Chicago Mercantile Exchange Inc.

Patent Trials and Appeals Board

Apr 23, 2020

15232224 - (D) (P.T.A.B. Apr. 23, 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.
15/232,224 08/09/2016 Zachary Bonig 4672-16014AUS 2661
12684 7590 04/23/2020
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
EXAMINER
TRAN, HAI
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
04/23/2020 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):
docket-us@lsk-iplaw.com
mail@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 ZACHARY BONIG, ERIC THILL, PEARCE PECK-WALDEN,
JOSÉ ANTONIO ACUÑA-ROHTER, BARRY GALSTER,
NEIL STEUBER, JAMES BAILEY, and JAKE SIDDALL
Appeal 2019-007009
Application 15/232,224
Technology Center 3600
Before GREGG I. ANDERSON, MICHAEL J. ENGLE, and
SCOTT RAEVSKY, Administrative Patent Judges.
RAEVSKY, Administrative Patent Judge.
DECISION ON APPEAL
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1–20. 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(a). Appellant identifies the real party in interest as Chicago
Mercantile Exchange Inc. Appeal Br. 2.
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CLAIMED SUBJECT MATTER
The claims relate to implementation of a trading system or trading
system architecture having multiple transaction processors that process or
execute instructions. Spec., Abstr. Claim 1, reproduced below, is
illustrative of the claimed subject matter:
1. A computer implemented method for processing
transactions, the method including:
receiving, by a transaction processor from a first source,
an instruction and an instruction identifier corresponding to the
instruction;
storing the instruction in a memory coupled with the
transaction processor;
receiving, by the transaction processor from a second
source, an instruction identifier corresponding to the
instruction;
upon receiving the instruction identifier from the second
source, retrieving from the memory by the transaction
processor, the instruction corresponding to the instruction
identifier received from the second source; and
processing, by the transaction processor, the retrieved
instruction.
REJECTION
Claims 1–20 stand rejected under 35 U.S.C. § 101 as directed to a
judicial exception without significantly more. Final Act. 3.
STANDARD OF REVIEW
The Board conducts a limited de novo review of the appealed
rejections for error based upon the issues identified by Appellant and in light
of the arguments and evidence produced thereon. Ex parte Frye, 94
USPQ2d 1072, 1075 (BPAI 2010) (precedential). Arguments not made are
waived. See id.; 37 C.F.R. § 41.37(c)(1)(iv).
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ANALYSIS
I. Principles of Law
An invention is patent-eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
implicit exceptions: “[l]aws of nature, natural phenomena, and abstract
ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’l, 573 U.S. 208,
216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court’s two-step framework, described
in Mayo and Alice. Id. at 217–18 (citing Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with
that framework, we first determine what concept the claim is “directed
to.” See id. at 219 (“On their face, the claims before us are drawn to the
concept of intermediated settlement, i.e., the use of a third party to mitigate
settlement risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010)
(“Claims 1 and 4 in petitioners’ application explain the basic concept of
hedging, or protecting against risk.”).
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 67–68 (1972)).
Concepts determined to be patent eligible include physical and chemical
processes, such as “molding rubber products” (Diamond v. Diehr, 450 U.S.
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175, 191 (1981)); “tanning, dyeing, making water-proof cloth, vulcanizing
India rubber, smelting ores” (id. at 183 n.7 (quoting Corning v. Burden, 56
U.S. 252, 267–68 (1853))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
If the claim is “directed 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. “A claim that recites an
abstract idea must include ‘additional features’ to ensure ‘that the [claim] is
more than a drafting effort designed to monopolize the [abstract idea].’” Id.
(alterations in original) (quoting Mayo, 566 U.S. at 77). “[M]erely
requir[ing] generic computer implementation[] fail[s] to transform that
abstract idea into a patent-eligible invention.” Id.
