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 .
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and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114.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 05/21/2026 has been entered.
Status of the Claims
Claims 1, 7, 11, and 17 have been amended. Claim 4 has been canceled. Claims 1-3 and 5-20 are pending.
Response to Arguments
Applicant's arguments filed 05/21/2026 regarding 35 U.S.C. 101 have been fully considered but they are not persuasive.
The Amended Claims Still Recite A Judicial Exception Under Step 2A Prong One
The Federal Circuit has explained that "the 'directed to' inquiry applies a stage-one filter to claims, considered in light of the specification, based on whether 'their character as a whole is directed to excluded subject matter."' Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). It asks whether the focus of the claims is on a specific improvement in relevant technology or on a process that itself qualifies as an "abstract idea" for which computers are invoked merely as a tool. See id. at 1335-36. Here, it is clear from the Specification (including the claim language) that claims focus on an abstract idea, and not on an improvement to technology and/or a technical field. The specification recites in the Background that [0002] “The financial industry operates within a strict regulatory framework to protect investors and maintain stability. However, regulatory compliance processes using conventional tools can be cumbersome, error prone, and lack desired transparency. As authorities generate new financial regulations and/or update existing financial regulations, the conventional tools must be manually updated. Further, it is a challenge to provide proof of regulatory compliance to authorities in a manner that maintains account holders’ privacy.” [0003] “Distributed ledgers provide several advantages to centralized data storage, such as transparency, immutability, and redundancy, that make them attractive to the financial industry. But a distributed ledger’s transparency may cause privacy issues, as financial transactions must be broadcast to the distributed ledger network for computation and validation.” Applicant discloses in [0007] “The disclosed systems and methods improve computer security and data privacy by providing cryptographic regulatory compliance information to organizations without revealing private account or transaction data. That is, privacy and security may be improved by using the disclosed systems and methods to cryptographically store and transmit regulatory compliance information instead of traditionally providing private data to regulatory organizations. Moreover, the use of fully homomorphic encryption to securely store and process encrypted data in the distributed ledger further improves computer security.” The invention and claims are drawn towards automating the determination of regulatory compliance, and claim 1 recites limitations that directly correspond to certain methods of organizing human activity (commercial or legal interactions, business relations, managing personal interactions or relationships, following rules or instructions), as evidenced by limitations detailing receiving and determining compliance information for a financial account, generating a smart contract from regulatory ruleset(s), transmitting the smart contract to other participants, receiving a request from an organization outside of the distributed ledger network and modifying the smart contract based on regulatory compliance information, and providing the regulatory compliance information without revealing the financial data and a public cryptographic key associated with a financial account. The claims limitations identified above further correspond to fundamental economic practices or principles such as mitigating risks in association with regulatory compliance in financial accounts. The claim also recites limitations the directly correspond to mental processes (observation, evaluation, judgment, opinion), as evidenced by limitations detailing the evaluation and observation of financial data to determine compliance (judgment/opinion), and generating contracts based on regulatory rulesets that determine compliance, etc. The claims recite an abstract idea. Examiner notes that the assertion in the applicant’s specification that “the use of fully homomorphic encryption to securely store and process encrypted data in the distributed ledger further improves computer security” is merely conclusory, and at best, the data being protected is what is secured, which is not an improvement in computers or technology.
Applicant argues that the amended limitation that the financial data is processed while it remains encrypted using fully homomorphic encryption cannot be performed in the human mind. Applicant’s argument is unpersuasive. Applicant relies on the assertion that a human cannot physically perform the claim operations as implemented on a computer. The proper analysis under step 2A Prong One is whether an abstract idea is set forth or described in the claim. Steps that correspond to observation, evaluation, judgment, or opinion (e.g., the evaluation and observation of financial data to determine compliance, and generating contracts based on regulatory rulesets that determine compliance, etc.) fall within the mental processes category. The fact that a computer is used to perform the steps (e.g., the “computer-implemented method” that performs the simulation steps) does not change the underlying nature of the claims. Accordingly, the computer implementation and terminology used does not remove the claim from the mental processes category. Claims can recite a mental process even if they are claimed as being performed on a computer. If the claimed invention is described as a concept that is performed in the human mind and applicant is merely claiming that concept performed 1) on a generic computer, or 2) in a computer environment, or 3) is merely using a computer as a tool to perform the concept, the claim is considered to recite a mental process (MPEP §2106.04(a)(2)(III)). Additionally, a human mind may very well perform the observation and evaluation of data, and implementing a decision (judgment or opinion) based on the observed and evaluated data. It is not required that the human mind be able to perform the claimed steps in the same manner, at the same scale, or with the same speed as a computer. Further, the financial data remaining encrypted using fully homomorphic encryption (“FHE”) is evaluated in this Office Action as an additional element under Step 2A Prong Two, and amounts to insignificant extra-solution activity as the use of FHE is incidental to the primary process and are merely a nominal or tangential addition to the claim. Examiner also notes that the claim limitations is directed to the processing of the financial data, not the technology of FHE. According to the claim limitation, the financial data is already encrypted using FHE. The claim nor specification provides an improvement in FHE technology or anything of the sort, but merely using an already well-known form of encryption in the finance industry and smart contracts.
