DETAILED ACTION
The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA .
The following is a final office action in response to the application filed 17 December 2025.
Applicant’s amendments to Claims 1,2, 3, 9, 11, 16, 17, 18, 22, and 24 and cancellation of Claims 7 and 20 have been received and are acknowledged.
The applicant's claim for benefit of provisional application US 63/521,316 filed 06/15/2023 and US 63/584,738 filed 09/22/2023, has been received and acknowledged.
Claims 1-6, 8-19, and 21-26 are currently pending and have been examined.
Response to Arguments
Applicant's arguments filed 17 December 2025 have been fully considered but they are not persuasive.
With regard to the rejections under 35 USC 101, Applicant argues: (1) That the recited Claims 1-6, 8-19, and 21-26 when considered as a whole do not recite an abstract idea. Applicant asserts that exemplary Claim 1 as recited does not fall into any of the enumerated categories. (Applicant’s response, 9-10) (2) Applicant further argues that the recited amended Claim 1 “relate to arrangements and functions for components of a computing device configured for specialized operations for dynamically training a machine learning model for task executions…” which are significantly more than the abstract idea and “do not monopolize the generic idea of "using continuous machine learning model optimization to generate artificial intelligence managed portfolios," leaving others to implement that idea in many other ways….” Applicant further asserts that the instant recited claims provide “technical improvements…. a technically advanced model training process… can enable a robust learning process to adapt to the non-stationary nature of financial markets….” (Applicant’s response, 10). (3) Applicant further argues that the recited claims are similar to Example 39 in which the claims were not directed to judicial exception. Applicant asserts that the recited claims do not recite a mental process or any method of organizing human activity. Rather Applicant argues that the recited claims “merely peripherally involve… any broader concept of using continuous machine-learning model optimization to generate artificial intelligence managed portfolios” (Applicant’s response, 10-11) (4) Applicant argues that the instant claims are a ‘practical application of improving how a machine-learning model is trained for financial decision- making and automatically executing tasks based on the machine-learning model…leads to better model accuracy and responsiveness to changing market conditions… ” Applicant then analogizes the instant claims to CardioNet, Visual Memory, and McRO, as an improvement to technology (Applicant’s response, 11-13) (5) Applicant reiterates that the claimed invention is ‘significantly more’ than the abstract idea. Applicant further argues the recited steps are an ‘ordered combination’ that provides and inventive concept and that no Berkheimer evidence has been provided in the rejection to show that the “claimed two-stage machine-learning training process utilizing different sets of data was well-understood, routine or conventional as an arrangement”. (Applicant’s response, 14-15)
Examiner respectfully disagrees as noted previously and in the rejection below. Applicant’s own arguments state that the invention is directed to “…dynamically training a machine learning model for task executions…” for “managed portfolios” and “for financial decision-making”; this is a method of organizing human activity [ fundamental economic concept and organizing human activity (commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations)] The instant claims are therefore, distinguishable from the patent eligible claim of Example 39. (Applicant’s arguments 1-4). As recited the claimed limitations use generic computing elements to execute an abstract idea which are recited at a high level of generality. This is cited in the rejection below and previously, the technological elements are recited at a high level of generality. (See MPEP 2106.05 (d), (f) and (g)): (Specification, [129-131] computing devices may be server computers, workstations, personal computers, portable computer systems, handheld devices, mobile computing devise, wearable devices, body-mounted or implantable devices, smartphones, smart appliances, internetworking devices, autonomous or semi-autonomous devices such as robots or unmanned ground or aerial vehicles, any other electronic device that incorporates hard-wired and/or program logic to implement the described techniques, one or more virtual computing machines or instances in a data center, and/or a network of server computers and/or personal computers…hardware, software or combination of hardware and software… [132-149] computers….computer system…instructions… an Internet of Things…device… mobile computing device… storage media…. network link… execution of instructions… .) There is no improvement to technology. Further the citation of the Specification noted above, below and previously is Berkheimer evidence noting the use of generic computing elements for their well known, routine and conventional purpose (See MPEP 2106.05 (d)). The rejection under 35 USC 101 is not that the recited invention is well-known, routine and conventional. Applicant’s argument asserting a lack of Berkheimer evidence seems to conflates the novelty of the invention with patent eligibility. An improved or novel abstract idea is still an abstract idea. (Applicant argument 5)
Examiner withdraws the prior art rejection in view of Applicant’s amendments and the rejection under 35 USC 112 below.
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.
Claims 1-6, 8-19, and 21-26 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 applications subject to pre-AIA 35 U.S.C. 112, the inventor(s), at the time the application was filed, had possession of the claimed invention. Claims 1 and 14 recite “ by learning a plurality of hyperparameters” and “ updating the plurality of hyperparameters”. Though the disclosure recites “hyperparameters” three (3) times in (Specification, 60 and 71], the disclosure does not provide support for the recitations of “ by learning a plurality of hyperparameters” and “ updating the plurality of hyperparameters” or how these actions are executed/implemented. Applicant is requested to provide support for the recitations of “ by learning a plurality of hyperparameters” and “ updating the plurality of hyperparameters”.
