Ex Parte Winter

Patent Trial and Appeal Board

Oct 22, 2018

13477022 (P.T.A.B. Oct. 22, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/477,022 05/21/2012
128144 7590
Rimon, P.C.
One Embarcadero Center
Suite 400
San Francisco, CA 94111
10/24/2018
FIRST NAMED INVENTOR
Thomas Winter
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.
12-138-US 8350
EXAMINER
WONG,ERICTAKWAI
ART UNIT PAPER NUMBER
3692
NOTIFICATION DATE DELIVERY MODE
10/24/2018 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):
uspto@rimonlaw.com
eofficeaction@appcoll.com
docketing.rimonlaw@clarivate.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte THOMAS WINTER
Appeal2018-002554
Application 13/477,022
Technology Center 3600
Before JOSEPH L. DIXON, JENNIFER S. BISK, and
STEVEN M. AMUNDSON, Administrative Patent Judges.
DIXON, Administrative Patent Judge.
DECISION ON APPEAL
Appeal2018---002554
Application 13/477,022
STATEMENT OF THE CASE
Appellant appeals under 35 U.S.C. § 134(a) from a rejection of claims
1-19. We have jurisdiction under 35 U.S.C. § 6(b).
We affirm.
The claims are directed to a computer-implemented order
allocation system and method:
for allocating quantities of a plurality of orders stored in an
order book side at a price level selected for execution is
provided, wherein each order has a quantity and a [sic] entry
time. A time sensitivity parameter is predefined, wherein the
time sensitivity parameter is a non-negative real number
representing a specific allocation scheme. The quantity to be
allocated is received and is executable against the plurality of
orders stored in the order book side at a price level selected for
execution. A matched quantity is determined for each order of
the plurality of orders stored in the order book side at the price
level selected for execution. Specifically, the matched quantity
is determined by using a general allocation scheme which
depends on the predefined time sensitivity parameter, wherein a
time sensitivity parameter identical to zero defines a pure pro-
rata allocation scheme which exclusively considers the quantity
of individual orders, and wherein a time sensitivity parameter
tending toward infinity defines a time allocation scheme which
exclusively considers the entry time of individual orders, and
wherein a time sensitivity parameter given by a finite positive
real number represents a time-pro-rata allocation scheme which
combines aspects of the pure pro-rata and the time allocation by
considering the quantity as well as the entry time for the
allocation of individual orders. Finally, the quantity to be
allocated is allocated against the orders stored in the order book
side at the price level selected for execution.
(Abstract). Claim 1, reproduced below, is representative of the claimed
subject matter:
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Application 13/477,022
1. A computer-implemented method executed by one or
more computing devices for allocating quantities of a plurality
of orders stored in an order book side at a price level selected
for execution, each order having a quantity of assets and an
entry time, the plurality of orders being ranked in accordance
with their entry time where the order having the oldest entry
time is ranked first, the method comprising:
receiving, by at least one of the one or more computing
devices, a quantity of assets to be allocated, wherein the
quantity to be allocated is executable against the plurality of
orders stored in the order book side at the price level selected
for execution;
for each order of the plurality of orders stored in the
order book side at the price level selected for execution,
determining, by at least one of the one or more computing
devices, a matched quantity, the matched quantity being
determined by using a general allocation scheme which depends
on a time sensitivity parameter, wherein the time sensitivity
parameter determines the degree to which the general allocation
scheme resembles a pro-rata allocation or a time allocation; and
allocating, by at least one of the one or more computing
devices, the quantity to be allocated against the plurality of
orders stored in the order book side at the price level selected
for execution in accordance with the determined matched
quantities.
REFERENCE
The prior art relied upon by the Examiner in rejecting the claims on
appeal is:
Czupek et al. (Czupek) US 2010/0088216 Al Apr. 8, 2010
REJECTIONS
The Examiner made the following rejections:
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Application 13/477,022
Claims 1-19 stand rejected under 35 U.S.C. § 101 because the
claimed invention is directed to patent-ineligible subject matter.
Claims 1-9 and 17-19 stand rejected under pre-AIA 35 U.S.C.
§ 102(b) as being anticipated by Czupek.
