DETAILED ACTION
Continued Examination Under 37 CFR 1.114
A request for continued examination under 37 CFR 1.114, including the fee set forth in 37 CFR 1.17(e), was filed in this application after final rejection. Since this application is eligible for continued examination under 37 CFR 1.114, and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114. Applicant's submission filed on February 12, 2026 has been entered.
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 February 12, 2026.
Claims 1, 13, and 20 have been amended and are hereby entered.
Claims 2-12 and 14-19 are originally presented.
Claims 1-20 are pending and have been examined.
This action is made NON-FINAL.
The examiner would like to note that this application is now being handled by examiner Michael Anderson.
Response to Arguments
Applicant's arguments filed February 12, 2026 have been fully considered but they are not persuasive.
Applicant' s arguments regarding the 35 U5C 101 rejection of the claims (Remarks, pages 7-23) have been fully considered, however they are not persuasive.
With regard to the limitations of claims 1-20, Applicant argues that the claims are patent eligible under 35 USC 101 because they meet the analysis set forth by the Supreme Court. The examiner respectfully disagrees. Applicant argues that “while the present claims may involve a judicial exception, they do not recite a judicial exception and are therefore eligible without further analysis,” citing the August 4, 2025 Memorandum and analogizing to Example 39 (training a neural network).
The Examiner respectfully disagrees. The distinction drawn in the cited memorandum between claims that “recite” versus “merely involve” a judicial exception turns on whether the claim “set[s] forth or describe[s] any mathematical relationships, calculations, formulas, or equations using words or mathematical symbols” or recites specific commercial/legal activities. Here, unlike Example 39’s “training the neural network in a first stage using the first training set” — which does not set forth the mathematical underpinnings — the present claims expressly recite the commercial activity itself:
“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 characteristics thereof”
“when the economics of the first financial instrument are not equal to the economic characteristics of the subset, determining a second rate”
“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”
These limitations explicitly recite the commercial/financial activity of consolidating financial instruments based on economic equivalence — the very definition of swap portfolio compression as practiced by clearinghouses and financial institutions. The claims do not merely reference financial instruments in passing; the entire operative substance of the claims is the financial consolidation process. The claims set forth the rules for constructing replacement financial instruments with matching economics — this is the commercial practice of trade compression itself, expressed in claim language.
This is more analogous to Example 47 (which was found to recite a judicial exception by naming specific processes) than to Example 39. The claims here name the specific commercial operations: determining rates for financial instruments, computing economic characteristics, comparing economics, generating replacement financial instruments with equivalent economics. These are not generic steps that merely “involve” a commercial practice — they are the commercial practice.
Accordingly, this argument is not persuasive.
Applicant repeatedly characterizes the claims as being directed to “managing data storage capacity” and “minimizing memory usage on a computing device,” arguing this constitutes a technological improvement to computer functionality. Applicant cites ¶ [0053] of the specification and asserts that “one of ordinary skill in the art would recognize that reducing an amount of data storage consumed by a set of data via the claimed compression, wherein the data size is reduced without compromising the information represented thereby, improves the system which stores that data by reducing a burden on the resources thereof.”
The Examiner respectfully disagrees for the following reasons:
(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:
¶ [0008]: “it would be desirable to provide a way to blend coupons for 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.”
¶ [0043]: “promise more interesting capital efficiencies to allow institutions to reduce a capital charge associated with a plurality of swaps.”
¶ [0053]: “reduce the number of line items associated with the swaps and/or reduce the gross notional corresponding to the portfolio of swaps.”
¶ [0064]: “reduce capital requirements associated with a portfolio of swaps by reducing gross notional amounts and/or the number of line items associated with the swaps.”
At no point does the specification describe:
A technical problem with memory capacity, storage architecture, or data management;
Technical metrics of storage improvement (bytes saved, I/O reduction, query performance);
Any comparison between the claimed approach and conventional data compression or storage optimization techniques;
Any improvement to how the computer functions as a computer (e.g., faster processing, reduced latency, improved throughput, better memory utilization from a systems perspective).
The specification at ¶ [0053] — which Applicant relies upon — states that “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. Reducing line items on “books” is not the same as improving memory architecture or data storage technology.
