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 .
Claim Status
As of the Office Action dated August 19, 2025 claims 1-20 were pending and claims 1-20 stood rejected. Claims 1, 9-11 and 19 have been amended. No claims have been added or cancelled. Claims 1-20 are therefore currently pending and are presented for examination on the merits.
Response to Arguments
Applicant’s argument with regard to the 35 U.S.C. 101 rejection of claims 1-20 has been fully considered but is not persuasive. Applicant argues on pages 13-14 that the operations of claim 1 cannot be performed mentally and cites these portions of claim 1:
"maintaining, by one or more processing circuits, an operating account data structure comprising a plurality of funds of a recipient provider ... storing the plurality of funds under a first controlling framework corresponding with a first set of controlling parameters,"
"modeling, by the one or more processing circuits, the signed exchange package using the first controlling framework to generate an exchange flag, wherein the first set of controlling parameters of the first controlling framework are accessed from one or more data feeds ... the one or more data feeds comprise at least one primary API connection to at least one primary data source and at least one second API connection to at least one secondary data source,"
"embedding, by the one or more processing circuits, the exchange flag into the signed exchange package,"
"freezing, by the one or more processing circuits, the funds by routing the signed exchange package comprising the funds and the exchange flag from the operating account data structure to an escrow wallet of an escrow wallet system of the recipient provider."
The written disclosure describes the operation of maintaining in paragraph 0110 and the controlling framework in paragraphs 0045 and 0046 as below:
[0110] At block 510, the processing circuits can maintain an operating account data structure including a plurality of funds of a recipient provider. For example, the operating account could segregate funds into accounts at the provider (e.g., bank or financial institution) and could further segregate funds that are stored or in process. In some implementations, maintaining the operating account data structure can include storing the plurality of funds under a first controlling framework corresponding with a first set of controlling parameters. That is, the operating account data structure can be an exchange ledger that stores funds designated for processing, the operating account data structure maintains a record of deposits, withdrawals, and exchanges. For example, the structure could support the tracking of funds in real-time. Furthermore, the operating account data structure can be used to log each transaction detail such as date, amount, recipient details, payment method, compliance flags, and involved parties to provide financial compliance and record-keeping. For example, this log can be used as an audit trail for regulatory review or internal checks.
[0045 ]In some implementations, a controlling framework can be a set of regulatory guidelines for managing transactions. That is, the controlling framework can influence how transactions are processed, monitored, and reported. For example, the controlling framework implemented by the exchange system 112 may be used enforce compliance with international sanctions or anti-money laundering standards. In some implementations, a set of controlling parameters can provide specific rules within the controlling framework. The set of controlling parameters can include the operational limits, such as transaction thresholds or flags for suspicious activity, monitoring processes for continuous compliance, criteria for flagging unusual transaction patterns, requirements for documentation and proof of identity, steps for escalation and review of flagged transactions, regulations or laws, good or service type restrictions (e.g., cannot buy or sell a specific drug or medication in Country X), or any procedures related to the validation of payments between providers (e.g., cross-border). For example, the set of parameters may have rules dictating the maximum allowable transaction size without additional verification or review. In another example, the set of parameters may be guidelines for automatically flagging transactions that deviate from typical customer patterns as potentially suspicious. In yet another example, the set of parameters may include terrorist-watch list information or other government data related to individuals prohibited from being transacted with. In yet another example, the set of parameters may be protocols requiring additional documentation for transactions exceeding a certain threshold or involving high-risk countries, in compliance with OFAC regulations. In yet another example, the set of parameters may be rules for handling exchanges for particular goods or services (e.g., drugs or medications outlawed or highly regulated in jurisdiction X).
[0046] In some implementations, the set of controlling parameters can also include the documentation for high-value transactions, methods for resolving transaction disputes, approaches to handle cross-jurisdictional transfers, or any criteria for blocking or flagging transactions. In another example, the set of parameters may have rules dictating the maximum allowable transaction size without additional verification or review. In another example, the set of parameters may be guidelines for handling returns and refunds. In yet another example, the set of parameters may be protocols for exchanging currency in international transactions.
