DETAILED ACTION
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 .
Status of the Claims
The office action is being examined in response to the amendments submitted by the applicant on July 8, 2026.
Claims 1, 2, 13, 15, and 20 have been amended and are hereby entered.
Claims 3–12, 14, and 16–19 are as previously presented.
Claims 1–20 are pending and have been examined.
This action is made FINAL.
Response to Arguments
Applicant's arguments filed July 8, 2026 have been fully considered but they are not persuasive.
Applicant’s amendment to the specification correcting “Steams” to “Streams” at ¶ [0008] is acknowledged. The objection to the specification is withdrawn.
Applicant’s amendment to the claims correcting a grammatical mistake is acknowledged. The objection to the claims has been withdrawn.
Applicant requests that the nonstatutory double patenting rejection be held in abeyance until allowable subject matter is indicated. The Examiner acknowledges this request. The double patenting rejection is maintained and remains of record. A terminal disclaimer or amendment rendering the claims patentably distinct will be required before allowance.
The 112a rejection is withdrawn due to the applicant’s amendments.
Applicant’s amendments have addressed certain indefiniteness issues. Specifically: The inconsistent use of “economics,” “economic characteristics” (plural), and “economic characteristic” (singular) has been substantially addressed by amending to “economic characteristic” (singular) consistently. The prior rejections based on this inconsistency are withdrawn to the extent they have been corrected. The antecedent basis issue regarding “the economics” has been resolved by the amendments. This specific ground is withdrawn.
Applicant’s arguments filed July 8, 2026 have been fully considered but are not persuasive. The § 101 rejection is maintained with updated rationale addressing Applicant’s arguments, as set forth below. Applicant again argues that, like Example 39 (training a neural network), the present claims merely “involve” a judicial exception without “reciting” one, and are therefore eligible without further analysis.
The Examiner respectfully disagrees. The distinction between “reciting” and “merely involving” a judicial exception turns on whether the claim language itself sets forth or describes the judicial exception. In Example 39, the limitation “training the neural network in a first stage using the first training set” does not name or set forth any specific mathematical operations, formulas, or commercial activities — it merely references a technology (neural network training) that may rely upon mathematical underpinnings without expressing them. Here, by contrast, the claims expressly set forth the financial consolidation process:
“determining … a first rate for use in eliminating at least a subset of the plurality of financial instruments”; “generating … data indicative of a first financial instrument and computing the economic characteristic thereof”; “when the economic characteristic of the first financial instrument are not equal to the economic characteristic of the subset, determining a second rate and, based thereon, generating data indicative of a second financial instrument using the second rate, such that the economic characteristic of the generated first financial instrument in combination with the economic characteristic of the generated second financial instrument, are equal to the economic characteristic of the subset”
These limitations name and describe the specific commercial activity of portfolio compression/trade consolidation: determining a rate for replacement instruments, constructing those replacement instruments, ensuring economic equivalence between the replacements and the original portfolio, and substituting the replacements for the originals. The entire operative substance of the claims — determining rates, computing economics, ensuring equivalence, replacing instruments — is the commercial practice of “coupon blending” expressed in claim language.
Applicant again characterizes the claims as directed to “managing data storage capacity” and “minimizing memory usage on a computing device,” arguing this constitutes an improvement to computer functionality. Applicant relies on the amended “wherein” clause and ¶ [0053] of the specification. The Examiner respectfully disagrees.
(1) The specification does not frame the problem or solution as technological.
The specification consistently and exclusively describes the problem as a business problem and the solution as a business solution:
Citation
Language
¶ [0008]
“reducing notional amounts and/or line items (e.g., swaps) on a financial organization’s books”
¶ [0009]
“reducing notional amount and/or clearing line items associated with swaps that are on an organization’s books”
¶ [0025]
“the financial organization can reduce its capital requirements by reducing the number of line items on their books, and/or by reducing the gross notional of the swap portfolio”
¶ [0043]
“reduce a capital charge associated with a plurality of swaps”
¶ [0045]
“reduce one or more line items associated with the swap portfolios 222 and/or to reduce a gross notional value … to reduce a total capital charge incurred by the financial institution”
¶ [0053]
“reduce the number of line items associated with the swaps and/or reduce the gross notional corresponding to the portfolio of swaps”
¶ [0063]
“reduce a number of line items, reduce a gross notional amount associated with the plurality of swaps, or both”
At no point does the specification describe:
A technical problem with memory capacity, storage architecture, or data management systems;
Technical metrics of storage improvement (bytes saved, I/O operations reduced, query performance improved, throughput increased);
Any comparison between the claimed approach and conventional data compression or storage optimization techniques;
Any improvement to how the computer functions as a computer (faster processing, reduced latency, improved throughput, better memory utilization from a systems perspective).
