Michael Sweeting

Patent Trials and Appeals Board

Feb 4, 2022

2021002371 (P.T.A.B. Feb. 4, 2022)

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. 13/453,548 04/23/2012 Michael Sweeting 03-6172-C2 4592 63710 7590 02/04/2022 CANTOR FITZGERALD, L.P. INNOVATION DIVISION 110 EAST 59TH STREET NEW YORK, NY 10022 EXAMINER KAZIMI, HANI M ART UNIT PAPER NUMBER 3691 NOTIFICATION DATE DELIVERY MODE 02/04/2022 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): Caitlyn.kelly@chareiter.com gabriella.zisa@chareiter.com patentdocketing@cantor.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte MICHAEL SWEETING ____________ Appeal 2021-002371 Application 13/453,548 Technology Center 3600 ____________ Before MICHAEL W. KIM, Vice Chief Administrative Patent Judge, KALYAN K. DESHPANDE, and ALYSSA A. FINAMORE, Administrative Patent Judges. DESHPANDE, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF CASE Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the Examiner’s decision to reject claims 1-20, which are all of the pending claims. We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. 1 We use the word “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42. Appellant identifies BGC Partners, Inc. as the real party in interest. Appeal Br. 2. Appeal 2021-002371 Application 13/453,548 2 CLAIMED SUBJECT MATTER Appellant’s invention “relates in general to futures contracts and, more particularly, to a system and method for providing a cumulative asset class futures contract in a financial market environment.” Spec. 1:2-5. Claims 1, 7, and 20 are independent. Claim 1, reproduced below, is illustrative of the subject matter on appeal: 1. An apparatus for facilitating electronic trading with end user interfaces of remote computing devices, the apparatus comprising: at least one processor of a computing device of an electronic trading platform; and a memory element electronically coupled to the at least one processor of the computing device of the electronic trading platform and having software stored thereon that when executed by the at least one processor of the computing device of the electronic trading platform directs the at least one processor of the computing device of the electronic trading platform to: receive, via a network interface of a communications network from end user interfaces of respective remote computing devices, data representing a request from an end user interface of a remote computing device of a buyer to buy a contract having associated terms and data representing a request from an end user interface of a remote computing device of a seller to sell a contract having associated terms, a buyer of the contract obligated by the contract to (i) buy one of a plurality of assets from a first asset class underlying the contract and (ii) buy one of a plurality of assets from a second asset class underlying the contract at an expiration of the contract, a seller of the contract obligated by the contract to (i) sell one of a plurality of assets from the first asset class underlying the contract and (ii) sell one of a plurality of Appeal 2021-002371 Application 13/453,548 3 assets from the second asset underlying the contract at the expiration of the contract, wherein the first asset class comprises fixed income bonds, and wherein the second asset class comprises swaps; based in part on the terms of the contract associated with the request to buy matching the terms of the contract associated with the request to sell, match the request to buy with the request to sell; communicate, by the least one processor of the computing device of the electronic trading platform, with a futures module, to determine whether to allow a transaction involving the request to buy; in response to the determination whether to whether to allow the transaction involving the request to buy, execute, by the at least one processor of the computing device of the electronic trading platform, an electronic transaction involving the request to buy; generate, by the at least one processor of the computing device of the electronic trading platform, to the end user interface of the remote computing device of the buyer, a confirmation of execution of the electronic transaction involving the request to buy; establish, by the at least one processor of the computing device of the exchange platform, a futures exchange communications link with a dissemination element of the exchange platform to provide financial data to the end user interface of the remote computing device of the buyer to allow to make future contract decisions; and disseminate, by the at least one processor of the computing device of the exchange platform, the financial data to facilitate future contract decisions, to the end user interface of the remote computing device of the buyer. Appeal Br. 12-13 (Claims App.). Appeal 2021-002371 Application 13/453,548 4 REJECTION Claims 1-20 stand rejected under 35 U.S.C. § 101 as being directed to non-statutory subject matter. Final Act. 4. OPINION An invention is patent eligible if it is a “new and useful process, machine, manufacture, or composition of matter, or [a] new and useful improvement thereof.” 35 U.S.C. § 101. However, the U.S. Supreme Court has long interpreted § 101 to “contain[] an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable.” Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014) (quoting Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)). In Alice, the Supreme Court reiterated the two-step framework previously set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66, 75-77 (2012) “for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Alice, 573 U.S. at 217. The first step in this analysis is to “determine whether the claims at issue are directed to one of those patent-ineligible concepts,” e.g., to an abstract idea. Id. Concepts determined to be abstract ideas include certain methods of organizing human activity, such as fundamental economic practices or commercial interactions (id. at 219-20; Bilski v. Kappos, 561 U.S. 593, 611 (2010); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014)); mathematical formulas (Parker v. Flook, 437 U.S. 584, 594-95 (1978)); and mental processes (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). If it is determined that the claims are directed to a patent- Appeal 2021-002371 Application 13/453,548 5 ineligible concept, the second step of the analysis requires consideration of the elements of the claims “individually and ‘as an ordered combination’” to determine whether there are additional elements that “‘transform the nature of the claim’ into a patent-eligible application.” Alice, 573 U.S. at 217 (quoting Mayo, 566 U.S. at 78, 79). “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. at 221 (alterations in original) (quoting Mayo, 566 U.S. at 77). In other words, the claims must contain an “inventive concept,” or some element or combination of elements “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [abstract idea] itself.” Id. at 217- 18 (quoting Mayo, 566 U.S. at 72-73). “[M]erely requir[ing] generic computer implementation[] fail[s] to transform that abstract idea into a patent-eligible invention.” Id. at 221. In January 2019, the U.S. Patent and Trademark Office (USPTO) published revised guidance on the application of § 101.2 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).3 2 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“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 at 1. 3 All references to the MPEP are to the Ninth Edition, Revision 10.2019 Appeal 2021-002371 Application 13/453,548 6 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”).4 MPEP § 2106.04(a), (d). Only if a claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application,5 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 (Last Revised June 2020), unless otherwise indicated. 4 “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). 5 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). Appeal 2021-002371 Application 13/453,548 7 (4) simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception.6 MPEP § 2106.05(d). The Examiner determines that the claims are “directed to an abstract idea of matching terms of tradeable contract and matching the request to sell and determining whether to allow a transaction and executing that transaction.” Final Act. 5. Specifically, the Examiner finds that “the claims recite a process that, under its broadest reasonable interpretation, covers performance of a certain method of organizing human activity but for the recitation of generic computer components.” Id. at 7. The Examiner further determines that the claims do not integrate the abstract idea into a practical application. See id. at 7-9. In particular, the Examiner finds that the claims do not include additional elements that “integrate the abstract idea into a practical application because it does not impose any meaningful limits on practicing the abstract idea.” Id. at 8. The Examiner further finds the claims do not include additional elements that, individually or in combination, amount to significantly more than the abstract idea. Id. at 9-12. For example, the Examiner finds that the claims do not “recite improvement to another technology or another technical field or the server[,] . . . the functioning of the computer system itself[, or] . . . the network facility or network centric technology.” Id. at 11. Instead, “the elements involved in the recited process undertake their roles in 6 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 2021-002371 Application 13/453,548 8 performance of their activities according to their generic functionalities which are well-understood, routine and conventional.” Id. Appellant, in general, argues the claims are not directed to an abstract idea and include additional elements, individually and in combination, that amount to significantly more than an abstract idea because the claims recite “specialized non-generic features performed by uniquely configured hardware.” Appeal Br. 7. Step 2A, Prong 1 We agree with the Examiner that the claims recite a judicial exception, i.e., an abstract idea. See Final Act. 5; Ans. 3. Specifically, the claims are directed to “matching terms of a tradeable contract and matching the request to buy with the request to sell and determining whether to allow a transaction and executing the transaction.” Final Act. 5. We agree with the Examiner that the claims recite a fundamental economic practice in the form of “a system for matching terms facilitating a sale or exchange of buy contracts with sell contracts.” Id. For example, independent claim 1, in part, recites to “communicate, by the least one processor of the computing device of the electronic trading platform, with a futures module, to determine whether to allow a transaction involving the request to buy.” Appeal Br. 12 (Claims App.). In reciting to “determine whether to allow a transaction involving the request to buy,” claim 1 recites a fundamental economic practice in the form of facilitating the sale of contracts. Thus, this limitation recites one of certain methods of organizing human activity. See Revised Guidance, 84 Fed. Reg. at 52 (listing fundamental economic practices as one of certain methods of organizing human activity identified as an abstract idea). Indeed, Appeal 2021-002371 Application 13/453,548 9 independent claim 1 generally recites a method of organizing human activity in that the claimed invention is a system and method for mitigating risks in future contracts, which is a fundamental economic practice. See Spec. 6:8- 13 (“[A] system and a method for offering one or more futures contracts in a financial market environment are provided that substantially eliminate or greatly reduce disadvantages and problems associated with conventional investment approaches and instruments.”). Although independent claim 1 recites “at least one processor of a computing device of an electronic trading platform,” these recited elements are nothing more than generic computer components. Accordingly, we agree with the Examiner that “the claims recite a process that, under its broadest reasonable interpretation, covers performance of a certain method of organizing a human activity but for the recitation of generic computer components.” Final Act. 7. Appellant argues that “because the type of electronic futures trading described in claims 1, 7, and 20 is different from prior art futures trading, as evidenced by the lack of any art-based rejections in the present application . . . the claims necessarily differ from the allegedly ‘fundamental economic practice’ of traditional futures trading.” Appeal Br. 8. We disagree. Appellants general argument that the prior art fails to disclose the claimed system is insufficient to distinguish the claims from the fundamental economic practice of futures trading. See Diamond v. Diehr, 450 U.S. 175, 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 matter of a claim falls within the § 101 categories of possibly patentable subject matter.”); Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016) (“[A] claim for a new abstract idea is still an abstract Appeal 2021-002371 Application 13/453,548 10 idea.”); Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1315 (Fed. Cir. 2016) (“While the claims may not have been anticipated or obvious . . . that does not suggest that the idea . . . is not abstract, much less that its implementation is not routine and conventional.”). Appellant further argues that the recited claims are similar to the claims found eligible under § 101 in U.S. Patent No. 7,908,193 and U.S. Patent No. 8,165,943. See Appeal Br. 8. However, we agree with the Examiner that “the allowed claims of the ’193 and ’943 patents do not set the standard for determining patent eligibility under 101, especially [since] both patents were issued [in] March 2011 and April, 2012 respectively, which is way before the Supreme Court’s decision in Alice.” Ans. 7. That is, our analysis must focus on the patent eligibility inquiry set forth in the Supreme Court’s decision in Alice, under the Revised Guidance issued by the Office. Accordingly, the claims recite a certain method of organizing human activity identified in the Revised Guidance and, thus, an abstract idea. Step 2A, Prong 2 Because the claims recite an abstract idea, we next look to whether the claims recite additional elements that integrate the abstract idea into a practical application. Revised Guidance, 84 Fed. Reg. at 54. Claim limitations that indicate integration into a practical application include additional elements that reflect an improvement in the functioning of a computer, reflect an improvement to other technology or technical field, implement a judicial exception with a particular machine or manufacture that is integral to the claim, or use the judicial exception beyond generally linking it to a particular technological environment so the claim is more than Appeal 2021-002371 Application 13/453,548 11 an effort to monopolize the exception. Id. at 55. When a claim recites a judicial exception and fails to integrate the judicial exception into a practical application, the claim is “directed to” the judicial exception. Id. at 51. We determine that the additional limitations recited in the claims on appeal do not integrate the recited judicial exception into a practical application. The additional elements are “using a processor of a computing device of an electronic trading platform, a memory element, a network interface of a communications network and end user interfaces of respective computing devices to perform the receiving, matching, determining to allow, execution of electronic transaction; generating and transmitting of a confirmation of execution of the electronic transaction involving the request to buy.” Final Act. 7. The components are recited at a high level of generality (i.e., as general means of transmitting, determining, and receiving information for the matching of future contracts), and the recited steps utilizing these components amount to no more than mere instructions to apply the exception using generic computer components. See Revised Guidance, 84 Fed. Reg. at 55; MPEP § 2106.05(f). We agree with the Examiner that the claims otherwise merely recite generic computer components that fail to integrate the recited abstract idea into a practical application. See Final Act. 7−8; Ans. 7−9. For example, claim 1 recites “at least one processor of the computing device of the electronic trading platform.” Appeal Br. 12 (Claims App.). This limitation is recited at a high level of generality, i.e., as generic components performing generic computer functions of computer processing, data storage, and communication. As the Examiner points out, the steps reciting Appeal 2021-002371 Application 13/453,548 12 these generic components amount “to no more than mere instructions to apply the exception using a generic computer component.” Final Act. 8. Appellant argues that the claims are not directed to an abstract idea because the claimed invention “integrates the abstract idea . . . into a practical application utilizing at least the electronic trading platform, computing device, futures module, and futures exchange communication link with a dissemination element, and the remote computing devices of the buyer and seller.” Appeal Br. 9. Appellant further argues that these elements “are concrete, practical elements that correspond to a practical application of the alleged judicial exception.” Id. We are unpersuaded by Appellant’s argument. We agree with the Examiner that “[g]enerating a notification or confirmation is nothing more than applying the exception on a generic computer for the purposes of transmission over a network.” Final Act. 8. Additionally, Examiner correctly finds that “receiving, transmitting are extra-solution steps that do not qualify as meaningfully improving technology.” Id. (citing MPEP §§ 2106.05(d) and (g)). Even in combination, the additional elements do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea. Accordingly, we agree with the Examiner that the claims are