Ex Parte Studnitzer et alDownload PDFPatent Trials and Appeals BoardMay 13, 201914334048 - (D) (P.T.A.B. May. 13, 2019) Copy Citation UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. FILING DATE 14/334,048 07/17/2014 12684 7590 05/15/2019 Lempia Summerfield Katz LLC/CME 20 South Clark Street Suite 600 Chicago, IL 60603 FIRST NAMED INVENTOR Ari L. Studnitzer 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. 4672- l 4008BUS 7515 EXAMINER BORLING HAUS, JASON M ART UNIT PAPER NUMBER 3693 NOTIFICATION DATE DELIVERY MODE 05/15/2019 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): mail@lsk-iplaw.com docket-us@lsk-iplaw.com pair_lsk@firsttofile.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Ex parte ARI L. STUDNITZER and AMY MCCORMICK Appeal 2018-000438 Application 14/334,048 1 Technology Center 3600 Before ST. JOHN COURTENAY III, JOHNNY A. KUMAR, and LARRY J. HUME, Administrative Patent Judges. HUME, Administrative Patent Judge. DECISION ON APPEAL This is a decision on appeal under 35 U.S.C. § 134(a) of the Final Rejection of claims 1-54, which are all claims pending in the application. Appellants have canceled claims 55 and 56. We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. 1 According to Appellants, the real party in interest is Chicago Mercantile Exchange Inc. App. Br. 2. Appeal 2018-000438 Application 14/334,048 STATEMENT OF THE CASE2 The Invention Appellants' disclosed embodiments and claimed invention relate to a multiple open order risk management and management of risk of loss during high velocity market movement. Title. "The disclosed embodiments relate to a mechanism which may restrict or otherwise manage the extent of exposure of any particular market participant within the price movement threshold of a market protection system which interrupts market activity during extreme events, as well as to a mechanism for controlling risk of loss." Spec. 89 ("Abstract"). Exemplary Claim Claim 29, reproduced below, is representative of the subject matter on appeal ( emphasis added to contested prior-art limitations): 29. A computer implemented method of protecting a market participant participating in a market for a financial product, the market comprising a set of price levels at which transactions for the financial product are proposed, the method compnsmg: allocating, by a processor for each of a plurality of market participants, an amount of risk to each of a plurality of subsets of price levels of the set of price levels; receiving, by the processor from a first market participant of the plurality of market participants, a first transaction at a first price level within a first subset of price levels, the first 2 Our decision relies upon Appellants' Appeal Brief ("App. Br.," filed Mar. 30, 2017); Reply Brief ("Reply Br.," filed Oct. 13, 2017); Examiner's Answer ("Ans.," mailed Aug. 15, 2017); Final Office Action ("Final Act.," mailed Nov. 4, 2016); Advisory Action ("Adv. Act." mailed Jan. 27, 2017); and the original Specification ("Spec.," filed July 17, 2014). 2 Appeal 2018-000438 Application 14/334,048 transaction having been proposed by the market participant but not yet matched with another proposed transaction counter thereto; reducing, by the processor based on the first transaction, the allocated amount of risk of the first market participant associated with all of the subsets of price levels of the set of price levels containing the first price level; receiving, by the processor, a second transaction at a second price level proposed but not yet matched with another proposed transaction counter thereto, the second transaction having been proposed prior to the conclusion of the first transaction; determining, by the processor, all of the subsets of price levels of the set of price levels which contain the second price level; and prior to the conclusion of the first and second transactions, determining, by the processor, if the allocated amount of risk of all of the subsets of price levels which contain the second price level has been depleted by the reduction based on the first transaction and acting, by the processor, on the second transaction in accordance therewith. Prior Art The Examiner relies upon the following prior art as evidence in rejecting the claims on appeal: Balson et al. ("Balson") US 2003/0033240 Al Feb. 13, 2003 Re} ections on Appeal3 Rl. Claims 1-54 stand rejected under 35 U.S.C. § 101 as being directed to patent-ineligible subject matter. Final Act. 2-3; Ans. 2-3. 3 We note Appellants canceled claims 55 and 56 in an amendment after the Final Rejection. See Adv. Act. 3 Appeal 2018-000438 Application 14/334,048 R2. Claim 49 stands rejected under 35 U.S.C. § l 12(b) as being indefinite. Ans. 3. R3. Claims 1-6, 8-32, and 34-54 stand rejected under 35 U.S.C. § 102(b) and being anticipated by or, in the alternative, under pre-AIA 35 U.S.C. § 103(a) as being unpatentable over Balson. Final Act. 6; Ans. 4. R4. Claims 7 and 33 stand rejected under 35 U.S.C. § 103(a) over Balson in view of the Examiner's taking of Official Notice. Final Act. 9; Ans. 7. CLAIM GROUPING Based on Appellants' arguments (App. Br. 5-20; Reply Br. 1-18) and our discretion under 37 C.F.R. § 41.37(c)(l)(iv), we decide the appeal of patent-ineligible subject matter Rejection Rl of claims 1-54 on the basis of representative method claim 29; and we decide the appeal of anticipation/ obviousness Rejection R3 of claims 1-6, 8-32, and 34-54 on the basis of representative claim 29. We address indefiniteness Rejection R2 of claim 49, infra. Remaining claims 7 and 33 in Rejection R4, not argued separately, stand or fall with the respective independent claim from which they depend. 4 4 "Notwithstanding any other provision of this paragraph, the failure of appellant to separately argue claims which appellant has grouped together shall constitute a waiver of any argument that the Board must consider the patentability of any grouped claim separately." 37 C.F.R. § 41.37( c )(1 )(iv). In addition, when Appellants do not separately argue the patentability of dependent claims, the claims stand or fall with the claims from which they depend. In re King, 801 F.2d 1324, 1325 (Fed. Cir. 1986). 4 Appeal 2018-000438 Application 14/334,048 ISSUES AND ANALYSIS In reaching this decision, we consider all evidence presented and all arguments actually made by Appellants. To the extent Appellants have not advanced separate, substantive arguments for particular claims, or other issues, such arguments are waived. 37 C.F.R. § 41.37(c)(l)(iv). Based upon our review of the record, we find a preponderance of the evidence supports particular arguments advanced by Appellants with respect to indefiniteness Rejection R2 of claim 49 for the specific reasons discussed below. However, we disagree with Appellants' arguments with respect to patent-eligible subject matter Rejection Rl, and obviousness Rejections R3 and R4 of claims 1-54 and, unless otherwise noted, we incorporate by reference herein and adopt as our own: ( 1) the findings and reasons set forth by the Examiner in the action from which this appeal is taken, and (2) the reasons and rebuttals set forth in the Examiner's Answer in response to Appellants' arguments. We highlight and address specific findings and arguments regarding claims 29 and 49 for emphasis as follows. 