Ex Parte RIVIERE

Patent Trials and Appeals Board

Sep 14, 2018

14062396 - (D) (P.T.A.B. Sep. 14, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO.
14/062,396
120080 7590
Tarik Riviere
430 West 24th Street
Apt llF
FILING DATE
10/24/2013
09/17/2018
New York, NY 10011
FIRST NAMED INVENTOR
TARIK RIVIERE
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.
9227
EXAMINER
FU,HAO
ART UNIT PAPER NUMBER
3697
MAIL DATE DELIVERY MODE
09/17/2018 PAPER
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.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte T ARIK RIVIERE
Appeal2017-004750
Application 14/062,396
Technology Center 3600
Before MICHAEL J. STRAUSS, KARA L. SZPONDOWSKI, and
MICHAEL J. ENGLE, Administrative Patent Judges.
SZPONDOWSKI, Administrative Patent Judge.
DECISION ON APPEAL
Appellant appeals 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.
Appeal2017-004750
Application 14/062,396
STATEMENT OF THE CASE
Appellant's invention is directed to methods for internalizing hedging
services for an exchange-traded vehicle. Spec. 3. 1 Claim 1, reproduced
below, is representative of the claimed subject matter:
1. A computer-based method to enable end investors to allocate
capital in and out of a primary active investment strategy; the method
compnsmg:
establishing an investment vehicle having a core entity listed on
an exchange and a separate meta hedge provider entity wherein the
said core entity is invested in a primary strategy and in the said meta
hedge provider entity;
linking a network card of a dedicated computer system of the
said core entity and a network card of a dedicated computer system of
the said meta hedge provider entity to establish a private and
confidential communication channel;
committing to at least one purchase and at least one sale price
for a set number of units of the said core entity by the said meta hedge
provider entity at any point during at least a part of the regular market
hours of the exchange on which the said core entity is listed;
calculating, by a processor of the dedicated computer system of
the said core entity, the composition of the investment portfolio of
said core entity based on information contained in a storage of the
dedicated computer system of the core entity;
sending, by way of the communication channel, at least one
composition update from the dedicated computer system of the said
core entity to the said meta hedge provider entity computer system;
and
1 Appellant's Specification is not page numbered. We begin numbering at
the first page, titled "Cross Reference to Related Applications."
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Application 14/062,396
executing, by the said meta hedge provider computer system, a
hedge portfolio mirroring the composition of the investment portfolio
of the said core entity, wherein said meta hedge provider entity
continuously adjusts the composition of its hedge portfolio based on
the at least one composition update received via the communication
channel.
REJECTIONS
Claims 1-36 stand rejected under 35 U.S.C. § 101 because the
claimed invention is directed to non-statutory subject matter.
ANALYSIS
After considering Appellant's arguments, we agree with the
Examiner. We refer to, rely on, and adopt the Examiner's findings and
conclusions as set forth in the Examiner's Answer and in the action from
which this appeal was taken. Final Act. 2---6; Ans. 2-10. We highlight and
address specific findings and arguments for emphasis in our analysis below.
To determine whether a claim is eligible under § 101, "[ w ]e must first
determine whether the claims at issue are directed to a patent-ineligible
concept." Alice Corp. v. CLS Banklnt'l, 134 S. Ct. 2347, 2355 (2014). One
must keep in mind that "all inventions at some level embody, use, reflect,
rest upon, or apply laws of nature, natural phenomena, or abstract ideas,"
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71
(2012), and "describing the claims at ... a high level of abstraction and
untethered from the language of the claims all but ensures that the
exceptions to§ 101 swallow the rule." Enfzsh, LLC v. Microsoft Corp., 822
F.3d 1327, 1337 (Fed. Cir. 2016). Instead, "the claims are considered in
their entirety to ascertain whether their character as a whole is directed to
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Application 14/062,396
excluded subject matter." Internet Patents Corp. v. Active Network, Inc.,
790 F.3d 1343, 1346 (Fed. Cir. 2015). "If the claims are not directed to an
abstract idea [or other patent-ineligible concept], the inquiry ends. If the
claims are 'directed to' an abstract idea, then the inquiry proceeds to the
second step of the Alice framework." McRO, Inc. v. Bandai Namco Games
Am. Inc., 837 F.3d 1299, 1312 (Fed. Cir. 2016).
