Notice of Pre-AIA or AIA Status
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . This is a Non-Final Office Action in response to application 16/549,130 entitled "TOXICITY IN A TRADING NETWORK" amended on March 10, 2026, with claims 1-6, 9, 11-20 pending.
Status of Claims
Claims 1, 11, and 19 have been amended and are hereby entered.
Claims 7, 8, and 10 have been cancelled.
Claims 1-6 and 9-20 are pending and have been examined.
Information Disclosure Statement
The information disclosure statements (IDSs) submitted on April 22, 2022, December 9, 2024, and March 6, 2025, are in compliance with the provisions of 37 CFR 1.97. Accordingly, the information disclosure statements were considered by the examiner.
Response to Remarks
The Remarks filed March 10, 2026, have been entered. Claims 1-6, 9, 11-20 remain pending in the application. Applicant’s Remarks to the Specification, Drawings, and/or Claims have been noted in response to the Final Office Action mailed December 11, 2025.
Examiner’s Note
Intended use language is generally given limited patentable weight. See MPEP 2114(II) ("A claim containing a 'recitation with respect to the manner in which a claimed apparatus is intended to be employed does not differentiate the claimed apparatus from a prior art apparatus’ if the prior art apparatus teaches all the structural limitations of the claim. Ex parte Masham, 2 USPQ2d 1647 (Bd. Pat. App. & Inter. 1987).”); see also MPEP 2103(C). Examples of claim limitations that are often found to precede intended use include “adapted to,” “capable of,” “sufficient to,” “whereby,” and “for.” The following limitations are interpreted as intended use limitations:
The examiner would like to note that the claims are replete with intended use, however, to provide compact prosecution, the examiner has provided the mapping and rejections.
Claims 1 and 19: “so as to reduce computational resource usage”
The Specification reads, [0092] Reducing the amount of data needed to process trading strategies may improve the functionality of these machines and expand the impact of these finite computational resources. By selectively transmitting a trade order with toxicity augment only to approved target participants, the amount of data processed and transmitted to execute a trade may be reduced. This may reduce the processing time, storage needs, and other computational resources (e.g., power, bandwidth, etc.) used to process and implement trading strategies. Selective transmission of the trade order with a corresponding toxicity augment may create a more usable and efficiently operating market.
The Examiner determines the aforementioned intended use statements do not result in any structural nor manipulative difference between the claimed invention and the prior art. Therefore, the intended use statements are afforded limited patentable weight.
Claim Rejections - 35 USC § 101
35 U.S.C. 101 reads as follows:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
Claims 1-6, 9, 11-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to an abstract idea without significantly more.
Claims 1-6, 9, 11-20 are directed to a system, method, or product program, which are/is one of the statutory categories of invention. (Step 1: YES).
The claimed invention is directed to an abstract idea without significantly more.
Independent Claim 1 recites:
“A method of reducing data processing and transmission load for a distributed trading platform, comprising:
controlling, …market data …
monitoring, … trading activity information indicating …trading activities of respective second participants, in which the second participants are liquidity takers and in which the … market data includes the trading activity information;
determining …based on the … market data, respective toxicity ratings for each of the second participants, in which each of the toxicity ratings of a respective corresponding second participant indicates an impact of at least one trade of at least one given financial instrument with the respective corresponding second participant has on a market price for the at least one given financial instrument;
receiving, …from a first participant order management system of a liquidity provider, a first order, in which the first order is held hidden securely in the first participant order management system;
automatically in response to receiving the first order, prior to receiving a request to execute a trade fulfilling at least a part of the first order, and …;
determining toxicity augments for the first order from the toxicity ratings respectively of the second participants, in which each toxicity augment is an amount of a price change from a price of the first order and determined based on the toxicity rating of a respective corresponding second participant,
reducing a total quantity of data processed and …to execute trades for the first order, so as to reduce computational resource usage, by selecting a subset of the second participants based on the respective toxicity ratings falling below a predetermined toxicity threshold, and, and selectively …first order display information securely and simultaneously to second participant order management systems respectively of the selected subset of the second participants that is less than an entirety of the second participants, thereby excluding non-selected second participant from the selectively …
wherein reception of the first order display information causes simultaneous display on …of a display of each second participant order management system of the second participant order management systems of an indication of the price of the first order and, separate from the indication of the price of the first order, an indication of the amount of the price change as the toxicity augment corresponding respectively to the selected second participant,
automatically, continually and dynamically recalculating the toxicity augments based on continuously recalculated toxicity ratings, wherein the toxicity ratings are continuously recalculated in real time based on fluctuations in the … market data affecting the indicated impact on the market price to determine updated toxicity augments respectively for the second participants, for selected second participants, adjusting indications of the amount of price changes as the toxicity augments to updated amounts of price changes as updated toxicity augments respectively for the selected second participants,
automatically responsive to determining the updated toxicity augments, refreshing, …, …of the second participant order management systems to display, separately from the indication of the price of the first order, indications the updated toxicity augments in place of the toxicity augments previously displayed, respectively corresponding to the selected second participants, wherein the updated toxicity augments include the updated amounts of price changes;
causing, …display of respective shot clocks …of the second participant order management systems to indicate respective different countdowns of available time remaining for the selected second participants to react to the first order, and upon detecting that the available time has is expired, executing:
displaying …an indicator that the available time is expired, and replacing an existing indication operable to request execution of a trade with a new indication operable to request refresh of the first order, and upon detecting selection of the new indication, detecting if the first order remains available for trading, and responsive to detecting that the first order remains available, executing refresh of display data associated with the first order;
receiving, … from a given second participant system of the second participant order management systems, a contra order;
in response to receiving the contra order, … the contra order…to the first participant order management system;
receiving, … from the first participant order management system, an indication that a quantity of a financial instrument indicated in the first order is reserved; and
in response to receiving the indication that the quantity of the financial instrument is reserved, facilitating execution of an exchange that fulfills at least a part of each of the contra order and the first order.”
These limitations clearly relate to managing transactions/interactions between liquidity provider, liquidity taker, and/or broker/exchange. These limitations, under their broadest reasonable interpretation, cover performance of the limitation as certain methods of organizing human activity. For example, instructing to receiving market data or facilitating execution of an exchange …of the contra order recite a fundamental economic principles or practice and/or commercial or legal interactions. If a claim limitation, under its broadest reasonable interpretation, covers performance of the limitation as a fundamental economic, commercial, or financial action, principle, or practice then it falls within the “Certain Methods of Organizing Human Activity” grouping of abstract ideas. Accordingly, the claim recites an abstract idea. (Step 2A-Prong 1: YES. The claims recite an abstract idea).
This judicial exception is not integrated into a practical application. In particular, the claims recite the additional elements of:
[by at least one processor: receiving, over a communication network] [from a remote computing device][over a communication network] [over the communication network] [graphical user interface (GUI) of a display] [the GUIs] [a graphical user interface (GUI)] [over the communication network], [on the GUI of the displays] [on the GUI]:
merely applying computer processing, storage, display, and networking technology as tools to perform an abstract idea
[transmitting] [transmitted] [transmitting, over the communication network]:
insignificant extra-solution activity to the judicial exception of data gathering
[in real time] [real time]:
insignificant extra-solution activity
are recited at a high-level of generality (i.e., as a generic processor performing a generic computer function) such that it amounts no more than mere instructions to apply the exception using a generic computer components and/or electronic processes. The additional elements merely add instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea, see MPEP 2106.05(f). For example, the Specification reads, [0103] A processor may include one or more microprocessors, central processing units (CPUs), computing devices, …. or like devices or any combination thereof, regardless of the architecture. [0050] Data provider 117 may provide such information in any one or more of a variety of forms and means such as video, audio (e.g., radio broadcast), text (e.g., stock ticker-type information), or other data that may convey information. Accordingly, these additional elements, when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea and are at a high level of generality. For these reasons, there is no inventive concept. The claim is not patent eligible. Therefore, Claim 1 is directed to an abstract idea without a practical application. (Step 2A-Prong 2: NO. The additional claimed elements are not integrated into a practical application)
Mere instructions to apply an exception using a generic computer component cannot provide an inventive concept. The additional elements merely add instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea, see MPEP 2106.05(f). Accordingly, the additional elements, do not change the outcome of the analysis, when considered separately and as an ordered combination. The claim further defines the abstract idea and hence is abstract for the reasons presented above. The claim does not include any additional elements that integrate the abstract idea into a practical application or are sufficient to amount to significantly more than the judicial exception when considered both individually and as an ordered combination.
