Ex Parte Sandhu et al

Patent Trial and Appeal Board

Nov 5, 2018

14214121 (P.T.A.B. Nov. 5, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/214,121 03/14/2014
107456 7590 11/07/2018
Artegis Law Group, LLP
John Carey
7710 Cherry Park Drive Suite T #104
Houston, TX 77095
FIRST NAMED INVENTOR
Harpal Sandhu
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.
INDE/0008 8942
EXAMINER
BOVEJA, NAMRATA
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
11/07/2018 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):
algdocketing@artegislaw.com
kcruz@artegislaw.com
j matthews @artegislaw.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte HARP AL SANDHU, VIKAS SRIVASTAVA, and JON BARKER
Appeal 2017-007341 1
Application 14/214, 121
Technology Center 3600
Before BART A. GERSTENBLITH, BRADLEY B. BA YAT, and
MATTHEWS. MEYERS, Administrative Patent Judges.
BAY AT, Administrative Patent Judge.
DECISION ON APPEAL
Harpal Sandhu et al. ("Appellants")2 appeal under 35 U.S.C. § 134(a)
from the decision rejecting claims 1-59 under 35 U.S.C. § 101 as directed to
non-statutory subject matter. We have jurisdiction under 35 U.S.C. § 6(b ).
We AFFIRM.
1 Our Decision references Appellants' Appeal Brief ("Appeal Br.," filed
Dec. 15, 2016), Reply Brief ("Reply Br.," filed Apr. 10, 2017), the
Examiner's Answer ("Ans.," mailed Feb. 8, 2017) and the Final Office
Action ("Final Act.," mailed May 18, 2016).
2 Appellants identify "Integral Development, Inc." as the real party in
interest. Appeal Br. 3. "NH Expansion Credit Fund Holdings LP" is the
current assignee recorded (July 2, 2018) with the US PTO as per reel/frame
number 046254/0055.
Appeal2017-007341
Application 14/214, 121
STATEMENT OF THE CASE
Claimed Subject Matter
This application is titled "Method and Apparatus for Generating and
Facilitating the Application of Trading Algorithms Across a Multi-Source
Liquidity Market." Spec., Title. Appellants' invention "relates generally to
the trading of financial instruments and, more specifically, to a method and
apparatus for generating and facilitating the application of trading algorithms
across a multi-source liquidity market." Id. ,r 3.
Claims 1, 24, 30, 52, 58, and 59 are the independent claims on appeal.
Claim 1, reproduced below with added bracketed notations, is illustrative of
the subject matter on appeal:
1. A computer-implemented method for generating one or
more trading algorithms, comprising the steps of:
[(a)] generating, via one or more processing units,
display data representing a plurality of user configurable trading
algorithm parameters;
[ (b)] obtaining, from a user, algorithm parameter
information, wherein the algorithm parameter information
comprises information defining at least one characteristic of at
least one user configurable trading algorithm parameter of the
plurality of user configurable trading algorithm parameters;
[ ( c)] generating the one or more trading algorithms
based, at least in part, on the algorithm parameter information;
and
[ ( d)] facilitating one or more trades in a liquidity market
using the one or more generated trading algorithms.
Appeal Br. 19, Claims App.
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Application 14/214, 121
ANALYSIS
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. 3 The Supreme Court, however, has long interpreted§ 101
to include an implicit exception: "[l]aws of nature, natural phenomena, and
abstract ideas" are not patentable. See, e.g., Alice Corp. Pty. Ltd. v. CLS
Bankint'l, 134 S. Ct. 2347, 2354 (2014) (internal quotation marks and
citation omitted).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 132 S. Ct. 1289 (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, 134 S. Ct. at
2355. The first step in that framework is to "determine whether the claims at
issue are directed to one of those patent-ineligible concepts," such as an
abstract idea. Id. If the claims are not directed to a patent-ineligible
concept, the inquiry ends. If, however, the claims are directed to a patent-
ineligible concept, the inquiry proceeds to step two to look at the claim for
"something more" by "examin[ ing] the elements of the claim to determine
whether it contains an 'inventive concept' sufficient to 'transform' the
claimed abstract idea into a patent-eligible application." Id. at 2354, 2357
(quoting Mayo, 132 S. Ct. at 1294, 1298). This inventive concept must do
more than simply recite "well-understood, routine, conventional activity."
