DETAILED ACTION
Status of Claims
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
This final Office Action is in response to the amendments filed 16 January 2026.
Claims 1-26 remain cancelled.
Applicant’s amendments to Claim 27, 37-39, and 44 and cancellation of Claims 28-36, and 47-48, and addition of Claim 49 are acknowledged.
Claims 27, 37-46 and 49 are pending and have been examined.
Response to Arguments
Applicant's arguments filed 16 January 2026 have been fully considered but they are not persuasive.
With regard to the rejections under 35 US 101, Applicant argues: (1) That “ … Prior to Applicant's invention, there were no investable "beta" strategies or index products private real asset (e.g. real estate) investment….Thus, the problem solved by aspects of the claimed invention is how to identify, select, and weight fewer than all components of an index fund in a specialized market within a desired tracking error….the underlying problem solved of tracking an weighted index of variables using fewer than all components reflected in the index is analogous to any computer-implemented solution for mimicking, replicating, and modeling within an acceptable tolerance, a first variable (the index) comprised of a large plurality of weighted variable components (component funds), using fewer than all of the components” (Applicant’s response, 10-11) (2) Applicant asserts the claims are analogous to eligible Claim 2 of Example 41. Applicant argues “ … claimed steps for implementing the replication method as claimed cannot be practically performed in the human mind at least because various steps or corresponding programmed instructions require the computer or computer network to access data residing in computer memory (which a human mind cannot do alone, without the assistance of a computer). Furthermore, the complicated calculations required to implement the invention are wholly impractical for calculation by a human mind……Applicant's claimed invention is essentially a tracking and replication model for tracking, within a predetermined amount of tracking error, a variable total market index of assets using a selected subset of assets that satisfy expressly claimed criteria…. sufficiently limits the use of the mathematical concepts as claimed to the practical application of acquiring assets that correspond to the component funds that form the index fund and providing tangible value to holders of shares in the investment fund….” (Applicant’s response, 11-12). (3) Applicant further asserts that the instant recited claims recite “ A model programmed to achieve a statistical threshold that provides a desired margin of tracking error, using fewer than all of the component funds of the index, in accordance with specific rules, is not a "generic, computer component.”….” (Applicant’s response, 12-13). (4) Referencing Fairing Warning and McRO, “… claimed invention, which incorporates a set of rules for replicating an index (OUPTRAI), as claimed, transforms a traditional process for investing in nontraditional, specialized assets with challenging investment requirements (e.g. real asset) into a mathematically automated process executed on computers in which the computer-executed model replicates the OUPTRAI within a predetermined degree of tracking error using fewer than all of the component funds in the index. Just as prior animating processes were "driven by subjective determinations rather than specific, limited mathematical rules," the traditional process for selecting a number of assets for replicating a market index and the process corresponding to the claimed system and method that replicate the index with fewer components, produce their respective results "in fundamentally different ways"….” Applicant asserts that the instant recited claims are “ closer to the claims in McRO than to the claims in cases like FairWarning…” (Applicant’s response, 13-14). (5) Applicant further analogizes the instant claims to the Example 40, Claim 1 as a “particular improvement to data processing.. claims are limited to processing the data using a specific model with specific inputs and rules for replicating stored historical data relating to a plurality of components within a predetermined margin of error using fewer than all of the components, in accordance with a very specific algorithm. Further claim limitations relate to additional data processing managing purchases and redemptions in a manner unique to the attributes of the component funds to avoid disrupting the effective replication….” (Applicant’s response 14-15).
