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 .
A request for continued examination[RCEX] 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and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114.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 01/29/2026 has been entered.
DETAILED ACTION
The following Non-Final office action is in response to applicant’s RCEX with Amendments/Remarks filed on 01/29/2026.
Priority Date: Prov.(06/23/2023)
Claim Status:
Amended claims: 1, 8,12, and 15
Canceled claims:7, 14, and 20
New claims: 21-22
Pending claims: 1-6, 8-13, 15-19 and 21-22
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 1-6, 8-13, 15-19, and 21-22 are rejected under 35 U.S.C. 101 because the claimed invention is directed to non-statutory subject matter.
In particular, claims are directed to a judicial exception (Abstract idea) without significantly more.
When considering subject matter eligibility under 35 U.S.C. 101, (Step-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. (Step-2A) If the claim does fall within one of the statutory categories, it must then be determined whether the claim is directed to a judicial exception (i.e., law of nature, natural phenomenon, and abstract idea), and if so, (Step-2B) it must additionally be determined whether the claim is a patent-eligible application of the exception. If an abstract idea is present in the claim, any element or combination of elements in the claim must be sufficient to ensure that the claim amounts to significantly more than the abstract idea itself.
Examples of abstract ideas grouping include: (a) Mental processes; (b) Certain methods of organizing human activities [ i. Fundamental Economic Practice; ii. Commercial or Legal Interaction; iii. Managing Personal behavior or Relations between People]; and (c) Mathematical relationships/formulas. Alice Corporation Pty. Ltd. v. CLS Bank International, et al., 573 U.S. (2014).
Analysis is based on the 2019 Revised Patent Eligibility Guidance (2019 PEG)-(see MPEP § 2106.04(II) and 2106.04(d).
[Step-1] The claims are directed to a method/system/machine, which are a statutory category of invention.
Claim 1 (exemplary) recites a series of steps for identifying an Anomalous Transaction.
[Step-2A]-Prong 1:The method claim 1 is then analyzed to determine whether it is directed to a judicial exception:
The claim 1 recites the limitations of:
receiving a set of order features associated with a transaction;
generating a predicted difference value, the predicted difference value comprising a predicted difference between an actual cost of the transaction and an expected cost of the transaction, wherein generating the predicted difference value comprises applying a first model to the set of order features;
training an error term prediction model to predict a measure of confidence in the prediction of the trained first model, comprising:
receiving a training set of order features describing a transaction and a corresponding set of training labels that indicate the actual difference value that occurred for the transaction, applying the trained first model to the set of order features to generate a difference prediction, generating a training error term based on the difference prediction and the set of training labels, applying parameters of the error term prediction model to the order features to generate an error term prediction, and updating parameters of the error term prediction model to reduce a difference between the error term prediction and the training error term;
generating a predicted error term associated with the predicted difference value of the transaction, wherein generating the predicted error term comprises applying the error term prediction model to the set of order features;
producing a distribution that represents likelihoods of different amounts of difference based on the predicted difference value and the predicted error term, wherein each position on the distribution corresponds to an amount of difference and an associated likelihood that…the amount of difference will occur;
obtaining an actual difference value associated with the transaction; identifying a position of the actual difference value on the distribution to determine an associated likelihood that the actual difference value would occur;
determining whether the associated likelihood that the actual difference value would occur is above a predetermined threshold percentile; and responsive to determining that the associated likelihood that the actual difference value would occur exceeds the predetermined threshold percentile, flagging the transaction as having an unexpectedly high amount of overspend.
The claimed method/system/machine simply describes series of steps: identifying an Anomalous Transaction.
These limitations, as drafted, are processes that, under its broadest reasonable interpretation, covers performance of the limitations via human commercial or business or transactional activities/interactions, but for the recitation of generic computer components. That is, other than reciting one or more servers/processors, devices and computer network nothing in the claim precludes the limitations from practically being performed by organizing human business activity. For example, without the structure elements language, the claim encompasses the activities that can be performed manually between the users and a third party. These limitations are directed to an abstract idea because they are business interaction/sale activity that falls within the enumerated group of “certain methods of organizing human activity” in the 2019 PEG.