(2) The claimed “reduction” in data is an inherent, trivial consequence — not a technological improvement.
Replacing N database records with 1 or 2 records trivially results in “less data stored in memory.” This is not a technological advancement — it is a mathematical truism applicable to any consolidation activity. A bookkeeper who combines five ledger entries into two has “reduced the amount of data” on the ledger. A librarian who merges five catalog entries into one has “reduced data.” This does not make bookkeeping or library science a technological improvement to paper or computer systems.
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 data stored thereon. Reducing the quantity of records in a database by performing a business consolidation does not improve how the database operates, how memory is managed, how processors execute instructions, or any other technical characteristic of the computer system. 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).
(3) The revised MPEP § 2106.04(d)(1) does not help Applicant.
Applicant cites the December 5, 2025 revision stating that “the specification need not explicitly set forth the improvement” but “must describe the invention such that the improvement would be apparent to one of ordinary skill in the art.” The Examiner agrees with this standard but concludes it is not met here. The improvement apparent from the 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 not read this specification and conclude that the inventor solved a technical computing problem; rather, they would recognize the specification describes a financial/commercial solution to a financial/commercial problem, implemented on a conventional computer.
Accordingly, this argument is not persuasive.
Applicant asserts that “the specific process by which the claimed compression is achieved is unconventional, and the Examiner has not shown otherwise, contrary to the conventional compression techniques called out by the Voit Techs case.”
The Examiner notes several points:
(1) The term “unconventional” conflates two distinct inquiries. Whether the financial consolidation algorithm is novel (§ 102/103 analysis) is a different question from whether the claim as a whole is directed to patent-eligible subject matter (§ 101 analysis). See 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.”); Chamberlain Group, Inc. v. Techtronic Indus. Co., 935 F.3d 1341, 1349 (Fed. Cir. 2019) (“The novelty of the combination of steps is not relevant where each step merely requires well-understood, routine, conventional activity already engaged in by the scientific community.”).
(2) The Examiner’s citation to Voit Technologies was for the proposition that claims reciting data compression techniques — even advanced ones — are not automatically patent-eligible merely because they reduce data size. In Voit, the claims recited “advanced image data compression techniques that provided rapid transmission of higher resolution digital images,” yet were found ineligible because they employed “generic computer components performing conventional compression techniques.” Here, while Applicant’s financial consolidation algorithm may differ from image compression, the principle applies equally: using a generic computer to perform a process that results in fewer data records (whether through image compression or financial record consolidation) does not constitute a technological improvement to the computer.
(3) The “unconventionality” of the financial consolidation algorithm goes to the merits of the abstract idea itself, not to the additional elements. Under the Alice/Mayo framework, an abstract idea does not become less abstract merely because it is a novel abstract idea. A new mathematical formula is still a mathematical concept; a new business method is still a method of organizing human activity.
Accordingly, this argument is not persuasive.
Applicant argues that “similar to the Federal Circuit’s reasoning in McRO … it is the incorporation of the rules in claim 1, not the user of a computer, that improves existing technologies.”
The Examiner respectfully disagrees. In McRO, the Federal Circuit found patent eligibility because the claimed rules (specific morph weight sets applied at specific sub-sequences of phonemes) produced a technological improvement — namely, automated lip synchronization of animated characters that was previously performed manually by animators. The rules in McRO improved the technological process of 3D facial animation rendering. The court specifically noted that 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), but to a business outcome (fewer line items on books → reduced capital charges).
There is no analogue to McRO’s “previously manual process that is now automated in an improved way” — swap portfolio compression was already being performed by computers (clearinghouse modules — 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”).
Accordingly, this argument is not persuasive.
Applicant argues the claims are similar to Finjan Inc. v. Blue Coat Systems, Inc., 879 F.3d 1299 (Fed. Cir. 2018), because they “enable more flexible and nuanced management for data storage.”
The Examiner respectfully disagrees. 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 was a fundamentally new technological approach to the technical problem of computer security that changed how the computer itself operated to detect threats.
Here, by contrast:
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 (the ability to compress 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) — it is only the financial content of the operations that differs.
Accordingly, this argument is not persuasive.
Applicant cites DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014) and Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016).
