Nasdaq, Inc.Download PDFPatent Trials and Appeals BoardDec 14, 20212021002609 (P.T.A.B. Dec. 14, 2021) 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. 15/170,081 06/01/2016 Greg FERRARI AC-4010-344 1080 23117 7590 12/14/2021 NIXON & VANDERHYE, PC 901 NORTH GLEBE ROAD, 11TH FLOOR ARLINGTON, VA 22203 EXAMINER LOTHERY, BERNADINE ART UNIT PAPER NUMBER 3693 NOTIFICATION DATE DELIVERY MODE 12/14/2021 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): PTOMAIL@nixonvan.com pair_nixon@firsttofile.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte GREG FERRARI ____________ Appeal 2021-002609 Application 15/170,081 Technology Center 3600 ____________ Before HUBERT C. LORIN, ANTON W. FETTING, and NINA L. MEDLOCK, Administrative Patent Judges. MEDLOCK, Administrative Patent Judge. DECISION ON APPEAL STATEMENT OF THE CASE Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s final rejection of claims 1-20. We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. 1 We use the term “Appellant” to refer to “applicant” as defined in 37 C.F.R. § 1.42. Our decision references Appellant’s Appeal Brief (“Appeal Br.,” filed September 30, 2020) and Reply Brief (“Reply Br.,” filed March 8, 2021), and the Examiner’s Answer (“Ans.,” mailed January 8, 2021) and Final Office Action (“Final Act.,” mailed April 1, 2020). Appellant identifies NASDAQ, Inc. as the real party in interest (Appeal Br. 3). Appeal 2021-002609 Application 15/170,081 2 CLAIMED INVENTION The Specification states, “[t]he technology herein relates to allocating electronic order data messages during a dynamic matching process based on the presence of prior pending electronic order data messages” (Spec. ¶ 2). Claims 1, 12, and 19 are the independent claims on appeal. Claim 1, reproduced below with bracketed notations added, is illustrative of the claimed subject matter: 1. An electronic exchange computer system comprising. a memory configured to store a first list and a second list that are both associated with a symbol identifier; a transceiver configured to receive electronic data order messages from other computing devices, the electronic data order messages including data messages that correspond, respectively, to each of the electronic order data messages of the first and second plurality; a processing system that includes at least one processor coupled to the memory and the transceiver, the processing system configured to: [(a)] receive, via the transceiver, a first electronic order data message that includes at least 1) a request to initiate an automated auction process for an auction order, 2) a first match value for the auction order, and 3) a first quantity value for the auction order, the auction order being contra to the first plurality of electronic data order messages and associated with an identifier of a participant who submitted the auction order; [(b)] based on reception of the first electronic order data message and determination of the request included therein, start the automated auction process for a predetermined period of time; Appeal 2021-002609 Application 15/170,081 3 [(c)] obtain an initial value for the symbol identifier that corresponds to the start of the automated auction process, wherein the stored second list has, at the start of the automated auction process, a second plurality of electronic data order messages that each have a match value, a match size, and a corresponding participant identifier; [(d)] generate and then transmit, using the transceiver, auction notification messages to at least some of the other computing devices; [(e)] during the predetermined period of time, receive, via the transceiver, at least first and second electronic auction response messages that each include a corresponding match value and size value and that are associated with a corresponding participant identifier; [(f)] in response to expiration of the predetermined period of time, end the auction process; [(g)] determine, from among the participant identifiers that correspond to each of the second plurality of electronic data order messages, at least a first participant identifier that is associated with one of the plurality second plurality of electronic data order messages that has a match value that is equal to the obtained initial value; [(h)] determine whether any of the first and second electronic auction response messages are associated with the determined first participant identifier; and [(i)] match the auction order to at least the first and second electronic auction response messages and, as a result of determination that the first participant identifier is associated with one of the plurality second plurality of electronic data order messages that has a match value that is equal to the obtained initial value, prioritize matching of at least one auction response message that is associated with the first participant identifier ahead of at least one other auction response message that is associated with a second participant identifier. REJECTIONS Claims 1-20 are rejected under 35 U.S.C. § 101 as directed to