DETAILED ACTION
Notice of Pre-AIA or AIA Status
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Status of Claims
This action is in reply to the amendment filed 06/09/2026.
Claims 1-14 have been amended. Claims 1-14 are pending and have been examined on the merits (claims 1 and 9 being independent).
The amendment filed 06/09/2026 to the claims has been entered.
Response to Arguments
Applicant’s arguments and amendments filed 06/09/2026 have been fully considered.
Application has amended to the claims 1 and 9 to overcome the examiner's previous rejection under 35 USC 112(a). The amendment successfully addresses the rejection and Applicant’s arguments (see response, pages 9-15) are persuasive. As such, the previous rejection has been withdrawn.
The Examiner respectfully rescinds the 35 USC 103 rejection in view of the amendments and arguments on pages 20-26 in Applicant’s response.
Applicants assert that the pending claims fully comply with the requirement of 35 U.S.C. 101. Examiner respectfully disagrees. Applicant’s argument and amendments have been considered and are not persuasive. The rejections under 35 U.S.C. 101 have been maintained and clarified in view of the USPTO MPEP 2106.
Applicant arguments (see Applicant’s remarks, pages 15-20):
A. Step 2A Prong 1: The Claims Are Not Directed to an Abstract Idea
(1) Applicant's arguments that “When the claims are read as a whole, the specific advance recited is not portfolio management or risk management in the abstract, but rather a specific technical architecture for computer-implemented securities allocation that restructures the data flow of a portfolio management system to eliminate external network communications.” (see remarks, page 16), are not found persuasive.
In response (1): In the instant application, under Step 2 A, Prong 1 of the 2019 Revised § 101 Guidance, it is determined whether the claims are directed to a judicial exception such as a law of nature, a natural phenomenon, or an abstract idea (See Alice, 134 S. Ct. at 2355) by identify the specific limitation(s) in the claim that recites abstract idea(s); and then determine whether the identified limitation(s) falls within at least one of the groupings of abstract ideas enumerated in the MPEP 2106.04. The cited limitations as drafted are systems and methods that, under their broadest reasonable interpretation, covers performance of a method of organizing human activity, but for the recitation of the computer components (e.g., processors, an asset database, servers, a user interface). Further, none of the limitations recite technological implementations details for any of the steps but, instead, only recite broad functional language being performed by the generic use of at least one processor. Managing a risk in a diversified security portfolio and a portfolio of an investment is a fundamental economic practice long prevalent in commerce systems. If a claim limitation, under its broadest reasonable interpretation, covers a fundamental economic principle or practice but for the general linking to a technological environment, then it falls within the organizing human activity grouping of abstract ideas (see MPEP 2106.04(a)(2)).
Furthermore, the claim limits also recite the use of processors, database, servers, user interface as additional elements. However, the use of these additionally elements, described at a high level of generality, perform generic computer functions such that it amounts to no more than mere instruction to apply the exception to a particular technological environment. In conclusion, Examiner fails to see how to improve the performance of the computer system itself by optimizing network usage and processing latency (e.g., a specific technical architecture for computer-implemented securities allocation that restructures the data flow of a portfolio management system to eliminate external network communications as argued).
(2) Applicant's arguments that “The Federal Circuit has held that specific, rule-based computational processes are patent-eligible where the claims are directed to a specific implementation of a solution to a problem in the software arts. Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1339 (Fed. Cir. 2016). Similarly, in McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016), the court found claims patent-eligible where they recited a specific set of rules that achieved an improved result – the claims were directed to the specific rules themselves, not to the abstract goal of animation. The same logic applies here: the claims are directed to the specific algorithm and architecture, not to the abstract goal of portfolio risk management.” (see remarks, page 17), are not found persuasive.
