DETAILED CORRESPONDENCE
This is a Final Office action is in response to communications filed on August 25th, 2025. Claims 1, 3, 8, 10-11, 13, 17-18, and 20 are amended. Claims 1-20 are pending.
Notice of Pre-AIA or AIA Status
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Claim Rejections - 35 USC § 101
35 U.S.C. 101 reads as follows:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
Claims 1-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to a judicial exception (i.e., an abstract idea) without significantly more.
Step 1: Claims 1-10 is/are drawn to system (i.e., machine/manufacture) and 11-20 is/are drawn to method (i.e., process). As such, claims 1-20 is/are drawn to one of the statutory categories of invention (Step 1: YES).
Step 2A - Prong One: In prong one of step 2A, the claim(s) is/are analyzed to evaluate whether it/they recite(s) a judicial exception.
Representative Claim 1: A computer-implemented system for conducting an online auction, the system comprising:
a server in communication with one or more remote computing devices associated with one or more remote bidders via a network, to one or more remote bidder computing devices associated with one or more bidders for an auctioned subject of the online auction, wherein the server includes at least one non-transitory computer readable storage medium with computer-readable instructions stored therein to remotely perform the online auction based on a set of predetermined rules, a database, and a processor for executing said computer-readable instructions to:
receive the auctioned subject for the auction through an online auction platform;
receive, one or more bids from the respective one or more bidders, wherein at least one bidder, via one or more remote bidder computing devices, submits one or more set of bidding data comprising at least a portion of bidding amount to the auctioned subject of the online auction, wherein the one or more set of bidding data is sealed until termination of the online auction;
assign a different identifier to each set of valid bidding data corresponding to at least a portion of bidding amount, wherein the server is configured to automatically reject one or more sets of bidding data comprising at least a portion of invalid bidding amount during the online auction;
receive one or more sets of commitment data, wherein each set of commitment data comprises a commitment to pay a committed amount upon a bidder winning the online auction;
transmit, during the online auction, to the one or more remote bidder computing devices, a first representation of the auction including each different identifier, wherein at least one of the remote bidder computing devices display at least a portion of the first representation;
identify a winning bidding amount and a second-rank bidding amount from the auction based on the set of predetermined rules;
calculate a winning payment amount based on the second- rank bidding amount and an adjustment amount, wherein the adjustment amount is computed from at least a portion of a different amount between the winning bidding amount and the second-rank bidding amount;
transmit, upon termination of the online auction, to at least a bidder computing device associated with the one or more remote bidder computing devices, a second representation of the auction, wherein the second representation includes at least a portion of data corresponding to the winning payment amount or winning bidding amount, wherein the winning payment amount is higher or lower with uncertainty than the winning bidding amount when a winning bidder pays at least a portion of the committed amount;
and allocate at least a portion of the committed amount to one or more participants in the online auction.
(Examiner notes: The above claim terms underlined fall under Step 2A - Prong Two analysis section detailed below.)
Under their broadest reasonable interpretation, recite certain methods of organizing human activity for managing personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions) as well as commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations) grouping of abstract ideas, enumerated in MPEP 2106.04(a)(2)(II), in that they recite commercial interactions. The claimed invention recites steps for conducting an auction and determining a transaction price (i.e. an auction scheme) (Claim 1). From applicant’s specification, the claimed invention is one or more computer programs that are executable and/or interpretable on a programmable system including at least one programmable processor, which may be special or general purpose, coupled to receive data and instructions from, and to transmit data and instructions to, a storage system, at least one input device, and at least one output device … precluding blacklisted users may improve the efficiency of the auction and may minimize the occurrence of indecent bidding activities It will also be appreciated that the blacklists will function as incentive tools for users to not engage in indecent bidding activity or else risk losing the opportunity to participate in future auctions Also, an auction host may refer a user from his/her favorite list to another auction host Database 104 may contain several data categories or groupings of blacklist or favorite list information relating to specific individuals, groups of individuals, locations such as streets, zip codes, town, city, borough, county, state, or any other region defining feature, or to names, or to any other defining characteristic (see at least [0190, 0273] of instant application). The steps under its broadest reasonable interpretation specifically fall under merely gathering and filtering information and organizing human relationships and verifying eligibility before a transaction. The Examiner notes that although the claim limitations are summarized, the analysis regarding subject matter eligibility considers the entirety of the claim and all of the claim elements individually, as a whole, and in ordered combination.
Accordingly, under Prong 1 of Step 2A, claims 1 and 11 recite an abstract idea.
As such, the Examiner concludes that claim 1 recites an abstract idea (Step 2A – Prong One: YES).
Prong 2 of Step 2A
It is determined whether the claim recites additional elements that integrate the exception into a practical application of the exception. This judicial exception is not integrated into a practical application (NO).
