Written by Robert J. Hilton, Ph.D. and Bryan McWhorter

The Federal Circuit recently found claims to a specialized graphical user interface (GUI) for trading financial securities eligible in Trading Technologies Int’l v. CQG, No. 2016-2016 (Fed. Cir. Jan. 18, 2017). The Federal Circuit’s opinion shows that claims directed toward a software GUI can be patent-eligible subject matter if the invention improves the speed and accuracy with which a user can perform a task—even if that task is part of a business process.

Trading Technologies International, Inc. (TTI) provides online platforms for electronic trading of financial securities, such as stocks and bonds. TTI is the assignee of the two patents at issue in the decision, U.S. Patent No. 6,772,132 (the ’132 patent) and U.S. Patent No. 6,766,304 (the ’304 patent), both entitled “Click Based Trading with Intuitive Grid Display of Market Depth.” These patents describe and claim methods and systems for the electronic trading of stocks, bonds, futures, options, and similar products. In particular, the asserted claims are directed to a GUI that displays a constantly changing list of bid and ask displays for securities, which prevents orders being placed on the basis of an incorrect price.1 Figure 4 from the ’132 patent is duplicated below, illustrating an exemplary GUI.

In 2005, TTI sued CQG, Inc. (which provides electronic financial trading software and platforms) and other affiliated parties for infringement of the ’132 and ’304 patents in the United States District Court for the Northern District of Illinois. CQC, Inc. responded with an allegation that the claims were invalid as directed to the unpatentable “abstract idea” of “placing an order for a commodity on an electronic exchange, based on observed market information, as well as updating the market information.” The District Court disagreed, holding that the asserted claims were not directed to an abstract idea, but were patent eligible because they “solve problems of prior graphical user interface devices (GUIs), in the context of computerized trading, related to speed, accuracy and usability.” Trading Techs. Int’l, Inc., v. CQG, Inc., No. 05-cv-4811, 2015 WL 774655 (N.D. Ill. Feb. 24, 2015). CQG appealed the decision.

On appeal, the Federal Circuit agreed with the district court, finding that the asserted claims were directed to “a specific improvement in the way computers operate,” and as such were not directed to an abstract idea. Fed. Cir. Opinion at 9. In reaching this conclusion, the Federal Circuit noted that “[i]t is not disputed that the TTI System improves the accuracy of trader transactions.” Id. In that regard, the court referenced the patent’s specification, which explained that prior systems allowed errors when a trader attempted to enter an order at a particular price, but missed the price because the market moved before the order was entered and executed. Id. at 3. The patent specifications further explained how the claimed GUI solved the problem, by providing a specific, dynamically updating list of bid and ask prices. Id. The Federal Circuit explained that: “abstraction is avoided or overcome when a proposed new application or computer-implemented function is not simply the generalized use of a computer as a tool to conduct a known or obvious process, but instead is an improvement to the capability of the system as a whole.” Id. at 8. The court determined that the asserted claims did not simply recite an improvement in the accuracy of securities trading. Rather, they provided a specific way of achieving that result, by providing a GUI that displayed a dynamically updating bid/ask list. The Federal Circuit concluded that “the claimed subject matter is ‘directed to a specific improvement to the way computers operate’ for the claimed graphical user interface 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 9 (quoting BASCOM Global Internet Services v. AT&T Mobility LLC, 827 f. 3d 1341 (Fed. Cir. 2016). Thus, the claims were patent-eligible under § 101.

This appears to be the first Federal Circuit decision under the Alice/Mayo framework to determine that claims directed toward GUI are directed toward patent eligible subject matter. The decision is significant as supporting arguments that claims directed primarily to software UI components can be patent eligible based on the speed and accuracy with which a user can perform a task or similar improvements. The Trading Technologies Int’l decision could be read as a significant extension to what constitutes “an improvement in computer-related technology,” and thus patent-eligible subject matter. Prior decisions have each involved a solution to what is at least arguably a “technical problem,” such as the difficulty of automating the creation of computer-animated characters in McRO, inefficient memory use in Enfish, or network-based content redirection in DDR. Here, the court looked past the fact that the problem to be solved was the inaccuracy of securities trading (a problem that might otherwise lead one to believe the claims fall squarely within the “fundamental economic practice” category of abstract ideas discussed in Alice). Instead, the court found the claims patent eligible, because they recited a specific technical solution to that problem, rooted in the specialized use of a computer display. Similar arguments would seemingly apply to applications for computerized improvements in electronic commerce, business methods, or any number of fields heavily scrutinized under Alice. This decision may provide yet another data point indicating that the pendulum is swinging back in terms of whether patents for software-based inventions can be patent-eligible under Section 101.

Footnote:

1 Claim 1 of the ’304 patent recites:

1. A method for displaying market information relating to and facilitating trading of a commodity being traded in an electronic exchange having an inside market with a highest bid price and a lowest ask price on a graphical user interface, the method comprising:

dynamically displaying a first indicator in one of a plurality of locations in a bid display region, each location in the bid display region corresponding to a price level along a common static price axis, the first indicator representing quantity associated with at least one order to buy the commodity at the highest bid price currently available in the market;

dynamically displaying a second indicator in one of a plurality of locations in an ask display region, each location in the ask display region corresponding to a price level along the common static price axis, the second indicator representing quantity associated with at least one order to sell the commodity at the lowest ask price currently available in the market;

displaying the bid and ask display regions in relation to fixed price levels positioned along the common static price axis such that when the inside market changes, the price levels along the common static price axis do not move and at least one of the first and second indicators moves in the bid or ask display regions relative to the common static price axis;

displaying an order entry region comprising a plurality of locations for receiving commands to send trade orders, each location corresponding to a price level along the common static price axis; and

in response to a selection of a particular location of the order entry region by a single action of a user input device, setting a plurality of parameters for a trade order relating to the commodity and sending the trade order to the electronic exchange.