Ex Parte Vice et al

Patent Trials and Appeals Board

Feb 28, 2019

13625423 - (D) (P.T.A.B. Feb. 28, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/625,423 09/24/2012
35811 7590 03/04/2019
IP GROUP OF DLA PIPER LLP (US)
ONE LIBERTY PLACE
1650 MARKET ST, SUITE 4900
PHILADELPHIA, PA 19103
UNITED ST A TES OF AMERICA
FIRST NAMED INVENTOR
Charles A. Vice
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.
ICE-ll-1291R 5132
EXAMINER
MADAMBA, CLIFFORD B
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
03/04/2019 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):
pto. phil@dlapiper.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CHARLES A. VICE, THOMAS FARLEY,
EDWARD BAGINSKI, GREG HAMAMGIAN,
SIMON SHL YA YFER, MA YUR KAP ANI, and
PETRE ALEXANDRESCU
Appeal2018-001560 1
Application 13/625,423
Technology Center 3600
Before MURRIEL E. CRAWFORD, JOSEPH A. FISCHETTI, and
PHILIP J. HOFFMANN, Administrative Patent Judges.
CRAWFORD, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
This is an appeal from the final rejection of claims 1-24. We have
jurisdiction to review the case under 35 U.S.C. §§ 134 and 6.
1 The Appellants identify Intercontinental Exchange Holdings, Inc. as the
real party in interest. Appeal Br. 1.
Appeal2018-001560
Application 13/625,423
The invention "is generally related to limiting unwanted price
movement of a financial instrument." Spec. ,r 2.
Claim 1 is illustrative:
1. A method of limiting pnce movements m an
electronic server system, comprising:
providing an exchange server comprising at least one
matching engine module, said exchange server comprising at
least one processor executing instructions that cause the
exchange server to perform the steps of:
establishing an interval price limit (IPL) period that
defines a predetermined length of time commencing at a start
time;
establishing an IPL amount that defines a permissible
increase or decrease in an anchor price of a financial instrument
during the IPL period, said anchor price being the price of the
financial instrument at the start time;
receiving and matching, via the at least one matching
engine module, at least one buy order and at least one sell order
for the financial instrument during the IPL period, thereby
generating at least one matched trade having a trade price, said
trade price comprising a price that is independent of the anchor
pnce;
comparing the trade price to the anchor price upon
completion of said matching of the at least one buy order and the
at least one sell order;
determining that the trade price is within the IPL amount
of the anchor price for a first of the at least one matched trade
and executing the first of the at least one matched trade; and
determining that the trade price is not within the IPL
amount of the anchor price for a second of the at least one
matched trade and preventing the second of the at least one
matched trade from executing,
said executing and preventing both occurring during the
IPL period.
The Examiner rejected claims 1-24 under 35 U.S.C. § 101 as directed
to ineligible subject matter in the form of abstract ideas.
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Application 13/625,423
The Examiner rejected claims 1-24 under 35 U.S.C. § I03(a) as
unpatentable over Voigt (US 2012/0116942 Al, pub. May 10, 2012) and
(hereinafter "Voigt"), in view ofBandman et al. (US 2007/0027788 Al, pub.
Feb. 1, 2007) ("Bandman").
We AFFIRM.
ANALYSIS
Patentable subiect matter
An invention is patent-eligible if it claims a "new and useful process,
machine, manufacture, or composition of matter." 35 U.S.C. § 101.
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. E.g., Alice Corp. v. CLS Bank Int 'l, 573 U.S. 208,
216 (2014).
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. Id. at 217-18 ( citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75-77 (2012)). 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
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
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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 ( Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as "molding rubber products" (Diamond v. Diehr, 450 U.S. 175, 192
( 1981) ); "tanning, dyeing, making waterproof cloth, vulcanizing India
rubber, smelting ores" (id. at 184 n.7 (quoting Corning v. Burden, 56 U.S.
