Fed. Cir. Upholds Commodity Pricing Computer Program Patent as Being Patent Eligible Subject Matter

The Court of Appeals for the Federal Circuit upheld a trial court decision finding that the computer software patent was patent eligible subject matter under 35 U.S.C. sec.  101 and affirmed the District Court’s decision.  Trading Technologies Int’l Inc. v. CQG, Inc.,  Case No. 2016-1616 (Fed. Cir. Jan. 18, 2017) (Available Here).  The district court denied defendant CGQ’s judgment as a matter of law (JMOL) motion, holding that the patent claims were not directed to an abstract idea, found that the claims did recite an inventive concept, and that the claims covered subject matter that was 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.  One of the claims in suit follows.

Claim 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; [a] 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; [b] dynamically displaying a second indicator in one of a plurality of locations in an ask display region, [c] 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; [d] 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; [e] 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 [f] 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.

The challenged patents “solve problems of prior graphical user interface devices … in the context of computerized trading relating to speed, accuracy and usability.”

Per the Federal Circuit: “The district court explained that the challenged patents do not simply claim displaying information on a graphical user interface. The claims require a specific, structured graphical user interface paired with a prescribed functionality directly related to the graphical user interface’s structure that is addressed to and resolves a specifically identified problem in the prior state of the art. The district court concluded that the patented subject matter meets the eligibility standards of Alice Step 1. We agree with this conclusion, for all of the reasons articulated by the district court, including that the graphical user interface system of these two patents is not an idea that has long existed, the threshold criterion of an abstract idea and ineligible concept.”

Alternatively, the Federal Circuit noted that the District Court continued the analysis under Alice Step 2, and determined that the challenged claims recite an ”inventive concept.”  The Disctirct Court distinguished the patented system from the routine or conventional use of computers or the Internet, and concluded that the specific structure and concordant functionality of the graphical user interface are removed from abstract ideas, as compared to conventional computer implementations of known procedures.  “Thus the court held that the criteria of Alice Step 2 were also met.”

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