Ex Parte Sweeting et al

Patent Trial and Appeal Board

Jun 11, 2018

14088680 (P.T.A.B. Jun. 11, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
14/088,680 11/25/2013
63710 7590 06/13/2018
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
FIRST NAMED INVENTOR
Michael Sweeting
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.
03-1070-C2 8678
EXAMINER
MERCHANT, SHAHID R
ART UNIT PAPER NUMBER
3693
NOTIFICATION DATE DELIVERY MODE
06/13/2018 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):
patentdocketing@cantor.com
lkorovich@cantor.com
phowe@cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte MICHAEL SWEETING,
HOW ARD W. LUTNICK,
and JOSEPH C. NOVIELLO
Appeal2016--007382
Application 14/088,680
Technology Center 3600
Before MURRIEL E. CRAWFORD, ANTON W. PETTING, and
ALYSSA A.FINAMORE, Administrative Patent Judges.
PETTING, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE 1
Michael Sweeting, Howard W. Lutnick, and Joseph C. Noviello
(Appellants) seek review under 35 U.S.C. § 134 of the Examiner's Final
rejection of claims 41-53 and 55-61, the only claims pending in the
1 Our decision will make reference to the Appellants' Appeal Brief ("App.
Br.," filed January 14, 2016) and Reply Brief ("Reply Br.," filed July 25,
2016), and the Examiner's Answer ("Ans.," mailed May 24, 2016), and
Final Action ("Final Act.," mailed April 30, 2015).
Appeal2016-007382
Application 14/088,680
application on appeal. We have jurisdiction over the appeal pursuant to
35 U.S.C. § 6(b ).
We AFFIRM.
The Appellants invented a way of trading within a spread market for a
particular item. Specification para. 1.
An understanding of the invention can be derived from a reading of
exemplary claim 57, which is reproduced below (bracketed matter and some
paragraphing added).
57. A method comprising:
[ 1] receiving,
by at least one processor in communication with at
least one memory, from a first user of an electronic
trading system
a first order to buy or sell an item
conditioned on an execution price of the first order being
between a best bid price and a best offer price for the
item,
in which the first order to buy or sell the item comprises
a buy/sell orientation defining whether the first order is a
bid to purchase the item or an offer to sell the item;
[2] communicating,
by the at least one processor,
information about the first order
to a plurality of market participants
without disclosing the buy/sell orientation of the order to
the plurality of market participants,
such that the plurality of market participants are
not made aware whether the order is an order to
buy the item or an order to sell the item,
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the plurality of market participants comprising a second
user;
[3] receiving,
by the at least one processor,
from the second user of the electronic trading system
a second order to buy or sell the item
conditioned on execution price of the second order being
between a best bid price and a best offer price for the
item,
in which the second order to buy or sell the item
comprises a buy/sell orientation that is contra to the
buy/sell orientation of the first order;
[ 4] responsive to receiving the second order,
matching,
and
by the at least one processor,
at least a portion of the first order with at least a portion
of the second order;
[5] responsive to matching at least a portion of the first order
with at least a portion of the second order,
causing to be executed,
by the at least one processor,
a trade for at least a portion of the first order against at
least a portion of the second order
at a price between a best bid price and a best offer price
for the item.
Claims 41-53 and 55-61 stand rejected under 35 U.S.C. § 101 as
directed to non-statutory subject matter.
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ISSUES
The issues of eligible subject matter tum primarily on whether the claims
recite more than abstract conceptual advice of what a computer is to provide
without implementation details.
ANALYSIS
Method claim 57 recites receiving order data, communicating
information about the order, receiving more order data, matching portions of
the orders, and causing execution of a trade based on the match. Thus, claim
57 recites receiving and analyzing data and transmitting data that causes
trade execution. None of the limitations recite implementation details for
any of these steps, but instead recite functional results to be achieved by any
and all possible means. Data reception, analysis and modification, and
transmission are all generic, conventional data processing operations to the
point they are themselves concepts awaiting implementation details. The
sequence of data reception-analysis-transmission is equally generic and
conventional. Causing trade execution based on such data transmission is
also conventional. The ordering of the steps is therefore ordinary and
conventional. The remaining claims merely describe trade parameters, with
no implementation details.