The “transmitting” and “real-time” steps that were considered extra-solution activity and determined to be well-understood, routine, conventional activity in the field, the background does not provide any indication that the network appliance is anything other than a generic, off-the-shelf computer component that is a well‐understood, routine, and conventional function when it is claimed in a merely generic manner (as it is here).
Transmitting is post solution activity under MPEP 2106.05, see cases OIP Techs., Inc., v. Amazon.com, Inc., 788 F.3d 1359, 1363, 115 USPQ2d 1090, 1093 (Fed. Cir. 2015) (sending messages over a network) and Ameranth, 842 F.3d at 1241-42, 120 USPQ2d at 1854-55.
Therefore, the claim is directed to an abstract idea. Thus, the claim is not patent eligible. (Step 2B: NO. The claim does not provide significantly more)
Dependent Claims recite additional elements.
This judicial exception is not integrated into a practical application. In particular, the recited additional elements of
Claim 2: (none found: does not include additional elements and merely narrows the abstract idea)
Claim 3: “look-up table”: merely applying database look-up table storage technology as a tool to perform an abstract idea
Claim 4: “communication network”: merely applying communication network technology as a tool to perform an abstract idea
Claim 5:
“communication network”: merely applying communication network technology as a tool to perform an abstract idea
“display information”: insignificant extra-solution activity to the judicial exception of displaying information
Claim 6:
“communication network”: merely applying communication network technology as a tool to perform an abstract idea
“display information”: insignificant extra-solution activity to the judicial exception of displaying information
Claim 9:
“communication network”: merely applying communication network technology as a tool to perform an abstract idea
“display information”: insignificant extra-solution activity to the judicial exception of displaying information
Claim 11:
“communication network”: merely applying communication network technology as a tool to perform an abstract idea
“processor”: merely applying CPU technology as a tool to perform an abstract idea
“display on the GUI”: insignificant extra-solution activity to the judicial exception of displaying information on a graphical user interface
“refresh”: insignificant extra-solution activity to the judicial exception of updating data
Claim 12:
“processor”: merely applying CPU technology as a tool to perform an abstract idea
“refresh”: insignificant extra-solution activity to the judicial exception of updating data
Claim 13:
“communication network”: merely applying communication network technology as a tool to perform an abstract idea
“processor”: merely applying CPU technology as a tool to perform an abstract idea
“graphical user interface”: insignificant extra-solution activity to the judicial exception of displaying information with a graphical user interface
Claim 14: “processor”: merely applying CPU technology as a tool to perform an abstract idea
Claim 15:
“communication network”: merely applying communication network technology as a tool to perform an abstract idea
“processor”: merely applying CPU technology as a tool to perform an abstract idea
“display information”: insignificant extra-solution activity to the judicial exception of displaying information
“button”: insignificant extra-solution activity to the judicial exception of providing a graphical user interface element
Claim 16:
“communication network”: merely applying communication network technology as a tool to perform an abstract idea
“processor”: merely applying CPU technology as a tool to perform an abstract idea
“database”: merely applying database storage technology as a tool to perform an abstract idea
Claim 17:
“communication network”: merely applying communication network technology as a tool to perform an abstract idea
“processor”: merely applying CPU technology as a tool to perform an abstract idea
“database”: merely applying database storage technology as a tool to perform an abstract idea
“decrypting”: merely applying encryption/decryption technology as a tool to perform an abstract idea
Claim 18: “display information”: insignificant extra-solution activity to the judicial exception of displaying information
are recited at a high-level of generality (i.e., as a generic processor performing a generic computer function) such that it amounts no more than mere instructions to apply the exception using a generic computer components and/or electronic processes. The additional elements merely add instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea, see MPEP 2106.05(f). For example, the Specification reads, [0103] A processor may include one or more microprocessors, central processing units (CPUs), computing devices, …. or like devices or any combination thereof, regardless of the architecture. [0050] Data provider 117 may provide such information in any one or more of a variety of forms and means such as video, audio (e.g., radio broadcast), text (e.g., stock ticker-type information), or other data that may convey information. Accordingly, these additional elements, when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea and are at a high level of generality. Therefore, these dependent claims are directed to an abstract idea without a practical application. (Step 2A-Prong 2: NO. The additional claimed elements are not integrated into a practical application)
The claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception because, when considered separately and as an ordered combination, they do not add significantly more (also known as an “inventive concept”) to the exception. As discussed above with respect to integration of the abstract idea into a practical application, the additional element of using a computer hardware amounts to no more than mere instructions to apply the exception using a generic computer component. Mere instructions to apply an exception using a generic computer component cannot provide an inventive concept. For example, the Specification reads, [00103] “A processor may include one or more microprocessors, central processing units (CPUs), computing devices, ….or like devices or any combination thereof, regardless of the architecture” [0050] Data provider 117 may provide such information in any one or more of a variety of forms and means such as video, audio (e.g., radio broadcast), text (e.g., stock ticker-type information), or other data that may convey information. Accordingly, these additional elements, do not change the outcome of the analysis, when considered separately and as an ordered combination. Thus, the dependent claims are not patent eligible. (Step 2B: NO. The claims do not provide significantly more)
Independent Claim 19 recites:
“A distributed trading system having reduced processing and transmission load, comprising:
a first participant order management system of a liquidity provider, in which the first participant order management system includes …. configured to control:
identifying a first order for distributed order matching entered at a trader interface of the first participant order management system, in which the first order is held hidden securely in the first participant order management system, and
…the first order to a central system of the distributed trading system; and
the central system comprising …configured to control:
receiving, …market data from a remote computing device;
monitoring, … trading activity information indicating real time trading activities of respective second participants, in which the second participants are liquidity takers and in which the …. market data includes the trading activity information;
determining …, based on the … market data, respective toxicity ratings for each of the second participants, in which each of the toxicity ratings of each respective corresponding second participant indicates an impact of at least one trade of at least one given financial instrument with the respective corresponding second participant has on a market price for the at least one given financial instrument;
receiving, …from the first participant order management system, the first order;
and automatically in response to receiving the first order, prior to receiving a request to execute a trade fulfilling at least a part of the first order …:
determining toxicity augments for the first order from the toxicity ratings respectively of the second participants, in which each toxicity augment is an amount of a price change from a price of the first order and determined based on the toxicity rating of a respective corresponding second participant, reducing a total quantity of data processed … to execute trades for the first order, so as to reduce computational resource usage, by selecting a subset of the second participants based on the respective toxicity ratings falling below a predetermined toxicity threshold, and selectively …, , first order display information securely and simultaneously to second participant order management systems respectively of the selected subset of the second participants that is less than an entirety of the second participants, thereby excluding non-selected second participant from the selectively transmitting, wherein reception of the first order display information causes simultaneous display on …of a display of each second participant order management system of the second participant order management systems of an indication of the price of the first order and, separate from the indication of the price of the first order, an indication of the amount of the price change as the toxicity augment corresponding respectively to the selected second participant, automatically, continually and dynamically recalculating the toxicity augments based on continuously recalculated toxicity ratings, wherein the toxicity ratings are continuously recalculated in real time based on fluctuations in the … market data affecting the indicated impact on the market price to determine updated toxicity augments respectively for the second participants, for selected second participants, adjusting indications of the amount of price changes as the toxicity augments to updated amounts of price changes as updated toxicity augments, respectively for the selected second participants, automatically responsive to determining the updated toxicity augments, refreshing, …of the second participant order management systems to display, separately from the indication of the price of the first order, the updated toxicity augments in place of the toxicity augments previously displayed, respectively corresponding to the selected second participants, wherein the updated toxicity augments include the updated amounts of price changes;
causing, over the communication network, display of respective shot clocks …of the second participant order management systems to indicate respective different countdowns of available time remaining for the selected second participants to react to the first order, and upon detecting that the available time has is expired, executing:
displaying …an indicator that the available time is expired, and replacing an existing indication operable to request execution of a trade with a new indication operable to request refresh of the first order, and upon detecting selection of the new indication, detecting if the first order remains available for trading, and responsive to detecting that the first order remains available, executing refresh of display data associated with the first order;
receiving, …from a given second participant system of the second participant order management systems, a contra order;
in response to receiving the contra order, … the contra order, …, to the first participant order management system;
receiving, … from the first participant order management system, an indication that a quantity of a financial instrument indicated in the first order is reserved;
and in response to receiving the indication that the quantity of the financial instrument is reserved, facilitating execution of an exchange that fulfills at least a part of each of the contra order and the first order, in which the first …is configured to control:
receiving, …, the contra order;
and …, …, the indication that the quantity of the financial instrument indicated in the first order is reserved.”