[Step-2A]-Prong 2:
Next, the claim is analyzed to determine if it is integrated into a practical application. The claim recites additional limitation of using one or more servers/processors, devices and computer network to perform the steps. The processor in the steps is recited at a high level of generality, i.e., as a generic processor performing a generic computer function of processing data. This generic processor limitation is no more than mere instructions to apply the exception using generic computer component. Accordingly, these additional elements do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea. The claim is directed to the abstract idea.
[Step-2B]
Next, the claim is analyzed to determine if there are additional claim limitations that individually, or as an ordered combination, ensure that the claim amounts to significantly more than the abstract ideas (whether claim provides inventive concept).
As discussed above, the recitation of the claimed limitations amounts to mere instructions to implement the abstract idea on a processor (using the processor as a tool to implement the abstract idea). Taking the additional elements individually and in combination, the processor at each step of the process performs purely generic computer functions. As such, there is no inventive concept sufficient to transform the claimed subject matter into a patent-eligible application. The same analysis applies here, i.e., mere instructions to apply an exception using a generic computer component cannot integrate a judicial exception into a practical application at or provide an inventive concept.
Viewing the limitations as an ordered combination does not add anything further than looking at the limitations individually. When viewed either individually, or as an ordered combination, the additional limitations do not amount to a claim as a whole that is significantly more than the abstract idea itself. Therefore, the claim does not amount to significantly more than the recited abstract idea, and the claim is not patent eligible. The analysis above applies to all statutory categories of invention including independent claims 8 and 15.
Furthermore, the dependent claims 2-6, 9-13, 16-19, and 21-22 do not resolve the issues raised in the independent claims.
The dependent claims 2-6, 9-13, 16-19, and 21-22 are directed towards:
using in claims [2-6, 9-12,16-19], the error term is a predicted squared error term; the set of order features does not include features describing attributes or behavior of a picker who selects items for the transaction, and includes retailer-specific features, location-specific features, and order-specific features; declining a flagged transaction; receiving a training set of order features describing a transaction and a corresponding set of training labels that indicate the actual overspend value that occurred for the transaction; applying parameters of the first model to the set of order features to generate an overspend prediction; comparing the overspend prediction to the set of training labels; and updating the first model parameters to account for the comparison; receiving a training set of order features describing a transaction and a corresponding set of training labels that indicate the actual overspend value that occurred for the transaction; applying the trained first model to the set of order features to generate an overspend prediction; generating a training error term based on the overspend prediction and the set of training labels; and
Claims [2-6, 9-13, 16-19 & 21-22 ], wherein the first model is a machine-learned model trained by: receiving a training set of order features describing a transaction and a corresponding set of training labels that indicate the actual overspend value that occurred for the transaction; applying parameters of the first model to the set of order features to generate an overspend prediction; comparing the overspend prediction to the set of training labels; and updating the first model parameters to account for the comparison; wherein the second model is a machine-learned model trained by: receiving a training set of order features describing a transaction and a corresponding set of training labels that indicate the actual overspend value that occurred for the transaction; applying the trained first model to the set of order features to generate an overspend prediction; computing a loss function based on differences between the predicted error terms and the calculated error terms; and updating the parameters of the error term prediction model based on the computed loss function to minimize prediction errors across the historical transactions.
These limitations are also part of the abstract idea identified in claim 1, and are similarly rejected under same rationale. Accordingly, the dependent claims 2-6, 9-13, 16-19, and 21-22 are rejected as ineligible for patenting under 35 U.S.C. 101 based upon the same analysis.
