CAFC finds graphical user interface patent claims eligible, CBM decision still pending

By Gene Quinn
January 18, 2017

Judge Pauline Newman of the United States Court of Appeals for the Federal Circuit, October 2015 at the AIPLA annual meeting.

Judge Pauline Newman of the United States Court of Appeals for the Federal Circuit, delivered this nonprecedential opinion for the Court.

Earlier today the United States Court of Appeals for the Federal Circuit issued a nonprecedential opinion finding claims to a graphical user interface (GUI) patent to be patent eligible. See Trading Technologies International, Inc. v. CQG, IncThe decision of the panel, authored by Judge Newman and joined by Judge O’Malley and Judge Wallach, is noteworthy for several reasons. First, the Court did not believe that their ruling affirming the district court to merit a precedential designation. This would suggest that the panel did not believe the decision would add to the body of precedential law, which would appear to make this an easy case for the panel. Second, the claims that have been found to be patent eligible under 35 U.S.C. 101 in this “easy decision” are currently under review by the Patent Trial and Appeal Board (PTAB) in a Covered Business Method (CBM) review because the PTAB believed the graphical user interface patent claims are likely patent ineligible. See PTAB Gone Rogue

This dispute began when the patent owner, Trading Technologies International, charged CQG with infringement of U.S. Patents No. 6,772,132 (“the ’132 patent”) and No. 6,766,304 (“the ’304 patent”), both of which share a common specification. CGQ moved for judgment, asserting that the claims of these patents are directed to patent ineligible subject matter. The district court denied CGQ’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.

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. This is the problem these patents are directed toward solving.

The Federal Circuit took claim 1 of the ‘304 patent as illustrative, a claim also pointed to as illustrative in the CBM institution decision by the PTAB. Claim 1 of the ‘304 patent reads:

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;

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.

In applying the first step of the Alice two-step framework (sometimes referred to as Step 2A), the district court determined that the patents solve problems with prior GUI devices in the computerized trading area, specifically improving speed, accuracy and usability. The district court explained in its decision that the patents did not merely claim displaying information on a graphical user interface, but rather required a specific structured interface in order to address and resolve a specifically identified problem. Thus, the district court found that the claims were patent eligible without need to go on to the next Alice inquiry. The Federal Circuit completely agreed with the district court’s analysis, but added further that the graphical user interface does not represent a long known idea, which is a threshold criterion of abstract idea ineligibility.

Notwithstanding the district court’s ruling on Step 2A, the district court persevered to address the next Alice inquiry, which searches for an inventive concept that would constitute significantly more (sometimes referred to as Step 2B). The district court identified the static price index as an inventive concept that allows traders to more accurately and efficiently place trades. Further, the district court concluded that the specific structure and associated functionality of the graphical user interface remove the claims from being abstract ideas. The Federal Circuit similarly agreed with the district court relative to this prong of the Alice framework.

The plot now thickens. The ‘304 patent is currently embroiled in what can only be described as a questionable CBM review by the PTAB. In November 2016, in Unwired Planet v. Google, the Federal Circuit slammed the PTAB for using an inappropriate definition of what constitutes a CBM patent, saying that the definition of a CBM patent used by the PTAB would practically make every patent a CBM patent. Institution of a graphical user interface as a CBM patent was always dubious given the technical aspects of the invention, but in light of the ruling in Unwired Planet the CBM proceeding against the ‘304 patent became even more questionable. Still, a final decision is awaited, with the written decision due soon.

Will the PTAB actually rule that claims to the ‘304 patent are patent ineligible when those claims have already been found to be patent eligible by the Federal Circuit? We shall see, but at this point I wouldn’t put anything past the PTAB. After all, this is the same entity that declared an MRI machine to be abstract.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 18 Comments comments.

  1. Curious January 18, 2017 3:30 pm

    Unfortunately, it is nonprecedential. However, its nice to see J. Newman get back some of her swagger back and not back down to the anti-patent wing of the Federal Circuit.

