Ex Parte 5963923 et al

Patent Trial and Appeal Board

Nov 25, 2014

90011479 (P.T.A.B. Nov. 25, 2014)

UNITED STATES PATENT AND TRADEMARKOFFICE
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.
90/011,479 02/07/2011 5963923 Garber 2 - Reexam 6003
24112 7590 11/26/2014
COATS & BENNETT, PLLC
1400 Crescent Green, Suite 300
Cary, NC 27518
EXAMINER
RIMELL, SAMUEL G
ART UNIT PAPER NUMBER
3992
MAIL DATE DELIVERY MODE
11/26/2014 PAPER
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.
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________________

Ex parte Technology Research Group, LLC
Patent Owner and Appellant
____________________

Appeal 2014-007891
Reexamination Control 90/011,479
Patent 5,963,923
Technology Center 3900
____________________

Before CARLA M. KRIVAK, MICHAEL J. STRAUSS, and
CHARLES J. BOUDREAU, Administrative Patent Judges.

STRAUSS, Administrative Patent Judge.

DECISION ON APPEAL

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This is an appeal under 35 U.S.C. § 134(b) from the Examiner’s final
rejection of claims 1–16, which are subject to reexamination. Final Office
Action (Aug. 2, 2013) (hereinafter “FOA”). We have jurisdiction under 35
U.S.C. §§ 6(b) and 306. We heard oral arguments on November 12, 2014.
We AFFIRM.

STATEMENT OF THE CASE

Real Party in Interest
The real party in interest is the current patent owner, Technology
Research Group, LLC. of Washington, D.C. (hereinafter “TRG”). App. Br.
4, USPTO assignment records.

Reexamination Proceedings
A request for ex parte reexamination of US Patent 5,963,923
(hereinafter the “’923 patent”) was filed on February 7, 2011, by Bradley C.
Wright of the law firm of Banner & Witcoff, Ltd., requesting the
reexamination of claims 1–28 and assigned Reexamination Control No.
90/011,479. Claims 17–28 are canceled (Amendment filed May 29, 2012)
and independent claims 1, 9, and 10 are amended (FOA 2). All pending
claims stand rejected under 35 U.S.C. § 103(a).

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Related Litigation Proceedings
Appellant identifies the ’923 patent is the subject of litigation styled:
Chicago Mercantile Exchange, Inc. et al v. Technology Research Group,
LLC, Case No. 1:09-cv-03895 (N.D. Ill.)

Appellant’s Claimed Invention
The ’923 patent, entitled “System and Method for Trading Having a
Principal Market Maker,” issued October 5, 1999, to Howard B. Garber,
(“Inventor”), based on Application 08/868,200 filed June 3, 1997, and
claiming priority to Provisional Application 60/030,584 filed November 12,
1996.
The Abstract of the ’923 patent describes the invention as directed to
A system and method . . . for linking a Rolling Spot Currency
contract with a Principle [sic] Market Maker program. In one
aspect of the invention, the system includes an electronic
brokerage and trading network having at least one computer
coupled to receive and transmit bids and offers for international
currency trading; a display terminal and input; and a principal
market maker computer coupled to the electronic brokerage and
trading network wherein the principal market maker computer
is operative to receive and transmit the bids and offers and
execute international currency trades by maintaining a market
for such currencies.
’923 Patent, Abstract.

The Claims
Claim 9, reproduced below, is representative of the claimed subject matter:

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9. A principal market maker system for trading commodities,
comprising:
a principal market maker futures computer configured to perform the
functions of a principal market maker for a commodity futures bid
and offer market, said principal market maker futures computer
operative to receive and automatically execute primary commodity
purchase and sale trades and orders and continuously maintain the
commodity futures bid and offer market;
a principal market maker options computer configured to perform the
functions of a principal market maker for a commodity options bid
and offer market, said principal market maker options computer
operative to receive and automatically execute secondary
commodity purchase and sale trades and orders and continuously
maintain the commodity options bid and offer market; and
a bi-directional communications link coupled between the futures and
options computers, the bi-directional communications link to
facilitate intermarket trading to manage risk taken in a position
resulting from a trade in either market.

