DETAILED ACTION
Notice of Pre-AIA or AIA Status
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Continued Examination Under 37 CFR 1.114
A request for continued examination under 37 CFR 1.114, including the fee set forth in 37 CFR 1.17(e), was filed in this application after final rejection. Since this application is eligible for continued examination under 37 CFR 1.114, and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114. Applicant's submission filed on 5/8/2026 has been entered.
Status
This action is in response to the amendment filed on 5/8/2026. Claims 1, 5-7, 11-16 are pending. Claims 1 and 7 amended. No claims have been added. No claims are currently cancelled.
Response to Arguments
Applicant's arguments filed 5/8/2026 have been fully considered but they are not persuasive. The applicant has argued the 101 rejection specifically “To address this, a central computer system according to the claimed invention collects large and diverse historical data, and dynamically partitions and distributes data to nodes based on each node's real-time workload, including available memory and processors, instead of splitting equally. Paragraphs [0009] through [0013] of the original specification teach how timely processing of real-estate data may prevent some of the distressed sales that occur near a real-estate valuation bubble peak or burst due to lack of current information. Thereafter, the system according to the claimed invention receives the processed outputs (historical real estate values such as estimated cap rates) from the nodes, then calculates cap rate spreads (which is a cap rate minus 10 year treasury yield, defines damages periods where spreads increase more than 20% over two years, for example, and tags the previous low as a peak or s tart of a major downturn. It is respectfully submitted that the above amended particulars form an essential part of the claimed process for generating a prediction of a future peak in real estate values. Under Step 2A, Prong 2, the presently pending claims recite a specific, practical application for predicting real estate values and do not simply recite the judicial exception. Therefore, under the 2019 PEG, Step 2A, Prong 2, and MPEP 2106.05(a), these claims "reflect an improvement to [a] technical field" and thus integrate the alleged judicial exception into a practical application.” The examiner respectfully disagrees. The cap rate spread calculation and damage period determination are directed to the abstract idea and do not integrate the abstract idea into a practical application. Specifically reciting more details about the abstract idea does not integrate the abstract idea into a practical application. The amended limitations do not reflect an improvement to a technical field. The improvement the applicant identifies a more accurate way of forecasting commercial real estate downturns by benchmarking cap rates against Treasury yields and flagging threshold based “damage periods” is at most an improvement to the field of real estate financial analysis. An improvement to an abstract idea is not the same as an improvement to a technology or technical field, even where the claimed statistical method allegedly produces a more reliable financial result. The claimed memory device, network interface, and processor perform the same generic functions both before and after the amendment, at most the formulas and financial inputs my have changed. This appears to be more of a refinement of an abstract idea and odes not satisfy Step 2A, Prong 2, no matter how essential the refinement is to producing the claimed output.
The applicant has argued “Like the invention claimed in McRO, the presently pending claims provide "a particular way to achieve a desired outcome," here, of dividing the workload into subtasks manageable by the nodes and calculating cap rate spreads and identifying "damage periods", as amended, provides a valuable commercial real estate bubbles that were not available. Accordingly, for at least the foregoing reasons, Applicant respectfully submits that under Step 2A, Prong 2, all presently pending claims are directed to a practical application, and Applicant requests that the § 101 rejections be withdrawn.” The examiner respectfully disagrees. In McRO, the court held that, although the processes were previously performed by humans, “the traditional process and newly claimed method . . . produced . . . results in fundamentally different ways.” FairWarning v. Iatric Systems, 839 F.3d 1089, 1094 (Fed. Cir. 2016) (differentiating the claims at issue from those in McRO). In McRO, “it was the incorporation of the claimed rules not the use of the computer, that improved the existing technology process,” because the prior process performed by humans “was driven by subjective determinations rather than specific, limited mathematical rules.” 837 F.3d at 1314 (internal quotation marks, citation, and alterations omitted). In contrast the underlying activity of the Applicant’s claims is comparing a real estate yield metric to a benchmark Treasury rate and flagging the result against a threshold, this is a financial-analysis calculation. The applicant has not identified any way in which the claimed cap rate spread/ damage period/ peak calculations cause a computer to do something it could not previously do, or improve the functioning of the memory device, network interface, or processor recited in the claim. The additional elements remain generic components used in their ordinary capacity to gather, move, and store data so that the abstract calculations can be performed on it. The applicant has not argued that the claimed processes of distributing data in a manner technologically different from those which humans used, albeit with less efficiency, before the invention was claimed. The claims in McRO were not directed to an abstract idea, but instead were directed to “a specific asserted improvement in computer animation, i.e., the automatic use of rules of a particular type.” The “claimed improvement [was] allowing computers to produce ‘accurate and realistic lip synchronization and facial expressions in animated characters’ that previously could only be produced by human animators.” The claimed rules in McRO transformed a traditionally subjective process performed by human artists into a mathematically automated process executed on computers. Use of a computer as a tool to perform an abstract idea more quickly or on a larger data set does not integrate the idea into a practical application.
