Ex Parte Cody et al

Patent Trial and Appeal Board

Nov 28, 2018

12322826 (P.T.A.B. Nov. 28, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
12/322,826 02/05/2009 Win Cody
27730 7590 11/30/2018
DILWORTH PAXSON LLP
1500 Market Street
Suite 3500 E
PHILADELPHIA, PA 19102
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.
09-1031 4997
EXAMINER
MERCHANT, SHAHID R
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
11/30/2018 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@dilworthlaw.com
ebehm@dilworthlaw.com
ddiamond@dilworthlaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK
OFFICE
BEFORE THE PATENT TRIAL AND APPEAL
BOARD
Ex parte WIN CODY, MARK KLEIN, and
JAMES MARX
Appeal2017-010543 1
Application 12/322,826
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 final rejection of claims 5-16 and 18. We
have jurisdiction to review the case under 35 U.S.C. §§ 134 and 6.
1 The Appellants identify Professional Capital Services, LLC as the real
party in interest. Appeal Br. 1.
Appeal2017-010543
Application 12/322,826
The invention relates generally to systems and methods for managing
investments, particularly in Exchange Traded Fund (ETF) 401(k) retirement
plans. Spec. ,r 1. 2
Claim 5, the only independent claim pending, is illustrative:
5. A computer-based method for managing an investment
plan including Exchange Traded Funds (ETFs) comprising:
gathering daily plan participant buy/sell orders for ETF trades
and mutual fund trades from a storage medium of a
recordkeeping system of a third party administrator and
systems associated with a plan participant's website and
storing the orders in a trade order file before market close;
filtering the trade order file using a computer processor of the
record keeping system to separate the ETF trades from the
mutual fund trades in the buy/sell orders, whereby the
mutual fund trades are routed to trade link processes;
maintaining a breakage account in the investment plan
wherein the breakage account holds market positions and
cash on behalf of the investment plan for completing the
ETF trades in whole share values;
calculating from the ETF trades the net ETF share buy or sell
per ETF fund held in the investment plan whereby the net
ETF share buy or sell trade with a fractional unit per ETF
fund held in the investment plan are rounded up to whole
ETF share sell or dollar-certain ETF buy and storing the
results in the trade order file;
calculating a fractional needed share worth necessary to
round the net ETF share sell up to the whole ETF share
sell or the net ETF share buy up to the dollar-certain ETF
buy and storing the results in the breakage account file;
settling all trade orders in the trade order file at market close
for plan participants,
2 We shall refer to the paragraph numbers in the original Specification, filed
Feb. 5, 2009 (hereinafter "Spec.").
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Appeal2017-010543
Application 12/322,826
(i) whereby the fractional needed share worth in the case
of a dollar-certain ETF buy is transferred from the
breakage account of the investment plan into a plan
participant account;
(ii) whereby, if the breakage account has more than or
the same as the fractional needed share, then the
fractional needed share worth in the case of the
whole ETF share sale is sold from the breakage
account of the plan along with the net ETF share sell
from plan participant accounts; and
(iii) whereby, if the breakage account has less than the
fractional needed share worth in the case of a whole
ETF share sale, then the fractional unit of the net
ETF share sell is purchased by the breakage account
of the investment plan;
and
wherein results of buy/sell orders in the trade order file
and in the breakage account file are stored in the
storage medium.
The Examiner rejected claims 5-16 and 18 under 35 U.S.C. § 101 as
directed to ineligible matter in the form of an abstract idea.
We AFFIRM.
ANALYSIS
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. The
Supreme Court, however, has long interpreted § 101 to include implicit
exceptions: "[l]aws of nature, natural phenomena, and abstract ideas" are
not patentable. E.g., Alice Corp. Pty. Ltd. v. CLS Bank Int 'l, 134 S. Ct.
2347, 2354 (2014).
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-
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Application 12/322,826
step framework, described in Mayo and Alice. Id. at 2355 (citing Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1296-97
(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 ("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."); 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."); Diamond v. Diehr, 450 U.S. 175, 184 (1981) ("Analyzing
respondents' claims according to the above statements from our cases, we
think that a physical and chemical process for molding precision synthetic
rubber products falls within the § 101 categories of possibly patentable
subject matter."); Parker v. Flook, 437 U.S. 584, 594--595 (1978)
("Respondent's application simply provides a new and presumably better
method for calculating alarm limit values."); Gottschalk v. Benson, 409 U.S.
63, 64 (1972) ("They claimed a method for converting binary-coded decimal
(BCD) numerals into pure binary numerals.").
The following method is then used to determine whether what the
claim is "directed to" is an abstract idea:
[T]he decisional mechanism courts now apply is to examine
earlier cases in which a similar or parallel descriptive nature can
be seen-what prior cases were about, and which way they were
decided. See, e.g., Elec. Power Grp., 830 F.3d at 1353-54. That
is the classic common law methodology for creating law when a
single governing definitional context is not available. See
generally Karl N. Llewellyn, The Common Law Tradition:
Deciding Appeals (1960). This more flexible approach is also
the approach employed by the Supreme Court. See Alice, 134 S.
Ct. at 2355-57. We shall follow that approach here.
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Application 12/322,826
Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1294 (Fed.
Cir. 2016).
The patent-ineligible end of the spectrum includes fundamental
economic practices, Alice, 134 S. Ct. at 2357; Bilski, 561 U.S. at 611;
mathematical formulas, Flook, 437 U.S. at 594--95; and basic tools of
scientific and technological work, Benson, 409 U.S. at 69. On the patent-
eligible side of the spectrum are physical and chemical processes, such as
curing rubber, Diamond, 450 U.S. at 182 n.7, "tanning, dyeing, making
waterproof cloth, vulcanizing India rubber, smelting ores," and a process for
manufacturing flour, Benson, 409 U.S. at 67.
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.
The Appellants acknowledge independent claim 5 is directed to an
abstract idea, but argue that the claim recites eligible subject matter because,
according to the Appellants, the steps of the claim permit exchange of cash
for fractional shares of exchange-traded funds, which are manipulations of
tangible assets, thus yielding an "improved technological process." Appeal
Br. 7-8. The Appellants assert that the claim involves three types of
tangible assets: the cash and share values in the investor's account that
"represents real, tangible assets," the shares of a company's stock that
"represent that real, tangible assets of the company," and value in the
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Appeal2017-010543
Application 12/322,826
claimed breakage account "which holds ETF shares and/or cash of the
investment plan manager." Reply Br. 1-2.
The problem with the Appellants' arguments is that none of the cited
items are tangible. "Value," even if measured in units of currency, is a
concept useful and intelligible only in the human mind, as is the money in
which it is measured. Stocks similarly represent the theoretical concept of
fractional ownership of a legal entity known as a corporation. The breakage
account, like any account, is merely a record of values. That the claims keep
track of fractional shares of ownership and account for them internally,
without needing to trade fractional share in a market that does not permit
fractional share trading, does not manipulate anything tangible. By the
Appellants' own argument, these values, stocks, and accounts are merely
representations, and representations are only useful and intelligible in the
human mind.
The Appellants have not shown error in the Examiner's rejection of
claim 5. For this reason, we sustain the rejection of claims 5-16 and 18
under 35 U.S.C. § 101, because the Appellants state that dependent
claims 6-16 and 18 stand or fall with claim 5. Appeal Br. 3.
DECISION
We AFFIRM the rejection of claims 5-16 and 18 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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