Court Opinion

ID: 9931539
Source: CourtListenerOpinion
Date Created: 2024-02-09 15:01:17.772434+00
Date Added: 2024-06-11T12:22:40.459611
License: Public Domain

Case: 23-1542      Document: 28    Page: 1    Filed: 02/09/2024

           NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                    ______________________

          IN RE: JASON ARTHUR ZIMMERMAN,
                         Appellant
                  ______________________

                          2023-1542
                    ______________________

     Appeal from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in No. 12/503,494.
                   ______________________

                  Decided: February 9, 2024
                   ______________________

       JASON A. ZIMMERMAN, Toronto, Ontario, Canada, pro
 se.

    MEREDITH HOPE SCHOENFELD, Office of the Solicitor,
 United States Patent and Trademark Office, Alexandria,
 VA, for appellee Katherine K. Vidal. Also represented by
 KAKOLI CAPRIHAN, AMY J. NELSON, FARHEENA YASMEEN
 RASHEED.
                  ______________________

       Before LOURIE, BRYSON, and STARK, Circuit Judges.
 PER CURIAM.
    Jason Arthur Zimmerman appeals the Patent Trial
 and Appeal Board’s (“Board”) decision affirming a patent
 examiner’s rejection of proposed claims 59-80 and 82-132
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 2                                           IN RE: ZIMMERMAN

 of U.S. Patent Application No. 12/503,494 (the “’494 appli-
 cation”) for being directed to patent-ineligible subject mat-
 ter under 35 U.S.C. § 101. We affirm.
                               I
      Mr. Zimmerman filed the ’494 application, seeking a
 patent to be entitled “Method and System for Trading Com-
 binations of Financial Instruments” which generally re-
 lates to “electronic trading of financial instruments.” App’x
 49 ¶¶ 1-2. The ’494 application refers to “multi-leg orders,”
 which it describes as trades involving “a collection of two
 or more single leg orders (legs), corresponding to distinct
 financial instruments, that are meant to be executed sim-
 ultaneously.” Id. at 49 ¶ 5. In order to execute multiple
 legs simultaneously, a system “must monitor bids and of-
 fers corresponding to the legs of the order and use the bids
 and offers to compute potential execution prices for the or-
 der.” Id. at 51 ¶ 13. According to the application, this pre-
 sents “significant technical challenges” as multi-leg orders
 “involve simultaneous purchases and sales of significant
 numbers of options across numerous legs,” but “it is diffi-
 cult to guarantee execution of all legs of the order at the
 prices that were used to obtain the potential execution
 price.” Id. The ’494 application purports to solve this prob-
 lem via a computerized method applying a “combinatorial
 matching algorithm” that mathematically matches each el-
 igible leg of a multi-leg order with a corresponding buy or
 sell order. Id. at 52 ¶ 19; see also id. 65 ¶¶ 97-100.
     Independent claim 59, which the Board treated as rep-
 resentative, recites:
     A computer-implemented method improving trad-
     ing combinations of financial instruments, said
     method comprising implementing the following
     steps in an electronic trading environment where
     each financial instrument in a set of two or more
     financial instruments selected to be made available
     for trading is traded in quantities that are integer
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 IN RE: ZIMMERMAN                                           3

    multiples of a respective positive number and
    trades of said each financial instrument are based
    on a respective price per unit order quantity, said
    steps comprising:
       receiving, during a first selected time period,
    combination orders to trade financial instruments;
        storing each eligible received combination or-
    der, wherein a received combination order is an el-
    igible order if it satisfies at least one selected
    condition, wherein said at least one selected condi-
    tion includes the necessary condition that the re-
    spective financial instrument specified by each leg
    of an eligible order is in said set; and
         processing, using a computer, eligible orders or
    expanded eligible orders with a combinatorial
    matching algorithm (CMA), wherein said pro-
    cessing begins at a selected time, wherein said
    CMA outputs a matched subcollection of the pro-
    cessed orders; wherein if said CMA is not con-
    strained by limit prices then each order x in said
    subcollection is executed in said environment at its
    respective total expanded execution price
    (TEEP(x)); wherein if said CMA is constrained by
    limit prices then said method further comprises ob-
    taining said respective price per unit for said each
    financial instrument and ensuring TEEP(L) is less
    than or equal to TELP(L), where L consists of the
    limit orders in said subcollection and TELP is “to-
    tal expanded limit price”, and wherein each order x
    in said subcollection is executed in said environ-
    ment at a respective modified total expanded exe-
    cution price (MTEEP(x)).
 App’x 17.
     Without directly challenging the representativeness of
 claim 59, Mr. Zimmerman would have us instead treat
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 4                                            IN RE: ZIMMERMAN

