DETAILED ACTION
Status of Claims
1. This office action is in response to amendment filed 2/24/2026.
2. Claims 1-20 are pending.
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
Claims 1-20 are rejected under 35 U.S.C. 101 because 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.
Step 1: Claims 1-8 are directed to a system; claims 9-16 are directed to a method; claims 17-20 are directed to a medium – each of which is one of the statutory categories of inventions.
Step 2A: A claim is eligible at revised Step 2A unless it recites a judicial exception and the exception is not integrated into a practical application of the application.
Prong 1: Prong One of Step 2A evaluates whether the claim recites a judicial exception (an abstract idea enumerated in the 2019 PEG, a law of nature, or a natural phenomenon).
Groupings of Abstract Ideas:
I. MATHEMATICAL CONCEPTS
A. Mathematical Relationships
B. Mathematical Formulas or Equations
C. Mathematical Calculations
II. CERTAIN METHODS OF ORGANIZING HUMAN ACTIVITY
A. Fundamental Economic Practices or Principles (including hedging, insurance, mitigating risk)
B. Commercial or Legal Interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations)
C. Managing Personal Behavior or Relationships or Interactions between People (including social activities, teaching, and following rules or instructions)
III. MENTAL PROCESSES.
Concepts performed in the human mind (including an observation, evaluation, judgment, opinion).
See MPEP 2106.04 (a) (2) Abstract Idea Groupings [R-10.2019]
Claim 1:
The courts have used the phrases “fundamental economic practices” or “fundamental economic principles” to describe concepts relating to the economy and commerce. Fundamental economic principles or practices include hedging, insurance, and mitigating risks. MPEP 2106.04(a)(2) II. CERTAIN METHODS OF ORGANIZING HUMAN ACTIVITY. Here, Examiner notes that the limitations “determining an aggregate dynamic transaction risk based on a risk score associated with a transaction request in the plurality of transaction requests, wherein the risk score is based on a risk associated with a corresponding client device in the one or more client devices from which the transaction request is received,” “aggregating the transaction request from the plurality of transaction requests as the transaction request is batch of aggregated transaction requests as long as the aggregate dynamic transaction risk for the batch of aggregated plurality of transaction requests is less than the pre-determined aggregate risk threshold,” “once the aggregate dynamic transaction risk exceeds the pre-determined aggregate risk threshold, transmitting the batch of the aggregated plurality of transaction requests to the second network, wherein the second network communicatively connects the one or more transaction processors process the batch of the aggregated plurality of transaction requests,” describe risk mitigation activities that fall under the abstract idea subgrouping of Fundamental Economic Practices or Principles. In addition, processing purchase transactions involving customer, merchant, a network (108) of POS devices, and a payment network (114) including delaying processing, recites commercial and/or legal activities carried out in furtherance of financial transaction and hence fall under the Commercial/Legal Interactions subgrouping of abstract ideas.
For the above reasons, the limitations recited in independent claim 1 –
receiving a plurality of transaction requests from one or more client devices wherein the first network communicatively connects a point-of-sale (POS) device and the edge server and wherein the edge server connects the first network and a second network;
determining a pre-determined aggregate risk threshold based on a number of the one or more client devices connected to the POS device in a local area network;
as each transaction request in the plurality of transaction requests is received over the first network:
determining an aggregate dynamic transaction risk based on a risk score associated with a transaction request in the plurality of transaction requests, wherein the risk score is based on a risk associated with a corresponding client device in the one or more client devices from which the transaction request is received; and
aggregating the transaction request from the plurality of transaction requests as the transaction request is batch of aggregated transaction requests as long as the aggregate dynamic transaction risk for the batch of aggregated plurality of transaction requests is less than the pre-determined aggregate risk threshold, and wherein the aggregating the plurality of transaction delays processing of the plurality of transaction requests by one or more transaction processors; and
once the aggregate dynamic transaction risk exceeds the pre-determined aggregate risk threshold;
transmitting the batch of the aggregated plurality of transaction requests to the second network, wherein the second network communicatively connects the one or more transaction processors that process the batch of the aggregated transaction requests, and wherein the transmitting of the batch of the aggregated transaction requests reduces a number of transmissions in the second network and improves quality-of-service in the second network
– are together directed to the abstract idea category Certain Methods of Organizing Human Activity.
