[00:00:01] Speaker 00: We have four cases on the calendar this morning. [00:00:08] Speaker 00: One principal common issue, same parties, two of them appealing from holdings of eligibility and two appealing from holdings of ineligibility. [00:00:25] Speaker 00: There are some other issues. [00:00:28] Speaker 00: You have a lot of papers, but I would ask after the first two cases you switch just so we can keep straight, so I can keep straight who's who. [00:00:39] Speaker 00: To the extent that there are common issues, we would ask that you not be repetitive. [00:00:45] Speaker 00: No one's going to be marked down if you don't cross every T on each issue in each case when you've already dealt with it. [00:00:56] Speaker 00: If it's in the blue brief, we know it. [00:00:58] Speaker 00: And we will deal with it. [00:01:00] Speaker 00: So first case is Trade Station Group, IBG versus Trading Technologies, 2017, 1732. [00:01:12] Speaker 00: Mr. Kikard. [00:01:15] Speaker 04: Good morning, and may I please the court. [00:01:27] Speaker 04: To be respectful to Your Honor's instructions, I will address the 101 issues in this case first. [00:01:32] Speaker 04: I just want to point out from our perspective the 101 issues involving the 304 patent in this case and the 132 patent in the case that follows. [00:01:40] Speaker 04: I think rise and fall together, there's very few differences in the records. [00:01:45] Speaker 04: The 304 and 132 patents claim a fundamental economic practice that is embodied in a pre-electronic analog. [00:01:54] Speaker 04: That was the specialist book. [00:01:56] Speaker 04: And like the 304 patents claims, the specialist book, Specialist Using Pen and Paper, would display in that book the very same information that is claimed in the 304 patent. [00:02:06] Speaker 03: Your biggest problem, it seems, is that the Patent Office concluded that your arguments did not differ from those that were proffered in the CQG case, and that both the 304 and the 132 had been expressly dealt with in the Federal Circuit [00:02:26] Speaker 03: on this exact issue, and to the extent that you haven't raised any factual issues, that that was a decision on a legal point, not a factual one that was record-based then or necessarily now, at least according to what the office wrote here in this opinion, in particular on appendix page four. [00:02:47] Speaker 03: So can you address why it was an error for the court to, or for the board to take into account [00:02:56] Speaker 03: and say that we don't see a persuasive reason to deviate from that logic. [00:03:01] Speaker 03: I mean, they clearly didn't understand them to be bound by it, but they nonetheless found it persuasive. [00:03:05] Speaker 04: So can you focus on that? [00:03:06] Speaker 04: Yeah, so we've briefed. [00:03:08] Speaker 04: I think there's an APA problem. [00:03:11] Speaker 04: At the threshold, the board didn't explain why it found the evidence in particular that we presented to be persuasive or not persuasive. [00:03:22] Speaker 04: It sort of brushed those. [00:03:24] Speaker 03: Well, it didn't say evidence. [00:03:25] Speaker 03: It said there's not a persuasive reason on legal. [00:03:28] Speaker 03: Basically, they treated it as a question of law. [00:03:31] Speaker 03: Yes. [00:03:31] Speaker 03: And they didn't see any basis to deviate from the prior determination of law one, the same record. [00:03:39] Speaker 04: I think it's helpful to go back to how this case proceeded below with the PTAB. [00:03:43] Speaker 04: So the parties had briefed all the issues. [00:03:47] Speaker 04: They had actually had an argument from the board. [00:03:49] Speaker 04: And then the decision came down. [00:03:52] Speaker 04: additional briefing on why CQG wouldn't control before they issued their final written decisions. [00:03:58] Speaker 04: And in that briefing, IBG presented to the board both legal arguments about the abstract idea and ALICEP2 as well as evidence, which we've presented in our brief, the wife's reference, you see it with the in-text GUI, and then finally with the TSE interface. [00:04:18] Speaker 04: It is our position that the board needed to contend with that evidence in order to resolve the first question under the ALICE prong one, whether or not there's an abstract idea. [00:04:30] Speaker 04: If you look at the CQG decision on its own terms, it says that it adopted the district court's rationale. [00:04:37] Speaker 04: And then it expressly says that, among other things, it finds it wasn't an abstract idea because the [00:04:44] Speaker 04: claims of the 304 patent are not directed to a long known idea. [00:04:47] Speaker 03: To the extent that you're, I'm trying to understand your argument and I'll be honest, I'm not completely following it because are you focusing on step one or step two of Alice? [00:04:58] Speaker 04: Step one. [00:04:58] Speaker 03: Because I don't understand that we've ever suggested that there are factual underpinnings of step one. [00:05:05] Speaker 03: And if step one, namely, is this claim directed to, which sounds like claim construction, right? [00:05:11] Speaker 03: Directed to an abstract idea, [00:05:14] Speaker 03: That's a legal question, or at least I haven't seen you. [00:05:17] Speaker 03: You didn't argue in your brief that it was a factual question. [00:05:19] Speaker 03: No, we did. [00:05:19] Speaker 03: Oh, you did? [00:05:20] Speaker 04: If you look at our standard of review and the legal evidence. [00:05:22] Speaker 03: No, your standard of review was that overall, the 101 question can contain questions of fact. [00:05:29] Speaker 03: But I guess I didn't appreciate that you