Ex Parte Liberman et al

Patent Trial and Appeal Board

Aug 21, 2018

14486585 (P.T.A.B. Aug. 21, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/486,585 09/15/2014
12684 7590 09/05/2018
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
FIRST NAMED INVENTOR
Stanislav Liberman
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.
4672-09740CUS 3779
EXAMINER
MERCHANT, SHAHID R
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
09/05/2018 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 STANISLA V LIBERMAN, MICHAEL H. COLLIGAN, and
JAMES RAITSEV
Appeal2017-006570 1
Application 14/486,585 2
Technology Center 3600
Before HUBERT C. LORIN, JOSEPH A. FISCHETTI, and
BRADLEY B. BAY AT, Administrative Patent Judges.
BAY AT, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134 from the decision rejecting
claims 1-20 under 35 U.S.C. § 101 as being directed to non-statutory subject
matter. We have jurisdiction under 35 U.S.C. § 6(b ).
We AFFIRM.
1 Our Decision references Appellants' Appeal Brief ("App. Br.," filed
Sept. 30, 2016), Reply Brief ("Reply Br.," filed Mar. 15, 2017), the
Examiner's Answer ("Ans.," mailed Jan. 20, 2017), and Final Office Action
("Final Act.," mailed Apr. 8, 2016).
2 Appellants identify "Chicago Mercantile Exchange Inc." as the real party
in interest. App. Br. 2.
Appeal2017-006570
Application 14/486,585
STATEMENT OF THE CASE
Claimed Subject Matter
Appellants' "invention relates to software, systems and methods for
electronic trading in a commodities exchange, derivatives exchange or
similar business involving tradable items where orders from buyers are
matched with orders from sellers." Spec. ,r 2.
Independent claim 1, reproduced below, is illustrative of the subject
matter on appeal.
1. A computer implemented method of matching orders,
the method comprising:
receiving, by a processor operative to execute program
logic stored on a computer readable medium, a first real order;
generating, by the processor responsive to a
determination that the first real order has not been filled by one
or more previously received but unfilled orders counter thereto,
at least one speculative order which corresponds to at least one
other real order that is counter to the first real order and which
is predicted to be, but not yet, received;
commencing, by the processor based on the at least
one speculative order, performance of at least a portion of
calculations involved with matching the first real order with
the yet-to-be received corresponding at least one other real
order, as if it had been received, and generating a plurality of
messages associated therewith;
receiving, by the processor subsequent to at least the
generating of the at least one speculative order, a second real
order corresponding to one of the at least one speculative
order; and
executing, by the processor, a trade based on the second
real order and the first real order, the executing comprising
utilizing the plurality of messages generated by the processor.
App. Br. 14 (Claims App.).
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ANALYSIS
We are not persuaded by Appellants' arguments that the Examiner
erred in concluding that claims 1-20 are directed to non-statutory subject
matter. Upon consideration of Appellants' assertions in the Appeal Brief
(App. Br. 5-13), we agree with the Examiner's rationale for the rejection
and response to arguments, set forth on pages 3-13 of the Answer, as fully
responsive to Appellants' assertions. Accordingly, we adopt them as our
own. We add the following for emphasis.
Legal Standard
The Supreme Court
set forth a framework for distinguishing patents that claim laws
of nature, natural phenomena, and abstract ideas from those that
claim patent-eligible applications of those concepts. First, we
determine whether the claims at issue are directed to one of those
patent-ineligible concepts. If so, we then ask, "[w]hat else is
there in the claims before us?" To answer that question, we
consider the elements of each claim both individually and '"as an
ordered combination" to dete1mine whether the additional
elements "transform the nature of the clairn" into a patent-
eligible application. [The Court] described step two of this
analysis as a search for an '"inventive concept"'--------i.e., an
element or combination of elements that is "sufficient to ensure
that the patent in practice arnounts to significantly more than a
patent upon the [ineligible concept] itself
Alice Corp. Pty. Ltd. v. CLS Bank lnt'l, 134 S. Ct. 2347, 2355 (2014)
(citing and quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
566 U.S. 66 (2012)).
Alice Step One
Appellants argue that the claims are not directed to an abstract idea,
because "the claims are directed to a specific, novel and patentable system
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which can be used by an electronic trading system to offer improved
transactional processing performance." App. Br. 5; Reply Br. 2.
