Ex Parte Farnstrom et al

Patent Trials and Appeals Board

May 28, 2019

14574930 - (D) (P.T.A.B. May. 28, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/574,930 12/18/2014
35811 7590 05/30/2019
IP GROUP OF DLA PIPER LLP (US)
ONE LIBERTY PLACE
1650 MARKET ST, SUITE 4900
PHILADELPHIA, PA 19103
FIRST NAMED INVENTOR
Amy Joy Farnstrom
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.
NGI-14-1080R 1999
EXAMINER
WARDEN, MICHAEL J
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
05/30/2019 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):
pto. phil@dlapiper.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte AMY JOY F ARNSTROM, STEVEN G. CRUTCHFIELD, and
JAMES HYDE
Appeal2018-005513 1
Application 14/574,930
Technology Center 3600
Before HUBERT C. LORIN, JOSEPH A. FISCHETTI, and
NINA L. MEDLOCK, Administrative Patent Judges.
FISCHETTI, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants seek our review under 35 U.S.C. § 134 of the Examiner's
non-final rejection of claims 1, 2, 4--9, and 11. We have jurisdiction under
35 U.S.C. § 6(b ).
SUMMARY OF DECISION
We AFFIRM.
1 Appellants identify NYSE Group, Inc. as the real party in interest. App.
Br. 1.
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Application 14/574,930
THE INVENTION
Appellants state, "[t]he disclosure generally relates to the field of
electronic trading systems, and in particular, systems for handling limit and
market orders." Spec. ,r 1.
Claim 1, reproduced below, is representative of the subject matter on
appeal.
1. A system for establishing a pnce, the
system comprising:
one or more specialized computers, in
communication with one or more external
exchanges, comprising computer-readable
instructions stored on a non-transitory computer-
readable storage medium and executed by at least
one processor, said computer-readable instructions,
when executed, causing the one or more computers
to:
receive a plurality of orders at an exchange,
each order specifying at least a financial
instrument, a quantity, a side, and a limit price;
determine a plurality of cumulative
quantities available for the side at a plurality of
prices, the cumulative quantity determined based
on the quantity, and the limit price of one or more
of the received plurality of orders;
determine a display price for the side from
the plurality of prices, such that the cumulative
quantity available at the display price is greater
than or equal to a display quantity threshold; and
transmit to market participants the display
price for the side,
the system further comprising a Request for
Quotation (RFQ) module that is specifically
designed to perform certain functions, the RFQ
module comprising computer-readable instructions
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stored on a non-transitory computer-readable
storage medium and executed by at least one
processor, said computer-readable instructions,
when executed, causing the RFQ module to:
monitor one or more away best bid-offer
(BBQ) prices at the one or more external
exchanges;
determine that an away BBQ price among
the one or more away BBQ prices is a better price
than the display price for an initiating order for at
least one external exchange of the one or more
external exchanges, wherein the better price
comprises a higher price if the initiating order has
a sell side and a lower price if the initiating order
has a buy side;
activate a specifically designed BBQ router
module when the RFQ Module determines the
better price, the BBQ router module comprising
computer-readable instructions stored on a non-
transitory computer-readable storage medium and
executed by at least one processor, said computer-
readable instructions, when executed, causing the
BBQ router module to perform the specific
function of dispatching full or partial orders
received at the exchange to the one or more
external exchanges.
THE REJECTIQNS 2
The Examiner relies upon the following as evidence of
unpatentability:
Cormack
Dowling
US 2007 /0078753 Al
US 2014/0136395 Al
Apr. 5, 2007
May 15, 2014
2 The rejection of claims 1, 2, 4--9, and 11 under 35 U.S.C. § 112(a) or
35 U.S.C. § 112 (pre-AIA), first paragraph, has been withdrawn. (Ans. 4).
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The following rejections are before us for review.
Claims 1, 2, 4--9, and 11 are rejected under 35 U.S.C. § 101 as being
directed to a judicial exception without significantly more.
Claims 1, 2, 4--9, and 11 are rejected under 35 U.S.C. § 112(b) as
being indefinite.
Claims 1, 2, 4--9, and 11 are rejected under 35 U.S.C. § 103 as being
obvious over Dowling, in view of Cormack.