Examiner respectfully disagrees as noted in the previous rejections and the rejection below. The instant amendments broadening the scope of the claims literally recites the broader abstract idea of ‘real assets’. Applicant’s own arguments state that the instant claims are directed to the problem of is “…how to identify, select, and weight fewer than all components of an index fund in a specialized market within a desired tracking error…”. This is not a technological problem. Further as noted in the citation to the Specification, the disclosure and the claims disclose/recite using generic computing elements (Specification pg.15-19, Fig. 4…computer devices… hardware CPU(s)… hardware/physical memory and input/output (UO) interface. Hardware/physical memory may include volatile and/or non-volatile memory …CPU…memory… various methods or processes… modules may reside on a single server …can be implemented on any larger number of computers or on a computer network… may be interconnected by one or more networks in any suitable form.. local area network or wide area network… enterprise network or the Internet…coded as software… computer readable medium, program, software…computer-executable instructions may be in many forms… data structures… ). Thus the recited claims address as business challenge using generic computing elements (which are recited/disclosed at a high level of generality). This is “apply it” (See MPEP 2106.05 (f)) Unlike the patent eligible claims of McRo and Example 40 Claim 1, the instant claims do not improve technology. Rather, at most the claimed invention is an improvement to an abstract idea. The ’traditional process for managing an investment fund’ may be ‘fundamentally different’ from the ‘process for managing an investment fund’ recited in the instant claims, but both are processes for managing an investment fund which is as stated previously and below an abstract idea in the category of organizing human activity. A novel abstract idea is still an abstract idea. Applicant’s arguments are not persuasive.
All dependent claims can be addressed with the same rationale.
Claim Rejections - 35 USC § 112
The following is a quotation of the first paragraph of 35 U.S.C. 112(a):
(a) IN GENERAL.—The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.
The following is a quotation of the first paragraph of pre-AIA 35 U.S.C. 112:
The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.
Claims 27, 37-39 and 44 are rejected under 35 U.S.C. 112(a) or 35 U.S.C. 112 (pre-AIA ), first paragraph, as failing to comply with the written description requirement. The claim(s) contains subject matter which was not described in the specification in such a way as to reasonably convey to one skilled in the relevant art that the inventor or a joint inventor, or for pre-AIA the inventor(s), at the time the application was filed, had possession of the claimed invention. In particular:
Claim 27 recites:
“ real asset private index (RAPIF)” …
“real asset index (OUPTRAI)”
“ index weighting model” ….
“ real asset funds”
wherein the step of weighting the selected component funds includes the steps of:
verifying, using the investor and index valuation module, accuracy of real asset fund valuation data for the plurality of selected component unlisted real asset funds and determining, using the index replication module, that the OUPTRAI is able to be replicated;
determining, using the index weighting model, the weightings necessary to create the RAPIF within the desired tracking error of the OUPTRAI;
adjusting, using the component fund rebalancing module, the real asset fund weightings in the RAPIF based upon real asset fund asset valuation data in order to maintain the desired tracking error;
calculating, using the component fund rebalancing module, amounts of capital required for each of the plurality of selected component real asset funds in order to maintain the weightings for replication of the OUPTRAI within the desired tracking error; and
calculating, using the component fund rebalancing module, amounts of capital required for the selected component unlisted real asset funds required to maintain the unlisted real asset index weightings and an amount of capital necessary for redemptions from the unlisted real asset funds; and
wherein the step of rebalancing the respective fund weightings to meet the index weighting criteria includes the steps of:
ordering the plurality of selected component unlisted real asset funds by the respective fund weightings;
iteratively comparing fund weightings of funds in the ordered plurality of component unlisted real asset funds to verify the respective fund weightings meet the index weighting criteria, which index weightinq criteria requires each component fund by weightinq to be within a percentage index weightinq of a next largest component fund; and
rebalancing the respective weightings to meet the index weightinq criteria, and modifying the index weightinq criteria if the rebalanced weightings cause the RAPIF to exceed the statistical threshold; and
wherein the desired tracking error is less than 12 basis points, the statistical threshold percentage is 90%, and the index weightinq criteria requires each component fund by weighting to be within a 0.5% index weighting of a next largest component fund.
Claims 37-39 and 44 recite RAPIF.