a judicial exception without significantly more. Appeal 2021-002609 Application 15/170,081 4 Claims 1-20 are rejected under 35 U.S.C. § 103 as unpatentable over Crutchfield et al. (US 2014/10188688 A1, published July 3, 2014) (“Crutchfield”), Lutnick et al. (US 6,963,856 B2, issued Nov. 8, 2005) (“Lutnick”), and Schmitt et al. (US 2015/0356679 A1, published Dec. 10, 2015) (“Schmitt”). ANALYSIS Patent-Ineligible Subject Matter Appellant argues the pending claims as a group (Appeal Br. 9-21). We select independent claim 1 as representative. The remaining claims stand or fall with claim 1. See 37 C.F.R. § 41.37(c)(1)(iv). Under 35 U.S.C. § 101, “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor.” 35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101 to include an implicit exception: “[l]aws of nature, natural phenomena, and abstract ideas” are not patentable. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014). The Supreme Court, in Alice, reiterated the two-step framework previously set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (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 Corp., 573 U.S. at 217. The first step in that analysis is to “determine whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. If the claims are not directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry ends. Otherwise, the inquiry proceeds to the second step where the elements Appeal 2021-002609 Application 15/170,081 5 of the claims are considered “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.” Id. (quoting Mayo, 566 U.S. at 79, 78). This is “a search for an ‘inventive concept’ - i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’” Id. at 217-18 (alteration in original). The U.S. Patent and Trademark Office (the “USPTO”) published revised guidance on January 7, 2019, for use by USPTO personnel in evaluating subject matter eligibility under 35 U.S.C. § 101. 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50 (Jan. 7, 2019) (the “2019 Revised Guidance”).2 That guidance revised the USPTO’s examination procedure with respect to the first step of the Mayo/Alice framework by (1) “[p]roviding groupings of subject matter that [are] considered an abstract idea”; and (2) clarifying that a claim is not “directed to” a judicial exception if the judicial exception is integrated into a practical application of that exception. Id. at 50. The first step, as set forth in the 2019 Revised Guidance (i.e., Step 2A), is, thus, a two-prong test. In Step 2A, Prong One, we look to whether the claim recites a judicial exception, e.g., one of the following 2 The USPTO issued an update on October 17, 2019 (the “October 2019 Update: Subject Matter Eligibility,” available at https://www.uspto.gov/sites/ default/files/documents/peg_oct_2019_update.pdf) clarifying the 2019 Revised Guidance in response to comments solicited from the public. The MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) incorporates the 2019 Revised Guidance and the subsequent update at Section 2106 (9th ed. Rev. 10.2019, rev. June 2020). Appeal 2021-002609 Application 15/170,081 6 three groupings of abstract ideas: (1) mathematical concepts; (2) certain methods of organizing human activity, e.g., fundamental economic principles or practices, commercial or legal interactions; and (3) mental processes. 2019 Revised Guidance, 84 Fed. Reg. at 54. If so, we next determine, in Step 2A, Prong Two, whether the claim as a whole integrates the recited judicial exception into a practical application, i.e., whether the additional elements recited in the claim beyond the judicial exception, 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. Id. at 54-55. Only if the claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application do we conclude that the claim is “directed to” the judicial exception, e.g., an abstract idea. Id. If the claim is determined to be directed to a judicial exception under revised Step 2A, we next evaluate the additional elements, individually and in combination, in Step 2B, to determine whether they provide an inventive concept, i.e., whether the additional elements or combination of elements amounts to significantly more than the judicial exception itself; only then, is the claim patent eligible. 2019 Revised Guidance, 84 Fed. Reg. at 56. Here, in rejecting the pending claims under 35 U.S.C. § 101, the Examiner determined that independent claims 1, 12, and 19 recite “trading options based on prioritization,” which the Examiner concluded falls within the “[c]ertain methods of organizing human activity” grouping of abstract ideas and is “more specifically[,] fundamental economic principles or practices” (Final Act. 5). The Examiner also determined that the recited abstract idea is not integrated into a practical application; that the Appeal 2021-002609 Application 15/170,081 7 independent claims do not include additional elements sufficient to amount to significantly more than the abstract idea itself; and that the dependent claims are patent ineligible for substantially the same reasons (id. at 5-9). Step One of the Mayo/Alice Framework (2019 Revised Guidance, Step 2A) We are not persuaded here that the Examiner erred in determining that claim 1 is directed to an abstract idea. The Federal Circuit has explained that “the ‘directed to’ inquiry applies a stage-one filter to claims, considered in light of the specification, based on whether ‘their character as a whole is directed to excluded subject matter.’” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). It asks whether the focus of the claims is on a specific improvement in relevant technology or on a process that itself qualifies as an “abstract idea” for which computers are invoked merely as a tool. See id. at 1335-36. Here, it is clear from the Specification (including the claim language) that claim 1 focuses on an abstract idea, and not on an improvement to technology and/or a technical field. The Specification is titled “SYSTEMS AND METHODS FOR ALLOCATION OF DYNAMICALLY RECEIVED DATA TRANSACTION REQUESTS BASED ON PRIOR PENDING DATA TRANSACTION REQUESTS,” and describes that most exchange platforms include rules on how trades between buyers and sellers are to be allocated under various conditions; for example, when a number of buyers all bid at the same price, the rules describe how the various buyers are allocated to the corresponding sellers (Spec. ¶ 7). In the case of option contracts, the rules Appeal 2021-002609 Application 15/170,081 8 may determine how option contracts from each buyer will be allocated to the sellers if there is an insufficient number of corresponding sell contracts (id.). The rules on how option contracts are allocated may also depend on the type of buyer involved; for example, public customers may get partial or full allocation priority over broker-dealers (id.). The Specification states that “[t]he technology herein relates to allocating electronic order data messages during a dynamic matching process based on the presence of prior pending electronic order data messages” (Spec. ¶ 2). The Specification, thus, discloses that, in an auction process, a participant, who was present on the NBBO (i.e., a participant who submitted an order equal to the value of the National Best Bid/Offer) before the auction was initiated, has priority over other participants who were not on the initial NBBO (see, e.g., id. ¶ 106). Thus, when the auction is closed, auction responses from a participant on the initial NBBO are prioritized in allocating the auction order (see, e.g., id. ¶¶ 54, 55). Consistent with this disclosure, claim 1 recites a system including, inter alia, a processing system configured to: (1) receive an electronic data transaction request that includes an auction order, i.e., receive, via the transceiver, a first electronic order data message that includes at least 1) a request to initiate an automated auction process for an auction order, 2) a first match value for the auction order, and 3) a first quantity value for the auction order, the auction order being contra to the first plurality of electronic data order messages and associated with an identifier of a participant who submitted the auction order (limitation (a)); (2) initiate the auction process, based on receipt of the auction order; receive auction response messages; and end the auction process after a predetermined period of time has expired, i.e., Appeal 2021-002609 Application 15/170,081 9 based on reception of the first electronic order data message and determination of the request included therein, start the automated auction process for a predetermined period of time; obtain an initial value for the symbol identifier that corresponds to the start of the automated auction process, wherein the stored second list has, at the start of the automated auction process, a second plurality of electronic data order messages that each have a match value, a match size, and a corresponding participant identifier; generate and then transmit, using the transceiver, auction notification messages to at least some of the other computing devices; during the predetermined period of time, receive, via the transceiver, at least first and second electronic auction response messages that each include a corresponding match value and size value and that are associated with a corresponding participant identifier; [and] in response to expiration of the predetermined period of time, end the auction process (limitations (b) through (f)); (3) determine whether a participant displayed an order at the NBBO before the start of the auction process, i.e., determine, from among the participant identifiers that correspond to each of the second plurality of electronic data order messages, at least a first participant identifier that is associated with one of the plurality second plurality of electronic data order messages that has a match value that is equal to the obtained initial value; [and] determine whether any of the first and second electronic auction response messages are associated with the determined first participant identifier (limitations (g) and (h)); and (4) if so, prioritize any auction response messages from that participant in allocating the auction order, i.e., match the auction order to at least the first and second electronic auction response messages and, as a result of determination that the first participant identifier is associated Appeal 2021-002609 Application 15/170,081 10 with one of the plurality second plurality of electronic data order messages that has a match value that is equal to the obtained initial value, prioritize matching of at least one auction response message that is associated with the first participant identifier ahead of at least one other auction response message that is associated with a second participant identifier (limitation (i)). We agree with the Examiner that these limitations, when given their broadest reasonable interpretation, recite “trading options based on prioritization,” i.e., a fundamental economic principle or practice, which is a method of organizing human activity, and, therefore, an abstract idea. See 2019 Revised Guidance, 84 Fed. Reg. at 52. Appellant cites the Board’s decision in Ex Parte Smith, Appeal No. 2018-000064, 2019 WL 764497 (PTAB Jan. 31, 2019) as “instructive for how the PEG [i.e., the Office’s Patent Eligibility Guidance] should be applied - particularly when the subject matter in question relates to automated exchanges” (Appeal Br. 10; see also id. at 13-16). And Appellant charges that the Examiner’s Prong One determination is over- inclusive (and, therefore, ostensibly inconsistent with Ex parte Smith) because “many of the elements that the Examiner identified” as reciting an abstract idea are “not those that would ordinarily take place with trading options based on prioritization” (id. at 13; see also Reply Br. 1-3).3 Appellant asserts that limitations (c), (g), (h), and (i) of claim 1,4 recite operations (i.e., determining whether a participant who submitted orders in the auction process had other orders, at the start of the auction, 3 Appellant maintains that, in accordance, with Ex parte Smith, the determination of “what recited claim elements fall under the asserted judicial exception for Prong 1 is made with respect to those ‘that would ordinarily take place’ in connection with the judicial exception” (Appeal Br. 13). 4 Appellant identifies these elements as (g), (k), (l), and (m). Appeal 2021-002609 Application 15/170,081 11 equal to a determined initial value, and using that result to determine how responsive messages are allocated when the auction is closed) that do not ordinarily take place in an option trading environment, and that these limitations, therefore, cannot be considered part of the asserted abstract idea (Appeal Br. 14). Yet, even if we agree that the operations recited in limitations (c), (g), (h), and (i) are not processing that ordinarily takes place in an option trading environment, that does not automatically disqualify these elements as an abstract idea. Instead, it merely suggests that these features may be novel, i.e., that claim 1 recites a new abstract idea. And a new abstract idea is still an abstract idea. See, e.g., 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 idea.”). Ex parte Smith does not require a different result. Quoting the language of claim 1 there at issue, the majority opined, in Smith, that the cited limitations, under a broadest reasonable interpretation, “recite the fundamental economic practice of derivative trading because the limitations all recite the operations that would ordinarily take place in a derivatives trading environment.” Ex parte Smith, 2019 WL 764497 at *4. The panel, thus, concluded that the claim “recites a judicial exception of a fundamental economic practice,” id., and, therefore, an abstract idea, notwithstanding the panel’s finding that “claim 1 also recites additional limitations which focus on addressing problems arising in the context of a hybrid derivatives trading system.” Id. at *5. In other words, the panel did not treat the presence of “additional limitations,” i.e., operations that ostensibly do not ordinarily take place in a derivatives trading environment, as determinative of whether claim 1 there at issue recites an abstract idea. Nor, for that matter, did the Appeal 2021-002609 Application 15/170,081 12 panel otherwise hold that the recited abstract idea may only include, and is, thus, limited to, operations that ordinarily take place in a derivative trading environment. We also are not persuaded of Examiner error by Appellant’s argument that claim 1 includes additional elements that integrate any recited abstract idea into a “practical application” (Appeal Br. 16-19). The Revised Guidance references MPEP, Ninth Edition (rev. Jan 2018) (available at https://www.uspto.gov/web/offices/pac/ mpep/old/mpep_E9R08-2017.htm) § 2106.05(a)-(c) and (e) in non-exhaustively listing considerations indicative that an additional element or combination of elements may have integrated a recited judicial exception into a practical application. 