Ex Parte Dickson et al

Patent Trial and Appeal Board

Apr 17, 2017

13285427 (P.T.A.B. Apr. 17, 2017)

United States Patent and Trademark Office
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
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
13/285,427 10/31/2011 Stephen Dickson 11-2294 3178
63710 7590 04/19/2017
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
ALLADIN, AMBREEN A
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
04/19/2017 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
lkoro vich @ c antor. com
phowe @ cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte STEPHEN DICKSON and PELHAM TEMPLE
Appeal 2015-0050441
Application 13/285,4272
Technology Center 3600
Before MURRIEL E. CRAWFORD, NINA L. MEDLOCK, and
BRADLEY B. BAYAT, Administrative Patent Judges.
MEDLOCK, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner’s final
rejection of claims 1—36. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.
1 Our decision references Appellants’ Appeal Brief (“App. Br.,” filed
October 10, 2014) and Reply Brief (“Reply Br.,” filed April 6, 2015), and
the Examiner’s Answer (“Ans.,” mailed February 6, 2015) and Final Office
Action (“Final Act.,” mailed September 12, 2013).
2 Appellants identify CFPH, L.P. as the real party in interest. App. Br. 3.
Appeal 2015-005044
Application 13/285,427
CLAIMED INVENTION
Appellants’ claimed invention “relate[s] to interest rates and/or
spreads” (Spec. 1,1. 14).
Claims 1 and 19 are the independent claims on appeal. Claim 1,
reproduced below, is illustrative of the claimed subject matter:
1. An apparatus comprising:
a computing device; and
a non-transitory medium having stored thereon a plurality
of instructions that when executed by the computing device
cause the computing device to:
receive a plurality of interest rate expectations for
respective times during a time period;
based on the plurality of interest rate expectations,
calculate an expected first spread between a first financial
instrument based on an interest rate paid on unsecured interbank
deposits for the time period and a second financial instrument
based on expectations of overnight interest rates for the time
period;
provide the first spread through a user interface;
receive a first rate for the first financial instrument that is
based on the interest rate paid on unsecured interbank deposits
for the time period;
receive a second rate for the second financial instrument
that is based on expectations of overnight rates for the time
period;
calculate a second spread between the first rate and the
second rate;
calculate a spread of spreads between the first spread and
the second spread;
determine a correlation between a change in the first rate
and the second spread;
receive an indication of a change in the first rate;
determine a change in the second spread based on the
change in the first rate and the correlation;
in response to the indication of the change, adjust the first
spread to maintain a value of the spread of spreads;
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Application 13/285,427
in response to adjusting the first spread, adjust the plurality
of interest rate expectations to correspond to the new first spread;
and
provide the new first spread through the user interface.
REJECTIONS
Claims 1—36 are rejected under 35 U.S.C. § 101 as directed to non-
statutory subject matter.
Claims 1—36 are rejected under 35 U.S.C. § 103(a) as unpatentable
over Tuckman (US 2008/0281762 Al, pub. Nov. 13, 2008) and Connors
(US 2008/0249956 Al, pub. Oct. 9, 2008).
ANALYSIS
Non-Statutory Subject Matter
Appellants argue claims 1—36 as a group (Reply Br. 5—6). We select
independent claim 1 as representative. The remaining claims stand or fall
with claim 1. See 37 C.F.R. §41.37(c)(l)(iv).
Under 35 U.S.C. § 101, 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 an implicit exception: “[ljaws of nature, natural phenomena, and
abstract ideas” are not patentable. See, e.g., Alice Corp. Pty Ltd. v. CLS
Banklnt’l, 134 S. Ct. 2347, 2354 (2014).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus Labs.,
Inc., 132 S. Ct. 1289, 1300 (2012), “for distinguishing patents that claim
laws of nature, natural phenomena, and abstract ideas from those that claim
patent-eligible applications of those concepts.” Alice Corp., 134 S. Ct.
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Application 13/285,427
at 2355. The first step in that analysis is to “determine whether the claims at
issue are directed to one of those patent-ineligible concepts,” id., e.g., to an
abstract idea. If the claims are not directed to patent-ineligible concept, the
inquiry ends. Otherwise, the inquiry proceeds to the second step where the
elements of the claims are considered “individually and ‘as an ordered
combination”’ to determine whether there are additional elements that
“‘transform the nature of the claim’ into a patent-eligible application.” Alice
Corp., 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1297).
The Court acknowledged in Mayo, that “all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena,
or abstract ideas.” Mayo, 132 S. Ct. at 1293. We, therefore, look to whether
the claims focus on a specific means or method that improves the relevant
technology or are instead directed to a result or effect that itself is the
abstract idea and merely invoke generic processes and machinery.
