DETAILED ACTION
Notice of Pre-AIA or AIA Status
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
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 1-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to a judicial exception (abstract idea) without significantly more.
Analysis
Claim 8: Ineligible.
The claim recites a series of acts. The claim is directed to a process, which is a statutory category of invention (Step 1: YES).
The claim is analyzed to determine whether it is directed to a judicial exception. The claim recites the steps of securities planning module executing on a processor in an external system separate from a distribution ledger defining a structure of a security for selling a first round of shares at a first price and one or more subsequent rounds of shares wherein each subsequent round is sold at a higher price than the price of a previous round by establishing a target amount to be raised, identifying variables and ranges of acceptable values for the variables, modeling alternative values of one or more individual variables and combination of variables, and evaluating the multiple alternative values to select one or more sets of variables that meet targets for the first round and the one or more subsequent rounds, the securities planning module being configures to maintain confidential pre-issuance valuation data inaccessible to investor nodes on the distributed ledger; and transmitting the structure of the security to an administration model; the administration module executing on a processor in the external system transmitting an offering of the security to a plurality of nodes associated with a plurality of users of the distributed ledger; receiving one or more first bids for shares in the first round of sales of the security from one or more first investors; determining that a first threshold of capital is raised and closing availability of the first round of shares; providing a second round of shares for sale to one or more second investors after the first threshold is reached; receiving one or more second bids for one or more shares of the second round of shares from one or more second networked nodes corresponding to the one or more second investors; determining a fractional amount of the shares of the first round to allocate to the one or more first investors based on the one or more first bids and a fractional amount of the shares of the second round to allocate to the one or more second investors based on the one or more second bids; allocating the fractional amount of the shares of the first round to the one or more first investors and the fractional amount of shares of the second round to the one or more second investors; transmitting instructions to a financial transaction module to collect payments from the one or more first investors and the one or more second investor and disburse payments to a seller of the security; transmitting as transactions, the bids for the one or more shares of the first round of shares and the one or more shares of the second round of shares, allocated shares of the first round of shares and the second round of shares, and information corresponding to the one or more first investors and the one or more second investors in the distributed ledger, wherein each transaction comprises compiled code corresponding to a smart contract to a special receiver address on the distributed ledger, each smart contract comprising immutable self-executing code configured to execute in response to one or more conditions; wherein the self-executing code of each smart contract is configured to: detect recordation of bids for the one or more shares of the first round of shares and the one or more shares of the second round of shares, allocated shares of the first round of shares and the second round of shares, and information corresponding to each first investor and each second investor in the distributed ledger; generate a first set of terms and conditions between each first investor and the seller of the security based at least in part on a determination that each first investor corresponds to the first round, the smart contract being configured to communicate with the one or more first networked nodes corresponding to the one or more first investors to initialize the first set of terms and conditions; and generate a second set of terms and conditions different from the first set of conditions between each second investor and the seller of the security based at least in part on a determination that each second investor corresponds to the second round, the smart contract being configured to communicate with the one or more second networked nodes corresponding to the one or more second investors to initialize the second set of terms and conditions. These limitations as recited, but for the use of smart contracts in a distributed network, as well as the use of various modules, are processes that, under its broadest reasonable interpretation, can be performed as a mental process (that is, “observation, evaluation, judgement, opinion”), or in the alternative, the organizing human activity in the form of fundamental business practice. These limitations fall under the “mental processes” and/or “certain methods of organizing human activity” groups (Step 2A1-Yes).
Next, the claim is analyzed to determine if it is integrated into a practical application. Here, the claim recites additional elements of generic computer components such as nodes and computing modules (processors and memories) that uses smart contract in a distributed networked system. The generic computer components in the steps are recited at a high level of generality, i.e., as generic processors performing generic computer functions. Using a smart contract in distributed networked system is mere extra-solution activity. These generic processors limitations are no more than mere instructions to apply the exception using generic computer component in a distributed networked platform/environment. The distributed network limitation including having the modules separated from the distributed ledger and communicating via another node through a separated network are simply field of use that are attempts to limit the abstract idea to a particular technological environment. Accordingly, these additional elements do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea. The claim is directed to the abstract idea (Step 2A2-No).
