Trials@uspto.gov
`571-272-7822
`
`Paper 10
`Date: March 18, 2021
`
`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.
`
`DECISION
`Granting Institution of Covered Business Method Patent Review
`35 U.S.C. § 324
`
`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
`Preliminary Response (Paper 8, “Prelim. Resp.”) pursuant to 35 U.S.C.
`
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`CBM2020-00023
`Patent 7,496,534 B2
`§ 323. Pursuant to 35 U.S.C. § 324(a), the Director may not authorize a
`covered business method patent review unless the information in the
`petition, if unrebutted, “would demonstrate that it is more likely than not that
`at least 1 of the claims challenged in the petition is unpatentable.” For the
`reasons that follow, we determine that Petitioner has made such a
`demonstration and institute a covered business method patent review as to
`claims 1–12 of the ’534 patent on the sole ground of unpatentability asserted
`in the Petition.
`
`
`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
`in Cases CBM2020-00021 and CBM2020-00022, respectively. 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
`exchange rate is the price at which one national currency can be exchanged
`for another. The most common currency value notion is the bilateral
`exchange rate (or simply the foreign exchange (FX) rate) quoted by an
`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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`Patent 7,496,534 B2
`individual traders or institutions generally participate in this market for only
`part of each day. There [was] thus a need for trading models that take local
`business hours and holidays into account.” Id. at col. 1, ll. 42–45. There
`was also “a need for trading models that offer real-time analysis of FX-rate
`movements and generate explicit trading recommendations” and “a further
`need for models that follow the FX market and imitate it as closely as
`possible.” Id. at col. 1, ll. 46–48, 63–64. According to the ’534 patent, a
`trading model should go “beyond predicting a price change: it should decide
`whether a certain action has to be taken” based on “the specific risk profile
`[of the model’s user], the trading history [of the user], 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
`subsequently refined through the application of various rules.” Id. at col. 6,
`ll. 8–13. An example of a “rule” is a prohibition on new deals when “price
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`Patent 7,496,534 B2
`movements since the previous deal are too small in either direction.” Id. at
`col. 6, ll. 13–19.
`Figure 1 of the ’534 patent is reproduced below.
`
`
`Figure 1 depicts “a data flow and structure diagram of preferred trading
`model software.” Id. at col. 3, ll. 15–16. Price collector 110 “collects price
`quotes from data feeds received over a computer network”; price filter 120
`“receives the collected price quotes and filters them in real-time, storing
`filtered price quotes in a price database 130”; gearing calculator 140
`“specifies the recommended gearing (exposure size), based on indicator
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`Patent 7,496,534 B2
`computations that depend on the received and filtered price quote data,
`trading rules that depend on past dealing history, current position, and other
`quantities such as current unrealized return of an open position”; deal
`acceptor 160 “validates the recommendations of the gearing calculator 140”
`based on specified conditions; stop-loss detector 150 checks for whether a
`“stop-loss price” has been reached; opportunity catcher 170 “searches for a
`realistic price at which to execute the deal,” “executes a simulated deal,” and
`“provides signals to a human dealer”; and book-keeper 180 calculates
`“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
`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
`separate programs” each having a primary function (i.e., “a distributed
`system [where] the various programs run in parallel on several computers”).
`Id. at col. 5, l. 19–26. Doing so provides “several benefits,” such as
`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
`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
`“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
`position)” to “determine whether . . . a change of position” should be made.
`Id. at col. 5, l. 65–col. 6, l. 8. “The gearing calculator re-evaluates its
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`Patent 7,496,534 B2
`position every time a new price tick is received from the quote-vendors.” Id.
`at col. 5, ll. 61–62.
`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
`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
`’534 patent describes using “models at different hours” as “sub-models that
`are ingredients of a final model” (e.g., taking into account 24 sub-models,
`one for each hour of the day). Id. at col. 25, ll. 4–16.
`Figure 7 of the ’534 patent is reproduced below.
`
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`Patent 7,496,534 B2
`Figure 7 depicts a trading model with two input indicators and where “the
`combination of different sub-models at the end leads to the final gearing
`recommendation of the gearing calculator.” Id. at col. 32, ll. 63–67.
`“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
`different sub-models share the same structure and algorithm, but the time
`horizons (and some dependent parameters) are different.” Id. at col. 33,
`ll. 12–16. As shown in Figure 7, the final gearing of one sub-model is
`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
`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;
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`Patent 7,496,534 B2
`(e) calculating a trade recommendation regarding said
`asset based on said trade recommendation information from each
`of said trading sub-models.
