Howard W. Lutnick et al.

Patent Trials and Appeals Board

Dec 17, 2019

13372441 - (D) (P.T.A.B. Dec. 17, 2019)

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.
13/372,441 02/13/2012 Howard W. Lutnick 07-2101-C1 5902
63710 7590 12/17/2019
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
RANKINS, WILLIAM E
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
12/17/2019 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):
lkorovich@cantor.com
patentdocketing@cantor.com
phowe@cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte HOWARD W. LUTNICK, JOSEPH C. NOVIELLO, and
MICHAEL SWEETING
Appeal 2018-007045
Application 13/372,441
Technology Center 3600
Before JAMES R. HUGHES, JENNIFER L. MCKEOWN, and
JOYCE CRAIG, Administrative Patent Judges.
CRAIG, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 42–57 and 59–61. See Final Act. 1. We
have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the word Appellant to refer to “applicant” as defined in 37 C.F.R.
§ 1.42. Appellant identifies BGC Partners, Inc. as the real party in interest.
Appeal Br. 3.
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CLAIMED SUBJECT MATTER
The claims are directed to trading an item in an electronic trading
system. Spec. § 82. Claim 42, reproduced below with added emphasis, is
illustrative of the claimed subject matter:
42. A method for facilitating electronic trading over an
electronic trading system with interfaces of computing devices,
the method comprising:
determining, by a computing device of an electronic
trading system, from among a plurality of bids that are pending
at a completion of a first trading state, a best bid, wherein the
best bid comprises a bid having a best price from among the
plurality of bids,
wherein the best bid is associated with a participant;
receiving, by a network interface of the computing device
of the electronic trading system, from a network interface of a
computing device of a participant, data representing an offer in
a second trading state;
determining, by the computing device of the electronic
trading system, that a price of the best bid satisfies a price
criterion with respect to a price of a trade made in the first state;
based at least in part on determining that a price of the
best bid satisfies a price criterion with respect to a price of a
trade made in the first state, presenting, by the computing
device of the electronic trading system to a display interface of
a computing device of a participant the offer exclusively to the
participant;
determining, by the computing device of the electronic
trading system, that a different participant indicates a
willingness to trade against the offer;
based at least in part on determining that the different
participant indicates the willingness to trade against the offer,
automatically causing, by the computing device of the
electronic trading system, the participant to trade against the
offer;
determining, by the computing device of the electronic
trading system, whether an incoming order clear to trade; and
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in response to determining that the incoming order is not
cleared to trade, generating an electronic command to cause
display of a visual indicator on a graphical user interface of a
computing device of a user, the visual indicator to be displayed
in a region of the graphical user interface that displays data
representing bid and offer stacks and adjacent display of data
representing volume of partially cleared order to indicate that
only a portion of the order is cleared to be traded, the visual
indicator to differentiate the partially cleared order from a
totally uncleared order or from a totally clear order.
REJECTIONS
Claims 42–57 and 59–61 stand rejected under 35 U.S.C. § 101
because the claimed invention is directed to patent-ineligible subject matter.
Final Act. 3–6.
ANALYSIS
Appellant argues the Examiner’s rejection of claim 42 under
35 U.S.C. § 101 as directed to patent-ineligible subject matter is in error.
Appeal Br. 8.
To the extent Appellant has not advanced separate, substantive
arguments for particular claims, or other issues, such arguments are waived.
37 C.F.R. § 41.37(c)(1)(iv). Appellant argues claims 42–57 and 59–61 as a
group. Appeal Br. 8, 17. Given our discretion under 37 C.F.R.
§ 41.37(c)(1)(iv), we decide the 35 U.S.C. § 101 rejection of claims 42–57
and 59–61 based on representative claim 42.
Legal Standard
“Whether a claim is drawn to patent-eligible subject matter is an issue
of law that we review de novo.” SiRF Tech., Inc. v. Int’l Trade Comm’n, 601
F.3d 1319, 1331 (Fed. Cir. 2010).
