DETAILED ACTION
1. The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . This Office action is in response to Applicant’s communication filed on October 20, 2025. Amendments to claims 1, 6, 8-10, 14, 16-19, 23, and 24 have been entered. Claims 1-3, 5-11, 13-20, 23 and 24 are pending and have been examined. The statement of reasons for the indication of allowable subject matter over prior art was already discussed in the Office action mailed on June 7, 2024 and hence not repeated here. The rejections and response to arguments are stated below.
Claim Rejections - 35 USC § 101
2. 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.
3. Claims 1-3, 5-11, 13-20, 23 and 24 are rejected under 35 U.S.C. § 101 because the claimed invention is directed to an abstract idea without significantly more.
The claim(s) recite(s) executing the instructions on the date the entitlement is due, which is considered a judicial exception because it falls under the category of “Certain Methods of organizing human activity” such as fundamental economic practice as well as commercial or legal interactions including agreements as discussed below. This judicial exception is not integrated into a practical application as discussed below. The claim(s) does/do not include additional elements that are sufficient to amount to significantly more than the judicial exception as discussed below.
Analysis
Step 1: In the instant case, exemplary claim 17 is directed to a system.
Step 2A – Prong One: The limitations of “A computing system comprising:
one or more processors; and memory storing instructions that, when executed by the one or more processors, cause the computing system to perform operations including:
generating a hierarchy of tiers within a distributed ledger, the tiers comprising a tier one and a tier two, wherein the tier one has a first set of permissions and the tier two has a second set of permissions, different from the first set of permissions;
managing a plurality of tier one accounts in the first tier of the hierarchy of tiers of the distributed ledger and a plurality of tier two accounts in the second tier of the hierarchy of tiers of the distributed ledger, wherein each tier one account comprises a tier one smart contract on the first tier of the distributed ledger that includes an identifier of a corresponding tier one entity and each tier two account comprises a tier two smart contract on the second tier of the distributed ledger that includes identifiers of a corresponding tier two entity and one of the tier one entities that provides services to the corresponding tier two entity, wherein the second set of permissions for the second tier enable a first tier one account of the plurality of tier one accounts to access a first tier two account of the plurality of tier two accounts for which the first tier one account provides services, as indicated by the first tier two account including an identifier of the first tier one account, while preventing access, by the first tier one account, to a second tier two account of the plurality of tier two accounts for which the first tier one account does not provide custody services;
identifying an entitlement and a corresponding date on which the entitlement is due;
identifying interests in the entitlement held by at least some of the plurality of tier one accounts in the first tier of the hierarchy, each interest identified by a corresponding token on the distributed ledger held by a corresponding tier one account of the plurality of tier one accounts;
automatically generating a plurality of instructions comprising first instructions and second instructions, the first instructions for transferring a first token representing a portion of the entitlement from a registrar account to the first tier one account of the plurality of tier one accounts according to an interest of the first tier one account in the entitlement, and the second instructions for transferring second tokens representing subportions of the portion of the entitlement to corresponding ones of the plurality of tier two accounts according to interests of the tier two entities in the entitlement, the corresponding ones of the plurality of tier two accounts including the first tier two account; and
automatically executing the plurality of instructions on the date the entitlement is due, wherein executing the plurality of instructions causes the first token representing the portion of the entitlement to be transferred to the first tier one account of the plurality of tier one accounts and the second tokens representing the subportions of the portion of the entitlement to be transferred to the corresponding ones of the tier two accounts, wherein the second set of permissions enables the first tier one account to access the corresponding ones of the of the tier two accounts to implement transfer of second tokens representing the subportions of the portion of the entitlement” as drafted, when considered collectively as an ordered combination without the italicized portions, is a process that, under the broadest reasonable interpretation, covers the category of “Certain Methods of organizing human activity” such as fundamental economic practice as well as commercial or legal interactions including agreements.
