Ex Parte Pechenik et alDownload PDFPatent Trial and Appeal BoardFeb 26, 201612537552 (P.T.A.B. Feb. 26, 2016) Copy Citation UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. FILING DATE 12/537,552 08/07/2009 35811 7590 03/01/2016 IP GROUP OF DLA PIPER LLP (US) ONE LIBERTY PLACE 1650 MARKET ST, SUITE 4900 PHILADELPHIA, PA 19103 FIRST NAMED INVENTOR Jacob Pechenik 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. YJI-08-1292R 5595 EXAMINER POLLOCK, GREGORY A ART UNIT PAPER NUMBER 3695 NOTIFICATION DATE DELIVERY MODE 03/01/2016 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 JACOB PECHENIK, GREGORY CAMPBELL, and BLAKE BARNES Appeal2013-010201 Application 12/537,552 Technology Center 3600 Before: MURRIEL E. CRAWFORD, JOSEPH A. FISCHETTI, and MICHAEL W. KIM, Administrative Patent Judges. FISCHETTI, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF CASE1 Appellants seek our review under 35 U.S.C. § 134 from the Examiner's Final rejection of claims 1-24 and 46-52. We AFFIRM. 1 The Appellants identify YellowJacket, Inc., as the real party in interest. (Br. 1 ). Appeal2013-010201 Application 12/537,552 THE CLAIMED INVENTION Appellants' claims are "generally related to converting a trade transaction agreement into one or more structured products for submission to a post-trade processing facility." (Spec. para. 2). Claim 1 is illustrative of the claimed subject matter: 1. A method for electronically converting a trade transaction agreement into one or more structured products that are configured for submission to one or more post-trade processing: providing at least one computing device comprising a memory for storing instructions and a processor executing said instructions, said instructions causing the at least one computing device to perform the steps of: electronically receiving trade information for a trade transaction agreement between a first party and a second party; converting the trade information into one or more structured products, as defined by one or more post-trade processing facilities; for each structured product, assigning a price value and assigning a volume, wherein a sum of the price values equals a transaction price of the trade transaction agreement; and electronically submitting each structured product with information identifying at least one of the first party or a representative thereof, and the second party or a representative thereof, to one or more post-trade processing facilities for processing of the same. REFERENCES The prior art relied upon by the Examiner in rejecting the claims on appeal is: Pinkava US 2006/0224494 Al Oct. 5, 2006 2 Appeal2013-010201 Application 12/537,552 REJECTIONS The following rejections are before us for review. The Examiner rejected claims 1-24, 46, 51, and 52 under 35 U.S.C. § 112, second paragraph, as indefinite. The Examiner rejected claims 1-24 under 35 U.S.C. § 101 as reciting unpatentable subject matter. The Examiner rejected claims 1-24 and 46-52 under 35 U.S.C. § 103(a) as unpatentable over Pinkava. FINDINGS OF FACT We find the following facts by a preponderance of the evidence. 1. The Specification describes that a trade transaction agreement is converted into a structure product "as defined by the one or more post- trade processing facilities." (Para. 25). 2. The Specification describes that some structure products are not "listed" or "accepted" by post-trade processing facilities. (Para. 3). 3. The Specification describes that a trade transaction agreement is defined as "a basket (i.e., grouping) of one or more structured products." (Para. 16 (emphasis added)). 4. The Specification describes that "trade transaction agreements executed Over-the-Counter (OTC) may often be composed of bundles of 'vanilla' products such as a swap, call, or put. Post-trade processing facilities, such as clearing houses, often do not list or accept submission of these complex bundles, instead requiring that the bundles be decomposed prior to submission and submitted as one or more listed products." (Para. 3). 3 Appeal2013-010201 Application 12/537,552 5. The Specification, describing Figure 1, states, "[a]t 120, based on the received trade information, the trade transaction agreement is constructed using the one or more allowable structured products as defined by the one or more post-trade processing facilities." (Para. 19). 6. Appellants' element 120 states "CONSTRUCT TRADE TRANSACTION AGREEMENT INTO ONE OR MORE ALLOW ABLE STRUCTURED PRODUCTS." (Figure 1 ). 7. The Specification describes by example that "construction module 622 may evaluate and process information received through the communication module 621 to construct the trade transaction agreement into the one or more allowable structured products." (Para. 77). 8. The Specification describes that converting a trade transaction agreement into one or more structured products is done by a user specifying, indicating, or entering information about structured products. (Para. 38). 