Trials@uspto.gov
`571-272-7822
`
`Paper 10
`Date: March 18, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`GAIN CAPITAL HOLDINGS, INC.,
`Petitioner,
`v.
`OANDA CORPORATION,
`Patent Owner.
`
`CBM2020-00021
`Patent 8,392,311 B2
`
`
`
`
`
`
`
`
`
`Before SALLY C. MEDLEY, JUSTIN T. ARBES, and
`SUSAN L. C. MITCHELL, Administrative Patent Judges.
`ARBES, Administrative Patent Judge.
`
`DECISION
`Denying Institution of Covered Business Method Patent Review
`35 U.S.C. § 324
`
`I.
`INTRODUCTION
`A. Background and Summary
`Petitioner GAIN Capital Holdings, Inc. filed a Petition (Paper 2,
`“Pet.”) requesting a covered business method (“CBM”) patent review of
`claims 1–7 of U.S. Patent No. 8,392,311 B2 (Ex. 1001, “the ’311 patent”)
`pursuant to 35 U.S.C. § 321(a). Patent Owner OANDA Corporation filed a
`Preliminary Response (Paper 8, “Prelim. Resp.”) pursuant to 35 U.S.C.
`
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`CBM2020-00021
`Patent 8,392,311 B2
`§ 323. Pursuant to 35 U.S.C. § 324(a), the Director may not authorize a
`covered business method patent review unless the information in the
`petition, if unrebutted, “would demonstrate that it is more likely than not that
`at least 1 of the claims challenged in the petition is unpatentable.” For the
`reasons that follow, we do not institute a covered business method patent
`review.
`
`
`B. Related Matters
`Petitioner states that the ’311 patent is asserted in OANDA Corp. v.
`GAIN Capital Holdings, Inc., No. 2:20-cv-5784 (D.N.J.), and related to two
`other patents, U.S. Patent Nos. 7,146,336 B2 (Ex. 1002, “the ’336 patent”)
`and 7,496,534 B2, challenged in Cases CBM2020-00022 and
`CBM2020-00023, respectively. Pet. 2–3.
`
`
`C. The ’311 Patent
`The ’311 patent discloses a system and method that “allows traders to
`trade currencies over a computer network.” Ex. 1001, col. 1, l. 50–col. 2,
`l. 48, col. 3, ll. 10–12. According to the ’311 patent, trading in a
`“traditional on-line currency market” involved a “three-way handshake”
`with the following steps:
`(1) the trader specifies to a dealer the currency pair and the
`amount that he would to trade (but does not specify whether he
`would like to buy or sell); (2) the dealer specifies to the trader
`both a bid and an ask price and gives the trader several seconds
`to respond (the dealer not knowing whether the trader will buy,
`sell, or reject the offer); and (3) the trader either rejects the offer
`or specifies whether he is buying or selling (his response must
`occur within a time frame of a few seconds).
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`Patent 8,392,311 B2
`Id. at col. 1, ll. 22–35. The “three-way handshake” process was “impractical
`because of Internet delays: the trader might not actually have a few seconds
`to respond before the dealer withdraws the offer.” Id. at col. 1, ll. 32–35.
`Corporate firewalls also “inhibit[ed] the ability of on-line trading systems to
`access information from and transfer information to users behind corporate
`firewalls.” Id. at col. 1, ll. 39–46. The ’311 patent seeks to overcome those
`issues by implementing a system that allows traders to “obtain real-time data
`feeds of current exchange rates” and “place buy and sell orders in the
`real-time market.” Id. at col. 3, ll. 17–22.
`Figure 1 of the ’311 patent is reproduced below.
`
`
`Figure 1 depicts the three parties involved in the trading system,
`communicating with each other over the Internet: “(1) traders that are
`distributed around the world; (2) Trading System servers; and (3) ‘Partners’
`consisting of the financial institution(s) through which real currency
`exchange trades are executed, and from which real-time data feeds are
`obtained.” Id. at col. 3, ll. 37–42. Traders interact with the system via a
`web page with a Java applet. Id. at col. 3, ll. 17–22, 57–64, Figs. 2, 5. The
`Trading System servers include various “modules,” such as a database
`management system (DBMS), server front-end, rate server/pricing engine,
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`CBM2020-00021
`Patent 8,392,311 B2
`value at risk (VAR) server, transaction server, interest rate manager, trade
`manager, margin control manager, trading system monitor, hedging engine,
`partner bank interface, and computer systems monitor. Id. at col. 1,
`ll. 50–60, col. 6, l. 15–col. 9, l. 38.
