IN THE UNITED STATES PATENT TRIAL & APPEAL BOARD
`
`
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`TRADESTATION GROUP, INC. AND
`TRADESTATION SECURITIES, INC.
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`
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`Petitioners,
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`v.
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`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`
`Patent Owner
`
`
`
`U.S. Patent No. 6,766,304 B2
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`
`
`PETITION FOR COVERED BUSINESS METHOD REVIEW UNDER 35
`U.S.C. § 321 AND § 18 OF THE LEAHY-SMITH AMERICA INVENTS ACT
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`
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`Page 1 of 67
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`TRADING TECH EXHIBIT 2119
`IBG ET AL. v. TRADING TECH
`CBM2016-00032
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`

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`
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`TABLE OF CONTENTS
`
`I.
`
`Introduction ...................................................................................................... 1
`
`II. Mandatory Notices (37 C.F.R. § 42.8(b)) ....................................................... 1
`
`A.
`
`B.
`
`C.
`
`Real Parties-in-Interest .......................................................................... 1
`
`Related Matters ...................................................................................... 1
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`Lead and Back-up Counsel Including Service Information .................. 2
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`III. Payment of Fees ............................................................................................... 3
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`IV. Grounds for Standing (37 C.F.R. 42.304(a)) ................................................... 3
`
`A.
`
`B.
`
`C.
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`Petitioners Have Standing to File a Petition Under 37 C.F.R.
`§ 42.302(a) ............................................................................................. 3
`
`TradeStation Is Not Estopped Under 37 CFR 42.302(b) by
`Non-Party CQG’s Earlier-Filed CBM Petition, and
`TradeStation Is the Sole Party-in-Interest in this Proceeding ............... 4
`
`The ’304 Patent Is Available for Covered Business Method
`Patent Review Under 37 C.F.R. § 42.301 ............................................. 8
`
`1.
`
`a.
`
`b.
`
`2.
`
`3.
`
`The USPTO Has Already Determined that the ’304
`Patent Is a Covered Business Method Patent............................ 10
`
`Classification ............................................................................. 10
`
`Claim Language ........................................................................ 11
`
`The ’304 Patent Is Not for a “Technological
`Invention” .................................................................................. 13
`
`The Claimed Subject Matter of the ’304 Patent as a
`Whole Does Not Recite a Technical Feature that Is
`Novel and Unobvious Over the Prior Art ................................. 14
`
`i
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`4.
`
`a.
`
`b.
`
`The Claimed Subject Matter of the ’304 Patent as a
`Whole Does Not Solve a Technical Problem Using a
`Technical Solution .................................................................... 17
`
`Plain Language .......................................................................... 17
`
`Legislative History .................................................................... 18
`
`V.
`
`Identification of Challenge Under 37 C.F.R. § 42.304(b) ............................. 21
`
`A.
`
`Specific Statutory Grounds of Challenge ............................................ 22
`
`B. A Person of Ordinary Skill in the Art ................................................. 22
`
`C.
`
`Claim Construction ............................................................................. 22
`
`VI. Detailed Explanation of Reasons That Claims 1−40 of the ’304
`Patent Are Unpatentable ................................................................................ 23
`
`A. Ground 1: Claims 1−40 Are Unpatentable Under 35 U.S.C.
`§ 101 .................................................................................................... 23
`
`1.
`
`a.
`
`b.
`
`2.
`
`3.
`
`4.
`
`a.
`
`New PTO Guidelines ................................................................ 25
`
`Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323 (Fed.
`Cir. 2014) .................................................................................. 25
`
`DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d
`1245 (Fed. Cir. 2014) ................................................................ 27
`
`Indicators of Abstract Ideas ...................................................... 29
`
`Economic Practices Are Abstract Ideas .................................... 31
`
`The ’304 Patent Is Not Patentable Under 35 U.S.C. §
`101 Because All of Its Claims Are Directed to an
`Abstract Idea ............................................................................. 32
`
`The Claims of the ’304 Patent Are Directed to an
`Abstract Idea ............................................................................. 35
`
`ii
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`b.