In response (2):
In Enfish, the courts applied the distinction to reject the §101 challenge at stage one because the claims in Enfish focused not on asserted advances in uses to which existing computer capabilities could be put, but on a specific improvement a particular database technique in how computers could carry out one of their basic functions of storage and retrieval of data. Enfish, 822 F.3d at 1335-36; see Bascom, 827 F.3d at 1348-49, 2016 WL 3514158, at *5; cf. Alice, 134 S.Ct. at 2360 (noting basic storage function of generic computer). The present case is different: the focus of the claims is not on such an improvement in computers as tools, but on certain independently abstract ideas that use computers as tools for optimizing the diversified security portfolio. So Enfish has no applicability.
In McRO, the claims were held patent eligible because the claims were directed at specific rules that resulted in an improvement to the technology of computer generated lip synchronization. The McRO court indicated that it was the incorporation of the particular claimed rules in computer animation that "improved [the] existing technological process." The claims at issue in McRO described a specific way (use of particular rules to set morph weights and transitions through phonemes) to solve the problem of producing accurate and realistic lip synchronization and facial expressions in animated characters, allowing the computer to perform a function not previously performable by a computer. In the instant application, the examiner fails to see where the technological improvement is, the limitations are directed towards steps performed on a computer, the functioning of the additional elements or technological processes themselves and as whole are not improved. Furthermore, the patent claims here are not directed to a specific implementation to a solution to a problem in the software arts of improving computer animation through the use of specific rules, therefore McRO has no applicability.
B. Step 2A Prong 2: The Claims Integrate Any Exception into a Practical Application
(3) Applicant's arguments that “The improvement is not merely faster performance of the same abstract process, but rather a different technical approach that restructures data flow and processing to eliminate repeated external network communications, a concrete and measurable improvement to computer system performance that is tied directly to the specific technical architecture recited in the claims. This is precisely the type of improvement that the Federal Circuit found patent-eligible in Packet Intelligence LLC v. NetScout Systems, Inc., 965 F.3d 1299 (Fed. Cir. 2020), where claims that reduced network traffic through a specific technical mechanism were held patent eligible, and in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), where claims that overrode the routine operation of internet communications to achieve a technical result were found eligible.” (see remarks, page 18), are not found persuasive.
In response (3): The instant claims do not integrate the exception into a practical application because additional elements: 1) “an asset database”, “one or more processors” , and “one or more servers” amount to simply applying the abstract idea to a computer component (e.g. “apply it”) 2) “a user interface” describe transmitting generic instructions to a generic device. The server or a user interface is not described in the specification in such a way require anything more than merely a generically transmitting data or instructions, and therefore also amounts to simply applying the abstract idea to a server and client combination, or generically over the network. (e.g. “apply it” or the equivalent) do not apply, rely on, or use the judicial exception in a manner that that imposes a meaningful limitation on the judicial exception (i.e. apply it 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 - see MPEP 2106.05(f)). The claim limits also recite the use of processors, an asset database, servers, user interface as additional elements. However, the use of these additionally elements, described at a high level of generality, perform generic computer functions such that it amounts to no more than mere instruction to apply the exception to a particular technological environment. In conclusion, Examiner fails to see how the claimed invention reduces network traffic and reduces latency by eliminating the need to transmit buy/sell orders over a network to an external broker for every individual allocation as argued.
In Packet Intelligence LLC v. NetScout Sys, the patents were related to network packet monitoring and analysis of conversational flows. In contract, the instant case is for determining a weighting of a diversified security portfolio and providing the determined weighting and the modified diversified security portfolio to a user with merely using a computer as a tool to perform an abstract idea. So Packet Intelligence has no applicability.
In DDR, the claims here are not like those the Court found patent eligible in DDR, in which the inventive concept was in the modification of conventional mechanics behind website display to produce a dual-source integrated hybrid display because applicant’s claims here do not address problems unique to the Internet or require an arguably inventive device or technique for displaying information. So DDR has no applicability.
