Trials@uspto.gov
`571-272-7822
`
`Paper 29
`Date: March 16, 2022
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`GAIN CAPITAL HOLDINGS, INC.,
`Petitioner,
`
`v.
`
`OANDA CORPORATION,
`Patent Owner.
`
`CBM2020-00023
`Patent 7,496,534 B2
`
`
`
`
`
`
`
`
`
`Before SALLY C. MEDLEY, JUSTIN T. ARBES, and
`SUSAN L. C. MITCHELL, Administrative Patent Judges.
`
`ARBES, Administrative Patent Judge.
`
`JUDGMENT
`Final Written Decision
`Determining All Challenged Claims Unpatentable
`Denying Patent Owner’s Motion to Amend
`35 U.S.C. § 328(a)
`
`I.
`
`INTRODUCTION
`
`A. Background and Summary
`
`Petitioner GAIN Capital Holdings, Inc. filed a Petition (Paper 2,
`
`“Pet.”) requesting a covered business method (“CBM”) patent review of
`
`claims 1–12 of U.S. Patent No. 7,496,534 B2 (Ex. 1001, “the ’534 patent”)
`
`pursuant to 35 U.S.C. § 321(a). Patent Owner OANDA Corporation filed a
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`CBM2020-00023
`Patent 7,496,534 B2
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`Preliminary Response (Paper 8) pursuant to 35 U.S.C. § 323. On March 18,
`
`2021, we instituted a covered business method patent review of the sole
`
`challenge raised in the Petition. Paper 10 (“Decision on Institution” or
`
`“Dec. on Inst.”). Patent Owner subsequently filed a Patent Owner Response
`
`(Paper 16, “PO Resp.”), and Petitioner filed a Reply (Paper 18, “Reply”).
`
`Patent Owner did not file a Sur-Reply.
`
`Patent Owner also filed a Motion to Amend (Paper 17) and requested
`
`that we provide preliminary guidance concerning the Motion in accordance
`
`with the Board’s pilot program concerning motion to amend practice and
`
`procedures. Petitioner filed an Opposition (Paper 19). We issued
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`Preliminary Guidance (Paper 20) determining, based on the record at the
`
`time, that Patent Owner had not shown a reasonable likelihood that it
`
`satisfied the statutory and regulatory requirements associated with filing a
`
`motion to amend, and Petitioner had shown a reasonable likelihood that
`
`proposed substitute claim 13 is unpatentable. Patent Owner then filed a
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`Revised Motion to Amend (Paper 21, “Mot.”), and Petitioner filed an
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`Opposition (Paper 23, “Opp.”). Patent Owner did not file a Reply to the
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`Opposition. An oral hearing was held on January 14, 2022, and a transcript
`
`of the hearing is included in the record (Paper 28). Petitioner presented
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`arguments during the hearing, and Patent Owner rested on its papers. Id. at
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`4:15–16:19.
`
`We have jurisdiction under 35 U.S.C. § 6. This Final Written
`
`Decision is issued pursuant to 35 U.S.C. § 328(a). For the reasons that
`
`follow, we determine that Petitioner has shown by a preponderance of the
`
`evidence that claims 1–12 are unpatentable. We also determine that
`
`Petitioner has met its burden to show by a preponderance of the evidence
`
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`CBM2020-00023
`Patent 7,496,534 B2
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`that proposed substitute claim 13 is unpatentable. Accordingly, we deny
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`Patent Owner’s Revised Motion to Amend.
`
`
`
`B. Related Matters
`
`Petitioner states that the ’534 patent is related to two other patents,
`
`U.S. Patent Nos. 8,392,311 B2 and 7,146,336 B2, asserted in OANDA Corp.
`
`v. GAIN Capital Holdings, Inc., No. 2:20-cv-5784 (D.N.J.), and challenged,
`
`respectively, in Cases CBM2020-00021 and CBM2020-00022 where
`
`institution of covered business method patent review was denied. See
`
`Pet. 2–3. Although the ’534 patent is not asserted in the district court case,
`
`Patent Owner charged Petitioner with infringement of the ’534 patent in
`
`two letters dated October 25, 2018, and March 5, 2020. Id. at 17 (citing
`
`Exs. 1033, 1035).
