Julian D. A. Wiseman

Patent Trials and Appeals Board

Sep 27, 2019

14249172 - (D) (P.T.A.B. Sep. 27, 2019)

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.
14/249,172 04/09/2014 Julian D. A. WISEMAN 0082752-000002 3315
21839 7590 09/27/2019
BUCHANAN, INGERSOLL & ROONEY PC
POST OFFICE BOX 1404
ALEXANDRIA, VA 22313-1404
EXAMINER
O'CONNOR, GERALD J
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
09/27/2019 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):
ADIPDOC1@BIPC.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte JULIAN D. A. WISEMAN
____________

Appeal 2018-0013541
Application 14/249,1722
Technology Center 3600
____________

Before HUBERT C. LORIN, BRADLEY B. BAYAT, and
TARA L. HUTCHINGS, Administrative Patent Judges.

BAYAT, Administrative Patent Judge.

DECISION ON APPEAL

Appellant appeals under 35 U.S.C. § 134(a) from the Examiner’s final
decision rejecting claims 1–14 under 35 U.S.C. § 101 as being directed to
non-statutory subject matter. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 Throughout this Decision, we refer to the Appellant’s Appeal Brief
(“Appeal Br.,” filed Jan. 13, 2017), Reply Brief (“Reply Br.,” filed Nov. 22,
2017), and Specification (“Spec.,” filed Apr. 9, 2014), the Examiner’s
Answer (“Ans.,” mailed Sept. 22, 2017) and Final Office Action (“Final
Act.,” mailed June 17, 2016).
2 According to the Appellant, the real party in interest is “QUIRKAFLEEG
LIMITED.” Appeal Br. 1.
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STATEMENT OF THE CASE
Appellant’s invention is drawn to a “method for physical delivery of a
futures contract by an exchange operating as intermediary between shorts
and longs in the futures contract.” Spec., Abstract.
Independent claim 1, reproduced below with added bracketed
notations, is illustrative of the subject matter on appeal.
1. A method for providing physical delivery of a
futures contract by an exchange operating as intermediary
between shorts and longs in the futures contract, the method
comprising:
[(a)] publishing a preliminary list of deliverables
including at least one of possible deliverables and a class of
deliverables;
[(b)] generating a modified list of deliverables in which
some deliverables, having an algorithmically determinable
weakness relative to other deliverables in the list of deliverables
is/are removed, and the other, non-removed deliverables in the
preliminary list of deliverables remain in the modified list of
deliverables;
[(c)] permitting longs to veto a small subset of the
deliverables in the modified list of deliverables, for a cost ≥ 0,
and for those longs so choosing to veto, accepting those vetoes;
[(d)] receiving information from shorts indicating which
of the other deliverables included in the modified list of
deliverables are desired to be delivered; and
[(e)] assigning shorts to longs so as to maximize the
number of shorts who can deliver the desired deliverables,
while ensuring that, for each long that vetoes one or more
deliverables, the vetoing long does not receive any of the
vetoed deliverables.

Appeal Br., Claims App. 1.
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ANALYSIS
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.”).
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. (quoting Mayo, 566 U.S. at 77). “[M]erely requir[ing]
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generic computer implementation[] fail[s] to transform that abstract idea into
a patent-eligible invention.” Id.
Recently, the PTO published revised guidance on the application of
§ 101. See 2019 Revised Patent Subject Matter Eligibility Guidance, 84
Fed. Reg. 50 (USPTO Jan. 7, 2019) (“Guidance”). Revised Step 2A, Prong
One, is an evaluation of whether the claim recites (1) any judicial
exceptions, including certain groupings of abstract ideas (i.e., (a)
mathematical concepts, (b) certain methods of organizing human activity,
and (c) mental processes). If so, Revised Step 2A, Prong Two, is an
evaluation of whether (2) the judicial exception is integrated a practical
application (see MPEP §§ 2106.05(a)–(c), (e)–(h) (9th ed. Rev. 08.2017,
Jan. 2018)). Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, we 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 Step 2B, 84 Fed. Reg. at
56.
Alice Step 1
Under the first step of the Alice framework, the Examiner determined
that the claims are directed to3 “providing physical delivery of a futures