9. Pinkava discloses a trade transaction agreement and related structured products, stating: A derivatives contract can be defined as an agreement between two counterparties in which rights and obligations are set up whose economic value, either by direct reference to a benchmark price quote or by operation of the contract in its delivery phase, can be derived from one or more underlying (often called 'cash') products. (Para. 72). 10. Pinkava discloses brokers "executing trades" on behalf of customers. (Para. 99). 4 Appeal2013-010201 Application 12/537,552 11. Pinkava discloses a trade transaction agreement as "pre-matched bilaterally negotiated pair of trades" that are "executed by the appropriate back office." (Para. 104). 12. Pinkava discloses "straight through processing (STP)" with back office settlement systems linked to front office trading systems. (Para. 107). 13. Pinkava discloses the action of conversion of a trade transaction agreement into one or more structured products, by mapping that "converts wholesale trades agreed over the telephone into the back office product representation directly." (Para. 280). 14. Pinkava discloses assigning prices and volumes so the sum of the trade matches the sum of the post-trade settlement values, by "mapping which converts of the set of front office Traded Spread Product Daily Reference Prices (TSDRPJ as set by the market supervisor (see 1500 in FIG. 15) into the actual back office Credit Coupon Product daily settlement prices (CCPDSPi)." (Para. 374). ANALYSIS Rejection under 35 U.S.C. § 112 As to the Examiner's first rejection, of claims 1, 12, 13, 17, 46, 51, and 52 as indefinite for the use of "configured for" processing or submission to a post-trade facility, Appellants argue the language is not indefinite because the ordinary artisan would understand the meaning of the "configured for processing" or "configured for submission" language. (Br. 4---6). We agree with Appellants. The Specification describes that a trade transaction agreement is controlled by the definition of the product by the 5 Appeal2013-010201 Application 12/537,552 post-trade processing facility. (FF 1 ). The product must be "listed" for a facility to process the trade. (FF 2). We, thus, construe "configured to" to mean that the structured product is converted to code in order that the trade may be carried out for post-trade processing by a computer. As to the Examiner's second rejection, of claims 1-24, Appellants argue claims 1-24 do not cover two different statutory classes of invention, because the claims recite only method steps, including "providing at least one computing device." We agree, because the "providing" step conforms to a method step as a verb in gerund form, and does not claim a different statutory class of invention in conflict with the remainder of the claim language. For these reasons, we reverse the rejection of claims 1-24, 46, 51, and 52 under 35 U.S.C. § 112, second paragraph. Claim Construction The claim terms "trade transaction agreement," "structured product," and "converting the trade information" require inquiry to determine the breath and scope of the claims. The Specification describes that a "trade transaction agreement" references "one or more structured products." (FF 3). The Specification further describes that some trade transaction agreements are composed of complex bundles of structured products, where the bundles are "not listed." (FF 4). We, thus, construe a "structured product" as a listed security that can be processed by a post-trade processing facility. The claims recite that a trade transaction agreement is "converted into one or more structured products." A broad reading of the claim, thus, 6 Appeal2013-010201 Application 12/537,552 encompasses a trade transaction agreement that references one listed security only. The Specification describes by example, only that some agreements "may" be for bundles of multiple products; thus, the claim language does not strictly limit the terms to bundling. As to the meaning of "converting", Appellants direct us to paragraph 19 of the Specification, for claim 1, and paragraphs 19 and 77, for claim 46. (Br. 2-3). Paragraph 19, describing Figure 1, states, "[a]t 120, based on the received trade information, the trade transaction agreement is constructed using the one or more allowable structured products as defined by the one or more post-trade processing facilities." (FF 5; emphasis added). Appellants' Figure 1, to which paragraph 19 of the Specification refers, states the trade transaction agreement is constructed into one or more structured products. (FF 6). Paragraph 77 also uses the terminology "constructing" the trade transaction agreement "into one or more allowed structured products." (FF 7; emphasis added). The Specification further describes the process of converting as specifying, indicating, or entering information about structured products. (FF 8). We, thus, construe converting trade information into a structured product to be simply supplying information about a structured product based on trade information, which, incidentally, encompasses manual input of data. Thus, under the broadest reasonable interpretation, only one structured product need be converted, and/or converting may comprise entering the identification of the structured product so the post-trade processing facility understands what product is being settled between the two parties. 