Applicant argues that their claims are similar to the of Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138 (Fed. Cir. 2016). Examiner disagrees. Applicant’s interpretation of the findings in this case is erroneous. The claims were for a specific data encryption method for computer communication and the Court denied subject matter eligibility for the method that translates a functional description of a logic circuit into a hardware component. The Court found that the claims effectively constituted mental steps and as such, the claims were directed to an abstract idea. Additionally, applicant’s claims do not recite a specific encryption method for computer communication involving a several-step manipulation of data. The claim nor specification provides an improvement in FHE technology or anything of the sort, but merely using an already well-known form of encryption in the finance industry and smart contracts.
Applicant argues that their claims are similar to that of Claim 2 of Example 37 of the 2019 Revised Patent Eligibility Guidance. Examiner disagrees. In example 37, the applicant’s invention address the issue of automatically arranging icons in a non-typical arrangement manually on a graphical user interface by moving the most used icons to a position on the GUI, specifically, closest to the “start” icon of the computer system, based on a determined amount of use. The amount of use of each icon is automatically determined by a processor that tracks the number of times each icon is selected or how much memory has been allocated to the individual processes associated with each icon over a period of time. The claim with the additional elements of receiving, via a GUI, a user selection to organize each icon based on the amount of use of each icon, a processor for performing the determining step, and automatically moving the most used icons to a position on the GUI closest to the start icon of the computer system based on the determined amount of use as a whole integrates the mental process into a practical application via the additional elements reciting a specific manner of automatically displaying icons to the user based on usage which provides a specific improvement over prior systems, resulting in an improved user interface for electronic devices. Applicant’s invention is in no way similar to that of example 37. Claim 1 does not describe or indicate an improved user interface. The claims specifying that the financial data remains encrypted using FHE does not provide an improvement to computer components as found in example 37.
Applicant further argues that their clams are not directed to certain methods of organizing human activity. Although this argument has been addresses above, examiner also reemphasizes here that the invention and claims are drawn towards automating the determination of regulatory compliance, and claim 1 recites limitations that directly correspond to certain methods of organizing human activity (commercial or legal interactions, business relations, managing personal interactions or relationships, following rules or instructions), as evidenced by limitations detailing receiving and determining compliance information for a financial account, generating a smart contract from regulatory ruleset(s), transmitting the smart contract to other participants, receiving a request from an organization outside of the distributed ledger network and modifying the smart contract based on regulatory compliance information, and providing the regulatory compliance information without revealing the financial data and a public cryptographic key associated with a financial account. For instance, the “participants” and “network of participants” in which the smart contracts are transmitted, and who/whom validates the compliance information includes individuals as well as entities such as financial institutions. The sub-groupings encompass both activity of a single person (for example, a person following a set of instructions or a person signing a contract online) and activity that involves multiple people (such as a commercial interaction), and thus, certain activity between a person and a computer (for example a method of anonymous loan shopping that a person conducts using a mobile phone) may fall within the "certain methods of organizing human activity" grouping (MPEP §2106.04(a)(2)(II)). The claims limitations identified above further correspond to fundamental economic practices or principles such as mitigating risks in association with regulatory compliance in financial accounts.
The Claims Do Not Integrate the Judicial Exception Into A Practical Application Under Step 2A Prong Two.
Applicant’s assertion that the claims were not considered as a whole sis unfounded. A full and proper analysis according to the Alice/Mayo is provided on the record. The judicial exception is not integrated into a practical application simply because the claims recite the additional elements of: one or more processors, a smart contract, a distributed ledger, distributed ledger network, and a private and public cryptographic key. The additional elements are computer components recited at a high-level of generality performing the above-mentioned limitations. The combination of the additional elements are no more than mere instructions to apply the judicial exception using a generic computer. Further, the smart contract, the financial data remaining encrypted using fully homomorphic encryption, and cryptographic keys amount to generally linking the judicial exception to a particular field of use. Additionally, the financial data remaining encrypted using fully homomorphic encryption (“FHE”) amounts to insignificant extra-solution activity as the use of FHE is incidental to the primary process and are merely a nominal or tangential addition to the claim. Accordingly, in combination, 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. The claims are directed to an abstract idea.