1. § 101 Rejection R 1 of Claims 1-54 Issue 1 Appellants argue (App. Br. 6-17; Reply Br. 3-14) the Examiner's rejection of claim 29 under 35 U.S.C. § 101 as being directed to patent- ineligible subject matter is in error. These contentions present us with the following issue: 5 Appeal 2018-000438 Application 14/334,048 Under the USPTO's Revised Guidance, informed by our governing case law concerning 35 U.S.C. § 101, is claim 29 patent-ineligible under § 101? PRINCIPLES OF LAW A. 35 U.S.C. § 101 "Whether a claim is drawn to patent-eligible subject matter is an issue of law that we review de novo." SiRF Tech., Inc. v. Int'! Trade Comm 'n, 601 F.3d 1319, 1331 (Fed. Cir. 2010). An invention is patent-eligible if it claims a "new and useful process, machine, manufacture, or composition of matter." 35 U.S.C. § 101.5 However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include implicit exceptions: "[l]aws of nature, natural phenomena, and abstract ideas" are not patentable. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012) (brackets in original) (citing Diamond v. Diehr, 450 U.S. 175, 185 (1981)). In determining whether a claim falls within an excluded category, we are guided by the Supreme Court's two-step framework, described in Mayo and Alice. Alice Corp. v. CLS Bank Int'!, 573 U.S. 208, 217-18 (2014) ( citing Mayo, 566 U.S. at 75-77). In accordance with that framework, we first determine what concept the claim is "directed to." See Alice, 573 U.S. at 219 ("On their face, the claims before us are drawn to the concept of intermediated settlement, i.e., the use of a third party to mitigate settlement 5 This threshold analysis of whether a claim is directed to one of the four statutory categories of invention, i.e., a process, machine, manufacture, or composition of matter, is referred to as "Step l" in the patent-eligibility inquiry under § 101. 6 Appeal 2018-000438 Application 14/334,048 risk."); see also Bilski v. Kappas, 561 U.S. 593, 611 (2010) ("Claims 1 and 4 in petitioners' application explain the basic concept of hedging, or protecting against risk .... "). Concepts determined to be abstract ideas, and thus patent ineligible, include certain methods of organizing human activity, such as fundamental economic practices (Alice, 573 U.S. at 219-20; Bilski, 561 U.S. at 611); mathematical formulas (Parker v. Flook, 437 U.S. 584, 594-95 (1978)); and mental processes (Gottschalkv. Benson, 409 U.S. 63, 69 (1972)). Concepts determined to be patent eligible include physical and chemical processes, such as "molding rubber products" (Diehr, 450 U.S. at 191); "tanning, dyeing, making water-proof cloth, vulcanizing India rubber, smelting ores" (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S. (15 How.) 252, 267-68 (1854))); and manufacturing flour (Benson, 409 U.S. at 69 ( citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))). In Diehr, the claim at issue recited a mathematical formula, but the Supreme Court held "[a] claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula." Diehr, 450 U.S. at 187; see also id. at 191 ("We view respondents' claims as nothing more than a process for molding rubber products and not as an attempt to patent a mathematical formula."). Having said that, the Supreme Court also indicated that a claim "seeking patent protection for that formula in the abstract ... is not accorded the protection of our patent laws, and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment." Id. ( citation omitted) ( citing Benson and Flook); see, e.g., id. at 187 ("It is now commonplace that an application of a law of nature or mathematical 7 Appeal 2018-000438 Application 14/334,048 formula to a known structure or process may well be deserving of patent protection."). Abstract ideas may include, but are not limited to, fundamental economic practices, methods of organizing human activities, and mathematical formulas or relationships. Alice, 573 U.S. at 217-21. Under this guidance, we must therefore ensure at step one that we articulate what the claims are directed to with enough specificity to ensure the step one inquiry is meaningful. Id. at 217 ("[W]e tread carefully in construing this exclusionary principle lest it swallow all of patent law."). If the claim is "directed to" an abstract idea, we tum to the second step of the Alice and Mayo framework, where "we must examine the elements of the claim to determine whether it contains an '"inventive concept'" sufficient to 'transform' the claimed abstract idea into a patent- eligible application." Alice, 573 U.S. at 221 ( citation omitted). "A claim that recites an abstract idea must include 'additional features' to ensure 'that the [claim] is more than a drafting effort designed to monopolize the [abstract idea]."' Id. (alterations in original) (quoting Mayo, 566 U.S. at 77). "[M]erely requir[ing] generic computer implementation[] fail[ s] to transform that abstract idea into a patent-eligible invention." Id. B. USPTO Revised Guidance The PTO recently published revised guidance in the Federal Register concerning the application of§ 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (January 7, 2019) (hereinafter "Revised Guidance") (https ://www. govinfo. gov/ content/pkg/FR-2019-01- 07/pdf/2018-28282.pdf). 8 Appeal 2018-000438 Application 14/334,048 Under the Revised Guidance, we first look to whether the claim recites: (1) any judicial exceptions, including certain groupings of abstract ideas (i.e., mathematical concepts, certain methods of organizing human activity such as a fundamental economic practice, or mental processes); 6 and (2) additional elements that integrate the judicial exception into a practical application (see Manual for Patent Examining Procedure ("MPEP") §§ 2106.0S(a)-(c), (e)-(h)). 7 Only if a claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application, do we then look to whether the claim: (3) adds a specific limitation beyond the judicial exception that are not "well-understood, routine, conventional" in the field (see MPEP § 2106.0S(d)); or (4) simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception. 8 See Revised Guidance. Step 2A(i) -Abstract Idea Informed by our judicial precedent, the Revised Guidance extracts and synthesizes key concepts identified by the courts as abstract ideas to explain 6 Referred to as "Revised Step 2A, Prong l" in the Revised Guidance (hereinafter "Step 2A(i)"). 7 Referred to as "Revised Step 2A, Prong 2" in the Revised Guidance (hereinafter "Step 2A(ii)"). 8 Items (3) and (4) continue to be collectively referred to as "Step 2B" of the Supreme Court's two-step framework, described in Mayo and Alice. 9 Appeal 2018-000438 Application 14/334,048 that the abstract idea exception includes the following groupings of subject matter, when recited as such in a claim limitation: (a) Mathematical concepts-mathematical relationships, mathematical formulas or equations, mathematical calculations; (b) Certain methods of organizing human activity- fundamental economic principles or practices (including hedging, insurance, mitigating risk); commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations); managing personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions); and ( c) Mental processes-concepts performed in the human mind (including an observation, evaluation, judgment, opinion). Under the Revised Guidance, if the claim does not recite a judicial exception (a law of nature, natural phenomenon, or subject matter within the enumerated groupings of abstract ideas above), then the claim is patent- eligible at Step 2A(i). This determination concludes the eligibility analysis, except in situations identified in the Revised Guidance. 9 However, if the claim recites a judicial exception (i.e., an abstract idea enumerated above, a law of nature, or a natural phenomenon), the claim requires further analysis for a practical application of the judicial exception in Step 2A(ii). 