Ex Parte Naylor et al

Board of Patent Appeals and Interferences

Dec 18, 2009

11529018 (B.P.A.I. Dec. 18, 2009)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________________
BEFORE THE BOARD OF PATENT APPEALS
AND INTERFERENCES
____________________
Ex parte MARK JEREMY MELVILLE NAYLOR,
ALFRED NEIL FLETCHER,
and HARRY JUSTIN BARMAN
____________________
Appeal 2009-005875
Application 11/529,018
Technology Center 3600
____________________
Decided: December 18, 2009
____________________

Before JOESPH A. FISCHETTI, BIBHU R. MOHANTY, and
KEVIN F. TURNER, Administrative Patent Judges.

TURNER, Administrative Patent Judge.

DECISION ON APPEAL

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Application 11/529,018

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STATEMENT OF CASE
Appellants seek our review under 35 U.S.C. § 134 of the final
rejections of claims 1-11. We have jurisdiction under 35 U.S.C. § 6(b).

SUMMARY OF THE DECISION
We AFFIRM, and add a new ground of rejection under 35 U.S.C.
§101.1

THE INVENTION
Appellants’ claimed invention relates to a method and system for
trading commodities and securities by aggregating and processing trades
having similar transactional characteristics. (Spec. p. 1).
Independent claim 1, which is deemed to be representative, reads as
follows:
1. A method of managing commodities or
securities trades between a single counterparty and a
brokerage firm, said method comprising the steps of:
[a] processing a plurality of trades between said
single counterparty and said firm;
[b] identifying trades processed in step (a) that
have similar characteristics as related trades;
[c] combining said related trades into at least one
aggregate trade; and
[d] settling each of said at least one aggregate trade
as a single trade with said single counterparty.2

1 Our decision will make reference to the Appellants’ Appeal Brief (“Br.,”
filed Feb. 26, 2008) and the Examiner’s Answer (“Ans.,” mailed May 13,
2008).
2 For purposes of clarity, we have relisted the method steps as a, b, c, and d,
rather than as reproduced in Appellants’ Brief as method steps e, f, g, and h.
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THE REJECTION
The prior art relied upon by the Examiner in rejecting the claims on
appeal is:
Breen et al. US 6,615,188 B1 Sep. 2, 2003

The Examiner rejected claims 1-11 under 35 U.S.C. § 102(e) as being
as being anticipated by Breen.
Rather than repeat the arguments of Appellants or the Examiner, we
make reference to the Brief and the Answer for their respective details.
Only those arguments actually made by Appellants have been considered in
this decision. Arguments that Appellants did not make in the Brief have not
been considered and are deemed to be waived. See 37 C.F.R.
§ 41.37(c)(1)(vii).

ISSUE
Have Appellants shown the Examiner erred in finding that Breen
discloses managing commodities or securities trades related to a single
counterparty, as recited in claims 1 and 7?

FINDINGS OF FACT
The record supports the following findings of fact (FF) by at least a
preponderance of the evidence. In re Caveney, 761 F.2d 671, 674 (Fed. Cir.
1985) (explaining the general evidentiary standard for proceedings before
the Office).

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1. Breen is directed to an online trade aggregating system which
maintains separate accounts for a plurality of account holders and trades are
aggregated over multiple holders prior to being submitted to a trading
system or an exchange. (col. 1, ll. 5-10).
2. Breen describes submitting the aggregated trades to an exchange
for execution as a single transaction in the name of the brokerage or broker-
dealer. (col. 5, ll. 39-43).
3. Breen discloses, “[t]he aggregated trade might only comprise one
order, as might be the case for thinly traded securities, but preferably, many
orders can be aggregated into a single trade.” (col. 5, ll. 53-56).
4. Breen discloses, “if only one order is received for a given security
in a given type, or direction (the most common directions are buy or sell),
one unaggregated trade might be made to effect that order.” (col. 10, ll. 21-
25).
5. Independent claim 8 of Breen discloses, “a method of receiving and
executing security orders from one or more investors comprising the steps
of. . . ” (col. 15, ll. 43-44, emphasis added).
6. In Breen, the method of claim 8 includes the steps of:
a) receiving a plurality of security orders from the one or
more investors over the Internet wherein the type of
security orders includes at least a plurality of buy orders
for the same security wherein the plurality of buy orders
are specified by the one or more investors in dollar
amounts and include an order to purchase at least a
fractional share of the security;
b) combining the plurality of security orders by same
type and same issuer into one or more combined security
orders; and
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c) executing the one or more combined security orders as
a single trade or transaction per combined security order
through the exchange.
(col. 15, ll. 46-59).

PRINCIPLES OF LAW
“A claim is anticipated only if each and every element as set forth in
the claim is found, either expressly or inherently described, in a single prior
art reference.” Verdegaal Bros., Inc. v. Union Oil Co., 814 F.2d 628, 631
(Fed. Cir. 1987).

