Howard W. Lutnick et al.Download PDFPatent Trials and Appeals BoardOct 30, 201912631181 - (D) (P.T.A.B. Oct. 30, 2019) Copy Citation 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. 12/631,181 12/04/2009 HOWARD W. LUTNICK 09-2323 1264 63710 7590 10/30/2019 INNOVATION DIVISION CANTOR FITZGERALD, L.P. 110 EAST 59TH STREET (6TH FLOOR) NEW YORK, NY 10022 EXAMINER FELTEN, DANIEL S ART UNIT PAPER NUMBER 3692 NOTIFICATION DATE DELIVERY MODE 10/30/2019 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): lkorovich@cantor.com patentdocketing@cantor.com phowe@cantor.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte HOWARD W. LUTNICK, MARK MILLER, KEVIN FOLEY, BRIAN GAY, and ANDREW FISHKIND ____________ Appeal 2018-002929 Application 12/631,181 Technology Center 3600 ____________ Before BIBHU R. MOHANTY, NINA L. MEDLOCK, and CYNTHIA L. MURPHY, Administrative Patent Judges. MOHANTY, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE The Appellant1 seeks our review under 35 U.S.C. § 134 from the final rejection of claims 1–31, which are all the claims pending in the Application. We have jurisdiction under 35 U.S.C. § 6(b). SUMMARY OF THE DECISION We AFFIRM. 1 We use the word “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42(a). Appellant identifies the real party in interest as CFPH, L.P. App. Br. 3. Appeal 2018-002929 Application 12/631,181 2 THE INVENTION The Appellant’s claimed invention is drawn to a trading system to perform trades (Spec. 22, ll. 29–30). Claim 1, reproduced below the italics added, is representative of the subject matter on appeal. 1. A method of interaction between electronic marketplaces to facilitate trade execution, comprising: receiving, by a first electronic marketplace that is configured to execute trades, a first indication of a firm order from a broker, in which the firm order defines a side of a trade for a financial instrument; transmitting a second indication of the firm order from the first electronic marketplace to a second electronic marketplace that is configured to execute trades without attempting to execute the firm order at the first electronic marketplace; receiving, by the second electronic marketplace, the second indication; in response to receiving the second indication by the second electronic marketplace, transmitting, by the second electronic marketplace, a third indication of a non-firm order defined by the firm order to the first electronic marketplace; receiving, by the first electronic marketplace, the third indication; in response to receiving the third indication by the first electronic marketplace, determining a matching order for the non-firm order at the first electronic marketplace, in which the matching order defines an opposite side of the trade for the financial instrument; in response to determining the matching order at the first electronic marketplace, confirming by the first electronic marketplace the non-firm order with the second electronic marketplace, and facilitating execution of the trade; transmitting a fourth indication that the non-firm order has been fulfilled to the second electronic marketplace from the first electronic marketplace; receiving, by the second electronic marketplace, the fourth indication; Appeal 2018-002929 Application 12/631,181 3 in response to receiving the fourth indication, transmitting from the second electronic marketplace to the first electronic marketplace, a fifth indication that the firm order has been fulfilled; receiving, by the first electronic marketplace, the fifth indication; and in response to receiving the fifth indication, transmitting, from the first electronic marketplace, a sixth indication to the broker that the firm order has been fulfilled. THE REJECTIONS The following rejections are before us for review: 1. Claims 1–31 are rejected under 35 U.S.C. § 101 as being directed to a judicial exception without significantly more. 2. Claims 1–31 are rejected under 35 U.S.C. § 103(a) as unpatentable over Fishbain (US 2005/0125327 A1; June 9, 2005). FINDINGS OF FACT We have determined that the findings of fact in the Analysis section below are supported at least by a preponderance of the evidence.2 ANALYSIS Rejection under 35 U.S.C. § 101 The Appellant argues that the rejection of claim 1 is improper because the claim is not directed to an abstract idea (App. Br. 7–13; Reply Br. 2, 3). 2 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988) (explaining the general evidentiary standard for proceedings before the Patent Office). Appeal 2018-002929 Application 12/631,181 4 The Appellant argues further that the claim is “significantly more” than the alleged abstract idea (App. Br. 13–16). In contrast, the Examiner has determined that the rejection of record is proper (Final Action 4–7; Ans. 6–9). We agree with the Examiner. 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. 