Ex Parte Cottle

Patent Trial and Appeal Board

Oct 23, 2017

13803228 (P.T.A.B. Oct. 23, 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.
13/803,228 03/14/2013 Charles Cottle 1949-13 CON 3003
106094 7590 10/25/2017
Farber LLC c/o CDFS
445 Broad Hollow Road, Suite 420
Melville, NY 11747
EXAMINER
POLLOCK, GREGORY A
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
10/25/2017 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):
docket @ cdfslaw. com
tgiordano@cdfslaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte CHARLES COTTLE
Appeal 2016-0040001
Application 13/803,22 82
Technology Center 3600
Before MURRIEL E. CRAWFORD, MATTHEW S. MEYERS, and
ROBERT J. SILVERMAN, Administrative Patent Judges.
MEYERS, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant appeals under 35 U.S.C. § 134(a) from the Examiner’s
Final Rejection of claims 132, 137, 139, 147, 152, and 154. We have
jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 Our Decision references Appellant’s Appeal Brief (“Br.,” filed
August 10, 2015), the Examiner’s Answer (“Ans.,” mailed November 25,
2015), and Final Office Action (“Final Act.,” mailed April 9, 2015).
2 Appellant identifies “the inventor, Mr. Charles Cottle” as the real party in
interest (Br. 2).
Appeal 2016-004000
Application 13/803,228
CLAIMED INVENTION
Appellant’s claims are “directed generally to an apparatus, method,
and system of finance, and more particularly, to an apparatus, method and
system to establish versatile financial mechanisms from a complex of other
instruments” (Spec. 11).
Claims 132 and 147 are the independent claims on appeal. Claim 132
reproduced below, with added bracketed notations, is illustrative of the
subject matter on appeal:
132. A computer-implemented method for assembling
and completing a versatile financial transaction comprising
financial instrument transactions, the method comprising:
[a] receiving, via a network interface in operable
communication with a processor and a trade executing entity,
market data relating to one or more financial instrument
transactions, the market data comprising at least one of a price, a
financial instrument name, an exchange, or a financial instrument
identifier, and displaying the market data with a user interface
application executing on a processor;
[b] storing, in a database application, instrument profile
data relating to one or more financial instruments which define
one or more versatile financial transactions, the instrument
profile data comprising at least one of a versatile instrument
name, a financial instrument name, or a financial instrument
transaction identifier;
[c] assembling, by a transaction generator executing on a
processor, a proposed versatile financial transaction having a
plurality of subcomponent financial instrument transactions
based at least in part upon a selected account holding, a[n]
account price, a financial instrument identifier, or a market data
financial instrument identifier associated with a financial
instrument identifier, wherein the proposed versatile financial
transaction modifies a risk reward profile of an underlying
account holding selected from the group consisting of stocks,
bonds, futures, commodities, currencies, and indexes, where the
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risk reward profile is a risk, reward, or breakeven slope of a
position based on price of the underlying account holding;
[d] displaying, by a user-interface software application
executing on a processor, the proposed versatile financial
transaction; and
[e] transmitting to the trade executing entity instructions
to execute the plurality of subcomponent financial instrument
transactions of the proposed versatile financial transaction as a
package, wherein the versatile financial transaction package is a
slingshot hedge providing a slingshot risk reward profile.
REJECTION
Claims 132, 137, 139, 147, 152, and 154 are rejected under 35 U.S.C.
§ 101 as directed to non-statutory subject matter.
ANALYSIS
Appellant argues claims 132, 137, 139, 147, 152, and 154 as a group
(see Br. 7—10). We select independent claim 132 as representative. Claims
137, 139, 147, 152, and 154 stand or fall with independent claim 1. See 37
C.F.R. § 41.37(c)(l)(iv).
Under 35 U.S.C. § 101, an invention is patent-eligible if it claims a
“new and useful process, machine, manufacture, or composition of matter.”
35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101
to include an implicit exception: “[ljaws of nature, natural phenomena, and
abstract ideas” are not patentable. See, e.g., Alice Corp. Pty Ltd. v. CLS
Banklnt’l, 134 S. Ct. 2347, 2354 (2014).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories., Inc., 132 S. Ct. 1289, 1300 (2012), “for distinguishing patents
that claim laws of nature, natural phenomena, and abstract ideas from those
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that claim patent-eligible applications of those concepts.” Alice Corp., 134
S. Ct. at 2355. The first step in that analysis is to “determine whether the
claims at issue are directed to one of those patent-ineligible concepts,” id.,
e.g., to an abstract idea. If the claims are not directed to a patent-ineligible
concept, the inquiry ends. Otherwise, the inquiry proceeds to the second
step where the elements of the claims are considered “individually and ‘as
an ordered combination”’ to determine whether there are additional elements
that “‘transform the nature of the claim’ into a patent-eligible application.”
Alice Corp., 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1297).
The Court acknowledged in Mayo, that “all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena,
or abstract ideas.” Mayo, 132 S. Ct. at 1293. We, therefore, look to whether
the claims focus on a specific means or method that improves the relevant
technology or are instead directed to a result or effect that itself is the
abstract idea and merely invoke generic processes and machinery.
See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).
Here, in rejecting claims 132, 137, 139, 147, 152, and 154, the
