Marcel Naas et al.

Patent Trials and Appeals Board

Feb 10, 2021

2020005238 (P.T.A.B. Feb. 10, 2021)

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.
10/828,497 04/21/2004 Marcel Naas 10-587-US (gr13) 4289
128144 7590 02/10/2021
Rimon PC
420 West Main Street
Suite 101B
Boise, ID 83702-7358
EXAMINER
KAZIMI, HANI M
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
02/10/2021 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):
docketing.rimonlaw@clarivate.com
eofficeaction@appcoll.com
patentdocketing@rimonlaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

Ex parte MARCEL NAAS and GERD HARTUNG

Appeal 2020-005238
Application 10/828,497
Technology Center 3600

Befre MICHAEL W. KIM, Vice Chief Administrative Patent Judge,

HUBERT C. LORIN, and
MEREDITH C. PETRAVICK, Administrative Patent Judges.

KIM, Vice Chief Administrative Patent Judge.

DECISION ON APPEAL1
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant appeals from the
Examiner’s decision to reject claims 1, 4–6, 8–11, 13–15, 17, 20–22, 24–27,
and 29–32.2,3 We have jurisdiction under 35 U.S.C. § 6(b).

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. Appellant identifies the real party in interest as Deutsche
Börse AG. Appeal Br. 1.
2 Claims 33–38, 40–58, and 60–73 are withdrawn. Final Act. 1; Appeal Br.
2.
3 There have been two previous appeals in this application addressed by the
same panel. Ex parte Naas, Appeal 2017-004944 (PTAB Apr. 9, 2019); Ex
parte Naas, Appeal 2010-011473 (BPAI Jan. 23, 2012).
Appeal 2020-005238
Application 10/828,497

2
We AFFIRM.
CLAIMED SUBJECT MATTER
The invention relates generally to “controlling transfers of a group of
resources which are defined in association with a condition under which,
after the resource group transfer has been completed, a reverse transfer of
the same or a similar group of resources has to occur.” Spec. 1:8–11.
Such resource group transfers may take place in various
technical fields. For example, resources may be memory
resources in computer systems, and such memory resources
may be allocated groupwise for some reasons . . . . Another
field where the invention may be applied to, are financial
trading, clearing and settlement systems, and more particular
the trading, clearing and settlement of collateralised [sic]
money (credit) contracts in the repo ( repurchase agreement)
market.

Spec. 1:13–27. The claimed invention (see claim 17 infra) is limited
particularly to completing repo transactions in a repo market:
A Repurchase Agreement (repo) is the sale of securities
by one party (the seller of securities or cash taker) to another
(the buyer of securities or cash provider) with the added
conditions that those securities or those similar to it will be
resold at a given price at a specified future date.
Spec. 2:1–4.
Independent claim 17 is illustrative:
17. A computerized repo basket transaction method
executed by one or more computing devices, the method
comprising:
receiving, by at least one of the one or more computing
devices, repo quotes from user computing devices of market
participants over a network in an electronic trading system, the
repo quotes specifying repo basket transactions and including
Appeal 2020-005238
Application 10/828,497

3
the security basket definition containing security class
information indicating at least one class of securities, said
security basket definition not indicating specific securities;
defining a synthetic security, said security basket
definition not indicating specific securities representing the at
least one class of securities based on the security basket
definition, wherein a risk profile of the synthetic security is
treated as an average risk profile of the defined class of
security;
negotiating, by a clearing system, a repo transaction in
said electronic trading system based on the repo quotes;
receiving, by a computer settlement system, settlement
instructions in a clearing system for the synthetic security based
on said negotiating step;
in response to the settlement instructions, allocating, by a
centralized settlement system, and based on predefined
allocation rules received from a rules storage, at least one
specific security that meets the security basket definition; and
completing, by at least one of the one or more computing
devices, the repo transaction by posting said allocated specific
securities and cash accounts.