In DDR Holdings, the Federal Circuit found patent eligibility because the claims addressed a problem unique to the Internet — the loss of website traffic when users clicked on third-party links. The claimed solution (generating a composite web page maintaining the host’s “look and feel”) was a technical solution to a technical problem that existed only in the context of networked computing.
In Enfish, the claims were directed to a specific improvement in database technology — a self-referential table for a computer database that improved how the database functioned (reduced redundancy, increased flexibility of the data structure). The improvement was to the data structure itself and how the computer stored and retrieved data at an architectural level.
Here, neither case is analogous:
Unlike DDR Holdings, the problem addressed by the present claims is not unique to computers or the Internet. Swap portfolio compression (reducing line items and gross notional) is a business problem that existed before computers — financial institutions have always sought to consolidate positions and reduce capital charges. The computer is merely used as a tool to perform the consolidation more quickly.
Unlike Enfish, the present claims do not improve a data structure or database architecture. The claims 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 before and after compression is the same (records indicating financial instruments with rates and notional amounts) — only the quantity of records changes.
Accordingly, this argument is not persuasive.
Applicant argues that “the claims contain several limitations not directed to a fundamental economic practice, particularly that a portfolio of swaps stored in the memory of the financial institution computing system are compressed into the first remnant swap and if determined … the second remnant swap.”
The Examiner notes that the presence of additional elements (processor, memory) alongside the abstract idea does not mean the claim fails to “recite” a judicial exception. Under Prong 1 asks whether the claim recites (i.e., sets forth or describes) a judicial exception — not whether every single word of the claim is part of the exception. Here, the operative steps — determining a rate, generating replacement financial instruments with equivalent economics, replacing the original instruments — constitute the fundamental economic practice of trade compression / portfolio consolidation. This is a well-established commercial practice performed by clearinghouses. See Applicant’s own specification at ¶ [0027] (describing how “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”).
Applicant further argues that “the claims cannot be performed in the human mind, or by using pen and paper.” The Examiner notes that the rejection is not based on the “mental processes” grouping but on “certain methods of organizing human activity.” Regardless, the financial calculations claimed (determining rates, computing weighted averages, comparing economics) can be and historically have been performed by human traders and accountants using pen, paper, and simple calculators — as the specification itself acknowledges occurred in the pre-SEF bespoke market (¶ [0028]).
Accordingly, this argument is not persuasive.
Applicant argues the claims are “integrated into a practical application of managing data storage capacity in a clearing house computing system” and that the claims “do not attempt to monopolize the idea but rather only the improvement as applied to a specific technology, that of a clearing house computing system which stores a portfolio of swaps.”
The Examiner respectfully disagrees:
(1) Characterizing the claims as directed to “managing data storage capacity” is Applicant’s recharacterization of the claims, not what the claims actually recite. The claims recite: determining rates for financial instruments, computing economic characteristics of financial instruments, generating replacement financial instruments with equivalent economics, and replacing the original financial instrument data with the replacement data. This is the financial practice of portfolio compression. The addition of “wherein the amount of data stored in the memory is reduced” is a statement of an inherent result, not a recitation of a technological storage management technique.
(2) Limiting the abstract idea to a “clearing house computing system” is a field-of-use limitation under MPEP § 2106.05(h). Confining an abstract concept to a particular technological environment does not integrate the exception into a practical application. See Intellectual Ventures I LLC v. Capital One Bank, 792 F.3d 1363, 1366 (Fed. Cir. 2015); FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1094–95 (Fed. Cir. 2016).
(3) Applicant’s assertion that the claims “do not attempt to monopolize the idea” does not render the claims eligible. The Supreme Court in Alice rejected this argument, noting that the § 101 inquiry is not a preemption analysis per se. Alice, 573 U.S. at 223 (“the absence of complete preemption does not demonstrate patent eligibility”).
(4) Applicant argues the claims recite “a technical solution to a technological problem associated with the functioning of a financial institution computing system.” However, the “problem” as described in the specification is not a malfunction or limitation of the computer system — it is a business problem (too many line items → excessive capital charges under regulatory requirements). The “solution” is not an improvement to how the computer processes, stores, or retrieves data from a technical standpoint — it is a financial consolidation that happens to result in fewer database records. The computer functions identically before and after the claimed method; it simply stores different (fewer) records representing financial positions.