7 Appeal2013-010201 Application 12/537,552 Rejection under 35 U.S.C. § 101 Appellants argue method claims 1-24 do not recite a mere abstract idea, because a computer performs the method, and data is transformed. (Br. 8-9). We are not persuaded by Appellants' argument. 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, [] 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, [ ] consider the elements of each claim both individually and "as an ordered combination" to determine whether the additional elements "transform the nature of the claim" 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 amounts to significantly more than a patent upon the [ineligible concept] 1tc,,.lf'" _l_L0V .. LL. Alice Corp. Pty. Ltd. v CLS Bank Intl., 134 S. Ct. 2347, 2355 (2014) (citing Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012)). To perform this test, we must first determine whether the claims at issue are directed to a patent-ineligible concept. Considered as an ordered combination, the limitations of Appellants' independent claims add nothing that is not already present when the steps are considered separately. The claims at issue amount to nothing significantly more than ascertaining a meeting of the minds, e.g., the terms of an agreement, altering that information to rename not-directly-marketable securities into known, marketable securities, and submitting same to an 8 Appeal2013-010201 Application 12/537,552 appropriate selling facility. Viewed as a whole, Appellants' claims simply recite the concept of receiving, entering, and sending information, as well as performing simple mathematical functions such as calculating a sum of numeric values. Even where the steps are performed on a computer, the method claims do not, for example, purport to improve the functioning of a computer itself. Nor do they effect an improvement in any other technology or technical field. Under our precedents, that is not enough to transform an abstract idea into a patent-eligible invention. See Alice Corp. Pty. Ltd., 134 S. Ct. at 2360. As in Alice Corp. Pty. Ltd., we need not labor to delimit the precise contours of the "abstract ideas" category in this case. It is enough to recognize that there is no meaningful distinction in the level of abstraction between the concept of risk hedging in Bilski and the concept of converting one type of information into another. Both are squarely within the realm of "abstract ideas" as the Court has used that term. See Alice Corp. Pty. Ltd., 134 S. Ct. at 2357. The remaining dependent claims do not alter this fundamental nature of the independent claims. We, thus, conclude that the claims at issue are directed to a patent-ineligible concept. The introduction of a computer into the claims does not alter the analysis at Mayo step two. the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention. Stating an abstract idea "while adding the words 'apply it'" is not enough for patent eligibility. Nor is limiting the use of an abstract idea "'to a particular technological environment."' Stating an abstract idea while adding the words "apply it with a computer" simply combines those two steps, with the same 9 Appeal2013-010201 Application 12/537,552 deficient result. Thus, if a patent's recitation of a computer amounts to a mere instruction to "implement[t]" an abstract idea "on ... a computer," that addition cannot impart patent eligibility. This conclusion accords with the preemption concern that undergirds our § 101 jurisprudence. Given the ubiquity of computers, wholly generic computer implementation is not generally the sort of "additional feature[e]" that provides any "practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself." Alice Corp. Pty. Ltd., 134 S. Ct. at 2358 (citations omitted). "[T]he relevant question is whether the claims here do more than simply instruct the practitioner to implement the abstract idea [] on a generic computer." Alice at 2359 (emphasis added). They do not. The preamble to claim 1 recites that it is a method of converting a "trade transaction agreement" into "one or more structured products." The method of claim 1 recites providing a computer, receiving input data (the trade transaction agreement), and outputting the "structured product" to a post-trade processing facility. The method also recites converting information and assigning a price. The limitations of providing a computer, receiving information, and submitting product information to a post-trade facility involve simple data handling functions common to all general purpose computers. The assigning of prices such that a sum amount equals another amount involves simple mathematical capabilities also common to all general purpose computers. Based on our claim construction of the "converting to" language, as set forth above, we conclude the "converting" step represents mere data input, which is a capability also common to all general purpose computers. 