Ex Parte Kalt et al

Patent Trial and Appeal Board

Oct 31, 2012

10062590 (P.T.A.B. Oct. 31, 2012)

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.
10/062,590 01/31/2002 David Samuels Kalt 7075/4 3408
7590 11/01/2012
VALAUSKAS & PINE LLC
150 South Wacker Drive
Suite 620
Chicago, IL 60606
EXAMINER
MILEF, ELDA G
ART UNIT PAPER NUMBER
3694
MAIL DATE DELIVERY MODE
11/01/2012 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 DAVID SAMUELS KALT and NED WESLEY
BENNETT
____________________

Appeal 2011-003491
Application 10/062,590
Technology Center 3600
____________________

Before: MURRIEL E. CRAWFORD, MEREDITH C. PETRAVICK, and
MICHAEL W. KIM, Administrative Patent Judges.

KIM, Administrative Patent Judge.

DECISION ON APPEAL

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STATEMENT OF CASE1
Appellants appeal under 35 U.S.C. § 134 from a rejection of claims
19-27. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
The claims are directed to systems and methods that facilitate the
efficient management and trading of financial instruments (Spec. 1:7-8).
Claim 19, reproduced below, is illustrative of the claimed subject matter:
19. A system for conducting managed trading in financial
securities, said system including:
a computer trading system operator that receives and
stores information from one or more advisory service providers,
wherein said information includes one or more trade
recommendations for one or more financial securities to be
traded and further wherein the one or more trade
recommendations are provided without knowledge of any
investor portfolio;
a computer trading system operator that distributes said
information to one or more investors;
a computer trading system operator that receives and
stores selection information from said one or more investors
where said selection information includes one or more
conditional trading order criteria;
a computer trading system operator that compares said
one or more trade recommendations with said one or more
conditional trading order criteria to determine a match based on
instances of partial or identical correspondence; and
a computer trading system operator that automatically
executes a trade order for a purchase or sale of said one or more
financial securities where said trade order includes said one or
more trade recommendations and said one or more conditional
trading order criteria.

1 Our decision will make reference to the Appellants’ Appeal Brief (“App.
Br.,” filed July 19, 2010) and Reply Brief (“Reply Br.,” filed November 24,
2010), and the Examiner’s Answer (“Ans.,” mailed September 28, 2010).
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Claims 19, 20, and 27 are rejected under 35 U.S.C. § 112, first
paragraph, as failing to comply with the written description requirement.
Claims 19 and 20 are rejected under 35 U.S.C. § 101 because the
claimed invention is directed to non-statutory subject matter.
Claims 19 and 20 are rejected under 35 U.S.C. § 103(a) as being
unpatentable over Reese (US 6,236,980 B1, iss. May 22, 2001) and Sefein
(US 2002/0174056 A1, pub. Nov. 21, 2002).
Claims 21-23 are rejected under 35 U.S.C. § 103(a) as being
unpatentable over Reese, Sefein, and Engin (US 7,373,324 B1, iss. May 13,
2008).
Claims 24 and 26 are rejected under 35 U.S.C. § 103(a) as being
unpatentable over Reese, Sefein, and Freeny (US 6,594,643 B1, iss. Jul. 15,
2003).
Claim 25 is rejected under 35 U.S.C. § 103(a) as being unpatentable
over Reese, Sefein, Freeny, and Sloan (US 7,315,837 B2, iss. Jan. 1, 2008).
Claim 27 is rejected under 35 U.S.C. § 103(a) as being unpatentable
over Reese, Engin, and Freeny.

OPINION
We find that the findings of fact which appear below are supported by
at least a preponderance of the evidence. Ethicon, Inc. v. Quigg, 849 F.2d
1422, 1427 (Fed. Cir. 1988) (explaining the general evidentiary standard for
proceedings before the Office).

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Specification
FF1. The Specification does not provide a lexicographic definition
for “investor portfolio.”
FF2. The Specification discloses that “trading recommendations are
promulgated without consideration of any particular individual investor’s
pre-stated conditional trading criteria” (6:27-29).
FF3. The third party’s recommendations remain impersonal and
impartial, in the sense that they are not influenced by a prior knowledge of
any given investor’s trading conditions (7:7-9).

Reese
FF4. A service could be offered that allows a user to be notified if a
favorite recommender or recommendation source has issued a new
recommendation[]. The service could also automatically purchase the
security for the user using an on-line source (col. 60, ll. 8-19).