The paragraph Applicant relies upon (¶ [0053]) states: “the compressed portfolio may be designed to reduce the number of line items associated with the swaps and/or reduce the gross notional corresponding to the portfolio of swaps, such as by compressing the plurality of swaps to a single swap or a pair of swaps.” This describes consolidation of financial positions (a business activity), not data compression in the technical sense.
(2) The claimed “reduction” in data is an inherent, trivial consequence of any record consolidation — not a technological improvement.
Replacing N database records with 1 or 2 records trivially results in “less data stored in memory.” This is a mathematical truism applicable to any consolidation activity, not a technological advancement:
A bookkeeper who combines ten ledger entries into two has “reduced data.”
A librarian who merges five catalog entries into one has “reduced data.”
An inventory manager who consolidates five SKU records into two has “reduced data.”
A human resources administrator who merges employee records upon reorganization has “reduced data.”
None of these constitute improvements to computer technology merely because the records happen to reside in digital storage.
The MPEP at § 2106.05(a) requires that the improvement be to the functioning of the computer itself or to another technology, not merely to the quantity of business data stored thereon. See:
TLI Communications LLC v. AV Automotive, LLC, 823 F.3d 607, 612 (Fed. Cir. 2016) (merely storing data in a classified manner did not improve the functioning of the computer);
Intellectual Ventures I LLC v. Capital One Bank, 792 F.3d 1363, 1370 (Fed. Cir. 2015) (organizing and manipulating information does not constitute a technological improvement);
RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1327 (Fed. Cir. 2017) (encoding and decoding data is not an improvement to computer functionality).
(3) The amended “wherein” clause does not change the analysis.
The amended language — “wherein the data indicative of the generated first financial instrument and, if generated, the data indicative of the second generated financial instrument is less than the data indicative of the subset, the amount of data stored in the non-transitory memory is thereby being reduced” — merely states the obvious: that fewer records constitute less data. This is a statement of an inherent result, not a recitation of a technological operation. It does not recite:
How the computer achieves the reduction from a technical standpoint;
A specific compression algorithm, encoding scheme, or data structure optimization;
An architectural change to the storage system;
Any technical mechanism beyond the natural consequence of having fewer records.
(4) The December 5, 2025 MPEP § 2106.04(d)(1) revision does not help Applicant.
The Examiner agrees that “the specification need not explicitly set forth the improvement” and must merely “describe the invention such that the improvement would be apparent to one of ordinary skill in the art.” However, the improvement apparent from this specification is a business improvement (reduced capital charges, fewer line items on books, reduced regulatory burden) — not a technological improvement to computer functioning. One of ordinary skill in the art of financial computing would read this specification and understand that the inventor solved a financial/commercial problem (excessive capital obligations from numerous open swap positions), implemented on a conventional computer.
This argument is not persuasive.
Applicant again argues that “the specific process by which the claimed compression is achieved is unconventional, and the Examiner has not shown otherwise.”
The Examiner reiterates the well-established distinction between novelty (§§ 102/103) and eligibility (§ 101):
SAP America, Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018): “We may assume that the techniques claimed are ‘[g]roundbreaking, innovative, or even brilliant,’ but that is not enough for eligibility.”
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.”
Chamberlain Group, Inc. v. Techtronic Indus. Co., 935 F.3d 1341, 1349 (Fed. Cir. 2019).
Whether the particular financial consolidation algorithm is novel is a different question from whether the claim as a whole is directed to patent-eligible subject matter. A new mathematical formula is still a mathematical concept; a new business method is still a method of organizing human activity. The “unconventionality” of the financial algorithm goes to the merits of the abstract idea itself, not to the additional elements.
Furthermore, swap portfolio compression is well-established in the financial industry. The specification itself acknowledges at ¶ [0027] that “a clearing house may monitor a portfolio of swaps to determine whether any of the total notional value of the swap portfolio may be canceled or otherwise offset … process an algorithm to determine a net value of a client’s swap portfolio.”
This argument is not persuasive.
Applicant again argues that “similar to the Federal Circuit’s reasoning in McRO … it is the incorporation of the rules in claim 1, not the use of a computer, that improves existing technologies.”
The Examiner respectfully disagrees. In McRO, Inc. v. Bandai Namco Games America, 837 F.3d 1299 (Fed. Cir. 2016):
The claimed rules (specific morph weight sets applied at specific sub-sequences of phonemes) produced a technological improvement — automated lip synchronization of animated characters that was previously performed manually by animators.
The rules improved the technological process of 3D facial animation rendering — a result achievable only through the specific claimed rules applied in a computing environment.
The court found the claims were not directed to the abstract idea of lip synchronization generally, but to a specific technological improvement in how computers generate animated facial expressions.
Here, by contrast:
The “rules” in claim 1 are financial consolidation rules (determining rates, computing economic characteristics, generating replacement financial instruments with equivalent economics). These are rules of finance and commerce, not rules that improve a technological process.
