Trading Technologies International, Inc. v. CQG, INC., --- Fed.Appx. ---- (2017)
`2017 WL 192716
`
`
`
`KeyCite Yellow Flag - Negative Treatment
` Declined to Extend by Phoenix Licensing, L.L.C. v. Consumer Cellular,
`Inc., E.D.Tex., March 8, 2017
`2017 WL 192716
`Only the Westlaw citation is currently available.
`This case was not selected for
`publication in West's Federal Reporter.
`See Fed. Rule of Appellate Procedure 32.1
`generally governing citation of judicial
`decisions issued on or after Jan. 1, 2007.
`See also U.S.Ct. of App. Fed. Cir. Rule 32.1.
`United States Court of Appeals,
`Federal Circuit.
`
`TRADING TECHNOLOGIES
`INTERNATIONAL, INC., Plaintiff-Appellee
`v.
`CQG, INC., CQG, LLC, FKA CQGT,
`LLC, Defendants-Appellants
`
`2016-1616
`|
`Decided: January 18, 2017
`
`Synopsis
`Background: Patent owner brought action alleging
`infringement of its patents directed to method and system
`for electronic trading of stocks, bonds, futures, options,
`and similar products. The United States District Court
`for the Northern District of Illinois, No. 1:05-cv-04811,
`Sharon Johnson Coleman, J., 2015 WL 774655, denied
`alleged infringer's motion for judgment as a matter of law.
`Alleged infringer appealed.
`
`Holdings: The Court of Appeals, Newman, Circuit Judge,
`held that:
`
`[1] patents claimed patent-eligible subject matter, and
`
`[2] even if patents were directed to patent-ineligible
`concept of displaying information on graphical user
`interface, they recited inventive concept sufficient to
`transform nature of claim into patent-eligible application.
`
`Affirmed.
`
`West Headnotes (3)
`
`[1]
`
`[2]
`
`Patents
`Business methods; Internet applications
`Claims in patents directed to method and
`system for electronic trading of stocks, bonds,
`futures, options, and similar products were
`not directed to patent-ineligible concept of
`displaying information on graphical user
`interface, but rather were directed to patent-
`eligible improvements in existing graphical
`user interface devices that had no pre-
`electronic trading analog, and recited more
`than setting, displaying, and selecting data
`or information that was visible on graphical
`user interface device; claims required specific,
`structured graphical user interface paired
`with prescribed functionality directly related
`to graphical user interface's structure that
`was addressed to and resolved specifically
`identified problem in prior state of the art. 35
`U.S.C.A. § 101.
`
`2 Cases that cite this headnote
`
`Patents
`Business methods; Internet applications
`Even if claims in patents directed to method
`and system for electronic trading of stocks,
`bonds, futures, options, and similar products
`were directed to patent-ineligible concept
`of displaying information on graphical user
`interface, they recited
`inventive concept
`sufficient to transform nature of claim
`into patent-eligible application, where claims
`disclosed static price index that allowed
`traders to more efficiently and accurately
`place trades using electronic trading system,
`improving accuracy of trader transactions
`conducted
`via
`conventional
`computer
`implementations of known procedures. 35
`U.S.C.A. § 101.
`
`2 Cases that cite this headnote
`
`[3]
`
`Patents
`
` © 2017 Thomson Reuters. No claim to original U.S. Government Works.
`
`1
`
`IBG 1081
`IBG v. TT
`CBM2016-00054
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`

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`Trading Technologies International, Inc. v. CQG, INC., --- Fed.Appx. ---- (2017)
`2017 WL 192716
`
`In general; utility
`US Patent 6,766,304, US Patent 6,772,132.
`Patentable.
`
`Cases that cite this headnote
`
`Appeal from the United States District Court for the
`Northern District of Illinois in No. 1:05-cv-04811, Judge
`Sharon Johnson Coleman.
`
`Attorneys and Law Firms
`
`ERIKA ARNER, Finnegan, Henderson, Farabow,
`Garrett & Dunner, LLP, Reston, VA, argued for plaintiff-
`appellee. Also represented by CORY C. BELL, Finnegan,
`Henderson, Farabow, Garrett & Dunner, LLP, Boston,
`MA; LEIF R. SIGMOND, JR., MICHAEL DAVID
`GANNON, JENNIFER KURCZ, COLE BRADLEY
`RICHTER, McDonnell, Boehnen, Hulbert & Berghoff,
`LLP, Chicago, IL; STEVEN BORSAND, Trading
`Technologies International, Inc., Chicago, IL.