The operations described in the maintaining operation do not appear to involve anything other than performing a combination of standard banking operations (deposits, withdrawals and exchanges) in conjunction with the performing of ledger accounting (log each transaction detail such as date, amount, recipient details, payment method, compliance flags, and involved parties to provide financial compliance and record-keeping). The segregation of funds relative to foreign exchanges has been an economic practice that started with the Glass-Steagall Act of 1933 along with the Edge Act which was updated in the 1930s and further modified with the Bank Secrecy Act of 1970 and the International Banking Act of 1978. These types of operations all predate the invention of the computer. The controlling framework along with the corresponding parameters appears to do nothing more than contain regulatory requirements for different situations and easily could be implemented by a human being with a three-ring binder and tabbed sections or some other paper format. Clearly the maintaining step along with the implementation of a controlling framework (which only requires following the requirements issued by a governmental authority or equivalent) can be performed mentally or in combination with pen and paper.
The next operation recited in Applicant’s remarks is the modeling which is defined in the written disclosure as follows:
[0041] … If an issue such as a potential compliance breach with OFAC sanctions or a discrepancy in transaction details is identified during the transaction review (also referred to herein as "modeling", described in greater detail below) the exchange system 112 can preemptively reroute or divert the funds to a designated escrow wallet system 120”
[0113] At block 540, the processing circuits can model the signed exchange package using the first controlling framework to generate an exchange flag. In some implementations, the first set of controlling parameters of the first controlling framework can be accessed from one or more data feeds of a plurality of access locations. Furthermore, the exchange flag can be generated based on a detection of a discrepancy in the signed exchange package or a regulatory restriction. Generally, modeling can include evaluating or analyzing the exchange request or signed exchange package and applying regulatory compliance checks to verify the transaction meets all required standards. In some implementations, modeling can include executing one or more smart contracts including executable code to verify compliance of the exchange of funds with the first controlling framework. That is, smart contracts can be used to automatically enforce terms and conditions of the exchange as per the underlying legal and regulatory requirements. For example, the one or more smart contracts can automatically generate the exchange flag, embed the exchange flag into the signed exchange package, and freeze the funds by routing the signed exchange package to the escrow wallet (described below with reference to blocks 550-560). For example, the smart contracts can include executable code that can trigger specific actions based on predefined conditions such as delays in fund clearance or discrepancies in recipient credentials. For example, the executable code may be programmed to update all parties involved via automated notifications when conditions are triggered.
The manner in which paragraph 0113 describes the “modeling” does not indicate that the claim is directed towards anything involving artificial intelligence, neural networks or machine learning but rather simply the automation of human decision making as a human being, appropriately guided, can review applicable regulations, analyze the available data and make a determination that regulatory requirements are either met or not met and in the event that they are not met a human being can indicate (or flag) a transaction involving an exchange of funds. The smart contract described in paragraph 0113 is simply being used to automate a process that could also be performed manually. Therefore the modeling step also can be viewed as an operation that can be performed mentally.
The next operation recited in Applicant’s remarks is the embedding which is defined in the written disclosure as follows:
[0116] At block 550, the processing circuits can embed the exchange flag into the signed exchange package. In some implementations, embedding can include applying digital markers that link the flag to the transaction's data fields within the package. That is, the signed exchange package can be modified or updated by incorporating the flag as part of the transaction metadata, which can then be verified against existing records for consistency and compliance. For example, the processing circuits can automate this embedding process to confirm that all flagged transactions are immediately recognizable and processed according to specified controlling frameworks. In another example, the modification might include the addition of a timestamp and model ID related to the type of model which modeled and flagged the transaction. In some implementations, the exchange flag may be automatically embedded in the modeling step. That is, as soon as a discrepancy is identified and a flag is generated, the processing circuits can automatically embed this flag within the package to prevent any further processing steps without proper scrutiny.
