CFPH, LLC

Patent Trials and Appeals Board

Oct 20, 2020

14296602 - (D) (P.T.A.B. Oct. 20, 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.
14/296,602 06/05/2014 Howard W. Lutnick 08-2205D-C1 1036
63710 7590 10/20/2020
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
NGUYEN, TIEN C
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
10/20/2020 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
mcatarino@cgolaw.com
patentdocketing@cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte HOWARD W. LUTNICK and LAWRENCE TINT
____________

Appeal 2019-002591
Application 14/296,602
Technology Center 3600
____________

Before ANTON W. FETTING, BIBHU R. MOHANTY, and
KENNETH G. SCHOPFER, Administrative Patent Judges.

FETTING, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE1
Appellant2 seeks review under 35 U.S.C. § 134 of a final rejection of
claims 4–23, the only claims pending in the application on appeal. We have
jurisdiction over the appeal pursuant to 35 U.S.C. § 6(b).

1 Our decision will make reference to the Appellant’s Appeal Brief (“App.
Br.,” filed July 6, 2018) and Reply Brief (“Reply Br.,” filed February 12,
2019), and the Examiner’s Answer (“Ans.,” mailed December 17, 2018),
and Final Action (“Final Act.,” mailed February 8, 2018).
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The Appellant invented a way of trading via electronic trading
systems. Spec. ¶ 3.
An understanding of the invention can be derived from a reading of
exemplary claim 4, which is reproduced below (bracketed matter and some
paragraphing added).
4. A method comprising:
[1] receiving in real-time, by at least one processor of at least
one computer in electronic communication with at least one
memory and a plurality of network nodes via an electronic
communications network, over the electronic communications
network from at least one of the plurality of network nodes,
real-time market data about a financial instrument, the real-time
market data comprising at least one price of at least one of (i) a
current bid to purchase the financial instrument, (ii) a current
offer to sell the financial instrument, and (iii) an executed trade
for the financial instrument;
[2] calculating, by the at least one processor, based on the real-
time market data received in real-time, a predicted change in
tracking error of a portfolio that would result from the portfolio
selling the predetermined quantity of the financial instrument;
[3] determining, by the at least one processor, a sale reservation
price increment for a sale of a predetermined quantity of the
financial instrument,
wherein the sale reservation price increment is calculated
based on the calculated predicted change in tracking error of the
portfolio that would result from the portfolio selling the
predetermined quantity of the financial instrument;

2 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. Appellant identifies the real party in interest as CFPH,
LLC. Appeal Br. 3.

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[4] calculating, by the at least one processor, a sale reservation
price based on the sale reservation price increment and a market
price;
[5] generating, by the at least one processor, a sell order for the
financial instrument at the sale reservation price for the
predetermined quantity; and
[6] causing, by the at least one processor, a graphical user
interface to be displayed at a display device of a potential
counterparty to the sell order, the graphical user interface
comprising:
information about the sell order;
a first indicia of a selectable option to reject the sell
order; and
a second indicia of a selectable option to accept the sell
order.
Claims 4–23 stand rejected under 35 U.S.C. § 101 as directed to a
judicial exception without significantly more.
ISSUES
The issues of eligible subject matter turn primarily on whether the
claims recite more than abstract conceptual advice of results desired.
ANALYSIS
STEP 13
Claim 4, as a method claim, nominally recites one of the enumerated
categories of eligible subject matter in 35 U.S.C. § 101. The issue before us
is whether it is directed to a judicial exception without significantly more.

