Alderucci, Dean P. et al.

Patent Trials and Appeals Board

Jun 26, 2020

12358768 - (D) (P.T.A.B. Jun. 26, 2020)

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.
12/358,768 01/23/2009 Dean P. Alderucci 09-2302 3142
63710 7590 06/26/2020
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
POLLOCK, GREGORY A
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
06/26/2020 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):
lkorovich@cantor.com
patentdocketing@cantor.com
phowe@cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte DEAN P. ALDERUCCI, CHARLES PLOTT,
MARK MILLER, HOWARD W. LUTNICK,
ANDREW FISHKIND, BRIAN GAY, and KEVIN FOLEY
Appeal 2019-003804
Application 12/358,768
Technology Center 3600

Before DANIEL J. GALLIGAN, JESSICA C. KAISER, and
DAVID J. CUTITTA II, Administrative Patent Judges.
KAISER, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 14–24, 29–39, and 44. Claims 1, 3–13,
28, 40–43, and 45 have been cancelled. Claims 2 and 25–27 have been
withdrawn. 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(a). Appellant identifies the real party in interest as CFPH, LLC.
Appeal Br. 3.
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CLAIMED SUBJECT MATTER
Claims 14 and 44 are independent claims. Claim 14 is reproduced
below with bracketed lettering added for discussion purposes:
14. An apparatus comprising:
[a] a memory;
[b] a network interface;
[c] at least one processor to:
[d] determine that a set of remote devices are
configured to automatically accept at least some trades
involving a financial instrument;
[e] receive first electronic data comprising an
indication of an order from a remote device, in which the
order defines a side of a trade for a quantity of the financial
instrument;
[f] in response to receiving the indication of the
order and determining that the set of are configured for
automatic acceptance, filter the set of remote devices to
identify devices therein with an order response rate below
a threshold;
[g] transmit respective indications of respective
portions of the order to each device whose order response
rate is equal to or above the threshold;
[h] receive second electronic data comprising an
indication of an acceptance of a first respective portion
from a first remote device of the set of remote devices that
meets the order response rate threshold;
[i] in response to receiving the indication of the
acceptance, transmit third electronic data comprising an
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indication of a remainder of the order to the first remote
device; and
[j] facilitate an execution of at least one of a trade
for the first respective portion and a trade for the remainder
of the order.
REJECTIONS
The Examiner rejects claims 14 and 44 under 35 U.S.C. § 112, first
paragraph, as failing to comply with the written description requirement.
Final Act. 2–3.
The Examiner rejects claims 14–24, 29–39, and 442 under 35 U.S.C.
§ 101 as being directed to patent-ineligible subject matter. Id. at 3–9.
Our review in this appeal is limited only to the above rejections and
the issues raised by Appellant. Arguments not made by Appellant are
waived. See MPEP § 1205.02; 37 C.F.R. §§ 41.37(c)(1)(iv) and 41.39(a)(1).

OPINION
Written Description
The Examiner finds that the Specification does not provide adequate
written description support for
filter[ing] the set of remote devices to identify devices therein
with an order response rate below a threshold;