Mayo, 132 S. Ct. at 1298.
3 The Examiner determines that each of the independent claims is directed to
a statutory category of invention. See Final Act. 5-7.
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Applying the framework in Alice, and as the first step of that analysis,
the Examiner determines Appellants' claims "are directed to an abstract idea
of generating trading algorithms/strategies and facilitating one or more
trades using the generated algorithms/strategies." Final Act. 7. Proceeding
to the second step, the Examiner determines:
Id.
The additional element(s) other than the abstract idea per
se amount( s) to no more than mere instructions to implement
the idea on a generic computer. Viewed as a whole, these
additional claim element(s) do not provide meaningful
limitation( s) to transform the abstract idea into a patent eligible
application of the abstract idea such that the claim(s) amounts
to significantly more than the abstract idea itself.
Appellants argue all the pending claims as a group. See Appeal Br.
12-17; see also Reply Br. 3-11. We select independent claim 1 as the
representative claim for this group. Thus, claims 2-59 stand or fall with
claim 1. 3 7 C.F .R. § 41.3 7 ( c )(1 )(iv).
Under Alice step one, Appellants argue the claims are not abstract
because they are "directed to techniques for generating one or more trading
algorithms that are based on algorithm parameter information or trading
strategies obtained from a user" that improve computer capabilities and the
relevant technology. Appeal Br. 13 ( citing Enfish4 and McR05).
In Enfzsh, the Federal Circuit noted "[s]oftware can make non-abstract
improvements to computer technology just as hardware improvements
can[.]" Enfish, 822 F.3d at 1335. The court asked "whether the focus of the
4 Enfzsh, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016).
5 McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir.
2016).
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claims is on [a] specific asserted improvement in computer capabilities ...
or, instead, on a process that qualifies as an 'abstract idea' for which
computers are invoked merely as a tool." Id. at 1335-36. There, the "plain
focus of the claims" was on an improvement to computer functionality itself,
a self-referential table for a computer database designed to improve the way
a computer carries out its basic functions of storing and retrieving data. Id.
And, the court in McRO asked whether the claims as a whole "focus on a
specific means or method that improves the relevant technology" or are
"directed to a result or effect that itself is the abstract idea and merely invoke
generic processes and machinery." McRO, 837 F.3d at 1314.
In our view, Appellants' reliance on Enfzsh and McRO is misplaced.
We determine that claim 1 as a whole is focused on a result; that is,
generating a trading algorithm based on user parameters for facilitating a
trade-a financial management process, for which a computer is invoked
merely as a tool. We find no parallel between claim 1 and the claims in
Enfzsh, nor any comparable aspect in claim 1 that represents an improvement
to computer functionality. See Ans. 6 ("[T]he claims are not directed to any
improvement in computer operations but instead directed to an abstract idea
of providing business solution related to trading of financial instruments and
more specifically to generating and facilitating trading algorithms across a
multi-source liquidity market [Specification para 0003]."). Unlike Enfzsh,
claim 1 is not focused on an improvement to computer capabilities or
functionality (i.e., an improved processing unit). Cf In re TL! Commc 'ns
LLC Patent Litig., 823 F.3d 607, 613 (Fed. Cir. 2016) (The claims' focus
"was not on an improved telephone unit or an improved server."). There is a
fundamental difference between computer functionality improvements, on
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the one hand, and uses of existing computers as tools to perform a particular
task, on the other. Appellants' characterization of the claims as being
directed to generating a trading algorithm based on trading strategies
obtained from a user (Appeal Br. 13) is admittedly not focused on a specific
means or process that improves computer technology, but rather, on
customizing a financial transaction decision making process, for which a
computer is used as a tool in its ordinary capacity. See, e.g., Spec. ,r 10
("traders are often limited to trading with a single bank, and the algorithms
themselves are inflexible, unconfigurable, and incapable of dynamic changes
in response to the market"); id. ,r 11 (solution "aimed at alleviating the
drawbacks of conventional algorithmic trading technology"). Indeed,
Appellants acknowledge that tailoring new trading algorithms based on user
strategy information improves the capabilities of electronic trading and
optimizes execution and trading strategies. Appeal Br. 14. Thus, the
advance over the prior art lies in generating a customizable trading algorithm
for facilitating trades that "is optimal for that party's trading needs and
goals" (Spec. ,r 8), which is an improvement in managing a financial
transaction, instead of an improvement in computer technology.
