Ex Parte Siddall et al

Patent Trial and Appeal Board

Aug 21, 2018

12817610 (P.T.A.B. Aug. 21, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
12/817,610 06/17/2010
30756 7590 08/23/2018
BANNER & WITCOFF, LTD.,
ATTORNEYS FOR CLIENT NO. 006119
10 SOUTH WACKER DRIVE
SUITE 3000
CHICAGO, IL 60606
FIRST NAMED INVENTOR
Jake Siddall
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.
006119.00176 5916
EXAMINER
HOLLY, JOHN H
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
08/23/2018 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 JAKE SIDDALL, DA VE SAL V ADORI,
PAUL BAUERSCHMIDT, KEN SILHA VY, ARI STUDNITZER,
PAUL CALLAWAY, JOHN CURRAN, and MARTIN STROUP
Appeal2016-007245 1
Application 12/817,6102
Technology Center 3600
Before MICHAEL C. ASTORINO, BRADLEY B. BAY AT, and
ALYSSA A. FINAMORE, Administrative Patent Judges.
FINAMORE, Administrative Patent Judge.
DECISION ON APPEAL
1 Our Decision references Appellants' Specification ("Spec.," filed June 17,
2010), Appeal Brief ("Appeal Br.," filed Nov. 13, 2015), and Reply Brief
("Reply Br.," filed July 19, 2016), as well as the Examiner's Answer
("Ans.," mailed May 19, 2016) and Final Office Action ("Final Act.,"
mailed Feb. 11, 2015).
2 Appellants identify Chicago Mercantile Exchange Inc. as the real party in
interest. Appeal Br. 1.
Appeal2016-007245
Application 12/817, 610
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellants appeal from the
Examiner's decision to reject claims 10, 11, 13, 14, and 16-20. 3 We have
jurisdiction under § 6(b ).
We AFFIRM.
SUBJECT MATTER ON APPEAL
The invention "generally relates to systems and methods that are
utilized in connection with the electronic trading of financial instruments."
Spec. ,r 2. Claims 10, 17, and 20 are the independent claims on appeal.
Independent claim 10, reproduced below, is illustrative of the claimed
subject matter:
10. An apparatus comprising:
a processor configured to execute computer-executable
instructions; and
a memory storing a search list and computer-executable
instructions that when executed by the processor cause the
apparatus to perform steps comprising:
receiving a request for quote for a financial
instrument at time t 1, wherein the request for quote
includes an inquiry regarding the current market for the
financial instrument, and wherein the request for quote
does not create an order for the financial instrument;
starting a timer at the time t 1 to countdown for a
predetermined amount of time;
3 Concurrent with the Appeal Brief, Appellants filed an amendment
canceling claims 1--4 and 6. Amendment filed Nov. 13, 2015. The
Examiner has entered this Amendment. Advisory Action mailed Nov. 24,
2015. Accordingly, claims 1--4 and 6 are not before us on appeal.
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determining that a response to the request for quote
has not been received before the timer finishes its
countdown;
as a result of determining that a response to the
request for quote has not been received before the timer
finishes its countdown, determining that the financial
instrument is on the search list;
based on a determination that the financial
instrument is on the search list, causing an implied spread
determination module to determine if the financial
instrument creates an implied spread; and
based on a determination by the implied spread
determination module that the financial instrument creates
an implied spread, sending a response to the request for
quote.
REJECTION
The Examiner rejects claims 10, 11, 13, 14, and 16-20 under
35 U.S.C. § 101 as patent ineligible.
ANALYSIS
An invention is patent eligible if it is 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
patentable." See, e.g., Alice Corp. Pty. Ltd. v. CLS Bank Int 'l, 134 S. Ct.
2347, 2354 (2014) (quoting Ass 'nfor Molecular Pathology v. Myriad
Genetics, Inc., 569 U.S. 576, 589 (2013)).
To "distinguish[] patents that claim laws of nature, natural
phenomena, and abstract ideas from those that claim patent-eligible
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applications of those concepts," the Supreme Court has provided a two-step
framework. Alice, 134 S. Ct. at 2355 (citing Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 566 U.S. 66 (2012)). The first step considers
whether a claim is directed to a patent-ineligible concept, e.g., an abstract
idea. Id. ( citing Mayo, 566 U.S. at 77). If so, the second step considers
whether the claim recites an inventive concept-an element or combination
of elements sufficient to ensure the claim amounts to significantly more than
the abstract idea and transform the nature of the claim into a patent-eligible
application. Id. ( citing Mayo, 566 U.S. at 72-73, 78, 79).
In rejecting the claims under 35 U.S.C. § 101 as patent ineligible, the
Examiner analyzes the claims using this two-step framework. Final Act. 2-
4; Ans. 3-7. More specifically, the Examiner determines the claims are
directed to an abstract idea without significantly more. Final Act. 4; Ans. 4--
7.