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, 69 (1972)). Concepts determined to be patent eligible include physical and chemical processes, Appeal 2018-002929 Application 12/631,181 5 such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191 (1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India rubber, smelting ores” (id. at 183 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 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 187; see also id. at 191 (“We view respondents’ claims as nothing more than a process for molding rubber products and not as an attempt to patent a mathematical formula.”). Having said that, the Supreme Court also indicated that a claim “seeking patent protection for that formula in the abstract . . . is not accorded the protection of our patent laws, . . . and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment.” Id. (internal 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.”). The PTO recently published revised guidance on the application of § 101. USPTO, 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”). Under the 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 Appeal 2018-002929 Application 12/631,181 6 (2) additional elements that integrate the judicial exception into a practical application, i.e., evaluate whether the claim “appl[ies], rel[ies] on, or use[s] 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.” (see Guidance, 84 Fed. Reg. at 54; see also 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 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 Guidance, 84 Fed. Reg. at 56. If the claim is “directed to” an abstract idea, we turn to the second step of the Alice and Mayo framework, where “we must examine the elements of the claim to determine whether it contains an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent- eligible application.” Alice, 573 U.S. at 221 (citation omitted). “A claim that recites an abstract idea must include ‘additional features’ to ensure ‘that the [claim] is more than a drafting effort designed to monopolize the [abstract idea].’” Id. (alterations in original) (quoting Mayo, 566 U.S. at 77). “[M]erely requir[ing] generic computer implementation[] fail[s] to transform that abstract idea into a patent-eligible invention.” Id. Here, the Examiner has determined that claim 1 is directed to the concept of execution or method of trading and processing orders and that this is fundamental economic practice and directed to an abstract idea (Ans. 7). We substantially agree with the Examiner. We determine that the Appeal 2018-002929 Application 12/631,181 7 claim recites, in the above-italicized limitations, matching and confirming trade orders, which is a fundamental economic practice, and thus an abstract idea. See Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1084, 1093 (Fed. Cir. 2019) (in which claims drawn to receiving and displaying information related to bids and offers was held to be drawn to an abstract concept); Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1378, 1384, 1385 (Fed. Cir. 2019) (where claims drawn to providing information to traders in a way to help them process information more quickly was held to be directed to an abstract idea); Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016) (where collecting information, analyzing it, and displaying results from certain results of the collection and analysis was held to be an abstract idea). Thus, claim 1 recites an abstract idea, and we next look to whether claim 1 recites limitations which, individually or collectively, integrate this abstract idea into a practical application. The claims do not improve computer functionality, improve another field of technology, utilize a particular machine, or effect a physical transformation. Rather, we determine that nothing in the claims imposes a meaningful limit on the judicial exception, such that the claims are more than a drafting effort to monopolize the judicial exception. For example, in claim 1, the steps of (1) “receiving . . . a first indication of a firm order from a broker,” (2) “transmitting a second indication of the firm order from the first electronic marketplace to a second electronic marketplace,” (3) “receiving, . . . the second indication,” (4) “transmitting, . . . a third indication of a non-firm order,” (5) “receiving . . . the third indication,” (6) “determining a matching order for the non-firm Appeal 2018-002929 Application 12/631,181 8 order at the first electronic marketplace,” (7) “confirming by the first electronic marketplace the non-firm order with the second electronic marketplace, and facilitating execution of the trade,” (8) “transmitting a fourth indication that the non-firm order has been fulfilled to the second electronic marketplace from the first electronic marketplace,” (9) “receiving . . . the fourth indication, (10) “transmitting . . . a fifth indication that the firm order has been fulfilled,” (11) “receiving, . . . the fifth indication,” and (12) “in response to receiving the fifth indication, transmitting, from the first electronic marketplace, a sixth indication to the broker that the firm order has been fulfilled” are merely steps performed by a generic computer that do not improve computer functionality. That is, these recited steps (1)–(12) “do not . . . purport to improve the functioning of the computer itself” but are merely generic functions performed by a conventional processor. Alice, 573 U.S. at 225–26. Likewise, these same steps (1)–(12) listed above do not improve the technology of the technical field and merely use generic computer components and functions to perform the steps. Also, the recited method steps (1)–(12) above do not require a particular machine and can be utilized with a general purpose computer, and the steps performed are purely conventional. In this case the general purpose computer is merely