Claim 9:
For similar reasons as indicated above, the limitations of independent claim 9 –
receiving, at the edge server, asynchronous transmissions comprising a plurality of transaction requests from a first network, wherein the first network communicatively connects one or more client devices and the edge server;
as each asynchronous transmission in the asynchronous transmission is received:
querying, via the edge server, one or more account parameters associated with a client device in the one or more client devices from the one or more transaction processors, wherein a second network communicatively connects the one or more transaction processors and the edge server;
determining, via the edge server, an aggregate dynamic transaction risk associated with the one or more client devices based on the one or more account parameters;
aggregating, via the edge server, a transaction request corresponding to the asynchronous transmission with other transmission requests from the plurality of transaction requests into a batch of the aggregated plurality of transaction requests as long as the aggregate dynamic transaction risk is less than a pre-determined aggregate risk threshold, wherein the pre-determined aggregate risk threshold is based on a connectivity status of the one or more client devices; and
once determining that the aggregate dynamic transaction risk exceeds the pre-determined aggregate risk threshold,
transmitting the batch of the aggregated plurality of transaction requests from the edge server to the second network, wherein the second network communicatively connects the edge server to the one or more transaction processors process the batch of the aggregated plurality of transaction requests, and wherein the transmitting the batch of the aggregated plurality of transaction requests reduces a number of transmissions between the edge server and the one or more transaction processors in the second network and improves a quality-of-service in the second network.
– are together directed to the abstract idea category Certain Methods of Organizing Human Activity.
Claim 17:
For similar reasons as indicated above, the limitations of independent claim 17 –
generating a tokenized payment credential for a client device;
transmitting, from the edge server, to the client device, the tokenized payment credential, wherein a first network communicatively connects the edge server to one or more client devices including the client device;
receiving, at the edge server, a plurality of transaction requests and a tokenized payment credential from the client device, wherein the tokenized payment credential includes a transaction limit for the client device in
determining, via the edge server, the transaction limit from the tokenized payment credential received from the client device;
aggregating, via the edge server, the plurality of transaction requests from the client device into a batch without processing the transaction requests;
determining whether an aggregate dynamic transaction risk associated with the batch of the aggregated plurality of transaction requests exceeds the transaction limit in the tokenized payment credential, wherein the aggregate dynamic transaction risk corresponds to a value of the aggregated plurality of transaction requests; and
in response to determining that the aggregate dynamic transaction risk exceeds the transaction limit, transmitting from the edge server, the batch of the aggregated plurality of transaction requests to the second network, wherein the second network communicatively connects one or more transaction processors and the edge server and wherein the transmitting the aggregated plurality of transaction requests based on the transaction limit in the tokenized payment credential reduces network utilization of the second network and a number of transmissions in the second network.
– are together directed to the abstract idea category Certain Methods of Organizing Human Activity.
Dependent Claims:
For the same reasons as explained above, the limitations of the dependent claims – determining that a transaction risk from a first client device exceeds a pre-determined individual risk threshold wherein the device dynamic transaction risk is based on a connectivity status indication associated with the first client device (claims 2, 10, 13); determining that a transaction risk from a first client device exceeds a pre-determined individual risk threshold, and transmitting the first and second transaction request to the second network (claims 3, 14); determining that a transaction risk from a first client device, wherein the device transaction risk is based on at least one of prior transaction requests associated with the first client device, exceeds a pre-determined individual risk threshold and the risk and the aggregate transaction risk does not exceed the pre-determined aggregate risk threshold, and when the aggregate transaction risk exceeds the pre-determined aggregate risk transmitting the first transaction request to the second network and aggregating the second transaction request into the batch (claims 4, 12); determining that the first transaction is a debit request and the second transaction is a credit request, and settling both transactions without transmitting to the second network (claims 5, 14); determining tokenized payment credential with first client device and varying the aggregated risk threshold based on tokenized payment credential (claims 6, 11); determining status of the transaction requests from the first network indicating whether the transaction requests were successfully or unsuccessfully processed at the second network, and adjusting the pre-determined aggregate risk threshold based on the status of the transaction requests (claim 7); a blockchain payment processor (claims 8, 15); determining tokenized payment credential with first client device, determining that a transaction risk from a first client device exceeds a pre-determined individual risk threshold based on the tokenized payment credential, and transmitting aggregated transaction requests to the second network (claim 12); storing batch of aggregated transactions requests as a single request (claim 16); determining tokenized payment credential associated with client device (claim 18); determining transaction limit (claim 19); determining that another transaction request exceeds transction risk but not transaction limit, and transmitting the request and batch of aggregated transaction requests to the second network (claim 20) – that also constitute Certain Methods of Organizing Human Activity.
Hence under Prong One of Step 2A, claims 1-20 recite a judicial exception.
Prong 2: Prong Two of Step 2A evaluates whether the claim recites additional elements that integrate the judicial exception into a practical application of the exception.
