Ex Parte Milne et al

Patent Trial and Appeal Board

Dec 26, 2018

14041421 (P.T.A.B. Dec. 26, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/041,421 09/30/2013
12684 7590 12/28/2018
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
FIRST NAMED INVENTOR
Andrew Milne
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.
4672-09734EUS 2769
EXAMINER
MILEF, ELDA G
ART UNIT PAPER NUMBER
3694
NOTIFICATION DATE DELIVERY MODE
12/28/2018 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 ANDREW MILNE and ALEKSANDR SEDLINE
Appeal 2017-009116
Application 14/041,421
Technology Center 3600
Before ELENI MANTIS MERCADER, BETH Z. SHAW, and
JOYCE CRAIG, Administrative Patent Judges.
CRAIG, Administrative Patent Judge.
DECISION ON APPEAL
Appellants 1 appeal under 35 U.S.C. § 134(a) from the Examiner's
final rejection of claims 1-25, which are all of the claims pending in this
application. We have jurisdiction under 35 U.S.C. § 6(b ).
We affirm.
1 According to Appellants, the real party in interest is Chicago Mercantile
Exchange Inc. App. Br. 2.
Appeal 2017-009116
Application 14/041,421
INVENTION
Appellants' invention relates to a transformation of a multi-leg
security definition for calculation of implied orders in an electronic trading
system. Abstract. Claim 1 is illustrative and reads as follows:
1. A computer implemented method of identifying, for
an order for a strategy comprising a combination of interrelated
orders for one or more outright contracts, a plurality of
individual orders which, in combination, is counter to the order
for the strategy, the method comprising:
receiving, by a processor, the order for the strategy, the
strategy comprising at least one order to buy and at least one
order to sell, each of the at least one order to buy and at least
one order to sell being for an associated quantity of at least one
item of a plurality of items tradeable on an exchange, wherein
the associated quantities of any of the at least one order to buy
and the at least one order to sell may be different from another
of the at least one order to buy and the at least one order to sell;
converting, by the processor, the at least one order to buy
and the at least one order to sell into a set of unit orders
comprising a separate buy order for each of the associated
quantity of each of the at least one order to buy and a separate
sell order for each of the associated quantity of each of the at
least one order to sell, and further identifying, within the set of
unit orders, one or more unique sets of unique spread orders,
each unique spread order comprising a unique combination of
one of the separate buy orders and one of the separate sell
orders, each unique set of unique spread orders further
comprising a synthetic spread order for each of the separate buy
order or separate sell orders not otherwise included in a unique
spread order of that unique set of unique spread orders;
determining, by the processor, the relationships between
each of the interrelated orders of the combination of the
strategy; and
computing, by the processor, the plurality of individual
orders which, if placed in combination, are counter to the order
2
Appeal 2017-009116
Application 14/041,421
for the strategy based on the determined relationships and each
of the unique sets of unique spread orders and synthetic orders.
REJECTION
Claims 1-25 stand rejected under 35 U.S.C. § 101 because the
claimed invention is directed to a judicial exception without significantly
more. Final Act. 2.
ANALYSIS
We have reviewed the rejections of claims 1-25 in light of
Appellants' arguments that the Examiner erred. We have considered in this
decision only those arguments Appellants actually raised in the Briefs. Any
other arguments Appellants could have made, but chose not to make, in the
Briefs are waived. See 37 C.F.R. § 4I.37(c)(l)(iv). Appellants' arguments
are not persuasive of error. We agree with and adopt as our own the
Examiner's findings of facts and conclusions as set forth in the Answer
(Ans. 2-11) and in the Action (Final Act. 2-8) from which this appeal was
taken. We provide the following explanation for emphasis.
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 abstract ideas are not patentable." Alice Corp. v.
