Ex Parte Bauerschmidt et al

Patent Trial and Appeal Board

Mar 1, 2019

11590540 (P.T.A.B. Mar. 1, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/590,540 10/31/2006
12684 7590 03/05/2019
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
FIRST NAMED INVENTOR
Paul Andrew Bauerschmidt
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
4672-05552BUS 6932
EXAMINER
BORLING HAUS, JASON M
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
03/05/2019 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):
mail@lsk-iplaw.com
docket-us@lsk-iplaw.com
pair_lsk@firsttofile.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PAUL ANDREW BAUERSCHMIDT, DMITRIY GLINBERG,
EDWARD M. GOGOL, STEPHEN M. GOLDMAN, PAUL I. LICHTER,
JEFFREY ROBERT MITCHELL, ARI L. STUDNITZER,
and TAE SEOK YOO
Appeal2017-010540
Application 11/590,540 1
Technology Center 3600
Before DAVID M. KOHUT, ERIC B. CHEN, and
JOSEPH P. LENTIVECH, Administrative Patent Judges.
KOHUT, Administrative Patent Judge.
DECISION ON APPEAL
Appellants seek our review, under 35 U.S.C. § 134(a), of the
Examiner's final rejection of claims 1, 2, 4--7, 23, 24, and 26-29. 2 We have
jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 Appellants identify the real party in interest as "Chicago Mercantile
Exchange Inc." App. Br. 2.
2 Claims 3, 8, 25, 30, and 45 are canceled. App. Br. 20-34 (claims
appendix). Claims 9--22, 31--44, 46, and 47 are withdrawn. Id.
Appeal2017-010540
Application 11/590,540
INVENTION
The present invention relates to futures contracts (i.e., a legally
binding agreement to buy or sell a commodity at a specified price and
predetermined future time) for foreign currency trades. Spec. ,r,r 3--4. A
clearing house acts as an intermediary of clearing members (i.e., the large
entities that buy and sell currency) and, further, as the buyer to each seller
and seller to each buyer. Id. ,r,r 24, 27, 77. As the contra-side of each
transaction, the clearing house has various positions (agreed-upon
transactions) pending with each member and settles the nets of those
positions when due. Id. ,r,r 27, 55. The net of a member's offsetting
positions eliminates those positions and, thus, reduces associated settlement
transactions and costs. Id. ,r,r 55, 78.
Claim 1 is illustrative and reproduced below.
1. A method of trading financial instruments among a
plurality of entities participating in a market, the financial
instruments comprising foreign exchange instruments, the
method comprising:
receiving by a match processor of an intermediary from a first
entity of the plurality of entities a first request for a first
transaction in a particular foreign exchange instrument;
identifying, by the match processor, a second request received by
the intermediary from a second entity of the plurality of entities
for a second transaction in the particular foreign exchange
instrument where the second transaction is at least partially
counter to the first transaction; and
matching, by the match processor, the first request with the
second request and subsequently facilitating the first and second
transactions without identifying the first and second entities to
each other;
2
Appeal2017-010540
Application 11/590,540
wherein the facilitating further comprises:
initiating performance of the first transaction between the
first entity and the intermediary and initiating performance
of the second transaction between the second entity and
the intermediary wherein if it is determined that one of the
first and second transactions matched by the match
processor is incapable of being completed, performance of
the other of the first and second transactions is unaffected;
recording, in a first account associated with the first entity,
a first position resulting from at least the initiation of the
first transaction and indicating that the first transaction is
yet to be completed, the first position being one of a
plurality of positions recorded in the account as a result of
at least initiation of performance of a plurality of other
transactions received from the first entity each of which is
yet to be completed, wherein each of the plurality of other
transactions is subject to subsequent completion between
the intermediary and the first entity, each of the plurality
of other transactions being associated with a counter-
transaction matched with the other transaction by the
intermediary;
recognizing the first position of the plurality of positions
in the first account at least partially correlates with a
second position of the plurality of positions in the first
account, the correlation being independent of them being
recorded in the same account and independent of the
counter-transaction associated with the at least one
transaction from which the first and second positions
resulted;
combining the recognized first position with the second
position to create a net position and recording the net
position in the first account; and
eliminating the recognized first pos1t10n, the second
position or combinations thereof, along with the
3
Appeal2017-010540
Application 11/590,540
associated transactions, that are nullified by the
combining;
whereby fewer positions remain in the first account for
subsequent completion of the associated transactions.