Applicant argues that the claims solve a technical problem, namely “it is a challenge to provide proof of regulatory compliance to authorities in a manner that maintains account holders' privacy" and that "a distributed ledger's transparency may cause privacy issues, as financial transactions must be broadcast to the distributed ledger network for computation and validation," and that the amended claims solve this technical problem “using FHE to enable computations on encrypted financial data without decryption, generating cryptographic proof of compliance, and appending that proof to a distributed ledger upon consensus rules-based validation-all without revealing the underlying financial data.” Examiner disagrees. Using FHE and enable computations on already encrypted data, generating cryptographic proof of compliance, and appending that proof to a distributed ledger upon consensus rules-based validation-all without revealing the underlying financial data at best indicates an improvement in the judicial exception itself. The described problem is not a technical problem, but instead an improvement in a business process. Technical improvement focuses on enhancing the tools, software, or machinery, while business process improvement focuses on streamlining the steps, workflows, and methodologies people use to do their work. Applicant recites that the improvement lies in maintaining individuals data privacy by enabling computations on encrypted financial data without decryption, generating cryptographic proof of compliance and appending proof to a distributed ledger upon consensus rules-based validation-all without revealing the underlying financial data, which is not a technical improvement. There is no improvement in computers or technology, instead computers are merely being invoked as a tool to perform the limitations that are directed to a judicial exception. It is important to note, the judicial exception alone cannot provide the improvement. The improvement can be provided by one or more additional elements. In addition, the improvement can be provided by the additional element(s) in combination with the recited judicial exception. See MPEP §2106.05(a). It is important to keep in mind that an improvement in the judicial exception itself (e.g., a recited fundamental economic concept) is not an improvement in technology (emphasis added). For example, in Trading Technologies Int’l v. IBG LLC, the court determined that the claim simply provided a trader with more information to facilitate market trades, which improved the business process of market trading but did not improve computers or technology. Similarly, the Applicant’s claim recitations are an improvement in the judicial exception, not an improvement in technology.
Applicant argues that their claims are similar to example 41, and examiner disagrees. The invention in example 41 improves upon prior methods for establishing cryptographic communications because by using only the variables n and e (which are publicly known), a plaintext can be encrypted by anyone. The variables p and q are only known by the owner of the decryption key d and are used to generate the decryption key (private key d is not claimed below). Thus, the security of the cipher relies on the difficulty of factoring large integers by computers, and there is no known efficient algorithm to recover the plaintext given the ciphertext and the public information (n, e) (assuming that p and q are sufficiently large). Applicant merely states that their computer-implemented method processes the financial data while the data remains encrypted using FHE, an already established and known form of encryption. Applicant provides not details as to the encryption, how FHE is improved, nor how computers are improved by their invention. The financial data remaining encrypted using fully homomorphic encryption (“FHE”) amounts to insignificant extra-solution activity as the use of FHE is incidental to the primary process and are merely a nominal or tangential addition to the claim.
Applicant also attempts to compare their invention example 42. The argument is unpersuasive. In example 42, patient information is input in any format used by a user’s local device and whenever the patient information is updated, the information is first converted into a standardized format and stored. A message containing the updated information is transmitted in a standardized format over the computer network to all physicians and healthcare providers that have access to the patient’s information so that all users can be notified of changes without having to manually consolidate all of the updates. Under Step 2A Prong Two, the claim in example 42 is integrated into a practical application due to reciting the additional elements of converting updated information that was input by a user in a non-standardized form to a standardized format, automatically generating a message whenever updated information is stored, and transmitting the message to all of the users. The claim as a whole integrates the method of organizing human activity into a practical application. Specifically, the additional elements recite a specific improvement over prior art systems by allowing remote users to share information in real time in a standardized format regardless of the format in which the information was input by the user. Applicant’s claims are in no way similar to example 42. Enabling regulatory compliance verification through cryptographic proof is not an improvement in computers or technology, but instead an improvement in a business process or flow.
