Stupid Patent of the Month: Trading By Tweet

from the uspto-messing-up-again dept

We've written many times about how the patent system is a poor fit for software. Innovation in the U.S. software industry happens despite, not because of, the thousands of software patents that are granted each year.

But software is not the only industry where patents make very little sense. In the 1990s, the Federal Circuit opened the door to patents on methods of doing business. While the Supreme Court tried to undo some of that damage, financial institutions are still hit with patent lawsuits. Many of these suits come from trolls that don't produce anything. And yet, just as in the tech sector, there are some financial companies that keep heading back to the U.S. Patent and Trademark Office seeking a 20-year monopoly on some tactic or another.

This month, we're highlighting U.S. Patent Number 10,147,140, which was recently granted to BNY Mellon Bank. The first claim of the '140 patent uses a lot of financial jargon to describe an extremely simple process: checking social media for a particular event or statement, then making a trade based on that "investment triggering content." One example of that: making a trade because someone put a hashtag in a tweet.

Even if this was a new product idea or investment strategy, it is not a new invention. The trend of stock market trading has been clear now for decades: automated trading has become faster and more computerized each year. BNY Mellon Bank did not invent computerized trading, social media, or anything else remotely technical. Rather, its patent proposes the idea of trading based on a social media event.

In the patent prosecution documents, the patent examiner even starts out by admitting that "the concept described in claim 1 is not meaningfully different than the economic concept… found by the courts to be an abstract idea." Appropriately, the examiner cited Alice v. CLS Bank, which forbids "do it on a computer"-type patents. Similarly, Alice should clearly forbid patents on very old practices, like trading stocks, and simply adding in "social media monitoring.

But then the examiner goes on to agree with the applicant's specious argument that just because the claim has additional limitations—such as "using a processor to withdraw[] funds from a customer financial account and then purchase shares," and an interface that shows social media information—it becomes eligible. "When viewed as an ordered combination, the additional limitations amount to significantly more than the abstract idea," the examiner concludes, "[t]he idea is patent eligible."

Adding generic computer processes shouldn't have made this patent eligible. So how does it happen? One big problem is that incentives in the patent application process line up to favor the granting of patents. Patent examiners are graded through a "count" system that gives them progressively less credit as persistent applicants file new amendments, arguments, requests for continued examination, and continuation applications. This system makes it impossible for the Patent Office to ever finally reject an application. There is only one way for the Patent Office to get rid of a persistent applicant: give them a patent.

In this case, the BNY Mellon's lawyers essentially just pounded their fists on the table. They offered nothing more than the bare insistence that the patent included an "ordered combination," and that should negate the Alice rules. "There was no showing that the combination as a whole failed to provide an inventive concept," wrote the applicants. The examiner simply gave up and issued a patent that is plainly ineligible under Alice and many other cases.

We've written before that the Patent Office needs to do a better job applying Alice. Unfortunately, the new Director appears to want the opposite. Other lobbyists are pushing for legislation to undo Alice entirely. If they get their way, we can expect another flood of silly patents on business methods and software.

Reposted from the EFF's Stupid Patent of the Month series.

Filed Under: patents, software patents, stock trading, stupid patent of the month


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  • identicon
    Anonmylous, 27 Dec 2018 @ 7:55pm

    Erm...

    How is this not simply a form of buy/sale condition with your broker based on a market condition? Secondly, aren't automated buy/sale processes based on Twitter feeds what cause at least 3 market mini-crashes before the high-speed AI traders realized Twitter is full of shitposting trolls?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 28 Dec 2018 @ 5:16am

      Re: Erm...

      Every time the market makes a correction everyone tries to blame the wind, the computer software, twitter, facebook, etc...

      Markets make corrections because people cash out. Markets don't just go up in a straight line. The market went up too fast for too long, it's bound to go down sometimes. Why is it such a surprise that markets don't go up in a straight line?

      reply to this | link to this | view in chronology ]

      • identicon
        Anonmylous, 28 Dec 2018 @ 7:34am

        Re: Re: Erm...