were arguing that step one is self-factual, or contains questions of fact. [00:05:35] Speaker 03: Well, yes. [00:05:36] Speaker 04: How do you understand? [00:05:37] Speaker 04: That step one can, in many cases, involve subsidiary factual issues. [00:05:42] Speaker 04: Such as? [00:05:43] Speaker 04: For example, if you look at the Alice decision at the Supreme Court, they looked outside the intrinsic record of the patent and considered treatises in the financial services industry. [00:05:54] Speaker 04: This court has said in Berkheimer, of course, that you could have factual inquiries under the second step of Alice. [00:06:01] Speaker 04: We believe that there are good reasons to also look. [00:06:04] Speaker 03: Under the second step of Alice, there's factual inquiries. [00:06:06] Speaker 03: But I guess I still don't understand your argument about step one. [00:06:10] Speaker 04: Sure. [00:06:13] Speaker 04: this case illustrates well why there ought to be factual inquiries under step one. [00:06:19] Speaker 03: The way the CQG... I don't think this case indicates there ought to be factual inquiries under step one, at least I don't understand the argument to be persuasive. [00:06:27] Speaker 03: I think the problem you have is you just think that the CQG decision got it wrong and you think the board should not have followed it even though they weren't found by it and you're a different defendant. [00:06:38] Speaker 03: I mean, that seems to me what you're really arguing. [00:06:40] Speaker 04: Respectfully, Judge, no. [00:06:42] Speaker 03: You don't think they got it wrong? [00:06:44] Speaker 03: You think CQG got that one right? [00:06:47] Speaker 04: CQG had a set of facts in front of it and if you read the decision it was it only considered the patent itself and the problem with that is that when we look at whether something was long known or a long-standing economic practice the patent may not answer that question and if we don't look outside the patent [00:07:05] Speaker 03: That invites mischief from... Well, now you're talking step two again, aren't you? [00:07:09] Speaker 04: No, it's step one. [00:07:10] Speaker 04: Whether something is a fundamental economic practice can require... Long known. [00:07:17] Speaker 03: You said long known. [00:07:18] Speaker 03: That's step two. [00:07:18] Speaker 03: That has nothing to do with step one. [00:07:20] Speaker 03: Step one is focusing on whether it's directed to an abstract idea. [00:07:23] Speaker 03: Whether the abstract idea is new will not save you from an eligibility. [00:07:27] Speaker 03: Many formulas are new. [00:07:29] Speaker 03: They're still abstract because they're formulas. [00:07:31] Speaker 04: True, but if we look to the Allison Bilsky decisions, the Supreme Court looked outside the patent, cited treatises in its decision for the notion that what the claims in those cases were directed to were fundamental economic practices. [00:07:44] Speaker 04: And this case, I think, illustrates the instance where if you look just at the patent, you wouldn't understand what the fundamental economic practices were, which we see from the specialist book and the trading interfaces that followed it. [00:07:56] Speaker 04: And if we don't look outside the patent, as I was about to say, [00:07:59] Speaker 04: It invites mischief from patent drafters. [00:08:01] Speaker 04: They will say self-serving things that will obscure or omit what were the fundamental economic practices at the time of the invention. [00:08:10] Speaker 04: It's very important to look at the evidence. [00:08:12] Speaker 04: And if you look at Weiss, what it shows is that the claims here are directed, again, to a fundamental economic practice. [00:08:20] Speaker 04: And the 304 claims essentially say computerize them. [00:08:24] Speaker 04: The claims there are directed to a series of results. [00:08:29] Speaker 04: a number of displaying steps. [00:08:31] Speaker 04: The displaying steps involve nothing more than presenting information. [00:08:35] Speaker 00: Mr. Pickard, you're moving into what you were saving for a bottle. [00:08:39] Speaker 00: You can continue or save it. [00:08:42] Speaker 00: And then, of course, you're splitting your time with the government. [00:08:46] Speaker 04: I will save my bottles. [00:08:48] Speaker ?: All right. [00:08:48] Speaker 00: Thank you. [00:08:48] Speaker 00: You'll be back. [00:08:50] Speaker 04: I'm sure. [00:08:51] Speaker 00: Ms. [00:08:52] Speaker 00: Allen, are you speaking first? [00:08:55] Speaker 00: Next? [00:08:57] Speaker 00: All right, I've been misinformed. [00:09:02] Speaker 00: Mr. Gannon. [00:09:09] Speaker 00: You are Mr. Gannon. [00:09:11] Speaker 05: I am Mr. Gannon. [00:09:11] Speaker 00: You are appellee, counter. [00:09:15] Speaker 00: We're the across appellant. [00:09:18] Speaker 01: So you're only going to address his arguments? [00:09:22] Speaker 05: Well, I thought the order would be that [00:09:25] Speaker 05: the government would go next, and then I would respond to both. [00:09:30] Speaker 00: Well, that's what we were given by the clerk's office when you all checked in, that the government would proceed. [00:09:41] Speaker 02: I'm happy to. [00:09:44] Speaker 02: The clerk's office told me I'm a good clerk, because we're responding to an issue at the race office. [00:09:48] Speaker 00: Well, Mr. Cannon will be replying to the government's position, correct? [00:09:55] Speaker 00: Correct. [00:09:55] Speaker 00: So I think we ought to hear from the government next. [00:10:01] Speaker 00: And you have five minutes. [00:10:07] Speaker 02: Sorry for the confusion. [00:10:12] Speaker 01: Thank