DETAILED ACTION
Claims 18 – 37, which are currently pending, are fully considered below.
Claims 1 – 17 are canceled.
Claims 18 – 37 are new.
Response to Arguments
Applicant’s arguments with respect to claims 1 – 17 are moot in view of the new ground of rejection, which was necessitated by applicant’s amendments to the claims on September 19, 2025.
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 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 18 - 37 are rejected under 35 U.S.C. 101 because the claimed invention is directed to the judicial exception of an abstract idea without significantly more.
Step 1: Is the claimed invention to a process, machine, manufacture or
composition of matter?
Yes, the claims fall within at least one of the four categories of patent eligible
subject.
Claims 18, 25, and 32 recite:
receiving an error probability for each of the groupings;
receiving one or more risk feature values associated with a plurality of data entities from an account or group of accounts of a financial ledger;
generating a flow metric for each grouping by evaluating a magnitude of values
within at least one of the criterions for the data entries of each grouping;
determining a materiality factor for each grouping using the flow metric for the
particular grouping, a planned materiality threshold, and a performance materiality;
and
generating a risk of material error for each of the groupings using the error
probability of the particular one of the groupings and the materiality factor for the
particular one of the groupings.
Step 2A Prong One: Does the claim recite an abstract idea, law or nature,
or natural phenomenon?
Yes. Claim 1 limitations of “receiving…” “receiving…” and “generating…” “determining…” and “generating…” recite abstract ideas as mental processes. Regarding the “receiving” steps, the human mind can receive an error and one or more risk features. Regarding the “determining” step, the human mind can determine a factor for grouping. The limitations may be done as mental processes, in the human mind.
MENTAL PROCESSES MPEP 2106.04(a)(2)(III).
The courts consider a mental process (thinking) that "can be performed in the human mind, or by a human using a pen and paper" to be an abstract idea. CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372, 99 USPQ2d 1690, 1695 (Fed. Cir. 2011). As the Federal Circuit explained, "methods which can be performed mentally, or which are the equivalent of human mental work, are unpatentable abstract ideas the ‘basic tools of scientific and technological work’ that are open to all.’" 654 F.3d at 1371, 99 USPQ2d at 1694 (citing Gottschalk v. Benson, 409 U.S. 63, 175 USPQ 673 (1972)). See also Mayo Collaborative Servs. v. Prometheus Labs. Inc., 566 U.S. 66, 71, 101 USPQ2d 1961, 1965 (2012) ("‘[M]ental processes[] and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work’" (quoting Benson, 409 U.S. at 67, 175 USPQ at 675)); Parker v. Flook, 437 U.S. 584, 589, 198 USPQ 193, 197 (1978) (same).
Accordingly, the "mental processes" abstract idea grouping is defined as concepts performed in the human mind, and examples of mental processes include observations, evaluations, judgments, and opinions.
The courts do not distinguish between mental processes that are performed entirely in the human mind and mental processes that require a human to use a physical aid (e.g., pen and paper or a slide rule) to perform the claim limitation. See, e.g., Benson, 409 U.S. at 67, 65, 175 USPQ at 674-75, 674 (noting that the claimed "conversion of [binary-coded decimal] numerals to pure binary numerals can be done mentally," i.e., "as a person would do it by head and hand."); Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1139, 120 USPQ2d 1473, 1474 (Fed. Cir. 2016) (holding that claims to a mental process of "translating a functional description of a logic circuit into a hardware component description of the logic circuit" are directed to an abstract idea, because the claims "read on an individual performing the claimed steps mentally or with pencil and paper").
Nor do the courts distinguish between claims that recite mental processes performed by humans and claims that recite mental processes performed on a computer. As the Federal Circuit has explained, "[c]ourts have examined claims that required the use of a computer and still found that the underlying, patent-ineligible invention could be performed via pen and paper or in a person’s mind." Versata Dev. Group v. SAP Am., Inc., 793 F.3d 1306, 1335, 115 USPQ2d 1681, 1702 (Fed. Cir. 2015). See also Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318, 120 USPQ2d 1353, 1360 (Fed. Cir. 2016) (‘‘[W]ith the exception of generic computer-implemented steps, there is nothing in the claims themselves that foreclose them from being performed by a human, mentally or with pen and paper.’’); Mortgage Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1324, 117 USPQ2d 1693, 1699 (Fed. Cir. 2016) (holding that computer-implemented method for "anonymous loan shopping" was an abstract idea because it could be "performed by humans without a computer").
