Ex Parte Lo et al

Board of Patent Appeals and Interferences

Apr 30, 2009

09526633 (B.P.A.I. Apr. 30, 2009)

UNITED STATES PATENT AND TRADEMARK OFFICE 1
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3
BEFORE THE BOARD OF PATENT APPEALS 4
AND INTERFERENCES 5
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7
Ex parte ANDREW LO, TUNG CHAN, and TOMASO POGGIO 8
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Appeal 2009-0336 11
Application 09/526,633 12
Technology Center 3600 13
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Decided:1 April 30, 2009 16
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Before HUBERT C. LORIN, ANTON W. FETTING, and 19
JOSEPH A. FISCHETTI, Administrative Patent Judges. 20
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FETTING, Administrative Patent Judge. 22
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DECISION ON APPEAL 25
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27
STATEMENT OF THE CASE28

1 The two month time period for filing an appeal or commencing a civil
action, as recited in 37 C.F.R. § 1.304, begins to run from the decided date
shown on this page of the decision. The time period does not run from the
Mail Date (paper delivery) or Notification Date (electronic delivery).

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Andrew Lo, Tung Chan, and Tomaso Poggio (Appellants) seek review under 1
35 U.S.C. § 134 of a final rejection of claims 1-6 and 12, the only claims pending 2
in the application on appeal. 3
We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b) (2002). 4
5
We REVERSE. 6
The Appellants invented a way of managing the operations of a specialist in 7
creating a market on an exchange for select assets among plural trading entities 8
(Specification 1:8-10). 9
An understanding of the invention can be derived from a reading of 10
exemplary claim 1, which is reproduced below [bracketed matter and some 11
paragraphing added]. 12
1. A data processing system for use in establishing operating 13
parameters for use in supporting the operations of a securities market 14
by implementing an Electronic Market-Maker, said system 15
comprising 16
[1] a data processor and: 17
[2] a Market Quality Control Module 18
for receiving inputs including trade orders and select market 19
conditions, 20
and based thereon, generating trading recommendations 21
with a primary objective of maintaining market quality; 22
[3] an Inventory Control Module 23
for assessing market conditions and a position of said market 24
maker in one or more select securities, 25
and based thereon generating trading recommendations to 26
adjust inventory levels 27
to enhance market maker position; 28
[4] a Speculation Module 29
for assessing market conditions during past and current time 30
periods, 31
and generating trading recommendations; and 32
[5] an Arbitration Module 33
for receiving trading recommendations from 34
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said Market Quality Control Module, 1
Inventory Control Module, and 2
Speculation Control Module, 3
[6] wherein said Arbitration Module 4
resolves any conflicts between said received recommendations 5
and 6
delivers a buy or sell command, 7
[7] wherein said data processing system 8
receives said command and 9
executes one or more trades, and 10
[8] wherein said 11
Market Quality Control Module, 12
Inventory Control Module[,] 13
Speculation Module, 14
Arbitration Module 15
comprise software implemented by said data processor and 16
stored on a computer-readable medium accessible by said data 17
processor. 18
19
This appeal arises from the Examiner’s Final Rejection, mailed November 20
17, 2006. The Appellants filed an Appeal Brief in support of the appeal on 21
December 17, 2007. An Examiner’s Answer to the Appeal Brief was mailed on 22
March 18, 2008. A Reply Brief was filed on April 24, 2008. 23
24
PRIOR ART 25
The Examiner relies upon the following prior art: 26
Editors, CBQ, Inc. Applies for Foreign Protection of Its Patent Pending 27
Technology, Business Wire 1 (Jan. 28, 1999)(hereinafter “Business Wire”). 28
29
REJECTION 30
Claims 1-6 and 12 stand rejected under 35 U.S.C. § 103(a) as unpatentable 31
over Business Wire. 32
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ISSUES 1
The issue of whether the Appellants have sustained their burden of showing 2
that the Examiner erred in rejecting claims 1-6 and 12 under 35 U.S.C. § 103(a) as 3
unpatentable over Business Wire primarily turns on whether the art describes or 4
suggests the modules enumerated in claim 1. 5
6
FACTS PERTINENT TO THE ISSUES 7
The following enumerated Findings of Fact (FF) are believed to be 8
supported by a preponderance of the evidence. 9
Business Wire 10
01. Business Wire is directed to describing an internet market maker 11
product known as www.bid4it.com. (Business Wire 1:Abstract.) 12
02. Bid4it is a completely automated electronic marketplace responding to 13
supply and true market price for products based on the open market 14
interaction between Bidders and Sellers (Business Wire 2:First full ¶). 15
Facts Related To Differences Between The Claimed Subject Matter And The 16
Prior Art 17
03. Business Wire does not describe any characteristics of a market maker 18
suggesting the need for maintaining market quality, enhancing market 19
maker positions, or resolving conflicts between market quality, market 20
maker positions, and speculative trades based on past and current time 21
periods. 22
Facts Related To The Level Of Skill In The Art 23
04. Neither the Examiner nor the Appellants has addressed the level of 24
ordinary skill in the pertinent arts of systems analysis and programming, 25
market making, and financial securities system design. We will 26
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therefore consider the cited prior art as representative of the level of 1
ordinary skill in the art. See Okajima v. Bourdeau, 261 F.3d 1350, 1355 2
(Fed. Cir. 2001) (“[T]he absence of specific findings on the level of skill 3
in the art does not give rise to reversible error ‘where the prior art itself 4
reflects an appropriate level and a need for testimony is not shown’”) 5
(quoting Litton Indus. Prods., Inc. v. Solid State Sys. Corp., 755 F.2d 6
158, 163 (Fed. Cir. 1985)). 7
Facts Related To Secondary Considerations 8
