NYSE American LLC

Patent Trials and Appeals Board

Feb 2, 2021

2020002964 (P.T.A.B. Feb. 2, 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.
16/040,940 07/20/2018 Clifford J. Weber MKT-14-1087CD4C-CON 6376
35811 7590 02/02/2021
IP GROUP OF DLA PIPER LLP (US)
ONE LIBERTY PLACE
1650 MARKET ST, SUITE 5000
PHILADELPHIA, PA 19103
EXAMINER
POLLOCK, GREGORY A
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
02/02/2021 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):
pto.phil@us.dlapiper.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CLIFFORD J. WEBER, CAROL ALEXANDER,
JASON MACQUEEN, CHARLES A. BAKER, GARY L. GASTINEAU,
and TERRY NORMAN
Appeal 2020-002964
Application 16/040,940
Technology Center 3600
Before JENNIFER S. BISK, LARRY J. HUME, and
JULIET MITCHELL DIRBA, Administrative Patent Judges.
HUME, Administrative Patent Judge.
DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision rejecting claims 1–22, which are all claims pending in
the application. We have jurisdiction under 35 U.S.C. § 6(b).
We REVERSE.

1 We use the term “Appellant” to refer to “applicant” as defined in 37 C.F.R.
§ 1.42. Appellant identifies the real party in interest as NYSE American
LLC. Appeal Br. 1.
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STATEMENT OF THE CASE2
The claims are directed to systems and methods for trading actively
managed funds. See Spec. (Title). In particular, Appellant’s disclosed
embodiments and claimed invention relate to systems and methods “to allow
public intra-day trading of financial instruments such as shares of actively
managed funds or exchange-traded notes on secondary markets without
knowledge of the specific assets underlying the traded instruments,” and the
invention “relates to systems and methods for checking how well a model
portfolio tracks an actively managed fund.” Spec. ¶ 2.
Exemplary Claim
Claim 1, reproduced below, is representative of the subject matter on
Appeal:
1. A computer-implemented method for improved
intra-day valuations of a first portfolio comprising:
receiving, by a computer system, a modeling output
associated with a first set of securities of a first portfolio, the
modeling output characterized by proprietary behavior data and
economic risk factor data associated with the first set of
securities, wherein the computer system has non-transitory
memory storing computer software and at least one processor
executing the computer software;
generating, by the computer system, a second portfolio
configured to track the first portfolio by:

2 Our decision relies upon Appellant’s Appeal Brief (“Appeal Br.,” filed
Sept. 24, 2019); Reply Brief (“Reply Br.,” filed Mar. 11, 2020); Examiner’s
Answer (“Ans.,” mailed Jan. 13, 2020); Final Office Action (“Final Act.,”
mailed May 14, 2019); and the original Specification (“Spec.,” filed
July 20, 2018).
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generating a set of weightings based on the received
modeling output; and
constructing, based on the set of weightings, a second set
of securities having a second set of identities, such that a
behavior of the second set of securities mimics a behavior of
the first set of securities;
receiving, from a quote sever[3] via one or more
networks, price feed information corresponding to the second
set of identities;
calculating, by the computer system, an intra-day value
for the first portfolio by applying the price feed information to
the second portfolio in accordance with the second set of
weightings; and
publicizing, by the computer system, the calculated intra-
day value for the first portfolio without disclosing a first set of
weightings corresponding to the first portfolio.
Related Cases
This application is related to abandoned U.S. Application Serial No.
14/822,355, Appeal No. 2018-008605, abandoned after affirmance of the
Examiner’s rejections; and is also related to copending U.S. Application
Serial No. 14/812,717, Appeal No. 2018-005741, in which we affirmed in
part the Examiner’s rejections of the claims by reversing the 35 U.S.C. § 101
subject matter eligibility rejection, written description rejection under 35
U.S.C. § 112, first paragraph, and obviousness rejection under 35 U.S.C.
§ 103(a), and by affirming the obviousness-type double patenting rejection
of claims 1–27.

