12:01 Tuesday

The Pure Miss

Well, that didn’t take long.

Last week I gave examples of two types of claims that probably shouldn’t have been allowed under current Bilski standards.  Today brings us a fine specimen from another category, the Pure Miss:

U.S. Patent No. 7,530,490 Systems and methods to perform credit valuation adjustment analyses Assignee: Goldman Sachs & Co. 1. A method, comprising: identifying information associated with an existing credit position involving a first party and counterparties; identifying information associated with a proposed credit position involving said first party and counterparties; calculating a first net present value of expected future losses based on a default of each of said counterparties; calculating a second net present value of expected future gains based on a default of said first party; and summing said first and second net present values to identify a third net present value of an expected future credit loss and gain of an overall credit position including both said existing credit position and said proposed credit position.

Commentary:  Not much room for argument here.  No machine. No transformation.  No dice.  And if you’re thinking there might some possible “inherency” defense (i.e., that “calculating” requires a computer), look at dependent claim 2 and think again:

2. The method of claim 1, wherein at least one of said steps is implemented using a computer.

The Notice of Allowance was mailed December 2008, several weeks after Bilski.

This is the third Goldman patent to be featured on this blog.  (See here and here.) That’s starting to approach IBM status, despite Goldman only filing a fraction of the number of patents as Big Blue (or so we’d believe – Goldman has an apparent strategy of filing many of its applications with non-publication requests).  But consider this: in the last six months (i.e., since Bilski), 8 patents have issued to Goldman Sachs.  There was only one 101 rejection in all their prosecution histories, and that came in 2003 (to U.S. Patent No. 7,457,774 “Dynamic reallocation hedge accounting”, which was overcome with adding a “computer” to the claims.)

Going back further, looking at the histories of the 21 Goldman patents that have issued in the last twelve months, the most recent subject matter rejection came in January 2008, applying the State Street test.  Three more of those 21 patents also received 101 rejections along the way for differing reasons: a 2006 application of State Street (7,389,261); a 2007 “computer program” rejection (7,403,919); and a Nuijten-like signal rejection in 2006 (7,376,615).  All these rejections were easily addressed with simple amendments or cancellations.  None of the Goldman patents have claims that were rejected under the test we now know and love.

Other than finding this fact noteworthy, I’m not quite sure what to make of it.  Certainly some of these Goldman patent claims present better than others under the new 101.  But considering that nearly all of them are in what many would consider Bilski’s business method sweet spot, it seems a bit surprising they don’t appear to have received higher scrutiny; even pre-Bilski examiners were applying the machine-or-transformation test and handing out such rejections regularly, right?  Go figure.

Goldman Sachs is legendary for its success on Wall Street. Perhaps it should it be celebrating its success in Alexandria, as well.

(Then again, do you really want to be the owner of a patent on anything within 100 yards of credit default swaps today?)

Bilski Watch

Too many candidates today to list them all.  There’s a plethora of auction patents, including another one to IBM, that certainly die under BIlski.  But the four patents below have their own charm..  Assignees are McAfee, Trading Technologies, Ariba, and Goldman Sachs.  Enjoy.

-aaron

7,483,861 System, method and computer program product for a network analyzer business model

Assignee: McAfee, Inc.

1. A method for charging for network analysis, and executing on a computer including a computer readable medium, comprising:

(a) collecting network traffic information utilizing a plurality of agents;

(b) consolidating the network traffic information utilizing a plurality of host controllers coupled to the agents;

(c) reporting on the network traffic information to a user utilizing a plurality of zone controllers coupled to the host controllers; and

(d) determining a reoccurring fee associated with the reporting based on a number of at least one of the agents, the host controllers, and the zone controllers.

Commentary: This one is tricky.  On the surface it certainly appears to be tied to a machine (the pluralities of host and zone controllers).  But a good case could be made that those are just ‘extra-solution activity.  The real “invention” here is the determining step, which could be performed even if all the data was collected by hand.  It’s one of those claims that makes you realize that under Bilski, the patentability test has a very context-sensitive angle in order to conclude whether a step is integral to the invention or if it is extra-solution.  I’d be curious to hear others’ thoughts on this.

7,483,855 System and method for automated order entry on short queues

Assignee: Trading Technologies

1. A method for order entry in an automated electronic trading environment having at least one accessible electronic exchange to trade at, the method comprising the steps of:

receiving a threshold value and at least one order parameter at a processor, the threshold value configured to determine whether to send an order to an electronic exchange depending on comparison of a length of a queue in a market to the threshold value, the threshold value representing a combination of at least a particular quantity value and a particular number of orders value;

determining a length of a queue for a given price level in the market using the processor, the length of the queue representing a combination of at least a quantity currently available in the market to buy or sell a tradable object at the given price level and a number of orders currently available in the market to buy or sell the tradable object at the given price level;

comparing the length of the queue to the threshold value using the processor; and

automatically sending, using the processor, an order to the electronic exchange, the order having a parameter associated with the at least one order parameter based on the step of comparing.

Commentary: The only particular machine here is a single “processor”.  Need we say more?

7,483,852 Total value bidding

Assignee: Ariba, Inc.

