Borkovec, Milan et al.Download PDFPatent Trials and Appeals BoardDec 24, 20202019003530 (P.T.A.B. Dec. 24, 2020) 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. 11/976,433 10/24/2007 Milan Borkovec 107945.000041 9745 145584 7590 12/24/2020 Prince Lobel Tye LLP One International Place Suite 3700 Boston, MA 02110 EXAMINER SHAIKH, MOHAMMAD Z ART UNIT PAPER NUMBER 3694 NOTIFICATION DATE DELIVERY MODE 12/24/2020 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): docketing@princelobel.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte MILAN BORKOVEC, IAN DOMOWITZ, and HANS G. HEIDLE ____________ Appeal 2019-003530 Application 11/976,433 Technology Center 3600 ____________ Before BIBHU R. MOHANTY, BRUCE T. WIEDER, and TARA L. HUTCHINGS, Administrative Patent Judges. MOHANTY, 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 1, 3–8, 10–16, 18–22, and 26–29. We have jurisdiction under 35 U.S.C. § 6(b). SUMMARY OF THE DECISION 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 ITG SOFTWARE SOLUTIONS, INC. (Appeal Br. 2). Appeal 2019-003530 Application 11/976,433 2 CLAIMED SUBJECT MATTER The Appellant’s claimed invention relates to systems and methods for post trade estimation of transaction costs taking into account realized market conditions (Spec., para. 2). Claim 1, reproduced below with the italics added, is representative of the subject matter on appeal. 1. A computer implemented method for estimating transaction costs, comprising: receiving, over an electronic data network, a selected electronic trade strategy; calculating, for a plurality of proposed electronic trade orders associated with a trading entity, estimated pre-trade transaction costs for each of the proposed trade orders based on the selected electronic trade strategy and on historical market data; receiving, over the electronic data network, electronic execution data related to an execution of the plurality proposed trade orders; calculating estimated post-trade transaction costs for each said executed trade based upon corresponding cost of said estimated pre- trade transaction costs, said execution data, market returns, and trade imbalances relating to said proposed trade orders; aggregating estimated post-trade transaction costs to generate an aggregated estimated post-trade transaction cost for said trading entity, and displaying, on a graphical user interface, the aggregated estimated post-trade transaction cost. THE REJECTION The following rejection is before us for review: Claims 1, 3–8, 10–16, 18–22, and 26–292 are rejected under 35 U.S.C. § 101 as being directed to non-statutory subject matter. 2 The Final Office Action at page 2 states that the rejection of claims 8 and 10–13 is withdrawn. However, the PTOL-326 and Final Office Action at pages 8 and 17–26, and Answer at page 8, list those claims as rejected. The Appeal Brief at page 1 also lists those claims as rejected and provides Appeal 2019-003530 Application 11/976,433 3 FINDINGS OF FACT We have determined that the findings of fact in the Analysis section below are supported at least by a preponderance of the evidence3. ANALYSIS Rejection under 35 U.S.C. § 101 The Appellant argues that the rejection of claim 1 is improper because the claim is not directed to an abstract idea (Appeal Br. 12–23). The Appellant argues further that the claim is “significantly more” than the alleged abstract idea (Appeal Br. 23–28; Reply Br. 2, 3). The Appellant also argues that the Examiner failed to properly consider the 1.132 Declaration (Appeal Br. 19, 20; Supp. Br. 4–7).4 arguments for them at page 9. Accordingly, the statement of the withdrawal of the rejection of claims 8 and 10–13 at page 2 of the Final Office Action is considered a typographical error, as the remainder of the record by both the Examiner and Appellant shows the rejection of those claims still pending. 3 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988) (explaining the general evidentiary standard for proceedings before the Patent Office). 4 The Appellant filed a first paper titled “Reply Brief” on Nov. 19, 2018 (Reply Br.). The Appellant filed a second paper titled “Reply Brief” (considered a Supplemental Brief) on Nov. 28, 2018, which included a request to reopen prosecution due to the Examiner allegedly citing new evidence for the first time in the Answer mailed Sept. 28, 2018. However, this request to reopen prosecution was not timely filed. 37 CFR 41.40(a) indicates a petition must be filed within two months from the examiner’s answer and before the filing of any Reply Brief. A previous Reply Brief was filed earlier on Nov. 19, 2018, making the request to reopen prosecution after the filing of that Reply Brief, and therefore the request to reopen prosecution is untimely and request cannot be considered as it was not properly timely filed. The other arguments in the Supplemental Brief filed Nov. 28, 2018, at pages 4–7 not related to that request have been fully Appeal 2019-003530 Application 11/976,433 4 In contrast, the Examiner has determined that the rejection of record is proper (Final Act. 8–17; Ans. 3–35). The Examiner states also that the Declaration was fully considered (Ans. 11). We agree with the Examiner. 