`
`
`
`C. The ’534 Patent
`
`The ’534 patent discloses “methods of using real-time trading models
`
`to trade on foreign exchange markets.” Ex. 1001, col. 1, ll. 13–15. “An
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`exchange rate is the price at which one national currency can be exchanged
`
`for another. The most common currency value notion is the bilateral
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`exchange rate (or simply the foreign exchange (FX) rate) quoted by an
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`FX trader or reported by a quote vendor.” Id. at col. 1, ll. 19–23. The
`
`’534 patent explains that “[a]lthough the FX market operates continuously,
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`individual traders or institutions generally participate in this market for only
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`part of each day. There [was] thus a need for trading models that take . . .
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`local business hours and holidays into account.” Id. at col. 1, ll. 42–45.
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`There was also “a need for trading models that offer real-time analysis of
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`FX-rate movements and generate explicit trading recommendations” and
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`“a further need for models that follow the FX market and imitate it as
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`closely as possible.” Id. at col. 1, ll. 46–48, 63–64. According to the
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`’534 patent, a trading model should go “beyond predicting a price change:
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`it should decide whether a certain action has to be taken” based on “the
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`specific risk profile [of the model’s user], the trading history [of the user],
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`and institutional constraints such as business hours.” Id. at col. 1, ll. 50–60.
`
`The ’534 patent explains that
`
`[a]t the most general level, a preferred trading model
`comprises a set of indicator computations combined with a
`collection of rules. . . . [I]ndicator computations provide an
`analysis of past price movements. The indicators are mapped
`into actual trading positions by applying various rules. For
`instance, a model may enter a long position if an indicator
`exceeds a certain threshold. Other rules determine whether a
`deal may be made at all, and the timing of a recommendation.
`Thus, indicator computations are based on price history, and a
`collection of rules determines the applicability of the indicator
`computations to the generation of trading recommendations.
`
`Id. at col. 3, ll. 38–50. An indicator “provides a measure of whether a new
`
`position should be entered.” Id. at col. 6, ll. 4–5. “In the simplest form, an
`
`indicator crossing a predefined threshold may cause a rule to be activated
`
`that in turn causes such a change in position to occur. Thus the relative
`
`values of the indicators signify internal trading recommendations that are
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`subsequently refined through the application of various rules.” Id. at col. 6,
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`ll. 8–13. An example of a “rule” is a prohibition on new deals when “price
`
`movements since the previous deal are too small in either direction.” Id. at
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`col. 6, ll. 13–19.
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`
`
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`CBM2020-00023
`Patent 7,496,534 B2
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`Figure 1 of the ’534 patent is reproduced below.
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`
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`Figure 1 depicts “a data flow and structure diagram of preferred trading
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`model software.” Id. at col. 3, ll. 15–16. Price collector 110 “collects price
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`quotes from data feeds received over a computer network”; price filter 120
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`“receives the collected price quotes and filters them in real-time, storing
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`filtered price quotes in a price database 130”; gearing calculator 140
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`“specifies the recommended gearing (exposure size), based on indicator
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`computations that depend on the received and filtered price quote data,
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`trading rules that depend on past dealing history, current position, and other
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`quantities such as current unrealized return of an open position”; deal
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`acceptor 160 “validates the recommendations of the gearing calculator 140”
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`based on specified conditions; stop-loss detector 150 checks for whether a
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`“stop-loss price” has been reached; opportunity catcher 170 “searches for a
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`realistic price at which to execute the deal,” “executes a simulated deal,” and
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`“provides signals to a human dealer”; and book-keeper 180 calculates
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`“trading model statistics.” Id. at col. 3, l. 51–col. 4, 14. As shown in
`
`Figure 1, the trading model operates in a “data-flow paradigm” where
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`reception of a new price from a commercial quote-vendor or a timer causes
`
`a defined event, which triggers the next action in sequence. Id. at col. 9,
`
`l. 62–col. 10, l. 16. “Software of a preferred embodiment [of the invention]
`
`is not constructed as a single huge program with all the required
`
`functionality residing in that one entity,” but rather “as a collection of
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`separate programs” each having a primary function (i.e., “a distributed
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`system [where] the various programs run in parallel on several computers”).
