Ex Parte Mecane

Patent Trials and Appeals Board

Jun 27, 2019

14663133 - (D) (P.T.A.B. Jun. 27, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/663,133 03/19/2015
35811 7590 07/01/2019
IP GROUP OF DLA PIPER LLP (US)
ONE LIBERTY PLACE
1650 MARKET ST, SUITE 5000
PHILADELPHIA, PA 19103
FIRST NAMED INVENTOR
Joseph Mecane
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.
NGI-14-1119CON-DIV1 1003
EXAMINER
SHRESTHA, BIJENDRA K
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
07/01/2019 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):
pto. phil@dlapiper.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JOSEPH MECANE
Appeal 2018-004083 1
Application 14/663,133
Technology Center 3600
Before ELENI MANTIS MERCADER, NORMAN H. BEAMER, and
ADAM J. PYONIN, Administrative Patent Judges.
PYONIN, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134(a). We have
jurisdiction under 35 U.S.C. § 6(b ).
We AFFIRM.
1 NYSE Group, Inc. is listed as the real party in interest. App. Br. 1.
Appeal2018-004083
Application 14/663,133
STATEMENT OF THE CASE
Introduction
The Application is directed to "facilitating retail price improvement of
a security order" by "filling ... at least a portion of the retail order at the
improved price using [a] contra-side non-displayed order." Abstract.
Claims 1-4, 6-8, 11, and 12 are pending, of which claim 1 is independent.
App. Br. 20-21. Claim 1 is reproduced below for reference ( emphasis and
bracketed element numbering added):
1. A machine-readable, non-transitory tangible medium
storing processor-issuable instructions to cause a computer
processor to:
[l] monitor, by a retail aggregator component of said
instructions, a plurality of orders from a plurality of sources for
specific order characteristics, said monitoring occurring at least
one of in real-time and periodically;
[2] receive an electronic retail order for a security from at least
one of said plurality of sources;
[3] analyze, by the retail aggregator component, the electronic
retail order and verify that said electronic retail order is an order
that is not from a trading algorithm, said analyze step comprising
at least one of:
(a) verifying that the electronic retail order does not violate
a threshold of first predefined retail characteristics among said
monitored specific order characteristics, the first predetermined
retail characteristics comprising at least one of (i) a number of
orders per minute, (ii) a realized spread, (iii) an average order
size, and (iv) a cancellation rate; and
(b) verifying that a customer placing the electronic retail
order does not violate a threshold of second predefined retail
characteristics among said monitored specific order
characteristics, the second predetermined retail characteristics
comprising at least one of (i) a buy/sell ratio, (ii) an average order
size, (iii) a cancellation rate, (iv) a rapidity of message flow, (v)
a performance measure adjusted for risk, and (vi) a realized
spread;
2
Appeal2018-004083
Application 14/663,133
[4] receive a contra-side non-displayed order for the security,
the contra-side non-displayed order having an improved price
relative to a benchmark, the improved price available only to
retail orders;
[5] fill at least a portion of the electronic retail order at the
improved price, responsive to the received contra-side non-
displayed order when the electronic retail order is verified; and
[ 6] disqualify the electronic retail order when the electronic
retail order is not verified by the retail aggregator component,
said disqualifying comprising denying filling of the electronic
retail order at the improved price of the received contra-side non-
displayed order.
Rejection2
Claims 1-4, 6-8, 11, and 12 stand rejected under 35 U.S.C. § 101 as
being directed to a judicial exception to patent eligibility without
significantly more. Final Act. 4.
ANALYSIS
We have reviewed the Examiner's rejection in light of Appellant's
arguments. Arguments Appellant could have made but chose not to make
are deemed to be waived. See 37 C.F.R. § 41.37(c)(l)(iv). Appellant does
not separately argue the claims. See App. Br. 4-19. We select claim 1 as
representative. See 37 C.F.R. §41.37(c)(l)(iv).
The Examiner determines claim 1 is patent ineligible under 35 U.S.C.
§ 101 because it is directed to an abstract idea and does not include
additional elements that are sufficient to amount to significantly more than
the abstract idea. See Final Act. 4-5; see also Alice Corp. v. CLS Banklnt'l,
2 The rejection of claims 1-4, 6-8, 11, and 12 under 35 U.S.C. § 112, first
paragraph, was withdrawn in the Answer. See Final Act. 2-3; Answer 3.
3
Appeal2018-004083
Application 14/663,133
573 U.S. 208,217 (2014) (describing the two-step framework "for
distinguishing patents that claim laws of nature, natural phenomena, and
abstract ideas from those that claim patent-eligible applications of those
concepts.").
After the mailing of the Answer and the filing of the Briefs in this
case, the USPTO published revised guidance on the application of§ 101
("Guidance"). See USPTO's 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) ("Memorandum"). Pursuant to the
Guidance "Step 2A," the office first looks to whether the claim recites:
(1) Prong One: any judicial exceptions, including certain
groupings of abstract ideas (i.e., mathematical concepts, certain
methods of organizing human activity such as a fundamental
economic practice, or mental processes); and
(2) Prong Two: additional elements that integrate the judicial
exception into a practical application (see MPEP § 2106.05(a)-
(c), (e)-(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, does the Office then (pursuant to the
Guidance "Step 2B") look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that
are not "well-understood, routine, conventional" in the field (see
MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
See Memorandum.
We are not persuaded the Examiner's rejection is in error. We adopt
the Examiner's findings and conclusions as our own, to the extent consistent
4
Appeal2018-004083
Application 14/663,133
