By Peter Reap, J.D., LL.M.
Additionally, the PTAB correctly found the patent to be eligible for covered business method review.
Claims 1–22 of Trading Technologies International’s (TT’s) U.S. Patent No. 7,783,556 failed the Supreme Court’s Alice test for patent eligibility under 35 U.S.C. §101 because they are directed to the abstract idea of providing a trader with additional financial information and do not provide an inventive concept, the U.S. Court of Appeals for the Federal Circuit has decided. Thus, a ruling of the Patent Trial and Appeal Board was affirmed. In addition, the Board correctly determined that TT’s patent is a covered business method patent pursuant to the Transitional Program for Covered Business Method Patents (CBM review), according to the court (Trading Technologies International, Inc. v. IBG LLC, April 30, 2019, Moore, K.).
The ’556 patent "relates to displaying market information on a screen." The specification states that the invention works "particularly well" with the trading screen shown in Figure 2. Figure 2 is a prior art trading screen disclosed in U.S. Patent No. 6,772,132, which displays bids and offers in association with price values along an axis. The specification discloses "generating values that are derivatives of price and then displaying these values along an axis on a screen." The claims focus on a particular price derivative, profit and loss (P&L).
IBG LLC and Interactive Brokers LLC (collectively, the Petitioners) petitioned for CBM review of claims 1–22 of the ’556 patent. The Board instituted CBM review and issued a final written decision holding that the patent meets the criteria to be eligible for CBM review and the claims are ineligible under 35 U.S.C. § 101.
CBM eligibility. Pursuant to §18(a)(1)(E) of the America Invents Act, the Board may only institute CBM review for a patent that is a CBM patent. A CBM patent is "a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions." The only issue of CBM eligibility that TT contested on appeal was whether its patent is for technological inventions.
The Board relied on claim 1 to determine that the ’556 patent is directed to a covered business method patent. It determined that claim 1 does not recite a technological feature that is novel and unobvious over the prior art because the patent indicates that the claimed technological features are known technologies. It determined that claim 1 does not recite a technical solution to a technical problem because the problem disclosed in the patent is that traders need additional information on a trading screen to effectively analyze the market, which is business problem, not a technical one.
The Federal Circuit agreed with the Board that the claims do not solve a technical problem using a technical solution. The problem that the patent seeks to solve is providing "highly relevant information" that is "not normally provided in an electronic exchange’s data feed nor displayed by a trading screen" to a trader, the court observed. The "highly relevant information" in the context of the claims is the P&L associated with making a trade at a specific price. Claim 1 essentially takes the prior art trading screen of Figure 2, calculates P&L for "a range of price levels," and displays the P&L values along an axis.
Merely providing a trader with new or different information in an existing trading screen is not a technical solution to a technical problem, the court decided. Instead, it focuses on improving the trader, not the functioning of the computer. Therefore, the Board’s reasoning that the ’556 patent is a CBM patent was not arbitrary and capricious.
Patent eligibility. "[L]aws of nature, natural phenomena, and abstract ideas are not patent eligible." Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014). In Alice, the Supreme Court established a two-step framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible concepts.
At Alice step one, the court must "determine whether the claims at issue are directed to a patent-ineligible concept." Id. at 218. Here, the claims considered in light of the specification make clear that "the focus of the claimed advance over the prior art" is providing a trader with additional financial information to facilitate market trades, an abstract idea, the Federal Circuit determined. The only difference between the trading screen of Figure 2 and the one claimed is that the axis in Figure 2 displays price values, and the claimed axis displays P&L values. Information, whether displayed in the form of price values or P&L values, is abstract, the court explained. Likewise, the claimed steps for calculating the P&L values—"identifying a long or short position taken by a user" and "computing by the computing device a plurality of values" representing "a profit or loss if the long or short position is closed at a price level"—were nothing more than the automation of manual processes using generic computers. Such does not constitute a patentable improvement in computer technology, the court held.
TT argued that the claims are not directed to an abstract idea because they provide a particular graphical user interface that improves usability, visualization, and efficiency. However, the claims are focused on providing information to traders in a way that helps them process information more quickly, not on improving computers or technology, according to the Federal Circuit. The claims here failed because arranging information along an axis does not improve the functioning of the computer, make it operate more efficiently, or solve any technological problem, the court said. Thus, the claims are directed to an abstract idea.
At Alice step two, the court must "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." Id. at 218. Here, the elements of the claims, considered individually and as an ordered combination, failed to recite an inventive concept. The claimed trading screen simply takes the prior art trading screen of Figure 2 and adds P&L values along the axis. Thus, claims 1–22 are ineligible under § 101, the court determined.
Constitutionality of CBM review. TT argued the Board’s decision should be vacated because CBM review is unconstitutional. In a total of four sentences in its opening brief, TT raised challenges based on a right to a jury under the Seventh Amendment, separation of powers under Article III, the Due Process Clause, and the Taking Clause. Such a conclusory assertion with no analysis was insufficient to preserve the issue for appeal, the appellate court opined, and the Federal Circuit declined to address TT’s constitutional challenges.
The case is No. 17-2323.
Attorneys: Jennifer Kurcz (Baker & Hostetler LLP) for Trading Technologies International, Inc. Richard M. Bemben (Sterne Kessler Goldstein & Fox, PLLC) for IBG LLC and Interactive Brokers LLC.
Companies: Trading Technologies International, Inc.; IBG LLC; Interactive Brokers LLC
MainStory: TopStory Patent TechnologyInternet FedCirNews
Interested in submitting an article?
Submit your information to us today!Learn More
IP Law Daily: Breaking legal news at your fingertips
Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on intellectual property legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.