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 .
In view of the amendment, the examiner has withdrawn the previous rejection under 35 U.S.C first paragraph of 35 U.S.C. 112(a).
Claim Rejections - 35 USC §101
1. 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.
2. Claims 1, 5, 7, 11, 15, 17, and 21-47 are rejected under 35 U.S.C. 101 because the claimed
invention is directed to non-statutory subject matter.
Subject Matter Eligibility Standard
3. The examiner contends that, under the judicial exceptions enumerated in the 2019 PEG, to
determine the patent-eligibility of an application, a two- part analysis has to be conducted.
Part 1: it must be determined whether the claim is directed to one of the four statutory categories
of invention, i.e., process, machine, manufacture, or composition of matter.
Part 2A: Prong 1: (1) Determine if the claims are directed to an abstract idea or one of the
judicial exceptions. Examples of abstract ideas referenced in Alice Corp. include:
1. Certain method of organizing human activity such as Fundamental Economic Practices,
Commercial and Legal Interactions, or Managing Personal Behavior or Relationships or
Interactions Between People.
2. A mental process.
3. Mathematical relationships/formulas.
Part 2A: Prong 2: determine if the claim as a whole integrates the judicial exception into a
practical application.
Part 2B: determine if the claim provides an inventive concept.
Analysis
4. Under Step 1 of the analysis, it is found that the claim indeed recites a series of steps and
therefore, is a process - one of the statutory categories.
Under Step 2A (Prong 1), using claim 11 as the representative claim, it is determined that apart
from generic hardware and extra-solution activities discussed in Step 2A, Prong 2 below, the
claim as a whole recites a method of organizing human activity For instance, the claim language
"a method for managing encumbrances associated with assets; generate a cryptographic token associated with ownership of an asset; obtain a plurality of encumbrances on the asset; is a fundamental economic practice. Fundamental economic practices fall into the category of certain methods of organizing human activity. Thus, the claim recites a judicial exception, i.e., an abstract idea.
Under Step 2A (Prong 2), The examiner further contends that the claim recites a combination of
additional elements including "communicate with a first secure, immutable ledger having a first level of decentralization; communicate with a second secure, immutable ledger having a second level of decentralization; cause a first ledger entry to be recorded on a first secure, immutable
edger, the first secure, immutable ledger being maintained by a first plurality of nodes under a
first consensus mechanism and a first permission model, the first ledger entry including a
cryptographic token associated with ownership of an asset; cause a second ledger entry to be
recorded on a second secure, immutable ledger, the second secure, immutable ledger being
maintained by a second plurality of nodes under a second consensus mechanism and a
second permission model, the second ledger entry including a plurality of encumbrances on the
assets; one or more processors." These additional elements, considered in the context of claim 11
as a whole, do not integrate the abstract idea into a practical application because they simply
recite the steps of inputting, storing and communicating data using a generic computer system. In other words, these additional limitations are recited functionally without technical or technological details on how, i.e., by what algorithm or on what basis/method these processors are caused to perform the recited steps. The processors are simply a computer processor which is used in its ordinary capacity to process data, while the immutable ledger is simply a ledger of transaction that is used for storing data. For instance, the limitations “communicate with a first secure, immutable ledger having a first level of decentralization; communicate with a second secure” are nothing but insignificant extra-solution activities. Further, the limitation "wherein the second secure, immutable ledger provides a lower degree of decentralization relative to the secure, immutable ledger" does not recite additional elements, but it is recited to merely narrow the scope of the abstract idea. Thus, it is determined that claim 11 is not directed to a specific asserted improvement in computer technology or otherwise integrated into a practical application and thus is directed to a judicial exception.