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`Id. at col. 5, l. 19–26. Doing so provides “several benefits,” such as
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`increased reliability. Id. at col. 5, ll. 33–49.
`
`The gearing calculator is “the heart of a preferred trading model,” as it
`
`provides the “intelligence and the ability to capitalize on movements in the
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`FX markets.” Id. at col. 5, ll. 50–53. The gearing calculator analyzes “a set
`
`of indicators that are produced from the input price data” according to
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`“trading rules that are functions of the past dealing history, the current
`
`position, and other quantities (e.g., the current unrealized return of an open
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`position)” to “determine whether . . . a change of position” should be made.
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`Id. at col. 5, l. 65–col. 6, l. 8. “The gearing calculator re-evaluates its
`
`position every time a new price tick is received from the quote-vendors.” Id.
`
`at col. 5, ll. 61–62.
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`Patent 7,496,534 B2
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`The ’534 patent explains that trading models based on “24 hours of
`
`business time (and therefore characterized by a specific hour of the day)” are
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`inadequate because they are not “high-frequency data models” and only
`
`provide “trading recommendations at the same hour of each day.” Id. at
`
`col. 23, ll. 55–62, col. 25, ll. 1–4. As a solution to this problem, the
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`’534 patent describes using “models at different hours” as “sub-models that
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`are ingredients of a final model” (e.g., taking into account 24 sub-models,
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`one for each hour of the day). Id. at col. 25, ll. 4–16.
`
`Figure 7 of the ’534 patent is reproduced below.
`
`Figure 7 depicts a trading model with two input indicators and where “the
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`combination of different sub-models at the end leads to the final gearing
`
`
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`7
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`CBM2020-00023
`Patent 7,496,534 B2
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`recommendation of the gearing calculator.” Id. at col. 32, ll. 63–67.
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`“Sub-models can be seen as complete trading models, but the final goal is to
`
`combine sub-models of different time horizons into one main model. The
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`different sub-models share the same structure and algorithm, but the time
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`horizons (and some dependent parameters) are different.” Id. at col. 33,
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`ll. 12–16. As shown in Figure 7, the final gearing of one sub-model is
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`combined with those of other sub-models to “provide the final, discrete
`
`gearing recommendation of the model.” Id. at col. 33, ll. 44–49. “The
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`trading model works in real-time, with tick-by-tick intra-day data,” and thus
`
`can “deal with the strong intra-daily seasonality of volatility.” Id. at col. 33,
`
`ll. 50–55.
`
`
`
`D. Illustrative Claim
`
`Challenged claim 1 of the ’534 patent is independent. Claims 2–12
`
`depend, directly or indirectly, from claim 1. Claim 1 recites:
`
`1. A method of trading assets on a market, comprising the
`steps of:
`
`(a) receiving price data for an asset over one or more
`computer networks;
`
`(b) receiving current system position information;
`
`(c) storing said received asset price data and said current
`system position information in a computer-readable medium;
`
`(d) calculating trade recommendation information from
`each of a plurality of trading sub-models; wherein each
`sub-model is based on a different time of day, said calculation
`based on said received asset price data;
`
`(e) calculating a trade recommendation regarding said
`asset based on said trade recommendation information from each
`of said trading sub-models.
`
`
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`Patent 7,496,534 B2
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`E. Evidence
`
`Petitioner filed a declaration from Bernard S. Donefer (Exhibit 1004)
`
`with its Petition and subsequently filed two additional declarations from
`
`Mr. Donefer (Exhibits 1038 and 1046) during trial. Patent Owner filed
`
`declarations from Ivan Zatkovich (Exhibit 2002) and Michael Stumm, Ph.D.
`
`(Exhibit 2005), with its Preliminary Response. However, Patent Owner
`
`states in its Response that it “affirmatively withdraws the testimony” of both
`
`witnesses. PO Resp. 2. Thus, we do not consider these declarations for
`
`purposes of this Decision.