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The Supreme Court’s two-step framework guides our analysis of
patent eligibility under 35 U.S.C. § 101. Alice Corp. v. CLS Bank Int’l, 573
U.S. 208, 217 (2014). In addition, the Office recently published revised
guidance for evaluating subject matter eligibility under 35 U.S.C. § 101,
specifically with respect to applying the Alice framework. USPTO, 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7,
2019) (“Office Guidance”). If a claim falls within one of the statutory
categories of patent eligibility (i.e., a process, machine, manufacture, or
composition of matter) then the first inquiry is whether the claim is directed
to one of the judicially recognized exceptions (i.e., a law of nature, a natural
phenomenon, or an abstract idea). Alice, 573 U.S. at 217. As part of this
inquiry, we must “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 Tex., LLC v. DIRECTV, LLC, 838 F.3d
1253, 1257 (Fed. Cir. 2016).
Per Office Guidance, this first inquiry has two prongs of analysis (i)
does the claim recite a judicial exception (e.g., an abstract idea), and (ii) if
so, is the judicial exception integrated into a practical application. Office
Guidance, 84 Fed. Reg. 54. Under the Office Guidance, if the judicial
exception is integrated into a practical application, see infra, the claim is
patent eligible under 35 U.S.C. § 101. Office Guidance, 84 Fed. Reg. 54–55.
If the claim is directed to a judicial exception (i.e., recites a judicial
exception and does not integrate the exception into a practical application),
the next step is to determine whether any element, or combination of
elements, amounts to significantly more than the judicial exception. Alice,
573 U.S. at 217; Office Guidance, 84 Fed. Reg. 56. If the claim is “directed
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to” an abstract idea, we turn to the second step of the Alice and Mayo
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).
To summarize, under the current Office Guidance, we first look to
whether the 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 (2) additional elements that integrate the judicial
exception into a practical application (see Manual for Patent Examining
Procedure (“MPEP”) §§ 2106.05(a)–(c), (e)–(h)).
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 is 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 generally Office
Guidance, 84 Fed Reg. 56.
Step 1
Claim 42, as a method claim, recites one of the enumerated categories
of eligible subject matter in 35 U.S.C. § 101 (process). Therefore, the issue
before us is whether it is directed to a judicial exception without
significantly more.
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Step 2A(i): Does the Claim Recite a Judicial Exception?
The Examiner determined that claim 42 is directed to “comparing new
and stored information and using rules to identify options,” which the
Examiner identified as an abstract idea. Final Act. 3.
Appellant argues that the Examiner erred because the rejection fails to
identify the claimed concept as set forth or described in the claims. Appeal
Br. 10. Appellant further argues that the Examiner oversimplified the claims
and failed to account for the specific requirements recited in claim 42. Id.
We are not persuaded that the Examiner failed to make a prima facie
case under 35 U.S.C. § 101. The procedural burden of establishing a prima
facie case is carried when the rejection satisfies the requirements of 35
U.S.C. § 132. In re Jung, 637 F.3d 1356, 1363 (Fed. Cir. 2011). “Section
132 is violated when a rejection is so uninformative that it prevents the
applicant from recognizing and seeking to counter the grounds for
rejection.” Chester v. Miller, 906 F.2d 1574, 1578 (Fed. Cir. 1990). That is,
the Examiner must set forth the rejection's statutory basis “in a sufficiently
articulate and informative manner as to meet the notice requirement of [35
U.S.C.] § 132.” Jung, 637 F.3d at 1363.
This is not a case where the “rejection is so uninformative that it
prevents the applicant from recognizing and seeking to counter the grounds
for rejection.” Id. at 1362. Rather, the Examiner has provided a rationale that
identifies the abstract idea recited in the claim and why it is considered an
exception. See Final Act. 3–6.
Moreover, consistent with Appellant’s description of the claims, we
find that the recited “determining” limitations describe facilitating electronic
trading and are fairly characterized as functions that can be performed in the
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human mind or with pen and paper, which falls into the mental processes
category of abstract ideas. See Office Guidance, 84 Fed. Reg. 52, and 53
(listing “[m]ental processes—concepts performed in the human mind
(including an observation, evaluation, judgment, opinion)” as one of the
“enumerated groupings of abstract ideas”) (footnote omitted).
