Ex Parte Chavez et al

Patent Trial and Appeal Board

Apr 30, 2018

10162705 (P.T.A.B. Apr. 30, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO.
10/162,705
132787 7590
Docket Clerk-GOLD
P.O. Drawer 800889
Dallas, TX 75380
FILING DATE FIRST NAMED INVENTOR
06/06/2002 R. Martin Chavez
05/02/2018
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.
GOLDll-00065 6488
EXAMINER
KAZIMI, HAN! M
ART UNIT PAPER NUMBER
3691
NOTIFICATION DATE DELIVERY MODE
05/02/2018 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):
patents@munckwilson.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte R. MAR TIN CHAVEZ
and WILLIS BOYCE
Appeal2016-008633 1
Application 10/162,705
Technology Center 3600
Before JOHN A. JEFFERY, LARRY J. HUME, and
MATTHEW J. McNEILL, Administrative Patent Judges.
HUME, Administrative Patent Judge.
DECISION ON APPEAL
This is a decision on appeal under 35 U.S.C. § 134(a) of the Final
Rejection of claims 1-8 and 11-15, which are all claims pending in the
application. Appellants have canceled claims 9 and 10. App. Br. 4. We
have jurisdiction under 35 U.S.C. § 6(b ).
We AFFIRM.
1 According to Appellants Goldman, Sachs & Co., is the real party in
interest. App. Br. 2.
Appeal2016-008633
Application 10/162,705
STATEMENT OF THE CASE2
The Invention
Appellants' disclosed embodiments and claimed "invention relate[] to
systems and methods for managing risk associated with transactions ( traded
online or not), for executing trades using a transaction system and for
automatically providing delayed or live trade data and market data feeds
between a transaction system and a risk management system." Spec. ,r 1.
Exemplary Claims
Claim 1, reproduced below, is representative of the subject matter on
appeal:
1. A processor-implemented method for providing
risk management services to a requester, comprising:
electronically storing market data for a plurality of
financial instruments;
electronically storing trade execution data for a plurality
of financial instrument transactions executed by a plurality of
users, wherein the plurality of users are not associated with an
organization of the requester;
electronically storing access rights;
electronically receiving a request over a distributed
network from the requester for a risk report on a management
portfolio that is associated with the stored financial instrument
transactions;
2 Our decision relies upon Appellants' Appeal Brief ("App. Br.," filed
Jan. 18, 2016); Reply Brief ("Reply Br.," filed Sept. 19, 2016); Examiner's
Answer ("Ans.," mailed July 18, 2016); Final Office Action ("Final Act.,"
mailed Aug. 17, 2015); and the original Specification ("Spec.," filed
June 6, 2002).
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granting the requester access to the trade execution data
based on the stored access rights;
using at least some of the market data and at least some
of the trade execution data to perform, using a processor,
portfolio risk calculations for the requested risk report;
producing the requested risk report; and
electronically transmitting the risk report over the
distributed network.
Rejection on Appeal
Claims 1-8 and 11-15 stand rejected under 35 U.S.C. § 101 as being
directed to patent-ineligible subject matter. Final Act. 2; Ans. 3.
CLAIM GROUPING
Based on Appellants' arguments (App. Br. 10 et seq.), we decide the
appeal of the patent-ineligible subject matter rejection of claims 1-8
and 11-15 on the basis of representative claim 1. 3
ISSUE
Appellants argue (App. Br. 10-18; Reply Br. 2-9) the Examiner's
rejection of claim 1 under 35 U.S.C. § 101 as being directed to patent-
ineligible subject matter is in error. These contentions present us with the
following issue:
3 While Appellants purport to proffer separate, substantive arguments with
respect to independent method claims 11 and 12, (see App. Br. 29), a review
of the arguments presented show arguments presented in connection with
independent claims 11 and 12 (App. Br. 18-28) are of the same form and
substance as those presented with respect to independent method claim 1.
Compare App. Br. 10-18, with App. Br. 18-28.
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Did the Examiner err in concluding claim 1 is patent-ineligible
because the claim is directed to a judicial exception, i.e., an abstract idea,
without significantly more?
ANALYSIS
In reaching this decision, we consider all evidence presented and all
arguments actually made by Appellants. We do not consider arguments
Appellants could have made but chose not to make in the Briefs, and we
deem any such arguments waived. 37 C.F.R. § 4I.37(c)(l)(iv).