`
`
`E. Evidence
`Petitioner filed a declaration from Bernard S. Donefer (Exhibit 1004)
`with its Petition. Patent Owner filed declarations from Ivan Zatkovich
`(Exhibit 2002) and Michael Stumm, Ph.D. (Exhibit 2005), with its
`Preliminary Response.
`
`
`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 states that it agrees with Petitioner’s proposed definition for purposes
`of its Preliminary Response. Prelim. Resp. 11. Based on the current record,
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`including our review of the ’534 patent and the types of 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 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
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`Patent 7,496,534 B2
`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 argues that the terms of the challenged claims should be
`given their “ordinary and customary meaning,” but does not propose express
`interpretations for any terms. Pet. 16. Patent Owner also does not propose
`any interpretations, but disputes Petitioner’s view of whether steps (d) and
`(e) of claim 1 must be performed by a “computer” for purposes of covered
`business method patent review eligibility. Prelim. Resp. 11–13. As
`explained below, we conclude that the ’534 patent is eligible for covered
`business method patent review even if those steps must be performed by a
`computer. See infra Section II.C.2.
`We also note 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.” Ex. 1002,
`105–106 (citing a 2003 finance dictionary definition of “position” as an
`“investor’s stake in a particular security or market”). That definition appears
`to be consistent with the Specification of the ’534 patent and the evidence
`currently of record. Therefore, we adopt it for purposes of this Decision.
`No other claim terms require express interpretation at this time.1 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,’
`
`
`1 To the extent the parties disagree regarding the interpretation of any term
`of the challenged claims, the parties are encouraged to address the issue in
`their papers during trial.
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`Patent 7,496,534 B2
`we need not construe [a particular claim limitation] where the construction is
`not ‘material to the . . . dispute.’” (citation omitted)).
`
`
`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
`limits reviews to persons or their privies that have been sued for
`infringement or charged with infringement2 of a “covered business method
`patent,” which does not include patents for “technological inventions.”3
`AIA §§ 18(a)(1)(B), 18(d)(1); see 37 C.F.R. § 42.302. Petitioner bears the
`burden of demonstrating that the ’534 patent is a “covered business method
`patent.” See 37 C.F.R. § 42.304(a).
`
`
`
`2 Petitioner argues that it was charged with infringement via two letters from
`Patent Owner dated October 25, 2018, and March 5, 2020, alleging
`infringement of the ’534 patent and other patents by Petitioner. See Pet. 17;
`Ex. 1033, 1–2 (“[Petitioner] currently sells, offers for sale, uses, or imports
`currency trading products or services in the United States that may infringe
`[Patent Owner’s] patents” and “[Petitioner] may be liable for patent
`infringement”); Ex. 1035, 1 (“we believe that [Petitioner’s] currency trading
`products infringe one or more claims of [Patent Owner’s] Patents, and that
`[Petitioner] is liable for patent infringement”). Patent Owner does not
`dispute that assertion in its Preliminary Response. Based on the content of
`the two letters, we agree that Petitioner was charged with infringement of the
`’534 patent.
`3 Petitioner filed its Petition on September 15, 2020, prior to the expiration
`of the transitional program.
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`1. Used in the Practice, Administration, or Management of a
`Financial Product or Service
`A “covered business method 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.” AIA § 18(d)(1); see 37 C.F.R. § 42.301(a).
`To determine whether a patent is eligible for covered business method patent
`review, the focus is on the claims. See Unwired Planet, LLC v. Google Inc.,
`841 F.3d 1376, 1382 (Fed. Cir. 2016) (“[Covered business method patents]
`are limited to those with claims that are directed to methods and apparatuses
`of particular types and with particular uses ‘in the practice, administration,
`or management of a financial product or service.’”); Blue Calypso, LLC v.
`Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016) (approving of prior
`Board decisions that “properly focuse[d] on the claim language at issue,”
`and finding that the challenged patent was eligible for covered business
`method patent review because the claims recited “an express financial
`component in the form of a subsidy” that was “central to the operation of the
`claimed invention”). A patent need have only one claim directed to a
`covered business method to be eligible for review. Transitional Program for
`Covered Business Method Patents—Definitions of Covered Business
`Method Patent and Technological Invention; Final Rule, 77 Fed. Reg.
`48,734, 48,736 (Aug. 14, 2012).