Because both product and process claims may recite a "mental process", the phrase "mental processes" should be understood as referring to the type of abstract idea, and not to the statutory category of the claim. The courts have identified numerous product claims as reciting mental process-type abstract ideas, for instance the product claims to computer systems and computer-readable media in Versata Dev. Group. v. SAP Am., Inc., 793 F.3d 1306, 115 USPQ2d 1681 (Fed. Cir. 2015).
Step 2A Prong 2: Does the claim recite additional elements that integrate the judicial exception into a practical application?
No. Claims 18, 25, and 32 do not recite additional elements that integrate the judicial exception into a practical application of the exception. The “receiving” step may alternatively be interpreted as merely data gathering under the insignificant extra solution activity. The limitation “generating a flow metric for each grouping by evaluating a magnitude of values within at least one of the criterions for the data entries of each grouping” fails to integrate the judicial exception into a practical application because the claim merely adds an insignificant extra-solution activity to the judicial exception. The limitation “generating a risk of material error for each of the groupings using the error probability of the particular one of the groupings and the materiality factor for the particular one of the groupings” fails to integrate the judicial exception into a practical application by generally linking the use of a judicial exception to a particular technological environment or field of use.
Integration of a Judicial Exception Into A Practical Application 2106.04(d)
The Supreme Court has long distinguished between principles themselves (which are not patent eligible) and the integration of those principles into practical applications (which are patent eligible). See, e.g., Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 80, 84, 101 USPQ2d 1961, 1968-69, 1970 (2012) (noting that the Court in Diamond v. Diehr found ‘‘the overall process patent eligible because of the way the additional steps of the process integrated the equation into the process as a whole,’’ but the Court in Gottschalk v. Benson ‘‘held that simply implementing a mathematical principle on a physical machine, namely a computer, was not a patentable application of that principle’’). Similarly, in a growing body of decisions, the Federal Circuit has distinguished between claims that are ‘‘directed to’’ a judicial exception (which require further analysis to determine their eligibility) and those that are not (which are therefore patent eligible), e.g., claims that improve the functioning of a computer or other technology or technological field. See Diamond v. Diehr, 450 U.S. 175, 209 USPQ 1 (1981); Gottschalk v. Benson, 409 U.S. 63, 175 USPQ 673 (1972). See, e.g., MPEP § 2106.06(b) (summarizing Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 118 USPQ2d 1684 (Fed. Cir. 2016), McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 120 USPQ2d 1091 (Fed. Cir. 2016), and other cases that were eligible as improvements to technology or computer functionality instead of being directed to abstract ideas).
The Supreme Court and Federal Circuit have identified a number of considerations as relevant to the evaluation of whether the claimed additional elements demonstrate that a claim is directed to patent-eligible subject matter. The list of considerations here is not intended to be exclusive or limiting. Additional elements can often be analyzed based on more than one type of consideration and the type of consideration is of no import to the eligibility analysis. Additional discussion of these considerations, and how they were applied in particular judicial decisions, is provided in MPEP § 2106.05(a) through (c) and MPEP § 2106.05(e) through (h).
Limitations the courts have found indicative that an additional element (or combination of elements) may have integrated the exception into a practical application include:
An improvement in the functioning of a computer, or an improvement to other technology or technical field, as discussed in MPEP §§ 2106.04(d)(1) and 2106.05(a);
Applying or using a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition, as discussed in MPEP § 2106.04(d)(2); [AltContent: rect]
Implementing a judicial exception with, or using a judicial exception in conjunction with, a particular machine or manufacture that is integral to the claim, as discussed in MPEP § 2106.05(b);
Effecting a transformation or reduction of a particular article to a different state or thing, as discussed in MPEP § 2106.05(c); and
Applying or using the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception, as discussed in MPEP § 2106.05(e).