Appellants argue claims 10, 11, 13, 14, and 16-20 as a group.
Appeal Br. 4-13; Reply Br. 1-8. \Ve select independent claim 10 as
representative. The remaining claims of the group stand or fall with
independent claim 10. 37 C.F.R. § 4I.37(c)(l)(iv).
Beginning with Appellants' arguments under the first step of the Alice
analysis, Appellants contend the Examiner presented a different alleged
abstract idea in the Answer than that in the Final Office Action, and,
therefore, the Examiner should have designated a new ground of rejection or
reopened prosecution. Reply Br. 6. Per our Rules:
Any request to seek review of the primary examiner~s failure to
designate a rejection as a new ground of rejection in an
examiner1 s ans,ver must be by way of a petition to the Director
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under § 1.181 of this title filed within t\:vo months from the entry
of the examiner~s answer and before the filing of any reply brief.
3 7 C.F .R. § 41.40( a). Furthermore, Appellants' failure to file a petition prior
to filing the Reply Brief constitutes a waiver of the argument. Id. As such,
Appellants have waived any argument that the Examiner's rejection in the
Answer must be designated as a new ground of rejection.
Appellants also argue independent claim 10 is not directed to an
abstract idea. Reply Br. 6-7. In particular, Appellants assert that, like the
claims in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016),
independent claim 10 is directed to solving a problem associated with the
use of a computer system. Id. at 7. Appellants' argument is not convincing.
In determining whether claims are directed to excluded subject matter,
e.g., an abstract idea, under the first step of the Alice analysis, the Federal
Circuit, in Enfish, has explained that "the 'directed to' inquiry applies a
stage-one filter to clahns, considered in light of the specification, based on
whether 'their character as a whole is directed to excluded subiect matter."'
822 F.3d at 1335 (quoting Internet Patents Corp. v. Active 1Vetwork, Inc.,
790 F.3d 1343, 1346 (Fed. Cir. 2015)). For computer-implemented
inventions in particular, such as the present invention, "the first step in the
Alice inquiry ... asks whether the focus of the claims is on the specific
asserted improvement in computer capabilities ... or, instead, on a process
that qualifies as an 'abstract idea' for which computers are invoked merely
as a tool." Id. at 1335-36.
Here, independent claim 10 recites the steps of: receiving a request for
quote for a financial instrument at time t 1 ; starting a timer at t 1 to count
down for a predetermined amount; determining that a response to the request
for quote has not been received before the timer finishes its countdown; as a
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result of determining that a response to the request for quote has not been
received before the timer finishes its countdown, determining that the
financial instrument is on the search list; based on the determination that the
financial instrument is on the search list, determining if the financial
instrument creates an implied spread; and based on the determination that
the financial instrument creates an implied spread, sending a response to the
request for quote. As such, the steps of independent claim 10 result in
sending a response to a request for quote for a financial instrument when
certain conditions are met, namely a response to the request for quote has
not been received in a certain amount of time, the financial instrument is on
the search list, and the financial instrument creates an implied spread.
Appellants' Specification describes: "The present disclosure generally
relates to systems and methods that are utilized in connection with the
electronic trading of financial instruments. More particularly, implied
spread financial transactions may be generated using information from
requests for quotes." Spec. ,r 2. According to the Specification, "the
identification and processing of potential implied spreads inside electronic
trade systems consumes valuable processing resources that could otherwise
be used to process outright order." Id. ,r 9. The Specification also explains
requests for quotes (RFQs) "are sometimes abused" in that "a trader may
flood the market with RFQs in an attempt to ascertain other traders'
positions on particular financial instruments without binding himself to an
order." Id. ,r 10. To overcome these drawbacks, the invention uses RFQs to
assist in detecting implied orders and disseminating responses to RFQs to a
user community. Id. f 12. The Specification, therefore, describes an
improved process for financial instrument trading that uses RFQs to offset
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the processing burden of identifying and processing potential implied
spreads. Notably, the Specification describes a computer network system
(see e.g., id. at Fig. 2), but does not describe an improvement to the
computer network system.
In light of the above, the claimed invention uses computer
components to implement an improved process for financial instrument
trading. The focus of the claimed invention is not on an improvement in
computer capabilities, but rather on a process for financial instrument
trading, for which the computer components are invoked merely as tools to
implement the process. Thus, the character of independent claim 10 as a
whole is directed to "financial instrument trading," which qualifies as an
abstract idea.
Although the Examiner describes the abstract idea as a series of steps
that lead to trading a financial instrument, our reviewing court has explained
that "[a]n abstract idea can generally be described at different levels of
abstraction." Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir.
2016). The concept of buying and selling financial instruments is a
well-established fundamental economic practice. Accordingly, independent
claim 10 is directed to the abstract idea of "financial instrument trading."