`Petitioner cites multiple claims of the ’534 patent in support of its
`contention that the ’534 patent is a covered business method patent, arguing
`that all of the claims “are facially directed to a financial transaction: trading
`assets.” Pet. 18–19. Claim 1 recites a method of “trading assets on a
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`market” comprising “receiving price data for an asset,” “calculating trade
`recommendation information . . . based on said received asset price data,”
`and “calculating a trade recommendation regarding said asset based on said
`trade recommendation information.” Trading assets on a market is a
`financial activity, and performing calculations regarding asset price data to
`make a trade recommendation amounts to providing a financial service.
`Patent Owner does not dispute Petitioner’s arguments in its Preliminary
`Response, arguing only that the ’534 patent is for a technological invention
`and thus is unavailable for covered business method patent review. Prelim.
`Resp. 13–24. Petitioner has shown that at least claim 1 recites a method for
`performing data processing or other operations used in the practice,
`administration, or management of a financial product or service, as required
`by § 18(d)(1) of the AIA.
`
`
`2. Technological Invention
`The definition of “covered business method patent” in § 18(d)(1) of
`the AIA does not include patents for “technological inventions.” To
`determine whether a patent is for a technological invention, we consider
`“whether the claimed subject matter as a whole [(1)] recites a technological
`feature that is novel and unobvious over the prior art; and [(2)] solves a
`technical problem using a technical solution.” 37 C.F.R. § 42.301(b).
`In general, the Patent Trial and Appeal Board Consolidated Trial Practice
`Guide (Nov. 2019), available at https://www.uspto.gov/
`TrialPracticeGuideConsolidated (“Trial Practice Guide”), provides the
`following guidance with respect to claim content that typically does not
`exclude a patent under the category of a “technological invention”:
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`Patent 7,496,534 B2
`(a) Mere recitation of known technologies, such as
`computer hardware, communication or computer networks,
`software, memory, computer-readable
`storage medium,
`scanners, display devices or databases, or specialized machines,
`such as an ATM or point of sale device.
`(b) Reciting the use of known prior art technology to
`accomplish a process or method, even if that process or method
`is novel and non-obvious.
`(c) Combining prior art structures to achieve the normal,
`expected, or predictable result of that combination.
`Id. at 42–43. A claim does not include a “technological feature” if its
`“elements are nothing more than general computer system components used
`to carry out the claimed process.” Blue Calypso, 815 F.3d at 1341; see also
`Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1327 (Fed. Cir.
`2015) (“the presence of a general purpose computer to facilitate operations
`through uninventive steps does not change the fundamental character of an
`invention”).
`For the technological invention exception to apply, both prongs
`(1) and (2) of the inquiry must be met affirmatively, meaning that a negative
`answer under either prong renders inapplicable the technological invention
`exception to covered business method patent review. See Apple, Inc. v.
`Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016) (“We need not address
`this argument regarding whether the first prong of 37 C.F.R. § 42.301(b)
`was met, as we affirm the Board’s determination on the second prong of the
`regulation—that the claimed subject matter as a whole does not solve a
`technical problem using a technical solution.”); Blue Calypso, 815 F.3d at
`1341 (addressing only whether the claimed invention solves a technical
`problem using a technical solution). We address the first prong herein,
`which is dispositive.
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`Petitioner argues that none of the challenged claims recite a
`technological feature that is novel and unobvious over the prior art, citing
`the testimony of Mr. Donefer as support. Pet. 19–26 (citing Ex. 1004
`¶¶ 46–50, 55–60, 62, 66–68, 70–73, 76, 77, 80–83, 87–107, 109–121, 129,
`136–147). With respect to claim 1 in particular, Petitioner discusses each
`step of the claim and contends that the steps are “functions performed by
`generic computers.” Id. at 20–23. Specifically, claim 1 recites (1) receiving
`certain data over “one or more computer networks,” (2) storing data in a
`“computer-readable medium,” and (3) calculating “trade recommendation
`information” and a “trade recommendation.” Petitioner argues that
`receiving price data over a computer network “was a routine activity in
`numerous trading systems” and “[s]torage in computer-readable media was
`of course part of every computer system.” Id. at 20–21. With respect to the
`two recited calculations, Petitioner asserts that the claim does not require the
`calculations to be performed by a computer. Id. at 21.