These limitations are not indicative of integration into a practical application because:
The additional elements of claim 1 are recited at a high level of generality (i.e. as generic computing hardware) such that they amount to nothing more than mere instructions to implement or apply the abstract idea on a generic computing hardware (or, merely use a computer as a tool to perform an abstract idea).
Claim 1 recites the additional elements of a server, one or more remote computing devices, a network, one or more remote bidder computing devices, one non-transitory computer-readable storage medium with computer-readable instructions, a database, a processor, the rejecting one or more sets of bidding data being automatic, an online auction platform, the auction being online, and a bidder computing device. Claim 11 recites the additional elements of, a server, one or more remote bidder computing devices, the auction being online, and an online auction platform. These additional elements are recited at a high-level of generality such that they amount do no more than mere instructions to apply the exception using generic computer components.
Additionally, the independent claims merely invoke these additional elements as a tool to perform the abstract idea. MPEP 2106.05(f). Further, the additional elements do no more than generally link the use of the judicial exception to a particular technological environment or field of use (such as computers or computing networks). MPEP 2106.05(h). Employing well-known computer functions to execute an abstract idea, even when limiting the use of the idea to one particular environment, does not integrate the exception into a practical application. As such, under Prong 2 of Step 2A, when considered both individually and as a whole, the limitations of claims 1 and 11 are not indicative of integration into a practical application (Step 2A, Prong Two: NO). MPEP 2106.04(d).
Furthermore, the additional elements are insufficient to integrate the abstract idea into a practical application because the claim fails to i) reflect an improvement in the functioning of a computer or an improvement to another technology or technical field, ii) apply the judicial exception with, or use the judicial exception in conjunction with, a particular machine or manufacture that is integral to the claim, iii) effect a transformation or reduction of a particular article to a different state or thing, or iv) apply or use the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment.
As such, under Prong 2 of Step 2A, when considered both individually and as a whole, the limitations of claims 1 and 11 are not indicative of integration into a practical application (Step 2A, Prong Two: NO). MPEP 2106.04(d).
Since claims 1 and 11 recite an abstract idea and fail to integrate the abstract idea into a practical application, claims 1 and 11 are “directed to” an abstract idea under Step 2A (Step 2A: YES). MPEP 2106.04(d).
Step 2B
It is determined whether the claims recite additional elements that amount to significantly more than the judicial exception. The claims of the present application do not include additional elements that are sufficient to amount to significantly more than the judicial exception (NO).
As discussed above under Prong 2 of Step 2A with respect to the integration of the abstract idea into a practical application, the identified additional elements are
merely invoked as a tool to perform the abstract idea and generally link the use of the
abstract idea to a particular technological environment.
Even when considered as an ordered combination, the additional elements of
claims 1 and 11 do not add anything that is not already present when they are
considered individually. Therefore, under Step 2B, there are no meaningful limitations
in claims 1 and 11 that transform the judicial exception into a patent eligible
application such that the claims amount to significantly more than the judicial exception
itself (Step 2B: NO). MPEP 2106.05.-
Dependent claims, 2-10 and 12-19, when analyzed as a whole are held to be patent ineligible under 35 U.S.C. § 101 because they do not add “significantly more” to the abstract idea.
More specifically, dependent claims, 2-10 and 12-19, further fall within the “Certain methods of organizing human activity” grouping of abstract ideas in that they recite sales activities or behaviors. Claims 8 and 18 introduce the additional elements of the accepting or rejecting of bidding data being automatic. Claims 2-7, 9-10, 12-17, and 19, do not introduce new additional elements and as such are not indicative of integration into a practical application for at least similar reasons discussed above. As such, under Prong 2 of Step 2A, the dependent claims are not indicative of integration into a practical application for at least similar reasons as discussed above. Thus, dependent claims 2-10 and 12-19 are “directed to” an abstract idea.
Next, under Step 2B, similar to the analysis of claims 1 and 11 the dependent
claims analyzed individually, and as an ordered combination, merely invoke such
additional elements as a tool to perform the abstract idea and generally link the use of the abstract idea to a particular technological environment and, therefore, do not amount to significantly more than the abstract idea itself.
Therefore, under the Subject Matter Eligibility test, claims 1-19 are ineligible.
Claim Rejections - 35 USC § 103
In the event the determination of the status of the application as subject to AIA 35 U.S.C. 102 and 103 (or as subject to pre-AIA 35 U.S.C. 102 and 103) is incorrect, any correction of the statutory basis (i.e., changing from AIA to pre-AIA ) for the rejection will not be considered a new ground of rejection if the prior art relied upon, and the rationale supporting the rejection, would be the same under either status.
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.
Claims 1-6, 8-9, 11-16, and 18-19 are rejected under 35 U.S.C. 103 as being unpatentable over Hite (U.S. 8688533 B2), hereinafter Hite, in view of Furman (U.S. 20140330627 A1), hereinafter Furman.