Accordingly, this argument is not persuasive.
Applicant argues that the claims recite “significantly more” because (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) Regarding the WURC analysis:
The Examiner has properly identified the additional elements (i.e., the elements beyond the judicial exception) and assessed whether those additional elements, individually and in combination, amount to significantly more. The additional elements are: a generic processor, a non-transitory memory, and the generic acts of storing/replacing data in memory. These are the elements assessed for WURC — not the abstract idea steps themselves.
Applicant conflates the abstract idea limitations with the additional elements. The “determining … a first rate,” “generating … data indicative of a first financial instrument,” “computing the economic characteristics,” and “determining a second rate” steps constitute the abstract idea itself — they are not “additional elements” to be evaluated for WURC. Under the Alice/Mayo framework, the abstract idea cannot supply its own inventive concept. No matter how much of an advance in the finance field the claims recite, the advance lies entirely in the realm of abstract ideas, with no plausibly alleged innovation in the non-abstract application realm.
(2) Regarding the absence of prior art rejections:
The absence of a rejection under §§ 102 or 103 does not establish that the additional elements provide “significantly more.” As the Federal Circuit has stated, “the novelty of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the § 101 categories of possibly patentable subject matter.” Diamond v. Diehr, 450 U.S. 175, 188–189 (1981); see also SAP America, 898 F.3d at 1163 (“Even assuming [the techniques] are ‘[g]roundbreaking, innovative, or even brilliant,’ … that is not enough for eligibility.”); MPEP § 2106.05(I) (“The search for an inventive concept is distinct from other patentability determinations, e.g. novelty under 35 U.S.C. 102 … [and] should not be confused with a novelty or non-obviousness determination.”).
(3) Regarding Berkheimer evidentiary support:
The Examiner has provided Berkheimer-compliant evidentiary support for the WURC finding. Specifically, the Examiner cited Applicant’s own specification (option 1 under MPEP § 2106.07(a)(III)):
¶ [0031]: “Exchange computer system 100 may be implemented with one or more mainframe, desktop or other computers.”
¶ [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.”
¶ [0038]: “The connection may be via a modem, DSL line, satellite dish or any other device.”
¶ [0041]: “computer-executable instructions stored on non-transitory computer-readable media.”
¶ [0042]: “the topology shown in FIG. 1 is merely an example.”
Additionally, the Examiner cites court decisions (option 2) recognizing that storing and retrieving information in memory, performing repetitive calculations, and receiving/transmitting data over a network are WURC. See MPEP § 2106.05(d)(II) (citing Versata Dev. Grp. v. SAP Am., Inc., 793 F.3d 1306; OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359; buySAFE, Inc. v. Google, Inc., 765 F.3d 1350).
The Examiner’s Berkheimer obligation extends to the additional elements — not to the abstract idea steps. The Examiner is not required to demonstrate that the financial consolidation algorithm is WURC (that is the abstract idea, not an additional element).
(4) Regarding Applicant’s “buffer memory” argument:
Applicant 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 notes that none of this subject matter appears in the pending claims or specification. There is no “buffer memory,” no “incoming transactions,” no “conditionally aggregates and then waits,” no “occurrence of the event,” and no “forward aggregated transactions to the transaction processing system” recited anywhere in claims 1–20 or the specification. This argument appears to be directed to a different application or patent entirely and is therefore wholly inapplicable to the present claims.
Accordingly, this argument is not persuasive.
Applicant argues that the claims are drawn to “a specifically configured computing system specially programmed to perform a specified technological function (e.g., accessing first data comprising a portfolio stored in a memory device, compressing the portfolio and storing second data comprising the portfolio in a compressed form).”
The Examiner notes that all general-purpose computers are “specifically programmed” when they execute any 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. See Alice, 573 U.S. at 223–224 (“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.”); see also Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada, 687 F.3d 1266, 1278 (Fed. Cir. 2012) (“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.”).
Furthermore, “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.
Accordingly, this argument is not persuasive.
Applicant cites Bascom Global Internet v. AT&T Mobility LLC, 2016 (Fed. Cir.) for the proposition that 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.”
