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 .
Clams 9 and 19 are canceled. Claims 1-8, 10-18, and 20 are presented for examination.
Response to Arguments
Applicant's arguments filed 04/28/26 have been fully considered but they are not persuasive. The examiner has updated the 101 rejection to reflect the newly added claim limitations. In order to further expedite prosecution, the examiner notes: While the specification discusses a "multi-system paradigm that improves data security" through data bifurcation and obfuscation, Claims 1 and 11 do not recite any of these data obfuscation or security limitations. It only recites the financial modeling and execution steps.
Applicant’s arguments, filed 04/28/26, with respect to 35 USC 103 have been fully considered and are persuasive. The 35 USC 103 rejection of claims 1-8, 10-18, and 20 has been withdrawn.
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 1-8, 10-18, and 20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to an abstract idea without significantly more.
Regarding claims 1 and 11:
Applying the Alice/Mayo Framework:
Step 1
Claim 1 is directed to a “computer-implemented method” comprising steps performed by “one or more processors,” which falls within the statutory category of a process under 35 U.S.C. 101. Claim 11 is directed to a “non-transitory, computer-readable medium containing instructions for causing one or more processors to perform a method,” which falls within the statutory category of an article of manufacture (manufacture) under 35 U.S.C. 101.
Step 2A, Prong I: Directed to a Judicial Exception
Claim 1 recites limitations that fall squarely within the "Abstract Idea" exception, specifically hitting two recognized groupings:
• Mathematical Concepts: The claim explicitly requires "determining... a product model output" which is a "single, value-weighted indicator," and subsequently "determining a first variability index... and a second variability index representing a measure of variability." These are mathematical relationships and formulas being calculated.
• Certain Methods of Organizing Human Activity: The claim's core focus is a fundamental economic practice. As informed by the specification, it models a financial product (like a bond portfolio) against corresponding products (like ETFs) to determine which is a better match for an exchange or trade. Evaluating financial products to execute a transaction is a fundamental economic principle.
Step 2A, Prong II: Integration into a Practical Application
The next step is determining whether the claim integrates these abstract ideas into a practical application. It does not. The additional claim elements are:
• "receiving, by one or more processors, a product dataset..."
• "instructing, by the one or more processors, a server to execute a transfer protocol..."
These elements represent mere data gathering and insignificant post-solution activity. The specification notes that modeling a complex portfolio as a single unit saves "processing power and data memory." However, under Federal Circuit precedent (e.g., SAP America v. InvestPic, Synopsys v. Mentor Graphics), making a mathematical algorithm more computationally efficient does not constitute a technical improvement to the computer itself. The claim uses the computer as a tool to execute a financial algorithm more quickly, rather than improving the functioning of the computer or resolving a technical problem.
Furthermore, instructing a server to execute a "transfer protocol" (which the specification equates to trading a product) based on the calculated variability indices is a generic instruction to apply the abstract idea. This is classic extra-solution activity.
Step 2B: Inventive Concept
Looking at the claim elements both individually and as an ordered combination, they fail to provide an inventive concept that transforms the nature of the claim into a patent-eligible application.
The hardware elements—"one or more processors" and a "server"—are recited at a high level of generality. They perform their standard, routine, and conventional functions: receiving data, executing mathematical calculations, and transmitting a basic instruction over a network. While the specification discusses technical improvements related to bifurcating and obfuscating data for security during dynamic order management, none of those technical features are recited in Claim 1. The claim relies entirely on generic computing components to automate a financial modeling and trading task.
Regarding claim 2, claim 2 adds the abstract idea of further specifying that the first corresponding product comprises a plurality of first corresponding subproducts and the second corresponding product comprises a plurality of second corresponding subproducts. This is merely an additional description of the financial products being analyzed and modeled as groups of subproducts, which is another aspect of financial data organization and analysis and therefore an abstract idea. This additional abstract idea does not add any meaningful limitation to the underlying abstract concept of receiving financial product datasets, computing a product model output and variability indices, and using those indices to inform product selection, and thus does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 3, claim 3 adds the abstract idea of receiving a variability threshold and, responsive to the first variability index satisfying the variability threshold and indicating less variability than the second variability index, transmitting an instruction to trade the first corresponding product to an exchange system. This limitation merely recites an additional mental/financial decision rule—using a threshold on a computed score to decide whether to trade—implemented on a generic computer and exchange system, which remains within the realm of abstract methods of organizing financial activity. This additional abstract idea does not meaningfully limit the claimed abstract concept and therefore does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 4, claim 4 adds the abstract idea of, when the first variability index does not satisfy the variability threshold, generating an adjusted first corresponding product by adjusting one or more corresponding subproducts of a currently owned corresponding product, determining a corresponding product model output, determining an adjusted first variability index, and, if the adjusted first variability index satisfies the variability threshold, transmitting an instruction to exchange the first corresponding product with the adjusted first corresponding product. These steps are additional financial decision and portfolio-rebalancing rules—how to adjust and exchange products based on updated variability measures—which are methods of organizing financial activity and remain abstract ideas. The added abstract idea does not add any technical improvement to computer functioning or other technology, and therefore does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 5, claim 5 adds the abstract idea of specifying that the instruction to exchange includes exchanging one or more individual first corresponding subproducts of the first corresponding product with one or more individual subproducts of the product. This further refines the financial transaction and portfolio rebalancing logic at the level of individual subproducts, which is still an abstract method of managing financial instruments. This additional abstract idea does not provide a meaningful limitation beyond the recited abstract financial calculations and trading decisions and therefore does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 6, claim 6 adds the abstract idea of specifying that the product model output is the single, value-weighted indicator of the one or more subproducts of the product. This is an additional mathematical characterization of the model output as a particular kind of aggregated financial metric, which falls squarely within the “mathematical concepts” category of abstract ideas. This added abstract mathematical specification does not add significantly more than the underlying abstract