`
`
`
`F. Asserted Ground
`
`Petitioner challenges claims 1–12 of the ’534 patent on the ground
`
`that the claims do not recite patent-eligible subject matter under 35 U.S.C.
`
`§ 101. Pet. 3, 30–54.
`
`
`
`II. ANALYSIS
`
`A. Level of Ordinary Skill in the Art
`
`Petitioner asserts that a person of ordinary skill in the art at the time of
`
`the ’534 patent (March 2001) would have, “through education or practical
`
`experience, obtained a working knowledge of electronic trading systems
`
`from both the computer science and finance perspectives,” including (1) “the
`
`equivalent of a bachelor’s degree in computer science, information systems,
`
`or a related field, and at least two years of work experience developing
`
`electronic trading systems,” and (2) “the equivalent of a bachelor’s degree in
`
`finance, economics, or a related field, and . . . knowledge of computer
`
`systems” for electronic trading. Pet. 11–12 (citing Ex. 1004 ¶ 23). Patent
`
`Owner agrees with Petitioner’s proposed definition. PO Resp. 3. Based on
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`CBM2020-00023
`Patent 7,496,534 B2
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`the full trial record, including our review of the ’534 patent and the types of
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`problems and solutions described in the ’534 patent and cited reference
`
`materials, we agree with Petitioner’s proposed definition of the level of
`
`ordinary skill in the art and apply it for purposes of this Decision. See, e.g.,
`
`Ex. 1001, col. 1, l. 19–col. 2, l. 5 (describing in the “Background” section of
`
`the ’534 patent various aspects of FX trading models and an alleged need for
`
`such models to “be based on data from continuous collection and treatment
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`of FX quotes by market makers around the clock”).
`
`
`
`B. Claim Interpretation
`
`We interpret the challenged claims
`
`using the same claim construction standard that would be used to
`construe the claim in a civil action under 35 U.S.C. 282(b),
`including construing the claim in accordance with the ordinary
`and customary meaning of such claim as understood by one of
`ordinary skill in the art and the prosecution history pertaining to
`the patent.
`
`37 C.F.R. § 42.300(b) (2019). “In determining the meaning of [a] disputed
`
`claim limitation, we look principally to the intrinsic evidence of record,
`
`examining the claim language itself, the written description, and the
`
`prosecution history, if in evidence.” DePuy Spine, Inc. v. Medtronic
`
`Sofamor Danek, Inc., 469 F.3d 1005, 1014 (Fed. Cir. 2006). Claim terms
`
`are given their plain and ordinary meaning as would be understood by a
`
`person of ordinary skill in the art at the time of the invention and in the
`
`context of the entire patent disclosure. Phillips v. AWH Corp., 415 F.3d
`
`1303, 1313 (Fed. Cir. 2005) (en banc). “There are only two exceptions to
`
`this general rule: 1) when a patentee sets out a definition and acts as his own
`
`lexicographer, or 2) when the patentee disavows the full scope of a claim
`
`10
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`term either in the specification or during prosecution.” Thorner v. Sony
`
`Comput. Entm’t Am. LLC, 669 F.3d 1362, 1365 (Fed. Cir. 2012).
`
`Petitioner and Patent Owner both argue that the terms of the
`
`challenged claims should be given their “ordinary and customary meaning,”
`
`but do not propose express interpretations for any terms. See Pet. 16;
`
`PO Resp. 4. In the Decision on Institution, we noted that during prosecution
`
`of the ’534 patent, the applicants stated that the term “current system
`
`position” in claim 1 “has a well-defined meaning to those skilled in the art”
`
`and means “the current stake in a particular security or market held by a
`
`system or organization.” Dec. on Inst. 10; see Pet. 7–8; Ex. 1002, 105–106,
`
`112 (citing a 2003 finance dictionary definition of “position” as an
`
`“investor’s stake in a particular security or market”). We determined that
`
`the definition was consistent with the Specification of the ’534 patent and
`
`evidence of record at the time. Dec. on Inst. 10. Neither party disputes that
`
`interpretation in its papers filed after institution. Upon review of the parties’
`
`arguments during trial and the evidence as a whole, we interpret “current
`
`system position” in claim 1 to mean “the current stake in a particular
`
`security or market held by a system or organization,” and conclude that no
`
`interpretation of any other term is necessary to decide the issues presented
`
`during trial. See Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co.,
`
`868 F.3d 1013, 1017 (Fed. Cir. 2017) (“Because we need only construe
`
`terms ‘that are in controversy, and only to the extent necessary to resolve the
`
`controversy,’ we need not construe [a particular claim limitation] where the
`
`construction is not ‘material to the . . . dispute.’” (citation omitted)).
