Ex Parte White et alDownload PDFPatent Trial and Appeal BoardAug 29, 201813671543 (P.T.A.B. Aug. 29, 2018) Copy Citation UNITED STA TES p A TENT AND TRADEMARK OFFICE APPLICATION NO. 13/671,543 132787 7590 Docket Clerk-GOLD P.O. Drawer 800889 Dallas, TX 75380 FILING DATE FIRST NAMED INVENTOR 11/07/2012 Christopher White 08/31/2018 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. GOLDll-00429 2124 EXAMINER KING JR., JOSEPH W ART UNIT PAPER NUMBER 3696 NOTIFICATION DATE DELIVERY MODE 08/31/2018 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): patents@munckwilson.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD Exparte CHRISTOPHER WHITE, JUSTIN GMELICH, DIMITER GEORGIEV, DEBRA HERSCHMANN, PAUL J. HUCHRO, WICHAR JIEMPREECHA, ROSS LEVINSKY, JOHNNY SHAFFER, STEPHANIE MIRIAM SKLAR, and PAUL WALKER Appeal2017-005787 Application 13/671,543 Technology Center 3600 Before JOHN A. JEFFERY, JENNIFER S. BISK, and CATHERINE SHIANG, Administrative Patent Judges. JEFFERY, Administrative Patent Judge. DECISION ON APPEAL Appellants 1 appeal under 35 U.S.C. § 134(a) from the Examiner's decision to reject claims 1-3, 5-21, 23-39, and 41-54. We have jurisdiction under 35 U.S.C. § 6(b). We affirm. STATEMENT OF THE CASE Appellants' invention is an electronic trading session that guarantees minimum liquidity for the session. Client orders for financial instruments 1 Appellants identify the real party in interest as Goldman, Sachs & Co. App. Br. 1. Appeal2017-005787 Application 13/671,543 are then executed using the guaranteed liquidity. See generally Abstract; Spec. ,r 35. Claim 1 is illustrative: 1. An electronic trading system, comprising: a memory; a processor in communication with the memory, and configured to execute a plurality of processing instructions to: receive credentials associated with users of the electronic trading system; configure a trading session of a predetermined length and including a guaranteed minimum notional amount of liquidity for trading in a financial instrument; system; receive orders for the financial instrument from the users of the electronic trading filter the orders based on parameters of the session and the credentials of the users; aggregate the orders during an order entry phase of the sess10n; determine during the session that there is not enough counter liquidity to execute one or more of the orders; provide liquidity during the session to ensure the guaranteed minimum notional amount of liquidity; and execute one or more of the orders during the session using the guaranteed minimum notional amount of liquidity. THE REJECTION The Examiner rejected claims 1-3, 5-21, 23-39, and 41-54 under 35 U.S.C. § 101 as directed to ineligible subject matter. Final Act. 3-7. 2 2 Throughout this opinion, we refer to (1) the Final Rejection mailed May 6, 2016 ("Final Act."); (2) the Appeal Brief filed October 3, 2016 ("Br."); and (3) the Examiner's Answer mailed November 30, 2016 ("Ans."). 2 Appeal2017-005787 Application 13/671,543 FINDINGS AND CONTENTIONS The Examiner finds that the claimed invention is directed to an abstract idea, namely security trading using a guaranteed amount of liquidity-a fundamental economic practice. Final Act. 3---6; Ans. 5. According to the Examiner, the claimed elements do not add significantly more to the abstract idea to render the claimed invention patent-eligible because, among other things, the claimed invention merely uses a general- purpose computing device to receive and analyze data, and then transact a trading session. Final Act. 6-7. The Examiner adds that the claimed invention does not solve a technical problem, but rather provides a financial solution to a financial problem, namely by guaranteeing a liquidity amount sufficient to fulfill a trade order for a security. Ans. 5---6. Appellants argue that the Examiner improperly generalized the claims to a high level of abstraction untethered from the claim language. Br. 27- 28. According to Appellants, the claims are directed to solving a technical problem, namely ensuring enough liquidity exists in an electronic trading session to execute orders in the session, with a technical solution that injects additional liquidity into the session, if needed. Br. 28. Appellants add that not only did the Examiner not consider preemption adequately, but the claims also add significantly more to the alleged abstract idea. Br. 29-32. Appellants also contend that the dependent claims are eligible for same reasons that the independent claims are eligible. Br. 32. According to Appellants, the dependent claims are directed to a particular methodology for guaranteeing a certain