`
`The Claim Elements—Either Separately or as an
`Ordered Combination—Do Not Provide “Something
`More” ........................................................................................ 38
`
`c.
`
`Claims Fail the Machine-or-Transformation Test .................... 43
`
`(1) The ’304 Patent Claims Are Not Tied to a Particular
`Machine ..................................................................................... 44
`
`(2) The ’304 Patent Claims Do Not Transform a Particular
`Article into a Different State or Thing ...................................... 46
`
`d.
`
`e.
`
`Dependent Claims ..................................................................... 47
`
`Other Related TT Patents Have Been Determined to
`Be Abstract by the Board .......................................................... 47
`
`B. Ground 2: Claims 1−40 Are Unpatentable Under 35 U.S.C. §
`112, First Paragraph, for Lacking Sufficient Written
`Description of a Price Column Where Only Some Prices
`Move, Not All ...................................................................................... 52
`
`1.
`
`Claim Coverage ......................................................................... 54
`
`2. Written Description ................................................................... 55
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`3.
`
`Possession ................................................................................. 59
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`VII. Conclusion ..................................................................................................... 60
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`
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`iii
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`TS 1001
`TS 1002
`TS 1003
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`TS 1004
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`TS 1005
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`TS 1006
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`TS 1007
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`TS 1008
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`TS 1009
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`TS 1010
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`TS 1011
`TS 1012
`TS 1013
`TS 1014
`TS 1015
`TS 1016
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`TS 1017
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`EXHIBITS
`
`U.S. Patent No. 6,766,304
`File History, U.S. Patent No. 6,766,304
`TD Ameritrade Holding Corp. v. Trading Tech. Int’l, Inc., Case
`CBM2014-00136, Decision Denying Institution (Paper No.
`19), at pp. 7–12 (P.T.A.B. Dec. 2, 2014)
`Memorandum Opinion and Order, Dkt. #735, Trading Tech. Int
`'l, Inc. v. CQGT, LLC, et al., 05-cv-4811, U.S. District Court
`for the Northern District of Illinois, Eastern Division
`TD Ameritrade Holding Corp. v. Trading Tech. Int 'l, Inc.,
`Case CBM2014-00136, Petition (Paper No. 4) (P.T.A.B. May
`20, 2014)
`TD Ameritrade, Patent Owner’s Preliminary Response (Paper
`No. 18), at pp. 6-7 (P.T.A.B. Sept. 3, 2014)
`TD Ameritrade Holding Corp. v. Trading Tech. Int’l, Inc.,
`CBM2014-00131, Decision to Institute (Paper No. 19), at p. 15
`(P.T.A.B. Dec. 2, 2014)
`TD Ameritrade Holding Corp. v. Trading Tech. Int’l, Inc.,
`CBM2014-00133, Decision to Institute (Paper No. 19), at p. 14
`(P.T.A.B. Dec. 2, 2014)
`TD Ameritrade Holding Corp. v. Trading Tech. Int’l, Inc.,
`CBM2014-00137, Decision to Institute (Paper No. 19), at p. 14
`(P.T.A.B. Dec. 2, 2014)
`TD Ameritrade Holding Corp. v. Trading Tech. Int’l, Inc.,
`CBM2014-00135, Decision to Institute (Paper No. 19), at p. 14
`(P.T.A.B. Dec. 2, 2014)
`Kemp II, et al. US 6,772,132
`Statement of Reasons for Allowance in the ‘304 patent
`Declaration of Dr. John Phillips Mellor (“Mellor decl.”)
