Ex Parte Otero et al

Patent Trial and Appeal Board

Feb 15, 2018

09823125 (P.T.A.B. Feb. 15, 2018)

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.
09/823,125 03/30/2001 Hernan G. Otero GOLDl 1-00078 6818
132787 7590
Docket Clerk-GOLD
P.O. Drawer 800889
Dallas, TX 75380
EXAMINER
OYEBISI, OJO O
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
02/20/2018 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):
patents @ munckwilson. com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte HERNAN G. OTERO, STEVEN B. HORN,
and JOHN TUMILTY
Appeal 2016-008763
Application 09/823,125
Technology Center 3600
Before ALLEN R. MacDONALD, AMBER L. HAGY, and
PHILLIP A. BENNETT, Administrative Patent Judges.
HAGY, Administrative Patent Judge.
DECISION ON APPEAL
Appellants1 appeal under 35 U.S.C. § 134(a) from the Examiner’
Final Rejection of claims 1—6 and 15—21, which are all of the pending
claims.2 We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 Appellants identify the real party in interest as Goldman, Sachs & Co.
(App. Br. 2.)
2 Claims 7—14 have been canceled. (App. Br. 26 (Claims App’x).)
Appeal 2016-008763
Application 09/823,125
STATEMENT OF THE CASE
Introduction
According to Appellants, “[t]he present invention provides apparatus,
methods and articles of manufacture for open-ended construction and
execution of computerized transaction processes.” (Spec. 4.) Appellants’
Specification describes, in particular, software for computerized trading that
comprises market-specific “plug-ins” that are used “for construction,
modification and alteration of trading procedure execution.” (Id. )
According to Appellants’ Specification, the term “plug-in” is “a general term
for data, plug-ins, applications, processes, and algorithms.” (Id. at 6.)
Exemplary Claim
Claims 1, 6, and 21 are independent. Claim 1, reproduced below, is
exemplary of the claimed subject matter:
1. A processor-implemented trading method, comprising:
receiving via a processor a plurality of trade parameters,
the plurality of trade parameters characteristic of a desired trade;
receiving a selection of a trade implementation plug-in;
receiving a market identifier corresponding to a market;
loading the selected trade implementation plug-in in a
logic engine;
selecting a market-specific plug-in associated with the
market identifier;
loading the market-specific plug-in in the logic engine;
maintaining the market-specific plug-in at the logic engine
for a static period of time;
providing the plurality of trade parameters characteristic
of the desired trade to the logic engine;
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determining an order strategy based on the plurality of
trade parameters by executing the trade implementation plug-in
and the market-specific plug-in;
executing the order strategy; and
providing order data based on the order strategy for
display in real time on a graphical user interface.
Rejection
Claims 1—6 and 15—21 stand rejected under 35 U.S.C. § 101 as
directed to patent-ineligible subject matter. (Final Act. 2—5.)
ANALYSIS
A. Section 101 Rejection
Patent eligibility is a question of law. Dealertrack, Inc. v. Huber, 674
F.3d 1315, 1333 (Fed. Cir. 2012). The Supreme Court has set forth an
analytical “framework for distinguishing patents that claim laws of nature,
natural phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134
S. Ct. 2347, 2355 (2014) (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 71—73 (2012)). In the first step of the analysis, we
determine whether the claims at issue are “directed to” a judicial exception,
such as an abstract idea. Alice, 134 S. Ct. at 2355. If not, the inquiry ends.
Thales Visionix Inc. v. U.S., 850 F.3d 1343, 1346 (Fed. Cir. 2017); Enfish,
LLC v. Microsoft Corp., 822 F.3d 1327, 1339 (Fed. Cir. 2016). If the claims
are determined to be directed to an abstract idea, then we consider under step
two whether the claims contain an “inventive concept” sufficient to
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‘“transform the nature of the claim’ into a patent-eligible application.”
Alice, 134 S. Ct. at 2355 (quotations and citation omitted).