The Claims Do Not Include Additional Elements That Are Sufficient To Amount To Significantly More Than The Judicial Exception Under 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 amount to no more than mere instructions to apply the exception using a generic computer and generally linking the judicial exception to a particular field of use. Mere instructions to apply an exception using a generic computer cannot provide an inventive concept. Additionally, the financial data remaining encrypted using fully homomorphic encryption (“FHE”) amounts to well-understood, routine, and conventional activity in smart contract and finance related platforms. (See “Multi-party Secure Computing Financial Shared Platform Based on Lightweight Privacy Protection under FHE” (Hu, et. al, 2020) which discloses a cooperative computing scheme based on small-scale homomorphic encryption on multi-party security data platform, and innovates the operation mode of financial sharing. See also “On the Adoption of Homomorphic Encryption by Financial Institutions*” (Iezzi, et. al., 2023) disclosing sharing data between organizations becomes difficult for commercial, legal and regulatory reasons. Privacy-enhancing Technologies (PETs) are becoming a practical solution for secure and private information sharing. One such PET, Homomorphic Encryption (HE), allows the computation over encrypted data and thus protects the confidentiality of the information while increasing its utility. Results show that the financial sector has gained momentum in discussing privacy-enhancing technology over the last few years. See also “Sharing in Yantian Power Supply Bureau Based on Blockchain Smart Contracts” (Yang, et. al., 2023) which proposes a homomorphic encryption smart contract–based system for exchanging data. See also Sarpatwar (20210344478) ¶0004 disclosing a privacy preserving inference, and its goal is that it provides a secure way for users to maintain the privacy of the scoring point data returned by the model, while also enabling the cloud provider to protect the model's privacy, e.g., for proprietary, regulatory or other reasons. Example use cases includes…financial credit scoring firm training a credit-risk model and providing a scoring service, likewise with rigid privacy constraints due to legal or regulatory requirements. To this end, these types of solutions implement an advanced cryptographic technique known as fully homomorphic encryption (FHE), which provides a way to enable secure computation on client data without the need to decrypt it at the model, while concurrently preserving the secrecy of the model itself). Thus, when viewed as an ordered combination, nothing in the claims add significantly more (i.e. an inventive concept) to the abstract idea. The claims are not patent eligible.
Applicant argues that no factual support for concluding that FHE processing with smart contracts are well-understood, routine, and conventional (“WURC”) was provided so the rejection should be withdrawn. This argument is irrelevant. First, the applicant just amended the claims to recite the use of FHE. Now that applicant has done so, there are multiple references providing factual support that the use of FHE amounts to well-understood, routine, and conventional activity in smart contract and finance related platforms. Second, the absence of a WURC analysis does not indicate that the claims re eligible under Step 2B. Whether the claim recites additional elements that amount to WURC is only one consideration under Step 2B. Limitations that the courts have found not to be enough to qualify as "significantly more" when recited in a claim with a judicial exception also include: Adding the words "apply it" (or an equivalent) with the judicial exception, or mere instructions to implement an abstract idea on a computer; Generally linking the use of the judicial exception to a particular technological environment or field of use, both of which were found in the Office Action analysis. Third, and most importantly regarding the previous Office Action, at Step 2B, there is no requirement for evidence to support a finding that the exception is not integrated into a practical application or that the additional elements do not amount to significantly more than the exception unless the Examiner asserts that additional limitations are well-understood, routine, conventional activities in Step 2B. There was no assertion that the additional elements/limitations are well-understood, routine, conventional activities in Step 2B, thus no requirement of evidence of well-understood, routine, and conventional activity according to Berkheimer is necessary. Examiner suggests applicant reviewing MPEP §2106.07(a)(III) to become familiar with when factual support is required under Berkheimer.
The Dependent Claims Do Not Recite Additional Elements That Makes Them Patent Eligible.
Dependent claims 2 and 12 recite the limitation that the regulatory compliance information comprises a [non-fungible token (NFT)]. The limitation is further directed to the abstract idea analyzed above. The claims also recite the additional element of a non-fungible token (NFT). The additional elements amount to generally linking the judicial exception to a particular field of use. Accordingly, in combination, the additional element does not integrate the abstract idea into a practical application because it does not impose any meaningful limits on practicing the abstract idea. Further, when viewed as an ordered combination, nothing in the claims add significantly more (i.e. an inventive concept) to the abstract idea. The claims are not patent eligible.
Dependent claims 5 and 15 recite the limitations of storing the regulatory compliance information in a [digital wallet] associated with the financial account (a party associated with the financial institution, claim 15). The claims are further directed to the abstract idea analyzed above. The claims also recite the additional elements of the one or more processors and the digital wallet. The one or more processors amount to “apply it” or merely using a computer as a tool to implement the judicial exception. The digital wallet amounts to generally linking the judicial exception to a particular field of use. Accordingly, in combination, 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. Further, when viewed as an ordered combination, nothing in the claims add significantly more (i.e. an inventive concept) to the abstract idea. The claims are not patent eligible.
Dependent claims 6 and 16 recite the limitations that providing the regulatory compliance information comprises supplying, by the one or more processors to the organization, the regulatory compliance information via a [zero-knowledge proof (ZKP)]. The limitations are further directed to the abstract idea analyzed above. The claim also recites the additional element of a zero-knowledge proof (ZKP). The additional element amounts to generally linking the judicial exception to a particular field of use. Accordingly, in combination, the additional element does not integrate the abstract idea into a practical application because it does not impose any meaningful limits on practicing the abstract idea. Further, when viewed as an ordered combination, nothing in the claims add significantly more (i.e. an inventive concept) to the abstract idea. The claims are not patent eligible.