Additionally, “facilitating electronic trading” is a fundamental
economic concept, which is a certain method of organizing human activity,
and an abstract idea. The focus of the steps recited in claim 42 is trading
financial instruments in light of the exclusive right of certain participants to
trade on incoming orders. See Spec. ¶¶ 79, 82, 88, and 89 (describing the
invention as automation of a known method of trading—first on the follow
trading—in electronic trading systems). Trading a financial instrument at a
market price is a fundamental economic principle or practice, which is one
of certain methods of organizing human activity that is an abstract idea. See
Office Guidance, 84 Fed. Reg. 52, n.13 (citing Alice, 573 U.S. at 219–20
(concluding that use of a third party to mediate settlement risk is a
“fundamental economic practice” and thus an abstract idea), and (describing
the concept of risk hedging identified as an abstract idea in Bilski as “a
method of organizing human activity.”); see also Bilski, 561 U.S. at 611–12
(concluding that hedging is a “fundamental economic practice” and therefore
an abstract idea); Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876
F.3d 1372, 1378–79 (Fed. Cir. 2017) (holding that concept of “local
processing of payments for remotely purchased goods” is a “fundamental
economic practice, which Alice made clear is, without more, outside the
patent system.”); OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359,
1362–63 (Fed. Cir. 2015) (concluding that claimed concept of “offer-based
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price optimization” is an abstract idea “similar to other ‘fundamental
economic concepts’ found to be abstract ideas by the Supreme Court and
this court.”); Trading Techs., Inc. v. IBG LLC, 921 F.3d 1084 (Fed. Cir.
2019) (determining that graphing or displaying bid and offers to assist a
trader to make an order to be an abstract idea); Interactive Brokers LLC v.
Chart Trading Dev., LLC, 2016 WL 5371557 (PTAB 2016) (claims directed
to a graphical user interface used in electronic trading were determined to be
patent ineligible as directed to an abstract idea).
Because we agree with the Examiner that claim 42 recites an abstract
idea, we proceed to Prong Two of Step 2A to determine if the idea is
integrated into a practical application, in which case the claim as a whole
would not be “directed to” merely an abstract idea.
Step 2A(ii): Judicial Exception Integrated into a Practical Application?
Because we determined that claim 42 recites a patent-ineligible
concept, we next determine whether the recited judicial exception is
integrated into a practical application of that exception by: (a) identifying
whether there are any additional elements recited in the claim beyond the
judicial exception(s); and (b) evaluating those additional elements
individually and in combination to determine whether they integrate the
exception into a practical application.
We use the term “additional elements” for claim features, limitations,
or steps that the claim recites beyond the identified judicial exception. See
Revised Guidance 84 Fed. Reg. 55 n.24. In claim 42, the additional elements
include the “receiving,” “presenting,” “causing,” and “generating” steps, as
well as the limitations “electronic trading system,” “computing devices,” a
network interface,” “display interface,” and “graphical user interface.”
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The Examiner determined that none of the additional computer
limitations is sufficient to amount to significantly more than the judicial
exception because those elements are “generically recited and therefore do
not transform the claims into patent-eligible subject matter as the devices
and interfaces are merely tools used to implement the abstract idea.” Final
Act. 4. The Examiner also determined that “[r]eceiving an offer in a second
trading state” amounts to mere data gathering, which is insufficient to
transform the abstract idea into patent-eligible subject matter. Id.
We agree with the Examiner’s determinations. We further determine
that the additional limitations directed to displaying an offer and causing a
participant to trade against the offer constitute insignificant post-solution
activity. See MPEP 2106.05(g). In particular, we determine that the
“presenting” steps amounts to insignificant extra-solution activity. See
Office Guidance, 84 Fed. Reg. 55 (citing MPEP § 2106.05(g)); see also
Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354–55 (Fed. Cir.