you. [00:10:12] Speaker 01: So did the Supreme Court analysis rely on extrinsic evidence in working through step one? [00:10:21] Speaker 02: I'm sorry, Your Honor. [00:10:22] Speaker 02: The United States has intervened in this case only to address trading technology's retroactivity constitutional challenges to cover business method review. [00:10:30] Speaker 02: All right. [00:10:32] Speaker 02: And with respect to that issue, as we've explained in our briefs, we think that trading technology's challenges are forfeited and that these CBM reviews do not involve a retroactive application of the law at all. [00:10:46] Speaker 02: But I would like to focus on the actual due process and takings arguments that they raise. [00:10:51] Speaker 02: We think that just as this court held in Patlex, Congress had a rational basis for applying covered business method review to all patents that were in existence when the AIA was passed. [00:11:03] Speaker 02: And that was to correct agency errors and to ensure that patents are kept within their legitimate scope. [00:11:11] Speaker 02: And those were the reasons this court relied on in Patlex, and they applied fully here. [00:11:16] Speaker 02: And then with respect to the takings argument, [00:11:21] Speaker 02: We think that the cancellation of a patent through covered business method review does not constitute a taking, because it rests on a determination that the patent holder never had a valid property interest in the first instance. [00:11:37] Speaker 01: So when the Supreme Court said in oil states that a decision should not be misconstrued, our decision should not be misconstrued as suggesting that patents are not property for purposes of due process clause or takings clause, [00:11:50] Speaker 01: in support of its argument about CBN. [00:11:54] Speaker 01: Are you arguing that the Supreme Court was wrong there, or that in this particular case, this issue, a due process clause or takings clause, has been not raised? [00:12:08] Speaker 02: We're not saying that the Supreme Court was wrong. [00:12:12] Speaker 02: We agree that valid patents are property interests. [00:12:17] Speaker 02: Our point on the takings issue is merely that [00:12:20] Speaker 02: When the board cancels a patent, which happens after this court has affirmed the board's finding of unpatentability, that is a determination that there never was a valid patent. [00:12:32] Speaker 02: The patent holder never had a valid property right. [00:12:36] Speaker 02: And therefore, there was no taking. [00:12:41] Speaker 02: And so we think that that resolves the taking issue. [00:12:45] Speaker 02: And in addition, it could also be viewed through the lens of compensation [00:12:49] Speaker 02: And at the point where both this court and the PTO have determined that patent claims are unpatentable, the patent holder would be due no compensation because the value of the patent would be nothing. [00:13:05] Speaker 02: And then just to focus on the due process inquiry, again, the Supreme Court did not resolve that issue, but this court did resolve a very similar issue in Patlex. [00:13:13] Speaker 02: In that case, this court held that [00:13:15] Speaker 02: The ex parte re-examination procedures did not violate the due process clause even when they're applied to patents that were issued before the creation of ex parte re-examination. [00:13:25] Speaker 02: And we think that that reasoning applies equally here to covered business method review. [00:13:30] Speaker 03: The government argues, as I understand it, that the patentee forfeited their constitutional arguments because they didn't raise them before the board. [00:13:38] Speaker 03: But is it correct that the board can't decide constitutional issues? [00:13:42] Speaker 02: No, Your Honor, the board does address constitutional issues. [00:13:45] Speaker 02: In MCM portfolio, for example, the board did address Article III and Seventh Amendment challenges to inter-parties review. [00:13:52] Speaker 02: The board has addressed sovereign immunity issues in a number of cases. [00:13:57] Speaker 02: So we do think the board could have addressed the issue if they had raised it before the board. [00:14:02] Speaker 02: The general rule is that a party must raise something before an agency. [00:14:07] Speaker 03: Yes, but the rule is subject to futility, and if the board couldn't address these issues, then it would be futile to raise them before the board. [00:14:14] Speaker 03: At least that's their argument. [00:14:16] Speaker 02: That is their argument, Your Honor, and we don't think it would have been futile. [00:14:20] Speaker 02: First of all, as past practice has shown, the board could have addressed it and provided reasoning that this court could have then reviewed. [00:14:26] Speaker 02: In addition, the board could have decided not to institute covered business method review or could have terminated a covered business method review if it agreed with the patent holder's arguments that such review would be unconstitutional. [00:14:41] Speaker 01: Did the board decide in Sony that it acknowledged that it lacks authority to rule on constitutional issues? [00:14:50] Speaker 02: I'm not aware of that particular case, Your Honor. [00:14:52] Speaker 02: I do know that in MCM portfolio, the court did address [00:14:55] Speaker 02: the Article 3 and 7 Amendment issues that were then later resolved by this Court. [00:15:01] Speaker 02: So we think that the Board could have addressed these issues had they been raised. [00:15:06] Speaker 02: Again, we recognize that forfeiture is obviously discretionary. [00:15:10] Speaker 02: Our point is just that the