Appeal No. 2005-1674
Application 09/613,153
the patentability of those claims over Kiron et al. U.S. Patent 5,806,048 (Kiron), which was the
basis of a rejection of those claims under 35 U.S.C. § 103(a). Kiron discloses a open fund
securitization process which
will allow for the first time: (a) intra-day trading of an unlimited number
of mutual fund indexes comprised of open end funds; (b) intra-day trading
of an unlimited number of open end mutual funds with a greater degree of
liquidity; and (c) intra-day trading of derivative securities linked to open
end funds and indexes of open end funds.
Kiron, col. 2, ll. 57-63. This process is achieved by creating a second type of security, which
will invest substantially all of its assets in the targeted open end mutual fund shares. Id. at col. 2,
ll. 64-66. The preferred embodiment of this new security is a "closed end fund of funds," which
has a fixed number of shares outstanding and a constant portfolio which is invested exclusively
in the shares of the targeted open end fund(s). Id. at col. 2, l. 66 to col. 3, l. 3.
Figures 1A and 1B of Kiron represent how an open-end mutual fund index is created in a
general data processing computer. These figures represent computer requirements and also
comprise a schematic flowchart of process operating therewithin. Id. at col. 4, ll. 1-5. Box 10 in
Figure 1A represents an electronic database (a "master database") of extensive statistical
information stored in a computer containing the entire universe of open end mutual fund
statistics in existence registered in the defined country or geographic area. Id. at col. 4, ll. 13-18.
The preferred embodiment of the database includes extensive statistics for each open end fund,
including, inter alia, the fund net asset value (N.A.V.) for each year, the price/book ratio, and the
as "on."
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