3 There appears to be a typographical error in the spelling of the word
“server” in amended claim 1 on Appeal.
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REJECTIONS
R1. Claims 3, 4, 6, 14, 15, and 17 stand rejected under pre-AIA 35
U.S.C. § 112, first paragraph, as failing to comply with the written
description requirement. Final Act. 3–5.
R2. Claims 1–22 are rejected under 35 U.S.C. § 101 because the
claimed invention is directed to an abstract idea without significantly more.
Final Act. 5.
CLAIM GROUPING
Based on Appellant’s arguments (Appeal Br.4–13) and our discretion
under 37 C.F.R. § 41.37(c)(1)(iv), we decide the appeal of patent-ineligible
subject matter Rejection R2 of claims 1–22 on the basis of representative
claim 1. We address the appeal of written description Rejection R1 of
claims 3, 4, 6, 14, 15, and 17, infra.4
ISSUES AND ANALYSIS
In reaching this decision, we consider all evidence presented and all
arguments actually made by Appellant. To the extent Appellant has not
advanced separate, substantive arguments for particular claims, or other
issues, such arguments are waived. 37 C.F.R. § 41.37(c)(1)(iv).

4 “Notwithstanding any other provision of this paragraph, the failure of
appellant to separately argue claims which appellant has grouped together
shall constitute a waiver of any argument that the Board must consider the
patentability of any grouped claim separately.” 37 C.F.R. § 41.37(c)(1)(iv).
In addition, when Appellant does not separately argue the patentability of
dependent claims, the claims stand or fall with the claims from which they
depend. In re King, 801 F.2d 1324, 1325 (Fed. Cir. 1986).
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Based upon our review of the record, we find a preponderance of the
evidence supports particular arguments advanced by Appellant with respect
to written description Rejection R1 of claims 3, 4, 6, 14, 15, and 17 and
subject matter eligibility Rejection R2 of claims 1–22 for the specific
reasons discussed below.
We highlight and address specific findings and arguments regarding
claims 1, 3, 4, and 6 for emphasis as follows.
1. § 112, ¶ 1 Written Description Rejection R1–Claims 3, 4, 6, 14, 15, 17
Issue 1
Appellant argues (Appeal Br. 4–5; Reply Br. 1–2) the Examiner’s
rejection of claims 3, 4, 6, 14, 15, and 17 under pre-AIA 35 U.S.C. § 112,
first paragraph, as lacking written description support is in error. These
contentions present us with the following issue:
Did the Examiner err in finding claims 3, 4, 6, 14, 15, and 17 lack
written description support for the limitations indicated below for the
identified claim groupings?
(a) Claims 3 and 14: “wherein a weighting for a security
in the second portfolio overlaps by a set percentage of the
corresponding weighting for the security in the first portfolio.”
(b) Claims 4 and 15: “wherein the set percentage is
between 90 to 100%.”
(c) Claims 6 and 17: “wherein the set percentage is
randomly generated.”
Principles of Law
The test for compliance with the written description requirement is
“whether the disclosure of the application relied upon reasonably conveys to
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those skilled in the art that the inventor had possession of the claimed
subject matter as of the filing date.” Ariad Pharm., Inc. v. Eli Lilly & Co.,
598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc). “[T]he level of detail
required to satisfy the written description requirement varies depending on
the nature and scope of the claims and on the complexity and predictability
of the relevant technology.” Id.; cf. U.S. v. Telectronics, Inc., 857 F.2d 778,
785 (Fed. Cir. 1988) (“The test of enablement is whether one reasonably
skilled in the art could make or use the invention from the disclosures in the
patent coupled with information known in the art without undue
experimentation.”).
Further, the Specification “need not describe the claimed subject
matter in exactly the same terms as used in the claims.” Eiselstein v. Frank,
52 F.3d 1035, 1038 (Fed. Cir. 1995). “If . . . the specification contains a
description of the claimed invention, albeit not in ipsis verbis (in the
identical words), then the examiner . . . must provide reasons why one of
ordinary skill in the art would not consider the description sufficient.” In re
Alton, 76 F.3d 1168, 1175 (Fed. Cir. 1996).
Analysis
(a) Claims 3 and 14
Claim 3 recites, emphasis added, “[t]he method of claim 1, wherein a
weighting for a security in the second portfolio overlaps by a set percentage
of the corresponding weighting for the security in the first portfolio.” Claim
14 recites a commensurate limitation.
The Examiner finds “[t]he present application does not sufficiently
identify how this function [(“overlaps by a set percentage”)] is performed or
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result is achieved since the algorithm or steps/procedure for performing the
claim limit functions are not explained at all in the specification.” Final
Act. 3–4.5
In response, Appellant contends paragraph 121 of the Specification,
specifically Table 3, discloses this limitation, e.g., by comparing the
percentages of various holdings in a portfolio of actively managed exchange
traded funds (AMETF) with a proxy portfolio that includes some of the
same holdings, although at different percentages. Appeal Br. 4.
We are persuaded by Appellant’s argument that the identified
disclosure provides adequate support for claim 3 because the Examiner
appears to conflate the requirement for enablement with the requirement for
written description under 35 U.S.C. § 112, first paragraph.
We further note originally-filed claim 3, identical to claim 3 on
Appeal, recites the disputed limitation, thus providing a presumption of
adequate written description support. See In re Koller, 613 F.2d 819 (CCPA
1980) (original claims constitute their own description); accord In re
Gardner, 475 F.2d 1389 (CCPA 1973); accord In re Wertheim, 541 F.2d
257 (CCPA 1976). “[I]t is now well accepted that a satisfactory description
may be found in [the] originally-filed claims or any other portion of the
originally-filed specification.” MPEP § 2163(I). There is a strong
presumption that an adequate written description of the claimed invention is
present in the specification as filed. Wertheim, 541 F.2d at 262.