ANALYSIS
35 U.S.C. § 101
Section 101 of the Patent Act provides "[w]hoever invents or
discovers any new and useful process, machine, manufacture, or
composition of matter, or any new and useful improvement thereof, may
obtain a patent therefor, subject to the conditions and requirements of this
title." 35 U.S.C. § 101. That provision "'contains an important implicit
exception: Laws of nature, natural phenomena, and abstract ideas are not
patentable."' Alice Corp. Pty. Ltd. v. CLS Banklnt'l, 134 S. Ct. 2347, 2354
(2014) ( quoting Ass 'n for Molecular Pathology v. Myriad Genetics, Inc.,
133 S. Ct. 2107, 2116 (2013)). According to the Supreme Court:
[W]e 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, we determine whether the claims at issue are directed to
one of those patent-ineligible concepts .... If so, we then ask,
"[ w ]hat else is there in the claims before us?" ... To answer
that question, 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. . . . We have
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."
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Application 13/477,022
Alice Corp., 134 S. Ct. at 2355.
The Federal Circuit has described the Alice step-one inquiry as
looking at the "focus" of the claims, their "character as a whole," and the
Alice step-two inquiry as looking more precisely at what the claim elements
add-whether they identify an "inventive concept" in the application of the
ineligible matter to which the claim is directed. See Elec. Power Grp., LLC
v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016); Enfzsh, LLC v.
Microsoft Corp., 822 F.3d 1327, 1335-36 (Fed. Cir. 2016); Internet Patents
Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015).
Regarding Alice step one, the Federal Circuit has "treated collecting
information, including when limited to particular content ( which does not
change its character as information), as within the realm of abstract ideas."
Elec. Power, 830 F.3d at 1353 (emphasis added); see also Internet Patents,
790 F.3d at 1348--49; OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359,
1363 (Fed. Cir. 2015); Content Extraction & Transmission LLC v. Wells
Fargo Bank, Nat 'l Ass 'n, 776 F.3d 1343, 1347 (Fed. Cir. 2014). "In a
similar vein, we have treated analyzing information [including manipulating
information] by steps people go through in their minds, or by mathematical
algorithms, without more, as essentially mental processes within the
abstract-idea category." Elec. Power, 830 F.3d at 1354 (emphasis added);
see also In re TL! Commc 'ns. LLC Patent Litig., 823 F.3d 607, 613 (Fed.
Cir. 2016). "And we have recognized that 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." Elec. Power, 830 F.3d at
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Application 13/477,022
1354 (emphasis added); see also Ultramercial, Inc. v. Hulu, LLC, 772 F.3d
709, 714--15 (Fed. Cir. 2014).
We disagree with Appellant's arguments, and agree with and adopt
the Examiner's findings and conclusions in (i) the action from which this
appeal is taken and (ii) the Answer to the extent they are consistent with our
analysis below.
The Examiner relies upon the prior statements of the rejection and
responds to Appellant's arguments. (Ans. 3). The Examiner rejects the
claims under 35 U.S.C. § 101 because they are directed to patent-ineligible
subject matter. See Final Act. 2-8, 15-19; Ans. 3-10.
In particular, the Examiner determines "the claims are directed to
allocating order quantities, which is a fundamental economic practice and
therefore an abstract idea." (Final Act. 2). The Examiner further determines
that claims 1-19 do not include any element or combination of elements
such that the claims are directed to "significantly more" than the abstract
idea itself. (Final Act. 3).
Appellant contends:
Claims 1-19 do not seek to "tie up" the alleged abstract idea of
"allocating order quantities" and (2) even if the claims were
deemed to be directed to the alleged abstract idea the claims
include elements and combinations of elements such that the
claims are directed to "significantly more" than the alleged
abstract idea itself.