2019 Revised Guidance, 84 Fed. Reg. at 55. In particular, the Guidance describes that an additional element may have integrated the judicial exception into a practical application if, inter alia, the additional element reflects an improvement in the functioning of a computer or an improvement to other technology or technical field. Id. At the same time, the Guidance makes clear that merely including instructions to implement an abstract idea on a computer, or merely using a computer as a tool to perform an abstract idea; adding insignificant extra-solution activity to the judicial exception; or only generally linking the use of the judicial exception to a particular technological environment or field are not sufficient to integrate the judicial exception into a practical application. Id. Appellant argues here that even if claim 1 recites a judicial exception, “the remaining elements,” specifically elements (c), (g), (h), and (i), “integrate that alleged judicial exception into a practical application because they provide for a technical improvement over prior options trading Appeal 2021-002609 Application 15/170,081 13 systems” (Appeal Br. 16). Appellant asserts that claim 1 sets forth a new technique in which an automated exchange operates (e.g., through programming it differently than before) to improve competition within the automated exchange and prevent participants from “trying to ‘game’ the Exchange by providing for stronger presence on the NBBO (e.g., the obtained initial value)” (id.). But, even assuming that elements (c), (g), (h), and (i) are “additional elements,” as opposed to part of the abstract idea itself, we are not persuaded that improving competition within the automated exchange or preventing participants from “trying to ‘game’ the Exchange” is a technological improvement, as opposed to an improvement in the abstract idea of “trading options based on prioritization,” which is not enough for patent eligibility. See SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1170 (Fed. Cir. 2018) (“[P]atent law does not protect such claims[, i.e., claims to an asserted advance in the realm of abstract ideas], without more, no matter how groundbreaking the advance.”). This is particularly so, where, as here, we find no indication in the Specification that the operations recited in claim 1 require any specialized computer hardware or other inventive computer components, invoke any allegedly inventive programming, or that the claimed invention is implemented using other than generic computer components as tools operating in their ordinary capacity. Appellant maintains that the claimed technique would be recognized as an improvement in exchange computing technology because it results in improved competition and better operation of the exchange “due to how orders are handled in connection with determination of a submitting participant having other messages at the initially obtained value for the mini- time window” (Appeal Br. 17). Yet, the relevant question under Step 2A, Appeal 2021-002609 Application 15/170,081 14 Prong 2 is not whether the claimed invention itself, i.e., giving priority, in allocating an auction order, to auction participants, who submitted an order equal to the value of the NBBO before the auction was initiated, is a practical application; instead, the question is whether the claim includes additional elements beyond the judicial exception that integrate the judicial exception into a practical application. The Examiner determined here, and we agree, that only additional elements in claim 1 beyond the abstract idea are “a memory”; “a transceiver”; and “a processing system that includes at least one processor,” i.e., generic computer components (Final Act. 5-6; see also Spec. ¶¶ 26, 32, 34). “And after Alice, there can remain no doubt: recitation of generic computer limitations does not make an otherwise ineligible claim patent-eligible.” DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014). Appellant attempts to draw an analogy here between claim 1 and the claims that the Board upheld as patent eligible in Ex parte Smith (Appeal Br. 17-19). But, we can find no parallel between claim 1 and the claims at issue in Ex parte Smith. In Ex parte Smith, the panel found that representative claim 1 “recites additional limitations which focus on addressing problems arising in the context of a hybrid derivatives trading system in which trades are made both electronically and on a trading floor (i.e., ‘in the pits’).” Ex Parte Smith, 2019 WL 764497 at *5. More particularly, the panel explained that the claim includes additional elements that “limit the conventional practice of automatically executing matching market orders by reciting a specific timing mechanism in which the execution of a matching order is delayed for a specific period of time.” Id. at *5. And the panel determined that “the use Appeal 2021-002609 Application 15/170,081 15 of the claimed timing mechanisms and the associated temporary restraints on execution of trades provide a specific technological improvement over prior derivatives trading