Alicia Suminski et al.Download PDFPatent Trials and Appeals BoardNov 4, 201914542726 - (D) (P.T.A.B. Nov. 4, 2019) Copy Citation 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. 14/542,726 11/17/2014 Alicia Suminski NXT-14-1070CIP-CON 4207 35811 7590 11/04/2019 IP GROUP OF DLA PIPER LLP (US) ONE LIBERTY PLACE 1650 MARKET ST, SUITE 5000 PHILADELPHIA, PA 19103 EXAMINER KAZIMI, HANI M ART UNIT PAPER NUMBER 3691 NOTIFICATION DATE DELIVERY MODE 11/04/2019 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): pto.phil@us.dlapiper.com PTOL-90A (Rev. 04/07) UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ Ex parte ALICIA SUMINSKI and ANAIS FABIENNE CHRISTIANE DONY ___________ Appeal 2018-004120 Application 14/542,726 Technology Center 3600 ____________ Before JASON V. MORGAN, ERIC B. CHEN, and PHILLIP A. BENNETT, Administrative Patent Judges. CHEN, Administrative Patent Judge. DECISION ON APPEAL Appeal 2018-004120 Application 14/542,726 2 STATEMENT OF THE CASE Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the Examiner’s decision to reject claims 1–18. We have jurisdiction under 35 U.S.C. § 6(b). We AFFIRM. CLAIMED SUBJECT MATTER The claims are directed to auctioning mechanisms for dark order block trading. (Abstract.) Claim 1, reproduced below, is illustrative of the claimed subject matter: 1. A computer-implemented method of controlling an auction, said method comprising: [i] monitoring, by a programmed computer of an electronic trading platform, activity in a market; [ii] determining, by the programmed computer, whether a predetermined level of liquidity is available in the market based on the monitored activity; [iii] automatically creating the auction, by the programmed computer, having a minimum fill size when it is determined that the predetermined level of liquidity is available; [iv] transmitting, by the programed computer, a notification of the auction to a plurality of market participants; 1 We use the word “Appellant” to refer to “Applicant” as defined in 37 C.F.R. § 1.42(a). Appellant identifies the real party in interest as NYSE Euronext Holdings LLC. (App. Br. 1.) Appeal 2018-004120 Application 14/542,726 3 [v] creating, by the programmed computer, an order book for the auction based on firm limit orders received from the plurality of market participants; [vi] identifying, by the programmed computer, a reference price for conducting the auction, the reference price calculated as a midpoint of bid and ask prices in the market; [vii] determining, by the programmed computer, whether each firm limit order is eligible or ineligible to be filled based on a comparison with the reference price; [viii] filling, by the programmed computer, qualifying orders received from among the plurality of market participants based on the reference price, said qualifying orders comprising each firm limit order determined to be eligible to be filled; and [ix] rejecting, by the programmed computer, one or more remaining orders received from among the plurality of market participants that are determined to be ineligible to be filled. REJECTION Claims 1–18 stand rejected under 35 U.S.C. § 101 as directed to patent-ineligible subject matter. Claim 1–18 stand provisionally rejected under the judicially created doctrine of obviousness-type double patenting as being unpatentable over claim 1–18 of co-pending U.S. Application No. 14/191,765.2 2 Appellant does not present any arguments with respect to the rejection of claims 1–18 under the judicially created doctrine of obviousness-type double patenting. (App. Br. 18.) Thus, any such arguments are deemed to be waived and the rejection is summarily affirmed. Appeal 2018-004120 Application 14/542,726 4 OPINION We are unpersuaded by Appellant’s arguments (App. Br. 6–13; see also Reply Br. 3–5) that independent claim 1 is directed to patent-eligible subject matter under 35 U.S.C. § 101. The Examiner determined that “[c]laim 1 . . . is directed to an abstract idea of conducting an auction.” (Non-Final Act. 4.) In particular, the Examiner determined that “[t]he concept of conducting an auction . . . is similar to the kind of ‘organizing human activity’ at issue in Alice Corp.” (id.) and “the abstract idea of conducting an auction is similar to the abstract idea of creating a contractual relationship (buySAFE)” (id. at 4–5). Moreover, the Examiner determined that “the claim does not amount to an improvement to the functioning of a computer itself; and the claim does not move beyond a general link of the use of an abstract idea to a particular technological environment” (Final Act. 5), such that “[t]he processor is a general purpose computer processor (see paras [0021–0022] of the specification) that performs general purpose functions” (id. at 5). We agree with the Examiner’s determinations and ultimate conclusion that the claims are directed to patent-ineligible subject matter. 