idea of financial data analysis and thus does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 7, claim 7 adds the abstract idea of specifying that the product model output is a historical trend of single, value-weighted indicators of the one or more subproducts of the product over a statistically significant period of time. This recites generating a time series of mathematical indicators and analyzing their historical trend, which is a further mathematical refinement of the financial analysis and thus an abstract idea. This additional abstract idea does not improve the functioning of a computer or any other technology and therefore does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 8, claim 8 adds the abstract idea of specifying that the exchange system is a clearing agency. This merely labels the type of financial intermediary that receives the trading instruction and remains within the abstract field of financial trading and settlement, i.e., methods of organizing human financial activity. This additional abstract idea does not meaningfully limit the abstract financial and mathematical processing recited in the independent claim and therefore does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 10, claim 10 adds the abstract idea of specifying that the first variability index and the second variability index are determined at regular time intervals. Determining financial or mathematical indices on a periodic basis is itself an abstract data-analysis scheduling concept and a method of organizing financial analysis activity. This additional abstract idea does not provide significantly more than the underlying abstract financial calculations and thus does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 12, claim 12 adds the abstract idea of further specifying that the first corresponding product comprises a plurality of first corresponding subproducts and the second corresponding product comprises a plurality of second corresponding subproducts, in the context of instructions stored on a non-transitory computer-readable medium. As in claim 2, this is merely additional financial data modeling and organization and therefore an abstract idea. This additional abstract idea does not add a meaningful limitation to the underlying abstract concept and thus does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 13, claim 13 adds the abstract idea of instructions to receive a variability threshold and, responsive to the first variability index satisfying the variability threshold and indicating less variability than the second variability index, to transmit an instruction to trade the first corresponding product to an exchange system. This is the same abstract financial decision rule as in claim 3, implemented as software instructions on a non-transitory medium, and remains an abstract method of organizing financial trading activity. This additional abstract idea does not provide significantly more than the abstract financial and mathematical concepts and therefore does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 14, claim 14 adds the abstract idea of instructions that, when the first variability index does not satisfy the variability threshold, cause a processor to generate an adjusted first corresponding product by adjusting one or more corresponding subproducts of a currently owned corresponding product, determine a corresponding product model output and adjusted first variability index, and, if the adjusted first variability index satisfies the variability threshold, transmit an instruction to exchange the first corresponding product with the adjusted first corresponding product. These steps mirror the abstract portfolio-rebalancing and exchange decision rules of claim 4 and remain methods of organizing financial activity. This additional abstract idea does not introduce any technical improvement to computer technology and therefore does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 15, claim 15 adds the abstract idea of instructions specifying that the exchange instruction includes exchanging individual first corresponding subproducts of the first corresponding product with individual subproducts of the adjusted first corresponding product. This is a further refinement of the abstract financial transaction and rebalancing logic and thus still constitutes an abstract method of managing financial instruments. This additional abstract idea does not meaningfully limit the underlying abstract concept and does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 16, claim 16 adds the abstract idea of specifying, in the stored instructions, that the product model output is a single, value-weighted indicator of the one or more subproducts of the product. As with claim 6, this is a mathematical characterization of the model output and falls within the category of mathematical concepts, which are abstract ideas. This additional abstract idea does not add significantly more than the abstract financial calculations already recited and thus does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 17, claim 17 adds the abstract idea of specifying that the product model output is a historical trend of single, value-weighted indicators over a statistically significant period of time. This is a further mathematical data-analysis refinement, similar to claim 7, involving computation of historical trends over time, which is an abstract mathematical concept. This additional abstract idea does not improve any computer technology and therefore does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 18, claim 18 adds the abstract idea of specifying, in the stored instructions, that the exchange system is a clearing agency. This merely identifies the type of financial intermediary and thus recites an additional abstract financial trading concept. This added abstract idea does not meaningfully limit the underlying abstract financial and mathematical operations and therefore does not overcome the prior rejection under 35 U.S.C. 101.
Regarding claim 20, claim 20 adds the abstract idea of specifying that the first variability index and the second variability index are determined at regular time intervals. This is a scheduling refinement of the abstract data analysis and financial decision process, and therefore remains a method of organizing financial activity and a mathematical/organizational concept. This additional abstract idea does not add any inventive concept or technical improvement and does not overcome the prior rejection under 35 U.S.C. 101.
Allowable Subject Matter
Allowability of the claims, as currently drafted, cannot be determined until the rejection under 35 USC 101 is resolved.
Conclusion
Applicant's amendment necessitated the new ground(s) of rejection presented in this Office action. Accordingly, THIS ACTION IS MADE FINAL. See MPEP § 706.07(a). Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a).
A shortened statutory period for reply to this final action is set to expire THREE MONTHS from the mailing date of this action. In the event a first reply is filed within TWO MONTHS of the mailing date of this final action and the advisory action is not mailed until after the end of the THREE-MONTH shortened statutory period, then the shortened statutory period will expire on the date the advisory action is mailed, and any nonprovisional extension fee (37 CFR 1.17(a)) pursuant to 37 CFR 1.136(a) will be calculated from the mailing date of the advisory action. In no event, however, will the statutory period for reply expire later than SIX MONTHS from the mailing date of this final action.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to AUBREY H WYSZYNSKI whose telephone number is (571)272-8155. The examiner can normally be reached M-F 9-5.
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If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, ALI SHAYANFAR can be reached at 571-270-1050. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
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/AUBREY H WYSZYNSKI/Primary Examiner, Art Unit 2434
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