REJECTIONS
Claims 1, 2, 4--7, 23, 24, and 26-29 stand rejected under
35 U.S.C. § 101 as being directed to a judicial exception of patent-eligible
subject matter. Final Act. 2 (July 11, 2016) ("Final Act.").
Claims 1, 2, 4--7, 23, 24, and 26-29 stand rejected under
35 U.S.C. § 112, second paragraph, as indefinite. Final Act. 3.
Claims 1, 4, 23, and 26 stand rejected under 35 U.S.C. § I03(a) as
unpatentable over Garber (US 5,963,923; Oct. 5, 1999) and Fergusson
(US 2003/0023531 Al; Jan. 30, 2003). Final Act. 4--7.
Claims 2, 5-7, 24, and 27-29 stand rejected under 35 U.S.C. § I03(a)
as unpatentable over Garber, Fergusson, and Balson et al.
(US 2003/0033240 Al; Feb. 13, 2003) (herein "Balson"). Final Act. 7-9.
35 U.S.C. § 101 REJECTION OF
CLAIMS 1, 2, 4--7, 23, 24, AND 26-29
Claims 1, 2, 4--7, 23, 24, and 26-29 stand rejected under
35 U.S.C. § 101. Appellants argue these claims as a group. App. Br. 5-10.
We select claim 1 as representative of the group, such that claims 2, 4--7, 23,
24, and 26-29 stand or fall with claim 1. See 37 C.F.R. § 4I.37(c)(l)(iv).
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 Supreme Court has long interpreted 35 U.S.C. § 101 to include
4
Appeal2017-010540
Application 11/590,540
implicit exceptions: "[l]aws of nature, natural phenomena, and abstract
ideas" are not patentable. E.g., Alice Corp. v. CLS Bankint'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
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. Kappas, 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 (Gottschalkv. Benson, 409 U.S. 63, 69 (1972)). Concepts
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
5
Appeal2017-010540
Application 11/590,540
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. (internal citation omitted) ( citing Benson and Flook).
If the claim is "directed to" an abstract idea, we tum to the second
step of the Alice 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.
Per recently published guidance regarding 35 U.S.C. § 101, we first
look to whether a 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); and
6
Appeal2017-010540
Application 11/590,540
(2) additional elements that integrate the judicial exception into a
practical application (see Manual of Patent Examining Procedure
(MPEP) § 2106.05(a}-(c), (e}-(h)).
See 2019 Revised Patent Subject Matter Eligibility Guidance ("Guidance"),
84 Fed. Reg. 50 (Jan. 7, 2019). 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 are 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.
Issue (1): Does claim 1 recite ajudicial exception?
Claim 1 recites a method of trading foreign exchange (herein
"ForEx") instruments. The Examiner identifies the following claim
limitations (summaries) as directed to abstract ideas:
(i) receiving a first request, (ii) identifying a second request,
counter to the first request, (iii) matching the two requests, (iv)
initiating performance of a transaction between the first request
and the second requests, ( v) determining that the transaction is
incapable of being completed, (vi) completing performance of
the first request or the second request, (vii) recording a position
in a first account, (vii) recognizing that the first position
correlates to a second position in the first account, (viii)
combining positions, and (ix) eliminating positions that are
nullified.