`Excerpts of Appendices for Mellor Declaration
`Lodewijk Petram, “The World’s First Stock Exchange”
`“Futures/ Option Purchasing System Trading Terminal
`Operation Guide”, Tokyo Stock Exchange Operation System
`Division
`Translation of “Futures/ Option Purchasing System Trading
`Terminal Operation Guide”, Tokyo Stock Exchange Operation
`System Division
`
`iv
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`Page 5 of 67
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`Certificate of Translation of “Futures/ Option Purchasing
`System Trading Terminal Operation Guide”, Tokyo Stock
`Exchange Operation System Division
`Gutterman, et al. US Patent No. 5,297,031
`Ellen Terrell, “History of the American and NASDAQ Stock
`Exchanges”, September, 2006 (Updated October, 2012)
`
`TS 1018
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`TS 1019
`TS 1020
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`v
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`Page 6 of 67
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`I.
`
`Introduction
`
`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
`
`Petitioners TradeStation Group, Inc. and TradeStation Securities, Inc.
`
`(collectively, “Petitioners” or “TradeStation”) request Covered Business Method
`
`“CBM”) review of claims 1−40 of U.S. Patent No. 6,766,304 B2 (“the ’304 patent”)
`
`(Ex 1001). The ’304 patent issued on June 20, 2004, and is owned by Trading
`
`Technologies International, Inc. (“Patent Owner” or “TT”). Petitioners will show
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`below that the claims of the ’304 patent are unpatentable because they are directed to
`
`an abstract idea, and based on the broadest reasonable interpretation, lack written
`
`description. Accordingly, CBM review of claims 1−40 of the ’304 patent should be
`
`granted.
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`II. Mandatory Notices (37 C.F.R. § 42.8(b))
`
`A. Real Parties-in-Interest
`
`The real parties-in-interest are TradeStation Securities, Inc, TradeStation
`
`Group, Inc., TradeStation Technologies, Inc., and IBFX, Inc.
`
`B. Related Matters
`
`The ’304 patent is or has been involved in the following proceedings that may
`
`affect, or be affected by, a decision in this proceeding: GL Trade Am., Inc. v. Trading
`
`Tech. Int'l, Inc. (“TT”), 1:11-cv-001558 (N.D. Ill.); TT v. TradeHelm, Inc., 1:10-cv-
`
`00931 (N.D. Ill.); TT v. Rosenthal Collins Group, LLC, 1:10-cv-00929 (N.D. Ill.); TT
`
`v. Open E Cry, LLC, et al., 1:10-cv-00885 (N.D. Ill.); TT v. thinkorswim Group, Inc.,
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`1
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`et al., 1:10-cv-00883 (N.D. Ill.); TT v. Tradestation Sec., Inc., et al., 1:10-cv-00884
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`(N.D. Ill.); TT v. FuturePath Trading, LLC, 1:10-cv-00720 (N.D. Ill.); TT v. Stellar
`
`Trading Sys., Ltd., et al., 1:10-cv-00882 (N.D. Ill.); TT v. Cunningham Trading Sys.,
`
`LLC, et al., 1:10-cv-00726 (N.D. Ill.); TT v. BGC Partners, Inc., 1:10-cv-00715 (N.D.
`
`Ill.); TT v. CQG, Inc., et al., 1:05-cv-04811 (N.D. Ill.); TT v. IBG LLC, et al., 1:10-
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`cv-00721 (N.D. Ill.); TT v. Orc Software, Inc., et al., 1:05-cv-06265 (N.D. Ill.); TT v.
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`FuturePath Trading, LLC, 1:05-cv-05164 (N.D. Ill.); TT v. Transmarket Group, LLC,
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`1:05-cv-05161 (N.D. Ill.); TT v. FFastFill PLC, Inc., 1:05-cv-04449 (N.D. Ill.); TT v.
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`Strategy Runner, Ltd., 1:05-cv-04357 (N.D. Ill.); TT v. Rolfe & Nolan Sys., Inc., et al.,
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`1:05-cv-04354 (N.D. Ill.); TT v. RTS Realtime Sys., Inc., et al., 1:05-cv-04332 (N.D.
