Ex Parte Janowski

Patent Trial and Appeal Board

Mar 16, 2018

12103615 (P.T.A.B. Mar. 16, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/103,615 04/15/2008
12684 7590 03/20/2018
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
FIRST NAMED INVENTOR
Braden S. Janowski
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.
4672-08857 AUS 2290
EXAMINER
MILEF, ELDA G
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
03/20/2018 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):
mail@lsk-iplaw.com
docket-us@lsk-iplaw.com
pair_lsk@firsttofile.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte BRADEN S. JANOWSKI
Appeal2016-003797 1
Application 12/103,6152
Technology Center 3600
Before ANTON W. PETTING, BIBHU R. MOHANTY, and
TARA L. HUTCHINGS, Administrative Patent Judges.
HUTCHINGS, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 1-5 and 12-18. We have jurisdiction under 35 U.S.C.
§ 6(b ).
We AFFIRM.
1 Our decision references Appellant's Appeal Brief ("App. Br.," filed
Aug. 19, 2015) and Reply Brief ("Reply Br.," Mar. 3, 2016), and the
Examiner's Answer ("Ans.," mailed Jan. 6, 2016) and Final Office Action
("Final Act.," mailed Mar. 23, 2015).
2 Appellant identifies Chicago Mercantile Exchange Inc. as the real party in
interest. App. Br. 2.
Appeal 2016-003797
Application 12/ 103, 615
CLAIMED INVENTION
Appellant's claimed invention "relates in general to making markets
for electronically traded financial instruments." Spec. i-f 1.
Claim 1, reproduced below, is the sole independent claim on appeal
and is representative of the claimed subject matter:
1. A method implemented within a computer system separate
from an electronic exchange for adjusting one or more
parameters of an implemented strategy for making markets in a
financial instrument traded on the electronic exchange, the
method comprising:
implementing with the computer system a market making
strategy for a financial instrument traded on an electronic
exchange, said market making strategy including:
determining with the computer system a target market
value for the financial instrument to which the market making
strategy is applied;
establishing with the computer system one or more
parameters of the strategy based at least in part on the determined
target market value of the instrument, said one or more
parameters selected from the group consisting of: (a) book depth
for resting trade orders submitted to the electronic exchange in
accordance with the market making strategy (Book Depth); (b)
Bid/Ask spread (Aggression); and (c) Bid/Ask spread shift with
no change to Aggression (Bias); and
generating and submitting, with the computer system, at
least one trade order for the financial instrument to the electronic
exchange in accordance with the target market value and the one
or more parameters established for the market making strategy;
and
providing a parameter adjustment graphical user interface
with the user controls configured to adjust said one or more
parameters of the implemented strategy; and
adjusting through user input of the parameter adjustment
graphical user interface at least one of said one or more
parameters of the implemented strategy.
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REJECTIONS
Claims 1-5 and 12-18 are rejected under 35 U.S.C. § 101 as directed
to non-statutory subject matter.
Claims 1-5 and 12-18 are rejected under 35 U.S.C. § 103(a) as
unpatentable over Kaminsky (US 2008/0208734 Al, pub. Aug. 28, 2008),
Brady (US 2002/0128955 Al, pub. Sept. 12, 2002), and Brinkmann
(US 2007/0113183 Al, pub. May 17, 2007).
ANALYSIS
Non-Statutory Subject Matter
Under 35 U.S.C. § 101, an invention is patent-eligible if it claims a
"new and useful process, machine, manufacture, or composition of matter."
35 U.S.C. § 101. The Supreme Court, however, has long interpreted§ 101
to include an implicit exception: "[l]aws of nature, natural phenomena, and
abstract ideas" are not patentable. See, e.g., Alice Corp. Pty. Ltd. v. CLS
Bankint'l, 134 S. Ct. 2347, 2354 (2014).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth 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 Corp., 134 S. Ct.
at 2355. The first step in that analysis is to "determine whether the claims at
issue are directed to one of those patent-ineligible concepts." Id. If the
claims are not directed to a patent-ineligible concept, e.g., an abstract idea,
the inquiry ends. Otherwise, the inquiry proceeds to the second step where
the elements of the claims are considered "individually and 'as an ordered
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combination"' to determine whether there are additional elements that
"'transform the nature of the claim' into a patent-eligible application."
Alice Corp., 134 S. Ct. at 2355 (quoting Mayo, 566 U.S. at 79, 78).