References
The prior art relied upon by the Examiner in rejecting the claims on
appeal is:
Wagner US 4,980,826 Dec. 25, 1990
Togher US 6,014,627 Jan. 11, 2000
APA Admitted Prior Art
Globex Product
Summary
“Product Summary---GLOBEX: A Global
Automated Transaction System for Futures and
Options,” published by the Financial Markets
Unit of the Federal Reserve Bank of Chicago
(June 1990)
Securities Week
“CME Gets CFTC Blessing to Add French Franc
to Currency Product Line,” published by
Securities Week (September 20, 1993)
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Encyclopedia of
Computer Science
Encyclopedia of Computer Science, third edition,
by Ralston et al. (1993)
Baird
Option Market Making: Trading and Risk
Analysis for the Financial and Commodity
Option Markets, by Allen Jan Baird (1993)

REJECTIONS1
The Examiner made the following rejections:
Claims 9–11, 15, and 16 stand rejected under 35 U.S.C. § 103(a) as
being unpatentable over Globex Product Summary, APA, and Togher. Ans.
2–9.
Claims 1–3 and 7 stand rejected under 35 U.S.C. § 103(a) as being
unpatentable over Globex Product Summary, APA, Togher, and Securities
Week. Ans. 9–14.
Claims 12–14 stand rejected under 35 U.S.C. § 103(a) as being
unpatentable over Globex Product Summary, APA, Togher, and Wagner.
Ans. 14–15.
Claim 5 stands rejected under 35 U.S.C. § 103(a) as being
unpatentable over Globex Product Summary, APA, Securities Week,
Togher, and Encyclopedia of Computer Science. Ans. 16.

1 Appellant argues the rejection of claim 9. Separate patentability is not
argued for claims 1–8 and 10–16. Merely restating with respect to a second
claim an argument, previously presented with respect to a first claim, is not
an argument for separate patentability of the two claims. Therefore, based
on Appellant’s arguments, we decide the appeal of claims 1–16 based on
claim 9 alone. See 37 C.F.R. § 41.37(c)(1)(vii).

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Claim 4 stands rejected under 35 U.S.C. § 103(a) as being
unpatentable over Globex Product Summary, APA, Securities Week,
Togher, and Baird. Ans. 17–18.
Claims 6 and 8 stand rejected under 35 U.S.C. § 103(a) as being
unpatentable over Globex Product Summary, APA, Securities Week,
Togher, and Wagner. Ans. 18–19.