FINDINGS OF FACT
We adopt the Examiner's findings as set forth on pages 7-10 in the
Non-Final Office Action and on pages 4--11 in the Examiner's Answer,
concerning only the 35 U.S.C. § 101 rejection.
ANALYSIS
35 U.S.C. § 101 REJECTION
We will affirm the rejection of claims 1, 2, 4--9, and 11 under
35 U.S.C. § 101.
The Appellants argue claims 1, 2, 4--9, and 11 as a group, and we
select claim 1 as the representative claim for this group (App. Br. 3--4), and
so the remaining claims stand or fall with claim 1. See 3 7 C.F .R.
§ 4I.37(c)(l)(iv) (2015).
An invention is patent-eligible if it claims a "new and useful process,
machine, manufacture, or composition of matter." 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: "[l]aws of nature, natural phenomena, and abstract
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ideas" are not patentable. E.g., Alice Corp. v. CLS Bankint'l, 573 U.S. 208,
216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court's two-step framework, described in Mayo
and Alice. Id. at 217-18 ( citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75-77 (2012)). In accordance with that framework,
we first determine what concept the claim is "directed to." See id. at 219
("On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk."); see also Bilski v. Kappas, 561 U.S. 593, 611 (2010) ("Claims 1 and 4
in petitioners' application explain the basic concept of hedging, or protecting
against risk.").
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219-20; Bilski, 561 U.S. at 611 );
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594--95 (1978)); and
mental processes (Gottschalkv. Benson, 409 U.S. 63, 67 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 191
(1981 )); "tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores" (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267---68 (1854))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that "[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
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mathematical formula." Diehr, 450 U.S. at 176; see also id. at 191 ("We
view respondents' claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula."). Having
said that, the Supreme Court also indicated that a claim "seeking patent
protection for that formula in the abstract .... is not accorded the protection
of our patent laws, ... and this principle cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment." Id. (citing Benson and Flook); see, e.g., Diehr, 450 U.S. at
187 ("It is now commonplace that an application of a law of nature or
mathematical formula to a known structure or process may well be deserving
of patent protection.").
If the claim is "directed to" an abstract idea, we tum to the second
step of the Alice and Mayo framework, where "we must examine the
elements of the claim to determine whether it contains an 'inventive
concept' sufficient to 'transform' the claimed abstract idea into a patent-
eligible application." Alice, 573 U.S. at 221 (quotation marks omitted).
"A claim that recites an abstract idea must include 'additional features' to
ensure 'that the [claim] is more than a drafting effort designed to
monopolize the [abstract idea]."' Id. (alterations in original) (quoting Mayo,
566 U.S. at 77). "[M]erely requir[ing] generic computer implementation[]
fail[s] to transform that abstract idea into a patent-eligible invention." Id.
The PTO recently published revised guidance on the application of
§ 101. 2019 Revised Patent Subject Matter Eligibility Guidance,
84 Fed. Reg. 50 (Jan. 7, 2019) ("Guidance"). Under the Guidance, we first
look to whether the claim recites:
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(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
organizing human activity such as a fundamental economic
practice, or mental processes); and
(2) additional elements that integrate the judicial exception into
a practical application (see Manual of Patent Examining
Procedure ("MPEP") § 2106.05(a}-(c), (e}-(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is not "well-understood, routine, conventional" in the field (see
MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
See Guidance.
The U.S. Court of Appeals for the Federal Circuit has explained that
"the 'directed to' inquiry applies a stage-one filter to claims, considered in
light of the [S]pecification, based on whether 'their character as a whole is
directed to excluded subject matter."' Enfzsh, LLC v. Microsoft Corp.,
822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp. v.
Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). It asks whether
the focus of the claims is on a specific improvement in relevant technology
or on a process that itself qualifies as an "abstract idea" for which computers
are invoked merely as a tool. See id. at 1335-36.
In so doing, as indicated above, we apply a "directed to" two prong
test: 1) evaluate whether the claim recites a judicial exception, and 2) if the
claim recites a judicial exception, evaluate whether the claim "appl[ies],
rel[ies] on, or use[s] the judicial exception in a manner that imposes a
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meaningful limit on the judicial exception, such that the claim is more than a
drafting effort designed to monopolize the judicial exception." Guidance,
84 Fed. Reg. at 53; see also MPEP § 2106.05(a}-(c), (e}-(h).
The Specification states:
The advent of certain types of trading has
narrowed the spread between available best bids
and best offers (defined below), which may
decrease profits available to market participants.
