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 .
Information Disclosure Statement
2. The information disclosure statement (IDS) submitted on 10/06/2025. The submission is in compliance with the provisions of 37 CFR 1.97. Accordingly, the information disclosure statement is being considered by the examiner.
Status of the claims
3. Applicant filed the amendment on 03/12/2026. Claims 21-30 and 41-48 are pending.
Claims 21-25 and 27 are amended. Claims 31-40 are canceled. Claims 41-48 are newly added.
Claim Rejections - 35 USC § 112
4. The following is a quotation of the first paragraph of 35 U.S.C. 112(a):
(a) IN GENERAL.—The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.
The following is a quotation of the first paragraph of pre-AIA 35 U.S.C. 112:
The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.
5. Claims 41-48 are rejected under 35 U.S.C. 112(a) or 35 U.S.C. 112 (pre-AIA ), first paragraph, as failing to comply with the written description requirement. The claim(s) contains subject matter which was not described in the specification in such a way as to reasonably convey to one skilled in the relevant art that the inventor or a joint inventor, or for applications subject to pre-AIA 35 U.S.C. 112, the inventor(s), at the time the application was filed, had possession of the claimed invention.
6. Claim 41 recites “(b) cause … to maintain an internal oracle state representing a status of the loan…”.
Applicant’s Specification (PGPub) describes the internal state representing the status of the loan in paras 26, 43, 88, 105, and 108, and also describes the internal state of the blockchain oracle in paras 26, 27,43, 44, 69, and 92, but does not provide support for an internal oracle state. Examiner suggests that applicant amend the limitations to recite “(b) cause… to maintain an internal state representing a status of the loan” to be consistent with the disclosure provided in the specification in, for example, paragraph 0026 recites “… The oracle 102 may receive information from outside sources, such as over communications network 112 (e.g., the Internet) or directly from other participants in the loan network illustrated in the example of FIG. 1. In implementations, the oracle 102 can be viewed as having an internal state representing the status of one or more loans. The oracle 102 may not be active in the sense that it will make updates to the internal state of its own accord. Instead, the oracle 102 receives a transaction from one of the other participants (e.g., borrower 104, loan manager 108, lenders 106, from extrinsic data source 112, etc.) to update the internal state of a loan…”
7. Claims 42-48 are rejected under the same rationale as claim 41 because claims 42-48 inherit the deficiencies of claim 41 due to their dependency.
8. The following is a quotation of 35 U.S.C. 112(b):
(b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.
The following is a quotation of 35 U.S.C. 112 (pre-AIA ), second paragraph:
The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.
9. Claims 44 and 46-48 are rejected under 35 U.S.C. 112(b) or 35 U.S.C. 112 (pre-AIA ), second paragraph, as being indefinite for failing to particularly point out and distinctly claim the subject matter which the inventor or a joint inventor (or for applications subject to pre-AIA 35 U.S.C. 112, the applicant), regards as the invention.
Lack of Antecedent Basis
10. Claim 44 recites the limitation “the blockchain” in paragraph starting with “(d9) broadcast…”. There is insufficient antecedent basis for this limitation in the claim.
11. Claim 46 recites the limitation “the blockchain” in preamble. While there is recitation of a blockchain oracle, a blockchain network, a blockchain-oracle code, etc., there is no independent recitation of “a blockchain.” Therefore, there is insufficient antecedent basis for this limitation in the claim.
12. Claims 47-48 are rejected under the same rationale as claim 46 because claims 47-48 inherit the deficiencies of claim 46 due to their dependency.
Claim Rejections - 35 USC §101
13. 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.
14. Claims 21-30 and 41-48 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.
15. In the instant case, claims 21 and 41 are directed to “systems for autonomously managing a loan collateralized by a digital asset”.
16. Claim 21 recites “managing a loan collateralized by an asset”. Specifically, the claim recites “broadcast an initialization transaction … the initialization transaction comprising … oracle code for establishing … when executed … the initialization transaction includes agreement terms between a lender and a borrower for the loan collateralized by the … asset; transmit a … transaction … the … transaction includes a … asset price feed, and in response to the … transaction the … oracle code is executed … to cause the … oracle to: (a) wake up upon confirmation of the … transaction …; (b) determine a loan-to-value (LTV) ratio for the loan collateralized by the … asset based on a market price of the … asset included in the … transaction and the agreement terms between the lender and the borrower included in the initialization transaction; (c) determine whether the LTV ratio satisfies a margin call condition that is specified in the agreement terms; and (d) transmit a margin call warning that includes an instruction to remove the margin call condition to the borrower in response to a determination that the LTV ratio does satisfy the margin call condition”. Subject matter grouped under “Certain methods of organizing human activity” (e.g., commercial or legal interactions) and an abstract idea in prong one of step 2A (MPEP 2106.04(a)).
