PROFUND ADVISORS LLC

Patent Trials and Appeals Board

Feb 28, 2020

14300410 - (D) (P.T.A.B. Feb. 28, 2020)

UNITED STATES PATENT AND TRADEMARK OFFICE
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
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
14/300,410 06/10/2014 William E. SEALE 11070.0003-05000 1556
22852 7590 02/28/2020
FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER
LLP
901 NEW YORK AVENUE, NW
WASHINGTON, DC 20001-4413
EXAMINER
HOLLY, JOHN H
ART UNIT PAPER NUMBER
3696
NOTIFICATION DATE DELIVERY MODE
02/28/2020 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):
regional-desk@finnegan.com
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte WILLIAM E. SEALE and TAEYONG LEE
____________

Appeal 2019-002942
Application 14/300,410
Technology Center 3600
____________

Before ST. JOHN COURTENAY III, BETH Z. SHAW, and
JOYCE CRAIG, Administrative Patent Judges.

COURTENAY, Administrative Patent Judge.

DECISION ON APPEAL
Appellant1 appeals under 35 U.S.C. § 134(a) from a Final rejection of
claims 1 and 24–43. Claims 2–23 are canceled. We have jurisdiction over
the pending claims under 35 U.S.C. § 6(b).
We affirm.

1 We use the word “Appellant” to refer to “applicant” as defined in 37
C.F.R. § 1.42(a). According to Appellant, the real party in interest is
Profund Advisors, LLC. See Appeal Br. 3.

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STATEMENT OF THE CASE
Introduction
Embodiments of Appellant’s invention relate generally to “the field of
exchange traded funds. In particular, it relates to a method and system for
calculating an intraday indicative value for leveraged bullish and/or bearish
exchange traded funds (‘ETF’).” Spec. ¶ 2.

Rejection 2
Claims 1 and 24–43 are rejected under 35 U.S.C. § 101, as being
directed to a judicial exception, without significantly more. See Final Act. 2.
Issues on Appeal
Did the Examiner err in rejecting claims 1 and 24–43 under
35 U.S.C. § 101, as being directed to a judicial exception, without
significantly more?
ANALYSIS
We reproduce infra independent claim 1 in Table One. We have
considered all of Appellant’s arguments and any evidence presented. To the
extent Appellant has not advanced separate, substantive arguments for
particular claims, or other issues, such arguments are waived. See 37 C.F.R.
§ 41.37(c)(1)(iv).

2 The Examiner withdrew the rejection under 35 U.S.C. § 103. See PTO-
90C, office communication, mailed on Aug. 15, 2018. As noted by
Appellant, “the non-statutory obviousness-type double patenting rejection
was mooted by Appellant’s submission of a Terminal Disclaimer on October
17, 2018.” Reply Br. 2. In reviewing the record, we note the Terminal
Disclaimer was approved and entered the next day, on Oct. 18, 2018.
Therefore, these rejections are not before us on appeal.
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Rejection under 35 U.S.C. § 101
Principles of Law
A. Section 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.
However, the U.S. Supreme Court has long interpreted 35 U.S.C. § 101 to
include implicit exceptions: “[l]aws of nature, natural phenomena, and
abstract ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’l, 573
U.S. 208, 216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Court’s two-part framework, described in Mayo and Alice.
Alice, 573 U.S. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework,
we first determine what concept the claim is “directed to.” See Alice, 573
U.S. at 219 (“On their face, the claims before us are drawn to the concept of
intermediated settlement, i.e., the use of a third party to mitigate settlement
risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010) (“Claims 1 and 4
in petitioners’ application explain the basic concept of hedging, or protecting
against risk.”).
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
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(1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267–68 (1853))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Court held that “a claim drawn to subject matter otherwise statutory does not
become nonstatutory simply because it uses a mathematical formula.”
Diehr, 450 U.S. at 187; see also id. at 191 (“We view respondents’ claims as
nothing more than a process for molding rubber products and not as an
attempt to patent a mathematical formula.”). Having said that, the Supreme
Court also indicated that a claim “seeking patent protection for that formula
in the abstract . . . is not accorded the protection of our patent laws, and this
principle cannot be circumvented by attempting to limit the use of the
formula to a particular technological environment.” Id. (citing Benson and
Flook); see, e.g., id. at 187 (“It is now commonplace that an application of a
law of nature or mathematical formula to a known structure or process may
well be deserving of patent protection.”).
If the claim is “directed to” an abstract idea, we turn to the second
step of the Alice and Mayo framework, where “we must examine 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.” Alice, 573 U.S. at 221 (quotation marks omitted).
“A claim that recites an abstract idea must include ‘additional features’ to
ensure ‘that the [claim] is more than a drafting effort designed to
monopolize the [abstract idea].’” Id. (quoting Mayo, 566 U.S. at 77).
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“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
that abstract idea into a patent-eligible invention.” Id.
B. USPTO § 101 Guidance
The U. S. Patent and Trademark Office (USPTO) published revised
guidance on the application of § 101. USPTO’s January 7, 2019
Memorandum, 2019 Revised Patent Subject Matter Eligibility Guidance, 84
Fed. Reg. 50 (“2019 Memorandum”).3 Under that guidance, we first look to
whether the claim recites:
(1) (see 2019 Memorandum Step 2A – Prong One) any judicial
exceptions, including certain groupings of abstract ideas (i.e.,
mathematical concepts, certain methods of organizing human activity
such as a fundamental economic practice, or mental processes); and
(2) (see 2019 Memorandum Step 2A – Prong Two) additional
elements that integrate the judicial exception into a practical
application (see MPEP § 2106.05(a)–(c), (e)–(h)).4