Additionally, the prices of markets may change
significantly relative to bid-offer spreads, which
could lead to unexpected losses for market
participants. These (and other) factors may
decrease available liquidity at the best bid and
offer prices. As a result, orders (particularly large
orders) may expect to receive prices differing from
the best bid or best offer prices. Due to the lack of
price predictability, market participants making
certain types of orders must price these orders by
manually contacting other market participants.
This manual pricing process is inherently slow and
error-prone. Additionally, orders priced outside of
an exchange may not fetch an efficient price
because some market participants are not
consulted.
Accordingly, there is a need for systems,
methods and apparatus for accurately and
efficiently pricing orders, and for executing trades
based on the determined prices.
Spec. ,r,r 2-3. The preamble of claim 1 states it is "[a] system for
establishing a price." Understood in light of the Specification, claim 1,
recites, in pertinent part:
receive a plurality of orders at an exchange, each
order specifying at least a financial instrument, a
quantity, a side, and a limit price;
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Claim 1.
determine a plurality of cumulative quantities
available for the side at a plurality of prices, the
cumulative quantity determined based on the
quantity, and the limit price of one or more of the
received plurality of orders;
determine a display price for the side from the
plurality of prices, such that the cumulative
quantity available at the display price is greater
than or equal to a display quantity threshold;
monitor one or more away best bid-offer (BBQ)
prices at the one or more external exchanges;
determine that an away BBQ price among the one
or more away BBQ prices is a better price than the
display price for an initiating order for at least one
external exchange of the one or more external
exchanges, wherein the better price comprises a
higher price if the initiating order has a sell side
and a lower price if the initiating order has a buy
side ....
Accordingly, the Examiner found that the claims are directed to "the
abstract idea of dispatching (financial trading) orders received at an
exchange." (Non-Final Act. 7). We agree with the Examiner that claim 1 is
directed to dispatching financial trading orders because claim 1, for
example, requires, in part, "determin[ing] a plurality of cumulative
quantities available for the side at a plurality of prices, the cumulative
quantity determined based on the quantity, and the limit price of one or more
of the received plurality of orders," "determin[ing] a display price for the
side from the plurality of prices, such that the cumulative quantity available
at the display price is greater than or equal to a display quantity threshold,"
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and "determin[ing] that an away BBQ price among the one or more away
BBQ prices is a better price than the display price for an initiating order."
These are the basic elements of a financial transaction and/ or commercial
interaction which is a fundamental economic principle because establishing
quantity, parties, and a best price for a transaction is the engine of
commerce. The patent-ineligible end of the spectrum includes fundamental
economic principles. Guidance, 84 Fed. Reg. at 52, citing Alice, 573 U.S. at
219-20.
Turning to the second prong of the "directed to" test, claim 1 only
generically requires "one or more specialized computers," "a non-transitory
computer readable storage medium," "a Request for Quotation (RFQ)
module," and "a BBQ router module." These components are described in
the Specification at a high level of generality. See Spec. ,r,r 50-53, 57, Figs.
= 1, 2, 5. We fail to see how the generic recitations of these most basic
computer components and/or of a system so integrates the judicial exception
as to "impose[] a meaningful limit on the judicial exception, such that the
claim is more than a drafting effort designed to monopolize the judicial
exception." Guidance, 84 Fed. Reg. at 53.
Thus, we find that the claims recite the judicial exception of a
fundamental economic practice of a commercial or legal interaction that is
not integrated into a practical application.
That the claims do not preempt all forms of the abstraction or may be
limited to financial instruments, does not make them any less abstract. See
OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362---63 (Fed. Cir.
2015) ("And that the claims do not preempt all price optimization or may be
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limited to price optimization in the e-commerce setting do not make them
any less abstract.").
Turning to the second step of the Alice analysis, because we find that
the claims are directed to abstract ideas/judicial exceptions, the claims must
include an "inventive concept" in order to be patent-eligible, i.e., there must
be an element or combination of elements sufficient to ensure that the claim
in practice amounts to significantly more than the abstract idea itself. See
Alice, 573 U.S. at 217-18 (quoting Mayo Collaborative Servs., 566 U.S.
at 72-73).
