Mackay, Anthony

Patent Trials and Appeals Board

Jun 29, 2020

11799609 - (D) (P.T.A.B. Jun. 29, 2020)

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.
11/799,609 05/01/2007 Anthony Mackay 8247-002(PAT577) 6940
104043 7590 06/29/2020
Tarter Krinsky & Drogin LLP
1350 Broadway
New York, NY 10018
EXAMINER
CAMPEN, KELLY SCAGGS
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
06/29/2020 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):
patentdocket@tarterkrinsky.com
sformicola@tarterkrinsky.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte ANTHONY MACKAY
____________

Appeal 2019-001970
Application 11/799,609
Technology Center 3600
____________

Before MURRIEL E. CRAWFORD, NINA L. MEDLOCK, and
TARA L. HUTCHINGS, Administrative Patent Judges.

CRAWFORD, Administrative Patent Judge.

DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant1 seeks our review under 35 U.S.C. § 134 of the Examiner’s
final rejection of claims 44–71. We have jurisdiction under 35 U.S.C.
§ 6(b). Appellant appeared for oral hearing on June 2, 2020.

SUMMARY OF DECISION
We AFFIRM.

1 We use the word Appellant to refer to “applicant” as defined in 37 C.F.R.
§ 1.42(a). Appellant identifies the real party in interest as Instinet Europe
Limited. Appeal Br. 3.
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THE INVENTION
Appellant claims an anonymous block trade matching system. (Spec.
¶ 7, Title.)
Claim 44 is representative of the subject matter on appeal.
44. An electronic trading system for anonymously trading
blocks of securities across markets that permits a user to control
the visibility of orders placed therein, the system comprising:
(a) a plurality of clients, wherein each client is segregated into
one or more interaction groups; and
(b) a computer server, the computer server being coupled to
each of the clients through one of (1) an interface with an inhouse
trading application, (2) an internet connection that communicates
with a web infrastructure server and (3) an interface with an
external trading system, wherein the web infrastructure server is
a secure interface, the computer server being programmed to:
(i) receive from a first client an order for a security, the
order of the security including order data;
(ii) identify an interaction group to which the first client
belongs;
(iii) store the order data in a core database and alert
generator;
(iv) match, using a matching engine, the order of the
security with an opposite side order if a matching order is
available;
(v) determine, using the core database and alert
generator, if the order data includes one or more indications
provided by the first client to modify interaction groups that
alerts will be transmitted to;
(vi) generate an alert anonymously describing the order
if the matching engine determines that a match is not available;
and
(vii) transmit the alert to one or more of the plurality of
clients, said transmission being directed to clients in particular
interaction groups based upon the interaction group to which the
first client belongs, as modified by indications determined to be
present in the order data.
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THE REJECTION
Claims 44–71 are rejected under 35 U.S.C. § 101 as directed to a
judicial exception without significantly more.

ANALYSIS
35 U.S.C. § 101 REJECTION
We will sustain the rejection of claims 44–71 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, . . . 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. v. CLS Bank Int’l, 573 U.S. 208, 217–218 (citing Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72–73 (2012))
(citations omitted).