Limitations that are indicative of integration into a practical application include:
Improvements to the functioning of a computer or to any other technology or technical field – see MPEP 2106.05(a)
Applying the judicial exception with, or by use of, a particular machine – see MPEP 2106.05(b)
Effecting a transformation or reduction of a particular article to a different state or thing – see MPEP 2106.05(c)
Applying or using the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception – see MPEP 2106.05(e)
Limitations that are not indicative of integration into a practical application include:
Adding the words “apply it” (or an equivalent) with the judicial exception, or 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)
Adding insignificant extra-solution activity to the judicial exception – see MPEP 2106.05(g)
Generally linking the use of the judicial exception to a particular technological environment or field of use – see MPEP 2106.05(h)
Additional elements recited by the independent claims, beyond the abstract idea, include: an edge server comprising one or more hardware processors, and a non-transitory memory; first and second client device; first and second network, non-transitory machine readable medium.
With respect to the following limitations –
Claim 1: “once the aggregate dynamic transaction risk exceeds the pre-determined aggregate risk threshold,
transmitting the batch of the aggregated plurality of transaction requests to the second network, wherein the second network communicatively connects the one or more transaction processors process the batch of the aggregated plurality of transaction requests, and wherein the transmitting the batch of the aggregated plurality of transaction requests reduces a number of transmissions in the second network and improves quality-of-service in the second network”
Claim 9: “once the aggregate dynamic transaction risk exceeds the pre-determined aggregate risk threshold,
transmitting from the edge server, the batch of the aggregated plurality of transaction requests to the second network, wherein the second network communicatively connects one or more transaction processors and the edge server and wherein the transmitting the aggregated plurality of transaction requests based on the transaction limit in the tokenized payment credential reduces network utilization of the second network and a number of transmissions in the second network”
Claim 17: “in response to determining that the aggregate dynamic transaction risk exceeds the transaction limit, transmitting from the edge server, the batch of the aggregated plurality of transaction requests to a second network, wherein the second network communicatively connects one or more transaction processors and the edge server and wherein the transmitting the aggregated plurality of transaction requests based on the transaction limit in the tokenized payment credential reduces network utilization of the second network and a number of transmissions in the second network”
Examiner notes that the claimed reduction in number of transmission or network utilization a) merely reflects a net result or effect (reduces network utilization), b) represents speculative relative reduction over a hypothetical that may never materialize, and c) does not provide a meaningful limitation because it merely applies the abstract idea – “transmitting the batch of the aggregated plurality of transaction requests to the second network once the aggregate dynamic transaction risk exceeds the pre-determined aggregate risk threshold” – to aim for an aspirational result – “reduce the number of transmissions in the second network.” See MPEP 2106.05(f) (1) (cautioning against claims “so result focused, so functional, as to effectively cover any solution to an identified problem”), (3) (“describes “the effect or result dissociated from any method by which maintaining the state is accomplished” and does not provide a meaningful limitation because it merely states that the abstract idea should be applied to achieve a desired result”).
Examiner thus finds that any additional element(s), beyond the judicial exception, has been recited at a high level of generality such that the claim limitations amount to no more than mere instructions to apply the exception using generic components. (MPEP 2106.05(f)) or insignificant data gathering activities (MPEP 2106.05(g)).
The combination of additional elements – receiving, generating, determining, querying, aggregating, determining, transmitting – does not purport to improve the functioning of a computer or effect an improvement in any other technology or technical field. Instead, the additional elements do no more than use the computer as a tool and/or link the use of the judicial exception to a particular technological environment or field of use. The focus of the claims is not on improvement in computers, but on certain independently abstract ideas – receiving and aggregating transaction requests from a first network into a batch, determining that the aggregate transaction risk exceeds a pre-determined risk threshold, and transmitting the batch transaction requests to a second network – that merely uses generic components as tools. Steps that do no more than spell out what it means to “apply it on a computer” cannot confer patent eligibility. Indeed, nothing in claim 1 improves the functioning of the computer, makes it operate more efficiently, or solves any technological problem. See Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1378, 1384-85 (Fed. Cir. 2019).
Hence, under Prong Two of Step 2A, the additional elements individually, or in combination, do not integrate the judicial exception into a practical application.
Hence, the claims are ineligible under Step 2A.
Step 2B:
In Step 2B, the evaluation consists of whether the claim recites additional elements that amount to an inventive concept (aka “significantly more”) than the recited judicial exception.
As discussed in Prong Two, the additional elements in the claims amount to no more than mere instructions to apply the exception using generic computer components, which is insufficient to provide an inventive concept.
When considered individually or as an ordered combination, the additional elements fail to transform the abstract idea of – receiving and aggregating transaction requests from a first network into a batch, determining that the aggregate transaction risk exceeds a pre-determined risk threshold, and transmitting the batch transaction requests to a second network – into significantly more.
See MPEP 2106.05(f) Mere Instructions To Apply An Exception [R-10.2019].
(2) Whether the claim invokes computers or other machinery merely as a tool to perform an existing process. Use of a computer or other machinery in its ordinary capacity for economic or other tasks (e.g., to receive, store, or transmit data) or simply adding a general purpose computer or computer components after the fact to an abstract idea (e.g., a fundamental economic practice or mathematical equation) does not integrate a judicial exception into a practical application or provide significantly more.