5 The Examiner erroneously states that claims 3, 14, 4, 15, 6, and 17 were
amended. See Final Act. 3–4. Instead, these claims are presented on Appeal
as originally filed.
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Consequently, rejection of an original claim for lack of written description
should be rare. MPEP § 2163.03.
(b) Claims 4 and 15
Claim 4 recites, “[t]he method of claim 3, wherein the set percentage
is between 90 to 100%.” Claim 15 recites a commensurate limitation.
Similar to the rejection of claim 3, the Examiner finds “[t]he present
application does not sufficiently identify how this function [(“the set
percentage is between 90 to 100%”)] is performed or result is achieved since
the algorithm or steps/procedure for performing the claim limit functions are
not explained at all in the specification.” Final Act. 4.
In response, Appellant contends paragraphs 65, 66, 85, and 121 of the
Specification disclose this limitation, along with the steps/algorithm for
performing the claim limit functions. Appeal Br. 4.
We are persuaded by Appellant’s argument that the identified
disclosure provides adequate support for claim 4 because the Examiner
again appears to conflate the requirements for enablement with the
requirement for written description under 35 U.S.C. § 112, first paragraph,
and also because originally-filed claims 4 and 15 are identical to claims 4
and 15 on Appeal. See MPEP § 2163(I).
(c) Claims 6 and 17
Claim 6 recites, “[t]he method of claim 3, wherein the set percentage
is randomly generated.” Claim 17 recites a commensurate limitation.
The Examiner again finds “[t]he present application does not
sufficiently identify how this function [(“the set percentage is randomly
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generated”)] is performed or result is achieved since the algorithm or
steps/procedure for performing the claim limit functions are not explained at
all in the specification.” Final Act. 4–5.
In response, Appellant contends paragraphs 65, 66, 85, and 121 of the
Specification disclose this limitation, and also the steps/algorithm for
performing the claim limit functions. Appeal Br. 4.
We are persuaded by Appellant’s argument that the identified
disclosure provides adequate support for claim 6 because the Examiner
again appears to conflate the requirements for enablement with the
requirement for written description under 35 U.S.C. § 112, first paragraph,
and also because originally-filed claims 6 and 17 are identical to claims 6
and 17 on Appeal. See MPEP § 2163(I).
Therefore, based upon the findings above, on this record, we are
persuaded of error in the Examiner’s written description Rejection R1 of
claims 3, 4, 6, 14, 15, and 17, such that we do not sustain the Examiner’s
written description rejection of these claims.
2. § 101 Rejection R1 of Claims 1–22
Issue 2
Appellant argues (Appeal Br. 5–13; Reply Br. 2–4) the Examiner’s
rejection of claim 1 under 35 U.S.C. § 101 as being directed to patent-
ineligible subject matter is in error. These contentions present us with the
following issue:
Under the USPTO’s Revised Guidance, informed by our governing
case law concerning 35 U.S.C. § 101, has Appellant persuasively argued that
claim 1 is patent eligible under § 101?
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Principles of Law
A. 35 U.S.C. § 101
An invention is patent-eligible if it is a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.6
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: “[l]aws of nature, natural phenomena, and abstract
ideas” are not patentable. Mayo Collaborative Servs. v. Prometheus Labs.,
Inc., 566 U.S. 66, 70 (2012) (brackets in original) (citing Diamond v. Diehr,
450 U.S. 175, 185 (1981)).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court’s two-step framework, described in Mayo
and Alice. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217–18 (2014)
(citing Mayo, 566 U.S. at 75–77). 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

