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 .
DETAILED ACTION
1. This office action is in response to an amendment received on 4/7/26 for patent application 18/241,162.
2. Claims 1, 10, 19 are amended.
3. Claims 1-20 are pending.
RESPONSE TO ARGUMENTS
Applicant argues#1
At page 6 of the Office Action, the Examiner states: Para 20 of the application as published] states that the discarding of the one or more intermediate values is equivalent to traditional methods of calculating counterparty risk calculations.
This statement is incorrect and reflects an improper reading of the specification. Paragraph [0020] does not state that discarding intermediate values is equivalent to
traditional methods. Instead, when read properly, paragraph [0020] explains that the resulting average and potential or high-risk portfolio exposure values are equivalent in result to those produced by traditional counterparty risk techniques. Additionally, paragraph [0020] explicitly distinguishes the claimed invention as more memory efficient than conventional techniques because it "only saves two output values, and optionally a random seed, to the database and thereby removes the need to save intermediate data." Specifically, paragraph [0020] in its entirety states: In addition to calculating counterparty risk in parallel instead of sequentially, the method 200 is also more memory-efficient than traditional methods. Current counterparty risk calculation involves calculating changes in market value for each transaction, and then aggregating to the portfolio level to calculate an average and 95% quantile. The method 200 described herein calculates an average market scenario and a high-risk market scenario, exemplarily at the 95% quantile, and then multiplies these scenarios by the beta-adjusted portfolio value to determine the average and potential/high-risk portfolio exposure. This is equivalent to the traditional method but more memory efficient. In addition, the method 200 only saves two output values, and optionally a random seed, to the database 110 and thereby removes the need to save intermediate data. Saving data from memory to a database is time- consuming and therefore responsible for longer processing times. (Emphasis added). Accordingly, the equivalence described in paragraph [0020] relates only to the numerical exposure outputs, not to the computational process or technique used to generate those outputs. As made explicit in the specification as filed, traditional counterparty risk techniques calculate transaction-level changes and retain intermediate data prior to aggregation. The claimed invention instead computes the same exposure values in a novel manner, as recited in the claims, that enables discarding intermediate values that conventional systems must retain. As a direct consequence, the claimed invention conserves memory resources, reduces database interaction, and improves execution efficiency relative to conventional systems that maintain intermediate data. Paragraph [0020] expressly attributes these performance improvements to the elimination of intermediate data storage.
Because the Office's rejection is based on a mischaracterization of paragraph [0020], it fails to recognize the actual technological improvement disclosed and claimed. The improvement lies not in the abstract final result values, but in the operation of the computer itself, including at least reduced memory consumption, reduced transfers to persistent storage, and improved computational performance resulting from the claimed invention.
Examiner Response
Examiner respectfully disagrees.
Firstly with regard to efficiency, applicant is pointed to the MPEP:
MPEP 2106.05(f):
(2) Whether the claim invokes computers or other machinery merely as a tool to perform an existing process. Use of a computer or other machinery in its ordinary capacity for economic 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., a fundamental economic practice or mathematical equation) does not integrate a judicial exception into a practical application or provide significantly more. See Affinity Labs v. DirecTV, 838 F.3d 1253, 1262, 120 USPQ2d 1201, 1207 (Fed. Cir. 2016) (cellular telephone); TLI Communications LLC v. AV Auto, LLC, 823 F.3d 607, 613, 118 USPQ2d 1744, 1748 (Fed. Cir. 2016) (computer server and telephone unit). Similarly, "claiming the improved speed or efficiency inherent with applying the abstract idea on a computer" does not integrate a judicial exception into a practical application or provide an inventive concept. Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1367, 115 USPQ2d 1636, 1639 (Fed. Cir. 2015). In contrast, a claim that purports to improve computer capabilities or to improve an existing technology may integrate a judicial exception into a practical application or provide significantly more. McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314-15, 120 USPQ2d 1091, 1101-02 (Fed. Cir. 2016); Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335-36, 118 USPQ2d 1684, 1688-89 (Fed. Cir. 2016). See MPEP §§ 2106.04(d)(1) and 2106.05(a) for a discussion of improvements to the functioning of a computer or to another technology or technical field.
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Para 20 specifically states, "The method 200 described herein calculates an
average market scenario and a high-risk market scenario, exemplarily at the 95%
quantile, and then multiplies these scenarios by the beta-adjusted portfolio value to determine the average and potential/high-risk portfolio exposure. This is equivalent to the traditional method but more memory efficient. In addition, the method 200 only saves two output values, and optionally a random seed, to the database 110 and thereby removes the need to save intermediate data. Saving data from memory to a database is time-consuming and therefore responsible for longer processing times."
