Ex Parte Studnitzer et alDownload PDFPatent Trial and Appeal BoardSep 25, 201814074666 (P.T.A.B. Sep. 25, 2018) Copy Citation UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. FILING DATE 14/074,666 11/07/2013 12684 7590 09/27/2018 Lempia Summerfield Katz LLC/CME 20 South Clark Street Suite 600 Chicago, IL 60603 FIRST NAMED INVENTOR Ari Studnitzer 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. 4672-13013AUS 7645 EXAMINER GAW,MARKH ART UNIT PAPER NUMBER 3692 NOTIFICATION DATE DELIVERY MODE 09/27/2018 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 ARI STUDNITZER, ZACHARY BONIG, RYAN EA VY, and FRANK KMIEC Appeal2017-006617 Application 14/074,666 1 Technology Center 3600 Before, JOSEPH A. FISCHETTI, MATTHEW S. MEYERS, and ROBERT J. SILVERMAN, Administrative Patent Judges. FISCHETTI, Administrative Patent Judge. DECISION ON APPEAL 1 Appellants identify Chicago Mercantile Exchange Inc. as the real party in interest. Appeal Br. 2. Appeal2017-006617 Application 14/074,666 STATEMENT OF THE CASE Appellants seek our review under 35 U.S.C. § 134(a) of the Examiner's final rejection of claims 1-22. We have jurisdiction under 35 U.S.C. § 6(b). SUMMARY OF DECISION We AFFIRM. THE INVENTION Appellants claim a financial instrument trading system and method. (Spec. ,r 1 ). Claim 1 reproduced below, is representative of the subject matter on appeal. 1. A system for managing communication of a plurality of sequentially transmitted financial data messages to a plurality of market participants via a network, each of the plurality of sequentially transmitted financial data messages comprising data indicative of a change in state of an electronic marketplace for one or more financial products, the system comprising: a first logic hardware component operative to receive preference data from at least one of the plurality of market participants and store the preference data in the memory in association with data representative of the market participant from which it was received, the preference data specifying one or more modifications to be made to each of the plurality of sequentially transmitted financial data messages prior to transmission to the associated market participant via the network; 2 Appeal2017-006617 Application 14/074,666 a second logic hardware component operative to, based on a change of state in the electronic marketplace, generate a financial data message comprising content representative thereof; a third logic hardware component operative to receive the financial data message and generate, for each market participant having preference data stored in association therewith in the memory, a modified financial data message based on the generated financial data message modified in accordance with the stored associated preference data for the associated market participant, both the generated financial data message and the modified financial data message comprising content representative of the change of state in the electronic marketplace which caused the generated financial data message to be generated; and a fourth logic hardware component operative to transmit, via the network, each modified financial data message to the associated market participant for which the modified data message was generated, and transmit the unmodified generated financial data message to the others of the plurality of market participants who did not have preference data stored in the memory in association therewith, all of the plurality of market participants thereby receiving content representative of the change of state in the electronic marketplace which caused the generated financial data message to be generated. THE REJECTION The Examiner relies upon the following as evidence of unpatentability: Weber et al. Jenkins US 2004/0186803 Al US 2009/0171723 Al 3 Sept. 23, 2004 July 2, 2009 Appeal2017-006617 Application 14/074,666 Erlanger US 2011/0047098 Al Feb.24,2001 Oklahoma State University ("Logic+ Components" http://www.okstate.edu/sas/v8/sashtml/qsim/chap2/sect4.htm. SAS Institute Inc. Jan 8, 2007 ("OSU"). Wikipedia, "Central processing unit", http://en.wikipedia.org/wiki/Central_processing_unit. Feb 27, 2009. ("CPU"). The following rejections are before us for review. Claims 1-22 are rejected under 35 U.S.C. § 101 as being directed to non-statutory subject matter. Claims 1-22 stand rejected under 35 U.S.C. § 112(a) as being indefinite. Claim 1 stands rejected under 35 U.S.C. § 103 as being unpatentable over Weber, OSU, and CPU. Claims 2-6, 8, 10-16, 18 and 20-22 stand rejected under 35 U.S.C. § 103 as being unpatentable over Weber in view of CPU. Claims 7 and 17 stand rejected under 35 U.S.C. § 103 as being unpatentable over Weber, CPU, and further in view Jenkins. Claims 9 and 19 stand rejected under 35 U.S.C. § 103 as being unpatentable over Weber in view of CPU and further in view of Erlanger. 