We disagree with Appellants' arguments with respect to claims 1-8
and 11-15 and, unless otherwise noted, we incorporate by reference herein
and adopt as our own: ( 1) the findings and reasons set forth by the Examiner
in the action from which this appeal is taken, and (2) the reasons and
rebuttals set forth in the Examiner's Answer in response to Appellants'
arguments. We highlight and address specific findings and arguments
regarding claim 1 for emphasis as follows.
Alice Framework
Section 101 provides that anyone who "invents or discovers any new
and useful process, machine, manufacture, or composition of matter, or any
new and useful improvement thereof' may obtain a patent. 35 U.S.C. § 101.
The Supreme Court has repeatedly emphasized that patent protection should
not extend to claims that monopolize "the basic tools of scientific and
technological work." Gottschalkv. Benson, 409 U.S. 63, 67 (1972); Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012);
Alice Corp. Pty. Ltd. v. CLS Bank Int'!, 134 S. Ct. 2347, 2354 (2014).
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Accordingly, laws of nature, natural phenomena, and abstract ideas are not
patent-eligible subject matter. Id.
The Supreme Court's two-part Mayo/Alice framework guides us in
distinguishing between patent claims that impermissibly claim the "building
blocks of human ingenuity" and those that "integrate the building blocks into
something more." Alice, 134 S. Ct. at 2354. First, we "determine whether
the claims at issue are directed to a patent-ineligible concept." Id. at 2355.
If so, we "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." Id. at 2357 (quoting Mayo, 566 U.S.
at 72, 79). While the two steps of the Alice framework are related, 4 the
"Supreme Court's formulation makes clear that the first-stage filter is a
meaningful one, sometimes ending the § 101 inquiry." Elec. Power Grp.,
LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016). We note the
Supreme Court "has not established a definitive rule to determine what
constitutes an 'abstract idea"' for the purposes of step one. Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. 2016) (citing Alice, 134 S.
Ct. at 2357).
Alice Step I -Abstract Idea
Our reviewing court has held claims ineligible as being directed to an
abstract idea when they merely collect electronic information, display
information, or embody mental processes that could be performed by
4 Applying this two-step process to claims challenged under the abstract
idea exception, the courts typically refer to step one as the "abstract idea"
step and step two as the "inventive concept" step. Affinity Labs of Tex., LLC
v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016).
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humans. Electric Power Group, 830 F.3d at 1353-54 (collecting cases). At
the same time, "all inventions at some level embody, use, reflect, rest upon,
or apply laws of nature, natural phenomena, or abstract ideas." Mayo, 566
U.S. at 71. Under this guidance, we must therefore ensure at step one that
we articulate what the claims are directed to with enough specificity to
ensure the step one inquiry is meaningful. Alice, 134 S. Ct. at 2354 ("[W]e
tread carefully in construing this exclusionary principle lest it swallow all of
patent law.").
The Examiner concludes, " [ c] laim 1 is directed to an abstract idea of
providing risk management to a requester [that] can be performed manually
or by using a 'processor' and is similar to the kind of 'organizing human
activity' at issue in Alice. "5 Final Act. 4.
In response, Appellants contend, "it is unquestionable that Claim 1
contains elements beyond simply 'providing risk management to a requester.'
Stated another way, the claims at issue here do not merely recite the steps
one would ordinarily perform to providing risk management to a requester."
App. Br. 11. Appellants further argue:
While Claim 1 relates to providing risk management to a
requester, Claim 1 does not claim the mere concept of
providing risk management to a requester. Rather, Claim 1
recites a specific process that (among other things) receives a
request, grants access to data based on stored access rights, and
uses data to perform risk calculations for a report.
These operations represent more than just an abstract
idea. These operations do not represent a scenario where a
fundamental and long prevalent idea that existed before
computers is now simply being implemented on a computer,
5 Alice Corp. Pty Ltd. v. CLS Banklnt'l, 134 S. Ct. 2347 (2014).
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such as in Bilski and Alice. Rather, these types of operations
represent a modem technology that is necessarily dependent on
computer systems and an idea that did not exist before the time
of computers. ([See DDR Holdings, 6] ([N]oting that patent
eligible "claims stand apart because they do not merely recite
the performance of some business practice known from the pre-
Internet world along with the requirement to perform it on the
Internet. Instead, the claimed solution is necessarily rooted in
computer technology in order to overcome a problem
specifically arising in the realm of computer networks.")). The
recitation of various data and operations, as well as the specific
recitation of access rights, shows that Claim 1 is necessarily
dependent on computer systems.