`
`Ill.); TT v. Peregrine Fin. Group, Inc., 1:05-cv-04137 (N.D. Ill.); TT v. GL
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`Consultants, Inc., et al., 1:05-cv-04120 (N.D. Ill.); Rosenthal Collins Group, LLC v.
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`TT, 1:05-cv-04088 (N.D. Ill.); TT v. Ninja Trader, LLC, 1:05-cv-03953 (N.D. Ill.); TT
`
`v. Patsystems NA LLC, et al., 1:05-cv-02984 (N.D. Ill.); TT v. Man Group PLC, et al.,
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`1:05-cv-02164; TT v. Refco Group, Ltd., LLC, 1:05-cv-01079 (N.D. Ill.); TT v.
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`Kingstree Trading, 1:04-cv-06740 (N.D. Ill.); TT v. Goldenberg Hehmeyer, 1:04-cv-
`
`06278 (N.D. Ill.); TT, et al. v. eSpeed, Inc., 1:04-cv-05312 (N.D. Ill.).
`
`C. Lead and Back-up Counsel Including Service Information
`
`Petitioners provide the following designation of counsel:
`
`
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`2
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`LEAD COUNSEL
`John C. Phillips, Reg. No. 35,322
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`T: 858-678-4304
`F: 877-769-7945
`E-mail: phillips@fr.com
`
`
`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`BACKUP COUNSEL
`Kevin Su, Reg. No. 57,377
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`T: 617-521-7827
`F: 877-769-7945
`E-mail: CBM41919-0005CP1@fr.com
`
`Please address all correspondence and service to counsel designated above.
`
`Petitioners also consent
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`to electronic service by email at CBM41919-
`
`0005CP1@fr.com.
`
`III. Payment of Fees
`Petitioners authorize the Patent and Trademark Office to charge Deposit
`
`Account No. 06-1050 for the fee set in 37 C.F.R. § 42.15(b) for this Petition, and
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`further authorize payment for any additional fees to be charged to this Deposit
`
`Account.
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`IV. Grounds for Standing (37 C.F.R. 42.304(a))
`
`A.
`
`Petitioners Have Standing to File a Petition Under 37 C.F.R. §
`42.302(a)
`
`Petitioners certify that the ‘304 patent is available for CBM because TT sued
`
`TradeStation for infringement of the ’304 patent. See TT v. TradeStation Sec., Inc., et
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`al., 1:10-cv-00884 (N.D. Ill.). Petitioners are not barred or estopped from requesting
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`CBM review. As explained below, it is more likely than not that at least one claim of
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`the ’304 patent is invalid under 35 U.S.C. § 101 and/or § 112. Moreover, CBM review
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`is available for the ’304 patent for the reasons set forth below.
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`B.
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`TradeStation Is Not Estopped Under 37 CFR 42.302(b) by
`Non-Party CQG’s Earlier-Filed CBM Petition, and TradeStation
`Is the Sole Party-in-Interest in this Proceeding
`
`On January 9, 2015, CQG, Inc. and CQGT, LLC (collectively, “CQG”)
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`jointly filed a CBM petition on the ’304 patent that was denied on July 10, 2015
`
`under 35 U.S.C. § 325(a)(1) and 37 C.F.R. § 43.302(c) because CQG had
`
`previously filed a declaratory judgment action against TT.1 The merits of CQG’s
`
`petition were not reached. See CQG, Inc. v. Trading Technologies Int’l, Inc., CBM
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`2015-00057, Paper 13. Portions of this petition and its exhibits, including the
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`declaration of Dr. Mellor, are substantially identical to CQG’s petition and exhibits
`
`(except the portions concerning the effect of the declaratory judgment action have
`
`been removed). Any argument by TT that TradeStation was a real-party-in-interest
`
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`1 CQG’s previously-filed declaratory judgment action had been dismissed without
`
`prejudice; however, the Board found that when CQG amended its answer in response
`
`to a later-filed infringement action to include its earlier-filed declaratory claims, “it
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`was as if the claims from the [declaratory judgment] action were continued into the
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`[infringement action],” and accordingly CQG was barred from seeking CBM review.