Concerning this step the Examiner found the following:
The claim does 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. The claim recites the additional
limitations of specialized computers, external
exchanges, computer-readable instructions,
nontransitory computer-readable storage mediums
processors, a Request for Quotation module, BBQ
router module. The added system components, e.g.
'memory,' 'processor,' computers, modules] are
recited at a high level of generality and are recited
as performing generic computer functions
routinely used in computer applications.
(Non-Final Act. 8-9). We agree with the Examiner. "[T]he relevant
question is whether the claims here do more than simply instruct the
practitioner to implement the abstract idea ... on a generic computer."
Alice, 573 U.S. at 225. They do not.
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Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to retrieve, determine, transmit and apply decision criteria to data
to generate a result, amounts to electronic data query and transmit of same
which are some of the most basic functions of a computer. All of these
computer functions are well-understood, routine, conventional activities
previously known to the industry. See Elec. Power Grp., LLC v. Alstom
S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016); see also In re Katz Interactive
Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir. 2011)
("Absent a possible narrower construction of the terms 'processing,'
'receiving,' and 'storing,' ... those functions can be achieved by any
general purpose computer without special programming"). In short, each
step does no more than require a generic computer to perform generic
computer functions.
Considered as an ordered combination, the computer components of
Appellants' claims add nothing that is not already present when the steps are
considered separately. The sequence of data reception-analysis (retrieve,
determine, transmit, apply decision criteria to data to generate a result) and
storing is equally generic and conventional or otherwise held to be abstract.
See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014)
(sequence of receiving, selecting, offering for exchange, display, allowing
access, and receiving payment recited an abstraction), Inventor Holdings,
LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017)
(holding that sequence of data retrieval, analysis, modification, generation,
display, and transmission was abstract), Two-Way Media Ltd. v. Comcast
Cable Commc 'ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017) (holding
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sequence of processing, routing, controlling, and monitoring was abstract).
The ordering of the steps is, therefore, ordinary and conventional.
Thus, the claims at issue amount to nothing significantly more than
instructions to apply the abstract ideas of a fundamental economic practice
of a commercial or legal interaction using some unspecified, generic
computer. Under our precedents, that is not enough to transform an abstract
idea into a patent-eligible invention. See Alice, 573 U.S. at 225-26.
We have reviewed all the arguments Appellants have submitted
concerning the patent eligibility of the claims before us that stand rejected
under 35 U.S.C. § 101. (App. Br. 3-17). We find that our analysis above
substantially covers the substance of all the arguments, which have been
made. But, for purposes of completeness, we will address various
arguments in order to make individual rebuttals of same.
Appellants argue:
The BBQ router module, in tum, is specially
configured to dispatch full or partial orders to the
external exchange( s) having better price( s) as
determined by the RFQ module, functions that did
not exist prior to Appellants' invention.
Thus, together, the RFQ module and BBQ
router module work in tandem to monitor external
exchange systems so as to leverage resources of
the external exchange systems by routing received
orders to the external exchanges under certain
circumstances. Again, all of these functions are
indeed specialized because they simply do not
exist outside of the Appellants' invention. Indeed,
no other computer system in this space has any
component or feature that performs this collection
of specialized functions. As a result, the claimed
computer system and its components cannot be
deemed generic. To the contrary, the claimed
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computer system and its components are indeed
specialized, transforming whatever abstract idea
may exist in the claims into a patent-eligible
application thereof.
(App. Br. 6-7. (emphasis omitted)).
We disagree with Appellants. Although a "router module" to dispatch
full or partial orders to the external exchange( s) is in some sense
technological, its use in operating system functionality can be said to be so
notoriously settled that merely invoking it is no more than abstract
conceptual advice to use well-known technology for its intended purpose.
See In re TL! Commc 'ns LLC Patent Litig., 823 F.3d 607, 612-13 (Fed. Cir.
2016). (Using a generic telephone for its intended purpose was a well-
established "basic concept" sufficient to fall under Alice step 1.) Appellants
offer insufficient evidence as to why reference to a "best bid-offer (BBO)
router module" or a "Request for Quotation (RFQ) module" is meaningful
beyond the face of the language itself other than being the way that data are
carried within the network. There is no further discussion in the
Specification of the particular technology for performing this claimed step.
See Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1263
(Fed. Cir. 2016); see also Enfzsh, 822 F.3d at 1336 (focusing on whether the
claim is "an improvement to computer functionality itself, not on economic
or other tasks for which a computer is used in its ordinary capacity.").
"[ 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 (internal citations and quotation marks omitted).
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Absent evidence to the contrary, we view the "Quotation (RFQ)
module" and the "BBQ router module" to be only an indication of the
environment in which the abstract idea is practiced.
MPEP 2106.05(h) concern[s] generally linking use
of a judicial exception to a particular technological
environment or field of use, including a discussion
of the exemplars provided herein, which are based
on Bilski, 561 U.S. at 612, and Flook, 437 U.S. at
588-90. Thus, the mere application of an abstract
method of organizing human activity in a
particular field is not sufficient to integrate the
judicial exception into a practical application.
Guidance, 84 Fed. Reg. at 54 n.32, see also Alice Corp., 573 U.S. at 223.
We further fail to see the similarities asserted by Appellants (App.
Br. 7-8) between the claims on appeal here and those adjudicated in DDR
Holdings. In DDR Holdings, the court evaluated the eligibility of claims
"address[ing] the problem of retaining website visitors that, if adhering to
the routine, conventional functioning of Internet hyperlink protocol,
would be instantly transported away from a host's website after
'clicking' on an advertisement and activating a hyperlink." DDR Holdings,
773 F.3d. at 1257. There, the court found that the claims were patent
eligible because they transformed the manner in which a hyperlink
typically functions to resolve a problem that had no "pre-Internet
analog." Id. at 1258. In contrast, the problem to be resolved in the case on
appeal here is responding to "a need for systems, methods and apparatus for
accurately and efficiently pricing orders, and for executing trades based on
the determined prices." Spec. ,r 3. This is a problem related to an
interaction between parties to a commercial transaction, and not to an
innovation in technology, such as, an improvement in hyperlink functions.
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Nor do we agree that the Diehr applies here as proposed by
Appellants. (App. Br. 8). In Diehr, the Court characterized the claims as
transforming an article, raw uncured synthetic rubber into a different state or
thing. Diehr, 450 U.S. at 184. We fail to see how "dispatching (financial
trading) orders received at an exchange" transforms any article into a
different state or thing.
Appellants next argue,
In this regard, the claims recite the integral use of a
particular machine to achieve performance of the
inventive functions and improvement to the
functioning of the computer itself. For example,
the claims recite specialized computer components
and routines that do not exist in conventional
computing devices. These specialized components
perform specialized (nonconventional) functions
that are uncommon or atypical of conventional
'general purpose computers' ( e.g., the claimed
computer components ( e.g., RFQ module and
BBQ router module) monitor away exchanges and
automatically dispatch orders to away exchanges,
which amounts to trading on multiple exchanges,
as summarized above).
(App. Br. 11 (emphasis omitted)).
We disagree with Appellants. As found supra, claim 1 only includes
the following generically recited device limitations: "one or more
specialized computers," a "non-transitory computer readable storage
medium," a "Request for Quotation (RFQ) module," and a "BBQ router
module." What remains in the claim after disregarding these device
limitations, are abstractions, i.e.,
determine that an away BBQ price among the one
or more away BBQ prices is a better price than the
display price for an initiating order for at least one
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external exchange of the one or more external
exchanges, wherein the better price comprises a
higher price if the initiating order has a sell side
and a lower price if the initiating order has a buy
side.
Claim 1. "A claim for a new abstract idea is still an abstract idea."
Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir.
2016) (citing Mayo, 566 U.S. at 90). To the extent Appellants are arguing
that these additional elements constitute an inventive concept, such features
cannot constitute the "inventive concept." Berkheimer v. HP Inc., 890 F.3d
1369, 1374 (Fed. Cir. 2018) (Moore, J., concurring) ("It is clear from Mayo
that the 'inventive concept' cannot be the abstract idea itself, and
Berkheimer ... leave[ s] untouched the numerous cases from this court
which have held claims ineligible because the only alleged 'inventive
concept' is the abstract idea."); see also BSG Tech LLC v. BuySeasons, Inc.,
899 F .3d 1281, 1290 (Fed. Cir. 2018) ("It has been clear since Alice that a
claimed invention's use of the ineligible concept to which it is directed
cannot supply the inventive concept that renders the invention 'significantly
more' than that ineligible concept.").
