Ex Parte White et al

Patent Trial and Appeal Board

Aug 29, 2018

13671543 (P.T.A.B. Aug. 29, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO.
13/671,543
132787 7590
Docket Clerk-GOLD
P.O. Drawer 800889
Dallas, TX 75380
FILING DATE FIRST NAMED INVENTOR
11/07/2012 Christopher White
08/31/2018
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.
GOLDll-00429 2124
EXAMINER
KING JR., JOSEPH W
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
08/31/2018 ELECTRONIC
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address(es):
patents@munckwilson.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Exparte CHRISTOPHER WHITE, JUSTIN GMELICH,
DIMITER GEORGIEV, DEBRA HERSCHMANN, PAUL J. HUCHRO,
WICHAR JIEMPREECHA, ROSS LEVINSKY, JOHNNY SHAFFER,
STEPHANIE MIRIAM SKLAR, and PAUL WALKER
Appeal2017-005787
Application 13/671,543
Technology Center 3600
Before JOHN A. JEFFERY, JENNIFER S. BISK, and
CATHERINE SHIANG, Administrative Patent Judges.
JEFFERY, Administrative Patent Judge.
DECISION ON APPEAL
Appellants 1 appeal under 35 U.S.C. § 134(a) from the Examiner's
decision to reject claims 1-3, 5-21, 23-39, and 41-54. We have jurisdiction
under 35 U.S.C. § 6(b). We affirm.
STATEMENT OF THE CASE
Appellants' invention is an electronic trading session that guarantees
minimum liquidity for the session. Client orders for financial instruments
1 Appellants identify the real party in interest as Goldman, Sachs & Co.
App. Br. 1.
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Application 13/671,543
are then executed using the guaranteed liquidity. See generally Abstract;
Spec. ,r 35. Claim 1 is illustrative:
1. An electronic trading system, comprising:
a memory;
a processor in communication with the memory, and
configured to execute a plurality of processing instructions to:
receive credentials associated with users of the electronic
trading system;
configure a trading session of a predetermined length and
including a guaranteed minimum notional amount of liquidity
for trading in a financial instrument;
system;
receive orders for the financial instrument from the users
of the electronic trading filter the orders based on parameters of
the session and the credentials of the users;
aggregate the orders during an order entry phase of the
sess10n;
determine during the session that there is not enough
counter liquidity to execute one or more of the orders;
provide liquidity during the session to ensure the
guaranteed minimum notional amount of liquidity; and
execute one or more of the orders during the session
using the guaranteed minimum notional amount of liquidity.
THE REJECTION
The Examiner rejected claims 1-3, 5-21, 23-39, and 41-54 under 35
U.S.C. § 101 as directed to ineligible subject matter. Final Act. 3-7. 2
2 Throughout this opinion, we refer to (1) the Final Rejection mailed May 6,
2016 ("Final Act."); (2) the Appeal Brief filed October 3, 2016 ("Br."); and
(3) the Examiner's Answer mailed November 30, 2016 ("Ans.").
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FINDINGS AND CONTENTIONS
The Examiner finds that the claimed invention is directed to an
abstract idea, namely security trading using a guaranteed amount of
liquidity-a fundamental economic practice. Final Act. 3---6; Ans. 5.
According to the Examiner, the claimed elements do not add significantly
more to the abstract idea to render the claimed invention patent-eligible
because, among other things, the claimed invention merely uses a general-
purpose computing device to receive and analyze data, and then transact a
trading session. Final Act. 6-7. The Examiner adds that the claimed
invention does not solve a technical problem, but rather provides a financial
solution to a financial problem, namely by guaranteeing a liquidity amount
sufficient to fulfill a trade order for a security. Ans. 5---6.
Appellants argue that the Examiner improperly generalized the claims
to a high level of abstraction untethered from the claim language. Br. 27-
28. According to Appellants, the claims are directed to solving a technical
problem, namely ensuring enough liquidity exists in an electronic trading
session to execute orders in the session, with a technical solution that injects
additional liquidity into the session, if needed. Br. 28. Appellants add that
not only did the Examiner not consider preemption adequately, but the
claims also add significantly more to the alleged abstract idea. Br. 29-32.