Managing a plurality of tier one accounts in the first tier of the hierarchy of tiers of the distributed ledger and a plurality of tier two accounts in the second tier of the hierarchy of tiers of the distributed ledger, wherein each tier one account comprises a tier one smart contract on the first tier of the distributed ledger that includes an identifier of a corresponding tier one entity and each tier two account comprises a tier two smart contract on the second tier of the distributed ledger that includes identifiers of a corresponding tier two entity and one of the tier one entities that provides services to the corresponding tier two entity, wherein the second set of permissions for the second tier enable a first tier one account of the plurality of tier one accounts to access a first tier two account of the plurality of tier two accounts for which the first tier one account provides services” is a fundamental economic practice such as managing investment accounts. Also, the steps of
“identifying an entitlement and a corresponding date on which the entitlement is due;
identifying interests in the entitlement held by at least some of the plurality of tier one accounts in the first tier of the hierarchy, each interest identified by a corresponding token on the distributed ledger held by a corresponding tier one account of the plurality of tier one accounts;
automatically generating a plurality of instructions comprising first instructions and second instructions, the first instructions for transferring a first token representing a portion of the entitlement from a registrar account to the first tier one account of the plurality of tier one accounts according to an interest of the first tier one account in the entitlement, and the second instructions for transferring second tokens representing subportions of the portion of the entitlement to corresponding ones of the plurality of tier two accounts according to interests of the tier two entities in the entitlement, the corresponding ones of the plurality of tier two accounts including the first tier two account; and
automatically executing the plurality of instructions on the date the entitlement is due, wherein executing the plurality of instructions causes the first token representing the portion of the entitlement to be transferred to the first tier one account of the plurality of tier one accounts and the second tokens representing the subportions of the portion of the entitlement to be transferred to the corresponding ones of the tier two accounts, wherein the second set of permissions enables the first tier one account to access the corresponding ones of the of the tier two accounts to implement transfer of second tokens representing the subportions of the portion of the entitlement: considered collectively, is fulfilling agreements in the form of contracts. Hence, the steps of the claim, considered collectively as an ordered combination without the italicized portions, covers the abstract category of “Certain Methods of organizing human activity”.
That is, other than, a computing system that includes one or more processors, memory storing instructions, a hierarchy of tiers within a distributed ledger comprising a first tier and a second tier, smart contracts on the distributed ledger, tokens on the distributed ledger, and a bot executing on the computing system, nothing in the claim precludes the steps from being performed as a method of organizing human activity. If the claim limitations, under the broadest reasonable interpretation, covers methods of organizing human activity but for the recitation of generic computer components, then it falls within the “Certain methods of organizing human activity” grouping of abstract ideas. Accordingly, the claim recites an abstract idea.
Step 2A – Prong Two: The judicial exception is not integrated into a practical application. In particular, the claim only recites the additional elements of a computing system that includes one or more processors, memory storing instructions, a hierarchy of tiers within a distributed ledger comprising a first tier and a second tier, smart contracts on the distributed ledger, tokens on the distributed ledger, and a bot executing on the computing system to perform all the steps. A plain reading of Figures 1-2 and 12 and descriptions in at least paragraphs [0004] – [0005], [0021] – [0028)], [0060], and [00103] – [00105] reveals that one or more processors may be generic processors suitably programmed to execute the claimed steps. Similarly the memory, the distributed ledger including smart contracts on the distributed ledger are generic computer components suitably programmed to store the corresponding data/information /function. The hierarchy of tiers within a distributed ledger and the tokens on the distributed ledger are broadly interpreted to include generic computer components suitably programmed to perform the associated functions. The bots and modules executing on the computing system and the smart contracts are broadly interpreted to include suitably programmed generic computer programs to perform the associated functions. Hence, the additional elements in the claims are all generic components suitably programmed to perform their respective functions. The additional elements in all the steps are recited at a high-level of generality (i.e., as generic computer components performing generic computer functions) such that it amounts no more than mere instructions to apply the exception using generic computer components. 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. Hence, claim 17 is directed to an abstract idea.
Step 2B: The claim does 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, using the additional elements (identified above) to perform the claimed steps amounts to no more than mere instructions to apply the exception using a generic computer component. The additional elements of the instant underlying process, when taken in combination, together do not offer substantially more than the sum of the functions of the elements when each is taken alone. Mere instructions to apply an exception using a generic computer component cannot provide an inventive concept. Hence, independent claim 17 is not patent eligible. Independent claims 1 and 9 are also not patent eligible based on similar reasoning and rationale.
Dependent claims 2-3, 5-8, 10-11, 13-16, 18-20, 23 and 24, when analyzed as a whole are held to be patent ineligible under 35 U.S.C. 101 because the additional recited limitations only refine the abstract idea further.
