Notice of Pre-AIA or AIA Status
The present application is being examined under the pre-AIA first to invent provisions.
DETAILED ACTION
Continued Examination under 37 CFR 1.114
A request for continued examination under 37 CFR 1.114, including the fee set forth in 37 CFR 1.17(e), was filed in this application after final rejection. Since this application is eligible for continued examination under 37 CFR 1.114, and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114. Applicant's submission filed on 17 March 2026, has been entered.
The following is a Non-Final office action on the merits in response to the communications filed on 17 March 2026. Claims 13-15 have been canceled. Claims 1-12 are currently pending. The rejection under 35 USC § 101 directed to non-statutory subject matter is maintained. The rejections are as stated below.
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 1-12 are rejected under 35 U.S.C. 101 because the claimed invention is directed to non-statutory subject matter. In particular, claims are directed to a judicial exception (abstract idea) without significantly more.
Claim 1 (exemplary) recites a series of steps describing the abstract idea of conducting a plurality of trades.
The claim is directed to a method which is one of the statutory categories of invention.
The claim is then analyzed to determine whether it is directed to a judicial exception. The claim recites the limitations of receiving first information about a portfolio of a pricing entity; receiving from the first trader, a request for a quote for transacting a plurality of different trading products, the request comprising a plurality of prices for a plurality of orders, each order defining a trading product, a respective quantity of the respective trading product, and a buy/sell side of the first trader; responsive to the request for a quote, determining a first quote for transacting all of the plurality of orders based on the received information about the portfolio of the pricing entity, the first quote being a firm quote that is immediately executable against the pricing entity; wherein the determining of the first quote comprises determining a first tracking error on the portfolio of the pricing entity that would result if the pricing entity filled a first of the plurality of orders, determining a premium on one or more of the first of the plurality of orders that would reduce the first tracking error, determining a second of the plurality of orders corresponding to a second tracking error that would result if the pricing entity filled the second of the plurality of orders, wherein the first tracking error and the second tracking error at least partially offset one another, and reducing the premium on the one or more of the first of the plurality of orders by an amount corresponding to the second tracking error, updating the first quote based on changes in market conditions and changes in the portfolio of the pricing entity; communicating the first quote to the first trader; receiving a request to execute the first quote, in which the pricing entity does not receive any information indicating the existence of the request for quote or the first quote before the request to execute the first quote is received; and responsive to the request to execute, causing a plurality of trades to be transacted between the first trader and the pricing entity such that the plurality of orders of the first trader are filled by the pricing entity; wherein determining and updating the first quote are performed in an encrypted manner keeping algorithms used and the received first information about the portfolio of the pricing entity from the first trader, wherein updating the first quote comprises: communicating in an encrypted manner with a second computing device behind a second trader's firewall; and updating the first quote based on a collective execution of the first trader's orders and orders of the second trader; wherein encryption keeps information about the second trader's existence, identity, and orders from the first trader.
The claimed process simply describes series of steps for conducting a plurality of trades. These claim elements are considered to be abstract ideas because they are directed to a method of organizing human activity which includes fundamental economic principles or practices (including mitigating risk), commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing, or sales activities or behaviors; business relations), and managing personal behavior or relationships or interactions between people (including following rules or instructions). Conducting a trade is well-established and long prevalent in our history of commerce and hence directed to a fundamental economic practice. If a claim limitation, under its broadest reasonable interpretation, covers concepts performed under fundamental economic principles or practices, commercial or legal interactions (including agreements in the form of contracts; legal obligations; or sales activities or behaviors), then it falls within “a method of organizing human activity”. Therefore, it is clear that exemplary independent claim 1 recites limitations that fall under the category of abstract ideas related to “certain methods of organizing human activity”. See MPEP § 2106.04(a)(2).
Accordingly, independent claim 2 recites an abstract idea.
Next, the claim is analyzed to determine if it is integrated into a practical application. The recited judicial exception may be integrated into a practical application by identifying whether there are any additional elements recited in the claim beyond the judicial exception and evaluating those additional elements individually and in combination to determine whether they integrate the exception into a practical application. The claim recites additional limitation a plurality of computing devices and a processor and a memory, wherein the first computing device is located behind a firewall of the first trader and a second computing device behind a second trader's firewall which are recited at a high level of generality and are described in the specification as a general-purpose computer ([0055], [0092] - [0094]) to perform the claimed steps. The processor in the steps is recited at a high level of generality, i.e., as a generic processor performing a generic computer function of processing data. This generic processor limitation is no more than mere instructions to apply the exception using generic computer component. Also, these limitations are an attempt 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.