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 that "[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula." Diehr, 450 U.S. at 176; see also id. at 192 ("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. ( citing Benson and Flook); see, e.g., id. at 187 ("It is now
commonplace that an application of a law of nature or mathematical formula
to a known structure or process may well be deserving of patent
protection.").
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
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concept' sufficient to 'transform' the claimed abstract idea into a patent-
eligible application." Alice, 573 U.S. at 221 (quotation marks 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. (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.
The PTO recently published revised guidance on the application of
§ 101. USPTO's January 7, 2019 Memorandum, 2019 Revised Patent
Subject Matter Eligibility Guidance ("Memorandum"). Under that
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); and
(2) additional elements that integrate the judicial exception into
a practical application (see MPEP § 2106.05(a}-(c), (e}-(h)).
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 § 2106.05(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.
See Memorandum, 84 P.R. 50 (2019).
Claim 1 recites steps that establish price limits and time intervals, and
prevent matched trades that fall outside the price limits within the time
intervals from executing, within a financial instrument trading system that
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matches buy and sell orders. Claim 1 is thus directed to limiting price
variations on matched trades in financial instrument trading. Because the
claim is directed to the performance of financial transactions, it is thus
directed to an abstract idea. See MANUAL OF p ATENT EXAMINING
PROCEDURE ("MPEP") § 2106.04(a)(2)(I)(A). In addition, other than the
mention of a "server" with a "module" that performs the matching, the
method could be performed mentally by a person looking at the information
that represents the buy and sell orders. See id. at (III)(A}-(B).
The method does not integrate the abstract idea into a practical
application. For example, the method does not improve the underlying
computer by establishing and enforcing price limits, because any computer
can be used to execute the claimed method. See Spec. ,r 12. In addition, the
method is directed to financial instrument trading, and as such the claimed
method does not improve another technology. See MPEP ,r 2106.0S(a).
Because a particular computer is not required, the claim also does not define
or rely on a "particular machine." See id. at § 2106.05(b ). Further, the
method does not transform matter. See id. at§ 2106.0S(c). Instead, the
claim matches offers, determines if they are within a range or not, and either
executes a matched trade or not. As such, the method has no other
meaningful limitations (see id. at§ 2106.0S(e)), and thus merely recites
instructions to execute the abstract idea on a computer (see id. at §
2106.0S(f)).
The only element, beyond the abstract idea of limiting price variations
on matched trades in financial instrument trading, is an "exchange server
comprising at least one matching engine module." The server, however, is a
general purpose computer (Spec. ,r 12), and the "module" is simply software
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the server executes (id. at ,r 26). The operations of storing, analyzing,
receiving, and writing data are primitive computer operations found in any
computer system. See In re Katz Interactive Call Processing Patent Litig.,
639 F.3d 1303, 1316 (Fed. Cir. 2011). Thus, the only additional elements
beyond the abstract idea are well-understood, routine, and conventional. See
MPEP i12106.05(d).
"[ A ]fter Alice, there can remain no doubt: recitation of generic
computer limitations does not make an otherwise ineligible claim patent-
eligible. The bare fact that a computer exists in the physical rather than
purely conceptual realm is beside the point." DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014) (internal citations
and quotation marks omitted). Here, independent claim 13 merely recites a
system that comprises processors configured to execute instructions that
correspond to the steps of method claim 1, and is also directed to an abstract
idea.
Thus, claims 1 and 13 are directed to abstract ideas and do not recite
limitations that transform the abstract ideas into eligible subject matter. The
dependent claims further limit the rules employed in the matching and price-
limiting process, such as "preventing entry of new orders that would result in
a matched trade having a trade price beyond the IPL amount of the anchor
price," in claim 4, and "wherein at least one of the orders received is a stop-
limit order having a limit price" in claim 9. The dependent claims thus do
not alter the analysis that the claims are directed to ineligible subject matter.