For instance, in claims 2, 10 and 18, the steps “further comprising: identifying, by the computing system, tier three accounts that have interests in the entitlement in a third tier of the hierarchy; generating, by the bot executed by the computing system, additional instructions to transfer at least some of the second tokens representing the subportions of the portions of the entitlement from at least some of the tier two accounts to the tier three accounts according to interests in the entitlement of tier three entities corresponding to the tier three accounts; and executing the additional instructions by the bot executing on the computing system, wherein executing the additional instructions causes the at least some of the second tokens representing the subportions of the portions of the entitlement to be transferred from the at least some of the tier two accounts to the tier three accounts” under the broadest reasonable interpretation, are further refinements of methods of organizing human activity because these steps describe the intermediate steps of the underlying process.
In claims 3 and 11, the step “wherein the entitlement is a coupon payment” under the broadest reasonable interpretation, is a further refinement of methods of organizing human activity because this step describes the entitlement used in the intermediate steps of the underlying process.
In claims 5-7, 13-15 and 19-20, the steps “wherein the distributed ledger comprises a blockchain”, “wherein the blockchain is a permissioned blockchain and smart contracts are used to hold the first token and the second tokens such that participants can only view interests to which they are entitled or for which they are responsible” and “wherein the distributed ledger comprises a first blockchain and a second blockchain, with interests in the first tier of the hierarchy being stored on the first blockchain and interests in the second tier of the hierarchy being stored on the second blockchain” under the broadest reasonable interpretation, are further refinements of methods of organizing human activity because these steps describe the intermediate steps of the underlying process. The additional elements of blockchains and smart contracts are broadly interpreted to correspond to generic computer components suitably programmed to perform the associated functions. The additional element of the blockchains and the smart contracts, perform their respective traditional functions recited at a high-level of generality such that it amounts no more than mere instructions to apply the exception using generic computer components.
In claim 8 and 16, the steps “further comprising providing, by the computer system, a notification to at least one of the tier one entities that the entitlement will be paid before payment of the entitlement, wherein the at least one of the tier one entities identifies the tier two entities that have interests in the entitlement, before payment of the entitlement, in response to the notification” under the broadest reasonable interpretation, are further refinements of methods of organizing human activity because these steps further describe the intermediate steps of the underlying process.
In claims 23 and 24, the steps “further comprising:
automatically identifying the plurality of settlement instructions;
determining whether the first instructions and the second instructions are signed by required parties;
in response to determining that the first instructions or the second instructions are not signed by the required parties, generating an error;
in response to determining that the first instructions and the second instructions are signed by the required parties, setting Booleans on the first instructions and the second instructions to indicate that the first instructions and the second instructions are signed by required parties, wherein the plurality of instructions are executed responsive to the Booleans indicating that both the first and second instructions are signed by the required parties” under the broadest reasonable interpretation, are further refinements of methods of organizing human activity because these steps further describe the intermediate steps of the underlying process.
In all the dependent claims, the judicial exception is not integrated into a practical application because the limitations are recited at a high-level of generality such that it amounts no more than mere instructions to apply the exception using generic computer components. Also, the claims do not affect an improvement to another technology or technical field; the claims do not amount to an improvement to the functioning of a computer system itself; the claims do not affect a transformation or reduction of a particular article to a different state or thing; and the claims do not move beyond a general link of the use of an abstract idea to a particular technological environment. In addition, the dependent claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception. The additional elements of the instant underlying process, when taken in combination, together do not offer substantially more than the sum of the functions of the elements when each is taken alone. The claims as a whole, do not amount to significantly more than the abstract idea itself. For these reasons, the dependent claims also are not patent eligible.
Response to Arguments
4. In response to Applicants arguments on pages 16-19 of the Applicant’s remarks that the claims are patent-eligible under 35 USC 101 when considered under MPEP 2106, the Examiner respectfully disagrees.
The fact that the claims are Patent-Ineligible when considered under the MPEP 2106 has already been addressed in the rejection and hence not all the details of the rejection are repeated here.
The claims recite executing the instructions on the date the entitlement is due, which is considered a judicial exception because it falls under the category of “Certain Methods of organizing human activity” such as fundamental economic practice as well as commercial or legal interactions including agreements as discussed in the rejection. Hence, the claims recite an abstract idea.
