Ex Parte Boberski et al

Patent Trial and Appeal Board

Oct 12, 2017

13707185 (P.T.A.B. Oct. 12, 2017)

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.
4672-12016AUS 1393
EXAMINER
POINVIL, FRANTZY
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
13/707,185 12/06/2012
12684 7590 10/16/2017
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
David Boberski
10/16/2017 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 DAVID BOBERSKI, JOHN WILEY, JOHN NYHOFF,
JASON SILVERSTEIN, and JOHN LABUSZEWSKI
Appeal 2016-002929
Application 13/707,1851
Technology Center 3600
Before CYNTHIA L. MURPHY, BRUCE T. WIEDER, and
TARA L. HUTCHINGS, Administrative Patent Judges.
WIEDER, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35U.S.C. § 134 from the
Examiner’s final rejection of claims 1, 2, 5—11, 14—16, and 18—20. We have
jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 According to Appellants, the real party in interest is Chicago Mercantile
Exchange Inc. (Appeal Br. 2.)
Appeal 2016-002929
Application 13/707,185
CLAIMED SUBJECT MATTER
Appellants’ claimed invention relates “to price alignment in
connection with financial instruments for which mark-to-market (MTM)
losses are collateralized.” (Spec. 113.)
Claims 1,10, and 16 are the independent claims on appeal. Claim 1 is
illustrative. It recites:
1. A computer implemented method for price alignment, the
method comprising:
receiving order data from first and second computer
devices in communication with an exchange computer system
via a network, the first and second computer devices being
associated with first and second market participants for whom
first and second account records are maintained, respectively, the
first and second account records being maintained in a memory
accessed by the exchange computer system, the order data being
representative of a trade of a financial instrument between the
first and second market participants in which a mark-to-market
loss is incurred and collateralized by the first market participant;
determining, with a processor of the exchange computer
system, an amount of an interest payment from the first market
participant to the second market participant based on the mark-
to-market loss; and
accessing the memory to modify the first and second
account records in accordance with the determined interest
payment amount;
wherein the mark-to-market loss is an aggregate loss since
the trade of the financial instrument such that determining the
interest payment amount comprises:
determining an aggregate change in valuation of the
financial instrument; and
determining the mark-to-market loss based on the
aggregate change in valuation.
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REJECTION
Claims 1, 2, 5—11, 14—16, and 18—20 are rejected under 35 U.S.C.
§ 101 as directed to non-statutory subject matter.
ANALYSIS
In 2014, the Supreme Court decided Alice Corp. Pty. Ltd. v. CIS Bank
Int’l, 134 S. Ct. 2347 (2014). Alice applies a two-part framework, earlier set
out in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66
(2012), “for distinguishing patents that claim laws of nature, natural
phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts.” Alice, 134 S. Ct. at 2355.
Under the two-part framework, it must first be determined if “the
claims at issue are directed to a patent-ineligible concept.” Id. If the claims
are determined to be directed to a patent-ineligible concept, then the second
part of the framework is applied to determine if “the elements of the
claim . . . contain[] an ‘inventive concept’ sufficient to ‘transform’ the
claimed abstract idea into a patent-eligible application.” Id. at 2357 (citing
Mayo, 566 U.S. at 72-73, 79).
With regard to part one of the Alice framework, the Examiner
determines that the claims are directed to “modifying first and second
account records of market participants to reflect determined interest
payments. Such a practice is a fundamental economic and accounting
practice, and thus, the claims include an abstract idea.” (Final Action 2.)
Appellants disagree and argue that “[mjodifying records in connection
with price alignment for a trade in which a mark-to-market loss is
collateralized is not a fundamental economic activity.” (Appeal Br. 5.)
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Appellants further argue that no evidence has been presented to support the
Examiner’s determination that the claims are directed to a fundamental
economic practice. {Id. at 4.)
Under part one of the Alice framework, we “look at the ‘focus of the
claimed advance over the prior art’ to determine if the claim’s ‘character as a
whole’ is directed to excluded subject matter.” Affinity Labs of Texas, LLC
v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) (quoting Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016)).
Thus, although we consider the claim as a whole, the “directed to” inquiry
focuses on the claim’s “character as a whole.”