The additional elements (the application executing on a computer system, database, memory and non-transitory computer readable medium) are recited at a high level of generality and operating in their ordinary capacity, and are being used as a tool to implement the steps of the identified abstract idea, see MPEP 2106.05(f).
Applicant argues (the claimed invention instead computes the same exposure values in a novel manner). Examiner would like to point out that, as made clear by the courts, the “novelty’ of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the § 101 categories of possibly patentable subject matter.” /Intellectual Ventures | v. Symantec Corp., 838 F.3d 1307, 1315, 120 USPQ2d 1353, 1358 (Fed. Cir. 2016) (quoting Diamond v. Diehr, 450 U.S. at 188-89, 209 USPQ at 9). Furthermore, lack of novelty under 35 U.S.C. 102 or obviousness under 35 U.S.C. 103 of a claimed invention does not necessarily indicate that additional elements are well-understood, routine, conventional elements. Because they are separate and distinct requirements from eligibility, patentability of the claimed invention under 35 U.S.C. 102 and 103 with respect to the prior art is neither required for, nor a guarantee of, patent eligibility under 35 U.S.C. 101. (MPEP 2106.05 (I))
The rejection is maintained.
Applicant argues#2
Moreover, the rejection fails to properly evaluate the claims under Step 2A, Prong Two. Under the eligibility framework set forth in the MPEP, the Prong Two analysis must evaluate the claims as a whole, including both the limitations that allegedly recite a judicial exception and the additional elements, to determine whether the claims integrate the judicial exception into a practical application. See MPEP §2106.04(d)(III) and Appeal 2026-000138¹. However, the Office Action does not perform this analysis. Specifically, the Office Action does not explain why the claim (e.g., independent claim 1), when evaluated as a whole, fails to integrate the alleged judicial exception into a practical application.
Instead, the rejection, at page 15 of the Office Action, merely identifies general computer components such as a processor, memory, database, and computer system as "additional elements" and concludes that those elements do not impose meaningful limitations on the alleged abstract idea.
As illustrated above, the Office Action does not analyze the operative claim limitations or explain why the claim, when evaluated as a whole, fails to integrate the alleged judicial exception into a practical application.
The Examiner's own words in the screenshot above confirm that the analysis evaluates only the alleged additional elements. Specifically, the Examiner states that "The additional claimed elements are not integrated into a practical application." (Original bold emphasis, underline emphasis added).
However, the proper inquiry under Step 2A, Prong Two is not whether the additional elements themselves are integrated into a practical application. Rather, the analysis must determine whether the claim as a whole integrates the alleged judicial exception into a practical application. See MPEP §2106.04(d).
Accordingly, the Office Action evaluates only the alleged additional elements in isolation, rather than evaluating the operative claim limitations as a whole as required by MPEP §2106.04(d)(II).
Examiner Response
Examiner respectfully disagrees.
The section 101 rejection explicitly states on page 15 of the Non-Final rejection mailed on 1/22/26, “This judicial exception is not integrated into a practical application. Limitations that are not indicative of integration into a practical application include: (1) Adding the words "apply it" (or an equivalent) with the judicial exception, or mere instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea (MPEP 2106.05.f)
Furthermore, on page 11 of the non-final action rejection states, “The additional elements in the claim outside of the abstract idea (the application executing on a computer system, database, memory and non-transitory computer readable medium are recited at a high level of generality and are being used in their ordinary capacity and are being used as a tool for implementing the steps of the identified abstract idea, see MPEP 2106.05(f), where applying a computer or using a computer as a tool to perform the abstract idea is not indicative of a practical application.
Furthermore, the final rejection mailed on 9/10/25 specifically states, “The application executing on a computer system, database, memory and non-transitory computer readable medium are recited at a high level of generality and are being used in their ordinary capacity and are being used as a tool for implementing the steps of the identified abstract idea, see MPEP 2106.05(f), where applying a computer or using a computer as a tool to perform the abstract idea is not indicative of a practical application”
The abstract limitations and the additional elements were evaluated together
to determine whether the claim integrates the judicial exception into a practical application.
Therefore, under step 2a prong 2, the claims as a whole do not integrate the abstract idea into a practical application.
The rejection is maintained.
Applicant argues#3
In particular, the rejection does not address the expressly recited step of "discarding one or more intermediate values utilized in calculating the expected portfolio exposure and the potential portfolio exposure, wherein as part of the discarding the one or more intermediate values are not maintained in storage of the computer system." (Emphasis added).
As explained in paragraph [0020], discarding intermediate values eliminates the need to store intermediate computational data that conventional systems retain, thereby conserving memory and processing resources.