3 The Office issued a further memorandum on October 17, 2019 (the
“October 2019 Memorandum”) clarifying guidance of the January 2019
Memorandum in response to received public comments. See https://
www.uspto.gov/sites/default/files/documents/peg_oct_2019_update.pdf.
Moreover, “[a]ll USPTO personnel are, as a matter of internal agency
management, expected to follow the guidance.” January 2019 Memorandum
at 51; see also October 2019 Memorandum at 1.
4 This evaluation is performed by (a) identifying whether there are any
additional elements recited in the claim beyond the judicial exception, and
(b) evaluating those additional elements individually and in combination to
determine whether the claim as a whole integrates the exception into a
practical application. See 2019 Memorandum - Section III(A)(2).
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Only if a claim (1) recites a judicial exception and (2) does not
integrate that exception into a practical application, do we then look to
whether the claim:
(3) adds a specific limitation beyond the judicial exception that is not
“well-understood, routine, conventional” in the field (see MPEP
§ 2106.05(d)); or
(4) simply appends well-understood, routine, conventional activities
previously known to the industry, specified at a high level of
generality, to the judicial exception.
See 2019 Memorandum Step 2B.

Because there is no single definition of an “abstract idea” under Alice
step 1, the PTO has recently synthesized, for purposes of clarity,
predictability, and consistency, key concepts identified by the courts as
abstract ideas to explain that the “abstract idea” exception includes the
following three groupings:
1. Mathematical concepts—mathematical relationships,
mathematical formulas or equations, mathematical
calculations;
2. Mental processes— concepts performed in the human mind
(including an observation, evaluation, judgment, opinion);
and
3. Certain methods of organizing human activity—fundamental
economic principles or practices (including hedging,
insurance, mitigating risk); commercial or legal interactions
(including agreements in the form of contracts; legal
obligations; advertising, marketing or sales activities or
behaviors; business relations); managing personal behavior
or relationships or interactions between people (including
social activities, teaching, and following rules or
instructions).
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See 2019 Memorandum, 84 Fed. Reg. at 52.
According to the 2019 Memorandum, “[c]laims that do not recite
[subject] matter that falls within these enumerated groupings of abstract
ideas should not be treated as reciting abstract ideas,” except in rare
circumstances. Even if the claims recite any one of these three groupings of
abstract ideas, these claims are still not “directed to” a judicial exception
(abstract idea), and thus are patent eligible, if “the claim as a whole
integrates the recited judicial exception into a practical application of that
exception.” See 2019 Memorandum, 84 Fed. Reg. at 53.
For example, limitations that are indicative of integration into a
practical application include:
1. Improvements to the functioning of a computer, or to any
other technology or technical field — see MPEP
§ 2106.05(a);
2. Applying the judicial exception with, or by use of, a
particular machine — see MPEP § 2106.05(b);
3. Effecting a transformation or reduction of a particular
article to a different state or thing — see MPEP
§ 2106.05(c); and
4. Applying or using the judicial exception in some other
meaningful way beyond generally linking the use of the
judicial exception to a particular technological
environment, such that the claim as a whole is more than
a drafting effort designed to monopolize the exception
— see MPEP § 2106.05(e).
In contrast, limitations that are not indicative of integration into a
practical application include:
1. Adding the words “apply it” (or an equivalent) with the
judicial exception, or merely include instructions to
implement an abstract idea on a computer, or merely uses a
computer as a tool to perform an abstract idea — see MPEP
§ 2106.05(f);
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2. Adding insignificant extra-solution activity to the judicial
exception — see MPEP § 2106.05(g); and
3. Generally linking the use of the judicial exception to a
particular technological environment or field of use — see
MPEP § 2106.05(h).
See 2019 Memorandum, 84 Fed. Reg. at 54–55 (“Prong Two”).
2019 Memorandum, Step 2A, Prong One5
The Judicial Exception
Under the 2019 Memorandum, we begin our analysis by first
considering whether the claims recite any judicial exceptions, including
certain groupings of abstract ideas, in particular: (a) mathematical concepts,
(b) mental steps, and (c) certain methods of organizing human activities.
The Examiner concludes:
In the instant application, the data processing system of
claims 1 and 24 – 43 recite a series of steps of “calculating,
using the at least one processor, an intraday change in value of
the at least one derivative product; and determining, using the at
least one processor, during trading time at an interval of a
predetermined number of seconds, an intraday indicative value
of the ETF by combining the obtained intraday current value of
the at least one equity or fixed-income security, the daily
accumulated change in value of the at least one derivative
product, and the intraday change in value of the at least one
derivative product”, which is a fundamental economic
principle of exchanging trading funds. An improvement on the
abstract ideal does not make it less abstract. There must be an
improvement in the technology.
Final Act. 3–4 (emphasis added).