We are not persuaded by the Appellants' argument, citing Enfzsh, LLC
v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016), that the claimed method
and system improve computer systems, by changing software to implement
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different trading rules, which leads to an increase in computer efficiency and
throughput, and avoiding unnecessary operations. Appeal Br. 7-10. Asking
a computer to do less work, by stopping some trades, and improving
throughput by not imposing rules that stop all trades, does not alter the
function of the computers asked to perform the instructions. The computers
asked to execute the claimed processes are still are capable of the same
throughput in computer operations, even if the trading rules change. Merely
asking the computer to do less work, or not stopping the computer from
working, does not improve the computer, whose capabilities remain
unchanged with the software that embodies different trading rules.
We are not persuaded by the Appellants' argument, citing McRO, Inc.
v. Bandai Namco Games America, Inc. 837 F.3d 1299 (Fed. Cir. 2016), that
because the claimed method changing trading rules that humans would use if
the method were not computerized, the method is eligible subject matter.
Appeal Br. 10-11. Changing an abstract idea to a different abstract idea
does not convert the abstract idea into eligible subject matter under McRO.
We are not persuaded by the Appellants' argument, citing BASCOM
Global Internet v. AT&T Mobility, LLC, 827 F.3d 1341 (Fed. Cir. 2016), that
because the claims present an inventive concept that provides a technical
improvement over prior art processes, by blocking some trades while
permitting trading to continue unstopped when offers are matched outside of
a defined price range, the claims recite eligible subject matter. Appeal
Br. 11-12. Changing an abstract idea to a different abstract idea, by altering
the rules by which trading is conducted, does not convert the abstract idea
into eligible subject matter under BASCOM.
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The Appellants also argue the claims improve the field of electronic
trading, which allegedly is "another" technical field, and thus the claims
recite patent eligible. Appeal Br. 12. We are not persuaded by the
argument, because the claims are directed to trading financial instruments
and thus are not in a different field than the abstract idea. Spec. ,r 2--4. We
also are not persuaded that the claims are patent-eligible because they do not
preempt all ways of performing the abstract idea. Appeal Br. 14. While
preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility. 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.").
Because the Appellants have not shown error in the Examiner's
rejection of claims as directed to abstract ideas, we sustain the rejection of
claims 1-24 under 35 U.S.C. § 101.
Obviousness Reiection
We are persuaded by the Appellants' argument that Voigt fails to
disclose comparing a trade price at which a trade is matched to an anchor
price to determine if the matched trade will be executed, as claimed, because
Voigt instead compares an order before a match is made. Appeal Br. 19-20.
The Examiner asserts the process in Voigt is "not substantially different"
than the claimed process, because in Voigt the matching is "the mere
identification of a potential trade transaction based on a possible matching of
terms and prices." Answer 11. We agree with the Appellants.
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The Examiner finds the claimed "comparing the trade price to the
anchor price upon completion of said matching of the at least one buy order
and the at least one sell order" in paragraphs 9 and 10 of Voigt. Final
Act. 15. Voigt discloses a system that is configured only to transmit an
order to an exchange if the price of the order is within an acceptable range.
Voigt ,r 9. This comparison is done before matching, which does not meet
the claim language. Voigt also discloses a system that determines a call
auction price, but compares the call auction price at which a match would be
made to a price range in the order itself. Id. at ,r 10. This also does not meet
the claim language, because the price range in the order does not correspond
to a price range based on "the price of the financial instrument at the start
time," as claimed.
The Examiner has thus failed to support adequately the obviousness of
claims 1 and 13 over Voigt and Bandman, because at least one feature is not
disclosed as asserted. For this reason, we do not sustain the rejection of
claims 1-24 under 35 U.S.C. § 103(a).
DECISION
We affirm the rejection of claims 1-24 under 35 U.S.C. § 101.
We reverse the rejection of claims 1-24 under 35 U.S.C. § 103(a).
No time period for taking any subsequent action in connection with
this appeal may be extended under 3 7 C.F .R. § 1.13 6( a )(1 )(iv).
AFFIRMED
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