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 .
Status of Claims
Claims 1-17 are amended.
Claim 20 is canceled.
Claims 1-19 are pending.
Response to Remarks
Double Patenting
Applicant filed a terminal disclaimer. Accordingly, the previous rejections are withdrawn.
35 U.S.C. 112(f) Interpretation
Applicant’s amendments to the claims have overcome the previous 35 U.S.C. 112(f) interpretation.
35 U.S.C. § 101
Applicant’s amendments to the claims have overcome the previous rejections based on failing to claim statutory subject matter. Accordingly, the previous rejections are withdrawn. New grounds of rejection have been made for claims 17-19.
35 U.S.C. § 112(a)
Applicant’s amendments to the claims have overcome the previous rejections. Accordingly, the previous rejections are withdrawn.
35 U.S.C. § 112(b)
Applicant’s amendments to the claims have overcome the previous rejections, except for claim 15. Accordingly, the previous rejections are withdrawn. New grounds of rejection have been made for claims 1-16.
Claim Objections
Claim 1 is objected to because of the following informalities. The claim recites the limitation “receivem at the custodian blockchain node, a request to tokenize assets”. It appears the limitation “receivem” was unintentionally included within the claim as a typographical error. Examiner suggests amending the claim to recite “receive,” instead. Appropriate correction is required.
Claims 2-16 are also objected to per dependency upon an objected claim.
Terminal Disclaimer
The terminal disclaimer filed on 03/23/2026 disclaiming the terminal portion of any patent granted on this application which would extend beyond the expiration date of US Patent No. 12,056,766 has been reviewed and is accepted. The terminal disclaimer has been recorded.
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 17-19 are rejected under 35 U.S.C. 101 because the claimed invention is directed to an abstract idea without significantly more.
Step 1
Step 1 of the eligibility analysis asks is the claim to a process, machine, manufacture or composition of matter (See MPEP § 2106.03, subsections I and II). Claims 17-19 are directed to a computer-implemented method (i.e., process). Therefore, these claims fall within the four statutory categories of invention.
Step 2A, Prong One
Prong One asks does the claim recite an abstract idea, law of nature, or natural phenomenon (MPEP § 2106.04(II)(A)(1)). Claim 17 under a broadest reasonable interpretation recite an abstract idea because the claims describe a method of tokenized asset trading with ledger creation, tokenizing assets via consensus, verifying balances and credit, matching orders, executing cross-ledger trades, net settlements, and generating allocation reports, grouped within the “certain methods of organizing human activity” grouping of abstract ideas (MPEP § 2106.04(a)(2), subsection II). The claim limitations reciting the abstract idea are grouped within the “certain methods of organizing human activity” grouping of abstract ideas because the limitations describe fundamental economic principles or practices, including mitigating risk, and describe commercial or legal interactions, including advertising, marketing or sales activities or behaviors. The following underlined claim limitations recite the abstract idea.
A method, performed by one or more processors of a custodian blockchain node of a blockchain network, for processing transactions associated with customer tokens, the method comprising:
creating, by the custodian blockchain node, a respective blockchain ledger on a respective blockchain node of the blockchain network, the blockchain network comprising: a distributed blockchain ledger, one or more governance blockchain nodes; a plurality of custodian blockchain nodes including the custodian blockchain node; a plurality of distributed blockchain ledgers per custodian blockchain node; and a peer-to-peer messaging capability, wherein the blockchain network implements a consensus algorithm and uses a transaction broadcasting protocol;
receiving a request to tokenize assets;
tokenizing based on the request and according to the consensus algorithm, the assets onto one or more of the plurality of distributed blockchain ledgers to yield the customer tokens;
checking, at one or more of the plurality of distributed blockchain ledgers, unspent transaction outputs and sums for balances associated with one or more bids, offers, requests for quote, or orders;
performing a real-time pre-trade credit check based on the unspent transaction outputs and sums for balances;
determining whether two of the one or more bids, offers, requests for quote, or orders match;
responsive to determining that two of the one or more bids, offers, requests for quote, or orders match, submitting, to accomplish a trade, a first atomic swap request to a governance blockchain node of the blockchain network, a second atomic swap request to a first blockchain ledger associated with a first custodian blockchain node of the blockchain network, and a third atomic swap request to a second blockchain ledger associated with a second custodian blockchain node of the blockchain network;
confirming the first atomic swap request, the second atomic swap request, and the third atomic swap request to change ownership of assets concurrently with the first blockchain ledger and the second blockchain ledger to yield a trade execution;
calculating net settlement amounts due for all users in each asset between any two separate custodian blockchain nodes and their related separate distributed blockchain ledgers;
generating based on the net settlement amounts, a full allocation report for all users, all assets all related the unspent transaction outputs and proofs, the full allocation report comprising netted quantities and residual quantities;
loading the residual quantities into a blockchain-based smart contract configured on the blockchain network or otherwise creating movement instructions over non-blockchain ledger rails; and
creating an atomic transaction that burns and reallocates the netted quantities and invokes the blockchain-based smart contract or other traditional rail payments.
