`__________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
`TRADESTATION GROUP, INC.,
`TRADESTATION SECURITIES, INC., IBG LLC, AND
`INTERACTIVE BROKERS LLC.
`
`Petitioners
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`
`Patent Owner
`_________________
`Case CBM2016-00051
`U.S. Patent 7,904,374 B2
`_________________
`
`DECLARATION OF DAN R. OLSEN, JR.
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`Page 1 of 24
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`TRADING TECH EXHIBIT 2174
`TRADESTATION ET AL. v. TRADING TECH
`CBM2016-00051
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`I. Qualifications
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`1.
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`I, Dan R. Olsen Jr., Ph.D., am a resident of Orem, Utah and have more
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`than 35 years of experience in computer science and human-computer interaction
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`(HCI). I hold a doctorate in Computing and Information from the University of
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`Pennsylvania. For 3 ½ years I was an Assistant Professor of Computer Science at
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`Arizona State University. I then served for 30 years on the faculty of Brigham
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`Young University retiring as a full professor in 2015. During that time at BYU, I
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`also served as the chair of the Department of Computer Science. I took leave from
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`BYU in 1996 to become the founding director of the Human Computer Interaction
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`Institute in the School of Computer Science at Carnegie Mellon University. I
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`returned to BYU in 1998. I am currently the CEO of a software startup in
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`educational technology (SparxTeq, Inc).
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`2.
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`During the course of my academic career, I authored over 70 papers in
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`the field of computer science. The topics on which I have published papers are:
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`User Interface Management Systems
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`Syntactic representations of user interfaces
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`Multi-user interaction across networks
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`Induction of interaction behavior from pictures
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`Novel interaction techniques using speech and laser pointers
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`Interactive machine learning
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`Interactive robotics
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`Interactive television
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`3.
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`I currently hold 4 patents in human-computer interaction. I have
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`authored 3 textbooks on the techniques of software design for human-computer
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`interaction.
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`4.
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`I have had extensive involvement in professional societies, such as the
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`Association for Computing Machinery (ACM), the premiere society in computing.
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`I have served in many offices of ACM’s Special Interest Group on Computer
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`Human Interaction (SIGCHI) and currently serve as its treasurer. I have been
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`conference chair of CHI, which is the premier conference in Computer Human
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`Interaction. I was the founding editor of ACM’s Transactions on Computer Human
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`Interaction. I was a co-founder and active leader for the conference on User
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`Interface Software and Technology (UIST) for the past 29 years. I have also served
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`at the governor’s request on the Utah Science, Technology and Research (USTAR)
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`board, which oversees and funds state economic development efforts in
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`technology.
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`5.
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`I twice received best paper awards in intelligent user interfaces. In
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`2004, I was appointed to the CHI Academy for international excellence in
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`Computer Human Interaction research. In 2007, I was recognized as one of ACM’s
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`Fellows for research in computer science and in 2012 received the CHI Lifetime
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`Research Award, which is the highest award in Computer Human Interaction.
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`II. Graphical User Interfaces and the ‘374 Patent
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`6.
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`Attorneys for the Patent Holder have explained to me that
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`U.S. Patent No. 7,904,374 (“the ‘374 patent”) has been challenged as a Covered
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`Business Method (CBM) patent. I have been asked to review the nature of the
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`invention in the ‘374 patent. As explained below, it is my opinion that the
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`‘374patent claims a technological invention because the claimed invention
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`provides a technical improvement to prior graphical user interfaces.
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`III. Historical context
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`7.
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`In discussing how graphical user interfaces are a technology with
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`specific technical problems, I would first like to refer to two very old patents
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`involving earlier mechanical technologies. I will use these two patents to illustrate
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`two key pieces of technical knowledge that are used widely in graphical user
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`interface (GUI) technology.
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`Figure 1 – Speedometer in the Steering Wheel.
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`IV. Simplification of perception – US patent 1,692,601
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`8.
