Ex Parte Scheerer et al

Patent Trial and Appeal Board

May 8, 2018

14158211 (P.T.A.B. May. 8, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/158,211 01/17/2014
30756 7590 05/10/2018
BANNER & WITCOFF, LTD.,
ATTORNEYS FOR CLIENT NO. 006119
10 SOUTH WACKER DRIVE
SUITE 3000
CHICAGO, IL 60606
FIRST NAMED INVENTOR
John Scheerer
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.
006119.00385 5515
EXAMINER
SHRESTHA, BIJENDRA K
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
05/10/2018 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):
PT0-30756@bannerwitcoff.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JOHN SCHEERER and RANDAL ALMEIDA 1
Appeal2017-002099
Application 14/15 8,211
Technology Center 3600
Before MICHAEL J. STRAUSS, ADAM J. PYONIN, and
SHARON PENICK, Administrative Patent Judges.
STRAUSS, Administrative Patent Judge.
DECISION ON APPEAL
1 According to Appellants, the real party in interest is Chicago Mercantile
Exchange Inc. See Appeal Br. 1.
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Application 14/15 8,211
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from a rejection of claims
12-22. Claims 1-11 and 22-28 are canceled. Ans. 5; App. Br. 3. We have
jurisdiction under 35 U.S.C. § 6(b ).
We affirm.
THE INVENTION
The claims are directed to determining a banding start price for orders
to be placed on an exchange. Spec., Title, ,r 2. Claim 12, reproduced below,
is representative of the claimed subject matter:
12. A computer system comprising:
a user computer system, communicatively coupled to a
network, the user computer system in communication with an
exchange computer system,
at least one processor; and
at least one non-transitory memory, wherein the at least one
non-transitory memory stores instructions that, when executed,
cause the exchange computer system to perform operations that
include
receiving, via the network from the user computer
system, an offer for a subject financial product, wherein
the offer comprises one of a bid price or an ask price;
determining, as a result of determining a difference
between bid and ask prices for subject financial products
of a subject financial product type is not within a
predefined range, if there is a calendar spread type
satisfying calendar spread criteria, wherein the calendar
spread criteria require that a calendar spread type
satisfying the criteria include the subject financial product
type as one leg,
generating, as a result of determining there is a calendar
spread type satisfying the calendar spread criteria, a
banding start price for the subject financial product type
by calculating a value for the subject financial product
type based on a difference between bid and ask prices for
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calendar spreads of the satisfying calendar spread type,
and on a price value of a different financial product type
forming an other leg of the satisfying calendar spread type,
and
processing orders for subject financial products of the
subject financial product type based on whether prices of
the orders are within a predefined range of the banding
start price.
REJECTIONS
The Examiner made the following rejections2 :
Claims 12-22 stand rejected on the ground of nonstatutory double
patenting as being unpatentable over claims 1-22 of U.S. Patent No.
8,666,875. Final Act. 3.
Claims 12-22 stand rejected under 35 U.S.C. § 101 as directed to a
judicial exception and, therefore, non-statutory. Final Act. 3-9.
ANALYSIS
Appellants' arguments are unpersuasive of reversible Examiner error.
We adopt as our own ( 1) the findings and reasons set forth by the Examiner
in the action from which this appeal is taken (Final Act. 3-9; Ans. 2-5) and
(2) the reasons set forth by the Examiner in the Examiner's Answer in
response to Appellants' Appeal Brief ( Ans. 5-14) and concur with the
conclusions reached by the Examiner. We highlight the following for
emphasis.
2 Rejections of claims 1-11 on the ground of nonstatutory double patenting
and under 35 U.S.C. §§ 101 and 112, second paragraph, were rendered moot
by the cancelation of those claims.
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I. Nonstatutory Double Patenting
Rather than contest the nonstatutory double patenting rejection,
Appellants indicate a terminal disclaimer will be submitted upon allowance
of patentable subject matter. App. Br. 2-3. We therefore summarily affirm
the rejection of claims 12-22 on the ground of nonstatutory double patenting
over claims 1-22 of U.S. Patent No. 8,666,875.
