Federal Circuit disposition — 23-1542

N OTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
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IN RE: JASON ARTHUR ZIMMERMAN,
Appellant
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2023-1542
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Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. 12/503,494.
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Decided: February 9, 2024
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J ASON A. ZIMMERMAN , Toronto, Ontario, Canada, pro
se.
MEREDITH H OPE SCHOENFELD, Office of the Solicitor,
United States Patent and Trademark Office, Alexandria,
VA, for appellee Katherine K. Vidal. Also represented by
K AKOLI CAPRIHAN, A MY J. N ELSON, F ARHEENA YASMEEN
RASHEED.
______________________
Before L OURIE, BRYSON, and STARK, Circuit Judges.
P ER CURIAM .
Jason Arthur Zimmerman appeals the Patent Trial
and Appeal Board’s (“Board”) decision affirming a patent
examiner’s rejection of proposed claims 59-80 and 82-132
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IN RE: ZIMMERMAN 2
of U.S. Patent Application No. 12/503,494 (the “’494 appli-
cation”) for being directed to patent-ineligible subject mat-
ter under 35 U.S.C. § 101. We affirm.
I
Mr. Zimmerman filed the ’494 application, seeking a
patent to be entitled “Method and System for Trading Com-
binations of Financial Instruments” which generally re-
lates to “electronic trading of financial instruments.” App’x
49 ¶¶ 1-2. The ’494 application refers to “multi-leg orders,”
which it describes as trades involving “a collection of two
or more single leg orders (legs), corresponding to distinct
financial instruments, that are meant to be executed sim-
ultaneously.” Id. at 49 ¶ 5. In order to execute multiple
legs simultaneously, a system “must monitor bids and of-
fers corresponding to the legs of the order and use the bids
and offers to compute potential execution prices for the or-
der.” Id. at 51 ¶ 13. According to the application, this pre-
sents “significant technical challenges” as multi-leg orders
“involve simultaneous purchases and sales of significant
numbers of options across numerous legs,” but “it is diffi-
cult to guarantee execution of all legs of the order at the
prices that were used to obtain the potential execution
price.” Id. The ’494 application purports to solve this prob-
lem via a computerized method applying a “combinatorial
matching algorithm” that mathematically matches each el-
igible leg of a multi-leg order with a corresponding buy or
sell order. Id. at 52 ¶ 19; see also id. 65 ¶¶ 97-100.
Independent claim 59, which the Board treated as rep-
resentative, recites:
A computer-implemented method improving trad-
ing combinations of financial instruments, said
method comprising implementing the following
steps in an electronic trading environment where
each financial instrument in a set of two or more
financial instruments selected to be made available
for trading is traded in quantities that are integer
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IN RE: ZIMMERMAN 3
multiples of a respective positive number and
trades of said each financial instrument are based
on a respective price per unit order quantity, said
steps comprising:
receiving, during a first selected time period,
combination orders to trade financial instruments;
storing each eligible received combination or-
der, wherein a received combination order is an el-
igible order if it satisfies at least one selected
condition, wherein said at least one selected condi-
tion includes the necessary condition that the re-
spective financial instrument specified by each leg
of an eligible order is in said set; and
processing, using a computer, eligible orders or
expanded eligible orders with a combinatorial
matching algorithm (CMA), wherein said pro-
cessing begins at a selected time, wherein said
CMA outputs a matched subcollection of the pro-
cessed orders; wherein if said CMA is not con-
strained by limit prices then each order x in said
subcollection is executed in said environment at its
respective total expanded execution price
(TEEP(x)); wherein if said CMA is constrained by
limit prices then said method further comprises ob-
taining said respective price per unit for said each
financial instrument and ensuring TEEP(L) is less
than or equal to TELP(L), where L consists of the
limit orders in said subcollection and TELP is “to-
tal expanded limit price”, and wherein each order x
in said subcollection is executed in said environ-
ment at a respective modified total expanded exe-
cution price (MTEEP(x)).
App’x 17.
