Edvardson, Hannes Jörgen.

Patent Trials and Appeals Board

Nov 16, 2020

2019004183 (P.T.A.B. Nov. 16, 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.
13/520,362 09/21/2012 Hannes Jörgen Edvardson 11407.0004-00000 2983
22852 7590 11/16/2020
FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER
LLP
901 NEW YORK AVENUE, NW
WASHINGTON, DC 20001-4413
EXAMINER
FELTEN, DANIEL S
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
11/16/2020 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):
regional-desk@finnegan.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte HANNES JÖRGEN EDVARDSON
________________

Appeal 2019-004183
Application 13/520,362
Technology Center 3600
____________

Before BIBHU R. MOHANTY, NINA L. MEDLOCK, and
MATTHEW J. McNEILL, Administrative Patent Judges.

McNEILL, Administrative Patent Judge.

DECISION ON APPEAL

Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner’s
rejection of claims 1‒28, which are all the claims pending in this application.
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 the real party in interest as Cinnober
Financial Technology AB. Appeal Br. 1.
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STATEMENT OF THE CASE
Introduction
Appellant’s application relates to a trading system that matches orders
using a dynamic programming algorithm. Spec. 1:4‒5. Claim 1 is illustrative
of the appealed subject matter and reads as follows:
1. An automated trading system, comprising:
an interface for receiving a plurality of electronic orders
over a network from a plurality of networked member terminals
comprising bid orders and ask orders;
a memory storing instructions; and
at least one processor to execute the instructions to:
store the plurality of orders;
sort the plurality of orders in the memory based on
a time at which each of the orders was received at the
interface;
identify the subset sums of the bid orders and the
subset sums of the ask orders of the plurality of orders
by:
initializing a procurement subset sums
matrix to zero,
creating a first bit pattern by setting a first
column of a first row of the procurement subset
sums matrix to one,
adding an order from the plurality of orders
to a first one of the subsets,
copying the first bit pattern of the first row
to a second row of the procurement subset sums
matrix,
determining a quantity of the added order,
creating a second bit pattern by shifting the
first bit pattern a number of positions
corresponding to the determined quantity of the
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added order and summing the shifted first bit
pattern with the first bit pattern,
storing the second bit pattern to the second
row of the procurement subset sums matrix, and
creating a disposal subset sums matrix with
rows of the disposal subset sums matrix
corresponding to subsets of the ask orders;
match a combination of bid orders to a
combination of ask orders based on a highest column of
the disposal subset sums matrix with a one bit in both the
procurement subset sums matrix and the disposal subset
sums matrix;
generate aggregated computer instructions to
execute electronic create trades between the combination
of bid orders and the combination of ask orders; and
transmit to the networked member terminals over
the network, using the interface and based on the
executed electronic trades, electronic instructions causing
each member terminal to display an indication that a
corresponding received electronic order of a respective
member terminal has been matched.
The Examiner’s Rejection
Claims 1‒28 stand rejected under 35 U.S.C. § 101 as being directed to
patent-ineligible subject matter. See Final Act. 3‒5.
ANALYSIS
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).
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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. Alice, 573 U. S. 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 183 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 176; see also id. at 191 (“We
view respondents’ claims as nothing more than a process for molding rubber
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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. (citation omitted) (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. (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.
In January 2019, the PTO published revised guidance on the
application of § 101. USPTO’s January 7, 2019 Memorandum, 2019 Revised
Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (“Revised
Guidance”). 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
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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 of 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 Revised Guidance.
Revised Guidance Step 1
Step 1 of the Revised Guidance asks whether the claimed subject
matter falls within the four statutory categories of patentable subject matter
identified by 35 U.S.C. § 101: process, machine, manufacture, or
composition of matter. See Revised Guidance. Independent claim 1 recites a
“system” and independent claim 15 recites a “method.” Appellant does not
argue the Examiner erred in concluding claims 1 and 15 fall within the four
statutory categories of patentable subject matter. We agree with the
Examiner’s conclusion because claim 1 falls within the machine or
manufacture categories and claim 15 falls within the process category.
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Revised Guidance Step 2A, Prong 1
Under Step 2A, Prong 1 of the Revised Guidance, we determine
whether the claims recite 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). See Revised Guidance.
The Examiner determines claim 1 is directed to a trading system that
uses a mathematical algorithm to determine the optimal number of orders
that can be matched. See Final Act. 3. The Examiner determines this is a
fundamental economic practice that relates to commerce or agreements
between people. Id. at 4. The Examiner also determines claim 1 recites
