PTAB

CBM2018-00041

Investors Exchange LLC v. Nasdaq, Inc.

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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. The purported invention aims to improve order matching speed by storing the electronic order book in fast main memory (RAM) and structuring the system so that a "first portion" of a program has exclusive access to the order book for matching, while a "remaining portion" for other activities (like logging) must access the order book only through that first portion.

3. Grounds for Unpatentability

Ground 1: Claims 1-30 are invalid under 35 U.S.C. §101 as directed to a patent-ineligible abstract idea.

  • Prior Art Relied Upon: This ground does not rely on a specific prior art combination but references general knowledge and Chadha (Patent 6,850,906) to demonstrate the conventionality of the recited techniques.
  • Core Argument: Petitioner argued that the claims are invalid under the two-step framework from Alice Corp. v. CLS Bank Int'l.
    • Step 1 (Directed to an Abstract Idea): Petitioner asserted that the claims are directed to the patent-ineligible abstract idea of receiving and matching buy/sell orders and storing information about the processing of those orders in a log. This was characterized as a fundamental, long-standing economic practice. Petitioner argued that the entire process could be, and was, performed manually by NYSE specialists using pencil and paper long before the patent's filing date. The specialists maintained a physical order book, matched incoming orders, and recorded the results, mirroring the core logic of the claims.
    • Step 2 (No Inventive Concept): Petitioner contended that the claims lack an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The implementation on a computer was argued to be merely the use of a generic tool for its intended purpose. The key claim limitations were described as conventional:
      • The use of a generic "computer system" with a "processor," "main memory," and "persistent storage device" adds nothing inventive.
      • Storing the "order book" in "main memory" (e.g., RAM) to improve access time was a well-known computing technique based on the principle of memory hierarchy. Petitioner cited Chadha, which taught using RAM to store financial data for fast access in a time-critical search engine, to show this was conventional in the financial technology field.
      • The configuration of a "first portion" of a program having exclusive access to the order book and a "remaining portion" accessing it only through the first is also not inventive. Petitioner argued this is analogous to the well-understood computer science concept of separate processes with dedicated address spaces that communicate via inter-process messaging. It is also analogous to the real-world role of an NYSE specialist, who had exclusive possession of the order book and through whom other brokers had to request information.

Ground 2: Claims 1-30 are invalid under 35 U.S.C. §112 for lacking written description support.

  • Prior Art Relied Upon: This ground is not based on prior art.
  • Core Argument: Petitioner argued the specification fails to provide an adequate written description for the claimed "remaining portion" of the computer program, which must be distinct from the "first portion."
    • Prior Art Mapping: The claims require two distinct program portions: a "first portion" that finds and matches orders with exclusive access to the order book, and a "remaining portion" that performs other activities (like accessing a log) and can access the order book only through the first portion. Petitioner asserted that the specification's only disclosure corresponding to these functions is the "order management process 64" (within "matching process 62"). However, this single process is described as performing the functions of both the "first portion" (matching orders) and the "remaining portion" (reporting activities to the order activity log file).
    • Key Aspects: Because the specification allegedly discloses only a single, integrated process performing the functions of both claimed portions, it fails to describe the claimed invention where two distinct portions are required. The specification does not describe any other process that could serve as the "remaining portion" (e.g., the order file builder process 70 accesses the log file but not the order book). Therefore, Petitioner contended the inventors did not possess the full scope of the claimed invention at the time of filing.

4. Relief Requested

  • Petitioner requests the institution of a Covered Business Method patent review and the cancellation of claims 1-30 of the '622 patent as unpatentable.