CLS Bankint'l, 134 S. Ct. 2347, 2354 (2014) (quotingAss'nfor Molecular
Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)). The
Supreme Court, in Alice, reiterated the two-step framework previously set
forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566
U.S. 66, 77-80 (2012), "for distinguishing patents that claim laws of nature,
3
Appeal 2017-009116
Application 14/041,421
natural phenomena, and abstract ideas from those that claim patent-eligible
applications of those 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.), e.g., to an
abstract idea. For example, abstract ideas include, but are not limited to,
fundamental economic practices, methods of organizing human activities, an
idea of itself, and mathematical formulas or relationships. Id. at 2355-57. If
the claims are not directed to an abstract idea, 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 the additional elements 'transform the nature of the claim' into a
patent-eligible application." Id. at 2355 (quoting Mayo, 566 U.S. at 78-79).
This second step is described as "a search for an 'inventive
concept'-i.e., an element or combination of elements that is ...
'significantly more than ... the [ineligible concept] itself."' Id. (alteration
in original) (quoting Mayo, 566 U.S. at 72-73). We, therefore, decide under
step two whether the claims: (a) set forth an inventive concept that provides
a specific means or method that improves the relevant technology, or (b) are
directed to a result or effect that itself is the abstract idea, in which the
claims merely invoke generic processes and machinery. See Enfzsh, LLC v.
Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).
The Examiner rejected claims 1-25 as directed to patent-ineligible
subject matter because the claimed invention is directed to the abstract idea
of electronic trading in a commodities exchange, derivatives exchange, or
trading exchange and the implementation of trading strategies, which
correspond to fundamental economic practices. Final Act. 2-3. Further, the
4
Appeal 2017-009116
Application 14/041,421
Examiner determined that the claims do not include additional elements
sufficient to amount to significantly more than the judicial exception
because the additional computer elements, which are recited at a high level
of generality, provide conventional computer functions that do not add
meaningful limits to practicing the abstract idea. Id. at 3.
Alice Step 1 Analysis
Appellants contend "the claims are not directed to 'electronic trading
in a commodities exchange, derivatives exchange, or trading exchange and
the implementation of trading strategies"' and "do not relate to nor do they
entirely preempt or tie up, for example, mere trading of financial
instruments." App. Br. 5. Appellants argue that, rather than preempting the
entire idea of "electronic trading in a commodities exchange, derivatives
exchange, or trading exchange and the implementation of trading strategies,"
the claims are instead directed to a specific, novel and patentable
system or application that can be used by an electronic trading system to
offer improved transactional capacity, thereby improving market
participation. Id. at 7.
Appellants' arguments are not persuasive because, "' [ w ]hile
preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility."' FairWarning
IP, LLC, v. Iatric Sys., Inc., 839 F.3d 1089, 1098 (Fed. Cir. 2016) (quoting
Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir.
2015) ). Further, "[ w ]here a patent's claims are deemed only to disclose
patent ineligible subject matter under the Mayo framework, as they are in
this case, preemption concerns are fully addressed and made moot." Ariosa,
788 F.3d at 1379.
5
Appeal 2017-009116
Application 14/041,421
In arguing the claims recite novel and nonobvious steps, Appellants
misapprehend the controlling precedent. See App. Br. 7. Although the
second step in the Alice 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 Corp., 134 S. Ct. at
2355 (alteration in original) (quoting Mayo, 566 U.S. at 77). A novel and
nonobvious claim directed to a purely abstract idea is, nonetheless, patent-
ineligible. See Mayo, 566 U.S. at 79.
Appellants also argue that the claimed invention improves upon the
technical field of transaction processing by providing a specific application
for reducing transactional load on the system with respect to the computation
of implied orders, which is not a long-standing business practice. Id. at 10.
We are not persuaded that the Examiner erred. We agree with the
Examiner that the Specification describes and the claims are directed to
analysis of trading strategies and the trading of orders. See Ans. 3 ( citing
Spec. ,r 6). We also agree that claims 1-25 are directed to the abstract idea
of trading in a commodities exchange, derivative exchange, or trading
exchange and the implementation of trading strategies. The abstract idea is
similar to other concepts found abstract, such as risk hedging in Bilski v.