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`In 1928, U.S. patent 1,692,601 was issued for an automobile
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`speedometer that was mounted in the center of the steering wheel. This patent
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`claims the ability to perceive an automobile’s speed. It was not for the sensor for
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`measuring speed (which was well known at the time). It was not for the concept of
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`displaying speed in a meter (which was also well known). The key idea was as
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`follows:
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`
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`first, to provide a steering control means -for vehicles on which is
`mounted a speedometer whereby the speed of the vehicle may be
`readily determined by merely dropping the vision slightly to the
`middle portion of the steering wheel which is substantially in line with
`the line of vision of the driver and as close to the eyes of the driver as
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`possible, thus determining the speed of the vehicle with least danger
`to the driver and other occupants …
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`9.
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`This patent’s key contribution was that it placed the speedometer in
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`the center of the steering wheel where it was easier for the driver to perceive. This
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`was not awarded for the esthetics or appearance of that speedometer placement. It
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`was the arrangement of the components of the technology for easiest human
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`perception that was the key to this patent. It will be shown in this report that the
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`‘374 patent claims constructing a GUI to display information and accept user input
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`in particular locations to improve the interface between man and machine by
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`improving the user’s perception of the relevant information, with bits and pixels
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`comprising the GUI elements rather than cables, shafts and gears.
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`10. Claim 2 of the 1,692,601 patent clearly states that the speedometer is
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`mounted on a tube running through the steering post and that the mounting of the
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`speedometer is “substantially flush with the front side of the hub of the steering
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`wheel.” This claim indicates that the placement of the speedometer is at the center
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`of the steering wheel which is consistent with the patent’s intent as quoted above
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`from the patent specification.
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`V. Reduction of human effort - US 714,878
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`11.
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`In 1902, U.S. patent 714,878 was issued for a new steering
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`mechanism. The claim was not for steering, which was well known, and not for the
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`gears, shafts and motive power that were used. The essential idea of this patent is
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`as follows:
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`This invention relates to improvements in motor-vehicles or
`automobiles, and more particularly to the class of such vehicles
`wherein the front Wheels are both the driven and the steering wheels;
`and the invent-ion more especially pertains to the mechanisms and
`controlling appliances whereby the motor may be made available for
`the propulsion of the vehicle through the front steering wheels,
`whereby the motor may be employed to swing the steering-wheels to
`steer, whereby the motor may be simultaneously caused to both drive
`and steer, and whereby the motor may only drive the steering-wheels,
`the steering being operated manually.
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`The improved mechanism is especially useful on large and heavy
`motor wagons or trucks in which, especially at the time of starting the
`same, considerable power is necessary to change the relative position
`of the wheels under the body.
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`12. By this time the steering of vehicles was well known. The specific
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`technical problem that was addressed was that with very heavy vehicles the power
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`required to turn the steering wheels was beyond the capacity of normal human
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`beings. They were simply not strong enough. In this patent, a mechanism is
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`described for using power from the motor to perform the task that a human could
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`not do. As explained in this report, the ‘374 patent, rather than using a motor to
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`reduce human effort, describes a way of constructing a GUI to increase speed,
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`efficiency and usability. Bits and pixels comprising GUI components have
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`replaced gears, motors and shafts but again human capacity to control and interface
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`with a machine has still been enhanced in a novel way.
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`VI. Graphical User Interface Technology
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`13.
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`One of the questions at issue in the Petitioner’s arguments
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`is whether or not GUIs constitute a technology. User interface technology is the
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`subject of study at institutions such as MIT-Media Lab, CMU-HCI Institute in their
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`School of Computer Science, Stanford, UC-Berkeley, University of Washington
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`and Georgia Tech. All of these highly technical institutions have strong research
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`faculty and educational programs in human-computer interaction. The goals of
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`HCI research are to invent new ways for people to interact with computers. This is
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`not a new field of study, but rather a subset of man-machine interface design.