`
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`C. Eligibility for Covered Business Method Patent Review
`
`Section 18 of the Leahy-Smith America Invents Act, Pub. L.
`
`No. 112-29, 125 Stat. 284 (2011) (“AIA”), provides for the creation of a
`
`transitional program for reviewing covered business method patents, and
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`limits reviews to persons or their privies that have been sued for
`
`infringement or charged with infringement of a “covered business method
`
`patent,” which does not include patents for “technological inventions.”1
`
`AIA §§ 18(a)(1)(B), 18(d)(1); see 37 C.F.R. § 42.302. In the Decision on
`
`Institution, we determined that Petitioner had shown that it was charged with
`
`infringement and the ’534 patent is a “covered business method patent.”
`
`Dec. on Inst. 11–18. Patent Owner does not dispute either point in its
`
`Response; therefore, any such arguments are waived. See Novartis AG v.
`
`Torrent Pharms. Ltd., 853 F.3d 1316, 1330 (Fed. Cir. 2017); In re NuVasive,
`
`Inc., 842 F.3d 1376, 1380–81 (Fed. Cir. 2016); Paper 11, 8 (“Patent Owner
`
`is cautioned that any arguments not raised in the response may be deemed
`
`waived.”). We maintain and incorporate herein our previous analysis. See
`
`Dec. on Inst. 11–18.
`
`
`
`D. Constitutionality Arguments
`
`Patent Owner argues that “granting CBM review and invalidating
`
`some or all of the ’534 [p]atent would amount to an unconstitutional taking
`
`in violation of the Takings Clause of the Fifth Amendment” and “also
`
`violate the Due Process Clause by depriving [Patent Owner] of its property
`
`without due process of law.” PO Resp. 13–14. Patent Owner further argues
`
`
`1 Petitioner filed its Petition on September 15, 2020, prior to the expiration
`of the transitional program.
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`that “the Board should deny the Petition based on a lack of constitutional
`
`authority” because Administrative Patent Judges of the Board are “‘principal
`
`officers’ who require Presidential appointment and Senate confirmation.”
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`Id. at 15–17. We decline to consider Patent Owner’s constitutional
`
`challenges, as the issues have been addressed in Celgene Corp. v. Peter,
`
`931 F.3d 1342 (Fed. Cir. 2019), and United States v. Arthrex, Inc., 141 S.Ct.
`
`1970 (2021).
`
`
`
`E. Legal Standards
`
`1. Subject Matter Eligibility
`
`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
`
`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,
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`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
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`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.”).
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`Concepts determined to be abstract ideas, and thus patent-ineligible,
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`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
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`mental processes (Gottschalk v. Benson, 409 U.S. 63, 69 (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
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`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
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`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
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`protection of our patent laws, . . . and this principle cannot be circumvented
`
`by attempting to limit the use of the formula to a particular technological
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`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
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`elements of the claim to determine whether it contains an ‘inventive
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`concept’ sufficient to ‘transform’ the claimed abstract idea into a
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`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).
`
`“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
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`that abstract idea into a patent-eligible invention.” Id.
`
`The Office published revised guidance on the application of § 101.
`
`2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50
`
`(Jan. 7, 2019) (“Guidance”).2 Under the 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
`
`(2) additional elements that integrate the judicial exception into
`a practical application (see MPEP § 2106.05(a)–(c), (e)–(h)).