These limitations clearly relate to managing transactions/interactions between liquidity provider, liquidity taker, and/or broker/exchange. These limitations, under their broadest reasonable interpretation, cover performance of the limitation as certain methods of organizing human activity. For example, instructing to receiving… a contra order or facilitating execution of an exchange …of the contra order recite a fundamental economic principles or practice and/or commercial or legal interactions. If a claim limitation, under its broadest reasonable interpretation, covers performance of the limitation as a fundamental economic, commercial, or financial action, principle, or practice then it falls within the “Certain Methods of Organizing Human Activity” grouping of abstract ideas. Accordingly, the claim recites an abstract idea. (Step 2A-Prong 1: YES. The claims recite an abstract idea).
This judicial exception is not integrated into a practical application. In particular, the claims recite the additional elements of:
[a first computing device] [over a communication network][first computing device] [a second computing device] [over the communication network] [a graphical user interface (GUI) of a display] [the GUIs] [a graphical user interface (GUI) of a display] [over the communication network][on the GUI of the displays] [on the GUI] [computing device ]:
merely applying computer processing, storage, display, and networking technology as tools to perform an abstract idea
[transmitting][transmitting] [and transmitted] [transmitting, over the communication network][transmitting]:
insignificant extra-solution activity to the judicial exception of data gathering
[in real time] [real time]:
insignificant extra-solution activity
are recited at a high-level of generality (i.e., as a generic processor performing a generic computer function) such that it amounts no more than mere instructions to apply the exception using a generic computer components and/or electronic processes. The additional elements merely add instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea, see MPEP 2106.05(f). For example, the Specification reads, [0103] A processor may include one or more microprocessors, central processing units (CPUs), computing devices, …. or like devices or any combination thereof, regardless of the architecture. [0050] Data provider 117 may provide such information in any one or more of a variety of forms and means such as video, audio (e.g., radio broadcast), text (e.g., stock ticker-type information), or other data that may convey information. Accordingly, these additional elements, when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea and are at a high level of generality. For these reasons, there is no inventive concept. The claim is not patent eligible. Therefore, Claim 19 is directed to an abstract idea without a practical application. (Step 2A-Prong 2: NO. The additional claimed elements are not integrated into a practical application)
Mere instructions to apply an exception using a generic computer component cannot provide an inventive concept. The additional elements merely add instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea, see MPEP 2106.05(f). Accordingly, the additional elements, do not change the outcome of the analysis, when considered separately and as an ordered combination. The claim further defines the abstract idea and hence is abstract for the reasons presented above. The claim does not include any additional elements that integrate the abstract idea into a practical application or are sufficient to amount to significantly more than the judicial exception when considered both individually and as an ordered combination.
The “transmitting” and “real-time” steps that were considered extra-solution activity and determined to be well-understood, routine, conventional activity in the field, the background does not provide any indication that the network appliance is anything other than a generic, off-the-shelf computer component that is a well‐understood, routine, and conventional function when it is claimed in a merely generic manner (as it is here).
Transmitting is post solution activity under MPEP 2106.05, see cases OIP Techs., Inc., v. Amazon.com, Inc., 788 F.3d 1359, 1363, 115 USPQ2d 1090, 1093 (Fed. Cir. 2015) (sending messages over a network) and Ameranth, 842 F.3d at 1241-42, 120 USPQ2d at 1854-55.
Therefore, the claim is directed to an abstract idea. Thus, the claim is not patent eligible. (Step 2B: NO. The claim does not provide significantly more)
Dependent Claims recite additional elements.
This judicial exception is not integrated into a practical application. In particular, the recited additional elements of
Claim 20:
“communication network”: merely applying communication network technology as a tool to perform an abstract idea
“display information”: insignificant extra-solution activity to the judicial exception of displaying information
“graphical user interface (GUI)”: merely applying graphical user interface technology as a tool to perform an abstract idea
are recited at a high-level of generality (i.e., as a generic processor performing a generic computer function) such that it amounts no more than mere instructions to apply the exception using a generic computer components and/or electronic processes. The additional elements merely add instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea, see MPEP 2106.05(f). For example, the Specification reads, [0103] A processor may include one or more microprocessors, central processing units (CPUs), computing devices, …. or like devices or any combination thereof, regardless of the architecture. [0050] Data provider 117 may provide such information in any one or more of a variety of forms and means such as video, audio (e.g., radio broadcast), text (e.g., stock ticker-type information), or other data that may convey information. Accordingly, these additional elements, when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea and are at a high level of generality. Therefore, these dependent claims are directed to an abstract idea without a practical application. (Step 2A-Prong 2: NO. The additional claimed elements are not integrated into a practical application)
The claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception because, when considered separately and as an ordered combination, they do not add significantly more (also known as an “inventive concept”) to the exception. As discussed above with respect to integration of the abstract idea into a practical application, the additional element of using a computer hardware amounts to no more than mere instructions to apply the exception using a generic computer component. Mere instructions to apply an exception using a generic computer component cannot provide an inventive concept. For example, the Specification reads, [00103] “A processor may include one or more microprocessors, central processing units (CPUs), computing devices, ….or like devices or any combination thereof, regardless of the architecture” [0050] Data provider 117 may provide such information in any one or more of a variety of forms and means such as video, audio (e.g., radio broadcast), text (e.g., stock ticker-type information), or other data that may convey information. Accordingly, these additional elements, do not change the outcome of the analysis, when considered separately and as an ordered combination. Thus, Claims 1-6 and 9-20 are not patent eligible. (Step 2B: NO. The claims do not provide significantly more)
Claim Rejections - 35 USC § 103
In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status.
The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action:
A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
The factual inquiries set forth in Graham v. John Deere Co., 383 U.S. 1, 148 USPQ 459 (1966), that are applied for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows:
1. Determining the scope and contents of the prior art.
2. Ascertaining the differences between the prior art and the claims at issue.
3. Resolving the level of ordinary skill in the pertinent art.
4. Considering objective evidence present in the application indicating obviousness or nonobviousness.
Claims 1-5, 9, 13, 14, and 16-20 are rejected under 35 U.S.C. 103 as being unpatentable over Lutnick ("GENERATING RISK POOLS", U.S. Publication Number: 20100076883 A1) in view of Lutnick (“SYSTEMS AND METHODS FOR COMMISSION ALLOCATION”, U.S. Publication Number: US 20060080222 A1) hereafter referred to as Lutnick222.
