Ex Parte Czupek et al

Patent Trial and Appeal Board

May 11, 2018

12246775 (P.T.A.B. May. 11, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/246,775 10/07/2008
12684 7590 05/15/2018
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
FIRST NAMED INVENTOR
Andrew P. Czupek
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.
4672-08699BUS 6756
EXAMINER
GREGG, MARY M
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
05/15/2018 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 ANDREW P. CZUPEK, BRYANT. DURKIN,
THOMAS G. McCABE, BRIAN M. WOLF,
DONALD M. CUBA, JONATHAN G. KRONSTEIN, and
TROYC. KANE 1
Appeal2017-002005
Application 12/246, 77 5
Technology Center 3600
Before JAMES R. HUGHES, ERIC S. FRAHM, and
MATTHEW J. McNEILL, Administrative Patent Judges.
HUGHES, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from a rejection of
claims 1-23. We have jurisdiction under 35 U.S.C. § 6(b).
We affirm.
1 According to Appellants, the real party in interest is Chicago Mercantile
Exchange Inc. App. Br. 2.
Appeal2017-002005
Application 12/246,775
Appellants' Invention
The invention generally relates to "matching and allocating orders in
an electronic trading environment." Spec. i-f 50. Independent claim 1,
reproduced below, is illustrative of the claimed subject matter:
1. A computer-implemented method of order allocation, the
computer-implemented method comprising:
establishing a quantity cap indicating a maximum
allowable quantity of lots for an order;
receiving, by a trading host, at least one incoming
unfulfilled order from a terminal of a trader, comprising an offer
to buy or sell a product, associated with a plurality of lots;
comparing, with the trading host, the plurality of lots
associated with the received at least one incoming unfulfilled
order with the quantity cap;
designating, with the trading host, at least a portion of the
plurality of lots as a priority portion of the plurality of lots when
the plurality of lots is less than or equal to the quantity cap;
allocating, with the trading host, the priority portion of
the plurality of lots to at least one resting counter order utilizing
a first allocation algorithm;
generating, with the trading host, data indicating a first
matched trade between the at least one resting counter order and
the allocated priority portion of the plurality of lots;
allocating, with the trading host, a remaining portion of
the plurality of lots to at least one other resting counter order
utilizing a second allocation algorithm; and
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generating, with the trading host, data indicating a second
matched trade with the other resting counter order and the
allocated remaining portion of the plurality of lots;
wherein the designating is performed prior to the
allocating of the plurality of lots.
Rejections on Appeal
Claims 1-23 stand rejected under 35 U.S.C. § 101 as being directed
to patent-ineligible subject matter.
Claims 1--4, 6-11, 13-15, and 22 stand rejected under 35 U.S.C.
§ 103(a) as being unpatentable over Chait (US 7,827,092 B2; issued Nov. 2,
2010), Appellants' Admitted Prior Art ("AAP A"), Krishna (US
2007/0233301 Al; published Oct. 4, 2007), and Bartko (US 2008/0172319
Al; published July 17, 2008).
Claims 5 and 16 stand rejected under 35 U.S.C. § 103(a) as being
unpatentable over Chait, AAP A, Krishna, Bartko, and Borsand (US
7,742,977 Bl; issued June 22, 2010).
Claims 12 and 17-21 stand rejected under 35 U.S.C. § 103(a) as
being unpatentable over Chait, Krishna, and Bartko.
Claim 23 stands rejected under 35 U.S.C. § 103(a) as being
unpatentable over Chait, AAP A, and Krishna.
ANALYSIS
Patent-Ineligible Subject Matter
Appellants argue claims 1-23 together as a group. See App. Br. 5-
10. We select independent claim 1 as representative in our analysis below. 2
2 "When multiple claims subject to the same ground of rejection are argued
as a group or subgroup by appellant, the Board may select a single claim
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Application 12/246,775
Under 35 U.S.C. § 101, a patent may be obtained for "any new and
useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof." 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) (quotingAss'nfor
Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66 (2012), "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. Assuming that a claim nominally falls within one of the statutory
categories of machine, manufacture, process, or composition of matter, the
first step in the analysis is to "determine whether the claims at issue are
directed to one of those patent-ineligible concepts." Id. For example,
abstract ideas include, but are not limited to, fundamental economic
practices, methods of organizing human activities, an idea of itself, and
mathematical formulas or relationships. Id. at 2355-57. If the claim is
directed to a judicial exception, such as an abstract idea, the second step is
to determine whether additional elements in the claim "'transform the
nature of the claim' into a patent-eligible application." Id. at 2355 (quoting
Mayo, 566 U.S. at 78). This second step is described as "a search for an
'"inventive concept"'-i.e., an element or combination of elements that is '.