Regarding Claim 1, Hite discloses a computer-implemented system for conducting an online auction, the system comprising:
a server in communication with one or more remote computing devices associated with one or more remote bidders via a network, to one or more remote bidder computing devices associated with one or more bidders for an auctioned subject of the online auction, wherein the server includes at least one non-transitory computer readable storage medium with computer-readable instructions stored therein to remotely perform the online auction based on a set of predetermined rules, a database, and a processor for executing said computer-readable instructions to (Hite see at least: “In yet other embodiments, bidding can be performed via mobile phone text messaging or any other known and/or convenient method. In some embodiments, data can be submitted and/or received by a third-party application or device” [Col. 7, Lns. 51-54] and “Received program code may be executed by the respective processor(s) 1207 as it is received, and/or stored in the storage device 1210” [Col. 12, Lns. 10-12] and “As shown in FIG. 2, an auction process 100 can be effectuated by one or more potential buyers 202 and one or more potential sellers 204 communicating with an auction site server computer 206. An auction site server computer 206 can store and process information inputted by potential buyers and sellers 202 204” [Col. 3, Lns. 24-29] and see Fig. 2):
receive the auctioned subject for the auction through an online auction platform (Hite see at least: “Pricing option data 218 can be displayed for a potential seller 204 to aid in their determination of an appropriate seller's bid. Once a product data set 214 and/or buyer demand curve 216 is generated, pricing options 218 can be calculated and displayed setting forth the possible profitability for each bid 309 or combination of bids 309. ” [Col. 5, Lns. 36-41]);
receive, one or more bids from the respective one or more bidders, wherein at least one bidder, via one or more remote bidder computing devices, submits one or more set of bidding data comprising at least a portion of bidding amount to the auctioned subject of the online auction, wherein the one or more set of bidding data is sealed until termination of the online auction (Hite see at least: “a buyer demand curve 216 can be created and/or viewed by a potential seller after some, but not all, buyer bids 309 have been received by an auction server 206, or at any other convenient or desired point in time.” [Col. 4-5, Lns. 64-1] and “The A offer can be implemented as a sealed bid to a specific section of a demand curve 216, with the winning price 701 and winning quantity both determined by the second lowest seller bid 608 (see FIGS. 6-7).” [Col. 5, Lns. 17-21] and “a buyer bid 309 can be sealed, such that other potential buyers 202 are unable to view the amount of a bid 309 or the quantity of other bidders 202.” [Col. 4, Lns. 4-6]);
receive one or more sets of commitment data, wherein each set of commitment data comprises a commitment to pay a committed amount upon a bidder winning the online auction (Hite see at least: “In step 310, a potential buyer 202 can submit a bid 309. Once a bid 309 is submitted, a potential buyer 202 can be contractually obligated to purchase the item for which they bid, up to the amount of their bid 309, should they be a winner of the auction 100.” [Col. 4, Lns. 26-30] Examiner equates the contract information associated with the bid with commitment data);
transmit, during the online auction, to the one or more remote bidder computing devices, a first representation of the auction including each different identifier, wherein at least one of the remote bidder computing devices display at least a portion of the first representation (Hite see at least: “a buyer demand curve 216 can be displayed on a potential seller's 204 computer or other internet-connected device. Additionally, in some embodiments and in step 406, pricing options 218 can be generated and displayed to aid a potential seller 204 in the seller bidding process 106.” [Col. 4, Lns. 42-46]; a buyer bid can include information and parameters that identify the buyer and the information is stored in a buyer bid database 212 Fig. 2 [Col.3, Ln 65-Col. 4, Ln, 3]; Examiner notes that bidder equates to bidding seller and display equates to transmit);
identify a winning bidding amount and a second-rank bidding amount from the auction based on the set of predetermined rules (Hite see at least: “The winner's bid however is ignored and the winning price is set by the second best bid, or first place loser.” [Col. 1, Lns. 50-52]; “In a price adjustment step 111, once a winning seller 204 is chosen, and the second lowest offer for sale 608 is determined to be the selling price 701, the winning seller 204 can be given the option to reduce the price even further” [Col. 6, Lns. 32-35]); ;
calculate a winning payment amount based on the second- rank bidding amount and an adjustment amount, wherein the adjustment amount is computed from at least a portion of a different amount between the winning bidding amount and the second-rank bidding amount (Hite see at least: “The winner's bid however is ignored and the winning price is set by the second best bid, or first place loser.” [Col. 1, Lns. 50-52] and “In a price adjustment step 111, once a winning seller 204 is chosen, and the second lowest offer for sale 608 is determined to be the selling price 701, the winning seller 204 can be given the option to reduce the price even further” [Col. 6, Lns. 32-35]);
