the matter reconsidered
by the examiner, in which event the proceeding will be remanded
to the examiner....
(2) Request rehearing. Request that the proceeding be
reheard under § 41.52 by the Board upon the same record ....
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).
REVERSED; 37 C.F.R, $ 41.50(b)
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