Ex Parte Freeny

Board of Patent Appeals and Interferences

May 25, 2006

10455701 (B.P.A.I. May. 25, 2006)

The opinion in support of the decision being entered today
was not written for publication in and
is not binding precedent of the Board.

UNITED STATES PATENT AND TRADEMARK OFFICE
_____________

BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
_____________

Ex parte CHARLES C. FREENY JR.
_____________

Appeal No. 2006-1126
Application No. 10/455,701
______________

ON BRIEF
_______________

Before: OWENS, CRAWFORD, and NAPPI, Administrative Patent Judges.

NAPPI, Administrative Patent Judge.

DECISION ON APPEAL

This is a decision on appeal under 35 U.S.C. § 134 of the final rejection of
claims 7 through 13, 15, 16, 18, 20, 22, 23 and 25. For the reasons stated infra,
we affirm the examiner’s rejection of these claims.

Appeal No. 2006-1126
Application No. 10/455,701

Invention

The invention relates to a system for automatically trading investment
items based upon predetermined conditions. The investments can include
stocks, options, or other investment items. See page 2 of appellant’s
specification. A user can then enter a stop loss order (an order to sell if the
investment item’s price falls below a set value), either as a price of the
investment item or as a percentage of the item’s value. The system monitors the
values of investment items and will automatically execute the stop order. See
page 15 of appellant’s specification.
Claim 7 is representative of the invention and reproduced below:
7. A trading system, comprising:
a computer receiving a stop value for an investment item, the
computer automatically setting an initial execution price based upon the
stop value and monitoring the price of the investment item, the computer
automatically changing the execution price in a first direction as the price
of the investment item changes in the first direction and fixing the
execution price as the price of the investment item changes in a second
direction opposite from the first direction, the computer automatically
outputting a trade request signal thereby automatically causing the stock
to be traded in response to the price of the investment item changing in
the second direction to reach the execution price.

Reference

The reference relied upon by the examiner is:
Lupien et al. (Lupien) EPA 0401203A2 Dec. 5, 1990
Bondy, “Stop-Order Path A Good Way Out Of Stock Market” Arizona Republic,
page C1, August 21, 1993.

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Application No. 10/455,701

Rejection at Issue

Claims 7, 8, 11, 12, 13, 15, 16, 18, 20, 22, 23 and 25 stand rejected under
35 U.S.C. § 103 as being unpatentable over Bondy in view of Lupien. Claims 9
and 10 stand rejected under 35 U.S.C. § 103 as being unpatentable over Bondy
in view of Lupien and official notice. Throughout the opinion, we make reference
to the briefs and the answer for the respective details thereof.
Opinion

We have carefully considered the subject matter on appeal, the rejections
advanced by the examiner and the evidence of obviousness relied upon by the
examiner as support for the rejections. We have, likewise, reviewed and taken
into consideration, in reaching our decision, appellant’s arguments set forth in the
briefs along with the examiner’s rationale in support of the rejections and
arguments in rebuttal set forth in the examiner’s answer.
With full consideration being given to the subject matter on appeal, the
examiner’s rejection and the arguments of appellant and the examiner, and for
the reasons stated infra, we sustain the examiner’s rejection of claims 7 through
13, 15, 16, 18, 20, 22, 23 and 25 under 35 U.S.C. § 103.
Claims 7, 8 11 and 12.
On pages 8 through 14 of the brief, appellant groups claim 7, 8, 11 and
12, and presents arguments why the rejection of this group of claims is improper.
Appellant argues, on page 9 of the brief, that while Bondy teaches a stop loss
order as a computerized order to sell a particular stock after its trigger price has
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Application No. 10/455,701