from the group or subgroup and may decide the appeal as to the ground of
rejection with respect to the group or subgroup on the basis of the selected
claim alone." 37 C.F.R. § 41.37(c)(iv).
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.. significantly more than ... the [ineligible concept] itself."' Id. at 2355
(alteration in original) (quoting Mayo, 566 U.S. at 72-73).
Alice Step One
"[T]he first step in the Alice inquiry ... asks whether the focus of the
claims is on the specific asserted improvement in computer capabilities ...
or, instead, on a process that qualifies as an 'abstract idea' for which
computers are invoked merely as a tool." Enfzsh, 822 F.3d 1327, 1335-36.
"The abstract idea exception prevents patenting a result where 'it matters
not by what process or machinery the result is accomplished."' McRO, Inc.
v. Bandai Namco Games America Inc., 837 F.3d 1299, 1312 (Fed. Cir.
2016) (quoting O'Reilly v. Morse, 56 U.S. (15 How.) 62, 113 (1853)). "We
therefore look to whether the claims ... focus on a specific means or
method that improves the relevant technology or are instead directed to a
result or effect that itself is the abstract idea and merely invoke generic
processes and machinery." McRO, 837 F.3d at 1314.
Appellants argue, succinctly, that the "claims are directed to the how
of doing something; not the what (abstract) of doing something. The claims
are not abstract and as such are statutory subject matter." App. Br. 5. We
do not find this argument persuasive. In particular, Appellants have not
shown the Examiner failed to identify an abstract idea. Nor have
Appellants specifically explained why claim 1 is directed to a technological
improvement-"the how of doing something" (id. }-as opposed to an
abstract idea itself. Appellants assert "the claims recite a specific method
for a trading host to quickly, efficiently, and effectively asymmetrically
allocate incoming transactions across multiple previously received
transactions using different allocation methodologies." Id. However, the
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function of "allocat[ing] incoming transactions across multiple previously
received transactions using different allocation methodologies" (id.) is
merely descriptive of an abstract idea itself. That a trading host can
perform this function "quickly, efficiently, and effectively" (id.) does not
specify the way in which the claimed trading host operates to allocate
orders. Moreover, performing a function more "quickly, efficiently, and
effectively" is the hallmark of a "process that qualifies as an 'abstract idea'
for which computers are invoked merely as a tool." Enfish, 822 F.3d at
1335-36.
Appellants also argue the "claims do not pre-empt or seek to tie up
'comparing, designating and allocating orders based on rules' and as such
are not abstract." App. Br. 5; see also Reply Br. 1-3. However, while
preemption is the concern that drives the exclusionary principle of judicial
exceptions to patent-eligible subject matter, Alice, 134 S.Ct. at 2354,
preemption is not a separate test of patent-eligibility, but is inherently
addressed within the Alice framework. 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.").
Alice Step Two
The second step in the Alice analysis requires a search for an
"inventive concept" that "must be significantly more than the abstract idea
itself, and cannot simply be an instruction to implement or apply the
abstract idea on a computer." Bascom Global Internet Services, Inc. v.
AT&T Mobility LLC, 827 F.3d 1341, 1349 (2016). There must be more
than "computer functions [that] are 'well-understood, routine, conventional
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activit[ies]' previously known to the industry." Alice, 134 S.Ct. at 2359
(second alteration in original) (quoting Mayo, 566 U.S. at 73).
Appellants argue "the claims include meaningful limitations that are
other than what is well-understood, routine and conventional in the field,"
and that "when taken as an ordered combination, provide unconventional
steps that confine the abstract idea to a particular useful application." App.
Br. 5---6. We disagree with Appellants. The claimed "terminal of a trader"
and "trading host" are not imbued with any specific technological
functionality so as to require any more than conventional computers.
