NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
IBG LLC, INTERACTIVE BROKERS, LLC,
Appellants
v.
TRADING TECHNOLOGIES INTERNATIONAL,
INC.,
Cross-Appellant
UNITED STATES,
Intervenor
______________________
2017-1732, 2017-1766, 2017-1769
______________________
Appeals from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in Nos. CBM2015-
00161, CBM2016-00035.
--------------------------------------------------
IBG LLC, INTERACTIVE BROKERS LLC,
Appellants
v.
TRADING TECHNOLOGIES INTERNATIONAL,
INC.,
Cross-Appellant
IBG LLC v. TRADING TECHNOLOGIES INT'L
2
UNITED STATES,
Intervenor
______________________
2017-2052, 2017-2053
______________________
Appeals from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. CBM2015-
00182.
--------------------------------------------------
TRADING TECHNOLOGIES INTERNATIONAL,
INC.,
Appellant
v.
IBG LLC, INTERACTIVE BROKERS LLC,
Appellees
UNITED STATES,
Intervenor
______________________
2017-2054
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. CBM2015-
00181.
--------------------------------------------------
TRADING TECHNOLOGIES INTERNATIONAL,
INC.,
IBG LLC v. TRADING TECHNOLOGIES INT'L 3
Appellant
v.
IBG LLC, INTERACTIVE BROKERS LLC,
Appellees
UNITED STATES,
Intervenor
______________________
2017-2565
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. CBM2016-
00031.
______________________
Decided: February 13, 2019
______________________
BYRON LEROY PICKARD, Sterne Kessler Goldstein &
Fox, PLLC, Washington, DC, argued for appellants in
2017-1732, 2017-2052 and for appellees in 2017-2054,
2017-2565. Also represented by RICHARD M. BEMBEN,
ROBERT EVAN SOKOHL, JON WRIGHT; MICHAEL T. ROSATO,
Wilson, Sonsini, Goodrich & Rosati, PC, Seattle, WA.
MICHAEL DAVID GANNON, Baker & Hostetler LLP, Chi-
cago, IL, argued for cross-appellant in 2017-1732, 2017-
2052 and appellant in 2017-2054, 2017-2565. Also repre-
sented by LEIF R. SIGMOND, JR., JENNIFER KURCZ; ALAINA
J. LAKAWICZ, Philadelphia, PA; COLE BRADLEY RICHTER,
McDonnell, Boehnen, Hulbert & Berghoff, LLP, Chicago,
IL; STEVEN BORSAND, JAY QUENTIN KNOBLOCH, Trading
Technologies International, Inc., Chicago, IL.
IBG LLC v. TRADING TECHNOLOGIES INT'L
4
KATHERINE TWOMEY ALLEN, Appellate Staff, Civil Divi-
sion, United States Department of Justice, Washington,
DC, argued for intervenor. Also represented by MARK R.
FREEMAN, SCOTT R. MCINTOSH, JOSEPH H. HUNT; THOMAS
W. KRAUSE, JOSEPH MATAL, FARHEENA YASMEEN RASHEED,
Office of the Solicitor, United States Patent and Trade-
mark Office, Alexandria, VA.
______________________
Before LOURIE, MOORE, and REYNA, Circuit Judges.
PER CURIAM.
Trading Technologies International, Inc., (“TT”) is the
owner of U.S. Patent Nos. 6,766,304, 6,772,132, 7,676,411,
and 7,813,996. All four patents share a specification and
describe a graphical user interface (“GUI”) for a trading
system that “display[s] the market depth of a commodity
traded in a market, including a dynamic display for a plu-
rality of bids and for a plurality of asks in the market for
the commodity and a static display of prices corresponding
to the plurality of bids and asks.” ’132 patent at 3:11–16. 1
IBG LLC and Interactive Brokers LLC (collectively, “Peti-
tioners”) petitioned for covered business method (“CBM”)
review of each patent. 2
The Board instituted CBM review of each patent and
issued separate final written decisions. In the proceedings
involving the ’304 and ’132 patents, the Board upheld the
patent eligibility of the claims based on our reasoning in
Trading Technologies International, Inc. v. CQG, Inc., 675
1 Because all four patents share a specification, we
cite only to the ’132 patent throughout.
2 CBM2015-00161 involved the ’304 patent;
CBM2015-00182 involved the ’132 patent; CBM2015-
00181 involved the ’411 patent; and CBM2016-00031 in-
volved the ’996 patent.
IBG LLC v. TRADING TECHNOLOGIES INT'L 5
F. App’x 1001 (Fed. Cir. 2017). In the proceedings involv-
ing the ’411 and ’996 patents, the Board held that the
claims were ineligible. In the proceedings involving the
’132 and ’411 patents, the Board also held that all claims
except claims 29, 39, and 49 of the ’132 patent would have
been obvious.
TT appeals, among other issues, the Board’s determi-
nations regarding whether the patents are directed to a
technological invention. Petitioners appeal the Board’s de-
terminations that the claims of the ’304 and ’132 patents
are patent eligible and that claims 29, 39, and 49 of the ’132
patent would not have been obvious. We have jurisdiction
under 28 U.S.C. § 1295(a)(4)(A). We vacate the decision of
the Board in each case because the patents at issue are for
technological inventions and thus were not properly sub-
ject to CBM review.
