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 .
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.
2. 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 storing, the corresponding portfolio data for each of the plurality of portfolios in memory using a rolling storage scheme that filters the corresponding portfolio data for each of the plurality of portfolios to a group of most recent transactions via one or more storage operations,…; performing, a non-overlaid calculation by: determining for each of the one or more asset classes, a probability distribution based on a reduced initial margin corresponding to that asset class, the reduced initial margin, reduced by a contribution from a joint asset margin,…; determining, a single portfolio performance vector for each of the plurality of portfolios based on a portfolio specific model and results of a first plurality of simulations performed on the plurality of portfolios;
performing an overlaid calculation by: offloading, from the processor, Monte-Carlo simulation-based computation of one or more joint models by sending, to an external device, an external request based on an identifier for one or more joint models…; determining, based on one or more joint models received in response to the external request, a joint portfolio performance vector for the plurality of portfolios; determining, for each portfolio of the plurality of portfolios, a portfolio specific scalar based on the single portfolio performance vector and the joint portfolio performance vector; and generating a plurality of messages that separate the overlaid calculation from the non-overlaid calculation for an initial margin for the plurality of portfolios based on the portfolio specific model and the portfolio specific scalar, wherein a count of the plurality of messages for the electronic trading system is reduced for margin requirements due to the portfolio specific model and the portfolio specific scalar, as drafted, is a process that, under its broadest reasonable interpretation, covers certain methods of organizing human activity, in particular, fundamental economic 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 cross asset correlation and margining of portfolios which is a fundamental economic practice. The mere nominal recitation of by a generic processor, an external device, and electronic trading system, 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— by a processor, an external device, and electronic trading system. The processor, an external device, and electronic trading system are recited at a high-level of generality (i.e., as a generic processor performing the generic computer functions of: storing portfolio data; performing a non-overlaid calculation by determining for each of the one or more asset classes, a probability distribution; determining a single portfolio performance vector; performing an overlaid calculation by: offloading Monte-Carlo simulation based computation of one or more joint models, determining, based on one or more joint models, a joint portfolio performance vector, determining a joint portfolio performance vector, determining a portfolio specific scalar, generating a plurality of messages that separate the overlaid calculation from the non-overlaid calculation for an initial margin for the plurality of portfolios based on portfolio specific model and portfolio specific scalar) such that they amount to no more than mere instructions to apply the exception using generic computer components (see MPEP §2106.05(f)). 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 11 and 20 and hence claims 11 and 20 are rejected on similar grounds as claim 1. In addition, claim 11 recites non-transitory machine-readable media configured to store instructions thereon, and claim 20 recites an electronic trading system and an external device that amount to generic computer implementation.
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 a processor, an external device, and an electronic trading system 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 2-10, 12-19 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
3. Applicants’ arguments filed 7/21/26 have been fully considered but they are not persuasive.
On page 9 of the Remarks, regarding the rejection of the claims under 35 USC 101, Applicants argue that the claims are not directed to an abstract idea because they are directed to a specific, novel, and patentable system using a message generation protocol which provides for communication of margin requirement using a reduced quantity of messages. Applicants further argue that the claimed features recite a specific data structure that improves the operation of the processor by separating the calculation into non-overlaid and overlaid components resulting in reduction in the recalculation of overlaid components within a plurality of portfolios. Applicants argue that the claimed features also provide for reducing the localized permanent storage used by the hardware performing the computations use rolling memory, i.e., storing data only for a set of only the most recent transactions.
As an initial matter, in regard to the novelty argument, novelty is a question of whether the claimed invention is new. Inventiveness in the Alice/Mayo framework is the search for “an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” Alice, 134 S. Ct. at 2355. The inventiveness inquiry of §101 should therefore not be confused with the separate novelty inquiry of §102 or obviousness inquiry of § 103. A novel and nonobvious claim directed to a purely abstract idea is, nonetheless, patent-ineligible. See Mayo, 132 S. Ct. at 1304.
Nevertheless, the claims are directed to cross asset correlation and margining of portfolios. The claims recite the additional element of “a processor.”
The focus of the claims is not on an improvement to the identified additional elements as tools, but on the abstract ideas that use the additional elements as tools. The use of generic computer components to carry out the abstract idea does not impose any meaningful limit on the computer implementation of the abstract idea.