The instant claims are rejected under 35 USC 101 in view of The Decision in Alice Corporation Ply. Ltd. v. CLS Bank International, et al. in a unanimous decision, the Supreme Court held that the patent claims in Alice Corporation Pty. Ltd. v. CLS Bank International, et al. ("Alice Corp. ") are not patent-eligible under 35 U.S.C. § 101.
RESPONSE TO ARGUMENTS:
Applicant's arguments filed on 01/19/2026 have been fully considered and they are deemed to be not all-persuasive:
Applicant argues further with 101 rejection in substance that "The claims are Not Directed to an Abstract Idea and the claims Recite” Significantly More" than abstract idea, and noted PEG-2019 [Step-2A-Prong One-Prong two & Step-2B].
Applicant also cited analogy with the court cases such as, Ex.39.
In addition to 101 rejections Applicant noted about 103 rejections with applied prior arts.
In response:
Examiner respectfully disagrees. Updated claim analysis as a whole including amended features are provided above again based on the latest Patent Eligibility Guidance [2019-PEG].
Claims 1-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to a judicial exception (abstract idea) without significantly more. The rejection of the previous action was a direct result of the Supreme Court's decision in Alice Corp. Pty. Ltd v. CLS Bank I'ntl. 573 U.S. (2014). Under Alice.
Applicant’s REMARKs:
Claims 1-20 were previously pending. In this amendment, 1, 8, 12, and 15 are amended. Claims 7, 14, and 20 are canceled. Claims 21-22 are new. No new mater is added.
I. Rejection Under 35 U.S.C. § 101:
“Claims 1-20 were rejected under 35 U.S.C. § 101 as directed to patent ineligible subject matter. Applicant respectfully submits that the claims do not recite an abstract idea, and that even if the claims were to recite an abstract idea, the alleged abstract idea has been integrated into a practical application and the claims recite significantly more than any abstract idea.
A. The Claims Are Not Directed to an Abstract Idea:
Under the two-part framework established by the Supreme Court in Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208 (2014), the first step (Step 2A, Prong One) requires determining whether the claims recite a judicial exception. The Office Action asserts that the claims are directed to "business interaction/sale activity" and "fundamental economic practice" under the category of "Certain Methods of Organizing Human Activity." …;…;…;
B. The Claims Are Integrated Into a Practical Application:
Even if the claims were found to recite an abstract idea, they are integrated into a practical application under Step 2A, Prong Two. The 2019 Revised Patent Subject Matter Eligibility Guidance specifically recognizes that claims reflecting "an improvement in the functioning of a computer, or an improvement to other technology or technical field" are integrated into a practical application. …;…;…;
This improvement is analogous to Example 39 of the 2019 PEG, which describes a method for training a neural network for facial detection using a multi-stage training process. …;…;…;
C. The Claims Recite Significantly More Than Any Abstract Idea:
Under Step 2B of the Alice framework, even if the claims were directed to an abstract idea and not integrated into a practical application, they recite significantly more than the abstract idea itself.
For at least the foregoing, Applicant respectfully submits that the amended claims are not directed to an abstract idea, are integrated into a practical application, and recite significantly more than any abstract idea. … Applicant respectfully requests that the rejections under 35 U.S.C. § 101 be withdrawn.”
In Response: Examiner Disagrees:
Under Alice-Step (2A)-Prong 1: A method for deriving financial information from Transactions is akin to the abstract idea subject matter grouping of:
(Certain Methods of Organizing Human Activity as ‘Fundamental economic practice to Managing personal behavior or relationships or interactions between people including, teaching, and following rules or instructions). As such, the claims include an abstract idea. The specific limitations of the invention are identified to encompass the abstract idea include:
(receiving a set of order features associated with a transaction; generating a predicted difference value, … an expected cost of the transaction,…; receiving a training set of order features describing a transaction and a corresponding set of training labels … the transaction, applying the trained first model … prediction, generating a training error term … set of training labels, applying parameters of the error term prediction … an error term prediction, and updating …the error term prediction and the training error term; generating a predicted error term …applying the error term prediction model to the set of order features; producing …the amount of difference will occur; obtaining an … the transaction; identifying … the actual difference value would occur; determining … a predetermined threshold percentile; and responsive to determining that the associated likelihood …occur exceeds the predetermined threshold percentile,… spending amount, flagging the transaction as having an unexpectedly high amount of overspend.)