Appellants also contend that the dependent claims are eligible for
same reasons that the independent claims are eligible. Br. 32. According to
Appellants, the dependent claims are directed to a particular methodology
for guaranteeing a certain liquidity amount-features that are said to have
not been known previously nor disclosed in the prior art of record. Id.
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ISSUE
Has the Examiner erred in rejecting claim 1 by concluding that it is
directed to ineligible subject matter under§ 101? This issue turns on
whether the claimed invention is directed to a patent-ineligible abstract idea
and, if so, whether the claim's elements----considered individually and as an
ordered combination-transform the nature of the claim into a patent-
eligible application of that abstract idea.
ANALYSIS
Claims 1, 19, and 37
To determine whether claims are patent eligible under § 101, we apply
the Supreme Court's two-step test articulated in Alice Corp. Proprietary Ltd.
v. CLS Bank International, 134 S. Ct. 2347 (2014). First, we determine
whether the claims are directed to a patent-ineligible concept: laws of nature,
natural phenomena, and abstract ideas. Id. at 2354--55. If so, we then
proceed to the second step and examine the claim's elements-both
individually and as an ordered combination-to determine whether the claim
contains an "inventive concept" sufficient to transform the claimed abstract
idea into a patent-eligible application. Id. at 2357.
Alice Step One
Applying Alice step one, we agree with the Examiner that the claimed
invention is directed to an abstract idea, security trading using a guaranteed
amount of liquidity-a fundamental economic practice. Final Act. 4; Ans. 4.
Independent claim 1 recites, in pertinent part, a processor configured to
execute instructions to ( 1) receive credentials associated with users of an
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electronic trading session; (2) configure a trading session that includes a
guaranteed minimum notional amount of liquidity for trading in a financial
instrument; (3) filter orders based on session parameters and user
credentials; and ( 4) aggregate orders during the session's order entry phase.
Notably, the processor can also execute instructions to perform three
additional functions during the session, namely (1) determine that there is
insufficient counter liquidity to execute one or more orders; (2) provide
liquidity to ensure the guaranteed minimum notional amount of liquidity;
and (3) execute one or more orders using this guaranteed amount.
In essence, the claimed invention ensures that sufficient liquidity is
available during an electronic trading session to execute an order for a
financial instrument in that session. Despite Appellants' arguments to the
contrary (Br. 27-8), we agree with the Examiner that the claimed invention
is directed to an abstract idea that, in essence, is a fundamental economic
and business practice. See Final Act. 4---6; Ans. 4--5. Such fundamental
economic and business practices are often held to be abstract ideas. See,
e.g., Alice, 134 S. Ct. at 2356 (holding the concept of intermediated
settlement is an abstract idea directed to a "fundamental economic practice
long prevalent in our system of commerce") ( citation omitted); see also
buySAFE v. Google, Inc., 765 F.3d 1350, 1353-54 (Fed. Cir. 2014) (citing
cases where contractual relations at issue constituted fundamental economic
practices, and noting that forming or manipulating economic relations may
involve an abstract idea); Content Extraction & Transmission LLC v. Wells
Fargo Bank, Nat. Ass 'n, 776 F.3d 1343, 1347 (Fed. Cir. 2014) (explaining
that claims directed to "the mere formation and manipulation of economic
relations" and "the performance of certain financial transactions" have been
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held to involve abstract ideas); In re Chorna, 656 F. App'x 1016, 1022 (Fed.
Cir. 2016) (unpublished) (holding ineligible claims directed to financial
instruments valued using an allocation formula, traded, and cleared as
directed to an abstract idea).
Furthermore, it well settled that collecting information is within the
realm of abstract ideas----even when the information is limited to particular
content. Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed.
Cir. 2016). It is also well settled that analyzing information by steps people
go through in their minds, or by mathematical algorithms, without more, are
essentially mental processes within the abstract idea category. Id. at 1354.
And merely presenting the results of abstract processes of collecting and
analyzing information, without more (such as identifying a particular tool for
presentation), is abstract as an ancillary part of such collection and analysis.
Id.