Dependent claims 7 and 17 recite the limitations: retrieving, from an authoritative source, one or more regulations comprising unstructured financial rule text promulgated by a regulatory authority; and generating, by a [natural language processing (NLP) service] the regulatory ruleset from the one or more regulations. The limitations are further directed to the abstract idea analyzed above. The claim also recites the additional elements of a natural language processing (NLP) service running on the one or more processors. The additional elements amount to “apply it" or merely using a computer as a tool to implement the judicial exception. Further, the NLP amounts to generally linking the judicial exception to a particular field of use. Accordingly, in combination, the 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. Further, when viewed as an ordered combination, nothing in the claims add significantly more (i.e. an inventive concept) to the abstract idea. The claims are not patent eligible.
Dependent claim 14 recites the limitations that the regulatory compliance information comprises information encrypted by a [private cryptographic key] associated with the financial account (a party associated with the financial transaction), and wherein providing the regulatory compliance information further comprises providing to the organization, a [public cryptographic key] associated with the financial account. The limitations are further directed to the abstract idea analyzed above. The claim also recites the additional element of a private cryptographic key, public cryptographic key, and the one or more processors. The additional elements of the private cryptographic key and public cryptographic key amounts to generally linking the judicial exception to a particular field of use. The one or more processors amount to “apply it” or merely using a computer as a tool to implement the judicial exception. Accordingly, in combination, 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. Further, when viewed as an ordered combination, nothing in the claim adds significantly more (i.e. an inventive concept) to the abstract idea. The claim is not patent eligible.
Dependent claims 3, 8-10, 13, and 18-20 recite additional limitations that are further directed to the abstract idea previously analyzed in the rejected independent claims. The claims also recite additional elements that have been previously analyzed in the rejected independent claims. Thus, claims 3, 8-10, 13, and 18-20 are also rejected under 35 U.S.C. 101. The claims are not patent eligible.
The 35 U.S.C. 101 rejection is maintained.
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 and 5-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to a judicial exception (i.e. an abstract idea) without significantly more.
Claims 1-3 and 5-20 recite a method (i.e. process). Therefore claims 1-3 and 3-20 fall within one of the four statutory categories of invention.
Independent claim 1 recites the limitations of: automating regulatory compliance of a financial account without revealing financial data associated with the financial account, the method comprising: generating a [smart contract] from a regulatory ruleset, wherein the regulatory ruleset comprises programmatic logic for determining regulatory compliance, wherein the [smart contract] comprises executable bytecode and is configured to: receive the financial data associated with the financial account, process the financial data while the financial data remains encrypted using fully homomorphic encryption, determine from the financial data whether the financial account is compliant, responsive to determining that the financial account is compliant, generate regulatory compliance information, wherein the regulatory compliance information comprises: 1) cryptographic proof of regulatory compliance and 2) information encrypted by a [private cryptographic key] associated with the financial account; and append the regulatory compliance information to a [distributed ledger] maintained by a network of participants as a block on a blockchain-based protocol upon validation by the network of participants according to consensus rules; transmitting the [smart contract] to at least one other participant in a distributed ledger network to deploy the [smart contract], wherein the [smart contract] is stored in the [distributed ledger] maintained by the network of participants; receiving a request from an organization outside the [distributed ledger network] regarding the regulatory compliance of the financial account; modifying the [smart contract] based on the regulatory compliance information appended to the [distributed ledger]; and providing to the organization, (1) the regulatory compliance information without revealing the financial data to improve data privacy, and (2) a [public cryptographic key] associated with the financial account. The invention and claims are drawn towards automating the determination of regulatory compliance, and claim 1 recites limitations that directly correspond to certain methods of organizing human activity (commercial or legal interactions, business relations, managing personal interactions or relationships, following rules or instructions), as evidenced by limitations detailing receiving and determining compliance information for a financial account, generating a smart contract from regulatory ruleset(s), transmitting the smart contract to other participants, receiving a request from an organization outside of the distributed ledger network and modifying the smart contract based on regulatory compliance information, and providing the regulatory compliance information without revealing the financial data and a public cryptographic key associated with a financial account. The claims limitations identified above further correspond to fundamental economic practices or principles such as mitigating risks in association with regulatory compliance in financial accounts. The claim also recites limitations the directly correspond to mental processes (observation, evaluation, judgment, opinion), as evidenced by limitations detailing the evaluation and observation of financial data to determine compliance (judgment/opinion), and generating contracts based on regulatory rulesets that determine compliance, etc. The claims recite an abstract idea.