After the docketing of this Appeal, the USPTO published revised
guidance on the application of § 101 (“Guidance”). See, e.g., USPTO, 2019
Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7,
2019) (“Revised Guidance”); USPTO, October 2019 Update: Subject Matter
Eligibility (Oct. 17, 2019) (“Update”), 84 Fed. Reg. 55942 (Oct. 18, 2019)
(notice).
Under the 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 activities such as a fundamental economic
practice, or mental processes); and
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(2) additional elements that integrate the judicial
exception into a practical application (see MPEP
§§ 2106.05(a)–(c), (e)–(h) (9th ed. Rev. 08.2017, Jan. 2018)).
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
activity” 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 Revised Guidance, 84 Fed. Reg. at 56.

II. Step 2A, Prong One (Judicial Exception)
The Examiner determines that claim 12 is directed to the abstract idea
of an idea of itself, “i.e. concepts related to processes of comparing and
organizing information,” and “similar to the concepts that have been
identified as [an] abstract idea by the courts, such as ‘[c]ollection, storage,
and recognition of data’ in Smart Systems Innovations, and ‘[d]ata
recognition and storage’ in Content Extraction.” Final Act. 5–6.3
The Specification describes a problem in the “financial exchange
environment,” namely that “the total time spent on processing an order is

2 Appellant argues claims 1–20 as a group. Appeal Br. 4–19. We select
independent claim 1 as representative. See 37 C.F.R. § 41.37(c)(1)(iv).
3 See Smart Sys. Innovations, LLC v. Chi. Transit Auth., 873 F.3d 1364 (Fed.
Cir. 2017); Content Extraction & Transmission LLC v. Wells Fargo Bank,
Nat’l Ass’n, 776 F.3d 1343 (Fed. Cir. 2014).
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usually small enough . . . that the drift between computer systems may cause
uncertainty.” Spec. ¶ 4. “Systems within an exchange may require the
current time as an input to process an order, such as opening the market for
trading at a precise time, or stopping matching on an expired futures
contract.” Id. “In an active market, the incoming rate of orders can be high
enough that the time drift between different system components may render
the time difference between received transaction indistinguishable and cause
the incoming customer requests to be processed in a different order than
received by the various components.” Id. Accordingly, “the disclosed
embodiments allow multiple systems or components to process tasks or
instructions in a controlled, e.g., same or otherwise synchronized [or]
coordinated, order.” Id. ¶ 16. More specifically, “[t]he disclosed
embodiments minimize the overall latency of a transaction processing
system.” Id. ¶ 159 (emphasis added).
Appellant contends the claims are not directed to an abstract idea but
rather “describe the process of preloading, and subsequently triggering
execution of, instructions, such as processing or administrative instructions,
by providing the instructions to the processor in advance in association with
an identifier and, at the desired time, merely communicating the identifier to
the system in order to trigger execution of the associated instruction.”
Appeal Br. 5–6. Appellant further contends that the “claimed invention
directly addresses an issue of electronic transaction processing systems
which need to coordinate/synchronize transaction execution across multiple
processing resources.” Id. at 6.
In addition, Appellant contends the claim does not recite a mental
process because “the claim . . . does not cover performance in the mind but
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for the recitation of generic computer components.” Id. Appellant also
contends, without further explanation in its Appeal Brief, that “the claim
does not recite any method of organizing human activity, such as a
fundamental economic concept or managing interactions between people.”
Id.
In the Answer, the Examiner determines, and we agree, that the claims
are directed to a method of organizing human activity because “under the
broadest reasonable interpretation, the process covers the performance of a
trade process but for the recitation of the generic computer components.”
Ans. 9. The Examiner further determines, and we agree, that “[m]anaging
trade transactions in a trade environment through the use of instructions and
associated identifiers is a method of organizing human activity, such as a
fundamental economic practice (i.e., hedging, insurance, mitigating risk) and
managing interactions between people or accounts (i.e., social activities,
teaching, and following rules or instructions).” Id. at 5 (emphasis omitted).