Next, the claim is analyzed to determine if there are additional claim limitations that individually, or as an ordered combination, ensure that the claim amounts to significantly more than the abstract ideas (whether claim provides inventive concept). As discussed with respect to Step 2A2, the additional elements in the claim amounts to no more than mere instructions to apply the exception using generic computer components. The same analysis applies here in Step 2B, i.e., mere instructions to apply an exception using generic computer components cannot integrate a judicial exception into a practical application at Step 2A or provide an inventive concept in Step 2B. Because the steps of using smart contract in distributed networked platform was considered to be extra-solution activities in Step 2A, it is re-evaluated in Step 2B to determine if they are more than what is well-understood, routine and conventional in the field. The disclosure does not provide any indication that the use of smart contract (data) is anything but conventional process and Nugent (USPAP 2017/0287068) at paragraph 0002 and Leidner et al. (USPAP 20180082390) at paragraphs 0002, indicate that the step of using smart contract in a distributed ledger system is well-understood, routine and conventional in the field (as they are here). Accordingly, a conclusion that the step of using smart contract in a decentralized ledger system is well-understood, routine and conventional activity is supported under Berkheimer option 3.
Viewing the limitations as an ordered combination does not add anything further than looking at the limitations individually. When viewed either individually, or as an ordered combination, the additional limitations do not amount to a claim as a whole that is significantly more than the abstract idea itself. Therefore, the claim does not amount to significantly more than the recited abstract idea (Step 2B: NO). The claim is not patent eligible.
Claims 9 and 15 recite a corresponding system and non-transitory computer readable medium claim equivalent of claims 8. This claim is similarly rejected under the same rationale as claim 8, supra.
Claims 1-7 recite wherein each share in the first round is available for purchase by the one or more first investors at a first fixed price, wherein the first round of shares at the first fixed price become unavailable when the first threshold of capital is raised, and wherein each share in the second round is available for purchase by the one or more second investors at a second fixed price, the second fixed price being greater than the first fixed price associated with the first round of shares, and further wherein the one or more first investors have an option to offer their first shares for sale at the greater price; wherein the second round of shares are available for investment by the one or more second investors until a second threshold of capital is raised; wherein the first threshold of capital represents a first percentage of a target valuation of a company seeking capital; wherein the second threshold of capital represents a second percentage of a target valuation of the company; wherein the first and second thresholds represent 100% of the target valuation of the company; wherein the method includes a third round of shares of equity at a third price, the third price being greater than the second price associated with the second round of shares; wherein the third round of shares are available only when a second threshold of capital is raised, and further wherein the first and second investors each have the option to trade their shares to investors at the third price.
These limitations further narrow the abstract idea, but are nonetheless part of the abstract idea identified in claim 8. They also neither include any additional elements that integrates the abstract idea into a practical application, nor amount to significantly more than the abstract idea. The claims are similarly rejected under the same rationale as claim 8, supra.
Claims 10 and 16 recite wherein each share in the first round is available for purchase by one or more first investors at a first fixed price, wherein the first round of shares at the first fixed price become unavailable when the first threshold of capital is raised, and wherein each share in the second round is available for purchase by the one or more second investors at a second fixed price, the second fixed price being greater than the first fixed price associated with the first round of shares, and further wherein the one or more first investors have an option to offer their first shares for sale at the greater price.
These limitations further narrow the abstract idea, but are nonetheless part of the abstract idea identified in claims 8, 9 and 15. The additional elements are as addressed in above. They also do not amount to significantly more than the abstract idea. The claims are similarly rejected under the same rationale as claims 8, 9 and 15, supra.
Claims 11-14 and 17-20 recite wherein the first threshold of capital represents a first percentage of a target valuation of a company seeking capital; wherein the second round of shares are available for investment by the one or more second investors until a second threshold of capital is raised; wherein the second threshold of capital represents a second percentage of a target valuation of the company; providing a third round of shares at a third price, the third price being greater than the second price associated with the second round of shares, wherein the third round of shares are available only when the second threshold of capital is raised.
These limitations further narrow the abstract idea, but are nonetheless part of the abstract idea identified in claims 8, 9 and 15. The additional elements are as addressed in above. They also do not amount to significantly more than the abstract idea. The claims are similarly rejected under the same rationale as claims 8, 9 and 15, supra.
Response to Arguments
Applicant's arguments filed 2/10/2026 have been fully considered but they are not persuasive.
