PTAB

CBM2018-00038

Investors Exchange LLC v. Nasdaq, Inc.

Log In

1. Case Identification

2. Patent Overview

  • Title: ORDER BOOK PROCESS AND METHOD
  • Brief Description: The ’112 Patent describes a computer system for executing securities transactions. The system is designed for high performance by storing an electronic "order book" in fast main memory (e.g., RAM) and giving the "executable code that matches" orders exclusive access to that order book, purportedly to reduce processing delays and improve throughput.

3. Grounds for Unpatentability

Ground 1: Patent-Ineligible Abstract Idea - Claims 1-32 are invalid under 35 U.S.C. § 101.

  • Prior Art Relied Upon: Petitioner's argument relied on general knowledge of computer science principles (memory hierarchy, process management) and prior art showing the conventional use of these principles in financial systems, such as Chadha (Patent 6,850,906).
  • Core Argument for this Ground:
    • Alice Step 1 (Abstract Idea): Petitioner argued that the claims are directed to the patent-ineligible abstract idea of matching buy and sell orders and recording the transaction information. Petitioner asserted this is a fundamental economic practice, long-standing in commerce and performed manually by specialists on stock exchange floors for decades using physical order books. The claims, therefore, merely automate a well-known human activity and fall into the established abstract category of collecting, analyzing, and storing information. Analogizing to a human specialist keeping a physical order book readily available (in-hand) and being its sole controller, Petitioner argued the patent’s core concepts are rooted in this manual, abstract practice.
    • Alice Step 2 (No Inventive Concept): Petitioner contended the claims lack an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The claims simply recite implementing the abstract idea on a generic computer system (a central processor, main memory, and sequential access storage). The two purported technical improvements—storing the order book in main memory and providing exclusive access to the matching code—were argued to be conventional computing techniques, not an inventive application. Storing frequently accessed data like an order book in faster memory (RAM) is a routine application of the basic memory hierarchy principle to improve speed. Likewise, providing a process with exclusive access to its own data is a fundamental and well-understood feature of modern operating systems, where a process inherently has exclusive access to its own dedicated address space. The combination of these conventional steps was argued to perform in an expected way and does not provide an inventive concept beyond the abstract idea itself.

Ground 2: Indefiniteness - Claims 1-32 are invalid under 35 U.S.C. § 112.

  • Prior Art Relied Upon: This ground relied on an analysis of the claim language and the patent specification, not on prior art.
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner contended that the scope of the key claim limitation "executable code that matches" is fatally unclear and ambiguous. All independent claims require that the order book is "only accessible" by this specific code. However, the claims and specification simultaneously require this same "executable code" to perform numerous other, non-matching functions, such as "order management executable code" that reports matches to a log file, filters log messages for disaster recovery, and handles other activities like adding quotes or canceling orders.
    • Key Aspects: Petitioner argued this creates an irreconcilable contradiction that renders the claim scope uncertain. A person of ordinary skill in the art (POSITA) cannot determine whether the "executable code that matches" is narrowly limited to the matching function itself or if it broadly encompasses the various other management and reporting functions described. This ambiguity makes it impossible to ascertain the boundaries of the claimed invention with reasonable certainty, as a POSITA is left to speculate on the metes and bounds of the crucial "exclusive access" limitation.

4. Key Technical Contentions (Beyond Claim Construction)

  • Petitioner argued that the purported technical solutions in the ’112 patent are merely applications of well-known, conventional computing principles. Storing an order book in main memory (RAM) to improve speed is a direct and routine application of the standard memory hierarchy concept, not a specific technical improvement to computer functionality itself.
  • Petitioner further contended that providing "exclusive access" to the matching process is achieved through standard operating system features, such as dedicating an address space to a computer process, which inherently provides data isolation. This was argued to be a conventional software technique for data management and not a novel technical solution for financial trading systems.

5. Relief Requested

  • Petitioner requested institution of a Covered Business Method (CBM) patent review and cancellation of claims 1-32 of Patent 7,895,112 as unpatentable.