9 In the rare circumstance in which an examiner believes a claim limitation that does not fall within the enumerated groupings of abstract ideas should nonetheless be treated as reciting an abstract idea, the procedure described in of the Guidance for analyzing the claim should be followed. See Guidance, Section III.C. 10 Appeal 2018-000438 Application 14/334,048 Step 2A(ii) - Practical Application If a claim recites a judicial exception in Step 2A (i), we determine whether the recited judicial exception is integrated into a practical application of that exception in Step 2A(ii) by: (a) identifying whether there are any additional elements recited in the claim beyond the judicial exception( s ); and (b) evaluating those additional elements individually and in combination to determine whether they integrate the exception into a practical application. The seven identified "practical application" sections of the MPEP, 10 cited in the Revised Guidance under Step 2A(ii), are: (1) MPEP § 2106.05(a) Improvements to the Functioning of a Computer or To Any Other Technology or Technical Field (2) MPEP § 2106.05(b) Particular Machine (3) MPEP § 2106.05(c) Particular Transformation (4) MPEP § 2106.05(e) Other Meaningful Limitations (5) MPEP § 2106.05(±) Mere Instructions To Apply An Exception (6) MPEP § 2106.05(g) Insignificant Extra-Solution Activity (7) MPEP § 2106.05(h) Field of Use and Technological Environment 11 If the recited judicial exception is integrated into a practical application as determined under one or more of the MPEP sections cited 10 See MPEP § 2106.05(a)-(c), (e)-(h). Citations to the MPEP herein refer to revision [R-08.2017]. 11 MPEP §§ 2106.05(a), (b), (c), and (e) are indicative of integration into a practical application, while MPEP §§ 2106.05(±), (g), and (h) relate to limitations that are not indicative of integration into a practical application. 11 Appeal 2018-000438 Application 14/334,048 above, then the claim is not directed to the judicial exception, and the patent- eligibility inquiry ends. If not, then analysis proceeds to Step 2B. Step 2B - "Inventive Concept" or "Significantly More" Under our precedent, it is possible that a claim that does not "integrate" a recited judicial exception under Step 2A(ii) is nonetheless patent eligible. For example, the claim may recite additional elements that render the claim patent eligible even though a judicial exception is recited in a separate claim element. 12 The Federal Circuit has held claims eligible at the second step of the Alice/Mayo test (US PTO Step 2B) because the additional elements recited in the claims provided "significantly more" than the recited judicial exception (e.g., because the additional elements were unconventional in combination). 13 Therefore, if a claim has been determined to be directed to a judicial exception under Revised Step 2A, we must evaluate the additional elements individually and in combination under Step 2B to determine whether they provide an inventive concept (i.e., whether the additional elements amount to significantly more than the exception itself). 14 12 See, e.g., Diehr, 450 U.S. at 187. 13 See, e.g., Amdocs (Israel), Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1300, 1304 (Fed. Cir. 2016); BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1349-52 (Fed. Cir. 2016); DDR Holdings v. Hotels.com, L.P., 773 F.3d 1245, 1257-59 (Fed. Cir. 2014). 14 The patent eligibility inquiry may contain underlying issues of fact. Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1325 (Fed. Cir. 2016). In particular, "[t]he question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact." Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018). 12 Appeal 2018-000438 Application 14/334,048 Under the Revised Guidance, we must consider in Step 2B whether an additional element or combination of elements: (1) "Adds a specific limitation or combination of limitations that are not well-understood, routine, conventional activity in the field, which is indicative that an inventive concept may be present;" or (2) "simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception, which is indicative that an inventive concept may not be present." See Revised Guidance, III.B. 15 In the Step 2B analysis, an additional element ( or combination of elements) is not well-understood, routine or conventional unless the examiner finds an evidentiary basis, and expressly supports a rejection in writing with, one or more of the following: 1. A citation to an express statement in the specification or to a statement made by an applicant during prosecution that demonstrates the well-understood, routine, conventional nature of the additional element(s) .... 2. A citation to one or more of the court decisions discussed in MPEP § 2106.0S(d)(II) as noting the well- 15 In accordance with existing Step 2B guidance, an Examiner's finding that an additional element ( or combination of elements) is well understood, routine, conventional activity must be supported with at least one of the four specific types of evidence required by the USPTO Berkheimer Memorandum, as shown above. For more information concerning evaluation of well-understood, routine, conventional activity, see MPEP § 2106.0S(d), as modified by the USPTO Berkheimer Memorandum (USPTO Commissioner for Patents Memorandum dated Apr. 19, 2018, "Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.)" (hereinafter "Berkheimer Memo"). 13 Appeal 2018-000438 Application 14/334,048 understood, routine, conventional nature of the additional element( s ). 3. A citation to a publication that demonstrates the well-understood, routine, conventional nature of the additional element( s ) .... 4. A statement that the examiner is taking official notice of the well-understood, routine, conventional nature of the additional element(s) .... See Berkheimer Memo. The analysis in Step 2B further determines whether an additional element or combination of elements: (a) Adds a specific limitation or combination of limitations that are not well-understood, routine, conventional activity in the field, which is indicative that an inventive concept may be present; or (b) simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception, which is indicative that an inventive concept may not be present. Revised Guidance, and see Berkheimer Memo. If the Examiner or the Board determines under Step 2B that the element ( or combination of elements) amounts to significantly more than the exception itself, the claim is eligible, thereby concluding the eligibility analysis. However, if a determination is made that the element and combination of elements does not amount to significantly more than the exception itself, the claim is ineligible under Step 2B, and the claim should be rejected for lack of subject matter eligibility. 