2 The Examiner includes claims 40–43 in the rejection under 35 U.S.C.
§ 101. Final Act. 3. Claims 40–43, however, have been cancelled. Appeal
Br. 20. Accordingly, we understand that the Examiner’s rejection does not
include claims 40–43.
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transmit[ting] respective indications of respective portions of the
order to each device whose order response rate is equal to or
above the threshold; [and]
receiv[ing] second electronic data comprising an indication of an
acceptance of a first respective portion from a first remote device
of the set of remote devices that meets the order response rate
threshold,
as recited in claim 14 and similarly recited in claim 44. Final Act. 2–3. In
particular, the Examiner states that the Specification discloses that “the
submitter [of a trade] may desire to filter participants [of a trade] not remote
devices” and that the “response rate is specific to the characteristics of the
participant and not to a device.” Ans. 8 (brackets and emphasis in original);
Final Act. 3. That is, the Examiner argues that the Specification discloses
filtering, transmitting, and receiving for participants, rather than for the
claimed “remote devices.”
Appellant notes that the Specification discloses that
[i]n some embodiments, a firm order submitter may desire to
filter the participants that receive queries regarding their firm
orders. . . . In one implementations, firm order submitters may
choose from one or more ranges of response rates (i.e., number
of queries accepted/ number of queries received), which may be
referred to as risk pools, with which participants must be
associated to receive a query (e.g.,, choose from among
participants with positive response rates of 1–50%, 51–70%, 71–
90%, and/or 91–100%),
and Appellant argues this provides written description support for the
contested limitations. Appeal Br. 8–9 (citing Spec. 40:34–41:19, 92:11–16)
(emphasis omitted).
We agree with the Appellant that the Examiner fails to show the
claims lack adequate written description support. The Examiner is correct
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that the Specification uses the term “participant” rather than “remote
devices” when discussing the filtering, transmitting, and receiving functions
recited in the claim. Ans. 8 (citing Spec. 40:34–41:19). The Specification,
however, also states a “participant may include an [order management
system (OMS)], a computer that interfaces with an OMS, and/or any other
type of computer or trading-related apparatus,” and further, that those
systems may be mobile, i.e., remote, devices. Spec. 21:23–33; see
Spec. 26:34–36. Thus, the Specification discloses “participants” broadly to
include “remote devices.” For the reasons discussed above, we determine
the Specification provides adequate written description support for
filter[ing] the set of remote devices to identify devices therein
with an order response rate below a threshold;
transmit[ting] respective indications of respective portions of the
order to each device whose order response rate is equal to or
above the threshold;
receiv[ing] second electronic data comprising an indication of an
acceptance of a first respective portion from a first remote device
of the set of remote devices that meets the order response rate
threshold,
as recited in claim 14 and similarly recited in claim 44. Accordingly, we do
not sustain the Examiner’s rejection of claims 14 and 44 for failing to
comply with the written description requirement.

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Patent Eligible Subject Matter
Principles of Law
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
However, the U.S. Supreme Court has long interpreted 35 U.S.C. § 101 to
include implicit exceptions: “[l]aws of nature, natural phenomena, and
abstract ideas” are not patentable. See, e.g., Alice Corp. Pty. Ltd. v. CLS
Bank Int’l, 573 U.S. 208, 216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Court’s two-step framework, described in Alice and Mayo.
Alice, 573 U.S. 217–18 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework,
we first determine what concept the claim recites. See id. at 219 (“On their
face, the claims before us are drawn to the concept of intermediated
settlement, i.e., the use of a third party to mitigate settlement risk.”); see also
Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4 in petitioners’
application explain the basic concept of hedging, or protecting against
risk.”).
If the claim recites an abstract idea, we turn to the second step of the
Alice and Mayo framework, in which “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 (internal quotation marks and 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,
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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.
The Office published revised guidance on the application of § 101.
2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50
(Jan. 7, 2019) (hereinafter “Guidance”). Recently, the USPTO published an
update to that guidance. October 2019 Patent Eligibility Guidance Update,
84 Fed. Reg. 55,942 (Oct. 18, 2019) (hereinafter “Guidance Update”).
Under the Guidance and the Guidance Update, in determining whether a
claim falls within an excluded category, we first look to whether the claim
recites:
(1) Step 2A — Prong One: 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); and
(2) Step 2A — Prong Two: additional elements that integrate
the judicial exception into a practical application (see MPEP3
§§ 2106.05(a)–(c), (e)–(h)).
See Guidance, 84 Fed. Reg. 54–55 (“Revised Step 2A”). Only if a claim
(1) recites a judicial exception and (2) does not integrate that exception into
a practical application, do we then look to whether the claim (Step 2B):
(3) adds a specific limitation beyond the judicial exception that
is not “well-understood, routine, conventional” in the field (see
MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.

