DETAILED ACTION
1. 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 .
2. Status of Application and Claims
Claims 1-13 are pending.
Claims 1, 2, 4, 8, 9 and 11 were amended or newly added in the Applicant’s filing(s) on 9/17/2025.
This office action is being issued in response to the Applicant's filing(s) on 9/17/2025.
3. Claim Interpretation
The subject matter of a properly construed claim is defined by the terms that limit its scope when given their broadest reasonable interpretation. see MPEP §2013(I)(C). Specifically, the “broadest reasonable construction ‘in light of the specification as it would be interpreted by one of ordinary skill in the art.’” See MPEP §2111, citing Phillips v. AWH Corp., 75 USPQ2d 1321, 1329 (Fed. Cir. 2005). However, “[t]hough understanding the claim language may be aided by explanations contained in the written description, it is important not to import into claim limitations that are not part of the claim.” See MPEP §2111.01, citing Superguide Corp. v. DirecTV Enterprises, Inc., 69 USPQ2d 1865, 1868 (Fed. Cir. 2004). Construing claims broadly during prosecution is not unfair to the applicant, because the applicant has the opportunity to amend the claims to obtain more precise claim coverage. See MPEP §2111, citing In re Yamamoto, 222 USPQ 934, 936 (Fed. Cir. 1984).
As a general matter, grammar and the plain meaning of terms as understood by one having ordinary skill in the art used in a claim will dictate whether, and to what extent, the language limits the claim scope. See MPEP §2013(I)(C). Language that suggests or makes a feature or step optional but does not require that feature or step does not limit the scope of a claim under the broadest reasonable claim interpretation. See MPEP §2013(I)(C).
As such, claim limitations that contain statement(s) such as “if, may, might, can, could” are treated as containing optional language. See MPEP §2013(I)(C). As matter of linguistic precision, optional claim elements do not narrow claim limitations, since they can always be omitted. See MPEP §2013(I)(C).
Similarly, a method step exercised or triggered upon the satisfaction of a condition, where there remains the possibility that the condition was not satisfied under the broadest reasonable interpretation, is an optional claim limitation. see MPEP §2111.04(II). As the Applicant does not address what happens should the optional claim limitations fail, Examiner assumes that nothing happens (i.e., the method stops). An alternate interpretation is that merely the claim limitations based upon the condition are not triggered or performed.
In addition, when a claim requires selection of an element from a list of alternatives, the prior art teaches the element if one of the alternatives is taught by the prior art. See MPEP §2143.03, citing Fresenius USA, Inc. v. Baxter Int’l, Inc., 582 F.3d 1288, 1298 (Fed. Cir. 2009);
Language in a method or system claim that states only the intended use or intended result, but does not result in a manipulative difference in the steps of the method claim nor a structural difference between the system claim and the prior art, fails to distinguish the claims from the prior art. In other words, if the prior art structure is capable of performing the intended use, then it meets the claim.
The following types of claim language may raise a question as to its limiting effect (this list is not exhaustive):
Statements of intended use or field of use, including statements of purpose or intended use in the preamble. See MPEP §2111.02;
Clauses such as “adapted to”, “adapted for”, “wherein”, and “whereby.” See MPEP §2111.04;
Contingent limitations. See MPEP §2111.04(II);
Printed matter. See MPEP §2111.05; and
Functional language associated with a claim term. See MPEP §2181.
As such, while all claim limitations have been considered and all words in the claims have been considered in judging the patentability of the claimed invention, the following italicized, underlined and emboldened language is interpreted as not further limiting the scope of the claimed invention.
Additionally, the following italicized, underlined and emboldened language is not necessarily an exhaustive list of claim language that is interpreted as not further limiting the scope of the claimed invention. Applicant should review all claims for additional claim interpretation issues.
