GX2 Systems, LLC

Patent Trials and Appeals Board

Oct 13, 2020

14555376 - (D) (P.T.A.B. Oct. 13, 2020)

UNITED STATES PATENT AND TRADEMARK OFFICE
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
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
14/555,376 11/26/2014 David W. Jaberg 1113478001US1 8423
25096 7590 10/13/2020
PERKINS COIE LLP - SEA General
PATENT-SEA
P.O. BOX 1247
SEATTLE, WA 98111-1247
EXAMINER
KHATTAR, RAJESH
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
10/13/2020 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):
patentprocurement@perkinscoie.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte DAVID W. JABERG, ANTON KRYUKOV,
JASON R. NAZAROF and
DAREK POCZOBUT-POTCHEBOUT
___________

Appeal 2020-004135
Application 14/555,376
Technology Center 3600
____________

Before CARL W. WHITEHEAD JR., JEFFREY S. SMITH and
ADAM J. PYONIN, Administrative Patent Judges.

WHITEHEAD JR., Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE1
Appellant2 is appealing the final rejection of claims 1–5, 15–19 and 21
under 35 U.S.C. § 134(a). See Appeal Brief 7. Claims 6–14 and 20 are

1 Rather than reiterate Appellant’s arguments and the Examiner’s
determinations, we refer to the Appeal Brief (filed February 11, 2020), the
Reply Brief (filed May 13, 2020), the Final Action (mailed September 12,
2019) and the Answer (mailed March 18, 2020), for the respective details.

2 We use the word Appellant to refer to “applicant” as defined in 37 C.F.R.
§ 1.42(a). Appellant identifies GX2 Systems, LLC, as the real party in
interest. Appeal Brief 2.
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cancelled. Claims 1, 15 and 21 are independent. We have jurisdiction under
35 U.S.C. § 6(b). We AFFIRM.
Introduction
According to Appellant, the claimed subject matter “creates an
execution risk transfer (‘ERT’) by transferring the risk of fulfilling a spread
trade from a user or trader to another entity such as a trading firm or another
user account.” Abstract.
Representative Claim3
Claim 1 is reproduced below for reference (bracketed step lettering
added):
1. A computer-implemented method for guaranteeing a trader a fill of a
spread order at a fulfillment value and a fulfillment quantity, and for
executing an electronic trade associated with the spread order on one or
more live electronic markets, the method comprising:
[a] receiving, at a trading system running on one or more servers, a
spread order,
[a1] wherein the spread order includes a target value and a
desired quantity for purchasing the spread order,
[a2] wherein the target value for the spread order represents a

3 Appellant argues, claims 1–5, 15–19 and 21 together. See Appeal Brief 8–
24. We select independent claim 1 as the representative claim focusing on
subject matter common to independent claims 1, 15 and 21. See 37 C.F.R.
§ 41.37(c)(1)(iv); see also Final Action 2.

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price based on a mathematical relationship between an
ask price and a bid price for two or more market
instruments on an electronic market;
[b] converting a market representative of each of the two or more
market instruments into a corresponding decimalized market
representative,
[b1] wherein each of the two or more market instruments is
associated with a decimalized bid price and a
decimalized ask price and a corresponding bid quantity
and an ask quantity;
[c] determining, using one or more processors of the trading system, a
decimalized fulfillment value and a fulfillment quantity at
which the trading system will guarantee a fill of the spread
order, based on the target value, the decimalized bid price, and
the decimalized ask price,
[c1]wherein the decimalized bid price and the decimalized ask
price are real numbers;
[d] transmitting, via a network to a trading client, the decimalized
fulfillment value and the fulfillment quantity at which the
trading system will guarantee a fill of the spread order;
[e] receiving, from the trading client, an indication of acceptance to
fill the spread order at the decimalized fulfillment value;
[f] filling, in response to receiving the indication of acceptance from
the trading client, the spread order at the decimalized
fulfillment value,
[f1] wherein each of the two or more market instruments of the
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spread order are fulfilled simultaneously at the
decimalized fulfillment value;
[g] in response to filling the spread order:
[g1] issuing, at the trading system, a change in stored inventory
prior to an electronic trade of the spread order occurring,
[g2] automatically generating an indication that the spread order
has been filled, and
transmitting, to the trading client, the indication that the spread
order has
been filled;
[h] netting opposing filled orders from other users that have not been
executed; and
[i] after transmitting the indication to the trading client, automatically
causing at least
[i1] a portion of the spread order to be executed on one or more
live electronic markets,
[i2] wherein the portion of the spread order to be executed is
based on the netted opposing orders, and
[i3] wherein causing at least the portion of the spread order to
be executed includes determining a best possible price at
which to execute at least the portion of the spread order
based on a price and a liquidity of at least one of the two
or more market instruments.

