QuanTile Technologies Ltd v. TriopTima Ab

1. Case Identification

• Case #: CBM2020-00011
• Patent #: 7,613,649
• Filed: March 18, 2020
• Petitioner(s): Quantile Technologies Limited
• Patent Owner(s): TriOptima AB
• Challenged Claims: 1-22

2. Patent Overview

• Title: System and Method of Implementing Massive Early Terminations of Long Term Financial Contracts
• Brief Description: The ’649 patent discloses a computer-implemented system for managing Over-the-Counter (OTC) derivative portfolios. The system uses a network to exchange trade data between parties, processes the data to identify linked transactions, and generates proposals for premature termination or assignment of transaction packages to reduce risk and operational costs.

3. Grounds for Unpatentability

Ground 1: Claims 1-22 are Directed to Patent-Ineligible Subject Matter under 35 U.S.C. § 101.

• Evidence Relied Upon: Petitioner did not rely on traditional prior art patents but instead cited evidence of long-standing financial practices (e.g., Exh. 1002, 1008, 1011, 1032), legal precedent under Alice and Bilski, and admissions within the ’649 patent’s own specification regarding the state of the art.

• Core Argument: Petitioner argued that all challenged claims are unpatentable under the two-step framework from Alice Corp. v. CLS Bank Int’l, as they are directed to an abstract idea without adding an inventive concept.

  • Alice Step One (Directed to an Abstract Idea):

    • Petitioner asserted that the claims are directed to the abstract idea of simplifying a trade portfolio through the premature termination of certain financial transactions. This concept was characterized as a fundamental economic practice that has been used in the financial industry for decades through various well-known methods, including bilateral restructuring, novation, break-clauses, and multilateral netting.
    • Petitioner further argued that the claims recite unpatentable mental steps. The core process—identifying transactions between parties, selecting linked trades, and proposing a subset for termination to reduce risk—was described as a cognitive process that can be performed by a human, with or without a computer. The use of a computer to perform these steps does not change the abstract nature of the underlying process.

  • Alice Step Two (Lacks an Inventive Concept):

    • Petitioner contended that the additional claim elements, viewed both individually and as an ordered combination, fail to transform the abstract idea into a patent-eligible invention. The claims add nothing more than the routine application of the abstract idea using generic and conventional technology.
    • Generic Components: The claims recite generic computer and networking components, such as a "plurality of data input/output and processing stations," a "network," and a "processor." Petitioner argued these components are not specialized and are used only for their basic, well-understood functions of receiving, processing, and transmitting data. The patent specification itself allegedly describes these components as conventional and their implementation as routine, thereby failing to provide any improvement to computer functionality itself.
    • Result-Oriented Functionality: The claims were characterized as being directed to result-oriented functionalities rather than specific technical solutions. For example, the claims recite "generating... premature termination and assignment proposals" but do not specify a novel or non-conventional method for how this is accomplished. Petitioner noted that the patent's only disclosed calculation method is "linear programming," which the specification admits is a standard, well-known mathematical technique with "vast literature" and available software packages.
    • No Inventive Combination: Petitioner asserted that the ordered combination of steps—gathering data, analyzing it, and proposing a result—is merely a high-level, conventional sequence for implementing the underlying financial practice. This sequence does not provide an inventive concept beyond the abstract idea itself.
    • Preemption: Finally, Petitioner argued that the claims are unduly preemptive. By claiming the fundamental concept of portfolio simplification applied to OTC derivatives on a generic computer, the claims would improperly monopolize a basic tool of commerce, preventing others from practicing a long-standing economic practice using modern technology.

4. Relief Requested

• Petitioner requests institution of a Covered Business Method review and cancellation of claims 1-22 of Patent 7,613,649 as unpatentable for reciting patent-ineligible subject matter under 35 U.S.C. § 101.