Ex Parte Himmelstein

Patent Trial and Appeal Board

May 11, 2016

11944042 (P.T.A.B. May. 11, 2016)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO.
111944,042
86318 7590
Lech Law, LLC
P.O. Box 3473
Dublin, OH 43016
FILING DATE FIRST NAMED INVENTOR
11/21/2007 Richard Himmelstein
05/12/2016
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.
69174-6 4582
EXAMINER
ABDI, KAMBIZ
ART UNIT PAPER NUMBER
3694
MAILDATE DELIVERY MODE
05/12/2016 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 RICHARD HIMMELSTEIN
Appeal2013-007474 1
Application 11/944,0422
Technology Center 3600
Before BRADLEY B. BAY AT, TARA L. HUTCHINGS, and
AMEE A. SHAH, Administrative Patent Judges.
BAY AT, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner's
rejection of claims 29--33, 35--41, 43, and 44. 3 We have jurisdiction under
35 U.S.C. § 6(b ).
STATEMENT OF THE DECISION
We AFFIRM.
1 Our decision references Appellant's Appeal Brief ("Br.," filed Nov. 5,
2012), the Examiner's Answer ("Ans.," mailed Feb. 19, 2013), and the Non-
Final Office Action ("Non-Final Act.," mailed Nov. 3, 2011).
2 Appellant identifies "BarterSecurities, Inc." as the real party in interest.
Br. 4.
3 Claims 1-28, 34, and 42 are canceled. Id. at 24--26, Claims App.
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Application 11/944,042
CLAIMED fNVENTION
Appellant's claimed invention "provide[s] an electronic bartering
system for bartering items or securities" (Spec. 4). Independent claim 29 is
illustrative of the subject matter on appeal:
29. A method for facilitating buying and selling employee
stock options on a computerized transferable stock option
trading system, the method comprising:
identifying, by the computerized system, a first trader
and a second trader, the first trader seeking to acquire option
rights for a stock, the second trader being an employee
controlling option rights for the stock;
receiving, by the computerized system, an offer from the
first trader, the offer identifying the stock for which the first
trader seeks to acquire option rights and a price associated with
the option rights;
receiving, by the computerized system, an order from the
second trader, the order identifying the stock for which the
employee controls option rights and a quantity of options to
sell;
assisting, by the computerized system, the second trader
in determining whether the offer is financially advantageous;
matching, by the computerized system, the order with the
offer;
transferring, by the computerized system, the option
rights for the stock from the second trader to the first trader; and
transferring, by the computerized system, funds in
accordance with the offer from the first trader to the second
trader.
Br. 24, Claims App.
REJECTIONS
I. Claims 29-33, 35, and 36 are rejected under 35 U.S.C. § 101 as
directed to non-statutory subject matter. Non-Final Act. 2--4.
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II. Claims 29--33, 35--41, 43, and 44 are rejected under 35 U.S.C.
§ 101 as unsupported by either a clearly asserted utility or a well-
established utility. Id. at 5.
III. Claims 29-33, 35--41, 43, and 44 are rejected under 35 U.S.C.
§ 112, first paragraph. Id.
IV. Claims 29-33, 35--41, 43, and 44 are rejected under 35 U.S.C.
§ 112, second paragraph. Id. at 5---6.
V. Claims 29-32 and 37--40 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Gutterman (US 5,297,031, iss. Mar. 22, 1994),
Popolo (US 5,715,402, iss. Feb. 3, 1998), Cristofich (US 6, 173,270
Bl, iss. Jan. 9, 2001), Barron's Dictionary (Dictionary of Finance
and Investment Terms, Fifth Edition, pub. 1998), and AAP A. 4 Id.
at 6-11.
VI. Claims 33 and 41 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Gutterman, Popolo, Cristofich, Barron's
Dictionary, AAPA, and Perg (US 5,237,500, iss. Aug. 17, 1993).