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`Indeed, HCI has adopted a number of terms from its mechanical parent. For
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`example, buttons, sliders, exist in both fields for study, and just as changes to these
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`features may provide an improvement in a mechanical device, improving the
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`equivalent features in a GUI allows a computer to function better or even in ways
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`that were not previously conceived. For example, the various GUIs on the iPhone
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`transform it into a phone, compass, calculator, and so on. Without these GUIs, the
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`iPhone is a useless handheld computer. Indeed, the iPhone itself uses HCI design,
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`for example, by using slide to unlock to access the phone to replace a mechanical
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`lock.
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`14. Two common measures of success in HCI research are speed and
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`accuracy. Learnability is also a common success metric. The ease with which
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`someone can master a user interface is very important. Although esthetics do come
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`into play when marketing some types of products (e.g., retail products), HCI
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`researchers generally ignore this aspect and focus on making a user interface more
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`effective rather than just prettier.
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`15.
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` Merriam-Webster dictionary defines technology as “the practical
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`application of knowledge, especially in a particular area.” At issue then is the
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`knowledge, or scientific principles, that cause the invention claimed in the ‘374
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`patent to work better than previous solutions. In my opinion, at least two basic GUI
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`principles, which are scientific and engineering-based, cause users to perceive the
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`claimed GUI as an improvement over prior GUIs, namely: human visual search,
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`and optimizing human effort. This section of the report includes a light
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`introduction to these principles so that they can be understood with respect to the
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`claims of the ‘374 patent.
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`VII. GUI Architecture
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`16.
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`In the case of the ‘374 patent, the claims identify the specific
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`architecture/make-up, functionality, and structural components, including order
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`entry, a display of graphical locations aligned with an axis, and providing
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`information about the particular commodity market in which trades are occurring.
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`The design of this GUI is critical to the user’s ability to correctly perceive the state
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`of the interaction information as well as to rapidly and accurately select the data to
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`be associated with a trade order. There are many possibilities for the design of the
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`GUI architecture and they will vary widely in how rapidly and accurately the user
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`can perceive information the user is trying to perceive and how rapidly and
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`accurately the user can achieve the interactive purpose of the GUI tool. The claims
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`of the ‘374 patent describe how to construct a GUI with a very specific and
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`concrete arrangement of the presentation of the market information aligned with a
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`price axis so as to facilitate the user’s (trader) perception of the market. The claims
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`of the ‘374 patent also describe how to map sequential price levels to graphical
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`locations, wherein the selectable graphical locations correspond to the axis, and
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`where the mapping of the price levels does not change at a time when the market
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`data changes; and receiving a selection, through a single action, of one of the
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`graphical locations based on a cursor of a user input device.
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`17. The ‘374 claims describe a particular way of constructing a GUI with
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`graphical locations aligned with price levels of an axis to allow for order entry
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`which requires less effort of the user than before and provides greater accuracy
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`without sacrificing speed versus the disclosed conventional screens. The ‘996
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`patent claims a way of constructing a GUI with a specific structure and make-up
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`for presenting information and that permits a specific way in which users can enter
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`trade orders. The ‘374 patent claims provide a GUI that a user can see, feel and
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`interact with no differently than a mechanical device. The ‘374 claims provide
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`technical solutions to the technical problems of user’s perception of market data
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`and interaction with that data. These problems are based on the construction of
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`prior GUI tools, and the claimed invention solves technical problems rooted in
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`science and engineering with a new GUI construction that addresses these science
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`and engineering problems.
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`18.
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`Innovation in human control of processes has a long patent history.
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`US Patent 3,018,661 issued in 1957 is for an aviation display. The goal of this
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`display is as follows:
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`It is an object of the present invention to provide an
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`aircraft instrument constructed to facilitate the control of
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`an aircraft simultaneously in pitch and roll by a human
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`pilot and which preferably is combined with means to
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`display the pitch and roll attitude of the aircraft to give a
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`readily appreciated indication of the actual attitude of the
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`aircraft and the action which is required to attain the
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`desired flight path.