The claimed “improvement” is not to how the computer functions (processing speed, rendering capability, animation quality, network efficiency, memory architecture), but to a business outcome (fewer line items on books → reduced capital charges).
Unlike McRO, where specific rules enabled a new technological capability impossible without those rules, here the “rules” merely automate a financial consolidation already performed computationally by clearinghouses. See specification ¶ [0027].
This argument is not persuasive.
Applicant again cites these cases. The Examiner maintains the distinctions drawn in the prior Office action:
Finjan Inc. v. Blue Coat Systems, Inc., 879 F.3d 1299 (Fed. Cir. 2018): In Finjan, the claimed invention represented a paradigm shift in computer security technology — moving from code-matching virus scans (comparing code against a known database) to behavior-based analysis that could identify previously unknown malicious code by generating a “security profile.” This changed how the computer itself operated to detect threats — a fundamentally new technological approach to the technical problem of computer security.
Here, there is no paradigm shift in how computers store, manage, or process data from a technical perspective. The claims do not change the architecture of the storage system, introduce a new data structure, implement a new indexing methodology, or alter the computational approach to data management. The “flexibility” and “nuance” Applicant identifies relates to financial flexibility (compressing swap portfolios with different rates into economically equivalent replacements) — not technological flexibility in computer functionality. In Finjan, the improvement was to the computer’s ability to perform security operations differently and better. Here, the computer performs the same generic operations (store data, retrieve data, perform calculations, store results) — only the financial content of the operations differs.
DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014): In DDR Holdings, the claims addressed a problem unique to the Internet — the loss of website traffic when users clicked on third-party links. The solution (generating a composite web page maintaining the host’s “look and feel”) was a technical solution to a technical problem existing only in networked computing.
Here, the problem (excessive open swap positions and associated capital charges) is not unique to computers or the Internet. Swap portfolio compression is a business problem that existed before computers — financial institutions have always sought to consolidate positions and reduce capital charges. The computer is merely a tool to perform the consolidation more quickly.
Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016): In Enfish, the claims were directed to a specific improvement in database technology — a self-referential table that improved how the database functioned (reduced redundancy, increased flexibility of the data structure itself at an architectural level).
Here, the claims do not improve a data structure or database architecture. They do not recite a novel table structure, indexing scheme, or data organization methodology. They simply replace N financial records with 1–2 financial records based on financial calculations. The data structure remains the same before and after (records indicating financial instruments with rates and notional amounts) — only the quantity of records changes.
This argument is not persuasive.
Applicant argues the claims provide “a technology-based solution using algorithms and not an abstract idea-based solution implemented with generic technical components in a conventional way,” citing BASCOM Global Internet v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016).
In BASCOM, the Federal Circuit found eligibility based on a specific non-conventional technical arrangement — installing a filtering tool at a specific location (an ISP server) combined with customizable filtering that leveraged the ISP’s unique position in the network architecture. This was an architectural decision about where and how to deploy technology within a network that yielded technical advantages specific to that arrangement.
Here, there is no analogous non-conventional technical arrangement. The claims recite a processor coupled to memory — the most fundamental and generic computer architecture possible. The claims do not specify any particular arrangement of computing components that yields a technical advantage by virtue of that arrangement. The financial algorithm could execute on any computer, anywhere in any network, without any specific architectural significance.
This argument is not persuasive.
Applicant argues that (1) the combination of steps is not well-understood, routine, or conventional; (2) there are no prior art rejections; and (3) the Examiner has not properly supported the WURC finding under Berkheimer.
(1) Conflation of abstract idea with additional elements.
Applicant conflates the abstract idea limitations with the additional elements. Under the Alice/Mayo framework, the WURC analysis applies only to the additional elements — not to the abstract idea steps themselves. The “determining … a first rate,” “generating … data indicative of a first financial instrument,” “computing the economic characteristic,” and “determining a second rate” steps constitute the abstract idea itself and cannot supply their own inventive concept. See Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 221 (2014); RecogniCorp, 855 F.3d at 1327 (“Adding one abstract idea … to another abstract idea … does not render the claim non-abstract.”).
No matter how novel or non-obvious the financial consolidation algorithm may be, the advance lies entirely in the realm of abstract ideas. An abstract idea does not become less abstract merely because it is a novel abstract idea.
(2) Absence of prior art rejections.
The absence of rejections under §§ 102 or 103 does not establish that the additional elements provide “significantly more.” Diamond v. Diehr, 450 U.S. 175, 188–189 (1981); SAP America, 898 F.3d at 1163; MPEP § 2106.05(I) (“The search for an inventive concept is distinct from other patentability determinations.”).
(3) Berkheimer evidentiary support.