3 All Manual of Patent Examining Procedure (“MPEP”) citations herein are
to MPEP, Rev. 08.2017, January 2018.
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See id. at 56 (“Step 2B: If the Claim Is Directed to a Judicial Exception,
Evaluate Whether the Claim Provides an Inventive Concept.”).
Analysis
We analyze the claims and the Examiner’s rejection in view of the
Guidance and the Guidance Update, and we adopt the nomenclature for the
steps used in the Guidance. Appellant’s arguments address features recited
in independent claim 14, namely, “a filtering tool.” Appeal Br. 11
(emphasis omitted). Although Appellant argues independent claim 44 is
“different from claim 14” (id. at 13), Appellant does not point out which
particular limitations recited in independent claim 44 are different and how
they are different. Further, Appellant does not provide any argument
specific to any of the dependent claims. Id. We, thus, select claim 14 as
representative of all claims. See 37 C.F.R. § 41.37(c)(1)(iv).

Step 1
As an initial matter, the claims must recite at least one of four
recognized statutory categories, namely, machine, process, article of
manufacture, or composition of matter. MPEP § 2106(I); see 35 U.S.C.
§ 101. Independent claim 14 recites an apparatus, and independent claim 44
recites a method. Thus, the pending claims recite recognized statutory
categories under § 101, i.e., machines and processes, and we turn to the two-
step Alice/Mayo analysis applied in accordance with the Guidance and the
Guidance Update.

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Step 2A, Prong One in the Guidance
Next, we determine whether claim 14, being directed to a statutory
class of invention, nonetheless recite a judicial exception. Guidance, 84 Fed.
Reg. 51.
The Examiner determines that claim 14 recites a judicial exception:
an abstract idea. Ans. 9. In particular, the Examiner states that the claim
recites “a business solution to a business problem” and is “a fundamental
economic practice[].” Ans. 9; Final Act. 11; see Final Act. 8. The Examiner
explains that “the filtering in the present set of claims is performed based on
the desires of a firm order submitter to use the response rate to limit
exposure of that [order] information” and “is done to meet [a] business
objective.” Ans. 10. According to the Guidance, commercial interactions or
fundamental economic practices are certain methods of organizing human
activity, one of the groupings of an abstract idea. Guidance, 84 Fed. Reg.
52.
Appellant argues that claim 14 is, instead, “directed to a filtering tool”
and “is necessarily rooted in computer technology because” the claim
addresses the “problem of protecting online users from third parties with
malicious intent[, which] specifically arises in the realm of computer
networks.” Appeal Br. 11 (citing Spec. 42:17–20) (emphasis omitted).
We find Appellant’s arguments unpersuasive because the Examiner’s
position is supported by the record. Rather than a filtering tool for a
computer network, the Specification overwhelmingly describes the invention
as “an order management system (OMS),” and in particular an “order
management system[s] used in securities trading,” e.g., “stocks, bonds,
futures, options, derivatives, etc.” Spec. 18:17–23; see generally Spec. The
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Specification states that “[i]t is recognized that one problem that may be
associated with using such orders in a market includes a potential that
information associated with the existence of otherwise secret orders may be
used to influence a market and/or to diminish an advantage attributable to
the originator of the information.” Id. at 19:34–20:7. For example, “a trader
may end a negotiation” and then “subsequently use the knowledge [from the
failed negotiation] in a transaction related to the security to increase or
decrease the price of the security by entering one or more other orders at
higher or lower prices and/or use the knowledge [from the failed
negotiation] to . . . otherwise adjust a trading strategy.” Id. at 20:8–20. That
is, the Specification describes a problem with traders entering negotiations in
bad faith in order to gain trading information. The Specification’s solution
to that problem is to “prevent information about the firm order from being
sent to participants that are unlikely to respond positively to the order” (id. at
41:12–14) by “filtering . . . participants based on the participants’ prior
actions,” e.g., grouping participants into “risk pools” that are “based on the
[historic] frequency of positive responses to [order] queries” (id. at 41:14–
19, 80:10–23). After filtering, orders are only offered to certain groups, i.e.,
risk pools. Id. at 41:14–19, 80:21–23. The Specification explains that
“[b]ecause sending a query to a participant reveals information about an
order, the submitter of the order may use the response rate to limit exposure
of that information to participants that are historically likely to respond
positively.” Id. at 80:23–26. That is, the Specification’s solution to the
problem (of participants that enter into trading negotiations only in order to
gain trading information) is to only offer transactions to participants who are
most likely to accept trade offers. Accordingly, the Specification supports
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the Examiner’s determination that the invention focuses on a business
solution to a business problem.
The claim reflects the business solution described by the
Specification. Saving the limitations reciting computer hardware for
analysis at a later step, i.e., “[a] a memory; [b] a network interface; [c] at
least one processor,” we turn to limitations [d]–[j], which describe a
commercial interaction. Limitation [d] describes identifying remote devices
that automatically accept offers for financial instruments. Identifying
trading participants that will accept a trade offer is an economic practice
common in many commercial transactions. Limitation [e] describes
receiving an order defining a trade for a financial instrument. An offer for
purchase is a fundamental economic practice used in any commercial
transaction. Limitations [f]–[g] describe the process of grouping participants
into risk pools and only offering trades to participants that usually accept the
trades, as discussed above. In particular, limitation [f] recites filtering
participants into risk pools based on a response rate, e.g., an offer acceptance
rate; limitation [g] recites transmitting offers only to participants with a
threshold acceptance rate; and limitation [h] recites acceptance of the offer.
Further, limitation [i] describes providing an additional offer for acceptance;
as above, an offer for purchase is a fundamental economic practice used in
any commercial transaction. Limitation [j] completes the trade; completing
a financial transaction is a fundamental economic practice present in any
commercial transaction. Accordingly, limitations [d]–[j] recite a
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commercial interaction that addresses a business problem, and certain
features in that commercial interaction are fundamental economic practices.
Although Appellant argues that the claim “protect[s] online users
from third parties with malicious intent [to snoop computer network traffic]”
and that the claim is “directed to a filtering tool” (Appeal Br. 11), both the
language of the claim and corresponding portions of the Specification
confirm that the claim recites a business solution to a business problem.
Indeed, a portion of the Specification Appellant relies on for written
description support for the filtering and ordering transmitting/receiving
limitations (Appeal Br. 8–9) states “filtering may prevent information about
the firm order from being sent to participants that are unlikely to respond
positively to the order” (Spec. 41:7–19). Accordingly, rather than some type
of computer network snooping protection system or filtering tool, the claim
recites the use of a filter to select which participants receive trading
information.
Accordingly, as the Examiner determines, the claim recites a
commercial interaction solving a business problem or fundamental economic
practice, which, as the Guidance explains, are categorized as certain methods
of organizing human activity. Guidance, 84 Fed. Reg. at 52.