3 For continuity of analysis, we adopt the steps nomenclature from 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7,
2019) (“Revised Guidance”).
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STEP 2
The Supreme Court
set forth a framework for distinguishing patents that
claim laws of nature, natural phenomena, and abstract ideas
from those that claim patent-eligible applications of those
concepts. First, . . . determine whether the claims at issue are
directed to one of those patent-ineligible concepts. If so, we
then ask, “[w]hat else is there in the claims before us? To
answer that question, . . . consider the elements of each claim
both individually and “as an ordered combination” to determine
whether the additional elements “transform the nature of the
claim” into a patent-eligible application. [The Court] described
step two of this analysis as 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.”
Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217–18 (2014) (citations
omitted) (citing Mayo Collaborative Servs. v. Prometheus Labs, Inc.,
566 U.S. 66 (2012)). To perform this test, we must first determine what the
claims are directed to. This begins by determining whether the claims recite
one of the judicial exceptions (a law of nature, a natural phenomenon, or an
abstract idea). Then, if the claims recite a judicial exception, determining
whether the claims at issue are directed to the recited judicial exception, or
whether the recited judicial exception is integrated into a practical
application of that exception, i.e., that the claims “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.” Revised Guidance, 84 Fed. Reg. at
54. If the claims are directed to a judicial exception, then finally
determining whether the claims provide an inventive concept because the
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additional elements recited in the claims provide significantly more than the
recited judicial exception.
STEP 2A Prong 1
At a high level, and for our preliminary analysis, we note that method
claim 4 recites receiving market data, calculating predicted change data,
determining price increment data, calculating price data, generating sell
order data, and displaying data. Calculating data is mathematical
algorithmic analysis. Determining data is rudimentary data analysis. Thus,
claim 4 recites receiving, analyzing, generating, and displaying data. None
of the limitations recites technological implementation details for any of
these steps, but instead recite only results desired by any and all possible
means.
From this we see that claim 4 does not recite the judicial exceptions of
either natural phenomena or laws of nature.
Under Supreme Court precedent, claims directed purely to an abstract
idea are patent in-eligible. As set forth in the Revised Guidance, which
extracts and synthesizes key concepts identified by the courts, abstract ideas
include (1) mathematical concepts4, (2) certain methods of organizing
human activity5, and (3) mental processes6. Among those certain methods

4 See, e.g., Gottschalk v. Benson, 409 U.S. 63, 71–72 (1972); Bilski v.
Kappos, 561 U.S. 593, 611 (2010); Mackay Radio & Telegraph Co. v. Radio
Corp. of Am., 306 U.S. 86, 94 (1939); SAP America, Inc. v. InvestPic, LLC,
898 F.3d 1161, 1163 (Fed. Cir. 2018).
5 See, e.g., Bilski, 561 U.S. at 628; Alice, 573 U.S. at 219-20; Ultramercial,
Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed Cir. 2014); Smart Sys.
Innovations, LLC v. Chicago Transit Auth., 873 F.3d 1364, 1383 (Fed. Cir.
2017); In re Marco Guldenaar Holding B.V., 911 F.3d 1157, 1160–61 (Fed.
Cir. 2018).
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of organizing human activity listed in the Revised Guidance are commercial
or legal interactions. Like those concepts, claim 4 recites the concept of
trading financial assets. Specifically, claim 4 recites operations that would
ordinarily take place in advising one to calculate a security sell price based
on predicted portfolio tracking error and create a sell order accordingly. The
advice to calculate a security sell price based on predicted portfolio tracking
error and create a sell order accordingly involves generating a sell order,
which is an economic act, and calculating a price for a financial security,
which is an act ordinarily performed in the stream of commerce. For
example, claim 4 recites “generating . . . a sell order,” which is an activity
that would take place whenever one is selling a financial asset in commerce.
Similarly, claim 1 recites “calculating . . . a sale reservation price,” which is
also characteristic of commercial financial asset trading.
The Examiner determines the claims to be directed to generating a sell
or buy order. Final Act. 2.
The preamble to claim 4 does not recite what it is to achieve, but the
steps in claim 4 result in trading financial assets by calculating a security sell
price based on predicted portfolio tracking error and creating a sell order
accordingly absent any technological mechanism other than a conventional
computer for doing so.
As to the specific limitations, limitation 1 recites receiving data.
Limitations 2–6 recite generic and conventional analyzing, generating, and
displaying of financial trading data, which advise one to apply generic