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To perform this test, we must first determine whether the claims at
issue are directed to a patent-ineligible concept. The Federal Circuit has
explained that “the ‘directed to’ inquiry applies a stage-one filter to claims,
considered in light of the [S]pecification, based on whether ‘their character
as a whole is directed to excluded subject matter.’” See Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet
Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir.
2015)). It asks whether the focus of the claims is on a specific improvement
in relevant technology or on a process that itself qualifies as an “abstract
idea” for which computers are invoked merely as a tool. See id. at 1335–36.
In so doing we apply a “directed to” two prong test: 1) evaluate
whether the claim recites a judicial exception, and 2) if the claim recites a
judicial exception, evaluate whether the judicial exception is integrated into
a practical application. 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50–57 (Jan. 7, 2019) (“Guidance”).
The Examiner determines that the claims are directed to facilitating
trade transactions and more particularly to facilitating block order securities
with alerts which is a commercial arrangement involving data comparisons.
(Final Act. 3.) The Examiner determines that the claims are directed to a
fundamental economic practice and collecting and comparing known
information. (Final Act. 4–5.) The Examiner finds the claims do not effect
an improvement to the functioning of a computer itself, and, the claims do
not move beyond a general link of an abstract idea to a particular
technological environment. (Final Act. 3).
The Specification discloses that an object of the invention is to
provide a system which enables participants to cross large blocks of
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international or national stocks anonymously to cut ticket, execution, and
settlement costs while also reducing market impact and spread cost. (Spec.
¶ 8.) The invention provides a mutually beneficial trading solution where
both trade parties can benefit from trading directly with a natural
counterpart. (Spec. ¶ 10.) The Specification teaches, and Figure 3 depicts,
that the steps of the invention include the step of the user entering a firm
order (collecting information). That order is then sent to the core database
and analyzed to determine if the user has met certain criteria (analyzing
information). If the user meets these criteria, the system generates an alert
for display (displaying information). The order is further analyzed to
determine whether the user included sell side instructions (analyzing
information). (Spec. ¶ 32.)
Consistent with this disclosure, claim 44 recites “[a] system for
anonymously trading blocks of securities,” “receive from a first client an
order,” “store the order data,” “match . . . the order of the security,” “the
order of the security including order data,” “determine . . . if the order
includes one or more indications provided by the first client,” “generate an
alert,” “transmit the alert.”
We, thus, agree with the Examiner’s findings (Final Act. 3–4) that the
claims are directed to a judicial exception in the form of a commercial
interaction, which is a certain method of organizing human activity and,
thus, an abstract idea. Guidance, 84 Fed. Reg. at 52. We also agree with the
Examiner’s determination that the recited steps are similar to other concepts
related to collecting and comparing information that the Federal Circuit has
held to be abstract. See Final Act. 4–5.
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Specifically, we find the steps of the claims that include transmitting
data, storing data, and analyzing data 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, we find that claim
44 recites the judicial exceptions of a commercial interaction and in the
alternative, a mental process.
Turning to the second prong of the “directed to test,” claim 44 recites
a “computer server,” an “interface,” an “infrastructure server,” “database”
and an “alert generator.” These computer components do not impose “a
meaningful limit on the judicial exception, such that the claim is more than a
drafting effort designed to monopolize the judicial exception.” Guidance,
84 Fed. Reg. at 53. We find no indication in the Specification, nor does
Appellant direct us to any indication, that the operations recited in
independent claim 44 invoke any inventive programming, require any
specialized computer hardware or other inventive computer components,
i.e., a particular machine, or that the claimed invention is implemented using
other than generic computer components to perform generic computer
functions. See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245,
1256 (Fed. Cir. 2014) (“[A]fter Alice, there can remain no doubt: recitation
of generic computer limitations does not make an otherwise ineligible claim
patent-eligible.”).
We also find no indication in the Specification that the claimed
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invention effects a transformation or reduction of a particular article to a
different state or thing. Nor do we find anything of record, short of attorney
argument, that attributes any improvement in computer technology and/or
functionality to the claimed invention or that otherwise indicates that the
claimed invention integrates the abstract idea into a “practical application,”
as that phrase is used in the revised Guidance. See Guidance, 84 Fed. Reg.
at 55.
We conclude that claim 44 is directed to judicial exceptions that are
not integrated into a practical application and therefore claim 44 is directed
to “abstract ideas.”
Turning to the second step of the Alice analysis, because we find that
claim 44 is directed to abstract ideas, the claim must include an “inventive
concept” in order to be patent eligible, i.e., there must be an element or
combination of elements that is sufficient to ensure that the claim in practice
amounts to significantly more than the abstract idea itself. See Alice,
573 U.S. at 217–18 (alteration in original) (quoting Mayo, 566 U.S. at 72–
73).
The introduction of computer components 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