We look to the Background of the Specification to assess the
problems recognized and solution advanced by Appellants to determine if
the claim's 'character as a whole' is directed to excluded subject matter. 3 In
recounting the state of the art, Appellants acknowledge that "[ e ]lectronic
trading systems accept bids and offers in the form of orders, which are also
referred to as real orders because they consist of data entered by traders
either directly or by computing devices under their control." Spec. ,r 3.
Appellants state that "electronic trading systems generally perform matching
using the following" sequence: (1) an order is received, (2) the order is
evaluated against the existing order book and matching is performed, (3)
once processing is finished and a trade is executed, notification messages are
sent to the marketplace of the actions performed to update the current state
of the market; "this sequence is mandated by the business rules used by
electronic trading systems to ensure market integrity ... require[ing] that
orders be matched in a one-at-a-time serialized manner." Id. ,r,r 3--4. "[T]he
preparation and communication of messages has been found to require the
great amount of processing time. For example, messages corresponding to
each of the executed trades need to be built and sent out ... these actions
must be completely executed before processing of the next request can
3 "The 'abstract idea' step of the inquiry calls upon us to look at the 'focus
of the claimed advance over the prior art' to determine if the claim's
'character as a whole' is directed to excluded subject matter." Affinity Labs
of Tex. v. DirecTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016 (quoting Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016)); see
also Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016).
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begin." Id. ,r 5. "Exchanges that host electronic trading systems using match
engines are constantly striving to shorten their response time and thus
increase the number of matches performed per unit of time." Id. ,r 6.
Appellants recognized that "[ w ]hat is needed is an approach that could
significantly improve the performance of order matching, especially at peak
times, when a burst of orders is received by the trading engine." Id. ,r 7.
Appellants' solution to the problem is
the generation of speculative orders which correspond to at
least one other real order that is counter to the first real order
and which is predicted to be, but not yet, received, and the
commencement of processing based thereon such that, upon
receipt of a corresponding real order, the already commenced
processing may be utilized to accelerate the processing of the
transaction.
Reply Br. 2; Spec. ,r 20 ("the next order matches one of these pre-calculated
and pre-generated trades, the time required to send out the messaging for
these trades would be reduced and potentially faster order response times
could be achieved.").
In light of Appellants' description of the problem and solution, the
purported advance over the prior art of the claimed invention is a way of
forecasting a future transaction to improve the processing time and
management of trade orders. In other words, Appellants' invention attempts
to predict the next trade order so that messages associated with that trade can
be generated ahead of time; if the prediction is correct, some of the matching
activity has already been performed, which allows that trade to execute more
efficiently by reducing the it take to complete the trade. See Spec., Abstract;
id. ,r 30 ("a statistical analysis based on the analysis of the price distribution
for the financial instrument may be used."). Predictive analysis is a well-
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established statistical technique applied in a variety of fields, especially in
the field of financial services to assess risk and make future predictions in
guiding decision making and managing financial transactions, which is
analogous to the concept held abstract by the Federal Circuit in OIP
Technologies, Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed. Cir.
2015) ("claim 1 has the following relevant limitations: (1) testing a plurality
of prices; (2) gathering statistics generated about how customers reacted to
the offers testing the prices; (3) using that data to estimate outcomes (i.e.
mapping the demand curve over time for a given product); and (4)
automatically selecting and offering a new price based on the estimated
outcome;" that is, claim 1 is "directed to the concept of offer-based price
optimization", an abstract idea). Thus, we determine that the character of
claim 1 as a whole is directed to excluded subject matter.
We find unpersuasive Appellants' argument "that the claimed
invention in fact improves the computer, as the claimed system is able to
process ahead of the actually received counter transactions such that when
those counter transactions are actually, the processing has been largely
completed, thereby improving the processing throughput." Reply Br. 2-3
(citing McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed.