The newly added limitations do not remove the claim from the abstract idea groupings. “Calculate cap rate spreads by subtracting ten-year Treasury security yields from estimated commercial transaction capitalization rates” is a mathematical calculation (subtraction of one numerical value from another) and is identified as a mathematical concept. “Identify damage periods based on increase more than a predetermined percentage threshold over a plurality of time periods in the cap rate spreads” is a mathematical comparison against a threshold, and additionally is a step that covers performance in the human mind with the aid of pen and/or paper. None of these steps requires a computer to perform. Adding more specific mathematical steps to an already abstract idea narrows the abstract idea itself; it does not transform it into something other than an abstract idea.
The claimed invention is simply utilizing a generic computer for the benefits that computers provide, i.e. computers are faster and more efficient, while failing to improve upon the technology. Not only does the applicant fail to claim big data, the broadest reasonable interpretation of the claims does not require “big data” to perform the steps of the invention. Further, the applicant has filed to claim or define “intelligent bigdata chunking.” The claims also do not recite additional elements sufficient to integrate the judicial exceptions into a practical application. Aside from the abstract idea of generating a prediction, the additional elements in the apparatus of claim 1 are a memory device, a network interface, and a processor configured to (a) communicate with remote sources of data pertaining to historical real estate values, (b) transmit requests (c) calculate the data to a plurality of network nodes according to the nodes’ workloads, (d) distribute the historical variable data (e) receive the data from the nodes, (f) identify a plurality of peaks in the historical real estate values, and (g) generate a prediction of future peaks based on the data, transmit an alert that includes the prediction. The applicant is claiming something that maybe barely over one terabyte but has support for “large data” being several terabytes. Clearly, the applicant is not claiming “a massive amount of data.” The claim is not limited to big data. The machines recited in the claims perform as commonly-understood and routinely expected in the art. Applicant’s inventive concept still seems to lie completely in the abstract idea (judicial exception) itself. It appears that all the features of the computer system perform as normal, generic features of a system. The Supreme Court’s concern that drives this “exclusionary principle” is pre-emption. Alice Corp., 573 U.S. at 216, 110 USPQ2d at 1980. The Court has held that a claim may not preempt abstract ideas, laws of nature, or natural phenomena, even if the judicial exception is narrow (e.g., a particular mathematical formula such as the Arrhenius equation). See, e.g., Mayo, 566 U.S. at 79-80, 86-87, 101 USPQ2d at 1968-69, 1971 (claims directed to “narrow laws that may have limited applications” held ineligible); Flook, 437 U.S. at 589-90, 198 USPQ at 197 (claims that did not “wholly preempt the mathematical formula” held ineligible). This is because such a patent would “in practical effect [] be a patent on the [abstract idea, law of nature or natural phenomenon] itself.” Benson, 409 U.S. at 71- 72, 175 USPQ at 676. The concern over preemption was expressed as early as 1852. See Le Roy v. Tatham, 55 U.S. (14 How.) 156, 175 (1852) (“A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.”).
