Ex Parte Studnitzer et al

Patent Trial and Appeal Board

Dec 21, 2018

14074670 (P.T.A.B. Dec. 21, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/074,670 11/07/2013
12684 7590 12/26/2018
Lempia Summerfield Katz LLC/CME
20 South Clark Street
Suite 600
Chicago, IL 60603
FIRST NAMED INVENTOR
Ari Studnitzer
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.
4672-13014AUS 3025
EXAMINER
GAW,MARKH
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
12/26/2018 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 ARI STUDNITZER, ZACHARY BONIG,
RYAN EA VY, FRANK KMIEC, BARRY GALSTER, and
PAUL CALLAWAY
Appeal2017-010097
Application 14/074,670 1
Technology Center 3600
Before ALLEN R. MacDONALD, ADAM J. PYONIN, and
PHILLIP A. BENNETT, Administrative Patent Judges.
BENNETT, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellants appeal under 35 U.S.C. § 134(a) from the Examiner's final
rejection of claims 1-20. We have jurisdiction under 35 U.S.C. § 6(b).
We reverse.
1 Appellants' Brief ("App. Br.") identifies Chicago Mercantile Exchange
Inc. as the real party in interest. App. Br. 2.
Appeal2017-010097
Application 14/074,670
CLAIMED SUBJECT MATTER
The claims are directed to an electronic trading system architecture
which controls the distribution of financial data messages to ensure
deterministic operation with respect to the timing of transmitted messages to
market participants. Spec. ,r,r 192-193. Claim 1, reproduced below, is
illustrative of the claimed subject matter:
1. A system for managing communication of a plurality of
financial data messages to a plurality of market participants via
a network, each of a first subset of the plurality of financial data
messages comprising data indicative of a change in state of an
electronic marketplace for one or more financial products to be
transmitted to all of the plurality of market participants, each of
a second subset of the plurality of financial data messages
comprising a response message corresponding to one of the
financial data messages of the first subset to be transmitted to a
particular market participant of the plurality of market
participants, the system comprising:
a first logic hardware component operative to generate a
response message indicative of a response by the electronic
marketplace to a request for a financial transaction received via
the network from a particular market participant of the plurality
of market participants;
a second logic hardware component operative to, based
on a change in state in the electronic marketplace caused by the
received request for the financial transaction, generate a
corresponding financial data message comprising content
representative of the change in state and cause the generated
corresponding financial data message to be transmitted to all of
the plurality of market participants; and
a third logic hardware component operative to determine
when the corresponding financial data message is transmitted
via the network to all of the plurality of market participants and,
only once it has been determined that the corresponding
financial data message has been transmitted, cause the
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generated response message to be transmitted via the network
to the particular market participant.
App. Br. 26 (Claims Appendix).
REJECTION
Claims 1-20 stand rejected under 35 U.S.C. § 101 as being directed to
ineligible subject matter. Final Act. 2-5. 2
ANALYSIS
Legal Standard for Patent Eligibility
In issues involving subject matter eligibility, our inquiry focuses on
whether the claims satisfy the two-step test set forth by the Supreme Court in
Alice Corp. Pty. Ltd. v. CLS Bank Int'!, 134 S. Ct. 2347 (2014). The
Supreme Court instructs us to "first determine whether the claims at issue
are directed to a patent-ineligible concept" (id. at 2355), and, in this case, the
inquiry centers on whether the claims are directed to an abstract idea. If the
initial threshold is met, we then move to the second step, in which 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." Id. (quoting Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 79, 78 (2012)).
The Supreme Court describes the second step 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
2 The rejections under 35 U.S.C. § 103 (see Final Act. 6-21) were
withdrawn by the Examiner in the Answer. See Ans. 2.
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upon the [ineligible concept] itself."' Id. ( quoting Mayo, 566 U.S. at 72-
73).
Examiner's Findings
The Examiner rejects the claims under the two-step Alice framework.
Under the first step, the Examiner determines the claims are directed to an
abstract idea:
The claims are directed to an abstract idea of performing
financial data generation and transmission. Generating and
prioritizing financial data transmission has been used in the
industry in which people exchange money for goods, services,
or other reasons, thus concluding a fundamental economic
practice. Courts have recognized similar claims to be abstract
ideas ... such as compare new and stored data using rules to
identify options (SmartGene ), using categories to organize,
store and transmit information or data (Cyberphone ), and
processing information through a clearinghouse (Dealertrack).
Final Act. 3.
Having found the claims to be directed to an abstract idea, the
Examiner proceeds to the second step of the Alice inquiry, finding the claims
do not possess a sufficient inventive concept under Alice step 2:
The elements of the instant process, when taken in combination,
together do not offer substantially more than the sum of the
functions of the elements when each is taken alone. That is, the
elements involved in the recited process undertake their roles in
performance of their activities according to their generic
functionalities which are well-understood, routine and
conventional. The elements together execute in routinely and
conventionally accepted coordinated manners and interact with
their partner elements to archive an overall outcome which,
similarly, is merely the combined and coordinated execution of
generic computer functionalities which are well-understood,
routine and conventional activities previously known to the
industry.
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Final Act. 4. The Examiner also explains that the recited steps do not pass
muster under Alice step 2 because:
Id.
[T]he claims do not effect an improvement to another
technology or technical field; and the claims do not amount to
an improvement to the functioning of a computer itself; and the
claims do not move beyond a general link of the use of an
abstract idea to a particular technological environment.
Appellants ' Contentions