Step 2A, Prong Two in the Guidance
Next, we determine whether claim 14 is directed to the abstract
concept itself or whether the claim is instead directed to some technological
implementation or application of, or improvement to, this concept, i.e.,
integrated into a practical application. See, e.g., Alice, 573 U.S. at 223
(discussing Diamond v. Diehr, 450 U.S. 175, 177 (1981)).
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The Examiner determines that “there is no improvement in the
computer or a technology” recited in claim 14. Ans. 10.
To the extent Appellant argues that the claim recites a technical
improvement to a filtering tool (see Appeal Br. 11), we disagree.
Appellant’s reliance on BASCOM Global Internet Services, Inc. v. AT&T
Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016) is misplaced. Appeal Br. 11.
Unlike BASCOM, in which “the patent describes how its particular
arrangement of elements is a technical improvement over prior art ways of
filtering such content,” there is no improvement to filtering recited by the
claim. BASCOM, 827 F.3d at 1350. As discussed above, the claim merely
uses a filter to filter out participants based on a threshold. The claim here
does not recite how filtering is accomplished or improved, and Appellant has
not provided any persuasive argument as to how a filtering tool is improved.
Nor has Appellant persuaded us that filtering out trading offer
transmissions over a computer network is an improvement to computing
technology. See Appeal Br. 11. While the Specification states that
“[f]iltering before transmitting queries may decrease an amount of traffic
(e.g., TCP/IP packets) transmitted which may be snooped to reveal trading
information,” the Specification further states, “however, a malicious user
may snoop such queries in an attempt to determine a filter setting.”
Spec. 42:17–20. As such, the Specification admits that the filtering may not
solve snooping problems. Moreover, the “advantage” that there are fewer
trade offer packets to snoop is not the result of some improved computing
technology. There are fewer trade offer packets because participants are
filtered out through the execution of the business solution; naturally, because
of the business solution, there are fewer trade offer packets, not because
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computing technology has been improved. Accordingly, we are not
persuaded there has been an improvement to computing technology.
None of the other indicia of integration in the Guidance are present in
the claim. Guidance, 84 Fed. Reg. at 55; see MPEP § 2106.05(a)–(c), (e).
For example, the claim does not recite a particular machine and, instead,
generically recites an “apparatus comprising: a memory; a network interface;
at least one processor” or a “method” performed by “at least one processor.”
Nor has Appellant presented any arguments regarding any of the other
indicia. See Appeal Br. 10–12; see generally Reply Br. Therefore, we
determine that the claim is not directed to a specific asserted technological
improvement or otherwise integrated into a practical application.
Consequently, we conclude the claim is “directed to” a judicial exception.
Guidance, 84 Fed. Reg. at 54.

