Ex Parte Mun

Patent Trial and Appeal Board

Nov 20, 2018

13753624 (P.T.A.B. Nov. 20, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/753,624 01/30/2013
94884 7590 11/23/2018
James M Smedley LLC
776 Mountain Blvd. STE 105
Watchung, NJ 07069
FIRST NAMED INVENTOR
Johnathan Mun
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.
13010-33 7639
EXAMINER
TRAN,HAI
ART UNIT PAPER NUMBER
3697
NOTIFICATION DATE DELIVERY MODE
11/23/2018 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):
info@sigmalawgroup.com
melena.sanchez@sigmalawgroup.com
alex.korona@sigmalawgroup.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte JOHNATHAN MUN
Appeal2017-009046
Application 13/753,624
Technology Center 3600
Before JUSTIN BUSCH, JASON J. CHUNG, and JASON M. REPKO,
Administrative Patent Judges.
REPKO, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant1 appeals under 35 U.S.C. § 134(a) from the Examiner's
rejection of claims 19 and 20. Br. 12.2 Claims 1-18 are canceled. We have
jurisdiction under 35 U.S.C. § 6(b ).
We affirm.
1 According to Appellant, the real party in interest is Johnathan C. Mun.
Br. 3.
2 Throughout this opinion, we refer to the Non-Final Rejection ("Non-
Final") mailed June 3, 2016; the Appeal Brief ("Br.") filed December 29,
2016; and the Examiner's Answer ("Ans.") mailed March 21, 2017.
Appeal2017-009046
Application 13/753,624
THE INVENTION
Appellant's invention relates to the modeling and valuation of
financial, exotic, employee, and strategic options. Spec. 1:20-2: 1.
Claim 19 is reproduced below:
19. A computing device for designing and valuing customized
financial options, said device comprising:
a processor;
a memory;
a display;
computer readable code residing in said memory and
executable by said processor, wherein said computer
readable code is configured to generate a graphical user
interface that appears on said display, said graphical user
interface comprising:
a menu of selectable lattice models comprising:
binomial lattice,
trinomial lattice,
quadranomial lattice, and
pentanomial lattice,
wherein the lattice model selected defines the number of
potential value states associated with an option based on
the value of an underlying asset of said option;
a menu of selectable option types comprising:
American Option Type,
European Option Type,
Bermudan Option Type,
Custom Option Type,
wherein selection of the American Option Type defines an
option condition in which the custom-designed option can
be executed at any time, selection of the European Option
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Application 13/753,624
Type defines an option condition in which the custom-
designed option can only be executed at a maturity date,
selection of the Bermudan Option Type defines an option
condition in which the custom-designed option can be
executed at any time except certain predetermined
blackout periods, selection of the Custom Option Type
defines an option condition in which the custom designed
option can only be executed at predetermined times,
wherein said computer readable code generates a request
for at least one required input parameter for the option type
selected in response to a user selection of the option type,
said input parameter comprising a value of an underlying
asset of the option, a blackout period, and a vesting period;
an input field for receiving an equation from the user
comprising at least one of:
a terminal equation,
a blackout equation, and
an intermediate equation,
wherein said computer readable code is configured to
calculate a plurality of possible option values by applying
at least one of said terminal equation, blackout equation,
and intermediate equation, entered by said user in said
input field, to a value of at least one underlying asset of
said option, wherein said computer readable code applies
the terminal equation when a user has selected at least one
of the American Option Type and the European Option,
and applies the blackout equation and intermediate
equation when a user has selected at least one of the
Bermudan Option Type and Custom Option Type,
wherein projected values of said option are displayed in a
triangular lattice of cells, the number of possible projected
values in said triangular lattice depends on the lattice
model selected, and values are automatically recalculated
based on changes to at least one of said input parameters,
said option type, and said equation,
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Application 13/753,624
wherein the value in the left-most cell of said triangular
lattice represents the current value of said option and each
column of valuation to the right of said left-most cell
represent successive possible future values of said option,
such that the further a column is from the left-most cell the
more possible values of the option are displayed.