Claim 1 recites a method comprising:
adjusting the event intensity model to account for consensus updates associated with the events related to the asset;
creating, by the processor set, a probabilistic time series model for estimating a dynamic covariance matrix that accounts for impacts of the events related to the asset, wherein the creating the probabilistic time series model comprises learning parameters of the probabilistic time series model using machine learning and the time series data of the price of the asset in the training data set;
…
transmitting, by the processor set, the predicted future return to be displayed on the graphical user interface.
Method claims are defined by the method steps being actively performed (i.e., adjusting the event intensity model, creating a probabilistic time series model and transmitting the predicted future return), not the intended purpose or the motivation for the performance of the method steps (i.e., to account for consensus updates associated with the events related to the asset, for estimating a dynamic covariance matrix that accounts for impacts of the events related to the asset or to be displayed on the graphical user interface).
Examiner also notes that the intended purpose of the probabilistic times series model is for estimating a dynamic covariance matrix, and the intended purpose of the dynamic covariance matrix, in turn, is to account for impacts of the events related to the asset.
Claims 2, 8 and 9 have similar issues.
Claim 4 recites a method comprising:
creating an event magnitude model that models a distribution of magnitude of the events related to the asset based on previous magnitudes of the events related to the asset and adjusts a mean of the distribution upon receiving consensus updates associated with the events related to the asset.
Method claims are defined by the method steps being actively performed (i.e., creating an event magnitude model), not method steps that may or may not be performed. Reciting a system element in a method claim is configured to perform a method step (i.e., a model that models a distribution of magnitude of the events related to the asset based on previous magnitudes of the events related to the asset) does not mean that the method step is actually performed (i.e., modelling a distribution of magnitude of the events related to the asset based on previous magnitudes of the events related to the asset).
Additionally, the broadest reasonable interpretation of a method (or process) claim having contingent limitations requires only those steps that must be performed and does not include steps that are not required to be performed because the condition(s) precedent is not met. See MPEP §2111.04(II).
Usage of the term and/or phrase “upon receiving consensus updates associated with the events related to the asset” in Claim 4 suggests that there remains the possibility that the contingent limitations are not performed as the condition(s) precedent is not met. Examiner notes that the claim, as written, does not recite receiving consensus updates associated with the events related to the asset. Therefore, the claim limitations based upon the condition are optional claim limitations. As a matter of linguistic precision, optional claim limitations do not narrow the scope of the invention, since they can always be omitted. See MPEP §2111.04(II).
As the Applicant does not address what happens should the optional claim limitation(s) fail, Examiner assumes that nothing happens (i.e., the method stops). An alternate interpretation is that merely the claim limitations based upon the condition are not triggered or performed.
Claim 11 has similar issues.
4. 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 1-13 are rejected under 35 U.S.C. § 101 because the claimed invention is directed to an abstract idea without significantly more.
STEP 1
The claimed invention falls within one of the four statutory categories of invention (i.e., process, machine, manufacture and composition of matter). See MPEP §2106.03.
STEP 2A – PRONG ONE
The claim(s) recite(s) a method, a system to perform a method and/or computer-readable medium containing instructions, when executed, causes a computer to perform a method comprising:
receiving, … , user input …, the user input defining an asset, events related to the asset, a target parameter for optimizing the asset, and a future time period for forecasting a future return of the asset;
creating, … , a training data set using the received user input, the training data set including time series data of a price of an asset and stochastic event data of events related to the asset;
creating, … , a probabilistic framework for modeling event intensity, event magnitude, and their effects on a probabilistic time series of a return of the asset by:
creating, … , an event intensity model by using a multivariate Hawkes process for modeling an event intensity parameter of one of the events related to the asset, wherein creating the event intensity model comprises learning parameters of the event intensity model using … the training data set and the stochastic data in the training data set;
adjusting the event intensity model to account for consensus updates associated with the events related to the asset;
creating, … ,a probabilistic time series model for estimating a dynamic covariance matrix that accounts for impacts of the events related to the asset, wherein the creating the probabilistic time series model comprises learning parameters of the probabilistic time series model using … and the time series data of the price of the asset in the training data set;
using the probabilistic time series model to predict a probability distribution of return of the asset;
predicting, … , a future return of the asset for the future time period using the probabilistic time series model; and
transmitting, … , the predicted future return …
These limitations, as drafted, under its broadest reasonable interpretation, covers a series of steps instructing how to predict the future return of an asset which is a fundamental economic practice, a sub-category of certain method(s) of organizing human activity, an enumerated grouping of abstract ideas. See MPEP §2106.04(a)(2)(II)(A).