`The ’311 patent discloses a “two-way handshake” process involving
`the following steps, which avoids the “timing constraints” of the prior
`“three-way handshake” process:
`(1) a trader specifies in her trade order: (a) a currency pair;
`(b) a desired amount to trade; (c) whether she wishes to buy or
`sell; and (optionally) (d) upper and lower limits on an acceptable
`exchange rate; and (2) a dealer (in this case, a preferred Trading
`System) executes the trade using the most current “market rates”
`(as calculated by the system). However, the system only
`executes the order if the calculated market rate lies above any
`specified lower limit and below any specified upper limit.
`Id. at col. 4, ll. 8–23. A trader makes a trade request by entering the order
`information and pressing a button, causing a message to be sent to the
`Trading System server “where the market price is calculated based on such
`factors as market data, size of the transaction, time of day, the Trading
`System’s current exposure, and predictions on market direction. The trade
`order is executed using this market price.” Id. at col. 4, ll. 42–51. “As such,
`the Trading System operates as a market maker.” Id. at col. 4, ll. 52–53.
`“A message is then sent back to the trader with specific trade details” in a
`pop-up window on the trader’s web browser. Id. at col. 4, ll. 53–56.
`
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`CBM2020-00021
`Patent 8,392,311 B2
`Figure 16 of the ’311 patent is reproduced below.
`
`
`Figure 16 depicts the steps of the disclosed trading method. Id. at col. 3,
`ll. 4–5. “At step 1605, a trader desiring to trade opens a Trading Station
`display, and at step 1610 clicks a ‘Buy/Sell’ button 510 on the Trading
`Station display.” Id. at col. 4, l. 64–col. 5, l. 2. “At step 1615 an order
`window is displayed” and “[a]t step 1620 the trader decides whether to place
`a market order or an entry order.” Id. at col. 5, ll. 2–4. “Market Orders are
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`Patent 8,392,311 B2
`orders that are transacted immediately based on market exchange rates,”
`whereas “Entry Orders are orders that are executed when the exchange rate
`crosses a certain threshold.” Id. at col. 15, ll. 61–64. At steps 1625–1635,
`the trader enters order parameters depending on the type of order. Id. at
`col. 5, ll. 4–10. At step 1640, “the trader submits the order by clicking a
`‘Submit’ button.” Id. at col. 5, ll. 11–14. “At step 1645 data describing the
`order is sent by the Trading Station application to a Trading System server,
`where the data is stored. At step 1650 a current market price for the
`currency the trader desires to purchase is calculated.” Id. at col. 5, ll. 14–18.
`“At step 1655 the trader’s order is executed if (a) the trader’s order is a
`market order and the calculated market price is within the limits set by the
`trader in the market order form” or “(b) [the] order is an entry order and the
`calculated market price meets the threshold(s) specified in the Entry order
`form.” Id. at col. 5, ll. 18–23. “At step 1660 the Trading System server
`sends trade status data to the trader’s Trading Station application. This data
`includes an indication that the order has been executed, if that is the case,
`and at any rate includes an indication that the order has been received.” Id.
`at col. 5, ll. 24–28. “At step 1665 the Trading Station application displays
`an order acknowledgment window . . . that displays order status
`information.” Id. at col. 5, ll. 28–30.
`
`
`D. Illustrative Claims
`Challenged claims 1 and 7 of the ’311 patent are independent.