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`to CQG’s petition, and thus is estopped from filing this petition, is without merit,
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`for several independent reasons.
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`First, TradeStation and CQG are separate unrelated corporate entities with
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`no common ownership and no common control. Nor do they even have a
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`commercial relationship that could conceivably bear on issues of privity or real-
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`party-in-interest for this petition. While they are both accused of infringing the
`
`same patent (albeit in separate lawsuits), the Board has repeatedly held that a non-
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`party’s status as a co-defendant and/or co-member of a joint defense group is
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`insufficient to render that non-party a real party in interest. See, e.g., Petroleum
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`Geo-Servs. Inc. v. WesternGeco LLC, IPR2014-00687, Paper 33 at 16 (PTAB Dec.
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`15, 2014) (holding petitioners and non-party’s shared interest in invalidating patent
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`at issue, “collaborat[ion] together, and invo[cation of the] common interest
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`privilege with respect to sharing potentially invalidating prior art references” were
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`insufficient to render non-party a real-party-in-interest); accord JP Morgan Chase
`
`& Co. et al v. Maxim Integrated Products, Inc., CBM2014-00179, Paper 11 at 13
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`(PTAB Feb. 20, 2015).
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`Second, there can be no question that TradeStation had nothing to do with
`
`the CQG declaratory judgment (“DJ”) action that was the basis of the Board’s
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`refusal to institute CQG’s request for CBM review. CQG filed that action in
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`August 17, 2005, in the District of Colorado (many years before TT accused
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`TradeStation of infringement). Shortly thereafter, TT sued CQG for infringement
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`in the Northern District of Illinois. Ultimately, CQG’s declaratory judgment action
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`was transferred to Illinois, then dismissed without prejudice shortly before CQG
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`amended its answer in Illinois to include, as counterclaims, its DJ claims from its
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`Colorado action. Those counterclaims were thus asserted by CQG in Illinois in
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`December 2006, and the CQG case was tried to a jury earlier this year.
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`TradeStation, by contrast, was not sued by TT until 2010. That litigation
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`remains in its very early stages. TradeStation had no involvement, influence,
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`control, or even knowledge of CQG’s 2005 declaratory judgment action in
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`Colorado, nor did it participate in TT’s 2005 Illinois case against CQG. Thus, any
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`suggestion that the CQG 2005 declaratory judgment action somehow estops
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`TradeStation from filing the instant petition under 35 U.S.C. § 325(a)(1) and/or 37
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`C.F.R. § 43.302(c) would be baseless.
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`Third, the similarity of TradeStation’s petition and CQG’s petition does not
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`change the fact that TradeStation is the only real-party-in-interest for this petition.
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`The Trial Practice Guide explains that, in general, a real-party-in-interest is a
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`“party that desires review of the patent” or “at whose behest the petition has been
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`filed.” Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14,
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`2012). TradeStation desires review of the ’304 patent, which it has been accused of
`
`infringing in a lawsuit filed by TT against it in 2010. TradeStation is filing this
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`petition on its own behest and at its own cost, using its own counsel. CQG did not
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`control or influence TradeStation’s decision to file this petition, nor did CQG
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`participate in the preparation of this petition other than passively having its earlier-
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`filed petition serve as its basis, nor will it exercise any control or influence as this
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`proceeding moves forward. CQG has not funded TradeStation’s petition and will
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`not fund TradeStation’s participation in this proceeding at any point in the future.
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`TradeStation is represented by separate counsel from CQG, both in the TT
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`litigation and for the instant petition. CQG had no opportunity to review, provide
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`comments on, or otherwise influence the instant petition before it was filed by
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`TradeStation. Nor will it have any such opportunities moving forward. In brief,
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`there is simply no basis to conclude that a “non-party exercised or could have
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`exercised control over a party’s participation” in this CBM.