Examiner notes that predicting the future return of an asset is mitigation of financial risk and that the mitigation of financial risk is a court-provided example of a fundamental economic practice. See MPEP §2106.04(a)(2)(II)(A), citing Alice Corp. v. CLS Bank, 573 U.S. 208, 218, 110 USPQ2d 1976, 1982 (2014).
Additionally, these limitations, as drafted, under its broadest interpretation, covers a series of steps that can be practically performed in the human mind (e.g., observations, evaluations, judgments and opinions) which are mental process, a second enumerated grouping of abstract ideas. See MPEP §2106.04(a)(2)(III).
Examiner notes that “’collecting information, analyzing it, and displaying certain results of the collection and analysis,’ where the data analysis steps are recited at a high level of generality such that they could practically be performed in the human mind” is a mental process. See MPEP §2106.04(a)(2)(III)(A) citing Electric Power Group v. Alstom, SA. (Fed. Cir. 2016).
Accordingly, the claimed invention recites an abstract idea.
STEP 2A – PRONG TWO
The claimed invention recites additional elements (i.e., computer elements) of a processor set (Claim(s) 1 and 8), a graphical user interface of a user device (Claim(s) 1 and 8), and machine learning (Claim(s) 1 and 8).
The claimed invention does not include additional elements that integrate the judicial exception into a practical application of the exception because the claims do not provide improvements to another technology or technical field; improvements to the functioning of the computer itself; are not applying or using a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition; are not applying the judicial exception with or by use of a particular machine; are not effecting a transformation or reduction of a particular article to a different state or thing; and are not applying the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment. See MPEP §2106.04(d).
The additional elements are recited at a high-level of generality such that it amounts no more than mere instructions to apply the exception using a generic computer component. See MPEP §2106.05(f). Alternately, the additional elements amount to no more than generally linking the exception to a particular technological environment or field of use. See MPEP §2106.05(h). Accordingly, these additional element(s), when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because it does not impose any meaningful limits on practicing the abstract idea.
Accordingly, the claimed invention is directed to an abstract idea without a practical application.
STEP 2B
Upon reconsideration of the indicia noted under Step 2A in concert with the Step 2B considerations, the additional claim element(s) amounts to (i) adding the words “apply it” (or an equivalent) with the judicial exception, or mere instructions to implement an abstract idea on a computer, (ii) adding insignificant extra-solution activity to the judicial exception, and/or (iii) generally linking the use of judicial exception to a particular technological environment or field of use. See MPEP §2106.07(a)(II). The same analysis applies in Step 2B, i.e., mere instructions to apply an exception using a generic computer component cannot integrate a judicial exception into a practical application at Step 2A or provide an inventive concept in Step 2B. The claim does not provide an inventive concept significantly more than the abstract idea.
Accordingly, these additional elements, when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea.
DEPENDENT CLAIMS
Dependent Claim(s) 2-7 and 9-13 recite claim limitations that further define the abstract idea recited in respective independent Claim(s) 1 and 8. As such, the dependent claims are also grouped an abstract idea utilizing the same rationale as previously asserted against the independent claims.
No additional computer components other than those found in the respective independent claims is recited, thus it is presumed that the claim is further utilizing the same generically recited computer.
As such, the dependent claims do not include any additional elements that integrate the abstract idea into a practical application of the judicial exception or are sufficient to amount to significantly more than the judicial exception when considered both individually and as an ordered combination.