3 Although we and the Examiner describe, at different levels of abstraction,
to what the claims are directed, it is recognized that “[a]n abstract idea can
generally be described at different levels of abstraction.” Apple, Inc. v.
Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016). That need not and, in
this case does not, “impact the patentability analysis.” See id. at 1241.
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contract,” an abstract idea of “a fundamental economic practice long
prevalent in our system of commerce” (Final Act. 8).
Appellant argues all the pending claims as a group. See Appeal Br. 3–
10; see also Reply Br. 1–4. We select independent claim 1 as representative
for this group. Thus, claims 2–14 stand or fall with claim 1. 37 C.F.R.
§ 41.37(c)(1)(iv). In particular, Appellant argues the claims are not directed
to an abstract idea because “the claims involve several detailed steps for a
concrete implementation of a process that causes the price of a future to
track the price of a set of deliverables, where there is a risk that a small
subset of the deliverables could become materially cheaper than the others.”
Appeal Br. 4. We are not persuaded for the reasons that follow.

Does claim 1 recite a judicial exception?
The Examiner determines that claim 1 is directed to a statutory
category. Final Act. 8. As such, we first consider whether the claim recites
a judicial exception. Guidance, 84 Fed. Reg. at 51. The Guidance
synthesizes key concepts identified by the courts as abstract ideas into three
primary subject-matter groupings: mathematical concepts, certain methods
of organizing human activity, and mental processes. Id. at 52. The
Guidance provides that “[c]ertain methods of organizing human activity—
fundamental economic principles or practices (including hedging, insurance,
mitigating risk)” and “commercial or legal interactions (including
agreements in the form of contracts; legal obligations; or business relations)”
are abstract ideas. Id. We agree with the Examiner that claim 1’s method
for providing physical delivery of a futures contract by an exchange
operating as intermediary between shorts and longs in the futures contract
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recites a fundamental economic practice, which is a certain method of
organizing human activity, and thus an abstract idea.
Claim 1 recites “[a] method for providing physical delivery of a
futures contract by an exchange operating as intermediary between shorts
and longs in the futures contract” comprising five steps: (a) “publishing a
preliminary list of deliverables…;” (b) “generating a modified list of
deliverables in which some deliverables, having an algorithmically
determinable weakness relative to other deliverables in the list of
deliverables is/are removed, and the other, non-removed deliverables in the
preliminary list of deliverables remain in the modified list of deliverables;”
(c) “permitting longs to veto a small subset of the deliverables in the
modified list of deliverables, for a cost ≥ 0, and for those longs so choosing
to veto, accepting those vetoes;” (d) “receiving information from shorts
indicating which of the other deliverables included in the modified list of
deliverables are desired to be delivered;” and (e) “assigning shorts to longs
so as to maximize the number of shorts who can deliver the desired
deliverables, while ensuring that, for each long that vetoes one or more
deliverables, the vetoing long does not receive any of the vetoed
deliverables.” Appeal Br., Claims App. 1. These steps are all performed
manually; no computer implementation is claimed.
Under the broadest reasonable interpretation, steps (a) through (e) of
claim 1 describe activities for managing the physical delivery of a futures
contract by constraining the actions at delivery of longs and shorts and
assigning shorts to longs to maximize the number of shorts who can deliver
the desired deliverables, and ensuring the vetoing long does not receive any
of the vetoed deliverables. The purpose of facilitating the physical delivery
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of a futures contract by an exchange acting as an intermediary between
shorts and longs in the manner claimed, is to safeguard buyers (longs) from
being disadvantaged by “constrain[ing] the actions at delivery of longs and
shorts, such that the cheapest-to-deliver will typically not be delivered,
instead the contract [will] result[] in an exchange of a deliverable near the
median-to-deliver.” Spec. ¶ 2. In other words, the exchange publishes a
preliminary list of deliverables (step (a)), “removes those CDs with ratings
too weak [and generates a modified list [(step (b)]] and permits longs to veto
a small subset of the deliverables [step (c)], receives information from shorts
indicating deliverables in the list that are desired to be delivered [step (d)],
[and matches] and assigns longs to shorts for maximizing the number of
shorts who can deliver the desired deliverables [step (e)].” Appeal Br. 7.
According to Appellant, the claims are
directed to a process implementable in a futures exchange
device for the purpose of reducing or eliminating the risk of
price fluctuation in futures contracts, and allow a future to track
the price of a set of deliverables, so that one or more of the
deliverables cannot become materially cheaper than other
deliverables.