Appellant’s Contentions
1. “[T]he phrase ‘principal market maker [futures/options] computer’
indicates a computer that performs the functions of a principal market
maker, as opposed to a computer that is operated by a human market
maker to perform market making functions.” App. Br. 14.
2. The prior art teaches passive order matching systems, which do not act as
a counter-party for received orders and do not execute a trade unless
there is a matching bid or offer from another trader and are therefore
incapable of maintaining a market, the main function of a principal
market maker. App. Br. 16–17.
3. The prior art central computers, which receive, match, and execute
orders, and remote terminals, which receive but do not execute orders,
fail to disclose a single computer that performs both functions of
automatically executing trades and maintaining markets. App. Br. 18.
4. The prior art fails to disclose “a trading system having two principal
market maker computers connected by a bi-directional link.” App. Br.
19.
5. “Secondary Considerations Indicate That the Invention Was Non-
Obvious.” App. Br. 20–22.
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ANALYSIS
We have reviewed the Examiner’s rejections in light of Appellant’s
arguments the Examiner has erred. We disagree with Appellant’s
conclusions. We adopt as our own (1) the findings and reasons set forth by
the Examiner in the action from which this appeal is taken (FOA 2–19) and
(2) the reasons set forth by the Examiner in the Examiner’s Answer in
response to Appellant’s Appeal Brief (FOA 19–25, Ans. 19–33) and concur
with the conclusions reached by the Examiner. We highlight the following
for emphasis.
1. Construction of “Principal Market Maker . . . Computer”
In support of contention 1 Appellant argues “[b]ased on the language
of claim [9], the term ‘principal market maker [(PMM)] computer’ should be
construed to mean a computer programmed to perform the functions of a
principal market maker, as opposed to a computer that is operated by a
human market maker to perform market making functions.” App. Br. 15.
Appellant argues such a construction is not only consistent with the
Specification but, by describing the GLOBEX computer as a prior art order-
matching system, discloses the disputed PMM computer to be different from
an order-matching system. App. Br. 16. The Examiner responds by finding
Appellant’s disclosed system is also an order matching system that may be
used by human market makers. Ans. 24. According to the Examiner:
FIGS 2, 3 and 10 of the Patent under reexamination
essentially illustrates how trading activity is performed by
human traders, over the electronic system, exactly as human
traders perform their trading activities over the GLOBEX
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Product Summary and Tougher et al prior art systems. For
example, FIG 2 allows for human traders to execute matched
trades using “voice, hand signal, telephone, touch, and voice
activation computers”. FIG 3 allows for trading using
“telephone, voice activation or touch screen”. FIG 10 allows
trading by “touching trader acronyms with finger or pencil”.
The assertion that the claimed invention distinguishes over the
prior art by being fully automated and not using any human
traders is simply an erroneous distinction which is not
supported by the disclosure of the Patent under reexamination.
Ans. 24.
We find Appellant’s contention unpersuasive of error. Appellant’s
Specification does not provide an explicit definition of the disputed PMM
computer nor are there express limitations of the extent of permissible
human participation in performance of PMM computer supported
functionality as opposed to, for example, an order-matching system. To the
contrary, as found by the Examiner, Appellant’s Specification discloses
human interaction and activities. Id. Furthermore, by specifying that the
PMM computer must “automatically execute secondary commodity
purchase and sale trades and orders,” it is reasonable to conclude the
remaining actions, which were not specified to occur automatically, may
include human involvement. We further note, according to Appellant’s
Specification, even automatic execution may include human intervention.
See Ans. 30. Therefore, we disagree that under a broad but reasonable
interpretation, the disputed PMM computer excludes a computer that is
operated by a human market maker to perform market making functions.
Furthermore, rather than remaining silent about what functions are to
be performed by the disputed PMM computer in performing the functions of
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a PMM, claim 9 requires the PMM computer be operative to receive and
automatically execute primary/secondary commodity purchase and sale
trades and orders and continuously maintain the commodity futures/options
bid and offer market. Because claim 9 lists specific actions required by a
PMM computer, we decline to import limitations from the Specification to
supplement by inference those which are explicitly included. Although we
do not hold the express mention of particular required functions excludes all
others, neither do we find it proper to import into the claim that which
Appellant omits.
For the reasons supra we are not persuaded the Examiner erred in
interpreting claim 9 as not requiring the automatic performance of all
functions of a PMM disclosed in the Specification.
2. Disclosure of a Principal Market Maker Computer
Appellant argues the prior art discloses passive order matching
systems which fail to continuously maintain a two-sided bid and offer
market as required by claim 9. App. Br. 16–17. Appellant argues
The central computers in the GLOBEX and Togher systems do
not act as a counter-party for received orders and will not
execute a trade unless there is a matching bid or offer from
another trader [and, therefore,] are incapable of maintaining a
market, which is the main function of a principal market maker.
App. Br. 17. Appellant argues, under a proper construction of PMM
computer as urged supra, the trader workstations in Togher do not constitute
a PMM computer as recited in claim 9 because, while providing a means by
which a human market maker enters orders, the trader workstations are not
themselves configured to perform the function of a PMM. Id. The
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Examiner responds by finding it is the combination of Globex Product
Summary, APA, and Togher, not Togher alone, which is relied upon for
teaching or suggesting the disputed PMM functionality. Ans. 28. The
Examiner concludes “it would have been obvious . . . to modify the
GLOBEX system . . . to allow the parties designated as ‘market makers’ in
the GLOBEX System to function as ‘principal market makers’ so as to
continuously maintain a two-sided bid and offer market for designated
products. Ans. 29 (citation to APA omitted).
We agree with the Examiner and find Appellant’s contention and
related arguments unpersuasive of error. For the reasons supra, we find the
Examiner’s interpretation of PMM computer and the required functionalities
to be reasonable and consistent with Appellant’s Specification. In particular,
we are not persuaded the claimed PMM computer must perform all the
functions of a PMM, including “continuously maintain[ing] the commodity
[futures/options] bid and offer market” as required by claim 9, autonomously
without human intervention. Furthermore, insofar as the asserted
combination of prior art teaches or suggests futures and options computers
operative to receive and execute primary and secondary commodity
purchase and sales trades and orders (FOA 3–5, Ans. 21–23), we further
agree the combination teaches or suggests modifying the Globex system to
allow market makers to function as PMMs so as to continuously maintain a
two-sided bid and offer market as required by claim 9.

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3. Principal Market Maker Computer That Both Automatically Executes
Trades and Maintains Markets
Appellant’s contention is based on a claim interpretation which we
conclude is narrower than the broadest reasonable interpretation consistent
with Appellant’s Specification and is, therefore, unpersuasive of error. In
particular, Appellant argues the prior art central computers “are passive
order matching systems and do not act as a counter-party in any trade and do
not ‘continuously maintain the commodity [futures/options] bid and offer
market’ [as required by claim 9].” App. Br. 18. Appellant further argues,
although the remote terminals of Globex and Togher receive offers from a
trader or market maker, the terminals themselves do not execute trade orders
and are not PMM computers. Id. The Examiner responds by finding
(a) “‘automatic execution’ simply means that some automated structure (i.e.
computer) facilitates the trading” (Ans. 30), (b) Appellant’s Specification
discloses trades are executed automatically by having a trader manually
interact with a terminal thereby not excluding manual intervention (id.), and
(c) the claims do not require the order matching function to occur at a PMM
terminal, i.e., in contrast to a computer system of a terminal and central
computer (id.). The Examiner further finds Togher discloses a trading
terminal that is specifically programmed as a market maker’s computer and,
as a result, “is operative to maintain a market by acting as a market maker.”
Id.
We are not persuaded of error by Appellant’s argument. We disagree
the Examiner “avoids [finding] the dual function of the principal market
maker computers recited in claim 9.” App. Br. 18. The Examiner finds
“GLOBEX will automatically execute matching bids and offers” (Ans. 4,
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23) and APA discloses continuously maintaining a commodity
futures/options bid and offer market (Ans. 4–5, 22–23). We also are not
persuaded of error by Appellant’s argument that because the remote
terminals do not independently execute trade orders they fail to teach the
disputed limitation. It is sufficient the Globex and Togher terminals work in
concert with a central computer to teach the disputed execution of orders
required by claim 9, which does not require trade and order execution by a
specific unitary piece or location of equipment.