2016) (“merely presenting the results of abstract processes of collecting and
analyzing information, without more . . . is abstract as an ancillary part of
such collection and analysis.”). Further, “generating” a command to cause
display of a visual indicator also adds insignificant extra-solution activity to
the judicial exception. See Office Guidance, 84 Fed. Reg. 55, 55 n.31. The
recited “causing” step may be also be viewed as insignificant extra-solution
activity because no further details are recited regarding how the computing
device automatically causes a participant to trade against the offer.
Citing Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc., 880
F.3d 1356, 1363 (Fed. Cir. 2018), Appellant contends that, here, the claimed
subject matter is directed to improvements in an electronic trading platform
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facilitating electronic trading over a network with a graphical user interface
screen that may help reduce the number of transactions over the network.
Appeal Br. 14. Appellant argues that the claimed subject matter is drawn to
an improved user interface that provides advantages over the prior art
systems including improving the efficiency of the electronic devices, thereby
overcoming disadvantages of prior systems. Id.
We are not persuaded by Appellant’s arguments. In Core Wireless, the
claimed invention specified particular technological functionality in the form
of “an application summary that can be reached directly from [a] menu”
such that the summary window “is displayed while the one or more
applications are in an un-launched state.” Core Wireless, 880 F.3d at 1362–
63. The court stated that “[t]he disclosed invention improves the efficiency
of using the electronic device[s].” Core Wireless, 880 F.3d at 1363.
However, the court also explained that “[w]e also ask whether the claims are
directed to a specific improvement in the capabilities of computing devices”
(id. at 1361), and then determine that “the claims are directed to an
improvement in the functioning of computers” (id. at 1363). Thus, in Core
Wireless, the improved efficiency of using the electronic devices was related
to an identified improvement in the functioning of computers.
Appellant argues improved computer performance through facilitation
of electronic trading over a network with a graphical user interface having
the claimed features, which “helps reduce the number of transactions over
the network and which may help reduce computer workload including
computer resources such as memory resources processor resources, and
network resources such as network bandwidth.” Appeal Br. 14 (emphasis
omitted). However, Appellant has not shown that the claimed invention is
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commensurate in scope with the type of specific interface and
implementation for navigating as presented in Core Wireless. Instead,
Appellant’s claimed invention relies upon a visual indicator that is displayed
in a region of a graphical user interface
that displays data representing bid and offer stacks and adjacent
display of data representing volume of partially cleared order to
indicate that only a portion of the order is cleared to be traded,
the visual indicator to differentiate the partially cleared order
from a totally uncleared order or from a totally clear order.
Appeal Br. 19–20, Claims App. (claim 42).
Rather than presenting a specific interface and implementation for
navigating, as in Core Wireless, Appellant’s claimed invention lacks a
specific technical improvement in functionality. The fact that the steps can
be performed more efficiently via a computer does not materially alter the
patent eligibility of the claimed subject matter. See Bancorp Servs., L.L.C. v.
Sun Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir.
2012).
Considering claim 42 as a whole, then, Appellant’s invention lacks a
technical solution to a technical problem like the claims in Core Wireless.
Claim 42 merely uses instructions to implement the abstract idea on a
computer or, alternatively, merely uses a computer as a tool to perform the
abstract idea. Here, the additional limitation(s) do not integrate the judicial
exception into a practical application. More particularly, the claims do not
recite (i) an improvement to the functionality of a computer or other
technology or technical field (see MPEP § 2106.05(a)); (ii) a “particular
machine” to apply or use the judicial exception (see MPEP § 2106.05(b));
(iii) a particular transformation of an article to a different thing or state (see
MPEP § 2106.05(c)); or (iv) any other meaningful limitation (see MPEP
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§ 2106.05(e)). See Office Guidance, 84 Fed. Reg. 55. Rather, claim 42
recites an abstract ideas as identified in Step 2A(i), supra, and none of the
limitations integrates the judicial exception into a practical application.
Therefore, because the abstract idea is not integrated into a practical
application, we conclude that the claim is directed to the judicial exception.