14 Appeal 2018-000438 Application 14/334,048 ANALYSIS Step 1 Claim 29, as a method (process) claim, recites one of the enumerated categories of eligible subject matter in 35 U.S.C. § 101. Therefore, the issue before us is whether it is directed to a judicial exception without significantly more. Step 2A(i): Does the Claim Recite a Judicial Exception? The Examiner determined: The claimed invention is directed to "protecting a market participant participating in a market for a financial product, the market comprising a set of price levels at which transactions for the financial product may be proposed." see Claim 29, preamble. As such, the claimed invention is directed toward a fundamental economic practice and thus an abstract idea. Ans. 2; see also Final Act. 3. We conclude claim 1 does not recite the judicial exceptions of either natural phenomena or laws of nature. We evaluate, de nova, whether claim 1 recites an abstract idea based upon the Revised Guidance. Claim 29 recites, in pertinent part, "[a] computer implemented method of protecting a market participant participating in a market for a financial product, the market comprising a set of price levels at which transactions for the financial product are proposed," that includes the steps of: (1) "allocating ... for each of a plurality of market participants, an amount of risk to each of a plurality of subsets of price levels of the set of price levels." (2) "receiving ... from a first market participant of the plurality of market participants, a first transaction at a first price 15 Appeal 2018-000438 Application 14/334,048 level within a first subset of price levels, the first transaction having been proposed by the market participant but not yet matched with another proposed transaction counter thereto." (3) "reducing ... based on the first transaction, the allocated amount of risk of the first market participant associated with all of the subsets of price levels of the set of price levels containing the first price level." ( 4) "receiving ... a second transaction at a second price level proposed but not yet matched with another proposed transaction counter thereto, the second transaction having been proposed prior to the conclusion of the first transaction." ( 5) "determining ... all of the subsets of price levels of the set of price levels which contain the second price level." ( 6) "prior to the conclusion of the first and second transactions, determining ... if the allocated amount of risk of all of the subsets of price levels which contain the second price level has been depleted by the reduction based on the first transaction and acting ... on the second transaction in accordance therewith." Claims App 'x. The Specification provides context as to what the claimed invention is directed to. In this case, the Specification discloses a need [t]o mitigate risk and ensure a fair and balanced market, electronic trading systems need to provide mechanisms to rapidly detect and respond to situations where a market is not operating in a fair and balanced manner or otherwise where the market value is not reflective of a true consensus of the value of the traded products among the market participants." Spec. ,i 8. Appellants' Abstract discloses: The disclosed embodiments relate to a mechanism which may restrict or otherwise manage the extent of exposure of any particular market participant within the price movement 16 Appeal 2018-000438 Application 14/334,048 threshold of a market protection system which interrupts market activity during extreme events, as well as to a mechanism for controlling risk of loss which acts to reduce or otherwise manage a market participant's ability to concentrate their exposure, or risk of loss, within a range of price levels and/or within correlated products that could be executed upon before the market participant, or other entity responsible for the activities thereof, e.g. a risk manager, has an opportunity to react to rapid market movement. Such a mechanism, once the market protection system had activated, e.g. by placing the market in reserve, may permit the market participant, or other party, the opportunity to modify or cancel unexecuted orders to mitigate potential losses. Spec. 89. Appellants argue: [T]he claims are directed to a specific, novel and patentable system for controlling the processing, i.e. matching, of transactions at groups of different price levels in view of an allocation of a quantified amount of risk for those grouped price levels which is reduced while a transaction is waiting to be accepted/processed, i.e. evaluated for a match with a counter transaction ( or otherwise canceled) and increased once a transaction has been matched or canceled, so as to, for example, control the number of unprocessed/unmatched transactions, or cumulative risk thereof, which may be allowed to be active/in that state at a set of price levels for a given participant, further subject to operation of a market operation interruption mechanism to control the number of price levels over which a participant may submit transactions. App. Br. 6. Under the broadest reasonable interpretation standard, 16 we conclude this type of recited activity in limitations (1) through ( 6), when viewed as a 16 During prosecution, claims must be given their broadest reasonable interpretation when reading claim language in light of the specification as it 17 Appeal 2018-000438 Application 14/334,048 whole, and in light of Appellants' arguments quoted above, would occur whenever it is desired to mitigate risk to a market participant of price levels not being reflective of a true consensus of the value of the traded products among the market participants. See Final Act. 3; Ans. 2. We conclude such analyses and actions would generally be carried out whenever it is desired to allocate risk to subsets of price levels related to proposed transactions and their corresponding price levels before execution of the transactions. We further conclude the steps in each of limitations ( 1) through ( 6), quoted above, aside from the recitation of a "processor" and a "memory," includes longstanding conduct that existed well before the advent of computers and the Internet, and could be carried out by a human with pen and paper. See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011). 17 would be interpreted by one of ordinary skill in the art. In re Am. Acad. of Sci. Tech. Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). Under this standard, we interpret claim terms using "the broadest reasonable meaning of the words in their ordinary usage as they would be understood by one of ordinary skill in the art, taking into account whatever enlightenment by way of definitions or otherwise that may be afforded by the written description contained in the applicant's specification." In re Morris, 127 F.3d 1048, 1054 (Fed. Cir. 1997). 17 Our reviewing court recognizes 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). That need not and, in this case does not, "impact the patentability analysis." Id. at 1241. Further, "An abstract idea can generally be described at different levels of abstraction .... The Board's slight revision of its abstract idea analysis does not impact the patentability analysis." Id. Moreover, merely combining several abstract ideas does not render the combination any less abstract. RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1327 (Fed. Cir. 2017) ("Adding one abstract idea (math) to another abstract idea ... does not render the claim 18 Appeal 2018-000438 Application 14/334,048 Appellants further allege, "even if the claims are directed to an abstract idea Appellants submit that the claims are directed to a specific mechanism/application which does not entirely pre-empt the abstract idea, e.g. managing risk exposure in a financial market." App. Br. 7. The Examiner responds by noting, and we agree, "preemption is not a standalone test for eligibility." Ans. 10 ( citations omitted); and see buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (collecting cases); Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1345 (Fed. Cir. 2013); Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 13 71, 13 79 (Fed. Cir. 2015) ("While preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility"). Further regarding preemption, "[w]here a patent's claims are deemed only to disclose patent ineligible subject matter under the Aiayo framework, as they are in this case, preemption concerns are fully addressed and :made moot" Ariosa, 788 F.3d at 1379; see also OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362-63 (Fed. Cir. 2015) ("that 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"). non-abstract."); see also FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093-94 (Fed. Cir. 2016) (determining the pending claims were directed to a combination of abstract ideas). Thus, the patentability analysis in this Appeal does not tum on exactly how various limitations are characterized as being abstract, i.e., as either an abstract "mathematical concepts," "mental processes," or "certain methods of organizing human activity." For example, limitations (3), (5), and (6) can alternatively be individually characterized as reciting mental processes. However, the end result remains the same in this Appeal-the claim as a whole still recites an abstract idea. See also Ans. 9-10. 