Cir. 2016). "We therefore look to whether the claims [here] 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." McRO, 837 F.3d at 1314. In
McRO, the court determined that claim 1 "focused on a specific asserted
improvement in computer animation" for achieving automated lip
synchronization of 3-D characters. Id. at 1314--15. Here, representative
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claim 1 is directed to a result, which Appellants characterize as an
"improvement in the processing of transactions" (Reply Br. 3) by invoking a
generic processor, rather than any improvement to computer technology. In
contrast to McRO, which focused on a specific improvement in computer
animation technology, Appellants' claim does not concern an improvement
to computer capabilities, but instead relates to an alleged improvement in
managing transaction processing time using predictive analysis, for which a
computer is used as a tool in its ordinary capacity. We also are not
persuaded that "even if the computer is itself not improved ... the claimed
invention's specific improvement in the processing of transactions is
patentable regardless" (Reply Br. 3) because this focus is on an alleged
improvement to the abstract idea. See Electric Power Group, LLC v. Alstom
S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016) ("the focus of the claims is not
on such an improvement in computers as tools, but on certain independently
abstract ideas that use computers as tools."). We find the subject matter of
claim 1, matching orders in a trading system using predictive analysis, is not
different fundamentally from the kinds of common place financial
transactions that were the subjects of Supreme Court decisions in Alice and
Bilski v. Kappos, 561 US 593 (2010).
Alice Step Two
Turning to the second step of the Alice framework, we "a search for
an 'inventive concept'-i.e., 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 [ineligible concept] itself."' Alice, 134 S. Ct. at 2355
(alteration in original) (quoting Mayo, 132 S. Ct. at 1294). The Supreme
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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." Id.
Indeed, claim 1 does not recite any specialized hardware, but instead,
each step is performed by a generic processor. See Specification ,r 23
( examples of suitable generic communication devices). To qualify as an
inventive concept, the implementation of the abstract idea must involve
"more than performance of 'well-understood, routine, [and] conventional
activities previously known to the industry."' Content Extraction and
Transmission LLC v. Wells Fargo Bank, Nat. Ass 'n, 776 F.3d 1343, 1347-
48 (Fed. Cir. 2014) (alteration in original) (quoting Alice, 134 S. Ct. at
2359).
Claim 1 uses a generic processor to perform well-understood, routine,
conventional activities previously known to the industry, such as receiving
and analyzing data and performing mathematical calculations. See Bancorp
Servs., L.L.C. v. Sun Life Assur. Co. of Canada (US.), 687 F.3d 1266, 1278
(Fed. Cir. 2012) ("[T]he use of a computer in an otherwise patent-ineligible
process for no more than its most basic function-making calculations or
computations-fails to circumvent the prohibition against patenting abstract
ideas and mental processes."). We are not apprised of any claimed element
for accomplishing the claimed solution that is other than what was
generically known for performing those conventional functions. We do not
see, and Appellants do not adequately explain, what particular assertedly
inventive technology for performing the recited functions is required for
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achieving the claimed result. See Credit Acceptance Corp. v. Westlake
Servs., 859 F.3d 1044, 1057 (Fed. Cir. 2017) ("[T]he claims do not provide
details as to any non-conventional software for enhancing the financing
process."); see Intellectual Ventures I LLC v. Capital One Fin. Corp., 850
F.3d 1332, 1342 (Fed. Cir. 2017) ("Our law demands more" than claim
language that "provides only a result-oriented solution, with insufficient
detail for how a computer accomplishes it."); Elec. Power Grp., 830 F.3d
1350, 1354 (explaining that claims are directed to an abstract idea where
they do not recite "any particular assertedly inventive technology for
performing [ conventional] functions"). Despite Appellants' assertions that
the claim steps add enough to make the claims patentable, we find the bare
recitation of the steps performed by a generic processor at a high level of
generality is insufficient to supply an inventive concept.
Contrary to Appellants' contention (Reply Br. 3--4 ), neither the
problem nor the solution here are rooted in computer technology. Unlike the
claims at issue in cases such as DDR Holdings LLC v Hotels.com LP., 773
F.3d 1245, 1257 (Fed. Cir. 2014) (claims at issue being "necessarily rooted
in computer technology in order to overcome a problem specifically arising
in the realm of computer networks") and Enfzsh ( claims at issue being
"directed to a specific implementation of a solution to a problem in the
software arts"), Appellants merely address a business problem through the
use of generic computer implementation that does not add any meaningful
limitations to transform the abstract idea.
Accordingly, we sustain the rejection of claims 1-20 under 35 U.S.C.
§ 101.
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DECISION
The rejection under 35 U.S.C. § 101 of claims 1-20 is 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).
AFFIRMED
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