Ex Parte Co et al

Patent Trial and Appeal Board

Sep 26, 2018

13617845 (P.T.A.B. Sep. 26, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/617,845 09/14/2012
12684 7590 09/28/2018
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
FIRST NAMED INVENTOR
Richard Co
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.
4672-1201 lAUS 3309
EXAMINER
LIU, CHIA-YI
ART UNIT PAPER NUMBER
3695
NOTIFICATION DATE DELIVERY MODE
09/28/2018 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 RICHARD CO, JOHN NYHOFF, XING SU,
TUEN TUEN WANG, and JOHN LABUSZEWSKI 1
Appeal2017-006804
Application 13/617 ,845
Technology Center 3600
Before BRADLEY W. BAUMEISTER, IRVINE. BRANCH, and
MICHAEL M. BARRY, Administrative Patent Judges.
BAUMEISTER, Administrative Patent Judge.
DECISION ON APPEAL
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's
Final Rejection of claims 1, 3-9, 11, 13-17, and 19-22, which stand rejected
under 35 U.S.C. § 101 as being directed to patent-ineligible subject matter.
Final Act. 2-3. 2, 3 Appeal Br. 2. We have jurisdiction under 35 U.S.C.
§ 6(b ). We affirm.
1 Appellants identify Chicago Mercantile Exchange Inc. as the real party in
interest. Appeal Brief filed November 21, 2016 ("Appeal Br.") 2.
2 Rather than repeat the Examiner's positions and Appellants' arguments in
their entirety, we refer to the above-mentioned Appeal Brief, as well as the
following documents for their respective details: the Final Action mailed
April 5, 2016 ("Final Act."); the Examiner's Answer mailed January 18,
2017 ("Ans."); and the Reply Brief filed March 20, 2017 ("Reply Br.").
3 The Examiner withdrew a previously issued rejection under 35 U.S.C.
§ 112(b ). Ans. 3.
Appeal2017-006804
Application 13/617,845
THE INVENTION
Appellants describe the present invention as follows:
A method for matching compound orders from a group of
market participants includes receiving, via a communication
network, compound order data, the compound order data
specifying a maximum amount of a financial instrument of a
plurality of financial instruments to be bought or sold by each
market participant, accessing a memory in which price data is
stored, the price data indicating a current price of each financial
instrument, implementing, with a processor, a linear solver to
maximize fulfillment of the compound orders via order matching
for execution at the current prices in accordance with the
maximum amounts specified in the compound order data and in
accordance with a maximum net risk exposure level for each
market participant arising from the fulfillment of the compound
orders, and transmitting trade data indicative of the order
matching for execution of trades among the market participants
at the current prices.
Abstract.
Independent claim 1, reproduced below, illustrates the claimed
invention:
1. A computer implemented method for matching compound
orders, the method comprising:
receiving, by a server computer system in communication
with a plurality of computer devices via a communication
network, compound order data from a group of market
participants for a plurality of financial instruments, the
compound order data specifying a maximum amount of each
financial instrument of the plurality of financial instruments to
be bought or sold by each market participant of the group of
market participants;
accessing a memory in which price data is stored, the price
data indicating a respective price of each financial instrument of
the plurality of financial instruments at which the compound
orders are to be executed;
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Application 13/617,845
implementing, with a processor of the server computer
system, a linear solver configured for fulfillment of the
compound orders, the fulfillment being via order matching for
execution at the respective price of each financial instrument of
the plurality of financial instruments; and
transmitting trade data indicative of the order matching for
execution of trades among the market participants at the
respective price of each financial instrument of the plurality of
financial instruments;
wherein implementing the linear solver comprises:
defining an integer operant function with the
maximum amounts specified in the compound order data
and a respective maximum net risk exposure level for each
market participant as constraints on the integer operant
function; and
optimizing the integer operant function using the
linear solver;
wherein each respective maximum net risk exposure level
specifies long and short bounds on net risk exposure level that
allow each market participant to be allocated an unbalanced
portfolio as a result of the fulfillment.