The Court acknowledged in Mayo, that "all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena,
or abstract ideas." Mayo, 566 U.S. at 71. We, therefore, look to whether the
claims focus on a specific means or method that improves the relevant
technology or are instead directed to a result or effect that itself is the
abstract idea and merely invoke generic processes and machinery.
See Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).
In rejecting the pending claims under 35 U.S.C. § 101, the Examiner
determines that the claims are directed to "adjusting parameters for a market
making strategy." Final Act. 3. The Examiner determines that adjusting
parameters for a market making strategy is "a longstanding commercial
practice" and "a fundamental economic practice long prevalent in our
system of commerce," i.e., an abstract idea. Id. The Examiner further
determines that the claims do not include additional elements or a
combination of elements that are sufficient to amount to significantly more
than the abstract idea because "the claims do no more than implement
adjusting parameters for a market making strategy on a generic computer."
Id. at 3--4. Individually, the claimed steps each "amounts to data analysis,
which is one of the most basic functions of a computer" and recites "'well-
understood, routine, conventional activit[ies]' previously known to the
industry" that require no more than "a generic computer to perform generic
computer functions." Id. at 4. The ordered combination adds nothing that is
not already present when the steps are considered separately. See id. In this
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regard, the Examiner concludes that the claims do not purport to improve the
functioning of a computer itself or other technology or technical field, and
that the use of an unspecified, generic computer hardware merely links the
system to a particular technological environment by computers. Id.
Appellant argues that the Examiner erred in rejecting the claims under
35 U.S.C. § 101 because the Examiner has not shown by objective evidence,
such as a citation to a finance or banking textbook or standard, that the
present claims are directed to an abstract idea. App. Br. 3, n.1. Patent
eligibility under § 101 is a question of law that may involve underlying
questions of fact. Move, Inc. v. Real Estate Alliance Ltd., 2018 WL 656377,
at *2 (Fed. Cir. 2018). Although evidence may be helpful when facts are in
dispute, it is not always needed. See Mortgage Grader, Inc. v. First Choice
Loan Services Inc., 811F.3d1314, 1325-26 (Fed. Cir. 2016) ("it is also
possible, as numerous cases have recognized, that a § 101 analysis may
sometimes be undertaken without resolving fact issues"). Here, however,
Appellant's bare assertion that a finance or textbook or other standard must
be cited, without any supporting reasoning as to why, is insufficient to
require the Examiner to provide further evidentiary support for his patent-
eligibility determination.
Addressing step one of the Mayol Alice framework, Appellant argues
that the claims are patent-eligible because the claimed invention is "a novel
and patentable transaction processing system and user interface" that
improves the interaction between the user and transaction system and can be
used to efficiently respond to rapidly changing data. App. Br. 4. Appellant
contends that the claimed invention facilitates transaction modifications by
providing automatic submission of multiple orders responsive to a change in
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parameters, which is "neither a routine nor conventional activity previously
known in the industry ... , as evidenced by the lack of prior art." Id. But a
finding of novelty or non-obviousness does not automatically lead to the
conclusion that the claimed subject matter is patent-eligible.
"Groundbreaking, innovative, or even brilliant discovery does not by itself
satisfy the§ 101 inquiry." 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 Diamond v. Diehr, 450 U.S. 175, 188-89
( 1981) ("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.").
Here, Appellant's Specification provides that a market maker is an
entity that maintains buy ("Bid") and sell ("Ask") prices in a given
instrument by standing ready, willing, and able to buy or sell lots/shares at
publicly quoted prices. Spec. i-f 2. Market makers must give traders the best
Bid or Ask prices for each market order transaction. Id. Because "market
making is a fast moving business" and the current process for adjusting
submitted orders is "overly cumbersome and time consuming," a market
maker may lose advantageous buy and sell opportunities. Id. i-f 3.
Appellant's Specification, thus, describes that the claimed invention seeks to
improve the process of adjusting submitted orders for speed and efficiency.
Id. i-f 4. Appellant does not indicate, and we do not find, where the
Specification describes any improvements in computer functionality or other
technology brought about by the claimed invention.