Although the "trading host" is recited as performing a number of steps-
e.g., "receiving ... at least one incoming unfulfilled order from a terminal
of a trader," "comparing ... the plurality of lots ... with the quantity cap,"
"designating ... at least a portion of the plurality of lots as a priority
portion ... when the plurality of lots is less than or equal to the quantity
cap," "allocating ... the priority portion ... to at least one resting counter
order utilizing a first allocation algorithm," and "generating ... data
indicating a first matched trade"-these steps are not claimed with such
specificity so as to require more than conventional computer networking
capabilities or computer processing capabilities such as performing logic
and arithmetic operations. While claim 1 recites using "a first allocation
algorithm" and "a second allocation algorithm" for the "allocating" steps,
the claim does not tell us what the algorithms are.
Considering the steps of claim 1 as an ordered combination, we see
no unconventional arrangement of conventional computers. Rather, claim 1
simply requires a "trading host" that can receive orders from a "terminal of
a trader," and thereafter perform a sequence of steps for executing the
order. The sending of data from one computer to another for processing
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hardly constitutes an unconventional arrangement. Cf Bascom Global
Internet Services Inc., v. AT&T Mobility LLC, 827 F.3d 1341, 1350
("Filtering content on the Internet was already a known concept, and the
patent describes how its particular arrangement of elements is a technical
improvement over prior art ways of filtering such content."). Accordingly,
claim 1 does not include more than "computer functions [that] are 'well-
understood, routine, conventional activit[ies]' previously known to the
industry." Alice, 134 S.Ct. at 2359 (second alteration in original) (quoting
Mayo, 566 U.S. at 73).
Appellants also argue that, "as with the invention at issue in the DDR
case, which was directed to solving an Internet-centric problem, Appellants'
claimed invention [is] similarly patentable, and directed to solving a
transaction/data processing-centric problem." App. Br. 8. We disagree
with Appellants that the instant claims are analogous to those in DDR
Holdings. In DDR Holdings, LLC v. Hotels.com, L.P., the Federal Circuit
found that claims drawn to "generating a composite web page that
combines certain visual elements of a 'host' website with content of a third-
party merchant" provided a solution "necessarily rooted in computer
technology in order to overcome a problem specifically arising in the realm
of computer networks." 773 F.3d 1245, 1248, 1257 (Fed. Cir. 2014). In
contrast, Appellants' invention solves a problem of selecting and
implementing an algorithm or algorithms to fulfill orders. See Spec. i-f 9.
The Specification provides the following:
Regardless of the specific configuration of a particular
trading platform, each of the trading platforms will typically
include one or more matching algorithms, methods and schemes
for allocating incoming orders to other incoming or resting
orders. Because incoming orders will rarely be identical to, i.e.,
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have the same quantities, prices and other variables, the other
incoming or resting orders, the algorithms, methods and schemes
are, for example, intended: to allocate orders to promote and/or
reward market makers; to assure an equitable distribution of the
incoming order; and to regulate the trading volume.
Id. (emphasis added).
As markets and technologies available to traders evolve,
the allocation algorithms used by trading hosts must also
evolve accordingly to enhance liquidity and price
discovery in markets.
Spec. i-f 24 (emphasis added). As the Specification makes clear, what is
important to Appellants' invention is not the trading platform, but the
algorithms. That is, Appellants' invention aims to improve the algorithms
used to fulfill orders, not the technology. Accordingly, claim 1 does not
embody a solution "necessarily rooted in computer technology" to
overcome a computer-based problem as in DDR Holdings. 773 F.3d at
1257. To the extent Appellants argue the algorithms described in the
Specification provide a software-based solution to a computer programming
problem (and that DDR Holdings should apply on this basis) (see App. Br.
8-9; Reply Br. 6-7), we disagree. Appellants have not pointed to any
specific computer programming algorithms described in the Specification.
Rather, the portion of the Specification identified in the "Summary of
Claimed Subject Matter" in the Appeal Brief (App. Br. 2-3), for example,
describes a "pro-rata allocation algorithm 1700" that is essentially a
mathematical algorithm comprised of mental steps, not a computer
program. Spec. i-fi-1216-224. In any event, claim 1 neither identifies
algorithms described in the Specification that are used to fulfill orders, nor
specifically defines any algorithms.
