Notice of Pre-AIA or AIA Status
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
DETAILED ACTION
Status of Claims
This action is in reply to the amended claims filed on 1-9-2026 wherein: Claims 1, 14-16, and 18 are amended; Claim 16 is cancelled, Claims 2-13, 19, and 20 remain as original; and Claims 1-16, and 18-20 are currently pending and have been examined.
Priority
Acknowledgment is made of Applicants’ claim for a domestic priority date of 11-4-2022.
Patent-Ineligible Subject Matter - 35 U.S.C. § 101
Under 35 U.S.C. § 101, “[w]hoever 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.” 35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101 to include an implicit exception: “[l]aws of nature, natural phenomena, and abstract ideas” are not patentable. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014).
The Supreme Court, in Alice, reiterated the two-step framework previously set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), “for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Alice Corp., 573 U.S. at 217. The first step in that analysis is to “determine whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. If the claims are not directed to a patent-ineligible concept, e.g., an abstract idea, the inquiry ends. Otherwise, the inquiry proceeds to the second step where the elements of the claims are considered “individually and ‘as an ordered combination’” to determine whether there are additional elements that “‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 566 U.S. at 79, 78). This is “a search for an ‘inventive concept’ — i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’” Id. at 217–18.
The U.S. Patent and Trademark Office (the “USPTO”) published revised guidance on January 7, 2019, for use by USPTO personnel in evaluating subject matter eligibility under 35 U.S.C. § 101. 2019 REVISED PATENT SUBJECT MATTER ELIGIBILITY GUIDANCE, 84 Fed. Reg. 50 (Jan. 7, 2019) (the “2019 Revised Guidance”). That guidance revised the USPTO’s examination procedure with respect to the first step of the Mayo/Alice framework by (1) “[p]roviding groupings of subject matter that [are] considered an abstract idea”; and (2) clarifying that a claim is not “directed to” a judicial exception if the judicial exception is integrated into a practical application of that exception. Id. at 50.1
The first step, as set forth in the 2019 Revised Guidance (i.e., Step 2A), is, thus, a two-prong test. In Step 2A, Prong One, we look to whether the claim recites a judicial exception, e.g., one of the following three groupings of abstract ideas: (1) mathematical concepts; (2) certain methods of organizing human activity, e.g., fundamental economic principles or practices, commercial or legal interactions; and (3) mental processes. 2019 Revised Guidance, 84 Fed. Reg. at 54; see also MPEP §§ 2106.04(II)(A)(1), 2106.04(a). If so, we next determine, in Step 2A, Prong Two, whether the claim as a whole integrates the recited judicial exception into a practical application of that exception, i.e., whether the additional elements recited in the claim beyond the judicial exception, apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception. Id.; see also MPEP §§ 2106.04(II)(A)(2), 2106.04(d). Only if the claim (1) recites a judicial exception and (2) does not integrate that exception into a practical application do we conclude that the claim is “directed to” the judicial exception, e.g., an abstract idea. Id.; see also MPEP § 2106.04(II)(A)(2).
If the claim is determined to be directed to a judicial exception under Step 2A, we next evaluate the additional elements, individually and in combination, in Step 2B, to determine whether they provide an inventive concept, i.e., whether the additional elements or combination of elements amounts to significantly more than the judicial exception itself; only then, is the claim patent eligible. 2019 Revised Guidance, 84 Fed. Reg. at 56; see also MPEP § 2106.05.
Analysis:
STEP 1
Is the claim(s) directed to a process, machine, manufacture or composition of matter?
Claims 1-20 are all directed to a statutory category (e.g., a process, machine, manufacture, or composition of matter). The answer is YES. Therefore, the issue now is whether it is directed to a judicial exception without significantly more.
STEP 2
Step 2A(i): Does the Claim Recite a Judicial Exception?
Claims 1-16, and 18-20 are directed to a system for deriving synthetic assets and facilitating atomic transactions for same within exchange system that implements distributed architecture for trading of financial assets. The system has a processor that executes a first and second matching engine instance, receives a first request to execute a combo order transaction for a synthetic asset through the network interface circuit, where the combo order transaction including a first leg associated with a first matching engine instance and a second leg with a second matching engine instance. The processor has transitions the order book to a locked state based on the received first request to execute the combo order transaction. The processor identifies action to perform on the order book based on the received first request to execute the combo order transaction. The processor receives a ready to trade message from the first matching engine instance and/or the second matching engine instance through the network interface circuit. The processor performs the action on the order book and transition the order book to an unlocked state in response to receiving the ready to trade message.