Regarding Claim 1,
Lutnick teaches,
A method of reducing data processing and transmission load for a distributed trading platform,
(Lutnick [0048] Applying a filter to a set of things should be understood to include generating a subset of the set of things in which each thing in the subset has one or more desired properties.
Lutnick [0383] use such information to adjust performance (e.g., prepare for a major increase in trading activity, offload orders to a different market, pause acceptance of orders temporarily until trading has stabilized, etc.) trade on a security
Lutnick [0066] Devices that are described as in communication with each other need not be in continuous communication with each other...On the contrary, such devices need only transmit to each other as necessary or desirable, and may actually refrain from exchanging data most of the time. For example, a machine in communication with another machine via the Internet may not transmit data to the other machine for long period of time (e.g. weeks at a time).
Lutnick [0117] trading system may include a plurality of computer systems at one or more locations.)
comprising: controlling, by at least one processor: receiving, over a communication network in real time, real time market data from a remote computing device;
(Lutnick [0376] one or more microprocessors, network connection circuitry, and/or data storage areas
Lutnick [0381] A market data module 220 may receive real-time and/or other market data from an input 222.
Lutnick [0117] along with a plurality of remote computer systems.)
monitoring, over a communication network in real time, trading activity information indicating real time trading activities of respective second participants,
(Lutnick [0339] monitor the initiation, placement, and execution of orders
Lutnick [0500] will monitor the trading activity of all auction participants
Lutnick [0497] communicates in real time with external data sources 40 via the Internet.
Lutnick [0113] information may be narrowcast to potential counter parties for matching with orders associated with the OMS of those parties.)
in which the second participants are liquidity takers and in which the real time market data includes the trading activity information;
([0333] institutional traders may be unable to execute trades involving large quantities of securities without adversely affecting the market price of the securities
Lutnick [0107] information identifying orders (e.g., bids, offers, etc.) that is stored by order management systems, or otherwise stored internally by a trading organization or trader, have not traditionally been thought of as liquidity available to the market..... Such secret orders may be referred to as “dark pools” or “dark books” of liquidity because they remain unseen by such markets.
Lutnick [0108] It is recognized that enabling trading to take place using such orders may improve the liquidity of a market and thereby allow more trades to occur through a market and/or allow trades to occur at a price closer to or at a fair market value.)
determining in real time, based on the real time market data, respective toxicity ratings for each of the second participants, in which each of the toxicity ratings of each respective corresponding second participant indicates an impact of at least one trade of at least one given financial instrument with the respective corresponding second participant has on a market price for the at least one given financial instrument;
(Lutnick [0294] filtering of participants based on the participants' prior actions....Participants may be arranged into groups based on the frequency of positive responses to queries. For example, participants may be arranged into groups as follows: participants with 100% to 75% positive response rate, participants with 75% to 50% positive responses, and participants with less than 50% positive responses. ...may include any number of groups and any arrangement of groups. Such groups may be referred to as risk pools.
Lutnick [0241] size or other characteristics of a participant may affect a participants options. Some implementations, for example, may be limited to large participants, others to small participants, others may allow all sized participants.
Lutnick [0267] use the information about the acceptance by the participant to affect the market.
Lutnick [0333] institutional traders may be unable to execute trades involving large quantities of securities without adversely affecting the market price of the securities.
Examiner notes the Applicant's Specification reads, [0055] "Toxicity may refer to the impact of such a trade has to the market price for a financial instrument against the contra party to the trade." That is, toxicity refers to a trader’s impact on liquidity (e.g., a large sell order may cause prices to crater or external volume to diminish). The prior art of Lutnick describes assigning values (or grouping) traders based on their "size or other characteristics of a participant (that) may affect a participants options" and their responsiveness to reacting to trades or countertrades )
receiving, over the communication network from a first participant order management system of a liquidity provider, a first order, in which the first order is held hidden securely in the first participant order management system;
(Lutnick [0255] the pending orders may include firm orders, and the participants may include participants with orders in an OMS.
Lutnick [0256] may include information about one or more pending orders that does not include all the information about the pending orders....information may, for example, withhold which side the orders are for, who the orders were submitted by, the quantity of the orders, the price of the orders, and/or any other information....information may be withheld.
Lutnick [0149] In some embodiments, the act of querying and/or some or all response that may be received may be concealed and/or otherwise suppressed from an originator of the firm order and/or any other individual.
Lutnick [0373] data is preferably encrypted using a secure protocol, such as the secure sockets layer (SSL).)
automatically in response to receiving the first order, prior to receiving a request to execute a trade fulfilling at least a part of the first order, and in real time: determining toxicity augments for the first order from the toxicity ratings respectively of the second participants,
(Lutnick [0296] The rate of positive responses may, for example, include a comparison (e.g., a ratio, a percentage, etc.) between a number of positive responses and a number of offers (e.g., offers with a characteristic, offers associated with a submitter, and so on). Such a rate, for example, may correspond to offers made to participants if the matching order is stored in the order management system, to all queries sent to participants, and/or to queries/orders having one or more characteristics.
Lutnick [0507] includes statistics regarding the initiating user's past auctions (e.g., proportion filled, cancel rate, frequency of trade breaks, etc.).
Lutnick [0522] the CTI system rates a market participant's compliance with the MP's own stated trading limits.
Lutnick [0524] In all of these “rating service” embodiments, the MP being rated permits the CTI system to use confidential information to rate the MP's past behavior (e.g., disclosures, trade breaks, inappropriate trading activity) in order to receive better prices on future trades or more order flow.
Lutnick [0485] There is also an empirically demonstrable risk of adverse price action due to “front running” (buying activity by market participants in anticipation of price movement resulting from the large revealed order).
Lutnick [0247] providing rebates or charging fees to trade participants. Such fees and/or rebates may be arranged to incentivize participation
In the prior art, Lutnick, both the seller and buyer are rated or scored according to various metrics, including toxicity, or ability/willingness/propensity of frontrunning/other factors. Examiner views a "toxicity augment" as an inducement or incentive to buy/sell a "toxic" instrument. )
in which each toxicity augment is an amount of a price change from a price of the first order and determined based on the toxicity rating of a respective corresponding second participant,
(Lutnick [0445] some participants may not be charged a fee, orders meeting certain criteria may not be charged a fee, some participants may be given a payment to submit orders, and so on. Such incentivizing may help to increase liquidity in a market where certain participants may be otherwise unwilling to provide such liquidity.
Lutnick [0112] incentives, filtering policies, and/or automatic execution of types of orders to encourage participation
Lutnick [0247] providing rebates or charging fees to trade participants. Such fees and/or rebates may be arranged to incentivize participation...when an order is executed based on a firm order matched with a OMS order, the participant that submitted the firm order may receive a rebate, and the participant associated with the OMS order may be charged a fee.
Lutnick [0423] Traders may be encouraged to enter counter orders for illiquid securities through any desired incentivizing method....traders may be offered rebates for entering such orders, and/or traders may be offered any desired incentive for entering such orders.
Examiner views a "toxicity augment" as an inducement or incentive to buy/sell a "toxic" instrument )
reducing a total quantity of data processed and transmitted to execute trades for the first order, so as to reduce computational resource usage, by selecting a subset of the second participants based on the respective toxicity ratings falling below a predetermined toxicity threshold, and ,
(Lutnick [0149] the act of querying and/or some or all response that may be received may be concealed and/or otherwise suppressed...only a positive response may be revealed. In some embodiments, negative response may be eliminated or otherwise suppressed. By limiting responses...
Lutnick [0048] Applying a filter to a set of things should be understood to include generating a subset of the set of things in which each thing in the subset has one or more desired properties.
Lutnick [0147] querying may include transmitting requests to other processes, threads, memory locations, portion of a computer program, etc. executing by a single system, such as central system 201 or multiple systems, such as a distributed system.