In Reply, Appellant contends the Examiner “misinterprets Appellant’s
claims” because the claims “recite[] no limitations relating to trading” or
“managing transactions, such as trade transactions, through the use of
instructions.” Reply Br. 1, 3. Appellant contends, “[t]he claims, instead,
relate to providing instructions in advance to a transaction processor to be
stored in a memory coupled therewith and then, subsequent to receipt of a
corresponding identifier, retrieving and processing those stored
instructions.” Id. at 3.
Appellant’s arguments are unpersuasive. Under the broadest
reasonable interpretation, claim 1 recites a commercial interaction—a
method of organizing human activity. More specifically, claim 1 recites a
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commercial interaction because the following limitations of claim 1 broadly
relate to receiving instructions and identifiers associated with a transaction:
1. A computer implemented method for processing
transactions, the method including:
receiving . . . from a first source, an instruction and an
instruction identifier corresponding to the instruction;
storing the instruction . . .;
receiving, . . . from a second source, an instruction
identifier corresponding to the instruction;
upon receiving the instruction identifier from the second
source, retrieving . . . the instruction corresponding to the
instruction identifier received from the second source; and
processing . . . the retrieved instruction.
These recitations of claim 1, under their broadest reasonable
interpretation, are intended to ordinarily take place in the field of processing
transactions, which is a known business activity and commercial
interaction—one of certain methods of organizing human activity identified
in the Revised Guidance, and, therefore, an abstract idea. See, e.g., Appeal
Br. 2 (“Summary of Claimed Subject Matter,” citing Spec. ¶¶ 143, 152 as
supporting claim 1); Spec. ¶¶ 143 (“instructions to configure the transaction
processors”), 152 (“Instruction identifiers may be identifiers that uniquely
correspond to system instructions, or to administrative transactions.”); see
also id. at 159 (“The disclosed embodiments minimize the overall latency of
a transaction processing system.” (emphasis added)); Revised Guidance
(Revised Step 2A, Prong One), 84 Fed. Reg. at 52 (describing an abstract
idea category of “[c]ertain methods of organizing human activity— . . .
commercial or legal interactions (including agreements in the form of
contracts; legal obligations; advertising, marketing or sales activities or
behaviors; business relations)” (emphasis added)). Such activities are
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squarely within the realm of abstract ideas. See, e.g., Alice, 573 U.S. at 219
(in the abstract process, “the intermediary issues irrevocable instructions to
the exchange institutions to carry out the permitted transactions” (emphasis
added)); Bilski, 561 U.S. at 593 (“initiating a series of transactions” is
abstract (emphasis added)).
For these reasons, we determine that claim 1 recites a method of
organizing human activity, as recognized in the Revised Guidance, and thus,
an abstract idea. See Revised Guidance, 84 Fed. Reg. at 52.

III. Step 2A, Prong 2 (Integration into a Practical Application)
Under the Guidance, we now must determine if additional elements in
the claims integrate the judicial exception into a practical application
(see MPEP §§ 2106.05(a)–(c), (e)–(h)).4
We discern no additional element (or combination of elements)
recited in Appellant’s representative claim 1 that integrates the judicial
exception into a practical application. See Revised Guidance, 84 Fed. Reg.
at 54–55 (“Prong 2”). For example, Appellant’s claimed additional elements
(e.g., a transaction processor and memory) (1) do not improve the
functioning of a computer or other technology; (2) are not applied with any
particular machine (except for a generic computer); (3) do not effect a
transformation of a particular article to a different state; and (4) are not
applied in any meaningful way beyond generally linking the use of the

4 We acknowledge that some of the considerations at Step 2A, Prong 2 may
be evaluated under Step 2 of Alice (Step 2B of the Guidance). For purposes
of maintaining consistent treatment within the Office, we evaluate them
under Step 1 of Alice (Step 2A of the Guidance). See Revised Guidance, 84
Fed. Reg. at 55 n.25, 27–32.