Applicant’s invention is directed to a “method for predicting real estate bubbles based on big data analytics.” The Specification explains that “[v]ast amounts of historical data may need to be digitally processed to produce a quality prediction of ebbs and flows in the real estate market.” Spec. ¶ 13. To accommodate the large amount of data used to predict peaks in real estate values, Applicant’s invention distributes the data among “a plurality of nodes on a network such that a size of a [data] portion assigned to a respective node is in accordance with a real-time workload of the respective node.” ¶ 14. Although the claims recite “computer systems and software to process the data to perform the claimed abstract idea steps, this implementing the abstract idea in the manner of ‘apply it’ and confining the abstract idea to a particular technological environment . . . does not provide ‘something more’ to make the claims patent eligible.”
The independent claims recite a generic apparatus with a processor that generate[s] a prediction of a future peak in real estate values based at least partially on [a] plurality of previous peaks. Forming a prediction as recited in claim 1 involves making a judgment as to a future condition based on an evaluation of past conditions, which can be accomplished using the human mind. Accordingly claim 1 recites an abstract idea, in the form of a mental process. Claim 1 involves using a processor. As explained in the 2019 Office Guidance, however, “[i]f a claim, under its broadest reasonable interpretation, covers performance in the mind but for the recitation of generic computer components, then it is still in the mental processes category unless the claim cannot practically be performed in the mind.” 84 Fed. Reg. at 52 n.14 (citing Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016)). In the present case, claim 1 merely requires generating a prediction based on historical data. The dependent claims involve calculations and dividing the calculated values. The claims recite using a mathematical calculation, which is an abstract idea. See Office Guidance (84 Fed. Reg. at 52 (mathematical concepts include mathematical relationships and mathematical calculations)).
Claims can recite a mental process even if they are claimed as being performed on a computer. The Supreme Court recognized this in Benson, determining that a mathematical algorithm for converting binary coded decimal to pure binary within a computer’s shift register was an abstract idea. The Court concluded that the algorithm could be performed purely mentally even though the claimed procedures “can be carried out in existing computers long in use, no new machinery being necessary.” 409 U.S at 67, 175 USPQ at 675. See also Mortgage Grader, 811 F.3d at 1324, 117 USPQ2d at 1699 (concluding that concept of “anonymous loan shopping” recited in a computer system claim is an abstract idea because it could be “performed by humans without a computer”). The applicant is merely using a computer as a tool to perform a mental process. An example of a case in which a computer was used as a tool to perform a mental process is Mortgage Grader, 811 F.3d. at 1324, 117 USPQ2d at 1699. The patentee in Mortgage Grader claimed a computer-implemented system for enabling borrowers to anonymously shop for loan packages offered by a plurality of lenders, comprising a database that stores loan package data from the lenders, and a computer system providing an interface and a grading module. The interface prompts a borrower to enter personal information, which the grading module uses to calculate the borrower’s credit grading, and allows the borrower to identify and compare loan packages in the database using the credit grading. 811 F.3d. at 1318, 117 USPQ2d at 1695. The Federal Circuit determined that these claims were directed to the concept of “anonymous loan shopping”, which was a concept that could be “performed by humans without a computer.” 811 F.3d. at 1324, 117 USPQ2d at 1699. Another example is Berkheimer v. HP, Inc., 881 F.3d 1360, 125 USPQ2d 1649 (Fed. Cir. 2018), in which the patentee claimed methods for parsing and evaluating data using a computer processing system. The Federal Circuit determined that these claims were directed to mental processes of parsing and comparing data, because the steps were recited at a high level of generality and merely used computers as a tool to perform the processes. 881 F.3d at 1366, 125 USPQ2d at 1652-53. Because claim 1 merely recites using the computer elements, including the processor, as tools to perform the abstract idea (the prediction), the computer elements in claim 1 do not integrate the abstract idea into a practical application. See Office Guidance (84 Fed. Reg. at 55 (example in which a judicial exception is not integrated into a practical application includes situation in which claim “merely includes instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea”). The data gathering and organizing steps, or the step of transmitting an alert that includes the prediction, does not integrate the prediction into a practical application. See Office Guidance (84 Fed. Reg. at 55 n.31 (additional element that merely adds insignificant extra-solution activity to a judicial exception includes “mere data gathering such as a step of obtaining information about credit card transactions so that the information can be analyzed in order to detect whether the transactions were fraudulent”)). The previous 101 rejection is maintained an updated in view of applicant’s amendments.