transmit, upon termination of the online auction, to at least a bidder computing device associated with the one or more remote bidder computing devices, a second representation of the auction, wherein the second representation includes at least a portion of data corresponding to the winning payment amount or winning bidding amount, wherein the winning payment amount is higher or lower with uncertainty than the winning bidding amount when a winning bidder pays at least a portion of the committed amount (Hite see at least: “In some embodiments, a demand curve window 802 can be displayed such that a winning seller 204 can view the demand curve 216 with the price adjustment option 111 shown graphically.” [Col. 6, Lns. 41-45] Examiner notes the demand equates to the uncertainty and “In some embodiments, data can be submitted and/or received by a third-party application or device, such as when a person enables an external phone or web application to display bid activity in real-time, or when a potential buyer or seller 202 204 inputs a bid amount and sends that amount to an auction site server 206.” [Col. 7, Lns. 52-8] and "the difference between bid 308 and final sale price 701 can be applied to a bank savings account of the buyer 202, can be converted to a buyer credit on the auction site” [Col. 7, Lns. 7-10];
and allocate at least a portion of the committed amount to one or more participants in the online auction (Hite see at least: “The winning seller 204, derived sales price 701, and winning buyer bids 309 can be stored on an auction server computer 206 in a results database 222.” [Col. 6, Lns. 12-14];
assign a different identifier to each set of valid bidding data corresponding to at least a portion of bidding amount, wherein the server is configured to reject one or more sets of bidding data comprising at least a portion of invalid bidding amount during the online auction (Hite see at least: “Once a desired item or service is identified, in step 308 a potential buyer 202 can input a bid 309. A buyer bid 309 can reflect the truthful value that a potential buyer 202 gives to an item or service. A buyer bid 309 can also reflect the true spending limits that a potential buyer 202 has for a particular auction. In some instances, a buyer bid 309 can also include contact information, credit information, delivery requirements, or any other known and/or convenient piece of information or parameter. This information can be stored along with the bid 309 amount in a buyer bid database 212, as shown in FIG. 2.” [Col. 3-4, Lns. 60-3] and “Despite the five potential buyers not receiving an item having bids that exceeded the acceptable bid of the winning seller, in order to ensure truth-telling mechanism on both sides of the auction, these bids must be excluded.” [Col. 11, Lns. 23-26]);
Hite does not teach wherein the server is configured to automatically reject one or more sets of bidding data comprising at least a portion of invalid bidding amount during the online auction. However, Furman teaches wherein the server is configured to automatically reject one or more sets of bidding data comprising at least a portion of invalid bidding amount during the online auction (Furman see at least: “As illustrated in block 311, system analyzes acceptable bid ranges for at least one of possible acceptance, possible rejection, delayed acceptance, delayed rejection, automatic acceptance, or automatic rejection of Jewelry Supplier's bid. For example, Payables Bidding System is automatically configured to reject Jewelry Supplier's bid greater than $4,900 and automatically accept Jewelry Supplier's bid equal to or less than 4,900. The system allows the buyer to limit its investment on an auction-by-auction basis. A system that contains a feature that limits the approval of any given suppliers bids by a certain amount or percentage of total payments in any given auction, or over any given time period.” [0051]).
These known techniques are applicable to the method of Hite as they both share characteristics and capabilities, namely, they are directed to a bidding method for an online auction process (Furman see at least: “A buyer-centric payables bidding method, system, and computer-implemented program instructions are disclosed. ... In the online auction process, suppliers of goods and/or services bid on the right to collect vouchered payments from buyer before the previously agreed "due date" of those payments.” [0016]).
It would have been obvious to one of ordinary skill in the art that applying the known technique wherein the server is configured to automatically reject one or more sets of bidding data comprising at least a portion of invalid bidding amount during the online auction, as taught by Furman, to the teachings of Hite, would have yielded predictable results because the level of ordinary skill in the art demonstrated by the references applied shows the ability to incorporate such references into similar methods. Further, the addition of the teachings of Furman, would have been recognized by those of ordinary skill in the art as resulting in an improved method that allows for sellers to obtain immediate payment and buyers to have a more efficient purchasing process (Furman see at least: [0040]).
Regarding Claim 2, Hite in view of Furman teaches the system of claim 1. Hite further discloses wherein the processor is configured to determine, upon the termination of the second-rank bidding amount is the one next to the winning bidding amount based on the set of predetermined rules (Hite see at least: “The traditional Vickrey auction system is well known in the art and comprises a sealed bid procedure wherein bidders submit a single sealed bid, …The winner's bid however is ignored and the winning price is set by the second best bid, or first place loser.” [Col. 1, Lns. 45-51]).
Regarding Claim 3, Hite in view of Furman teaches the system of 2. Hite further discloses deem a starting price for the online auction as the second-rank bidding amount when there is only one bidder in the online auction (Hite see at least: “a seller 204 can elect to start an auction 100 by placing an "A" offer and a "B" offer, each with specific time frames for remaining open. The A offer can be implemented as a sealed bid to a specific section of a demand curve 216, with the winning price 701 and winning quantity both determined by the second lowest seller bid 608 (see FIGS. 6-7).” [Col. 5, Lns. 17-21].