Noting that “the two stages involve overlapping scrutiny of the
content of the claims,” the Federal Circuit has described “the first-stage
inquiry” as “looking at the ‘focus’ of the claims, their ‘character as a
whole,”’ and “the second-stage inquiry (where reached)” as “looking more
precisely at what the claim elements add—specifically, whether, in the
Supreme Court’s terms, they identify an ‘inventive concept’ in the
application of the ineligible matter to which (by assumption at stage two) the
claim is directed.” Electric Power Grp., LLC v. Alstom S.A., 830 F.3d 1350,
1353 (Fed. Cir. 2016). In considering whether a claim is directed to an
abstract idea, we acknowledge, as did the Court in Mayo, that “all inventions
at some level embody, use, reflect, rest upon, or apply laws of nature, natural
phenomena, or abstract ideas.” Mayo, 566 U.S. at 71. We, therefore, look
to whether the claims 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. See
Enfish, 822 F.3d at 1336.
Step One: Whether the Claims Are Directed to a Patent-Ineligible
Concept (Abstract Idea)
Here, in rejecting the pending claims under § 101, the Examiner
analyzes the claims using the Mayo/Alice two-step framework, consistent
with the guidance set forth in the USPTO’s “2014 Interim Guidance on
Patent Subject Matter Eligibility,” 79 Fed. Reg. 74618 (Dec. 16, 2014), in
effect at the time the Final Office Action was mailed. (Final Act. 2-4.)
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Addressing the first step, the Examiner finds:
In the instant case, the claims are directed towards the abstract
idea of constructing and executing transaction processes and
programs. Constructing and executing transaction processes and
programs is a fundamental economic practice; and as a result,
claims constructing and executing transaction processes and
programs include an abstract idea.
(Final Act. 3.) The Examiner further finds “constructing and executing
transaction processes and programs” corresponds “to concepts identified as
abstract ideas by the courts, such as formulation and trading of risk” as in
Alice. (Ans. 3.) We agree with the Examiner’s findings and adopt them as
our own.
Appellants present several arguments against the Examiner’s
determination in step one of the Alice analysis, none of which we find
persuasive of Examiner error. In particular, Appellants argue “the claims at
issue here do not merely recite the steps one would ordinarily perform to
construct and execute transaction processes and programs.” (App. Br. 11.)
Appellants appear to be arguing that their claims are not directed to an
abstract idea because they recite a novel invention. Although the novelty of
the claimed invention is not before us, even if novel and nonobvious, a claim
directed to a purely abstract idea is, nonetheless, patent-ineligible. See
Mayo, 566 U.S. at 90. Thus, an abstract idea does not transform into an
inventive concept just because the Examiner has not cited prior art that
discloses or suggests it. Indeed, “[t]he ‘novelty’ of any element or steps in a
process, or even of the process itself, is of no relevance in determining
whether the subject matter of a claim falls within the § 101 categories of
possibly patentable subject matter.” Diamond v. Diehr, 450 U.S. 175,
188-189 (1981).
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Appellants further argue the claimed invention “represents] a modem
technology that is necessarily dependent on computer systems and an idea
that did not exist before the time of computers.” (App. Br. 12.) Appellants
cite in support the Federal Circuit decision in DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014). (Id.)
We disagree with Appellants’ premise. “[Transaction execution and
processing” (trading), as Appellants’ claimed invention purports to address,
is not a technical problem; it is a business problem. And “determining an
order strategy” based on “market-specific” plug-ins (algorithms and mles),
as recited in Appellants’ claims, is a commercial solution, not a technical
solution. The only portion of the pending claims that could be considered
“technological” is the generic computer hardware, i.e., the claimed
“processor” used to implement the claimed invention, which is not enough
to confer subject matter eligibility. See Alice Corp., 134 S. Ct. at 2358 (“[I]f
a patent’s recitation of a computer amounts to a mere instmction to
‘implement]’ an abstract idea ‘on ... a computer,’ that addition cannot
impart patent eligibility.”) (internal citations omitted).
In DDR Holdings, in contrast, the Federal Circuit determined that,
although the patent claims at issue involved conventional computers and the
Internet, the claims addressed a challenge particular to the Internet, i.e.,
retaining website visitors who, if adhering to the routine, conventional
functioning of Internet hyperlink protocol, would be transported instantly
away from a host’s website after “clicking” on an advertisement and
activating a hyperlink. DDR Holdings, 773 F.3d at 1257. The Federal
Circuit, thus, held that the claims were directed to statutory subject matter
because they claimed a solution “necessarily rooted in computer technology
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in order to overcome a problem specifically arising in the realm of computer
networks.” Id.
No such technological advance is evident in the presently claimed
invention. Unlike the situation in DDR Holdings, Appellants do not identify
any problem particular to computer networks and/or the Internet that the
claims allegedly overcome. Instead, as the Examiner finds, the claims
merely employ generic computer components to perform generic computer
functions, i.e., receiving and processing information. (See Ans. 4—5.)