The embedding operation appears to only be the computer equivalent of marking a paper copy of a transaction with a highlighter in order to make it clear what anomalies or violations are present in the transaction so that other parties are able to understand why the transaction was flagged. Again this is an operation that only requires knowledge of the applicable regulations regarding anomalies or violations and following procedures for dealing with the anomalies or violations which only requires a combination of human knowledge regarding the regulations and the ability to evaluate violations and take appropriate action based on written procedures. Therefore the embedding operation also can be viewed as an operation that can be performed mentally.
The final operation mentioned in Applicant’s argument on page 14 is the operation of “freezing, by the one or more processing circuits, the funds by routing the signed exchange package comprising the funds and the exchange flag from the operating account data structure to an escrow wallet of an escrow wallet system of the recipient provider”. The freezing operation is defined in the written disclosure as follows:
[0117] At block 560, the processing circuits can freeze the funds by routing the signed exchange package including the funds and the exchange flag from the operating account data structure to an escrow wallet of an escrow wallet system of the recipient provider. In some implementations, the escrow wallet system can freeze the plurality of funds by restricting exchanges using exchange security restrictions preventing fund disbursement. For example, the processing circuits may use specific criteria such as the nature of the flag or the amount involved to determine the level of restriction imposed on the transaction. In some implementations, the escrow wallet system can include a plurality of escrow accounts. That is, the escrow accounts may be jurisdiction specific but for sorting exchanges into categories (e.g., based on amounts, based on type of flag, etc.). Furthermore, routing the signed exchange package to the escrow wallet can further be based on a type of exchange flag from a plurality of types of exchange flags. For example, the plurality of types of exchange flags can include terrorism detection, non-compliant exchange detection, regulatory detection, or office of foreign assets control (OFAC) detection. In this example, a terrorism detection flag could indicate an urgent review is required by specialized compliance officers. Further in this example, a non-compliant exchange detection flag could indicate additional documentation is needed to proceed. Further in this example, a regulatory detection flag could indicate a possible violation of international trade laws. Further in this example, an office of foreign assets control (OFAC) detection flag could indicate the transaction involves entities or countries under trade sanctions.
The operation of freezing an account is a fundamental economic practice in existence prior to the invention of a computer as is the use of an escrow account for segregating funds. Prior to the invention of a computer this would simply be performed via bookkeeping which would involve debiting the account of the sender and crediting a newly created escrow account or an existing escrow account with the funds via ledger entries. The written disclosure at paragraph 0117 does not go beyond the basic principles of ledger entry other than suggesting that some annotations regarding the nature of the violation would be made which are within the capability of a human being either with written remarks in the form of annotations or through other visible means such as sticky notes. It is also clear that this operation can be performed mentally in conjunction with pen and paper.
Notably even though one of the claim limitations uses the word “modeling” there appears to be an absence of any operation in the written disclosure that describes the modeling in a manner that would indicate a computer generated model or alternatively towards any form of training a computer generated model. Also notable is the absence of terms that would describe how the model is formed such as “artificial intelligence”, “neural network” or “machine learning” as the recitation from paragraph 0041 that equates a “transaction review” to the “modeling”. A human being can manually review a transaction and evaluate whether a potential compliance breach with OFAC sanctions is present or alternatively whether a discrepancy in transaction details is present. Therefore contrary to Applicant’s assertion on page 14 that the “…human mind is not equipped to perform the operates recited above, nor can these operations be practically performed with pen and paper” it is clear that every one of the operations being claimed can be performed with the human mind and have been performed without a computer for decades if not centuries. Therefore the 2025 Memorandum cited by Applicant is not applicable to this situation as the subject matter of the instant application is not the type of subject matter encompassed by the 2025 Memorandum. As such Applicant has shown no clear error on the part of the Examiner’s conclusion that the claim is directed towards a mental process and therefore under Prong One of Step 2A should be held as being directed towards an abstract idea.