19 Appeal 2018-000438 Application 14/334,048 Appellants also argue the claims are patent-eligible in view of McRO: Appellants further point out that "processes that automate tasks that humans are capable of performing are patent eligible if properly claimed .... " "An 'improvement in computer- related technology' is not limited to improvements in the operation of a computer or a computer network per se .... An indication that a claim is directed to an improvement in computer-related technology may include ... a particular solution to a problem or a particular way to achieve a desired outcome defined by the claimed invention, as opposed to merely claiming the idea of a solution or outcome." App. Br. 14 (citing McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016)). We disagree, as discussed below. In McRO, the claims were not held to be abstract because they recited a "specific ... improvement in computer animation" using "unconventional rules that relate[ d] sub-sequences of phonemes, timings, and morph weight sets." McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1302- 03, 1307-08, 1314-15 (Fed. Cir. 2016). In McRO, "the incorporation of the claimed rules, not the use of the computer," improved an existing technological process. Id. at 1314. Here, we do not find the claims in McRO to be sufficiently analogous to claim 29 on appeal. Claim 29 recites "allocating ... an amount of risk to each of a plurality of subsets of price levels;" "receiving ... a first transaction at a first price level ... first transaction having been proposed by the market participant but not yet matched with another proposed transaction counter thereto;" "reducing ... based on the first transaction, the allocated amount of risk of the first market participant associated with all of the subsets of price levels of the set of price levels containing the first price 20 Appeal 2018-000438 Application 14/334,048 level;" "receiving ... a second transaction at a second price level proposed but not yet matched with another proposed transaction counter thereto, the second transaction having been proposed prior to the conclusion of the first transaction;" "determining ... all of the subsets of price levels of the set of price levels which contain the second price level;" and "prior to the conclusion of the first and second transactions, determining ... if the allocated amount of risk of all of the subsets of price levels which contain the second price level has been depleted by the reduction based on the first transaction and acting ... on the second transaction in accordance therewith." Claim 29. We conclude allocating risk to a transaction price level and determining whether the allocated amount of risk has been depleted are not equivalent to using "unconventional rules" as in McRO to improve a technological process. Appellants also urge us to consider the Federal Circuit's holding in Enfzsh as relevant in this Appeal. 18 "According to the Federal Circuit, claims are not directed to an abstract idea where ' ... the plain focus of the claims is on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity .... Rather, they are directed to a specific improvement to the way computers operate."' App. Br. 15-16 ( citation omitted). The Federal Circuit held, in pertinent part, "we find it relevant to ask whether the claims are directed to an improvement to computer functionality versus being 18 It appears Appellants may be relying, at least in part, upon Enfzsh in their "significantly more" analysis, i.e., Step 2A, rather than the "abstract idea" analysis in Step 2A. See App. Br. 15-16. 21 Appeal 2018-000438 Application 14/334,048 directed to an abstract idea, even at the first step of the Alice analysis." Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). "Accordingly, we find that the claims at issue in this appeal are not directed to an abstract idea within the meaning of Alice. Rather, they are directed to a specific improvement to the way computers operate, embodied in the self- referential table." Id. at 1336. In Enfzsh, our reviewing court held claims directed to a self-referential logical model for a computer database patent-eligible under step one (i.e., referred to herein as Step 2A) of Alice. Enfzsh, 822 F.3d at 1330. The disclosed technique enabled faster searching and more effective storage of data than previous methods. Id. at 1333. The court found the claims directed to "a specific improvement to the way computers operate, embodied in the self-referential table" (id. at 1336), and explained that the claims are "not simply directed to any form of storing tabular data, but instead are specifically directed to a self-referential table for a computer database" that functions differently than conventional databases. Id. at 1337. Thus, when properly interpreted, Enfzsh does not support Appellants' contention that the claims do not recite an abstract idea because the claims in Enfzsh are not sufficiently analogous to claim 29 on appeal which does not provide a specific improvement to the way computers operate. Thus, under Step 2A(i), we agree with the Examiner that claim 29's "computer implemented method of protecting a market participant participating in a market for a financial product, the market comprising a set of price levels at which transactions for the financial product are proposed" recites an abstract idea. Thus, like the concept of intermediated settlement 22 Appeal 2018-000438 Application 14/334,048 in Alice, and the concept of hedging in Bilski, we conclude the concept of allocating and accounting for risk recited in Appellants' claims "is a fundamental economic practice long prevalent in our system of commerce." Alice, 573 U.S. at 216 (citations and internal quotation marks omitted). We conclude claim 29, as a whole, under our Revised Guidance, recites a judicial exception of certain methods of organizing human activity, i.e., a fundamental economic practice, and thus is an abstract idea. Step 2A(ii): Judicial Exception Integrated into a Practical Application? If the claims are directed to a patent-ineligible concept, as we conclude above, we proceed to the "practical application" Step 2A(ii) in which we determine whether the recited judicial exception is integrated into a practical application of that exception by: (a) identifying whether there are any additional elements recited in the claim beyond the judicial exception(s); and (b) evaluating those additional elements individually and in combination to determine whether they integrate the exception into a practical application. Appellants argue: [T]he claims, as opposed to being directed to an abstract idea, instead relate to a practical application