Notice of Pre-AIA or AIA Status
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
DETAILED ACTION
This action is in response to the amendment filed 4/14/2026. Applicant has amended claims 1, 8 and 15 and cancelled claims 4, 11 and 18. Accordingly, claims 1-3, 5-10, 12-17 and 19-20 are pending for examination.
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 1-3, 5-10, 12-17 and 19-20 are rejected under 35 U.S.C. 101 because 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.
Claims 1, 8 and 15 recite the abstract idea of “calculating spot sensitivity data of derivative element based on volatility surface deformation data and conduct transaction with respect to the derivative instrument” and plotting strike price and implied volatility using mathematical equation”, which is grouped under “Certain Methods of Organizing Human Activity” such as “fundamental economic principles or practices” (hedging, mitigating risk; managing transactions) and “”mathematical concepts (mathematical formulas or equations; mathematical calculations). (MPEP 2016.04(a)). Specifically, claims 1, 8 and 15 recite “… stores a plurality of historical data and … data corresponding to a derivative instrument”, “…. model with the historical data and the … data corresponding to the derivative instrument for time-series data prediction”, “learning, in response to …., volatility surface deformation data over time corresponding to the derivative instrument”, “calculating spot sensitivity data of the derivative instrument based on the volatility surface deformation data ……model”, “displaying the spot sensitivity data onto ….” and “receiving… to conduct a transaction with respect to the derivative instrument”, “implementing a feedback loop to allow strike-wise dynamic corresponding to the derivative instrument”, “inputting variable length sequences as the input data, wherein at an input layer, a fixed tenor volatility smile, which is a graph resulting from plotting a strike price and implied volatility of a group of options with same underlying asset and expiration date, includes: x = (equation) and xi = (equation) where xi is a vector of features and fij is one of the features”, “sorted by strike form lowest to highest” ,” xi is the features of ith strike (equation)”. Claims 2-3, 5-7, 9-10, 12-14, 16-17 and 19-20 are dependent on claims 1, 8 and 15 and include all the limitations of claims 1, 8 and 15. Therefore, claims 2-3, 5-7, 9-10, 12-14, 16-17 and 19-20 recite the same abstract idea of “calculating spot sensitivity data of derivative element based on volatility surface deformation data and conduct transaction with respect to the derivative instrument” and plotting strike price and implied volatility using mathematical equation”. The limitations recited in the depending claims (For example, the capturing and storing steps and the specific types of service, data and model used) are further details of the abstract idea and not significantly more. As such, the description in claims 1-3, 5-10, 12-17 and 19-20 of calculating spot sensitivity data of derivative element based on volatility surface deformation data and conduct transaction with respect to the derivative instrument” and plotting strike price and implied volatility using mathematical equation is an abstract idea.
This judicial exception is not integrated into a practical application because, when analyzed under prong two of step 2A (MPEP 2106.04II), the additional elements of claims 1, 8 and 15 such as “accessing a database”, “receiving user input”, “output”, displaying and receiving via “user interface”, “processor (claims 8 and 15), “memory operatively connected to the processor via communication interface (claim 8), “non-transitory computer readable medium configured to store instructions” (claim 15) represent the use of a computer as a tool to perform an abstract idea and/or does no more than generally link the abstract idea to a particular technological environment or field of use. With respect to the claimed “implementing an artificial intelligence deep learning (model)” and “training the artificial intelligence deep learning (model)”, the claims are directed to the abstract idea of using generic machine learning technique in a particular environment and lack detail regarding how the “implementing” and “training” are performed (MPEP 2106.05(f)(1)). Patents that do no more than claim the application of generic machine learning to new data environments, without disclosing improvements to the machine learning models to be applied, are patent ineligible under 35 U.S.C. 101. The additional elements of claims 2-3, 5-7, 9-10, 12-14, 16-17 and 19-20, such as “implementing an algorithm” and “applying bidirectional gate recurrent unit neural network algorithm” also lack detail regarding how the “implementing” and “applying” are performed (MPEP 2106.05(f)(1)). Therefore, the limitations do not integrate the abstract idea into a practical application as they are no more than “apply it” (MPEP 2106.05(f)(1)).
When analyzed under step 2B (MPEP 2106.04II), because the additional elements do no more than represent the use of a computer as a tool to perform an abstract idea and/or does no more than generally link the abstract idea to a particular field of use, they do not provide an improvement to computer functionality, or an improvement to another technology or technical field and, therefore, do not amount to significantly more than the judicial exception itself (MPEP 2106.05(I)(A)(f)&(h)).
Hence, claims 1-3, 5-10, 12-17 and 19-20 are not patent eligible.
Claims 1-3, 5-10, 12-17 and 19-20 have been searched and reviewed. No prior art has been found that discloses, either expressly or inherently, all of the limitations of the claimed invention. More specifically, the newly added limitations recited in the independent claims 1, 8 and 15, considered as a whole, are not taught by the prior arts found in examiner’s search and STIC search. Therefore, no rejection under 102/103 is made.
Related But Not Relied Upon
Relevant art cited but not applied: Browne et al. (US 7,440,916 B2), directed to simulating implied volatility surfaces for option pricing.
Response to Arguments
Applicant's arguments filed 4/14/2026 have been fully considered but they are not persuasive.
In response to applicant’s request for confirmation regarding the drawings, it is noted that no objection is made to the drawings as filed and therefore no further action is required at this time.
Applicant argues that the claims are statutory under 35 U.S.C. 101 because 1) the claims are directed to specific machine learning-based techniques which is not abstract idea and 2) The combination of inputting sequences, structuring inputs, followed by feedback loop improves the functioning of the model itself and recite inventive concept. The Examiner disagrees. The claims recite the abstract idea of “calculating spot sensitivity data of derivative element based on volatility surface deformation data and conduct transaction with respect to the derivative instrument” and plotting strike price and implied volatility using mathematical equation”, which is grouped under “Certain Methods of Organizing Human Activity” such as “fundamental economic principles or practices” (hedging, mitigating risk; managing transactions) and “”mathematical concepts (mathematical formulas or equations; mathematical calculations). (MPEP 2016.04(a)). The claims merely describe receiving input data, applying generic processing and using a feedback loop, without defining how the feedback is computed, how model parameters are updated or any specific architecture or algorithmic modification. The recitation of “machine learning” or “feedback loop” at a high level of generality does not, by itself, transmit the abstract idea into a patent-eligible practical application. Therefore, applicant’s arguments are not persuasive.
Conclusion
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.
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/CHIA-YI LIU/Primary Examiner, Art Unit 3692
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