THE REJECTION
The Examiner finds that claims 1, 3-9, 11, 13-17, and 19-22 are
directed to patent-ineligible subject matter because the claims more
specifically are directed to "the abstract idea of fundamental economic
practice and mathematical relationships/formula." Final Act. 2. The
Examiner additionally determines that the claims amount to no more than a
recitation of the abstract idea and mere instructions to implement the idea on
a computer. Id. The Examiner determines that "the[] additional element[ s]
do not provide meaningful limitation[ s] to transform the abstract idea into a
patent eligible application of the abstract idea such that the claim[ s] amount
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Application 13/617,845
to significantly more than the abstract idea itself' because the additional
computer elements are "recitation[ s] of generic computer structure that
serves to perform generic computer functions that are well-understood,
routine, and conventional activities previously known to the pertinent
industry." Id. at 2--4.
In the Advisory Action mailed June 17, 2016 ("Adv. Act."), the
Examiner adds an additional rationale for rejecting claims 19--22 under
35 U.S.C. § 101. The new ground results from an amendment to the
preamble of independent claim 19, changing "method" to "computer
program product." Adv. Act. 2. The Examiner explains that claims 19-22
are further rejected because "the product may be interpreted as propagation
medium or signal-bearing media, or carrier wave signals, thereby rendering
the claims non-statutory." Id.
Appellants present multiple arguments on appeal (Appeal Br. 6-11;
Reply Br. 2-5), which we address below seriatim.
PRINCIPLES OF LAW
We review the appealed rejections for error based upon the issues
identified by Appellants, and in light of the arguments and evidence
produced thereon. Ex parte Frye, 94 USPQ2d 1072, 107 5 (BP AI 2010)
(precedential).
Regarding the question of patent eligibility under 35 U.S.C. § 101, a
patent may be obtained for "any new and useful process, machine,
manufacture, or composition of matter, or any new and useful improvement
thereof." The Supreme Court has "long held that this provision contains an
important implicit exception: Laws of nature, natural phenomena, and
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abstract ideas are not patentable." Alice Corp. v. CLS Bank Int 'l, 134 S. Ct.
2347, 2354 (2014) (quoting Ass 'nfor Molecular Pathology v. Myriad
Genetics, Inc., 569 U.S. 576, 589 (2013)). Accordingly, in applying the
§ 101 exception, the Supreme Court cautioned:
[W]e must distinguish between patents that claim the
"'buildin[g] block[ s]"' of human ingenuity and those that
integrate the building blocks into something more, thereby
"transform[ing]" them into a patent-eligible invention. The
former "would risk disproportionately tying up the use of the
underlying" ideas, and are therefore ineligible for patent
protection. The latter pose no comparable risk of pre-emption,
and therefore remain eligible for the monopoly granted under our
patent laws.
Alice, 134 S. Ct. at 2354--55 (all brackets in original except first set)
(internal citations omitted).
In Alice, the Supreme Court has set forth an analytical "framework for
distinguishing patents that claim laws of nature, natural phenomena, and
abstract ideas from those that claim patent-eligible applications of those
concepts." Id. at 2355 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 71-73 (2012)). In the first step of the analysis, we
determine whether the claim at issue is "directed to" a judicial exception,
such as an abstract idea. Id. at 2355. If not, the inquiry ends. Thales
Visionix Inc. v. US., 850 F.3d 1343, 1346 (Fed. Cir. 2017); Enfzsh, LLC v.
Microsoft Corp., 822 F.3d 1327, 1339 (Fed. Cir. 2016). If the claim is
determined to be directed to an abstract idea, then we consider under step
two whether the claim contains an "inventive concept" sufficient to
"transform the nature of the claim into a patent-eligible application." Alice,
134 S. Ct. at 2355 (quotations and citation omitted).
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In considering whether a claim is directed to an abstract idea, we
acknowledge, as did the Supreme Court, that "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. We therefore look to whether the
claim focuses on a specific means or method that improves the relevant
technology or is instead directed to a result or effect that, itself, is the
abstract idea and merely invokes generic processes and machinery. See
Enfzsh, 822 F.3d at 1336.
In the second step of the Alice analysis, if applicable, we then must
consider whether the claim contains an element or a combination of
elements that is sufficient to transform the nature of the claim into a patent-
eligible application. Ultramercial, Inc. v. Hulu LLC, 772 F.3d 709, 714
(Fed. Cir. 2014); Alice, 134 S. Ct. at 2355.