`Claims 2–6 depend from claim 1. Claims 1 and 7 recite:
`1. A method of trading currencies over a computer
`network connecting a trading system server and at least one
`trading client system, comprising the steps of:
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`Patent 8,392,311 B2
`trading system server, determining and
`the
`(i) at
`dynamically maintaining a plurality of current exchange rates,
`each current exchange rate relating to a pair of currencies and
`including a first price to buy a first currency of the pair with
`respect to a second currency of the pair and a second price to sell
`the first currency of the pair with respect to the second currency
`of the pair;
`(ii) transmitting data from the trading system server to a
`trading client system, the transmitted data representing at least
`one current exchange rate at the time of the transmission;
`(iii) at the trading client system, displaying the first and
`second prices for each received current exchange rate to a user;
`(iv) at the trading client system, accepting input from the
`user identifying a pair of currencies the user desires to trade, an
`amount of at least one currency of the pair desired to be traded
`and a requested trade price at which it is desired to effect the
`trade;
`(v) transmitting the accepted input from the trading client
`system to the trading system server;
`(vi) at the trading system server, comparing the requested
`trade price to the respective first price or second price of the
`corresponding current exchange rate at that time and, if the
`respective first price or second price of the corresponding current
`exchange rate at that time is equal to or better than the requested
`trade price, effecting the trade at the corresponding respective
`current exchange rate first price or second price and if the
`corresponding current exchange rate is worse than the requested
`trade price, refusing the trade; and
`(vii) transmitting from the trading system server to the
`trading client system an indication of whether the trade was
`refused or transacted and, if transacted, an indication of the price
`the trade was transacted at.
`7. A method of trading currencies over a computer
`network connecting a trading system server and at least one
`trading client system, comprising the steps of:
`(i) at
`the
`trading system server, determining and
`dynamically maintaining a plurality of current exchange rates,
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`CBM2020-00021
`Patent 8,392,311 B2
`each current exchange rate relating to a pair of currencies and
`including a first price to buy a first currency of the pair with
`respect to a second currency of the pair and a second price to sell
`the first currency of the pair with respect to the second currency
`of the pair;
`(ii) transmitting data from the trading system server to a
`trading client system, the transmitted data representing at least
`one current exchange rate at the time of the transmission;
`(iii) receiving at the trading system server input from a
`user of the trading client system identifying a pair of currencies
`the user desires to trade, an amount of at least one currency of
`the pair desired to be traded and a requested trade price at which
`it is desired to effect the trade;
`(iv) at the trading system server, comparing the requested
`trade price to the respective first price or second price of the
`corresponding current exchange rate at that time and, if the
`respective first price or second price of the corresponding current
`exchange rate at that time is equal to or better than the requested
`trade price, effecting the trade at the corresponding respective
`current exchange rate first price or second price and if the
`corresponding current exchange rate is worse than the requested
`trade price, refusing the trade; and
`(v) transmitting from the trading system server to the
`trading client system an indication of whether the trade was
`refused or transacted and, if transacted, an indication of the price
`the trade was transacted at.
`
`
`E. Evidence
`Petitioner filed a declaration from Bernard S. Donefer (Exhibit 1008)
`with its Petition. Patent Owner filed declarations from Ivan Zatkovich
`(Exhibit 2002) and one of the two named inventors of the ’311 patent,
`Michael Stumm, Ph.D. (Exhibit 2005), with its Preliminary Response.
`
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`CBM2020-00021
`Patent 8,392,311 B2
`
`F. Asserted Ground
`Petitioner challenges claims 1–7 of the ’311 patent on the ground that
`the claims do not recite patent-eligible subject matter under 35 U.S.C. § 101.
`Pet. 4, 49–81.
`
`
`II. ANALYSIS
`A. Level of Ordinary Skill in the Art
`Petitioner asserts that a person of ordinary skill in the art at the time of
`the ’311 patent (March 2001) would have, “through education or practical
`experience, obtained a working knowledge of electronic trading systems
`from both the computer science and finance perspectives,” including (1) “the
`equivalent of a bachelor’s degree in computer science, information systems,
`or a related field, and at least two years of work experience developing
`electronic trading systems,” and (2) “the equivalent of a bachelor’s degree in
`finance, economics, or a related field, and . . . knowledge of computer
`systems” for electronic trading. Pet. 17 (citing Ex. 1008 ¶ 25). Patent
`Owner states that it agrees with Petitioner’s proposed definition for purposes
`of its Preliminary Response. Prelim. Resp. 19. Based on the record
`presented, including our review of the ’311 patent and the types of problems
`and solutions described in the ’311 patent and cited reference materials,
`we agree with Petitioner’s proposed definition of the level of ordinary skill
`in the art and apply it for purposes of this Decision. See, e.g., Ex. 1001,
`col. 1, ll. 20–46 (describing in the “Background” section of the ’311 patent
`various aspects of a “traditional on-line currency market”).