The Supreme Court
set forth a framework for distinguishing patents that claim laws
of nature, natural phenomena, and abstract ideas from those that
claim patent-eligible applications of those concepts. First, []
determine whether the claims at issue are directed to one of
those patent-ineligible concepts. If so, we then ask, "[ w ]hat
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else is there in the claims before us? To answer that question, []
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. [The Court] described step two of this
analysis 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."
Alice Corp. Pty. Ltd. v CLS Bank Intl, 134 S. Ct. 2347, 2355 (2014)
(citations omitted) (quoing Mayo Collaborative Servs. v. Prometheus Labs.,
Inc., 566 U.S. 66 (2012)).
To perform this test, we must first determine whether the claims at issue
are directed to a patent-ineligible concept. The Examiner determines the
claims directed to buying or selling an item conditioned on an execution
price of the first order being between a best bid price and a best offer price
for the item, which is an abstract idea. Final Act. 9.
Although the Court in Alice made a determination as to what the claims
were directed to, we find that this case's claims themselves and the
Specification provide enough information to inform one as to what they are
directed to.
The preamble to claim 57 does not recite what it is directed to, but the
steps in claim 57 result in causing a trade to be executed based on price. The
Specification at paragraph 1 recites that the invention relates to trading
within a spread market for a particular item. Thus, all this evidence shows
that claim 57 is directed to trading based on price. This is consistent with
the Examiner's determination.
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It follows from prior Supreme Court cases, and Bilski (Bilski v. Kappas,
561 U.S. 593 (2010)) in particular, that the claims at issue here are directed
to an abstract idea. Like the risk hedging in Bilski, the concept of trading
based on price is a fundamental economic practice long prevalent in our
system of commerce. The use of trading based on price is also a building
block of ingenuity in financial markets. Thus, trading based on price, like
hedging, is an "abstract idea" beyond the scope of§ 101. See Alice, 134
S. Ct at 2356.
As in Alice, we need not labor to delimit the precise contours of the
"abstract ideas" category in this case. It is enough to recognize that there is
no meaningful distinction in the level of abstraction between the concept of
risk hedging in Bilski and the concept of trading based on price at issue here.
Both are squarely within the realm of "abstract ideas" as the Court has used
that term. See Alice, 134 S. Ct at 2357.
Further, claims involving data collection, analysis, and display are
directed to an abstract idea. Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d
1350, 1353 (Fed. Cir. 2016) (holding that "collecting information, analyzing
it, and displaying certain results of the collection and analysis" are "a
familiar class of claims 'directed to' a patent ineligible concept"); see also In
re TL! Commc 'ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016);
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093-94 (Fed. Cir.
2016). Claim 57, unlike the claims found non-abstract in prior cases, uses
generic computer technology to perform data retrieval, analysis, and
transmission and does not recite an improvement to a particular computer
technology. See, e.g., McRO, Inc. v. Bandai Namco Games Am. Inc., 837
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F.3d 1299, 1314--15 (Fed. Cir. 2016) (holding claims not abstract because
they "focused on a specific asserted improvement in computer animation").
As such, claim 57 is directed to the abstract idea of receiving, analyzing, and
transmitting data.
The remaining claims merely describe trade parameters. We conclude
that the claims at issue are directed to a patent-ineligible concept.
The introduction of a computer into the claims does not alter the analysis
at Mayo step two.
[T]he mere recitation of a generic computer cannot transform a
patent-ineligible abstract idea into a patent-eligible invention.
Stating an abstract idea "while adding the words 'apply it'" is
not enough for patent eligibility. Nor is limiting the use of an
abstract idea "'to a particular technological environment."'
Stating an abstract idea while adding the words "apply it with a
computer" simply combines those two steps, with the same
deficient result. Thus, if a patent's recitation of a computer
amounts to a mere instruction to "implemen[t]" an abstract idea
"on ... a computer," that addition cannot impart patent
eligibility. This conclusion accords with the preemption
concern that undergirds our§ 101 jurisprudence. Given the
ubiquity of computers, wholly generic computer
implementation is not generally the sort of "additional
featur[ e ]" that provides any "practical assurance that the
process is more than a drafting effort designed to monopolize
the [ abstract idea] itself."