5 Throughout this opinion, we give the claim limitations the broadest
reasonable interpretation consistent with the Specification. See In re Morris,
127 F.3d 1048, 1054 (Fed. Cir. 1997).

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We apply the Director’s 2019 Memorandum de novo. In Table One
below, we identify in italics the specific claim limitations that we conclude
recite an abstract idea. We also identify in bold the additional (non-abstract)
claim elements that we find are generic computer components:
TABLE ONE
Independent Claim 1 2019 Memorandum
[a] A computer-implemented
method, comprising:6

[b] obtaining, using at least
one processor, (i) an intraday
current value of at least one
of an equity or fixed-income
security invested by an
exchange-traded fund (ETF)
and (ii) a daily accumulated
change in value of at least
one derivative product held
by the ETF, the daily
accumulated change
comprising a loss or gain in
the value of the at least one
derivative product over a
previous trading day;
Obtaining (i) an intraday current
value of at least one of an equity or
fixed-income security invested by an
exchange-traded fund (ETF) and (ii)
a daily accumulated change in value
of at least one derivative product
held by the ETF is insignificant
extra-solution activity (i.e., data
gathering). 2019 Memorandum, 55
n.31; see also MPEP § 2106.05(g).

[c] calculating, using the at
least one processor, an
intraday change in value of
the at least one derivative
product;
Abstract Idea: Calculating an
intraday change in value of the at
least one derivative product involves
mathematical relationships and
requires a mathematical calculation

6 A method falls under the statutory subject matter class of a process. See 35
U.S.C. § 101 (“Whoever 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.”).

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Independent Claim 1 2019 Memorandum
and could be performed alternatively
as a mental step.
[d] determining, using the at
least one processor, during
trading time at an interval of
a predetermined number of
seconds, an intraday
indicative value of the ETF
by combining the obtained
intraday current value of the
at least one equity or fixed-
income security, the daily
accumulated change in value
of the at least one derivative
product, and the intraday
change in value of the at least
one derivative product.
Abstract Idea: Determining during
trading time at an interval of a
predetermined number of seconds,
an intraday indicative value of the
ETF is a fundamental economic
practice including mitigating risk,
commercial interactions, and sales
activities that could also be
performed alternatively as a mental
step.