`
`
`
`
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`
`B. Claim Interpretation
`We interpret the challenged claims
`using the same claim construction standard that would be used to
`construe the claim in a civil action under 35 U.S.C. 282(b),
`including construing the claim in accordance with the ordinary
`and customary meaning of such claim as understood by one of
`ordinary skill in the art and the prosecution history pertaining to
`the patent.
`37 C.F.R. § 42.300(b) (2019). Petitioner argues that the terms of the
`challenged claims should be given their “ordinary and customary meaning,”
`but does not propose express interpretations for any terms. Pet. 33. Patent
`Owner also does not propose any interpretations in its Preliminary Response.
`We conclude that no claim terms require express interpretation to determine
`whether to institute a covered business method patent review. See Nidec
`Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d 1013, 1017
`(Fed. Cir. 2017) (“Because we need only construe terms ‘that are in
`controversy, and only to the extent necessary to resolve the controversy,’
`we need not construe [a particular claim limitation] where the construction is
`not ‘material to the . . . dispute.’” (citation omitted)).
`
`
`C. Eligibility for Covered Business Method Patent Review
`Section 18 of the Leahy-Smith America Invents Act, Pub. L.
`No. 112-29, 125 Stat. 284 (2011) (“AIA”), provides for the creation of a
`transitional program for reviewing covered business method patents, and
`limits reviews to persons or their privies that have been sued for
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`Patent 8,392,311 B2
`infringement or charged with infringement1 of a “covered business method
`patent,” which does not include patents for “technological inventions.”2
`AIA §§ 18(a)(1)(B), 18(d)(1); see 37 C.F.R. § 42.302. Petitioner bears the
`burden of demonstrating that the ’311 patent is a “covered business method
`patent.” See 37 C.F.R. § 42.304(a).
`
`
`1. Used in the Practice, Administration, or Management of a
`Financial Product or Service
`A “covered business method patent” is “a patent that claims a method
`or corresponding apparatus for performing data processing or other
`operations used in the practice, administration, or management of a financial
`product or service, except that the term does not include patents for
`technological inventions.” AIA § 18(d)(1); see 37 C.F.R. § 42.301(a).
`To determine whether a patent is eligible for covered business method patent
`review, the focus is on the claims. See Unwired Planet, LLC v. Google Inc.,
`841 F.3d 1376, 1382 (Fed. Cir. 2016) (“[Covered business method patents]
`are limited to those with claims that are directed to methods and apparatuses
`of particular types and with particular uses ‘in the practice, administration,
`or management of a financial product or service.’”); Blue Calypso, LLC v.
`Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016) (approving of prior
`Board decisions that “properly focuse[d] on the claim language at issue,”
`and finding that the challenged patent was eligible for covered business
`method patent review because the claims recited “an express financial
`
`1 Petitioner was sued for infringement of the ’311 patent on May 11, 2020,
`in OANDA Corp. v. GAIN Capital Holdings, Inc., No. 2:20-cv-5784
`(D.N.J.). Pet. 2.
`2 Petitioner filed its Petition on September 14, 2020, prior to the expiration
`of the transitional program.
`
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`Patent 8,392,311 B2
`component in the form of a subsidy” that was “central to the operation of the
`claimed invention”). A patent need have only one claim directed to a
`covered business method to be eligible for review. Transitional Program for
`Covered Business Method Patents—Definitions of Covered Business
`Method Patent and Technological Invention; Final Rule, 77 Fed. Reg.
`48,734, 48,736 (Aug. 14, 2012).
