Ex Parte Bauerschmidt et al

Patent Trial and Appeal Board

Nov 23, 2018

11601489 (P.T.A.B. Nov. 23, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
11/601,489 11/17/2006
12684 7590 11/27/2018
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
FIRST NAMED INVENTOR
Paul A. Bauerschmidt
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.
4672-05572BUS 5976
EXAMINER
BORLING HAUS, JASON M
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
11/27/2018 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):
mail@lsk-iplaw.com
docket-us@lsk-iplaw.com
pair_lsk@firsttofile.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
EX PARTE PAUL A. BAUERSCHMIDT, ARI L. STUDNITZER,
WILLIAM J. ALBERT, PAUL J. CALLAWAY, JAMES W. FARRELL,
and A. SHANTHI THIRUTHUV ADOSS
Appeal2017-009662
Application 11/601,489 1
Technology Center 3600
Before ST. JOHN COURTENAY III, LARRY J. HUME, and
JOYCE CRAIG, Administrative Patent Judges.
CRAIG, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 1-30, which are all of the claims pending in this
application. We have jurisdiction under 35 U.S.C. § 6(b ).
We affirm.
1 According to Appellants, the real party in interest is Chicago Mercantile
Exchange, Inc. App. Br. 2.
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Application 11/601,489
INVENTION
Appellants' application relates to "detection of intra-finn matching
and response thereto." Title. Claim 1 is illustrative of the appealed subject
matter and reads as follows:
1. A computer implemented method of matching an
incoming first order received from a first trading entity with a
second order previously received from a second trading entity,
the method comprising:
receiving the first order from the first trading entity
subsequent to receipt of the second order from the second trading
entity, the second order having not previously been completely
satisfied prior to receipt of the first order; and
prior to determining that any unsatisfied remainder of the
first order is at least partially counter to another order received
subsequent to the first order:
establishing, by an order processor, that the first order is
at least partially counter to the second order;
identifying, by an identity identifier, that the first trading
entity is not permitted to transact with the second trading entity
based on a relationship there between; and
preventing, by the transaction processor, the first and
second orders from matching with each other when the first order
is at least partially counter to the second order and the first
trading entity is identified as being related to the second trading
entity and determining that the first order is at least partially
counter to at least one other order previously received from
another trading entity to which the first entity is identified as
being permitted to transact and, based thereon, executing a trade
between the first order and the determined at least one other
order, and making any unsatisfied remainder of the first order
available to match against orders at least partially counter thereto
subsequently received from other trading entities to which the
first trading entity is identified as being permitted to transact.
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Application 11/601,489
REJECTIONS 2
Claims 1-30 stand rejected under 35 U.S.C. § 101 because the
claimed invention is directed to a judicial exception to patentable subject
matter, without significantly more. Final Act. 2.
Claims 1-3, 5, 8, 9, 15-17, 19, 22, 23, 29 and 30 stand rejected under
35 U.S.C. § I03(a) as unpatentable over Satow et al. (US 2004/0024691 Al;
Feb. 5, 2004) ("Satow"). Final Act. 4--7.
Claims 4, 6, 7, 10-12, 14, 18, 20, 21, 24--26, and 28 stand rejected
under 35 U.S.C. § I03(a) as unpatentable over the combination of Satow and
Sweeting (US 2006/0218071 Al; Sept. 28, 2006). Final Act. 7-9.
Claims 13 and 27 stand rejected under 35 U.S.C. § I03(a) as
unpatentable over the combination of Satow, Sweeting, and Turbeville et al.
(US 2004/0024692 Al; Feb. 5, 2004) ("Turbeville"). Final Act. 9-10.
ANALYSIS
Rejection of Claims 1-30 under 35 USC§ 101
Appellants contend the Examiner erred in concluding the claims are
directed to an abstract idea without significantly more, and argue the claims
provide a specific implementation which prevents undesirable matching
between transactions submitted by the same entity, while allowing matching
of transactions submitted by different entities. App. Br. 6.
In determining whether a claim falls within the excluded category of
abstract ideas, we are guided in our analysis by the Supreme Court's two-
step framework, described in Mayo and Alice. Alice Corp. Pty. Ltd. v. CLS
Banklnt'l, 134 S. Ct. 2347, 2355 (2014) (citing Mayo Collaborative Servs.