`Patent Owner responds that Petitioner fails to analyze claim 1 as a
`whole and that, when considered together, “the steps [of claim 1] reveal that
`[Patent Owner] is claiming a novel system architecture that provides for
`real-time analysis of movements in foreign exchange rates and generates
`explicit trading recommendations based on real-time data,” citing the
`testimony of Mr. Zatkovich as support. Prelim. Resp. 14–20 (citing
`Ex. 2002 ¶¶ 44, 47–49, 53–85, 87–92). Patent Owner contends that steps (d)
`and (e) implement “parallelization” in the system because “step (d) breaks
`the problem of generating a trade recommendation up into smaller jobs
`(sub-models) that can be distributed amongst different computers; and
`step (e) completes or reconstitutes the original job (of generating a trade
`recommendation) from the information returned by the sub-models.” Id. at
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`18. Patent Owner defines “parallelization” as “the concept of speeding up
`the overall time it takes to accomplish a job, by breaking up the job so that
`different portions of it can be performed simultaneously.” Id. at 9, 20.
`Patent Owner also argues that steps (d) and (e) must be performed using
`“software on a computer,” given the preceding language in steps (a) and (c)
`reciting “one or more computer networks” and a “computer-readable
`medium” as well as the disclosure in the Specification. Id. at 11–13, 18.
`We agree with Petitioner. Claim 1 recites a method, not a “system
`architecture” as Patent Owner contends. See id. at 14–15. The only
`technical components in the claim are the generically recited “one or more
`computer networks” and “computer-readable medium.” Those components
`are only involved in “receiving” step (a) and “storing” step (b), then never
`mentioned again. Further, even assuming that steps (d) and (e) must be
`performed using “software on a computer” as Patent Owner contends, such
`functionality would likewise be generically recited. See id. at 12–13.
`Steps (d) and (e) merely recite calculating “trade recommendation
`information” and a “trade recommendation” based on certain input data.
`Claim 1 recites well-known computer components and known technologies
`for communicating and storing information, namely “one or more computer
`networks” and a “computer-readable medium,” which indicates that the
`’534 patent is not a patent for a technological invention. See Trial Practice
`Guide, 42–43 (examples a and b).
`Further, Patent Owner’s arguments are not commensurate with the
`language of the claim. Claim 1 recites price data for “assets,” not “foreign
`exchange rates.” It does not explicitly require calculations to be performed
`in “real-time.” And although step (d) recites calculating trade
`recommendation information from each of a “plurality of trading
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`sub-models,” the claim does not include any language requiring that such
`calculations be performed in parallel at the same time. Nor does it require
`the calculations to be performed by a “distributed” system of multiple
`computers each executing one of the sub-models. To the extent Patent
`Owner relies on exemplary embodiments described in the Specification
`rather than claim 1 itself for these features, we are not persuaded, as the
`technological invention exception asks whether “the claimed subject matter
`as a whole recites a technological feature that is novel and unobvious over
`the prior art.” 37 C.F.R. § 42.301(b) (emphasis added); see Prelim. Resp.
`18–19.
`Patent Owner further argues that Petitioner failed to provide
`“the requisite analysis or evidence demonstrating either anticipation or
`obviousness over the prior art,” contrary to the requirements of 37 C.F.R.
`§ 42.301(b). Prelim. Resp. 16–17. For purposes of the technological
`invention exception, we consider whether a claim, as a whole, recites a
`“technological feature” that is novel and unobvious over the prior art.
`37 C.F.R. § 42.301(b). We do not agree that this requires Petitioner to assert
`and prove unpatentability of the claim under 35 U.S.C. §§ 102 or 103. The
`relevant question is not whether the claim is novel and unobvious, but rather
`whether the claim recites a “technological feature” that is novel and
`unobvious over the prior art. Claim 1 recites receiving data over “one or
`more computer networks,” storing data in a “computer-readable medium,”
`and performing two calculations. The technical components recited in
`claim 1 are generic computer components, and receiving data over a
`computer network and storing data in a storage medium were plainly known
`in the prior art.
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`We agree with Petitioner that claim 1 does not recite a technological
`feature that is novel and unobvious over the prior art. Accordingly, we need
`not determine whether claim 1 solves a technical problem using a technical
`solution.
`
`
`3. Conclusion
`For the foregoing reasons, we conclude that Petitioner has met its
`burden to show that the ’534 patent is a “covered business method patent”
`and is eligible for covered business method patent review.
`
`
`D. Legal Standards
`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,
`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.”).
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`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, 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
`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 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
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`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).
`“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
`that abstract idea into a patent