liquidity amount-features that are said to have not been known previously nor disclosed in the prior art of record. Id. 3 Appeal2017-005787 Application 13/671,543 ISSUE Has the Examiner erred in rejecting claim 1 by concluding that it is directed to ineligible subject matter under§ 101? This issue turns on whether the claimed invention is directed to a patent-ineligible abstract idea and, if so, whether the claim's elements----considered individually and as an ordered combination-transform the nature of the claim into a patent- eligible application of that abstract idea. ANALYSIS Claims 1, 19, and 37 To determine whether claims are patent eligible under § 101, we apply the Supreme Court's two-step test articulated in Alice Corp. Proprietary Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014). First, we determine whether the claims are directed to a patent-ineligible concept: laws of nature, natural phenomena, and abstract ideas. Id. at 2354--55. If so, we then proceed to the second step and examine the claim's elements-both individually and as an ordered combination-to determine whether the claim contains an "inventive concept" sufficient to transform the claimed abstract idea into a patent-eligible application. Id. at 2357. Alice Step One Applying Alice step one, we agree with the Examiner that the claimed invention is directed to an abstract idea, security trading using a guaranteed amount of liquidity-a fundamental economic practice. Final Act. 4; Ans. 4. Independent claim 1 recites, in pertinent part, a processor configured to execute instructions to ( 1) receive credentials associated with users of an 4 Appeal2017-005787 Application 13/671,543 electronic trading session; (2) configure a trading session that includes a guaranteed minimum notional amount of liquidity for trading in a financial instrument; (3) filter orders based on session parameters and user credentials; and ( 4) aggregate orders during the session's order entry phase. Notably, the processor can also execute instructions to perform three additional functions during the session, namely (1) determine that there is insufficient counter liquidity to execute one or more orders; (2) provide liquidity to ensure the guaranteed minimum notional amount of liquidity; and (3) execute one or more orders using this guaranteed amount. In essence, the claimed invention ensures that sufficient liquidity is available during an electronic trading session to execute an order for a financial instrument in that session. Despite Appellants' arguments to the contrary (Br. 27-8), we agree with the Examiner that the claimed invention is directed to an abstract idea that, in essence, is a fundamental economic and business practice. See Final Act. 4---6; Ans. 4--5. Such fundamental economic and business practices are often held to be abstract ideas. See, e.g., Alice, 134 S. Ct. at 2356 (holding the concept of intermediated settlement is an abstract idea directed to a "fundamental economic practice long prevalent in our system of commerce") ( citation omitted); see also buySAFE v. Google, Inc., 765 F.3d 1350, 1353-54 (Fed. Cir. 2014) (citing cases where contractual relations at issue constituted fundamental economic practices, and noting that forming or manipulating economic relations may involve an abstract idea); Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass 'n, 776 F.3d 1343, 1347 (Fed. Cir. 2014) (explaining that claims directed to "the mere formation and manipulation of economic relations" and "the performance of certain financial transactions" have been 5 Appeal2017-005787 Application 13/671,543 held to involve abstract ideas); In re Chorna, 656 F. App'x 1016, 1022 (Fed. Cir. 2016) (unpublished) (holding ineligible claims directed to financial instruments valued using an allocation formula, traded, and cleared as directed to an abstract idea). Furthermore, it well settled that collecting information is within the realm of abstract ideas----even when the information is limited to particular content. Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016). It is also well settled that analyzing information by steps people go through in their minds, or by mathematical algorithms, without more, are essentially mental processes within the abstract idea category. Id. at 1354. And merely presenting the results of abstract processes of collecting and analyzing information, without more (such as identifying a particular tool for presentation), is abstract as an ancillary part of such collection and analysis. Id. Similar to the claims at issue in Electric Power, the claimed invention here gathers, manipulates, and analyzes information of a specified content, but does not use any particular inventive technology for performing those functions. That the information pertains to financial instrument orders and associated liquidity needed to execute those orders is of no consequence here, for collecting and analyzing such information does not make the collection and analysis non-abstract. See SAP America, Inc. v. Investpic, LLC, 890 F.3d 1016, 1021 (Fed. Cir. 2018), modified on reh 'g (Fed. Cir. Aug. 2, 2018). Nor are we persuaded that the claimed invention improves the processor's functionality or efficiency, or otherwise changes the way that a device functions, at least in the sense contemplated by the Federal Circuit in 6 Appeal2017-005787 Application 13/671,543 Enfish LLC v. Microsoft Corporation, 822 F.3d 1327 (Fed. Cir. 2016), despite Appellants' arguments to the contrary (Br. 26-27). The claimed self-referential table in Enfish was a specific type of data structure designed to improve the way a computer stores and retrieves data in memory. Enfish, 822 F.3d at 1339. To the extent Appellants contend that the claimed invention uses such a data structure to improve a computer's functionality or efficiency, or otherwise change the way that device functions (see Br. 26- 27), there is no persuasive evidence on this record to substantiate such a contention. Nor do we find Appellants' reliance on McRO, Inc. v. Bandai Namco Games America, Inc., 837 F.3d 1299 (Fed. Cir. 2016) (Br. 26-27, 29-30) persuasive. There, the claimed process used a combined order of specific rules that rendered information in a specific format that was applied to create a sequence of synchronized, animated characters. McRO, 837 F.3d at 1315. Notably, the recited process automatically animated characters using particular information and techniques-an improvement over manual three- dimensional animation techniques that was not directed to an abstract idea. Id. at 1316. But unlike McRO that improved how the physical display operated to produce better quality images, the claimed invention here ensures that sufficient liquidity is available during an electronic trading session to execute an order for a financial instrument in that session-a mathematical determination that is not only directed to a fundamental economic practice, but also does not improve a display mechanism as was the case in McRO. Although the claimed invention requires computer components, it is the incorporation of those components-not a claimed rule-that purportedly 7 Appeal2017-005787 Application 13/671,543 improves the existing process. Cf Fair Warning IP, LLC v. Iatric Systems, Inc., 839 F.3d 1089, 1095 (Fed. Cir. 2016). That the Specification indicates that standard off-the-shelf computer technology is usable to implement the claimed invention in paragraphs 62 to 65 of the Specification only bolsters the notion that the claimed invention does not focus on an improvement in computers as tools, but rather certain independently abstract ideas that use computers as tools. See Elec. Power, 830 F.3d at 1354. In short, the claimed invention does not solve a technical problem, but rather solves a financial problem, namely by guaranteeing a liquidity amount sufficient to fulfill a trade order for a security as the Examiner indicates. Ans. 5-6. The Examiner's point in this regard is well taken. Although the claimed invention's ensuring that sufficient liquidity is available during a trading session to execute orders may be beneficial by incentivizing users to submit trade orders as Appellants contend (Br. 28), a claim for a useful or beneficial abstract idea is still an abstract idea. See Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379-80 (Fed. Cir. 2015). We, therefore, agree with the Examiner that claim 1 is directed to an abstract idea. Alice Step Two Turning to Alice step two, the recited elements----considered individually and as an ordered combination----do not transform the nature of claim 1 into a patent-eligible application of the abstract idea to ensure that the claim amounts to significantly more than that idea. See Alice, 134 S. Ct. at 2357. 