Note: The features or limitations in brackets in the above section are inserted for reading clarity, but are analyzed as “additional elements” under Step 2A Prong Two and Step 2B below.
The judicial exception is not integrated into a practical application simply because the claims recite the additional elements of: one or more processors, a smart contract, a distributed ledger, distributed ledger network, and a private and public cryptographic key. The additional elements are computer components recited at a high-level of generality performing the above-mentioned limitations. The combination of the additional elements are no more than mere instructions to apply the judicial exception using a generic computer. Further, the smart contract, the financial data remaining encrypted using fully homomorphic encryption, and cryptographic keys amount to generally linking the judicial exception to a particular field of use. Additionally, the financial data remaining encrypted using fully homomorphic encryption (“FHE”) amounts to insignificant extra-solution activity as the use of FHE is incidental to the primary process and are merely a nominal or tangential addition to the claim. Accordingly, in combination, 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. The claims are directed to an abstract idea.
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 amount to no more than mere instructions to apply the exception using a generic computer and generally linking the judicial exception to a particular field of use. Mere instructions to apply an exception using a generic computer cannot provide an inventive concept. Additionally, the financial data remaining encrypted using fully homomorphic encryption (“FHE”) amounts to well-understood, routine, and conventional activity in smart contract and finance related platforms. (See “Multi-party Secure Computing Financial Shared Platform Based on Lightweight Privacy Protection under FHE” (Hu, et. al, 2020) which discloses a cooperative computing scheme based on small-scale homomorphic encryption on multi-party security data platform, and innovates the operation mode of financial sharing. See also “On the Adoption of Homomorphic Encryption by Financial Institutions*” (Iezzi, et. al., 2023) disclosing sharing data between organizations becomes difficult for commercial, legal and regulatory reasons. Privacy-enhancing Technologies (PETs) are becoming a practical solution for secure and private information sharing. One such PET, Homomorphic Encryption (HE), allows the computation over encrypted data and thus protects the confidentiality of the information while increasing its utility. Results show that the financial sector has gained momentum in discussing privacy-enhancing technology over the last few years. See also “Sharing in Yantian Power Supply Bureau Based on Blockchain Smart Contracts” (Yang, et. al., 2023) which proposes a homomorphic encryption smart contract–based system for exchanging data. See also Sarpatwar (20210344478) ¶0004 disclosing a privacy preserving inference, and its goal is that it provides a secure way for users to maintain the privacy of the scoring point data returned by the model, while also enabling the cloud provider to protect the model's privacy, e.g., for proprietary, regulatory or other reasons. Example use cases includes…financial credit scoring firm training a credit-risk model and providing a scoring service, likewise with rigid privacy constraints due to legal or regulatory requirements. To this end, these types of solutions implement an advanced cryptographic technique known as fully homomorphic encryption (FHE), which provides a way to enable secure computation on client data without the need to decrypt it at the model, while concurrently preserving the secrecy of the model itself). Thus, when viewed as an ordered combination, nothing in the claims add significantly more (i.e. an inventive concept) to the abstract idea. The claims are not patent eligible.
Independent claim 11 recites the limitations of: automating regulatory compliance of a financial transaction without revealing transaction inputs or transaction outputs associated with the financial transaction, the method comprising: generating a [transactional smart contract] from a transactional ruleset, wherein the transactional ruleset comprises programmatic logic for executing the financial transaction, wherein the transactional smart contract is configured to: receive one or more transaction inputs associated with the financial transaction, execute the financial transaction using the one or more transaction inputs, and generate one or more transaction outputs; generating a [regulatory smart contract] from a regulatory ruleset, wherein the regulatory ruleset comprises programmatic logic for determining regulatory compliance, wherein the regulatory smart contract comprises executable code and is configured to: receive the one or more transaction inputs and the one or more transaction outputs, process the one or more transaction inputs and the one or more transaction outputs while the one or more transaction inputs and the one or more transaction outputs remain encrypted using fully homomorphic encryption; determine from the one or more transaction inputs and the one or more transaction outputs whether the financial transaction is compliant, and responsive to determining that the financial transaction is compliant, generate regulatory compliance information, wherein the regulatory compliance information comprises cryptographic proof of regulatory compliance; append the regulatory compliance information to a distributed ledger maintained by a network of participants as a block on a blockchain-based protocol upon validation by the network of participants according to consensus rules; transmitting the [transactional smart contract] and the regulatory smart contract to at least one other participant in a [distributed ledger network] to deploy the [transactional smart contract] and the [regulatory smart contract], wherein the [transactional smart contract] and the [regulatory smart contract] are stored in the [distributed ledger] maintained by the network of participants; sending the one or more transaction inputs to the [transactional smart contract]; receiving a request from an organization regarding the regulatory compliance of the financial transaction; sending the one or more transaction inputs and the one or more transaction outputs to the [regulatory smart contract]; and providing to the organization, the regulatory compliance information without revealing the one or more transaction inputs or the one or more transaction outputs. The invention and claims are drawn towards automating the determination of regulatory compliance, and claim 11 recites limitations that directly correspond to certain methods of organizing human activity (commercial or legal interactions, business relations, managing personal interactions or relationships, following rules or instructions), as evidenced by limitations detailing receiving and determining compliance information for a financial account, generating a smart contract from regulatory ruleset(s), transmitting the smart contract to other participants, receiving a request from an organization outside of the distributed ledger network and modifying the smart contract based on regulatory compliance information, and providing the regulatory compliance information without revealing the financial data and a public cryptographic key associated with a financial account. The claims limitations identified above further correspond to fundamental economic practices or principles such as mitigating risks in association with regulatory compliance in financial accounts. The claim also recites limitations the directly correspond to mental processes (observation, evaluation, judgment, opinion), as evidenced by limitations detailing the evaluation and observation of financial data to determine compliance (judgment/opinion), and generating contracts based on regulatory rulesets that determine compliance, etc. The claims recite an abstract idea.