Without directly challenging the representativeness of
claim 59, Mr. Zimmerman would have us instead treat
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IN RE: ZIMMERMAN 4
claim 103 as representative.1 Claim 103, also independent,
recites the method steps of claim 59 performed on “[a] sys-
tem comprising one or more computers connected to a net-
work” and adds one more step: “obtain[ing], via said
network and during a selected time period, combination or-
ders to trade financial instruments.” App’x 24-25.
The examiner rejected all proposed claims as being di-
rected to patent-ineligible subject matter. Applying the
two-step Alice framework, the examiner concluded that the
claims were directed to the abstract idea of “improving
trading combinations of financial instruments,” which is
among the category of “certain methods of organizing hu-
man activity – fundamental economic principles or prac-
tices.” App’x 721. On appeal, the Board substantially
agreed with the examiner’s findings and affirmed the rejec-
tion.
Mr. Zimmerman timely appealed to this court, arguing
that at least some of the rejected claims recite patent-eligi-
ble subject matter under 35 U.S.C. § 101. Mr. Zimmerman
also argues that the examiner failed to establish a prima
facie rejection and the Board erred in affirming the rejec-
tion. We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(4)(A).
II
The patent eligibility inquiry of 35 U.S.C. § 101 is “a
question of law, which we review de novo.” In re Rudy, 956
F.3d 1379, 1383 (Fed. Cir. 2020). Our § 101 analysis is gov-
erned by the two-step Alice/Mayo framework. See Alice
Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216-24
(2014); Mayo Collaborative Servs. v. Prometheus Labs, Inc.,
566 U.S. 66, 77-80 (2012). At step one, we consider
“whether the claims at issue are directed to one of [the]
1 Our decision would be the same regardless of
whether we focused on claim 59 or 103.
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IN RE: ZIMMERMAN 5
patent-ineligible concepts,” such as an abstract idea. Alice,
573 U.S. at 217. If we determine the claims are directed to
an ineligible concept, we must proceed to step two, in which
“we consider the elements of each claim both individually
and as an ordered combination to determine whether the
additional elements transform the nature of the claim into
a patent-eligible application.” Id. (internal quotation
marks omitted).
III
A
We agree with the Board and the examiner that all pro-
posed claims that are the subject of this appeal2 are di-
rected to an abstract idea: matching combinations of
financial instruments through steps of receiving data, stor-
ing data, processing data, and executing trades. We have
repeatedly found claims directed to similar concepts, and
containing similar steps, to be abstract. See, e.g., Trading
Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1084, 1092 (Fed. Cir.
2019) (“[P]lacing an order based on displayed market infor-
mation is a fundamental economic practice.”); Elec. Power
Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353-54 (Fed. Cir.
2016) (stating that steps of collecting information and us-
ing mathematical algorithms to analyze it are abstract pro-
cesses); In re TLI Commc’ns LLC Pat. Litig., 823 F.3d 607,
613 (Fed. Cir. 2016) (finding “classifying and storing digital
2 Although Mr. Zimmerman limits his eligibility ar-
guments to only some of the claims rejected by the exam-
iner (and subsequently affirmed by the Board), we find it
unnecessary to determine whether he concedes that all
other claims are ineligible. As our eligibility analysis
would be the same whether or not we consider the unar-
gued claims, we choose to address the eligibility of all re-
jected claims.
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IN RE: ZIMMERMAN 6
images in an organized manner” is abstract). We agree
with the Board that, consistent with our precedent, the
claims before us are directed to “an abstract idea for which
computers are invoked merely as a tool.” TecSec, Inc.
v. Adobe Inc., 978 F.3d 1278, 1293 (Fed. Cir. 2020); see also
App’x 8 (finding that Mr. Zimmerman’s claims “merely
use[] the claimed computer elements as a tool to perform
the abstract idea”).
Mr. Zimmerman contends that his claims may improve
computer functionality and provide a “technical” solution
by precluding the risk of nonoptimal trades resulting from
delays in real-time order matching. Appellant Br. at 4, 9.
Such a feature does not amount to a technological improve-
ment of the type we have required for a computer software
claim to avoid being directed to an abstract idea at step
one. See, e.g., Enfish, LLC v. Microsoft Corp., 822 F.3d
1327, 1339 (Fed. Cir. 2016) (claims directed to self-referen-
tial data table “designed to improve the way a computer
stores and retrieves data in memory”); McRO, Inc. v. Ban-
dai Namco Games Am. Inc., 837 F.3d 1299, 1314 (Fed. Cir.