systems.” Id. The majority observed that use of the recited “timer” does not occur with every trade but instead is implemented in specific circumstances in a specific trading environment (i.e., when a matching market order is received from an in-crowd market participant in a hybrid trading system), Smith, 2019 WL 764497 at *5, and further observed, “[a]s the Specification explains, the problem of inequitable access to information arises only in the context of hybrid trading platforms where trades occur both ‘in the pits’ and electronically.” Id. (citing paragraph 55 of Smith’s specification)). The majority, thus, concluded that Smith’s claim 1, like the claims in DDR Holdings, overcomes a problem specifically arising in the realm of computer networks. Id. Appellant argues here that “just like the delay functionality that the PTAB highlighted in Smith as being a practical application, the claims in this case provide a practical application because they provide for ‘Improvements to the functioning of a computer, or to any other technology or technical field,’” i.e., the “technology or technical field” of “automated exchanges” (Appeal Br. 17). But, for much the same reasons as outlined above, we are not persuaded that claim 1 at issue here provides an improvement analogous to that presented in Smith, as opposed to an improvement in the abstract idea of “trading options based on prioritization,” which is not enough for patent eligibility. We conclude, for the reasons outlined above, that claim 1 recites a method of organizing human activity, i.e., an abstract idea, and that the Appeal 2021-002609 Application 15/170,081 16 additional elements recited in the claim beyond the abstract idea are no more than generic computer components used as tools to perform the recited abstract idea. As such, they do not integrate the abstract idea into a practical application. See Alice Corp., 573 U.S. at 223-24 (“[W]holly generic computer implementation is not generally the sort of ‘additional featur[e]’ that provides any ‘practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.’” (quoting Mayo, 566 U.S. at 77)). Accordingly, we agree with the Examiner that claim 1 is directed to an abstract idea. Step Two of the Mayo/Alice Framework (2019 Revised Guidance, Step 2B) Having determined under step one of the Mayo/Alice framework that claim 1 is directed to an abstract idea, we next consider under Step 2B of the 2019 Revised Guidance, the second step of the Mayo/Alice framework, whether claim 1 includes additional elements or a combination of elements that provides an “inventive concept,” i.e., whether an additional element or combination of elements adds specific limitations beyond the judicial exception that are not “well-understood, routine, conventional activity” in the field (which is indicative that an inventive concept is present) or simply appends well-understood, routine, conventional activities previously known to the industry to the judicial exception. 2019 Revised Guidance, 84 Fed. Reg. at 56. Appellant asserts that the rejection of claim 1 cannot be sustained because the Examiner “offers no evidence that the way in which the response messages are prioritized is well-understood, routine, conventional in the field of automated exchange technology,” i.e., that elements (c), (g), Appeal 2021-002609 Application 15/170,081 17 (h), and (i), as recited in claim 1 are well-understood, routine, and/or conventional (Appeal Br. 20). Yet, that argument is not persuasive at least because these limitations are part of the abstract idea itself; they are not additional elements to be considered in determining whether claim 1 includes additional elements or a combination of elements sufficient to amount to significantly more than the judicial exception. It could not be clearer from Alice, that under step two of the Mayo/Alice framework, the elements of each claim are considered both individually and “as an ordered combination” to determine whether the additional elements, i.e., the elements other than the abstract idea itself, “transform the nature of the claim” into a patent-eligible application. Alice Corp., 573 U.S. at 217 (citation omitted); see Mayo, 566 U.S. at 72-73 (requiring that “a process that focuses upon the use of a natural law also contain other elements or a combination of elements, sometimes referred to as an ‘inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself” (emphasis added) (citation omitted)). In other words, the inventive concept under step two of the Mayo/Alice test cannot be the abstract idea itself: It is clear from Mayo that the “inventive concept” cannot be the abstract idea itself, and Berkheimer . . . leave[s] untouched the numerous cases from this court which have held claims ineligible because the only alleged “inventive concept” is the abstract idea. Berkheimer v. HP Inc., 890 F.3d 1369, 1374 (Fed. Cir. 2018) (Moore, J., concurring); see also 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 Appeal 2021-002609 Application 15/170,081 18 the inventive concept that renders the