II. 35 USC§ 101 Rejection
Under 35 U.S.C. § 101, an invention is patent-eligible if it claims a
"new and useful process, machine, manufacture, or composition of matter."
35 U.S.C. § 101. The Supreme Court, however, has long interpreted§ 101
to include an implicit exception: "[l]aws of nature, natural phenomena, and
abstract ideas" are not patent-eligible. See, e.g., Alice Corp. Pty. Ltd. v. CLS
Bankint'l, 134 S. Ct. 2347, 2354 (2014).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus Labs.,
Inc., 132 S. Ct. 1289, 1300 (2012), "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., 134 S. Ct.
at 2355. The first step in this analysis is to "determine whether the claims at
issue are directed to one of those patent-ineligible concepts" (id.), e.g., to an
abstract idea. If the claims are not directed to a patent-ineligible concept, the
inquiry ends. Otherwise, the inquiry proceeds to the second step, in which
the elements of the claims are considered "individually and 'as an ordered
combination'" to determine whether there are additional elements that
"'transform the nature of the claim' into a patent-eligible application." Alice
Corp., 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1297).
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The Court acknowledged in Mayo that "all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena,
or abstract ideas." Mayo, 132 S. Ct. at 1293. Therefore, the Federal Circuit
has instructed that claims are to be considered in their entirety to determine
"whether their character as a whole is directed to excluded subject matter."
McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299, 1312
(Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790
F.3d 1343, 1346 (Fed. Cir. 2015)).
A. Alice/Mayo First Step: Whether the Claims Are Directed to Patent-
Ineligible Concepts
The Examiner finds the claims are directed to "determin[ing a]
banding start price and processing the order based on the determined
banding start price" and, therefore, to an abstract idea. Final Act. 6-8. In
particular, the Examiner finds the claimed steps of determining, generating,
and processing orders based on the determined banding start price constitute
abstract ideas. The Examiner explains
The concept of determining the banding order price and
processing the orders based on the determined banding start price
comprising mathematical calculation and comparison of values
and financial product type criteria is a mathematical
relationship/formula which have been found by the courts to be
an abstract idea, similar to updating alarm limits using a
mathematical formula (Parker v. Flook[, 437 U.S. 584 (1978)
(mathematical algorithm used for adjusting an alarm limit)]) and
generalized formulation of computer program to solve
mathematical problem ( Gottschalk v. Benson[, 409 U.S. 63, 67
(1972)(mental processes can be unpatentable, even when
performed by a computer)]). Further, the procedures for
determining the banding order price and processing the orders
based on the determined banding start price consists of steps
which can be carried out by a human that do not impose any
requirements that would make the invention impossible to carry
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out manually is also considered to be a method of organizing
human activities. These steps can be performed by human or in
a computer and is similar to the kind of "organizing human
activity" at issue in Alice Corp.
Final Act. 6-7 (formatting added). The Examiner concludes the
claims are directed to an abstract idea, satisfying the first step of the
Alice/Mayo two-step framework. Final Act. 7.
Appellants contend the Examiner errs by oversimplifying the subject
matter being claimed as directed to determining banding start price and
processing the order based on the determined banding start price. App. Br.
5. According to Appellants
The instant claims are better described as being directed to a
more efficient exchange computing system programmed to
receive orders for a financial product, determine if calendar
spread data meets certain criteria when a difference between bid
and ask prices are outside a defined range, generate a banding
start price (BSP) for the financial product when the calendar
spread data satisfies the certain criteria, and processing orders for
the financial product based on whether prices of orders are within
a predefined range of the BSP.
App. Br. 6. Appellants argue such subject matter is akin to that found to be
statutory in Enfzsh as an improvement in the function of a computer. Id.,
citing Enfzsh, LLC v. Microsoft Corp., 118 USPQ2d 1684, 1700 (Fed. Circ.
2016). According to Appellants, the invention of claim 12 "improves the
efficiency of the exchange computing system by limiting use of processing
resources to orders that are more likely to be matched." App. Br. 8.