Applicant then argues on pages 14 through 16 of argument that even if the claim is directed towards an abstract idea that there are sufficient elements present to form a practical application of the abstract idea and therefore should be deemed as being eligible subject matter under the 2025 Memorandum at pages 3 and 4 and MPEP § 2106.04(d). Examiner respectfully disagrees. As the written disclosure at paragraph 0041 teaches “modeling” is simply a form of transaction review which can be viewed as being part of the abstract idea itself and even if the modeling were viewed as an element the modeling would be viewed as mere instructions to apply an exception as the claim recites only the idea of a solution or outcome i.e. the claim fails to recite details of how a solution to a problem is accomplished (MPEP § 2106(f)(1)) because as stated in the MPEP this type of recitation is equivalent to the words “apply it”. Neither the claim nor the underlying written disclosure provide any details of the nature of the modeling operation and therefore even when viewed as an element the recitation within the claim would be insufficient to form a practical application of the abstract idea under Prong Two of Step 2A as there is no further description of modelling other than the comparison to a manual transaction review. Furthermore gathering data through data feeds from multiple API connections is nothing more than mere necessary data gathering (MPEP § 2106.05(g)(3)) as it involves obtaining information about transactions using the Internet to determine whether there may be a discrepancy or violation present in the transaction and also cannot be used to form a practical application of the abstract idea under MPEP § 2106.04(d). The “framework” is described in paragraph 0032 as a regulatory framework which per paragraph 0022 is jurisdiction-specific and can be viewed as being part of the abstract idea as opposed to an element under Prong Two of Step 2A. Embedding exchange flags into the signed exchange package in order to more reliably indicate which transactions are anomalous or in violation of a regulation in order to speed up processing without any limitations specifying the technical details of the exchange flag or how it is generated or processed cannot be viewed as an improvement to computer technology under Prong Two of Step 2A (MPEP § 2106.05(a)). Routing signed packages to an escrow wallet system are nothing more than mere instructions to apply an exception (MPEP § 2106.05(f)) as the claim does not recite any details of how the routing is accomplished that could be considered as factors in establishing eligibility and the routing of funds to an escrow account is itself a fundamental economic practice and the language of the claim does not suggest anything other than use the computer as a tool to route funds to an escrow account. The four bullet points on page 15 with regard to the alleged technical benefits of the architecture (scrutinizing the compliance status of the exchanges, diverting exchange funds into escrow accounts based on real-time analysis of the transaction’s compliance with applicable regulations, triggering protocols that redirect data to secure holding areas for further validation without manual intervention, integrating compliance checks directly into the exchange workflow, reduce the occurrence of compliance-related interruptions, increase the throughput and efficiency of processing systems (i.e. business processing) and provide various technical improvements to provide regulatory compliance and secure transaction processing across different jurisdictions) rather than supporting Applicant’s argument that the claim improves the function of the computer itself actually serves to underscore why the claim fails to recite a practical application of the abstract idea as claim does nothing more than provide mere automation of a manual process (MPEP § 2106.05(a)) and accelerates the process of analyzing transaction data when the increased speed comes solely from the capabilities of a general purpose computer (MPEP § 2106.05(a)). Furthermore a person of ordinary skill upon reading the written disclosure would conclude that the claimed invention or even the invention as described in the specification does not have subject matter that constitutes an improvement to a technology or technical field but is simply directed towards subject matter that improves a business process through the free-flowing benefits of automating a manual process through the use of a computer. This is not a situation where it is a “close call” as to whether the claim is eligible under the 2025 memorandum as the arguments presented by Applicant for Prong Two of Step 2A rather than supporting a finding of eligibility actually support a finding of ineligibility under Prong Two of Step 2A as they are all citing improvements in the form of increased speed in executing business operations as opposed to improvements in computer technology. Example 40 (argument at page 16) is not an applicable example to the instant claim because Applicant is relying on elements described in the specification that are not present in the actual claim in order to the instant claim for two reasons. The first reason is that the instant claim is drafted in a manner that is similar to that of claim 2 of example 40 which is viewed as ineligible and not claim 1 of example 40 which includes additional elements which as a whole provide an improvement in collecting traffic data. The second reason is that embedding exchange flags, routing flagged packages to escrow wallet systems, freezing funds and controlling release on multi-source API (gathered) data are apparently an attempt to establish a proposition by Applicant that improvements to a business process necessarily lead to a technological improvement to a computer. However the issue with this proposition is that there is no supporting subject matter in either MPEP § 2106.04(d) or MPEP § 2106.05 (a-c or e-h) that actually establishes a basis for this proposition which provide several examples as to why improvements to a business process are not considered as the types of improvements that serve to form a practical application of an abstract idea. Therefore Applicant has failed to show any clear error on the part of the Examiner and as such it is clear that under Prong Two of Step 2A no practical application of the abstract idea is present in claims 1, 11 or 18. As such the present rejection under 35 U.S.C. § 101 will be maintained.