6 This threshold analysis of whether a claim is directed to one of the four
statutory categories of invention, i.e., a process, machine, manufacture, or
composition of matter, is referred to as “Step 1” in the USPTO’s patent-
eligibility analysis under § 101. MPEP § 2106.
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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” (Diehr, 450 U.S. at 191); “tanning,
dyeing, making water-proof 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))).
Abstract ideas may include, but are not limited to, fundamental
economic practices, methods of organizing human activities, and
mathematical formulas or relationships. Alice, 573 U.S. at 217–21. Under
this guidance, we must therefore ensure at step one that we articulate what
the claims are directed to with enough specificity to ensure the step one
inquiry is meaningful. Id. at 217 (“[W]e tread carefully in construing this
exclusionary principle lest it swallow all of patent law.”).
Examples of claims that do not recite mental processes because they
cannot be practically performed in the human mind include: (a) a claim to a
method for calculating an absolute position of a GPS receiver and an
absolute time of reception of satellite signals, where the claimed GPS
receiver calculated pseudoranges that estimated the distance from the GPS
receiver to a plurality of satellites, SiRF Technology, Inc. v. International
Trade Commission, 601 F.3d 1319, 1331–33 (Fed. Cir. 2010); (b) a claim to
detecting suspicious activity by using network monitors and analyzing
network packets, SRI Int’l, Inc. v. Cisco Systems, Inc., 930 F.3d 1295, 1304
(Fed. Cir. 2019); (c) a claim to a specific data encryption method for
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computer communication involving a several-step manipulation of data,
Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1149 (Fed.
Cir. 2016) (distinguishing TQP Development, LLC v. Intuit Inc., 2014 WL
651935 (E.D. Tex. Feb. 19, 2014)) (the specific data encryption method
“could not conceivably be performed in the human mind or with pencil and
paper”). Whereas a claim limitation to a process that “can be performed in
the human mind, or by a human using a pen and paper” qualifies as a mental
process, a claim limitation that “could not, as a practical matter, be
performed entirely in a human’s mind” (even if aided with pen and paper)
would not qualify as a mental process.7
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held “a claim drawn to subject matter otherwise statutory
does not become nonstatutory simply because it uses a mathematical
formula.” Diehr, 450 U.S. at 187; see also id. at 191 (“We view
respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, and this principle cannot be circumvented by attempting
to limit the use of the formula to a particular technological environment.”
Id. (citation omitted) (citing Benson and Flook); see, e.g., id. at 187 (“It is
now commonplace that an application of a law of nature or mathematical

7 CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372, 1375–
76 (Fed. Cir. 2011) (distinguishing Research Corp. Techs. v. Microsoft
Corp., 627 F.3d 859 (Fed. Cir. 2010), and SiRF Tech., Inc. v. Int’l Trade
Comm’n, 601 F.3d 1319 (Fed. Cir. 2010)).
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formula to a known structure or process may well be deserving of patent
protection.”).
If the claim is “directed to” an abstract idea, we turn to the second
step of the Alice and Mayo framework, where “we must examine the
elements of the claim to determine whether it contains an ‘“inventive
concept”’ sufficient to ‘transform’ the claimed abstract idea into a patent-
eligible application.” Alice, 573 U.S. at 221 (citation omitted). “A claim
that recites an abstract idea must include ‘additional features’ to ensure ‘that
the [claim] is more than a drafting effort designed to monopolize the
[abstract idea].’” Id. (alterations in original) (quoting Mayo, 566 U.S. at 77).
“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
that abstract idea into a patent-eligible invention.” Id.
B. USPTO Revised Guidance
In January 2019, the U.S. Patent and Trademark Office (USPTO)
published revised guidance on the application of § 101.8 The Manual of
Patent Examining Procedure (“MPEP”) now incorporates this revised

8 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50
(Jan. 7, 2019) (hereinafter “Revised Guidance”) (https://www.govinfo.gov/
content/pkg/FR-2019-01-07/pdf/2018-28282.pdf). In response to formal
public comments, the Office issued further guidance on October 17, 2019,
clarifying the 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.
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guidance and subsequent updates at Section 2106 (9th ed. Rev. 10.2019, rev.
June 2020).9
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,” referred
to herein as “Step 2A(i)”); and
(2) additional elements that integrate the judicial
exception into a practical application (“Step 2A, Prong Two,”
referred to herein as “Step 2A(ii)”).10
MPEP § 2106.04(a)) and § 2106.04(d).
Under this guidance, if the claim does not recite a judicial exception
(a law of nature, natural phenomenon, or subject matter within the
enumerated groupings of abstract ideas above), then the claim is patent-
eligible at Step 2A(i). This determination concludes the eligibility analysis,
except in situations identified in the Revised Guidance.11