C. Step 2B: The Claims Recite Significantly More Than Any Abstract Idea
(4) Applicant's arguments that “The Office's Step 2B analysis stated that the additional elements "amount to no more than mere instructions to apply the exactly using generic computer component." Applicant respectfully submits that this analysis fails to consider the claim elements as an ordered combination, as required by Alice Corp. v. CLS Bank Int'l, 573 U.S. 208 (2014), and as directed by the 2019 Revised Guidance.” (see remarks, page 19), are not found persuasive.
In response (4): The claim does not include additional elements that are sufficient to amount to significantly more than the judicial exception. As discussed above with respect to integration into a practical application, the additional elements amount to no more than mere instructions to apply the exactly using generic computer component. The claim elements when considered separately and in an ordered combination, do not add significantly more than implementing the abstract idea over a generic computer with a generic interface element.
(5) Applicant's arguments that “In BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016), the Federal Circuit held that an inventive concept can be found in an unconventional arrangement of individually conventional elements. The court noted that "the claims may instead represent a non-routine and unconventional arrangement of known, conventional pieces." Id. at 1350.” (see remarks, page 19), are not found persuasive.
In response (5): In BASCOM, when analyzing the claims under step 2B Examiner’s search for an inventive concept that can amount to significantly more, such as improvements to the functioning of a computer, improvements to any other technology or technical field, applying the judicial exception with, or by use of, a particular machine, effecting a transformation or reduction of a particular article to a different state or thing, adding a specific limitation other than what is well-understood, routine, conventional activity in the field, or adding unconventional steps that confine the claim to a particular useful application, e.g., a non-conventional and non-generic arrangement of various computer components for filtering Internet content, as discussed in BASCOM, or other meaningful limitations beyond generally linking the use of the judicial exception to a particular technological environment (see MPEP 2106.05).
The claims here are not like those the Court found patent eligible in BASCOM, in which the inventive concept was the unconventional arrangement of the installation of a filtering tool at a specific location, remote from the end-users, with customizable filtering features specific to each end user, this design permitted the filtering tool to have both the benefits of a filter on a local computer and the benefits of a filter on the [Internet Service Provider] server and was not conventional or generic, instead, the patent claimed and explained how a particular arrangement of elements was “a technical improvement over prior art ways of filtering such content.” (BASCOM, 827 F.3d at 1345.). In the instant application the claims do not have an inventive concept found in the non-conventional and non-generic arrangement of the additional elements. So, BASCOM has no applicability.
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 1-14 are rejected under 35 U.S.C. 101 because the claimed invention is directed to non-statutory subject matter without significantly more.
When considering subject matter eligibility under 35 U.S.C. 101, (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. If the claim does fall within one of the statutory categories, (2a) 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 (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 include fundamental economic practices; certain methods of organizing human activities; an idea itself; and mathematical relationships/formulas. Alice Corporation Pty. Ltd. v. CLS Bank International, et al., 573 U.S. (2014).
The claimed invention is directed to a judicial exception (i.e. a law of nature, a natural phenomenon, or an abstract idea) without significantly more. In the instant case, the claim(s) as a whole, considering all claim elements both individually and in combination, do not amount to significantly more than an abstract idea.
Step (1): In the instant case, the claims are directed towards to a method for managing a risk based on a diversified security portfolio and a portfolio of an investment which contains the steps of receiving, configuring, determining, modifying, calculating, generating, testing, computing, and transmitting. The claim recites a series of steps and, therefore, is a process. The claims do fall within at least one of the four categories of patent eligible subject matter because claim 1 is direct to a method and claim 9 is direct to a system, i.e. machines programmed to carrying out process steps, Step 1-yes.
Step (2A) Prong 1: A method for managing a risk based on a diversified security portfolio and a portfolio of an investment is akin to the abstract idea subject matter grouping of: Certain Methods of Organizing Human Activity as fundamental economic principles or practices and commercial or legal interactions. As such, the claims include an abstract idea.