general rule is that parties must raise issues before the agency if they want to preserve them for appeal. [00:15:16] Speaker 02: They didn't do that here. [00:15:18] Speaker 02: There is no exceptional reason to deviate from the general rule. [00:15:20] Speaker 03: I understand that you're telling me that in a particular case, the board did look at constitutional issues, but I'm a little perplexed, as I said here, because it's been my understanding that the PTO, as part of the executive branch, isn't permitted to rule on constitutional challenges. [00:15:35] Speaker 03: Am I just completely mistaken in my understanding of the law, the separation of powers and law issues? [00:15:41] Speaker 03: I mean, are you telling me that the PTO is allowed to make rulings on constitutional issues? [00:15:47] Speaker 02: Well, Your Honor, for example, the statute that provides that the director may institute covered business method review does not require the director to institute covered business method review in any particular case. [00:15:58] Speaker 02: So if the board did agree with a patent holder's argument that such review would be unconstitutional, the board could have declined to institute the review. [00:16:10] Speaker 02: I'm sorry. [00:16:10] Speaker 03: Maybe you misunderstood my question. [00:16:12] Speaker 03: My question was, are you [00:16:13] Speaker 03: It's been my understanding that the board, the PTO, is not permitted to rule on constitutional issues. [00:16:19] Speaker 03: I understand that you've given us a particular case where they appear to have done so, but it's my understanding that that's not the correct state of the law. [00:16:27] Speaker 03: The fact that they did it in a given case, and maybe that wasn't challenged or ruled upon, the propriety of the PTO rendering a actual binding determination on a constitutional issue [00:16:40] Speaker 03: I thought that that wasn't appropriate under the law. [00:16:44] Speaker 03: Am I wrong about that? [00:16:45] Speaker 03: I mean, I'm not positive, and I don't have the cases in front of me. [00:16:49] Speaker 03: Am I wrong in my understanding that separation of powers would prohibit the executive branch from ruling on the constitutionality of statutes? [00:17:01] Speaker 02: I know that the board has addressed constitutional issues in that case. [00:17:05] Speaker 03: I don't care if the board's done it in the past. [00:17:07] Speaker 03: Here, we've got an argument that they're not permitted to do it. [00:17:11] Speaker 03: And I want to know from you, are they permitted? [00:17:13] Speaker 03: Under separation of powers, is the executive branch allowed to rule on the constitutionality of a statute? [00:17:20] Speaker 02: I don't see why they couldn't issue an opinion regarding their view of the constitutionality of the statute. [00:17:25] Speaker 02: That doesn't make sense to me. [00:17:27] Speaker 03: What is that, an advisory opinion? [00:17:28] Speaker 03: That's not what I'm asking. [00:17:29] Speaker 03: I'm asking if they can render rulings on constitutional issues. [00:17:33] Speaker 03: I don't know. [00:17:34] Speaker 03: It's been my understanding that they could not, that the board was not permitted to make determinations of constitutionality. [00:17:42] Speaker 03: I understand that you say there's a couple cases in which they've done so, but maybe [00:17:46] Speaker 03: My recollection is completely wrong. [00:17:49] Speaker 02: And I probably wasn't clear in one of my earlier answers, but a way in which the board could do that would be to decline to institute. [00:17:56] Speaker 03: But that's not a ruling on constitutionality. [00:17:57] Speaker 03: That's a discretionary decision by the director, which could be based on his view of what our determination of constitutionality would ultimately be. [00:18:05] Speaker 03: And Article III Tribunal, which definitely has the right and duty to rule in constitutional challenges. [00:18:11] Speaker 02: Your Honor, I'm not aware of any reason that the board [00:18:14] Speaker 01: Well, my understanding is the same as Judge Warren. [00:18:18] Speaker 01: I have the same concern. [00:18:19] Speaker 01: It seems to me that if an agency makes constitutional decisions, and it's by definition acting outside of the statute under which it was created, it's by definition acting outside of its regulations, because it's relying, it's interpreting something that it doesn't have the authority to do. [00:18:41] Speaker 01: It's got the authority to establish regulations to interpret that or to interpret the statute. [00:18:47] Speaker 01: I don't see that it has authority to interpret the Constitution. [00:18:52] Speaker 01: Could the PTO rule itself unconstitutional? [00:18:56] Speaker 02: Well, Your Honor, again, I think something that the board does have authority to do is, or the director, which has been delegated to the board, is to determine whether to institute a covered business method review. [00:19:07] Speaker 02: And again, I don't want to, [00:19:10] Speaker 02: Sorry, one other point would be that, you know, in this court's decision in Ray DVC, this court held that a party had forfeited an appointments clause challenge to the administrative, I believe, the administrative patent judges. [00:19:24] Speaker 01: So in this case, has there been a waiver of the takings and due process arguments? [00:19:29] Speaker 02: Yes, Your Honor. [00:19:29] Speaker 02: We think that there has been a forfeiture of all of the constitutional arguments because trading technologies did not present them to the board. [00:19:36] Speaker 00: Counsel, I think you've well exceeded your time. [00:19:39] Speaker 