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Rejection on Appeal
Claims 1–5, 15–19 and 21 stand rejected under 35 U.S.C. § 101 as
being directed to patent-ineligible subject matter. Final Action 2–5.
PRINCIPLES OF LAW
A. Section 101
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 U.S. 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 Court’s two-part framework, described in Mayo and Alice.
Alice 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. Kappos, 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 (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). Concepts
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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 waterproof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267–68 (1853))); 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
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 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 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
formula to a known structure or process may well be deserving of patent
protection.”).
If the claim is “directed to” an abstract idea, we turn to the second part
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
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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 Section 101 Guidance
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101. 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (January 7, 2019)
(“2019 Revised Guidance”).4 “All USPTO personnel are, as a matter of
internal agency management, expected to follow the guidance.”
2019 Revised Guidance at 51; see also October 2019 Update at 1.
Under the 2019 Revised Guidance and the October 2019 Update, 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”); and

4 In response to received public comments, the Office issued further
guidance on October 17, 2019, clarifying the 2019 Revised Guidance.
USPTO, October 2019 Update: Subject Matter Eligibility (the “October
2019 Update”) (available at https://www.uspto.gov/sites/default/files/
documents/peg_oct_2019_update.pdf).
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(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a)–(c), (e)–(h) (9th ed.
Rev. 08.2017, Jan. 2018)) (“Step 2A, Prong Two”).5
2019 Revised Guidance at 52–55.
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then look, under
Step 2B, 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.
2019 Revised Guidance at 52–56.
ANALYSIS
The Examiner determines claims 1–5, 15–19 and 21 are patent
ineligible under 35 U.S.C. § 101. See Final Action 2–5; Alice, 573 U.S. at
217 (describing the two-step framework “for distinguishing patents that
claim laws of nature, natural phenomena, and abstract ideas from those that
claim patent-eligible applications of those concepts”).
Step 2A—Prongs 1 and 2 identified in the 2019 Revised Guidance
Prong One
The Examiner determines, the claim “limitations describe the abstract
idea of allowing a user to purchase or sell assets or commodities available in

5 This evaluation is performed by (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception, and
(b) evaluating those additional elements individually and in combination to
determine whether the claim as a whole integrates the exception into a
practical application. See 2019 Revised Guidance at 54–55.
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the market which may correspond to a Certain Methods of Organizing
Human Activity (fundamental economic principles or practices and
commercial or legal interactions).” Final Action 3.
The Specification discloses in the Background:
In trading, a spread trade is the purchase or sale of at least
one instrument (e.g., a soybean oil future contract) and the
purchase or sale of at least one different instrument (e.g., a
soybean future contract) as a strategy. Spreads may have two legs
like the soybean oil future contract purchase and the soybean
future contract sale, or have more than two legs (e.g., one
purchase leg and three sale legs).
Specification ¶ 2.
[S]ome spreads are not offered as a unit or can only be
traded using individual legs because the legs are resident on
different exchanges or markets. A trader who trades spreads
executes each leg of the spread manually (e.g., entering each leg
order sequentially when market conditions meet a pricing
criteria), by an automated execution platform, or by an
algorithm-driven execution platform that attempts to execute all
of the legs as efficiently and accurately as possible once the
target pricing conditions are met.
Specification ¶ 3.
The Specification discloses:
The described technology “guarantees” a trader’s spread in the
sense that it provides a specific, guaranteed price, guaranteed
price range, or likely executed price to the user while providing
a holistic transfer of risk to the system, but separate legs of the
spread are not executed until the system determines a selected or
“best” time to fulfill each of the spread’s legs. The trader’s
execution risk may, therefore, be partially or fully placed on the
described technology and not on the trader. The described system
provides functionality such as this and as described below in an