Step 2A, Prong Two
Prong Two asks does the claim recite additional elements that integrate the judicial exception into a practical application (MPEP § 2106.04(II)(A)(2)). Examiners evaluate integration into a practical application by: (1) identifying whether there are any additional elements recited in the claim beyond the judicial exception(s); and (2) evaluating those additional elements individually and in combination to determine whether they integrate the exception into a practical application, using one or more of the considerations discussed in more detail in MPEP §§ 2106.04(d)(1), 2106.04(d)(2), 2106.05(a) through (c) and 2106.05(e) through (h). Here, the non-underlined claim limitations above recite additional elements. The additional elements do not improve the functioning of computers, another technology, or a technical field (MPEP §§ 2106.04(d)(1) and 2106.05(a)). The Specification does not assert that the invention improves upon conventional functioning of a computer, or upon conventional technology or technological processes. The claim does not purport to improve computer capabilities, but rather invokes computers merely as a tool by adding general purpose computers post-hoc to an abstract idea. A commonplace business method being applied on a general-purpose computer is not sufficient to show an improvement to technology. The claim must include more than mere instructions to perform the method on a generic component or machinery to qualify as an improvement to an existing technology. The Specification and the claim language provide evidence that the focus of the claim is on a scheme. An improvement in the abstract idea itself is not an improvement in technology. Even if the Specification describes technical improvements, they are not claimed. The additional elements do not apply the abstract idea to effect a particular treatment or prophylaxis for a disease or medical condition (MPEP § 2106.04(d)(2)). The additional elements do not implement the abstract idea with a particular machine or manufacture that is integral to the claim (MPEP § 2106.05(b)). A general-purpose computer that applies a judicial exception, such as an abstract idea, by use of conventional computer functions does not qualify as a particular machine. The additional elements do not transform or reduce a particular article to a different state or thing (MPEP § 2106.05(c)). The claim does not recite any transformation of an article where the article changes to a different state or thing. Nor do the additional elements apply the abstract idea in a meaningful way or impose a meaningful limit on it beyond linking its use to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception (MPEP § 2106.05(e)). The additional elements generally link the use of the judicial exception to a particular technological environment. A wholly generic computer implementation is not generally the sort of additional feature that provides any practical assurance that the process is more than a drafting effort designed to monopolize the abstract idea itself. The additional elements individually and in combination, merely serve as a tool to perform the abstract idea (MPEP § 2106.05(f)). Implementing an abstract idea on a generic computer, does not integrate the abstract idea into a practical application, similar to how the recitation of the computer in the claim in Alice amounted to mere instructions to apply the abstract idea of intermediated settlement on a generic computer. Use of a computer or other machinery in its ordinary capacity for economic or other tasks or simply adding a general-purpose computer or computer components after the fact to an abstract idea does not integrate a judicial exception into a practical application. The additional elements are being used in their ordinary capacity. The additional elements do no more than merely invoke computers or machinery as a tool to perform an existing process. The additional elements generally link the use of the abstract idea to a particular technological environment or field of use (MPEP § 2106.05(h)). Limitations that amount to merely indicating a field of use or technological environment in which to apply a judicial exception cannot integrate a judicial exception into a practical application. Thus, the additional elements do not integrate the abstract idea into a practical application. Accordingly, the claims are directed to the abstract idea identified above.