Managing a plurality of tier one accounts in the first tier of the hierarchy of tiers of the distributed ledger and a plurality of tier two accounts in the second tier of the hierarchy of tiers of the distributed ledger, wherein each tier one account comprises a tier one smart contract on the first tier of the distributed ledger that includes an identifier of a corresponding tier one entity and each tier two account comprises a tier two smart contract on the second tier of the distributed ledger that includes identifiers of a corresponding tier two entity and one of the tier one entities that provides services to the corresponding tier two entity, wherein the second set of permissions for the second tier enable a first tier one account of the plurality of tier one accounts to access a first tier two account of the plurality of tier two accounts for which the first tier one account provides services” is a fundamental economic practice such as managing investment accounts. Also, the steps of
“identifying an entitlement and a corresponding date on which the entitlement is due;
identifying interests in the entitlement held by at least some of the plurality of tier one accounts in the first tier of the hierarchy, each interest identified by a corresponding token on the distributed ledger held by a corresponding tier one account of the plurality of tier one accounts;
automatically generating a plurality of instructions comprising first instructions and second instructions, the first instructions for transferring a first token representing a portion of the entitlement from a registrar account to the first tier one account of the plurality of tier one accounts according to an interest of the first tier one account in the entitlement, and the second instructions for transferring second tokens representing subportions of the portion of the entitlement to corresponding ones of the plurality of tier two accounts according to interests of the tier two entities in the entitlement, the corresponding ones of the plurality of tier two accounts including the first tier two account; and
automatically executing the plurality of instructions on the date the entitlement is due, wherein executing the plurality of instructions causes the first token representing the portion of the entitlement to be transferred to the first tier one account of the plurality of tier one accounts and the second tokens representing the subportions of the portion of the entitlement to be transferred to the corresponding ones of the tier two accounts, wherein the second set of permissions enables the first tier one account to access the corresponding ones of the of the tier two accounts to implement transfer of second tokens representing the subportions of the portion of the entitlement: considered collectively, is fulfilling agreements in the form of contracts. Hence, the steps of the claim, considered collectively as an ordered combination without the italicized portions, covers the abstract category of “Certain Methods of organizing human activity”. The additional elements in the claims such as one or more processors, memory storing instructions, a hierarchy of tiers within a distributed ledger comprising a first tier and a second tier, smart contracts on the distributed ledger, tokens on the distributed ledger, and a bot executing on the computing system are used as tools in their ordinary capacity to apply the abstract idea.
According to MPEP 2106, limitations that are indicative of integration into a practical application include:
Improvements to the functioning of a computer, or to any other technology or technical field - see MPEP 2106.05(a)
Applying or using a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition
Applying the judicial exception with, or by use of, a particular machine - see MPEP 2106.05(b)
Effecting a transformation or reduction of a particular article to a different state or thing - see MPEP 2106.05(c)
Applying or using the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception - see MPEP 2106.05(e).
In the instant case, the judicial exception is not integrated into a practical application, because none of the above criteria is met. In particular, the claims only recite the additional elements of a computing system that includes one or more processors, memory storing instructions, a hierarchy of tiers within a distributed ledger comprising a first tier and a second tier, smart contracts on the distributed ledger, tokens on the distributed ledger, and a bot executing on the computing system to perform all the steps. A plain reading of Figures 1-2 and 12 and descriptions in at least paragraphs [0004] – [0005], [0021] – [0028)], [0060], and [00103] – [00105] reveals that one or more processors may be generic processors suitably programmed to execute the claimed steps. Similarly the memory, the distributed ledger including smart contracts on the distributed ledger are generic computer components suitably programmed to store the corresponding data/information /function. The hierarchy of tiers within a distributed ledger and the tokens on the distributed ledger are broadly interpreted to include generic computer components suitably programmed to perform the associated functions. The bots and modules executing on the computing system and the smart contracts are broadly interpreted to include suitably programmed generic computer programs to perform the associated functions. Hence, the additional elements in the claims are all generic components suitably programmed to perform their respective functions. The additional elements in all the steps are recited at a high-level of generality (i.e., as generic computer components performing generic computer functions) such that it amounts no more than mere instructions to apply the exception using generic computer components. 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. Hence, the claims are directed to an abstract idea.