which mitigates a likelihood of a participant rapidly submitting an excess of transactions which they may not want to be processed and be unable to take corrective action when the market changes rapidly, a trait that is peculiar to electronic trading systems. The claimed invention provides a specific implementation which effectively acts as a gatekeeper or throttle/rate limiter on the volume of transactions any given user of the system may have pending processing at any given time within the threshold they are otherwise protected by market protection mechanisms but 23 Appeal 2018-000438 Application 14/334,048 does not otherwise limit the volume of transactions of that participant which may be processed overall. App. Br. 11. On this record, Appellants have not shown under the guidance of Manual of Patent Examining Procedure section 2106.05(a) ("Improvements to the Functioning of a Computer or to Any Other Technology or Technical Field") or section 2106.05( e )("Other Meaningful Limitations") that the recited abstract ideas are integrated into a practical application. Nor do Appellants advance any arguments in the Brief( s) that are directed to the Bilski machine-or-transformation test, which would only be applicable to the method (process) claims on appeal. See MPEP §§ 2106.05(b) (Particular Machine) and 2106.05( c) (Particular Transformation). Moreover, MPEP sections 2106.05(±) (Mere Instructions To Apply An Exception) and 2106.05(h) (Field of Use and Technological Environment), are relevant in determining the claims do not integrate the abstract idea into a practical application based upon Appellants' arguments above. 19 Therefore, we conclude claim 29, as a whole, recites an abstract idea as identified in Step 2A(i), supra, and none of the limitations integrate the abstract idea into a practical application as determined under one or more of the MPEP sections cited above. The claim as a whole merely uses the generically claimed "processor," to implement the abstract idea or, alternatively, merely uses a processor as a tool to perform the abstract idea. 19 We note these cited MPEP sections relate to limitations that are not indicative of integration into a practical application. 24 Appeal 2018-000438 Application 14/334,048 Step 2B - "Inventive Concept" or "Significantly More" If the claims are directed to a patent-ineligible concept, as we conclude above, we proceed to the "inventive concept" step. For Step 2B we must "look with more specificity at what the claim elements add, in order to determine 'whether they identify an "inventive concept" in the application of the ineligible subject matter' to which the claim is directed." Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1258 (Fed. Cir. 2016) (quoting Elec. Power Grp., 830 F.3d at 1353). In applying step two of the Alice analysis, our reviewing court guides we must "determine whether the claims do significantly more than simply describe [the] abstract method" and thus transform the abstract idea into patentable subject matter. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014). We look to see whether there are any "additional features" in the claims that constitute an "inventive concept," thereby rendering the claims eligible for patenting even if they are directed to an abstract idea. Alice, 573 U.S. at 221. Those "additional features" must be more than "well-understood, routine, conventional activity." Mayo, 566 U.S. at 79. Limitations referenced in Alice that are not enough to qualify as "significantly more" when recited in a claim with an abstract idea include, as non-limiting or non-exclusive examples: adding the words "apply it" ( or an equivalent) with an abstract idea20; mere instructions to implement an 20 Alice, 573 U.S. at 221-23. 25 Appeal 2018-000438 Application 14/334,048 abstract idea on a computer21 ; or requiring no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional activities previously known to the industry.22 Appellants argue, "while the Examiner may not view the additional elements as adding significantly more, 'those additional elements when viewed in combination' most certainly 'amount to significantly more than the exception by meaningfully limiting the judicial exception."' App. Br. 13. "Appellants submit that the [recited allocating, receiving, reducing, and determining steps of claim 29] form a specific solution/application which have NOT been used before and therefore are not well understood, routine or conventional in the art." App. Br. 13-14. We are not persuaded by Appellants' arguments, as discussed below. Appellants' reliance on DDR (App. Br. 15) is misplaced as the recited claims do not improve the computer. In DDR, the claims at issue involved, inter alia, "web pages displays [with] at least one active link associated with a commerce object associated with a buying opportunity of a selected one of a plurality of merchants" (claim 1 of US 7,818,399). The Federal Circuit found the claims in DDR to be patent-eligible under step two of the Alice test because "the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks." DDR Holdings, 773 F.3d at 1257. Specifically, the Federal Circuit found the claims addressed the "challenge of retaining 21 Alice, 573 U.S. at 221, e.g., simply implementing a mathematical principle on a physical machine, namely a computer (citing Mayo, 566 U.S. at 84-85). 22 Alice, 573 U.S. at 225, e.g., using a computer to obtain data, adjust account balances, and issue automated instructions. 26 Appeal 2018-000438 Application 14/334,048 control over the attention of the customer in the context of the Internet." Id. at 1258. We find the rejected claims are dissimilar to DDR's web page with an active link, and the Specification does not support the view that the computer related claim elements are unconventional. See Spec. ,-J,-J 35, 39-43, and 46. Evaluating representative claim 29 under step 2 of the Alice analysis, we conclude it lacks an inventive concept that transforms the abstract idea relating to certain methods of organizing human activity, i.e., a fundamental economic practice, into a patent-eligible application of that abstract idea. The Manual of Patent Examining Procedure, based upon our precedential guidance, provides additional considerations with respect to analysis of the well-understood, routine, and conventional nature of the claimed computer-related components. Another consideration when determining whether a claim recites significantly more than a judicial exception is whether the additional elements amount to more than a recitation of the words "apply it" ( or an equivalent) or are more than mere instructions to implement an abstract idea or other exception on a computer. As explained by the Supreme Court, in order to transform a judicial exception into a patent-eligible application, the additional element or combination of elements must do "'more than simply stat[ e] the uudicial exception] while adding the words 'apply it"'. Alice Corp. v. CLS Bank, 573 U.S. 134 S. Ct. 2347, 2357, 110 USPQ2d 1976, 1982-83 (2014) (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72, 101 USPQ2d 1961, 1965). Thus, for example, claims that amount to nothing more than an instruction to apply the abstract idea using a generic computer do not render an abstract idea eligible. Alice Corp., 134 S. Ct. at 2358, 110 USPQ2d at 1983. See also 134 S. Ct. at 2389, 110 USPQ2d at 1984 (warning against a§ 101 analysis that turns on "the draftsman's art") .... 