Ex Parte Driscoll

Patent Trial and Appeal Board

Jun 27, 2018

13613446 (P.T.A.B. Jun. 27, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/613,446 09/13/2012
63710 7590 06/29/2018
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
FIRST NAMED INVENTOR
James R. Driscoll
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.
08-2214-C2 4996
EXAMINER
BOVEJA, NAMRATA
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
06/29/2018 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):
patentdocketing@cantor.com
lkorovich@cantor.com
phowe@cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Exparte JAMES R. DRISCOLL 1
Appeal2017-004495
Application 13/613,446
Technology Center 3600
Before CAROLYN D. THOMAS, JOSEPH P. LENTIVECH, and
MICHAEL J. ENGLE, Administrative Patent Judges.
THOMAS, Administrative Patent Judge.
DECISION ON APPEAL
Appellant seeks our review under 35 U.S.C. § 134(a) of the
Examiner's Final Rejection of claims 1-30, all the pending claims in the
present application. See Claims Appendix. We have jurisdiction over the
appeal under 35 U.S.C. § 6(b).
We AFFIRM.
The present invention relates generally to "trading financial
instruments through multiple trading intermediaries" (Spec. Abstract).
1 Appellant names CFPH, L.P. as the real party in interest (App. Br. 3).
Appeal2017-004495
Application 13/613,446
Claim 1 is illustrative:
1. A method comprising:
computing, by a computing device, a first distribution of
first sub-parts for a participant's first desire to engage in an exchange
of an instrument, in which the first distribution assigns each of the
first sub-parts to a respective matching venue of a plurality of
matching venues;
in response to computing the first distribution,
attempting, by the computing device, to fulfill the participant's first
desire through the plurality of matching venues according to the first
distribution of first sub-parts;
receiving, by the computing device, an indication
identifying a change to a desired quantity of the same exchange of the
instrument pending at at [sic] least one matching venue of the
plurality of matching venues;
in response to receiving the indication, computing, by the
computing device, a second distribution of second sub-parts for the
first desire the plurality of matching venues based at least in part on
the change; and
in response to computing the second distribution,
attempting, by the computing device, to fulfill the first desire through
the plurality of matching venues according to the second distribution
of second sub-parts.
Appellant appeals the following rejection:
Claims 1-30 are rejected under 35 U.S.C. § 101 because the claimed
invention is directed to non-statutory subject matter.
We review the appealed rejections for error based upon the issues
identified by Appellant, and in light of the arguments and evidence produced
thereon. Ex parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010) (precedential).
2
Appeal2017-004495
Application 13/613,446
ANALYSIS
Rejection under§ 1 OJ
Issue: Did the Examiner err in finding that the claims are directed to
non-statutory subject matter?
With respect to independent method claim 1, and similarly, apparatus
claims 28-30, the Examiner finds these claims are directed to an abstract
idea of "exchanging financial instruments whereby quantities of the financial
instrument being traded is matched against quantities desired by other
participants" which is "a fundamental economic practice" (Final Act. 5).
The Examiner adds that the claims "amount(s) to no more than mere
instructions to implement the idea on a generic computer" (id. at 6), and "no
improvement to the computing device itself is accomplished" (id.). We
agree with the Examiner for at least the reasons infra.
A patent may be obtained for "any new and useful process, machine,
manufacture, or composition of matter, or any new and useful improvement
thereof." 35 U.S.C. § 101. The Supreme Court has held that this provision
contains an important implicit exception: Laws of nature, natural
phenomena, and abstract ideas are not patentable. Alice Corp. Pty. Ltd. v.
CLS Bank Int 'l, 134 S. Ct. 2347, 2354 (2014); Gottschalk v. Benson, 409
U.S. 63, 67 (1972) ("Phenomena of nature, though just discovered, mental
processes, and abstract intellectual concepts are not patentable, as they are
the basic tools of scientific and technological work."). Notwithstanding that
a law of nature or an abstract idea, by itself, is not patentable, the application
of these concepts may be deserving of patent protection. Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293-94
(2012). In Mayo, the Court stated that "to transform an unpatentable law of
3
Appeal2017-004495
Application 13/613,446
nature into a patent eligible application of such a law, one must do more
than simply state the law of nature while adding the words 'apply it."' Id. at
1294 ( citation omitted).