Claims 2-6, 8-13, 14-19 and 21-26 are rejected by virtue of their dependency on a rejected independent claim.
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 1-6, 8-19, and 21-26 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 applications subject to pre-AIA 35 U.S.C. 112, the applicant), regards as the invention.
Claims 1 and 14 recite “by learning a plurality of hyperparameters.” This recitation is unclear. Using broadest reasonable interpretation, the ordinary use of the term “hyperparameters” in a machine learning context is that hyperparameters are a manual input. The recitation of “by learning a plurality of hyperparameters” implies that there is something being learned -possibly a ‘training.’ It is unclear what is executed or implemented by this recitation. Further, it is unclear how the later step of ‘re-training… by updating the plurality of hyperparameters” is then implemented. In other words, using broadest reasonable interpretation the setting and updating of hyperparameters is considered a user defined input. However, the recitation ‘by learning’ implies machine learning is involved in some manner which is unclear. As such the metes and bound of the claims are unclear and indefinite. Claims 2-6, 8-13, 14-19 and 21-26 are rejected by virtue of their dependency on a rejected independent claim.
Examiner will interpret the recitation of ‘hyperparameters’ by its plain meaning as a user defined data input.
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 1-6, 8-19, and 21-26 are rejected under 35 U.S.C. 101 because the claimed invention is directed to non-statutory subject matter.
When considering subject matter eligibility under 35 U.S.C. 101, (1) it must be determined whether the claim is directed to one of the four statutory categories of invention, i.e., process, machine, manufacture, or composition of matter. If the claim does fall within one of the statutory categories, (2a) it must then be determined whether the claim is directed to a judicial exception (i.e., law of nature, natural phenomenon, and abstract idea), and if so (2b), it must additionally be determined whether the claim is a patent-eligible application of the exception. If an abstract idea is present in the claim, any element or combination of elements in the claim must be sufficient to ensure that the claim amounts to significantly more than the abstract idea itself. Examples of abstract ideas include fundamental economic practices; certain methods of organizing human activities; an idea itself; and mathematical relationships/formulas. Alice Corporation Pty. Ltd. v. CLS Bank International, et al., 573 U.S. ____ (2014).
The claimed invention is directed to a judicial exception (i.e. a law of nature, a natural phenomenon, or an abstract idea) without significantly more. In the instant case, the claim(s) as a whole, considering all claim elements both individually and in combination, do not amount to significantly more than an abstract idea.
(1) In the instant case, the claims are directed towards a method and non-transitory computer readable medium using continuous machine learning model optimization to generate artificial intelligence managed portfolios. In the instant case, Claims 1-13 are directed to a process. Claims 14-19 and 21-26 are directed to a non-transitory computer readable medium.
(2a) Prong 1: Insert concept of invention. For example: Exchanging of securities (i.e. contracts) is categorized in/akin to the abstract idea subject matter grouping of: methods of organizing human activity [ fundamental economic concept and organizing human activity (commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations)]. As such, the claims include an abstract idea.
The specific limitations of the invention are (a) identified to encompass the abstract idea include:
1. A …method executed … and comprising:
creating a first set of training data comprising synthesized market data that mimics characteristics of real market data, benchmarked to a time period, the synthesized market data having different distributions from the real market data;
… a … in a first stage using the first set of training data by learning a plurality of hyperparameters associated with the machine-learning model to produce … capable of outputting a recommendation of a particular asset portfolio;
determining an asset portfolio by inputting a particular account specification into the trained…;
determining a performance metric for the asset portfolio based on synthetic data and historic data associated with a plurality of assets;
determining a reference performance metric based on a reference asset portfolio and the synthetic and historic data;
comparing the performance metric for the asset portfolio with the reference performance metric to result in a decision of whether to … the …;
responsive to the decision to re-train the machine-learning model, creating a second set of training data comprising real market data derived from changes in real market conditions; and
… the … in a second stage using the second set of training data by updating the plurality of hyperparameters; and
automatically executing one or more trades for an updated asset portfolio determined by the re-trained…
14……… one or more sequences of instructions which, when executed …, cause the …to execute:
creating a first set of training data comprising synthesized market data that mimics characteristics of real market data, benchmarked to a time period, the synthesized market data having different distributions from the real market data;
……in a first stage using the first set of training data by learning a plurality of hyperparameters associated with the machine-learning model to produce a trained …capable of outputting a recommendation of a particular asset portfolio;
determining an asset portfolio by inputting a particular account specification into the …;
determining a performance metric for the asset portfolio based on synthetic data and historic data associated with a plurality of assets;
determining a reference performance metric based on a reference asset portfolio and the synthetic and historic data;
comparing the performance metric for the asset portfolio with the reference performance metric to result in a decision of whether to re-train the …;
responsive to the decision to re-train the machine-learning model, creating a second set of training data comprising real market data derived from changes in real market conditions; and
… the… in a second stage using the second set of training data by updating the plurality of hyperparameters;
automatically executing one or more trades for an updated asset portfolio determined by the re-trained …
As stated above, this abstract idea falls into the (b) subject matter grouping of: methods of organizing human activity.