The Examiner has provided adequate Berkheimer-compliant evidentiary support for the WURC finding regarding the additional elements (not the abstract idea):
Option 1 — Applicant’s own specification:
Spec Citation
Generic Language
¶ [0031]
“Exchange computer system 100 may be implemented with one or more mainframe, desktop or other computers.” “one or more 64-bit processors.”
¶ [0034]
Modules “could be separate software components executing within a single computer, separate hardware components … or any combination thereof.”
¶ [0036]
“LAN 124 may implement one or more of the well-known LAN topologies and may use a variety of different protocols, such as Ethernet.”
¶ [0038]
“The connection may be via a modem, DSL line, satellite dish or any other device for connecting a computer device to the Internet.”
¶ [0041]
“computer-executable instructions stored on non-transitory computer-readable media.”
¶ [0042]
“the topology shown in FIG. 1 is merely an example and … the components shown in FIG. 1 may be connected by numerous alternative topologies.”
Option 2 — Court decisions:
Storing and retrieving information in memory: Versata Dev. Grp. v. SAP Am., Inc., 793 F.3d 1306, 1334 (Fed. Cir. 2015); MPEP § 2106.05(d)(II).
Performing repetitive calculations: OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015); Bancorp Services, L.L.C. v. Sun Life Assur. Co., 687 F.3d 1266, 1278 (Fed. Cir. 2012).
Receiving or transmitting data over a network: buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014); MPEP § 2106.05(d)(II).
Electronic recordkeeping: Alice, 573 U.S. at 225; MPEP § 2106.05(d)(II).
(4) The “buffer memory” argument is inapplicable.
Applicant again states: “Applicants have shown that the claims utilize computer technology, in an unconventional manner, e.g. by inserting a buffer memory between the incoming transactions and the transaction processing system in concert with logic which conditionally aggregates and then waits, until the occurrence of the event, to forward aggregated transactions to the transaction processing system, while allowing waiting transactions to be modified in the buffer.”
The Examiner again notes — for the third time — that none of this subject matter appears anywhere in the pending claims 1–20 or in Applicant’s specification. There is:
No “buffer memory” recited in any claim or disclosed in the specification;
No “incoming transactions” in the claims or specification;
No “conditionally aggregates and then waits” in the claims or specification;
No “occurrence of the event” in the claims or specification;
No “forward aggregated transactions to the transaction processing system” in the claims or specification;
No “allowing waiting transactions to be modified in the buffer” in the claims or specification.
This argument appears to be directed to an entirely different application or patent (possibly Bilski, Alice, or a related financial processing patent). It is wholly inapplicable to the present claims and disclosure. Applicant is respectfully but firmly reminded to direct arguments to the claims and specification actually under examination. The inclusion of this argument, verbatim and without modification, for a second time raises the concern that Applicant’s remarks have not been tailored to the present application.
This argument is not persuasive.
Applicant argues the claims are drawn to “a specifically configured computing system specially programmed to perform a specified technological function.”
The Examiner notes that all general-purpose computers are “specifically programmed” when they execute software. The fact that a processor executes instructions implementing the claimed financial algorithm does not render the claim eligible — this is the very definition of “mere instructions to apply the exception on a computer” that the Supreme Court rejected in Alice:
“Stating an abstract idea while adding the words ‘apply it with a computer’ simply combines [the] two steps [of Mayo], with the second step doing no more than requiring a generic computer.” Alice, 573 U.S. at 223–224.
See also Bancorp Services, 687 F.3d at 1278 (“To salvage an otherwise patent-ineligible process, a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not.”).
“Accessing first data … compressing the portfolio and storing second data” describes basic computer functions (read, compute, write) applied to financial data — not a specialized technological function that improves computer operation.
This argument is not persuasive.
Claim Interpretation
The following is a quotation of 35 U.S.C. 112(f):
(f) Element in Claim for a Combination. – An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.
The following is a quotation of pre-AIA 35 U.S.C. 112, sixth paragraph:
An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.
The claims in this application are given their broadest reasonable interpretation using the plain meaning of the claim language in light of the specification as it would be understood by one of ordinary skill in the art. The broadest reasonable interpretation of a claim element (also commonly referred to as a claim limitation) is limited by the description in the specification when 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is invoked.
As explained in MPEP § 2181, subsection I, claim limitations that meet the following three-prong test will be interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph:
(A) the claim limitation uses the term “means” or “step” or a term used as a substitute for “means” that is a generic placeholder (also called a nonce term or a non-structural term having no specific structural meaning) for performing the claimed function;
(B) the term “means” or “step” or the generic placeholder is modified by functional language, typically, but not always linked by the transition word “for” (e.g., “means for”) or another linking word or phrase, such as “configured to” or “so that”; and
(C) the term “means” or “step” or the generic placeholder is not modified by sufficient structure, material, or acts for performing the claimed function.