Hence, the claims are ineligible under Step 2B.
Therefore, the claim(s) are rejected under 35 U.S.C. 101 as being directed to a judicial exception without significantly more.
Response to Arguments
Applicant's arguments filed 2/24/2026 have been fully considered but they are not persuasive.
101
Applicant asserts that the office action improperly relies on embodiments in the specification that are not recited in the claims to characterize the claims as directed to a risk management exercise.
Examiner respectfully disagrees.
There is a fundamental contradiction in the applicant’s argumentation in that it both criticizes reading claims in light of the specification while concurrently citing sections of the specification as evidence of improvement. Thus, on the one hand, applicant maintains (pages 12-13 of remarks, 2/24/2026) that the office action improperly relies on embodiments in the specification to interpret the claims; and then, proceeds to read limitations from the specification into the claims (pages 15, 16, 18 of remarks, 2/24/2026).
Examiner points out that limitations from the specification have not been imported into the claims, as clearly set forth above in Prong 1 which makes no reference to the specification. Although, the specification does not provide any particular definition for the terms “risk score,” “transaction risk,” “risk threshold,” under the plain, ordinary and customary meaning given to the terms by one of ordinary skill in the art, in the context of the invention, the claim limitations “determining an aggregate dynamic transaction risk based on a risk score,” “aggregate dynamic risk exceeds the aggregate risk threshold” describe risk mitigation activities. Thus, a PHOSITA would interpret the claimed terms and limitations in accordance with plain and ordinary meaning of “risk threshold.” For example, a PHOSITA would appreciate that where the predetermined risk threshold is $100K, a first purchase transaction worth $50K and a second purchase transaction of $25K will not meet the risk threshold and can undergo batch processing; on the other hand, if the second purchase were to be $50K (instead of $25K), then the aggregate $100K risk threshold limit will be triggered and the transactions will be transferred to the second network. See MPEP 2111 I. (“Under a broadest reasonable interpretation (BRI), words of the claim must be given their plain meaning, unless such meaning is inconsistent with the specification. The plain meaning of a term means the ordinary and customary meaning given to the term by those of ordinary skill in the art at the relevant time.”).
There exists an ironic contradiction between the applicant’s objection (pages 12-13 of remarks, 2/24/2026) to the examiner interpreting claim limitations in light of the specification, with the applicant’s directive to the examiner (pages 15-16 of remarks, 2/24/2026) to follow the two-step framework for identifying technical improvement in accordance with MPEP 2106.04(d)(1) which requires evaluating the specification. It seems that the applicant is simultaneously requiring the examiner to disregard the specification in interpreting claim limitations while also requesting the examiner to consult the specification to evaluate evidence of technical improvement recited in the claims. The applicant attempts to rely on embodiments from the cited sections of the specification to advance an argument while at the same time objecting to the office action consulting sections of the specification that illuminate the claim language. This seems inconsistent.
MPEP 2106.04(d)(1) instructs the examiners to first evaluate the specification to determine if the disclosure provides sufficient details such that one of ordinary skill in the art would recognize the claimed invention as providing an improvement. In accordance with the above instruction from the MPEP, upon evaluation of the specification, the examiner has found that the claim limitation “once the aggregate dynamic transaction risk exceeds the pre-determined aggregate risk threshold, transmitting the batch of the aggregated plurality of transaction requests to the second network, wherein the second network communicatively connects the one or more transaction processors process the batch of the aggregated plurality of transaction requests, and wherein the transmitting the batch of the aggregated plurality of transaction requests reduces a number of transmissions in the second network and improves quality-of-service in the second network” corresponds to the coffee and ice-tea example provided in para [0106] – which describes the abstract idea of batching two transactions. Claims are not read in vacuum but interpreted in light of the specification. See MPEP 2111 II. (“See also In re Marosi, 710 F.2d 799, 802, 218 USPQ 289, 292 (Fed. Cir. 1983) (“'[C]laims are not to be read in a vacuum, and limitations therein are to be interpreted in light of the specification in giving them their ‘broadest reasonable interpretation.'” (quoting In re Okuzawa, 537 F.2d 545, 548, 190 USPQ 464, 466 (CCPA 1976)). The court looked to the specification to construe “essentially free of alkali metal” as including unavoidable levels of impurities but no more.).”). A close examination of the specification further confirms that the claimed invention is directed to mitigating commercial risk. As the Superguide Court explained – understanding of the claim language may be aided by explanations contained in the written description. A POSITA would not recognize the claimed invention as providing technical improvement because the claimed steps recite abstract ideas of batching transactions and transmitting batches based on financial risk. Transferring risk is not technical improvement. The claimed improvement is, at best, an improvement in the abstract idea of transferring financial risk.