Prong 2: When considered individually and in combination, the instant claims are do not integrate the exception into a practical application because the steps of creating….training…, determining…by inputting…, determining…, determining… , comparing… , re-training…, … executing… trades…, repeating the… re-training…. do not apply, rely on, or use the judicial exception in a manner that that imposes a meaningful limitation on the judicial exception (i.e. the abstract idea).
The instant recited claims including additional elements (i.e. … storing…) do not improve the functioning of the computer or improve another technology or technical field nor do they recite meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment. The limitations merely recite: “apply it” (or an equivalent) or merely include instructions to implement an abstract idea on a computer or merely uses a computer as a tool to perform an abstract idea or merely add insignificant extra-solution activity to the judicial exception or (See MPEP 2106.05 (f) and (g))
(2b) In the instant case, Claims 1-6, 9-13 are directed to a process. Claims 14-19, and 21-26 are directed to a non-transitory computer readable medium.
Additionally, the claims (independent and dependent) do not include additional elements that individually or in combination are sufficient to amount to significantly more than the judicial exception of abstract idea (i.e. provide an inventive concept). As discussed above with respect to integration of the abstract idea into a practical application, the additional element(s) of: (train…a machine learning model…; re-train….machine learning model… computer…non-transitory computer-readable storage medium….processors… ) merely uses a computer as a tool to perform an abstract idea or merely add insignificant extra-solution activity to the judicial exception or merely uses generic computing elements to perform well known, routine, and conventional functions. (See MPEP 2106.05 (d), (f) and (g)): (Specification, [129-131] computing devices may be server computers, workstations, personal computers, portable computer systems, handheld devices, mobile computing devise, wearable devices, body-mounted or implantable devices, smartphones, smart appliances, internetworking devices, autonomous or semi-autonomous devices such as robots or unmanned ground or aerial vehicles, any other electronic device that incorporates hard-wired and/or program logic to implement the described techniques, one or more virtual computing machines or instances in a data center, and/or a network of server computers and/or personal computers…hardware, software or combination of hardware and software… [132-149] computers….computer system…instructions… an Internet of Things…device… mobile computing device… storage media…. network link… execution of instructions… .)
The dependent claims have also been examined and do not correct the deficiencies of the independent claims.
It is noted that claim (2-13 and 15-26) introduces the additional elements of wherein clauses further defining claim elements …first set of training data… account specification… (Claims 2,3,15, 16,)…asset portfolio… (Claims 4, 17 )…synthetic data, determining.. selecting…(Claims 5 and 18); …… performance metric… (Claims 8, 21) and additional steps to further define the invention: …re-training…. (Claims 9 and 22)… …comparing….selecting…(Claims 10 and 23)… determining…(Claims 11 and 24)…determining… comparing…(Claims 12 and 25); determining… determining… comparing… (Claims 13 and 26); generating… determining… (Claims 6 and 19). This element is not a practical application of the judicial exception because the limitations merely recite: “apply it” (or an equivalent) or merely include instructions to implement an abstract idea on a computer or merely uses a computer as a tool to perform an abstract idea or merely add insignificant extra-solution activity to the judicial exception (See MPEP 2106.05 (f) and (g)) Further these limitations taken alone or in combination with the abstract do not amount to significantly more than the abstract idea alone because these element(s) amount to mere use of a computer as a tool to perform an abstract idea or merely add insignificant extra-solution activity to the judicial exception or merely uses generic computing elements to perform well known, routine, and conventional functions. (See MPEP 2106.05 (d), (f) and (g)): (Specification, [129-131] computing devices may be server computers, workstations, personal computers, portable computer systems, handheld devices, mobile computing devise, wearable devices, body-mounted or implantable devices, smartphones, smart appliances, internetworking devices, autonomous or semi-autonomous devices such as robots or unmanned ground or aerial vehicles, any other electronic device that incorporates hard-wired and/or program logic to implement the described techniques, one or more virtual computing machines or instances in a data center, and/or a network of server computers and/or personal computers…hardware, software or combination of hardware and software… [132-149] computers….computer system…instructions… an Internet of Things…device… mobile computing device… storage media…. network link… execution of instructions… .)
Therefore, Claims 1-6, 8-19, and 21-26 are rejected under 35 U.S.C. 101 as being directed to non-statutory subject matter.
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 ASHA PUTTAIA H whose telephone number is (571)270-1352. The examiner can normally be reached M-F 9 am to 5:30 pm.
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/ASHA PUTTAIA H/Primary Examiner, Art Unit 3691
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