Use of the word “means” (or “step”) in a claim with functional language creates a rebuttable presumption that the claim limitation is to be treated in accordance with 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. The presumption that the claim limitation is interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is rebutted when the claim limitation recites sufficient structure, material, or acts to entirely perform the recited function.
Absence of the word “means” (or “step”) in a claim creates a rebuttable presumption that the claim limitation is not to be treated in accordance with 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph. The presumption that the claim limitation is not interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, is rebutted when the claim limitation recites function without reciting sufficient structure, material or acts to entirely perform the recited function.
Claim limitations in this application that use the word “means” (or “step”) are being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, except as otherwise indicated in an Office action. Conversely, claim limitations in this application that do not use the word “means” (or “step”) are not being interpreted under 35 U.S.C. 112(f) or pre-AIA 35 U.S.C. 112, sixth paragraph, except as otherwise indicated in an Office action.
The following claim limitation(s) in Claim 20 have been interpreted under 35 U.S.C. § 112(f) because they use the term “means” coupled with functional language without reciting sufficient structure to achieve the function. Furthermore, the generic placeholder “means” is not modified by sufficient structure, material, or acts for performing the claimed function.
Since the claim limitation(s) invoke 35 U.S.C. § 112(f), Claim 20 has been interpreted to cover the corresponding structure described in the specification that achieves the claimed function, and equivalents thereof.
Identification of Means-Plus-Function Limitations
Limitation 1: “means for determining”
Claimed Function: Determining, responsive to data stored in a non-transitory memory coupled therewith and indicative of a plurality of financial instruments, each characterized by a rate associated therewith, and collectively characterized by an economic characteristic, a first rate for use in eliminating at least a subset of the plurality of financial instruments, the first rate being determined therefrom.
Corresponding Structure: A computing device (e.g., computing device 244, clearinghouse module 140) comprising a processor executing the algorithm described in the specification at ¶¶ [0046]–[0049], [0053]–[0063], and Figures 4 and 7 (steps 410, 710), including determining a maximum fixed rate, a minimum fixed rate, a rounded average rate, a user-selected rate, or a current market rate from the plurality of swaps; and equivalents thereof.
Limitation 2: “means for generating”
Claimed Function: Generating, based on the first rate, data indicative of a first financial instrument and computing the economic characteristics thereof, and when the economics of the first financial instrument are not equal to the economic characteristics of the subset, determining a second rate and based thereon generating data indicative of a second financial instrument using the second rate, such that the economic characteristics of the generated first financial instrument in combination with the economic characteristics of the generated second financial instrument, are equal to the economic characteristic of the subset.
Corresponding Structure: A computing device (e.g., computing device 244, clearinghouse module 140) comprising a processor executing the algorithm described in the specification at ¶¶ [0049]–[0062], equations (1)–(7), and Figures 4 and 7 (steps 420–440, 720–760), including: calculating a notional value for the first remnant swap using the formula N(a) = (B − A·R(b)) / (R(a) − R(b)); calculating the notional of the second remnant swap as N(b) = ΣN − N(a); creating the first and second calculated swaps using the determined rates and notional amounts; and equivalents thereof.
Limitation 3: “means for replacing”
Claimed Function: Replacing, in the non-transitory memory, the data indicative of the subset with the data indicative of the generated first financial instrument and, if generated, the data indicative of the second generated financial instrument, wherein the amount of data stored in the memory is reduced.
Corresponding Structure: A computing device (e.g., computing device 244, clearinghouse module 140) comprising a processor coupled to a data repository (e.g., data repository 242, data repository 212) executing instructions to store/overwrite the data indicative of the original plurality of swaps with data indicative of the remnant swap(s), as described in the specification at ¶¶ [0045], [0051], [0063]–[0065], and Figure 2 (data repository 242 of clearinghouse computer system 240 communicating updated portfolio data to financial institution computing system 210 via network 205); and equivalents thereof.
If applicant does not intend to have this/these limitation(s) interpreted under 35 U.S.C. § 112(f), applicant may:
(1) Amend the claim limitation(s) to avoid interpretation under § 112(f) (e.g., by reciting sufficient structure to perform the claimed function); or
(2) Present a sufficient showing that the claim limitation(s) recite(s) sufficient structure to perform the claimed function so as to avoid interpretation under § 112(f).
Upon review of the specification, the Examiner has determined that sufficient corresponding structure has been disclosed for each of the means-plus-function limitations identified above. The corresponding structure for each limitation is a processor/computing device executing the specific algorithms set forth in the specification (Figures 4 and 7; equations (1)–(7); ¶¶ [0046]–[0065]).
If Applicant does not intend to have these limitation(s) interpreted under 35 U.S.C. § 112(f), Applicant may: (1) amend the claim limitation(s) to avoid interpretation under § 112(f) (e.g., by reciting sufficient structure); or (2) present a sufficient showing that the claim limitation(s) recite(s) sufficient structure.