The Examiner rejected claims 1, 4–6, 8–11, 13–15, 17, 20–22, 24–27,
and 29–32 under 35 U.S.C. § 101 as directed to patent ineligible subject
matter.
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
Appeal 2020-005238
Application 10/828,497

4
abstract ideas” are not patentable. E.g., Alice Corp. Pty. Ltd. 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.
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, 67 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
(1981)); “tanning, dyeing, making 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,
Appeal 2020-005238
Application 10/828,497

5
450 U.S. at 187, and 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. 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.”), and 191 (citation
omitted) (citing Benson and Flook).
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. “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.
Appeal 2020-005238
Application 10/828,497

6
B. USPTO § 101 Guidance
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101.4 The Manual of
Patent Examining Procedure (“MPEP”) now incorporates this revised
guidance and subsequent updates at § 2106 (9th ed. Rev. 10.2019, rev. June
2020).5
Under MPEP § 2106, 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
(2) additional elements that integrate the judicial exception into
a practical application (“Step 2A, Prong Two”).6
MPEP § 2106.04(a), (d).

4 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50
(Jan. 7, 2019) (hereinafter “2019 Revised Guidance”). 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”). “All
USPTO personnel are, as a matter of internal agency management, expected
to follow the guidance.” 84 Fed. Reg. at 51; see also October 2019 Update 1.
5 All references to the MPEP are to the Ninth Edition, Revision 10.2019
(Last Revised June 2020), unless otherwise indicated.
6 “Examiners evaluate integration into a practical application 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.” MPEP
§ 2106.04(d)(II).
Appeal 2020-005238
Application 10/828,497

7
Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application,7 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 activity” in the
field; 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.8
MPEP § 2106.05(d).
ANALYSIS
“recites a judicial exception”
The Examiner identifies the following limitations of independent
claim 17 as reciting a series of steps for a security transaction:
generating . . . a security basket definition . . . defining a
security[]; receiving quotes from market participants . . .
specifying a . . . transaction including the security basket
definition; negotiating, by at least one of the one or more
computing devices, a . . . transaction based on the . . . quotes;
generating . . . settlement instructions . . . for the . . . security
based on said negotiating step; in response to the settlement
instructions, allocating . . . at least one specific security that
meets the security basket definition; and completing . . . the . . .

7 This corresponds to Alice part one where it is determined whether the claim
is “directed to” an abstract idea. See Alice, 573 U.S. at 219. If a claim is “not
directed to an abstract idea under part one of the Alice framework, we do not
need to proceed to step two.” Enfish, LLC v. Microsoft Corp., 822 F.3d
1327, 1339 (Fed. Cir. 2016).
8 This corresponds to Alice part two where it is determined whether the
claim “contains an ‘inventive concept’ sufficient to ‘transform’ the claimed
abstract idea into a patent-eligible application.” Alice, 573 U.S. at 221.
Appeal 2020-005238
Application 10/828,497

8
transaction by posting said allocated specific securities on sub-
ledger and securities and cash accounts.
Final Act. 3 (citing Ex parte Naas, Appeal No. 2017-004944, at 6–8 (PTAB
Apr. 9, 2019). The Examiner then asserts that these limitations “cover[ ]
performance . . . via human transactional activities/interactions” and
“organizing human business activity,” and thus that “these limitations are
directed to an abstract that falls within the enumerated group of ‘certain
methods of organizing human activity’ in the [2019 Revised Guidance]”
Final Act. 4; Ans. 6. The Appellant disagrees for several reasons. Appeal Br.
5–8.
The Appellant assert that the following reasoning by the Examiner is
circular and devoid of analysis:
That is, other than reciting one or more computer devices, an
electronic trading system, clearing system, one or more
settlement systems and a network nothing in the claim
precludes the limitations from practically being performed by
organizing human business activity.
Appeal Br. 6 (quoting Final Act. 4). The assertion is misplaced, because the
Examiner also explains that these steps are “via human transactional
activities/interactions” (indeed, it is unclear how a security transaction
cannot be so) and further incorporates the Board’s analysis from the prior
decision (Ans. 4 (citing Naas, at 6–13)), which the Appellant has not
addressed.
The Appellant asserts further that the Examiner has made no
allegation that the claims recite any of the sub-groupings for “certain
methods of organizing human activity” set forth in the 2019 Revised
Guidance. Appeal Br. 6–7. We disagree. The Examiner identifies explicitly
“human transactional activities/interactions,” which meets at least the sub-
Appeal 2020-005238
Application 10/828,497