17. This judicial exception is not integrated into a practical application because, when analyzed under prong two of step 2A (MPEP 2106.04 II), the additional elements of claim 21 such as “a digital asset”, “a blockchain oracle”, “a blockchain”, “a processor”, “a computer network interface”, “a memory”, “at least one peer on a network of the blockchain”, “blockchain oracle code”, and “a heartbeat transaction” 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. Therefore, the additional elements do not integrate the abstract idea into a practical application as they do no more than represent a computer performing functions that correspond to (i.e., automate) the acts of managing the loan collateralized by the asset. With respect to “transmit a heartbeat transaction to the at least one peer on the network of the blockchain via the computer network interface, the heartbeat transaction includes a digital asset price feed …” and “(d) transmit a margin call warning that includes an instruction to remove the margin call condition to the borrower in response to a determination that the LTV ratio does satisfy the margin call condition” is simply transmitting data, “[use] of a computer or other machinery in its ordinary capacity for economic or other tasks (e.g., to receive, store, or transmit data) does not integrate a judicial exception into a practical application or provide significantly more (MPEP 2106.05(f)(2)).
18. When analyzed under step 2B (MPEP 2106.04 II), as the additional elements do no more than represent the use of a computer, or computer technology, as a tool to perform managing the loan collateralized by the asset and/or generally link the abstract idea to a particular technological environment or field of use, they do not improve computer functionality or provide an improvement to another technology or technological field.
19. Hence, claim 21 is not patent eligible.
20. Claim 41 also recites “managing a loan collateralized by an asset”. Specifically, the claim recites “(a) generate and broadcast … an initialization transaction comprising executable …oracle code to establish … the initialization transaction including agreement terms between a lender and a borrower for the loan collateralized by the … asset; (b) cause the … code, when executed … to maintain an internal oracle state representing a status of the loan collateralized by the … asset; (c) generate and transmit a … transaction … the … transaction including a …asset price feed associated with collateral of the … asset; (d) in response to confirmation of the … transaction … cause execution of the … code … to: (dl) transition the internal oracle state from a dormant state to an evaluation state; (d2) compute a loan-to-value (LTV) ratio for the loan based on the … asset price feed included in the … transaction and the agreement terms included in the initialization transaction; (d3) evaluate the LTV ratio against a margin call condition specified in the agreement terms; and (d4) upon determining that the margin call condition is satisfied, generate and transmit a margin call warning transaction … identifying an amount of additional … asset collateral required to satisfy the margin call condition”. Subject matter grouped under “Certain methods of organizing human activity” (e.g., commercial or legal interactions) and an abstract idea in prong one of step 2A (MPEP 2106.04(a)).
21. This judicial exception is not integrated into a practical application because, when analyzed under prong two of step 2A (MPEP 2106.04 II), the additional elements of claim 41 such as “a digital asset”, “a blockchain oracle”, “nodes of a distributed blockchain network”, “a processor”, “a computer network interface”, “peers of the distributed blockchain network”, “a memory”, “at least one peer of the distributed blockchain network”, “executable blockchain-oracle code”, “the blockchain oracle code”, and “a heartbeat transaction” 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. Therefore, the additional elements do not integrate the abstract idea into a practical application as they do no more than represent a computer performing functions that correspond to (i.e., automate) the acts of managing the loan collateralized by the asset. With respect to “(c)… transmit a heartbeat transaction to the at least one peer of the distributed blockchain network via the computer network interface, the heartbeat transaction including a digital-asset price feed associated with collateral of the digital asset” and “(d4) … transmit a margin call warning transaction to the distributed blockchain network identifying an amount of additional digital asset collateral required to satisfy the margin call condition” is simply transmitting data, “[use] of a computer or other machinery in its ordinary capacity for economic or other tasks (e.g., to receive, store, or transmit data) does not integrate a judicial exception into a practical application or provide significantly more (MPEP 2106.05(f)(2)).
22. When analyzed under step 2B (MPEP 2106.04 II), as the additional elements do no more than represent the use of a computer, or computer technology, as a tool to perform managing the loan collateralized by the asset and/or generally link the abstract idea to a particular technological environment or field of use, they do not improve computer functionality or provide an improvement to another technology or technological field.
23. Hence, claim 41 is not patent eligible.
24. The following dependent claims recent additional elements not addressed above:
claim 25 recites “a fraction of the digital asset”;
claim 27 recites “a blockchain of the blockchain oracle”; and
claim 44 recites “a fraction of the digital asset” and “the blockchain”.
