DETAILED ACTION
The present application is being examined under the pre-AIA first to invent provisions.
This action is responsive to claims filed 02/18/2026 and Applicant’s communication regarding application 18/407607 filed 02/18/2026.
As such, claims 1-20 have been examined with this office action.
Continued Examination Under 37 CFR 1.114
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and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114.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 has been entered.
Claim Interpretation
The claim limit “receiving a request that an unexecuted order be routed from the electronic trading system to an external trading system based on the external trading system having a lower routing time for the unexecuted order than the electronic trading system, wherein the request is executable after determining that the unexecuted order has been extant on the electronic trading system for at least a predetermined time delay, and that the unexpected order includes a price thereof that is disposed within a predetermined price threshold of a highest order price” is interpreted in view of the Specification paragraphs [0093-0099] which reads:
[0093] II.C. Order routing, exchangeability and substitutability
[0094] Although the above invention creates considerable advantages in margin reduction across similar asset classes, price convergence and economic equivalence between contracts traded on an exchange using the above-described mechanisms and other competing exchanges (offering economically similar but non-fungible contracts) may be further improved by smart order routing. In some cases, a customer may require that a futures order be traded on a specific exchange, or may specify that the order be preferentially routed to whichever venue has the better price, shorter routing time, or other considerations. Preference factors for smart order routing may include the following:
[0095] Preferred first exchange
[0096] Routing Price Delta (a counterparty’s perceived price offset between one exchange instrument of contract versus another exchange’s instrument or contract)
[0097] Routing Trigger (a number that defines the number of increments a resting order must be within the best bid price or best offer price on the first exchange before any part of it is routed to the second exchange).
[0098] Routing Percentage (% of an order untraded on the first exchange when subjected to the routing trigger that the counterparty would then prefer to see routed to the second exchange)
[0099] Routing Delay (once triggered the time delay down to milliseconds that any part of the unexecuted order should exist on the first exchange before going to second exchange)
The claim limit is claimed and described in the Specification at a high level of generality as merely preference factors for smart order routing and, thus, is part of the abstract idea of the claims and not a technical solution to problem.
Claim Rejections - 35 USC § 112
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.
Claims 1 and 11 and any claims which depend therefrom 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. Applicant introduces new matter to claims 1 and 11. Applicant amended claims 1 and 11 recite the limit (or an equivalent) "generating a transaction data structure that links orders for the bond futures contracts and the bonds; processing the transaction data structure such that the orders are executed substantially simultaneously, including cancelling a remainder of the order for the bond futures contract if a filled quantity does not match an integer clip size in the execution schedule;”. There is no support for a transaction data structure which perform the functional limitations of the claims. As such, the amended claims as cited adds new matter as claimed and is rejected along with any claims which depend therefrom fail to comply with the written description requirement.
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 an abstract idea of trading financial instruments without significantly more.
Subject Matter Eligibility Standard
When considering subject matter eligibility under 35 U.S.C. 101, 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, 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, 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) as provided by the interim guidelines FR 12/16/2014 Vol. 79 No. 241.
Analysis
Step 1, the claimed invention must be to one of the four statutory categories. 35 U.S.C. 101 defines the four categories of invention that Congress deemed to be the appropriate subject matter of a patent: processes, machines, manufactures and compositions of matter. In this case independent claim 1 and all claims which depend from it are directed toward a system, and independent claim 10 and all claims which depend from it are directed toward a method and independent claim 20 all claims which depend from it are directed toward a computer readable medium storing instruction to perform functions/steps. As such, all claims fall within one of the four categories of invention deemed to be the appropriate subject matter.
Step 2A Prong 1, 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 2019 PEG.