Applicant’s argument with regard to the 35 U.S.C. § 102 (a)(1) and (a)(2) rejection of claims 1-3, 5-6, 8, 10-13, 15-17 and 19-20 have been fully considered are persuasive. However Examiner only partially agrees with the argument as Winklevoss et al. (U.S. Patent 11,282,139, hereinafter referred to as Winklevoss) discloses at column 152, lines 26-36 that a transaction system may access transaction data from one or more exchanges using APIs or data feeds from one or more exchanges or exchange agents. While not explicitly disclosing that a particular API connection is a primary connection and other connections are secondary nothing within the claim appears to rely on a particular API function that is based on a primary or secondary designation and therefore the recitation of “primary” and “secondary” does not patentably distinguish the claim from the prior art as it directed towards non-functional descriptive material that is not entitled to patentable weight per MPEP § 2111.05 (I)(B). Therefore the newly added language in claims 1, 11 and 18 with regard to the APIs is not a factor in overcoming the existing rejection and only the subject matter incorporated from the previous claims 9 and 18 is being considered in withdrawing the rejection. As such the prior art rejections are being 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 1-20 are rejected under 35 U.S.C. 101 because the claimed invention is directed to an abstract idea without significantly more.
Claim 1 recites a method and therefore meets eligibility step 1 of the patent subject matter eligibility guidelines (MPEP § 2106.03) as a method is one of the four categories of statutory subject matter.
The analysis then proceeds to Prong One of Step 2A in which the claim is evaluated in order to determine whether the claim is directed towards a judicial exception (MPEP § 2106.04(II)). The claim recites limitations of maintaining an account data structure, receiving a signed exchange package for an exchange of funds between a sender and a recipient, storing the signed exchange package comprising the funds, modeling the signed exchange package to generate an exchange flag, embedding the exchange flag into the signed exchange package, freezing the funds by routing the package to an escrow wallet, monitoring the funds based on receiving additional data and processing a controlled release of the funds from the escrow wallet. The operation of modeling the package is described in paragraph 0058 of the written disclosure and can “…include applying a controlling framework to transaction data (e.g., to process, verify, and/or authenticate an exchange…retrieving details to satisfy the controlling parameters of the controlling framework from various data sources, such as financial databases and regulatory compliance system…accessing and applying a predefined set of controlling parameters that prescribe the compliance requirements…the set of parameters might include checking transaction amounts against legal thresholds or matching transaction parties against a list of sanctioned entities…scan transaction amounts to detect values exceeding regulatory thresholds or analyze geographic origins of transactions to identify any originating from high-risk jurisdictions. If a transaction does not satisfy or diverges from the set of parameters, such as a transaction amount surpassing the legal limit without requisite flags or approvals, the exchange system 112 can generate an exchange flag indicating potential non-compliance.”) Paragraph 0060 also describes the modeling operation as “…signing the package based on verifying the exchange… satisfies regulatory restrictions and no discrepancies are present. Paragraph 0041 recites that the modeling operation is simply another name given to a transaction review (“If an issue… is identified during the transaction review (also hereinafter referred to as “modeling”) The claim falls under two categories of abstract ideas where the first category involves the exchange of currencies across international borders including the following of regulations governing international currency transfers per paragraphs 0054 and 0060 and is therefore directed towards a fundamental economic practice (MPEP § 2106.04(a)(2)(II)(A)) as exchanging currencies and regulating such exchanges is a long established practice. Furthermore because the claim and in particular the modeling operation works at a high level where a human observer need only observe what constitutes the value of any particular exchange transaction, evaluate whether the value exceeds a