Under Step 2B, it is determined that, taken alone, the additional elements in the claim amounts to
no more than mere instructions to apply the exception using a generic computer processor- that
is, mere instructions to apply a generic computer to the abstract idea. The only hardware or
additional elements beyond the abstract idea of claim 11 are the generically recited "immutable
ledger," and "processor." The specification does not state that any of these components are
anything other than well-understood, routine, and conventional, hardware components or
systems being used in their ordinary manner. Further, the filed specification supports the
determination that these components are well-understood, routine and conventional:
substantiates this, for instance at paras [0088]. Thus, applying an exception using a generic
computer cannot integrate a judicial exception into a practical application or provide an inventive
concept. And looking at the limitations as an ordered combination of elements add nothing that is
not already present when looking at the elements taken individually. The examiner contends that
the 'novelty' of any element or steps in a process, or even of the process itself, is of no relevance
in determining whether the subject matter of a claim falls within the § 101 categories of possibly
patentable subject matter." Diamond V. Diehr, 450 U.S. 175, 188- - 89 (1981)." A novel and
nonobvious claim directed to a purely abstract idea is, nonetheless, patent ineligible. See Mayo,
566 U.S. at 90." Specifically, an improvement to an abstract idea cannot be a basis for
determining that the claim recites significantly more than an abstract idea. Furthermore, relying
on a "processor" to "perform routine tasks more quickly or more accurately is insufficient to
render a claim patent eligible." OJP Techs., Inc. V. Amazon.com, Inc., 7788 F.3d 1359, 1363
(Fed. Cir. 2015). Accordingly, the examiner concludes that the claim does not recite
additional elements that amount to significantly more than the judicial exception within the
meaning of the 2019 Guidance. Note: The analysis above applies to all statutory categories of
invention. For instance, independent claims 1 and 37, though styled as a system and a computer-
readable medium claims respectively, recite substantially the same limitations as claim 11,
above, and thus are subject to the same analysis and rejection as in claim 11. Further, the
limitations in the dependent claims are thus subject to the same analysis as in claim 11 and are
rejected using the same rationale as in claim 11 above. More specifically, dependent claims 5,
15, 23, 25-28, 31, 33-36, 38, 42, 44-47 do not recite additional elements, but they are simply
recited to further narrow the scope of the abstract idea. Also, dependent claims 7, 17, 21-22, 24,
29-30, 32, 39-41, 43 recite additional elements, but these additional elements are mere data
gathering steps (considered to be insignificant extra-solution activities) and the automation of
mental tasks.
Response to Arguments
Applicant's arguments filed on 03/17/2026 have been fully considered but they are not
persuasive.
In response to applicant's arguments that the additional elements integrate the judicial exception
into a practical application, the examiner disagrees. The examiner further contends that the claim recites a combination of additional elements including "communicate with a first secure, immutable ledger having a first level of decentralization; communicate with a second secure, immutable ledger having a second level of decentralization; cause a first ledger entry to be recorded on a first secure, immutable edger, the first secure, immutable ledger being maintained by a first plurality of nodes under a first consensus mechanism and a first permission model, the first ledger entry including a cryptographic token associated with ownership of an asset; cause a second ledger entry to be recorded on a second secure, immutable ledger, the second secure, immutable ledger being maintained by a second plurality of nodes under a second consensus mechanism and a second permission model, the second ledger entry including a plurality of encumbrances on the assets; one or more processors." These additional elements, considered in the context of claim 11 as a whole, do not integrate the abstract idea into a practical application because they simply recite the steps of inputting, storing and communicating data using a generic computer system. In other words, these additional limitations are recited functionally without technical or technological details on how, i.e., by what algorithm or on what basis/method these processors are caused to perform the recited steps. The processors are simply a computer processor which is used in its ordinary capacity to process data, while the immutable ledger is simply a ledger of transaction that is used for storing data. For instance, the limitations “communicate with a first secure, immutable ledger having a first level of decentralization; communicate with a second secure” are nothing but insignificant extra-solution activities. Further, the limitation "wherein the second secure, immutable ledger provides a lower degree of decentralization relative to the secure, immutable ledger" does not recite additional elements, but it is recited to merely narrow the scope of the abstract idea. Thus, it is determined that claim 11 is not directed to a specific asserted improvement in computer technology or otherwise integrated into a practical application and thus is directed to a judicial exception.
In response to applicant's argument that the additional elements amount to significantly more
than the underlying abstract idea, the examiner disagrees. It is determined that, taken alone, the
additional elements in the claim amounts to no more than mere instructions to apply the
exception using a generic computer processor- that is, mere instructions to apply a generic
computer to the abstract idea. The only hardware or additional elements beyond the abstract idea
of claim 11 are the generically recited "immutable ledger," and "processor." The specification
does not state that any of these components are anything other than well-understood, routine, and
conventional, hardware components or systems being used in their ordinary manner. Further, the
filed specification supports the determination that these components are well-understood, routine
and conventional: substantiates this, for instance at paras [0088]. Thus, applying an exception
using a generic computer cannot integrate a judicial exception into a practical application or
provide an inventive concept. And looking at the limitations as an ordered combination of
elements add nothing that is not already present when looking at the elements taken individually.