2 In an Advisory Action dated October 14, 2016, the Examiner withdrew the
rejection of claims 1-14 under 35 U.S.C. § 112, second paragraph.
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Application 11/601,489
v. Prometheus Labs., Inc., 566 U.S. 66, 76-77 (2012)). In accordance with
that framework, we first determine whether the claim is "directed to" a
patent-ineligible abstract idea. See Alice, 134 S. Ct. at 2356.
If the claim is "directed to" a patent-ineligible abstract idea, we then
consider the elements of the claim-both individually and as an ordered
combination-to assess whether the additional elements transform the nature
of the claim into a patent-eligible application of the abstract idea. Alice, 134
S. Ct. at 2355. This is a search for an "inventive concept"-an element or
combination of elements sufficient to ensure that the claim amounts to
"significantly more" than the abstract idea itself. Id. (internal quotations and
citation omitted).
Claims involving sending and receiving communications over a
computer network to facilitate online commercial transactions are directed to
an abstract idea. BuySAFE, Inc., v. Google, Inc., 765 F.3d 1350, 1351-52
(Fed. Cir. 2014) (holding that "sending and receiving communications over
a computer network to facilitate online commercial transactions" are an
abstract idea).
In step one of the Alice analysis, the Examiner concluded claims 1-30
are directed to a fundamental economic practice (i.e. matching orders) and,
thus, an abstract idea. Final Act. 2. Appellants contend the Examiner
oversimplified the claims and erred because the claims do not relate to
matching orders, but instead to automatically and selectively allowing or
preventing matching under certain conditions. App. Br. 6-7.
We are not persuaded of error. We agree with the Examiner's legal
conclusion that all claims on appeal are directed to the abstract idea of
matching orders, which is a fundamental economic practice. Ans. 9. We
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agree with the Examiner that, even if the claimed invention is directed to a
specific application that "automatically and selectively prevents or allows
matching under certain conditions," the claimed invention is still directed to
the abstract idea of "matching orders." See Ans. 9.
Appellants further contend that the claimed invention improves a
technical field, specifically "data and transaction processing." App. Br. 6.
Again, we are not persuaded. The claimed invention does not
improve the computer itself. Nor does the claimed invention add to the
functionality of the computer beyond what is routine and conventional. See
Ans. 10. As the Examiner explained, the conditional execution of a
computer function is a routine and conventional computerized activity and,
specifically, conditional processing of an order by a computer is a routine
and conventional computerized activity in financial markets. Id. at 11.
Regarding Appellants additional argument that the claims do not
preempt all the "all implementations of trade matching or prevention of self-
matching" (App. Br. 6), we note that "while preemption may signal patent
ineligible subject matter, the absence of complete preemption does not
demonstrate patent eligibility." Ariosa Diagnostics, Inc. v. Sequenom, Inc.,
788 F.3d 1371, 1379 (Fed. Cir. 2015); see Fairwarning IP, LLC v. Iatric
Systems, Inc., 839 F.3d 1089, 1098 (Fed. Cir. 2016) ("the absence of
complete preemption does not demonstrate patent eligibility"). Moreover,
questions of preemption are inherent in and resolved by the Alice § 101
analysis. See Ariosa, 788 F.3d at 1379.
For these reasons, we are not persuaded the Examiner erred in
concluding claim 1 is directed to an abstract idea.
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Turning to step two of the Alice analysis, we are, likewise, not
persuaded by Appellants' arguments that the identity identifier and
transaction processor are additional elements that provide "something
more." App. Br. 8-9 (citing McRo, Inc. v. Bandai Namco Games Am. Inc.,
837 F.3d 1299, 1315 (Fed. Cir. 2016)).
As the Examiner explained, the McRO court determined that the
claimed invention recited a computer system utilizing specific rules that
"enabled the automation of specific animation tasks that previously could
not be automated." Ans. 12. The Examiner further explained that
determination allowed the court to classify the claimed invention in McRO
as an improvement in an existing technological process (i.e. computer
animation), "unlike Alice where a computer was merely used as a tool to
perform an existing process." Id. In the instant case, we agree with the
Examiner that the claimed invention does not improve a technological
process by reciting specific rules to automate a process that otherwise could
not be automated. Rather, like Alice, the claims use a computer and its
existing capabilities as a tool to perform an existing process. Id.
