Ex Parte Frankel

Patent Trial and Appeal Board

May 31, 2018

13965068 (P.T.A.B. May. 31, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO.
13/965,068
132787 7590
Docket Clerk-GOLD
P.O. Drawer 800889
Dallas, TX 75380
FILING DATE FIRST NAMED INVENTOR
08/12/2013 Oliver L. Frankel
06/04/2018
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.
GOLDll-00057 5353
EXAMINER
KAZIMI, HAN! M
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
06/04/2018 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):
patents@munckwilson.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte OLIVER L. FRANKEL
Appeal 2016-007367
Application 13/965,068 1
Technology Center 3600
Before BIBHU R. MOHANTY, BRUCE T. WIEDER, and
ALYSSA A. FINAMORE, Administrative Patent Judges.
WIEDER, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134 from the
Examiner's rejection of claims 46-65. We have jurisdiction under
35 U.S.C. § 6(b).
We AFFIRM.
CLAIMED SUBJECT MATTER
Appellant's invention "relates to financial derivatives and computer
systems and computer-implemented methods for facilitating trading of
1 According to Appellant, the real party in interest is Goldman, Sachs & Co.
(Appeal Br. 2.)
Appeal 2016-007367
Application 13/965,068
financial derivatives" and "for listing and trading improved swap futures
contracts." (Spec. 1, 11. 7-10.)
Claims 46, 54, and 62 are the independent claims on appeal. Claim 62
is illustrative. It recites:
62. A system comprising:
a processor; and
a non-transitory computer readable medium having
processor-executable instructions, that when executed by the
processor, cause the system to:
list a futures contract, wherein said futures contract
including terms that require entry into a specified swap on a
specified date, wherein:
(a) said futures contract provides that (i) a long position in
said futures contract entitles a holder of the long position to
receive a fixed side of the specified swap on the specified date,
and (ii) a short position in said futures contract entitles a holder
of the short position to receive a floating side of the specified
swap on the specified date; or
(b) said futures contract provides that (i) a short position
in said futures contract entitles the holder of the short position to
receive a fixed side of the specified swap on the specified date,
and (ii) a long position in said futures contract entitles the holder
of the long position to receive a floating side of the specified
swap on the specified date; and
receive and match orders for the futures contract; and
provide current quotations and reports concerning open
orders and trading activity regarding the futures contract.
REJECTION
Claims 46-65 are rejected under 35 U.S.C. § 101 as directed to non-
statutory subject matter.
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ANALYSIS
"Whoever invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and useful improvement
thereof, may obtain a patent therefor, subject to the conditions and
requirements of this title." 35 U.S.C. § 101. Section 101, however,
"'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 Assoc.for Molecular
Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)).
Alice applies a two-step framework, earlier set out 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.
Under the two-step framework, it must first be determined if "the
claims at issue are directed to a patent-ineligible concept." Id. If the claims
are determined to be directed to a patent-ineligible concept, then the second
step of the framework is applied to determine if "the elements of the
claim ... contain[] an 'inventive concept' sufficient to 'transform' the
claimed abstract idea into a patent-eligible application." Id. at 2357 ( citing
Mayo, 566 U.S. at 72-73, 79).
With regard to step one of the Alice framework, the Examiner
determines that "[t]he claim(s) is/are directed to the abstract idea of a
fundamental economic practice of facilitating listing and trading of financial
derivatives." (Final Action 4.)
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Appellant disagrees and argues that claim 62 recites "a processor" and
"a non-transitory computer readable medium" that cause the system to
perform multiple steps. (Appeal Br. 11.) In particular, Appellant argues that
the claim "recites a specific process that involves listing a specific type of
futures contract, receiving and matching orders for the futures contract, and
providing current quotations and reports." (Id. at 12.)
We are not persuaded of error. Under step one of the Alice
framework, we "look at the 'focus of the claimed advance over the prior art'
to determine if the claim's 'character as a whole' is directed to excluded
subject matter." Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d
1253, 1257 (Fed. Cir. 2016) (quoting Elec. Power Grp., LLC v. Alstom S.A.,
830 F.3d 1350, 1353 (Fed. Cir. 2016)).
The Specification provides evidence as to what the claimed invention
is directed. In this case, the Specification discloses that the invention
"relates to financial derivatives and computer systems and computer-
implemented methods for facilitating trading of financial derivatives."