Appellants' contentions are unpersuasive of Examiner error in
determining the claims are directed to an abstract idea. The Title of
Appellants' Specification is "DETERMINATION OF BANDING START
PRICE FOR ORDER EVALUATION" and the Specification describes a
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background involving placing bid orders on an exchange for futures
contacts, options on futures contracts, and numerous other types of financial
products. Spec. ,r 2. The Specification further discloses conserving
computer resources by avoiding the processing of orders that are unlikely to
be matched by determining a banding start price (BSP) that is used as a
criteria for either rejecting or processing an order. Spec. ,r,r 3--4. That is, the
invention is directed to identifying and processing offers for a financial
product based on whether prices of the orders are within a predefined range
of the determined banding start price. Claim 12. As discussed further
below, we find the claims do not make the computer itself function more
efficiently or otherwise improve the functioning of the computer. Instead,
the claims are similar to those in cases finding financial transactions using a
computer to be abstract ideas. See e.g., In re Chorna, 65 6 Fed. Appx. 1016,
1019-20 (Fed. Cir. 2016) (trading of hindsight financial instruments, i.e.
contractual relations); Chicago Bd. Options Exch., Inc. v. Int'! Sec. Exch.,
LLC, 748 F.3d 1134, (Fed Cir. 2014)) (nonprecedential) (Rule 36) (see, e.g.,
US 7,685,053 ( claim 8) ("determining a risk level and an aggregate risk
level associated with [a] trade"); Intellectual Ventures I LLC v. Capital One
Bank (USA), 792 F.3d 1363, 1369 (Fed. Cir. 2015) ("tracking financial
transactions to determine whether they exceed a pre-set spending limit (i.e.
budgeting)" is an abstract idea); and OIP Technologies v. Amazon.com, Inc.,
788 F.3d 1359, 1362 (Fed. Cir. 2015) (claims relating to a method of pricing
a product for sale were directed to abstract idea of "offer-based price
optimization" combined with well-understood, conventional activities
related to computers or data-gathering.) Other cases finding investment
tools to be abstract ideas include Bancorp Services, L.L. C. v. Sun Life Assur.
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Co. of Canada (US.), 687 F.3d 1266 (Fed, Or, 2012), cert. denied, 134 S.Ct.
2870 (2014); Capital Dynamics v. Cambridge Associates, LLC, 2016 WL
4709879 (Mem) (Fed. Cir. 2016); Clarilogic, Inc. v. FormFree Holdings
Corporation, 2017 WL 992528 (Fed, Cir, 2017); Digitech Information
Systems, Inc. v. BMW Auto Leasing, LLC, 504 Fed.Appx. 920 (Mem) (Fed.
Or. 2013); and. Fort Properties, Inc. v. American Master Lease LLC, 671
F.3d 1317 (Fed. Cir. 2012).
Rather than being directed to the alleged "technical solution to
efficiently process incoming orders" (App. Br. 11 ), claim 12 as a whole is
focused on a result; that is, providing a filtering function by rejecting errant
incoming orders to avoid processing orders that are unlikely to be matched
and processing only orders within a predetermined range of a banding start
price, which are known benefits. See Spec. ,r 3 ( describing prior art
systems); see also In re TL! Communications LLC Patent Litigation, 823
F.3d 607, 612 (Fed. Cir. 2016) ("the claims here are not directed to a
specific improvement to computer functionality. Rather, they are directed to
the use of conventional or generic technology in a nascent but well-known
environment, without any claim that the invention reflects an inventive
solution to any problem presented by combining the two."). We find no
parallel between claim 12 and the claims in Enfzsh, nor any comparable
aspect in claim 12 that represents an improvement to computer
functionality. Although the argued filtering function may improve order
processing in general, it does not improve a technology, e.g., the functioning
of computers or data communications.
Unlike Enfish, claim 1 is not focused on an improvement to computer
capabilities or functionality. There is a fundamental difference between
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computer functionality improvements, on the one hand, and uses of existing
computers as tools to perform a particular task, on the other. "[The
invention] improves the efficiency of the exchange computing system by
limiting use of processing resources to orders that are more likely to be
matched." App. Br. 8. This asserted improvement in matching orders to
market price conditions and processing matching orders is not focused on a
specific means or process that improves computer technology but, rather, on
optimizing the processing of market trades.