THE REJECTIONS
Claims 19 and 20 stand rejected under 35 U.S.C. § 101 as directed to
patent-ineligible subject matter. Non-Final 3-8.
Claims 19 and 20 stand rejected under 35 U.S.C. § 112 as being
indefinite. Non-Final 9-10.
THE REJECTION UNDER 35 U.S.C. § 101
The Examiner rejects claims 19 and 20 under 35 U.S.C. § 101 because
the claims are directed to an abstract idea of a mathematical calculation and
the claims lack an inventive concept sufficient to transform them into a
patent-eligible application. Non-Final 3-8. For the reasons discussed
below, Appellant has not persuaded us of error.
The Supreme Court's two-step framework guides our analysis. See
Alice Corp. Pty. Ltd. v. CLS Banklnt'l, 134 S. Ct. 2347, 2355 (2014).
According to step one, "[ w ]e must first determine whether the claims at
issue are directed to a patent-ineligible concept," such as an abstract idea.
Id.
Here, Appellant does not rebut the Examiner's conclusion that the
claims are directed to an abstract idea of a mathematical calculation. See
Br. 7-12. Indeed, the claimed options-valuation device and method receive
input values (lattice models, option types, and equations), calculate the
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Application 13/753,624
option values using equations, and display the results of the calculations. On
this record, we are unpersuaded that the Examiner erred in concluding that
claims 19 and 20 are directed to an abstract idea of a mathematical
calculation. See Non-Final 6; Ans. 4.
Because the claims are directed to an abstract idea, we consider the
claim limitations "both individually and 'as an ordered combination' to
determine whether the additional elements 'transform the nature of the
claim' into a patent-eligible application." Alice, 134 S. Ct. at 2355 (quoting
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 78-79
(2012)). The Supreme Court has described this analysis "as a search for an
'inventive concept."' Id.
Appellant argues that claims 19 and 20 recite significantly more than
the abstract idea because the claimed options-valuation process is used in a
graphical user-interface environment and is a computer-implemented
process. Br. 9 (citing USPTO, July 2015 Update Appendix 1: Examples IO
(July 30, 2015) ("Examiner Guidance")). Appellant argues that, in this
regard, claims 19 and 20 are unlike the example of an ineligible
mathematical algorithm in the Examiner Guidance. Id. at 8-10.
Although the claimed method may be executed in a computer
environment, Br. 10, "limiting the claims to the computer field does not
alone transform them into a patent-eligible application." FairWarning IP,
LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1097 (citing Alice, 134 S. Ct. at
2358). For example, "use of generic computer elements like a
microprocessor or user interface do not alone transform an otherwise
abstract idea into patent-eligible subject matter." Id. at 1096 ( citing DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014)).
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Application 13/753,624
Here, claim 19's device only requires a processor, memory, display, and
code executed on the processor. Similarly, claim 20 recites a method that
generates a graphical user interface on the display device.
Appellant's arguments focus on the novelty of the data operated on by
this generic computer. See Br. 10-11. For instance, Appellant argues that
the method allows the user to model the effects of many inputs, including
unconventional ones. Id. at 10. Appellant explains that the user can perform
customized options valuations. Id. at 10-11. Appellant argues that these
valuations capture exotic elements of real-life situations, which is
unconventional. Id. at 11. According to Appellant, these inputs highlight
the simulation's novelty because conventional methods do not take into
account exotic elements. Id.
But claims 19 and 20 merely collect a combination of customized
options and use the computer in its ordinary capacity to execute the
mathematical calculations with the collected input, as the Examiner finds.
Non-Final 6-7; Ans. 5. Specifically, claims 19 and 20 recite selecting
certain data (models, option types, and equations) for analysis and display.
The data is collected using a graphical interface with menus. These menus
allow the user to select a lattice model and option type. The recited interface
also has an input field for receiving an equation.