Kappas, 561 U.S. 593 (2010), intermediate settlement in Alice, and offer-
based price optimization in OIP Technologies v. Amazon.com, Inc., 788 F.3d
1359 (Fed. Cir. 2015). See Ans. 2.
In OIP Technologies, for example, the Federal Circuit summarized
claim 1 as "(1) testing a plurality of prices; (2) gathering statistics generated
6
Appeal 2017-009116
Application 14/041,421
about how customers reacted to the offers testing the prices; (3) using that
data to estimate outcomes (i.e. mapping the demand curve over time for a
given product); and (4) automatically selecting and offering a new price
based on the estimated outcome." 788 F.3d at 1361. We agree with the
Examiner that this is akin to the present application, which processes and
matches orders from buyers with orders from sellers. In OIP Technologies,
the Federal Circuit determined "the claims merely recite ... conventional
computer activities or routine data-gathering steps," including "storing test
results in a 'machine-readable medium'" and "'using a computerized system
... to automatically determine' an estimated outcome and setting a price." Id.
at 1363. "At best, the claims describe the automation of the fundamental
economic concept of offer-based price optimization through the use of
generic-computer functions." Id.
We are not persuaded by Appellants' argument that the claims are
directed to an improvement in transaction processing, because the Federal
Circuit has found this line of argument unavailing. See id. ("[R ]elying on a
computer to perform routine tasks more quickly or more accurately is
insufficient to render a claim patent eligible."). Claim 1 does not recite
specific computer components or processes, let alone frame the method in
terms of an improvement to such components or processes. Rather, claim 1
merely recites the augmentation of a fundamental economic practice by
computer automation, which shows only the use of a computer as a tool, not
an improvement to computer capabilities. See App. Br. 7. In other words,
"the focus of the claims is not on such an improvement in computers as
tools, but on certain independently abstract ideas that use computers as
tools." Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed.
7
Appeal 2017-009116
Application 14/041,421
Cir. 2016). As the Federal Circuit has explained, "[a]n abstract idea ... on a
generic computer is still an abstract idea." BASCOM Glob. Internet Servs.,
Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1348 (Fed. Cir. 2016).
Thus, we are not persuaded of error in the Examiner's conclusion that
the claims are directed to the abstract idea of trading in a commodities
exchange, derivative exchange, or trading exchange and the implementation
of trading strategies.
Alice Step 2 Analysis
Having concluded that Appellants' claims are directed to an abstract
idea, we next address whether the claims add significantly more to the
alleged abstract idea. We search for an "'inventive concept' sufficient to
'transform the nature of the claim into a patent-eligible application."'
McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1312 (Fed.
Cir. 2016) (quoting Alice, 134 S. Ct. at 2355). The "inventive concept"
"must be significantly more than the abstract idea itself, and cannot simply
be an instruction to implement or apply the abstract idea on a computer."
BASCOM, 827 F.3d at 1349 (citation omitted).
Appellants argue the Examiner erred because "the claimed receiving
of an order strategy, converting into a set of unit orders, determination of the
relationships between interrelated orders and computing of counter-
individual orders, as claimed, is a specific implementation which has NOT
been used before and therefore is not well understood, routine or
conventional in the art." App. Br. 8.
We are not persuaded. Appellants do not address the additional
elements identified by the Examiner or explain how those elements
(individually and in combination) are not conventional, well-known, or
8
Appeal 2017-009116
Application 14/041,421
routine. See id. Appellants simply reiterate the limitations of claim 1 and
conclude that the limitations are not routine or conventional. See Reply Br.