  2. step back January 18, 2017 5:22 pm

    Hi Gene,

    Thanks for the update.

    I still don’t understand what gives any Article III court (the CAFC) or Article I tribunal (PTAB) the authority or legal power to suspend a magic crystal shard on a thread over a claim, give it a twirl and determine what the claim is “directed to”.

    Nor do I understand where the additional authority or legal power comes from for them to place the claim on a magic crystal-powered scale to determine if there is “something significantly more”.

    This is all pure witchcraft.

    The Supremes may authorize themselves to practice in these dark and unscientific arts. But they have no Constitutional power to promulgate new laws based on their belief in witchcraft or to authorize others to act in such Medieval ways.

    Where is the shame?

  3. Gene Quinn January 18, 2017 6:00 pm

    Step-

    I have no idea how anyone can determine whether a claim is “significantly more.” I am convinced the standard we have for Step 2B (as well as Step 2A) is subjective and nothing particularly different than the defunct Freeman-Walter-Abele test that was so maligned because of its subjectivity. Yes, it seemed objective, which was the problem. The Alice two-step seems objective, but it isn’t. It is even less objective than FWA.

    As far as “directed to,” I’ve seen you and others talk about that but I have to confess I’m not entirely sure I’m following. I think what you are saying relates to the fact that you simply cannot know what the claim covers unless and until you’ve done a proper claim construction. Correct?

    Not trying to be dense here, but “directed to” is a term I’ve always used and presumably because it was taught to me all those many years ago. For example, I would say the recent PTAB decision in Itagaki was absurd because that claim was directed to an MRI machine. How do I know? Because the claim was written to “an MRI machine comprising…”

    Am I missing something more subtle here with “directed to”?

    -Gene

  4. step back January 18, 2017 6:55 pm

    “Directed to” implies a specific direction, say North by Northwest and a map or terrain within which the “directed to” line is scrivenered.

    As far as I can tell, them who don’t like inventors too much always pick out a Harry Potter map. Then, no matter which direction they point their “directed to” line in, it points to a magical, abstract destination.

    What I was taught (if you want to go the pedantic route) is that a claim consists of a set of limitations that define the metes and bounds of the territory covered by the claim. An accused infringer is either inside those metes and bounds or outside. There is no “direction”. Inside or outside. Period.

    Well yes, when some of us talk metaphorically about which “art” the claimed subject matter belongs to, we might use the “drawn to” language or the “related to” language. For example, the claimed subject matter relates most closely to the art of building and using MRI machines. But claims themselves generally don’t have a “direction”.

    I’m not sure which hocus pocus amicus brief convinced the SCOTeti that claims have a “direction” and one can then determine which abstract idea the claim is “directed to”. Pure nonsense. No less pure BS and nonsensical than the “significantly more” witch drowning test.

  5. Ternary January 18, 2017 10:12 pm

    “…but added further that the graphical user interface does not represent a long known idea, which is a threshold criterion of abstract idea ineligibility.”

    If time is a threshold criterion then we can clean up Alice pretty quickly. The GUI was demonstrated by Xerox in the 70s, and was known (though not “well known”) in specialized circles.

    So, anything younger than 40 years is at least not considered “long known idea” based on that nonprecedential decision. Which will cover many computer processes that are now being 101 rejected as being “… well known and conventional/generic computer equipment.”

    It always puzzled me that in a 101 rejection an Examiner alleges that something is “well known and conventional” without the requirement to provide evidence on that. I have not seen any successful challenge on that allegation (please post if you know of one). But perhaps this decision opens up the discussion.

  6. Night Writer January 19, 2017 9:48 am

    Gene, it all goes to the worry that someone will patent an equation. For example, as well discussed on here not long ago, the Pythagorean theory. Where someone could if they just invented it write a claim to a program to calculate the area of a triangle. This is considered horrendous for policy reasons by the justices.

    So, the whole “directed to” thing is like are you really trying to patent something you shouldn’t. This has, of course, swallowed all of patent law at this point.