"Given that the method of solving a mathematical equation may not
be the subject of patent protection, it follows that the addition of the old and
necessary antecedent steps of establishing values for the variables in the
equation cannot convert the unpatentable method to patentable subject
matter." In re Grams, 888 F.2d 835, 839 (Fed. Cir. 1989) (quoting In re
Christensen, 478 F.2d 1392, 1394 (CCPA 1973)); see also Fair Warning,
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839 F.3d at 1097 (Fed. Cir. 2016) ("The mere combination of data sources
... does not make the claims patent eligible."). Here, Appellant's invention
merely supplies the necessary antecedent steps of establishing values for the
abstract idea identified by the Examiner. See Ans. 10.
Even the recited data gathering and display steps use the computer in
its ordinary capacity. Specifically, the code calculates the option values
using the selected input (i.e., "calculate a plurality of possible option values
by applying at least one of said terminal equation ... "). The projected
option values are then displayed in a triangular lattice of cells. Notably, the
lattice can be generated in a Microsoft Excel spreadsheet. Spec. 9:16-19;
see also Fig. 9 (showing the lattice in a spreadsheet). Essentially, the recited
system uses the computer to calculate repeatedly the recited values and
display them in a spreadsheet. See Spec. 9: 16-19. Appellant's claimed
improvement is not to spreadsheet technology. Instead, the claimed
invention uses the spreadsheet's cells to manage the data and organize the
calculations. See, e.g., Fig. 9. In this way, the invention uses the
spreadsheet program as a tool in its ordinary capacity. See Spec. 9:16-19.
Yet using a computer for its basic function to perform repetitive calculations
does not impose meaningful limits on the claim's scope. Bancorp Servs. v.
Sun Life, 687 F.3d 1266, 1278 (Fed. Cir. 2012).
Appellant argues that the claimed invention improves the
technological process of determining and presenting preferred econometric
models "for a given set of data." Br. 11. In Appellant's view, the claimed
option-valuation method takes into account exotic elements that
conventional methods cannot. Id. Appellant argues that, in this way, the
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claims are similar to those in BASCOM Global Internet Services, Inc. v.
AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016). Id.
The claims in BASCOM involved an inventive distribution of function
between a local computer and a server. See BASCOM, 827 F.3d at 1352.
The Federal Circuit noted "[t]he inventive concept described and claimed in
the '606 patent is the installation of a filtering tool at a specific location,
remote from the end-users, with customizable filtering features specific to
each end user." Id. at 1350. The BASCOM claims recited a particular
arrangement of elements that solved a technical problem. Id.
Even assuming that valuing financial options is a technical problem,
Appellant has not identified any particular arrangement of computer
components to solve this problem. See Br. 7-12. Rather, claims 19 and 20
merely use a graphical user interface to collect values. Appellant's
purported improvement is to the mathematical calculations, not to a
computer or a particular arrangement of computer components. See id.
Similar to Appellant's claims, the Federal Circuit has recognized that "an
invocation of already-available computers that are not themselves plausibly
asserted to be an advance, for use in carrying out improved mathematical
calculations, amounts to a recitation of what is 'well-understood, routine,
[and] conventional."' SAP Am., Inc. v. InvestPic, LLC, 890 F.3d 1016, 1023
(Fed. Cir. 2018) (alteration in original) (citing Mayo, 566 U.S. at 73).
Appellant argues that the claims do not tie up a judicial exception
because the claims do not merely recite the simple computer-implementation
of the mathematical calculation. Br. 7. Appellant argues that there are many
ways that the mathematical models may be used to perform valuations
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without infringing claims 19 or 20. Id. According to Appellant, the claims
do not preempt an entire field. Id. at 7-8.
Although the extent of preemption is a consideration in our analysis,
the absence of complete preemption is not dispositive. See, e.g., Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015)
("While preemption may signal patent ineligible subject matter, the absence
of complete preemption does not demonstrate patent eligibility.").
