Ex Parte Adcock et al

Patent Trial and Appeal Board

Feb 1, 2019

11416913 (P.T.A.B. Feb. 1, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/416,913 05/03/2006
35811 7590 02/05/2019
IP GROUP OF DLA PIPER LLP (US)
ONE LIBERTY PLACE
1650 MARKET ST, SUITE 4900
PHILADELPHIA, PA 19103
UNITED ST A TES OF AMERICA
FIRST NAMED INVENTOR
Paul D. Adcock
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
NGI-14-1147R 8356
EXAMINER
LICKTEIG, BLANE A
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
02/05/2019 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):
pto. phil@dlapiper.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte PAUL D. ADCOCK, MICHAEL A. CORMACK,
THOMAS F. HALLER, and ROBERT A. HILL
Appeal2018-000825 1
Application 11/416,913
Technology Center 3600
Before MURRIEL E. CRAWFORD, MICHAEL W. KIM, and
PHILIP J. HOFFMANN, Administrative Patent Judges.
KIM, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
This is an appeal from the Examiner's Final rejection of claims 1--4,
8-14, 16, 17, and 19-30. We have jurisdiction to review the case under 35
U.S.C. §§ 134 and 6.
The invention relates generally to a financial instrument auction that
executes concurrently, but separately, from a regular continuous limit order
matching process. Spec. ,r,r 6, 19.
1 The Appellants identify NYSE Group, Inc. as the real party in interest.
Appeal Br. 1.
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Application 11/416,913
Independent claim 1 is illustrative:
1. A method of parallel processing order data to improve order
throughput comprising:
providing a posting market center of a computer system
having at least one non-transitory memory storing executable
program code and at least one processor executing the program
code stored in the memory, the posting market center further
compnsmg:
an order matching engine defined by code included
in the program code, the order matching engine further
compnsmg:
a continuous matching engine having at least one
continuous matching routine configured to execute a continuous
matching process, and
an unpriced auction order engine having at
least one unpriced auction order routine configured to execute an
unpriced auction order process,
the order matching engine further configured to
control simultaneous operation of the continuous matching
engine and the unpriced auction order engine, such that the at
least one continuous matching engine routine and the at least one
unpriced auction order routine execute concurrently and
separately to process the order data in parallel,
a public order book, and
an unpriced auction order book that is separate from
the public order book; and
processing, by the order matching engine, the order
data in parallel, comprising:
(a) receiving one or more limit orders and market
orders at the posting market center, wherein each of the one or
more limit orders and market orders specifies a quantity of shares
or contracts to be traded and each market order is an unpriced
buy order or an unpriced sell order;
(b) specifying a scheduled auction time at which an
auction is configured to commence, wherein the scheduled
auction time is after the opening of trading on a primary listing
market center of an issue and before the close of trading on the
primary listing market center of the issue;
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( c) executing, by the order matching engine, steps
(c)(i)-(c)(v) sequentially in order before the scheduled auction
time:
( c )(i) determining, for each received order of
the received one or more limit orders and market orders, whether
the received order is a limit order or a market order and
segregating the one or more limit orders from the one or more
market orders;
( c )(ii) automatically directing only all the
segregated limit orders to the continuous matching engine on the
computing system;
( c )(iii) causing the continuous matching
engine on the computing system to execute a continuous
matching process on only all the segregated limit orders that are
marketable against the posting market center's public order book;
( c )(iv) automatically directing only all the
segregated market orders to the unpriced order auction engine on
the computing system;
(c)(v) causing the unpriced order auction
engine on the computing system to store the market orders in the
unpriced auction order book;
( d) executing, by the unpriced order auction engine,
steps ( d)(i)-( d)(iv) sequentially in order at the scheduled auction
time:
( d)(i) matching for the scheduled auction by
the computing system one or more unpriced buy orders to
unpriced sell orders;
( d)(ii) retrieving by the computing system an
indicator external to the posting market center to establish the
best prices in the entire marketplace;
( d)(iii) determining for the scheduled auction
by the computing system a single auction price from the retrieved
external indicator;
( d)(iv) executing the scheduled auction by
the computing system trades in the issue between the matched
unpriced buy and unpriced sell orders at the determined single
auction price, wherein the scheduled auction at steps ( d)(i)-
( d)(iv) executes concurrently and separately from the continuous
matching process executed by the continuous matching engine
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on the computing system without inteml ption at the scheduled
auction time thereby improving order throughput;
( e) automatically directing, by the order matching
engine, the received unpriced orders that were not matched at
step ( d)(i) by the computing system for the scheduled auction to
the continuous matching engine on the computing system; and
(f) activating, by the order matching engine, the
continuous matching engine to execute the continuous matching
process on the computing system on the received unpriced orders
that were not matched at the scheduled auction step d)(i) by the
computing system and that are marketable against the posting
market center's public order book.
The Examiner rejected 1--4, 8-14, 16, 17, and 19-30 under 35 U.S.C.
§ 101 as directed to non-statutory subject matter in the form of an abstract
idea.
We AFFIRM.
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. See e.g .. , Alice Corp. v. CLS Bankint'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 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
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risk."); see also Bilski v. Kappas, 561 U.S. 593, 611 (2010) ("Claims 1 and 4
in [P]etitioners' 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, 192
( 1981) ); "tanning, dyeing, making waterproof cloth, vulcanizing India
rubber, smelting ores" (id. at 184 n.7 (quoting Corning v. Burden, 56 U.S.
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, 192 ("We 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), and 187 ("It is now
