Dominic Crosthwaite et al.

Patent Trials and Appeals Board

Aug 2, 2019

14450711 - (D) (P.T.A.B. Aug. 2, 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.
14/450,711 08/04/2014 Dominic Crosthwaite 03-6147-C1 6107
63710 7590 08/02/2019
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
ROBINSON, KITO R
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
08/02/2019 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 DOMINIC CROSTHWAITE and LEWIS C. FINDLAY
________________

Appeal 2018-003834
Application 14/450,7111
Technology Center 3600
________________

Before JASON J. CHUNG, JOYCE CRAIG, and
SCOTT E. BAIN, Administrative Patent Judges.

CHUNG, Administrative Patent Judge.

DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134(a) of the Final
Rejection of claims 1–9, 11–23, and 25–28.2 We have jurisdiction under
35 U.S.C. § 6(b).
We affirm.
INVENTION
The invention relates to determining whether to approve requests from
users to place trading orders. Spec. 1:5–7. Claim 1 is illustrative of the
invention and is reproduced below:

1 According to Appellants, Cantor Index LLC is the real party in interest.
App. Br. 3.
2 Claims 10 and 24 are canceled. App. Br. 19, 23.
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1. A method for managing trading order requests,
comprising:
initiating, by at least one processor, a communication
session with a remote device;
receiving, by at least one processor, an indication of a
request to place a first trading order from the remote device,,
the indication of the request comprising a product to trade and
a size of the trading order;
in response to receiving the indication of the request,
searching, by the at least one processor, a memory for a risk
factor associated with the product that is based at least
partially on historical data regarding a type of the product;
searching, by the at least one processor, data in the
memory indicative of a plurality of balances in a trading
account associated with the remote device, wherein the data
indicative of the balances comprise an available cash balance,
an available credit balance, and an available waived margin
balance;
determining, by the at least one processor, whether to
approve the first trading order based at least in part on the risk
factor and the available cash balance, the available credit
balance, and the available waived margin balance determined
for the trading account;
if the first trading order is approved, storing, by the at
least one processor, data indicative of the first trading order in
the memory; and
broadcasting, by the at least one processor, an update
regarding the first trading order to at least one other remote
device.

App. Br. 16 (Claims Appendix) (emphases added).

15. A system for managing trading order requests,
comprising:
a memory to store a trading account for a user; and
at least one processor to:
initiate a communication session with a remote device;
receive an indication of a request to place a first trading
order from a remote device, the indication of the request
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comprising a product to trade and a size of the trading order;
in response to receiving the indication of the request,
search the memory for a risk factor associated with the product
that is based at least partially on historical data regarding a
type of the product;
search data in the memory indicative of a plurality of
balances in a trading account associated with the remote
device, including an available cash balance, an available credit
balance, and an available waived margin balance;
determine whether to approve the first trading order
based at least in part on a risk factor associated with the
product and the available cash balance, the available credit
balance, and the available waived margin balance determined
for the trading account;
if the first trading order is approved, store data
indicative of the first trading order in the memory; and
broadcast an update regarding the first trading order to
at least one other remote device.

Id. at 20–21 (Claims Appendix) (emphases added).

REJECTION
Claims 1–9, 11–23, and 25–28 stand rejected under 35 U.S.C. § 101
as being directed to patent ineligible subject matter. Final Act. 5–6.