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`TT may argue that the fact that TradeStation is largely resubmitting
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`arguments that were previously presented by CQG (but never reached by the
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`Board) is a basis for privity or a finding that CQG is also a real-party-in-interest in
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`this proceeding. That argument has already been rejected in a precedential decision
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`by the Board. JP Morgan Chase & Co. et al v. Maxim Integrated Products, Inc.,
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`CBM2014-00179, Paper 11 at 13 (PTAB Feb. 20, 2015).
`
`The JP Morgan Chase case is precisely on point. In that case, a third party
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`(like CQG) had previously sued the patentee for a declaratory judgment of
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`invalidity. That case was ultimately consolidated into a multi-district litigation that
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`included the petitioners. The petitioners and the third party jointly filed a CBM
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`request, prior to the Board’s clarification that CBM proceedings, like IPR
`
`proceedings, are subject to the DJ action bar. Subsequent to that clarification, the
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`Board dismissed the entire CBM on the basis of the third party’s prior DJ action.
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`The petitioners then re-filed a substantially similar petition, relying on the same
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`declarant, but leaving out the third party that the Board had previously found was
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`barred from seeking a CBM based on its DJ action. The Board rejected the patent
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`owner’s argument that the overlap in prior art and arguments, as well as the use of
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`the same declarant, between the re-filed petition and the dismissed petition
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`evidenced the third party’s control and contributions to the proceeding sufficient to
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`raise a defect in the identification of the real-party-in-interest. Consequently, the
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`Board instituted the proceeding over the patent owner’s objection. The same result
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`applies here.
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`C. The ’304 Patent Is Available for Covered Business Method Patent
`Review Under 37 C.F.R. § 42.301
`
`
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`A patent is available for CBM review if the patent claims a “method or
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`corresponding apparatus for performing data processing or other operations used in
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`the practice, administration, or management of a financial product or service, except
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`that the term does not include patents for technological inventions.” 37 C.F.R. §
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`42.301 (a); see also AIA § 18(d)(1) (a covered business method patent is “a patent
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`that claims a method or corresponding apparatus for performing data processing or
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
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`other operations used in the practice, administration, or management of a financial
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`product or service”). A patent is for a technological invention if “the claimed subject
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`matter as a whole recites a technological feature that is novel and unobvious over
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`the prior art; and solves a technical problem using a technical solution.” 37 C.F.R. §
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`42.301(b).
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`
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`To determine whether a patent is available for CBM review, the focus is on
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`the claims. Transitional Program for CBM Patents—Definitions, 77 Fed. Reg.
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`48734, 48736 (Aug. 14, 2012). A patent needs only one claim directed to a covered
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`business method to be eligible for review. Id. at 48,736.
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`
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`In promulgating rules for CBM reviews, the PTO considered the legislative
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`intent and history behind the AIA’s definition of “covered business method patent.”
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`Id. at 48735–736. The “legislative history explains that the definition of covered
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`business method patent was drafted to encompass patents claiming activities that are
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`financial in nature, incidental to a financial activity or complementary to a financial
`
`activity.” Id. (citing 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of
`
`Sen. Schumer)). The legislative history indicates that “financial product or service”
`
`should be interpreted broadly. Id. Therefore, the PTO has broadly defined the term
`
`“covered business method patent” to encompass patents claiming activities that are
`
`financial in nature, incidental to a financial activity or complementary to a financial
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`activity. See id. at 48735; see also SAP Am., Inc. v. Versata Dev. Grp., Inc.,
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
`
`CBM2012-00001, Decision to Institute (Paper No. 36), at p. 23 (P.T.A.B. Jan. 9,
`
`2013), aff’d Versata Dev. Group, Inc. v. SAP Am., Inc., slip op. at 35-36 (Fed. Cir.
`
`July 9, 2015).
