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In re Chorna

Representative Claim

1. A hindsight financial instrument comprising a tracking set of two or more financial instruments that determines a final valuation from a tracking set subgroup selected from the tracking set, the tracking set subgroup comprising no more than less of the financial instruments in the tracking set.

16. A hindsight financial instrument traded on at least one of an organized securities exchange, commodities exchange, exempt board of trade, alternative trading system, voice brokerage system, and “over the counter” system comprising a tracking set of two or more financial instruments that determines a final valuation from a tracking set subgroup selected from the tracking set, the tracking set subgroup comprising no more than less of the financial instruments in the tracking set.

Posture:

Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. 12/029,610.

Abstract Idea: Yes

The Federal Circuit agreed with the PTAB that the claims constitute an abstract idea because they involve contractual claims which, “constituted a fundamental economic practice long prevalent in our system of commerce.” Because the claims enable an investor to hedge against financial risk by employing a hindsight mathematical formula, the Court noted that

“the Supreme Court has held that ‘[h]edging is a fundamental economic practice long prevalent in our system of commerce” and that “[t]he concept of hedging, described in [the asserted claim] and reduced to a mathematical formula in [dependent claims], is an unpatentable abstract idea . . . .’ Bilski, 561 U.S. at 611-12 (internal quotation marks and citation omitted).”

Something More: No

The Federal Circuit also agreed with the PTAB’s Step Two determination that “the method claims do not, for example, purport to improve the functioning of any other technology or technical field. Instead, the claims at issue amount to nothing significantly more than the terms of a contract.” Viewed separately or in combination, using “’a computer [to] receive[] and send[] the information over a network—with no further specification—is not even arguably inventive.’ buySAFE, 765 F.3d at 1355.”