Appellants' invention relates to using a generic processor to obtain
user trading strategy data that would otherwise be collected by pen-and-
paper, and facilitating a trade based on the analyzed data. The individual
steps comprising the method, i.e., obtaining data, analyzing same to generate
an algorithm, and acting based on that analysis, are similar to others that
have been found to be abstract. See, e.g., OIP Techs., Inc. v. Amazon.com,
Inc., 788 F.3d 1359, 1361---62 (Fed. Cir. 2015) (a method comprising (1)
testing prices, (2) gathering statistics about how customers reacted to the
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prices, (3) using that data to estimate outcomes, and (4) acting on estimated
outcomes (i.e., automatically selecting and offering new prices based on
estimated outcome) to be directed to the abstract idea of price optimization);
see also Intellectual Ventures I LLC v. Erie Indem. Co., No. 1: 14-CV-00220,
2015 U.S. Dist. LEXIS 129153, at *94 (a method of "gathering, storing, and
acting on data based on predetermined rules" is directed to an abstract idea).
Appellants contend that "the claimed approach cannot be performed by a
human being using pen and paper [because] algorithmic trading is performed
by a computer and over computer-based electronic trading platforms."
Appeal Br. 15.
We are not persuaded by Appellants' argument as to performance of
the claimed steps by a physical machine because although the Supreme
Court noted in Bilski v. Kappas, 130 S. Ct. 3218, 3227 (2010), that the
machine-or-transformation test is a "useful and important clue" for
determining patent eligibility, the Court, in Mayo, emphasized that satisfying
the machine-or-transformation test, by itself, is not sufficient to render a
claim patent-eligible, as not all transformations or machine implementations
infuse an otherwise ineligible claim with an "inventive concept." See Mayo,
132 S. Ct. at 1301 ("[S]imply implementing a mathematical principle on a
physical machine, namely a computer, [i]s not a patentable application of
that principle" (citing Gottschalk v. Benson, 409 U.S. 63, 64 (1972))). And,
the Court in Alice noted:
The fact that a computer "necessarily exist[ s] in the
physical, rather than purely conceptual realm" ... is beside the
point. There is no dispute that a computer is a tangible system
(in § 101 terms, a "machine"), or that many computer-
implemented claims are formally addressed to patent-eligible
subject matter. But if that were the end of the§ 101 inquiry, an
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applicant could claim any principle of the physical or social
sciences by reciting a computer system configured to
implement the relevant concept.
Alice, 134 S. Ct. at 2358-59. The Federal Circuit has made clear that the
basic character of a process claim drawn to an abstract idea is not changed
by claiming only its performance by a machine or apparatus. CyberSource
Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375-76 (Fed. Cir. 2011)
(citinginreAbele, 684F.2d902 (CCPA 1982)). And, whether it would be
practical for a human to perform the method using pen and paper is
immaterial because "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). "[T]he inability for the human mind to
perform each claim step does not alone confer patentability. As we have
explained, 'the 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."' Fair Warning IP, LLC v. Iatric Sys., Inc., 839
F.3d 1089, 1098 (Fed. Cir. 2016).
Appellants' reliance on DDR Holdings 6 (Appeal Br. 15) is also
unavailing because the claims at issue do not address a problem unique to
the internet. See Intellectual Ventures I LLC v. Capital One Bank (USA),
792 F.3d 1363, 1371 (Fed. Cir. 2015) ("The patent at issue in DDR provided
an Internet-based solution to solve a problem unique to the Internet that (1)
did not foreclose other ways of solving the problem, and (2) recited a
specific series of steps that resulted in a departure from the routine and
6 DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014).
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conventional sequence of events after the click of a hyperlink advertisement.
