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 .
Response to Amendment
This is in response to the arguments filed on 6/17/26. Claims 1 – 4 were previously cancelled, claims 5 - 20 have currently been cancelled and claims 21 – 35 have added. Claims 21 – 35 are now pending in the current application.
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 therefore, subject to the conditions and requirements of this title.
Claims 21 - 35 are rejected under 35 U.S.C. 101 because the claimed invention is directed to non-statutory subject matter.
Step 1: It must be determined whether the invention falls in one of the four statutory categories of invention. Claims 21 – 35 are directed towards a method, (process), which is a statutory category of invention.
Step 2a:
Prong 1: It must be determined whether the invention is directed to judicially recognized exception. Claim 21 is analyzed below with limitations indicating recitations of an abstract idea.
21. A computer-implemented method on a bet exchange system operating on a server and having a system database, the method comprising: receiving a plurality of bet orders over a data network from a plurality of client devices associated with a plurality of traders, where each of the plurality of bet orders for each of the plurality of traders includes digital data corresponding to a for-order for a bet position on a bet event occurring or an against-order for a bet position on the bet event not occurring, each bet order having a number of shares and a limit amount per share, where each bet order is for a new bet position or for a modification of an existing bet position; matching, by a processor on the server, for-orders with against-orders for creating new bet positions or for modifying existing bet positions by comparing the limit amounts of the bet orders to determine a trade amount for a match that does not exceed the limit amounts of the bet orders; generating, by the processor, from each of the matched bet orders, a number of two- party standardized bet contracts less than or equal to the number of shares in the matched bet orders, each two-party standardized bet contract having a for-position on the bet event, an against-position on the bet event, a bet event identifier, and a payout amount, where the number of two-party standardized bet contracts is a share quantity in a new bet position or a modified share quantity in the existing bet position, for the traders that sent the matched bet orders; automatically updating, by the processor, a bet quote for the bet event in real-time as bet orders are received and matched, the bet quote comprising a last trade value equal to the trade amount of the last two-party contract matched for the bet event; transmitting, by the processor, the bet quote to the plurality of client devices for display to the traders; and
settling, by the processor on the server, the standardized bet contracts by transferring an amount based on the payout amount and the share quantity to traders holding for- positions when the bet event has occurred or to the traders holding against-positions when the bet event has not occurred.
The abstract idea is defined by the underlined portions exemplary claim 21. Dependent claims 22 - 35, further define the abstract idea or relate to the implementation of the abstract idea. The abstract idea is defined in at least the following grouping below:
Certain methods of organizing human activity (fundamental economic practice/ legal interactions)
The claims are directed towards an abstract idea of a fundamental economic practice which falls into the category of organizing human activity, (See MPEP 2106/04(a)(2)(II)(C)). More specifically, the claimed invention recites a bet exchange system that receives bet orders from a plurality of traders, wherein the claims further discloses matching for-orders with against-orders, generating two-party bet contracts, automatically updating and transmitting a bet quote in real-time as the bet orders are received, and settling the bet contracts by transferring an amount corresponding to a payout for traders holding for-order and against-order positions. Controlling a system that allows traders to place bet orders represents a fundamental economic practice, wherein such transactions are akin to the sort of organizing human activities, (e.g. risk hedging), discussed in Bilski and Alice, (See Bilski V. Kappos, 561 U.S. 593 (2010) and Alice Corp. V. CLS Bank). Furthermore, controlling a system that generates and settles standardized bet contracts represents legal interactions, (an agreement in the form of contracts), discussed in buySafe, (See buySAFE, Inc. v. Google, Inc., 765 F.3d. 1350, 112 USPQ2d 1093 (Fed. Cir. 2014)).
Prong 2: Does the Claim recite additional elements that integrate the exception in to a practical application of the exception?
The claims recite a generic server and database along with instructions that allows users, (traders), to place bet orders, which is viewed as no more than instructions to implement a judicial exception.
These additional limitations do not represent an improvement to the functioning of a computer, or to any other technology or technical field, (MPEP 2106.05(a)). Nor do they apply the exception using a particular machine, (MPEP 2106.05(b)). Furthermore, they do not effect a transformation. (MPEP 2106.05(c)). Rather, these additional limitations amount to an instruction to “apply” the judicial exception using a computer as a tool to perform the abstract idea.