Examiner respectfully requests the applicant to explain why the office cannot interpret claims in accordance with the specification (as allowed by MPEP 2111 II) whereas the portions of the specification specifically pointed out by the applicant can be read into the claims. This inconsistency becomes glaringly apparent when the applicant relies almost exclusively on the disclosure from ¶ 13, 52, 53 to assert (Page 16 of Remarks, 2/24/2026) that the mechanism recited in the claims improves the quality-of-service and reduces network and bandwidth utilization.
With respect to the applicant relying on ¶ 2, 12, 13, 52, 53 as evidence of improvement in technology, the examiner finds no evidence of technical improvement in the above quoted paragraphs. Any assertions of improvement, e.g. quality-of-service, reducing volume and frequency, increasing bandwidth utilization, etc. have been described in the above identified paragraphs in a conclusory manner. Examiner also points out that many of the features contained the above listed paragraphs are not even present in the claims. For example, none of the claims recite message priority, recalling messages, cancelling messages, etc.
As explained in the previous office action, it is difficult to evaluate claims of improvement of quality-of-service in the absence of any disclosure of the relevant quality metrics. Claim 1 does not identify any particular quality-of-service metrics of the second network and how does not recite such quality-of-service is improved. Thus, on the one hand, the applicant takes issue with the office interpreting claims in light of the specification, but on the other hand, the applicant relies on ¶ 52, 53 to argue for the alleged quality of service improvement. However, even if applicant’s proscription on reading from the specification were to be set aside, the disclosure from ¶ 53 (“Edge server 112A may increase the quality of service of the network 114 by reducing volume and frequency of messages.”) describes this alleged reduction entirely in functional, result-focused manner that is insufficient to demonstrate technical improvement. See Intellectual. Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1342 (Fed. Cir. 2017) (“Indeed, the claim language here provides only a result-oriented solution, with insufficient detail for how a computer accomplishes it. Our law demands more.”). In short, neither the claims nor the specification demonstrates technical improvement relating to quality-of-service but only conclusory assertions thereof. In Affinity Labs of Tex. v. DirecTV, LLC, the Federal Circuit relied on the specification’s failure to provide details regarding the manner in which the invention accomplished the alleged improvement when holding the claimed methods of delivering broadcast content to cellphones ineligible. See Affinity Labs of Tex. v. DirectTV LLC, 838 F.3d 1253, 1263-64, 120 USPQ2d 1201, 1207-08 (Fed. Cir. 2016). Similarly, a close inspection of the specification, including the paragraphs specifically identified by the applicant, fails to demonstrate any evidence of technical improvement.
Further, applicant’s blanket assertion (page 17, 2/24/2026) that one of ordinary skill in the art would readily understand that transmitting a single batch requires fewer transmissions than transmitting multiple individual messages, thereby reducing bandwidth utilization on the second network – is merely an opinion that is not backed by any analysis. For example, as per ¶ 53, the edge server when batch processing the messages may remove the cancelled message from the batch, such that the cancelled message is not transmitted to remote server and/or message processing server which may reduce the volume of messages sent over network. It is not clear to a POSITA which messages are cancelled and on what basis. Moreover, the independent claims purport to reduce transmissions based on aggregate dynamic transaction risk exceeding risk threshold, whereas ¶ 52, 53 purport to reduce volume based on batching at edge server. Therefore, there seems to be no connection between volume reduction by batching and the alleged reduction of transmissions to the second network based on exceeding risk threshold.
Similarly, applicant’s arguments pertaining to bandwidth reduction are also unpersuasive because using batch processing is using the abstract idea and not technical means for bandwidth reduction. There is no disclosure in ¶ 53 of anywhere in the specification on the maximum network bandwidth limit, the amount of bandwidth consumed by each transaction, number of transactions, the network throughput, time of measurement, etc. Neither the specification nor any of the claims sheds any light on the number of transactions per unit of time, and the duration of time for which bandwidth is measured. Nor is it clear from the specification how and when bandwidth reduction is achieved by the claimed invention. Whether or not there is a relative bandwidth reduction in one network compared to the other, based on risk threshold, the amount of bandwidth required to process the total number of purchase transactions received is not decreased because the total number of messages remains the same regardless of whether the batched transactions are transferred from first network to second network or not. Any alleged reduction is predicated upon hypotheticals that either do not apply because the threshold is satisfied or are unrelated to computational resource use. Moreover, at most two transaction requests are required to invoke the claims – one from a first client device and second from a second client device –which, in the aggregate, will entail negligibly small bandwidth increase or decrease. Therefore, absent any metrics, it is difficult see how only two purchase transactions achieve any kind of bandwidth reduction.