(App. Br. 5). Appellant further contends:
In this case, the Examiner has not taken into account the
character of the claims as a whole, but has instead merely relied
on a high level abstraction of the claimed invention. This
analysis does not fulfill the requirements of 35 U.S.C. § 101
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Application 13/477,022
because the Examiner has not demonstrated that the claims are
"directed to" an abstract idea and has not demonstrated how the
recited claim limitations are believed to correspond to an
abstract idea. Furthermore, the characterization of the claims as
"allocating order quantities in order to facilitate financial
transactions" is a description "at a high level of abstraction
untethered from the language of the claim." Id. For example,
the Examiner has not indicated where, specifically, the claims
"set forth or describe" the alleged concept of "allocating order
quantities." To the contrary, the Examiner has cherry-picked
some words from the preamble of the claims and then used
those words to inaccurately characterize the entire claim. In
other words, the fact that the claimed invention can be used to
allocate order quantities in a specific manner does not mean that
the claims are "directed to" allocating order quantities.
(App. Br. 6-7). Appellant further contends that:
The present claims are directed to an improvement to a
computer-related technology. In particular, the claims are
directed to an improvement in a matching engine of an
electronic trading system which allows for the matching of
orders according to a generalized allocation scheme which takes
into account a time sensitivity parameter which determines the
degree to which the generalized allocation scheme resembles a
pro-rata allocation or a time-based allocation. The specification
clearly describes the novel function of the computer when
accomplishing the claimed method.
(App. Br. 7). Appellant relies upon paragraph 24 of Appellant's
Specification to support the position that the present claims are an
improvement to computer-related technology. We find Appellant's
argument to be unavailing because the performance of the computer is not
improved, but merely the processing of orders may be changed due to a shift
in the allocation algorithm.
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Appellant further contends that "allocating order quantities" is not an
abstract idea within the meaning of 35 U.S.C. § 101. (App. Br. 8).
Appellant further argues "[ e ]ven setting aside the fact that the claims are not
'directed to' allocating order quantities, Appellant is unable to identify any
court cases in which this concept or similar concepts have been identified as
abstract ideas." (App. Br. 8). Appellant contends that none of the identified
cases by the Examiner are directed to "allocating order quantities." (App.
Br. 8-9).
While we agree with Appellant that the Examiner has not cited to any
cases directed to allocating order quantities, we note that the orders which
are recited in independent claim 1 pertain to "the field of trading derivatives
and, more particularly, to computer systems and computer implemented
methods for allocating orders stored in an order book side at one price level
selected for execution." (Spec. ,r 1; see also Spec. ,r 2 "A derivative is a
financial instrument whose value depends on or derives from the values of
other, more basic underlying variables. Very often, the variables underlying
derivatives are the prices of traded assets. A stock option, for example, is a
derivative whose value is dependent on the price of a stock.").
Consequently, we determine the order quantities have to do with contracts
for financial instruments, which are legal abstractions. We further note that
the courts have decided that inventions for allocating and processing these
orders for legal abstractions to be abstractions themselves. See Int 'l Sec.
Exch., LLC v. Chi. Bd. Options Exch., Inc., CBM2013-00050, 2015 WL
930204 (PTAB 2015), aff'd, 640 F. App'x 986 (Mem.) (Fed. Cir. 2016)
(addressing claims covering "[a] system for processing trades of securitized
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instruments based on security orders and quotes received from client
computers").
With respect to step two of the Alice analysis, Appellant contends that
the claims recite "significantly more" than the alleged abstract idea of
"allocating order quantities." (App. Br. 9). Appellant contends that the
independent claims recite that a plurality of orders are ranked "in
accordance with their entry time where the order having the oldest entry
time is ranked first" and that a matched quantity for each order is
"determined by using a general allocation scheme which depends on a time
sensitivity parameter which determines the degree to which the general
allocation scheme resembles a pro-rata allocation or a time allocation. "
(App. Br. 10).
Appellant contends that the present system utilizes a generalized
allocation scheme described in paragraph 148 of the Specification and the
generalized allocation scheme includes countless specific allocation schemes
indexed by their time-sensitivity parameter. (App. Br. 10). Appellant
further identifies Figure 6 of the application showing the allocation schemes
of the present application. (App. Br. 11 ).
While we agree with Appellant that the disclosed allocation schemes
may contain many allocation schemes, we find independent claim 1 merely
sets forth the steps of "receiving ... a quantity of assets," " determining ... a
matched quantity," and "allocating ... the quantity to be allocated against the
plurality of orders"; and the language of the claim does not set forth any
correspondingly limited steps to the determination of a variable allocation
scheme. Additionally, we do not agree with Appellant that the language of
independent claim 1 sets forth a method of determining a corresponding
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Application 13/477,022
model or allocation scheme because there are no active steps in the method
to perform these functions.