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`And the patent claimed providing that particular way of presenting information as
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`follows:
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`1. An aircraft instrument comprising means to define a
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`viewing aperture, a first index supported for movement
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`within the aperture, means within the aperture to define a
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`datum position for the first index, driving means
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`connected to the first index, means to control the driving
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`means in accordance with the component of the normal
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`plane absolute acceleration of the aircraft in direction of
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`its Z axis so that the displacement of the first index from
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`the said datum position is proportional to the said
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`component of the normal plane absolute acceleration of
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`the aircraft, a further index supported for movement
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`within the aperture and means to displace the further
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`index in relation to the said datum position in accordance
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`with a demanded value, both as to magnitude and
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`direction of the normal plane absolute acceleration, said
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`demanded value being that required if some desired flight
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`path is to be achieved and a maneuver of the aircraft in
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`bank and pitch to superpose the first index and further
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`index thus resulting in the attainment of the demanded
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`normal plane acceleration and the desired flight path,
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`neglecting any components of the normal plane absolute
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`acceleration in the direction of the transverse axis of the
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`aircraft.
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`19.
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` The innovation in this aviation patent relies upon the pilot’s ability to
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`perceive his current flight state in a way that will more easily allow him to control
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`the plane. The ‘374 patent innovates in a similar way using the claimed structure,
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`makeup and functionality of a GUI rather than gears and dials. The price levels are
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`mapped to the graphical locations, which allows the trader to select order
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`information that is specifically aligned with the price levels to facilitate visually
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`finding the correct graphical locations and activating a trade using those regions.
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`VIII. Human factors
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`20. This is not the place for a complete discussion of the human factors
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`principles that impact the design of interfaces between man and machine.
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`However, there are three that are instructive in this case. They are: short term
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`memory, foveated perception and expressive leverage.
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`A. Seven +/- two
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`21. A great deal of what we do when we work depends upon our short-
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`term memory. Short term memory consists of the knowledge we need right now
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`for the task at hand. It has been shown that the number of concepts that can be held
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`in short term memory is between 5 and 9, which is described as the “seven plus or
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`minus two” rule. When the amount of information required for a task exceeds these
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`limits we forget something to make room for a new piece of information. This is
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`why talking with someone will cause us to forget a phone number that we just
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`looked up. The new information from talking pushes out the phone number we just
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`saw. In commodity trading, driving a car, or piloting aircraft there are many pieces
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`of information that must be considered rapidly and simultaneously to perform
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`successfully.
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`B. Foveated perception
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`22.
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` When information is displayed on the screen, the speed and accuracy
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`with which a user can interact is heavily influenced by their ability to find desired
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`information on the screen. The visual search for information is largely controlled
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`by the anatomy of the eye and specifically the retina. Figure 3 shows the anatomy
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`of the eye. Most of the retina is the periphery with a small spot near the center
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`called the macula or the fovea. The periphery has a lot of sensors but they are quite
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`spread out and can only sense gray, not color. This means that most of the image
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`that we see at any one time is gray and quite blurry. The sensors at the fovea are
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`densely packed so that we see in high resolution and they also can sense color.
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`Figure 3 – Eye anatomy
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`23. At first most people do not believe that their eye works this way
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`because they think they see everything in high resolution and in color. In actuality
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`that is your visual memory that is supplying the information as well as the fact that
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`your eye can move very rapidly. As soon as you think about wanting to see
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`something, your eye moves to look at it and it appears in high resolution. This
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`effect can be understood by a simple experiment. Pick a line of text in the middle
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`of this paragraph. Hold your eyes still and without moving them, attempt to read
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`the lines above and below. With double-spaced text you will not be able to see
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`anything but a blur outside of the line you are looking at.