Id. at 11.
VII. Claims 35, 36, 43, and 44 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Gutterman, Popolo, Cristofich, Barron's
Dictionary, AAP A, and Anderson (US 6,064,985, iss. May 16,
2000). Id. at 11-12.
4 Although the statement of the rejection fails to list claims 30-32 and 38-
40, these claims are rejected in the body of the rejection. See Non-Final Act.
10-11. We consider this omission an inadvertent and harmless error on the
part of the Examiner.
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ANALYSIS
Rejection I
Non-statutory Subject Matter
Appellant argues claims 29--33, 35, and 36 as a group, and chooses
independent claim 29 for discussion. Accordingly, we select claim 29 as
representative of the group, and thus, claims 30-33, 35, and 36 stand or fall
with claim 29. See 37 C.F.R. § 41.37(c)(l)(iv).
The Examiner finds "[b ]ased upon consideration of all the relevant
factors with respect to the claim as a whole, claim 29 is held to claim an
abstract idea, and is therefore rejected as ineligible subject matter under 35
USC 101." Non-Final Act. 3. Claim 29 is directed to using a computerized
system to facilitate buying and selling of stock options among users. The
Examiner finds that "[i]ndependent claim 29 recites a process comprising
[steps including] identifying, receiving, matching, and transferring." Id.
The Examiner asserts that claim 29 neither recites the structural apparatus
that performs the method steps nor positively recites the subject matter that
is being transformed to a different state. Id. The Examiner determines that
the steps of claim 29 performed "'by the computerized system' could mean a
human using a desktop computer system to perform all the steps" and does
not indicate that a particular machine has been programmed to perform the
method steps. Id. at 4.
Appellant contends that the Examiner misapplied USPTO guidelines
by limiting the focus of the rejection only on the machine-or-transformation
test. Br. 9. "Specifically, [Appellant argues] the claims recite that the
machine performs every step of the recited process. Accordingly, the
machine is not merely nominally related to the process, but rather integral
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and necessary to the process." Id. According to Appellant, "[t]he steps of
the process include recitations of elements that further distinguish the
computerized system from a general purpose computer. For example, the
machine comprises an offer/order matching algorithm." Id. at 10.
We disagree that the Examiner limited the non-statutory analysis of
claim 29 solely to the machine-or-transformation test. See Non-Final Act.
2--4. The Supreme Court in Bilski held that claims explaining the basic
concept of an activity (hedging) would allow the Appellant to preempt the
use of this approach in all fields, and would effectively grant a monopoly
over an abstract idea. Bilski v. Kappas, 130 S. Ct. 3218, 3231 (2010).
Abstract ideas are not patent eligible. Id. at 3225. Alice involved "a method
of exchanging financial obligations between two parties using a third-party
intermediary to mitigate settlement risk." Alice Corp. Pty. Ltd. v. CLS Bank
Int'!, 134 S. Ct. 2347, 2356 (2014). Like the method ofhedging risk
in Bilski, Alice held that "intermediated settlement... is an 'abstract idea'
beyond the scope of§ 101." Id. Here, claim 29 does no more than lay out
the concept of performing a financial transaction between two parties. The
claim neither refers to a specific machine by reciting structural limitations to
any apparatus, nor recites any specific operations that would cause a
machine to be the mechanism to identify, receive, assist, match, and transfer.
As the Examiner observes, performing the recited steps requires no machine,
but only the conscious thought of a human controlling the operation. Absent
any specific structural limitations, claim 29 recites no more than the abstract
concept and basic principles of performing a financial transaction between
two parties for buying stock options in exchange for funds. As in Bilski and
Alice, a patent including this claim would allow the Appellant to preempt the
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use of this approach in all fields, and would effectively grant a monopoly
over an abstract idea.
Moreover, as to "the computerized system" recited with respect to
each step in claim 29, even if some physical steps are required to obtain
information from a database (e.g., entering a query via a keyboard, clicking
a mouse), such data-gathering steps cannot alone confer patentability.