Examiner finds the claims are “directed to the abstract idea of a fundamental
economic practice” (Final Act. 3). The Examiner also finds that independent
claim 132 “employs mathematical relationships to manipulate existing
information to generate addition information in the form of a packaged
financial transaction” (Ans. 5; see also Final Act. 6), and explains
[t]his idea is similar to the basic concept of a mathematical
procedure for converting one form of numerical representation
to another, organizing information through mathematical
correlations, using categories to organize, store, and transmit
information, comparing new and stored information and using
rules to identity options and/or mitigating settlement risk or
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hedging which are fundamental economic practices all of which
have been found by the courts to be an abstract idea.
(Ans. 5; see also Final Act. 6).
Appellant argues that the Examiner’s rejection is improper because
the Examiner “has not even precisely identified what allegedly abstract idea
is recited in the claims on appeal” (Br. 7). Appellant’s argument is not
persuasive.
By way of background, the Examiner finds the claims are “directed to
a method of assembling and completing a versatile financial transaction”
(Final Act. 5). The Examiner further finds
[t]he claims require the additional limitations of a computer
connected to a network or [Ijnternet. These generic computer
components are claimed to perform their basic functions of
storing, retrieving, and processing data though the program that
enables the assembling and transmission of a versatile financial
transaction as a package.
(Id. at 6). And, after considering what the claims are directed to, the
Examiner finds independent claim 132 “is similar to the basic concept of
manipulating information using mathematical relationships and/or the
creation of a financial transaction which is a fundamental economic practice
both of which have been found by the courts to be an abstract idea” (id. at
6). Thus, we determine initially the Examiner has adequately articulated
what abstract idea the claims are directed to.
Appellant further argues that the Examiner fails to satisfy the first step
of the Alice analysis, because “[t]he present claims do not recite a
mathematical algorithm; nor do they recite a fundamental economic or
longstanding commercial practice” (Br. 8). However, we agree with the
Examiner that independent claim 132 is directed to a fundamental economic
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practice, in that it is analogous to the concept of intermediated settlement in
Alice, and the concept of risk hedging in Bilski v. Kappos, 561 U.S. 593
(2010), and, thus, is an abstract idea beyond the scope of § 101. See Alice
Corp., 134 S. Ct. at 2356; Bilski, 561 U.S. at 611.
Appellant also argues that the Examiner fails to satisfy the second step
of the Alice analysis, because “[t]he present claims recite features that are
not ‘well-understood, routine, and conventional in the field’” (Br. 9), as
evidenced “by the fact that the Examiner has already determined that the
recited process is novel and nonobvious over the prior art” {id. at 8).
However, to the extent Appellant argues that the claims necessarily contain
an “inventive concept” based on their alleged novelty and non-obviousness
over the cited references, Appellant misapprehends the controlling
precedent. That is, although the second step in the Alice/Mayo framework is
termed a search for an “inventive concept,” the analysis is not an evaluation
of novelty or non-obviousness, but rather, a search for “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. A novel and nonobvious claim
directed to a purely abstract idea is, nonetheless, patent-ineligible. See
Mayo, 132 S. Ct. at 1304.
Here, the only claim elements beyond the abstract idea are directed to
generic computer components (see Spec. ]ff[ 4—6), on which the method of
“method for assembling and completing a versatile financial transaction
comprising financial instrument transactions” is performed. And,
considered as an ordered combination, we are unclear as to how these
computer components add anything that is not already present when the
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steps of the method are considered separately. In this regard, Appellant does
not provide adequate evidence or technical reasoning that independent claim
132 improves some existing technological process or solves some
technological problem in conventional industry practice. Versata Dev. Grp.,
Inc. v. SAP Am., Inc., 793 F.3d 1306, 1334 (Fed. Cir. 2015), cert, denied,
136 S. Ct. 2510, 195 L. Ed. 2d 841 (2016) (finding that the “claims recit[ed]
a commonplace business method aimed at processing business information
despite being applied on a general purpose computer.”); see also Alice, 134
S. Ct. at 2359.
Appellant further argues that “the present claims will not ‘tie up’ the
allegedly excepted subject matter and preempt others from using that subject
matter” (Br. 10) because “the present claims add unconventional steps that
confine the claim to a particular useful application, or other meaningful
applications” (id.). However, Appellant’s preemption argument does not
alter our § 101 analysis. Preemption concerns are fully addressed and made
moot where a patent’s claims are deemed to disclose patent ineligible subject
matter under the two-part framework described in Mayo and Alice. Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
“While preemption may signal patent ineligible matter, the absence of
complete preemption does not demonstrate patent eligibility.” Id.
In view of the foregoing, we sustain the Examiner’s rejection under
35 U.S.C. § 101 of independent claim 132, and claims 137, 139, 147, 152,
and 154, which fall with independent claim 132.
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DECISION
The Examiner’s rejection of claims 132, 137, 139, 147, 152, and 154
under 35 U.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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