DETAILED ACTION
1. 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 .
2. Status of Application and Claims
Claims 2-4 and 7-21 are pending.
Claims 2, 4, 7 and 14 were amended or newly added in the Applicant’s filing(s) on 6/24/2026.
Claims 5 and 6 were cancelled in the Applicant's filing(s) on 6/24/2026.
This office action is being issued in response to the Applicant's filing(s) on 6/24/2026.
3. 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 2-21 are rejected under 35 U.S.C. § 101 because the claimed invention is directed to an abstract idea without significantly more.
STEP 1
The claimed invention falls within one of the four statutory categories of invention (i.e., process, machine, manufacture and composition of matter). See MPEP §2106.03.
STEP 2A – PRONG ONE
The claim(s) recite(s) a system comprising:
…
an order book comprising a plurality of order records stored …, each order record corresponding to a respective order and containing the order data of the respective order and a marketable flag;
an [entity] configured to receive incoming orders … and add incoming orders to the order book;
a quote handler [entity] configured to receive from the market … first market data for the security specifying current bid and ask data for the security, determine based on the received first market data a marketability status for respective orders in the order book, and update the marketable flag of the respective orders in the order book to reflect a current marketability status of the respective orders;
a matching [entity] configured to match a respective order in the order book with a respective contra order in the order book and store … match data indicating the match between the respective order and contra order and an initial status of the match as unbroken, wherein the respective order and contra order are selected from a plurality of orders in the order book that are marketable, the respective contra order has a side contra to the side of the respective order, and the strategy of the respective order and the strategy of the respective contra order are compatible; and
a trade processor [entity] configured to receive from the market … second market data indicating reported third-party trades of the security at respective traded quantities and prices and to intermittently issue fills of the security between a respective matched order and contra order in response to receipt of instances of new second market data, each fill being at a price that is a function of the traded price in received market data and of a quantity that is a function of a determined rate for the respective matched order and contra order applied to the traded quantity in the new second market data, the selected determined rate meeting the strategies of the respective matched order and of the contra order,
wherein a respective match between an order and a contra order is broken if either order in the respective match becomes untradable or if either order in the respective match is filled; and
wherein the quote handler [entity], matching [entity] and trade processor [entity] operate in parallel.
These limitations, as drafted, under its broadest reasonable interpretation, covers a series of steps instructing how to process a trade order for a security which is a fundamental economic practice, a sub-category of certain method(s) of organizing human activity, an enumerated grouping of abstract ideas. See MPEP §2106.04(a)(2)(II)(A).
Accordingly, the claimed invention recites an abstract idea.
STEP 2A – PRONG TWO
The claimed invention recites additional elements (i.e., computer elements) of communication interface(s), specifically an order interface, a market data interface and a trade reporting interface (Claim(s) 2), an I/O module (Claim(s) 2), a memory (Claim(s) 2) and engine(s) (Claim(s) 2).
The claimed invention does not include additional elements that integrate the judicial exception into a practical application of the exception because the claims do not provide improvements to another technology or technical field; improvements to the functioning of the computer itself; are not applying or using a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition; are not applying the judicial exception with or by use of a particular machine; are not effecting a transformation or reduction of a particular article to a different state or thing; and are not applying the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment. See MPEP §2106.04(d).
The additional elements are recited at a high-level of generality such that it amounts no more than mere instructions to apply the exception using a generic computer component. See MPEP §2106.05(f). Alternately, the additional elements amount to no more than generally linking the exception to a particular technological environment or field of use. See MPEP §2106.05(h). Accordingly, these additional element(s), when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because it does not impose any meaningful limits on practicing the abstract idea.
Accordingly, the claimed invention is directed to an abstract idea without a practical application.
STEP 2B
Upon reconsideration of the indicia noted under Step 2A in concert with the Step 2B considerations, the additional claim element(s) amounts to adding the words “apply it” (or an equivalent) with the judicial exception, or mere instructions to implement an abstract idea on a computer. See MPEP §2106.07(a)(II). The same analysis applies in Step 2B, i.e., mere instructions to apply an exception using a generic computer component cannot integrate a judicial exception into a practical application at Step 2A or provide an inventive concept in Step 2B. The claim does not provide an inventive concept significantly more than the abstract idea.