Abstract Idea
After considering representative method claim 1 as a whole, we
conclude that the italicized steps of claim 1 shown in Table One recite
methods of organizing human activity. We conclude that “calculating . . . an
intraday change in value of the at least one derivative product” and
“determining . . . an intraday indicative value of the ETF” both recite a
fundamental economic practice, which includes mitigating risk, commercial
interactions, and sales activities. See 2019 Memorandum, 84 Fed. Reg. at
52. Further “calculating an intraday change in value of the at least one
derivative product” involves mathematical relationships and requires a
mathematical calculation. We conclude both of these italicized steps could
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also be performed alternatively as mental processes.7 See 2019
Memorandum, 84 Fed. Reg. at 52. See also “Intellectual Ventures I LLC v.
Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016) (‘[W]ith the
exception of generic computer-implemented steps, there is nothing in the
claims themselves that foreclose them from being performed by a human,
mentally or with pen and paper.’).” 2019 Memorandum, 84 Fed. Reg. at 52
n.14.
“An abstract idea can generally be described at different levels of
abstraction.” Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir.
2016). Merely combining several abstract ideas does not render the
combination any less abstract. See RecogniCorp, LLC v. Nintendo Co., 855
F.3d 1322, 1327 (Fed. Cir. 2017) (“Adding one abstract idea (math) to
another abstract idea . . . does not render the claim non-abstract.”);
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093–94 (Fed. Cir.

7 If a method can be performed by human thought alone, or by a human
using pen and paper, it is merely an abstract idea and is not patent eligible
under § 101. See CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d
1366, 1372–73 (Fed. Cir. 2011); “That purely mental processes can be
unpatentable, even when performed by a computer, was precisely the
holding of the Supreme Court in Gottschalk v. Benson.” CyberSource, 654
F.3d at 1375. See also Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d
1138, 1146–47 (Fed. Cir. 2016). Moreover, “[u]sing a computer to
accelerate an ineligible mental process does not make that process patent-
eligible.” Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (U.S.),
687 F.3d 1266, 1279 (Fed. Cir. 2012); see also OIP Techs., Inc. v.
Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (“[R]elying on a
computer to perform routine tasks more quickly or more accurately is
insufficient to render a claim patent eligible.”).

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2016) (determining the pending claims were directed to a combination of
abstract ideas).
For at least these reasons, we conclude claim 1 recites the specific
types of abstract ideas identified above in Table One.

Additional Limitations
As emphasized in bold in Table One, supra, we note the additional
non-abstract limitations, for example (claim 1): the computer and the at
least one processor. We further note the supporting exemplary, non-
limiting descriptions of generic computer components in the Specification,
for example:

Figure 7 illustrates the components of a generic
computing system connected to a general purpose electronic
network 10, such as a computer network. The computer
network can be a virtual private network or a public network,
such as the Internet. As shown in Figure 7, the computer
system 12 includes a central processing unit (CPU) 14
connected to a system memory 18.
Spec. ¶ 72 (emphasis added).
We emphasize that McRO, Inc. v. Bandai Namco Games Am. Inc.,
(837 F.3d 1299 (Fed. Cir. 2016)), guides: “[t]he abstract idea exception
prevents patenting a result where ‘it matters not by what process or
machinery the result is accomplished.’” 837 F.3d at 1312 (quoting O’Reilly
v. Morse, 56 U.S. 62, 113 (1854)) (emphasis added). See supra Table One.
Because we conclude all claims 1 and 24–43 on appeal recite an abstract
idea, as identified above, under Step 2A, Prong One, we proceed to Step 2A,
Prong Two.
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2019 Memorandum, Step 2A, Prong Two
Integration of the Judicial Exception into a Practical Application

Pursuant to the 2019 Memorandum, we consider whether there are
additional elements set forth in the claims that integrate the judicial
exception into a practical application. See 2019 Memorandum, 84 Fed. Reg.
at 54–55.
MPEP § 2106.05(a)
Improvements to the Functioning of a Computer or
to Any Other Technology or Technical Field