9
groupings “commercial or legal interactions” and “interactions between
people” from the 2019 Revised Guidance. Further, by incorporation of the
Board’s analysis from the prior decision, the Examiner identifies also
fundamental economic practices. Ans. 4 (citing Naas, at 6–13).
The Appellant relatedly asserts that “the claims clearly are not
directed to commercial or legal interactions, managing personal behavior,
and relationships or interactions between people. The claims recite
communication between devices of a distributed computing system in a
networked architecture.” Appeal Br. 8. The assertion is misplaced because
the Examiner has addressed the computer architecture in other portions of
the subject matter eligibility inquiry. See Final Act. 4–5. The same goes for
“fundamental economic practices.”
The Appellant next asserts that there are no fundamental economic
principles, such as hedging, insurance, or mitigating risk that are recited in
the claim, and then paraphrase the claims in Bilski and Alice before
concluding that “the present application do[es] not involve hedging or
intermediated settlement.” Appeal Br. 7–8. The assertion is misplaced
because the Examiner did not assert that the claim recited either hedging or
intermediated settlement: the Examiner identified independent claim 17 as
reciting a security transaction.
The Appellant may be asserting that the rejection must fall because a
“security transaction” literally uses different words than “hedging,
insurance, or mitigating risk.” The assertion cannot stand because to do so
would exalt form over substance, especially here where “hedging, insurance,
or mitigating risk” are all types of security transactions. By its own terms,
the 2019 Revised Guidance indicates that fundamental economic practices
Appeal 2020-005238
Application 10/828,497

10
may include hedging, insurance, and mitigating risk. MPEP § 2106.04(a).
The use of the word “include” indicates that the list provided is not limiting.
The Appellant additionally asserts that the Examiner “makes no
showing of fact to support that the elements are well known or
fundamental,” and the claims recite elements that are “way beyond any other
fundamental practice.” Appeal Br. 7–8. The Appellant, however, does not
identify which recitations support their assertion. Absent such a showing, we
are unpersuaded that the Examiner has erred in identifying sufficiently the
limitations in independent claim 17 that recite a series of steps for a security
transaction, and that a “security transaction” meets the criteria for one of
“certain methods of organizing human activity” identified in the 2019
Revised Guidance as an abstract idea.
For these reasons, we are unpersuaded the Examiner erred in its
“recites a judicial exception” analysis.
“does not integrate that exception into a practical application”
The Examiner asserts the following:
Next, the claim is analyzed to determine if it is integrated
into a practical application. The claim recites additional
limitation of using one or more computer devices, an electronic
trading system, clearing system, one or more settlement
systems and a network to perform the steps. The processor in
the steps is recited at a high level of generality, i.e., as a generic
processor performing a generic computer function of processing
data. This generic processor limitation is no more than mere
instructions to apply the exception using generic computer
component. Also, these limitation are an attempt to limit the
abstract idea to a particular technological environment.
Accordingly, these additional elements do not integrate the
Appeal 2020-005238
Application 10/828,497

11
abstract idea into a practical application because they do not
impose any meaningful limits on practicing the abstract idea.
Final Act. 4. (citing Naas, at 8–10).
The Appellant asserts that the Specification explains that previous
security allocation techniques were cumbersome and difficult, and explains
further that novel differences in the claimed invention, involving “a system-
generated security basket definition and centralized allocation after
generation of settlement instructions” facilitated by a “synthetic security,”
constitute an improvement. Appeal Br. 10–16, 18–19 (citing Spec. 4, 6, 10,
14, and Figs. 4, 7); Reply Br. 2–5. The Appellant asserts further that “if the
claimed invention includes elements that provide an improvement, the claim
recites a practical application.” Appeal Br. 14. The Examiner responds as
follows:
Appellant’s claims as a whole, do not amount to
significantly more than the abstract idea itself. This is because
the claim does not effect an improvement to another technology
or technical field; the claim does not amount to an improvement
to the functioning of a computer itself; and the claim does not
move beyond a general link of the use of an abstract idea to a
particular technological environment.
Ans. 5. We agree with the Examiner. At best, the Appellant has identified a
novel abstract idea, i.e., an improvement to security transactions.
Improvements to security transactions, however, are not improvements to
another technology or technical field, such as computers, and remain an
abstract idea. Newly discovered or novel judicial exceptions are still
exceptions. Flook, 437 U.S. at 591–92 (“[T]he novelty of the mathematical
algorithm is not a determining factor at all.”); Ass’n for Molecular
Pathology v. Myriad Genetics, Inc., 569 U.S. 589, 591 (2013)
Appeal 2020-005238
Application 10/828,497

