Obviousness

Obviousness Analysis of U.S. Patent 11,620,701 under 35 U.S.C. § 103

This analysis identifies combinations of prior art references that would render the independent claims (Claim 1 and Claim 8) of U.S. Patent 11,620,701 obvious to a person having ordinary skill in the art (PHOSITA) as of its priority date of April 18, 2007.

The background section of US11620701 explicitly states a problem in existing trading systems: "the currency conversion is not at a transactional level. There is a great need for an improved system which performs currency conversion on a transactional level so that a trader or investor knows exactly what profit or loss may occur with a transaction." The patent further details the issue with bulk amount conversions at a "later time," leading to uncertainty. Thus, a PHOSITA would be motivated to develop systems that provide real-time, transactional-level currency conversion for displaying prices and executing trades to give traders more certainty regarding their financial outcomes.

Core Elements of Independent Claims 1 and 8

The independent claims of US11620701 focus on a platform that:

1. Provides a three-tier architecture: A trading server coupled to a client machine, a currency exchange server, and a market exchange server. (Claim 1)
2. Allows a user to select a preferred currency (first currency): And displays costs/fees for an asset (traded in a second currency) in this preferred currency. (Claim 1)
3. Dynamically updates displayed costs/fees: These updates are based on a "first prevailing exchange rate" and occur even if the asset's market value remains unchanged. (Claim 1)
4. Executes a transaction using a "second prevailing exchange rate": This second rate is calculated right before the transaction takes place. (Claim 1)
5. Results in a settlement where executed costs/fees are not identical to displayed costs/fees: This non-identity is due to the difference between the first and second prevailing exchange rates. (Claim 1)
6. Monitors conditions for conditional orders: Periodically checking with an updated market value and an updated prevailing currency exchange rate calculated right before the transaction. (Claim 2, which depends on Claim 1, and Claim 10, which depends on Claim 8).

Prior Art Combination: Rude (US20060095361A1) in view of Chait (US20070043648A1) and Currenex (Non-Patent Citations)

1. Rude (US20060095361A1): Methods and apparatus for automatic settlement of foreign securities trades in trader's operating currency

• Three-tier architecture and preferred currency display: Rude discloses a system that automatically settles foreign securities trades in a "trader's operating currency." This "operating currency" is directly analogous to the "preferred currency" (first currency) of US11620701. Rude's system involves components that would logically interact with market exchanges (for securities) and currency exchanges (for conversion), implying a multi-tier architecture to facilitate trading and settlement in a preferred currency. Rude aims to reduce "foreign exchange exposure and the costs associated with converting currencies", which a PHOSITA would understand necessitates real-time or near real-time currency conversion for accurate cost presentation and settlement.
• Transactional-level conversion for settlement: The core of Rude is "automatic settlement of foreign securities trades" in the trader's operating currency, suggesting that currency conversion is integrated into the trade settlement process rather than being a separate, bulk conversion.

2. Chait (US20070043648A1): Foreign exchange trading platform

• Dynamic display of prices with real-time exchange rates: Chait discloses a foreign exchange trading platform designed to display currency prices dynamically. Specifically, Chait emphasizes "real-time exchange rates" for trading, which inherently means that displayed prices would update with changes in exchange rates. A PHOSITA would understand that a trading platform, whether for currencies or assets, benefits from displaying up-to-date pricing to users.
• Distinction between display rates and execution rates: While Chait primarily focuses on FX trading, it operates on the principle of providing traders with information to make execution decisions. It is inherent in real-time trading systems, particularly those involving foreign exchange, that the displayed price might differ from the price at which a transaction is ultimately executed due to market fluctuations and the minuscule delay between order placement and execution. A PHOSITA would be aware of the "slippage" or difference between quoted and executed prices in fast-moving markets.

3. Currenex (Non-Patent Citations): Multi-Bank Web-Based FX Trading System

• Web-based trading with real-time rates: The Currenex platform, described in the non-patent literature from 2000, was a "Multi-Bank Web Based FX Trading System" that "accelerat[ed] the transformation of the FX marketplace into the world of ecommerce." This system would necessarily have provided real-time currency exchange rates and displayed prices to users over a network, dynamically updating them to reflect market conditions. It also facilitated foreign currency exchange transactions over a network, implying mechanisms for both displaying current rates and executing trades at prevailing rates.

Motivation to Combine and Obviousness

A PHOSITA, faced with the known problem of currency exchange rate uncertainty in international asset trading (as described in the background of US11620701 [0004-0005]), would have been motivated to combine the teachings of Rude, Chait, and Currenex to create the claimed platform.

1. Combining Rude's transactional settlement in preferred currency with Chait/Currenex's dynamic display: Rude provides the core concept of settling foreign securities trades in a trader's operating/preferred currency. However, Rude does not explicitly detail the dynamic display of costs and fees prior to a transaction. Chait and Currenex clearly demonstrate web-based platforms for dynamically displaying real-time exchange rates and facilitating trading. A PHOSITA would naturally combine these concepts: if trades are to be settled in a preferred currency, it is highly desirable and a logical extension to display the projected costs and fees in that same preferred currency, dynamically updating them with current exchange rates, to provide the "certain knowledge of what profit or loss he was going to get" that US11620701 highlights as lacking in prior systems.

2. Distinguishing between display rates and execution rates: The concept of dynamically updating displayed prices (a "first prevailing exchange rate") from Chait and Currenex, combined with Rude's transactional settlement, would inevitably lead to a situation where the displayed rate might differ from the rate at the exact moment of execution (a "second prevailing exchange rate"). This difference is an inherent characteristic of real-time electronic trading in volatile markets. A PHOSITA would recognize that to provide the most accurate settlement, the exchange rate must be captured as close as possible to the transaction execution time. The observation that "executed costs and fees in the settlement per the second prevailing exchange rate are not identical to the displayed costs and fees with the first prevailing exchange before the transaction of the asset took place" (Claim 1) is not an inventive step but an expected outcome of combining dynamic display with real-time execution in a fluctuating currency market.

3. Conditional orders (Claims 2 and 10): The concept of conditional orders (e.g., limit orders) is well-known in trading. Integrating dynamic exchange rates into the condition checking mechanism (e.g., "conditions are periodically checked with respect to an updated market value of the asset and an updated prevailing currency exchange rate calculated from the at least one currency exchange server right before the transaction takes place" as in Claim 2 and 10) would be obvious to a PHOSITA. If a system can display prices dynamically based on exchange rates (Chait, Currenex) and settle in a preferred currency (Rude), it would be a straightforward engineering task to apply these dynamic rates to conditional order logic, ensuring the condition is met using the most current available data. This directly addresses the problem of "uncertainty in currency conversion" impacting the ultimate profit or loss when an order condition is met.

Therefore, a PHOSITA, motivated to address the known problem of currency rate uncertainty in international asset trading, would find it obvious to combine the dynamic, real-time currency display and transaction capabilities of Chait and Currenex with Rude's system for settling foreign security trades in a trader's preferred currency. This combination inherently leads to a platform that displays dynamically updated costs/fees in a preferred currency and settles transactions at a real-time exchange rate, where the two rates may differ due to market fluctuations.