The Specification provides evidence as to what the invention is
directed. In this case, the Specification discloses that the claimed invention
relates
to price alignment in connection with financial instruments for
which mark-to-market (MTM) losses are collateralized. ... Any
accumulation of unrealized losses is addressed via the price
alignment techniques of the disclosed methods and systems. The
price alignment techniques may . . . include or involve interest
payments designed to match the cash flows that occur in typical
futures contracts.
(Spec. 113.) Claim 1 recites “receiving order data . . . representative of a
trade of a financial instrument,” “determining ... an amount of an interest
payment. . . based on the mark-to-market loss,” and “modify[ing] . . .
account records in accordance with the determined interest payment
amount.” Claim 1 further recites elements of an algorithm for “determining
the interest payment amount,” i.e., “determining an aggregate change in
valuation of the financial instrument^ and determining the mark-to-market
loss based on the aggregate change.” In view of the above, we agree with
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the Examiner that claim 1 is directed to determining interest payments and
“modifying first and second account records of market participants to reflect
[the] determined interest payments.” (See Final Action 2.)
The Federal Circuit has recognized that a process, like that of claim 1,
that employs mathematical algorithms to manipulate existing
information to generate additional information is not patent
eligible. “If a claim is directed essentially to a method of
calculating, using a mathematical formula, even if the solution is
for a specific purpose, the claimed method is nonstatutory.”
Parker v. Flook, 437 U.S. 584, 595, 98 S. Ct. 2522, 57 F.Ed.2d
451 (1978) (internal quotations omitted).
See Digitech Image Techs, LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344,
1351 (Fed. Cir. 2014). The Federal Circuit has also recognized that claims
directed to a method of managing a life insurance policy, including the steps
of “calculating fee units,” “calculating surrender value,” “determining
investment value,” and “calculating [and storing] a policy value ... for the
current day,” are directed to an abstract idea. Bancorp. Servs., L.L.C. v. Sun
LifeAssur. Co. of Canada (U.S.), 687 F.3d 1266, 1270-71, 1277 (Fed. Cir.
2012).
In short, the focus of claim 1, as a whole, is on determining interest
payments and modifying account records to reflect the payments. We are
not persuaded of a meaningful distinction in the level of abstraction between
the concept of calculating and storing a policy value in Bancorp and the
concept of determining interest payments and reflecting such payments in
account records at issue here. Therefore we are not persuaded that the
Examiner erred in determining that claim 1 is directed to an abstract idea.
Appellants also argue that “[t]he present claims do not attempt to
preempt all methods or systems for modifying first and second records of
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market participants to reflect determined interest payments.” (Appeal Br. 6.)
We are not persuaded of error. Preemption is not a separate test.
To be clear, the proper focus is not preemption per se, for some
measure of preemption is intrinsic in the statutory right granted
with every patent to exclude competitors, for a limited time, from
practicing the claimed invention. See 35 U.S.C. § 154. Rather,
the animating concern is that claims should not be coextensive
with a natural law, natural phenomenon, or abstract idea; a
patent-eligible claim must include one or more substantive
limitations that, in the words of the Supreme Court, add
“significantly more” to the basic principle, with the result that
the claim covers significantly less. See Mayo 132 S. Ct. at 1294
[566 U.S. at 72-73],
CLS Bank Inti v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1281 (Fed. Cir.
2013), aff’d, 134 S. Ct. 2347 (2014). Moreover, “[w]here a patent’s claims
are deemed only to disclose patent ineligible subject matter under the Mayo
framework, as they are in this case, preemption concerns are fully addressed
and made moot.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d
1371, 1379 (Fed. Cir. 2015). In other words, “preemption may signal patent
ineligible subject matter, [but] the absence of complete preemption does not
demonstrate patent eligibility.” Id.
Appellants further argue that “[n]o evidence is provided in support of
the conclusion that the present claims are directed to a fundamental
economic practice. (Appeal Br. 4.) We do not find this argument persuasive
of reversible error. There is no requirement that examiners provide
evidentiary support in every case before a conclusion can be made that a
claim is directed to an abstract idea.