12
(“Groundbreaking, innovative, or even brilliant discovery does not by itself
satisfy the § 101 inquiry.”).
Relatedly, the Appellant asserts that “[t]he present system is directed
to overcoming inefficiencies associated with electronically trading repo
basket transactions on a trading exchange, which is a computer network
connecting market participants, such as potential buyers and sellers,” and
further asserts that it “encompasses rooted in computer technology in order
to overcome a problem specifically arising in the realm of computer
networks,” which was sufficient to confer subject matter eligibility in DDR
Holdings LLC. v. Hotels.com LP, 773 F.3d 1245, 1257 (Fed. Cir. 2014).
Appeal Br. 20; Reply Br. 1–2, 4–5. The Examiner responds as follows:
Appellant’s citation of DDR is non-persuasive because
the claims at issue in DDR are readily distinguishable over the
instant claims. In the case of DDR Holdings “E-Commerce
Outsourcing System/Generating a Composite Web Page”, the
claims were directed to automatically generating and
transmitting a web page in response to activation of a link using
data identified with a source web page having certain visually
perceptible elements.
In contrast, the instant claims provide a generically
computer-implemented solution to a business-related or
economic problem and are thus incomparable to the court cases
at issue above. The present case is different: the focus of the
claimed invention is not on how information is being displayed
on an interface, but on managing a portfolio of securities. Also,
limiting the use of an abstract idea “to a particular technological
environment” does not confer patent eligibility as this cannot be
considered an improvement to computer or technology and so
cannot be “significantly more.” Therefore, Amdocs and DDR
do not apply here.
Ans. 8. We are persuaded the Examiner is correct for the reasons stated.
Appeal 2020-005238
Application 10/828,497

13
Similarly, the Appellant asserts that the improvements to the abstract
idea result in “reduced computing resources, i.e.[,] the computer can
accomplish the data processing required for a repo transaction more quickly
and/or with less power.” Reply Br. 1–2. The assertion is misplaced because
that merely indicates that an improvement to security transactions results in
reduced use of computer resources of a generic computer, which is not an
improvement to the functioning of the computer itself. Put another way, the
Appellant does not assert that the improved abstract idea allows the
computer to perform functions unrelated to the improved abstract idea in a
more efficient manner.
For these reasons, we are unpersuaded the Examiner erred in its
“practical application” analysis.
“well-understood, routine, conventional”
The Examiner asserts the following:
Next, the claim is analyzed to determine if there are
additional claim limitations that individually, or as an ordered
combination, ensure that the claim amounts to significantly
more than the abstract ideas (whether claim provides inventive
concept). As discussed above, the recitation of the claimed
limitations amounts to mere instructions to implement the
abstract idea on a processor (using the processor as a tool to
implement the abstract idea). Taking the additional elements
individually and in combination, the processor at each step of
the process performs purely generic computer functions. As
such, there is no inventive concept sufficient to transform the
claimed subject matter into a patent-eligible application The
same analysis applies here, i.e., mere instructions to apply an
exception using a generic computer component cannot integrate
a judicial exception into a practical application at or provide an
inventive concept.
Appeal 2020-005238
Application 10/828,497

14
Viewing the limitations as an ordered combination does
not add anything further than looking at the limitations
individually. When viewed either individually, or as an ordered
combination, the additional limitations do not amount to a
claim as a whole that is significantly more than the abstract idea
itself. Therefore, the claim does not amount to significantly
more than the recited abstract idea. Therefore, the claim is not
patent eligible.
Final Act. 4–5.
In the instant case, the claims’ invocation of processors,
networks and databases does not transform the claimed subject
matter into patent-eligible applications. The claims at issue do
not require any nonconventional computer, network or database
components, or even a “non-conventional and non-generic
arrangement of known, conventional pieces,” but merely call
for performance of the claimed provision of security
transactions to users “on a set of generic computer
components.” Bascom, 2016 WL 3514158, at *6–7.
Nothing in the claims, understood in light of the
specification, requires anything other than off-the-shelf,
conventional computer, network, and database technology. The
Courts have repeatedly held that such invocations of computers
and networks that are not even arguably inventive are
“insufficient to pass the test of an inventive concept in the
application” of an abstract idea. buySAFE, 765 F.3d at 1353,
1355; see, e.g., Mortg. Grader, Inc. v. First Choice Loan Servs.
Inc., 811 F.3d 1314, 1324-25 (Fed. Cir. 2016); Intellectual
Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363,
1370 (Fed. Cir. 2015); Internet Patents, 790 F.3d at 1348-49;
Content Extraction, 776 F.3d at 1347-48.
Final Act. 9.
The Appellant asserts that the Examiner conflates the “integrated into
a practical application” analysis with the “something more” analysis. Appeal
Br. 16–17. The assertion is incorrect, as the “something more” analysis
Appeal 2020-005238
Application 10/828,497