Reply Br. 3–4. We do not disagree with Appellant’s characterization of the
abstract idea, except that none of the claims recite a futures exchange device.
In fact, courts have described similar concepts relating to the economy and
commerce, such as agreements between people in the form of contracts,
legal obligations, and business relations, a fundamental economic practice.4

4 The term “fundamental” is used in the sense of being foundational or basic,
and not in the sense of necessarily being “old” or “well-known.” See, e.g.,
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See, e.g., buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014)
(creating a contractual relationship), In re Chorna, 656 F. App’x. 1016,
1019–20 (Fed. Cir. 2016) (contractual relation similar to trading hindsight
financial instruments), Alice, 573 U.S. at 219–20 (using a third party to
mitigate settlement risk), and Bilski, 561 U.S at 611–12 (hedging/protecting
against the financial risk of price fluctuations).
Thus, claim 1 recites an abstract idea.

Is claim 1 “directed to” the recited judicial exception?
Because claim 1 recites an abstract idea, we determine whether the
recited judicial exception is integrated into a practical application.
Guidance, 84 Fed. Reg. at 51. When a claim recites a judicial exception and
fails to integrate the exception into a practical application, the claim is
“directed to” the judicial exception. Id. The claim may integrate the judicial
exception when, for example, it reflects an improvement to technology or a
technical field. Id. at 55.
In that regard, Appellant argues claim 1 “encompasses an ordered
combination of rules that defines how the claimed embodiment is an
improvement over existing processes or methodologies.” Appeal Br. 4
(“[R]ules that allow a ‘middle-of-the-pack’ price to be physically delivered,
thereby removing the incentive to manipulate price, which had disrupted and
plagued the cash-settlement of LIBOR futures.”). According to Appellant:
“These rules are limiting in that they define a modified list of deliverables

In re Smith, 815 F.3d 816, 818–19 (Fed. Cir. 2016) (describing a new set of
rules for conducting a wagering game as a “fundamental economic
practice”).
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based on a weakness relative to other deliverables in the list, where the
weakness is determined using an algorithm.” Id.; see also id. at 5 (“There is
not, nor has there ever been a deliverable future with anything comparable a
middle-to-deliver quality.”). But, even assuming that the techniques claimed
are “[g]roundbreaking, innovative, or even brilliant,” that is not enough for
eligibility. Association for Molecular Pathology v. Myriad Genetics,
Inc., 569 U.S. 576, 591 (2013); accord buySAFE, 765 F.3d at 1352. Indeed,
“a claim for a new abstract idea is still an abstract idea.” Synopsys, Inc. v.
Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016) (citing Mayo,
566 U.S. at 90). “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.” Diamond v. Diehr, 450 U.S. 175, 188–189 (1981). The
question is not whether the claim is novel and encompasses an improvement
over existing processes or methodologies, but rather, whether the claim
reflects an improvement to technology or a technical field.
We determine that claim 1 does not 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, i.e., the claim does not integrate the
judicial exception or abstract idea into a practical application. See Guidance,
84 Fed. Reg. at 55.5 As noted above, the claims do not require any computer