Regarding Claim 4, Hite in view of Furman teaches the system of 1. Hite further discloses wherein the portion of the different amount is calculated by the different amount between the winning bidding amount and the second-rank bidding amount (Hite see at least: “The winner's bid however is ignored and the winning price is set by the second best bid, or first place loser.” [Col. 1, Lns. 50-52] and “In a price adjustment step 111, once a winning seller 204 is chosen, and the second lowest offer for sale 608 is determined to be the selling price 701, the winning seller 204 can be given the option to reduce the price even further … has the option to reduce the selling price 701 to any number between the seller's original bid 608 and the second-lowest seller bid 608” [Col. 6, Lns. 32-42]);
Hite does not disclose the calculation being a predetermined percentage of the different amount. However, Furman teaches using a predetermined percentage to adjust the amount of the accepted bid (Furman see at least: “As used herein, an exemplary "Bid" is defined as the discount a Supplier is willing to accept in exchange for obtaining prompt payment on vouchered payments, wherein said Bid is expressed as a percentage discount of an amount of a vouchered payment expressed as either in dollars or percentage discount, for example.” [0043]).
It would have been obvious to one of ordinary skill in the art that applying the known technique using a predetermined percentage to adjust the amount of the accepted bid, as taught by Furman, to the teachings of Hite, would have yielded predictable results because the level of ordinary skill in the art demonstrated by the references applied shows the ability to incorporate such references into similar methods. Further, the addition of the teachings of Furman, would have been recognized by those of ordinary skill in the art as resulting in an improved method that allows for sellers to obtain immediate payment and buyers to have a more efficient purchasing process (Furman see at least: [0040]).
Regarding Claim 5, Hite in view of Furman teaches the system of Claim 1. Hite further discloses wherein the adjustment amount is subtracted or added from the second-rank bidding amount to reach the winning payment amount based on the set of predetermined rules (Hite see at least: “In a price adjustment step 111, once a winning seller 204 is chosen, and the second lowest offer for sale 608 is determined to be the selling price 701, the winning seller 204 can be given the option to reduce the price even further … has the option to reduce the selling price 701 to any number between the seller's original bid 608 and the second-lowest seller bid 60” [Col. 6, Lns. 32-42] Examiner notes the reduce the selling price to any number indicates the ability to subtract the adjustment amount).
Regarding Claim 6, Hite in view of Furman teaches the system of Claim 1. Hite further discloses wite hherein the second-rank bidding amount is the higher or lower amount than the winning bidding amount based on the set of the predetermined rules (Hite see at least: “option to reduce the selling price 701 to any number between the seller's original bid 608 and the second-lowest seller bid 608” [Col. 6, Lns. 39-41] Examiner notes reducing the selling price to a number between the second-lowest bid and the original bid indicates that the selling price is higher than the second-lowest bid.
Regarding Claim 8, Hite in view of Furman teaches the system of Claim 1. Hite does not disclose wherein each set of bidding data is automatically accepted or rejected by the server according to one or more pre-determined rules; and responsive to a set of bidding data being rejected, not storing the set of rejected bidding data in the server; or responsive to a set of bidding data being accepted, storing the accepted set of bidding data in the server.
However, Furman teaches wherein each set of bidding data is automatically accepted or rejected by the server according to the one or more pre-determined rules; and responsive to a set of bidding data being rejected, not storing the set of rejected bidding data in the server; or responsive to a set of bidding data being accepted, storing the accepted set of bidding data in the server (Furman see at least: ““As illustrated in block 311, system analyzes acceptable bid ranges for at least one of possible acceptance, possible rejection, delayed acceptance, delayed rejection, automatic acceptance, or automatic rejection of Jewelry Supplier's bid. For example, Payables Bidding System is automatically configured to reject Jewelry Supplier's bid greater than $4,900 and automatically accept Jewelry Supplier's bid equal to or less than 4,900.” [0051] and “Payables Bidding System can retain records of the vouchered payments, transaction information, bidding record, and payment record between Buyer and Jewelry Supplier in a database for the previously described blocks 301 to 327.” [0057]).
It would have been obvious to one of ordinary skill in the art that applying the known technique wherein each set of bidding data is automatically accepted or rejected by the server according to the one or more pre-determined rules; and responsive to a set of bidding data being rejected, not storing the set of rejected bidding data in the server; or responsive to a set of bidding data being accepted, storing the accepted set of bidding data in the server, as taught by Furman, to the teachings of Hite, would have yielded predictable results because the level of ordinary skill in the art demonstrated by the references applied shows the ability to incorporate such references into similar methods. Further, the addition of the teachings of Furman, would have been recognized by those of ordinary skill in the art as resulting in an improved method that allows for sellers to obtain immediate payment and buyers to have a more efficient purchasing process (Furman see at least: [0040]).