`Petitioner cites claims 1–7 of the ’311 patent in support of its
`contention that the ’311 patent is a covered business method patent, arguing
`that “[t]he financial nature of the claims is apparent from the claim language
`itself and confirmed by the [S]pecification.” Pet. 36–37. Claim 1 recites a
`method of “trading currencies over a computer network” comprising
`“determining and dynamically maintaining a plurality of current exchange
`rates” where “each current exchange rate relat[es] to a pair of currencies”
`and includes first and second “price[s]” to buy and sell, respectively, “a first
`currency of the pair with respect to a second currency of the pair”; accepting
`input from a user identifying “a pair of currencies the user desires to trade,
`an amount of at least one currency of the pair desired to be traded and a
`requested trade price at which it is desired to effect the trade”; “comparing
`the requested trade price to the respective first price or second price of the
`corresponding current exchange rate at that time”; and “effecting” or
`“refusing” the trade.
`We are persuaded that performing the recited steps pertaining to
`exchange rates, prices for buying and selling currencies, and accepting input
`from a user desiring to trade a pair of currencies constitutes providing a
`financial service. Patent Owner does not dispute Petitioner’s arguments in
`its Preliminary Response, arguing only that the ’311 patent is for a
`technological invention and thus is unavailable for covered business method
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`CBM2020-00021
`Patent 8,392,311 B2
`patent review. Prelim. Resp. 19–32. Petitioner has shown that at least
`claim 1 recites a method for performing data processing or other operations
`used in the practice, administration, or management of a financial product or
`service, as required by § 18(d)(1) of the AIA.
`
`
`2. Technological Invention
`The definition of “covered business method patent” in § 18(d)(1) of
`the AIA does not include patents for “technological inventions.” To
`determine whether a patent is for a technological invention, we consider
`“whether the claimed subject matter as a whole [(1)] recites a technological
`feature that is novel and unobvious over the prior art; and [(2)] solves a
`technical problem using a technical solution.” 37 C.F.R. § 42.301(b).
`In general, the Patent Trial and Appeal Board Consolidated Trial Practice
`Guide (Nov. 2019), available at https://www.uspto.gov/
`TrialPracticeGuideConsolidated (“Trial Practice Guide”), provides the
`following guidance with respect to claim content that typically does not
`exclude a patent under the category of a “technological invention”:
`(a) Mere recitation of known technologies, such as
`computer hardware, communication or computer networks,
`software, memory, computer-readable
`storage medium,
`scanners, display devices or databases, or specialized machines,
`such as an ATM or point of sale device.
`(b) Reciting the use of known prior art technology to
`accomplish a process or method, even if that process or method
`is novel and non-obvious.
`(c) Combining prior art structures to achieve the normal,
`expected, or predictable result of that combination.
`Id. at 42–43. A claim does not include a “technological feature” if its
`“elements are nothing more than general computer system components used
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`Patent 8,392,311 B2
`to carry out the claimed process.” Blue Calypso, 815 F.3d at 1341; see also
`Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1327 (Fed. Cir.
`2015) (“the presence of a general purpose computer to facilitate operations
`through uninventive steps does not change the fundamental character of an
`invention”).
`For the technological invention exception to apply, both prongs
`(1) and (2) of the inquiry must be met affirmatively, meaning that a negative
`answer under either prong renders inapplicable the technological invention
`exception to covered business method patent review. See Apple, Inc. v.
`Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016) (“We need not address
`this argument regarding whether the first prong of 37 C.F.R. § 42.301(b)
`was met, as we affirm the Board’s determination on the second prong of the
`regulation—that the claimed subject matter as a whole does not solve a
`technical problem using a technical solution.”); Blue Calypso, 815 F.3d at
`1341 (addressing only whether the claimed invention solves a technical
`problem using a technical solution). We address the first prong herein,
`which is dispositive.
`Petitioner argues that none of the challenged claims recite a
`technological feature that is novel and unobvious over the prior art, citing
`the testimony of Mr. Donefer as support. Pet. 38–42 (citing Ex. 1008
`¶¶ 83–86, 101–114, 116–152). With respect to claim 1 in particular,
`Petitioner discusses each step of the claim and contends that the steps “are
`performed by generic computers—a ‘trading system server’ and a ‘trading
`client system.’” Id. at 38–40. Petitioner further points out that the
`Specification “confirms the generic nature of the computer components.”
`Id. at 8, 40.