        Oh I know, but I was referring to the specific instances where the high-speed trading algorithms got trolled by fake Twitter news as an example of why this patent is even dumber than it sounds.

        reply to this | link to this | view in chronology ]

  • icon
    Anonymous Anonymous Coward (profile), 27 Dec 2018 @ 7:56pm

    Insanity here, get your insanity here

    Wall Street has insantity for sale

    Unless one is a) super rich and b) risk sympathetic, why would one want to trade stocks on the quasi truthful information posted on Twitter?

    The first qualification needs to be was the tweet authentic?

    Then one needs to know if the tweet was truthful?

    Then one needs to know if that tweet would be helpful or harmful to the stock in question?

    Then one needs to know if that helpful/harmful is short term or long term?

    Then one needs to know how short is short term and how long is long term?

    Then one need s to know how big a gamble any trading on that stock might be?

    Regardless of the patentability of this application, what would make anyone think that some tweet or another might be a reason to trade, and incur such costs that come along with such trading?

    One would think that investors take more into there trading decisions than mere tweets. Then again, there is programmed trading...and who knows what is in those algorithms.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 27 Dec 2018 @ 9:14pm

    Guys, I think we found out_of_the_blue!

    reply to this | link to this | view in chronology ]

    • This comment has been flagged by the community. Click here to show it
      identicon
      Anonymous Coward, 28 Dec 2018 @ 12:09pm

      Re:

      For those new to the site, "blue" and "out_of_the_blue" refer to those arrogant commentors who pay for the privilege of putting their deathless wit in Techdirt's unique "First Word" and "Last Word", the highlighting done by hyper-links (hence the name "out of the blue"), usually large and always annoying. You see those only rarely because reviled.

      reply to this | link to this | view in chronology ]

  • identicon
    Jerf, 27 Dec 2018 @ 9:58pm

    Meta-Troll

    If business practices are patentable then why doesn’t someone just patent the practice of being a patent troll?

    reply to this | link to this | view in chronology ]

  • identicon
    Duckson Robworth, 27 Dec 2018 @ 10:31pm

    Spuriouser and spuriouser...

    said Alice.

    Chapter One - Down the Mellon Bank BuNnY Hole

    reply to this | link to this | view in chronology ]

  • identicon
    Michael, 28 Dec 2018 @ 6:59am

    "[t]he idea is patent eligible."


    Umm...we don't patent ideas in the US, we patent inventions.

    reply to this | link to this | view in chronology ]

  • icon
    Mason Wheeler (profile), 28 Dec 2018 @ 7:24am

    In the 1990s, the Federal Circuit opened the door to patents on methods of doing business. While the Supreme Court tried to undo some of that damage, financial institutions are still hit with patent lawsuits. Many of these suits come from trolls that don't produce anything.

    Patent trolls on one side, Wall Street on the other. This is another one of those "I don't know which one to root for" scenarios.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 28 Dec 2018 @ 9:30am

      Re:

      financial institutions are still hit with patent lawsuits. Many of these suits come from trolls that don't produce anything

      Yeah. Two groupings which don't actually produce anything. Color me surprised.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 28 Dec 2018 @ 9:34am

    One example elon musk,s tweet re going private ,stock at 420,
    https://gizmodo.com/elon-musk-claims-420-tweet-with-20-million-sec-fine-wa-1830050362
    Maybe every message on twitter is not totally reliable ,
    or a good source to base investments decisions on.
    I despise all patent trolls they patent basic idea,s then just wait to sue some company who does actual work or produce a product .
    The patent office is under pressure to give out patents even if the idea,s are pointless stupid or
    obvious to anyone in business .

    reply to this | link to this | view in chronology ]

  • icon
    Augustina742 (profile), 4 Jan 2019 @ 8:43pm

    apkjunky

    If business practices are patentable then why doesn’t someone just patent the practice of being a patent troll?
    https://www.apkjunky.com/

    reply to this | link to this | view in chronology ]


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