DETAILED ACTION
Notice of Pre-AIA or AIA Status
1. The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
Continued Examination Under 37 CFR 1.114
2. A request for continued examination under 37 CFR 1.114, including the fee set forth in 37 CFR 1.17(e), was filed in this application after final rejection. Since this application is eligible for continued examination under 37 CFR 1.114, and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114. Applicant's submission filed on 3/23/2026 has been entered.
Claim Rejections - 35 USC § 112
3. The following is a quotation of the first paragraph of 35 U.S.C. 112(a):
(a) IN GENERAL.—The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.
The following is a quotation of the first paragraph of pre-AIA 35 U.S.C. 112:
The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.
4. Claims 1-20 are rejected under 35 U.S.C. 112(a) or 35 U.S.C. 112 (pre-AIA ), first paragraph, as failing to comply with the written description requirement. The claim(s) contains subject matter which was not described in the specification in such a way as to reasonably convey to one skilled in the relevant art that the inventor or a joint inventor, or for applications subject to pre-AIA 35 U.S.C. 112, the inventor(s), at the time the application was filed, had possession of the claimed invention.
The Specification, ¶[00126] recites, “If any node reports a transaction conflict (such as, e.g., due to a concurrent transaction already in process), all nodes must reject the transaction. Otherwise, if, for example, greater than or equal to 50% of nodes report an error, all nodes must reject the transaction, or if less than 50% of nodes report an error (i.e., the transaction is rejected), they are removed from the cluster.”
Claims 1, 18, and 20 recite “removing from a cluster of nodes those nodes that reported an error.” There is a lack of written description in the Specification describing how a cluster of nodes is removed.
The remaining claims are rejected due to the dependency to claims 1, 18 and 20.
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.
5. Claims 1-20 are rejected under 35 U.S.C. 101 because the claimed invention recites an abstract idea without significantly more.
Using the language in claim(s) 1 to illustrate, the limitations of: receiving a request to register a security, the request received from an authorized entity; registering the security within a marketplace for securitized intellectual property (IP), wherein a plurality of shares for the security are publicly listed within the marketplace based on a request from the authorized entity to list the shares, wherein registering comprises: receiving an escrow account for the security; executing a smart contract, comprising a program stored on a blockchain, wherein the smart contract is cryptographically signed by the authorized entity; and generating the plurality of shares; receiving, within the marketplace, a trading request corresponding to at least a subset of the plurality of the listed shares of the security associated with one or more IP assets, wherein the trading request represents one of a purchase request or a sale request; calculating a total price for the trading request based on the subset of shares in the trading request; and
determining that the trading request pertains to a trade that would lead to a change in a price of the security beyond a price change threshold, and based on the determination, the system rejects the trading request, otherwise processing the trading request by: generating a unique token for the trading request; executing a transfer of the shares from a seller of the shares to a clearinghouse application; executing a transfer of currency in the amount of the purchase price from a buyer to the clearinghouse application; broadcasting a transaction of the transfer to a plurality of nodes of a blockchain; wherein nodes of blockchain each host a capitalization table; and if over a predetermined percentage of nodes of blockchain report an error, rejecting transaction, otherwise, executing a transfer of the shares from the clearinghouse application to the buyer and a transfer of the currency from the clearinghouse application to the seller, and removing from a cluster of nodes those nodes that reported an error, as drafted, is a process that, under its broadest reasonable interpretation, covers certain methods of organizing human activity, in particular, fundamental economic principles or practices, but for the recitation of generic computer components.
The claims as a whole recite a method of organizing human activity. The claimed invention allows for financial trading including use of a marketplace for trading securitized intellectual property with tokenization of shares and transfer of shares which is a fundamental economic practice. The mere nominal recitation of generic one or more server(s), and a blockchain do not take the claim out of the methods of organizing human activity grouping. Thus, under Eligibility Step 2A, prong one, (MPEP §2106.04(a)), the claims recite an abstract idea.
Under Eligibility Step 2A, prong two, (MPEP §2106.04(d)), this judicial exception is not integrated into a practical application. In particular, the claims only recite the additional elements— one or more servers and a blockchain. The one or more servers and blockchain are recited at a high-level of generality (i.e., as generic server(s) performing generic computer functions of receiving an escrow account, executing a smart contract, generating the plurality of shares, receiving a trading request, calculating a total price for the trading request, determining that the trading request pertains to a trade that would lead to change in a price, processing the trading request by generating a unique token, executing a transfer of shares from a seller of the shares to a clearinghouse application, executing a transfer of currency, broadcasting a transaction to nodes of a blockchain, and wherein the nodes of the blockchain each host a capitalization table, if over a predetermined percentage of nodes report an error, reject the transaction, otherwise executing a transfer of the shares from the clearinghouse application to the buyer and transfer of currency from clearinghouse to the seller, and remove nodes that reported an error) such that they amount to no more than mere instructions to apply the exception using generic computer components (see MPEP §2106.05(f)).