Seeing no error in the Examiner's determination that the claims are
directed to an abstract idea under the first step of the Alice analysis, we tum
to Appellants' arguments under the second step. Appellants contend that
independent claim 10 recites significantly more than the abstract idea
because it recites limitations that are not part of the abstract idea.
Appeal Br. 7-9. According to Appellants:
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Claim 10 thus requires that the apparatus be programmed to
perform at least three computational activities that are not part of
the asserted abstract idea: starting a timer, determining if there is
a response to the request for quote before countdown completion,
and determining if the financial instrument is on a search list.
Id. at 9. Appellants' argument does not apprise us of error.
The second step of the Alice framework does not consider whether a
claim recites more than the abstract idea. Rather, the second step considers
"the elements of each cfaim both individually and 'as an ordered
combination' to determine whether the additional elements 'tramlorm the
nature of the claim' into a patent-eligible application." Alice, 134 S. Ct at
2355 (emphasis added) (quoting Aiayo, 566 U.S. at 79, 78). The Supreme
Court has described the second step 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."' Id. (alteration in original) ( quoting
,Mayo, 566 U.S. at 72----73).
Here, the steps reciting starting a timer, determining if there is a
response to the request for quote before countdown completion, and
determining if the financial instrument is on a search list further describe the
abstract idea of "financial instrument trading." They do not, for example,
describe the computer irnp1ementation of the abstract idea. These steps,
therefore, do not transfon11 the nature of independent claim 10 to a
patent-eligible application, and do not amount to significantly more than the
abstract idea.
Appellants also argue that independent claim 10 recites significantly
more than the abstract idea because the claimed invention improves the
functioning of the computer. Appeal Br. 9-10. In particular, Appellants
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Application 12/817, 610
contend that the claimed invention "reduce[ s] the amount of computational
resources directed to determining possible implied spreads, while still
allowing satisfaction of other system requirements, [which] will inherently
improve efficiency." Id. at 10. Appellants' argument is not convincing. As
set forth above, the invention improves financial instrument trading by using
RFQs to offset the processing burden of identifying and processing potential
implied spreads. Spec. ,r,r 9, 10, 12. As such, the improvement is to the
financial trading process, not to the functioning of the computer.
Appellants further argue that independent claim 10 does not recite
operations that are well-understood, routine, and conventional activities
previously known to the industry because the claim is novel and nonobvious.
Appel Br. 11. Appellants similarly assert that, like the claims in DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014),
independent claim 10 recites operations that override events that would be
expected if the computer simply applied the abstract idea. Id. at 12.
Appellants' arguments do not apprise us of error.
Although the second step of the Alice analysis is termed a search for
an "inventive conceptt the analysis is not an evaluation of novelty or
nonobviousness. Rather, as forth above, the second step considers whether
the elements of a claim, individually and as an ordered combination.
. - ;
transform the nature of the claim into a patent-eligible application. Alice,
134 S. Ct. at 2355 (quoting Ji!fayo, 566 U.S. at 79, 78). The question in the
second step, therefore, is whether the implementation of the abstract idea
involves "more than performance of 'well-understood, routine, [and]
conventional activities previously known to the industrv. rn Content - ~
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Extraction & Transmission LLC v. Wells Fargo Bank, N.A., 776 F.3d 1343,
1"4"'1 48 'f' d c-,, 1014· ( ., Af' 1"4 '-' C't · 7" -q _1 1---- ( e . ..ir. - · ) quotrng ~·:r.zce, _, 0, • at ... _,'.)_.).
Here, Appellant conflates the conventionality of the steps being
performed by a processor and the conventionality of the computer functions
required to implement the steps. With respect to the latter, the Examiner
determines, and we agree, that the implementation requires nothing more
than generic computer components performing generic computer functions
that are well-understood, routine, and conventional activities. Ans. 6-7
(citing Spec. ,r,r 12, 22, 23).
Appellants additionally argue "[t]he fact that a claim may require
performing ( or instructions for performing) such fundamental computer
operations is not what defeats patent eligibility." Appeal Br. 11. We agree.
However, as is the case here, the generic computer implementation of an
abstract idea does not amount to significantly more than the abstract idea.
See DDR Holdings, 773 F.3d at 1256 ("[T]hese claims [of prior cases] in
substance were directed to nothing more than the performance of an abstract
business practice on the Internet or using a conventional computer. Such
claims are not patent-eligible.").
In view of the foregoing, Appellants do not apprise us of error in the
Examiner's determination that independent claim 10 is patent-ineligible.
Accordingly, we sustain the rejection of independent claim 10 under
35 U.S.C. § 101, with claims 11, 13, 14 and 16-20 falling therewith.
DECISION
The Examiner's decision to reject claims 10, 11, 13, 14, and 16-20 is
affirmed.
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No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). 37 C.F.R.
§ 1.136(a)(l )(iv).
AFFIRMED
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