00: If you have any further thoughts on this issue, I think you'll be back. [00:19:43] Speaker 02: Thank you. [00:19:44] Speaker 00: Mr. Gannon for Appellee Cross-Appellant. [00:19:49] Speaker 00: And you want to save some time for your reply, rebuttal on cross-appeal. [00:19:58] Speaker 00: So it's up to you. [00:19:59] Speaker 05: Thank you, Your Honor. [00:20:00] Speaker 05: Good morning. [00:20:00] Speaker 05: May it please the Court. [00:20:02] Speaker 05: I know there are a lot of issues here today, but I think we should start with the threshold question of jurisdiction. [00:20:07] Speaker 05: Because if there's no jurisdiction here, [00:20:09] Speaker 05: then none of the other issues need to even be reached today. [00:20:13] Speaker 05: Because 13 of TT's patents have been swept into the CBM proceedings, TT previously filed a writ of mandamus to this court asking it to correct this reoccurring jurisdictional error. [00:20:25] Speaker 05: And that motion was denied. [00:20:27] Speaker 05: But you said we could come back after the final written decision. [00:20:30] Speaker 05: Now is the time. [00:20:32] Speaker 05: Congress specifically carved out technological inventions from CBM review. [00:20:38] Speaker 05: And while this court has yet to find that a patent meets the technological exception, this is that case. [00:20:45] Speaker 05: The CBM issue is straightforward. [00:20:47] Speaker 05: First, the 304 claims recite an improved graphical user interface, or GUI. [00:20:54] Speaker 05: Improved GUIs improve computer functionality because graphical user interfaces are part of a computer. [00:21:00] Speaker 05: Claims that improve computer functionality are technological inventions. [00:21:05] Speaker 05: CQG case makes this simple. [00:21:08] Speaker 05: In the CQG case, this court looked at the 304 and 132 patent and made findings that the claims are technological. [00:21:14] Speaker 05: This court said that the claim subject matter is directed to a specific improvement to the way computers operate. [00:21:21] Speaker 05: The graphical user interface imparts a specific functionality to a trading system directed to a specific implementation of a solution to a problem in the software arts. [00:21:31] Speaker 05: The board ignored those findings. [00:21:34] Speaker 03: Well, the board doesn't have to follow those findings. [00:21:37] Speaker 03: They're not finding on the board. [00:21:39] Speaker 05: Correct. [00:21:39] Speaker 03: So I don't see how a GUI affects a computer function. [00:21:43] Speaker 03: I see how it impacts the user's engagement with the computer functions, but I don't see how it impacts computers functioning. [00:21:48] Speaker 05: It impacts the computer functioning, Your Honor, because in the prior art, there were problems with these graphical user interfaces, these screens. [00:21:56] Speaker 05: They had problems with speed, accuracy, and usability. [00:22:00] Speaker 05: The claims of these patents [00:22:02] Speaker 05: solve problems with those particular graphical user interfaces. [00:22:06] Speaker 05: It does affect how the trading interface operates. [00:22:10] Speaker 05: It's the front end of the trade. [00:22:11] Speaker 03: You're right. [00:22:12] Speaker 03: No, it affects how the user can input information about trades and ensures the accuracy when they do so. [00:22:20] Speaker 03: That's all about problems with user interfaces [00:22:25] Speaker 03: And the accuracy you're talking about is not within the computer. [00:22:29] Speaker 03: It's between the user and the computer. [00:22:31] Speaker 03: That doesn't improve computer functions. [00:22:32] Speaker 03: You know what it does? [00:22:33] Speaker 03: It improves users. [00:22:35] Speaker 05: That's actually inconsistent, Your Honor. [00:22:37] Speaker 05: I respectfully disagree. [00:22:38] Speaker 05: The specification is very clear. [00:22:40] Speaker 05: The problem isn't with the trader or how long it takes the trader to make an order. [00:22:44] Speaker 05: The problem is with, for example, the figure two style screen, the grid, the market grid, where prices are flipping in the grid. [00:22:52] Speaker 05: and the trader goes to make an order and the price flips out and the trader gets an unintended price because of that. [00:22:59] Speaker 03: Because they click on the wrong thing. [00:23:01] Speaker 03: They click on it after it changed. [00:23:03] Speaker 03: This is user error. [00:23:04] Speaker 03: It's the user clicking the button to activate or select at a time when what's being offered has changed. [00:23:11] Speaker 05: That's not the problem, Your Honor. [00:23:13] Speaker 05: The problem is at the time the user goes to click, because of the way the figure two style screen is constructed, [00:23:21] Speaker 05: Because the prices are flipping in the grid, as this court found in eSPEED as well, that causes the problem. [00:23:27] Speaker 05: Because when the trader wants to exit. [00:23:29] Speaker 03: It has nothing to do with the computer. [00:23:30] Speaker 03: It has to do with the user. [00:23:31] Speaker 03: This is just user error. [00:23:33] Speaker 03: You could spend your time however you want. [00:23:35] Speaker 03: But I don't really have a lot on this that I want to hear about. [00:23:40] Speaker 05: Your Honor, respectfully, in the eSPEED case, this court has already found that there were problems with the prior art screens, with prices flipping in the grid. [00:23:51] Speaker 05: And the problem with that screen, it created a problem with respect to the trader being able to get an unintended price. [00:24:00] Speaker 05: The patent, this