been reached, Bondy does not teach that the computer automatically sets an
initial execution price based upon the stop vale. Appellant asserts that in Bondy
the broker enters the execution price into the computer after consulting the
investor. On page 10 of the brief, appellant acknowledges that Lupien teaches
an analysis of securities data with algorithms or criteria to automatically
generated orders. However, on page 11 of the brief, appellant argues that
Lupien “does not teach the automated submission of the generated orders to the
exchange.” Appellant points to several passages of Lupien to show that a
person must execute the order, such as the “F5(submit order)” function shown in
figure 6. Thus, appellant concludes that the combination of Bondy and Lupien
does not teach the invention of claim 7.
In response, the examiner asserts on page 8 of the answer, that Bondy
discloses setting an initial execution price based on the stop value, monitoring
the price of the investment item, changing the execution price if the investment
item increases in value and fixing the execution price if the investment decreases
in value. However, the examiner acknowledges that Bondy does not teach that a
computer automatically monitors the stocks and adjusts the execution price;
rather the investor monitors the stock price and makes the changes the trigger
price. The examiner asserts that it would be obvious to use a computerized
investment system such as taught by Lupien to perform Bondy’s method of
adjusting the stop order for a stock. In response to appellant’s argument, that
Lupien does not teach automatic submission of orders, the examiner argues that
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Application No. 10/455,701

the appellant is focusing on select features and embodiments of Lupien. The
examiner asserts there are other features and embodiments of Lupien which are
clearly directed to issuing buy and sell orders automatically. On pages 9 through
11 of the answer, the examiner addresses the features argued by appellant as
teaching non-automatic trading and argues other features of Lupien, which the
examiner considers to disclose automatic trading of securities.
We concur with the examiner’s assessment of the reference. Initially, we
note that appellant has not argued that Bondy’s algorithm of adjusting stop
orders differs from appellant’s or that Bondy and Lupien are not properly
combined. Appellant’s arguments center around whether Lupien discloses
automatic submission of a generated order to an exchange. We find that Lupien
does disclose such a feature.
Lupien teaches a system to manage one or more investor portfolios, the
system uses data processing equipment to place buy and sell orders on
securities markets and with automated brokers to execute trades between users
of the system and external markets. See abstract. The system monitors security
trade information and enters buy and sell orders through its own network or
through other networks. See column 3, lines 48 through 55. The system uses
information concerning limits and algorithms set by the client to analyze the
security trade information and based upon the analysis issues buy or sell orders.
See column 4, lines 7 through 18, and column 8, lines 17 through 25. The
system executes trades based upon an analysis of transactions and controls
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imposed by the system users. The system also permits investment managers to
directly execute trades or manually make changes to orders. See column 6,
lines 2 through 15, column 12, lines 42 through 49, and column 14, lines 11
through 39. Thus, we find that Lupien discloses a security trading system, which
allows for both automatic and manual submission of orders.
We are not persuaded by appellant’s arguments that Lupien does not
teach an automatic submission of a generated order to an exchange. The
passages of Lupien and the depiction of a display screen (figure 6) with a caption
“F5(submit order)” do not definitively show that the system does not automatically
execute trades. Rather, as stated supra, we find that Lupien discloses that the
system operates to automatically execute trades and includes the ability for a
manual operation. Thus, appellant’s arguments have not convinced us of an
error in the examiner’s rejection of claims 7, 8, 11 and 12 and we accordingly
sustain the examiner’s rejection of claims 7, 8, 11 and 12.
Claims 9-10
Appellant argues, on page 14 of the brief, that the rejection of claims 9
and 10 is improper for the reasons asserted with respect to claim 7. Also,
appellant argues: “Appellant’s attorney agrees that people maintain investments
in different accounts with different brokers. However, it would not have been
obvious to output trade request signals to the different brokers from a computer.”
On pages 5 and 6 of the answer, the examiner states:
Lupien teaches that the computer outputs trade request signals to more
than one individual selected market trader (column 4, lines 23-31), and an
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Application No. 10/455,701

investment portfolio is stored on the computer (column 3, line 32, through
column 4, line 7). Lupien does not expressly disclose that the investment
item portfolio includes a first investment item maintained in an account
with one market trader, and a second investment item maintained in an
account with another market trader. However, official notice is taken that
it [is] well known for investment item portfolios to include investment items
traded on different exchanges and maintained in different accounts
(Lupien, column 8, lines 41- 51, and column 14, lines 21-34, is suggestive
of this). E.g., a portfolio may include both shares of stock, traded on a
stock exchange and maintained in an account with a stockbroker, and
pork belly futures, traded on a commodities exchange, and maintained in
an account with a commodity broker.