From this we see that the claims do not recite the judicial exceptions of either natural phenomena or laws of nature. The next issue is whether it recites the judicial exception of an abstract idea. To answer this, we next determine whether it recites one of the concepts the Courts have held to be lacking practical application, viz. mathematical concepts2, certain methods of organizing human interactions3, including fundamental economic practices and business activities, or mental processes4.
The practice of asset exchange is a fundamental economic practice and/or commercial interaction. Thus, the invention is an example of a conceptual idea subject to the Supreme Court's "concern that patent law not inhibit further discovery by improperly tying up the future use of these building blocks of human ingenuity." See Alice, 573 U.S. at 216 (citations omitted). Thus the claims are directed to a certain method of organizing human activity.
Step 2A(ii): Judicial Exception Integrated into a Practical Application?
The 2019 Revised Guidance sets forth a non-exhaustive listing of considerations indicative that an additional element or combination of elements may have integrated a recited judicial exception into a practical application. 2019 Revised Guidance, 84 Fed. Reg. at 55; see also MPEP § 2106.04(d). In particular, the Guidance describes that an additional element may have integrated the judicial exception into a practical application if, inter alia, the additional element reflects an improvement in the functioning of a computer or an improvement to other technology or technical field. Id. At the same time, the Guidance makes clear that merely including instructions to implement an abstract idea on a computer, or merely using a computer as a tool to perform an abstract idea; adding insignificant extra-solution activity to the judicial exception; or only generally linking the use of the judicial exception to a particular technological environment or field are not sufficient to integrate the judicial exception into a practical application. Id.
The Examiner finds each of the limitations of representative claim 1 recites abstract ideas as Identified in Step 2A(i), supra, and none of the limitations integrate the certain method of organizing human activity into a practical application as determined under one or more of the MPEP sections cited above. The claim as a whole merely uses instructions to implement the abstract idea on a computer or, alternatively, merely uses a computer as a tool to perform the abstract idea.
Thus, on this record, Applicants have not shown eligibility under the guidance of Manual for Patent Examining Procedure section 2106.05(a) (“Improvements to the Functioning of a Computer or to Any Other Technology or Technical Field”) or section 2106.05(e) (“Other Meaningful Limitations”).
Step 2B – “Inventive Concept” or “Significantly More”
Evaluating representative claim 1 under step 2 of the Alice analysis, the Examiner concludes it lacks an inventive concept that transforms the abstract idea of asset ordering and exchanging into a patent-eligible application of that abstract idea. As evidence of the conventional nature of the recited invention and disclosed, the Examiner refers to paragraphs 34, 53 and 55, and Figures 1 and 3 of the published Specification. The Examiner finds the invention is well-understood, routine, and conventional. The generic computers described in the Specification are well-understood, routine, and conventional, at least because the Specification describes the computers in a manner that indicates they are sufficiently well-known that the Specification does not need to describe the particulars of such additional elements to satisfy 35 U.S.C. § 112 ¶ 1(a). See Berkheimer Memo5 § III.A.1. Thus, because the Specification describes the additional elements in general terms, without describing the particulars, the Examiner concludes the claim limitations may be broadly but reasonably construed as reciting conventional computer components and techniques, particularly in light of Applicants’ Specification.6
Dependent claim 2 adds the additional limitation of deriving the first combo order based on a difference between the first asset type and the second asset type. This is insignificant extra-solution activity because this is activity incidental to the primary process or product that is merely a nominal or tangential addition to the claim. See 2019 Revised Guidance, 55 n.31; see also MPEP § 2106.05(g). As explained by the Supreme Court, the addition of insignificant extra-solution activity does not amount to an inventive concept, particularly when the activity is well-understood or conventional. Parker vs. Flook, 437 U.S. 584, 588-89, 198 USPQ 193, 196 (1978).
Dependent claim 3 adds the additional limitation of the first asset type being a debt security with a first yield value and a first maturity period, and the second asset type being a debt security with a second yield value and a second maturity period. This is nonfunctional descriptive material because it is a mere arrangement of data. Descriptive material is nonstatutory when claimed as descriptive material per se, 33 F. 3d at 1360, 31 USPQ2d at 1759. See MPEP §2011.05(II).
Dependent claim 4 adds the additional limitation of storing a matching engine instance lookup in the memory. This is also insignificant extra-solution activity.
Dependent claim 5 adds the additional limitation of each of the entries including a present value and a yield value. This is also nonfunctional descriptive material.