`
`
`
`As discussed in more detail below, the ’304 patent is a covered business
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`method patent and not directed to a technological invention. Accordingly, CBM
`
`review of the ’304 patent should be instituted.
`
`1.
`
`The USPTO Has Already Determined that the ’304 Patent Is
`a Covered Business Method Patent
`
`
`
`TD Ameritrade previously filed a CBM petition against the ’304 patent. The
`
`Board carefully reviewed the ’304 patent and found that it is a covered business
`
`method patent and is eligible for covered business method patent review. TD
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`Ameritrade Holding Corp. v. Trading Tech. Int’l, Inc., Case CBM2014-00136,
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`Decision Denying Institution (Paper No. 19), at pp. 7–12 (P.T.A.B. Dec. 2, 2014)
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`(Ex. 1003). Anticipating that TT will argue that the ’304 patent is not eligible for
`
`covered business method patent review, despite the Board’s ruling to the contrary,
`
`Petitioners will briefly address the eligibility of the ‘304 patent for covered business
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`method patent review.
`
`a.
`
`Classification
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`10
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`Under the plain language of 37 C.F.R § 42.301(a), the ’304 patent squarely
`
`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
`
`
`
`
`qualifies as a “covered business method patent.” According to the PTO, patents
`
`subject to covered business method patent review are typically classifiable in Class
`
`705. See, e.g., Transitional Program for CBM Patents—Definitions, supra, 77 Fed.
`
`Reg. at 48739. Class 705 relates to “Data Processing: Financial, Business Practice,
`
`Management, or Cost/Price Determination.” Although not entirely dispositive of its
`
`qualification as a covered business method patent, the claimed systems and methods
`
`of the ’304 patent are classified in Class 705. Specifically, the following classes were
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`included on the front of the ’304 patent (with class 705/37 being identified as the
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`primary class):
`
`
`
`
`
`
`
`705/35
`
`Finance (e.g., banking, investment or credit)
`
`705/36
`
`Portfolio selection, planning or analysis
`
`705/37
`
`Trading, matching, or bidding
`
`Tellingly, the PTO’s classification demonstrates that the ’304 patent is financial in
`
`nature and falls under the definition under § 42.301(a).
`
`b.
`Taking independent claims 1 and 27 as representative claims, there are several
`
`Claim Language
`
`
`
`phrases that indicate the claims are financial in nature. The preamble of claims 1 and
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`27 call for “displaying market information,” “trading of a commodity,” “electronic
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`11
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`Page 17 of 67
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`exchange,” “bid price,” and “ask price”—all of which relate to a financial market.
`
`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
`
`(Ex. 1001, independent claims 1 and 27.) Although TT may argue that the claims
`
`can be applied to other situations, the claims’ clear intention is to cover financial
`
`transactions.
`
`
`
`Additional claim limitations further emphasize that the ’304 patent qualifies
`
`for CBM review. The first and second elements of claims 1 and 27 describe the
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`bid/buy and ask/sell side of a transaction for a commodity in the market. For
`
`example, the first element describes “a bid display region . . . corresponding to a
`
`price level . . . [and a] first indicator representing quantity associated with at least
`
`one order to buy the commodity at the highest bid price currently available in the
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`market.” The third element discusses the positioning of the bid and ask display
`
`regions along the price axis. The fourth element displays an order entry region for
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`sending trade orders, again, where “trade” is a term commonly used in the financial
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`market. Finally, the fifth element discusses “setting a . . . trade order relating to the
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`commodity and sending the trade order to the electronic exchange.” (Id.)
`
`
`
`Examining the elements, the ’304 patent is directed to the sending of trade
`
`orders (i.e., bid and ask transactions) based on displayed market information, as well
`
`as updating the market information. Obviously, displaying market information and
`
`sending trade orders form the basis of any financial market. Clearly, the claims of
`
`12
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`Page 18 of 67
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`the ’304 patent are directed to a financial market and directed to subject matter that
`
`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
`
`is covered by the CBM review process.