The specification does not describe in the invention in terms of “real assets” nor is a “index weighting model” described. Applicant is requested to provide reference from the original disclosure to support the amendments of:
“ real asset private index (RAPIF)” ;
“real asset index (OUPTRAI)”
“ index weighting model”
“ real asset funds”
wherein the step of weighting the selected component funds includes the steps of:
verifying, using the investor and index valuation module, accuracy of real asset fund valuation data for the plurality of selected component unlisted real asset funds and determining, using the index replication module, that the OUPTRAI is able to be replicated;
determining, using the index weighting model, the weightings necessary to create the RAPIF within the desired tracking error of the OUPTRAI;
adjusting, using the component fund rebalancing module, the real asset fund weightings in the RAPIF based upon real asset fund asset valuation data in order to maintain the desired tracking error;
calculating, using the component fund rebalancing module, amounts of capital required for each of the plurality of selected component real asset funds in order to maintain the weightings for replication of the OUPTRAI within the desired tracking error; and
calculating, using the component fund rebalancing module, amounts of capital required for the selected component unlisted real asset funds required to maintain the unlisted real asset index weightings and an amount of capital necessary for redemptions from the unlisted real asset funds; and
wherein the step of rebalancing the respective fund weightings to meet the index weighting criteria includes the steps of:
ordering the plurality of selected component unlisted real asset funds by the respective fund weightings;
iteratively comparing fund weightings of funds in the ordered plurality of component unlisted real asset funds to verify the respective fund weightings meet the index weighting criteria, which index weightinq criteria requires each component fund by weightinq to be within a percentage index weightinq of a next largest component fund; and
rebalancing the respective weightings to meet the index weightinq criteria, and modifying the index weightinq criteria if the rebalanced weightings cause the RAPIF to exceed the statistical threshold; and
wherein the desired tracking error is less than 12 basis points, the statistical threshold percentage is 90%, and the index weightinq criteria requires each component fund by weighting to be within a 0.5% index weighting of a next largest component fund.
“RAPIF”
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 27, 37-46 and 49 are rejected under 35 U.S.C. 101 because the claimed invention is directed to non-statutory subject matter.
When considering subject matter eligibility under 35 U.S.C. 101, (1) it must be determined whether the claim is directed to one of the four statutory categories of invention, i.e., process, machine, manufacture, or composition of matter. If the claim does fall within one of the statutory categories, (2a) it must then be determined whether the claim is directed to a judicial exception (i.e., law of nature, natural phenomenon, and abstract idea), and if so (2b), it must additionally be determined whether the claim is a patent-eligible application of the exception. If an abstract idea is present in the claim, any element or combination of elements in the claim must be sufficient to ensure that the claim amounts to significantly more than the abstract idea itself. Examples of abstract ideas include fundamental economic practices; certain methods of organizing human activities; an idea itself; and mathematical relationships/formulas. Alice Corporation Pty. Ltd. v. CLS Bank International, et al., 573 U.S. ____ (2014).
The claimed invention is directed to a judicial exception (i.e. a law of nature, a natural phenomenon, or an abstract idea) without significantly more. In the instant case, the claim(s) as a whole, considering all claim elements both individually and in combination, do not amount to significantly more than an abstract idea.
(1) In the instant case, the claims are directed towards a method for contributing and redeeming shares of open end unlisted real estate index fund. In the instant case, Claims 27, 37-46 and 49 are directed to a process.
(2a) Prong 1: Providing novel investment opportunities including real estate investment funds is categorized in/akin to the abstract idea subject matter grouping of: (methods of organizing human activity) [fundamental economic practice / principle and commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations)]. As such, the claims include an abstract idea.
The specific limitations of the invention are (a) identified to encompass the abstract idea include:
27. (Currently Amended) A method for contributing and redeeming shares of open end unlisted real asset private index fund (RAPIF) that replicates an open end, unlisted, private, transparently-reported real asset index (OUPTRAI) within a desired tracking error using investment in fewer than all of the component funds of the OUPTRAI, the method ….functional computational …. functional computational …an index replication…an index weighting model ….an investor and index valuation … a purchase and redemption …of an index transaction …, a pricing … a component fund rebalancing … a …, an index liquidity … and an entry and exit segregation … to perform the steps of:
identifying, using the index replication …, a plurality of component unlisted real asset funds available for individual investment and which allow for investment income to be reinvested for rebalancing,
…, using the data storage … data relating to the identified component unlisted real asset funds ….;
selecting, using the index replication … from the stored data relating to the identified component unlisted real asset funds … a subset of the plurality of the identified component unlisted real asset funds for the RAPIF, the subset of the plurality of component unlisted real asset funds comprisinq at or over a statistical threshold percentage of a weighting matched allocation of the component funds of the OUPTRAI;
determining, using theasset funds by dividing net assets of each selected subset of the plurality of the identified component unlisted real asset fund by a corresponding number of common shares of each selected subset of the plurality of the identified component unlisted real asset funds;
weighting, using the index weightinq model…., the selected subset of the plurality of the identified component unlisted real asset funds to accurately track the OUPTRAI, the weighted selected subset of the plurality of the identified component unlisted real asset funds forming the RAPIF and defining a plurality of respective fund weightings;
executing, using the purchase and redemption …of the index transaction … purchases or positions in a target mix of the selected subset of the plurality of the identified component unlisted real asset funds forming the RAPIF in correspondence to the weightings, and issuing shares in the RAPIF to shareholders in accordance therewith;
determining, using the index liquidity … a liquidity condition of the RAPIF and … a related liquidity condition indicator in the ….