8 Appeal2017-005787 Application 13/671,543 That the recited method uses a memory and processor to perform the recited functions does not change our conclusion. As the Examiner indicates, the claimed invention merely uses generic computing components to perform the recited abstract idea, namely trading securities using a guaranteed amount of liquidity. See Final Act. 6-7; Ans. 7-8. Merely reciting these generic computing components cannot transform a patent- ineligible abstract idea into a patent-eligible invention. See Alice 134 S. Ct. at 2358-59. Indeed, the recited generic computing components merely do that which can be performed mentally or with a pen and paper----exclusive functions ineligible for patent protection under § 101. See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372 (Fed. Cir. 2011). To the extent that Appellants contend that the recited functions could not otherwise be performed manually (see Br. 28-32), there is no persuasive evidence on this record to substantiate such a contention. Nevertheless, even assuming, without deciding, that the recited components add efficiency, any speed increase comes from the capabilities of the generic computer components-not the recited process itself. See FairWarning IP, LLC v. Iatric Systems, Inc., 839 F.3d 1089, 1095 (Fed. Cir. 2016) (citing Bancorp Services, LLC v. Sun Life Assurance Co., 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.")). Like the claims in Fair Warning, the focus of claim 1 is not on an improvement in computer processors as tools, but on certain independently abstract ideas that use 9 Appeal2017-005787 Application 13/671,543 generic computing components as tools. See FairWarning, 839 F.3d at 1095 ( citations and quotation marks omitted). In short, merely reciting these generic computing components cannot transform a patent-ineligible abstract idea into a patent-eligible invention. Id. at 2358. In other words, merely reciting an abstract idea while adding the words "apply it with a computer" does not render an abstract idea non- abstract: there must be more. See Alice, 134 S. Ct. at 2359. Nor does the claimed invention improve the computer processor device's functionality or efficiency, or otherwise change the way that device functions. Cf Enfish LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). We reach a similar conclusion regarding the recited filtering orders based on session parameters and user credentials. See BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1348 (Fed. Cir. 2016) ("[F]iltering content is an abstract idea because it is a longstanding, well-known method of organizing human behavior, similar to concepts previously found to be abstract."); see also LendingTree, LLC v. Zillow, Inc., 656 F. App'x 991, 992-97 (Fed. Cir. 2016) (unpublished) (holding ineligible claims directed to a method and system for coordinating between a computer user and plural lending institutions that recited, among other things, filtering credit data to select certain institutions). To be sure, the court in BASCOM held eligible claims directed to a technology-based solution to filter Internet content that overcame existing problems with other Internet filtering systems by making a known filtering solution-namely a "one-size-fits-all" filter at an Internet Service Provider (ISP}--more dynamic and efficient via individualized filtering at the ISP. BASCOM, 827 F.3d at 1351. This customizable filtering solution improved 10 Appeal2017-005787 Application 13/671,543 the computer system's performance and, therefore, was patent-eligible. See id. But unlike the Internet-based filtering improvements in BASCOM that added significantly more to the abstract idea in that case, the claimed invention here merely uses generic computing components to filter orders based on session parameters and user credentials-a filtering process that does not add significantly more to the abstract idea. To the extent Appellants contend otherwise, there is no persuasive evidence on this record to prove such a contention. We reach the same conclusion regarding the other recited elements of claim 1. First, the recited functions that (1) receive user credentials, and (2) receive, filter, and aggregate orders not only merely use generic computing components to achieve those ends, but are also data gathering steps that constitute insignificant extra-solution activity that is insufficient to render the claim patent-eligible. See In re Bilski, 545 F.3d 943, 963 (Fed. Cir. 2008) (en bane), aff'd on other grounds, 561 U.S. 593 (2010) ( characterizing data gathering steps as insignificant extra-solution activity). Nor does the recited trading session configuration add significantly more to the abstract idea, for such a configuration merely uses generic computing components to achieve that end. We reach the same conclusion regarding the three additional functions performed during the session, namely (1) determining that there is insufficient counter liquidity to execute one or more orders; (2) providing liquidity to ensure the guaranteed minimum notional amount of liquidity; and (3) executing the orders using