Ex Parte Bartko et al

Patent Trials and Appeals Board

Mar 26, 2019

14229282 - (D) (P.T.A.B. Mar. 26, 2019)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/229,282 03/28/2014
63710 7590 03/28/2019
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
FIRST NAMED INVENTOR
Peter Bartko
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.
07-6399-CS 1117
EXAMINER
CAMPEN, KELLY SCAGGS
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
03/28/2019 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):
patentdocketing@cantor.com
lkorovich@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 PETER BARTKO, JOHN ROBERT CAPUANO, JOSEPH C.
NOVIELLO, and BRIAN ALEXANDER WESTON 1
Appeal2017-004984
Application 14/229,282
Technology Center 3600
Before HUBERT C. LORIN, JOSEPH A. FISCHETTI, and BIBHU R.
MOHANTY, Administrative Patent Judges.
MOHANTY, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
The Appellants seek our review under 35 U.S.C. § 134 of the final
rejection of claims 1, 16, 17, 21, 22, 25, and 30-43 which are all the claims
pending in the application. We have jurisdiction under 35 U.S.C. § 6(b ).
SUMMARY OF THE DECISION
We REVERSE.
1 BGC Partners, Inc. is the real party in interest. Appeal Br. 2.
Appeal2017-004984
Application 14/229,282
THE INVENTION
The Appellants' claimed invention is related to electronic trading and
providing latency protection for trading orders (Spec., page 1 ). Claim 16,
reproduced below, is representative of the subject matter on appeal.
16. A method comprising:
determining, by at least one processor, a latency value;
receiving, by the at least one processor, an order associated with
a first price;
receiving, by the at least one processor, a counterorder;
identifying, by the at least one processor, a potential trade
associated with the order and the counterorder, the potential trade
based at least in part on the first price;
determining, by the at least one processor, whether the
determined latency value satisfies a configurable condition, in which
the act of determining whether the latency value satisfies the
configurable condition comprises determining that the latency value
satisfies the configurable condition;
based on the act of determining that the determined latency
value satisfies the configurable condition, and responsive to
identifying the potential trade, initiating, by the at least one processor,
a configurable period of time; and
determining whether the potential trade is valid upon expiration
of the configurable period of time, in which the act of determining
whether the potential trade is valid upon expiration of the configurable
period comprises determining that the potential trade is not valid
upon expiration of the configurable period;
based on the act of determining that the potential trade is not
valid upon expiration of the configurable period, causing, by the at
least one processor, the potential trade to not be executed.
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Appeal2017-004984
Application 14/229,282
THE REJECTION
The following rejections is before us for review:
Claims 1, 16, 17, 21, 22, 25, and 30-43 are rejected under 35 U.S.C. §
101 as being directed to non-statutory subject matter.
FINDINGS OF FACT
We have determined that the findings of fact in the Analysis section
below are supported at least by a preponderance of the evidence2.
ANALYSIS
Re} ection under 3 5 US. C. § 101
The Appellants argue that the rejection of claim 16 is improper
because an abstract idea has not been properly identified (App. Br. 7-10,
Reply Br. 3, 4). The Appellants also argue that the claim adds "significantly
more" to transform the alleged abstract idea into patentable subject matter
(App. Br. 10-13, Reply Br. 4--7). The Appellants further argue that the
electronic trading system is improved by taking into account the network
latency between nodes of a network (Reply Br. 7).
In contrast, the Examiner has determined that the rejection of record is
proper (Final Rej. 3-6, Ans. 6-12).
We agree with the Appellants. An invention is patent eligible if it
claims a "new and useful process, machine, manufacture, or composition of
2 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
( explaining the general evidentiary standard for proceedings before the
Patent Office).
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Appeal2017-004984
Application 14/229,282
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
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 risk."); see also Bilski v. Kappas, 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, 192
( 1981) ); "tanning, dyeing, making waterproof cloth, vulcanizing India
rubber, smelting ores" (id. at 182 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))).
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Appeal2017-004984
Application 14/229,282
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 191 ("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. (internal 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 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 (citation 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.
Here, the Examiner has determined that the claim 16 is directed to the
concept of "managing trading orders" or "creating a contract" (Final Act. 3,
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Appeal2017-004984
Application 14/229,282
Ans. 2). The Examiner has determined that "managing trading orders" is a
fundamental economic practice or method of organizing human activities
and an abstract idea (Ans. 4). Here, the claim contains limitations drawn to
"receiving ... an order associated with a first price"; "receiving ... a
counterorder"; "responsive to identifying the potential trade ... a configurable
period of time"; "determining whether the potential trade is valid upon
expiration of the configurable time period"; and "based on the act of
determining that the potential trade is not valid upon expiration of the
configurable time period, causing ... the potential trade to not be executed"
which are drawn to a managing trading orders. The management of trading
orders is a method of organizing human activities and a fundamental
economic practice and directed to an abstract concept. Certain methods of
organizing human activities including fundamental economic practices are
directed to a judicial exception
However, turning to the second step of the second step of the Alice
and Mayo framework, we determine that the claim contains a concept
sufficient to "transform" the abstract nature of the claim into a patent-
eligible application. The Specification at page 8, lines 18-24 describes that
"latency" generally refers to delays associated with communications
between and/ or functions performed by various components in trading
systems. This description of the term "latency" in the Specification is in
alignment with how the term is commonly defined in the art technical field.
The Specification at the same citation provides examples of latency in this
citation include it being attributed to servers, a network, a trading platform,
and a combination of hardware and software components which also is in
alignment with that definition. The Appellants specifically assert, "[ t ]he
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Application 14/229,282
network latency addressed in these claims is endemic to electronic
communication between remote nodes of a network, and thus is a
technological improvement that amounts to 'significantly more' than simply
'managing trading orders' or 'creating a contract."' (Reply Br. 7).
We agree. Here, in claim 16, we determine that the use of the term
"latency" is tied to a computer system processor and the electronic delays
within it. In claim 16 the initiating of a configurable time based on the
latency value for the processor to operate operates to improve the
processor's functionality in trade execution and ties the claim to this
particular technological environment and is not a mere abstract idea.
For this reason the rejection of claim 16 is not sustained. The
remaining claims contain a similar subject matter and the rejection of these
claims is not sustained as well for the same reasons.
CONCLUSIONS OF LAW
We conclude that Appellants have not shown that the Examiner erred
in rejecting claims 1, 16, 17, 21, 22, 25, and 30-43 under 35 U.S.C. § 101.
DECISION
The Examiner's rejection of claims 1, 16, 17, 21, 22, 25, and 30-43 is
not sustained.
REVERSED
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