Accordingly, the dependent claim(s) are also not patent eligible.
Appropriate correction is requested.
5. Claim Rejections - 35 USC § 103
The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action:
A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
The factual inquiries for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows:
1. Determining the scope and contents of the prior art.
2. Ascertaining the differences between the prior art and the claims at issue.
3. Resolving the level of ordinary skill in the pertinent art.
4. Considering objective evidence present in the application indicating obviousness or nonobviousness.
Claim(s) 1-13 is/are rejected under 35 U.S.C. 103 as being unpatentable over Dembo (US PG Pub. 2019/0197206) in view of Hawkes (Hawkes, Alan G. Hawkes Jump-Diffusions and Finance: A Brief History and Review. European Journal of Finance. April 23, 2020. pp. 1-17).
Regarding Claim 1, Dembo discloses a method comprising:
receiving, by a processor set, user input (expert input or input from data sources) from a graphical user interface of a user device, the user input defining an asset (historical data feeds), events related to the asset (historical data feeds), a target parameter (risk) for optimizing the asset, and a future time period (time horizon) for forecasting a future return of the asset. (see para. 129, 137, 195 and 206-207);
creating, by a processor set, a training data set using received user input, the training data set including time series data of a price of an asset (6 month of historical returns data, historical data, currency values, bond values, S&P index) and stochastic event data of events (events) related to the asset. (see para. 116, 206, 217 and 332-333);
creating, by the processor set, based on the received user input a probabilistic framework for modeling event intensity, event magnitude, and their effects on a probabilistic time series of a return of the asset by:
creating, by the processor set, an event intensity model by using a multivariate process (taking into account multiple variables, factors and indicators) for modelling an event intensity parameter (impact score) of one of the events (macro factors) related to the assets. (see para. 113-114, 116, 120 and 135);
wherein the creating the event intensity model comprises learning parameters (interconnected factors and indicators) of the event intensity model using machine learning and the training data set. (see para. 113-114, 116, 120 and 135);
adjusting (updating) the event intensity model (data value probabilities) to account for consensus updates (updated responses, new information) associated with the events related to the asset. (see para. 249, 260 and 313);
creating, by the processor set, a probabilistic time series model for estimating a dynamic covariance matrix (covariance matrix) that accounts for impacts of the events related to the asset. (see para. 200);
wherein the creating the probabilistic time series model comprises learning parameters of the probabilistic time series model using machine learning and the time series data of the price of the asset in the training data set. (see fig. 57-59; para. 266 and 364-366);
using the probabilistic time series model to predict a probability distribution of a return of the asset. (see fig. 51 and 57-59; para. 358 and 364-366);
predicting, by the processor set, a future return of the asset (portfolio) for the future time period using the probabilistic time series model. (see fig. 57-59; para. 364-366); and
transmitting, by the processor set, the predicted future return (valuation of portfolio) to be displayed on the graphical user interface. (see para. 13).
Dembo does not teach a method wherein the multivariate process is a multivariate Hawkes process.
Hawkes discloses a method wherein the multivariate process is a multivariate Hawkes process. (see pp. 3-4).
It would have been obvious to one of ordinary skill in the art at the effective filing date of the invention to have modified Dembo by incorporating a multivariate Hawkes process, as disclosed by Hawkes, as Hawkes processes “have become popular in a very wide range of applications, including Finance.” See Hawkes, p. 4.
Regarding Claim 2, Dembo discloses a method comprising configuring the probabilistic time series model by using a process such that the predicted probability distribution of the future return of the asset at a specific time comprises a normal distribution that accounts for volatility in the predicted future return of the asset. (see fig. 57-59).
Dembo does not teach a method wherein the process is a stochastic jump-diffusion process. (see pp. 3-6)
Hawkes discloses a method wherein the process is a stochastic jump-diffusion process. (see pp. 3-6).