9 All references to the MPEP are to the Ninth Edition, Revision 10.2019
(Last Revised June 2020), unless otherwise indicated.
10 “Examiners evaluate integration into a practical application by:
(1) identifying whether there are any additional elements recited in the claim
beyond the judicial exception, and (2) evaluating those additional elements
individually and in combination to determine whether the [claim as a whole]
integrate[s] the exception into a practical application, using one or more of
the considerations introduced in subsection I supra, and discussed in more
detail in MPEP §§ 2106.04(d)(1), 2106.04(d)(2), 2106.05(a) through (c) and
2106.05(e) through (h).” MPEP § 2106.04(d)II.
11 In the rare circumstance in which an examiner believes a claim limitation
that does not fall within the enumerated groupings of abstract ideas should
nonetheless be treated as reciting an abstract idea, the procedure described in
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Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application,12 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”
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.13
MPEP § 2106.05(d).
In the Step 2B analysis, an additional element (or combination of
elements) is not well-understood, routine or conventional unless the
examiner finds an evidentiary basis, and expressly supports a rejection in
writing with, one or more of the following:
1. A citation to an express statement in the
specification or to a statement made by an applicant during
prosecution that demonstrates the well-understood, routine,
conventional nature of the additional element(s). . . .

the MPEP for analyzing the claim should be followed. See MPEP
§ 2106.04(a)(3)(“Tentative Abstract Ideas”).
12 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).
13 Items (3) and (4) correspond 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) and continue to be collectively referred to as “Step 2B” of the
Supreme Court’s two-step framework, described in Mayo and Alice.
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2. A citation to one or more of the court decisions
discussed in MPEP § 2106.05(d)(II) as noting the well-
understood, routine, conventional nature of the additional
element(s). . . .
3. A citation to a publication that demonstrates the
well-understood, routine, conventional nature of the additional
element(s). . . .
4. A statement that the examiner is taking official
notice of the well-understood, routine, conventional nature of
the additional element(s).
See MPEP §§ 2106.05(d)(I)(2); 2106.07(a).
If the Examiner or the Board determines under Step 2B that the
element (or combination of elements) amounts to significantly more than the
exception itself, the claim is eligible, thereby concluding the eligibility
analysis.
However, if a determination is made that the element and combination
of elements do not amount to significantly more than the exception itself, the
claim is ineligible under Step 2B, and the claim should be rejected for lack of
subject matter eligibility.
Analysis
Step 1 – Statutory Category
Claim 1, as a method (process) claim, recites one of the enumerated
categories of eligible subject matter in 35 U.S.C. § 101. Therefore, the issue
before us is whether it is directed to a judicial exception without
significantly more.
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Step 2A(i): Does the Claim Recite a Judicial Exception?
The Examiner determined that claim 1 is directed to the “abstract idea
of trading actively managed funds without significantly more” (Final
Act. 5), and further concludes:
The cited limitations as drafted are systems and methods
that, under their broadest reasonable interpretation, covers
performance of a method of organizing human activity, but for
the recitation of the generic computer components. Further,
none of the limitations recite technological implementations
details for any of the steps but, instead, only recite broad
functional language being performed by the generic use of at
least one processor. Trading actively managed funds is a
fundamental economic practice long prevalent in commerce
systems. If a claim limitation, under its broadest reasonable
interpretation, covers a fundamental economic principle or
practice but for the general linking to a technological
environment, then it falls within the organizing human activity
grouping of abstract ideas. Accordingly, the claim recites an
abstract idea.
Final Act. 8. Thus, the Examiner determines the claims are directed to
certain methods of organizing human activities in the form of fundamental
economic practices. Id.
We conclude claim 1 does not recite the judicial exceptions of either
natural phenomena or laws of nature. We evaluate whether claim 1 recites
an abstract idea based upon the Revised Guidance.
First, we look to the Specification to provide context as to what the
claimed invention is directed to. In this case, the Specification discloses that
Appellant’s disclosed embodiments and claimed invention relate to systems
and methods “to allow public intra-day trading of financial instruments such
as shares of actively managed funds or exchange-traded notes on secondary
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markets without knowledge of the specific assets underlying the traded
instruments,” and “relate[] to systems and methods for checking how well a
model portfolio tracks an actively managed fund.” Spec. ¶ 2.
Appellant’s Abstract describes the invention:
Embodiments include systems and methods for improved
intra-day valulations [sic] of a first portfolio. Embodiments
include receiving a listing of first identities for a first set of
securities of a first portfolio, generating, a second portfolio
configured to track the first portfolio, where the second
portfolio has second identities that are identical to the first
identities and a second set of weightings, calculating an intra-
day value for the first portfolio by applying price feed
information to the second portfolio in accordance with the
second set of weightings, and publicizing the calculated intra-
day value for the first portfolio without disclosing a first set of
weightings corresponding to the first portfolio.
Spec. 66 (Abstract).
In TABLE I below, we identify in italics the specific claim limitations
in claim 1 that we conclude recite an abstract idea. We additionally identify
in bold the additional (non-abstract) claim limitations that are generic
computer components and techniques, and underline limitations representing
extra or post-solution activity:
TABLE I
Independent Claim 1 Revised Guidance
A computer-implemented method
for improved intra-day valuations
of a first portfolio comprising:
A process (method) is a statutory
subject matter class. See 35 U.S.C.
§ 101 (“Whoever invents or discovers
any new and useful process, machine,
manufacture, or composition of
matter, or any new and useful
improvement thereof, may obtain a
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Independent Claim 1 Revised Guidance
patent therefor, subject to the
conditions and requirements of this
title.”).
[L1a] receiving, by [L1b] a
computer system, a modeling
output associated with a first set
of securities of a first portfolio,
the modeling output characterized
by proprietary behavior data and
economic risk factor data
associated with the first set of
securities,