Dependent claim 6 adds the additional limitation of determining a difference between the yield value associated with the first matching engine instance and the yield value associated with the second matching engine instance. Determining is a mental process because other than generic computer components, nothing in the claim element precludes the step from practically being performed as in the human mind or with paper and pencil. See Planet Bingo, 961 F. Supp. 2d at 851. See also Guidance, 84 Fed. Reg. at 52.
Dependent claim 7 adds the additional limitation of wherein the first combo order provisioning message includes the identifier of the first matching engine instance and the identifier of the second matching engine instance of the plurality of matching engine instance identifiers.
Dependent claim 8 adds the additional limitation of storing a combo order configuration lookup in the memory. This is also insignificant extra-solution activity.
Dependent claim 9 adds the additional limitation of the first combo order provisioning message including an identifier of the synthetic asset, the identifier of the synthetic asset being a value encoded within a predetermined number of bits. This is also nonfunctional descriptive material.
Dependent claim 10 adds the additional limitation of outputting a combo order configuration message to the first and second matching engine instances. This is also insignificant extra-solution activity.
Dependent claim 11 adds the additional limitation of the combo order configuration message output to the first and second matching engine instances being configured to cause the first and second matching engine instances to store in a memory the identifier of the group of matching engine instances within a lookup table. This is also insignificant extra-solution activity.
Dependent claim 12 adds the additional limitation of the first combo order provisioning message output by the at least one processor including a first value that represents a last known state of the first matching engine instance and a second value that represents a last known state of the second matching engine instance. This is also nonfunctional descriptive material.
Dependent claim 13 adds the additional limitation of the identifier of the derived first combo order being a value encoded within an array of bytes. This is also nonfunctional descriptive material.
Dependent claim 14 adds the additional limitation of outputting the first combo order provisioning message to a third matching engine instance. This is also insignificant extra-solution activity.
Dependent claim 15 adds the additional limitation of outputting the first combo order provisioning message as a packet to the first matching engine instance and the second matching engine instance via the network interface circuit. This is also insignificant extra-solution activity.
Dependent claim 16 adds the additional limitation of the packet being implemented as a Transmission Control Protocol (TCP) packet. This is also nonfunctional descriptive material.
Dependent claim 18 adds the additional limitation of the common data channel being an Internet Protocol (IP) multicast group, and wherein the packet is an Internet Protocol (IP) multicast packet. This is also nonfunctional descriptive material.
Dependent claim 19 adds the additional limitation of the first combo order provisioning message being output to a third matching engine instance. This is also insignificant extra-solution activity.
Dependent claim 20 adds the additional limitation of receiving an order submitted acknowledgement message from at least the third matching engine instance in response to causing the output of the first combo order provisioning message. This is also insignificant extra-solution activity.
Conclusion of Law
The examiner concludes that the claims do not provide an inventive concept because the additional elements recited in the claims do not provide significantly more than the recited judicial exception. From these determinations the examiner further notes that the claims do not recite an improvement to the functioning of the computer itself or to any
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other technology or technical field, a particular machine, a particular transformation, or other meaningful limitations. From this the examiner finds the claims are directed to a certain method of organizing human activity without significantly more.
Response to Arguments
Applicant’s arguments with respect to claims 1-16, and 18-20 have been fully considered by the Examiner. Applicant’s arguments with respect to the rejection of claims 1-16, and 18-20 under 35 USC 101 have been fully considered by the Examiner. However, the Examiner does not find the Applicant’s arguments persuasive, and therefore the rejections of claims 1-16, and 18-20 under 35 USC 101 are maintained.
The Applicant argues that under Prong 1 of Step 2A of the 2019 PEG, the claims do not recite a judicial exception because the claims are directed to a system that mitigates the technical problem of slippage that occurs with combo orders in distributed systems due to latency and therefore do not belong to Certain Methods of Organizing Human activity such as fundamental economic principles and practices or commercial interaction. The Applicant further states on pages 7-9 of their Remarks, that the limitations of the independent claims under Prong 2 of Step 2A are indicative of integration into a practical application because they provide improvements in technology, including unconventional computer operations, to avoid the technical problem of slippage for a combo order. Applicant further cites para. 0028 of the specification and states on page 9 of their Remarks that the exchange system implements a combo order protocol that allows for combo orders to be provisioned across a plurality of distributed ME instances that both maintain an order book during a normal state and then transition to a combo order transaction state that guarantees zero price slippage for the combo order and minimizes latencies. Applicant also further states on page 9 of their Remarks that analysis under Step 2B of the 2019 PEG is moot, but Applicant reserves the right to present evidence and argument.