`
`JOHN C. O'QUINN, Kirkland & Ellis LLP, Washington,
`DC, argued for defendants-appellants. Also represented
`by KENNETH R. ADAMO, EUGENE GORYUNOV,
`MEREDITH ZINANNI, Kirkland & Ellis LLP, Chicago,
`IL; JOHN A. COTIGUALA, ADAM GLENN KELLY,
`WILLIAM JOSHUA VOLLER III, Loeb & Loeb LLP,
`Chicago, IL.
`
`ANDREW BALUCH, Strain PLLC, Washington, DC,
`for amici curiae Gregory Dolin, Richard A. Epstein,
`Christopher Frerking, Irina D. Manta, Adam Mossoff,
`Kristen J. Osenga, Michael Risch, Mark F. Schultz, Ted
`M. Sichelman, David O. Taylor. Also represented by
`STEPHEN G. NAGY, Strain PLLC, Washington, DC.
`
`Before Newman, O'Malley, and Wallach, Circuit Judges.
`
`Opinion
`
`Newman, Circuit Judge.
`
`*1 The CQG companies appeal the decision of the
`United States District Court for the Northern District of
`Illinois, holding that the asserted claims of U.S. Patents
`No. 6,772,132 (“the '132 patent”) and No. 6,766,304 (“the
`'304 patent”) recite patent-eligible subject matter in terms
`of 35 U.S.C. § 101. This appeal relates only to eligibility
`under Section 101. We affirm the district court's decision.
`
`DISCUSSION
`
`Patent owner Trading Technologies International, Inc.
`(“TTI”) charged CQG with infringement of the '132
`patent and the '304 patent. CQG moved for judgment as a
`matter of law, asserting that the claims of these patents are
`directed to patent-ineligible subject matter. The district
`court denied CQG's motion, holding that the claims are
`not directed to an abstract idea and also that they recite an
`inventive concept, such that the subject matter is patent-
`eligible under § 101. Trading Techs. Int'l, Inc. v. CQG, Inc.,
`No. 05-cv-4811, 2015 WL 774655 (N.D. Ill. Feb. 24, 2015)
`(“Dist. Ct. op.”). CQG appeals this holding.
`
`The '132 and '304 patents describe and claim a method
`and system for the electronic trading of stocks, bonds,
`futures, options and similar products. The patents explain
`problems that arise when a trader attempts to enter an
`order at a particular price, but misses the price because the
`market moved before the order was entered and executed.
`It also sometimes occurred that trades were executed
`at different prices than intended, due to rapid market
`movement. This is the problem to which these patents are
`directed.
`
`The patents are for “[a] method and system for reducing
`the time it takes for a trader to place a trade when
`electronically trading on an exchange, thus increasing
`the likelihood that the trader will have orders filled at
`desirable prices and quantities.” '132 patent, Abstract; '304
`patent, Abstract. The patents describe a trading system in
`which a graphical user interface “display [s] the market
`depth of a commodity traded in a market, [ 1 ] including a
`dynamic display for a plurality of bids and for a plurality
`of asks in the market for the commodity and a static
`display of prices corresponding to the plurality of bids
`and asks.” '132 patent col. 3, ll. 11–16; '304 patent col.
`3, ll. 15–20. In the patented system bid and asked prices
`are displayed dynamically along the static display, and the
`system pairs orders with the static display of prices and
`prevents order entry at a changed price.
`
`Both the '132 and the '304 patents have the same
`specification, and the district court treated claim 1 in
`each patent as representative, as agreed by the parties.
`We illustrate the analysis of § 101 with respect to method
`Claim 1 of the '304 patent:
`
` © 2017 Thomson Reuters. No claim to original U.S. Government Works.
`
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`Trading Technologies International, Inc. v. CQG, INC., --- Fed.Appx. ---- (2017)
`2017 WL 192716
`
`1. A method for displaying market information relating
`to and facilitating trading of a commodity being traded
`in an electronic exchange having an inside market with
`a highest bid price and a lowest ask price on a graphical
`user interface, the method comprising;
`
`*2 dynamically displaying a first indicator in one of
`a plurality of locations in a bid display region, each
`location in the bid display region corresponding to a
`price level along a common static price axis, the first
`indicator representing quantity associated with at least
`one order to buy the commodity at the highest bid price
`currently available in the market;
`
`dynamically displaying a second indicator in one of a
`plurality of locations in an ask display region, each
`location in the ask display region corresponding to
`a price level along the common static price axis, the
`second indicator representing quantity associated with
`at least one order to sell the commodity at the lowest
`ask price currently available in the market;
`
`displaying the bid and ask display regions in relation
`to fixed price levels positioned along the common static
`price axis such that when the inside market changes, the
`price levels along the common static price axis do not
`move and at least one of the first and second indicators
`moves in the bid or ask display regions relative to the
`common static price axis;
`
`displaying an order entry region comprising a plurality
`of locations for receiving commands to send trade
`orders, each location corresponding to a price level
`along the common static price axis; and
`
`in response to a selection of a particular location of the
`order entry region by a single action of a user input
`device, setting a plurality of parameters for a trade order
`relating to the commodity and sending the trade order
`to the electronic exchange.
