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
Status of Claims
Claims 1-3 and 5-43 are pending. Claims 1, 26, 30, 39 42 and 43 are amended.
Response to Arguments
Applicants arguments regarding the 101 rejection have been considered but are not persuasive.
Applicant’s declaration submits the claimed invention is unconventional and solves a technical problem. The NAV of a fund is inflated by the accrued but unpaid income. Borrowing terms from bond markets, the conventional price, includes accrued income, the dirty price. Excluding undistributed income would be a clean price. The income is carried in the price as a consequence of how the systems are configured to identify the recipient of the distribution., operating on a last holder-of-record basis. Securities issuers accrue dividends and capital gains into the NAV, the price then falls by that amount when the distribution is paid. The system has no means of capturing ownership as it changes over time and so carries the undistributed income in the price instead of allocating it to the owners who earned it.
The claimed system assigns each share a unique digital token and maintains a ledger that tracks the ownership of each token per unit of time. The system can now allocate a distribution among the holders in proportion to their actual ownership. Because the income is allocated in that manner it need not be carried in the price. The system computes the price with the undistributed income removed yielding a price equal to the value of the underlying holdings.
The claimed approach changes how the system represents, tracks and prices ownership. The result is a price that reflects the value of the underlying holdings, a distribution allocated to every owner accordingly, and more efficient and more nearly immediate settlement. The more accurate price is a function of the system as structured to track ownership.
The Office asserts that the process described for tracking ownership and distributing income accordingly, thus affecting the NAV on the ex-date is an accounting exercise. Although the claimed invention uses digital tokens and ledgers to represent ownership, and to track the holding periods these are merely tools for collecting and analyzing data. Aside from the immense volume of information that can be collected and analyzed, which is efficiently done using said tools, on a micro scale the tracking of ownership and analysis of which owners are distributed how much and when, is an accounting exercise. The fact that this exercise is not already performed may be less due to the ability of existing systems or technology than to the value of doing so from a practical perspective.
The applicant argues that treating every claim that computes a result as a mathematical process is improper.
The Office asserts that the claims do not merely computer a result but compute an amount. The invention is argued as a process and system for computing a value of a fund share. The value normally being computed in one fashion but now being computed in another. Applicant now seems to assert that the claims are not directed to computing a value. While the presence of a mathematical concept does not end the inquiry the claims do not appear to comprise a practical application or significantly more than the computation. The claim uses data representing the time during an accrual period which holders of the security own the fund or shared of the fund. This time is used to compute the amount of the distribution that is due to each holder. The claims use existing technology and systems to perform the functions of creating digital tokens, tracking and updating ownership data, crediting tokens to accounts and sending and receiving data about the ownership data, tokens, etc. Using the computed amounts the owners/holders of the tokens are paid the computed amounts accordingly. These processes do not represent a practical application or significantly more because there is no improvement of the computer itself, a technology or technological field. The improvement is directed to the method by which the distribution amounts are calculated, according to the time each member holds the security/fund in question. The means by which the tracking occurs is a function of adding the words “apply it” or the like. Additionally, the claims do not recite any meaningful limitations beyond merely linking the abstract idea to a particular technological environment.
The applicant argues the specification identifies a concrete problem in the field of computerized payment systems because prior art systems only make distributions to the last holder-of-record.
The Office asserts that this is not a limitation of the systems themselves so much as it is a limitation of the administrative process and a decision by those who have developed these processes to pay only the las holder-of-record, for business reasons.
The applicant asserts that the system uses a unique digital token with a unique identifier recorded on a digital ledger along with units of ownership time and that this framework represents a concrete technological framework conferring eligibility.
The Office asserts that again the elements recited are an adaption of a recordkeeping process to a computer system.
The applicant argues that the dependent claims confirm that the digital tokens represent concrete data structures confirming eligibility.
The Office asserts that the digital tokens are merely data. The data being represented digitally is merely a function of computer implementation.
The applicant asserts that the claims recite an ordered combination that is unconventional.
The Office asserts that the declaration shows that the method of computation is unconventional however, the particular arrangement has not been shown to be unconventional. It is unconventional to distribute fund income to all owners of a security during an accrual period from an accounting perspective but the system does not perform any unconventional activity as it merely collects data, analyzes the data, makes payments according to the analysis. It is the accounting activity which is unconventional but again not owing to any fault of technology but to business decisions.
The applicant argues the claims are novel and unobvious based on the lack of prior art rejections.
The Office asserts that while novelty and unobviousneess may be a consideration it is not determinative by itself.
The 112 rejections of claims 30 and 42 are withdrawn in view of the claim amendments.
The previous claim interpretation is withdrawn based upon further review.
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.