`
`The ’304 Patent Is Not for a “Technological Invention”
`
`2.
`The definition of a covered business method patent in Section 18(d)(1) of the
`
`
`
`AIA does not include patents for “technological inventions.” A technological
`
`invention is determined by considering “whether the claimed subject matter as a
`
`whole recites a technical feature that is novel and unobvious over the prior art; and
`
`solves a technical problem using a technical solution.” 37 C.F.R. § 42.301(b). As
`
`noted previously, the Board found in the TD Ameritrade decision that the ’304 patent
`
`is not a technological invention. (Ex. 1003, pp. 10–12.)
`
`
`
`Even though the Board has found to the contrary, TT will likely continue to
`
`argue that its patents are technological. But the ’304 patent is not for a technological
`
`invention because it does not solve a technical problem with a technical solution.
`
`Instead, it recites the ordinary application of old, well-understood data display and
`
`graphical user interface techniques.
`
`
`
`The following claim drafting techniques typically do not render a patent a
`
`“technological invention:”
`
`(a) Mere recitation of known technologies, such as computer
`
`hardware, communication or computer networks, software, memory,
`computer-readable storage medium, scanners, display devices or
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`13
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`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
`
`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.
`
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48763–764 (Aug. 14, 2012).
`
`3.
`
`The Claimed Subject Matter of the ’304 Patent as a Whole
`Does Not Recite a Technical Feature that Is Novel and
`Unobvious Over the Prior Art
`
`
`
`The first prong of the technological invention analysis is whether the claims
`
`as a whole recite a technical feature that is novel and unobvious over the prior art.
`
`As described in detail herein, the claims of the ’304 patent do not recite any such
`
`novel or nonobvious technical feature. Rather, they recite only well-understood,
`
`routine, and conventional steps of displaying market information graphically to a
`
`trader, who enters buy and sell orders, and sending the trader’s orders to an exchange
`
`to be executed.
`
`
`
`Sending trade orders is well-known, as are computer user interfaces that
`
`facilitate this process. Patent Owner admits in the background section of the ’304
`
`patent that: “At least 60 exchanges throughout the world utilize electronic trading
`
`in varying degrees to trade stocks, bonds, futures, options and other products.” (Ex.
`
`1001, 1:27–29.) The use of a graphical user interface to facilitate the process of
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`14
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`Page 20 of 67
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`sending trade orders is not novel or non-obvious. Indeed, the ’304 patent itself
`
`Attorney Docket No 41919-0005CP1
`CBM of U.S. Patent No. 6,766,304
`
`admits as much in its characterization of known prior art systems:
`
`[T]he exchange participants’ computers allow traders to
`participate in the market. They use software that creates
`specialized interactive trading screens on the traders’
`desktops. The trading screens enable traders to enter and
`execute orders, obtain market quotes, and monitor
`positions. (Ex. 1001, 1:62-66.)
`
`
`
`In addition, there were a significant number of additional patents cited during
`
`prosecution of the ’304 patent that disclose a graphical user interface in the context
`
`of an electronic exchange. (File History of the ’304 patent, Ex. 1002.) In fact, FIG.
`
`2 of the ’304 patent, which shows the state of the prior art, demonstrates that the use
`
`of a graphical interface to display market information and send trade orders (i.e., bid
`
`or ask transactions) for a commodity on an electronic exchange was well-known at
`
`the time the patent was filed. (Ex. 1001, 5:13–19.)
`
`
`
`Further, the ’304 patent does not disclose, nor are the claims directed to, any
`
`new computer hardware. Rather, the claims have been crafted to recite software and
`
`only general-purpose computer components, such as a “dynamic display,” a “display
`
`device” and an “input device.” (Id., independent claims 1 and 27.) These components
`
`are not technologically novel or non-obvious. They are generic and known
`
`technology. Even the specification of the patent acknowledges that the alleged
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`Page 21 of 67
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