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`24. Because only the fovea can pick up high resolution information, it
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`relies upon the eye’s ability to move very rapidly (5 times per second) and on the
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`periphery to identify important locations to look. However, the periphery is limited
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`in its ability to identify where to look because of its low resolution (blurry images).
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`Good interface design will organize information so that it is easy for the periphery
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`to identify where the eye should look for the desired information. For example, this
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`is why warning lights in a car are displayed around a car’s more frequently viewed
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`speedometer. The claims of the ‘374 patent describe a particular way of
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`constructing a GUI with a specific set of visual relationships to simplify visual
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`search for the information. The claims of the ‘374 patent also specify a particular
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`visual relationship between interactive graphical locations and the presentation of
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`the price axis. Namely, the price levels are mapped to the graphical locations.
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`C. Expressive leverage
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`25. The process of visual search is only part of the technical problem of
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`creating an efficient interactive solution. We also need to minimize the human
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`effort to interact with the GUI. One principle of such interactivity is called
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`“expressive leverage” [OLSE 07]. Expressive leverage is the ratio between the
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`amount of information to be expressed and the amount of human effort required in
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`such expression. High expressive leverage creates very efficient user interfaces.
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`Natural languages such as English are attractive due to their high expressive
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`leverage.
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`26. A very common way to measure human effort in an interaction is the
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`keystroke-level model (KLM) [CARD 08]. This simply counts the number of key
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`or button entries required to accomplish a task. This measure has many limitations
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`but it will serve here as a simple measure of expressive leverage in this discussion.
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`Figure 4 – Form Filling
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`27.
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`In one application a user may be required to enter a shipping address
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`using the form shown in figure 4. To enter the address shown in the figure requires
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`49 key presses plus 5 mouse clicks for a KLM measure of 54. If the user enters this
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`address many times, the designers can introduce the “Use Previous” button that
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`requires only 1 click (expressive leverage of 54/1) to accomplish the task. This is
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`the technique used by Amazon in US Patent 5,960,411. These examples are
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`modern instances of the same kind of innovation found in the power steering
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`patent. Again bits and pixels have replaced shafts, wheels and gears but the
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`concept of magnifying the power of humans to effect desired actions is the same.
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`IX. The ‘374 patent analysis
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`28. The preceding discussion has laid out some of the knowledge and
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`principles found in the field of interface design. We have shown that improvements
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`to interfaces have long been the subject of patentable technologies and provide
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`specific benefits. In particular, the ‘374 patent addresses the technical problem of
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`GUIs with a price axis , where a trader needs to efficiently locate interactive
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`controls relative to a price axis, enter orders efficiently and accurately, and in
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`addition needs to assemble information about a trade with as little human effort as
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`possible. It is not the nature of commodity trading that is claimed in the ‘374 patent
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`but rather the technology of a new mechanism that improves usability, speed and
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`efficiency.
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`Figure 5 – [Figure 3] from the ‘374 patent
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`29. Claim 1 specifies in the second through fourth elements:
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`identifying, by the computing device, a plurality of sequential price
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`levels for the commodity based on the market data, where the plurality
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`of sequential price levels includes the current highest bid price and the
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`current lowest ask price;
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`displaying, by the computing device, a plurality of graphical locations
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`aligned along an axis, where each graphical location is configured to
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`be selected by a single action of a user input device to send a trade
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`order to the electronic exchange, where a price of the trade order is
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`based on the selected graphical location;
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`mapping, by the computing device, the plurality of sequential price
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`levels to the plurality of graphical locations, where each graphical
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`location corresponds to one of the plurality of sequential price levels,
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`where each price level corresponds to at least one of the plurality of
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`graphical locations, and where mapping of the plurality of sequential
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`price levels does not change at a time when at least one of the current
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`highest bid price and the current lowest ask price changes;
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`30. These elements describe a set of price levels that are sequentially
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`placed along a price axis. This sequential placement of prices simplifies visual
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`search by making it much easier to locate a specific price along the axis. These
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`elements also describe that the price levels are mapped to selectable graphical
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`locations be placed in correspondence with the price levels. This placement allows
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`the eye to rapidly locate the selectable region once the price is located. This again
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`simplifies visual search. The fourth element also states that the mapping of the
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`sequential price levels does not change when at least the highest bid price or lowest
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`ask price changes. This is important because market changes, which may be quite
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`volatile, do not impact the location of prices or selectable graphical locations.