Similar to the claims at issue in Electric Power, the claimed invention
here gathers, manipulates, and analyzes information of a specified content,
but does not use any particular inventive technology for performing those
functions. That the information pertains to financial instrument orders and
associated liquidity needed to execute those orders is of no consequence
here, for collecting and analyzing such information does not make the
collection and analysis non-abstract. See SAP America, Inc. v. Investpic,
LLC, 890 F.3d 1016, 1021 (Fed. Cir. 2018), modified on reh 'g (Fed. Cir.
Aug. 2, 2018).
Nor are we persuaded that the claimed invention improves the
processor's functionality or efficiency, or otherwise changes the way that a
device functions, at least in the sense contemplated by the Federal Circuit in
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Enfish LLC v. Microsoft Corporation, 822 F.3d 1327 (Fed. Cir. 2016),
despite Appellants' arguments to the contrary (Br. 26-27). The claimed
self-referential table in Enfish was a specific type of data structure designed
to improve the way a computer stores and retrieves data in memory. Enfish,
822 F.3d at 1339. To the extent Appellants contend that the claimed
invention uses such a data structure to improve a computer's functionality or
efficiency, or otherwise change the way that device functions (see Br. 26-
27), there is no persuasive evidence on this record to substantiate such a
contention.
Nor do we find Appellants' reliance on McRO, Inc. v. Bandai Namco
Games America, Inc., 837 F.3d 1299 (Fed. Cir. 2016) (Br. 26-27, 29-30)
persuasive. There, the claimed process used a combined order of specific
rules that rendered information in a specific format that was applied to create
a sequence of synchronized, animated characters. McRO, 837 F.3d at 1315.
Notably, the recited process automatically animated characters using
particular information and techniques-an improvement over manual three-
dimensional animation techniques that was not directed to an abstract idea.
Id. at 1316.
But unlike McRO that improved how the physical display operated to
produce better quality images, the claimed invention here ensures that
sufficient liquidity is available during an electronic trading session to
execute an order for a financial instrument in that session-a mathematical
determination that is not only directed to a fundamental economic practice,
but also does not improve a display mechanism as was the case in McRO.
Although the claimed invention requires computer components, it is the
incorporation of those components-not a claimed rule-that purportedly
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improves the existing process. Cf Fair Warning IP, LLC v. Iatric Systems,
Inc., 839 F.3d 1089, 1095 (Fed. Cir. 2016). That the Specification indicates
that standard off-the-shelf computer technology is usable to implement the
claimed invention in paragraphs 62 to 65 of the Specification only bolsters
the notion that the claimed invention does not focus on an improvement in
computers as tools, but rather certain independently abstract ideas that use
computers as tools. See Elec. Power, 830 F.3d at 1354.
In short, the claimed invention does not solve a technical problem, but
rather solves a financial problem, namely by guaranteeing a liquidity amount
sufficient to fulfill a trade order for a security as the Examiner indicates.
Ans. 5-6. The Examiner's point in this regard is well taken.
Although the claimed invention's ensuring that sufficient liquidity is
available during a trading session to execute orders may be beneficial by
incentivizing users to submit trade orders as Appellants contend (Br. 28), a
claim for a useful or beneficial abstract idea is still an abstract idea. See
Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379-80
(Fed. Cir. 2015).
We, therefore, agree with the Examiner that claim 1 is directed to an
abstract idea.
Alice Step Two
Turning to Alice step two, the recited elements----considered
individually and as an ordered combination----do not transform the nature of
claim 1 into a patent-eligible application of the abstract idea to ensure that
the claim amounts to significantly more than that idea. See Alice, 134 S. Ct.
at 2357.
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That the recited method uses a memory and processor to perform the
recited functions does not change our conclusion. As the Examiner
indicates, the claimed invention merely uses generic computing components
to perform the recited abstract idea, namely trading securities using a
guaranteed amount of liquidity. See Final Act. 6-7; Ans. 7-8. Merely
reciting these generic computing components cannot transform a patent-
ineligible abstract idea into a patent-eligible invention. See Alice 134 S. Ct.
at 2358-59.