directed to an abstract idea. Step 2B Turning to Step 2B of the Revised Guidance, we agree with the Examiner that there are no specific limitations beyond the judicial exception, i.e., the abstract idea, that are not well-understood, routine, and conventional in the field. See Final Act. 9; Alice, 573 U.S. at 225. Specifically, “the Appeal 2021-002371 Application 13/453,548 13 additional element of using a processor to perform the receiving, matching, determining and execution steps amounts to no more than mere instructions to apply the exception using a generic computer component.” Final Act. 9. Additionally, the “computing device of an electronic trading platform,” “network interface,” “end user interface,” and “computing device” recited in claim 1 are mere recitations of generic computer structures performing generic computer functions that are well-understood, routine, and conventional, and thus do not amount to significantly more than the abstract idea. See, e.g., Spec. 16:16-25 (listing several examples of an exchange platform), 17:30-18:22 (listing various examples of a communications network), 18:23-32 (listing numerous types of end user interfaces). As the Examiner finds, the computing device is generally recited “as performing generic computer functions routinely used in computer applications such as determining and comparing data related to a buyer, a seller and using the data to determine a match in part based on the terms of the contract.” Final Act. 10. Those additional elements relate to no more than implementation of the abstract idea using generic computer components and do not provide an inventive concept to transform the abstract idea into a patent-eligible invention. See Alice, 573 U.S. at 223-24. As determined by the Examiner, “mere data gathering in conjunction with . . . [an] abstract idea such as a step of obtaining information about credit card transactions so that the information can be analyzed by an abstract mental process” is not a limitation that qualifies as significantly more than the abstract idea. Final Act. 11 (citing CyberSource v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011); see MPEP § 2106.05(g). Appeal 2021-002371 Application 13/453,548 14 However, Appellant argues that the “technological aspects of claim 1 recite significantly more than the alleged abstract idea, are integral parts to the claim, and do not preempt all uses of the allegedly abstract idea.” Appeal Br. 9. Appellant states that the “claims do not preempt all forms of trading, or even all forms of trading future contracts.” Id. We do not agree. As discussed above, the additional elements do not recite significantly more than the abstract idea and can preempt forms of future contracts trading because of the high level of generality. See Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (“The Supreme Court has made clear that the principle of preemption is the basis for the judicial exceptions to patentability. For this reason, questions on preemption are inherent in and resolved by the § 101 analysis.” (citation omitted)). Appellant argues that the Examiner did not comply with the USPTO’s Memorandum from the Deputy Commissioner for Patent Examination Policy issued on April 19, 2018 titled “Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.)” (the “Berkheimer Memo”). According to Appellant, the Berkheimer Memo “explicitly requires that the claim elements cannot be well[-]understood, routine, or conventional unless the examiner finds, and expressly supports a rejection in writing with . . . a citation to an express statement in the specification[,] . . . court decisions[,] . . . publication[, or] . . . a statement” from the examiner. Appeal Br. 10. Appellant argues that “the Examiner’s mention of Flook, Electric Power, Cybersource, and FairWarning appears to be an attempt to satisfy” the Berkheimer Memo, and “none of these cases describe ‘matching’ in the content of futures trading or any other context for that matter.” Id. Appeal 2021-002371 Application 13/453,548 15 We are not persuaded. We agree with the Examiner that “MPEP § 2106.05(d)(II) identifies ‘receiving, processing or transmitting data over a network,[’] ‘electronic recording keeping,’ and ‘storing and retrieving information in memory’ as having been recognized as being well- understood, routine and conventional functions.” Ans. 8. Furthermore, MPEP § 2106.05(d)(II) expressly identifies that “a claim to ‘collecting information, analyzing it, and displaying certain results of the collection and analysis,’ where the data analysis steps are recited at a high level of generality such that they could practically be performed in the human mind, Electric Power Group v. Alstom, S.A., 830 F.3d 1350, 1353-54, 119 USPQ2d 1739, 1742-42 (Fed. Cir. 2016)” recites a mental process. A mental process is an abstract idea, and an abstract idea cannot supply an inventive concept. See BSG Tech. LLC v. Buyseasons, Inc., 899 F.3d 1281, 1290 (Fed. Cir. 2018) (“It has been clear since Alice that 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.”); Berkheimer v. HP Inc., 890 F.3d 1369, 1374 (Fed. Cir. 2018) (Moore, J., concurring) (“[A]nd Berkheimer . . . leave[s] untouched the numerous cases from [the Federal Circuit] which have held claims ineligible because the only alleged ‘inventive concept’ is the abstract idea.”). Accordingly, considering the claim elements individually and as an ordered combination, we agree with the Examiner that there are no meaningful claim limitations that represent an inventive concept to transform the nature of the claims into a patent-eligible application of the abstract idea. Appeal 2021-002371 Application 13/453,548 16 For the foregoing reasons, we sustain the Examiner’s rejection of claims 1-20 under 35 U.S.C. § 101. CONCLUSION The Examiner’s rejection of claims 1-20 under 35 U.S.C. § 101 is affirmed. DECISION SUMMARY In summary: 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)(1)(iv). AFFIRMED Claims Rejected 35 U.S.C. § Basis Affirmed Reversed 1-20 101 Eligibility 1-20