1. A computer implemented method of evaluating values of different terms in online auctions comprising:

obtaining an interest rate and a period from a buyer for a lot, the lot having a predetermined value;

receiving a first bid from a first bidder and a second bid from a second bidder on the lot, the first and second bids each having a payment time and a rebate;

transforming the first bid into a first value and the second bid into a second value using the interest rate, period, and predetermined value from the buyer and the payment times and rebates from the first and second bidders; and

providing as output the first and second value to allow the first value to be compared with the second value to choose the best bid for a particular situation;

wherein the transforming comprises: determining a factor from the interest rate and the period; and generating a first and second adder from the first and second payment times, respectively, the interest rate, the period, and the predetermined value; and wherein the generating comprises: calculating the adder (b) according to equations (2) and (3): [insert image of mathematical summation formula] wherein: q=1 to total time periods; payment value=payment time-period; and extra time.sub.q,=total time units from 0 to q time periods+payment value.

Commentary: Only an allusion to machine here (“computer implemented”).  Could it be that “transforming”step??  The kicker, of course, is that the Examiner allowed this method claim but REJECTED the system and Beauregard claims under 101! 

7,483,851 Method and system for venture capitalist distribution of stock

Assignee: Goldman Sachs

1. A method for providing restricted security distribution instructions to a transfer agent in a distribution of securities from a Venture Capitalist to a plurality of participants comprising:

receiving distribution information from a Venture Capitalist ("VC") in electronic form, the distribution information including data indicating for each participant in the distribution a name, an identification number, and a number of allocated securities;

importing the distribution information into a database system;

matching participants identified in the distribution information to participant information previously entered in the database system;

associating each respective participant in the distribution information with a contact from which instructions regarding a disposition of the allocated securities to each respective participant can be obtained;

indicating a plurality of contacts to be contacted to obtain distribution instructions for associated participants;

sorting the plurality of contacts in an order of urgency;

contacting the plurality of contacts in order of urgency to obtain the distribution instructions, such that contacts associated with more exigent items are contacted before contacts associated with less exigent items;

storing the distribution instructions received from the plurality of contacts in the database system;

generating a report including received distribution instructions for the participants in the distribution; and

providing the report to a transfer agent.

Commentary: Again, the only thing close to a machine here is that pesky “database system.”  Real particular.

Bilski Watch: Good Bad and Ugly

Lots of candidates today, but here are the winners.

 

GOOD:

This one looks to have been Bilskified pretty well.  Need the file history to see for sure, but PAIR has been down.  It's to JPMorgan:

United States Patent 7,467,109  System and method for determining eligibility and enrolling members in various programs

 

1. A computer implemented method for enrolling an individual, who has an obligation to a financial institution, in a program wherein at least some financial status information relating to the individual is known, comprising:

• providing by at least one processor a list of payment programs to a user;
• receiving, from the user, a selection of a payment program suitable to the individual's financial circumstances from the list of payment programs;
• determining by the at least one processor whether the individual is eligible to enroll in the selected payment program by performing an evaluation with a processor based at least in part upon the at least some financial status information relating to the individual;
• providing information on the selected payment program to the user based on determining whether the individual is eligible to enroll in the selected payment program;
• receiving enrollment information for the selected first program from the user;
• determining whether the enrollment information meets a set of predetermined criteria for enrolling the individual in the selected payment program by performing an evaluation with a processor on at least part of the enrollment information; and
• enrolling the individual in the selected payment program when the enrollment information meets the set of predetermined criteria and the individual accepts enrollment in the selected payment program.

 

The machine here is the computer and processor, which may or may not be 'particular' (need to look at spec and figs to evaluate), but they did a good job putting as much meat on the bones as they apparently could.

 

 

BAD:

According to Ex parte Halligan, this one is doomed.  Nice try, though.  Assigned to The Olsen Group, of Switzerland.

United States Patent 7,467,110  Method for market making

 

1. A method performed by a computer of market making in an asset trading system, comprising the steps of:

(a) receiving asset price data for a first asset;

(b) receiving current system position information for the first asset;

(c) receiving quote request information for the first asset;

(d) calculating target position information for the first asset for each of one or more trading models; and

(e) calculating with the computer a bid/ask quote in response to said received quote request information, said calculation of a bid/ask quote using a hedging method and being based on said asset price data, said quote request information, said current system position information, and said target position information.

 

 

UGLY:

This one assigned is to Goldman Sachs:

United States Patent 7,467,112 Method for listing a futures contract that physically settles into a swap

 

So it has the transformation right there in the title... not sure what it means to 'physically settle'.  It's not in the claims.  I'm curious about the prosecution history (less than a year from filing to issuance), but I'll have to wait for PAIR. [UPDATE: This application was filed under the Accelerated Examination procedure. 101 is not mentioned in the prosecution history]

 

1. A method of operating an exchange, the method comprising:

listing a futures contract;

receiving an electronic signal that represents an order to buy or an order to sell the futures contract; and

upon settlement of the futures contract, requiring entry into a specified credit default index swap on a specified date against a specified counterparty, wherein

(a)(i) a long position in said futures contract entitles a holder of the long position to receive a fixed side of the specified credit default index swap on the specified date, and (ii) a short position in said futures contract entitles a holder of the short position to receive a floating side of the specified credit default index swap on the specified date; or

(b)(i) a short position in said futures contract entitles the holder of the short position to receive a fixed side of the specified credit default index swap on the specified date, and (ii) a long position in said futures contract entitles the holder of the long position to receive a floating side of the specified credit default index swap on the specified date; said specified counterparty being a clearinghouse.

 

note that the "electronic signal" probably doesn't constitute a particular machine, or an article for transformation -- it's not patentable subject matter under Nuijten.