6 See, e.g., Benson, 409 U.S. at 67; CyberSource Corp. v. Retail Decisions,
Inc., 654 F.3d 1366, 1371–72 (Fed. Cir. 2011); Intellectual Ventures I LLC
v. Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016).
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functions to get to these results. The limitations thus recite advice for
calculating a security sell price based on predicted portfolio tracking error
and creating a sell order accordingly. To advocate calculating a security sell
price based on predicted portfolio tracking error and creating a sell order
accordingly is conceptual advice for results desired and not technological
operations.
The Specification at paragraph 3 describes the invention as relating to
trading via electronic trading systems. Thus, all this intrinsic evidence
shows that claim 4 recites trading financial assets. This is consistent with
the Examiner’s determination.
This in turn is an example of commercial or legal interactions as a
certain method of organizing human activity because trading financial assets
is a commercial enterprise. The concept of trading financial assets by
calculating a security sell price based on predicted portfolio tracking error
and creating a sell order accordingly is one idea for managing such trades.
The steps recited in claim 4 are part of how this might conceptually be
premised.
Our reviewing court has found claims to be directed to abstract ideas
when they recited similar subject matter. Trading Techs. Int’l, Inc. v. IBG
LLC, 921 F.3d 1084 (Fed. Cir. 2019) (data assisting financial security
traders).
Alternately, this is an example of concepts performed in the human
mind as mental processes because the steps of receiving, analyzing,
generating, and displaying data mimic human thought processes of
observation, evaluation, judgment, and opinion, perhaps with paper and
pencil, where the data interpretation is perceptible only in the human mind.
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See In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir.
2016); FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093–94
(Fed. Cir. 2016). Claim 4, unlike the claims found non-abstract in prior
cases, uses generic computer technology to perform data reception, analysis,
generating, and display and does not recite an improvement to a particular
computer technology. See, e.g., McRO, Inc. v. Bandai Namco Games Am.
Inc., 837 F.3d 1299, 1314–15 (Fed. Cir. 2016) (finding claims not abstract
because they “focused on a specific asserted improvement in computer
animation”). As such, claim 4 recites receiving, analyzing, generating, and
displaying data, and not a technological implementation or application of
that idea.
From this we conclude that at least to this degree, claim 4 recites
trading financial assets by calculating a security sell price based on predicted
portfolio tracking error and creating a sell order accordingly, which is a
commercial and legal interaction, one of certain methods of organizing
human activity identified in the Revised Guidance, and, thus, an abstract
idea.
STEP 2A Prong 2
The next issue is whether claim 4 not only recites, but is more
precisely directed to this concept itself or whether it is instead directed to
some technological implementation or application of, or improvement to,
this concept i.e. integrated into a practical application.7
At the same time, we tread carefully in construing this
exclusionary principle lest it swallow all of patent law. At
some level, “all inventions . . . embody, use, reflect, rest upon,

7 See, e.g., Alice, 573 U.S. at 223, discussing Diamond v. Diehr, 450 U.S.
175 (1981).
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or apply laws of nature, natural phenomena, or abstract ideas.”
Thus, an invention is not rendered ineligible for patent simply
because it involves an abstract concept. “[A]pplication[s]” of
such concepts “‘to a new and useful end,’ ” we have said,
remain eligible for patent protection. Accordingly, in applying
the § 101 exception, we must distinguish between patents that
claim the “‘buildin[g] block[s]’” of human ingenuity and those
that integrate the building blocks into something more.
Alice, 573 U.S. at 217 (citations omitted).
Taking the claim elements separately, the operation performed by the
computer at each step of the process is expressed purely in terms of results,
devoid of implementation details. Step 1 is a pure data gathering step.
Limitations describing the nature of the data do not alter this. Step 5 recites
basic conventional data operations such as generating, updating, and storing
data. Step 6 is insignificant post solution activity, such as storing,
transmitting, or displaying the results. Steps 2–4 recite generic computer
processing expressed in terms of results desired by any and all possible
means and so present no more than conceptual advice. All purported
inventive aspects reside in how the data is interpreted and the results desired,
and not in how the process physically enforces such a data interpretation or
in how the processing technologically achieves those results.
Viewed as a whole, Appellant’s claim 4 simply recites the concept of
trading financial assets by calculating a security sell price based on predicted
portfolio tracking error and creating a sell order accordingly as performed by
a generic computer. This is no more than conceptual advice on the
parameters for this concept and the generic computer processes necessary to
process those parameters, and do not recite any particular implementation.
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Claim 4 does not, for example, purport to improve the functioning of
the computer itself. Nor does it effect an improvement in any other
technology or technical field. The Specification only spells out different
generic equipment8 and parameters that might be applied using this concept
and the particular steps such conventional processing would entail based on
the concept of trading financial assets by calculating a security sell price
based on predicted portfolio tracking error and creating a sell order
accordingly under different scenarios. It does not describe any particular
improvement in the manner a computer functions. Instead, claim 4 at issue
amounts to nothing significantly more than an instruction to apply trading
financial assets by calculating a security sell price based on predicted
portfolio tracking error and creating a sell order accordingly using some
unspecified, generic computer. Under our precedents, that is not enough to
transform an abstract idea into a patent-eligible invention. See Alice, 573
U.S. at 225–26.
None of the limitations reflects an improvement in the functioning of
a computer, or an improvement to other technology or technical field,
applies or uses a judicial exception to effect a particular treatment or
prophylaxis for a disease or medical condition, implements a judicial
exception with, or uses a judicial exception in conjunction with, a particular
machine or manufacture that is integral to the claim, effects a transformation
or reduction of a particular article to a different state or thing, or applies or
uses the judicial exception in some other meaningful way beyond generally
linking the use of the judicial exception to a particular technological