Note: The features or limitations in brackets in the above section are inserted for reading clarity, but are analyzed as “additional elements” under Step 2A Prong Two and Step 2B below.
The judicial exception is not integrated into a practical application simply because the claims recite the additional elements of: one or more processors, a transactional and regulatory smart contract, a distributed ledger and distributed ledger network. The additional elements are computer components recited at a high-level of generality performing the above-mentioned limitations. The combination of the additional elements are no more than mere instructions to apply the judicial exception using a generic computer. Further, the smart contract, the financial data remaining encrypted using fully homomorphic encryption, and cryptographic keys amount to generally linking the judicial exception to a particular field of use. Additionally, the financial data remaining encrypted using fully homomorphic encryption (“FHE”) amounts to insignificant extra-solution activity as the use of FHE is incidental to the primary process and are merely a nominal or tangential addition to the claim. Accordingly, in combination, 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. The claims are directed to an abstract idea.
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 amount to no more than mere instructions to apply the exception using a generic computer and generally linking the judicial exception to a particular field of use. Mere instructions to apply an exception using a generic computer cannot provide an inventive concept. Additionally, the financial data remaining encrypted using fully homomorphic encryption (“FHE”) amounts to well-understood, routine, and conventional activity in smart contract and finance related platforms. (See “Multi-party Secure Computing Financial Shared Platform Based on Lightweight Privacy Protection under FHE” (Hu, et. al, 2020) which discloses a cooperative computing scheme based on small-scale homomorphic encryption on multi-party security data platform, and innovates the operation mode of financial sharing. See also “On the Adoption of Homomorphic Encryption by Financial Institutions*” (Iezzi, et. al., 2023) disclosing sharing data between organizations becomes difficult for commercial, legal and regulatory reasons. Privacy-enhancing Technologies (PETs) are becoming a practical solution for secure and private information sharing. One such PET, Homomorphic Encryption (HE), allows the computation over encrypted data and thus protects the confidentiality of the information while increasing its utility. Results show that the financial sector has gained momentum in discussing privacy-enhancing technology over the last few years. See also “Sharing in Yantian Power Supply Bureau Based on Blockchain Smart Contracts” (Yang, et. al., 2023) which proposes a homomorphic encryption smart contract–based system for exchanging data. See also Sarpatwar (20210344478) ¶0004 disclosing a privacy preserving inference, and its goal is that it provides a secure way for users to maintain the privacy of the scoring point data returned by the model, while also enabling the cloud provider to protect the model's privacy, e.g., for proprietary, regulatory or other reasons. Example use cases includes…financial credit scoring firm training a credit-risk model and providing a scoring service, likewise with rigid privacy constraints due to legal or regulatory requirements. To this end, these types of solutions implement an advanced cryptographic technique known as fully homomorphic encryption (FHE), which provides a way to enable secure computation on client data without the need to decrypt it at the model, while concurrently preserving the secrecy of the model itself). Thus, when viewed as an ordered combination, nothing in the claims add significantly more (i.e. an inventive concept) to the abstract idea. The claims are not patent eligible.
Dependent claims 2 and 12 recite the limitation that the regulatory compliance information comprises a [non-fungible token (NFT)]. The limitation is further directed to the abstract idea analyzed above. The claims also recite the additional element of a non-fungible token (NFT). The additional elements amount to generally linking the judicial exception to a particular field of use. Accordingly, in combination, the additional element does not integrate the abstract idea into a practical application because it does not impose any meaningful limits on practicing the abstract idea. Further, when viewed as an ordered combination, nothing in the claims add significantly more (i.e. an inventive concept) to the abstract idea. The claims are not patent eligible.