In the second step of the Alice framework, we "consider the elements
of each claim 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, 566 U.S. at 78-79). The Supreme Court describes this as "a 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. (quotation omitted).
The Examiner determines the claims are directed to a "mirror trading
strategy" (receiving an update of target portfolio composition and submitting
trades to mirror the composition of the target portfolio), which is a
fundamental economic practice and an "idea of itself' because it can be done
by a human without the use of a computer. Final Act. 2-5; see also Ans. 2-
4. The Examiner further determines the claims do not amount to
significantly more than the abstract idea because they are performed by the
generically recited computer device and payment processing system. Final
Act. 3, 6; see Ans. 5-10.
With respect to the first step in the Alice analysis, Appellant argues
"one would err significantly in placing the focus on ' [ m ]irror trading
strategy' as being the element of novelty in Claim 1" because "novelty in
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Application 14/062,396
Claim 1 comes from embedding a layer within an investment vehicle to
enable it to offer hedging services to third parties in connection with the said
investment vehicle's own internal portfolio." App. Br. 5. According to
Appellant, claim 1
recites a practical and specific implementation of the hedging
services offered by spelling out that the [ meta hedge provider]
will be committing to at least one purchase and at least one
sale price for a set number of units of the said core entity by the
said meta hedge provider entity at any point during at least a
part of the regular market hours of the exchange on which the
said core entity is listed.
App. Br. 5; see also Reply Br. 4. 2 Appellant contends the Examiner has not
pointed to "any prior art in which this specific step had been used,
independently or in combination." Reply Br. 4.
Appellant's focus on the novelty of the claim is misplaced. An
abstract idea does not transform into an inventive concept just because the
prior art does not disclose or suggest it. 5'ee Ass 'n.fbr lviolecular Pathology
v. lvfyriad Genetics, Inc., 133 S. Ct. 2107, 2117 (2013) ("Groundbreaking,
innovative, or even brilliant discovery does not by itself satisfy the§ 101
inquiry"); Diamond v. Diehr, 450 U.S. 175, 188----89 (1981) ("The '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 falls within
the§ 101 categories of possibly patentable subject matter"); Rapid Litig.
llfgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1052 (Fed. Cir. 2016) (citing
lvfa_yo, 566 U.S. at 90) ("Patent-eligibility does not tum on ease of execution
2 Appellant's Reply Brief also has no page numbering. We begin page
numbering on the first page.
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Application 14/062,396
or obviousness of application. Those are questions that are examined under
separate provisions of the Patent Act").
Appellant further argues claim 1 is not directed to an idea of itself
because it "is a practical process that involves physical steps including
contributing prices to an exchange, as well as potentially executing and
settling trades." App. Br. 5. Appellant argues operation without a computer
would "significantly compromise the usefulness of the process" and would
be "largely impractical, prone to operational errors, and so overly costly
from a resource standpoint that it would be inoperable." Reply Br. 5.
We are not persuaded by Appellant's arguments. Purchasing,
executing, and settling trades are pre-computer and pre-Internet activities
conventionally carried out by humans using pen and paper. Other than the
generic computer-implemented steps, there is nothing in the claims that
foreclose the steps from being performed by a human, mentally or with pen
and paper. See Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d
1307, 1318 (Fed. Cir. 2016); Cybersource Corp. v. Retail Decisions, Inc.,
654 F.3d 1366, 1375 (Fed. Cir. 2011) ("That purely mental processes can be
unpatentable, even when performed by a computer, was precisely the
holding of the Supreme Court in Gottschalk v. Benson."). Moreover, adding
computer functionality to increase speed or efficiency does not confer patent
eligibility on an otherwise abstract idea. See Intellectual Ventures I LLC v.