In Alice, the Court reaffirmed the framework set forth previously in
Mayo "for distinguishing patents that claim laws of nature, natural
phenomena, and abstract ideas from those that claim patent-eligible
applications of these concepts." Alice, 134 S. Ct. at 2355. The first step in
the analysis is to "determine whether the claims at issue are directed to one
of those patent-ineligible concepts." Id. If the claims are directed to a
patent-ineligible concept, then the second step in the analysis is to consider
the elements of the claims "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." Id. (quoting Mayo, 132 S.
Ct. at 1298, 1297).
In other words, the second step is to "search for an 'inventive
concept' - i.e., 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."' Id. (brackets in original) ( quoting
Mayo, 132 S. Ct. at 1294). The prohibition against patenting an abstract idea
"cannot be circumvented by attempting to limit the use of the formula to a
particular technological environment or adding insignificant post-solution
activity." Bilski v. Kappas, 561 U.S. 593, 610-11 (2010) (citation and
internal quotation marks omitted). The Court in Alice noted that "' [ s ]imply
appending conventional steps, specified at a high level of generality,' was
not 'enough' [in Mayo] to supply an 'inventive concept."' Alice, 134 S. Ct.
at 2357 (quoting Mayo, 132 S. Ct. at 1300, 1297, 1294).
4
Appeal2017-004495
Application 13/613,446
Step one: Are the claims at issue directed to a patent-ineligible concept?
Appellant contends that "the Examiner fails to make a prima facie
showing ... [because] the Examiner provides no evidence at all" (App. Br.
7) and the "Examiner certainly makes no statement and presents no evidence
regarding the long prevalence of this alleged abstract idea" (id. at 8).
Appellant further contends "[t]he fact the Examiner was unable to raise any
prior art to support a 102 or 103 rejection is evidence that the idea is not
either fundamental or long prevalent" (id.).
We disagree with Appellant's contentions. Instead, we find that the
Examiner has provided a sufficient response supported by a preponderance
of evidence (Final Act. 5-7; Ans. 2-6). As such, we refer to, rely on, and
adopt the Examiner's findings and conclusions set forth in the Answer. Our
discussions here will be limited to the following points of emphasis.
The Federal Circuit has repeatedly noted that "the prima facie case is
merely a procedural device that enables an appropriate shift of the burden of
production." Hyatt v. Dudas, 492 F.3d. 1365, 1369 (Fed. Cir. 2007) (citing
In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992)). The court has, thus,
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). Thus, all that is required of the Office is that it
set forth the statutory basis of the rejection in a sufficiently articulate and
informative manner as to meet the notice requirement of§ 132. Id
5
Appeal2017-004495
Application 13/613,446
Here, in rejecting claims 1-30 under 35 U.S.C. § 101, the Examiner
analyzed the claims using the Mayo/Alice two-step framework, consistent
with the guidance set forth in the USPTO's "2014 Interim Guidance on
Patent Subject Matter Eligibility," 79 Fed. Reg. 74618 (Dec. 16, 2014), in
effect at the time the rejection was made, i.e., on July 1, 2015. Thus, the
Examiner notified Appellant 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.
Therefore, contrary to Appellant's assertions, in doing so, the Examiner set
forth a prima facie case of unpatentability such that the burden shifted to
Appellant to demonstrate that the claims are patent-eligible.
Regarding Appellant's contention that the Examiner "presents no
evidence regarding the long prevalence of this alleged abstract idea" (App.
Br. 8), we are not aware of any controlling precedent that imposes such a
requirernent on the Examiner and Appellant has not sufficiently identified
any such precedent in Alice. Thus~ vve agree with the Examiner that Alice
"does not stand for a proposition that abstract ideas be old or long prevalent"
(Ans. 4).
Regarding Appellant's contention that "the Examiner was unable to
raise any prior art to support a 102 or 103 rejection is evidence that the idea
is not either fundamental or long prevalent" (App. Br. 8), the Examiner
finds, and we agree, that "[ n Jovelty and non-obviousness have no bearing on
whether a claim recites an abstract idea" (Ans. 2). See Intellectual Ventures
I LLC v. Symantec Corp., 838 F.3d 1307, 1315 (Fed. Cir. 2016). Indeed,
"[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
6
Appeal2017-004495
Application 13/613,446
falls within the§ 101 categories of possibly patentable subject matter."
Diamond v. Diehr, 450 U.S. 175, 188-89 (1981) (emphasis added); see also
Mayo, 132 S. Ct. at 1303-04 (rejecting "the Government's invitation to
substitute§§ 102, 103, and 112 inquiries for the better established inquiry
under § 10 l ").