05. There is no evidence on record of secondary considerations of non-9
obviousness for our consideration. 10
11
PRINCIPLES OF LAW 12
Claim Construction 13
During examination of a patent application, pending claims are given their 14
broadest reasonable construction consistent with the specification. In re Prater, 15
415 F.2d 1393, 1404-05 (CCPA 1969); In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 16
1359, 1369 (Fed. Cir. 2004). 17
Limitations appearing in the specification but not recited in the claim are not 18
read into the claim. E-Pass Techs., Inc. v. 3Com Corp., 343 F.3d 1364, 1369 (Fed. 19
Cir. 2003) (claims must be interpreted “in view of the specification” without 20
importing limitations from the specification into the claims unnecessarily). 21
Although a patent applicant is entitled to be his or her own lexicographer of 22
patent claim terms, in ex parte prosecution it must be within limits. In re Corr, 23
347 F.2d 578, 580 (CCPA 1965). The applicant must do so by placing such 24
definitions in the specification with sufficient clarity to provide a person of 25
ordinary skill in the art with clear and precise notice of the meaning that is to be 26
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construed. See also In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994) (although 1
an inventor is free to define the specific terms used to describe the invention, this 2
must be done with reasonable clarity, deliberateness, and precision; where an 3
inventor chooses to give terms uncommon meanings, the inventor must set out any 4
uncommon definition in some manner within the patent disclosure so as to give 5
one of ordinary skill in the art notice of the change). 6
Obviousness 7
A claimed invention is unpatentable if the differences between it and the 8
prior art are “such that the subject matter as a whole would have been obvious at 9
the time the invention was made to a person having ordinary skill in the art.” 35 10
U.S.C. § 103(a) (2000); KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 399 (2007); 11
Graham v. John Deere Co., 383 U.S. 1, 13-14 (1966). 12
In Graham, the Court held that the obviousness analysis is bottomed on 13
several basic factual inquiries: “[(1)] the scope and content of the prior art are to be 14
determined; [(2)] differences between the prior art and the claims at issue are to be 15
ascertained; and [(3)] the level of ordinary skill in the pertinent art resolved.” 383 16
U.S. at 17-18. See also KSR, 550 U.S. at 406. “The combination of familiar 17
elements according to known methods is likely to be obvious when it does no more 18
than yield predictable results.” Id. at 1739. 19
“When a work is available in one field of endeavor, design incentives and 20
other market forces can prompt variations of it, either in the same field or a 21
different one. If a person of ordinary skill can implement a predictable variation, § 22
103 likely bars its patentability.” Id. at 417. 23
“For the same reason, if a technique has been used to improve one device, 24
and a person of ordinary skill in the art would recognize that it would improve 25
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similar devices in the same way, using the technique is obvious unless its actual 1
application is beyond his or her skill.” Id. 2
“Under the correct analysis, any need or problem known in the field of 3
endeavor at the time of invention and addressed by the patent can provide a reason 4
for combining the elements in the manner claimed.” Id. at 420. 5
6
ANALYSIS 7
Claims 1-6 and 12 rejected under 35 U.S.C. § 103(a) as unpatentable over 8
Business Wire. 9
Claim 1 is the sole independent claim. The Examiner found that Business 10
Wire described an automatic market maker and expressed the belief that such a 11
market maker would also include the modules listed in claim 1 (Answer 3-5). The 12
Appellants contend that Business Wire does not describe any of the modules 13
recited by claim 1 and that the Examiner admits as much (Br. 14-17). We agree 14
with the Appellants. 15
Claim 1 recites a market quality control module to maintain market quality, 16
an inventory control module to adjust inventory levels to enhance positions, a 17
speculation module to make recommendations based on market conditions, and an 18
arbitration module to resolve conflicts among the first three modules. 19
Business Wire does not describe these modules or any characteristics of a 20
market maker suggesting the need for maintaining market quality, enhancing 21
market maker positions, or resolving conflicts between market quality, market 22
maker positions, and speculative trades based on past and current time periods (FF 23
03). There is no evidence in the rejection that shows that one of ordinary skill 24
would have known how to implement such functions in a computer system even if 25
the functions themselves were described. The Examiner simply asserts a belief 26
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that one of ordinary skill would determine that the functions of a market maker 1
would be performed by the product described by Business Wire and that the 2
functions enumerated in claim 1 are those of a market maker (Answer 8). 3
The Examiner’s beliefs are not at issue, what the evidence shows is at issue. 4
The Examiner has not applied any evidence in the rejection of what a market 5
maker does, or how to implement such activity in a system such as that in Business 6
Wire, as it would relate to the claim limitations. 7
The remaining claims depend from claim 1 and accordingly incorporate the 8
limitations from claim 1. The Appellants have sustained their burden of showing 9
that the Examiner erred in rejecting claims 1-6 and 12 under 35 U.S.C. § 103(a) as 10
unpatentable over Business Wire. 11
12
CONCLUSIONS OF LAW 13
The Appellants have sustained their burden of showing that the Examiner 14
erred in rejecting claims 1-6 and 12 under 35 U.S.C. § 103(a) as unpatentable over 15
the prior art. 16
DECISION 17
To summarize, our decision is as follows: 18
• The rejection of claims 1-6 and 12 under 35 U.S.C. § 103(a) as unpatentable 19
over Business Wire is not sustained. 20
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REVERSED 22
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