OPINION
Finality of Office Action
Appellants request that the finality of the Office Action mailed
February 19, 2010 be withdrawn (App. Br. 8; Reply Br. 4-5). As this issue
is a procedural matter, however, it is a petitionable matter subject to review
by the Director, and not an appealable matter subject to review by the Board
See 37 C.F.R. § 1.181 and Manual of Patent Examining Procedure (MPEP)
§§ 1002 and 1201 (8th Ed., Rev. 9, Aug. 2012).

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Written Description Requirement
We are not persuaded the Examiner erred in asserting that pages 6-7
of the Specification do not provide adequate support for “wherein the one or
more trade recommendations are provided without knowledge of any
investor portfolio,” as recited in independent claim 19 (App. Br. 8-9; Reply
Br. 5-7). Independent claim 27 recites a similar aspect. In the absence of a
definition provided by Appellants (FF1), we adopt the Examiner’s definition
of “investor portfolio” as “a combined holding of more than one stock, bond,
commodity, real estate investment” (Ans. 13). Given this definition, we
agree with the Examiner that neither “pre-stated conditional trading criteria,”
disclosed at page 6 of the Specification (FF2), nor “any given investor’s
trading conditions,” disclosed at page 7 of the Specification (FF3), are
investor portfolios.

Statutory Subject Matter
We are not persuaded the Examiner erred in asserting that claims 19-
20 fail to recite statutory subject matter under 35 U.S.C. § 101 (App. Br. 9;
Reply Br. 7-8). Appellants assert that the combination of “system operator”
and “automatically executes a trade order” constitutes a statutory “particular
machine.” The Federal Circuit rejected arguments similar to Appellants’ in
Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011),
where Cybersource argued the claims were tied to the Internet. See Id. at
1370 (“[w]e are not persuaded by the appellant’s argument that the claimed
method is tied to a particular machine because it ‘would not be necessary or
possible without the Internet”’). Here, Appellants have taken the abstract
concept of receiving, distributing, and executing trading information, and, at
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best, allegedly uses a computer to perform these steps. However, “[t]hat
purely mental processes can be unpatentable, even when performed by a
computer, was precisely the holding of the Supreme Court in Gottschalk v.
Benson.” Id. at 1375. In Benson, “[t]he Court reached that conclusion even
though one of the claims the Court found unpatentable (claim 8) specifically
recited the use of a computer readable medium, including steps such as
‘storing the [BCD] signals in a reentrant shift register’—a physical computer
memory component.” Id. at 1376.
Moreover, the mere recitation of a computer as performing these
steps, without more, is a field-of-use limitation that is insufficient to render
an otherwise patent-ineligible process patent-eligible. See Diamond v.
Diehr, 450 U.S. 175, 191 (1981). Cf. SiRF Tech., Inc. v. Int’l Trade
Comm’n, 601 F.3d 1319, 1333 (Fed. Cir. 2010). Furthermore, in Bilski, the
Supreme Court approvingly cited Flook for “the proposition that the
prohibition against patenting abstract ideas ‘cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment.’” See Id. at 3230. Accordingly, attempting to limit the
abstract ideas of claims 19 and 20 to a computer environment, as Appellants
attempt to do here, is insufficient to render it statutory.

Obviousness of Independent Claim 19
We are not persuaded the Examiner erred in asserting that a
combination of Reese and Sefein renders obvious independent claim 192
(App. Br. 11-14; Reply Br. 9-12). Appellants assert that Reese and Sefein