Nonstatutory Double Patenting
The nonstatutory double patenting rejection is based on a judicially created doctrine grounded in public policy (a policy reflected in the statute) so as to prevent the unjustified or improper timewise extension of the “right to exclude” granted by a patent and to prevent possible harassment by multiple assignees. A nonstatutory double patenting rejection is appropriate where the claims at issue are not identical, but at least one examined application claim is not patentably distinct from the reference claim(s) because the examined application claim is either anticipated by, or would have been obvious over, the reference claim(s). See, e.g., In re Berg, 140 F.3d 1428, 46 USPQ2d 1226 (Fed. Cir. 1998); In re Goodman, 11 F.3d 1046, 29 USPQ2d 2010 (Fed. Cir. 1993); In re Longi, 759 F.2d 887, 225 USPQ 645 (Fed. Cir. 1985); In re Van Ornum, 686 F.2d 937, 214 USPQ 761 (CCPA 1982); In re Vogel, 422 F.2d 438, 164 USPQ 619 (CCPA 1970); and In re Thorington, 418 F.2d 528, 163 USPQ 644 (CCPA 1969).
A timely filed terminal disclaimer in compliance with 37 CFR 1.321(c) or 1.321(d) may be used to overcome an actual or provisional rejection based on a nonstatutory double patenting ground provided the reference application or patent either is shown to be commonly owned with this application, or claims an invention made as a result of activities undertaken within the scope of a joint research agreement. See MPEP § 717.02 for applications subject to examination under the first inventor to file provisions of the AIA as explained in MPEP § 2159. See MPEP §§ 706.02(l)(1) - 706.02(l)(3) for applications not subject to examination under the first inventor to file provisions of the AIA . A terminal disclaimer must be signed in compliance with 37 CFR 1.321(b).
The USPTO Internet website contains terminal disclaimer forms which may be used. Please visit www.uspto.gov/forms/. The filing date of the application in which the form is filed determines what form (e.g., PTO/SB/25, PTO/SB/26, PTO/AIA /25, or PTO/AIA /26) should be used. A web-based eTerminal Disclaimer may be filled out completely online using web-screens. An eTerminal Disclaimer that meets all requirements is auto-processed and approved immediately upon submission. For more information about eTerminal Disclaimers, refer to:
http://www.uspto.gov/patents/process/file/efs/guidance/eTD-info-I.jsp.
Claims 1-20 are rejected on the ground of obvious nonstatutory double patenting as being unpatentable over claims 1-21 of U.S. Patent No. 11625784. Although the claims at issue are not identical, it would have been obvious to one of ordinary skill in the art, before the effective filing date, to have modified the pending claims by replacing:
monitoring, automatically by a processor, data, stored in a non-transitory memory, indicative of a plurality of swaps of a portfolio, each characterized by a rate associated therewith which may be different from the associated rate of another of the plurality of swaps;
determining, by the processor, data indicative of a first remnant swap using the first rate and computing the economic characteristics thereof; and
determining, by the processor when the economics of the first remnant swap are not equal to the economic characteristics of the subset, data indicative of a second remnant swap using a second rate which may be different than the first rate, such that the economic characteristics of the first remnant swap alone, or if determined, in combination with the economic characteristics of the second remnant swap, are identical to the to the one or more economic characteristics collectively characterizing the swaps of the subset; with:
determining, by the processor responsive to data stored in a non-transitory memory coupled therewith and indicative of a plurality of financial instruments, each characterized by a rate associated therewith, and collectively characterized by an economic characteristic, a first rate for use in eliminating at least a subset of the plurality of financial instruments, the first rate being determined therefrom, and based thereon, generating data indicative of a first financial instrument and computing the economic characteristics thereof, and when the economics of the first financial instrument are not equal to the economic characteristics of the subset, determining a second rate and based thereon generated data indicative of a second financial instrument using the second rate, such that the economic characteristics of the generated first financial instrument in combination with the economic characteristics of the generated second financial instrument, are equal to the to the economic characteristic of the subset. Doing so would give the inventor broader coverage and hence greater protection.
Claim Objections
Claims 1, 13, and 20 are objected to because of the following informalities: “determining, by the processor”. Where it should state “determining, by a processor …”. Appropriate correction is required.
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 1-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to an abstract idea without significantly more.
Claims 1-20 are directed to a method, system, or system, which are one of the statutory categories of invention. Claim 20 with 112f claim interpretation as the corresponding structure disclosed in the specification, i.e., a processor/computing device executing software). Statutory category satisfied. (Step 1: YES).
The Examiner has identified independent system claim 13 as representative of the claimed invention for analysis. Claims 1 and 20 recite substantially similar limitations and are abstract for the same reasons.
