PTAB

CBM2018-00041

Investors Exchange LLC v. Nasdaq Inc

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Order Matching Process and Method
  • Brief Description: The ’622 patent describes a computer system and method for trading securities in an electronic venue. The purported invention focuses on improving order matching speed by storing the electronic "order book" in a computer's main memory (e.g., RAM) and architecting the controlling software into two parts: a "first portion" with exclusive access to the order book for matching trades, and a "remaining portion" for other activities (like logging) that can only access the order book indirectly through the first portion.

3. Grounds for Unpatentability

Ground 1: Claims 1-30 are Invalid as Patent-Ineligible Subject Matter under §101

  • Prior Art Relied Upon: The argument relied on the alleged conventionality of the claimed elements as understood through fundamental computer science principles, historical financial market practices, and specific prior art. Petitioner analogized the claimed method to long-standing manual practices of NYSE specialists and cited Chadha (Patent 6,850,906) to demonstrate that storing financial data in main memory for faster access was a known technique.
  • Core Argument for this Ground: Petitioner asserted that the claims were invalid under the two-step framework from Alice Corp. v. CLS Bank Int’l.
    • Step 1 (Directed to an Abstract Idea): Petitioner contended the claims are directed to the abstract idea of receiving, matching, and logging securities orders. This was framed as a fundamental economic practice that predates electronic trading. The petition detailed how NYSE specialists manually performed these exact functions for decades using a physical order book, pencil, and paper. The core limitations of the claims were argued to be direct automations of this manual process. For instance, storing the order book in "main memory" was analogized to a specialist keeping the physical order book immediately at hand for quick access, rather than filed away. The "first portion" / "remaining portion" software architecture was analogized to the specialist having exclusive access to the order book, forcing other floor brokers (the "remaining portion") to request information through the specialist (the interface) rather than accessing the book directly.
    • Step 2 (No Inventive Concept): The petition argued that the claims lack an inventive concept because they merely implement the abstract idea using generic, conventional computer components (a processor, main memory, persistent storage). Petitioner asserted that the ordered combination of elements added nothing more than the routine application of old ideas. Specifically, it was argued that storing frequently accessed data in faster main memory was a basic tenet of computer architecture used to improve performance. Further, the claimed software architecture of bifurcated access was argued to be a straightforward application of the well-known computer science principle of inter-process communication, not a technical solution to a technical problem.

Ground 2: Claims 1-30 are Invalid for Lack of Written Description under §112

  • Prior Art Relied Upon: Not applicable (written description challenge).
  • Core Argument for this Ground:
    • Mapping to Specification: Petitioner argued that the ’622 patent’s specification fails to provide adequate written description to demonstrate that the inventors possessed the claimed invention, specifically the "remaining portion" of the computer program as claimed. The independent claims require a "first portion" that matches orders and has exclusive access to the order book, and a distinct "remaining portion" that (a) accesses a log in persistent storage and (b) accesses the order book only through the first portion. Petitioner contended that the specification’s only relevant disclosure is the "order management process 64" (within "matching process 62"), which the specification describes as performing all these functions. The petition pointed to text and figures indicating that process 64 both matches orders (the "first portion" function) and reports activities to the "order activity log file 22" (the "remaining portion" function). Because the specification allegedly discloses a single software module performing the functions of both claimed portions, Petitioner argued it fails to describe the claimed invention where two distinct portions are required. Thus, the specification does not convey to a POSITA that the inventors possessed an invention with the claimed two-part structure. All dependent claims were argued to be invalid for the same reason.

4. Key Technical Contentions (Beyond Claim Construction)

  • A central technical contention underpinning the §101 invalidity argument was that the claimed software architecture is not a technological invention but a conventional design pattern. Petitioner argued that creating a "first portion" of a program with exclusive access to data in its memory and requiring a "remaining portion" to access that data only via messaging is a textbook implementation of inter-process communication. This characterization was used to argue that the claims do not improve computer functionality itself but merely use conventional computing principles to automate a pre-existing business method.

5. Relief Requested

  • Petitioner requested that the Board institute a Covered Business Method (CBM) review for claims 1-30 of the ’622 patent and find those claims unpatentable, leading to their cancellation.