Alice, 134 S. Ct. at 2358 (citations omitted).
"[T]he relevant question is whether the claims here do more than simply
instruct the practitioner to implement the abstract idea [] on a generic
computer." Alice, 134 S. Ct. at 2359. They do not.
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Taking the claim elements separately, the function performed by the
computer at each step of the process is purely conventional. Using a
computer to receive, analyze, modify, and transmit data amounts to
electronic data query and retrieval----one of the most basic functions of a
computer. The limitation of execution is not a step, but a recitation of the
result of a step, which is aspirational rather than functional. And trade
execution based on data transmission is also among the most common data
processing operations. 2 All of these computer functions are well-
understood, routine, conventional activities previously known to the
industry. See Elec. Power Grp., supra. Also see In re Katz Interactive Call
Processing Patent Litig., 639 F.3d 1303, 1316 (Fed.Cir. 2011) ("Absent a
possible narrower construction of the terms 'processing,' 'receiving,' and
'storing,' ... those functions can be achieved by any general purpose
computer without special programming."). In short, each step does no more
than require a generic computer to perform generic computer functions. As
to the data operated upon, "even if a process of collecting and analyzing
information is 'limited to particular content' or a particular 'source,' that
limitation does not make the collection and analysis other than abstract."
SAP Am. Inc. v. InvestPic LLC, 2018 WL 2207254 (Fed. Cir. 2018).
Considered as an ordered combination, the computer components of
Appellants' method add nothing that is not already present when the steps
are considered separately. The sequence of data reception-analysis-
transmission is equally generic and conventional or otherwise held to be
abstract. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir.
2 See, e.g., Specification paragraph 2.
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2014) (determining the sequence of receiving, selecting, offering for
exchange, display, allowing access, and receiving payment recited an
abstraction); Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d
1372, 1378 (Fed. Cir. 2017) (sequence of data retrieval, analysis,
modification, generation, display, and transmission); Two-Way Media Ltd. v.
Comcast Cable Commc 'ns, LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017)
(sequence of processing, routing, controlling, and monitoring). The ordering
of the steps is therefore ordinary and conventional.
Viewed as a whole, Appellants' method claims simply recite the concept
of trading based on price as performed by a generic computer. To be sure,
the claims recite doing so by advising one to wait to make a trade at a prices
from two orders that are between best bid and best offer. But this is no more
than abstract conceptual advice on the parameters for such trading based on
price and the generic computer processes necessary to process those
parameters, and do not recite any particular implementation.
The method claims do not, for example, purport to improve the
functioning of the computer itself. Nor do they effect an improvement in
any other technology or technical field. The Specification spells out
different generic equipment, 3 and parameters that might be applied using
this concept and the particular steps such conventional processing would
entail based on the concept of trading based on price under different
3 Server 104 may be any suitable server, processor, and computer.
Workstations 101 may be personal computers, laptop computers, mainframe
computers, dumb terminals, data displays, Internet browsers, Personal
Digital Assistants (PDAs), two-way pagers, wireless terminals, and portable
telephones. Specification para. 32.
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scenarios. They do not describe any particular improvement in the manner a
computer functions. Instead, the claims at issue amount to nothing
significantly more than an instruction to apply the abstract idea of trading
based on price using some unspecified, generic computer. Under our
precedents, that is not enough to transform an abstract idea into a patent-
eligible invention. See Alice, 134 S. Ct at 2360.
As to the structural claims, they
are no different from the method claims in substance. The
method claims recite the abstract idea implemented on a generic
computer; the system claims recite a handful of generic
computer components configured to implement the same idea.
This Court has long "warn[ ed] ... against" interpreting § 101 "in
ways that make patent eligibility 'depend simply on the
draftsman's art. '"
Alice, 134 S. Ct at 2360.