`
`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 Guidance, 84 Fed. Reg. at 56.
`
`
`2 We also have considered the October 2019 Patent Eligibility Guidance
`Update at https://www.uspto.gov/sites/default/files/documents/
`peg_oct_2019_update.pdf.
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`2. Obviousness
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`A claim is unpatentable for obviousness if, to one of ordinary skill in
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`the pertinent art, “the differences between the subject matter sought to be
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`patented and the prior art are such that the subject matter as a whole would
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`have been obvious at the time the invention was made.” KSR Int’l Co. v.
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`Teleflex Inc., 550 U.S. 398, 406 (2007) (quoting 35 U.S.C. § 103(a)
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`(2006)).3 The question of obviousness is resolved on the basis of underlying
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`factual determinations, including “the scope and content of the prior art”;
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`“differences between the prior art and the claims at issue”; and “the level of
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`ordinary skill in the pertinent art.” Graham v. John Deere Co., 383 U.S. 1,
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`17–18 (1966). Additionally, secondary considerations, such as “commercial
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`success, long felt but unsolved needs, failure of others, etc., might be utilized
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`to give light to the circumstances surrounding the origin of the subject
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`matter sought to be patented. As indicia of obviousness or nonobviousness,
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`these inquiries may have relevancy.” Id. When conducting an obviousness
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`analysis, we consider a prior art reference “not only for what it expressly
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`teaches, but also for what it fairly suggests.” Bradium Techs. LLC v. Iancu,
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`923 F.3d 1032, 1049 (Fed. Cir. 2019) (citation omitted).
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`A patent claim “is not proved obvious merely by demonstrating that
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`each of its elements was, independently, known in the prior art.” KSR,
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`550 U.S. at 418. An obviousness determination requires finding “both ‘that
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`a skilled artisan would have been motivated to combine the teachings of the
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`prior art references to achieve the claimed invention, and that the skilled
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`3 The AIA amended 35 U.S.C. §§ 102, 103, and 112. Because the
`challenged claims of the ’534 patent have an effective filing date before the
`effective dates of the applicable AIA amendments, we refer to the pre-AIA
`versions of 35 U.S.C. §§ 102, 103, and 112. See Ex. 1001, codes (22), (60).
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`artisan would have had a reasonable expectation of success in doing so.’”
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`Intelligent Bio-Sys., Inc. v. Illumina Cambridge Ltd., 821 F.3d 1359,
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`1367–68 (Fed. Cir. 2016) (citation omitted); see KSR, 550 U.S. at 418
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`(for an obviousness analysis, “it can be important to identify a reason that
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`would have prompted a person of ordinary skill in the relevant field to
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`combine the elements in the way the claimed new invention does”). Also,
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`“[t]hough less common, in appropriate circumstances, a patent can be
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`obvious in light of a single prior art reference if it would have been obvious
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`to modify that reference to arrive at the patented invention.” Arendi S.A.R.L.
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`v. Apple Inc., 832 F.3d 1355, 1361 (Fed. Cir. 2016).
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`“Although the KSR test is flexible, the Board ‘must still be careful not
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`to allow hindsight reconstruction of references . . . without any explanation
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`as to how or why the references would be combined to produce the claimed
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`invention.’” TriVascular, Inc. v. Samuels, 812 F.3d 1056, 1066 (Fed. Cir.
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`2016) (citation omitted). Further, an assertion of obviousness “cannot be
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`sustained by mere conclusory statements; instead, there must be some
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`articulated reasoning with some rational underpinning to support the legal
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`conclusion of obviousness.” KSR, 550 U.S. at 418 (quoting In re Kahn,
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`441 F.3d 977, 988 (Fed. Cir. 2006)); accord In re NuVasive, Inc., 842 F.3d
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`1376, 1383 (Fed. Cir. 2016) (stating that “conclusory statements” amount to
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`an “insufficient articulation[] of motivation to combine”; “instead, the
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`finding must be supported by a ‘reasoned explanation’” (citation omitted));
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`In re Magnum Oil Tools Int’l, Ltd., 829 F.3d 1364, 1380 (Fed. Cir. 2016)
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`(“To satisfy its burden of proving obviousness, a petitioner cannot employ
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`mere conclusory statements. The petitioner must instead articulate specific
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`reasoning, based on evidence of record, to support the legal conclusion of
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`obviousness.”).