McRO
Appellant cites to McRO, and contends:
As in McRO, Appellant's claims employ a "specific
means or method" that “improve[s] computer-related
technology by allowing computer performance of a function not
previously performable by a computer.” Rather than merely
claiming “determining ... an intraday indicative value of the
ETF,” Appellant’s claims recite a particular way of doing so.
Specifically, the claims recite, for example, “determining,
using the at least one processor, during trading time at an
interval of a predetermined number of seconds, an intraday
indicative value of the ETF by combining the obtained
intraday current value of the at least one equity or fixed-income
security, the daily accumulated change in value of the at least
one derivative product, and the intraday change in value of the
at least one derivative product.”
That is, Appellant’s claims, like the claim in McRO,
focus on a “specific means or method” of achieving a desired
result or effect. Thus, like the claim in McRO, Appellant’s
claims are not “directed to” the asserted “abstract idea.”
Appeal Br. 19 (emphasis added in bold, underline in original).
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Appellant’s reliance on McRO is misplaced. For example, McRO’s
’576 patent (U.S. Patent No. 6,307,576) describes computer software for
matching audio to a 3D animated mouth movement to provide lip-synced
animation. McRO’s claims contain: (i) specific limitations regarding a set of
rules that “define[] a morph weight set stream as a function of phoneme
sequence and times associated with said phoneme sequence” to enable
computers to produce “‘accurate and realistic lip synchronization and facial
expressions in animated characters’” (McRO, 837 F.3d at 1313) and, when
viewed as a whole, are directed to, (ii) a “technological improvement over
the existing, manual 3–D animation techniques” that uses “limited rules in a
process specifically designed to achieve an improved technological result in
conventional industry practice.” McRO, 837 F.3d at 1316.
In contrast to McRO, we conclude “calculating . . . an intraday change
in value of the at least one derivative product” and “determining . . . an
intraday indicative value of the ETF” (claim 1) does not improve the
computer functionality or “improve computer-related technology by
allowing computer performance of a function not previously performable by
a computer,” as Appellant argues. App. Br. 19.
To the extent a computer may perform faster than a person performing
the steps of the method as a mental process, our reviewing court has held
that speed and accuracy increases stemming from the ordinary capabilities of
a general purpose computer “do[] not materially alter the patent eligibility of
the claimed subject matter.” Bancorp Servs., L.L.C. v. Sun Life Assurance
Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012). Additionally, “a
claim for a new abstract idea is still an abstract idea.” Synopsys, Inc. v.
Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016). “[U]nder the
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Mayo/Alice framework, a claim directed to a newly discovered law of nature
(or natural phenomenon or abstract idea) cannot rely on the novelty of that
discovery for the inventive concept necessary for patent eligibility . . . .”
Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1376 (Fed. Cir. 2016)
(citations omitted).

Enfish
Appellant also cites to Enfish in support, and restates essentially the
same argument addressed above with respect to McRO: “the claims here are
‘not directed to the use of conventional or generic technology’ but constitute
an improvement to the functioning of a computer and a specific
implementation of a solution to a problem in the software arts, and thus
significantly more than any abstract idea.” Appeal Br. 22, (emphasis added).
We note the Enfish court held that the subject claims “are not directed
to an abstract idea within the meaning of Alice. Rather, they are directed to
a specific improvement to the way computers operate, embodied in the self-
referential table.” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336
(Fed. Cir. 2016) (emphasis added).
As found by the Enfish court, the structural requirements of prior
databases required a programmer to predefine a structure and subsequent
data entry had to conform to that structure. See Enfish, 822 F.3d at 1337.
The court found the improved database of the Enfish invention “does not
require a programmer to preconfigure a structure to which a user must adapt
data entry.” Id.
Thus, the self-referential database table considered by the court in
Enfish was found to be a specific type of data structure that was designed to
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improve the way a computer stores and retrieves data in memory. Enfish,
822 F.3d at 1339. Because the Enfish court found the claimed self-
referential database table improved the way the computer stored and
retrieved data, the court concluded the Enfish claims were not directed to an
abstract idea, and thus ended the analysis at Alice step one. Id. at 1336.
Here, Appellant’s computer-implemented method claims and
apparatus claims are silent regarding any mention of a database. Moreover,
Appellant has not shown that any of the features of the claims on appeal
improve the way the recited generic computer and at least one processor
store and retrieve data, in a manner analogous to that found by the court in
Enfish. See Appellant’s independent claims 1, 32, 42, and 43. There is no
mention of a database storage device that includes a self-referential database
table of the type found by the Enfish court to improve the way a computer
stores and retrieves data in memory.
Therefore, on this record, we are not persuaded that Appellant’s
claimed invention improves the recited generic computer and “at least one
processor” functionality or efficiency, or otherwise changes the way the
claimed generic computer components function, at least in the sense
contemplated by the Federal Circuit in Enfish. See claim 1.

DDR Holdings
Appellant further urges that the claimed invention provides an
improvement to computer functionality based upon the Federal Circuit’s
holding in DDR:
just as the claims in DDR Holdings recited a specific means —
a composite web page — of achieving a result — retaining
website visitors, the claims at issue recite a specific means—
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“determining . . . an intraday indicative value of the ETF by
combining the obtained intraday current value of the at least
one equity or fixed-income security, the daily accumulated
change in value of the at least one derivative product, and the
intraday change in value of the at least one derivative
product”— of achieving a result— calculating.