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automated system, functionality which could not be performed
(or preformed in any commercially valuable way) manually.
Specification ¶ 15.
Claim 1 recites a method for “guaranteeing a trader a fill of a spread
order at a fulfillment value and a fulfillment quantity, and for executing
an electronic trade associated with the spread order on one or more live
electronic markets.” Claim 1 further recites receiving a spread order with a
target value whereas the target value is based upon a mathematical
relationship between an ask and bid price for multiple market instruments in
limitations [a]–[a2]. Claim 1 also recites decimalizing the market
instruments wherein each market instrument is associated with a decimalized
bid and ask price and corresponding bid and ask quantity in limitations [b],
[b1]. Claim 1 recites determining a decimalized fulfilment value and
quantity that will guarantee the fill of the spread order based upon the target
value and the decimalized real numbers of the bid and ask price in
limitations [c], [c1]. Claim 1 further recites transmitting decimalized
fulfilment value and quantity that will guarantee the fill of the spread order,
receiving an indication of acceptance from the trading client and filling the
spread order at the decimalized fulfilment value wherein the multiple market
instruments are fulfilled simultaneously at the decimalized fulfilment value
in limitations [d]–[f1]. Claim 1 recites issuing a change in inventory prior to
the trade of the spread order, generating and transmitting that the spread
order was filled in limitations [g]–[g2]. Claim 1 recites netting opposing
orders that have not been executed by others in limitation [h]. Claim 1
further recites executing a portion of the spread order based upon the netted
opposing orders wherein the portion of the spread order is executed at a best
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possible price based on the price and a liquidity of market instruments in
limitations [i]–[i3].
These steps comprise fundamental economic principles or practices
(including hedging, insurance, mitigating risk), as well as, mathematical
relationships, mathematical formulas or equations, mathematical
calculations and thus, the claim recites the judicial exceptions of “[c]ertain
methods of organizing human activity” and “[m]athematical concepts.”
2019 Revised Guidance, Section I (Groupings of Abstract Ideas).
Further, our reviewing court has found claims to recite judicial
exceptions when they recited similar subject matter. See Alice, 573 U.S. at
219–20 (concluding that use of a third party to mediate settlement risk is a
“fundamental economic practice” and thus an abstract idea); id. at 220
(describing the concept of risk hedging identified as an abstract idea in
Bilski as “a method of organizing human activity”); Inventor Holdings, LLC
v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1378–79 (Fed. Cir. 2017)
(holding that concept of “local processing of payments for remotely
purchased goods” is a “fundamental economic practice, which Alice made
clear is, without more, outside the patent system.”); OIP Techs., Inc. v.
Amazon.com, Inc., 788 F.3d 1359, 1362–63 (Fed. Cir. 2015) (concluding
that claimed concept of “offer-based price optimization” is an abstract idea
“similar to other ‘fundamental economic concepts’ found to be abstract ideas
by the Supreme Court and this court” (citations omitted)); buySAFE, Inc. v.
Google, Inc., 765 F.3d. 1350, 1355 (Fed. Cir. 2014) (holding that concept of
“creating a contractual relationship—a ‘transaction performance guaranty’”
is an abstract idea).
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Furthermore, our reviewing court has found claims to recite judicial
exceptions when they recited similar subject matter in regard to
mathematical concepts. See Bilski v. Kappos, 561 U.S. 593, 611 (2010)
(“The concept of hedging . . . reduced to a mathematical formula . . . is an
unpatentable abstract idea[.]”); Diamond v. Diehr, 450 U.S. 175, 191 (1981)
(“A mathematical formula as such is not accorded the protection of our
patent laws”) (citing Benson, 409 U.S. 63); Parker v. Flook, 437 U.S. 584,
594 (1978) (“[T]he discovery of [a mathematical formula] cannot support a
patent unless there is some other inventive concept in its application.”);
Benson, 409 U.S. at 71–72 (concluding that permitting a patent on the
claimed invention “would wholly pre-empt the mathematical formula
and in practical effect would be a patent on the algorithm itself”); Mackay
Radio & Telegraph Co. v. Radio Corp. of Am., 306 U.S. 86, 94 (1939) (“[A]
scientific truth, or the mathematical expression of it, is not patentable
invention[.”); SAP America, Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163
(Fed. Cir. 2018) (holding that claims to a “series of mathematical
calculations based on selected information” are directed to abstract ideas);
Digitech Image Techs., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344, 1350
(Fed. Cir. 2014) (holding that claims to “a process of organizing information
through mathematical correlations” are directed to an abstract idea);
Bancorp Servs., LLC v. Sun Life Assurance Co. of Can. (U.S.), 687 F.3d
1266, 1280 (Fed. Cir. 2012) (identifying the concept of “managing a stable
value protected life insurance policy by performing calculations and
manipulating the results” as an abstract idea). Therefore, we conclude the
claims recite judicial exceptions pursuant to Step 2A, Prong One, of the
2019 Revised Guidance.
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Prong Two
Under Prong Two of the 2019 Revised Guidance, we must determine
“whether the claim as a whole integrates the recited judicial exception
into a practical application of the exception.” 2019 Revised Guidance,
Section III(A)(2). We note that a “claim that integrates a judicial exception
into a practical application will apply, rely on, or use the judicial exception
in a manner that imposes a meaningful limit on the judicial exception, such
that the claim is more than a drafting effort designed to monopolize the
judicial exception.” 2019 Revised Guidance, Section III(A)(2).
Appellant contends:
[E]ven if Appellant’s claims include a judicial exception, the
claims integrate the judicial exception into a practical application
and thus recite patent-eligible subject matter. Thus, if one were
to assume that Appellant's claims recite the judicial exception of
a method of organizing human activity, much like claim 1 of
Example 42[6], Appellant’s claim is still patent-eligible because
it is not directed to the judicial exception because of any one of
the specific limitations [compared to the limitations of claim 1 of
Example 42].
Appeal Brief 18.
We do not find Appellant’s argument persuasive because the claimed
subject matter is distinguishable from the subject matter in Example 42. In
Example 42, the claimed subject matter was determined to be patent eligible
because, “the additional elements recite a specific improvement over prior
art systems by allowing remote users to share information in real time in a