Further, the examiner responds to appellant’s arguments on page 12 of the
answer stating: “[A]lthough Lupien does not quite expressly disclose the
limitations of claim 9 (concerning which unchallenged official notice was taken),
Lupien’s words in column 13, lines 8-15 are highly suggestive.”
We concur with the examiner. Claim 9 recites:
9. The trading system of claim 7, wherein an investment portfolio is stored
on the computer, the investment item portfolio including a first investment
item maintained in an account with one market trader, and a second
investment item maintained in an account with another market trader and
wherein the computer outputs trade request signals to more than one
market trader.

Thus, the scope of claim 9 includes the requirement that the portfolio includes
investments maintained in accounts with different market traders. The
examiner’s statement of the rejection and response to the arguments cite to
numerous sections of Lupien which discloses the system issuing trade orders
through external brokers, dealers, or exchanges. We consider the examiner to
have presented ample evidence to establish a prima facie case of obviousness.
Appellant’s arguments directed to claim 9 have not presented sufficient facts to
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persuade of us that the examiner’s rejection is in error. Accordingly, we sustain
the examiner’s rejection of claims 9 and 10.
Claims 13, 15, 16 and 18.
On pages 14 and 15 of the brief, appellant recites a limitation of claim 13
and argues that claim 13 is patentable for the reasons set forth with respect to
claims 7 through 12.
We are not persuaded by appellant’s argument directed to claim 13. We
note that 37 CFR § 41.37 (c)(1)(vii) states: “A statement which merely points out
what a claim recites will not be considered an argument for separate patentability
of the claim.” Thus, we do not consider appellant’s arguments directed to claim
13 on pages 14 and 15 of the brief to be sufficient to group claim 13 separately
from claim 7. Nonetheless, as stated supra, we are not persuaded by appellant’s
arguments directed to claim 7 and we sustain the examiner’s rejection of claim
13 for the reasons stated supra with respect to claim 7.
On page 15 of the brief, appellant argues that the combination of Bondy
and Lupien does not teach the stop value being a predetermined amount or
percentage of the investment item’s value as recited in claims 15, 16 and 18.
We are not persuaded by appellant’s argument. As noted supra with
respect to claim 7, Lupien discloses that the system operates to automatically
execute trades based upon user-defined algorithms. Bondy teaches an
algorithm for making trades using stop orders, Bondy also states: “You can set
the stop-order trigger at any price you choose – for example, 10 to 20 percent
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below the current market price.” Thus, we find that the combination of Bondy
and Lupien teaches the stop value being a predetermined amount or percentage
of value in the investment. Accordingly, we sustain the examiner’s rejection of
claims 15, 16 and 18.
Claims 20, 22, 23 and 25.
On page 16 of the brief, appellant argues that the rejection of claim 20 is
improper, as Lupien does not teach an algorithm for automatically outputting a
trade request. As stated supra with respect to claim 7, we find that Lupien does
teach automatically outputting a trade request. Accordingly, we sustain the
examiner’s rejection of claim 20.
With respect to claims 22, 23 and 25, the appellant argues, on page 16 of
the brief, that the combination of Lupien and Bondy does not teach a system
which receives a stop value and sets an execution price for the moving stop
based upon the stop value or that the received stop value is a predetermined
percentage of the value of the investment as recited in claim 23 or 25.
As discussed supra with respect to claims 16 and 18, we find that the
combination of Bondy and Lupien teaches the stop value being a predetermined
amount or percentage of value in the investment. Accordingly, we sustain the
examiner’s rejection of claims 22, 23 and 25.

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Application No. 10/455,701

In summary, we sustain the examiner’s rejection of claims 7 through 13,
15, 16, 18, 20, 22, 23 and 25. The decision of the examiner is affirmed.
No time period for taking any subsequent action in connection with this
appeal may be extended under 37 CFR § 1.136(a)(1)(iv).
AFFIRMED

TERRY J. OWENS )
Administrative Patent Judge )
)
)
) BOARD OF PATENT
MURRIEL E. CRAWFORD ) APPEALS AND
Administrative Patent Judge ) INTERFERENCES
)
)
)
ROBERT E. NAPPI )
Administrative Patent Judge )

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Dunlap, Codding & Rogers P.C.
P.O. Box 16370
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