With respect to independent claims 18 and 19, Appellant merely
repeats the claim language and relies upon the arguments advanced with
respect to independent claim 1. (App. Br. 12). As a result, Appellant's
arguments do not show error in the Examiner's conclusion concerning a lack
of patent-eligible subject matter for independent claims 18 and 19.
Additionally, Appellant sets forth separate arguments for dependent
claims 7 and 9 and generally contends that "each of the dependent claims
recite[ s] limitations which are also 'significantly more' than the alleged
abstract idea of 'allocating order quantities."' (App. Br. 12). Appellant
merely repeats the language of the claims and alleges that the Examiner has
overgeneralized the express claim language. (App. Br. 13).
While we note that the Examiner's treatment of the claims is general
in nature, we consider Appellant's arguments to be similarly general in
nature and Appellant does not specifically identify how the recited claim
language further limits the method of independent claim 1. From our review
of the totality of the limitations recited in independent claim 7, the claim
merely sets forth four separate limitations drafted starting with "wherein"
and further detail the data which is used in the three-step method recited in
independent claim 1. As a result, we determine the four limitations recited
in dependent claim 7 do not further limit the "method" of independent claim
1 and consequently cannot provide a basis for "significantly more" than the
abstract idea. We further note Appellant has provided no separate
arguments for any of the intervening claims 2---6.
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With respect to dependent claim 9, Appellant does not set forth
separate arguments for patentability and relies upon the general contention
that the narrowing scope of the claim can certainly "elevate the claim out of
the realm of well understood, routine and conventional. In this case, the
claimed allocation scheme is novel and not well known or routine and
achieves the superior results noted above." (App. Br. 13).
While we agree with Appellant that narrowing the scope of the claim
can elevate the claim out of the realm of well-known, routine, and
conventional, Appellant has provided any specific arguments for
patentability thereto.
Appellant's general assertion is unpersuasive of error. See 37 C.F.R.
§ 4I.37(c)(l)(iv) ("A statement which merely points out what a claim recites
will not be considered an argument for separate patentability of the claim.");
see also In re Lovin, 652 F.3d 1349, 1357 (Fed. Cir. 2011) (holding that "the
Board reasonably interpreted Rule 41.37 to require more substantive
arguments in an appeal brief than a mere recitation of the claim elements and
a naked assertion that the corresponding elements were not found in the
prior art").
Moreover, we determine that dependent claim 9 merely requires two
allocation steps (see claim 2) and further details determining an ideally
matched quantity of an order, which further details two factors, but does
not further limit the three steps of independent claim 1 and consequently
cannot be "significantly more" than the abstract idea. Alternatively, we
may speculate the language of dependent claim 9 may be interpreted to
further limit the determining step to limit one of the two steps from
dependent claim 2 and further subdivide one determination therein to be an
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additional two-step determination. But Appellant has provided no further
argument with which to evaluate whether the claimed invention is directed
to "substantially more." Based upon our speculation, we consider the
claim to further limit the mathematical processing of the order, which
merely amounts to a more detailed abstract idea. ("We may assume that
the techniques claimed are "[g]roundbreaking, innovative, or even
brilliant," but that is not enough for eligibility." S'AP America, Inc. v.
Jnvestpic, LLC, 898 F.3d 1161, 1163 (2018)). "[A] claim is not patent
eligible merely because it applies an abstract idea in a narrow way." BSG
Tech LLC v. BuySeasons, Inc., 899 F.3d 1281, 1287 (Fed. Cir. 2018).
Reply Brief
Appellant argues that the Examiner addresses the claim limitations
with "conclusory statements [that] continue to ignore the character of the
claims as a whole and merely rely on a high-level abstraction of the claimed
invention." (Reply Br. 1 ). Appellant presents similar arguments to the
Specification at paragraphs 24 and 148 of the Specification, which we found
to be unpersuasive. (See Reply Br. 2--4). Appellant again argues that the
PT AB has recognized that claims resulting in improved function of a
computer are patent eligible (Reply Br. 5-6), but Appellant does not identify
how the claimed invention improves the functioning of the computer or any
other technology more than processing orders for purchase and sale of
contracts for derivatives.