Appeal Br. 22–23 (citing DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d
1245, 1257 (Fed. Cir. 2014)).
We do not agree with Appellant that this is a case involving eligible
subject matter, as was the case in DDR. See Appeal Br. 22–23.
In DDR, instead of a computer network operating in its normal,
expected manner by sending a website visitor to a third-party website via a
clicked advertisement, the claimed invention generated and directed the
visitor to a hybrid page that presented: (1) product information from the
third party, and (2) the visual “look and feel” elements from the host
website, thus retaining the visitor at the original website. DDR, 773 F.3d at
1258–59. Given this particular Internet-based solution, the court held that
the claimed invention did not merely use the Internet to perform a business
practice known from the pre-Internet world, but rather was necessarily
rooted in computer technology to overcome a problem specifically arising in
computer networks. Id. at 1257.
That is not the case here. Unlike DDR, Appellant’s method of
“calculating . . . an intraday change in value of the at least one derivative
product” and “determining . . . an intraday indicative value of the ETF” is
not claimed as solving or otherwise addressing a problem specifically arising
in computer networks. Claim 1. Appellant’s claimed invention recites no
language that pertains to improving the “computer” or the “at least one
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processor,” as recited in claim 1, or any (unclaimed) network. (emphasis
added).
Moreover, the “‘mere automation of manual processes using generic
computers’ . . . ‘does not constitute a patentable improvement in computer
technology,’” Trading Techs. Int’l v. IBG LLC, 921 F.3d 1378, 1384 (Fed.
Cir. 2019) (quoting Credit Acceptance Corp. v. Westlake Servs., 859 F.3d
1044, 1055 (Fed. Cir. 2017).
To the extent that Appellant has invented an improved method of
“determining . . . an intraday indicative value of the ETF” (claim 1), we
again emphasize that an improved abstract idea is still an abstract idea. See
Mayo, 566 U.S. at 90; Synopsys, 839 F.3d at 1151. Therefore, it is our view
that Appellant’s claimed invention is not rooted in computer technology in
the sense contemplated by the court in DDR, in which the claimed invention
solved a challenge particular to the Internet.
As detailed above in Table One, the claim 1 method of “calculating
. . . an intraday change in value of the at least one derivative product” and
“determining . . . an intraday indicative value of the ETF” (claim 1) is a
fundamental economic practice that could be performed alternatively as
mental steps.
Moreover, as set forth in MPEP § 2106.05(a):
To show that the involvement of a computer assists in
improving the technology, the claims must recite the details
regarding how a computer aids the method, the extent to which
the computer aids the method, or the significance of a computer
to the performance of the method. Merely adding generic
computer components to perform the method is not sufficient.
Thus, the claim must include more than mere instructions to
perform the method on a generic component or machinery to
qualify as an improvement to an existing technology.
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(Emphasis added).
Here, Appellant has not sufficiently explained how the recited
“computer” and “at least one processor” of claim 1 include more than mere
instructions to perform the recited steps to qualify as an improvement to an
existing technology.
Accordingly, on this record, we conclude independent claims 1, 32,
42, and 43, and associated dependent claims, do not recite an improvement
to the functionality of a computer or other technology or technical field. See
MPEP § 2106.05(a).
Appellant advances no arguments that any of the method claims on
appeal are tied to a particular machine, or transform an article to a different
state or thing. See MPEP § 2106.05(c). Nor does Appellant advance further
substantive, persuasive arguments as to any particular “meaningful” claim
limitations, such as those of the types addressed under MPEP § 2106.05(e),
that impose meaningful limits on the judicial exception.8
MPEP § 2106.05(f)
Merely including instructions to implement
an abstract idea on a computer, or
Merely using a computer as a tool
to perform an abstract idea

We conclude Appellant’s claimed invention merely implements the
abstract idea using instructions executed on generic computer components,

8 See 2019 Memorandum, 84 Fed. Reg. 55, citing MPEP § 2106.05(e):
“[A]pply[ing] or us[ing] the judicial exception in some other meaningful
way beyond generally linking the use of the judicial exception to a particular
technological environment, such that the claim as a whole is more than a
drafting effort designed to monopolize the exception.” (emphasis added).
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as depicted in bold type in Table One, and as supported in our reproduction
of the Specification, paragraph 72, supra. Thus, we conclude Appellant’s
claims merely use a programmed computer as a tool to perform an abstract
idea.