Appellants present several arguments in favor of eligibility. First,
Appellants summarize the focus of the claims:
[T]he claims are directed to a specific application of a
communications protocol for communicating, such as via the
use of logic components, a subset of financial data messages
indicative of a change in the state of an electronic marketplace,
in a manner which, by virtue of a specific rule which prevents a
response message from being transmitted prior to transmission
of a corresponding financial data message, attempts to ensure
that an individual recipient does not receive an individually
directed "response" message, and thereby gain inequitable
access to the information contained therein, before all recipients
receive a broadcasted "financial data" message containing
related information.
App. Br. 5---6.
Appellants then assert that the claims are not directed to an abstract
idea because:
The claimed invention directly addresses an issue in electronic
transaction processing systems and electronic message
communications systems, in particular, those which utilize
packet switching, that separately generated and transmitted
messages may be received by recipients at different times
and/ or in a different order then generated and/ or transmitted,
e.g. due to variations in processing or message generation, race
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conditions, varying, e.g., asymmetric, transmission paths and/or
delays, etc.
App. Br. 6 (citing Spec. ,r 74). Appellants further argue the claims are not
merely directed to "financial data generation and transmission" as alleged by
the Examiner, but instead provide:
[A] specific and practical application which improves upon the
ability to control the flow of electronically communicated
information within an electronic marketplace, in particular to
prevent the dissemination of electronic messages comprising
trade information to a particular market participant prior to the
corresponding electronic messages comprising market data
being transmitted to all of the market participants.
Id. at 7.
With respect to the second step of the Alice inquiry, Appellants argue:
[T]he claims, even if directed to an abstract idea, e.g.
performing financial data generation and transmission or
generating and prioritizing financial data transmission, do not
entirely preempt that abstract idea and are instead directed to a
practical application of controlling transmission of messages
and represent an improvement to the technology surrounding
managing equitable communications of messages such as
messages concerning changes in a state of a marketplace.
Id. at 9. Appellants further argue the claims amount to significantly more
than the abstract idea because:
Here, the specifically disclosed and claimed generation of a
financial data message representative of a change in a state of a
marketplace and then gating or otherwise not transmitting that
financial data message to a particular market participant prior to
the transmission of the financial data message to all of the
plurality of market participants are additional elements that
provide "something more" than mere computer implementation
of not communicating a financial data message. The
combination of steps recited show that the claim is not to the
idea of not communicating the change in the state of a
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marketplace, but rather that the steps impose meaningful limits
that allow for control of the communication of the state of an
electronic marketplace to one recipient over all of the
recipients. Thus, the claim amounts to significantly more than
the judicial exception.
App. Br. 9-10.
In their Reply Brief, Appellants present additional arguments that
their claims are similar to those found eligible in recent Federal Circuit
decisions inMcRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299
(Fed. Cir. 2016) and Trading Techs. Int'!, Inc. v. CQG, INC, 675 Fed.
App'x 1001, 1001---05 (Fed. Cir. 2017) (non-precedential). Reply Br. 4---6.
Analysis
We are persuaded the Examiner has erred in rejecting the claims
under 35 U.S.C. § 101. The Examiner characterizes the claims as being
directed to an abstract idea of "performing financial data generation and
transmission." Final Act. 3. We agree with Appellants that the Examiner
has overgeneralized the claims in this characterization. Instead, we view the
claims as being better characterized as an electronic trading architecture
which synchronizes the transmission of financial data messages among
market participants to ensure a specific ordering of message transmission-
namely that participant-specific response messages do not overtake the
transmission of market data messages sent to all market participants. See,
e.g., Spec. ,r,r 192-200 ( describing "market data prioritization" system
architecture).
Enfish instructs us that the Alice step 1 inquiry asks "whether the
focus of the claims is on the specific asserted improvement in computer
capabilities (i.e., the self-referential table for a computer database) or,
instead, on a process that qualifies as an 'abstract idea' for which computers
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are invoked merely as a tool." Enfish, LLC v. Microsoft Corp., 822 F.3d
1327, 1335-36 (Fed. Cir. 2016). In Enfish, the improvement in computer
capabilities was embodied in a self-referential database table which obviated
the need for a programmer to "preconfigure a structure to which a user must
adapt data entry." Id. at 13 3 7.
We are persuaded that the claimed improvement in this case provides
a similar benefit in that it addresses problems "with current electronic
trading system architectures [having] ... disparity along communications
paths causing jitter or race conditions which results in non-deterministic
operation" (Spec. ,r 192) by identifying and segregating different message
types and controlling the timing of their transmission, thereby obviating the
need to closely monitor the capacity of existing infrastructure components in
the system. Because the claims provide a technological solution to a
technological problem, we are persuaded the Examiner has erred in
determining the claims are directed to an abstract idea. 3 Accordingly, we do
not sustain the rejection of claim 1, nor of independent claims 2, 11, and 20
which are rejected based on the same reasoning. For the same reasons, we
also do not sustain the rejection of dependent claims 3-10 and 12-19.
DECISION
We reverse the Examiner's rejections of claims 1-20.
REVERSED
3 Because we find the Examiner erred with respect to Alice step 1, we do not
reach the second step of the Alice inquiry.
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