Claim 1 recites five steps: (a) computing a first distribution;
(b) attempting to fulfill the participant's first desire; ( c) receiving an
indication identifying a change; ( d) computing a second distribution; and
( e) attempting to fulfill the first desire according to second distribution.
Each of these steps involve information regarding financial instruments and
a method for trading the same.
In examining the aforementioned steps, the Examiner highlights
various court decisions (see Final Act. 7, citing Bilski, Mayo, Alice). 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, 561 U.S. at 611 ("Claims 1 and 4 in
petitioners' application explain the basic concept of hedging, or protecting
against risk."); Diamond, 450 U.S. at 184 ("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, 409 U.S. at 64 ("They claimed a method for
converting binary-coded decimal (BCD) numerals into pure binary
numerals.").
7
Appeal2017-004495
Application 13/613,446
Because the claims are directed to exchanging financial instruments
matching quantities by different participants, an abstract idea, the claims at
issue are directed to patent-ineligible subject matter.
Step two: Is there something else in the claims that ensures that they are
directed to significantly more than a patent-ineligible concept?
To establish a prima facie case, the Examiner must next identify all of
the additional elements in each claim and explain why these elements,
individually or collectively, do not add significantly more than the abstract
idea. Here, the Examiner find that the claims "amount(s) to no more than
mere instructions to implement the idea on a generic computer" (Final Act.
6), and "no improvement to the computing device itself is accomplished"
(id.). Again, we agree with the Examiner.
"A claim that recites an abstract idea must include 'additional
features' to ensure 'that the [claim] is more than a drafting effort designed to
monopolize the [abstract idea]."' Alice, 134 S. Ct. at 2357 (brackets in
original) (quoting Mayo, 132 S. Ct. at 1297). The prohibition against
patenting an abstract idea "cannot be circumvented by attempting to limit the
use of the formula to a particular technological environment or adding
insignificant post-solution activity." Bilski, 561 U.S. at 610-11 (citation and
internal quotation marks omitted). The recitations in claim 1 pertaining to "a
computing device" are analogous to the recitation of a conventional
"computer" discussed in Alice.
Additionally, as recognized by the Federal Circuit in Ultramercial,
Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014), Bilski's "machine-or-
transformation" (MoT) test can also provide a "'useful clue"' in the second
8
Appeal2017-004495
Application 13/613,446
step of the Alice framework. See Bilski, 561 U.S. at 611. Under Bilski's
MoT test, a claimed process can be considered patent-eligible under§ 101 if:
(1) "it is tied to a particular machine or apparatus"; or (2) "it transforms a
particular article into a different state or thing." In re Bilski, 545 F.3d 943,
954 (Fed. Cir. 2008) (citing Gottschalk, 409 U.S. at 70), ajf'd, 561 U.S. 593.
Appellant contends that "[t]he Examiner has provided no evidence
that these limitations are not substantially more ... [ and] does not even
mention a single limitation of a single dependent claim" (App. Br. 9).
Appellant further contends that the claimed "matching venues are specific
particular machines and not generic computers performing generic computer
functions" (id.).
Although the ultimate determination of eligibility is a question of law,
our reviewing court recently held "'[t]he patent eHgibility inquiry may
contain underlying issues of fact" Berkheimer v. HP Inc., 881 F.3d 1360,
1365 (Fed. Cir. 2018) (citingMortg. Grader, Inc. v. First Choice Loan
Servs. Inc., 811 F.3d 1314, 1325 (Fed. Cir. 2016) ("The§ 101 inquiry 'may
contain underlying factual issues'")). Here, we find unavailing Appellant's
contention supra that the Examiner provided no evidence given the
Examiner's Response to Arguments in both the Final Action and in the
Answer (see Final Act. 2-7 and Ans. 2-6) in which factual findings were
presented, including addressing the dependent claims.
Further, we point out that Appellant's Specification merely indicates
that "a general purpose computer" can be used to implement the claimed
method (see Spec., ,-J,-J 76-77). Appellant fails to identify where the
Specification discloses that the "matching venues are specific particular
machines."
9
Appeal2017-004495
Application 13/613,446
As recognized by the Supreme Court, "the mere recitation of a generic
computer cannot transform a patent-ineligible abstract idea into a patent-
eligible invention." Alice, 134 S. Ct. at 2359 (concluding claims "simply
instruct[ing] the practitioner to implement the abstract idea of intermediated
settlement on a generic computer" not patent eligible); see also
Ultramercial, 772 F .3d at 715-16 ( claims merely reciting abstract idea of
using advertising as currency as applied to particular technological
environment of the Internet not patent eligible); Accenture Global Servs.,
GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1344-45 (Fed. Cir.