Therefore, we find that Appellant's arguments do not show error in
the Examiner's conclusion of a lack of patent-eligible subject matter of
independent claim 1 and independent claims 18 and 19 not argued
separately. Additionally, we find that Appellant's arguments do not show
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error in the Examiner's conclusion of a lack of patent-eligible subject matter
of dependent claims 7 and 9.
Because Appellant has not set forth separate arguments for
patentability of the remaining dependent claims, we group these claims as
falling with their representative independent claims. See 37 C.F.R.
§ 4I.37(c)(l)(iv).
Because Appellant has not persuaded us the Examiner erred, we
sustain the Examiner's rejection of claims 1-19 under 35 U.S.C. § 101.
35 U.S.C. § 102
With respect to independent claims 1, 18, and 19, Appellant argues the
claims together. (App. Br. 14). As a result, we select independent claim 1 as
the representative claim for the group and will address Appellant's
arguments thereto. Appellant argues:
The differences between Czupek and the present application are
fundamental and result in different and non-intersecting
approaches. Czupek and the present application both refer to a
method of determining how to allocate a quantity of price-best
orders stored in the order book against an incoming order.
However, the disclosure of Czupek and the recited claims are
completely different and, from a conceptual point of view, do
not contain overlapping areas.
(App. Br. 14--15). Appellant contends that "Czupek is dealing with only two
different, well-known allocation schemes, the FIFO and the ProRata
Allocation." (App. Br. 15). Appellant contrasts the disclosure of Czupek
with the present application and claims which describe a
set of allocation schemes, including individual allocation
schemes which are not identical to FIFO or to ProRata
allocation. Instead, each individual allocation scheme can be
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described as a merging of a FIFO and ProRata allocation,
creating a new allocation different from FIFO and ProRata. See
Application, Fig. 5. The merging parameter is the time
sensitivity parameters> 0. Thus, the present application
describes an allocation method which creates new allocations
different from FIFO and ProRata and these new allocations
cannot be described as a split between FIFO/ProRata since the
characteristics of such newly created allocations are different
compared to FIFO or ProRata.
(App. Br. 15). The Examiner finds that:
Czupek discloses an allocation scheme which employs two
suballocation schemes, FIFO and ProRata. Czupek's allocation
scheme depends on a FIFOpercent parameter, which represents
the percentage of the incoming order that should be allocated
using FIFO principles; and wherein the remaining percent is
allocated using pro-rata principles. Here, Appellant's "general
allocation scheme" reads on Czupek's allocation scheme.
(Ans. 11 ). The Examiner further maintains that the features that Appellant
distinguishes the invention over are not recited in the claims. (Ans. 12). We
agree with the Examiner. Thus, Appellant's argument fails because it is not
commensurate with the scope of the claim. See In re Self, 671 F.2d 1344,
1348 (CCPA 1982) ("[A]ppellant's arguments fail from the outset because
... they are not based on limitations appearing in the claims."); see also
In re Hiniker Co., 150 F.3d 1362, 1369 (Fed. Cir. 1998) ("[The] proffered
facts . . . are not commensurate with the claim scope and are therefore
unpersuasive.").
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We find Appellant's arguments are not commensurate in scope with
the express language set forth in independent claim 1 and do not distinguish
the claim from Czupek.
Because Appellant has not set forth separate arguments for
patentability of the remaining dependent claims, we group these claims as
falling with their representative independent claims. See 37 C.F.R.
§ 4I.37(c)(l)(iv).
CONCLUSIONS
The Examiner did not err in rejecting claims 1-19 under 35 U.S.C.
§ 101, and the Examiner did not err in rejecting claims 1-9 and 17-19 based
upon anticipation.
DECISION
For the above reasons, we sustain the Examiner's rejection of claims
1-19 based upon a lack of patent eligible subject matter under 35 U.S.C.
§ 101, and we sustain the Examiner's anticipation rejection of claims 1-9
and 17-19 under 35 U.S.C. § 102
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
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