10 Appeal2013-010201 Application 12/537,552 Rejection under 35 U.S.C. § 103(a) Initially, we note that the Appellants argue independent claims 1 and 46 together as a group. (Br. 12). Correspondingly, we select representative claim 1 to decide the appeal of these claims, with remaining claim 46 standing or falling with claim 1. Appellant does not provide a substantive argument as to the separate patentability of claims 2-24 and 47-52 that depend from claims 1 and 46. Thus, claims 2-24 and 46-52 stand or fall with claim 1. See, 37 C.F.R. § 41.37(c)(l)(vii). Appellants argue "Pinkava does not describe or suggest converting trade information pertaining to a trade agreement into structured products." (Br. 11). We are not persuaded by Appellants' argument. Pinkava discloses a trade transaction agreement as an "agreement between two counterparties in which rights and obligations are set up." (FF 11). Pinkava further discloses mapping within its system that "converts wholesale trades agreed over the telephone into the back office product representation directly." (FF 13). Because Pinkava discloses negotiated trades in trade transaction agreements (FF 9), which are cleared by a back office settlement procedure (FF 12), and the conversion of the trades to back office products by the entering of information taken from the order, we find that Pinkava meets the claim requirement of: electronically receiving trade information for a trade transaction agreement between a first party and a second party; converting the trade information into one or more structured products, as defined by one or more post-trade processing facilities; ... and 11 Appeal2013-010201 Application 12/537,552 electronically submitting each structured product with information identifying at least one of the first party or a representative thereof, and the second party or a representative thereof, to one or more post-trade processing facilities for processing of the same. In other words, because Pinkava enters trade information from the trade transaction agreement (FF 11) into representations of corresponding structured products the post-trade facility understands for clearing (FF 13), Pinkava meets the "converting" requirement of the claim. Appellants argue the products in a trade in Pinkava are not "broken down" into structured products. (Appeal Br. 12). We are not persuaded by Appellants' argument. Based on our construction of "converting," and the claim reciting "one or more structured products," a single trade may correspond to a single structured product. Therefore, under our claim interpretation, Appellants' "broken down" argument is not relevant other than requiring entering of the trade information of one structured products. Appellants also argue "Pinkava fails to disclose or suggest pricing and assigning a volume to each structured product such that the sum of the prices (of the structured products) equals the transaction price of the original transaction agreement" because "none of the agreements described in Pinkava are broken down (or converted) into one or more structured products, as in Claim 1." (Br. 11-12). We are not persuaded by Appellants' argument. We have addressed the "broken down" aspect of this argument above. In addition, Pinkava discloses the need to match agreed trade prices and post-trade settlement back office prices by mapping. (FF 14). Thus, Pinkava discloses "for each 12 Appeal2013-010201 Application 12/537,552 structured product, assigning a price value and assigning a volume, wherein a sum of the price values equals a transaction price of the trade transaction agreement," as claimed. CONCLUSIONS OF LAW The Examiner erred in rejecting claims 1-24, 46, 51, and 52 under 35 U.S.C. § 112, second paragraph, as indefinite. The Examiner did not err in rejecting claims 1-24 under 35 U.S.C. § 101. The Examiner did not err in rejecting claims 1-24 and 46-52 under 35 U.S.C. § 103(a). DECISION For the above reasons, the Examiner's rejection of claims 1-24, 46, 51, and 52 under 35 U.S.C. § 112, second paragraph is reversed. The Examiner's rejection of claims 1-24 under 35 U.S.C. § 101 is affirmed. The Examiner's rejection of claims 1-24 and 46-52 under 35 U.S.C. § 103(a) 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 13 Copy with citationCopy as parenthetical citation