Specifically, claim 1 comprises inter alia the functions or steps of “A computer-implemented method, comprising the steps of: communicating orders, via an electronic trading system, to trade bond futures contracts to bond futures traders;
receiving, via the electronic trading system, acceptances of the orders from the bond futures traders; in response to receiving the acceptances, generating, by the electronic trading system, executed bond futures trades and bond futures positions and storing the executed bond futures trades and bond futures positions in a database; in response to detecting arrival of one or more predetermined times and/or occurrences of one or more predetermined events, and pursuant to a contractual relationship among the bond futures traders and an operator of the electronic trading system, purchasing or selling, via the electronic trading system, bond positions economically equivalent to positions of the bond futures traders in the executed bond futures so as to cancel delivery obligations under the bond futures contracts, and storing the cancellation in the database;
after purchasing or selling the bond positions, reselling andl/or repurchasing, via the electronic trading system, bonds so as to reestablish the delivery obligations under the bond futures contracts, and storing the reestablished delivery obligations in the database;
determining a clip ratio based on a relative DV01 of the bond futures contracts and the bonds: calculating an execution schedule including a plurality of integer clip sizes for the bond futures contracts by scaling integer increments of the bonds by the determined clip ratio; generating a transaction data structure that links orders for the bond futures contracts and the bonds; processing the transaction data structure such that the orders are executed substantially simultaneously, including cancelling a remainder of the order for the bond futures contract if a filled quantity does not match an integer clip size in the execution schedule; and
receiving a request that an unexecuted order be routed from the electronic trading system to an external trading system based on the external trading system having a lower routing time for the unexecuted order than the electronic trading system, wherein the request is executable after determining that the unexecuted order has been extant on the electronic trading system for at least a predetermined time delay,
the unexecuted order includes a price thereof that is disposed within a predetermined price threshold of a highest order price, and
the unexecuted order includes a predefined percentage thereof that is set to be routed to the external trading system when the predetermined time delay is detected and the price is disposed within the predetermined price threshold”.
Claim 11 comprises inter alia the functions or steps of “A computer apparatus, including:an electronic trading system; and a database, wherein the electronic trading system is configured to: communicate orders to trade bond futures contracts to bond futures traders; receive acceptances of the orders from the bond futures traders; in response to receiving the acceptances, generate executed bond futures trades and bond futures positions and storing the executed bond futures trades and bond futures positions in a database; in response to detecting arrival of one or more predetermined times and/or occurrences of one or more predetermined events, and pursuant to a contractual relationship among the bond futures traders and an operator of the electronic trading system, purchase or sell bond positions economically equivalent to positions of the bond futures traders in the executed bond futures so as to cancel delivery obligations under the bond futures contracts, and store the cancellation in the database; after purchasing or selling the bond positions, resell and/or repurchase bonds so as to reestablish the delivery obligations under the bond futures contracts, and store the reestablished delivery obligations in the database;
determine a clip ratio based on a relative DV01 of the bond futures contracts and the bonds: calculate an execution schedule including a plurality of integer clip sizes for the bond futures contracts by scaling integer increments of the bonds by the determined clip ratio; generate a transaction data structure that links orders for the bond futures contracts and the bonds; processing the transaction data structure such that the orders are executed substantially simultaneously, including cancelling a remainder of the order for the bond futures contract if a filled quantity does not match an integer clip size in the execution schedule; and
receiving a request that an unexecuted order be routed from the electronic trading system to an external trading system based on the external trading system having a lower routing time for the unexecuted order than the electronic trading system, wherein the request is executable after determining that the unexecuted order has been extant on the electronic trading system for at least a predetermined time delay, the unexecuted order includes a price thereof that is disposed within a predetermined price threshold of a highest order price, and
the unexecuted order includes a predefined percentage thereof that is set to be routed to the external trading system when the predetermined time delay is detected and the price is disposed within the predetermined price threshold”.
Those claim limitations in bold are identified as claim limitations which recite the abstract idea, while those that are un-bolded are identified as additional elements.
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 generic computer components. 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. Trading financial instruments 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. Accordingly, the claim recites an abstract idea.
Step 2A Prong 2, Next, it is determined whether the claim is directed to the abstract concept itself or whether it is instead directed to some technological implementation or application of, or improvement to, this concept, i.e., integrated into a practical application. See, e.g., Alice, 573 U.S. at 223, discussing Diamond v. Diehr, 450 U.S. 175 (1981). The mere introduction of a computer or generic computer technology into the claims need not alter the analysis. See Alice, 573 U.S. at 223—24. “[T]he relevant question is whether the claims here do more than simply instruct the practitioner to implement the abstract idea on a generic computer.” Alice, 573 U.S. at 225.
In the present case, the judicial exception is not integrated into a practical application. The claim limitations are not indicative of integration into a practical application by claiming an improvement to the functioning of the computer or to any other technology or technical field. Further, the claim limitations are not indicative of integration into a practical application by applying or using the judicial exception in some other meaningful way.