Capital One Bank (USA), 792 F.3d 1363, 1370 (Fed. Cir. 2015); Bancorp
Servs., L.L.C. v. Sun Life Assurance Co. of Can. (US.), 687 F.3d 1266, 1278
(Fed. Cir. 2012) ("[T]he fact that the required calculations could be
performed more efficiently via a computer does not materially alter the
patent eligibility of the claimed subject matter."); OIP Techs., Inc. v.
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Application 14/062,396
Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) ("But relying on a
computer to perform routine tasks more quickly or more accurately is
insufficient to render a claim patent eligible.").
Appellant further argues the invention "makes use of well-known
processes such as mirror-trading and hedging as part of a construction to
solve a specific problem in industry practice," and Appellant identifies
problems in the industry, such as inaccurate valuation methodology and lack
of intraday liquidity for end investors. App. Br. 5---6. According to
Appellant,
The current application offers an original and unique set of
methods that make it possible for investors to buy and sell an
active open-ended investment vehicle listed on exchange at any
time in the day and at a price that is accurate, a functionality
that, as mentioned above, is not currently generally available to
end investors today. Key to this innovation is a set of methods
and processes surrounding the MHP, yielding a reliable,
scalable and accurate hedging methodology for third parties.
App. Br. 6. Appellant further identifies claim 1 as providing an "efficiency
gain," that is, therefore, "an improvement to the functioning of financial
markets in the current technological environment." Reply Br. 4--5.
We are not persuaded. Although Appellant relies on increased
efficiency, and a reliable, scalable, and accurate hedging methodology as the
alleged improvements, Appellant does not explain how these improvements
are captured in the limitations of claim 1. Moreover, any improvement is
not an improvement in computer functionality or capabilities, but rather, an
improvement to the abstract idea. Here, the focus of the claims is not on an
improvement in computers as tools, but on the abstract idea that uses
computers as tools. See Electric Power Grp. LLC v. Alstom S.A., 830 F.3d
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Application 14/062,396
1350, 1354 (Fed. Cir. 2016) (explaining that claims directed to computerized
collecting, analyzing, and displaying information were different from the
claims in Enfzsh: "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."). Accordingly, Appellant has not persuasively rebutted
the Examiner's determination that claim 1 is directed to abstract idea of a
mirror trading strategy.
Moreover, we agree with the Examiner that the additional limitations
in claim 1 do not add significantly more to the abstract idea. See Final Act.
6; Ans. 5---6. Claim 1 recites generic computer elements (e.g., a computer
system, processor, and communication channel) that are performing generic
computer functionality of establishing a connection, performing calculations,
and transmitting data, and amount to no more than an instruction to apply
the abstract idea on a computer. See Final Act. 6; Ans. 5---6; Alice, 134 S. Ct.
at 2359. Appellant has not persuasively rebutted these findings.
With respect to dependent claims 2-36, Appellant argues the claims
"introduce several limitations that are critical to the practical viability and
appeal of the investment vehicle described in Independent Claim 1," and
therefore, add "significantly more" to the abstract idea. App. Br. 6-9; see
also Reply Br. 6-7. However, Appellant's arguments are not tied to the
claim language, but, rather, focus generally on perceived practical benefits
provided by the claims, such as efficiency, integrity, resilience, and
visibility. See App. Br. 6-9. Similar to independent claim 1, such
improvements are directed to the abstract idea and not to the computer
functionality or capabilities. For the reasons set forth by the Examiner (Ans.
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6-10), we agree the limitations in dependent claims 2-36 do not add
"significantly more" to the abstract idea.
Accordingly, we are not persuaded the Examiner erred. We,
therefore, sustain the Examiner's 35 U.S.C. § 101 rejection of claims 1-36.
DECISION
We affirm the Examiner's rejection of claims 1-36.
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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