MPEP § 2106.05(g)
Adding insignificant extra-solution activity
to the judicial exception

As mapped in the right column of Table One, supra, we conclude that
representative independent claim 1 recites extra or post-solution activities
that courts have determined to be insufficient to transform judicially
excepted subject matter into a patent-eligible application. See MPEP
§ 2106.05(g); 84 Fed. Reg. at 55 n.31.

MPEP § 2106.05(h)
Generally linking the use of the judicial exception to a particular
technological environment or field of use

The Supreme Court guides: “the prohibition against patenting
abstract ideas ‘cannot be circumvented by attempting to limit the use of the
formula to a particular technological environment’ or [by] adding
‘insignificant postsolution activity.’” Bilski, 561 U.S. at 610–12, (quoting
Diehr, 450 U.S. at 191–92).
Appellant argues that because the claims on appeal “do not threaten to
monopolize or pre-empt any asserted ‘abstract’ system or method, the claims
are not directed to an abstract idea as asserted in the Office Action.” Appeal
Br. 17 ¶ 2.
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Our reviewing court provides applicable guidance: “While
preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility.” Ariosa
Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
Nor do claims 1 and 24–43 on appeal present any other issues as set
forth in the 2019 Memorandum regarding a determination of whether the
additional generic elements integrate the judicial exception into a practical
application. See 2019 Memorandum, 84 Fed. Reg. at 55.
Thus, under Step 2A, Prong Two (MPEP §§ 2106.05(a)–(c) and (e)–
(h)), we conclude claims 1 and 24–43 do not integrate the judicial exception
into a practical application. Therefore, we proceed to Step 2B, The Inventive
Concept.
The Inventive Concept – Step 2B
Under the 2019 Memorandum, only if a claim: (1) recites a judicial
exception, and (2) does not integrate that exception into a practical
application, do we then look to whether the claim adds a specific limitation
beyond the judicial exception that is not “well-understood, routine,
conventional” in the field (see MPEP § 2106.05(d)); or, simply appends
well-understood, routine, conventional activities previously known to the
industry, specified at a high level of generality, to the judicial exception.
Appellant contends:
Appellant’s claims are also similar to those of BASCOM and
Amdocs II in that, like those of BASCOM and Amdocs II, they
do not describe a mere abstract concept, or a concept similar to
those found by the courts to be abstract. Rather, as in BASCOM,
Appellant’s claims similarly recite a “technology-based
solution,” utilizing processors with enhanced computational
capability that improves efficiency and flexibility over
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conventional systems when high speed computation is not
available. In particular, Appellant’s claims recite methods
including, inter alia, “obtaining . . . a daily accumulated
change in value of at least one derivative product held by the
ETF,” “calculating ... an intraday change,” and “determining ...
an intraday indicative value of the ETF ....” Operations
performed by a computer to determine the intraday indicative
value is not an abstract idea or a human activity. Thus, the
claims do not simply involve automating a human activity, they
involve technical functions that differ from normal human
activity.
Appeal Br. 20.
BASCOM
The Federal Circuit held in BASCOM that the claimed Internet content
filtering, which featured an implementation “versatile enough that it could
be adapted to many different users’ preferences while also installed remotely
in a single location,” expressed an inventive concept in “the non-
conventional and non-generic arrangement of known, conventional pieces.”
BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341,
1350 (Fed. Cir. 2016).
Here, Appellant has not persuasively shown an unconventional, non-
generic arrangement regarding the non-abstract limitations of generic
computer components in any of the claims on appeal. See 2019 Revised
Guidance, 84 Fed. Reg. at 52.
Therefore, Appellant’s claims do not involve any improvements to
another technology, technical field, or improvements to the functioning of
the computer or network, as was seen by the court in BASCOM. Instead, we
conclude Appellant’s claims merely invoke generic computer components as
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a tool in which the instructions executing on the computer apply the judicial
exception.
We also find unpersuasive Appellant’s arguments that analogize the
claims on appeal to the subject claims considered by the court in Amdocs
(Israel) Limited v. Openet Telecom, Inc., 841 F.3d 1288 (2016) (Amdocs II).
Appeal Br. 20.
In Amdocs, the Federal Circuit held that claim 1 of the patent at issue
is also like the claims in BASCOM because even though the
system in the ’065 patent relies upon some arguably generic
limitations, when all limitations are considered individually and
as an ordered combination, they provide an inventive concept
through the use of distributed architecture. This is similar to the
design in BASCOM which permitted the invention to have a