4 Appeal2017-006617 Application 14/074,666 FINDINGS OF FACT We adopt the Examiner's findings as set forth on pages 2-5 of the Final Action directed to the rejection made under 35 U.S.C. § 35 U.S.C. § 101. ANALYSIS 35 U.S.C. § 112(a) REJECTION The Examiner rejected claims 1-22 under 35 U.S.C. § 112(a) or pre- AIA 35 U.S.C. § 112, first paragraph, as failing to comply with the written description requirement. Specifically, the Examiner found that claim 21 2 includes the following elements: "sequentially transmitted []financial data".. . These elements appear to have no support in the original abstract, specification or drawings." (Final Act. 5). In response, Appellants offer several instances in the Specification which describe sequential transmission of data messages. (Appeal Br. 15- 18). We agree with Appellants. In particular, we find that the Specification at paragraph 168 describing, "customizations are applied, as described below, at the time the market data is generated to generate both the generic/standard market data messages and customized market data 2 Although the Examiner cites to claim 21 as the example claim which recites the problematic language (Final Act. 5), we note that all independent claims 1, 2, 12 and 22 contain same language which the Examiner finds problematic with claim 21. 5 Appeal2017-006617 Application 14/074,666 messages", shows Appellants had possession of the claimed "sequentially transmitted []financial data" because plural customizations would require data to be generated in time which would by definition be sequential. See Lockwood v. American Airlines, Inc., 107 F.3d 1565, 1572, (Fed. Cir. 1997). 35 U.S.C. § 103 REJECTION Each of independent claims 1, 2, 12, and 22, requires in one form or another, transmit, via the network, each modified financial data message to the associated market participant for which the modified data message was generated, and transmit the unmodified generated financial data message to the others of the plurality of market participants who did not have preference data stored in the memory in association therewith, all of the plurality of market participants thereby receiving content representative of the change of state in the electronic marketplace which caused the generated financial data message to be generated. The Examiner found that Weber discloses this limitation at paragraph 42. (Final Act. 8). Our review of Weber at paragraph 42 reveals a "price feed 143 provides pricing information ( e.g., bid and ask prices) for a set of securities that preferably includes each security in the fund portfolio." Here, Weber does not disclose tailoring a data message between participants who want a modified message and those who do not. 6 Appeal2017-006617 Application 14/074,666 The Examiner also cites to paragraphs 13 and 14 of Weber to meet the "receiving of preference data" limitation. (Final Act. 7). But, our review of Weber, at these paragraphs, finds Weber only discloses "each fund sensitivity coefficient specifies the exposure of the fund to one of the risk factors, and using computer means to create a proxy portfolio having substantially the same sensitivity coefficients as the fund." Weber ,r 13. The coefficients thus are common only to an individual's specific proxy portfolio and not a marketplace, which does not meet the claimed "change in state of an electronic marketplace" for one or more financial products. Paragraph 20 of Weber, discloses "a graphical user interface, including a graphical dial, slide bar, or other graphical indicator for adjusting user inputs." But, these inputs only relate to "factors to be used in the model" (Weber i-f20), and not to the change of state in the electronic marketplace which caused the generated financial data message to be generated. It is not apparent, and the Examiner does not show how preferences to set a model configuration would be used to modify messages relating to an electronic marketplace. Accordingly, we will not sustain the rejections of independent claims 1, 2, 12, and 22 under 35 U.S.C. § 103(a). Since claims 3-11, 13-21 depend from one of claims 2 and 12, and since none the additional art relied in the further in view of rejections remedies the deficiency above, the rejection of claims 3-11, and 13-21 likewise cannot be sustained. 7 Appeal2017-006617 Application 14/074,666 35 U.S.C. § 101 REJECTION We will sustain the rejection of claims 1-22 under 35 U.S.C. § 101. 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. Pty. Ltd. v. CLS Banklnt'l, 134 S. Ct. 2347, 2355 (2014) (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72-73 (2012)). To perform this test, we must first determine whether the claims at issue are directed to a patent-ineligible concept. Although the Court in Alice made a finding as to what the claims were directed to, we determine that the plain language of the claims and the Specification provide enough information to inform one as to what they are directed. 