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 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 Supreme Court’s two-step framework, described in Mayo Appeal 2018-004120 Application 14/542,726 5 and Alice. Id. 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 (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 (1854))); 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 Supreme 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 176; 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 Appeal 2018-004120 Application 14/542,726 6 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. at 191 (citing Benson and Flook); see also, 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 (citation 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). “[M]erely requir[ing] generic computer implementation[] fail[s] to transform that abstract idea into a patent-eligible invention.” Id. The PTO recently published revised guidance on the application of § 101. USPTO’s 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50 (Jan. 7, 2019); see also USPTO, October 2019 Update: Subject Matter Eligibility, 84 Fed. Reg. 55942 (Oct. 17, 2019). Under that guidance, we first look to whether the claim recites: (1) 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 Appeal 2018-004120 Application 14/542,726 7 (2) additional elements that integrate the judicial exception into a practical application (see MPEP § 2106.05(a)–(c), (e)–(h) (9th ed. 2019)). 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 are 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 84 Fed. Reg. 56. Are the claims at issue directed to a patent-ineligible concept? Step One Claim 1 is a computer implemented method claim, which falls within the “process” category of 35 U.S.C. § 101. Likewise, claim 17 is a computer system claim, which falls within the “manufacture” category of 35 U.S.C. § 101, and claim 18 is a computer-readable storage medium claim, which also falls within the “manufacture” category of 35 U.S.C. § 101. Therefore, claims 1, 17, and 18 fall within one of the four statutory categories of patentable subject matter identified by 35 U.S.C. §101. Although claims 1, 17, and 18 fall within the statutory categories, we must still determine whether the claims are directed to a judicial exception, namely an abstract idea. See Alice, 573 U.S. at 216. Thus, we must determine whether the claims recite a judicial exception and whether the exception is integrated into a practical application. See 84 Fed. Reg. at 52– Appeal 2018-004120 Application 14/542,726 8 55. If a claim recite a judicial exception without integrating the judicial exception into a practical application, the claim is directed to a judicial exception under the first step of the Alice/Mayo test. See id. Step 2A, Prong One Independent claim 1 is a method claim, and includes the following limitations: “[i] monitoring . . . activity in a market” and “[ii] determining . . . whether a predetermined level of liquidity is available in the market based on the monitored activity.” Such limitations of claim 1 recite certain methods of organizing human activity, such as fundamental economic practices. See e.g., Alice, 573 U.S. at 219–20 (a “fundamental economic practice” is an abstract idea). In particular, such fundamental economic practices include monitoring activity at an auction market (i.e., a stock exchange), for example, market liquidity (i.e., buying or selling an asset without causing a drastic change in the asset’s price). Moreover, the preamble of claim 1 recites a “method of controlling an auction” and includes the following limitations: “[iii] creating the auction . . . having a minimum fill size when it is determined that the predetermined level of liquidity is available,” “[iv] transmitting . . . a notification of the auction to a plurality of market participants,” “[v] creating . . . an order book for the auction based on firm limit orders received from the plurality of market participants,” “[vi] identifying . . . a reference price for conducting the auction, the reference price calculated as a midpoint of bid and ask prices in the market,” “[vii] determining . . . whether each firm limit order is eligible or ineligible to be filled based on a comparison with the reference price,” “[viii] filling . . . qualifying orders received from among the plurality Appeal 2018-004120 Application 14/542,726 9 of market participants based on the reference price, said qualifying orders comprising each firm limit order