periodically calculating, using the pricing …, real asset pricing data of real assets held by the selected subset of the plurality of the identified component unlisted real asset funds based on a periodic appraisal of the real assets held by the selected subset of the plurality of the identified component unlisted real asset funds, and combining1using the pricing … the real asset pricing data with pricing data related to liquid securities held by the selected subset of the plurality of the identified component unlisted real asset funds for determination of a component fund net asset value;
periodically, more frequently than annually, rebalancing, using the component fund rebalancing …, the respective fund weightings to meet an index weighting criteria, and modifying the index weighting criteria if the rebalanced weightings cause the RAPIF to exceed the desired tracking error of the OUPTRAI;
creating and applying, using the purchase and redemption …, a redemption cap on redemptions of interests in the RAPIF; and
executing, using the purchase and redemption … fund redemptions and contributions based on the stored liquidity condition indicator, including the steps of:
providing, using by the entry and exit segregation … an RAPIF entry queue and attempting to match redemptions with contributions in the RAPIF entry queue;
providing and using, using the entry and exit segregation …a segregation account for transfer of redemption interests in the RAPIF;
comparing, using the purchase and redemption… redemptions to investment requirements in each of the selected subset of the plurality of the identified component unlisted real asset funds to maintain the RAPIF, and processing redemptions without liquidating positions in the selected subset of the plurality of the identified component unlisted real asset funds held by the RAPIF in each of the selected subset of the plurality of the identified component unlisted real estate funds; and
providing, usinq the entry and exit segregation … an RAPIF exit queue for fund redemptions
wherein the step of weighting the selected component funds includes the steps of:
verifying, using the investor and index valuation …, accuracy of real asset fund valuation data for the plurality of selected component unlisted real asset funds and determining, using the index replication …, that the OUPTRAI is able to be replicated;
determining, using the index weighting model, the weightings necessary to create the RAPIF within the desired tracking error of the OUPTRAI;
adjusting, using the component fund rebalancing …, the real asset fund weightings in the RAPIF based upon real asset fund asset valuation data in order to maintain the desired tracking error;
calculating, using the component fund rebalancing…, amounts of capital required for each of the plurality of selected component real asset funds in order to maintain the weightings for replication of the OUPTRAI within the desired tracking error; and
calculating, using the component fund rebalancing …, amounts of capital required for the selected component unlisted real asset funds required to maintain the unlisted real asset index weightings and an amount of capital necessary for redemptions from the unlisted real asset funds; and
wherein the step of rebalancing the respective fund weightings to meet the index weighting criteria includes the steps of:
ordering the plurality of selected component unlisted real asset funds by the respective fund weightings;
iteratively comparing fund weightings of funds in the ordered plurality of component unlisted real asset funds to verify the respective fund weightings meet the index weighting criteria, which index weightinq criteria requires each component fund by weightinq to be within a percentage index weightinq of a next largest component fund; and
rebalancing the respective weightings to meet the index weightinq criteria, and modifying the index weightinq criteria if the rebalanced weightings cause the RAPIF to exceed the statistical threshold; and
wherein the desired tracking error is less than 12 basis points, the statistical threshold percentage is 90%, and the index weightinq criteria requires each component fund by weighting to be within a 0.5% index weighting of a next largest component fund.
As stated above, this abstract idea falls into the (b) subject matter grouping of: (methods of organizing human activity) .