8 Appeal2017-006617 Application 14/074,666 The representative claim 1 results in3: [A] fourth logic hardware component operative to transmit, via the network, each modified financial data message to the associated market participant for which the modified data message was generated, and transmit the unmodified generated financial data message to the others of the plurality of market participants who did not have preference data stored in the memory in association therewith, all of the plurality of market participants thereby receiving content representative of the change of state in the electronic marketplace which caused the generated financial data message to be generated. The Examiner found that the "claims are directed to an abstract idea of performing financial data modification and transmission." (Final Act. 3). The Examiner also found: The elements of the instant process, when taken in combination, together do not offer substantially more than the sum of the functions of the elements when each is taken alone. That is, the elements involved in the recited process undertake their roles in performance of their activities according to their generic functionalities which are well-understood, routine and conventional. Id. at 3. The Specification states: Typically, the Exchange provides for centralized 'clearing' by which all trades are confirmed and matched, and open positions are settled each day until expired ( such as in the case of an option), offset or delivered. Matching, which is a function typically performed by the Exchange, is a process, for a given 3 Our analysis is made based on considering the claims as a whole, but for purposes of this discussion, we note the result phrase of the independent claim to point to what the claims are directed to. 9 Appeal2017-006617 Application 14/074,666 order which specifies a desire to buy or sell a quantity of a particular instrument at a particular price, of seeking/identifying one or more wholly or partially, with respect to quantity, satisfying counter orders thereto, e.g. a sell counter to an order to buy, or vice versa, for the same instrument at the same, or sometimes better, price (but not necessarily the same quantity), which are then paired for execution to complete a trade between the respective market participants (via the Exchange) and at least partially satisfy the desired quantity of one or both of the order and/or the counter order, with any residual unsatisfied quantity left to await another suitable counter order, referred to as 'resting.' Spec. 2. The Specification also states: Accordingly, the operators of electronic trading systems, alone or in conjunction with, or at the direction of, regulatory or industry organizations, typically publish or otherwise promulgate rules or regulations, referred to as business or operating rules, which govern the operation of the system. These rules define how, for example, multiple transactions are processed by the system where those transactions have relationships or dependencies there between which may affect the result of such processing. Such business rules may include, for example, order allocation rules, i.e. rules which dictate which of multiple competing resting orders will be matched with a particular incoming order counter thereto having insufficient quantity to fill all of the suitable resting orders. For example, under a first-in-first-out methodology, the first order, of the competing resting orders, that was received by the electronic trading system will be matched with the incoming counter-order and filled to the extent possible by the available quantity, with any residual quantity of the incoming counter order then being allocated to the next received suitable competing resting order and so on until the available quantity of 10 Appeal2017-006617 Application 14/074,666 the incoming counter order is exhausted. However, additional or alternative matching/allocation rules may be implemented as well, for example to ensure fair and equal access, improve trading opportunities, etc., by allocating, such as proportionally, the available quantity of the incoming counter order among all, or a subset, of the competing resting orders until the available quantity is exhausted. Spec. ,r 9. The Specification describes, [ f]inancial messages communicated to the electronic trading system, also referred to as "inbound" messages, may include request messages, such as trader orders, order modifications, order cancellations and other transaction requests, as well as other message types. Spec. ,r 64. It follows from prior Supreme Court cases, and Gottschalk v. Benson, 409 U.S. 63 (1972), in particular, that the claims at issue here are directed to causing a message to be generated and transmitted to market participants in the preferred format of the participant concerning the change of state in an electronic marketplace. Causing a message to be generated and transmitted to market participants in the preferred format of the participant concerning the change of state in an electronic marketplace is a fundamental economic principle because understanding market movement in the most understandable way possible is the bedrock of investing. The patent- ineligible end of the spectrum includes fundamental economic practices, Alice, 134 S. Ct. at 2357. 