an object on which the method operates in a conventional manner. Further, the claim as a whole fails to effect any particular transformation of an article to a different state. The recited steps (1)–(12) fail to provide meaningful limitations to limit the judicial exception and rather are mere instructions to apply the method to a generic computer. Considering the elements of the claim both individually and as an ordered combination, the functions performed by the computer system at Appeal 2018-002929 Application 12/631,181 9 each step of the process are purely conventional. Each step of the claimed method does no more than require a generic computer to perform a generic computer function. Thus, the claimed elements have not been shown to integrate the judicial exception into a practical application. See Guidance, 84 Fed. Reg. at 54–55. The Revised Guidance references the MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) §§ 2106.05(a)–(c) and (e)–(h). Turning to the second step of the Alice and Mayo framework, we determine that the claim does not contain an inventive concept sufficient to “transform” the abstract nature of the claim into a patent-eligible application. The claim fails to add a specific limitation beyond the judicial exception that is not well-understood, routine, and conventional in the field. Rather the claim uses well-understood, routine, and conventional activities previously known in the art and they are recited at a high level of generality. The Specification at page 12, for example, describes using conventional computer components such as computers, processors, and microcontrollers in a conventional manner. The claim specifically includes recitations for an “electronic marketplace” to implement the method but components are all used in a manner that is well-understood, routine, and conventional in the field. The Appellant has not shown these claimed generic computer components, which are used to implement the claimed method, are not well understood, routine, or conventional in the field. The Appellant has not demonstrated that the computers described in the Specification at page 12 for instance are not conventional computer components known to perform similar functions in a well-understood manner. Here, the claim has not been shown to be “significantly more” than the abstract idea. Appeal 2018-002929 Application 12/631,181 10 The Appellant in the Appeal Brief, at page 8, has also cited to McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016) but, the claims in that case are distinguished from this case in being directed to rules for lip sync and facial expression animation. For these above reasons, the rejection of claim 1 is sustained. The Appellant has provided the same arguments for the remaining claims, which are drawn to similar subject matter, and the rejection of these claims is sustained for the same reasons given above. Rejections under 35 U.S.C. § 103(a) The Appellant argues that the rejection of claim 1 is improper because Fishbain fails to disclose the claim limitation for: receiving, by a first electronic marketplace that is configured to execute trades, a first indication of a firm order from a broker, in which the firm order defines a side of a trade for a financial instrument; transmitting a second indication of the firm order from the first electronic marketplace to a second electronic marketplace that is configured to execute trades without attempting to execute the firm order at the first electronic marketplace; receiving, by the second electronic marketplace, the second indication; in response to receiving the second indication by the second electronic marketplace, transmitting, by the second electronic marketplace, a third indication of a non-firm order defined by the firm order to the first electronic marketplace. (App. Br. 18–19.) In contrast, the Examiner has determined that the cited claim limitation is shown by Fishbain at paragraphs 23 and 24 (Ans. 9). Appeal 2018-002929 Application 12/631,181 11 We agree with the Appellant that Fishbain at paragraphs 23 and 24 fails to disclose the argued claim limitation and this rejection is not sustained. Fishbain, at paragraphs 23 and 24, makes no disclosure of a “third indication of a non-firm order.” For this reason, the rejection of claim 1 and its dependent claims is not sustained. The Appellant argues in the Appeal Brief at page 20 that independent claims 3 and 21 contain similar limitations to that of claim 1 and that these rejections are improper as well. We agree with the Appellant that claim 3 contains at least some of the argued claim limitations from claim 1 in the “third indication” and “non-firm order” and the rejection of claim 3 and its dependent claim is, therefore, not sustained. Claim 21, however, does not contain the argued limitations of claim 1, and is broader in scope. The Appellant has not provided a specific argument drawn to claim limitations for claim 21 or its dependent claims and this rejection is, therefore, sustained. CONCLUSION In summary: Claims Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 1–31 101 Eligibility 1–31 1–31 103 Fishbain 1–20 21–31 Overall Outcome 1–31 Appeal 2018-002929 Application 12/631,181 12 TIME PERIOD FOR RESPONSE No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R. § 1.136(a)(1)(iv). AFFIRMED Copy with citationCopy as parenthetical citation