Appellants’ reliance on McRO, Inc. v. Bandai Namco Games America Inc.,
837 F.3d 1299 (Fed. Cir. 2016) (Reply Br. 4), is similarly inapposite,
because here, unlike in McRO, Appellants do not actually recite specific
rules in their claims; rather, Appellants purport to claim only the abstract
idea of using unspecified “market-specific” rules and algorithms.
Appellants also argue the claims do not “tie up the idea of
constructing and executing transaction processes and programs.” (App. Br.
13; Reply Br. 5.) To the extent Appellants are arguing that the claims are
not abstract because they do not preempt all practice of the idea, we are not
persuaded. Although the Supreme Court has described “the concern that
drives this exclusionary principle [i.e., the exclusion of abstract ideas from
patent eligible subject matter] as one of pre-emption,” Alice Corp., 134 S.
Ct. at 2354, characterizing pre-emption as a driving concern for patent
eligibility is not the same as characterizing pre-emption as the sole test for
patent eligibility. “The Supreme Court has made clear that the principle of
preemption is the basis for the judicial exceptions to patentability” and “[f]or
this reason, questions on preemption are inherent in and resolved by the
§ 101 analysis.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
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1379 (Fed. Cir. 2015) (citing Alice Corp., 134 S. Ct. at 2354). Although
“preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility.” Id.
In short, Appellants do not persuade us at step one of the analysis that
the Examiner erred in determining that the claims are directed to a patent-
ineligible subject matter—that is, to an abstract idea.
Step Two: Whether Additional Elements Transform The Idea Into
Patent-Eligible Subject Matter
Having found that the claims are directed to an abstract idea, the
Examiner also finds that the additional elements or combinations of
elements beyond the abstract idea do not amount to “significantly more”
than the abstract idea itself. (Final Act. 3—4.) In particular, the Examiner
finds:
[T]he claims do not include an improvement to another
technology or technical field, an improvement to the functioning
of the computer itself, or meaningful limitations beyond
generally linking the use of an abstract idea to a particular
technological environment. Note that the limitations, in the
instant claims, are done by the generically recited storage devices
and computer processors. The limitations are merely instructions
to implement the abstract idea on a computer and require no more
than a generic computer to perform generic computer functions
that are well-understood, routine and conventional activities
previously known to the industry.
{Id. at 3; see also Ans. 4—5.)
Appellants present several arguments challenging the Examiner’s
findings in step two of the Alice analysis, none of which we find persuasive
of Examiner error. (App. Br. 14—18.) Appellants first reiterate the alleged
novelty of their claimed invention, arguing the claimed invention is not
merely a “commonplace business method” or “purely conventional.” (App.
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Br. 15.) As we have noted above, Appellants misapprehends the controlling
precedent. Although the second step in the Alice/Mayo framework is termed
a search for an “inventive concept,” the analysis is not an evaluation of
novelty or non-obviousness, but rather, a search for “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. A novel and nonobvious claim
directed to a purely abstract idea is, nonetheless, patent-ineligible. See
Mayo, 132 S. Ct. at 1304.
Appellants also argue the claims amount to “an innovation in
computer technology” and “improve financial trade technologies,” and thus
“add significantly more to the alleged abstract idea.” (App. Br. 16.) As
support, Appellants cite the Federal Circuit’s decisions in Research
Corporation Techs., Inc. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010),
and SiRF Tech. Inc. v. Int’l Trade Comm ’n, 601 F.3d 1319 (Fed. Cir. 2010).
(App. Br. 16.) Neither decision supports Appellants’ argument. As the
Federal Circuit explained in Bancorp Svcs., LLC v. Sun Life Assur. Co. of
Canada (U.S.), 687 F.3d 1266, 1279 (Fed. Cir. 2012), both Research Corp.
and SiRF Tech, involved improvements to the underlying technology itself.
That is not the case here. Rather here, as in Bancorp, Appellants’ claimed
invention merely uses the underlying computer technology in its ordinary
capacity to perform processes “more efficiently.” See Bancorp, 687 F.3d at
1279. (See also Ans. 4—6.)
Thus, even accepting Appellants’ argument that the claimed invention
allows the trading process to operate better, there is a fundamental difference
between computer functionality improvements, on the one hand, and uses of
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existing computers as tools to perform a particular task, on the other.