receiving, storing, sorting, identifying, transmitting, and displaying data,
which is similar to the abstract idea of collecting information, analyzing it,
and displaying certain results. Id. at 4 (citing Electric Power Group, LLC v.
Alstom, 830 F.3d 1350 (Fed. Cir. 2016)). The Examiner concludes claim 1
recites certain methods of organizing human activity and mathematical
relationships and formulas. Id. at 4.
We agree with the Examiner that the steps of the claimed method,
under their broadest reasonable interpretation, recite a trading system that
uses a mathematical algorithm to determine the optimal number of orders
that can be matched. In particular, claim 1 recites, in part, “receiving a
plurality of electronic orders . . . comprising bid orders and ask orders.” A
processor executes instructions to “store the plurality of orders,” “sort the
plurality of orders,” “identify the subset sums of the [orders],” “match a
combination of bid orders to a combination of ask orders,” and “generate
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aggregated computer instructions to execute electronic create trades between
the combination of bid orders and the combination of ask orders.”
These steps characterize receiving bid and ask orders, storing the
orders, and sorting them in preparation for processing. The “identify the
subset sums” step is broken down in detail explaining the mathematical
algorithm that matches bid orders to ask orders. The remaining steps arrange
for execution of trades according to these matched bids and report the
results. Collectively, these steps recite fundamental economic principles or
practices because matching ask orders to bid orders is fundamental to the
practice of securing trades between potential buyers and potential sellers.
These steps also recite commercial or legal interactions because matching
ask orders to bid orders creates a commercial interaction between parties.
Claim 1 also recites, in part, “initializing a procurement subset sums
matrix to zero,” “creating a first bit pattern by setting a first column of a first
row of the procurement subset sums matrix to one,” “adding an order from
the plurality of orders to a first one of the subsets,” “copying the first bit
pattern of the first row to a second row of the procurement subset sums
matrix,” “determining a quantity of the added order,” “creating a second bit
pattern by shifting the first bit pattern a number of positions corresponding
to the determined quantity of the added order and summing the shifted first
bit pattern with the first bit pattern,” “storing the second bit pattern to the
second row of the procurement subset sums matrix,” and “creating a
disposal subset sums matrix with rows of the disposal subset sums matrix
corresponding to subsets of the ask orders.”
These steps characterize a series of mathematical operations
performed according to a mathematical algorithm to identify subset sums of
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the bid orders and ask orders using two matrices. We agree with the
Examiner that these steps recite mathematical relationships or formulas.
Accordingly, we conclude claim 1 recites fundamental economic
practices or principles and commercial or legal interactions, which fall
within the certain method of organizing human activity category of abstract
ideas identified in the Revised Guidance. Claim 1 also recites mathematical
relationships or formulas, which fall within the mathematical concepts
category of abstract ideas identified in the Revised Guidance.
Revised Guidance Step 2A, Prong 2
Under Step 2A, Prong 2 of the Revised Guidance, we next determine
whether the claims recite additional elements that integrate the judicial
exception into a practical application (see MPEP § 2106.05(a)–(c), (e)–(h)).
To integrate the exception into a practical application, the additional claim
elements must, for example, improve the functioning of a computer or any
other technology or technical field (see MPEP § 2106.05(a)), apply the
judicial exception with a particular machine (see MPEP § 2106.05(b)), effect
a transformation or reduction of a particular article to a different state or
thing (see MPEP § 2106.05(c)), or apply or use the judicial exception in
some other meaningful way beyond generally linking the use of the judicial
exception to a particular technological environment (see MPEP
§ 2106.05(e)). See Revised Guidance.
The “additional elements” recited in claim 1 include “an interface,” “a
network,” “a plurality of networked member terminals,” “a memory,” and
“at least one processor.” None of these additional elements constitutes
“additional elements that integrate the exception into a practical
application.”
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Appellant argues claim 1 defines novel subject matter, not well-
known economic activity. See Appeal Br. 17. Appellant’s argument is not
persuasive of Examiner error because even if the claimed algorithm is novel,
a claim directed to a new abstract idea is still directed to an abstract idea.
Elec. Commc’n Techs., LLC v. ShoppersChoice.com, LLC, 958 F.3d 1178,
1182–83 (Fed. Cir. 2020). Indeed, “[w]e may assume that the techniques
claimed are ‘[g]roundbreaking, innovative, or even brilliant,’ but that is not
enough for eligibility.” SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161,
1163 (Fed. Cir. 2018) (quoting Ass’n for Molecular Pathology v. Myriad
Genetics, Inc., 569 U.S. 576, 591, 133 S. Ct. 2107, 186 L.Ed.2d 124 (2013)).
Appellant also argues claim 1 is not ineligible simply because it
recites mathematical operations. See Appeal Br. 17‒18. Appellant’s
argument is not persuasive of Examiner error because the mere recitation of
mathematical operations in the claim is not enough to ensure patent
ineligibility or patent eligibility. The relevant issue is whether claim 1
integrates these mathematical relationships and formulas (and the other
identified abstract ideas) into a practical application.
Appellant also argues claim 1 is directed to a technical improvement.