Lutnick [0066] Devices that are described as in communication with each other need not be in continuous communication with each other... such devices need only transmit to each other as necessary or desirable, and may actually refrain from exchanging data most of the time.
Lutnick [0383] use such information to adjust performance (e.g., prepare for a major increase in trading activity, offload orders to a different market, pause acceptance of orders temporarily until trading has stabilized, etc.) trade on a security
Lutnick [0290] a query may only be sent if the fund holds some other threshold amount of the financial instrument (e.g., a million shares), holds some minimum percentage of the threshold instrument (e.g., 10% of the makeup of the fund is the financial instrument), the financial instrument is one of the top number of financial instruments that make up the fund (e.g., 1 of the top 10 constituents of the fund), and/or any other set of filters may be used.)
selectively transmitting, over the communication network, first order display information securely and simultaneously to second participant order management systems respectively of the selected subset of the second participants that is less than an entirety of the second participants, thereby excluding non-selected second participant from the selectively transmitting,
(Lutnick [0432] buy side participants may be able to establish filters that allow only some sell side participant orders to be traded with the buy side participants.
Lutnick [0433] In some embodiments, indications of one or more criteria for use in filtering orders may be received. The criteria may be used to establish appropriate filters so that orders not meeting the criteria are filtered. If orders do meet the criteria, the orders may be presented to the market participant that established the criteria.
Lutnick [0085] include transmission medium 115, which may be referred to as a communication network
Lutnick [0150] receipt of new firm orders may occur substantially simultaneously as the querying of participants. Such new firm orders may be compared with the received... to determine if they are matching)
wherein reception of the first order display information causes simultaneous display on a graphical user interface (GUI) of a display of each second participant order management system of the second participant order management systems of an indication of the price of the first order
(Lutnick [0447] various actions taken by traders and/or information presented to traders may be taken/presented through one or more user interfaces of computing devices. For example, indications of orders, negotiations, etc. may be facilitated by user interfaces through which traders may interact.
Lutnick [0117] trading system may include a plurality of computer systems at one or more locations.
Lutnick [0150] receipt of new firm orders may occur substantially simultaneously as the querying of participants. Such new firm orders may be compared with the received... to determine if they are matching
Lutnick [0040] Some example properties may include, a type of financial instrument (e.g., industry, capitalization, risk, etc.), a security identifier (e.g., stock symbol, etc.), an amount of shares, a price, etc.)
and, separate from the indication of the price of the first order, an indication of the amount of the price change as the toxicity augment corresponding respectively to the selected second participant,
(Lutnick [0240] rebates and charges may be given.... such rebates and/or charges may depend on a category of participant.
Lutnick [0247] Some embodiments may include providing rebates or charging fees to trade participants. Such fees and/or rebates may be arranged to incentivize participation in certain aspects of a trading system.... the participant that submitted the firm order may receive a rebate, and the participant associated with the OMS order may be charged a fee.
Lutnick [0220] may also include receiving information about a matching order and displaying that information through one or more interfaces.
Lutnick [0168] displaying an indication of the firm order to a trader through one or more trading interfaces)
automatically responsive to determining the updated toxicity augments, refreshing, over the communication network, the GUIs of the second participant order management systems to display, separately from the indication of the price of the first order, indications the updated toxicity augments in place of the toxicity augments
(Lutnick [0247] include providing rebates or charging fees to trade participants. Such fees and/or rebates may be arranged to incentivize participation in certain aspects of a trading syste
Lutnick [0128] participant systems may query an OMS for updated information (pull information from the OMS), may receive updates from the OMS as information in the OMS changes (information may be pushed from the OMS), and/or synchronize with an OMS in any desired way.
Lutnick [0291] a change to a price of a financial instrument defined by an order may be determined.
Lutnick [0229] displaying terms associated with a trade)
previously displayed,
(Lutnick [0418] Fulfilled orders, may be tracked for use in fulfilling future orders, in a substantially similar method to tracking unfulfilled orders described above. This may be useful because a trader that has previously traded in a security may be more likely to trade in that security again.)
causing, over the communication network, display of respective shot clocks on the GUI of the displays of the second participant order management systems to indicate respective different countdowns of available time remaining for the selected second participants to react to the first order,
(Lutnick [0282] an indication of an amount of time remaining...may be transmitted to one or more participants. ... time remaining in the time period before the order may be cancelled may be shown to a recipient of a query (e.g., a clock may be shown in an interface window, a query may include the indication, etc.)....an indication that the time period has ended may be shown to the recipient of a query (e.g., a window may change colors, an icon may be shown, an amount of time remaining may be shown, etc.).)
and upon detecting that the available time has is expired, executing: displaying on the GUI an indicator that the available time is expired,
(Lutnick [0282] an indication that the time period has ended may be shown to the recipient of a query (e.g., a window may change colors, an icon may be shown, an amount of time remaining may be shown, etc.)....an indication of the query may be removed from an interface after the end of the time period (e.g., a window may be closed or removed from an interface).)
and replacing an existing indication operable to request execution of a trade with a new indication operable to request refresh of the first order, and upon detecting selection of the new indication,
(Lutnick [0302] the matching order may be for a different financial instrument that is substitutable for the first financial instrument.
Lutnick [0304] a trader may be presented with an offer to enter into a trade. The trade may include a trade for the first financial instrument even if the matching order is for a different financial instrument. In other implementations, the trade may include the other financial instrument even if the order is for the first financial instrument. The trader may accept or reject such an offer.
Lutnick [0306] The trade may be for the first financial instrument even though the matching order is for a different financial instrument. In other implementations, the trade may be for the other financial instrument even though the order is for the first financial instrument. Only if an acceptance is received (e.g., though an interface, from the trader, etc.) execution of the trade may be It should be recognized)
detecting if the first order remains available for trading, and responsive to detecting that the first order remains available,
(Lutnick [0104] a security desired or available to be sold (e.g., long and/or short sale)
Lutnick [0140] may include determining if any matching firm orders are available)
executing refresh of display data associated with the first order;
(Lutnick [0210] indication to that extent may be transmitted to the participants, in still other embodiments, an originator of the OMS order may be contacted with the updated firm order information)
receiving, over the communication network from a given second participant system of the second participant order management systems, a contra order; in response to receiving the contra order, transmitting the contra order, over the communication network, to the first participant order management system; receiving, over the communication network from the first participant order management system, an indication that a quantity of a financial instrument indicated in the first order is reserved; and in response to receiving the indication that the quantity of the financial instrument is reserved, facilitating execution of an exchange that fulfills at least a part of each of the contra order and the first order.
(Lutnick [0501] process of accumulating market participant (MP) contra-orders in response to a CTI notification and executing a matching auction
Lutnick [0043] Binding acceptance of an order should be understood to include an acceptance of a trade fulfilling at least part of the order that does not allow for further intervention in the execution of the trade and without the ability to revoke the acceptance
Lutnick [0168] the trader may be asked to accept the matching order or reject the matching order. If the trader, in some embodiments, acceptance of the order, the system may execute a trade, forward information for the trade to be executed and/or cleared by another system, and/or perform any other desired action to further facilitate execution of the trade.)
Lutnick does not teach automatically, continually and dynamically recalculating the toxicity augments based on continuously recalculated toxicity ratings, wherein the toxicity ratings are continuously recalculated in real time based on fluctuations in the real time market data affecting the indicated impact on the market price to determine updated toxicity augments respectively for the second participants, for selected second participants, adjusting indications of the amount of price changes as the toxicity augments to updated amounts of price changes as updated toxicity augments, respectively for the selected second participants; respectively corresponding to the selected second participants, wherein the updated toxicity augments include the updated amounts of price changes;
Lutnick222 teaches,
automatically, continually and dynamically recalculating the toxicity augments based on continuously recalculated toxicity ratings, wherein the toxicity ratings are continuously recalculated in real time based on fluctuations in the real time market data affecting the indicated impact on the market price to determine updated toxicity augments respectively for the second participants, for selected second participants, adjusting indications of the amount of price changes as the toxicity augments to updated amounts of price changes as updated toxicity augments, respectively for the selected second participants;
(Lutnick222 [0008] commissions or commission incentives may be varying amounts of brokerage fees, reductions or elimination of the same, rewards such as credit, rebates and combinations of the same
Lutnick222 [Claim 7] wherein the commission or reward comprises an amount calculated through a rate selected from the group consisting of a passive screen display rate, a screen activator rate, a passive joiner rate and an active joiner rate.