In particular, the claims contain the following additional elements: a computer apparatus; an electronic trading system; a database. However, the specification description of the additional elements a computer apparatus ([0003-0005] [0068]); an electronic trading system ([0083-0084]); a database ([0068]); transaction data structure (the examiner can find no support for this in the present applications. The claim limitations is interpreted as stored data on a general purpose computer); are at a high level of generality using exemplary language or as part of a generic technological environment and are functions any general purpose computer performs such that it amount no more than mere instruction to apply the exception to a particular technological environment. 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. Accordingly, these additional elements do not integrate the abstract idea into a practical application because it does not impose any meaning limits on practicing the abstract idea. Thus, the claim is directed toward an abstract idea.
Step 2B, the claim(s) does/do not include additional elements that are sufficient to amount to significantly more than the judicial exception because the additional elements when considered both individually and as an ordered combination do not amount to significantly more that the abstract idea(s). As discussed above with respect to integration of the abstract idea into a practical application, the additional element of using a processor to perform the abstract idea(s) amounts to no more than mere instructions to apply the exaction using a generic computer component. Mere instruction to apply an exertion using a generic computer component cannot provide an inventive concept. These generic computer components are claimed at a high level of generality to perform their basic functions which amount to no more than generally linking the use of the judicial exception to the particular technological environment of field of use (Specification as cited above for additional elements) and further see insignificant extra-solution activity MPEP § 2106.05 I. A. iii, 2106.05(b), 2106.05(b) III, 2106.05(g). Thus, the claims are not patent eligible.
As for dependent claims 2-10 and 12-20 these claims recite limitations that further define the same abstract idea using previously identified additional elements noted from the respective independent claims from which they depend. Therefore, the cited dependent claims are considered patent ineligible for the reasons given above.
Prior Art
The claims overcome the prior art of record such that none of the cited prior art reference’s disclosures can be applied to form the basis of a 35 USC § 102 rejection nor can they be combined to fairly suggest in combination, the basis of a 35 USC § 103 rejection when the limitations directed toward bond trading are read in the particular environment of the claims. Therefore, the claims may be allowable if amended to overcome the rejection(s) under 35 U.S.C. 101, set forth in this Office action.
Response to Arguments
Applicant's arguments with regards to claims have been fully considered but they are not persuasive.
EXAMINER’S RESPONSE TO APPLICANT REMARKS CONCERNING Claim Rejections - 35 USC § 101: Applicant's arguments with regards to 35 USC § 101 have been fully considered but are not persuasive. Similar claims have previously been addressed in prior-filed applications 18/105278, 14/087911, and 12/014027 for which the present application claims benefit. Application 14/087911 was appealed with similar claim language and found to be patent in eligible (see Patent Board Decision - Examiner Affirmed Receipt Date 12/05/2022). The amend claim language is interpreted in view of the specification. The amended claim limitations are claimed and described in the Specification at a high level of generality as merely preference factors for smart order routing and, thus, is part of the abstract idea of the claims and not a technical solution to problem.
The amended claims limitation “determining a clip ratio based on a relative DV01 of the bond futures contracts and the bonds: calculating an execution schedule including a plurality of integer clip sizes for the bond futures contracts by scaling integer increments of the bonds by the determined clip ratio; generating a transaction data structure that links orders for the bond futures contracts and the bonds; processing the transaction data structure such that the orders are executed substantially simultaneously, including cancelling a remainder of the order for the bond futures contract if a filled quantity does not match an integer clip size in the execution schedule;” further adds to the abstract idea and does not claim a technical solution to a problem. Paragraph [0087] states ”… "Clip orders" are designed to increase functionality for simultaneously executing trades between two markets. "Clips" are a series of quantity levels that allow the counterparty or automated system to define specific amounts, or "clips", of an overall order to be traded. The counterparty or automated system specifies a clip order ratio, and the ratio defines the clip sizes that order may be traded in…”. The it’s the clip orders (an abstract idea) and not any purported data structure (which is not found within the specification) provides the simultaneously executing trades between two markets. Even if a data structure were to be present in the specification, its function would be merely to store the data to perform the clip orders. As such, the examiner maintains the rejection.
Conclusion
For prior art made of record and not relied upon is considered pertinent to applicant's disclosure see Notice of References Cited items A-D submitted 09/24/2024 used as prior art and in the conclusion section in the office action submitted 09/24/2024.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to Gregory A Pollock whose telephone number is (571) 270-1465. The examiner can normally be reached M-F 8 AM - 4 PM.
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/Gregory A Pollock/Primary Examiner, Art Unit 3691 03/06/2026