The courts consider the determination of whether a claim is
eligible (which involves identifying whether an exception such
as an abstract idea is being claimed) to be a question of law.
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Accordingly, courts do not rely on evidence that a claimed
concept is a judicial exception, and in most cases resolve the
ultimate legal conclusion on eligibility without making any
factual findings.
Para. IV “July 2015 Update: Subject Matter Eligibility” to 2014 Interim
Guidance on Subject Matter Eligibility (2014 IEG), 79 Fed. Reg. 74618
(Dec. 16, 2014) (footnote omitted).
Part two of the Alice framework has been described “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, 134 S. Ct.
at 2355 (citing Mayo, 566 U.S. at 72—73).
The introduction of a computer into the claims does not alter the
analysis at 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 “implemen[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 featur[e]” that provides any
“practical assurance that the process is more than a drafting effort
designed to monopolize the [abstract idea] itself.”
Id. at 2358 (citations omitted).
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“[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.” Id. at 2359. They do not. Claim 1 relates to a computer
implemented method for price alignment by receiving data, analyzing data
(to determine the amount of an interest payment), and modifying account
records (in accordance with the determined interest payment amounts).
Nonetheless, Appellants argue that “[technological benefits are
provided to the specific machine recited in the claims.” (Appeal Br. 6.)
Specifically, Appellants argue that
[a]s explained in paragraph [0046], both increased processing
speed and lower data storage requirements may be achieved
because the account records need only include the aggregate state
of the trade. Please see paragraph [0048] for further
technological benefits involving the processing demands placed
upon the exchange computer system in connection with risk
management.
{Id.)
Paragraph 46 discloses that
a database or other memory in which the account records are
maintained may include only the aggregate or current state of the
trade. A complete historical record for the trade may instead be
maintained elsewhere, which may lead to increased processing
speed and/or reduced hardware requirements (e.g., lower data
storage requirements for frequently accessed memories).
(Spec. 146.) Claim 1, however, does not recite, e.g., maintaining an
historical record elsewhere or maintaining only aggregate or current state of
the trade data. Appellants’ argument is not commensurate with the scope of
the claim.
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Paragraph 48 discloses that “[t]he processing demands presented by
the risk management module 134 may be lowered as a result of
implementing the disclosed interest payment techniques. For example, the
interest payments may reduce or eliminate imbalances in cross-margining
efforts between products with different types of margin methodologies.”
(Id. 148.) Appellants, however, do not persuasively argue why the steps of
claim 1 produce a technological improvement or which steps produce the
alleged technological improvement. (See Answer 6.)
Therefore, we are not persuaded that the Examiner erred in
determining that “[t]he limitations are merely instructions to implement the
abstract idea on a processor and require no more than a generic processor to
perform generic processor functions that are well-understood, routine and
conventional activities previously known to the industry.” (Final Action 3.)
Taking the claim elements separately, the function performed by the
computer at each step is purely conventional. Using a computer to receive
data, analyze data (to determine interest payments), and modify stored data
(i.e., modify account records) are basic computer functions. Moreover, the
Specification discloses that the invention can be implemented using generic
computer components. (See, e.g., Spec. 1 68.) In short, each step does no
more than require a generic computer to perform generic computer
functions.
Considered as an ordered combination, the computer components of
Appellants’ method add nothing that is not already present when the steps
are considered separately. The claims do not, for example, purport to
improve the functioning of the computer itself. Nor do they effect an
improvement in any other technology or technical field. Instead, the claims
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at issue amount to nothing significantly more than an instruction to apply the
abstract idea of receiving data, analyzing data (to determine interest
payments), and modifying account records using some unspecified, generic
computer. That is not enough to transform an abstract idea into a patent-
eligible invention. Alice, 134 S. Ct. at 2360.
In view of the above, we are not persuaded that that Examiner erred in
rejecting claim 1 under § 101. Claims 2, 5—11, 14—16, and 18—20 are not
separately argued and fall with claim 1. See 37 C.F.R. § 41.37(c)(l)(iv).
DECISION
The Examiner’s rejection of claims 1, 2, 5—11, 14—16, and 18—20
under 35U.S.C. § 101 is affirmed.
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
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