2016) (claims directed to “specific asserted improvement in
computer animation”). While Mr. Zimmerman repeatedly
calls his patent a “technological” improvement, the pur-
ported improvement he describes deals only with the effi-
ciency of the trade’s matching process, which “makes the
trader faster and more efficient, not the computer.” Trad-
ing Techs., 921 F.3d at 1090; see also SAP Am., Inc. v. In-
vestPic, LLC, 898 F.3d 1161, 1170 (Fed. Cir. 2018)
(“[P]atent law does not protect [advances in the realm of
abstract ideas] no matter how groundbreaking the ad-
vance.”). Therefore, we conclude that the claims are di-
rected to an abstract idea.
B
Turning to step two, we again agree with the Board.
The claims fail to recite an inventive concept sufficient to
render the claims patent eligible.
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IN RE: ZIMMERMAN 7
Claim 103, the claim Mr. Zimmerman asks us to focus
on, includes the limitations of “[a] system comprising one
or more computers connected to a network, said one or
more computers programmed and configured to” perform
the steps we have concluded are abstract, as well as the
step of “obtain[ing] [orders] via said network.” App’x 24-
25. We agree with the Board’s conclusion that the claimed
“computer components are all used in a manner that is
well-understood, routine, and conventional in the field,”
App’x 9, which is supported by the specification’s descrip-
tion of conventional computer components. See id. at 67
¶ 104. Mr. Zimmerman points us to no record basis to con-
clude otherwise. Therefore, the claims are patent ineligible
under 35 U.S.C. § 101.
IV
Mr. Zimmerman also challenges the sufficiency of the
Board’s and examiner’s eligibility analyses. His conten-
tions lack merit.
The Administrative Procedure Act (“APA”) requires us
to “hold unlawful and set aside agency action, findings, and
conclusions found to be . . . arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law.” 5
U.S.C. § 706(2)(A). Compliance with the APA requires the
Board to “provid[e] an administrative record showing the
evidence on which the findings are based, accompanied by
the agency’s reasoning in reaching its conclusions,” in such
a manner that the Board’s “path may reasonably be dis-
cerned.” Alacritech, Inc. v. Intel Corp., 966 F.3d 1367, 1370
(Fed. Cir. 2020) (internal quotation marks omitted). Here,
the Board met its APA obligations. It applied the proper
legal standard – the two-step Alice framework – and made
clear it was relying on intrinsic evidence (the application’s
specification) to find that the claims recite only well-under-
stood, routine, and conventional activities previously
known in the art.
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IN RE: ZIMMERMAN 8
With regard to the examiner, Mr. Zimmerman con-
tends that she failed to provide an explanation satisfying
the standards of 35 U.S.C. § 132, which requires the PTO
to “notify the applicant” of a rejection by “stating the rea-
sons for [the] rejection . . . together with such information
and references as may be useful in judging of the propriety
of continuing the prosecution of his application.” “Section
132 is violated when a rejection is so uninformative that it
prevents the applicant from recognizing and seeking to
counter the grounds for rejection.” Chester v. Miller, 906
F.2d 1574, 1578 (Fed. Cir. 1990); see also In re Jung, 637
F.3d 1356, 1362 (Fed. Cir. 2011) (describing examiner’s ob-
ligation to “explain[] the shortcomings it perceives so that
the applicant is properly notified and able to respond”) (in-
ternal quotation marks and brackets omitted). The office
action about which Mr. Zimmerman complains, and on
which his appeal to the Board and us are based, met this
statutory requirement by informing him his claims were
ineligible under § 101 because they were directed to an ab-
stract idea – “improving trading combinations of financial
instruments” – and failed to cite anything significantly
more. App’x 719-35.
V
We have considered Mr. Zimmerman’s remaining argu-
ments and find them unpersuasive. For the forgoing rea-
sons, we affirm the Board’s decision.
AFFIRMED
COSTS
No costs.
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