The examiner contends that the 'novelty' of any element or steps in a process, or even of the
process itself, is of no relevance in determining whether the subject matter of a claim falls within
the § 101 categories of possibly patentable subject matter." Diamond V. Diehr, 450 U.S. 175,
188- 89 (1981)." A novel and nonobvious claim directed to a purely abstract idea is, nonetheless
nonetheless, patent ineligible. See Mayo, 566 U.S. at 90." Specifically, an improvement to an
abstract idea cannot be a basis for determining that the claim recites significantly more than an
abstract idea. Furthermore, relying on a "processor" to "perform routine tasks more quickly or
more accurately is insufficient to render a claim patent eligible." OJP Techs., Inc. V.
Amazon.com, Inc., 7788F.3d 1359, 1363 (Fed. Cir. 2015). Accordingly, the examiner concludes
that the claim does not recite additional elements that amount to significantly more than the
judicial exception within the meaning of the 2019 Guidance. Note: The analysis above applies to
all statutory categories of invention.
The examiner went through Mr. Jeff Livesay's Declaration and found the arguments in it
unpersuasive. The examiner contends that there is a clear difference between the improvement in
computer functionality, on one hand, and the use of existing computer as tools to perform a
particular task, on the other. The examiner contends that there is a clear difference between the
improvement in computer functionality, on one hand, and the use of existing computer as tools to
perform a particular task, on the other. The alleged advantages and improvements that applicant
touts on pages 11-12 of the remarks filed on 01/08/26 do not concern an improvement to
computer technology and capabilities but instead relate to an alleged improvement in computer-
based process; that is, a process in which a computer is used as a tool in its ordinary capacity
which is to process data. ("It has been clear since Alice that a claimed invention's use of the
ineligible concept to which it is directed cannot supply the inventive concept that renders the
invention 'significantly more' than that ineligible concept"); Synopsys, Inc. V. Mentor
Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016) ("[A] claim for a new abstract idea is still
an abstract idea"); SAP Am., Inc. V. InvestPic, LLC, 898 F.3d 1161, 1168 (Fed. Cir. 2018)
("What is needed is an inventive concept in the non-abstract application realm'). In all, the
specification fails to show a technical improvement, rather it shows the improvement to the
abstract idea itself. Further, the solution addressed by the applicant's claims is a business
problem and not a technical problem. Rather than addressing a problem unique to the technology
in which the solution is implemented, the applicant's claim merely automates, using generic
computer technology, a business process in which profitability is increased by processing
transaction. Thus, it is determined that the claim is not directed to a specific asserted
improvement in computer technology or otherwise integrated into a practical application and
thus is directed to a judicial exception.
In all, the Declaration fails to show a technical improvement, rather it shows the
improvement to the abstract idea itself. The one or more processors has been applied post-hoc to
the abstract idea and a specific implementation of a solution to a problem in the software arts is
not present. The examiner further contends that the improvements that Mr. Livesay attested to, in
the Declaration, are not found anywhere in the claim, nor does the spec provides support for
what qualifies as the claimed technical improvements.
The examiner further contends that the alleged technical solution is actually a commercial
solution not a technical solution. As the Federal Circuit explained in Bancorp Svcs., LLC V. Sun
Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1279 (Fed. Cir. 2012), both Research
Corp. and SiRF Tech, involved improvements to the underlying technology itself. That is not the
case here. Rather here, as in Bancorp, the claimed invention merely uses the underlying computer technology in its ordinary capacity to perform processes "more efficiently.' See
Bancorp, 687 F.3d at 1279.
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.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to OJO O OYEBISI whose telephone number is (571)272-8298. The examiner can normally be reached on Monday-Friday, 9am-7pm. Examiner interviews are
available via telephone, in-person, and video conferencing using a USPTO supplied web-based
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can be reached at 571-272-8103. The fax phone number for the organization where this
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/OJO O OYEBISI/
Primary Examiner, Art Unit 3695
Prosecution Insights