The courts have also identified limitations that did not integrate a judicial exception into a practical application:
Merely reciting the words "apply it" (or an equivalent) with the judicial exception, or merely including instructions to implement an abstract idea on a computer, or merely using a computer as a tool to perform an abstract idea, as discussed in MPEP § 2106.05(f);
Adding insignificant extra-solution activity to the judicial exception, as discussed in MPEP § 2106.05(g); and
Generally linking the use of a judicial exception to a particular technological environment or field of use, as discussed in MPEP § 2106.05(h).
Step 2B: Does the claim recite additional elements that amount to
significantly more than the abstract idea?
No. The claims do not include additional elements that are sufficient to amount to significantly more than the abstract idea.
THE SEARCH FOR AN INVENTIVE CONCEPT MPEP 2106.05(I)
The second part of the Alice/Mayo test is often referred to as a search for an inventive concept. Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208, 217, 110 USPQ2d 1976, 1981 (2014) (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71-72, 101 USPQ2d 1961, 1966 (2012)).
An inventive concept "cannot be furnished by the unpatentable law of nature (or natural phenomenon or abstract idea) itself." Genetic Techs. Ltd. v. Merial LLC, 818 F.3d 1369, 1376, 118 USPQ2d 1541, 1546 (Fed. Cir. 2016). See also Alice Corp., 573 U.S. at 21-18, 110 USPQ2d at 1981 (citing Mayo, 566 U.S. at 78, 101 USPQ2d at 1968 (after determining that a claim is directed to a judicial exception, "we then ask, ‘[w]hat else is there in the claims before us?") (emphasis added)); RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1327, 122 USPQ2d 1377 (Fed. Cir. 2017) ("Adding one abstract idea (math) to another abstract idea (encoding and decoding) does not render the claim non-abstract"). Instead, an "inventive concept" is furnished by an element or combination of elements that is recited in the claim in addition to (beyond) the judicial exception, and is sufficient to ensure that the claim as a whole amounts to significantly more than the judicial exception itself. Alice Corp., 573 U.S. at 27-18, 110 USPQ2d at 1981 (citing Mayo, 566 U.S. at 72-73, 101 USPQ2d at 1966).
Claims 19, 26, and 33 recite:
Wherein the materiality factor is a ratio of the flow metric and the planned materiality threshold raised to the power of one minus the performance materiality.
Step 2A Prong One: Does the claim recite an abstract idea, law or nature,
or natural phenomenon?
Yes. Claim 19, 26, and 33 limitations of “wherein the materiality factor…” recites abstract ideas as mental processes. The limitations may be done as mental processes, in the human mind.
Step 2A Prong 2: Does the claim recite additional elements that integrate the judicial exception into a practical application?
No. Claims 19, 26, and 33 do not recite additional elements that integrate the judicial exception into a practical application of the exception
Step 2B: Does the claim recite additional elements that amount to
significantly more than the abstract idea?
No. The claims do not include additional elements that are sufficient to amount to significantly more than the abstract idea.
Claims 20, 27, and 34 disclose:
Wherein the risk of material error is the error probability scaled by the materiality factor.
Step 2A Prong One: Does the claim recite an abstract idea, law or nature,
or natural phenomenon?
Yes. Claims 20, 27, and 34 limitation of “wherein the risk…” recites abstract ideas as mental processes. The limitations may be done as mental processes, in the human mind.
Step 2A Prong 2: Does the claim recite additional elements that integrate the judicial exception into a practical application?
No. Claims 20, 27, and 34 do not recite additional elements that integrate the judicial exception into a practical application of the exception..
Step 2B: Does the claim recite additional elements that amount to
significantly more than the abstract idea?
No. The claims do not include additional elements that are sufficient to amount to significantly more than the abstract idea.
Claims 21 and 28 disclose:
wherein the risk of material error is an average of the error probability scaled by the materiality factor, a control risk of the particular one of the groupings, and the inherent risk of the particular one of the groupings.