Accordingly, these additional elements, when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea.
DEPENDENT CLAIMS
Dependent Claim(s) 3, 4 and 7-21 recite claim limitations that further define the abstract idea recited in respective independent Claim(s) 2. As such, the dependent claims are also grouped an abstract idea utilizing the same rationale as previously asserted against the independent claims.
No additional computer components other than those found in the respective independent claims are recited, thus it is presumed that the claim is further utilizing the same generically recited computer.
As such, the dependent claims do not include any additional elements that integrate the abstract idea into a practical application of the judicial exception or are sufficient to amount to significantly more than the judicial exception when considered both individually and as an ordered combination.
Accordingly, the dependent claim(s) are also not patent eligible.
Appropriate correction is requested.
4. No Prior Art Rejection
Applicant’s amended claims have overcome the prior art of record.
Specifically, the prior art fails to teach or suggest the limitations of:
a trade processor engine configured to receive second market data indicating reported third-party trades of the security at respective traded quantities and prices and to intermittently issue fills of the security between a respective matched order and contra order in response to receipt of instances of new second market data, each fill being at a price that is a function of the traded price in received market data and of a quantity that is a function of a determined rate for the respective matched order and contra order applied to the traded quantity in the new second market data. (as in Claim 1).
Bonig (US Patent 11,216,875) discloses maintaining an order book; marking incoming orders with a marketable flag (i.e., transactable flag); and matching flagged orders and contra orders, wherein their underlying strategies are compatible (i.e., order parameters are mutually satisfiable). (see col. 12, line 59 – col. 13, line 20; col. 24, line 53 – col. 25, line 40; col. 30, lines 34-45).
The prior art does not teach intermittently issuing fills of the flagged and matched orders based upon “a function of the traded price in received market data and of a quantity that is a function of a determined rate for the respective matched order and contra order applied to the traded quantity in the new second market data.”
No further prior art has been asserted against the claimed invention.
5. Response to Arguments
Applicant's arguments filed 6/24/2026 have been fully considered but they are not persuasive.
§101 Rejection
Step 2A Prong Two
Applicant argues that the claimed invention recites a practical application, specifically “an improvement in the functioning of a computer, or an improvement to other technology or technical field,” and, as such, satisfies Step 2A Prong Two of the §101 Guidelines. See Arguments, pp. 9-14.
Specifically, Applicant argues:
Claim 2, as amended, does not merely recite trading securities or a generic programmed computer elements of "a memory...and engine(s)". Instead, the claim recites a very specific system architecture that, while providing the ability to perform securities trading, also imposes meaningful limitations on how this is performed. Claim 2, in summary requires:
Three separate data interfaces -- an "order interface", a "market data interface, and a "trade reporting interface";
An order book database that stores records and additional non-order information in the form of a "marketable flag".
An "IO handler module" that receives incoming orders from the order interface and adds them to the order book;
A "quote handler engine" that receives first market data from the market data interface and uses that to update marketability status of orders in the order book;
a "matching engine" that generates and maintains match records for compatible marketable orders; and
a trade processor that generates fills for matched orders in response to second market data received from the market data interface and that sends information about the fills over the trade reporting interface.” See Arguments, pp. 10-11 – emphasis added.
The Examiner respectfully disagrees.
MPEP § 2106.04(d) recites:
If the identified limitation(s) falls within at least one of the groupings of abstract ideas, it is reasonable to conclude that the claim recites an abstract idea in Step 2A Prong One. The claim then requires further analysis in Step 2A Prong Two, to determine whether any additional elements in the claim integrate the abstract idea into a practical application.
Under Step 2A Prong Two, the additional elements (i.e., computerized elements) are analyzed to determine whether the additional elements integrate the abstract idea into a practical application.
The claimed invention, as written, does recite additional elements to perform the abstract idea but mere utilization of additional elements (i.e., computerized elements) to implement the abstract idea is not enough to satisfy Step 2A Prong Two.