Claim 13, as amended, recites the following limitations (with additional elements identified separately from the abstract idea limitations):
Additional Elements:
a processor
a first non-transitory memory device storing instructions
a second non-transitory memory coupled with the processor
Abstract Idea Limitations (Judicial Exception):
determine, responsive to data stored in a second non-transitory memory coupled with the processor and indicative of a plurality of financial instruments, each characterized by a rate associated therewith, and collectively characterized by an economic characteristic, a first rate for use in eliminating at least a subset of the plurality of financial instruments and, thereby, eliminate the data indicative thereof from the second non-transitory memory, the first rate being determined therefrom;
generate, based on the first rate, data indicative of a first financial instrument and computing the economic characteristic thereof, and when the economic characteristic of the first financial instrument are not equal to the economic characteristic of the subset, determine a second rate and based thereon generate data indicative of a second financial instrument using the second rate, such that the economic characteristic of the generated first financial instrument in combination with the economic characteristic of the generated second financial instrument, are equal to the economic characteristic of the subset; and
replace, in the second non-transitory memory, the data indicative of the subset with the data indicative of the generated first financial instrument and, if generated, the data indicative of the second generated financial instrument, wherein the data indicative of the generated first financial instrument and, if generated, the data indicative of the second generated financial instrument is less than the data indicative of the subset, the amount of data stored in the second non-transitory memory is thereby being reduced.
Judicial Exception Identified:
These limitations, under their broadest reasonable interpretation, recite:
(A) Certain Methods of Organizing Human Activity — Fundamental Economic Practices / Commercial Interactions:
The operative steps describe the well-established financial practice of swap portfolio compression (also known as “coupon blending” or “trade compression”):
Determining a rate for consolidating a portfolio of financial instruments that share economic characteristics;
Constructing one or two replacement financial instruments with equivalent economics (matching cash flows);
Substituting the replacement(s) for the originals to reduce the number of open positions.
This is a fundamental economic practice performed by clearinghouses, financial institutions, and portfolio managers in the ordinary course of financial management. See Applicant’s own specification at ¶ [0027]: “a clearing house may monitor a portfolio of swaps to determine whether any of the total notional value of the swap portfolio may be canceled or otherwise offset … process an algorithm to determine a net value of a client’s swap portfolio.”
(B) Mathematical Concepts:
The underlying operations — determining rates, computing economic characteristics (weighted averages, cash flow matching calculations), comparing economic equivalence, and deriving notional amounts — are mathematical calculations. The specification confirms this with explicit mathematical formulas:
Equation (1): N(a)+N(b)=∑Ni=A
Equation (2): N(a)R(a)+N(b)R(b)=∑Niri=B
Equation (3)/(7): N(a)=B−A⋅R(b)R(a)−R(b)
These are mathematical relationships recited functionally in the claims (determining rates, computing characteristics, ensuring economic equivalence).
The amended “wherein” clause — “wherein the data indicative of the generated first financial instrument and, if generated, the data indicative of the second generated financial instrument is less than the data indicative of the subset, the amount of data stored in the second non-transitory memory is thereby being reduced” — does not alter the Prong 1 analysis. This clause states an inherent mathematical consequence of the consolidation process (replacing N records with 1–2 records necessarily results in less data). It is a statement of result that flows naturally from the abstract financial consolidation, not a separate technological operation.
Claims 1 and 20 are also abstract for similar reasons. (Step 2A-Prong 1: YES. The claims recite an abstract idea)
This judicial exception is not integrated into a practical application. In particular, the claims recite the additional elements of: processor, first non-transitory memory device, second non-transitory memory. The computer hardware/software is/are recited at a high-level of generality (i.e., as a generic processor performing a generic computer function) such that it amounts no more than mere instructions to apply the exception using a generic computer component. Accordingly, these additional elements, when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea and are at a high level of generality. Therefore, claim 1 is directed to an abstract idea without a practical application. Claim 20 under § 112(f), the “means for” elements correspond to generic processor(s) executing algorithms. This is equivalent to “apply it on a computer.” Not integrated. (Step 2A-Prong 2: NO. The additional claimed elements are not integrated into a practical application)
The claims do not include additional elements that are sufficient to amount to significantly more than the judicial exception because, when considered separately and as an ordered combination, they do not add significantly more (also known as an “inventive concept”) to the exception. As discussed above with respect to integration of the abstract idea into a practical application, the additional element of using a computer hardware amounts to no more than mere instructions to apply the exception using a generic computer component. Mere instructions to apply an exception using a generic computer component cannot provide an inventive concept. See Applicant' s specification:
Summary Table
Additional Element
Spec Citation
Generic Language
Processor
¶ [0031]
“one or more mainframe, desktop or other computers”; “one or more 64-bit processors”
Non-transitory memory
¶ [0041]
“computer-executable instructions stored on non-transitory computer-readable media”
Network
¶ [0036]
“well-known LAN topologies”; “a variety of different protocols, such as Ethernet”
System architecture
¶ [0034], ¶ [0042]
“any combination thereof”; “merely an example”; “numerous alternative topologies”
Connectivity
¶ [0038]
“a modem, DSL line, satellite dish or any other device”
Implantation using general purpose or special purpose computing devices and MPEP 2106.05(f) where applying a computer as a tool is not indicative of significantly more as well as MPEP 2106.05(d), if applicable. Accordingly, these additional elements, do not change the outcome of the analysis, when considered separately and as an ordered combination. Thus, claims 1, 13, and 20 are not patent eligible. (Step 2B: NO. The claims do not provide significantly more)
Dependent claims further define the abstract idea that is present in their respective independent claims 1, 13, and 20 thus correspond to Certain Methods of Organizing Human Activity and hence are abstract for the reasons presented above. The dependent claims do not include any additional elements that integrate the abstract idea into a practical application or are sufficient to amount to significantly more than the judicial exception when considered both individually and as an ordered combination. Therefore, the dependent claims are directed to an abstract idea. Below is a table explaining the full analysis given to each dependent claim.