patent. [00:24:01] Speaker 03: This is user reaction time. [00:24:03] Speaker 03: That's your problem. [00:24:04] Speaker 03: It has nothing to do with the computer. [00:24:06] Speaker 03: It's user reaction time. [00:24:07] Speaker 05: But Your Honor, with respect to figure two and the prior art, you can have the fastest reaction time in the world. [00:24:14] Speaker 05: The problem is when you go to put the cursor over that cell, the market can change, and you have no control over that. [00:24:21] Speaker 03: Yeah, then don't click the button. [00:24:22] Speaker 05: And when you go to click, you think you're getting a price, but because the market flipped out from underneath you, you got the wrong price. [00:24:30] Speaker 05: That's not a user problem. [00:24:31] Speaker 03: Yeah, it is because you can't get the wrong price if it hasn't flipped on the screen. [00:24:36] Speaker 03: It doesn't flip in ethos and you're viewing the right price on the screen and you click on the right price, but you get the wrong price. [00:24:41] Speaker 03: That's not the way it works. [00:24:43] Speaker 03: It flips on the screen and it's just you click the button [00:24:45] Speaker 03: Because you aren't able to stop yourself from clicking even though the number on the screen has changed and you're now clicking on something you don't want. [00:24:52] Speaker 03: It's your time. [00:24:55] Speaker 03: I'll stop arguing with you over it because it's not going to get you anywhere. [00:24:58] Speaker 01: So maybe your point is between the time that the finger touches the mouse to click and the click is actually initiated, that nanosecond or something, the screen can flip. [00:25:15] Speaker 05: That's right. [00:25:15] Speaker 03: You can have your cursor. [00:25:17] Speaker 03: You're suggesting to me that there is a delay. [00:25:19] Speaker 03: Is it in the mouse cord or is the delay in the RF frequency if you've got a Bluetooth mouse? [00:25:25] Speaker 03: Where is this delay built in between your clicking and the changing such that it's not user error? [00:25:31] Speaker 05: It's the problem with, you have to go back to the figure two style screens. [00:25:36] Speaker 05: The prices are in this grid and as the market changes, [00:25:40] Speaker 05: the prices change unpredictably. [00:25:42] Speaker 03: It's a really long mouse cord. [00:25:43] Speaker 03: That's what it is. [00:25:44] Speaker 03: Really long mouse cord and the signal just slowly creeps along that mouse cord. [00:25:49] Speaker 05: No, it's not that, Your Honor. [00:25:51] Speaker 05: The trader doesn't have control of what's going on in the market. [00:25:55] Speaker 05: When the inside market changes, when the price changes, these prices in the grid are constantly changing. [00:26:01] Speaker 05: The user has no control over that. [00:26:03] Speaker 05: And to answer your question, Judge Rainier, what happens is [00:26:07] Speaker 05: when you put your cursor over a particular cell and you go to get that price, that price, not because of the trader, but because of what's going on in the market, that price will flip right before you're able to click and you get the unintended price. [00:26:25] Speaker 05: You thought you were getting 15 and you ended up getting 20. [00:26:28] Speaker 05: That's been found by this court on two different occasions, once in the eSpeed case and in the CQG case. [00:26:34] Speaker 05: That was the problem. [00:26:35] Speaker 05: a problem this invention was trying to solve. [00:26:39] Speaker 05: Problems with accuracy, problems with speed, and usability. [00:26:43] Speaker 05: In the prior art, there was no visualization of the market. [00:26:47] Speaker 05: The invention provided that improvement. [00:26:49] Speaker 05: That was also found in the eSpeed case and in the CQG case. [00:26:52] Speaker 01: OK, I have a different question here. [00:26:55] Speaker 01: That's that the regulation 42.301b, which is defining technological inventions, [00:27:05] Speaker 01: says at the end that the subject matter as a whole recites a technological feature that is novel and unobvious over the prior art. [00:27:15] Speaker 01: Is it your position that if we undertake an inquiry, whether we're facing a technological invention in this instance, that we also have to include in that an inquiry as to whether we have something that's novel and unobvious over the prior art? [00:27:35] Speaker 05: Your honor, Versada answered this question. [00:27:37] Speaker 05: Versada made perfectly clear that the test you're referring to, whether there's a technological feature that solves a technical problem, a technical solution, does not look at the merits of obviousness, which makes perfect sense because we're at the jurisdictional phase. [00:27:52] Speaker 05: You don't look to see whether the invention's obvious. [00:27:55] Speaker 05: You look to see whether the purported feature solves [00:27:59] Speaker 05: technical problem with a technical solution. [00:28:02] Speaker 05: So that is our position. [00:28:03] Speaker 01: That under Versado, we can just ignore that particular part of the regulation? [00:28:09] Speaker 05: Yes, the underlying question of whether the invention is obvious is not part of the jurisdictional test, whether an invention is a technological invention. [00:28:18] Speaker 05: And Judge Moore, other cases from this court have established that problems with user interfaces and their solutions are technological in nature. [00:28:25] Speaker 05: The data engine case, the recent data engine case that we cited in R-28J, perfect example. [00:28:31] Speaker 05: This court found there were problems with the graphical user