Lutnick222 [0009] the commission or reward may be made explicit through being added to or subtracted from the trade price displayed in real-time to the participants either prior to or immediately after a trade is executed
Lutnick222 [0030] This allocation of commissions is premised on the notion that the active participants are taking advantage of the price information and liquidity...Such a provision rewards participants, including market-makers, for providing liquidity to the market.
Lutnick222 [0019] Server 120 may be used to implement the governing logic that processes and executes orders and trades, and distributes trade and market information)
respectively corresponding to the selected second participants, wherein the updated toxicity augments include the updated amounts of price changes;
(Lutnick222 [0009] the commission or reward may be made explicit through being added to or subtracted from the trade price displayed in real-time to the participants either prior to or immediately after a trade is executed
Lutnick222 [0041] interactive matching systems, automated matching systems, price improvement systems, FIFO (First In, First Out) systems, RFQ (Request for Quote) systems, etc., and may be applied to the trading of any types of items. In any such systems, different commission rates may apply to different participants, depending on what side of a trade they are on, their point of entry to the trade, the degree or extent of their participation in the trade and/or whether there were prior existing bids and offers on the item being traded)
It is prima facie obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to have modified the trading inducement incentive of Lutnick to incorporate the inducement incentive amount calculation teachings of Lutnick222 for “wherein the commission or reward comprises an amount calculated through a rate” (Lutnick222 [Claim 7]). The modification would have been obvious, because it is merely applying a known technique (i.e. inducement incentive amount calculation) to a known concept (i.e. trading inducement incentive) ready for improvement to yield predictable result (i.e. “determine a commission or reward relating to the trade, and allocate the commission or reward to at least one of the first and second participants” Lutnick222 [0007])
Regarding Claim 2,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 1 as described earlier.
Lutnick teaches,
in which a given toxicity augment for a given second participant of the second participants is determined as a function of a given toxicity level corresponding to the given second participant.
(Lutnick [0247] providing rebates or charging fees to trade participants. Such fees and/or rebates may be arranged to incentivize participation in certain aspects of a trading system.
Lutnick [0423] historical information may be used to adjust treatment of new orders. For example, if an order is entered for a historically illiquid security, additional avenues may be used to find a matching order, such as prior traders who had entered orders for the security, other marketplaces, etc. In some embodiments, other traders may be information of the existence of an order for an illiquid security. Traders may be encouraged to enter counter orders for illiquid securities through any desired incentivizing method. For example, traders may be offered priority in liquid orders if they enter an order for an illiquid security, traders may be offered rebates for entering such orders, and/or traders may be offered any desired incentive for entering such orders.
Lutnick [0419] on a characteristic of an order entered by the trader. The desired characteristics may include, for example, market capitalization, geographic area, industry, risk level, profit to loss ratio, volume of trades, profit level, sales level, cash on hand amount, analyst recommendation, and/or any other information.
Lutnick [0194] risk pools, with which participants must be associated to receive a query (e.g., choose from among participants with positive response rates of 1-50%, 51-70%, 71-90%, and/or 91-100%)
Lutnick [0240] rebates and charges may be given. In some embodiments, such rebates and/or charges may depend on a category of participant. )
Regarding Claim 3,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 1 as described earlier.
Lutnick teaches,
in which a given toxicity augment for a given second participant of the second participants is determined from a look-up table indicating given toxicity augments for respective toxicity levels.
(Lutnick [0051] “determining” can include calculating, computing, processing, deriving, investigating, looking up (e.g., looking up in a table, a database or another data structure)
Lutnick [0194] risk pools, with which participants must be associated to receive a query (e.g., choose from among participants with positive response rates of 1-50%, 51-70%, 71-90%, and/or 91-100%)
Lutnick [0240] rebates and charges may be given. In some embodiments, such rebates and/or charges may depend on a category of participant. )
Regarding Claim 4,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 1 as described earlier.
Lutnick teaches,
in which the remote computing device is a remote market data provider.
(Lutnick [0087] commercial on-line service providers
Lutnick [0381] receive real-time and/or other market data from an input
Lutnick [0086] databases may...be stored ... remotely from a device which accesses data in such a database.)
Regarding Claim 5,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 1 as described earlier.
Lutnick teaches,
in which a given toxicity augment of a given second participant of the second participants is transmitted over the communication network as part of given display information to a given second participant system of the given second participant.
(Lutnick [0447] various actions taken by traders and/or information presented to traders may be taken/presented through one or more user interfaces of computing devices. For example, indications of orders, negotiations, etc. may be facilitated by user interfaces through which traders may interact.
Lutnick [0117] trading system may include a plurality of computer systems at one or more locations)
Regarding Claim 9,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 1 as described earlier.
Lutnick teaches,
in which the transmitting, over the communication network, the first order display information to the second participant order management systems causes simultaneously displaying different indications of amounts of price changes as the toxicity augments with, and separately from, the price of the first order on the displays respectively of the second participant order management systems.
(Lutnick [0447] various actions taken by traders and/or information presented to traders may be taken/presented through one or more user interfaces of computing devices. For example, indications of orders, negotiations, etc. may be facilitated by user interfaces through which traders may interact.
Lutnick [0117] trading system may include a plurality of computer systems at one or more locations
Lutnick [0291] a change to a price of a financial instrument defined by an order may be determined.
Lutnick [0240] rebates and charges may be given. In some embodiments, such rebates and/or charges may depend on a category of participant. )
Regarding Claim 13,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 1 as described earlier.
Lutnick teaches,
prior to receiving a request to execute a trade fulfilling at least a part of the first order from given second participants of the second participants, in real time: automatically, continually and dynamically determining for the given second participants of the second participants updated amounts of price changes as updated toxicity augments from the toxicity ratings respectively of the given second participants.
(Lutnick [0423] additional avenues may be used to find a matching order, such as prior traders who had entered orders for the security
Lutnick [0144] Each such matching orders may fully or partially fulfill the received firm order.
Lutnick [0408] so that the OMS database 114 is updated in substantially real-time.
Lutnick [0179] Process 500 may continue to loop until a response is received, a matching firm order is found otherwise, a time period expires, and/or any other event occurs.
Lutnick [0066] Devices that are described as in communication with each other need not be in continuous communication with each other
Lutnick [0291] a change to a price of a financial instrument defined by an order may be determined.
Lutnick [0423] traders may be offered priority in liquid orders if they enter an order for an illiquid security, traders may be offered rebates for entering such orders)
Regarding Claim 14,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 1 as described earlier.
Lutnick teaches,
determining whether the second participants are qualified to view the first order.
(Lutnick [0194] firm order submitters may choose from one or more ranges of response rates ...which may be referred to as risk pools, with which participants must be associated to receive a query (e.g., choose from among participants with positive response rates of 1-50%, 51-70%, 71-90%, and/or 91-100%).
Lutnick [0113] Information regarding such orders may be used to match information from other market participants
Lutnick [0177] If matches exist, the participants may return a positive indication)
Regarding Claim 16,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 1 as described earlier.
Lutnick teaches,
securely storing, in a database, trading intentions of the liquidity provider received over the communication network from the first order management participant system.
(Lutnick [0387] Contemplated orders may be stored in the OMS database 114, for example, because the trader intends to execute certain transactions in stages)
Regarding Claim 17,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 16 as described earlier.