Here, for example, the claims require "the BBQ router module to
perform the specific function of dispatching full or partial orders received at
the exchange to the one or more external exchanges," which we find is the
use of well-known technology for its intended purpose. See In re TL!
Commc 'ns LLC Patent Litig., 823 F.3d at 612-13. (Using a generic
telephone for its intended purpose was a well-established "basic concept"
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sufficient to fall under Alice step 1.)3
Appellants further argue,
if the Examiner is conceding that the claimed
system is novel, then the claims are necessarily
patentable. Indeed, a 'system' is a statutory class,
and if its functions are novel, then the system is
patentable over all prior art. This obvious
contradiction by the Examiner (i.e., confirming
that the system is novel, yet labeling it as an
abstract idea) evidences that the Examiner is
merely interested in maintaining his prior position,
as opposed to examining the claims for what they
are - a novel, patent-eligible system.
(App. Br. 10 (emphasis omitted)).
We disagree with Appellants. Although the second step in the
Mayo/Alice framework is termed a search for an "inventive concept," the
analysis is not an evaluation of novelty or non-obviousness, but, rather, a
search for "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, 573 U.S. at 217-18 (alteration
in original). "The 'novelty' of any element or steps in a process, or even of
the process itself, is of no relevance in determining whether the subject
matter of a claim falls within the § 101 categories of possibly patentable
subject matter." Diehr, 450 U.S. at 188-89. "Groundbreaking, innovative,
or even brilliant discovery does not by itself satisfy the§ 101 inquiry."
3 Our distinction here applies equally to Appellants' assertion of similarity in
BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341
(Fed. Cir. 2016), Amdocs (Isr.) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288
(Fed. Cir. 2016), andMcRO, Inc. v. Bandai Namco Games Am. Inc., 837
F.3d 1299 (Fed. Cir. 2016). (App. Br. 14--16).
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Ass 'nfor Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591
(2013). A novel and non-obvious claim directed to a purely abstract idea is,
nonetheless, patent-ineligible. See Mayo, 566 U.S. at 90; see also Diehr,
450 U.S. at 188-89 ("The 'novelty' of any element or steps in a process, or
even of the process itself, is of no relevance in determining whether the
subject matter of a claim falls within the § 101 categories of possibly
patentable subject matter.").
Appellants next argue:
Indeed, the Examiner's oversimplification of
the claims completely ignores the very specific and
detailed limitations that go well beyond merely
'dispatching' or 'financial trading' of orders
'received at an exchange.' As a result, the
Examiner has failed to consider the words that
actually define the inventive concept within the
claims. Thus, the § 101 rejection is improper and
should be reversed.
(App. Br. 17).
We disagree with Appellants. First, our decision above makes a line
by line study of claim 1 to arrive at our agreement with the Examiner's
finding that the claims "are directed to the abstract idea of dispatching
(financial trading) orders received at an exchange." (Non-Final Act. 7). In
fact, claim 1 recites the term "dispatching" which is used by the Examiner in
this finding. Second, although Appellants and the Examiner describe, at
different levels of abstraction, what the claims are directed, it is recognized
that "[a]n abstract idea can generally be described at different levels of
abstraction." Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir.
2016). That need not and, in this case does not, "impact the patentability
analysis." See id. at 1241.
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To the extent Appellants argue that the Examiner erred in adequately
supporting this determination by not providing evidence, we are
unpersuaded. In this regard, there is no requirement that Examiners must
provide evidentiary support in every case before a conclusion can be made
that a claim is directed to an abstract idea. See, e.g., Manual of Patent
Examining Procedure§ 2106.07(a)(III) (2018) ("The courts consider the
determination of whether a claim is eligible ( which involves identifying
whether an exception such as an abstract idea is being claimed) to be a
question of law. Thus, the court does not require 'evidence' that a claimed
concept is a judicial exception, and generally decides the legal conclusion of
eligibility without resolving any factual issues." (citations omitted.))
All that is required of the US PTO to meet its prima facie burden of
production is that the Examiner set forth the statutory basis of the rejection
and the reference or references relied upon in a sufficiently articulate and
informative manner as to meet the notice requirement of 35 U.S.C. § 132.
