DETAILED ACTION
Status of Claims
Claim 1 has been canceled and claims 2-16 have been added via a preliminary amendment filed on 10 December 2024. Claims 2-16 are pending in this application. The present application is being examined under the pre-AIA first to invent provisions.
Priority
This application filed 06 December 2024 is a continuation in part of application 18/342,927, filed on 28 June 2023, and is now US Patent No. 12,198,191. Application 18/342,927 is a continuation of 17/534,263 , filed on 23 November 2021, and is now US Patent No. 11,734,759. Application 17/534,263 is a continuation of 16/726,496, filed on 24 December 2019, and is now US Patent No. 11,216,880. Application 16/726,496 is a continuation of 14/030,047, filed on 18 September 2013, and is now US Patent No. 10,572,938. Application 14/030,047 is a continuation of application 12/410,210, filed on 24 March 2009, and is now US Patent No. 8,566,219. Accordingly, this application is given priority from 24 March 2009.
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 2-16 are rejected under 35 U.S.C. 101 because the claimed invention is directed to a judicial exception (i.e., a law of nature, a natural phenomenon, or an abstract idea) without significantly more.
In the instant case, claims 2-16 are directed to a “computer-readable medium” which is one of the four statutory categories of invention.
Claims are directed to the abstract idea of mitigating risk which is grouped under fundamental business practice of mitigating risk.
in prong one of step 2A (See MPEP 2106 Patent Subject Matter Eligibility [R-10.2019]). Claims recite:
receive a trading strategy definition for a trading strategy that includes a first quantity for a first tradeable object and a second quantity for a second tradeable object, wherein the trading strategy is associated with a position risk value;
determine a first risk value and a second risk value, wherein the first risk value is associated with the first tradeable object, and the second risk value associated with the second tradeable object;
compare a combination of the first and second risk values to the position risk value associated with the trading strategy;
define, when the first and second risk values are less than the position risk value, an execution reserve quantity equal to the combination of the first and second risk values;
submit a first order to a first “exchange” when the combination of the first and second risk values are less than the position risk value, wherein the first order is associated with the first tradeable object;
receive a fill confirmation associated with the first order and updating the execution reserve quantity based on a filled quantity in the fill confirmation; and
submit in response to receiving the fill confirmation, a second order to a second “exchange”, wherein the second order is associated with the second tradeable object.
Accordingly, the claim recites an abstract idea (See 2019 Revised Patent Subject Matter Eligibility Guidance).
This judicial exception is not integrated into a practical application because, when analyzed under prong two of step 2A (See MPEP 2106.04(d) Integration of a Judicial Exception Into A Practical Application [R-07.2022]), the additional elements of the claim such as:
a server side device,
a memory,
executable by a processor,
a first electronic exchange, and
a second first electronic exchange
represent the use of a computer as a tool to perform an abstract idea and do no more than generally link the abstract idea to a particular field of use. Therefore, the additional elements do not integrate the abstract idea into a practical application as they do no more than link a computerized system to the method steps that correspond to (i.e. automating) the acts of “collecting information, analyzing the information and providing the results of the analysis”.
When analyzed under step 2B (See MPEP 2106.05 Eligibility Step 2B: Whether a Claim Amounts to Significantly More [R-07.2022]), the claim does not include additional elements that are sufficient to amount to significantly more than the judicial exception itself because the ordered combination does not offer substantially more than the sum of the functions of the elements when each is taken alone.
The computer and computer program instructions are recited at a high level of generality and are recited as performing generic computer functions routinely used in computer applications. The elements together execute in routinely and conventionally accepted coordinated manners and interact with their partner elements to achieve an overall outcome which, similarly, is merely the combined and coordinated execution of generic computer functionalities. These functionalities are well-understood, routine and conventional activities previously known to the industry. Such functions include determining risk values – i.e. mathematical calculations- and comparing data. Therefore, the use of these additional elements does no more than employ a computer as a tool to automate and/or implement the abstract idea, which cannot provide significantly more than the abstract idea itself (MPEP 2106.05(I)(A)(f) & (h)).
Thus, viewed as a whole, the combination of elements recited in the claims merely describe the concept of mitigating risk using computer technology (e.g. the processor).
