Ex Parte Weber et al

Patent Trials and Appeals Board

Jul 8, 2019

14804506 - (D) (P.T.A.B. Jul. 8, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/804,506 07/21/2015
35811 7590 07/10/2019
IP GROUP OF DLA PIPER LLP (US)
ONE LIBERTY PLACE
1650 MARKET ST, SUITE 5000
PHILADELPHIA, PA 19103
FIRST NAMED INVENTOR
Clifford Weber
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.
NGI-14-2061R 9341
EXAMINER
FU,HAO
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
07/10/2019 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 CLIFFORD WEBER, THOMAS CHAMPION, and
LAURA V. MORRISON
Appeal2018-001558
Application 14/804,506 1
Technology Center 3600
Before KEVIN F. TURNER, JOHN A. EVANS, and SCOTT E. BAIN,
Administrative Patent Judges.
BAIN, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 1-22, which constitute all claims pending in the
application. We have jurisdiction under 35 U.S.C. § 6(b).
We reverse.
1 According to Appellants, the real party in interest is assignee NYSE
Group, Inc. App. Br. 1.
Appeal2018-001558
Application 14/804,506
STATEMENT OF THE CASE
The Claimed Invention
According to the Specification, imbalances between buy orders and
sell orders in electronic trading systems often cause inefficiencies in the
processing of financial product portfolios. Spec. ,r 2. To offset any
imbalance, additional orders typically are required to complete processing
transactions. Id. Additional orders, however, consume processor and
memory resources and substantially reduce processing speed, especially in
large portfolios. Id. Accordingly, the claimed invention is directed to
identifying and fixing imbalances of buy and sell orders, preventing
unnecessary consumption of computer resources and, therefore, increasing
the processing efficiency of trades in electronic portfolios. Spec. ,r,r 2-3,
18-19.
Claims 1, 10, and 19 are independent. Claim 1, reproduced below, is
illustrative of the claimed subject matter:
1. A system for minimizing an amount of processing and
trade executions needed to correct an order imbalance, the
system comprising:
an electronic crossing platform comprising one or more
computer devices, each computer device including a special-
purpose processing component executing computer-readable
instructions that cause the electronic crossing platform to:
eliminate non-pairable orders from the electronic
crossing platform by executing computer-readable instructions
to:
initiate, by an order management module, an initial
time period;
monitor, by an order imbalance module, data
defining one or more trade orders of an electronic
portfolio of data;
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Application 14/804,506
receive, by the order management module, during
the initial time period, over a communication network, at
least a portion of the data defining the one or more trade
orders of the electronic portfolio of data;
compare, by an order imbalance module, a portion
of the received data to another portion of the received
data to determine an imbalance of the one or more trade
orders remaining after the initial time period;
determine, by the order imbalance module, an
extent of the imbalance among the received data;
communicate, by the order management module, at
least one of an existence of and the extent of the
imbalance to one or more external market participant
computers; and
receive, in response to the communication by the
order management module, additional data defining one
or more offsetting trade orders from among the one or
more external market participant computers;
determine, by the order imbalance module, that a
remaining imbalance exists after the initial time period and after
applying the additional data to the imbalance;
communicate, by the order management module, the
remaining imbalance to the one or more external market
participant computers;
initiate, by the order management module, a final time
period;
accept, by the order management module, during the
final time period, further data defining a final trade order that
offsets the imbalance remaining after the initial time period,
such that the final trade order is received from a fund agent
computing device from among the one or more external market
participant computers in electronic communication with the
electronic crossing platform over the communication network;
reject, by the order management module, data defining
any trade order received during the final time period that does
not at least partially offset the imbalance remaining after the
initial time period, such that after the final time period and
responsive to the final trade order, only pairable trade orders
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remain in the electronic portfolio of data for further processing;
and
process only the pairable trade orders of the electronic
portfolio of data by executing computer-readable instructions
to:
receive, by the order management module, after
the final time period, a benchmark value from a fund
computing device in electronic communication with the
electronic crossing platform over the communication
network;
compare, by a price determination module, after
the final time period, the further data defining the final
trade order with the imbalance remaining after the initial
time period to determine an adjustment value;
convert, by the price determination module, the
benchmark value to a final value by applying the
adjustment value to the benchmark value; and
pair, by the order execution module, buy and sell
orders from among the data defining the one or more pairable
trade orders accepted during the initial time period at the final
value, such that the electronic portfolio of data tracks the
benchmark value and includes only the paired buy and sell
orders,
wherein the order management module, the order
imbalance module, the price determination module and the
order execution module each comprise respective specialized
programmed instructions executed by the one or more computer
devices.
App. Br. 21-22 (Claims Appendix) (emphases added).
The Rejection on Appeal
Claims 1-22 stand rejected under 35 U.S.C. § 101 as being directed to
patent-ineligible subject matter. Final Act. 10-16.
ANALYSIS
We have reviewed the Examiner's rejections in light of Appellants'
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arguments. For the reasons set forth below, we cannot sustain the
Examiner's rejections on the record before us.
Principles of Law
An invention is patent eligible if it claims a "new and useful process,
machine, manufacture, or composition of matter." 35 U.S.C. § 101. The
Supreme Court, however, has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: "[l]aws of nature, natural phenomena, and abstract
ideas" are not patentable. See, e.g., Alice Corp. v. CLS Bankint'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 the Mayo/Alice 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
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" (Diamond v. Diehr, 450 U.S. 175, 191
(1981) ); "tanning, dyeing, making water-proof cloth, vulcanizing India