As the statute itself instructs, the Examiner must "notify the applicant,"
"stating the reasons for such rejection," "together with such information and
references as may be useful in judging of the propriety of continuing the
prosecution of his application." 35 U.S.C. § 132; see also In re Jung,
637 F.3d 1356, 1363 (Fed. Cir. 2011) (declining "to impose a heightened
burden on examiners beyond the notice requirement of§ 132"). Here, as we
found above, the Examiner has made these findings as required by the
statute. See Non-Final Act. 2-4.
For the reasons identified above, we determine there are no
deficiencies in the Examiner's prima facie case of patent ineligibility of the
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rejected claims. Therefore, we will sustain the Examiner's§ 101 rejection
of claims 1, 2, 4--9, and 11.
35 U.S.C. § 103(a) REJECTION
Independent claim 1 requires "determine a display price for the side
from the plurality of prices, such that the cumulative quantity available at the
display price is greater than or equal to a display quantity threshold."
Claim 1.
The Examiner found, concerning these limitations that Dowling
discloses, the following:
(0053-58, it appears that the system looks to match
quantities of orders that can be matched using a
combined limit order book, 0068) determine a
display price for the side from the plurality of
prices, such that the cumulative quantity available
at the display price is greater than or equal to a
display quantity threshold; and transmit to market
participants the display price for the side (0045
market display).
(Non-Final Act. 12).
Appellants argue,
Dowling at para. [0045] is cited as allegedly
disclosing 'determine a display price . . . such that
the cumulative quantity available at the display
price is greater than or equal to a display quantity
threshold.' See Latest Action, p. 12. However,
this paragraph at best simply describes the order
flow 300 of a Client Order to Retail ATS prior to
information being sent to an A TS interface, as
illustrated in Fig. 3.
(App. Br. 18).
We agree with Appellants. Dowling at paragraph 45 merely discloses
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aggregating orders, e.g., "buy, 30 bonds of ABC Corp 7% 1/1/20 at a price
of 100, which means 1.000 times 30 times the $1000 face value per bond, or
$30,000.00." The Examiner does not explain and it is not apparent how the
mere aggregation of bonds with the same yields and a fixed price constitutes
"a display price ... such that the cumulative quantity available at the display
price is greater than or equal to a display quantity threshold." There is no
disclosure in Dowling of a threshold which is required by the claim to be
met by the cumulative quantity. In Dowling, the 30 bonds are simply the
aggregated number of bonds which meet the order specification without
limitation on quantity threshold.
Therefore, we will not sustain the Examiner's obviousness rejection of
independent claim 1.
Because claims 2, 4--9, and 11 depend from claim 1, and because we
cannot sustain the Examiner's obviousness rejection of claim 1, the
Examiner's obviousness rejection of claims 2, 4--9, and 11 likewise cannot
be sustained.
35 U.S.C. § 112(b) REJECTION
The Examiner rejected claims 1, 2, 4-9, and 11 as indefinite because
"Applicant claims 'said' computer readable instructions, when executed.
Due to the establishment of multiple computer readable instructions, it is
indefinite as to which computer readable instructions are referred to by the
limitations 'said computer readable instructions."' (Non-Final Act. 6-7).
Appellants argue, "[t]he Appellants respectfully disagree. Appellants
submit that it is significantly clear from the claims which instructions the
'said' computer readable instructions infer." (Appeal Br. 18).
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We agree with Appellants. Claim 1 is drafted into distinct paragraphs
respectively directed to each of the RFQ and BBQ modules. We find it
reasonable to understand that the instructions appearing in the paragraph
where the respective module is recited, are those instructions appurtenant to
the device recited in that paragraph.
CONCLUSIONS OF LAW
We conclude the Examiner did not err in rejecting claims 1, 2, 4--9,
and 11 under 35 U.S.C. § 101.
We conclude the Examiner erred in rejecting claims 1, 2, 4--9, and 11
under 35 U.S.C. § 103.
We conclude the Examiner erred in rejecting claims 1, 2, 4--9, and 11
under 35 U.S.C. § 112(b).
DECISION
Because we have affirmed at least one ground of rejection with
respect to each claim on appeal, the Examiner's decision is affirmed.
See 37 C.F.R. § 4I.50(a)(l).
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).
AFFIRMED
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