ANALYSIS
Claims 1-11 rejected under 35 U.S.C. § 102(e) as being anticipated by
Breen.
Independent claims 1 and 7
Appellants argue that, “Breen discloses the concept of aggregating,
processing and settling related trades among multiple counterparty accounts
and a brokerage firm.” (Br. 6). Whereas Appellants’ claims 1 and 7,
“aggregate, process and settle a plurality of related securities trades between
a single counterparty account and a brokerage firm.” (Br. 6). Thus,
Appellants argue whether Breen discloses managing commodities or
securities trades related to a single counterparty, as recited in claims 1 and 7.
We agree with Appellants’ characterization that Breen discloses the
concept of aggregating, processing and settling related trades. (Br. 6).
However, we are not persuaded by Appellants’ argument that Breen does not
disclose aggregating, processing and settling related trades between a single
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counterparty and a brokerage firm. While the disclosure of Breen may not
explicitly refer to an investor as a counterparty, we find the two to be
equivalent and representative of the same party. Appellants agree that the
scope and content of the present application and the prior art are the same
except for the fact that Breen aggregates, processes and settles related trades
among multiple counterparty accounts and a brokerage firm, as opposed to
Appellants’ claims 1 and 7, which “aggregate, process and settle a plurality
of related securities trades between a single counterparty account and a
brokerage firm.” (Br. 6). Given Appellants’ position, we need not make any
findings of fact to this regard. Thus, we are not persuaded by Appellants’
argument and look to the language of claim 8 of Breen which makes it clear
that Breen’s method “receive[es] and execute[es] security orders from one or
more investors . . .” (emphasis added) (FF 5, 6). Therefore, we find Breen
discloses managing commodities or securities trades related to a single
counterparty, as recited in claims 1 and 7. Accordingly, Appellants’
argument is not persuasive as to error in the rejection.
Additionally, Appellants argue that, “. . . the Examiner is interpreting
Breen as reading onto the invention substantially as claimed.” (Br. 11). We
are not persuaded by Appellants’ argument and find that although the
Examiner may have responded to arguments using such language, Breen
does indeed disclose managing commodities or securities trades related to a
single counterparty, as discussed supra. Accordingly, Appellants’ argument
is not persuasive as to error in the rejection.

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Claims 2 6 and 8-11
Appellants do not separately argue claims 2-6 and 8-11 depending
from claims 1 and 7 respectively, and so have not sustained their burden of
showing that the Examiner erred in rejecting claims 2-6 and 8-11 under 35
U.S.C. § 102(e) as anticipated by Breen for the same reasons we found as to
claims 1 and 7, supra.

NEW GROUND
Pursuant to 37 C.F.R. § 41.50(b), we enter a new ground of rejection.
We reject claims 1-6 under 35 U.S.C. § 101 as being directed to non-
statutory subject matter. We take claim 1 as representative.
The issue is whether the process as claimed is patent eligible under 35
U.S.C. §101.
Claim 1 describes a method of managing commodities or securities
trades between a single counterparty and a brokerage firm, comprising the
steps of 1) processing a plurality of trades between said single counterparty
and said firm, 2) identifying trades processed in step 1) that have similar
characteristics as related trades, 3) combining said related trades into at least
one aggregate trade, and 4) settling each of said at least one aggregate trade
as a single trade with said single counterparty.
The method claimed recites steps and is thus nominally drawn to a
process. However:
the proper inquiry under §101 is not whether the process claim
recites sufficient ‘physical steps,’ but rather whether the claim
meets the machine-or-transformation test. As a result, even a
claim that recites ‘physical steps’ but neither recites a particular
machine or apparatus, nor transforms any article into a different
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state or thing, is not drawn to patent-eligible subject matter.
Conversely, a claim that purportedly lacks any ’physical steps’
but is still tied to a machine or achieves an eligible
transformation passes muster under § 101.

In re Bilski, 545 F.3d 943, 961 (Fed. Cir. 2008) (en banc).
Here, the claimed method is not tied to a machine nor does it
transform a particular article into a different state or thing. Claim 1 does not
recite a machine or apparatus. The method of claim 1 also does not
transform a particular article into a different state or thing. Dependent
claims 2-6 do not cure this deficiency.
Therefore, we reject claims 1-6 under 35 U.S.C. § 101 as being drawn
to nonpatentable subject matter.

CONCLUSION OF LAW
We conclude that Appellants have not shown the Examiner erred in
finding that Breen discloses managing commodities or securities trades
related to a single counterparty, as recited in claims 1 and 7. Additionally,
we enter a new ground of rejection of claims 1-6 under 35 U.S.C. § 101.

DECISION
We AFFIRM the rejection of claims 1-11 and we enter a new ground
of rejection of claims 1-6 under 35 U.S.C. § 101.
This decision contains a new ground of rejection pursuant to 37
C.F.R. § 41.50(b) (effective September 13, 2004, 69 Fed. Reg. 49960
(August 12, 2004), 1286 Off. Gaz. Pat. Office 21 (September 7, 2004)). 37
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C.F.R. § 41.50(b) provides “[a] new ground of rejection pursuant to this
paragraph shall not be considered final for judicial review.”
37 C.F.R. § 41.50(b) also provides that the appellant, WITHIN TWO
MONTHS FROM THE DATE OF THE DECISION, must exercise one of
the following two options with respect to the new ground of rejection to
avoid termination of the appeal as to the rejected claims:
(1) Reopen prosecution. Submit an appropriate
amendment of the claims so rejected or new evidence
relating to the claims so rejected, or both, and have the
matter reconsidered by the examiner, in which event the
proceeding will be remanded to the examiner . . . .

(2) Request rehearing. Request that the proceeding be
reheard under § 41.52 by the Board upon the same
record. . . .

Should the Appellant elect to prosecute further before the Examiner
pursuant to 37 C.F.R. § 41.50(b)(1), in order to preserve the right to seek
review under 35 U.S.C. §§ 141 or 145 with respect to the affirmed rejection,
the effective date of the affirmance is deferred until conclusion of the
prosecution before the Examiner unless, as a mere incident to the limited
prosecution, the affirmed rejection is overcome.
If the Appellant elects prosecution before the Examiner and this does
not result in allowance of the application, abandonment or a second appeal,
this case should be returned to the Board of Patent Appeals and Interferences
for final action on the affirmed rejection, including any timely request for
rehearing thereof.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a).
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AFFIRMED
New ground of rejection-37 C.F.R. § 41.50(b) (2008)

ack

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