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judicial exception to a particular technological environment, such that the
claim as a whole is more than a drafting effort designed to monopolize the
exception. See MPEP §§ 2106.05(a)–(c), (e)–(h). Instead, these limitations
merely serve to narrow the recited abstract idea using generic computer
components, which cannot impart patent-eligibility. See Bancorp Servs.,
L.L.C. v. Sun Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed.
Cir. 2012) (A computer “employed only for its most basic function . . . does
not impose meaningful limits on the scope of those claims.”).
Appellant’s arguments focus on limitations that we determine are part
of the judicial exception as discussed above; thus, these limitations are not
“additional elements” that can impart patent eligibility to the claim. See,
e.g., Appeal Br. 7–15; see also Revised Guidance, 84 Fed. Reg. at 55 n.24
(“USPTO guidance uses the term ‘additional elements’ to refer to claim
features, limitations, and/or steps that are recited in the claim beyond the
identified judicial exception.”). “It has been clear since Alice that a claimed
invention’s use of the ineligible concept to which it is directed cannot supply
the inventive concept that renders the invention ‘significantly more’ than
that ineligible concept.” BSG Tech LLC v. BuySeasons, Inc., 899 F.3d 1281,
1290 (Fed. Cir. 2018).
Even assuming the limitations that Appellant focuses on could be
considered additional elements, we are not persuaded the Examiner’s
rejection is in error. For example, Appellant contends,
the current claims are integrated into a practical application of
. . . preloading, and subsequently triggering execution of,
instructions, such as processing or administrative instructions,
by providing the instructions to the processor in advance in
association with an identifier and, at the desired time, merely
communicating the identifier to the system in order to trigger
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execution of the associated instruction, e.g. in a coordinated or
synchronized fashion.
Appeal Br. 7 (emphasis added). The Examiner responds, and we agree, “the
argued features that Appellant argues for such as coordination,
synchronization, pre-loading, and trigger messages are not recited in any of
the pending claims.” Ans. 10.
Appellant next contends that “[t]he claims do not attempt to
monopolize the idea but rather only the improvement as applied to a specific
technology, that of electronic transaction processing which may be used to
implement electronic trading.” Appeal Br. 7. Appellant’s argument is
nothing more than an argument for lack of preemption, which “may signal
patent ineligible subject matter” but whose “absence . . . does not
demonstrate patent eligibility.” Ariosa Diagnostics, Inc. v. Sequenom, Inc.,
788 F.3d 1371, 1379 (Fed. Cir. 2015). “Where 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.” Id.
Next, Appellant contends, “the claims recite an improvement to
communications technology not merely a business improvement,” similar to
Finjan, Inc. v. Blue Coat Systems, Inc., 879 F.3d 1299 (Fed. Cir. 2018).
Appeal Br. 8. Appellant contends that “the claims recite an improvement
over the traditional transaction processing systems that process incoming
transactions strictly based on time/order of receipt.” Id. Unlike the claims
in Finjan, however, Appellant’s claim does not improve any underlying
technology: the claim may be performed by use of generic computer
technology. Although Appellant’s Specification may possibly recite a
detailed invention, as Appellant plainly argues (Appeal Br. 8–15), claim 1
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very broadly claims mere receiving, storing, retrieving, and processing an
instruction. These activities are quintessential activities of a generic
computer. “[S]uch invocations of computers . . . that are not even arguably
inventive are insufficient to pass the test of an inventive concept in the
application of an abstract idea.” Elec. Power Grp., LLC v. Alstom S.A., 830
F.3d 1350, 1355 (Fed. Cir. 2016) (internal quotation omitted).
Accordingly, we determine that claim 1 does not integrate the judicial
exception into a practical application and, therefore, is directed to the recited
abstract idea (e.g., certain methods of organizing human activity).

IV. Step 2B (Inventive Concept)
Because we determine that the claims are directed to an abstract idea,
we next consider whether the claims include additional limitations such that
the claims amount to significantly more than the abstract idea.