It would have been obvious to one of ordinary skill in the art at the effective filing date of the invention to have modified Dembo and Hawkes by incorporating a stochastic jump-diffusion process, as disclosed by Hawkes, as stochastic jump-diffusion processes are used to “model various financial problems.” See Hawkes, p. 3.
Regarding Claim 3, Dembo discloses a method comprising adjusting (determining) the mean (average) of the normal distribution using the stochastic event data. (see fig. 51; para. 232, 234 and 236).
Dembo does not explicitly teach a method comprising adjusting a variance of the normal distribution using the stochastic event data, although a normal distribution inherently has a mean (i.e., the average of the data set) and a variance (i.e., the spread between numbers in a data set).
Hawkes discloses a method comprising adjusting the mean (stochastic mean) and a variance (stochastic volatility) of the normal distribution using the stochastic event data. (see p. 3). Examiner notes that volatility is a measure of the variance bounded by a specific time period. As such, measurement of volatility requires computation of variance.
It would have been obvious to one of ordinary skill in the art at the effective filing date of the invention to have modified Dembo and Hawkes by incorporating a model including a mean and a variance, as disclosed by Hawkes, as the data set inherently possesses a mean and variance.
Regarding Claim 4, Dembo discloses a method comprising creating an event magnitude model (magnitude of impact or shocks) that models a distribution of magnitude of the events (shock distributions) related to the asset based on previous magnitudes of the events (feedback) related to the asset and adjusting the mean (average) of the distribution upon receiving consensus updates (updated responses and new information) associated with the events related to the asset. (see fig. 5B-5D; para. 113, 116, 140, 189, 197, 230-236, 249, 260 and 313);
Regarding Claim 5, Dembo discloses a method wherein the asset is one of plural assets (portfolio is a basket of different equities, fixed income products and derivatives products) (see para. 144), and the method further comprising:
creating a respective event intensity model and probabilistic time series model for each of the plural assets (particular asset). (see para. 144); and
executing a portfolio optimization (reducing risk or issuing transaction instructions) for a portfolio including the plural assets using respective predicted future returns of the plural assets. (see para. 144 and 275).
Regarding Claim 6, Dembo discloses a method wherein the executing the portfolio optimization comprises:
running simulations using the respective probabilistic time series models (see para. 123 and 255-257); and
determining a portfolio, based on the simulations, that minimizes portfolio volatility (reduces maximum loss) or maximizes Sharpe ratio. (see para. 275).
Regarding Claim 7, Dembo discloses a method wherein the stochastic event data comprises revenue release data (balance sheet items) related to the asset and consensus adjustment data (morph factors, which adjust expert inputs) related to the asset. (see para. 7 and 190).
Regarding Claim 8, such claim recites substantially similar limitations as claimed in previously rejected claims and, therefore, would have been obvious based upon previously rejected claims.
Claim 8 differs from previous claims by additionally reciting a claim limitation pertaining to the data elements comprising stochastic event data.
Dembo also discloses a computer program product wherein:
the stochastic event data comprises: revenue release data (balance sheet data) that defines revenue of a company (organization) associated with the asset (item). (see para. 7); and
consensus adjustment data (benchmarks) that defines revenue estimation of the company aggregated from plural entities (the market) other than the company. (see para. 274-275).
Regarding Claims 9-13, such claims recite substantially similar limitations as claimed in previously rejected claims and, therefore, would have been obvious based upon previously rejected claims.
7. Response to Arguments
Applicant's arguments filed 9/17/2025 have been fully considered but they are not persuasive.
§101 Rejection
Step 2A Prong Two
Applicant argues that the claimed invention recites a practical application, specifically “an improvement in the functioning of a computer, or an improvement to other technology or technical field,” and, as such, satisfies Step 2A Prong Two of the §101 Guidelines. See Arguments, pp. 9-11.