Applicants argue that the claims recite a specific data structure that improves the operation of the processor by separating the calculation into non-overlaid and overlaid components and therefore recalculation is reduced. The argument is not persuasive. The terms “overlaid” and “non-overlaid” refer to calculation of initial margin requirements -see Spec. [00198]. Here, the “processor” and “an external device” as claimed are used in its ordinary capacity to perform the claimed functions. The argued increase in speed and capability comes from the capabilities of a general-purpose computer that includes a microprocessor, rather than the claimed method itself. See Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012)(“[T]he fact that the required calculations could be performed more efficiently via a computer does not materially alter the patent eligibility of the claimed subject matter.”).
Regarding the “rolling storage scheme,” Applicants’ specification describes that data may be stored relating to received transactions for a period of time, indefinitely, or for a rolling most recent time period…” See Spec. paragraph [00158] “In an embodiment, data relating to the received transaction is stored. The data may be stored in any device, or using any technique, operable to store and provide recovery of data. For example, a memory 204 or computer readable medium 210, may be used to store data, as is described with respect to FIG. 2 in further detail herein. Data may be stored relating to received transactions for a period of time, indefinitely, or for a rolling most recent time period such that the stored data is indicative of the market participant's recent activity in the electronic market.”
The rolling data storage is described in this one paragraph of the Specification and is not central to the claimed invention.
On page 11 of the Remarks, Applicants contend that the claims are not directed to an abstract idea and under PTO guidance do not fall into one of the groupings of abstract ideas. The Examiner respectfully disagrees.
The Patent Office has issued guidance about this framework. -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., by a processor, external device, claims 1, 11 and 20 recites 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 storing portfolio data; performing a non-overlaid calculation by determining for each of the one or more asset classes, a probability distribution; determining a single portfolio performance vector; performing an overlaid calculation by: offloading a Monte-Carlo simulation-based computation of one or more joint models; determining, a joint portfolio performance vector, determining a portfolio specific scalar, generating a plurality of messages that separate the overlaid calculation from the non-overlaid calculation for an initial margin for the plurality of portfolios based on portfolio specific model and portfolio specific scalar—and explains that they describe the concept of cross asset correlation and margining of portfolios which is a fundamental economic practice (including mitigating risk)-see Spec. [0012]-[0018], falling into the category of “certain methods of organizing human activity.” The Examiner’s approach here is consistent with USPTO guidance.
On page 11, Applicants argue that para. [0019] of the Specification recites an improvement in technology and that one having ordinary skill in the art would understand this improvement. The argument is not persuasive because the claimed steps/functions are implemented using a generic processor. The processor is used to perform the steps mentioned above such as storing data, performing calculations, and generating messages.
The claims recite only common computer elements, e.g., “processor,” “an external device” recognized as generic computer technology by the Supreme Court in Alice Corp., 134 S. Ct. at 2357; Ultramercial, 772 F.3d at 713, 722-23.
Applicants argue that as expressed and implied by USPTO, examiners are reminded to consult the Specification to determine improvement in technology or technical field. The Examiner has indeed consulted the Specification is determination of patent eligibility under 35 USC 101. As discussed above, for example, in regard to the “rolling storage scheme” the Specification merely refers to “Data may be stored relating to received transactions for a period of time, indefinitely, or for a rolling most recent time period” which is not an improvement in technology but rather uses existing technology to implement the claimed invention.
Furthermore, the Specification at [0012] describes the claimed invention as, “The disclosure describes message elimination in multi-model risk correlation systems. The risk correlation systems facilitate calculation, determination, generation, management, analysis and/or communications relating to margin requirements for one or more clearinghouses or electronic trading systems. The electronic trading system may generate messages including margin requirements for distribution to customer or user devices (e.g., client computers). In response to the messages, the client computers may move positions among asset classifications or portfolios.”
The focus of the claims is not on an improvement to the identified additional elements as tools, but on the abstract ideas that use the additional elements as tools. The use of generic computer components to carry out the abstract idea does not impose any meaningful limit on the computer implementation of the abstract idea.
On page 12, Applicants argue that Ex Parte Desjardins is similar to the claimed invention and therefore, the Examiner should not perform a “high-level” analysis of the claimed features. This argument is not persuasive. The claims in Desjardins were directed to a method and system of training a machine learning model to perform various tasks. Here the claimed invention does not use a machine learning model. The claims in the instant application recite a processor performing the claimed steps and functions in the typical way that processors operate.