Step 2B
Step 2B determines whether the claim as a whole amount to significantly more than the abstract idea itself (MPEP § 2106.05). In Step 2B examiners carry over their identification of the additional element(s) in the claim from Step 2A Prong Two; carry over their conclusions from Step 2A Prong Two on the considerations discussed in MPEP §§ 2106.05(a)-(c), (e), (f) and (h); re-evaluate any additional element or combination of elements that was considered to be insignificant extra-solution activity per MPEP § 2106.05(g), because if such re-evaluation finds that the element is unconventional or otherwise more than what is well-understood, routine, conventional activity in the field, this finding may indicate that the additional element is no longer considered to be insignificant; and evaluate whether any additional element or combination of elements are other than what is well-understood, routine, conventional activity in the field, or simply append well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception, per MPEP § 2106.05(d). The additional elements individually and in combination, merely serve as a tool to perform the abstract idea (MPEP § 2106.05(f)). The additional elements generally link the use of the abstract idea to a particular technological environment or field of use (MPEP § 2106.05(h)). Individually, the additional elements do not amount to significantly more than the abstract idea. Here, the additional elements simply append well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception, e.g., a claim to an abstract idea requiring no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional activities previously known to the industry. A factual determination is required to support a conclusion that an additional element (or combination of additional elements) is well-understood, routine, conventional activity. Here, the specification of the application indicates that additional elements are well-known or conventional (See Spec. 0102-0108). There is nothing in the specification to indicate that the operations recited in the claims require any specialized hardware or inventive computer components or that the claimed invention is implemented using other than generic computer components to perform generic computer functions. The ordered combination recites no more than the individual elements do. Thus, the additional elements are not significantly more than the abstract idea. Accordingly, the claims are directed to the abstract idea identified above without significantly more. The claims are not eligible, warranting a rejection for lack of subject matter eligibility and concluding the eligibility analysis.
Dependent Claims
Claim 18 recites an abstract idea because the claim describes a method of tokenized asset trading with ledger creation, tokenizing assets via consensus, verifying balances and credit, matching orders, executing cross-ledger trades, net settlements, and generating allocation reports, grouped within the “certain methods of organizing human activity” grouping of abstract ideas. The following underlined claim limitations recite the abstract idea. The non-underlined claim limitations recite additional elements. The additional elements do not integrate the abstract idea into a practical application and are not significantly more than the abstract idea because the additional elements individually and in combination, merely serve as a tool to perform the abstract idea and generally link the use of the abstract idea to a particular technological environment or field of use. The additional elements, individually and in combination, are well-understood, routine, conventional activity (See Spec. 0102-0108). Therefore, the claim is not eligible.
performing arbitrary payment transactions between blockchain ledger addresses.
Claim 19 recites an abstract idea because the claim describes a method of tokenized asset trading with ledger creation, tokenizing assets via consensus, verifying balances and credit, matching orders, executing cross-ledger trades, net settlements, and generating allocation reports, grouped within the “certain methods of organizing human activity” grouping of abstract ideas. The following underlined claim limitations recite the abstract idea. The non-underlined claim limitations recite additional elements. The additional elements do not integrate the abstract idea into a practical application and are not significantly more than the abstract idea because the additional elements individually and in combination, merely serve as a tool to perform the abstract idea and generally link the use of the abstract idea to a particular technological environment or field of use. The additional elements, individually and in combination, are well-understood, routine, conventional activity (See Spec. 0102-0108). Therefore, the claim is not eligible.
wherein the consensus algorithm comprises a just-in-time consensus algorithm.
Claim Rejections - 35 USC § 112
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 1-16 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 pre-AIA the applicant regards as the invention.