7
Appeal2017-010540
Application 11/590,540
Final Act. 2; see also Ans. 2. In support, the Examiner compares the
limitations to the abstract ideas recognized by: (1) Int 'l Sec. Exch., LLC
v. Chicago Bd. Options Exch., Inc., No. CBM2013-00049 (PTAB March 2,
2015) (herein "Chicago Bd. Options Exch."), aff'd, 640 F. App'x 986 (mem)
(Fed. Cir. 2016) (nonprecedential) (Rule 36); and (2) CyberSource
Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011). Final Act.
10-11. The Examiner finds the limitations are similar to Chicago
Bd. Options Exch. because, "[l]ike the operation of an automated trading
exchange in Chicago Bd. Options Exch., the [claimed] concept [ofJ clearing
of foreign exchange instruments is a fundamental economic practice long
prevalent in our system of commerce." Id. at 10. The Examiner also finds
that the limitations are similar to CyberSource because, "[l]ike the fraud
detection in CyberSource, the [ claimed] concept of clearing of foreign
exchange instruments is a method that could be performed in the human
mind or with a pen-and-paper." Id. at 10-11.
Appellants do not dispute that the limitations (i) to (ix) recite a
fundamental economic practice of clearing ForEx instruments ( Chicago
Bd. Options Exch.) and mentally-performable steps, e.g., with a pen-and-
paper ( CyberSource ). Instead, Appellants' arguments are directed to Issues
(2) to (4) of the Guidance, addressed below. See, e.g., App. Br. 8 ("Even if
the claims are determined to incorporate or related to an abstract idea, they
are not .... "). As no errors are raised for Issue (1) of the Guidance, we
move on to Issues (2) to (4).
8
Appeal2017-010540
Application 11/590,540
Issue (2): Does claim 1 recite additional elements that integrate
the judicial exception into a practical application?
We have reviewed claim 1 against the above findings to determine the
alleged additional elements, i.e., the claim features not identified by the
Examiner as abstract ideas. The claim features constituting neither a ForEx
instrument nor one of the limitations (i) to (ix) are: "match processor of an
intermediary"; "facilitating ... transactions without identifying ... entities
to each other"; "initiating performance ... between the first entity and the
intermediary and ... between the second entity and the intermediary"; "if it
is determined that one of the ... transactions ... is incapable of being
completed, performance of the other ... is unaffected"; "recognizing the
first position ... correlates with a second position ... in the first account,
the correlation being independent of them being recorded in the same
account"; "combining the recognized first position with the second position
to create a net position and recording the net position"; and "eliminating
[positions], along with the associated transactions, that are nullified by the
combining."
Appellants also identify these claim features as "additional elements"
of claim 1, characterizing the features as "a specific and practical application
of the abstract idea which does not entirely pre-empt its use." App. Br. 6.
Appellants specifically contend:
[T]he claimed invention improves upon the technical field of
data and transaction processing by providing a system which
permits each party to a bilateral transaction to complete their
side of the transaction even if the other party is unable to do so,
while maintaining anonymity there between, and further
segregates the resulting positions enabling reduction of
correlated positions stored within an account of one participant
without affecting accounts of other participants. See, for
9
Appeal2017-010540
Application 11/590,540
example, Appellants' Specification, paras. 23, 24, 30, 35, 36,
37, 55, and 77-83 (explaining how providing a central
counterparty and implementing a novation process to bilateral
transactions improves upon the transactional efficiency,
allowing more transactions to be processed and additional
functionality to be provided such as netting/offsetting over and
above that provided by bilateral systems) ....
. . . [T]he claims ... are not directed to, nor do they pre-
empt all implementations of, the abstract idea. Instead, they are
directed to a specific and practical application[.]
Id.; see also id. at 8-9 (arguing, in view of DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), the above claim features
constitute "a specific and practical application ... rooted in technology").