Indeed, the Federal Circuit applied this distinction in Enfish in rejecting a
§101 challenge at the step one stage in the Alice analysis because the claims
at issue focused on a specific type of data structure, i.e., a self-referential
table for a computer database, designed to improve the way a computer
carries out its basic functions of storing and retrieving data, and not on
asserted advances in uses to which existing computer capabilities could be
put. Enfish, 822 F.3d at 1335—36.
We find no parallel here between Appellants’ claims and the claims
in Enfish {ox Research Corp. or SiRF Tech.), nor any comparable aspect in
Appellants’ claims that represents “an improvement to computer
functionality.” The alleged advantages that Appellants tout do not concern
an improvement to computer capabilities but instead relate to an alleged
improvement in computer-based trading by using market-specific plug-ins—
that is, market-specific rules and algorithms—a process in which a computer
is used as a tool in its ordinary capacity to receive, process, and output data.
Appellants also argue the Examiner erred by failing “to consider all of
the elements of Claim 1” and by overgeneralizing the claims. (App. Br. 17—
18; Reply Br. 6—8.) We disagree with Appellants’ characterization; the
Examiner expressly considers the combination of elements. (Final Act. 3—5;
see also Ans. 3—6.) In arguing the combination of elements, Appellants
appear to be arguing that application of the abstract idea by using “specific
data, specific data structures, and specific operations” removes the claims
from the realm of being directed to an abstract idea. We disagree. The
Supreme Court and the Federal Circuit have repeatedly made clear that
“merely limiting the field of use of the abstract idea to a particular existing
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technological environment does not render the claims any less abstract.”
Affinity Labs of Texas, LLC v. DirecTV, LLC, 838 F.3d 1253, 1259 (Fed.
Cir. 2016). Moreover, Appellants have neither shown, nor provided
evidence, that the claimed steps are technically accomplished such that they
are not routine, conventional functions of a generic computer or mobile
device. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir.
2014) (quoting Alice Corp., 134 S. Ct. at 2357) (“Instead, the claimed
sequence of steps comprises only ‘conventional steps, specified at a high
level of generality,’ which is insufficient to supply an ‘inventive concept.’”).
As noted above, we agree with the Examiner’s finding that Appellants’
claims involve processing data using generic computer components. (See
Ans. 4—6.)
Although Appellants argue independent claims 1 and 21 collectively
(App. Br. 10), Appellants purport to argue independent claim 6 separately,
asserting that claim 6 is patentable based on its recitation of “determining an
order strategy based on the plurality of trade parameters by executing the
trade implementation plug-in and the market-specific plug to deconstruct the
ComplexOrder into Events and Actions.” (App. Br. 20.) We are not
persuaded of error. As noted above in connection with claim 1, Appellants
do not argue that claim 6 recites any improvement in the way that the
underlying technology performs the recited functions. Rather, Appellants
are claiming in independent claim 6 (as in independent claims 1 and 21) the
abstract idea of computerized trading, which fundamentally involves
receiving data and processing it according to rules and algorithms. Adding a
recitation in claim 6 of an additional way of manipulating the data does not
impart eligibility. As the court explained in Electric Power Group, “merely
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selecting information, by content or source, for collection, analysis, and
display does nothing significant to differentiate a process from ordinary
mental processes, whose implicit exclusion from § 101 undergirds the
information-based category of abstract ideas.” Elec. Power Grp., 830 F.3d
at 1355. As noted above, we agree with the Examiner that the claims recite
generic computer components performing steps “that are being executed in a
conventional way at a high level of generality using a computer system.”
(Final Act. 5.) Thus, the steps recited by independent claim 6, like those
recited in independent claims 1 and 21, amount to nothing more than mere
instructions to implement the abstract idea on a computer—none of which
add inventiveness because they merely require the application of
conventional, well-known analytical steps. Similar analysis applies to
dependent claims 4, 15, and 16, which Appellants also purport to argue
separately. (See App. Br. 19, 21—22.)
For the foregoing reasons, we are not persuaded the Examiner erred in
rejecting claims 1—6 and 15—21 as directed to patent-ineligible subject matter
under 35 U.S.C. § 101, and we, therefore, affirm that rejection.
DECISION
For the above reasons, the Examiner’s rejection of claims 1—6 and
15—21 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)(l)(iv).
AFFIRMED
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