The claimed features including those recited on pages 16-17 such as “a hierarchy of tiers ... comprising a first tier and a second tier, wherein the first tier has a first set of permissions and the second tier has a second set of permissions, different from the first set of permissions."[T]he second set of permissions for the second tier enable a first tier one account of the plurality of tier one accounts to access a first tier two account of the plurality of tier two accounts for which the first tier one account provides services, as indicated by the first tier two account including an identifier of the first tier one account” may be characterized as improvements in the abstract idea of executing the (settlement) instructions on the date the entitlement is due, using the additional elements as tools in their ordinary capacity to apply the abstract idea. An improvement in abstract idea is still abstract (SAP America v. Investpic *2-3 (“We may assume that the techniques claimed are “groundbreaking, innovative, or even brilliant,” but that is not enough for eligibility. Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013); accord buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1352 (Fed. Cir. 2014). Nor is it enough for subject-matter eligibility that claimed techniques be novel and nonobvious in light of prior art, passing muster under 35 U.S.C. §§ 102 and 103. See Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 89–90 (2012); Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016) (“A claim for a new abstract idea is still an abstract idea). The alleged advantages such as “enabling the first tier one account to access the corresponding ones of the of the tier two accounts to implement transfer of second tokens" (and conversely preventing tier one accounts from accessing tier two counts for which they do not provide services) …. providing improved privacy control relative to prior distributed ledger solution solutions …. increasing security of information ….. they may reduce distributed ledger alterations (thereby improving energy and efficiency and network capacity usage), because when subportions of the entitlement are allocated in the second tier, the first tier may remain unchanged” are due to improvements in the abstract idea. It does not involve any improvements to another technology, technical field, or improvements to the functioning of the computer itself. Therefore, the Applicants’ arguments are not persuasive.
As discussed in the rejection, 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, using the additional elements (identified in the rejection) to perform the claimed steps, amount to no more than mere instructions to apply the exception using a generic computer component. The additional elements of the instant underlying process, when taken in combination, together do not offer substantially more than the sum of the functions of the elements when each is taken alone. Mere instructions to apply an exception using a generic computer component cannot provide an inventive concept. By relying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible (See Alice, 134 S. Ct. at 2359 (use of a computer to create electronic records, track multiple transactions, and issue simultaneous instructions” is not an inventive concept). Hence, the claims are not patent eligible. Therefore, the Applicants’ arguments are not persuasive.
The claimed features including those recited on page 19 of the remarks such as “claim 1 specifies a particular hierarchically tiered structure of a distributed ledger, with specific tokens transferred by specific instructions under specific conditions, with the tiers using specific access permissions to provide improved privacy (as explained above). In other words, claim 1 does not recite only the idea of distributing tokens to accounts, but rather a specific way of achieving this in a distributed ledger environment. Regarding the second factor, the claim does not merely invoke computers as a tool, but rather provides a specific configuration of computing components that provides identified advantages over prior configurations” may be characterized as improvements in the abstract idea of executing the (settlement) instructions on the date the entitlement is due, using the additional elements as tools in their ordinary capacity to apply the abstract idea. An improvement in abstract idea is still abstract (SAP America v. Investpic *2-3 (“We may assume that the techniques claimed are “groundbreaking, innovative, or even brilliant,” but that is not enough for eligibility. Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013); accord buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1352 (Fed. Cir. 2014). By relying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible (See Alice, 134 S. Ct. at 2359 (use of a computer to create electronic records, track multiple transactions, and issue simultaneous instructions” is not an inventive concept). The Applicant’s claims do not recite sufficient subject matter to take them from being in the realm of what is encompassed as an abstract idea into patentable subject matter and fail to add significantly more to “transform” the nature of the claims. Therefore, the Applicants’ arguments are not persuasive.
For these reasons and those discussed in the rejection, the rejections under 35 USC § 101 are maintained.
Conclusion
5. The prior art made of record and not relied upon is considered pertinent to applicant's disclosure:
(a) Jayaram; Arjun et al. (US Pub. 2023/0262118 A1) discloses reconciliation and subscription-model permissions of data stored across independent ledger instances of a database. A system includes a resource manager coupled to a plurality of client accounts. The system includes an execution platform and a shared permissioned ledger comprising independent processing and storage nodes for executing data operations for the plurality of client accounts. The resource manager defines a settlement group comprising one or more client accounts and authenticates an observer node associated with the settlement group.
6. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice.
Any inquiry concerning this communication or earlier communications from the Examiner should be directed to Narayanswamy Subramanian whose telephone number is (571) 272-6751. The examiner can normally be reached Monday-Friday from 9:00 AM to 5:00 PM. If attempts to reach the examiner by telephone are unsuccessful, the examiner's supervisor, Abhishek Vyas can be reached at (571) 270-1836. The fax number for Formal or Official faxes and Draft to the Patent Office is (571) 273-8300.
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/Narayanswamy Subramanian/
Primary Examiner,
Art Unit 3691
November 5, 2025