interface. [00:28:34] Speaker 05: There were problems with these spreadsheets. [00:28:37] Speaker 05: And the invention in that case solved problems with that interface. [00:28:42] Speaker 05: And this court said that the problem with those spreadsheets were a technological problem in computers and that the claim solution was a specific technological solution. [00:28:53] Speaker 05: That's data engine. [00:28:54] Speaker 05: Core wireless, another recent case that he cited, said the exact same thing. [00:28:58] Speaker 05: Claims directed to a specific improvement to a GUI was an improvement in the functioning of the computer. [00:29:04] Speaker 05: These are GUI cases. [00:29:05] Speaker 05: These are cases in which the graphical user interface is improving over prior ART interfaces. [00:29:13] Speaker 05: And this court has found that's improving the functioning of the computer. [00:29:16] Speaker 03: Those are questions of fact in specific cases, correct? [00:29:19] Speaker 05: They are questions of fact. [00:29:21] Speaker 05: Your Honor, I do agree with that. [00:29:23] Speaker 05: In IB, recently, in the chart trading case, IB, just two months ago, described the 304 patent as, and I'm quoting now, quote, a very specific problem if the 304 patent was addressing with a technical solution to that problem. [00:29:41] Speaker 05: This isn't just some lawyer. [00:29:42] Speaker 05: This is IB. [00:29:43] Speaker 05: The party's here today. [00:29:45] Speaker 05: IB said this about TT's claims, the 304 claims, quote, [00:29:50] Speaker 05: implementing a technological improvement versus saying what the end result should be. [00:29:56] Speaker 05: IB acknowledges this is a technological improvement. [00:29:59] Speaker 05: They acknowledge it's a technological problem and a technological solution to that problem. [00:30:05] Speaker 05: And I have the site that's the chart rating versus IB case that was argued just a few months ago before this court. [00:30:13] Speaker 05: Those admissions should end the jurisdictional question in TT's favor. [00:30:18] Speaker 05: How did the board err here? [00:30:20] Speaker 05: The board erred because it missed the problem in the prior art. [00:30:25] Speaker 05: The problems with how the prior art software was structured and functioned, there were problems with speed, accuracy, and usability with these prior art screens. [00:30:37] Speaker 05: And the board just missed it. [00:30:39] Speaker 05: The board missed it. [00:30:40] Speaker 05: The board said, oh, it's a business problem. [00:30:42] Speaker 05: And that was wrong. [00:30:43] Speaker 05: That was the root of the error with why the board found there wasn't a technological invention. [00:30:50] Speaker 05: The fact that the claims have some downstream benefit, of course, all inventions do. [00:30:55] Speaker 05: And I think DDR is instructive on that point. [00:30:58] Speaker 05: That was a technological problem and solution, retaining people on the website. [00:31:04] Speaker 05: And it was a particular challenge to the internet. [00:31:06] Speaker 05: It addressed a business problem, but it was nonetheless a technological problem. [00:31:11] Speaker 05: The board also erred by missing the technical solution altogether. [00:31:16] Speaker 05: It ignored that TT created a new improved [00:31:19] Speaker 05: graphical user interface altogether, a new computer component. [00:31:23] Speaker 05: Instead of looking at the improved graphical user interface, the board said, well, there's no technical solution because you can use this interface on any off-the-shelf computer. [00:31:34] Speaker 05: But that's wrong. [00:31:36] Speaker 05: That's the root of the error. [00:31:37] Speaker 05: Again, go back to core wireless. [00:31:39] Speaker 05: Go back to a data engine. [00:31:41] Speaker 05: Those inventions also could be used on different types of computers. [00:31:44] Speaker 05: But that doesn't mean that they're not technological inventions, technological [00:31:49] Speaker 05: improvements. [00:31:51] Speaker 05: Although the board didn't address the technological feature prong in its opinion, the technological feature in this case is the solution. [00:31:58] Speaker 05: The technological feature is the combination of elements of this claim, the specific combination that solves problems with speed, accuracy, and usability in the prior art screens. [00:32:11] Speaker 05: In sum, on the jurisdictional issue, the 304 claims recite [00:32:16] Speaker 05: technological invention that are excluded from CBM review, because the board never had jurisdiction in the first place, the board's opinion should be vacated. [00:32:26] Speaker 05: If there are no other questions on the jurisdictional question, I'll reserve for rebuttal. [00:32:30] Speaker 00: We will save it for you, Mr. Cannon. [00:32:33] Speaker 00: Mr. Pickard has three minutes for rebuttal. [00:32:43] Speaker 04: Thank you. [00:32:43] Speaker 04: I want to return to [00:32:45] Speaker 04: our earlier exchange, Judge Moore. [00:32:46] Speaker 04: So if you look at page 25 of the blue brief, we point out the two points I raised about the Supreme Court and Alice and Vilsky looking beyond the patent to extrinsic evidence, if you will, to decide that those claims were directed to a fundamental economic practice. [00:33:03] Speaker 04: Of course, the board in this case stopped at its analysis at step one. [00:33:09] Speaker 04: And if we look then at the CQG decision, when the court here [00:33:15] Speaker 04: affirmed, it said that it did so, said we agree with this conclusion of the district court, that is, for all the reasons articulated by the district