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`Holding these visual components in a fixed position on the screen facilitates visual
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`search because the eye is very good at remembering locations and returning rapidly
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`to those locations.
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`31. The fifth element of claim 1 specifies:
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`setting a price and sending the trade order to the electronic exchange
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`in response to receiving by the computing device commands based on
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`user actions consisting of:
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`(l) placing a cursor associated with the user input device over a
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`desired graphical location of the plurality of graphical locations and
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`(2) selecting the desired graphical location through a single action of
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`the user input device.
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`32. This element applies the principle of expressive leverage. By
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`establishing a visual and interactive correspondence between selectable graphical
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`locations and price levels the human user can generate data for a trade order that
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`includes price information without any other effort than a single action of the user
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`input device. This combines the sending of the trade order with the setting of the
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`price using a single action of the user input device.
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`33. The whole of the language of claim 1 is not about executing
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`commodity trades. The claim provides the structure, make-up, and functionality to
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`address technical problems of providing a GUI that is efficient to perceive and
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`accurate and efficient for entering data over the conventional systems (e.g., Fig. 2
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`GUIs) that the patent discloses. Notably, the claimed GUI provides a very specific
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`way of constructing a GUI tool. There would be numerous other ways of
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`constructing a GUI for the purposes of displaying and updating market information
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`and placing a trade order with the usability, speed and efficiency of prior art
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`interfaces. The inventors have applied GUI design knowledge to the particular
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`area of commodities trading to achieve a practical solution of providing a more
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`efficient interface for doing commodity trading for some users. Thus, they have
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`applied technical knowledge to a technical problem.
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`X. Market speed
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`34.
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`In previous work by the inventors and others it was common to
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`provide the current market bid and ask prices in a fixed location in a GUI. Figure 2
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`of the ‘374 patent describes this as the normal user interface for commodity trading
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`before the technology covered by the ‘374 patent was introduced. It is also my
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`understanding that these displayed prices could be clicked to enter an order at the
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`current market price. The problem is that people cannot respond to visual data in
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`less than 200 milliseconds and usually much longer. However, the commodities
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`market changes much faster than that. This means that traders using such a user
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`interface would not always order at the price they thought they were (if they were
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`trying to obtain a particular price) because between the time they decided to order
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`and they could execute a click the price would have changed. The ‘374 method
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`provides an improved GUI for traders who want to enter an order at a particular
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`price because it constructs the GUI in a way that removes that discrepancy between
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`the user’s intended price and an unintended price that was actually selected. This
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`allows for more accurate order entry, addressing this problem.
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`Page 23 of 24
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`XI. References
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`
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`[CARD 80] Card, Stuart K; Moran, Thomas P; Allen, Newell (1980). "The
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`keystroke-level model for user performance time with interactive systems".
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`Communications of the ACM 23 (7): 396–410.
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`[OLSE 07] Olsen, D. R. "Evaluating User Interface Systems Research,"
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`UIST 2007, ACM (2007)
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` declare that all statements made herein of my knowledge are true, and that
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` I
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`all statements made on information and belief are believed to be true, and that
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`these statements were made with the knowledge that willful false statements and
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`the like so made are punishable by fine or imprisonment, or both, under Section
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`1001 of Title 18 of the United States Code.
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`Date:
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`11/10/16
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`By:
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`Page 24 of 24