commonplace that an application of a law of nature or mathematical formula
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to a known structure or process may well be deserving of patent
protection.").
If the claim is "directed to" an abstract idea, we tum 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 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.
ANALYSIS
The Examiner finds the claims are directed to a fundamental
economic practice in the form of order matching and securities trading.
Final Act. 11. Each independent claim is drawn to a method or system for
"parallel processing order data," and the orders are described as financial
instrument trading orders on an exchange. See Spec. ,r,r 2-5. Because the
claims recite steps for matching buy and sell orders for financial products,
we agree with the Examiner that the claims are directed to order matching
and securities trading, the former of which is a mental process of evaluating
data and forming an judgment or opinion as to whether a match exists, and
the second is a fundamental economic practice.
More specifically, the claims separate priced (limit) orders from
unpriced (market) orders, and queue them separately to two matching
"engines" to process in parallel, rather than sequentially in a single queue.
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See Spec. ,r,r 2, 6, and 23. Each "engine" is construed to be a software
module, because each engine is "activated," and contains "sub-routines."
Spec. ,r 22. The claimed method and system thus divide up work and have
two separate software modules work on the two queues consecutively, rather
than sequentially with one module.
The method and system affect the logic the engines implement and the
queues distributed to each engine, but do not alter the underlying computer
that executes the code. More specifically, the underlying computer still
executes instructions, as it would have without this method, by using time-
slicing individual instructions, switching between active processes, or
executing instructions simultaneously, such as on multi-processor-
architecture machines. The architectures of those machines are not changed
by the method or system, and thus the method and system do not improve
the functioning of the underlying computer. See MPEP § 2106.0S(a). In
addition, the method and system are directed to financial markets, and thus
do not improve another technology. Id.
The claimed method and system do not rely on a particular machine,
because dividing up input data into multiple queues and having separate
logic operate on each queue is a function of which any general purpose
computer is capable. See MPEP § 2106.05(b ). Rather, the method and
system merely are instructions to execute the divided queues on a computer,
and merely link the divided queue handing to financial trading. See MPEP
§ 2106.0S(e), (f) and, (h). Further, the claims do not transform any physical
object. See MPEP § 2106.0S(c).
We are not persuaded by the Appellants' argument, citing Enfzsh, LLC
v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016), that:
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Because the processor, controlled via the Appellants' claimed software,
is enabled to perform parallel processing of data, the system's data
throughput is substantially improved ( e.g., because multiple streams of
data can be processed simultaneously). In this manner, the Appellants'
invention provides a technical improvement to the operation and
processing of a computing system.
Appeal Br. 14, 24--25, see also Reply Br. 3--4. The claimed method does not
alter how a computer operates, since general purpose computers, through
time-slicing techniques and/or parallel architectures, are already able to
execute two programs at once ( each corresponding to a claimed "engine")
and divide input data into separate queues for separate handling.
Additionally, the claims provide no further detail on how simultaneous
operation is enabled, other than through dividing the work between two
programs, and the Specification has no details on any computer
implementation that would make the claim more like those determined to be
patent eligible in Enfzsh.
We also, for largely the same reasons, are not persuaded by the
Appellants' argument, citing BASCOM Global Internet v. AT&T Mobility,
LLC, 827 F.3d 1341 (Fed. Cir. 2016), they are "claiming a technology-based
solution (not an abstract-idea-based solution implemented with generic
technical components in a conventional way)." Appeal Br. 16, 25-26; see
also Reply Br. 5---6. In particular, we are unpersuaded that the abstract idea
of dividing up work into priced and unpriced order queues, while processing
buy and sell orders, is based in technology. It would be possible, for
example, to manually divide the orders and process them manually,
indicating why merely dividing up the work so two queues can be processed
at the same time is independent of technology.
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The Appellants also argue, citing McRO, Inc. v. Bandai Namco
Games America, Inc., 837 F.3d 1299 (Fed. Cir. 2016), that the claims do not
preempt all ways of achieving similar results, and the claims are "innovative,
unconventional and constitute an improvement over all existing processes in
this art, both manual and electronic." Appeal Br. 17-18; see also Reply
Br. 6-8.
As to preemption, "[ w ]here 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."
Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir.
2015).
As to the unconventional improvement, we do not discern that
dividing up a queue into two queues and having a software module work on
each queue is an innovative or unconventional computing approach, because
this is essentially the point of all parallel computing architectures, i.e.,
dividing up work so that more executions can take place at the same time.
Furthermore, we note that this "improvement" is actually a part of the
abstract idea. BSG Tech LLC v. BuySeasons, Inc., 899 F.3d 1281, 1290
(Fed. Cir. 2018) (After formulating the concept the claims are "directed to,"
the inquiry under Alice step two is to determine whether claim limitations
other than the steps for executing the formulated concept are "well-
understood, routine, and conventional.").
The Appellants have thus not shown error that would lead us to agree
that the claims transform the abstract idea into eligible subject matter. For
this reason, we sustain the rejection of claims 1--4, 8-14, 16, 17, and 19-30
as directed to ineligible subject matter.
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DECISION
We AFFIRM the rejection of claims 1--4, 8-14, 16, 17, and 19-30
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)(l )(iv).
AFFIRMED
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