Specifically, Applicant argues:
Independent claim 1 integrates the alleged judicial exception into a practical application by providing an improvement to financial technology. In particular, the claims improve the technical field of computer-based financial modeling and probabilistic time series forecasting of financial assets. Paragraphs [0018]-[0019], and [0023]-[0024] of Applicant's specification describe problems with current techniques that use computer-based modeling and probabilistic time series forecasting for stock price prediction and portfolio management. These paragraphs also describe how implementations of the invention address these problems and, thus, provide an improvement in the technical field of computer-based financial modeling and probabilistic time series forecasting of financial assets at least through: (i) an improved graphical interface for receiving user input defining an asset, events related to the asset, a target parameter for optimizing the asset, and a future time period for forecasting a future return of the asset; (ii) adjusting the event intensity model to account for consensus updates associated with the events related to the asset; and (iii) transmitting the predicted future return to be displayed on the graphical user interface of the user device. These features do not generally link implementation of a particular abstract idea on a generic computer, but instead provide a technical solution in financial technology that is necessarily rooted in computer-based technology. Accordingly, independent claim 1 integrates any alleged mental process or human activity steps into a practical application related to predicting future returns of a financial asset. See Arguments, p. 10 – emphasis added.
The Examiner respectfully disagrees.
An improvement to another technology or technical field requires an improvement to another technology (i.e., machinery or equipment) or a technical field (i.e., a field pertaining to or inherently tied to technology).
Applicant contends that the claimed invention improves a technical field, specifically the field of computer-based modeling and probabilistic time series forecasting.
The Examiner disagrees that modeling and probabilistic time series forecasting is a technical field (i.e., a field pertaining to or inherently tied to technology) and asserts that modeling and probabilistic time series forecasting is a non-technological field. Modeling and probabilistic time series forecasting whether classified as being within the field of mathematics, statistics or financial analysis, is a non-technical field. Utilization of a computer to perform modeling and probabilistic time series forecasting does not transform modeling and probabilistic time series forecasting into technical fields.
In DDR Holdings, LLC v. Hotels.com, the U.S. Court of Appeals stated:
As an initial matter, it is true that the claims here are similar to the claims in the cases discussed above in the sense that the claims involve both a computer and the Internet. But these claims stand apart because they do not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet. Instead, the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks. See DDR Holdings, LLC v. Hotels.com, 113 USPQ2d 1097, 1106 (Fed. Cir. 2014) – emphasis added.
In the instant case, the problem that the claimed invention is designed to overcome, failure of current techniques for stock price prediction and portfolio management to account for the impact of stochastic events on the time series data (see specification, para. 17), is not a problem specifically arising from the realm of computers. This problem is a standard business problem that exists outside the realm of computers and existed before the age of computers.
MPEP §2106.05(a) recites:
If it is asserted that the invention improves upon conventional functioning of a computer, or upon conventional technology or technological processes, a technical explanation as to how to implement the invention should be present in the specification. That is, the disclosure must provide sufficient details such that one of ordinary skill in the art would recognize the claimed invention as providing an improvement. The specification need not explicitly set forth the improvement, but it must describe the invention such that the improvement would be apparent to one of ordinary skill in the art. Conversely, if the specification explicitly sets forth an improvement but in a conclusory manner (i.e., a bare assertion of an improvement without the detail necessary to be apparent to a person of ordinary skill in the art), the examiner should not determine the claim improves technology. – emphasis added.
However, the specification does not provide any evidence that the claimed invention results in an improvement to the functioning of a computer, an improvement to conventional technology or technological processes, or is addressing a technology-based problem.
Additionally, the specification does not provide any evidence that there is even a technical (i.e., technology-based) problem to be solved. For example, the specification does not provide any evidence that existing technology was incapable of performing the claimed functions but for the claimed technical solution.