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In addition, claim 1 recites a method for adjusting one or more
parameters of an implemented strategy for making markets. The method
comprises the steps of implementing a market making strategy, determining
a target market value, establishing one or more parameters of the strategy,
generating and submitting a trade order, providing a parameter adjustment
graphical user interface, and adjusting through user input the parameter
adjustment graphical user interface. The Specification and claims thus
support the Examiner's determination that the claims focus on an
improvement to the process of adjusting parameters for a market maker
strategy, which is a fundamental economic practice and longstanding
commercial practice, i.e., an abstract idea. See, e.g., Spec. i-f 3, 15-16
(describing adjustment of parameters by money makers as a practice long
prevalent in our system of commerce practice). The intrinsic evidence also
supports the Examiner's determination that the claims fall under the
information-based category of abstract ideas.
Turning to step two of the Mayo/Alice framework, Appellant argues
that the claimed invention includes additional elements that amount to
significantly more than the abstract idea. App. Br. 5. In particular,
Appellant asserts that the claimed invention "improves the functioning of a
computer, i.e. by providing a system which facilitates rapid and efficient
transaction modifications, e.g. adjustment of orders, to capture advantageous
transactional opportunities and minimize transactions unlikely to transact,
e.g. orders unlikely to trade." Id. In this regard, Appellant asserts that the
claimed invention "improves upon the ability to indirectly adjust [the]
parameters of a transaction strategy and automatically submit the necessary
orders responsive to those adjustments." Id. Yet, the advantages that
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Appellant touts do not concern an improvement to computer capabilities, but
instead relate to an improvement to the process for adjusting parameters for
which a computer system is used as a tool in its ordinary capacity. In this
case, a generic graphical user interface performs the well-understood
function of receiving user input, and a generic computer system performs
routine data processing steps. Appellant fails to identify, and we do not find,
any indication in the record that the claimed invention improves computer
functionality, requires specialized computer hardware or other inventive
components, invokes inventive programming, or is otherwise directed to
something other than the abstract idea identified by the Examiner.
We also are not persuaded by Appellant's argument that the claimed
invention is akin to Example 3. 3 App. Br. 5. Example 3 is modeled after the
claims in Research Corporation Technologies inc. v. lvficrosoft Corp., 621
F.3d 859 (Fed. Cir. 2010). E.r:amples 7. In Research Corporation the
Federal Circuit determined that the claimed invention was patent-eligible,
because it presented "functional and palpable applications in the field of
computer technology" and addressed "a need in the art for a method of and
apparatus for the halftone rendering of gray scale images in which a digital
data processor is utilized in a simple and precise manner to accomplish the
halftone rendering." Research Corp. Techs., 621 F.3d at 868----69. \Ne find
no analogous improvement to computer technology in Appellant's claims.
Appellant asserts that '"the claims include specific limitations other
than what is well-understood, routine and conventional in the field, as is
3 USPTO's Examples: Abstract Ideas (Jan. 27, 2015), available at
https://www. uspto. gov I sites/ default/files/ documents/ abstract_idea_examples
.pdf (hereinafter "Examples").
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apparent from the lack of prior art" App. Br. 6. Appellant identifies these
elements as those '"allow[ing] the trader to specify parameters for which the
claimed system ... generates the necessary transactions to accomplish."
But, Appellant seemingly misapprehends the controlling precedent.
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 [patent-
ineligible concept] itself."' Alice Corp., 134 S. Ct. at 2355. As described
above, a novel and nonobvious claim directed to a purely abstract idea is,
nonetheless, patent-ineligible. See Mayo, 566 U.S. at 90. Here, Appellant
does not persuade us that the claims require more than the use of a
conventional graphical user interface operating in a well-understood and
routine manner (e.g., receiving input from a user).
We also are not persuaded by Appellant's assertion that the claimed
system "is confined to a particular useful application of adjusting
transactions in a transaction processing system." App. Br. 6. The mere
recitation of a practical application for an abstract idea is insufficient to
transform the abstract idea into a patent-eligible invention. Cf CyberSource
Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1371 (Fed. Cir. 2011) ("The
Court [in Parker v. Flook, 437 U.S. 584 (1978)] rejected the notion that the
recitation of a practical application for the calculation could alone make the
invention patentable.").
Appellant argues that the "claimed system requires more than just a
general purpose computer system to operate." App. Br. 6. Yet, claim 1
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merely recites a generic "computer system." We find no indication in the
record, nor does Appellant point to anything in the record to indicate, that
the claimed computer system requires any specialized computer hardware.