Thus, while simultaneously criticizing the examiner for interpreting the claims in light of specification, the applicant resorts to importing limitations from the specification by argument without explicitly even reciting these limitations in the claims. Examiner humbly requests that should the applicant choose to remain consistent with the principle of not relying on the specification for claim interpretation, then it would be proper if the applicant were to formally withdraw arguments citing reliance on specification ¶ 2, 13 (page 15, 2/24/2026); ¶ 13, 52-53 (page 16, 2/24/2026); ¶ 2, 13, 53 (page 18, 2/24/2026).
Under Federal Circuit precedent, any reduction in number of transmissions is attributed exclusively to the application of the abstract idea on generic computers and therefore not sufficient to demonstrate patent eligibility. Federal Courts have consistently held that improved speed or efficiency inherent with applying an abstract idea on a computer are not sufficient to demonstrate an inventive concept. See OIP Techs v. Amazon.com (Fed. Cir. 2015) (“relying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible.”); Intellectual Ventures I LLC v. Capital One Bank (Fed. Cir. 2017), (“claiming the improved speed or efficiency inherent with applying the abstract idea on a computer does not provide a sufficient inventive concept.”); Intellectual Ventures I LLC v. Capital One Bank (USA) (Fed. Cir. 2015) (“[M]erely adding computer functionality to increase the speed or efficiency of the process does not confer patent eligibility on an otherwise abstract idea.”); Intellectual Ventures I LLC v. Erie Indemnity (Fed. Cir. 2017) (“Though the claims purport to accelerate the process of finding errant files and to reduce error, we have held that speed and accuracy increases stemming from the ordinary capabilities of a general-purpose computer do not materially alter the patent eligibility of the claimed subject matter.”). Examiner also points out that applicant’s objection that the above cases apply to Step 2B and not Prong 1 of Step 2A are irrelevant because the Federal Circuit relies on the two step Alice/Mayo analysis and not the three step PEG 2019 Guidance analysis which the Office applies.
While not precedential, the following decisions are highly persuasive in connection with claims directed to reduction of computing resources by application of abstract idea(s) that have been deemed ineligible by the PTAB:
“What the Examiner determined to be a practical application of bundling of multiple transactions is the automated equivalent of conventional administrative practice, which no more improves the underlying technology than sending bundled mail with a courier improves the courier’s vehicle. If it reduced the number of vehicles, this again was an administrative rather than technological benefit.”
Ex parte ZHENNI HU, Appeal 2022-003563 (New Ground of Rejection) (Methods and Systems for Reducing Cross-Border Traffic over a Network)
Yet, to the extent the claimed invention reduces processor, memory, and/or network utilization at all, that reduction, as Appellant, in fact, concedes, is no more than the natural and inevitable result of reducing the amount of data to be processed (Reply Br. 3 (“A natural consequence of the decrease in the amount of notifications is the reduction of computing resources used to present the notifications.”)).
Ex parte Breitweiser, Appeal 2025-003630 (System and Method for Generating User-specific Well-being Tasks)
“We are not persuaded of error on the part of the Examiner by Appellant’s argument that the invention is an efficient system that reduces the strain on computer systems and reduces the associated overhead and bandwidth and processing time. (Appeal Br. 9). But these improvements do not relate to improvements in technology but instead are improvements to how to send orders which is part of the abstract idea (consolidating a plurality of messages into a single message).”
Ex parte RON NEWELL, Appeal 2021-005439 (Trade Engine Processing of Mass Quote Messages and Resulting Production of Market Data)
“Even assuming arguendo Appellant’s position that “the claims call[] for generating a specific data structure which minimizes the number of data entries therein which is a technical improvement which reduces the amount of data that needs to be further processed” (Reply Br. 1), we agree with the Examiner that this is merely filtering data (see Ans. 5).”
Ex parte Glinberg, Appeal 2021-003766 (Systems and Method of Margining Fixed Payoff Products)
Rather, Appellant’s asserted improvements – improved security and significant savings in overall bandwidth, improved processing speed, and freeing up processor or power resources – are a byproduct of the abstract idea transmitting only certain selected information to control the amount of identity information being transmitted. That is, the abstract concept is not used to improve computer technology, instead, the abstract concept just uses computer technology less.
Ex parte XU CAO, Appeal 2020-001125 (Apparatus and Method for Reverse Authorization)
Appellant argues that “the computational effort required by the system to compute the margin requirement is less than a computational effort required to compute the margin requirement based on all of the products and/or positions of the portfolio” is a technological solution to a technological problem. Reply Br. 2. Such a reduction, however, results from the abstract idea improving the way products and offset values are grouped and assigned, thereby using the computer less, not because the computer itself has been improved. As such, the claims do not recite a patent-eligible improvement to computer functionality. Customedia Techs., 951 F.3d 1359, 1365 (“[T]o be directed to a patent-eligible improvement to computer functionality, the claims must be directed to an improvement to the functionality of the computer or network platform itself.”)