Although a blockchain is recited, such recitation is generic. The object of the claims is to trade securities associated with IP assets, registering a security, executing a smart contract cryptographically signed by an authorized entity, generating a unique token for a trading request, executing a transfer of currency, and broadcasting the transaction of the transfer to nodes of a blockchain, rejecting erroneous transactions, removing nodes reporting an error. This calls for the generic use of the blockchain in the manner this technology customarily operates. Simply reciting a particular technological module or technological environment does not confer eligibility. Accordingly, these additional elements do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea.
Similar arguments can be extended to independent claims 18 and 20 and hence claims 18 and 20 are rejected on similar grounds as claim 1. In addition, claim 18 recites a system comprising one or more processors that amount to generic computer implementation and claim 20 merely recites a non-transitory computer-readable medium containing instructions with no recitation of any computer components implementing the instructions. The claims are directed to an abstract idea.
Under Eligibility Step 2B, (MPEP §2106.05), the claim(s) does/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 of using one or more servers to implement claimed functions and using a blockchain, amounts to no more than mere instructions to apply the exception using generic computer components. Mere instructions to apply an exception using generic computer components cannot provide an inventive concept. The claims are not patent eligible.
The dependent claims have been given the full two part analysis including analyzing the additional limitations both individually and in combination. The dependent claim(s) when analyzed both individually and in combination are also held to be patent ineligible under 35 U.S.C. 101 because for the same reasoning as above and the additional recited limitation(s) fail(s) to establish that the claim(s) is/are not directed to an abstract idea. Dependent claims 2-17, 19 simply help to define the abstract idea. The additional limitations of the dependent claim(s) when considered individually and as an ordered combination do not amount to significantly more than the abstract idea.
Viewing the claim limitations as an ordered combination does not add anything further than looking at the claim limitations individually. When viewed either individually, or as an ordered combination, the additional limitations do not amount to a claim as a whole that is significantly more than the abstract idea. Accordingly, claim(s) 1-20 is/are ineligible.
Response to Arguments
6. In response to the amendment of claims 1, 18 and 20, the Examiner withdraws the 35 U.S.C. §103 rejection.
Applicant's arguments concerning the rejection of the claims under 35 USC 101 have been fully considered but they are not persuasive.
On page 12 of the Remarks, Applicant argues that the claims are not directed to an abstract idea and are not directed to a mental process because the claimed steps are not practically performed in the human mind or using pen/paper. The argument is not convincing. As indicated in the 35 USC 101 rejection above, the claims are directed to financial trading including use of a marketplace for trading securitized intellectual property with tokenization of shares and transfer of shares which is a fundamental economic practice and falls into the grouping of abstract ideas of Certain Methods of Organizing Human Activity.
Applicant further argues that none of the claim limitations are directed towards any of the enumerated categories of abstract ideas. The Examiner respectfully disagrees, the Patent Office has issued guidance about subject matter eligibility -See MPEP§ 2106 (9th ed. Rev. 10.2019, rev. June 2020), in particular, Sections 2103 through 2106.07(c). As indicated in the MPEP § 2106, to decide whether a claim is directed to an abstract idea, we evaluate whether the claim (1) recites one of the abstract ideas listed in the Revised Guidance (“Prong One”) and (2) fails to integrate the recited abstract idea into a practical application (“Prong Two”).
Beginning with Prong One, step 2A of the eligibility analysis, we must determine whether the claims at issue are directed to one of those patent-ineligible concepts. One of the subject matter groupings identified as an abstract idea in the Guidance is “[certain methods of organizing human activity—fundamental economic principles or practices (including . . . mitigating risk, insurance); commercial. . . interactions (including agreements in the form of contracts; . . . sales activities or behaviors; business relations); managing personal behavior or relationships or interactions between people (including . . . following rules or instructions)].” See MPEP 2106.04(a).