Step 2B — “Inventive Concept” or “Significantly More”
If the claims are directed to a patent-ineligible concept, as we
conclude above, we proceed to the “inventive concept” step. For Step 2B we
must “look with more specificity at what the claim elements add, in order to
determine ‘whether they identify an “inventive concept” in the application of
the ineligible subject matter’ to which the claim is directed.” Affinity Labs
of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1258 (Fed. Cir. 2016)
(quoting Elec. Power Grp., 830 F.3d at 1353). We look to see whether there
are any “additional features” in the claims that constitute an “inventive
concept,” thereby rendering the claims eligible for patenting even if they are
directed to an abstract idea. Alice, 573 U.S. at 221. Those “additional
features” must be more than “well-understood, routine, conventional
activity.” Mayo Collaborative Servs. v. Prometheus Labs, Inc., 566 U.S. 66,
79 (2012).
The Examiner determined that the additional elements in claim 1
amount to well-understood, routine, and conventional features in the trading
industry, and are insufficient to transform the claims into patentable subject
matter. Final Act. 4–5.
Appellant does not direct our attention to anything in the Specification
that indicates the additional elements perform anything other than well-
understood, routine, and conventional functions, such as receiving data,
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looking up data in a database, attempting to execute commands, and storing
data in a database. See buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355
(Fed. Cir. 2014) (“That a computer receives and sends the information over
a network—with no further specification—is not even arguably inventive.”);
see also In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 614 (Fed. Cir.
2016) (server that receives data, extracts classification information from the
received data, and stores the digital images insufficient to add an inventive
concept); and Alice, 573 U.S. at 225–26 (receiving, storing, sending
information over networks insufficient to add an inventive concept).
Instead, Appellant argues claim 42 is patent-eligible because its
practice does not preempt practice by others. Appeal Br. 15. While
preemption may signal patent ineligible subject matter, the absence of
complete preemption “does not demonstrate patent eligibility,” “[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); see also OIP Techs., Inc. v.
Amazon.com, Inc., 788 F.3d 1359, 1362–63 (Fed. Cir. 2015) (“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.”).
We are also not persuaded by Appellant’s argument that “[t]he lack of
prior art citations in the Final Action indicate that the claimed subject matter
allows the computer to perform a novel and non-obvious function that was
not previously performable by computers.” Appeal Br. 16. The novelty of
any element or steps in a process, or even of the process itself, is of no
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relevance in determining whether the subject matter of a claim falls within
the 35 U.S.C. § 101 categories of possibly patentable subject matter. See
Appeal Br. 16; see also Diamond v. Diehr, 450 U.S. 175, 188–89 (1981).
Our reviewing court further guides that “[e]ligibility and novelty are
separate inquiries.” Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC,
874 F.3d 1329, 1340 (Fed. Cir. 2017); see also Affinity Labs of Tex., LLC v.
DIRECTV, LLC, 838 F.3d 1253, 1263 (Fed. Cir. 2016) (holding that “[e]ven
assuming” that a particular claimed feature was novel does not “avoid the
problem of abstractness.”).
Because the Specification describes the additional computer elements
(Spec. ¶¶ 53–63) in general terms, without describing the particulars, we
conclude the claim limitations may be broadly but reasonably construed as
reciting conventional computer components and techniques. We conclude
claim 42 does not have an inventive concept because the claim, in essence,
merely recites various computer-based elements along with no more than
mere instructions to implement the identified abstract idea using the
computer-based elements.
Because the claims fail under both the Step 2A and Step 2B analyses,
we sustain the Examiner’s § 101 rejection of independent claim 42, as well
as the Examiner’s § 101 rejection of claims 43–57 and 59–61, not argued
separately with particularity. Appeal Br. 17.
CONCLUSION
We affirm the Examiner’s decision rejecting claims 42–57 and 59–61.

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DECISION SUMMARY
In summary:
Claims Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed
42–57, 59–61 101 Eligibility 42–57,
59–61

TIME PERIOD FOR RESPONSE
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(1)(iv).
AFFIRMED