Ex parte Glinberg, Appeal 2023-003939 (System and Method for Flexible Spread Participation)
To the extent that Appellant alleges improvement to computer workload and computer resources such as memory resources, processor resources, and network resources like bandwidth, such alleged improvement is not to the technological implementation set forth in claim 9, but instead to the decision making that is part of the abstract idea (e.g., routing trading messages to the correct user). Thus, the alleged improvement has not been shown to be to the computer implementation of the abstract idea rather than a consequence of an improvement to an abstract idea itself; i.e., an improved manner of communicating trading messages by identifying relationships between first and second users.
Ex parte ALASTAIR J.D. BEADLE, Appeal 2021-004629 (Systems and Methods for Managing Relationship between Brokers and Traders using a Messaging Format)
Furthermore, even if Appellant’s proposed advantage of reduced bandwidth is correct, we determine that sending a lesser number of messages across a particular network is not an improvement to that technology (e.g., computer networking technology). Rather, it would reduce the bandwidth usage on the network, but not improve the networking technology, because it is merely the use of computing equipment for its intended purpose (sending messages).
Ex parte DANIEL JUDSON, Appeal 2019-000685 (Electronic Outcry Messaging for Electronic Trading)
The same also is true of any alleged improvement in the efficient use of computer resources. Appellant asserts that reducing the likelihood of delayed or failed transactions, due to user input error, results in a reduction in the use of computing resources to address or fix problems caused by user input error, and that service provider servers may have more bandwidth commensurate with a decrease in the number of delayed or failed transactions due to user input error (Appeal Br. 11-12). Yet, any such reduction in the use of computing resources and/or increase in available bandwidth is no more than the inevitable result of processing few transactions. It does not reflect a technological improvement.
Ex parte RAHUL NAIR Appeal 2023-001394 (Peer To Peer Digital Transaction Detail Error Reduction)
But, as discussed above, sending a single confirmation in lieu of multiple confirmations recites an abstract idea, rather than reciting an improvement specific to network or computer functionality.
Ex parte Sweeting, Appeal 2019-000449 (System and Method for Automatically Distributing a Trading Order Over a Range of Prices)
The present claims are similar to the above cases in that any alleged reduction of number of transmissions is merely a result or byproduct of transmitting a batch of transactions to the second network when the aggregated transaction risk exceeds the risk threshold – which is a Certain Method of Organizing Human Activity and does not reflect technical improvement.
As per MPEP 2106.05(a) II (“To show that the involvement of a computer assists in improving the technology, the claims must recite the details regarding how a computer aids the method, the extent to which the computer aids the method, or the significance of a computer to the performance of the method. Merely adding generic computer components to perform the method is not sufficient. Thus, the claim must include more than mere instructions to perform the method on a generic component or machinery to qualify as an improvement to an existing technology.”). Here, the pending claims are directed to aggregating transactions received over a first network in a batch, as long as the aggregated risk is less than a pre-determined risk threshold; and when the aggregated risk exceeds the threshold, transmitting the batch to the second network. Examiner notes that this constitutes little more than mere instructions to generic computing devices to apply the judicial exception of transaction risk transfer from first network to second network. Any reduction in the number of transmissions to the second network is, at most, a result or byproduct of batching transaction based on risk subject to a predetermined risk threshold. If the aggregate transaction risk is not exceeded, then there is no transmission to the second network and no purported reduction of transmissions. Any reduction of the number of transmissions is the natural and inevitable consequence of batching transactions and not a result of technical improvement. For example, batching ten transactions and then sending them over in a single batch would naturally require nine fewer transmissions than if each transaction were transmitted individually. But such reduction is merely due to the business and commercial practice of batching rather than improvement in computers.
The problem ostensibly addressed in the claims is commercial – risk mitigation – and not technological. A PHOSITA would understand from the plain language of the claims that transferring a batch of transactions from a first network to a second network, based on exceeding aggregated transction risk, is a risk transfer operation. A PHOSITA would appreciate from the plain language of the claims, that where the aggregate risk threshold is $100,00, two hypothetical purchase transactions $50K + $25K will not reach the threshold and be batched but two alternative purchases $50K + $50K will trigger the threshold and will therefore the transmitted to the second network as per the claimed scheme. Transferring financial risk of $50K + $50K is a Certain Method of Organizing Activity. At most, this is an improvement in the fundamental economic principle of risk management rather than any purported improvement in technology. See MPEP 2106.05(a) II (“However, it is important to keep in mind that an improvement in the judicial exception itself (e.g., a recited fundamental economic concept) is not an improvement in technology.”). The focus of the claims is not on any improvement in computer capabilities but on the abstract idea of financial risk management. This is further confirmed by the specification. For example, in the only disclosed embodiment relating to batching transactions, if the aggregated risk threshold is $10, then the server will continue to batch $3 coffee transaction and $2 ice-tea transaction; however, if the risk threshold is $4, then the server may transmit the $3 coffee transaction request and $2 ice-tea transaction request over network 114 without batching the two transactions (Spec. para [0106]). Transmitting a $3 transaction to a second network, when the aggregate risk in the first network exceeds a predetermined threshold, may help mitigate financial risk but has nothing to do with improving computers or technology. This is quintessential risk management as opposed to technical improvement.