Here, apart from the recited systems, i.e., one or more servers and a blockchain architecture, the claims recite abstract ideas in the category of “methods of organizing human activity.” In the 101 analysis in the rejection above, the Examiner identifies and considers each of the underlying steps for the claims as a basis for describing and explaining the recited abstract idea. For example, the Examiner identifies the underlying steps of claim 1—i.e., the “receiving,” “executing,” “generating,” “calculating,” “determining,” “broadcasting,” and “removing”—and explains that they describe the concept of financial trading including use of a marketplace for trading securitized intellectual property with tokenization of shares and transfer of shares (fundamental economic practice). The Examiner' s approach here is consistent with USPTO guidance.
Applicants argue that the claims recite elements or a combination of elements which “integrate the exception into a practical application of the exception” because the claims improve the efficiency of the operation of the use of the nodes of a blockchain by ensuring that over predetermined percentage of nodes of the blockchain (e.g., 50 %) will always have a consistent transaction history which can be used to resolve any disparity or dispute. The argument is not persuasive.
Under the 2019 PEG, Step 2A, prong two, integration into a practical application requires an additional element(s) or a combination of additional elements in the claim to apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the exception. Limitations that are not indicative of integration into a practical application are those that are 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).
Furthermore, in determining whether a claim integrates a judicial exception into a practical application, a determination is made of whether the claimed invention pertains to an improvement in the functioning of the computer itself or any other technology or technical field (i.e., a technological solution to a technological problem).
Here, the claims recite generic computer components, i.e., one or more servers, use of a blockchain. The one or more servers and using a blockchain are recited at a high level of generality and are recited as performing generic computer functions customarily used in computer applications.
Furthermore, although a blockchain is recited, such recitation is generic. The object of the claims is to trade securities associated with IP assets, executing a smart contract, comprising a program stored on a blockchain, generating a unique token for a trading request, executing a transfer of currency, and broadcasting the transaction of the transfer to nodes of a blockchain, rejecting erroneous transactions, removing nodes reporting an error. This calls for the generic use of the blockchain in the manner this technology customarily operates. Simply reciting a particular technological module or technological environment does not confer eligibility.
Applicant suggests that the inventive system improves efficiency by removing those nodes from a cluster that are report [SIC] errors. As indicated in the 35 USC 112(a) rejection for lack of written description above, the Spec. ¶[00126], recites, “Otherwise, if, for example, greater than or equal to 50% of nodes report an error, all nodes must reject the transaction, or if less than 50% of nodes report an error (i.e., the transaction is rejected), they are removed from the cluster.”
It is unclear how the system removes nodes from the blockchain. There is a lack of written description in the specification of how this is accomplished.
Conclusion
7. The prior art made of record and not relied upon is considered pertinent to applicant's disclosure.
US 2019/0251629 (Gordon, III et al.)-blockchain instrument for transferable equity including a tokenized securities offering entity (e.g., a broker or a company) registers on the blockchain-based security token platform. The blockchain-based security token platform then creates a proxy contract with the broker or company for a tokenized securities offering. The tokenized securities offering entity then creates tokenized securities on the blockchain-based security token platform, which deploys tokenized securities contracts for the tokenized securities offering entity. The tokenized securities offering entity then adds its investors and/or owners to the blockchain-based security token platform, which requests a capitalization table for verification from the investors and/or owners. Interested investors can register on the blockchain-based security token platform for participating in the tokenized securities offering.
Rees, Katie. “No, You Cannot Remove Data From the Blockchain. Here’s Why.” Aug 4, 2022.-cited for Blockchains being immutable and any data on it has been verified and data added to the block cannot be altered or deleted. Once data is added to a block, it is shared with every node within the network. Hashing is part of the cryptographic process used by blockchains to keep data safe. Hashes cannot be altered once created.
Ralzada, Suyash. “Blockchain Nodes,” Blockchain Council. Feb 22, 2022.-cited for its reference to Blockchain nodes, creation of blockchain nodes, usage of nodes, updating nodes.
“What Would a Full Node Do If It Finds an Error?” Bitcoin. Nov 12, 2017.-cited for its reference to if an invalid transaction is found, the full node will not report the transaction to the user. For an invalid block, the confirmation of a transaction is not reported. An invalid transaction is treated as no transaction. When a node receives a block with an invalid transaction, it will notice this during full validation of the block it performs. It will then reject the block, not add it to its blockchain and ban the node that relayed it. Nodes will never relay information that they consider invalid.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to ELDA MILEF whose telephone number is (571)272-8124. The examiner can normally be reached Monday-Thursday 6:30am-3:30pm; Friday 7am-12pm.
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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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/ELDA G MILEF/Primary Examiner, Art Unit 3694
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