The Software IP Report

Lack of Technical Solution in Patent Claims Justifies CBM Review and Alice Ineligibility

Finding that claims of patents directed “to a graphical user interface (‘GUI’) for electronic trading” lacked a technical solution to a technical problem, the Federal Circuit affirmed a Patent Trial and Appeal Board decision holding the claims ineligible under 35 U.S.C. § 101 and the Mayo/Alice test. Trading Technologies International, Inc. v. IBG, LLC, No. 2018-1063 (Fed. Cir. April 18, 2018) (opinion by Judge Moore, joined by Judges Mayer and Linn) (precedential). Interestingly, the court found that the patents’ lack of a technical solution supported both the institution of Covered Business Method (CBM) review, as well as the conclusion that the patent claims were ineligible.

The CBM had addressed U.S. Patent Nos. 7,533,056, 7,212,999, and 7,904,374. The patent owner argued that the patents were directed to “technological inventions” within the meaning of America Invents Act § 18(d)(1), and that therefore the CBM had been improperly instituted. Addressing first the ’056 and ’999 patents, their invention was an “intuitive graphical user interface” that “makes the trader faster and more efficient, not the computer,” which was “not a technical solution to a technical problem.” (Emphasis in original.) And the court agreed with the PTAB that the ’374 patent did not solve the problem of preventing traders from entering unintended prices because the claim at issue did not mention prices.

Turning to the patent-eligibility test, the court agreed with the PTAB that the ’056 and ’999 patents claimed the abstract idea of graphing or displaying information to help a trader make an order.  Implementing the abstract idea on a generic computing device could not save the claims. Alice step two (whether there was significantly more than an abstract idea) could not save the claims because they recite nothing more than routine and conventional trading activities. Dependent claims of the ’056 patent recited more details about displaying bid and order icons and data in the aggregate, but that was “not enough.”

The ’374 patent similarly fell. The PTAB had found, and the court agreed, that the ’374 patent claims are “directed to the abstract idea of receiving user input to send a trade order.” The patent owner’s arguments under Alice step one were similar to its arguments that the claims were not eligible for CBM review as directed to a “technological invention;” the patent owner argued that the claims “recite[d] a specific, structured GUI that solves the price-flipping problem of prior art interfaces.” These arguments were “unavailing.” Under both steps one and two of the Alice test, the patent owner tried to argue that the claims provided a technological improvement “by solving technological problems with prior art electronic trading interfaces,” which argument the court again rejected.