We are also unpersuaded that the Examiner erred in in finding the
steps of claim 1 are individually and as a whole directed to abstract ideas
expressed by a mathematical relationship or formula and/or methods of
organizing human activity. Final Act. 6-7. Like claim 12 in Electric Power
Group, Appellants' claim 12 involves receiving data, analyzing the data, and
processing results, amounting to no more than matching and processing
orders for financial products. As such, claim 1 is "clearly focused on the
combination of those abstract-idea processes. The advance [it purports] to
make is a process of gathering and analyzing information of a specified
content, then displaying the results, and not any particular assertedly
inventive technology for performing those functions." Elec. Power Grp.
LLC v. Alstom, 830 F.3d 1350, 1353-54 (Fed. Cir. 2016) (collecting
information and "analyzing information by steps people go through in their
minds, or by mathematical algorithms, without more, [are] essentially
mental processes within the abstract-idea category."). Thus, we agree with
the Examiner that the claims are directed to patent-ineligible concepts.
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B. Alice/Mayo Second Step: Whether Additional Elements Transform the
Idea Into Patent-Eligible Subject Matter
Turning to the second step of the Alice/Mayo analysis, Appellants
argue the claims may be considered to recite "significantly more" than the
judicial exception, relying on the arguments that the claimed steps are a
meaningful improvement to the efficiency of the exchange computing
system provided by only processing those incoming orders that meet specific
criteria. App. Br. 9. Appellants argue, as in Bascom Glob. Internet Servs. v.
AT&T Mobility, LLC, 827 F.3d 1341 (Fed. Cir. 2016), "the claims recite[] a
specific, discrete implementation of the abstract idea that provide[ s] a
technical improvement over the prior art." App. Br. 10. Appellants further
argue "the Office action provides credible evidence that the claims recite an
improved computer system as none of the claims were rejected based on
prior art." App. Br. 11. In particular, Appellants allege "the Office action
has not established that [the] features [recited by claim 12] ... are well-
understood, routine, or conventional to those in the relevant field of
'determine banding start price and processing the order based on the
determined banding start price."' App. Br. 11-12. According to Appellants
"Claim 12 thus imposes significant limitations on, and would not be
tantamount to a monopoly on, the alleged abstract idea." App. Br. 12.
The Examiner responds that "the claim limitations simply narrow or
limit the abstract idea without providing anything significantly more than the
abstract idea itself." Ans. 12. Addressing Appellants' argument that the
claims were not rejected over prior art thereby evidencing a resultant
improved computer system (App. Br. 11 ), the Examiner explains "the
existence of [any] such novel features would still not cure the deficiencies
with respect to the abstract idea." Ans. 12, citing
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LLC, 772 F.3d 709 (Fed. Cir. 2014). The Examiner further directs attention
to various examples in which computer implementation of an abstract idea
similar to that of claim 12 and in which insufficient additional elements were
found to transform the nature of the claim into a patent-eligible subject
matter. Id. at 12-13. The Examiner addresses Appellants' argument that the
claims would not create a monopoly on the abstract idea (i.e., the
"preemption argument"), quoting from the decision in Ariosa Diagnostics,
Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015); "Where a
patent's claims are deemed only to disclose patent ineligible subject matter
under the Mayo framework, as they are in this case, preemption concerns
are fully addressed and made moot. " Ans. 14.
We are unpersuaded claim 12 recites significantly more than the
judicial exception. For the reasons explained above and as evidenced by the
cited prior cases, the a generic recitation of a computer system, processor,
memory and communication network performing basic, generic computer
and data communication functions do not amount to significantly more than
the judicial exception. Appellants fail to direct attention to evidence that
these elements are other than generic components. Instead, the recited
elements have been found to have well-understood, routine or conventional
in prior relevant court decisions including Bancorp Servs., 687 F.3d at 1278
( a computer "employed only for its most basic function ... does not impose
meaningful limits on the scope of those claims"), Lending Tree, LLC v.
