This decision relates to a European patent application that concerns an electronic trading system that provides the trader with real-time execution quality indication. The Board decided that assessing the execution quality of an order or a plurality of orders and providing this information to the trader is not technical. Here are the practical takeaways from the decision T 1453/17 (Real time broker quality indication/NYSE) of 15.6.2021 of Technical Board of Appeal 3.5.01:
The invention concerns an electronic trading system that provides the trader with real-time execution quality indications. Traders typically place orders with brokers who execute the orders. However, the performance of brokers varies. Previously, the traders would be provided such information by “broker report cards” or “league tables”. However, this information was not available in real-time.
The invention introduces an intercept (Message Interceptor) in the electronic data communication between the trader and the broker to record order and execution data. This data is compared with real-time market data to calculate the execution quality in real-time. The result is then provided to the trader.
Claim 1 (main request)
An electronic communication network for securities trading and for providing real time, or near real time, execution quality indications, comprising:
an electronic data connection between a trader and an executing broker for transmission of order information electronically from the trader to the executing broker and for transmission of execution information electronically from the executing broker to the trader;
a message interceptor for without interfering with the data transmissions (a) intercepting in real time or almost real time an electronic order communication from the trader to the broker and accessing order data therefrom and (b) for intercepting in real time or in almost real time an electronic execution communication from the broker to the trader and accessing execution data;
a generic market data source; and
an execution quality calculation module (EQCM) in communication with the generic market data source, the message interceptor and the trader for electronically receiving on a real-time basis market data from the generic market data source, electronically receiving copy order data and copy execution data from the message interceptor, calculating one or more execution qualities corresponding to one or more of said electronic market order executions using said real-time or near real-time market data, and electronically transmitting to the trader information related to the one or more execution qualities for real-time or near real-time quality assessment of the market trade transactions.
Is it patentable?
During the appeal, the appellant first argued that the Comvik approach is not applicable to apparatus claims. The Board did not agree with this argument of the applicant:
2.2 The appellant argued that the Comvik approach should not be used for apparatus claims. The Board does not share this view.
The Comvik approach is not based on merely one decision. It is a practice that has been established over many years by a large number of cases involving inventions of different categories.
The basic principle of the Comvik approach is that non-technical features have no significance in the assessment of inventive step. An apparatus is by definition technical, but that does not mean that every idea that can be implemented on an apparatus solves a technical problem on its own. The Comvik approach ensures that only the features which make a technical contribution count towards inventive step. This applies irrespective of the claim category.
Thus, the Comvik approach applies to apparatus claims and can be applied to claim 1 of the main request.
The Board then identified the distinguishing features over the cited document D1 to assess if they contribute to the technical effect:
2.3 Applying the Comvik approach, the examining division considered that the process of evaluating the quality of a broker’s trading activity, comprising intercepting order and execution information and comparing this information with current market data, was a non-technical business process, and that the technical problem to be solved boiled down to the implementation of the business process on a conventional networked information system such as disclosed in D1. The examining division argued that the implementation would have been a matter of routine for the skilled person, and the provision of data in real time or near real time was considered to be a straightforward effect of the computer implementation.
The applicant argued that the features provide the technical contribution as it provides a real-time assessment, which was not possible at the priority date. However, the Board disagreed with this argument:
2.5 The appellant’s arguments do not persuade the Board. The Board rather agrees with the examining division’s assessment.
The Board agrees with the examining division that assessing the execution quality of an order or a plurality of orders and providing this information to the trader is not technical. The requirement that the information be provided in real time, or at least as soon as possible, is, in the Board’s view, not technical either, as it merely amounts to the abstract wish to have the information available as quickly as possible. In any case, the real time provision of information is, like the examining division said, a mere consequence of the computer automation and not a further technical effect that goes beyond the normal and inevitable effects of using a computer.
The assessment of the execution quality requires information about the order and its execution, as well as relevant market data. This is also part of the non-technical requirements which are given to the skilled person as part of the framework of the technical problem to be solved.
The non-technical requirements need not have been known or obvious at the priority date. If this were a consideration, non-technical features would contribute to inventive step, contrary to the principles of the Comvik approach.
According to the Board, the skilled person starting from document D1 would not be prejudiced against modifying the existing system as there was a tendency towards automation:
2.7 In the Board’s view, the appellant has not demonstrated that there was a widely held prejudice in the art against modifying existing trading systems in a way that could potentially case latency. The documents submitted by the appellant state that low latency was important in trading networks, but that does not necessarily mean that there was a prejudice against modifying them.
In any case, the Board considers that the skilled person would have arrived at the invention even if such a prejudice existed. Given the requirement of providing the execution quality information as quickly as possible, the Board judges that the skilled person would have modified the existing electronic trading system so as to provide such information. At the priority date, there was a strong tendency to automate processes that had previously been performed manually. In the Board’s view, this tendency towards automation would have overridden any latency concern.
Moreover, claim 1 does not include any positive technical features which actually overcome the problem of latency. Claim 1 merely includes a desiderata that the message interceptor operates “without interfering with the data transmission”. The mere desire to overcome a problem is not sufficient to establish an inventive step.
Finally, the Board reiterated the G 1/19 decision and confirmed that the long-standing Comvik approach of the Enlarged Board:
The Enlarged Board of Appeal held that a technical contribution did not require a direct link with physical reality and that technical effects could occur within the computer-implemented process and at the input and output of this process (point 88). The Enlarged Board however refrained from defining “technical”. Moreover, it was not considered possible to define general criteria for assessing whether a computer-implemented invention solved a problem by providing a technical effect that went beyond the implementation of the process on a computer.
Thus, the Enlarged Board of Appeal did not give a generally favourable view on computer-implemented inventions. It rather confirmed the long standing Comvik approach and left the assessment of what is and what is not technical to the technical Boards deciding on the individual cases.
In the present case, this Board does not see any technical effect, whether inside or outside the computer, that goes beyond the implementation of a business method.
2.9 The granted patents in the field of transaction monitoring do not assist the appellant’s case, because the decision to grant a patent is based on a particular set of facts. It is not possible to draw general conclusions from such granted patents, e.g. that all inventions in a particular field provide a technical contribution.
Therefore, claim 1 was considered not to involve an inventive step. Since none of the auxiliary requests could overcome this objection, the appeal is dismissed.
You can read the whole decision here: T 1453/17 (Real time broker quality indication/NYSE) of 15.6.2021 of Technical Board of Appeal 3.5.01.