Dependent claims 5 and 15 recite the limitations of storing the regulatory compliance information in a [digital wallet] associated with the financial account (a party associated with the financial institution, claim 15). The claims are further directed to the abstract idea analyzed above. The claims also recite the additional elements of the one or more processors and the digital wallet. The one or more processors amount to “apply it” or merely using a computer as a tool to implement the judicial exception. The digital wallet amounts to generally linking the judicial exception to a particular field of use. Accordingly, in combination, 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. Further, when viewed as an ordered combination, nothing in the claims add significantly more (i.e. an inventive concept) to the abstract idea. The claims are not patent eligible.
Dependent claims 6 and 16 recite the limitations that providing the regulatory compliance information comprises supplying, by the one or more processors to the organization, the regulatory compliance information via a [zero-knowledge proof (ZKP)]. The limitations are further directed to the abstract idea analyzed above. The claim also recites the additional element of a zero-knowledge proof (ZKP). The additional element amounts to generally linking the judicial exception to a particular field of use. Accordingly, in combination, the additional element does not integrate the abstract idea into a practical application because it does not impose any meaningful limits on practicing the abstract idea. Further, when viewed as an ordered combination, nothing in the claims add significantly more (i.e. an inventive concept) to the abstract idea. The claims are not patent eligible.
Dependent claims 7 and 17 recite the limitations: retrieving, from an authoritative source, one or more regulations comprising unstructured financial rule text promulgated by a regulatory authority; and generating, by a [natural language processing (NLP) service] the regulatory ruleset from the one or more regulations. The limitations are further directed to the abstract idea analyzed above. The claim also recites the additional elements of a natural language processing (NLP) service running on the one or more processors. The additional elements amount to “apply it" or merely using a computer as a tool to implement the judicial exception. Further, the NLP amounts to generally linking the judicial exception to a particular field of use. Accordingly, in combination, the 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. Further, when viewed as an ordered combination, nothing in the claims add significantly more (i.e. an inventive concept) to the abstract idea. The claims are not patent eligible.
Dependent claim 14 recites the limitations that the regulatory compliance information comprises information encrypted by a [private cryptographic key] associated with the financial account (a party associated with the financial transaction), and wherein providing the regulatory compliance information further comprises providing to the organization, a [public cryptographic key] associated with the financial account. The limitations are further directed to the abstract idea analyzed above. The claim also recites the additional element of a private cryptographic key, public cryptographic key, and the one or more processors. The additional elements of the private cryptographic key and public cryptographic key amounts to generally linking the judicial exception to a particular field of use. The one or more processors amount to “apply it” or merely using a computer as a tool to implement the judicial exception. Accordingly, in combination, 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. Further, when viewed as an ordered combination, nothing in the claim adds significantly more (i.e. an inventive concept) to the abstract idea. The claim is not patent eligible.
Dependent claims 3, 8-10, 13, and 18-20 recite additional limitations that are further directed to the abstract idea analyzed in the rejected claims above. The claims also recite additional elements that have been analyzed in the rejected claims above. Thus, claims 3, 8-10, 13, and 18-20 are also rejected under 35 U.S.C. 101. The claims are not patent eligible.
Allowable Subject Matter
Claims 1-3 and 5-20 would be allowable if rewritten or amended to overcome the rejection(s) under 35 U.S.C. 101, set forth in this Office action.
The closest patent or patent application prior art reference found that is relevant to the applicant’s claims include Doney (2023/0342849) which discloses a system that helps to facilitate scalable compliance and issuer governance of decentralized financial transactions especially for the trade and transfer of tokenized securities. While Doney discloses generating a smart contract from a regulatory rules set, Doney appears to fail to disclose the detailed limitations of the applicant’s claims. The claims appear to overcome the prior art.
The closest non-patent literature prior art reference found that is relevant to the applicant’s invention includes the publication “Concept of a Regulatory Compliant Blockchain Based Instant Payment System. Limitations and Compromises” (Zilmieks, 2020). The publication discloses a concept of a system based on peer-to-peer networking mechanisms like blockchain and smart contracts, and integration of regulatory services in order to be legal and compliant. The publication, however, does not appear to explicitly disclose generating a smart contract from a regulatory rules set, and fails to disclose the detailed limitations of the applicant’s claims. The claims appear to overcome the prior art.
Conclusion
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DIONE N. SIMPSON
Primary Examiner
Art Unit 3628
/DIONE N. SIMPSON/Primary Examiner, Art Unit 3629
Prosecution Insights