5. The Examiner identified "receiving an order for a strategy; converting the
at least one order to buy and at least one order to sell into a set or unit
orders; determining relationships between interrelated orders; [ and]
computing a plurality of individual orders which are counter to the order for
the strategy" as part of the abstract idea. Final Act. 2-3. Thus, these claim
elements are not "additional elements" for purposes of step two of the Alice
analysis. Rather, the Examiner identified the additional elements of:
receiving by a processor, the order strategy; converting, by the
processor, the at least one order to buy and one to sell;
determining by a processor, the relationships between each of the
interrelated orders; computing by the processor, the plurality of
individual orders which are counter to the strategy; a memory
storing an order receiver computer program; and a system.
Id. at 3. We agree with the Examiner that the processor, memory and system
are recited at a high level of generality and are recited as performing generic
computer functions routinely used in computer applications. See id.
Appellants rely on DDR Holdings, LLC v. Hotels.com L.P., 773 F.3d
1245 (Fed. Cir. 2014), in which the Federal Circuit found claims were
"necessarily rooted in computer technology in order to overcome a problem
specifically arising in the realm of computer networks" because they
addressed a technical issue unique to Internet website problems. 773 F .3d at
1257. Appellants argue that, like the claims in DDR Holdings, "at least
some of the problems solved by Appellants' invention are specifically rooted
in technology, specifically in electronic transaction processing systems
which must efficiently compute transactional combination." App. Br. 11.
9
Appeal 2017-009116
Application 14/041,421
Appellants further argue that, like the claims in Enfish, the claims are
directed to a specific improvement to the way computers operate. Id. at 13;
see also Enfish, LLC v. Microsoft Corp., 822 F.3d. 1327 (Fed. Cir. 2016).
Appellants argue that the claimed invention solves the technical problem of
simplifying complex computations.
We are not persuaded. We agree with the Examiner that the claims
recite a generic computer-including a memory, processor, and interface-
that performs generic computing functions such as, receiving, converting,
determining, and computing when conditions are met. See Ans. 8-9. We
further agree that the additional limitations are not improvements to the
functioning of a computer or some other technology, and that any problems
being solved are commercial, not technological. See id.
Appellants next argue that "the specifically disclosed and claimed
storing or replacing of stored data awaiting transmission and causing
transmission thereof only upon determining that the recipient is ready to
receive the stored data are additional elements that provide 'something
more' than mere data communications." App. Br. 9-10; see McRO, Inc. v.
Bandai Namco Games Am., 837 F.3d 1299 (Fed. Cir. 2016). In Appellants'
view, the combination of recited steps impose meaningful limits "that allow
for congestion reduction by conditioning the delivery of the most current
data based on the recipients ability to process it." Id. at 10.
We are not persuaded of Examiner error. In McRO, the claimed
process used a combined order of specific rules that rendered information in
a specific format that was applied to create a sequence of synchronized,
animated characters. McRO, 837 F.3d at 1315. Notably, the recited process
automatically animated characters using particular information and
10
Appeal 2017-009116
Application 14/041,421
techniques-an improvement over manual three-dimensional animation
techniques that was not directed to an abstract idea. Id. at 1316.
Unlike in McRO, the recited "computer implemented method" is not a
rule-based improvement of a technological process. The McRO court
determined that McRO's claim was not directed to an abstract idea because it
"uses the limited rules in a process specifically designed to achieve an
improved technological result" over "existing, manual 3-D animation
techniques." Id. In contrast, Appellants' claims address identifying a
financial opportunity based on individual orders. Additionally, the claims in
McRO were drawn to improvements in the operation of a computer at a task,
rather than applying a computer system to perform generic data
manipulation steps, as in Appellants' claim 1. See id. at 1314.
Indeed, we find nothing in Appellants' claims that adds anything
"significantly more" to transform the abstract concept of "creating a
licensing agreement including assigning and enforcing rights to content with
temporal terms." Because Appellants' claims 1-25 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 under 35 U.S.C. § 101.
DECISION
We affirm the Examiner's decision rejecting claims 1-25.
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. § 4I.50(f).
AFFIRMED
11