15
incorporates all of the inquiries of the “integrated into a practical
application” analysis. See MPEP §§ 2106.04(d)(I), 2106.05(A).
The Appellant asserts further that, like the claims in Amdocs (Israel)
Limited v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir. 2016), the claims
on appeal include an “unconventional technological solution (e.g., the
claimed security basket definition and related processing) to a technological
problem (inefficient and inflexible automated processing),” in that arguably
generic components are used in an unconventional manner. Appeal Br. 17–
18; Reply Br. 3. The Examiner responded as follows:
The Examiner respectfully disagrees with Appellant’s
analogy of the following court cases. Appellant’[s] citation of
Amdocs is non-persuasive because the claims at issue in
Amdocs are readily distinguishable over the instant claims. In
Amdocs the courts construed “enhance” as being dependent
upon the invention’s distributed architecture. 761 F.3d at 1338–
40 (quoting ’065 patent at 7:51–57, 10:45–50, 7:7–8). “. . . We
construed ‘enhance’ as meaning ‘to apply a number of field
enhancements in a distributed fashion.’ The enhancing
limitation depends not only on the invention’s distributed
architecture, but also depends upon the network devices and
gatherers-even though these may be generic-working together
in a distributed manner. The patent explains that field
enhancements are defined by network service providers for
each field in which the network service provider wants to
collect data. ’065 patent at 12:43–47. ‘A field enhancement
specifies how the data obtained from the trigger of the
enhancement procedure is processed before it is placed in a
single field in the central database 175.’ Id. at 11:2–5.”
Ans. 7–8. We agree with the Examiner that independent claim 17 does not
identify such an arrangement. To be sure, independent claim 17 does recite
at least one or more computing devices, a network, an electronic trading
system, a clearing system, a computer settlement system, and a centralized
Appeal 2020-005238
Application 10/828,497

16
settlement system. All it recites, however, is that they are connected to each
other, without specifying a particular architecture, and it is unclear how such
an undefined architecture can be unconventional.
The Appellant then cites several PTAB decisions purportedly
weighing in on the issue of analyzing the claims as a whole in the context of
§ 101. Appeal Br. 18; Reply Br. 4–5. Although we certainly agree with that
proposition, the Appellant does not specify how any particular facts or
analysis in those decisions are relevant and should be applied here, and
relatedly does not identify how the Examiner has failed to analyze the claims
as a whole.
The Appellant next asserts the following: “conventional repo basket
transaction systems do not generate settlement instructions corresponding to
a synthetic security. Furthermore, conventional repo basket transaction
systems do not allocate securities which meet a security basket definition
after receiving settlement instructions.” Appeal Br. 18–19. For the latter
item, the assertion is misplaced because an analysis of whether a claim
limitation is “well-understood, routine, conventional” only applies to
elements additional to the abstract idea. Alice Corp., 573 U.S. at 217–18
(citing Mayo, 566 U.S. at 72–73) (the second part of the Mayo test is to
determine whether the claim recites additional elements that amount to
significantly more than the judicial exception). As set forth above, the
limitation of “in response to the settlement instructions, allocating” has been
identified by the Examiner as part of “security transaction.”
Appeal 2020-005238
Application 10/828,497