this guaranteed amount. Despite performing these functions during the 11 Appeal2017-005787 Application 13/671,543 session, generic computing components are nevertheless used to that end- functions that could otherwise be performed manually. Lastly, we find unavailing Appellants' contention that the Examiner also allegedly failed to consider preemption adequately. See Br. 29-30. To the contrary, the Examiner not only considered preemption in the ineligibility analysis as noted on page 6 of the Answer, but where, as here, the claims cover a patent-ineligible concept, preemption concerns "are fully addressed and made moot" by an analysis under the Alice framework. See Ariosa, 788 F.3d at 1379. The Examiner's point in this regard is well taken. See Ans. 6 ( citing Ariosa). For the foregoing reasons, then, the recited elements----considered both individually and as an ordered combination----do not contain an "inventive concept" sufficient to transform the claimed abstract idea into a patent-eligible application. Therefore, we are not persuaded that the Examiner erred in rejecting claim 1, and claims 19 and 37 not argued separately with particularity. Claims 2, 3, 5-18, 20, 21, 23-36, 38, 39, and 41-54 We also sustain the Examiner's ineligibility rejection of dependent claims 2, 3, 5-18, 20, 21, 23-36, 38, 39, and 41-54. See Final Act. 6-7 (finding that the dependent claims include no additional elements that add significantly more to the abstract idea). First, Appellants' contention that the dependent claims are eligible for same reasons that the independent claims are eligible (Br. 32) is unavailing for the reasons previously discussed. Even assuming, without deciding, that the dependent claims' subject matter was not known previously nor 12 Appeal2017-005787 Application 13/671,543 disclosed in the prior art as Appellants contend (id.), that is not dispositive of eligibility, for "[g]roundbreaking, innovative, or even brilliant discovery does not by itself satisfy the§ 101 inquiry." Ass 'nfor Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013); see also Diamond v. Diehr, 450 U.S. 17 5, 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."); Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1263 n.3 (Fed. Cir. 2016) (noting that an eligibility finding does not tum on the novelty of using a user-downloadable application for the particular purpose recited in the claims). Therefore, to the extent that Appellants contend that the dependent claims are eligible because the Examiner did not reject these claims over prior art (see Br. 32), such an argument is unavailing. Second, to the extent that Appellants intended to argue dependent claim 2 separately (see Br. 32), we find such an argument unavailing. Notably, Appellants do not provide the requisite subheading to clearly and unambiguously identify that claim 2 is argued separately-a regulatory requirement. See 37 C.F.R. § 4I.37(c)(l)(iv) ("Under each heading identifying the ground of rejection being contested, any claim(s) argued separately or as a subgroup shall be argued under a separate subheading that identifies the claim( s) by number.") ( emphasis added); see also MANUAL OF PATENT EXAMINING PROCEDURE (MPEP) § 1205.02 (9th ed. Rev. 08.2017, Jan. 2018) (explaining this rule). But even if such arguments were properly presented (which they were not), we still find them unpersuasive. On page 32 of the Appeal Brief, 13 Appeal2017-005787 Application 13/671,543 Appellants merely quote the limitations of claim 2 and allege that they are unconventional and "not known ... to the prior art" because the Examiner did not identify any prior art with which to reject such a concept. But as noted previously, that the dependent claims' subject matter was not known previously nor disclosed in the prior art as Appellants contend is not dispositive of eligibility. See Myriad, 569 U.S. at 591; see also Diehr, 450 U.S. at 188-89. In any event, Appellants do not persuasively rebut the Examiner's findings and conclusions regarding claim 2 and the other dependent claims for the reasons noted above and by the Examiner. See Final Act. 6-7; Ans. 8-9. Therefore, we are not persuaded that the Examiner erred in rejecting claims 2, 3, 5-18, 20, 21, 23-36, 38, 39, and 41-54. CONCLUSION The Examiner did not err in rejecting claims 1-3, 5-21, 23-39, and 41-54 under§ 101. DECISION We affirm the Examiner's decision to reject claims 1-3, 5-21, 23-39, and 41-54. No time period for taking any subsequent action in connection with this appeal may be extended under 37 C.F.R. § 1.136(a)(l )(iv). AFFIRMED 14 Copy with citationCopy as parenthetical citation