Examiner respectfully disagrees with Applicant’s argument that the claimed limitations do not recite any of the groupings of abstract ideas. Under Prong 1 of the 2019 PEG, the claims do fall under the abstract idea of Certain Method of Organizing Human Activity. If a claim limitation, under its broadest reasonable interpretation, covers fundamental economic principles or practices or commercial interactions, but for the recitation of additional elements including generic computer components, then it falls within the “Certain Methods of Organizing Human Activity” grouping of abstract ideas. Under the broadest reasonable interpretation, the claims recite fundamental economic principles or practices and commercial interactions. The practice of asset exchange is a fundamental economic practice and/or commercial interaction.
Examiner respectfully disagrees with Applicant’s argument that the claimed limitations are indicative of integration into a practical application under Prong 2 of Step 2A of the PEG. Using a computer processor to: execute a first and second matching engine instance, receive a first request to execute a combo order transaction for a synthetic asset including a first leg associated with a first matching engine instance and a second leg with a second matching engine instance, transition the order book to a locked state, identify actions to perform on the order book, receive a ready to trade message from the first and/or second matching engine instances, perform the action on the order book, transition the order book to an unlocked state; is nothing more than executing instructions to apply the exception to a computer. This is interpreted by the Examiner as using a computer as a tool to perform an abstract idea (See MPEP 2106.05(f)). The additional elements of are recited at a high level of generality such that it amounts to no more than mere instructions to apply the exception using generic computer components (See MPEP 2106.05(f)). There is no improvement to the claimed computer elements, or to any other technology or technical field. Therefore, the claimed limitations do not meet the criteria or considerations as indicative of integration into a practical application. Furthermore, mere instructions to apply an exception using a generic computer component cannot provide an inventive concept under Step 2B. Therefore, the rejections of the claims pursuant to 35 USC 101 are maintained.
Conclusion
Applicant's amendment necessitated the new ground(s) of rejection presented in this Office action. Accordingly, THIS ACTION IS MADE FINAL. See MPEP § 706.07(a). Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a).
A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory action is mailed, and any nonprovisional extension fee (37 CFR 1.17(a)) pursuant to 37 CFR 1.136(a) will be calculated from the mailing date of the advisory action. In no event, however, will the statutory period for reply expire later than SIX MONTHS from the mailing date of this final action.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to Paul Schwarzenberg whose telephone number is (313) 446-6611. The examiner can normally be reached on Monday-Thursday (7:30-6:30).
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.
If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Christine Behncke, can be reached on (571) 272-8103. The fax phone number for the organization where this application or proceeding is assigned is (571) 273-8300.
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/PAUL S SCHWARZENBERG/Primary Examiner, Art Unit 3695
8/28/2026
1 The MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) incorporates the revised guidance and subsequent updates at Section 2106 (9th ed. Rev. 10.2019, rev. June 2020)..
2 See e.g., Gottschalk v. Benson, 409 U.S. 63, 71-72 (1972); Bilski v. Kappos, 561 U.S. 593, 611 (2010); Mackay Radio & Telegraph Co. v. Radio Corp. of Am., 306 U.S. 86, 94 (1939); SAP America, Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018).
3 See e.g., Bilski, 561 U.S. at 628; Alice, 573 U.S. at 219-20; Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed Cir. 2014); Smart Systems Innovations, LLC v. Chicago Transit Authority, 873 F.3d 1364, 1383 (Fed. Cir. 2017); In re Marco Guldenaar Holding B. V., 2018 WL 6816331 (Fed. Cir. 2018).
4 See e.g., Benson, 409 U.S. at 67; CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1371-1372 (Fed. Cir. 2011); Intellectual Ventures I LLCv. Symantec Corp., 838 F.3d 1307, 1318 (Fed. Cir. 2016).
5 Robert W. Bahr, Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.), USPTO 3 (2018) (available at https://www.uspto.gov/ sites/default/files/documents/memo-berkheimer-20180419.PDF) (explaining that a specification that describes additional elements “in a manner that indicates that the additional elements are sufficiently well-known that the specification does not need to describe the particulars of such additional elements to satisfy 35 U.S.C. § 112(a)” can show that the elements are well understood, routine, and conventional).
6 Claim terms are to be given their broadest reasonable interpretation, as understood by those of ordinary skill in the art and taking into account whatever enlightenment may be had from the Specification. In re Morris, 127 F.3d 1048, 1054 (Fed. Cir. 1997).
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