Indeed, the recited generic computing components merely do that
which can be performed mentally or with a pen and paper----exclusive
functions ineligible for patent protection under § 101. See CyberSource
Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372 (Fed. Cir. 2011). To
the extent that Appellants contend that the recited functions could not
otherwise be performed manually (see Br. 28-32), there is no persuasive
evidence on this record to substantiate such a contention.
Nevertheless, even assuming, without deciding, that the recited
components add efficiency, any speed increase comes from the capabilities
of the generic computer components-not the recited process itself. See
FairWarning IP, LLC v. Iatric Systems, Inc., 839 F.3d 1089, 1095 (Fed. Cir.
2016) (citing Bancorp Services, LLC v. Sun Life Assurance Co., 687 F.3d
1266, 1278 (Fed. Cir. 2012) ("[T]he fact that the required calculations could
be performed more efficiently via a computer does not materially alter the
patent eligibility of the claimed subject matter.")). Like the claims in
Fair Warning, the focus of claim 1 is not on an improvement in computer
processors as tools, but on certain independently abstract ideas that use
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generic computing components as tools. See FairWarning, 839 F.3d at 1095
( citations and quotation marks omitted).
In short, merely reciting these generic computing components cannot
transform a patent-ineligible abstract idea into a patent-eligible invention.
Id. at 2358. In other words, merely reciting an abstract idea while adding the
words "apply it with a computer" does not render an abstract idea non-
abstract: there must be more. See Alice, 134 S. Ct. at 2359. Nor does the
claimed invention improve the computer processor device's functionality or
efficiency, or otherwise change the way that device functions. Cf Enfish
LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016).
We reach a similar conclusion regarding the recited filtering orders
based on session parameters and user credentials. See BASCOM Global
Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1348 (Fed.
Cir. 2016) ("[F]iltering content is an abstract idea because it is a
longstanding, well-known method of organizing human behavior, similar to
concepts previously found to be abstract."); see also LendingTree, LLC v.
Zillow, Inc., 656 F. App'x 991, 992-97 (Fed. Cir. 2016) (unpublished)
(holding ineligible claims directed to a method and system for coordinating
between a computer user and plural lending institutions that recited, among
other things, filtering credit data to select certain institutions).
To be sure, the court in BASCOM held eligible claims directed to a
technology-based solution to filter Internet content that overcame existing
problems with other Internet filtering systems by making a known filtering
solution-namely a "one-size-fits-all" filter at an Internet Service Provider
(ISP}--more dynamic and efficient via individualized filtering at the ISP.
BASCOM, 827 F.3d at 1351. This customizable filtering solution improved
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the computer system's performance and, therefore, was patent-eligible. See
id.
But unlike the Internet-based filtering improvements in BASCOM that
added significantly more to the abstract idea in that case, the claimed
invention here merely uses generic computing components to filter orders
based on session parameters and user credentials-a filtering process that
does not add significantly more to the abstract idea. To the extent
Appellants contend otherwise, there is no persuasive evidence on this record
to prove such a contention.
We reach the same conclusion regarding the other recited elements of
claim 1. First, the recited functions that (1) receive user credentials, and
(2) receive, filter, and aggregate orders not only merely use generic
computing components to achieve those ends, but are also data gathering
steps that constitute insignificant extra-solution activity that is insufficient to
render the claim patent-eligible. See In re Bilski, 545 F.3d 943, 963 (Fed.
Cir. 2008) (en bane), aff'd on other grounds, 561 U.S. 593 (2010)
( characterizing data gathering steps as insignificant extra-solution activity).
Nor does the recited trading session configuration add significantly
more to the abstract idea, for such a configuration merely uses generic
computing components to achieve that end. We reach the same conclusion
regarding the three additional functions performed during the session,
namely (1) determining that there is insufficient counter liquidity to execute
one or more orders; (2) providing liquidity to ensure the guaranteed
minimum notional amount of liquidity; and (3) executing the orders using
this guaranteed amount. Despite performing these functions during the
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session, generic computing components are nevertheless used to that end-
functions that could otherwise be performed manually.