27 Appeal 2018-000438 Application 14/334,048 In Alice Corp., the claim recited the concept of intermediated settlement as performed by a generic computer. The Court found that the recitation of the computer in the claim amounted to mere instructions to apply the abstract idea on a generic computer. 134 S. Ct. at 2359-60, 110 USPQ2d at 1984. The Supreme Court also discussed this concept in an earlier case, Gottschalk v. Benson, 409 U.S. 63, 70, 175 USPQ 673, 676 (1972), where the claim recited a process for converting binary-coded decimal (BCD) numerals into pure binary numbers. The Court found that the claimed process had no substantial practical application except in connection with a computer. Benson, 409 U.S. at 71-72, 17 5 USPQ at 67 6. The claim simply stated a judicial exception ( e.g., law of nature or abstract idea) while effectively adding words that "apply it" in a computer. Id. MPEP § 2106.05(±) ("Mere Instructions To Apply An Exception"). The patent eligibility inquiry may contain underlying issues of fact. Mortg. Grader, 811 F.3d at 1325. In particular, "[t]he question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact." Berkheimer, 881 F.3d at 1368. As evidence of the conventional nature of the recited "computer- implemented method" in claim 29, that includes use of a "processor" ( and similarly in system claims 1 and 3), the Specification discloses: Each computer device ... which may comprise a computer 400 described in more detail below with respect to Figure 4, may include a central processor that controls the overall operation of the computer and a system bus that connects the central processor to one or more conventional components, such as a memory, data storage, network card or modem. Each computer device ... may also include a variety of interface units and drives for reading and writing data or files and communicating with other computer devices and with the exchange computer 28 Appeal 2018-000438 Application 14/334,048 system 100. Depending on the type of computer device ... , a user can interact with the computer with a keyboard, pointing device, touch interface, microphone, pen device or other input device now available or later developed. Spec. ,i 40; see also Spec. ,i,i 39, 41-43. Thus, because the Specification describes the additional elements in general terms, without describing the particulars, we conclude the claim limitations may be broadly but reasonably construed as reciting conventional computer components and techniques, particularly in light of Appellants' Specification, as quoted above. 23 We conclude the claims fail the Step 2B analysis because claim 29, in essence, merely recites a judicial exception, i.e., an abstract idea, which is implemented on a computer. Therefore, because the claims fail under both the Step 2A and Step 2B analyses, we sustain the Examiner's§ 101 rejection of independent claims 1, 3, and 29, and grouped claims 2, 4-28, and 30-54, not argued separately, and which fall therewith. See Claim Grouping, supra. 2. § l 12(b) Rejection R2 of Claim 49 Issue 2 Appellants argue (Reply Br. 1-3) the Examiner's rejection of claim 49 under 35 U.S.C. § l 12(b) as being indefinite is in error. These contentions present us with the following issue: 23 Claim terms are to be given their broadest reasonable interpretation, as understood by those of ordinary skill in the art and taking into account whatever enlightenment may be had from the Specification. In re Morris, 127 F.3d 1048, 1054 (Fed. Cir. 1997). 29 Appeal 2018-000438 Application 14/334,048 Did the Examiner err in concluding that claim 49 is indefinite for reciting "an electronic trading system operative to attempt to match an incoming transaction for the financial product with a previously received but unsatisfied transaction counter thereto," as recited in claim 49? (Emphasis added). Analysis The Examiner states, "[a] system either matches incoming transactions or does not match incoming transactions. What is meant by "attempt[ing] to match"? Does Applicant mean that the incoming transactions are matched (i.e. determined to be counter to one another) but does not process or otherwise execute the transaction?" Ans. 3. Appellants respond: Appellants respectfully disagree and again submit that one of ordinary skill in the art would understand the matching process by which an electronic trading system determines whether an incoming trade order may trade against previously received but not yet satisfied trade orders. Further, one of ordinary skill in the art would appreciate that matching is a well-known process and that the claimed "attempt to match" defines at least the initiation of this process by which an electronic trading system determines whether an incoming trade order may trade against previously received but not yet satisfied trade orders. This is further made clear by the claimed invention's interruption of this matching process which one of ordinary skill in the art would understand means to prevent the matching process from completing. One of ordinary skill in the art would understand that how matching is actually accomplished is not relevant to the claimed invention, only that it is a process which is started and which may be prevented from completion as claimed. Reply Br. 2-3. 30 Appeal 2018-000438 Application 14/334,048 Appellants' arguments are persuasive. We apply the approach for assessing indefiniteness approved by the Federal Circuit in In re Packard, 751 F.3d 1307, 1310 (Fed. Cir. 2014). In re McAward, Appeal 2015- 006416, 2017 WL 3669566, *5 (PTAB Aug. 25, 2017) (precedential). A claim is indefinite when it contains words or phrases whose meaning is unclear. Packard, 751 F.3d at 1310, 1314. Claims are required to be cast in clear, as opposed to ambiguous, vague, or indefinite terms. Id. at 1313; see also MPEP § 2173.02. Here, the Examiner has not made findings showing that what is being claimed would not have been clear to a skilled artisan, but rather merely presents the question "[ d]oes Applicant mean that the incoming transactions are matched (i.e. determined to be counter to one another) but does not process or otherwise execute the transaction?" Ans. 3. As Appellants point out, "one of ordinary skill in the art would appreciate that matching is a well-known process and that the claimed 'attempt to match' defines at least the initiation of this process." See Reply Br. 2. Because we find claim 49 is cast in clear terms, we reverse the Examiner's rejection of this claim under 35 U.S.C. § § l 12(b ). 3. § 102(b)/103(a) Rejection R3 of Claims 1-6, 8-32, and 34-54 Issue 3 Appellants argue (App. Br. 17-20; Reply Br. 14-18) the Examiner's rejection of claim 29 under 35 U.S.C. § 102(b) as being anticipated by or, alternatively, under 35 U.S.C. § 103(a), as being obvious over Balson is in error. These contentions present us with the following issue: Did the Examiner err in finding the cited prior art discloses under § 102 or, alternatively, under§ 103, teaches or suggests, "[a] computer 31 Appeal 2018-000438 Application 14/334,048 implemented method of protecting a market participant participating in a market for a financial product, the market comprising a set of price levels at which transactions for the financial product are proposed" that includes, inter alia, the limitations of "allocating, by a processor for each of a plurality of market participants, an amount of risk to each of a plurality of subsets of price levels of the set of price levels," wherein prior to the conclusion of the first and second transactions, determining, by the processor, if the allocated amount of risk of all of the subsets of price levels which contain the second price level has been depleted by the reduction based on the first transaction and acting, by the processor, on the second transaction in accordance therewith, as recited in claim 29?24 Analysis The Examiner finds Balson discloses the disputed "allocating" step (Final Act. 6 ( citing Balson Fig. 2, ,i,i 5-6, 32, 37, and 42)), and also discloses the disputed temporal "determining" step. Final Act. 7 ( citing Balson Fig. 7, ,i,i 6-8, 37, 42, and 63). 