Regarding Claim 9, Hite in view of Furman teaches the system of Claim 1. Hite further discloses wherein the processor is configured to receive the set of commitment data from at least one of: a bidder, a party listing the auctioned subject or a third party (Hite see at least: “In step 310, a potential buyer 202 can submit a bid 309. Once a bid 309 is submitted, a potential buyer 202 can be contractually obligated to purchase the item for which they bid, up to the amount of their bid 309, should they be a winner of the auction 100.” [Col. 4, Lns. 26-30] Examiner equates the contract information associated with the bid with commitment data).
Regarding Claim 11, which recites limitations directed towards conducting a sealed online auction method, the limitations are parallel in nature to those addressed above for Claim 1 and are therefore rejected for those same reasons as set forth above in Claim 1.
Regarding Claim 12, which recites limitations directed towards conducting a sealed online auction method, the limitations are parallel in nature to those addressed above for Claim 2 and are therefore rejected for those same reasons as set forth above in Claim 2.
Regarding Claim 13, which recites limitations directed towards conducting a sealed online auction method, the limitations are parallel in nature to those addressed above for Claim 3 and are therefore rejected for those same reasons as set forth above in Claim 3.
Regarding Claim 14, which recites limitations directed towards conducting a sealed online auction method, the limitations are parallel in nature to those addressed above for Claim 4 and are therefore rejected for those same reasons as set forth above in Claim 4.
Regarding Claim 15, which recites limitations directed towards conducting a sealed online auction method, the limitations are parallel in nature to those addressed above for Claim 5 and are therefore rejected for those same reasons as set forth above in Claim 5.
Regarding Claim 16, which recites limitations directed towards conducting a sealed online auction method, the limitations are parallel in nature to those addressed above for Claim 6 and are therefore rejected for those same reasons as set forth above in Claim 6.
Regarding Claim 18, which recites limitations directed towards conducting a sealed online auction method, the limitations are parallel in nature to those addressed above for Claim 8 and are therefore rejected for those same reasons as set forth above in Claim 8.
Regarding Claim 19, which recites limitations directed towards conducting a sealed online auction method, the limitations are parallel in nature to those addressed above for Claim 9 and are therefore rejected for those same reasons as set forth above in Claim 9.
Claims 7, 10, 17, and 20 are rejected under 35 U.S.C. 103 as being unpatentable over Hite (U.S. 8688533 B2), in view of Furman (U.S. 20140330627 A1), in further view of Hoffberg (U.S. 20070087756 A1), hereinafter Hoffberg.
Regarding Claim 7, Hite in view of Furman teaches the system of Claim 1. Hite further discloses a committed amount based on the set of the predetermined rules (Hite see at least: “Once a bid 309 is submitted, a potential buyer 202 can be contractually obligated to purchase the item for which they bid, up to the amount of their bid 309, should they be a winner of the auction 100.” [Col. 4, Lns. 26-30]).
However, Hoffberg teaches wherein the winning payment amount is calculated by subtracting or adding at least a portion of the committed amount based on the set of the predetermined rules (Hoffberg see at least: “Another approach to minimizing strategic bidding is to impose a bid fee. That is, each bidder must offer a prepayment corresponding to a small portion of its bid, thereby disincentivizing bidding to lose. The winning bidder will then pay a second price plus the deposit bid.” [0273]).
These known techniques are applicable to the method of Hite in view of Furman as they both share characteristics and capabilities, namely, they are directed to a method for minimizing strategic bidding in an auction process (Hoffberg see at least: “Another approach to minimizing strategic bidding is to impose a bid fee.” [0273]).
It would have been obvious to one of ordinary skill in the art that applying the known technique wherein the winning payment amount is calculated by subtracting or adding at least a portion of the committed amount based on the set of the predetermined rules, as taught by Hoffberg, to the teachings of Hite in view of Furman, would have yielded predictable results because the level of ordinary skill in the art demonstrated by the references applied shows the ability to incorporate such references into similar methods. Further, the addition of the teachings of Hoffberg, would have been recognized by those of ordinary skill in the art as resulting in an improved method that improves overall system efficiency (Hoffberg see at least: [0094]).
Regarding Claim 10, Hite in view of Furman teaches the system of Claim 1. Hite in view of Furman does not teach wherein the committed amount is not included for calculating the winning payment amount when the winning bidder does not pay any portion of the committed amount. However, Hoffberg teaches wherein the committed amount is not included for calculating the wining payment amount when the winning bidder does not pay any portion of the committed amount (Hoffberg see at least: “each bidder must offer a prepayment corresponding to a small portion of its bid, thereby disincentivizing bidding to lose. The winning bidder will then pay a second price plus the deposit bid. … the bid deposit may be a flat fee, or subject to a mathematical or adaptive function, rather than directly related to administrative cost.” [0273] Examiner notes that the bidder must pay the deposit in order to join the auction, so the bid deposit would not be applied to the winning payment amount).