5 We acknowledge that some of these considerations may be properly
evaluated under Step 2 of Alice (Step 2B of Office guidance). Solely for
purposes of maintaining consistent treatment within the Office, we evaluate
them under Step 1 of Alice (Step 2A of Office guidance). See 2019 Revised
Guidance, 84 Fed. Reg. at 55.
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implementation. We are unpersuaded by Appellant’s contention that
“[w]hile Appellant’s claimed rules for delivering futures are executed by
computers, it is the incorporation of the claimed rules into the computer and
not merely the use of the computer, that ‘improved the existing
technological process’ by allowing the automation of further tasks.” Appeal
Br. 7 (citing McRO, [Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299
(Fed. Cir. 2016)]). None of the steps in claim 1 are tied to a computer or
computer technology, and none of these steps recite rules or their
incorporation into a computer.
In McRO the court asked whether the claim as a whole “focus[es] on a
specific means or method that improves the relevant technology” or is
“directed to a result or effect that itself is the abstract idea and merely
invoke[s] generic processes and machinery.” McRO, 837 F.3d at 1314–15
(Claims determined not abstract because they “focused on a specific asserted
improvement in computer animation.”). The claims in McRO were directed
to a system of lip synchronization and facial expressions of animated
characters, and the court concluded that the computerized system in McRO
operated by rules whose implementation was not previously available
manually. Id. at 1316. Here, in contrast to McRO, implementation is
conducted without computer assistance. Appellant does not point to
anything in the claims that resembles the improvement to the technical field
of computer animation that was not simply the use of a generic computer in
McRO. Appellant also does not direct our attention to anything in the
Specification to indicate that the invention provides an improvement in the
computer’s technical functionality. As stated previously, the claims recite
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no technical element or details for implementing the steps. Any alleged
improvement is of a business/financial nature, not a technological one.
Besides, any computer envisioned for use in the method is a generic
computer operating in its ordinary and conventional manner. See Spec.
¶¶ 30–36 (describing a generic/general purpose computer). It is well-settled
by now that computer-based efficiency by itself does not save an otherwise
abstract method. See Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of
Canada (U.S.), 687 F.3d 1266, 1277–78 (Fed. Cir. 2012) (Performance by
computer of operations that previously were performed manually or
mentally, albeit less efficiently, does not convert a known abstract idea into
eligible subject matter.). Moreover, the claims do not gain subject matter
eligibility solely because they are narrowed or limited to Appellant’s alleged
improvement over existing processes. See, e.g., Intellectual Ventures I LLC
v. Symantec Corp., 838 F.3d 1307, 1321 (Fed. Cir. 216) (“A narrow claim
directed to an abstract idea, however, is not necessarily patent-eligible”); see
also BSG Tech LLC v. Buyseasons, Inc., 899 F.3d 1281, 1287 (Fed. Cir.
2018) (“a claim is not patent eligible merely because it applies an abstract
idea in a narrow way.”).
Further, we are not persuaded by Appellant’s argument that “the
claimed invention does not preempt all manner and methods of delivering
futures.” Appeal Br. 6. Although preemption may signal patent-ineligible
subject matter, the absence of preemption does not demonstrate patent
eligibility. See FairWarning, IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089,
1098 (Fed. Cir. 2016). For claims covering a patent-ineligible concept,
preemption concerns “are fully addressed and made moot” by an analysis
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under the Alice framework. Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788
F.3d 1371, 1379 (Fed. Cir. 2015).
Thus, we are not persuaded of error in the Examiner’s determination
that the claims are directed to an abstract idea.

Alice Step 2
Does claim 1 provide an inventive concept?
To determine whether a claim provides an inventive concept, the
additional elements are considered—individually and in combination—to
determine whether they (1) add a specific limitation beyond the judicial
exception that is not “well-understood, routine, conventional” in the field or
(2) simply append well-understood, routine, conventional activities
previously known to the industry, specified at a high level of generality, to
the judicial exception. Guidance, 84 Fed. Reg. at 56.
Appellant argues that steps (b) through (e) provide significantly more
than the alleged abstract idea by adding a specific limitations other than
what is well-understood, routine and conventional in the field. Appeal Br.
8–10. Appellant’s argument is not persuasive because “a claimed
invention’s use of the ineligible concept to which it is directed cannot supply
the inventive concept that renders the invention ‘significantly more’ than
that ineligible concept.” BSG, 899 F.3d at 1290. None of these limitations
provide an inventive concept in the non-abstract application realm. Indeed,
this type of activity has been found to be well-understood, routine,
conventional activity when they are claimed in a merely generic manner
(e.g., at a high level of generality). Cf. OIP Techs., Inc. v. Amazon.com,
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Inc., 788 F.3d 1359, 1362–63 (Fed. Cir. 2015) (Determining an estimated
outcome and setting a price).
Contrary to Appellant’s argument (Reply Br. 3), we find no parallel
between claim 1 and the patent-eligible claims in BASCOM.6 In BASCOM,
the Federal Circuit held that “[t]he inventive concept described and claimed
in the ’606 patent is the installation of a filtering tool at a specific location,
remote from the end-users, with customizable filtering features specific to
each end user.” 827 F.3d at 1350. The court explained that the remote
location of a filtering tool having customizable user-specific filtering
features provides the filtering tool both the benefits of a filter on a local
computer and the benefits of a filter on the ISP server, which is a technical
improvement over prior art ways of filtering content. Id. at 1350–51. Here,
Appellant has not demonstrated any particular arrangement in the claim as
providing an inventive concept parallel to BASCOM’s technology-based
solution.
Based on the foregoing, we sustain the rejection of claim 1 under 35
U.S.C. § 101, and claim 2–14, which fall with claim 1.

DECISION
The Examiner’s rejection of claims 1–14 under 35 U.S.C. § 101
is affirmed.

6 BASCOM Global Internet Servs., Inc. v. AT&T Mobility LLC, 827
F.3d 1341 (Fed. Cir. 2016).
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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)(iv).

AFFIRMED