with our analysis herein. We add the following primarily for emphasis and
clarification with respect to the Guidance.
I. Step 2A
Appellant argues "the ordered combination of claimed features,
including the verification and disqualifying functions, provides a technical
improvement upon prior art processes and systems." App. Br. 8. Appellant
contends that the "claims incorporate unconventional features into the
network that effectively improves the speed, accuracy and efficiency of
filling electronic orders, which in tum increases the liquidity in the
network." App. Br. 11, citing Spec. ,-J,-J 13-14.
We are not persuaded of Examiner error.
Prong One
Pursuant to the Guidance, we agree with the Examiner that claim 1
recites a "method for filling a portion of the retail order at the improved
price using the contra-side non-displayed order after verification that the
retail order is not from a trading algorithm and does not violate first and
second predefined retail characteristics," (Final Act. 5) ( emphasis omitted),
which "is considered a method of fundamental economic practices" (Final
Act. 6) ( emphasis omitted), because the claim recites filling an order for
securities. See Spec. ,-J 13; see also Memorandum, Section III (A)(l) (Prong
One: Evaluate Whether the Claim Recites a Judicial Exception), 84 Fed.
Reg. at 54. Specifically, claim 1 recites limitations [l], [2], [3] (including
elements (a) and (b)), [4], [5], and [6]. These limitations are classified by
the Guidance as steps of "mitigating risk[,] ... sales activities or
5
Appeal2018-004083
Application 14/663,133
behaviors[,] business relations[,] ... and following rules or instructions,"
which are "fundamental economic principles or practices," "commercial or
legal interactions," and "managing personal behavior or relationships or
interactions between people." Memorandum at 52. Pursuant to the
Guidance, such limitations are the abstract concept of"[ c Jertain methods of
organizing human activity." Id.
Prong Two
Appellant contends that the "retail aggregator component [] verifies
and only fills and processes verified retail orders" and
[b ]y rejecting and denying processing of so many algorithm-
generated orders, the claimed invention significantly reduces
the quantity and volume of trades it needs to process, thereby
improving the overall efficiency of the system.
App. Br. 6 ( emphasis omitted). Appellant contends that "this results in _!!
reduction of over 90°/o of processing requirements." App. Br. 6.
We are not persuaded the Examiner's rejection is in error pursuant to
Step 2A, Prong Two of the Guidance. Appellant has not shown the claim
includes additional elements that improve the underlying computer, or other
technology. See Intellectual Ventures I LLC v. Capital One Bank (USA),
792 F.3d 1363, 1370 (Fed. Cir. 2015) ("[M]erely adding computer
functionality to increase the speed or efficiency of the process does not
confer patent eligibility on an otherwise abstract idea."). Moreover,
Appellant's purportedly improved abstract concept is still an abstract
concept under the Guidance. See Synopsys, Inc. v. Mentor Graphics Corp.,
839 F.3d 1138, 1151 (Fed. Cir. 2016) (holding that "a claim for a new
abstract idea is still an abstract idea.") ( emphasis omitted). That is,
6
Appeal2018-004083
Application 14/663,133
identifying and denying orders is part of the recited abstract idea as
discussed above. See Ans. 6-7. As the argued elements are part of the
abstract idea, they are not additional elements that integrate the identified
abstract idea into a practical application. See Memorandum, 84 Fed. Reg.
54-55 ("evaluate integration into a practical application by: (a) Identifying
whether there are any additional elements recited in the claim beyond the
judicial exception(s)").
Accordingly, we determine the claim does not integrate the judicial
exception into a practical application. See Memorandum, 84 Fed. Reg. at
54. We determine the "claim recites a judicial exception and fails to
integrate the exception into a practical application," therefore we proceed
with "further analysis pursuant to the second step of the Alice/ Mayo test
(USPTO Step 2B)." Memorandum, 84 Fed. Reg. at 51.
II. Step 2B
Appellant argues the Examiner errs in determining the claims do not
recite an inventive concept that amounts to significantly more than the
judicial exception itself. See Reply Br. 7-10; see also Final Act. 8-12.
We disagree. The "claimed series of unconventional functions"
argued by Appellant are part of the recited judicial exception itself, as
discussed above. Reply Br. 9; see also Memorandum at 56 ("[E]valuate the
additional elements individually and in combination" in step 2B.);
Memorandum fn. 24 ("USPTO guidance uses the term 'additional elements'
to refer to claim features, limitations, and/or steps that are recited in the
claim beyond the identified judicial exception.") ( emphasis omitted).
Regarding the claimed retail aggregator component, we agree with the
7
Appeal2018-004083
Application 14/663,133
Examiner that the limitation is well-understood, routine, and conventional.
See Final Act. 9, Ans. 14-15; Fig. 5, Spec. ,i,i 41-91; Alice, 573 U.S. at 226
("But what petitioner characterizes as specific hardware ... is purely
functional and generic. Nearly every computer will include a
'communications controller' and 'data storage unit' capable of performing
the basic calculation, storage, and transmission functions required by the
method claims."); OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359,
1363 (Fed. Cir. 2015) (Claims reciting, inter alia, sending messages over a
network, gathering statistics, using a computerized system to automatically
determine an estimated outcome, and presenting offers to potential
customers found to merely recite "well-understood, routine conventional
activit[ies]."). Accordingly, we agree with the Examiner that claim 1 is
patent ineligible. See Final Act. 8-12.
DECISION
The Examiner's decision rejecting claims 1-4, 6-8, 11, and 12 is
affirmed.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § l .136(a)(l )(iv).
AFFIRMED
8