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`Claim 1 recites a “trading system server” connected to a “trading
`client system,” with certain functionality performed “at” each device. The
`claim recites the trading system server “determining and dynamically
`maintaining” current exchange rates, “transmitting” “data” and an
`“indication” about the trade to the trading client system, and “comparing”
`prices (steps (i), (ii), (vi), and (vii)). The claim recites the trading client
`system “displaying” prices to a user, “accepting input from the user,” and
`“transmitting” that input to the trading system server (steps (iii), (iv),
`and (v)). The Specification describes an exemplary trading system server
`that uses “standard, state-of-the-art database technology” to “maintain[] the
`accounts of all traders and execute[] trades issued by the traders” and
`includes a server front-end “encapsulat[ing] a standard Web server (a la
`Apache)” to communicate with the trading client system. Ex. 1001, col. 5,
`ll. 48–50, col. 6, ll. 25–27, 30–32, col. 6, l. 65–col. 7, l. 2 (emphasis added).
`The Specification further describes an exemplary trading client system
`where “[t]he end user interface to the Trading System is a Web page that can
`be displayed on any standard Java-enabled browser.” Id. at col. 3, ll. 57–58
`(emphasis added). We agree with Petitioner that the claim recites
`well-known computer components and known technologies for
`communicating information between those components, which indicates that
`the ’311 patent is not a patent for a technological invention. See Trial
`Practice Guide, 42–43 (examples a and b).
`Patent Owner argues that Petitioner fails to analyze claim 1 as a whole
`and that, when considered together, “the steps [of claim 1] reveal that
`[Patent Owner] is claiming a novel and unobvious system architecture
`capable of executing a new, different kind of currency trading order,” citing
`the testimony of Mr. Zatkovich as support. Prelim. Resp. 20–23, 25–28
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`(citing Ex. 2002 ¶¶ 29, 32, 33, 36, 54–85, 88–91, 107–109). That order,
`which Patent Owner calls a “Market Order with Requested Price” (MORP),
`involves two communications (rather than three, as in the prior art) where
`the “trader specifies a price based on real-time price information and [] the
`system executes the order immediately and at that requested price.” Id. at 2,
`23 (emphasis omitted). Even assuming that the type of trading order
`described by Patent Owner is novel and unobvious over the prior art,
`however, we do not see why it would constitute a “technological feature,”
`and Patent Owner has pointed us to no novel technical components in the
`claim constituting an unobvious system architecture that would carry out
`such a trading order. See id. at 22–23. Claim 1 recites a method, not a
`“system architecture” as Patent Owner contends. See id. at 20, 22–23, 27.
`And the only technical components in the claim are the generically recited
`“trading system server” and “trading client system.”
`Patent Owner further argues that Petitioner failed to provide “the
`requisite analysis or evidence demonstrating either anticipation or
`obviousness over the prior art,” contrary to the requirements of 37 C.F.R.
`§ 42.301(b). Prelim. Resp. 23–25. For purposes of the technological
`invention exception, we consider whether a claim, as a whole, recites a
`“technological feature” that is novel and unobvious over the prior art.
`37 C.F.R. § 42.301(b). We do not agree that this requires Petitioner to assert
`and prove unpatentability of the claim under 35 U.S.C. §§ 102 or 103. The
`relevant question is not whether the claim is novel and unobvious, but rather
`whether the claim recites a “technological feature” that is novel and
`unobvious over the prior art. Claim 1 recites only two technical
`components, namely a “trading system server” and “trading client system,”
`which communicate over a “computer network.” The components are
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`recited in generic terms, and servers and client systems were plainly known
`in the prior art.
`We agree with Petitioner that claim 1 does not recite a technological
`feature that is novel and unobvious over the prior art. Accordingly, we need
`not determine whether claim 1 solves a technical problem using a technical
`solution.
`
`
`3. Conclusion
`For the foregoing reasons, we conclude that Petitioner has met its
`burden to show that the ’311 patent is a “covered business method patent”
`and is eligible for covered business method patent review.
`
`
`D. Legal Standards
`An invention is patent-eligible if it claims a “new and useful process,
`machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
`However, the Supreme Court has long interpreted 35 U.S.C. § 101 to include
`implicit exceptions: “[l]aws of nature, natural phenomena, and abstract
`ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’l, 573 U.S. 208,
`216 (2014).