We are not persuaded by Appellants' argument that "[t]he Office Action
fails 'to refer to the body of case law precedent ... to identify abstract ideas
by way of comparison to concepts already found to be abstract."' App. Br. 7
(emphasis omitted). The Examiner provides such comparison at Answer 5.
Beyond that, additional comparison is shown supra.
We are not persuaded by Appellants' argument that "[t]he Office Action
has not properly identified an alleged abstract idea or sufficiently explained
why such alleged abstract idea is abstract, as required by the IEG." App. Br.
7-8 ( emphasis omitted). Appellants first answered their own argument by
repeating the Examiner's determination as to the abstract idea directed to.
Id. at 8. The Examiner provides further explanation at Answer 5. Beyond
that, additional explanation is shown supra.
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As to alleged failure to follow the IEG, any Examiner's failure to follow
the Director's guidance is appealable only to the extent that the Examiner
has failed to follow the statutes or case law. That is, to the extent the
Director's guidance goes beyond the case law and is more restrictive on the
Examiner than the case law, failure of the Examiner to follow those added
restrictions is a matter for petition to the Director.
We are not persuaded by Appellants' argument that "[t]he Office Action
fails to identify the additional elements of the dependent claims and fails to
explain why each additional element does not add significantly more to the
alleged abstract idea, as required by the IEG." App. Br. 9 (emphasis
omitted). The additional elements of the dependent claims are part of the
intrinsic evidence and so already of record. Appellants first answer their
own argument by repeating the Examiner's determination as to the reasons
why the dependent claims do not add significantly more. Id. As we
determine supra, the dependent claims do no more than recite various
parameters for the abstract idea in the dependent claims. Parameters for an
algorithm are themselves abstractions of parts of the algorithm.
We are not persuaded by Appellants' argument that "[t]he claims recite
significantly more than the alleged abstract idea." App. Br. 9-10 (emphasis
omitted). This is a conclusory argument to which Appellants do no more
than recite parts of one claim. This is insufficient to act as a separate
argument under 37 C.F.R. § 41.37. Cf In re Lovin, 652 F.3d 1349, 1357
(Fed Cir 2011) ("[T]he Board reasonably interpreted Rule 41.37 to require
more substantive arguments in an [ A ]ppeal [B]rief than a mere recitation of
the claim elements and a naked assertion that the corresponding elements
were not found in the prior art.").
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We are not persuaded by Appellants' argument that "[t]he Office Action
has not provided a separate analysis of each claim, as required by the IEG."
App. Br. 10 ( emphasis omitted). Appellants conflate examination with
explication. The Examiner indicates he examined each claim and chooses to
summarize the determinations. Again, remedy for Examiner failure to
follow the IEG beyond case law is by petition to the Director.
We are not persuaded by Appellants' argument that "[t]he Office Action
has not shown that the claims 'tie up' the alleged abstract idea or pre-empt
others from using the alleged abstract idea." App. Br. 10-11. "Where a
patent's claims are deemed only to disclose patent ineligible subject matter
under the Mayo [/Alice] framework, as they are in this case, preemption
concerns are fully addressed and made moot." Ariosa Diagnostics, Inc. v.
Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
We are not persuaded by Appellants' argument that "[a]s in DDR
Holdings, the 'claimed solution is necessarily rooted in computer technology
in order to overcome a problem specifically arising in the realm of computer
networks."' App. Br. 11. The claims at issue are not rooted in computer
technology to solve a problem specifically arising in some aspect of
computer technology.
Unlike DDR Holdings, the claims at issue are not rooted in
computer technology to solve a problem specifically arising in
some aspect of computer technology. Instead, the claims
at issue are more like the claims we summarized in DDR
Holdings as insufficient to reach eligibility----claims reciting a
commonplace business method aimed at processing business
information despite being applied on a general purpose
computer.
Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1334 (2015).
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The remaining claims are argued on the basis of the arguments supra.
CONCLUSIONS OF LAW
The rejection of claims 41-53 and 55-61 under 35 U.S.C. § 101 as
directed to non-statutory subject matter is proper.
DECISION
The rejection of claims 41-53 and 55-61 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). See 37 C.F.R.
§ 1.136(a)(l)(iv) (2011).
AFFIRMED
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