The specific limitations of the invention are (a) identified to encompass the abstract idea include (e.g., independent claim 1): {… receiving, ….., a plurality of securities from an asset database configured as a pool of assets holding an inventory of securities purchased prior to allocation; upon receipt of the securities, configuring, ….., said diversified security portfolio based on predetermined portfolio configuration parameters obtained by ….., wherein the configuring comprises allocating a quantity of said plurality of securities from the inventory of the pool of assets to the diversified security portfolio by executing an internal database transaction that reduces a balance of said inventory in the pool of assets and records said quantity in the diversified security portfolio without generating an external market order for said quantity, said allocating being performed at client subscription, upon determining that both a predetermined securities exposure threshold and a predetermined portfolio volatility threshold are satisfied, by transferring said quantity from the pool of assets to a client account; determining, ….., the weighting of the configured diversified security portfolio, said determining being based on market data parameters provided by ….., said market data parameters comprising market capitalization of the respective security, volatility of the respective security and correlation between the securities within the diversified security portfolio, modifying the configured diversified security portfolio based on the determined weighting and a determined volatility level for the modified diversified security portfolio, wherein said modifying comprises a risk-based customization of the weightings of the predefined securities of the portfolio at client subscription, first adjusting said weightings to satisfy the predetermined securities exposure threshold and then adjusting said weightings to satisfy the predetermined portfolio volatility threshold determined based on the client's risk appetite, to obtain a modified diversified security portfolio, wherein the determining comprises: (a) calculating an overall adjusted market capitalization of the companies corresponding to the securities comprising the portfolio, including adjusting the market capitalization of one or more companies if an initial weighting exceeds the predetermined securities exposure threshold set to avoid overexposure; (b) generating a starting portfolio volatility based on the overall adjusted market capitalization, the correlation between the securities, and the volatility of each security; (c) testing whether the starting portfolio volatility exceeds the predetermined portfolio volatility threshold; and (d) generating weighting scenarios and further adjusting the market capitalization until both the predetermined securities exposure threshold and the predetermined portfolio volatility threshold are met, whereupon the weightings are finalized and quantities of securities to be allocated to the client are calculated based on said finalized weightings and market prices on a client subscription date; receiving, ….., market data from one or more ….., said market data comprising an asset price and an exchange rate of the respective security; computing, ….., one or more of a dividend and a coupon of the respective security based on said quantities allocated to the client; transmitting, ….., the determined weighting and the modified diversified security portfolio to a user …..}
As stated above, this abstract idea falls into the (b) subject matter grouping of: Certain Methods of Organizing Human Activity as fundamental economic principles or practices and commercial or legal interactions as determining a weighting of a diversified security portfolio and providing the determined weighting and the modified diversified security portfolio to a user.
Step (2A) Prong 2: The instant claims do not integrate the exception into a practical application because additional elements: 1) “one or more processors”, “one or more servers”, and “asset database” amount to simply applying the abstract idea to a computer component (e.g. “apply it”) 2) “a user interface” describe transmitting generic instructions to a generic device. The user interface is not described in the specification in such a way require anything more than merely a generically transmitting data or instructions, and therefore also amounts to simply applying the abstract idea to a computer component and client combination, or generically over the network. (e.g. “apply it” or the equivalent) do not apply, rely on, or use the judicial exception in a manner that that imposes a meaningful limitation on the judicial exception (i.e. generally linking the use of the judicial exception to a particular technological environment or field of use - see MPEP 2106.05(h) or apply it 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 - see MPEP 2106.05(f)).
The instant recited claims including additional elements (i.e. processors, database, servers, user interface) 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 paragraphs [107-109]: “the system further comprises a sixth module”, “a computer software”, “instructions”, “a processor”, “a computer-readable non-transient recording medium”) as apply it 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 - see MPEP 2106.05(f)). Therefore, the claims are directed to an abstract idea
Step (2B): 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., processors, database, servers, user interface) amount to no more than mere instructions to apply the exactly using generic computer component. The claim elements when considered separately and in an ordered combination, do not add significantly more than implementing the abstract idea.