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 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. E.g., Alice Corp. 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 Supreme Court’s two-step framework, described in Mayo and Alice. Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework, we first determine what concept the claim is “directed to.” See Alice, 573 U.S. at 219 (“On their face, the claims before us are drawn to the concept of intermediated settlement, i.e., the use of a third party to mitigate settlement risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4 in petitioners’ application explain the basic concept of hedging, or protecting against risk . . . .”). Concepts determined to be abstract ideas, and thus patent ineligible, include certain methods of organizing human activity, such as fundamental economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611); mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and mental processes (Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts considered. Regardless, our review of the rejection here determines that the rejected claims are properly rejected under 35 U.S.C. § 101 on the merits. Appeal 2019-003530 Application 11/976,433 5 determined to be patent eligible include physical and chemical processes, such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 192 (1981)); “tanning, dyeing, making waterproof cloth, vulcanizing India rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S. 252, 267–68 (1854))); and manufacturing flour (Benson, 409 U.S. at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))). In Diehr, the claim at issue recited a mathematical formula, but the Supreme Court held that “[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 formula to a known structure or process may well be deserving of patent protection.”). In January 2019, the USPTO published revised guidance on the application of § 101. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”). Under the Guidance, 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 Appeal 2019-003530 Application 11/976,433 6 organizing human activity such as a fundamental economic practice, or mental processes); and (2) additional elements that integrate the judicial exception into a practical application, i.e., evaluate whether the claim “appl[ies], rel[ies] on, or use[s] 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.” (see Guidance, 84 Fed. Reg. at 54; see also MPEP § 2106.05(a)–(c), (e)–(h)). 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: (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. See Guidance. 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. “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. The Specification at paragraph 2 states that the invention relates to systems and methods for post trade estimation of transaction costs taking Appeal 2019-003530 Application 11/976,433 7 into account realized market conditions. Here, the Examiner has determined that the claim sets forth calculating the total cost of a trading order and sets forth an abstract concept (Final Act. 10). We substantially agree with the Examiner. We determine that the claim sets forth the subject matter in italics above which describes the concept of: [1] “receiving . . . a selected electronic trade strategy”; [2] “calculating . . . estimated pre-trade transaction costs for each of the proposed trade orders”; [3] “receiving . . . electronic execution data related to an execution of the plurality proposed trade orders”; [4] “calculating estimated post-trade transaction costs for each said executed trade”; [5] “aggregating estimated post-trade transaction costs to generate an aggregated estimated post-trade transaction cost for said trading entity”; and [6] “displaying . . . the aggregated estimated post-trade transaction cost” which is a method of determining trading transaction costs which is a mathematical concept and certain method of organizing human activities in being a fundamental economic practice, i.e. a judicial exception. A method, like the claimed method, is “a process that employs mathematical algorithms to manipulate existing information to generate additional information [and] is not patent eligible.” See Digitech Image Techs, LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014). In Chicago Board of Options Exchange v. International Securities Exchange, 640 Fed.Appx. 986 (Mem) (Fed. Cir. 2016), the Federal Circuit affirmed the determination in three cases (CBM2013-00049, CBM2013-00050, CBM2013-00051) involving trading technologies that were held to not meet the requirements of 35 U.S.C. § 101. We next determine whether the claim recites additional elements to integrate the judicial exception into a practical application. See Guidance, Appeal 2019-003530 Application 11/976,433 8 84 Fed. Reg. at 54–55. The Guidance references the MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) §§ 2106.05(a)–(c) and (e)–(h). Here, the claims do not improve computer functionality, improve another field of technology, utilize a particular machine, or effect a particular physical transformation. Rather, we determine that nothing in the claims imposes a meaningful limit on the judicial exception, such that the claims are more than a drafting effort to monopolize the judicial exception. For example, in the claim, the additional elements beyond the abstract idea are the recited “electronic data network” and “graphical user interface.” The claimed limitations of “receiving,” “calculating,” “aggregating,” and “displaying” in the claim “do not purport to improve the functioning of the computer itself,” do not improve the technology of the technical field, and do not require a “particular machine.” Rather, they are performed using generic computer components. Further, the claim as a whole fails to effect any particular transformation of an article to a different state. The recited steps in the claim fail to provide meaningful limitations to limit the judicial exception. In this case, the claim merely uses the claimed computer elements as a tool to perform the abstract idea. Considering the elements of the claim both individually and as “an ordered combination” the functions performed by the computer system at each step of the process are purely conventional. Each step of the claimed method does no more than require a generic computer to perform a generic computer function. Thus, the claimed elements have not been shown to integrate the judicial exception into a practical application as set forth in the Guidance. Appeal 2019-003530 Application 11/976,433 9 Turning to the second step of the Alice and Mayo framework, we determine that the claim does not contain an inventive concept sufficient to “transform” the abstract nature of the claim into a patent-eligible application. Considering the claim both individually and as an ordered combination fails to add subject matter beyond the judicial exception that is not well- understood, routine, and conventional in the field. Rather the claim uses well-understood, routine, and conventional activities previously known in the art and they are recited at a high level of generality. The Specification at paragraph 39 for example describes using conventional computer components such as electronic data networks including the Internet, trade routers, and known trading devices in a conventional manner. Here, the claimed generic computer components which are used to implement the claimed method are well understood, routine, or conventional in the field. The claim has not been shown to be “significantly more” than the abstract idea. The Appellant states that the Declaration of Milan Borkovec was not properly considered (Appeal Br. 19, 20; Supp. Br. 4–7). The Examiner states that the Declaration was considered but not deemed persuasive (Ans. 11). We have considered the Declaration fully and also determine that is not persuasive. The Appeal Brief at page 13 argues, for instance, that the Declaration shows the claimed invention is rooted in computer technology but we disagree as it is rather rooted in determining trading transaction costs and only inferentially uses conventional computer components in a generic manner to implement the method steps. The Declaration is not deemed persuasive to show the rejection was improper. Appeal 2019-003530 Application 11/976,433 10 The Appellant, at pages 16 and 22 of the Appeal Brief, has also cited to McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016) but the claims in that case are distinguished from this case in being directed to rules for lip sync and facial expression animation. The Appellant, at pages 20 and 21 of the Appeal Brief, has also cited to Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) to show that the claim is not abstract but the claims in that case were not similar in scope to those here and were in contrast directed to a self-referential data table. For the reasons given above, the claim is considered to set forth the abstract concept of determining trading transaction costs and the claimed method steps are not considered to be “significantly more” than the abstract concept. For these above reasons, the rejection of claim 1 is sustained. The Appellant has provided the same arguments for the remaining claims drawn to similar subject matter and the rejection of these claims is sustained for the same reasons given above. CONCLUSIONS OF LAW We conclude that Appellant has not shown that the Examiner erred in rejecting claims 1, 3–8, 10–16, 18–22, and 26–29 under 35 U.S.C. § 101. Appeal 2019-003530 Application 11/976,433 11 DECISION SUMMARY In summary: Claims Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed 1, 3–8, 10– 16, 18–22, 26–29 101 Eligibility 1, 3–8, 10– 16, 18–22, 26–29 TIME PERIOD FOR RESPONSE No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R. § 1.136(a)(1)(iv). AFFIRMED Copy with citationCopy as parenthetical citation