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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.”
Alice, 573 U.S. at 223 (alterations in original) (citations omitted).
Instead, “the relevant question is whether claim 44 does more than
simply instruct the practitioner to implement the abstract idea . . . on a
generic computer.” Id. at 225. It does not.
Taking the claim elements separately, the function performed by the
computer components at each step of the process is purely conventional.
Using computer components to retrieve, select, and apply decision criteria to
data and modify the data as a result amounts to electronic data query 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
at 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
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the collection and analysis other than abstract.” SAP Am. Inc. v. InvestPic,
LLC, 890 F.3d 1016, 1022 (Fed. Cir. 2018).
Considered as an ordered combination, the computer components of
claim 44 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.
Claim 44 does not, for example, purport to improve the functioning of
the computer components. As we stated above, the claims do not 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. ¶¶ 20, 22.) Thus, claim 44 at issue amounts to
nothing significantly more than instructions to apply the abstract idea of
information access using some unspecified, generic computer. Under our
precedents, that is not enough to transform an abstract idea into a patent-
eligible invention. See Alice, 573 U.S. at 226.
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We have reviewed all the arguments (Appeal Br. 15–26; Reply Br. 2–
11) Appellant has 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 emphasis and completeness, we will
address various arguments in order to make individual rebuttals of the same.
We are not persuaded of error on the part of the Examiner by
Appellant’s argument that the Examiner erred because the pending claims
recite specific, narrow, novel and non-obvious improvements in electronic
systems used to trade securities. (Appeal Br. 17). To the extent Appellant
argues that the pending claims recite “significantly more” because the
claimed invention is “novel” and “non-obvious,” Appellant misapprehend
the controlling precedent. 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, 573 U.S. at 217–18. A novel and
nonobvious claim directed to a purely abstract idea is, nonetheless, patent-
ineligible. See Mayo, 566 U.S. at 90. See, e.g., Synopsys, Inc. v. Mentor
Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016) (“[A] claim for a new
abstract idea is still an abstract idea.”).
We do not agree with Appellant that the invention solves a technical
problem that allows a user to control which users or types of users will
receive alerts about orders available for trading. Appellant argues that the
technical solution is achieved by providing a core database and an alert
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generator. (Appeal Br. 18.) We agree with the Examiner that the claims are
not directed to a technical problem but rather a business problem or trading
problem which is solved by categorizing users according to user type and
creating rules for distribution of alerts to other user types placing orders and
limiting visibility of orders and alerts. (Ans. 8.) As we noted above, the
Specification discloses that the operation of the steps of claim 44 (such as
these steps performed by the core database and the alert generator) can be
performed by computer program instructions provided to a general purpose
computer. As such, the Specification does not disclose an improvement to
these computer components themselves. The improvement touted by
Appellant is an improvement to the field of block trading rather than an
improvement to the computer components used to make the trades. The
computer components including the alert generator and the core database are
not improved. And “[n]o matter how much of an advance in the . . . field the
claims recite, the advance lies entirely in the realm of abstract ideas, with no
plausibly alleged innovation in the non-abstract application realm.” SAP
Am., 898 F.3d at 1163. Although Appellant argues that the invention’s
ability to generate and transmit alerts to particular interaction groups is a
technical improvement, there is no evidence that this ability is a result of
improvement to the core database and the alert generator or any other
computer component.
Appellant argues that the claims are similar to the claims in DDR
Holdings and Trading Technologies International, Inc. v. CQG, Inc.,
675 F. App’x 1001 (Fed. Cir. 2017) (nonprecedential). We agree with the
Examiner’s response to these arguments found on pages 7–9 of the Final
Action and pages 9–10 of the Answer and adopt the Examiner’s response as
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our own. In this regard, we agree with the Examiner that the claims do not
recite a technical improvement and they are not similar to the claims in
DDR.
In regard to the reliance on Trading Technologies specifically, we
agree with the Examiner that because this case is not precedential, it is not
binding on this panel of the Board. In any case, the claims in Trading
Technologies recited “dynamically displaying a second indicator in one of a
plurality of locations in an ask display region, each location in the ask
display region corresponding to a price level along the common static price
axis.” Trading Techs., 675 F. App’x at 1003. No such dynamic positioning
of data is recited in the claims at hand. In a related, precedential Trading
Technologies case, also reciting a graphical user interface, the court held
“[t]he claims are focused on providing information to traders in a way that
helps them process information more quickly, not on improving computers
or technology.” Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1378, 1384
(Fed. Cir. 2019). Similarly, the claims here are focused on providing
information to users in a way that helps them process information more
quickly, not on improving computers or technology.
We are not persuaded of error on the part of the Examiner by