See Appeal Br. 19‒25. In particular, Appellant argues that compared to prior
art systems, claim 1 performs the subset sum determination faster, at a high
speed. Id. at 19. Appellant argues claim 1 focuses on a particular method of
determining subset sums that provides a technical improvement. Id. at 22
(citing Spec. 2:30‒3:2).
Appellant has not persuaded us of Examiner error. The focus of
claim 1 is not on an improvement to computers or another technology, but
rather on using generic computer components to perform the recited
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mathematical algorithm to match ask orders and bid orders. Thus, claim 1
focuses on the abstract idea itself, rather than any technical improvement.
The advantage identified by Appellant—comparatively fast processing of
the claimed algorithm—is achieved by the algorithm, not changes to
computers or any particular technology. The alleged improvements
identified by Appellant do not “enable[] a computer . . . to do things it could
not do before.” Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1305
(Fed. Cir. 2018). Indeed, “the [S]pecification is silent as to any specific
structural or inventive improvements in computer functionality related to
this claimed system.” See Customedia Techs., LLC v. Dish Network Corp.,
951 F.3d 1359, 1365 (Fed. Cir. 2020).
Moreover, our reviewing court has “made clear that mere automation
of manual processes using generic computers does not constitute a
patentable improvement in computer technology.” Credit Acceptance Corp.
v. Westlake Servs., 859 F.3d 1044, 1055 (Fed. Cir. 2017). Like the claims in
Credit Acceptance, the focus of claim 1 is on the abstract idea itself, “and
the recited generic computer elements ‘are invoked merely as a tool.’” Id.
(citing Enfish, 822 F.3d 1327); see also Versata Dev. Grp., Inc. v. SAP Am.,
Inc., 793 F.3d 1306, 1334 (Fed. Cir. 2015) (collecting cases).
The claimed additional elements are used to achieve the claimed
results and are not focused on “a specific means or method that improves the
relevant technology.” McRO, Inc. v. Bandai Namco Games Am., Inc.,
837 F.3d 1299, 1314 (Fed. Cir. 2016). The additional elements of claim 1,
including those identified above, comprise generic computer elements that
are invoked as a tool to implement this improved mathematical algorithm or
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business practice, as confirmed by the Specification. See, e.g., Spec. 12:17‒
31.
For these reasons, Appellant has not persuaded us of Examiner error
with respect to Step 2A, Prong 2 of the Revised Guidance. We, therefore,
conclude the judicial exception is not integrated into a practical application
under the Revised Guidance.
Revised Guidance Step 2B
Under Step 2B of the Revised Guidance, we next determine whether
the claims recite an “inventive concept” that “must be significantly more
than the abstract idea itself, and cannot simply be an instruction to
implement or apply the abstract idea on a computer.” BASCOM Glob.
Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1349 (Fed. Cir.
2016). There must be more than “computer functions [that] are ‘well-
understood, routine, conventional activit[ies]’ previously known to the
industry.” Alice, 573 U.S. at 225 (second alteration in original) (quoting
Mayo, 566 U.S. at 73).
Appellant argues claim 1 recites “significantly more” than an abstract
idea because the claimed mathematical algorithm is not well known and is
an unconventional technological solution. See Appeal Br. 25‒27. Appellant
argues the Examiner fails to support the finding that the algorithm is well
known. Id. at 25.
Appellant’s argument that the Examiner fails to support the finding
that the algorithm is well known is unpersuasive of Examiner error. First, as
noted above, a novel abstract idea is still an abstract idea. Second, the
Examiner finds claim 1 does not recite an inventive concept because the
claimed additional elements, which the Examiner identifies as “an interface,
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processor, and memory,” are generic computer components performing
generic computer functions. See Final Act. 4. The Examiner supports this
finding by citing Electric Power Group, which held generic computer
components that performed the functions of collecting information,
analyzing it, and displaying certain results did not recite “significantly more”
than the abstract idea. See id. Appellant has not persuasively identified, nor
have we found, any “additional elements” that amount to “significantly
more” than the abstract idea recited by claim 1. As noted above, the
Specification confirms the generic nature of the claimed additional elements.
See, e.g., Spec. 12:17‒31.
We, therefore, sustain the patent-ineligible subject matter rejection of
claim 1. We also sustain the rejection of independent claim 15, which
Appellant argues are patent eligible for the same reasons. See Appeal
Br. 15‒27; Reply Br. 4‒9.
Appellant argues the Examiner errs in rejecting claims 5, 6, 19, and 20
because these dependent claims set forth additional unconventional
technological solutions to address a technological problem. See Appeal
Br. 27. Appellant does not provide separate arguments for the remaining
dependent claims. See id. Claims 5, 6, 19, and 20 recite additional details
regarding the execution of the algorithm recited in the independent claims.
These additional details further narrow the scope of the claimed algorithm,
but do not provide any technological solutions that differ in kind from the
independent claims. Thus, Appellant has not persuaded us of error for the
same reasons as explained above with respect to claim 1. We, therefore,
sustain the rejection of dependent claims 2‒14 and 16‒28.

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DECISION SUMMARY
In summary:
Claims Rejected 35 U.S.C. § Basis Affirmed Reversed
1‒28 101 Eligibility 1‒28

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)(1)(iv). See
37 C.F.R. § 41.50(f).

AFFIRMED