regulatory limit and either approve or deny (or “flag”) the exchange based on the evaluation the claim can also be viewed as being directed towards a mental process where the computer is merely being used as a tool to perform the mental process (MPEP § 2106.04(a)(2)(III)(C)(3)). Similarly the operation of processing the controlled release, which is described in paragraph 0077 as being exemplified by actions such as returning funds to a sender if funds are unclaimed or under dispute for more than 90 days, returning funds to a sender if required documentation is not provided, nullifying the transaction when a regulatory restriction remains unsatisfied including forfeiture of funds when illegal activity such as money laundering is indicated only require observation and evaluation on the part of a human observer and are therefore also merely using a computer as a tool to perform a mental process. Therefore under Prong One of Step 2A claim 1 is deemed as being directed towards ineligible subject matter.
The analysis then moves to Prong Two of Step 2A in which the claim is evaluated in order to determine whether the claim contains additional elements that integrate the abstract idea into a practical application (MPEP § 2106.04(d)). The claim recites that the operations are performed by “one or more processing circuits” which is described in paragraph 0038 as being “…made up of various components such as a microprocessor, an ASIC, or an FPGA, and the memory device can be any type of storage or transmission device capable of providing program instructions” and can be viewed as being a general purpose processor. No improvement to the functioning of the computer is present in the claim, nor is there any improvement to any other technology or technological field. The processing circuit does nothing more than link the use of the abstract idea to a particular technological environment where the computer is merely being used as a tool to perform the abstract idea. As the written disclosure at paragraph 0041 teaches “modeling” is simply a form of transaction review the modeling can be viewed as being part of the abstract idea itself and even if the modeling were viewed as an element the modeling would be viewed as mere instructions to apply an exception as the claim recites only the idea of a solution or outcome i.e. the claim fails to recite details of how a solution to a problem is accomplished (MPEP § 2106(f)(1)) because as stated in the MPEP this type of recitation is equivalent to the words “apply it”. Neither the claim nor the underlying written disclosure provide any details of the nature of the modeling operation and therefore even when viewed as an element the recitation within the claim would be insufficient to form a practical application of the abstract idea under Prong Two of Step 2A as there is no further description of modelling other than the comparison to a manual transaction review. Furthermore gathering data through data feeds from multiple API connections is nothing more than mere necessary data gathering (MPEP § 2106.05(g)(3)) as it involves obtaining information about transactions using the Internet to determine whether there may be a discrepancy or violation present in the transaction and also cannot be used to form a practical application of the abstract idea under MPEP § 2106.04(d). The “framework” is described in paragraph 0032 as a regulatory framework which per paragraph 0022 is jurisdiction-specific and can be viewed as being part of the abstract idea as opposed to an element under Prong Two of Step 2A. Embedding exchange flags into the signed exchange package in order to more reliably indicate which transactions are anomalous or in violation of a regulation in order to speed up processing without any limitations specifying the technical details of the exchange flag or how it is generated or processed cannot be viewed as an improvement to computer technology under Prong Two of Step 2A (MPEP § 2106.05(a)). Routing signed packages to an escrow wallet system are nothing more than mere instructions to apply an exception (MPEP § 2106.05(f)) as the claim does not recite any details of how the routing is accomplished that could be considered as factors in establishing eligibility and the routing of funds to an escrow account is itself a fundamental economic practice and the language of the claim does not suggest anything other than use the computer as a tool to route funds to an escrow account. Therefore under Prong 2 of Step 2A claim 1 is deemed as being directed towards ineligible subject matter.