 claim 103 as representative. 1 Claim 103, also independent,
 recites the method steps of claim 59 performed on “[a] sys-
 tem comprising one or more computers connected to a net-
 work” and adds one more step: “obtain[ing], via said
 network and during a selected time period, combination or-
 ders to trade financial instruments.” App’x 24-25.
     The examiner rejected all proposed claims as being di-
 rected to patent-ineligible subject matter. Applying the
 two-step Alice framework, the examiner concluded that the
 claims were directed to the abstract idea of “improving
 trading combinations of financial instruments,” which is
 among the category of “certain methods of organizing hu-
 man activity – fundamental economic principles or prac-
 tices.” App’x 721. On appeal, the Board substantially
 agreed with the examiner’s findings and affirmed the rejec-
 tion.
     Mr. Zimmerman timely appealed to this court, arguing
 that at least some of the rejected claims recite patent-eligi-
 ble subject matter under 35 U.S.C. § 101. Mr. Zimmerman
 also argues that the examiner failed to establish a prima
 facie rejection and the Board erred in affirming the rejec-
 tion.    We have jurisdiction pursuant to 28 U.S.C.
 § 1295(a)(4)(A).
                               II
     The patent eligibility inquiry of 35 U.S.C. § 101 is “a
 question of law, which we review de novo.” In re Rudy, 956
 F.3d 1379, 1383 (Fed. Cir. 2020). Our § 101 analysis is gov-
 erned by the two-step Alice/Mayo framework. See Alice
 Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216-24
 (2014); Mayo Collaborative Servs. v. Prometheus Labs, Inc.,
 566 U.S. 66, 77-80 (2012). At step one, we consider
 “whether the claims at issue are directed to one of [the]

     1 Our decision would be the same regardless of
 whether we focused on claim 59 or 103.
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 IN RE: ZIMMERMAN                                            5

 patent-ineligible concepts,” such as an abstract idea. Alice,
 573 U.S. at 217. If we determine the claims are directed to
 an ineligible concept, we must proceed to step two, in which
 “we consider the elements of each claim both individually
 and as an ordered combination to determine whether the
 additional elements transform the nature of the claim into
 a patent-eligible application.” Id. (internal quotation
 marks omitted).
                              III
                               A
     We agree with the Board and the examiner that all pro-
 posed claims that are the subject of this appeal 2 are di-
 rected to an abstract idea: matching combinations of
 financial instruments through steps of receiving data, stor-
 ing data, processing data, and executing trades. We have
 repeatedly found claims directed to similar concepts, and
 containing similar steps, to be abstract. See, e.g., Trading
 Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1084, 1092 (Fed. Cir.
 2019) (“[P]lacing an order based on displayed market infor-
 mation is a fundamental economic practice.”); Elec. Power
 Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353-54 (Fed. Cir.
 2016) (stating that steps of collecting information and us-
 ing mathematical algorithms to analyze it are abstract pro-
 cesses); In re TLI Commc’ns LLC Pat. Litig., 823 F.3d 607,
 613 (Fed. Cir. 2016) (finding “classifying and storing digital

     2    Although Mr. Zimmerman limits his eligibility ar-
 guments to only some of the claims rejected by the exam-
 iner (and subsequently affirmed by the Board), we find it
 unnecessary to determine whether he concedes that all
 other claims are ineligible. As our eligibility analysis
 would be the same whether or not we consider the unar-
 gued claims, we choose to address the eligibility of all re-
 jected claims.
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 6                                           IN RE: ZIMMERMAN