court, including that the graphical user interface of these two patents is not an idea that has long existed. [00:33:29] Speaker 04: And so we addressed that following CQG to show that the idea was not just a fundamental economic practice, but was also one that had long existed. [00:33:39] Speaker 03: We've been clear in multiple opinions, including my Berkheimer opinion, that [00:33:45] Speaker 03: the newness of the abstract idea cannot be a basis for surviving an eligibility challenge. [00:33:51] Speaker 03: So I'm not sure. [00:33:54] Speaker 03: Maybe you think the law is in a state of conflict over that principle? [00:33:58] Speaker 04: I agree that the fact that an idea is new does not transform it from an abstract idea into a non-abstract or statutorily eligible idea. [00:34:09] Speaker 04: But the fact that something is a fundamental economic practice may be reflected in part by [00:34:14] Speaker 04: the fact that it has been part of economic activity for a long time, such as double-ledger accounting or intermediate settlement. [00:34:28] Speaker 04: I would like to turn briefly to the CBM jurisdictional issue. [00:34:32] Speaker 04: So there's no challenge here to the board's rulemaking or that the board didn't look to the correct rule when it made the decision. [00:34:40] Speaker 04: The board in the 304 case decided that the [00:34:44] Speaker 04: problem addressed by the 304 patent as well as its solution was not technological. [00:34:51] Speaker 04: On the second point, the board citing the patent itself made a number of findings that the inventions here do not have a technological solution. [00:34:59] Speaker 04: They use conventional hardware and software. [00:35:02] Speaker 04: They have simple algorithms. [00:35:04] Speaker 04: And there is no reason to set that aside. [00:35:07] Speaker 04: The appellees here have not really contended with the standard of review, which is arbitrary capriciousness. [00:35:14] Speaker 04: There's no clear error in the board's findings on those issues. [00:35:20] Speaker 00: Thank you. [00:35:20] Speaker 00: Mr. Picard, Mr. Gannon has a couple of minutes on this cross-appealed issue if he needs it. [00:35:34] Speaker 05: With respect to the 101 issue, it's a question of law. [00:35:39] Speaker 05: The CQG case made it clear. [00:35:41] Speaker 03: Respectfully, is this part of your cross-appeal? [00:35:44] Speaker 03: Because your rebuttal has to be limited to your cross-appeal. [00:35:46] Speaker 05: OK. [00:35:47] Speaker 05: Thank you, Your Honor. [00:35:47] Speaker 05: I will address the 101 then in a different case. [00:35:51] Speaker 05: With respect to the CBM issue, counsel made reference to the standard of review. [00:36:01] Speaker 05: Under the standard of review, under any standard of review, this ruling can't stand. [00:36:07] Speaker 05: And the reason why is because the board missed the problem [00:36:12] Speaker 05: in the prior art, it missed the problem that there was a problem with the technology. [00:36:17] Speaker 05: There was a problem with these prior art screens, as found in eSpeed and in CQG by this court, problems with speed, accuracy, and usability. [00:36:28] Speaker 05: And the board just ignored those findings, just like they did on other issues with respect to this court, and said, nope, it's just a financial problem. [00:36:39] Speaker 05: And that is wrong under [00:36:41] Speaker 05: any standard of review with respect to the technological solution. [00:36:46] Speaker 05: The board said, well, I don't see any solution here because I see your patent talks about using mice. [00:36:53] Speaker 05: I see your patent talks about taking a computer using conventional computers. [00:36:58] Speaker 05: That missed the boat. [00:36:59] Speaker 05: That completely missed the boat. [00:37:01] Speaker 05: Why? [00:37:02] Speaker 05: Because the technological solution is the improved graphical user interface, which this board refused to acknowledge. [00:37:11] Speaker 05: and they pointed to other things in the spec that are irrelevant. [00:37:15] Speaker 05: The fact that you can use a GUI on a conventional computer, the fact that you can use mice, the fact that, you know, software can be used, the same thing can be said in data engine and core wireless when this court found those were specific improvements to graphical user interfaces and specific improvements to computer functioning. [00:37:36] Speaker 05: If that's not a technological invention, I don't know what is. [00:37:40] Speaker 01: If I was to look for the central figure that's a technological invention in the patent, would I look towards the static price index? [00:37:53] Speaker 05: So under the test, you look at the claim as a whole. [00:37:58] Speaker 05: That's clear from Versata. [00:38:00] Speaker 05: You look at the claim as a whole to see whether there's a technological feature that solves a technological problem. [00:38:07] Speaker 05: So you would look then to the spec to see what the spec. [00:38:10] Speaker 01: That's what I mean. [00:38:11] Speaker 01: So you said technological feature. [00:38:13] Speaker 01: That's what I said, too. [00:38:14] Speaker 01: Is the technological feature here the static price index? [00:38:18] Speaker 05: It's the combination of static plus single action plus relative movement of the indicators. [00:38:25] Speaker 05: It's the combination of elements that provide the solution. [00:38:28] Speaker 05: It's the combination of elements that provide improved accuracy, visualization, which this court found in eSpeed and in CQG, [00:38:37] Speaker 05: and improvements in speed. [00:38:39] Speaker 00: It's the combination.