App. Br. 12.7
In addition, Appellant contends:
It is immediately evident that even if Claim 1 did recite a
judicial exception, Claim 1 "is not attempting to tie up any such
exception so that others cannot practice it." Claim 1 recites
numerous elements that make it clear Claim 1 as a whole would
not tie up "providing risk management to a requester" so that
others cannot practice it. There are innumerable other ways one
could "provide risk management to a requester" without falling
under the scope of Claim 1. Thus, eligibility of the claim is self-
evident in the streamlined analysis, without needing to perform
the full eligibility analysis.
As shown above, Claim 1 clearly recites more than the
simple concept of providing risk management to a requester.
Rather, Claim 1 is directed to a method that performs specific
functions using specific data to generate specific results. The
claims are not directed merely to a patent ineligible concept.
App. Br. 13.
6 DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir.
2014)(hereinafter "DDR Holdings").
7 It appears Appellants are conflating Alice Step 1 ("abstract idea") analysis
with Alice Step 2 ("significantly more") analysis by citing DDR Holdings.
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Under the "abstract idea" step we must evaluate "the 'focus of the
claimed advance over the prior art' to determine if the claim's 'character as a
whole' is directed to excluded subject matter." Affinity Labs, 838 F.3d at
1257.
Turning to the claimed invention, claim 1 recites "[a] processor-
implemented method for providing risk management services to a
requester." Claim 1 (preamble). Method claim 1 's limitations also require,
in pertinent part, the steps of:
storing market data for a plurality of financial
instruments ... storing trade execution data for ... financial
instrument transactions executed by a plurality of users ...
[who] are not associated with an organization of the requester
... storing access rights ... receiving a request ... for a risk
report on a management portfolio ... associated with the stored
financial instrument transactions; granting the requester access
to the trade execution data based on the stored access rights;
using at least some of the market data and at least some of the
trade execution data to perform ... portfolio risk calculations
for the requested risk report; producing the requested risk
report; and ... transmitting the risk report.
Claim 1.
In response to Appellants' arguments, the Examiner maintains the
conclusion that claim 1 is directed to a judicial exception, i.e., an abstract
idea without significantly more (Ans. 4) because:
Claim 1 is directed to an abstract idea of providing risk
management to a requester. The concept of providing risk
management as recited in the claim can be performed manually
or by using a "processor" and is similar to the kind of
'organizing human activity' at issue in Alice Corp. Although the
claims are not drawn to the same subject matter, the abstract
idea of providing risk management to a requester is similar to
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the abstract idea of managing risk (hedging) during consumer
transactions (Bilski) and mitigating settlement risk in financial
transactions (Alice Corps. [sic]) Claim 1 therefore is directed to
an abstract idea.
Ans. 5-6.
Under step one, we agree with the Examiner's conclusion that the
invention claimed in independent claim 1 is directed to an abstract idea, i.e.,
providing financial instrument transaction risk management to a requester.
More particularly, we conclude providing a risk management assessment
report to a requester, as in claim 1, is a fundamental economic practice and
method of organizing human activity with respect to financial instrument
transactions.
As the Specification discloses, "[t]his invention relates to systems and
methods for managing risk associated with transactions (traded online or
not), for executing trades using a transaction system and for automatically
providing delayed or live trade data and market data feeds between a
transaction system and a risk management system." Spec. ,r 1. 8 We find this
type of activity, i.e., managing risk associated with financial transactions, for
example, includes longstanding conduct that existed well before the advent
8 See also Spec. 19 ("Abstract"):
The present invention relates to a system for processing
trade data and market data to produce risk management reports
and delivering reports, simultaneously, to multiple related and
unrelated users over a distributed network. In one aspect of the
invention, the risk management analysis includes the
assessment of risk through mark-to-market, profit and loss,
"greek", FAS 133, and related reports. Further, market and
trade data may be collected electronically from exchanges,
information service provides, and other sources to be
aggregated for use in the risk management analysis.
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of computers and the Internet, and could be carried out by a human with pen
and paper. See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366,
13 7 5 (Fed. Cir. 2011) ("That purely mental processes can be unpatentable,
even when performed by a computer, was precisely the holding of the
Supreme Court in Gottschalk v. Benson."). 9
Our reviewing court has previously held other patent claims ineligible
for reciting similar abstract concepts. For example, while the Supreme
Court has enhanced the section 101 analysis since Cy her Source in cases like
Mayo and Alice, they continue to "treat[ ] analyzing information by steps
people go through in their minds, or by mathematical algorithms, without
more, as essentially mental processes within the abstract-idea category."
Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1146 (Fed. Cir.
2016) (quoting Electric Power Group, 830 F.3d at 1354).
In this regard, the claims are similar to claims our reviewing court has
found patent ineligible in Electric Power Group, 830 F.3d at 1354
(Collecting information and "analyzing information by steps people go
through in their minds, or by mathematical algorithms, without more, [are]
essentially mental processes within the abstract-idea category").
In addition, Appellants' argument quoted above that the claims do not
preempt all methods of providing risk management to a requester does not
make them any less abstract. See buySAFE, Inc. v. Google, Inc., 765 F.3d
1350, 1355 (Fed. Cir. 2014) (collecting cases); Accenture Global Services,
GmbH v. Guidewire Software, 728 F.3d 1336, 1345 (Fed. Cir. 2013); Ariosa
9 CyberSource further guides that "a method that can be performed by
human thought alone is merely an abstract idea and is not patent-eligible
under§ 101." CyberSource, 654 F.3d at 1373.
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Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)
("While preemption may signal patent ineligible subject matter, the absence
of complete preemption does not demonstrate patent eligibility").
Therefore, in agreement with the Examiner, we conclude claim 1
involves nothing more than identifying, collecting, storing, comparing, and
generating data, without any particular inventive technology- an abstract
idea. See Electric Power Group, 830 F.3d at 1354. We further refer to
Content Extraction, where the Federal Circuit has provided additional
guidance on the issue of statutory subject matter by holding claims to
collecting data, recognizing certain data within the collected data set, and
storing that recognized data in memory were directed to an abstract idea and
therefore unpatentable under section 101. Content Extraction &
Transmission LLC v. Wells Fargo Bank, N.A., 776 F.3d 1343 (Fed. Cir.
2014).
Accordingly, on this record, and under step one of Alice, we agree
with the Examiner's conclusion the claims are directed to an abstract idea.
Alice Step 2-Inventive Concept
If the claims are directed to a patent-ineligible concept, as we
conclude above, we proceed to the "inventive concept" step. For that step
we must "look with more specificity at what the claim elements add, in order
to determine 'whether they identify an "inventive concept" in the application
of the ineligible subject matter' to which the claim is directed." Affinity
Labs, 838 F.3d at 1258 (quoting Elec. Power Grp., 830 F.3d at 1353).
In applying step two of the Alice analysis, our reviewing court guides
we must "determine whether the claims do significantly more than simply
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describe [the] abstract method" and thus transform the abstract idea into
patentable subject matter. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709,
715 (Fed. Cir. 2014). We look to see whether there are any "additional
features" in the claims that constitute an "inventive concept," thereby
rendering the claims eligible for patenting even if they are directed to an
abstract idea. Alice, 134 S. Ct. at 2357. Those "additional features" must be
more than "well-understood, routine, conventional activity." Mayo, 566
U.S. at 79.
Evaluating representative claim 1 under step 2 of the Alice analysis,
we agree with the Examiner that it lacks an inventive concept that
transforms the abstract idea of managing risk associated with financial
transactions and generating risk reports into a patent-eligible application of
that abstract idea. See Ans. 8.
Appellant merely alleges:
Claim 1 clearly recites additional elements that add
significantly more to the alleged abstract concept of providing
risk management to a requester. The entire series of steps in
Claim 1 is "substantially more" than the alleged abstract
concept of providing risk management to a requester. For
example, Claim 1 recites the use of specific data, such as
market data for a plurality of financial instruments and trade
execution data for a plurality of financial instrument
transactions executed by a plurality of users. Claim 1 also
recites the use of access rights, namely electronically storing
access rights and granting a requester access to trade execution
data based on the stored access rights. In addition, Claim 1
recites using at least some of the market data and at least some
of the trade execution data to perform portfolio risk calculations
and producing a requested risk report.
App. Br. 14.
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Appellants additionally allege "there are no pending prior art
rejections of Claim 1, meaning the Examiner has admitted the prior art does
not disclose or suggest Claim 1. Something cannot possibly represent a
commonplace business method or a known business process if it has never
been done before." App. Br. 15.