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`F. Asserted Ground Based on 35 U.S.C. § 101
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`1. Claim 1
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`a) Step 1: Statutory Category
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`Petitioner challenges claim 1 on the ground that the claim fails to
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`recite patent-eligible subject matter under 35 U.S.C. § 101. Pet. 30–45.
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`We first determine “whether the claim is to a statutory category (Step 1),”
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`namely a process, machine, manufacture, or composition of matter.
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`Guidance, 84 Fed. Reg. at 53–54. Claim 1 of the ’534 patent recites a
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`“method,” which is a “process” that is statutory subject matter under
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`35 U.S.C § 101.
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`
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`b) Step 2A, Prong 1: Whether the Claim Recites an Abstract Idea
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`Under Step 2A, Prong 1 of the Guidance, we must determine whether
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`claim 1 recites limitations that fall within any of the recognized categories of
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`abstract ideas. The Guidance identifies certain groupings of abstract ideas
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`that have been recognized under the case law: mathematical concepts,
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`certain methods of organizing human activity, such as fundamental
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`economic principles or practices, and mental processes. Guidance, 84 Fed.
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`Reg. at 52. As part of this inquiry, we must examine the relevant limitations
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`in the context of the claim language as a whole. Alice, 573 U.S. at 218 n.3.
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`“The § 101 inquiry must focus on the language of the [a]sserted [c]laims
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`themselves.” Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1149
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`(Fed. Cir. 2016); Accenture Global Servs., GmbH v. Guidewire Software,
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`Inc., 728 F.3d 1336, 1345 (Fed. Cir. 2013) (“[T]he important inquiry for a
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`§ 101 analysis is to look to the claim.”).
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`Petitioner argues that claim 1 is directed to “time-based trade
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`analysis,” which is a “fundamental economic practice.” Pet. 31–32.
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`Petitioner addresses each of the limitations of claim 1 and explains how they
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`support Petitioner’s contention that the claim, as a whole, is directed to the
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`alleged abstract idea. Id. at 31–34. With respect to steps (a) and (b) of
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`“receiving price data for an asset” and “current system position
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`information,” and step (c) of “storing” the price data and current system
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`position information, Petitioner argues that “[g]athering and storing price
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`data and position information had long been a first step in market analysis,
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`since these are key inputs for analyzing markets and making trade
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`decisions.”4 Id. at 33. With respect to step (d) of “calculating trade
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`recommendation information . . . based on said received asset price data,”
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`Petitioner argues that the calculation and evaluation of indicators to make a
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`trading decision are a “standard part of technical analysis.”5 Id. Regarding
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`step (d)’s requirement that the calculation be from “each of a plurality of
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`sub-models” each based on a “different time of day,” Petitioner contends
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`that the use of sub-models is a “core function of time-based trade models.”
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`Id. at 33–34. Finally, with respect to step (e) of “calculating a trade
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`recommendation regarding said asset based on said trade recommendation
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`4 As explained further below in the context of Step 2A, Prong 2 and Step 2B
`of the Guidance, claim 1 recites that the price data is received over “one or
`more computer networks” and the price data and current system position
`information are stored in a “computer-readable medium.” See infra
`Sections II.F.1.c–d.
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`5 Mr. Donefer explains that there are two basic types of trade analysis.
`Fundamental analysis “estimates value and projects future prices by
`considering factors such as management, earnings, profits, and competition,”
`whereas technical analysis “typically analyzes past price histories,
`sometimes displayed as charts, to produce ‘indicators’ that are predictive of
`future market behavior.” Ex. 1004 ¶ 26 (citing Ex. 1011, 74). “Time-based
`analysis is central to technical analysis, and it is this type of analysis that the
`’534 patent describes.” Id. (citing Ex. 1001, code (57); Ex. 1010, 1).
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