Dependent Claims Analysis
The dependent claims further define the abstract idea present in their respective independent claims and do not include any additional elements that integrate the abstract idea into a practical application or amount to significantly more:
Claim
Additional Limitation
§ 101 Effect
2, 15
“the each financial instrument of the subset of plurality of financial instruments comprises an interest rate swap”
Field-of-use limitation — merely narrows the type of financial instrument to interest rate swaps. Does not integrate or add significantly more. MPEP § 2106.05(h).
3, 16
“processor is located remotely from the non-transitory memory and coupled therewith via an electronic communications network”
Generic technological environment — remote networked storage is conventional computing architecture. WURC. Spec ¶ [0036] (“well-known LAN topologies”). Does not integrate or add significantly more.
4, 17
“triggered by a request received from a user”
Insignificant extra-solution activity — receiving a user input/request is well-understood, routine, conventional data gathering. See OIP Technologies, 788 F.3d at 1363; MPEP § 2106.05(g).
5, 18
“triggered when it is determined that replacement … will result in a reduction in a number of financial instruments”
Further narrows the abstract idea — a business rule/condition for when to perform the commercial consolidation. No additional element beyond the exception.
6
“determining a maximum of rates associated with the financial instruments of the subset”
Further narrows the abstract idea — selecting a maximum value from a data set is a mathematical operation / business judgment. No additional element.
7, 19
“determining another subset … all having the same associated rate and netting each thereof together … replacing … with data indicative of a third financial instrument”
Further narrows the abstract idea — netting financial instruments at the same rate is a fundamental economic/commercial practice (standard netting). The “replacing in the non-transitory memory” is the same WURC storage activity.
8
“determining … based on a current market rate for a quoted interest rate instrument having matching economics”
Further narrows the abstract idea — selecting a market rate for the blend is a commercial judgment / financial practice.
9
“receiving a user-entered rate value”
Insignificant extra-solution activity / WURC — receiving user input via a generic interface. See OIP Techs; MPEP § 2106.05(g).
10
“comparing a count of the number of financial instruments … to a criterion and determining the subset … based thereon”
Further narrows the abstract idea — applying a business rule (threshold comparison) to decide which instruments to consolidate. Mathematical comparison / commercial interaction.
11
“comparing the total notional amount … to a criterion and determining the subset … based thereon”
Same as claim 10 — business rule / abstract idea (threshold-based financial decision).
12
“the determining is performed periodically”
Mere instruction to perform the abstract idea on a schedule — does not add a technological feature. Selecting a particular time for data gathering is insignificant extra-solution activity. MPEP § 2106.05(g).
14
“compare at least one metric … to a specified criterion … responsive to the total notional amount meeting the criterion, replace the subset using the generated first financial instrument and the generated second financial instrument, the subset including one or more payer swaps and one or more receiver swaps”
Further narrows the abstract idea — applying a financial threshold/business rule. “One or more payer swaps and one or more receiver swaps” is a field-of-use refinement specifying the type of financial instrument.
Therefore, claims 1–20 are not patent-eligible under 35 U.S.C. § 101.
Conclusion
THIS ACTION IS MADE FINAL. Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a).
A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory action is mailed, and any nonprovisional extension fee (37 CFR 1.17(a)) pursuant to 37 CFR 1.136(a) will be calculated from the mailing date of the advisory action. In no event, however, will the statutory period for reply expire later than SIX MONTHS from the mailing date of this final action.
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Mike Anderson
Supervisor Patent Examiner
Art Unit 3693
/Mike Anderson/Supervisory Patent Examiner, Art Unit 3693
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