The previous 35 U.S.C. 103 rejection of claims 1, 5-7, and 11-16 under have been withdrawn, based on Applicant's amendment. As previously applied, the combination of Fleming (US 20130282596 A1), Florance et al. (US 20050203768 A1), Nordstrom at al. (US 8601112 B1), Roehner (2006), and Zhang (2014) disclosed the limitations of identifying a plurality of previous peaks in the historical real estate values and identifying real estate price peaks directly from the magnitude and symmetry of historical price increases. However, claims 1 and 7, as amended recite (i) a cap rate spread is calculated by subtracting the ten-year Treasury security yield from the estimated commercial transaction capitalization rate, (ii) a "damage period" is identified wherever the spread increases more than a predetermined percentage threshold over a plurality of time periods, and (iii) the previous peak is identified based on the identified damage periods which correspond to a start of a major downturn in real estate values. None of the references of record, individually or in combination as previously applied, teach or suggest this cap rate spread, identifying damage periods based on threshold values based claim limitations. Although a few limitations were highlight It is not in based on one limitation but the combination of all the claimed limitations that the previous 103 rejection is withdrawn. Accordingly, the previous 103 rejection is withdrawn after an updated search and further consideration.
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, 5-7, 11-16 are rejected under 35 USC 101 because the claimed invention is directed to a judicial exception (i.e. abstract idea) without anything significantly more.
Step 2A Prong 1
Claims 1, 7, recite communicating historic data, transmitting requests, calculating portions of historical data, distributing the historical data, receiving historical data, calculating cap rate spreads, identifying damage periods, identifying peaks in the historical data, generating a prediction of a future peak, and transmitting an alert constituting an abstract idea based on/using “a mathematical formula”. The claim(s) recite(s) mathematical relationships/formulas and a mental process. Specifically the independent claims recite:
(a) mental process: as drafted, the claim recites the limitations of communicate, transmit, calculate, distribute, receive, calculate, identify, generate, and transmit data which is a process that, under its broadest reasonable interpretation, covers performance of the limitation in the mind but for the recitation of generic computer components. That is, other than reciting “a network interface” nothing in the claim encompasses the user using data to create a prediction. Forming a prediction as recited in claim involves making a judgment as to a future condition based on an evaluation of past conditions, which can be accomplished using the human mind. The mere nominal recitation of a generic apparatus with generic components does not take the claim limitation out of the mental processes grouping. This limitation is a mental process.
(b) mathematical formula: The claim recites a mathematical concept (which can include a mathematical relationships, mathematical formulas or equations, and mathematical calculations), and in this case the calculation of historical variable data and a prediction of a future peak in real estate values. Thus, the claim recites a mathematical calculations in at least “assigning time periods based on a size of the historical variable data covering a respective time period…calculate cap rate spreads by subtracting ten-year Treasury security yields from estimated commercial transaction capitalization rates… identify damage periods based on increase more than a predetermined percentage threshold over a plurality of time periods in the cap rate spreads…” Each of these is a mathematical relationship or calculation applied to data, falling within the mathematical concepts and calculations grouping. “Mathematical Calculations” A claim that recites a mathematical calculation will be considered as falling within the “mathematical concepts” grouping. A mathematical calculation is a mathematical operation (such as multiplication) or an act of calculating using mathematical methods to determine a variable or number, e.g., performing an arithmetic operation such as exponentiation. There is no particular word or set of words that indicates a claim recites a mathematical calculation. That is, a claim does not have to recite the word “calculating” in order to be considered a mathematical calculation. For example, a step of “determining” a variable or number using mathematical methods or “performing” a mathematical operation may also be considered mathematical calculations when the broadest reasonable interpretation.
Dependent claims 5-6, 11-16 further narrow the abstract idea identified in the independent claims and do not introduce further additional elements for consideration.