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 above, the recitation of the claimed limitations amounts to mere instructions to implement the abstract idea on a computer (using the computer as a tool to implement the abstract idea). Taking the additional elements individually and in combination, the processor at each step of the process performs purely generic computer functions. As such, there is no inventive concept sufficient to transform the claimed subject matter into a patent-eligible application. The same analysis applies here, i.e., mere instructions to apply an exception using a generic computer component cannot integrate a judicial exception into a practical application at or provide an inventive concept.
In Step 2B, we determine if using encryption to protect sensitive data is more than what is well-understood, routine and conventional in the field. See MPEP § 2106.05(d)” (See MPEP 2106.05(II)). The disclosure does not provide any indication that the use of encryption to protect sensitive data is anything but conventional process (see Applicant’s specification paragraphs [0050 and 0384] and Peckover (US 20100005509 A1) at paragraph [0011] and Evans (US 20030159030 A1) at paragraphs [0003], indicate that using encryption to protect sensitive data is well-understood, routine and conventional in the field (as they are here). Accordingly, a conclusion that the step of using encryption to protect sensitive data 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 significantly more than the abstract idea itself. Therefore, the claim does not amount to significantly more than the recited abstract idea. Therefore, the claim is not patent eligible.
The analysis above applies to all statutory categories of invention including claims 1, 6 and 12. Furthermore, dependent claims 2-5 and 7-11 do not resolve the issues raised in the independent claims.
The dependent claims do not add limitations that meaningfully limit the abstract idea. Dependent claims 2-5 and 7-11, recite additional limitations and steps such as, a firm quote for transacting all of the plurality of orders, a net price that would be transferred between the first trader and the pricing entity in order to execute the plurality of orders, receiving, updated information about the portfolio of the pricing entity reflecting the plurality of trades, receiving a second request for a second quote; and responsive to receiving the second request for the second quote, determining the second quote based in part on the updated information. These limitations further define the abstract idea. Therefore, they are rejected under the same rational of claim 1 above.
dependent claims repeat the additional elements (the first computing device), which is addressed above under integration to a practical application and inventive concept. The additional elements are simply steps performed by a generic computer. The claim merely amounts to the application or instructions to apply the abstract idea on a processor, and is considered to amount to nothing more than requiring a generic processor to merely carry out the abstract idea itself. Accordingly, the 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.
The dependent claims do not impart patent eligibility to the abstract idea of the independent claims. Therefore, none of the dependent claims alone or as an ordered combination add limitations that qualify as integrating the abstract idea into a practical application or amounts to significantly more than the abstract idea itself.
Accordingly, claims 1-12 are rejected as ineligible for patenting under 35 U.S.C. 101 based upon the same analysis.
Response to Arguments
Applicant's arguments with respect to 35 USC § 101 directed to non-statutory subject matter been fully considered but they are not persuasive.
Examiner respectfully disagrees. Claims 1-12 are rejected under 35 U.S.C. 101 because the claimed invention is directed to a judicial exception (abstract idea) without significantly more.
Examiner incorporates herein the response to arguments from the previous office actions.
The proposed amendments do not overcome the 35 U.S.C. 101 rejection. Applicant amended the claims to include the above-mentioned steps. The same updated analysis applies to the newly added claimed limitations as discussed above and in the previous office action rejections.
Moreover, the Examiner respectfully disagrees with Applicant’s assertion that “… The use of encryption within the pricing module significantly improves the technology of the computing devices hosting the pricing modules to improve the trading environment by securing anonymity even between traders whose orders are "collectivized." Executing a basket of trades while keeping the underlying data and pricing algorithms secret is a novel approach to market trading…”. Examiner notes that preserving anonymity while executing a basket of trades is an improvement to an abstract idea of conduction a trade and not to the technology or any of the additional elements. The algorithm may be a technical element but, it does not result in a technical improvement. Instead, it provides an improvement to an abstract idea itself. Improvement to the abstract idea does not integrate the abstract idea into a practical application and thus does not make the claim patent eligible. Examiner notes that the focus of the claimed invention in the present application is not on an improvement in computers as tools, but on certain independently abstract ideas that use computers as tools.
As mentioned previously, '[t]he "novelty" of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the § 101 categories of possibly patentable subject matter." Intellectual Ventures I LLC V. Symantec Corp., 838 F.3d 1307, 1315 (Fed. Cir. 2016) ("[T]he jury's general finding that [the defendant] did not prove by clear and convincing evidence that three particular prior art references do not disclose all the limitations of or render obvious the asserted claims does not resolve the question of whether the claims embody an inventive concept at the second step of Mayo/Alice."). Accordingly, the claim elements individually and as a whole do not provide significantly more than the abstract idea.
The claims here do not recite an improvement in computers. The claims do not improve the functioning of the computer, or solve any technological problem. Rather, the claim simply “includes instructions to implement an abstract idea on a computer” and “does no more than generally link the use of a judicial exception to a particular technological environment or field of use”. The claim uses generic computer components and generic computer functionality to manage trades. The claims merely use instructions to implement the abstract idea on a computer or, alternatively, merely uses a computer as a tool to perform the abstract idea. Here, the additional limitations do not integrate the judicial exception into a practical application.