For example, under Step 2A Prong One, the abstract idea comprises managing an order book which stores records and additional non-order information in the form of a “marketable flag.” Managing an order book (i.e., a book used to record the interest of buyers and sellers in a particular financial instrument) is a fundamental economic practice.
The claimed invention recites that the order book is embodied by a database, an additional element. However, the additional element of a database to implement the abstract idea of maintaining an order book is insufficient to satisfy the criteria established in MPEP §2106.04(d).
MPEP §2106.04(d) recites:
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);
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 § 106.05(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).
Neither the claims nor the specification indicates that the additional elements (i.e., computer elements) have integrated the abstract idea into a practical application under any of the five categories for indicating a practical integration.
MPEP §2106.04(d) also recites:
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).
Generally linking the use of a judicial exception to a particular technological environment or field of use, as discussed in MPEP § 2106.05(h).
Examiner asserts that the additional elements amount to merely (1) including instructions to implement an abstract idea on a computer or merely using a computer as a tool to perform an abstract idea, or alternatively, (2) linking the use of a judicial exception to a particular technological environment or field of use.
Applicant further argues:
In addition, the claimed order book is not merely a generic database with order data. Instead, the order book contains additional non-order data in the form of a "marketable flag" that is generated and updated as the system operates. The addition of the "marketable flag" and the independently operating quote handler engine improves system efficiency as a whole by allowing the system to more quickly filter through the set of orders to identify that subset of orders in the orderbook that can be considered for processing. The improvement in the database structure to increase efficiency is analogous to the improvement in database architecture found to improve technology in Enfish, LLC v. Microsoft Corp., (MPEP 2106.04(d)), and therefore establish that the claim recited patentable subject matter. See Arguments, p. 12 – emphasis added.
The Examiner respectfully disagrees.
MPEP §2106.05(a) recites:
If it is asserted that the invention improves upon conventional functioning of a computer, or upon conventional technology or technological processes, a technical explanation as to how to implement the invention should be present in the specification. That is, the disclosure must provide sufficient details such that one of ordinary skill in the art would recognize the claimed invention as providing an improvement. The specification need not explicitly set forth the improvement, but it must describe the invention such that the improvement would be apparent to one of ordinary skill in the art. Conversely, if the specification explicitly sets forth an improvement but in a conclusory manner (i.e., a bare assertion of an improvement without the detail necessary to be apparent to a person of ordinary skill in the art), the examiner should not determine the claim improves technology. – emphasis added.
The specification does not provide any evidence that there is a technical problem (i.e., a technology-based problem) to be solved. For example, the specification does not provide any evidence that there was a technology-based problem that prevented existing and conventional technology from performing the claimed process.
The specification does not provide any evidence that the claimed invention results in an improvement to the functioning of a computer, or an improvement to conventional technology or technological processes. For example, the specification does not provide any evidence that the functionality of a computer or conventional technology has been improved, or their technological capabilities have been expanded beyond their existing capabilities.
As to the indirect improvements to the technology (e.g., improved efficiency) based upon performance of the claimed invention, any software can be argued to have improved a computer. It can always be argued that the software runs the process more efficiently thereby reducing the demands placed on the computer system.
In the claimed invention, the computer has not been improved. The non-technological process that the software is performing may have been improved but, according to Alice, improving the process without any technological innovation is not statutory. To be “directed to a patent-eligible improvement to computer functionality,” the claim “must be directed to an improvement to the functionality of the computer or network platform itself.” Customedia Techs., LLC v. Dish Network Corp., 951 F.3d 1359, 1365 (Fed. Cir. 2020) (citing Enfish, 822 F.3d at 1336-39).
The computer still operates according to its known and standard capabilities. A reduction of load on the computer does not bring about an improvement to the computer, it merely offers resources to other processes that are running on the computer.
As to Applicant’s assertion that the claimed invention is analogous to Enfish, LLC v. Microsoft Corp. (Fed. Cir. 2016).
The Examiner respectfully disagrees.