We disagree with Appellants' assertion because, as the Supreme Court
held, "[t]he 'novelty' of any element or steps in a process, or even of the
process itself, is of no relevance in determining whether the subject matter of
a claim falls within the [section] 101 categories of possibly patentable
subject matter." Diamond v. Diehr, 450 U.S. 175, 188-89 (1981). Our
reviewing court further indicates that "even assuming" that a particular
claimed feature was novel does not "avoid the problem of abstractness."
Affinity Labs, 838 F.3d at 1263.
In response to Appellants' contentions the claimed invention offers
"significantly more," the Examiner concludes:
The claim requires the additional limitations of one or
more processors. The generic computer components are
claimed to perform their basic functions of storing, receiving,
granting, calculating, producing and transmitting the risk report.
The recitation of the claimed limitations amounts to mere
instructions to implement the abstract idea on a computer.
Taking the additional elements individually and in combination,
the computer components ( one or more processors) at each step
of the process perform purely generic computer functions. As
such, there is no inventive concept sufficient to transform the
claimed subject matter into a patent-eligible application. The
claim does not amount to significantly more than the abstract
idea itself. Accordingly, the claim is not patent eligible.
Final Act. 4--5; see also Ans. 6.
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We agree with the Examiner because, as in Alice, we find the
recitation of managing risk associated with transactions using "[a] processor-
implemented method" ( claims 1 and 11 ), and " [a] computer processor-
implemented method ( claim 12), is simply not enough to transform the
patent-ineligible abstract idea here into a patent-eligible invention. See
Alice, 134 S. Ct. at 2357 ("[C]laims, which merely require generic computer
implementation, fail to transform [an] abstract idea into a patent-eligible
invention.").
As evidence of the conventional nature of the claimed network
components and processes, we note Appellants' Specification is short on any
disclosure of any technical component/hardware that could reasonably be
construed as representing an improvement to conventional computer and
networking technology. For example, paragraph 33 of the Specification
discloses, "[a]ccording to a preferred embodiment of the invention, the
system includes a business objects processing module which serves as an
organization engine." We have reviewed the Specification, and do not find
any additional disclosure ( aside from alleged functional aspects of
conventional hardware) that would support Appellants' contention that
"Claim 1 clearly recites additional elements that add significantly more to
the alleged abstract concept of providing risk management to a requester."
App. Br. 14.
Moreover, with respect to Appellants' citation to our reviewing court's
holding in DDR (App. Br. 12), we find Appellants' claims do not address a
similar problem and do not contain a similar inventive concept as the patent-
eligible claims in DDR. As emphasized by the Federal Circuit: "DDR
Holdings does not apply when ... the asserted claims do not 'attempt to
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solve a challenge particular to the Internet."' Smart Sys. Innovations, LLC v.
Chi. Transit Auth., 873 F.3d 1364, 1375 (Fed. Cir. 2017) (quoting In re TL!
Commc 'ns LLC Patent Litig., 823 F.3d 607, 613 (Fed. Cir. 2016)). 10
Accordingly, based upon the findings above, on this record, we are
not persuaded of error in the Examiner's conclusion that the appealed claims
are directed to patent-ineligible subject matter. Therefore, we sustain the
Examiner's section 101 rejection of independent claim 1, and grouped
claims 2-8 and 11-15 which fall therewith. See Claim Grouping, supra.
REPLY BRIEF
To the extent Appellants may advance new arguments in the Reply
Brief (Reply Br. 2-13) not in response to a shift in the Examiner's position
in the Answer, we note arguments raised in a Reply Brief that were not
raised in the Appeal Brief or are not responsive to arguments raised in the
Examiner's Answer will not be considered except for good cause (see 3 7
C.F.R. § 41.4I(b)(2)), which Appellants have not shown.
CONCLUSION
The Examiner did not err with respect to patent-ineligible subject
matter Rejection RI of claims I under 35 U.S.C. § 101, and we sustain the
rejection.
10 We note the question is not whether claims mention a computing
environment but what they are "directed to." The "directed to" inquiry
applies a stage-one filter to claims, considered in light of the specification,
based on whether "their character as a whole is directed to excluded subject
matter." Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346
(Fed. Cir. 2015); see Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369,
1376, (Fed. Cir. 2016) (inquiring into "[t]he focus of the claimed advance
over the prior art"); see also Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327,
1335 (2016).
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DECISION
We affirm the Examiner's decision rejecting claims 1-8 and 11-15.
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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