Claim(s) 1-3 and 5-43 are rejected under 35 U.S.C. 101 because the claimed invention is directed to an abstract idea without significantly more. The claim(s) recite(s):
A payment system for improving security pricing using digital tokens in a closed
loop, comprising:
a closed loop comprising a member, wherein the member comprises one or more of an investor and an intermediary appointed by the investor to act on the investor's behalf;
a server operably connected to the closed loop, the server configured to do one or more of control the system and process ownership data regarding ownership of a security by the member;
a distribution administrator computer system operably connected to the server, the distribution administrator computer system configured to receive from the member the ownership data, the distribution administrator computer system further configured to create a digital token to track ownership of the security by the member during a payment period, thereby generating updated ownership data, the distribution administrator computer system further configured to send the updated ownership data to the server, the distribution administrator computer system further configured to credit the digital token to an account of the member;
the distribution administrator computer system further configured to compute a price of the digital token equal to a price of the underlying security minus undistributed income of the security during the payment period; and
a security holder operably connected to the distribution administrator computer system, the security holder configured to hold the security, the security holder further configured to receive a total distribution on behalf of a member of the closed loop, the security holder further configured to send the total distribution to the distribution administrator computer system,
wherein the server is further configured to receive the updated ownership data from the distribution administrator computer system, wherein the server is further configured to compute, using the updated ownership data, a distribution amount to be paid to a member of the closed loop, wherein the server is further configured to send the distribution amount to the distribution administrator computer system, wherein the distribution administrator computer system is configured, using the distribution amount, to pay the member the distribution amount, and wherein the distribution administrator computer system is further configured to create, for each share of the security held by the security holder, a unique digital token comprising a unique identification number, and to track ownership of the digital token by the member for each of a plurality of units of time during the payment period.
Claim 1 represents mathematical concepts, mathematical calculations because the claim recites computing a distribution amount. As a whole the claim recites receiving member ownership data of a security, tracking ownership data, updating and sending ownership data and crediting an account of the member. A security holder to hold the security, receive a distribution amount on behalf of the member and send the distribution amount to an administrator. Receive the updated ownership data, compute a distribution amount to be paid the member, send the distribution amount to an administrator, and pay the member the distribution amount.
This judicial exception is not integrated into a practical application because the abstract idea is merely implemented by a computer system, comprised of a distribution administrator computer system, a server, and a digital token. These elements recite the performance of basic functions such as sending, receiving and tracking data and computing the distribution amount but do not describe performing these functions in any particular way (i.e., generically), therefore the abstract idea is supplemented by the words “apply it” or the like.
The claim(s) does/do not include additional elements that are sufficient to amount to significantly more than the judicial exception for the reasons stated above.
Claim 30 is similarly rejected.
42. A method for improving security pricing using digital tokens in a closed loop, comprising:
using a system comprising a closed loop comprising a member, wherein the member comprises one or more of an investor and an intermediary appointed by the investor to act on the investor's behalf;
a server operably connected to the closed loop, the server configured to do one or more of control the system and process ownership data regarding ownership of a security by the member, a distribution administrator computer system operably connected to the server, the distribution administrator computer system configured to receive from the member the ownership data, the distribution administrator computer system further configured to create a digital token to track ownership of the security by the member during a payment period, thereby generating updated ownership data, the distribution administrator computer system further configured to send the updated ownership data to the server, the distribution administrator computer system further configured to credit the digital token to an account of the member; and
a security holder operably connected to the distribution administrator computer system, the security holder configured to hold the security, the security holder further configured to receive a total distribution on behalf of the member of the closed loop, the security holder further configured to send the total distribution to the distribution administrator computer system, wherein the server is further configured to receive the updated ownership data from the distribution administrator computer system, wherein the server is further configured to compute, using the updated ownership data, a distribution amount to be paid to the member of the closed loop, wherein the server is further configured to send the distribution amount to the distribution administrator computer system, wherein the distribution administrator computer system is configured, using the distribution amount, to pay the member the distribution amount, and wherein the distribution administrator computer system further is configured to compute a price of the digital token equal to a price of the underlying security minus undistributed income of the security during the payment period; and
wherein the distribution administrator computer system further is configured to create, for each share of the security held by the security holder, a unique digital token comprising a unique identification number, and to track ownership of the digital token by the member for each of a plurality of units of time during the payment period;
calculating an ownership credit earned by each member of the closed loop based on each digital token owned by the respective member for a unit of time;
computing, using the updated ownership data, all distribution amounts due to all members of the closed loop, wherein the computing step further comprises computing the distribution amount to be paid to the member using an equation:
(2)Distribution Amount = (TD/TOC) * Ownership Credits, where TD = a total distribution for a security that is held by the security holder, where TOC = a total number of ownership credits that were generated by the digital token in the payment period, and where Ownership Credits represents a number of ownership credits earned in the payment period by the member of the closed loop;
sending the computed distribution amounts to all the members; and
using the distribution amount, paying the member the distribution amounts.
Claim 43 is similar to claim 42.
Claims 42 and 43 represent mathematical concepts including a mathematical formulas or equations since the claim recites the use a particular equation for calculating the distribution amount.
This judicial exception is not integrated into a practical application because the claims are similar to claims 1 and 30 but also add the equation used to calculate the distribution amount but use additional elements amounting to adding the words “apply it”, or the like as noted above in the rejection of claims 1 and 30.
Dependent claims 2-4, 6, 7, 9-11, 14, 16, 18-26, 28, and 29 merely narrow the abstract idea because they comprise actions which can be included in the abstract idea and implemented by the additional elements. Claims 8, 12, 13, 17 and 27 recite additional elements of the system, performing basic functions, such as sending and receiving or storing that amount to adding the words “apply it” as discussed previously.
Conclusion
Any inquiry concerning this communication or earlier communications from the examiner should be directed to WILLIAM E RANKINS whose telephone number is (571)270-3465. The examiner can normally be reached on 9-530 M-F.
If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Bennett Sigmond can be reached on 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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/WILLIAM E RANKINS/Primary Examiner, Art Unit 3694
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