PTAB Invalidates Three Options Trading Patents Under Alice

Mar 5, 2015

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The PTAB issued three separate decisions under the America Invents Act covered business method review finding that the patents were all invalid under the test for subject matter eligibility set out in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S.Ct. 2347 (2014). The panel agreed with petitioner ISE concluding that the challenged claims are patent ineligible because the claims “do nothing more than automate an abstract and mental risk management technique used by market makers in open outcry exchanges for decades.” In finding that the abstract idea of risk management is claimed, the panel further noted that “the abstract idea of the challenged claims is not only risk management in general, but also the specific type of risk management, but also the specific type of risk management claimed in each claim. Furthermore, limiting an abstract idea to a specific field of use or adding token post­solution activity does not make an abstract idea patentable.”

As a contingency, CBOE also requested to amend the independent claim, which the PTAB rejected because the “proposed amendments are not specific and do not tie the claim to a concrete apparatus or method; rather, the added limitations are generic and insufficient to confer patent eligibility, similar to the claims at issue in Alice.”

International Securities Exchange LLC v. Chicago Board Options Exchange Inc., Nos. CBM2013­00049, CBM2013­00050, and CBM2013­00051 (PTAB Mar. 2, 2015).

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