Under the 2019 PEG, Step 2A, prong two, integration into a practical application requires an additional element(s) or a combination of additional elements in the claim to apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the exception. Limitations that are not indicative of integration into a practical application are those that are mere instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea.-see MPEP 2106.05(f). The instant claims do not attempt to solve an unconventional technological solution. Using the processor as a tool to implement the abstract idea and the way the information is processed and displayed does not make it less abstract. The claimed use of computer elements recited at a high level of generality is an attempt 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.
Applicant’s citation of BASCOM is non-persuasive because the claims at issue in BASCOM are readily distinguishable over the instant claims. In BASCOM v. AT&T: The claimed invention is able to provide individually customizable filtering at the remote ISP server by taking advantage of the technical capability of certain communication networks. …recite a system for filtering Internet content. The claimed filtering system is located on a remote ISP server that associates each network account with (1) one or more filtering schemes and (2) at least one set of filtering elements from a plurality of sets of filtering elements, thereby allowing individual network accounts to customize the filtering of Internet traffic associated with the account. For example, one filtering scheme could be “a word-screening type filtering scheme” and one set of filtering elements (from a plurality of sets) could be a “master list [] of disallowed words or phrases together with [an] individual [list of] words, phrases or rules.” Id. at 4:30-35.
Moreover, Applicant’s citation of McRo is non-persuasive because the claims at issue in McRo are readily distinguishable over the instant claims.
In McRO, the Federal Circuit held the claimed methods of automatic lip synchronization and facial expression animation using computer-implemented rules patent eligible under 35 U.S.C. § 101, because they were not directed to an abstract idea. The basis for the McRO court's decision was that the claims were directed to an improvement in computer-related technology (allowing computers to produce "accurate and realistic lip synchronization and facial expressions in animated characters" that previously could only be produced by human animators), and thus did not recite a concept similar to previously identified abstract ideas. In McRO, timing phonemes in milliseconds represents both the problem being solved and the inventive solution. On the other hand, timing in the instant application represents nothing more than a sequence of events that occur time – a feature common to most process/method patent applications. The timing is not critical to accomplishing the process. For example, a few second delay in a network transmission will not materially affect the outcome of the ordered combination of method steps. Timing is not a problem introduced by the technology itself or arising in the realm of computer networks that the instant application seeks to solve...”
In contrast, the instant claims provide a generically computer-implemented solution to a business-related or economic problem and are thus incomparable to the claims at issue in BASCOM or McRO. 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. The claims here are not directed to a specific improvement to computer functionality nor an inventive solution to any computer specific problem.
Examiner notes that the processor limitations and the claim as a whole do not add significantly more than the abstract idea itself, because the claim does not amount to an improvement to the functioning of a computer itself; and the claim does not move beyond a general link of the use of an abstract idea to a particular technological environment. A generic recitation of a processor/device performing its generic computer functions does not make the claims less abstract.
In making the determination of if the claimed idea is significantly more, the Court gave examples, which included an improvement to another technology or technical field; improvement to the function of the computer itself; or some other meaningful limitation beyond generally linking the use of an abstract idea to a particular technological environment. Such as in Diamond v. Diehr, the claims were found statutory in which the Arrhenius equation is used to improve a process of controlling the operation of a mold in curing rubber parts.
As mentioned previously, the claim does not include additional elements that are sufficient to amount to significantly more than the judicial exception because the additional elements are generic computer components claimed to perform their basic functions. The processor is a general-purpose processor that performs general-purpose functions. The recitation of the claimed limitations amounts to mere instructions to implement the abstract idea on a computer. Taking the additional elements individually and in combination, each step of the process performs purely generic computer functions. As such, there is no inventive concept sufficient to transform the claimed subject matter into a patent-eligible application. The claim does not amount to significantly more than the abstract idea itself. The claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception because the additional elements are simply a generic recitation of a computer processor performing its generic computer functions. Accordingly, claims are ineligible.
Lastly, dependent claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception because the additional elements are simply steps performed by a generic computer. The claim merely amounts to the application or instructions to apply the abstract idea on a processor, and is considered to amount to nothing more than requiring a generic processor to merely carry out the abstract idea itself.
For these reasons the rejection under 35 USC § 101 directed to non-statutory subject matter set forth in this office action is maintained.
Conclusion
Any inquiry concerning this communication or earlier communications from the examiner should be directed to Hani Kazimi whose telephone number is (571) 272-6745. The examiner can normally be reached Monday-Friday from 8:30 AM to 5:00 PM.
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Respectfully Submitted
/HANI M KAZIMI/Primary Examiner, Art Unit 3691
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