On page 13 of the Remarks, Applicants note that “to optimize or reduce processor cycles through reduction of recalculation of overlaid components” is not “merely automation.” Applicants further argue that the claimed invention is directed to a practical application and improves efficiency because reducing processor cycles cannot be efficiency inherent with applying the abstract idea on a computer because the reduction is a comparison against an already automated backdrop and while efficiency overall may be gained by mere automation, the claimed invention reduces processor cycles. The Examiner disagrees.
The terms “overlaid” and “non-overlaid” refer to calculation of initial margin requirements -see Spec. [00198]:
At act 908, a portfolio specific scalar is determined based on the single portfolio
performance vector and the joint portfolio performance vector. A minimum value for each of the single portfolio performance vectors is identified. The sum of the minimum values is the initial margin requirement for a non-overlaid calculation, which may be referred to as the non-overlaid initial margin requirement. A minimum value for the joint portfolio performance vector is identified, which may be referred to as the overlaid initial margin requirement. The scalar may be an offset value that is calculated from the difference in the non-overlaid initial margin requirement and the overlaid initial margin requirement. The scalar may be an offset value that is calculated from the ratio overlaid initial margin requirement to the non-overlaid initial margin requirement. For one example, Equation 7 calculates an offset (0) for a joint distribution for the first margin and the second margin is calculated according to:
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Here, the “processor” and “an external device” as claimed are used in its ordinary capacity to perform the claimed calculations and functions. The argued increase in speed and capability comes from the capabilities of a general-purpose computer that includes a microprocessor, rather than the claimed method itself. See Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012)(“[T]he fact that the required calculations could be performed more efficiently via a computer does not materially alter the patent eligibility of the claimed subject matter.”).
Applicants further allege that the claimed invention recites specific steps/operations which accomplish a desired result as in Finjan v. Blue Coat Sys. The argument is not convincing. Finjan v. Blue Coat Sys. address a problem concerning virus scans that generates a security profile identifying both hostile and potentially hostile operations in the realm of computer technology. Unlike the claims in the instant application, the claims in Finjan are not financial in nature. The claims in the instant application are not directed to virus scans and are not akin to those found in Finjan. The claimed invention is directed to solving a problem that is financial in nature and recite an abstract idea.
Regarding the suggestion that the claims at issue are analogous to those found in the DDR Holdings, LLC v. Hotels.com, L.P. (Fed. Cir. 2014), the patent claims in the instant application do not address problems unique to the Internet, so DDR has no applicability. In DDR, the claims address a business challenge (retaining website visitors), it is a challenge particular to the Internet. In particular, the court said that “these claims stand apart because they do not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet. Instead, the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.” The court concluded that “instead of the computer network operating in its normal, expected manner by sending the website visitor to the third-party website that appears to be connected with the clicked advertisement, the claimed system generates and directs the visitor to t[a] hybrid web page that presents product information from the third-party and visual ‘look and feel’ elements from the host website. When the limitations of the … patent’s asserted claims are taken together as an ordered combination, the claims recite an invention that is not merely the routine or conventional ‘use of the Internet.’” The DDR claims “do not broadly and generically claim ‘use of the Internet’ to achieve the desired result, but instead “specify how interactions with the Internet are manipulated to yield a desired result.” Id. at 1258. Claims that specify how to overcome a technological challenge are eligible. The claims here do not solve a technological problem with a technological solution. The claims here, solve a business problem using generic computer components.
The applicants argue that the claimed invention is similar to the claims found in Bascom. The Examiner respectfully disagrees. In Bascom, the court found that the claims were directed to an abstract idea under step one. Id. at 1347-49. Under step two, the court found that the limitation of the claims, taken individually, recited a generic computer, network, and Internet components which were not inventive themselves. Id. at 1349-52. However, the court found that the ordered combination of these limitations provided the requisite inventive concept. Id. The claimed and described inventive concept was the “installation of a filtering tool at a specific location, remote from the end-users, with customizable filtering features specific to each end user.” Id. at 1350. The 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.” Id. This was not customary or generic, and the claims did not preempt all ways of filtering content on the Internet—instead, the patent claimed and explained how a particular arrangement of elements was a “technical improvement over prior art ways of filtering such content.” Id. The court thus distinguished ineligible “abstract-idea-based solutions[s] implemented with generic technical components in a conventional way” from the eligible “technology-based solution” and software based invention[] that improve[s] the performance of the computer system itself.”” Id. at 1351 (citation omitted). The claims in the instant application do not require an arguably inventive distribution of functionality within a network. The claims in this application specify storing data, performing calculations, and generating messages but they do not include any requirement for performing the claimed functions of gathering, analyzing and transmitting data by use of anything but entirely ordinary, generic technology.