`
`'304 patent col. 12, l. 36–col. 13, l. 3. The '132 claims are
`directed to similar subject matter covering a method and
`system.
`
`The Court's opinion in Alice Corporation Pty. Ltd. v. CLS
`Bank International, ––– U.S. ––––, 134 S.Ct. 2347, 189
`L.Ed.2d 296 (2014), provides the framework for patent-
`eligibility of business methods. The Court explained that
`a patent's
`
`claim falls outside § 101 where (1) it is “directed
`to” a patent-ineligible concept, i.e., a law of nature,
`natural phenomenon, or abstract idea, and (2), if so,
`the particular elements of the claim, considered “both
`individually and ‘as an ordered combination,’ ” do not
`add enough to “ ‘transform the nature of the claim’ into
`a patent-eligible application.”
`
`Id. at 2355 (citations omitted). Patent eligibility under §
`101 is an issue of law, and receives de novo determination
`on appeal. 2
`
`[1] The district court first applied Step 1 of this two-
`step framework. The court held that, rather than reciting
`“a mathematical algorithm,” “a fundamental economic
`or longstanding commercial practice,” or “a challenge
`in business,” the challenged patents “solve problems of
`prior graphical user interface devices ... in the context of
`computerized trading[ ] relating to speed, accuracy and
`usability.” Dist. Ct. op. at *4 (citations omitted). The court
`found that these patents are directed to improvements
`in existing graphical user interface devices that have no
`“pre-electronic trading analog,” and recite more than “
`‘setting, displaying, and selecting’ data or information
`that is visible on the [graphical user interface] device.” Id.
`
`*3 The district court explained that the challenged
`patents do not simply claim displaying information
`on a graphical user interface. The claims require a
`specific, structured graphical user interface paired with a
`prescribed functionality directly related to the graphical
`user interface's structure that is addressed to and resolves
`a specifically identified problem in the prior state of
`the art. The district court concluded that the patented
`subject matter meets the eligibility standards of Alice
`Step 1. We agree with this conclusion, for all of the
`reasons articulated by the district court, including that
`the graphical user interface system of these two patents is
`not an idea that has long existed, the threshold criterion
`of an abstract idea and ineligible concept, as the court
`explained in Mayo Collaborative Services v. Prometheus
`Laboratories, Inc., 566 U.S. 66, 73, 132 S.Ct. 1289,
`182 L.Ed.2d 321 (2012) (the patent must “amount to
`significantly more in practice than a patent upon the
`[ineligible concept itself]”).
`
`[2] The district court alternatively continued the analysis
`under Alice Step 2, and determined that the challenged
`claims recite an “inventive concept.” The court observed
`
` © 2017 Thomson Reuters. No claim to original U.S. Government Works.
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`Trading Technologies International, Inc. v. CQG, INC., --- Fed.Appx. ---- (2017)
`2017 WL 192716
`
`that Step 2 “requires something different than pre-
`AIA §§ 102 and 103.” Dist. Ct. op. at 8. The court
`identified the static price index as an inventive concept
`that allows traders to more efficiently and accurately place
`trades using this electronic trading system. The court
`distinguished this system from the routine or conventional
`use of computers or the Internet, and concluded that
`the specific structure and concordant functionality of the
`graphical user interface are removed from abstract ideas,
`as compared to conventional computer implementations
`of known procedures. Thus the court held that the criteria
`of Alice Step 2 were also met.
`
`The district court's rulings are in accord with precedent.
`Precedent has recognized that specific technologic
`modifications to solve a problem or
`improve the
`functioning of a known system generally produce patent-
`eligible subject matter. In DDR Holdings, LLC v.
`Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), the court
`upheld the patent eligibility of claims “necessarily rooted
`in computer technology” that “overcome a problem
`specifically arising in the realm of computer networks.”
`Id. at 1257. Similarly, “claimed process[es] us[ing] a
`combined order of specific rules” that improved on
`existing technological processes were deemed patent-
`eligible in McRO, Inc. v. Bandai Namco Games America
`Inc., 837 F.3d 1299, 1315 (Fed. Cir. 2016). Claims that
`were “directed to a specific improvement to the way
`computers operate, embodied in [a] self-referential table,”
`were deemed eligible in Enfish, LLC v. Microsoft Corp.,
`822 F.3d 1327, 1334 (Fed. Cir. 2016).