Prong 2: When considered individually and in combination, the instant claims are do not integrate the exception into a practical application because the steps of identifying… selecting… determining.. weighting… executing… issuing… determining… calculating… combining… rebalancing… modifying… creating and applying… executing… providing … providing and using .. comparing… providing…verifying…determining… adjusting… calculating…calculating… ordering.. comparing …rebalancing… modifying… do not apply, rely on, or use the judicial exception in a manner that that imposes a meaningful limitation on the judicial exception (i.e. the abstract idea).
The instant recited claims including additional elements (i.e. storing… storing…) do not improve the functioning of the computer or improve another technology or technical field nor do they recite meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment. The limitations merely recite: “apply it” (or an equivalent) or merely include instructions to implement an abstract idea on a computer or merely uses a computer a as tool to perform an abstract idea or generally link the use of the judicial exception to a particular technological environment or field of use (See MPEP 2106.05 (f) and (g))
(2b) In the instant case, Claims 27, 37-46 and 49 are directed to a process.
Additionally, the claims (independent and dependent) do not include additional elements that individually or in combination are sufficient to amount to significantly more than the judicial exception of abstract idea (i.e. provide an inventive concept). As discussed above with respect to integration of the abstract idea into a practical application, the additional element(s) of: (computer, a computer network,…processor…module(s)… ) merely use a computer as a tool to perform an abstract idea or merely uses generic computing elements to perform well known, routine, and conventional functions. These computing elements are at a high level of generality (See MPEP 2106.05 (d), (f) and (g)) (Specification pg.15-19, Fig. 4…computer devices… hardware CPU(s)… hardware/physical memory and input/output (UO) interface. Hardware/physical memory may include volatile and/or non-volatile memory …CPU…memory… various methods or processes… modules may reside on a single server …can be implemented on any larger number of computers or on a computer network… may be interconnected by one or more networks in any suitable form.. local area network or wide area network… enterprise network or the Internet…coded as software… computer readable medium, program, software…computer-executable instructions may be in many forms… data structures… )
The dependent claims have also been examined and do not correct the deficiencies of the independent claims.
It is noted that claims (37-46 and 49) introduces the additional elements of: various wherein statements further describing elements of the liquidity condition (Claims 37, 38, 41); the redemptions (Claims 39, 46) selected component funds. (Claim 40); temporary limits (Claim 42); sending a notification (Claim 43) and the segregation account (Claims 44, 45).This element is not a practical application of the judicial exception because The limitations merely recite: “apply it” (or an equivalent) or merely include instructions to implement an abstract idea on a computer or merely uses a computer a as tool to perform an abstract idea or merely uses generic computing elements to perform well known, routine, and conventional functions or generally link the use of the judicial exception to a particular technological environment or field of use (See MPEP 2106.05 (f) and (g)) Further these limitations taken alone or in combination with the abstract do not amount to significantly more than the abstract idea alone because, these elements amount to mere use of a computer a as tool to perform an abstract idea or merely add insignificant extra-solution activity to the judicial exception or merely uses generic computing elements to perform well known, routine, and conventional functions. (See MPEP 2106.05 (d), (f) and (g)) (Specification pg.15-19, Fig. 4…computer devices… hardware CPU(s)… hardware/physical memory and input/output (UO) interface. Hardware/physical memory may include volatile and/or non-volatile memory …CPU…memory… various methods or processes… modules may reside on a single server …can be implemented on any larger number of computers or on a computer network… may be interconnected by one or more networks in any suitable form.. local area network or wide area network… enterprise network or the Internet…coded as software… computer readable medium, program, software…computer-executable instructions may be in many forms… data structures… )
Therefore, claims 27, 37-46 and 49 are rejected under 35 U.S.C. 101 as being directed to non-statutory subject matter.
Conclusion
Applicant's amendment necessitated the new ground(s) of rejection presented in this Office action. Accordingly, THIS ACTION IS MADE FINAL. See MPEP § 706.07(a). Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a).
A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory action is mailed, and any nonprovisional extension fee (37 CFR 1.17(a)) pursuant to 37 CFR 1.136(a) will be calculated from the mailing date of the advisory action. In no event, however, will the statutory period for reply expire later than SIX MONTHS from the mailing date of this final action.
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/ASHA PUTTAIA H/Primary Examiner, Art Unit 3691
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