Ex Parte Richter

Patent Trial and Appeal Board

May 20, 2015

11475573 (P.T.A.B. May. 20, 2015)

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.
11/475,573 06/21/2006 Edward Richter 6792-76420 9210
7590 05/20/2015
Welsh & Katz, Ltd.
Jon P. Christensen
22nd Floor
120 South Riverside Plaza
Chicago, IL 60606
EXAMINER
WEISBERGER, RICHARD C
ART UNIT PAPER NUMBER
3693
MAIL DATE DELIVERY MODE
05/20/2015 PAPER
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.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
___________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
___________

Ex parte EDWARD RICHTER
___________

Appeal 2012-006404
Application 11/475,573
Technology Center 3600
___________

Before ANTON W. FETTING, MICHAEL W. KIM, and
BRUCE T. WIEDER, Administrative Patent Judges.
FETTING, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
1

Edward Richter (Appellant) seeks review under 35 U.S.C. § 134 of a
final rejection of claims 1-10, the only claims pending in the application on
appeal. We have jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b).

1
Our decision will make reference to the Appellant’s Appeal Brief (“Br.,”
filed September 1, 2011) and the Examiner’s Answer (“Ans.,” mailed
December 8, 2011).
Appeal 2012-006404
Application 11/475,573
2

The Appellant invented “a sporting league in which athletes are
compensated based on the price of shares of stock issued in the names of
each of the athletes” (Specification 1:2–4).
An understanding of the invention can be derived from a reading of
exemplary claim 1, which is reproduced below [bracketed matter and some
paragraphing added].
1. A method, using computer means, for investing in players of
a sporting league, comprising:
[1] a sports team of the sporting league employing a plurality of
players;
[2] a trustee of the sporting league issuing a plurality of shares
of stock for each of the players
where the stock is not issued to the player and is not
intended to be owned by the player in whose name the
stock is issued;
[3] a plurality of individuals each investing in and owning at
least one of the plurality of shares of stock of at least one of the
plurality of players
where the investing and owning does not give the owner
any voting rights in any entity and where the only rights
accruing to the owner of stock is a right to monetary
income;
[4] providing trading of shares using the computer means
through a global computer network
wherein the price at which a player's stock trades is a
factor in calculating each player's compensation;
[5] dividing at least a portion of an income of the sporting
league among the plurality of individuals based upon the
number of shares owned by each of the plurality of individuals;
and
[6] allowing the individuals to buy and sell the shares.
Appeal 2012-006404
Application 11/475,573
3

Claims 1-10 stand rejected under 35 U.S.C. § 101 as directed to non-
statutory subject matter.
2

ISSUES
The issues of statutory subject matter turn primarily on whether the
claims recite more than the abstract idea of creating stock and tying
compensation to the stock price.
FACTS PERTINENT TO THE ISSUES
The following enumerated Findings of Fact (FF) are believed to be
supported by a preponderance of the evidence.
01. The law of stock companies is at least as old as 1862. Cox, The
Law and Practice of Joint Stock Companies and Other
Associations As Regulated By The Companies Act, 1862, 1862.
3

ANALYSIS
These claims are to methods of issuing stock. Claim 1 is independent.
Claim 1 recites steps including employing employees, issuing, investing and
trading in stock, and issuing dividends.

2
The Examiner withdrew rejections under 35 U.S.C. § 112 and 103. Ans. 3.
3
https://books.google.com/books?id=t48DAAAAQAAJ
Appeal 2012-006404
Application 11/475,573
4

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. . . .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] itself.”
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) (citation omitted).
We must first determine whether the claims at issue are directed to a
patent-ineligible concept. We conclude that they are. These claims are
drawn to the abstract idea of creating and trading financial security shares.
It follows from our prior cases, and Bilski in particular, that the claims at
issue here are directed to an abstract idea. On their face, the claims before
us are drawn to the concept of creating and trading shares. Like the risk
hedging in Bilski, the concept of security trading is a fundamental economic
practice long prevalent in our system of commerce. FF 01. The use of
shares in financial securities is also a building block of the modern economy.
Thus, trading securities, like hedging, is an “abstract idea” beyond the scope
of §101.
Appeal 2012-006404
Application 11/475,573
5

The Court found that it need not labor to delimit the precise contours of
the “abstract ideas” category in a case such as this. It is enough to recognize
that there is no meaningful distinction between the conceptual abstraction of
risk hedging in Bilski and the concept of securities trading at issue here.
Both are squarely within the realm of “abstract ideas” as the Court has used
that term. See Alice Corp. Although the Field of Invention characterizes the
invention as relating to sporting leagues and compensating athletes (Spec.
1), actual descriptions of the invention focus on the issuance and trading of
stock. The first sentence under Summary of the Invention says the invention
is a method for investing. The next sentence says the method includes
issuing a plurality of shares.
The introduction of a computer into the claims does not alter the analysis
at Mayo step two. Method claims, which merely require generic computer
implementation, fail to transform that abstract idea into a patent-eligible
invention.
[T]he 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
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
Appeal 2012-006404
Application 11/475,573
6

process is more than a drafting effort designed to monopolize
the [abstract idea] itself.”

Alice Corp. at 2358 (citations omitted).
The relevant question is whether the claims here do more than simply
instruct the practitioner to implement the abstract idea of issuing and trading
stock on a generic computer. They do not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to issue and trade shares amounts to electronic paper work—one
of the most basic functions of a computer. All of these computer functions
are well-understood, routine, conventional activities previously known to the
industry. In short, each step does no more than require a generic computer
to perform generic computer functions.
Considered as an ordered combination, no computer components are
recited in Appellant’s methods and so add nothing that is not already present
when the steps are considered separately. Viewed as a whole, Appellant’s
method claims simply recite the concept of issuing and trading stock as
performed by a generic computer. The method claims do not, for example,
purport to improve the functioning of the computer itself. Nor do they effect
an improvement in any other technology or technical field. Instead, the
claims at issue amount to nothing significantly more than an instruction to
apply the abstract idea of issuing and trading stock using some unspecified,
generic computer. Under our precedents, that is not enough to transform an
abstract idea into a patent-eligible invention.
Appeal 2012-006404
Application 11/475,573
7

Claims 2 and 4 further recite providing compensation, but providing
compensation per se is an even older and more abstract concept than stock
issuance.
CONCLUSIONS OF LAW
The rejection of claims 1-10 under 35 U.S.C. § 101 as directed to
non-statutory subject matter is proper.
DECISION
The rejection of claims 1-10 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). See 37 C.F.R.
§ 1.136(a)(1)(iv) (2011).

AFFIRMED
pgc