8 The Specification describes laptop computers, PDAs, cellular telephones,
and/ or any other desired mobile device. Spec. para. 141.
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environment, such that the claim as a whole is more than a drafting effort
designed to monopolize the exception.
We conclude that claim 4 is directed to achieving the result of trading
financial assets by advising one to calculate a security sell price based on
predicted portfolio tracking error and create a sell order accordingly, as
distinguished from a technological improvement for achieving or applying
that result. This amounts to commercial or legal interactions, which fall
within certain methods of organizing human activity that constitute abstract
ideas. The claim does not integrate the judicial exception into a practical
application.
STEP 2B
The next issue is whether claim 4 provides an inventive concept
because the additional elements recited in the claim provide significantly
more than the recited judicial exception.
The introduction of a computer into the claims does not generally alter
the analysis at Mayo step two.
[T]he mere recitation of a generic computer cannot transform a
patent-ineligible abstract idea into a patent-eligible invention.
Stating an abstract idea “while adding the words ‘apply it’” is
not enough for patent eligibility. Nor is limiting the use of an
abstract idea “‘to a particular technological environment.’”
Stating an abstract idea while adding the words “apply it with a
computer” simply combines those two steps, with the same
deficient result. Thus, if a patent’s recitation of a computer
amounts to a mere instruction to “implement[t]” an abstract
idea “on . . . a computer,” that addition cannot impart patent
eligibility. This conclusion accords with the preemption
concern that undergirds our § 101 jurisprudence. Given the
ubiquity of computers, wholly generic computer
implementation is not generally the sort of “additional
feature[e]” that provides any “practical assurance that the
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process is more than a drafting effort designed to monopolize
the [abstract idea] itself.”
Alice, 573 U.S. at 223–24 (citations omitted).
“[T]he relevant question is whether the claims here do more than
simply instruct the practitioner to implement the abstract idea [] on a generic
computer.” Alice, 573 U.S. at 225. They do not.
Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer for receiving, analyzing, generating, and displaying data amounts
to electronic data query and retrieval—one of the most basic functions of a
computer. The limitation of data being real-time is not a step, but a
characterization of data that is received. The limitations regarding the
calculations and determination in steps 2–4 are simply parameters for a
mathematical algorithm. The sell order generated in step 5 is no more than
data describing such an order. The particular data displayed in step 6 is
conceptual information discernable only to the human mind. All of these
computer functions are generic, routine, conventional computer activities
that are performed only for their conventional uses. See Elec. Power Grp.
LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016). See also In re
Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed.
Cir. 2011) (“Absent a possible narrower construction of the terms
‘processing,’ ‘receiving,’ and ‘storing,’ . . . those functions can be achieved
by any general purpose computer without special programming”). None of
these activities is used in some unconventional manner nor does any produce
some unexpected result. Appellant does not contend it invented any of these
activities. In short, each step does no more than require a generic computer
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to perform generic computer functions. As to the data operated upon, “even
if a process of collecting and analyzing information is ‘limited to particular
content’ or a particular ‘source,’ that limitation does not make the collection
and analysis other than abstract.” SAP America, Inc. v. InvestPic LLC, 898
F.3d 1161, 1168 (Fed. Cir. 2018).
Considered as an ordered combination, the computer components of
Appellant’s claim 4 add nothing that is not already present when the steps
are considered separately. The sequence of data reception-analysis-
generating-display is equally generic and conventional. See Ultramercial,
Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014) (sequence of
receiving, selecting, offering for exchange, display, allowing access, and
receiving payment recited an abstraction), Inventor Holdings, LLC v. Bed
Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017) (sequence of
data retrieval, analysis, modification, generation, display, and transmission),
Two-Way Media Ltd. v. Comcast Cable Communications, LLC, 874 F.3d