6 Example 42 -- Method for Transmission of Notifications When Medical
Records Are Updated, Subject Matter Eligibility Examples: Abstract Ideas,
1-5, available at
https://www.uspto.gov/sites/default/files/documents/101_examples_37to42_
20190107.pdf
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standardized format regardless of the format in which the information was
input by the user.” The present Claim 1’s subject matter, in contrast, does
not improve the functioning of a device nor is it an improvement to a
technology or technical field, as discussed further below. See Answer 5;
2019 Revised Guidance at 55.
Appellant argues, “[t]he claims improve electronic trading technology
by addressing technical challenges faced under prior art trading technology
systems, as explained in detail in Appellant’s specification.” Appeal Brief
12; see Specification ¶¶ 3, 14. Appellant further argues the, “claimed
technology provides a particular solution to a problem or a particular way to
achieve a desired outcome similar to the claims in McRO, Inc.[7]” and the
claims in the instant application similarly use a combined order
of specific rules that are applied to create a desired result. Both
the disclosure and the claims relate to computer rules for
improving a particular process: the process of guaranteeing
fulfillment of a trader’s spread order while executing the spread
order at the best time to fill the spread order.
Appeal Brief 19–20; see Specification ¶ 15.
Our ruling court has held that, “[g]roundbreaking, innovative, or even
brilliant discovery does not by itself satisfy the § 101 inquiry.” Ass’n for
Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013). A
novel and nonobvious claim directed to a purely abstract idea is,
nonetheless, patent ineligible. See Mayo, 566 U.S. at 90; see also Diehr, 450
U.S. at 188–89 (“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