Indeed, the Court in Alice cautioned that merely limiting the use of an
abstract idea "to a particular technological environment" or implementing
the abstract idea on a "wholly generic computer" is not sufficient as an
additional feature to provide "practical assurance that the process is more
than a drafting effort designed to monopolize the [abstract idea] itself."
Alice, 134 S. Ct. at 2358.
Here, Appellant contends that because each element of the method of
claim 29 is performed "by the computerized system," every step of the
method is tied to another statutory class. Br. 11. We disagree with
Appellant's contention because the recitation of a generic computer system
does not limit the claims sufficiently or add any inventive concept to the
abstract idea of performing a financial transaction as discussed above. The
fact that certain algorithms are disclosed in the Specification as argued by
Appellant does not change the outcome either, because a claim may preempt
only that which the claim encompasses, not what is disclosed but left
unclaimed. In other words, claim 29 does not recite a specialized algorithm
that could move it from the abstract to the concrete, and simply executing an
abstract concept on a computerized system does not render a computer
"specialized"; nor does it transform a patent-ineligible claim into a patent-
eligible one. See Bancorp Servs., LLC v. Sun Life Assurance Co. of Can.,
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687 F.3d 1266, 1280 (Fed. Cir. 2012). Thus, to the extent that claim 29
recites a "computerized system" to implement the steps, we do not find these
limitations limit the scope of the claim to anything less than the abstract idea
itself.
Accordingly, we sustain the rejection of claim 29 under 35 U.S.C.
§ 101 as directed to non-statutory subject matter, including claims 30-33,
35, and 36, which fall with claim 29.
Rejection II
Utility
The Examiner rejects claims 29--33, 35--41, 43, and 44 under 35
U.S.C. § 101 as being unsupported by either a clearly asserted utility or a
well-established utility. Non-Final Act. 5. In particular, the Examiner finds
Independent claims 29 and 37 are inoperative because the buy
Id.
and sell offers cannot be matched and thus cannot result in a
transaction and a transfer of fi1nds. The computer assisted
determination would prevent a determination since the counter
party offers each do not constitute valid, actionable offers since
the buy offer lacks a quantity and the sell offer lacks a price.
Hence, the steps as claimed cannot be a computer automated
process. Dependent claims 30-33, 35, 36, 38--41, 43 and 44 are
rejected because of their dependence on independent claims 29
and 37.
An examiner has the initial burden of setting forth a reason to doubt
an appellant's presumptively correct assertion of utility. In re Swartz, 232
F.3d 862, 864 (Fed. Cir. 2000). "The PTO may establish a reason to doubt
an invention's asserted utility when the written description 'suggest[s] an
inherently unbelievable undertaking or involve[ s] implausible scientific
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principles."' In re Cortright, 165 F.3d 1353, 1357 (Fed. Cir. 1999)
(quoting Jn re Brana, 51F.3d1560, 1566 (Fed. Cir. 1995)). Thus, the
Examiner must present evidence necessary to establish a reason for one of
ordinary skill in the art to question the objective truth of the statement of
utility. Swartz, 232 F.3d at 864.
In our view, the Examiner has not set forth a factual basis to establish
that there is reason for one skilled in the art to question the presumptively
correct assertion of utility for the claimed invention. Thus, we agree with
Appellant "that the Office's rejection is conclusory and is insufficient to
make aprimafacie case ofunpatentability." Br. 11. The Examiner fails to
consider and address the passages in the Specification cited by Appellant in
support of a credible utility (see Br. 12) and merely refers to the rejection of
record, which fails to present any evidence or factual basis to support the
Examiner's findings. See Ans. 3 ("RESPONSE: Please see the rejections
mailed November 3, 2011.").
Accordingly, the rejection of claims 29-33, 35--41, 43, and 44
under 35 U.S.C. § 101 as being inoperative, and therefore lacking credible
utility, is not sustained.