2 We choose independent claim 19 as representative of claims 19 and 20.
See 37 C.F.R. § 41.37(c)(1)(vii).
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do not render obvious “comparing trade recommendations with conditional
trading order criteria to determine a match for automatic execution of a trade
order” (App. Br. 11-12). We agree with adopt the Examiner’s findings of
fact and rationales, as set forth on pages 13-15 of the Examiner’s Answer.
In particular, we agree that Reese discloses sending a user a notification of a
trade recommendation, and automatically purchasing the recommended
security based upon the notification (conditional trading order criteria)
(FF4).
Appellants also assert that “the options recommendation data [in
Sefein] is generated based on knowledge of the client’s input of risk
aversion data and options selection data unlike the Appellant[s’] invention
that provides trade recommendations without knowledge of any investor
portfolio” (App. Br. 12). However, the “client’s input of risk aversion data
and options selection data” are investor preferences that do not fit under the
Examiner’s aforementioned definition of “knowledge of any investor
portfolio.”
Appellants further assert that the Examiner’s rationale for combining
Reese and Sefein is an impermissible conclusory statement (App. Br. 12;
Reply Br. 11). However, the Examiner’s proffered rationale that it would
have been obvious to modify Reese with the teachings of Sefein “in order to
provide users with user-specific options trading recommendations that match
the user’s aversion to risk and trading objectives” is disclosed at least in
paragraph [0004] of Sefein.
Appellants additionally assert that Reese and Sefein teach away from
one another and if combined would be inoperable, because Reese is directed
to non-user-specific recommendations, while Sefein is directed to user-
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specific recommendations (App. Br. 13). However, a teaching away
requires discouragement, and Appellants have not adequately shown how
either Reese or Sefein discourage the use of non-user-specific/user-specific
recommendations. See In re Gurley, 27 F.3d 551, 553 (Fed. Cir. 1994) (“[a]
reference may be said to teach away when a person of ordinary skill, upon
[examining] the reference, would be discouraged from following the path set
out in the reference, or would be led in a direction divergent from the path
that was taken by the applicant”). Indeed, it would appear that one of
ordinary skill would actually combine these seemingly complementary
approaches. Furthermore, we fail to see how using such seemingly
complementary approaches would render either Reese or Sefein inoperable.
Appellants assert that “Reese does not teach selection information that
includes one or more conditional trading order criteria,” because “when a
selection of the particular security or particular recommender is made in
Reese, no additional conditions (i.e., conditional trading criteria) are
included with the selection,” and “the conditional trading criteria are a
subset of the selection information and not the selection information as
indicated in the Examiner's Answer” (Reply Br. 9-11). As an initial matter,
Appellants have not shown that a proper construction of “one or more
conditional trading order criteria” excludes security selection. See In re Am.
Acad. of Sci. Tech. Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004) (“[d]uring
examination [of a patent application, a pending claim is] given [the] broadest
reasonable [construction] consistent with the specification, and . . . claim
language should be read in light of the specification as it would be
interpreted by one of ordinary skill in the art”) (internal citation and
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quotations omitted). Moreover, Reese discloses the notification of a new
recommendation as a condition for purchasing a security (FF4).
Obviousness of Independent Claim 21
We are not persuaded the Examiner erred in asserting that a
combination of Reese, Sefein, and Engin renders obvious independent claim
213 (App. Br. 14-15; Reply Br. 12). All of Appellants’ arguments have been
addressed in our analysis of independent claim 19.

Obviousness of Independent Claim 24
We are not persuaded the Examiner erred in asserting that a
combination of Reese, Sefein, and Freeny renders obvious independent
claim 244 (App. Br. 14-15; Reply Br. 12). All of Appellants’ arguments
have been addressed in our analysis of independent claim 19.
Obviousness of Independent Claim 27
We are not persuaded the Examiner erred in asserting that a
combination of Reese, Engin, and Freeny renders obvious independent claim
27 (App. Br. 17-18; Reply Br. 13). Appellants assert that “Freeny discloses
a system that analyzes investment data with predetermined trading criteria to
generate a trade request, wherein neither the investment data nor the
predetermined trading criteria are recommendations provided by an advisory
service,” as recited in independent claim 27. However, Reese is cited for
disclosing a security recommendation reporting system (col. 2, ll. 32-35),

3 We choose independent claim 21 as representative of claims 21-23. See 37
C.F.R. § 41.37(c)(1)(vii).
4 We choose independent claim 24 as representative of claims 24 and 26.
See 37 C.F.R. § 41.37(c)(1)(vii).
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where the trading recommendations are from an advisory service (FF4; Ans.
11, 13-14).
Appellants also assert that the Examiner fails to provide articulated
reasoning or rational underpinnings of the express or implied rationale of “to
eliminate the need for the individual investor to constantly monitor market
conditions.” However, column 1, lines 55-61 of Freeny discloses exactly
that.
Appellants further assert that
Reese in view of Engin [in view of] Freeny do not disclose,
teach or suggest []providing [“]trading recommendation
selected by the third-party “advisory service provider
without knowledge of the investor portfolio [.].. wherein the
investor chooses one or more trading recommendations
from the financial information to obtain investor-chosen
trading recommendations’ and “trading financial securities
automatically ... when the investing strategy matches the
investor-chosen trading recommendations,”
as recited in independent claim 27. However, in the absence of specific
arguments by Appellants as to where the Examiner’s combination of Reese,
Engin, and Freeny is in error, we will sustain this rejection. See In re Keller,
642 F.2d 413, 425 (CCPA 1981) (“[o]nce a prima facie case of obviousness
[is] established..., the burden shift[s] to appellant to rebut it”).

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DECISION
The Examiner’s rejections of claims 19-27 are 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). See 37 C.F.R.
§ 1.136(a)(1)(iv).

AFFIRMED

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