DISCUSSION
The proceedings on appeal stem from the Transitional
Program for Covered Business Method Patents (“CBM re-
view”), which expires next year. Leahy-Smith Am. Invents
Act, Pub. L. 112-29, § 18(a) (“AIA”). Pursuant to the stat-
ute, the Board may only institute CBM review for a patent
that is a CBM patent. Id. § 18(a)(1)(E). A CBM patent is
“a patent that claims a method or corresponding apparatus
for performing data processing or other operations used in
the practice, administration, or management of a financial
product or service, except that the term does not include pa-
tents for technological inventions.” Id. § 18(d)(1) (emphasis
added). Neither party disputes here that the patents at
issue meet the first part of the test. The only issue is
whether the patents are for technological inventions. Pur-
suant to its authority under § 18(d)(2), the Patent and
Trademark Office (“PTO”) promulgated 37 C.F.R.
§ 42.301(b), which requires the Board to consider the fol-
lowing on a case-by-case basis in determining whether a
IBG LLC v. TRADING TECHNOLOGIES INT'L
6
patent is for a technological invention: “whether the
claimed subject matter as a whole recites a technological
feature that is novel and unobvious over the prior art” and
whether it “solves a technical problem using a technical so-
lution.” We review the Board’s reasoning “under the arbi-
trary and capricious standard and its factual
determinations under the substantial evidence standard.”
SightSound Techs., LLC v. Apple Inc., 809 F.3d 1307, 1315
(Fed. Cir. 2015).
We previously upheld the eligibility under § 101 of the
’132 and ’304 patents in CQG. 675 F. App’x at 1006. In the
CBM review proceedings with regard to those patents, the
Board adopted as persuasive that reasoning and conclu-
sion. The discussion of those patents in the context of eli-
gibility is instructive to the technological invention
question. In CQG, the district court held that the claims
were not directed to an abstract idea, stating:
the claims are directed to solving a problem that
existed with prior art GUIs, namely, that the best
bid and best ask prices would change based on up-
dates received from the market. There was a risk
with the prior art GUIs that a trader would miss
her intended price as a result of prices changing
from under her pointer at the time she clicked on
the price cell on the GUI. The patents-in-suit pro-
vide a system and method whereby traders may
place orders at a particular, identified price level,
not necessarily the highest bid or the lowest ask
price because the invention keeps the prices static
in position, and allows the quantities at each price
to change.
Trading Techs. Int’l, Inc. v. CQG, 2015 WL 774655, at *4
(N.D. Ill. 2015). The district court determined that “[t]his
issue did not arise in the open outcry systems, i.e. the pre-
electronic trading analog of the ’304 and ’132 patents’
IBG LLC v. TRADING TECHNOLOGIES INT'L 7
claims.” Id. We agreed “for all of the reasons articulated
by the district court.” CQG, 675 F. App’x at 1004. We con-
cluded that “the claimed subject matter is directed to a spe-
cific improvement to the way computers operate, for the
claimed [GUI] method imparts a specific functionality to a
trading system directed to a specific implementation of a
solution to a problem in the software arts.” Id. at 1006 (in-
ternal citations and quotation marks omitted).
This characterization is consistent with the description
of the invention in the specification. The specification
states that markets with a high volume of trading result in
“rapid changes in the price and quantity fields within the
market grid” on a trading screen, which can cause a trader
to miss his intended price. ’132 patent at 2:51–60. The
technical problem with prior GUIs in which the inside mar-
ket remains stationary, like the one in Figure 2 of the ’132
patent, is most clearly laid out in U.S. Patent App. Ser. No.
09/589,751, which is incorporated by reference in the ’132
patent and issued as U.S. Patent No. 6,938,011:
[A] trader might intend to click on a particular
price but, between the time he decides to do so and
the time he actually clicks (which may be only hun-
dredths of a second), the price may change. He may
not be able to stop the downward motion of his fin-
ger and the order would be sent to market at an
incorrect or undesired price.
’011 patent at 9:35–41. The claimed invention in the pa-
tents at issue solves this problem “by displaying market
depth on a vertical or horizontal plane, which fluctuates
logically up or down, left or right across the plane as the
market fluctuates.” ’132 patent at 6:65–7:2.
In the CBM proceedings involving the ’132 and ’304 pa-
tents, the Board agreed with CQG and found the claims of
both patents eligible. At the same time, the Board held
that the patents are not for technological inventions. If
IBG LLC v. TRADING TECHNOLOGIES INT'L
8
“the claimed subject matter is directed to a specific im-
provement to the way computers operate,” as we held in
CQG, 675 F. App’x at 1006, the patents are also for a “tech-
nological invention” under any reasonable meaning of that
term. We conclude that the Board’s reasoning with regard
to the ’132 and ’304 patents is internally inconsistent and
therefore arbitrary and capricious. And because we see no
meaningful difference between the claimed subject matter
of the ’132 and ’304 patents and that of the ’411 and ’996
patents for the purposes of the technological invention
question, the same conclusion applies in those cases as
well.
CONCLUSION
Based on our decision in CQG and the Board’s adoption
thereof, the Board’s reasoning in determining that the ’132,
’304, ’411, and ’996 patents are eligible for CBM review was
arbitrary and capricious. We hold that these patents are
“for technological inventions” under AIA, § 18(d)(1) and are
therefore not subject to CBM review. Because the Board
may only institute CBM review for CBM patents, we va-
cate.
VACATED
COSTS
No costs.