Unclear Scope
Claim 1 is directed to a product (e.g., "A distributed blockchain-based trading and settlement system comprising”). For products, the claim limitations will define discrete physical structures or materials (See MPEP 2103(I)(C)). Here, claim 1 recites that the "system" comprises structural recitations of the "a blockchain network comprising: a governance blockchain node; a plurality of custodian blockchain nodes including a custodian blockchain node that holds customer tokens for processing a transaction associated with the customer tokens and to redeem the customer tokens, wherein a customer is independent of an operator that manages the customer tokens, and wherein the customer owns the customer tokens; a plurality of distributed blockchain ledgers associated with the plurality of custodian blockchain nodes; a peer-to-peer messaging component; and a consensus algorithm configured to reach a common agreement regarding a state of the plurality of distributed blockchain ledgers; an atomic-swap compute device; and a cross-custodian net settlement compute device". However, the "system" also comprises functions where it is unclear what claimed structural recitations of the "system" these functions are attributed to. Specifically, claim 1 recites “wherein the distributed blockchain-based trading and settlement system is configured to: … receive, from a trader device, a bid, an offer, or a request for quote, for an order; … perform a real-time pre-trade credit check; determine whether the order matches another order; transmit, to the trader device, a request for a digital signature authorizing a trade; receive, from the trader device, a signed authorization for the trade; ensure that an atomic swap occurs that changes ownership of assets concurrently with two respective distributed blockchain ledgers to yield a trade execution; calculate net settlement amounts due for all users in each asset between any two separate custodian blockchain nodes and their related separate distributed blockchain ledgers; generate a full allocation report for all users, all assets all related the unspent transaction outputs and proofs, the full allocation report comprising netted quantities and residual quantities; load the residual quantities into a blockchain-based smart contract or otherwise creating movement instructions over non-blockchain ledger rails; and create an atomic transaction that burns and reallocates the netted quantities and invokes the blockchain-based smart contract or other traditional rail payments.” Therefore, the claim is indefinite and rejected under 35 U.S.C. 112(b) or pre-AIA 35 U.S.C. 112, second paragraph.
Claim 2 is rejected for similar reasoning as claim 1 as the claim recites “wherein the distributed blockchain-based trading and settlement system is further configured to: perform arbitrary payment transactions between blockchain ledger addresses”, where it is unclear what claimed structural recitations of the "system" these functions are attributed to. Therefore, the claim is indefinite and rejected under 35 U.S.C. 112(b) or pre-AIA 35 U.S.C. 112, second paragraph.
Claim 8 is rejected for similar reasoning as claim 1 as the claim recites “wherein the distributed blockchain-based trading and settlement system is further configured to: perform one-way payment orders”, where it is unclear what claimed structural recitations of the "system" these functions are attributed to. Therefore, the claim is indefinite and rejected under 35 U.S.C. 112(b) or pre-AIA 35 U.S.C. 112, second paragraph.
Claim 9 is rejected for similar reasoning as claim 1 as the claim recites “wherein the distributed blockchain-based trading and settlement system is further configured to: receive quotes and orders from third parties; and execute order matches in lit book or dark book or both”, where it is unclear what claimed structural recitations of the "system" these functions are attributed to. Therefore, the claim is indefinite and rejected under 35 U.S.C. 112(b) or pre-AIA 35 U.S.C. 112, second paragraph.
Claim 10 is rejected for similar reasoning as claim 1 as the claim recites “wherein the distributed blockchain-based trading and settlement system is further configured to: maintain and publishing an order book; and aggregate outside order books and routing orders to the outside order books for execution”, where it is unclear what claimed structural recitations of the "system" these functions are attributed to. Therefore, the claim is indefinite and rejected under 35 U.S.C. 112(b) or pre-AIA 35 U.S.C. 112, second paragraph.
Claim 12 is rejected for similar reasoning as claim 1 as the claim recites “wherein the distributed blockchain-based trading and settlement system is further configured to: lend as an on-chain reposition transaction, wherein the on-chain reposition transaction can be forced to be unwound with a countervailing transaction based on collateral and risk rules”, where it is unclear what claimed structural recitations of the "system" these functions are attributed to. Therefore, the claim is indefinite and rejected under 35 U.S.C. 112(b) or pre-AIA 35 U.S.C. 112, second paragraph.
Claim 13 is rejected for similar reasoning as claim 1 as the claim recites “wherein the distributed blockchain-based trading and settlement system is further configured to: perform programmatic intraday borrowing based on preset rules and preferences managed within a trader module”, where it is unclear what claimed structural recitations of the "system" these functions are attributed to. Therefore, the claim is indefinite and rejected under 35 U.S.C. 112(b) or pre-AIA 35 U.S.C. 112, second paragraph.
Claim 15 recites "wherein the system is integrated with a decentralized exchange and both puts liquidity into the decentralized exchange and takes liquidity off of the decentralized exchange”. However, it is unclear whether “is integrated with” is to be interpreted as “comprising” or not. Therefore, these claims are indefinite and are rejected under 35 U.S.C. 112(b) or pre-AIA 35 U.S.C. 112, second paragraph.