`
`Illustrating the operation of this principle to facts that
`negated patent eligibility, claims “drawn to the idea itself”
`of “out-of-region broadcasting on a cellular telephone,”
`without implementing programmatic structure, were
`deemed ineligible in Affinity Labs of Tex. v. DIRECTV,
`LLC, 838 F.3d 1253, 1258 (Fed. Cir. 2016). Similarly,
`claims directed to the “idea of generating a second menu
`from a first menu and sending the second menu to
`another location” were held patent-ineligible in Apple,
`Inc. v. Ameranth, Inc., 842 F.3d 1229 (Fed. Cir. 2016).
`Claims directed to the “process of gathering and analyzing
`information of a specified content, then displaying the
`results,” without “any particular assertedly inventive
`technology for performing those functions,” were held
`ineligible in Electric Power Grp., LLC v. Alstom S.A., 830
`F.3d 1350, 1354 (Fed. Cir. 2016). As these cases illustrate,
`ineligible claims generally lack steps or limitations specific
`
`to solution of a problem, or improvement in the
`functioning of technology.
`
`For some computer-implemented methods, software may
`be essential to conduct the contemplated improvements.
`Enfish, 822 F.3d at 1339 (“Much of the advancement
`made in computer technology consists of improvements
`to software that, by their very nature, may not be defined
`by particular physical features but rather by logical
`structures and processes.”). Abstraction is avoided or
`overcome when a proposed new application or computer-
`implemented function is not simply the generalized use
`of a computer as a tool to conduct a known or obvious
`process, but instead is an improvement to the capability of
`the system as a whole. Id. at 1336.
`
`*4 We reiterate the Court's recognition that “at some
`level, all inventions ... embody, use, reflect, rest upon,
`or apply laws of nature, natural phenomena, or abstract
`ideas.” Alice, 134 S.Ct. at 2354, quoting Mayo, 566 U.S.
`at 71, 132 S.Ct. 1289. This threshold level of eligibility is
`often usefully explored by way of the substantive statutory
`criteria of patentability, for an invention that is new,
`useful and unobvious is more readily distinguished from
`the generalized knowledge that characterizes ineligible
`subject matter. This analysis is facilitated by the Court's
`guidance whereby the claims are viewed in accordance
`with “the general rule that patent claims ‘must be
`considered as a whole’.” Alice, 134 S.Ct. at 2355 n.3,
`quoting Diamond v. Diehr, 450 U.S. 175, 188, 101 S.Ct.
`1048, 67 L.Ed.2d 155 (1981).
`
`As demonstrated in recent jurisprudence directed to
`eligibility, and as illustrated in the cases cited ante,
`the claim elements are considered in combination for
`evaluation under Alice Step 1, and then individually
`when Alice Step 2 is reached. See Bascom Global
`Internet Services v. AT&T Mobility LLC, 827 F.3d
`1341 (Fed. Cir. 2016). Applying an overview of this
`evolving jurisprudence, the public interest in innovative
`advance is best served when close questions of eligibility
`are considered along with the understanding flowing
`from review of the patentability criteria of novelty,
`unobviousness, and enablement, for when these classical
`criteria are evaluated, the issue of subject matter eligibility
`is placed in the context of the patent-based incentive to
`technologic progress.
`
` © 2017 Thomson Reuters. No claim to original U.S. Government Works.
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`Trading Technologies International, Inc. v. CQG, INC., --- Fed.Appx. ---- (2017)
`2017 WL 192716
`
`CONCLUSION
`
`It is not disputed that the TTI System improves the
`accuracy of trader transactions, utilizing a software-
`implemented programmatic met. For Section 101
`purposes, precedent does not consider the substantive
`criteria of patentability. For Section 101 purposes,
`the claimed subject matter is “directed to a specific
`improvement to the way computers operate,” id. for the
`claimed graphical user interface method imparts a specific
`functionality to a trading system “directed to a specific
`implementation of a solution to a problem in the software
`arts.” Id. at 1339.
`
`The district court's analysis and conclusions conform to
`precedent. The decision that the subject matter claimed
`in the '132 and '304 patents is patent-eligible in terms of
`Section 101 is affirmed. No other statutory criteria of
`patentability are before us on this appeal, and we state no
`opinion thereon.
`
`AFFIRMED
`
`All Citations
`
`--- Fed.Appx. ----, 2017 WL 192716
`
`Footnotes
`1
`“A commodity's market depth is the current bid and ask prices and quantities in the market.” '132 patent col. 3, ll. 69–
`61; '304 patent col. 3, ll. 63–65.
`The parties dispute whether the district court erred in requiring proof of ineligibility under § 101 by clear and convincing
`evidence. Because our review is de novo, and because under either standard the legal requirements for patentability are
`satisfied, we need not address this dispute.
`
`2
`
`End of Document
`
`© 2017 Thomson Reuters. No claim to original U.S. Government Works.
`
` © 2017 Thomson Reuters. No claim to original U.S. Government Works.
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