On January 18, 2017, the United States Court of Appeals for the Federal Circuit (CAFC) issued a non-precedential opinion in Trading Technologies International, Inc. v. CQG, Inc. The CAFC affirmed the district court’s decision that graphical user interface (GUI) claims directed to a financial trading system are patent eligible under 35 U.S.C. § 101. The district court declared, “the claims require a specific, structured graphical user interface paired with a prescribed functionality directly related to the graphical user interface’s structure.”
This dispute originated with Trading Technologies International, Inc. asserting CQG, Inc. infringed the two U.S. Patent Nos. 6,772,132 and 6,766,304 that have the same specification. The CAFC stated the two challenged patents, “describe and claim a method and system for electronic trading of stocks, bonds, futures, options and similar products.” CQG asserted that the claims of these patents were directed to patent ineligible subject matter and moved for judgement as a matter of law. The district court denied CQG’s motion and CQG appealed in Federal Circuit, No. 2016-1616.
The CAFC states, “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.” The challenged patents are for “[a] method and system for reducing the time it takes for a trader to place a trade when electronically trading on an exchange, thus increasing the likelihood that the trader will have orders filled at desirable prices and quantities.”
The patents were reviewed for patent eligible subject matter in terms of 35 U.S.C. § 101 and the CAFC illustrated analysis of § 101 eligibility with respect to method claim 1 of the’304 patent:
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.
The district court applying Alice step 1 stated that the challenged patents, “solve problems of prior graphical user interface devices . . . in the context of computerized trading relating to speed, accuracy and usability.” Additionally, “the court found that these patents are directed to improvements in existing graphical user interface devices that have no “pre-electronic trading analog,” and recite more than “‘setting, displaying, and selecting’ data or information that is visible on the [graphical user interface] device.” The district court thereby determined the subject matter of the challenged patents met the eligibility standards of Alice Step 1 in terms of 35 U.S.C. § 101 and the CAFC affirmed this finding.
Alternatively, analysis by the district court of the challenged patents under Alice step 2, “identified the static price index as an inventive concept that allows traders to more efficiently and accurately place trades using this electronic trading system.” The court elaborated on this “inventive concept” stating, “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.” The district court thereby held that the criteria of Alice step 2 were met and this finding was affirmed by the CAFC. The CAFC additionally stated that “[p]recedent has recognized that specific technologic modifications to solve a problem or improve the functioning of a known system generally produce patent-eligible subject matter.”
It is notable that a brief of ten law professors as amici curiae in support of Trading Technologies International, Inc. was offered. This would seemingly indicate the importance of the court ruling. Nevertheless, the non-precedential designation of the court opinion would indicate ease of the court in reaching a decision on the appeal and that inclusion of this ruling would not add to the body of precedential work. Disagreement about the significance of the case persists as nonparty SHzoom LLC filed a motion for the CAFC to repost its opinion as precedential. SHzoom argued the ruling was the first to hold that a patent containing a specifically claimed user interface was patent eligible. The CAFC maintained its position and declined the motion.
Additionally noteworthy in this matter is the covered business method patent review CBM2015‑00161 joined with CBM2016-00035 that challenges the patentability of the ’304 patent on grounds of § 101 that was instituted by the Patent Trial and Appeal Board (PTAB). Technological solutions are excluded from CBM proceeding, but the PTAB states, “the ’304 patent is not for a technological invention because it does not solve a technical problem using a technical solution.” More specifically, the PTAB declares, “the ’304 patent is not for a technological invention because it merely recites known computer technology, such as a display device or software, and combinations of prior art structures to achieve the normal, expected, or predictable result of that combination.” This is in opposition to the view of the’304 patent held by the federal district and circuit court that, “identified the static price index as an inventive concept that allows traders to more efficiently and accurately place trades using this electronic trading system”. Resolution of such differences will be required before clarity in eligible subject matter is found.
While the decision from the PTAB on this CBM review has yet to be announced its finding may not put a close to the issue. The CAFC has previously found the PTAB used the wrong standard to initiate a CBM proceeding. As observed in the Unwired Planet v. Google CBM review the CAFC ultimately vacated the PTAB decision and remanded the case to the PTAB for further consideration in applying the proper standard for CBM proceedings. Consequently, whether the PTAB findings impact the ruling of the CAFC in regards to the ’304 patent may take a while to be known. Even if the PTAB finds the ’304 patent recited patent ineligible subject matter, the CAFC may once again be remanding a case back to the PTAB to properly apply the standards of CBM proceedings. In the meantime of an outcome, the CAFC has provided insight regarding GUI claims being patent eligible subject matter by affirming the findings of the district court.
Analysis of the ’304 patent claims indicate a strategy for obtaining claims covering a GUI by claiming a specifically structured GUI having functionality directly related to that GUI structure. The claim 1 preamble of the ’304 patent states, “[a] method for displaying market information relating to and facilitating trading of a commodity”. The body of the claim goes on to recite an order entry region corresponding to locations on the static price axis where price information is displayed. The structure of the GUI comes from the static price axis displaying specific information. The function of the GUI relates to an electronic trade order, containing a plurality of parameters, being sent in response to a particular location on the order entry region being selected. Therein the specific organization of information on the GUI (structure) leads to the electronic trade order of multiple parameters being sent by selection of a single location (function). The issue of quickly placing an electronic order containing multiple parameters is solved by identifying the parameters to be sent by their organization in the GUI and it is this relationship that couples structure to function.
The district court spoke to this end stating, “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. While we await the outcome of the ’304 patent CBM review we have at least gained insight into a claim strategy recognized by the Federal courts to protect aspects of software in a post-Alice world by pairing structure with function.
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