7 McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, (Fed. Cir.
2016).
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matter of a claim falls within the § 101 categories of possibly patentable
subject matter.”).
We note, in McRO, the Federal Circuit concluded the claim, when
considered as a whole, was directed to a “technological improvement over
the existing, manual 3-D animation techniques” through the “use[] [of]
limited rules . . . specifically designed to achieve an improved technological
result in conventional industry practice.” McRO, 837 F.3d at 1316.
Specifically, the Federal Circuit found the claimed rules allow “computers to
produce ‘accurate and realistic lip synchronization and facial expressions in
animated characters’ that previously could only be produced by human
animators;” and the “rules are limiting [because] they define morph weight
sets as a function of . . . phoneme sub–sequences.” McRO, 837 F.3d at 1313
(citations omitted).
However, we find no evidence of record here that the present situation
is like the one in McRO where computers were previously unable to make
certain subjective determinations, i.e., regarding morph weight and phoneme
timings, which could only be made prior to the claimed invention by human
animators. See Specification ¶¶ 14, 15 (“The trader’s execution risk may,
therefore, be partially or fully placed on the described technology and not on
the trader. The described system provides functionality such as this and as
described below in an automated system, functionality which could not be
performed (or [performed] in any commercially valuable way) manually.”)
(Emphasis added). Further, our reviewing court has held, “mere automation
of manual processes using generic computers does not constitute a
patentable improvement in computer technology.” Credit Acceptance Corp.
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v. Westlake Services, 859 F.3d 1044, 1055 (Fed. Cir. 2017). Accordingly,
we do not find Appellant’s argument persuasive of Examiner error.

Appellant contends:
Similar to Trading Technologies[8] where the claims
related to a better and specific graphical user interface for a
trading platform, the claims of the instant application relate to an
improved, useful, and specific system to determine and present
decimalized bid and ask prices using risk proxy markets and use
such prices in transferring risk from the trader and in fulfilling
spread orders in an electronic trading system.
Appeal Brief 20, 21 (emphasis added); see Specification ¶¶ 20–30.
We find the claim’s recitation of displaying or presenting data is
unlike patent-eligible claims directed to displaying data such as the claimed
user interface in Core Wireless.9 In Core Wireless, the court held that claims
which recited an interface were patent eligible because the claims recited
specific limitations of the interface such as: an application summary that can
be reached through a menu, the data being in a list and being selectable to
launch an application, and additional limitations directed to the actual user
interface displayed and how it functions. Core Wireless, 880 F.3d at 1363.
The court found that the claims were directed to an improved user interface
and not the abstract concept of an index as the claim “limitations disclose a
specific manner of displaying a limited set of information to the user, rather
than using conventional user interface methods to display a generic index on

8 Trading Techs. Int’l, Inc. v. CQG, Inc., 675 F. App’x 1001 (Fed. Cir.
2017).

9 Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356
(Fed. Cir. 2018).
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a computer.” Core Wireless 880 F.3d at 1363; see also Trading Tech v.
CQG, Inc., 675 Fed. App’x 1001 (Fed. Cir. 2017) (Holding that a user
interface with a prescribed functionality directly related to the interface’s
structure, that is addressed to and resolves a problem in the art, is patent
eligible.). In Appellant’s claim 1, there are no limitations directed to a
specific manner of displaying or presenting a limited set of information to
the user or to how the user interacts with the displayed data and, therefore,
we find Appellant’s arguments unpersuasive.
We find claim 1 does not recite any improvement to the claimed
computer system; instead claim 1 only uses the computer system to automate
a trader’s fulfilling a spread order. See Specification ¶ 15. Additionally, we
detect no additional element (or combination of elements) recited in
Appellant’s representative claim 1 that integrates the judicial exception into
a practical application. See 2019 Revised Guidance, Section III(A)(2). For
example, Appellant’s claimed additional elements (e.g., servers, software,
network, processors, inventory) do not: (1) improve the functioning of a
computer or other technology; (2) is not applied with any particular machine
(except for generic devices); (3) does not effect a transformation of a
particular article to a different state; and (4) is not applied in any meaningful
way beyond generally linking the use of the judicial exception to a particular
technological environment, such that the claim as a whole is more than a
drafting effort designed to monopolize the exception. See MPEP
§§ 2106.05(a)–(c), (e)–(h).
Accordingly, we determine the claim does not integrate the recited
judicial exception into a practical application. See 2019 Revised Guidance,
Section III(A)(2).
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Step 2B identified in the 2019 Revised Guidance
In Step 2B, we need to consider whether an additional or combination
of elements, “[a]dds 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 “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.”
2019 Revised Guidance at 56.
Appellant argues, “The claimed subject matter is not ‘well-
understood, routine, conventional activity.’ Appellant respectfully contends
that the combination and arrangement of the elements of the claims are both
non-conventional and non-generic.” Appeal Brief 22. Appellant proceeds to
recite limitations from claim 1 and further argues that “operations of claim 1
recite a non-conventional combination of additional elements that present a
specific discrete implementation of guaranteeing a trader a fill of a spread
order at a decimalized fulfillment value and a fulfillment quantity.” Appeal
Brief 23.
Appellant further argues:
[T]he Examiner has failed to provide the necessary express
support to sustain a prima facie case for a rejection under Alice
Step 2B (See, e.g., October 2019 Update, p. 16 (“[W]hen the
examiner has concluded that certain claim elements recite well-
understood, routine, conventional activity in the relevant field,
the examiner must expressly support such a rejection in writing
with one of the four options specified in Section III.A of the
Berkheimer Memorandum. [10]”)).