An improvement to computer resource utilization and processing efficiency constitutes an improvement to computer functionality. The claimed invention achieves these improvements through a specific computational architecture that changes how the computer performs the risk calculation and manages data generated during that calculation. Because the Office Action does not analyze this limitation or evaluate the claim as a whole in light of the technological improvement described in the specification, the rejection fails to satisfy the requirements of Step 2A, Prong Two. See MPEP §2106.04(d)(III) and Appeal 2026-000138.
Accordingly, when properly read in light of the specification, the claims are directed to a specific improvement in computer functionality achieved through a particular algorithmic architecture that eliminates retention of intermediate computational data, thereby reducing memory consumption and improving execution efficiency. Because these improvements arise from the claimed computational structure itself and change how the computer performs the calculation, the claims satisfy Step 2A, Prong Two as being directed to an improvement to the functioning of a computer rather than an abstract idea implemented on generic hardware. The rejection should therefore be withdrawn.
Examiner Response
Examiner respectfully disagrees.
Firstly Examiner would like to point out that the limitation, (wherein as part of the discarding of the one or more intermediate values are not maintained in storage of the computer system) is an amended limitation.
As was previously stated in the nonfinal rejection mailed on 1/22/26, the discarding of data from a database to free up memory and decreasing processing times is both commonly understood and explained spec para 20.
The limitation (discarding, one or more intermediate values utilized in calculating the expected portfolio exposure and the potential portfolio exposure, wherein as part of the discarding the one or more intermediate values are not maintained) is part of the identified abstract idea.
The additional element (storage of the computer system) is recited at a high level of generality, operating in its ordinary capacity, and is being used as a tool to implement the steps of the identified abstract idea.
There is no technical improvement, and applicant's claims do not improve technology, the underlying technology remains unaffected by the claims.
Applicant is addressing a business problem (steps for calculating counterparty risk using risk analysis) with a business solution. Applicant is merely using existing technology (for its intended purpose) to implement the business solution. Any improvements lie in the abstract idea itself, not in underlying technology.
Also see the Response to Applicant argues#1 above.
The rejection is maintained.
Claim Rejections- 35 U.S.C § 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.
1. Claims 1-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to an abstract idea without significantly more. Claims 1, 10, 19 are directed to a method, system and computer readable medium which are statutory categories of invention. (Step 1: YES).
Claim 1 recites the limitations of: A computer-implemented method for calculating counterparty risk using a risk calculation application executing on a computer system, the method comprising:
receiving, by the risk calculation application, a plurality of transactions in a portfolio, each one of the transactions including a market value and a beta value;
generating, by the risk calculation application and in parallel, a plurality of market scenarios based on a log-normal distribution;
calculating, by the risk calculation application and in parallel, an average market scenario and a high-risk market scenario based on the plurality of market scenarios;
calculating, by the risk calculation application and in parallel, a beta-adjusted portfolio value based on the plurality of market values and the plurality of beta values;
calculating, by the risk calculation application, an expected portfolio exposure based on the beta-adjusted portfolio value and the average market scenario, wherein the expected portfolio exposure indicates an average counterparty risk;
calculating, by the risk calculation application, a potential portfolio exposure based on the beta-adjusted portfolio value and the high-risk market scenario, wherein the potential portfolio exposure indicates a worst-case counterparty risk; and
discarding, by the risk calculation application, one or more intermediate values utilized in calculating the expected portfolio exposure and the potential portfolio exposure, wherein as part of the discarding the one or more intermediate values are not maintained in storage of the computer system; and
storing, by the risk calculation application, the expected portfolio exposure and the potential portfolio exposure in a database
wherein the average counterparty risk and the worst-case counterparty risk provide indications regarding a risk associated with the portfolio with the plurality of transactions.
These limitations, under their broadest reasonable interpretation, cover performance of the limitation as certain methods of organizing human activity.
The claim recites elements that are in bold above, which covers performance of the limitation as a commercial interaction, steps for calculating counterparty risk using risk analysis (e.g., receiving, a plurality of transactions in a portfolio, each one of the transactions including a market value and a beta value; generating, in parallel a plurality of market scenarios based on a log-normal distribution; calculating, in parallel, an average market scenario and a high-risk market scenario based on the plurality of market scenarios; calculating, in parallel, a beta-adjusted portfolio value based on the plurality of market values and the plurality of beta values; calculating, an expected portfolio exposure based on the beta-adjusted portfolio value and the average market scenario, wherein the expected portfolio exposure indicates an average counterparty risk; calculating, a potential portfolio exposure based on the beta-adjusted portfolio value and the high-risk market scenario, wherein the potential portfolio exposure indicates a worst-case counterparty risk; discarding, one or more intermediate values utilized in calculating the expected portfolio exposure and the potential portfolio exposure, wherein as part of the discarding the one or more intermediate values are not maintained
and storing, the expected portfolio exposure and the potential portfolio exposure; wherein the average counterparty risk and the worst-case counterparty risk provide indications regarding a risk associated with the portfolio with the plurality of transactions)
If a claim limitation, under its broadest reasonable interpretation, covers performance of the limitation as a Commercial Interaction, then it falls within the "Certain Methods of Organizing Human Activity" grouping of abstract ideas.