We find that the above claim features do not narrow the method's
implementation of the abstract ideas nor do they narrow the implementation
to a practical application. Rather, we find that the features narrow the
abstract ideas by adding a contractual intermediary to provide anonymity,
guarantee transactions, and net combinable transactions. The Federal Circuit
has described a similar contractual intermediary as merely narrowing a
fundamental economic practice (i.e., as an abstract idea), stating:
The relevant Supreme Court cases are those which find an
abstract idea in certain arrangements involving contractual
relations, which are intangible entities .... Alice involved
methods and systems for "exchanging financial obligations
between two parties using a third-party intermediary to mitigate
settlement risk," Alice, [573 U.S. at 219]. [T]he Court
... relied on the fact that the contractual relations at issue
constituted "a fundamental economic practice long prevalent in
our system of commerce." ... [SJ ee Alice, [573 U.S. at
219-21].
10
Appeal2017-010540
Application 11/590,540
buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1353-54 (Fed. Cir. 2014).
The argued improvements-providing anonymity, guaranteeing
transactions, and netting transactions-are also abstract ideas. Providing
anonymity is, without more, a matter of passing some information while
withholding other information. See, e.g., Elec. Power Grp. v. Alstom S.A.,
830 F.3d 1350, 1353 (Fed. Cir. 2016) ("collecting information, analyzing it,
and displaying certain results" ( emphasis added) is, without more, an
abstract idea); Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC,
827 F.3d 1341, 1348 (Fed. Cir. 2016) ("[F]iltering content is an abstract
idea .... "). Guaranteeing transactions, via an intermediary, is a transaction
guarantee service by a third-party. See, e.g., buySAFE, 765 F.3d at 1355
("[A] transaction performance guaranty ... is beyond question of ancient
lineage." (quotation marks omitted)). Netting of transactions is a
longstanding form of accounting ( e.g., budgeting) and, moreover,
performable by pen and paper. See, e.g., Intellectual Ventures I LLC
v. Capital One Bank (USA), 792 F.3d 1363, 1367 (Fed. Cir. 2015) ("[T]he
patent claims are directed to an abstract idea: ... i.e., budgeting."); see also
id. at 1368 ("[T]he budgeting calculations ... are unpatentable because they
could still be made using a pencil and paper .... " ( quotation marks
omitted)).
In light of the above, we find the invention's argued "application"
constitutes only a narrowing of the abstract ideas identified by the Examiner
(e.g., adding a contractual intermediary to ForEx transactions) and additional
abstract ideas (e.g., anonymity). Narrowing and combining abstract ideas,
such as here, does not make the ideas less abstract. See, e.g., RecogniCorp,
11
Appeal2017-010540
Application 11/590,540
LLC v. Nintendo Co., 855 F.3d 1322, 1327 (Fed. Cir. 2017); FairWarning
IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093-94 (Fed. Cir. 2016).
Appellants additionally argue, in view of DDR Holdings, that "some
of the problems solved by Appellants' invention are specifically rooted in
technology." App. Br. 8-9. We are unpersuaded because Appellants have
not shown that only technology can achieve the invention's objective of
creating an intermediary for ForEx transactions (or its benefits such as
netting ForEx positions). See DDR Holdings, 773 F.3d at 1257 ("[T]he
claimed solution is necessarily rooted in computer technology in order to
overcome a problem specifically arising in the realm of computer
networks."). We find the claims in this case, unlike the claims of DDR
Holdings, do not concern a problem and solution inseparably tied to
technology.
For the foregoing reasons, we are left with only abstract ideas that are
implemented by an undescribed "match processor." Implementing abstract
ideas on a generic computer is not, without more, a "practical application."
See Alice, 573 U.S. at 221-24; see also MPEP § 2106.05(±) ("Mere
Instructions To Apply An Exception").
Issues (3) and (4): Does claim 1 recite additional elements that
are not well understood, routine, or conventional in the
industry, or, simply append well understood, routine, or
conventional activities, at a high level of generality, to the
judicial exception?