In applying step two of the Alice analysis, we must
"determine whether the claim[] do[ es] significantly more than
simply describe [the] abstract method" and thus transform the
abstract idea into patentable subject matter. We look to see
whether there are any "additional features" in the claim[] that
constitute an "inventive concept," thereby rendering the claim[]
eligible for patenting even if [it is] directed to an abstract idea.
Those "additional features" must be more than "well-understood,
routine, conventional activity."
Intellectual Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1328 (Fed.
Cir. 2017) ( citations omitted).
A claim that "merely require[ s] generic computer implementation[]
fail[s] to transform [an] abstract idea into a patent-eligible invention." Alice,
134 S. Ct. at 2357.
Central to our analysis herein is the fundamental principle that the
Alice framework must be applied to the claims, as properly construed. As
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our reviewing court has stated, "The § 101 inquiry must focus on the
language of the Asserted Claims themselves." Synopsys, Inc. v. Mentor
Graphics Corp., 839 F.3d 1138, 1149 (Fed. Cir. 2016); see also Accenture
Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1345
(Fed. Cir. 2013) (admonishing that "the important inquiry for a§ 101
analysis is to look to the claim"); Content Extraction & Transmission LLC v.
Wells Fargo Bank, Nat'! Ass 'n, 776 F.3d 1343, 1346 (Fed. Cir. 2014)
(focusing on "whether the claims of the asserted patents fall within the
excluded category of abstract ideas") ( emphasis added)).
These principles are based on long-established jurisprudence that "[i]t
is the claims [that] define the metes and bounds of the invention entitled to
the protection of the patent system." In re Warmerdam, 33 F.3d 1354, 1360
(Fed. Cir. 1994) (citing Zenith Lab. Inc. v. Bristol-Myers Squibb Co., 19
F.3d 1418, 1424 (Fed. Cir. 1994)); see also In re Hiniker Co., 150 F.3d
1362, 1369 (Fed. Cir. 1998) ("[T]he name of the game is the claim.").
CONTENTIONS AND ANALYSIS
I.
Appellants argue the Examiner mischaracterizes the invention, which,
in fact, "is directed to matching compound orders." Appeal Br. 6.
Appellants urge that the characterization should include
that (i) compound order data specifies a maximum amount of
each financial instrument of a plurality of financial instruments
to be bought or sold by each market participant of a group of
market participants, and (ii) each respective maximum net risk
exposure level specifies long and short bounds on net risk
exposure level that allow each market participant to be allocated
an unbalanced portfolio as a result of the fulfillment.
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Application 13/617,845
Id. at 7.
Appellants further argue that "[ t ]he present claims thus specify a
specific context in which the compound order matching is implemented,"
and that "[ t ]he Office Action fails to provide a rationale for disregarding
these meaningful aspects of the claimed invention in characterizing the
invention." Id.
Appellants' arguments are unpersuasive. The "contextual aspects" to
which Appellants cite do not change the characterization of the abstract idea.
These contextual aspects just make the abstract idea more detailed. See
Apple v. Ameranth Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016) ("An abstract
idea can generally be described at different levels of abstraction.")
II.
Appellants argue that aspects of the claimed invention, such as
activities involving implementing a linear solver to fulfill the compound
orders, "are not fundamental economic practices, but rather [are] detailed
procedures taken in the context of compound order matching." Appeal Br.
7. Appellants' argument is unpersuasive. We understand the Examiner's
position to be that these aspects pertaining to the solver's procedure, itself,
are directed to mathematical relationships and formulas-not to a
fundamental economic practice. Ans. 5-6.
Appellants also argue
Optimizing an integer operant function using a linear
solver also does not constitute a mathematical relationship or
formula. No rationale has been provided to the contrary.
The present claims are not directed to a mathematical
relationship or formula simply because the optimization involves
mathematics. Implementing calculations, or using mathematics,
does not mean that the present claims are directed to a
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Application 13/617,845
mathematical relationship or formula. For instance, the claims
are not reciting the components of, or otherwise attempting to
claim, a linear solver. The present claims are instead directed to
a specific application of a linear solver.
Appeal Br. 8.