Additionally, MPEP §2106.05(f)(1) recites:
Whether the claim recites only the idea of a solution or outcome i.e., the claim fails to recite details of how a solution to a problem is accomplished. The recitation of claim limitations that attempt to cover any solution to an identified problem with no restriction on how the result is accomplished and no description of the mechanism for accomplishing the result, does not integrate a judicial exception into a practical application or provide significantly more because this type of recitation is equivalent to the words “apply it”. See Electric Power Group, LLC v. Alstom, S.A., 830 F.3d 1350, 1356, 119 USPQ2d 1739, 1743-44 (Fed. Cir. 2016); Intellectual Ventures I v. Symantec, 838 F.3d 1307, 1327, 120 USPQ2d 1353, 1366 (Fed. Cir. 2016); Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1348, 115 USPQ2d 1414, 1417 (Fed. Cir. 2015). In contrast, claiming a particular solution to a problem or a particular way to achieve a desired outcome may integrate the judicial exception into a practical application or provide significantly more. See Electric Power, 830 F.3d at 1356, 119 USPQ2d at 1743 – emphasis added.
Even assuming there was a technical problem, the claims, as written, fail to recite the details of how a technical solution to the technical problem was accomplished.
If there was a technical problem (e.g., existing technology was incapable of performing the claimed functions) then the claims should recite the details of the technical solution (e.g., how existing technology was improved to overcome this inability). However, the claims, as written, provide no such details and merely recite that the claimed functions (i.e., the outcome) are being performed.
Applicant further argues that the claims are similar to Example 21: Transmission of Stock Quote Data and, therefore, provide a practical integration of the abstract idea are acknowledged. See Arguments, p. 11.
The Examiner respectfully disagrees.
As a preliminary matter, the Examiner notes that Office Examples are meant to be for training purposes and do not have the force of legal precedent.
Further, Claim 2 of Example 21 was found to integrate the abstract idea into a practical application because:
The claimed invention addresses the Internet-centric challenge of alerting a subscriber with time sensitive information when the subscriber’s computer is offline. This is addressed by transmitting the alert over a wireless communication channel to activate the stock viewer application, which causes the alert to display and enables the connection of the remote subscriber computer to the data source over the Internet when the remote subscriber computer comes online. These are meaningful limitations that add more than generally linking the use of the abstract idea (the general concept of organizing and comparing data) to the Internet, because they solve an Internet-centric problem with a claimed solution that is necessarily rooted in computer technology, similar to the additional elements in DDR Holdings. See July 2015 Update Appendix 1: Examples, p. 4 – emphasis added.
Example 21 was deemed to satisfy Step 2A Prong Two as Example 21 solved a technology-based problem (e.g., receiving alerts when a computer is offline) with a technology-based solution (e.g., activation of an offline computer to receive and display alerts).
That is not analogous to the instant application.
The specification in the instant application does not provide any evidence that the claimed invention results in an improvement to the functioning of a computer, an improvement to conventional technology or technological processes, or is addressing a computer-centric problem. Nor that there is even a technical (i.e., technology-based) problem to be solved.
Applicant further argues:
Notably, the Federal Circuit has held, in McRO, that claimed methods of automatic lip synchronization and facial expression animation using computer-implemented rules ... [are] patent eligible under 35 U.S.C. §101, because they were not directed to an abstract idea. McRO, 837 F.3d at 1316. The basis for the McRO court's decision was that the claims were directed to an improvement in computer animation and thus did not recite a concept similar to previously identified abstract ideas. Id. The court relied on the specification's explanation of how the claimed rules enabled the automation of specific animation tasks that previously could not be automated. Id. at 1313. For at least these reasons, independent claim 1 should be deemed patent-eligible. See Arguments, p. 11.
The Examiner respectfully disagrees.