Step 2b: It must be determined whether the claimed invention recites additional elements that amount to significantly more than the judicial exception.
The claim language does recite a server, database, and a plurality of bet orders associated with a plurality of users, however, viewed as a whole, these additional elements are indistinguishable from conventional computing elements known in the art, (See Shvili par. 0012 U.S. 2002/0155885 regarding server and database managing bet orders from users as known in the art ). Therefore, the additional elements fail to supply additional elements that yield significantly more than the underlying abstract idea. Viewing the limitations as an ordered combination adds nothing that is not already present when looking at the elements taken individually. There is no indication that the combination of elements improves the functioning of a computer or improves any other technology.
These additional limitations do not represent an improvement to the functioning of a computer, or to any other technology or technical field, (MPEP 2106.05(a)). Nor do they apply the exception using a particular machine, (MPEP 2106.05(b)). Furthermore, they do not effect a transformation. (MPEP 2106.05(c)). Rather, these additional limitations amount to an instruction to “apply” the judicial exception using a computer as a tool to perform the abstract idea.
Response to Arguments
Applicant’s arguments with respect to the double patenting rejection have been fully considered and are persuasive. The double patenting rejection has been withdrawn.
Applicant's arguments with respect to the 101 rejection, filed on 6/17/26 have been fully considered but they are not persuasive. Regarding current claims 21 – 35, Applicants argue that “arguments deemed persuasive in overcoming the rejections under §101 in the prosecution of the '726 Patent, which appeared to have been adopted in recognizing that no §101 issue existed in the prosecution of the claims in the '320 Patent, are sufficiently persuasive to overcome the rejection of claims 5-20 and now new claims 21-35 in this application”. The Examiner respectfully disagrees. While the Examiner acknowledges the allowability of both the ‘726 and ‘320 patents, however, both patents were deemed to allowable prior to the July 2024 and the December 2025 subject eligibility guidance updates. Under the latest guidance, it is emphasized, at Step 2a, Prong Two, whether a claim integrates a recited judicial exception into a practical application because the claimed invention improves the functioning of a computer or another technology or technical field. The allowance and arguments of related cases prior to guidance are not valid with respect to the analysis of current claims 21 – 35.
Applicants further argue that “claim 21 is not directed to an abstract idea without significantly more”. More specifically, while the Examiner agrees with Applicant’s arguments stating that “the processing of the data records that consist of bet orders provides a system that cannot be performed as purely human activity” as recited in claim 21, however, the Examiner disagrees with Applicant’s arguments stating that “the claimed systems and methods amount to significantly more than the abstract idea of managing agreements in the form of contracts, or of managing personal behavior in the form of wagering and betting between people, or of fundamental economic principles, or of commercial legal interactions”. In response to this, the examples cited by the Applicants, for example, the processing of bet orders received from traders, generation of bet contracts, and updating of trade values, etc., are viewed by the Examiner as betting rules rather than technical improvements. Merely disclosing that an electronic device and computing hardware and software performing betting rules, does not, as claimed, improve the functioning of computers. With respect to the Berkheimer decision, reference is made for example, (Shvili U.S. 2002/0155885), which shows a betting system which manages bets from using comprising server and database components as being known in the art, (see par. 0012 and Shvili). For these reasons, the Examiner maintains that the claims are not patent-eligible under 35 USC 101.
Applicants further argue that “the additional limitations integrate the abstract idea noted by the Office Action into a practical application” and that “the method in claim 21 improves the accuracy of the last trade value for a given standardized bet contract”. The Examiner respectfully disagrees. Merely disclosing that a “server” and a “system database” manages updates bet orders, does not, as claimed, improve the functioning of computers. Generic processing devices, (server and system database), controlling and maintaining bet orders are well-understood, routine, and conventional (WURC) computer functions. See Alice (generic computer). There is no indication that the combination of elements improves the functioning of a computer or improves any other technology. Furthermore, the current claim language does not recite how the additional components disclose improvements such as improving the accuracy of a trade value for bet contract. For these reasons, the Examiner maintains that the claims are not patent-eligible under 35 USC 101.
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.
Conclusion
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/E.M.T/Examiner, Art Unit 3715
/JUSTIN L MYHR/Primary Examiner, Art Unit 3715
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