PTAB

CBM2018-00039

Investors Exchange LLC v. Nasdaq Inc

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Multi-Parallel Architecture and a Method of Using the Same
  • Brief Description: The ’827 patent describes a securities trading system using a "multi-parallel architecture." The system comprises multiple "securities processors" and an "order routing system" that routes incoming security interest messages to one of the processors based on a pre-determined assignment linked to a unique security identifier.

3. Grounds for Unpatentability

Ground 1: Patent Ineligibility under §101 - Claims 1-76 are directed to an abstract idea

  • Prior Art Relied Upon: This ground is based on legal precedent under 35 U.S.C. §101 and general knowledge, not specific prior art patents. Petitioner referenced historical practices at the New York Stock Exchange (NYSE) and in general mailrooms as evidence of the conventional, manual nature of the claimed concept.
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that claims 1-76 are directed to the patent-ineligible abstract idea of using a message's content to route it for processing. The argument followed the two-step Alice framework.
      • Step One (Abstract Idea): Petitioner contended the core of the invention is routing information based on content (a security identifier) to a designated processor. It asserted this is a fundamental, long-standing economic and organizational practice, analogous to routing physical mail to different departments based on its subject matter or routing stock orders on the pre-computerized NYSE trading floor to the correct specialist's post based on the stock symbol.
      • Step Two (No Inventive Concept): Petitioner argued the claims lack an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The claims merely recite the use of generic and conventional computer components (processors, memory, networks) to automate a well-known manual process. The specification confirmed that the invention could be implemented in "any computing or processing environment" using standard hardware. Petitioner asserted that the dependent claims added only conventional, routine activities like validating orders, using queues, maintaining order books, and using configurable look-up tables, none of which provide an inventive concept.

Ground 2: Indefiniteness under §112 - Claims 1-76 are indefinite for lacking corresponding structure

  • Prior Art Relied Upon: This ground is based on legal standards for claim definiteness under 35 U.S.C. §112, not specific prior art references.

  • Core Argument for this Ground:

    • Prior Art Mapping: Petitioner argued that the key claim terms "securities processor" and "order routing system" are means-plus-function limitations under §112, ¶ 6, but that the ’827 patent specification fails to disclose adequate corresponding structure for performing the recited functions.
    • "Securities Processor": Petitioner asserted that this term has no plain and ordinary meaning to a person of ordinary skill in the art (POSITA) and is understood only by its claimed function of "processing attributable security interest messages." As a means-plus-function term, it requires the specification to disclose a corresponding algorithm. Petitioner argued the specification provides only high-level functional descriptions (e.g., "validating," "managing") rather than a specific algorithm for how the processing is accomplished.
    • "Order Routing System": Similarly, Petitioner contended that "order routing system" is a functional term for "routing" messages, lacks a commonly understood structural meaning, and is not linked to any specific algorithm in the specification. The patent's block diagrams and descriptions were alleged to be too high-level and generic to provide the legally required structural support. The failure to disclose this structure rendered all claims indefinite.

  • Additional Grounds: Petitioner asserted that if the key claim terms were not found to be means-plus-function limitations, then claims 1-33 would be invalid under §101 for claiming non-statutory subject matter (i.e., abstract software lacking a physical or tangible form). Petitioner also asserted that claims 67-76 are indefinite under §112, ¶ 2 because the inconsistent and unclear use of various "processor" terms (e.g., "the processor," "a plurality of securities processors," "a plurality of processors") within the same claim makes the claim scope impossible to ascertain with reasonable certainty.

4. Key Claim Construction Positions

  • "[S]ecurities processor": Petitioner argued this term is a means-plus-function limitation governed by §112, ¶ 6. The recited function is "processing attributable security interest messages generated by market participants." Petitioner contended the term itself does not connote sufficiently definite structure, and the specification fails to disclose a corresponding algorithm, instead describing the processor as generic software or hardware. In the alternative, if not a means-plus-function term, its broadest reasonable interpretation is "software and/or hardware that performs the recited processing function."
  • "[O]rder routing system": Petitioner argued this term is also a means-plus-function limitation with the recited function of "routing each attributable security interest message to one of the securities processors according to the assignment." Petitioner asserted it is not a term of art with a specific structure, and the specification fails to disclose a corresponding algorithm for performing the routing. In the alternative, its broadest reasonable interpretation is "software and/or hardware that performs the recited routing function."

5. Relief Requested

  • Petitioner requests institution of a Covered Business Method (CBM) patent review and cancellation of claims 1-76 of the ’827 patent as unpatentable.