When considered individually, and as a whole, each of these additional elements amount to merely "apply it", as they are merely applying the abstract idea to the technical environment of the fraction of the digital asset, the blockchain of the blockchain oracle, and the blockchain.
Dependent claims 22-30 and 42-48 merely expand upon the abstract ideas of the independent claims 21 and 41, and are therefore rejected under the same rationale as claims 21 and 41.
Conclusion of 35 USC §101
25. The claims as a whole do not amount to significantly more than the abstract idea itself. This is because the claims do not effect an improvement to another technology or technical field; the claims do not amount to an improvement to the functioning of a computer system itself; and the claims do not move beyond a general link of the use of an abstract idea to a particular technological environment.
26. Accordingly, there are no meaningful limitations in the claims that transform the judicial exception into a patent eligible application such that the claims amount to significantly more than the judicial exception itself.
Response to Arguments
27. After careful consideration of applicant arguments, the examiner finds them to be not persuasive. Claims 21-30 and 41-48 are rejected.
Rejection under 35 USC § 101
28. Applicant’s arguments toward 35 U.S.C. § 101 rejection is not persuasive. Amended independent claim 21 do not have additional elements that could lead to an improvement in the functioning of a computer, or an improvement to other technology or technical field.
29. Applicant is of the opinion that “claim 21 recites that the system can ‘broadcast an initialization transaction to at least one peer on a network of the blockchain via the computer network interface, the initialization transaction comprising blockchain oracle code for establishing the blockchain oracle when executed by the at least one peer on the network of the blockchain’. This feature defines a specific distributed computing architecture rather than a generalized financial process”. And concludes that “the claims do not satisfy step 2A and are directed to eligible subject matter”.
Examiner respectfully disagrees.
Claims as a whole directed to managing a loan collateralized by an asset which is grouped under “Certain methods of organizing human activity (e.g., commercial or legal interactions)”. Per the specification, the blockchain oracle serves as loan management software that can receive, integrate, and act upon loan information, and the application of said software amounts applying the abstract idea using generic blockchain network.
30. Applicant is of the opinion that “[even] if the claims were deemed to involve an abstract concept relating to loan collateral management, the claims nevertheless integrate that concept into a practical technological application because the claims require execution of oracle code by blockchain peers, transmission and confirmation of blockchain transactions containing external data feeds, and event-driven execution of oracle logic triggered by blockchain state changes. These features impose meaningful technological constraints that confine the claims to a particular distributed ledger implementation and prevent the claim from preempting the abstract concept of loan collateral monitoring more broadly”.
Examiner respectfully disagrees.
Mentioned above the elements of the claims performed by using the computer components. The use of a processor/computer as a tool to implement the abstract idea does not integrate the abstract idea into a practical application because it requires no more than a computer performing functions that correspond to acts required to carry out the abstract idea. The additional elements do not involve improvements to the functioning of a computer, or to any other technology or technical field. An ordered combination of the limitations – establishing a blockchain oracle on a peer on the network of the blockchain and transmitting a heartbeat transaction to the oracle such that the oracle can perform subsequent operations with the information received from the heartbeat transaction – merely implement an abstract idea (commercia/legal interaction) using the additional elements such as a digital asset, a blockchain oracle, a blockchain, a processor, a computer network interface, a memory, at least one peer on a network of the blockchain, blockchain oracle code, and a heartbeat transaction. The claims do not, for example, purport to improve the functioning of a computer. Nor do they effect an improvement in any other technology or technical field. Accordingly, the additional elements do not impose any meaningful limits on practicing the abstract idea, and the claim 21 is directed to the abstract idea.
31. Applicant is of the opinion that “claim 21 recites ‘establishing the blockchain oracle’ when the blockchain oracle code is executed by a peer on the blockchain, and ‘transmit a heartbeat transaction’ to the peer on the blockchain. The use of an oracle on a blockchain to monitor a loan collateralized by a digital asset does not appear to be a routine or conventional activity in the field. The use of the oracle on the blockchain provides a clear improvement to the operation of the blockchain. The claims recite significantly more than the alleged abstract idea”. And concludes that “the additional elements recited in the claim provide an inventive concept sufficient to transform any alleged abstract idea into patent- eligible subject matter”.
Examiner respectfully disagrees.