filtering tool with the benefits of a filter on a local computer
and the benefits of a filter on an ISP server. The benefits in
BASCOM were possible because of customizable filtering
features at specific locations remote from the user. Similarly,
the benefits of the ’065 patent’s claim 1 are possible because of
the distributed, remote enhancement that produced an
unconventional result—reduced data flows and the possibility
of smaller databases. This arrangement is not so broadly
described to cause preemption concerns. Instead, it is narrowly
circumscribed to the particular system outlined. As in
BASCOM, this is a technical improvement over prior art
technologies and served to improve the performance of the
system itself.
Amdocs, 841 F.3d at 1302 (emphasis added).
As noted above, the claims on appeal are silent regarding any mention
of a database. Therefore, there is no indication that any of Appellant’s
claims 1 and 24–43 provides unconventional results produced by a
distributed, remote enhancement that reduces data flows and allows for the
possibility of smaller databases, as was the case in Amdocs.
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Reply Brief
We note the Reply Brief was filed on Feb. 28, 2019, after the issuance
of the 2019 Memorandum (Jan. 2019). Although Appellant advances timely
arguments under the Director’s 2019 Memorandum in the Reply Brief, we
do not agree with Appellant’s contentions.
In the Reply Brief, Appellant urges: “Here, the pending claims recite
apparatuses and methods rooted in technology, and thus do not fall within
the three groupings of abstract ideas specified in the 2019 Guidance,
namely, mathematical concepts, certain methods of organizing human
activity, and mental processes.” Reply Br. 4 (emphasis added).
However, we disagree for the reasons fully addressed supra regarding
our analysis under Step 2A, Prong One. We also find Appellant’s additional
argument unavailing:
Neither the Final Office Action nor the Examiner's Answer
identifies the specific limitation(s) in the claim under
examination that the Examiner believes recites an
abstract idea, as required by the 2019 guidance. Instead, the
Final Office Action quotes a vast portion of the language of
independent claim 1 wholesale, arguing that it represents a
fundamental economic principle. See, e.g., Final Office Action,
pp. 3-4.
Id. (emphasis omitted).
We find Appellant’s argument is not supported by the record, because
as noted above, the Examiner concludes that all claims 1 and 24–43
describe:
In the instant application, the data processing system of claims
1 and 24 – 43 recite a series of steps of “calculating, using the
at least one processor, an intraday change in value of the at least
one derivative product; and determining, using the at
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least one processor, during trading time at an interval of a
predetermined number of seconds, an intraday indicative value
of the ETF by combining the obtained intraday current value of
the at least one equity or fixed-income security, the daily
accumulated change in value of the at least one derivative
product, and the intraday change in value of the at least one
derivative product”, which is a fundamental economic
principle of exchanging trading funds. An improvement on the
abstract ideal does not make it less abstract. There must be an
improvement in the technology.
Final Act. 3–4 (emphasis added).
Further, regarding the use of the recited generic computer components
identified above in Table One, the Supreme Court has held that “the mere
recitation of a generic computer cannot transform a patent-ineligible abstract
idea into a patent-eligible invention.” Alice, 573 U.S. at 223. Our reviewing
court provides additional guidance: See FairWarning, 839 F.3d at 1096
(“[T]he use of generic computer elements like a microprocessor or user
interface do not alone transform an otherwise abstract idea into patent-
eligible subject matter.”); OIP Techs, 788 F.3d at 1363 (claims reciting, inter
alia, sending messages over a network, gathering statistics, using a
computerized system to automatically determine an estimated outcome, and
presenting offers to potential customers found to merely recite “‘well-
understood, routine conventional activit[ies],’ either by requiring
conventional computer activities or routine data-gathering steps”).
This reasoning is applicable here. Therefore, on the record before us,
Appellant has not shown that the claims on appeal add a specific limitation
beyond the judicial exception that is not well-understood, routine, and
conventional, when the claim limitations are considered both individually
and as an ordered combination. See MPEP § 2106.05(d).
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CONCLUSION
In light of the foregoing, we conclude, under the 2019 Memorandum,
that each of Appellant’s claims 1 and 24–43 considered as a whole, is
directed to a patent-ineligible abstract idea that is not integrated into a
practical application, and does not include an inventive concept.

DECISION SUMMARY

FINALITY AND RESPONSE
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv). See 37
C.F.R. § 41.50(f).
AFFIRMED

Claims
Rejected
35 U.S.C. § Reference(s)Basis Affirmed Reversed
1, 24–43 101 Eligibility 1, 24–43