11 Appeal2017-006617 Application 14/074,666 Also, we also agree with the Examiner that many of the steps in representative claim 1, such as, "receive preference data from at least one of the plurality of market participants and store the preference data in the memory in association with data representative of the market participant from which it was received," and "based on a change of state in the electronic marketplace, generat[ing] a financial data message comprising content representative thereof," constitute "analyzing information by steps people go through in their minds, or by mathematical algorithms, without more, as essentially mental processes within the abstract-idea category." Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016); see also buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) ( claims directed to certain arrangements involving contractual relations are directed to abstract ideas). Thus, causing a message to be generated and transmitted to market participants in the preferred format of the participant concerning the change of state in an electronic marketplace is an "abstract idea" beyond the scope of § 101. As in Alice, we need not labor to delimit the precise contours of the "abstract ideas" category in this case. It is enough to recognize that there is no meaningful distinction in the level of abstraction between the concept of an intermediated settlement, as discussed in Alice, and the concept of causing a message to be generated and transmitted to market participants in the preferred format of the participant concerning the change of state in an electronic marketplace factor, at issue here. Both are squarely within the 12 Appeal2017-006617 Application 14/074,666 realm of "abstract ideas" as the Court has used that term. That the claims do not preempt all forms of the abstraction or may be limited to market alerts, do not make them any less abstract. See OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015) (citations omitted) ("And that the claims do not preempt all price optimization or may be limited to price optimization in the e-commerce setting do not make them any less abstract."). Claim 1, unlike the claims found non-abstract in prior cases, uses generic computer technology to perform data reception, transmission, calculation and linkage, 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 (Fed. Cir. 2016) (finding claims not abstract because they "focused on a specific asserted improvement in computer animation"). The introduction of a computer into the claims does not alter the analysis at Alice 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 pre-emption 13 Appeal2017-006617 Application 14/074,666 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." Alice, at 2358 (alterations in original) (internal citations omitted). Instead, "the 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. Taking the claim elements individually, the function performed by the computer at each step of the process is purely conventional. Using a computer to retrieve, select, and apply decision criteria to data and modify the data as a result amounts to electronic data query, computation and retrieval----one of the most basic functions of a computer. All of these computer functions are well-understood, routine, conventional activities previously known to the trading industry. See Elec. Power Grp., 830 F.3d 1354; 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"). In short, each step does no more than require a generic computer 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 14 Appeal2017-006617 Application 14/074,666 other than abstract." SAP Am. Inc. v. Investpic, LLC, 890 F.3d 1016, 1022 (Fed. Cir. 2018) (internal citation omitted). 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 sequence of data reception-analysis- access/ display is equally generic and conventional or otherwise held to be abstract. 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) (holding that sequence of data retrieval, analysis, modification, generation, display, and transmission was abstract), Two-Way Media Ltd. v. Comcast Cable Commc 'ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017) (holding sequence of processing, routing, controlling, and monitoring was abstract). The ordering of the steps is, therefore, ordinary and conventional. 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. The Specification spells out different generic equipment and parameters that might be applied using this concept and the particular steps such conventional processing would entail based on the concept of information access under different scenarios. See, e.g., Spec. ,r 108, ( disclosing generically how "electronic trading system 100 implements numerous functions/functional modules each of which, as will be described, 15 Appeal2017-006617 Application 14/074,666 may be implemented in software, hardware or a combination thereof, as single standalone component or combination of interconnected components or in combination with another function/functional module," perform conventional functions.) Thus, the claims at issue