Applicant’s argument is not persuasive for the reasons already discussed above – the additional elements do not involve improvements to the functioning of a computer, or to any other technology or technical field. As per the identification of the “additional elements” under Step 2A Prong Two and Step 2B, the rejection properly identifies the elements which are recited in the claim beyond the abstract idea, including “transmit a heartbeat transaction to the at least one peer on the network of the blockchain via the computer network interface, the heartbeat transaction includes a digital asset price feed”, “determine a loan-to-value (LTV) ratio for the loan collateralized by the digital asset based on a market price of the digital asset”. Under Step 2A Prong Two, the “additional elements” have been identified and the limitations are not indicative of integration into a practical application. Under Step 2B, the additional elements have been evaluated and do not amount to “significantly more”. Note that Revised Step 2A overlaps with Step 2B, and thus, many of the considerations need not be reevaluated in Step 2B because the answer will be the same. The identification of the additional elements in the claim from Step 2A Prong Two is carried over as well as the conclusion from Step 2A Prong Two on the considerations discussed in MPEP 2106.05(a)-(c), (e), (f), and (h).
The claims are not patent eligible.
32. Applicant is of the opinion that “generic computer components are able in combination to perform functions that are not merely generic. DDR Holdings, LLC … Applicant's recitation of establishing an oracle on the blockchain and triggering the oracle to monitor the status of a loan is clearly a combination of components that perform functions that are not generic”.
Examiner respectfully disagrees.
Unlike DDR, where the click of a hyperlink would cause an e-commerce website to lose a customer to a rival e-commerce website, there is no such business or technical problem confronting the user. Applicant’s invention does not set out to solve any specific business or technological challenges comparable to that in DDR. There is no risk of losing business to a rival because of a mouse click. The claimed invention does not involve internet browsing and its associated challenges. Nor do the claims describe any technical solutions to any problem. Broadcasting an initialization transaction, transmit a heartbeat transaction, determine a LTV ratio, and transmit a margin call warning is not even remotely comparable to navigating a merchant website. Hence, the DDR analogy does not apply here.
The claims are not patent eligible.
33. Applicant states that “[in] the present case, the independent claims and their respective dependents unquestionably define a particular distributed-ledger execution architecture in which executable oracle code is deployed to blockchain peers through an initialization transaction and thereafter executed in response to blockchain events. As such, the claims do not recite the generic use of a computer to perform management of a loan collateralized by an asset. Instead, the claims recite an improvement to how a distributed oracle execution architecture enables external data feeds to be integrated with blockchain transaction logic in a controlled, event-driven manner, consistent with the spirit of Ex Parte Desjardins”.
Examiner respectfully disagrees.
Applicant’s arguments are not persuasive, according to MPEP 2106.04 (d) III “In Ex Parte Desjardins … the limitation ‘adjust the first values of the plurality of parameters to optimize performance of the machine learning model on the second machine learning task while protecting performance of the machine learning model on the first machine learning task’ reflected the improvement…”. However, the present claimed invention does not have features similar to In Ex Parte Desjardins.
The claims are not patent eligible.
Rejections under 35 U.S.C. § 112 (b)
34. Rejections of claims 21-30 due to amendments of claim 21 are withdrawn.
Rejections under 35 U.S.C. § 102
35. Rejections of claims 21-30 due to amendments of claim 21 are withdrawn.
Conclusion
36. The prior art made of record and not relied upon is considered pertinent to applicant's disclosure.
US20190087893A1 – Pellew – Discloses a s method for a secure financial transaction, that including the steps of: (a) formulating the documentation associated with the financial transaction, including security for the transaction; (b) dividing the transaction into a series of segments, each segment having an associated expected risk profile and security profile.
US20180145836A1 – Suer et al. – Discloses a method for verifying a block record for a digital ledger involves a first validation node which receives a block record from a second validation node, wherein the block record comprises a digital signature for the block record.
US20150379510A1 – Smith – Discloses method and system to use a block chain infrastructure and smart contracts to monetize data transactions involving changes to data included into a data supply chain, wherein a system and method to use smart contracts to monetize changes to data using a block chain infrastructure.
US11455630B2 – Wright et al. – Discloses system and method for controlling an exchange process, such as a loan, conducted between at least two parties via a blockchain such as the Bitcoin blockchain, wherein the method may comprise the step of generating a first blockchain transaction which includes a redeem script.
37. 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.
38. Any inquiry concerning this communication or earlier communications from the examiner should be directed to AMANULLA ABDULLAEV whose telephone number is (571)272-4367. The examiner can normally be reached Monday-Friday 9:30AM -4:30PM ET.
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/AMANULLA ABDULLAEV/Examiner, Art Unit 3692
/ABBY J FLYNN/Supervisory Patent Examiner, Art Unit 3663
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