The court in Electric Power Group LLC v. Alstom SA (Fed. Cir. 2016) stated:
The claims here are unlike the claims in Enfish. There, we relied on the distinction made in Alice between, on one hand, computer-functionality improvements and, on the other, uses of existing computers as tools in aid of processes focused on “abstract ideas” (in Alice, as in so many other § 101 cases, the abstract ideas being the creation and manipulation of legal obligations such as contracts involved in fundamental economic practices). Enfish, 822 F.3d at 1335-36; see Alice, 134 S. Ct. at 2358-59. That distinction, the Supreme Court recognized, has common-sense force even if it may present line-drawing challenges because of the programmable nature of ordinary existing computers. In Enfish, we applied the distinction to reject the § 101 challenge at stage one because the claims at issue focused not on asserted advances in uses to which existing computer capabilities could be put, but on a specific improvement—a particular database technique—in how computers could carry out one of their basic functions of storage and retrieval of data. Enfish, 822 F.3d at 1335-36; see Bascom, 2016 U.S. App. LEXIS 11687, 2016 WL 3514158, at *5; cf. Alice, 134 S. Ct. at 2360 (noting basic storage function of generic computer). The present case is different: the focus of the claims is not on such an improvement in computers as tools, but on certain independently abstract ideas that use computers as tools. see Electric Power Group LLC v. Alstom SA, 119 USPQ2d 1739, 1742 (Fed. Cir. 2016) – emphasis added.
The claimed invention is not an improvement to computer technology or computer functionality. Rather, the claimed invention is applying a computer’s existing capabilities to implement a particular abstract idea. As in Electric Power Group, the focus of the claimed invention is not on an improvement in computers as tools but on improving an abstract idea (i.e., processing a trade order for a security) that uses computers as tools.
Applicant asserts similar arguments pertaining to dependent claims, which Examiner refutes on the same basis utilizing the same rationale. See Arguments, pp. 13-14.
Additionally, Applicant argues that the claimed invention is analogous to Example 41: Cryptographic Communications. See Arguments, p. 14.
The Examiner respectfully disagrees.
As a preliminary matter, the Examiner notes that Office Examples are meant to be for training purposes and do not have the force of legal precedent.
Example 41 is a cryptographic communications improvement via an algorithm to encrypt plaintext messages.
Example 41 was not determined to have satisfied Step 2A Prong Two just because the “input data is transformed and transmitted.” See Arguments, p. 14.
Example 41 was determined to have satisfied Step 2A Prong Two as an improvement to cryptographic communications is an improvement to computer technology and/or computer functionality. An improvement to cryptographic communications is an improvement to computer technology and/or computer functionality as “the claimed [encryption] solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.” See DDR Holdings, LLC v. Hotels.com, 113 USPQ2d 1097, 1106 (Fed. Cir. 2014).
However, the specification in the instant case does not provide evidence that the claimed invention is directed toward solving a technological problem via an improvement to the functioning of a computer or other technology.
Step 2B
Applicant argues that the additional elements amount to “significantly more” than the abstract idea and, as such, satisfies Step 2B of the §101 Guidelines. See Arguments, pp. 14-15.
The Examiner respectfully disagrees.
The claim(s) do not include additional elements that are sufficient to amount to significantly more than the judicial exception.
Upon reconsideration of the indicia noted under Step 2A in concert with the Step 2B considerations, the additional claim element(s) amounts to no more than mere instructions to apply the exception using generic computer components. The same analysis applies in Step 2B, i.e., mere instructions to apply an exception using a generic computer component cannot integrate a judicial exception into a practical application at Step 2A or provide an inventive concept in Step 2B. The claim does not provide an inventive concept significantly more than the abstract idea.
Accordingly, these additional elements, when considered separately and as an ordered combination, do not integrate the abstract idea into a practical application because they do not impose any meaningful limits on practicing the abstract idea.
6. Conclusion
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 JASON M. BORLINGHAUS whose telephone number is (571)272-6924. The examiner can normally be reached M-F 9-5.
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, RYAN D. DONLON can be reached on (571)270-3602. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300.
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/Jason M. Borlinghaus/Primary Examiner, Art Unit 3692 September 27, 2026
