Obviousness

Obviousness Analysis under 35 U.S.C. § 103 for US11315090

This analysis considers the obviousness of US Patent 11315090, "System and method for automated optimization of financial assets," in light of the prior art acknowledged within the patent document itself. The patent's priority date is January 28, 2014. A person having ordinary skill in the art (PHOSITA) in financial technology and software development would be aware of the prior art systems and the problems they presented as described below.

Prior Art Base and Known Problems

The patent explicitly identifies several aspects of prior art:

1. Automated Cash Sweep Systems: The patent states that "Prior attempts to optimize returns on financial assets using, for example, automated cash sweep systems, have sought to allocate cash across multiple accounts so as to provide increased FDIC insurance protection, but not necessarily to optimize interest yield." [Description] This establishes that systems for automatically moving funds between accounts for insurance purposes were known.
2. Brokered Deposit Systems: The patent describes these as systems where "deposits are sold from bank to bank." [Description] It notes several deficiencies:
   • They are "less attractive, since banks are only willing to pay below-market interest rates for such deposits." [Description]
   • They "may not provide full insurance to the account holder/user" due to potential overlapping deposits. [Description]
   • Accounts are "not directly held by the user and therefore cannot be directly accessed by the user without coordination with the cash sweep administrator." [Description]
3. Electronic Funds Transfers (EFT): The patent mentions "Automated Clearing House (ACH) transfers or wire transfers such as FedWire transfers" as known mechanisms for transferring funds. [Description] It also highlights that "online banking institutions allow for funds to be transferred into or out of their online savings accounts via ACH transfers, which they provide to their customers free of charge." [Description]
4. Limitations of Checking Account Transfers: The patent implicitly, and at times explicitly, points to fees and limitations associated with initiating transfers from traditional "brick and mortar" checking accounts. It contrasts this with online banks offering free ACH transfers initiated by savings accounts. [Description]
5. Multi-factor Authentication: The patent acknowledges that financial institutions use multi-factor authentication protocols, which require additional steps beyond username and password for account access. [Description]

Motivation for Combination and Obviousness Analysis

A PHOSITA, faced with the known deficiencies of prior art automated cash sweep systems and armed with common knowledge of financial account management and electronic transfer methods, would have been motivated to combine and modify these known elements to achieve the improvements claimed in US11315090.

1. Motivation to Optimize for Interest Yield (Applicable to Claims 1, 12, 14, 18):
The patent explicitly states that prior art sweep systems primarily focused on FDIC insurance coverage, "but not necessarily to optimize interest yield." [Description] The challenge of "optimizing the allocation of his or her financial assets among such accounts to obtain the best overall interest return" was a known problem for account holders. [Description] A PHOSITA would naturally be motivated to improve upon existing sweep systems by designing an optimization algorithm that prioritizes higher interest rates, alongside maintaining insurance coverage and other constraints. This directly addresses the stated deficiency of prior art systems.

2. Motivation to utilize User-Held, Non-Brokered Accounts (Applicable to Claims 1, 12, 14, 18):
The patent criticizes brokered deposit systems for offering "below-market interest rates," presenting "lower tier of capital from a regulatory perspective," and potentially causing "uninsured deposits" due to overlapping accounts. [Description] Furthermore, in brokered systems, accounts are "not directly held by the user and therefore cannot be directly accessed by the user without coordination with the cash sweep administrator." [Description] A PHOSITA would be motivated to develop a system that allows users to directly hold and access their accounts to achieve "higher interest rate[s]" and "more favorable regulatory treatment" [Description], while enabling direct user control over insurance limits. This would involve configuring the financial management network to interact with the user's conventional deposit accounts rather than brokered ones.

3. Motivation for "Passive Checking Account" and Savings-Initiated Transfers (Applicable to Claims 1, 12, 14, 18):
The patent identifies a "unique and inventive concept" in its architecture where "any transfers of funds required to achieve optimized interest returns originate as requests made by online banks through the Automated Clearing House (ACH) for either an ACH credit to the user's linked checking account or as an ACH debit that pulls funds from the checking account." [Description] The motivation for this is clearly stated: "this arrangement avoids funds transfer limitations often imposed by brick-and-mortar banks, as well as fees that are normally charged for funds transfers from a checking account." [Description]

A PHOSITA would be aware that:

• Online banking institutions offer "free of charge" ACH transfers initiated from savings accounts. [Description]
• Traditional checking accounts may impose "funds transfer limitations" and "fees." [Description]

Therefore, it would be obvious for a PHOSITA, seeking to overcome these known limitations and costs in automated fund transfers, to implement a system where the "online banks" (specifically, the savings accounts) initiate the ACH transfers (credits to or debits from the checking account). This design choice leverages existing, known, and advantageous functionalities of online banking and ACH networks to improve upon prior art sweep systems that might have relied on checking-account-initiated transfers.

4. Motivation for Automated Multi-Factor Authentication Handling (Applicable implicitly to Claims 1, 12, 14, 18, where full automation is enabled):
The patent describes how prior art "multi-factor authentication protocols" require user intervention. [Description] The invention proposes a method where the product program can "add[] to the user data stored by the site an additional multi-factor authentication endpoint... that is accessible either directly by the product program 110 or, in some cases, via a third-party software service provider, and to which subsequent authentication codes may be sent." [Description] The motivation is to allow the "financial management network 100 to directly respond to a multi-factor authentication request within the user present" [Description] and achieve full automation without ongoing user intervention. A PHOSITA, seeking to fully automate financial management systems that interact with online banking, would be motivated to incorporate known techniques for handling multi-factor authentication, such as registering an additional endpoint (e.g., an email address or phone number controlled by the system or a proxy) to receive and respond to authentication challenges.

Conclusion

The independent claims of US11315090 would have been obvious to a PHOSITA by combining the features of known "automated cash sweep systems" (for asset allocation and FDIC protection) with the general knowledge of online banking capabilities (free ACH transfers initiated by savings accounts), the deficiencies of "brokered deposit systems," and the challenges of traditional checking-account-initiated transfers and multi-factor authentication.

The motivation to combine these elements arises directly from the explicit problems identified in the patent's background:

• A desire to optimize for interest yield in addition to FDIC coverage. [Description]
• A need to avoid the disadvantages of brokered deposits by using conventional, directly-held accounts. [Description]
• A drive to overcome transfer fees and limitations by leveraging the "passive checking account" and savings-initiated ACH transfers. [Description]
• A goal to achieve full automation by handling multi-factor authentication without constant user intervention. [Description]

These motivations represent predictable solutions to known problems in the art of financial asset management. Therefore, a PHOSITA would have been motivated to combine these known elements in a predictable manner to arrive at the claimed systems and methods.