As stated above, this abstract idea falls into the subject matter grouping (b) of: (Certain Methods of Organizing Human Activity as ‘Fundamental economic practice to Managing personal behavior or relationships or interactions between people including social activities, teaching, and following rules or instructions’).
Under Alice-Step (2A)-Prong 2: When considered individually and in combination, the instant claims do not integrate the exception into a practical application because the steps of:
(receiving a set of order features associated with a transaction; generating a predicted difference value, … an expected cost of the transaction,…; receiving a training set of order features describing a transaction and a corresponding set of training labels … the transaction, applying the trained first model … prediction, generating a training error term … set of training labels, applying parameters of the error term prediction … an error term prediction, and updating …the error term prediction and the training error term; generating a predicted error term …applying the error term prediction model to the set of order features; producing …the amount of difference will occur; obtaining an … the transaction; identifying … the actual difference value would occur; determining … a predetermined threshold percentile; and responsive to determining that the associated likelihood …occur exceeds the predetermined threshold percentile,… spending amount, flagging the transaction as having an unexpectedly high amount of overspend.),
do not apply, rely on, or use the judicial exception in a manner that imposes a meaningful limitation on the judicial exception (i.e. the abstract idea).
The instant recited claims including additional elements (i.e. “receiving a set of order…;generating…;training…;applying…;generating …features; producing…; obtaining…; identifying…; determining…; flagging…”),
do not improve the functioning of the computer or improve another technology or technical field nor do they recite meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment. The limitations merely use a generic computing technology (Specification [0077]: processor, memory, instructions, storage medium, and electrical communication) as tools to perform an abstract idea or merely add insignificant extra-solution activity to the judicial exception. (MPEP § 2106.05 (f) (g)). Therefore, the claims are directed to an abstract idea.
Under Alice-Step (2B): Additionally, the claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception. As discussed above with respect to integration of the abstract idea into a practical application, the additional elements (Claims: e.g., processor, machine learning, equations, instructions, memory, electrical communication, and storage medium) amount to no more than generally linking the use of the judicial exception to a particular technological environment or merely using generic components as tool to perform an abstract idea. In conclusion, merely “linking/applying” the exception using generic computer components does not constitute ‘significantly more’ than the abstract idea. (MPEP § 2106.05 (f) (h)). Therefore, the claims are not patent eligible under 35 USC 101.
Example 39 - Method for Training a Neural Network for Facial Detection:
Subject Matter Eligibility Examples: Abstract Ideas
2019-01-07 9
creating a second training set for a second stage of training comprising the first training set and digital non-facial images that are incorrectly detected as facial images after the first stage of training; and training the neural network in a second stage using the second training set.
Step
Analysis
1: Statutory Category?
Yes. The claim recites a series of steps and, therefore, is a process.
2A - Prong 1: Judicial Exception Recited?
No. The claim does not recite any of the judicial exceptions enumerated in the 2019 PEG. For instance, the claim does not recite any mathematical relationships, formulas, or calculations. While some of the limitations may be based on mathematical concepts, the mathematical concepts are not recited in the claims. Further, the claim does not recite a mental process because the steps are not practically performed in the human mind. Finally, the claim does not recite any method of organizing human activity such as a fundamental economic concept or managing interactions between people. Thus, the claim is eligible because it does not recite a judicial exception.
2A - Prong 2: Integrated into a Practical Application?
N/A.