Furthermore, "questions on preemption are inherent in and resolved by the
§ 101 analysis" that the Examiner has applied. Id. Nevertheless, in this
case, apart from limiting the method to a particular data set, claims 19 and
20 effectively cover any use of the recited mathematical calculations. In this
way, the claims are directed to the mathematical calculations themselves and
merely invoke generic processes and computers to collect data and carry out
those calculations. Like those in Gottschalk v. Benson, the claims here
would wholly pre-empt the mathematical calculations and "in practical
effect would be a patent on the algorithm itself." 409 U.S. 63, 72 (1972).
Therefore, Appellant has not persuaded us of error in the rejection of
independent claims 19 and 20 under 35 U.S.C. § 101
THE REJECTION OF CLAIM 20 ON PAGE NINE OF THE OFFICE
ACTION
In the rejection, the Examiner quotes § 101 and states that claim 20 is
"directed to non-statutory subject matter." Non-Final 9. The Examiner then
explains that claim 20 recites "said device" without a proper antecedent
basis for this limitation. Id. The Examiner does not explain why the lack of
antecedent basis renders the claims ineligible for patent protection. Id. In
the Answer, the Examiner states that the claims should be rejected under
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35 U.S.C. § 112. Ans. 3. But the Examiner does not state which paragraph
of§ 112 or why. See Ans. 3.
Although a lack of antecedent basis can give rise to an indefiniteness
rejection under§ 112, second paragraph, Examiners are instructed that "[t]he
mere fact that a term or phrase used in the claim has no antecedent basis in
the specification disclosure does not mean, necessarily, that the term or
phrase is indefinite." MPEP § 2173.05(e) (9th ed. Rev. 08.2017, Jan. 2018).
In the rejection, the Examiner does not state that the claim is indefinite or
explain why the lack of antecedent basis gives rise to this deficiency. Non-
Final 9. Rather, the Examiner states that claim 20 is "directed to non-
statutory subject matter." Id.
Although the Examiner likely intended to reject claim 20 as indefinite
under§ 112, second paragraph, we decline to supply the reasoning and
statutory basis missing from the rejection. We simply find that the rejection
does not satisfy the requirements of 35 U.S.C. § 132 because it does not
notify the applicant of the reasons for rejection, together with such
information "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 this way, the Examiner has not carried the procedural burden
of establishing a prima facie case. So we do not sustain the rejection of
claim 20 on page 9 of the Office Action dated June 3, 2016. We leave it to
the Appellant and Examiner to resolve any issues resulting from the
recitation of "said device."
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THE INDEFINITENESS REJECTION
The Examiner rejects claims 19 and 20 under 35 U.S.C. § 112, second
paragraph as being indefinite because the "claims recite the limitation of a
menu of selectable lattice models, but does not recite a step to prompt and
receive the selected model type for analysis from a user." Non-Final 10.
Appellant argues that the absence of this step does not render the
claim indefinite. Br. 6. According to Appellant, the recited menu can be
configured in a number of ways. Id. We agree.
"Breadth is not indefiniteness." In re Gardner, 427 F.2d 786, 788
(CCP A 1970). Here, claims 19 and 20 need not recite the additional features
of prompting and receiving the model type from the user. Although the
claims cover multiple ways to interact with the user, the claims are not
rendered indefinite because of this breadth. Thus, we do not sustain the
Examiner's rejection of claims 19 and 20 as being indefinite.
CONCLUSIONS
We sustain the rejection of claims 19 and 20 under 35 U.S.C. § 101.
We do not sustain the rejection of claim 20 on page 9 of the Office
Action from which this appeal is taken.
We do not sustain the rejection of claims 19 and 20 under 35 U.S.C.
§ 112, second paragraph.
DECISION
Because we have affirmed at least one ground of rejection with
respect to each claim on appeal, the Examiner's decision to reject claims 19
and 20 is affirmed. See 37 C.F.R. § 4I.50(a)(l). See 37 C.F.R. § 41.50(±).
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No time period for taking any subsequent action in connection with
this appeal maybe extended under 37 C.F.R. § 1.136(a)(l)(iv).
AFFIRMED
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