Appellants argue that the claimed combination of the intermediary
and electronic ForEx market yields significant improvements in the art,
particularly because the claimed advances ( e.g., netting of transactions) were
otherwise unavailable to electronic ForEx trading. App. Br. 6-10. For
12
Appeal2017-010540
Application 11/590,540
example, Appellants conclude their arguments against this rejection by
contending:
Appellants submit that the claims are directed to "a specific
improvement to the way computers operate", i.e., a specific
implementation of a solution to a problem in the software arts,
providing a specific and practical system which facilitates
initiation of transactions to be completed in the future in a
manner which allows the number of such initiated transactions
to be reduced based on an identified correlation there
between. In particular, the claimed invention solves the
technical problem of reducing the number of open transactions
entered into by multiple parties. The claimed invention solves
this problem via the claimed initiation of performance of those
transactions, instead of directly between the parties, between
each party and an intermediary where performance of any one
transaction has no effect on the other transactions.
Id. at 10.
We are unpersuaded because the argued improvements lie strictly
within the abstract ideas set forth above. This is not an instance where, for
example, the act of combining a claimed abstract idea and computer
technology improves a computer's technological function. Cf Bascom, 827
F.3d at 1350 ("Filtering content on the Internet was already a known
concept[. But,] the patent describes how its particular arrangement of
elements is a technical improvement[.]"). Rather, we find the argued
improvements of anonymity, transaction guarantees, and netting transactions
arise solely from adding an intermediary to a ForEx trade, i.e., regardless of
the intermediary's technical implementation.
Appellants further argue, in view of McRO, Inc. v. Bandai Namco
Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016), and Trading
Techs. Int'!, Inc. v. CQG, INC, 675 F. App'x 1001 (Fed. Cir. 2017)
13
Appeal2017-010540
Application 11/590,540
(unreported), the claimed method improves the "way" computers operate
and is thus not directed to an abstract idea. Reply Br. 2-5. We are
unpersuaded because the claimed method improves a contractual "way" of
operation (by adding intermediary via novation). The inventions of McRO
and Trading Techs. improved a technical "way" of operation-that is,
improved a computer's processing as opposed to the information
processed. See McRO, 837 F.3d at 1313 (improved a display's
synchronizing of two features); Trading Techs., 675 F. App'x at 1001
(improved a display's structuring of a graphic interface). The Federal
Circuit has similarly distinguished McRO from an at-issue claim, stating:
The claims in McRO were directed to the creation of something
physical-namely, the display of "lip synchronization and
facial expressions" of animated characters on screens for
viewing by human eyes. Id. at 1313. The claimed
improvement was to how the physical display operated ( to
produce better quality images), unlike (what is present here) a
claimed improvement in a mathematical technique with no
improved display mechanism.
SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1167 (Fed. Cir. 2018)
(emphasis added). Appellants' argued advances are, similarly (see above
emphasis), a "claimed improvement in a [trading] technique with no
improved [technical] mechanism." Id.
Appellants also argue that a "lack of prior art" indicates the claimed
invention recites significantly more than a fundamental economic practice
and its implementation by conventional means. App. Br. 6. It is true that
"pragmatic analysis of [35 U.S.C.] § 101 is facilitated by considerations
analogous to those of§§ 102 and 103." Internet Patents Corp. v. Active
Network, Inc., 790 F.3d 1343, 1347 (Fed. Cir. 2015). However, the search
14
Appeal2017-010540
Application 11/590,540
for an inventive concept ("significantly more") must ensure a claim "in
practice amounts to significantly more than . .. the ineligible concept itself."
Alice, 573 U.S. at 217-18 (brackets omitted; emphasis added) (quoting
Mayo, 566 U.S. at 72-73). For reasons discussed above, any novelty of
claim 1 lies strictly within the recited abstract ideas and thus does not
concern "more than ... the ineligible concept itself' (id.).
Conclusion
For the foregoing reasons, we sustain the Examiner's 35 U.S.C. § 101
rejection of claims 1, 2, 4--7, 23, 24, and 26-29 falling therewith.