Lastly, we find unavailing Appellants' contention that the Examiner
also allegedly failed to consider preemption adequately. See Br. 29-30. To
the contrary, the Examiner not only considered preemption in the
ineligibility analysis as noted on page 6 of the Answer, but where, as here,
the claims cover a patent-ineligible concept, preemption concerns "are fully
addressed and made moot" by an analysis under the Alice framework. See
Ariosa, 788 F.3d at 1379. The Examiner's point in this regard is well taken.
See Ans. 6 ( citing Ariosa).
For the foregoing reasons, then, the recited elements----considered
both individually and as an ordered combination----do not contain an
"inventive concept" sufficient to transform the claimed abstract idea into a
patent-eligible application. Therefore, we are not persuaded that the
Examiner erred in rejecting claim 1, and claims 19 and 37 not argued
separately with particularity.
Claims 2, 3, 5-18, 20, 21, 23-36, 38, 39, and 41-54
We also sustain the Examiner's ineligibility rejection of dependent
claims 2, 3, 5-18, 20, 21, 23-36, 38, 39, and 41-54. See Final Act. 6-7
(finding that the dependent claims include no additional elements that add
significantly more to the abstract idea).
First, Appellants' contention that the dependent claims are eligible for
same reasons that the independent claims are eligible (Br. 32) is unavailing
for the reasons previously discussed. Even assuming, without deciding, that
the dependent claims' subject matter was not known previously nor
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disclosed in the prior art as Appellants contend (id.), that is not dispositive of
eligibility, for "[g]roundbreaking, innovative, or even brilliant discovery
does not by itself satisfy the§ 101 inquiry." Ass 'nfor Molecular Pathology
v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013); see also Diamond v.
Diehr, 450 U.S. 17 5, 188-89 ( 1981) ("The 'novelty' of any element or steps
in a process, or even of the process itself, is of no relevance in determining
whether the subject matter of a claim falls within the § 101 categories of
possibly patentable subject matter."); Affinity Labs of Texas, LLC v.
DIRECTV, LLC, 838 F.3d 1253, 1263 n.3 (Fed. Cir. 2016) (noting that an
eligibility finding does not tum on the novelty of using a user-downloadable
application for the particular purpose recited in the claims). Therefore, to
the extent that Appellants contend that the dependent claims are eligible
because the Examiner did not reject these claims over prior art (see Br. 32),
such an argument is unavailing.
Second, to the extent that Appellants intended to argue dependent
claim 2 separately (see Br. 32), we find such an argument unavailing.
Notably, Appellants do not provide the requisite subheading to clearly and
unambiguously identify that claim 2 is argued separately-a regulatory
requirement. See 37 C.F.R. § 4I.37(c)(l)(iv) ("Under each heading
identifying the ground of rejection being contested, any claim(s) argued
separately or as a subgroup shall be argued under a separate subheading that
identifies the claim( s) by number.") ( emphasis added); see also MANUAL OF
PATENT EXAMINING PROCEDURE (MPEP) § 1205.02 (9th ed. Rev. 08.2017,
Jan. 2018) (explaining this rule).
But even if such arguments were properly presented (which they were
not), we still find them unpersuasive. On page 32 of the Appeal Brief,
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Appellants merely quote the limitations of claim 2 and allege that they are
unconventional and "not known ... to the prior art" because the Examiner
did not identify any prior art with which to reject such a concept. But as
noted previously, that the dependent claims' subject matter was not known
previously nor disclosed in the prior art as Appellants contend is not
dispositive of eligibility. See Myriad, 569 U.S. at 591; see also Diehr, 450
U.S. at 188-89. In any event, Appellants do not persuasively rebut the
Examiner's findings and conclusions regarding claim 2 and the other
dependent claims for the reasons noted above and by the Examiner. See
Final Act. 6-7; Ans. 8-9.
Therefore, we are not persuaded that the Examiner erred in rejecting
claims 2, 3, 5-18, 20, 21, 23-36, 38, 39, and 41-54.
CONCLUSION
The Examiner did not err in rejecting claims 1-3, 5-21, 23-39, and
41-54 under§ 101.
DECISION
We affirm the Examiner's decision to reject claims 1-3, 5-21, 23-39,
and 41-54.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv).
AFFIRMED
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