24 With respect to the alternative § 103 rejection over Balson, the Examiner does not identify any deficiency in the disclosure of Balson or any motivation to modify Balson in any manner to support an obviousness rejection. Instead, the Examiner merely states, "[ r Jegarding Claims 1-6, 8- 28 and 49-56, such claims recite substantially similar limitations as claimed in previously rejected claims and, therefore, would have been obvious based upon previously rejected claims or are otherwise disclosed by the prior art applied in previously rejected claims." Final Act. 9 ( emphasis added). We find this level of analysis is inadequate to support a prima facie case of obviousness under§ 103. Hence, we only address the§ 102 rejection of these claims in this Decision. 32 Appeal 2018-000438 Application 14/334,048 Appellants contend. "[i]n particular, Balson does not teach or suggest allocating risk to multiple subsets of price levels or evaluating whether a risk of one or more received but not yet accepted, i.e., proposed/unprocessed/ unmatched, transactions to any price level with a subset thereof, exceed an allocated amount of risk to that subset as a whole, as claimed." App. Br. 18. Appellants then quote paragraphs 302 and 313 of the Specification in support of this argument. Id. Appellants further argue: In other words, Appellants' claimed invention acts as a gate keeper or rate limiter which limits the number of "proposed but not yet matched", i.e. pending/unprocessed transactions that a given trader may submit but otherwise does not limit the overall volume of transactions which the trader may complete. For any such transactions which are matched/completed, the margining system described above ensures that the parties fulfill their obligations and protects the other parties from any one party's failure to do so. Balson does not address this gate keeping function to limit the number of proposed but not yet matched transactions. Instead, Balson discloses systems which prevent a participant from[] entering into positions based on the risk of loss of the positions they already hold, i.e. based on completed/processed/ matched transactions. That is, once a party reaches a certain level of obligations, the system of Balson prevents that party from undertaking any further obligations. Appellants' claimed invention effectively monitors for "unmatched" transactions and allows or blocks submission of new transactions based thereon. In this manner, the claimed invention, as opposed to the system disclosed in the cited reference, can mitigate the number of pending/unmatched transactions based on the number of other pending/unmatched transactions. The margin mechanisms, as disclosed in the cited references, or as known in the art, simply do not do this and it is 33 Appeal 2018-000438 Application 14/334,048 not simply a matter of design or resequencing of processing steps. App. Br. 19. We are not persuaded. We are not persuaded by Appellants' arguments because, as found by the Examiner: Balson discloses allocating risk ( available position risk/collateral) to subsets of price levels (market values). see para. 3 7. Balson further discloses receiving a first transaction (proposed order) at a first price level (market value of order), the first transaction (proposed order) not yet matched (not yet made available for forming a contract) with another proposed counter transaction. see para. 37. Balson further discloses allocating risk (position risk/collateral) to the proposed transaction (proposed order) and evaluating the risk (position risk) of proposed transaction (proposed order), exceeds an allocated amount of risk (available position risk/collateral). see para. 11. If the risk (position risk) is acceptable the order is matched (made available for forming a contract), if not then the order is not matched (not made available for forming a contract). see para. 37. Ans. 16 (citing Balson ,-J,-J 11, 37). The Examiner further points out Appellants' reliance upon the Specification to provide discussion of how exemplary embodiments function "fails to specifically point out how the language of the claims patentably distinguishes them from the prior art references utilized." Id. On this record, we agree with the Examiner's finding that Balson discloses the contested "allocating" and "determining" steps as recited in claim 29. We agree with the Examiner because, while we interpret claims broadly but reasonably in light of the Specification, we nonetheless must not import limitations from the Specification into the claims. See Phillips v. 34 Appeal 2018-000438 Application 14/334,048 AWH Corp., 415 F.3d 1303, 1316, 1323 (Fed. Cir. 2005) (en bane) (citations omitted). Therefore, based upon the findings above, on this record, we are not persuaded of error in the Examiner's reliance on the cited prior art to disclose the disputed limitation of claim 29, nor do we find error in the Examiner's resulting finding of anticipation. Therefore, we sustain the Examiner's anticipation rejection of independent claim 29, and grouped claims 1-28 and 30-54 which fall therewith. See Claim Grouping, supra. 4. § 103 Rejection R4 of Claims 7 and 33 In view of the lack of any substantive or separate arguments directed to obviousness Rejection R4 of claims 7 and 33 under § 103 (see App. Br. 20), we sustain the Examiner's rejection of these claims. Arguments not made are waived. 25 REPLY BRIEF To the extent Appellants may advance new arguments in the Reply Brief (Reply Br. 1-18) not in response to a shift in the Examiner's position in the Answer, we note arguments raised in a Reply Brief that were not raised in the Appeal Brief or are not responsive to arguments raised in the Examiner's Answer will not be considered except for good cause (see 37 C.F.R. § 41.4l(b)(2)), which Appellants have not shown. 25 For example, Appellants argue, "Appellants submit that these claims are allowable for the same reasons set forth above for the independent claims from which they depend." App. Br. 20. 35 Appeal 2018-000438 Application 14/334,048 CONCLUSIONS (1) Under our Guidance, governed by relevant case law, claims 1-54 in Rejection Rl are directed to patent-ineligible subject matter under§ 101, and we sustain the rejection. (2) The Examiner erred with respect to indefiniteness Rejection R2 of claim 49 under 35 U.S.C. § l 12(b) or pre-AIA 35 U.S.C. § 112, second paragraph, and we do not sustain the rejection. (3) The Examiner did not err with respect to anticipation Rejection R3 of claims 1-6, 8-32, and 34-54 under 35 U.S.C. § 102(b) over the cited prior art of record, and we sustain the rejection.26 (4) The Examiner did not err with respect to obviousness Rejection R4 of claims 7 and 33 under 35 U.S.C. § 103(a) over the cited prior art of record, and we sustain the rejection. Because we have affirmed at least one ground of rejection with respect to each claim on appeal, we affirm the Examiner's decision. See 3 7 C.F.R. § 41.50(a)(l). DECISION We affirm the Examiner's decision rejecting claims 1-54. No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § l.136(a)(l)(iv). See 37 C.F.R. § 41.50(±). AFFIRMED 26 See n.24, supra, regarding the alternative § 103 rejection of these claims. 36 Copy with citationCopy as parenthetical citation