Appellant contends that the Examiner fails to show that the additional
elements were well-understood, routine, and conventional in the field by
failing to follow the Office’s “Berkheimer Memorandum” (Changes in
Examination Procedure Pertaining to Subject Matter Eligibility, Recent
Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.) (April 19,
2018)). Appeal Br. 16–18. But the Examiner finds, and we agree, that the
additional elements were well-understood, routine, and conventional in the
field by stating,
Further . . . , the Examiner has cited the specific
paragraphs from the specification to support the 101 analysis.
This meets the criteria 1 of the USPTO 04/19/2018 Berkheimer
Memo [(]“1. An explanation based on an express statement in
the specification (e.g., citation to a relevant portion of the
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specification) that demonstrates the well-understood, routine,
conventional of the additional elements[”)].
Ans. 14. Specifically, in the Final Action, the Examiner relies on the
Specification as follows:
The claim recites the additional elements include an
instruction generator, a transaction receiver, transaction
processor, and system memory are the general purpose
computer as described in Applicant’s Specification, paragraphs
318-321 and Figure 11. The Specification does not describe
how they are different from the general computer components.
Further, the instructions are merely administrative tasks in an
order (see paragraphs 16, 20, 81-83, 174), and an instruction
identifiers is a token uniquely correspond to administrative
transaction (see paragraphs 142, 109, 187).
Final Act. 6. We determine the Examiner properly followed the Berkheimer
Memorandum by citing to “express statement[s] in the [S]pecification,”
which statements Appellant does not persuasively address. Berkheimer
Memorandum 3.
We further note the Specification explains that “a match engine
function 106 . . . may be implemented by one or more sets 206 of transaction
processors 208, i.e. match engines” and “[a]s used herein, a ‘match engine’
106 refers to . . . a conventional match engine.” Spec. ¶¶ 120–21 (emphasis
added). Similarly, the Specification discloses “an illustrative embodiment of
a general computer system 1100”; “[a]ny of the components of the
electronic trading system 100 discussed above may be a computer system
1100 or a component in the computer system 1100”; and “[t]he computer
system 1100 can include a set of instructions that can be executed to cause
the computer system 1100 to perform any one or more of the methods or
computer based functions disclosed herein.” Id. ¶ 279 (emphasis added).
More specifically, the computer system (including the transaction processor)
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can be any well-understood, routine, conventional computer device,
including “a server”; “a client”; “a network device such as a switch, gateway
or router”; “a personal computer (PC), a tablet PC, a set-top box (STB), a
personal digital assistant (PDA), a mobile device, a palmtop computer, a
laptop computer, a desktop computer, a communications device, a wireless
telephone, a land-line telephone, a control system, a camera, a scanner, a
facsimile machine, a printer, a pager, a personal trusted device, a web
appliance, a network router, switch or bridge, or any other machine capable
of executing a set of instructions.” Id. ¶ 280; see also id. ¶¶ 281, 294–95
(discussing breadth of the processor), ¶ 39 (discussing generic “memory
elements” such as “simple flip-flops or more complete blocks of memory”).
Thus, the Specification discloses that the claimed transaction processor and
memory were well-understood, routine, and generic.
Moreover, as we explained above, the additional limitations,
individually and as an ordered combination, merely narrow the recited
abstract ideas using generic computer components. Accordingly, we
determine that there are no additional limitations that cause the claims to
amount to significantly more than the abstract idea.
Thus, we determine no element or combination of elements recited in
claim 1 contains any “inventive concept” or adds anything “significantly
more” to transform the abstract concept into a patent-eligible application.
Accordingly, we sustain the Examiner’s rejection of claims 1–20, which
Appellant argues as a group, under 35 U.S.C. § 101 as being directed to non-
statutory subject matter in light of Alice, its progeny, and the Guidance. See
supra n.2.
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CONCLUSION
In summary:
Claims
Rejected
35
U.S.C. §
Basis Affirmed Reversed
1–20 101 Eligibility 1–20
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