wherein the computer system has
[L1c] non-transitory memory
[L1d] storing computer software
and
[L1e] at least one processor
executing the computer software;
Data gathering (“receiving . . .
modeling output”) is merely
insignificant extra-solution activity
that do not add significantly more to
the abstract idea to render the
claimed invention patent-eligible. See
In re Bilski, 545 F.3d 943, 962 (Fed.
Cir. 2008) (en banc), aff’d on other
grounds, 561 U.S. 593 (2010)
(“[T]he involvement of the machine
or transformation in the claimed
process must not merely be
insignificant extra-solution
activity.”); see also MPEP
§ 2106.05(g); and see buySAFE, Inc.
v. Google, Inc., 765 F.3d 1350, 1355
(Fed. Cir. 2014) (computer receives
and sends information over a
network).

As claimed, a non-transitory memory
and a processor are generic computer
components, and storing information
is insignificant extra-solution
activity. See MPEP § 2106.05(g).
[L2a] generating, by the
computer system, a second
portfolio configured to track the
first portfolio by:
[L2b] generating a set of
weightings based on the received
modeling output; and
Generating a second portfolio
configured to track the first portfolio
and generating a set of weightings
are abstract ideas, i.e., they utilize
either an observation, evaluation,
judgment, or opinion that could be
performed as mental processes. See
MPEP § 2106.04(a)(2)(III)(A).
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Independent Claim 1 Revised Guidance
[L2c] constructing, based on the
set of weightings, a second set of
securities having a second set of
identities, such that a behavior of
the second set of securities
mimics a behavior of the first set
of securities;
Constructing a second set of
securities to mimic the behavior of a
first set of securities based on the set
of weightings is an abstract idea, i.e.,
certain methods of organizing human
activity including a fundamental
economic practice. See MPEP
2106.04(a)(2)(II)(A); Revised
Guidance 52.
[L3] receiving, from a quote
[server] via one or more
networks, price feed information
corresponding to the second set
of identities;
Receiving information such as price
feed information, i.e., data gathering,
is merely insignificant extra-solution
activity that does not add
significantly more to the abstract idea
to render the claimed invention
patent-eligible. Revised Guidance 55,
n.31; see In re Bilski, 545 F.3d 943,
962 (Fed. Cir. 2008) (en banc), aff’d
on other grounds, 561 U.S. 593
(2010) (“[T]he involvement of the
machine or transformation in the
claimed process must not merely be
insignificant extra-solution
activity.”).
[L4] calculating, by the computer
system, an intra-day value for the
first portfolio by applying the
price feed information to the
second portfolio in accordance
with the second set of weightings;
and
A mathematical calculation, such as
calculating an intra-day value for the
first portfolio, is an abstract idea. See
MPEP § 2106.04(a)(2)(I)(C); see
also SAP America, Inc. v. InvestPic,
LLC, 898 F.3d 1161, 1163 (Fed. Cir.
2018) (holding that claims to a
“series of mathematical calculations
based on selected information” are
directed to abstract ideas).
[L5] publicizing, by the
computer system, the calculated
Communicating or publicizing
information, e.g., for display, is
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Independent Claim 1 Revised Guidance
intra-day value for the first
portfolio