To the contrary, paragraph 14 of the Specification describes that the trading
platform "may be essentially any capable computer or other digital
processing device." Similarly, the claimed computer system performs the
steps of implementing, determining, establishing, generating, and
submitting, which are generic computer functions. See Elec. Power Grp.,
LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016) (claims held to be
directed to an abstract idea where "[t]he advance they purport to make is a
process of gathering and analyzing information of a specified content, then
displaying the results, and not any particular assertedly inventive technology
for performing those functions.")
In the Reply Brief, Appellant further argues that the claims are
"necessarily rooted in computer technology," analogous to the claims at
issue in DDR Holdings. Reply Br. 3 (citing DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014)). Particularly, Appellant
repeats assertions that the claimed invention improves interaction between
the user and transaction processing system, and the technical fields of
man/machine interaction and data and transaction processing. See id. Yet,
as described above, there is no indication in the record that the claimed
graphical user interface is more than a generic graphical user interface used
in its normal, expected, and routine manner. See DDR Holdings, 773 F.3d at
1256 ("after Alice, there can remain no doubt: recitation of generic computer
limitations does not make an otherwise ineligible claim patent-eligible").
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Accordingly, on the record before us, we sustain the Examiner's
rejection under 35 U.S.C. § 101 of independent claim 1, and the remaining
claims.
Obviousness
We are persuaded by Appellant's argument that the Examiner erred in
rejecting independent claim 1 under 35 U.S.C. § 103(a) because Kaminsky
does not disclose or suggest submitting and generating an order based on a
determined target market value and one or more parameters selected from
the group consisting of: (a) Book Depth, (b) Aggression, and (c) Bias to an
exchange, as recited in claim 1. The Examiner relies on Kaminsky for the
argued limitation. Final Act. 6-7 (citing Kaminsky i-fi-f 10, 23, 25, 30, 31, 33,
35, 37, 73, 104, 108, 110, Figs. 2A, 3, 4).
Kaminsky describes a market-maker GUI submits and modifies
market-maker quotes, and sets market-maker defaults and parameters.
Kaminsky i126. The market-maker GUI also can submit, cancel, update, or
replace orders; resend reports; present book depths for selected products;
and present underlying quotes and news alerts. Id. i1i125-26.
Appellant does not dispute that Kaminsky' s market maker initially
submits a quote to an exchange system. See App. Br. 10. However,
Appellant argues that Kaminsky "provides no teaching as to how externally
submitted quotes are created," much less that externally submitted quotes are
generated based on a determined target market value and a parameter
selected from the group of Book Depth, Aggression, and Bias, as required by
claim 1. Id. at 13. We agree. Kaminsky's disclosure that the market maker
GUI can present book depths for selected products, set the market-maker's
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defaults and parameters, and submit trade orders does not adequately support
the Examiner's finding that Kaminsky establishes Book Depth as a
parameter of the strategy and generates and submits trade order in
accordance with target value and Book Depth, as required by claim 1.
In the Answer, the Examiner finds that Kaminsky's disclosure at
paragraphs 107 and 108 regarding quote service module 240 describes
generating trade orders based on a market value and parameters. Ans. 6.
This module modifies quotes by regenerating a just-filled quote when the
market maker's risk threshold has not been exceeded. Kaminsky i-f 108. In
particular, the module stores parameters from the market maker regarding,
for example, how many times the quotes are to be regenerated and whether
the regenerated quotes have the same bid and offer values. Id. However,
even if Kaminsky taught that these parameters are selected from a group
consisting of Book Depth, Aggression, and Bias, this module is internal to
the exchange system 100 and manages quotes already submitted to the
exchange. Id. i-f 70 (exchange system 100 includes quote service module
240), i-f 104 (quote service module 240 belongs to exchange system 100 and
includes quote service module). As such, the quote regeneration module
does not describe generating and submitting the quotes to an exchange, as
required by claim 1.
Moreover, the Examiner does not adequately explain why one of
ordinary skill in the art would modify the placement of this module to be
outside the exchange in light of Kaminsky' s description of providing the
generation internal to the exchange to minimize delay. See Kaminsky i-f 9
(describing inability of software tools external to the exchange to act in
sufficient time to revise or cancel quotes).
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Accordingly, we do not sustain the rejection of claim 1 under 35
U.S.C. § 103(a) or its dependent claims.
DECISION
The Examiner's rejection of claims 1-5 and 12-18 under 35 U.S.C.
§ 101 is affirmed.
The Examiner's rejection of claims 1-5 and 12-18 under 35 U.S.C.
§ 103(a) is 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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