  7. step back January 19, 2017 10:46 am

    Gene, let me add to what NW is trying to say @6

    It is one thing to map a claim (when read & construed in its entirety) to the metes and bounds of the subject matter that the claim secures exclusively for its inventor.

    It is a whole other exercise to take a copy of the claim, place it on a map of Harry Potter land, draw a line extending from a chosen part of the claim and out onto the Harry Potter map so that one can rationally and intelligently conclude that the claim is “directed” to some abstract concept existing only in Harry Potter land.

    The Supreme Court has instructed us (“directed” us to the idea) that they, the SCOTUS engage in such hocus pocus. They never said that anyone else should try to be a sorcerer’s apprentice. Nonetheless it is with Mickey Mouse glee that the district courts, the PTAB and the examining corps have taken up the gauntlet. Now all of them are experts in what each claim is “directed to” (and also if it weighs “significantly more” when given the witch’s drownability test).

    Thank goodness we live in an age of enlightenment. /end sarcasm

  8. Gene Quinn January 19, 2017 11:14 am

    Step, NW-

    I understand what you are saying. I guess I just don’t see the same mischief in the term “directed to,” but I do get your point. If you are a hammer all the world looks like a nail. I suppose the problem with “directed to” is that it really has no meaning. To me it seems self evident that the invention in Itagaki was directed to an MRI machine because an MRI machine was claimed. The PTAB, however, had to go to extraordinary lengths to ignore what was actually written to say that the claim was not directed to an MRI machine but to something else.

    The problem is with the Supreme Court. They want to pretend that the words don’t matter and say that the drafting skill of the attorney just doesn’t matter. Of course, it all of the sudden matters when they are considering 112, 102 and 103. But the intellectual dishonesty of the Supreme Court, and those who don’t like patents in general, knows no bounds.

    -Gene

  9. Paul Cole January 19, 2017 1:46 pm

    Misinterpretation of the words “directed to” is illustrated by the following argument.

    Consider whether a process of cooking an egg is patent eligible.

    It begins with eggs, it ends with eggs. Therefore it is directed to eggs.

    Eggs are a natural product.

    Therefore a method of cooking an omelette is directed to a natural product and is not patent-eligible.

    The point was made in the EPI amicus brief to the Supreme Court in Ariosa v Sequenom. If you consider the first two steps in the Ariosa process, they are in precisely the same relationship as the raw (unopened) eggs and the cooked omelette, there being also an additional analysis step.

    It is amusing to catch judges out in mistakes not in issues of opinion but in numerically quantifiable mistakes of fact. In the Ariosa case the amplified paternally inherited nucleic acid is the result of enzymatic synthesis from added monomeric nucleotides, the amplification factor compared to the nucleic acid of fetal origin being (on the face of the opinion) 1000 to 1,000,000 which is, so my biotech friends tell me, a considerable underestimate of the true amplification but is nevertheless a lower limit to one of the factual errors on which Judge Reyna’s opinion was based. By any reasonable norm it was a gross factual error.

    Judge Reyna was a history major and after becoming a lawyer specialised in trade policy and international trade regulation. He has a distinguished record of publications on these topics. However, he was appointed to the Federal Circuit in 2011, and had only about four years of experience in patent matters when he authored his opinion. Even if he was working in the field full time, his experience would have qualified him only at a fairly junior associate level, and as we know patents form only part of the docket of the Federal Circuit so that his experience in patent cases is less and in life sciences matters was probably small. Judge Wallach was also appointed in late 2011 and is a recognised expert in the law of war, but has no recognisable experience in technical matters. Judge Linn had such experience but if he had dissented would have been in a minority. His concurrence reads more like a dissent.

    It is inevitable that non-technical judges without patent law training such as judges Reyna and Wallach will, unless very positively helped by our profession, fall into student-level error as happened in Ariosa. For the avoidance of doubt, a patent attorney would give an equally inadequate performance in adjudicating an international trade dispute, but should know better than to try and if put in that position should seek expert advice.