Hence, claims are not patent eligible.
Dependent claims 3-16 when analyzed as a whole are held to be patent ineligible under 35 U.S.C. 101 because the additional recited limitations fail to establish that the claims are not directed to a judicial exception (Step 2A- Prong One). Nor are the claims directed to a practical application to a judicial exception (Step 2A- Prong Two).
For example, claims 3-11 and 16 are silent as to “additional elements” which integrate the abstract idea into a practical application of a judicial exception, or that are sufficient to amount to significantly more than the judicial exception. They merely further describe the abstract idea of mitigating risk.
In claims 12-15, the features:
a client device,
an automated action,
a gateway in communications, and
a plurality of client devices
add technology to the abstract idea of the independent claim. However, such devices and “automating actions” are generic technological components, and their use is in its normal, expected, and routine manner. The components are recited at a high level of generality which do not improve another technology or technical field nor the functioning of the computer itself.
Accordingly, none of the dependent claims add a technological solution to the fundamental business practice in the independent claim.
Conclusion
The claims as a whole do not amount to significantly more than the abstract idea itself. This is because the claims do not affect an improvement to another technology or technical field; the claims do not amount to an improvement to the functioning of a computer system itself; and the claims do not move beyond a general link of the use of an abstract idea to a particular technological environment.
Accordingly, there are no meaningful limitations in the claims that transform the judicial exception into a patent eligible application such that the claims amount to significantly more than the judicial exception itself.
Allowable Subject Matter
Claim 2-16, as understood, would be allowable if rewritten to overcome 35 USC § 101 rejections set forth in this Office action.
The prior art of record (Burns et al, US Pub. No. 20070078752, in view of Kaminsky et al, US Pub. No. 20020082967, in further view of Noviello, US Pub. No. 20090265282) teaches a system comprising:
a server side device including a memory storing instructions executable by a processor, the service side device configured to:
receive a trading strategy definition for a trading strategy that includes a first quantity for a first tradeable object and a second quantity for a second tradeable object, wherein the trading strategy is associated with a position risk value;
determine a first risk value and a second risk value, wherein the first risk value is associated with the first tradeable object, and the second risk value associated with the second tradeable object;
compare a combination of the first and second risk values to the position risk value associated with the trading strategy;
submit a first order to a first electronic exchange when the combination of the first and second risk values are less than the position risk value, wherein the first order is associated with the first tradeable object;
receive a fill confirmation associated with the first order; and
submit in response to receiving the fill confirmation, a second order to a second electronic exchange, wherein the second order is associated with the second tradeable object.
Noviello teaches a system and method for managing trading orders with decaying reserves, wherein a first portion of the particular quantity is a displayed quantity and a second portion of the particular quantity is a reserved quantity.
Even though, the prior art of record teaches the above-mentioned features, the prior art of record fails to teach a system configured to:
define, when the first and second risk values are less than the position risk value, an execution reserve quantity equal to the combination of the first and second risk values; and
updating the execution reserve quantity based on a filled quantity in the fill confirmation.
For these reasons claim 2 would be deemed allowable over the prior art of record and claims 3-16 would be allowed by dependency on allowed claims.
Conclusion
The prior art made of record and not relied upon is considered pertinent to applicant's disclosure:
Slezak (US Patent No. 8,583,534 B1) (November 12, 2013) “System And Method For Multi-market Risk Control In A Distributed Electronic Trading Environment”.
Wilson (US Pub. No. 20090271325 A1) (October 29, 2009) “TRADING SYSTEM AND METHOD”.
Hausman et al (US Patent No. 7,685,048 B1) (March 23, 2010) “Electronic Trading System For Forwards Spread Trades”.
Owens et al (US Pub. No. 20060085320 A1) (April 20, 2006) “Flexible System And Method For Electronic Trading”.
FEDERSPIEL et al (International Publication No. WO 03 048905 A2) (June 12, 2003) “METHOD AND SYSTEM FOR MANAGING DISTRIBUTED TRADING DATA”.
Whitesell: “Interest rate corridors and reserves”, Journal of Monetary Economics 53 (2006) 1177–1195.
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/EDWARD J BAIRD/Primary Examiner, Art Unit 3692