In BASCOM, the Federal Circuit found that the specific technical arrangement — installing a filtering tool at a specific location (an ISP server) combined with customizable filtering that leveraged the ISP’s position in the network architecture — represented a non-conventional and non-generic arrangement of known elements. 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 “algorithm” is a financial algorithm that could run on any computer, anywhere in any network, without any specific architectural significance.
Accordingly, this argument is not persuasive.
Specification
The disclosure is objected to because of the following informalities: ¶ [0008]: “Steams of future payments must be valued to determine a current market price.” Should read “Streams.”
Appropriate correction is required.
Claim Objection
The examiner notes the following claim objections:
Claims 1, 13, and 20 each recite: “are equal to the to the economic characteristic of the subset” The phrase “the to the” is grammatically nonsensical but looks to be a typographical mistake.
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]).
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 Rejections - 35 USC § 112
The following is a quotation of the first paragraph of 35 U.S.C. 112(a):
(a) IN GENERAL.—The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.
The following is a quotation of the first paragraph of pre-AIA 35 U.S.C. 112:
The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.
Claim 1, 13, and 20 (and dependent claims 2-4, 6-7, 9-11, 13-14, 16-18, 20-21 due to dependency) are rejected under 35 U.S.C. 112(a) or 35 U.S.C. 112 (pre-AIA ), first paragraph, as failing to comply with the written description requirement. The claim(s) contains subject matter which was not described in the specification in such a way as to reasonably convey to one skilled in the relevant art that the inventor or a joint inventor, or for pre-AIA the inventor(s), at the time the application was filed, had possession of the claimed invention. “wherein the amount of data stored in the memory is reduced” is new matter. The limitation “wherein the amount of data stored in the memory is reduced” characterizes the invention as achieving a technical result relating to computer memory/data storage reduction. However, the specification never describes the invention in terms of memory optimization, data volume reduction, or storage efficiency. The specification consistently frames the “reduction” in business/financial terms:
¶ [0008]: “provide a way to blend coupons for 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, such as by reducing a gross notional and/or reducing line items associated with the plurality of swaps.”
¶ [0045]: “reduce one or more line items associated with the swap portfolios 222 and/or to reduce a gross notional value associated with the swap portfolios 222 to reduce a total capital charge incurred by the financial institution.”
¶ [0051]: “the plurality of swaps 310 has been reduced to two line items.”
At no point does the specification describe:
A reduction in memory consumption (bytes, kilobytes, etc.);
A technical mechanism for data storage optimization;
Any improvement to memory utilization, storage architecture, or data management from a computing perspective;
Any measurement, metric, or benchmark relating to data volume reduction in memory.
The specification’s concept of “reduction” relates to business line items on an organization’s books — a commercial/financial concept — not to the technical amount of data stored in computer memory. While it may be argued that fewer records inherently means less data in storage, this technical framing is not disclosed in the specification and the specification does not demonstrate possession of a method that achieves a guaranteed reduction in stored data volume. For example:
The specification does not address whether auxiliary data (audit trails, historical records, metadata, timestamps) associated with the compression process might offset any reduction;
The specification does not address whether the “replacement” data records (remnant swaps with potentially higher-precision rates, see ¶ [0054]) might occupy comparable or greater storage per-record;
The specification does not describe the data structure or record format in sufficient detail to confirm that replacing N records with 1–2 records necessarily reduces total stored data.
The following is a quotation of 35 U.S.C. 112(b):
(b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.
The following is a quotation of 35 U.S.C. 112 (pre-AIA ), second paragraph:
The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.
Claims 1, 13, and 20 are rejected under 35 U.S.C. 112(b) or 35 U.S.C. 112 (pre-AIA ), second paragraph, as being indefinite for failing to particularly point out and distinctly claim the subject matter which the inventor or a joint inventor, or for pre-AIA the applicant regards as the invention.