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rubber, smelting ores" (id. at 182 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))).
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 ( 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, 2019 REVISED PATENT SUBJECT MATTER
ELIGIBILITY GUIDANCE ("Revised Guidance"). 84 Fed. Reg. 50 (Jan. 7,
2019). 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) ("Step 2A, Prong One")2; and
2 The Guidance refers to "Step One" as determining whether the claimed
subject matter falls within the four statutory categories identified by 35
U.S.C. § 101: process, machine, manufacture, or composition of matter.
This step is not at issue in this appeal.
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(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a}-(c), (e}-(h)) ("Step 2A,
Prong Two").
See 84 Fed. Reg. at 54--55.
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 is 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 id. at 56 ( collectively "Step 2B").
Discussion
Appellants argue that the Examiner erred in determining the claims
are directed to an abstract idea and, therefore, constitute patent-ineligible
subject matter. App. Br. 10-20, Reply Br. 2-9. 3 Specifically, Appellants
argue that the claims are not merely directed to "identifying imbalances in
portfolios of financial products," as the Examiner concludes, but rather that
the claims are directed to a unique manner of resolving imbalances, which
3 Appellants argue claims 1-22 as a group. All of the claims recite
limitations commensurate in scope, and are grouped by the Examiner in the
rejection. We select claim 1 as representative of the group. See 37 C.F.R. §
4I.37(c)(l)(iv).
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(among other things) improves computing efficiency. App. Br. 10-13.
Reply Br. 4---6. Appellants further argue that the claimed invention involves
a technological process comprising "non-conventional and non-generic"
computing elements. Reply Br. 2-7.
For the reasons set forth below, we determine that the claims do not
recite any judicial exception, and therefore are patent eligible.
We begin with Step 2A, Prong One of the Revised Guidance, which
requires that we determine whether the claim recites any judicial exceptions
(i.e., among the certain groupings of abstract ideas as enumerated in the
Guidance). Claim 1 recites a system implementing particular instructions
(software) to do the following:
[ 1] eliminate non-pairable orders from the electronic
crossing platform ... [2] determine, by the order imbalance
module, that a remaining imbalance exists after the initial
time period and after applying the additional data to the
imbalance . . . [3] accept, by the order management
module, during the final time period, further data defining
a final trade order that offsets the imbalance remaining
after the initial time period ... [4] reject, by the order
management module, data defining any trade order
received during the final time period that does not at least
partially offset the imbalance remaining after the initial
time period . .. [5] process only the pairable trade orders
of the electronic portfolio of data.
App. Br. 21-22 (Claims Appendix) (emphasis added). We disagree with the
Examiner's determination that the foregoing steps merely recite an idea of
"electronic trading" or similarly abstract "[fundamental] economic practice."
Final Act. 10. Rather, the foregoing steps recite a specific way to minimize
computer processing in correcting order imbalances. Id. at 10-18. For
example, the act of "reject[ing] data defining any trade order received during
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the final time period that does not at least partially offset the imbalance
remaining after the initial time period" is not a necessary step in electronic
trading, but rather solves "problems related to memory [and] processing
efficiency." Id. at 12; Spec. Figs. 2A, 4, 5. Similarly, processing "only
pairable trade orders" in the claimed electronic portfolio is another way the
claimed invention is directed to a particular way of conserving computing
resources. Id.
Accordingly, we determine that claim 1 does not recite a fundamental
economic principle or any other of the certain types of organizing human
activity considered to be abstract. See, e.g., Rapid Litig. Mgmt. Ltd. v.
CellzDirect, Inc., 827 F.3d 1042, 1050 (Fed. Cir. 2016). Nor, for the reasons
explained above, does claim 1 recite any of the other subcategories of
abstract ideas enumerated in Revised Guidance (i.e., mental processes or
mathematical concepts). See 84 Fed. Reg. 52. We, therefore, conclude that
claim 1 does not recite a judicial exception to subject matter eligibility.
Moreover, even if we had agreed with the Examiner's characterization
of the claims as reciting an abstract idea ( and, therefore, reached Step 2A,
Prong Two of the Revised Guidance), the claims also are patent-eligible
because they integrate the idea into a practical application. The Revised
Guidance provides that improving the functioning of a computer can reflect
integration of an idea into a "practical application." See Revised Guidance
Sect. III. As discussed above, claim 1 is directed to minimizing the amount
of computer processing required for correcting order imbalances in
electronic trading portfolios. The Specification further describes the
problem of inefficiently processing electronic portfolios, and specifically
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describes how the claimed invention addresses this problem. Spec. ,r,r 2-3,
13-25.
The Examiner reasons that, pursuant to Enfzsh, LLC v. Microsoft
Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016), Appellants' claims are not
directed to an improvement in computer function because the improvement
is not to computer hardware. Final Act. 4---6, Ans. 8-11. Enfzsh, however,
does not stand for the proposition the Examiner implies. Rather, in Enfzsh
the Court held that the claimed improvement in computer function need not
be limited to hardware, and "software can make non-abstract improvements
to computer technology." Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327,
1335, 1339 (Fed. Cir. 2016) (emphasis added). In Appellants' claims, as in
Enfzsh, the improvement in computer function is carried out by computer
modules, i.e., "software instructions that utilize[] existing computer
components to perform basic functions," and improves the functioning of the
computer. Ans. 15; see also Spec. Fig. 1 (illustrating that the NOC crossing
platform comprises (1) Order Management Module, (2) NOC Order
Execution Module, (3) Order Imbalance Determination Module, and (4)
NOC Price Determination Module).
For the foregoing reasons, we are persuaded that the Examiner erred
in determining that the claims are directed to patent-ineligible subject matter.
Accordingly, we do not sustain the rejection of claims 1-22 under 35 U.S.C.
§ 101.
DECISION
The Examiner's decision rejecting claims 1-22 under 35 U.S.C. § 101
is reversed.
REVERSED
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