Here, in rejecting the claims under 35 U.S.C. § 101, the Examiner
finds that claims 1—36 are directed to determining correlations between
interest rates, i.e., to a fundamental economic practice, and, therefore, to an
abstract idea; that the additional elements or combination of elements in the
claims other than the abstract idea per se amount to no more than: “(i) mere
instructions to implement the idea on a computer or electronic device, and/or
(ii) recitation 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”; and that viewed as a
whole, these additional claim elements do not provide meaningful
limitations to transform the abstract idea into a patent eligible application of
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Application 13/285,427
the abstract idea such that the claims amount to significantly more than the
abstract idea itself (Ans. 16—17).
Appellants argue that the Examiner has failed to make a prima facie
case of unpatentability because the Examiner has failed to establish that
‘“determining correlations between interest rates’ is actually abstract” and
also failed to provide evidence that this is a fundamental economic practice
(Reply Br. 5). But there is no requirement that the Examiner provide any
such evidence in order to make a prima facie case. Instead, the Federal
Circuit has held that the USPTO carries its procedural burden of establishing
a prima facie case when its rejection satisfies the requirements of 35 U.S.C.
§ 132 by notifying the applicant of the reasons for rejection, “together with
such information and references as may be useful in judging of the propriety
of continuing the prosecution of [the] application.” See In re Jung, 637 F.3d
1356, 1362 (Fed. Cir. 2011).
In rejecting claims 1—36 under § 101, the Examiner notified
Appellants of the reasons for the rejection “together with such information
and references as may be useful in judging of the propriety of continuing the
prosecution of [the] application.” 35 U.S.C. § 132. And, in doing so, we
find that the Examiner set forth a prima facie case of unpatentability.
Appellants next argue that claim 1 is not directed to “determining
correlations between interest rates,” but rather has “numerous limitations
and not one of them together or in combination with others amounts to
‘determining correlations between interest rates’” (Reply Br. 5). But
Appellants do not explain why these numerous limitations are not part and
parcel of a method for “determining correlations between interest rates.”
Indeed, it is telling in this regard that the Abstract explicitly states that
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Application 13/285,427
various embodiments of the claimed invention “may relate to determining
interest rates for one or more periods, determining interest rates for one or
more financial instruments, [and] determining correlations.”
Appellants next argue that the claim limitations together and/or
separately add significantly more to the abstract idea because the limitations
recite “an apparatus with novel and non-obvious functionality” {id. at 6).
Yet to the extent Appellants maintain that the limitations of claim 1
necessarily amount to “significantly more” than an abstract idea because the
claimed apparatus is allegedly patentable over the prior art, Appellants
misapprehend the controlling precedent. Although the second step in the
Alice/Mayo framework is termed a search for an “inventive concept,” the
analysis is not an evaluation of novelty or non-obviousness, but rather, a
search for “‘an element or combination of elements that is sufficient to
ensure that the patent in practice amounts to significantly more than a patent
upon the [ineligible concept] itself.’” Alice, 134 S. Ct. at 2355. A novel and
nonobvious claim directed to a purely abstract idea is, nonetheless, patent-
ineligible. See Mayo, 132 S. Ct. at 1304
Appellants further argue that claim 1 “solve [s] a problem rooted in
computer technology by improving the functionality and use of interest rate
and spread models and data in an electronic trading environment” and that
the present case is similar to DDR Holdings, LLC v. Hotels.com, L.P.,
773 F.3d 1245 (Fed. Cir. 2014) (Reply Br. 6). But we find no parallel
between claim 1 and the claims at issue in DDR Holdings.
In DDR Holdings, the Federal Circuit determined that, although the
patent claims at issue involved conventional computers and the Internet, the
claims addressed the problem of retaining website visitors who, if adhering
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Application 13/285,427
to the routine, conventional functioning of Internet hyperlink protocol,
would be transported instantly away from a host’s website after “clicking”
on an advertisement and activating a hyperlink. DDR Holdings, 773 F.3d
at 1257. The Federal Circuit, thus, held that the claims were directed to
statutory subject matter because they claim a solution “necessarily rooted in
computer technology in order to overcome a problem specifically arising in
the realm of computer networks.” Id.
No such technological advance is evident in the present invention.
Unlike the situation in DDR Holdings, Appellants do not identity any
problem particular to computer networks and/or the Internet that claim 1
allegedly overcomes. Instead, claim 1 merely employs generic computer
components to perform generic computer functions, i.e., receiving and
processing information.3
Appellants maintain the claims override the routine and conventional
sequence of events that would have otherwise not found a correlation
between interest rates and spreads or maintained a spread of spreads as
claimed (Reply Br. 6.). However, we are not persuaded that this represents
an improvement to any technology as opposed to an improvement to a
general business practice.