4. Bi-Directional Link between Two Principal Market Maker Computers to
Facilitate Risk Transfer
Appellant argues “[n]either the GLOBEX Product Summary nor
Togher patent discloses a trading system having two principal market maker
computers connected by a bi-directional link.” App. Br. 19. We disagree.
The Examiner finds and we agree Globex’s description of an active arbitrage
existing across CME futures and interbank markets and Togher’s third party
providing a linkage between two market makers each teach or suggest a bi-
directional link between respective PMM computers to facilitate risk
transfer.
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5. Secondary Considerations
Appellant further argues long-felt need, widespread skepticism, and
praise for systems implemented by the Chicago Mercantile Exchange (CME)
and Chicago Board of Trade (CBOT ) are “secondary considerations
indicat[ing] that an electronic trading system with a principal market maker
computer was not obvious at the time of the filing of the ’923 patent.” App.
Br. 19–22. The Examiner responds by finding the argued evidence “do not
refer to long felt need for the features determined to have been obvious or a
skepticism of experts in the art” and, instead, the assertions “appear to be no
more than attorney arguments superimposed over evidence showing neither
[long felt need or widespread skepticism] and having no bearing on the
issues of obviousness.” Ans. 31–32. The Examiner concludes “[n]one of
the evidence discussed by Patent Owner meet the criteria for demonstrating
‘long felt need’ or ‘widespread skepticism’, and thus do not establish a case
for non-obviousness with respect to any of the issues.” Ans. 32–33.
We have considered the totality of the record, weighed the evidence of
obviousness found in the references against the proffered countervailing
evidence of and arguments for nonobviousness, and find Appellants have not
successfully rebutted the prima facie case of obviousness. Furthermore,
other than summarizing the evidence presented (App. Br. 20-22),
Appellants’ Reply Brief fails to rebut or even address the Examiner’s
reasons for finding the evidence insufficient. Therefore, on the record
before us, we agree with the Examiner the argued evidence of secondary
considerations is insufficient to overcome the conclusion of obviousness.
See Ans. 31-33.
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For the reasons supra, we are unpersuaded by Appellant’s contentions
of Examiner error. Accordingly, we sustain the rejections of independent
claim 9 and, for the same reasons, independent claim 10 under 35 U.S.C.
§ 103(a) over Globex Product Summary, APA, and Togher, and independent
claim 1 over Globex Product Summary, APA, Togher, and Securities Week,
together with the rejections of dependent claims 2, 3, 7, 11, 15, and 16,
which are not separately argued. For the same reasons, we further sustain
the rejections of dependent claims 4–6, 8, and 12–14, not separately argued.
We further note in passing the only matters before this Board in
review of reexamination proceedings under 35 U.S.C. § 301 involve prior art
consisting of patent or printed publications. Therefore, we do not consider
whether the claims define patentable subject matter under 35 U.S.C. § 101,
particularly in light of recent precedent including Alice Corp. v. CLS Bank
International, 134 S. Ct. 2347 (2014).

CONCLUSION
We conclude the Examiner did not err in rejecting claims 1–16 under
35 U.S.C. § 103(a).

DECISION
The Examiner’s decision that claims 1–16 are unpatentable over the
prior art is affirmed.

TIME PERIOD FOR RESPONSE
Requests for extensions of time in this ex parte reexamination
proceeding are governed by 37 C.F.R. § 1.550(c). See 37 C.F.R. § 41.50(f).
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AFFIRMED

For Appellant/Patent Owner:

David E. Bennett
COATS & BENNETT, PLLC
1400 Crescent Green, Suite 300
Cary, NC 27518

For Third Party Requester:

Banner & Witcoff, LTD
1100 13th Street N.W.
Suite 1200
Washington, DC 20005-4051

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