(Spec. 1, 11. 7-8.) Claim 62 recites "[a] system comprising: a processor,"
and "a non-transitory computer readable medium ... having ... instructions,
that when executed ... cause the system to: list a futures contract," "receive
and match orders," and "provide current quotations and reports." In other
words, the claimed system lists/displays data, receives and matches data, and
provides/ displays data.
Although we and the Examiner describe, at different levels of
abstraction, to 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
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need not and, in this case does not, "impact the patentability analysis." See
id. at 1241.
As in Alice, we need not labor to delimit the precise contours of the
"abstract ideas" category in this case. It is enough to recognize that there is
no meaningful distinction in the level of abstraction between the concept of
"creating a contractual relationship" in buySAFE, Inc. v. Google, Inc., 7 65
F.3d 1350, 1354--55 (Fed. Cir. 2014) or the concept of "exchanging financial
obligations between two parties using a third-party intermediary to mitigate
risk settlement" in Alice, 134 S. Ct. at 2356, and the concept of facilitating
the listing and trading of futures contracts or financial derivatives, at issue
here. These are all squarely within the realm of "abstract ideas" as the Court
has used that term. See Alice, 134 S. Ct. at 2357.
Appellant, however, argues that "[ c ]laim 62 contains elements beyond
any mere abstract idea." (Appeal Br. 11.) Specifically, Appellant argues
that the elements recited in claim 62 "are technological aspects" of the
claim, and that "these elements recite a specific process that involves listing
a specific type of futures contract." (Id. at 12.) We are not persuaded of
error.
As an initial matter, we note that none of these limitations recite
implementation details. Moreover, here, the "claims in substance [are]
directed to nothing more than the performance of an abstract business
practice ... using a conventional computer. Such claims are not patent-
eligible." DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256
(Fed. Cir. 2014).
Nor do we find persuasive of error Appellant's argument that the
claims recite "listing a specific type of futures contract." (See Appeal
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Br. 12.) Collecting and displaying "information, including when limited to
particular content (which does not change its character as information)" is
treated as being "within the realm of abstract ideas." Elec. Power, 830 F.3d
at 1353.
In view of the above, we are not persuaded that the Examiner erred in
determining that claim 62 is directed to an abstract idea, i.e., "facilitating
[the] listing and trading of financial derivatives." (See Final Action 4.)
Independent claim 46 contains similar language, and Appellant makes
similar arguments. Therefore, for similar reasons we are not persuaded that
the Examiner erred in determining that claim 46 is directed to an abstract
idea.
Independent claim 54 recites "[a] trading system comprising: a
futures exchange to list a futures contract," "a reference data source to
provide data," "and a swaps clearing house." Appellant argues that "[t]hese
are all technological aspects of Claim 54." (Appeal Br. 18.) Claim 54 does
not recite a processor. And although Appellant argues that "these [claim]
elements recite a modem technology that is necessarily dependent on
computer systems" (id. at 18-19), Appellant does not persuasively argue
why the claim language requires a computer system. Rather, under a
broadest reasonable interpretation, the claimed system could be fully
implemented without a computer.
With regard to Appellant's reference to DDR Holdings, we are not
persuaded that claim 54 is analogous to those in DDR Holdings. Unlike
Appellant's claim, the claims in DDR Holdings "specify how interactions
with the Internet are manipulated to yield a desired result - a result that
overrides the routine and conventional sequence of events ordinarily
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triggered by the click of a hyperlink." Id. at 1258 (emphasis added). In
other words, the invention claimed in DDR Holdings does more than
"simply instruct the practitioner to implement the abstract idea with routine,
conventional activity." See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709,
715 (Fed. Cir. 2014); see also DDR Holdings, 773 F.3d at 1259. Even ifwe
agreed with Appellant that claim 54 "is necessarily dependent on computer
systems" (see Appeal Br. 18-19), we would still not be persuaded of error as
the claim would be "in substance ... directed to nothing more than the
performance of an abstract business practice ... using a conventional
computer. Such claims are not patent-eligible." DDR Holdings, 773 F.3d at
1256.