Step 2A Prong One: Does the claim recite an abstract idea, law or nature,
or natural phenomenon?
Yes. Claim 21 and 28 limitations wherein the risk of material error… recites abstract ideas as mental processes. The limitations may be done as mental processes, in the human mind.
Step 2A Prong 2: Does the claim recite additional elements that integrate the judicial exception into a practical application?
No. Claims 21 and 28 do not recite additional elements that integrate the judicial exception into a practical application of the exception.
Step 2B: Does the claim recite additional elements that amount to
significantly more than the abstract idea?
No. The claims do not include additional elements that are sufficient to amount to significantly more than the abstract idea.
Claims 22, 29, and 35 disclose:
Wherein the error probability is a quantitative value calculated based on individual error probabilities of each of the data entries within the particular grouping.
Step 2A Prong One: Does the claim recite an abstract idea, law or nature,
or natural phenomenon?
Yes. Claim 22, 29, and 35 limitations of “wherein the error probability…” recite abstract ideas as mental processes. The limitations may be done as mental processes, in the human mind.
Step 2A Prong 2: Does the claim recite additional elements that integrate the judicial exception into a practical application?
No. Claims 22, 29, and 35 do not recite additional elements that integrate the judicial exception into a practical application of the exception.
Step 2B: Does the claim recite additional elements that amount to
significantly more than the abstract idea?
No. The claims do not include additional elements that are sufficient to amount to significantly more than the abstract idea.
Claims 23, 30, and 36 disclose:
wherein the receiving an error probability for each of the groupings comprises generating an error probability for each of the groupings by analyzing the data entries within each of the groupings, the error probability including an ensemble of algorithms that each provide an indication of a potential error within the particular grouping.
Step 2A Prong One: Does the claim recite an abstract idea, law or nature,
or natural phenomenon?
Yes. Claims 23, 30, and 36 limitations wherein the risk of material error… recites abstract ideas as mental processes. The limitations may be done as mental processes, in the human mind.
Step 2A Prong 2: Does the claim recite additional elements that integrate the judicial exception into a practical application?
No. Claims 23, 30, and 36 do not recite additional elements that integrate the judicial exception into a practical application of the exception.
Step 2B: Does the claim recite additional elements that amount to
significantly more than the abstract idea?
No. The claims do not include additional elements that are sufficient to amount to significantly more than the abstract idea.
Claims 24, 31, and 37 disclose:
Highlighting one or more of the groupings within the data set based on the risk of material error of the plurality of groupings being above a predetermined threshold.
Step 2A Prong One: Does the claim recite an abstract idea, law or nature,
or natural phenomenon?
Yes. Claim 24, 31, and 37 limitations of “highlighting one or more groupings…” recite abstract ideas as mental processes. The limitations may be done as mental processes, in the human mind.
Step 2A Prong 2: Does the claim recite additional elements that integrate the judicial exception into a practical application?
No. Claims 24, 31, and 37 do not recite additional elements that integrate the judicial exception into a practical application of the exception.
Step 2B: Does the claim recite additional elements that amount to
significantly more than the abstract idea?
No. The claims do not include additional elements that are sufficient to amount to significantly more than the abstract idea.
Conclusion/Contact Information
Any inquiry concerning this communication or earlier communications from the examiner should be directed to ALEXANDRIA Y BROMELL whose telephone number is (571)270-3034. The examiner can normally be reached M-F 8-4.
Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice.
If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, Ajay Bhatia can be reached at 571-272-3906. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
Information regarding the status of published or unpublished applications may be obtained from Patent Center. Unpublished application information in Patent Center is available to registered users. To file and manage patent submissions in Patent Center, visit: https://patentcenter.uspto.gov. Visit https://www.uspto.gov/patents/apply/patent-center for more information about Patent Center and https://www.uspto.gov/patents/docx for information about filing in DOCX format. For additional questions, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.
/ALEXANDRIA Y BROMELL/Primary Examiner, Art Unit 2156 June 25, 2026
Prosecution Insights