See In re Zletz, 893 F.2d 319, 13USPQ2d 1320 (Fed. Cir. 1989) and MPEP 2173.02 (III)(B) which states “Examiners should bear in mind that "[a]n essential purpose of patent examination is to fashion claims that are precise, clear, correct, and unambiguous. Only in this way can uncertainties of claim scope be removed, as much as possible, during the administrative process.”
Claims 2-16 are also rejected per dependency upon a rejected claim.
Claims Free of Art
The closest prior art of record is US 2020/0273048 A1 (“Andon”). Andon teaches:
a blockchain network comprising: a governance blockchain node; a plurality of custodian blockchain nodes including a custodian blockchain node that holds customer tokens for processing a transaction associated with the customer tokens and to redeem the customer tokens, wherein a customer is independent of an operator that manages the customer tokens, and wherein the customer owns the customer tokens; a plurality of distributed blockchain ledgers associated with the plurality of custodian blockchain nodes; a peer-to-peer messaging component; and a consensus algorithm configured to reach a common agreement regarding a state of the plurality of distributed blockchain ledgers; an atomic-swap compute device; and a cross-custodian net settlement compute device, wherein the distributed blockchain-based trading and settlement system is configured to (paras 82-84, 134, 143-144):
create, at the custodian blockchain node, a respective blockchain ledger on a respective blockchain node of the blockchain network, the respective blockchain ledger being one of the plurality of distributed ledgers; (paras 74, 76, 88)
receivem at the custodian blockchain node, a request to tokenize assets; (paras 43, 45-46, 48-49, 64, 70, 87)
tokenize, at the custodian blockchain node and based on the request and according to the consensus algorithm, the assets onto a distributed blockchain ledger of the plurality of distributed blockchain ledgers to yield the customer tokens (paras 43, 45-46, 48-49, 64, 70, 87)
receive, from a trader device, a bid, an offer, or a request for quote, for an order; (paras 54, 63, 79, 84, 90-91, 107)
check, at one or more of the plurality of distributed blockchain ledgers, unspent transaction outputs and sums for balances associated with the order; (paras 77, 85)
perform a real-time pre-trade credit check; (paras 44, 64, 78-79, 116)
determine whether the order matches another order; (paras 54, 63, 79, 84, 90-91, 107)
transmit, to the trader device, a request for a digital signature authorizing a trade; (paras 54, 63, 79, 84, 90-91, 107)
receive, from the trader device, a signed authorization for the trade; (paras 54, 63, 79, 84, 90-91, 107)
receive, at the atomic-swap compute device, transactions corresponding to the trade; (paras 54, 63, 79, 84, 90-91, 107)
ensure that an atomic swap occurs that changes ownership of assets concurrently with two respective distributed blockchain ledgers to yield a trade execution; (paras 63, 74, 79, 85, 88, 124)
load the residual quantities into a blockchain-based smart contract or otherwise creating movement instructions over non-blockchain ledger rails; and (paras 48, 108)
create an atomic transaction that burns and reallocates the netted quantities and invokes the blockchain-based smart contract or other traditional rail payments. (paras 108)
Therefore, the prior art does not teach, neither singly nor in combination the following:
calculate net settlement amounts due for all users in each asset between any two separate custodian blockchain nodes and their related separate distributed blockchain ledgers;
generate a full allocation report for all users, all assets all related the unspent transaction outputs and proofs, the full allocation report comprising netted quantities and residual quantities;
Conclusion
The following prior art made of record and not relied upon is considered pertinent to applicant's disclosure.
US 2021/0248594 A1 to Yantis et al. discloses: Systems, methods, platforms, and devices that generate, store, transact, transfer, exchange, and/or otherwise process digital tokens are described. In embodiments, systems, methods, platforms, and devices obtain an identifier for an item that includes a set of item attributes, generate a digital token including a set of digital attributes that correspond to the set of item attributes, and cryptographically link the digital token to one or more units of the item. The digital token may be transferred, exchanged, redeemed, or otherwise transacted, which provides both the flexibility and convenience of virtual item transactions and the reliability and value of physical item transactions.
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.
Any inquiry concerning this communication or earlier communications from the examiner should be directed to Ari Shahabi whose telephone number is (571)272-2565. The examiner can normally be reached M-F: 8:00-5:00.
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If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, John W Hayes can be reached at 571-272-6708. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
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/ARI SHAHABI/Primary Examiner, Art Unit 3697
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