Appellants' arguments are unpersuasive. Although the disputed
limitations may more specifically entail applying the linear solver (applying
a device or module that includes formulas for performing mathematical
calculations), as opposed to being directed to a linear solver itself, the
specific application for which the linear solver is being used is for
performing the abstract idea of fulfilling compound orders. As our
reviewing court has held, combining several abstract ideas does not render
the combination any less abstract. RecogniCorp, LLC v. Nintendo Co., 855
F.3d 1322, 1327 (Fed. Cir. 2017) ("Adding one abstract idea ... to another
abstract idea ... does not render the claim non-abstract."); see also
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093-94 (Fed.
Cir. 2016) (patent-ineligible claims were directed to a combination of
abstract ideas).
III.
Appellants argue that the claimed invention amounts to significantly
more than a judicial exception and that "the rejection fails to evaluate the
'significantly more' requirement." Appeal Br. 8; see generally id. 8-10.
More specifically, although the Examiner finds that the claims are directed
patent ineligible because they recite the abstract ideas of "receiving order
data, accessing memory, implementing [a] linear solver, transmitting trade
data, defining integer operant function, [ and] optimizing integer operant
function using [the] linear solver" (Final Act. 4; Adv. Act. 2), Appellants
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Application 13/617,845
argue that "[ t ]he present claims [] recite a number of meaningful limitations
beyond the laundry list provided" by the Examiner. Appeal Br. 8.
Appellants argue that one example of claim language reciting
significantly more than the abstract idea is in the following limitation of
claim 1: "defining an integer operant function with maximum amounts
specified in compound order data and a respective maximum net risk
exposure level for each market participant as constraints on the integer
operant function." Id. at 8-9. Appellants also argue that the Examiner
"appears to justify disregarding these limitations [that allegedly add
significantly more] because they amount to no more than 'mere instructions
to implement the idea on a computer." Id. at 9. Appellants then argue that
the Examiner has provided no case law or other rationale to support "this
position." Id.
It is not completely clear which "position" the Examiner allegedly has
failed to support with case law or other rationale. If Appellants are arguing
that the Examiner failed to provide case law or other rationale to support or
justify disregarding the claim limitation that Appellants cite, this argument is
unpersuasive. The Examiner did not disregard the cited claim limitation.
The limitation specifically was determined to be directed to an abstract idea.
Final Act. 4. And we agree because, as we explained in the preceding
section, using mathematical formulas to perform calculations in relation to
abstract, fundamental economic activities does not give rise to a
"significantly more" inquiry. Such a use of mathematical formula to
perform a fundamental economic practice more efficiently constitutes an
abstract idea, itself.
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Application 13/617,845
If Appellants alternatively are arguing that the Examiner failed to
provide case law or other rationale to support the position that the claims
merely recite generic computer functions to carry out the outlined abstract
idea, the argument still is unpersuasive. The Examiner found that using a
computer to perform the activities of receiving order data, accessing
memory, transmitting data, and implementing a solver based on user-defined
fmmulas would have entailed a computer merely performing generic
computer functions. Final Act. 4. \Ve agree.
Previous cases have similarly found that such activities are
conventional computer activities or routine data-gathering steps. S'ee, e.g.
Elec. Polver Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1355 (Fed. Cir. 2016)
("Nothing in the clairns, understood in light of the specification, requires
anything other than off-the-shelf: conventional computer, network, and
display technology for gathering, sending, and presenting the desired
information."); OJP Techs. v. Amazon.com, inc., 788 F.3d 1359, 1363, (Fed.
Cir. 2015) ( claims reciting, inter alia, sending messages over a network,
gathering statistics, using a computerized system to automatically determine
an estimated outcome, and presenting offers to potential customers found to
merely recite '\vell-understood, routine conventional activities'' by either
requiring conventional computer activities or routine data-gathering steps);
l h C'AJ-·PT .~, 1 r -6PT:"'d1J,01"'s,:;;/1::1c· see a so ,z~y,_,.1:1 '1~, 1nc. v. boog e, 1nc., In r ._1 _ ., , .:'l. _ tree. .ir.
2014) ("That a computer receives and sends the information over a
network-with no further specification-is not even arguably inventive.");
Bancorp Servs. v. Sun Life, 687 F.3d 1266, 1278 (Fed. Cir. 2012) ("The
computer required by some of Bancorp' s claims is employed only for its
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Application 13/617,845
most basic function, the performance of repetitive calculations, and as such
does not impose meaningful limits on the scope of those claims.").