    The problem is not the Supreme Court: with careful and knowledgeable analysis their decisions can be followed and appropriate section 101 decisions can be reached. The problem is at the CAFC and lower levels.

  10. step back January 19, 2017 1:46 pm

    Gene,

    You forgot to put on your Alice in Blunderland glasses!

    If you had, you would have seen that an MRI machine is not at all a machine, but rather a giant arrow pointing through a portal into the abstractness realm.

    http://www.startswithyou.com/media/photo/2014/06/1840/MRIMachine_800x450.jpg

  11. step back January 19, 2017 1:50 pm

    Paul @9
    SCOTUS never authorized CAFC to apply the “directed to” test.
    Only elder wizards are permitted to spin the crystal shard on a string and divine which way it points (what it is “directed to”)

  12. Anon January 20, 2017 9:59 pm

    Mr. Cole,

    As valiant as you strive not to blame the Supreme Court, your efforts fall woefully short.

    I just do not understand why you try so hard to hold on to something that is just not there.

  13. step back January 20, 2017 11:20 pm

    I side with Cole.

    The “directed to” thing is a magician’s misdirection.
    Instead of analyzing the claim itself, the wizards of wash (dc) conjure up this fictitious thing they say the claim is “directed to”. Then they shoot down the fabricated strawman, saying this proves the claim is the product of witchcraft scriverning.

    We do need to shine a spot light on their con job.
    They are no different than the pitchfork salesmen and fear mongers of Salem.

  14. Anon January 21, 2017 8:15 am

    Step back,

    The problem that you share with Mr. Cole is that “directed to” is simply a gift from the Supreme Court.

    It did not “magically appear” in the lower courts.

    No amount of “careful reading” can make the lower courts the maker of that device.

  15. Anon January 21, 2017 8:19 am

    …and let’s not forget, as I had to point out to Mr. Quinn, that it was the Supreme Court in Alice that provided the example by making claims to computer systems (as stipulated by BOTH parties as having met the Machine prong of 101) disappear into being “abstract” by the “directed to” wand.

  16. Paul Cole January 21, 2017 12:29 pm

    In my recollection, in his early days Judge Rader confused a hairbrush with a toothbrush, see In re Bigio. Subsequently he learned better, But blaiming the Supreme Court exclusively is wrong – the havoc is at the more junior level, especially with non-technical non-patent judges appointed to the

  17. step back January 21, 2017 1:44 pm

    Paul @16

    Fully agree.

    There are non technical, scientifically incompetent people everywhere.
    http://www.memes.com/img/68851

    They don’t know they are incompetent.
    They don’t know that the world doesn’t work by magic.

    As far as they know, they walk into a big box store and there it is. Giant high resolution flat screen TV’s. Ever faster and lighter laptop computers. Ever smaller and smarter smartphones. Cars that drive themselves. A cylinder you talk to and it does all the thinking for you (AI). Alexa where did I last leave my brain? I can’t remember anymore.

    The genius judges that fill the judicial roll calls now a days are no different. Part of the same trend as in the general population.

    You can convince them of anything. That molecular biology is just like plucking leaves off the DNA tree. That computers are “generic”, conventional, routine and there is nothing there there but abstraction and magic.

    And now we have the predator clown in chief in charge of the whole thing. Welcome to our Brave New World. God help us all.

  18. Anon January 21, 2017 5:19 pm

    But blaiming the Supreme Court exclusively is wrong – the havoc is at the more junior level, especially with non-technical non-patent judges appointed to theL”

    No one is blaming them exclusively – unlike your attempt, Mr. Cole, to exclusively absolve them.

    I provided the direct example in Alice and no amount of your “careful thinking” can alter that example.

    I suggest instead that you alter your repeated attempts to place the Supreme Court outside of the fray, as if they are blameless here. They most assuredly are not blameless. In fact, while they are not completely to blame, they do share the majority blame because they have the majority power.

    I become more and more skeptical of your posts that try to paint a different picture.