35 U.S.C. § 112, SECOND PARAGRAPH, REJECTION OF
CLAIMS 1, 2, 4--7, 23, 24, AND 26-29
Claims 1, 4--7, 23, 24, and 26-29 are rejected as indefinite. 3
Final Act. 3. The Examiner states that all claims "are replete with issues,"
and makes specific findings with respect to claims 1, 4, and 5. Ans. 3.
Appellants argue that the Examiner's rejection of claims 1, 4--7, 23, 24 and
26-29 is in error and Appellants present arguments for each of the
Examiner's specific findings, as indicated below. App. Br. 10-13. For the
ensuing reasons, we are persuaded that the Examiner's rejection of the
claims is in error.
Claim 1
Claim 1 recites in disputed part: "initiating performance of the first
transaction between the first entity and the intermediary and initiating
3 The Examiner withdraws the indefinite rejection of claim 2 in the Advisory
Action, mailed October 14, 2016.
15
Appeal2017-010540
Application 11/590,540
performance of the second transaction between the second entity and the
intermediary" ( emphasis added).
The Examiner finds: "Obviously ['initiating performance'] is less than
actual completion." Final Act. 3. The Examiner further finds: "If the
computer ... becomes active with the intent to process the transaction, then
the processor has initiated performance of the transaction." Ans. 16. In
short, the Examiner finds "initiating performance" is indefinite because it "is
some undefined method step that occurs after matching but before actual
performance (execution)." Final Act. 15.
Appellants argue that the meaning of "initiating performance of [a]
transaction," as claimed, is clear because "one of ordinary skill in the art
would understand that a transaction is something that may occur over time
and may have a beginning and a conclusion, e.g. a futures contract." App.
Br. 11. Appellants also support this argument with dictionary definitions of
"initiate" and "transaction," citations to the Specification, and an explanation
of For Ex transactions. App. Br. 11-12.
We are persuaded by Appellants' argument. Claim 1 specifies that the
requests for the transactions are matched and then, without identifying either
of the requesting entities to each other, the method initiates performance of
the transactions between each of the entities and the intermediary. We find,
therefore, that it is clear that the method matches the requests and then
initiates performance of the requested transactions between each entity and
the intermediary. While the process of initiating the performance may
change based upon the type of transaction, we find that is an issue of
claim breadth and not indefiniteness. See In re Miller, 441 F.2d 689, 693
( CCP A 1971) ("[W]e cannot agree with the board that the omission of the
16
Appeal2017-010540
Application 11/590,540
temperature ... renders the claims indefinite .... [B]readth is not to be
equated with indefiniteness .... ").
Claims 4 and 5
Claim 4 depends from claim 1 and recites: "wherein the matching
further comprises substituting the intermediary for the second entity in the
first transaction and substituting the intermediary for the first entity in the
second transaction." Claim 5 depends from claim 4 and recites: "wherein
the substituting further comprises creating a novation."
The Examiner finds the claims indefinite because base claim 1 does
not recite how the entities are involved in each other's transactions (e.g.,
how the "second entity [is] in the first transaction" (claim 4)) when the
intermediary substitutes for each entity ( claim 4) by novation
( claim 5). Final Act. 3.
Appellants argue that base claim 1 clearly recites each entity's
involvement in the first and second transactions, particularly reciting each
entity as performing half of a bilateral transaction comprising the first and
second transactions. App. Br. 12-13.
Similar to what was discussed above, while the involvement of the
intermediary may be different based on the transaction, we find the
involvement is not indefinite, but rather broad. The claim makes clear that
the intermediary substitutes "for the second entity in the first transaction"
and "for the first entity in the second transaction," which would be
dependent upon the type of transaction. Additionally, though the
substitution and novation could occur under different circumstances
( depending upon the type of transaction), that is not to say the claim must
17
Appeal2017-010540
Application 11/590,540
narrow those circumstances. See Miller, 441 F .2d at 693 ("[B]readth is not
... m e 1mteness . . . . . . d fi . ")
Conclusion
For the foregoing reasons, we do not sustain the Examiner's
35 U.S.C. § 112, second paragraph, rejection of claims 1, 4--7, 23, 24, and
26-29.