[L6] without disclosing a first
set of weightings corresponding
to the first portfolio.
insignificant post-solution activity.
Revised Guidance 55, n.31; see also
MPEP § 2106.05(g); and see
buySAFE, Inc. v. Google, Inc., 765
F.3d 1350, 1355 (Fed. Cir. 2014)
(computer receives and sends
information over a network).
See Step 2A(ii) analysis, infra.
Appeal Br. 14 (Claims App).
Under the broadest reasonable interpretation standard,14 we conclude
limitations L1 through L5 recite steps that would ordinarily occur when
determining intra-day valuations of a portfolio. Further, we conclude that
limitations L2a (“generating . . . a second portfolio”), L2b (“generating a set
of weightings”), L2c (“constructing . . . a second set of securities”), and L4
(“calculating . . . an intra-day value for the first portfolio”) recite various
abstract ideas as identified in TABLE 1, whether initiated in the mind, on
paper, or using a computer.

14 During prosecution, claims must be given their broadest reasonable
interpretation when reading claim language in light of the specification as it
would be interpreted by one of ordinary skill in the art. In re Am. Acad. of
Sci. Tech. Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). Under this standard,
we interpret claim terms using “the broadest reasonable meaning of the
words in their ordinary usage as they would be understood by one of
ordinary skill in the art, taking into account whatever enlightenment by way
of definitions or otherwise that may be afforded by the written description
contained in the applicant’s specification.” In re Morris, 127 F.3d 1048,
1054 (Fed. Cir. 1997).
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We determine that claim 1, overall, recites a certain method of
organizing human activity in the form of a fundamental economic practice
that may also be performed by pen and paper. This type of activity, i.e.,
determining intra-day valuations of a first portfolio, as recited in claim 1, for
example, and aside from any computer-related aspects, includes
longstanding conduct that existed well before the advent of computers and
the Internet, and could be carried out by a human with pen and paper. See
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir.
2011) (“That purely mental processes can be unpatentable, even when
performed by a computer, was precisely the holding of the Supreme Court in
Gottschalk v. Benson.”).15
Thus, under Step 2A(i), we agree with the Examiner that claim 1’s
computer-implemented method for improved intra-day valuations of a first
portfolio is a judicial exception and, under our Revised Guidance, recites a
judicial exception, i.e., a certain method of organizing human activity in the
form of a fundamental economic practice, and thus recites an abstract idea.