The analysis then proceeds to Step 2B in which the claim is evaluated in order to determine whether the claim contains an additional elements that form an inventive concept of the abstract idea i.e. amounts to significantly more than the abstract idea. The claim recites that the operations are performed by “one or more processing circuits” which is described in paragraph 0038 as being “…made up of various components such as a microprocessor, an ASIC, or an FPGA, and the memory device can be any type of storage or transmission device capable of providing program instructions” and can be viewed as being a general purpose processor. No improvement to the functioning of the computer is present in the claim, nor is there any improvement to any other technology or technological field. The processing circuit does nothing more than link the use of the abstract idea to a particular technological environment where the computer is merely being used as a tool to perform the abstract idea. As the written disclosure at paragraph 0041 teaches “modeling” is simply a form of transaction review which can be viewed as being part of the abstract idea itself and even if the modeling were viewed as an element the modeling would be viewed as mere instructions to apply an exception as the claim recites only the idea of a solution or outcome i.e. the claim fails to recite details of how a solution to a problem is accomplished (MPEP § 2106(f)(1)) because as stated in the MPEP this type of recitation is equivalent to the words “apply it”. Neither the claim nor the underlying written disclosure provide any details of the nature of the modeling operation and therefore even when viewed as an element the recitation within the claim would be insufficient to form a practical application of the abstract idea under Prong Two of Step 2A as there is no further description of modelling other than the comparison to a manual transaction review. Furthermore gathering data through data feeds from multiple API connections is nothing more than mere necessary data gathering (MPEP § 2106.05(g)(3)) as it involves obtaining information about transactions using the Internet to determine whether there may be a discrepancy or violation present in the transaction and also cannot be used to form a practical application of the abstract idea under MPEP § 2106.04(d). The “framework” is described in paragraph 0032 as a regulatory framework which per paragraph 0022 is jurisdiction-specific and can be viewed as being part of the abstract idea as opposed to an element under Step 2B. Embedding exchange flags into the signed exchange package in order to more reliably indicate which transactions are anomalous or in violation of a regulation in order to speed up processing without any limitations specifying the technical details of the exchange flag or how it is generated or processed cannot be viewed as an improvement to computer technology under Prong Step 2B (MPEP § 2106.05(a)). Routing signed packages to an escrow wallet system are nothing more than mere instructions to apply an exception (MPEP § 2106.05(f)) as the claim does not recite any details of how the routing is accomplished that could be considered as factors in establishing eligibility and the routing of funds to an escrow account is itself a fundamental economic practice and the language of the claim does not suggest anything other than use the computer as a tool to route funds to an escrow account. Therefore under Step 2B claim 1 is deemed as being directed towards ineligible subject matter.
Dependent claim 2 recites that the two controlling frameworks are jurisdiction specific. However as the frameworks are being interpreted as jurisdictional rule sets implemented by a government entity no elements are present that would alter the analysis under Prong Two of Step 2A or Step 2B claim 2 is also deemed as being ineligible.
Dependent claim 3 recites the authentication using a cryptographic method of a signed exchange package using a digital signature and that a signature is added using a set of controlling parameters of a central provider of the second jurisdiction. The cryptographic method is not being improved as the written disclosure relies on prior art cryptographic methods such as RSA and ECC and therefore does not contribute to eligibility under Prong Two of Step 2A or Step 2B. The remainder of claim 3 simply describes the use of unspecified security restrictions preventing fund disbursement on frozen funds and the use of a ledger for maintaining a record of deposits, withdrawals and exchanges. As there are no elements present to form either a practical application of the abstract idea under Prong Two of Step 2A or an inventive concept under Step 2B claim 3 is also deemed as being ineligible.