IV.
The Examiner also rejects just claims 19--22 as being directed to
patent-ineligible subject matter because these claims' preambles set forth
"[a] computer program product." Adv. Act. 2. The Examiner determines
that the claims reasonably may be interpreted as reading on non-statutory
propagation media, signal-bearing media, or carrier waves. Id.
Appellants point out that independent claim 19 additionally recites
that the computer program product comprises one or more computer-
readable storage media. Appeal Br. 4. Appellants argue that the
Specification sufficiently distinguishes the term "computer-readable storage
medium" from transitory carrier waves and other signals propagating in
transmission media. Appeal Br. 10 ( citing Spec. ,r 7 5).
The cited passage of Appellants' Specification reads as follows:
In a particular non-limiting, exemplary embodiment, the
computer-readable medium can include a solid-state memory
such as a memory card or other package that houses one or more
non-volatile read-only memories. Further, the computer-
readable medium can be a random access memory or other
volatile rewritable memory. Additionally, the computer-
readable medium can include a magneto-optical or optical
medium, such as a disk or tapes or other storage device[s] to
capture carrier wave signals such as a signal communicated
over a transmission medium. A digital file attachment to an e-
mail or other self-contained information archive or set of
archives may be considered a distribution medium that is a
tangible storage medium. Accordingly, the disclosure is
considered to include any one or more of a computer-readable
medium or a distribution medium and other equivalents and
successor media, in which data or instructions may be stored.
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Spec. ,r 7 5 ( emphasis added).
As a threshold matter, claims 21 and 22 depend from method
claim I-not computer pro gram product claim 19. See Appeal Br. 1 7. That
is, claims 21 and 22 do not recite a computer program product.
Accordingly, we do not sustain this theory of rejection for claims 21 and 22.
Turning to claims 19 and 20, which do recite a computer program
product comprising one or more computer-readable storage media,
Appellants' arguments are persuasive. Terms such as "computer readable
medium" typically are interpreted under the broadest-reasonable-
interpretation standard to include non-statutory, transitory signals. See In re
Nuijten, 500 F.3d 1346 (Fed Cir. 2007); see also M.P.E.P. § 2106.03(II).
Furthermore, it is common for the Office to require applicants to clarify a
claim's scope by requiring the limitation "non-transitory" be added to terms
such as "computer readable medium." See "Subject Matter Eligibility of
Computer Readable Media" Memo by David Kappos, dated Jan. 20, 2010. 4
However, such canons of claim construction are not per se rules.
Instead, claims in a patent application are given their broadest reasonable
construction consistent with the Specification. In re Am. Acad. of Sci. Tech
Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004).
In the present case, Appellants' Specification is reasonably clear in
employing the term "computer-readable storage media" to exclude transitory
carrier wave signals and transmission media. Paragraph 7 5 indicates that
computer readable media capture carrier wave signals-they are not carrier
wave signals themselves. Paragraph 75 similarly recites "computer-readable
4 Available at https://www.uspto.gov/web/offices/com/sol/og/2010/week08/
TOC.htm#ref20).
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medium or a distribution medium" in the alternative, thereby indicating that
the terms are not synonymous.
Furthermore, the Examiner does not respond to the Appellants'
arguments regarding claims 19 and 20. See generally Ans.
CONCLUSIONS
We sustain the Examiner's first rationale for rejecting claims 1, 3-9,
11, 13-17, and 19-22 under 35 U.S.C. § 101 as being directed to patent-
ineligible subject matter. 5
We do not sustain the Examiner's second rationale for rejecting
claims 19-22 under 35 U.S.C. § 101 as being directed to patent-ineligible
subject matter.
DECISION
The Examiner's decision rejecting claims 1, 3-9, 11, 13-17, and 19-
22 is affirmed.
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 ). See 37 C.F.R.
§ 1.136(a)(l )(iv).
AFFIRMED
5 With respect to the Examiner's first rationale, Appellants argue claims 1,
3-9, 11, 13-17, and 19-22 together as a group. See Appeal Br. 10.
Accordingly, we select independent claim 1 as representative. See 37 C.F.R.
§ 4I.37(c)(l)(iv).
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