determined to be eligible to be filled,” and “[ix] rejecting . . . one or more remaining orders received from among the plurality of market participants that are determined to be ineligible to be filled.” These limitations of claim 1 also recite a patent-ineligible abstract idea of certain methods of organizing human activity, such as fundamental economic practices, Alice, 573 U.S. at 224, or agreements in the form of contracts, buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014). In particular, an auction, a process in which multiple parties submit competitive bids to buy or sell an asset, can either be considered: (i) a fundamental economic practice; or (ii) an agreement in the form of a contract. Accordingly, claim 1 recites a judicial exception. Claims 17 and 18 recite limitations similar to those discussed with respect to claim 1. Thus, claims 17 and 18 also recite a judicial exception. Step 2A, Prong Two Because claim 1 recites a judicial exception, we next determine if the claims recite additional elements that integrate the judicial exception into a practical application. Claim 1 recites: “[i] monitoring, by a programmed computer of an electronic trading platform, activity in a market,” “[ii] determining, by the programmed computer, whether a predetermined level of liquidity is available,” “[iii] automatically creating the auction, by the programmed computer,” “[iv] transmitting, by the programed computer, a notification of the auction,” [v] creating, by the programmed computer, an order book for Appeal 2018-004120 Application 14/542,726 10 the auction,” “[vi] identifying, by the programmed computer, a reference price for conducting the auction,” [vii] determining, by the programmed computer, whether each firm limit order is eligible or ineligible to be filled,” “[viii] filling, by the programmed computer, qualifying orders received,” and “[ix] rejecting, by the programmed computer, one or more remaining orders received” (emphases added). The recited computer hardware, including “a programmed computer” is merely a tool for performing the abstract idea. See Affinity Labs v. DirecTV, 838 F.3d 1253, 1262 (Fed. Cir. 2016) (“[T]he claims are directed not to an improvement in cellular telephones but simply to the use of cellular telephones as tools in the aid of a process focused on an abstract idea.”). Accordingly, claim 1 does not recite additional elements that integrate the judicial exception into a practical application. Claims 17 and 18 recite similar limitations. Is there something else in the claims that ensures that they are directed to significantly more than a patent ineligible concept? Step 2B Because claims 1, 17, and 18 are directed to a judicial exception, we next determine, according to Alice, whether these claims recite an element, or combination of elements, that is enough to ensure that the claim is directed to significantly more than a judicial exception. Claim 1 is a method claim, which includes “a programmed computer.” Likewise, computer system claim 17 includes “a memory component” and “a processing component,” and computer-readable storage medium claim 18 includes “a processing device.” Appeal 2018-004120 Application 14/542,726 11 With respect to the claimed hardware components, of “a programmed computer,” “a memory component,” and “a processing component” (or “a processing device”), Appellant’s Specification discloses the following: The present disclosure also relate to an apparatus for performing the operations herein. This apparatus may be specially constructed for the required purposes or it may comprise a general purpose computer selectively activated or reconfigured by a computer program stored in the computer. Such a computer program may be stored in a computer readable storage medium, such as, but not limited to, any type of disk including floppy disks, optical disks, CD-ROMs and magnetic-optical disks, read-only memories (ROMs), random access memories (RAMs), EPROMs, EEPROMs, magnetic or optical cards, flash memory devices including universal serial bus (USB) storage devices (e.g., USB key devices) or any type of media suitable for storing electronic instructions, each of which may be coupled to a computer system bus. (Spec. ¶ 21 (emphases added).) Various general purpose systems may be used with programs in accordance with the teachings herein or it may prove convenient to construct more specialized apparatus to perform the required method steps. The required structure for a variety of these systems will be apparent from the description above. (Id. ¶ 22 (emphasis added).) FIG. 9 illustrates a diagrammatic representation of a machine in the exemplary form of a computer system 900 within which a