Zillow, Inc., 656 F. App'x 991, 997 (Fed. Cir. 2016) (holding ineligible
claims to a computerized method of speeding up a loan-application process),
Alice, 134 S. Ct. at 2358 ("[T]he mere recitation of a generic computer
cannot transform a patent-ineligible abstract idea into a patent-eligible
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invention"), and OIP Techs., 788 F.3d at 1363 ("[R]elying on a computer to
perform routine tasks more quickly or more accurately is insufficient to
render a claim patent eligible."). Ans. 10; see also buySAFE, Inc. v. Google,
Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) ("That a computer receives and
sends the information over a network-with no further specification-is not
even arguably inventive."); Ultramercial, Inc. v. Hulu LLC, 772 F.3d 709,
715-16 (Fed. Cir. 2014) (claims merely reciting abstract idea of using
advertising as currency as applied to particular technological environment of
the Internet not patent eligible).
Although the Specification provides detailed information regarding
generating a banding start price including various flow charts, the individual
steps reply on basic operations and functions provided by a generic
computer. As such, the generalized use of the computer indicates that it "is
employed only for its most basic function, the performance of repetitive
calculations, and as such does not impose meaningful limits on the scope of
those claims." Bancorp, 687 F.3d at 1278. See also Intellectual Ventures,
792 F.3d at 1367 ("Nor, in addressing the second step of Alice, does
claiming the improved speed or efficiency inherent with applying the
abstract idea on a computer provide a sufficient inventive concept.").
Similarly, the Specification fails to provide details concerning the
network of claim 12, merely disclosing that "[ e ]xchange computer system
100 and computer device 114 may be connected via a T 1 line, a common
local area network (LAN) or other mechanism for connecting computer
devices." Spec. ,r 22.
Furthermore, as explained by the Examiner (Ans. 12), we are
unpersuaded by Appellants' argument that the claims are not technologically
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routine and conventional because they are not rejected over art. App. Br. 11.
Although novelty is a factor to be considered when determining "whether
the claims contain an 'inventive concept' to 'transform' the claimed abstract
idea into patent-eligible subject matter" (Ultramercial, 772 F.3d at 715), a
finding of novelty or nonobviousness does not necessarily lead to the
conclusion that subject matter is patentable eligible. "Groundbreaking,
innovative, or even brilliant discovery does not by itself satisfy
the§ 101 inquiry." Ass 'nfor Molecular Pathology v. Myriad Genetics, Inc.,
133 S. Ct. 2107, 2117 (2013). Here, Appellants have not identified novel
features that transform the abstract idea into patent-eligible subject matter.
Finally, as explained by the Examiner (Ans. 14), Appellants'
preemption argument is unpersuasive. Although preemption "'might tend to
impede innovation more than it would tend to promote it,' thereby thwarting
the primary object of the patent laws" (Alice, 134 S. Ct. at 2354 (citing
Mayo, 132 S. Ct. at 1293)), "the absence of complete preemption does not
demonstrate patent eligibility." Ariosa Diagnostics,788 F.3d at 1379; see
also OIP Techs., 788 F.3d at 1362---63 ("[T]hat the claims do not preempt all
price optimization or may be limited to price optimization in the e-
commerce setting do not make them any less abstract.").
For the reasons discussed, we agree with the Examiner in finding the
computer components and communications network are used in Appellants'
claims only for their most basic functions, the performance of repetitive
calculations using well-known operations and communicating information
between systems. Accordingly, we are not persuaded the Examiner erred in
finding the claims lack eligibility under Alice step 2. Therefore, we sustain
the rejection of claims 12-22 under 35 U.S.C. § 101.
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DECISION
We affirm the Examiner's decision to reject claims 12-22 on the
ground of nonstatutory double patenting.
We affirm the Examiner's decision to reject claims 12-22 under
35 U.S.C. § 101.
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). See 37
C.F.R. § 4I.50(f).
AFFIRMED
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