Applicant also noted, “submits that the claims are directed to a specific technological solution for anomaly detection in transaction processing systems using a multi-stage machine learning architecture. The claims recite concrete technical steps that cannot be performed mentally or manually. Specifically, claim 1 recites training an error term prediction model through a sophisticated process …;…;”
In response:
What Applicant describes here is how any generic computer process data without stating how or if this transformation is intended to, in some way improves the function of the computer itself.
Examiner notes that the computer processor limitations and the claim as a whole do not add significantly more than the abstract idea itself, because the claim does not amount to an improvement to the functioning of a computer itself; and the claim does not move beyond a general link of the use of an abstract idea to a particular technological environment. A generic recitation of a device performing its generic computer functions does not make the claims less abstract.
A generic recitation of a computer processor performing its generic computer functions does not make the claims less abstract. Examiner notes that the instant claims provide a generically computer-implemented solution to a business-related or economic problem. The focus of the claimed invention in the present is not on an improvement in computers as tools, but on certain independently abstract ideas that use computers as tools. The claims here are not directed to a specific improvement to computer functionality nor an inventive solution to any computer specific problem. Also, limiting the use of an abstract idea “‘to a particular technological environment’ does not confer patent eligibility as this cannot be considered an improvement to computer or technology and so cannot be “significantly more.”
Lastly, dependent claims do not resolve the issues raised in the independent claims. The dependent claims do not add limitations that meaningfully limit the abstract idea. The dependent claims do not impart patent eligibility to the abstract idea of the independent claims. The claims merely amount to the application or instructions to apply the abstract idea on a processor, and is considered to amount to nothing more than requiring a generic processor to merely carry out the abstract idea itself. Therefore none of the dependent claims alone or as an ordered combination add limitations that qualify as significantly more than the abstract idea. Accordingly, claims 1-6, 8-13, 15-19, 18, and 21-22 are rejected as ineligible for patenting under 35 U.S.C. 101.
For these reasons the rejection under 35 USC § 101 directed to non-statutory subject matter set forth in this office action is maintained.
II. Rejection Under 35 U.S.C. § 103:
Applicant argued in last Final Office action on 01/28/2025, that “The Examiner rejected claims 1-20 as obvious over the combination of White (US 2013/0282542-A1), Lalibertie et al. (US 2024/0220887-A1), and Campione (US2017/0323394-A1).
Applicant respectfully submits that the cited references, taken singly or in any combination, fail to disclose or suggest the following limitations in the amended independent claims: …;…;…;…;
However, none of the references disclose or suggest (i) generating a predicted difference value between actual and expected costs, (ii) training a second model on error terms generated from a first model's outputs, or (iii) using a likelihood distribution with a percentile threshold to flag overspending.
For at least the foregoing, Applicant respectfully submits that independent claims 1, 8, and 15 are allowable over cited references, and respectfully requests that the rejections under 35 U.S.C. 103 be withdrawn.”
In Response: Examiner considers with applicant’s arguments with assertions is persuasive.
Therefore, U.S.C.§103 rejection was withdrawn in last Final office action on 10/28/2025.
CONCLUSION
The prior arts made of record and not relied upon are considered pertinent to applicant's disclosure:
Axe et al (US 20070078707 A1) discloses Controlling The Serving Of Advertisements, Such As Cost Per Impression Advertisements For Example, To Improve The Value Of Such Serves
Agrawal et al (US 2018/0350006 A1) discloses System, Method, and Apparatus for Self-Adaptive Scoring to Detect Misuse or Abuse of Commercial Cards.
TSO DAVID et al (WO 2014/028523 A1) discloses Workflow System and Notification Procedure in Social Business Marketplace System and Method.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to HATEM M. ALI whose telephone number is (571) 270-3021, E-mail: Hatem.Ali@USPTO.Gov and FAX (571)270-4021. The examiner can normally be reached Monday-Friday from 8:00 AM to 6:00 PM ET.
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/HATEM M ALI/
Examiner, Art Unit 3691