set of instructions, for causing the machine to perform any one or more of the methodologies discussed herein, may be executed. . . . The machine may be a personal computer (PC), a tablet PC, a set-top box (STB), a personal digital assistant (PDA), a cellular telephone, a web appliance, a server, a network router, switch or bridge, or any machine Appeal 2018-004120 Application 14/542,726 12 capable of executing a set of instructions (sequential or otherwise) that specify actions to be taken by that machine. (Id. ¶ 72 (emphasis added).) The exemplary computer system 900 may be comprised of a processing device 902, a main memory 904 (e.g., read-only memory (ROM), flash memory, dynamic random access memory (DRAM) (such as synchronous DRAM (SDRAM) or Rambus DRAM (RDRAM), etc.), a static memory 906 (e.g., flash memory, static random access memory (SRAM), etc.), and a data storage device 918, which communicate with each other via a bus 930. (Id. ¶ 73 (emphasis added).) Processing device 902 represents one or more general- purpose processing devices such as a microprocessor, central processing unit, or the like. (Id. ¶ 74.) The generalized functional terms by which the computer components are described reasonably indicate that Appellant’s Specification discloses: (i) conventional computer system 900 (e.g., a personal computer (PC), a tablet PC, a set-top box (STB), a personal digital assistant (PDA), or a cellular telephone); (ii) conventional main memory 904 (e.g., ROM, flash memory, DRAM, or a static memory); and (iii) conventional processing device 902 (e.g., microprocessor or central processing unit). In view of Appellant’s Specification, the claimed hardware components, including “a programmed computer,” “a memory component,” and “a processing component” reasonably may be determined to be generic, purely conventional computer elements. Thus, claims 1, 17, and 18 do no more than require generic computer elements to perform generic computer functions, rather than improve computer capabilities. Appeal 2018-004120 Application 14/542,726 13 First, Appellant argues that “the claims have never been rejected based on any prior art under § 102 and/or § 103” and “the Examiner’s position appears to be that the claims are certainly novel and non-obvious, but are not patent eligible because the claims are allegedly directed to ‘conducting an auction’ where the ‘claimed limitations amount to mere instructions to implement the abstract idea on a computer.’” (App. Br. 6 (emphasis omitted); see also id. at 9.) However, Appellant improperly conflates the requirements for eligible subject matter with the independent requirements of novelty and non-obviousness. “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.” Diehr, 450 U.S. at 188– 89. Second, Appellant argues “[l]ike the claims found patent-eligible in McRO[3], the Appellant’s claims include a completely novel set of rules defining an automatic auction control mechanism that provides a technical improvement to computer-related technology (i.e., electronic financial trading systems).” (App. Br. 6.) In particular, Appellant argues the following: Because the participants are not provided advanced notice of the auction initiation, the claimed invention provides a means to thwart the information leakage and system-gaming experienced by conventional electronic systems in this art. Moreover, the Appellant’s automatic auction control mechanism also includes specific rules to reject orders that are ineligible to be filled, thus preventing the price shifts that 3 McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016). Appeal 2018-004120 Application 14/542,726 14 destabilize and overload the components of the electronic financial trading systems. (Id. at 8.) However, Appellant has not adequately explained why the claim “purport[s] to improve the functioning of the computer itself” or “any other technology or technical field.” Alice, 573 U.S. at 225. In particular, Appellant has not explained why “[a] means to thwart the information leakage,” which is a finance problem associated with dark liquidity, improves the function of a computer or other technology. Moreover, the perceived benefit of “preventing the price shifts that destabilize and overload the components” in rejecting orders is derived solely from the capabilities of a general-purpose computer. FairWarning IP, LLC v. Iatric Sys., 839 F.3d 1089, 1095 (Fed. Cir. 2016). Third, Appellant argues that: Appellant’s claimed invention [similar to BASCOM] includes a novel set of rules and functions that automatically initiate an auction, leverage market activity, and reject ineligible orders from auction participants, thereby improving upon prior art processes