The patent claims here do not address problems unique to the Internet, so
DDR has no applicability."). Indeed, trading strategy information unique to
investors were used prior to the advent of the Internet to facilitate trades.
In determining the abstract idea, "the decisional mechanism courts
now apply is to examine earlier cases in which a similar or parallel
descriptive nature can be seen-what prior cases were about, and which way
they were decided." Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d
1288, 1294 (Fed. Cir. 2016) (emphasis added). In eResearch Technology,
Inc. v. CRF, Inc., 186 F. Supp. 3d 463 (W.D. Pa. 2016), aff'd, 2017 WL
1033672 (Mem) (Fed. Cir. 2016), the court held "obtaining data,
generating an algorithm by quantitative analysis, and translating said
algorithm into a more useful rule is directed to an abstract idea." 186 F.
Supp. 3d at 478. We see little character difference between the concept here
and the abstract idea in eResearch Technology, which the Federal Circuit
affirmed.
We find unpersuasive Appellants' argument that "the claims pose no
danger of preempting an abstract idea." Appeal Br. 16. It is well established
by now "the prohibition against patenting abstract ideas cannot be
circumvented by attempting to limit the use of [ the idea] to a particular
technological environment." Alice, 134 S. Ct. at 2358. "The Supreme Court
has made clear that the principle of preemption is the basis for the judicial
exceptions to patentability" and "[ fJor 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). "Where a patent's claims are deemed only to disclose patent
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ineligible subject matter under the [Alice] framework, [as they are in this
case,] preemption concerns are fully addressed and made moot." Id. Even
though "preemption may signal patent ineligible subject matter, the absence
of complete preemption does not demonstrate patent eligibility." Id.; see
also OIP Techs., 788 F.3d at 1362---63 ("[T]hat the claims do not preempt all
price optimization or may be limited to price optimization in the
e-commerce setting do not make them any less abstract.").
To qualify as an inventive concept under step two of Alice, the
implementation of the abstract idea must involve "more than performance of
'well-understood, routine, [and] conventional activities previously known to
the industry."' Content Extraction and Transmission LLC v. Wells Fargo
Bank, Nat. Ass 'n, 776 F.3d 1343, 1347--48 (Fed. Cir. 2014) (alteration in
original) (quoting Alice, 134 S. Ct. at 2359). We agree with the Examiner
and conclude that claim 1 does not contain an inventive concept sufficient to
"'transform the nature of the claim' into a patent-eligible application."
Alice, 134 S. Ct. at 2355 ( citation omitted). The introduction of a generic
computer into the claim does not alter the analysis. We are not apprised of
anything in the claims, understood in light of the Specification, that requires
components other than off-the-shelf, conventional computer, and processing
units for gathering and analyzing information, that transforms the abstract
idea into a patent-eligible application. For example, claim 1 merely recites
"[a] computer-implemented method" in the preamble of the claim, and
implementing "one or more processing units" in step (a), but the claim does
not require that steps (b ), ( c ), and ( d) are implemented on a computer. See,
e.g., Spec. ,r 32 ("Processor and storage arrangements of the types illustrated
in FIG. 1 are well known to those having ordinary skill in the art."), id. ,r 33
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("The display 108 may include any conventional display mechanism such as
a cathode ray tube (CRT), flat panel display, projector, or any other display
mechanism known to those having ordinary skill in the art.").
Appellants' reliance on the claims' "recit[ ation] that one or more
trading algorithms are generated based on obtained algorithm parameter
information and/or trading strategy selection information" as necessarily
amounting to "significantly more" than the abstract idea (Appeal Br. 17) is
unpersuasive of error in the rejection because the Examiner explicitly
identified this feature of claim 1 as part of the abstract idea. See Final Act.
6. In other words, Appellants' argument is flawed because the Examiner
explicitly excluded step ( c) in the analysis under step two of the Alice
framework. See id. at 7.
In view of the foregoing, we are not persuaded the Examiner erred in
concluding that claim 1 is directed to non-statutory subject matter.
Accordingly, we sustain the Examiner's rejection of claim 1 under 35 U.S.C.
§ 101, including claims 2-59, which fall with claim 1.
DECISION
The rejection under 35 U.S.C. § 101 is affirmed.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a).
AFFIRMED
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