Rejection III
Enablement
The Examiner rejects claims 29-33, 35--41, 43, and 44 under 35
U.S.C. § 112, first paragraph, because "the claimed invention is not
supported by either a clearly asserted utility or a well established utility for
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the reasons set forth above, one skilled in the art clearly would not know
how to use the claimed invention." Non-Final Act. 5.
However, the question under the enablement requirement of§ 112 is
whether the Specification teaches those in the art to make and use the
invention without undue experimentation. See In re Vaeck, 947 F.2d 488,
495 (Fed. Cir. 1991). That question has not been addressed by the
Examiner. Accordingly, a prima facie case of a lack of enablement under
the first paragraph of§ 112 has not been made out in the first instance, and
therefore, the rejection of claims 29-33, 35--41, 43, and 44 under 35 U.S.C.
§ 112, first paragraph, as failing to comply with the enablement requirement,
is not sustained.
Rejection IV
Indefiniteness
The Examiner rejects claims 29-33, 35--41, 43, and 44 under 35
U.S.C. § 112, second paragraph, because of "ambiguities created by the lack
of an offer price mechanism and the lack of an offer quantity in independent
claims 29 and 37." Non-Final Act. 5---6.
In light of the Specification, one of ordinary skill in the art would
understand the claimed subject matter comprises an offer price mechanism
and an offer quantity as claimed. That said, claim 29 recites an offer
identifying the stock sought and a price associated with the offer. "Breadth
is not indefiniteness." In re Gardner, 427 F.2d 786, 788 (CCPA 1970).
Accordingly, the rejection of claims 29-33, 35--41, 43, and 44 under 35
U.S.C. § 112, second paragraph, as being indefinite for failing to particularly
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point out and distinctly claim the subject matter which Appellant regards as
the invention, is not sustained.
Rejection V
Obviousness
Independent claims 29 and 37, and dependent claims 30-32 and 38-40
Appellant argues that the Examiner erred in rejecting claim 29 under
35 U.S.C. § 103(a) because Gutterman fails to disclose or suggest
"identifying, by the computerized system, a first trader and a second trader."
Br. 18. In the Non-Final Office Action, the Examiner cites column 11, lines
23-36 of Gutterman as disclosing the argued limitation (Non-Final Act. 6).
Moreover, in the Answer, the Examiner cites column 14, lines 21-24 of
Gutterman, asserting "that the identification of a trader is being disclosed."
Ans. 5.
We have reviewed the cited passages of Gutterman on which the
Examiner relies. Gutterman discloses that orders are communicated to the
workstation via an electronic order entry system, and the information
presented with each incoming order includes at least an identification
number of each trader placing the order and the trader's account number.
See Gutterman 11:23-26 and 14:21-24. As such, we find that the
Examiner's interpretation of "identifying, by the computerized system, a
first trader and a second trader" is reasonable, because the computerized
system of Gutterman identifies traders via an identification number and an
account number.
Appellant contends that "[t]he Office fails to provide prior art
teaching or suggesting the element of 'assisting, by the computer[ized]
system, the second trader in determining whether the offer is financially
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advantageous'." Br. 18 (emphasis omitted). "Specifically, [Appellant
argues that] the selection of a reasonable asking price[, as described by
Popolo,] does not reveal whether selling at that price would be advantageous
given a seller's specific financial situation." Id. at 19. Appellant's argument
however is not commensurate in scope with the language of claim 29. The
claimed limitation "determining whether the offer is financially
advantageous" is not based upon a seller's specific financial situation, as
argued, but rather broadly recited to encompass any basis for determining
whether the offer is financially advantageous. Indeed, by "assist[ing] the
seller in establishing a reasonable asking price," Popolo teaches a system
that determines whether the offer is financially advantageous so that the
seller does not underprice, and therefore, be financially disadvantaged. See
Ans. 6 (citing Popolo 16:21-22).