 images in an organized manner” is abstract). We agree
 with the Board that, consistent with our precedent, the
 claims before us are directed to “an abstract idea for which
 computers are invoked merely as a tool.” TecSec, Inc.
 v. Adobe Inc., 978 F.3d 1278, 1293 (Fed. Cir. 2020); see also
 App’x 8 (finding that Mr. Zimmerman’s claims “merely
 use[] the claimed computer elements as a tool to perform
 the abstract idea”).
      Mr. Zimmerman contends that his claims may improve
 computer functionality and provide a “technical” solution
 by precluding the risk of nonoptimal trades resulting from
 delays in real-time order matching. Appellant Br. at 4, 9.
 Such a feature does not amount to a technological improve-
 ment of the type we have required for a computer software
 claim to avoid being directed to an abstract idea at step
 one. See, e.g., Enfish, LLC v. Microsoft Corp., 822 F.3d
 1327, 1339 (Fed. Cir. 2016) (claims directed to self-referen-
 tial data table “designed to improve the way a computer
 stores and retrieves data in memory”); McRO, Inc. v. Ban-
 dai Namco Games Am. Inc., 837 F.3d 1299, 1314 (Fed. Cir.
 2016) (claims directed to “specific asserted improvement in
 computer animation”). While Mr. Zimmerman repeatedly
 calls his patent a “technological” improvement, the pur-
 ported improvement he describes deals only with the effi-
 ciency of the trade’s matching process, which “makes the
 trader faster and more efficient, not the computer.” Trad-
 ing Techs., 921 F.3d at 1090; see also SAP Am., Inc. v. In-
 vestPic, LLC, 898 F.3d 1161, 1170 (Fed. Cir. 2018)
 (“[P]atent law does not protect [advances in the realm of
 abstract ideas] no matter how groundbreaking the ad-
 vance.”). Therefore, we conclude that the claims are di-
 rected to an abstract idea.
                              B
    Turning to step two, we again agree with the Board.
 The claims fail to recite an inventive concept sufficient to
 render the claims patent eligible.
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 IN RE: ZIMMERMAN                                            7

     Claim 103, the claim Mr. Zimmerman asks us to focus
 on, includes the limitations of “[a] system comprising one
 or more computers connected to a network, said one or
 more computers programmed and configured to” perform
 the steps we have concluded are abstract, as well as the
 step of “obtain[ing] [orders] via said network.” App’x 24-
 25. We agree with the Board’s conclusion that the claimed
 “computer components are all used in a manner that is
 well-understood, routine, and conventional in the field,”
 App’x 9, which is supported by the specification’s descrip-
 tion of conventional computer components. See id. at 67
 ¶ 104. Mr. Zimmerman points us to no record basis to con-
 clude otherwise. Therefore, the claims are patent ineligible
 under 35 U.S.C. § 101.
                              IV
     Mr. Zimmerman also challenges the sufficiency of the
 Board’s and examiner’s eligibility analyses. His conten-
 tions lack merit.
     The Administrative Procedure Act (“APA”) requires us
 to “hold unlawful and set aside agency action, findings, and
 conclusions found to be . . . arbitrary, capricious, an abuse
 of discretion, or otherwise not in accordance with law.” 5
 U.S.C. § 706(2)(A). Compliance with the APA requires the
 Board to “provid[e] an administrative record showing the
 evidence on which the findings are based, accompanied by
 the agency’s reasoning in reaching its conclusions,” in such
 a manner that the Board’s “path may reasonably be dis-
 cerned.” Alacritech, Inc. v. Intel Corp., 966 F.3d 1367, 1370
 (Fed. Cir. 2020) (internal quotation marks omitted). Here,
 the Board met its APA obligations. It applied the proper
 legal standard – the two-step Alice framework – and made
 clear it was relying on intrinsic evidence (the application’s
 specification) to find that the claims recite only well-under-
 stood, routine, and conventional activities previously
 known in the art.
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 8                                            IN RE: ZIMMERMAN

     With regard to the examiner, Mr. Zimmerman con-
 tends that she failed to provide an explanation satisfying
 the standards of 35 U.S.C. § 132, which requires the PTO
 to “notify the applicant” of a rejection by “stating the rea-
 sons for [the] rejection . . . together with such information
 and references as may be useful in judging of the propriety
 of continuing the prosecution of his application.” “Section
 132 is violated when a rejection is so uninformative that it
 prevents the applicant from recognizing and seeking to
 counter the grounds for rejection.” Chester v. Miller, 906
 F.2d 1574, 1578 (Fed. Cir. 1990); see also In re Jung, 637
 F.3d 1356, 1362 (Fed. Cir. 2011) (describing examiner’s ob-
 ligation to “explain[] the shortcomings it perceives so that
 the applicant is properly notified and able to respond”) (in-
 ternal quotation marks and brackets omitted). The office
 action about which Mr. Zimmerman complains, and on
 which his appeal to the Board and us are based, met this
 statutory requirement by informing him his claims were
 ineligible under § 101 because they were directed to an ab-
 stract idea – “improving trading combinations of financial
 instruments” – and failed to cite anything significantly
 more. App’x 719-35.
                              V
     We have considered Mr. Zimmerman’s remaining argu-
 ments and find them unpersuasive. For the forgoing rea-
 sons, we affirm the Board’s decision.
                        AFFIRMED
                            COSTS
 No costs.