It would have been obvious to one of ordinary skill in the art that applying the known technique wherein the committed amount is not included for calculating the wining payment amount when the winning bidder does not pay any portion of the committed amount, as taught by Hoffberg, to the teachings of Hite in view of Furman, would have yielded predictable results because the level of ordinary skill in the art demonstrated by the references applied shows the ability to incorporate such references into similar methods. Further, the addition of the teachings of Hoffberg, would have been recognized by those of ordinary skill in the art as resulting in an improved method that improves overall system efficiency (Hoffberg see at least: [0094]).
Regarding Claim 17, which recites limitations directed towards conducting a sealed online auction method, the limitations are parallel in nature to those addressed above for Claim 7 and are therefore rejected for those same reasons as set forth above in Claim 7.
Regarding Claim 20, which recites limitations directed towards conducting a sealed online auction method, the limitations are parallel in nature to those addressed above for Claim 10 and are therefore rejected for those same reasons as set forth above in Claim 10.
Response to Arguments
With regards to Objections:
Applicant's statement, see pages 8, filed August 25th, 2025 with respect to the objection(s) of claims 1, 3, 8, 10, 11, 13, 18, and 20 have been fully considered and persuasive with correction performed.
With regards to Double Patenting:
Per Applicant’s submission of Terminal Disclaimer with respect to the rejection of claims 1-20 under nonstatutory double patenting rejection, and approved on September 7th, 2025. (Please refer to Terminal disclaimer filed on September 7th, 2025). Thus, the rejection is withdrawn accordingly. See Remark(s) 9.
With regards to § 101 rejections:
The arguments filed on August 25th, 2025, with respect to the rejection(s) of claims 1-20 under 35 U.S.C 101 have been fully considered but are unpersuasive.
Applicant states that, “he present invention can be summarized that the independent claim includes at least three novel features: … Applicant provides technical solutions in a process that includes at least Three Novel Features in its steps with an uncertain risk to all auction participants to resolve online auction issues because the winning payment amount is higher or lower than the winning bidding amount if the winning bidder pays at least a portion of the committed amount, which will eliminate or at least substantially reduce their incentive to initiate unfair practices to fix the long existing issues in the online auction field. These Three Novel Features do not exist in conventional online auction systems and serve to correct real-world inefficiencies and unfairness in digital bidding environments.” Remarks 9-13.
Applicant's arguments have been fully considered but they are not persuasive. Although the applicant refers to these challenges as "technical," the fundamental aspect of the claim focuses on auction execution regulations—an established economic practice classified as an abstract idea under Alice step 1. The "three novel features" offer no technical progress in computer operations; they merely represent business rules applied within a standard computing environment:
The commitment feature merely adds a financial deposit or pledge; a contractual mechanism, not a computing improvement.
The calculation feature uses arithmetic to compute a payment based on bid rankings; this is mathematical logic, not a change in data-processing architecture.
The allocation feature distributes funds based on pre-defined business logic; again, an economic decision rule, not a technological function.
Courts have consistently held that “improving fairness, efficiency, or trust in a marketplace” is a business goal, not a technological improvement (OIP Techs. v. Amazon, 788 F.3d 1359 (Fed. Cir. 2015); Smart Sys. v. Chicago Transit Auth., 873 F.3d 1364 (Fed. Cir. 2017)). These steps merely automate human auctioneering practices using generic computer functions (receiving bids, storing data, computing results, and sending outputs).
Applicant states that, “When the present invention has provided the technological solution to a technological problem, which was supported by admissible evidence, please see Exhibit A and Exhibit B, which clearly identified that Snipping is a problem for online auctions and "Shills are a particular problem in Internet auctions". In McRO v. Bandai, the court held that a claim is patent-eligible when it uses a specific set of rules to improve a technological process, which mirrors Applicant's use of specific calculation, allocation, and commitment mechanisms to transform how digital auctions are conducted. Likewise, in DDR Holdings v. Hotels.com, claims were upheld where they modified conventional Internet functionality to produce a new and improved result in which the Applicant's system offers a structural and functional improvement over traditional auction websites.” Remarks 13-15.
Applicant's arguments have been fully considered but they are not persuasive. The claim does not recite any particular technical improvement in, data structures (e.g., a new encryption or identifier generation algorithm), network communication protocols, or hardware configuration.
The alleged “automatic rejection of invalid bids” functions as a typical rule-checking procedure, as opposed to being a novel computing innovation. The applicant’s reliance on McRO and DDR is misplaced: where McRO involved a specific algorithmic improvement (automated lip-syncing rules) that changed how animation software operated; this invention does not change how the computer functions; it just changes auction logic.