Appellant further contends that Gutterman does not teach or suggest
"matching, by the computer[ized] system, the order with the offer," as
recited in claim 29. Br. 20. In particular, Appellant argues that Gutterman's
grouping and color-coding of orders (i.e., all buys and sells of the same
commodity price) for quick identification and action "would be matched by
the trader or user, not the computerized system as claimed." Id. We
disagree. Gutterman' s computerized system automatically sorts through
numerous incoming orders to identify all buys and sells of the same
commodity and price and presents the matched orders and offers by color-
coding them for easy identification for the broker. See Gutterman 11 :23--45;
see also Gutterman 5:49-53 ("More than such a system for merely matching
buy and sell orders, the present invention provides a system that allows
brokers to manage their decks and to improve the accuracy of
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communications between the trading floor and the customers. ")(emphasis
added).
We are not persuaded by Appellant's argument that neither Gutterman
nor Cristofich discloses or suggests "transferring, by the computerized
system, the options rights for the stock from the second trader to the first
trader" (Br. 20), because as the Examiner explains (see Ans. 8-9), this
limitation of claim 29 is rejected as obvious over the combination of
Gutterman and Cristofich, and not over either one of them individually. See
In re Merck & Co., 800 F.2d 1091, 1097 (Fed. Cir. 1986) ("Non-
obviousness cannot be established by attacking references individually
where the rejection is based upon the teachings of a combination of
references.").
Finally, Appellant argues "[ t ]he Office admits that Gutterman does
not teach or suggest the element of 'transferring, by the computerized
system, funds in accordance with the off er from the first trader to the second
trader'." Br. 21. Appellant submits that Cristofich fails to disclose this
limitation because "the system of Cristofich does not automatically transfer
the funds." Id. To the contrary, the Examiner asserts that "Gutterman
suggests the transferring of funds in col. 13, 11. 3 7-40 ... [but] Gutterman
does not explicitly disclose the transfer of rights." Ans. 7. The Examiner
relies on Cristofich in combination with the teachings of Gutterman to
render obvious this disputed limitation. Id. at 7-8 ("Thus the ordinary
practitioner would have seen it as obvious that the known methods of
Gutterman in view of Cristofich disclosed and suggested 'transferring, by
the computerized system, funds in accordance with the off er from the first
trader to the second trader'."). By attacking Cristofich individually,
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Appellant fails to adequately address the reasoning proffered by the
Examiner in rejecting this contested limitation, and thus, we are not apprised
of error on the part of the Examiner. Furthermore, we note that Appellant's
argument that Cristofich's computerized system does not "automatically"
transfer the funds is not commensurate in scope with the recited claim
language. The claim limitation as recited does not preclude a broker using
the computerized system to transfer funds.
We are not persuaded, based on the present record, that the Examiner
erred in rejecting claim 29 under 35 U.S.C. § 103(a). Therefore, we sustain
the Examiner's rejection of independent claim 2 9, and independent claim 3 7,
which recites substantially similar limitations and is argued based on claim
29. See Br. 21. We also sustain the Examiner's rejection of dependent
claims 30-32 and 38--40, which are not argued separately except based on
their dependence on claims 29 and 37. See id.
Dependent claims 33 and 41
Rejection VI
Obviousness
For the foregoing reasons, we sustain the rejection of claims 33 and
41 under 35 U.S.C. § 103(a), which are not argued separately except based
on their dependence on claims 29 and 37. See Br. 22.
Rejection VII
Obviousness
Dependent claims 35, 36, 43, and 44
We sustain the Examiner's rejection under 35 U.S.C. § 103(a) of
claims 35, 36, 43, and 44 for the same reasons discussed above because they
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are not argued separately except based on their dependence on claims 29 and
37. See id.
DECISION
Rejections I, V, VI, and VII are affirmed.
Rejections II, III, and IV are reversed.
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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