Applicants argue that the claims now recite Monte-Carlo simulation based processing for the overlaid portion and that the specific novel division of computational load between two different processors cannot be an ordinary application of either processor and is not using a computer in its ordinary capacity. The Monte-Carlo simulation technique is described in the specification as being one of multiple types of simulations used by the claimed invention.-see Spec. [00168]. Monte-Carlo simulation technique is a notoriously well-known computational technique. The division of processing of data between two different processors is not enough to amount to significantly more than the abstract idea because the processors are functioning in their ordinary capacity.
The Luminati Networks, Ltd. V. Teso LI, UAB, Civil Action NO. 2:19-CV-00395-JRG, at 1 (E. D. Tex. Feb. 12, 2021) (Gilstrap, J.), recited by the applicants is noted. As an initial matter, the Civil actions are non-precedential and do not carry the weight of a precedential decision. Furthermore, Civil actions do not represent office policy, and are fact specific to the case being decided.
Here, the inquiry under 35 USC §101 focuses on the present application, and it has been determined by the Examiner that the claims do not overcome the rejection under 35 USC §101 for the reasons set forth in the 35 USC 101 rejection above and responses above.
Applicants argue that the claims at issue are similar to Contour IP Holding LLC v. GoPro, Inc. 113 F.4th 1373,1379 (Fed Cir 2024). The claims in Contour addressed technical challenges in portable devices, such as bandwidth and power limitations, by enabling immediate preview or sharing without waiting for full high-resolution footage to be recorded. Unlike the claims in the instant application, the claims in Contour are not financial in nature. This is supported by the Applicant’s specification ¶[0012]. The claimed invention is directed to solving a problem that is financial in nature and recite an abstract idea.
On page 15, Applicants disagree with the Examiner’s interpretation of the claimed “rolling storage scheme.” It is noted that the Specification describes, “Data may be stored relating to received transactions for a period of time, indefinitely, or for a rolling most recent time period such that the stored data is indicative of the market participant's recent activity in the electronic market.”
This is a function performed by computer systems based on programmed parameters. This is not an improvement in the functioning of the computer or an improvement in any other technology or technical field. The only recitation of a storing data for a rolling most recent time period is found in paragraph [0158]. A more detailed description of how this feature is an improvement in technology is not recited in the Specification. The Examiner fails to see, and the Applicant fails to point out, how the steps are unconventional steps that confine the claims to a particular useful application.
On page 16 under Step 2A, Applicants argue claims not directed to abstract idea and do not preempt the use of the abstract idea. The argument is not persuasive. That the claims do not preempt all forms of abstraction or may be limited to financial services, in particular, facilitating the calculation, determination, generation, management, analysis, and/or communications relating to margin requirements for one or more clearinghouses or electronic trading systems (Spec. [0012]), does not make them any less abstract. See OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362-63 (Fed. Cir. 2015) (“And that the claims do not preempt all price optimization or may be limited to price optimization in the e-commerce setting do not make them any less abstract.”).
The remaining arguments on pages 16 to 17 have already been addressed above. Furthermore, regarding Step 2B, as indicated in the 35 USC 101 rejection above, mere instructions to apply an exception using generic computer components cannot provide an inventive concept.
Applicant argues that the office action does not provide sufficient evidence as required in the Berkheimer Memo. The Examiner respectfully disagrees with this argument.
The Federal Circuit in Berkheimer made clear that “not every § 101 determination contains genuine disputes over the underlying facts material to the § 101 inquiry.” Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018). In fact, the Federal Circuit in Berkheimer did not require evidentiary support for independent claim 1 because “[t]he limitations [of claim 1] amount to no more than performing the abstract idea of parsing and comparing data with conventional computer components.” Id. at 1370.
The claims are not patent eligible under 35 USC 101.
Conclusion
4. The prior art made of record and not relied upon is considered pertinent to applicant's disclosure.
Qiang, Ji. “Monte Carlo Simulation Techniques” US Dept. of Energy Office of Science. https://cas.web.cern.ch/sites/default/files/lectures/thessaloniki-2018/cas-montecarlov6.pdf; 2018.-cited for Monte-Carlo method for use of random sampling and probability statistics to obtain numerical results.
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 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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