The computer is merely a platform on which the abstract idea is implemented. Simply executing an abstract concept on a computer does not render a computer “specialized,” nor does it transform a patent-ineligible claim into a patent-eligible one. See Bancorp Servs., LLC v. Sun Life Assurance Co. of Can., 687 F.3d 1266, 1280 (Fed. Cir. 2012). There are no improvements to another technology or technical field, no improvements to the functioning of the computer itself, transformation or reduction of a particular article to a different state or thing or any other meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment as a result of performing the claimed method. Also, the addition of merely novel or non-routine components to the claimed idea does not necessarily turn an abstraction into something concrete (See Ultramercial, Inc. v. Hulu, LLC, _ F.3d_, 2014 WL 5904902, (Fed. Cir. Nov. 14, 2014). In conclusion, merely “linking/applying” the exception using 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.
Dependent claims 2-8 and 10-14 when analyzed as a whole and in an ordered combination are held to be patent ineligible under 35 U.S.C. 101 because the additional recited limitation(s) fail(s) to establish that the claim(s) is/are not directed to an abstract idea, as detailed below. The additional recited limitations in the dependent claims only refine the abstract idea.
For instance, in claim 2, the step of “… wherein the configuring comprises transferring a number of shares of said respective security …. or transferring a number of shares of said respective security ….” (i.e., transferring a share), in claims 3 and 10, the step of “… storing, …., a plurality of fee matrices, said fee matrices comprising at least one fee among an entry fee, an exit fee, a management fee, and a performance fee of the modified diversified security portfolio, ….” (i.e., storing fee matrices), in claims 4 and 11, the step of “… storing, …, static data, and (ii) receiving transaction instructions.” (i.e., storing and receiving data), in claims 5 and 12, the step of “computing, …., one or more of a dividend, a coupon, an asset price, and an exchange rate of the respective security of the diversified security portfolio...” (i.e., computing a dividend), in claim 6, the step of “… receiving, the configuring, the determining, and the transmitting are carried out iteratively for the respective security…..” (i.e., monitoring a value of the weighting), in claim 7, the step of “… (i) the transferring of the number of shares of the respective security …. (ii) the transferring the number of shares of said respective security …., and (iii) transferring a transaction instruction of the respective security ….” (i.e., transferring a share), and in claim 8, the step of “… providing the user interface, …., with a notification message, said notification message comprising at least one of an information of the diversified security portfolio, a transaction suggestion of the security in the diversified security portfolio ….” (i.e., providing a message to a user) are all processes that, under its broadest reasonable interpretation, covers performance of a fundamental economic practice but for the recitation of a computer component. Performing a rebalancing of the assets for a diversified security portfolio in order to reduce a risk is a most fundamental commercial process.
This is an abstract concept with nothing more and is also considered mere instructions to apply an exception akin to a commonplace business method or mathematical algorithm being applied on a general purpose computer, Alice Corp. Pty. Ltd.; Gottschalk and Versata Dev. Group, Inc.; see MPEP 2106.05(f)(2).
In dependent claims 2-8 and 10-14, the step claimed are rejected under the same analysis and rationale as the independent claims 1 and 9 above. Merely claiming the same process to perform a rebalancing of the assets for a diversified security portfolio in order to reduce a risk does not change the abstract idea without an inventive concept or significantly more. Clearly, the additional recited limitations in the dependent claims only refine the abstract idea further. Further refinement of an abstract idea does not convert an abstract idea into something concrete.
Therefore, claims 1-14 are rejected under 35 U.S.C. 101 as being directed to non-statutory subject matter.
Conclusion
The prior art made of record but not relied upon herein but pertinent to Applicant’s disclosure is listed in the enclosed PTO-892.
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 extension fee 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.
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/YONGSIK PARK/Examiner, Art Unit 3694
August 6, 2026
/BENNETT M SIGMOND/Supervisory Patent Examiner, Art Unit 3694
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