The US Court of Appeals for the Federal Circuit affirmed a district court’s holding that claims directed to electronic trading are patent eligible. Trading Tech. Int’l, Inc. v. CQG, Inc., Case No. 16-1616 (Fed. Cir., Jan. 18, 2017) (Newman, J.) (non-precedential).
Trading Technologies charged CQG with infringement of patents directed to the electronic trading of stocks, bonds, futures, options and similar products. The patents describe a trading system in which a graphical user interface displays the market depth of a traded commodity. CQG moved for judgment as a matter of law, asserting that the claims of the patents were directed to patent-ineligible subject matter under 35 USC § 101. The district court denied CQG’s motion after finding that the claims were not directed to an abstract idea and that they recited an inventive concept. CQG appealed.
On appeal, the Federal Circuit affirmed the district court’s patent-eligibility holding. Judge Newman, writing for the panel, evaluated the district court’s application of the two-step Alice framework. First, the Court affirmed the district court’s analysis and conclusion under Alice step 1. With respect to step 1, the district court found the patent claims to be directed to improvements in existing graphical user interface devices, rather than being directed more generally to a mathematical algorithm or a business practice. The Court agreed and emphasized that the graphical user interface system of these patents is not an idea that has long existed, calling that “the threshold criterion of an abstract idea and ineligible concept.”
The Court also affirmed the district court’s analysis and conclusion under Alice step 2. According to the district court, the challenged claims recite an inventive concept that allows traders to more efficiently and accurately place trades using the claimed electronic trading system. The Court found the district court’s analysis to be in accord with precedent, including the Federal Circuit’s decisions in DDR Holdings, McRO and Enfish.