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We are, therefore, not persuaded the Examiner erred in rejecting
claim 1, and claims 2-23 grouped therewith, as patent-ineligible.
Obviousness
Appellants contend, among other things, that "Krishna relates
'generally to the automation of semiconductor fabrication operations'" and
therefore "does not include 'a similar or analogous device (method, or
product)."' App. Br. 11-12. We agree with Appellants that Krishna is not
analogous art, and therefore we conclude it would not have been obvious to
combine Krishna with the other references to make the claimed invention.
Two separate tests define the scope of analogous prior art: ( 1)
whether the art is from the same field of endeavor, regardless of
the problem addressed and, (2) if the reference is not within the
field of the inventor's endeavor, whether the reference still is
reasonably pertinent to the particular problem with which the
inventor is involved.
In re Klein, 647 F.3d 1343, 1348 (Fed. Cir. 2011) (quoting In re Bigio, 381
F.3d 1320, 1325 (Fed. Cir. 2004)). Here, the field of endeavor relates to
"matching and allocating orders in an electronic trading environment."
Spec. ,-r 50. Krishna, in contrast, relates to assigning semiconductor wafer
lots to specific tools or entities within a semiconductor fabrication facility.
See Krishna, Abstract. We find the differences between the fields of
endeavor of the present invention and Krishna are readily apparent, and we
need not delve into greater detail with respect to this prong of the analogous
art inquiry.
Regarding the second prong, the Federal Circuit has held that "[a]
reference is reasonably pertinent if ... it is one which, because of the matter
with which it deals, logically would have commended itself to an inventor's
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attention in considering his problem." Klein, 647 F.3d at 1348 (quoting In
re Clay, 966 F.2d 656, 658 (Fed. Cir. 1992)). That is, "[i]f a reference
disclosure has the same purpose as the claimed invention, the reference
relates to the same problem, and that fact supports use of that reference in
an obviousness rejection." Id. Krishna describes a controller in a
semiconductor fabrication facility that uses an algorithm to "assign lots of
wafers to be processed to entities 102 available or reasonably assumed to be
available to process those lots." Krishna, i-fl3. Further, the lots may be
sorted according to priorities where, for example, "one sorting option may
be to assign certain 'hot lots' to the top priority and the rest of the lots may
be sorted by time of arrival at a given entity or process step." Krishna, i123.
We find, however, Krishna does not have the same purpose as Appellants'
invention, and therefore would not have commended itself to Appellants'
attention. Although both Krishna and the present invention relate to
matching things together, they could only be said to have the same purpose
at an unreasonably high level of abstraction. Krishna describes a way of
assigning semiconductor wafer lots to tools or entities for processing the
lots in order to solve, in essence, a scheduling and workflow problem. In
contrast, Appellants' invention concerns the problem of fulfilling incoming
orders with existing counter orders on a trading exchange where "incoming
orders will rarely be identical to, i.e., have the same quantities, prices and
other variables, the other incoming or resting orders." Spec. i1 9. In other
words, the respective problems addressed in Krishna and the present
invention are different in kind because Krishna matches physical work lots
with tools that can process the work lots, whereas the present invention
matches and allocates portions of incoming orders to existing counter
orders.
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Accordingly, Krishna is not analogous art because it neither relates to
the same field of endeavor as Appellants' invention, nor is reasonably
pertinent to the problem with which Appellants were involved. Each of the
Examiner's rejections under§ 103(a) relies upon Krishna. Therefore, we
are constrained by the record to find the Examiner erred in rejecting claims
1-23 as obvious.
CONCLUSIONS
Under 35 U.S.C. § 101, Appellants have not shown the Examiner
erred in rejecting claims 1-23.
Under 35 U.S.C. § 103(a), we are persuaded the Examiner erred in
rejecting claims 1-23.
DECISION
We affirm the Examiner's decision to reject claims 1-23 because we
have affirmed at least one ground of rejection for each of the claims. See
3 7 C.F .R. § 41. 50( a )(1) ("The affirmance of the rejection of a claim on any
of the grounds specified constitutes a general affirmance of the decision of
the examiner on that claim, except as to any ground specifically reversed.").
No time period for taking any subsequent action in connection with
this appeal may be extended. See 37 C.F.R. § 1.136(a)(l)(iv).
AFFIRMED
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