The court in McRO stated:
Claim 1 of the ′576 patent is focused on a specific asserted improvement in computer animation, i.e., the automatic use of rules of a particular type. We disagree with Defendants’ arguments that the claims simply use a computer as a tool to automate conventional activity. While the rules are embodied in computer software that is processed by general-purpose computers, Defendants provided no evidence that the process previously used by animators is the same as the process required by the claims. See Defs.’ Br. 10-15, 39-40. In support, Defendants point to the background section of the patents, but that information makes no suggestion that animators were previously employing the type of rules required by claim 1. Defendants concede an animator's process was driven by subjective determinations rather than specific, limited mathematical rules. The prior art “animator would decide what the animated face should look like at key points in time between the start and end times, and then ‘draw’ the face at those times.” Defs.’ Br. 10. The computer here is employed to perform a distinct process to automate a task previously performed by humans. McRO states that animators would initially set keyframes at the point a phoneme was pronounced to represent the corresponding morph target as a starting point for further fine tuning. J.A. 3573 at 8:53 (McRO's Claim Construction Presentation). This activity, even if automated by rules, would not be within the scope of the claims because it does not evaluate sub-sequences, generate transition parameters or apply transition parameters to create a final morph weight set. It is the incorporation of the claimed rules, not the use of the computer, that “improved [the] existing technological process” by allowing the automation of further tasks. Alice, 134 S. Ct. at 2358. This is unlike Flook, Bilski, and Alice, where the claimed computer-automated process and the prior method were carried out in the same way. Flook, 437 U.S. at 585-86; Bilski, 561 U.S. at 611; Alice, 134 S. Ct. at 2356. See McRO, Inc. v. Bandai Namco Games America Inc., 120 USPQ2d 1091, 1102 (Fed. Cir. 2016) - emphasis added.
In McRO, the court determined that the claimed invention recited a computer system utilizing specific rules that “enabled the automation of specific animation tasks that previously could only be performed subjectively by humans, when determining that the claims were directed to improvements in computer animation instead of an abstract idea.” See MPEP §2106.05(a). That determination allowed the court to classify the claimed invention in McRO as an improvement in an existing technological process (i.e., computer animation), unlike Alice where a computer was merely used as a tool to perform an existing process.
In the instant case, the claimed invention is not improving a technological process by reciting specific rules to automate a process that otherwise could not be automated. Rather the claimed invention in the instant case, like Alice, is using a computer and its existing capabilities as a tool to implement an abstract idea.
Examiner asserts that the claimed invention is analogous to Electric Power Group LLC v. Alstom SA (Fed. Cir. 2016) which stated:
The claims here are unlike the claims in Enfish. There, we 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, we 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 U.S. App. LEXIS 11687, 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. see Electric Power Group LLC v. Alstom SA, 119 USPQ2d 1739, 1742 (Fed. Cir. 2016) – emphasis added.
The claimed invention is not an improvement to computer technology or computer functionality. Rather, the claimed invention is applying a computer’s existing capabilities to implement a particular abstract idea. As in Electric Power Group, the focus of the claimed invention is not on an improvement in computers as tools but on improving an abstract idea (i.e., modeling and probabilistic time series forecasting) that uses computers as tools.
MPEP §2106.04(d) recites:
The courts have also identified limitations that did not integrate a judicial exception into a practical application:
Merely reciting the words “apply it” (or an equivalent) with the judicial exception, or merely including instructions to implement an abstract idea on a computer, or merely using a computer as a tool to perform an abstract idea, as discussed in MPEP § 2106.05(f); [and]
Generally linking the use of a judicial exception to a particular technological environment or field of use, as discussed in MPEP § 2106.05(h).
Examiner asserts that the additional elements amount to merely (1) including instructions to implement an abstract idea on a computer, or merely using a computer as a tool to perform an abstract idea, or alternatively, (2) merely links the use of a judicial exception to a particular technological environment or field of use.
§103 Rejection
Applicant argues that the previously asserted prior art (Dembo and Hawkes) fails to teach or suggest the newly amended claim limitations. See Arguments, pp. 12-14.
The §102 and/or §103 Rejection has been rewritten and the prior art remapped to account for the newly amended claim language.
8. Conclusion
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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/Jason M. Borlinghaus/Primary Examiner, Art Unit 3692 January 29, 2026