Lutnick teaches,
in which the trading intentions are encrypted as received over the communication network, and in which the at least one processor controls: decrypting the trading intentions; and storing the trading intentions in decrypted form in the database.
(Lutnick [0387] Contemplated orders may be stored
Lutnick [0234] some or all communication may be encrypted.
Lutnick [0376] may include one or more microprocessors
Lutnick [0123] Such messaging may be encrypted or not as desired.
Lutnick [0234] encrypted data may be unencrypted before a comparison occurs
Lutnick [0034] stored information such as a database of stored order information.)
Regarding Claim 18,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 1 as described earlier.
Lutnick teaches,
in which the first order display information is transmitted encrypted respectively to the second participant order management systems, such that the first order display information of one of the selected second participants is maintained confidential from others of the selected second participants.
(Lutnick [0234] some or all communication may be encrypted.
Lutnick [0416] size of orders, and/or any other information related to new and/or inactive unfulfilled orders may be kept confidential during the process until the counterparties choose to reveal such information.
Lutnick [0485] A market participant's decision to reveal information regarding a large trading interest typically represents a tradeoff between confidentiality and liquidity.
Lutnick [0220] include transmitting... displaying that information through one or more interfaces.)
Claim 19 is rejected on the same basis as Claim 1.
Regarding Claim 20,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 19 as described earlier.
Lutnick teaches,
further comprising the second participant order management systems,
in which each of the second participant order management systems includes a third computing device configured to control: receiving, over the communication network, the first order display information; rendering on the graphical user interface the indication of the price of the first order with and separately from the indication of the amount of the price change as the toxicity augment corresponding to the second participant; and transmitting, over the communication network, a given contra order.
(Lutnick [0364] An ETM 110 is in communication with three trading systems 112A, 112B, 112C. Although only three trading systems 112 are illustrated, embodiments of the present invention can have many more
Lutnick [0376] one or more microprocessors, network connection circuitry
Lutnick [0117] along with a plurality of remote computer systems.
Lutnick [0220] may also include receiving information about a matching order and displaying that information through one or more interfaces.
Lutnick [0447] various actions taken by traders and/or information presented to traders may be taken/presented through one or more user interfaces of computing devices. For example, indications of orders, negotiations, etc. may be facilitated by user interfaces through which traders may interact.
Lutnick [0240] rebates and charges may be given.... such rebates and/or charges may depend on a category of participant.
Lutnick [0380] facilitate negotiations between traders using trading systems and having contra interests)
Claims 6, 11, 12, and 15 are rejected under 35 U.S.C. 103 as being unpatentable over Lutnick and Lutnick222 in view of Givot (“FEE/REBATE CONTINGENT ORDER MATCHING SYSTEM AND METHOD”, U.S. Patent Number: 11068979 B1)
Regarding Claim 6,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 1 as described earlier.
Lutnick teaches,
order is transmitted over the communication network as part of given display information to a given second participant system of the given second participant.
(Lutnick [0447] various actions taken by traders and/or information presented to traders may be taken/presented through one or more user interfaces of computing devices. For example, indications of orders, negotiations, etc. may be facilitated by user interfaces through which traders may interact.
Lutnick [0117] trading system may include a plurality of computer systems at one or more locations)
Lutnick does not teach in which an amount equal to a sum of a given toxicity augment of a given second participant of the second participants and a price of the first order.
Givot teaches,
in which an amount equal to a sum of a given toxicity augment of a given second participant of the second participants and a price of the first order.
(Givot [Claim 1] executing, by the COMS, an order handling and matching algorithm that converts the portion of the electronic orders to a form compliant with the COMS... identifying an order of a first type and one or more orders of a second type... summing fee or rebate information of the order of the first type and the one or more orders of the second type until it is determined that a fee or rebate sum of the order of the first type and an order of the second type satisfies a predetermined minimum value)
It is prima facie obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to have modified the trading inducement incentive of Lutnick to incorporate the trading inducement incentive summation teachings of Givot for “summing fee or rebate information of the order.” (Givot [Claim 1]). The modification would have been obvious, because it is merely applying a known technique (i.e. trading inducement incentive summation) to a known concept (i.e. trading inducement incentive) ready for improvement to yield predictable result (i.e. “(inducement) satisfies a predetermined minimum value” Givot [Claim 1])
Regarding Claim 11,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 10 as described earlier.
Lutnick teaches,
automatically responsive to a determination that there is no time remaining for a given selected second participant to react to the first order, causing, over the communication network, refreshing of the display on the GUI of the second participant order management system of the given selected second participant such that (i) the shot clock indicates the available time is expired
(Lutnick [0179] a time period expires, and/or any other event occurs.
Lutnick [0128] participant systems may query an OMS for updated information (pull information from the OMS), may receive updates from the OMS as information in the OMS changes (information may be pushed from the OMS), and/or synchronize with an OMS in any desired way.
Lutnick [0165] order information may be removed/updated when an order is fully or partially fulfilled, an order expires, an order is explicitly removed or updated by a trader, and/or for any other desired reason.
Lutnick [0268] apply for an initial 30 seconds. In some implementations, the time period may be similar to a time period for a shot clock
Lutnick [0447] various actions taken by traders and/or information presented to traders may be taken/presented through one or more user interfaces of computing devices.)
and (ii) an indication operable to request to execute a trade fulfilling the first order displayed on the GUI
(Lutnick [0303] if an order is for a quantity of a first financial instrument, and a trade fulfilling the order is for a substitutable financial instrument, the quantity of instruments traded and/or the price at which the instruments are traded may not be the same as those identified by the order for the first financial instrument.
Lutnick [0291] a change to a price of a financial instrument defined by an order may be determined.
Lutnick [0229] displaying terms associated with a trade
Lutnick [0447] various actions taken by traders and/or information presented to traders may be taken/presented through one or more user interfaces of computing devices.)
Lutnick does not teach is replaced by an indication operable to request to refresh of the first order.
Givot teaches,
is replaced by an indication operable to request to refresh of the first order.
(Givot [Col 14, Line 65 to Col 5, Line 1] An inbound order modification request message (sometimes called a cancel/replace message request), directs COMS to modify a previously sent order.)
It is prima facie obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to have modified the trading inducement incentive of Lutnick to incorporate the order replacement teachings of Givot for “order modification request message” (Givot [Col 14, Line 65 to Col 5, Line 1]). The modification would have been obvious, because it is merely applying a known technique (i.e. order replacement) to a known concept (i.e. trading inducement incentive) ready for improvement to yield predictable result (i.e. “to modify a previously sent order” Givot [Col 14, Line 65 to Col 5, Line 1])
Regarding Claim 12,
Lutnick, Lutnick222, and Givot teach the trading inducement incentive of Claim 11 as described earlier.
Lutnick teaches,
automatically responsive to a determination the indication to request to refresh the first order is operated and receiving an indication that a second quantity of the financial instrument indicated in the first order is reserved, facilitating execution of an exchange that fulfills at least a part of each of the contra order and the first order.
(Lutnick [0303] if an order is for a quantity of a first financial instrument, and a trade fulfilling the order is for a substitutable financial instrument, the quantity of instruments traded and/or the price at which the instruments are traded may not be the same as those identified by the order for the first financial instrument.
Lutnick [0141] multiple orders may be determined to be matching according to some priority mechanism so that a total number of shares of all matching orders sums to at least as much as a number indicated by the firm order indication.
Lutnick [0043] Binding acceptance of an order should be understood to include an acceptance of a trade fulfilling at least part of the order that does not allow for further intervention in the execution of the trade and without the ability to revoke the acceptance
Lutnick [0168] acceptance of the order, the system may execute a trade, forward information for the trade to be executed and/or cleared by another system, and/or perform any other desired action to further facilitate execution of the trade.)
Regarding Claim 15,
Lutnick and Lutnick222 teach the trading inducement incentive of Claim 1 as described earlier.