ANALYSIS
I. Claims 1–9, 11–23, and 25–28 Rejected Under 35 U.S.C. § 101
A. Legal Principles
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,
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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 Alice, 573
U.S. 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, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
(1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
(15 How.) 252, 267–68 (1854))); and manufacturing flour (Benson, 409 U.S.
at 69 (citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that “[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula.” Diehr, 450 U.S. at 187; see also id. at 192 (“We
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view respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, . . . and this principle cannot be circumvented by
attempting to limit the use of the formula to a particular technological
environment.” Id. (citing Benson and Flook); see, e.g., id. at 187 (“It is now
commonplace that an application of a law of nature or mathematical formula
to a known structure or process may well be deserving of patent
protection.”).
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 (quotation marks omitted). “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. (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.
The PTO recently published revised guidance on the application of
§ 101. USPTO’s January 7, 2019 Memorandum, 2019 Revised Patent
Subject Matter Eligibility Guidance (“Memorandum”). Under that
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
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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 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 are 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 Memorandum.
B. The Examiner’s Conclusions and Appellants’ Arguments
The Examiner concludes the present claims recite certain methods of
organizing human activity. Final Act. 5; Ans. 8. In addition, the Examiner
concludes the present claims are analogous to the claims in Intellectual
Ventures I L.L.C. v. Erie Indemnity Company, 850 F.3d 1315 (Fed. Cir.
2017). Final Act. 3, 5; Ans. 8. The Examiner also determines the present
claims do not amount to significantly more than an abstract idea itself
because the Examiner determines the abstract idea is implemented on
generic components that are well-understood, routine, and conventional
previously known to the industry. Ans. 11.
Appellants argue the Examiner oversimplifies the claims, and that the
cases cited by the Examiner are not analogous to this case. App. Br. 8–9;
Reply Br. 2–3. Appellants argue the present claims recite an improvement
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to computer related technology because they recite a set of rules that allow a
computer to perform a new function. App. Br. 10–11 (citing Spec. 3:27–
4:9)3; Reply Br. 4. Appellants argue the present claims do not preempt any
abstract idea. App. Br. 12. Appellants argue that, because there is no art
rejection remaining for our consideration, this is evidence that the present
claims recite features that were not known previously. Id. at 10, 13; Reply
Br. 4. Appellants argue independent claim 15 is different from independent
claim 1 and must be examined and interpreted on its own merit. App. Br.
14. We disagree with Appellants.
C. Discussion
1. Step 2A, Prong 1
The emphasized portions of claims 1 and 154, reproduced above (see
supra at 2), recite: (1) fundamental economic principles or practices
(including mitigating risk); and (2) commercial interactions because they
recite receiving an electronic order for a product and determining whether
the order should be approved based at least in part on the product’s historical
data and an account balance; Appellants acknowledge the present claims are
directed to this. Reply Br. 4. According to the Memorandum, fundamental