17
For the former item, we asserted the following in our previous
decision:
The only other non-computer limitations involve terms
such as “repo basket,” “security basket definition,” “synthetic
security,” and “repo quotes,” which we discern are merely
different types of security or security-related terms that do not
add meaningfully to the recited security transaction. See MPEP
§ [2106.05(e)]. Our conclusion is the same even when all these
limitations are considered as a whole, as a security transaction
involving specific securities is still a security transaction.
. . .
We discern that each of the above-recited non-computer
limitations are “well-understood, routine, conventional,” MPEP
§ 2106.05(d), which do not constitute an “inventive concept”
that is “significantly more” under Alice. For example, the
Specification defines “repo” as follows:
A Repurchase Agreement (repo) is the sale of
securities by one party (the seller of securities or
cash taker) to another (the buyer of securities or
cash provider) with the added conditions that those
securities or those similar to it will be resold at a
given price at a specified future date.
Spec. 2:1-4. This is no more than a form of recordkeeping,
which the courts have determined are “well-understood,
routine, conventional.” Alice, 573 U.S. at 225 (“to create and
maintain 'shadow' accounts amounts to electronic
recordkeeping----one of the most basic functions of a
computer”); Ultramercial, 772 F.3d at 716 (updating an activity
log is routine and conventional). The same is even more true for
“synthetic security,” which the Specification defines as follows:
“The synthetic security represents a defined security quality or
class of securities.” Spec. 11:7–8.
Naas, at 11. We are unpersuaded that analysis is in error.
The Appellant takes issue with the Examiner’s use of the phrase
“solve an unconventional technological solution.” Reply Br. 5. As an initial
Appeal 2020-005238
Application 10/828,497

18
matter, we agree the Examiner’s use of the phrase here is awkward. We
note, however, that the Appellant introduced the phrase “unconventional
technological solution” (Appeal Br. 17), and, in any case, it is irrelevant
because we agree with the Examiner there is no “unconventional
technological solution,” computer architecture or otherwise, claimed.
For these reasons, we are unpersuaded the Examiner erred in its
“inventive concept” analysis.
Other Independent and Dependent Claims
For dependent claim 8, the Appellant asserts the following:
Claim 8 recites that the “clearing computer system is
arranged for performing a trade margin calculation process
based on a risk calculation based on said security basket
definition.” This allows accurate settlement based on the
security basket definition without separate instructions for each
security and thus further integrates the invention into a practical
application.
Appeal Br. 20–21. We disagree. As noted in our prior decision, dependent
claim 8 merely adds recitations for performing calculations. Those
calculations, which are each recited at a high level of generality, are “well-
understood, routine, conventional.” OIP Techs., 788 F.3d at 1362–63
(determining an estimated outcome and setting a price is “well-understood,
routine, conventional”). Naas, at 13. Moreover, at best, they are
improvements to the abstract idea only. The Appellant makes the
corresponding assertions for dependent claim 9 (Appeal Br. 21), which are
unpersuasive for the same reasons.
For dependent claims 11 and 27, the Appellant asserts the following:
Claims 11 and 27 recite determining whether the security
basket amount exceeds a predefined threshold, and if so,
generating plural settlement instructions each causing said
Appeal 2020-005238
Application 10/828,497

19
settlement system to allocate amounts not exceeding said
threshold. This allows security basket amounts to be balanced
with the need for separate settlement instructions to improve
settlement efficiency and thus further integrates the invention
into a practical application.
Appeal Br. 21. As noted in our prior decision, the first phrase is mere data
gathering. Naas, at 13 (citing Mayo, 566 U.S. at 79 (determining the level of
a biomarker in blood is mere data gathering)). The second phrase is the
inevitable result of that data gathering, and thus not a meaningful limitation.
Id. And it also is, at best, an improvement to the abstract idea only.
For dependent claims 13–15 and 29–31, the Appellant asserts the
following:
Claims 13, 14, 15, 29, 30 and 31 recite the use of an
independent sub-ledger and earmarking for posting on the sub-
ledger. This provides detailed accounting for the settlement
based on synthetic securities and thus further integrates the
invention into a practical application.
Appeal Br. 21. As noted in our prior decision, these are various forms of
electronic recordkeeping, which is “well-understood, routine, conventional.”
Naas, at 13 (citing Alice, 573 U.S. at 225). This analysis also was applied to
dependent claims 29–31, which were substantively similar. Id.
No other claims were challenged with any specificity.

Appeal 2020-005238
Application 10/828,497

20
DECISION
The Examiner’s rejection under 35 U.S.C. § 101 is affirmed.
CONCLUSION
In summary:

Claims
Rejected
35 U.S.C. § Reference(s)/
Basis
Affirmed Reversed
1, 4–6, 8–11,
13–15, 17, 20–
22, 24–27, 29–
32
101 Eligibility 1, 4–6, 8–11,
13–15, 17, 20–
22, 24–27, 29–
32

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