15 Our reviewing court recognizes that “[a]n abstract idea can generally be
described at different levels of abstraction.” Apple, Inc. v. Ameranth, Inc.,
842 F.3d 1229, 1240 (Fed. Cir. 2016). That need not and, in this case does
not, “impact the patentability analysis.” Id. at 1241. Further, “[t]he Board’s
slight revision of its abstract idea analysis does not impact the patentability
analysis.” Id. Moreover, merely combining several abstract ideas does not
render the combination any less abstract. RecogniCorp, LLC v. Nintendo
Co., 855 F.3d 1322, 1327 (Fed. Cir. 2017) (“Adding one abstract idea (math)
to another abstract idea . . . does not render the claim non-abstract.”); see
also FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093–94 (Fed.
Cir. 2016) (determining the pending claims were directed to a combination
of abstract ideas).
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Step 2A(ii): Judicial Exception Integrated into a Practical Application?
If the claims are directed to a judicial exception, as we conclude
above, we proceed to the “practical application” Step 2A(ii) in which we
determine whether the recited judicial exception is integrated into a practical
application of that exception by: (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception(s); and
(b) evaluating those additional elements individually and in combination to
determine whether they integrate the exception into a practical application.
As to the specific limitations, we find limitations L1a (“receiving . . .
a modeling output associated with a first set of securities of a first portfolio”)
and L3 (“receiving . . . price feed information corresponding to the second
set of identities”) recite insignificant data gathering. See MPEP
§ 2106.05(g). Data gathering, as performed by the steps or function in
Appellant’s claims, is a classic example of insignificant extra-solution
activity. See, e.g., In re Bilski, 545 F.3d 943, 963 (Fed. Cir. 2008) (en banc),
aff’d sub nom, Bilski v. Kappos, 561 U.S. 593 (2010).
We also find limitations L1d (“storing computer software”) and L5
(“publicizing . . . the calculated intra-day value for the first portfolio”) recite
insignificant extra-solution activity. The Supreme Court guides that the
“prohibition against patenting abstract ideas ‘cannot be circumvented by’ . . .
adding ‘insignificant postsolution activity.’” Bilski, 561 U.S. at 610–11
(quoting Diehr, 450 U.S. at 191–92).
Limitations L1b (“a computer system”), L1c (“non-transitory
memory”), and L1e (“at least one processor”) recite generic computer
functions and components and, on this record, we are of the view that
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Appellant’s claims do not operate the recited generic computer components
in an unconventional manner to achieve an improvement in computer
functionality. See MPEP § 2106.05(a).
In addition to the abstract steps recited in limitations L2a, L2b, L2c,
and L4 identified in Step 2A(i), supra, and the extra and post-solution
activity recited by limitations L1a, L1d, L3, and L5, claim 1 further recites
limitation L6 (“without disclosing a first set of weightings corresponding to
the first portfolio”).
With respect to this “practical application” phase of the analysis,
Appellant argues:
[T]he claimed invention publishes this newly created second set
of securities, along with its simulated pricing information. In
this manner, the simulated pricing information that is published
can accurately reflect the value of the first portfolio (thereby
complying with regulatory requirements), without actually
having to disclose the proprietary constituents of the first
portfolio. Again, this is a significant advancement in this
technology because prior to Appellant's invention, this was not
possible. Accordingly, the simulation of the second portfolio
(i.e., the creation of weightings and application of those
weightings to a second set of identified securities) provides a
level of security with respect to the first (proprietary) portfolio
that did not previously exist. Yet again, this particular
combination of operations and functions demonstrates a useful
and practical application of several concepts, all to yield a
unique result.
Appeal Br. 7.
The Specification discloses an optimized hedging portfolio with
reference to Figure 6 of the Drawings, and the Specification describes:
“This optimized hedging portfolio 650 may be provided to liquidity
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providers and others who wish to use it to hedge their risks trading AMETF
shares. A benefit of this embodiment is the ability to calculate a hedging
portfolio that can accurately track an AMETF portfolio based on a proxy
portfolio, and without requiring any disclosure of the actual AMETF
portfolio.” Spec. ¶ 93 (emphasis added).
Therefore, in light of Appellant’s arguments above and the disclosure
of the Specification, we are persuaded that limitation L6 integrates the
abstract idea into a practical application as determined under at least one of
the MPEP sections cited above.16
We find Appellant’s argument persuasive because carrying out the
step in limitation L6 of “publicizing . . . without disclosing a first set of
weightings corresponding to the first portfolio” provide improvements to the
underlying technology or technical field, namely, portfolio valuation
systems. See MPEP § 2106.05(a) or, alternatively, § 2106.05(e) “Other
Meaningful Limitations.”
With respect to these other meaningful limitations, we find guidance
in MPEP § 2106.05(e), which summarizes and relies upon the Supreme
Court’s holding in Diehr, cited supra, and our reviewing court’s holdings in
Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057 (Fed. Cir.
2011) (decision on remand from the Supreme Court, which had vacated the
lower court’s prior holding of ineligibility in view of Bilski v. Kappos).

16 See, e.g., MPEP § 2106.05(a) “Improvements to the Functioning of a
Computer or To Any Other Technology or Technical Field,” and
§ 2106.05(e) “Other Meaningful Limitations.”
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Accordingly, we conclude, when the claim is considered as a whole,
the recited judicial exception is integrated into a practical application as
determined under either MPEP sections 2106.06(a) or 2106.05(e) cited
above, such that the claim is patent-eligible. Because the claims are directed
to a patent-eligible concept, this concludes the patent-eligibility inquiry.
Therefore, based upon the findings and legal conclusions above, on
this record and in consideration of the Revised Guidance, we are persuaded
the claims 1–22 are directed to patent-eligible subject matter, such that we
do not sustain the § 101 rejection of claim 1, and grouped claims 2–22 which
stand therewith. See Claim Grouping, supra.
CONCLUSIONS
(1) The Examiner erred with respect to written description
Rejection R1 of claims 3, 4, 6, 14, 15, and 17 under 35 U.S.C. § 112, first
paragraph, and we do not sustain the rejection.
(2) Under our Revised Guidance, governed by relevant case law,
Appellant has persuasively argued that the Examiner erred in rejecting
claims 1–22 as being patent ineligible under 35 U.S.C. § 101, and we do not
sustain the rejection.

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DECISION SUMMARY
Claims
Rejected
35 U.S.C.
§
Basis /
References Affirmed Reversed
3, 4, 6, 14,
15, 17 112, ¶ 1
Written
Description
3, 4, 6, 14,
15, 17
1–22 101 Eligibility 1–22
Overall
Outcome 1–22
REVERSED