Finally, we are not persuaded of Examiner error by Appellants’
argument that “the claims do not attempt to preempt every application of the
3 The Specification discloses that “the various processes described herein
may be implemented by, e.g., appropriately programmed general purpose
computers, special purpose computers and computing devices” (Spec. 46,
11. 20-22). See also id. at 28,11. 11—30 (describing, with reference to
Figure 6, that an exemplary system may include “a computing device 601
(e.g., a broker’s computer, a general purpose computing device, etc.)”).
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alleged abstract idea, but rather recite specific manners of treated spreads
and rates” (Reply Br. 6). There is no dispute that the Supreme Court has
described “the concern that drives this exclusionary principle [i.e., the
exclusion of abstract ideas from patent eligible subject matter] as one of pre­
emption.” Alice, 134 S. Ct. at 2354. But characterizing pre-emption as a
driving concern for patent eligibility is not the same as characterizing pre­
emption as the sole test for patent eligibility. “The Supreme Court has made
clear that the principle of preemption is the basis for the judicial exceptions
to patentability” and “[f]or this reason, questions on preemption are inherent
in and resolved by the § 101 analysis.” Ariosa Diagnostics, Inc. v.
Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (citing Alice,
134 S. Ct. at 2354). Yet although “preemption may signal patent ineligible
subject matter, the absence of complete preemption does not demonstrate
patent eligibility.” Id.
In view of the foregoing, we sustain the Examiner’s rejection under
35 U.S.C. § 101 of claim 1, and claims 2—36, which fall with claim 1.
Obviousness
Independent Claim 1 and Dependent Claims 2—18
Appellants first argue that the Examiner erred in rejecting claim 1
under 35 U.S.C. § 103(a) because Tuckman, on which the Examiner relies,
does not disclose or suggest “calculating] a second spread between the first
rate [for the first financial instrument that is based on the interest rate paid
on unsecured interbank deposits for the time period] and the second rate [for
the second financial instrument that is based on expectations of overnight
rates for the time period],” as recited in claim 1 (App. Br. 10-13).
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Application 13/285,427
Claim 1 recites “based on the plurality of interest rate expectations,
calculate an expected first spread between a first financial instrument based
on an interest rate paid on unsecured interbank deposits for the time period
and a second financial instrument based on expectations of overnight interest
rates for the time period.” In addressing this limitation, the Examiner finds
that the federal funds in Tuckman corresponds to the claimed first financial
instrument and that the claimed second financial instrument corresponds to
either (1) LIBOR or (2) the Eurodollar (Ans. 19). Consistent with that
interpretation, in the argued limitation, the claimed “first rate,” i.e., for the
first financial instrument, is the federal funds rate and the claimed “second
rate,” i.e., for the second financial instrument, is either the LIBOR rate or the
Eurodollar rate (App. Br. 11).
Responding to Appellants’ argument, the Examiner ostensibly takes
the position that the claimed second spread corresponds to the market prices
of federal funds versus the 3-month LIBOR basis swaps shown in
element 230 of Tuckman’s Figure 2 and also to the differences between
market rates and pricing model rates for federal funds futures (element 210
in Figure 2 of Tuckman) and Eurodollar futures (element 220 in Tuckman
Figure 2) (see Ans. 21—26 (citing Tuckman || 17—20, 27, 31—35; Figures 1—
3)). However, we agree with Appellants that although some spread may be
shown in element 230 of Figure 2, there is no disclosure or suggestion
regarding how this spread is calculated (App. Br. 13). Further, neither the
market rate and model rate spread shown in element 210 of Figure 2 nor the
spread shown in element 220 can constitute a “second spread,” as recited in
claim 1, because neither represents a spread between a first rate, e.g., a
federal funds rate, and a second rate, e.g., a Eurodollar rate or a LIBOR rate
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(Reply Br. 3). Instead, element 210 shows the spread between a federal
funds market rate and a federal funds model rate; element 220 shows the
spread between a Eurodollars futures market rate and a Eurodollar model
rate.
In view of the foregoing, we do not sustain the Examiner’s rejection
of independent claim 1 under 35 U.S.C. § 103(a). For the same reasons, we
also do not sustain the Examiner’s rejection of dependent claims 2—18.
Cf. In reFritch, 972 F.2d 1260, 1266 (Fed. Cir. 1992) (“dependent claims
are nonobvious if the independent claims from which they depend are
nonob vious”).
Independent Claim 19 and Dependent Claims 20—36
Independent claim 19 include language substantially similar to the
language of claim 1, and stands rejected based on the same rationale applied
with respect to claim 1 (Final Act. 5). Therefore, we do not sustain the
Examiner’s rejection under 35 U.S.C. § 103(a) of independent claim 19, and
claims 20—36, which depend therefrom, for the same reasons set forth above
with respect to independent claim 1.
DECISION
The Examiner’s rejection of claims 1—36 under 35 U.S.C. § 101 is
affirmed.
The Examiner’s rejection of claims 1—36 under 35 U.S.C. § 103(a) is
reversed.
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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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