Step 2A Prong 2
Independent claims 1 and 7 do not integrate the judicial exception into a practical application. Claim 1 is an apparatus comprising “a memory device; a network interface; at least one processor.” Claim 1 further recites the additional elements of “communicate via the network interface with remote data sources”, “transmit, via the network interface, requests respectively to each of a plurality of nodes”, “distribute, by transmission via the network interface”, “receive, via the network interface“, “nodes on a network”, “transmit an alert.” Claim 7 is a method of an electronic device. Claim 7 further recites the additional elements of “communicating via the network interface with remote data sources”, “transmitting, via the network interface”, “calculating, via at least one processor, for each of the plurality of nodes” “distributing, by transmission via the network interface”, “receiving, via the network interface“, “identifying, via the at least one processor,” “generating, via the at least one processor,” “nodes on a network“, “transmitting an alert.” These additional elements are mere instructions to implement an abstract idea using a computer in its ordinary capacity, or merely uses the computer as a tool to perform the identified abstract idea. Use of a computer or other machinery in its ordinary capacity for performing the steps of the abstract idea 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., mathematical concept) does not integrate a judicial exception into a practical application. See MPEP 2106.05(f).
Therefore, the additional elements of the independent claims, when considered both individually and in combination, are not sufficient to prove integration into a practical application.
Dependent claims 5-6, 11-16 further narrow the abstract idea identified in the independent claims and do not introduce further additional elements for consideration, which does not integrate the judicial exception into a practical application.
Step 2B
Independent claims 1, 7 do not comprise anything significantly more than the judicial exception. As can be seen above with respect to Step 2A, Prong 2, Claim 1 is an apparatus comprising “a memory device; a network interface; at least one processor.” Claim 1 further recites the additional elements of “communicate via the network interface with remote data sources”, “transmit, via the network interface, requests respectively to each of a plurality of nodes”, “distribute, by transmission via the network interface”, “receive, via the network interface“, “nodes on a network”, “transmit an alert.” Claim 7 is a method of an electronic device. Claim 7 further recites the additional elements of “communicating via the network interface with remote data sources”, “transmitting, via the network interface”, “calculating, via at least one processor, for each of the plurality of nodes” “distributing, by transmission via the network interface”, “receiving, via the network interface“, “identifying, via the at least one processor,” “generating, via the at least one processor,” “nodes on a network“, “transmitting an alert.” These additional elements are mere instructions to implement an abstract idea using a computer in its ordinary capacity, or merely uses the computer as a tool to perform the identified abstract idea. Use of a computer or other machinery in its ordinary capacity for performing the steps of the abstract idea 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., mathematical concept) is not anything significantly more than the judicial exception. See MPEP 2106.05(f).
The additional elements of the independent claims, when considered both individually and in combination, do not comprise anything significantly more than the judicial exception.
Dependent claims 5-6, 11-16 further narrow the abstract idea identified in the independent claims and do not introduce further additional elements for consideration, which is not anything significantly more than the judicial exception.
Therefore based on the above analysis as conducted based on MPEP 2106 from the United States Patent and Trademark Office the claims are viewed as a court recognized abstract idea, are viewed as a judicial exception, does not integrate the claims into a practical application, does not provide significantly more, and does not provide an inventive concept, therefore the claims are ineligible.
The additional elements of the dependent claims, when considered both individually and in the context of the independent claims, are not anything significantly more than the judicial exception.
Accordingly, claims 1, 5-7, 11-16 are rejected under 35 USC 101.
Other pertinent prior art includes Hamilton et al. (US 20040064293 A1) which discloses maintenance of historical data while substantially retaining measured peaks and valleys in the data. Hrischuk et al. (US 20150199388 A1) which discloses monitoring and analyzing quality of service (QOS) performance in a storage system. Kagarlis et a. (US 20080167941 A1) which discloses price indexing. Dozier (US 20150058234 A1) which discloses valuation modeling. Birtel et al. (US 20110218826 A1) which discloses residential real estate risk mitigation and, more particularly, to a system and method of assigning home price volatility using a new financial instrument. Kagarlis et al. (US 20080167889 A1) which discloses price indexing.
Conclusion
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JAMIE H. AUSTIN
Examiner
Art Unit 3625
/JAMIE H AUSTIN/Primary Examiner, Art Unit 3625
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