Appellant’s argument that there is no evidentiary basis to support the
assertion that the claimed elements are well-understood, routine and
conventional as required by Berkheimer v. HP Inc., 881 F.3d 1360, 1367–70
(Fed. Cir. 2018).
The court in Berkheimer held that “[t]he patent eligibility inquiry may
contain underlying issues of fact.” Berkheimer, 881 F.3d at 1365
(quoting Mortgage Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d
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1314, 1325 (Fed. Cir. 2016) (“The § 101 inquiry ‘may contain underlying
factual issues.”’)). The inquiry as to whether a claim element or
combination is well-understood, routine, and conventional falls under
step two in the § 101 framework. Berkheimer v. HP Inc., 890 F.3d 1369,
1374 (Fed. Cir. 2018) (citation omitted). As such, there is no genuine issue
of material fact when the only alleged “inventive concept” is the abstract
idea. Id. (“Berkheimer and Aatrix leave untouched the numerous cases from
this court which have held claims ineligible because the only alleged
‘inventive concept’ is the abstract idea”) (citation omitted). “When there is
no genuine issue of material fact regarding whether the claim element or
claimed combination is well-understood, routine, [and] conventional to a
skilled artisan in the relevant field, this issue can be decided on summary
judgment as a matter of law.” Berkheimer, 881 F.3d at 1368. See also
Aatrix Software, Inc. v. Green Shades Software, Inc., 890 F.3d 1354, 1368
(Fed. Cir. 2018) (“A factual allegation or dispute should not automatically
take the determination out of the court’s hands; rather, there needs to be
justification for why additional evidence must be considered—the default
being a legal determination.”). Thus, evidence may be helpful where, for
instance, facts are in dispute, but evidence is not always necessary.
Here Appellant cannot reasonably contend, nor does Appellant, that
there is a genuine issue of material fact regarding whether the operations of
the computer components are well-understood, routine, or conventional,
where, as here, there is nothing in the Specification to indicate that the
operations recited in claim 44 require any specialized hardware or inventive
computer components or that the claimed invention is implemented using
other than generic computer components to perform generic computer
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functions, e.g., receiving, transmitting, and processing information. Indeed,
the Federal Circuit, in accordance with Alice, has “repeatedly recognized the
absence of a genuine dispute as to eligibility” where claims have been
defended as involving an inventive concept based “merely on the idea of
using existing computers or the Internet to carry out conventional processes,
with no alteration of computer functionality.” Berkheimer, 890 F.3d at 1373
(Moore, J., concurring) (internal citations omitted); see also BSG Tech LLC
v. BuySeasons, Inc., 899 F.3d 1281, 1291 (Fed. Cir. 2018) (“BSG Tech does
not argue that other, non-abstract features of the claimed inventions, alone or
in combination, are not well-understood, routine and conventional database
structures and activities. Accordingly, the district court did not err in
determining that the asserted claims lack an inventive concept.”). In any
case, Appellant’s own Specification is evidence at paragraph 20 that the
computer components recited in claim 44 are well-understood, routine, and
conventional by disclosing that the invention can be performed on a general
purpose computer.
We are not persuaded of error on the part of the Examiner by
Appellant’s argument that the pending claims are similar to claims that have
been deemed patent eligible by other board panels in two related patent
applications, because these earlier decisions in the earlier cases are not
precedential decisions and therefore are not binding on this panel. (Reply
Br. 2–3.) In addition, the earlier decisions involved claims that differ from
those before this panel. For example, the claims in Appeal No. 2014-009963
included a two-way messaging interface that is not recited in the instant
claims, and it was this element that the board panel found to be
“significantly more” than the abstract idea.
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In view of the foregoing, we will sustain the Examiner’s rejection of
independent claim 44 under 35 U.S.C. § 101. We will also sustain this
rejection as it is directed to independent claims 59 and 66, because Appellant
has not argued the separate eligibility of these claims.
We have reviewed Appellant’s arguments as to dependent claims 45–
58, 60–65, and 67–71, but we are not persuaded that any of these claims are
patent eligible under 35 U.S.C. § 101. (Appeal Br. 22–23.) In other words,
the dependent claims may limit the scope of the abstract idea to which
independent claims 44, 59, and 66 are directed but their character remains
unchanged, especially given that these dependent claims provide no insight
to improvements in computer functionality beyond what one would expect
from using a generic computer as a tool in performing the scheme as
claimed. None of these claims adds anything significantly more to
transform the abstract idea. For example, claims 45 and 47 further define
the interaction groups recited in claim 44, and claim 46 further defines when
the alert recited in claim 44 is sent. Thus, Appellant has not persuaded us
that the Examiner erred in rejecting dependent claims 45–58, 60–65, and 67–
71 as being directed to patent-ineligible subject matter. Therefore, we
determine that the limitations of the dependent claims do not meaningfully
limit the claims beyond the claimed abstract idea. In view of the foregoing,
we will sustain the Examiner’s rejection as it is directed to claims 45–58,
60–65, and 67–71.

CONCLUSION
We conclude the Examiner did not err in rejecting claims 44–71 under
35 U.S.C. § 101.
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DECISION
The decision of the Examiner to reject claims 44–71 is affirmed.
In summary:
Claims
Rejected
35 U.S.C. § Basis Affirmed Reversed
44–71 101 Eligibility 44–71

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) (2017).
AFFIRMED