which are prone to information leakage and gaming. Additionally, like the claims in Bascom, the Appellant’s claimed invention also provides a benefit to end users, namely, the ability to maintain the integrity of dark order block trades, avoid significant market impact and prevent the degradation of liquidity quality. (App. Br. 11.) However, other than a conclusory statement that the claims provide a “benefit to end users” with a citation to BASCOM, Appellant does not adequately explain how this case pertains to the claimed invention. In particular, Appellant has not provided an adequate explanation as to how the hardware components recited in claim 1 are arranged in a non-conventional and non-generic manner. See BASCOM Global Internet Servs. v. AT&T Mobility LLC, 827 F.3d 1341, 1350 (“an inventive concept can be found in Appeal 2018-004120 Application 14/542,726 15 the non-conventional and non-generic arrangement of known, conventional pieces.”). Fourth, Appellant argues “[t]his process [as claimed] is also an improvement upon prior art systems because ineligible orders no longer have to be stored and/or processed, thereby reducing the storage requirements of the electronic financial trading system,” with a general citation to DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014). (App. Br. 12.) Accordingly, Appellant argues “this results in fewer fills being electronically processed by the electronic financial trading system, thereby reducing the computational processing required by the system to fill orders, and reducing operational requirements of the electronic financial trading system.” (App. Br. 12; see also Reply Br. 4–5.) However, the perceived benefit of “reducing operational requirements of the electronic financial trading system” in rejecting orders is derived solely from the capabilities of a general-purpose computer. FairWarning IP, 839 F.3d at 1095. Fifth, Appellant argues the following: The instant claims are similar to Diehr insofar as the claims monitor market activity and use the monitored market data to automatically control an auction (create, transmit a notification, identify a reference price, determine eligible orders, reject ineligible orders). . . . In particular, because the claims leverage market activity data to automatically control an auction, the claimed invention protects the system against information leakage, artificial price movements and loss of system integrity and stability. (App. Br. 13 (emphases omitted).) However, other than summarizing the claim and providing a conclusory statement that the claim “protects the system against information leakage, artificial price movements and loss of Appeal 2018-004120 Application 14/542,726 16 system integrity and stability” with a citation to Diehr, Appellant does not adequately explain how this case pertains to the claimed invention. Last, Appellant argues “the Examiner has plainly failed to provide any facts or evidence in support for the assertion that that claims simply use ‘well understood, routine and conventional functions of a processor’ to ‘conduct an auction and prevent participant’s influence.’” (Reply Br. 3 (emphases omitted).) Contrary to Appellant’s arguments, pursuant to Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018), the Examiner cited to Appellant’s Specification in support of a finding that the additional elements were “well-understood, routine, and conventional.” Moreover, regardless of the sufficiency of the Examiner’s analysis, Appellant’s Specification provides adequate basis to support the conclusion that claims 1, 17, and 18 do not recite significantly more than the abstract idea. Thus, we agree with the Examiner that claims 1, 17, and 18 are directed towards patent-ineligible subject matter. Accordingly, we sustain the rejection of independent claims 1, 17, and 18 under 35 U.S.C. § 101. Claims 2–16 depend from independent claim 1, and Appellant has not presented any additional substantive arguments with respect to these claims. We sustain the rejection of claims 2–16 under 35 U.S.C. § 101 for the same reasons discussed with respect to independent claim 1. CONCLUSION The Examiner’s decision rejecting claims 1–18 under 35 U.S.C. § 101 is affirmed. Appeal 2018-004120 Application 14/542,726 17 The Examiner’s decision rejecting claims 1–18 under the judicially created doctrine of obviousness-type double patenting is affirmed. DECISION In summary: Claims Rejected 35 USC § Basis Affirmed Reversed 1–18 101 Utility 1–18 1–18 Provisional Obviousness- type Double Patenting 1–18 Overall Outcome 1–18 TIME PERIOD FOR 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). AFFIRMED Copy with citationCopy as parenthetical citation