amount to nothing significantly more than instructions to apply the abstract idea of information access and computation using some unspecified, generic computer. Under our precedents, that is not enough to transform an abstract idea into a patent- eligible invention. See Alice, at 2360. We have reviewed all the arguments (Appeal Br. 6-14; Reply Br. 2- 8) Appellants have submitted concerning the patent eligibility of the claims before us that stand rejected under 35 U.S.C. § 101. We find that our analysis above substantially covers the substance of all the arguments which have been made. But, for purposes of completeness, we will address various specific contentions in order to make individual rebuttals of same. Appellants argue: The claims represent a specific improvement to the technology of managing communications concerning changes in state of an electronic marketplace and ensuring that, while all market participants receive the same market information, particular participant receive that same information in a particular form according to their preferences, and an improvement to the technical field surrounding such communications concerning communicating information in an electronic transaction processing system. Appeal Br. 8. 16 Appeal2017-006617 Application 14/074,666 We disagree with Appellants. The question is whether the claims as a whole "focus on a specific means or method that improves the relevant technology" or are "directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery." McRO, 837 F.3d at 1314 . In this case, claim 1 as a whole is focused on satisfying certain contingencies for the effect of transmitting a "modified financial data message comprising content representative of the change of state in the electronic marketplace." "[A] claim for a new abstract idea is still an abstract idea." See Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016). Appellants argue: [T]he combination of elements in Appellants' claims form a practical application which performs functions which are not merely generic and at least some of the problems solved by Appellants' invention are specifically rooted in technology, specifically in electronic transaction processing systems where data indicative of an event, e.g. a change in state, is communicated to multiple recipients but where some recipients may wish to receive those communications in accordance with particular preferences. (Appeal Br. 10-11). We disagree with Appellants. The Examiner found, and we agree, that "the elements of the instant process, when taken in combination, together do not offer substantially more than the sum of the functions of the elements when each is taken alone." Final Act 3. We find no evidence in 17 Appeal2017-006617 Application 14/074,666 the record suggesting that the claims at issue amount to significantly more than instructions to apply the abstract idea of information access and computation using some unspecified, generic computer. As to Appellants' contention that because the claims form "a practical application" in connection with non-generic functions, we decline to accept this standard and reference instead our findings above based on the Alice two-step analysis. Furthermore, we understand the Examiner, through citation to the July 2015 Update (Answer 7), to rely on prior court decisions finding that certain computer functions are well-understood, routine, and conventional functions. These prior court decisions adequately support this finding to satisfy the requirement to set forth a prima facie case of unpatentability under 35 U.S.C. § 101. Citing to Enfzsh 4 , Appellants further argue, "Software can make non- abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route." (Appeal Br. 12). We disagree with Appellants because "[ s ]tating an abstract idea while adding the words 'apply it with a computer' simply combines those two steps, with the same deficient result." Alice, 134 S. Ct. at 2350 (quoting Mayo, 132 S. Ct. at 1297). Moreover, the test is whether the claims focus on a specific means or 4 "See Enfish, LLC vs. Microsoft Corp., 2015-1244 (Fed. Cir. May 12, 2016), page 11." Appeal Br. 12. 18 Appeal2017-006617 Application 14/074,666 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 we find that the claims are directed to the effect of, causing a message to be generated and transmitted to market participants in the preferred format of the participant concerning the change of state in an electronic marketplace, and not to any improvement in the relevant technology, e.g. chip architecture improvements. CONCLUSIONS OF LAW We conclude the Examiner did not err in rejecting claims 1-22 under 35 U.S.C. § 101. We conclude the Examiner did err in rejecting claims 1, 2, 4, 12, 14, and 22 under 35 U.S.C. § 112. We conclude the Examiner did err in rejecting claims 1-22 under 35 U.S.C. § 103. DECISION The decision of the Examiner to reject claims 1-22 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). See 37 C.F.R. § 1.136(a)(l )(iv). AFFIRMED 19 Copy with citationCopy as parenthetical citation