1329, 1339 (Fed. Cir. 2017) (sequence of processing, routing, controlling,
and monitoring). The ordering of the steps is therefore ordinary and
conventional.
We conclude that claim 4 does not provide an inventive concept
because the additional elements recited in the claim do not provide
significantly more than the recited judicial exception.
REMAINING CLAIMS
Claim 4 is representative. The remaining method claims merely
describe process parameters. We conclude that the method claims at issue
are directed to a patent-ineligible concept itself, and not to the practical
application of that concept.
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As to the structural claims, they
are no different from the method claims in substance. The
method claims recite the abstract idea implemented on a generic
computer; the system claims recite a handful of generic
computer components configured to implement the same idea.
This Court has long “warn[ed] . . . against” interpreting §
101“in ways that make patent eligibility ‘depend simply on the
draftsman’s art.’
Alice, 573 U.S. at 226. As a corollary, the claims are not directed to any
particular machine.
LEGAL CONCLUSION
From these determinations we further determine that the claims do not
recite an improvement to the functioning of the computer itself or to any
other technology or technical field, a particular machine, a particular
transformation, or other meaningful limitations. From this we conclude the
claims are directed to the judicial exception of the abstract idea of certain
methods of organizing human activity as exemplified by the commercial and
legal interaction of trading financial assets by advising one to calculate a
security sell price based on predicted portfolio tracking error and create a
sell order accordingly, without significantly more.
APPELLANT’S ARGUMENTS
As to Appellant’s Appeal Brief arguments, we adopt the Examiner’s
determinations and analysis from Final Action 2–5 and Answer 3–8 and
reach similar legal conclusions. We now turn to the Reply Brief.
We are not persuaded by Appellant’s argument that
the subject matter is integrated into a practical application of an
abstract idea which is directed to improvements in computer
performance particularly by displaying on a graphical user
interface sell order transaction based on a tracking error over a
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network. Such techniques helps control the number of
commands and transactions being transmitted over the network
and control computer workload including computer resources
such as memory resources, processor resources, and network
resources such as network bandwidth
Reply Br. 4. This is an argument that computer performance is enhanced by
increased accuracy that reduces the amount of user input in turn brought
about by automating analysis. Our reviewing court has held that speed
and accuracy increases stemming from the ordinary capabilities of
automation by a general purpose computer “do[] not materially alter the
patent eligibility of the claimed subject matter.” Bancorp Servs., L.L.C. v.
Sun Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir.
2012).
Appellant elaborates by arguing that the asserted claims are akin to
the claims found patent-eligible in Core Wireless Licensing S.A.R.L. v. LG
Elecs., Inc., 880 F.3d 1356 (Fed. Cir. 2018). Reply Br. 5. But the Court in
Trading Techs. addressed Appellant’s Core Wireless argument.
Relying principally on Core Wireless, TT argues the claimed
invention provides an improvement in the way a computer
operates. We do not agree. The claims of the ’999 patent do not
improve the functioning of the computer, make it operate more
efficiently, or solve any technological problem. Instead, they
recite a purportedly new arrangement of generic information
that assists traders in processing information more quickly.
Trading Techs., 921 F.3d at 1093 (citations omitted). The instant claims do
not improve the functioning of the computer, make it operate more
efficiently, or solve any technological problem. Instead, they recite a
purportedly new arrangement of generic information that assists users in
processing information more quickly.

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Appellants cite Berkheimer for the proposition that evidence of
something being conventional is necessary. Berkheimer v. HP Inc.,
881F.3d1360 (Fed. Cir. 2018). Reply Br. 6–7. Support for this finding is
provided under Step 2B supra.
CONCLUSIONS OF LAW
The rejection of claims 4–23 under 35 U.S.C. § 101 as directed to a
judicial exception without significantly more is proper.
CONCLUSION
The rejection of claims 4–23 is affirmed.
In summary:
Claims
Rejected
35 U.S.C. § Basis Affirmed Reversed
4–23 101 Eligibility 4–23

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) (2011).

AFFIRMED