Ex Parte Hadi et al

Patent Trial and Appeal Board

Nov 21, 2013

11954656 (P.T.A.B. Nov. 21, 2013)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
11/954,656 12/12/2007 Muhammed Hadi 04672-00650 4291
49664 7590 11/21/2013
BGL/CME Group
P.O. BOX 10395
CHICAGO, IL 60610
EXAMINER
MAGUIRE, LINDSAY M
ART UNIT PAPER NUMBER
3693
MAIL DATE DELIVERY MODE
11/21/2013 PAPER
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.
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte MUHAMMED HADI,
DALE MICHAELS, AMY STEPHEN,
SUNEEL IYER, and KETAN PATEL

____________

Appeal 2011-012210
Application 11/954,656
Technology Center 3600
____________

Before BIBHU R. MOHANTY, NINA L. MEDLOCK, and
PHILIP J. HOFFMANN, Administrative Patent Judges.

MOHANTY, Administrative Patent Judge.

DECISION ON APPEAL
Appeal 2011-012210
Application 11/954,656

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STATEMENT OF THE CASE
The Appellants seek our review under 35 U.S.C. § 134 (2002) of the
final rejection of claims 1-19, which are all the claims pending in the
application. We have jurisdiction under 35 U.S.C. § 6(b) (2002).

SUMMARY OF THE DECISION
We REVERSE.

THE INVENTION
The Appellants’ claimed invention is directed to a system and method
for conversion and liquidation of defaulted open positions for illiquid
markets (Spec. 2). Claim 1, with the numbering in brackets added, is
representative of the subject matter on appeal.

1. A method of liquidating defaulted positions associated
with centrally cleared illiquid financial product, the method
comprising:
[1] identifying, by a program logic executable by a
processor, a defaulted position associated with a centrally
cleared financial product offered by a clearing counterparty;
[2] calculating, by the processor, a value differential
between the defaulted position and a standard position;
[3] offering, by the processor, the value differential and
the standard position to a party, wherein the value differential
and the standard position represent a converted position; and
[4] settling, by the processor, the converted position upon
acceptance of the offer by the party.

Appeal 2011-012210
Application 11/954,656

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THE REJECTION
The Examiner relies upon the following as evidence in support of the
rejection:
Hirani US 2006/0036534 A1 Feb. 16, 2006

The following rejection is before us for review:
1. Claims 1-19 are rejected under 35 U.S.C. § 102(b) as
anticipated by Hirani.

FINDINGS OF FACT
We find that the findings of fact used in the Analysis section below
are supported at least by a preponderance of the evidence.1

ANALYSIS
The Appellants argue that the rejection of claim 1 is improper because
the prior art fails to disclose elements of claim limitations [1] and [2] (Br. 6-
7, Reply Br. 2-5).
In contrast, the Examiner has determined that the rejection is proper
and that claim limitation [1] is found in paragraphs [0034], [0047], [0057],
and [0060] – [0062] of Hirani, and claim limitation [2] is found in
paragraphs [0035], [0048], and [0065] of Hirani (Ans. 4-5, 10).
We agree with the Appellants. Claim limitation [1] requires that a
defaulted position offered by a clearing counterparty be identified, and claim
limitation [2] requires calculating a value differential between the defaulted

1 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
(explaining the general evidentiary standard for proceedings before the
Patent Office).
Appeal 2011-012210
Application 11/954,656

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position and a standard position. Thus, claim limitations [1] and [2] require,
in part, identifying a defaulted position and making a calculation based upon
the identified defaulted position and a standard position. Here, the above
citations to Hirani at paragraphs [0034], [0035], [0047], [0048], [0057],
[0060] – [0062], and [0065] fail to specifically disclose a “defaulted
position” as required by at least claim limitations [1] and [2], and thus the
rejection is not sustained.
While Hirani at paragraph [0057] does describe a “default” amount,
Hirani discusses this “default” amount in the context of a “volume upsizing
process,” which is not the same as a “defaulted position,” as recited by
claim 1. The Appellants’ Specification at paragraph [0018] describes that a
“defaulted position” arises where a party to a swap position or contract has
defaulted or has failed to perform on its portion of the swap contract. In
contrast, Hirani discloses that its “volume upsizing process” gives a trader
the option to “upsize” (i.e., increase) the amount of credit derivatives traded,
once a trader engages in trading a default or standard amount (paras. [0056]
– [0057]; see Fig. 8). Hirani describes that this “volume upsizing process”
allows a trader to trade an amount greater than the standard or default
amount “without making the market aware of his intention, thereby
maintaining the value of his credit derivative” (para. [0057]). Thus, the
“default” amount disclosed in Hirani is related to the volume of a trade, with
the standard or default amount being the initial amount traded.
However, even if we were to agree with the Examiner that the
“default amount” disclosed in Hirani is the same as the “defaulted position”
of limitation [1], the Examiner still fails to show how Hirani would calculate
a value differential between the defaulted position and a standard position as
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Application 11/954,656

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claim limitation [2] requires, given that paragraph [0057] of Hirani refers to
a “default or standard amount,” i.e., a single value. Accordingly, we agree
with the Appellants that the “default” amount disclosed in Hirani fails to
anticipate a “defaulted position,” as presently recited by limitations [1] and
[2] of claim 1.
For these reasons, the rejection of claim 1 and its dependent claims is
not sustained. Independent claims 9 and 14 contain similar limitations and
the rejection of these claims and their dependent claims is not sustained for
the same reasons.

CONCLUSIONS OF LAW
We conclude that Appellants have shown that the Examiner erred in
rejecting the claims as listed in the Rejection section above.

DECISION
The Examiner’s rejection of claims 1-19 is reversed.

REVERSED

Klh