10 USPTO, “Change in Examination Procedure Pertaining to Subject Matter
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Reply Brief 9.
We find Appellant’s argument regarding express support could have
been—but was not—raised in the Appeal Brief, and thus is waived. See,
e.g., 37 C.F.R. § 41.41(b)(2) (“Any argument raised in the reply brief which
was not raised in the appeal brief, or is not responsive to an argument raised
in the examiner’s answer, . . . will not be considered by the Board for
purposes of the present appeal, unless good cause is shown.”).
The Examiner determines in the Final Action:
[C]laim 1 does not include additional elements that are
sufficient to amount to significantly more than the judicial
exception because the additional elements of trading system
running on one or more servers, one or more processors of the
trading system, and electronic market are all recited at a high
level of generality in that it results in no more than simply
applying the abstract idea using generic computer elements
(MPEP 2106.05(f)). The network limitation is a field of use
limitation (MPEP 2106.05(h)).
Final Action 4.
We find Appellant’s arguments are not persuasive of Examiner error
because the Examiner supports the determination that the additional
elements are well-understood, routine, or conventional by citing to various
sections of the MPEP. See Final Action 4. It is further noted that the
Specification discloses that the additional elements are well-understood,
routine or conventional. See Specification ¶¶ 36–40.
Further in Bascom, our reviewing court found that while the claims of
the patent were directed to an abstract idea, the patentee alleged an

Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP,
Inc.)” (April 19, 2018) available
at https://www.uspto.gov/sites/default/files/documents/memo-berkheimer-
20180419.PDF.
Appeal 2020-004135
Application 14/555,376

20

“inventive concept can be found in the ordered combination of the claim
limitations that transform the abstract idea of filtering content into a
particular, practical application of that abstract idea.” Bascom Global
Internet Services, Inc., v. AT&T Mobility LLC 827 F.3d 1341, 1352 (Fed. Cir.
2016). In particular, the patent in Bascom claimed “a technology-based
solution (not an abstract-idea-based solution implemented with generic
technical components in a conventional way) to filter content on the Internet
that overcomes existing problems with other Internet filtering systems.”
Bascom at 1351.
Claim 1 is distinguishable, as it recites an abstract-idea-based
solution, that is, a method of filling a spread order with generic technical
components (e.g., computer processor, software, network), in a conventional
way. See generally Specification. Therefore, we are not persuaded that
ordered combination of limitations in representative claim 1 provides an
inventive concept, and we find the claims simply appends a well-understood,
routine and conventional activity to the judicial exception. See 2019
Revised Guidance at 56.
Accordingly, we conclude claims 1–5, 15–19 and 21 are directed to
certain methods of organizing human activity such as fundamental economic
principles or practices (including hedging, insurance, mitigating risk), as
well as, mathematical concepts such as mathematical relationships,
mathematical formulas or equations, mathematical calculations as identified
in the Memorandum, and are directed to the judicial exception without
significantly more. See 2019 Revised Guidance at 52. We affirm the
Examiner’s 35 U.S.C. § 101 rejection of claims 1–5, 15–19 and 21.

Appeal 2020-004135
Application 14/555,376

21

CONCLUSION

Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–5, 15–19,
21
101 Eligibility 1–5, 15–
19, 21

No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1). See 37 C.F.R.
§ 1.136(a)(1)(v).
AFFIRMED