Step 2B
Next, we determine whether claim 14 includes additional elements
that provide significantly more than the recited judicial exception, thereby
providing an inventive concept. Alice, 573 U.S. at 221 (quoting Mayo, 566
U.S. at 72–73).
The Examiner determines the “claim(s) does/do not include additional
elements that are sufficient to amount to significantly more than the judicial
exception because the additional elements when considered both
individually and as an ordered combination do not amount to significantly
more that the abstract idea(s).” Final Act. 9. The Examiner points out that
the claimed “additional limitations of a computer with a processor and a
tangible, non-transitory memory,” i.e., additional claim elements “[a] a
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memory; [b] a network interface; [c] at least one processor,” are “generic
computer components . . . claimed to perform their basic functions, which
amount to no more than implementing the abstract idea with a computerized
programmed system.” Id.
Appellant argues that the Examiner’s “Step 2B analysis . . . fails to
meet the [USPTO] guidelines” regarding Berkheimer v. HP Inc., 881 F.3d
1360 (Fed. Cir. 2018). Appeal Br. 12 (citing USPTO Memorandum,
Changes in Examination Procedure Pertaining to Subject Matter Eligibility,
Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.)
(Apr. 19, 2018), available at
https://www.uspto.gov/sites/default/files/documents/memo-berkheimer-
20180419.PDF).
We are not persuaded the Examiner erred in determining that the
additional elements recited in the claim are not sufficient to amount to
significantly more than the judicial exception. As Appellant points out, the
Examiner may support a determination that additional elements are well-
understood, routine, and conventional with a “citation to an express
statement in the specification . . . that demonstrates the well-understood,
routine, conventional nature of the additional element(s).” Appeal Br. 12
(citation omitted). The Examiner points out that the Specification “expressly
states the use of [a] general purpose computer when describing the
additional elements of the claims involving the computer.” Ans. 11 (citing
Spec. 12:5–15:24). Indeed, the Specification states that “[i]t will be readily
apparent to one of ordinary skill in the art that the various processes
described [by the Specification] may be implemented by, e.g., appropriately
programmed general purpose computers.” Spec. 12:6–9. The Specification
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goes on to describe memory and processors generically implementing
instructions in an expected manner. Id. at 12:12–16 (“Typically a processor
105 . . . will receive instructions (e.g., from a memory 107 or like device),
and execute those instructions, thereby performing one or more processes
defined by those instructions.”). Accordingly, the Examiner has fairly
supported the determination with a citation to the Specification.
We thus conclude that claim 14 does not provide an inventive concept
because any additional elements recited in the claim, considered individually
and as an ordered combination, do not provide significantly more than the
recited judicial exception. Accordingly, we are not persuaded that the claim
recites patent-eligible subject matter. Further, Appellant has not proffered
sufficient evidence or argument to persuade us that any of the limitations in
remaining claims 15–24, 29–39, and 44 provide a meaningful limitation that
transforms those claims into a patent-eligible application. See Appeal
Br. 11–13. Therefore, we sustain the rejection of claims 14–24, 29–39, and
44 under 35 U.S.C. § 101 as being directed to patent-ineligible subject
matter.

CONCLUSION
In summary:
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
14, 44 112 Written
Description
14, 44
14–24, 29–
39, 44
101 Eligibility 14–24, 29–
39, 44

Overall
Outcome
14–24, 29–
39, 44

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No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1)(iv).
AFFIRMED