Claims 10,19 are abstract for similar reasons.
(Step 2A-Prong 1: YES. The claims are abstract).
This judicial exception is not integrated into a practical application. Limitations that are not indicative of integration into a practical application include: (1) Adding the words "apply it" (or an equivalent) with the judicial exception, or mere instructions to implement an abstract idea on a computer, or merely uses a computer as a tool to perform an abstract idea (MPEP 2106.05.f), (2) Adding insignificant extra solution activity to the judicial exception (MPEP 2106.05.g), (3) Generally linking the use of the judicial exception to a particular technological environment or field of use (MPEP 2106.05.h). Claims 1, 10, 19 includes the following additional elements:
-An application executing on a computer system
-A database
-A processor
-A memory
- A non-transitory computer readable medium
-Storage of the computer system
The application executing on a computer system, database, processor, memory, non-transitory computer readable medium and storage of the computer system are recited at a high level of generality and are being used in their ordinary capacity and are being used as a tool for implementing the steps of the identified abstract idea, see MPEP 2106.05(f), where applying a computer or using a computer as a tool to perform the abstract idea is not indicative of a practical application.
Accordingly, these additional elements, when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea
Therefore claims 1, 10, 19 are directed to an abstract idea without a practical application. (Step 2A-Prong 2: NO. The additional claimed elements are not integrated into a practical application)
The claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception because, when considered separately and as an ordered combination, they do not add significantly more (also known as an "inventive concept") to the exception. As discussed above with respect to integration of
the abstract idea into a practical application, there are no additional elements recited in the claim beyond the judicial exception.
Mere instructions to implement an abstract idea, on or with the use of generic computer components, or even without any computer components, cannot provide an inventive concept - rendering the claim patent ineligible. Thus claims 1, 10, 19 are not patent eligible. (Step 2B: NO. The claims do not provide significantly more)
Dependent claims 2-9, 11-18, 20 further define the abstract idea that is present in their respective independent claims 1, 10, 19 and thus correspond to Certain Methods of Organizing Human Activity and hence are abstract for the reasons presented above.
Claims 2,11 further defines the identified abstract idea as recited in claims 1, 10. The additional element of (plurality of computer system architectures) are recited a high level of generality, operating in their ordinary capacity, and are being used as a tool to implement the steps of the identified abstract idea, see MPEP 2106.05(f)
Claims 3, 12,20 further defines the identified abstract idea recited in claims 1, 10, 19. The additional elements of (wherein the plurality of computer system architectures including a central processing unit-based architecture, a graphical processing unit- based architecture, and a tensor processing unit-based architecture) are recited at a high level of generality, operating in their ordinary capacity and are being used as a tool to implement the steps of the identified abstract idea.
Claims 4, 13 further defines the identified abstract idea as recited in claims 1&10. The additional element of (a random number generator) is recited at a high level of generality, operating in their ordinary capacity and are being used as a tool to implement the steps of the identified abstract idea.
Therefore, the dependent claims do not include any additional elements that integrate the abstract idea into a practical application or are sufficient to amount to significantly more than the judicial exception when considered both individually and as an ordered combination. Therefore, the dependent claims (2-9, 11-18, 20) are directed to an abstract idea. Thus, the claims 1-20 are not patent-eligible.
CONCLUSION
THIS ACTION IS MADE FINAL. Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a).
A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory action is mailed, and any nonprovisional extension fee (37 CFR 1.17(a)) pursuant to 37 CFR 1.136(a) will be calculated from the mailing date of the advisory action. In no event, however, will the statutory period for reply expire later than SIX MONTHS from the mailing date of this final action.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to MOHAMMAD Z SHAIKH whose telephone number is (571)270-3444. The examiner can normally be reached M-T, 9-600; Fri, 8-11, 3-5.
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If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, BENNETT SIGMOND can be reached at 303-297-4411. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
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/MOHAMMAD Z SHAIKH/Primary Examiner, Art Unit 3694 6/25/2026
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