3 Appellants cite to paragraph 8 of the published disclosure (i.e., US
2014/0344138). Rather than cite to the published disclosure, we cite to the
Specification throughout our Decision.
4 Although Appellants argue claim 15 is different from claim 1 and must be
examined and interpreted on its own merit (App. Br. 14), Appellants state
that “claim 15 recites statutory subject matter for at least the same reasons
as discussed above” (emphasis added). Appellants, therefore, fail to argue
claims 2–9, 11–23, and 25–28 separately with particularity. App. Br. 7–14;
Reply Br. 2–4. We, therefore, group claims 1–9, 11–23, and 25–28 together
and refer to these claims as the “present claims.”
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economic principles or practices (including mitigating risk) and commercial
interactions fall into the category of certain methods of organizing human
activity. See Memorandum. Moreover, those certain methods of organizing
human activity are a type of an abstract idea. See id.
We, therefore, disagree with Appellants’ argument that the Examiner
oversimplifies the claims, and that the cases cited by the Examiner are not
analogous to this case. App. Br. 8–9; Reply Br. 2–3. We observe that the
Examiner concludes the claims recite certain methods of organizing human
activity and cites to Intellectual Ventures. Final Act. 3, 5; Ans. 8.
Moreover, we agree with the Examiner’s conclusion that the present claims
are analogous to the claims found to be abstract in Intellectual Ventures. In
Intellectual Ventures, the court held that the claims were drawn to “remotely
accessing and retrieving user-specified information.” Id. at 1330–1332. In
the present case and Intellectual Ventures, both sets of claims are drawn to
an abstract idea.
Because the present claims recite fundamental economic principles or
practices (including mitigating risk) and commercial interactions, which fall
into the certain methods of organizing human activity (i.e., an abstract idea),
we proceed to prong 2.
2. Step 2A, Prong 2
The present claims do not integrate the abstract idea into a practical
application because they do not impose any meaningful limits on practicing
the abstract idea. In particular, we disagree with Appellants’ argument that
claims 2, 11, and 21 recite improvements to the functioning of a computer or
to any other technology or technical field. App. Br. 10–11 (citing Spec.
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3:27–4:9); Reply Br. 4.
The alleged improvement is permitting a prospective user to have
access to a web site associated with a trading platform, apply for a credit
account, have the account approved quickly, login using the opened credit
account, and begin trading activity on the trading platform, all in one
communication session. Spec. 3:27–4:9. However, unlike the claims of
McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299, 1308–14
(Fed. Cir. 2016), the present claims are not directed to rules for lip sync and
facial expression animation or an improvement in computer technology.
Instead, claims 2, 11, and 21 are directed to an abstract idea as
discussed supra, in § I.C.1. or at best, improving an abstract idea—not a
technological improvement. The Specification indicates the additional
elements (i.e., “processor,” “remote device,” and “memory”) recited in the
present claims are merely tools used to implement the abstract idea. Spec.
3:13–16, 14:21–24, 14:26–29.
Additionally, “a claim for a new abstract idea is still an abstract idea.”
Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir.
2016) (emphasis in original). “[U]nder the Mayo/Alice framework, a claim
directed to a newly discovered law of nature (or natural phenomenon or
abstract idea) cannot rely on the novelty of that discovery for the inventive
concept necessary for patent eligibility . . . .” Genetic Techs. Ltd. v. Merial
L.L.C., 818 F.3d 1369, 1376 (Fed. Cir. 2016) (citations omitted).
Additionally, we disagree with Appellants’ argument that the present
claims are patent eligible because they do not preempt any abstract idea.
App. Br. 12. Although preemption may denote patent ineligibility, its
absence does not demonstrate patent eligibility. See FairWarning, IP, LLC
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v. Iatric Sys., Inc., 839 F.3d at 1098. For claims covering a patent-ineligible
concept, preemption concerns “are fully addressed and made moot” by an
analysis under the Mayo/Alice framework. Ariosa Diagnostics, Inc. v.
Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
With regard to Appellants’ argument that the present claims recite
features that were not known previously because there are no obviousness or
novelty rejections of the claims, (App. Br. 10, 13; Reply Br. 4), Appellants
improperly conflate the requirements for eligible subject matter (§ 101) with
the independent requirements of novelty (§ 102) and non-obviousness
(§ 103). “The ‘novelty’ of any element or steps in a process, or even of the
process itself, is of no relevance in determining whether the subject matter of
a claim falls within the § 101 categories of possibly patentable subject
matter.” Diehr, 450 U.S. at 188–89; see also Genetic Techs., 818 F.3d at
1376 (stating that, “under the Mayo/Alice framework, a claim directed to a
newly discovered law of nature (or natural phenomenon or abstract idea)
cannot rely on the novelty of that discovery for the inventive concept
necessary for patent eligibility”).
Appellants do not make any other arguments pertaining to step 2A,
prong 2. Because the present claims recite an abstract idea that is not
integrated into a practical application, we proceed to Step 2B.
3. Step 2B
We agree with the Examiner’s determination that the abstract idea is
implemented on generic components that are well-understood, routine, and
conventional. Ans. 11. The Specification supports the Examiners
determination in this regard because it explains that “processor,” “remote
device,” and “memory” are generic components. Spec. 23:13–16, 14:21–24,
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14:26–29. Appellants’ Specification indicates these elements were well-
understood, routine, and conventional components because it describes them
at a high level of generality and in a manner that indicates that they are
sufficiently well-known. Id.
Appellants do not argue claims 2–9, 11–23, and 25–28 separately with
particularity, but assert the § 101 rejection of those claims should be
withdrawn for at least the same reasons as argued for independent claim 1.
App. Br. 7–14; Reply Br. 2–4. Accordingly, we sustain the Examiner’s
rejection of: (1) independent claims 1 and 15; and (2) dependent claims 2–9,
11–14, 16–23, and 25–28 under 35 U.S.C. § 101.
We have only considered those arguments that Appellants actually
raised in the Briefs. Arguments Appellants could have made, but chose not
to make, in the Briefs have not been considered and are deemed to be
waived. See 37 C.F.R. § 41.37(c)(1)(iv).

DECISION
We affirm the Examiner’s decision rejecting claims 1–9, 11–23, and
25–28 under 35 U.S.C. § 101.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv).
AFFIRMED