Trading Technologies: User Interface for Stock Trading

Before writing more about Trading Technologies v. CQG, I will first note that TT is my former client and I personally filed the original complaint in this very case 12 years ago (2005).  Although TT is no longer my client, I am bound by and respect the rules of professional ethics and the duties owed to former clients.  

The new non-precedential opinion from the Federal Circuit affirms the district court ruling that TT’s asserted claims are patent eligible.

The patent claims here cover a computerized method and system used for trading stocks and similar products.  When buying and selling stocks, speed and accuracy are both critically important and in this invention, TT created a Graphical-User-Interface design (and operational software) that helps traders buy and sell stock more quickly and more accurately. See U.S. Patents No. 6,772,132 and No. 6,766,304.

The court writes:

It is not disputed that the TTI System improves the accuracy of trader transactions, utilizing a software implemented programmatic [method]. 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,” Enfish, 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.

The opinion is authored by Judge Newman and joined by Judges O’Malley and Wallach.  The court’s opinion is a short and interesting read:

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. … [I]neligible 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… 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.

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, quoting Mayo. 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, quoting Diamond v. Diehr.

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. 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.

 

The patents are also currently being challenged on 101 grounds in CBM proceedings before the USPTO.  Although I feel that it should have a direct impact, it is unclear to me whether this decision will impact the PTO proceedings addressing the identical question.  (For instance, the court here holds that the patent covers a technological invention – and CBM proceedings can only proceed for non-technological inventions.) Patentees may also consider petitioning the court to make this decision precedential.