Applicant makes various references to McRO, BASCOM, and DDR decisions. Examiner finds them inapposite.
Whereas the McRO invention involved improvement in animation technology, the present claims, in contrast, are involved in improving risk management. Whereas McRO recited rules relating to animation technology, the present claims recite a series of abstract ideas to improve risk management. Aggregating transactions into batches (e.g. $2 + $3, or $50K + $25K, or $50K + $50K, etc.) is not technological improvement but financial risk management.
In BASCOM, the claimed method recited a “specific method of filtering Internet content” requiring “the installation of a filtering tool at a specific location, remote from the end-users, with customizable filtering features specific to each end user. The inventive concept in BASCOM rests on taking advantage of the ability of at least some ISPs to identify individual accounts that communicate with the ISP server, and to associate a request for Internet content with a specific individual account. Examiner notes that local packet filtering was deemed a technology-based solution whereas the present claims are merely an abstract idea-based risk transfer scheme that is not eligible for patenting.
Unlike DDR, where the click of a hyperlink would cause an e-commerce website to lose a customer to a rival e-commerce website, there is no such business or technical problem confronting the user. The applicant’s invention does not set out to solve any specific business or technological challenges. There is no risk of losing business to a rival because of a mouse click. The claimed invention does not involve internet browsing and its associated challenges. Nor do the claims describe any technical solutions to any problem. Hence, DDR does not apply here.
There is a fundamental difference between computer functionality improvements, on the one hand, and uses of existing computers as tools to perform a particular task, on the other. The pending claims are directed at identifying an aggregated transaction risk threshold at a first network and merely use and edge server to mitigate the risk by transmitting a batch of transactions to a second network if and when a financial risk threshold is reached. The improvement recited in the claim does not improve the edge server or the client device. Instead, the alleged improvement recited in the claims is an abstract idea, i.e., mitigating aggregated transaction risk. See SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1170 (Fed. Cir. 2018) (“[P]atent law does not protect such claims[, i.e., claims to an asserted advance in the realm of abstract ideas], without more, no matter how groundbreaking the advance.”). Indeed, nothing in the claims improves the functioning of a computer, makes it operate more efficiently, or solves any technological problem. See Trading Techs. Int’l, Inc. v. IBG LLC, (Fed. Cir. 2019).
Finally, with respect to the applicant’s allegation that the office action does not conform to Berkheimer v. HP, the examiner responds that Berkheimer does not stand for the proposition that the invention is well-understood, routine and conventional (WURC), rather it applies to the additional elements beyond the abstract idea. As explained in Prong 2 and Step 2B, the additional elements have been described at a high level of generality so that, when considered as a whole, the additional elements in the claim amount to no more than mere instructions to apply the exception using generic computer components, which is insufficient to provide an inventive concept or provide significantly more.
The combination of limitations in claims 1-20 does not recite (i) an improvement to the functionality of a computer or other technology or technical field; (ii) a “particular machine” to apply or use the judicial exception; (iii) a particular transformation of an article to a different thing or state; or (iv) any other meaningful limitation. See MPEP 2106.05 (a)-(c), (e)-(h). Hence, the additional elements, individually or in combination, do not integrate the abstract idea into a practical application or provide significantly more. See MPEP 2106.05(f) (“Use of a computer or other machinery in its ordinary capacity for economic or other tasks (e.g., to receive, store, or transmit data) or simply adding a general purpose computer or computer components after the fact to an abstract idea (e.g., a fundamental economic practice or mathematical equation) does not provide significantly more.”).
For the above reasons, claims 1-20 are patent ineligible under § 101.
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.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to ARUNAVA CHAKRAVARTI whose telephone number is (571)270-1646. The examiner can normally be reached 9 AM - 5 PM ET.
Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice.
If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Ryan Donlon can be reached at 571-270-3602. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
Information regarding the status of published or unpublished applications may be obtained from Patent Center. Unpublished application information in Patent Center is available to registered users. To file and manage patent submissions in Patent Center, visit: https://patentcenter.uspto.gov. Visit https://www.uspto.gov/patents/apply/patent-center for more information about Patent Center and https://www.uspto.gov/patents/docx for information about filing in DOCX format. For additional questions, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.
/ARUNAVA CHAKRAVARTI/Primary Examiner, Art Unit 3692