`In determining whether a claim falls within an excluded category, we
`are guided by the Supreme Court’s two-step framework, described in Mayo
`and Alice. Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus
`Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework,
`we first determine what concept the claim is “directed to.” See Alice,
`573 U.S. at 219 (“On their face, the claims before us are drawn to the
`concept of intermediated settlement, i.e., the use of a third party to mitigate
`settlement risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010)
`
`17
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`CBM2020-00021
`Patent 8,392,311 B2
`(“Claims 1 and 4 in petitioners’ application explain the basic concept of
`hedging, or protecting against risk.”).
`Concepts determined to be abstract ideas, and thus patent-ineligible,
`include certain methods of organizing human activity, such as fundamental
`economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
`mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
`mental processes (Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts
`determined to be patent-eligible include physical and chemical processes,
`such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 191
`(1981)); “tanning, dyeing, making water-proof cloth, vulcanizing India
`rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
`252, 267–68 (1854))); and manufacturing flour (Benson, 409 U.S. at 69
`(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
`If the claim is “directed to” an abstract idea, we turn to the second
`step of the Alice and Mayo framework, where “we must examine the
`elements of the claim to determine whether it contains an ‘inventive
`concept’ sufficient to ‘transform’ the claimed abstract idea into a
`patent-eligible application.” Alice, 573 U.S. at 221 (quotation marks
`omitted). “A claim that recites an abstract idea must include ‘additional
`features’ to ensure ‘that the [claim] is more than a drafting effort designed to
`monopolize the [abstract idea].’” Id. (quoting Mayo, 566 U.S. at 77).
`“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
`that abstract idea into a patent-eligible invention.” Id.
`The Office published revised guidance on the application of § 101.
`2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50
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`CBM2020-00021
`Patent 8,392,311 B2
`(Jan. 7, 2019) (“Guidance”).3 Under the Guidance, we first look to whether
`the claim recites:
`(1) any judicial exceptions, including certain groupings of
`abstract ideas (i.e., mathematical concepts, certain methods of
`organizing human activity such as a fundamental economic
`practice, or mental processes); and
`(2) additional elements that integrate the judicial exception into
`a practical application (see MPEP § 2106.05(a)–(c), (e)–(h)).
`Only if a claim (1) recites a judicial exception and (2) does not integrate that
`exception into a practical application, do we then look to whether the claim:
`(3) adds a specific limitation beyond the judicial exception that
`is not “well-understood, routine, conventional” in the field (see
`MPEP § 2106.05(d)); or
`(4) simply appends well-understood, routine, conventional
`activities previously known to the industry, specified at a high
`level of generality, to the judicial exception.
`See Guidance, 84 Fed. Reg. at 56.
`
`
`E. Asserted Ground Based on 35 U.S.C. § 101
`1. Step 1: Statutory Category
`Petitioner challenges claims 1–7 on the ground that the claims fail to
`recite patent-eligible subject matter under 35 U.S.C. § 101.4 Pet. 49–81.
`
`
`3 We also have considered the October 2019 Patent Eligibility Guidance
`Update at https://www.uspto.gov/sites/default/files/documents/peg_oct_
`2019_update.pdf.
`4 Petitioner incorrectly argues that its “[P]etition demonstrates a reasonable
`likelihood that claims 1–7 are not directed to patent-eligible subject matter
`under 35 U.S.C. § 101.” Pet. 2. We assume this to be a typographical error,
`as the correct standard for covered business method patent reviews is
`whether the information in the petition, if unrebutted, “would demonstrate
`that it is more likely than not that at least 1 of the claims challenged in the
`petition is unpatentable.” 35 U.S.C. § 324(a).
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`CBM2020-00021
`Patent 8,392,311 B2
`We first determine “whether the claim is to a statutory category (Step 1),”
`namely a process, machine, manufacture, or composition of matter.
`Guidance, 84 Fed. Reg. at 53–54. Claims 1–7 of the ’311 patent each recite
`a “method,” which is a “process” that is statutory subject matter under § 101.
`
`2. Step 2A, Prong 1: Whether the Claims Recite an Abstract Idea
`Under Step 2A, Prong 1 of the Guidance,