2013) ( claims reciting "generalized software components arranged to
implement an abstract concept [ of generating insurance-policy-related tasks
based on rules to be completed upon the occurrence of an event] on a
computer" not patent eligible); Dealertrack, Inc. v. Huber, 674 F.3d 1315,
1333-34 (Fed. Cir. 2012) ("[s]imply adding a 'computer aided' limitation to
a claim covering an abstract concept, without more, is insufficient to render
[a] claim patent eligible" (internal citation omitted)). Thus, we agree with
the Examiner that the claims using "by the computing device" "do not
qualify as significant more" (Ans. 5).
Appellant also contend that "similar to the claims in DDR Holdings,
these claims solve a problem rooted in computer technology ... [because]
[t]he claims enable matching for a single desire to occur efficiently across
such multiple venues ... allow[ing] more quick time to match" (id. at 10).
In DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1259
(Fed. Cir. 2014), the subject claim was held patent-eligible because it
encompassed "an inventive concept" for resolving a "particular Internet-
centric problem." In contrast, we find Appellant's method performed by a
10
Appeal2017-004495
Application 13/613,446
computing device ( claim 1) does not provide a solution "necessarily rooted
in computer technology in order to overcome a problem specifically arising
in the realm of computer networks." DDR, 773 F.3d at 1257. Because we
find all claims on appeal merely use a generic computer or processor as a
tool which is used in the way a computer normally functions, we conclude
the claims fail to impart any discernible improvement upon the computer or
processor, nor do Appellant's claims solve "a challenge particular to the
Internet" as considered by the court in DDR, 773 F.3d at 1256-57. Thus, we
conclude none of Appellant's claims are like the claim held patent-eligible
by the court in DDR, in which the claimed invention was directed to the
"challenge of retaining control over the attention of the customer in the
context of the Internet," such that:
Instead of the computer network operating in its normal, expected
manner by sending the website visitor to the third-party website that
appears to be connected with the clicked advertisement, the claimed
system generates and directs the visitor to the above-described hybrid
web page that presents product information from the third-party and
visual "look and feel" elements from the host website.
DDR, 773 F.3d at 1258-59. Thus, we find unavailing Appellant's
arguments that the claims are "similar to the claims in DDR Holdings" (App.
Br. 10), given that no convincing "inventive concept" for resolving a
"particular Internet-centric problem" is identified by Appellant. Thus, we
agree with the Examiner that Appellant fails to illustrate "any rekvance of
DDR to the appealed case" (Ans. 3, 6).
Also, Appellant is reminded that "relying on a computer to perform
routine tasks more quickly or more accurately is insufficient to render a
claim patent eligible." OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359,
1363 (Fed. Cir. 2015) (citing Alice, 134 S. Ct. at 2359 ("use of a computer to
11
Appeal2017-004495
Application 13/613,446
create electronic records, track multiple transactions, and issue simultaneous
instructions" is not an inventive concept)).
Appellant contends that "the claims do not attempt to preempt every
application of []exchanging financial instruments" (App. Br. 10). Although
pre-emption "might tend to impede innovation more than it would tend to
promote it, 'thereby thwarting the primary object of the patent laws'" (Alice,
134 S. Ct. at 2354 ( citing Mayo, 132 S. Ct. at 1293)), "the absence of
complete preemption does not demonstrate patent eligibility" (Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)).
Moreover, because we find the claimed subject matter covers patent-
ineligible subject matter, the pre-emption concern is necessarily addressed.
"Where a patent's claims are deemed only to disclose patent ineligible
subject matter under the Mayo framework, [] preemption concerns are fully
addressed and made moot." Ariosa Diagnostics, 788 F.3d at 1379.
Because Appellant's independent claims 1 and 28-30 are directed to a
patent-ineligible abstract concept and do not recite something "significantly
more" under the second prong of the Alice analysis, we sustain the
Examiner's rejection of these claims as well as the respective dependent
claims under 35 U.S.C. § 101 as being directed to non-statutory subject
matter in light of Alice and its progeny.
For the foregoing reasons, Appellant's contentions are unpersuasive
as to error in the rejection under 35 U.S.C. § 101.
DECISION
We affirm the Examiner's § 101 rejection.
12
Appeal2017-004495
Application 13/613,446
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § l .136(a)(l )(iv).
AFFIRMED
13