invention ‘significantly more’ than that ineligible concept.”). Here, the Examiner determined and we agree, that the only additional elements recited in claim 1 beyond the abstract idea are “a memory”; “a transceiver”; and “a processing system that includes at least one processor,” i.e., generic computer components (Final Act. 5-6) - a determination amply supported by and fully consistent with the Specification (see, e.g., Spec. ¶¶ 26, 32, 34). Appellant cannot reasonably maintain that there is insufficient factual support for the Examiner’s determination that the operation of these components is well-understood, routine, or conventional, where, as here, there is nothing in the Specification to indicate that the operations recited in claim 1 require any specialized hardware or inventive computer components or that the claimed invention is implemented using other than generic computer components to perform generic computer functions, e.g., receiving, processing, and transmitting information. Indeed, the Federal Circuit, in accordance with Alice, has “repeatedly recognized the absence of a genuine dispute as to eligibility” where claims have been defended as involving an inventive concept based “merely on the idea of using existing computers or the Internet to carry out conventional processes, with no alteration of computer functionality.” Berkheimer, 890 F.3d at 1373 (Moore, J., concurring) (internal citations omitted); see also BSG Tech LLC, 899 F.3d at 1291 (“BSG Tech does not argue that other, non-abstract features of the claimed inventions, alone or in combination, are not well- understood, routine and conventional database structures and activities. Accordingly, the district court did not err in determining that the asserted claims lack an inventive concept.”). Appeal 2021-002609 Application 15/170,081 19 We are not persuaded, on the present record, that the Examiner erred in rejecting independent claim 1 under 35 U.S.C. § 101. Therefore, we sustain the Examiner’s rejection of claim 1, and claims 2-20, which fall with claim 1. Obviousness We are persuaded by Appellant’s argument that the Examiner erred in rejecting independent claims 1 and 12 under 35 U.S.C. § 103 at least because Schmitt, on which the Examiner relies, does not disclose or suggest prioritizing auction response messages from a participant, who displayed an order at the NBBO before the start of the auction process, over the response messages of other participants who were not on the initial NBBO, i.e., match[ing] the auction order to at least the first and second electronic auction response messages and, as a result of determination that the first participant identifier is associated with one of the plurality [sic] second plurality of electronic data order messages that has a match value that is equal to the obtained initial value, prioritize matching of at least one auction response message that is associated with the first participant identifier ahead of at least one other auction response message that is associated with a second participant identifier[,] limitation (i), as recited in claim 1, and similarly recited in claim 12 (Appeal Br. 24-25). The Examiner cites paragraphs 130, 131, 202, 206, and Figure 4C of Schmitt as disclosing the argued limitation (Final Act. 13). Schmitt clearly discloses there that buy/sell matching may be prioritized (see, e.g., Schmitt ¶ 206). But, we agree with Appellant that there is nothing in the cited portions of Schmitt that discloses or suggests “the particularly claimed subject matter manner of how response messages are prioritized for matching” (Appeal Br. 25). Appeal 2021-002609 Application 15/170,081 20 Responding to Appellant’s argument, the Examiner notes in the Answer that “Schmitt discloses that matching can include any desired priorities including preferences” (Ans. 15). The Examiner concludes, “[t]herefore this can include matching an auction order to auction response messages by prioritizing those auction response messages” (id.). Yet, as Appellant points out, “matching at ‘any desired priorities’ does not disclose prioritizing in the specifically claimed manner,” i.e., “[a] genus (prioritizing matching) does not render obvious all species (the claimed prioritization technique)” (Reply Br. 4). We are persuaded that the Examiner erred in rejecting independent claims 1 and 12 under 35 U.S.C. § 103. Therefore, we do not sustain the Examiner’s rejection of claims 1 and 12. For the same reasons, we also do not sustain the Examiner’s rejection of dependent claims 2-11 and 13-20. Cf. In re Fritch, 972 F.2d 1260, 1266 (Fed. Cir. 1992) (“dependent claims are nonobvious if the independent claims from which they depend are nonobvious”). CONCLUSION In summary: Claim(s) Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 1-20 101 Eligibility 1-20 1-20 103 Crutchfield, Lutnick, Schmitt 1-20 Overall Outcome 1-20 Appeal 2021-002609 Application 15/170,081 21 No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R. § 1.136(a)(1)(iv). AFFIRMED Copy with citationCopy as parenthetical citation