Applicant’s rebuttal of Examiner’s reliance on Nugent and Leidner is noted.
As a preliminary matter, Examiner did not indicate that those references teach those features. Those references were not used to assert that the claimed “architecture” was conventional. Rather, Examiner simply used those references to assert that the use of smart contract in distributed ledger is well known, routine, and conventional (see MPEP 2106.05(d)), after determining that that the use of smart contract in distributed ledger is mere extra-solution activity (under Steps 2A2 and 2B).
In particular, Applicant asserts both references fail to teach certain features.
In particular, Applicant asserts that Nugent/Leidner fails to teach:
Multi-round, incrementally-priced securities funding
A securities planning module that defines the structure of a security
A separate external system that maintains confidential pre-issuance valuation data inaccessible to investor nodes on the distributed ledger
A central authority node that mediates communication between the external system and the distributed ledger.
Examiner respectfully disagrees. For items [1] and [2], the securities funding method, and the defining of the structure of a security are part of the identified abstract idea.
For [3] and [4], these simply defines a conventional network environment that restricts access to certain nodes. The “central authority node” is just an intermediary between the external system and the distribution ledger.
These features do not constitute any improvement to technology or technical field, and so do not integrate the abstract idea into a practical application.
Applicant argues that Examiner’s reliance on the prior art fails under Berkheimer.
Examiner respectfully disagrees. The reliance on prior art is based on the general concept of using smart contracts in distributed ledger which can be applicable to any field of art or endeavor. It does not have to be specific to the exact use (or field of use) as claimed in the limitations.
Applicant argues that the claims recite a specific, non-conventional system architecture.
Examiner respectfully disagrees. As analyzed in the rejection, Examiner maintains that the system architecture as recited in the claims is not an improvement to technology or technical field.
Applicant citation of Enfish and Bascom is noted.
The claims here are unlike the claims in Enfish. There, the Court relied on the distinction made in Alice between, on one hand, computer-functionality improvements and, on the other, uses of existing computers as tools in aid of processes focused on “abstract ideas” (in Alice, as in so many other § 101 cases, the abstract ideas being the creation and manipulation of legal obligations such as contracts involved in fundamental economic practices). Enfish, 822 F.3d at 1335–36; see Alice, 134 S. Ct. at 2358–59. That distinction, the Supreme Court recognized, has common-sense force even if it may present line-drawing challenges because of the programmable nature of ordinary existing computers. In Enfish, the Court applied the distinction to reject the § 101 challenge at stage one because the claims at issue focused not on asserted advances in uses to which existing computer capabilities could be put, but on a specific improvement—a particular database technique—in how computers could carry out one of their basic functions of storage and retrieval of data. Enfish, 822 F.3d at 1335–36; see Bascom, 2016 WL 3514158, at *5; cf. Alice, 134 S. Ct. at 2360 (noting basic storage function of generic computer). The present case is different: the focus of the claims is not on such an improvement in computers as tools, but on certain independently abstract ideas that use computers as tools.
In the instant case, the claims’ invocation of nodes, modules, processors, networks (distributed ledger) do not transform the claimed subject matter into patent-eligible applications. The claims at issue do not require any nonconventional computer, network, or display components, or even a “non-conventional and non-generic arrangement of known, conventional pieces,” but merely call for performance of the claimed information collection, analysis, and display functions “on a set of generic computer components” and display devices. Bascom, 2016 WL 3514158, at *6–7.
Nothing in the claims, understood in light of the specification, requires anything other than conventional computer, network technology. The Courts have repeatedly held that such invocations of computers and networks that are not even arguably inventive are “insufficient to pass the test of an inventive concept in the application” of an abstract idea. buySAFE, 765 F.3d at 1353, 1355; see, e.g., Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1324–25 (Fed. Cir. 2016); Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1370 (Fed. Cir. 2015); Internet Patents, 790 F.3d at 1348–49; Content Extraction, 776 F.3d at 1347–48.
Conclusion
The prior art made of record and not relied upon is considered pertinent to applicant's disclosure.
Papa et al (USPAP 2020/0380604) teaches real time equity financing planner (0095).
THIS ACTION IS MADE FINAL. 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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/OLABODE AKINTOLA/Primary Examiner, Art Unit 3691