Appellants further argue the claims are necessarily rooted in computer
technology. App. Br. 9 (citing DDR Holdings, LLC v. Hotels.com, L.P., 773
F.3d 1245 (2014)).
We disagree. The problem that the claimed invention is designed to
overcome, reduction in redundancy and/ or waste of transaction resources
(id.), is not a problem specifically arising from the realm of computers.
Rather, the problem is a standard business problem, not a technological one.
See Ans. 13.
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In considering the instant claims, we fail to see how any of the
specific elements and steps recited in the claims add something
"significantly more" to the abstract idea of "matching orders."
Accordingly, we sustain the Examiner's§ 101 rejection of claims 1-30.
Rejection of Claims 1-3, 5, 8, 9, 15-17, 19, 22, 23, 29 and 30
under 35 USC§ 103(a)
With regard to claim 1, Appellants contend neither Satow nor
Sweeting and Turbeville, the two prior art references cited in the other two
§ 103 rejections, teach the recited "preventing" limitation. App. Br. 17, 22.
In particular, Appellants argue Satow does not teach or suggest rematching
unsatisfied remainders of a first order. App. Br. 19. Appellants disagree
with the Examiner's assertion that "an equally reasonable interpretation of
Satow is that the order associated with the rejected trade (i.e. rejected match)
is stored to be matched later." Id., citing Final Act. 14--15.
The Examiner acknowledges Satow does not teach all of the features
of the disputed "preventing" clause, as recited in claim 1. Final Act. 5.
Nevertheless, the Examiner concludes it would have been obvious to one of
ordinary skill in the art at the time of the invention was made to modify
Satow accordingly. Id. We note the Examiner must provide sufficient
"articulated reasoning with some rational underpinning to support the legal
conclusion of obviousness." In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006).
The Examiner proffers that an artisan would have modified Satow by
duplicating claim elements contained in Satow "(i.e. a first order, a first
trading entity, a first iteration) to create additional claim elements (e.g. a
third order, a third trading entity, a second iteration) wherein each additional
claim element would serve the same function as the original claim element."
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Final Act. 5. However, based upon our review of the record, we find a
preponderance of the evidence supports Appellants' contention: "the
Examiner has not shown any motivation in Satow, implicit or otherwise, to
modify the system of Satow to allow [a] rejected trade order to match
against other orders as claimed by Appellants. This is impermissible
wholesale reading of functionality into a reference based on impermissible
hindsight." App. Br. 21.
Therefore, for essentially the same reasons argued by Appellants
(App. Br. 19--21), we find: (1) the Examiner's suggested alternate
interpretation of the Satow reference, and (2) the Examiner's proffered
motivation to modify the Satow reference, are insufficient to establish that
Satow teaches or suggests all of the features of the disputed "preventing"
clause, as recited in claim 1. Accordingly, we do not sustain the 35 U.S.C.
§ 103(a) rejection of independent claim 1, or of independent claims 15, 29,
and 30, which recite commensurate limitations, or of dependent claims 2, 3,
5, 8, 9, 16, 17, 19, 22, and 23, which stand with independent claims 1
and 15.
The Examiner's additional citations to Sweeting and Turbeville do not
cure the argued deficiencies. App. Br. 22. Accordingly, for the same
reasons argued by Appellants, we do not sustain the 35 U.S.C. § 103(a)
rejections of dependent claims 4, 6, 7, 10-14, 18, 20, 21, and 24--28.
Accordingly, we reverse the remaining 35 U.S.C. § 103(a) rejections
of claims 4, 6, 7, 10-14, 18, 20, 21, and24-28.
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DECISION
We affirm the Examiner's decision rejecting claims 1-30 as directed
to patent-ineligible subject matter.
We reverse the Examiner's decision rejecting claims 1-30 for
obviousness.
Because we affirm at least one ground of rejection with respect to
each claim on appeal, the Examiner's decision rejecting claims 1-30 is
affirmed. See 37 C.F.R. § 4I.50(a)(l).
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). See
37 C.F.R. § 41.50(±).
AFFIRMED
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