Dependent claim 4 only extends the abstract idea of claim 1 by recites that a controlled release of funds to the central provider system corresponds to a forfeiture and returns the funds a controlled release of funds to the sender provider system corresponds to a return of the funds. As there are no elements present to form either a practical application of the abstract idea under Prong Two of Step 2A or an inventive concept under Step 2B claim 4 is also deemed as being ineligible.
Dependent claim 5 recites the use of smart contracts to perform operations from claim 1 including the modeling (transaction review) along with generating the exchange flag, embedding the exchange flag into the signed exchange package and freezing the funds. Even if a smart contract were construed as an element per the claim the smart contract is simply part of the process of automating a manually performed process (MPEP § 2106.05(a)) that does not form either a practical application of the abstract idea under Prong Two of Step 2A or an inventive concept under Step 2B. Therefore claim 5 is also deemed as being ineligible.
Dependent claim 6 recites the storing of the smart contracts of claim 5 on a distributed ledger where the no improvements are being made to the storing operation. The claim also recites executing of the smart contracts by verifying compliance with the first framework, updating a compliance status or a compliance result on the distributed ledger. No improvements are being made to the distributed ledger or to how data is stored on the distributed ledger and therefore does not constitute either a practical application of the abstract idea under Prong Two of Step 2A or an inventive concept under Step 2B. Therefore claim 6 is also deemed as being ineligible.
Dependent claim 7 merely extends the abstract idea of claim 1 by reciting that there are a plurality of exchange flag types including terrorism detection, non-compliant exchange detection, regulatory detection, or office of foreign assets control (OFAC) detection. No additional elements are present to form either a practical application of the abstract idea under Prong Two of Step 2A or an inventive concept under Step 2B and therefore claim 7 is also deemed as being ineligible.
Dependent claim 8 recites generating a compliance report and generating a GUI dashboard regarding a compliance status of the exchange of funds, a location of the funds, and the discrepancy in the signed exchange package or the regulatory restriction. No improvement is being made to the operation of a GUI and therefore no additional elements are present to form either a practical application of the abstract idea under Prong Two of Step 2A or an inventive concept under Step 2B and therefore claim 8 is also deemed as being ineligible.
Dependent claim 9 recites generating an interest amount and processing interest payments and only extends the abstract idea of claim 1. Therefore claim 9 is also deemed as being ineligible.
Dependent claim 10 recites determining first and second access locations and updating the transaction review framework with the additional data. The written disclosure makes the equivalence of the API (already claimed in amended claim 1) with the access location and therefore appears to simply provide description information with regard to the API. Therefore as this is not a newly introduced element claim 10 is also deemed as being ineligible.
Claims 11-18 are directed towards the system for performing the method of claim 1 and do not contain any additional elements that would alter the analysis under Steps 2A and 2B. Similarly claims 19 and 20 are directed towards the computer-readable medium containing the instructions for performing the method of claim 1 and also do not contain any additional elements that would alter the analysis under Steps 2A and 2B. Therefore claims 11-20 are also deemed as being directed towards ineligible subject matter.
Statement Regarding the Prior Art
Claims 1, 11 and 19 are not taught by the prior art as Examiner was unable to find the payment of interest on an escrow account on independent claims 1, 11 and 19. However given that the claims are rejected under section 101 Examiner is unable to indicate that any subject matter is allowable unless the rejection under section 101 can be overcome.
Conclusion
The prior art made of record and not relied upon is considered pertinent to applicant's disclosure.
Dwivedi et al. “Cross-Chain Atomic Swaps without Time Locks”, IEEE, 2023 Fifth International Conference on Blockchain Computing and Applications (BCCA), December 5, 2023, pp. 606-614, is the closest non-patent literature and discloses a form of exchange involving cryptocurrencies that includes atomicity and smart contracts.
THIS ACTION IS MADE FINAL. Applicant is reminded of the extension of time policy as set forth in 37 CFR 1.136(a).
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