And further, DDR Holdings dealt with a non-conventional integration of web pages that solved an Internet-specific technical problem; here, the invention simply uses a computer to implement an economic policy.
The claimed process could still be performed manually (sealed bids, deposits, and fund allocations), implying that the advancement is in procedures rather than technology.
Applicant further states that, “The claimed invention is not directed to an abstract idea but rather to a technological solution that addresses serious and well-documented challenges in online auction systems. Specifically, the invention recites a system in which bidding data is sealed until the termination of the auction … the previous rejection did not follow the precedents from the Supreme Court under the second step of the Alice Mayo test, which is satisfied when the claim limitations "involve more than performance of 'well-understood, routine, [and] conventional activities previously known to the industry.' "Alice, at 2359. In this case, the Applicant's claimed features include the Three Novel Features, which are not conventional in either traditional or digital auction environments” Remarks 15-17.
Applicant's arguments have been fully considered but they are not persuasive. Under Alice step 2, the claim lacks “significantly more” than the abstract idea:
The recited server, processor, and computer-readable medium are generic.
The steps (receiving bids, identifying winners, calculating price, transmitting results) are routine computer operations.
There is no unconventional use of computing resources.
As such, even if the goal (reducing shill bidding) is creditable, the means (mathematical and financial rules executed on a server) are conventional. SAP America v. InvestPic, 898 F.3d 1161 (Fed. Cir. 2018), rejected a similar “mathematical-model improvement” argument because it relied on abstract data analysis, not technical enhancement. See MPEP §§ 2106.05(a)–(c), (e)– (h). Thus the 101 rejection is maintained.
With regards to § 103 rejections:
Applicant's arguments, see pages 17-21, filed August 25th, 2025, with respect to the rejection(s) of claims 1-20 under 35 U.S.C 102/103 have been fully considered but are unpersuasive/moots on new ground of rejection.
Applicant's arguments have been fully considered but are unpersuasive. Applicant states, “One of the key distinguishing features not taught or suggested by these prior arts is the Commitment feature by using a committed amount pledged by a bidder or a third party prior to the end of the auction, where that commitment plays a conditional role in determining the winning payment amount: "receive one or more sets of commitment data, wherein each set of commitment data comprises a commitment to pay a committed amount upon a bidder winning the online auction" (see amended claims 1 and 11) …” Remarks 17-21.
Applicant's arguments have been fully considered but they are not persuasive. The “Commitment Feature”, Hite expressly discloses a “second transaction” where bidders commit to pay the difference between their bid and the final price; often directed to another purpose such as a donation or credit account. This is functionally identical to a committed amount pledged before the auction ends and payable upon winning. The applicant’s assertion that Hite lacks independent commitment data is inaccurate; Hite’s optional donation agreement (the bidder’s pre-auction pledge to pay the bid-price difference) constitutes a separate data field associated with each bid.
Even if Hite didn’t use the same label, a skilled person would readily implement a commitment variable for a bidder’s pledge. KSR makes clear that obviousness does not require verbatim disclosure, substitution of equivalent data fields is an obvious design choice yielding predictable results.
Additionally, “Calculation feature”, The claimed “winning payment = second-highest bid ± adjustment based on bid difference” is a mathematical refinement of the well-known Vickrey second-price rule disclosed in Hite. Hite explicitly sets the winner’s price from the second-best bid and even describes an optional “price adjustment step” permitting further modification of that value (col. 6 ll. 32–35). Adjusting the payment by a portion of the difference is thus an obvious optimization, a predictable variation under KSR since it yields an intermediate price between first and second price outcomes, a known goal in auction theory.
Neither the formula’s parameters nor its use of percentages introduces a new technical concept, it’s a straightforward arithmetic extension of Hite’s second price auction logic.
Further the “Allocation feature”, Hite allocates the bidder’s pledged difference to various recipients, e.g., charity, the buyer’s own savings account, or site credit; demonstrating that committed amounts can be redistributed to parties other than the seller. Furman likewise teaches allocation of part of a transaction difference (the buyer’s “savings”) to the platform as a commission. Together, these show that it was known to redistribute surplus or difference amounts within the auction ecosystem. Extending such allocations to other participants would have been an obvious use of existing incentives (e.g., rewarding users or offsetting fees), producing predictable economic benefits.
Further, “Uncertainty” or “Risk-Based” Bidding, the alleged “uncertainty” arises merely because the final price depends on both bids and commitments; that variability is inherent in Hite’s system, where the final sale price and donation amount can vary. There is no genuine “probabilistic” or stochastic computation, just conditional arithmetic. Recasting deterministic calculations as “uncertain” outcomes is rhetorical, not technical.
And further the “Use of Unique Identifiers and Sealed Bids”, both Hite and Furman store bids in databases tied to unique identifiers and maintain confidentiality