In view of the above, we are not persuaded that the Examiner erred in
determining that claim 54 is directed to an abstract idea.
Step two of the Alice framework has been described "as 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 (citing Mayo, 566 U.S. at 72-73).
Here, Appellant seeks to analogize to Versata Development Group,
Inc. v. SAP America, Inc., 793 F.3d 1306 (Fed. Cir. 2015). Specifically,
Appellant argues that "[ c ]laim 62 is not rejected over any prior art, meaning
the Examiner has acknowledged that Claim 62 is not a commonplace
business method or a known business process." (Appeal Br. 14.) We do not
find this argument persuasive of error.
Even if the claimed techniques are "[g]roundbreaking, innovative, or
even brilliant," that is not enough for patent eligibility. Ass 'n for Molecular
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Pathology, 569 U.S. at 591. "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." Diamond v. Diehr, 450 U.S. 175, 188-
89 (1981).
Taking the claim elements separately, the function performed by the
computer at each step is purely conventional. Listing/displaying data,
receiving and matching data, and providing/displaying data are basic
computer functions. Additionally, the Specification discloses that the
invention can be implemented using generic computer components. (See,
e.g., Spec. 12, 11. 15-16.) In short, each step does no more than require a
generic computer to perform routine computer functions.
Considered as an ordered combination, the computer components of
Appellant's method add nothing that is not already present when the steps
are considered separately. The claims do not, for example, purport to
improve the functioning of the display device or server. Nor do they effect
an improvement in any other technology or technical field. Instead, the
claims at issue amount to nothing significantly more than an instruction to
apply the abstract idea. That is not enough to transform an abstract idea into
a patent-eligible invention. Alice, 134 S. Ct. at 2360. (See Final Action 5.)
Appellant makes similar arguments for independent claims 46 and 54.
And for similar reasons, we do not find these arguments persuasive of
reversible error.
Appellant separately argues dependent claims 47-53, 55---61, and 63-
65. (See Appeal Br. 20-26.) Appellant's arguments regarding the
dependent claims are based on two basic points. First, that the recited
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functions are not "commonplace business methods or known business
processes." (See, e.g., id. at 21.) However, as discussed above, "[t]he
'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. Therefore, we do not find the argument persuasive of
error.
Second, Appellant argues that "it cannot be said that the particular
technique recited in [the claims] has no particular concrete or tangible form
or application or is a building block or basic conceptual framework." (See,
e.g., Appeal Br. 21.) With regard to Appellant's "concrete or tangible form"
argument, we are not persuaded of error. The Federal Circuit
rejected the viability of the "useful, concrete, and tangible result"
language of State Street Bank & Trust Co. v. Signature Financial
Group, 149 F.3d 1368, 1373 (1998), as a test, because while such
an inquiry "may in many instances provide useful indications of
whether a claim is drawn to a fundamental principle or a practical
application of such a principle," it inappropriately focuses on the
result of the claimed invention rather than the invention itself.
Bilski, 545 F.3d at 959.
In re Ferguson, 558 F.3d 1359, 1364 (Fed. Cir. 2009).
With regard to Appellant's "building block" argument, we understand
this to be an argument rooted in a concern for preemption, i.e., that the
claims are patent-eligible because they do not preempt every application of
the abstract idea. We do not find this argument persuasive of error.
Preemption 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
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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
[566 U.S. at 72-73].
CLS Bankint'l v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1281 (Fed. Cir.
2013) (Lourie, J., concurring), aff'd, 134 S. Ct. 2347 (2014). Moreover,
"[ w ]here a patent's claims are deemed only to disclose patent ineligible
subject matter under the Mayo framework, as they are in this case,
preemption concerns are fully addressed and made moot." Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
In other words, "preemption may signal patent ineligible subject matter,
[but] the absence of complete preemption does not demonstrate patent
eligibility." Id.
In view of the above, we are not persuaded of reversible error.
DECISION
The Examiner's rejection of claims 46-65 under 35 U.S.C. § 101 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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