Lutnick teaches,
transmitting the first order display information, over the communication network, to cause display on the GUI of each of the second participant order management systems indicia as a button operable to accept the first order
(Lutnick [0168] trader may be asked to accept the matching order
Lutnick [0207] determining if a positive response is received. Determining if a response is a positive response may include determining which if any mouse buttons were pressed, which if any keyboard buttons were pressed, which interface control if any was selected)
Lutnick does not teach at an amount equal to a sum of the amount of the price change as the toxicity augment and the price of the first order.
Givot teaches,
at an amount equal to a sum of the amount of the price change as the toxicity augment and the price of the first order.
(Givot [Col 2, Lines 34-37] to transfer the risk of price changes of a product by permitting one to increase, decrease, eliminate, or hedge a position in a financial instrument
Givot [Claim 1] by a contingent order matching system (COMS) over a network, a plurality of electronic orders, each having differing quantities and prices... summing fee or rebate information of the order of the first type and the one or more orders of the second type until it is determined that a fee or rebate sum of the order of the first type and an order of the second type satisfies a predetermined minimum value)
It is prima facie obvious to one of ordinary skill in the art before the effective filing date of the claimed invention to have modified the trading inducement incentive of Lutnick to incorporate the trading inducement incentive summation teachings of Givot for “summing fee or rebate information of the order.” (Givot [Claim 1]). The modification would have been obvious, because it is merely applying a known technique (i.e. trading inducement incentive summation) to a known concept (i.e. trading inducement incentive) ready for improvement to yield predictable result (i.e. “(inducement) satisfies a predetermined minimum value” Givot [Claim 1])
Response to Remarks
Applicant's arguments filed on March 10, 2026, have been fully considered and Examiner’s remarks to Applicant’s amendments follow.
Response Remarks on Claim Rejections - 35 USC § 101
The Applicant states:
“the claims are directed to improvements in computer interface technology, which resolve a specific technical problem rooted in computer-technology; namely, the difficulty of displaying stale data due to data-display latency. The claims are thus comparable to those of Trading Technologies Int'l v. IBG LLC …. the GUI option to execute a trade is replaced with an indicator that is executable to refresh the information associated with that particular instrument instead "
Examiner responds:
Displaying information on a graphical user interface is merely insignificant extra-solution activity, as supported by case law, Trading Technologies v. IBG LLC, 921 F.3d 1084, 1093-94, 2019 USPQ2d 138290 (Fed. Cir. 2019) that held arranging transactional information on a graphical user interface in a manner that assists traders in processing information more quickly is insufficient to show an improvement in computer-functionality, see also MPEP 2106.05(a).
The Applicant states:
“the selective transmission features (which have been clarified in the claims in the present amendments), the net effect is to prevent transmission of invalid execution requests, which in turn reduces unnecessary network traffic and wasteful usage of computing resources. "
Examiner responds:
The amended limitations remain abstract. The “selective transmission (of data)” expresses an abstract idea about to financial incentives as it amounts to gathering, sharing, and manipulation of data which expresses an Abstract Idea [Intellectual Ventures I v. Capital One Fin. Corp., 850 F.3d 1332, 121 USPQ2d 1940 (Fed. Cir. 2017) “collecting, displaying, and manipulating data” was considered part of the abstract idea], and Selecting A Particular Data Source or Type Of Data To Be Manipulated [Selecting information, based on types of information and availability of information in a power-grid environment, for collection, analysis and display, Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350, 1354-55, 119 USPQ2d 1739, 1742 (Fed. Cir. 2016)]
An abstract idea (selective data) cannot integrate another abstract idea (toxicity augments) into a practical application. Processing less data rather than more date is commonly understood and expected.
In the absence of unexpected results, changes or alteration of sequence do not make for a patentable invention, see Ex parte Rubin, 128 USPQ 440 (Bd. App. 1959) ; In re Burhans, 154 F.2d 690, 69 USPQ 330 (CCPA 1946); In re Gibson, 39 F.2d 975, 5 USPQ 230 (CCPA 1930)
Furthermore, the Examiner notes that the Specification reads, [0092] Reducing the amount of data needed to process trading strategies may improve the functionality of these machines and expand the impact of these finite computational resources. By selectively transmitting a trade order with toxicity augment only to approved target participants, the amount of data processed and transmitted to execute a trade may be reduced. This may reduce the processing time, storage needs, and other computational resources (e.g., power, bandwidth, etc.) used to process and implement trading strategies. Selective transmission of the trade order with a corresponding toxicity augment may create a more usable and efficiently operating market.
Examiner notes that “Reducing the amount of data” is not related to compression algorithms but rather “selective” manipulation of data “only to approved target participants” which is Mere Data Gathering [Obtaining information about transactions using the Internet to verify credit card transactions, CyberSource v. Retail Decisions, Inc., 654 F.3d 1366, 1375, 99 USPQ2d 1690, 1694 (Fed. Cir. 2011)],
The Specifcation further states:
[0098] simultaneously permitting multiple targeted parties as second participants to, in real time, be presented with trade information.... with different trading parties at different remote locations who do not want their trading intentions revealed to the other participants,.... presentation of selected trade information on GUIs of second participant systems and real time secure exchange of trade related information via the central system,... by improving the accuracy of trader transactions
The selective presentation of data on a display is both “mere data gathering” and “insignificant extra-solution activity,” neither of which integrate an abstract idea into a practical application.
Therefore, the rejection under 35 USC § 101 remains.
Response Remarks on Claim Rejections - 35 USC § 103
Applicant's amendments required the application of NO new/additional prior art.
The prior at describes the amended claim language:
upon detecting that the available time has is expired, executing: displaying on the GUI an indicator that the available time is expired,
Lutnick [0282] an indication that the time period has ended may be shown to the recipient of a query (e.g., a window may change colors, an icon may be shown, an amount of time remaining may be shown, etc.)....an indication of the query may be removed from an interface after the end of the time period (e.g., a window may be closed or removed from an interface).
and replacing an existing indication operable to request execution of a trade with a new indication operable to request refresh of the first order, and upon detecting selection of the new indication,
Lutnick [0302] the matching order may be for a different financial instrument that is substitutable for the first financial instrument.
Lutnick [0304] a trader may be presented with an offer to enter into a trade. The trade may include a trade for the first financial instrument even if the matching order is for a different financial instrument. In other implementations, the trade may include the other financial instrument even if the order is for the first financial instrument. The trader may accept or reject such an offer.
Lutnick [0306] The trade may be for the first financial instrument even though the matching order is for a different financial instrument. In other implementations, the trade may be for the other financial instrument even though the order is for the first financial instrument. Only if an acceptance is received (e.g., though an interface, from the trader, etc.) execution of the trade may be It should be recognized
detecting if the first order remains available for trading, and responsive to detecting that the first order remains available,
Lutnick [0104] a security desired or available to be sold (e.g., long and/or short sale)
Lutnick [0140] may include determining if any matching firm orders are available
executing refresh of display data associated with the first order;
Lutnick [0210] indication to that extent may be transmitted to the participants, in still other embodiments, an originator of the OMS order may be contacted with the updated firm order information
Therefore, the rejection under 35 USC § 103 remains.
Prior Art Cited But Not Applied
The prior art made of record and not relied upon is considered pertinent to applicant's disclosure:
Waelbroeck (“SYSTEMS AND METHODS FOR INCREASING PARTICIPATION OF LIQUIDITY PROVIDERS ON CROSSING SYSTEM”, U.S. Patent Number: US 7996261 B1) enabling a crossing system operator to calculate a rebate payment to a second participant for executing the block order of a first participant based on at least one of: (a) a difference between a benchmark price and an execution price of the block order; (b) total volume of block execution; and (c) an amount that decays exponentially with the time between the first participant's order and the order's execution by a liquidity provider.
Conclusion
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/C.E./Examiner, Art Unit 3695
/CHRISTINE M Tran/Supervisory Patent Examiner, Art Unit 3695
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