Claims 1, 13, and 20 use three different terms apparently interchangeably:
“collectively characterized by an economic characteristic” (singular)
“computing the economic characteristics thereof” (plural)
“the economics of the first financial instrument are not equal to the economic characteristics of the subset” (different terms compared to each other)
“are equal to the to the economic characteristic of the subset” (back to singular)
It is unclear whether “economics,” “economic characteristics” (plural), and “economic characteristic” (singular) refer to the same property or different properties. Furthermore, “the economic characteristics” (plural) lacks proper antecedent basis — the claim introduces “an economic characteristic” (singular) in the preamble. One of ordinary skill in the art cannot determine whether:
“economics,” “economic characteristic,” and “economic characteristics” are synonymous; (b) “economic characteristics” (plural) refers to multiple different properties than the single “economic characteristic” introduced earlier; or (c) “economics” is a broader concept encompassing multiple “economic characteristics.”
The claim is indefinite for failing to consistently define and use terminology such that the metes and bounds can be ascertained with reasonable certainty.
All dependent claims are rejected by virtue of their dependency.
Claims 1, 13, and 20 recite:
“when the economics of the first financial instrument are not equal to the economic characteristics of the subset”
There is insufficient antecedent basis for “the economics” in the claims. The claims previously introduce “an economic characteristic” and “the economic characteristics thereof,” but never introduce “economics” as a separate term. The use of the definite article “the” implies a prior reference, yet none exists. This renders the claim indefinite.
All dependent claims are rejected by virtue of their dependency.
Claims 2 and 15 each recite:
“the each of the subset of plurality of financial instruments comprises an interest rate swap”.
This phrase is grammatically unclear and indefinite. “The each of the subset of plurality” does not conform to standard English grammar. It is unclear whether the claim intends:
(a) “each [financial instrument] of the subset of the plurality of financial instruments comprises an interest rate swap”; or (b) “each of the plurality of financial instruments comprises an interest rate swap.”
Furthermore, “the each” uses the definite article before “each,” which lacks antecedent basis in the independent claim. The claim is indefinite.
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 the claim that represents the claimed invention for analysis and is similar to independent method Claim 1 and system Claim 20. Claim 13 recites the limitations of :
a processor; and
a first non-transitory memory device storing instructions, that when executed by the processor, cause the processor to:
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, the first rate being determined therefrom;
generate, 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, determine a second rate and based thereon generate 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; 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 amount of data stored in the memory is reduced.
These limitations, under their broadest reasonable interpretation, cover performance of the limitation as commercial interaction/fundamental economic practice of swap portfolio compression, with underlying mathematical calculations. If a claim limitation, under its broadest reasonable interpretation, covers performance of the limitation as a commercial interaction/fundamental economic practice, then it falls within the “Certain Methods of Organizing Human Activity” grouping of abstract ideas. Accordingly, the claim recites an abstract idea. The processor, first non-transitory memory device, second non-transitory memory in Claim 13 is just applying generic computer components to the recited abstract limitations. The recitation of generic computer components in a claim does not necessarily preclude that claim from reciting an abstract idea. 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
Claim
Additional Limitation
§ 101 Effect
2, 15
“each of the subset … comprises an interest rate swap”
Field-of-use limitation — merely narrows the type of financial instrument. Does not integrate or add significantly more.
3, 16
“processor is located remotely from the non-transitory memory and coupled therewith via an electronic communications network”
Generic technological environment (networked computing) — WURC per DDR Holdings distinction; remote storage over a network is conventional. 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; 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.
6
“determining a maximum of rates associated with the financial instruments of the subset”
Commercial interaction/fundamental economic practice — selecting a maximum value from a set. Further defines the abstract calculation. 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 mentioned above.
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, as mentioned above.
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. Commercial interaction/fundamental economic practice.
11
“comparing the total notional amount … to a criterion and determining the subset … based thereon”
Same as claim 10 — business rule / abstract idea.
12
“the determining is performed periodically”
Mere instruction to perform the abstract idea on a schedule — does not add a technological feature.
14
“compare at least one metric … to a specified criterion … responsive to the total notional amount meeting the criterion, replace the subset”
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.
Thus, the claims 1-20 are not patent-eligible.
Conclusion
Any inquiry concerning this communication or earlier communications from the examiner should be directed to MICHAEL W ANDERSON whose telephone number is (571)270-0508. The examiner can normally be reached Monday - Thursday 9am-4pm.
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Mike Anderson
Supervisor Patent Examiner
Art Unit 3693
/Mike Anderson/Supervisory Patent Examiner, Art Unit 3693
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