35 U.S.C. § 103(a) REJECTIONS
Independent claim 1 recites, in disputed part, a sequence of
"recognizing ... ; combining ... ; [and] eliminating" steps (herein
"netting") that combines the first entity's positions and associated
transactions into a net position/transaction for completion. Independent
claim 23 recites a "netting processor" that performs a similar sequence of
operations. Claims 2 and 4-7 and 24 and 26-29 depend upon claims 1 and
23 (respectively).
The Examiner finds the claimed netting is taught by Fergusson' s
paragraphs 14 and 83-84. Final Act. 6-7. These paragraphs describe a
"display of account items" and "related account items ... [that] may be
combined before the data items are displayed." Fergusson ,r 14. "Example
account items that may be combined include, for example, stock positions in
a particular company .... [T]he account items may be combined by, for
example, summing the stock positions for a particular company, and
outputting a single account item for display." Id. An illustrative display
window of Figure 14 shows net items such as "the number of shares owned,
... the average price of the shares, [and] a total cost for the shares." Id.
18
Appeal2017-010540
Application 11/590,540
Appellants argue the combination of displayed positions (i.e., merely
for purposes of display) in Fergusson does not teach the claimed netting's
elimination of account positions and associated transactions. App. Br. 16.
Specifically, Appellants contend:
Id.
Fergusson merely teaches that related account items may be
combined for the purpose of simplifying a display of those
items but the combined items are not, in fact, removed from the
underlying accounts. Respectfully, this is not what is claimed
by Appellants which instead require that the positions nullified
by the combination be removed from the account for
subsequent completion of the transaction.
The Examiner responds that the claimed netting cannot be understood
as eliminating transactions for account positions because, if that is so, then
the claims recite those transactions as being eliminated yet subsequently
completed. Ans. 21. In tum, the Examiner finds the claimed netting does
not eliminate a position's associated transaction and, consequently, reads on
Fergusson's combining of displayed positions into a single display item
summarizing those positions. Id.
We are persuaded by Appellants' argument. Claim 1 recites in the
most relevant part of the netting limitations: "eliminating the recognized first
position, the second position or combinations thereof, along with the
associated transactions, that are nullified by the combining; whereby fewer
positions remain in the first account for subsequent completion of the
associated transactions." We interpret this to mean that one or more
positions and associated transactions are nullified by the claimed netting,
such that fewer positions and associated transactions remain for completion.
This interpretation is not only consistent with the plain meaning of "fewer
19
Appeal2017-010540
Application 11/590,540
positions remain ... for subsequent completion" ( claim 1 ), but also
reinforced by Specification disclosures such as: "netting is provided which
allows various FX positions to be netted together for settlement rather than
separately settled" (Spec. ,r 55); "netting may ... eliminate a particular
obligation associated with a position" (id. ,r 78); and "comb[in Jing those
obligation[ s] to create a net obligation/position" (id. ,r 83).
Because the Examiner fails to show that Fergusson teaches the
claimed netting of positions that reduces associated transactions, we are
persuaded of error. The additional reference (Balson) is not cited to teach or
suggest the disputed limitation and we will not engage in any inquiry as to
whether Balson cures the noted deficiency. Accordingly, we do not sustain
the Examiner's 35 U.S.C. § 103(a) rejections of claims 1, 2, 4--7, 23, 24, and
26-29.
20
Appeal2017-010540
Application 11/590,540
DECISION
We affirm the rejection of claims 1, 2, 4--7, 23, 24, and 26-29 under
35 U.S.C. § 101.
We reverse the rejection of claims 1, 2, 4--7, 23, 24, and 26-29 under
35 U.S.C. § 112, second paragraph.
We reverse the rejections of claims 1, 2, 4--7, 23, 24, and 26-29 under
35 U.S.C. § 103(a).
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv).
AFFIRMED
21